Summary
Jain Resource Recycling Limited - Q3 FY 2026 Earnings Call Summary Wednesday, February 11, 2026, 11:00 AM IST
Event Participants
Executives 4 Hemant Jain (ED & CFO), Kamlesh Jain (Chairman & MD), Mayank Pareek (Joint MD), Sanchit Jain (ED)
Analysts 8 Ajit Sethi, Ankit, Chirag, Manish Ostwal, Praful, Priyanshu, Rahul, Sumant Kumar, Vivek Gautam
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (9M) | ₹6,438 crores | +38% YoY; Driven by 29.34% volume growth and higher copper prices. |
| EBITDA (9M) | ₹449 crores | +65% YoY; Benefit of operating leverage and improved product mix. |
| EBITDA Margin (9M) | 7% | +116 bps YoY; Improved throughput and stable execution. |
| PAT (9M) | ₹281 crores | +65% YoY; Margin expanded by 71 bps to 4.4%. |
| Copper EBITDA | ₹42,000 - 51,000/ton | Fluctuated QoQ due to LME price volatility and formulaic lag; 9M average stands at ₹47,000. |
| ROE | 30.1% | Maintained strong returns on equity as of December 2025. |
| ROCE | 24.95% | Reflects capital efficiency despite elevated working capital. |
| Inventory Days | 90 days | Increased from historical 45-50 days due to large copper tender procurement and New Year holiday delays. |
| Cash Conversion Cycle | 82 days | Elevated due to copper dominant sales mix and inventory spikes; managed guided reduction to 60-65 days. |
Geographic & Segment Commentary
- Copper & Copper Alloys: Contributed 52% of 9M FY26 revenue. The segment is the primary strategic priority, shifting from pure scrap recycling to value-added products like anodes and cathodes to reduce cyclicality.
- Lead & Lead Alloys: Contributed 43% of 9M FY26 revenue. Management is focusing on “value unlock” through byproduct extraction, specifically scaling tin capacity and launching antimony extraction.
- International Operations: 70% of revenue is export-led. Strategic expansion includes a 25% stake in Abraj Al-Khaleej, Kuwait, to secure battery scrap and local recycling licenses.
- Domestic Market: Contributed 30% of revenue, with domestic raw material sourcing increasing to 44% of total volume, aided by India’s evolving EPR framework.
Company-Specific & Strategic Commentary
- Jain Green Technologies (Unit 3): A ₹100 crore profitability-driven project for value-added copper (anodes, cathodes, wire rods). Construction is 80% complete; copper anode production commences February 2026.
- Jain CY Circular Solutions JV: A volume-driven partnership with CNY Global (USA) in Ahmedabad. The 72,000 MTPA scrap processing plant is expected to be operational by June 2026.
- Antimony Extraction: A niche technology play initiated with a ₹20 crore capex. Targeting 100 MT/month output by Q3 FY27 to extract higher value from lead-antimony bullion.
- Tin Expansion: Capacity increased from 125 MTPA to 500 MTPA via an additional vacuum distillation furnace to improve realizations.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 40% - 50% CAGR | Management expects to maintain historical growth rates through four new vertical launches in FY27. |
| EBITDA Margin | +100 bps expansion | Expected gain from forward integration into copper cathodes and antimony extraction. |
| Copper EBITDA | ₹50,000 - ₹55,000/ton | Normalized range expected once value-added products stabilize; could reach ₹70,000-₹75,000. |
| Working Capital | 60 - 65 days | Target for Q4 FY26 as inventory from large tenders is liquidated and holiday delays resolve. |
Risks & Constraints
| Risk | Context |
|---|---|
| Price Volatility | LME copper price fluctuations impact the “ditch gap” between purchase and sale formulas, causing quarterly EBITDA/ton variance. |
| Working Capital Stress | Transition from lead to copper-heavy sales naturally extends the credit cycle as copper receivables take longer to clear. |
| Regulatory/Litigation | A pending SAT appeal regarding a ₹25 lakh SEBI penalty related to a 3-year-old matter remains an administrative watchpoint. |
Q&A Highlights
Copper Margins & Hedging
- Question: Why did Copper EBITDA per ton drop from ₹51,000 to ₹42,000 this quarter? (Rahul)
- Answer: Volatility in copper prices creates a lag between purchase and sale formulas. While base margins are hedged, a steep price rise temporarily compresses the numerical gross margin in the short term, but 9M averages remain healthy at ₹47,000 (Hemant Jain).
Working Capital Spikes
- Question: What caused the jump to 82 working capital days? (Rahul)
- Answer: Three factors: New Year holiday delays in China/Europe, a massive one-time copper tender procurement, and the fact that copper payment cycles are structurally slower than lead (Kamlesh Jain).
Strategic Joint Ventures
- Question: Why do JVs for copper recycling when you have the capability? (Sumant Kumar)
- Answer: JVs like the one in Kuwait provide essential local licenses that outsiders cannot obtain. The C&Y JV in Ahmedabad secures captive raw material supply from C&Y’s 12 US scrap yards (Mayank Pareek).
Future Profitability
- Question: What is the impact of value-added products on margins? (Priyanshu)
- Answer: The transition to anodes, cathodes, and antimony extraction is expected to add approximately 100 bps to the overall group EBITDA margin (Mayank Pareek).
Key Takeaway
Jain Resource Recycling delivered a robust 9M FY26 performance, with revenue growing 38% to ₹6,438 crores and PAT increasing 65% to ₹281 crores. The company is successfully transitioning from a scrap recycler to a high-value-added producer, with its ₹100 crore Unit 3 expansion for copper anodes and cathodes nearing completion. Despite a temporary spike in working capital to 82 days following aggressive inventory stocking for a large tender, management expects a return to a 60-65 day cycle by Q4 FY26. Strategic priority remains on the four new verticals—Ahmedabad JV, Kuwait battery recycling, copper value-addition, and antimony extraction—all slated for FY27 commissioning. With a diversified sourcing network across 120 countries and a 9M ROE of 30.1%, the company remains positioned to sustain its 40-50% historical growth trajectory while expanding its margin profile through forward integration.
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