Gujarat Fluorochemicals Limited (FLUOROCHEM) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Gujarat Plurochemicals Limited Q2 and H1FI 27 Oarnings Call, hosted by Jam Capital Advisors. As a reminder, all participant lines will be in the lesson only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference to Mr. Karan Talwar from Dam Capital Advisors. Thank you, Vanu, with you.

Thank you, Ikra. Good evening, everyone, and welcome to the Q2 and H1FI27 post-results earnings call of Gujarat Floral Chemicals Limited. On behalf of Dam Capital Advisors, we thank the management for providing us with this opportunity. Today, from the management, we have with us Dr. Bir Kapoor, the Deputy Managing Director and CEO of Gujarat Florochemicals, and along with him, the other senior members of the management team. I would like to hand with a call to Dr. Bir Kapoor for his opening the mark, post which we can open the floor for Q&A. Thanks, and over to you, sir.

Thank you, Karan, and good afternoon, ladies and gentlemen. I welcome you all to Gujarat Fluorochemical Limited's Water II and H1FI27 Earnings Conference Call. For this call, I have with me my colleagues, Mr. Akhil Jindal, who is Group CFO, Mr. Manoj Agrawal, CFO of GFL, Mr. Kapil Malhotra, Business Head of Fluoropolymers, and Mr. Ajeeb Rao, who is the Business Head of our Battery Materials. Thank you for taking the time to join us today. I hope you had an opportunity to review our financial results and investors' presentation, which are available on the stock exchanges and on our company's website. Let me begin by briefly touching upon the broader global environment. The world continued to navigate to multiple uncertainties, ranging from the ongoing conflict in Europe and developments in the Gulf region to evolving trade policies, tariff, volatility in financial and bond markets, and climate-related uncertainties. Such developments have become an increasingly familiar part of the global operating environment, requiring businesses and economies to continuously adapt. Amid these challenges, it is encouraging to see how India has demonstrated remarkable resilience. Despite unprecedented external shocks and geopolitical uncertainties, the country has maintained its growth momentum, supported by strong domestic fundamentals, robust demand, and a resilient economic framework. India's ability to navigate this complex global environment while remaining firmly on its growth trajectory is particularly encouraging. Against this backdrop, at GFL, we remain firmly focused on strengthening our position as a globally integrated fluorine chemistry and advanced materials company. Our strategy continues to be anchored around three key pillars, strengthening our core fluoropolymers business, expanding our fluorochemicals portfolio, and building a scalable advanced battery materials platform as a future growth engine. During the quarter, we continued to make progress across all three strategic priorities. Our efforts remained focused on expanding manufacturing capacities, strengthening technology, and product development, enhancing backward integration, and progressing customer qualification across our businesses. Let me touch upon chemical business first. Chemical segment revenue increased 42% year-on-year to 1,723 crores, reflecting a healthy demand across the fluoropolymers and fluorochemicals portfolio. EBITDA grew 33% year-on-year to 505 crores, with sequential growth of 10%, demonstrating sustained operating momentum. So, chemical segment SPAT increased 46% year-on-year to 290 crores, outpacing revenue and EBITDA growth with increase on consolidated basis. Our quarter to FY27 revenue stood at 1,760 crores, registering a growth of 45% year-on-year and 11% quarter-on-quarter, and EBITDA for the quarter stood at 473 crores, registering a growth of 32% year-on-year and 11% quarter-on-quarter. The EBITDA margin for the quarter was steady and stood at 27%. The margin reflected the resilience of our operating performance despite the evolving market environment. Profit hour tax after tax for quarter to FY27 stood at 240 crore, representing a growth of 42% year-on-year and 10% quarter-on-quarter. Coming to the segment-wise performance, our fluoropolymers business continued to deliver healthy growth, while fluorochemicals witnessed a particularly strong performance during the quarter. Coming to our fluoropolymers business, revenue for quarter to FY27 stood at 931 crore, registering a growth of 22% year-on-year, compared with 764 crore in quarter to FY26. On a sequential basis, revenue grew by 2% from 914 crore in quarter one FY27. As indicated in our previous interactions, we have guided for an annual growth of 17% to 20% in our fluoropolymers business. We are pleased to have delivered 22% year-on-year growth this quarter, and we remain confident of sustaining this growth trajectory going forward. We continue to see healthy demand across several application segments, particularly in high-performance and specialty applications such as FKM in automotive sector and PFA and modified PTFE in semiconductors and data centers. Our strategy remained focused on moving towards higher value products and speciality grades, which are finding increasing applications across semiconductor manufacturing, electric mobility, electronics, chemical processing, renewable energy, data centers, and other advanced industrial applications. During the quarter, our focus remained on capacity de-bottlenecking, with plans to undertake additional growth capex over the next one year. We also continued to focus on improving our product mix, enhancing operating efficiencies, and progressing with customer approvals for newer grades. Moving to our fluorochemicals business, revenue for the quarter stood at 607 crores, registering a growth of 135% year-on-year, compared with 258 crores in quarter to FY26. On a sequential basis, revenue increased by 33% from 458 crores in quarter one FY27, We are seeing healthy demand visibility for R32, supported by the increasing adoption of R32-based air conditioning systems across major markets, Particularly as the industry transitions towards refrigerants with lower global warming potentials. Refrigerant demand and pricing remain stable in near term, providing a supportive operating environment. Our R134A project is progressing as a part of our strategy to expand and diversify our refrigerant portfolio and is expected to commence production by quarter 4 FY27. The addition of R134A will further strengthen our presence in the refrigerant market and provide access to additional customer segments and applications. We remain focused on building a comprehensive refrigerant portfolio, including R22, R32, R125, R410, and R134A, while utilizing our manufacturing capabilities and regulatory entitlements effectively. Our bulk chemical portfolio reported a revenue of 151 crore in Q2 FY27 compared with 158 crore in Q2 FY26, representing a decline of 5% year on year. On a sequential basis, revenue declined by 8% from 164 crore in Q1 FY26. Thank you. Supported by the growth of electric mobility, energy storage systems, and the increasing localization and diversification of battery supply chains. Our objective is to establish an integrated battery materials platform, leveraging our core strengths in fluorine chemistry, manufacturing capabilities, process technology, and backward integration. LIPS 6 sales is ramping up well. With sales to five major global eco-like players, production is being progressively ramped up along with new plants being added to meet strong customer demands backed by multi-year order visibility. CAM material, LFP, plant samples are progressing through customer qualification programs globally, including India. We are now progressing towards development of higher-end LFP grades. In view of the strong emerging global market demand, further substantial capacity expansions is underway. Multiple PBDF and PTFE grades are at advanced stages of customer qualifications across both wet and next-generation dry electrode applications. Customer engagement remains strong, particularly in the U.S. and Europe. With customer qualification programs progressing, commercial supplies under long-term supply agreements are now expected to commence from Q4 to FY27. Electrolyte engagement continues to progress well with domestic cell manufacture across EV and BES applications. Customer-specific formulations are being developed and supplied from our commercial plant for evaluation and qualification. We expect domestic electrolyte demand to pick up towards the end of next financial year. As discussed in our previous interactions, the battery material business is transitioning from the development and qualification stage towards commercialization. The business has a significant growth opportunity over the medium to long term. However, the praise of ramp-up will be linked to the customer qualification timelines, commercial approvals, and capacity ramp-up. We believe our integrated fluorine chemistry capabilities, diversified product portfolio, and investments in emerging growth areas position us well for sustainable growth. The investments undertaken over the past few years are aimed at creating additional growth engines for the company. With this, I would like to conclude my opening remarks and open the floor for questions. Thank you once again for your continued interest and confidence in Gujarat's Chlorochemicals Limited. I will now hand over the call to the moderator to begin the question and answer session. Thank you.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ketan Gandhi from Gandhi Securities. Please go ahead.

Hi, sir. There is two questions. One is how adoption of dry process for cathode using PTFE is happening in the world, and what is your view on likely positive impact on our sales on PTFE?

Thank you. Thanks for asking the question. The dry electrode has been one of the holy wheels, and various companies are trying to develop it. Some of them have progressed well. Of course, it's at the advanced stage of commercialization. Thank you. Battery manufacturers move towards the dry electrode systems. The demand for PTFE will continue to pick up. They're very optimistic about this to happen very soon, because this has several advantages from the manufacturing perspective, because there's no solvent evaporation, no solvent recovery, and it's environmentally a very positive step. Sure.

You're seeing a lot of traction, right, sir, in the world?

Because there is research is going on, but there is one or two who are very close to commercialization.

And question on our plant coming up at Jani Adhra, I mean, electronic chemical. Do you want to share at this moment something regarding WF6, C4F6, NF3, F2N2 and PFPE? What are the assets, I mean, what are the capex, likely capex, asset ton and margin? You don't want to share it at this moment?

We haven't mentioned any of the chemicals that you mentioned, but let me tell you, we'll probably share it in the next few quarters, because it's a very early stage of discussion and conceptualization, and obviously, you must have read it in the news, there's a very strong focus from the government to promote this particular sector. So, we believe it's a very strong area to play in, and particularly with our expertise in fluorochemicals and fluoromaterials, there are several opportunities, and we will share it in due course of time. I cannot mention the product or the capexes at this point of time.

Sure, no issue. But this sector looks very exciting, sir, because only a handful of players are doing this. If India, if we are doing, then it will be great, it's good for the company as well as good for the country. Indeed. All the best, sir.

Indeed, we agree. Thank you. Thank you, sir.

Next question is from the line of Sanjay Jain from ICICI Securities. Please go ahead.

Yeah, good evening, sir. Thanks for taking my questions. I got a few of them. First on the fluoropolymer, if I see the export data, it appears that there is a sharp increase in the realization And probably partly the 20% revenue growth, what we have achieved is also because of this. Can you help us understand what is the volume and value growth and how is the mix changing from PTFE to new fluoropolymer? So on a blended basis, how is the business moving? And this 20% growth, is it sustainable for next two to three years or we are more looking at this year only?

Thanks, Sanjish. I'll request Kapil to take this question.

Hi, Sanjish. Good afternoon.

Hi, Kapil.

Good afternoon. Thanks. Thanks for your question. So, yeah, whatever growth of 22% we have seen from the last year to this corresponding year, it's growth of the volume also, and also if you remember, you know, I've been also saying that The conversion towards the, you know, advanced applications with a higher, you know, value, that has also started happening now. The last one or two quarters it has started happening, and it is, you know, pace is also now developing faster. You know, every subsequent quarter we are seeing that the high value addition application where we got the approvals are contributing every quarter. So, that's why you see that one of the reasons of the higher value is also due to the higher volume, not also due to the higher volume, but also the higher value which we have achieved for some of the applications which we have been always talking about.

And this growth momentum, Kapil, do you think we can sustain for next few years?

Yes, Sanjesh, we are absolutely positive on this. We feel the kind of traction which we are getting from the segments like EV, semiconductor, data centers, and probably green hydrogen will follow soon. We feel that the growth momentum which we have been advocating will continue for the next couple of years.

That's helpful. Second, on the refrigerant gas, B. Sir, you mentioned in your opening remark that we are ahead to reach the peak utilization in 32. Can you help us understand in this quarter what was the utilization rate and when are we anticipating to hit the peak utilization in the R32? And some timeline on R134A production will also be helpful.

All I can tell you, Sanjay, is that in this quarter, the quarter going on will globally reach the full utilization of what we had planned initially. But having said that, you know, we haven't really stated the capacities yet, but the initial phase of capacity that we had planned in R32 will get fully utilized by the end of this quarter, which is quarter three. Okay. Now, coming back to 134A, I think I mentioned that, that by quarter four of this financial year, we'll commence. And we are on track on that. Yes, we are.

One on the battery chemical side for the Rajiv. Now, LIPF 6, we have mentioned in our presentation that we have started supplying to the 5 customer, And we are also expanding the capacity. How should we see progression here in LIPF6 and probably PVDF, PTFE, which is the first set of revenues we are looking to book from the battery side? How should we see the progress? We expected a second half to be much stronger. Can you help us understand in the magnitude how big are we looking at in terms of second half being for us?

Rajiv is on the call. Rajiv, can I answer this question?

Yes, sir. Please go ahead.

So, the way it's happening is that by quarter one next financial year, okay, whatever the capacities and what we have planned and solved, we'll see the impact of that, okay, next two to three quarters. Now you will see the ramp up is happening very rapidly. Because, as I said, that it's happening because of two things. As the qualification, the order pipeline is very strong for us. And as we are ramping up the capacity of the existing LIPS6 plant, plus we are adding more plants. Okay. So, I think we'll see the full utilization of this more or less by quarter one next year. So, maybe three quarters from now, including this quarter.

We are saying the expanded capacity, we will run full utilization. Is that the right understanding?

That's what it looks like at the moment, yes. Yes.

And LIPF-6 prices in China have significantly now come down in the last one month from 1,500,000 yen to now almost 100,000. Will that have any implication on our pricing formula with the customer?

The thing is, this has to be looked in context of the lithium price as well. So, we need to look at the adder, where the adder is moving. So, it's all raw material, like deflation is supported. Correct. So, if you look at it very closely, it has a lot to do with the lithium, because lithium is, what LIPS6 is dropping as a result of the lithium pricing fallout, and in most of our cases, it's passed through. So, overall, the margin remains protected, Sanjeev.

Got it, got it. One last one from my side. LFP, we have mentioned in the presentation that we are looking to expand capacity significantly. Is the effort on or we will wait for the final approval and then only expand the capacity? How should we see the timeline for it?

No, we are already, in fact, if you recall last call, I had mentioned that we are planning to set up the large capacity in Oman, which at the moment we are put in hold. So instead, we are shifting most of those capacities to India. So that we are starting, I mean, this project is going on at full swing right now. There's no hold. We have, because we have a very good traction. The current capacity that we have, Sanjesh, is very small. This is the capacity which is essentially to get our hands wet, to get, to learn, and a lot of it is also to develop grades and products which we'll send for qualifications. So we are utilizing this capacity as of now for various great developments, and a significant capacity will come up by towards quarter three of next financial year, toward the end of next year. And we are going forward. We also have, you know, quite a few equipments have already reached the site, so we are progressing

That's clear, sir. Thanks for answering all the questions, and best of luck for the coming quarter, and happy Diwali for everybody.

Thank you. Thank you, Sanjeev. Happy Diwali to you as well. Thank you.

Thank you. Next question is from the line of Ankur Perival from Access Capital. Please go ahead.

Yeah, hi, sir. Good evening. Thanks for the opportunity, and congratulations on a good set of numbers. First question on the KPEX. So we had guided for around, you know, 3,000 plus crore KPEX for this full year, 527. Largely on the battery side and plus around 800 crore for the core standalone business. And going by their comments that, you know, there could be further expansion in terms of, you know, new KPEX getting announced across solar volumes and other segments. How should one look at this number, one more from, you know, timelines and execution for the existing 3,000 knot crore capex? And going ahead, how should we build that number playing out across the battery and the non-battery segments?

So let's talk about the non-battery segment first. We had indicated on, by the way, this included the investment in fluoropolymers. Okay, so chloropolymer investments are not a separate investment. It's already part of that. Okay, so that 800 crore capex is progressing well as per the plan. Okay, we are almost reaching the half point now. Back to battery materials. Battery materials were indicated around 2100 crores. Right now, we are slightly behind on that, but that is because we, that CapEx was planned looking at that execution of Oman project with certain timeline. Unfortunately, because of putting the project on hold and bringing some of that capacity to India, there has been a delay of quarter, quarter and a half. So the plan of 2100 is on, but it will not happen completely in this financial year. Okay. So this financial, because It will probably go, push out, I would say, by a quarter and a half or so. But, and the project that I mentioned about LFP adding substantial capacity is the same. It's part of the 2100 that we had. Sure. So, we are still targeting what we had indicated earlier on battery materials, which is investment of 6,000 crores. So, it's part of that. And we'll continue to do that. So, 2,100 crore this year probably will spill over to 2 quarter and a half. And then, obviously, the remaining part of the capex out of that pool will go into FY28.

Sure. And 800 crores on fluoropolymers should be executing within the financial year?

800 is part of the entire GFL capex. Yeah. Including fluoropolymers. And fluoropolymers, in fact, I had said earlier also, So in fluoropolymer, we have significant capacities of monomer available. So now the capacity is being added is through adding polymerization capacity, which is reactors. And that is already on as we speak.

Sure, sir. Second bit on the fluoropolymers, wherein, you know, we are seeing a good sort of traction across, you mentioned both volume and pricing. So, from a current gross block perspective, what could be the peak revenue now from fluoropolymers, given the higher realizations that we are seeing? And secondly, you know, are we seeing any traction in terms of new client additions or new geographies getting added? Where is the demand uptake coming from?

Sir, Ankur, the thing is that it's an ongoing process, okay? We will not wait for the CapEx investment to peak out and then plan, because we have already indicated and promised that we will achieve growth of 17% to 20%. So typically based on – so our CapExs are planned according to that. Okay. Sure. Keep that result. And as Kapil indicated, there's a strong traction from the market. So as we see capacity getting utilized, and as I said earlier, that monomers are already in place. So adding reactors or polymerization capacity is relatively short. Okay. It's a downstream. It's a short cycle, eight months, eight to ten months at the most. So, we will keep on adding capexes and continue to add capexes in terms of products and trying to optimize the product mix to achieve that 17% to 20%. That's, I think, is probably – if you have taken a model, you can take that growth and capexes would fall.

Sure, sir. That's helpful. Thank you and all the best and wishing you all a very happy Diwali. Thank you. Thank you.

Wishing you a happy Diwali as well. Thanks. Thank you.

Thank you. Next question is from the line of Archer Joshi from Awamah. Please go ahead.

Hi, very good evening, sir, and thanks to the entire team. Firstly, sir, just touching upon the CapEx once again, as I can see from the presentation, we have planned out for almost 4,000 crores, including the 2,100 crores for this year. I just wanted to get a sense of what all is getting covered in this. We know for sure that electrolyte salts, there's a small electrolyte capacity and the existing expansion of LSP. Is there anything beyond this and will it be fair to assume that by no simple subtraction, 2,000 odd crores is the balance capex left, would that be entirely dedicated towards anode? Wherein I believe we haven't done much progress on the construction activity. If you can clarify that.

No, it will not be entirely on a note because I think some time last call, we had also mentioned very clearly that we had certain CapEx's plan for electrolytes and salts. And India market has been behind, you know, in terms of its progress. The battery plant that was announced in India have been behind, and a lot of electrolyte and salt catering to that will come now, which will probably come in the next financial year going forward, depending upon how the market situation improves. So, it's not entirely on anode, okay, and so, still, there is more investment to come in salt and electrolytes going forward.

Got it, sir. When do we expect the start of the anode plant and any timelines around that?

One more point to add, of course, is that there will be some capex that we had allocated for backward integration as well, and that will come as well. Once our downstream product capacity is up and stream and utilized, some of the capexes will go into the backward integration.

Got it. Sir, if you can address the anode part, which I asked, in terms of timelines and when do we expect to begin that project?

I think anode project is going on very, right now, it's slow, because we have put some sort of a hold on that, looking at, because we are putting all our focuses right now on LFP, electrolyte, and salt, trying to get these qualifications out of the way. And right now, as I said earlier, that we have a second opportunities available in LFP. So our focus is to get the LFP grade developed and also ramp up the capacities as fast as possible. So I think Anode will come subsequent to that. So right now, it's behind the entire set of other products.

Got it, sir. So just one last question. We have mentioned in the PPT that we expect domestic electrolyte demand to pick up towards the end of next financial year and I believe we already have a smaller set of capacity that we have already constructed. The operationalization timelines for this and the capex that we are talking about even And for the electrolyte formulations, wouldn't that be closer to when we think that demand will pick up? If you can guide something on electrolytes' contribution into our P&L, when do we expect that to start in terms of sales?

The electrolyte business was particularly meant for domestic market.

Right, right.

And if you look at the current battery manufacturing in India, it's quite behind, and overall, in terms of gigawatt hours, the battery production is still at very, very low levels. Okay. And the way typically what our understanding is based on our interaction with OEMs is that when the battery plants have started in the initial period of stabilization and performance guarantee test runs, these plants are typically run based on the electrolytes which is supplied from the technology supplier or through one of its directed suppliers. So, subsequently, once this plant reaches some level of stabilization, the localization effort is taking place. So, looking at the trajectory that we see right now of ramp-up, we expect that the localization efforts and the demand for electrolyte in India will start ramping up towards the middle of next year, and you will see the reflection of that towards the end of the financial year. Now, having said that, at this point of time, we have capacities which we are using to making samples, develop formulations, and also using it for qualifications. So, at this point of time, we will, for next six months or so, we do not have any plan of adding more capacity than electrolyte. But probably toward the end of next financial year, we'll be required at the market pickups, we'll have to have more capacity being added. Electrolyte is normally a capex light. Acid turnover is very high. And the timeline for setting up these plants is much less compared to either LIPS6 or LFP or anode. So, coming back to your next question, that when should we see the revenue from Electrolyte coming in, I think we'll probably see that towards the H2 of next financial year.

Got it. So, it will be SALT, LFP, Electrolyte, and then ANODE in terms of revenue recognition timelines. That would be a fair understanding, right?

That's correct, Archie. Absolutely.

Got it, sir. Thanks for all the questions. Thank you.

Next question is from the line of Rohit Magrach from 361 Capital. Please go ahead.

Thanks for the opportunity and congrats on strong set of numbers. So, first question is for the battery chemicals capex of 6,000 crores, how is the funding now looking like in terms of equity fund infusion by external investors by parent and then debt? And probably some cash flows from the EV part of the business.

Yes, Rohit, I'll request Akhil, who's our group's CFO, to take this question.

Yes, Rohit, basically we have got excellent investors like IFC who are funded close to 400 crores. We have got additional equity round that we did a couple of years back, almost 1,000 crores. Plus the GFL contribution itself, which was around 800 crores. So if I add up all three of them, it was nearly around 2300 crores of equity that was being put into the system as of now. Plus there is a loan of almost 300 crores that we have taken from two banks. One is the Sumitomo bank, the other is the ICSA bank. Sumitomo we have taken 600 crores. I see I see we have taken another 300 crore. If I add up again, 2300 plus 900, it makes it almost 3200 crore already raised in the system. But this money is enough to sustain us for, I would say, a good part of this calendar year, a little bit more in the next 2027. But having said so, there are advanced discussions going on with many investors of similar repute as IFC, We are looking at this funding, because this is purely green funds and green funding, as you would recognize, that we are one of the pioneers into the energy transition zone as a group, not just as a GFL, EV, but as a group. And to that extent, there are many climate-oriented funds also, environmental funds, which are keenly looking to support us in this equity realm. My estimation is that we will be able to tie up another 500 to 700 crores over the next 3-4 months. But we will do it gradually. I mean, obviously, the plan is to reach 6,000, but the entire 6,000 will not be funded out of debt or equity. Partly it would be through the internal accruals. So my estimation is that we will have around 1500 crores of loan, we will have around 3,000-3,400 crores of total equity, and the 11,000 crore odd will be through the internal accruals as we will go along. But as I mentioned to you, the equity raise will be gradual. After IFC, which is a very, very, I would say, marquee investor, and they have given us a lot of visibility in terms of the corporate governance and ESGs and so many other things, there are similar sovereign funds and similar climate funds that we are targeting. And just to repeat what we have said in the earlier call, We have not provided any put or any backstop from parent or promoters for any such funding. So we will continue to do so as we go along. There are sovereign funds, there are climate funds that we are talking, and as per the needs of the company, we will not be raising all the money at one go, but gradually over the period of next 12 to 18 months.

This is extremely helpful. Second question is on FY28 revenue scale up from a battery chemical business. So in terms of not the absolute number, but a percentage, how much of the revenue is expected from exports of salts, domestic sales of salts, and if there is any electrolyte component also from the domestic sales perspective. So just a broader perspective in terms of percentages would be helpful. Thank you.

Yeah, I think, as I said earlier, Rohit, is that our currently planned salt capacities will be close to fully utilization by quarter one or quarter two around next financial year. So, initially, a big part of our revenue, of course, will come from salt. LFP, smaller capacity that we have will, of course, give us certain revenue, but that capacity is small. But the larger capacity of LFP would only get commenced by the quarter three of next financial year. The impact of that we will only see toward the end of FY28 or probably So, if I have to say in terms of percentage mix, initially, a lot of our revenue will be from LIPS6 and, of course, electrolyte, because I expect to see electrolyte coming in towards the end of next financial year. And right around as once these two get rammed up, the larger capacity of LFP will kick in. Okay. So that's the rough, rough, rough sort of timelines of revenue ramper.

So just one clarification, FY28, largely the revenue pie will be from the exports, or will there be some component from the domestic market as well?

There will be some component from domestic market because I expect toward the middle of next calendar year domestic market to slowly ramp up, but still it will be driven mostly by export.

Thanks a lot for answering all the questions. All the best, and Diwali wishes to the NTI team. Thank you.

Thank you, Rohit. Same to you. Thank you.

Thank you. Next question is from the line of Akash Patil from Akash Securities. Please go ahead.

Hello, sir. Good evening. Previously, participants will already answered my question. So, thank you. No further questions.

Thank you. Next question is from the line of Moks Jin from Nevesh Rai. Please go ahead. You are audible, Moks.

Yeah, so actually I have two questions. My first question is, actually, what is our overall thought process on the backbone integration in the LFP cathode business, especially on the side of iron phosphate? Like there are now very much specialized players, including in India, which are building inside a much larger scale than a captive line inside the cathode plant. So would you rather buy from them and stay focused on cathode or integrate into the iron phosphate yourself? And also, if you integrate, then what password volume do you expect, and over what time frame would it make sense?

As I said earlier, that once our product capacities start getting utilized, we will have the development of the backward integration. So, similarly, once we have the large LFP capacities in place, our plan for LFP will commence. So, FP, of course, we will get into FP production as well, because that's part of our backward integration. So, but we will time it according to the LFP sales so that we have the backward integration is ready when the entire LFP sales speak up or the volumes speak up.

Okay, and my second question is like, what percentage of scattered costs can be been down if we do backward integration as compared to buying from an Indian supplier? Is that a rough estimate?

I don't think we can give you that, because even the backward integration part to us is a standalone project, which should have its own sort of returns. So, I cannot really give you that number.

Okay. No problem. Thank you so much.

Thank you. Thank you so much, Moksh.

Thank you. Next question is from the line of Aditya Pals from MSI Capital Partners. Please go ahead.

Hi, am I audible?

Yes.

Yeah, thank you so much for the opportunity. Great set of results to the team. Congratulations and season greetings. So I have a two-part question connecting to what Akhil sir was highlighting on the sources of funds to a previous participant on battery material business. Yes. So, if I see, we've invested roughly around 1,800 to 2,000 crores of, 1,800 to 2,000 crores for gross block, creating a gross block. And we have highlighted that we want to take this to 6,000 crores of gross block. So, how should I look at the trajectory towards the incremental $4,000 in terms of sources of funds and in terms of timeline? And so, the second part of the same question would be that now that we've decided to shift our project to India, Can we see that there could be some bit of an upside in terms of asset terms that we had guided for 2x and 25% EBITDA margin that we had guided on this business?

So, Aditya, we are still holding on to our earlier guidance, which is now coming back to the funding part. But we have 2,100 crore we had planned this year, and Akhil had given a complete breakup in terms of where this funding is going to come from. Because roughly, at this point of time, I would say roughly maybe 3,600 crores is out of that 6,000 that's remaining. And Akhil had already given an indication for the sources of funds with the visibility of next six quarters or so, five to six quarters.

Is there anything specific that you're looking for beyond what...

No, I'm looking at the FI26 balance sheet. We've invested roughly around 2,000 crores. We have 600 crores of debt, 640 crores of debt. 640 crores has gone to 900 odd crores of debt. which you've gotten from Somitomo and ICICS. So, I am still trying to get a handle on how do we go from this 2,000 crores of gross growth that is going to be funded for towards 6,000, which you are saying that 400 crores of capital we've invested for, so 3,600. Where does that 3,600? So, that is what I'm trying to understand, because the current...

It will happen gradually, so 2,000 odd that you're seeing as on FY26 will become close Thank you very much. So, we already have 800 from GFL, 1,000 from investors, 450 from ISC. So, close to 2,300 crores we already raised. Another 1,200 crores need to be raised over the next 18 to 24 months. And the debt will be around 1,300 crores, you know, of which 900 is already raised. That is a broad 6,700 crore investment plan.

Understood. Understood. Makes sense.

If you have any further questions, you know, I'm happy to receive a separate call from you and explain to you each and everything. You can call me, you know.

Yes, I'll do that. Multiple questions, I'll do that. Thank you so much for offering that.

Yes, thanks. Thanks, Aditya. Thank you.

Thank you. Next question is from the line of Hansal Thakar from Lalkar Securities. Please go ahead.

Thank you.

A lot of it is actually, when I say volume mining, these are volume mining with a price, formula-based pricing. And typically, there is very little spot, because a lot of it is ongoing customers who have indicated their projected volumes, and we are qualified there. So, there is a formula in terms of, based on the lithium, what the price should be. And this is how it is mapped out. Rajiv, you want to add anything to this?

I assume that the long-term capacity is pretty much bound with these clients.

Yes. Rajiv, please.

Yes, so generally we have either annual contracts or longer than that, so our volume is therefore bound for the, at least for the next financial year with our customer, and for some of them it is even longer.

That's encouraging to know. And, sir, the second question was on the electrolyte. So, on the domestic business, I'd just like to know how many cell maker programs have reached the line validation stage, and whether they're EV or DESS, or both?

They are both. Currently, we are engaged with, the three of them have been at a production level in India, and we are engaged with all three of them. And this is a sample where we have sent it to them, and they are at the early stage of evaluation. So at this point of time, my understanding is there are only three battery manufacturers operating at a certain capacity.

God, it's great, great. All right, sir, that's all from my side, and congratulations again.

Thank you. Thank you so much, Anastasia.

Ladies and gentlemen, we will take that as the last question for today. I now hand the conference back to management for closing comments.

Yeah, thank you very much, and as we have indicated in this call, we continue to move on in the GURU journey with a positive bias on the margins. The advanced battery material segment is a long-term strategic initiative with large capex committed. We believe this segment will yield substantial value in the long run. While the segment beholds huge opportunity, the long approval cycles and gestation period is a critical entry barrier. We have successfully crossed all the hurdles and are on the cusp of a major growth journey ahead. The nature of the business is such that one has to commit a large capex in commercial plans before start of revenue. Fortunately or unfortunately, our revenues are tied up to the end product ramp-up where we have seen some delays. However, we are most excited about the opportunities from this segment, while our other segments continue to do exceedingly well. With this, we would like to thank you all for interest in Gujarat's chlorochemicals, and we would like to wish you all a very, very happy Diwali. Thank you.

Thank you very much. On behalf of DEM Capital Advisors Limited, that concludes this conference. Thank you all for joining us today. And you may now disconnect your lines.

Thank you.