Buy Monolithisch India Ltd for Target Rs 1,778 by Choice Institutional Equities
Investment View & Target Price: INR 1,778 (38.8% Upside)
We maintain our ‘BUY’ rating on MONOLITH with a TP of INR 1,778. We lift FY28E/FY29E EBITDA by 12.8%/26.3% and PAT by 13.1%/26.8% to include the announced Advanced Silica Complexes at Udaipur (Rajasthan) and Hospet (Karnataka), taking MONOLITH’s capacity to ~8,75,000 MTPA. The upgrade is offset by a lower target multiple (16x vs. 18x FY28E EV/EBITDA); FY27E is unchanged as both plants will be commissioned in FY28.
* On September 29, 2026, MONOLITH announced two Advanced Silica Complexes: Udaipur (1,75,000 MTPA; ~INR 250 Mn; Nov2027) and near Hospet (1,25,000 MTPA; ~INR 200 Mn; Jul-2027) 3,00,000 MTPA for ~INR 450 Mn.
* MONOLITH capacity expands ~52% to 8.75 lakh MTPA. Capital intensity is lean at ~INR 1,500 per tonne, implying an outlay of ~INR 45 crore. With FY27E operating cash flows expected at INR 65.5 crore, the expansion will be entirely self-funded through internal accruals with zero debt additions.
* Logistics-led sitting: Udaipur plant serves Rajasthan, Gujarat and Gadchiroli with Kandla/Mundra access; Hospet is in a steel belt near Mormugao/New Mangalore. Exports are negligible today.
* Estimates: New-plant volumes of 1,15,625 MT (FY28E) and 2,40,000 MT (FY29E) add revenue of INR 1,070 Mn / 2,280 Mn and EBITDA of INR 262 Mn / 570 Mn (~25% EBITDA margin), easing group margins by ~312 / ~488 bps
View and Valuation
We maintain BUY with an unchanged TP of INR 1,778 (38.8% upside). Capacity expansion to 8.75 lakh MTPA lifts FY28E/FY29E EBITDA by 12.8%/26.3%, while we cut the target multiple to 16x EV/EBITDA from 18x amid industry-wide overcapacity concerns. Key watch points include overlapping ramp-ups, aggressive Hospet/Udaipur utilisation assumptions and ~20% FY28E realisation decline from the quartzite mix. Raghav Productivity’s expansion (~8.84 lakh MTPA), execution risks and SME status remain key concerns. This is partly offset by strong earnings visibility and a net-cash balance sheet.
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SEBI Registration no.: INZ 000160131
