RHI Magnesita’s stock surged by 13% on August 16, following the announcement of the highest-ever EBITDA margin of 17.5% for Q1FY25. This significant financial improvement was partly attributed to the strategic acquisitions of Hitech Chemicals and Dalmia Bharat Refractories, boosting its refractory product offerings.
Over the last month, RHI Magnesita India shares increased by nearly 7%, although there was a 9% decline over the past year. As of 11:30 am, the shares were trading up by 11.7% at Rs 661.20. However, the stock has experienced only a 3% rise in the past six months, lagging behind the Nifty 50’s 10% increase.
The company’s Q1FY25 revenue decreased by 7% quarter-on-quarter to Rs 878.76 crore. This decline was primarily due to a drop in volume by 8%, influenced by factors such as intense heatwaves, electoral activities, rising steel imports, and falling exports, which dampened customer engagement.
Notably, the company’s net profit for the June 2024 quarter was Rs 72.88 crore, a significant recovery from a loss of Rs 257.89 crore in the previous quarter. This turnaround was driven by a robust product mix and a one-time high-margin order that pushed gross margins to 45%, up from 43% in the preceding quarter.
Sequentially, the EBITDA for the June quarter increased by 4% to Rs 154 crore, demonstrating resilience in the face of challenging market conditions. This performance highlights RHI Magnesita’s effective strategy in managing costs and enhancing profitability through improved product offerings and strategic acquisitions.
