Jain Resource Recycling scales copper as VAP margins lag

Jain Resource Recycling Limited reported copper and copper-ingot volume of 16,411 MT in Q2 FY27, up 74% year-on-year, while its newer copper value-added products generated EBITDA of Rs 14,434 per tonne. Jain Resource Recycling attributes the lower value-added-product unit earnings to fixed operating costs being under-absorbed during the initial capacity ramp-up.

How quickly are Jain Resource Recycling's copper volumes increasing?

Jain Resource Recycling's copper and copper-ingot volume increased to 16,411 MT in Q2 FY27 from 9,434 MT in Q2 FY26 and 14,683 MT in Q1 FY27. Copper-ingot revenue reached Rs 2,021.7 crore, compared with Rs 1,001 crore a year earlier and Rs 1,715.7 crore in the preceding quarter, while segment EBITDA rose to Rs 61.1 crore from Rs 46.7 crore in Q1 FY27.

The first-half comparison also shows higher scale but a smaller increase in operating profit. Copper and copper-ingot volume rose to 31,094 MT in H1 FY27 from 17,942 MT in H1 FY26, while revenue increased to Rs 3,737.3 crore from Rs 1,697.8 crore. Segment EBITDA increased to Rs 107.8 crore from Rs 91.7 crore, but EBITDA per tonne declined to Rs 34,682 from Rs 51,092.

Copper value-added products added 2,610 MT of volume and Rs 347.3 crore of revenue in Q2 FY27. In H1 FY27, these products generated 3,575 MT of volume, Rs 469 crore of revenue and approximately 7.8% of consolidated revenue. Management said copper, including ingots and value-added products, accounted for about 72% of Q2 FY27 consolidated revenue.

Why are Jain Resource Recycling's value-added copper margins lower?

Jain Resource Recycling reported copper value-added-product EBITDA per tonne of Rs 14,434 in Q2 FY27 and Rs 7,226 in H1 FY27, below Rs 37,237 and Rs 34,682 respectively for copper and copper ingots. Value-added products generated Rs 3.8 crore of EBITDA on Rs 347.3 crore of revenue in Q2 FY27, and Rs 2.6 crore on Rs 469 crore in H1 FY27.

Management said the gap reflects the initial ramp-up phase, when production is not sufficient to absorb fixed operating costs fully. Management expects EBITDA per tonne to improve as utilisation and output rise, creating operating leverage, but this is a stated expectation rather than a reported H1 FY27 result.

The established copper-ingot operation showed a sequential recovery in Q2 FY27 without returning to its year-earlier unit earnings. Copper and copper-ingot EBITDA per tonne rose from Rs 31,825 in Q1 FY27 to Rs 37,237 in Q2 FY27, but remained below Rs 62,461 in Q2 FY26. EBITDA increased to Rs 61.1 crore from Rs 46.7 crore sequentially, compared with Rs 58.9 crore a year earlier.

Management states that copper value-added products command higher margins than recycled copper ingots. However, the reported Q2 FY27 ramp-up comparison shows Rs 14,434 per tonne for value-added products against Rs 37,237 per tonne for copper and copper ingots, with utilisation identified as the explanation for the difference.

What copper capacity is Jain Resource Recycling commissioning?

Jain Resource Recycling has commissioned both phases of its copper-anode facility at SIPCOT Gummidipoondi, creating total capacity of 1,600 MT per month. The first 800-MT-per-month phase was commissioned in March 2026 and the second in July 2026; trial runs are under way and management expects utilisation to rise progressively.

The copper-cathode project has planned capacity of 1,500 MT per month across two 750-MT-per-month phases. Civil works on Phase I were complete but commissioning was pending, while Phase II was targeted for Q4 FY27. The company said it is working towards London Metal Exchange, or LME, grade cathode quality.

Jain Resource Recycling's proposed copper chain runs from globally sourced scrap through anode melting and casting and cathode electrorefining to wire rod, busbars and profiles. Wire rod was targeted for commissioning in Q3 FY27. The source gives differing busbar and profiles dates: the project diagram says Q3 FY27, while management commentary says Q4 FY27.

Phase I anode capital expenditure of Rs 98 crore was funded entirely through internal accruals. The cathode project includes rooftop solar intended to power electrolytic refining, and was described as nearing commissioning. The presentation does not disclose achieved anode utilisation, H1 FY27 anode output or a full-capacity utilisation target date.

How does the copper ramp-up fit Jain Resource Recycling's wider results?

Jain Resource Recycling reported consolidated revenue of Rs 3,337 crore in Q2 FY27, up 58% from Rs 2,113.7 crore in Q2 FY26 and 22% from Rs 2,724.5 crore in Q1 FY27. EBITDA was Rs 138.8 crore, up 27% sequentially from Rs 109.5 crore but down 13% from Rs 160 crore a year earlier, with the EBITDA margin at 4.2% against 7.6% in Q2 FY26.

For H1 FY27, revenue rose 65% to Rs 6,061.4 crore from Rs 3,663 crore in H1 FY26, while EBITDA was Rs 248.3 crore versus Rs 250.1 crore. The EBITDA margin narrowed to 4.1% from 6.8%. Profit after tax increased to Rs 160 crore from Rs 155.1 crore, although the profit-after-tax margin declined to 2.6% from 4.2%.

Other segments moved differently during H1 FY27. Lead and lead-alloy volume declined to 67,002 MT from 81,032 MT, while EBITDA fell to Rs 127.3 crore from Rs 153.3 crore. Aluminium and aluminium-alloy volume fell to 4,695 MT from 4,979 MT, but EBITDA increased to Rs 10 crore from Rs 5.9 crore and EBITDA per tonne rose to Rs 21,201 from Rs 11,878.

Jain CY Circular Solutions, the Ahmedabad copper-scrap processing subsidiary in which Jain Resource Recycling holds a 52% stake, began contributing revenue in Q2 FY27. It generated Rs 25.4 crore in its first contributing quarter and had current capacity of about 12,000 MT. Its targeted annual copper-product output is about 25,000 MT, subject to necessary regulatory approvals, and its stated role is to supply captive feed for the downstream copper chain.

Conclusion

Jain Resource Recycling's figures show copper volumes expanding faster than unit profitability. Copper and copper-ingot volume reached 16,411 MT in Q2 FY27, while the newer value-added-product business generated Rs 14,434 of EBITDA per tonne against Rs 37,237 per tonne for copper and copper ingots. Consolidated H1 FY27 revenue increased 65%, but EBITDA remained near the prior-year level at Rs 248.3 crore.

The next disclosed milestones are commissioning of the cathode project, the Q3 FY27 wire-rod target and the unresolved Q3 FY27 or Q4 FY27 timing for busbars and profiles. Management also expects anode utilisation to increase after the March 2026 and July 2026 commissioning phases, while Jain CY Circular Solutions is targeting about 25,000 MT of annual copper-product output, subject to approvals.