Metrics cut 1
- FY27 volume growth guidance reduced to 12-15% (from 15-20%)
Event Participants
Executives
5 Devendra Surana, Advait Surana, Surendra Bhutoria, Rahul Surana, Anusha Devi
Analysts
10 Aditi Parmar, Ajit Sethi, Ankit Gupta, Disha C, Divyank Patel, Manan Vandur, Naman Parmar, Prateek Shrivastava, Rishabh Modi, Vaibhav Mishra
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹700 crores | Q1 FY27 turnover; driven by higher realizations despite volume decline |
| EBITDA | ₹38.01 crores (5.43% margin) | Highest in recent times; +10.38% QoQ, +63% YoY; benefited from supply disruption in Apr-May |
| PAT | ₹20.09 crores (2.87% margin) | Highest PAT margin; +9.5% QoQ, +167% YoY |
| Sales Volume | 5,200 tons | -9.5% QoQ, -6.5% YoY; June alone contributed 2,200 tons indicating normalization |
| Value-Added Product Share | 63% | Highest ever; up from 62% last year; target 63-64% for FY27, 68-69% over 3-4 years |
| EBITDA per kg | ₹72 | Highest ever; driven by margin expansion across commodity and value-added products |
| Export Contribution | 18% of revenue | 82% commodity, 18% value-added; target 12-15% for full year |
| ROE | 29% | Quarter performance |
| ROCE | 18.5% | Quarter performance |
| Tin-Coated Products | ~250 tons | New product line; all directed to data center applications |
| Data Center Bus Bars | ~600 tons (est.) | Includes tin-coated and plain bus bars for AI data centers |
| Installed Capacity | 35,000 MTPA | Fully online; expansion to 45,000 MTPA targeted by Apr-Jun FY28 |
| Capex Plan | ₹40 crores | Over FY27-FY28 across two Hyderabad facilities (4-acre and 60-acre) |
| Fundraise (Tranche 1) | ₹52 crores | Finalized; funds expected in August 2026 |
| Projected Debt (FY30) | ₹300-350 crores | ~₹325 crores per CFO projection; supported by cash flows from 5% EBITDA margin |
| GST Litigation Deposit | ₹17 crores | For FY23; supplier registration cancelled retrospectively; confident of winning at tribunal |
| Plastic Recycling Revenue | ~₹50 crores (est.) | <1% of ₹5,000 cr target; margins 30-50%; plastic obtained free with cable scrap |
| CTC Wire Capacity | 80 MT/month | Expanding to 150 MT/month; added 48-conductor capability (from 28) |
Geographic & Segment Commentary
Domestic Copper Products: Volume declined 6.5% YoY to 5,200 tons due to Apr-May trade route disruptions; June run-rate of 2,200 tons signals recovery. Value-added mix at record 63% driven by transformer, tin-coated bus bar, and data center products. Auto/switchgear commands highest value addition (double-digit margins), while transformer/motor winding and bus bars show highest growth potential.
Exports: Contributed 18% of Q1 revenue (majorly commodity); exported >100 tons of bus bars to North America and transformer products globally. Targeting 12-15% export share for FY27 dependent on pricing and demand.
Recycled Copper Market: India's secondary copper demand projected to double from 0.7 to 1.4 MMT by 2030; market growing at 12-13% CAGR. Company growing at 2-2.5x market rate (15% vs 6-6.5%), gaining share through diverse product portfolio across EVs, AI data centers, transformers, electrification.
Company-Specific & Strategic Commentary
Corporate Restructuring: Forming Tieramet Limited (wholly owned subsidiary) to house all copper business; Bhagyanagar Copper merges into Bhagyanagar India; Tieramet demerged. Bhagyanagar India retains 3 prime industrial land parcels and windmill project. NCLT hearing scheduled August 7, 2026. Purpose: value unlocking and pure-play copper focus.
Capacity Expansion: 35,000 MTPA capacity fully operational. Next 10,000 MTPA expansion (to 45,000 MTPA) targeted for April-June FY28 (likely June). ₹40 crore capex over FY27-FY28. CTC wire capacity expanding from 80 to 150 MT/month with new 48-conductor capability.
Digital Transformation: Complete digitalization of all processes, departments, and reporting over next year; zero manual entry target.
Green Copper Positioning: Solar-powered operations, recycled copper base qualify as green supplier; EPR regulations in 1-2 years to add tailwinds. No premium currently commanded but structural advantage building.
Fundraising Strategy: ₹52 crore first tranche finalized (August 2026); second tranche ~March 2027 post-demerger in standalone copper entity. MCX hedging margin needs contingent on copper price volatility.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Volume Growth (FY27) | 12-15% | Reduced from 15-20% due to Apr-May volume loss; June run-rate supports recovery |
| EBITDA Margin (FY27) | 5-5.5% | Q1 at 5.43% benefited from disruption; sustainable range 5-5.5% normalized |
| Value-Added Mix (FY27) | 63-64% | Gradual creep from 63%; targeting 68-69% over 3-4 years without sacrificing commodity |
| Export Share (FY27) | 12-15% | Dependent on global pricing and demand; Q1 at 18% |
| Revenue Growth (FY27) | ~30% higher average value vs FY26 | Driven by copper price increase and value-added mix improvement |
| Long-term Volume CAGR | 15% | FY28 onwards; scaling value-added alongside scrap conversion |
| Long-term EBITDA Margin | 5-5.5% through 2030 | Conservative; targeting 5.4-5.5% by 2030 with plastic recycling tailwind |
| Revenue Target (FY30) | ₹5,000 crores | Confident regardless of copper price; inclusive of plastic recycling (~₹50 cr) |
| Market Share Trajectory | 2-2.5x market growth | Copper products market at 6-6.5%; company at 15% volume growth |
Risks & Constraints
| Risk | Context |
|---|---|
| GST Input Credit Litigation | ₹17 crore deposited for FY23; supplier registration cancelled retrospectively after supply. Provision denies credit if supplier doesn't pay GST. Management confident of winning at tribunal given full documentation (lorry tracking, videos, payments). No provision made. |
| Copper Price Volatility & MCX Margins | Hedging margin requirements scale with copper price. If prices double, significant incremental funding needed. Fundraise partly addresses this contingency. |
| Data Center Architecture Shift | Potential move from 48V to 800V DC architecture could reduce copper bus bar demand by ~50%. Management views impact as non-material given diversified portfolio and early-stage demand. |
| Geopolitical/Trade Route Disruptions | Apr-May 2026 saw material shortages due to trade route disruptions (75% scrap imported). Sourcing normalized from June but remains a structural vulnerability. |
| Competitive Margin Pressure | Long-term EBITDA margin guidance capped at 5.5% despite value-added mix increase due to anticipated competitive pressures. Q1 5.43% viewed as overachievement. |
| Real Estate Entity Inquiries | Investigations in Bhagyanagar Properties Limited (separate entity, no shareholding overlap) closed in 2024-25 with no repercussions. Bhagyanagar India's 3 land parcels are government-allotted industrial lands with no issues. |
Q&A Highlights
Volume & Margin Guidance
- Question: Why reduce volume guidance to 12-15% from 15-20% if sourcing normalized? (Prateek Shrivastava)
- Answer: Lost volume in Apr-May cannot be recovered; June run-rate strong but full-year impact remains. Value growth ~30% YoY offsets volume shortfall. (Devendra Surana)
- Question: Sustainability of 5.43% EBITDA margin and ₹72/kg EBITDA? (Naman Parmar, Disha C)
- Answer: Disruption-driven shortage allowed premium pricing across all products. Normalized margin guidance 5-5.5%; 5.5% full-year difficult. No inventory gains. (Devendra Surana)
Value-Added Product Strategy
- Question: Contribution from new tin-coated and data center products? (Disha C)
- Answer: ~250 tons tin-coated (all data center); ~600 tons total data center bus bars estimated. Transformer products (CTC, enamelled wire) seeing large dispatches. (Devendra Surana)
- Question: Optimal value-added vs commodity mix target? (Disha C)
- Answer: Gradual increase to 68-69% over 3-4 years from current 63%; not sacrificing commodity base. (Devendra Surana)
- Question: Margin profile by segment? (Ankit Gupta)
- Answer: Auto/switchgear: double-digit margins (highest value addition, complex processes). Transformer winding: single digit. Bus bars: single digit with wide range by application. Highest growth in transformer/motor and bus bars. (Devendra Surana)
Capacity & Expansion
- Question: 10,000 ton expansion timeline? (Ajit Sethi)
- Answer: Target April-June FY28 (likely June); taking capacity from 35,000 to 45,000 MTPA. (Devendra Surana)
- Question: CTC wire capacity and customers? (Moderator)
- Answer: Current 80 MT/month → 150 MT/month. Added 48-conductor capability (from 28). Customers: Crompton Greaves, Atlanta, TMCs, 50+ transformer/motor clients mainly in Chennai. (Advait Surana)
Restructuring & Value Unlocking
- Question: Value unlocking from demerger? (Moderator)
- Answer: Current valuation reflects only copper business. Real estate parcels (3 industrial lands in city center + windmill) will be separately valued post-demerger = total value unlocking. (Devendra Surana)
Green Copper & Certifications
- Question: Certified Green Copper Supplier premium potential? (Prateek Shrivastava)
- Answer: Qualify as green copper (solar power, recycled input) but no market traction/premium currently. EPR regulations in 1-2 years may add tailwinds. Not tweaking business model. (Devendra Surana)
Funding & Debt
- Question: Fundraise timeline and debt projection? (Ajit Sethi, Manan Vandur)
- Answer: ₹52 cr tranche 1 finalized (August 2026); tranche 2
March 2027 post-demerger. FY30 debt projected ₹300-350 cr (₹325 cr); cash flows from 5% EBITDA sufficient. (Devendra Surana, Surendra Bhutoria)
**Competitive Moat