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Motilal Oswal Report
According to Motilal Oswal, Jain Resource Recycling Ltd. is positioned for long-term growth, aided by rising demand for recycled metals and a regulatory shift favoring organised players. Its strategy focuses on expanding capacity, manufacturing value-added products, and strengthening customer engagements, which is likely to drive sustained margin improvement. The company is also benefiting from India's lead and copper demand growing faster than global trends.
To move up the value chain, Jain Resource is developing higher-value products across both lead (tin) and copper (cathode, anodes, and busbar). These initiatives are expected to materially enhance realizations, margins, and earnings visibility.
Securing reliable, cost-efficient scrap supply remains core to its operating model. Jain Resource has built a strong global sourcing network spanning 120+ countries (with direct procurement of ~71% of its FY25 imports from overseas scrapyards). With total capacity set to increase from 184K MT to 300K MT by FY28, the brokerage believes the company is well placed to capitalize on structural industry tailwinds.
Boosted by this strong growth outlook, Motilal Oswal expects the company to achieve a revenue/Ebitda/adjusted profit after tax compound annual growth rate of 36%/48%/56% over FY25-28.
The stock currently trades at a P/E of 32x/22x/16x for FY26E/FY27E/FY28E. With an RoE/RoCE of 31%/23% in FY28E, the brokerage values Jain Resource at a 21x FY28E EPS of Rs 24.4 (in line with the five-year average and ~25% discount to the three-year average of Gravita) to arrive at traget price of Rs 520. Initiate with a Buy rating.
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