MIDHANI - Mishra Dhatu Nig

📊 NSE: MIDHANI 🏢 Steel - Medium / Small 📅 Last Updated: 12/14/2025 9:53

💰 Financial Performance

Revenue Growth by Segment

The Defence sector dominates the order book with a share of over 80% as of January 2025. Total turnover for H1 FY26 was INR 380.22 Cr, representing a 10.65% decrease from INR 425.57 Cr in H1 FY25. Q2 FY26 turnover was INR 209.73 Cr, down 19.98% from INR 262.12 Cr YoY. Despite the revenue dip, the Value of Production (VoP) for H1 FY26 grew 3.9% to INR 497.67 Cr, indicating high work-in-progress that is expected to convert to revenue in Q3 and Q4.

Geographic Revenue Split

The company is primarily domestic-focused due to its strategic importance to the Government of India, with exports/income from overseas totaling INR 94.19 Cr in FY25 against a target of INR 150 Cr. Domestic revenue is heavily concentrated in government-led projects for Defence and Space (ISRO).

Profitability Margins

Net Profit Margin improved to 10.25% in FY25 from 8.51% in FY24, a 20.45% increase. However, H1 FY26 PAT margin stood at 6.73%. Operating Profit Margin for FY25 was 11.65%, up 23.67% from 9.42% in FY24. Margins are sensitive to product mix shifts, particularly the ratio of super alloys to higher-margin titanium alloys.

EBITDA Margin

EBITDA margin for H1 FY26 was 21.82%. The management has guided for a full-year FY26 EBITDA margin of approximately 23%, aiming for a 200-300 bps expansion over previous levels through better operating leverage and a favorable product mix in the second half of the fiscal year.

Capital Expenditure

MIDHANI invested INR 49.92 Cr in CAPEX during FY25, focusing on modernization and commissioning new facilities like the high-capacity VAR furnace. The company plans a sustained annual CAPEX of approximately INR 100 Cr over the medium term to upgrade existing facilities and R&D projects.

Credit Rating & Borrowing

The company maintains a strong financial risk profile with a gearing of 0.25 times as of March 31, 2024. Interest coverage was healthy at 8.45x in FY25 (up from 6.48x in FY24). Total debt is low, and liquidity is supported by a fund-based working capital limit of INR 350 Cr, utilized at 78% through December 2024.

⚙️ Operational Drivers

Raw Materials

Key raw materials include specialized metals for Superalloys (nickel, cobalt-based) and Titanium alloys. These materials are critical for high-temperature applications in aerospace and defense engines.

Import Sources

MIDHANI imports 50-60% of its raw materials, exposing it to global trade policy fluctuations and material price volatility. Specific sources are not named but are described as global suppliers.

Capacity Expansion

Current modernization includes the commissioning of a new high-capacity Vacuum Arc Remelting (VAR) furnace. This expansion is designed to scale production for high-value specialty alloys required by the aerospace and energy sectors.

Raw Material Costs

Raw material consumption as a percentage of revenue is significant, with the company aiming to reduce total imports consumed as a percentage of revenue from 36.98% in FY25 toward a target of 25.52%. Volatility in these costs directly impacts the operating margin, which fluctuated from 31.6% in FY23 to 19% in FY24.

Manufacturing Efficiency

Value added per employee was INR 81.86 Lakh in FY25. The company is focusing on improving operating leverage by ramping up deliveries in the second half of the fiscal year, which typically accounts for over 60% of annual revenue.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth will be driven by a robust order book of INR 1,869 Cr (as of Oct 2025), modernization of manufacturing facilities (VAR furnace), and expansion into the export market for aerospace alloys. The company is also implementing a 'Metal Bank' strategy to ensure material availability for strategic projects like the Kaveri engine and Tejas Mark-2 without straining its own balance sheet.

Products & Services

Superalloys, Titanium alloys, and Special Steels sold for use in Tejas fighter jets (Mark-2 project), ISRO space programs, and ultra-high temperature supercritical power plants.

Brand Portfolio

MIDHANI (Mishra Dhatu Nigam Limited).

New Products/Services

Development of materials for the Kaveri engine power program and ultra-high temperature supercritical power plants. R&D expenditure was 15.42% of PBT in FY25.

Market Expansion

Expanding into non-defence sectors and increasing export market penetration in the aerospace sector for high-value specialty alloys.

Market Share & Ranking

Leading manufacturer of Titanium alloys in India and a key player in the superalloys segment with strategic importance to the GoI.

Strategic Alliances

MoU-based partnerships for the establishment of a customer-owned, MIDHANI-operated Metal Bank on the company's campus.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Atmanirbhar Bharat' (Self-Reliant India), driving demand for domestic strategic materials. The aerospace and defence sectors are growing, but require high capital investment in new technologies to stay competitive.

Competitive Landscape

Competes with both domestic and foreign industries in the specialty steel and alloy segments, though it holds a preferred status for strategic government projects.

Competitive Moat

MIDHANI's moat is built on its status as a primary supplier for 'crucial' and 'strategic' GoI projects (Tejas, ISRO) and its specialized technical capability to manufacture superalloys that have high entry barriers. This is highly sustainable as long as GoI maintains its 'Buy Indian' policy.

Macro Economic Sensitivity

Highly sensitive to national security policies and government capital expenditure in the aerospace and defence sectors.

Consumer Behavior

Not applicable (B2B/B2G model).

Geopolitical Risks

Global trade policies and supply chain disruptions for specialty metals are identified as medium-probability risks that could delay operations.

⚖️ Regulatory & Governance

Industry Regulations

Subject to DIPAM guidelines on capital restructuring and dividend distribution (minimum 30% of PAT or 5% of Net Worth). Also governed by Ministry of Defence and DPE guidelines.

Taxation Policy Impact

Effective tax rate is approximately 29.4% (based on FY25 PBT of INR 156.04 Cr and PAT of INR 110.07 Cr).

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timing of revenue recognition; while production (VoP) grew 3.9%, turnover fell 10.65% in H1 FY26 due to products being in 'final stages' but not yet invoiced.