CMR Green Technologies Ltd Q4 FY2026 Concall Summary

Key Takeaways

• Volume-led 30% revenue growth: FY26 consolidated revenue hit ₹8,640 crore, driven by a 24% volume jump to 80,381 metric tonnes as newly added capacities ramped up and downstream expansions matured.
• Operating leverage kicked in hard: EBITDA grew 50% YoY to ₹449 crore, with Q4 alone up 160% YoY; the Q4 EBITDA margin reached ₹11,400 per tonne, helped by operating efficiency and new non-auto products.
• Two new plants go live this year: Construction is underway at Shulagiri (Tamil Nadu) and Bawal (Haryana), both expected to come into operation during FY27, pushing total capacity toward 7 lakh tonnes.
• The recycling thesis is structural, not cyclical: Management sees recycling overtaking primary as the dominant metal supply, with EV adoption tripling aluminium content per vehicle and scrap flows proving resilient even as export restrictions multiply.
• What to watch next quarter: Whether the promised ~25% volume growth for FY27 stays on track, the pace of EBITDA-per-tonne improvement as the new plants ramp, and any concrete update on the EU scrap-export duty taking effect in September 2026.

Volume Engine & Capacity Build-Out

• FY26 volume breakout: Aluminium segment volumes grew 27% YoY to 65,636 metric tonnes; non-ferrous metals grew 18% YoY to 14,745 metric tonnes, with quarter-on-quarter increases through the year.
• Capacity trajectory: FY27 capacity is expected to reach nearly 7 lakh tonnes, up from the current ~6,50,000 tonnes, with an approximate 80:20 aluminium-to-non-aluminium mix that could shift to 75:25 as both segments grow.
• Two new plants in FY27: The Shulagiri plant sits inside a future mobility park in Tamil Nadu, while the Bawal plant was built at the request of an existing customer; both will come into operation this year.
• South India import displacement: Imports into India are currently “very very small” and concentrated in South India; management expects that once CMR increases capacity in that region, imports should “progressively stop.”
• Market share trajectory: CMR has increased market share every single year from FY22 onward, outgrowing the industry even during the two-year post-Covid auto downturn when the company still posted positive growth.
• Next leg of expansion: The team is evaluating the possibility of putting up another billet and sheet plant, describing the probability as “high.”

Agarwal: “Really we compete with ourselves. We want to be better and stronger with maybe each passing day. I am not in a position to really commend why somebody else is not doing it.”

Margin Structure & Profitability Drivers

• Why EBITDA per tonne, not margin percentage: Management explicitly guides investors to evaluate profitability in rupees per tonne rather than as a percentage of turnover, because aluminium prices and exchange rates can move sharply and quickly, distorting the denominator.
• Q4 margin composition: The ₹11,400 per tonne EBITDA in Q4 was supported by operating efficiency gains and newly added non-auto products; the company expects this metric to “continuously improve” through economies of scale, technology upgrades, customer alloy development, and diversification into billets, sheet, and primary metal supply.
• Hedging eliminates commodity noise: CMR keeps all positions hedged; with auto customers, monthly pricing passes any change in aluminium prices or exchange rates through to the customer, who provides price protection between day 60 and day 90, while CMR hedges exposure from day 1 to day 60.
• OCI is mark-to-market, not a risk: The ₹166 crore Other Comprehensive Income balance represents mark-to-market on existing hedged contracts under cash-flow hedge accounting, tied to future predictable sales; management calls it “very normal,” noting it will go to zero if markets decline, or physical prices will rise and offset it.
• Aluminium price spike after Iran-US war: Management is “not so perturbed” because the pass-through and hedging machinery is designed to maintain profitability regardless of price direction.
• No segment-level EBITDA split: Management declined to separate EBITDA between aluminium and non-aluminium, stating that scrap is mostly held together and they do not perform that separation.

Garg: “In our business you should look at EBITDA not as a percentage of the turnover but as rupees because this is a commodity where the prices can very quickly move up and down.”

Scrap Sourcing in a Fragmenting Trade World

• Global sourcing footprint: CMR buys scrap from all six continents and domestically; it is not dependent on the UAE and has not been buying from there, while China has never been an exporter of scrap.
• EU export duty (September 2026): A 15% duty on aluminium scrap exports takes effect in September 2026; management expects part of the duty will be absorbed by suppliers and part passed to customers, and that complex or difficult scrap the EU cannot efficiently process will continue to flow to countries like India.
• EU ban on scrap exports to non-OECD countries (~May 2027): India has applied for an exemption; management believes complex scrap will continue to flow regardless, and the overall supply risk “should not be a major problem” if CMR remains resilient and cautious.
• US remains the biggest source: Despite a 50% import duty making US aluminium roughly \$2,000 per tonne more expensive, the US still exports scrap because the quality CMR buys is not scrap US processors can handle themselves; management says it is “too early” to assess any US export restrictions.
• UAE temporary ban: The UAE has recently imposed a four-month ban on scrap exports, which does not affect CMR given its lack of dependence on that source.

Agarwal: “Overall, we need to be very resilient. We need to be extremely cautious. So we need to be extremely cautious, which we are and it should not be a major problem.”

Customer Lock-In & Competitive Moat

• Molten metal as the ultimate moat: CMR delivers liquid metal directly online 24 hours a day to certain customers; management states flatly that “a liquid metal customer is tied with us” and neither party moves to anyone else.
• Customer share deepening: Share of business with Craftsman Automation, including its Sandeep acquisition, has “substantially increased,” with CMR now supplying two to three times the earlier volume.
• Non-auto diversification as a buffer: CMR has diversified into non-auto segments, which management says will help better manage any future auto-specific downturns, a lesson drawn from the two-year post-Covid auto degrowth that CMR still grew through.
• Recycling scope is near-universal: Except for transmission wires, which use pure unalloyed aluminium, all other aluminium applications involve alloying and therefore recycling will apply; the biggest benefit of recycling is maintaining the same alloy specification.
• EPR mandate easily met: Extended Producer Responsibility requirements will be “easily met” because a large amount of recycling is already happening, and new product designs are being created with recycling in mind, which aids faster adoption.

Agarwal: “Molten metal kind of locks in our customer very strongly with us. We deliver them 24 hours a day directly online. So a liquid metal customer is tied with us. So they don’t move to anybody else. We don’t move to anybody else.”

The Recycling Megatrend & EV Tailwind

• Recycling to overtake primary: Management’s structural thesis is that recycling will overtake overall aluminium consumption and become the dominant supplier of new metal rather than primary production.
• EV aluminium demand triples: Aluminium usage in EVs is expected to be three times that of conventional vehicles, driven by the large battery weight and low centre of gravity; the body will progressively become more aluminium-intensive over time.
• Auto sector tailwind now: The auto sector recorded 12% growth in the first two months of the current year, with cars up ~18% and two-wheelers up 12%; management sees a strong growth headwind from the auto sector over the next two years.
• Recycled quality equals primary: At the product level, there is no difference in quality whether material is made from recycled or primary aluminium; both meet the same specifications and product requirements.
• Carbon credit inventory: CMR holds 2,73,000 tonnes of carbon credits in stock with no revenue recognised yet; management expects these will become a good revenue source when a marketplace emerges, though no timeline is given.

Agarwal: “Going forward recycling is going to overtake the overall consumption of the aluminum metal and will become the dominant supplier of new metal rather than primary.”

Strategic Assets & Partnerships

• Three Japanese JVs: CMR holds majority stakes in joint ventures with Toyota Tsusho (Toyota Group), Nikkei MC Aluminium (Japan’s second-largest aluminium producer), and Nippon Light Metal (Japan’s largest aluminium company in the wrought alloy space); no royalty payments flow to JV partners.
• Beverage can recycling plant: Built in Odisha near Hindalco, this plant supplies liquid recycled metal directly to Hindalco, reinforcing the molten-metal lock-in model.
• Green billets and CP grids facility: Described as the first of its kind in the country, this large facility produces recycled green billets and CP grids, servicing the construction and solar panel manufacturing sectors.
• ESG credentials building: CMR completed its first ECOVADIS assessment, achieving an 84th percentile score and a bronze medal; it also published its sustainability report and earned its 15th Great Place to Work certification, improving on last year’s rank of 60.
• Hindustan Zinc MOU status unknown: An analyst asked for an update on the MOU with Hindustan Zinc for a zinc alloy plant; management did not provide one, pivoting instead to the billet and sheet plant ramp-up.

Guidance & Commitments

Key Metrics