Midwest LtdQ1 FY27
Midwest Ltd Q1 FY27 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹1,114P/E: 37.1Market Cap: ₹4.1K CrSector: Consumer Durables
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
No
Order
Yes
Capex
Yes
2 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 3- →Granite revenue growth expected at around 10-12% for FY28, building on previous strong performances.
- →Quartz business to grow from approx. INR120 crores in FY27 to INR180-200 crores in FY28 with further contributions from Phase 2 starting mid-next year.
- →Quartz production volume stabilization targeted at 15,000 tons per month by Q4 FY27; break-even expected by Q3.
- →Overall FY27 revenue guidance is conservative at approx. INR840 crores, with INR720 crores from granite and INR120 crores from quartz.
- →Volume growth in key granite products (Absolute Black and Black Galaxy) around 10% year-on-year.
- →Sri Lanka and Kerala projects expected to become significant revenue contributors post-policy clearances and government approvals; Sri Lanka plant construction projected to start Oct 2026 with operations 12-15 months later.
- →Indonesia JV in early stages, with potential for sizable future contributions.
- →Emphasis on parallel execution of multiple projects to translate growth opportunities into numbers within 18 months.
Margin guidance
Category 3- →Midwest Limited aims to translate multiple growth opportunities into numbers within the next 18 months via independent, significant teams. (Page 16)
- →Granite segment expected to grow around 10-12% annually; FY27 granite revenue guidance ~INR720 crores with growth momentum to continue. (Pages 12-13)
- →Quartz business Phase 1 revenue expected to rise from INR120 crores in FY27 to INR180-200 crores in FY28, with an EBITDA margin of around 30%. (Pages 12-13)
- →Quartz production targeted to stabilize at 15,000 tons/month by year-end, reaching profitability in the current fiscal year. (Pages 4-5, 9, 12)
- →Overall FY27 revenue guidance is INR840 crores, up from INR645 crores last year, with EBITDA margins maintained in 26-29% range despite challenges. (Pages 8-10)
- →Operating margins expected to improve in FY28 due to higher quartz contribution and optimized overhead absorption. (Pages 12-13)
- →Expansion projects including Phase 2 quartz and Sri Lankan plant progressing; capex ~INR125 crores for quartz Phase 2 spread over FY27 and FY28. (Pages 7-8)
Fundraise plans
No- →For capex funding, management indicated that the gearing ratio is currently low at 0.2 times, implying available leverage capacity.
- →The Kerala pilot plant capex is insignificant and largely funded internally.
- →The Sri Lanka project capex (around INR120-150 crores) is expected to be funded from internal accruals if it materializes.
- →For Phase 2 quartz expansion, fresh equity has already been raised, and the spend will be as per timeline.
- →Management does not currently plan to reduce promoter holding from 77% to 75% and does not foresee near-term equity dilution.
- →Overall, the company’s approach is to use internal accruals and leverage (debt) as required, with no immediate plans for major fundraising through equity or debt.
Order book
Yes- →Management expressed optimism about the current and expected order book.
- →They aim to take on all mentioned opportunities in parallel with independent teams for each significant project.
- →The goal is to translate these opportunities into measurable numbers within the next 18 months.
- →The momentum in granite demand and volume increase is strong and expected to continue.
- →For FY27, the revenue guidance is around INR 840-850 crores, with granite contributing ~INR 720 crores and quartz ~INR 120 crores.
- →Orders appear robust with a 33% growth in granite and ~10% volume growth in key products like Absolute Black and Black Galaxy granite.
- →The company plans to maintain or exceed 10-12% growth on granite for the next year conservatively.
- →They are well-prepared operationally to handle external factors and continue order fulfillment smoothly.
Capex plans
Yes- →Quartz business Phase 2 capex: Approximately INR 125 crores, split over current and next year (Pages 4, 7, 12).
- →Sri Lanka project capex: Around INR 120-150 crores for plant building; build-out expected to start next quarter with 12-15 months plant build-out timeline (Pages 6, 7, 14).
- →Kerala pilot plant capex: Insignificant cost as it's a pilot plant; Phase 2 pending government approval (Page 14).
- →Indonesia rare earth project: Plans forming 2 JVs (mine to oxide by Midwest Limited, oxide to magnet by Energy); capex details evolving (Pages 15, 19).
- →Ongoing electrification efforts in granite operations to reduce diesel costs (Page 9).
- →Total capex planned around INR 800-900 crores across projects (Page 14).
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Margin guidance
Category 3- →Midwest Limited aims to translate multiple growth opportunities into numbers within the next 18 months via independent, significant teams. (Page 16)
- →Granite segment expected to grow around 10-12% annually; FY27 granite revenue guidance ~INR720 crores with growth momentum to continue. (Pages 12-13)
- →Quartz business Phase 1 revenue expected to rise from INR120 crores in FY27 to INR180-200 crores in FY28, with an EBITDA margin of around 30%. (Pages 12-13)
- →Quartz production targeted to stabilize at 15,000 tons/month by year-end, reaching profitability in the current fiscal year. (Pages 4-5, 9, 12)
- →Overall FY27 revenue guidance is INR840 crores, up from INR645 crores last year, with EBITDA margins maintained in 26-29% range despite challenges. (Pages 8-10)
- →Operating margins expected to improve in FY28 due to higher quartz contribution and optimized overhead absorption. (Pages 12-13)
- →Expansion projects including Phase 2 quartz and Sri Lankan plant progressing; capex ~INR125 crores for quartz Phase 2 spread over FY27 and FY28. (Pages 7-8)
Order book
Yes- →Management expressed optimism about the current and expected order book.
- →They aim to take on all mentioned opportunities in parallel with independent teams for each significant project.
- →The goal is to translate these opportunities into measurable numbers within the next 18 months.
- →The momentum in granite demand and volume increase is strong and expected to continue.
- →For FY27, the revenue guidance is around INR 840-850 crores, with granite contributing ~INR 720 crores and quartz ~INR 120 crores.
- →Orders appear robust with a 33% growth in granite and ~10% volume growth in key products like Absolute Black and Black Galaxy granite.
- →The company plans to maintain or exceed 10-12% growth on granite for the next year conservatively.
- →They are well-prepared operationally to handle external factors and continue order fulfillment smoothly.
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