Exide Industries Limited (EXIDEIND) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Exide Industries Q4FY26 Earnings Conference Call, hosted by Investec Capital Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aditya Jhawar from Invested Capital Services. Thank you and over to you, sir.

Thank you. Good afternoon to you all. From Exide Industries, we have with us MD and CEO Ms. Avik Roy, Director of Finance and CFO Mr. Mahmoud Kumar Agarwal, Mr. Praveen Saraf, MD and CEO of Exide Energy Solutions. Our President, Legal and Corporate Affairs and Company Secretary, Mr. Chitinder Kumar, and Mr. Rashaan Saraswath, Head of Investor Relations. Before we proceed, there is a disclaimer for the call. Few statements made by the company's management in the call may be forward-looking in nature, and we request you to refer to the disclaimer in the earnings presentation for further details. We will start the call with a brief opening remark from the management and followed by Q&A session. I would now like to hand over the call to Mr. Avik Roy for opening remarks. Thank you, and over to you, sir.

Thank you, Aditya. Good afternoon. Good afternoon, ladies and gentlemen, and a warm welcome to you all to the Excite earnings call. Before taking you through the key highlights of our performance, I would like to talk about some of the macro and industry drivers that shaped our operating environment in the last quarter. Globally, the West Asia conflict continues to be an ongoing threat. With regard to availability and pricing of commodities such as LPG, sulfuric acid, and plastics, the situation is quite alarming. Rapidly increasing commodity rates coupled with rupee depreciation continue to pressurize our input costs. But in contrast, the Indian demand situation remained favorable. Low inflation rates, low interest rates. And the consequence of GST 2.0 reforms increased in consumers' affordability, especially in the second half of FY26. Rural India experienced strong broad-based revival as well, driven by rising income, up-beat sentiment, and infrastructure development. Coming to the company's performance during Quarter 4, nearly 92% of the business has grown by about 16%. And that's basically includes our entire domestic business minus telecom. All key verticals grew double digits, headlined by two-wheeler and four-wheeler OEM, then home UPS, solar, two-wheeler and four-wheeler replacement market, as well as industrial infrastructure business, excluding telecom. Remaining 8% of the business witnessed a strong decline in revenues, exports being one of them. This was subdued by the given geopolitical situation, and telecom and e-richshark continues to shift towards lithium-ion technology. This translated to about 9.4% year-on-year overall revenue growth, and in quarter four, we generated our highest ever. Domestic business sales grew by 12.5% year on year. For the full year FY26, the company has delivered 4.1% year on year revenue growth. Again, nearly 92% of the business grew by double digits. The domestic business sales business grew by about 7.5% year on year for the full year. In Q4, the company continued to ramp up production, leading to higher capacity utilization, better absorption of fixed costs, and positive impact on the bottom line. The company was also able to maintain, on a sequential quarter basis, the EBITDA margin of 11.7%, buoyed by strong volume growth, improved product mix, and better realization, which was also helped a lot by lowering our warranty costs and benefits accruing out of our manufacturing excellence projects. This first resulted in expanding the EBITDA margin year-on-year by nearly 50 basis points. Q2.0 led demand surge continued in Q4, as auto OEM business recorded its second consecutive quarter of 25% plus year-on-year growth, also hitting its highest-ever quarterly revenue, breaking the mark set in Q3. Home UPS business recorded its highest-ever quarter-four sales uplifted by the little early onset of summer. Solar vertical return to double-digit growth. And I'm happy to inform you that we incubated and nurtured this solar vertical for the last few years, and this year they have crossed the 1,000 crore mark for the full year. Two-wheeler and four-wheeler replacement demand remained robust as it continued in its mid-teens growth rates as in the past quarters. Industrial infrastructure, excluding telecom, continued its strong performance, maintaining double-digit year-on-year growth. Order in flow and execution remain healthy across sectors like railways, motive power, and industrial UPS. Geopolitical tensions continue to impact exports business. We expect these uncertainties to remain for at least in the first half of this current year. We have been briefing you for the last couple of years on our new 1XI operating model, so a few comments on that. The company transformed from a strategic business unit-led model to a 1XI operating model in FY25. This was intended to recalibrate our go-to-market approach across business verticals. During the last year, FY26, this operating model has enabled the company to be more agile. As we enter the next fiscal year, the outlook for the lead asset business remains positive across most business vertical. However, we remain cautiously optimistic and will constantly watch and monitor the domestic demand situation in view of the expected inflationary economy, if at all. The company remains focused on tight cost control despite the global headwinds. I believe that Exide with its advanced product portfolio, Pan India Distribution Network and a strong brand recall will continue to benefit from growth opportunities. I will move on to our lithium-ion cell manufacturing project where we have invested 600 crores in Quarter 4 and about 1500 crores in FY26 in the full year. With this, the total equity investment made in Exide Energy, our subsidiary, till date, stands at 4,802 crores. Our cylindrical lines are expected to start customer sample delivery by around this month onwards, while the prismatic line will be initiating product trials shortly thereafter. Meanwhile, the company continues to engage with various OEMs of two-wheeler, three-wheeler, and four-wheeler and stationary energy providers. To build the off-tech across key and consumer markets. With this, I close my opening remarks. We will now be happy to take your questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and then 2. Participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants, you may press star and then 1 to ask a question. We will take the first question from the line of Vanessa, from Morgan Sandel. Please go ahead.

Hi, team. Thanks for the opportunity. In the opening remark, we talked about, you know, 8% of the business declining, which is telecom and exports. Fair to say that exports will be around 5% of top line in telecom, around 3%. Will that be the breakup?

Yes, Hinay, you are right in the ballpark.

And, you know, which leads me to my question.

3% would also include a bit of a rickshaw business.

Okay. Because that brings me to my next question here. When you look at next year on this core business, exports will have volatility for the first half but will recover. So then we should be actually quite set for a much better top-line growth than this year, next year, right?

Because I would like to believe the positive side is when the baseline is now low for these businesses, because we have declined. And next year, we see, we have a strategy in place, given if the, you know, global geopolitical tensions ease out a little bit. I see a substantial upside for the exports, because our main export markets are also in Western Europe and the US, where we were targeting as a strategy. So, exports was already 8% of our revenue a couple of years back. So, we came down to 5%. So, I think there is a good chance to increase our share of exports and, therefore, the incremental revenue.

And the overall top-line growth also next year should improve from this year, right? Because all the other businesses commentary that you gave was quite strong.

Yes, the exits have been quite strong. Q3, Q4 has been quite strong. And I personally believe that, and as you will recall, we were a little pulled down because of the Q2 washout when this GST announcement was made in the month of mid-August, and it was effective from 22nd September, if you recall. So that one and a half, two months, we almost had a washout because there was no off-take from our distribution network. So, other than Q2, I think all three quarters, we have been doing well and also riding on the demand wave. I would still believe that the core business at this situation has a potential to do at least a high single digit

to double digit growth.

Today, we are domestic, we are, even despite the telecom decline, domestic, we are 12.5% in the quarter. So I would like to believe that high single-to-double-digit growth for the overall core business is possible.

And, sir, secondly, on the new energy business, I think in the press release we had added that for Cylindrical, the trial runs have started. Prismatic will be few quarters down the line. So to that extent, is Prismatic also for this year only?

Yes, yes. Prismatic is the LFP line, and this is also scheduled for this year. The difference between cylindrical line and prismatic would be that, you know, the start of revenue will be quicker in LFP, because that product will not go through so much of validation and customer homologation, like the two-wheeler batteries in cylindrical. So, though the production of cylindrical will start first. But possibly, the revenue stream will come first from the prismatic lens.

And, sir, could you talk a little bit about the industrial side of the opportunity? Because globally, what we've seen is that that opportunity has surprised on the... Positive side and margins are also actually better. So when you talk about, when you think about data centers, ESS, in your view, the 6 gigawatt capacity allocation, what could be industrial share in that? How is the reception of clients on the industrial side?

See, Ben, you know we have two lines of LFP, about LFP prismatic, which is meant for industrial stationary storage applications. I mean, the designs, you know, every cell what we are going to manufacture will have multiple use cases. It could be both automotive as well as stationary. It depends on the form factor is prismatic in any case. So, the cell formats which we will be producing in line 3 and line 4, the prismatic lines, will also cater to the stationary storage use cases. You have heard, I have made in the opening commentary that the telecom is shifting towards... Lithium iron. E-Rickshaw is shifting towards lithium iron. And there are some other use cases shifting towards lithium iron. Now, in many cases, we are already present with our packed business. Only thing that we are doing it through imported cells. We will just reach over to our own made-in-India cells. That's the plan.

And, sir, just lastly on the commodity in all the...

I'll come back.

Thanks, Glenn. Thanks.

Thank you. We will take the next question from the line of Rupashankar NG from Evander's Park. Please go ahead.

Thank you for the opportunity. My first question will be on the commodity cost. I just wanted to get a sense around the extent of impact what we have seen in fourth quarter. And what sort of escalation is anticipated in the first quarter of FY27, considering the initial comments? And the continuation of the question is that what would be the extent of price hikes taken in the aftermarket and the expectation on further price hikes going ahead?

Thank you. Thank you for the question. So, first question on the commodity situation. Our impact on material cost for quarter 4 was... Roughly, net-net impact was 150 crores, I would say, a negative impact. So, it has come down by about, the gross margin, if you see, has come down by about 90 basis points. Though we have been able to maintain our, able to improve our EBITDA, but even if you see quarter-on-quarter movement, the gross margin has come down from, let's say, It was in Q3, it was 31.6, and in Q4, in the last quarter, it was 30.1. But despite that, we have been able to maintain our EBITDA sequentially at 11.7% because of our tight controls on the other cost elements. We have been very successful in controlling our factory costs as a percentage of cell employee cost. You will see that. And best part is we could be able to reduce the warranty cost as a percentage of sales. So these three, mostly these three elements have offset the increase in the commodity cost. So, therefore, we could offset the drop in gross margin through our internal controls. But as far as price hike is concerned, we have started, I think I have mentioned this in the past, that in Q3, we did not take a price rise consciously because GST, revised GST rates were announced, and we thought we will pass on the entire benefit to the end consumer. But from January onwards, we could not sustain the cost inflation of material. Therefore, we started taking price increases stage by stage. So January, 1st January, 1st March, 20th March, I think in three tranches we have taken increases which maybe amounts to about, let's say, about 5%, 5% to 6%, you know, varies on the segment. But across all segments in the trade, in the aftermarket, we have taken corrections. And even on 1st of April, we announced the last round. In April also, we took another round of correction. So we have been trying to, you know, pass on as much as possible of our commodity inflation. And that has also resulted in our resilience in quarter 4 March.

Have I left anything? Nothing. I think one follow-up is that what was the quantum of price I'd taken on April 1st as well? Can you share that?

It was around 3%.

All right. And do you anticipate further hikes coming in given that the commodity inflation has been quite sharp? So, just wondering, you know, given the competitive dynamics, what do you see for the pricing coming in to pass through this inflation?

See, I mean, right now it's difficult to comment, but the leading indicators, if you see the April exit prices of commodity, it is far more than March exit. Whether it's steel, whether it's sulfur, sulfuric acid, we are very, very badly hit. The March exit was 58 rupees per kg. And April exit is already 74 rupees. And just imagine one year back, it used to be only 15 rupees per kg. So, 15 to 75, 74, 75 is 5x. So, obviously, we will be watching it. And going forward, we will have to take the price. We have no other option.

Got it, sir. And with respect to OEM contracts, the escalation comes in with a lag. So, what would be the time period of that lag, and what will be covered? Is it only the lead asset piece which will be covered, right? So, the other aspects, are you negotiating with them to pass this on?

Yes, yes, you're right. The good news is that last year also, when we were going through this huge inflation, you know, non-lead inflation, I would say, non-lead inflation on commodities. We have been able to, you know, make our customers, OEMs, agree to a certain amount of price increases. We have been successful. We have given them evidences that how we are suffering, and some of them have been extremely logical, and they gave us price correction last year. So that helped us in the full-year performance as well as the quarter-four performance of auto OEM also. Having said that, we have again approached them. And everybody knows this. It's not a surprise that the way the commodities are growing, particularly the commodities which are essential for batteries, acids, plastics, LPGs, and, of course, currency hitting the lead prices. I think we are constantly in touch with the major OEMs. Some of them agreed, and some of them, the negotiations are on.

So the lead time is typically two months to three months. Is that the right metric?

I'll rather say it's a quarter.

Sure. Understood. That's it for my service. Thank you for answering my question.

Thank you. We will take the next question from the line of Siddharth Pera from Nomura. Please go ahead.

Yeah, thanks for the opportunity, sir. Sir, first question is on this lithium-ion business. We have invested close to 4,800 crores till now. How much investment do you see in the next one or two years going ahead in this business? And second is, I mean, when we have started the trials, when we sort of look at the commercial supplies, do you think the pricing will be at par with the imported or there can be some premium we can derive? And how should we think about the learning curve? Where are the yields? Do you expect that we may be in the normal sort of yield by quarter three when we start, Or that may take some time to settle down.

So, let me take the first part of the question, and then I will hand over to Praveen Saraf, who is on the call, to answer about pricing and yields. The first part is, Siddharth, we have already got a board approval, and this has been announced in the past, of investing 1,400 crore in the fiscal year 27, which is a mix of both CAPEX as well as the OPEX, working capital requirement, which we have to... So, that's the number for FY27. I think that should be sufficient for phase 1. We'll see how it works. Regarding our pricing strategy and yields, I'll request Praveen to take over. Praveen?

So I'll start with the reply to yield. So you're absolutely right. The yield is the most critical factor governing the cost of the cell manufacturing. And how we control and improve the yield is we must have good machines, 10 people who is operating the machines as well as having the process knowledge and good technology support. So you know that we have very good technology support. We have good machines already installed, which are very capable. But what yield will govern is only by experiencing. And we all learn that once we start 3-shift running and having continuous running, then the yield will improve. So it takes time, but definitely we will work towards it. It will be better to start the manufacturing. Then we'll be able to exactly predict how much time it takes. I can really assure that whatever required things and parameters control is, R is present. So once we start, we'll be able to quickly reach to... Thank you. What is the landed price today? So if you may be knowing, there is a change in the VAT structure in China. The WAC due to the WAC structure we already implemented, and by January next year, it will be additional 6%. Welcome to the call. Subsidities and incentives for the localization of raw material. Our target will be meeting the landed cost of the...

Thank you, Pravin.

Thank you.

I think the key will be to also the government has to also develop this industry locally. There has to be a value for making India sell, like I have been repeating quarter after quarter, that we are the first one, and making India sell has to have its learning curve, because otherwise nobody else will come up for investment like this, if they are not encouraged. So that's also our take. Thank you.

Thank you, sir. I'll come back in the view.

Thank you. We will take the next question from the line of Arvind Sharma from Citi. Please go ahead.

Hi, Raghuram, sir. Thank you for taking my question. On the lithium-ion business, have you seen any revenue commitment? Over the past few months, given the trials that supplies have started or are supposed to start. So, when should the companies actually start seeing revenue accrued from the lithium-ion business? And versus the plans, say, when you launched in 2022, I remember you had said around 27 to 30 months is the time it takes for operationalization. Where are you in that plan right now?

So, I think, let's, little, to bring clarity to the question. First one is, what is your status of revenue flow? That's simple. So far, we have been doing pack business, which is around, let's say, 100 to 100 crores of module and pack businesses, which we were doing to import itself. Now, we will be making sales. Now, Regarding start of cell revenue rate, I think I already mentioned in the previous question that in the first question itself that when is likely the revenue to start. And so it will probably start with the LSP prismatic line because that product does not need so much of approvals and things like that, that use case. But as a start of production, the NMC cylindrical line will be first, which is, and we have not started supplies of cells, just to correct you. We have completed our process validation. The sample supplies will start possibly this month, end of this month, or next month. Pravin, would you like to add on this?

Yes, so we, our internal validations for the cylindrical cells have been completed, and we will be able to give the cell to our customers in this month. Of course, as you all know that the custom validation will take time, because there is obligation as well as their internal ties at the cell as well as at the pack levels. And for the prismatic trial, we are, right now we are running the trials for the making the customer samples. We are targeting by June and July, we can say, we want to give the samples for customer evaluation.

Yes, sir. So, it will still be some time before there is any significant revenue recognition from the cell plant.

See, this will be a material disclosure for us. So, be assured that we will let you know much in advance our start date officially.

Sure, sir. Thank you. Sir, second question on the core business, the legacy business. Will it be possible to share the proportion of autos and non-autos?

I think this we have shared many times in the past, auto and non-auto is almost half-half, roughly, or maybe 53, 47, kind of. Auto is, OEM and aftermarket put together is about 50%. And the ratio between auto replacement and non-auto, as you know, is standard, is 70-30.

Thank you so much. That's all from my face. Thank you.

Thank you. Before we take the next question, a reminder to all the participants, you may press star and then one to ask a question. We will take the next question from the line of Vijay Pandey from Access Capital. Please go ahead.

Hi, sir. Thank you for taking my questions. I have a couple of questions. I wanted to check in terms of the economic commodity inflation. How much impact are you seeing currently? Absolutely.

You have to repeat your question. I'm afraid you are not very clear. Can you say that again?

Is it okay now? Am I audible?

Better, better.

So, sir, I want to check in terms of commodity inflation.

Sorry to interrupt in between. Vijay, could you please use the handset mode and speak?

Yeah, there are some background noises coming in.

Is it okay now?

Yes, please.

Yeah, I wanted to check the commodity inflation of sector oil. Fourth quarter and the first quarter till date. So, what is the level of price increase you have seen?

This question we just answered a little back, I think, to Vinay Singh. If you read the transcripts, I think we have mentioned it already.

No, no. Sir, I'm not looking at the price height, the inflation, the dormitory.

Yes, yes. We have mentioned that as well.

We have mentioned that as well.

Exactly what was the impact on the material rate impact you have mentioned.

Okay.

Yeah.

Okay. And secondly, sir, Thank you. The Prismatic sales, so that validation will take a customer validation, will it take around, should we expect around three months or is it longer than two months?

See, Prismatic sales, what we are making is primarily for three-wheelers and some stationary applications. For these applications, basically, these are either through trade channels or to institutional customers, where we are... We do not have that kind of a homologation process like an auto OEM runs. So, therefore, the time to market will be and the time for revenue will be quicker than auto OEM.

And for the electrical sense, it will be around three months.

I mean, it depends on the customer because it depends on how much mileage the vehicle will run. Or they want to run. So, but, yeah, around that ballpark, I think, Praveen? Yes, yes, two to three months, yes.

But, of course, depends on customer again. So, we are also discussing with them, but depends on that. Yeah.

Okay.

Sorry to interrupt in between, Vijay. I would request you to kindly rejoin the queue again for more questions. Thank you. We will take the next question from the line of Aditya Chawar from Investec Capital Services. Please go ahead.

Yeah, thank you for the opportunity. Sir, I think this commodity question is, you know, is quite important in the current context. If you can refresh, you know, that if you look at our bill of material, what are the ballpark big commodity, you know, in terms of percentage exposure that we have, you know, the top three, four commodities, whether it is lead, you know, polymer, how much percentage of corks it represents, and for specific commodity, if you can talk about that, what is the near-term outlook that you're looking at?

Okay, so let's see how much we can give you. I'll give you both quarter-on-quarter and year-on-year rises.

First, I would recommend that for FI 26 on a full-year basis, what is the breakup of our bill of material in terms of exposure to key big commodities?

I think, Aditya, perhaps this is a little not in public domain. All I can say is that our key components is lead, acid, and plastic. Okay. Mainly, our bill of material items. This covers about 95-96%. Lead as an index has been softer year on year. But, you know, in India, lead is sold, even recycled leads and pure leads are sold on import parity prices. Because the currency has softened by about 10%, the reduction in LME has been over-fosseted by the dollar-rupee depreciation. Okay, so we did not get a net-net benefit on lead also. So, regarding plastics, because we use polypropylene containers, this was directly hit in the Q4. Q1 to Q3 was pretty stable. But Q4, we got a hit because of shortage of crude, which is coming to India. Sulfuric acid, I mean, this for the first time, we used to buy sulfuric acid for 15 rupees, as I said, one year back. Sulfur is a byproduct of the petrochemical refinery plants, right? And since the petrochemical plants refiners are operating at a lower capacity utilization. Because of crude shortage, even the generation of sulfur has also come down. And therefore, just to run the business, sulfuric acid costs have gone to 75 rupees April exit, compared to 15 rupees in the beginning of the year.

I mean, what I'm trying to understand, clearly, I think lead prices not going up is also a better situation for us in INR terms. And lead might represent more than 50-60% of cost, and even the polymer prices would be the remaining 20-30%. So what I'm trying to understand that, yes, sulfur has seen a big spike, but is it that it is less than 10% of bomb?

See, I mean, we have to go into details. There are other alloys which also come in play based on seasonal demand. Are you looking for Q1 outlook or kind of a picture of Q1 or last quarter 4?

No, so I mean the outlook. I mean, if you look at on a blended basis, depending upon how much exposure we have, because now the street is worried about, you know, the commodity inflation. Now, looking and our exposure is significantly different to commodities as compared to OEM. So, we are just trying to understand from FI27 perspective, what should we think about commodity inflation and how much price increase would be required to offset that?

So, the short answer is this, that this year, at least quarter on quarter, we will pass through the non-late price increases to the customers. The lead will be governed by the formulas that we have with at least the OEMs and industrial customers, but otherwise, everything we will try to take price correction because at this moment, we believe that our sourcing efficiency is at its best just for business continuity itself. So, we have been successful in passing on in both, as I said, January, February, March, April, four months consecutively, we could be able to take price corrections from the market. If I do not know the situation of rupee, this is a rupee to dollar is a kind of uncertainty, but if it stays at this level, then probably even if LME goes down, we will not get benefited rupee terms. Just for your information, Aditya, that till March, though LME was softer, but in April, LME has again shot up to 1950. So, it's really volatile. We are navigating through, you know, calibrated price increase from the market. Yeah. Sure. Thank you, sir.

Thank you. We will take the next question from the line of Sriram from MLP. Please go ahead. Hi, sir.

Am I audible?

Yes, please.

Yeah. Sir, if you can just help us understand that within the acid consumption, is it only sulfuric acid or are there other type of acid also that we use?

No, it's sulfuric acid.

Okay, that's it. That's the only question I had. Thank you so much.

Thank you. We will take the next question from the line of Vilain Samir Deshpande from Alpha Peak Investments. Please go ahead.

Hello, sir. Good afternoon.

Good afternoon.

The results have been quite decent in the current scenario, and our dominance in the market share is really helping us getting good results. And another important thing, to become the first company in India to make these lithium-ion batteries will be a good figure in the cap. But as you rightly said, is the government likely to be significantly supportive? To the company, with these benefits or incentives like PLI or any other incentives, because otherwise, the imports are going to hurt with the rupee depreciation. So, what is the status on that?

So, imports are going to be expensive, that's what you meant. Yes. Precisely, there are two parts of it. One is... Of course, government has to develop this industry and, you know, give a value for or give attention to a make-in-India cell. And believe me, when I say cell manufacturing, it's electrode manufacturing. It's not importing complete electrodes and just assembling it as a cell and then supplying. So if government wants us to really integrate backward in manufacturing, manufacturing our own electrodes, Sourcing our own anode and cathode material from the country. They have to support the industry, and that will happen eventually. Otherwise, investments will not come. Not only in the cell manufacturing, but also in the supply chain. There is a second angle to it. The second angle is the comfort of the OEMs. Now, how long do you think a large OEM like, let's say, the top two names, Maruti, Tata, Mahindra of this world, will depend on completely imported batteries from China for their vehicle? The OEM runs on one-day inventory. That is how their supply chain runs. And here, you know, investing in three months inventory of imported material. So their operational sequence, their total supply chain management also, you know, improves for Make in India sourcing. So I am sure there are scales, once there are players like us, even the OEMs would also like to have localized supplies. We have seen those trends already in some cases, because they, of course, they want to have at least two sources, even if not, even if they don't want to disrupt their import. They will like to have an alternative source because otherwise it is too expensive and too volatile, too big an exposure to depend on imported complete batteries from China on a long term. So, yes, we are looking forward that both the government as well as the auto OEMs will be driving this market, which will encourage more people to come in.

I think definitely with the Atmanarbar policies of the government and the current situation in the Gulf, which is always exposing the country. To these huge risks, because if there are no imports possible, then the things really can come to a standstill and hit India in a big way. So, definitely the government support will come. And I hope with these big investments, we have made around 5,000 pros to date. And I think in this year also, we are likely to invest about 1,000 pros, you mentioned.

1,400.

So, it will be about 6,000. About 6,500 or crores will be to total investment. And when we sold our life insurance business, we got approximately the similar amount, I think, in terms of the shares of HDFC life.

Yeah, roughly that amount.

So, we are currently in the investments, in the balance sheet, now non-current investments have fallen by about 850 crores. So, have we sold some part of the shares of HGFC Live during the year?

No, no. I will hand over to Manoj Agarwal, our CFO, to answer this question. Okay.

Really, because of the mark-to-mark of valuation

of the shares, we have not sold any shares as of date.

Okay. So, the mark-to-market valuation has come now to about 850 odd crores.

Yes, that is very much much. Yeah.

And that the second effect has been given to the resource or what? It went through OCI, we went through OCI, so it is coming as a network, not a clear account. Okay, okay, okay.

So, I would request you to please rejoin the queue again for more questions.

Okay, thank you and all the best. Thank you.

Thank you. We will take the next question from the line of Suraj Cheda from Bandhan ANC. Please go ahead.

Yeah, hi, sir. A couple of questions. First on the led...

Sorry to interrupt in between, Suraj, you are not audible. Please use the handset mode.

Yeah, is it better now?

No, you are not audible.

Hello, is it better now?

Yes, please proceed.

Yeah, so a couple of questions from my side. First, on the core lead asset battery business, in the earlier comments, during the call, you mentioned that you were expecting high single-digit growth to early double-digit growth. This you mentioned with respect to FI27, or do you think over the next three to four years, that should be the medium-term area for your business?

I think even in medium-term CAGR, it should be. Last five years also, if you see, the five-year CAGR was 11%. And I don't see any reason for the next five-year CAGR to be different from that, plus-minus few percentage, 1% maybe. Because clearly, if you look at the OEM business today, Which is for at least consecutive two quarters as well as Q1 outlook of this year. The automotive OEM business is growing by, you know, 20% plus, 25% plus. These are all going to get reflected in aftermarket after two years.

Understood. Okay. And what is the UPS revenue mix for you right now in FI26?

The UPS revenue would be... Just a minute. It would be more than 2,000 crores, around 2,300 crores.

Okay, and telecom, you mentioned, is maybe around 2-3% of your revenues right now.

Yes, yes.

Okay, thanks. And second question was with respect to your first phase one of, you know, 6 gigahertz capacity for lithium and cell manufacturing. How do you see this capacity being allocated between, say, automotives and maybe stationary application or telecom or BES segment? Any plan you are having over the next one, two years?

I'll request Praveen to take this.

Yes, sir. Thank you. So, the 6 gigawatt, we have two chemistries. I think it's a good thing that because of two chemistries, we can able to cater the various applications. So, we have cylindrical and prismatic. So, our capacity is divided cylindrical in 3 and prismatic in 3 gigawatt. So, as you know, cylindrical today's application is two-wheeler. And in Rizmatic, we have applications like Co-Wheeler, Buses, and... The stationery, like telecom sector as well as BSS.

And for this 3 GWh prismatic one, this will also cover your tie-up with the Hyundai Ikea, which you announced, right?

No, no, that's a little different. This will not have an impact on the Hyundai.

Okay, okay. So, that will be part of your case.

So, to interrupt then between Suraj, I would request you to please rejoin the queue again.

Sure, sure. It's a follow-up on that. Just last question on this.

Thank you. We will take the next question from the line of Karan Kokhni from Tata AIA Life Insurance. Please go ahead.

Yes, sir. Thanks for the opportunity. So, I just had a clarificatory question. So, if I heard right, you said that sulfuric acid prices have gone up from 15 rupees per kg to 75 rupees per kg.

It's a sulfur price, not sulfuric. Sulfur price.

Okay, sorry. So, sulfur prices have gone up from 15 rupees per kg to 75 rupees per kg. You said this has happened since the start of the year. So, this is since Jan or this is since April?

No, this is for one year. Gradual increase. Gradual increase, quarter on quarter. The baseline is Q1 of 25. Four quarters. Okay, for the last one year? Selling four quarters, yes.

Okay, and on a sequential basis, what will be the jump?

Sequential basis, in Q4, sulfur was plus 40% and sulfuric acid is... Year-on-year, sorry, quarter-on-quarter sequential basis will be about 20%. April exit is higher than March exit by a lot.

Yeah. Okay, and this increase in price, does it get reflected in the same quarter or will it get reflected in the upcoming quarter?

More or less same quarter. That's why, if you recall, I just said that from 1st of April itself, we took the price height. And because we did not wait. Normally, ACID and others impact immediately. So, that's why first we announced on 1st of April. Actually, we took on 20th of March one round. If you check your channels, you will know. We, 20th of March, we announced, and then 1st of April, back to back, after 10 days, we announced. And now, we again, if ongoing in May and June, you will also hear some announcements.

Okay. You got it. That's it for me. Thanks a lot. Yeah. Thank you.

Thank you. We will take the next question from the line of Deepak Ajnera from IT India. Please go ahead.

Yeah. Hi. Thanks for the opportunity. We would like to understand your thought process that you have invested 5,000 codes.

So, sir, at the moment, we are completely focused on ramping up the production, as Praveen Thank you. We do not know what will be the level of commodity prices when we actually serialize our production. Today, lithium has again gone up by double digit in the last couple of months due to various supply-demand constraints. So, it's not proper for me to do a math based on assumptions on commodity prices because all those things will depend on that. What is good is that the customer has realized that lithium is also volatile. Today, last one year, lithium was dropping because there was high overcapacity in China. Today, if you look at last two, three months, the situation is reversed. Because of this West Asia crisis, because of crude shortages, the production of electric vehicle and electric vehicle batteries in China has shot up. Everybody has, you know, loaded their factories because primary fossil fuel is in crisis at this moment. So, this has led into a, you know, demand side boom locally and therefore the prices are going up. So, people also understand that lithium prices is not exactly predictable because this type of volatility will happen going forward. Good morning, everyone. China, suddenly the government has come up with a policy that, you know, you can't bleed anymore. The EV manufacturer cannot make losses anymore. They have to be profitable. So they are forced to raise prices. That's why Pravil told you that they have withdrawn a lot of VAT benefits and export benefits. So this is the environment of lithium. So I have a feeling that... We will have a much better case than last year when we start production because prices will stabilize, number one. Number two is the prices are also indexed to a great extent so that the risk is also a pass-through, like lead. And third is, as I said, the OEMs will definitely take a deeper look of developing local supply chain for sales and packs. So I think with this, we'll have a much stronger case. But the time to announce that has not come. Let us ramp up our plant. Let us operate at 85% utilization with 90% yield. And that will be the time when I'll come back and reply to this question. Please have in mind we are the first one in the country to manufacture cells with this kind of scale. Yeah?

Yeah, yeah, yeah. The second question is, while you are discussing on the policy framework on the self-manufacturing, localization, what is their feedback? What they are exactly waiting for?

I mean, you also have to have sufficient capacity locally to, you know, announce a policy for MEC in India. So, unless there is, I would like to believe, unless there is about 20-25 gigawatt of capacity in India, or let's say 20 gigawatt, that is a minimum base where we will get a lot of support from the government. Thank you. The whole EV market in automotive, the EV market in India is also 20 gigawatt hour. So to have that, just to have that in mind as scale, so once we have two, three players coming up with 15, 20 gigawatt hour, I think we'll have substantial scale for the government to intervene and, you know, take some policy changes.

Thank you very much.

Thank you. We will take the next question from the line of Sagar Parekh from Renaissance Investment. Please go ahead.

Yeah, hi. Am I audible? Yes, please.

Yeah, so just, I was confused, actually, you said 6 gigawatt, 3 is in NMC and 3 is in LFP cylindrical, NMC cylindrical, 3 in LFP, this thing. But, and then you said Hyundai is separate, so what exactly?

So, with Hyundai, we have a separate contract, where there is a co-investment. So, we are delinking it with our own internal investment. So that will be an incremental capacity over 6 gigawatt when we commission that. Oh, so that is not a part of that thing. So when will that be commissioned?

And that is not a part of that 4800 close also. 4800 close that we have invested, we have not...

No, no, no. So that will make a disclosure when the time comes, maybe soon. Yeah. But it is not a part of FI27. I'm not commenting on that. This is still not in public. Could be, but I'm not commenting on this, because this is a material disclosure. Not good.

Thank you very much. Ladies and gentlemen, we will take care of the last question for today. And with that concludes the question and answer session. I now have the conference back to the management for closing comments.

Thank you, everybody, for the extremely engaging questions. We have been pretty… Confident of the quarter coming by because last consecutive two quarters was pretty satisfying, particularly after a week, quarter two. I think we have been able to deliver a growth which normally is in line with the expectation, both in top line and bottom line. And our April having gone, I think we also have a similar view on quarter one of this year as well. I hope you have been able to answer all your questions satisfactorily. If you have any further questions, I mean, we would be very happy to be of assistance. Kindly reach out to us. Thank you. Over to the moderator.

Thank you, members of the management. On behalf of Investec Capital Services, that concludes this conversation. Thank you all for joining with us today, and you may now disconnect your line.