TEGA INDUSTRIES — A Proxy for the Global Mining Cycle

TEGA INDUSTRIES — A Proxy for the Global Mining Cycle

The Story:
Copper, gold and other critical minerals are entering a structurally interesting cycle. Electrification, renewables, data centres and grid investment require significantly more metals, while declining ore grades mean miners increasingly need to process more tonnes of ore to produce the same quantity of metal.

Rather than betting on one commodity, Tega Industries is a picks-and-shovels play on global mining activity.

The Thesis:
Tega supplies critical consumables used in mineral processing — mill liners, grinding solutions and other products that continuously wear out and require replacement. Hence, its opportunity is driven less by the daily price of copper or gold and more by ore processed, mine utilisation and grinding intensity.

The acquisition of Molycop is transformational. It adds grinding media to Tega's portfolio and dramatically expands its global scale, customer relationships and addressable market. Tega can now potentially offer a much broader basket of consumables to the same mine.

Q1FY27 — First Look at the New Tega:
Consolidated revenue jumped to approximately ₹1,723 crore, with Molycop contributing for only one month of the quarter. Adjusted EBITDA was approximately ₹264 crore, implying an adjusted margin of ~15%.

Importantly, legacy Tega also remained healthy — revenue grew ~23% YoY, adjusted EBITDA grew ~42%, and the order book was around ₹1,231 crore.

The Triggers:

• Stronger copper/gold mining and higher global ore processing volumes.
• Declining ore grades increasing grinding and consumables intensity.
• ~US$20 million of targeted Molycop synergies over roughly 2–2.5 years.
• Cross-selling Tega products into Molycop's global customer base — potentially the biggest strategic opportunity.
• Chile capacity coming onstream, strengthening Tega's presence close to one of the world's most important copper-mining regions.
• Continued ~15% growth potential in the legacy consumables business.

Valuation — This is Where It Gets Interesting

At ~₹1,740/share, Tega's market capitalisation is around ₹13,000 crore.

The acquisition has completely changed the earnings base of the company. On the latest quarterly, Tega + Molycop together generated ~₹1,000 crore of EBITDA run-rate.

Our analysis suggests that ₹2,000 crore+ of sustainable annual EBITDA over the next 2–2.5 years is achievable, and potentially conservative if mining activity remains supportive, cross-selling works and the targeted synergies materialise.

At the present market capitalisation, that translates into only ~6.5x Market Cap/EBITDA on our ₹2,000 crore EBITDA assumption.

So the opportunity is straightforward:

Tega today is valued like a relatively small Indian mining-consumables company, while after Molycop it has become one of the world's largest mining-consumables platforms.

If integration succeeds, debt reduces and EBITDA compounds beyond ₹2,000 crore, we believe there is a meaningful possibility of both earnings growth + valuation re-rating.