RHI Magnesita India Ltd Q2FY26 – 89% Growth Hangover, 326 Cr Goodwill Headache, and a 61x P/E Reality Check

1. At a Glance

Welcome toRHI Magnesita India Ltd (RHIM)— the company that makes bricks, not for houses, but for furnaces that reach 1,200°C. Basically, they sell heatproof bricks to people who melt iron for a living. Once known as Orient Refractories, RHIM has turned into the country’s refractory royalty with a30% market share, and ambitions to make it 40% by FY30.

The stock, currently simmering at₹467, carries amarket cap of ₹9,641 crore, aP/E of 61.2, and the patience of retail investors who’ve watched it drop-18% in one year. Q2FY26 results?Revenue ₹1,035 crore(up 19.4% YoY), butPAT ₹38 crore(down 16.5% YoY). Ouch.

The company’sROE is just 5.19%,ROCE 7.06%, anddebt-to-equity a lean 0.10, thanks to a ₹1,100 crore fundraise that reduced borrowings from ₹1,589 crore to ₹453 crore. But let’s not ignore the elephant in the kiln —₹987 crore in goodwill impairmentsover two years. That’s not depreciation; that’sdepression.

If the financials were a Bollywood script, FY22–FY24 was therise of the refractory empire, and FY25 onwards might just be therevenge of the margins.

2. Introduction

Once upon a time, there wasOrient Refractories, a solid, sensible manufacturer of fireproof materials. Then cameRHI Magnesita, the global giant, waving Austrian efficiency and European flair. They merged, multiplied, and for a while, everything looked like a blast furnace fairy tale — revenue shooting up 89% in two years, capacity tripling, and everyone chanting “synergy.”

But as every Indian investor knows, synergy is just the corporate word for “wait and see.”

From FY22 to FY24, RHIM’s volumes rose131%(from 214 KT to 495 KT), but realisations dropped18%due to product mix changes. Translation: they sold more stuff, but cheaper stuff.

Then came the goodwill impairments —₹661 crore in FY23and₹326 crore in FY24— because apparently, their acquired subsidiaries didn’t quite live up to the PowerPoint optimism.

Today, RHIM stands tall witheight factories, aCentre of Excellence planned in Jamshedpur, and the ambition to dominate India’s refractory market like Virat Kohli in a Ranji match. But with aP/E north of 60, investors might wonder if they’re paying for bricks or dreams.

3. Business Model – WTF Do They Even Do?

In the simplest terms,RHI Magnesita India makes stuff that helps other industries survive heat. Their refractory products line furnaces, kilns, and reactors — without them, steel plants would literally melt into slag.

Theirmain businesscomes from:

• Steel Division (76% of revenue)– supplying the refractory linings for blast furnaces, ladles, and converters.
• Industrial Division (14%)– serving non-ferrous metals, cement, and glass.
• Refractories Management Services (33%)– think of it as AMC for furnaces.
• Trading (12%)andOthers (3%)– everything else.

They’re not just selling bricks anymore; they’re sellingsolutions. From manufacturing to maintenance, RHIM wants to become the “TCS of thermal materials.”

And they’re serious about it — with an annualcapex plan of ₹80–100 croretill FY27, a newJamshedpur centre, and even venturing intoIron MakingandDirect Reduced Iron.

So yes, they’re hot — literally