RHI Magnesita has converted its joint venture entity, RHIM Khemka MINPRO Private Limited, into a subsidiary following a preferential allotment of equity shares to its partner, Khemka Refractories Private Limited. The transaction, approved by the Board of Directors of the joint venture company on August 3, 2026, shifts the ownership structure such that RHI Magnesita now holds a controlling 51% stake, while Khemka retains 49%. This development formalizes the strategic consolidation of the venture, which was initially established through a Joint Venture Agreement announced in June and July 2026.

The Board of RHIM Khemka MINPRO Private Limited approved the allotment of 9,607 equity shares with a face value of Re.1 each. These shares were issued at an issue price of Rs.1,990 per equity share, including a premium of Rs.1,989 per share. The total consideration for this allotment amounts to Rs.1,91,17,930. Notably, this transaction was executed for consideration other than cash.

Transaction Details

The financial structure of the preferential allotment is outlined below:

Khemka Refractories provided the consideration through the transfer of specified parcels of land. These land parcels admeasure approximately 12.87 acres and are situated at Mouza Santarapur, Tahasil Kamakhyanagar, District Dhenkanal, Odisha. In addition to the share allotment, the Board also approved the appointment of Khemka’s nominee directors to the Board of the joint venture company.

Regulatory Disclosure

RHI Magnesita India Limited made this disclosure pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. The intimation was submitted to both BSE Limited and the National Stock Exchange of India Limited. The company had previously issued intimations regarding the Joint Venture Agreement on June 25, 2026, and July 16, 2026. With effect from August 3, 2026, RHIM Khemka MINPRO Private Limited is classified as a Joint Venture/Subsidiary Company of RHI Magnesita India Limited.

Rhi Magnesita delivered a significant earnings improvement in the first half of 2026, with adjusted EBITA rising by 42% on a constant currency basis. This growth was primarily driven by the successful execution of management-led self-help measures and robust performance within the Steel segment, offsetting broader market weakness and foreign exchange headwinds.

Adjusted EBITA increased by €24 million, or 17%, to €165 million compared with €141 million in the same period last year. This reported figure included a material foreign exchange headwind of €24 million. Excluding currency effects, the underlying operational performance showed a much steeper trajectory, highlighting the effectiveness of cost-saving initiatives and pricing adaptations across the group.

Segment Performance and Operational Drivers

The Steel segment emerged as a key growth driver, benefiting from demand expansion in North America, Europe, and India. These gains were supported by ongoing self-help programmes focused on pricing adjustments, administrative cost reductions, and plant network optimisation. Conversely, the Industrial segment underperformed expectations due to customer caution and delays in higher-margin projects within Glass and Industrial Applications. However, the Cement and Non-Ferrous Metals divisions posted slight year-on-year improvements.

Working capital intensity temporarily rose to 24% as the company built up raw material inventories ahead of anticipated stronger order books in the second half and to mitigate tariff uncertainty. Despite this increase, cash conversion remained strong at 97%. Net debt climbed to €1,528 million, though leverage remained stable at 2.9x Net Debt to Adjusted EBITDA.

Full-Year Guidance and Outlook

RHI Magnesita has reaffirmed its full-year adjusted EBITA guidance of €400 million, which factors in an expected foreign exchange headwind of approximately €35 million. The company remains on track to deliver €45 million in adjusted EBITA improvements from price adaptations, network optimisation, and administrative savings. Additional benefits from raw material and plant network initiatives are projected for 2027.

Capital expenditure guidance was reduced from €130 million to €115 million. Management expects working capital intensity to decrease to 22% by year-end as temporary inventory builds unwind. Net debt is projected to fall to approximately €1,400 million by the end of 2026, with leverage reducing towards 2.6x Net Debt to Adjusted EBITDA.

What the Numbers Show

The divergence between reported EBITA growth (17%) and constant currency growth (42%) underscores the significant impact of foreign exchange volatility on RHI Magnesita’s financial reporting. While the headline numbers reflect currency headwinds, the underlying operational leverage is improving substantially through disciplined cost management and pricing power, particularly in the resilient Steel segment. This suggests that core profitability is strengthening even as macroeconomic factors create external pressures.