ICICI Securities has initiated 'Buy' coverage on Jain Resource Recycling with a target price of Rs 350. The brokerage points to a shift toward high-value copper products as a key growth driver. Investors should weigh this potential 25% upside against risks like high import reliance, customer concentration, and the stock's recent decline from earlier peaks.
ICICI Securities has started tracking Jain Resource Recycling, issuing a 'Buy' rating with a target price of Rs 350. Based on the recent market price of Rs 281, this target implies a potential upside of approximately 25%. The brokerage expects the company to improve its earnings through the fiscal year 2029 by focusing on higher-value products and better efficiency.
Transition to High-Value Copper Products
The core of the positive view centers on the company’s strategic move into high-value segments, such as copper cathodes and wire rods. Analysts suggest that by prioritizing these products, the company can improve its profit quality and earnings predictability. The firm is currently working to integrate its supply chain—meaning it is trying to better control the materials needed for its production processes—which is expected to support growth over the next few years. While the stock currently trades at a lower valuation compared to sector peer Gravita India, the brokerage believes successful execution could lead to a re-rating of the company’s share price.
Key Risks and Operational Challenges
Investors should consider several risks alongside the growth story. A major factor is the company’s heavy dependence on imported scrap, which makes up about 75% to 80% of its raw material needs. This leaves the business vulnerable to global supply chain disruptions and price changes in international markets. Furthermore, the company has a high concentration of customers, with more than half of its revenue coming from its top 10 clients, which poses a risk if any of these relationships face issues.
Operational stability is another monitorable. The company faced a temporary setback in July 2026, when an incident at its Unit II furnace affected operations. Additionally, the company has seen periods of negative cash flow, which can sometimes impact financial flexibility. On the positive side, CRISIL Ratings did upgrade the company’s long-term bank facilities to 'CRISIL AA-/Stable' in late August 2026, indicating some stability in its credit profile.
Historical Stock Context
It is important for investors to note the stock's recent journey. The shares have experienced significant volatility, falling from an all-time high of Rs 593.95 in May 2026. This decline reflects broader uncertainty within the recycling sector. Moving forward, the key things for investors to watch will be the speed at which the company successfully scales its high-value copper business, its ability to manage foreign exchange and commodity price risks, and its success in maintaining stable operations without further production halts.