Baheti Recycling Industries Ltd Q3 FY26 Earnings Analysis

- Targeting a volume of 25,000 tons by the end of the current financial year (FY26), up from around 10,000 tons in H1 FY26. - Expansion plans include increasing capacity from 29,000 tons to 38,000 tons in the near term, with wire rod facility planned for 12,500 tons initially, expandable to 25,000 tons by FY28. - Aim to achieve 65% capacity utilization by FY26 end, 75% by FY27, and 85% by FY28. - Wire rod facility expected to contribute INR 200-250 crores in revenue at ~80% utilization, potentially reaching INR 500 crores with full capacity. - Overall volumes expected to grow significantly, with total capacity rising to 63,000 tons in the next two years. - Revenue guidance for FY25 is around INR 650 crores; wire rod business expected to improve margins compared to existing operations.

- Baheti Recycling is entering a decimating growth phase, driven by wire rod expansion and upgraded furnace technology. - Targeting sustainable margins of 8%-10% in aluminum business, with improved working capital cycles expected to reduce inventory by INR 30-40 crores. - Aluminum wire rod facility (12,500 tons initially, expandable to 25,000 tons) aims for INR 200-250 crores revenue at ~80% utilization, with better margins than existing products. - Overall capacity to expand from current 38,000 tons to 63,000 tons by FY28. - Management expects sustainable PAT margins around 3.5%-4%, targeting EBITDA margins of 8%-10% in the second half of FY26. - Capex for wire rod facility is INR 30 crores, planned completion in second half of next financial year (FY27). - Focus on capital efficiency, cash flow improvement, and strong ESG positioning to drive long-term value creation.

- Baheti Recycling is setting up a new aluminum wire rod facility with a capacity of 12,500 metric tons per annum, expandable to 25,000 tons, with production starting in the second half of FY27. - The capex for this wire rod facility is around INR 30 crores. - Infrastructure for the facility is being planned for 25,000 tons, but initial production will be at 12,500 tons capacity. - Additional furnaces costing around INR 6 crores will help ramp capacity to 25,000 tons. - Existing capex for the current fiscal year (first half) is approximately INR 18 crores, funded through internal accruals. - Expansion from 29,000 tons to 38,000 tons is underway due to upgraded furnace technology, with targets of 65% capacity utilization by FY26-end, 75% in FY27, and 85% in FY28. - The overall capacity including wire rod aims to reach 63,000 tons by FY28.

- There is no explicit mention of any current or future fundraising plans through debt or equity in the provided transcript. - The company plans to deleverage its balance sheet in the coming years using internal accruals as it grows. - Capex for ongoing expansions, such as the aluminum wire rod facility, is being funded through internal accruals (INR 30 crores capex mentioned, with INR 18 crores already incurred). - The management emphasizes improving cash flow and capital efficiency going forward. - No new debt or equity issuance was stated during the call.

- Baheti Recycling Industries is closing in on a trade deal with the US, which is expected to reduce market uncertainties and stabilize inventory levels. - The company has recently acquired new clients post receiving the IATF certificate, including Motherson, Caparo Maruti Limited, and Ashley Alteams India Limited. - They are in close talks with OEMs such as Ola, TVS, Yamaha, Hero, and Bajaj, aiming to expand their client base. - The aluminum wire rod facility is targeting repeat orders initially through trial lots, with a vendor approval process expected to take about 3 months. - The facility plans to ramp up capacity utilization to 65% by FY26 end, 75% by FY27, and 85% by FY28. - Overall, the order book is expected to strengthen with new clientele and product acceptance, backed by regulatory tailwinds and rising demand.