Eco Recycling Ltd

- Eco Recycling Limited has not taken any debt to fund its recent expansion. - The company is financing its expansion entirely through internal accruals and liquid assets. - So far, INR 35 crores have been invested from cash balance, with another INR 10-12 crores expected to be spent by June 2024. - No external funding through debt or equity is currently planned or required. - Future expansions (such as a potential third facility beyond FY '26) will be considered based on performance, but no mention of raising funds via debt or equity was made for those plans so far.

- Eco Recycling Limited is currently expanding its capacity with a new facility of 18,000 metric tons. - Total investment for this facility is envisaged to be around INR 45 to 50 crores. - As of the call, approximately INR 35 crores has already been invested from internal accruals and liquid assets. - Remaining investment of about INR 10 to 12 crores is expected to be completed by June, after the facility has already started operations. - The company plans a third facility once it reaches 25,000 metric tons capacity, anticipated around mid-FY '25-'26. - Future capital investments will depend on performance during FY '24-'25 and FY '25-'26. - No external debt has been taken; expansions are fully funded from internal cash flows and treasury holdings.

- Target to scale volumes to 4,000 metric tons initially, progressing to 12,000 metric tons in FY25 and aiming for 25,000 metric tons by FY26. - Expect to achieve around 600-700 metric tons volume in Q4 FY24, mainly under the EPR platform. - Anticipate doubling revenue each year over the next 5-6 years, driven by increasing volumes and enhanced capacity utilization. - Expansion plans include starting a third facility once achieving 25,000 metric tons capacity utilization. - Growth driven by addition of large, multinational clients and increasing volumes from existing clients. - Government mandates and EPR platform activation expected to accelerate revenue growth starting Q4 FY24. - ASP expected around INR 130-140 per kg with EPR fees included, supporting higher revenue per ton processed. - Organic funding planned for expansions using internal accruals and treasury income.

- Eco Recycling anticipates strong volume growth, targeting 12,000 metric tons in FY25 and 25,000 metric tons in FY26, with potential scaling beyond that depending on performance. - Management expects to maintain minimum EBITDA margins of 40%, with current quarters achieving around 57-70%, indicating potential for sustainable high margins near 60%. - Revenue is projected to increase significantly due to expanding Extended Producer Responsibility (EPR) fees, which will start contributing from Q4 FY24, with incremental volumes fully under the EPR platform. - Asset turnover is strong, with an example of INR 50 crores investment yielding about INR 150 crores in sales (3x asset turnover). - No additional external funding is anticipated for current expansions; internal accruals and liquid assets will fund growth. - The company expects EBITDA and net profits to grow substantially, driven by volume growth, EPR fees, operational efficiencies, and increasing capacity utilization.

- For FY25 and FY26, the company is targeting utilization of 12,000 metric tons and 25,000 metric tons respectively. - BK Soni indicated that they have visibility of orders in hand to achieve these targets. - The volume guidance for Q4 is around 600 to 700 metric tons, with all expected volumes coming under the EPR (Extended Producer Responsibility) platform. - Contracts with reputed brands related to EPR fees are in place, though exact durations and rates are undisclosed. - Client additions continue with 9-10 new bulk corporate clients added in Q3 alone, supporting volume growth visibility. - The company maintains a policy to work only with fully compliant multinational clients, enhancing order quality and predictability.