Multibagger RHI Magnesita share price rebounds 34% from March lows. Is the rally just beginning?
The stock has surged 34% from its March low of ₹ 384 apiece to its current market price of ₹ 514, marking a strong turnaround after its slump between June 2024 and February 2025. Despite short-term volatility, the stock is still up 240% over the past five years. Although it remains 27% below its 52-week high of ₹ 702 apiece, domestic brokerage firm, Axis Securities believes the upward momentum in the stock could continue in the near term.
The brokerage in its latest report maintained its 'Buy' call on the stock with a target price of ₹ 550, citing attractive valuations and improving fundamentals.
Axis Securities highlighted that the stock is trading at 17x EV/EBITDA on a consensus basis compared to their FY27E estimate of 15x EV/EBITDA. It also pointed out the company's successful efforts in reducing net debt (excluding lease liabilities) to ₹ 146 crore in FY25 from ₹ 309 crore in FY24.
Axis further noted that RHI Magnesita is well-positioned to benefit from rising demand, given its leadership in the Indian refractory market with a 30% market share. India is the fastest-growing refractory market globally, with a projected 6–8% CAGR.
The domestic refractory market is forecast to reach $4.5 billion by 2030, driven by material innovation and organic growth. Medium-term fundamentals remain intact with steel capacity expansion (targeting 300 MT by 2030) and infrastructure-led cement demand expected to recover in FY26 with a 6–8% YoY growth outlook.
In FY25, the company reported revenue of ₹ 3,674 crore, down 2.8% YoY due to pricing pressures in the competitive steel sector. EBITDA declined 12% YoY to ₹ 479 crore, with margins contracting by 140 bps due to rising input costs and intensified competition.
Q4 FY25 revenue fell 9.2% QoQ and 2.7% YoY, while EBITDA stood at ₹ 93 crore, down 37.3% YoY and 25.7% QoQ. Margins contracted 560 bps YoY and 225 bps QoQ due to lower gross margins and negative operating leverage on reduced volumes.
The decline was also attributed to higher alumina prices, which surged to ₹ 95,000/tonne from ₹ 65,000/tonne six months ago. However, Axis Securities expects raw material prices to ease from July 2025, potentially supporting margins due to the company's typical two-month inventory cycle.
Management expects performance to improve on the back of better demand, lower input costs, targeted price hikes, and cost optimization. Volume growth for FY26 is guided at 8–10%, with EBITDA margins projected to improve to 14–15%, especially from Q2 FY26 onward.
RHI Magnesita India Ltd. (RHIM) is a leading provider of high-grade refractory products and solutions that support industrial processes operating at temperatures above 1,200°C. It serves core sectors including steel, cement, non-ferrous metals, and glass. Its portfolio includes magnesia- and alumina-based bricks, isostatic components, and slide gate systems.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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