Waste Management stock in focus after it plans demerger of its biomass and restore bag divisions

Synopsis:- Shares moved 4% after a proposed business split aimed at a sharper focus and value creation. The company reported 40% revenue growth to ₹148.43 crore in Q2FY26, while net profit surged 306% to ₹2.97 crore, supported by strong demand and marquee clients.

The shares of the recyclable waste supplier rose up to 4 percent from intraday’s low after the company proposed a scheme of arrangement to demerge its Biomass and Restore Bag divisions to unlock focused growth.

With a market capitalization of Rs 253.03 crore, the shares of Race Eco Chain Limited were trading at Rs 146.62 per share, decreasing around 1.59 percent as compared to the previous closing price of Rs 148.01 apiece.

Business Demerger

Race Eco Chain Limited has proposed a demerger to streamline its diversified waste management operations. The Biomass Division, which trades briquettes made from agricultural waste, and the Restore Bag Division, engaged in cloth bags and home furnishings, will be carved out into separate entities. In FY25, Biomass recorded a turnover of  Rs 1,870.70 lakh (4.06%), while Restore Bag posted  Rs 893.82 lakh (1.94%) of the company’s total  Rs 46,029.91 lakh revenue.

The rationale behind the demerger is to unlock focused growth by creating two independent, specialised listed companies. With mature operations and rising opportunities, segregating these businesses into GeoeCo Green Energy and Race Gateway is expected to improve strategic clarity, operational efficiency, and long-term value creation for shareholders, employees, and other stakeholders.

Under the proposed scheme, shareholders will receive equity shares instead of cash consideration. For every 100 shares held, investors will get 113 fully paid-up shares of GeoeCo (Resulting Company 1). Additionally, for every 25 shares held, they will receive 27 fully paid-up shares of Race Gateway (Resulting Company 2), both with a face value of ₹10 each.

Financial Performance

The company delivered a strong performance in Q2FY26, with revenue jumping 40% to  Rs 148.43 crore from  Rs 106.29 crore a year ago. Profitability improved sharply, as net profit surged 306% to  Rs 2.97 crore, reflecting better operating leverage, improved margins, and disciplined cost management during the quarter.

Race Eco Chain has built a strong and diversified biofuel client base, serving leading corporates such as Reliance Industries, Sun Pharma, Mankind, CEAT, Dabur, Patanjali, GSK, Unilever, PepsiCo, and the Aditya Birla Group. This blue-chip customer mix highlights the company’s credibility, stable demand visibility, and growing relevance in India’s sustainable energy and waste-to-value ecosystem.

Race Eco Chain is a diversified waste management company focused on creating sustainable value through recycling, biomass trading, and eco-friendly products. Its operations span biomass briquettes, recycled PET waste, cloth-based products, and other waste streams, supporting India’s circular economy while reducing environmental impact across industrial and consumer segments.

The company serves a strong base of blue-chip clients, including Reliance Industries, Sun Pharma, Dabur, Unilever, and the Aditya Birla Group. With rising demand for biofuels and sustainable materials, Race Eco Chain is strengthening its market position through focused growth initiatives, operational scale, and long-term partnerships with large corporations.

Written by Abhishek Singh

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