Synopsis: Copper is a critical metal for the future as it is durable ,recyclable, and conducts electricity well. In 2025 this metal saw its value surging by 36 percent due to increased demand and use cases. Around the same time of the surge a microcap company also witnessed its stock rise by 121 percent reflecting potential growth story.
Copper has gone under a significant rally this year, as the red metal has witnessed a 36 percent year-over-year growth. Alongside the surge in metal prices a microcap stock where the company is engaged in the business of manufacturing copper components from recycled copper scrap saw its stock surge as well.
Therefore, In this article we are going to try to understand how this upsurge in copper value is going to affect the copper recycling stock in the context. With a market capitalization of Rs 341 crore, Sunlite Recycling Industries Ltd is a microcap company that is engaged in the copper recycling and manufacturing business. It was established in 2012 and is headquartered in Gujarat, the company currently operates a state of the art production facility in Kheda.
Sunlite Recycling Industries specialises in processing recycled copper scrap sourced from both domestic markets and international geographies such as Saudi Arabia, the UAE and the USA, converting it into high quality copper products.
The company’s diversified product portfolio caters to a wide range of end use industries, including domestic applications, industrial manufacturing, automotive, power generation, power transmission and distribution, and the electronics sector. With a strong distribution network and customer presence across more than 10 Indian states and Union Territories, Sunlite Recycling Industries Ltd has built a robust footprint in India’s copper recycling and sustainable manufacturing ecosystem.
Financials
In H1FY26, Sunlite Ltd saw its half yearly revenue grow by 76 percent, going from Rs 637 Cr in H1FY25 to Rs 1122 Cr in H1FY26. And a lot of this revenue has its exposure to copper in some or the other manner. The Net Profits grew by 100 percent, going from Rs 7 Cr in H1FY25 to Rs 14 Cr in H1FY26. Another point to note is that the company has a PE of 18 which is lower than its Industry PE of 21.
Stock Price Momentum
Talking about the price movement, the stock saw a 63 percent rise in the Q1FY26, and in Q2FY26 touched a peak price that was 15 percent higher than Q1’s closing, but since the start of Q3FY26 i.e October, as of today the stock has already shot up by more than 121 percent.
Why is Copper so beneficial?
Copper is a critical metal for the future due to its superior electrical conductivity, durability and 100 percent recyclability, making it essential for electrification, clean energy and digital infrastructure. The demand is set to rise structurally as global economies shift toward EVs, renewable energy and AI-led technologies.
Copper is used most extensively in electric vehicles, where it is found in motors, batteries, inverters, wiring and charging systems, with EVs consuming up to 3 to 4 times more copper than conventional vehicles. EV charging infrastructure and power grids rely heavily on copper for cables, transformers and substations.
Where all is copper used?
In renewable energy, copper is a key material in solar panels, wind turbines, inverters and transmission lines. Moreover, AI data centres and cloud infrastructure consume large amounts of copper in power cabling, server racks, cooling systems and backup power, driven by high electricity loads.
Copper is also vital in electronics and semiconductors, energy storage systems, railways and electrified transport, industrial automation, and construction and urban infrastructure. It is copper’s irreplaceable role in EVs, AI data centres, power transmission and clean energy that makes it one of the most strategically important metals for the long term global growth.
Copper’s Rally
Lately, Global copper prices have surged sharply, the metal has delivered one of the strongest rallies in over a decade. Benchmark LME copper prices rose over 30- 40 percent year-to-date, climbing close to $13,000 per tonne, the highest levels since 2009. On the supply side, mine disruptions, declining ore grades and limited new capacity have tightened availability.
How is this rally going to affect Sunlite Recycling Industries
For Sunlite, the copper rally works in its favour on both the input and output sides. On the input side, the recycled copper scrap sourced becomes relatively cheaper when primary copper costs rise. This gives Sunlite a structural cost advantage, as scrap can be accessed more flexibly than mine output can be expanded during supply tightness.
On the output side, rising primary copper prices push customers in automotive, power transmission, electronics, and renewable energy to increasingly adopt recycled copper. Sunlite’s high-purity recycled copper, used in motors, batteries, grid infrastructure, and renewable installations, becomes a direct substitute for virgin copper as the price gap narrows. The energy and environmental benefits further strengthen its value proposition for cost-sensitive manufacturers.
Volume growth and market share expansion
The company’s 61 percent volume growth in H1FY26, from 7,753 MT to 12,502 MT, significantly outpaces industry norms. This reflects higher capacity utilisation at the Kheda facility, market share gains, and strong end-demand from electrification and clean energy. Electric vehicles, renewable energy infrastructure, and AI data centres are structurally copper-intensive, supporting multi-decade demand growth rather than a cyclical uptick.
Sunlite’s diversified customer base across industrial manufacturing, automotive, power generation, transmission, and electronics positions it well to capture these trends. Capacity enhancement plans further indicate confidence in demand sustainability. With the global copper scrap market projected to grow at a 8.64 percent CAGR through 2034, the sharp volume expansion points to market share gains rather than a one-off surge.
The metrics that offset the thin margins
While EBITDA margins of 1.95 percent and PAT margins of 1.28 percent appear thin, they are typical for copper recycling, where commodity prices dominate costs. The strength of the model is evident in return metrics, with ROCE at 36 percent and ROE at 36 percent in FY25. Efficient working capital management, reflected in a 13-day cash conversion cycle, allows the company to generate strong returns despite modest margins.
Rising copper prices increase working capital intensity as inventory and receivables rise. However, Sunlite has demonstrated strong discipline, with debtor days being in the range of 4- 5, inventory days at 10- 12, and stable cash flows even while funding 76 percent revenue growth. The improvement in net worth from 18 crore in FY24 to Rs 60 crore in FY25 to Rs 74 crore in H1FY26, tells us about the management’s capability to manage future price volatility.
Why recycled copper over primary copper production?
Compared with primary copper producers, recyclers like Sunlite benefit during price rallies. Primary producers face rising extraction costs, declining ore grades, regulatory delays, and geopolitical risks. In contrast, recycled copper consumes 85 percent less energy, requires far lower capital investment, and allows flexible sourcing of scrap. Regulatory support for circular economy models and tighter waste management norms further favour organised recyclers such as Sunlite.
Company Expansion
Apart from these the company has also done capex expansion in producing Annealed Tinned Coated(ATC), a high-performance electrical conductor which is in demand for various electrical applications including PCB, the foundational component of modern electronics which also expects a boom in India with a manufacturing CAGR of 45 percent.
Possible Risks
But it is also important to keep in mind that the copper rally also carries risks for Sunlite. A sharp correction in copper prices could reverse margin gains, with a 20- 30 percent decline likely compressing EBITDA per tonne unless offset by market share- led volume growth. Scrap supply, while more stable than primary copper, remains volatile and dependent on economic activity, demolition cycles, and e-waste generation, with recent data showing limited supply response during the rally.
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