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Rerating Quarter

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It’s time to revisit mid-cap stock valuations and there are potential target upgrades over the medium to long term, says VAIBHAV AGARWAL of PhillipCapital India.

Ground checks and interactions with various stakeholders in the cement industry suggest that significant potential upsides exist for mid-cap stocks over the medium to long term. Given a favourable demand scenario, we understand cement prices have been raised across pockets by ~10 per cent and further price hikes of 3-5 per cent cannot be ruled out in May 2017.

After the monsoon arrives, cement prices are unlikely to be increased until the end of H1FY18. Even if prices drop, we expect them to remain 5-6 per cent higher than March prices. The Goods and Services (GST) tax regime is unlikely to make an unfavourable impact on cement prices; if it benefits due to GST, the industry may pass on some of those gains. EBITDA may surge in FY18/19 if robust cement price hikes sustain. Rerating of valuations is imminent for mid-cap stocks and we do not rule out potential target upgrades in the medium to long term.

Positive Volume Commentary
Even assuming flat volumes in Q1, this will be a rerating quarter for the sector. We have seen volume commentary turning positive, but volume concerns persist in a few pockets (Tamil Nadu, Kerala and parts of Central India). Despite assuming flat volume growth for the sector, Q1 earnings are likely to surprise quite positively, driven by price hikes. In a conservative scenario (0 to -5 per cent), year-on-year (y-o-y) volume growth and with the current cement prices, Q1 sectoral EBITDA/tonne is likely to improve by 20-40 per cent quarter-on-quarter (q-o-q), 15-20 per cent y-o-y; absolute EBITDA could shoot up by a minimum of 15-20 per cent. With volumes turning favourable and no rollbacks in cement prices over the next two months, the potential is huge.

Mid-cap cash flows are robust and likely to accelerate debt repayments. Mid-cap stock valuations have always had the overhang of higher debt versus large caps. However, debt repayment for most mid-caps is likely to accelerate in Q1 as the sector sees robust cash generation. This will be a key rerating factor and is likely to drive valuations. We expect good sense will prevail in the sector and players will not rush in with fresh capex announcements.

Players are evolving and this makes prices more stable over the long run. Historically, price hikes have always been a call for concern (break in price discipline). We do not rule out intermittent price disturbances, but we understand that players are evolving.

Stable Pricing
Even newcomers to the industry understand the need for stable prices; they are also debt-ridden and cannot afford to operate in an unfavourable price scenario. This gives us confidence that price hikes are more sustainable than in the past. FY18 should be a turnaround year for stock valuations; we do not rule out the possibility of a partial rollback of the recent price hikes. However, even in a conservative scenario (if only 4-5 per cent price hikes sustain in FY18), EBITDA/tonne has the potential to improve by 10-15 per cent or even higher in certain cases.

Valuation gaps
The largest major of the sector trades at a per tonne valuation of $200, while most mid-caps trade at $70-120. As the scenario turns favourable and as mid-caps get rid of debt faster than expected, this valuation gap could narrow, to say, about 25 per cent discount to large-caps. The potential upsides can be huge.

We do not rule out potential target upgrades in the medium to long term; our current price targets for most mid-caps have built-in target valuations of $70-120/tonne. We see the valuation gap between mid-caps and large caps narrowing as sectoral dynamics turn favourable. We see further re-rating of mid-caps over the medium to long term.

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Economy & Market

Leonard Unveils Dual-Head Robotic Arm for Hazardous Industrial Demolition

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 Leonard unveils Descender Duo, a dual-head robotic demolition arm designed to improve industrial safety and reduce shutdown time by up to 50 per cent.

Industrial robotics and refractory services specialist Leonard has launched Descender Duo, a dual-head robotic demolition arm designed to improve safety, accelerate maintenance and reduce shutdown times in hazardous industrial environments. The system made its debut at Lisahally Power Station in Northern Ireland, removing 25 tonnes of slag material within hours.

Developed for the cement, metals, waste-to-energy and petrochemical industries, Descender Duo enables remote-controlled refractory demolition, anchor cutting and welding, and refractory spraying inside boilers, calciners and silos. Its vertical-access design eliminates the need for personnel to enter confined, high-risk spaces during these operations.

Weighing less than two tonnes, the pre-assembled system requires an access opening of just 1.2 m². Supported by an external overhead hoist, it uses electrically operated hydraulic stabilising legs to secure itself inside vessels. The robotic arm offers 360-degree rotation and is suited to vessels approximately 9 m in diameter, with its operating reach extendable through strategically positioned access points.

Equipped with two independently controlled robotic heads, Descender Duo can perform identical or different tasks simultaneously, including refractory demolition, anchor cutting and spraying. Its remote-control system incorporates live camera feeds, allowing operators to monitor operations without entering hazardous environments.

According to Leonard, the technology can deliver time savings of up to 50 per cent compared with manual methods. Its ability to operate at temperatures exceeding 100°C allows maintenance to begin as early as 24 hours after burner shutdown. An all-electric power supply further supports cleaner and more cost-efficient operations.

First Deployment Demonstrates Shutdown Efficiency

The system was first deployed at Burmeister & Wain Scandinavian Contractor’s (BWSC) Lisahally Power Station in Londonderry, Northern Ireland. The facility generates electricity from grade C waste wood, supplying approximately 40,000 homes and businesses.

Leonard and BWSC collaborated to develop a customised solution for the plant’s 26-metre furnace, where extensive external pipework created significant access challenges.

Mark Leonard, Managing Director, Leonard, said, “It required new thinking and rather than step away from the problem we were committed to solving it for the customer, with the customer. We’re relentless in our approach to tackling complex challenges, head-on. We took our years of cement plant experience, coupled with our working knowledge of the BWSC plant, and designed, engineered and tested a completely new vertical solution within just seven weeks from that initial conversation with the customer. That solution was the Descender Duo as we know it today.”

Traditionally, the furnace required a cooling period of up to 36 hours before preparatory work could begin, followed by manual slag removal using rope-access personnel. With Descender Duo, work commenced just 24 hours after shutdown, reducing downtime by up to one day.

The deployment removed 25 tonnes of slag within hours, eliminated the need for at least six workers to enter the hazardous furnace interior and saved 26 hours in the shutdown programme.

“The effectiveness exceeded expectation,” said Martin Doran, Plant Manager at Lisahally Power Station.

“When the Descender Duo concept was first discussed, we had to spend some time with the team from Leonard looking at how it was going to be moved into the furnace. Every site is different and that presented its own challenges, but nothing that the team couldn’t overcome. Once it was installed we were hugely impressed by its efficiency.”

Expanding Industrial Robotics Applications

Descender Duo joins Leonard’s existing portfolio of robotic maintenance solutions, including the Axis horizontal-access arm, Nano confined-space access arm, Charger cement mill media recharging system and Calibre cement mill media grading system.

Headquartered in Northern Ireland, Leonard provides robotic refractory demolition, installation, inspection and industrial maintenance services across the cement, metals, energy, biomass, glass and civil engineering sectors.

Formerly known as G Leonard, the company has more than 35 years of industry experience and operates across Europe, North America, the Middle East, Africa and Asia-Pacific.

The latest innovation reinforces Leonard’s focus on replacing hazardous manual processes with robotic systems that improve workforce safety, enhance operational efficiency and minimise industrial downtime.

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Concrete

Martin Engineering Appoints Ashwini Khunte as India General Manager

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Martin Engineering names Ashwini Khunte India General Manager to strengthen operations and drive growth across key bulk material handling sectors.

Pune

Martin Engineering, a global provider of bulk material handling solutions, has appointed Ashwini Khunte as General Manager of its India business, strengthening its leadership as the company expands its presence across the country’s cement, mining, steel, power and infrastructure sectors.

Khunte brings more than a decade of experience with Martin Engineering, having joined its Indian operations in 2013 as a Design Engineer, shortly after the company established its presence in the country in 2012.

A mechanical engineer by qualification, she spent her initial five years developing bulk material handling solutions in collaboration with the company’s operations team. During this period, she gained extensive experience addressing operational challenges in the steel, cement and coal industries. She subsequently moved into project engineering, managing major engineering, procurement and construction (EPC) and original equipment manufacturer (OEM) projects from initial enquiry to commissioning. Her responsibilities later expanded to overseeing Martin Engineering’s conveyor product portfolio in India, involving customer engagement, technical presentations and site visits across heavy industries.

In 2024, Khunte was promoted to Head of Sales & Marketing for the company’s Europe, Middle East, Africa and India (EMEAI) region. The position broadened her international market exposure and strengthened her strategic and commercial leadership capabilities.

Commenting on her appointment, Ashwini Khunte, General Manager, Martin Engineering India, said: “India represents a tremendous opportunity for Martin Engineering. The country’s continued investment in cement, mining, steel, power and infrastructure is creating increasing demand for safer, cleaner and more productive bulk material handling, and that’s exactly what we do. My priority will be to build on the strong foundations already established in India, while continuing to develop our people, strengthen customer relationships and bring practical solutions to the challenges faced by our industry.”

Robert Whetstone, Area Vice President – EMEAI, Martin Engineering, highlighted Khunte’s technical expertise, market understanding and leadership experience.

“Ashwini brings an exceptional combination of technical understanding, customer knowledge and commercial leadership. She has grown as Martin Engineering has grown, and has consistently demonstrated outstanding capability to transform her expertise into practical solutions. Her knowledge of the Indian market, together with her international experience, makes her ideally suited to lead our India business through its next stage of growth for years to come.”

Since establishing its Indian business in 2012, Martin Engineering has expanded its local workforce, manufacturing capabilities and dealership network. The company supplies conveyor products, transfer point solutions, material flow aids, training and technical support to bulk material handling industries. Khunte’s appointment positions the company to further strengthen customer relationships and expand its solutions portfolio in India’s growing industrial and infrastructure markets.

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Concrete

Fornnax Wins AIRIA’s Special Export Award for Rubber Machinery in 2025-26

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Fornnax Technology Pvt. Ltd. has been honoured with the Special Export Award – Rubber Machinery for 2025–26 by the All-India Rubber Industries Association (AIRIA), in recognition of its highest exports of tyre recycling plants to the European region.

With more than a decade of experience in India’s tyre recycling industry, Fornnax has contributed to the development of advanced recycling technologies and infrastructure. The company currently holds a 90% market share in India’s domestic tyre recycling sector, while exports account for 30% of its business, spanning markets such as Europe, Australia and the GCC.

The award marks another milestone for Fornnax, whose tyre recycling lines and advanced shredding technologies are supporting the growth of the circular economy in India and international markets.

Commenting on the recognition, Mr. Jignesh Kundaria, Founder and Director of Fornnax, said:

“This honour from AIRIA is a reflection of an incredible journey we have undertaken over the years. When we started Fornnax, there was no established recycling industry in India to follow. We chose to build for the future instead. Today, when you see India’s tyre recycling sector, it has already transformed into a dynamic, high-growth industry and we are extremely proud to have played our part in building it.”

Unlike standalone equipment suppliers, Fornnax focuses on developing complete, high-capacity recycling infrastructure. Its integrated systems combine multiple stages of shredding and size reduction to enable efficient, continuous operations. This system-level engineering approach helps recycling operators improve throughput, equipment reliability and operational consistency.

The recognition reinforces Fornnax’s commitment to developing engineering technologies that contribute to a more efficient and circular recycling ecosystem.

Looking ahead, the company aims to expand its international presence while continuing to develop advanced shredding and recycling solutions to address the growing volumes and evolving requirements of the global recycling industry.

For more information, visit: www.fornnax.com

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