Jain Resource Recycling Limited: A Strong Start to FY26 with Strategic Vision

Jain Resource Recycling Limited, a prominent player in India's non-ferrous metal recycling sector, has reported a robust performance for the second quarter and first half of the financial year 2026. The company, which recently made its debut on the NSE and BSE on October 1, 2025, showcased significant growth across its key financial metrics, underscoring the strength of its integrated recycling model and strategic initiatives.

For the first half of FY26, Jain Resource Recycling recorded a consolidated revenue from operations of INR 3,663 crore, marking a healthy 27% year-on-year growth. This impressive top-line expansion was complemented by a substantial increase in profitability. Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) surged by 37% year-on-year to INR 250 crore, with an EBITDA margin of 6.8%. Profit After Tax (PAT) also saw a remarkable 38% year-on-year increase, reaching INR 155 crore, translating to a PAT margin of 4.2%. These figures highlight the company's operational efficiency and effective cost management.

Segmental Performance and Strategic Diversification

The company's revenue mix demonstrates a well-balanced portfolio. Lead and lead alloy ingots were the largest contributors, accounting for 48% of the total revenue, while copper and copper alloy products followed closely at 46%. Aluminium and aluminium products represented 4% of the revenue, with other segments contributing the remaining 2%. This diversification across key non-ferrous metals provides stability and reduces reliance on any single commodity.

Jain Resource Recycling's strategic focus extends beyond current operations, with significant emphasis on forward integration and exploring new recycling domains. A major initiative is the forward integration into copper cathode, wire rod, and busbar manufacturing. This project, undertaken by its wholly-owned subsidiary, Jain Green Technologies Private Limited, involves a capital expenditure of INR 95 crore for Phase I. The facility is expected to commence operations in Q1 FY27, aiming to produce high-quality green copper cathodes, which will enhance value addition and improve margins.

To strengthen its raw material sourcing and expand its global footprint, the company has also entered into a joint venture with Texas-based CNY Group Investments Incorporation. This partnership will establish a copper scrap recycling plant in Ahmedabad, focusing on end-of-life materials like cables, motors, and alternators. This venture is anticipated to go online next year, leveraging JRR's operational expertise and CNY's global sourcing capabilities.

Operational Excellence and Risk Management

The company's operational strength is underpinned by its strategically located recycling facilities within the SIPCOT Industrial Estate in Gummidipoondi, near Chennai. This location offers excellent connectivity to major ports, facilitating efficient sourcing of recyclable raw materials from over 120 countries and cost-effective export of finished products to markets like Southeast Asia, Singapore, China, and South Korea. The company's lead ingots are LME-registered, a testament to their global quality recognition.

Jain Resource Recycling employs a robust hedging mechanism to mitigate commodity price risk, which is inherent in the base metals industry. By taking short positions in LME futures for raw material procurement and corresponding long positions for finished products, the company effectively locks in sales prices and protects its margins. This proactive risk management strategy ensures stable financial performance despite market volatility.

Management also addressed the increase in the working capital cycle from 38 days to 52 days in H1 FY26, attributing it to higher inventory days caused by supply chain disturbances and an investigation into copper imports by the US. However, they anticipate normalization by the end of December 2025, returning to a 40-42 day cycle by February 2026. Furthermore, the company expects finance costs to decrease by INR 20-22 crore annually due to debt repayment from IPO proceeds.

Outlook and Sustainability Focus

Looking ahead, Jain Resource Recycling is committed to sustaining its growth momentum. Management projects a revenue growth of 20-25% for its existing product portfolio. The EBITDA margin in the copper segment is expected to improve by 3-4% from next year due to value-added products from the new plant. The company also plans to diversify into new recycling verticals such as automotive tire, e-waste, and solar panel recycling, with studies for these projects expected to materialize over the next two to three years.

Sustainability and ESG principles are at the core of Jain Resource Recycling's business strategy. The company continuously invests in advanced technologies to optimize recycling processes and minimize waste, aiming to reduce its environmental footprint. India's evolving policy framework, including mandates on recycled content for non-ferrous metals and Extended Producer Responsibility (EPR) regulations, further incentivizes organized recycling, creating significant growth opportunities for compliant players like Jain Resource Recycling. The company's commitment to innovation, quality, and responsible growth positions it well to capture emerging domestic and international opportunities while contributing to a circular and sustainable future.