💰 Financial Performance

Revenue Growth by Segment

The company operates in a single reportable segment: manufacturing of Reclaim Rubber Products. Total revenue from operations reached INR 21.90 Cr in H1 FY26, representing a significant growth of 138.04% YoY compared to INR 9.20 Cr in H1 FY25.

Geographic Revenue Split

Not disclosed in available documents; however, the company is headquartered in Gujarat with manufacturing facilities in Kheda district.

Profitability Margins

Net Profit Margin for H1 FY26 stood at 4.52% (INR 0.99 Cr profit on INR 21.90 Cr revenue), a slight decrease from 5.33% in H1 FY25. Profit Before Tax (PBT) margin was 6.53% in H1 FY26 compared to 7.17% in H1 FY25, impacted by rising interest and depreciation costs.

EBITDA Margin

EBITDA margin (excluding other income) was 12.88% in H1 FY26, a decline of 223 basis points from 15.11% in H1 FY25. While absolute EBITDA grew 102.88% to INR 2.82 Cr, the margin compression indicates that operating expenses grew faster (144.30%) than revenue.

Capital Expenditure

The company is in an expansion phase, with INR 5.51 Cr spent on the purchase of fixed assets during H1 FY26. Capital Work in Progress (CWIP) stood at INR 4.20 Cr as of September 30, 2025, compared to just INR 0.01 Cr in the previous year.

Credit Rating & Borrowing

CRISIL suspended the company's 'CRISIL B/Stable' rating in November 2016 due to non-cooperation and lack of information. Interest costs rose 70.97% YoY to INR 0.53 Cr in H1 FY26, driven by an increase in short-term borrowings to INR 5.93 Cr.

⚙️ Operational Drivers

Raw Materials

Scrap rubber and rubber waste are the primary raw materials, with 'Cost of Material Consumed' accounting for INR 5.56 Cr or 25.39% of total revenue in H1 FY26.

Capacity Expansion

Current capacity is not specified in MT, but the company is actively expanding as evidenced by the INR 12.43 Cr in fixed assets and INR 4.20 Cr in CWIP as of H1 FY26.

Raw Material Costs

Raw material costs were INR 5.56 Cr in H1 FY26, up from INR 2.47 Cr in H1 FY25. Procurement of stock-in-trade also increased significantly to INR 10.62 Cr, suggesting a shift toward trading or outsourced processing to meet high demand.

Manufacturing Efficiency

Depreciation and amortization expenses increased by 91.67% to INR 0.92 Cr in H1 FY26, reflecting higher utilization of new machinery and expanded production facilities.

📈 Strategic Growth

Expected Growth Rate

138.04%

Growth Strategy

Growth is being driven by aggressive capacity expansion and a shift into trading/stock-in-trade activities. The company invested INR 5.51 Cr in fixed assets in H1 FY26 to scale its reclaim rubber manufacturing. It is also leveraging its associate, Regrip Lead Recycling Private Limited, to potentially expand its recycling ecosystem.

Products & Services

Reclaim rubber of various grades and recycled rubber products manufactured from scrap rubber.

Brand Portfolio

LEAD Reclaim & Rubber Products.

Market Expansion

The company is scaling operations in the Kheda/Gujarat region with significant new investments in fixed assets (INR 5.51 Cr) to capture higher market share in the recycling segment.

Strategic Alliances

The company has an associate entity, Regrip Lead Recycling Private Limited, though its financial contribution to the group's profit was NIL for H1 FY26.

🌍 External Factors

Industry Trends

The reclaim rubber industry is growing due to the global shift toward circular economies and the cost advantage of recycled rubber over synthetic/natural rubber. LRRPL is positioning itself as a scrap rubber recycling specialist to benefit from these sustainability trends.

Competitive Landscape

The company competes with other reclaim rubber manufacturers and auto component suppliers in the Gujarat industrial belt.

Competitive Moat

The company's moat lies in its specialized recycling infrastructure and established promoter experience (Patel and Chauhan families). However, the moat is weakened by 'Information Availability Risk' which led to a credit rating suspension.

Macro Economic Sensitivity

Highly sensitive to the automotive industry cycle and environmental regulations regarding rubber waste disposal.

Consumer Behavior

Increasing preference for 'green' and recycled components by tire manufacturers and industrial rubber users is driving demand for LRRPL's products.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Companies Act 2013 and SEBI (LODR) Regulations 2015. The company follows Accounting Standards (AS) rather than Ind-AS.

Environmental Compliance

As a scrap rubber recycling unit, the company must comply with Gujarat Pollution Control Board norms and waste management regulations.

Taxation Policy Impact

The effective tax rate for H1 FY26 was approximately 30.7% (INR 0.44 Cr tax on INR 1.43 Cr PBT).

⚠️ Risk Analysis

Key Uncertainties

Information availability risk is the primary concern, as highlighted by CRISIL's inability to maintain a rating. This could lead to 10-15% higher financing costs or restricted access to capital.

Geographic Concentration Risk

High concentration in Gujarat, with the main manufacturing unit located in Village Pithai, Kheda.

Third Party Dependencies

Increasing reliance on 'Purchases of stock in trade' (INR 10.62 Cr in H1 FY26) indicates a dependency on external suppliers for finished or semi-finished goods.

Technology Obsolescence Risk

The company must continuously upgrade its recycling technology to maintain the quality of reclaim rubber grades required by modern tire manufacturers.

Credit & Counterparty Risk

Trade receivables increased to INR 6.81 Cr in September 2025 from INR 5.37 Cr in March 2025, representing 31% of H1 revenue, indicating potential working capital pressure.