MIDHANI Restricted – Evaluation, Goal Worth, BUY [July 25]Insights

Mishra Dhatu Nigam Ltd – Fostering Self-Reliance

Included in 1973 underneath the executive management of Ministry of Defence, Mishra Dhatu Nigam Ltd. (MIDHANI) is a longtime participant within the manufacture of particular steels, superalloys, and titanium alloys. Headquartered in Hyderabad, the corporate was setup with an purpose to realize self-reliance within the provide of assorted alloys to defence and different strategic sectors equivalent to vitality, house and aeronautical purposes. The corporate is the one producer of Titanium alloys in India. Recognised as a Nationwide Centre for Excellence in superior metallurgical manufacturing, the corporate has 2 manufacturing amenities positioned at Hyderabad and Rohtak.

Merchandise and Companies

The merchandise provided by the corporate might be categorised as underneath:

• Superalloys – Nickel, cobalt and iron-based alloys.
• Titanium and titanium alloys – Commercially pure grades, alpha and alpha-beta titanium alloys.
• Particular metal – Martensitic steels, excessive power particular metal, austennitic steels and percipitation hardening steels.
• Different metals and alloys – Tender magnetic alloys and managed growth alloys.
• Specialty merchandise – Wires and bars, rolled sheets, open-die forgings, funding castings, armour merchandise, biomedical implants, fasteners and so on.

Subsidiaries: As of FY24, the corporate has 1 three way partnership, and no different subsidiary/affiliate firm.

Funding Rationale

• Strategic place – The corporate performs a crucial position in advancing self-reliance in defence manufacturing by producing specialised supplies which can be sometimes imported, supporting key applications involving missiles, submarines, naval platforms, fight plane, helicopters, and armoured autos. The corporate additionally provides high-performance alloys to ISRO, supporting crucial elements of house missions, together with launch autos, satellites, and cryogenic engine techniques. MIDHANI serves as a key pillar of the ‘Make in India’ initiative in high-technology metallurgy, backed by robust collaborations with DRDO, HAL, ISRO, BHEL, and so on. The corporate additionally possesses strong capabilities to develop and scale superior supplies for aerospace and vitality purposes.

• Progress methods – MIDHANI is strategically targeted on import substitution and capability growth by means of indigenous innovation, having developed three grasp alloys that have been beforehand imported and actively advancing applied sciences to recycle high-value scrap supplies in collaboration with authorities companies and nationwide labs. Efforts are underway to indigenous extra grasp alloys which can be required to make superior Titanium alloys for aerospace grade. The corporate lately commissioned new Titanium plant which is now at full-fledged operations at a capability of 250-300 tons per 30 days. It’s also engaged on growing superior supplies for hypersonic purposes and next-generation jet engines. Moreover, the corporate has begun fulfilling export orders from main international gamers equivalent to Boeing, Pratt & Whitney, Airbus, and GE. As well as, it’s engaged on the event of specialised alloys for high-megawatt thermal energy crops for the federal government.

• Q4FY25 – Throughout the quarter, the corporate’s income was flat at Rs.411 crore. The manufacturing worth elevated by 17% through the interval to Rs.329 crore. EBITDA improved by 16% from Rs.80 crore of Q4FY24 to Rs.93 crore of the present quarter. The corporate reported internet revenue of Rs.56 crore, a progress of twenty-two% in comparison with the Rs.46 crore of the corresponding interval within the earlier yr. 

• FY25 – Throughout FY25, the income was flat at Rs.1,074 crore. EBITDA was at Rs.218 crore, up by 12% YoY. The corporate reported internet revenue of Rs.111 crore, a rise of 21% YoY. Notably, firm’s exports have elevated threefold through the yr. Throughout the interval the corporate has undertaken a capital expenditure of Rs.50 crore for strengthening manufacturing infrastructure and commissioning new amenities.
• Monetary Efficiency – Common 3-year ROE & ROCE is round 9% and 12% for FY23-25 interval. The corporate has a sturdy capital construction with a debt-to-equity ratio of 0.25.

Trade

India’s defence and aerospace trade is witnessing speedy progress, pushed by authorities deal with self-reliance, rising exports, and elevated R&D investments underneath the ‘Aatmanirbhar Bharat’ initiative. With a goal of attaining US$ 6.02 billion in annual defence exports by 2028 – 29, the sector is a strategic precedence. Successes like Chandrayaan-3 and the growth of indigenous satellite tv for pc techniques (IRNSS, GSAT) spotlight technological progress, whereas the combination of house and defence capabilities is supporting progress throughout sectors equivalent to infrastructure, agriculture, and telemedicine – creating long-term alternatives for superior supplies and alloy producers.

Progress Drivers

• In 2025-26 the central authorities has allotted Rs.6,81,210 crore for the Ministry of Defence which is 6% increased than the earlier yr.
• Provision for 100% International Direct Funding (FDI) by means of Authorities route and 74% by means of Computerized route into the defence sector.
• India House Sector’s purpose to focus on exports price $11 Bn by 2033.

Peer Evaluation

Opponents: DCX Methods Ltd, Sunflag Iron & Metal Firm Ltd, and so on.

In comparison with its friends, the corporate stands out as the most important alloy provider to the defence sector. Its profitability metrics are passable, reflecting a steady monetary place and strong operational efficiency.

Outlook

As of 1 April 2025, MIDHANI holds a sturdy order ebook of Rs.1,832 crore, guaranteeing robust income visibility for the approaching years. The corporate is concentrating on an annual progress charge of 20%, supported by its deal with self-reliance in uncooked supplies by means of indigenous growth and recycling of high-value scrap. It goals to maintain wholesome EBITDA margins within the vary of 20 – 25%. To assist future progress and technological development, MIDHANI plans to take a position Rs.75 – 100 crore yearly in capital expenditure. It anticipates elevated demand from key strategic sectors together with aerospace, naval, missile, house, and energy. With over 500 alloy grades indigenized, the corporate can be broadening its product portfolio to serve rising sectors equivalent to healthcare, oil & gasoline, and vitality – enhancing its long-term progress prospects whereas lowering dependency on conventional defence-led income streams.

Valuation

We imagine the corporate is well-positioned with a robust order pipeline, rising export presence, and ongoing growth of next-generation alloys. We suggest a BUY ranking within the inventory with the goal value (TP) of Rs.507, 51x FY27E EPS.

SWOT Evaluation

Recap of our earlier suggestions (As on 04 July 2025)

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