View - Increasing production of end-use industries of refractories will positively impact the demand. Refractories demand is estimated to reach approximately 2.1 million tones in FY28. The growth in demand will be backed by India’s vision of becoming a US$5 trillion economy by FY27-28 and a US$7 trillion by 2030. This will boost the infrastructure, building and construction and automotive industries which are the key consumers / end users of refractories. The Company plans to capitalize on its strong global presence, diversified product portfolio, localization of imported products, favorable domestic industry growth and anticipating synergies from inorganic expansion.  Further, with focus on reducing debt, improving margin with diversified product mix, improving profitability with low capex plan, improving return ratio’s from high base, focus on normalizing the working cycle, improving the cash flow and improving its market share from 30% to 40-45% in next 3-4 years period, we believe the Company remains in a sweet spot. We anticipate RHI’s Revenue/EBTDA/OCF to grow at a CAGR of 35/44/18% over FY23-FY25E, we initiate coverage on RHI Magnesita with a “BUY” recommendation with a Target price of Rs 995 (upside of 39%) valuing the Company at 28x historical average on FY25E EBITDA.

View – Given the strong expansion and diversification plans, we expect Mold-Tek to deliver consistent performance over the next few years. Its industry leading capital allocation, lean balance sheet, healthy margin and return ratios with strong operating cash flow and superior dividend pay-outs ratios gives it an edge. We anticipate Mold-Tek’s Revenue/EBITDA/PAT to grow at a CAGR of ~36/42/49% over FY22-FY24E, we initiate coverage on Mold-Tek Packaging with a “BUY” recommendation with a (1 year) Target price of Rs. 1,125 (upside of 29%) valuing the Company at a ~26x (historical average) on FY24E EPS.

APL Apollo is considered as market leader in the structural steel tube industry holding 50% market share. With the consumption of structural steel tubes in India is only about 4% as against global proportion of 10% indicating further scope for an increase in the consumption level. Evolving infra – construction activity, incorporating new Greenfield capacity with incremental capacity of 1.5 million tonnes, focus on margin expansion, reducing working capital and leverage position will strengthen its capital allocation which will result in strong revenue and earnings growth in the coming years. We anticipate, APL’s Revenue/PAT/OCF to grow at a CAGR of 37/47/14% over FY21-24E, we initiate coverage on APL Apollo with a “BUY” recommendation with a Target price of Rs 1188 (upside of 27%) valuing the company at 23x historical average on FY24E EPS.