RHI Magnesita India declined sharply in Wednesday’s session, sliding as much as 7% intraday to around Rs.685, emerging as one of the top losers on the NSE. The fall follows a sustained rally in recent months and comes amid renewed weakness in the broader metals and industrial-materials segment.

The stock had rallied nearly 40% from its March 2025 lows on expectations of a robust rebound in refractory demand from the steel and cement sectors. After testing highs of around Rs.740, investors appear to be booking profits at stretched valuations—roughly 35× trailing earnings—triggering fresh institutional selling pressure.

As a key supplier of refractories to Tata Steel, JSW Steel, and SAIL, the company’s outlook is closely linked to domestic steel activity. Recent moderation in steel prices and lower blast-furnace utilizations have prompted concerns about short-term demand.

Adding to near-term challenges, magnesite and alumina prices, core raw materials, have climbed amid elevated energy and freight costs across Europe and China, potentially impacting Q2 FY26 margins.

The weakness in RHIM also mirrors a sectoral rotation trend, with investors shifting exposure from industrial and materials stocks toward IT and PSU banking counters, which have recently gained traction.

Analysts expect RHIM’s Q2 FY26 results to reflect softer margins and moderated volumes, but remain constructive on the long-term growth trajectory due to its dominant share in India’s refractory market, ongoing capacity expansions in Odisha and Rajasthan, and an anticipated pickup in steel demand in 2H FY26.