🟢 At a Glance
Sunlite Recycling is a copper scrap recycler turned premium copper product maker. Sales? ₹1,397 Cr. Profit? ₹14 Cr. ROE? 36%. But wait — March 2025 also brought GST raids, IT raids, and fraudulent ITC notices worth ₹16.84 Cr. Still, stock is up 80% from its lows. So what gives? Let’s plug in.
1. ⚡ Introduction with Hook
Sunlite is the kind of SME stock that gets every smallcap Telegram group buzzing:
- 💰 ₹1,397 Cr revenue, but just ₹14 Cr PAT
- 🤷♂️ Operating margins stuck at 2%
- 🪙 ₹180 Cr market cap at just 0.13x sales
- ⚖️ Promoters under GST & IT investigation
- ⚙️ Massive forward integration plans with new copper product launches
- 🚀 Share price went from ₹91 to ₹165 — almost 80% gain in 6 months
This isn’t just a copper story. It’s a spicy “paisa toh bana, but kaise?” thriller.
2. 🔧 WTF Do They Even Do? (Business Model)
Sunlite recycles copper scrap and makes:
- Copper rods, wire bars
- Copper conductors
- Copper earthing wires and strips
- Annealed tinned coated copper
- Busbars (recent launch)
Their output feeds into:
- 🏭 Power generation
- ⚡ Transmission & Distribution
- 📟 Electrical & Electronic industries
They’ve positioned themselves as an eco-friendly substitute to primary copper with pricing arbitrage and claim superior conductivity.
🆕 Forward integration in FY25 includes:
- Tinned copper for domestic EV & electrical market
- Busbars for industrial panels and infra
But here’s the twist — 1.5% OPM in copper? That’s like running a sugar mill with diabetes.
3. 📊 Financials – Profit, Margins, ROE, Growth
| FY | Sales (₹ Cr) | Net Profit (₹ Cr) | OPM | ROE | EPS |
|---|---|---|---|---|---|
| FY23 | 1,150 | 6 | 1% | 36% | ₹112.00 (pre-split) |
| FY24 | 1,166 | 9 | 2% | 35.6% | ₹11.12 |
| FY25 | 1,397 | 14 | 2% | 35.6% | ₹13.12 |
🧠 Key Takeaways:
- Despite high volumes, margins remain razor thin
- ROE is misleading due to low equity base until FY24
- PAT growth: 60% YoY, but from low base
4. 🪙 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹165 |
| Market Cap | ₹180 Cr |
| P/E | 12.6x |
| EV/Sales | ~0.13x |
| Book Value | ₹55.2 |
| P/B | 2.99 |
| ROCE | 35.9% |
| ROE | 35.6% |
💡 Verdict: Looks cheap on revenue, decent on PE, but margin red flags + regulatory cloud means this is not guilt-free investing.
5. 🔥 What’s Cooking – News, Triggers, Drama
🚨 Let’s break it down:
- 📅 Mar 2025:
- ₹16.84 Cr GST demand for fraudulent ITC claims
- IT Dept searches Sunlite & MD’s house — ₹5 lakh seized
- 🏭 Oct 2024-Apr 2025:
- ₹6 Cr capex for tinned copper
- Launch of busbars + annealed tinned copper
- 📈 Potential re-rating due to capacity expansion and product premiumization
- 💸 Equity capital jumped from ₹0.5 Cr to ₹11 Cr in 2 years — Dilution alert
🚨 Fraud + Capex = Rare Combo Meal
6. 📉 Balance Sheet – How Much Debt, How Many Dreams?
| Year | Equity | Reserves | Borrowings | Total Assets |
|---|---|---|---|---|
| FY23 | ₹0.5 Cr | ₹3 Cr | ₹46 Cr | ₹72 Cr |
| FY24 | ₹8 Cr | ₹12 Cr | ₹35 Cr | ₹63 Cr |
| FY25 | ₹11 Cr | ₹49 Cr | ₹9 Cr | ₹94 Cr |
🟢 Reduced debt from ₹46 Cr → ₹9 Cr
🟢 Clean reserve build-up to ₹49 Cr
🔴 Aggressive equity expansion — suggests dilution
7. 💵 Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | ₹2 Cr | -₹3 Cr | ₹3 Cr | ₹2 Cr |
| FY24 | ₹11 Cr | -₹2 Cr | -₹12 Cr | -₹2 Cr |
| FY25 | ₹8 Cr | -₹6 Cr | -₹2 Cr | -₹0.2 Cr |
⚠️ Burning cash on capex
✅ Stable cash from ops
🧯 Minimal reliance on debt in FY25
8. 📐 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROCE | 35.9% |
| ROE | 35.6% |
| P/E | 12.6x |
| Debtor Days | 5 |
| Inventory Days | 12 |
| Payable Days | 4 |
| CCC | 13 days |
| Working Capital Cycle | 13 days |
✅ Clean working capital
✅ High returns
🔴 OPM still stuck at 2%
🧨 But GST fraud case looms
9. 🧾 P&L Breakdown – Show Me the Money
Half-Yearly (H2 FY25):
| Period | Sales (₹ Cr) | PAT (₹ Cr) |
|---|---|---|
| Sep ’24 | ₹637 | ₹7 |
| Mar ’25 | ₹760 | ₹7 |
⚙️ Operating Profit = ₹24 Cr in FY25 on ₹1,397 Cr sales
📉 Margin = ~1.7%
🧠 This is basically a metal trading company with compliance issues dressed up as a green copper play
10. 🥊 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE | OPM | Sales (₹ Cr) | CMP |
|---|---|---|---|---|---|
| Baheti Recycling | 35.4x | 35.8% | 7.75% | ₹524 Cr | ₹615 |
| Precision Wires | 37.1x | 16.6% | 4.6% | ₹4,035 Cr | ₹187 |
| Shera Energy | 19.6x | 13.7% | 4.6% | ₹1,277 Cr | ₹143 |
| Rajputana Ind. | 21.5x | 17.1% | 3.3% | ₹552 Cr | ₹80 |
| Sunlite | 12.6x | 35.6% | 1.7% | ₹1,397 Cr | ₹165 |
🧠 Undervalued? Maybe.
🧨 Risk-adjusted? Debatable.
11. 📜 Misc – Shareholding, Promoters, Raids
| Mar 2025 |
|---|
| Promoters: 73.77% |
| FIIs: 0.32% |
| DIIs: 1.31% |
| Public: 24.6% |
| Shareholders: 767 |
🔍 Promoter group = Under IT scrutiny
🧾 ₹16.84 Cr GST notice is no chillar
📦 5 lakh in cash seized during IT raids (Mar 2025)
This raises concerns about:
- Input credit abuse
- Underreported revenue?
- Dummy transactions?
12. ⚖️ EduInvesting Verdict™
Sunlite is like that student who scored 95% in boards but got caught with chits in the pocket.
✅ Strong revenue growth
✅ Product expansion into busbars, tinned copper
✅ Clean working capital & decent valuation
BUT…
❌ Operating margin = wafer thin
❌ ₹16.84 Cr GST demand
❌ Promoter IT raids
❌ Dilution + capex funding unclear
📈 If you’re riding this SME for the copper boom — cool.
🚨 If you think this is a clean, ESG dream stock — we’ve got some tinned copper to sell you.
EduVerdict™: Sunlite is shining. But keep your shades on — the audits are coming.
✍️ Written by Prashant | 📅 July 4, 2025
🏷️ Tags: Sunlite Recycling, Copper Wire, SME Stock, GST Fraud, Tinned Copper, NSE SME, EduInvesting, Industrial Conductors, Metal Stocks
