Ladies and gentlemen, good day and welcome to Exide Industries Q2 FY 2026 earnings conference call hosted by Investec. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aditya Jhawar from Investec. Thank you, and over to you, sir. Thank you. Good afternoon to you all. From Exide Industries, we have with us MD and CEO Mr. Avik Roy, Director of Finance and CFO Mr. Manoj Kumar Agarwal, Pravin Saraf, Executive Director and President, and Company Secretary Mr. Jitender Kumar. Before we proceed, here is a disclaimer for all. We have a few statements by the company management in the call, may be forward-looking in nature, and we request you to refer to the disclaimer in the earnings presentation for further details. We will start the call with a brief opening remark from the management, followed by Q&A. I would now like to invite Mr. Avik Roy for opening remarks. Thank you, and over to you, sir. Thank you, Aditya. Good afternoon, ladies and gentlemen, and a warm welcome to you to the Exide earnings call. At the outset, let me inform you and welcome Mr. Pravin Saraf and Mr. Rajeev Khandelwal, who were inducted to the board of directors as Executive Directors effective 1st of September 2025. Both Pravin and Rajeev bring vast wealth of experience in their respective domain, which will add value to the next level of growth of Exide. Pravin is responsible for the entire operations of Exide since last one year, and Rajeev looks after the entire B2C trade business of the company since last one year. As the moderator informed you, Pravin is also attending this con call. Even before I talk about the key highlights of our performance for H1 of financial year 2026, I would like to talk about the positive news for our industry that has happened during the year, which is that of GST 2.0 reform. Reduction in GST rates for almost all the segments in the auto industry is expected to drive demand for the industry. The GST rate on batteries was reduced from 28% to 18% effective 22nd September, and for solar combo packs from 12% to 5%. The company is fully aligned to the government's goal of reducing burden to the end consumer, and we have passed on the entire benefit of GST rate reduction to the end consumer during this period. Now, let me talk about the performance of the company during the first half year. Nearly 88% of our business has grown by about 7%. Within this, aftermarket, automotive, solar, and UPS continue to contribute to the growth. Industrial infrastructure business outside telecom, excluding telecom, performance has also improved on a year-on-year basis as order inflow and order execution picked up in sectors like power, railways, motive power, etc. Remaining 12% of the business witnessed a decline in revenues, impacted by a weaker demand scenario, majorly in businesses like exports, last mile, which is the e-rickshaw business, and our telecom business, and I'll come to that a little later on. The company started the year on a strong note, with quarter one registering about 5% growth but showed a 2.1% degrowth in Q2, overall resulting in a modest 1.3% growth during H1. Even Q2 started on a strong note with double-digit growth in trade business in July. However, we suddenly saw a shift in momentum once the GST rate cuts were announced on 15th of August. Our distributors and retailers started destocking and postponed their buying in anticipation of receiving new stocks with updated prices. The company took production cuts in August and September, the second half of August and the full of September, with focus on cash management. Costs were kept in control at the manufacturing side, and raw material procurement was kept under check. We did it consciously to cut down our inventory and build only those goods which could be sold in September. As a result, lower production and lower sales impacted our profitability. However, it helped us to reduce our inventory to a large extent, and therefore we generated an incremental cash flow of INR 500+ crore rate efficient working capital management. Operating profitability was also impacted due to continuous pressure on input material cost. The company is yet to fully pass on the input material price impact to the market. We have started in Q1. A big portion was passed on. Remaining, we have also started acting on passing on the input cost to the market. However, once the GST rate cut was announced, we decided that we will put a stop to our price correction of the market because that sends a wrong signal to the market. We wanted to pass on the entire benefit to the customer. Going forward, we will see how much input cost inflation we can absorb, and maybe possibly in the next quarter, we can think, at least in quarter four beginning, we can think whether we can go ahead looking at the input cost. We can go ahead with further correction of the prices. However, the constant focus on cash management helped in reducing inventory, as I mentioned just now, at the end of September. Between March and September, we have increased our cash by INR 500+ crore at the end of H1. On the operational front, the various operational improvement initiatives on cost excellence and manufacturing technology upgrade that we had taken up and we have been informing to you since the last two quarters, they are showing results. For example, we have moved a substantial part of our two-wheeler battery production to conjugate technology. All such initiatives have started delivering results, and its full potential will be realized in the coming quarters. Domestic auto replacement demand was robust in H1, and auto OEM demand is expected to see uptake in Q3 as well. Industrial UPS and solar witnessed decent growth in demand. Though there was a decline in Q2 for solar, but with the GST cards and GST being brought to 5% and with PM Surya Ghar incentives that are in place, we believe there would be a strong rebound in Q3. October is already an indicator, and first 15 days of November is also indicating to that kind of outcome. Home UPS remains soft due to an extended monsoon season until August in this year. Home UPS has a double whammy impact because of the extended monsoon and then the GST rate cuts. Three businesses: solar, home UPS, and industrial UPS. These are aspirational in nature. This is where the customers deferred their purchase decisions. Whereas in automotive batteries or two-wheeler battery aftermarket replacement, we did not see that impact so much because it is more of a necessity than aspiration. Tariff uncertainties have heavily impacted the export business for the second consecutive quarter, as you know. We expect the situation to continue in similar trend until geopolitical tensions subside. However, as informed to you in the last call, we were making major active strides to new geographies and new portfolios where our dependence on U.S. and other countries reduced. Those activities are very much in place, and Q4 onwards, we will report to you again an uptick in the export business because we have found out additional markets, additional portfolios. The trials are over. From Q4 onwards, we hope that from January onwards, we'll again see a marginal tick, positive tick on exports, and thereby we'll reach a steady state in Q1 of next year. However, despite, yeah. Just one another point I would like to highlight in my opening remarks. Despite this tough macroeconomic environment, our performance has shown signs of resilience. Even when production was down, fixed costs were kept under control, and raw material procurement was kept under check. Our balance sheet remains very strong with zero debt and a high cash flow generation. As we enter the second half of FY 2026, the outlook for the lead-acid business remains positive across most business verticals due to expected uptake in auto OEM demand due to GST reduction. We already see the indicators in our data for October. Just to give you some color, the retail data for October, a typical growth scenario for a passenger vehicle was October was 11% against the H1 growth of 4%. Accordingly, the primary production numbers have also increased, as published by SIAM recently for October. Except two-wheeler, I see in all segments in October, the SIAM production data, primary production data has been up. The good news is in the retail sales for two-wheelers, the growth has been 52% in October, which means there is a huge destocking in the retail channels, which gives us hope that the primary productions will pick up again in Q3. I believe that Exide with its advanced product portfolio, Pan India Distribution Network, and a strong brand recall will continue to benefit from the growth opportunities. Moving on to lithium-ion cell manufacturing project, we have invested about INR 580 crore in H1 in FY 2026, and further INR 65 crore we have already invested in the month of October. With this, the total equity investments made into Exide Energy, which is our 100% subsidiary till date, stands at INR 3,947 crore. Equipment installation and commissioning works in Exide Energy is nearing completion. The company expects to start production towards the end of FY 2026. At this moment, we are going through process validation and sample preparation for some of our customers. Nearly 100% of the utility systems are nearing commissioning, and we are also meanwhile engaging with various OEMs of two-wheeler, three-wheeler, four-wheeler, as well as stationary energy providers across key and customer markets. With this, I close my opening remarks, and ladies and gentlemen, I'm happy to take your question. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Vibhav Zutshi from JPMorgan. Please go ahead. Yes, hi sir. Thanks for the opportunity. My first question is on the lithium-ion business. First of all, congratulating your project of such big scale to near completion. Regarding the product tag that you have mentioned that will start in November, could you please provide a sense who are going to be the eventual customers? It looks like you are starting with cylindrical and prismatic lines. Beyond that, have other OEMs approached us? Have you finalized any contract? Secondly, given that we are close to commissioning, any sense how the margins can look like, maybe not now, but say a year down the line? Thank you. There are two questions. The first one is on the readiness of our lines. As we mentioned earlier also, Vibhav, we will be starting with our first line, which is basically for two-wheeler application. This is the NCM line, the cylindrical cells, which we will be commissioning first. We are talking to large OEMs for the off-take already. Two-wheeler OEMs, I would not like to name them, but you can make your best guess. They are going to be the first customers of ours. We are preparing samples for them. We are first validating our process. The process is under stabilization. It's a very, very complicated process of electrode making and then formation. That process is ongoing. After that, we will give them the samples for their own validation. Mostly these two good OEMs for two-wheeler will be our first customer. We are hopeful. That is the first line. The second line that will possibly come online is the one prismatic line with LFP. That work is also almost installation commissioning is almost over. We will very shortly start our process validation and then the same process of homologation. That product is generally targeted towards stationary applications at this moment. We have some customer engagement and we have some customer interest to go with us. These are the first two lines. Coming back to the line two and line four, obviously as line one gets fully utilized, we will shift load to line two also. That is the plan. That is the sequence we will be following. Regarding the margins, I have been telling you that it's not the right time to talk about margins. What we are focused on is utilization. We want to ramp up the utilization to 60%, 70%, 80%, and then at 80%-90% utilization level will definitely do our mathematics one more time. If you look at global benchmarks, that's the only benchmark available. In India, we do not have an industry benchmark or profit pool on this. If you look at global benchmark, I think on a steady state level, the margins will still be similar to our current lead-acid margins. That's our aim. Okay. Got it. Just a follow-up. When you say that two-wheeler OEMs could be the first customer, so given that with Hyundai, we have a binding MOU now, are we kind of in that similar process with the two-wheeler OEMs as well, or is that something which is going to come next once the sampling work is done? No. I mean, that I will not be able to tell you, but even the Hyundai agreement, if you recall, it was not us who made it public. It was Hyundai who made it public. Otherwise, I'm not in a big favor of making this information in public domain because we signed non-disclosure agreement, and then next day we go for a press release. Somehow, we didn't want to come to the public domain because a lot of activities happen in parallel. It's not just a purchase order comes and you start supplying from next day. It's a co-development. With OEM, you are on a particular platform. You are co-developing a product for a substantial amount of time. They don't co-develop with 10 other manufacturers. It's not possible. If that answers your question. No, that is really helpful. Thank you. The second question is on the core business. Just curious on why such a sharp production cut was carried out. Obviously, because your peer posted a decent 8% top-line growth. When you say that consciously this was cut, is it demand which has just deferred, and are we confident that TQ could be strong? Just asking, sir, because now it has been five to six quarters of low single-digit growth for the overall company. Just wanted to get a sense on if you see that now we can go back to double-digit growth going forward. Let me not comment on the competitors, but we have some businesses where we were very strong, where we had competitive advantage in terms of portfolio and market. Those businesses in this quarter did not grow. For example, inverter batteries. Inverter battery was heavily inverter and solar. They were heavily impacted both by extended monsoon as well as the announcement of GST 2.0. Some other competitors have less dependence on this business portfolio. Automotive business, as you know, that we have grown very strongly. In four-wheeler, two-wheeler, both put together, we grew by almost double-digit, very high single-digit in this quarter, which I believe was higher than what competitors reported. It is a mix that in some quarters work in favor of us, and in some quarter it does not favor us. In this case, the biggest businesses which were impacted, which is almost one-third of our business, is the solar business and the inverter. Just to give you a sense, Vibhav, in Q1, just one number I can share with you. In Q1, the solar was the highest growing. If you look at my public disclosures, solar business grew by 35%. In Q2, suddenly went to -5%. Now, the market has not crashed, right? The market has not crashed. Neither our position in the market has crashed. From 35% in Q1 to -5% in Q2, you can imagine that this is a one-time hit which we had to take because of the circumstances. I am very confident that in Q3, all these pent-up demands or the deferred purchase decisions will come back and will bounce back. Because the demand is there, and that shows up in my quarter one performance. This is just an example of how the mix played a role. Thank you so much, really h elpful. I'll come back and thank you. Thank you. Next question is from the line of Kapil Singh from Nomura. Please go ahead. Yeah, good afternoon, sir. My question is on the lithium-ion business. Just wanted to understand how are you approaching pricing of the cells? Will it be at import parity, or will it be cost-plus? The second thing is when you talked about margins being in line with lead-acid business, we know there is a wide variation between aftermarket and OEM. Is it in line with the OEM margins or with the aftermarket, or should we look at the average? Thank you, Kapil. The first question is on pricing of the cells. The pricing of the cells, obviously, it will be a mix of both, depending on how we end up into negotiation with the customer. Of course, we expect that the customer to give value to make in India cells over import Chinese cells, right? We also hope that the government will structure the imports in a way that it promotes local manufacturing of cells as well because people have put up such heavy investments. I think it is a mix of both. With geopolitics setting in and a lot of uncertainties in supplies, I am sure the OEMs will prefer locally made cells. You know very well that generally the OEMs work on just-in-time inventory. With Chinese imports, you have to have minimum two to three months of inventory in your stock. This has its own risk of price volatility as well as your storage and quality issues. Secondly, I would also like to assume that with a make-in-India sale, the handling of quality, technology development, quality improvement, this becomes much more easier. Dealing with an import sale and import vendor, a Chinese vendor, and dealing with quality issues, we have ourselves seen how complicated it is and how difficult it is. For ease of doing business, I'm sure we'll get value from the OEMs as a local source. Now, what will be the pricing? It's a matter of negotiation. In some cases, import landed, or some cases, cost-plus. We'll have to come to an agreement. So far, whatever traction we have seen in the two-wheeler market, at least, we see a huge interest for the local OEMs. Actually, they are doing very well that they want to shift to local cell whenever we are ready for supply. The second question is margins in lead-acid business. I mean, one thing you have to understand is that this business is largely OEM B2B business. This is not an aftermarket business. Somewhere between, and just to inform you, even OEM business, for us, the margins are also improving. I will let you know because we are also taking price corrections from the OEMs. It will be somewhere in between the lead-acid OEM and the aftermarket lead-acid, I would say. This is our internal calculation. We will see as it comes. The trick lies in your operational efficiency and sourcing. Once we ramp up the scale, and fortunately, we have good collaboration with our principal partner, SVOLT, we have been able to access raw material at scale from reliable suppliers. That is one lever. The second lever, which is most important, and that is basically your operational efficiency. The faster you improve your yield and reduce your wastages, that is a clear lever for improving your profitability. This is one advantage. Touch wood, I would like to say this is one advantage we will get as an early mover, as a first mover. At least we have 18-24 months of additional learning curve to improve our yield and reduce our waste. This is what we are heavily banking on because this will give us immense competitive advantage in the market. Thank you, Kapil. Yeah. Thanks, sir. Sir, the other question was on lead-acid. Can you just talk about what is your expectation of the replacement market growth? We are seeing some more inflation in lead, so can we expect in the near term, because you have not done a price hike, there can be more margin pressures? No, we have taken price hike this year a number of times. We only stopped after 22nd of September or 1st of September after the GST announcement was made. Before that, we have taken multiple rounds of price hike where we wanted to pass on. In the replacement market, Kapil, our growth for subsequent two quarters were all strong double-digit. Four-wheeler, we are still double-digit. This must be news to you, but as I see the numbers in front of me, both four-wheeler and two-wheeler at around between 10%-11% in Q2. And on a half-year level, I would say it is 12% and 11%. You see the aftermarket replacement growth is quite strong. What was not growing in H1 was the automotive OEM market, as you know. Now I have just now mentioned the October numbers of OEMs. We feel H2, the OEM growth will be good and I would say robust. This gives me confidence that two years down the line, my aftermarket demand will also boom. With this GST cut, whatever new vehicles are being sold, I'm sure this is giving a new life. Last time we got it during post-COVID period, if you recall. Now this GST would lead us to an aftermarket boom two years down the line. We are quite hopeful about it. Yeah. Sure, sir. Look forward to that and that's for sure. Thank you so much, Kapil. Thank you. Before we move to the next question, a reminder to the participants to ask a question. You may press star and one. Next question is from the line of Sangeeta Purushottam from Cogito. Please go ahead. Yeah, hi. Can you hear me? Yes, please, Sangeeta. Okay. Thank you for the opportunity. What I wanted to understand was that in the lithium-ion business, is the replacement cycle of the batteries going to be longer than what we find in the lead-acid batteries? Therefore, in a sense, would the lifetime sales over the ownership period of a vehicle be lower than what we have in the lead-acid batteries? That's question one. The second I wanted to understand was that given the automation process improvements, etc., that we are undertaking, is there a chance that our core margins on the lead-acid batteries are likely to see any significant improvement going forward? Also, with improvement in the sales outlook, is there any operating leverage which can come into play? Thank you, Sangeeta. I think both the questions are very valid. As I mentioned, lithium-ion business, primarily in EV, it's a B2B business. It's an OEM business. For the simple reason, the life of the battery is more than the life of the car in general, at least the first life. Right. First life, I'm saying. This is, I'm talking about passenger vehicles and all other commercial vehicles. It has an aftermarket opportunity in two-wheelers and three-wheelers because of the applications, because those are used for a lot of commercial purposes within the city shuttling. They run much more, and there is a chance for, there is an opportunity of aftermarket, as we see, in two-wheeler and three-wheeler. In terms of passenger vehicle and commercial vehicles, I would rather say that it's the OEM business. The size of the battery is also not like lead-acid. In lead-acid, a battery is used only for starting and lighting and ignition. Whereas in a lithium-ion, it's the entire engine, right? It's the entire engine of the car. Exactly. Therefore, the size of the market is also so big. It is not car-to-battery ratio completely changes in electric vehicles. Exactly. The market itself is going to the unit rate, unit piece market is going to be very high. We also feel that this is so nascent in India, and the baseline is so low. Every OEM coming out with you'll be happy to note that in the last 12 months, almost 10 new models have been announced by the Indian OEMs. Exactly. These are the things. This is not the speed at which maybe ICE engines models will be announced in future. That throws up a huge opportunity for us in the OEM segment only. Okay. Understood. That's sir, you know the aftermarket cycle is far, far bigger than lead-acid because of the nature of the technology. Exactly. On the core business margin, the question you asked, you are absolutely right. We have been running these projects for the last one year on various automation. The kind of productivity we are seeing in the motorcycle, in commercial vehicles, wherever we have invested, I think we have gone public by announcing. I think it is there in the annual report as well that we have invested half of our motorcycle capacity to Punchgrid. The balance half is being invested this year, which means by end of December calendar year, our full motorcycle manufacturing will move to Punchgrid technology. This has multiple leverages on the cost side, material cost, labor cost, as well as quality. Similarly, we have invested into continuous casting. This is another manufacturing technology where we are using our four-wheeler batteries, which also gives us, apart from giving savings, huge confidence in the quality of the output, and thereby will impact our future warranty returns. We have invested, and this year also we are investing as we speak. There are multiple automation initiatives, which, as Pravin Saraf, our new Executive Director, who is sitting with me, is running. He has come from a completely different environment. He worked with Bosch, and he brings this knowledge to the table for us. We are taking his help in changing the manufacturing landscape of Exide, which gives us some of this operating leverage, of course. Competitiveness gives us the leverage, and some of it will also help us to improve our margins. Thank you, Sangeeta. Thank you. Thank you. Thank you. Next question is from the line of Kapil Singh from Nomura. Please go ahead. I think Kapil just now asked the question. Yes, sir. Actually, I came back in the queue. Just wanted to understand the solar business better. Last time, you had talked about a pretty big potential over there because of the regulations which were coming in. If you can give us an update how the outlook is progressing for that business. In terms of technology, will this be lithium-ion only, or lead-acid also has applications over here? Okay. So first is, let me tell you about the market environment, Kapil. There are two types of solar. One is which is residential and commercial, which we see on rooftops. The other one is grid-scale solar, which is put up by large utilities and power transmission companies. Now, the drivers are different. The driver for grid-scale solar plant by power utilities is a function of the renewable target that government has taken, 600 GW by 2030. That is the driver for that, and there are a lot of fund outlets are taking place. On the commercial and residential part, where we are more aggressively involved because that is our domain, it is basically the PM Surya Ghar Yojana, which was announced 12 months back or 14 months back, I think during last year's Independence Day speech. The government has decided to electrify some one crore villages in the country through some subsidies. This is also they will also get the subsidy provided a part of the content or manufactured or sourced locally in India. This all put together, our solar business has really ramped up. They have also ramped up to the opportunity. We have put in a separate vertical in place last year with the new team. The good part is that we have our existing channel network of batteries. Our reach in the country is phenomenal. Very quickly, we could also reach out to the potential adjacent markets of solar rooftop, as well as other solar applications, which is deregulated in the commercial, industrial space, as well as in residential space. This franchise has reached, I think last year, they reached about INR 800 crore very quickly, and this year they have plans to cross INR 1,000 crore. We are really looking forward the two to three years' time. We want to make this franchise about INR 1,500 crore, and in cash on the opportunity that the country is providing. On top of that, the third lever is, as you must have seen, this month, government has reduced the GST for solar combo packs, means solar battery plus panel plus inverter, these combo packs from 12% to 5%. On one hand, you have PM Surya Ghar; on the other hand, you have our channel network to reach out and the portfolio that we have. On the last, you have the support from the GST. All this put together gives us a feeling that we'll be able to scale up this solar business very quickly to our aspiration levels. Sir, just in terms of technology, this will be lithium-ion or lead-acid? It also has some application here. Right. This is the second question. Sorry, I missed out. See, the main purpose or main strength of lithium-ion battery is lower footprint because of high energy density and fast charging. For us end consumers, these are the two values: fast charging and higher current density, therefore lower footprint. For solar installation, unfortunately, footprint for battery is not so much of an issue because footprint is decided by solar panels, not by batteries. You see what I mean? Also, since it's a backup power application, the fast charging is not as relevant as possibly EV. The two values or the two real values that lithium-ion brings on the table are not so relevant. Does it mean in future there won't be products for solar? Of course, somebody can come out with a fancy solar product. At this moment, the use case does not demand lithium-ion. We see, particularly in rural, we see that people are quite comfortable with lead-acid and the solar panel and inverter. Yeah, I mean, the business is growing, touch wood. Okay. Great. Thank you so much. On the lithium-ion side, also on the lithium-ion side portfolio development, also we are not exactly focusing on solar as a priority because we know that it will take time, if at all. Understood, sir. Thank you so much. Thanks for the detailed answer. Thank you. Participants, if you wish to join the question queue, you may press star and one. Next question is from the line of Aditya Jhawar from Investec. Please go ahead. Yes. Okay. Sir, on our base business profitability history, we have had a margin of about 13.5%-14% consistently. Now the margin trajectory has come off quite a bit. Now, looking at the projects that we are executing, like segregating the company into B2B, B2C, the tech upgrade, cost saving, by when should we expect that the margin trajectory should go back to the earlier levels? If you can talk specifically on the margin drivers that you are seeing in the near future. Thank you, Aditya. I mean, I would recommend that you do not consider this Q2 margin as a reference margin because in Q1 itself, if you go back, we have done 12% plus. That too in a very high-layered environment. What you refer to as 13.5%-14.5% in the past, you will recall that time the lead LME was far, far at least 20%-30% lower than what it is today. Today, lead is hovering at a very, very high level. The forex was those days INR 80. Today, it is INR 90. If you look at those delta, so even in this delta, why we are still surviving and we are able to deliver double-digit EBITDA is only because of our cost efficiency, cost excellence projects, and our manufacturing technology and those kind of investments which we made. Going forward, we still feel that in coming quarters, though we do not give a guidance, but I feel we will be substantially able to demonstrate our margins + 12% to + 13%. That is the corridor what we are looking at. We have a track record of doing it. We only hope lead remains at the current level, and we should be able to do it once the volume, once the top-line growth comes back. Yeah. Sure, sir. The next question is on the lithium-ion business. With the recent restriction imposed by China on the export of rare earth magnets, equipment for lithium-ion as well as lithium-ion, are we seeing some challenges in commercialization of our lithium-ion cell facility, sir? Sir, as many of you know, the announcement, the notification was on three areas. One is technology know-how. The other one was equipment machinery, manufacturing machineries. The third one was on raw material. Now, regarding the first two, as you know, we have already received all the machineries, and we have already received the know-how. We are lucky. On the third, raw material, as you know, they have already announced they have delayed the import restriction by one year, November 2026. Until November 2026, we should not worry. After November 2026, even the whole world does not know how the world will look like in terms of volatility and geopolitics. There is a reason why they put up in 9th August, they announced this restriction, and in one month's time, they withdraw it, or two months' time, they withdraw and delay it by one year's time. It has to do with geopolitics. This is our belief. We have spoken to all our material suppliers. They are not expecting any impact so far. In fact, they are also thinking there will be off-and-on restrictions. Restriction, by the way, means additional approvals. It does not mean stoppage. It means additional approvals somebody has to go through. We have spoken to all our raw material suppliers, and they feel that it is possible to do business by taking those approvals in advance. In any case, they are waiting till November 26, which is another 12 months from now. We are lucky, Aditya, that we got all our equipment and all our know-how before all this geopolitics started. Yeah. That's good to know. That's it from my side. Sure. Thank you. Next question is from the line of Raghunandhan N.L. from Nuvama Research. Please go ahead. Mr. Raghunandhan, your line is unmuted. Please go ahead with your question. Thank you, sir, for the opportunity. Sir, we have been hearing of costs relating to EPR or extended producer responsibility. Can you indicate whether any such costs were factored into results? Your other expenses seem to be higher compared to normal levels. Yes. A good observation, Raghunandhan. We had to comply with the new battery waste management regulations, which was not there last year or the year before last. Yes, we had made accruals to fulfill the obligations in quarter two. You're right. I would not like to give you a number at this moment because this does not require disclosure. You're right. We have made some accruals in Q2. I understand, sir. Would it be more of a one-time provision, and on a regular basis, the cost required will be much lower? By when would you comply with the provisions? You can't say one time because now this is the order of the day. What we have done is that we have regularized whatever backlog was there. Going forward, this is becoming a cost for us, regular cost. The only solution for this, because why are we doing this? We are doing this, or the government is doing this to encourage circularity in the system for the environment, for the benefit of the society. We firmly believe that at some point of time, we should be able to pass on this increase to the product. Customers who are buying a 100% recycled product from a manufacturer should be able to give that X percentage premium once we market it as a 100% recycled. This has happened with other commodities, as you know. This has happened across the world. At some point, we feel that this cost has to be factored in the product price. Thank you for that, sir. On the lithium side, can you indicate for the first year, would you be able to achieve a utilization ramp-up of 38%, or can it be much higher if there are enough orders? Over the next one year, would you further take up your investments to INR 5,000 crore, which was the initially planned phase one of the investment? Yes. Two questions. First is utilization. You are right. As I said, the first objective is to commission line one out of four lines. Roughly, you can say it will be 25% utilization. Going forward, if I do at least a portion of line three in the same fiscal year, then it will be more than that. It is close to the number which you mentioned. That will be good enough in terms of polishing our hands because the biggest learning curve that we are having is that we have multiple chemistries and multiple form factors. We need to polish our hands in both the technologies. Line one and line three running helps us to do that. Yes, that will be roughly the utilization that you said. The second question was. Will we reach INR 5,000 crore? This is the second phase investment. Now, we will just complete first round, phase one of 6 GWh. We have been the pioneers. We have been the first mover. We'll see how the market adoption takes place. The land which we have purchased, we have purchased for 12 GWh. The utilities, what we have invested is for 12 GWh. Only the shed and machine we have installed for 6 GWh. We can very quickly ramp up at much lesser cost. Means the phase two expense, the phase two investment will not be the same as phase one investment. It will be much lesser. We should be able to do it once we see a faster adoption in the country, which we are hopeful with stationary requirement in BESS coming up so fast. I feel that in a year or two, we'll have a much better visibility of the adoption, and we'll take a call after that. Till such time, our focus is to run this 6 GWh plant efficiently. Got it, sir. Thank you so much. Thank you. Thank you. Next question is from the line of Ashish Jain from Macquarie. Please go ahead. Hi, sir. Good afternoon. My first question is on the PM Surya Ghar Yojana. Is the battery being installed by rule? Because my understanding was that battery is optional from. You're right. I did not mention battery. Battery is used for off-grid systems. For on-grid systems, it's panel and inverter. We are also doing business. We are not only selling batteries. Our combination also includes pure-play solar panels and inverter installation in on-grid systems. We are working both in on-grid systems and off-grid systems. No, no, sir. My question was, do we see battery installations as a big opportunity, at least on the resi side given by. Yeah, yeah, because there's a huge off-grid market, and there the GST has been brought down to 5%. Right. Yeah. Okay. Great, sir. Thank you so much. Thanks a lot. Thank you so much. Thank you. Thank you. Ladies and gentlemen, we'll take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments. Thank you, ladies and gentlemen. It was really a pleasure to have this conversation with all of you. I hope we have been able to answer all your questions satisfactorily. If you have any further questions or if you'd like to know more about the company, we would be happy to be of assistance. Please get in touch with us or with Investec as you please. Over to the moderator. Thank you, sir. On behalf of Investec, that concludes this conference. Thank you all for joining us, and you may now disconnect your line.