Ashish Kacholia-backed smallcap stock tanks 34% in just two sessions. What’s behind the selloff?

Shares of Jain Resource Recycling, backed by ace investor Ashish Kacholia, came under heavy selling pressure on Tuesday, plunging as much as 19% to an intraday low of Rs 377 on the BSE. The stock has now fallen 34% over the last two sessions. As per the March quarter shareholding pattern, Kacholia held 1.14% stake in the company through Bengal Finance and Investment.

The sharp decline followed the company’s disclosure that geopolitical tensions between Iran and Israel severely disrupted its import supply chain during the March quarter, particularly in March 2026. According to the company, the conflict led to vessel rerouting and a sharp rise in port discharge liner charges imposed by shipping companies, costs that could neither be passed on to suppliers nor immediately recovered from customers.

The company said that the conflict triggered a spike in global oil and gas prices, which pushed up fuel procurement costs from domestic vendors and increased per metric tonne production costs. These exceptional and one-time cost pressures significantly impacted Q4 EBITDA per MT and compressed margins during the quarter.

Adding to the pressure, Jain Resource Recycling said its sale realisation as a percentage of LME declined by 1.25% to 1.50% in Q4. The company described this as a broader global sector trend, noting that sharp increases in LME copper prices often lead buyers worldwide to resist higher absolute pricing levels, resulting in lower formula-linked realisations for sellers across the value chain.

Despite the near-term challenges, the company said operating conditions have started improving in Q1FY27.

“We are pleased to inform that the situation has meaningfully improved entering Q1 FY27. Shipping lines have proactively rerouted vessels through alternative sea routes away from conflict-impacted corridors, and liner surcharges and port discharge costs have normalised substantially. This was a one-off March 2026 impact and will not recur in the coming quarters,” the company said in its investor presentation.
For Q4FY26, Jain Resource Recycling reported a net profit of Rs 66 crore, up 25.7% from Rs 52.5 crore in the corresponding quarter last year. Revenue from operations surged 76.4% year-on-year to Rs 3,105 crore from Rs 1,760 crore a year earlier. EBITDA rose 18% during the quarter to Rs 110 crore.The company also disclosed that the loss before tax from discontinued operations was linked to its investment in a UAE-based gold refining venture.

Jain Resource Recycling had partnered with Ikon Square Limited by acquiring a 70% stake in Jain Ikon Global Ventures (FZC), a free zone entity registered in Sharjah, UAE, which later became its subsidiary. The acquisition was undertaken to set up a gold refining facility in Sharjah, which commenced refining gold and its by-product silver in August 2024.

However, the Board of Directors, at its meeting held on August 24, 2025, approved the discontinuation of operations with effect from April 17, 2025, citing low margins, elevated operational overheads, working capital constraints and continued volatility in the gold refining business.
On the operational front, the company said execution across its expansion pipeline remains broadly on track.

“On the project execution front, we continue to make steady progress across our expansion pipeline, with overall implementation remaining broadly in line with the guidance shared earlier,” the management said.

The company added that it successfully commissioned the first furnace under its Copper Anode Expansion project during the quarter, adding a capacity of 800 MT per month. The second furnace, which will add another 800 MT per month capacity, is at an advanced stage of installation and is expected to be commissioned during the June quarter, in line with earlier guidance.

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