Detailed Narrative
Q1 FY27 Financial Performance Highlights
Nupur Recyclers Limited delivered a strong Q1 FY27, with consolidated revenue growing 56.6% year-on-year to ₹83.03 crores, up from ₹53.03 crores in Q1 FY26. EBITDA saw a significant increase of 111% YoY, reaching ₹12.86 crores, which translated into an EBITDA margin of 15.48%. Profit After Tax (PAT) also surged by 82.6% YoY to ₹7.39 crores, indicating robust operational efficiency and improved profitability.
Strategic Diversification and Internal Integration
The company emphasizes its diversified, multi-geography sourcing model for scrap metal, which includes the US, Europe, Middle East, and Australia, mitigating geopolitical risks. This strategy ensures a stable supply of raw materials for its operations. Nupur Recyclers has built a group structure with subsidiaries like Frank Metals Recyclers, Nupur Extrusion, and Tycod Autotech, allowing for internal integration and capturing a larger share of the value chain. Approximately 30% of value-added products flow to these subsidiaries for further processing, enhancing control over quality and realizations.
Entry into LFP Battery Recycling
A significant strategic move is the establishment of a new LFP battery recycling facility in Sampla, Haryana, covering 5 acres with an investment of ₹50-70 crores. This plant, expected to be operational in 2-3 months, will have a capacity of 6,000 tons per annum (500 tons per month). It aims to extract valuable materials like lithium, iron phosphate, graphite, copper, and aluminum from used LFP batteries, positioning the company in a high-growth sector with anticipated higher margins.
Manufacturing Footprint and Capacity Expansion
Nupur Recyclers operates its core processing at the Mandoli plant, producing zinc ingots with 83.33% utilization. Frank Metals Recyclers in Palwal operates at 100% utilization for zinc and aluminum ingots, and 30% for aluminum billets. Nupur Extrusion in Sampla, Haryana, currently runs at 75% utilization (1,800 tons per annum) and plans to increase its capacity from 200 tons per month to 350 tons per month. Tycod Autotech in Pantnagar, Rudrapur, produces OEM auto components, running at 48% utilization (1,200 metric tons per annum).
Financial Strategy and Capital Allocation
The company maintains an 'almost debt-free' status and plans to fund its expansion, including the Sampla LFP facility and Frank Metals aluminum extrusion investments, primarily through internal accruals. A long-term liability of ₹24 crores for the 51% stake acquisition in Tycod Autotech was financed by Tata Capital at an interest rate of 9-10% over 5-6 years. Management expressed intentions to acquire more plants, ranging from ₹50-150 crores, and potentially a lead recycling unit, all funded internally.
Market Dynamics and Hedging Approach
Management noted the inherent volatility of the metal scrap market but stated a policy of not hedging against LME prices or foreign exchange fluctuations. Instead, the company relies on spot buying and selling, and carrying stock in its yards. For OEM customers like Tata Motors, pricing is based on monthly published rates, with the company adding its costs and a 7-10% profit margin. This approach has historically yielded profits despite market fluctuations.