Buy Monolithisch India Ltd For Target Rs.1,060 by Choice Institutional Equities Ltd
Investment View & Target Price: INR 1,060 (29.1% Upside)
We maintain our ‘BUY’ rating on MONOLITH with a revised TP to INR 1,060, reflecting an earnings upgrade of 16.9% in FY27E and 10.0% in FY28E, backed by focus on higher revenue share from SGB- Limited to 65% from 50% in Q1FY27 and increased realisation.
We remain constructive on MONOLITH, owing to a) Resilient structural demand for non-substitutable ramming mass supported by India's rising induction furnace steel production (India's crude steel output targeted to increase from ~168 MnT to ~255 MnT by FY31); b) A strategic Purulia manufacturing base, providing a freight cost advantage of ~INR 800–1,200/t in Eastern India; c) Capacity expansion from ~2.1 lakh to ~5.75 lakh MTPA, supporting ~42% volume CAGR through FY29E and improved operating leverage; d) The Metalurgica unit commissioning in September 2026, providing an incremental growth catalyst and e) Management continues to target FY27 revenue of ~INR 2.5 Bn and guided EBITDA margin of 22–25%.
View and Valuation
We reiterate our ‘BUY’ rating and upgrade our TP to INR 1,060/share, implying an upside potential of 29.1% from the current market price of INR 821. Our revised target price is based on 22x FY28E consolidated EV/EBITDA. This reflects strong earnings visibility, a net cash balance sheet, and solid growth prospects, while accounting for execution risks from expansion and SME-listing status
Q1FY27 Performance Summary
* Record Revenue: INR 472 Mn (+63.9% YoY / +16.1% QoQ) highest-ever quarterly sales
* Steady Margin: Highest-ever EBITDA at INR 131 Mn (+99.1% YoY / +14.9% QoQ); margin almost steady at 27.8% on higher premiumisation
* Strong Earnings: PAT surged to INR 101 Mn (+134.8% YoY / +24.1% QoQ); highest-ever quarterly PAT. Accordingly, EPS stood at INR 4.63 (vs INR 1.97 in Q1FY26)
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