40% topline growth offset by margin miss; recovery hinges on LPG normalization

Delivered Rs. 239.5 Cr revenue, 40.5% YoY growth

Delivered Rs. 16.5 Cr PAT, 27.0% YoY growth

Q1 EBITDA ₹46.6 Cr / ₹239.5 Cr revenue = 19.4% margin

Below prior 24-25% guidance; predicated on LPG/RM normalization unconfirmed

Stated on call, consistent with defense-heavy portfolio (66% defense)

Prior 24-25% EBITDA guidance now expected at ~20-21% from Q3 as LPG/RM headwinds persist into H2. No recovery to 24%+ stated.

40.5% YoY beat 15% FY26 guidance easily. But 40% run-rate non-sustainable per management. Full-year growth still expected better than FY26, not quantified precisely.

Defense now 66% (vs space-heavy historical mix). Titanium ₹600 Cr subset. Shift reflects defense sector strength but increases customer concentration risk on fixed-price contracts.

₹1,000 Cr 3-year capex for modernization now in ministry evaluation. No timeline provided; FY27 capex remains ₹50-60 Cr maintenance-only. Major uncertainty on execution.

LPG prices doubled (war crisis), major factor. Also raw material prices elevated. Q2 may see continued hit; Q3 normalization expected.

40% at quarter level not practicable for year. FY27 growth will be better than FY26. Margin improvement expected H2, driven by mix and cost normalization.

Capex has long lead time. Projects to realize after 4-5 years stabilization. Difficult to quantify near-term asset turn now.

₹600 Cr order book exists. Titanium margins higher than special steel. Will increase contribution. Challenges: processing time, material availability.

Certification enables testing for all materials. Revenue depends on customer uptake. Very conservatively estimating 10% incremental revenue. Will know in 2-3 quarters.

Formal process underway. Cannot commit timeline. Will update shareholders once approved.

No impact on MIDHANI books; customer-owned, MIDHANI-operated. Just storing material for melting.

Scrap is 'gold mine' for melting; integral to process. Optimally managed. Sell when exceeds threshold. Last year reduced ₹75 Cr scrap inventory.

Correct. No nomination orders now; all competitive bidding.

Certification in progress. Within ~1 year should get approvals. Multiple audits and modifications underway.

Q1 beat 15% FY26 guidance easily at 40.5%. Management clarified 40% not annual run-rate. Implies ~20-30% FY27 growth estimate, not quantified.

Current ₹33 Cr exports on implied ₹600-700 Cr FY27 revenue = ~5% penetration. Target ₹100-120 Cr exports (15-20% growth) over 3-4 years via S400 cert and OEM approvals.

Prior 24-25% guidance now tacitly abandoned. Management 'hopes' Q3 normalization on LPG/RM relief. Q1 at 19.4%; Q2 'may be little bit hit'; Q3+ recovery. No commitment to 24%+ recovery.

Mix shift toward titanium (₹600 Cr order book) and super alloy expected to support margin accretion mid-term, contingent on product mix execution.

Proposal pending ministry evaluation. No timeline. FY27 capex remains ₹50-60 Cr maintenance-only. Results visible year 4-5 post-completion.

One customer in advanced stage; pilots underway. Full rollout timeline vague. Does not impact balance sheet (customer-owned).

Q1 experienced ₹14 Cr adverse RM price variance (nickel, moly, tungsten, cobalt) and ₹5 Cr LPG crisis impact on margins. Fixed-price defense contracts prevent cost pass-through. Metal bank pilot only in stage for 1 customer.

Defense 66% of ₹2,329 Cr order book. Sequential revenue down 56.7% QoQ, PAT down 78.9% QoQ. Small-cap aerospace supplier model inherently lumpy. Program delays (AMCA approval) could defer order ramp.

EBITDA margin 19.4% vs 24-25% prior guidance—500+ bps miss. Shift from nomination-based (higher margin) to competitive bidding (lower margin) eroding profitability. Fixed-price exposure absorbs commodity shocks.

₹1,000 Cr modernization capex (3 years) pending ministry evaluation. No timeline provided. If delayed/denied, productivity gains deferred. FY27 capex remains ₹50-60 Cr maintenance-only. Capex results visible year 4-5.

Rolls-Royce, Boeing, Airbus certifications in progress; management expects ~1 year to approval. No guarantees. S400 cert from GE opens path but Nadcap and OEM audits are rigorous. Titanium sponge imports from East Europe subject to geopolitical/sanctions risk.