Bhagyanagar India Limited

Bhagyanagar India Limited reported a strong financial performance for the nine months ended December 31, 2025. The company achieved a turnover of ₹1643 crores, marking a significant 40% year-on-year increase compared to the same period in the previous fiscal year. EBITDA for the nine-month period stood at ₹69.98 crores, demonstrating a robust 172% growth. The EBITDA margin for the nine months was 4.26%, which is double the margin from the previous year, with the third quarter alone reaching an EBITDA margin of 4.9%. Profit After Tax (PAT) for the nine months was ₹31.68 crores, noted as one of the highest operational PATs achieved by the company.

The company has an ambitious strategic vision, preponing its target of achieving a ₹5,000 crore turnover for its copper business to FY28-29, from the earlier target of 2030. This acceleration is driven by strong market demand. In terms of capacity, Bhagyanagar India is undergoing further expansion and expects to reach a total installed capacity of 35,000 metric tons per annum by the end of February 2026, up from 30,000 metric tons. This expansion is crucial for meeting the anticipated growth in demand for copper products.

Bhagyanagar India is actively diversifying its product portfolio and investing in innovation. Key new areas include tin and silver-plated copper bus bars for AI data centers, which are primarily exported to the US and other countries. The company has also expanded its solar wires production, including solar interconnect wires. Furthermore, the company is venturing into plastic recycling, aiming to increase its processing volume from 150 tons to 500 tons by next year, with plans to produce PVC granules and implement pyrolysis for alternative fuel generation.

A significant strategic move is the planned de-merger of the company into two entities. The core copper business will be demerged into a new company named Tieramaet Limited, focusing solely on copper growth. The original entity, Bhagyanagar India, will retain land parcels and wind energy assets, with a book value of approximately ₹30 crores and zero debt. The company holds three industrial land parcels in Hyderabad, with one prime location expected to generate significant value through residential development, potentially yielding 4 lakh square feet without further investment via a joint development agreement expected by March.

Management expressed strong optimism about the copper market, citing AI, Electric Vehicles (EVs), and green energy as the three major growth drivers for the next 10-15 years. Green energy requires 3.5 times more copper than conventional energy, and EVs require 4 times more copper per vehicle. The company is well-positioned to capitalize on this demand due to its global copper scrap sourcing network and established customer base of 500 OEMs. The company also highlighted its alignment with ESG principles through its scrap recycling and circular economy model.

To enhance operational efficiency and reduce costs, Bhagyanagar India has installed state-of-the-art heat recovery systems on its furnaces. These systems are expected to reduce cycle times and significantly decrease fuel costs, leading to improved efficiencies. The company's integrated operations, from scrap to finished product, provide a competitive edge, particularly in the export market for specialized products like silver-bearing bus bars for data centers.

While the company faces competition primarily from local players, it does not see significant international competition, especially from China, in copper products. Management acknowledged that its valuation does not currently match peers like Jain Resource Recycling. This discrepancy is attributed to Bhagyanagar's higher working capital cycle and lower return on capital employed, stemming from the need to provide credit for value-added products, which extends the cycle and increases capital employed.