RHI Magnesita – Q3 FY23 Results Update

RHI Magnesita India Ltd (earlier Orient Refractories Limited) an ISO 9001 Quality Certified Company, engaged in the business of manufacturing and selling of Refractories and Monolithics.

The Company offers a wide range of Refractory and Monolithic products for the iron and steel industry and enjoy large domestic and international clientele.

(A) Quarterly Results – QoQ & YoY

RHI Magnesita India Ltd - Performance Snapshot QoQ and YoY

(B) Key Operational Parameters – QoQ

RHI Magnesita India Ltd - Key Margin s

(C) Shareholding changes – QoQ

RHI Magnesita India Ltd - shareholdings

RHI promoters diluted 10% of its Equity in this quarter in order to complete Dalmia’s Acquisition.

(D) Expenses Classification for Q3FY23

RHI Magnesita India Ltd - Expense Classifications

On QoQ basis, RHI Magnesita spent less on Raw material and Employee cost, As a result they were able to produce better efficiency.

(E) Q3FY23 – Key Highlights by Management

(i) Business Performance

RHI Witnessing Margins Pressure due to increase in the price of traded goods caused by energy crisis in Europe and higher fluctuation in foreign Exchange

furthermore, The company raised Rs. 1500 Cr to pay off debt and for other business purposes. At the moment, the company owes Rs. 1,074 Cr.

Additionally, Co Expects long term EBITDA margin of 14-15%.

Currently, RHI is running at 75% capacity utilization level.

(ii) Acquisitions

(a) Dalmia

Acquisition of Dalmia is Rs 2100Cr in which Rs 1,707 Cr is paid by share swap and rest by loan.

Inaddition, Dalmia has a capacity of 300000TPA with a capacity utilisation of 55-60%

Dalmia opened substantial opportunities in the industrial market segment, historically where they had less prominence.

In the coming years, the company’s 150000 TPA of unused capacity will be enough to satisfy demand from the consumer sector.

(b) Hi-Tech

Weightage of value added segment in the co is comparatively high.
in Addition, Its running at 60-65% capacity.

(ii) Future Outlook

Plan for modernization of some acquire manufacturing in next 1-2 years.

Demand for cement is expected to increase by double digits in FY23, while steel production is expected to increase by 4%.

Demand in export is slow due to ongoing war, and company expect it to continue for few more time.

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References:  valueresearchonline.com, Industry’s Publications, News Publications, Mutual Fund Company.

Disclaimer: The report only represents personal opinions and views of the author. No part of the report should be considered as recommendation for buying/selling any stock. Thus, the report & references mentioned are only for the information of the readers about the industry stated.

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