RHI MAGNESITA INDIA LTD.

“RHI Magnesita India is a structurally sound repeat-purchase consumables business with a genuine decade-long volume tailwind from India's steel capacity doubling, a narrow but durable moat via TRM switching costs and parent-transferred technology, and a clean, debt-free balance sheet earning 27-32% ROCE. However, the 71% parent ownership creates a persistent RPT extraction channel that structurally disadvantages minority shareholders, the threat of a below-fair-value delisting is real, and at 48.6x trailing / 23.5x forward P/E the market has already priced near-perfect execution of the TRM strategy. Probability-weighted 5-year returns are flat-to-modest and the downside from any earnings disappointment or governance crystallization is severe. The business deserves a watchlist position, not a portfolio position at current prices.”