Buy Mishra Dhatu Nigam; target of Rs 445 : ICICI Securities

ICICI Securities's research report on Mishra Dhatu Nigam

MIDHANI’s Q2FY26 performance was disappointing. EBITDA fell 33% YoY to INR 328mn, following a 20% YoY fall in revenues to INR 2.1bn as some of the dispatches shifted to H2. Management continues to guide towards meeting its INR 13bn top line with EBITDA margin of ~23% in FY26; its long-term guidance also remains intact at INR 20bn. Order book (OB) has already jumped to INR 22bn, from INR 18.3bn at the end of Q1, implying book/bill (TTM) of ~1.7x. We remain positive on the prospects of the company as titanium/superalloys demand in India is set to rise on the back of an improving defence production ecosystem. We maintain BUY with a TP of INR 445 (previously INR 450), based on 35x FY28E EPS..

Outlook

We have factored in a 17% revenue CAGR over FY25–28E with progressing EBITDA margins of 21% in FY26 and 22% in FY27 and 23% in FY28 in our estimates. We maintain BUY with target price of INR 445 (previously INR 450), based on 35x FY27E EPS.