Midwest Ltd Q2FY26 FY26 – Granite Mines, Shiny Valuations, and the Great Black Galaxy Audit
1. At a Glance
Welcome to the world where rocks make more money than most startups. Midwest Ltd, the Hyderabad-based granite exporter, has decided to mine some fresh capital out of Dalal Street. The ₹451 crore IPO (₹250 crore fresh, ₹201 crore OFS) was oversubscribed 92.36 times, proving that Indians really love shiny things—be it gold, IPOs, or Galaxy Granite.
The issue price band was ₹1,014–₹1,065, and the final price chiselled in at ₹1,065 per share. Market cap post-listing: ₹3,851 crore. PAT for FY25: ₹133 crore. EPS post-issue (annualised): ₹26.97. That gives us a P/E of roughly 39.5×—basically, investors are valuing black rocks at the same multiple as tech stocks.
Three-month IPO return? We’ll see post-listing—but judging by the frenzy, people probably think granite exports are the new AI.
2. Introduction – The Shiny Stone Saga
Some companies drill for oil, others for data. Midwest drills for something even more solid—literal rocks. Founded in 1981, this company has been quietly exporting India’s pride: Black Galaxy and Absolute Black granite.
In a world obsessed with digital assets, Midwest’s “mining” doesn’t need GPUs—it uses excavators. While everyone else was launching SaaS platforms, these folks were polishing slabs for Italians, Chinese, and Swedes. And guess what? Those foreigners love our stones almost as much as they love yoga retreats in Rishikesh.
So now, Midwest comes to the markets with an IPO that’s part fresh issue, part old-timer OFS. The promoters (95.8 % pre-issue) will dilute a bit to 84.4 %, because even they know diversification is healthy—especially when your asset is buried underground.
The company operates 16 mines across Telangana and Andhra Pradesh, with plans to go deeper (literally). It even wants to install solar panels on mines—because if you’re digging holes, might as well go green while you pollute.
3. Business Model – WTF Do They Even Do?
Alright, let’s unearth the business. Midwest does four main things:
Mining: They extract granite blocks—primarily the premium Black Galaxy type. Basically, these are sparkly black rocks used in luxury flooring, countertops, and politicians’ kitchens.
Processing: Two big processing facilities—one in Telangana, one in Andhra Pradesh—where the granite gets cut, polished, and exported looking more photogenic than your passport photo.
Exports: 70 %+ of revenue comes from exports to countries like China, Italy, and Thailand. The irony? We ship raw granite to China, and they ship it back as “Italian marble.”
Future Expansion: Quartz processing plant (Phase II), electric dump trucks, and solar integration. The “eco-friendly miner” tagline writes itself.
So yes, Midwest basically digs stones, shines them, and sells them globally. But it does so profitably—EBITDA margin of 27 % and PAT margin of 17 %. If only government PSUs mined efficiency like this.
4. Financials Overview
Source table
Metric
Latest Qtr (Jun 25)
YoY Qtr (Jun 24)
Prev Qtr (Mar 25)
YoY %
QoQ %
Revenue (₹ Cr)
146.47
136.92
162.78
7.0 %
−10.0 %
EBITDA (₹ Cr)
38.97
34.55
41.23
12.8 %
−5.5 %
PAT (₹ Cr)
24.38
18.35
28.15
32.9 %
−13.4 %
EPS (₹)
6.74
5.07
7.78
32.9 %
−13.4 %
Commentary: EBITDA is rock-solid (pun intended). PAT up 33 % YoY—because polishing pays. QoQ dip? Seasonal—apparently, granite sales also take vacations during monsoon. Annualised EPS ≈ ₹26.96; at ₹1,065, P/E ≈ 39.5×. That’s higher than most FMCG giants. Who knew the path to riches was paved with tiles?
5. Valuation Discussion – Fair Value Range Only
Let’s chisel out a range using three methods.
a) P/E Method
Post-issue EPS = ₹26.97. Industry average P/E for mining/stone exporters = 25–35×. → Fair value = ₹675 – ₹945.
b) EV/EBITDA Method
EV = Market cap + Debt − Cash ≈ 3851 + 270 − 100 = ₹4021 Cr. EBITDA FY25 = ₹171.8 Cr → EV/EBITDA ≈ 23.4×. Peer average = 14–18×. → Fair value = ₹820 – ₹1,050.
c) DCF (Discounted Cash Flow)
Assume 12 % growth for 5 years, terminal growth 4 %, discount rate 11 %. → Intrinsic range ≈ ₹780 – ₹1,000.
👉 Fair Value Range (educational only): ₹780 – ₹1,000 per share. (This range is for educational purposes only, not investment advice. If you still blame us for loss, we’ll send you granite samples instead.)
6. What’s Cooking – News, Triggers, Drama
Let’s list the current menu of corporate masala:
Quartz Phase II Plant: ₹127 Cr capex via subsidiary Midwest Neostone. So now, they’ll mine shiny white quartz too—probably to hedge the black granite aesthetic.
Electric Dump Trucks: ₹25 Cr budgeted—finally, a dump that’s green. Imagine a Tesla truck hauling rocks in Nalgonda. Elon would be proud.
Solar Integration: ₹3 Cr investment for renewable energy at mines. Because ESG investors need something to tweet about.
Debt Repayment: ₹53 Cr for loan prepayment—makes their balance sheet smoother than polished granite.
Global Demand Revival: Europe reopening construction, China restocking, and the Middle East forever building new palaces—strong export cues.
Basically, everything looks bullish (sorry—“optimistic”), but remember:
