Exide Industries Limited

Exide Industries Limited

332.05
INR
-11.70
(-3.40%)
11.02EPS
35.40P/E
329.80BMarket Cap
Nov 04Next Earn

Q4 FY2026 · Earnings Call TranscriptMay 6, 2026

Operator

Ladies and gentlemen, good day, and welcome to the Exide Industries Q4 FY26 earnings conference call hosted by Investec Capital Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during this conference call, please signal an operator by pressing "*" then "0" on your touch-tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Aditya Jhawar from Investec Capital Services.

Thank you, and over to you, sir.

Aditya Jhawar

Thank you. Good afternoon to you all.

From Exide Industries, we have with us MD and CEO, Mr. Avik Roy; Director Finance and CFO, Mr.

Manoj Kumar Agarwal; Mr. Pravin Saraf, MD and CEO of Exide Energy Solutions; President - Legal & Corporate Affairs and Company Secretary, Mr.

Jitendra Kumar; and Mr. Prashant Saraswat, Head of Investor Relations.

Before we proceed, there is a disclaimer for the call. Few statements made by the company's management in the call may be forward-looking in nature, and we request you to refer to the disclaimer in the earnings presentation for further details.

We will start the call with the brief opening remark from the management and followed by Q&A session. I would now like to hand over the call to Mr.

Avik Roy for opening remarks. Thank you, and over to you, sir.

Avik Roy

Thank you, Aditya. Good afternoon.

Good afternoon, ladies and gentlemen, and a warm welcome to you all to the Exide earnings call. Before taking you through the key highlights of our performance, I would like to talk about some of the macro and industry drivers that shaped our operating environment in the last quarter.

Globally, the West Asia conflict continues to be an ongoing threat with regard to availability and pricing of commodities such as LPG, sulfuric acid, and plastics. The situation is quite alarming.

Rapidly increasing commodity rates coupled with rupee depreciation continue to pressurize our input costs. In contrast, the Indian demand situation remained favorable.

Low inflation rates, low interest rates, and the consequence of GST 2.0 reforms increased end consumers' affordability, especially in the second half of FY26. Rural India experienced strong, broad-based revival as well, driven by rising income, upbeat sentiment, and infrastructure development.

Coming to the company's performance during quarter four, nearly 92% of the business has grown by about 16%, and that's basically includes our entire domestic business minus telecom. All key verticals grew double digits, headlined by two-wheeler and four-wheeler OEM, then home UPS, solar, two-wheeler and four-wheeler replacement market, as well as industrial infrastructure business excluding telecom.

Remaining 8% of the business witnessed a strong decline in revenues, exports being one of them, which was subdued by the given geopolitical situation, and telecom and the e-rickshaw continues to shift towards lithium-ion technology. This translated to about 9.4% year-on-year overall revenue growth, and in quarter four, we generated our highest-ever quarterly revenue.

Domestic business sales grew by 12.5% year-on-year. For the full year FY26, the company has delivered 4.1% year-on-year revenue growth.

Again, nearly 92% of the business grew by double digits. The domestic business sales business grew by about 7.5% year-on-year for the full year.

In quarter four, the company continued to ramp up production, leading to higher capacity utilization, better absorption of fixed cost, and positive impact on the bottom line. The company was also able to maintain, on a sequential quarter basis, the EBITDA margin of 11.7%, buoyed by strong volume growth, improved product mix, and better realization, which was also helped a lot by lowering our warranty costs and benefiting and benefits accruing out of our manufacturing excellence projects.

All the above efforts resulted in expanding the EBITDA margin year-on-year by nearly 50 basis points. The GST 2.0-led demand surge continued in Q4 as auto OEM business recorded its second consecutive quarter of 25%-plus year-on-year growth, also hitting its highest-ever quarterly revenue, breaking the mark set in quarter three.

Home UPS business recorded its highest-ever quarter four sales, uplifted by the a little early onset of summer. Solar vertical returned to double-digit growth, and I'm happy to inform you that we incubated and nurtured this solar vertical for the last few years and to this year, they have crossed the ₹1,000 crore mark for the full year.

Two-wheeler and four-wheeler replacement demand remained robust as it continued in its mid-teens growth rates, as in the past quarters. Industrial infrastructure, excluding telecom, continued its strong performance, maintaining double-digit year-on-year growth.

Order inflow and execution remained healthy across sectors like railways, motive power, and industrial UPS. Geopolitical tensions continue to impact exports business.

We expect these uncertainties to remain for at least in the first half of next year of this current year. We have been briefing you for the last couple of years on our new One Exide operating model.

A few comments on that. The company transformed from a strategic business unit-led model to a One Exide operating model in FY25.

This was intended to recalibrate our go-to-market approach across vertical business verticals. During the last year, FY26, this operating model has enabled the company to be more agile and customer-focused, while bringing synergies across the organization, reflecting in the overall company performance.

As we enter the next fiscal year, the outlook for the lead-acid business remains positive across most business verticals. However, we remain cautiously optimistic and will constantly watch and monitor the domestic demand situation in view of the expected inflationary economy, if at all.

The company remains focused on tight cost control, despite the global headwinds. I believe that Exide, with its advanced product portfolio, pan-India distribution network, and a strong brand recall will continue to benefit from growth opportunities.

I will move on to our lithium-ion cell manufacturing project, where we have invested ₹600 crores in quarter four and about ₹1,500 crore in FY26 in the full year. With this, the total equity investment made in Exide Energy, our subsidiary, till date stands at ₹4,802 crores.

Our cylindrical lines are expected to start customer sample delivery by around this month onwards, while the prismatic line will be initiating product trials shortly thereafter. Meanwhile, the company continues to engage with various OEMs of two-wheeler, three-wheeler, and four-wheeler, and stationary energy providers to build the offtake across key end-consumer markets.

With this, I close my opening remarks. We will now be happy to take out your questions going forward.

Operator

Thank you very much. We will now begin with the question and answer session.

Anyone who wishes to ask a question may press "*" and then "1" on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press "*" and then "2."

Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

A reminder to all the participants, you may press "*" and then "1" to ask a question. We will take the first question from the line of Binay Singh from Morgan Stanley.

Please go ahead.

Binay Singh

Hi team. Thanks for the opportunity.

In the opening remark, we talked about 8% of the business declining, which is telecom and exports. Fair to say that exports will be around 5% of top line and telecom around 3?

Will that be the break up?

Avik Roy

Yes, Binay. You are right in the ballpark.

Binay Singh

Which leads me to... The

Avik Roy

3% 3% would also include the bit of e-rickshaw business.

Binay Singh

Okay. Because that brings me to my next question.

When you look at next year on this core business, exports will have volatility for the first half, but will recover. Then we should be actually quite set for a much better top-line growth than this year next year, right?

Avik Roy

Because I would like to believe the positive side is, Binay, the base line is now low for these businesses because we have declined. Next year, we have a strategy in place, given if the global geopolitical tensions ease out a little bit.

I see a substantial upside for the exports because our main export markets are also in Western Europe and the US, where we were targeting as a strategy. Exports was already 8% of our revenue a couple of years back.

We came down to 5%. I think there is a good chance to increase our share of exports and therefore, the incremental revenue.

Binay Singh

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

Avik Roy

Yes, the exits have been quite strong. Q3, Q4 has been quite strong, and as you will recall, we were a little pulled down because of the Q2 washout when this GST announcement was made in the month of mid-August, and it was effective from 22nd September, if you recall.

That 1.5, 2 months, we almost had a washout because there was no offtake from our distribution network. Other than Q2, I think all three quarters, we have been doing well and also riding on the demand wave.

I would still believe that the core business at this situation has a potential to do at least a high single-digit to double-digit growth. Today, despite the telecom decline, domestic we are 12.5% in the quarter.

I would like to believe that high single to double-digit growth for the overall core business is possible.

Binay Singh

Sir, secondly, on the new energy business, I think in the press release, we had added that for cylindrical, the trial runs have started. Prismatic will be a few quarters down the line.

To that extent, is prismatic also for this year only?

Avik Roy

Yes, yes. Prismatic is the LFP line, and this is also scheduled for this year.

The difference between cylindrical line and prismatic would be that the start of revenue will be quicker in LFP because that product will not go through so much of validation and customer homologation like the two-wheeler batteries in cylindrical. Though the production of cylindrical will start first, but possibly the revenue stream will come first from the prismatic lines.

Yeah.

Binay Singh

Sir, could you talk a little bit about the industrial side of the opportunity? Because globally, what we've seen that opportunity pie has surprised on the positive side, and margins are also actually better.

When you think about data centers, ESS, in your view, the 6 GW capacity allocation, what could be industrial share in that? How is the reception of clients on the industrial side?

Avik Roy

See, we have two lines of LFP prismatic, which is meant for industrial stationary storage applications. Every cell what we are going to manufacture will have multiple use cases.

It could be both automotive as well as stationary. The form factor is prismatic in any case.

The cell formats which we will be producing in Line 3 and Line 4, the prismatic lines, will also cater to the stationary storage use cases. I have made in the opening commentary that the telecom is shifting towards lithium-ion, e-rickshaw is shifting towards lithium-ion, and there are some other use cases shifting towards lithium-ion.

Now in many cases, we are already present with our pack business. Only thing that we are doing it through imported cells.

We will just switch over to our own Made in India cells. That's the plan.

Binay Singh

Sir, just lastly on the commodity and all because...

Operator

Sorry to interrupt in between.

Binay Singh

I'll come back in the queue. Yeah.

Avik Roy

Thanks, Binay.

Binay Singh

Thanks.

Operator

Thank you. We will take the next question from the line of Krupashankar NJ from Avendus Spark.

Please go ahead.

Krupashankar NJ

Good afternoon, and thank you for the opportunity. My first question would be on the commodity costs.

Just wanted to get a sense around the extent of impact what we have seen in fourth quarter and what sort of escalations is anticipated in the first quarter of FY27 considering the initial comments? Continuation to the question is that what would be the extent of price hikes taken in the aftermarket and the expectation on further price hikes going ahead?

Avik Roy

Thank you. Thank you for the question.

First question on the commodity situation. Our impact on material cost for quarter four was roughly net-net impact was ₹150 crores, I would say, a negative impact.

It has come down by about The gross margin, if you see, has come down by about 90 basis points. Though we have been able to maintain our able to improve our EBITDA, but even if you see quarter-on-quarter movement, the gross margin has come down from let's say, it was in Q3, it was 31.6%, and in Q4 in the last quarter, it was 30.1%.

Despite that, we have been able to maintain our EBITDA sequentially at 11.7% because of our tight controls on the other cost elements. We have been very successful in controlling our factory costs as a percentage of sale, employee cost, you will see that, and best part is we could be able to reduce the warranty cost as a percentage of sale.

These three mostly these three elements have offsetted the increase in the commodity cost. Therefore, we could offset the drop in gross margin through our internal controls.

As long as far as price hike is concerned, we have started I think I have mentioned this in the past that in Q3, we did not take a price rise consciously because GST revised GST rates were announced, and we thought we will pass on the entire benefit to the end consumers. From January onwards, we could not sustain the cost inflation of material, and therefore, we started taking price increases stage by stage.

January, 1st January, 1st March, 20th March, I think in three tranches, we have taken increases, which may be amounts to about let's say about 5%, 5% to 6%, varies on the segment. Across all segments in the trade in the aftermarket, we have taken corrections.

Even on 1st of April, we announced the last round In April also, we took another round of correction. We have been trying to, pass on as much as possible of our commodity inflation, and that has also resulted in our resilience in quarter four margins.

Krupashankar NJ

Got it, sir. What was the quantum...

Avik Roy

Have I left anything?

Krupashankar NJ

Nothing, sir. I think one one follow-up is that what was the quantum of price hike taken on April 1st as well?

If you can share that?

Avik Roy

It was around 3%.

Krupashankar NJ

All right. Do you anticipate further hikes coming in given that the commodity inflation has been quite sharp?

Just wondering, given the competitive dynamics, do you see further price hikes coming in to pass through this inflation?

Avik Roy

See, right now it's difficult to comment, but the leading indicators, if you see the April exit prices of commodity, it is far more than March exit, whether it's tin, whether it's sulfur. Sulfuric acid, we are very, very badly hit.

The March exit was ₹58 per kg, and April exit is already ₹74. Just imagine, one year back, it used to be only ₹15 per kg.

So 15 to 75 74, 75 is 5x. Obviously, we will be watching it, and going forward, we will have to take the price hikes.

We have no other option.

Krupashankar NJ

Got it, sir. With respect to OEM contracts, the escalation comes in with a lag.

What would be the time period of that lag? What will be covered?

Is it only the lead-acid piece which will be covered, right? Are you negotiating with them to pass this on?

Avik Roy

Yes, you're right. Good news is that last year also when we were going through this huge inflation, non-lead inflation, I would say.

Non-lead inflation on commodities, we have been able to make our OEMs agree to a certain amount of price increases. We have been successful.

We have given them evidences that how we are suffering, and some of them has been extremely logical, and they gave us price correction last year. That helped us in the full-year performance as well as the quarter four performance of auto OEM also.

Having said that, we have again approached them, and everybody knows this. It's not surprise that how the commodities are growing, particularly the commodities which are essential for batteries: acid, plastics, LPGs, and of course, currency hitting the lead prices.

I think we are constantly in touch with the major OEMs. Some of them agreed, and some of them the negotiations are on.

Krupashankar NJ

The lead time is typically 2 months to 1 3 months? Is that the right metric?

Avik Roy

I'll rather say it's a quarter.

Krupashankar NJ

Sure. Understood.

That's it from my side. Thank you for answering my questions.

Avik Roy

Thank you. Thank you.

Operator

We will take the next question from the line of Siddhartha Bera from Nomura. Please go ahead.

Siddhartha Bera

Thanks for the opportunity, sir. Sir, first question is on this lithium-ion business.

We have invested close to ₹4,800 crores till now. How much investment do you see in the next 1 or 2 years going ahead in this business?

Second is, when we have started the trials, when we sort of look at the commercial supplies, do you think the pricing will be at par with the imported, or there can be some premium we can derive? How should we think about the learning curve?

Where are the yields? Do you expect that we may be in the normal sort of yields by quarter three when we start, or that may take some time to settle down?

Avik Roy

Let me take the first part of the question, and then I will hand over to Pravin Saraf, who is on the call, to answer about pricing and yields. The first part is, Siddhartha, we have already got a board approval, and this has been announced in the past, of investing ₹1,400 crore in the fiscal year '27, which is a mix of both capex as well as the opex, working capital requirement which we have to fund.

That's the number for FY27. I think that should be sufficient for Phase 1.

We'll see and how it works. Regarding our pricing strategy and yields, I will request Pravin to take over.

Pravin?

Pravin Saraf

Thank you. I'll start with the reply to yield.

You're absolutely right. The yield is the most critical factor governing the price the cost of the cell manufacturing.

We what is how we control and improve the yield is we must have good machines, properly trained people who is operating the machines, as well as having the process knowledge and good technology support. You you know that we have a very good technology support from SVOLT.

Then we have good machines already already installed, which are very capable. What yield will govern is only by experiencing, and we all learn that once we start three-shift running and having continuous running, then the yield will improve.

It takes time, but definitely we will work towards it. How much it will take will be better to once we start the manufacturing, then we'll be able to exactly predict that how much time it takes.

I can only assure that whatever required things and parameters control yield are in present. Once we start, we'll be able to quickly reach to we will try to reach to the yield level.

The the best yield level should be 90% what we should target. Coming to the pricing, yes, today the raw material are getting all from import, from China.

The pricing today is definitely will be little higher. What we are targeting is that with yield utilization of the plant, with maximum utilization, more than 85%, yield is 90%, and with some amount of localization, which you already know that a lot of local suppliers are coming, we will also able to meet the targeted price, what is the landed price today.

What what will help us in achieving this is also if you may be knowing, recently there is a change in the VAT structure in China. For the imported cells today, the there is 3% increase in the VAT due to the VAT structure already implemented, and by January next year, it will be additional 6%.

It will be overall 9% increase will happen. This will also help us.

Parallelly, we are also working with government to have subsidies and incentives for the localization of raw material, as well as for manufacturing of cell. Put together, our target will be meeting the landed cost of the imported cell.

Avik Roy

Thank you, Pravin. Got it, sir.

Pravin Saraf

Thank you.

Avik Roy

I think the government has to also develop this industry locally. There has to be a value for Make in India cell, like I have been repeating quarter after quarter, that we are the first one, and Make in India cell has to have its learning curve because otherwise, nobody else will come up for investment like this if they are not encouraged.

That's also our take. Thank you.

Siddhartha Bera

Got it. Thank you, sir.

I'll come back in the queue.

Operator

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

Please go ahead.

Arvind Sharma

Hi, good afternoon, sir. Thank you for taking my question.

On the lithium-ion business, have you seen any revenue commitment over past few months given the trial supplies have started or are supposed to start? When should the company actually start seeing revenue accrue from a lithium-ion business?

Versus the plans, say, when you launched in 2022, I remember you had said around 27 to 30 months is a time it takes for operationalization. Where are you in that plan right now?

That's first question on business.

Avik Roy

I think to bring clarity to the question. First one is, what is your status of revenue flow?

That's simple. Far, we have been doing pack business, which is around, let's say, ₹100, ₹200 crores of module and pack businesses, which we were doing through imported cells.

Now we will be making cells. Now regarding start of cell revenue date, I think I already mentioned in the first question itself that when is likely the revenue to start.

It will probably start with the LFP prismatic line because that product does not need so much of approvals and things like that, that use case. As a start of production, the NMC cylindrical line will be first, and we have not started the supplies of cells, just to correct you.

We have completed our process validation. The sample supplies will start possibly this month, end of this month or next month.

Pravin, would you like to add on this?

Pravin Saraf

Yeah. Yes, sir.

Our internal validations for the cylindrical cells have been completed, and we will able to give the cell to our customers in this month. Of course, as you all know that the customer validation will take time because there's homologation as well as their internal trials for the cell as well as at the pack level.

For the prismatic cell, right now we are running the trials for the making the customer samples. We are targeting by June end, July, we can say, we want to give the samples for customer validation.

Arvind Sharma

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

See,

Avik Roy

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

Arvind Sharma

Sure, sir. Thank you.

Sir, second question on the core business, in the legacy business. Would it be possible to share the proportion of autos and non-autos, and the OEM replacement share in the mix?

Would it be possible to share?

Avik Roy

I think this we have shared many times in the past. Auto and non-auto is almost half-half roughly.

Or maybe 53, 47 kind of. Auto OEM and aftermarket put together is about 50%.

The ratio between auto replacement and non-auto, as it's standard. It's 70-30.

Plus minus 1% or so, yeah.

Arvind Sharma

Sure, sir. Thank you so much, sir.

That's all from my side. Thanks.

Thank you.

Operator

Thank you. Before we take the next question, a reminder to all the participants, you may press "*" and then "1" to ask a question.

We will take the next question from the line of Vijay Pandey from Axis Capital. Please go ahead.

Vijay Pandey

Hi, sir. Thank you for taking my question.

A couple of questions. I wanted to check in terms of the raw material, commodity inflation, how much impact are you seeing currently?

So...

Avik Roy

Absolutely. You have to repeat your question.

I'm afraid you were not very clear. Can you say that again?

Vijay Pandey

Is it okay now? Am I audible?

Avik Roy

Better, better.

Vijay Pandey

Sir, I wanted to check in terms of commodity inflation, what was the...

Operator

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

Avik Roy

There's some background noises coming in.

Vijay Pandey

Is it okay now?

Avik Roy

Yes,

Operator

please proceed.

Vijay Pandey

Yeah. I wanted to check the commodity inflation of the fourth quarter and the first quarter till date.

What is the level of price increases you have taken?

Avik Roy

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

Vijay Pandey

No, no. Sir, not about the price hike, the inflation, the raw material...

Avik Roy

Yes, yes, we have mentioned that as well. Exactly what was the impact on the material rate impact.

We've mentioned.

Vijay Pandey

Okay.

Avik Roy

Yeah.

Vijay Pandey

Okay. Secondly, sir, the prismatic cell, customer validation will take around, should we expect around 3 months or is it longer than 2 to 3 months?

Avik Roy

No, see, prismatic cells what we are making is primarily for three-wheelers and some stationary applications. For these applications, basically these are either through trade channels or to institutional customers, where we do not have that kind of a homologation process like an auto OEM runs.

Therefore, the time to market and the time for revenue will be quicker than auto OEM.

Vijay Pandey

For cylindrical cell, it will be around 3 months,

Avik Roy

or... Depends on the customer because it depends on how much mileage the vehicle will run or they want to run.

Around that ballpark. I think, Pravin?

Pravin Saraf

Yes. Yes, 2 to 3 months, yes.

Of course depends on customer again, we are also discussing with them, but depends on that.

Avik Roy

Yeah.

Vijay Pandey

Okay. Sir, for...

Operator

Sorry to interrupt in between, Vijay. I would request you to kindly rejoin the queue again for more questions.

Thank you. We will take the next question from the line of Aditya Jhawar from Investec Capital Services.

Please go ahead.

Aditya Jhawar

Thank you for the opportunity. Sir, I think this commodity question is quite important in the current context.

If you can refresh that if you look at our bill of material, what are the ballpark big commodity in terms of percentage exposure that we have? The top three, four commodities, whether it is lead, polymer, how much percentage of COGS it represents?

For specific commodity, if you can talk about that what is the near-term outlook that you're looking at?

Avik Roy

Okay. Let's see how much we can give you.

I'll give you both quarter-on-quarter and year-on-year rises.

Aditya Jhawar

First, I would recommend that for FY26 on a full-year basis, that what is the breakup of our bill of material in terms of exposure to key big commodities?

Avik Roy

I think, Aditya, perhaps this is a little not in public domain. All I can say is that our key components is lead, acid, and plastic, okay?

Mainly, our bill of material items. This covers about 95%, 96%.

Lead, as a index, has been softer year-on-year, but in India, lead is sold even recycled leads and pure leads are sold on import parity prices. Because the currency has softened by about 10%, the reduction in LME has been over offsetted by the dollar rupee depreciation.

Okay. We did not get a net-net benefit on lead also.

Regarding plastics, because we use polypropylene containers, this was directly hit in the Q4. Q1 to Q3 was pretty stable, but Q4 we got a hit because of shortage of crude, which is coming to India.

Sulfuric acid, this for the first time. We used to buy sulfuric acid for ₹15, as I said, 1 year back.

Sulfur is a byproduct of the petrochemical refinery plants, right? Since the petrochemical refiners are operating at a lower capacity utilization because of crude shortage, even the generation of sulfur has also come down.

Therefore, just to run the business, sulfuric acid costs have gone to ₹75 April exit, compared to ₹15 in the beginning of the year. So...

Aditya Jhawar

Yeah.

Avik Roy

Understood,

Aditya Jhawar

sir. What I'm trying to understand, sir, clearly I think lead prices not going up is also a better situation for us in INR terms.

Lead might represent more than 50%, 60% of cost, and even the polymer prices would be the remaining 20%, 30%. What I'm trying to understand that, yes, sulfur has seen a big spike, but it is less than 10% of BOM?

Avik Roy

See, we have to go into details. There are other alloys which also come in play based on seasonal demand.

Are you looking for Q1 outlook or kind of a picture of Q1 or last quarter four?

Aditya Jhawar

No. If you look at on a blended basis, depending upon how much exposure we have, because now the Street is worried about the commodity inflation.

Our exposure is significantly different to commodities as compared to OEMs. We are just trying to understand from FY27 perspective, what should we think about commodity inflation, and how much price increase would be required to offset that?

So...

Avik Roy

The short answer is this, that this year, at least quarter-on-quarter, we will pass through the non-lead price increases to the customers. Lead will be governed by the formulas that we have with at least the OEMs and industrial customers.

Otherwise, everything we will try to take price correction because at this moment, we believe that our sourcing efficiency is at its best, just for business continuity itself. We have been successful in passing on in, as I said, January, February, March, April, 4 months consecutively, we could able to take price corrections from the market.

I do not know the situation of rupee, rupee to dollar is a kind of uncertainty. If it stays at this level, then probably even if LME goes down, we'll not get a benefit in rupee terms.

Just for your information, Aditya, that till March, though LME was softer, but in April, LME has again shot up to 1950. It's really volatile.

We are navigating through calibrated price increase from the market. Yeah.

Aditya Jhawar

Sure. Thank you, sir.

Operator

Thank you. We will take the next question from the line of Sriram from MLP.

Please go ahead.

Hi, sir. Am I audible?

Avik Roy

Yes, please.

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

Avik Roy

No, it's sulfuric acid.

Okay. That's it.

That's the only question I had. Thank you so much.

Operator

Thank you. We will take the next question from the line of Viren Samir Deshpande from AlphaPeak Investments.

Please go ahead.

Viren Samir Deshpande

Hello, sir. Good afternoon.

Avik Roy

Good afternoon.

Viren Samir Deshpande

The results have been quite decent in the current scenario, and our dominance in the market share is really helping us. We are getting good results.

Another important thing, to become the first company in India to make this lithium-ion batteries will be a good feather in the cap. As you rightly said, is the government likely to be significantly supportive to the company with these benefits or incentives like PLI or any other incentives?

Because otherwise, the imports are going to hurt with the rupee depreciation. What is the status on that?

Avik Roy

Imports are going to be expensive, that's what you meant.

Viren Samir Deshpande

Yes, yes.

Avik Roy

Precisely there are two parts of it. One is of course government has to develop this industry and give a attention to Make in India cell.

Believe me, when I cell manufacturing, it is electrode manufacturing. It's not importing complete electrodes and just assembling it as a cell and then supplying.

If government wants us to really integrate backward in manufacturing our own electrodes, sourcing our own anode and cathode material from the country, they have to support the industry, and that will happen eventually. Otherwise, investments will not come, not only in the cell manufacturing, but also in the supply chain.

There is a second angle to it. The second angle is the comfort of the OEMs.

Now how long do you think a large OEM, like let's say the top two names, Marutis, Tatas, Mahindras of this world, will depend on completely imported batteries from China for their vehicle? The OEM runs on one-day inventory.

That is how their supply chain works. Here they are investing in three months' inventory of imported material.

Their operational sequence, their total supply chain management also improves for Make in India sourcing. I'm sure once there are scales, once there are players like us, even the OEMs would also like to have localized supplies.

We have seen those trends already in some cases because of course they want to have at least two sources, even if they don't want to disrupt their import, they will like to have an alternative source because otherwise, it is too expensive and too volatile, too big an exposure to depend on imported complete batteries from China on a long term. Yes, we are looking forward that both the government as well as the auto OEMs will be driving this market,

Viren Samir Deshpande

which will encourage

Avik Roy

more players to come in. Yeah.

Viren Samir Deshpande

Yes. No, I think definitely with the Aatmanirbhar policies of the government and the current situation in the Gulf, which is already exposing the country to these huge risks, because if there are no imports possible, then the things really can come to a standstill and hit the India in a big way.

Definitely the government support will come. I hope with these big investments we have made around ₹5,000 crores to date, and I think in this year also you are likely to invest about ₹1,000 crores, you mentioned?

Avik Roy

1,400.

Viren Samir Deshpande

Okay. It will be about 6,000.

About ₹6,500-odd crores will be the total investments. When we sold our life insurance business, we got approximately the similar amount, I think, in terms of the shares of HDFC Life.

Avik Roy

Roughly that amount, yeah.

Viren Samir Deshpande

Ha. Non-current and investments have fallen by about ₹850 crores.

Have we sold some part of the shares of HDFC Life during the year?

Avik Roy

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

Viren Samir Deshpande

Manoj?

Manoj Kumar Agarwal

It's purely because of the mark-to-mark of valuation of the shares. We have not sold any shares as on date.

Viren Samir Deshpande

Okay. The mark-to-market valuation has come down by about ₹850-odd crores?

Manoj Kumar Agarwal

Yes, as of 31st March, yeah.

Viren Samir Deshpande

Achha. The second effect has been given to the reserves or what?

Manoj Kumar Agarwal

It went through OCI, na? We route through OCI, it is coming in the net worth, not the P&L account.

Viren Samir Deshpande

Okay. So...

Operator

Sorry to interrupt in between, Viren. I would request you to please rejoin the queue again for more questions.

Viren Samir Deshpande

Okay. Thank you, and all the best.

Avik Roy

Thank you. Thank you.

Operator

Thank you. We will take the next question from the line of Suraj Chheda from Bandhan AMC.

Please go ahead.

Suraj Chheda

Hi, sir. Couple of questions.

First on the lead-acid...

Operator

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

Suraj Chheda

Yeah. Is it better now?

Operator

No, you're not audible.

Suraj Chheda

Hello, is it better now?

Operator

Yes, please proceed.

Suraj Chheda

Yeah. Couple of questions from my side.

First on the core lead-acid battery business, in the earlier comments during the call, you mentioned that you're expecting high single digit to early double-digit growth. This you mentioned with respect to FY27, or do you think over next 3 to 4 years, that should be the medium-term CAGR for your business?

Avik Roy

I think even in medium-term CAGR, it should be. Last 5 years also, if you see, the 5 years CAGR was 11%, and I don't see any reason for the next 5 years CAGR to be different from that, plus minus few percentage, 1% maybe.

Because clearly, if you look at the OEM business today, which is for at least consecutive two quarters as well as Q1 outlook of this year, the automotive OEM business is growing by 20%-plus, 25%-plus. These are all going to get reflected in aftermarket after 2 years.

Suraj Chheda

Understood. Okay.

What is the UPS revenue mix for you right now in FY26?

Avik Roy

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

Suraj Chheda

Okay. Okay.

Telecom, you mentioned is maybe around 2%, 3% of your revenues right now.

Avik Roy

Yes. Yes.

Okay.

Suraj Chheda

Second question was with respect to your Phase 1 of 6 GWh capacity for lithium-ion cell manufacturing. How do you see this capacity being allocated between, say, automotives and maybe stationary application or telecom or BSS segment?

Any plan you are having over next 1, 2 years?

Avik Roy

I'll request Pravin to take this.

Pravin Saraf

Yeah. Thank you.

The 6 GW, we have two chemistries. I think it's a good thing that because of two chemistries, we can able to cater the various applications.

We have cylindrical and prismatic. Our capacity is divided cylindrical in 3 and prismatic in 3 GW.

As cylindrical, today the applications is two-wheeler, and prismatic, we have applications like four-wheeler, buses, and stationary like telecom sector as well as BSS. This is how today the capacity is allocated.

Suraj Chheda

Okay. Any breakup of this 6 GWh between the two chemistries, ballpark numbers?

Pravin Saraf

3 3 3. 3 for cylindrical and 3 for prismatic.

Suraj Chheda

Okay. For this 3 GWh prismatic one, this will also cover your tie-up with the Hyundai-Kia, which you announced, right?

Pravin Saraf

No. That's a little different.

This will not have an impact on the Hyundai.

Suraj Chheda

Okay. That will be part of your Phase 2?

Operator

Sorry to interrupt in between, Suraj. I would request you to please rejoin the queue again.

Suraj Chheda

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

Operator

Thank you. We will take the next question from the line of Karan Kokane from Tata AIA Life Insurance.

Please go ahead.

Karan Kokane

Sir. Thanks for the opportunity.

I just had a clarificatory question. If I heard right, you said that sulfuric acid prices have gone up from ₹15 per kg to ₹75 per kg?

Avik Roy

Sulfur price, not sulfuric.

Karan Kokane

Sulfur price. Sorry.

Sulfur prices have gone up from ₹15 per kg to ₹75 per kg. You said this has happened since the start of the year.

This is since Jan or this is since April?

Avik Roy

No, this is for 1 year.

Pravin Saraf

Gradual increase.

Avik Roy

Gradual increase quarter-on-quarter. The base line is Q1 of '25.

Four quarters.

Karan Kokane

For the last 1 year.

Avik Roy

Trailing four quarters, yes.

Karan Kokane

Okay. On a sequential basis, what would be the jump?

Avik Roy

Sequential basis in Q4, sulfur was +40%, and sulfuric acid is...

Pravin Saraf

58

Avik Roy

to 74. Year-on-year sorry, quarter-on-quarter sequential basis will be about 20%.

April exit is higher than March exit by a lot. Yeah.

Karan Kokane

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

Avik Roy

More or less same quarter. That's why if you recall, I just said that from 1st of April itself, we took the price hike, and because we did not wait.

Normally acid and others impact immediately. That's why first we announced on 1st of April Actually, we took on 20th of March one round, if you check your channels, you will know.

20th of March we announced, and then 1st of April, back-to-back after 10 days, we announced. Now ongoing in May and June, you will also hear some announcements.

Karan Kokane

Okay. Got it.

That's it from mine. Thanks a lot.

Avik Roy

Yeah. Thank you.

Operator

Thank you. We will take the next question from the line of Deepak Ajmera from Aegis India.

Please go ahead.

Deepak Ajmera

Hi. Thanks for the opportunity.

We would like to understand your thought process that you have invested ₹5,000 crores, will be investing another ₹1,000 crores, and what sort of return metrics now looking at the raw materials price and the demand and the availability, what's your internal projection on the return metrics and the margin metrics?

Avik Roy

Sir, at the moment, we are completely focused on ramping up the production, as Pravin has mentioned. We do not know what will be the level of commodity prices when we actually serialize our production.

Today lithium has again gone up by double digit in the last couple of months due to various supply-demand constraints. It's not proper for me to do a math based on assumptions on commodity prices because all those things will depend on that.

What is good is that the customer has realized that lithium is also volatile. Today, last 1 year lithium was dropping because there was high overcapacity in China.

Today if you look at last 2, 3 months, the situation is reversed. Because of this West Asia crisis, because of crude shortages, the production of electric vehicle and electric vehicle batteries in China has shot up.

Everybody has loaded their factories because primary fossil fuel is in crisis at this moment. This has led into a demand-side boom locally and therefore, the prices are going up.

People also understand that lithium prices is not exactly predictable because this type of volatility will happen going forward. Then the government has come up with a policy that you can't bleed anymore.

The EV manufacturer cannot make losses anymore. They have to be profitable.

They are forced to raise prices. That's why Pravin told you that they have withdrawn a lot of VAT benefits and the export benefits.

This is the environment of lithium. I have a feeling that we will have a much better case than last year when we start production because prices will stabilize, number one.

Number two is the prices are also indexed to a great extent, so that the risk is also a pass-through like lead. Third is, as I said, the OEMs will definitely take a deeper look of developing local supply chain for cells and packs.

I think with this, we'll have a much stronger case, but the time to announce that has not come. Let us ramp up our plant.

Let us operate at 85% utilization with 90% yield, and that will be the time when I'll come back and reply to this question.

Deepak Ajmera

Noted. Thank you.

Thanks for elaborate answer.

Avik Roy

Please have in mind, we are the first one in the country to manufacture cells with this kind of scale.

Deepak Ajmera

Yeah. Yeah.

That's really great. It's commendable.

The second question is, while you are liaising with ministry or discussing on the policy framework on the cell manufacturing localization, what is their feedback? What they are exactly waiting for for the any policy measures?

Avik Roy

It's kind of a chicken and egg. You also have to have sufficient capacity locally to announce a policy for Make in India.

I would like to believe, unless there is about 20, 25 GW of capacity in India, let's say 20 GW, that is a minimum base where we will get a lot of support from the government. In fact, today the EV market in India is also 20 GWh.

Just to have that in mind as scale, once we have two, three players coming up with 15, 20 GWh, I think we'll have substantial scale for the government to intervene and take some policy changes.

Deepak Ajmera

Noted, sir. Thank you.

All the best.

Avik Roy

Thank you very much.

Operator

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

Please go ahead.

Sagar Parekh

Hi. Am I audible?

Avik Roy

Yes, please. Yeah.

Sir,

Sagar Parekh

just I was confused actually. You said 6 GW, 3 is in NMC and 3 is in LFP cylindrical NMC cylindrical, 3 in LFP this thing.

Then you said Hyundai is separate, what exactly do you mean by that?

Avik Roy

With Hyundai, we have a separate contract where there is a co-investment. We are delinking it with our own internal investment.

That will be an incremental capacity over 6 GW when we commission that. Oh, so

Sagar Parekh

that is not a part of that 6. When will that be commissioned?

That's not a part of that ₹4,800 crores also, ₹4,800 crores that we have invested?

Avik Roy

No. That we'll make a disclosure when the time comes, maybe soon.

Yeah.

Sagar Parekh

It's not a part of FY27 this number, ₹1,400 crores?

Avik Roy

I'm not commenting on that. Could be, but I'm not commenting on this because this is a material disclosure.

Sagar Parekh

Noted.

Operator

Thank you very much. Ladies and gentlemen, we will take that as the last question for today.

With that, concludes the question and answer session. I now hand the conference back to the management for closing comments.

Avik Roy

Thank you, everybody, for the extremely engaging questions. We have been pretty confident of the quarter coming by, because last consecutive two quarters was pretty satisfying, particularly after a weak quarter two.

I think we have been able to deliver a growth, which normally is in line with the expectation, both in top line and bottom line. Our April having gone, I think we have also have a similar view on quarter one of this year as well.

I hope we have been able to answer all your questions satisfactorily. If you have any further questions, we would be very happy to be of assistance.

Kindly reach out to us. Thank you.

Over to the moderator.

Operator

Thank you, members of the management. On behalf of Investec Capital Services, that concludes this conference.

Thank you all for joining with us today, and you may now disconnect your lines.