Thank you, Manasa. Good evening, everyone.

Krupashankar here from Avendus Spark. Appreciate everybody logging in to the 3Q FY26 earnings call of Amara Raja Energy & Mobility Limited.

From the management team, I'm pleased to host Mr. Y Delli Babu, Chief Financial Officer, and Ms.

Swajitha Rapeti, Head Corporate Finance. I'll now hand over the call to the management for opening remarks.

Over to you, ma'am.

Good evening, everyone. Thanks for joining the call.

During Q3, the total consolidated revenue stood at ₹3,410 crore, which is a growth of around 4.2% over the previous year. And 93% of the revenue has come from lead-acid business and rest has come from new energy business.

During the quarter, a steady growth of 7% in domestic automotive four-wheeler volumes along with other applications supported the top-line expansion in the lead-acid business. Four-wheeler OEM volumes have demonstrated robust growth of around 25%, and aftermarket volumes grew around 3% on YoY basis.

Other applications, including tubular batteries and HUPS, also demonstrated a growth rate of around 10%. This quarter marked a significant increase in the tubular battery sales from in-house manufacturing, unlike the previous years.

Lube also continued to clock a quarterly revenue of around ₹50 crore, maintaining its growth momentum. Coming to the lead-acid industrial side, the industrial volumes excluding the telecom volumes registered a growth of around 2%, and UPS volumes had grown by around 5% on YoY basis during the quarter.

Despite these growth numbers highlighted earlier, the lead-acid business reported a muted top line of around ₹3,174 crore during the quarter. This was primarily driven by the decline in industrial telecom telecom lead-acid volumes and decline in automotive export volumes by around 15% on account of tariff issues and other geopolitical uncertainties.

On the new energy business, during Q3, we have delivered a strong performance with a revenue of more than ₹200 crore, which is a growth of almost two times compared to the previous year. This marked the first quarter in which we crossed the ₹200 crore revenue milestone, and this growth is supported by increased demand for telecom packs.

During the quarter, we supplied telecom packs for around 250 megawatt hour, and this led to a stationary capacity utilization of 80% plus. Besides telecom packs, we are also now shifting focus to battery energy storage solutions, where the market demand is expected to reach around to 25 to 30 gigawatt hour by FY31.

Our board has approved to set up a 5 gigawatt hour integrated solution plant with an estimated capex outlay of around ₹280 crore to cater to both grid and commercial industry energy storage solutions. We expect this plant to be operational by end of this FY27.

During Q3, we infused around ₹200 crore into Amara Raja Advanced Cell Technologies, which is a lithium subsidiary, and with this, the total investment is is now ₹1,400 crore. With respect to the profitability, the stand-alone operating margins stood around 11.2%.

If we adjust for the lithium telecom battery trading business and consider even the operational efficiency from our lead recycling plant, the margins would go up to 12.3% during Q3. Our lead recycling plant led to a margin accretion of around 0.6% at EBITDA level during the quarter.

At a LAB level, at a lead-acid battery business, we are able to sustain the operating margins of about 12% despite these cost pressures at raw material levels. The raw material costs particularly in tin alloys and sulphuric acid and even antimony alloys increased materially during the quarter, which impacted the margins.

In addition In addition to this, even the OEM mix being higher during the quarter and some provisions around warranty expenses, EPR liability also added to the moderation margin expansion. We took a price increase of around 2% in January month, in January '26, to mitigate this pricing cost pressures.

On the capex side, till YTD December, we have spent around ₹950 crore between lead-acid business and new energy business, and out of which ₹600 crore has been spent towards lead-acid and ₹300 crore towards new energy business. This is a quick brief on the Q3 performance.

We can go ahead with the question and answers.

Thank you very much for the opening remarks, and thanks for taking my question. My first question was to better understand on the volume side, can you please indicate within four-wheeler how was the growth in OEM, replacement, and export YoY?

In the four-wheeler segment, on the OEM side, we have grown around 25%. In the aftermarket segment, we have grown around 3%.

Got it. How would be exports?

The exports, there was a decline during the quarter by around 15%, Raghunandhan, on account of all this tariff issues.

Can you also indicate for two-wheeler how is the OEM and replacement?

With respect to the two-wheeler segment, both in the aftermarket and OEM segment, the growth has been pretty flat. We have grown marginally around 1%.

This is primarily due to in the corresponding period, the volumes were slightly on a higher side. The base was a bit on a higher side because of which the growth looks muted.

On the OEM side, the growth was a bit muted because certain OEM factories were slightly shut down for a couple of months, which resulted into the overall flat growth in the volumes. Also

on the two-wheeler, Raghunandhan, just to add to what Swajitha has said, last year same quarter if you compare the YoY growth, it was almost close to 16%, 17%. There was that higher base impact that kind of has shown a muted growth on the two-wheeler aftermarket, but I'm sure it'll kind of revive itself in the coming quarters.

OEMs, we have seen in some of the platforms that we are supplying, we have seen couple of areas where there was some bit of stoppage of lines for their annual maintenance, etc., but otherwise, in terms of market share, there is no major change between both aftermarket and OEMs as well.

Good to hear that, sir. On the industrial side, UPS is plus 5%.

How much would be the decline in telecom, and what would be the share of telecom now in overall revenues? Is it very small because there has been a shift away from lead-acid to lithium?

What would be the lead-acid telecom share now?

The telecom during the quarter, the volumes have declined by more than 45%, Raghunandhan. If you see compared to the previous quarters, the overall telecom share in the revenue has come down significantly.

I think if you see now, that share would be less than 5% as a percentage of the overall revenue because of the transition to the lithium.

Thank you for that. Lastly, just to complete the volume bit, the home inverter, how would be the growth there?

The home inverters, it's grown around 10% on a YoY basis.

Got it. This was very helpful.

Secondly, in terms of the under-recoveries, with the 2% price hike taken in January, would that mean that all the cost-related pressures are covered or would further price increases be required based on the current commodity prices?

See, Raghu, there is a bit of an uptick again after we took this price increase in the month of in the beginning of in the first week of January. While it can cover some portion of the alloy side of it, the the other raw material cost like acid is again hitting us.

Nevertheless, in Q4, if the season for the tubular batteries were to go in the the expected lines, then that's good because of increase in the manufacturing revenue, that could mitigate some bit of margin pressure. At this point of time, if the acid prices also were to cool down during this quarter, I think that should help us.

Right now, we believe, to the extent of alloy price increase what we have seen, this should be sufficient. We had to wait and see how are the other factors how will the balance of the quarter will move on, because lead was also kind of reached 1,900 and again it has moved back to 1,930 levels as we speak.

We had to wait and see how the balance of the quarter operates.

Got it, sir. Very helpful.

On a full-year basis, would lead-acid capex be around ₹700 crore or would it be higher?

On a full-year basis, it can go up to ₹750 crore in this financial year.

Got it, ma'am. ₹750 to

₹800 crore.

₹800 crore. Thank you.

On the capex, Raghu, that could be even including the tubular plant reinstatement. Part of that money is going to come from the insurance claim.

Yeah.

Got it, sir. For next year, FY27, it should normalize to about ₹400-500 crore?

Yes, Raghunandhan, yes. In terms of the lead-acid battery, I think it will be around ₹300 to ₹400 crore, whereas on the new energy side, we may spend around ₹1,000 crore in the next year.

Thank you, ma'am. On the cell capacity side, with the expansion which you indicated ₹280 crore investment on the BESS opportunity, if you can talk about the opportunity, how are you approaching to get orders, how do you see the scale-up, revenue potential, something on the economics, any details you can share will be very helpful.

Raghu, initially, our idea is, as Swajitha has mentioned, we expect the overall market size to grow to about 30 gigawatt hour in the next 4 to 5 years. There are a lot of tenders that have come out and then people have participated in big number.

Going forward, the storage requirements both because of the round-the-clock power requirement from the solar generation side as well as the intermittency in the solar power generation is also required to be mitigated with appropriate storage. We are focusing on the battery energy storage on two major applications.

One is at the commercial and industrial level, which are of smaller-size solutions, whereas at the grid level, it will be a containerized solution with lithium batteries plus the other DC block that will come in. Depending on where the lithium pack levels are and depending on what size of the container that is being required, the per kilowatt-hour prices will vary significantly.

It is difficult to put a particular unit economics at this point of time. The other characteristic of this business is it kind of mimics the pack business because obviously, we'll be importing a lot of content to start with.

Over a period of time, there is a push also because the government also has stipulated certain percentages of BESS solutions that need to be produced within the country. There is also this support for domestic content inclusion.

What has happened in solar, where government has mandated there's a domestic content being used in the solution. That way, I think the business demand is high, and it's asset turnover ratios are expected to be also very high because turnover ratios could be anywhere around 9 to 10 times because of it is being more of a solution architecture being provided by Amara Raja, whereas components will be imported to start with.

Over a period of time, it also paves the way for localizing the other components, particularly the cells used in BESS at the rating of about 314 Ah today. I think once we see that there is a robust demand that's evolving on that, and it will also pave way for us to go back and then make the cells as well.

From a percentage operating margin level, it will be low, but from an ROCE level, I think it should be better as we move into this business. Yeah.

Thank you so much, sir. I'll fall back to the queue.

Good evening, sir. My question is just following up on BESS.

Wanted to understand how you are thinking about competitive advantages in this business, how you are building competencies there, because from what I understand, there will also be fairly high competition given everybody will be importing initially for this. Is that understanding correct?

Second is from cell's point of view, are our existing facilities capable of producing those cells or we need to do additional capex to make those cells? Which chemistry is used here?

Kapil, as far as competition is concerned, I request you to note what has happened in telecom. When we started the whole telecom packs business, there were too many number of players who have got into that business, and then how over a period of time, again today if we look at on a combined lead-acid and lithium basis, we still hold about 55% to 60% of the market with us.

While we definitely agree that unlike lead-acid, the lithium is not a duopoly market, particularly on the pack side today. Over a period of time when we actually see any of these businesses, when the entry barriers are low, there will be too much competition.

Over a period of time, we have definitely realized that there is value that will be provided by larger players who understands the whole power requirements better. Secondly, as you also know, Amara Raja Group is also into EPC business of solar generating stations, they do a lot of work for that.

It augurs also well for us because we'll be able to participate in many of these private tenders as well and then supply the solutions. Moreover, if you look at a 30, 40 gigawatt hour kind of a demand, for the capacity that we are looking at scaling up about 5 gigawatt hour will result in approximately about 15% of the market share.

That I think is a rightful market share for us to really think about, and I don't see that should actually become a serious hindrance. As far as the cells are concerned, this will be an LFP cell.

Current cells that are getting used are 300 Ah kind of a rating, and over a period of time, once we establish our LFP chemistry cells factories, I think one of those lines or one of those factories can actually be the storage side of it. As even in the overall lithium numbers, we expect that at least 30% to 35% of the overall lithium cell demand will be from the storage side, whether it could be telecom or UPS or BESS, etc.

That way, whatever the rating of cells that are relevant for the BESS have to be developed over a period of time. Obviously, there is a time to decide what cell size and what capacity that we need to put up.

Sure, sir. That's very helpful.

Thanks for the detailed answer there. Secondly, on the NMC cells capacity that is coming up this year, how are you sensing the potential to utilize that?

Some of the players even in the two-wheeler space have talked about using LFP also as a technology going ahead. Then we are also seeing some new technologies like sodium also being explored.

Just your thoughts on how you are working on new technologies, what are your thoughts in terms of some of these new technologies as well, and then the utilization of NMC facilities?

See, we definitely hear you. I think that's the same thing what we also hear here not only from two-wheeler customers, even some of the three-wheeler customers as well to whom we are currently supplying packs.

Even then, we believe that the capacity, as even in the earlier calls that we have clearly said that it's not going to be more than 2 gigawatt hour for any this thing. Not only the mobility application, there could be certain high-power cells that could be required even in segments like power tools, etc.

There will not be a problem as far as using this even by today's understanding of the market. In the worst case, obviously future nobody is so certain about.

In the worst case, if at all there is a problem with it, as we have explained earlier also, migrating this whole line to a LFP chemistry is not going to be from a capital point of view very taxing. If NMC chemistry is going to be completely irrelevant, there will be certain at least in the even in the export markets, there could be some demand that will definitely be there for NMC, we don't see a problem of utilization of the capacity at this point of time.

As far as new chemistries that are evolving, that obviously is a very important point for us, and there is a very dedicated team which is looking into the feasibility of those chemistries. As and when they become relevant, we will definitely work on them and then see what kind of adaptation that we need to do for the Indian market.

Beyond this, I will not be able to give you any specific detailing as to at what stage we are with respect to these technologies. Yes, as we know sodium-ion is being talked about, and we also understand that the LFP chemistry is the mainstay chemistry for mobility applications, which is what we have been saying for the last ever since we have started this pivot to a new energy business.

Great. Sir, lastly, just on the overall growth, it was a little soft this quarter.

If you could just share your thoughts on the growth for the different segments as we look ahead. Particularly a little surprising to see aftermarket growth on four-wheelers of only 3%.

What's happening really over there? Similarly, telecom as well, very sharp decline.

Is this cyclical decline, you think, or what's happening there? Same for exports actually, because tariffs were particularly for the US market, where is this impact?

In which markets you are seeing that tariff impact?

See, the two reasons as far as exports are concerned, because last year, we have commenced the supplies to the US markets, and obviously, last year's volumes have that advantage already built into them. Now this year, we are not able to supply any volume in this quarter to the US markets.

Also some of the capacities, for example, in the Middle East and Asia-Pacific market where we are strong, we are seeing the competitive intensity also a bit of on rise, so that there is natural drop in the volumes in those markets as well because there is too much of competition that we need to withstand. I think we are also now trying to look at what are the possible mitigations of it, because America being such a large market, we cannot ignore it for continuously.

Then we also need to understand how do we withstand these challenges from time to time based on the political or other reasons. Whenever there is a challenge with respect to the tariffs or other non-tariff barriers, we need to figure out how to overcome them so that there is that stability in the total business.

There are certain steps that we are taking in that regard, which is where we are trying to now look at to form a small subsidiary to start with and then see how it can help stabilize and then improve our business in US. That's something that we are working on.

I think we are also seeing with whatever announcements that are coming on the trade side, we are hopeful that in the coming quarters, it should kind of smooth an out and then because while it was told that the 232 section will also be reviewed and there will be an announcement regarding it, but we are still waiting for the finer details around it. As and when that becomes a reality, I'm sure we should be able to overcome that.

Now as far as the domestic market is concerned, this quarter particularly if you see both on the four-wheeler and two-wheeler last year same quarter, the aftermarket growth was pretty high. There is that base impact that is creating some bit of an issue, but overall aftermarket battery growth also is, as the industry is only growing at about 5% to 6% kind of numbers.

In the coming quarters, these one-off quarter volume blips will get definitely corrected as we move into the next years. At the industry growth rate level, I don't think there is a reason for us to reassess or get worried about this 5% to 6% number.

I think they still have that kind of a potential to grow.

Sir, on the telecom side as well?

Sorry. On telecom, there is no loss of market share as I have explained some time ago, because though there is chemistry migration happening to lithium, lead-acid volumes are obviously going down.

The capacity is also getting retired to that extent because it is not going to be relevant anymore. Only right now, meager volumes are being supplied.

We know that this is how it's going to happen. In the next 2 to 3 years, if the lithium prices were to sustain at the same levels and there is no abnormal increase, then naturally, you will see that the overall telecom lead-acid volumes will continue to de-grow.

We may see a situation where you may not really need to operate a lead-acid capacity around lithium. As such, now it has become a very small portion of our overall business.

Thank you so much, sir, for the detailed answer and best wishes. Thanks.

Hi, thank you. Just one question.

When I look at this industry, it's a duopoly, and when I look at pre-COVID, the blended margins of the two companies used to be approx, let's say, 14%, 15%. Now we have reached a stage where, I think, the industry margin is at about 11% or so.

Given that it's a duopoly, given that post-GST, branded batteries as a consumer category have become more affordable, do you think the industry will display enough pricing power to get back to the old margin range?

See, I think when we say old margin range, obviously, you need to adjust for the lead base, because it would be difficult if we encourage that we will even at a such a large lead base, if you continue to target a huge margins in range of, let's say, 16%, 17%, then obviously, you are inviting competition from elsewhere, which is what the industry was able to successfully award so far. Naturally, you need to balance that part also when we take certain pricing decisions.

Nevertheless, the current cost headwinds what we are seeing particularly on the metal side, the industry is taking its steps to really recover whatever that is possible to be recovered, and there is also even on the large B2B customers also, there are those discussions trying to see how do we get this cost recovered from the market. I think over a period of time, there will certainly be a margin improvement, but what level is something that while from a company point of view, our target is clearly to move back to at least a 13% to 14% range, but from an industry point of view, obviously, that's not right thing for me to comment on.

That's how I look at it. Yeah.

Sure, sir. Just one question on the OE segment.

Do you have automatic pass-through for lead price for OE contracts or is that subject to negotiation?

Yes, it is automatic pass-through based on the PVC contract that we have. That's only for the lead, not for all commodities.

Understood. Thank you.

That's all I had.

Thank you, sir, for the opportunity. Sir, continuing the BESS opportunity, sir, you mentioned about 9 to 10x is the asset turn opportunity.

For the 2.8 billion capex, is it this 5 gigawatt kind of opportunity, something like a 2 to 3 billion kind of a 20 to 30 billion kind of revenue opportunity, sir?

See, ₹280 crore should give or take give about ₹2,800, ₹2,700 crore kind of a revenue, assuming the current cell prices. Obviously, if cell prices change, even that will change.

Got it. Got it.

Just want to understand, as of now, any orders there in place? Over next few years, what kind of ramp-up do you see for this utilization for this new capacity?

As it will be a slow ramp-up. As currently, there is so far if you look at the supplies, it will not cross even a gigawatt hour.

There are multiple tenders that are being floated, and there are requirements evolving thick and fast because our own country's solar capacity target itself is about 500 gigawatt hour. Naturally, in the long term, this will be a larger play that will come into picture, and there is a good reason for us to be in this segment because it not only helps the solution business, it also helps the eventual cell manufacturing side as well.

Got it, sir. Sir, you mentioned about as a solution, along with the battery packs, what goes along with that, sir?

There are other DC blocks, which basically act as inverters, etc. While I cannot give you a technical description of it, there are other electronic components that will go into it, which also currently are getting imported, but over a period of time, there is both a policy push as well as possibilities of localizing them internally.

Got it. This ₹280 crore will be spent in next one year, sir?

Most likely we will complete this by end of next financial year.

Got it, sir. Sir, on this quarter, gross margin movement, sequentially, we have seen a contraction.

Is it largely due to the increase in alloy prices or any other factors, sir, for this decline in gross margin?

Majorly around the material and the mix, while there are certain other expenses that we are continuing to provide for. Also, as the tubular factory also has kind of commenced its operations last quarter, there is some bit of initial ramp-up admin cost and employee cost also hitting our P&L.

Materially, it is around the raw material costs, which is actually impacting it.

Got it, sir. Thank you, sir, for the opportunity.

Thanks.

Hello, am I audible?

Yes, ma'am. Please

go ahead. Thank you for taking my question, sir.

I wanted to understand our growth in the lithium-ion, especially the telecom side. I wanted to understand, can we grow as we did in the lead segment?

Also, one more question: Are we trading and not manufacturing in this segment?

On the telecom packs, currently, we are trading them because we buy the cells and then we convert them into pack. Pack manufacturing is what we do and then we sell it.

From a growth point of view, it depends on the speed of migration from lead-acid to lithium by all the telecom players that they are looking at. As recently, the lithium prices are also hardening, how that will change the unit economics for them is something to be seen.

By and large, we believe this migration of chemistry is something that it is here to stay.

We do expect good growth from this segment?

As I said, that will depend on the migration plans of how many sites they want to migrate in a given year and what kind of chemistry change that the telecom tower players are expecting. We expect that the telecom volumes, whenever this migration happens, lead-acid will come down and lithium will, to that extent, increase.

Sir, I wanted to understand, what is our current market share in the telecom lithium-ion market?

As I said, both lead and lithium put together, we are at about 55%.

This is heavily skewed by lead?

No, I think right now with the kind of reduction what we have seen in lead, I think in lead, obviously, we will be having higher market because there are only two players. From a market share point of view, lead market share will be higher.

What is important is what's our sectoral presence with both the chemistries.

Sir. Thank you.

My second question is on UPS. Are we planning to expand into lithium-ion battery?

What are your thoughts on capturing the data center market, especially given the current demand?

Right now, data centers are definitely having that chemistry preference towards lithium, but currently, we are supplying our lead-acid batteries to other segments within the UPS application. Right now, the lead-acid batteries are growing at about 5%, while I'm not able to confirm any immediate plans for cell manufacturing on the UPS side, we are trying to see if there are other packs that we can work on the storage side of it.

One of those steps was on the BESS side. As and when we get into any specific application on the UPS, we will let you know.

We don't have immediate plans to manufacture both telecom and UPS lithium-ion batteries in-house?

No, when you say batteries, that's what we are doing today. It's obviously the cells part of it is something that we have to look at, whether the scale that is available in India is a viable scale for us to really put up a cell manufacturing.

As cell manufacturing is quite a capital-intensive story, and then we need to have the required scale for us to justify that kind of an investment. Those calls will be taken at an appropriate time, but I don't have a specific input to share you whether we will do it or not.

Obviously, it is in our radar, but those decisions have to be taken at an appropriate time.

Sir. Just last question from my end: How are we anticipating further margin impact from rising raw material prices?

Sorry, can you repeat that?

How are we anticipating further margin impact from rising raw material prices?

As I have mentioned earlier in the call, we have taken some price increase during the current quarter, so that should help us mitigate some bit of this problem. We also need to see how the lead moves in the balance period.

If all costs sustain at this level, then we may have to think about if there is a need for any other additional price increase depending on how competition is behaving. Right now, we are again seeing jumps in the things like acid, etc., which we will see how to mitigate as we move ahead.

Okay. Thank you, sir.

I'll join back the queue for further questions.

Hello. Am I audible?

Yes.

Firstly, my question was on margins. If we go to the numbers, if we compare YoY basis, there is a significant dip in net margin.

Could you just clarify on that? I know you have mentioned in the starting regarding the EPR liability and the OEM product mix.

I just want to understand in detail what exactly was the reason behind it.

I think we have discussed almost three, four times on the same margin question. I don't think I should repeat myself again and again.

Clearly, we have said the raw material cost and the other expenses that we have had in this quarter along with the OEM mix is the reason for this. To compensate some of these impacts, we have taken the price increase.

I think we have said that. I don't know if you have any specific details that you want to note, then maybe if you can be more specific, then I'll try to address that.

No, that works, that works. I just wanted to know about the battery recycling plant, is it in line with no battery breaking starting from Q4 FY26?

Yes, yes, yes. The battery breaking is going to start from Q4.

As Swajitha has articulated earlier, the refining operations are providing that additional margin comfort at this point of time. We hope after the battery breaking gets into full shape, I think we should see some mitigation of the lead cost that we are currently incurring.

We'll come back to you as and when those operations are up and running as to what impact that they are making. Of course, recycling operations are always kind of lower margin business, we hope with the technology what we have put in place, our recovery ratios will be better, and then we'll be able to improve our overall operating margins for the lead-acid business.

Got it, got it. That works.

Thank you.

Hello. Hello.

Yes.

please go ahead.

Yes, thank you for giving me the opportunity. I think, sir, my name is Meet, and last time, I have also asked the one question related with the revenue.

At that time, you said that we are at the 10-year highest ever revenue, and that is good, what really I can appreciate. When we are talking about growth percent as percentage, we are just seeing the single-digit growth.

Although the last quarter, government has introduced the GST rate cut in the automobile segment, when we are seeing that the growth are we can easily see the growth in the automobile sorry, car and related vehicles where they are increasing the sales, but we are not reflecting. Although we are selling our batteries, but why it is not reflecting?

This is one thing. If we are growing at the these kind of 5% to 6% sales, then why our quarter-on-quarter EPS is not getting visible?

If we exclude exceptional item which you have taken at 230 if we exclude that, then last quarter, we did at ₹235 crore for the profit profit point of view. This time, we directly come at the 151 only.

Sudden drastic drop at 45%. Everyone is talking about sales growth, that is good.

Why we are not converting that to the EPS part? That is my question.

Are we thinking like only single-digit EPS growth only? We are not focusing on double-digit sales growth and the profit growth?

This is one question, sir.

I don't know when did I say that we are not focusing on growth and profitability. That obviously is the focus for any company, for that matter.

As just because there is an OEM growth in a given quarter, if the OEMs are growing, which is why even our OEM business has grown by almost 25% this year, this quarter. For the aftermarket business to reflect whatever OEM growth that is being happening today, it will take at least three years hence.

Now the second point that you asked is about the margins. The margins, we have clearly explained why there is headwinds on the costs and what we are doing towards mitigate this as well, I have already explained in the call.

In addition to this, I want to add one point that without adding much of additional capex, we are trying to improve our own capacity throughput. Thereby, without spending more money, we'll be able to sell more batteries in the coming future.

From our future growth point of view, we know that we are trying to grow at least a percentage point ahead as far as the domestic market is concerned, and we are trying our best efforts in terms of increasing our international footprint, which is where we are facing certain headwinds. If our export business, like we projected earlier, were to grow at about 10% to 15% kind of a CAGR, then obviously, that will also reflect better in the overall margins.

Currently there are certain cost headwinds where we are facing, and then there is a margin dilution at this point of time. As you also understand, the lead base over the last three years has kind of improved from about ₹1,50,000 to about ₹2,10,000.

Even the alloy prices, which used to be around 160, 170, is now at about ₹2,20,000. There is a time and pace at which the industry is working on recovering from these cost headwinds.

I'm sure we are in that direction of improving the overall EPS over a period of time, and we have taken the decisions in line with those expectations.

Sir, if I take follow-up question on this only, we have just reduced 2% operating margin percentage. Also we are discussing about export-related, we are mainly focusing on 88% at domestic level only.

So 90% are of the domestic part only, and 12% we are just exporting. If we cannot focus on the foreign export, still we can do the better.

In the December 2024, you did sales ₹3,164 crore to currently we are at 3,351. Approximately ₹200 crore sales increase, and expenses are also ₹200 crore increase.

Why expenses are increasing in a similar way as the sales, but it is not directly reflecting at the EPS growth? That is actually my concern.

It should be reflected because

Please go ahead. Yeah.

If we take about the 10-year EPS growth, then we have not done anything. Just 8% growth, which is not able to beat at least 1% or 2% we are beating with the FD returns.

What is our business advantages? That is my point.

My request also is for you to look at the consolidated results, because consolidated results also have the lithium business. There are expenses that we are incurring towards the lithium-ion business development.

If you are following the company closely, we are spending close to ₹100 crore on the lithium-ion development and other construction activities that are currently going on. The second point is your suggestion that we should not focus on exports and then only focus on domestic market is well understood.

I'll try to see how viable that kind of a suggestion for our business context, because as we see the Indian market, growth is at a given level. Naturally, for us to really look for higher growth and better profitability, because foreign markets require AGM batteries, which are a better profitable business.

That's the reason we believe there is reason for us to really grow internationally. Your suggestion is understood.

We'll rethink about it.

Thank you. Thank you so much, sir.

Thank you for taking my question again, sir. It is again on the telecom side.

You mentioned that we'll start manufacturing cells once you see a better demand. Since you mentioned that there has been a chemistry shift from lead to lithium, which is prominent, what is stopping us to have in-house manufacturing of cells?

No, I have not said better demand. I have said that size, because for lithium, with the capital intensity what we will have, we need to have a given scale for a given cell type.

As and when we see that there is that and also you should understand that the lithium replacement cycle is not as fast as lead-acid. Taking that into account, we need to see whether that is the right time for us only thinking about a cell only for telecom, because if you look at the entire telecom today, if you were to convert into cell demand, it will not cross 3 gigawatt hour.

For that capacity alone, if you put up a cell capacity and then if you were to compete with other players also, will it become a subscale, or are you able to find a cell which is common with telecom as well as other applications? As and when we see that potential is when you should invest capital behind it.

Otherwise, you will be doing a subscale activity and we will not be able to be cost competitive.

Okay.

Thanks. Thanks, everyone, for joining the call.

See you next time.