Sunlite Recycling (SUNLITE) Q2 FY27 Profit Jumps 29% as Copper Rod Plant Runs Full
The copper recycler posted a 24% revenue surge and 29% profit growth, driven by its main rod plant running at over 100% capacity.
Sunlite Recycling Industries reported a 24% sequential revenue jump to ₹2,076 crore in Q2 FY27. Net profit grew 29% to ₹34 crore as its core copper rod plant ran at full capacity, pushing margins slightly higher.
For a copper recycler, growth is a function of volume and the thin margin it can hold on each tonne. Sunlite Recycling’s September quarter shows what happens when the main plant runs full: revenue jumped 24% from the March quarter to ₹2,076 crore, and profit grew 29% to ₹34 crore. The net profit margin edged up 10 basis points to 1.7%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 |
|---|---|
| Period | Sep 2026 |
| Revenue (₹ Cr) | 2,075.51 |
| Profit (₹ Cr) | 34.27 |
| Net Profit Margin | 1.7% |
The driver was clear. According to the company’s investor presentation, its copper rod capacity ran at 100.9% utilization in the first half of FY27. Total copper product utilization stood at 91.4%, as reported by FlashFinance. This pushed half-yearly standalone sales volume up 10.6% year-on-year to 13,831 metric tonnes.
Why margins held despite a cost surge
Employee costs surged 75% quarter-on-quarter, a spike the company has not explained. Yet overall expenses grew in line with revenue, and profit grew faster. The cushion came from a shift in the product mix.
Management is pushing into higher-margin downstream products like busbars and ATC wires. The investor presentation shows standalone EBITDA margin expanded 43 basis points year-on-year to 2.38% for the half-year. This mix shift, alongside full utilization, allowed profit to outpace the top line.
The expansion that must deliver
With the core rod plant already over-utilized, the next leg of growth depends entirely on new capacity. Management has outlined a ₹37 crore capital expenditure plan to add 21,000 tonnes of capacity by Q1 FY28, as per the Arthneeti report.
The plan includes 20,000 tonnes of additional copper products and 1,000 tonnes of value-added busbar and ATC capacity. It will be funded by bank loans and internal accruals. The market is now watching for timely execution, as this expansion represents about 23% of the company’s FY26 net worth.
The thin line it walks
Sunlite’s business model remains exposed to the volatility of copper scrap prices, a risk flagged by rating agency Crisil. Its EBITDA margin, while improving, is still thin at around 2.4%. Any sharp move in raw material costs or a slowdown in demand from the electrical and renewable sectors could quickly pressure profitability.
Institutional investors have been cautious. Data from Sector Alpha shows domestic institutions reduced their stake by 3.3 percentage points over seven quarters to just 0.7% as of September 2026.
Key Points
- Copper rod plant utilization exceeded 100%, driving a 24% quarterly revenue increase to ₹2,076 crore.
- A shift toward higher-margin products like busbars helped expand half-yearly EBITDA margin by 43 basis points to 2.38%.
- A ₹37 crore capacity expansion is critical for future growth, with 21,000 tonnes of new capacity targeted by Q1 FY28.
- The stock trades at a P/E of 21.2, a 112% premium to its industry, after a 156% one-year price return.
Hexa Perspective
The quarter confirms Sunlite can deliver volume growth when its plants are full. The real test is whether it can maintain its slight margin gains while funding and ramping up new capacity. The planned expansion is sizable relative to its balance sheet, and success hinges on continued strong demand from power and renewables. Investors are paying a steep premium for growth that must now be executed without a misstep in a commodity-linked, low-margin business.
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