Q1 2025 RHI Magnesita India Ltd Earnings Call Transcript
Key Points
- RHI Magnesita India Ltd (BOM:534076) recorded the highest quarterly operating margin since the acquisition of Hi-Tech & Dalmia.
- The company secured three new contracts in the blast furnace segment and onboarded five new customers in tap hole clay.
- EBITDA increased by 3 percentage points to INR157 crores, driven by a better product mix and one-time high-margin customer orders.
- Net debt to EBITDA ratio improved from 0.6x to 0.3x, contributed by strong cash generation and efficient inventory management.
- The company is optimistic about leveraging growth opportunities in iron making, DRI, and the pellet business, with a focus on sustainable growth and better return ratios for shareholders.
- End-user industries such as steel, cement, and industrial interests are experiencing subdued customer activity due to seasonal slowdown and cheap imports from Southeast Asia and China.
- Rising freight costs and increased raw material costs are expected to persist in the coming quarters.
- Capacity utilization remained flat, with some plants experiencing lower utilization due to reduced production in the cement sector.
- The company faces challenges in passing on increased raw material and freight costs to customers, which could impact margins.
- The integration of acquired entities has been slower than expected, particularly in the Hi-Tech segment, due to external factors like the war in Ukraine and reduced steel production in CIS countries.
Ladies and gentlemen, good day, and welcome to the RHI Magnesita Limited conference call hosted by Batlivala & Karani Securities India Private Limited.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict.
(Operator Instructions) Please note that this conference is being recorded.
I now hand the conference over to Mr. Aryan Sharma from Batlivala & Karani Securities India Private Limited. Thank you and over to you, sir.
Thank you, Shuruth. Good evening, everyone. On behalf of B&K Securities, we welcome you all to Q1 FY25 earnings conference call of RHI Magnesita India Limited. We have with us today, Mr. Parmod Sagar, Managing Director and CEO; and Mr. Azim Syed, CFO and Chief Investor Relations Officer
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