MIDHANI Restricted – Evaluation, Goal Value, 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 goal to realize self-reliance within the provide of assorted alloys to defence and different strategic sectors similar to vitality, area 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 services positioned at Hyderabad and Rohtak.

Merchandise and Providers

The merchandise provided by the corporate might be labeled 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 energy particular metal, austennitic steels and percipitation hardening steels.
• Different metals and alloys – Mushy magnetic alloys and managed enlargement alloys.
• Specialty merchandise – Wires and bars, rolled sheets, open-die forgings, funding castings, armour merchandise, biomedical implants, fasteners and so forth.

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 essential 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 essential parts of area missions, together with launch autos, satellites, and cryogenic engine programs. 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 forth. The corporate additionally possesses sturdy capabilities to develop and scale superior supplies for aerospace and vitality purposes.

• Development methods – MIDHANI is strategically targeted on import substitution and capability enlargement 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 businesses and nationwide labs. Efforts are underway to indigenous further 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 thirty days. Additionally it is engaged on creating superior supplies for hypersonic purposes and next-generation jet engines. Moreover, the corporate has begun fulfilling export orders from main world gamers similar 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 – In the course of the quarter, the corporate’s income was flat at Rs.411 crore. The manufacturing worth elevated by 17% in the course of 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 development of twenty-two% in comparison with the Rs.46 crore of the corresponding interval within the earlier 12 months. 

• 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 in the course of the 12 months. In the course of the interval the corporate has undertaken a capital expenditure of Rs.50 crore for strengthening manufacturing infrastructure and commissioning new services.
• Monetary Efficiency – Common 3-year ROE & ROCE is round 9% and 12% for FY23-25 interval. The corporate has a strong capital construction with a debt-to-equity ratio of 0.25.

Business

India’s defence and aerospace trade is witnessing fast development, pushed by authorities give attention to 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 enlargement of indigenous satellite tv for pc programs (IRNSS, GSAT) spotlight technological progress, whereas the combination of area and defence capabilities is supporting development throughout sectors similar to infrastructure, agriculture, and telemedicine – creating long-term alternatives for superior supplies and alloy producers.

Development 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 12 months.
• Provision for 100% Overseas Direct Funding (FDI) by means of Authorities route and 74% by means of Computerized route into the defence sector.
• India House Sector’s goal to focus on exports price $11 Bn by 2033.

Peer Evaluation

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

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 secure monetary place and strong operational efficiency.

Outlook

As of 1 April 2025, MIDHANI holds a strong order ebook of Rs.1,832 crore, guaranteeing robust income visibility for the approaching years. The corporate is concentrating on an annual development price of 20%, supported by its give attention to self-reliance in uncooked supplies by means of indigenous improvement and recycling of high-value scrap. It goals to maintain wholesome EBITDA margins within the vary of 20 – 25%. To assist future development 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, area, and energy. With over 500 alloy grades indigenized, the corporate can be broadening its product portfolio to serve rising sectors similar to healthcare, oil & fuel, and vitality – enhancing its long-term development prospects whereas decreasing dependency on conventional defence-led income streams.

Valuation

We imagine the corporate is well-positioned with a powerful order pipeline, rising export presence, and ongoing improvement of next-generation alloys. We advocate 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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