Metrics cut 2
- Revenue guidance withdrawn - management declined to provide specific numbers
- Volume guidance withdrawn - management stated that giving growth percentage guidance would be premature due to international disturbances
Event Participants
Executives
4
- Hermant Jain, Executive Director & CFO
- Kamlesh Jain, Chairman & Managing Director
- Mayank Pareek, Joint Managing Director
- Sanchit Jain, Executive Director
Analysts
8
- Abhishek Mehra, DAM Capital Advisors
- Darshil Jhaveri, Crown Capital
- Disha Choudhary, Torenia Asset Managers
- Dowish Sajnani, Equity Analyst
- Krishnan Thampi, Hedge Equities
- Pawan Kumar, Global Concilient Research
- Priyanshu Jain, Investec
- Raj Shah, Fident AMC
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹2,724 crores | +76% YoY from ₹1,549 crores in Q1 FY26; driven by strong copper volume growth and initial contribution from value-added copper portfolio |
| EBITDA | ₹109 crores | +22% YoY from ₹90 crores in Q1 FY26; margin moderation due to product mix shift and ramp-up of value-added copper business |
| EBITDA Margin | 4.0% | Down from 5.8% YoY; improved 48 bps sequentially from 3.5% in Q4 FY26 |
| PAT | ₹69 crores | +23% YoY from ₹56 crores in Q1 FY26; PAT margin at 2.5% vs 3.6% YoY |
| Revenue Mix - Copper | 67% | Up from 55% in FY26; reflects strong copper volume growth and initial value-added product contribution |
| Revenue Mix - Lead | 29% | Lead and lead alloy ingots share of consolidated revenue |
| Revenue Mix - Aluminum | 3% | Aluminum and aluminum alloys contribution |
| ROE | 22.8% | As of June 2026 |
| ROCE | 21.4% | As of June 2026 |
| Inventory Days | ~55 days | As of June 2026 |
| Debtor Days | ~19 days | As of June 2026 |
| Creditor Days | ~14 days | As of June 2026 |
| Working Capital Cycle | ~60 days | Inventory + debtors - creditors |
| FY27 Capex Guidance | ~₹87 crores | Directed towards copper value-added projects, antimony project, and plastic recycling facilities |
| Copper EBITDA per ton | ~₹31,000-32,000 | Down from ~₹36,000 annual average in FY26; management attributes to business cycle timing rather than structural decline |
Geographic & Segment Commentary
Copper & Copper Products: Largest revenue contributor at 67% of consolidated revenue (up from 55% in FY26). Strong volume growth driven by commissioning of copper anode facility (1,600 MT/month installed capacity) with ~600 tons sold since commissioning. Copper cathode project (1,500 MT/month) on track for Q2 FY27 commissioning; wire rod (600 MT/month) and busbar/profiles (1,500 MT/month) expected Q3 FY27. Management expects value-added products to add ~2% to copper EBITDA margins and ~₹25,000-30,000 per ton once stabilized.
Lead & Lead Alloy Ingots: Contributed 29% of revenue. FY26 volume was ~184,000 tons; capacity expansion of 15-20% underway pending approval. Margins compressed from peak of ~10% to ~7-7.5% due to raw material shortages from West Asia crisis requiring expensive local and spot imports. Management expects tin and molybdenum extraction from lead to enhance value recovery; furnace incident at Gummidipoondi expected to have minimal production impact given spare capacity.
Aluminum & Other Activities: Contributed 3% of revenue; strategic focus remains on copper and lead core recycling operations.
Company-Specific & Strategic Commentary
Export Diversification & Strategic Investments: Trial production commenced at Ahmedabad JV with C&Y Group Investment Incorporation (72,000 tons copper-bearing scrap processing capacity; ~25,000 tons copper products annually). Kuwait strategic investment implementation continues despite machinery shipment delays from West Asia crisis; expected to contribute from Q3 FY27; strategically important for raw material security and regional presence.
New Business Diversification: Shareholders approved entry into telecom infrastructure business. Strategic rationale: company already participates in removing redundant underground copper cables; new object clause enables participation in optical fiber cable replacement contracts, creating an incidental new line of business adjacent to core recycling operations.
Regulatory Tailwinds: Recent amendment to Hazardous Waste Management Rules mandates copper, aluminum, and zinc manufacturers to use 5% recycled content starting FY28 (rising to 10% subsequently). Also requires collection of end-of-life items by producers for recycling through registered recyclers. Expected to increase domestic scrap availability and demand for recycled products.
Raw Material Sourcing Shift: India sourcing has increased substantially due to West Asia crisis, developing a large local sourcing network. Management views this as a "blessing in disguise" - expects pent-up scrap from Kuwait, Saudi Arabia, and Middle East to flow once crisis settles, with alternate ports opening.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Capex | ~₹87 crores | Majority directed towards copper value-added projects, antimony project, plastic recycling facilities |
| Copper EBITDA per ton | +2% to existing margin via value-added products | Management guidance from Mayank Pareek; value-added products (cathode, busbar, profiles) to add approximately ₹25,000 per ton once stabilized |
| Lead Capacity | +15-20% expansion | Project near completion; approval pending |
| Anode Production | Ramp-up in Q2 FY27 | Both furnaces operational at 1,600 MT/month capacity; 600 tons sold in Q1 |
| Cathode Commissioning | Phase 1 in Q2 FY27 | 1,500 MT/month installed capacity; 750 tons/month initial phase approximately one month from readiness |
| Wire Rod & Busbar | Q3 FY27 commissioning | 600 MT/month and 1,500 MT/month respectively |
| Antimony Project | Q3 FY27 commissioning | 1,000 MT lead-antimony bullion processing; ~100 MT/month output |
| Plastic Recycling | Q3 FY27 operational | ~6 acres land finalized; ~₹15 crores investment; will relocate existing plastic recycling activities |
| Kuwait Investment | Contributing from Q3 FY27 | Subject to normalization of shipping conditions; machinery ready for dispatch |
| Revenue Guidance | No formal guidance | Management declined to provide specific numbers; reiterated "company is on the right track of growth" |
Risks & Constraints
| Risk | Context |
|---|---|
| West Asia Crisis / Supply Chain Disruption | Raw material shipments stuck at Dubai port (~₹20-30 crores worth in vessels); management states fully insured against war risk. Machinery for Kuwait project delayed; alternate ports emerging. Management expects material flow to resume once crisis settles, with pent-up scrap from Middle East expected to boost volumes. Raw material shortages forced expensive local sourcing, compressing lead margins. |
| Furnace Incident (Gummidipoondi Unit 2) | Furnace accident on July 14, 2026 resulted in one fatality and injuries to workers. Operations resumed July 27 after corrective actions. Management expects no material production impact given spare capacity; insurance claim under settlement expected to recover "substantially the full extent of the damage." |
| Margin Compression | EBITDA margins down from 5.8% to 4.0% YoY; copper EBITDA per ton down from ~₹36,000 to ~₹31,000. Management attributes to business cycle timing (6-month material procurement-to-sale cycle), product mix evolution, and ramp-up costs of value-added facilities. Q4 FY26 margin of 3.5% was not "bad" but a timing effect of the business cycle. |
| Execution Risk on Multiple Projects | Five simultaneous projects (anode, cathode, wire rod, busbar, antimony, plastic, JV, Kuwait) with regulatory approvals (MOEF, State Government, Commissioner) causing timeline delays. Management highlights 15-month timeline from construction to trial production; execution momentum intact despite external logistics disruptions. |
| Competitive Intensity | Management acknowledges competition will increase with recycled content mandates; positioning strategy includes value-added products and scaled operations. "Competition always welcome" - brings efficiency and better ecosystem. |
Q&A Highlights
Copper & Lead Margin Trajectory
- Question: How will EBITDA margins move in lead (currently ~7.5%) and copper (improving to 2.5%) over next three quarters and FY27? (Raj Shah, Fident AMC)
- Answer: Margin compression is a function of raw material crisis and expensive local sourcing, not structural decline. Value-added copper products, tin and molybdenum extraction from lead will offset margin fall. "This year there will be improvement in EBITDA margin" as production streamlines by end Q2/beginning Q3. Value-added products to add
2% to copper margins (₹25,000 per ton) once stabilized. (Kamlesh Jain, Mayank Pareek)
Volume Guidance for Lead & Copper
- Question: What is volume guidance for lead and copper for FY27 and FY28? Will furnace incident impact lead volumes? (Abhishek Mehra, DAM Capital)
- Answer: Furnace incident impact minimal - spares capacity and expansion covers one-week shutdown; part of regular maintenance. Lead capacity expanding 15-20% pending approval. No formal volume guidance - "giving guidance on percentage of growth would be slightly premature" given international disturbances. Volumes will increase, with value addition in copper products in the later part of the year. (Kamlesh Jain, Mayank Pareek)
Copper Value-Added Ramp-Up
- Question: What is anode volume this quarter and EBITDA per ton guidance for value-added segment? (Abhishek Mehra, DAM Capital)
- Answer: ~600 metric tons anode produced in Q1 (close to 1,000 including initial trial quantities per Mayank; ~600 per Hermant); both furnaces operational. EBITDA contribution minimal in Q1 due to stabilization. Value-added segment to add ~2% to copper margin on value-added plant volume when at full swing (blended cathode, busbar, profiles sales). (Mayank Pareek, Hermant Jain)
Recycled Content Mandate Impact
- Question: How will FY28 recycled content mandate affect pricing power vs volumes? Have customers been engaged? (Disha Choudhary, Torenia Asset Managers)
- Answer: Hazardous Waste Management Rules amendment mandates 5% recycled content in copper, aluminum, zinc products starting FY28 (rising to 10%). Also requires producers to collect end-of-life items for recycling through registered recyclers. Impact: both higher volumes (domestic scrap into organized recycling) and some margin benefit (higher demand for recycled products). Quantification difficult until enforcement begins. (Mayank Pareek)
Margin Sustainability & Business Model
- Question: Margins have suffered last two quarters - what is FY28 target? (Darshil Jhaveri, Crown Capital)
- Answer: Management strongly pushed back on "wrong perception" - business operates on 6-month cycles (procurement → shipping → production → sale), so quarterly margins fluctuate with hedging timing. "You have to always see two-quarter combined result" - averaging aligns with annual performance. Company historically has flat and then doubling years; 3-year average CAGR 40-50%. Expansion projects (15-month timeline from construction to trial) will drive growth in FY27-FY28. Multiple confidential expansion strategies underway. (Kamlesh Jain)
Hedging Policy & Working Capital
- Question: Are we still on full hedging policy and how does it impact margins? (Krishnan Thampi, Hedge Equities)
- Answer: No change in hedging policy - 100% hedge model, no speculation. Hedging is "not a cost center" but a tool to protect margins in a high-volume, lower-margin business. LME broker limits exceed $30 million covering M2M variation margins, plus bank guarantees; "most of the time we don't have locked cash." Working capital cycle at ~60 days (inventory 55, debtors 19, creditors -14). (Kamlesh Jain, Hermant Jain)
Telecom Infrastructure Diversification
- Question: Strategic rationale for entering telecom infrastructure business? Revenue and margin expectations? (Pawan Kumar, Global Concilient Research)
- Answer: Company already participates in removing redundant underground copper cables for telecom companies; new object clause enables participation in auctions where redundant copper cables are replaced with optical fiber cables. Laying optical fiber is "incidental to our existing activities." Potential exists but "how it will go we have still to work out" - no revenue or margin guidance provided. (Mayank Pareek)
West Asia Raw Material Impact
- Question: Update on raw material stuck at Dubai port and incident impact on volumes? (Dowish Sajnani, Equity Analyst)
- Answer: ~₹20-30 crores of material stuck in vessels at sea; no detention or damage cost to company as vessels are insured against war. If material not received within certain period, insurance company will pay entire amount - "complete coverage, no risk for us." Furnace incident stopped ~10 days production but spare capacity and lead expansion covers impact - no longer-term production impact. (Kamlesh Jain)
Key Takeaway
Jain Resource Recycling delivered strong Q1 FY27 results with revenue at ₹2,724 crores (+76% YoY) driven by copper volume growth and initial value-added product contributions, though EBITDA margin compressed to 4.0% from 5.8% YoY (up 48 bps sequentially) due to product mix evolution, ramp-up costs, and raw material sourcing challenges from the West Asia crisis. The company is executing a multi-project value-addition strategy - copper anode commissioned (1,600 MT/month, ~600 tons sold), cathode (1,500 MT/month) and wire rod/busbar projects progressing on schedule for Q2-Q3 FY27 commissioning, alongside antimony extraction and a plastic recycling facility - positioning copper as the dominant growth engine at 67% of revenue. Management steered away from formal guidance, emphasizing the cyclical nature of quarterly margins tied to a 6-month procurement-to-sale cycle, and highlighted structural tailwinds from recycled content mandates (5% from FY28 rising to 10%) and growing domestic scrap availability. Key watch points include normalization of West Asia supply chains (₹20-30 crores of insured material still stuck), successful ramp-up of value-added copper to deliver the guided ~2% margin accretion, and execution across five simultaneous greenfield projects with regulatory approval dependencies.