πππ¨ ππππ²ππ₯π’π§π πππ
Q4 FY24 ππ¨π§πππ₯π₯ ππ’π π‘π₯π’π π‘ππ¬:
β Established a new e-waste recycling facility with a capacity of 18,000 metric tons in Vasa, Maharashtra.
β Achieved recognition from the Prime Minister and a central government minister for its sustainable practices.
β Successfully conducted a collection drive for individual consumers, gathering over 10,940 kg of e-waste.
β Ecoreco is confident that its commitment to compliance and best practices will position it as a preferred partner for e-waste management.
β The company is exploring opportunities in emerging markets to serve multinational corporations.
β Ecoreco believes its focus on innovation and ethical practices will lead to significant growth in the future.
β The increasing generation of e-waste, along with government policies, is expected to drive long-term demand for its services.
β The existing plantβs capacity utilization is around 60%. The company expects to reach 75-80% utilization in the coming quarter and further increase utilization with the new facility.
β The decrease in other income is due to a combination of factors, including income from investments and fair value adjustments.
β Ecoreco currently produces black mass from lithium-ion batteries and is exploring partnerships for future chemical processing.
β The company expects to see a rise in EPR revenue as the EPR portal adoption grows.
β The portal was shut down for 15 days (from 19th March to 20th of April 24), impacting revenue collection.
β Recyclers didnβt fulfill their obligations faced delays in EPR fee collection (restart on 22nd appeal to 27th appeal). These delays explain the difference in EPR fees compared to previous quarters.
β There wasnβt a significant ramp-up in tonnage (quantity of materials recycled) in Q4 because the company prioritizes higher-margin items (electronic devices) over freezers and washing machines with lower profitability (around 10%).
β They believe focusing on high-margin items offers better returns even at lower volumes.
β The company focuses on securing deals with manufacturers who agree to their profitability requirements.
β The company will continue dealing in black mass. Technology acquired from CMax allows for future potential of metal recovery, but economics of supply and demand need to align first.
β Around 10% of the business involved data destruction/recycling in the previous quarter. The company expects this to remain between 10-12% in the current quarter.
β Investors are concerned about the recent decrease in profit margin despite high EBITA (earnings before interest, taxes, depreciation, and amortization). Management attributes this to a one-off event and a focus on high-value materials with potentially lower capacity utilization.
β Capacity Utilization suggests a range of Rs 30-40 per kg for profitability calculations.
β Future revenue and capacity utilization. Management maintains a hopeful outlook for achieving 100% capacity utilization by March 2026 and suggests a range of Rs 40-50 crore for future profitability.
β The 18,000-ton capacity addition is already set up and on track for 50% utilization by March 2025 and close to 100% by March 2026.
β Management doesnβt see collection centers as an efficient way to acquire high-value materials like phones and laptops. They believe direct courier partnerships are more effective.
β Difficulty in modeling future revenue due to the focus on high-value materials with potentially lower capacity utilization.
β Emphasizes the importance of high-value materials for long-term profitability. Provides a range for future profitability calculations (Rs 30-40 per kg).
Subscribe To Our Free Newsletter |