Beyond the headlines: the rare earth bet in the 2026 budget

February 13, 2026

Last week I went into the Budget speech with measured expectations and left with few surprises. No big shocks, no huge highs.

But as the Treasury Secretary droned on, a specific announcement made me sit up.

The government is setting up special ones Rare earth corridors in Andhra Pradesh, Kerala, Odisha and Tamil Nadu.

Why have rare earths become the center of debate and focus for policy?

Whether it is the engine in an electric car, the heart of a wind turbine, electronics or the precision sensors in our defense missiles or space travel, they all need rare earth metals.

The problem?

At the moment we are dependent on China and import almost 80% of what we need. Given the shifting geopolitical equations, this is worrying. And it’s time to seek self-sufficiency.

This is not just a vague promise. It builds on a massive Rs73 billion stimulus program announced in November. The aim is to create a huge capacity of 6,000 MTPA for permanent magnets here on Indian soil.

In a previous issue of Profit Hunter, I mentioned some names to watch in this area.

Today I’m adding a new participant to that list…

This is not a view or recommendation about the stock.

Maybe you haven’t heard of Midwest Ltd.

It is a new face on the listed market, but has been around for forty years.

For decades, Midwest has been the king of the stones. If you’ve seen the high-quality “Black Galaxy Granite” in a real estate project, chances are it came from this company. It is India’s largest producer and exporter of this granite, reaching 17 countries on 5 continents.

But here’s why it’s on my radar now: The Midwest is turning. It goes beyond granite and into the high-stakes world of quartz and rare earths. This positions the country to solve India’s huge import problems.

Take solar glass for example, which is used in solar panels and is growing at a CAGR of 30%. India currently imports 65% of its needs. Midwest aims to meet approximately 11-13% of the raw material needs of this growing industry.

But it doesn’t stop there. Under its “Phase 2” expansion, it aims to produce ultra-high purity quartz, the type of material used in semiconductors.

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

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

It has acquired four exploration licenses in Sri Lanka for heavy mineral sand mining, with commercial operations planned for FY27. One of these minerals – Monazite – is a key raw material for rare earth elements used in aerospace, defense, chemicals, electric cars, electronics, medical equipment, etc.

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

By FY27, management hopes to be a global name in titanium raw materials and rare earth oxides, serving everything from aerospace to medical devices. They aim to grow revenue 2.5 times over the next two to three years, and grow profitability three times over the next three to four years.

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

Of course there are risks.

Mining is a difficult and cyclical industry. The Midwest is currently focusing on granite, and there are competitive pressures and changing government regulations. Moreover, because so much is exported, the volatility of the rupee can impact margins.

However, as a ‘proxy play’ on India’s self-reliance in crucial minerals, Midwest is a name that definitely deserves a spot on your watchlist.

Have fun investing.

Kind regards,

Richa Agarwal
Editor and research analyst, Hidden gem
Quantum Information Services Private Limited (Research Analyst)