CMR Green Technologies Ltd Q1 FY2027 Concall Summary

Key Takeaways

• Volume-led 30% revenue growth: FY26 revenue hit INR 8,640 crores on 24% volume growth, with aluminum up 27% as newly added capacities ramped up and stabilized.
• EBITDA jumped 50% but margin stays thin: FY26 EBITDA reached INR 449 crores at a 5.2% margin (INR 11,000/ton); Q4 exited stronger at 5.4% (INR 11,400/ton), helped by operating efficiency and non-auto product mix.
• Capacity expansion is the growth engine: Management targets nearly 7 lakh tons capacity by FY27-end, up from ~6.05 lakh tons, with two new plants under construction and another billet/sheet ingots facility under evaluation.
• Customer lock-in via liquid metal is a structural moat: Patented safe road transport and process-control IP, plus 24-hour direct online delivery, tie customers "at the hip" to CMR, creating high switching costs and predictable repeat sales.
• What to watch next quarter: Whether the 25% volume growth target for FY27 stays on track as new capacities come online, any progress on EBITDA per ton improvement, and clarity on the Hindustan Zinc MoU that management left unaddressed.

Volume Growth & Capacity Build-Out

• FY26 volume engine: Total volume grew 24% to 80,381 MT, with aluminum at 65,636 MT (+27%) and non-ferrous at 14,745 MT (+18%). The ramp-up of previously added brownfield capacities and their stabilization drove the aluminum surge.
• Capacity target within reach: Management expects to lift total capacity from ~6.05 lakh tons to nearly 7 lakh tons by FY27-end, maintaining roughly an 80:20 aluminum-to-non-aluminum mix.
• Two greenfield plants underway: A plant in the Future Mobility Park at Shoolagiri, Tamil Nadu will supply raw material to EV parts manufacturers; a second plant in Bawal, Haryana is being built at an existing customer's request and will come online this year.
• Another billet and sheet ingots plant likely: The ramp-up at the existing recycled green billets and sheet ingots facility is going well, and management sees a high probability of adding another such plant, with the team currently evaluating capacity and location.
• FY27 volume outlook: Management expects similar 25% volume growth in FY27, with FY28 also shaping up as a good growth year, supported by strong auto sector momentum (auto grew 12% in the first two months of FY27, EVs up ~18%, two-wheelers up 12%).
• South India expansion to curb imports: Once capacity increases in South India, imports should progressively stop, shifting sourcing toward domestic supply.

Customer Moat & Liquid Metal Advantage

• Liquid metal locks in customers structurally: CMR delivers molten aluminum directly online 24 hours a day, eliminating the customer's need to remelt solid ingots. That saves substantial energy cost and earns environmental credits, while the just-in-time integration makes switching suppliers operationally prohibitive.
• Patented process control deepens the tie: CMR holds patents on both safe road transportation of liquid metal and process control at the customer's end, adding a layer of IP protection to what is already a high-switching-cost relationship.
• Single-source or major supplier status: CMR is the single-source or dominant supplier to most OEMs and Tier 1 auto component makers, with relationships as old as the company itself. High repeat orders and proximity to customer plants make sales sustainable and predictable.
• Share gains with existing customers: CMR's share of business with Craftsman Automation has grown 2x to 3x, and its overall share in the Craftsman space including Sunbeam has expanded, demonstrating deepening wallet share even within long-standing relationships.

Mohan Agarwal: "Molten metal kind of locks in our customer very, very strongly with us. We deliver them 24 hours a day directly online. So, a liquid metal customer is tied with us at the hip. So, they don't move to anybody else, we don't move to anybody else."

Profitability & Margin Mechanics

• FY26 EBITDA surge: EBITDA rose 50% YoY to INR 449 crores, with Q4 delivering INR 128 crores (+160% YoY) at a 5.4% margin or INR 11,400 per ton. Operating efficiency and newly added non-auto product supported the Q4 exit rate.
• Management insists on rupees-per-ton, not percentage: Because aluminum prices swing sharply and pass through to revenue, management urges investors to evaluate EBITDA on a per-ton basis rather than as a margin percentage, arguing the latter distorts underlying operating performance.
• Improvement levers are operational, not pricing-led: EBITDA per ton should improve through economies of scale as volumes grow, technological upgrades, co-developing alloys with customers, diversifying into supplying primary producers, and moving into higher-value wrought products like billets and sheet ingots.
• No quantified EBITDA target: When pressed for a specific EBITDA per ton or margin target for FY27, management declined to put a number on it, calling improvement an ongoing process.
• Segment-level profitability undisclosed: An analyst asked for EBITDA per ton split between aluminum and non-aluminum segments; management declined, stating scrap is mostly sourced together, making a clean split impractical.
• Price volatility is hedged, not feared: CMR prices monthly with auto customers, passing through any aluminum price or exchange-rate changes. Customers provide price protection from day 60 to day 90, while CMR hedges its exposure from day 1 to day 60. The INR 166 crores in OCI reflects mark-to-market on those hedge contracts and will settle as physical prices move.

Mohan Agarwal: "One thing that in our business, you should look at EBITDA not as a percentage of the turnover, but as a rupees per ton basis. Because we -- this is a commodity where the prices can very quickly move up and down."

Scrap Sourcing & Recycling Tailwinds

• Global scrap demand is outpacing supply: Demand for aluminum scrap is growing faster than supply worldwide. CMR mitigates this structural tightness by buying from all six continents, balancing domestic and import sourcing to stay resilient if any single region disrupts.
• EU scrap ban risk is manageable: India has applied for an exemption from the EU scrap export ban. Even if restrictions tighten, management expects difficult-to-process or complex scrap grades to continue flowing to India, where CMR's trained manpower and technology advantage in scrap segregation create a processing edge.
• Recycling set to overtake primary aluminum: Management believes recycled metal will become the dominant source of new aluminum supply, displacing primary production. This secular shift favors CMR's pure-play recycling model.
• EPR mandate is an opportunity, not a threat: Extended Producer Responsibility requirements will be easily met, and technology developments in recycled aluminum are making it easier for producers to adopt recycled metal. New products are increasingly designed with end-of-life recycling in mind.
• Carbon credit stockpile sits unrecognized: CMR holds 2.73 lakh tons of carbon credits with zero revenue recognized, accumulating at least 70,000 to 80,000 tons annually. Management views this as a future revenue stream contingent on a carbon marketplace emerging.

Mohan Agarwal: "Look, the demand for scrap across the world is growing. On the other hand, the supply also is growing, but the demand is growing faster than the supply. Now, to mitigate this potential risk, what we at CMR is doing is we kind of buy practically from all the six continents in the world."

Diversification Beyond Auto

• Non-auto diversification is recent and deliberate: CMR historically serviced only the auto industry. Post-COVID, when the industry degrew for two years, CMR still grew by diversifying into non-auto segments, a shift that now provides a broader demand base.
• Beverage can recycling opens a new vertical: A plant built in Odisha near Hindalco supplies liquid recycled metal directly to Hindalco, demonstrating the model's applicability beyond automotive and into packaging.
• Recycled green billets and sheet ingots target construction and solar: CMR's large facility producing recycled green billets and sheet ingots, described as the first of its kind in the country, services the construction and solar sectors, both structural-growth end markets.
• Future Mobility Park plant is an EV bet: The Shoolagiri plant will service all future mobility solutions, positioning CMR to supply raw material to EV parts manufacturers as that ecosystem scales.
• Auto still the near-term growth engine: Despite diversification, management expects significant growth headwind from the auto sector over the next two years, with auto already recording 12% growth in the first two months of FY27.

Strategic Partnerships & Technology

• Three Japanese JVs bring technology without royalty cost: CMR holds majority stakes in joint ventures with Toyota Tsusho, Nikkei MC Aluminium, and Nippon Light Metal. No royalty is payable, yet CMR benefits from technology transfer and marketing access.
• Technology adoption is a blend of global best practices and Indian manpower: CMR quickly adopts the best available recycling technologies globally, then combines them with abundant trained Indian manpower for labor-intensive steps like scrap segregation, creating a cost-plus-quality advantage that is hard to replicate.
• ESG credentials are operational, not cosmetic: CMR is a zero-discharge company with no liquid or solid waste, sources one-third of its power from solar, and claims its production alone saved millions of tons of critical materials (power, CO2, water, bauxite, limestone) last year.
• Competitive moat is hard to replicate: When asked why other recycled players are not building similar capacity, management deflected, but the implied answer lies in the combination of customer lock-in, patented processes, global scrap-sourcing scale, and technology-plus-manpower integration that a new entrant would struggle to assemble quickly.

Mohan Agarwal: "As I speak, we have 2.73 lakh tons of carbon credits in stock with us at CMR, for which we have not recognized any revenue because there is no marketplace. But as and when the marketplace comes in, it will become a good source of revenue for us."

Guidance & Commitments

Key Metrics