Ladies and gentlemen, good day and welcome to Gravita India Limited 1Q FY26 Earnings Con Call. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during 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. Manish Mahawar. Thank you. Over to you sir. Thank you. On behalf of Antique Stockbroking, I would like to welcome all the participants on the 1Q FY26 Earnings Call of Gravita India represented by Mr. Yogesh Malhotra, Whole Time Director and CEO, Mr. Naveen Prakash Sharma, Executive Director, and Mr. Sunil Kansal, Full Time Director and CFO. On the call, without any delay, I would like to hand over the call to Mr. Malhotra for opening remarks, post which we will open the floor for Q&A. Thanks. Okay, over to you. Thank you, Mr. Manish. Good afternoon everyone and welcome to our Q1 FY26 earnings call. I trust you have had the chance to go through the earnings presentation and financial results that were uploaded on the stock exchanges. I'm pleased to share that Gravita has made an excellent start to the fiscal year, delivering outstanding performance across our key business segments. The company reported healthy growth in revenue, EBITDA, and PAT, reflecting the strength of our operations and the resilience of our business model supported by a net debt-free balance sheet. This performance underscores the momentum behind our continued progress. Before delving into results, I will briefly discuss the strategic highlights and project updates on the capacity expansion front. Gravita is making steady progress with current capacity reaching 3.40 lakh metric ton per annum. The company is well positioned to cross the 7 lakh metric ton per annum mark by FY28, reflecting its long term growth vision. With a capex plan of INR 1,500 crores extending to FY28, Gravita aims to deepen its presence in current businesses and diversify into new domains such as lithium-ion, paper, rubber, and steel recycling. Around INR 1,000 crores is designated for existing business lines with the balance set aside for the next or emerging verticals aligned with our broader diversification goals. The pilot lithium-ion battery recycling unit in Mundra is advancing steadily and is expected to be operational in Q2 FY26. Gravita remains firmly on track to meet its ESG targets for FY27 in line with its long term sustainability roadmap extended to FY34 and FY50, embedding ESG at the heart of its strategy. Gravita is cultivating responsible business practices, advancing innovation, and reinforcing transparency to deliver sustained value and uplift local communities. Coming to the operational performance. G overnment tightening of BWMR and EPR frameworks has significantly boosted the availability of domestic scrap. On the volumes front, total volumes witnessed a growth of 12% in Q1 FY26. On a year-on-year basis EBITDA per ton improved significantly across all segments: INR 21,790 in lead, INR 17,140 in aluminum, and INR 10,213 in plastics. Coming to the consolidated financial results for the quarter, Gravita India Limited reported revenue of INR 1,040 crores in Q1 FY26, making a growth of 15% year-on-year. 47% of this was driven by value-added products, reaffirming progress toward our VISION 2029 targeting 50% contribution through value-added products. Adjusted EBITDA increased to INR 111.70 crores, reflecting a growth of 22% year-on-year. The EBITDA margin remains strong at 10.74%. Profit after tax rose to INR 93.26 crores, making a significant increase of 39% year-on-year. PAT margin stood firm at 8.97%. In conclusion, Gravita is advancing steadily towards its VISION 2029, underpinned by a well-defined strategy to scale its core businesses and diversify into emerging sectors such as lithium-ion, rubber, steel, and paper recycling. The company has set forward-looking goals including achieving a volume CAGR of over 25%, profitability growth exceeding 35%, and maintaining a return on invested capital above 25%. It also aims to grow its non-lead segment to contribute over 30% of total revenue, derive more than 30% of its energy needs from renewable sources, and reduce energy intensity by over 10%. With a legacy spanning over three decades, 13 environmentally responsible manufacturing units, and a commercial footprint in more than 70 countries, Gravita is uniquely equipped for long-term value creation. Its growth is supported by a focused capex program, capacity ramp-up initiatives, and adherence to evolving global compliance standards. This trajectory is further propelled by the company's emphasis on operational efficiency, expansion into higher margin value-added products, disciplined risk management including hedging strategies, strong leadership, and enduring stakeholder confidence. Sorry to interrupt, sir. Your audio quality is not clear. Okay. Am I audible now? No sir, still the audio quality is not clear. Let me figure it out. Okay, can you speak something? Hello? Yes, that's better now. Okay, do you want me to repeat it? The audio quality went up. Okay. Just a moment, sir. Is the auto quality better now? Yes sir. it is better now? Yes. Okay. Now. Do you want me to repeat the last error again? Again, the audio quality, it's a bit going. There's an echo. Yes, yes. Ladies and gentlemen, the line for the management is disconnected. Please hold while we reconnect them. Ladies and gentlemen, thank you for being on hold. The line for management is now reconnected. Thank you. Over to you, sir. Conclusion, Gravita is advancing steadily towards its VISION 2029, underpinned by a well-defined strategy to scale its core businesses and diversify into emerging sectors such as lithium-ion, rubber, and paper recycling. The company has set forward-looking goals including achieving a volume CAGR of over 25%, profitability growth exceeding 35%, and maintaining a return on invested capital of about 25%. It also aims to grow its non-lead segment to contribute over 30% of total revenue, derive more than 30% of its energy needs from renewable sources, and reduce energy intensity by over 10%. With a legacy spanning over three decades, 13 environmentally responsible manufacturing units, and a commercial footprint in more than 70 countries, Gravita is uniquely equipped for long-term value creation itself. Growth is supported by a focused capex program, capacity ramp-up initiatives, and adherence to evolving global compliance standards. This trajectory is further propelled by the company's emphasis on operational efficiency, expansion into higher-margin value-added products, disciplined risk management including hedging strategies, strong leadership, and enduring shareholder confidence. That's all from my end. I would now request to open the floor for questions and answers. Thank you. Over to you, Mr. Moderator. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Dixit from Goldman Sachs. Please go ahead. Yeah, hi. Good afternoon everyone and thanks for the opportunity. Congratulations for a good set of numbers. A couple of questions from my side. If I look at the overall results, while revenue and volume growth has remained a little bit lower than the expectations, EBITDA growth has been quite good. Is it due to our sourcing efficiencies continuing or have we got the semis from Africa and refined them and sold them in India to take advantage of the difference in LME and MCX price? I just wanted to get a little bit more color on that. Yeah, absolutely. The reduction in volume also is partly because we have shifted some of the material from our African plants into India. Also, the EBITDA is better because of our increased value-added product contributions, which has grown to around 47% last quarter. Both of these have contributed to increase the EBITDA margins for us. Given the current EBITDA pattern that we have, and it has increased quarter-after-quarter, the current EBITDA that we see around INR 21,000 odds for lead, is it the sustainable margin that we can expect going ahead as well? Yes, around INR 19 to INR 20 per kg can be expected as a sustainable margin going forward also. Earlier we were saying around INR 18 to INR 19, but now we see that there has been some increase because the value-added content has also increased, and if we can keep that contribution coming, the overall EBITDA would increase to around INR 19 to INR 20 per kg. That's helpful. The second question is on aluminum. Is it possible to provide an update on the listing of aluminum alloy on MCX? Is that trading, I mean, when can we expect it to be listed so that we can also hedge it? Yeah, so aluminum on MCX is already in process and it's expected to be done in this quarter. It's already been considered in the board of MCX and all documentation works at their end are completed. We are hopeful that they should open their first go down somewhere in the north. These are the data which we received from the MCX office. Assuming it is done in this quarter, what kind of exit capacity utilization in aluminum can we expect by Q4? Currently, if you look at our overall capacity in aluminum in India, it's almost under 10%, just 5%. It's actually 5% currently because we are not even using that plant. All the volume that is coming for aluminum is coming from our overseas locations only. We believe that once this MCX will start come setting up engine mechanism for ADC12, we will start procuring material and then I think by Q4, you can expect around 20%- 30% utilization of the plant for India and slowly we'll build it up depending on how much trading gets done on the exchanges going forward. Great sir. Thank you. I will come back in the queue. Thanks and all the best. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow up question, we would request you to rejoin the queue. The next question is from the line of Amit Lahoti from Emkay Global. Please go ahead. Thanks for the opportunity. My first question is on capacity utilization from existing operations. We have seen that volumes have been flat for three quarters in a row. Are we not sweating our assets hard enough to get more volumes as we are just at 65% utilization? If you look at the lead capacity and the lead utilization, it's around 75% of the total, which is a kind of optimal. Currently at optimal level, currently to increase capacity further we will have to set up new capacities. We are in line with increasing our capacities in India specifically looking at additional raw material availability. You will start getting some results from those capacities as we build it up from Q3 onwards. Okay, when we target 25% growth for next year in terms of volume, how much volumes are going to come from expansion projects and how much from existing capacity ramp up if you could break it down? If you look at the current scenario, around 15%- 18% could come from existing capacities only. This was 12% as I mentioned earlier, only because we have shifted some of the material from our overseas plants into Indian plants. If you look at the production capacities, the growth would be around 15%- 16% in the first quarter. We expect 15%- 16% growth from the existing verticals only, and maybe the additional 10% would come from the additional capacity that we are going to set up. Okay, and then my second question is on aluminum. Globally there is a tight scrap supply. There is also a growing call in Europe to implement export controls and tariffs on scrap because they don't really want to export their scrap outside of Europe. On the demand side, Chinese have put up new capacities in aluminum recycling. In that kind of market structure, how do we differentiate in terms of scrap sourcing capabilities and margin sustainability for aluminum? To cover that, we are already focusing more on Africa where we have control on the scrap supply. As we mentioned, the Indian capacity as of now we have kept on hibernate until we have some hedging mechanism comes in. To ensure profitability from Africa, we are the one who got BIS approvals because there's a mandate of QCO since November 2024. Our African plant got BIS approvals and we are able to feed Indian market from our African facilities. We have focused there to cover all these, and due to this. Yeah, yeah, please go on. Due to this, our EBITDA margins have also grown up from INR 14 to INR 15 per kg to INR 17 per kg because there was a shortage of raw material from the Europe market, and we are able to get better margins from our African supplies of alloy to the India market. Being the first mover in taking BIS approvals for our African plant, we are the few suppliers who are able to bring material into India. Okay, so Africa gets its scrap from Europe, and if there is any kind of export control in Europe where they are not able to export scrap to Africa, would it not be difficult to procure scrap in African operations as well? No, Africa is dependent only within African scrap. We have few countries together and we bring scrap to one location because we operate five plants in Africa and there are more than 52 countries in Africa. Five, seven countries have a boundary shared with that location and we are not importing anything over there. It's domestic scrap within the African continent. There also we are planning to both increase the capacities in the existing plants and, going forward, setting up new plants in geographies where we are not present. Okay, got it. Thank you and all the best. Thank you. The next question is from the line of Rehan Saiyyed from Trinetra Asset Managers. Please go ahead. Good afternoon everyone and thank you for giving me the opportunity. My first was already answered and I have left it. You have highlighted the target of 7 million metric ton capacity, could you please update on the current execution, state of planned capacity additions, and how much of the resumed capacity is expected to come online this year? We are expecting a capacity increase of around 100,000 metric ton this year, which is in line with our plans to take it to around 700,000 by FY2028. Some of this will start coming up in Q3 and some will be in Q4. Okay. Okay. Just my second question on this, one clarification regarding the property of presentation measurements. Increased share of value of the product around 47% YoY growth. Could you share with specific verticals, like this growth comes from the aluminum side or is from lead, plastic, or rubber? This is a consolidated value-added content from all our existing verticals. It's not only limited to lead, it is coming from all the verticals, plastic also, tire also. Because the volume of these tire and plastic is very less, the lead would be around 40%-45%+. Okay, okay. Particularly Africa and Dominican Republic. However, current profitability and what having mechanical value place beyond the back-to-back shopping of multiple? Just clarify regarding on this. Can you repeat the question again? The first part I could not get. I'm asking about the hedging part, like on the international operations front, particularly the Africa and higher currency fluctuation with the same profitability and what hedging mechanism are we placed beyond back-to-back hedgings? Currency fluctuation does not impact us because our operations are in Africa, but we are not selling anything locally there. All our sales and purchase, all the purchase is in local currency, but the calculation of the prices of raw material is based on USD only. Whatever we are procuring, we are selling it in USD only. There is no impact of currency fluctuation in all of our overseas operations. As far as fluctuation in metal prices is concerned, we are 100% hedged in that. Whatever we buy on any particular day, we hedge it. Either we sell it directly to the customer, price it to the customer, or we hedge it on a metal exchange. We don't take any risk in terms of changes in prices of metal also. We have 100% the global operations are 100% certain, less in aluminum. We are looking at MCX contracts to start having a contract for ADC 12 to start hedging aluminum part also. I'd like to ask questions. What is your capex bound that you have spent in this point and what was the capex plan for quarter-to-quarter? It would be very difficult to tell you, but we are in line to add around 100,000 metric ton capacity this year. That is in line. The overall capacity would go up to 460,000 tons by the end of this year. Roundabout by FY28, it will be around 700,000 tons. Okay, thank you. Thank you. The next question is from the line of Ankit Babel from Subhkam Ventures. Please go ahead. Yes sir. Good afternoon. A couple of questions. One was that this quarter the volume growth was 12% which is way below your 25% volume growth guidance. What kind of growth are you looking at for the full year considering the first quarter performance in terms of volume growth? I think year-on-year we are expecting a. As I mentioned, the growth is not going to be linear. The 25% growth rate that we are targeting is for a period of three years because capex, as I mentioned earlier, also will not take place every quarter. It will take some time for us to set up new capacities. The growth will not be very linear, but you can expect somewhere in the line of 25% only year-on-year also. In some cases it will be 22%, 23%. In the other year it would be around 27%, 28%, but it will be 25% in the next three years. This year also, at least you expect 20%, 22% growth. Absolutely, it will be in line. As I mentioned earlier, some of the capacities that we are doing will start giving us results from Q3 onwards. The overall volume increase part of it is going to happen from the existing capacity which will be in the line of 15%- 16% and the balance 7%- 8% would come from new capacities that will be increased in the next two. Okay, will it be possible to give you some volume guidance on your products? Mainly the lead and the aluminum and plastic, what volumes are you targeting t his year? We are more concerned about the profitability part and that is why whenever there is a chance we bring some of the material from our overseas plant into India. You will not see that impact on the volume turn, but you will see it on the profitability front. If you see even this year, the volume growth is only 12% but the EBITDA growth is around 22% year-on-year. That is because we have sacrificed some of the volume to have higher profitability. That will keep on happening. On volume camps you may see that sometimes it will be 25%+, but there would be times when you will not see 25% growth in volume. That is not the right criteria to focus only on volumes. You will also have to look at the EBITDA margins or the profitability also. Okay, the improvement in your lead advertise. Because the production volume growth will not always reflect on the sales volume growth because sometimes we bring material into India and then it does not get reflected in the overall volume growth. Okay, okay. Your EBITDA per ton on the aluminum was lower both on YoY and QoQ basis. What was the reason for that and where do you expect this to stabilize? On a yearly basis, we have always said that there are times when there are some arbitrage opportunities or some other price fluctuations that make it difficult to ascertain EBITDA per ton on a regular basis. On a sustainable basis, around INR 14 to INR 15 per kg margins are our guidance for future. Even this quarter also we have done more than that. It's around INR 17 per kg. In aluminum currently there is no mechanism for hedging. There are times when we don't get the margins, it does not get reflected in the P&L. If you look at last financial year, it was higher, but the financial year prior to that it was lower. I mean, it was around INR 12, only INR 12 per kg. This is all because there is a variability in the prices of aluminum which gets reflected in the component loss. If you talk about on a sustainable basis, around INR 14 to 15 per kg is a sustainable margin in aluminum. How does change in aluminum prices impact your EBITDA because you hedge your— We are not hedging aluminum. As I mentioned, we are only hedging currency. Lead, aluminum is not. Coming back to the volume guidance, if you can give for this year with lead, aluminum and plastic? I mentioned that volume guidance in terms of productivity, around 15%-- 16% would come from existing businesses, and as and when we put up capacities, there would be around 7%- 8% increase from that additional capacity that we are expecting in this year. It will be in the range of around 22%- 28%. Okay. Okay. Okay, that's it. Thank you so much. Thank you. The next question is from the line of Sagar Shah from Spark PWM. Please go ahead. Thank you sir for the opportunity and first of all congratulations for healthy set of numbers. I had some few questions. My first question was related to your drivers behind the increase in the lead margin this quarter we had. We saw our lead margins actually increasing. I am talking that big level. I think we have reached out 12.5% as compared to the even quarter-on-quarter we have a jump of around 150 bps. What are the drivers of the lead margin? Is it because of the increase in lead prices or is it something else or operating? What is it exactly? First of all the lead prices have gone down in last quarter and it has been going down regularly for the last three to four quarters. It has not impacted the additional margin. What has happened is if you look at our margin profile for the last, you can see. You can see a level of. Hello, there is another voice coming. Sorry, there's a background noise. Noise from Mr. Sagar. Yes, sir. Hello. If you look at the overall margins in lead, you can see a steady increase in some of the margins over the years. Part of it is because of economies of scale. As we have grown the business, the overall overhead remains almost the same. That has contributed to some extent to increase the margins overall. The value-added content has also gone up in the last quarter. The total value-added products that we sold is around 47%. That also contributes to the increase in margins over the years. Market arbitrage also plays a role because we have global operations. Sometimes when the Indian market prices are higher or the global market prices are higher, we take advantage of that and that also contributes to the increase in overall margins for us on a sustainable basis. Our guidance is that we can get around INR 19 to INR 20 per kg of EBITDA margins on a sustainable basis. Okay, thanks sir. My second question was related to our plastic segment. The plastic segment, our margin in this quarter has come down actually. Going ahead, what's your view on this segment? Sir, basically because we saw a huge drop in the plastic margins as well as I wanted some aspects on the rubber segment. We haven't actually got any revenue from the rubber segment. Although you have guided that going ahead, you'll be selling some other products, wireless, soil, and some other products from the rubber segment outside of our to the industry. What are the updates on that segment as well as on plastic? In the plastic segment, it's the same. It's INR 10 per kg which is a steady margin. The only thing is that the volumes have not gone up as much as we wanted because developing plastic products is going to take some time. It's under developmental phase right now and we expect that by the end of this year you can see some growth in plastic volumes because currently some of the developments have started taking place already. As far as rubber is concerned, the Romania plant where we have bought it, we're getting an EBITDA per ton of around INR 7 to INR 8 per kg. It's in the stabilizing phase right now. Hopefully by Q3 or Q4 you'll be able to start getting some results from that plant also. In addition to that, we are also putting up a plant of rubber recycling in India, which will be within this year itself. You will start getting some results of that also coming either in Q4 this year or maybe Q1 next year. Okay, so since the EBITDA pattern is quite stable, is it fair to assume that the plastic realization was low and that led to the drop in the weight margins? Sorry. Yeah, so the volumes were lower. Okay, fine. My last question was related to the capex. Can you highlight that? What kind of capex is going to get incurred in FY26, by how much are you planning rubber, copper? In the current year we are planning to put up, I mean to increase the capacity to 100,000 metric tons per annum. This will be mostly in India because we see a lot of scrap availability here. We kind of increase the pace of setting up plants in India. In that, mostly the capacity expansion will take place, followed by rubber and lithium-ion. These are the three segments we are targeting in the current fiscal year. The total capacity that we are targeting is around 100,000 metric tons. Can you highlight the amount, sir? The amount to be incurred in each segment. Sorry. Sir, do you have any follow up question? You can rejoin the queue. There are several participants in the queue. Yeah, that was the last question actually which I was going to answer. There are several participants waiting for their questions. Okay, okay, fine. Thank you. Thank you. The next question is from the line of Sani Vishe from Axis Securities. Please go ahead. Yeah, thank you. Congratulations on another set of good results. My first question is a kind of follow up on the earlier discussion. We said our volume growth was partially lower because of value-added product addition. Is my understanding correct that if you have some additional value-added products, the end volume is lower than the initial volumes, is that correct? No, sir, actually what we mentioned was that our volume growth was lower because we shifted some of the material from our African plants to our Indian plants. Right. The volume should indeed increase, right? In terms of value-added products, somewhere it should reflect. No, no. What we do is, sorry? The volume should somewhere reflect, right? Even if it is shifted from Africa to India? What happens is that because the Indian market is higher, generally we do partially some process in Africa and shift it to India for the balance processing. Because of this, you can only count it. There is a process. Either we can sell it overseas or we can bring it to India and then do some processes in India. It's not entirely a value-added product that we make. We make normal products also, but some of the processes we shift to India only. That is why it does not just, it gets eliminated when you do the consolidation. That is what I'm asking. If it is not reflected in Africa, it will reflect in India volumes, right? Somewhere it will reflect. India volume, it reflects. But India volume is already at optimal capacity utilization. That is why it does not. I cannot count it. The point is that we can sell it overseas directly to value-added product there and, sorry, do all the processing in those units there, then ship it overseas, or we bring it to India, process it in India, and then sell it to Indian customers. It gets eliminated. The overseas overall volume gets eliminated and it shows only in the India volume. Okay. That leads to better EBITDA per? Overall. Yes. Sir, we have been always guiding EBITDA per around INR 19 per kg, but it seems we keep adding value-added products. It can easily sustain or about INR 20 like it has happened in this quarter. Is that correct? Yes, definitely. What happens is that over the years our overall Indian scrap availability is also increasing, which does not give you as much margin as the imported material does. What we expect is that it will depend on the same machine in Italy because the Indian volume will increase, but at the same time the valuation will also go up. It will remain in the same band of around INR 19 to INR 20 per kg. Okay, fine. One small question. Our other income, which includes, I think, the hedging income. That hedging income, I think, would be around INR 11 crores this quarter. That's a rough calculation. There is still around INR 19 crores of other income that is left, which was a similar amount last quarter also. This remains higher compared to all earlier quarters. Can you just throw some light on it, and can we expect it to be around this level going forward? Yeah. Basically, this amount belongs to our treasury income. The money is kept ready for future capex on the working capital until the time we spend this money for extension of our existing business and upcoming business. After that, this treasury income will not be there, but there will be some operational income. Gradually, we are utilizing this liquidity for expansion of the business. Till the time we are getting this treasury, which is close to INR 19 crores in this quarter. Okay. That's why it increased after the QIP and associate. Thanks. Thank you. The next question is from the line of Sumangal Nevatia from Kotak Securities. Please go ahead. Yeah, good afternoon everyone, thanks for the opportunity. My first question is on capex. If you see, last two, three years we've been targeting around INR 200 crores annual capex, but FY24, FY25 both we spent around INR 100 crores only. One is, just want to understand what has been the reason. Is it, I mean, some visibility on growth which we are looking at or some other constraint which has led to lower capex? Then, on this year and next year, we have a very significant jump in capex being planned. How confident are we of putting the capacities on time? If we put such significant capacity, what is the scrap availability situation we are looking at? Are we confident of running the plants at decent utilization? Yeah, so basically, capacity expansion, whatever we planned for this year and for upcoming years, it is 100% on. We are 100% confident of execution of that capacity expansion plan. As already mentioned, this year we are going to increase approximately 100,000 tons of capacity addition as the plan, from current capacity of around 340,000 tons to approximately 440,000 tons. That's 100% online, and in future also we are going to stick on the plan of taking it to 700,000 tons by FY28. Any reason why last two years we have spent the 100 odd crores? Was it a capital constraint or some other issues? Frankly speaking, part of it was because most of that was going to take place in some newer, I mean, diversification, newer verticals, and we couldn't go and do it because, I mean, lithium-ion we started doing it now, but in paper and steel, which were going to be major contributors to this capex, we have put them on the back burner. Right now, in the existing verticals, we are seeing growth rates, so we are going ahead and putting up capacities in lead, rubber, lithium-ion, and to some extent aluminum recycling. Maybe the steel and paper and other verticals will take place in the later part of the three-year period. Earlier, we were focusing on these things, and it was taking more time because we had to understand the technologies also. That is why we could not do those capexes, but now these capex that we are targeting in the next two years are going to be in the existing verticals, majorly, and looking at the scrap availability in India, most of this is going to take place in India. We are fairly confident that those expansions will take place now. Understood. Understood. My second question is with respect to M&A opportunity. Now we have a very comfortable balance sheet. One is which areas are of interest to us and are there any sizable opportunities available in those areas which we are in the process of evaluating. We are looking at opportunities in geographies like Eastern Europe, Middle East, Asia Pacific for the existing verticals. These are the areas we are looking at for opportunities for merger and acquisitions. We have set up a new division which is looking only at opportunities for merger and acquisition. We are fairly confident that we'll do some acquisition in the next maybe a year, year and a half. There should be new commodities or existing commodities? Mostly existing commodities. Only in new commodities we would want to set up our own plant first to understand the technology better rather than going and acquiring a new plant anywhere else. Understood. Understood. Just one last question on BWMR. Request Mr. Sumangal to rejoin the queue for the follow-up question. Okay, no problem. Thank you, sir. All the best. Thank you. Thank you. The next question is from the line of Vikash Singh from ICICI Securities. Please go ahead. Good afternoon sir, and thank you for the opportunity. Sir, I see that in our future growth the next highest growing segment is rubber. Just wanted to understand what kind of the revenue and margin contribution we can expect from this segment? The margin contributor, I think we've already mentioned that we are expecting around INR 7 to INR 8 per kg margins from rubber, but it will change from geography to geography depending on what is the prices of the end product in that particular geography. It will really change. We are planning a revenue of around INR 300 to INR 400 crores by FY 27, FY28. Understood sir. Since second question pertains to our sourcing basically, given our capacities are increasing across segment, is the sourcing, is entire sourcing, would be available especially for the lead rebuilding India or because you just said that you are bringing some material from Africa? Are you facing some problem with the sourcing and enough material is not available in the system? No. We are focusing both Indian sourcing also and overseas sourcing also. The only thing is that earlier Indian scrap was not available to us, but now we have started getting Indian scrap also. That is why we are increasing the total capacities in India much faster, because now we have both overseas scrap also available to us and the Indian scrap also available to us because of EPR regulations. This is the second part of the question, that are we facing near term sourcing challenges because we are importing some material from Africa and for being since there? No, we are not. We are not facing any sourcing problem. The only thing is that imported material gives you better margins. That is why we will keep importing material as far as possible, but we will keep increasing the capacities as and when more Indian scrap will get available. The sourcing is not going to be a problem, at least for the next two to three years. Notice that. Thank you and all the best. Thank you. The next question is from the line of Ashish Kejriwal from Nuvama Institutional Equities. Please go ahead. Yeah. Hi, thanks for the opportunity. One, is it possible for you to guide the effective tax rate for the year? because tax rate has been increasing, quote unquote reserves. Basically, the effective tax rate for the operational part is approximately 13%- 14%. Since on temporary basis we have some treasury income also, till the time we use this money, treasury money for the expansion of the business which is planned, we are going to have this treasury income which is attracting a full tax. Instead of some locations where we have the tax exemptions, this treasury income is going to affect the tax rate. Currently, with this treasury income, we are expecting effective tax rate of approximately 15%- 16%. Currently it is slightly higher because of some jurisdiction in Africa. The tax exemption got expired, but we have another option to spend, do some capex and expand this tax rebate in that geography. We are doing that and hopefully we will get the effective tax rate at 15%- 16% at this moment with the treasury income. When the treasury income is not there, it is used in the business, the effective tax rate will come back again to 13%- 14%. For this year you can assume it to be nearby 15%- 16%. That's great sir. Secondly, in terms of capacity expansion, we understand that you are going to expand capacity by around 100,000 tons in FY26 and the work is also going on the ground. I don't know whether we have started work on FY27 numbers also where we are expanding capacity. My question is, this 100,000 tons, is it possible to break into different segments? What about FY27? Have we started the work over there? Thirdly, on capex, how much have we already spent in first quarter because our overall capex guidance is around INR 375 crores for this year? Thank you. In terms of verticals, I think it will be very difficult to assign the capacity increasing in different verticals. Majority I can tell you is going to be in lead followed by rubber and lithium-ion recyclings in this year. There would be some increase in capex in aluminum also. We have also started work on FY27 and we have plans to set up a plant in East India also. That is also part of the process. Some of the capacities that are going to come in FY27 is overseas Dominican Republic expansion that we have planned. New greenfield project in Dominican Republic that we are planning. That is also we are expecting a license by Q4 this year for that capacity also. We are in line with setting up capacity expansion for FY27 also. capex in first quarter, how much we have spent? Spent around INR 60 crores in capex in the first quarter. Great, thank you and all the best. Thank you. The next question is from the line of Alisha Mahawla from TRUST Mutual Fund. Please go ahead. Hi sir, good afternoon. Thank you for the opportunity. Is it possible to say how much is the lead capacity going to increase by after this capacity when in Q3? Is it expected towards the end of Q3? Yeah. Some of the capacity would be happening in Q3, and part of it would happen in Q4 also. Around 50,000 to 60,000 tons of capacity increase you can expect in this year inlet. I mean, what kind of, is it possible to quantify for FY27 how much will our capacity expand? Right, like if 2026 bit, are you taking on the south, how much is it in 2027? Sorry, I didn't. I wanted to understand capacity expansion. In FY27 it would be around 125,000 to 150,000 tons overall total capacity increase. Considering that most of the capacity is coming with the pace of the year, it's still possible for us to achieve the 20%+ kind of volume? Your voice is not very clear. Yes, there's a background noise from Mr. Alisha's line. It Ms. Alisha. My bad. Ms. Alisha's line. Just wanted to understand, to most of the capacity coming in each day of the year, would it still be possible for us to do 20%+ kind of volume growth in the floor? Yes, as I mentioned earlier, it may not reflect in the actual numbers because sometimes we bring some of the material from our overseas plants into India. In the end, you'll have to look at the EBITDA numbers, and that will reflect around 20% plus growth in any case in FY26. The total production growth would be upwards of 20%. Whether it reflects in the revenue numbers or not, we'll see. Yes, the capacity will definitely impact the numbers this year. Thank you. Thank you. The next question is from the line of Shweta Dikshit from Systematix Group. Please go ahead. Hi, good afternoon. Thank you for the opportunity. Just I've listed the cadence number for this year and how much was it in the first quarter? The overall capex number in this year I can't accurately tell you, but we've spent around INR 60 crores already this year. The plan is to spend upwards of INR 350 crores this year and add additional capacity of 100,000 metric tons. We are in line with adding that 100,000 metric ton capacity this year. It will be done in this year, so we're very confident of doing that. Okay, and the two other questions, firstly on the rubber side, as you said that your plant in Romania is currently making INR 7 to INR 8 per kg and it is ramping up, stabilizing as well. Similar thing is expected when the India plant comes on stream. Even after operational efficiencies are achieved and the capacity ramps up, are we still looking at INR 7 to INR 8 per kg of EBITDA per ton in rubber? Can we expect this number to be higher? [cross talk] Yes, the emitter number would be in the, sorry, please, you continue. Ask me the second question also. Yeah, and the second question is on lithium-ion. While we, it is expected to be a part of major bar like following the lead and rubber. This is going to be the third largest capex drawer for the year. Since this is just a pilot project, any light that you can throw on the financial side, whether it is expected to contribute to profitability as well or is this just something that's going to be capex allocation but not yet to contribute to profitability? Yes, yes, absolutely. Lithium and project, we don't see that it is going to contribute at least this year because there are a lot of variables that will affect this lithium-ion project. It's partially a plan for the future because we believe that actual scrap will start coming around two to three years from now. We just want to be future ready as far as lithium-ion battery recycling is concerned, and technology also we need to work on to finally streamline technology for lithium-ion battery recycling as well. It will not contribute. Actually, if it contributes, that will be additional to what we have said so far. As far as concerned, the margins are going to be around INR 7 to INR 8 per kg. The only thing is that when we streamline the operations in Romania and in India, the volumes will keep on increasing and that is when it will start adding to the bottom line. Understood, sir. Again, a follow-up on the volume side. I understand that we expect a major chunk of volume growth this year from the existing operations and around 7%-1 0% from the new expansions that come on stream. That's happening at Q3, Q4. When we look at YoY growth in FY27, we will already be at a peak utilization level of our existing capacity. How do we see growth panning out in FY27 when we achieve the maximum operational optimum utilization of existing capacity? As I mentioned, the capacity increase will start giving results in Q2 also. Some will, in major part, come in Q3 and then some part will come in Q4 also. Overall, from Q2 onwards you will start seeing some improvement in the overall volume growth. Overall, 6%- 7% when we say it takes into account that the capacities will start coming from Q3 onwards. If you look at the total capacity increase, it's around 100,000. That is around 30% increase in capacity in new capacities. Even if you start getting it partially, they will start giving you some impact of the total 7%- 8% for the entire year. In FY27, this entire 1 lakh should operate at optimum utilization? Yes. Yes. Okay, thank you. Thank you. Ladies and gentlemen, this was the last question. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir. Thank you everyone for participating in this call. We trust that we have addressed all your queries during the session. However, if there are any remaining questions, please feel free to reach out to our investor relations team. Once again, we extend our gratitude to all the participants for joining us today. Thank you and have a great day. Thank you. On behalf of Gravita India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.