Thank you, Swapnali. Good afternoon, everyone, and welcome to Pondy Oxides and Chemicals Limited's earnings call to discuss Q3 and 9-month FY '26 financial performance.

Today we are joined by Mr. Ashish Bansal, Managing Director; Mr.

K. Kumaravel, Director Finance and Company Secretary; Mr.

R. S.

Vaidyanathan, Executive Director; Mr. Vijay Balakrishnan, Chief Financial Officer; and Mr.

Prateek Gupta, Associate Vice President, Operations. We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risks that the company faces.

May I now request Mr. Ashish Bansal to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A.

Thank you, and over to you, sir.

Thank you, Sana. Good afternoon, everyone, and thank you for joining us for POCL's Q3 and 9-month FY '26 earnings call.

I hope you had the opportunity to go through our financial disclosures available on the exchanges. I will walk you through the key strategic updates, operational progress, and financial performance, followed by a Q&A session.

I'm delighted to report that POCL has delivered its strongest ever quarterly and 9-month performance, driven by disciplined execution and operational efficiency. On a 9-month basis, revenue, EBITDA, and PAT increased by 33%, 96%, and 114% year-on-year, respectively, supported by substantial growth in both production and sales volumes across our lead and copper business.

I would want to mention that the India-EU trade deal serves as a structural catalyst for POCL, enhancing our global price competitiveness, securing long-term demand visibility, and solidifying our status as an organized, compliant leader capable of meeting Europe's rigorous sustainability standards. On the domestic front, the regulatory environment continues to be supportive for organized recyclers with stronger enforcement of BWMR and EPR frameworks, enhancing accountability and producers, recyclers and collection agencies.

This has led to more efficient collection mechanisms, reduced leakages to the unorganized sector, and improved traceability across the value chain. These measures have materially strengthened domestic scrap availability, enabling higher local sourcing.

Before delving into the numbers, I'd like to begin with key strategic developments that are shaping up our growth journey. Our capacity expansion update.

We are making steady progress on our capacity expansion roadmap. The second phase of lead expansion project adding 36,000 metric tons per annum was commissioned and became operational in December 2025.

As a result, the total lead capacity has increased from 132,000 metric tons per annum in FY '25 to 204,000 metric tons per annum, representing an increase of over 50%. The lead capacities are expected to ramp up to 70% in the coming quarters.

Our copper recycling capacity is set to double from 6,000 metric tons per annum to 12,000 metric tons per annum by the end of Jan 2026. During 9 months FY '26, POCL invested around INR 25 crores in capital expenditure and expects to deploy additional INR 35 crores in the last quarter of FY '26.

POCL's board has approved the amalgamation of its wholly owned subsidiary, POCL Future Tech, into the parent company, subject to regulatory approvals. The merger strengthens vertical integration in plastic recycling, improves cost efficiency and cash flow management, and creates long-term value for POCL without any equity dilution or cash outflow.

We have shifted POCL Future Tech from the leased premises to the Thervoy Kandigai facility during the quarter. The facility is now operational and production has commenced in the facility.

Coming to our operational performance, the procurement mix for 9-month period comprised approximately 70%, 59%, and 100% imports for lead, plastics, and copper. There is a significant increase in sales of copper by 15 times on 9-month basis to INR 296 crores.

The production of lead has increased by 23% year-on-year to 83,746 metric tons on a 9-month basis and 57% year-on-year and 26% quarter-on-quarter to 33,271 metric tons on a quarterly basis. EBITDA per ton of lead increased significantly by 46% year-on-year to INR 18,086 per ton on a 9-month basis, by 39% year-on-year to INR 17,427 tons, 17,427 rupees per ton on a quarterly basis.

Moving to financial performance, I would like to reiterate that POCL has continued to deliver consistent performance, resulting in its highest ever quarterly and 9-month revenue, EBITDA, and PAT. On a quarterly basis, revenue increased to INR 776 crore, up 22% quarter-on-quarter and 55% year-on-year.

On a 9-month basis, revenue stood at INR 2,007 crores, reflecting a growth of 33%. This growth was driven by improved capacity utilization and higher sales volumes across both lead and copper segments.

Export contributed 67% of total revenue, reflecting POCL's growing global presence and customer confidence. On a 9-month basis, value-added products accounted for 65% of lead segment revenue, supporting the company's long-term target of achieving over 60% contribution from value-added products.

EBITDA increased by 122% year-on-year to 59 crores on a quarterly basis and by 96% year-on-year to INR 157 crores on a 9-month basis. EBITDA margins remained strong at over 7%+ compared to over 5% in 9 months FY '25.

PAT more than doubled on both quarterly and 9-month basis. On a quarterly basis, PAT increased by 148% year-on-year to INR 38 crore, while on a 9-month basis, PAT rose by 114% to INR 101 crores.

On 9-month FY '26, PAT margins improved by to 5%, up from over 3% in 9 months FY 2025. On a consolidated basis, POCL reported strong performance with revenue, EBITDA, and PAT growing by 32%, 94%, 128% year-on-year, respectively, on a 9-month basis.

On a quarterly basis, these metrics increased by 53%, 119%, and 167% year-on-year, respectively. In conclusion, POCL remains aligned with its target 2030 vision supported by a clear roadmap focused on value creation and sustainable growth.

The company continues to scale its lead and copper capacities while expanding into adjacent non-ferrous segments with an objective of delivering 20%+ volume growth and 20%+ CAGR in revenue and profitability. Growth will be supported by margin improvement with a focus on maintaining EBITDAs margins above 8% and ROCE above 20%.

Alongside scale and strategy, it emphasizes operational efficiency through innovation and modernization with a target of over 60% revenue contribution from value-added products and 20%+ reduction in energy consumption, backed by a net cash balance sheet, a disciplined execution, a supportive regulatory environment, extensive land bank, experienced leadership, and stakeholder support. POCL is well positioned for long-term sustainable growth.

That concludes my update. I'd now like to open the floor for questions.

Thank you.

Hi, sir. Thank you for taking up my question and congratulations for a great set of numbers.

Since you're ramping up your capacities in copper, which has a little lesser EBITDA margin compared to lead for '27 and '28, how do you see the EBITDA margin guidance that you've given of 8% on consolidated basis?

Hi, Dheeraj. Thank you for your question.

We have always guided our margins to be in the range of 7% to 8% EBITDA, and these will continue as we're increasing the copper capacity as well, which is currently at a lower EBITDA range, but we'll also be adding on products on copper, as explained in our earlier calls, which will also have higher margin. The blended margins will remain in the range of 7% to 8%.

Sir, what could be the range of copper EBITDA per ton, including once your 6,000 tons is expected to commence?

I will not be able to give you specific on those numbers right now, but we'll keep you updated as we announce the products.

Got it, sir. Last question is, what is the volume sales of copper during Q3?

Dheeraj, the volume sales for copper is about 1,235 metric ton for this quarter.

Sir. Okay.

Do we think that this EBITDA per ton going to continue for copper that we have clocked in 3Q, or will it improve?

Right now for the recycling, it is in the range of INR 35,000 per ton.

See, I'll put it this way, Dheeraj. The copper, as you're noticing, the whole copper market is going through an extremely volatile phase.

When any metal, which almost close to 40%, 45% just shoots up in a vertical manner, overall industry, it takes a little bit of time and momentum for it to absorb these kind of price increases and which have to flow down eventually to the end consumers. There is always a slight margin shrink.

Once these things start aligning and people start accepting these higher, elevated prices, the margins start falling back into the regular ranges. That is the whole transitional period, which, again, should be sustainable.

Got it, sir. Thank you.

Congratulations for the good results again.

Thank you, Dheeraj.

Yeah. Congratulations, sir, for excellent set of numbers.

Now my first question was related to our utilization, actually. Can you tell me what is the utilization of the 32,000 tons per annum that you commissioned in Q1 and the 132, which was the old capacity?

What is the capacity utilization of 168,000 tons right now as of this 9 months FY '26?

Sagar, this is Vijay.

See, overall if you see

the lead capacity utilization for this 9 months ended is about 70%. For this quarter alone, it is about 79.2%.

For copper for 9 months, about 74%, and for this quarter alone is about 86.2% on an overall basis for this quarter.

Okay. Basically we are at the peak of the capacity as regards with 32,000 tons per annum, which is recently commissioned, right?

36,000. You're able to get those capacities only in the last month of previous quarter.

That's when it was commissioned.

Okay. Now the growth will be largely led by the new capacity, the 36,000 tons, which is just recently commissioned.

More or less, yes. Now

coming on to the plastics one, actually I see our capacity utilization coming down to almost 31%. I understand that you're shifting your capacity to the new premises.

As far as the demand is concerned, I wanted to understand that what exactly are we seeing there? How is the demand shaping up, from which industries?

How are you placed up as far as FY '27, FY '28 is concerned? I think so that is the reason you are not raising capacity also in that particular segment.

Sagar, if you see in the past also, our quarterly capacities or the sales in terms of copper is about approximately 850 to 900 metric tons per quarter.

Right now we see

the demand is very soft. Going forward, the 800 metric ton probably will increase to 1,000 the coming quarters.

That is what our plans are.

We'll be slowly looking at trying to build those volumes. Currently, what we saw in the last quarter, the whole market demand was pretty much on the softer side, along with softer prices and offtakes as well.

Okay. This market was largely led by automotive or non-automotive, sir?

It is a mix of both, automotive and non-automotive, and yeah, and also largely a little bit led by the primary material price also coming down quite a bit in the domestic market.

Okay. Now my last question, sir, was related to Mundra, most importantly, which we are actually waiting for.

I saw your utilization proceeds also. You hardly have left with around 13 crores of money left from your QIP proceeds as well and also from your pref allotment, because largely you have spent on the new capacity.

I wanted an update that when exactly are you planning the expansion in Mundra plant? Because it's been almost 2 years since you have purchased that land, 123 acres.

What's the progress in that land? What are you eyeing?

What kind of plants are we getting there? Have you built the entire ecosystem?

It's near to the port, also. What is the actually thought process behind that expansion?

Because that will be the major growth driver for POCL if I'm not wrong in the years to come.

Sagar, currently, as indicated earlier as well, we will be looking into Mundra only in 2027. That is now once our copper expansions are completed by this last quarter of 2026, FY '27, and post that, the Mundra land capacities will be this thing.

Definitely, we will be looking at the existing businesses that we have and also some fresh business. Currently, our thought process is to have little more capacity of our existing lead and copper business in Mundra.

Like you said that having an advantage and also having better reachability and freights towards the European and Middle Eastern markets, that will also serve as a driver for us to enter those markets.

Basically, are you referring to FY '27 or calendar '27, sir?

I'm referring to second half of calendar year 2027.

Calendar year,

for

financial year FY '27.

After the completion [unclear]. We will start by then.

Okay. Oh, because the thing is, in the free cash flow also, you're going to generate over 100 crores of free cash flow this year and also correspondingly next year.

I think we have lot of cash left, also.

Yeah. Even though we have used quite a bit of our QIP funds, all of those, but every year we are generating cash surplus as well.

These are going back into investments for our expansions and all of those.

Okay. Yes, right now after this your major focus will be towards the forward integration of the copper segment, the products that you are eyeing actually, which will be margin accretive if I'm not wrong, right?

That's true. That's right.

Okay. Sure, sir.

Thank you so much, and all the best.

Good afternoon, sir. Thank you for the opportunity and congratulation on very good set of number.

Sir, my first question pertains to the sourcing. Given the commodity prices are kind of a pretty volatile and actually moving in upward direction, are we experiencing any problem with the sourcing because When

commodity prices moving up vertically, in fact, sourcing tends to become a little better because everybody wants to get rid of the scrap that's available to them when they get a higher price. That is actually technically a better scenario to source more scrap.

As of now, no such problem we have faced in terms of sourcing? Because sometimes the hoardings kicks in.

People think that they would get a better pricing if they sell at a later stage. Nothing that sort of is happening, right?

Vikas, you see what happens is, drastically price drops, like I explained to Dheeraj in the initial part of the call also, when there's a sudden rise or a sudden drop, market pauses a bit to re-understand and realign, and then it gets back into the whole cycle. How long can anybody hoard a material?

Pockets are not continuously deep enough to keep hoarding material or keep waiting for the high or low side of it. This is a trade, trade cycle has to resume.

Definitely sometimes there is a pause in between, and then the whole cycle starts resuming back again.

Noted, sir. Sir, my second question pertains to our lead EBITDA per kg, if you could share that.

Also, given that the prices are moving in copper as well as other segment, shall we assume that since this scrap is as a certain percentage basis, our EBITDA per kg in all these three segment is going to go up in the subsequent quarters?

Irrespective of the price movement, our EBITDA per ton for lead will be in the range of, as in the past we said that, INR 15,000 to INR 17,500. It's a sustainable EBITDA per ton irrespective of the price movement.

Even for copper as well, for last quarter, the per kg increases about INR 100 per kg. That is why you can see a slight drop in your EBITDA percentage.

In terms of per ton basis, the amount remains that INR 35,000+, which we have already informed you.

Noted, sir. We are not baking in any improvement in overall per kg basis, right?

The more the value addition in terms of, as Mr. Ashish said, in terms of copper, the EBITDA per metric ton will increase once the forward integration happens, which we will do in the next financial year.

Coming financial year.

Coming financial year.

Noted, sir. That's all from my side.

Thank you.

Yeah. Hi, sir.

Congratulations on a good set of numbers. My question was regarding copper's capacity.

You said for this quarter, we've done 12 1,235 metric tons per metric tons for copper. How much would be for 9 months, sir?

9 months,

sir. 9 months, sir, the overall volume is about 3,308 metric tons of out of which, 6,000 is a overall capacity.

If you take on a, average basis, then it is the utilization is about 74% pro rata basis.

Okay. How much production can we expect for the coming year, FY '27?

FY '27, we are targeting a minimum of 12,000 metric tons, but would be definitely higher than that.

You will be doubling your capacity to 12,000 tons for FY '27 if I'm not mistaken. Then the capacity utilization, you're saying, would be 100% for 12 for FY '27 at 12,000 metric tons?

Through the year also there are other capacity that are getting added. That will be a continual process.

As of now, in this last quarter, the capacity that we're adding is relating to 12,000. It will increase from 6 to 12.

Okay. Would you be able to shed some light on how much capacity would be added in FY '27 for copper?

Vijay, the number?

We'll be updating those in the future announcements that we have.

Sure, sir. Thank you so much for this.

That's all from my side.

Hello.

Am I audible? Yes, you are audible.

Yes.

Congratulations on good set of numbers. I just had a couple of questions.

Your balance sheet size is significantly increased if I compare as on December end. What has led to the expansion of balance sheet size?

There is an increase in the current assets. Typically, inventory has increased by about INR 75 crores.

In terms of there are some refunds that are expected from the government authorities is in the tune of about INR 75 to INR 80 crores. This has led to increase in our balance sheet numbers.

What is the nature of refunds from government?

This is regarding export with payment of duty wherein we procure domestically, the IGST part of it, we claim as a refund from the government after paying the duty.

Understood. Also, Vijay sir, what's the cash on the books as on December end?

It's about INR 35 crores.

Understood. My second question is related to the employee cost.

Now if I see, the size of the business has significantly increased, but Q-on-Q, our employee cost is on a downward trajectory. What exactly is the reason for this downward trajectory?

It is not downward this thing. Actually, in the second quarter, we paid increment for the employees with arrears, along with incentives also we paid for the last year performance, which is accounted on paid basis.

Because of that, second quarter employee cost is comparatively higher than the third quarter employee cost.

Understood. Thank you.

That's it from my side. All the best.

Hi, sir.

Hope

I am audible. Congratulations on the good set of numbers.

Just wanted to understand your view on the aluminium side of the business. What are the numbers that we have done over 9 months, and how should we look at going forward?

Aluminium is not a segment that we are technically concentrating on specifically. There are not much of numbers that we are technically doing on aluminium side.

It is a very small number, which is about 7 to 10 crores. That typically is not by doing the aluminium business, but ancillary when you do a lot of scrap, you do generate some few other metals, so that gets just added on.

Typically, there's no concentration as of now on aluminium at all.

Got it, sir. How should we look at lead?

Because capacity expansions have been announced by 2, 3 players now. Is the demand still there?

How should we look at the segment for next 2, 3 years?

I will not say the demand is explosive, but demand is consistent. For India, we are looking at anywhere between 5%, 6% of incremental demand and also the demand that comes from your regular replacement demand of existing batteries and vehicles.

Internationally, about 2% to 3% is the growth. Okay.

Got it. By FY '28, what should be our lead capacity with all the expansions that you have announced till now?

As of now, our capacity is 204,000 tons. Once we are doing any further expansion, we'll make an announcement and keep you updated.

Got it, sir. In Q4, you could see some margin pressure with the copper plant also coming up now, or it would be in Q1, the ramp-up cost coming up?

No, the margins are pretty similar. There is no margin pressure.

It is more or less in similar lines of guidance of 7% to 8%, and we have achieved that.

Got it. I'll get back in the queue.

Thank you. Thank you.

Yeah. Good afternoon, sir.

Thank you so much for the opportunity. Firstly, I just wanted to understand what was the reason for decrease in the gross margin in the current quarter compared to the previous quarter?

See,

I will tell this as two-pronged. One is that if you see our procurement mix, last last quarter is about 85% imports and 15% domestic.

This quarter, it has significantly increased to, imports is about 70%, and domestic is about 30%. There is a shift in the procurement mix.

Apart from that, the value-added component, which was typically 70%, this quarter, it has reduced to, 55%. That is also one of the major reason why your margin margins have dropped.

Despite these two, the despite these two factors, the EBITDA margin is that still at 7% to We have We have delivered the EBITDA margin 7 7% to 7.5%. That is what we have already, on a sustainable basis, we'll be able to do it.

You expect that the 13%, 14% that you used to do in the previous you will be able to catch up that particular margin in the coming quarters or years?

We have not done 13%, 14%

He's talking about material margin.

Material margin, last quarter was of course 14.6%. That also depends upon your product mix, your procurement mix.

This is a commercial decision, sir. Overall if you see, due to volumes, you are able to get the advantage of our fixed costs.

Apart from that, you have operational efficiencies. Our new plant is in line.

We have phase 1 and phase 2 is also live. All put together, we have confidence that we'll be able to deliver EBITDA margin in the range of 7% to 7.5% in lead.

Absolute value of the profitability is increased considerably over the period.

Understood. Secondly, on the press release that you have mentioned about the provision of the mark-to-market of 7.28 crore, I think it's related to any derivative contract that you have been hedging for.

Just wanted to understand on the hedging part of your copper basically. How is the whole contract you serving it?

You used to fully hedge your copper sizes, or what is your strategy on that side?

We used to hedge our copper this thing. Since 100% of our copper volumes are hedged, and if you see from last quarter to this quarter, there's consistently incremental volume.

That mark-to-market difference of the incremental volume is what is reflected back, which is currently a moving position. As the sales happen, those profitability keep coming in and the next positions keep coming in.

When there's an increase in volume that much difference and the market has gone further above that, there is a mark-to-market difference.

It is a point of time figure as on 31st of December 2025.

Yeah. In previous year quarter, there was any such provision as of now, or it was the first time that you have been making a provision for the mark-

Every quarter some provision we are making, but the amount will vary. This time, it was a larger thing since the copper movement has been pretty vertical.

Also, a little bit mark-to-market on the rupee side as well.

Understood. Lastly, I just wanted to understand on the EBITDA per ton for the lead specifically.

If you compare with the other players, they are doing very wonderfully high, about 20,000 per ton they are able to. Any thesis that we can also achieve on that side, given that we have a very good capability and value-added products kicks in significantly?

We'll not be able to comment on other peers, sir. See our thing is very simple.

What we have said, the EBITDA per ton will be in the range of INR 15,000 to INR 17,500. In fact, if the value addition component increases, probably it will increase by INR 1,000 or INR 1,500 extra.

That all depends Once again, I'm reiterating, it depends upon your product mix, procurement, everything determines the number. The

overall, like we promised, is 7% to 8%, which will definitely be maintained.

Understood. Thank you so much for answers.

Thank you.

Yeah. Thank you for taking my question.

Just on the lead EBITDA per ton for this quarter, understand that the new capacity had a lower share of value-add products. Is that the only reason why the EBITDA per ton this quarter was lower?

Do we expect this value-add share to go back to Q2 levels and we should be around INR 19,000 per ton mark for Q4?

See, there's two reasons. Definitely, yes, because the value-added product mix was slightly lower.

That definitely did bring down a little bit of the margins. Apart from that, we had increased a little bit of our domestic procurement on raw material, as we want to slowly start sustaining our domestic procurement footprint, where the current domestic prices were a little bit on the sharper side.

That also led to a little reduction in the EBITDA per ton. Going forward, we are looking at this should be stabilized and should be in better numbers and should be able to achieve the head side again.

Okay. Just on the fact that this mark-to-market 7.28 crores, I think the gentleman earlier asked this question.

Here if our sales increase, suppose for example, if the sales in Q4 are up substantially for copper as well on volume basis and the prices stay around similar levels or higher, then this reversal will not happen in Q4. It will take some time.

No, it's not, Mitesh, it's not that specific manner the way you are looking at that every time there will be a volume increase. It is a point in time when you hedge a particular quantum of metal, and then from there where the market moves.

When the sales happen, that it gets reversed. It is a point in time moving figure.

It's not necessarily that every time the volume increases, there will be a huge negative mark-to-market.

Got it. Okay.

Then what let's say this reverses, then this will show up in what line item will this show up in?

Again, same mark-to-market only.

This is currently bringing down the profitability, right?

It will be sort of getting The profitability will get added up. Yes.

This is accounting standard requirement that is not in our hand. That is to be accounted like that only.

The moment it is converted, either it's a part of your sales or it's a part of your costing.

Costing, raw material costing or MTM. That's all.

Lastly, I think in your initial remarks, you mentioned that the EU FTA agreement is positive for you. Understand there is a lot of sourcing and selling that goes from Europe and into Europe.

Considering what are the sort of duties that we are paying currently, and what it could be the benefit in terms of both procurement and selling for our business? See,

what happens is the whole ecosystem starts opening up. Right now when you imported from India, there are customs duties and other import duties that they have.

Going forward on metals specifically, they have indicated they will make it zero. That opens up as a very good and competitive market for Indian material to start flowing into EU.

We definitely already have approvals with quite a few of the customers, but it was only opportunistic business when we were able to sell to them. Once these agreements and FTAs are in place, this would turn back into a sustainable long-term business.

Apart from this, this also gives us one more good reason to look into the Mundra side of it because operations from there towards the European side and Middle Eastern side become much more feasible.

On the procurement side, when you import scrap batteries, is that something that is sort of

Currently, you can't import batteries from EU region because they're not allowed to be exported to India from EU. Hoping that because they do not have the recycling capacities currently and they are piling up the battery scrap, hoping with these agreements, maybe some EPAs or something could be done with them, and that could be another opportunity of sourcing.

That we will have to wait and see how it translates in the few coming months.

Got it. Great.

Thank you, and best of luck for the coming quarter.

Thank you, sir.

Hi, sir. Am I audible?

Yes, sir.

Congratulation for good set of number, sir. Most of my question has been answered.

Just last question on the working capital cycle. How is our working capital cycle goes forward considering current expansion?

What is the sustainable inventory and receivable days and all this, sir? See,

quarter-on-quarter, we have set our own targets. For the last quarter, it's about 47 days.

This is including lead as well as copper. We are seeing a substantial reduction our working capital cycle.

Moving forward, it is expected to sustain at this levels. As for inventory, 200 230 to 250 crores will be a number which we can expect by year end.

What about receivable days, sir?

Pardon?

Receivable days.

Receivable days, right now it is about 15 days.

Okay. Sir, the last question on our copper side, could you please guide what is the current EBITDA margin per ton on our current production level?

The current for 9 months, it is about 34,361. For this particular quarter is about INR 35,325.

This is our EBITDA margin, right, sir? Absolute.

Yes.

Sir. Thank you very much for answering questions.

Thank you, sir.

Hey. Thanks for taking my question.

Just to understand, the nature of your value-added product sales that you report, typically it would mostly be OEM sales, right?

Yes, that's right.

The new capacity which has come up, which is essentially 132 going to 204, to sort of get OEM sales from this capacities, how long will it take, you feel? There's be a timeline to sort of place incremental volumes to OEMs coming out of this lines, right?

Do you also think along this lines, and there would be a period, right, say, 1 quarter, 2 quarter, 3 quarter?

Basically, for this, in the first phase, which was 36,000 tons, which was already commissioned, for that, the value-added products orders have already been secured, and those contracts start now starting Jan, Feb, March for this financial year. We have some smaller options to take up little more volume, but I would not say 100% of that 36, balance 36,000 tons volume in terms of value-added products.

Definitely since they're already approved with them, we can try and expect and push for a little bit of volume increase on the value-added part as well.

Got it. The incremental volumes that we are seeing quarter-over-quarter in Q3, we are seeing almost in terms of sales 22,000 tons of additional sales coming in quarter-on-quarter in Q3 over Q2.

Large part of that would not be OEM sales, right, because those volumes wouldn't have gone to OEMs yet?

No, quite a bit of that is to the OEMs as well. It would be sometimes we route them through another channel that we have as well.

I'll say about out of that incremental sales, almost 60%, 65% is to the OEMs.

It's 60%. Okay.

If you're routing it, say, through Trafigura or other traders, then you will not get the volumes, right? You would not get the margin.

It doesn't work that way. Our contracts are a little differently done and not like our industry peers.

We have a direct, I would say a direct contract where we route it through one or two of these traders, and we have certain pricing benefits. We have some other options that we work around.

Okay. Lastly, just to end this thought process, for Q4 over Q3, volumes will go up.

Will value-added go up, or you feel value-added will sort of stay the same with those higher volumes?

Value-added will go up. We've already secured a decent amount of volume orders.

Okay. That means that there can be an uptick on the margins, right, everything else remaining equal?

We'll maintain the guidance that we have given on the margins.

Okay. Got it.

Thanks. That's all from my side.

Wish you all the best.

Thank you, sir.

Hello. I just wanted to understand the implications of a rising or a falling copper market on our EBITDA per ton and also on our balance sheet from that perspective if there is either a vertical rise or a vertical fall in copper.

Could you repeat the question? It's a little unclear.

Sorry.

Is it better now?

Little bit, yes, please.

Okay. I want to understand what would be the implications of any volatilities in copper prices from both the P&L perspective, I think this has been alluded to, but if you could just repeat for my better understanding, and also from a balance sheet perspective.

Inventory [unclear] So, basically, in terms of balance sheet, inventory is always at the purchase price. It is not this thing.

The differential, whenever we buy, there is a hedged position created, and the hedged position is what moves, and that's where the mark-to-market comes in. Basically, the implied volatility does not change in terms of our procurement ways or the way the margin determines.

Like I explained, suddenly when there's a vertical push up to this kind of extreme extent, which is, I would say this is a historical time when in the history of copper, this is the kind of run up that's happened in such a short while. At that point in time, the market, like I said, pauses a little bit, resets the prices.

At that point in time, there's a slight panic. Sometimes, the deltas shrink a bit, but again, eventually come back to the normal working positioning.

Also, a lot of consumers, you have to understand that everybody does not have a free working capital where they can absorb the 40% rise in working capital requirement and all of those. They also start operating at a little lesser volumes and quantity.

That's the whole shift that happens, and eventually in 2, 3, 6 months or 1 or 2 quarters down the line, everything resets and restarts again. That's how the whole cycle works.

In terms of EBITDA per ton,

Yeah. Go on.

Sorry.

In terms of EBITDA per ton, irrespective of prices, we still maintain at INR 35,000 to INR 40,000.

This is what we have maintained.

Okay. Now a follow-up on that.

If our EBITDA per ton is going to stay sort of constant because of the hedging policy, as copper prices increase, that means a higher receivable cycle on a fixed or on a same EBITDA per ton, right? Is my understanding correct?

That would be ROCE dilutive if I understand correctly. You

see not technically, sir. In terms of absolute numbers, there would be a rise.

Like you rightly said, the financing cost increases. Eventually when you look at it, the margin in terms of percentage profile starts coming back to the similar levels.

Currently, the market is still digesting these rapid increase in prices, and hence there is a slight margin shrinkage. Off late from January, what we're looking at is market is realigning itself to the newer prices and market is getting to these as fresh levels.

Margins will be back in place. I would say it is a transitional period, and the whole business restabilizes in the next 1 or 2 months.

Sorry, near clarification that you mentioned that EBITDA per ton Sorry to interrupt in between. would be 35 to

Hello. Am I audible?

Thank you for the opportunity. I have two questions on the copper.

Just wanted to know from where do we source our scrap for the copper and the geography addresses from? The second thing I wanted to know was that when the 6,000 tons per annum incremental capacity for the copper will be live, and how much are we spending for that?

Third, what kind of forward integration are we looking to do in copper that we mentioned in order to improve the EBITDA per ton?

Thank you. See, on the copper side, our sourcing is again global in terms of multiple countries that we source from, from US, South America, Australia, across the globe.

We're sourcing wherever the scrap export is feasible and allowed to be exported to India. In terms of the capacity that you asked from 6 to 12,000, we are almost at Jan end, and right as we speak, some trials are going on, and these capacities should be live as soon as maybe in next 2, 3 days.

You will have those incremental capacities coming in for the month of Feb and March. Apart from that, on the product side, I will not be able to give you the specifics right now because we will anyways get that out what product, what it is in our announcement, the moment we make it on our further expansions.

This 12,000 tons, what we're talking, is almost live as of now.

How much capex are we doing on that copper?

It is a moving capex, we'll be announcing that as well along with our larger plans on the project. As we told during my initial speech, we've already done 25 crores of capex in this 9 months, and further approximately 35 crores will be done in this quarter.

Okay. Second on the plastic division.

I just wanted to know what product do we deal in the plastic, and what kind of EBITDA do we generate there? What current capacity that we have in the plastic?

Currently on the plastic, we are concentrating more on the plastic that we're generating in-house from the batteries which is PPCP and ABS. Apart from that, we're also looking at nylon.

Currently, it is a very flattish number in terms of EBITDA and this thing, which slowly we will be converting a little bit on the positive side.

Okay. Earlier in the call, you mentioned that

sir.

Sure. Sure.

No issues.

which you had this quarter, that almost had a 1% impact on your EBITDA margin. I just wanted to know, you mentioned this is a recurring number, will it also be recurring next quarter?

What was the same number for Q2?

The last part was unclear. You said 1% drop, and then

INR 7 crore was the provision in cost, right, in this quarter?

Okay.

What is the same expected to be in quarter 3 and the rest of the quarters ahead like next

I'm sorry. I wish all of us knew that.

We could stop manufacturing and just play the market basis understanding what the market would look like 3 months down the line. It's only a market phenomenon, sir, and we definitely would not know what it could be in the future.

It is only volume driven and at what price my purchases come in, and at what price it has been hedged at that point in time. Nobody I think can answer this question.

Was it higher than normal this quarter because of the high volatility in prices?

Not higher volatility in prices, the vertical one-way run up. When the products were bought at the lower level, when you hedge it at that level, the differential comes in as mark-to-market.

When this gets sold, that mark-to-market gets reversed and comes back into the books as your sales numbers.

What was the cost in Q2? Provisioning cost?

Provisioning cost for MTM is 2 crore.

In quarter 2, right?

Quarter 2.

Thank you. Can I ask you one last question?

Sure, sir.

Would it be feasible for you to do a 8% EBITDA margin for FY '27?

We wish to do a lot better than that as well, but as of now, how we look at the markets, we are sure about having it in the range of 7% to 8%.

Okay. Thank you, and best of luck.

Thank you, sir.

Who's it? Exponent Tribe.

Hi, sir. Congratulations on the results.

My first question was just a follow-up, sir. Vijay sir was saying we expect to end the year with an inventory of 220 crores, around 220 to 250 crore, which is similar to what we had last year in FY '25 in the FY '25 balance sheet.

Just to understand, won't the copper price is going up, optically increase your inventory number for the same amount of scrap that you're importing?

Definitely what you're saying, the way you're looking at is in plain vanilla terms very right, but also along with the inventory management, we're also trying and squeezing our working capital cycle and trying to rotate it more number of times with lesser number of days. We are looking at technically having lower inventory because the price are going up and trying to manage the lower working capital cycle.

We are confident we should be able to achieve this.

Got it. The prices going up, they don't pose a challenge in sourcing because of which so maintaining a lower inventory while it's good for the cycle, won't it cause you problems while sourcing or attaining your orders?

I'll put it this way, the higher the scrap prices, it's better for any seller to sell. If you had some scrap lying in your house versus 6 months back, now you will look for some copper scrap to sell out because the prices are 1.5 times, 2 times than what it was 6 months back.

Everybody, whether smaller or larger player, would like to sell at these levels.

Got it, sir. Sir, my second question, sir, just want to understand your view on aluminium.

I heard you said that you're not focusing on it, but is there any particular reason why? Because the way copper prices are going up, the next closest alternative to that is aluminium, and there is a good demand there as well.

Why not look at it right now?

The aluminium market typically in India and all of it is completely unhedged. It is more demand driven or more availability kind of driven, and it is not directly linked with LME.

It becomes a little a little less rather organized manner of running a business. That is why we don't look at that in a very serious serious manner, the secondary aluminium alloys.

Got it. Thank you.

Those were my two questions. Thank you, and all the best.

Thank you.

Hello. Thank you for the opportunity, sir, and congratulations for the good set of numbers.

I just wanted to ask your view on lithium-ion. We are expanding on copper, lead, and everything.

I just wanted to understand your view and how we are approaching the lithium-ion side of space.

Yeah. We have been contemplating on lithium-ion.

The reason that why we haven't forwarded, firstly, we are now currently concentrating on the copper product, number one. Number two, on lithium-ion, basically, we aren't very sure of two things.

One, the feedstock availability in the Indian market. Number two, we also expect kind of the technology upgradation what is happening in lithium-ion is quite fast-tracked.

We just wanted to monitor that and understand the technology and the feedstock availability, because whatever it mostly comes from the EV and the electronics. Both of it and especially in EV is the majority contributor.

We foresee that probably by 2028 or so the feedstock of lithium-ion batteries would be much better. We thought we'll take it later.

That is the only thing, and we are also exploring the technology part of it.

Okay. Got it.

As I assumed, for the next year, we don't think any lithium-ion part taking

No.

Okay. Got it.

Thanks. Thanks, sir.

Sir, in the last three quarters, we have seen that our lead EBITDA per ton has been in the range of 17,000 to nearly 20,000 rupees per ton. Now we are guiding between that 15,000 to 17,500.

Was just wondering whether we had some different advantages in last three quarters, which are not going to be there going forward that we are guiding towards the lower end between that 15 to 17,000?

Mr. Chauhan, our guidance has always been 15 to 17,500, and we are striving to have our margins over and above that.

That is all about it. Typically 15 to 17,500 is a sustainable margin, and that is why we are continually guiding 15 to 17,500, but yet achieving at those levels or higher than those levels.

We would like to keep the guidance at 15 to 17,500 even though we are achieving slightly over that.

Right. With value-added products, you said it can go up by 1,000, 1,500, right?

Yes, that's based on the mix. What we've guided in 15 to 17,500 was a blended of value and this thing with the current mix that we've been having.

A little bit of value-added mix increases, that margin also will definitely increase.

Okay. For our Mundra, we have already have a land, but we have not done anything.

I know It's too early to comment, but what is management thinking at least directionally, how we want to utilize that land?

I think a couple of queries back, I had answered the same question. Even though I'll answer, we are looking at that in second half of calendar year 2027 once we complete our copper expansions.

Like I said, by then also looking into the Middle Eastern, European market, a lot of things open up. Definitely we'll be looking into our existing businesses and also at one or other verticals along with that in Mundra.

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

Thank you, sir.

Hi, sir. Could you elaborate on how the EPR norms are shaping up and the rebates, etc.?

That would be helpful. Thank you.

EPR, the norms are notified, but it's a little bit still in the fluid state. Even though we have some credits in our book, the pricing is not yet evolved.

We'll have to wait till the April 1st when the government is enforcing even in a stronger manner along with price mandates. We'll have a better clarity in the next quarter.

Got it, sir. Thank you.

Thank you.

Hi. Thank you for the follow-up.

Am I audible?

Yes, sir.

Yeah. Just wanted to clarify one thing.

You mentioned that over shorter cycles, your EBITDA per ton remains fixed because of the hedging policy. As the market calibrates to either higher or lower metal prices, specifically copper, that would mean that the market readjusts to a similar fixed percentage, right?

Otherwise, your balance sheet would look sort of very different, or rather return metrics would look very different in case of high volatility on either side in copper prices. Is that understanding correct?

Basically you're more or less right on that side. Typically once the prices adjust, the basic margin requirement for doing a particular business is needed.

People start readjusting and all of it. Like I said, sometimes when the market suddenly shoots up, there's a panic sale, or somebody has an unhedged position at the lower side, for them, it's still a much higher margin, they liquidate.

Once all this finds a plateau, the market readjusts and comes back to the normal positioning.

Got it. Because you're hedged in the interim, that would not affect

at least

severely.

Not severely, but it did get affected a bit in this quarter because when the prices vertically shot up, people are not willing to pay the complete delta that we were receiving the previous quarter, hence there's a marginal difference in the delta received this quarter. Coming quarter, that will even out.

That makes it clear. Thank you, sir.

Thank you.

Thank you for the follow-up. Sir, earlier in the call, you mentioned that our gross margins were impacted due to higher percentage of domestic sourcing.

I just wanted to ask why are imported scrap is more economical, that's one. Second, why our domestic sourcing was higher for this particular quarter?

Domestic sourcing sometimes is higher because it's more of availability phenomenon. When little more scrapping happens, little more vehicle sales happen, or change in instruments, changes, the flow is better.

Sometimes when the flow is more lean, the domestic prices tend to squeeze up a little, and more people are seeking for scrap and the availability is low. It's more of a market-driven formula.

Also, you have to understand that for us to look into the domestic market, we are extremely picky about taking it only from the formal sector, from the larger companies or the IT companies, and so those kind of things are options. Typically the costs are higher.

Got it. Sir, my final question on the lead side.

I just wanted to know what is our current lead capacity, what is our capex plans over there, and what kind of value-added products do we produce in lead?

See, I'm a little unclear on your question. Sorry.

That's right.

Okay. There are multiple kinds of alloys that we do.

We do lead-tin based alloys, we do tin based alloys, we do antimony based alloys, calciums. There are a lot of specific alloys that we manufacture for certain OEMs.

It's a blend of alloys. We do almost close to over 100 kinds of alloys for various customers.

It's a whole lot of portfolio that we give to our OEMs.

Comments on your current capacity and what kind of capex are you looking over there in the lead?

The capacity for this quarter in terms of this quarter is about we have done about 79%. Overall for this year is about 65% to 70% capacity utilization.

In the new plant, we expect capacity utilization blended manner about 70% in the coming quarters.

Thank you, everyone, for participating in this call. We trust that we have addressed all your queries during this session.

However, if there are any remaining questions, please feel free to reach out to our investor relations team at Go India Advisors. Once again, we extend our gratitude to all the participants for joining us today.

Thank you, and have a great day.