Below are the edited excerpts from the interview.
Q: Now that you have listed, you will be able to give us forward-looking statements and tell us more about your plans as well. You reported revenues of around ₹7,100 crore in 2024-25 (FY25), margins of around 5%, and profits of around ₹223 crore. With the expansion plans in place and increased capacity utilisation, what kind of numbers are you looking at in the next two fiscals?A: We are looking at a robust expansion plan. Already, as we discussed last time, for the copper cathode project, which is going to start next year, and value-added products of copper. We are also going to enter many areas of recycling, like tyre recycling and e-waste recycling. So, the company has got a robust plan for the next two years to grow in the recycling sector, which is our main forte. Recycling is going to be a huge opportunity for the next 20 years. It is not just a business; it is a compulsion to recycle if we want to live on this planet.
Q: Now that you are operating at utilisation levels of 75%, and considering the projections that you are making, do you have any capacity expansion plans on the anvil?
A: Of course. We always keep a 20% capacity buffer to grow our business. It is always about the purchase order book rather than sales. Sales are always there for us; there is no problem in selling because what we manufacture is a commodity, the base raw material for any downstream project, like copper tubes, sheets, or battery manufacturing. So, whatever we are able to source, we can recycle and sell. In this circular economy solution, our purchase book matters. We keep 20% extra capacity, and once it gets filled up, we again build 20% more. So, this year again, we have created around 25% extra capacity to cover future raw material needs.
Q: How pricing works in this case. I have had conversations with some battery recyclers who mentioned that sometimes scrap prices go down, sometimes output prices go down. Is it volatile for you as well? And if so, how do you ensure maintenance of margins and profitability?
A: We have a strong and robust mechanism for hedging all our purchases and sales. Our margins are not at all affected, as everything is completely locked from day one when we purchase the material. We hedge in Multi Commodity Exchange of India (MCX), London Metal Exchange (LME), and sometimes commodity exchange (COMEX), since we buy 24 hours round-the-clock. So, back-to-back, we hedge everything apple-to-apple. There is no risk of variation in prices and margins. Profit margins are protected from the risk factors of base metal price movements.
Q: The last time you spoke to us, you mentioned that exports are 60% of your overall business. Could you quantify how much of it goes to the US market, and what challenges you are facing there? Going forward, do you expect to maintain, reduce, or increase the share of exports as part of your overall mix?A: We do not export to the US at all. Our exports to the US market are zero, because the commodities we sell go to Southeast Asia—Korea, Japan, China, Singapore, Malaysia—and somewhat to the Middle East. But mainly in Southeast Asia, where freight costs are almost zero for us to ship from Chennai to these countries.
Second, we buy from the US. We don’t sell to the US. We buy a lot from the US, around 17% of last year’s purchases. This year also, we are buying substantially. But our domestic purchases are growing rapidly now. Coming back to the US side, we have no effect from the tariff war or anything else. Scrap and recyclable resources—every country exports to India because of India’s USP, India’s ecosystem for recycling. Indian companies are doing very well in the recycling sector and will continue to grow.
Q: I wanted to understand your growth outlook. Currently, margins are at 5.2% for FY25, on a topline of ₹7,125 crore. What kind of growth are you envisaging, considering this is a business that will continue to see expansion?
A: As I said, recycling is not a business of choice; it is a compulsion. We have to recycle if we want to live on this planet. Whether domestic or overseas, what we do is not typical waste-to-energy or waste management. What we do is a very different type of recycling.
Q: In that case, what kind of growth will you see?
A: We have been growing at around 30–40% compound annual growth rate (CAGR) for many years, and I expect the same level of growth in the coming years as well. I can’t give exact numbers, but I am confident the company will continue to grow on a strong growth path.
Q: And margins? They have improved from 4.1% to 5.2%. Will that trajectory continue?
A: Yes. In this recycling business, scale is more important. Once you grow the scale, the cost of production goes down, fixed overheads go down, and margins go up. So as our topline grows, I am sure margins will also expand.
Watch the interview in the accompanying video
