# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹4,265 Cr** FY26 (+10% YoY) · **₹1,172.76 Cr** Q4 FY26 (+13% YoY / +15% QoQ) * **Adjusted EBITDA:** **₹452.48 Cr** FY26 (+12% YoY) · **₹112.91 Cr** Q4 FY26 (+4% YoY) * **PAT:** **₹378.80 Cr** FY26 (+21% YoY) · **₹91.88 Cr** Q4 FY26 * **Margins:** **10.6%** Adj. EBITDA FY26 · **8.88%** PAT FY26 * **EBITDA per Ton:** **₹23,043** Lead · **₹16,043** Plastic · **₹12,328** Aluminum * **Net Debt:** **~₹100 Cr** Current * **Working Capital Cycle:** **~90 Days** ## B. Revenue & Profit Growth * **Long-term Value Creation:** Maintained a robust five-year CAGR through FY26, with EBITDA and PAT growth significantly outstripping revenue expansion. * **Operational Drivers:** Annual top-line growth was fueled by enhanced capacity utilization and efficiency gains, despite quarterly volatility. * **Non-Operating Income:** P&L supported by **₹77 Cr** in other income, reflecting high yield on surplus cash and liquidity investments. ## C. Margin & EBITDA Analysis * **Logistical Headwinds:** Q4 absolute EBITDA was pressured by Middle East disruptions, impacting high-margin value-added products which comprise **10% to 12%** of total sales. * **Copper Synergy:** The RMIL acquisition is expected to boost absolute EBITDA per ton; current copper margins of **₹45,000/ton** are projected to reach **₹65,000–₹70,000/ton** post-backward integration. * **Lead Guidance:** Management maintains a sustainable lead EBITDA floor of **₹19–₹20 per kg**, normalizing for previous years' temporary arbitrage benefits. ## D. Debt & Interest Costs * **Leverage Inflection Point:** Net debt is forecast to surge to **₹800 Cr–₹900 Cr** within 15 months to fund the capital-intensive copper recycling entry. * **Interest Efficiency:** Despite gross debt rising to **₹736 Cr** following a March acquisition, net interest costs remain suppressed by QIP proceeds and cash offsets. * **Near-term Outlook:** Interest expense is projected at **₹4 Cr–₹5 Cr** per quarter for FY27, assuming stable debt levels prior to the copper business ramp-up. ## E. Working Capital Cycle * **Inventory Strategy:** The current cycle is slightly elevated due to strategic inventory positioning for new capacities in Jaipur and Mundra. * **Structural Requirements:** Future working capital is expected to settle at the upper end of the historical range, necessitated by the **90-day** cycle of imported copper. * **Capital Intensity:** Full utilization of the 30,000-ton copper capacity is estimated to require a dedicated working capital outlay of approximately **₹1,000 Cr**. --- # 2. Manufacturing & Capacity ## A. Key Figures * **Total Installed Capacity:** **4.57 Lakh MTPA** Current · **>8 Lakh MTPA** FY29 Target * **Mundra Lead Capacity:** **145,100 MTPA** Total (+80,300 MTPA) * **Mundra Lead Expansion Capex:** **₹49 Cr** Funded via internal accruals * Copper Phase 1 Capacity: **29,400 MTPA** (Mandvi) * **Copper Phase 1 Capex:** **₹160 Cr** * **RMIL Capacity:** **30,000 MTPA** Current · **60,000 MTPA** 3-Year Target ## B. Installed Capacity Expansion * **Aggressive Lead Scaling:** Management raised the medium-term lead target to **800,000 tons**, ensuring core lead operations remain a priority alongside new metal verticals. * **Strategic Copper Pivot:** Significant expansion into copper recycling is underway, with plans to scale total capacity to **over 100,000 tons** within 2-3 years. * **New Vertical Entry:** Initial rubber recycling capacity is being established in Mundra, with subsequent international expansion planned for **Romania** next year. * **Volume Outlook:** Long-term production volumes are projected at approximately **500,000 tons** based on steady-state utilization targets. ## C. Facility Utilization Rates * **Efficiency Gains:** Current utilization at RMIL is approximately half of capacity, with a near-term target to reach a more optimal **60%-65%** range. * **Standardized Utilization:** The company anticipates maintaining a consistent utilization rate of **60% to 65%** across its expanded global footprint by FY29. ## D. Project Commissioning Timelines * **Near-Term Lead Additions:** The **45,000-ton** Phagi (Jaipur) plant expansion is physically complete; commissioning is slated for **Q1 FY2027** pending final government approvals. * **Copper & Rubber Milestones:** The new copper recycling facility and the Mundra rubber expansion are both scheduled to commence commercial operations within the next **12 months (H1 FY27)**. * **Vertical Integration:** Copper strategy focuses on backward integration at Mundra to consolidate products following the RML acquisition. --- # 3. Product & Segment Performance ## A. Key Figures * **Operational Volume:** **56,208 MT** Total (+5%) · **48,889 MT** Lead (+7%) * **Copper Margin:** **8%** Current · **9%–10%** 2-3 Year Target ## B. Lead & Aluminum Operations * **Divergent Segment Performance:** Lead volumes saw single-digit growth supported by capacity additions, while Aluminum declined due to selective sales and hedging constraints. * **Lead Growth Headwinds:** Despite a **15% CAGR**, the lead division faces pressure from the unorganized sector, though domestic scrap availability is expected to improve via tax reforms. * **Aluminum Margin Drivers:** Profitability exceeded sustainable targets this year, bolstered by a late-quarter surge in aluminum and copper prices. ## C. Copper & Value-Added Mix * **Aggressive Volume Outlook:** Management anticipates robust momentum in copper with projected growth of **40%-50%** this year, matching previous performance levels. * **Strategic Backward Integration:** Focus is shifting from standard rods to high-margin value-added products (sheets, foils, cups) for the defense and electronics sectors. * **Margin Expansion Roadmap:** Profitability is expected to scale significantly through optimized procurement of **copper scrap** and operational synergies at the RIML facility. * **Competitive Realization:** Sourcing advantages and specialized product offerings are expected to yield higher realizations than basic market aggregators. ## D. Lithium-Ion & New Segments * **EV Battery Pilot:** Commissioned a **6,000 MTPA** facility in Mundra for **₹14 Cr**; currently producing black mass with refining capabilities planned for phase two. * **Rubber & Plastic Expansion:** Rubber operations are scaling via a Romanian acquisition and new Indian capacity (H1 launch), while Plastic margins rose due to overseas supply disruptions. --- # 4. Capital Allocation & M&A ## A. Key Figures * **Total CAPEX (FY26-29):** **₹1,700 Cr** Revised upward from ₹1,200 Cr * **Copper Segment Allocation:** **₹700 Cr** Total CAPEX · **₹1,200 Cr** Working Capital * **RMIL Acquisition Cost:** **₹560 Cr** for 99.44% stake * **RMIL Capacity:** **31,200 MTPA** Integrated Gujarat facility * **FY26 Performance:** **₹372 Cr** CAPEX incurred · **65** ESG Rating ## B. Multi-Year CAPEX Plan * **Strategic Pivot to Copper:** Significant upward revision in the four-year investment plan is primarily driven by aggressive expansion into copper recycling and value-added products. * **Phased Expenditure:** Capital deployment is back-loaded, with **₹600 Cr** in FY27, **₹700 Cr** in FY28, and tapering to **₹400 Cr** in FY29. * **Diversification Strategy:** While lead remains core, the budget targets new verticals including lithium-ion and rubber, though steel recycling has been deferred for **2-3 years** to ensure execution focus. ## C. RMIL Acquisition Integration * **Margin Accretion Profile:** Management expects a substantial increase in profitability per ton (from **₹45,000 to ₹65,000**) as the company integrates a dedicated recycling unit to support RMIL. * **Financial Impact Timing:** The acquisition had negligible impact on recent quarterly results due to a late-March closing; full revenue and EBITDA contribution is expected in upcoming cycles. * **Return Thresholds:** The company is targeting a consolidated **ROCE of 20%+** for the copper division by optimizing the mix between basic recycling and high-margin value-added products. ## D. Funding & Strategic Priorities * **Self-Funded Growth:** The multi-year investment program is slated to be financed entirely through internal accruals, maintaining a disciplined balance sheet. * **Debt Utilization:** External borrowing is strictly reserved for working capital requirements rather than long-term asset creation. * **Operational Focus:** Near-term priorities are centered on stabilizing current expansions in copper and rubber while scaling existing lead and lithium-ion infrastructure. --- # 5. Supply Chain & Sourcing ## A. Global Procurement Network * **Strategic Geographic Expansion:** Plans to establish additional yards in the **US, Europe, South America, and Australia** to secure high-volume copper scrap sourcing for new plant requirements. * **Cross-Commodity Synergies:** Leveraging the established US battery scrap network and existing global representatives to transition from lead-focused operations to a diversified sourcing model. * **Infrastructure Strengthening:** Focus on building dedicated procurement infrastructure in developed nations to mitigate the limitations of current sourcing in developing economies. ## B. Backward Integration & Market Dynamics * **Internal Supply Priority:** Copper recycling is being implemented primarily as a backward integration play for RMIL, ensuring raw material security while maintaining optionality for external sales. * **Domestic Collection Headwinds:** Lead collection efficiency is currently constrained by significant price disparities between domestic and overseas markets. * **Arbitrage Sensitivity:** Domestic collection rates are expected to accelerate upon the narrowing of the **LME (London Metal Exchange)** arbitrage opportunity. --- # 6. Regulatory & Operational Risks ## A. Key Figures * **Blended Tax Rate:** **17%-18%** Projected FY range (vs. **15%** YoY) * **GST Rate:** **18%** Current tax on battery scrap * India Corporate Tax: ~17%-18% blended rate for domestic RMIL and copper business ## B. Geopolitical & Logistics Disruptions * **Margin Headwinds:** Ongoing West Asia conflicts are driving elevated logistics costs, likely pushing Q1 EBITDA per ton toward the lower end of guidance. * **Market Diversification:** Management is mitigating Middle East sourcing and sales disruptions by entering new geographies, though value-added product penetration in these markets requires a longer gestation period. * **Aluminum Scaling:** Domestic aluminum expansion is contingent on **MCX approval** for hedging contracts; while requirements are met, the timeline for contract release remains uncertain. ## C. EPR Compliance Framework * **Supply Chain Formalization:** Tightening government regulations and the transition to a formal sector are stabilizing sourcing and preventing sub-par vendor pricing. * **Regulatory Oversight:** The CPCB is implementing a rigorous audit framework and an **MSTC trading portal** to eliminate fraudulent EPR credits and enhance credit value realization. * **Industry Alignment:** A broad consensus has been reached between battery OEMs and smelters regarding the implementation of Battery Waste Management Rules (BWMR). ## D. Tax & Arbitrage Risks * **Tax Rate Normalization:** The projected increase in the blended tax rate is driven by a higher revenue mix from domestic Indian operations. * **Eliminating Unorganized Arbitrage:** The government is evaluating a **Reverse Charge Mechanism (RCM)** and **TDS on scrap** to remove the current tax advantage held by informal recyclers. ## E. Metal Price Hedging * **Risk Mitigation:** Working capital debt is categorized as low-risk due to a disciplined hedging policy that renders metal inventory as liquid as cash. * **Hedging Requirements:** Scaling the domestic aluminum business requires a robust hedging mechanism to manage the increased working capital cycles inherent in India-based plants. --- # 7. Guidance & Outlook ## A. Key Figures * **Volume CAGR:** **20%-25%** 3-year projection · **20%-25%** FY '27 target * **Copper Capacity:** **60,000 tons** 2-3 year target · **100,000 tons** FY 2029 target * **Value-Added Mix:** **42%** FY '26 revenue · **50%** Vision 2029 target * **EBITDA Guidance (per kg):** **₹19–₹20** Lead · **₹45** Copper · **₹10–₹12** Plastic · **₹7–₹8** Rubber ## B. Volume Growth Targets * **Sustained Expansion:** Robust multi-year volume growth trajectory supported by recent capacity additions and the full integration of **RMIL**. * **Recovery Momentum:** Management expects slightly higher growth in the near term to offset previous volume shortfalls. ## C. Vision 2029 Objectives * **Strategic Diversification:** Scaling core operations while expanding into lithium-ion, rubber, and steel recycling across a **70+ country** footprint. * **Product Mix Evolution:** Significant progress toward the long-term goal of half of total revenue coming from value-added offerings. * **Conservative Forecasting:** Potential volumes from lithium-ion recycling are excluded from the FY '29 guidance, representing pure "additional upside." ## D. Margin Sustainability Guidance * **Lead Margin Accretion:** Anticipated improvement in lead profitability driven by economies of scale and a higher proportion of value-added products. * **Copper Profitability:** Management targets a specific EBITDA of approximately **INR 60,000 per ton** once planned copper recycling expansions are operational. * **Guidance Continuity:** Segment-level profitability expected to remain stable and consistent with historical guidance despite the current high-growth phase.