Bhagyanagar India Limited — Q2 FY26 earnings call

Call held 13 Nov 2025

Management summary

Bhagyanagar India Limited reported strong H1 FY26 results with significant growth in revenue, EBITDA, and PAT, driven by a strategic shift towards higher-margin value-added products and favorable customs duty changes. The company is pursuing capacity expansion, including new recycling initiatives for plastic and lead, and plans to raise ₹100-150 crores in equity to support growth. Management expressed confidence in sustaining EBITDA margins around 4% and achieving a ₹5,000 crore turnover target within 7-8 years, capitalizing on robust copper demand drivers.

Highlights

  • Significant revenue growth in H1 FY26 to ₹1065 crores from ₹777 crores in H1 FY25, a 37.06% YoY increase.

  • EBITDA more than doubled to ₹41.39 crores in H1 FY26 from ₹14.83 crores in H1 FY25, representing 179.09% YoY growth.

  • EBITDA margin expanded substantially to 3.88% in H1 FY26 from 1.92% in H1 FY25, driven by focus on value-added products and customs duty removal on copper scrap.

  • PAT increased from ₹7 crores to ₹25 crores in H1 FY26, a 257.14% YoY growth.

  • Volume growth in H1 FY26 to 12,400 metric tons from 8,955 metric tons in H1 FY25, a 38.46% YoY increase.

  • Aspirational target of ₹5,000 crores turnover in 7-8 years, with 20% annual growth in copper demand.

Concerns

  • Increasing raw material prices lead to higher working capital requirements, though prices are passed through to customers.

  • Potential for market fluctuations in copper prices, though largely mitigated by hedging and pass-through mechanisms.

Key financials

2 periods

Headline

  • Value-added Product Mix
    60%

H1

  • Revenue
    ₹1,065 Cr
    YoY +37.1%
  • EBITDA
    ₹41.39 Cr
    YoY +179.1%
  • EBITDA Margin
    3.9%
  • PAT
    ₹25 Cr
    YoY +257.1%
  • Volume
    12,400 metric tons
    YoY +38.5%

What they filed

Q1 FY27: revenue down 15.7%, net profit down 81.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue3 0 1 2 2 −10%1 +131%1 −11%2 −16%
EBITDA1 -0 0 -1 2 +133%0 +171%1 +833%0 +104%
Net profit0 0 1 1 1 +207%0 −70%0 −87%0 −82%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

high confidence
  • Capex ₹15 Cr Historically through internal accruals and very minor bank loans. Looking at fundraising for new plans (plastic and lead recycling).
    • Adding more value-added products and increasing capacity of value-added products
    • Plastic recycling ₹3 Cr
    • Growth capex ₹7 Cr
    So far, all our capex over the last few years, in fact, from 2014, we were at around 300 crores, and now, this year, we are targeting 2,000 crores are, through internal accruals. So far, all our CapEx has been through internal accruals and very minor amount of loans from the banks. We are looking at some fundraising in the near future, especially when we are looking at the new plans of plastic and lead recycling. So, we'll be looking at some, raising of funds for that.
  • Debt Debt disclosed Cost 7.8%
    What we are looking at is, at the current capital, you rightly said, our current debt is optimal. Anything more will require further, equity raise. ... The long-term loans are hardly going to be a maximum of 20 crores. Which is, like, 0.1 is to 1. The long-term debt is always going to be very low. It is only working capital which is backed with both stocks and debtors. ... Typically, less than 9%. ... If you see the marginal cost of debt is about 7.75%.
  • Liquidity Liquidity disclosed Company is looking to raise equity of ₹100-150 crores to support new projects and growth.
    So, we are looking at the market, and we are talking to investment bankers, so the, ballpark figure is between 100 and 150 crores of equity raise.

Guidance & targets

Turnover

  • Turnover Turnover · next 7 to 8 years · High confidence ₹5,000 crores
    Furthermore, we have an aspirational target to reach 5,000 crores turnover in the next 7 to 8 years.

    — Bhagyanagar India Limited

Profitability

  • EBITDA Margin Profitability · next few years · High confidence close to 4%
    We are looking at sustaining our EBITDA margin at close to 4% over the next few years.

    — Bhagyanagar India Limited

Volume

  • Overall Capacity Volume · immediately · High confidence additional 5,000 tons
    So immediately, we are looking at only an additional 5,000 tons in terms of the overall capacity.

    — Bhagyanagar India Limited

Value-added Product Mix

  • Value-added products as % of volume Value-added Product Mix · Medium confidence up to 75%
    So we are increasing the capacity there so that we can reach up to 75% of the volume in terms of value-added products.

    — Bhagyanagar India Limited

  • Value-added products as % of revenue Value-added Product Mix · next 3 years · High confidence 70%

    Previously 60% → 70%

    So right now, we are at 60%. We are hoping to reach 70% in the next 3 years.

    — Bhagyanagar India Limited

Volume Growth

  • Copper Growth (Company) Volume Growth · every year, year on year, compounded · High confidence roughly about 20%
    going forward, we are looking at roughly about 20% growth every year, year on year, compounded.

    — Bhagyanagar India Limited

  • Indian Copper Demand Growth Volume Growth · every year · High confidence 12-14%
    So we expect the Indian demand of copper to grow at roughly about 12-14% every year.

    — Bhagyanagar India Limited

New Projects

  • Plastic Recycling Plant Live New Projects · Q1 FY27 · High confidence first quarter of next year
    As far as our plastic recycling is concerned, we are looking at getting it live in the first quarter of next year.

    — Bhagyanagar India Limited

  • Lead Recycling Plant Live New Projects · FY27 · High confidence by end of FY27
    The lead recycling is still on the, drawing boards. We are still making the, total detailed working. We are not expect... we are expecting that to come only by end of, FY27.

    — Bhagyanagar India Limited

Capex

  • Capex Capex · FY27 · High confidence ₹30 crores
    for this financial year, we'll be doing roughly about 15 crores of capex, that is FY26, and we are targeting 30 crores for FY327.

    — Bhagyanagar India Limited

What to watch in Q3 FY26

Equity raise for new recycling projects

Near future
Current Discussions with investment bankers for ₹100-150 crores
Target Announcement of equity raise

Why it matters

Securing funding is crucial for the planned plastic and lead recycling projects and overall growth initiatives.

we are looking at the market, and we are talking to investment bankers, so the, ballpark figure is between 100 and 150 crores of equity raise.

Risks & concerns

  • Increased working capital requirements due to rising raw material prices

    medium

    While raw material price increases are passed through to customers, they necessitate higher working capital, impacting financing needs.

    Management acknowledged

  • Market fluctuations in copper prices

    low

    Copper price volatility is managed through hedging on exchanges (COMEX, LME, MCX) and an automatic pass-through mechanism to customers.

    Management acknowledged

Q&A highlights

8 direct
EBITDA margin sustainability and drivers Direct
The majority of the price gain has happened because of our shift to higher value-added products, and a certain small amount of value gain also has come in because the customs duty on copper scrap has been removed from January 31st of this year in the budget last year. So our imports have suffered a lower customs duty. Part of that saving has been added into our EBITDA margin.

Explains the significant margin expansion and confirms sustainability due to structural changes (value-added products, customs duty removal).

Asked by Agastya Dave

Volume growth and CapEx plans Direct
the volume in metric tons of the first half has been 12,400 metric tons, as against 8,955 metric tons in the previous year. ... So immediately, we are looking at only an additional 5,000 tons in terms of the overall capacity. Our majority of the capex right now will be going into adding more value-added products and increasing the capacity of the value-added products.

Provides specific volume growth numbers and clarifies immediate capacity expansion focus on value-added products.

Asked by Agastya Dave

Long-term growth target and short-term growth Direct
we are hoping to at least replicate the first half in the second half. For this year. And, going forward, we are looking at roughly about 20% growth every year, year on year, compounded.

Gives a clear short-term and long-term growth outlook for the company, indicating confidence in sustained expansion.

Asked by Darshil Jhaveri

Value-added product margins and real estate assets Direct
the margins in OEMs range between 6 and 12%. ... We are quite happy with maintaining 4%, and maybe look at getting it slowly upwards in small decimal points to 4.5% or so. ... the circle rate of that will be around 200 to 250 crores.

Provides insight into margin potential for value-added products and reveals significant value in real estate assets, which might be monetized through restructuring.

Asked by Darshil Jhaveri

Handling copper price fluctuations Direct
we hedge our positions on, all the three exchanges, COMEX, LME, and MCX. ... the price of copper is always put LME plus so-and-so. So, whenever we purchase and sell, the automatic pass-through mechanism is there, both in our purchases as well as in our sales. And we really don't have long-term contracts of sales over 3 months or 6 months like that, on a fixed price.

Explains the company's strategy to mitigate commodity price risk through hedging and pass-through mechanisms, assuring investors about price volatility management.

Asked by Mayur M

CAPEX funding and new recycling plant timelines Direct
So far, all our CapEx has been through internal accruals and very minor amount of loans from the banks. We are looking at some fundraising in the near future, especially when we are looking at the new plans of plastic and lead recycling. ... As far as our plastic recycling is concerned, we are looking at getting it live in the first quarter of next year. The lead recycling is still on the, drawing boards. ... we are expecting that to come only by end of, FY27.

Details funding strategy for future capex and provides clear timelines for new, potentially high-margin recycling ventures.

Asked by Prateek Shrivastava

Rationale for plastic and lead recycling, and margin impact Direct
when we import copper scrap, we basically import it in the form of cables. So, already we, handle roughly about 600 to 700 tons of plastics, which comes as part of the copper scrap which we import. ... This is our margin decorative. Copper, being the highest value, has the lowest margin in terms of percentages. The lower value, products will always have a higher EBITDA margin, per se.

Explains the synergistic rationale for entering new recycling businesses and highlights their potential for higher EBITDA margins.

Asked by Prateek Shrivastava

Working capital requirements and debt comfort level Direct
What we are looking at is, at the current capital, you rightly said, our current debt is optimal. Anything more will require further, equity raise. ... So we are comfortable with 2 is to 1.

Clarifies the company's stance on debt levels, indicating a need for equity raise for further growth and confirming a comfortable debt-to-equity ratio for working capital.

Asked by Agastya Dave

3 min read 6 chapters

Detailed narrative

Strong H1 FY26 Performance Driven by Value-Added Products

Bhagyanagar India Limited reported robust financial performance for H1 FY26, with revenue increasing to ₹1065 crores from ₹777 crores in H1 FY25, representing a 37.06% YoY growth. EBITDA more than doubled from ₹14.83 crores to ₹41.39 crores, leading to a significant EBITDA margin expansion from 1.92% to 3.88%. This improvement was primarily attributed to a strategic shift towards higher-margin value-added products and the removal of customs duty on copper scrap since January 31st of the previous year. PAT also saw substantial growth, rising from ₹7 crores to ₹25 crores.

Strategic Focus on Value-Added Products and Capacity Expansion

The company's sales from value-added products currently constitute approximately 60% of total sales, with a target to increase this to 70% in the next 3 years and eventually up to 75% of volume. To support this, Bhagyanagar India is planning an additional 5,000 tons in overall capacity, with the majority of current capex directed towards enhancing value-added product capabilities. The company aims to achieve a ₹5,000 crore turnover within the next 7-8 years, driven by a compounded annual growth rate of approximately 20%.

Entry into Plastic and Lead Recycling with Higher Margin Potential

Bhagyanagar India is diversifying into plastic and lead recycling, leveraging its existing infrastructure and international sourcing networks for copper scrap, which already includes plastic components. The plastic recycling plant is expected to go live in Q1 of the next financial year (FY27), while the lead recycling project is currently in the planning stages, targeting commissioning by the end of FY27. These new ventures are anticipated to be 'margin decorative,' as lower-value products like plastic and lead recycling typically yield higher EBITDA margins compared to copper.

Capital Expenditure and Funding Plans

The company's planned capital expenditure for FY26 is approximately ₹15 crores, increasing to ₹30 crores for FY27. Historically, capex has been funded through internal accruals and minor bank loans. For the upcoming plastic and lead recycling projects, the company is exploring fundraising options, including a potential equity raise of ₹100-150 crores, as current debt levels are considered optimal. The company maintains a comfortable debt-to-equity ratio of 2:1 for working capital, with long-term debt remaining very low (max ₹20 crores).

Mitigation of Commodity Price Volatility

To manage the inherent volatility in copper prices, Bhagyanagar India employs a comprehensive hedging strategy across major exchanges (COMEX, LME, MCX). Additionally, the company operates on an automatic pass-through mechanism for both purchase and sale prices, linking them to LME rates, and avoids long-term fixed-price contracts. This approach ensures that fluctuations in raw material costs are directly reflected in sales prices, minimizing exposure to market swings.

Optimistic Outlook on Copper Demand and Market Position

Management is bullish on the growth of copper, projecting Indian demand to grow at 12-14% annually, double the GDP growth rate. Key drivers include green energy (solar and wind requiring 3.5x more copper), electric vehicles (4x more copper per car), and AI (estimated to increase global power demand by over 10%, translating to additional copper demand). The company emphasizes its 40-year legacy of uninterrupted profits and no payment defaults, positioning itself well to capitalize on these growth opportunities.

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