MIDHANI Q4 Results Review - Improved QoQ Performance; Steep Valuations: ICICI Securities

ICICI Securities Report

Mishra Dhatu Nigam Ltd.’s Q4 FY24 performance was better than expected. Key points:

1. Ebitda margin improved QoQ to 19.8% (14.2% in Q3 FY24) mainly due to operating leverage kicking in, pursuant to higher volume.

2. Implied order inflow in Q4 FY24 was Rs 2.2 billion (Rs 13.2 billion in FY24).

3. Orderbook as of May-24 end stood at Rs 17.6 billion, implying book/bill (trailing twelve months) at 1.7 times.

4. Company has incurred capex of Rs 780 million and new facilities have been commissioned in Q4.

For FY25, the management has guided for-

1. revenue growth of 20-25%,

2. improvement in Ebitda margin and

3. order inflow of Rs 11.5 billion.

Going ahead, despite factoring in revenue growth and improved Ebitda margin, we see unfavourable risk reward at this price. We maintain Sell with a revised target price of Rs 360 (earlier: 350) based on 20 times FY26E Ebitda.

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