Good evening, everyone, and on behalf of Elara Securities, we welcome you to the Q1 FY27 earnings conference call of Amara Raja Energy & Mobility Limited. On behalf of the management, we have with us today Mr.

Y. Delli Babu, Chief Financial Officer, and Ms.

Swajitha Rapeti, Head Corporate Finance. I would now like to hand over the call to Mr.

Delli Babu for his opening remarks. Over to you, sir.

Swajitha, you can go ahead with the opening remarks, please. Yeah.

Good evening, everyone. Thanks for joining the call.

Maybe I'll give a brief about the Q1 performance first, and then we can move on to the Q&A session. For the quarter ended June 30th, 2026, we have achieved a robust growth of around 24% on consolidated basis with revenue of around 4,215 crores with about 95% of the revenue coming from lead-acid business, which grew by around 22%.

The new energy business grew by more than 70%, recording a revenue of around 209 crores. Our revenue growth has remained strong, driven by sustained volume momentum in both aftermarket and OEM segments.

We continue to strengthen and deepen our market position in automotive and home energy sectors. Four-wheeler and two-wheeler aftermarket volumes have grown by around 15%, and OEM segments continued to retain the volume growth momentum of around 24% in four-wheelers and more than 35% in two-wheelers on YoY basis.

Further, we also delivered growth of more than 50% in home energy business, both on the tubular batteries and home UPS. During the current quarter, our tubular manufacturing plants operated at 100% capacity.

However, we continued to supply traded batteries also for meeting the excess demand. The trading revenue in the current quarter stood at around 15% of the lead-acid battery revenue.

Our automotive international revenue degrew by around 20%, owing to significant volume drop in the Middle East market. We are expecting to recover these volumes in these markets in the subsequent quarters.

The revenue from industrial lead-acid battery business grew by around 2% on YoY basis. The volumes in UPS batteries have grown by around 10%, though the telecom lead-acid batteries continue to degrow due to its migration to lithium-ion sector.

Lithium-ion telecom volumes grew by around 50%, and during the quarter, on a combined basis, we maintained market share of over 60% in telecom segment. New energy business during Q1 continued to deliver strong performance with revenue growth supported by increased demand for telecom packs and three-wheeler packs.

Both EV and telecom packs have demonstrated volume growth of more than 50% on YoY basis. Further, we are happy to share that we have inaugurated our customer qualification plant with multi-form and multi-chemistry capability in July '26.

E-Positive facility, which is our research facility, is also expected to commence operations in the current quarter. Both the first Giga cell and BESS 10 GWh factory are on track and expected to commence operations as per the timelines indicated earlier.

During Q1, the standalone EBITDA margin is around 10.1%, and consolidated margin stood at 9.6%. The margins were impacted during the current quarter due to elevated material cost, increased spending on brand promotions, and strategic initiatives, namely Amaron Access and Factory of the Future.

Continuing our long-term plans to strengthen our market position at strategic level, we made couple of long-term investments in our manufacturing excellence, organizational capability, and in our brand promotions. The moderation of Q1 operating margins at standalone level reflect these investments.

As communicated in our earlier earning call, we have launched Amaron Access during Q1 FY27 in Hyderabad, a pilot project focused on providing automotive services to B2C segments, deepening our customer engagement. Based on the learnings from the pilot, we will formulate our long-term plans on this service business model.

Further, to strengthen our market presence in B2C segments and improving our brand equity across all product segments, we've invested in brand presence during various events, including IPL, which also led to some moderation in the margins during the current quarter. The other reason that contributed to margin dilution is on account of expenses incurred for improving our manufacturing excellence by way of capacity enhancements in our existing automotive plants.

These costs will add to the manufacturing competitiveness in near future. Higher expenses on these strategic initiatives during the quarter led to a margin moderation of around 0.9%.

The other important factor which also led to the moderation in profitability is a significant increase in the procurement cost of alloy, sulfuric acid, and poly. We did took some price increase during Q4 FY26.

However, subsequently also the procurement cost for sulfuric acid and poly have risen substantially during the quarter. To absorb these costs, we took further price increase of around 3% in June, which helped offset a portion of these cost pressures, although not entirely.

Additional price increases of around 2% to 3% will be rolled out during the current month. The above raw material price increases also led to increase in warranty provisioning and further incremental costs during the quarter led to some margin dilution, freight cost.

At consolidated level, the margins are lower by around 0.5%, which is around 9.6%, which is primarily due to the additional cost at new energy business towards our upcoming Giga 1 plant and BESS plant. During FY27, we estimate to spend around 1,700 crores towards our capex projects with major outlay towards our new energy business of around 1,300 crores and rest of it towards our lead-acid business, including recycling capex.

This capex outlay is majorly towards our upcoming Giga 1 plant, which is expected to commercialize during H1 FY28, and towards other projects, including BESS 10 GWh and E-Positive plant. Out of the planned 1,700 capex outlay, during Q1 FY27, we have spent around 450 crores with major outlay towards new energy business.

We also like to inform you that on July 18, 2026, Andhra Pradesh Pollution Control Board revoked the closure order issued against the company on April 30, 2021, and the company has withdrawn the writ petition filed before the Honorable High Court of Andhra Pradesh. With this, now we can move on to the Q&A.

Good evening, sir. Just on the gross margins, wanted to understand what are the price hikes we have taken in Q1 and what kind of cost pressures we are facing now?

Have we been able to recover most of the cost pressures? See,

as mentioned by Swajitha, we have taken price increase of around 3% in Q1, and then with the kind of jump that we are seeing in some of these raw materials, they could not offset it fully. To further additionally this quarter, we will be taking around 2% to 3% further price hikes on across product segments.

If the current prices were to stay where they are, this might be sufficient, but we are continuously seeing increasing trends both on the particularly on the poly side and sulfuric acid and also some of the alloys like tin, etcetera, are showing further tendency to increase, but we have to wait and see how those price levels will prevail and take those decisions regarding price at an appropriate time. The B2B segment will continue to the price hikes in B2B segment will get delayed because these negotiations have to happen with various B2B customers.

To that extent, there could be an impact that we may have to see, but mostly likely we should be able to pull this back in the if not fully in Q2, in the in the next quarter, we should be able to do it, yeah, please.

Thanks, sir. On the other expenses also, are there any items which we can say are non-recurring because other expenses growth has been higher than the revenue growth?

Just trying to understand that.

Again, as explained by Swajitha already in the call, some of those initiatives particularly on the brand promotion will continue for some time, but I'm sure over the next couple of quarters, they'll come back to their normal levels. Also the provisioning that I need to do for warranty when the underlying product costs increase, I also need to carry those provisions for the entire unexpired population, so that also kind of becomes a one-time hit on the P&L.

If the fuel cost were to persist from here also again with the geopolitical issues, then that cost is something might recur in the next quarter as well. Beyond that, the other costs are all in line with the volume that has gone up because substantial tubular volumes that what we have seen in the last quarter because they are bigger batteries, we need to incur higher freight costs.

Rest of the costs are growing in line with the volume throughput enhanced during the last quarter.

Yeah. Thanks.

Just one question I had on the BESS business as well. If you could just outlay what kind of asset turns we can expect and what kind of capex requirement will be there and margins, in what band will be there?

There is heightened competitive intensity also it seems in this segment. If you could just talk of what will be our competitive advantages here, how you are thinking about it?

See,

the initial capital outlay for the BESS project could be in the range of 250 to 300 crores. Then its capacity will be around 10 GWh.

With the current based price at the containerized solution level could be anywhere between $100 to $120. Asset turns-wise, it will be definitely higher.

Operating margin-wise, it might mimic the way the current pack business is doing, around 5% to 6% or 6% to 7% kind of level. As we localize more and more components, the margin profile might change a bit.

Still it'll continue to have that kind of operating margin levels of about at best margin could be around 7% to 8%, and the conservative margin could be around 5% to 6% could be the possibility. As far as competitive intensity is concerned, I think this project should also over a period of time help us bring the cell production into the country.

I'm sure in line with government's support as well in terms of localizing the supply chain for these BESS systems, it would augur well for us to establish that customer relationships for all these products and eventually leading to our own cell localization required for this BESS program. We have to think long term, and I'm sure the increased demand in energy storage requirements in the country not only at the grid level, but also at the C&I level will definitely help fill this capacity, and then it should also feed in well for our cell program expansion.

Sir,

this will be LFP, right?

Yeah. It will be an LFP.

Right now, people use 314 Ah cell, and there can be suitable modifications in future, yeah.

Sure. Thank you.

I'll come back in the queue.

Yes, hi. Thanks for the opportunity.

Just going a bit deeper into this other expenses and the 0.9% hit which you called out, which is around 35 crores, can you just provide a broad split between these costs for the brand presence, warranty, freight, and doing one manufacturing processes, please?

I think overall number is already given. It is split between the brand promotion activities and the Amaron Access pilot project and also some of the Factory of the Future that is basically enhancing the throughput across our manufacturing plants where we are doing certain initiatives.

From an accounting parlance, though the throughput is enhanced, I cannot capitalize them. I need to treat them as revenue expenditure.

Those are the three major initiatives which have caused higher increase in the expenses, apart from the warranty expenses provisioning that I have told and also other power and freight-related expenses owing to the volume increase what we have seen in the last quarter.

Okay. Got it.

Just a broader question as a follow-up here. In the last few years, our other expenses as a percentage percentage of sales used to be somewhere around 12.5%.

This has been, going up and obviously there have been multiple cost increases including power and fuel as well. Where do we see this stabilizing say over the, next few quarters?

Can this come down to 13% or, should we expect some elevation?

Because, see, some of these initiatives are big ticket items. Once we stabilize our promotion expense and all these upgradation of debottlenecking expense we are incurring on the capex, I think we will see a reducing trend.

There are a couple of expenditure like freight because of the higher fuel costs that we are currently having and also the warranty expenses because of higher raw material costs that what we are seeing, these things will come down only when the bottom cost drivers actually come under control. Otherwise, the other expenses what we are looking at, whether it is in terms of employee cost or admin expenses, etcetera, they will continue to be under moderation as we go ahead.

These exceptional items which I am seeing now will get reduced once these projects are fully done.

Okay. Got it.

Sir, second question is on the whole EV and lithium-ion business. Firstly, have we received equipment for the 2 GWh NMC line?

I think last quarter, you mentioned the order has been placed. Just wanted to understand the current status.

They are due for delivery in Q3.

Okay. Got it.

Just a follow-up here, the BESS facility, how do we see this ramp-up happening? Do we have customer commitments?

What is the utilization level going to be like assuming that this get commissioned over the couple of quarters?

See, initially I think there are enough visibility with the major EPC players who are actually installing projects for various power generating stations. There is a reasonable order book that we are seeing in India itself, and it may also throw some export opportunity as we move ahead in other markets as well.

I don't see a major challenge of maybe within a period of about 6 months from the time the factory is completed at least getting to a level of 5 GWh kind of a utilization. From there, it depends on how the market moves from there.

The capacity can be made up because the line capacity itself is at a 10 GWh. That's the reason we have gone ahead with the 10 GWh line capacity.

I think we should be able to ramp up considering the way the requirement on the solar energy is growing in this country.

Great. Thank you, sir, and all the best.

Thank you, sir, for the opportunity. Just first to clarify, on the BESS here you mentioned in next once the plant starts, within the 6 months we can ramp up the utilization towards 5 GWh.

Is it right, sir?

Because depending on how we seed the market and then what kind of order flow that we see, our belief is within about 6-7 months, we should be able to ramp it up that level. Thereafter, it's a question of how demand moves from there.

Got it. Got it.

That much order is backed with that capacity?

No, I am saying based on the market demand what we are seeing today, there is a possibility that we can reach that kind of level in a span of 6 months or so because of existing various order book that we are seeing in this country, and we also should find a way to seed the market in other geographies as well so that we increase the utilization level and also keep them consistently growing.

Perfect, sir. Thank you for this.

Sir, this quarter there was a trading mix of around 15% of the revenue. I just want to understand how this trading mix will go ahead and how much was the impact because of that in this quarter?

Also just any update how this new tubular and recycled plants are supporting margins, sir?

See, as far as trading is concerned, this quarter because we had a big tubular season, which is where our tubular plant, as Swajitha was mentioning earlier, we are fully using the plant, and in addition we had to do the trading of inverter batteries and also the Hups systems. That's where being a tubular season, the trading revenue percentage is higher.

Naturally at the gross margin level, the trading will show a dilution on the gross margin because you've incurred the manufacturing cost also as a purchase of stock-in-trade. Now whether the same percentage revenue will continue in the subsequent quarters may not be because now in the subsequent quarters, the tubular requirements will be met from our own manufacturing plant.

The second part of your question, as far as recycling is concerned, the battery breaking operations is still in the trial production, and also recently the way the scrap prices in the country have moved substantially higher, right now if you do a purchase of scrap and then reprocess the lead, the costs are almost either equal or little higher than what the LME lead is. To that extent, in this quarter there was a bit of a cost pressure on the recycling plant, but otherwise the battery breaking plant once it gets stabilized, our own batteries that we procure from the market for satisfying our EPR obligations should be good enough to feed that plant, and that the recovery from that plant if it is higher than what we are getting today, then it should help contributing to overall operating margins as well.

I think while at a larger picture even in the earlier calls, we said it could improve the material cost over and above what we are buying today, but provided the local scrap costs are within the earlier limits. We have to wait and see to put a clear number to it once our battery breaking operations stabilize.

That's when I think we'll be able to give you a correct number and then so that that can be clear.

Got it, sir. Thank you so much for an opportunity.

Good evening, sir. Thank you very much for the opportunity.

For Q1, can you indicate on the export side there was a muted performance. How do you see the trend going forward?

Also within industrial, if you can talk about various categories like UPS and others, how have you seen the performance across segments?

I think as Swajitha articulated in the opening remarks, the overall automotive exports on a YoY basis, we have seen a 20% volume degrowth predominantly because lower shipments to Middle Eastern markets because the alternative sea routes are quite costly from a freight point of view. We are expecting that there is some normalcy that will get restored in the coming quarters, and then we will be able to recover this loss of volume in the subsequent quarters and still go back to our regular volume throughput what we have seen in these markets.

That is one thing, of course, is dependent on how the evolving geopolitical situation turns from here. As far as industrial is concerned, again the UPS batteries have grown around 10% during the current quarter, while the telecom continues its shift to lithium-ion, but still even the lithium-ion offtake was also substantially higher during the quarter, which is why the new energy business has grown by almost 60% to 70% over the previous year as a revenue.

As far as the other segments, they are growing in the range of 5% to 6%. Of course, they are all smaller railways and power control are smaller volume segments.

There the growth is in line with our earlier estimates of 5% to 6% kind of a number.

Thank you, sir. That's helpful.

On the BESS revenue potential, you indicated that $100 to $120. If you can indicate for this 300 crore kind of an investment, would you be looking at something like a 3 to 4 times gross asset turnover?

Would that be possible?

See, I think I wouldn't want to jump on conclusion around the numbers because some of this will also depend on the product mix that will eventually come in. I am just giving you an overall unit metric from an overall industry point of view.

As I was indicating, if we actually run this plant for about 6 months or so, I think that's when the picture will be clear. I would say its economic metrics will be more or less in line with how the pack business is behaving at this point of time.

Any improvement from there will only depend on how much content you can actually localize.

Noted, sir. Thank you.

On the lithium cell side, you will be starting that customer qualification plant and sample supplies to customers. Is the acceptance faster for telecom, stationary applications in comparison to automobiles?

How much time do you think the customer testing and homologation process will take? By when do you expect clarity on new orders from customers?

See,

currently the 2170 cells is what we are making the B samples, which we would like to provide to the OEMs that we are discussing who need those NMC cells, and they will take the EV side, as there will be an extensive testing of those cells, and then eventually when our Giga factory is ready, the C sample testing and other processes will also take some time. It will definitely reduce some amount of time taken by OEMs for completing their homologation even when the C sample is ready.

This customer qualification plant not only helps the approval process acceleration, it also helps to understand the production process better and also see how we can arrest some of those ramp-up costs in the first Giga factory. That's the dual purpose for which we have constructed that facility.

Right now the NMC cells are being produced, and after the internal testings are over on those cells, we will be giving them to the OEMs for their testing. Now coming to the storage side of it, any LFP cell that we generate by our own technology effort can be tested in this plant, and if we are able to convince the B2B customers on the energy storage requirements, then because some of these packs also go with a warranty promise to the energy storage customers, there the time taken for acceptance by the customers might be substantially lower than what an EV customer would take.

Certain critical installations like telecom, customers will ask for extensive testing before they actually accept any particular cell because any cells that are made by any supplier, for that matter, require to be approved by the customer. Relatively the time taken by these energy storage customers is definitely lower than the EV customers.

Noted, sir. On the PLI, there is that 10 GWh bids which have opened, in the sense the tender application process has started.

Would you be considering it? How are you looking at that?

Yes, we are looking at the tender documents and then depending on the qualification criteria that they have put in. We will be participating in that tender while we are now weighing our options in terms of how to go about it, but it's an opportunity that we'll definitely try to participate in it.

Thank you very much, sir. This is very helpful.

Wishing you all the best.

Thank you.

Hey, hi. Thank you for the opportunity.

My first question is on your lithium-ion cell foray. You had earlier indicated that your Gotion tie-up did not go through as planned.

Can you please clarify if that is the case with your NMC tech partner as well? Also, are you looking for any new tech partnership with a non-Chinese player for LFP?

See, right now from the beginning there is a clear Plan B because we know that any technology support we get from the external sources need to be augmented with our own internal capability. On the NMC cell, whatever earlier relationship we had, we got that technology in and then our own team was able to improve the cell beyond what we have actually taken based on the current customer requirements.

To that extent, there is a bit of derisking that has happened on the technology talent point of view and our own ability to adapt or develop technologies for the requirement of this market. As far as newer technology relationships are concerned, I think I wouldn't say we are not looking at it, but we will definitely be on a need base wherever we think any external help augments our own internal capability, we will definitely be working on a case-to-case basis.

At this point of time, given the geopolitical restrictions, I don't think a broad-based technology arrangement with anyone from China is possible.

Okay. Okay.

Also, in your PPT, you had indicated your plans to set up 16 GWh by FY30. Given that there has been some delay and there has been some challenges from China, is that still on track?

Should we expect a lower capacity coming on stream by FY30 than 16 GWh?

I'd like to clarify that the 16 GWh we have coined was based on our initial strategy when we said that there would be a need to put close to 9,000 crores of rupees of investment into this business, and then there is a possibility of reaching that 16 GWh given the fact that India could be a market size of 100 to 130 GWh, and then we felt there is a reasonable chance for us to achieve a market share given that there are some EV requirements met by the OEMs by themselves. This potential, as it changes its mix, we also need to change our plans.

It's not that I'll build the capacity irrespective of what demand signals that I am getting and which cells that are being required by the customers, because we have to carefully invest behind capacity because any redundant capacity that we create will be highly taxing on the financials. We have to be sure about the standard cells that we are going to build to start with have sufficient demand, and then accordingly we'll expand the capacity.

Even today, if you were to rate the risks of lithium-ion business, obviously I would intuitively say that demand is not the highest of it, maybe it is definitely at the bottom quartile because there are demand coming from both EVs and ESS segment as well. Given our program, maybe we will now prioritize a ESS cell over a standard EV cell because that could actually uptick our demand much faster.

While the milestone for a given capacity can definitely change, but our broad strategic direction of going behind let's say a 15% to 20% kind of a market share on the available potential of lithium cell still remains intact. Timings can definitely change based on the demand as well as the product mix that is being required by the market.

Okay. Thanks for clarifying.

Also just one clarificatory question on your lithium pack revenues. It gets booked entirely in your subsidiary, right?

None of it is captured in your standalone business?

In the standalone, in this quarter there was some quantity which we have booked in our standalone entity because of the product approval was earlier taken in the standalone entity, like the way even in the last year we had trading activity happening in the holding company. Now I think we have migrated from the coming quarters, we will not have substantial lithium trading revenue coming in the holding company.

It will all move to the subsidiary only. Yes, there could be some other segments, some of the let's say commercial and industrial or some of the segments which we deal with through our industrial channel, there could be a smaller volume, but essentially all the telecom packs will move to the subsidiary completely.

Okay. Okay.

Thanks for clarifying. Thank you.

Hi. Thank you for the opportunity.

My first question is just on the growth expectations for lead-acid business. Obviously, 1Q we have seen a very strong growth.

OE obviously we know is doing well, and replacement continues to do well. Sir, how should we look at full year growth expectations in terms of volumes for the lead-acid business?

Mainly just trying to get a sense on the replacement market trend.

See, I think with domestic growth in the aftermarket as we have mentioned in the earlier calls as well, we can't go by one single quarter as the long-term guidance. Naturally, around lower double-digit kind of a number is possible in the two-wheeler side.

As far as four-wheeler, it may be a tad lower than the two-wheeler. Our estimation was it could grow anywhere between 7% to 8% kind of a number.

That kind of a growth is possible, but considering the large base that we are seeing today, those numbers will moderate as we move ahead and also as we see higher penetration on the EV side of it. Our lead-acid growth also should get further boost once the international business comes back on track.

That's where our forecast or our thought process is lead-acid battery business as a whole, both industrial, mobility, exports, every opportunity put together, can still achieve a revenue growth rates anywhere between 9% to 10% at least in the medium period. That's the sense that we are getting.

Sir,

this guidance is for volumes, right? Whatever the price hikes you have taken should further add up to the revenue growth?

No, I am not saying this is a guidance, but this is the overall industry growth estimate possible. This is predominantly on the volumes.

Any price changes, it will depend on how much you are able to actually pass on to the customer. We have seen B2B segment has its own challenge of passing it on fully, and in B2C with a lag we are able to pass on.

You are right, much of this I am talking from the volume lens.

Sir, just on this, your comment around LFP maybe incrementally the focus would be on the energy storage segment. Just wanted to get a sense, given that now we don't have partner and maybe in the future we might get one, but how it is difficult to develop LFP technology?

How much R&D investments which we need to do incrementally, and it takes time to develop this technology or within a year or two we can come up with a product and start supplying to the customers? Just any sense around that would be helpful.

There is enough investment that we have made into both the skill as well as facilities required for research. There are teams in place working on these product developments today.

Obviously, I can't give a timeline around every product that we are dealing with. I can only say that there is enough capability in the company, and also certain other relationships that we are working on will definitely help develop the products that are required for us.

From a timeline point of view, I think it would be premature for me to comment on any specific timeline because it will depend on the development program that we will chart for a given cell type. I would say there is a Plan B in place.

While even if it is a bit of a delay here and there, we will be able to do things with our own capability, which definitely help us develop products which are more suitable for this market. Also the key is basically to get the industrialization right, because product recipe is one thing, but getting the industrialization right at the right throughput level and right process scrap level is important.

Currently the teams are engaged in both aspects of this, which is where we are spending our resources. Even in this year towards the R&D of cell development, we may spend close to about 100 to 150 crores kind of a money.

That kind of expenses we need to incur until some of these cells that we are currently talking about are available for us for commercialization.

Understood. Just two clarifications.

One on the BESS side, right, when we talked about 200, 300 crores of capex, also there will be a working capital requirement, right, for this business pertaining to cells. What would be that number or in number of days if you could guide us, that would be helpful?

See, it depends again what's the customer mix we are dealing with, right? If it is a containerized solution that I am giving to an EPC player and then what kind of business models that will evolve, see there could be it really depends on what kind of projects to which that we are supplying.

If I were to take a cue from my current pack business that I am doing to a B2B segment, my working capital base could be around 90 days give or take, but it also depends on what kind of credit arrangements we will have for the cell procurement from China. I don't think I can give you a 100% sure number at this point of time, but if I were to give an estimate, a 90 to 100-day kind of a cash conversion cycle is not impossible to achieve.

Understood. Sir, last thing, just on the warranty, between lithium and lead, whenever we shift to lithium manufacturing, will the warranty provisioning be different or will it be higher or lower than lead-acid?

See, warranty obligations for any of the lithium packs today cell makers are giving back-to-back warranty assurance on the cells, and that should be the same even when we make domestic cells also. How do we provision it, how do we calculate the material cost, what could be the failure percentage, these are things that I cannot disclose or discuss today for the simple reason that we have to wait and see for the first commercial cell to come out.

I think it will be too premature for me to put a number around them.

Understood. Thank you.

Thank you for your answers.

Thanks for the opportunity. Sir, my first question regarding the lithium-ion facility ramp-up.

How should we think about the price discipline going forward, and what do you believe will be the primary basis of competition over the next few years?

See, lithium and the EV side, you know OEMs are some OEMs are building their own plants, and there are four battery manufacturers who are currently in the lead-acid space are also in the lithium space. By and large, as if you ask me, it could be a place where still you will see at the best a three to four-player kind of a market on the cell side is what is our estimation going by the announcements that we are seeing today.

From a pricing competitive point of view, I think I'm sure I don't think people in India will compete with each other, but rather both of us have to or all of us have to come continue to come compete with the imports that are going to come into this country. To that extent, yes, when you are looking at competing with China, we are clearly at a price disadvantage, which is what we have discussed in earlier calls also, that that disadvantage could be in the order of 15% to 20% today simply because of the strong supply chain that exists in that country and then we are still in the nascent stage of developing this market.

That until we we are able to have our own depth in the supply chain and then there is a bit of a protection coming from the government, I think we should be able to stabilize this industry in this country. Sir,

regarding you did say that there might be some changes to the 16 GWh plant capacity. Even if for the new capex coming in, do you have any planning for the debt-to-equity or the ratio in mind, how are you going to fund the next coming investment?

There are obviously multiple options on the table. The cash flows from the existing business are strong enough which we can use for funding this business.

As indicated earlier, the initial risk capital that we agreed was about 2,500 crores with which we are able to at least complete these five facilities that we are talking about. Thereafter, any future capex requirement, we have to explore our options.

One, the holding company can continue to fund it. Obviously, there is a limitation on the debt-to-equity number, but I wouldn't want to put a number at this point of time because I need to see each of these business cases and accordingly decide whether a leverage is good or should I look at some other options for funding this kind of a expansion.

These are questions that are definitely there on the table, but I think we'll be able to give a broad guideline as and when those new capex programs are announced in terms of how do we achieve the financial closure of it. Suffice to say that considering the 700 to 800 crores at the minimum as a cash generation post tax and post dividend as well, I think there is enough comfort left in the holding company for us to fund this new energy business for some time to come.

That doesn't mean we will be completely free with our capital allocation. Those decisions will be taken based on what investments that we are making into which cell capacities and what are the risk factors of that business.

At an appropriate time, those capital structuring decisions have to be modified.

Thank you for this opportunity.

Sir, just trying to understand when we talk of lithium-ion cells, is the product continuously evolving or we are seeing technology at a relatively stable level for NMC? Because the products are also evolving.

I'm just trying to understand whether there are significant R&D requirements here or once you have acquired a technology, we can continue supplying for next few years without any major changes?

See, I can only say that I would sense that while I may have to again discuss with my technology team before I give a conclusive answer, but my understanding is the speed of change has definitely moderated. That's why when we approach a particular cell program, we have to be clear that the capex what we are incurring provides us the opportunity to serve that product for a reasonable time in the future.

Secondly, if not, then we should also build the plant or work with the equipment vendors in such a manner that any fungibility between one product type to another can be done easily. That way the capital requirement for creating fungible lines should be factored in whenever we do these new cell commercialization plans.

That way now coming to the R&D investment that we need to make, that is something that we have said from the beginning that we would want to create a capability within the company which can actually deliver the required goods that are required for this market. That effort cannot be reduced just because we are able to commercialize couple of standard cells which are not changing.

I think technology requirements will continue in this business, and it is not something that we can wish away just because we have some capacity of regular standard cells that can be manufactured.

Thanks, sir. On the raw material availability, what kind of risks are there, and how you are thinking about managing those risks?

See, clearly on the supply chain, particularly on the cathode material, we have to depend on China for our procurement. There are no two ways about it.

There are also efforts happening within the country by various players to localize some of that supply chain. We have to wait and see how those plants come to some level of maturity.

I think in the long term, industry as a whole will definitely strive for localizing these required supply chain in this country. Otherwise, substantial value cannot be completely residing out of India, and even government's direction and the policy push also is going in that direction.

I am hopeful that in the long term, we will be able to bring a large portion of the supply chain into the country.

There are supposed to be some restrictions from China for exporting some of the materials like cathode materials or even graphite. Any risks that we need to monitor here?

Because something came out in October '25, then it was delayed for one year. Is there a risk on account of that also or not?

See, the processed battery material at this point of time, we have not heard anybody saying that they will not supply. From a broader supply chain development point of view, it is definitely a factor that need to be monitored not only by any one company, but at the industry level.

At this point of time, I am not aware of any specific restrictions. While there were restrictions on certain core material, but not on the battery cathode material or anode material.

That I have not come across a specific restriction, but I will double-check once again, and if I have any news, I'll update you, yeah.

Okay. Thank you, sir.

Yeah. Thanks again for everybody for coming in, and thanks for your questions.

Over to Jay.

Yeah. Thank you.

On behalf of Elara Securities, that concludes the call. Thank you all for joining in.

Have a good evening.