Mishra Dhatu Nigam builds aerospace growth through titanium, superalloys and import substitution

Investment View and Valuation

ICICI Direct Research’s August 17, 2026 result update retains a Buy view on Mishra Dhatu Nigam Limited (MIDHANI), supported by robust order prospects, higher-value product development and increasing indigenisation in aerospace materials.

The broker’s target price is Rs 500, compared with the current market price of Rs 430. The target is based on applying a 40 times price-to-earnings multiple to FY28E earnings.

MIDHANI manufactures special steels, nickel-, iron- and cobalt-based superalloys, and titanium alloys for aerospace, defence, space and energy applications. It operates manufacturing facilities in Hyderabad, Telangana, and Rohtak, Haryana.

Q1 FY27 Financial Performance

Operating income growth was driven by improved execution. However, profitability was affected by elevated raw-material costs. Higher nickel, molybdenum and tungsten prices resulted in an estimated 13% adverse raw-material price variance, while LPG prices nearly doubled and affected LPG-fired furnaces.

Order Book and Near-Term Outlook

The order book stood at approximately Rs 2,329 crore at the end of June 2026. Defence accounted for the largest share, followed by space, energy and other sectors.

Management expects some margin pressure in Q2 FY27, followed by normalisation from Q3 FY27 as LPG and raw-material inflation eases. It expects FY27 revenue growth to exceed FY26 growth, although it does not consider the 40.5% Q1 FY27 revenue growth rate sustainable for the full year.

Higher-Value Products and Aerospace Opportunities

ICICI Direct highlights a favourable shift towards higher-value titanium and superalloy products, which carry better margins than lower-value products. MIDHANI’s new melting facility enabled approximately 700 tonnes of titanium melting in FY26, and the company had around Rs 600 crore of titanium orders.

• MIDHANI secured FY27 orders for four superalloy grades and three titanium grades.
• The company completed isothermal forging of a nickel-based superalloy for a fighter-aircraft engine using its 6,000-tonne press.
• MIDHANI obtained its first commercial order for rolling 7,000-series aluminium alloy.

Management stated that GE’s S400 certification permits MIDHANI to provide mechanical, chemical and metallography testing to domestic and overseas customers, creating an incremental revenue opportunity. The company is pursuing NAS 410 qualification and expects to obtain NADCAP non-destructive testing certification by the end of FY27.

AMCA development orders for specialised titanium grades are under execution. Production orders are expected as the programme advances and the materials receive qualification. Management estimates that approximately Rs 8,000 crore of superalloy and steel materials are imported, with most grades already within MIDHANI’s capability. Certifications remain the key requirement for converting this import-substitution opportunity into domestic business.

Exports, Capex and Other Growth Opportunities

Additional opportunities include nuclear materials, exports and approvals from global aerospace original equipment manufacturers. Exports currently account for around 10% of turnover, with Rs 33 crore of sales and approximately Rs 25 crore of open orders so far. Management targets annual export growth of 10–15% over the next three to four years.

The proposed Rs 1,000 crore capex over two to three years is intended mainly to replace ageing equipment and improve yield, productivity and competitiveness. Full benefits are expected after four to five years.

A proposed metal bank should improve raw-material availability and reduce cost volatility. However, because the inventory will be customer-owned and stored at MIDHANI, it will not directly release working capital.

Financial Estimates

Key Risks

• Dependence on government contracts.
• High working-capital requirements.
• Availability of key raw materials.