Namo eWaste

Namo eWaste reported robust financial performance for FY24-25, with revenue growing 50% year-on-year to ₹150.5 crores. EBITDA increased by 29% and PAT by 25% over the same period. This growth was attributed to client diversification, scaling benefits, and increasing demand for ESG-compliant solutions. The company's current recycling capacity exceeds 30,500 metric tons per annum, with plans to expand to 68,000 metric tons by Q3 FY26.

Revised waste management guidelines mandate producers, manufacturers, and importers to recycle a minimum of 60% of their previous year's sales volume, increasing to 70% from FY26. This regulatory shift is a significant structural tailwind for Namo eWaste, compelling OEMs and brands to utilize formal recyclers. The company is well-positioned to capture this demand, especially with India being the third-largest generator of EVs globally, driving lithium-ion battery recycling needs.

The company is investing significantly in new facilities. The Nasik plant, dedicated to lithium-ion battery recycling, is expected to cost around ₹15 crores, with ₹11.2 crores funded by IPO proceeds. This plant will handle both refurbishment (20-30%) and black mass production (70%). Additionally, a new e-waste plant in Hyderabad is projected to cost ₹15-18 crores, primarily funded through internal accruals. This expansion aims to increase overall capacity and improve operational efficiency by reducing logistic costs.

EBITDA and PAT margins experienced pressure in H2 FY25, with EBITDA margin at 9.85%, down from 11.07% in FY24. This was primarily due to increased operational expenses, including logistic costs which doubled from ₹3.22 crores to ₹6.33 crores, expansion-related hiring, R&D, and pre-construction expenses. Management expects margins to improve to 12-12.5% as new facilities become operational, reducing logistic costs, and working capital from IPO proceeds lowers interest expenses.

Raw material sourcing is identified as the biggest challenge in the e-waste recycling industry. Namo eWaste's strategy involves expanding its presence in urban centers and strengthening collection channels to secure raw materials. The company estimates its market share in the formal recycling sector to be around 2.5-3% and aims to double this. Current overall plant capacity utilization has increased from 35% in H1 to 55% in H2, with a target to reach 65-70% in the current year (FY26).

The Nasik lithium-ion battery recycling plant will focus on two key areas: refurbishment/restoration of battery cells and shredding for black mass production. The company anticipates 20-30% of operations will be refurbishment and 70% for black mass. Due to the high CAPEX and risks associated with refining rare earth metals, Namo eWaste plans to export the high-quality black mass to top global players in China and Taiwan. This segment is projected to add ₹60-70 crores in revenue in its first year of operation, with the Nasik plant alone contributing ₹80-100 crores from 35% utilization.