Mining metal out of dead batteries
India imports almost all the lithium, cobalt and nickel that goes into its batteries. Recyclekaro pulls those same metals back out of the ones that have died — and says it is the only company in the country doing it for lithium.
Start here
Three parts. First the business, in plain terms. Then the financials, which have to be reconstructed because the year isn't complete. Then the valuation — where the number comes from and what it depends on.
Ten months of FY26 are provisional and unaudited; the final two months are management projections. See section 05.
Mining without a mine
The idea is simple enough to explain in one sentence: instead of digging metal out of the ground, take it out of things people have thrown away.
Why this matters in India specifically: the country has very little lithium, cobalt or nickel in the ground. Nearly all of it is imported. Every tonne recovered from a scrapped battery is a tonne that doesn't have to be shipped in.
That is also why the government has taken an interest, which we come back to in section 04.
What comes out
Two waste streams, two different sets of metals.
Most recyclers can recover cobalt and nickel. Lithium is the hard one — it is light, reactive, and easy to lose in the process. The company says that in 2022 it became the only firm in India extracting lithium from battery scrap. If that lead holds, it is the differentiator. If competitors close it, this becomes a commodity processing business.
Paid twice
There are two revenue engines, and they work in opposite directions on the same tonne of material.
Engine one is steady. Regulation creates the demand and it doesn't care what metal prices are doing. Engine two is not steady at all — it rises and falls with global cobalt, nickel and lithium prices, over which the company has no control.
Named customers include Bajaj Auto, Ather Energy, Hero MotoCorp and Tata Motors — which tells you the battery stream is tied to India's EV industry.
The plant and the pipeline
The plant is at Palghar, near Mumbai. In March 2025 e-waste capacity went from 7,500 to 24,000 tonnes a year and battery capacity from 4,200 to 10,000.
In April 2026 the company was declared eligible under the Ministry of Mines' incentive scheme for critical mineral recycling, part of the National Critical Minerals Mission, against a pledged investment of roughly ₹300 crore that would take capacity to about 50,000 tonnes.
The other things in motion
- IIT Bombay tie-up (May 2026) aimed at cutting battery recycling costs by around 40%.
- Rare earths research centre opened in Maharashtra in January 2026.
- Reloop, a direct-to-consumer recycling platform, launched June 2025.
- Board rebuilt through late 2025 with three independent directors added — usually a sign a company is preparing for outside scrutiny.
- ₹240 crore raise announced early 2026, with an IPO reportedly under consideration.
FY26, reconstructed
There is no complete audited FY26. What exists is ten months of provisional accounts to 31 January 2026, and a two-month management projection for February and March. Joined together:
| ₹ Crore | 10 months (provisional) | 2 months (projected) | FY26 total |
|---|---|---|---|
| Revenue from operations | 298.94 | 183.11 | 482.05 |
| EBITDA | 33.63 | 42.39 | 76.02 |
| Depreciation | 3.26 | 0.47 | 3.73 |
| Finance costs | 4.20 | 3.86 | 8.06 |
| Profit before tax | 26.17 | 38.07 | 64.24 |
| Tax | 6.43 | 8.55 | 14.98 |
| Profit after tax | 19.74 | 29.52 | 49.26 |
Run the two periods as monthly averages and they describe different companies:
Revenue per month 10m ₹29.9 Cr → 2m ₹91.6 Cr 3.1×
Profit per month 10m ₹2.0 Cr → 2m ₹14.8 Cr 7.5×
EBITDA margin 10m 11.2% → 2m 23.2%
Roughly 60% of the FY26 profit sits in two months that had not happened when the numbers were prepared. There may be a good operational reason — a new line commissioned, a large shipment contracted. But it is a projection, not a result, and the audited FY26 accounts are what will settle it.
Where the rupee goes
This is the single most important thing to understand about the business, and it is visible in one line of the accounts.
Compare this with a rental or software business, where the cost of delivering the next unit is small. Here it is almost everything. Recyclekaro is a spread business: it buys scrap at one price, extracts metal, and sells at another. The gap between the two is the entire margin.
Scale helps, but only so much. Doubling volume doubles the material bill too. The operating leverage sits in the ₹3.6 of running costs, which is already small.
Prices matter more than volumes. If cobalt falls 20% while scrap prices lag, the spread compresses fast. An 11% margin does not have much room in it.
Buying well is the skill. In a business like this, the competitive edge is as much in sourcing scrap cheaply and reliably as in the chemistry.
Cash trapped in the yard
The balance sheet at 31 January 2026 shows where the money actually sits.
Inventory of ₹130 crore and receivables of ₹91 crore together account for ₹221 crore of a ₹282 crore balance sheet. Property, plant and equipment is only ₹35 crore. This is not a capital-asset business — it is a working-capital business.
Which explains something otherwise puzzling in the valuation, and it is worth stating plainly before the next section.
Across the projection period the plan needs ₹518 crore of capital expenditure and ₹751 crore of additional working capital — about ₹1,269 crore in total.
The cumulative profit over the same period is ₹488 crore. The gap of roughly ₹780 crore has to come from borrowing or from issuing new shares. That is precisely why the company announced a ₹240 crore raise and is reported to be weighing an IPO.
₹9.29 lakh a share
An IBBI-registered valuer assessed fair value at ₹9,28,593 per share as at 31 January 2026, on shares with a face value of ₹10. The high number is simply because there are very few shares — 14,881 in issue.
| What that price implies | Multiple |
|---|---|
| P/E on reconstructed FY26 profit | 32.3× |
| P/E on FY27 projected profit | 19.8× |
| Price to book value | 9.0× |
| Enterprise value to FY26 EBITDA | 21.5× |
Note the share count. There are 14,881 shares in issue but 17,127 on a fully diluted basis, because of an ESOP pool of 2,246 shares. That pool is 15% of the issued capital — large enough to matter. Valued on issued shares alone the figure would be around ₹10.7 lakh; the ESOP dilution accounts for the difference.
Ownership sits at 62.31% with the promoter group and 37.69% with others.
What the DCF assumes
Three assumptions carry almost all the weight. Anyone relying on this number should look at these rather than the number itself.
One — revenue grows nearly five-fold in three years
| ₹ Crore · projected | FY26 | FY27 | FY28 | FY29 |
|---|---|---|---|---|
| Revenue | 482 | 874 | 1,423 | 2,254 |
| Growth | — | +81% | +63% | +58% |
| EBITDA | 76 | 147 | 240 | 380 |
| Profit after tax | 49 | 80 | 134 | 245 |
Three consecutive years of growth between 58% and 81%, with margins holding at around 17%. The capacity expansion supports the direction; the pace is management's estimate.
Two — all of the value is in the terminal year
Free cash flow is negative in every single year of the forecast: −₹53 crore, −₹370 crore, −₹173 crore, −₹25 crore. The explicit forecast period contributes minus ₹467 crore to the valuation.
The entire ₹1,590 crore rests on what the business is assumed to be worth after FY29 — calculated by applying an exit multiple of 17.06 times FY29 EBITDA. That multiple came from averaging Gravita India, Eco Recycling and Namo eWaste at 24.37 times, then cutting 30% for company-specific risk.
Three — a very high discount rate
The valuer used a WACC of 36.15%, built on a cost of equity of 38.40%: a 6.70% risk-free rate, a 19.11% equity risk premium, a beta of 1.06, and an added 11% company-specific risk premium. That last item is a judgement call, and the report lists what drives it — feedstock availability, regulatory compliance, evolving battery chemistry, metal price volatility, customer concentration, competition from the informal sector, and key-person dependence.
A 36% discount rate is unusually high and pulls the valuation down hard. It is the counterweight to the aggressive growth forecast. Change either one and the answer moves a long way.
The narrative states the cost of equity as 35.71%, but the table shows 38.40% — 35.71% is the weighted contribution to WACC, not the cost of equity itself.
The WACC table labels the market return as based on Sensex history, while the text explains it was derived from the CAGR of the NSE Nifty Microcap 250. Those are different indices. Neither error changes the arithmetic, but both are worth noting if the report is being relied upon.
What could go wrong
- Metal prices are outside the company's control. With an 11% operating margin on an 85% material cost, a sharp fall in cobalt, nickel or lithium prices compresses the spread quickly.
- Feedstock is the real constraint. Capacity is worthless without scrap to feed it. India's informal sector collects a large share of e-waste and operates with far lower compliance costs, which makes it a persistent competitor for the same material.
- The FY26 profit is 60% projection. Two unaudited months carry most of the year's earnings and imply a run rate several times the preceding ten.
- Growth needs roughly ₹780 crore of external funding beyond what the business generates. Terms and dilution on that money are not yet known, and the ESOP pool already accounts for 15% of issued capital.
- The valuation is a terminal-value calculation. Every forecast year produces negative cash. The number depends on a multiple applied to a profit figure four years out.
- Serious competition. Attero and Lohum are both well-funded and pursuing the same critical-minerals opportunity.
- Illiquidity. With 14,881 shares in issue and no exchange, exit depends on finding a private buyer. The valuer applied a 20% discount for exactly this reason.
A genuine industrial capability in something India needs — recovering critical minerals it would otherwise import — with real capacity, named customers and government backing. The lithium extraction claim, if it holds, is a real edge.
But it is a thin-margin spread business dressed in a technology story, it consumes cash to grow, most of FY26's profit hasn't been audited yet, and the valuation rests almost entirely on what the company is assumed to be worth after FY29.
None of that makes it a bad investment. It does mean the things to check are the audited FY26 accounts, the terms of the next funding round, and the realised metal price spread — not the fair value figure on its own.