Ladies and gentlemen, good day and welcome to the Amara Raja Energy & Mobility Limited Q4 FY 2026 earnings conference call hosted by Anand Rathi Shares and Stock Brokers Limited. As a reminder, all participant lines will be in 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 star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Mumuksh Mandlesha from Anand Rathi Shares and Stock Brokers Limited. Thank you, and over to you, sir. Yeah. Thanks, Sagar. On behalf of Anand Rathi Shares and Stock Brokers, I welcome you all to the Q4 FY 2026 results conference call of Amara Raja Energy & Mobility Limited. From the company, we have Mr. Harshavardhana Gourineni, Executive Director, Automotive and Industrial, Mr. Vikramadithya Gourineni, Executive Director, New Energy Business, and Mr. Y. Delli Babu, Chief Financial Officer. I request the team to give opening remarks, and then we can follow with the Q&A session. Over to you, sir. Thank you, Mumuksh. Thank you, everyone, for joining this call. I will first give a brief on the Q4 performance and the numbers, and later I will request the leading two directors to give their opening remarks. During Q4 of FY 2026, we have achieved a consolidated revenue of about INR 3,530 crores. That's a growth close to 15% over the previous year. Of this revenue, about 92% came from our lead-acid battery business, and the rest is coming from the new energy business. The new energy business clocked a revenue of about INR 280 crores from the sale of battery packs and chargers. The current quarter, we have seen robust growth from the lead-acid battery business, particularly driven by the domestic automotive volumes. The four-wheeler OEM volumes have seen a sustained growth of around about 30% during the current quarter. The aftermarket volumes also, considering a larger base, have grown about 5%-6%, both in four-wheeler as well as two-wheeler. We have seen a very sustained demand momentum during the current quarter on our tubular batteries and the home UPS systems. The tubular battery volumes grew more than 35% during the current quarter with the onset of the season. Unlike the previous year, where our tubular batteries were completely traded, this quarter more than 70%-75% are from our in-house manufacturing, but still we are trading at about 20%-25% from other manufacturers. The lubes product also has shown reasonable growth in numbers. We have now reached a scale of about INR 50 crores per annum as a sales revenue from this segment. During the current quarter, with the ongoing geopolitical issues, we have seen a muted growth in the export volumes of automotive business, and we hope in the next coming quarters, the momentum will revive. The overall lead-acid industrial volumes, other than the telecom segment, have grown around 3%, while telecom has continuously seen the transition to lithium, and hence there is a reduction in the lead-acid volumes of telecom, while it is suitably compensated with the lithium volumes. Our overall market share within the telecom segment continues to remain robust around 50%. The kind of volume growth that I have alluded to resulted in overall revenue growth of 16%, but when I look at my lead-acid battery business, the growth is about 12% over the previous year. The revenue for the quarter from exports stood at about 11%. The new energy business, as I mentioned earlier, continued a strong performance, which is almost one and a half times more than the previous year. In the current quarter, we have almost supplied 300 megawatt hours of telecom packs to various telecom players. In this current quarter, we have also infused about INR 100 crore further into our Amara Raja Advanced Cell Technologies, our new energy subsidiary. With this, the overall investment into this subsidiary is about INR 1,500 crore. We are expecting the customer qualification plant, which is under commissioning now, is expected to commence its full-scale operations in the coming months. We are also setting up a battery energy storage facility which will cater to C&I and grid applications, and it is expected to start its production sometime during the Q4 of this fiscal year itself. The first gigafactory is also under construction. As far as margins are concerned, the current quarter has seen the overall EBITDA margin standing at about 11% on a standalone basis, but if I adjust for the trading revenue of lithium batteries, then the lead-acid battery business has generated an operating margin of 11.6%. If we consider the operating efficiency of our captive recycling plant and adjust the lithium pack trading revenue, then the EBITDA margin of lead-acid battery business as a whole is actually at 12.3%. At LAB level, at lead-acid battery business level, we are able to sustain operating margins above 12%, despite tremendous cost pressures that we are seeing both at the raw material level as well as some of the operating costs as well. Raw material costs, particularly in the alloys and sulfuric acid, have increased substantially during the quarter due to the ongoing geopolitical conflict as well. In addition, we have also seen a higher OEM mix during the current quarter, as both in four-wheeler and two-wheeler, we have seen a growth of upwards of 30% in the OEMs, which is where there is an impact on the overall margins as well. To mitigate some of these raw material price increases, we have taken some price increases in Q4 at about 5% to 6% in the domestic automotive business in tranches. Now we'll be considering the way the rupee is depreciating, and also the enhanced cost of freight and raw materials might force us to look at some more price increases in the coming periods. With that background of Q4, when I look at FY 2026 as a whole, the consolidated revenue stood up INR 13,814 crore. That's a growth of about 7.5% over the previous year, supported by both the lead-acid battery business as well as the lithium pack business as well. On a full year basis, we posted a robust growth in the domestic volumes, both in the automotive and home energy segment. Automotive domestic volumes on a full year basis also have seen an OEM growth of almost more than 20%, and a similar percentage of growth was observed even in the home energy side of it. However, the international volumes have marginally reduced over the previous year, considering the overall geopolitical developments in Middle East as well as the tariff barriers that we have seen in the North American markets. Still, the total exports have contributed about 12% of the total revenue in the current financial year. As far as lithium is concerned, we have crossed a supply of close to a gigawatt hour of packs to telecom segment in FY 2026, and we continue to supply packs for three-wheeler and two-wheeler applications. The full year margins at the consolidated level stood at 10.8%. However, at lead-acid battery level, our operating margin for the full year is at about 12.2%, despite reduction of international volumes and continuous increase in the input costs and other expenses like EPR liabilities and warranty costs. The consolidated level margin dilution is due to additional expenses that we are incurring on our new energy business product development and the ramping of some of the production facilities. As far as the exceptional income that you would have seen in the P&L is concerned, that is predominantly coming on account of the insurance claim that we have fully received now for our tubular battery fire accident, adjusted by the one-time gratuity cost that we had to take because of the implementation of labor code. As far as CapEx is concerned, we have spent roughly about INR 600 crores in our lead-acid business, both between the battery business as well as the recycling business, and the rest of the money was spent on the new energy projects, including the research lab and then customer qualification plant. These numbers, if I net off against the insurance claim that I have received, then the lead-acid CapEx would be around INR 500 crores. In the coming year, we would be spending an amount in the range of INR 1,500 crore-INR 1,700 crore as CapEx, about INR 400 crore also in the lead-acid battery business, and rest of around INR 1,100 crore-INR 1,200 crore of CapEx in the new energy business. This is a brief on the results. Now I'll request our Executive Director for Automotive and Industrial, Mr. Harshavardhana Gourineni, to give you his opening remarks. Thank you, Delli. Good evening to everyone on the call. Thank you for joining us. This past year, FY 2026, definitely our business has seen various headwinds, but we're very happy that we've been able to come out of it with good resilience. As the automotive market, especially the aftermarket in India, is showing signs of maturity and growing at a mid to high single-digit growth, we're able to go beyond that market rate. Our segments in OEM, Delli mentioned that we're seeing significant growth. The same way with our renewed focus on home energy, we've been able to further penetrate segments that were admittedly underrepresented in the past. Our in-house design and development of power electronics has really given a boost to our own home energy solution. Along these lines, we continue to explore new ways to leverage our channel. We are also further investing in our flagship brand, Amaron, to build visibility and offer brand-led growth. The international markets, due to tariffs, geopolitical tensions, shipping headwinds, have definitely felt muted growth. That being said, we were able to keep all of our customer relationships intact. We continue to stay deep and command significant market shares in the regions of Middle East, Southeast Asia, and Africa. We made penetrations into Europe and continue to have customer engagements in the U.S. We will continue to grow and also look at operationalizing strategies for localization. This will be done to make sure that the sales and service support to customers continue to stay intact in expecting continuity of times such as these. On the industrial side, we had robust growth in the UPS segment, which is also bolstered by the data center growth here in India. It's also an export market for us that we continue to build on. We're also leveraging these same relationships in the commercial industrial space to be releasing our own BESS solutions to these customers, continuing to build on the trust that we've had with these customers for the last several decades. Our approach to all industries has been to make sure that we provide the right solution to all of our customers for the right performance, making us truly multi-chemistry, technology agnostic, and a leader in low voltage solutions. Being a low voltage solution provider, we're keeping all upcoming chemistries in mind when it comes to low voltage in automotive, whether it's for SLI applications, mild or strong hybrid, auxiliary batteries. All these technologies are being released per the requirements of the customer. Of course, this is leveraging the strong OEM relationships we have. It's very evident in the growth we're getting in OEM. We're able to cater to these increasing volumes by unlocking significant throughput in our existing manufacturing locations within the same footprint by leveraging digital capabilities, by bringing in best-in-class efficiencies. We will continue to do this to reach our growth plans in the years to come. I'm also happy to share that though our plants are located in distressed water situation areas, we've been assured 12 times water positive in these locations and continue to work very steadfast in our sustainability goals. We're also zero waste to landfill, which is also a significant achievement this year. These efforts will be taken forward similarly to the reductions we've done in our energy expenditure and increasing renewable energy share. In going forward, we'll continue to see growth in our international markets across all business lines. We'll continue to unlock capacity and value from our existing investments, and we will be able to take advantage of all market conditions and technology adoptions because we will be the number one low voltage solution supplier in India. Thank you. Thanks, Harsha. I request Vikram to share his opening remarks, please. Good afternoon, everybody. Thanks for joining the call. I think the last several years we've been sharing information about our new energy initiatives, which is centered around the Giga Corridor infrastructure that we've been building out. I'm happy to share that we have substantial updates for you. While we signed the MOU with the government of Telangana three years ago, up till now we've been largely operating pack assembly facilities. This is spread between Tirupati, where we do largely the stationary production for Telecom pack, as well as Divitipalli, where we are largely focused on light electric mobility up till now. A couple of important milestones came up this year, where we crossed cumulative installation of 1 GWh in stationary applications, largely driven by our market share in Telecom. The first exports of lithium systems in this segment has also taken place. We continue our market leadership in this segment through the technology transition. We continue to maintain our strong position in the light electric mobility space with two-wheelers, three-wheelers, LCVs, expanding our reach with both packs and chargers. We are in touch with several passenger vehicle OEMs to support their launches. As these programs generally have much longer lead times, we're unable to announce anything at this time, but progress is promising. A major change in our strategy is the introduction of ESS as a larger part of our mix. Earlier, we'd largely focused on EV. We expected that the larger part of even the short-term growth is coming in EV. While EV momentum remains steady and in the long-term, we do still believe it'll present a larger opportunity. The fact that ESS has accelerated. This can be evidenced by rapid movement in the space, especially driven by the renewable drive in India. As a result, we've launched an accelerated project to construct an integration facility, ESS integration facility in Bidikapalli. We're aiming to start production at the end of this calendar year with an initial capacity of five gigawatt hour in a facility with the ultimate capacity of 10 GWh. Coming to progress on cell manufacturing, there are three facilities that we've been communicating with all of you for the past few years. e+ Energy Labs, our R&D center, is undergoing the final commissioning phase. Our teams are starting to move into the facility over the next month in a phased manner. Earlier, we were doing our R&D activities in a scattered manner, in a fairly limited manner, limited by the type of facility and equipment that we had. With the consolidation of our teams and substantially upgraded equipment, we expect our R&D backlogs to accelerate greatly from here. While cooperation continues to be of interest and we continue to pursue partnership where available to cut short our time to the market, I can confidently say that in regards to technology, our efforts are mostly self-driven. With the commencement of this lab and the facilities, I believe that we'll be able to accelerate several programs from here. The customer qualification plant, as Delli mentioned, is in the final phase of commissioning. We're running the final trials to stabilize all processes and optimistic that our ability to start delivering commercial samples is going to start to our customers in the next couple of months. While we were manufacturing small batch of cells over the past few years at our facility in Tirupati, this year marks the first year that we're actually making cell manufacturing at a reasonable scale in India at Amara Raja. This is being done not only at a larger scale, but also mimicking mass manufacturing processes. The first 2 GWh line, Giga Corridor, is still on progress. It's in line to start production in June of 2027. This will not be the first gigafactory in India, but since we consciously chose to build out our R&D and pilot production first, we're a little bit delayed compared to some of the other players. Our experience in commissioning the CQP has been invaluable, and I expect that the learnings from the CQP are going to help to smooth out the learning curve at Giga Corridor and future mass manufacturing facilities. Back to Delli. Thank you, Vikram. We can now open for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and then one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, to register for a question, please press star and one. Your first question comes from the line of Vibhav Zutshi with JP Morgan. Please go ahead. Yes. Hi, thanks for the opportunity and congratulations on the good revenue growth in challenging times. The first question is on the new energy business. Now for this gigawatt hour cell line, which will get commissioned next year, just wanted to understand where are we in terms of equipment procurement and other stuff. Is the equipment already ordered, or are we going to do it now in FY 2027? The reason to ask this is because one or two large players who are trying to get into cell manufacturing have been facing challenges in getting a partner or ordered equipment procurement. Just wanted to understand where are we in that process. Thank you. Sure. This is Vikram here. Thanks for the question. I want to share that the equipment has been ordered. The bigger challenge that we've been facing is not so much that we don't have access to equipment, but we'd have a little bit of limitations in terms of getting the engineers from China to come and help to actually commission the equipment. This being our first time, we have less experience. We depend a little bit more on the equipment vendor. While still the numbers of visas being issued is less than we'd like, I think our experience at CQP has been that we have been able to issue a couple of visas. There are engineers on ground here for the past couple of months helping us to commission. The initial base part of technology was largely acquired through technology cooperation, but our own teams have been able to take quite a bit of hold on this program. This is a cylindrical 2170 program that we've shared in the past, and we're quite confident in our team's ability to handle this technology smoothly and the ability for the equipment vendors also to support it. Okay, got it. That's really helpful. Second question is on the Gotion partnership that we had announced almost a couple of years back and the LFP plant, which is supposed to come potentially in 2029. Just wanted to understand how is that partnership progressing? What are the next steps here in terms of technology licensing, potential conversations with customers? We've not heard much about Gotion socially. I just wanted to get some thoughts. I think we made a large announcement about licensing technology from Gotion just about two years back. Since that time, I think all of you would have also been seeing in the news that sharing of technology, licensing technology is something that's been largely disturbed by the Chinese government. This is hitting all players and their technical tie-ups pretty equally. At the moment, we also have our own challenges in terms of working directly any sort of technology licensing or any sort of direct tie-ups with the Chinese. That's where I think what I said earlier is important, that whatever cooperation we had earlier, we're able to take what we can. Largely going forward, whether it's NMC, LFP, future chemistries, the efforts of the product development is largely driven by teams in India. Got it. Vikram, maybe a last question, if I can squeeze in. Just on this BESS plant, I think five gigawatt hour that you mentioned, any sense on how the margins are going to be once it's fully stabilized? Thank you. The BESS plant initially is going to be developing the containerized solutions both at the grid level as well as at the C&I level. It might mimic a bit better than what current pack business is doing. The operating margins could be around, let's say, 6%-7% to start with. We feel as the opportunity progresses, while we are starting with the 5 GW initial capacity, I'm sure it can be expanded further. As the scale improves, I feel there is an upside possible on these margins. More than that, this will act as a strategic lever for us to look at what kind of cells to manufacture when it comes to energy storage. Request Vikram to add any other strategic perspective on this. Yeah, I think in addition to what Delli mentioned, in addition to the container integration pack assembly, we do have plans to get into cells for ESS. This is something that we've been actively working on. While the overall target of 16 GWh- 20 GWh of BESS product remains unchanged, I think the mix in the short term is definitely leaning more towards stationary storage. This is a technology that's well established. Our teams are confident that with access to supply chains and equipment in China, we don't need an external partner to support us to develop the cell. We've been undertaking this effort, and this is going to be another capacity that we'll be adding over the next two years. Got it. Thank you so much. All the best. Thank you. The next question comes from Raghunandhan N L with Nuvama Research. Please go ahead. Good evening, sir. Thank you so much for the opportunity. For the lead acid battery business, you mentioned about the growth for a few of the categories. Can you also share how much was the growth for two-wheeler OEM, UPS, telecom, and four-wheeler export segments in Q4? Also, if you can share your thoughts on outlook for FY 2027 in replacement and industrial segments, that will be helpful. Yeah, Raghu, as I mentioned, both the OEMs, both in the four-wheeler as two-wheeler, have grown more than 30% during the current quarter. Aftermarket was growing somewhere around 5%-6% during the current quarter, being both four-wheeler and two-wheeler, given 1% here and there. Telecom, obviously, there is a degrowth. As I mentioned earlier, all other segments are growing at about 3%-4% kind of a number as far as the industrial numbers are concerned. I've also mentioned about the growth rates of tubular batteries being more than 30%. Now, as far as how the industry looking like for the next year, Harsha has alluded in his opening remarks that it could be in the mid to high single digits. I'll let Harsha to add a couple of points on how the growth trajectory could be for the coming periods. Yeah, along those lines, we'll continue to see that mid to high single-digit growth, which is one, of course, growing a bit better than the market. It's also further segmenting ourselves. For example, our renewed focus on home energy will sustain. We're looking to, of course, develop new products and put them into market. We're casting our net quite a bit wider in terms of international, which will help us become more resilient in these geopolitically tense times. Beyond that, the market, as it moves further and further into this mature stage, we'll be focusing more on also part of your business, the new types of solutions, to balance both revenue and profitable growth. On the industrial side, I had mentioned earlier that we'll be leveraging our relationships with the customers in the commercial industrial space to be pushing energy storage solutions. With this, we'll continue to grow at this high single-digit growth, and I think that's about what we can advise on FY 2027. Thank you, sir. Very helpful. My second question was, you referred to the raw material input cost inflation. You can broadly indicate, within the raw material, how would be the mix between lead, plastic, sulfur, some of the major commodities which we have to keep in mind. Lead could be about 65%-70% of your RM basket. How much will be others? How much is the current underrecoveries, and how much price hike should we expect going forward? As you know, Raghu, about 70% of the material is between lead and alloys, and naturally alloys like tin, antimony, all these are showing increasing trends. We are seeing some softening on some of the alloys, but there is still a price increase. Particularly, the dollar depreciation is also hurting us. The quantification is again dependent on a daily basis because how the volatility we are seeing in the Forex markets. On other materials, plastics account for almost 10% of our raw material cost. There again, we are seeing almost 40% kind of a price increase is possible if this kind of increasing momentum will continue. Sulfur is definitely causing the acid prices to go up. With the fuel prices going up and obviously the freight costs, both inbound as well as outbound freight costs will also increase. Considering various cost pressures that we are seeing, as I mentioned last quarter, we did some price increase towards the back end of the quarter. We may have to look at some price increases. While we have not taken anything in this current running quarter so far, we may have to look at it, but that will also depend on how our competition moves. While I'll not be able to give you a very quantified number around this, considering there being an evolving scenario at this point of time, in my view, at least another 2%-3% kind of a price increase is something that we should look for. If this kind of a momentum continues, even that may not be sufficient to recover the entire cost pressure that we are having currently. This picture, I think, will get better in the next one month, and then we'll have a clear understanding as to how much would be the cost pressure that we'll face. Well noted, sir. That is very helpful. Just lastly, you mentioned about the benefits of captive recycling. If you can indicate how much was the benefit taken in the quarter, and how much more benefits can we expect going forward? Last quarter, we have seen about 0.5% benefit coming from the recycling plant, because predominantly it was a refining operation that we are currently operating in. We are expecting our battery breaking operation to stabilize in the coming quarter. Currently, if you look at the current RML prices, that is the remelted lead prices in India also have gone up substantially. That is definitely creating a cost pressure again on the remelted lead side as well. We need to see how these input cost prices will play out in the coming quarters, and that should actually give us a fair understanding as to how it moves. From an operations point of view, yes, there is a 0.5% accretion because of the recycling operation. We hope that will sustain in the coming quarters, but for the increased RML prices that we are experiencing. Noted, sir. Very helpful. Thank you so much. Thank you. The next question comes from the line of Ganesh Ram with Unifi Capital. Please go ahead. Thank you very much for taking my question. The first question I have is on the new energy business, actually, both on the new energy business. We have about 2 GWh coming in and with an eventual plan to scale it up to 16 GWh. When I look at what the industry says, there are announcements, if I tally up to about 290 GWh versus the demand of what might be half of that. What I'm trying to understand is, who is the incremental buyer when you scale up from two to 16 GWh, and is there any binding offtake that we have on this capacity that we're putting up? What's the visibility we have? I just want to answer this question, Vikram, again. On the 2 GWh also, I think we hear about large offtake deals abroad, especially Europe, the U.S. I think we generally don't see that as much in India, especially with more standard type of cells. The 2170 capacity we're building out is very much based on our own market assessment and the belief that this is a cell that will continue to remain highly relevant for the two-wheeler segment in India. When we looked at all of the voice of customer received from the various customers, there are other cells that are slowly entering their mix, but we believe 2170 continues to be a highly relevant cell. When we build out to about 16 GWh, we haven't mapped exactly how we want to do this. Earlier, it was largely based on EV. I think if it comes to EV programs with OEMs, while it's not a firm offtake, we do build in a little bit of safeguards, something more akin to a take or pay kind of agreement where we at least to some extent, protect our downsides. When we're going a little bit more in an accelerated manner towards ESS, I would say that we have to see our own ESS system as the offtaker in this case. When we're building the 5 GWh ESS plant, up to that capacity, whatever we're making in ESS cell, we are the end user as such. I think we have more belief in our ability to sell the systems. Some sort of mix between four-wheeler OEMs and our own ESS capacity is how we'll bridge the 16 GWh. Thank you. That's very helpful. As a follow-up, if may I ask, in the local energy storage system ecosystem, I rarely see any cells that are being manufactured domestically now. What I was trying to understand is, when you scale up, what do you expect would be your cell cost per kilowatt hour versus what's in the market for imported cells today? In the grander INR 9,500 crore CapEx you've planned, what is the ROC you've underwritten? I'm asking this question because most buyers seem to be optimizing heavily for costs. What I want to understand is how we are going to be able to convince these customers to buy our output, in simple terms, and what that would mean for our financials and margins. Sure. I think you're very correct. We do live in a highly cost-sensitive market, and that's where we're trying to operate. There's a couple of different bets that we're taking. I think, A, we're not going to be cost competitive with a product that's imported from China. I think the best of our ability, whatever we're able to bridge, I think it's like China + $15-$20 is the minimum that we can bridge immediately because we don't have local material and a couple of other things that is advantageous to China in terms of scale. We are betting, and this is the indications coming from the government also that just a similar manner how they've done with solar equipment, a couple of other areas, that localization may start getting mandated in phases in the energy storage, especially at the utility scale, where the government is directly the buyer. I think that will definitely help us a bit to bridge some gap. In addition to that, I think slowly we're working to see how many of these upstream vendors can get localized in India. Today, I would say that we're off to a great start. Bridging that gap over the next five or so years is something we're aiming to do. Delli, if you want to talk at all about the numbers and the returns. From a pure return point of view, as Vikram was explaining today, if I compare the import price as it is, naturally at our scale, we will have a cost disadvantage, which is what we believe will get bridged over a period of time as we improve the scale and also some protection from the government coming in. If we can look at that kind of cost disadvantage getting factored, if we can achieve a scale of about 8 GWh- 10 GWh, we see that there is a possibility of an EBITDA margin in the range of 10%-11%. With the CapEx cost also coming in, because when we started the journey, we looked at somewhere around $55 million-$60 million per gigawatt hour of CapEx, which today I'm sure has come down almost by 20%-25% already. With that, when we achieve a scale of 8 GWh- 10 GWh, I think our ROC numbers will be better. It would be difficult for me to put a number immediately. Based on our business case, whatever we have worked out, it is going to be a low double-digit number. If CapEx reduction trajectory were to continue for some more time like this, I think we can better that number, provided we are able to ramp up the plants in the right time with a minimal process loss and are also able to gain some pricing advantage over the procurement when we reach that kind of scale. There are still some moving parts, but the opportunity size is bigger and I'm sure we will unearth cost advantages and value creation over a period of time, which should give us a bigger opportunity to pursue and improve the overall returns. Thank you, sir. If I may just ask one follow-up on this. Just from the buyer's point of view, what I'm seeing in solar, for example, is in June there'll be a deadline that says you have to buy cells manufactured domestically, which pushes up costs for the customer by about 30%. Now, given how nascent EVs are, maybe on the four-wheeler side especially, and even with BESS adoption, if we do implement some kind of policy measure that might increase the solutions cost in itself, could that possibly slow down adoption and have a counterbalancing effect? I think it's possible, right? If we look at the notification we mentioned, this is actually phase II of the ALMM, right? Already after phase I, costs have increased, but it hasn't really slowed down the Indian renewable trajectory. I think when the entire industry eats a cost uniformly, the increase in cost is baked in and the industry moves accordingly. I do believe there's some risk that maybe EV or renewables can slow down moderately, but at the end of the day, when this is being uniformly felt by the entire industry, I don't think that this is suddenly enough to completely destabilize the growth. Understood. Thank you very much. Thank you. The next question comes from the line of Kapil Singh with Nomura. Please go ahead. Good evening, sir. My question was just on your margin expectations. Historically, we've mentioned 13%-14% margins. In the current context, how do you look at the margins as we move along? There is inflation as well, which is there. I'm not talking of short term, but just your more two to three year kind of outlook on margins. Related to that, also wanted to understand when we look at slightly longer term picture, more over the next 10 years, is there a case here that our lead acid facilities become underutilized as the EV penetration rises? We are seeing that happening in India as well as globally also. Both for your facilities as well as for your network, if you have any thoughts on how to handle this transition. I'll just comment on the margin side of it, and then I'll let Harsha talk about the long-term horizon, what's in store for lead acid. See, as far as margins are concerned, clearly at this elevated levels of INR 210,000, INR 220,000 kind of a number on the lead, we definitely have that denominator impact. As I mentioned in the earlier calls also that we are still hopeful to reach a 13%-14% kind of an EBITDA margin, even at a INR 2 lakh kind of a lead base, predominantly on account of the initiatives that were alluded to earlier. That should give me a leverage on the fixed cost side. Also many of these inflation effects will get passed on to the customer, though with a lag. I feel still a 13% margin trajectory is something that is still on the horizon, but obviously in the current times of high volatility around every aspect that we touch, it's difficult for me to say what's the time horizon within which that I can reach there. As I mentioned earlier, clearly, that is the kind of margin target that we are working internally to reach there. While we have to make certain strategic investments into some of these initiatives in terms of expanding markets and also improving throughput, et cetera. Barring that, I think on a standalone basis, we should still aim for that kind of a margin. As far as the long-term lead acid battery business, I'll let Harsha to add his comments on how we see this play out. Happy to elaborate on that. I think, firstly, we do see a long runway in the lead acid battery product, but we are not linking anything to a region because we are quite flexible in our approach. We continue to unlock capacity within the same footprint, between the same four walls and meeting our growth ambitions. We'll continue to do this. We'll also see a future where multiple vehicle platforms and technologies will coexist. For example, we're sitting at a time where we're seeing tremendous growth in OEM, and we know that this is largely coming from ICE platforms. We're seeing different levels of hybridization. Of course, battery electric vehicles are also growing, now from a small base, but growing aggressively. We'll have solutions across all these segments and categories. We're building capabilities, of course, on the energy side to address this. We're building capabilities on the execution side to address this. We're being careful in how we're calibrating and investing our CapEx, or not investing, in this case, to a significant degree. Beyond that, we'll continue to sweat and leverage our strategic assets, whether it's brand, channel. Already spoken on capacities and technologies. This will allow us to maintain our growth rate. This allows us to stay close to the customers and delight them. Ultimately, in uncertain times, what's certain is our ability to adapt to them and have the right capabilities in place. On the plant redundancy point that you raised, actually, if you look at it, even today, though telecom demand is coming down, still that plant is operating at about 30 million, 40 million Ah kind of a capacity. We don't foresee an immediate problem with respect to our tubular battery. As Harsha mentioned, the home application might offer more runway for the solar systems, et cetera, coming in. The tubular batteries will continue to be on demand. This year, we have seen a very strong demand around it. That way, on four-wheeler and two-wheeler side, even if the incremental growth in EVs are stronger, eventually the ICE engine vehicles are not going to get removed entirely. Naturally, there will be a space for lead acid batteries to operate. Even there is an auxiliary battery, like Harsha mentioned earlier. Auxiliary batteries is also a product area that will continue to have demand. We are not too much perturbed at this point of time about redundancy of the battery. One picture we can keep in mind is, if we ever approach a peak OE production of ICE vehicles, which we haven't, we have to remember that there's a tapering and there's a huge car parc available for replacement, it's clear we haven't approached that stage yet. I think there's a huge growth ahead of us, challenging times, but those challenges bring a good opportunity. If I can just add something also. I think Harsha and Delli's points I completely agree with. Harsha mentioned the growth of ICE even today, the OE growth is there in India. I think if we look at the fact that with recent conflicts, especially what the PM has said, we need to reduce imports, reduce fuel imports. At the same time, we can't necessarily leapfrog into EV the way that some think tanks are expecting us to, because we can't replace the import of oil with import of other raw materials. I think at a time where we're trying to get the EV ecosystem built out and its first cell manufacturing plant is just getting off the ground in India, we don't have upstream material in lithium that's yet localized in India. That also takes more time. I think we believe at Amara Raja that this is the time where hybrids have to be accelerated in India, and we have the right solutions for both all levels of hybridization in vehicles. The thought that we can completely leapfrog from ICE to EV is not something that's making so much sense for India right now. Hybrid definitely is required. Thank you, sir. Second question was on the BESS business. What is kind of, you think, core competence or key success factors that we should expect in this business? There are many players who have been announcing that they will get into BESS. How should we try to assess the competitive landscape and how are you looking at it? I think what you said, the announcements are many, but especially as you get into the utility scale solution, BESS, a single five megawatt hour container is almost a quarter million dollars of equipment. I think this is not something that is going to be easily catered to without the right quality manufacturing processes and it's not something that can be done by just any smaller player. I think also the fact that Amara Raja is in a position to do a lot more localization, domestic value addition, and I'm not only talking about cell parts, but even non-cell components, is something that many other players are not going to be doing as much. With policies coming in to mandate more and more domestic value addition, I think a group like Amara Raja is definitely in a better position to handle this business. Sure, sir. Thank you, and best wishes. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, we request you to limit to two questions each per participant and rejoin the queue for any further follow-up questions. Our next question comes from the line of Jinesh Gandhi with Oaklane Capital. Please go ahead. Yeah. My question pertains to clarification on the Gotion tech tie-up. Have you received approvals from both the governments? Hello? I'm sorry, I didn't catch that question. Can you repeat it? Yeah. My question was on the Gotion tech tie-up. Have we got approvals from both the governments, India as well as China? No, the deal earlier announced with Gotion is simply a corporate to corporate tie-up. We never sought any government approval on either side. It's a completely private deal. Okay. As we're informed, there is a little bit of difficulty in terms of technology transfers coming from China. Largely efforts for R&D and product development in Amara Raja are driven internally. Okay. To the best of my knowledge, a lot of these deals are coming under scrutiny. Right. That's the reason I asked that question. In that context, our LFP plans will be now based on our own technology. In that context, by when should we expect LFP plant also to come on stream? I think, like I said, the first capacity next year will be NMC. LFP, we have a couple of products in the pipeline that we're developing, and as we get a little bit more confidence about the customer in the program right on the EV side, we'll be able to announce that in due course, but probably sometime 2028 and later. I'm sorry. I missed that last part. Can you please repeat that? I think we'd give you a more firm date, but probably 2028 and later. 2028. Got it. Okay, great. Thanks a lot for this. Thank you. The next follow-up question comes from the line of Ganesh Ram with Unifi Capital. Please go ahead. Thank you very much. What I wanted to understand was on the localization itself, is this just an expectation on the BESS side, or do you also think this will be extended to EVs? In that context, you mentioned that you expect the shift to move more towards BESS in the 16 GWh. What were you expecting earlier, and what do you think will now be the BESS component of the 16 GWh? I think we're still building out, at least at a market level. Earlier, our projections are more about 80% coming from EV long term, 20% from BESS. I think long term, while EV will still be the larger component, today we believe it's going to look something more like 2/3, 1/3, maybe even depending on how successfully ESS continues to roll out, this could even be higher. In terms of our capacity, we're still mapping out right now, so I don't have an exact answer, but we remain committed to adding the 16 GWh in full in Telangana. Understood. Do you also expect some localization norms to be imposed for electric vehicles going forward when it comes to cells and batteries? The landscape seems to have changed a bit in the sense that a lot of our traditional customers seem to be assembling some of their own packs now, and some of them even are venturing into manufacturing their own cells. How does that play into your utilization equation and customer conversations? Thank you. I think earlier I alluded to the way that the solar industry was incentivized. I think that works better in an area where government procurement drives the industry. On the stationary side, that's something that we've heard talk of in the corridors of government and we expect. On the EV side, probably you can't add something in the exact same mechanism, but we do expect that, and we've already seen that battery packs are incurring a higher duty than they were a couple of years ago. As and when capacity comes up in India, probably we'll see more from a direct duty increase on all the components that come along with it. Right. The portion on customers adding their own capacity for battery packs and some of them for cells, how does that play into your expected utilization or conversations with the customers in terms of uptake from your production? I think that's not our biggest concern. Today, definitely, there are large OEMs like Tata or Ola Electric that are doing their own cells. I think by and large, most of the OEMs that we are in touch with don't have plans to localize cells. They're, in fact, talk to players like us to get into the cell localization. I think the bulk of the cell market will still remain open. Of course, pack is something that we're seeing as evolving. Many OEMs are doing it in-house, but there are still opportunities that we're seeing where they're asking us for cell and pack. All right. Thank you. Very helpful. Thanks. Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to the management for closing comments. Thank you, everyone. See you until next time. Thanks for your questions. All the best. Thank you. Thanks, everyone. Thank you. On behalf of Anand Rathi Share and Stock Brokers Limited, that concludes this conference. Thank you everyone for joining us and you may now disconnect your lines.