💰 Financial Performance

Revenue Growth by Segment

Total Operating Income (TOI) grew by 9.75% YoY to INR 919.30 Cr in FY25 from INR 837.63 Cr in FY24. The Lead recycling segment remains the primary driver, while the Li-ion recycling subsidiary (NLPL) contributed to growth in its first full year of operation in FY25.

Geographic Revenue Split

The majority of revenue is derived from the domestic Indian market, specifically through long-term supply agreements with Amara Raja Batteries Limited (ARBL). The company is currently exploring export opportunities to overseas markets to diversify its customer base and improve revenue visibility.

Profitability Margins

Gross margins are impacted by raw material costs which constitute 90% of the cost structure. Net Profit Margin improved from 3.72% in FY24 to 3.95% in FY25. Operating Profit Margin (PBILDT) stood at 6.12% in FY25, up from 5.50% in FY24, driven by better pricing strategies and professional hedging of commodity prices.

EBITDA Margin

PBILDT margin was 6.12% in FY25, representing a 62 bps increase YoY. Core profitability improved due to a 10% increase in TOI to INR 920 Cr and stable demand from OEMs despite volatile raw material prices.

Capital Expenditure

The company is undertaking a total capital expenditure of INR 60 Cr for its subsidiary, Nile Li-Cycle Private Limited. This is funded through INR 40 Cr in bank term loans and INR 20 Cr from internal accruals. Phase 1 is operational, and Phase 2 (hydrometallurgy) is expected to be fully operational by Q4FY26.

Credit Rating & Borrowing

CARE Ratings reaffirmed 'CARE A-; Stable' for long-term bank facilities (INR 60 Cr) and 'CARE A2+' for short-term facilities (INR 30 Cr). Working capital utilization is low at approximately 5-10%, with an interest coverage ratio of 53.94x in FY25.

⚙️ Operational Drivers

Raw Materials

Lead and Lead-bearing scrap (used batteries) represent approximately 90% of the total cost structure. Other materials include chemicals for alloying and smelting.

Import Sources

Majority of requirements are met domestically. Imports are sourced from European scrapyards and Middle Eastern countries to supplement domestic supply.

Key Suppliers

The top 10 suppliers contribute approximately 90-95% of total procurement. Specific names include various domestic battery collectors and international scrapyards.

Capacity Expansion

Current Lead recycling capacity is 107,000 TPA (32,000 TPA at Choutuppal and 75,000 TPA at Tirupati). Li-ion recycling (NLPL) currently processes 40-50 tonnes per month in Phase 1, with Phase 2 expansion underway.

Raw Material Costs

Raw material costs account for 90% of the total cost structure. The company maintains a minimum stock of 1.5x monthly orders, making it sensitive to LME price fluctuations. Procurement is managed through annual contracts and spot purchases.

Manufacturing Efficiency

Capacity utilization is supported by annual job work agreements with ARBL. Efficiency is enhanced by end-to-end recycling solutions that comply with the Battery Waste Management Rules (BWMR) 2022.

Logistics & Distribution

Distribution is primarily focused on supplying ARBL's facilities. The company is exploring international logistics for the export of Black Mass (Mixed Metal Oxide) from its Li-ion plant.

📈 Strategic Growth

Expected Growth Rate

16.43%

Growth Strategy

Growth will be achieved through the scaling of the Li-ion recycling subsidiary (NLPL), which is expected to be fully operational by Q4FY26. Additionally, the company is diversifying its customer base by exploring export markets for lead alloys and black mass, and expanding its relationship with Amara Raja Advanced Cell Technologies.

Products & Services

Pure Lead, Lead Alloys (Antimonial and Selenium Lead), and Mixed Metal Oxide (Black Mass) from Li-ion recycling.

Brand Portfolio

Nile Limited (Corporate Brand), Nile Li-Cycle (Subsidiary).

New Products/Services

Lithium-ion battery recycling services and the production of Black Mass (Mixed Metal Oxide) for local and international battery material companies.

Market Expansion

Targeting international markets for Black Mass exports and expanding domestic lead recycling capacity to meet OEM demand.

Market Share & Ranking

One of the few organized players providing end-to-end recycling solutions in India; specific market share percentage not disclosed.

Strategic Alliances

Established long-term relationship with Amara Raja Batteries Limited (ARBL). Discussions are ongoing with Amara Raja Advanced Cell Technologies for synergistic opportunities in Li-ion recycling.

🌍 External Factors

Industry Trends

The Global Battery Recycling Market is expected to grow from $19.4 billion in 2024 to $69.4 billion by 2034. Tightening environmental regulations (BWMR 2022) favor organized players like Nile by eliminating unorganized competition.

Competitive Landscape

Competes with other organized recyclers and a large unorganized sector. The shift toward organized recycling due to government norms is a key competitive advantage.

Competitive Moat

Moat is built on a 30-year track record, stringent environmental licenses (PCB valid till 2027), and a deeply integrated relationship with ARBL. These are sustainable due to high regulatory entry barriers for new recycling plants.

Macro Economic Sensitivity

Highly sensitive to global non-ferrous metal prices (Lead) and the growth of the domestic automotive and industrial battery sectors.

Consumer Behavior

Increasing demand for electric vehicles and portable electronics is driving the shift toward Li-ion battery recycling.

Geopolitical Risks

Trade barriers or changes in import regulations for used lead-acid batteries could impact raw material availability from European and Middle Eastern scrapyards.

⚖️ Regulatory & Governance

Industry Regulations

Subject to Battery Waste Management Rules (BWMR) 2022, which mandates Extended Producer Responsibility (EPR) and prohibits landfill disposal, benefiting end-to-end recyclers.

Environmental Compliance

Maintains a waste disposal contract with Ramky Enviro Engineers Limited. PCB inspection was last conducted in FY22, with certification valid until FY27.

Taxation Policy Impact

Effective tax rate is not explicitly stated, but PAT was INR 40.83 Cr on PBT implied by PBILDT of INR 58.04 Cr minus depreciation and interest.

Legal Contingencies

No major audit observations or significant pending court cases reported in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Raw material price volatility (90% cost exposure) and extreme customer concentration (90% revenue from one client) are the primary risks, with potential impact on margins exceeding 1-2%.

Geographic Concentration Risk

High concentration in South India (Telangana and Andhra Pradesh) where manufacturing plants are located, and 90% revenue from a single domestic client.

Third Party Dependencies

90-95% dependency on the top 10 suppliers for raw materials and 90% dependency on ARBL for revenue.

Technology Obsolescence Risk

The shift from Lead-Acid to Li-ion batteries is a risk, which the company is mitigating by investing INR 60 Cr in its Li-ion recycling subsidiary.

Credit & Counterparty Risk

Receivables quality is high; the collection period is approximately 30-35 days, with payments from major customers like ARBL received timely.