Ladies and gentlemen, good day and welcome to Pondy Oxides and Chemicals Limited Q3 FY 2025 earnings conference call hosted by Go India Advisors LLP. 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 the star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from Go India Advisors LLP. Thank you, and over to you. Thank you, Steve. Good afternoon, everybody, and welcome to Pondy Oxides and Chemicals Limited earnings call to discuss the Q3 and nine-month FY 2025 performance. We have on the call Mr. K. Kumaravel, Director of Finance and Company Secretary, Mr. B. Vijay, Chief Financial Officer, and Mr. Piyush Dhawan, President, Commercials and Strategy. 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. K. Kumaravel 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, ladies and gentlemen, and welcome to our Q3 and nine-month ended financial year 2024-2025 earnings call. I trust you have had the chance to go through the earnings presentation, press release, and financial results that were uploaded on the stock exchanges. I will take you through the results, post which we will have a question and answer session. I am delighted to share that POCL has achieved strong performance in Q3 and for nine months ended financial year 2025, excelling on both financial and operational fronts. Before diving into the operational and financial highlights, I would like to share strategic highlights and the project updates. On the capacity expansion front, as you are already aware, we are expanding our lead capacity by 72,000 metric tons per annum in two phases of 36,000 metric tons at Thervoy Kandigai. This plant is fully automated, advanced facility, and the first of its kind in India. I'm happy to share that the erection and commissioning of phase I of the 36,000 metric ton per annum plant are in final stages with the trial production expected to commence in the first week of March 2025. CapEx of approximately INR 70 crore has been estimated for phase I, and the same is funded through the process of QIP and internal approvals. phase II expansion is expected to commission by half year-ending financial year 2026. The CapEx estimated for phase II is INR 20 crore. POCL has done CapEx of INR 70 crore during nine months ended the current year 2024-2025, and is also looking at the setting up of R&D facilities for the creation of value-added products, both for the current portfolio and for feasible products, which will add overall value to the top and bottom line of the company. The company has successfully raised INR 175 crore approximately through QIP. These funds will be strategically utilized for long-term growth, expanding the existing and new verticals, strengthening operational capabilities, and achieving our target of 2030 vision with a focus on sustainable growth, innovation, and value creation for all stakeholders. Coming to operational performance. The nine months procurement mix of lead, plastic, and copper through imports is approximately 76%, 53%, and 11% respectively. Capacity utilization on year-on-year of lead, plastic, and copper increased substantially on both nine months and quarterly basis. The production of lead has increased significantly by 34% on a year-on-year basis to 68,041 metric ton on nine months basis, and by six percent on year-on-year basis to 21,186 metric ton on quarterly basis. The sale of lead has increased by 33% on year-on-year to 67,577 metric ton on nine-month basis, and nine percent to 21,618 metric ton on quarterly basis. There is a significant increase in production and sales of plastic and copper as well as on both nine months and quarterly basis. On quarterly basis, EBITDA per ton of lead in INR 12,569 per ton, up by 2% on QOQ basis and down 24% on year-on-year basis. On nine-month basis, EBITDA per ton of lead showed a drop of 13% to INR 12,408 per ton. On nine-month basis, sales mix between domestic and export market remained at 36% and 64% respectively. The percentage of value-added products in the lead segment has been consistent. Moving to financial results for nine months ended FY 2025. Consolidated revenue increased by 30% to INR 1,533 crore. That is, we achieved in the nine months last year's full year's revenue in the current year. Consolidated EBITDA increased to INR 80 crore, up by 47%. EBITDA margin increased to 5.2% compared to 4.6% in nine months in FY 2024. Consolidated PAT more than doubled to INR 41 crore, up 108%. PAT margin increased to 2.7%. On standalone basis also, POCL showed a similar growth story with revenue, EBITDA and PAT up by 29%, 42% and 73% respectively. Coming to financial results for the quarter on year-on-year basis, consolidated revenue for Q3 FY 2025 increased by 11% to INR 509 crore. Consolidated EBITDA increased to INR 26 crore, up 11%. EBITDA margin increased to 5.2%. Consolidated PAT increased by 31% to INR 13 crore. PAT margin stood strong at 2.6%. On standalone basis also, revenue EBITDA, PAT increased by 11%, 9% and 21% respectively. The performance on Q2 basis showed a drop because of reduced production and sales of lead plastics and copper. The reason for the same is due to year-end holidays in foreign countries, and it is the trend in the industry. In conclusion, POCL is well-positioned to achieve its target 2030 with a clear focus on expanding lead capacity, exploring new verticals like lithium ion, and delivering over 15% volume growth, 20%+ revenue CAGR and profitability growth, achieving EBITDA margin exceeding 8% and ROCE above 20%. Our priorities include driving 60%+ revenue from value-added products and achieving a 20% reduction in energy consumption, underscoring our commitment to sustainability with robust capacity expansion plans, implementation of stringent government regulation, strategic CapEx initiatives, enhanced operational efficiencies, experienced leadership and steadfast stakeholder support. POCL is poised to do exceptional and sustainable growth in the years ahead. That's all from my side. I would now request to open the floor for Q&A. Thank you, and over to you, moderator. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Lahoti from Emkay Global. Please go ahead. Thanks for the opportunity. I have three questions, if I may ask. First is, what led to sequential decline in production and sales volumes? The reason that you gave in your opening remarks doesn't actually fully answer my question, I basically wanted to repeat this question. Do we see them back to normal levels in Q4? That's my first question. Okay, you can conclude other questions also. Sure. The second question is, what was the share of domestic procurement in Q3? What is our target for FY 2026? The third question is that, since you have done a decent capital raise, the ROCE could look optically low in the next 1-2 quarters until you deploy the cash. Do you still stick to 20% ROCE guidance for FY 2026, or you might want to give a lower number to get the right anchoring to the market? Hi, Amit. We'll start with your first question. With regard to the sales volume decline, if you look at the total nine months, we have almost completed 95% of what we achieved last year. That's a very positive sign in terms of the growth trajectory of what we're going to end up with this year. However, if you look at the particular quarter in question, this quarter, again, because of the calendar year ending and since we're in the automotive industry, brings a certain amount of decline in terms of quantity because of the holiday season, which is not a decline on this particular quarter standalone, but then it gets kind of compensated in the upcoming quarter. That will get balanced out, and we should be in a way to achieve a very good quantity for this particular financial year, given that we've already completed 95% of the last year numbers in terms of volumes. When it comes to the share of the domestic procurement, we are at Just one second. This is Vijay. In terms of domestic procurement, last year we were about 86% import and 15% domestic. This year there is a reduction in import percentage, which is about 75% import and 25% domestic. We foresee this number to continue the next year as well. With respect to your third question. ROCE. ROCE. ROCE, yes. This year, the ROCE is around 15%-18%, is something which we can see. Next year, definitely the numbers will be 20%+. The reason being that capital employed is not employed throughout the year, in the current financial year. If it is available for throughout the year, that return on capital employed can be seen at the expected levels. Sure. Be clear on the last question. Coming back to the first one. Of course, you can say that there was some slowdown in auto sector plus some holiday period affecting your sales volume. Why was production volume low? Did you intentionally try to match market expectations on production? What my thought was that you could actually produce it and then sell in the month of January. Was it just- Carrying inventory will be more. No, of course not, Amit. This is something which follows a trend. If you look at the previous years also, and if you do an analysis on the peers and impact on the industry level also, the export market has a trend which is overlapping on the third quarter. That justifies it completely. The positive part is that quarter four is going to improve anyways because there is a certain amount of tonnage that was attributed to quarter three that will get transferred to quarter four. This is something industry related, Amit. Again, because of holidays, imports also is getting delayed in the last week of December. From third week onwards, import also delayed because of holidays in the foreign countries. Okay, you mean import of scrap? Import of scrap, yeah. 73% is imported anyhow. 25% only domestic. Naturally, that import also after the second week of December, import automatically delayed. That will pick up only from the second week of January onwards, only full pickup will come. Okay. Thank you. Very clear. Thank you. Thank you. Thank you. Participants who wish to ask a question may press star one. The next question is from the line of Sani Vishe from Axis Securities. Please go ahead. Yeah. Thanks for taking up my question. My question is broadly on the line of expansions and the use of proceeds from the QIP. Have you started aluminum recycling this quarter? If not, do you plan to do so in the near future? Similarly, what is the update on the lithium-ion recycling? Given that we have now raised the funds, the funds are only to be used for lead expansion or we have other plans? Hi. I'll answer the question. With regard to the QIP that has been raised, the majority part of it will go to the project in question, which is the lead, which we're going to go live next month. That is what it is in terms of the capital employed. Of course, we are also looking at an alternative project in terms of the forward integration that we've planned for the non-ferrous metal portfolio. That is from the project side. Coming to the lithium-ion side of the project, of course, there is a feasibility study being done, and we are in tie talks for implementing an R&D strategy. If you look at the overall lithium-ion manufacturing structure, majority of it is leaching, which is part of the second phase, which is a bit of a questionable process, which has not been kind of implemented by anyone as such in India or if you see globally. The first part of it, of course, mechanical, is something which we are fully aware of. If you look at the procurement cycle, that is going to come out sometime in FY 2027. We'll be more of a plug-and-play prepared at that point of time. Right now it is still at the pre-feasibility or feasibility stage. Once we get the go-ahead from the board, we'll start the implementation. In terms of your question in terms of utilization of funds, out of the total QIP, INR 50 crore approximately is being allotted for CapEx. In that, the major part of that amount will be used for expansion of phase I and phase II, and the remaining part will be used for our future non-ferrous metals portfolio. Okay. Thanks a lot. Yeah. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Shweta Dikshit from Systematix. Please go ahead. Hi. Good evening, everyone. A couple of questions from my side. One would be on the seasonality that you mentioned in the third quarter. If that is the case, and 2Q, we did around 25,000 tonnes of lead volume, especially. Can we see that sales volume going back to that level in the fourth quarter? The follow-up to that same question is industry perspective. Is 2Q the strongest quarter in the year or the fourth quarter can be seen as the strongest quarter for the company? Yeah, definitely fourth quarter in terms of volume, we go with the second quarter, no doubt. Of course, there is no seasonality in the business. This is because of that year-end holidays in international level, both for supply and for customer side, this is the issue. Otherwise, there is no seasonality for the project, for these products also. What is your next question? On the volume side, fourth quarter, can we see that going back to the 2Q? Already based on this January performance, raw materials coming in full swing, our sales also going in full swing. Whatever leftover in the December quarter, definitely we'll achieve in the fourth quarter. Okay. Another question being on the EBITDA per tonne side, we saw the steady state run rate of around INR 12,500 EBITDA per tonne for lead this quarter. It was above INR 16,000 in the same quarter last year. However, on the percentage side, the margins were still 5.4%. Could you explain this, how is per tonne EBITDA so strong, but on the margin percentage basis, we are still at 5.4% in the last quarter, last year? When compared to EBITDA per ton when compared to last Q-o-Q and this quarter, the reason for reduction in EBITDA is due to increase in domestic prices of raw material. That is, our concentration import has come down. There is a 10% reduction in your pricing. That is one of the predominant factors why the EBITDA per ton, per kg in terms of lead has decreased. That will be partially compensated through the EPR credits, which will be accrued in subsequent periods. costlier raw material because of domestic procurement, you're saying? This is just a transitional effect. In fact, if you look at the domestic market, the positive thing to look at here is that our domestic procurement portfolio has increased, which is good. When you look at the overall domestic procurement panning out in the next three to six months, there will be a balancing effect in terms of the pricing. If you look at the import price and the domestic pricing in India, there has always been a delta. From the beginning, this is something which is a given. Due to the implementation of EPR, which we are seeing panning out, in fact, since the last quarter, again, a positive sign, that will kind of bring down the prices to the even levels and there will be a level playing field, of course, for as far as the domestic and the international procurement is concerned. All right. Last question would be on the expansion that's coming in. Since we are beginning trial production in the month of March, as indicated in the opening comments. From which quarter onward can we see this capacity at a full utilization level? As I've mentioned in the press release, we were going to do the trials in the first week of March. Of course, the cold trials are happening in the next month. Once the trials are on, we will be seeing as close to 80%-85% utilization in the subsequent quarter, which will be the first quarter of the next financial year. All right. Thank you so much. I'll join back the queue if I have further questions. Thank you. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question is from the line of Aadesh Gosalia from Spark Capital. Please go ahead. Hello, am I audible? Yeah, audible. Thank you so much for the opportunity, sir. I had a couple of questions. The first question was, in the opening remarks, you mentioned that there is a significant increase in our sales from the plastics and the copper segment as well. Can you just give some numbers on that regards that how much was our production and the sales in metric tons, if that's possible? Do you have further questions or this is the only question? The next question was with regards to the utilization. I think you did answer about this to the previous participant, but just to clarify that, as we have almost reached 70% utilization. You said that the max utilization will be 80%, 85%. On the same lines again, that the additional capacity that we are adding since from which quarter in FY 2026 shall we assume the utilization will be at the optimum level or at par with the current capacity? Okay. When it comes to plastics, nine months ended last year, we have done only 612 metric tons. This year, the number has increased to 2,984 metric tons approximately. With respect to copper, last year-over-year, the numbers were 81,000 metric tons, and this year we have reached about 249 metric tons in terms of copper. Effectively, when compared to year-over-year basis, the percentages increase is about 387% in terms of plastics and 206% in terms of copper. Lead, as you said, it is related about 68.7% capacity utilization when compared to 51.5% capacity utilization in the previous year. Okay. What about the optimization of the additional capacity and the peak optimization that we will be able to achieve? In terms of the optimization of the additional capacities, the phase one is going to be an additional 36,000 tons, where we foresee close to 75%- 80% utilization. That would be the ideal number to foresee in the upcoming quarters, because phase two again is going to come back in the second half of the next financial year. For lead, about 75%- 80% capacity is quite reasonable and is definitely achievable because it has to be again backed by sales, which is part of the order book in progress. To plastics, there has been, like Vijay said, there's been quite a significant growth from about 600, 650 tons last year for the nine months to 3,000 metric tons almost this nine months. There has been reasonable growth in the plastic side. Of course, the balance three months we'll be able to achieve the growth in the same number. Of course, next year onwards, we'll see a higher capacity utilization in plastics also. When it comes to copper, numbers are again, in terms of the overall volumes, it's pretty low, which is about 89 tons last year and 250 tons this year. These numbers have a very positive trajectory because again, in the quarter four, we're looking at doing a significant amount of copper as well if you look at the entire portfolio, what we have right now. All are in line in terms of the trajectory and in terms of the forecast that we planned out for this particular financial year. Of course, the next financial year also, we're looking at good numbers, positive numbers as we foresee. Okay. Sir, the 36,000 tons that we are adding, can we assume from the Q2 of FY 2026 the production will be at par with the current capacity of 70% utilization or 75%? Yeah. For sure. Q2 will be appropriate estimate or it can happen in Q1 also? Q1, of course, will be partial. We're looking at partially in Q1. Q2 will be full on. Q1 is partial only for the first month. Second and third month should be at an even 75%-80% utilization. Okay. That's great to hear. Sir, just one feedback from my end that as we are focusing on these other segments, like plastics, copper in our revenue mix, it would be great if you can give the operational performance of these segments also in the presentation like we gave with regards to lead. The point is well noted. Point well noted. Yes. Thank you so much. I will fall back in queue. Thank you. Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Siddharth Malhotra from Kotak Institutional Equities. Please go ahead. Hi, sir. Good afternoon. Just a small question regarding the current structure of the different verticals. I see that the revenue difference between your standalone and consolidated financials is around INR 7 crores, while at the PAT level, the difference is higher. Could you just tell me which segments are housed in standalone and which segments are housed in consolidated? Whether the new CapEx, the phase I and phase II CapEx, are they housed in the standalone entity? You see on EBITDA level, yes, sir. We have a POCL standalone, within POCL standalone, we have lead division as well as copper division. These both divisions come under POCL standalone. It comes to plastics, it is operating under separate subsidiary named POCL Future Tech Private Limited, we have one more subsidiary called Harsha Exito Engineering Private Limited. Predominantly, except for some regular expenses in Harsha, if you see the overall EBITDA numbers, there will be a slight difference, where the difference is happening is in terms of depreciation in Harsha Exito, wherein we have an asset value of net block of about INR 28 crores, which is predominantly land and building. There, the depreciation is around INR 2.03 crores for nine months. For FTech as well, we have depreciation plus interest cost, which are both put together, it's about INR 3.57 crores. This only has a drastic effect on your difference between your EBITDA and overall PAT. Okay. Does that mean that our phase one and phase two expansions will be a part of the consolidated entity then, Harsha Exito? The phase I, phase II for lead in question will be part of the parent company. Okay Pondy Oxides only. Just to give you a heads up, Harsha Exito is a company that we'd acquired through the NCLT last year. That is what we would kind of highlighting earlier. They acquired with some building, so automatically depreciation is to be charged since it is a going concern. Okay, understood. Do we have any plans for merger? Because as I understand, these will obviously be used for our internal sort of projects now. Do we have a merger on the cards? The Board will take it at the appropriate time. That we cannot give anything on that now. Board has to take a call. Definitely, Board will take a call. Definitely, it is on the card. Understood, sir. Just wanted to check, our EBITDA margins have been fairly stable. We are not really seeing any sort of uptick which we had guided for in our previous calls. I mean, what are we doing to sort of get these to higher levels? How do we plan to achieve them? Any timeline? Look at the EBITDA margins what we've kind of indicated earlier. There will be a trajectory of growth, sir, because if you look at the phase one operation that we're implementing, there's going to be a fair amount of operational efficiency coming out from the automation part of it and also the entire process as such is far more, I would say, technologically advanced than the status quo. There will be a good amount of marginal growth there coming from the particular production and sales from the new plant in lead. When it comes to the current operating plants, there has been a certain amount of change in fuel. That part will also be reflecting in the upcoming quarters. We've shown a guidance and an indicator in our projection in terms of our corporate report, in the presentation that we have given and uploaded in the site that we'll be transitioning from a 6% EBITDA margin on a blended level to an 8% over the next 3-4 years. That is what we foresee in the upcoming years, and that will start panning out transitionally. Of course, not immediately in a very steep way, but yeah, transitionally in the upcoming quarters. Okay. Do we have any near-term guidance, maybe say the next year, FY 2026, FY 2027, instead of like four years? Four years is a long time. If you look at the phases that we are implementing, indicatively, the phase I and the phase II will increase our EBITDA margins for the project of lead that we are going to start next month. We see an EBITDA%, of course, improve to close to 6%+ levels in the upcoming quarters. Of course, the blended will increase because if you look at the other plants, they will continue to have these EBITDA levels till the time the automation is brought there. Of course, there will be a transition growth trajectory from the current status quo to 6% levels. Okay. Around 6% odd levels. Got it. One small clarification. You had highlighted earlier in the opening remarks that this is the first of its kind plant, this particular lead expansion. What is different about it? I was not able to understand that exactly. Is there any different technology or lead smelter is different? I did not get that point. The technology remains the same. Basically, in terms of the entire engineering approach, it is far ahead of what we do in terms of recycling now. If you look at the overall structure of lead recycling, this is far more smart, lean, and integrated. There is a certain amount of benefit in manpower, a certain amount of benefit. Yeah efficiency in fuel. In terms of the entire operational batch time, there is going to be a lot of savings. That's the reason why we've mentioned that it's one of its kind, and in the true sense, a state-of-the-art plant. Of course, once it starts and once it starts giving out the product portfolio, then it will, of course, reflect in the numbers. That is why we mentioned state of the art in the true sense. Yeah. Okay. Thanks a lot. Thank you. Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Sanjay Parekh from Sohum Asset Managers. Please go ahead. Yeah. Thank you very much. Dhawan, I just missed the copper volume. What would it be? What was it in this year, and what is expected fourth quarter, and what is expected next year? I just missed that. In terms of the volume for lead. Which? Copper. Close to 67,500, close to 68,000 numbers so far. I was asking for copper. Yes, copper. If you look at the entire trajectory for Q4, we should be able to, of course, cross 90,000 levels for this year ended, which is again, a good number considering that we did close to 70,000 tons last year. That is as far as lead is concerned. Even in plastics, the numbers which we've done so far is about 3,000 tons. There is again, the same trajectory for the financial year ended 2025 for plastics as well, and likewise in copper. We have increased our numbers from a very meager to 80-81 tons to close to 250 tons so far. We again, expect a good amount of growth in copper as we move ahead. I mean, a much higher number in Q4. Likewise, given the presentation that we've already uploaded on the website for lead, our expansion plans are again on path. Given the phase I implementation and the incremental increase to 168,000 tons in lead, and by the end of the year to 204,000 tons in lead, there will be a very sharp good amount of increase as far as production and sales is concerned for lead from 90,000 levels to, again, same growth pattern that we foresee and have highlighted in the presentations. As far as copper is concerned, copper is again a very important portfolio for us. We look at it again from a very important and a priority point of view after lead. That number will also significantly grow in the upcoming quarters. Likewise, in plastics, because plastics is something which is again complementary to lead because it's again a by-product that we get from the recycling of the lead batteries. That number will be directly proportional in terms of the growth as we pan out in lead. Yeah. No, I just got this point. Very helpful. Only one thing is copper volume next year. I just missed this copper volume next year. I just want to understand, this is a separate processing, right? This is not a part of the lead plant that we are expanding. Copper processing will be separate, right? Or it's a part of this? No. We have in total four verticals at Status quo. We have lead, copper, plastics, and aluminum. Lead, again, is a very zero hero product. We have a priority set too, of course, given that we've already transitioned from 70,000 numbers to close to the numbers that we anticipate for this year. Copper is again, a separate process. Principally, of course, it involves similar processes in terms of the smelting, in terms of different activities that we intend to do. Yes, it is a separate vertical, and we intend to reach a very decent amount of portfolio number as far as copper is concerned. Okay. You're saying volumes for 2027 for copper? Copper volumes for the full year should be roughly. We are expecting close to 3,000. 700- 1,000 metric ton is something which we are expecting this year. This year. I was asking- Next year should be around 2,500-3,000 metric ton is something which we are expecting. Okay. Fine. The plastic ramp-up will reduce the losses that we have in the future plastic, the subsidiary, right? True. Yes. There is, if you look at the P&L, the material margin is positive. Of course, the operating margins are positive. When it comes to EBITDA, yes, because of different factors, there is a certain amount of gestation period that we have invested in the project, to ensure that it pans out in the way that we intended to. That will be a complete turnaround in the next financial year. Sure. Last one is, I just, like our asset turns are good for this business. I mean, there's hardly any appreciation. Let's say you do 6.5%, 6% margins that you're expecting next year, and your asset turnover, I was just doing some calculation, can be around 4.5 if your projection for next year is it. That means a 24, 25% ROCE is a possibility. I mean, what I'm trying to understand is wouldn't you target that sort of scenario, which is very possible from your capital employed and the planning that you're doing? Assume that should not be achievable and it could be a little less. I mean, I'm just trying to understand the character of the business, not getting to a number. No. This is a very exciting time for us because, again, we're expanding in lead. Our focus on copper as a portfolio is extremely important for us because it, again, is a growing metal, as far as we see in the overall market scenario. Plastics is, again, something which we are highly invested into in terms of time, right? We are looking forward to achieving the numbers that we've already highlighted in terms of the ROCE, the return on capital employed, or the EBITDA or the asset turnover. We are very positive about the growing scenarios that we kind of see in the upcoming quarters in the upcoming years. Sure. Last is, just then, because things are volatile on raw material, finished product, currencies, and our margins are limited, a little bit, I mean, we understood from your earlier interaction, but if you can, how do you manage this risk in a way that this margins of five goes up to six and then eventually seven? A little bit on risk management, how do you handle that, if you can, and manage this, I mean. When it comes to risk management, the procurement is divided into imports and the domestic procurement that we do. We've done about 74% imports and 26% domestic for this particular quarter. As far as our imports are concerned, that is again back-to-back hedged when it comes to the purchase and sales. There is a risk management that has been there for a good amount of period in the last so many years. Now, when it comes to domestic procurement, that is something which has come out and started, I would say, exploding, or I would say expanding now, because earlier, of course, there was a reservation when it came to domestic procurement. We see the domestic procurement, in fact, increase to good and certain amount of levels that can increase, and that will increase our entire appetite in procurement as far as the entire procurement for lead is concerned. Given that EPR is transitioning, so when there is a decent amount of, I would say, delta when it comes to the landed cost for the cost of a lead scrap in India and versus the cost of domestic procurement. Of course, we know that the cash conversion cycle will improve given that the domestic procurement logistics is far more better than the imports. Given that there is a transition in terms of the local procurement and it is getting far more organized than what we had kind of expected, there will be a transition of close to six months where you will see a volatility. This volatility is not kind of more concerning to us because we are looking at procuring larger number of batteries because that is what our intent is, given that we are expanding our capacities and are looking at sales, of course, higher than what we've done so far. Like we've already crossed more than 95% of our total volumes since last year, and again, the trajectory is positive. When it comes to risk management, the domestic will kind of improve over the next 3- 6 months given that EPR is going to play a very important and significant role in bringing it down to good amount of levels at par with the imports. To add on just some, what Mr. Piyush has already mentioned in terms of currency risk. Right now, since our import percentage has come down, we are typically a net exporter. Predominantly, the currency risk is being managed through natural hedge and the net part is being hedged through forward contracts. Over a period of last five years also if you see, we have seen ups and downs in the markets as well as volatility remaining. If you see, consistently our EBITDA margins are at the same level. Be it currency risk or commodity risk, it has not affected our operations. That you can see in the other income as well. Sure. Also, one thing, just an observation that in one of your slides, business at a glance, you said your 10-year revenue and EBITDA growth is 15%, a 10-year target. I'm just taking a longer-term vision. You set it for FY 2020, FY 2030, 20% growth. The question I have is, in this coming year based on your plan, the growth could be higher? Based on the plan of volume, this year should be a higher growth, not 20%, right? For 2026. Over a longer period, your plan is 20%. 20% doesn't mean that FY 2026 will have 20% growth, right? Yeah. That is exceptionally year. 2026, due to some new expansion plans, jerk in the volume will be there. We are giving that average growth of that 15%-20%. That doesn't mean 2026 also the 20% growth. There's a higher volume will be there because of new implementation of the project. Just to add, it is basically a CAGR over the next 10 years. Sure. Now we are panned out. 2026 and 2027 also, right? Because you would have further capacity expand benefits. 2026, 2027 could be a higher growth and then just an aspirationally you are talking 20%. Not that you're saying every year it will be at 20%. By 20%, we mean a stable aspirational growth over the next five, six years. Of course, there will be times when there will be a 2027, a 2025, 2024, and of course, there will be times when it will be an even 20. That's a futuristic number, 20, what we've given. The next year, given our capacities will expand to 168,000 immediately and of course, 204,000, there will be a little bit of a steep curve in terms of growth, of course. Yes, overall, there is going to be a 20% CAGR in the lead segment and the overall segment also. Yeah. Okay. Thank you very much. Participants who wish to ask a question, may press star and one. The next question is from the line of Kush Gosrani from InCred Asset Management. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. Just wanted to understand if over long term, if our domestic sourcing increases, margins should remain stable or improve from here, right? When it comes to our increase in domestic procurement, we just don't see increase in domestic procurement stand-alone because given our capacities, our requirement for volumes will be in absolute terms growing in both imports and domestic. Yes, reliance will be, of course, equally divided because we are looking at numbers right now like we have 74%, 26%. We're looking at an even 60%-40% or 55%-45%, because both will exponentially increase. When it comes to margins in terms of what has transpired for this quarter, that is going to again transition to a very even level playing number for domestic and the import. With the arbitrage coming down and the number becoming equivalent to basically either the interest cost or basically attributing to the cash conversion cycle factors. That's all. Yeah. Sure. Got it, sir. Over next, as your expansion happens, the margin growth will be restricted because the cost of these new facilities would be coming on, right? I'm sorry, can you please repeat? Sir, in terms of with your new commissioning post the trial run for the 36,000 tons, we could see it taking at least one quarter or two quarters to stabilize the plant, right? One quarter. Lead is something which is there predominantly from the beginning. Lead is not something which we have a learning curve to establish. We see that getting started from the first quarter itself. Of course, the first month may not have that kind of utilization. Yes, overall, we see that number coming up rightfully from the second quarter. Yeah. From second quarter onwards, that will come in full swing. Maybe first quarter is full period, maybe that curve to settle down in full. Got it. Thank you. I'll take that. Thank you. Thank you. The next question is from the line of Amit Agicha from H. G. Hawa & Company. Please go ahead. Yeah. Good afternoon, sir. Am I audible? Yeah, you are audible. Thank you for the opportunity, and congratulations to the team for the good set of numbers. Most of my questions have been answered. Just like the follow-up, what are the management's expectations for demand trends across domestic and export markets in 2025 and 2026? Thank you so much. With regard to the demand side or the sales side, so when it comes to lead, if you look at the overall market scenario in. What has been projected in reports and what we also foresee, given that we've been in the market for so long, both are in double-digit numbers. If you see the international market, that also shows a good amount of CAGR. Likewise, in the domestic side also, we see a good amount of growth. Certain verticals such as your automobile and which kind of forms the main part of the lead segment, to whom we cater to. In addition to that, if you look at the telecom side, the database, the data centers increasing, even the electric vehicles increase, all of that has a positive impact on the growth of lead as such. That kind of plays out well for us, both internationally and, again, internationally because of growth in such industries, and domestically, primarily because, of course, the industries are also growing, given that the government initiatives kind of have a favorable impact on us, the procurement will also increase. That is as far as the procurement is concerned. On the demand side of it, internationally, given that these segments are growing, we also have a certain demand to cater to. There has always been an order book that we have filled up. Again, we see the demand side internationally grow at good levels, and that was one of the rationales for the expansion for the 72,000 tons. On the domestic front, also, if you look at all the verticals in terms of your batteries, different types, whether it is a telecom tower battery or an automobile battery, all these have a growing trend. Even an EV requires a battery, even your data centers or your telecom, the railways. There is a positive trend of growth due to the industrialization, given that India as a country also is positioned to play a very important role in the Asia-Pacific or the Southeast Asian region. That kind of plays out very well for us. As far as copper is concerned, that is given the lead portfolio. When it comes to plastics, more or less the supply side is complementing because that kind of is coming out from the lead acid battery. When it comes to the demand side of it, we cater primarily to the automobile, to the battery segment, to a lot of engineering and industrial plastic segment. That also plays out very well for us. These are exciting times for recycling overall. Copper as a metal also is high on demand. If you look at the overall resources, these are embedded in natural resources. Given that the non-ferrous metals that we are in are declining in terms of, if I may say so, declining on a marginal basis from the primary route, the secondary route will of course have a growing trend. That kind of helps us in the larger sense of the market. Thank you, sir, for explaining in detail and all the best for the future. Thank you so much. Thank you. Before we take the next question, we would like to remind participants that you may press star one to ask a question. The next question is from the line of Samir Arora from Samarth Wealth Advisors. Please go ahead. Congratulations for the good set of numbers. I just have a small question regarding, like you had mentioned earlier, that there has been an increase in the domestic prices. Now you are increasing the domestic procurement. Is there going to have a significant effect on that? We look at procurement from a weighted average point of view. When we say that we have imported 74% and domestically procured 26%, both have a positive impact. When we say that 26% is domestic and our footprint on the domestic map is improving, that should be taken on a note that our domestic footprint overall in procurement is improving. When it comes to the prices, as we mentioned earlier, there is a transition. There is a period which will overlap because there is an understanding which we have to impart in terms of the EPR commercials to the brand owners, to the OEs, to commercialize it basically, and bring it back closer to levels of the landed cost of imports. It is not going to happen overnight, it is also not going to happen over one year. It is going to happen within three to six months because that is how we see the overall market shaping up. Okay. What is the utilization rate that you are expecting for plastic and the other segments? Just one second. In plastics, last year we've done close to 50%. Last year the capacity utilization was about 12.3%. This year the capacity utilization is close to 50%, and that would be increasing to the ideal mix of about 75%-80% in the next financial year. That is as far as the plastic segment is concerned. As far as lead segment, we are at 68% status quo. We have, again, previously also mentioned that any percentage between 75%-80% is very ideal for a lead vertical. As far as copper is concerned, yes, we are very positive on outlook when it comes to copper, and we see that product portfolio develop and with the utilization levels coming to double-digit at least from next year onwards. Thank you, sir. Congratulations again. Thank you so much. The next question is from the line of Rohit Ohri from Progressive Shares PMS. Please go ahead. Hi. Would you like to share any progress or developments related to the R&D facilities for the value-added products, maybe in the current portfolio or the ones which are the other feasible products that you're starting? As far as the R&D facilities are concerned, what we are looking at is, of course, lithium-ion is an important vertical that we look at because it is something which is going to eventually come up. When you look at the current status quo procurement, we look at the entire project from a point of view where it meets the procurement and to the end sales. We also follow the entire circular concept of the entire operations. When we look at lithium-ion, as far as the operational process is concerned, one part of the mechanical process is completely aligned to our expectation. The other part where you have to derive the element in a mono polymer form, for example, a lithium or a cobalt or a nickel or a manganese or phosphorus. That is currently being derived in a compound form, whether it's a carbonate or a sulfate. That kind of doesn't work out well because then we cannot give it back to the same industry. That is where we are going to work on over the next two years, say, because we expect the entire procurement cycle to begin effective 2027 calendar year. As far as the other verticals are concerned, of course, given that we've already highlighted in the corporate report that we published about, I believe, last year. Rubber is, of course, forming part of this R&D segment, and we look at other verticals also. I mean, the organic ones which are already there in our current portfolio to kind of expand, and we look at adding value-added products. Say, for example, we're manufacturing lead alloys. If we were to add more lead alloys or improve the way we manufacture the pure lead, then that kind of becomes a value-added product for us. Likewise, in plastics, a compound will be a value-added product. Eventually we see more value-added products coming into the portfolio, and of course, the R&D will continue to grow in other verticals as well. Specifically, it will be restricted to the non-ferrous segments only. Piyush, when do you think these efforts that the team is putting in will translate or start translating into probably 100, 200, 300 bits kind of uptick in the EBITDA margins? See, that's a journey that we've undertaken. Envisaged since we started the expansion. If you look at the numbers previously, we've been quite stable that way. Now, the incremental growth or the basis points increase, like you're mentioning, whether it's incremental of 20%, 25% every quarter or a 50%, a blended of 7%-8% will happen over a period of time. That is the intent, that is what we've envisaged, and that is something that we will have to undergo a journey as such to ensure that we have a strong portfolio where we have lead, where we have, again, plastics, where we have copper and aluminum and other verticals also playing an integral role in that kind of adding value addition. That is a journey that we've undertaken for the next 3-5 years, and that is where we are headed in the right direction. Okay. If you can share that annual somewhere around 94%-95% of the revenue comes from lead. When do you think that this pie would get shifted to somewhere around 65% or 70% portfolio of lead? Over the next two to three years. In complementing to lead, our focus on other verticals have also been very clear, and once the priority of lead is completed this particular month as such, of course, phase II is a given. Our priority on other non-ferrous metals will also be undertaken with immediate effect. That way, the percentage will start also kind of, the dependency as such will start reducing over the next quarters. You will see that, of course, happening given that the numbers in plastics will kind of start having a positive impact and also copper growing in terms of the total top line. That way, we see that happening over the next three years, of course, but the transition will be on an incremental basis every quarter or a half yearly quarter for the next three years. Is it possible to share the milestone in the next maybe four quarters or maybe six quarters as such? Because three years becomes slightly stretched. Your immediate targets, if you'd like to share over the next one and a half year or so for lead reducing. Our target to reduce from the 95%+ to 90% before the end of this financial year. Yeah. Next year, probably we bring down to 80%. Okay. 25, 26. Thereafter, bring down to 30%. Every year, 10% reduction. Okay. That makes sense, KK. That makes a lot of sense. My last question would be on any issues or any problems that we see because of BWMR, RCM or EPR coming into play. Anything related to the GST or the taxes, which is slightly negative or one-off or exceptional item for us for the current year or the next year? Everything kind of works out positive for us. All the government initiatives that have been undertaken, be it the BWMR, in terms of stringent guidelines. The better the compliances, the stringent the compliance, the better for us. When it comes to the PWMR, likewise. When it comes to EPR, again, that's a positive thing for us because we again, are an important stakeholder in the ecosystem, when it comes to recycling and manufacturing and giving it back to the circular economy or to the OE. Likewise, GST also. That again, works out well in kind of transitioning from the current status quo of the unorganized segment to the organized and bringing us in a level playing field, when it comes to procuring and selling. We don't see any of the factors becoming an issue. Those are solutions to the issues that we faced in the past. Mm-hmm. Nothing from the RCM side as well? Nothing from reverse charge. RCM also, so in terms of batteries. The RCM is getting notified shortly. That is what we are seeing. Piyush, do you think that these unorganized players, they will continue to be a competition to you or they'll be eliminated? Or do you think that you will form some complementary alliances with these unorganized players going forward? I think the latter one, what you said, they will start complementing and also coming to the ecosystem, organized ecosystem. Elimination is not something which is the positive approach forward. Bringing them aligned with an ecosystem which is good for the entire economy of India and also in recycling is what we foresee. They will kind of also become part of the entire value chain proposition for us in terms of whether it is procurement of a battery or the other raw materials that goes into refining. Mm-hmm. Are you looking at acquiring some of these small entities and making it larger? Nothing as of now. That is something which will shape up in the upcoming quarters, years. That is something which we cannot comment on right now. That is something what time will tell and how they kind of react to coming into the level, to the organized segment. Mm-hmm. Last question, if Vijay can help, by when do you think that phase II expansion will be achieved and by when do you think that you will be able to get the maximum utilization from the phase II of expansion plan? phase II expansion, we are expecting in the second quarter of next financial year, that is Q2 FY 2026. As Piyush rightly said, phase I will start from April onwards with achieving about 70- 75 metric ton. The phase II, yes, of course, we'll start our thing in the Q2 and from October onwards, the capacity utilization will be around 70%-75%. Overall, for full year, you can see 56,000 for next year on a blended basis, the output should be around the range of 50,000-55,000, 55 metric tons of output in the TKD plant. Okay, team. Thank you for answering my question. Thanks a lot. Incremental INR 72. Incremental, yes. Yeah. Thank you. Ladies and gentlemen, this will be our last question. It is on the line of Shweta Dikshit from Systematix. Please go ahead. Hi. Thank you again. My last question is, any thoughts on aluminum? Whether what we're looking at for FY 2026, I suppose, FY 2025, that the segment was put on a pause, but how are we looking at it? What's the future or outlook for the segment? Any clarity there? Yeah. When it came to the aluminum, the die-cast series that we started last year, the start was good, but again, the business scenario kind of became very vulnerable because, unfortunately, hedging the die-cast alloy, the alloy in question where aluminum typically forms about 80%-85% of the entire alloy, wasn't possible. The entire industry, in fact, just not to kind of benchmark us, the entire industry as such, even significantly larger players in India got affected drastically. It was judicious of Pondy Oxides to take a step back and put it in dormancy. Looking forward for this year, we're not kind of completely moving out from aluminum. We're looking at it from a very different approach where there is a very strong possibility of hedging both the supply and demand side of it. We're looking at an alternative arrangement in terms of the product portfolio. Aluminum will be a factor which will play a role in the entire portfolio, because non-ferrous to us, the entire portfolio analysis is quite important. Aluminum in the next financial year, you will kind of see aluminum numbers come in some form or the other for sure. All right. Thank you. Follow-up on that is, are we still looking at evaluating the product portfolio for the aluminum segment or that is something that we still need to zero it down and then progress towards on that path? No, we have done our evaluation, of course, but just to kind of since our priority right now, like we mentioned earlier, our priority now is to ensure that lead gets implemented seamlessly, and then we again, do not a review, but just to kind of implement and execute what we've planned in aluminum also. That will take some amount of time, but then that is something which will be part of the journey for the next three years. It is affirmatively going to be contributing to the top line this FY 2026, maybe? Yes. All right. Thank you. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to the management for the closing comments. Thank you everyone for participating in this call. We trust we have addressed all your queries during this session. If there are any questions, please feel free to reach out to us, for 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. On behalf of Go India Advisors LLP, that concludes this conference. Thank you for joining us and you may now disconnect your lines.