Rhi Magnesita India shares tumble post Q4; brokerage cuts target price, retains 'Buy'
The brokerage said Rhi Magnesita posted an adjusted EBITDA of Rs 113 crore in Q4 FY26, below its estimate of Rs 145 crore.
- Jun 1, 2026,
- Updated Jun 1, 2026 3:15 PM IST
Shares of Rhi Magnesita India Ltd recorded a sharp decline in Monday's trade, sliding 12.95 per cent to hit a low of Rs 353.60 after the company reported its fourth-quarter (Q4 FY26) results. Following the earnings announcement, Nuvama Institutional Equities lowered its target price on the stock while retaining its 'Buy' rating.
The brokerage said Rhi Magnesita posted an adjusted EBITDA of Rs 113 crore in Q4 FY26, below its estimate of Rs 145 crore. The figure was down 6 per cent year-on-year (YoY) and 39 per cent quarter-on-quarter (QoQ), primarily due to lower volumes and higher other expenses.
According to Nuvama, volumes declined 14 per cent sequentially during the quarter. The brokerage also noted that the company's adjusted EBITDA margin contracted by 160 basis points (bps) to 12.1 per cent, while adjusted EBITDA per tonne stood at Rs 9,688, compared with its estimate of Rs 10,600 per tonne, reflecting a 12 per cent QoQ decline.
Looking ahead, Nuvama expects margins to improve in the first quarter of FY27.
"EBITDA margin shall improve in Q1 FY27 supported by price hikes agreed with customers. Furthermore, strong order book of 18 months to offset pressure on commoditised products, aiding margins of 13 per cent/13.5 per cent in FY27E/28E," the brokerage said.
Nuvama revised its earnings estimates downward.
"We cut FY27E/28E PAT by 12 per cent/7 per cent to factor in higher CoP (cost of production). Maintain 'BUY' with a revised TP of Rs 557 (earlier Rs 600), valuing it at 32x FY28E EPS. The stock trades at 23x FY28E PE," it stated.
The brokerage, however, highlighted the company's balance sheet strength. It noted that Rhi Magnesita India reported a net cash position of Rs 69 crore as of Q4 FY26, compared with net cash of Rs 35.2 crore at the end of Q3 FY26.
Nuvama also said the company's focus on VAP and integrated solutions could support higher margins going forward.
Shares of Rhi Magnesita India Ltd recorded a sharp decline in Monday's trade, sliding 12.95 per cent to hit a low of Rs 353.60 after the company reported its fourth-quarter (Q4 FY26) results. Following the earnings announcement, Nuvama Institutional Equities lowered its target price on the stock while retaining its 'Buy' rating.
The brokerage said Rhi Magnesita posted an adjusted EBITDA of Rs 113 crore in Q4 FY26, below its estimate of Rs 145 crore. The figure was down 6 per cent year-on-year (YoY) and 39 per cent quarter-on-quarter (QoQ), primarily due to lower volumes and higher other expenses.
According to Nuvama, volumes declined 14 per cent sequentially during the quarter. The brokerage also noted that the company's adjusted EBITDA margin contracted by 160 basis points (bps) to 12.1 per cent, while adjusted EBITDA per tonne stood at Rs 9,688, compared with its estimate of Rs 10,600 per tonne, reflecting a 12 per cent QoQ decline.
Looking ahead, Nuvama expects margins to improve in the first quarter of FY27.
"EBITDA margin shall improve in Q1 FY27 supported by price hikes agreed with customers. Furthermore, strong order book of 18 months to offset pressure on commoditised products, aiding margins of 13 per cent/13.5 per cent in FY27E/28E," the brokerage said.
Nuvama revised its earnings estimates downward.
"We cut FY27E/28E PAT by 12 per cent/7 per cent to factor in higher CoP (cost of production). Maintain 'BUY' with a revised TP of Rs 557 (earlier Rs 600), valuing it at 32x FY28E EPS. The stock trades at 23x FY28E PE," it stated.
The brokerage, however, highlighted the company's balance sheet strength. It noted that Rhi Magnesita India reported a net cash position of Rs 69 crore as of Q4 FY26, compared with net cash of Rs 35.2 crore at the end of Q3 FY26.
Nuvama also said the company's focus on VAP and integrated solutions could support higher margins going forward.