Midwest Q1 FY27 Earnings Call — Analysis (NSE: MIDWESTLTD)
Midwest Q1 revenue +35% YoY with quartz plant stabilizing and Indonesia MoU signed for heavy rare earths access
Result quality: watch — Margin pressure. Management sentiment: optimistic.
The take
Q1FY27 Revenue ₹190 Cr ( +35% YoY ) . New guidance — FY27 fy27 consolidated revenue ₹840 Cr . New story: Quartz ramp-up to profit inflection .
Results
Revenue ₹190 Cr +35% YoY; EBITDA +25% YoY; PAT +27% YoY; EBITDA margin down 190 bps YoY due to diesel spike; quartz segment contributed ₹5 Cr in first quarter of operations.
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Revenue | ₹190 Cr | +35% | yoy · Q1FY27 · Q1FY26 |
| EBITDA growth | 25% | +25% | yoy · Q1FY27 |
| PAT growth | 27% | +27% | yoy · Q1FY27 |
| EBITDA margin decline | 190 bps | −190 bps | yoy · Q1FY27 · vs Q1FY26 |
| Quartz revenue | ₹5 Cr | none · Q1FY27 | |
| Granite volume growth | 10% | +10% | yoy · Q1FY27 |
Guidance
FY27 consolidated revenue guidance of ~₹840 Cr (₹720 Cr granite, ₹120 Cr quartz); quartz to reach 15,000 tons/month run rate by Q4FY27 and generate profit by year-end.
What management committed to
- Midwest Limited's consolidated revenue for FY27 is estimated around ₹840 crores (₹720 Cr from granite, ₹120 Cr from quartz), a conservative estimate that the company expects to beat if conditions hold. — ₹840 crores, FY27
- Granite business EBITDA margin in FY27 will remain in the same range as previous years, barring a 50-100 bps deviation from diesel impacts. — same range as previous years, FY27
- Quartz [Phase 1] sales volume for FY27 will be around 120,000 tons, revised down from the earlier 150,000 tons due to a now-resolved technical glitch. — 120,000 tons, FY27
- Quartz [Phase 1] plant will reach a monthly production run rate of 10,000 tons by end of Q2FY27, 10,000-12,000 tons in Q3FY27, and exceed 15,000 tons per month by Q4FY27. — 15,000 tons per month, Q4FY27
- Quartz operations will achieve EBITDA break-even by Q3FY27 and generate some profit by Q4FY27. — break-even; profit, Q3FY27
- Quartz Phase 1 will generate revenue of around ₹180-200 crores in FY28 once stabilized at 15,000 tons/month. — ₹180-200 crores, FY28
- Quartz Phase 2 expansion total capex is ₹125 crores, of which ₹60-70 crores will be spent in Q2-Q3FY27, with commissioning in 10-12 months. — ₹125 crores total; ₹60-70 crores in Q2-Q3FY27, 10-12 months
- Sri Lanka heavy mineral sands project ground breaking will occur in October 2026, with operations starting in 12-15 months from ground breaking. — October 2026, Q3FY27
- MoU with Indonesia's PERMINAS will be converted into an agreement in Q2FY27, with a joint venture formed in Q3FY27, targeting production from mine to rare earth oxides. — Q2FY27
- Consolidated EBITDA margin in FY28 is expected to be around 29-30% as quartz contribution increases and absorption improves. — 29-30%, FY28
- Granite segment revenue growth in FY28 is expected to be a conservative 10-12% YoY. — 10-12%, FY28
Key themes
Quartz ramp-up and rare earths diversification
How the narrative shifted
- Quartz ramp-up to profit inflection: Management positions the quartz segment as transitioning from commissioning to steady-state operations, with volume-driven break-even and profit by year-end, while Phase 2 expansion proceeds in parallel.
- Granite volume resilience amid fuel spike: Despite a sharp diesel cost increase, granite revenue grew 35% YoY and volume 10%, helped by price hikes, fleet electrification, and volume absorption; management downplays margin risk going forward.
Operational commentary
- Quartz Phase-1 commercial operations stabilized; 5,000 tons sold in Q1; ramp-up plan on track to reach 15,000 tons/month throughput by Q4FY27; plant capacity up to 18,000 tpm.
- MoU signed with Indonesia’s state-owned PERMINAS giving exclusive access to ion-adsorption clays containing heavy rare earths (dysprosium, terbium) critical for defense/aerospace magnets; JV agreement expected in Q2FY27.
- Sri Lanka heavy-mineral-sands project: long-awaited policy ratified and formal communication received to submit final data; license expected in Q2FY27, with ground-breaking targeted October 2026 and a 12-15 month build-out.
- Granite business: 10% volume growth; price hikes of 3-5% implemented; diesel cost spike (₹85 to ₹125-130/litre) partially offset by volume absorption, electrification of fleet and solar integration reducing diesel dependency.
- Quartz Phase-2 capex of ₹125 Cr approved; supplier orders placed; ₹60-70 Cr to be spent in Q2-Q3FY27; commissioning targeted in 10-12 months (H2FY28).
- Electrification of mining fleet and back-integration with solar power advancing; management stated 'war, no war, we will not be affected on granite margins going forward' emphasizing structural cost reduction.
- Kerala KMML JV paused awaiting appointment of new MD under new state government; management expects activity to resume once new team is in place.
- Sierra Leone exploration activities ongoing with minimal expenditure; no material updates this quarter.
Analyst Q&A
Q. Is the FY27 quartz production target of 150,000 tons still achievable given Q1 sales of only 5,000 tons?
We will not be doing 150,000 tons, we will be doing around 120,000 tons. That is the effect of a technical glitch that is now sorted. All our guidance and numbers are based on 120,000 tons.
Q. FY27 revenue guidance of ₹840 Cr seems low considering Q1 run-rate and quartz ramp; can you explain?
We as a company want to promise less and over-deliver; these are conservative estimates. Whatever number we have given, we are very confident, and if things go as planned like Q1, we should definitely beat that.
Q. Any update on the subsidiary's activity in Sierra Leone?
No update this quarter. We have looked at a couple of concessions which had local issues; we are still actively looking. There is minimum or no expenditure right now.
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