Motilal Oswal sees 30% upside in Jain Resource Recycling share price. Should you buy?

Jain Resource Recycling is set for long-term expansion, supported by increasing demand for recycled metals and a regulatory shift that favours established companies, according to brokerage firm Motilal Oswal Financial Services.

The company's strategy involves enhancing capacity, producing value-added products, and fortifying customer relationships, which is expected to lead to sustained improvement in margins.

Additionally, the company is experiencing growth in India's lead and copper demand, outpacing global trends.

The domestic brokerage firm has initiated coverage with a BUY rating and has set a target price of ₹520, anticipating an upside of up to 30%.

“We expect Jain Resource Recycling to deliver a CAGR of 36%/48%/56% in revenue/EBITDA/PAT over FY25-28, driven by an increase in capacity of its core products, expansion of its global presence, entry into antimony, and higher value-added copper products. We value the stock at 21x FY28E (in line with the five-year average and ~25% discount to the three-year average of GRAVITA), EPS of ₹24 to arrive at our TP of ₹520. We initiate coverage on Jain Resource Recycling with a BUY rating,” added the brokerage.

Jain Resource Recycling is among the largest recyclers of non-ferrous metals in India. It functions on a unified platform that processes various materials all in one place, boasting a total capacity of 287,000 metric tons. The company has transformed into a prominent recycling firm with a wide range of capabilities across lead (approximately 44% of revenue and around 45% of volume), copper (about 50% of revenue and 21% of volume), and aluminum (roughly 4% of revenue and 4% of volume).

Where growth takes the ‘Lead’

The brokerage reported that Jain Resource Recycling started its lead recycling operations in CY13 and currently accounts for a significant portion of Jain Resource Recycling's revenue, contributing approximately 44% and 43% in FY25 and 9MFY26, respectively. Lead recycling has been a driving force behind the company's growth, achieving a revenue compound annual growth rate (CAGR) of around 38% between FY22 and FY25. The volume experienced a CAGR of approximately 32% in the same period, reaching about 155MT in FY25.

The domestic secondary market is anticipated to remain a crucial driver of growth, with secondary lead demand expected to grow at a CAGR of approximately 6.5% to 1.7MMT by CY30. The share of secondary lead in the market is projected to stay at 85%, fueled by expansion within the end-user industry, according to Motilal Oswal.

“FY28, driven by tailwinds from the regulatory policy. EBITDA/MT is estimated at ₹21,067 in FY28 vs. ₹16,897 in FY25, led by the higher-value by-products,” said the brokerage.

Jain Resource Recycling share price today opened at ₹414.80 apiece on the BSE, the stock touched an intraday high of ₹415.70 per share and an intraday low of ₹408.30 per share.

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