Baheti Recycling Industries: H1 FY26 Sees Record Profits and Strategic Growth

Baheti Recycling Industries Limited, a prominent player in the aluminium recycling sector, has delivered a stellar performance in the first half of fiscal year 2026 (H1 FY26), reporting its highest-ever profits. The company's financial results reflect robust demand for recycled aluminium and a disciplined focus on operational excellence and sustainable growth. Revenue from operations surged by 22.53% year-on-year to ₹315.14 crore, while Profit After Tax (PAT) witnessed an impressive 32.01% increase, reaching ₹9.26 crore. This strong showing underscores Baheti's strategic positioning and effective execution in a growing market.

The company's product portfolio, primarily focused on aluminium alloys and de-ox products, has been a key driver of this growth. For H1 FY26, aluminium alloying rods contributed approximately 58% of the revenue, amounting to ₹182.78 crore, while de-ox and other products accounted for the remaining 42%, generating ₹132.36 crore. This balanced mix caters to diverse industrial applications, including auto ancillary, automobile, electrical components, die-casting, and steel. The sustained demand across these sectors has provided a strong foundation for Baheti's financial performance.

Strategic Growth and Modernization Initiatives

Baheti Recycling Industries is not resting on its laurels; it is actively pursuing several strategic initiatives to drive future growth and enhance operational efficiency. A significant undertaking is the establishment of a new aluminium wire rod facility. This facility will initially have a capacity of 12,500 metric tons per annum, with plans to expand to 25,000 MTPA by FY28. The management anticipates this new vertical to generate ₹200-250 crore in revenue from the initial capacity, with a potential to reach ₹500 crore upon full expansion. This move is particularly timely as the market for aluminium wire rods is increasingly shifting towards recycled supply, a trend accelerated by Extended Producer Responsibility (EPR) regulations.

In parallel, the company is modernizing its existing melting operations. It is scaling its proposed capacity to 38,000 MTPA, an increase from previous plans, by investing ₹10 crore per combination of Tilting Rotary Furnace (TRF) and Skelner Furnace. These advanced furnaces are replacing traditional pit furnaces, with one pair already commissioned and the second expected to go live by H2 FY26. This modernization is aimed at boosting efficiency, yield, and product consistency, ensuring Baheti remains at the forefront of sustainable metal recycling.

Commitment to Sustainability and Market Leadership

Sustainability is a core pillar of Baheti's strategy. The company is implementing a 1.65MW DC Solar PV Plant, which is projected to reduce energy costs by 60% and deliver annual savings of ₹1.3 crore. This initiative not only contributes to environmental responsibility but also enhances the company's cost structure, making it more competitive. Baheti's adherence to EPR norms and proactive carbon emission controls are attracting ESG-focused clients and facilitating access to green supply chains, which are becoming increasingly mandatory in India. This forward-thinking approach positions Baheti as a preferred partner for environmentally conscious buyers.

Furthermore, the company recently secured the IATF 16949 certification in June 2025. This critical certification enables Baheti to directly supply to Tier-1 automotive manufacturers, a segment previously inaccessible. This has already led to the acquisition of new marquee clients like Motherson, Caparo Maruti, and Ashley Alteams, significantly strengthening Baheti's market position and opening new revenue opportunities. The company is also expanding its geographic footprint into South India and Europe, aiming to diversify its client base and reduce concentration risk.

Navigating Challenges and Future Outlook

While the growth trajectory is strong, Baheti's management transparently addressed operational nuances. They noted an increase in inventory and debtor days, explaining it as a strategic build-up of stock to cater to new customer acquisitions and maintain sufficient inventory for upcoming orders, a standard practice in their import-oriented business. A slight dip in margins during H1 FY26 was attributed to seasonal factors like summer and rainy seasons, which can temporarily reduce the productivity of melting units. However, the management is actively focused on reducing working capital and improving cash conversion cycles in H2 FY26, targeting sustainable PAT margins of 3% and EBITDA margins of 8-10% for the full year.

Baheti Recycling Industries is confidently positioned for exponential business growth, aiming to reach a revenue milestone of ₹1,200+ crore by FY28. This will be driven by its strategic expansions, product diversification into high-margin segments like Aluminium Wire Rods, Billets, and Zinc Alloys, and a steadfast commitment to operational excellence and sustainability. The company's proactive approach to market trends and regulatory changes, coupled with its robust financial performance, reinforces its potential for long-term value creation for all stakeholders.