Mishra Dhatu Nigam Ltd – Fostering Self-Reliance
Incorporated in 1973 under the administrative control of Ministry of Defence, Mishra Dhatu Nigam Ltd. (MIDHANI) is an established player in the manufacture of special steels, superalloys, and titanium alloys. Headquartered in Hyderabad, the company was setup with an aim to achieve self-reliance in the supply of various alloys to defence and other strategic sectors such as energy, space and aeronautical applications. The company is the only manufacturer of Titanium alloys in India. Recognised as a National Centre for Excellence in advanced metallurgical production, the company has 2 manufacturing facilities located at Hyderabad and Rohtak.
Products and Services
The products offered by the company can be classified as under:
- Superalloys – Nickel, cobalt and iron-based alloys.
- Titanium and titanium alloys – Commercially pure grades, alpha and alpha-beta titanium alloys.
- Special steel – Martensitic steels, high strength special steel, austennitic steels and percipitation hardening steels.
- Other metals and alloys – Soft magnetic alloys and controlled expansion alloys.
- Specialty products – Wires and bars, rolled sheets, open-die forgings, investment castings, armour products, biomedical implants, fasteners etc.
Subsidiaries: As of FY24, the company has 1 joint venture, and no other subsidiary/associate company.
Investment Rationale
- Strategic position – The company plays a critical role in advancing self-reliance in defence manufacturing by producing specialized materials that are typically imported, supporting key programs involving missiles, submarines, naval platforms, combat aircraft, helicopters, and armoured vehicles. The company also supplies high-performance alloys to ISRO, supporting critical components of space missions, including launch vehicles, satellites, and cryogenic engine systems. MIDHANI serves as a key pillar of the ‘Make in India’ initiative in high-technology metallurgy, backed by strong collaborations with DRDO, HAL, ISRO, BHEL, etc. The company also possesses robust capabilities to develop and scale advanced materials for aerospace and energy applications.
- Growth strategies – MIDHANI is strategically focused on import substitution and capacity expansion through indigenous innovation, having developed three master alloys that were previously imported and actively advancing technologies to recycle high-value scrap materials in collaboration with government agencies and national labs. Efforts are underway to indigenous additional master alloys that are required to make advanced Titanium alloys for aerospace grade. The company recently commissioned new Titanium plant which is now at full-fledged operations at a capacity of 250-300 tons per month. It is also working on developing advanced materials for hypersonic applications and next-generation jet engines. Furthermore, the company has begun fulfilling export orders from major global players such as Boeing, Pratt & Whitney, Airbus, and GE. In addition, it is working on the development of specialized alloys for high-megawatt thermal power plants for the government.
- Q4FY25 – During the quarter, the company’s revenue was flat at Rs.411 crore. The production value increased by 17% during the period to Rs.329 crore. EBITDA improved by 16% from Rs.80 crore of Q4FY24 to Rs.93 crore of the current quarter. The company reported net profit of Rs.56 crore, a growth of 22% compared to the Rs.46 crore of the corresponding period in the previous year.
- FY25 – During FY25, the revenue was flat at Rs.1,074 crore. EBITDA was at Rs.218 crore, up by 12% YoY. The company reported net profit of Rs.111 crore, an increase of 21% YoY. Notably, company’s exports have increased threefold during the year. During the period the company has undertaken a capital expenditure of Rs.50 crore for strengthening manufacturing infrastructure and commissioning new facilities.
- Financial Performance – Average 3-year ROE & ROCE is around 9% and 12% for FY23-25 period. The company has a robust capital structure with a debt-to-equity ratio of 0.25.
Industry
India’s defence and aerospace industry is witnessing rapid growth, driven by government focus on self-reliance, rising exports, and increased R&D investments under the ‘Aatmanirbhar Bharat’ initiative. With a target of achieving US$ 6.02 billion in annual defence exports by 2028 – 29, the sector is a strategic priority. Successes like Chandrayaan-3 and the expansion of indigenous satellite systems (IRNSS, GSAT) highlight technological progress, while the integration of space and defence capabilities is supporting growth across sectors such as infrastructure, agriculture, and telemedicine – creating long-term opportunities for advanced materials and alloy manufacturers.
Growth Drivers
- In 2025-26 the central government has allocated Rs.6,81,210 crore for the Ministry of Defence which is 6% higher than the previous year.
- Provision for 100% Foreign Direct Investment (FDI) through Government route and 74% through Automatic route into the defence sector.
- India Space Sector’s aim to target exports worth $11 Bn by 2033.
Peer Analysis
Competitors: DCX Systems Ltd, Sunflag Iron & Steel Company Ltd, etc.
Compared to its peers, the company stands out as the largest alloy supplier to the defence sector. Its profitability metrics are satisfactory, reflecting a stable financial position and solid operational performance.
Outlook
As of 1 April 2025, MIDHANI holds a robust order book of Rs.1,832 crore, ensuring strong revenue visibility for the coming years. The company is targeting an annual growth rate of 20%, supported by its focus on self-reliance in raw materials through indigenous development and recycling of high-value scrap. It aims to sustain healthy EBITDA margins in the range of 20 – 25%. To support future growth and technological advancement, MIDHANI plans to invest Rs.75 – 100 crore annually in capital expenditure. It anticipates increased demand from key strategic sectors including aerospace, naval, missile, space, and power. With over 500 alloy grades indigenized, the company is also broadening its product portfolio to serve emerging sectors such as healthcare, oil & gas, and energy – enhancing its long-term growth prospects while reducing dependency on traditional defence-led revenue streams.
Valuation
We believe the company is well-positioned with a strong order pipeline, growing export presence, and ongoing development of next-generation alloys. We recommend a BUY rating in the stock with the target price (TP) of Rs.507, 51x FY27E EPS.
SWOT Analysis
Recap of our previous recommendations (As on 04 July 2025)
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