Stocks To Buy: A newly listed, outperforming mining stock can rise another 55%, MOSL 'bull case' says

Shares of Midwest Ltd., a recently listed mining firm, gained as much as 4% on Friday, December 26, after the stock received its first analyst coverage with a potential upside of 23%.

Motilal Oswal has initiated coverage on Midwest with a "buy" rating and a price target of ₹2,000 per share. In a bull case scenario, Motilal Oswal has a price target of ₹2,500 per share, indicating an upside potential of 54% from Wednesday's closing levels. 

Midwest has a strong core, strategic diversification and superior profitability, according to Motilal Oswal. The company is India's largest producer and exporter of premium Black Galaxy Granite. It has over 60% of India's export market share and is a leading

player in Absolute Black Granite.

The company is vertically-integrated and has a supply chain, operating 20 mines, and has generated ₹630 crore in revenue during financial year 2025, with a compound annual growth rate (CAGR) exceeding 21% over the past five years, it said.

Midwest's granite (core operations) volumes are estimated to scale up to ₹1,50,000 per cubic metre (cbm) by FY28 via new mine-and cluster-based expansions, which will ensure steady and sustained earnings growth, the brokerage note said. 

Motilal Oswal expects Midwest's revenue and earnings before interest tax (EBIT) likely to clock a CAGR of 12% each over FY25-28.

The primary opportunity lies in the quartz processing plants, which require a capex of ₹130 crore in phase 2 to reach a capacity of around 600 ktpa by FY27 compared to the present 300 ktpa, Motilal Oswal said. This expansion aligns seamlessly with domestic demand, which is poised to record a CAGR of 25%, it added.

Also, Midwest is foraying into the mining — having obtained four mines in Sri Lanka — and processing of heavy mineral sands (HMS), primarily used as feedstock for titanium dioxide.

The brokerage is of the view that Midwest offers a unique combination of a near-monopoly cash cow (Black Galaxy/Absolute) that funds two new high-growth, high-margin businesses (Quartz and HMS) with minimal balance sheet strain. These expansions will diversify revenue, reduce concentration risk from 96-98% granite share in FY25 to 50% by FY28, it said.

The company's overall revenue and EBITDA are likely to post a 36% and 47% CAGR compared to 12% CAGR for Granite over FY25-28, respectively, supported by the Quartz and HMS businesses, Motilal Oswal said. Given this, it expects the adjusted profit after tax to see 56% CAGR growth over FY25-28.

Midwest's net debt stood at ₹220 crore, translating into a net debt/EBITDA of 1.3x as of FY25. The ratio is expected to dip to less than 1x due to the rising operating profit, going forward, as per the brokerage.

As Quartz and HMS operations scale up by FY27-28, the operating cash flow is likely to exceed ₹200 crore annually, turning the free cash flow structurally positive. This will support deleveraging, expansion opportunities and a clear re-rating potential over the next three to four years, the brokerage added.

Motilal Oswal also listed key risks for the stock:

• Export concentration


• Regulatory uncertainties


• Delays in the ramp-up of quartz production


• Dependence of granite demand on global real estate cycles.

Bull case scenario

Meanwhile, in a bull case scenario, Motilal Oswal expects the average granite volumes to post a 12% CAGR during FY25-28 with a blended pricing at ₹60,000 per cbm. It also expects 0.4mt quartz volume as the plant reaches more than 60% utilisation by FY28 with average pricing of ₹15,000 per tonne.

The brokerage expects a revenue and EBITDA CAGR of 40% and 56%, respectively, during FY25-28. The EBITDA margin is estimated to expand to 38% from 34% under the base case and against 26% reported in FY25. With this, profit after tax (PAT) is expected to grow at 67% CAGR over FY25-28, Motilal Oswal said.

Stock performance

Midwest shares listed on the stock exchanges on October 24, 2025 at a 9% premium over its issue price of ₹1,065 per share.

Shares of Midwest are trading 1.8% higher on Friday at ₹1,654.4. The stock made a new post-listing high of ₹1,687, which is a return of 58% from its issue price.

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