Hi-Green Carbon

For the first half of FY26, Hi-Green Carbon reported a consolidated turnover of ₹69 crores and a standalone turnover of ₹59 crores. The company achieved a capacity utilization of 75-76% across its Rajasthan and Maharashtra plants, processing a total of 17,400 metric tons of waste tire. The Rajasthan plant contributed approximately 60% of the total revenue, while the Dhule and Maharashtra plants accounted for 35-40%.

Operating margins compressed to 15% in H1 FY26 from 20% in the previous period. This decline was primarily attributed to pressure on TPO prices, which fell from ₹44-45 to ₹36-38, and the sale of higher-priced inventory at lower market rates. Additionally, overheads associated with the upcoming third plant and significant R&D expenses of ₹0.8-0.9 crores for power generation contributed to the margin pressure. Management expects the situation to have bottomed out and anticipates good growth ahead.

The company's third plant in Madhya Pradesh is nearing completion, with 90-95% of the erection work finished. Remaining tasks include electrical panel synchronization and plumbing, expected to be concluded by end-December. Production is slated to commence by mid-January. The total cost for a new plant is approximately ₹50 crores, comprising ₹5-7 crores for land, ₹5-7 crores for building and infrastructure, ₹25 crores for the pyrolysis plant, and the remainder for rCB and ancillary facilities.

Hi-Green Carbon has consolidated the business of Radhe Renewables, acquiring all know-how, patents, and intellectual property for a token amount of ₹1. The factory will be leased for ₹1 lakh per month. This strategic move aims to enhance transparency, eliminate sister concern transactions, and integrate Radhe Renewables' manufacturing capabilities for future expansion without additional capital expenditure, thereby providing dual benefits of capex savings and revenue addition.

While pyrolysis plants in Rajasthan and Maharashtra operate at 75-80% utilization, rCB capacity utilization at the Maharashtra plant stands at 30%. The ramp-up for rCB is a lengthy process, requiring extensive customer trials, product-level validation, and certifications like ISCC EU and IATF, particularly for the auto sector. Despite the challenges, the company has achieved 30% utilization in Maharashtra within six months, a faster pace than the initial Rajasthan plant, and is actively onboarding new customers.

The company has completed R&D for converting syngas into electricity at its Maharashtra Dhule plant. A gas engine has been ordered and is expected to be delivered and operational next month, aiming to achieve gas utilization and electricity conversion. This initiative provides an alternative to sodium silicate production, especially in regions with limited market availability, and will contribute to in-house electricity needs and grid sales. Additionally, the company is seeking approval to bottle and sell syngas as fuel for its MP plant.

Samsara Recycling experienced a fire incident on Diwali, but the damage is fully covered by insurance. Insurance surveys are complete, and the company anticipates receiving clearance to restart production within two months. The estimated lowest claim amount is ₹5-7 crores, with a minimal net loss expected. The plant's capacity is also being upgraded from 40 metric tons per day to 60-80 metric tons per day.

Management clarified that EPR credits are not a significant revenue stream for the company, as they are primarily passed on to tire collectors and customers to incentivize organized recycling, with prices ranging from ₹1 to ₹1.25. The pyrolysis market in India is undergoing a transition from unorganized batch-type reactors to organized continuous plants. The company views this as a positive shift, expecting no major competition as the industry moves towards more structured operations.