Press Release
Deal
Deal value—
Deal vs businessQ1 FY27 revenue of ₹253.94 Cr (up 88.9% YoY) represents an annualized run rate of ~₹1,015 Cr vs FY25 revenue of ~₹535 Cr.
Execution period—
Fundamental gradeB
AI projections
Revenue uplift (yr1 / steady)65.0% / 124.0%
EPS uplift85.0%
Upside base / bull / bear45.0% / 85.0% / -35.0%
Horizon18-24 months
Realized market record
Entry — next-day open (28 Jul 2026)₹712.0
Latest close (15 Oct 2026)₹722.0
Return since+1.4%
α vs Smallcap 250+2.5%
Positives
- Explosive Q1 FY27 topline growth of 88.9% YoY to ₹253.94 Cr, putting the company on pace for its Vision 2028 targets.
- Entry into new high-margin verticals including Copper Alloy Ingots (₹4.72 Cr in Q1) and upcoming Aluminium Wire Rods (₹200-250 Cr potential).
- Strong promoter backing at 74.13% with high return on capital (ROCE 22.0%).
- Obtained IATF certification opening direct supply relationships with major automotive OEMs (Ola, TVS, Hero).
Risks
- High financial leverage with Debt/Equity ratio of 2.46 (Debt ₹229 Cr vs Net Worth ₹93 Cr).
- Thin net profit margins (3.0%-3.5%), making earnings highly vulnerable to international scrap price spikes.
- High reliance on imported aluminium scrap feedstock from UK, USA, and New Zealand.
Full AI brief
1. Executive Summary & Catalyst Evaluation
On July 27, 2026, Baheti Recycling reported Q1 FY27 net revenue of ₹253.94 Cr, representing an 88.9% YoY jump compared to ₹134.43 Cr in Q1 FY26. Growth was driven across primary lines—Alloy Ingots (₹149.27 Cr) and De-Ox (₹63.87 Cr)—alongside the initial rollout of Copper Alloy Ingots (₹4.72 Cr). This performance validates management's 'Vision 2028' roadmap aiming for ₹1,200+ Cr in annual revenue.
2. Industry Context & Execution Assessment
- Industry CAGR: The secondary aluminium recycling industry in India is growing at 9-11% CAGR, significantly outpacing primary aluminium (1-2%), supported by decarbonization trends and automotive lightweighting.
- Capital Intensity: Medium. While melting and processing facilities require moderate capex, the business is heavily working-capital intensive due to inventory and global scrap procurement.
- Execution Risk: Moderate. Main hurdles relate to scrap availability, price volatility (78% of revenue is raw material cost), and managing debt-funded working capital.
3. Financial Quality & Growth Math
- Current Financial Base: FY25 estimated revenue of ~₹535 Cr with PAT of ₹18 Cr (3.43% net margin). Net Worth stands at ₹93 Cr against Debt of ₹229 Cr (D/E: 2.46).
- Revenue Projection: Q1 FY27 run-rate suggests FY27 revenue could reach ~₹900-950 Cr (+70-75% YoY). Full implementation of the 12,500 MT wire rod facility in H2 FY27 will add an incremental ₹200-250 Cr topline in FY28.
- Earnings Acceleration: Assuming steady-state net margins improve slightly to 3.5%-3.8% via higher-value wire rod and copper ingot mix, FY28 PAT could scale to ₹42-45 Cr (vs ₹18 Cr in FY25), representing an EPS growth of ~130-150% over a 3-year period.
4. Valuation Scenarios (18-24 Month Horizon)
- Base Case (+45%): FY28 Revenue hits ₹1,100 Cr with 3.5% PAT margin (PAT ₹38.5 Cr). P/E re-rates modestly to 18x given high D/E balance sheet.
- Bull Case (+85%): Vision 2028 achieved early (₹1,250 Cr revenue) with 4.0% PAT margin (PAT ₹50 Cr) due to high-margin wire rod scale-up; debt leverage reduces. Target multiple 22x.
- Bear Case (-35%): Raw material/scrap prices surge by >10%, squeezing net margins to ~1.5-2.0%, while high debt service costs drag bottom-line growth.
5. Multibagger Verdict Rationale
Baheti Recycling is rated as a POSSIBLE multibagger with a score of 68. The growth trajectory and operational scaling are top-tier; however, the thesis is constrained by high balance sheet leverage (D/E 2.46) and thin operating margins vulnerable to commodity price volatility.
Analysis as of 2026-07-27 (price ₹712.60) ·
AI research, not investment advice.
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