Copper Stock: Can AI Data Centres, EVs and the Demerger Drive Its ₹5,000 Cr Ambition?

Synopsis: Bhagyanagar India is transforming from a commodity copper producer into a value-added manufacturer, supported by rising demand from AI data centres, EVs and renewable energy. With a planned demerger, premium product expansion and a Rs 5,000 crore FY30 revenue target, the company is aiming to drive long-term growth and improve margins.

Copper is becoming one of the world’s most critical industrial metals as electrification, renewable energy, AI data centres and electric vehicles accelerate global demand. India is expected to emerge as one of the fastest-growing copper markets over the coming decades, creating significant opportunities for domestic manufacturers. 

Against this backdrop, Bhagyanagar India is expanding its focus from commodity copper products to higher-margin value-added solutions while pursuing capacity expansion, exports and a planned demerger to unlock shareholder value and support its ambitious FY30 growth plans. 

With a market cap of Rs 1,200 crore, the shares of Bhagyanagar India Ltd are trading at Rs 375 and are trading at a PE of 24 compared to their industry’s PE of 54. The shares have given a return of more than 670% in the last 5 years.

India’s Copper Demand Enters a Multi-Year Growth Cycle 

Copper has emerged as one of the most essential metals in the context of the global energy transition, owing to the increasing demand from electric vehicles (EVs), renewables, AI data centres, and other power infrastructure. 

According to management, global consumption of copper is expected to grow from the current level of 26 million tonnes to 50 million tonnes by 2050, with India expected to emerge as the second-largest copper consumer in the world.

In this context, Bhagyanagar India has successfully evolved from being just a commoditised copper producer to becoming one of the most prominent secondary copper producers in India. With its over four decades of experience, more than 500 customers, and capacity of 35,000 MTPA, the company aims at generating revenues worth Rs 5,000 crore by FY30.

Record FY26 Performance Highlights the Shift Towards Value Addition 

FY26 was a record-breaking year for Bhagyanagar India. For the very first time, the company surpassed the revenue mark of Rs 2,000 crore. The operational EBITDA also crossed the mark of Rs 100 crore, along with PAT surpassing Rs 50 crore. 

The revenue of the company was Rs 2,377.8 crore, and the margin for EBITDA and PAT was 4.5% and 2.1%, respectively. The return on equity and return on capital employed have increased to 22% and 20%, respectively.

In Q4 FY26, the fourth quarter became the most successful for the company. Revenue for the quarter was around Rs 735 crore, and the operational EBITDA and PAT were Rs 36 crore and Rs 18.5 crore, respectively. 

The management attributed such performance not only to the increased price of the copper but also to the increase in volume and better product mix. Margins of EBITDA have been nearly 5% for the past two quarters, and margins for PAT were 2.5%.

One more favorable point is the growth in shareholder equity from Rs 207 crore to Rs 257 crore due to the retained earnings, and the ratio of outside liabilities to operational EBITDA has become 2.6x from 7.7x.

AI Data Centres Could Become a High-Margin Growth Driver 

One of the highlights of the earnings call included Bhagyanagar India venturing into silver plating and tin plating of copper bus bars for AI data centres. The speciality bus bars have been exported to Canada and the US, and some supplies have already gone to local data center projects. 

As per management, these bus bars have EBITDA margins of about 10%, which is much higher than that of the overall portfolio of the company. Even though the current contribution is low, management expects the AI data center products to be contributing around 7-10% of revenue in the coming three to five years.  Considering that AI data center requires highly conductive electrical systems, these speciality bus bars may emerge as an important business for the company.

EVs, Renewable Energy and Electrification Continue to Drive Demand 

Apart from AI, Bhagyanagar is witnessing structural growth in EVs, renewable energy, and energy infrastructure businesses as well. It is currently supplying copper products to the automotive, transformer, switchgear, solar, and industrial segments through over 500 customers in its customer base.

For FY26, Bhagyanagar reported a 34% increase in copper sales volumes from 18,000 metric tonnes to 24,000 metric tonnes. Management has highlighted that the growth in revenues came about not only because of copper price increases but also due to robust volume growth. 

Moving ahead, it is expecting volume growth of 15-20% along with 5% of growth in copper prices, thereby justifying its revenue CAGR target of 20-25%. Moreover, Bhagyanagar is also working on enhancing its product portfolio. In Q1 FY26, value-added products were 52% of sales, whereas it was near 62% at the end of the fiscal year. For next year, management has a target of 66%.

Value Addition and Recycling Strategy Could Expand Margins Further

One of the important pillars of the long-term strategy of Bhagyanagar India is the increased contribution of the value-added product segment as well as increased value per tonne of raw material processed. 

Management pointed out that the company has been moving away from its commodity copper products over time, and value-added products have contributed almost 62% of its revenues compared to 52% at the beginning of FY26. 

The next goal is to take this percentage to 66% by launching new products and expanding the capacity. In addition to copper products, the company has decided to follow the principle of closed-loop recycling. 

It has planned to invest nearly Rs 10 crore in a plastic recycling project which would allow them to process the cable waste obtained from imported copper scrap and generate plastic granules and aluminium ingots to be used again in the manufacturing process. 

In contrast to regular recyclers, Bhagyanagar has clarified that it will recycle the plastic and aluminium waste along with the imported copper scrap and not plastic alone.

The Demerger Could Unlock Shareholder Value

Another significant catalyst would be the planned corporate restructuring. Bhagyanagar intends to spin off its copper segment from its real estate portfolio, where the copper segment will be moved into a separately listed company, but the currently listed company will still own its land and windmills.

The management has mentioned that they have obtained approval from the shareholders, creditors, and regulators and have already filed for a joint petition at the NCLT. The objective of the corporate restructuring is to split up the company into two distinct business segments, and investors can value each of them on their merits.

The spinning off of one business segment from another is likely to result in higher business clarity and better allocation of capital by investors. In the case of Bhagyanagar, management believes that this will help both the companies grow independently.

Management Targets Rs 5,000 Crore Revenue by FY ’30 

The board, in light of its record performance in the year ended FY26, has charted an ambitious roadmap for the coming years. The plan involves doubling revenues to Rs 5,000 crore by FY30 and maintaining EBITDA margins of 5% with increases in both volume and value-added products.

The management sees volume growth at 15-20% annually, with remaining revenues coming from copper prices. Capacity has grown to 35,000 MTPA from 30,000 MTPA through new heat recovery facilities which increase fuel efficiencies and cut down production cycle times. 

Export markets have also been targeted, with sales made outside India being dominated by premium products like silver-plated and tin-plated bus bars required in AI data centres. One more differentiating factor for the company is its global sourcing capabilities. 

The company procures scrap copper from over 30 countries with a deliberate diversification strategy where less than 5% of its scrap comes from Gulf countries. About 35% of imports come from the US, with the rest coming from Europe, Brazil, Canada, and Australia.

Can Multiple Growth Drivers Help Bhagyanagar Achieve Its Ambition? 

In the investment thesis for Bhagyanagar, India, structural themes are increasingly dominating the commodity-driven theme. As the firm benefits from an uptick in copper demand from EVs, renewable energy, power infrastructure, and AI data centers while also becoming more profitable through high-value-added products, the transition to premium copper solutions has led to record revenues, EBITDA and profits in FY26. 

The demerger process could be another catalyst which would create a pure play company focusing solely on the copper business. While the execution of the Rs 5,000 crore revenue target will depend on the capacity increase, exports and sustained demand from the growth segments, it is evident that the management strategy is not just about scaling up but also margin improvement. 

In case the company manages to diversify the range of premium products, demerge and leverage long-term demand from AI infrastructures and electrification, it could solidify its presence as one of the leading value-added secondary copper manufacturers in India.

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