Monolithisch India Q2 FY27 earnings call

What moved the numbers, as management explained it

• Capacity scaled from 36,000 TPA (2018) to 5,76,000 TPA through greenfield and brownfield expansion; recently commissioned greenfield unit undergoing trial runs to add incremental volumes.
• Backward integration via Nawada mine: ~40% raw material cost reduction (~₹1,200-1,500/ton savings) once mine starts Jan-Feb 2027; allotted capacity ~7 lakh tons.
• Inventory to drop from 90-120 days to 10-15 days post-mine, releasing ~₹20-30 cr of working capital tied in raw material stocks; first-tranche mine funding from this release.
• Two new greenfield plants (Udaipur 1,75,000 MTPA + Hospet 1,25,000 MTPA) to commission by Nov 2027 and July 2027, total capex ~₹45 cr; positioned to lower freight cost and tap export markets.
• Realisation held at ₹8-8.5/kg (₹8.6-8.7/kg currently) supported by 60-80%+ customer retention; new locations aimed at bringing down delivered cost for Western/Southern and export customers.

The numbers management led with

• Current installed capacity: 5,76,000 metric ton per annum
• Total capacity post-expansion: 8,75,000 metric ton per annum
• Combined greenfield capex: INR 45 crores (Udaipur INR 25 cr + Hospet INR 20 cr)
• Expected raw material cost reduction from mine: INR 1,300-1,500 per metric ton (40% of current procurement cost)
• FY28 revenue target: INR 500-550 crores
• EBITDA margin guidance post-mine: 4-5% improvement over current ~28% level

Guidance on this call

By business

Balance sheet, capex and funding

• FY27 capex (excl. mines) of ₹10-15 cr planned for the two new projects, mainly land and early development; to be spread across FY27-28.
• Total capex on two new plants ~₹45 cr: Udaipur ₹25 cr (₹6 cr land + plant & machinery) + Hospet ₹20 cr (₹7 cr land + plant & machinery).
• Nawada mine: ₹6-7 cr security deposit held by government for 5 years; ₹17-18 cr to be paid in 3 instalments by Jan-Feb 2027.
• Funding: internal accruals; no equity raise planned; may use ₹5-10 cr short-term loan briefly at commissioning. Existing GCP of ₹2-4 cr also to be deployed.
• Working capital release: inventory cut from 90-120 days to 10-15 days post-mine, freeing ~₹20-30 cr for mine funding.

The industry, as management sees it

Management highlighted INR 30,000-40,000 cr of committed capex in the Purulia-Raghunathpur belt for secondary steel, plus a 4-5 lakh ton South India ramming mass market. Industry-level demand visibility described as strong with freight economics the binding constraint.

Risks management named

• Realization price variability of INR 200-300/MT on ramming mass can swing margins
• New plant ramp-up will take 2-3 months post-commissioning for market validation
• Mines require INR 17-18 cr additional payment in Jan-Feb; financing dependent on inventory release
• HPQ/solar/semiconductor developments deliberately kept confidential due to commercial sensitivity
• No buffer from current 28% EBITDA margin if realization falls materially before mine commissioning

Not answered directly

• HPQ / solar crucibles / semiconductor crucibles timelines
• Karnataka plant raw material sourcing specifics

Asked for a number, answered without one

• EBITDA margin for new plants: too early to discuss on the EBITDA margins; the process for us remains the same and stone prices are similar, so we do expect it to be on similar lines
• HPQ / solar / semiconductor / silica bricks / adhesives timelines: definitive timelines will be provided once strategic and material developments have passed the phase where any discussion on this does not hamper the entire process
• Karnataka (Hospet) raw material source: That would not be appropriate for me to discuss right now, but I will definitely do it. Raw material security for new plants to be revealed as developments happen.
• FY29 revenue target: it has been a policy for us not to guide for two years, so let us finish this year. Let us reach 1-2 quarters and then talk about '29
• Capex plans beyond current pipeline: you will get to know as and when we increase in the timeline. At present, whatever is planned has been put on the public disclosure.
• Additional mine acquisitions: in the coming few weeks or months, there will be more clarity on that; no specific plan or count stated

Every question, with its answer

1. 1. New plant ramp-up and margins

   Paras Chheda, Purpleone Vertex

   Question. On the combined INR 45 cr capex for 3 lakh TPA across the two plants, what peak revenue and EBITDA margin can be expected? How long will it take to fill these capacities?

   Answer, Harsh Tekriwal, Managing Director. Realisation is INR 8-8.5/kg. Plants are small and should run at 85-90% utilization, translating to ~INR 8,400-8,500/tonne x 3 lakh tons of additional revenue. EBITDA margins: too early to comment specifically but process and stone prices are similar to current, so margins should be on similar lines. Capacity ramp: should not take more than a year to fulfill; queries already coming from Maharashtra, Bangalore and Punjab belts for last 5-6 months. Strategy is to come with capacity that can be fulfilled easily and then expand — same playbook used when moving from Ranchi to West Bengal in 2018.

   Follow-up. What is the expected rupee per metric ton savings or benefit from the mine for the final product?

   Answer. At present there is no material effect; effect will come once mine starts in January or February. Ballpark reduction of INR 1,400 to INR 1,500 per metric ton on the cost perspective.

   Partly answered.

2. 2. Mine expansion roadmap

   Reet Mandhani, Equitrust

   Question. Are more mine acquisitions planned? What are the key execution risks across the mine acquisitions?

   Answer, Harsh Tekriwal, Managing Director. Company is converting from a core ramming mass company to a high-specialized silica processor and is evaluating segments where there is sufficient technical mastery. Mines will not be operated directly — a fixed-raising contractor will produce and charge per ton (e.g., INR 200-400/ton). Mine and royalty are in company's name but no mining capex or operational involvement. Wherever footprints are added, raw material security will be lined up; more clarity on further mines in coming weeks or months.

3. 3. Mine operating model and funding

   Manav Kothari, Independent

   Question. How will the acquired mine fit into the ramming mass business — operate directly or lease? What share of raw material needs will the mine fulfill? Any execution risks?

   Answer, Harsh Tekriwal, Managing Director. Mine will not be leased (cannot sublease); will keep a contractor who gives 90-95% production commitment and charges per ton. Mine capacity granted by government is ~7 lakh tons; at 90% utilization it will fulfill East India raw material demands. Execution risk: limited because company is not paying now. Security deposit of INR 6-7 cr paid (held for 5 years); first tranche of INR 17-18 cr due Jan-Feb 2027. Funding model: reduce current stone/quartzite inventory of INR 20-30 cr to INR 4-5 cr; freed cash funds first tranche. Mine self-sufficient in 7-8 months thereafter; no further funds required.

   Follow-up. So except general business risk in mining, you are all set to go ahead?

   Answer. Yes.

4. 4. Revenue, margins, capacity and funding

   Karan Maidasani, Equidhan Capital

   Question. Revenue targets for FY28 and FY29? Will EBITDA margins hold at historical levels? Commissioning timelines for Karnataka and Udaipur — why Karnataka first? How will raw material be sourced for each plant? Funding source — internal accruals or fresh raise?

   Answer, Harsh Tekriwal, Managing Director. FY28 revenue target: INR 500-550 crores from existing ramming mass capacity plus some mine spares. Company policy is not to guide for two years, so FY29 not guided yet. EBITDA margins: acquisitions will not affect next year materially; should improve significantly with raw material costs coming down. Karnataka prioritized because land boundary already there and equipment from existing Monolithisch plant is being shifted, enabling faster ramp; Udaipur is also strategic for South African and Middle East trade. Raw material will not be carried East to West; new plants will have local raw material security (details to come). No fund raise planned; company will self-fund. May take INR 5-10 cr short-term loan for 1-2 months at commissioning stage.

   Partly answered.

5. 5. Quality, capability and customer base

   Pranav Shikhare, Finavenue

   Question. On capability building and team expansion across new geographies and the new plants — what kind of ethos and technical investments are being made to ensure product quality consistency?

   Answer, Harsh Tekriwal, Managing Director. Validation stage has already been passed — 50,000 tons sold last quarter translates to 15 lakh tons of steel melting. 90-95% of customers are integrated steel units; 6 of top 10 secondary steel manufacturers are in the portfolio. Markets in which Monolithisch operates, the company is dominant on quality, consistency and stability. Customer retention rates 60-80%+. Now replicating same playbook in West and South at lower freight for customers.

   Follow-up. The same playbook we are dominating in the East, we can expect in South and West — multi-state, same quality and ethos. Thank you.

   Answer. Thank you, sir.

6. 6. HPQ and specialty silica pipeline

   Harshit M., Independent

   Question. Have discussed solar crucibles, semiconductor crucibles, HPQ, silica bricks and adhesives in the annual report. Please throw some light on these verticals and their timelines.

   Answer, Harsh Tekriwal, Managing Director. Three parts in HPQ/solar/semiconductor development; phases are well-defined. Unfortunately, compared to ramming mass, these developments have to be kept well within the company for the company's own goodwill. Definitive timelines will be provided once strategic and material developments have passed the phase where any discussion does not hamper the process.

   Not answered directly.

7. 7. Working capital, margin uplift, FY28 mix, competition

   Tanvi Jain, Independent

   Question. Capex funding source for new plants? Working capital impact given mine and new plants? Will more inventory be required? Margin reduction when fully backward-integrated for East capacity? FY28 revenue mix from existing vs new capacity? Capacity ramp-up timeline for new plants? And view on competitive dynamics given a peer has also announced similar capacity expansion?

   Answer, Harsh Tekriwal, Managing Director. Funding via internal accruals; might need INR 5-10 cr short-term loan for 1-2 months at commissioning. Company objective is debt-free. Working capital will reduce 60-70% because inventory will go from 90-120 days to 10-15 days. Stone inventory mountain of 7 lakh tons is no longer needed. Mine cost saving ~INR 1,300-1,400/MT for East capacity. FY28 INR 500-550 cr: most from existing capacity plus mine spares; new capacity only 2-5 months operational. New plant utilization: 80-85% in first year. On competition: consistent on West and South plans for 7-8 months; will not comment on peer plans. District where Monolithisch plant sits has 20-25K MT/month consumption in 30 km radius; 100 km radius takes 70-80% of utilization. INR 30-40K cr capex committed in Purulia-Raghunathpur belt for secondary steel.

   Follow-up. Demand visibility question — peer has also expanded, you have also expanded. Is there enough demand?

   Answer. Don't know their vision but Monolithisch district demand alone is enough; more capex increment on these belts expected in coming 1-2 years after current installations peak.

8. 8. Capex classification and Karnataka sourcing

   Bhavik Shah, Choice IE

   Question. Will the Udaipur and Hospet plants use captive mines? For Karnataka raw material will be procured from where? Capex estimate for FY27 and FY28 — is INR 50-55 cr FY27 and INR 35-38 cr FY28 correct?

   Answer, Harsh Tekriwal, Managing Director. No captive mines for Udaipur or Hospet. Going forward, company policy: whichever belt, will go integrated. Karnataka source not appropriate to discuss now. Capex framing: mines should NOT be taken as capex — it is a prepayment (royalty paid 60 days prior). Capex run is only Western and Southern plants. Security deposit of INR 7-8 cr with government for 5 years is the only structural change. Actual capex: INR 10-15 cr in FY27 on land and new project development. The Udaipur INR 25 cr and Hospet INR 20 cr will be spent in FY27-FY28 respectively. Funding partly from GCP (INR 2-4 cr remaining), partly accruals, and possibly INR 5-6 cr short-term loan.

   Not answered directly.

9. 9. Revenue math, mine payment, margin and capex

   Utkarsh Somaiya, Eiko Quantum Solutions

   Question. Was the 5,76,000 TPA x INR 8,200/ton = INR 470 cr revenue calculation broadly correct? After this, what are the plans for product/capacity expansion and backward integration? Are mine payments to government regardless of volumes? EBITDA margin outlook once this is done? Commissioning timeline of new 3 lakh TPA? FY29 revenue at 80% utilization? Capex plans for next two years and any fund raise?

   Answer, Harsh Tekriwal, Managing Director. Revenue calc broadly correct; current ramming mass realisation INR 8.6-8.7/kg. Backward integration: mines acquired via tender; 5-year payment commitment and prices hedged; reduced current procurement cost by INR 1,200-1,300/MT. Regional players face 2-2.5% YoY raw material cost increase (3-year avg) which Monolithisch has now hedged. New capacities driven by queries from export markets, Jalna region, South; freight inward/outward is the biggest EBITDA margin lever. Mine payment: not regardless of volume — amount is committed, divided in 5 years, with clear guidelines. Margin uplift: at least 4-5% better than current level, with full benefit by FY28. Commissioning: Karnataka July 2027, Udaipur November 2027. FY29 ramming mass revenue at 80% utilization ~INR 570-580 cr; plus trade revenue from spare mine capacity. No fund raise; debt not the plan; at most INR 5-10 cr short-term loan. FY27 capex INR 10-15 cr; Udaipur INR 25 cr and Hospet INR 20 cr spread over FY27-FY28.

10. 10. Margin math and South market

    Rakesh Roy, Boring AMC

    Question. If we save INR 1,200-1,300/MT from the mine, then the current 28% margin should reach ~40% on current 5 lakh TPA — is this calculation correct? How big is the South market and who is the major competitor there?

    Answer, Harsh Tekriwal, Managing Director. Calculation is completely correct in today's context if the product sells at the price currently selling. Raw material cost is 100% fixed now — mining contract, royalty and transport all capped. Additives remain variable. Realization can fluctuate INR 200-300/MT. South market: 2-3 private limited companies in Bangalore, Chennai, Hyderabad — good companies, focused on different belt. Monolithisch's South focus is Hosapete region and Goa; earlier freight made Middle East and South Africa exports unviable, now addressable. Market size in South: at least 4-5 lakh tons per year; modest initial capacity means 80-90% utilization should be easily achieved.

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