Nexxus Petro Commissions Tyre Pyrolysis Plant in Rajasthan

Nexxus Petro Industries Ltd will commission its Used Tyre Pyrolysis Plant with a 30 TPD capacity in Pali, Rajasthan. The plant is set to begin commercial production on August 30, 2026. Phase 1 of the project has a capital expenditure of Rs 14 Crore, funded through internal accruals.

Reader Takeaway: Shift to manufacturing, higher margins targeted; watch monsoon impact.

What just happened

Nexxus Petro Industries Ltd has announced the commissioning of its new Used Tyre Pyrolysis Plant in Pali, Rajasthan. The facility is designed for a capacity of 30 tonnes per day (TPD) in Phase 1, with potential to scale up to 60 TPD in Phase 2. Commercial production is slated to commence on August 30, 2026.

The total capital expenditure for this project is Rs 14 Crore, which the company states will be funded entirely through internal accruals.

Why this matters

This development marks a significant strategic shift for Nexxus Petro, moving from its previous business model of trading oil and carbon to captive manufacturing. The company expects this new segment to deliver higher net profit (PAT) margins of 8–10%. For FY 2026-27, the company projects a consolidated turnover of Rs 400 crore with a PAT of at least 4%.

The company previously traded approximately 250–300 MT of oil and 180–200 MT of Carbon per month. By producing its own Used Tyre Pyrolysis Oil (TPO) and Carbon, Nexxus Petro aims to capture value addition in manufacturing. TPO can be used as a substitute for Light Diesel Oil (LDO) in hot-mix bitumen plants.

The backstory

Nexxus Petro Industries has been involved in trading activities. The decision to invest in a pyrolysis plant signifies a backward integration and a move towards in-house production to enhance profitability and control over the value chain.

What changes now

The company will now engage in the manufacturing of TPO and Carbon. Phase 1 will operate with a 30 TPD capacity and will be supported by 500 KL of on-site liquid storage. The company plans to initiate Phase 2, an additional 30 TPD modular unit, within a few months after Phase 1 achieves successful commercial operations.

Risks to watch

Investors should be aware of potential risks. Revenue and margins could be affected by seasonality, particularly during the monsoon period (H1) when road-laying activities, a key use for TPO, are often suspended. Additionally, margins are sensitive to crude oil prices, as raw bitumen is a significant cost component. The scaling of operations may also depend on government mandates and regulatory guidelines concerning bio-bitumen and related products.

Management Commentary

Mr. Haresh Senghani, Chairman & Managing Director, stated that the new facility moves the company into high-margin in-house production. He also emphasized that the investment was funded through internal accruals, reflecting a focus on disciplined capital management. The company also noted that the project is expected to benefit from an approximate 5% annual interest subsidy for 7 years, subject to necessary approvals.

Context metrics (time-bound)

• Phase 1 Revenue Target: Rs 25–30 crore per annum.
• Phase 2 Revenue Target: Rs 50–60 crore per annum.
• Phase 1 Capacity: 30 TPD.
• Phase 2 Capacity: Scalable to 60 TPD.
• Commercial Production Start: August 30, 2026.
• Capital Expenditure: Rs 14 Crore.
• Projected FY 2026-27 Consolidated Turnover: Rs 400 crore.
• Projected FY 2026-27 Consolidated PAT: At least 4%.
• Segment PAT Margin Target: 8–10%.

What to track next

Investors should closely monitor the successful commencement of commercial production by August 30, 2026, and the progress of the Phase 2 expansion. Tracking the company's ability to achieve its projected revenue and margin targets, while managing raw material price volatility and seasonal demand, will be crucial.