Earnings Call Transcript - XNSE:CMRGREEN 2026-11-12

Operator

Ladies and gentlemen, good day and welcome to the CMR Green Technologies Ltd. Q2 and H1 FY27 earnings conference call. 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 the conference, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now have the conference over to Ms. Ashvi Shah from AdFactors. Thank you, and over to you, ma'am.

Ashley, Head of Investor Relations

Thank you, Steve. Good morning, everyone. I'm Ashley from Math Factors Investor Relations. On behalf of AMR Green Technologies, it is my pleasure to welcome you all to the Q2 and H1 SI27 earnings conference call. Joining us on the call today, we have with us from the management, Mr. Mohan Agarwal, Chairman and Managing Director, Mr. Ankur Singh, Director of Business Development, and Mrs. Satish Kaushik, Chief Financial Officer. We will begin today's call with opening remarks from the management, following which we will open the floor for Q&A. Before we begin, I would like to remind everyone that certain statements made during today's call may be forward-looking in nature. These statements are based on management's current expectations and are subject to certain risks and uncertainties that could cause actual results to differ materially. CMR Green undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent events or new developments. With that, I would now like to hand over the call to Mr. Mohan Agarwal for his opening remarks. Thank you, and over to you, sir. Thank you.

Mohan Agarwal, Chairman

Thank you, Ashwin. Good morning. My name is Mohan Agarwal. First, my apologies that we had to reschedule the call. Actually, on the 6th of November, unfortunately, I lost my father-in-law. We had to shift the call. I hope everybody understands. Well, thank you for joining us today for the Q2 and H1 earnings conference call. Before I turn to our performance, I would like to share in a few words the purpose that drives us at CMR. One is mobility. Mobility is integral to everyday life in India, and CMR plays an important role in keeping the country moving. Nearly one in every two vehicles on Indian road has aluminum alloys supplied by CMR. By giving aluminum a second life, we make mobility lighter, more resource efficient, and less carbon intensive. Then, sustainability is at the core of everything we do, with a strong focus across all three pillars of ESG, environment, social, and governance. Our commitment to the environment is reflected in our continued efforts to reduce our carbon footprint and leave a greener world for future generations. We supply low-carbon recycled aluminum to primary aluminum producers, and we introduced Continum, an EPD certified green billet. Each day we continue to innovate for a better tomorrow. So, coming to our performance. Today, I would like to take you through not just our performance, but also on how we are continuing to build on larger purposes. Our responsibility as a limited company is to translate the trust of our employees, customers, suppliers, shareholders, and investors into profitable growth and sustainable returns. We delivered a strong second quarter with a healthy growth across our financial and operational parameters. For Q2 FY27, revenue from operations stood at 3,471.9 crores, EBITDA at 150.7 crores, and profit after tax at 72.6 crores. Representing year-on-year growth of 59%, 30%, and 25% respectively. For H-127, revenues stood at 6,594 crores, EBITDA at 290 crores, and profit after tax at 141 crores. Representing a growth of 62%, 29%, and 24% respectively. For Q2 FY27, total sale volume grew by 14.4% to 1.2 lakh metric tons during the quarter. For H1, total sales grew by nearly 19% year on year. Our core aluminum business recorded stronger growth at about 24%, with volumes reaching nearly 98,000 metric tons. Our new businesses also gained traction. Billet volumes increased 126%. UBC volumes grew by 170%. These businesses are widening, and our product portfolio We are widening our product portfolio and growth platform. EBITDA per kg rather than as percentage in our view remains the more meaningful indicator of our underlying performance because price changes are largely pass-through for us. EBITDA per kg stood at 12 rupees 60 paisa in Q2 compared to 12 rupees 40 paisa in Q1 and 12 rupees 50 paisa in H1. We are now pursuing to pass on the increased financial cost on account of recent metal price increases to our customers which should further improve our EBITDA per kg going forward. Beyond our financial performance, I would like to explain what sets CMR apart from a typical little recycler. First, aluminum alloys are specialized products. Each grade is developed, tested, and qualified against a customer's specification, and qualification cycles are Once approved, our product becomes part of the customer's engineering and production process, which makes it difficult for a new supplier to enter and for a customer to switch. Good morning. Our commercial model is designed to manage commodity price velocity. We combine LME-based hedging, lag-aware pricing, and customer pass-through mechanisms to reduce commodity risk and improve margin predictability. Third, our advanced aggregation capabilities and state-of-the-art processing technology enable us to recover and supply high-quality, furnace-ready scrap across the metals, such as copper, brass, zinc, and stillness. Fourth, billets and sheetingets are a growing part of our portfolio. We are the first. In India to develop continuum, our premium quality green low carbon billets made from post-consumer scrap with an EPT certified carbon footprint. The fact that customers traditionally using primary aluminum billets are also purchasing from us reflect the quality and position of our products. Fifth, we are also a first-mover in closed-loop UBC recycling with a dedicated facility serving a primary aluminum producer. This enables used beverage cans to be recycled back into the same value chain, supporting circularity and reducing dependence on primary resources. Sixth, together, UPC relates. And seating rates expand our addressable market beyond automotive, inter-sectors, such as construction, renewable energy, and sustainable packaging. So, all these strengths provide... Great predictability and visibility on volumes, along with more consistent profitability, making Fianar a depreciated and increasingly decommoditized business. This depreciated positioning is supported by a favorable demand environment across our end markets, giving us large opportunities of further growth. Coming to automotive, the Indian automotive industry recorded its highest ever second quarter sale in Q2 FY27 with passenger vehicles, two-wheelers, and commercial vehicles growing at 30.7%, 15.2%, and 28.7% respectively. Rising EV adoption with three times higher Aluminium content per vehicle further support our growth. Beyond automotive, demand for recycled aluminum is expanding across construction, packaging, electrical, and renewable energy, with these segments expected to grow at 10-12% CAGR through FY30. A growing preference for low-carbon material together with regulatory support from EPR. And recycled content mandates add momentum to our long-term growth. On the financial front, I am pleased to share that CMS credit rating has been upgraded by one notch by crystal to double A minus. This reflects our strength and financial standing and gives us greater flexibility going forward. I would now like to address a few points raised in our earlier conversations with the investors. Firstly, regarding the cash flow. Our cash flow from operations is influenced by our high capex investments and high growth. We earned an operating profit of Rs.444 in H1, but an increase in working capital and tax payment of 703 crores led to slightly negative cash Thank you very much from operations. However, our debt equity ratio is still at a healthy 0.9, and we will continue to exercise sound financial prudence and planning to continue our focus on sustainable growth. Next, on ROCE, I wish to inform that historically we have achieved an average ROCE of over 20% Thank you very much. Decades. In the near term, however, higher finance cost and the ongoing capex have moderated our ROCE to around 14%. As these investments scale up and start contributing more meaningfully, we expect ROCE to progressively improve back to over 20%, except when we keep pursuing Additional growth opportunities and make large strategic investments in expansion and diversification. So, we have to always find a balance of what should we prioritize. Next, regarding scrap availability, we remain well focused. On sourcing and diversifying our raw material supply. We are closely monitoring the proposed EU restrictions on metal scrap exports to India from May 2027 and have been making representations to the relevant EU authorities to support the continuation of the exports. In parallel, we also continue to further expand our sources in geographies. And supplier network, both in imports and domestic. With all these, we expect that we will have sufficient supply of scrap. I would also like to take this opportunity to briefly address a recent transition in You can never see a full position. While there has been a change in this role, and Mr. Swatish Kaushik, our earlier CFO, has rejoined us, the CMR's governance framework remains strong and well-established, supported by an independent board for over-educate and robust financial systems and processes. Ernst & Young LLP served as Our statutory auditors for 10 years before resigning on rotation basis. They now continue to be associated with us as our internal auditors. I would like to thank Mr. Yogilkishore Garg for his contributions and welcome Mr. Satish Kaushik as our new CFO. Before I conclude, I would like to reiterate our confidence in the long-term growth of recycled aluminum across both automotive and non-automotive applications with our leadership position, strong operating capabilities, and focus on sustainable growth. CMR is well positioned to capture this opportunity. So, thank you for your continued trust and support. I will now hand over the call for questions.

Anirudh Sharma, Analyst — Eknath Investments

Thank you, sir.

Operator

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Pranav Chand with Ageless Capital and Finance. Please go ahead.

Pranav Chand, Analyst — Ageless Capital and Finance

Hi, I hope I'm audible. Thank you for the opportunity. So firstly, my condolences to the family. Sir, secondly, just coming to the numbers. Sir, we've seen an increase in the short-term borrowings. I'm assuming it's for working capital as the metal prices increased during the first half. So now, as we see, Abdominium has more or less stabilized around 3000, and the chances of it going higher are less likely than it going lower. Along with that, so considering now in the second half, where can we see our borrowings to moderate to, and also just in addition to that, related to that, are cash flow from operations, if aluminium stays stable now around the prices that it is right now, are we expected to be cash flow from operation positive by the end of the year? Just these two questions.

Mohan Agarwal, Chairman

Thank you. Thank you, firstly, for your condolences. It means a lot to us. We are very focused on the cash flow situation. While the prices have gone up, what we have seen and maintained is that our working capital cycle actually has gone down to 66 days from 72 days that we experienced in March. So, our overall debt, which is, as you rightly pointed out, is mainly because of the short-term working capital requirements. It is short-term debt. So, that is the reason, but we are making our working capital cycle a little more efficient. With aluminum prices, I also feel 3,000 looks to be more sustainable. We don't think it is going to go back to the very high levels that we have seen earlier. So this should be the normal range where prices should stay. I, we, our cash flow situation would definitely improve because also there is a lot of money that we have to get from our customers for rate increase. So there are good amount of. Unrealized rate difference debit notes. So, all that put together will definitely improve our cash flows better. In fact, before we, by March 27, we expect that we should grow cash flow positive, especially in the H2 of this year.

Pranav Chand, Analyst — Ageless Capital and Finance

Understood, sir. And, sir, the borrowings are expected to remain at this level or they should moderate as well towards the end of the year?

Mohan Agarwal, Chairman

At the moment, look, we are looking at high growth. So, borrowings should kind of stay at current levels. That is what, because it's an efficient working capital cycle at this time. So, I don't see any reason why it should go down.

Operator

Until and all else, we make more money and we are able to repay off the part of the debt.

Mohan Agarwal, Chairman

So, the working capital cycle more or less will stay the same. Either it will get funded. In fact, it will get reduced because with our earnings going forward.

Pranav Chand, Analyst — Ageless Capital and Finance

Understood. Thank you. Understood. And, sir, on working capital, are inventory days and receivable days, are we planning, is there a, you know, a method where we can reduce them further? Are we targeting a further reduction or this can be sustainable for the year?

Mohan Agarwal, Chairman

No serious change. I think what we are experiencing at this moment of time is more or less appropriate. I don't see any substantial change in that.

Pranav Chand, Analyst — Ageless Capital and Finance

Understood, sir. And so just one last question, sir. Our Billet and our UBC facilities, these are going to work at 100% utilization this year, which will add to the volumes and hopefully take us to the 5,00,000 volume.

Mohan Agarwal, Chairman

Yes, UBC is ramping up quite well. And billet also is ramping up quite well. In fact, in the billet plant, we have already also undertaken an expansion there, which should be up and running by, say, end of FY27 or early, by April, FY28, we should be up and running. So, both these plants should reach 100% or mere 100% capacity utilization by March FOA 27.

Pranav Chand, Analyst — Ageless Capital and Finance

Understood, sir. That's it. For my answer, I'll join back in the queue in case there's any more. Thank you so much for your answers.

Mohan Agarwal, Chairman

Thank you. Thank you.

Operator

Thank you. Participants who wish to ask a question may press star and one. The next question comes from the line of Sagar with Alchemy Ventures. Please go ahead.

Sagar, Analyst — Alchemy Ventures

Hi, sir. Can you guide us in terms of volume growth for both aluminum and non-aluminum? What are we looking at in 27 in the current year and next year?

Mohan Agarwal, Chairman

We have already said a guidance about 5,00,000. Tons for FY27, and for FY28, we are looking at a further growth of 18%.

Sagar, Analyst — Alchemy Ventures

18%, is that correct?

Mohan Agarwal, Chairman

Yes, 18% for FY28 is what we have budgeted.

Sagar, Analyst — Alchemy Ventures

And can you give the breakup between aluminium and non-aluminium?

Mohan Agarwal, Chairman

Please, it will be 80% aluminium, 20% non-aluminium, and between the 80% aluminium, we expect 60% to be automotive and 20% to be non-automotive. This is the general guidance we have at the moment. Got it.

Sagar, Analyst — Alchemy Ventures

And, sir, in terms of, as you rightly pointed out, that one needs to look at EBITDA per kg, do you think if Bayes' aluminum price goes below $3,000, will we trend down below Rs. 12 or kg and go back to our historical levels of 11 odd?

Mohan Agarwal, Chairman

I think the new normal is about 12 and a half, as we look at it. We are actually trying to... We get some finance costs to our buyers because our ROC is pretty low at about 14% which should go up. So we are actually looking at improving the EBITDA margins rather than going down on it.

Sagar, Analyst — Alchemy Ventures

So, it will not have a correlation with the LME price. Is that what you are trying to say, that irrespective of what happens to LME price, we will continue to hold and increase the EBITDA per kg?

Mohan Agarwal, Chairman

More or less, that is the situation, as we have seen, that we are able to pass on the costs to our customers, which keeps the EBITDA as a whole number pretty constant.

Operator

Rather than as a percentage of the sale price.

Mohan Agarwal, Chairman

So, if the prices go down, EBITDA percentage improves. If the prices go up, EBITDA percentage reduces, but the whole number stays nearly the same.

Sagar, Analyst — Alchemy Ventures

Sure. And, sir, what percentage of our imports currently come from EU?

Mohan Agarwal, Chairman

About 20% come from EU. And, yeah.

Sagar, Analyst — Alchemy Ventures

What would be the top three geographies, and what percentage of imports would be coming from them? Can you quantify these, please?

Mohan Agarwal, Chairman

Yes, sir. Within EU, 20% may I be about...

Sagar, Analyst — Alchemy Ventures

No, I'm saying, sir, on an overall basis, not just EU, on an overall basis, at a company level.

Mohan Agarwal, Chairman

Okay, sorry, can you repeat your question at a company level?

Sagar, Analyst — Alchemy Ventures

Which would be the top three countries from where we would be importing from?

Mohan Agarwal, Chairman

Okay, the top three is about, say, US constitutes nearly about 50%, and 48% to be precise. UK is 8%, which is not a part of EU, and then... EU would be 12%, I suppose. When we said 20%, EU is including UK, no?

Pranav Chand, Analyst — Ageless Capital and Finance

Okay, excluding UK.

Mohan Agarwal, Chairman

So, the top three are these, US, EU, and UK.

Sagar, Analyst — Alchemy Ventures

So, in case if EU was to be proposed as it is proposed, sir, from which other geographies do we look to kind of source?

Mohan Agarwal, Chairman

Look, what we normally see in things like this, one, the availability of aluminium scrap is increasing by the day, because there is more and more material which is coming back for recycling. Thank you. Having said that, if you... Puts a ban on export. Then obviously the first casualty is going to be that the imports that EU does at this moment of time don't go in there. So gets distributed to other areas. So there is going to be readjustment of supply lines. And we will have, we have, we have expanded our sourcings to More locations. We have gone a lot into Southeast Asia now. We are importing more from, say, Japan and Malaysia and Thailand and countries like this. So we have come down to Southeast Asia apart from being west most of this time. So it is only a rear adjustment of supply lines. No consumptions are really going to change overnight so much that we will have any problems with sourcing this crap. So, we will have sufficient quantities and we are not reducing any of our expansion plans because scrap may not be available tomorrow. We are still pretty strong on our expansion.

Sagar, Analyst — Alchemy Ventures

Sir, one last question from my side. When do we expect the beverage can facility to go live, and what will be the year one and year two utilization?

Mohan Agarwal, Chairman

The beverage can facility is already live. We are currently running at about 60% capacity utilization, if I see it on a monthly basis. By March, we expect to go to over 90%, so we will hover about 90, between 90 and 100% at that time. Got it.

Sagar, Analyst — Alchemy Ventures

Thank you so much and all the best.

Mohan Agarwal, Chairman

Thank you. Thank you so much.

Operator

Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. The next question comes from the line of Raj Shah, the feed-end EMC. Please go ahead.

Raj Shah, Analyst — Feed-End EMC

Hi, thank you for the opportunity. My first question is in the quarter two number.

Operator

Mr. Raj, could you please use your answer? Your voice is coming very low.

Raj Shah, Analyst — Feed-End EMC

Are you able to hear me now?

Operator

Yes, sir. Thank you.

Raj Shah, Analyst — Feed-End EMC

Yeah, I'm just asking that in the Q2 numbers, is there any hedging or forex loss or gain in corporations?

Mohan Agarwal, Chairman

Yes, hedging is a regular exercise for us. So when we look at the overall profitability, we look at it is always with hedging. I don't call it a gain or a loss. A hedge is a compensation for large price movements. So whatever is being reported is after considering the hedge, in your words, gain or loss. Yes.

Raj Shah, Analyst — Feed-End EMC

Understood. And secondly, when you say for FY28, close to around 18% volume growth, so out of that, aluminium will be growing slightly faster. I mean, the share of aluminium will be keep on increasing in terms of as a percentage basis, we're going at 20-25% versus non-aluminium. And because non-aluminium in the last two quarters have also been slightly weaker for us.

Mohan Agarwal, Chairman

Yeah, but non-aluminum overall basis we expect it to keep pace with the same growth rate is what we expect in the entire spectrum of the business. Last two quarters it did go down, but it will pick up again. It went down only on count of stainless steel being slightly lower because we could not find enough Raw material for, but we have corrected that, and stainless steel is going to also pick up and grow. So, on that, we expect that overall, we should expect the similar growth in non-aluminium sectors also. So, the what will grow faster is The non-automotive where there is large growth potential that we have. So that is going to grow faster. Automotive also is at this moment of time growing very well. So we are keeping pace with that. Overall, it is a little difficult to say, but more or less, everything will grow together, and overall, we should achieve our projected numbers.

Raj Shah, Analyst — Feed-End EMC

Understood. And if the EU scrap ban is, I mean, for us, if it is not as detrimental, and if we are able to recover volumes from other places, then can the growth accelerate to like 25% odd level, which we have done in FY27?

Mohan Agarwal, Chairman

I'm sorry, I did not get the first sentence of your question.

Raj Shah, Analyst — Feed-End EMC

So, I'm saying that if the EU scrap ban is not as detrimental to us, then can the growth accelerate to 25% like we have done in FY27? I mean, are we slightly conservative in Anam?

Mohan Agarwal, Chairman

We will stick to the projections that we've made. We generally like to be a little conservative, but that usually what we have seen is that as we deliver,

Operator

we are able to deliver what we budget for.

Mohan Agarwal, Chairman

And the EU scrap ban, we are not. We're taking steps to mitigate the impact of it, if it comes. It is quite possible that EU may... Not really deferred, but there could be some... Yes, there will be some relaxations in between which will leave it flowing because look, EU is using all the scrap that it can use at this moment of time. What the EU scrap ban is going to do and as is being talked about in the EU itself is that the price of scrap there will go down quite a bit. So it is like putting money from The scrap recycler's pocket to maybe the consumer's pocket or something like that, which is something which will not hold for a long time.

Raj Shah, Analyst — Feed-End EMC

Understood. Just last question for me. So, I mean, you said that now because of the high finance cost, you are also incorporating or you are recovering some of the finance cost from your customers. So, can we see another 3% to 5% growth in your EBITDA pattern for FY28?

Mohan Agarwal, Chairman

3 to 5% meaning that over the 12 rupees, 50 paisa you mean?

Raj Shah, Analyst — Feed-End EMC

Yeah, yeah, close to around, yeah, 50 paisa, 30, 50 paisa.

Mohan Agarwal, Chairman

I think so. Easily, maybe more.

Raj Shah, Analyst — Feed-End EMC

Understood. Thank you so much.

Anirudh Sharma, Analyst — Eknath Investments

Thank you for the opportunity.

Operator

Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question comes from the line of Sahil Bombayri with Monarch Network Capital. Please go ahead.

Sahil Bombayri, Analyst — Monarch Network Capital

Yeah, hi, sir. Thank you for the opportunity. Firstly, I... Yeah. So, management has guided for a sustainable EBITDA of, let's say, 12 to 12.5 per kg. But looking at the next four or five years, what could be the key drivers that would help CMR to increase this EBITDA per kg beyond this level? Like, could it come from a better product mix or a higher share of liquid aluminum? Or, like, investors should consider this 12.5 per kg a reasonable long-term level? That is my first question.

Mohan Agarwal, Chairman

Okay, now I'll answer that. On a longer term basis, the way I look at is a ROCE in our business, where traditionally we have had an ROCE of more than 20%. So, according to me, that is what I target. For that, the EBITDA percent, EBITDA per kg also would adjust. That's only the profitability part of it. And growth, we see aluminum and recycled aluminum. With every passing day, there is more metals which are available for recycling. There is a lot of disturbance. Yeah, sorry. Yeah, it's okay. So, it is... Aluminium, recycled aluminum will continue to grow in various applications. With technology advent, we can recycle more scrap and make very high quality product. And CMR is amongst the... We are the highest technology adopters in the world. So, that plus our now. Presence in both the auto and the non-auto consumption sphere, which actually opens up 80% of the overall consumption for us, makes that as our serviceable market. So, that is going to ensure that we will be able to continue to grow well. As I said in my... Speech also that I think the CMR is well positioned with our leadership position, with our strong operating capabilities, and with focus on technology and the market that we have been able to penetrate. All these together put us in a. Comfortable position to capture the growth as it comes.

Sahil Bombayri, Analyst — Monarch Network Capital

Okay, okay, sir. But if you talk about the ROC, do you have any target ROC that you aim to achieve over the next two to three years?

Pranav Chand, Analyst — Ageless Capital and Finance

20%.

Mohan Agarwal, Chairman

Okay, 20%. That is what we've been receiving in the past. So there is no reason why we should not achieve it in future.

Sahil Bombayri, Analyst — Monarch Network Capital

Okay, okay, sir. Understood. And also, you mentioned that CMR could diversify scrap sourcing to the other countries if the European export restrictions come into effect. But do you expect that this would put any meaningful pressure on your EBITDA per kg if this European export ban comes into effect?

Mohan Agarwal, Chairman

One, we have already present the resource from all the six continents across the world. We are also expanding and strengthening our domestic sourcing from within India. So, the EU ban, we... I don't think we'll make any material difference either on our volumes or on our profitability. Okay, okay, sir.

Sahil Bombayri, Analyst — Monarch Network Capital

That's the answer, my question. Thank you.

Operator

Thank you. Participants who wish to ask a question may press star and one. The next question comes in the line of Ajit Sethi with ICO Quantum Solutions. Please go ahead.

Ajit Sethi, Analyst — Ico Quantum Solutions

Yeah, thank you for the opportunity. So, on your guidance of 18% volume growth in Fx28, so if I do the math, it comes around 85% utilization on 7,10,000 capacity, which you had mentioned in the presentation. So, what is the future capacity that we are looking to add for further growth in Fx29 and beyond?

Mohan Agarwal, Chairman

There will be capacity addition, because traditionally for the auto business, we do a capacity utilization of 70%. For the non-auto, our capacity utilization, say, should be in the range of about 95%. So, by that thing... Thirty-five percent on seven lakh is kind of meeting our full capacity, so we will have to go for further expansion to meet the further upcoming growth which will ensue. So I haven't done my maths for FY29 and beyond, so I'm not able to quote a number there.

Ajit Sethi, Analyst — Ico Quantum Solutions

So, is it possible for you to share what will be the capacity addition that we are looking?

Mohan Agarwal, Chairman

Look, as a rule, we push our sales with production, meaning that we always put in capacity much before the demand comes. So, we will follow the same policy. So, our capacity expansion And Capex, uh, will continue. As we see demand and before it really comes in.

Raj Shah, Analyst — Feed-End EMC

Okay.

Ajit Sethi, Analyst — Ico Quantum Solutions

Now sir, can you please share the spread between the recycled aluminium and virgin aluminium?

Mohan Agarwal, Chairman

The spread between recycled, for automotive, what we have seen, it can go to about 15-20%, recycled being cheaper. For non-automotive, normally the spread is much smaller. And it depends on if the LME prices go up, the spread becomes wider, and if the LME prices go down, then the spread becomes thinner.

Siddharth Patacharya, Analyst — Autumn Investments

Thank you so much.

Operator

Thank you. Participants who wish to ask a question may press star and 1. The next question comes from the line of Anirudh Sharma, with Eknath Investments. Please go ahead.

Anirudh Sharma, Analyst — Eknath Investments

Hi, good morning, sir. Am I audible? Yes, so I have a few questions. So, firstly, sir, the liquid metal supply model is a key competitive advantage. So, how does the management plan to strengthen and expand this model, and what are the key barriers that make it difficult for the competitors to replicate?

Mohan Agarwal, Chairman

Look, liquid metal is our focus area. Liquid metal is also the kind of industry focus area. More and more customers are approaching us for liquid metal. In fact, most of our new capacities are coming in the form of liquid metal for the automotive applications. For non-automotive, liquid is not desirable or not possible. Liquid metal brings a huge amount of commercial and environmental savings. So because of that, we see large growth in liquid metal, and the entry barriers in liquid metal are really very very strong, because once you tie up with a customer and put up a liquid metal plant near to their plant, then this It creates a very, very strong entry barrier, and to further strengthen our position as the preferred liquid material supplier, we now have two patents. One is on... Safe transportation of metal from our premises to the customer's premises and back. And second is on monitoring and ensuring that the supply failures, because it is online, we don't have any chance of failure. So, we now have a patented methodology in which it is very well monitored. We get the next supply is indicated well in time, and there is a back traceability should a failure in any event occur, so which gives us a reason for taking corrective actions in future. So, all these together and our presence in liquid metal being so. Look, we started the first liquid metal in 2008. So, in the last 18 years, we still have a more than 80% share in this space. So, and now we also have patents to support us. So, we see liquid metal will. Actually propel our growth, and it is a, because it kind of decommoditizes the business, our sales become very predictable, and that is what is the most important thing, that if volumes are predictable, then the business is good.

Anirudh Sharma, Analyst — Eknath Investments

Okay, understood, sir, understood. And so, how does the management view the demand environment across the automotive and non-automotive segments, and what is the expected contribution from EV-related opportunities and the increasing aluminum usage in vehicles towards the company's future volume growth? Thank you.

Mohan Agarwal, Chairman

Mostly we see... Yeah, we see... A lot of growth. The automotive is doing very well. It has just started to do well, kind of. We have seen very, very strong numbers. In my interactions with the auto OEMs, they are all very, very bullish and expect the momentum to continue. And the non-automotive also. Non-automotive, I say, is kind of a virgin feel for us. We have a first mover advantage there because there is nobody else who has done this foray into. And servicing that large market. So I see a lot of growth possibilities in the non-automotive sector also.

Anirudh Sharma, Analyst — Eknath Investments

Okay, sir, okay. So that's it from my side. Thank you for the opportunity.

Operator

Thank you. A reminder to all participants that you may press star and 1 to ask a question. The next question comes in the line of Prisha Shah with Shah Family Office. Please go ahead.

Prisha Shah, Analyst — CJ Shah Family Office

Hello, sir. I have a couple of questions. So, starting with, you know, could you please help me by providing an update on the ongoing and the planned capacity expansion initiatives that you have taken, including the expected commissioning timelines and incremental capacity?

Mohan Agarwal, Chairman

Okay, now, what the? We have done. Presently, we had a capex guidance of nearly 200 crores in FY27. We have, and that is to be in various plants. One, we have put up a plant in Shulagiri. So, Shulagiri, Aptis, Verdi. Electric Vehicle Park is, so that should be commissioned in September,

Sagar, Analyst — Alchemy Ventures

sorry, January, January 22nd,

Mohan Agarwal, Chairman

then we have nearly a 19 crore of capex at a

Siddharth Patacharya, Analyst — Autumn Investments

lot of distributors.

Mohan Agarwal, Chairman

So, Sulagiri should be up and running in about January, then we have expansion of capacity which Which is more a balancing at Jhatsugra. That's about 48,000 times. And Tirupati, we are increasing capacity where our production should go up nearly. 50,000 tons at Tirupati further, and then Bawal, Tirupati expansion will go on stream in about March next year, and Bawal, we have put up a small 12,000 ton plant that should also start production in January, February, FY, January, February 27. So, and I think I missed out on the answer to Anirudh in the last call that EV sales. We are there with the EV. Already automotive, we are there. So, whether they produce conventional vehicles or they produce EV, our share into those businesses. Stay the same, so we are capturing the EV growth, and we are also, because on the cast aluminum, it will stay the same, the EV and the non-EV. And on the wrought aluminium which is extrusion and sheet is where the two times of additional aluminium usage will finally come. So, we already are there in the wrought aluminium space also. So, we will be able to write the EV demand increase as it comes.

Prisha Shah, Analyst — CJ Shah Family Office

That's it. I think I have answered both the questions.

Prisha Shah, Analyst — CJ Shah Family Office

E-growth drivers expected to support the company expansion which you mentioned over a median term scenario if I have to consider.

Mohan Agarwal, Chairman

Automotive, then renewable energy, then And, um, EV is construction, packaging. Providing new metal to primary producers, new recycled metal because, look, the recycled metal content to overall consumption continues to grow and will continue to grow. And recycled metal has a, we have a zero discharge company, no solid or liquid discharge with a very, very low carbon footprint. So all this... Also forces the primary producers to look at recycled metal as their new source of metal rather than only mining, so that also would be a big demand in the medium to long term.

Prisha Shah, Analyst — CJ Shah Family Office

Yeah.

Operator

Oh, yes, Mr. Professor, how does that answer your question? Oh, yes. The current participant has been disconnected. We'll move on to the next question. It's from the line of Siddharth Patacharya with Autumn Investments. Please go ahead.

Siddharth Patacharya, Analyst — Autumn Investments

Hello, am I audible, sir?

Operator

Yes, sir.

Siddharth Patacharya, Analyst — Autumn Investments

Yeah. So, just wanted to understand the liquid aluminum supply chain better. So, today, with our current capacity, is there a distance of Restriction in terms of where, till how long we can supply the liquid aluminum from our plants?

Mohan Agarwal, Chairman

Yeah, we generally do it up to about 30 kilometers. Okay.

Operator

That is the, more or less, the restriction that we have.

Mohan Agarwal, Chairman

We, in certain cases, on a trial basis, we have gone longer distances, but at the moment, we are planning around up to 30 kilometers.

Siddharth Patacharya, Analyst — Autumn Investments

30 kilometers, okay. And in terms of liquid aluminum capacity, what is our capacity utilization? Can you measure that internally?

Mohan Agarwal, Chairman

Liquid metal mostly goes to automotive and there we keep 70% as our capacity utilization because we need to have backup production should anything go wrong. So we will maintain it at 70%.

Siddharth Patacharya, Analyst — Autumn Investments

70%. And from a customer's perspective, just wanted to understand this. I'm sure there is a saving for them when you supply liquid aluminum, right? Because they don't have to set up the foundry and the related infrastructure to that effect. Do your customers fully sort of rely on your supply or do they have foundries as well internally?

Mohan Agarwal, Chairman

Only they rely on our supplies only. As a backup, they could have a melting furnace within their own. But normally we have seen that capacity is not sufficient. We have been doing liquid metals since 2008 and been quite successful with it. So, the customers kind of don't feel a need, and we generate backups at our end. That is more important.

Siddharth Patacharya, Analyst — Autumn Investments

Correct. Correct. Correct.

Anirudh Sharma, Analyst — Eknath Investments

Got it.

Siddharth Patacharya, Analyst — Autumn Investments

So, thank you so much. Thank you so much for your answers, sir.

Mohan Agarwal, Chairman

Thank you.

Operator

Thank you. A reminder to all participants that you may press star and 1 to ask a question. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing the conference.

Mohan Agarwal, Chairman

Thank you very much to everybody who is on this call attending, and thanks a lot for asking such relevant questions. And we will continue to put in our best to further fortify this composition that CMR has been able to create for itself in the field of Metal recycling, I would say, mostly aluminium. So, we are pretty strong in other parts of recycling also. There also, our products, we command a slight premium because of the quality that we use, even if it means a sorted copper scrub. So, we will continue to innovate. We will continue to bring more value to our customers and, in turn, to our stakeholders. Thank you very much.

Operator

Thank you, sir. On behalf of CMR Green Technologies Limited, back into this conference. Thank you for joining us and you may now disconnect your lines. Thank you.