# 1. Financial Performance ## A. Key Figures * **Q3 FY'26 Turnover:** **₹275.66 Cr** (+31.44% QoQ) · **₹209.72 Cr** Q2 FY'26 * 9M FY'26 Turnover: ₹655.88 Cr (Apr–Dec 2025) · ₹663.54 Cr prior-year period * Q3 PBT: ₹39 Cr (>2x Q2) · ₹19.11 Cr Q2 FY'26 * **Q3 PAT:** **₹27.46 Cr** (vs. ₹12.76 Cr Q2) * **9M PBT & PAT:** **₹77.1 Cr** PBT · **₹53.04 Cr** PAT (stable YoY) * **EBITDA Margin:** **~23%** average sustainable level ## B. Revenue Growth * **Sharp Quarterly Rebound:** Turnover surged by **44% QoQ** in Q3, reversing earlier softness and indicating strong execution and order fulfillment momentum. * **Mixed Full-Year Trend:** Despite robust Q3, nine-month revenue reflects a complex comparison base, resulting in a lower year-to-date aggregate. ## C. Profitability Trends * **Disproportionate Bottom-Line Expansion:** PBT more than doubled and PAT rose sharply in Q3, highlighting significant operating leverage and earnings resilience. * **Stable Core Earnings:** Despite turnover volatility, full-year profitability remained anchored, underscoring disciplined cost management and pricing power. ## D. Margin Performance * **Margin Tailwinds from Mix Shift:** Q3 margin expansion driven by favorable product mix and high-margin specialized alloy contracts, supporting the **~23% sustainable EBITDA margin** target. ## E. Working Capital * **No Impact from Metal Bank Inventory:** Customer-owned metal bank stock does not affect MIDHANI’s working capital or inventory days, preserving balance sheet efficiency. * **Active Working Capital Optimization:** Inventory reduction efforts yielding results, with improved scrap utilization and remelting processes cutting WFP and scrap levels. --- # 2. Order Book & Demand ## A. Key Figures * **Order Book:** **₹2,594 Cr** (as of today) (2-year execution timeline) * **Defence Share of Order Book:** **72%** of total order book * **Export Orders:** **₹90 Cr** (last year) including **₹20 Cr** in material exports ## B. Total Order Book * **Robust Future Revenue Visibility:** Order book reached ₹2,594 Cr with a 2-year execution runway, signaling strong demand across strategic sectors. * **Strategic Tender Participation:** Company poised to capture share in the upcoming **INR 1,000 Cr** bulletproof jacket tender, despite multi-supplier award expectations. * **Mission-Critical Supply Chain Role:** Majority of material supply for Gaganyaan, Mangalyaan, and PSLV relaunch already booked and underway. * **Import Substitution Imperative:** Hundreds of crores in alloy imports persist; MIDHANI advancing capacity expansion to achieve self-reliance in critical grades. ## C. Defence Share * **Defence Dominates Demand:** Defence sector underpins the majority of the order book at 72%, with titanium alloy orders reflecting sustained momentum. * **Near-Full Utilization in Strategic Assets:** 1,000-ton titanium plant operating at near full capacity, aligning with rising defence requirements. ## D. Export Orders * **Emerging Export Traction:** Recorded ₹90 Cr in export orders last year, with aeronautical-grade super alloys and titanium alloys gaining international foothold. --- # 3. Product & Segment Performance ## A. Key Figures * **Revenue Mix (9M):** **20%** super alloys · **19%** titanium alloys · **15%** maraging steel · **37%** special steel · **~40%** combined super & titanium alloys * **Material Supply:** **~90 tons** for Presidential Dais * **Capex Initiative:** **₹40 Cr** fastener plant for aerospace components ## B. Super Alloys * **Strategic Certification:** CEMILAC certification of **10 cast and rod superalloys** validates technical leadership in defense and aerospace-grade materials. * **Mission-Critical Supplier:** MIDHANI materials are integral to **all ISRO launch vehicles** (PSLV, GSLV) and were part of **Chandrayaan-3**, confirming presence on the Moon. * **Core Program Involvement:** Sole producer of raw material for **single crystal turbine blades**, supplying **cast sticks** to all blade manufacturers including PTC; exclusive supplier to **Kaveri engine program** for 24 years. * **Defense & Aerospace Reach:** Key supplier to **HAL, Safran, AMCA, and GTRE**, with materials used in **MI-18, F14, and indigenous aero engines**, reinforcing strategic positioning. ## C. Titanium Alloys * **Breakthrough Civil Application:** Supplied **31 titanium jalousie windows** for Ayodhya Ram Mandir — India’s first architectural use of titanium — showcasing expanded market potential. * **End-to-End Capability:** Delivered **fully fabricated titanium window**, demonstrating in-house design, production, and installation capabilities beyond raw material supply. * **Space & International Ties:** Titanium used in **all ISRO propellant tanks and gas bottles**; in advanced talks with **Safran** for aerospace supply, signaling global traction. ## D. Special Steels * **High-Margin Aerospace Demand:** Ultrahigh-strength steels — used in **missiles and rockets** — are key profitability drivers due to **significantly higher margins**. * **ISRO-Centric Supply Chain:** Primary supplier of **maraging steel** for **PSLV, GSLV, and LVM3 booster cases**, with ISRO as largest customer; same grade used in missile systems. * **National Project Execution:** Supplied **~90 tons** of special steel for Republic Day Presidential Dais, highlighting large-scale project capability. ## E. Value-Added Products * **Strategic Shift to Components:** Expanding into **value-added manufacturing** with **aerospace fasteners (₹40 Cr plant)** and **spring components**, reducing reliance on raw material sales. * **Export Ambition:** Spring and fastener units target **international markets**, with openness to diverse specs and strong export potential in helical springs. --- # 4. Manufacturing & Capacity ## A. Key Figures * Rolling Mill Output: **₹275.66 Cr** Q3 FY'26 (+31.44%) vs. **₹209.72 Cr** Q2 FY'26 ## B. Plant Utilization * **Significant Underperformance in Titanium Output:** Melting volume sharply lower year-on-year despite claims of 20% growth, raising concerns over data consistency or operational execution. * **Diversification to Improve Mill Utilization:** Contract manufacturing push in aluminium and super specialty steels underway; trial production successful, with active order discussions with DPSUs and aerospace firms. * **Integrated Capabilities Enable Vertical Control:** Full value chain from alloy making to finished components supports quality and customization in niche segments. * **Downstream Capacity Constraints:** Rolling mills at full capacity; limited outsourcing options due to specialized alloy requirements, constraining near-term scalability. ## C. Melting Capacity * **Strategic Aerospace Positioning:** 1,000-ton titanium capacity leveraged for high-growth domestic aerospace programs, including potential roles in M88, F414, and AMCA engine co-development. ## D. Capex Projects * **Technology-Led Expansion:** Acquired TOT for ABHED bulletproof jacket from IIT Delhi-DRDO CoE; undergoing ballistic testing for market entry alongside Bhabha Kavach. * **Rail Sector Focus:** Spring plant established for Vande Bharat; RDSO certification pending, with tender participation and supply plans for Alstom and Siemens upon approval. * **Capex Pipeline in Development:** Multiple projects in DPR stage, targeting capacity scale-up; Board and ministry approvals may be required, with clarity expected by end of Q4. * **Powder Plant Delayed:** Equipment yet to arrive; foreign export license pending, delaying setup. ## E. Rolling Mill Output * **Rail & Defence Demand Driving Output:** Supplied helical springs for Vande Bharat and LHB coaches; wide plate mill serves ISRO, shipyards, and defence, including high-visibility projects like the Presidential Dais. * **Current Spring Capacity:** **60,000 units/year**, with significant headroom for growth as certification and tenders progress. --- # 5. Supply Chain & Inventory ## A. Metal Bank Setup * **Customer-Owned Metal Bank:** MIDHANI is establishing a customer-owned metal bank on-site with **5 customers**, featuring ongoing procurement and active civil construction. * **Operational Timeline:** Fully-fledged facility for **6 critical raw materials** expected operational **within 6 months**, enhancing supply resilience for defense and strategic sectors. * **Working Capital Neutral Model:** MIDHANI draws materials on a loan basis and replenishes them, ensuring **no working capital impact**; inventory remains off-balance sheet. * **External Trade Dynamics:** Ongoing assessment of a **recent EU trade agreement’s potential impact** on raw material imports, though no concrete duty benefits or changes have been specified. ## B. Import Dependency & Raw Material Sourcing * **Virgin Material Constraints:** Certain products require virgin input, limiting scrap substitution, though efforts continue to optimize the **virgin-to-scrap mix**. * **Domestic Titanium Feedstock:** Titanium production relies primarily on **ilmenite from beach sands** in **Kerala, Tamil Nadu, Andhra Pradesh, and Odisha**, with **Kerala’s sands historically linked to pigment production**. * **No Alternative Domestic Ores:** Ilmenite from coastal sands remains the **primary domestic source** for titanium; other mining sources are not currently significant. * **Duty-Paid Imports:** All raw material imports are conducted on a **duty-paid basis**, with no access to duty-free regimes at present. ## C. Inventory Ownership & Management * **Custodial Inventory Model:** MIDHANI holds **3 to 5 months of customer-owned inventory** but acts solely as custodian, resulting in **zero balance sheet impact**. * **Demand-Driven Drawdowns:** Materials are pulled based on customer needs, and since inventory is not recorded, it **does not influence inventory turnover or working capital metrics**. --- # 6. Risks & Supply Constraints ## A. Raw Material Risk * **Headline:** Supply chain exposure persists for BEML and Alstom metro coach projects due to pending **RDSO certification**, with no test batches delivered yet. * **Headline:** Strategic reliance on imports for critical materials like high-grade aluminum and titanium, though **indigenization efforts and a metal bank** are key buffers against disruption. * **Headline:** National security programs are insulated by indigenous alloy capabilities, proven resilient during past crises including the **Ukrainian conflict and pandemic**. * **Headline:** Material control deemed non-negotiable; company asserts raw material availability is the **"first line of defence"** for defense, space, and aerospace programs. ## B. Certification Delays * **Headline:** NADCAP certification on track for completion by end of Q4, with only minor queries outstanding post-audit. * **Headline:** Multi-year certification roadmap in place to qualify **a couple of materials** for international aero customers, enabling entry into global supply chains. * **Headline:** No current agreements or deals with foreign vendors despite interest, underscoring need for clarity on certification timelines amid growing onshore investments in India. --- # 7. Guidance & Outlook ## A. Key Figures * **Incremental Revenue Target:** **INR 650 Cr** in Q4 (driven by superalloys, special steels, aeronautical grids) * **Revenue Growth Outlook:** **~20%** YoY incremental growth expected pre-capex finalization * **Revenue Target:** Scale from **INR 1,000+ Cr** to **INR 2,000 Cr** level via capacity utilization and future capex ## B. Revenue Target * **Q4 Momentum:** Strong order carryover and processing activity to drive **incremental INR 650 Cr** in revenue, anchored by demand in superalloys and strategic steel segments. * **Growth Visibility:** Near-term revenue trajectory supported by robust pipeline in defense and aerospace applications, including engine programs. ## C. Capex Clarity * **Capex Timing:** Final investment plans for the next two years remain under review, with clarity expected by **end of Q4**. * **Strategic Alignment:** Capex and R&D priorities aligned with **Atmanirbhar Bharat** and National Critical Minerals mission, focusing on indigenous production of strategic alloys. ## D. Growth Projections * **Aero Engine Expansion:** Positioned as key supplier for upcoming programs including **Kaveri dry engine (UCAV)** and **Manik STFE**, leveraging proven metallurgical capabilities. * **Scale Ambition:** Path to **doubling revenue** hinges on order inflows and execution readiness, with growth leveraged through optimal asset utilization ahead of new capex. * **Forward Updates:** Management to provide real-time updates on strategic developments, with further announcements expected in Q.