IFGL Refractories Reports 23% Revenue Growth in Q3 FY26 Despite Margin Pressures
IFGL Refractories reported strong revenue growth in Q3 FY26 with consolidated revenue up 23% to INR 470 crores and standalone revenue growing 16% to INR 272 crores. However, EBITDA margins compressed to 5.3% consolidated and 6.5% standalone due to higher employee costs and product mix changes. The company's domestic focus strategy delivered 25% nine-month growth to INR 648 crores, while international operations showed mixed results with US up 37% and Europe up 39% but remaining loss-making. Management announced a leadership transition with James Leacock McIntosh stepping down as MD effective March 1, 2026, to be succeeded by Mihir Prakash Bajoria.
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IFGL Refractories Limited delivered a mixed performance in Q3 FY26, reporting strong revenue growth across key markets while facing margin pressures from operational challenges. The company's earnings conference call on February 17, 2026, revealed both encouraging business momentum and near-term profitability headwinds.
Financial Performance Overview
The company demonstrated robust top-line growth during the quarter, with consolidated revenue expanding significantly across domestic and international markets.
| Metric | Q3 FY26 | Growth (YoY) |
|---|---|---|
| Consolidated Revenue | INR 470 crores | +23% |
| Standalone Revenue | INR 272 crores | +16% |
| Consolidated EBITDA | INR 25 crores | +27% |
| Standalone EBITDA | INR 17.8 crores | - |
| Consolidated EBITDA Margin | 5.3% | - |
| Standalone EBITDA Margin | 6.5% | - |
For the nine-month period, total income reached INR 839 crores on standalone basis, reflecting 13% year-on-year growth, while consolidated income stood at INR 1,418.2 crores with 16% growth.
Domestic Market Strength
The company's India-focused strategy continued to deliver strong results, with domestic operations serving as the primary growth driver. Domestic revenues grew 17% year-on-year in Q3 FY26 and achieved impressive 25% growth for the nine-month period, reaching INR 648 crores.
The domestic segment's contribution to standalone revenue increased to 78% in nine months from 71% in the previous year, reflecting the company's strategic shift toward the Indian market. Export revenues grew 13% year-on-year to INR 62 crores in the quarter, though they declined 12% for the nine-month period due to the strategic focus on domestic opportunities.
International Operations Show Mixed Results
International subsidiaries delivered varied performance across regions. US operations demonstrated strong momentum with revenue growing 37% year-on-year, supported by tariff-related developments, price adjustments with key customers, and improved demand conditions. Management expressed confidence in maintaining this momentum into Q4.
European operations recorded 39% revenue growth year-on-year, though profitability remained under pressure due to higher operating costs and challenging regional demand conditions. The company has implemented structural changes within the European team and repositioned focus from application equipment toward core refractory products.
Margin Pressures and Cost Management
Profitability faced headwinds during the quarter from multiple factors. EBITDA margins compressed due to higher employee costs, changes in product and sales mix, and increased investments in business development and marketing activities. The quarter included an exceptional expense of approximately INR 4.8 crores related to implementation of new labor code.
| Financial Metric | Q3 FY26 | 9M FY26 |
|---|---|---|
| Standalone Gross Margin | 44.4% | 45.4% |
| Standalone EBITDA Margin | 7.0% | 11.0% |
| Consolidated EBITDA Margin | 5.3% | 7.3% |
Management has initiated targeted cost rationalization measures and expects gradual improvement in margins over coming quarters. The company maintains guidance for double-digit EBITDA margins on standalone basis, with a minimum target of 12%.
Technology and Product Development
The company made meaningful progress on product innovation and technology fronts. In-house tube changer refractories, previously dominated by global suppliers, are now delivering measurable productivity gains for customers by enabling longer casting sequences and increasing Tundish capacities from 30 to 70 metric tons.
The company's snorkels continue to outperform industry benchmarks, delivering 85 to 119 heats at leading Indian steel plants against typical industry life of 65 to 80 heats. Technology transfer from Sheffield Refractories is expected to be completed by March 2026, with localized products to undergo trials at leading cement plants for shotcreting applications.
Leadership Transition and Future Outlook
The company announced a significant leadership change with Managing Director James Leacock McIntosh stepping down effective March 1, 2026. The Board has appointed Mihir Prakash Bajoria as Managing Director for a three-year term commencing March 1, 2026. McIntosh will continue in a consulting capacity for three years to ensure smooth transition.
Looking ahead, the company remains focused on disciplined execution, improving cost structure, and strengthening regional operations. With steady demand in India, improving traction in the USA, and structural initiatives underway in Europe, management is working toward gradual margin recovery and sustainable growth while maintaining commitment to long-term value creation.
Historical Stock Returns for IFGL Refractories
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.50% | -5.92% | -7.20% | -35.30% | -2.56% | +30.52% |
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