Summary
Bhagyanagar India Limited - Q3 FY26 Earnings Call Summary Friday, January 31, 2026, 12:00 PM IST
Event Participants
Executives 5 Advait Surana (Business Development Manager), Devendra Surana (Managing Director), Narendra Surana (Founder), Rahul Surana (Financial Manager), Surendra Bhutoria (CFO)
Analysts 7 Aryan Bhatia, Atul Raval, Madhur Rathi, Mitesh Bhandari, Navin Prasad, Pakshal Jain, Vaibhav Gupta
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,643 crores | +40% YoY; 9-month revenue already exceeds total FY25 revenue (₹1,625 crores). |
| EBITDA | ₹69.98 crores | +172% YoY for 9-month period; driven by shift to value-added products and backward integration. |
| EBITDA Margin | 4.90% | +277 bps YoY; margin for Q3 specifically reached 4.9% vs 9-month average of 4.26%. |
| Profit After Tax (PAT) | ₹31.68 crores | Operational PAT reached historical high for the 9-month period. |
| PAT Margin | 1.52% | Management targets upward movement toward 3%+ as interest costs and overheads scale down. |
| Installed Capacity | 30,000 MTPA | Expanding to 35,000 MTPA by end of February 2026; 60-acre facility can house 4x current capacity. |
| Real Estate Book Value | ₹30 crores | Representing the book value of land parcels and windmills remaining in the parent entity post-demerger. |
Geographic & Segment Commentary
- Copper & Manufacturing: Core segment focused on scrap recycling and production of rods, bus bars, and wires. The company sources scrap globally (Americas, Europe, Asia, Oceania) and serves 500+ OEM customers across electrical, automotive, and switchgear sectors. Management aims for ₹5,000 crores turnover by FY29.
- Value-Added Products: Includes tin/silver-plated copper bus bars for AI data centers and solar interconnect wires. These products carry higher margins (5-10%) compared to commodities (1-3%). Exports are primarily focused on the US market for specialized data center components.
- Real Estate & Wind: Post-demerger, this segment will hold three land parcels in Hyderabad’s industrial zones. Strategy involves converting industrial land to residential/commercial use under the new state policy, with one project estimated at 16 lakh sq. ft. of residential development.
Company-Specific & Strategic Commentary
- Demerger & Restructuring: The company is demerging its copper business into “Tieramaet Limited” (mirror shareholding). Bhagyanagar India will retain real estate assets and windmills with zero debt, while Tieramaet will focus on the circular economy and copper growth.
- Circular Economy (Plastic Recycling): Leveraging 800 tons of plastic byproduct from cable scrap. Currently recycling 150 tons into LDP granules; targeting 500 tons by next year by adding PVC granules and pyrolysis for alternative fuel.
- Backward Integration: Operating a 60-acre scrap recycling facility in Toopran. This allows the company to use 85-90% recycled copper vs only 10-15% virgin copper, significantly protecting margins and enhancing ESG positioning.
- Technological Upgrades: Installed state-of-the-art heat recovery systems on furnaces to reduce cycle times and fuel consumption; implemented tracking systems for machine efficiency.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 25% YoY for FY27 | Sustained demand from AI, EV, and Green Energy sectors; FY26 expected to end at 35-40% growth. |
| Long-term Revenue | ₹5,000 crores by FY28-29 | Preponed from FY30 due to aggressive copper demand in sunrise industries. |
| EBITDA Margin | 5.00% (Steady State) | Target to stabilize margins at 5% through higher value-add mix and operational efficiencies. |
| Credit Rating | A- (Target) | Recently upgraded from BBB to BBB+; management targets A- post-FY26 results to reduce interest costs by 50-100 bps. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Volatility | Rising copper prices increase the absolute value of inventory and receivables, putting pressure on short-term debt requirements despite stable cycle days. |
| Commodity Substitution | Risk of aluminum replacing copper in non-critical sectors (transformers/fans). Management notes most “easy” substitution has already occurred due to reliability and size constraints of aluminum. |
| Key Person/Function Attrition | Notable turnover in the Company Secretary (CS) position. Management attributes this to professionals moving to larger-cap firms once they gain experience at a ₹1,500cr+ entity. |
Q&A Highlights
AI & Data Center Opportunity
- Question: What is the competitive landscape for AI-related components in the US? (Navin Prasad)
- Answer: Market is new but high-quality silver/tin coating on bus bars acts as a barrier. Competitors require significant R&D to match BIL’s 20-year expertise. BIL benefits from US anti-China sentiment (Advait Surana).
Real Estate Monetization
- Question: What is the potential value and development plan for the land parcels? (Atul Raval / Madhur Rathi)
- Answer: One 4 lakh sq. ft. Joint Development Agreement (JDA) for residential space is expected by March 2026. Total land parcel valuation is approximately ₹200-300 crores based on current circle rates (Narendra Surana).
Inventory & Hedging
- Question: Did the company benefit from the recent copper price surge in inventory gains? (Atul Raval)
- Answer: Gains are primarily operational. Most inventory is hedged on the LME to mitigate volatility. Margins improved because of a higher mix of imported scrap vs domestic copper (Devendra Surana).
Valuation Gap
- Question: Why is BIL valued lower than competitors like Jain Resource Recycling? (Mitesh Bhandari)
- Answer: Competitors have higher ROCE due to different product mixes (aluminum/lead) and shorter working capital cycles (bulk sales vs BIL’s 30-day OEM credit). BIL is focused on improving awareness to bridge this gap (Devendra Surana).
Key Takeaway
Bhagyanagar India Limited delivered a robust Q3 FY26, with 9-month revenue of ₹1,643 crores (+40% YoY) surpassing the previous full year’s performance. The company’s strategic shift toward a circular economy model—utilizing 85-90% recycled copper and expanding into plastic recycling—has successfully doubled EBITDA margins to 4.9%. Management has accelerated its ₹5,000 crore revenue target to FY29, citing a “retail frenzy” in copper demand driven by AI data centers, EVs, and green energy. The impending demerger into Tieramaet Limited (Copper) and Bhagyanagar India (Real Estate) aims to unlock value from ₹200-300 crores worth of Hyderabad land parcels while creating a pure-play recycling entity. While rising copper prices pose a working capital challenge, BIL’s integrated scrap-to-value-add model and recent credit rating upgrade to BBB+ position it to capture high-growth markets in India and the West. Expect continued volume growth of 25%+ as the company scales capacity to 35,000 MTPA.
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