Pondy Oxides and Chemicals Limited (POCL) delivered a strong performance in Q2 FY25, showcasing both financial and operational progress. In his address, Ashish Bansal, Managing Director of POCL, provided key updates on ongoing projects and strategic initiatives. The company’s Thervoykandigai project is progressing well, with building construction and plant setup expected to be ready for trials by the end of the calendar year. Production is slated to begin in Q4 2025, and POCL is increasing its lead vertical capacity from 132,000 metric tons per annum to 204,000 metric tons per annum in two phases.
The company’s commitment to increasing market accessibility was underscored by a recent stock split, reducing the face value of equity shares from INR10 to INR5, aimed at improving liquidity. Additionally, the Board has approved a plan to raise up to INR250 crores through Qualified Institutional Placement to fund strategic expansions and long-term growth initiatives. Operationally, POCL saw significant capacity utilization improvements across its lead, plastic, and copper segments, with lead sales growing 49% year-on-year for the quarter.
On the financial front, POCL’s consolidated revenue surged to INR1,024 crores, up 42% year-on-year, driven by increased production and sales. EBITDA rose by 75% year-on-year to INR53.24 crores, with EBITDA margins improving to 5.2%. The company also saw a 188% rise in consolidated PAT to INR28.21 crores, reflecting the overall strength of its operational strategy.
Financial Performance in Q2 FY25 and FY25 Outlook
In Q2 FY25, POCL continued its strong financial performance, achieving a quarterly revenue run rate of approximately INR 500 crores. This positions the company to close FY25 with an estimated total revenue of around INR 2,000 crores, provided current trends persist. The management has emphasized their focus on improving profitability, targeting EBITDA margins to rise from the current 5%-6% to 6%-7% by the end of the fiscal year, driven by higher contributions from value-added products and operational efficiencies. If these margin improvements materialize, POCL is poised to achieve a net profit of INR 65-70 crores by FY25.
Looking ahead, the company plans to further invest in capacity expansion, particularly in its new projects in Tamil Nadu and Mundra, with a capital expenditure of INR 110-120 crores this year alone. POCL is also considering raising INR 250 crores to support its long-term expansion into new recycling verticals like copper, aluminum, and plastics, while continuing to grow its lead recycling operations.
Capacity Expansion and Utilization Targets
POCL’s expansion is progressing steadily, with the second phase of their 36,000 metric ton capacity set to come online by the second quarter of FY25. According to the management, this expanded capacity will start at an estimated 20%-30% utilization by Q3 FY25, eventually reaching full capacity by the first or second quarter of FY27. The company’s focus remains heavily on its lead recycling vertical, which currently contributes more than 95% of total revenues. However, the company is actively diversifying into other areas such as copper, plastics, and potentially rubber and e-waste recycling.
Portfolio Diversification and Growth Ambitions
In an effort to reduce its dependence on lead recycling, POCL has ambitious plans to diversify into copper, aluminum, and plastics recycling over the next few years. The company expects lead to make up 65%-70% of total revenue by FY27, down from the current 95%. In the long term, POCL is targeting an equal split between lead and non-lead verticals by 2027.
Copper and aluminum are particularly promising sectors, though POCL’s aluminum segment is currently on pause due to profitability concerns. The management is confident in delivering positive EBITDA from aluminum recycling within the next few quarters once new products are fully evaluated. Plastics recycling, derived from battery processing, continues to grow as part of the overall portfolio, even though it is a lower-margin segment compared to metals like copper and lead.
Focus on Value-Added Products and Margins
POCL aims to increase its focus on value-added products, which currently account for 60% of the company’s portfolio. This is a significant improvement from the 55%-56% range last year. The company is targeting 70% by FY26, which will also help boost its EBITDA margins. Presently, POCL operates with margins in the 5%-6% range, and management expects these to grow to 6%-8% in the next couple of years as operational efficiencies improve.
R&D and New Vertical Exploration
A major highlight of the company’s future plans is the upcoming establishment of a dedicated research and development (R&D) center. This center will focus on exploring new recycling technologies and materials beyond the current non-ferrous metals. POCL is in talks with several institutions to form partnerships that will drive innovation in emerging recycling sectors such as rubber and e-waste.
While POCL is not yet active in the e-waste or rubber recycling markets, both sectors are gaining momentum, particularly as Extended Producer Responsibility (EPR) policies strengthen regulatory frameworks in India. The company is keen to explore these areas, which represent potentially significant future revenue streams.
Tamil Nadu MoU and Strategic Investments
In 2023, POCL signed a Memorandum of Understanding (MoU) with the Tamil Nadu government as part of its broader strategy to expand its recycling capabilities. Under this agreement, the company has allocated a 25-acre land parcel in Thervoykandigai for phased development. This year alone, POCL plans to invest INR 110-120 crores in this project to support its advanced recycling ambitions.
Mundra Land Acquisition and Fundraising
POCL has also acquired 123 acres of land in Mundra, where it plans to start phased expansions in December 2026. This will accommodate future growth in multiple verticals, further cementing POCL’s geographical footprint. To support these expansion plans, POCL is considering raising INR 250 crores. This capital will be essential to fund future projects and scale the lead, copper, plastics, and aluminum segments in line with the company’s long-term vision.
Competitive Landscape: No Threat from In-House Recycling
One of the key concerns raised by analysts was whether POCL could face a competitive threat from companies choosing to perform recycling operations in-house, particularly in overseas markets. However, management does not foresee this as a significant risk. India’s balanced cost structure for energy and materials, combined with its established position in the global recycling market, offers a competitive edge that makes outsourced recycling a viable and cost-effective option for many companies.
Conclusion
Pondy Oxides and Chemicals Limited is entering an exciting phase of growth, backed by strategic investments, capacity expansion, and a clear vision for diversification. The company is steadily transitioning from a lead-focused player to a more diversified metals and plastics recycler. With plans to expand into newer verticals such as rubber and e-waste recycling, alongside innovations in value-added products, POCL is positioning itself as a leader in India’s circular economy.
The company’s financial projections, driven by strong operational performance and a clear expansion roadmap, paint an optimistic picture for shareholders and stakeholders alike. With significant investments already underway in Tamil Nadu and upcoming projects in Mundra, POCL is gearing up for sustained long-term growth.