Exide Industries Ltd (NSE: EXIDEIND) Q2 2025 Earnings Call dated Nov. 17, 2025
Corporate Participants:
Aditya Jhawar — Analyst
Avik Roy — Managing Director and Chief Executive Director
Analysts:
Unidentified Participant
Vibhav Zutshi — Analyst
Kapil Singh — Analyst
Raghunandhan N. L. — Analyst
Ashish Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Excite Industries Q2FY26 earnings conference call hosted by InvesTech. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aditya Jawar from Investec. Thank you. And over to you sir.
Aditya Jhawar — Analyst
Thank you. Good afternoon to you all from Excite Industries. We have with US MD and CEO Mr. Avik Roy, Director, Finance and CFO Mr. Manoj Kumar Agarwal, Praveen Saraf, Executive Director and President and company secretary Mr. Jitender Kumar. Before we proceed, here is a disclaimer for all. A few statements by the company’s management in the call may be forward looking in nature and we request you to refer to the disclaimer in the earnings presentation for further details. We will start the call with a brief opening remark from the management followed by Q and A. I would now like to invite Mr.
Avik Roy for opening remarks. Thank you and over to you sir.
Avik Roy — Managing Director and Chief Executive Director
Thank you Avith dear Good afternoon ladies and gentlemen and a warm welcome to you to the Excite earnings call. At the outset let me inform you and welcome Mr. Praveen Saraf and Mr. Rajiv Khandelwal who were inducted to the Board of Directors as executive directors effective 1st of September 2025. Both Praveen and Rajiv bring vast wealth of experience in their respective domain which will add value to the next level of growth of ixcde. Praveen Vilvir is responsible for the entire operations of excite since last one year and Rajiv looks after the entire B2C trade business of the company since last one year.
As the moderator informed you, Praveen is also attending this con call. Even before I talk about the key highlights of Our performance for H1 of financial year 26 I would like to talk about the positive news from for our industry that has happened during the year which is that of GST 2.0 reform. Reduction in GST rates for almost all the segments in the auto industry is expected to drive demand for the industry. The GST rate on batteries were reduced from 28% to 18% effective 22 September and for solar combo packs from 12% to 5%. The company is fully aligned to the government’s goal of reducing burden to the end consumer and we have passed on the entire benefit of GST rate reduction to the end consumer during this period.
Now let me talk about the performance of the company. During the first half year nearly 88% of our business has grown by about 7% within this aftermarket. Automotive, solar and IUPS continued to contribute to the growth industrial infrastructure business outside telecom, excluding telecom, performance has also improved on a year on year basis as order inflow and order execution picked up in sectors like power, railways, motive power, etc. Remaining 12% of the business witnessed a decline in revenues impacted by a weaker demand scenario majorly in businesses like Exports Last Mile, which is the E rickshaw business and our telecom business and I’ll come to that little later on.
The company started the year on a strong note with quarter one registering about 5% growth, but showed a 2.1% degrowth in Q2 overall resulting in a modest 1.3% growth during H1. Even Q2 started on a strong note with double digit growth in trade business in July. However, we suddenly saw a shift in momentum once the GST rate cuts were announced on 15th of August, our distributors and retailers started destocking and postponed their buying in anticipation of receiving new stocks with updated prices. The company took production cuts in August and September, the second half of August and the full of September with focus on cash management.
Costs were kept in control at the manufacturing side and raw material procurement was kept under check. We did it consciously to cut down our inventory and build only those goods which could be sold in September. As a result, lower production and lower sales impacted our profitability. However, it helped us to reduce our inventory to a large extent and therefore we generated an incremental cash flow of 500 crore plus by efficient working capital management. Operating profitability was also impacted due to continuous pressure on input material cost. The company is yet to fully pass on the input material price impact to the market.
We have started in Q1. A big portion was passed on remaining. We have also started acting on passing on the input cost to the market. However, once the GST rate cut was announced, we decided that we will put a stop to our price correction of the market because that sends a wrong signal to the market. We wanted to pass on the entire benefit to the customer. Going forward we will see how much input cost inflation we can absorb and maybe possibly in the next quarter we can think at least in quarter four beginning we can think whether we can go ahead.
Looking at the input cost we can go ahead with further correction of the prices. However, the constant focus on cash management helped in reducing inventory. As I mentioned just now at the end of September and between March and September we have increased our cash by 500 crore plus at the end of H1. On the operational front, the various operational improvement initiatives on cost excellence and manufacturing technology upgrade that we had taken up and we have been informing to you since last two quarters they are showing results. For example, we have moved a substantial part of our two wheeler battery production to Panjikiri technology.
All such initiatives have started delivering results and its full potential will be realized in the coming quarters. Domestic auto replacement demand was robust in H1 and auto OEM demand is expected to see uptake in Q3 as well. Industrial UPAS and solar witnessed decent growth in demand though there was a decline in Q2 for solar. But with the GST cards and GST being brought to 5% and with PM Suryagarh incentives that are in place, we believe there would be a strong rebound in Q3. October is already an indicator and first 15 days of November is also indicating to that kind of outcome.
Home UPS remains soft due to an extended monsoon season until August in this year and home UPS has a double whammy impact because of the extended monsoon and then the GST red cards. So three businesses, Solar, Home UPS and Industrial ups these are aspirational in nature so this is where the customers deferred their purchase decisions. Whereas in automotive batteries or two wheeler battery after market replacement we didn’t see that impact so much because it’s more of a necessity than aspiration. Tariff uncertainties have heavily impacted the export business for the second consecutive quarter. As you know we expect the situation to continue in similar trend until geopolitical tensions subside.
However, as informed to you in the last call we were making making major active strides to new geographies and new portfolios where our dependence on US and other countries reduce. Those activities are very much in Place and Q4 onwards we will report you again an uptick in the export business because we have found out additional markets, additional portfolios. The trials are over. So from Q4 onwards we hope that from January onwards we’ll again see a marginal tick, positive tick on exports and thereby we’ll reach a steady state in Q1 of next year. However, despite yeah, so just one another point I would like to highlight in my opening remark.
Despite this tough macroeconomic environment, our performance has shown signs of resilience even when production was down, fixed costs were kept under control and raw material procurement was kept under check. Our balance sheet remains very strong with zero debt and a high cash flow generation. As we enter second half of FY26, the outlook for the lead acid business remains positive across most business verticals due to expected uptake in auto OEM demand due to GST reduction. We already see the indicators in our data for October. Just to give you some color, the retail data for October a typical growth scenario for a passenger vehicle was October was 11% against the H1 growth of 4% and accordingly the primary production numbers have also increased as published by SIAM recently for the October except two wheeler I see in all segments in October the SIAM production data Primary production data has been up but good news is in the retail sales for two wheelers the growth has been 52% in October which means there is a huge destocking in the retail channels which gives us hope that the primary productions will pick up again in Q3.
I believe that Excite, with its advanced product portfolio, Pan India distribution network and a strong brand recall will continue to benefit from the growth opportunities. Moving on to lithium ion cell manufacturing project, we have invested about 580 crores in H1 in FY26 and further 65 crores we have already invested in the month of October. With this, the total equity investments made into Exide Energy, which is our 100% subsidiary till date stands at 3,947 crores. Equipment installation and commissioning works in Exide Energy is nearing completion. The company expects to start production towards the end of FY26.
At this moment we are going through process validation and sample preparation for some of our customers. Nearly 100% of the utility systems are nearing commissioning and we are also meanwhile engaging with various OEMs of 2 Wheeler, 3 Wheeler, 4 Wheeler as well as stationary energy providers across key and customer markets. With this I close my opening remarks and ladies and gentlemen I am happy to take your question.
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press STAR and two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Vibhav Zucchi from JP Morgan. Please go ahead.
Vibhav Zutshi — Analyst
Yes, hi sir, thanks for the opportunity. My first question is on the Lithium ion business. First of all, congrats on making no project of such big scale towards completion. Now regarding the product card that you have mentioned that will start in November, could you please provide a sense who are going to be the eventual customers? Looks like you are starting with cylindrical and prismatic lines. So beyond they have other OEMs approached us, have you finalized any of that? And secondly, given that we are close to commissioning, any sense how the margins can look like maybe not now but say a year down the line.
Thank you.
Avik Roy — Managing Director and Chief Executive Director
So there are two questions. The first one is on the readiness of our lines. So as we mentioned earlier also by VAV that we will be starting with our first line which is basically for two wheeler application. This is the NCM line, the cylindrical cells which we will be commissioning first. And we are talking to large OEMs for the OffTech already and two wheeler OEMs. I would not like to name them but you can make your best guess. So they are going to be the first customers of us. So we are preparing samples for them.
We are first validating our process. The process is under stabilization. You know, it’s a very, very complicated process of electrode making and then formation. So that process is ongoing. And after that we will give them the samples for their own validation. And these two, mostly these two good OEMs of a two wheeler will be our first customer. We are hopeful. So that’s the first line. The second line that will possibly come online is the one prismatic line with lfp. So that work is also almost installation commissioning is almost over. So we will very shortly start our process validation and then same process of homologation.
That product is generally targeted towards stationary applications. At this moment we have some customer engagement and we have some customer interest to go with us. And these are the first two lines and then coming back to the line two and line four, obviously as line one gets fully utilized, we will shift load to line two also. So that is the plan, that is the sequence we are will be following regarding the margins. I have been telling you and that it’s not the right time to talk about margins. What we are focused on is utilization. We want to ramp up the utilization to 60%, 70%, 80% and then at 80%, 90% utilization level we will definitely do our mathematics one more time.
But if you look at global benchmarks, that’s the only benchmark available in India. We do not have a industry benchmark or profit pool on this. But if you look at global benchmark, I think on a steady state level the Margins will still be similar to our current lead acid margins. That’s, that’s our aim.
Vibhav Zutshi — Analyst
Okay, got it. Just a follow up. You know when you say that two big two wheeler OEMs could be the first customer. So given that, you know, with Hyundai we have a binding MOU now, so are we kind of in that similar process with the two wheeler OEMs as well or. That is something which is going to come next once the sampling work is done.
Avik Roy — Managing Director and Chief Executive Director
So no, I mean that I will not be able to tell you. But it’s even the Hyundai agreement. If you recall, it was not us who made it public. Otherwise I am not in a big favor of, you know, making this information in public domain because we signed non disclosure agreement and then next day we go for a press release. Somehow we didn’t want to come to the public domain because you know a lot of activities happen in parallel. It’s not just a purchase order comes and you start supplying from next day. It’s a co development for.
With OEM you are on a particular platform, you are co developing a product for a substantial amount of time and they don’t co develop with 10 other manufacturers, it’s not possible. So if that answers your question.
Vibhav Zutshi — Analyst
No, that is, that is really helpful, thank you. The second question is on the core business. Just curious on why such a sharp production cut was carried out. And you know, obviously because your peer posted you know, a decent 8% top line growth. So when you say that consciously this was cut is it demand which is just deferred. And are we confident that TQ could be, you know, strong because just ask this because now it’s been, you know, six, five to six quarters of low single digit growth for the overall company. So just wanted to get a sense on if you see that now we can go back to double digit growth going forward.
Avik Roy — Managing Director and Chief Executive Director
So let me not comment on the competitor but we have some businesses where we were very strong, where we had competitive advantage in terms of portfolio and market. Those businesses in this quarter did not grow. For example inverter batteries. Inverter battery was heavily inverter and solar, they were heavily impacted both by extended monsoon as well as the announcement of GST 2.0. Some other competitors have less dependence on this business portfolio automotive business. As you know that we have grown very strongly in four wheeler, two wheeler both put together. We grew by almost double digit, very high single digit in this quarter which I believe was higher than what competitors reported.
So it is a mix that in some quarters work in favor of us and in some Quarter it does not favor us and in this case the biggest businesses which were impacted, which is almost one third of our business is the solar business and the inverter. Just to give you a sense, in Q1 just one number I can share with you. In Q1 the solar was the highest growing. If you look at my public disclosures, solar business grew by 35% and in Q2 suddenly went to -5%. Now the market has not crashed, right? The market has not crashed, neither our position in the market has crashed.
So from 35% in Q1 to minus 5% in Q2 you can imagine that this is a one time hit which we had to take because of the circumstances. And I’m very confident that in Q3 all these pent up demands of or the deferred purchase decisions will come back and we’ll bounce back because the demand is there. That shows up in my quarter one performance. So this is just an example how the mix played a role.
Vibhav Zutshi — Analyst
Thank you so much. Daily helpful. I’ll come back in queue.
operator
Thank you. Next question is from the line of Kapil Singh from Namura. Please go ahead.
Kapil Singh — Analyst
Yeah, good afternoon sir. My question is on the lithium ion business. Just wanted to understand how are you approaching pricing of the cells? Will it be at import parity or will it be cost plus? And the second thing is when you talked about margins being in line with lead asset business, we know there is a wide variation between aftermarket and oem. So is it in line with the OEM margins or with the aftermarket or should we look at the average?
Avik Roy — Managing Director and Chief Executive Director
So thank you Kapil. The first question is on pricing of the sales. The pricing of the sales, obviously it will be a mix of both depending on how we end up into negotiation with the customer. Of course we expect that the customer to give value to make in India sales over import Chinese cells. Right. We also hope that the government will structure the imports in a way that it promotes local manufacturing of cells as well because people have put up such heavy investments. So I think it’s a mix of both. With geopolitics setting in and lot of uncertainties in supplies, I’m sure the OEMs will prefer locally made cells.
You know very well that generally the OEMs work on just in time inventory. And with Chinese imports you have to have minimum two to three months of inventory in your stock which has its own risk of price volatility as well as your storage and quality issues. Secondly, I would also like to assume that that with a make in India sale The handling of quality, technology development, quality improvement. This becomes much more easier dealing with a import sale and import vendor, a Chinese vendor and you know, dealing with quality issues. We have ourselves seen how complicated it is and how difficult it is.
So for ease of doing business, I’m sure we’ll get value from the OEMs as a local source. Now what will be the pricing? It’s a matter of negotiation. In some cases import landed or some cases cost plus we’ll have to come to an agreement. But so far, whatever traction we have seen in the two wheeler market, at least we see a huge interest for the local OEMs. They are virtually actually they are doing very well that they want to shift to local cell whenever we are ready for supply. The second question is margins in lead acid business.
I mean one thing you have to understand that this business is largely OEM B2B business. This is not an aftermarket business. So somewhere between and just to inform you, even OEM business for us the margins are also improving. I will let you know because we are also taking price corrections from the OEMs. So it will be somewhere in between the lead acid OEM and the aftermarket lead acid. I would say. So this is our internal calculation. We’ll see as it comes. The trick lies in your operational efficiency and sourcing. Once we ramp up the scale and fortunately we have good collaboration with our principal partner Svolt, we have been able to access raw material at scale from reliable suppliers.
So that’s one lever and the second lever which is most important and that is basically your operation efficiency. The faster you improve your yield and reduce your wastages, that is a clear lever for improving your profitability. This is one advantage, touch wood. I would like to say this is one advantage we will get as an early mover, as a first mover at least we have 18 to 24 months of additional learning curve to improve our yield and reduce our waste. This is we are heavily banking on because this will give us immense competitive advantage in the market.
Thank you, Kapil.
Kapil Singh — Analyst
Yeah, thanks sir. And sir, the other question was on lead acid. Can you just talk about what is your expectation of the replacement market growth and we are seeing some more inflation in lead. So can we expect, you know, in the near term because you’ve not done a price hike, there can be more margin pressures.
Avik Roy — Managing Director and Chief Executive Director
No, we have taken price hike this year number of times we only stopped after 22nd of September or 1st of September after the GST announcement was made. Before that we have taken multiple rounds of price hike. Which wanted to pass on in the replacement market. Kapil. Our growth for subsequent 2/4 were all strong double digit four wheeler. We are still double digitized by vjooqic. This must be news to you. But as I see the numbers in front of me, both four wheeler and two wheeler at around between 10 to 11% in Q2. And on a half year level I would say it’s 12% and 11%.
So you see the aftermarket replacement growth is quite strong. What was not growing in H1 was the automotive OEM market, as you know. But now I have just now mentioned the October numbers of OEMs. We feel H2, the OEM growth will be good and I would say robust. And therefore this gives me confidence that two years down the line my aftermarket demand will also boom with this GST card. Whatever new vehicles are being sold, I’m sure this is giving a new life. Last time we got it during post Covid period if you recall. And now this GST would lead us to an aftermarket boom two years down the line.
We are quite hopeful about it.
Kapil Singh — Analyst
Yeah, sure sir, look forward to that. And best wishes.
Avik Roy — Managing Director and Chief Executive Director
Thank you so much, Kapil.
operator
Thank you. Before we move to the next question, a reminder to the participants. To ask a question, you may press star and one next question is from the line of Sangeetha Purushottam from Cogito. Please go ahead.
Unidentified Participant
Yeah, hi, can you hear me?
Avik Roy — Managing Director and Chief Executive Director
Yes, please. Sangeeta.
Unidentified Participant
Okay, thank you for the opportunity. What I wanted to understand was that, you know, in the lithium ion business, is the replacement cycle of the batteries going to be longer than what we find in the lead acid batteries? And therefore, in a sense, would the lifetime sales over the ownership period of a vehicle be lower than what we have in the lead acid batteries? That’s question one. The second I wanted to understand was that given the automation process improvements, et cetera that we are undertaking, is there a chance that our core margins on the lead acid batteries are likely to see any significant improvement going forward? And also with improvement in the sales outlook, is there any operating leverage which can come into play?
Avik Roy — Managing Director and Chief Executive Director
Thank you, Sangeetha. I think both the questions are very valid. So as I mentioned, lithium ion business, primarily in EV, it’s a B2B business, OEM business. For the simple reason the life of the battery is more than the life of the car in general, at least the first life. First life, I’m saying. So this is. I’m talking about passenger vehicles and all other commercial vehicles. But it has an aftermarket Opportunity in two wheelers and three wheelers because of the applications, because those are used for a lot of commercial purposes, you know, within the city shuttling, they run much more.
And there is a chance for. There is an opportunity of aftermarket as we see two wheeler and three wheeler. But in terms of passenger vehicle and commercial vehicles, I would rather say that it is the OEM business. But the size of the battery is also not like lead acid. In lead acid a battery is used only for starting and lighting and ignition. Whereas in a lithium ion it’s the entire engine, right? It’s the entire engine of the car. So therefore the size of the market is also so big it is not car to battery ratio completely changes in electric vehicles.
So the market itself is going to the unit rate, unit piece market is going to be very high. And we also feel that this is so nascent in India and the baseline is so low. Every OEM coming out with, you know, you’ll be happy to note that in last 12 months almost 10 new models have been announced by the Indian OEMs. So these are the things. This is not the speed at which maybe ICE engines models will be announced in future. So that throws up a huge opportunity for us in the OEM segment only the aftermarket cycle is far, far bigger than lithium, than lead acid because of the nature of the technology on the core business margin.
The question you asked, you are absolutely right. And we have been running these projects for last one year on various automation and the kind of productivity we are seeing in the motorcycle in commercial vehicles. Wherever we have invested, I think we have gone public by announcing, I think it’s in there in the annual report as well that we have invested half of our motorcycle capacity to punch grid and the balance half is being invested this year which means by end of December calendar year or full motorcycle manufacturing will move to punjug grid technology. This has multiple leverages on cost side material cost, labor cost as well as quality.
So similarly we have invested into continuous casting. This is another manufacturing technology where we are using our four wheeler batteries which also gives us, apart from giving savings, giving us huge, you know, confidence in the quality of the output and thereby will impact our future warranty returns. So we have invested and this year also we are investing as we speak. And there are multiple automation initiatives which as Praveen Saraf, our new executive director who is sitting with me, he is running these initiatives. He has come from a completely different environment. He works with Bosch and he brings this knowledge to the table for us.
And we are Taking his help in changing the manufacturing landscape of excitement which gives us some of this gives us operating leverage. Of course competitiveness gives us the leverage and some of you also help us to improve our margins.
Unidentified Participant
Thank you.
Avik Roy — Managing Director and Chief Executive Director
Thank you. Thank you.
operator
Thank you. Next question is from the line of Kapil Singh from Namura. Please go ahead.
Avik Roy — Managing Director and Chief Executive Director
I think Kapil just now answered asked the question.
Kapil Singh — Analyst
Yes sir, actually I came back in the queue. Just wanted to understand the solar business better. Last time you had talked about pretty big potential over there because of the regulations which were coming in. If you can give us an update, you know how the outlook is progressing for that business. And in terms of technology, will this be lithium ion only or lead acid also has applications over here.
Avik Roy — Managing Director and Chief Executive Director
So first is let me tell you about the market environment Kapil. There are two types of solar. One is which is residential and commercial which we see on rooftops. And the other one is grid scale solar which is, you know, put up by large utilities and power transmission companies. Now there are drivers are different. The driver for grid scale solar plant by power utilities is a function of the renewable target. That government has taken 600 gigawatt by 2030. So that is the driver for that. And there are a lot of fund outlets are taking place on the commercial and residential part where we are more aggressively involved because that’s our domain.
It’s basically the PM Suryagar Yojana which was announced 12 months back or 14 months back I think during last year’s Independence day speech. They have government has decided to electrify some 1 crore villages in the country through some subsidies. And this is also they will also get the subsidy provided a part of the content or manufacture or source locally in India. So this all put together our solar business has really ramped up. They have also ramped up to the opportunity. We have put in a separate vertical in place last year with new team. And the good part is that we have our existing channel network of so our reach in the country is phenomenal.
So very quickly we could also reach out to the potential adjacent markets of solar rooftop as well as other solar applications which is deregulated in the commercial industrial space as well as in residential space. This franchise has reached I think last year they reached about 800 crore very quickly and this year they have plans to cross 1000 crores. So we are really looking forward the two to three years time. We want to make this franchise about 1500 crores and cash on the opportunity that the country is providing. On top of that the third lever is as you must have seen this month government has reduced the GST for solar combo packs means solar battery plus panel plus inverter.
These combo packs from 12% to 5%. So on one hand you have PM Surya Ghar, on other hand you have our channel network to reach out and the portfolio that we have. And on that on the other last you have the support from the gst. So all these put together gives us a feeling that we’ll be able to scale up this solar business very quickly to our aspiration levels.
Kapil Singh — Analyst
Sir, just in terms of technology, this, this will be lithium ion or lead acid also has some application here.
Avik Roy — Managing Director and Chief Executive Director
This is the second question. Sorry I missed out. See the main purpose or main strength of lithium ion batteries, lower footprint because of high energy density and fast charging. For an end consumer these are the two values, fast charging and higher current density. Therefore lower footprint for solar installation. Unfortunately footprint is for battery is not so much of an issue because footprint is decided by solar panels, not by batteries. You see what I mean? And also since it’s a backup power application it the fast charging is not as relevant as possibly a ev. So the two values or the two real value that lithium ion brings on the table are not so relevant.
Does it mean in future it will, there won’t be products for solar? Of course somebody can come out with a fancy solar product. But at this moment the use case does not demand the lithium ion. So we see, particularly in rural, we see that people are quite comfortable with lead acid and the solar panel and inverter and yeah, I mean the business is growing touchpool. Okay, great.
Kapil Singh — Analyst
Thank you so much.
Avik Roy — Managing Director and Chief Executive Director
Lithium ion side also on the lithium ion side, portfolio development also we are not exactly focusing on solar as a priority because we know that it will take time if at all.
Kapil Singh — Analyst
Understood sir, thank you so much. Thanks for the detailed answer.
operator
Thank you. Participants, if you wish to join the question queue you may press star and one next question is from the line of Aditya Jhawar from Investec. Please go ahead.
Aditya Jhawar — Analyst
Yes sir. On our base business profitability historically we have had a margin of about 13 and a half 14% consistently. But now you know, the margin trajectory has come off quite a bit. Now looking at the projects that we are executing like you know the segregating the company into, you know, B2B B2C the tech upgrade cost saving by when should we expect that the margin trajectory should go back to the earlier levels? If you can talk specifically on the margin drivers that you are seeing in the near future.
Avik Roy — Managing Director and Chief Executive Director
So thank you Aditya I mean I would recommend that you do not consider this Q2 margins as a reference margin because in Q1 itself if you go back, we have done 12% plus that too in a very high lead environment. What you refer to 13.5 to 14.5 at the past, you will recall that time the lead LME was far, far at least 20 to 30% lower than what it is today. Today Lade is hovering at a very very high level. The Forex was those days 80 rupees. Today it is 90 rupees. If you look at those delta.
So even in this delta why we are still surviving and we are able to deliver double digit EBITDA is only because of our cost efficiency, cost excellence projects and our manufacturing technology and you know, those kind of investments which we made going forward. We still feel that in coming quarters we though we do not give a guidance but I feel we will be substantially able to demonstrate our margins plus 12% to plus 13%. That’s the corridor what we are looking at. We have track record of doing it. We only hope lead remains at the current level and we should be able to do it once the volume, once the top line growth comes back.
Aditya Jhawar — Analyst
Yeah, sure sir. Then Nick, the next question is on the lithium ion business. So with the recent restriction imposed by China on the export of rare earth magnets, equipment for lithium ion as well as lithium ion, are we seeing some challenges in commercialization of our lithium ion cell facility?
Avik Roy — Managing Director and Chief Executive Director
Sir, as many of you know, the announcement, the notification was on three areas. One is technology, know how. The other one was equipment, machinery, manufacturing, machineries and third one was on raw material. Now regarding the first two, as you know we have already received all the machineries and we have already received the know how we are lucky on the third raw material. As you know they have already announced, you know they have relaxed the delayed the import restriction by one year, November 26th. So till November 26th we should not worry. And after November 26th even the whole world doesn’t know how the world will look like in terms of volatility and geopolitics.
So there is a reason why they put up in the 9th of August they announced this restriction and in one month’s time they withdraw it or two months time they withdraw and delay it by one year time. So it has to do with geopolitics. This is our belief. So we have spoken to all our material suppliers. They are not expecting any impact so far. In fact they are also thinking there will be off and on restrictions restriction. By the way, it Means additional approvals. It does not mean stoppage. It means additional approvals. Somebody has to go through.
So we have spoken to all our raw material suppliers and they feel that it’s possible to do business by taking those approvals in advance. And but in any case they are waiting till November 26th which is another 12 months from now. But we are lucky that we got, we got all our equipment and all our know how before all this geopolitics started.
Aditya Jhawar — Analyst
Yeah that, that’s good to know. That’s it from my side.
operator
Thank you. Next question is from the line of Raghunandan NL from Nuama Research. Please go ahead. Mr. Raghunandan, your line is unmuted. Please go ahead with your question.
Raghunandhan N. L. — Analyst
Thank you sir for the opportunity. We have been hearing of cost relating to EPR or extended producer responsibility. Can you indicate whether any such costs were factored in Q2 results? Your other expenses seem to be higher compared to normal levels.
Avik Roy — Managing Director and Chief Executive Director
Yes, a good observation Raghunandan. You know we had to comply with the new battery waste management regulations which was not there last year or the year before last. And yes we had made accruals to fulfill the obligations in quoted. You’re right. But I would not like to you know give you a number at this moment because this does not require disclosure. But you are right we have made some accruals in Q2.
Raghunandhan N. L. — Analyst
I understand sir, but would it be like more of a one time provision and on a regular basis the cost required will be much lower. And by when would you comply with the provisions?
Avik Roy — Managing Director and Chief Executive Director
You can’t say one time because now this is the order of the day. What we have done is that we have regularized whatever backlog was there. But going forward this is becoming a cost for us, regular cost. And the only solution for this act because we are. Why are we doing this? We are doing this or the government is doing this to encourage circularity in the system for the environment, for the benefit of the society. So we firmly believe that at some point of time we should be able to pass on this increase to the product.
And customers who are buying a hundred percent recycled product from a customer from a manufacturer should be able to give that X percentage premium once we market it as a hundred percent recycle. This has happened with other commodities as you know. This has happened across the world. And at some point we feel that this cost has to be factored in the product price.
Raghunandhan N. L. — Analyst
Thank you for that sir. And on the lithium side. So can you indicate for the first year would you be able to achieve a Utilization ramp up of 30% or can it be much higher? If get enough orders over the next one year, would you further take up your investments to 5,000 or crore which was the initially planned phase one of the investment?
Avik Roy — Managing Director and Chief Executive Director
Yes. So two questions. First is utilization. You are right. As I said, the first objective is to commission line one out of four lines. So roughly you can say it will be 25% utilization. And going forward if I do at least a portion of line three in the same fiscal year then it will be more than that. So it’s close to the number which you mentioned. So that will be good enough in terms of, you know, polishing our hands because we will have a. The biggest learning curve that we are having is that we have multiple chemistries and multiple form factors.
So we need to polish our hands in both the technologies. So line one and line three running helps us to do that. And yes, that will be roughly the utilization that you said. The second question was will we reach 5000 crores? So this is the second phase investment. Now we will just complete first round phase one of 6 GWh. We have been the pioneer, we have been the first mover. We’ll see how the market adoption takes place. The land which we have purchased we have purchased for 12 gigawatt hours. The utilities, what we have invested is for 12 gigawatt hours only.
The shade and machine we have installed for 6 gigawatt hours. So we can very quickly ramp up at much lesser cost. Means the phase two expense. Phase two investment will not be same as phase one investment will be much lesser. But we should be able to do it once we see a faster adoption in the country which we are hopeful with stationary requirement in Bess coming up so fast, I feel that in a year or two we’ll have a much better visibility of the adoption and we’ll take a call after that. But till such time our focus is to run this 6 gigawatt hour plant efficiently.
Raghunandhan N. L. — Analyst
Got it sir. Thank you so much.
operator
Thank you. Next question is from the line of Ashish Jain from Macquarie. Please go ahead.
Ashish Jain — Analyst
Hi sir. Good afternoon. So my first question is on the pm Surya Ghar Yojana. Is a battery being installed by rule? Because my understanding was that battery is.
Avik Roy — Managing Director and Chief Executive Director
Optional, you know from. You’re right, you’re right. I did not mention battery. Battery is used for off grid systems. For on grid systems is panel and inverter. We are also doing business. We are. We are not only selling battery, our combination also includes pure play solar panels and inverter installation. In on grid systems. So we are working both in on grid systems and off grid systems.
Ashish Jain — Analyst
No, no, sir. So my question was like, so do we see battery installations as a big opportunity in at least on the resi side given by.
Avik Roy — Managing Director and Chief Executive Director
Yeah, because there’s a huge off grid market and there the GST has been brought down to 5%.
Ashish Jain — Analyst
Right?
Avik Roy — Managing Director and Chief Executive Director
Yeah.
Ashish Jain — Analyst
Okay. Okay, great, sir, thank you so much.
Avik Roy — Managing Director and Chief Executive Director
Thanks a lot. Thank you so much. Thank you.
operator
Thank you. Ladies and gentlemen, we’ll take this as a last question for the day. I would now like to hand the conference over to the management for the closing comments.
Avik Roy — Managing Director and Chief Executive Director
So thank you. Ladies and gentlemen. It was really a pleasure to have this conversation with all of you. I hope we have been able to answer all your questions satisfactorily. If you have any further questions or if you like to know more about the company, we would be happy to be of assistance. Please get in touch with us or with Investec. As you please, over to the moderator.
operator
Thank you, sir. On behalf of Investec, that concludes this conference. Thank you all for joining us. And you may now disconnect your lines.