Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Bhagyanagar India Ltd (NSE: BHAGYANGR) Q4 2026 Earnings Call dated May. 02, 2026
Corporate Participants:
Narendra Surana — Founder
Devendra Surana — Managing Director
Advait Surana — Business Development Manager
Analysts:
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Good day everyone and welcome to the quarter four and fiscal year 26 earnings call for Bhaginagar India Limited. Thank you for joining us today. This call will cover the company’s operational and financial performance for the quarter and the full fiscal year followed by an update on strategic priorities going forward. Please note that certain statements made during this call may be forward looking in nature based on companies current expectations and assumptions. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated.
The company undertakes no obligation to publicly update or revise any forward looking statement except as required by law. Participants are advised to exercise due caution and not place undue reliance on such statements. This call is being recorded for compliance purposes. Representing Bhaginagar India Limited we have on call with us today Mr. Devendra Surana, Managing Director, Mr. Narendra Surana, Founder, Mr. Advait Surana, Business Development Manager Mr. Surendra Vitoria, Chief Financial Officer and Mr.
Rahul Surana, Financial Manager. I now invite the management team to share their opening remarks. We will subsequently open the floor for the Q and A session. Thank you. And over to you.
Narendra Surana — Founder
Yeah. Good morning. Everybody gives me pleasure in welcoming you all to the investor call and presentation of Bhagyanagar India for the year ending 26 and the presentation for the last year as well as the forthcoming developments that are taking place in the company I now hand over to Devinda Surana.
Devendra Surana — Managing Director
Thank you Narendra. So I’ll just make a few statements and we’ll try to run you through a presentation which will give us more details about the company. Yeah. So three generations, 40 years. One mission to make India copper world class. For the last 40 years we have been producing copper with an unblemished track record of no delayed payments to any suppliers, banks or any institutions. We have 500 plus clients with enduring relationships of over 30 years anchored in quality, integrity and service.
Our capacity has now reached 35,000 metric tons this year with a new 60 acre integrated facility near Hyderabad. We have two ISO certified certified manufacturing plants and Pan India customer base across all sectors. And also in exports this year we have achieved 59% value added products with a lot of new products which are coming in especially Silicon Valley. Silver plated bus bars and tin plated bus bars for data centers, auto components and others. So a brief journey of our company. Founded in 1982 by my brother and my father, we have been in copper products.
We started as Copper Commodity play, then in 1988 we started foraying into value added products and for the next 1518 years we went into various value added products until 2017 when we took over the 60 acre facility and got into the backward integration of copper recycling. And for the next six seven years we were concentrating on recycling of copper scrap imported from all over the world. Over the last three years again now the focus has shifted back to value added products on one side as well as increasing our capacity and capability on the backward side of scrap processing.
These are the various products which we are producing to and supplying to 500 customers. These are across various sectors whether it is auto, electricals, panel building, switch gears, transformers and various other sectors. Solar and various other sectors. Now I hand over the MIC to Advait to take us through the presentation for the quarterly and annual performance of the company.
Advait Surana — Business Development Manager
Hello everyone. So this is Our financial year 26 results and this has been an outstanding year for us. For the first time in our history we have crossed 2000 crores of revenue. For the first time in our history we’ve also got an operational ebitda of over 100 crores and and for the first time we have crossed 50 crores in PAT. These are some of our ratios and numbers for the FIA 26. Our ROE was 19.5% this year which compared to last year of 6.8%. And an ROCE was 16.3% this year compared to last year 6.84%.
So this is a small market snapshot that we’ve shown. The current price of Bil on 28th April April stood at 277 rupees which was a sharp increase since the end of the financial year. We have almost doubled our price since March 31 and this shows the confidence that the market has in US. Our one year return for our share was around 285%. The PE ratio of the company today is 17.71%. So how did Q4 stack up compared to the other quarters of the year? So Q4 was our best quarter for the financial year.
We had revenue from operations of around 735 crores and profit after tax of around 18.5 crores. As you can see the upward trend. Even though this was the standout year for us, Q4 was much better than the comparing the rest of the year. In Q4 alone we had an operational EBITDA of 36 crores and a PAT of 18.5 crores. So this is our profit and loss statement for the four quarters and the last two financial years. This presentation has been uploaded on our website for anyone to take a look. So let’s talk a little bit about our margin and our margin profile.
So since we have made a shift in our mindset of going into value added products, our margins have increased a lot of in Q3 and Q4 we’ve achieved around 5% EBITDA and 2.2 and 2.5% of PAT. If you compare this to last year, our EBITDA has grown up almost doubled and a PAT has gone up by 3.6 times. This is our balance sheet if anyone wants to take a look. As one of the highlights is our total equity which has gone from 193crore crores in FY24 to 207crores and then from 207 to 257. And this increase in equity was not done through dilution, this was all done through retained earnings.
So we also wanted to talk a little bit about our working capital and why it has increased so much. So our working capital has gone up from 157 crores to 230 crores. And this increase in working capital is proportional to our revenue. So there’s no, no reason to be concerned. And our outside liabilities compared to operational EBITDA has gone from 7.7 to 2.6, which is a very good sign and good for the future growth of the company. So this is one of the highlights. We wanted to talk about our product mix and EBITDA per kg.
In Q1 we had only 52% of value added products. And due to demand from the and due to increase in capacities of value added products from Q1 to Q4, we’ve jumped almost 10% in our value added products. And if we look at the growth of a company’s revenue, it was not only from increase in the price of copper but also from increase in volumes. Last year we did around 18,000 metric tons of volume of copper sales which has gone up by 34% to 2246, 24,000 metric tons. And our EBITDA per kg for the year is around 43 rupees, which is very high compared to our peers.
And as you can see over the four quarters, our EBITDA per kg has been trending upwards. With the quarter four we achieved around 62 rupees per kg. So a little bit about copper industry and where it is headed in the Future. So in 2023, India consumed 26 million tons of copper. The world consumed around 26 million tons of copper which is predicted to become 50 million tons by 2050. So this is almost doubling. And India is expected to become the second largest copper consuming economy. And this growth will mainly be driven by three sectors EV and automotive.
Because EV requires a lot more copper than regular cars. Power and electrification is also a big growth factor and renewable energy. And BIL is in the perfect position. Perfect. Perfectly placed to tap into all these industries. We are already supplying to all these industries. And as these industries grow BIL and their value added products will be able to cater to them perfectly. Another project we wanted to highlight was our plastic recycling project. So we are adopting this closed loop philosophy in our company where anything that comes into our factories there has to be value addition done before it goes outside our factories.
So when we import scrap we get a lot of byproducts with the scrap like plastics and aluminum. So right now we are planning to invest around 10 crores into plastic recycling. Where the cable waste comes in we process them into different grades. We make granules and with aluminum and other metals we make ingots and then we put them back into the supply chain. So this is going to be going to scale this up over the next year. So this is a brief summary of our financials. Our operational EBITDA margin is 4.46%.
Our patent margin is 2.1% and a P E ratio is 17.71%. Thank you.
Devendra Surana — Managing Director
Before I open it for questions I would just like to give you the current status of our corporate restructuring. As has been earlier announced the company is in a structure of demerging into two sectors. One is the real estate sector and one is the copper sector. The current status of this process is that we have got approvals from shareholders, creditors and other agencies. Those meetings have been held and completed in the month of March and the joint petition has been filed before the Honorable NCLT Hyderabad Bench with respect to the scheme of demerger and once because all the approvals have been taken now the matter has been listed for Hearing by the Hon.
NCLT on the 9th of June before which time we need to obtain no objection certificates from the Registrar of Companies Regional Director Official Liquidator and the Income Tax authorities. Process is underway and we are hopeful that we’ll achieve get all this NOCs and place before the NCLT on 9th of June when the next hearing is there. After which the company will get demerged into two separate verticals. Thank you. Now we open up it up to for questions.
Questions and Answers:
Operator
Thank you to the management team for those comprehensive opening remarks. We Will now begin the question and answer session.
Unidentified Participant
Participants
Operator
Who wish to ask the question are requested to please raise their hands. We’ll take the first question from Mr. Kushal Kaslival. Sir, please unmute yourself and ask the question. Till that time we’ll take the question from Mr. Shubham Gupta.
Devendra Surana
Yeah Shubham, we can hear you.
Unidentified Participant
Sir, like. Just want to check like what is your future guidance in terms of EBITDA margin And like with what pace the top line you will be able to grow. And apart from that like will you raise, raise, require any additional funding in future?
Devendra Surana
Thank you, Shubham. We have achieved almost 5% EBITDA margin during the last two quarters. We are hopeful of maintaining 5% EBITDA margin throughout the next year. And on an increased top line. Our top line projection as in earlier this thing has been project. We are aiming for 3000 crores in the year 2030. That is in three years we are planning to reach 5000 crores in the year 2030. We are. In five years. We are planning to. Three years we are planning to double the turnover to 5000 crores which translates into between 20 to 25% CAGR.
25% CAGR is our target for the next three to four years.
Unidentified Participant
Okay sir. Thank you. Thank you sir.
Operator
Thank you sir. We’ll take the question from Mr. Kushal Kaslaval. Sir, you’re not audible. Miss Disha, please ask your question.
Unidentified Participant
Hello.
Devendra Surana
Yeah, Disha. Yeah Disha, we can hear you.
Unidentified Participant
Yes, thank you so much for the opportunity. And congratulations for a good set of results. Sir. So firstly you mentioned that this 25 sort of CAGR that you mentioned. And so this next year, this 25 growth, how much of this will be volume driven and how much of this will be priced during. Because this year there was a huge benefit due to price increases. Price increase of copper. So how do you see that panning out?
Devendra Surana
So this year roughly about 10% of our growth has been in price and 35% has been in volume. Out of the 25% we are expecting 20% volume growth and 5% increase in prices. Between 15 to 20% should be our volume growth minimum every year prices we cannot predict too much.
Unidentified Participant
Correct. Correct. So basically the proportion will be 20 and the rest will be for price driven.
Devendra Surana
Yeah.
Unidentified Participant
Yeah. And just in terms of your capex. So you mentioned 10cr capex for plastic recycling. Any other capex. I think one
Devendra Surana
Slide was mixed. Missed out. Will just put that slide. This has that CapEx no. 40 crores. So we have proposed 40 crores CapEx in the last, in the next two years. I think somehow that slide must have missed been missed out. We are proposing about 40 crores capex in the next two years.
Advait Surana
So
Devendra Surana
Yeah,
Advait Surana
This slide was missed out. So this was, this is our strategic initiatives that are going on and we’ve planned so a mix shift from commodity to value added products which we’ve been doing for the past two years. So we’ve already reached around 62% at the end of quarter four and we are planning to get this up to 66% by the end of next year. We’ve gone from 30 metric 30,000 metric tons to 35,000 metrics tons this year alone and we plan to increase that as well. So we’ve also added new heat recovery systems that increase the fuel efficiency and decrease our cycle times on all our furnaces and that is going live this year.
So we’ve included. We started new products for, for AI data centers which are silver and tin coated bus bars. This is also an export product which we’re already exporting to Canada and a few other places. And as demerger as my dad has already mentioned we’re planning to separate our company into a copper business and all our lands into real estate so we can streamline both the processes and work on them. And we are also adding recycling verticals of aluminum and plastic.
Unidentified Participant
Okay, that’s go back to the questions
Advait Surana
And over here as mentioned we are Planning to invest 40 crores over the next two years on capacities and new ventures.
Unidentified Participant
Okay, okay, that’s very clear. So you mentioned about this silver and tin busbar the new product that we’re starting for data centers. So just wanted to get your sense on what sort of opportunity size do we see? What sort of margins do we get here? If you could elaborate that on that a bit.
Devendra Surana
So we are. This product will give us roughly about 10% EBITDA margins and this go for AI, AI data centers and other data centers all over the world. We have started exporting to Canada and US and also within various data centers in the country we are supplying this.
Unidentified Participant
So how much contribution in revenues do we see from this segment for FR27?
Devendra Surana
Just the silver bearing and tin bearing we have just started right now. The contribution to our top line is very very small right now. But going forward in the next three to five years we hope to reach about 7 to 10% in the sectors. But it will be a slow ramp up.
Unidentified Participant
Okay, okay. All right, that’s it from my side. Thank you so much sir and all the best
Devendra Surana
Thank you.
Operator
Thank you. We’ll take the Next question from Mr. Manan Shah.
Unidentified Participant
Am I audible?
Devendra Surana
Yeah, yeah, Manon, we can hear you.
Unidentified Participant
Hi. Hi. Sir, Congratulations on good set of numbers. My first question is recently we read your article in the newspaper where you mentioned about there’s low availability of scrap, copper scrap. So what is the on ground situation? Can you elaborate on that?
Devendra Surana
Yeah, I think that article was a little bit of overkill. But what has happened is scrap is available from all over the world. The scrap coming from Gulf, which is of a short duration, short lead time, material has suddenly dried up. And the material which is coming from the rest of the world, the shipping lines have been diverted because a lot of shipping lines have a transit point, Dubai or somewhere in the Gulf before coming to India, that has got delayed. Having said that, we are fortunate that our dependence on scrap from Gulf is very, very low compared to the rest of the industry.
That was more on an industry focused point of view. While I guess roughly about 25% of the scrap comes from Gulf. We are dependent on scrap from Gulf to less than 5% of our material comes from Gulf. We get much more from other parts of the world.
Unidentified Participant
And just
Devendra Surana
Because you have asked this question, I think I might as well say that our exposure to US is 35% which is the highest for a single country balance. We have exposure to Brazil, we have exposure to Europe, that is United Kingdom, Australia, Colombia and Canada which are roughly about 7 to 8% each. And Saudi Arabia is way down ninth in our exposure list which is about 4%. So that’s why we are less affected. But I was talking more in terms of the industry which is really affected because the place to get scrap immediately is Dubai and Saudi which has been badly affected.
Unidentified Participant
Okay. So after the war situation we can assume that the availability will go to normal levels, right?
Devendra Surana
Yes, yes. I mean even now we are not very badly affected. There is some effect of the war. But in terms of availability, the industry is affected much more than we are.
Unidentified Participant
Okay. Okay, thank you. And my second question is why is our pledge percentage so high 96%?
Devendra Surana
Sorry, I didn’t get that.
Unidentified Participant
Why is our pledge percentage so high 96%.
Unidentified Participant
Pledge of what? We don’t pledge of your shares
Unidentified Participant
On shares.
Unidentified Participant
Nothing.
Devendra Surana
I think there is some error in that. We, we. We have very small pledge of my shares which have been given to MCX as security for our hedging.
Unidentified Participant
Okay. There
Devendra Surana
Is no pledge given to banks for raising of funds. There is zero percentage there. A small percentage of my personal shareholding has been given to MCX, which is less than 5%. Which is less than 5%.
Unidentified Participant
Okay, so there might be some error. I think it
Devendra Surana
Must be reverse. It must be 96. Must be the unpleasant one, I think. Where have you seen that? We might have to collect it. Even.
Unidentified Participant
Even. Screener shows 96% pledge.
Devendra Surana
Okay, we’ll get that checked up and corrected it.
Unidentified Participant
Okay, thank you so much.
Devendra Surana
Screen.
Operator
Thank you, sir. We’ll take the next question from Mr. Weber. Mishra.
Devendra Surana
Yeah, we can hear you.
Unidentified Participant
Hello, sir. Congratulations for the very, very strong set of numbers. Thank you. Mostly my questions have been answered, sir. Actually, I was also going to ask about that article I read. A bit worried. Now you have cleared it. One question, sir, regarding the promoter holding. I have been observing that for the last two quarters in December and this March, I think 0.5% kind of promoter shareholding has been reduced and in December I think 5% so. But you have not raised any company has not raised any funds and all.
So has there been any selling in the open market from the promoter side? Why has it reduced?
Devendra Surana
Yeah, so the December quarter is mainly wrongly reported. What shares I told you I had pledged to the stock. The MCX has longly been reported as sold. Whereas in the this current quarter there has been a small share sale of shares from the promoters to raise a little personal money for some of the promoters. But in the December quarter, the main 5% which is there is a pledge, not a sale.
Unidentified Participant
Okay, so could you please get it, I mean corrected on the. Yeah, yeah. We have sent
Devendra Surana
Already three, four letters. I think it’s already there in our website and other places. We are finding it difficult to get that December 1st corrected.
Unidentified Participant
Okay. Okay. All right. No issue, sir. Thank you. Answer one more question. Any plans about lead recycling going ahead? Have you finalized anything on that?
Devendra Surana
No, we were planning to look at various types of recycling which was there. Lead recycling. For the time being, we have dropped it least for the next one, one and a half years. We are not looking at lead.
Unidentified Participant
All right. And so plastic recycling plan of going from 150 capacity to 500, is that intact?
Devendra Surana
Yes, in fact, Advaita just mentioned that is on. We are actively looking at increasing the plastic recycling. But just to be very clear, we are not looking at sourcing local plastics. It is only the plastics which comes along with the cable in our imports which we want to recycle and make value added products. We are not going to source any plastic scrap. There’s only recycling of scrap which comes along with our copper.
Unidentified Participant
Okay, okay, okay. Okay. Thank you so much, sir. And all the best for the future. It’s very nice to see company scaling so well. Thank you. Thank you. Thank
Devendra Surana
You so much. Thank you,
Operator
Sir. We’ll take the next question from Mr. Pratik Shivasta.
Unidentified Participant
Hello sir. Again congratulations on a great set of number and hoping the same will continue in future. Thank
Devendra Surana
You.
Unidentified Participant
Question is just two days back Ministry of Mines has approved 58 entities which are eligible for this incentive screen for promotion of critical mineral recycling.
Devendra Surana
I see some
Unidentified Participant
Crappy secular processors list also. Names are also in the list Like Nupur Recyclers, Bahiti Recycling. Are you guys also there or in conversation with Ministry of Mines?
Devendra Surana
Yes, we are in touch with Jain, RDC and the chief there. We are still working out what is the right way to approach them. For any of such help. We are in touch with JNRDC in Nagpur who is the nodal agency for this scheme. But we have still not given any concrete proposal for this scheme. We are already actively considering some ideas but not yet in the process.
Unidentified Participant
Got it. And sir, you mentioned you are not going to get into the lead recycling. Is there any reason or let me ask also put it in question in the other way. Apart from copper and plastics is there any other high margin recycling businesses out there which we could participate in?
Devendra Surana
So what has happened is the three major red lead recyclers in the country are all getting into copper and copper value added products. So I felt that probably our area is more practical and reliable than lead recycling.
Unidentified Participant
Right, sir? Right. And any other more higher margin business than copper and plastic out there.
Devendra Surana
No. The higher margin business will be various copper value added products. Like has been mentioned, we have 500 customers across various sectors. Switch gears, transformers, autos. So we see a lot of opportunity for giving more service to the same customers with higher value addition. So we are always on the lookout of more value added products in copper. That is our primary focus. Because we have our expertise in copper for the last 40 years. We want to capitalize on that. Whereas we will be looking at plastic and aluminum in a small way.
To ensure that whatever we are getting we add some value to the scrap which we are already having.
Unidentified Participant
Thank you, sir. Yeah. Let’s hope we continue on our journey on the higher value added products and up the value chain. Thank you. Thank you.
Devendra Surana
Thank you, sir.
Operator
Thank you, sir. We’ll take the next question from Vedant Agarwal.
Devendra Surana
Yeah, Vedant, we can hear you.
Unidentified Participant
Yeah. So my first question is regarding primary production. You know, we know that what is going through concentrate shortages you know, which is even projected to get even worse with time. And even Adani’s Kutch copper smelter is having difficulty in sourcing concentrate. So do you think this gap in demand and supply has to be met by recycled copper?
Devendra Surana
I think there is no doubt about that. In fact, all the primary producers are also looking at secondary routes of getting copper. So what has happened is, if we need to understand this a little more in detail, sulfuric acid is a byproduct of making primary copper. And that price being very high in China, we see that most of the refining of copper primary ores is going to China at a very, very competitive price. And unless the manufacturer of primary products can make a lot of money on the by products, whether it is sulfur or gold or silver, they cannot survive.
So this trend is going to continue, especially because the ore qualities across the world is coming down the availability. While right now there is no shortage for the next two or three years for copper, but we foresee a big shortage coming after three or four years. And there is no other way but to ensure that we recycle and recycle more efficiently and much better.
Unidentified Participant
Thank you. Thank you. So my second question is on EPR. So my understanding is that OEMs now have a minimum recycled content mandate and that threshold will rise every year from now. And I read somewhere that Bhagya Nagar is among the first in India’s copper industry to integrate epr. So can you throw some light on how this all EPR thing will work and how this will benefit us?
Devendra Surana
So I think there was a miss this thing that we are the first. Yes, EPR is on our radar. EPR has been notified only on April 1st of this year. We are ready to provide EPR services to manufacturers because we have been recycling and also making value added products. So in that way we are the best position to take advantage of the EPR policy. However, we are not first of the block because EPR in copper has still not started at least until April 1st of this year. And once this year is over, very small percentages of copper will come under EPR and slowly keep going up year on year.
But yes, it is going to be a new revenue stream. It is a good advantage for us. More importantly, EPR also makes the customer aware of the importance of using recycled copper. So that is the reason EPR is going to be important. But for this financial year and maybe even for the next financial year, it will not have material impact on the figures of Bhagyanagar. But being in that Sector really gives us an edge for the future.
Unidentified Participant
Okay. Okay, sir. Thank you. So my last question is on EBITDA per turn. So currently we are doing 62,000. Do you think the 62,000 will sustain and will grow from here or in Q1 we might again fall back. Any, any guidance on that?
Devendra Surana
So we are targeting to maintain 5% which is there. And I think we are quite confident of maintaining 5%. However it is quite difficult for me to say that yes, we will grow at the same rate at which we have grown last year. If we maintain 5%, I think we should be happy as a company.
Unidentified Participant
Sir, I was talking about EBITDA per ton. So
Devendra Surana
EBITDA per ton 5% comes to about 62 rupees. I am looking at 5% current market prices of copper. It comes to about 60 to 65 rupees. I am not looking at growing much faster than the copper prices. If the copper prices go up by another 10%, maybe my EBITDA per ton also will go up by 10%.
Unidentified Participant
Okay, so but a realization for FY26 was 963, you know and current copper price is 1300. So can we expect that next year without any volume growth Also we will have 30 to 35% of kind of growth in top line.
Devendra Surana
25%. Yes. So if you see the last quarter we did 735 crores. So even without any further growth in volume and the same prices of copper considered we should be 28 to 2900 without any growth in volume.
Unidentified Participant
So
Devendra Surana
Assuming the same price of copper again.
Unidentified Participant
Okay, so you mean that if you do 20, 25% volume growth we could look 40, 50% also number. That’s, that’s a possibility on table. Correct.
Devendra Surana
If this we are looking at 20 volume growth compounded with whatever the price growth realization we can get.
Unidentified Participant
Thank you. Thank you so much sir. Thank you so much. So just one last, you know, one last request. You know. So the. The investor presentation that was uploaded on exchange, you know, it’s not very clear, you know, I guess it was made by some AI tool or not. So can you request your higher agency to you know upload a clear and more vivid investor presentation? That’s a final request from my side. Thank you sir.
Devendra Surana
Okay, we’ll do that.
Operator
Thank you sir. We’ll take the next question. We’ll take the next question from.
Unidentified Participant
Thanks. Thank you for the opportunity. Sir, my first question is on the Evita button. As you said, we will be maintaining the 5%. So when I look at your peers, let’s say Precision and all the leaders in the industry doing some 38,000 to 40,000 EBITDA per turn. Right. And only one player is doing 62,000 EBITDA per turn. And the reason behind that is, you know, they are into more higher KV and for higher KV requires more, you know, district PGSIL and you know, the more utilities gives better. Hello.
Devendra Surana
Yeah, please tell me.
Unidentified Participant
Yes, so I was asking on the EBITDA button, my question is when I look at the EBITDA pattern you are saying 62,000. There’s only one player doing the this amount of EBITDA button. So just wanted to know what is the reason. And if I look at the value added product, it’s only still 40%. So what has been the change which has led to such a witta pattern in this two years?
Devendra Surana
So like I said, we are doing both recycling as well as value added. So if you look at company like Precision which you have mentioned, they are doing mainly the finished products now they are getting into recycling. And if you look at other my other peers who are already in recycling, they are already having EBITDA margins of over 5%.
Unidentified Participant
Okay, got it. The pure
Devendra Surana
Recycling companies who are now getting into value added, they are also having about 5% value added or more EBITDA margins.
Unidentified Participant
Got it. And so my second question is on the plastic and aluminum recycling you are trying to get into. So when we see other leaders or recycling leader, so they are not able to, you know, hedge. You are able to hedge copper or lead but they are not able to hedge plastic or aluminum. So due to that there is a volatility in their, you know, profit and loss statement and their margins are getting affected. So just wanted to get the rational why are we you know, going in such a space, you know, where there’s not much volume if I look at as compared to copper or let’s say other non ferrous metal.
Devendra Surana
Aryan the point is we get a lot of plastic waste which is getting generated in our plant. Our idea is not to source plastic waste or even aluminum waste. This is all getting generated out of the cables which we get into the factory along with our copper. So we are only planning to ensure that we get some additional value addition of the scrap plastic and the aluminum which we get. We are not planning to buy aluminum or plastic scrap to recycle them. So we really won’t be very much exposed to the LME variations of either plastic or aluminum because most of them come as byproducts in our cable.
Unidentified Participant
Okay, got it. And so on the paywall days I have seen like all the other some of their peers as well. Copper is bought on cash, right. But when I see some of the other peers like let’s say precision only they use LC which have you know, led to the increased in payable days and it is shown as operating cash flow positive. So just wanted to get your sense. When can we you know, use LC as a tool for increasing our operating cash flow.
Devendra Surana
So SBLC is being used by some of my peers. Somehow I have not been finding it very advantageous and I didn’t want to take exposure on Forex or other places. And even my suppliers are a little resistant in working on lcs. So we might get into SBLC sometime in the this year depending on how the metrics are for the interest rate and other things. But that is somewhere in the future. But right now we are not doing anything on that. And yes, that is increasing our operating cycle.
Unidentified Participant
Got it. And this last question, so when is whenever there is an increase in price of let’s say copper, your working capital requirement increases which is indirectly leads to the higher interest cost. Right. So just wanted to get the sense from your customer, let’s say are you able to you know, pass on the increase in prices or the EBITDA stays consistent. Because you know when I have seen the industry your some of the peers maintain same EBITDA button but due to the increase in price of copper, you know, the interest cost increases.
So indirectly your pad growth is less than your EBITDA growth. So yeah,
Devendra Surana
What you say is quite right. We have a pass through mechanism of the copper prices to the finished products. However, passing on the additional EBITDA per ton is a little bit of a stretch and for that we need to get into more and more value added products either on the finished goods side or to ensure that our backward integration becomes more efficient in terms of recycling our material in a much better way. The pass on is typically only for the price increase, not the additional margin. You are absolutely right.
Unidentified Participant
Got it. Thank you. Thank you sir. That’s from my side. And best of your
Devendra Surana
Thank you.
Operator
Thank you. We’ll take the Next question from Mr. Manan Shah.
Unidentified Participant
Sir, just some follow up questions. So I’ve seen that many of the other copper recyclers have also expanded capacity. Even Adani and Hindalco are coming live with their smelters. So not right now but do we see over capacity risk or margin compression in copper over the next two, three years?
Devendra Surana
The the scrap recycling business has always been quite fragmented and there will Always be competition. Yes. Adani and Hindalco announcing that they’ll come into recycling is also going to be a an issue going forward in future because one of the biggest challeng in recycling is also sourcing. My biggest advantage in this is we’ve been in this business for a very very long time and we are in copper business for 40 years and that has given us a very good edge in sourcing material all over the world.
And like I said, we don’t even concentrate on the most obvious source which is Gulf. Most of the people who source copper scrap get it from Gulf. Whereas our requirement there is only 4%. We have deep inroads into North America, South America, Canada, in the advanced countries. So we hope that we’ll be able to maintain the competitive advantage of overall the newcomers. And like we have been discussing, the copper business is going to explode like nobody’s business. Advait had mentioned that we’ll become the second biggest consumer of the copper of copper in the world.
So while competition is growing, the market is growing much faster. That is our view on the market.
Unidentified Participant
Okay, so you are confident on your business. Okay. Okay. And my second question is if you could share some EBITDA per kilo or gross margins per kilo for your each product or commodity products like copper bus bars and copper rods and etc.
Devendra Surana
So as has been given, the range is very very high and again within the range depending on the customer customization which is done for various products it becomes very very difficult for me to say that okay, in copper bus bar I’m going this because in copper bus bar again we have sizes varying from 15mm to 300mm and each of them will have a different value addition depending on the customer customer focus. But having said that, the maximum value added products of around 10% and above are auto components, silver bearing bus bars, tin bearing bus bars, our solar products are the ones which have the highest and the lowest are basically copper ingots which are exported to China and copper rods which are given to our cable industry.
Unidentified Participant
Okay, thank you so much for the clarity.
Operator
Thank you sir. We’ll take the next question from Mr. Matesh.
Unidentified Participant
Hi, good afternoon. Congratulations on the fantastic set of numbers. I have a couple of questions to the management since we’ve we are now experiencing a exponential growth in the entire sector. Are we planning to add some professionals in the management at a senior level like a CEO, cfo, CEO etc.
Devendra Surana
So if you see our management structure which has been put in our last year last quarter’s earning report, we have very very high Level of professionalization. So each of our plants are headed by a director who’s in charge of the entire plant and the entire plant reports to them. We have. So we have two technical directors at two plants. Then we have a marketing director who takes care of the entire marketing of the team. We have Surinda bhutoria who’s a CFO who’s been with the company for over 20 years with CA with 20 years experience.
We have Rahul who has just joined us as a finance manager. So in the working group only two of us, me and Advait are from the family.
Unidentified Participant
Okay, thank you. And second, despite having all of these team in place, why are there so many issues in reporting to platforms like a screener or the BSC nsc? Because that very. You know, it affects investors like us when there are wrong figures reported there. Like a 96% pledge of the promoter is a very bad signal to the market. Right.
Devendra Surana
So I actually none of our people had flagged us 96%. But we are aware of that 5% pledge which. Which I had done in December, if you are aware, at that time the price of copper had suddenly gone up and we needed to pledge some more shares to the stock exchange. And I’d given my personal pledge that was taken as sale by some reason. And in spite of repeated reminders to the exchange, they have not corrected it. We’ll get that corrected and the split quantity also will ensure that this is corrected as soon as it can be done.
But suffice it to say that other than the small pledge given for stock, I mean MCX hedging, no stocks have been pledged to any of the banks.
Unidentified Participant
Okay, my last question is with respect to competitors. If we mentioned many competitors, so competitive, the competition from recyclers like a Jain resource, their margins seem to be much higher. Despite not being in value added products and getting into copper Value added products products only. Now why are we not able to match their margins?
Devendra Surana
So I just want to juxtapose your. This thing with earlier. I think there is an emergency allotted all over India. So just. Just hold on for a. One second. Just hold on. Yeah, so there was an. I don’t know if it is all over India but in Hyderabad there was a alert for emergency which was put on silent phones also which has come on all our phones. So that’s why it stopped. So it’s very interesting that some people are saying that my EBITDA margin is too low. And some people are saying my EBITDA margin is too high.
Hike. But my personal feeling is that 5% is a very, very good EBITDA margin. The business which we are in 4 and a half to 5% is a good EBITDA margin and we hope to maintain and try to keep it closer to 5% rather than anywhere else. I know Jane and others are getting into copper value added products and they have a much more different divergent product mix. So I really don’t know how much they are making in copper and how much they are making in other products. So I can’t comment they
Unidentified Participant
Quoting 62 on copper as well despite not being in value added products. So are we missing somewhere on the procurement side since we are also doing buzz bars. But they have only put up all of those plants now. But even their previous quarter calls they claim 62 per kg as their EBITDA margins since we’re also recycling and they’re also recycling. So where is there something which we’re missing?
Devendra Surana
So. So I really don’t know. But since the figure is 62 for copper for us also I think that is where I feel is the right margin in this. With regards to sourcing. More or less our prices are same unless the sourcing is done with advanced payment. If advanced payment is done, the prices are lower for copper scrap. Other than that the sourcing prices across the top few clients in India will be more or less the same. It cannot be much more different.
Unidentified Participant
Okay, thank you. Best of luck to the team for the next. Thank you.
Devendra Surana
Thank you.
Operator
Thank you. Sir, we’ll take the next question from Mr. Satish Patnan
Unidentified Participant
Ahead. Good morning sir. Am I audible?
Devendra Surana
Yes, Atish, I can hear you.
Unidentified Participant
Sir, just wanted to understand the. The demerging part which is on the cards. Okay, so. And related to what the guidance you have given of 5,000 crores in next three to four years. So we have achieved 2,378 revenue. Crores of revenue this year. That’s right, sir.
Devendra Surana
That’s right.
Unidentified Participant
So how much of that has come from copper? Sir,
Devendra Surana
Almost everything. Okay. Do you have the figure? I think non copper is less than 10 crores.
Unidentified Participant
Okay. Okay. And the guidance that you have given of 5,000. That is purely. That is purely for the copper part. Purely
Devendra Surana
For copper. Purely for copper. Yeah, it’s purely from copper. The 5000 crores guidances for purely copper. The demerge company which will have only the copper business will reach 5000 crores in three years.
Unidentified Participant
Okay, sir. And sir, I know it is a very. That would be a very long answer. Just try to understand if you can Say that in very short, the reason for this demerger. Sir, I’m new to this company. I’m hearing that from last con call.
Devendra Surana
Yeah, yeah. So. So if you know that this company is a legacy company which is there for the last 40 plus years and we have Bhagyanagar India which is the holding company and Bhagyanagar Copper which is a subsidiary which is doing copper business. Bhagyanagar India has a lot of land parcels which are already in the company and we also have some windmills. So we thought that going forward when we want to do a lot of focus on the copper business, we are planning to have a standalone company which will have nothing other than copper business.
There is no sort of distraction of the real estate or the windmills. Whereas the other company, Bhagyanagar India, which will remain will have real estate. And that company can then concentrate on development of real estate without having the complication of the copper business in it.
Unidentified Participant
Okay, sir. Okay sir. I’ll read more. Sir, I’ll come back to you. Yeah. If
Devendra Surana
Other question.
Unidentified Participant
Thank you so much.
Devendra Surana
Welcome.
Operator
Thank you sir. We’ll take the next question from Mr. N. Modi.
Devendra Surana
Modi, you need to unmute Mr. Modi.
Operator
In the meantime, let’s take the question to Mr. Kushal Kasliver.
Devendra Surana
Now finally we can hear you.
Unidentified Participant
Yes, finally, third time. So thank you so much for, for taking my questions again. So I have many questions actually just to begin with. Your EBITDA per turn is an interesting number. Now you’re saying that roughly 62 per kg, which means 62,000 EBITDA per ton. So in the entire industry everyone is below that number. There’s only one company called KSH International which is above that number. So I just wanted to understand. I just wanted to understand. Key how much of this EBITDA is due to recycling business and how much of this EBITDA is due to our value added products.
If you can maybe separate. Very difficult
Devendra Surana
To. Very difficult to break up because you know, across products, product we have about 15 to 20 product mixes and the content of recycled copper in various products is different. So very difficult to break it up. But roughly about 5% the EBITDA. 62 rupees a kilogram based on 1200 rupees copper price I think is sustainable for us given that there are a lot of value added products which we are making.
Unidentified Participant
Understood sir. So 500 means 50,000 you are saying is sustainable. Sustainable
Devendra Surana
5% of the price which is 60 rupees. A kilo.
Unidentified Participant
Understood. Okay, got it. Second question is on the products which we are making. So I understand we are making bus bars and in the PPT we are saying that I think 300mm we are the only player. Also silver plated bus bars which are used in data centers. So just wanted to understand how are these products unique? Do we have any, any, you know, certification requirements for launching these products? I have not seen these products much in some other companies, especially the silver plated one. And is there any OEM lock in tie up with OEM or long term contract?
Why will other people not come in these products?
Devendra Surana
So there are a lot of approvals. For each of the product we have a different approval. For some it is power grids, for some it is the international approving authority for especially for the silver plated bus bars. So for various products we have various approvals. I won’t say that the entry barriers are too high but for products like our auto electricals we have a long term tie up with the customers for, for the last 20 years and maybe for the next 10 or 15 years. For some products it is order by order basis.
For some products it’s just a question of repeat order because of the ease of supplies. So we are locked into a lot of value chains with our OEMs for a very very long period of time. So even if we don’t have any written or a specific agreement, it is just goes without saying because of the long term good relations which we maintain with all our customers.
Unidentified Participant
Understood? Okay, okay. But you are saying for silver plated bus bars there’s not much. I mean competition can come in tomorrow,
Devendra Surana
Competition can come in because it’s not rocket science. But at the same time it is not a very easy product to make and any, any rejection will be very very expensive because the silver goes waste.
Unidentified Participant
Got it? Understood. Fair enough. Last question. On, on plastic metal recycling which we are doing a along which we are saying that these things come along with copper and hence we are doing recycling. Have we thought about any, any return threshold when we invest in this project? Because this looks like something beyond our current copper work. And maybe for you it makes sense but for shareholders is it see accretive or, or margin wise will it make sense in the overall scheme of things? On the copper side if you compare.
Yes.
Devendra Surana
I mean see it will not add too much to the top line to be frank, but it is going to be very pe accretive because the some something which I am selling for 10 rupees, if I can make it 40 rupees a kilo. It makes a lot of sense for plastics.
Unidentified Participant
But then we are also investing roughly 10 crores in that project. And maybe the payback of the 10 crore will be, will be on a lower side versus our current copper business.
Devendra Surana
I mean typically for this type of investments we look at between 12 and 15 months payback, not three years or five years.
Unidentified Participant
Okay,
Devendra Surana
It’s going to be very. Yeah, it’s going to be very, very attractive. But top line is not really going to be very high. High,
Unidentified Participant
But margins will be high. And you are saying ro margins will be very high.
Devendra Surana
Yeah, that’s right.
Unidentified Participant
Okay, understood. Makes sense. Lastly on, I know we are demerging this copper business. So all this metal and plastic recycling will go away with the copper business itself.
Devendra Surana
Yeah, that’s right. Other than real estate and the windmills, everything will remain in the copper business
Unidentified Participant
Because this is coming with copper
Devendra Surana
Scrap.
Unidentified Participant
Got it, Got it. Fair enough. So do we have any estimation of, you know, market valuation of the real estate business separately and then the copper business separately? Because currently our market cap is, you know, roughly around 8,860crores. So how much market cap do you assign to the real estate business when, when you demerge? I mean this is a difficult question to answer but maybe if you can. Yeah, it’s,
Devendra Surana
You know, it’s very difficult for me to say what is the market cap? Let me tell you this figure. The real estate value in books is roughly about 29 crores. And the value is at least, at least 10 times, maybe 20 times. I don’t know how much the real estate value to assign is quite not so easy.
Unidentified Participant
So when you demerge, I mean there will be some market cap reduction in the copper business. Right. Can you indicate how much market cap will get reduced from the the most entity
Devendra Surana
Given the market discounting of real estate? I don’t think there will be any reduction in market cap for the copper company whereas the real estate company will create a new market cap for itself based on the real estate value. I’m not expecting any reduction in market cap of the copper company because that’s all based on the PE or the current earnings of the company.
Unidentified Participant
And obviously current earnings are 100% copper,
Devendra Surana
Sir. That’s right.
Unidentified Participant
Fair enough. Sir, thank you so much for answering all my questions. Thank you.
Devendra Surana
Welcome.
Operator
Thank you, sir. We’ll take the next question from Mr. Puneet Mittal.
Unidentified Participant
Can you hear me?
Devendra Surana
Yeah, Puneet, I can hear you,
Unidentified Participant
Sir. I have two or three questions. One is the guidance that you’ve given of 5,000 crore in next three years. Are you basing that on the assumption of the current copper prices and how much of that growth you see is value versus volume?
Devendra Surana
So we, we are estimating a conservative 5% increase in the copper prices year on year.
Unidentified Participant
Okay, got it. Second question. From your commentary, it really seems that you’re very, very bullish on this copper recycling business business. And you see there’s going to be a shortage on copper going forward. Why would you not be more aggressive in terms of expansion, whether organic, inorganic position and so forth? Because it seems to be a, a pretty incredible fortune in front of you.
Devendra Surana
Doubling of turnover in three years is aggressive enough for me.
Unidentified Participant
Okay, the third and the final question on the real estate side side, can you elaborate some plan on what do you have in the pipeline in terms of the real estate development and so forth? Right. Naturally we all focusing on the corporate business. But as you said, there’s tremendous value in the real estate as well. So it’ll be good to know what, what, what are your plans there.
Devendra Surana
So we have three parcel, three major parcels of real estate in the company. One is four acres in an area called Nacharam. One is a four and a half acres in an area called Upal and around five acres in a area known as Hardware Park. As of now there is only active consideration of the four and a half acres in Upal which is very close to the stadium where we are looking at various options of either developing that area or give it, giving it on joint development to somebody where a residential area can come up.
Regarding the other two parcels, we have not yet decided as to what is to be done. Once the company demergers, I think those three parcels will be taken separately and decided accordingly.
Unidentified Participant
For the first parcels, do you have any timeline in terms of when would you make a decision and when the project start?
Devendra Surana
So this is in Hyderabad, very close to the center of Hyderabad. There is a new policy of the government known as Hyderabad Industrial Land Transformation. This policy allows for multi use development and this policy has been announced in November of this year year. However, it is still not got effective. As soon as it is effective, which could be any time between three and anytime between 15 days and six months from now. I think we will be able to get started on that immediately.
Unidentified Participant
I think because there probably are other participants for the questions. I’ll restrict myself here. Probably come back to you if I have more questions through an email or something.
Devendra Surana
Thank you Pune.
Operator
Thank you sir. We’ll take the next question from Mr. Raj Sharaf.
Unidentified Participant
Am I audible now?
Devendra Surana
Yeah, Raj I can hear you
Unidentified Participant
Sir. Congratulations first of all for this great sets of number. So I have a couple of questions. So sir, please allow me some time. There is a article, article on 15th of April in Venus Standards which mention Maryland of the company and say that they spoke that there’s a delay in the shipment for the raw material sourcing. Not because we are exposed as we are not so much exposed to Gulf but the shipping hubs are in Dubai and Gulf. So even if we are sourcing from North America and European countries so shipping is a problem.
And in the same article is mentioned that we have scaled down our production and focusing only on critical supplies to key OEMs. And this is very concerning as mentioned by business standards. So. So why don’t you comment on that and then I will proceed for further questions.
Devendra Surana
So I think you’ve hit the nail. Whatever sourcing from Gulf has come down, sourcing from other countries has slowed down because of transshipment in. In and around Gulf. However so far we have not been very badly affected. Having said that, I do see that in the first quarter my volume might be slightly lower than the quarter. However it will be still I think more than double or more than twice of. I don’t know the exact number of the first quarter last year. My volume in the first quarter might be marginally lower than fourth quarter.
However it will be much, much higher than the first quarter of last year. And I don’t really see it affecting my EBITDA margins in the first quarter. And going forward for the whole year I don’t see major impact on the company. Company.
Unidentified Participant
So. So we are very confident of maintaining a beta margin. What we have got in Q4, is it right, sir?
Devendra Surana
Yes. I might be able to just about maintain the. The EBITDA margin will remain at 5%. The top line might come down 5% from Q4 but which will be still much. How much was Q1 last year?
Unidentified Participant
So Q1 last year? 11847.
Devendra Surana
Q1 last. How much is it
Unidentified Participant
Q1 last year? 486, sir.
Devendra Surana
Yeah. So from. I’ve done 735 crores in Q4 it might be slight marginally lower but compared to 485 it will still be about 40% higher.
Unidentified Participant
Okay sir. And sir, what I can see is a reduction in the inventory also from. From levels from Q2 and Q3.
Devendra Surana
Yeah, it
Unidentified Participant
Is indicating that only that. Exactly. I think you
Devendra Surana
Hit the nail on the head. I was fortunate that the inventory came down and my excess inventory has been reduced in Q4. Because of that.
Unidentified Participant
Okay, sir. And sir, as we are targeting very hefty growth going forward, so what. What is our working capital requirement? Requirement? Our working capital is, I think close to 30 and 40 days. Between quarter and 40 days, what is the requirement we are envisaging for next, next year and forward?
Devendra Surana
So my working capital requirement, I roughly have about 30 to 30, 35 days for stocks and 35 days for debtors. I think that should be more or less in line for the future. I might be slightly reducing as the volume keeps going up, up. If. If I give you the figures for 24, 25, my inventory days is 35 days and my receivable days is 33. Whereas 25, 26, it is 35 and 31 more or less. It will be in this line only while we are working very hard to ensure that both come down by maybe two to three days over this year.
Unidentified Participant
Okay, thank you. And sir, our borrowings has come down. That is very good, sir. And we are now cash flow positive on operational levels. So how we are seeing our borrowings going forward, will this maintain at the same level or we are going to reduce this borrowing further or we are taking any. Anything for our working capital requirement.
Devendra Surana
See, along with the turnover, the working capital will keep going up. So coming down over a period of time other than the retained earnings is not going to be very logical. Our working capital will keep going up along with the turnover and our borrowings also will go up, but hopefully not in the same ratio as our turnover.
Unidentified Participant
Okay. So it will keep reducing as per the percentage. As a.
Devendra Surana
As a percentage, it will keep reducing.
Unidentified Participant
Okay. And we will be cash flow positive. We will maintain the same tempo with cash flow.
Devendra Surana
Yeah.
Unidentified Participant
Yeah. Thank you very much, sir. Thank you very much for this clarification. And I hope the same tempo should continue. And we are doing very good. So thank you very much.
Devendra Surana
Thank you, Raj.
Operator
Thank you, sir. We’ll take the next question from Mr. N. Modi,
Unidentified Participant
Sir. Thank you, sir. Sir, my question is regarding this capacity. When did we increase Our capacity from 30,000 to 35,000?
Devendra Surana
March. March of this year?
Unidentified Participant
Oh, that was not separately announced, sir. That’s why I was not aware. No,
Devendra Surana
It has been announced. It has been announced. I think it’s in the presentation also.
Unidentified Participant
Yeah, it is there. And as regards this land, sir, which you have just talked about, 13 to 14 acres land you have that is in copper business or that is in India.
Devendra Surana
That is. That will remain in Bhagyanagar, India. Those 13 acres is in Bhagyanagar, India.
Unidentified Participant
At the moment where it is reach.
Devendra Surana
Sorry,
Unidentified Participant
At the moment.
Devendra Surana
Then right now in Bhagar India. They will remain in Bhagar India.
Unidentified Participant
Okay. Okay. Okay sir. Thank you.
Devendra Surana
Welcome.
Operator
Thank you sir. We’ll take the next question from Mr. We’ll take the next question from Ms. Isha Agarwal.
Unidentified Participant
Good afternoon sir. So my question is regarding the fundraise plan if you have any. And can you please help me understand how you guys would want to do it.
Devendra Surana
So we are looking at a fundraise. We are still not come up with a final proposal but we are looking at a fundraise of roughly about 150 crores.
Unidentified Participant
Okay. And sir, by when can we expect this like any rough estimate on this. And what would be the medium for this?
Devendra Surana
Sorry, I didn’t get that last part. We have not. When
Unidentified Participant
Are we planning to do.
Devendra Surana
We. We have still not come across the final modalities as to how, how and how to do it. We hope to do it in this financial year definitely.
Unidentified Participant
Okay sir. And so I missed your answer on this. This just a reclarification. So FY27 we are majorly seeing growth coming from volume. So how much value growth did we mention 15 to 20% was volume growth if I’m not mistaken? That’s
Devendra Surana
Right. We are looking at 20% volume, volume growth. What comes from value is left to the market.
Unidentified Participant
Okay. Okay. So. So that’s it from my side. Thank you.
Devendra Surana
Yeah,
Operator
Thank you so much. That was the last question for today’s session.
Devendra Surana
Thank you so much.
Operator
On behalf of in portal, I would like to extend our sincere gratitude to the management team of Bhaginagar India limited for their time and such detailed responses. We also thank all the participants for their active engagement and thoughtful questions. I would just request the management to please give their closing remarks.
Devendra Surana
Thank you. I think we have covered almost everything but I do want to place on record my appreciation for both Finportal and all the people who have taken their time out and asked us very pointed questions. We hope to come true to their expectations and perform well in the coming quarters. Looking forward to seeing you all every quarter. Thank you once again for attending this meeting.
Operator
Thank you sir. If there are any unanswered queries from the participants, please do not hesitate and reach out to us on the mail ID given in the chat box. Thank you.