Mishra Dhatu Nigam LTD (MIDHANI) – Investometry

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MIDHANI primarily operates in Defence, Space, Energy and Commercial sectors, MIDHANI predominantly caters to strategic customers. With increased competition and dynamic environment, venturing into new businesses and opting for collaborative approach becomes all the more important for staying competitive in the market. At present, the Company intends to start two new manufacturing units based in Rohtak, Haryana and Nellore, Andhra Pradesh.

They are improving their focus on advanced technology products and pursue new collaborations that allows them to add to the product portfolio.

MIDHANI is planning to setup metal powder production unit capable of producing high quality for a variety of special alloys: Ti & Ti-alloys, Ni-alloys, Co alloys and refractory metal and alloys for application in aerospace and biomedical sectors. About 50% of orders come from Defense sector and Space sector has shown cyclical nature in terms of order position. In FY 18-19, Space was the best performing sector and grew by ~ 46 % primarily due to increased number of launches.

Products of Midhani.


  1. HIGH VALUE SPECIALTY STEEL : Specialty Steel market in India is currently estimated at ~3.8 to 4.5 Lakh Tons, primarily driven by Auto sector which is currently affected by the slowdown. Projects worth INR ~15,000 Billion are planned in Defense which will drive the demand for Specialty steel in the country. Addressable market for MIDHANI is ~0.4 to 0.5 Lakh tons, coming from Defense, Power and Niche Engineering sectors. In MIDHANI’s addressable market, Defense sector is expected to drive the demand for Specialty Steel. Defense sector in India is expected to grow at a CAGR of 8% between FY17 to FY25.
  2. TITANIUM ALLOY PRODUCTS : Most of the needs of Indian Aerospace and Defence industry are currently met through imports. Unlike the global market which is dominated by commercial aerospace, Indian Aerospace & Defense Titanium demand is dominated by the Defence. The Titanium market size in India for FY18 is 3098 TPA and is expected to increase to 5231 TPA in the FY 25 with a CAGR of ~ 7.8%. MIDHANI can aggressively target import substitution to increase its market share.
  3. SUPER ALLOY : India market for super alloys has increased at 14% CAGR for the last 2 years. MIDHANI is the only domestic manufacturer of super alloys and rest of the demand is mostly imported. Current MIDHANI market share is only ~1% and rest of the volumes is imports. Future Demand Drivers for Super Alloys in India are among applications where aerospace segment is expected to dominate the market due to increasing need for lightweight and high strength materials that can withstand high temperatures. Strategic Power Project and Power Plants will drive the demand for super alloys in India.
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Manufacturing facilities :

Aluminium Alloy Plant: MIDHANI & NALCO intend to set up High end Aluminium Alloy Production plant through a JV Company at Nellore. To establish green field project of Aluminium Alloy production the state government of Andhra Pradesh has allotted 110 Acres of Land to MIDHANI. Activities like Land survey, soil testing, ground water survey and construction of compound wall are complete. MECON has prepared DPR for setting up the project. NITI AYOG examined the project proposal and has recommended for setting up of Aluminium Alloy plant and subsequent action for incorporating JV.

Tungsten and Tungsten Carbide powder Production Facilities : Tungsten powder is the main ingredient material for production of High Kinetic Energy Penetrators and Pre-fragments for Defence applications and presently these requirements are fulfilled through imports. For indigenization of such strategic material, MIDHANI is exploring to setup a facility to produce 500TPA tungsten powder.

Carbon Fiber Prepegs Manufacturing : In pursuance of Make in India initiative, Ministry of Defence identified Procurement / Production of Strategic / Critical materials like Carbon Fiber Prepegs as it is used in strategic programs. MoU is signed with NAL for development of aero quality carbon fibers. In addition, International Joint ventures for production of prepegs is also being examined to meet such demand.

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SWOT Analysis:


(a) Capability to manufacture a wide range of advanced materials.

(b) Strong Research & Development capability to indigenously develop customized products/ alloys for programs of national importance.

(c) Rich experience gained over 45 years of operation and maintenance of high technology equipments, processes and systems.

(d) Unique and complex quality control practice to deliver superior quality of products.


(a) In select products, lack of economies of scale makes products non-competitive at global level.

(b) Dependence on orders from Government Sector

(c) Lack of technology and infrastructure for developing finished components using own materials which leads to reduced value addition.

(d) Limited control over sales realization.


(a) Demand for special alloys and steel is increasing.

(b) Government initiatives like “Make in India”, Indigenization, Make II etc. allowing Indian organizations to

penetrate existing markets within the country and abroad.

(c) Opportunity for long-term tie-ups in the form of Joint ventures and strategic alliances etc.

(d) Diversification opportunities exists in strategic materials.


(a) Competition from private sector in India and abroad

(b) High volatile prices of some of the critical imported raw materials coupled with their restricted availability.

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(c) Risk of obsolescence in technology, processes and products-metals being replaced with composites/materials.

(d) Change in Government Policies.

Click here for the financials (the link will take you to the moneycontrol site where you will find the financials)


If you are a growth Investor then this company is not for you. The Investor who is looking for a company with stable and safe returns can go for buying this stock. Investors should not expect any extra ordinary return from this company. The valuation is a bit high right now as expected and later on the valuation will be more higher because such companies you will rarely get at cheap valuation. If you are looking forward to buy some shares then this is the time to buy as the market is down.

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Meet Mehta

21 | Small & Mid Cap Investor | CFA L1 candidate | Blogger | Reader | Engineer | Life-Long Learner
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