Rhi Magnesita India Ltd (NSE: RHIM) Q3 2026 Earnings Call dated Feb. 16, 2026
Corporate Participants:
Rajesh Majumdar
Parmod Sagar — Managing Director and Chief Executive Officer
Azim Syed — Chief Financial Officer
Analysts:
Unidentified Participant
Garvita Jain — Analyst
Amit Agija — Analyst
Rajesh Majumdar — Analyst
Mayank Bhandari — Analyst
Abinash Swaminathan — Analyst
Prathanjali Srinivasan — Analyst
Ashish Kejriwal — Analyst
Sahil Sangvi — Analyst
Swaraj Mehta — Analyst
Praveen Jayaram — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to RHI Magna Seta India Limited Q3FY26 conference call hosted by BNK Securities. As a reminder, all participants line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance due during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajesh Majumdar from BNK Securities. Thank you. And over to you sir.
Rajesh Majumdar
Yeah. Good morning everyone and welcome to the Q3 and 9 month FY26 conference call of RHME India. We have with us today Mr. Parmod Sagar, Chairman, MD and CEO and Mr. Azim Syed, CFO of the company joining us in this call. Before we get started, I would like to point out that some statements made or discussed on today’s call will be forward looking in nature and must be viewed in conjunction with risks and uncertainties that we face. The company does not undertake.
Rajesh Majumdar
To update.
Rajesh Majumdar
These forward looking statements publicly. I now hand the conference over to Mr. Parmod Sagar, Chairman, Managing Director and CEO from Maharish Sim. Thank you. And over to you sir.
Parmod Sagar — Managing Director and Chief Executive Officer
Thank you. Rajesh ji. Good morning everyone and thank you for joining us today. The quarter gone by has been defined by resilience and ability to sustain momentum in the face of macroeconomic headwinds. We have maintained our market leadership on the back of our diversified product portfolio, long standing customer relationships and agile production capabilities at the outset. Let me start by highlighting that safety remains our highest priority at RHA Magnesica. I’m pleased to share that we have been formally recognized by the World Refractory association for exemplary safety performance across nine refractory service locations. By enabling safer, more efficient steel and steel production, we are strengthening India’s industrial backbone and supporting the 5 trillion economy vision with sector line supply chains.
This quarter we maintained our strong market position and achieved record revenue again to the tune of 1092 crores. Despite micro headwinds impacting the overall market, we once again surpassed our 1,000 crore revenue benchmark. A testament to our strong business fundamentals. EBITDA achieved at 13.7 in this quarter which is highest in this fiscal year. Strong iron making project order delivered through OEM orders coupled with good momentum in flow control and 4 Pro delivered expected and tangible. Even though the external environment remains demanding. Our purpose reflect the steady outcome of strategic decisions made consistently over a long period of time.
From industry perspective refractive continue to face structural pressure as domestic over capacity addition outpaced demand and oversupply of importance commoditized effective products further intensify market challenges. A similar situation exists in our core end market of steel and cement as well and steel producers face Chinese steel dumping but safeguard tariff of 1112 percent in Q3 and production linked incentive were introduced by government helped to curb low price imports. Hence India returned to a next steel exporter position in Q3 2526 after six consecutive quarters. However it must be noted that the SAFELO tariffs are only applicable for specific grade of flat steel products.
Despite Indo Euro and Indo US trade deals, no further increase of imports exports in steel are to be expected. Cement sector delivered strong shipment volume during this year, however margins were understained with capacity utilization between 55 to 60% only with a 10% year on year increase in government capex along with real estate focus lost in recent budget, it is expected to improve utilization level further. The recent budget sustains strong infrastructure spending across roads, railways, housing supporting steel and cement demand. The construction and infrastructure equipment scheme will promote heavy equipment manufacturing further boosting steel consumption while the 20,000 crore carbon capture utilization and storage fund advanced decarbonization in steel and cement together 10% capex growth the CIE scheme and decarbonization initiative create a structural opportunity for effective sub trials aligned to steel cement value chain.
However the industry continue to await targeted interventions such as duty relief on key raw materials to enhance cost competitiveness. The above initiatives are positive from a growth perspective are our customers. However we are cautiously optimistic due to the industry challenges. Our strategic initiatives are gaining traction across both solution led and product led businesses. Our future focus for this and next year would be on strengthening the core while delivering sustainable long term growth. Our focus areas for this year include expanding our FOR PRO footprint across cement steel iron making sector. As you people know 4pro means total refractory management with sustainability included in that focus on our customer relationship Strengthening our iron making business by enhancing our presence in Procomon and blast furnace area by launching new DRI products Increasing our share in glass furnace runner management and Tapolclay supported by commissioning of the semiautomatic Tapolclay line in Jamshedpur, Solidifying the HPI hydrocarbon processing industry business of legacy RESCO from US in India and establish a clear growth roadmap.
Continue with our cost optimization program to remain competitive and control the spend with the right trade offs Advancing our RD agenda by optimizing recipe with recycling to support circular Economy initiative while escalating new product transfer, development and portfolio harmonization, maintaining strict margin discipline to ensure sustainable and profitable growth. India remains a key market for global refractory suppliers with competitive intensity high across products and customer segments. Despite this, we remain confident in our ability to respond to challenging market needs while remaining mindful of short term challenges. We are cautiously optimistic about the path ahead. Financial year 2526 till now demonstrated a resilience and we are now focusing on converting this into tangible gain through disciplined execution and sustainable market share expansion.
We are honored to have received recognition from both Steel 40 of India and Tata Steel Group affirming the strength of our product quality and execution cfw our social governance excellence underscore our dedication to responsible business practices while Tata Steel naming us a Joint Partner of the Year highlighting our capability to deliver in complex steel making environment also we have received Safety award from Tata Steel. In summary, while challenges remain, we are confident that our strong fundamentals, disciplined execution and customer focus will sustain our growth momentum. I will now hand over it to Azim to take you through the financial performance in detail.
Thanks a lot.
Azim Syed — Chief Financial Officer
Thank you Pramodji and good morning to all. Let me now walk you through the financial Results for the third quarter of FY26. Despite market headwinds, we achieved our highest ever quarterly revenue of Rupees 1092 crores. This reflects a sequential growth of approximately 5.5% over Q2FY26 and the year on year increase of 8% versus Q3FY25. This growth underpins our strategy in action. This growth was driven by four pro wins across steel plants and project deliveries. In iron making, average realization improved sequentially rising to rs80,410 per metric ton in Q3FY26 from 73,237 per metric tonight in Q2FY26 reflecting an improved product mix, one time performance, bonuses and pricing discipline.
The same is reflected in adjusted EBITDA at rupees 150 crores which marks a 36 improvement over the previous quarter and 14% year on year. EBITDA margins improved to 13.7% compared to 10.7% in Q2 driven by the same reasons which we mentioned for realization. Profit after tax for the quarter stood at rupees 62 crores up by 61% quarter on quarter and 29% year on year. Additional employee costs arising from the new wage code implementation and higher cost due to rupee depreciation pressured margins which was offset through Operational Excellence program which Focuses on better manpower planning, machine level loading and tighter control over discretionary spends.
I’m pleased to share that we recorded highest ever operating cash flow at 289 crores in current quarter representing a 627 percentage quarter on quarter increase. This improvement was driven by strong EBITDA growth, disciplined working capital management, particularly tighter inventory control and improved collections. Turning to the balance sheet, we continue to operate with strong capital discipline. Between Q2 and Q3 FY26 net debt reduced from 200 crores to a net cash position of 35 crores. Hence net debt to EBITDA ratio improved from 0.5x to minus 0.1x which is first time negative leverage post acquisition. This reflects disciplined capital allocation, robust cash generation and tighter working capital management.
We now have ample capacity to fund working capital requirements and pursue any growth investment without overleveraging the company. Looking ahead, we remain confident and realistic quarters driven by robust order book and pricing initiatives, input cost optimization through our productivity initiatives and normalizing raw material cost. In closing, RHA Magnacita India delivered solid top line growth with strong margins in Q3 despite industry headwinds. Business fundamentals have positioned RHM Magnacita India for success through strong industrial demand, solid execution on strategy and a healthy balance sheet. Thank you to all our stakeholders for your continued trust and support. We will now open the line for questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Garvita Jain from seven island pms. Please go ahead.
Garvita Jain
Hello sir. Good. Good morning. I have one question. I mentioned that there was one time bonus received. Can you quantify what was the amount of the bonus during the quarter? Plus what are the other factors which are driving the margins for us and the sustainable margins?
Parmod Sagar
Actually when Dream said one time bonus it doesn’t mean it is one time. Actually in last quarter we did some ladder and converter lining and over a period of time it start realizing in bonus because there’s a guarantee clause and when you are over receiving that guarantee then you are getting bonus. So that we got in this quarter and we assume that we it will continue that quarter as well. Because whatever we supply to the steel industry on guarantee basis it is yielding results in Terms of bonus.
Garvita Jain
Like what? Yes, yes, we are clear about the process. But I’m asking what is the amount that we have received this quarter and how much are we expecting for the next quarter?
Garvita Jain
Also,
Azim Syed
we don’t give those outlooks or the current performance. We separate out that performance purely because it’s very difficult even for us also to model this because it has multiple factors. One, how many contracts we have. Second, is also the performance of the products and when it will be realized based upon the steel production or consumption of our material. So we don’t give out this material. We have never done that historically. Will not start to do that now. Thank you.
Garvita Jain
So the amount of bonus cannot be disclosed?
Azim Syed
No, we don’t do that because of the variability, as I mentioned earlier.
Garvita Jain
Okay, okay. And the margins this quarter, despite of this bonus, has increased because of what are reasons here?
Parmod Sagar
Yes, absolutely.
Azim Syed
Yes, absolutely. Yes. Sorry. The question was.
Garvita Jain
It was because of the product mix majorly, right? Absolutely.
Azim Syed
The previous quarter we had cement as well that had a lower realization, right? This time we have not the cement orders. We also have some high margin OEM orders that also contribute to the increase in the margins as well, despite the performance.
Garvita Jain
Okay, okay, go ahead, sir. Thank you. That’s all.
Garvita Jain
Yes,
operator
thank you. Anyone who wishes to ask a question may press star and 1. The next question is from the line of Amit Agija from HG Hawa. Please go ahead.
Amit Agija
Yeah, Good morning and thank you for the opportunity and congratulations for good set of members. So what is the total installed capacity across plants and the utilization rate? And what will be the peak revenue if the plant is 100% utilized?
Azim Syed
So the current quarter capacity utilization on a consolidated manner is 64 percentage. Again, the basic question is that the installed revenue on overall capacity utilization cannot be directly derived because of multiple reason. One is the pricing ability. Because as you know, in Chairman’s market, I clearly heard that we have quite a bit of a market headwind. So the realization rate is subject to, especially for the commodity products, it is subject to the market conditions, so you cannot directly consolidate it. Second reason basically also is that our lines are sometimes flexible, which basically means sometimes we can do different product portfolio on the same line.
So hence basically what it is very difficult for us to kind of say that, okay, fully produced, you’re going to get this because in some months we have project orders, project orders especially for the industrial, let’s say like MSM glass, which has higher realization rate versus a cement break which has probably a lower realization where it will completely skew up the number Having said that, the line process is completely different. It’s just the raw materials and the recipe that we use are completely different. So unlike cement or steel industry, it’s very difficult to directly give an estimate here.
Amit Agija
And so the next question is about the recycling percent target currently. I think so. In presentation it is mentioned 19%.
Parmod Sagar
Yes. So our target is to take it beyond 20%. It will be gradual process. You cannot jump from 19 to 25 or so. You need to see the products where you can increase without impacting any quality or performance. We are not compromising. We are using recycled material after thorough processing as raw material. Not just taking out a used material and crushing and putting it in surface. It will be gradual, but still we are going reasonably well.
Amit Agija
Thank you. Thank you, sir. Well, I appreciate you answering my questions. All the best for the future.
operator
Thank you. The next question is from the line of Rajesh Majumdar from BNK Securities. Please go ahead.
Rajesh Majumdar
Yes. So I had a question on the realization. While it has jumped from 73,000 to 80,000 odd sequentially, this captures some part of the performance bonus. Is that correct? So what is the realistic relation group that has happened this quarter and what is the sustainable realization per ton? I just want to get a hang of the price increase that you’ve got, that’s all.
Parmod Sagar
Yes, it has an impact on because of bonus in realization. But it is not that substantial that it cannot underline that it is because of bonus. Right. And you know, it will keep on changing also depending upon the product mix. Like this quarter, Gen Fab March is a lean period for cement industry. Okay. So it will have a different impact on volumes and profitability in that particular segment. But at the same time, if you have a high end like a saying glass order or coco burn order, then it also rectify it, you know, neutralize it also.
So I think anything between 76 to 80 should be, you know, the numbers are healthy numbers without any performance bonuses, etc.
Azim Syed
Also, just everybody on the call, what do we mean by performance bonus? This also has an impact on the realization. It is that in the previous quarter for these contracts we have installed the material. That means we have taken a cost in our P and L and we have not realized any revenue or profitability because you earn after the product performs. So there is a lag in the way we earn the money for the cost that we have incurred in the previous quarter. So this also has an impact on the realization rates as well. We call it bonus because it comes a bit late and also depends upon how much Performance it gives.
So just to clarify that although it’s called a bonus, it’s just a lag effect of the materials that we install and the performance of the product. These both determines our performance bonuses.
Rajesh Majumdar
Yes, that’s useful. Just a follow up question on the margins. So we had guided 14 to 15% margin that we are going to see in terms of normal business coming through in fourth quarter. This is without the predict order.
Parmod Sagar
Rajesh. There’s a saying. But we have too much headwind. I still say we want to have a sustainable margin between 14, 15%. This is our wishful thinking. And not only thinking, we are working towards that with various processes and levers actions in place. That’s why you see this upside in this quarter. And I cannot preempt for the next quarter. But I think we should be now in this line in coming days as well. Whatever we action taken, it will keep on yielding results in coming days as well.
Rajesh Majumdar
Thank you so much. I’ll join back in the queue.
Parmod Sagar
Thank you.
Azim Syed
Thank you.
operator
Thank you. The next question is from the line of Mayank Bhandari from Asian Market Securities. Please go ahead.
Mayank Bhandari
Thanks for the opportunity. So what would be the export contribution in the nine month?
Parmod Sagar
It is flat as of now like last year, 9, 10%. You know market in the international market is so docile. We did a lot of trials. But I think last quarter also I mentioned this. Maybe in 26th April onwards we will have some upside in export. Because whatever trial we did in this nine months and are doing in this current quarter probably it will start converting into order. So there will be some uptick. But at the same time it will not be, you know, exponential. Because the export is only ISO static and slide gate refractory which we call flow control.
So flow control, turning device or revenue wise is not, you know, it is as I said earlier, it is about 25% of your total revenue. So if it is 25% and if it increases maybe from 9, 10% it will go to 11% or 11.5% or 12%. It will not be from 9, 10 to 20%. Okay.
Mayank Bhandari
So flow control contribution also is stagnant. I mean flat. Yoyo. Like the overall as part of the.
Mayank Bhandari
Overall revenue
Parmod Sagar
there is a bit of increase but not substantial. Sorry.
Mayank Bhandari
Okay. And just on the margin, if you could just give a flavor on the Q4 what we are expecting in terms of margin.
Parmod Sagar
That’s what I said to the JG also we expect it should be on similar lines. If not better.
Azim Syed
Slightly better.
Mayank Bhandari
Okay, thank you.
Parmod Sagar
Thank you. We want to be a bit cautious because of market conditions.
Azim Syed
Yeah.
operator
Thank you. The next question is from the line of Abinash Swaminathan from Nafa Capital. Please go ahead.
Abinash Swaminathan
Hi John, congrats on a good set of number. Just a couple of questions. So earlier say five, six years back we were completely focused on steel segment and now we have progressed into the cement and ion. Is it because of a stagnation in TAM growth in the steel segment that resulted in us exploring this lower margin opportunities? That’s number one. Number two, can you also quantify your current market share in steel, cement and iron? Thank you.
Azim Syed
So I will take this. So I think our strategy always has been to kind of, you know, grow in refractory business. And with I’m sure you, if you’re covering steel market you will very well know that the Indian GDP for the GDP consumption for cement is the lowest in the entire world, especially for the middle class market. So because of this and also we are also very clearly seeing that the infrastructure spend would be also going higher on the government from a government perspective. So these two factors basically points to a very clear realization that the cement market is going to boom in the upcoming years.
I’m talking two years back and today it’s a reality. Even in the current union budget you can see the amount of infrastructure spend was allocated. So with this in mind we wanted to also grow in the cement market and hence we did couple of acquisitions that kind of supported our cement growth market. To kind of to clarify the second question. So although it is lower realization there’s going to be a good growth opportunity. And our strategy from the beginning was that we want to be having the highest market share and grow with the market where possible or in some cases outgrade the market itself.
And for the outgrowth of the market we are basically focusing more on the iron making, bra, coco and pallet business. Now coming to the market share we have about 32 percentage market share in the steel side. And on the cement side we have close to about 40, 41 percentage of market share in the business. To answer your question.
Abinash Swaminathan
Thank you sir. Just a follow up. In the steel segment last quarter we said that the margins have improved along 0.4%. So how’s the margin for this quarter?
Azim Syed
Can you repeat the question? The margin was how much you said in the last quarter.
Abinash Swaminathan
So in the last quarter we were told that the margin in the cement segment specifically was 11.4%. It improved from 8% to 11.4. So what could be the margin from this quarter?
Azim Syed
We normally don’t give out the margin separately by steel. And so I’m just. I cannot recognize that number.
Parmod Sagar
But actually probably you are saying from Dalmia plant.
Azim Syed
Yeah, that’s right.
Parmod Sagar
It is not cement. But yeah, primarily it is the industrial business.
Azim Syed
Okay. Okay.
Parmod Sagar
So that. That is almost at same level. 10.5% to 11% or so.
Azim Syed
Exactly.
Azim Syed
Right.
Abinash Swaminathan
Perfect. Thank you, sir. And congrats on a great set of numbers. Thank you.
Parmod Sagar
Thank you.
operator
Thank you. The next question is from the line of Prathanjali Srinivasan from Sundaram Mutual fund. Please go ahead.
Prathanjali Srinivasan
Thank you for the opportunity. I have a couple of questions. So firstly can you tell me what is the revenue mix for the quarter between cement and steel and did we get any benefits of new plant commissioning in this quarter?
Azim Syed
Let me give you the number for the ratio between cement and fish. So steel was at about 80 percentage. Industrial was 20% of which cement in particular was close to about 10%. And for the greenfield. Yes. We have signed some new contract with some of the greenfield project with one of the biggest industrial integrated steel plants somewhere in Punjab.
Azim Syed
Okay. So basically Startup steel Ludhiana we just signed a 4Pro contract as well in the month of January. Which as soon as it will get commissioned somewhere in the middle of the year we’ll start taking the benefit of
Parmod Sagar
middle of March.
Parmod Sagar
Probably they have a target to commission. So next fiscal it will be upside. The business should be on the tune of say 5 to 6 million or 50 to 60 crore additional business from that 4 crore business.
Azim Syed
Exactly.
Parmod Sagar
And it is end to end. Furnace ladder, ISO flow control, everything. The first time in Tata Group, you know strategy they have given from the commissioning Stage 4 Pro contract to any reflective industry in the world. So that is a big achievement.
Prathanjali Srinivasan
Great, sir. And next question I have is with respect to the quarter we saw a fair bit of improvement in margins. So can you explain how this margin switch has happened? Is it because of improvement in pricing with respect to product mix or is it because of a general reduction in input costs? What is the lever that’s helping us to generate this higher margin?
Parmod Sagar
Actually this is. We cannot pinpoint one lever. We are working on many things. Raw material is softened a little bit. Yes. But we are saying input cost at the same time. We did this operational excellence in our plants to control the cost. We start working on optimization of recipes, product specification. Exactly. To the requirement of the customer. We start increasing our recycling rate in our plants. We are working on reducing our the crap rate or rejections. So there are multiple things at the same time. We are very cautious about pricing with our customer. Wherever we need a price increase, we are pushing for that.
And at the same time, if the pricing is so bad and not into rat race. Hello.
Parmod Sagar
Yes, we are not into rat race.
Parmod Sagar
Getting the order at any cost. We have our internal strategy up to what level we will go for a order or if it is below that, we will not go, we will leave it. So these are yielding results. Okay.
Prathanjali Srinivasan
Okay. So if you have to bifurcate like we had a 200 bits improvement in gross margin, how much would you see came from internal efficiencies and how much is from RM softening?
Azim Syed
Your question was not here bifurcation of what you were seeking.
Azim Syed
Can you please repeat?
Prathanjali Srinivasan
Yeah, so the 200bps improvement that we have in gross margins, could you tell me like how much of it came in from internal efficiencies and how much of it is from softening of raw material?
Azim Syed
So there was a say if you.
Azim Syed
Can, you cannot see that direct bifurcation. But if you have to make an assumption, you can look into the other expenses. Maybe that will give you a very good idea in terms of how we have improved our operational cost as such, from a per term perspective. That’s one of the ways to look at that. But again it’s a super high level just from assumptionary purposes. You can use that on the material cost. You can basically say that although we had a softening in the alumina prices, this was further negated by FM graphite and bauxite price increases as well.
So there were, there were, there were. So you need to take this number with a pinch of salt here because.
Prathanjali Srinivasan
I do get the broad reduction in other expenses. That is only thing is the improvement in gross margin, is it a pricing function where we went for a better quality, quality product mix or is it because we had benefits from input cost volume? So I’m just trying to figure out.
Prathanjali Srinivasan
Which of the
Azim Syed
as Pramodji mentioned. See in the previous quarter we had low margin cement order. So you had a realization impact. This time you don’t have the low order cement order second product mix. So we had more converters RHT gases that we sold in the current quarter. So you had a product mix improvement as well. Now what Pramodi mentioned is that on top of this we had some operational excellence programs which we do normally every quarter. We do this as a part of our continuous effort where we are focused on operational excellence program which focuses on two things.
One is productivity, second is on the safety measures. So this also aided Our benefit because as you saw that our volumes are lower which basically means that on the cement side we had lower volumes. The question is how do you effectively plan your manpower? How do you effectively plan your raw materials and finished goods? So these kind of operational excellence program have further improved our results. I hope that gave a clarity.
Prathanjali Srinivasan
Yeah, that explains it very well. I just have one last question. Can you tell me what is our target with respect to this traded goods volume that we have with our parent and are we trying to substitute that with a bit of domestic production going forward? Do we have any strategy there?
Azim Syed
Absolutely. Your voice is not clear. But let me repeat the question. What you answered, your question was what is the target we are that you are looking forward in the trading percentage? The answer is that we don’t have any specific target there. But if you ask me differently, do we want to localize it? Yes. You can see in our investor deck on, on the R and D page in terms of the amount of new product transfers and development we are doing. Again the focus is more to get some highly specialized product especially in the area of cement and some of the high end technically advanced solution.
We are in the process of transferring now once we. Although we have transferred the technology we need to localize it to the local market demands. So yes, our domestic production on this product portfolio will increase quarter by quarter. It will be a slow and steady increase because we need to have the product acceptability we need to demonstrate through various trials. And once there’s an acceptance we will see the production volume increase as such. I think you are seeing this in the trading percentage also going low as well. So over the course of years. Yes, it will increase.
Prathanjali Srinivasan
Yes. Just to continue on that, I get that you’re directionally. You’re moving towards a higher links. I’m just trying to figure out what would be our long term or three or three year target in terms of how much of our volume should we want to keep entirely from our domestic production? Because I think today 40% roughly in terms of volumes is from the traded parent. So what would be a number that we would look at to achieve a couple of years to.
Azim Syed
So these volumes is not only the parent company, this volume also includes the tool manufacturing as well. So please bear that in mind that it just it’s not like 40 percentage of the volumes we are completely trading. We’re getting from the group. That’s the first assumption I want to kind of, you know, qualify. The second basically is that if you think about the product transfer we look at it from. From how much of added benefit it will have. Again, based on multiple factors. One is the closeness of raw material. Some of the products are very closer to our parent company’s raw material production.
So you get quite a bit of unique geological benefit. Of course these products will not transfer. The products we will transfer is that where we have availability of raw material, our ability to produce the technology. And third, of course is a solid business case. We only entertain if the business case is a ROIC in double digit. Once these three things gets qualified, that’s where we make the investment and ensure that it’s moving. At the moment, if you look at it, we are more focusing on our industrial business which is basically cement and non ferrous metal and glass.
So this is where we are focusing apart from some of the acquisitions that we have done recently. So this is where we kind of think about how we can localize the product portfolio. We will not give the percentage because it will tip off the market in terms of what are the products we are bringing in here as well. But we will keep on updating whatever products which is in product for transfer. On page number 17 we can see the investor deck something similar. We will start to publicize this.
Prathanjali Srinivasan
Thank you so much.
Azim Syed
Thank you.
operator
Thank you. The next question is from the line of Ashish Kejriwal from Nuama. Please go ahead.
Ashish Kejriwal
Yeah, thank you for the opportunity and many congratulations with setup number. So my question is again on the margins. As you rightly pointed out in the beginning of the conversation that no situation in the market is not so great in terms of oversupply situation. But at the same time, if you look at the profitability of steel businesses that has improved significantly in last two quarter or last one quarter. So do you think that from here on if any margin increase could happen, will it be possible for us to take price hikes to improve the margins or its margin improvement can only depend on our product mix or internal efficiencies.
That’s my first question.
Parmod Sagar
You know, we always try to get price increases from our customer wherever is possible. At the same time, you know, market is so over capacity and you know, if you with due respect to our competition, most of the competition try to grab order at any price. So when they are so aggressive to get the order to getting price increase become very, very difficult. You know, in one of the cases, I just gave you an example, in one project, cement project, we were at 8% margin and then the counter came to us with 13% lower margin, 13% negative margin.
And one of our competitor took that and it is not A, B or C grade competition. It was A grade, our level of competition. So, so some people, you know, try to just grab the order to fill their additional capacity which they have created. So it became very, very difficult to, you know, go and say I need a premium, I need a, you know, different pricing than the competition. So best way how you can control your cost, how can you increase your, you know, efficiency, productivity, reduce your scrap rates, increase your recycling? So we are working on that.
At the same time, we will keep on striving for price increases. As you said, steel industry, if they will have a comfortable situation with their margins, definitely they will not be so rigid about price. But at the same time, industry as a whole has to behave responsibly.
Ashish Kejriwal
Understood? And secondly, whatever cost benefit we could have taken on account of raw material cost lower that we have already factored in, and from here on we are not expecting, at least for a quarter or two, any raw material cost advantage to kick in the pnl.
Parmod Sagar
I don’t see now because Albina prices are at its bottom. So it can go up, will not go down further. Magnesia, if we talk about it has a bit of upside and I don’t see it will go further up. So I can say it can be a status quo for next two, three months to maybe four, five, six months. There will not be a substantial delta upside downside.
Ashish Kejriwal
And lastly, sir, because now we are into net cash status, so two things. Either will promoters will be willing to buy stake. If Dalmia tries to reduce their stake from 13%, are the companies willing to increase our stake? Are the promoters willing to increase the stake in the company? Or with this cash status, are we more inclined to go for any inorganic expansion?
Parmod Sagar
You know, as of now, nothing is on the table. We have not discussed anything at length whether we want to, you know, buy back those shares or not. Maybe if Dalmia has to come, you know, forward, whether they want to sell it off or not, and then we will take a call whether we want to or not. And about this second part, what we are saying is inorganic, that also we don’t see in 26. Actually, I personally don’t see. I wanted to consolidate whatever we acquired. Okay. But again, if the company will push us. No, no, this is a great opportunity, we should do that.
We will definitely try to do that. But as of now, my idea is just to consolidate, bring the, you know, margin level to a respectable level, sustainable margin, and then think of further expansion or acquiring the company.
Ashish Kejriwal
Very clear. So at least promoters are not averse to buying Dalia stick if it comes in the market.
Parmod Sagar
I’m not saying they are not a worse. We have not even discussed because Dalia has not reached out to us whether they want to sell off their shares or not. When they will reach out, then we will talk to the parent companies, CH Workers, our global CEO, and then we will come to know whether they are ours or not ours.
Parmod Sagar
Okay, fine.
Parmod Sagar
Thank you.
Ashish Kejriwal
Thank you so much. And all the best.
Parmod Sagar
Thank you so much.
operator
Thank you. The next question is from the line of Sahil Sangvi from Monarch Network Capital. Please go ahead.
Sahil Sangvi
And congratulations again for a record revenue number. My first question is. Yeah. My first question is if you can help me understand what is the percentage of imports that is posing a big competition to our Indian market? I mean, what is the percentage to our total demand? If you can give some number. And also, what kind of products are these? Are this. Are these largely breaks or just a bit of color on that? What kind of products are these?
Azim Syed
So our export volume, our export revenue Percentage for the Q3 number is 11.8 import. Oh, okay. My apologies. I misunderstood it. Yeah. So we basically group this number with a set of the trading percentage numbers. We don’t give out this specifically because it gives us a little bit of a competitive edge in terms of the product profile that we import. Sahil Azim.
Sahil Sangvi
Sorry, I just rephrase my question. I meant as a country, the kind of imports that we are having, which is posing a threat to the overall, you know, how it’s getting an oversupplied market. So just that on that color, I mean, promotes are. Did allude to a lot of imports coming. So, yeah.
Parmod Sagar
Mostly, you know, there are two buckets. One is where we have a technological advantage like our product, like Anchor Hut.
Sahil Sangvi
Okay,
Parmod Sagar
everyone.
Parmod Sagar
Our competition over the ages, years after year, tried to copy that. They could not because of some inherent, you know, raw material available with us. And this is a very niche product. So we cannot make it in India. So it will keep on importing because if our electric as furnace, this is the heart of that, you know, performance and that give us lot of advantage over our competition. So same way, there are few products. I’ll just give you one example. There are few products where we have real technological advantage and we have a raw material over there.
So we don’t want to, you know, shift it to India. There are some products which we are still importing and we are doing the accreditation in Indian plants. We are doing the trials in Indian plants. And gradually we will shift those products to Our Indian plant to take this capacity level from 64% to 75% and beyond. So it is a time consuming process. We are doing that gradually. We understand the market dynamics. If we are local for local, we have advantage with the same product because we will be doing the transfer, pricing or sorry, technology transfer to Indian plants.
So these are two buckets. One we will not touch. The other we gradually will shift to India. Okay.
Sahil Sangvi
Right, Right. And the second question is that in FY25 the total revenue contribution from total refractory management was roughly 41% as I can see in the annual report. Any sense you can give what that number could be this year? I mean maybe ending this year or currently where we are on that number.
Parmod Sagar
Ending this year probably will remain same. Next year we should have advantage of 4 to 5% upside and all those things. Right?
Sahil Sangvi
Sure.
Parmod Sagar
So it will up 4%. Okay,
Sahil Sangvi
sure. Thank you. Thank you so much. That’s all from my side. All the best.
Parmod Sagar
Thank you.
Parmod Sagar
Thank you.
operator
Thank you. The next question is from the line of Swaraj Mehta from Perpetual Capital Advisors. Please go ahead.
Swaraj Mehta
Hello. Thank you for the opportunity and the congratulations on the good set of numbers. I wanted to understand from the introduction furnace point of view. Could you provide a breakdown of the revenue contribution from induction furnace and ramming mass within your portfolio? And how do you see the market of ramming mass developing? Like how is it going from organized to organized, unorganized to organize. And what matters for induction furnaces? Like is it the cost, proximity or price for ramming masks? Thank you.
Parmod Sagar
You know, when you talk about ramming, it is a very generic terming mask. You know, there are silica running masks which people are using. We don’t make silica reming mask. So one product which you are talking about is not under our radar. There are some other revving masses like a neutral landing mass that we want to pursue. We did some trials. We will definitely be more aggressive in that market. If you talk about induction furnace, I don’t know why you are so much interested only in the. But I don’t have any hesitation to say it is about 500 crore business or so.
Swaraj Mehta
Okay, thank you.
Parmod Sagar
Right, sir.
operator
Thank you. The next question is from the line of Praveen Jayaram from Avendus Park. Please go ahead.
Praveen Jayaram
Thank you for the opportunity. Sir, am I audible?
Azim Syed
Yes.
Praveen Jayaram
My question is also in the dynamic localization. So we understood that we won’t be. Doing a specific number out here. But directionally, how have we been in this localization trend? When we compare to Our last years. When we were giving out the trading. Numbers.
Azim Syed
Sorry, your voice was not. We could hear you but your voice was not clear. So we couldn’t understand your question.
Praveen Jayaram
Is it better now?
Azim Syed
Yeah, please give it a shot.
Praveen Jayaram
Yeah. So I understood that we won’t be. Giving our trading numbers which we were giving during like last year. Congol so directly how have we been in this localization journey when we compared to last year, even if it is not a specific number?
Azim Syed
Absolutely. We have introduced quite a bit of new products, especially on the iron making side. Wherever we wanted to make a, which kind of aligns with our strategic initiative, we were able to make quite a bit of a significant progress. Hence, in the last three quarters of our investors deck we are making it absolutely clear what are the kind of products that we are doing our focus current. So this will increase rather than stable. This will increase. As I said, it has multiple factors. One is our ability to get the raw material. Second is our ability to localize these recipes for our Indian customer needs.
Third is trial stage and fourth is acceptability. So if you think about in this fourth process, we have introduced quite a bit of new products on the iron making side, we continue to do so. We have done something on the cement side, we will continue to do so. And now we are also importing quite a bit of advanced, technical, specialized refactories for the upcoming quarters as well.
Praveen Jayaram
Thanks sir. So my second question is again a follow up one earlier participant. So we were discussing about our margin levers where we discussed about price increase, internal efficiency or volume growth in that. While we were discussing about price increase with the compression scenario right now price increase will not be something which we can go aggressive on. But the realization which we are at right now is that sustainable. Like I heard the number to be 78,000 to 80,000 the range is the train sustainable with the commission intensity right now?
Parmod Sagar
As of now, yes, we think it is a sustainable number and the shutdown. But you know, market is so volatile I cannot predict after six months or so what will happen. But as of now, yes, it is. Sustainable
Azim Syed
at least for three months. Let’s put it like that.
Praveen Jayaram
In the total refractory management contracts which we enter, we would be agreeing to.
Praveen Jayaram
Rate upfront for a certain period.
Parmod Sagar
Yes, yes, we have to fix it for certain period. And then there’s price rate negotiation or price negotiation periodically, in some cases six months, in some cases one year.
Praveen Jayaram
Right. And this contributes to 40 to 43%.
Praveen Jayaram
Of our business
Parmod Sagar
as of now? Yes, 40, 41%. I think.
Azim Syed
It’S actually 33% pages for the previous quarter. I think 45% is not the right number. I think one of the analysts mentioned that for FY24 it was 31.3%. In the current quarter, it is 33.1%. Yeah.
Praveen Jayaram
Right, sir. So this includes both 4 Pro and TRM.
Azim Syed
See, we stopped doing TRM because as we mentioned, as Pramodji mentioned earlier, that we wanted to include two piece here. One is the planet piece, which is the sustainability part in terms of how we can effectively get the recycled material from our customers. Second is also the usage of robotics and robotics using artificial intelligence to ensure a safe and a highly productive operations for our customer. So that’s why it’s slightly different than the previous CRM. But TRM is a subset of 4. 4, let’s put it.
Parmod Sagar
So basically your question and whatever you ask is right. It is a combination of TRM and Pro in some cases still trm. We did not succeed to get material back or putting a robotic or artificial intelligence. It is very, very conventional TRM in most of the cases. In some cases it is 4pro. But now we start using terminology of for pro just to emphasize on our customer, on our team itself, this is the way forward.
Praveen Jayaram
Right? So that’s it from my side. All the best for you, sir.
Parmod Sagar
Thank you.
operator
Thank you. The next question is from the line of Neha Jain, an individual investor. Please go ahead. You can go ahead. Neha.
Unidentified Participant
Hello. Hello.
Azim Syed
Yes.
Unidentified Participant
Yeah, good afternoon, sir. I just wanted to understand for these new products that you know are in pipeline, how can we expect their contribution in the coming year for 27, like what percentage can be expected in the next one to two years?
Azim Syed
If you think about it, if you refer to page number 18 in our investor tag, you can see that Magnesia spinel breaks for our cement customers.
Azim Syed
So we are already selling these products.
Azim Syed
To our customer today. Now what will happen is that we will localize this production rather than getting it as an imported product. So you will kind of get a working capital benefit here. And you know, you have the brick for RST gases. This also we are kind of, you know, will be localizing the production because again, you pay lesser production cost maybe comparing to the place where we are importing this from today. Plus on top of it, we save on the transit time and so on and so forth. So there are various advantages. So some will be additional revenues, some will be you get a working capital benefit.
So this is the way we kind of see this improvement per se. Again, it depends on the product Portfolio and other things. But yes, definitely it will overall improve our margin by very, very, very lesser percentage. But on the overall, on your net cash performance you will see quite a huge benefit, neha, if that helps.
Unidentified Participant
And coming to the working capital part, do we have a lot of stretch due to the PSU receivables?
Azim Syed
Do we have what? Can you please repeat the question again?
Azim Syed
It was not clear
Unidentified Participant
on the working capital front.
Azim Syed
Yes, we do have healthy receivables from the PSU front. We don’t see any big challenges today as probably we had once, you know, last year, one year back it’s improved quite significantly. Again that was only with Ranl and I think they’re due to the cash infusion on the RNL side. It’s kind of have improved. It is getting better and better still. We have some collectibles but overall we are in a very healthy position with our psu.
Unidentified Participant
Thank you so much and good luck.
Azim Syed
Thank you.
operator
Thank you. We’ll take the last question from the line of Rajesh Majumdar from BNK Securities. Please go ahead.
Rajesh Majumdar
So one question on the sector IFGL refractory. We’ve seen a lot of CEO exits and what is happening in that company? Is the company up for sale or what is happening there? Are they competing also actively in the market or what do you see happening there?
Parmod Sagar
Look, we love IfG. I don’t want to give any comments on that but I am really surprised to see their results. I don’t know what went wrong. Only thing is that you know they are trying to be everywhere. I don’t know their core strength was flow control etc but now they are trying to be everywhere. Their employee cost has gone up exceptionally. I don’t know. Rajesh, you are sitting in the Calcutta. I thought you will give us something back.
Rajesh Majumdar
Yeah, I think that you know, industry structure can change quite a bit ifgl you know, scale down or whatever is what I was thinking.
Azim Syed
With jokes aside, I think you need to ask them, not us because we. You can ask us about 4 Pro about our margins. We will be able to extend this better.
Parmod Sagar
I start with. That’s why I start with. We love ISDR and the management.
Azim Syed
Great. That’s the comment. We have no issues.
Rajesh Majumdar
Congratulations once again on your numbers.
Azim Syed
Thank you so much.
operator
Thank you ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Mr. Pramod Sagar for closing comments.
Parmod Sagar
Thank you very much. Dear investors, shareholders, analysts for your continuous support. Keep guiding us, keep asking us. Sometimes you know, not so comfortable questions so that we are more agile, we are more prepared and keep on pushing us. We love to be under a bit of pressure to deliver good results. So I can assure you at RHA Magnifica India Limited we are trying our best to further improve the results, further improve the performance and the investors should get their due benefits from by investing in this company, which is having a very strong fundamental and in coming days it will further improve.
So thank you very much for this call and your trust on us. Have a good day.
operator
On behalf of RHI Magnesita India limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.