Resgen Ltd Management Discussions

FY 24-25

The Management Discussion and Analysis (MD&A) of ResGen Limited presents an in-depth narrative of the industry landscape, company operations, financial performance and strategic outlook for the financial year ended March 31, 2025. It is intended to provide shareholders, investors, and stakeholders with a clear understanding of the Companys progress, its alignment with sustainability goals, and its preparedness for future opportunities and challenges.

Industry Landscape and Policy Context

The Indian waste-to-energy and recycling sector continues to evolve as one of the fastest-growing components of the broader sustainability economy. With over 3.5 million tonnes of plastic waste generated annually, of which a significant portion remains non-recyclable, the pressure on industry and policymakers to provide scalable solutions has intensified. The regulatory environment has been strengthened by amendments to the Plastic Waste Management Rules, including the enforcement of Extended Producer Responsibility (EPR), which has compelled producers and brand owners to take responsibility for the lifecycle of their products. Simultaneously, regulations surrounding end-of-life tyre management have created demand for organized, industrial-scale recycling facilities that can process and recover energy, carbon black, and other by-products from waste tyres.

Globally, the conversation on sustainability has shifted from mere compliance to proactive transformation. Multinational corporations and local enterprises alike are aligning with environmental, social, and governance (ESG) frameworks to maintain competitiveness, secure investments, and future-proof their operations. In India, the Swachh Bharat Mission, the National Bio-Energy Mission, and the countrys Net Zero 2070 commitment provide strong policy-level support for enterprises that integrate circular economy models into their businesses. These trends have positioned ResGen not only as a participant but as a leader in an industry that is increasingly central to Indias growth story.

Company Overview and Business Model

ResGen Limited is a sustainability-driven enterprise that transforms non-recyclable plastic and end-of-life tyres into renewable fuels and high-value industrial substitutes. The Companys core philosophy is built around redefining waste, reimagining resources, and regenerating value. By converting waste into products such as PlasEco, pyrolytic oil, recovered carbon black, and recycled steel, ResGen provides industries with cost-e_ective, cleaner, and more sustainable alternatives to fossil fuel-based resources. The business model integrates environmental stewardship with financial viability. Waste is procured from multiple sources, processed using advanced pyrolysis and recycling technologies, and converted into marketable green products. This creates a closed-loop system that benefits industry clients, supports national sustainability missions, and generates long-term financial returns. The Company also derives competitive advantage from its diversified revenue streams, which include the sale of fuels, recovered materials, and EPR compliance services, The governance framework of a listed entity further strengthens the Companys credibility and positions it well to attract institutional investors and long-term stakeholders.

Operational Review (FY25)

The year under review was marked by steady operational execution and capacity utilization, despite external challenges in raw material availability and fluctuations in industrial demand. Plastic processed during the year stood at 9,741.69 metric tonnes, compared to 8,182.50 metric tonnes in FY24. The company produced 4,240.76 kilolitres of plastic-based pyrolysis oil, down from 4,840.88 kilolitres in FY24. Carbon recovery amounted to 659.87 metric tonnes, while gases generated reached 2,435.42 metric tonnes, higher than 2,045.63 metric tonnes in FY24.

In addition, during FY25, the company produced 2,127.83 kilolitres of pyrolysis oil from 4,600.70 metric tonnes of rubber. This process further yielded 1,375.86 metric tonnes of carbon and 635.29 metric tonnes of steel scrap. The company also processed 2,578.82 kilolitres of semi-processed pyrolysis oil, compared to 3,397.49 kilolitres in FY24.

Overall, total pyrolysis oil production during FY25 stood at 6,368.89 kilolitres, an increase from 4,840.88 kilolitres in FY24. Similarly, total carbon recovery rose to 2,035.73 metric tonnes, compared to 818.25 metric tonnes in the previous year. Nevertheless, the Company maintained its commitment to environmental compliance, with zero untreated discharge from operations.

The launch of TyreTurn, ResGens dedicated tyre recycling initiative, further strengthened the Companys operational profile. The partnership with BNZ secured access to advanced catalytic pyrolysis technology, which is expected to enhance e_ciency and yields in the coming years. Together, these initiatives illustrate ResGens commitment to scaling up responsibly while deepening its technological capabilities.

Financial Performance (FY25)

ResGen reported significant growth in revenue and profitability during FY25, despite an operational environment characterized by volatility in feedstock supply and pricing. Sales increased to Rs 651.59 million (Rs 65.16 crore) from Rs 455.02 million (Rs 45.50 crore) in FY24, representing a robust year-on-year growth of over 43 percent. This growth was primarily driven by increased sales of PlasEco and other green fuel substitutes, supported by growing adoption among energy-intensive industries.

Profit before tax rose to Rs 111.40 million (Rs 11.14 crore) in FY25 compared to Rs 91.79 million (Rs 9.18 crore) in FY24, reflecting improved scale and operating leverage. However, PBT margins as a percentage of sales moderated slightly to 17.10 percent from 20.17 percent, attributable to higher input costs and capacity utilization pressures. Profit after tax for the year stood at Rs 79.80 million (Rs 7.98 crore), up from Rs 65.69 million (Rs 6.57 crore) in FY24, translating into an earnings per share of Rs 3.80 as compared to Rs 3.13 in the previous year.

The Companys financial position remains strong, underpinned by disciplined cost management, robust governance practices, and a conservative capital structure. Improved profitability, coupled with the Companys ability to maintain a healthy balance sheet post-IPO, enhances its capacity to invest in capacity expansion, new technologies, and diversification opportunities.

ESG, Sustainability and Governance

Sustainability is integral to ResGens identity. Every tonne of plastic and tyre waste processed represents waste diverted from landfills, incineration, or illegal disposal. By producing renewable substitutes such as PlasEco and recovered carbon black, the Company contributes directly to reducing greenhouse gas emissions and lowering the carbon footprint of its clients.

During FY25, ResGen processed 9,741.69 metric tonnes of plastic waste, underscoring its pivotal role in supporting Indias plastic waste management agenda. The Company also continued to engage with clients to support their EPR obligations, further strengthening its role as a compliance enabler. On the social front, ResGen has continued to prioritize workforce safety, skills training, and community engagement around its operations. Governance remains anchored in transparency, accountability, and adherence to listed company standards, thereby ensuring investor confidence and long-term resilience.

SWOT Analysis

ResGens strengths lie in its diversified product portfolio, strong alignment with ESG priorities, and its ability to combine innovative technologies with a listed governance structure. The strategic partnership with BNZ provides access to cutting-edge recycling technologies, Weaknesses include dependence on consistent feedstock supply and relatively smaller scale compared to global players. Opportunities remain abundant in the form of stricter EPR enforcement, rising demand for renewable fuels, and expansion into e-waste and agri-waste streams. Threats include feedstock price volatility, regulatory changes, and the inherent risks of technology obsolescence.

Risks and Mitigation

The Company operates in an industry sensitive to raw material supply risks, regulatory uncertainties, and market fluctuations. ResGen mitigates these risks through diversified sourcing arrangements, proactive regulatory engagement, and continuous investment in R&D. Market risks are addressed through a diversified product mix spanning fuels, recovered materials, and compliance services. Technology risks are mitigated through the BNZ partnership and ongoing innovation, while governance risks are managed through rigorous compliance and board oversight.

Opportunities and Strategic Outlook

The opportunities for ResGen are underpinned by strong industry tailwinds and supportive policy interventions. The global waste-to-energy market is expected to grow at a compound annual growth rate (CAGR) of around 6-7 percent through 2030, driven by increasing waste generation, rapid urbanization, and the urgent need to reduce reliance on landfills and incineration. Within India, the plastic waste management market is projected to expand at a CAGR of over 8% during the same period, owing to stricter enforcement of the Plastic Waste Management Rules, rising awareness among industries, and the growing adoption of circular economy practices. The end-of-life tyre recycling market is similarly expected to grow at double-digit rates, with estimates suggesting a CAGR of 10-12%, as regulatory pressure and demand for recovered carbon black and sustainable fuels continue to rise.

ResGen is uniquely positioned to capture these opportunities. Its integrated model of converting non-recyclable waste plastics and tyres into renewable fuels, carbon substitutes, and industrial gases directly addresses the most pressing challenges of waste management and resource scarcity. The Companys ability to scale operations while maintaining environmental compliance provides a strong competitive edge.

International markets also present meaningful opportunities. There is rising global demand for recovered carbon black, an essential input for tyre and rubber manufacturing, with end-users increasingly seeking sustainable alternatives to virgin carbon black. Similarly, green fuels derived from pyrolysis oil are gaining acceptance in energy-intensive industries such as cement, steel, and power. ResGens ability to consistently produce high-quality outputs creates a strong foundation for tapping export opportunities and diversifying its customer base.

The Companys strategic initiatives, the TyreTurn project to address end-of-life tyres, and the partnership with BNZ to adopt advanced catalytic technologies, collectively position it for accelerated growth in the coming years. These initiatives not only expand operational capacity but also enhance technological resilience, ensuring that ResGen remains ahead of industry standards.

Looking ahead, ResGens strategic priorities will revolve around expanding production capacity, improving input-to-output ratios through process innovations, scaling its EPR solutions to serve a wider client base, and entering adjacent streams such as e-waste and agricultural residue recycling. With Indias overarching commitment to Net Zero 2070 and the global trend toward decarbonization, the Companys business model is deeply aligned with national and international sustainability goals.

In summary, ResGens opportunities are defined by rapid industry growth, favourable policy support, rising demand for sustainable substitutes, and its own strategic initiatives. The outlook for the Company is one of sustained growth, resilience, and expanding influence in the global sustainability ecosystem.

Conclusion

FY25 was a year of consolidation and growth for ResGen. The Company demonstrated resilience in operations, reported strong revenue and profitability growth, and made strategic strides in capacity, technology, and ESG. Post-IPO, ResGen has strengthened its governance standards and visibility, enabling it to attract investors and partners aligned with its mission. The Company remains committed to its role as an enabler of circular economy solutions, delivering long-term value to shareholders while contributing meaningfully to society and the environment.