Shares of Jain Resource Recycling Ltd. experienced a sharp decline this week, plummeting over 33% in just two trading days, concluding with an 18.51% drop in Tuesday's early session to hit a low of Rs 378. This significant fall comes on the heels of the company's fourth-quarter (Q4 FY26) results and a notable executive departure.
Q4 Results Highlight Margin Contraction
The company's Q4 FY26 earnings report indicated a contraction in margins, which analysts attribute primarily to the volatile global copper prices and ongoing geopolitical disruptions affecting supply chains. Motilal Oswal Financial Services Ltd. (MOFSL) noted that despite an 18% year-over-year EBITDA growth, challenges such as constrained scrap availability and elevated logistics costs impacted profitability.
Revenue for the quarter surged by 76% year-over-year to Rs 3,170 crore, driven by substantial growth in both the copper and lead businesses, which saw increases of 2.5x and 26% respectively. However, the sharp margin contraction overshadowed these revenue gains, unsettling investors.
Analyst Outlook: Temporary Setback Expected
MOFSL suggests that the severe margin contraction in Q4 FY26 is likely a temporary issue. The brokerage firm points to exceptional copper volatility, particularly following sharp spikes in London Metal Exchange (LME) prices, and broader geopolitical supply chain issues as the primary drivers. They anticipate a gradual recovery in the copper segment's profitability as copper realization formulas shift towards longer-term 'green formula' contracts and alternative shipping routes alleviate material availability concerns.
Despite reducing their FY27 and FY28 earnings estimates by 15% and 16% respectively, factoring in the lower-than-expected Q4 performance, MOFSL has maintained its 'Buy' rating on Jain Resource Recycling stock. The brokerage set a target price (TP) of Rs 560, based on 27x FY28E EPS, signaling confidence in the company's long-term prospects.
Key Leadership Change Announced
In a separate development impacting investor sentiment, Jain Resource Recycling informed exchanges that Bibhu Kalyan Rauta has resigned from his roles as Company Secretary, Compliance Officer, and Key Managerial Personnel. Rauta's resignation is effective June 20, 2026, citing personal commitments.
The company also announced the appointment of B Venkateswar as its cost auditor for the financial year 2026-27 (FY27), ensuring continued financial oversight.