Beyond the Headlines: The Rare Earth Bet in Budget 2026

I walked into the Budget speech last week with measured expectations and walked out with few surprises. No major shocks, no massive highs.

But as the Finance Minister droned on, one specific announcement made me sit up.

The government is setting up dedicated Rare Earth Corridors across Andhra Pradesh, Kerala, Odisha, and Tamil Nadu.

Why have rare earths become center of discussions and focus for policies?

Well, whether it's the motor in an EV, the heart of a wind turbine, electronics or the precision sensors in our defence missiles or aerospace, they all need rare earth materials.

The problem?

Right now, we are dependent on China, importing nearly 80% of what we need. Given the shifting geopolitical equations, that's concerning. And it's time to seek self-sufficiency.

This isn't just a vague promise. It builds on a sizeable Rs 73 bn incentive scheme announced back in November. The goal is to create a massive 6,000 MTPA capacity for permanent magnets right here on Indian soil.

In an earlier issue of Profit Hunter, I pointed out a few names to watch in this space.

Today, I'm adding a new entrant to that list...

This is not a view or recommendation on the stock.

You might not have heard of Midwest Ltd.

It's a fresh face in the listed market, but it has been around for forty years.

For decades, Midwest has been the king of stones. If you've seen high-end "Black Galaxy Granite" in a real estate project, there's a high chance it came from this company. It's India's largest producer and exporter of this granite, reaching 17 countries across 5 continents.

But here is why it's on my radar now: Midwest is pivoting. It's moving beyond granite into the high-stakes world of quartz and rare earth materials. This positions it to solve a massive "import" headache for India.

Take solar glass, for instance that is used in solar panels, and is growing at 30% CAGR. India currently imports 65% of its requirements. Midwest aims to cater to around 11-13% of the raw material needs of this growing industry.

But it is not stopping there. Under "Phase 2" expansion, it aims to produce ultra-high purity quartz, the kind of stuff used in semiconductors.

The rare earth angle, the expansion into heavy mineral sands, is the real kicker.

Midwest plans to enter heavy mineral sand mining and titanium slag production, while also exploring the extraction of minerals used in advanced ceramics and LED industries.

It has secured four exploration licenses in Sri Lanka for heavy mineral sand mining, with commercial operations targeted for FY27. One of these minerals - Monazite - is key raw material for rare earth elements used in aerospace, defence, chemicals, EVs, electronics, medical devices etc.

It has even signed an MoU with KMML (Kerala Minerals and Metals) to process these raw materials into high-value oxides.

By FY27, the management hopes to be a global name in titanium feedstock and rare earth oxides, serving everything from aerospace to medical devices. They're aiming to grow revenue 2.5 times over the next 2-3 years, and 3 times profitability in the next 3-4 years.

Looking at the track record, there is wind in the company's sails. Between 2023 and 2025, operating profits grew at a CAGR of 38%, with an EBITDA margin of 30%. Its targeting a 35% return on capital (ROCE) as the new businesses scale up.

Of course, there are risks.

Mining is a tough and cyclical business. Midwest is currently concentrated on granite, and there is competitive pressure and changing government regulations. Plus, because it exports so much, rupee volatility can impact margins.

However, as a "proxy play" on India's self-reliance in critical minerals, Midwest is a name that certainly deserves a spot on your watchlist.

Happy investing.

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure
Quantum Information Services Private Limited (Research Analyst)