ARDEE INDUSTRIES LTD – Q1 FY27 CONCALL HIGHLIGHTS
#Q1FY27
Q1FY27 Financial Performance
- Revenue stood at ₹338.8 Cr, up 35.2% YoY vs ₹250.6 Cr.
- EBITDA stood at ₹33.8 Cr vs ₹33.9 Cr YoY.
- EBITDA margin stood at 10%.
- PBT stood at ₹26.7 Cr, up 5% YoY.
- PAT stood at ₹19.9 Cr, up 6% YoY.
- PAT margin stood at 5.9%.
- Sales volume increased to 17,645 MT vs 15,529 MT YoY.
- Revenue mix: 61.3% domestic and 38.7% exports.
Capacity Expansion
- Installed capacity increased 50.9% to 1,56,950 MTPA from 1,04,025 MTPA.
- Expansion became effective from 29 May 2026.
- Expansion was achieved through brownfield debottlenecking of the existing facility.
- Around ₹15 Cr CAPEX was incurred for the expansion.
- New capacity is primarily refining capacity and provides a future growth buffer.
- Current utilization is around 65%.
- Optimum plant utilization is around 70–75%.
- Higher utilization is expected progressively, with FY28 offering better scope.
- No immediate further capacity expansion is planned.
Volume & Growth Outlook
- Management targets broadly 10–20% volume/revenue growth for FY27.
- Around 20% growth is the broad upper-end target.
- Management remains conservative because of geopolitical and supply-chain uncertainty.
- H2 is expected to be stronger than H1.
- FY26 volume was around 70,000 MT.
- FY27 volume could broadly reach around 84,000–85,000 MT.
- Growth is expected to be driven by volume, not metal-price inflation.
- Q1 finished-goods realization was around ₹2.09 lakh/MT.
- If geopolitical conditions improve, growth and margins could outperform current guidance.
Raw Material & Supply Chain
- Middle East disruptions affected imported raw-material availability.
- Higher freight costs and route blockages remain challenges.
- Company deliberately avoided aggressive procurement during the disruption.
- Management is developing domestic sourcing to diversify supply.
- Domestic procurement has already started through corporates and auctions.
- Domestic scrap is currently more expensive than imports.
- Domestic sourcing also faces availability, pricing and GST-related challenges.
- Import/domestic sourcing mix is expected to remain broadly similar if conditions normalize.
- If disruptions persist, imports could decline with higher domestic sourcing.
Margin Outlook
- FY26 EBITDA margin was around 13%.
- Q1FY27 EBITDA margin declined to 10%.
- Management currently guides for around 10% margin for FY27.
- Geopolitical uncertainty and higher freight costs are key margin pressures.
- Domestic raw-material and petroleum-linked costs also impacted gross profit per tonne.
- Q1 gross profit per tonne was around ₹34,500 vs ₹38,000 in Q4.
- If market conditions normalize, margins can improve.
- Management prefers conservative guidance amid current uncertainty.
Exports
- Export revenue increased from ₹81.6 Cr in FY24 to ₹465 Cr in FY26.
- Company currently exports to 8 countries.
- Exports contributed 38.7% of Q1FY27 revenue.
- Export strategy supports capacity utilization, customer diversification and margins.
- Management indicated export margins are slightly better than domestic business.
- Working-capital requirement is broadly similar.
- Ardee LED 99.97 has been empanelled with the London Metal Exchange (LME).
- LME registration has increased international inquiries.
- Company also has the ARDEE brand listed on MCX.
- LME/MCX presence strengthens pricing transparency and global credibility.
Lead Recycling & Circular Economy
- Core business focuses on recycling lead-acid batteries and non-ferrous scrap.
- Recycled material is processed into high-purity lead and specialized lead alloys.
- Lead demand is supported by automotive, backup power, telecom and renewable-energy storage.
- Management views the business as more than a commodity opportunity.
- Circular production provides both economic and environmental advantages.
- Focus remains on improving recovery rates, technology and recycling infrastructure.
Lead Alloys
- Alloy business currently contributes around 30–35% of production.
- Company is focusing on increasing the share of specialized alloys.
- Alloy ramp-up is gradual because of OEM approvals and qualification requirements.
- Existing refining capacity can be utilized for either pure lead or alloys.
- Higher alloy production can improve product diversification and customer relationships.
Working Capital & IPO Proceeds
- Current working-capital cycle is around 90–100 days.
- FY27 gross working-capital requirement is expected at ₹400 Cr+.
- Around ₹220 Cr of IPO proceeds is earmarked for working capital.
- Funds will primarily support additional scrap procurement.
- Company is developing new scrap sources across different global geographies.
- Additional working capital will support selected export origins requiring higher customer credit.
- IPO proceeds are also being used for debt reduction.
Balance Sheet
- Around ₹20 Cr long-term debt was repaid on 14 August.
- Working-capital limit utilization is currently almost zero due to IPO proceeds.
- Around ₹150 Cr is held in FDRs as interim deployment of IPO funds.
- Management expects a positive balance-sheet and cash-flow impact during FY27.
- Return ratios are expected to normalize after the equity infusion.
- Management expects to maintain 20%+ return ratios in coming years.
Customer Concentration
- Business naturally serves a limited number of large customers.
- Top 4–5 customers continue to account for a major share of business.
- Largest-customer concentration has reduced from around 70% to 40%.
- Management expects concentration to decline further as the company grows.
- However, top customers will continue to contribute a significant portion of revenue.
New Opportunities
- Company is evaluating multiple growth opportunities beyond lead recycling.
- Lithium-ion battery recycling is being evaluated, but no concrete entry plan has been finalized.
- Management is also evaluating opportunities in other metal-recycling segments.
- No immediate further expansion has been committed.
- Focus remains on utilizing existing expanded capacity efficiently.
KEY TAKEAWAY
- ₹1,500 Cr order visibility; 10–20% growth target with margin upside if conditions improve.
1September 1, 2026 548 2
