Hi-Green Carbon — Q2 FY26 earnings call

In the last half year, we almost achieved 8,000 metric tons of processing in our Rajasthan plant. It has a capacity of 8,300 metric tons. And 9,000 metric tons in the Dhule plant. So, we achieved better utilization at our new plant. As far as revenue is concerned, around 60% revenue comes from our Rajasthan plant because there is full capacity utilization of rCB and revenue from syngas also. Around 35% to 40% revenue comes from our Dhule and Maharashtra plants.

Provides specific operational and revenue breakdown by plant, indicating higher utilization at the newer Dhule plant.

Asked by Yash Purbhe

One is that there was pressure on prices. Constantly, prices were dropping, and simultaneously raw material prices were also coming down. But since we were holding inventory, the higher-priced inventory had to be sold at a lower price. This situation has now bottomed out, so it created pressure on the top line, and now the situation is at the bottom. From here, we expect good growth. The second thing is margin pressure due to the overhead of the third plant, which is supposed to commence. Last year, there was pressure from the second plant. Now there is some pressure from the third plant. This will get neutralized once the third plant starts operating. And the third thing is that in the last half year, we did a lot of R&D for power generation. Almost 80-90 lakh was consumed as consumables and spares for this R&D, which has been claimed in other expenses.

Explains the multiple factors contributing to margin compression, including external price pressures, inventory effects, new plant overheads, and R&D expenses, with an expectation of bottoming out.

Asked by Jatin Agrawal

In the Rajasthan plant, we are almost crossing 75-80% utilization, which is equivalent to the pyrolysis plant of Rajasthan. But in Maharashtra, the pyrolysis plant is utilizing 75%, while the rCB capacity is around 30%. As I mentioned in our last call, rCB is a critical product—we need to approach new customers, convince them, they need to take a trial at lab scale, then at product level, and finally validation at their customer end. So, it's a lengthy process, but it is going on. We started from zero last year and now achieved 30% utilization, and it is increasing day by day.

Highlights the slower ramp-up for rCB due to the extensive customer validation and certification processes required, especially for the auto sector, contrasting with higher pyrolysis utilization.

Asked by Nikunj Devpura

First of all, we want to reduce sister concern transactions and remove the doubts in the minds of minority shareholders that we are transferring profit to our parent company. It was not like that, but still, we want to be more transparent, so that's why we transferred all this business of manufacturing machinery for our future expansion to Hi-Green itself and side by side, as a surplus or bonus, all the business of Radhe Renewables—apart from this machinery manufacturing for Hi-Green—along with all infrastructure, we are transferring to Hi-Green at a nominal rent. It is a token amount of rent per month, without any capex or without any transfer of shares, machinery, or any investment from Hi-Green's side. So, there is no burden on Hi-Green for capex for manufacturing machinery for itself, as well as for adding the business of Radhe Renewables into the hands of Hi-Green. So, there will be dual benefit-saving in capex and getting the revenue of Radhe in our portfolio.

Clarifies the strategic and financial benefits of the Radhe Renewables consolidation, emphasizing transparency, capex savings, and revenue addition without equity dilution.

Asked by Khush Shah

As far as pricing is concerned-in September last year, TPO prices were around 44-45. Now the prices have touched ₹34, and are currently settled near ₹36–38. So, in the last year, we have seen a fall of almost 10 in TPO prices. Because of that, our top line increased only marginally-otherwise it would have crossed almost ₹80 crore in the current year... It all depends on refinery LDO prices. LDO has also come down, but compared to that, TPO had a little more effect. Particularly in the first half of every year, due to monsoon and slowdown in road construction, TPO gets affected more. Now construction of bitumen roads has ramped up. There are also developments for TPO because, being a sustainable product, some carbon companies and even refineries are exploring use of TPO in their bitumen. But it is too early to comment. We hope that, being a sustainable and recycled fuel, TPO will have a good future.

Provides context on TPO price volatility, its impact on H1 revenue, and the long-term outlook driven by LDO prices and increasing demand for sustainable products in bitumen.

Asked by Anshul Shah

Whatever realization comes will be in the form of savings in electricity bills and a few kilowatts being sold to the grid. But the concern is not realization alone. As we discussed earlier, we need multiple options to use syngas. In remote states or globally, the market for sodium silicate may not be available everywhere. So, at such places, we need an alternative solution. That's why we are focusing on electricity—because we need electricity in-house and we can feed surplus to the grid. It may not be at par with sodium silicate, but we need another viable option. That's why we are choosing this path in the Maharashtra plant.

Explains the strategic diversification of syngas utilization, prioritizing electricity generation for in-house consumption and grid sale to ensure viability in diverse markets where sodium silicate demand might be limited.

Asked by Anshul Shah

For EPR, as I said, our raw material is something like crumb rubber-rubber chips. So, we believe that our suppliers who are sourcing tires, either importing or locally purchasing, are the ones generating EPR on that. So, in Hi-Green, we avoid generating EPR... But frankly speaking, from the beginning, I'm not against EPR, but I am also not highly positive about it, because EPR is not revenue to be kept in the recycler's pocket. It is to be passed on to the people who collect tires—to incentivize them to supply tires to the organized industry... Initially, people were saying EPR would be sold at 7 or 8. But you can verify that there is hardly any demand for EPR, and the price is in the range of ₹1 to 1.25. So EPR is nothing significant-you cannot add EPR into your bottom line.

Clarifies management's perspective that EPR credits are not a significant direct revenue or profit driver for the company, as they are primarily passed through to incentivize the organized collection of waste tires.

Asked by Pranav

Two months—two months would be the timeframe they have given us, as an estimate. And the lowest amount would be around 5 to 7 crores. We have enough insurance cover, so hopefully, the net loss will be minimal.

Provides an estimated timeline for the resolution of the insurance claim and the resumption of operations, indicating a minimal net financial impact due to comprehensive insurance coverage.

Asked by Harshil Sutaria