RHI Magnesita India ltd earlier is in the business of manufacturing and marketing special refractory products, systems and services to the steel industry in India and Globally.

RHIM India, a company formed by merging three Indian subsidiaries of the Austria-based RHI Magnesita Group, namely RHI Clasil, RHI India, and Orient Refractories, recently completed the acquisition of Dalmia-OCL and Hi-Tech Chemicals. The company spent Rs 1,708 crore and Rs 621 crore on these acquisitions during the December quarter. With these strategic moves, RHIM India aims to enhance its global customer service capabilities and establish India as a hub for serving other regions. The task at hand now is to integrate the three companies, foster a unified team culture, and capitalize on synergies across the expanded nine manufacturing plants, compared to the previous three. Despite the challenges, the company is enthusiastic about the opportunities ahead.

By acquiring Dalmia-OCL and Hi-Tech Chemicals, RHIM India has significantly increased its capacity to 500,000 tonnes, and it now commands a 30% share in the domestic refractory market. While the company experienced pressure on its margins and a 23% decline in net profit during Q3FY23, its operational revenues remained strong. According to Sagar MD & CEO of RHI Magnesita India, the decline in consolidated profit after tax (PAT) was primarily attributed to the depreciation of the Indian rupee, resulting in a foreign exchange loss of 11% compared to the previous quarter (Q2FY23). Furthermore, the company intentionally accumulated inventory after the COVID-19 pandemic, which will gradually decrease in the current quarter, positioning RHIM India for a better performance in FY24.

Sahil Sanghvi, an Equity Research Analyst at Monarch Networth Capital, acknowledges that RHIM has a strong business compared to other listed players due to its extensive product portfolio, strategic focus on expanding domestic market share, and utilization of its manufacturing and research and development expertise for new product development. Sanghvi also believes that RHIM India’s presence in both mini mills and large integrated steel plants will continue to grow as the company pursues more contracts.

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