Lead Reclaim and Rubber Products Ltd — Q4 FY26 earnings call

Call held 18 May 2026

Management summary

Lead Reclaim and Rubber Products Limited reported a strong FY26 with significant growth in revenue, EBITDA, and PAT, driven by operational efficiencies and strategic investments in solar power and automation. The company is aggressively expanding capacity and diversifying into higher-margin verticals like Tyre pyrolysis, EPDM, and RCB. While H2 revenue saw a decline due to geographical factors, management expressed confidence in sustainable margins and future growth, targeting ₹190 crores revenue by 2029 with 15% PAT margins.

Highlights

  • FY26 Revenue of ₹39.82 crores, up 28% YoY, demonstrating strong growth.

  • FY26 EBITDA of ₹8.52 crores, growing 130%, with EBITDA margins improving to 22% (from 11-12% previously), driven by automation, efficient power control, and solar power initiatives.

  • FY26 PAT increased by over 180% to ₹4.09 crores, leading to a 150% EPS expansion.

  • Working capital days significantly reduced from 96 days to 60 days, improving cash flow from operations to ₹5.34 crores.

  • Successful preferential fundraising of ₹35.58 crores, reflecting investor confidence and enabling capacity expansion from 960 metric tons per month to 2400 metric tons per month.

Concerns

  • H2 FY26 revenue declined by 18% compared to H1 FY26 due to geographical effects and reduced exports.

  • Operationalization of TPO plant is dependent on government compliances, potentially delaying its December 2026 target.

Key financials

  1. Revenue ₹39.82 Cr +28%YoY
  2. EBITDA ₹8.52 Cr +130%YoY
  3. PAT ₹4.09 Cr +180%YoY
  4. EPS Expansion 1.5 decimal_fraction
  5. Working Capital Days 60 days
  6. ROCE 28%
  7. ROE 60%
  8. EBITDA Margin 22%
  9. PAT Margin 12%
  10. EPR Revenue ₹2.5 Cr
  11. EPR Profit ₹2 Cr

What they filed

Q4 FY26: revenue up 83.8%, net profit up 1247.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY23Q4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue5 4 5 10 9 +87%22 +471%22 +336%18 +84%
EBITDA1 0 1 1 1 +99%2 +425%3 +378%6 +438%
Net profit0 0 0 0 0 +11%1 +185%1 +607%3 +1248%
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.

Segment breakdown

  • Revenue Contribution by Product
    60% TPO and RCB20% EPDM30% Reclaim Rubber and Crumb Rubber

Capital allocation

medium confidence
  • Capex Capex disclosed Partially through preferential fundraising of ₹35.58 crores; additional funds will be required in 2028 for land construction.
    • Enhance manufacturing footprint and expand installation capacity from 960 MT/month to 2400 MT/month
    • EPDM Plant, Land, and Solar power plant
    • Land acquisition, construction, and increasing installed capacity as per Gujarat government approvals
    One of the key major milestones during the year was successfully preferential fundraising of 35.58 crore with participation of marquee investors and promoter groups, it's reflecting confidence in our long-term vision. This capital will be utilized to significantly enhance our manufacturing footprint and expand our installation capacity production for 960 metric tons per month to 2400 metric ton per month across all vertical post expansion. (Page 2) / For our CAPEX. For EPDM Plant and Land and Solar, etc. (Page 8) / Based on the current fundraising, we are focusing on land acquisition, construction, and increasing our installed capacity as per Gujarat government approvals. For the next phase in FY27 and FY28. We require some fundraising at that time. We require some funds, but currently we doesn't require more funds. (Page 4)
  • Debt Debt disclosed
    In the presentation, long-term borrowings have drastically increased. Why is it so? For our CAPEX. For EPDM Plant and Land and Solar, etc. (Page 8) / Internally sourcing for now. After 1 year we will go for debt. (Page 7)

Guidance & targets

Capacity

  • Installation Capacity Production Capacity · Post expansion · High confidence 2400 metric tons per month

    From 960 metric tons per month today

    This capital will be utilized to significantly enhance our manufacturing footprint and expand our installation capacity production for 960 metric tons per month to 2400 metric ton per month across all vertical post expansion.

    — Mr. Jayeshhh Patel

  • Total Capacity (after EPDM) Capacity · Post EPDM operationalization · High confidence 4200 metric tons

    From 1960 metric tons today

    Currently we get the license from the GPCB, which is the 1960 and then after we are going to start the EPDM, so it will be 4200, so drastically we are increasing our metric ton capacity from the government...

    — Mr. Jayeshhh Patel

Operational Timeline

  • EPDM Plant Operationalization Operational Timeline · 2026 · High confidence October 2026
    Maybe in operational, maybe October this year. (Page 4) / First of all, crumb rubber and EPDM, we are planning to operationalize before September-October. (Page 11)

    — Mr. Jayeshhh Patel

  • TPO and RCB Plant Operationalization Operational Timeline · 2026 · Medium confidence December 2026
    It will be operationally the December this year but it's dependent on the government compliances also. (Page 4) / TPO, subject to government compliances, we are trying to operationalize by December, otherwise by March depending on approvals. (Page 11)

    — Mr. Jayeshhh Patel

Revenue

  • Total Revenue Revenue · Medium confidence ₹180 crores
    And lastly, so just wanted to know on the guidance that you have given of 180 crores.

    — Mr. Jayeshhh Patel

  • Total Revenue Revenue · by 2029 · High confidence ₹190 crores
    Okay, so last question, So when you say the company can achieve around INR 190 crores of revenue by 2029, that is with around 15% PAT margins, right?

    — Manan Mandur (referencing company guidance)

Profitability

  • Overall PAT Margins Profitability · Projections · High confidence 12-15%
    Margins was near to 12 to 15% in the overall the projections. (Page 6) / Around 10% but we try to increase our PAT Margins. But 10-12% easily. (Page 10)

    — Mr. Jayeshhh Patel

  • PAT Margins Profitability · by 2029 · High confidence 15%
    Okay, so last question, So when you say the company can achieve around INR 190 crores of revenue by 2029, that is with around 15% PAT margins, right?

    — Manan Mandur (referencing company guidance)

Capacity Utilization

  • Capacity Utilization Rate Capacity Utilization · After capex · High confidence 60-75%

    From 45% today

    Currently, our capacity utilization is around 45%. After the capex, we expect utilization to increase to around 60-75%, and once the TPO plant is fully operational, utilization can reach around 80%.

    — Mr. Jayeshhh Patel

  • Capacity Utilization Rate Capacity Utilization · Once TPO plant fully operational · High confidence 80%

    From 60-75% today

    — Mr. Jayeshhh Patel

Exports

  • Export Percentage of Sales Exports · Current financial years · High confidence 20-25%

    From 6% today

    We are targeting to reach 20 to 25% exports in the current financial years. We are focusing on geographically nearby countries where tariff related issues are not there. China is a major buyer of reclaimed rubber from India, so we are trying to increase export growth by 20-25%.

    — Mr. Jayeshhh Patel

What to watch in Q1 FY27

EPDM Plant Operationalization

next quarter
Current Under construction/planning
Target Operational by October 2026

Why it matters

Successful operationalization of EPDM is key for capacity expansion and margin improvement.

First of all, crumb rubber and EPDM, we are planning to operationalize before September-October. (Page 11)

Risks & concerns

  • H2 FY26 Revenue Decline due to Geographical Effects and Exports

    medium

    H2 FY26 revenue declined by 18% compared to H1 FY26, attributed to geographical effects and reduced exports.

    Management acknowledged

  • Dependency on Government Compliances for TPO Operationalization

    medium

    The operationalization of the TPO plant by December 2026 is dependent on government compliances, which could lead to delays.

    Management acknowledged

  • Raw Material Price Volatility (Crude Oil for TPO Pricing)

    low

    TPO pricing is linked to crude oil prices, implying potential volatility if crude prices fluctuate significantly.

    Management acknowledged

Q&A highlights

8 direct
H2 FY26 Revenue Decline and EBITDA Margin Expansion Direct
Good evening, Vansh Saini. I'm just answering your first question for H2 80% declining due to geographical effect. Our exports have gone down, so the second quarter was not performed as compared to the first quarter, and the second was the revenue and improving EBITDA that we have installed our new automation in our plant and also reduce the our labor cost, Additionally, we are in the process of installing a 1.2 MW solar power plant, which is expected to further reduce our power costs significantly. These initiatives together contributed to the improvement in EBITDA margins, and we believe margins are sustainable going forward.

Addresses the short-term revenue dip and provides clear reasons for the significant margin improvement, confirming sustainability.

Asked by Mr. Vansh Saini

Capacity Ramp-up Roadmap and Operational Timelines for New Verticals Direct
Okay, basically we have just starting our fourth, currently we have the 960 metric ton per month, so currently we get the license from the GPCB, which is the 1960 and then after we are going to start the EPDM, so it will be 4200, so drastically we are increasing our metric ton capacity from the government... Maybe in operational, maybe October this year. (Page 4) / Per day 60 metric ton. According to the Gujarat government license, we require 60 metric ton per day. Okay, and it will be operationally the December this year but it's dependent on the government compliances also. (Page 4)

Clarifies the ambitious capacity expansion plans and provides specific timelines for the operationalization of EPDM, TPO, and RCB plants, which are key to future growth.

Asked by Mr. Vansh Saini / Mr. Divy Agrawal

Funding for Expansion and Future Capital Requirements Direct
Based on the current fundraising, we are focusing on land acquisition, construction, and increasing our installed capacity as per Gujarat government approvals. For the next phase in FY27 and FY28. We require some fundraising at that time. We require some funds, but currently we doesn't require more funds.

Provides clarity on the sufficiency of current funds for immediate expansion and signals future fundraising needs for the next phase of growth.

Asked by Mr. Divy Agrawal

TPO Strategy, Export Focus, and Pricing Direct
TPO will be utilized like a fuel, and our focus is particularly towards some export licensing, and we are focusing on building those licenses and maintaining that quality so that the TPO which is being utilized as fuel can be exported properly to nearby countries as a fuel product. (Page 5) / As explained earlier, currently TPO pricing is around INR 50 to 60 plus or minus depending on crude oil prices. (Page 13)

Outlines the strategic direction for the TPO product, emphasizing exports and its link to crude oil prices, which is crucial for understanding future revenue and margin drivers.

Asked by Mr. Divy Agrawal / Mr. Harsh Maru

EPR Contribution to Profitability Direct
The EPR revenue goes directly into operating revenue. Last year, the EPR we sold was around INR 2.5 crores, and we earned almost the full INR 2 crores as profit from that. Even now, we still have around 8,000 EPR points pending. Even if you exclude the EPR contribution, our PAT would decline by only around 1-2%. So basically, EPR has not increased our profit margins significantly. We can say it has contributed around 2% additionally.

Quantifies the impact of EPR on the company's financials, clarifying that while it contributes, it's not the primary driver of the significant margin expansion.

Asked by Mr. Yash Purbhe

Sourcing Challenges with Scale and Competitive Landscape Direct
Currently, we are not facing any sourcing issues even if we scale to around 2,500 metric tons, and we are also planning sourcing arrangements outside the country for ourselves. (Page 8) / No we don't see such challenge right now. (Page 8) / TPO is basically converted and utilized as fuel, so currently we do not see major competition in this segment. (Page 9)

Addresses potential risks related to raw material sourcing as the company scales and provides insights into the competitive environment for its new product segments.

Asked by Mr. Yash Purbhe / Mr. Manan Mandur

Sustainability of EBITDA Margins Direct
These margins are sustainable, especially once EPDM and TPO operations start. We will try for that. (Page 9)

Reaffirms management's confidence in the sustainability of the improved EBITDA margins, linking it to the successful operationalization of new, higher-margin verticals.

Asked by Mr. Manan Mandur

Export Growth Targets and Margin Impact Direct
We are targeting to reach 20 to 25% exports in the current financial years. We are focusing on geographically nearby countries where tariff related issues are not there. China is a major buyer of reclaimed rubber from India, so we are trying to increase export growth by 20-25%. (Page 12) / Yes margin will also be improved. (Page 13)

Highlights the company's strategic focus on increasing exports and confirms that this will lead to improved margins, indicating a key growth lever.

Asked by Mr. Dahyalal Prajapati

2 min read 5 chapters

Detailed narrative

Strong Financial Performance and Margin Expansion

LRRPL delivered robust financial results for FY26, with revenue growing 28% YoY to ₹39.82 crores. EBITDA saw a significant 130% increase to ₹8.52 crores, and PAT surged over 180% to ₹4.09 crores, leading to a 150% EPS expansion. The company's EBITDA margin improved to 22%, up from 11-12% previously, primarily due to automation, efficient power control, and the upcoming captive solar power plant. Management confirmed these margins are sustainable, especially with the operationalization of new verticals.

Aggressive Capacity Expansion and Diversification

The company is undergoing a major capacity expansion, aiming to increase its installation capacity from 960 metric tons per month to 2400 metric tons per month across all verticals. Post-EPDM operationalization, total capacity is projected to reach 4200 metric tons. LRRPL is aggressively expanding into higher-margin verticals such as Tyre pyrolysis (TPO), Recovered Carbon Black (RCB), and EPDM rubber. The TPO and RCB plant, with a capacity of 60 metric tons per day, is expected to be operational by December 2026, while EPDM and crumb rubber operations are planned for September-October 2026.

Strategic Investments and Funding

A key milestone was the successful preferential fundraising of ₹35.58 crores, which will be utilized for enhancing manufacturing footprint and capacity expansion. The company has also strategically invested in a 1.2 MW captive solar power plant, expected to significantly reduce electricity expenses and improve EBITDA margins. While current funds are sufficient for immediate expansion, additional fundraising will be required in FY27-FY28 for the next phase of land construction.

Working Capital Efficiency and Raw Material Sourcing

LRRPL demonstrated improved working capital management, reducing working capital days from 96 to 60 days, which positively impacted cash flow from operations (₹5.34 crores). The company primarily sources raw materials domestically from four nearby states, with 10-15% imported from regions like Australia. Management stated that they do not anticipate sourcing issues even with increased scale up to 2500 metric tons, and import costs are currently lower than domestic purchase/production costs.

EPR Contribution and Export Focus

The Extended Producer Responsibility (EPR) mechanism contributed ₹2.5 crores in revenue and ₹2 crores in profit, adding approximately 2% to PAT. The company has 8000 EPR points pending. LRRPL is also strategically focusing on increasing its export footprint, targeting 20-25% of total sales in the current financial years, up from the current 6%. This export growth, particularly to nearby countries like China, is expected to further improve margins.

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