Mishra Dhatu Nigam Limited (MIDHANI) Earnings Call Transcript
August 18, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, good day and welcome to the Q1 FY '26 Earnings Call of MIDHANI hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Mohit Lohia from ICICI Securities. Thank you and over to you, sir.
Hi, [indiscernible]. Thank you and good afternoon, everyone. Thank you for joining us today for quarter 1 FY '26 Earnings Call of MIDHANI. First of all, I would like to thank management for providing us the opportunity to host the call. From the management side, we have Dr. S.V.S. Narayana Murty, Chairman and Managing Director; Mrs. Madhubala Kalluri, Director, Finance. So without further delay, I would now hand over the call to Dr. Murty for the opening remarks. Thank you and over to you, sir.
Thank you. Good afternoon to all the participants in the conference call. It's my pleasure to welcome all of you to this investor conference call of Mishra Dhatu Nigam Limited. Present with me today for the conference call is Mrs. Madhubala Kalluri, Director, Finance; and Mr. Babu, General Manager, TS, is incidentally DPM designate; and Mr. Paul Antony, Company Secretary. The detailed financial results for Q1 of FY '25, '26 have already been disclosed and they're all available with you. However, I would like to take few minutes to highlight some of the key figures from the results that were achieved during Q1 of FY '25, '26. To begin with, I am pleased to report that during the quarter ending 30th June 2025, MIDHANI has achieved a turnover of INR 170.5 crores, marking a growth of 4.31% compared to INR 163.45 crores recorded in the corresponding quarter of the previous year. Importantly, the value of production stood at INR 241.29 crores, reflecting a healthy growth of 14.47% over INR 210.79 crores in Q1 of previous financial year. In terms of profitability, the EBITDA for the quarter stood at INR 41.28 crores, a growth of 32.8% over the previous year's INR 31.07 crores. The profit before tax reached INR 19 crores, registering a growth of 112.05% over INR 8.96 crores in Q1 of the previous year. Profit after tax was INR 12.8 crores, reflecting a growth of 150.49% compared with INR 5.11 crores recorded in the same quarter last year. Additionally, our order book position remains robust at INR 1,827 crores as on 1st July 2025 and this gives good visibility for FY '25, '26. To conclude, I reiterate that MIDHANI, we remain committed to supporting the strategic sectors of the nation while also enhancing shareholder value. I look forward to your response -- questions and hope to addressing them and the queries you may have. So thank you. With these few opening remarks, I welcome all of you to the further discussions.
[Operator Instructions] The first question comes from the line of [ Amit Dixit from Goldman Sachs ].
A few questions from my side, sir. The first one is regarding the utilization of your titanium mill. So as I understand, recently, I think a couple of quarters back, we commissioned 500 tonne per annum mill. So just wanted to understand the orders that you have currently and the current utilization of this mill. That is the first question.
Okay. So just to answer your question, we have orders for titanium...
Yes. Healthy order book of titanium...
Titanium. We have a order book value for INR 440 crores plus. So currently, we are fully utilizing our facilities and we are ready to execute orders already in hand and we are also expecting a few more orders from other customers.
So this order book is executable over how much period?
It is about 1.5 months -- 1.5 years, 1.5 years.
Got it, sir. Got it. The second question is on essentially the -- if I look at the -- it is a -- I mean, a wider strategic question. So if you look at the Government of India's endeavor and just taking a cue from the Prime Minister's speech on Independence Day, wherein he said that the domestic fighter jet should have domestic engines. So what kind of opportunity we see for MIDHANI in this respect, given the fact that we have already been developing a few components for Kaveri and indigenizing the other components also for engines. So if you can give a wider strategic framework that how we are collaborating for maybe development of engines for Mark II and maybe for AMCA, if anything has started. So yes, so that would be very helpful, sir.
Okay. So thank you for this question. Actually, any fighter jet program or any -- in fact, any aero engine program, basically, it uses 3 kinds of strategic materials. So it uses very high-strength steels, some precipitation hardening steels, very high -- ultra-high strength steels, in fact. And it uses extensively superalloys because the temperatures that go into -- during operation will be -- will demand the utilization of superalloys and of course, titanium alloys because of its superior specific strength -- strength to density ratio. So keeping in view of these 3 things, these are the 3 main materials for MIDHANI. All -- we are very strong in all these things. And as you mentioned, in Kaveri engine program also, MIDHANI was closely associated with GTRE and we have developed a number of grades and successfully qualified, type tested and they have been used. Now coming to the future one, the question regarding AMCA, we are really expecting orders. Already, we are having good number of orders from HAL. And we expect a significant number of orders for these upcoming projects also.
Got it, sir. The third question is essentially, if I look at the margins, they have improved. I mean they were -- at one point in time, they went all the way down to 14-odd percent. But now we are seeing a trajectory where margins are between 20% to 22%. The only thing lagging is revenue growth, which remains quite subdued in single digits, I would say, for this quarter. So just 2 key points here. One is that on revenue, what kind of growth can we expect this year? And margins, is this 20% to 25% odd range sustainable?
Yes. With respect to the margins, we can expect like in Q1, if you look at it, EBITDA margin is 24% -- 24.22%. So we are expecting that even for Q2, Q3, the whole year that the EBITDA margins will be at the same range between 23% to 25%, we can expect. That's what we are looking at it. And with respect to the revenue growth and all, yes, as he has already mentioned that we are having a good order book. And last year, we have achieved INR 1,074 crores turnover. And this year, we are planning to achieve around INR 1,300 crores in minimum. But however, we have a target of INR 1,500 crores, we are aiming for INR 1,500 crores. But internally, we are confident that we will definitely be crossing INR 1,300 crores and we will be aiming at INR 1,500 crores also.
That's great, sir. Wonderful. Another question that I had and this is the last question from my side before I move back in the queue. So it is on the order book itself. So if you can break this into various segments, how much it is from defense, how much it is from railways, et cetera, that would be very helpful, [indiscernible] also.
We'll let you know.
Okay. Percentages you are looking for or...
Sir, anything will do. I mean if you have [indiscernible] in percentage, I can convert it to numbers, that's fine.
Out of INR 1,827 crores is the order book, on that the aero is around -- aero is INR 761 crores, INR 761 crores aero sector. And army is also around INR 156 crores. And the next highest, we have naval also, we are having INR 422 crores, around INR 420 crores like that.
Presently, we are having around 80% from defense only. That related to all aero, army, naval, everything. Remaining 20% only. Now presently, actually, we already finalized the order with the space that may come maybe in a year -- in a month or 2. So then the space will go up. Otherwise, presently, it is 80-20, 80 is the defense related, 20 is space, energy and other, including exports.
The next question comes from Sucrit Patil with Eyesight Fintrade Private Limited.
I have 2 questions. First for Mr. Murty and the second is for Mr. Madhu -- Mrs. Madhubala. So my question for you is, as MIDHANI strengthens its role in strategic sectors like defense and aerospace, how are you planning the evolution of your product portfolio, especially in terms of proprietary alloys, addictive -- additive manufacturing and export-grade certifications, is there any plan of action to transition from project-based execution to a platform-led innovation that could position the company as a global supplier of these critical materials? Yes, sir.
Okay. So thank you, Mr. Patil. So first of all, your first question is -- see, we are a company with maybe about 52 years of existence and more than 40 years of production. And our core strength is our new alloy development. Basically, we have in our portfolio about 500 types of alloys, which have been exclusively designed for strategic sectors like defense, space and nuclear, out of which about 100 grades are exclusively for aeronautical grades that is used in aircraft. And regarding proprietary, yes, MIDHANI developed many grades and we have a number of proprietary grades either coming from ToTs or internally developed. So our core strength is alloy development. With respect to your additive manufacturing question, yes, we have idea of entering it. In fact, we wanted to go for powder manufacturing. So already, we are in the process of establishing powder manufacturing facility because AM is coming up in a big way. And we expect some of the powders -- many of the powders are imported, strategic alloy powders. Some powders are available but still country imports large number -- large quantities of powders because AM is within the country is also growing up significantly. So visualizing this about an year or so back, we have already -- we have put orders for some of the equipments. And soon, we will be establishing facility for manufacture of strategic products that is with respect to AM. And export grades, a large number of our products are getting exported -- to more than 20 countries we export. And your question on project-based to platform-based, see, currently, majority of the products we -- our customers are -- our strategic departments of space, defense and nuclear. And they -- depending on the project approvals, they give us orders and platform-based, okay, it depends on their priorities, okay? So we are ready to work on any mode. We are ready to take up any kind of challenging work. So we are looking forward, whenever there is a new platform that is going to be introduced or I mean, any new project that gets approval, we are ready to work with the stakeholders and develop new grades or existing grades we are ready to supply. So MIDHANI is fully prepared and our core strength will be utilized in satisfying the needs of all our customers.
Okay. Great. And my second question is to Mrs. Madhubala. Is ma'am online?
Yes, please go ahead. She is here.
Yes, yes. Okay. So I just want to understand from a finance point of view, how do you internally prioritize capital between capacity expansion, R&D and certification-led market access? Is there any framework that balances near-term execution with long-term global competitiveness? I just want to understand your point of view on this.
See, the question is relating to how to differentiate between CapEx long term and short term. We have plans -- for day-to-day things we are going with our internal resources. In case of long term relating to company goals as well, we have major projects which we are envisaging with detailed analysis. And based on the market potential and the demand for the products, we are going ahead with -- on-to-case basis after thorough review of projects.
The next question comes from Dipen Vakil from PhillipCapital.
Sir, on looking at our order book, so we are seeing that we have a current order book of close to around INR 1,800 crores. And this year, we are targeting some INR 1,300 crores, so which implies that majority of our order book would be depleted in this year. So can you give us some thoughts in terms of what are the new orders expected in this year, specifically from the domestic side? And also if you can throw some light on the defense -- sorry, demand scenario from -- on the international front also since we're exporting to more than 20 countries. So what kind of opportunities are we seeing from the export region as well? That is my first question.
Yes. Thank you very much. The expected order -- what is order in hand, INR 1,827 crores, we are expecting in Q2 order worth of INR 701 crores already where we are under different stages of negotiations and all. So we are expecting in Q2 about INR 700 crores of orders.
Sir, and can you throw some light on the demand scenario in domestic as well as exports as to what are the opportunities that we are seeing? And because almost every countries are now increasing their defense spending. So what kind of opportunities that we -- MIDHANI also plans to target? And what kind of inquiries that we are also witnessing?
Yes, there are significant number of orders in pipeline, particularly aerospace, space, energy, missiles, naval export. I mean, from every sector, we are having good number of orders, particularly from space, we are expecting a significant order of high value. Aero and missile sector also, we are expecting significant orders in this quarter. So hopefully, they will be coming. And the export scenario also is very good because of the geopolitical [ seasons ] elsewhere, people are approaching. So hopefully, we'll be able to get some good orders for exports also.
So out of the INR 1,800 crores, what would be the quantum of export orders?
Exports are for INR 35 crores out of INR 1,800 crores.
Got it. And what would be the key geographies for your export clientele?
Okay. There are around 22 countries are there. Yes, European origin mostly.
The next question comes from Henil Bagadia from Equicorp.
I have one question. Sir, I've got a few questions. So first is related to the wide plate mill. So the wide plate mill, what is the current utilization and the fixed overheads? Sir, and going forward, as you said that as you see the ramp-up in utilization, you'll also see better margins. So I mean, right now, we are guiding for 20% to 25% EBITDA margins. And I think after it reaches optimum, it should be between 25% to 30%. So sir, 2 parts there. So one, what are the kind of wide plate are we concentrating on? Is it more towards aluminum? Or is it more towards titanium? Sir, and what is the competitive scenario there? Because globally, China is the largest in aluminum and it's very price competitive there but titanium is more strategic. Sir, and as our current titanium capacity is almost fully utilized, so if you ramp up the wide plate mill, you'd need more titanium. So I mean, where would you go on the CapEx side for titanium and some more clarity there?
Okay. Thank you, Mr. Bagadia. It's a good question. Actually, our current WPM utilization is about 40%, okay? So there is a good spare capacity. We are in discussion with many of our customers to convert some of the products into plates because one unique thing about our wide plate mill is this is one mill having a width of 3.2 meters and we can roll very hard steels like maraging steel. Not only that we have recently started using it for rolling of superalloys and titanium alloys. So certainly, it has got some place where it can take more load. With respect to aluminum, it is not in the main portfolio of MIDHANI but we are -- we have been -- there have been inquiries from many people who are looking for using our wide plate mill and we are also keen on taking up because of our spare capacity. So if something works out in the near future, we'll also be reporting some rolling of aluminum. But definitely, we are looking at titanium and superalloy plates. Wherever possible, we are interested to take up and we are taking up also currently.
Sir, so on the titanium part since we are, I mean, at optimum utilization already. So you would have to do more CapEx on the capacity side. So any clarity there as to when you plan to allocate funds and when the new titanium blast furnace will be operational?
No, already we have -- yes, we have already invested in titanium. We have established titanium processing facility, dedicated titanium vacuum arc remelting facility has been established with INR 50 crore investment. And yes, we are already fully utilizing. On titanium side, we have orders in hand as well as we are fully utilizing it.
For future orders of -- and for the utilization of capacity, you'll need more titanium capacity. So would you import it or would you source it in-house?
No, no, no. We don't import. Everything is -- I mean, you mean raw materials or you mean...
No, no, the titanium ingots.
No, no, we don't import. We make from raw materials, we make, we melt the alloy. And we supply to different customers in different formats, plates, sheets and bar product as well as even up to wire, we can make it of different sizes. So we don't import. We have been making and we make these titanium products in-house within MIDHANI.
Okay. Sir, secondly, on the aero engines and the aerospace side. So we developed a new alloy about 2 quarters back, the 718 nickel alloy. So sir, right now, there has been a lot of traction in the aero engine and the aerospace market. So I mean, there have been good order buildup for CFM, GE, Pratt & Whitney and Rolls-Royce, the 4 main companies. So sir -- and we are empaneled on all 4 companies as a supply chain partner. So what is our rank on their supply? Because it's about a 2 or 3 -- it's a 3- or 4-player market in terms of vendor sourcing. So I mean, what rank do we have there? Sir, and how are we -- how is the orders shaping up from these companies? Sir, also a connected question is on the MRO side. So Safran's Hyderabad MRO is just going to get completed by this year-end. So sir, are you empaneled also with Safran in terms of supply because this happens to be for -- I mean, the LEAP engine as well as they might extend it to the Rafale aero engine MRO supplies too.
Alloy 718 is one of the most, I mean, important superalloy in this kind of category for high temperature applications. It's used extensively where materials are required to be used up to 650 degrees celsius and MIDHANI is leader in this class of material. So we make these superalloys. And we supply to right from ISRO, DRDO, many, many customers we supply this material. And you mentioned Safran and all, there are many foreign customers who come and ask for audit of our plant and we work with them closely. And we are expecting exports from these very niche customers and because they are in touch with us to give orders. And hopefully, in a quarter or 2, we'll be able to deal -- have a -- close the deal with some of these customers, foreign customers.
So sir, are we empaneled with all the 4 engine makers, the top 4 engine makers?
No, we are having -- we are in discussion with them. And some of the people already we are supplying also.
Okay. Sir, one more -- sir, this is the last question before I get in the queue. Sir, regarding the ultra-high megawatt power plant, sir, we had some products for supply. So I mean, right now, the government is -- as I -- I think, sir, they have released funds and they are pretty active in getting the plants. So are we seeing orders there because we've got certain superalloys, which is there -- which is being used for the super -- advanced super critical application. So sir, if you could just allude, I mean, are the orders flowing in? Or do we -- do you see more time for the orders to come in?
See, with respect to ultra-high temperature, [ UHFC ], we already we have developed one alloy, actually one named Indian High Temperature alloy. We have already developed in collaboration with NFC, IGCAR, Kalpakkam and NTPC. And we have already developed some -- few products for this particular thing. It is called 740H. So technologically, we are ready. We are expecting order any time.
Is it similar to the alloy that IIT Bombay has recently developed and they're claiming 50% efficiency on the boiler side? Is it -- like they're having a different product and we have a different product?
No, I do not know the alloy you are talking about. But this -- we are working with our [ UHFC ] people and these are the products that are going to be used. There may be many new developments of improved efficiency and all but this being a very important thing, we already have discussion with Indira Gandhi Centre and Nuclear Fuel Complex for extrusion. So we have already developed these materials for that, which has been frozen in the design and we hope to get orders soon from them.
Just a clarification, sir, on the...
I'm sorry to interrupt, Henil. Could you please rejoin the queue for more questions.
No, no, it's just a clarification with respect to what sir said. So sir, regarding the clarification, is these products just used in the advanced super high critical boilers? Or is it also used in the other boilers that goes into it? Because I mean the overall boiler as a portfolio is about 30% to 35% of the power project cost. I was just trying to estimate the kind of bill of material we will supply to the [ GAIL ] and other vendors, which in turn will supply it to the power projects.
Yes. These are exclusively for ultrahigh temperature, ultra-super critical project. And these are very niche application -- I mean, niche products, okay, demanding very high specifications. And we specifically go into this, whatever I mentioned.
The next question comes from the line of Abhishek Jain from Alpha Accurate (sic)[ AlfAccurate ].
Congrats for a strong set of numbers, sir. As you mentioned that you are confident of...
Sorry to interrupt, Abhishek, could you please speak on the handset mode? You're not quite audible.
So sir, as you mentioned that you are confident of around INR 1,300 crores during this year and you're trying for INR 1,500 crores kind of number. That means in the coming quarter run rate will be INR 375 crores to INR 380 crores. So just wanted to understand how would be the quarterly progress in the turnover and the order book or most of the orders will be executed in the second half onwards?
Yes. So see, already we are having INR 1,827 crores worth of orders. We are expecting around INR 701 crores of orders in Q2. So put together, we are having enough orders in hand. So we are having the -- all the facilities running, we should be able to make it. So we are confident, as on today, we have no other issues with respect to meeting the demands of the customers with respect to time schedule.
So how would be the execution -- so most of the executions will be in the second half only or it will start to ramp up from the second quarters onwards?
No, it will be staggered. No, it's -- see, deliveries are -- I mean, alloy making is a time-taking thing. Depending on the product, we have to melt and do the downstream operation. So sometimes it takes longer time, like, for example, you have sheet products and tube products, wire products, it will take longer time compared to bar products. So the -- it depends on the product shape basically on how long it will take and it will be staggered up to Q4.
Okay. And in this quarter, the gross margin expansion was significant. It is because of the change in the virgin versus scrap composition or fall in the raw materials prices?
Yes, there are multiple. Definitely, there is efficiency in the raw material cost. The raw material costs has reduced. And also, as we discussed, the production has increased. See, when the production has increased, obviously, the overheads, the burden per tonne -- burden per the unit will come down, right? So that is how -- that is one factor. And the second is the raw material utilization, even the prices also when compared with the previous -- last year's Q1, the prices have come down, raw material prices. So the last year, we are actually -- it's at very high rate. So that is also second component. And also on top of it that as we are already mentioning always that we are now using virgin and scrap mix wherever there is a possibility and of course, with the confirmation from the customers. So that is also giving us some savings with respect to the raw material cost. So these are the things which are contributing for the good margins when compared to the previous Q1.
[Technical Difficulty]
Abhishek, you're not audible at all. Your audio is not clear.
[Technical Difficulty]
Your voice is breaking.
Are you able to hear me now?
Yes.
So my question was on the scrap inventory. So are you exploring any plans for dedicated scrap [Technical Difficulty]
I'm sorry, actually, your voice is again breaking. We are not able to...
Are you able to hear me now? Is it fine?
Sometimes, yes, again. Otherwise, again, after you start, then the voice is breaking.
Okay. Sir, my question was on high scrap inventory. So just wanted to understand, are you exploring any plans for dedicated scrap processing or recycling plant to improve cost efficiency?
No. Presently, whatever means that's what the returns generated in-house, those things we have a method of segregating, means, again, alloy-wise, grade-wise and we're able to make use it. So there is no any separate scrap processing like any -- maybe separate, only people who is dealing scrap they may need such type of thing. Here, whenever we are manufacturing batch, where we are taking up on alloy, we'll be continuing with that. And separately, we are keeping it and tracking. And again, we are reusing it in, wherever required, the cleaning part that we are taking care. There is no separate scrap processing unit is required.
Okay. And my last question on the -- your orders with the HAL. Can you throw some more light on the size and the durations and the potential for the repeat order?
Okay. So we are currently having -- our orders with HAL are for superalloys basically steels and superalloys and titanium alloys. So we are in the process of executing. And once the orders are completed, there is a possibility. So depending on the orders they get from their indentors, whenever they are getting for more aircraft or anything, similarly, they will put orders with us because these are all the regular grades of MIDHANI, they come back to us. So it depends on how many orders they get basically.
And what is the size of the current orders with the HAL?
Total, it will be around INR 750 crores.
Total order INR 750 crores.
INR 750 crores. Yes.
[Operator Instructions] The next question comes from Venkatesh from LogicTree consultant.
Sir, I have 2 questions. Question one is, you indicated the order book -- present order book and the possible orders you'll get in Q2. But mine is a slightly long-term vision, sir, considering the big opportunity across sectors, both on the domestic and export side, if I have to take a 3- to 5-year view on MIDHANI, what is the kind of internal vision that you have, sir? What is a broad number that we can look at as a company if you want to stay invested for 3 to 5 years?
Yes. Thank you for your question. Actually, okay, this internally, we usually discuss. So we are having both short-term targets as well as long-term targets, both with respect to CapEx as well as the production. So we are expecting in a time period of about 5 years, our targets will be around INR 2,000 crores. That is the target we are looking at from the current INR 1,100 crores approximately, we want to go to INR 2,000 crores in 5 years.
INR 2,000 crores top line in 5 years. Don't you think -- sir, is that not -- considering the kind of opportunity you have, sir, is that not a very ambitious number? Or is a very less -- low number, isn't it, sir? Would you say that?
See with the existing facilities, see, it's a different kind of market altogether, okay? So these are exclusively -- these are strategic materials. And with the available facilities, including some of the new facilities that we are going to augment in 3 to 5 years' time, I'm giving these figures, these are not -- I mean, these are -- see, in strategic sector, what happens is the quantities are small. And the numbers are large. See, it is a different thing. It is not that we are producing like a steel plant, a regular steel plant. Here, number of grades will be, like in an aircraft, number of grades will be too many and quantities are small. And the required quality is very, very high. So these things put us in this bracket. I think INR 2,000 crores is what we are looking for. If it is more, I do not know we can -- I mean this is the current achievable target. That is what we feel.
Okay, sir. Great. Second question, sir. In your annual report of last year as well as this year, one of the key words that you use is global supply chain linkages and which is both required for bringing in as well as taking it out. Do you see a possible -- is that your greatest challenge, which is getting the global supply chain linkages? Can you elaborate on that, please?
Yes. This is one important challenge because many of the raw materials that we use for making the alloys are imported. And because of the global chain disruption, sometimes it happens that some of these raw materials that go into production of materials, alloys are not available in time. So it becomes -- it will put stress on us sometimes. So suppose say, for example, some materials or some master alloys are not available or some pure elements which we use in these -- manufacturing of these nickel-based superalloys, they are -- even one element is not there, like typically, a superalloy consists of 6 to 7 elements, any one of the -- absence of any one of the elements is going to be a critical thing. And one of our objectives is also to develop some domestic market but it takes time. It's to -- it will not happen immediately because these are all long -- I mean, very heavy investments are required for making these elements, okay, whatever we import, if we want to make within the country, it takes time. So short term, yes, we want to meet the targets. And long term, we want to have some collaborations and all are -- how to recover maybe some of these alloying elements, if they are possible to recycle and use that are also -- that also we are looking. So supply chain is a very, very important thing in our type of production, where we depend on external countries for resources.
Okay, sir. Okay, sir. And the current order book of INR 1,800 crores plus what you're indicating in terms of orders coming in, in this and next quarter, what would be the execution time frame for this, sir, if I'd say, for INR 1,800 crores plus INR 600 crores that you're projecting?
Yes, something like 1.5 years, it will take 1.5 years is the execution time.
Sir, which means I'm trying to corroborate my statistics, which is INR 1,800 crores plus INR 700 crores, if you're able to execute it even in 2 years, maybe we will reach our ambition faster, isn't it, sir?
Yes, it is possible, but it all depends on -- see, some -- one problem is, we should have a smooth supply of raw materials. So if we are able to get -- it should be possible, as you told, good number of orders in hand. So your statement will be correct, provided there will not be any hindrance because sometimes we are finding it difficult to get -- import certain critical raw materials. That's why we are -- we have told like that.
Got it, sir. Got it, sir. One last question, sir. The previous MD, Mr. Jha, had pointed out in one of the con calls saying that the potential for MIDHANI's use in our country, MIDHANI's role in our country is so huge across so many programs that India needs 5 MIDHANIs. That's the kind of capacity that was needed. Can you take it forward, sir? Do you think that is the kind of potential that we foresee for the next 5, 10 years, sir?
My predecessor is 100% true. His words are absolute. See, the thing is, even today, if you look at the EXIM data, there are steel, superalloys and titanium alloys are imported by around INR 8,000 crores worth of these steels, which are in the portfolio of MIDHANI are being imported every year. So just when he told this, I think probably this is what was in his mind. If you keep it, 5 MIDHANIs is 5x maybe INR 1,100 crores, it is even less than -- even we cannot meet. So there are large number of these grades are getting imported because due to multiple reasons. So absolutely he is correct. Yes, we need to strengthen. We need to expand. We need to become big. We need to cater and already Government of India's idea is to have everything done within the country under Atmanirbhar. So we are sure that we are going to expand in due course of time and we are -- that is why we gave in about 5 years, we are going to do at least INR 2,000 crores. We should be able to make it. And this -- the materials, whatever we are supplying, the strategic materials are required more and more in numbers because the kind of things, the many orders are there from defense. So it is expanding overall. The kind of products that MIDHANI is making is expanding and country needs more such companies, yes.
In fact, me and my friends went through some parliamentary notes also and your company is being mentioned as the company of strategic national importance. I know there's a lot of people talking about it. I wish you the best, sir.
The next question comes from the line of [ Amit Dixit from Goldman Sachs ].
[indiscernible] follow-up from my side. The first one is on the Rohtak armor factory, if you can mention the capacity utilization there? And what kind of revenue can we expect from this facility in the next couple of years? Also a related one on this is that now LCH order has been given to HAL.
Okay. See, with respect to -- yes, you're done?
Yes, that is the first question.
Yes. So with respect to the Rohtak case, we are having 2 products from Rohtak, basically vehicle armoring and body armoring. So with respect to vehicle armoring, we are having good number of orders, okay? We are having that bulletproofing of vehicles. So we are having good orders from respective police departments, state police departments as well as central police forces. And with respect to body armoring, yes, we are having -- some of the orders we are already -- yes, so we are having a ToT, technology transfer from Bhabha Kavach, that is one. And we are also looking at ABHED, okay, another ToT. So orders are expected. We are -- recently, we got an order for bulletproof jackets from one of the state police departments. So we have to expand. There is still -- it is not up to the mark but still we are looking for some expansion in that and getting orders to execute. And with respect to LCH order to HAL, so we are yet to get some good orders in this area.
Does that answer your question, Amit?
Yes, yes. The second question is on the [Technical Difficulty] so if you can let us know the imported content in that value of production? And what kind of steps have we taken to bring it down? And so [Technical Difficulty] imported products. I know there are a lot of things not within your control because some of these materials are not produced in India.
Yes. It all depends on their -- I mean, the end user has to give us opportunity to work on that because many of these products that are imported are all in the portfolio of MIDHANI. So whether it is steel, superalloy or titanium alloy. So it depends on their time lines and how -- what are their promises to their customers. So accordingly, we are expecting some orders. We are yet to get any feedback from them.
The next question comes from the line of Dipen Vakil from PhillipCapital.
Sir, my question is on the lines of your supply chain. So you mentioned that -- so what would be the raw materials that you're currently importing? And also the raw materials which are easily available from the domestic region? Sir, can you throw some light on that?
Yes. Some of the -- something like 75% to 80% of the raw materials we import because these raw materials, India is not having the mineral resources to produce the kind of materials that we are using for making superalloys, like, for example, nickel, cobalt, moly, tungsten, these things we import. So maybe 75% to 80%. But there are alloys, which -- I mean, there are materials which we use domestically also. So -- but significant part of it is coming from import of pure elements.
The next question comes from the line of [ Gopi Krishnan ], an individual investor.
I have only one question. The revenue sales is INR 168 crores. So I would like to know what is the production charge against this sales, value of production charge against this sale of INR 168 crores.
VoP.
No, VoP is INR 240 crores.
No, no. What is the value...
Yes. The value of revenues for -- sorry, sorry, please go ahead. Please go ahead.
Actually, total -- I understand what is the total value of production for the quarter. But what is the value of production charged against INR 168 crores, just to approximate figure -- against the INR 168 crores invoicing.
Okay. So that is around -- just a minute, that's -- yes, we are INR 110 crores.
So INR 110 crores of production has generated for you, INR 168 crores.
INR 110 crores is the raw materials that have been used and this INR 110 crores consists of -- yes, virgin raw materials which we have used. And also from scrap, we use it, right? So this is the virgin raw materials, INR 110 crores.
No, my question is specific, not regarding material. I'm talking about you have mentioned that INR 241 crores is your value of production. So what is the value of production charge against INR 168 crores -- when you invoice INR 168 crores to the client, how much is the value of production against that?
INR 168 crores?
Where from that INR 168 crores...
Where the INR 168 crores has come? Are you talking about revenue?
INR 168 crores is the revenue, revenue.
INR 170 crores. Okay. Okay. INR 170 crores. Okay. Okay.
INR 170 crores is the [indiscernible]. Yes, yes. It's Okay. Okay. Fine. Fine.
So that -- around that we will contribute around 60%, 60%.
60% is the value of production.
Yes, yes.
So that means 40% you're making -- that means...
Value addition. Yes.
The other things will be there, the other overheads will be there, like employee cost will be there, consumables will be there...
So approximately you're telling 60% of INR 170 crores is charged against this.
Yes.
As value of production?
Yes. because On top of our raw materials, there will be -- that is only the raw material consumption I talked about, right? On top of it, there will be a scrap consumption. There will be the like expenditures like employee expenses, other overheads like consumables, power, repairs, so many things will be there, all those, the finance costs will be there, depreciation, so many things, yes.
Okay. And also one more question. Is there any seasonality in production from MIDHANI? Always it's, quarter 1 is lower and quarter 4 is higher. Is there something like that? I'm talking about production.
There is -- yes.
Yes, there may be -- last quarter may be a little more aggressive compared to other 3 quarters. Maybe if you look at the previous quarter results also you can find.
Yes, always reflects that. But is there anything like that, seasonality for production, not sales, I'm talking.
No, nothing like that, okay, maybe more running in the last quarter to achieve the targets.
The next question comes from the line of Henil Bagadia with Equicorp.
Sir, I just got 2 quick questions. So one is, since the raw material prices have come down compared to last year, sir, is there any upward revision on the gross margin and EBITDA margin guidance you plan to make?
That's what, it is already reflected. That is -- if we look at it, the last year, the EBITDA margins are only 19%, Q1, if you look at it, because INR 31 crores EBITDA and INR 163 crores, the margin is -- EBITDA margin is INR 19 crores. So that's INR 24 crores is Q1 of the current financial year, right? And also it has the same impact, cascade impact on the PBT. Last year, it was [ 5.48 ] and it is [ 11.14 ] of the revenue. Same is the case of the PAT. So that is what has resulted -- the savings, it has -- yes, it has contributed it.
From the last year, it was affected.
Sir, on the RM side, are we fairly diversified in terms of procurement because I mean on cobalt, I think, sir, DRC has still extended their export ban. So are we fairly comfortable in terms of supplies?
Raw material procurement we are going as per the orders available. That is a continuous process. We keep on procuring raw material as per the requirement and considering the market trends also. Procurement is a continuous process.
Okay. Okay. And then the last question. Sir, if you could also explain, so we've got a product for bulletproof jackets called Kavach. Sir, what -- how different is it from technical textile product, which is manufactured by a few textile players, which is also a bulletproof jacket that is used. So because there was a large opportunity in terms of getting orders from state and central police departments but I think, sir, the ramp-up of the number of orders that you received has not been in lines with the -- our expectations.
Yes. Probably your statement may be true. See, the normal textile and this thing is different because you are having -- bulletproof jackets have different layers of materials consisting of some polymeric materials and ceramic materials, which will be resistant to firing bullets. So it's a technology. And you have to get it in the right form. The interfaces have to be good, interface between the polymer and the ceramic. So the technology is available. It is called that Kavach. So what you are referring is called Bhaba Kavach. We have taken a ToT from BARC and we are working on that. We are also in the process of taking a ToT from IIT Delhi. It is called ABHED and we are working with them and we are doing the initial processing of some of the jackets. And these are for higher [indiscernible] levels. That is more intense bullets also can be stopped. So as you told, yes, once these things are established, we'll be going and we should be getting orders in next few quarters once these are established.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for the closing remarks.
So thank you. It's been a wonderful experience. Thank you once again for all our investors for joining today's conference call and for the -- all your continuous trust and support on MIDHANI. We are proud of what MIDHANI has accomplished in Q1 of FY '25, '26. And as we move to the next quarter, I'm confident that with our strong order book, particularly the expected INR 701 crores from Q2, I think we should -- we can have a sustained growth. If you have any further questions, you can please call our Company Secretary. We wish you from MIDHANI side a pleasant day.
Thank you, sir. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Read the full transcript via the API
You're viewing the first half of this call. Get the complete Mishra Dhatu Nigam Limited transcript - plus 251,000+ transcripts from 12,000+ companies, speaker segments and full-text search - through the EarningsAPI REST API or hosted MCP server.
Get an API key View API docs →For developers and AI pipelines
Programmatic access to Mishra Dhatu Nigam Limited earnings transcripts and 251,000+ others is available through the
EarningsAPI REST API and the hosted MCP server.
Quarterly plans from $105 - full transcripts, speaker segments, full-text search,
and the /api/v1/transcripts/recent polling endpoint for ETL pipelines.