Ddev Plastiks Industries Limited (DDEVPLSTIK) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to TDF Classics Limited Q4 F526 Ernest Conference column. This conference column contains forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve the will and uncertainties that are difficult to believe. As a reminder, all participant lines will be in the lesson only more, and there will be an opportunity for you to ask questions after the presentation concludes. Should you leave assistance during the conference call, please signal an applicable pressing star 0 on the touchstone call. Please note that this conference is being recorded. I now add the conference over to Ms. Serena Sheik from Co-India Advisors. Thank you, and I'll be honest.

Good afternoon, everyone. On behalf of Going Air Advisors, I welcome all of you to the fourth quarter and FY26 earnings conference call of Dave Plastics Industries Limited. Today, from the management, we have Mr. Narendra Surana, Chairman and Managing Director, Mr. Dave Surana, Whole-Time Director and CEO, Mr. Rajesh Kuthari, Whole-Time Director, Mr. Arihans Botra, Chief Financial Officer, and Dr. Rakesh Tiwari, CEO of Renovable Energy. I now hand over the conference to Mr. Dev Sulana for his opening remarks, and then we will open the floor for question and answers. Over to you, sir.

Thank you. Welcome to the Dave Plastic's Quarter 4 Financial Year 26 earnings call. We appreciate your time and continued interest in our journey. Yesterday, our Board of Directors approved the financial results for Quarter 4, and we are pleased to share with you our performance highlights, key developments, and outlook for the future. In its April 2026 India Development Update, the World Bank projects India's real GDP growth at 6.6% for financial year 27, a moderation amid elevated energy prices, yet positioning us among the fastest growing major economies worldwide. Even as the West Asia conflict dampens market sentiment, our growth trajectory remains resilient, underpinned by robust domestic demand and sustained manufacturing momentum that buffers external shock. A growth-focused budget with elevated government capex alongside fiscal prudence progresses on the FDA's lower U.S.-supported domestic policies will further strengthen this outlook, complemented by steady investment flows, also paves the way for demand-led economy recovery. Financial Year 26 presented a challenging external environment shaped largely by the Israel-Iran conflict that escalated from 28 February, disrupting exports, transit routes, tightening raw material availability, and triggering steep input cost inflation. The demand sentiment to an extent was dampened by consequent rise in selling prices on the back of geopolitical developments in the Middle East. But our team is executed with agility and resilience, enabling us. To sustain momentum. Against this backdrop, day plastics delivered a resilient performance, revenue grew by 13%, exports rose by 30%, and export volumes expanded 23% as well. Overall volume growth of 6% would have approached 10% under normal conditions. Our HFR capacity sustained utilization of nearly 50% throughout this period of turbulence, and our new Bhivadi facility commenced commercial operations in the last week of April this year. This outcome reflects the strength of our operating model, disciplined execution, and our dominant position as India's largest listed polymer manufacturer. India's domestic wire and cable sector continues to thrive with robust growth fueled by surging demand across key areas. The rapid adoption of renewables, expansion in transmission and distribution networks, and the nationwide push for data centers. The ongoing global geopolitical crisis has intensified focus on localization in a big way, reducing import dependencies and bolstering opportunities for homegrown manufacturers. This plays directly into the strengths of the plastics. A leading domestic polymer compound producer with deep roots in this space and proud legacy spanning three generations, positioning us ideally in meeting this escalating demand with reliable, high-quality solutions for wires and cable manufacturers. Our strategic priorities at Deep Plastics remains firmly anchored to our guided vision of achieving business consolidated revenue of 5,000 crores by financial year 2030 from polymer compounding business. This commission is not merely a target in its natural outcome of a disciplined growth roadmap built on expanding capacities, deepening our geographical footprint, and fulfilling ever-growing demands of our customers. To sustain this momentum, we have strategically invested in both brownfield and greenfield expansions, elevating our total installed capacity to 268,400 metric tons per annum this fiscal year, adding another additional 30,000 metric tons per annum. Overall, another 48,000 metric tons dedicated to XLP in operation from April 2026 onward at a committed capex of Rs. 80 crores. This capacity addition will take our overall capacity to a level beyond 3,15,000 tons per annum. Even as the global and micro-economic landscape underwent significant turbulence through FY26, we navigated these headwinds with prudence, ensuring operational resilience and long-term vision remains intact. In summary, Dave Plastic stands at a compelling inflection point of proven core business growing with intent, complemented by a forward-looking entry into the energy storage space as well. We are confident that the foundations we are laying today will deliver sustained and superior value to all our stakeholders in the years ahead. Across the organization, our focus remains on executional excellence, translating strategy into outcomes, and strengthening the foundation for long-term growth. Looking ahead to financial year 27, we are confident of sustaining our growth trajectory, targeting a volume of two last 31,000 metric tons per annum, with a capacity utilization of 73%, and a year-on-year revenue growth of 13%, alongside top-line expansion, we remain equally focused on margin quality with EBITDA margins anticipated at approximately 11%. Reflecting our continued emphasis on operational efficiency and value, a creative business. Best revenue has not been included in the above figures and will be additional to these numbers. Beyond a core business, Dave Plastic recognized early the transmotive opportunity unfolding in India's renewable energy ecosystem. Accordingly, we have taken a strategic decision to foray into battery energy storage system sector, a critical enabler for renewable energy integration and grid stability. With India entering a multi-layer storage capacity build-out, underpinned by strong policy support, this segment offers compelling and long-term growth visibility. Our best roadmap is ambitious yet measured. We aim to develop 5 gigawatts of installed capacity in a phased manner with each gigawatt projected to generate approximately 800 to 900 crores in revenue. This position's best As a meaningful and incremental contributor beyond our 5,000 crore revenue aspiration from the polymer compounding business by F530, with an anticipated top line, additional top line of 2,000 to 2,500 crore alone from this vertical of this. Now, I hand over to our CFO, Mr. Arian Bhutra, for his remarks.

Thank you, Devji. For the full year ended March 31st, 2026, we are pleased to report a strong and resilient performance. Our financial year 26, revenues grew by 13% year-on-year basis, driven by robust momentum in the cables and wire segment. EBITDA grew by 12% year-on-year with margins at 11%, a commendable outcome achieved despite multiple industry headwinds and softer trade sentiment amid the ongoing geopolitical tensions in the Middle East. We closed the fiscal at a pat of 202 crores. Registring a growth of 9% year-on-year basis, a reflection of our sustained operational discipline and kerning's quality. The performance is largely structural in nature and is a direct outcome of our deeply entrenched market position, wire and cable manufacturers, our unwavering commitment to quality, and our proud record of zero rejections to death. The intensification of the Israel-Iran conflict between 28 February till date introduced material Macro headwinds for our business, disrupting export logistics, and creating significant volatility in the raw metal availability and cost. The sharp spike in input prices necessitated a pass-through to selling prices, which temporarily softened market demand. Encouragingly, the situation has begun to stabilize from April. However, we continue to monitor the geopolitical landscape closely and remain agile in our response to any further developments. Operationally, our volumes for financial aid 26 stood at 21,370 mt per annum, translating a capacity utilization of 77%. The modernization in utilization level is attributable to the inclusion of 30,000 mt per annum of incremental capacities in PVC and HFFR added during financial aid 26, which had limited operating time during the year. Turning to our balance sheet, we continued to maintain a strong and resilient financial position. Our net worth increased to 1,013 crores, reflecting a growth of 179 odd crores over the previous year and underscoring our disciplined approach to cash flow management. During financial year 26, we incurred a capital expenditure of close to 100 odd crores. Looking ahead, we plan to invest further 175 odd crores in financial year 27, primarily towards expanding our XLP compound capacity with investments earmarked for our diversification into base as well. We are pleased to propose a final dividend of 1.25 rupees. Thank you for having our commitment to delivering consistent returns to our shareholders. With this, I end my remarks and now open the floor to present.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 or your question will tell you. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes on the line of Archana Gooding with IDBA Capital. Please go ahead.

Hi, sir. Thank you for the opportunity and congrats on good set of numbers, decent performance despite the challenging times. So, three questions. Firstly, in the opening remarks, you spoke about 13% revenue growth and 15% volume growth for FY27. So, is that we are expecting some NSR kind of degrowth over FY26? Any challenges on that front, sir?

No, what we have done is we have considered the average realization for the current year as the base prices because in the current year there has been multiple cycles of When the war situation neutralizes. So, we have considered the same NSR which we have achieved this year. Though, for the current first quarter, the average NSR will be much higher as compared to what we have taken on a conservative basis.

Okay. Okay. 30% growth in export is pretty commendable. So, can you help us understand how was the performance in Q4 and how were the first two months of Q1 of FI27? Do we see any negative risk to the business in terms of export?

See, as far as the actual scenario is concerned, I can comment on the month of April. We have done reasonably well, and the concern is... in the month of March due to logistics issue. A lot of those consignments have been transited in the month of April. So on nutshell, I can say you the average volume in exports have gone up on a month-on-month basis.

So, you are saying that March was the kind of the lowest and then things have kind of improved for us, right?

Yes, yes.

Okay. And so, for this other income in Q4, there has been substantial jumps. So, what contributes this other income, sir?

Actually, it's mainly the M2M gain with regards to the debtors and all. So, there are two different reporting parameters as far as India's is required. And everything is reported as other income, which is close to 10 crores, whereas with regards to the forward contracts and the imports, it is reported in the other expenses, which is close to 11 crores. So if you knock off, the net impact is 1 crore.

Right. Understood. Maybe lastly, if I may, so this inventory and receivables have gone up at the end of FY26. So, is that some contracts are still to be fulfilled, or how exactly the numbers are there?

So, since we have highlighted already, the average raw material prices have gone up substantially. There is a steep increase in the prices, close to 50 plus percent. So, now, that is the impact of that only. If you see, if I even consider 50 to 60 percent price increase, last year we had an inventory of close to 50-odd crores. And if you pull out... And even that, then also the current inventory is comparatively comparable. And same is the situation where debtors are comparatively on a more controlled level.

Okay. Understood, sir. So, thank you so much and all the best, sir.

Thank you. Next question comes from the line of Bhargav, Buddha Day, with Ambit Capital. Please go ahead.

Yeah, good morning, team, and congrats on a good set of numbers. Sir, my first question is that in your guidance, you mentioned that you are not including the revenues coming in from BES. Any particular reason why we are not including BES?

This is the first year for us, so there will be some ramp-up time which will be required to stabilize the production, and that is why as far as revenue guidance is concerned, though we consider it will be in the range of 200 entrepreneurs of revenue, however, for revenue guidance, we haven't considered anything.

And at what levels can we break even in this business as a separate unit, BES?

Will the revenue be anticipated for this year? 200 plus croissant revenue will be a good break-even point.

So there won't be many loss as such in FY27 from this. Secondly, sir, obviously, we got the benefit of price ics in the month of March, given our inventory. But in April, is it fair to say that we've taken the full price ics or it is happening on a calibrated manner?

So, in the month of March also, we have played a, I will say, balanced approach. Wherever we had inventories, we have committed to our orders, and wherever... I think the new orders were taken at an average better rate. I think Kuthariji can add much better to what I can add.

See, in the month of March also we were able to pass on the increase to a great extent, and in the month of April also means March was the worst performing month if you look at... What you call a pass-on effect is concerned. So, we don't think that April will be worse than March. It should be probably better than March.

No, because in March, we would have low-cost inventory, but in April, obviously, inventory purchased in March would get sold out. So, in April also, we have taken price hikes or...

Yeah, we have taken price hikes starting from the March itself. Okay, so, even for the contracts... Okay, which we were holding in hand and whatever the shortfall was there for the inventory, there also we have been able to affect some price impact, price hikes, and customers have accepted looking at the situation. So March, of course, means the full price hike was not available. So March, there was an impact on our profitability from the pass-through point of view because the inventories, when we talk about the inventories, there are two kinds of inventories. One is there in your hand. Another is the orders which are in transit. So, what happened is that in the month of March, the cargos which were supposed to come in the month of March, they didn't arrive at the low price. So, you have to buy at the spot price which was higher and we passed it on to the customer to some extent. So, March, we took some hit on account of buying something on the spot. But the advantage of held-up cargo coming in the month of March…

And lastly, on the export side, if you can spend some time with geographies, you are incrementally seeing demand post the war situation. Any particular country where we are gaining significant market share post this Iran war?

No, all markets have contributed well up to Europe, I would say, because it had not impacted, means, demand sales point of view. Latin America and North America has not shown any growth, but rest of the world, say, MENA region mainly, Middle East and North Africa, has contributed strongly to our numbers.

I know, so there we are seeing business. It's not that the business has become negligible.

No, no, no, no, no, no, no, no, no, no, no, no, no. There's a business is strong.

Okay. Great, sir. Thank you very much and all the very best.

Thank you. A reminder to all the participants that you might be a star and one to ask a question. Next question comes from the line of Jainam Kilani with Svan Investments. Please go back.

Hi, sir. Thank you for this opportunity. So, my first question is that currently overall, you can witness that government is decreasing its spending, which could impact infrastructure. So do you see that this could dampen our demand for wires and cables and thus have further pressure on us and have pressure on our working capital because of delay in payments?

This industry is connected with the government spending, but over a period of time, we have seen that this industry has diversified, means the cable producers today are not only dependent upon the government spending on infrastructure projects, because solar and all activities are equally done in the private sector. Solar installation is done with an equal intensity from the private sector players, be it Adani, be it Tata, be it JSW, be it Reliance. So that is continuing to generate demand. That is one part. Second is, of course, one may assume that government spending will go down, but again, government has to prioritize where to spend. And looking at the energy disruption, energy sources disruption, the government is putting even more vigorous effort. On renewable side, that is second. Third, we might have all seen that the peak demand for energy during the summer season is going to be a big challenge, and for that, a lot of efforts are being made to keep our grid and the distribution system in a healthy manner. So all these things are going to support the demand for wire and cable industry, and on top of that, the demand for the reconstruction. And demand for keeping the safety stock of all critical capital goods items, the cable demand has gone up in the Middle East and North African region, the regions which have been affected very badly by this war. So we do not see any impact on our demand or our financials or our cash flows because of this perceived cut in the government spending.

And so we are guiding volumes of 2.3 lakh for F527, while our capacity would almost be 3.3 lakh tons. So are we trying to be conservative or are we expecting some headwinds during the year because of which we are giving a lower guidance?

So, capacity addition is being done in the spurts because, say, for example, in Bwadi, we put up a capacity of 48,000 tons, knowing fully well that 48,000 tons will not be consumed or cannot be sold out in one year's time. But you cannot, because there is a scale with regard to your equipment and installation, this and that, to achieve that scale and to give the mass to that particular unit, we have gone ahead with the capacity addition of 48,000 tons. We should be able to utilize maybe the next financial year means 2027-28. So because of that, you'll see a little lower capacity utilization against that capacity utilization. And as Ariant also said in the opening remark, That this year, capacity addition versus the utilization might seem low, because much of the capacity has come up in the last, say, three, four months' time. If you look at the total capacity of 315,000 tons, you will see 80,000 tons has come up in last four months.

Would it be fair to say that in FY28, we assume volumes of almost 2.7 to 2.75 lakh, or that is a bit on the higher side?

If we are saying 2.3 this year, so 12 to 15% jump for that year also, which will take it close to those levels.

Okay. Got it. And, sir, for our best project, have we signed our approach to new clients? Or as of now, that would be post the commencement of the capacity itself?

Tivariji is here, though. I would just like to add, though Tivariji can give it a better shot, we have started approaching customers, we have started discussing with them, we have started to understand their requirement, and in a lot of areas, we are discussing on the technical front as well. Tivariji, if you can add a couple of sentences.

Hello. Good morning to all of you. This is Rakesh Tiwari, CEO of Dev Clean Energy. We had already discussed with all the tier 1 developers in India, including Sterns and Enrich and Orange. So this customer, we already started to present, and demand is high, and just we started to have their quality parameters, validation, quality supply chains, all the documentation need required. So we had submitted all the documentation to validate by the supplier quality audit point of view. So, next couple of months, they will see this our factory readiness, and after factory readiness, we'll sit together and we'll sign MOU for a long-term supply in the gigawatt-hour scale. Our is not only container and our base container with our solution. So we are working for all these sectors where this grid is unstable and government is mandatory that you have to put solar plus renewable energy sectors. So solar cannot be put across the country without energy storage system. So, we already discussed with this, all these developments are running from 20 years in solar sector. So, this is my remarks. If you have any particular questions, please let me know.

That's it from Michael, sir. Thank you.

Thank you so much.

Thank you. Next question comes from the line of Varun Singh with Alpha Accurate Advisors. Please go ahead.

Yeah, thank you for the opportunity. My first question is regarding this battery energy storage system. I think in the PPT, you called out some 200 crore rupees of investment, and over and above this 175 crore, we are supposed to outlay for the compounding capacity expansion. So net net around 375 or 400 crores would be the total cables for FY27. Is that understanding correct?

No, no, no. Let me correct you. Total outlay for this financial year is 175 crores, including BES. And out of the 200 crores of BES, there is a phased manner of implementation which will be happening. So this year we are allocating close to 70 plus odd crores for BES.

So, I see. So, 70 crore for this and the other 100 crore would be for the capacity expense. Yeah, understood. And when you said that the initial EBITDA margin are big, 5-8% lower than the poor compounding business. So, I mean, this means what? The EBITDA margin would be just 2-3% in FY27 in this segment?

What best? A couple of minutes ago. Do 250 odd crores. So, margins. Good morning, everyone. In FY28, we should expect maybe around 10% EBITDA margin. We are expecting around 300 to 500 crore revenue in the financial year 27, and maybe a neutral pad. But in FY28, that 900 crore revenue should contribute minimum maybe 80-90 crore to EBITDA. That understanding is right. Right, we are targeting one gigawatt hour still in close to 800 to 900 euros of revenue, expecting EBITDA margins of 10 plus. Basically, I think it is something.

Understood. Sure, sure. Okay. Thank you very much and wish you all the best.

Thank you. A reminder to all the participants, I do my best. Dharan wants to ask a question. Next question comes from the line of Nikun Chitoshi with Bay Capital. Please go.

Yeah, I just wanted to understand a bit more on the battery energy storage system project. What are the raw materials? How are they sourced? From where they are sourced? And are there any challenges in sourcing of the raw materials and supply chain?

Yes, sir, actually, we already identified with our suppliers, mainly like lithium cells and other components like enclosure and harness, DC cables, sensors, cooling system, liquid cooling systems. So these are the major things. We need to make a bad trip and we can make our container also. So total, total, total vendor is very limited and number of vendors is too much across the globe. We have already identified and we already visited to all the suppliers, their abilities in terms of financial, in terms of quality, in terms of their long durations, reliabilities. And so we already identify each and everyone's supplier. So regarding the sourcing point of view, we make sure that all the suppliers should not be any hampered with our production and which we can achieve our targets. So we selected the supplier based on their quality, the commerce, and their delivery time, and of course their tier 1 financial ability so that the supplier can continue to provide the services year on year for a long time. So, these are the typical which I just mentioned, like our lesson and enclosure. Harness system, DC cable, DMS, the main core component, which are in the energy storage system. So we already identified and logged this our supply sourcing for a longer period of time. Thank you so much.

And is there any approval cycle from the customer side once you supply this storage system? Is there any process for getting this approved and is there a time cycle related to that? Yes. Because when the regular supply starts or something?

Yes, yes. So, so, so, so, so, so, so far that we already mentioned in the last questions, which are asked with someone, my friend, and these, these are the pro system is mandatory in a better energy storage system, like a solar, because the better energy storage system is a reliability product. It cannot be for the one year. It is like a, these are the reliability customers, is a validate, your factories, your, Your products, and whatever the reliability test is mentioning, like a charging, discharging, IP test, water test, heating test, pack test, so these tests are mandatory, and these tests are mandatory based on what? Because they ask about the certification, certification IC6 to 777-9540A, 9540, even 38.3, so these are the base guidance, the developer follow the ISPR IC standard, So, because as per IC standard, it is higher and higher and safety concerns. So, they are validating from documentation to reliability each and every parameter. So, we started to discuss and we already submitted what we have and what we applied for this longer period for certification and all the things. So, it takes around three to six months, minimum three and maximum six months to go down to any big developer. So we already started from the before three months ago. So those data we have available, we already submitted and those we are under process like a factory audited and the certification will process and will submit it in couple of months. Thank you so much.

So we don't expect any delay in supplies because of this approval cycle or anything. So whatever we have assumed for next year, we are confident that we will be able to deliver, right?

Yes, sir, so that's why we already started to follow the process with all the developers, because they have a long and long period of validation from factory readiness to documentation. So we are parallelly working on that so that we should not abide, we should not be surprised when our product starts to sell in the market. So before that, we will submit all these necessary documents to the developer and get the developer approval from that. Thank you, sir.

And regarding the Polymer business, just wanted to understand you guided for 11% EBITDA margin, which is almost same as the FY26. So are we not expecting any operating leverage on the margin for FY27?

Arihant, maybe our CFO, Mr. Arihant, will reply for this question. Arihant, over to you.

So, oh. We have already seen So, we don't want to have, you can say, aggressive estimates, which may be difficult to...

Thank you very much and all the best.

Next question comes from the line of Arya Shah with the Whitestone PMS. Please go ahead.

Hi, am I audible? Hi, thank you for the opportunity. I just wanted to understand the HFFR and XLPE market. So basically, who is our competitor and what is the entry barrier and are we the biggest player there?

HFFR is a kind of a product, the XLP is a kind of a product which is used for the cable. I think for this discussion, it might not be the appropriate... Because for this, you need some graphics and something like which we can explain that what is the cable and what is the role of the conductor. Conductor carries current and the insulation compound is insulating compound over a conductor and then HFFR is executing compound to protect the entire system against fire, against the hazardous conditions. And as far as the competition is concerned, in XLP, we are the largest player. We are having major market share. So, in XLP, the competition is from overseas players like Dow and Borealis. Now, the low-voltage sireplus segment, they are a couple of Indian producers like KJ Polymers. And in HFFR, Shrakun Polymer is there, which is now part of Orbea Group from Mexico. They are our competition. And as far as the entry barrier is concerned, it is as... It means it is a very critical and reliability-related product. So proven performance is the biggest entry barrier. Those who are performing for a long period of time will gain business. Somebody coming up with a capacity instant and trying to secure the business, it is not something which is possible. You have to go through the approval cycle, and even despite going through the approval cycle, once you are approved, then you have to establish your performance over the period of time to become a leading and reliable supplier.

Okay, and so we're not seeing any import pressure from China or anything like that for these two compounds, right?

No, see, China import pressure direct or indirect will always remain in every segment, but our scale and our capability is quite strong, and we are able to face it off without any challenge.

Okay, so my next question is about the, so basically there is a price volatility going on right now. So we still operate at a fixed EBITDA margins of Rs.14 to 15 per kg or it has changed?

Yeah, we are able to pass through the price increases, which means we are able to maintain our fixed margins per kg basis.

Okay. And, sir, also I wanted to understand that are we supplying to any data center, cable operator, or an optical fiber, something like that in those segments?

See, the data center, because we are supplying to the cable producers, and they are in turn supplying to data centers as well as for the optical fiber application purpose, but for this optical fiber, our product application is limited, but for data center, of course. Our products are used by cable producers. Every cable producer is using our product for the cables being supplied for data center.

Okay, thank you. Okay, thank you. That's it.

Thank you. A reminder to all the participants that you might be a star and want to ask a question. Next question comes from the line of Sheetha, Central Asia, Sapphire Capital, Piscoville.

Yes, hello. Thank you for taking my question. So, I had a question on the ramp-up of BEST that we are going to do. You mentioned that this year we can have around 200 to 250 crores of revenue from that, and then in FY28, we can go up to 1 gigawatt hour. So, beyond that, since we are going to add 5 gigawatt hour in total, are we going to keep adding 1 gigawatt hour per year, or how is that going to be? How is the ramp-up going to be?

So, it is more dependent on the forward strategies which we take, dependent on the first gigawatt sold in the market and in the market dynamics. There are multiple opportunities in the market. There is opportunity for Solar Plus base, there is opportunity for standalone base, there is opportunity for data center batteries, and there are opportunities for CNI as well. So, as we move into the market, we will slowly and gradually pick each segment. Smaller proportion wise. And that is how we will at the next stage decide which segment to be ramped up faster. So as of now, it seems utility scale, solar plus base and standalone base are direct segments where the supplies can be going faster. Whereas CNI and data centers are area where the product is much more complex, but it entails a very good margin. So we will be having a mix of both and slowly and gradually ramping up the capacities.

Just a clarification, am I correct on the fact that in FY28 also you mentioned we are assuming 15% volume growth over the base of FY27?

Yes, FY26 base to 27 or 27 base to 28? What is the exact question?

In FY28, we are expecting 15% volume growth on the base of FY27. Am I correct? Yeah, yeah.

See, Aryan, this question with regard to polymer compounding, so we are expecting 15% volume growth over what we achieved in 2026-27. Means if in 2026-27, if we are targeting a polymer compound volume of 230,000 tons, Then, in 2027-28, you can add on another 15% on the 230,000 terms.

Okay, understood. Thank you.

Thank you. Next question comes from the line of Phishis Javadi, CBA Asset Management, Managers LLP. Please go ahead.

Thank you for giving the opportunity. The first question is, what is the general price pass-through lag which we take into consideration, which is the price volatility, and how do we tackle the fixed-price contracts?

Arian, you will answer or should I? Please, please, please. So, can you please repeat the question? I couldn't get the question clearly.

Okay. So, the first part was that whenever there is a price hike or drop, what is the pass-through lag? Do we immediately pass-through or there is a lag that is felt on the books?

Yeah, see, mostly it is a lag of 7 days to 15 days, but again it depends upon the intensity of the price hike. For example, the price hike is less than a percent, okay, then 7 to 15 days lag is there. But if price hike, as we have seen, which was very volatile and very aggressive price hike in the month of March, then the pass-through was instant.

Okay, and how do we tackle the fixed price contracts, for annual contracts?

No, we don't have those kind of annual contracts. Maximum cycle of the contract, what we have, and that is for mostly export, and that is around, say, you can say maximum 90 days, and there also we have back-to-back import bookings. So that kind of open-ended contracts are not there.

And, sir, given the disruptions in the export market, how do we see exports panning out in Q1 as well as for the full year? What is the export growth guidance that we are commenting on?

See, first quarter visibility is already there. So we say that first quarter will see the continuity of the growth which we have seen in the last quarter. And projecting at this point of time with this kind of geopolitical uncertainty for the second or third quarter would be a little bit of a challenge. But the important factor is that we are having so many approvals and reached to so many markets for so many years. So we are confident that we will continue to do well, but putting an exact growth percentage would be a challenge, but we see that our core market, which is MENA region, is growing, and also some parts of Europe, they are growing very well. So we are confident of maintaining the growth momentum.

Okay, so thank you and all the best.

Thank you. A reminder to all the participants that you might have a star and want to ask a question. Next question comes from the line of Apoorva. With A and S well, please go ahead.

Thank you, sir, for your opportunity. So, my questions are on the compound manufacturing side. What are our major raw materials and from where do we source it, like whether we source it from domestically or do we import, and is there still an availability issue, and how much the price movement has been there?

So we source from both domestic and import sources. In domestic, we have all the big petrochemical players as our suppliers. Similarly, on import side, we rely on a lot of big players in the Middle East as well as in European countries. And there were issues till, I will say, mid of April, where the supply constraints were there. However, today, the supply is more or less normalized. In India, we are getting sufficient material. And the prices have gone up beyond 50 percent inflation, and now the prices are comparatively stabilized, and now not much, you can say, volatility is there in the prices, unless and until there is a price, this war is...

Sam, my next question is, how is the demand currently because of the spike in the prices, right? So, are we getting sufficient orders right now, and is everything being normal because of what, or do you feel this might continue?

As Kothareji highlighted earlier, that cable manufacturers have diversified over a period of time, and now they have sufficient demand, not only with regards to government, but private demand, private capex as well. So, we are getting sufficient order book and there is no lag as far as the booking is concerned.

Okay. Can I say my last question on the industry side? So, sir, do we possess risk of our clients going backward integration and our clients doing compound manufacturing as well?

Yeah.

See, it is a risk which is attached to our business. And it will always remain that customer can go for backward integration. But again, it is the effort versus return every customer has to look at and the scale at which they can beat our size and the scale. Then only they can think of and then you need to have the skill and scale both. And that is where we are finding that for last so many years, sustaining with this risk of backward integration, we have continued our journey and we continue to grow. So, yes, theoretically, this risk is there, but we are doing everything possible and within our means to mitigate that. That is by increasing our skill and adding product range, which is not easy for somebody to go and do the backward integration.

Got it, sir. Thank you. All the best.

Thank you. Next question comes from the line of Arya Shah with Whitestone PMS. Please go ahead.

Thank you for the opportunity once again. So regarding BES, what exactly are we doing? So basically, are we going to import cells from China and then assemble here, or what exactly are we doing on the BES cell?

Yes, initially for the initial period, we are going to import it. Backward integration or domesticization of many components which are easily available in the country. Still, as of now, we don't have sufficient capacity in the country, and it will be imported for the near future.

Basically, it's an assembly line on the best side, right?

Yes.

Okay, thank you and all the best.

Thank you. A reminder to all the participants that you may pass star and want to ask a question. Next question comes from the line of Yeshwan, an individual master. Please goodbye.

Yes. Hi, good morning. It was a good set of numbers, but I have a question on BESS segment. So, actually, in the BESS segment, the management has confirmed that it is going to be an assembly line. The actual IP lies in energy management system or battery management system, right? Are we planning to even import that product or are we going to have our own IP on those things? What is the plan right now on those things?

Thank you so much for your concern and it is very important question regarding BMS and EMS. Yes, in future, we are going to make our own BMS and own EMS. We already started working on that because EMS will be restricted. After one year, they are going to start the EMS must be from India. So, we already started to work from EMS. EMS concern is for AC side of the DC block. So, but for BMS, definitely will have to import from China, initially from tier 1 supplier, because the hardware part of is available only in China. And few made in India, they are started to develop BMS in India. Meanwhile, the government of India is allowing you can import BMS from China. But BMS, you must start developing made in India. So because BMS is the core of the battery energy storage system, and so the government does not want to any risk to is like it is not available in India. Yeah, so the route that you can, you can perform. I am just explaining about BMS. BMS is the core bone of battery management systems and without BMS, EMS cannot get any information from the battery side. So BMS definitely will, starting, we will buy from Tier 1 supplier from China, but in futures, in the couple of months, we will have our own IP of BMS and EMS both. This is our future plan, but initially, we will start from China.

Okay, so what is the plan for working capital requirements as in the call you have mentioned that it will be in a single digit margin, right? And if the revenue expectation is about 800 to 900 crore for 1 gigawatt, if it is 5 gigawatts in future, how are we going to fund the working capital requirements for BSS projects?

So, for the first phase of 1 gigawatt hour, we have plans that the total working capital requirement will be in the range of 200 to 250 odd crores, and we have sufficient limits available with us for that funding the same, as well as the margins for them are also similarly available with us as a free flash flow. As far as the full 5 gigawatt hour capacity is concerned, definitely will work out and think of increasing the cycles. Thank you.

Thank you. Thank you for all the information that you have provided. We actually look forward to do something in India in the future on the manufacturing side as well, apart from assembly. Thank you.

Thank you. Next question comes in the line of Alok Vakil, and the individual matchup is for you.

Hello, am I auditing?

Yes, you are.

So, in XLP, we have reached up to the capacity of 132 kVN, 66 and 132. So, what about further 440 and all, we think that there have been compounding of...

So, if you see each and every high voltage cable stabilization take times as well as the next voltage stage will be requiring a lot of certifications for which the life time, the life required is minimum 3 to 4 years time. So, right now, once 132 kV stabilizes in the Indian market, we'll start working on 220, which It's expected to take around three to three and a half years minimum for getting the certification and then the testing period. So we anticipate four to four and a half years. So we have targeted 2030 for our 220 kV cable compounds, whereas 440 will take further time based on this.

Okay. And what about HVDC side for this solar and wind and all?

Thank you.

Thank you.

Yeah, again, HVDC is for the higher voltage applications mostly. So, these are the products of the future, and globally, if you look at, there are very limited players in this segment. So, of course, we'll attend and manufacture these products, but not having any concrete plan at this point of time. At this point of time, our plan is highest is up to 220 kV by year 2030.

Okay. Thank you. That's it. Thank you.

Thank you. A reminder to all the participants that you must start and want to ask a question. Next question comes from the line of Apoorva with ANS. Please go ahead.

Yeah, thank you, sir, for the opportunity. Sir, my one question was, what is our material, if you can name few?

For polymer compounds?

Yes, yes.

The polymers, whether that is polyethylene based polymers or polyvinyl chloride based polymers.

I mean over a compound manufacturing business, right? Okay, and sir, and what percentage of do we import the raw material?

Right now, we are importing close to 10 to 15% of our requirement as an import.

Okay, thank you, sir, that's it.

I think that was the last call. We have already 11 o'clock.

So, ladies and gentlemen, as we have no more questions, we have reached the end of question and answer session. And now, I hand the conference over to the management for closing conference.

Yeah, I want to thank everybody for the participation. And as we all know, in such global uncertainties, we still manage to perform and match the projections. So that is testament to our efficient business model and core competencies. But as we all know, like with all challenges, there also come opportunity. So just like after COVID happened, we saw a lot of growth opportunities in the export sector. So even now, because of the disruption in supply chains globally, this is also presenting a good opportunity for exports as well. So as we are seeing a good increase in the number of queries coming in from new export customers and new geographies, so that we also see an opportunity there. And as the team also highlighted, the emergence of renewables. Along with the existing infrastructure transmission and distribution networks also provides us a good opportunity where we will see robust demand with the combination of the existing platform and the renewables and machines of renewable sector as well. So we are very positive on our growth trajectory, and we will continue to work best for all our stakeholders.

Thank you. Thank you. On behalf of DDAF Plastic Limited, that concludes this conference. Thank you for joining us. You may now disconnect your mind.