Bhagyanagar India Ltd (NSE: BHAGYANGR) Q3 2026 Earnings Call dated Jan. 31, 2026
Corporate Participants:
Narendra Surana — Founder
Devendra Surana — Managing Director
Advait Surana — Business Development Manager
Atul Rawal — Analyst
Analysts:
Mitesh Bhandari — Analyst
Naveen Prasad — Analyst
Vaibhav Gupt — Analyst
Rahul Mehta — Analyst
Aryan Bhatia — Analyst
Pakshal Jain — Analyst
Madhur Rathi — Analyst
Mitesh — Analyst
Presentation:
operator
Good day and welcome to the Q3FY26 earnings call for Bhaginagar India Limited. We appreciate your participation as we review the Company’s operational and financial performance for the quarter as well as our strategic outlook moving forward. The goal of today’s call is to provide a comprehensive overview of the Company’s progress and address any questions from our investors and stakeholders. Please note that this call is being recorded and some statements made during this session may be forward looking based on current assumptions. These statements are subject to risks and uncertainties and actual results may vary. The Company does not assume any obligation to update these statements unless as required by law.
We encourage all participants to consider these factors and avoid placing undue reliance on forward looking information. Representing Bhaginagar India Limited today we have Mr. Devendra Surana, Managing Director, Mr. Narendra Surana, Founder, Mr. Advait Surana, Business Development Manager Mr. Surendra Vitoria, Chief Financial Officer and Mr. Rahul Sorana, Financial Manager. I will now hand over the floor over to the management team for their opening remarks. The presentation has been shared with the Exchange. Participants can refer it later for the full presentation. Following their address we will open the floor for the Q and A session. Thank you and over to you.
Narendra Surana — Founder
Good morning everybody. I’m Narendra Surana, Founder of the company. I welcome you all to the investor presentation. A detailed brief will be given by the Managing Director Devinda Surana and after which again I will come back to you regarding some of the real estate development and the demerger. Thank you.
Devendra Surana — Managing Director
Thank you very much for joining us today on this investor present earnings call. Very happy to be in front of you the second time after a very stellar quarterly results which we have announced yesterday. For those who have not joined us in the past I will give a brief overview of the journeys with of the company. The company started production of copper rod in 1982 as it was required in those days for a lot of telecom equipments. We started just with the production of copper rods in 1982 with the old technology of bus bar rolling.
In 1988 we upgraded the technology by importing one of the best equipments from the world from Finland from Autokumpu with the CC rod which gave us a production of thousand tons per 10,000 tons per annum. In 1992 we started our journey for value added products started with just copper strips and then enamel wires and other things which we added as we went on. In 1994 we added auto components. In 2004 we ordered confirmed extrusion strips in our production lineup 2007 we started solar copper pipes and solar collectors. In 2012 we added copper foil and sheets to our product range.
However, the game changer for the company started after 2014 and 2017 when we went into a backward integration and started scrap recycling facility in a 60 acre facility outside of Hyderabad. This is with a capacity of 25,000 metric tons per annum. So in the last 10 years from 2014 to now, we have almost taken our production 10 times. 2020 we entered into transformer windings. 23 we added solar interconnects and 2025 we reached a capacity of 30,000 metric tons. During this year we are under further additional capacity. By end of February we should reach 35,000 metric tons per annum as our total installed capacity by February end we have two plants.
One is in Tupran which is a 60 acre facility which includes. You can remove that Waseem? Yeah, okay. It’s okay. In. We have a 60 acre facility which is housing our main plant which includes an 8 megawatt 8 acres of solar power plants. As we can be seen in the picture, this 60 acres is more than enough for us for any future expansion which we can envisage probably even up to three to four times the existing capacity. This land parcel will be enough. So we’ll never have a shortage of land for any expansion in future.
We also have another facility in the city of four acres where we do a lot of value added products and a lot of intricate products, especially the solar wires and others. Our journey in the initial stages we started from a commodity, went into value added products, then went into backward integration and became a total scrap recycling company ensuring that recycling happens. And we are a circular economy. Of late the government is giving a lot of. Not only the government, the rest of the world is also giving a lot of importance to esg environmental and social governance.
We form we are right in the center of that and hope to take advantage of this awareness as well as future options which come along with recycling. I will ask Advait to talk a little about the plastic recycling before I take on.
Advait Surana — Business Development Manager
Hello. So one of the core principles of our company is to add as much value as we can to anything that leaves a factory. And with the recent push of circular economy that the government has on the agenda, we decided that we should get into recycling of plastic. So currently as a byproduct of all the scrap that we get, we get around 800 tons of plastic as a byproduct and we are doing around 150 tons of value addition to this plastic. So we are currently making LDP granules that go into cables and we also doing injection molding of plastic that go into fan bases for OEMs, etc.
And in the next year we’re looking to add more processes and more more machines into our plastic recycling plant. We’re currently looking to add PVC granules as another product that we’ll make which go into shoe bases and we’re going to also add pyrolysis which will convert the plastic into alternative fuel. So from 150 tons of plastic recycling we are hoping to reach 500 tons by the next year. Yeah, that’s it.
Devendra Surana — Managing Director
Thank you. If you can take it to the financial highlights, I think I can just talk a little more about the financial performance for the nine months. So our company has reached the turnover which total turnover of. 1643 crores which is higher than the entire turnover of the FY25 from 1625 for the whole year. Last year we have already reached 1643 and we hope to have the best quarter ahead of us. The January March quarter is looking very promising. The 1643 crores shows a 40% year on year increase compared to the nine months ended 31st December 2024.
The EBITDA margin of 69.98 crores for the nine months is also a growth of 172% over the last year’s EBITDA. The EBITDA margin of 4.26% for nine months is also well over double of last year. And the EBITDA margin for the third quarter itself has gone to 4.9%. We are trying to push and see if we can cross 5% over the coming quarters. The PBT for 9 months is 43 crores and the PAT is 31.68 crores. The operational PAT being one of the highest we have ever achieved for this company. Can you. I’ll request ADVAIT to talk about the value added products and what we are planning there.
Advait Surana — Business Development Manager
So let me just talk a little bit about our value added products and new innovations that we’ve done in the first half year. So one thing that we’ve achieved is we’ve installed state of the art heat recovery systems on our furnaces. So what this does is it not only reduces the cycle time of all our furnaces but it also reduces the amount of fuel required to make a certain batch. So in the future we should be able to see a big decrease in the fuel cost as well as more efficiencies from Our furnaces. Apart from this, we’ve also added a few value added products in our portfolio.
As you can see on the screen, the main highlights of these are the tin and silver plated copper bus bars that go into AI data centers. We forecast this to be a very big demand sector in the future upcoming years. And we’ve already entered this market. It is mainly currently an export market for this product and we’re sending these materials to us and other countries. Another product that we have currently entered is solar wires. It had been in a prototype stage at a small scale earlier, but now we’ve expanded, we’ve gotten a lot more lines of these machines and we’re producing solar interconnect wires that are thin, very fine solar wires coated with a solder that get soldered onto a solar panel between the cells.
And we’ve also installed state of the art systems in our tracking systems, in all of our machines so that we can improve our efficiencies over that as well.
Devendra Surana — Managing Director
Thank you Advait for that. Very interesting area from the factory. So what are we seeing going forward? Copper, as we all know, is the metal of the future. I think all of us have been seeing the retail frenzy which is happening in the market. Everybody is talking about copper being the new gold. And why is there so much frenzy for copper in the market? It is because the three buzzwords in industry today are AI, EV and green energy. And all these three require much more copper than normal usages. So if you look at green energy, green energy requires about three and a half times more copper compared to conventional energy and oil additions or 70% addition to power.
Demand capacity worldwide, and especially in India is coming by way of green energy, whether it is wind or solar. So this will is this augurs very well for the copper demand. Similarly, EVs require about four times more copper per vehicle if you look at the entire system. So that also is showing a lot of demand for copper growth in future. The third AI, AI is a power guzzler and anything which requires power requires a lot of copper. So all the EV data centers which are coming are very, very intensive in terms of usage of copper in all forms.
So with this three, we expect the demand for copper to boom continuously for the next 10 to 15 years. And we as a company hope to be part of that story. We are well poised with our supply chain for supply of copper scrap which we get from all over the world. I think there is no corner of the earth from where we are not getting scrap, whether it is South America, North America, Canada, Europe, uk, Middle East, Southeast Asia, Japan or all the way to Australia and New Zealand. We get copper scrap from every corner of the earth.
On the supply side we have a very huge, very good, well established customer base. We have about 500 customers, mostly in OEMs in every sector starting from electrical to switch gears to automobiles. So wherever copper is required, we are well placed, poised to take advantage of this huge increase in demand which is likely to happen over the next few years. We are also well poised with having enough land and area and we are fortunate enough to have a team which is capable of ensuring that we take care of more demand. Earlier we were looking at reaching a turnover of 5000 crores by the year 2030.
But seeing the demand we have preponed it to 2829 now. So our target is to reach a 5000 crore turnover by 2829. Looking at the demand and the growth which is happening in the market coming forward, we are looking at demerger of this company into two companies. The Bhagyanagar Copper, which is mainly our copper company will be demerged into a new company by the name Tierra Met which will focus primarily on the copper and copper growth which we have, we have outlined so far. The rest of the company, which is mainly our little bit of wind energy portfolio and real estate will remain in Bhagyanagar India which will be the main entity.
And the shareholding in the two companies will be a mirror image. Shareholding. Every shareholder of Bhaginagar India will get one share of Tierra Med. As regards the future plans of Bhaginagar India and the real estate portion, I’ll request Nanda to share his ideas.
Narendra Surana — Founder
So I would like to inform you about the three land parcels that we currently hold in the company. These are primarily in the industrial areas and the state government of Telangana has announced a Hyderabad Industrial Transformation policy which allows for conversion of all industrial lands to commercial or residential property. And they want to push out all the industries from within the ORR which is the immediate city, to outside the ORR which would be about 25 to 30 kilometers away. And we are already geared up for that by having shifted our main manufacturing to Tupran which is just outside the industrial area, outside the outer ring road.
So any kind of expansion or requirement of production would come there. And we have these three industrial parcels out of which one is in a place called Upal which is already grown into a semi urban or urban area. And demand, demand for residential and office space has gone up quite substantially and many new Many large companies or national players have already started setting up their projects in that area. So we have also been in touch with various industry, various real estate players and there is a possibility of constructing approximately approximately 16 lakh square feet or so of residential area in one of our locations.
And the likelihood of us getting about 4 lakh square feet without any further investment is possible on that particular location through a joint development with a very well established player. I cannot name those companies because we have not yet finalized the agreement and we are hopeful that this would happen before March. So we are looking forward to very immediate future. Apart from this, we have two other land parcels which are also in very prominent locations and we will be looking at some kind of development in those areas as well. And we are also in touch with the government here and the Industrial Development Corporation for more such activities including warehousing, et cetera, which we have been doing partially on one of our land parcels.
So apart from this, I think on the real estate I would like to elaborate a little more in future meetings but the one at UPAL is looking very promising in the near future. Thank you.
Devendra Surana — Managing Director
Thank you. Just to have the closing remarks before we open it for Q and A. So we are looking at very good situation for this year end as well for as well as for the next year. So all the things for the nine months have already been told and I will looking forward to your questions in which I can express some other things which need to be done.
operator
Thank you so much team for a very detailed insights about the company. We will now move on to Q and A session. I request the participants who wish to ask a question to please raise their hand. We will take the first question from Mr. Mitesh Bhandari.
Mitesh Bhandari — Analyst
Hello.
Devendra Surana — Managing Director
Yeah, Mitesh. Yeah, I can hear you Miteish.
Mitesh Bhandari — Analyst
Yes sir. Very good. Good afternoon and congratulations for an excellent quarter gone by and wishing the journey picks up a better pace from here on. Sir, what do you expect the next year or couple of years? You’ve set your target for 28, 29. I have couple of questions. One, is there a threat as the prices of copper go up? Copper is also likely to be replicated with aluminium in various sectors as they talk about that metal having similar characteristics but being lightweight as well. And second is on the profitability side. We are at around 1 1/2 2%.
Pat, is that a number is very low or is there scope for improvement on that?
Devendra Surana — Managing Director
Okay, thank you for those questions. Let me first talk about the replacement with aluminum. Yes, aluminum is a good replacement for copper in terms of the electrical properties. And in a lot of areas where which are not very critical, like transformers, cables and fans, aluminum is already replacing copper. And we have now been seeing this ratio of copper to aluminum of over three, three and a half for the last 15 years. So the major areas of replacement from copper to aluminum are already over. Having said that, I won’t say that there are not many more areas where copper can be replaced by aluminium.
There are two areas which are critical where copper only can be used. One is the reliability of copper is much higher than aluminum because aluminium tends to oxidize and all the connections and other things tend to wear out much faster than copper. Where reliability is high, aluminum is definitely not taken. Aluminum also takes much more space. So whenever you make any component out of aluminum, the area space and the outer coverings, whatever it is. For example, if you make a cable instead of copper, if you make a aluminum cable, it is cheaper. But however the size becomes bigger and the plastic and the other things which go on top becomes much more expensive.
So there is always an area where this cost benefit analysis comes down that replacement. Same in motors, same in motors or anything. If somebody, somebody replaces a motor with aluminum, the size of the motor will become very big. So all other components will become much more expensive and the spice will become very big. So an absolute most more than this, all this, the reliability comes down, replacement happens. But I think it’s been happening for the last 15 years and there are less and less areas which are still left out for further replacement. In terms of profitability, we are looking at EBITDA margin stabilizing around 5% of the turnover.
And as the turnover goes up, our pat margin will go up from 2 to 3%. That is what we are looking at. While the EBITDA margin remains constant around 5% the PAT margin will slowly inch up as our other expenses come down including interest and other things.
Mitesh Bhandari — Analyst
Thank you.
Devendra Surana — Managing Director
Thank you. Any next question?
operator
Thank you sir. We will move to the next question from Mr. Atul Rawal. Sir, please unmute yourself and ask the question.
Atul Rawal — Analyst
Good afternoon sir. Atul here. Yeah, thank you for the information. Very nicely presented here. My question is sir, in last quarter, in September quarter we had built up an inventory of copper by infusing around 100 crore into short term debt. Did we get any benefits out of it in this quarter because of rise in price of copper? And second question is, are we left with any inventory at the end of December quarter?
Devendra Surana — Managing Director
So thank you for your question Atul. Yes, the inventory has gone up in September and December Quarter because of our higher dependence on the importance and our margins have gone up partly because we are using more of imported copper and less of the domestic copper. We have got some benefit of the buoyancy of the market but not really inventory gains as such because mostly our inventory is hedged on a regular basis while we are doing some dynamic hedging in the going forward. But most the profits are mainly from operations and not from inventory gains.
Atul Rawal — Analyst
Okay sir, one more question. The land parcels that we are having and now we are in process of developing the same. Can you just indicate some sort of overall value that we can generate out of it? Let’s say going forward in three, four years. Land parcels value you want to say just 4 lakh square feet.
Devendra Surana — Managing Director
Yeah. Actually what is happening is the western part of the city the prices have really shot up and we are doing a catch up on the prices of real estate prevalent in Bangalore and Chennai. While the infrastructure quality of infrastructure has far surpassed Bangalore and many GCCs, the new companies which are coming and setting up their offices in India are preferring to come to Hyderabad. So we are seeing a kind of all round development spreading towards the eastern part of the city where we have more land parcels because that was predominantly industrial area. So we are seeing the pricing go up.
For example, I could just give an example not to be noted on that. The price used to be about 5 to 6,000 rupees per square feet in the eastern side and about 12 to 15,000 in the western side. Now we are moving towards 10,000 already on the eastern side where we have our land parcels. And the demand is also growing up because many of the items sector employees have started living in these areas because they were more affordable. So the entire ecosystem is also developing around this area and this will further push up the price.
Atul Rawal — Analyst
Thank you. Thank you sir. Thank you for this. And maybe at any convenient time for you we would like to visit the plants.
Devendra Surana — Managing Director
We can make call arrangements.
Atul Rawal — Analyst
Yeah, thank you. Thank you sir.
operator
Thank you sir. We will take the next question from Mr. Naveen Prasad.
Naveen Prasad — Analyst
Sir, Congress for the get set of numbers. I have just one question. As I understood correctly. So we are planning and basically exporting lot of component for the AI related stuff. Right. Do you and those are basically on the USA and other the outside India regions. Right? Do you see any competition in the in those market? And if there is competition how we are seeing us pricing around those competition.
Devendra Surana — Managing Director
So currently this market is very new even to us and we just in touch with a few companies. So for us silver coating and tin Coating is possible on the busbar because of the product quality. Our product is of very high quality and it’s very hard for people to match. We’ve been making this product for over 20 years and we have a lot of machines, a lot of expertise and all systems are set in house. So for anyone to compete with it it takes a lot of time, lot of effort, lot of R and D.
So in the short term we don’t see a lot of competition. And price wise I think India is very competitive with most of the in comparison to other countries and a lot of these countries that we’re selling to, they don’t prefer to take material from China due to their policies. So we’re looking at this to be a very big market for us and not something that anyone else can easily enter.
Naveen Prasad — Analyst
Okay.
Devendra Surana — Managing Director
So being a total manufacturer, right from scrap to the finished product, our competitive edge is definitely there when we are looking at this product. The main thing required for this is a marketing push to ensure that we get most more of this. The silver bearing bus bar is basically used very heavily in the data centers. Thank you.
Naveen Prasad — Analyst
Yeah. And how we are placing our ourselves in the India region as well because it just booming, starting to boom in the India as well. Right. Because it started in USA I think back two, three years or four years. But now it started becoming a lot of people are coming and trying to open the data center here. So how we are planning to place ourselves for the India, Are we seeing any kind of demand there as well?
Devendra Surana — Managing Director
Yeah, yeah, yeah. This product demand in India is very high and we have one of the biggest market shares in this product in India. Like I said we have 500 customers all over the country for bus bars especially. Our products are very well established and we are one of the, I think the, the biggest player in this area in India. Okay.
Naveen Prasad — Analyst
Yeah. Thank you sir.
operator
Thank you sir. We will take the next question from Mr. Vaibhav Gupt.
Vaibhav Gupt — Analyst
Hello. Yeah, am I audible to you sir?
Devendra Surana — Managing Director
Yeah, tell me.
Vaibhav Gupt — Analyst
Yeah, so I’m very new to your company and I have a couple of questions. So the, the basically in your presentation you have mentioned that you are that your aspiration is to do 5000 cross of revenue in 2829. Right. So this is just for the copper business or like it will be including the demerging of the other businesses. Well that’s on the console business.
Devendra Surana — Managing Director
So we’ll be demerged hopefully in the year 2627. And 5000 crores is the turnover for the copper business. 5000 is solely for the copper business.
Vaibhav Gupt — Analyst
That’s right. Okay. And on your debt side sir, I see that your debt and interest cost is key pricing. So what is your outlook on that sir? Are we planning to how we are planning to reduce the debt and interest costs because you know it’s, it’s basically reducing our lower bottom line as well. So how do we plan to reduce our interest costs and debt sir?
Devendra Surana — Managing Director
So if you see our long term debt is almost zero. It is only the working capital debt. As our turnover goes up and as our both receivables and both our receivables as well as our inventory will go up, hopefully we’ll manage with the same inventory but our receivables might go up in absolute terms. So I’m not looking at really reducing our debt in a big way other than getting a higher turnover with the same amount of working capital as what our target is. Just on an aside I think I don’t know whether we have updated this.
We were earlier rated as bbb. Now we have just got a rating of bbb. So that will help us reduce our interest cost. We are hoping that by next year end we should reach a which will further help us reduce our interest costs.
Vaibhav Gupt — Analyst
Okay. And on the industry side so how do you see the, you know the coppers are the now basically data center renewable power and also how do you see the data center renewable and power industries opportunity in coming four, five years.
Devendra Surana — Managing Director
Yeah, that’s exactly what I said. I mean next, next 5, 10, maybe up to at least 20, 40. I see this three industries booming. I mean AI, green energy and EV are definitely the sunrise industry for the next 10 to 15 years. 10 years at a minimum. And copper industry will grow alongside all these three industries. And we are well poised to take advantage of all the three macro growth centers. And India is also poised to take advantage of all the three.
Vaibhav Gupt — Analyst
Okay and on this 5,000 crs of top line what will be what, what are we planning for the EBITDA margins and 5 margin? I guess 5% as you mentioned.
Devendra Surana — Managing Director
Yes, that’s right. We are targeting 5% EBITDA margin and PAT hopefully will keep going up, inching slowly up towards three and maybe a slightly beyond three. Okay, so three for like 5,000 top line. Yeah, three it might go up a little more than three. On a conservative way it could be around 5.3%. Yeah, three plus.
Vaibhav Gupt — Analyst
Okay. And I just have one last question on the corporate governance sides. So what kind of issues are we facing there? So because I saw that there are so many like resignation in the upper management in your company, let’s say in the last three, four years. So what kinds of issues are there?
Devendra Surana — Managing Director
Sir, sorry, I didn’t get that question again.
Vaibhav Gupt — Analyst
So I have a question on the corporate governance side. So I saw that. I said good resignation search basically. So I saw that there are so many designation on the of the CS and all upper management in the last three, four years. So what kind of corporate governance issues are we facing there? Why there is so many resignations?
Devendra Surana — Managing Director
Good question on company secretary. So if you look at our overall company, the turnover of our employees is almost negligible. All the people in my factory, senior staff and in the office also we have hardly anything. But unfortunately that seat of company secretary seems to be a little jinxed. We have had quite a few resignations also. What happens is a lot of people look at the tag of a 2000 crore or a 1500 crore listed company and get better offers. I think that is the only thing which I can think of. Because people are getting a lot of better prospects having seen that somebody is a company secretary of a thousand crore plus company.
So that is the reason I think we are losing out on that one area.
Vaibhav Gupt — Analyst
Okay, okay. That’s all from my side. And just. Just last question. What is your outlook for FY26? Like the top line EBITDA and margins.
Devendra Surana — Managing Director
We are looking at at least a 25% growth. This year. We are looking at roughly 35 to 40%. And next year at least 25% growth for the next year in. In all the three.
Vaibhav Gupt — Analyst
Okay, okay, okay. Fine. Fine. So that’s all from my side. Thank you.
operator
Thank you. We’ll move to the next question from Mr. Rahul Mehta. So please unmute yourself and ask the question.
Rahul Mehta — Analyst
First of all, congratulations for excellent set of numbers. First of all I just wanted to have an idea about the total valuation of the land parcel that company has. Right now.
Devendra Surana — Managing Director
We have three land parcels. So there is a cost which is there by the industrial development area. Because all three land parcels are in the industrial development area. But because of this new policy of Hyderabad industrial transformation the cost has gone up. Because many real estate developers are wanting to buy land here and develop projects. So we cannot really give a valuation.
Rahul Mehta — Analyst
But sir, my question is very basic. What could be the valuation if you do buy the civil value, right? What is the approximate. You must be having it in your book value in the inventory. So what is the basic value of the rent parcels that company is carrying? Bank values with the valuation.
Devendra Surana — Managing Director
Valuation. The circle rate valuation by the SRO and Approximately the land cost in that area it would be between 200 to 300 crores.
Rahul Mehta — Analyst
Okay. Now sir, coming to the copper. Like how much this tariff and China competition could bother us in the competition.
Devendra Surana — Managing Director
Fortunately or whatever, China has never been very active in copper products anywhere in the world. So we have never faced competition from China in terms of copper. Competition is mainly from the local players and we are well placed to meet any competition because of our integrated operations. So I don’t see much competition. I mean competition is always there but definitely not international competition as far as tariff is concerned. Tariff from US USA is a very small part of our exports which is also very specialized to data centers. So we are not overly worried about the tariffs from usa.
Rahul Mehta — Analyst
Okay. That’s a small component of our sales. All right. Do we have upper wedge compared to China in the tariff is concerned or it’s a flat tariff as they have it in steel and aluminium.
Devendra Surana — Managing Director
So India is at 50% tariffs. So I don’t think we have. See as, as I said US is not a very major market for us. So we really don’t concentrate too much on it. I don’t think we have an advantage of tariff over usa. However the EU FTA which has now come in we might look at opening up new markets. So far we have not been exporting anything to Europe with the new fta. Maybe that can become a good market for us because we are very, very competitive in India especially in the electrical transformer and other sectors.
And a lot of our customers are MNCs from that area. With the FTA now coming in I think we might be able to take our business from the Indian subsidiaries to their parents all over the world. We see an advantage because of the EU fta. There is no threat of tariff from USA because my US exposure is very very low.
Rahul Mehta — Analyst
All right sir, thank you very much. And given an opportunity we would like to come there and visit the most.
Devendra Surana — Managing Director
Welcome. Yeah.
Rahul Mehta — Analyst
All right. Thank you. Thank you so much.
operator
Thank you sir. We will move to the next question from Mr. Aryan Bhatia.
Aryan Bhatia — Analyst
Thank you. Thanks for the opportunity. Sir, my first question is regarding our realization. So if I look at we have sold around 18,000 metric ton of copper and we have got something revenue of around 1650 crores. If I look at the realization it comes at around 8,50,000. But on the other hand if I look at the your raw material, that is copper cathode, it is trading at around $13,000 which comes to at 12 lakh. So how come our realization is less than our raw Material cost because the gross margin in industry is around 10%. So shouldn’t our realization should be more than 12 lakh.
So it is coming currently at around 8,50,000. So could you please help me out why there is such a divergence?
Devendra Surana — Managing Director
Very interesting question Aryan. First of all the copper prices are volatile and the $13,000 which you see is today beginning of the year it was close to $9,000. So and we are raw material is mainly copper scrap, not copper cathode which is cheaper than copper cathode. I hope that gives you some idea. Also I think there is a small element of job work. Do you have the figure? A small amount of our tonnage is in job work so that doesn’t contribute any top line. But it’s a very interesting dynamic which you have just mentioned. We’ll also look at this analysis and hopefully in the next presentation will clarity will be better on this factor.
Aryan Bhatia — Analyst
Okay, and so my question is like what is the current realization in like in January we are getting on per ton basis.
Devendra Surana — Managing Director
So our range from commodity to finished product is very very wide. So on any given day our. Yeah, so on any given day our realization, for example yesterday’s sale could be from 1280 to 1350 rupees.
Aryan Bhatia — Analyst
Okay, so can we expect like the realization in the next quarter to jump beyond thousand per kilogram as compared?
Devendra Surana — Managing Director
Definitely. It’ll be much higher than thousand per kg because the commodity price itself has gone up. Just to clarify to you once again, our pricing is based on the current market value of the copper. We have very little long term contracts and every order is basically copper plus fabrication. So this this quarter the realization per ton will be much higher than the last quarter. And that is the reason one of for until last quarter most of the growth was because of the volume. This quarter the growth will also be because of the very high value of copper.
Aryan Bhatia — Analyst
Okay, got it sir. And my last question is regarding the value added or commodity. So how in this industry like is the value added product defined as like bus, bar or wires as compared to commodity? I just wanted to get the sense what is commodity and what is value added in the industry is commodity wire, rod and value added bus bars or strips or enameled wires and the margin distribution between them.
Devendra Surana — Managing Director
So mostly commodities we categorize as rods, ingots, something that comes out of the furnace has maybe one process before it’s shipped out. And something that’s value added is when it’s mixed with other materials like enamel, like other metals like silver, tin, where there are many processes involved, where there’s much more higher skilled labor involved and much more machinery involved. We categorize as value added. So in commodity our margins can be anywhere between 1 to 3% and in value added, our margins can be anywhere between 5 to 10%, if that answers your question.
Aryan Bhatia — Analyst
Okay, thank you. Thank you and best of luck.
operator
Thank you so much, sir. We’ll move on to the next question from Mr. Pakshal Jain.
Pakshal Jain — Analyst
Said, am I audible?
Devendra Surana — Managing Director
Yeah, clear.
Pakshal Jain — Analyst
Thank you so much for the opportunity. Sir, and the fantastic numbers. I just was needing some color on the pyramid that we are the corporate action that we are going through which we are getting a listed entity separate. So can you give us some idea. On what that structure would look like? Because I just want to understand the debt structure and maybe what assets are going there. Or there are just assets that are staying in the current listed entity as well. And what is the business that is going there? Exactly. And what would be the debt structure accordingly? Because just to understand, you know, how that company would function their own.
Devendra Surana — Managing Director
So the company will be moved into two parts to keep it very simple. Everything which is there in Bhagyanagar India today in the consolidated balance sheet will move to the tira met the new company. What will be left out in the old company, I.e. bhagyanagar India will be the land parcels and the windmills. And the book value of the land parcels and windmills is roughly about 30 crores. So what will be left out in the company, bhagyanagar India is 30 crores with 0 debt. Everything else will move to the new company. So if you look at the exclusion part, it becomes much easier.
30 crores without any debt, land parcels and windmills will remain in Bhagyanagar, India. Everything else in the consolidated balance sheet will go to Bhaga Copper. Is our scheme on the website? Yes, the scheme after scheme balance sheet is also given on the website if you want to have a look at it.
Pakshal Jain — Analyst
Got it, sir. Thank you so much. I just had one small question in the last con call as you also mentioned that copper prices when they’re rising, of course they add a bit to the EBITDA margins, but not as much because I think that there is a hedge as well. And you mentioned the current con call as well regarding that. Can you also give us some clarity on the working capital cycle? Because as you also mentioned last time that there is a pressure on the in the working capital and as we already have a high debt structure, will this rising copper prices also impact our working capital cycle going Forward from here because in the last con call and this Congo, the copper prices have shot up very hugely.
So what would the impact look like in that sense in the working capital change?
Devendra Surana — Managing Director
So you’re absolutely right. As the copper prices go up, while it doesn’t have any impact on other issues, the working capital will definitely go up. The number of days in the cycle doesn’t change, but the value goes up because everything is much more expensive. So our working capital will go up, our short term debts from the bank will go up, everything will go up. But what will also happen is our turnover will go up and hopefully we’ll be able to maintain the EBITDA margins. So it helps us in terms of overall profitability. However, the working capital will definitely go up even at the same number of.
Even at the same cycle of working capital. That’s great.
Pakshal Jain — Analyst
Sir, just one last question regarding the recycling bit on the, on the newly come the new company that we are looking at. So what are we also looking at the recycling bit in the sense that are we also looking at plastic as a recycling material or what else are we looking at in that company in terms of this thing, the recycling part mainly arrow plastic.
Devendra Surana — Managing Director
So currently the form in which we import copper, it’s mainly wires, household wires, other kinds of cables. So this plastic that we get is mainly our own in house plastic that we’re not buying from outside. So currently without much value addition, most of it is going outside the company. So we’re looking to recycle this plastic in the, in our own company and we’re going to set up a few processes for that. That’s what your question is. So there is a chance of margin improvement in the current business as well. For that if we are using the product which is not being used, it. Will go up a little, but it not. Yeah, impact much on the back margin. Shouldn’T increase by that much from plastic. From my understanding what happens is as the copper prices go up there is a pressure on us because what happens, the EBITDA per ton on copper doesn’t go up so much but to maintain that 5% EBITDA margin we have to do all this type of other things to ensure that even at a higher level of copper we maintain that 5% margin. Got it. So that was looking at the.
Pakshal Jain — Analyst
The margins will remain same. So got that answer. Thank you so much.
Devendra Surana — Managing Director
Yeah.
operator
Thank you sir. We’ll move on to the next question from Mr. Madhur Rathi.
Madhur Rathi — Analyst
Thank you for the opportunity sir. I wanted to understand regarding our raw material sourcing arrangement because it seems that this will be the biggest challenge going forward. So if you can help us understand how do we plan to scale that up to reach the 5000 crore revenue mark that we have.
Devendra Surana — Managing Director
So Madhur, the good thing is that we have now sourcing arrangements throughout the world. As I said, from South America to Australia to you know, every corner of the world and we have been present everywhere. We have built up a reputation for being a great company to deal with. We have sponsored events like the material recycling conferences and put our name right up till there and created lot of contacts, links and relationships all over the world. And touchwood from one year back when we used to find it difficult to source material. Now we are in a situation to choose our sources of material to ensure that our requirements is full.
One of the reasons of our higher inventory is because now we are getting more material than we actually would want. So hopefully with this type of rapport as well as reputation which we have built up we should not have a problem sourcing 5000 crores worth of scrap.
Madhur Rathi — Analyst
Got it. And sir, what is our current cost of debt? And you mentioned that we’ve been upgraded by the credit rating agency. So where do we see this going going forward?
Devendra Surana — Managing Director
About 8.5 to 9%. And going forward I guess we may save about 0.25 or so post our upgrade in rating from BBB to triple B plus. And we are hoping that after the announcement of our yearly results we’ll try for A minus and that will give us a space of 0.5 to 1% in further reduction of borrowing cost.
Madhur Rathi — Analyst
Got it, sir. What was the sir, in our investor presentation? Sir, our beta for kg has grown from 19 rupees for in FY25. 9 months to 37 rupees. So what was the inventory gain that led to this increase and what was the value added portion that led to this increase?
Devendra Surana — Managing Director
So most of this is only the value added portion increase in the ebitda margin has gone up or margin per ton has gone up. Mainly because of moving towards value added products. Even in the commodity sales we have regretted sales where the margins are lower. And looking at higher margin commodity sales that has really helped us increase our margin. Also there is a secondary level. When the prices go up there is a higher demand from the market and we are able to get a better value addition. When there is a lower prices there is less demand from the market and the margin comes down.
But inventory gains is negligible in this.
Madhur Rathi — Analyst
Okay, so there was no inventory gain during the 9th.
Devendra Surana — Managing Director
Yeah.
Madhur Rathi — Analyst
Okay. Sir, just A final question from my end sir, you may sir, what is the area why area of these three land parcels and for the other two land parcels or what kind of. So are we planning residential only or can we go for the commercial real estate which can provide a good rental income to the our subsidiary going forward.
Devendra Surana — Managing Director
So one area is prime for residential which Narendra has already informed you. The other two areas we have not yet put it out there. Both are again in the industrial areas. One area can be converted both to residential and offices. One area will probably be better suited for warehouses and others. So we are still looking at the options for the other two. First we are working on one part of it.
Madhur Rathi — Analyst
Got it sir, that was from answer. Thank you so much and all the best. And sir, it would be very. Sir, on a valuation front sir, these rental real estate get much better than residential business. So I would like you to consider those. So thank you so much and all the best.
Devendra Surana — Managing Director
Thank you so much Madhur.
operator
Thank you sir. We’ll take the next question from Mr. Mitesh.
Mitesh — Analyst
I had one follow on question with respect to recycling and with respect to competition. So there was a recent announcement by Jain Resource Recycling based out of Chennai that they’re going to put up a copper busbar plant. And again a flip question related to the same entity. How is it that they are able to generate a much higher market cap because of much higher profitability being in the recycling business. However, we having in house consumption and a legacy of, you know, being in this commodity for a very long period. Where are we not able to match up to the recycling margins which you are now planning to enter?
Devendra Surana — Managing Director
Yeah. So what Jane is planning in terms of busbar, we are already doing it for quite a few years. And you’re right Jane, recycling and us are more or less in the same space. Both of us are doing a lot of copper products. But in addition to copper, Jain also does aluminium lead and I think plastics in a very big way. We are trying to get into plastics so that our margins can go up. Aluminum and lead being lower value items, the EBITDA margin is normally a little higher as a percentage margin per tonne. I don’t think there will be too much difference in terms of valuation because of our lower return on capital employed.
I think our valuation is not as much. I think Jane and others are able to garner much higher premiums because the return on capital employed is much higher. We have a much higher working capital cycle. That’s the reason our because when we do value added products we need to give Credit. When we give credit, our cycle becomes slightly longer and our capital employed is also going up. That is my basic understanding why we are not able to match the valuation of.
Mitesh — Analyst
But also in terms of the shareholding, we don’t have any domestic. Sorry sir. Also in terms of our shareholding, we don’t have institutional shareholding on our captable versus them. So does that also create an impact?
Devendra Surana — Managing Director
It does create an impact. Because you know this whole ESG and environment situation which is giving a lot of premium. We have never been able to garner one because our market cap is less than 1000 crores. So a lot of. We are out of the radar of a lot of companies. From that point of view, hopefully we should soon get there.
Mitesh — Analyst
Okay, thank you.
Devendra Surana — Managing Director
Thank you very much. Hopefully all this exercise, what we are doing is also one reason why we make our awareness and people like you question why we should be valued less. I mean it’s in both our benefits to catch up the train.
Mitesh — Analyst
Yeah. Yeah. Thank you very much.
operator
Thank you. Sir, we have another question from Mr. Atul. So please unmute yourself and ask the question.
Atul Rawal — Analyst
Sir, this is a follow up question. Since the copper prices are fluctuating too much, I was just curious about how do we match the import prices of copper scrap visa vis the material that we sell the final product. Since because of the so much of fluctuations, maybe at times it could be gains, at times it could be great losses. If you can throw some light on that. Thank you.
Devendra Surana — Managing Director
So what happens, Atul? The pricing in copper is always based on the lme. So our purchases and sales are more or less. You can say they match out. So we also buy on the LME basis. We sell on the LME basis. So while on a daily basis there is a lot of fluctuation. Also our sale prices are based only on our purchase price. I mean today if I buy at thousand rupees I have to sell at 1100 rupees. Tomorrow if I buy at 1100 rupees I have to sell at 1210. So that that works out straight away.
Atul Rawal — Analyst
Okay, sir. Right. So normally there would not be kind of fluctuations based on whatever fluctuations are in the prices of copper translating into commodity.
Devendra Surana — Managing Director
In our commodity you can never say never. But at the same time we manage it very well along with our hedging policies so that it really doesn’t affect our overall working. So we manage the commodity volatility. We have been doing it for the last 40 years. So we are able to manage it reasonably well. Thank you. We’ll take the next question.
Mitesh — Analyst
Sir, do you have any other question?
Devendra Surana — Managing Director
What I see is are some of the recycling Companies recently like 1 sunlight recycling in Gujarat. So they have been doing it, they are selling it much lower EBITDA margins but their working capital cycle or their credit period is very less. So maybe they’re kind of bill discounting or something like that.
Mitesh — Analyst
What happens is Sunlight is making ccr. So it is only one process.
Devendra Surana — Managing Director
Okay. So whereas we are and most of the probably scrap is domestic, we import the scrap, Lead time is longer. Our scrap is in the form of cable. We need to process the cable scrap. And then when we make the CCR we also make value added products which again takes a longer lead time. In addition to that we are giving this to directly to OEMs rather than to big businesses which are big cable companies or others like Sunlight does, where there is a bulk sale and an immediate payment, we give it to OEMs where there is a 30 days the payment cycle.
Atul Rawal — Analyst
Okay, thank you.
Devendra Surana — Managing Director
Thank you.
operator
Thank you. Sir, we have one question in the Q and A tab. How much recycled copper is used in house? What has been the impact on margin due to usage of recycled copper?
Devendra Surana — Managing Director
So our predominant use is recycled copper only. And I mean we use very little virgin copper. We do use about 10 to 15% of virgin copper. So our entire business plan is based on recycled copper.
Devendra Surana — Managing Director
Okay. Sir, do we have any other question from any other participant?
Devendra Surana — Managing Director
Thank you very much.
operator
Any closing remarks?
Devendra Surana — Managing Director
I think we did it well within one hour. So I think that should be comfortable. Thank you.
operator
Thank you sir. Thank you to the whole management team for a very interactive session. I thank all the participants also for their engagement. I request all the participants that if any of your question is unanswered, I’m dropping the mail IDs in the chat box. You can reach out to us anytime and we’ll be happy to answer all the questions. Thank you everyone. Thank you so much. You may now disconnect.
operator
Hello.