Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Exide Industries Ltd (NSE: EXIDEIND) Q4 2026 Earnings Call dated May. 06, 2026
Corporate Participants:
Avik Roy — MD and Chief Executive Officer
Manoj Kumar Agarwal — Finance and Chief Financial Officer
Pravin Saraf — Executive Director
Analysts:
Aditya Jhawar — Analyst
Binay Singh — Analyst
Siddhartha Bera — Analyst
Unidentified Participant
Vijay Singh — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Exide Industries Q4FY26 earnings conference call hosted by Investec Capital Services. 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 this conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr.
Aditya Jawar from Investec Capital Services. Ankyun 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 Royce, Director of Finance and CFO Mr. Mahmoud Kumar Agarwal, Mr. Praveen Saraf, MD and CEO of Exide Energy Solutions, President Legal and Corporate affairs and Company Secretary Mr. Jitender Kumar and Mr. Prashant Saraswat, Head of Investor Relations. Before we proceed, there is a disclaimer for the call. Few statements made 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 and followed by Q and a session. I would now like to hand over the call to Mr. Avik Roy for opening remarks. Thank you. And over to you, sir.
Avik Roy — MD and Chief Executive Officer
Thank you, Aditya. Good afternoon. Good afternoon ladies and gentlemen and a warm welcome to you all to the Excite earnings call. Before taking you through the key highlights of our performance, I would like to talk about some of the macro and industry drivers that shaped our operating environment in the last quarter. Globally, the West Asia conflict continues to be an ongoing threat with regard to availability and pricing of commodities such as lpg, sulfuric acid and plastics. The situation is quite alarming.
Rapidly increasing commodity rates coupled with rupee depreciation continue to pressurize our input costs. But in contrast, the Indian demand situation remained favorable. Low inflation rates, low interest rates and the consequence of GST 2.0 reforms increased end consumers affordability. Especially in the second half of FY26, rural India experienced strong broad based revival as well driven by rising income, upbeat sentiment and infrastructure development. Coming to the company’s performance during quarter four nearly 92% of the business has grown by about 16% and that basically includes our entire domestic business minus telecom.
All key verticals grew double digits headlined by two wheeler and four wheeler oem then home ups, solar, two wheeler and four wheeler replacement market as well as industrial infrastructure business excluding telecom. Remaining 8% of the business witnessed strong decline in revenues, exports being one of them which was subdued by the given geopolitical situation and telecom and Eric Shuck continues to shift towards lithium ion technology. This Translated to about 9.4% year on year overall revenue growth and in quarter four we generated our highest ever quarterly revenue.
Domestic business sales grew by 12.5% year on year for the full year FY26 the company has delivered 4.1% year on year revenue growth again nearly 92% of the business grew by double digits. The domestic business grew by about 7.5% year on year for the full year in quarter four the company continued to ramp up production leading to higher capacity utilization, better absorption of fixed cost and positive impact on the bottom line. The company was also able to maintain on a sequential quarter basis the EBITDA margin of 11.7% buoyed by strong volume growth, improved product mix and better realization which was also helped a lot by lowering our warranty costs and benefits accruing out of our manufacturing excellence projects.
All the above efforts resulted in expanding the EBITDA margin year on year by nearly 50 basis points. The GST 2.0 led demand surge continued in Q4 as Auto OEM business recorded its second consecutive quarter of 25% plus year on year growth also hitting its highest ever quarterly revenue breaking the mark set in quarter three. Home UPS business recorded its highest ever quarter four. Sales uplifted by the little early onset of summer solar vertical returned to double digit growth and I’m happy to inform you that we incubated and nurtured this solar vertical for the last few years and this year they have crossed the thousand crore mark for the full year.
Two wheeler and four wheeler replacement demand remained robust as it continued in its mid teens growth rates. As in the past quarters, industrial infrastructure excluding telecom continued its strong performance maintaining double digit year on year growth Order inflow and execution remained healthy across sectors like railways, motive power and industrial ups. Geopolitical tensions continue to impact exports business. We expect these uncertainties to remain for at least in the first half of next year of this current year.
We have been briefing you for the last couple of years on our new one Excite operating model, so a few Comments on that the company transformed from a strategic business unit led model to a 1xide operating model in FY25. This was intended to recalibrate our go to market approach across business verticals during the last year. FY26. This operating model has enabled the company to be more agile and customer focused while bringing synergies across the organization reflecting in the overall company performance.
As we enter the next fiscal year, the outlook for the lead assets business remains positive across most business vertical. However, we remain cautiously optimistic and will constantly watch and monitor the domestic demand situation in view of the expected inflationary economy if at all. The company remains focused on tight cost control despite the global headwinds. I believe that Excite, with its advanced product portfolio, Pan India distribution network and a strong brand recall will continue to benefit from growth opportunities.
I will move on to our lithium ion cell manufacturing project where we have invested 600 crores in quarter four and about 1,500 crore in FY26 in the full year. With this, the total equity investment made in Exide Energy, our subsidiary till date stands at 4802 crores. Our cylindrical lines are expected to start customer sample delivery by around this month onwards while the Prismatic line will be initiating product trials shortly thereafter. Meanwhile, the company continues to engage with various OEMs of two wheeler, three wheeler and four wheeler and stationary energy providers to build the off tech across key and consumer markets.
With this I close my opening remarks. We will now be happy to take your questions going forward.
Questions and Answers:
Operator
Thank you very much. We will now begin with a question and answer session. Anyone who wishes to ask a question may press Star and then one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press Star and then two participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants. You may press Star and then one to ask a question. We will take the first question from the line of Vinay Singh from Morgan Stanley.
Please go ahead.
Binay Singh
Hi team. Thanks for the opportunity. In the opening remark we talked about 8% of the business declining which is telecom and exports fair to say that exports will be around 5% of top line in telecom around 3 will will that be the breakup?
Avik Roy
Yes Vinay, you are right in the ballpark.
Binay Singh
And you know which leads 3%.
Avik Roy
3% would also include a bit of Ericsha business.
Binay Singh
Okay, because that brings me to my next question here. When you look at next year on this core business exports will have volatility for the first half but will recover. So then we should be actually quite set for a much better top line growth than this year, next year. Right.
Avik Roy
Because I would like to believe the positive side is whenever the baseline is now low for these businesses because we have declined and next year we see we have a strategy in place given if the, you know, global geopolitical tensions ease out a little bit. I see a substantial upside for the exports because our main export markets are also in Western Europe and US where we were targeting as a strategy. So exports was already doing, was already 8% of our revenue a couple of years back. So we came down to 5%.
So I think there is a good chance to increase our share of exports and therefore the incremental revenue
Binay Singh
And the overall top line growth also next year should improve from this year. Right. Because all the other businesses commentary that you gave was quite strong.
Avik Roy
Yes, yes, the exits have been quite strong. Q3, Q4 has been quite strong and I personally believe that. And we, as you will recall we were little pulled down because of the Q2 washout when this GST announcement was made in the month of mid August and it was effective from the 22nd of September if you recall. So that one and a half, two months we almost had a washout because there was no offtake from our distribution network. So other than Q2 I think all 3/4 we have been doing well and also riding on the demand wave.
I would still believe that the core business at this situation has a potential to do at least a high single digit to double digit growth. Today we are domestic, we are even despite the telecom decline domestic we are 12.5% in the quarter. So I would like to believe that high single to double digit growth, the overall core business is possible.
Binay Singh
And secondly on the new energy business, I think in the press release we had added that for Cylindrical, the trial runs have started. Prismatic will be few quarters down the line. So to that extent is Prismatic also for this year only?
Avik Roy
Yes, yes. Prismatic is the LFP line and this is also scheduled for this year. The difference between a Cylindrical line and Prismatic would be that, you know, the start of revenue will be quicker in LFP because that product will not go through so much of validation and customer homologation like the two wheeler batteries in Cylindrical. So though the production of Cylindrical will start first but possibly the revenue stream will come first from the Prismatic lines. Yeah.
Binay Singh
And sir, could you talk a little bit about the industrial side of the opportunity because globally what we’ve seen that that opportunity pie has surprised on the positive side and margins are also actually better. So when you talk about. When you think about data centers ESS in your view the 6 gigawatt capacity allocation what could be industrial share in that how is the reception of clients on the industrial side?
Avik Roy
See Ben, you know we have two lines of LFP about LFP Prismatic which is meant for industrial stationary storage applications. I mean the designs, you know every cell what we are going to manufacture will have multiple use cases. It could be both automotive as well as stationary. Depends on the
Manoj Kumar Agarwal
Form
Avik Roy
Factor is Prismatic in any case. So we are the the cell formats which we are will be producing in line three and line for the Prismatic lines will also cater to the stationary storage use cases. You have heard I have made in the opening commentary that the telecom is shifting towards lithium ion. Ericsha is shifting towards lithium ion and there are some other use cases shifting towards lithium ion. Now in many cases we are already present with our pack business Only thing that we are doing it through imported cells.
We will just switch over to our own made in India cells. That’s the plan.
Binay Singh
And just lastly on the commodity in all the. I’ll come back in the video. Yeah yeah.
Avik Roy
Thanks.
Binay Singh
Thanks.
Operator
Thank you. We will take the next question from the lineup to Pashankar Ng from Evanders Park. Please go ahead.
Manoj Kumar Agarwal
Good afternoon. Thank you for the opportunity. My first question will be on the commodity cost. Just wanted to get a sense around the extent of impact what we have seen in fourth quarter and what sort of escalation is anticipated in the first quarter of FY27. Considering the initial comments and continuation to the question is that what would be the extent of price hikes taken in the aftermarket and the expectation on further price hikes going ahead.
Avik Roy
Thank you. Thank you for the question. So first question on the commodity situation. Our impact on material cost for quarter four was roughly net net impact was 150 crores. I would say a negative impact. So it has come down by about the gross margin if you see has come down by about 90 basis points though we have been able to maintain our able to improve our ebitda. But even if you see quarter on quarter movement the gross margin has come down from. Let’s say it was in Q3 it was 31.6 and in Q4 in the last quarter it was 30.1.
But despite that we have been able to maintain our ebitda sequentially at 11.7% because of our tight controls on the other cost elements. We have been very successful in controlling our factory costs as a percentage of sell employee cost. You will see that and best part is we could able to reduce the warranty cost as a percentage of sales. So these three, mostly these three elements have offsetted the increase in the commodity cost. So therefore we could offset the drop in gross margin through our internally controls.
But as far as price hike is concerned we have started, I think I have mentioned this in the past that in Q3 we did not take a price rise consciously because GST revised GST rates were announced and we thought we will pass on the entire benefit to the end consumer. But from January onwards we could not sustain the cost inflation of material. Therefore we started taking price increases stage by stage. So January 1st, January 1st, March, 20th March, I think in three tranches we have taken increases which maybe amounts to about, let’s say about 5%, 5 to 6%, you know, varies on the segment, but across all segments in the trade, in the aftermarket we have taken corrections and even on 1st of April we announced the last round.
In April also we took another round of correction. So we have been trying to, you know, pass on as much as possible of our commodity inflation. And that has also resulted in our resilience in quarter four margins.
Manoj Kumar Agarwal
What was the. Have
Avik Roy
I left anything?
Manoj Kumar Agarwal
Nothing, sir. I think one, one follow up is that what was the quantum of price hike taken in on April 1st as well? Can you can share that?
Avik Roy
It was around 3%.
Manoj Kumar Agarwal
All right. And do you anticipate further hikes coming in given that the commodity inflation has been quite sharp? So just wondering, given the competitive dynamics, do we see further prices coming in to pass through this inflation?
Avik Roy
I mean right now it’s difficult to comment, but the leading indicators, if you see the April exit prices of commodity, it is far more than March exit. Whether it’s steam, whether it’s the sulfur sulfuric acid, we are very, very badly hit. The March exit was 58 rupees per kg and April exit is already 74 rupees. And just imagine one year back it used to be only 15 rupees per kg. So 15 to 74, 75 is 5x. So obviously we will be watching it and going forward we will have to take the price hikes. We have no other option.
Manoj Kumar Agarwal
Got it, sir. And with respect to OEM contracts, the escalation comes in with a lag. So what, what would be the time period of that lag and what will be covered? Is it only the lead asset piece which will be covered? Right. So so the other aspects, are you negotiating with them to pass this on?
Avik Roy
Yes, yes, you’re right. We have the good news is that last year also when we were going through this huge inflation, you know, non laid inflation, I would say non laid inflation on commodities we have been able to, you know, make our customers OEMs agree to a certain amount of price increases. We have been successful. We have given them evidences that how we are suffering and some of them has been extremely logical and they gave us price correction last year. So that helped us in the full year performance as well as the quarter four performance of auto OEM also.
Having said that we have again approached them and everybody knows this. It’s not surprise that the way the commodities are growing, particularly the commodities which are essential for batteries, acids, plastics, LPGs and of course currency hitting the lead prices. I think we are constantly in touch with the major OEMs. Some of them agreed and some of them the negotiations are on.
Manoj Kumar Agarwal
So the lead time is typically two months to 13 months. Is that, is that the right metric?
Avik Roy
I’ll rather say it’s a quarter.
Manoj Kumar Agarwal
Sure. Understood. That’s it for my challenge. Thank you for answering my question. Thank
Avik Roy
You. Thank you.
Operator
Thank you. We will take the next question from the line of Siddharth Pera from Nomura. Please go ahead.
Siddhartha Bera
Yeah, thanks for the opportunity. Sir. Sir, first question is on this lithium ion business we have invested close to 4800 crores till now. How much investment do you see in the next one or two years going ahead in this business? And second is, I mean we, when we have started the trials, when we sort of look at the commercial supplies, do you think the pricing will be at par with the imported or there can be some premium we can derive? And how should we think about the learning curve? Where are the yields?
Do you expect that we may be in, in the normal sort of ease by quarter three when we start or that may take some time to settle down?
Avik Roy
So let me take the first part of the question and then I will hand over to Praveen Saraf who’s on the call to answer about pricing and yields. The first part is Siddharth. We have already got a board approval and this has been announced in the past of investing 1400 crore in the fiscal year 27 which is a mix of both capex as well as the OPEX working capital requirement which we have to. So that’s the number for FY27. I think that should be sufficient for phase one. We’ll see how it works. Regarding our Pricing strategy and yields.
I’ll request Praveen to take over. Praveen.
Pravin Saraf
Yeah. Thank you. So I’ll start with the reply to yield. So you absolutely right. The yield is the most critical factor governing the price, the cost of the cell manufacturing and the what is how we control and improve the yield is we need must have good machines, people 10 people who is operating the machines as well as having the process knowledge and good technology support. So you. You know that we have a very good technology support from Svolt. Then we have good machines already installed which are very capable.
So. But what yield will govern is only by experiencing and we all learn that once we start three shift running and having continuous running then the yield will improve. So it takes time but definitely we will work towards it. And how much will be better to once we start the manufacturing then we’ll able to exactly predict how much time it takes. I can only assure that whatever required things and parameters control yield are in present. So once we start we’ll able to quickly reach to. We’ll try to reach to the yield level.
The best yield level should be 90%. What we should target coming to the pricing. Yes, today the raw material are getting all from import from China. So the pricing today is definitely will be little higher. But what we are targeting is that with utilization of the plant with the maximum utilization more than 85% yield is 90%. And with some amount of localization which you already know that lot of local supplies are coming. We will also able to meet the targeted price. What is the landed price today.
So what will help us in achieving this is also if you may be knowing, recently there is a change in the VAT structure in China. So for the imported cells today There is a 3% increase in the VAT due to the VAT structure already implemented. And by January next year it will be additional 6%. So it will be overall 9% increase will happen. So this will also help us parallel we are also working with government to have subsidiaries and incentives for the localization of raw material as well as for manufacturing of cells.
So put together our target will be meeting the landed cost of the imported cell.
Avik Roy
Thank you. Thank you. I think the key will be to also the government has to also develop this industry locally. There has to be a value for making India sell. Like I have been repeating quarter after quarter that we are the first one. And making India sell has to have its learning curve because otherwise nobody else will come up for investment like this if they are not encouraged. So that’s also our take. Thank you
Siddhartha Bera
Got it. Thank you sir. I’ll come back in the queue.
Operator
Thank you. We will take the next question from the line of Arvind Sharma from seti. Please go ahead.
Unidentified Participant
Hi, thank you for taking my question on the lithium ion business. Have you seen any, I mean any revenue commitment over past few months given the trials supplies have started or are supposed to start. So when should the companies actually start seeing revenue accrue from the lithium ion business and versus the plans when you launch in 2022. I remember you had said around 27 to 30 months is the time it takes for operationalization. Where are you in that. In that plan right now? That first
Avik Roy
I think let’s little to bring clarity to the question. First one is what is your status of revenue flow? That simple. So far we have been doing pack business which is around let’s say 100, 200 crores of module and pack businesses which we were doing through imported cells. Now we will be making sales. Now regarding start of cell revenue date, I think I already mentioned in the previous question that in the first question itself that when is likely the revenue to start. And so it will probably start with the LSP Prismatic line because that product does not need so much of approvals and things like that that use case.
But as a start of production the NMC cylindrical line will be first which is. And we have not started the supplies of cells. Just to correct you, we have completed our process validation. The sample supplies will start possibly this month, end of this month or next month. Praveen, would you like to add on this?
Pravin Saraf
Yeah. Yes. So we our internal validations for the cylindrical cells have been completed and we will able to give the cell to our customers in this month. Of course as you all know that the custom validation will take time because there’s obligation as well as their internal bias as a cell as well as at the pack level for the Prismatic cell. We are right now we are running the trials for the making the customer samples we are targeting by June and July. We can say we want to give the samples for customer valuation.
Unidentified Participant
Got it sir. So it will still be some time before there’s any significant revenue recognition from the cell plant.
Avik Roy
This is. This will be a material disclosure for us. So be assured that we will let you know much in advance our start date officially.
Unidentified Participant
Thank you. The second question on the core business in the legacy business, will it be possible to share the proportion of autos and non autos and the OEM replacement share in the mix? I think this
Avik Roy
We have shared many times in the past auto and non auto is almost half of roughly or maybe 53, 47 kind of auto is OEM and aftermarket put together is about 50%. And the ratio between auto replacement and on auto as you know it’s standard is 70, 30 plus minus one person. So yeah.
Unidentified Participant
Thank you so much. That’s all from my side. Thanks. Thank
Avik Roy
You.
Operator
Thank you. Before we take the next question, a reminder to all the participants. You may press star and then one to ask a question. We will take the next question from the line of Vijay Pandey from Access Capital. Please go ahead.
Vijay Singh
Hi sir. Thank you for taking my question. A couple of questions. I wanted to check in terms of the government commodity in place and how much impact are you seeing currently? So absolutely. Can
Avik Roy
You have to repeat your question? I’m afraid you were not very clear. Can you say that again?
Vijay Singh
Is it okay now? Am I audible?
Avik Roy
Better, better.
Vijay Singh
Susan, I wanted to check in terms of commodity inflation between.
Operator
Vijay, could you please use a handset mode and speak.
Avik Roy
Yeah, there are some background noises coming in.
Vijay Singh
Is it okay now?
Avik Roy
Yes,
Vijay Singh
Yeah. I wanted to check the commodity inflation in the first fourth quarter and the first quarter till date. So what has been. What is the level of hikes of price increases? I think
Avik Roy
This question we just answered a little back, I think to Vinay Singh, if you read the transcripts, I think we have mentioned it already.
Vijay Singh
No, no. About the price, the inflation, the dominated. Yes, yes,
Avik Roy
Yes. As we have mentioned that as well. You have mentioned that as well. Exactly what was the impact on the material rate impact you have mentioned? Okay. Yeah.
Vijay Singh
Okay. Secondly, the prismatic cell. So the. That validation will take on a customer validation. Should we expect around three months or is it longer than two to three?
Avik Roy
See, Prismatic sales, what we are making is primarily for three wheelers and some stationary applications. For these applications basically these are either through trade channels or to institutional customers. Where we are, we do not have that kind of a homologation process like an auto OEM runs. So therefore the time to market will be and the time for revenue will be quicker than auto OEM.
Vijay Singh
And for cylindrical send it will be around three months or I
Avik Roy
Mean depends on the. Depends on the customer because it depends on how much mileage the vehicle will run or they want to run. So but yeah, around that ballpark I think. Praveen.
Pravin Saraf
Yes, yes. Two to three months. Yes,
Avik Roy
But
Pravin Saraf
Of course depends on customer again so we are always also discussing with them. But depends on that.
Vijay Singh
Yeah. Okay.
Operator
I would request you to kindly rejoin the queue again for more Questions? Thank you. We will take the next question from the line of Aditya Jawar from Investec Capital Services. Please go ahead.
Aditya Jhawar
Yeah, thank you for the opportunity. Sir. I think this commodity question is quite important in the current context. If you can refresh. You know that if you look at our bill of material, what are the ballpark big commodity, you know, in terms of percentage exposure that we have, you know the top three, four commodities, whether it is lead, you know, polymer, how much percentage of cogs it represents and for specific commodity. If you can talk about that, what is the near term outlook that you’re looking at?
Avik Roy
Okay, so if you, let’s see how much we can give you. I’ll give you both quarter on quarter and year on year rises.
Aditya Jhawar
I would recommend that for FY26 on a full year basis that what is the breakup of our bill of material in terms of exposure to key big commodities?
Avik Roy
I think perhaps this is a little not in public domain. All I can say is that our key components is lead, acid and plastic, mainly bill of material items. This covers about 95, 96%. Lead as a index has been softer year on year. But you know, in India lead is sold even recycled lead and pure leads are sold on import parity prices. So because the currency has softened by about 10%, the reduction in LME has been over offsetted by the dollar rupee depreciation. Okay, so we did not get a net net benefit on lead also.
So regarding plastics, because we use polypropylene containers, this was directly hit in the Q4, Q1 to Q3 was pretty stable. But Q4 we got a hit because of shortage of crude which is coming to India. Sulfuric acid, I mean this for the first time. We used to buy sulfuric acid for 15 rupees. As I said one year back, sulphur is a byproduct of the petrochemical refinery plants, right? And since the petrochemical plants refiners are operating at a lower capacity utilization because of crude shortage, even the generation of sulfur has also come down.
And therefore just to run the business, sulfuric acid costs have gone to 75 rupees April exit compared to 15 rupees in the beginning of the year. So.
Aditya Jhawar
I mean what I’m trying to understand sir, clearly I think lead prices not going up is also a better situation for us in INR terms. And lead might represent more than 50, 60% of cost. And even the polymer prices would be the remaining 20, 30%. So what I’m trying to understand that yes, sulfur has seen a Big spike. But that is it. That it is less than 10% of BOM.
Avik Roy
See, I mean we have to go into details. There are other alloys which also come in play based on seasonal demand. Are you looking for Q1 outlook or kind of a picture of Q1 or last quarter for.
Aditya Jhawar
I mean the outlook. I mean if you look at. On a blended basis depending upon how much exposure we have. Because now the street is worried about, you know, the commodity inflation
Unidentified Participant
Now looking
Aditya Jhawar
And our exposure is significantly different to commodities as compared to OEM. So we are just trying to understand from FY27 perspective what should we think about commodity inflation and how much price increase would be required to offset that. So
Avik Roy
The short answer is this, that this year at least quarter on quarter we will pass through the non lead price increases to the customers. The lead will be governed by. Lead will be governed by the formulas that we have with at least the OEMs and industrial customers. But otherwise everything we will try to take price correction. Because at this moment we believe that our sourcing efficiency is at its best just for business continuity itself. So we have been successful in passing on in both, as I said, January, February, March, April, four months consecutively.
We could be. We could able to take price corrections from the market. If I do not know the situation of rupee, this is rupee to dollar is a kind of uncertainty. But if it stays at this level then probably even if LME goes down, will not get benefit in rupee terms. Just for your information, Aditya, that till March though LME was softer. But in April LME has again shot up to 1950. So it’s really volatile. We are navigating. Navigating through, you know, calibrated price increase from the market. Yeah,
Aditya Jhawar
Sure. Thank you, sir.
Operator
Thank you. We will take the next question from the line of Sriram from mlp. Please go ahead.
Unidentified Participant
Hi sir. Am I audible?
Avik Roy
Yes, please.
Unidentified Participant
Yeah. Sir, if you can just help us understand that within the acid consumption is it only sulfuric acid or are there other type of acid also that we use?
Avik Roy
No, it’s sulfuric acid.
Unidentified Participant
Okay, that’s it. That’s the only question I had. Thank you so much.
Operator
Thank you. We will take the next question from the line of Viren Sameer Deshpandi from Alpha Peak Investments. Please go ahead.
Unidentified Participant
Hello sir. Good afternoon.
Avik Roy
Good afternoon.
Unidentified Participant
The results have been quite decent in the current scenario. And our dominance in the market share is really helping us. We are getting good results. And another important thing, the first to become the first company in India to make this lithium Ion batteries will be a good figure in the cap. But as you rightly said, is the government likely to be significantly supportive to the company with these benefits or incentives like PLI or any other incentives? Because otherwise the imports are going to hurt with the rupee depreciation.
So what is the status on that?
Avik Roy
So imports are going to be expensive, that’s what you meant?
Unidentified Participant
Yes,
Avik Roy
Precisely. There are two parts of it. One is of course government has to develop this industry and you know, give a value for or give attention to make in India sell and manufacturing. It’s electrode manufacturing. It’s not importing complete electrodes and just assembling it as a cell and then supplying. So if government wants us to really integrate backward in manufacturing, manufacturing our own electrodes, sourcing our own anode and cathode material from the country, they have, they have to support the industry and that will happen eventually.
Otherwise investments will not come not only in the cell manufacturing but also in the supply chain. There is a second angle to it. The second angle is the comfort of the OEMs. Now how long do you think a large OEM like let’s say the top two names, Maruti, Tatas, Mahindras of this world will depend on completely imported batteries from China for their vehicle. The OEM runs on one day inventory. That is how their supply chain and here they are, you know, investing in three months inventory of imported material.
So their operational sequence, their total supply chain management also improves. For make in India sourcing. I’m sure there are scales. Once there are players like us, even the OEMs would also like to have localized supplies. We have seen those trends already in some cases because of course they want to have at least two sources. Even if not, even if they don’t want to disrupt their import, they will like to have an alternative source because otherwise it is too expensive and too volatile, too big an exposure to depend on imported complete batteries from China.
On the long term, yes, we are looking forward that both the government as well as the auto OEMs will be driving this market which will encourage more players to come in.
Unidentified Participant
Yes, I think definitely with the atman policies of the government and the current situation in the Gulf which is always exposing the country to these huge risks. Because if there are no imports possible then the things really can come to a standstill and hit the India in a big way. So definitely the government support will come. And I hope with this big investment we have made our around 5000 crores to date. And I think in this year also we are likely to invest about thousand crores. You mentioned
Manoj Kumar Agarwal
1400.
Unidentified Participant
Okay. So it will be about 6000. About 6500 odd crores will be to total investment. And at the when we sold our life insurance business we got approximately the similar amount I think in terms of the shares of HDFC Life.
Avik Roy
Yeah, roughly that amount. Yeah.
Unidentified Participant
So we are currently in the investments in the balance sheet now non current investments have fallen by about 850 crores. So have you sold some part of the shares of HDFC Life during the year?
Avik Roy
No. No. I will hand over to Manoj Agarwal our CFO to answer this question. So.
Unidentified Participant
Okay.
Pravin Saraf
Because of the mark to mark of valuation of the share we have not sold any shares as of date.
Unidentified Participant
Okay. So the mark to market valuation has come down by about 850 odd crores.
Pravin Saraf
Yeah.
Unidentified Participant
And that the second effect has been given to the resource or what
Pravin Saraf
It it went through oci. We root through oci. So it is coming as a network not a payment account.
Unidentified Participant
Okay. Okay. Okay. So
Operator
Between within I would request you to please rejoin the queue again for more questions.
Unidentified Participant
Okay. Thank you and all the best.
Pravin Saraf
Thank you. Thanks.
Operator
Thank you. We will take the next question from the line of Suraj Cheda from Bandhan anc. Please go ahead.
Unidentified Participant
Yeah. Hi sir, couple of questions. First on the lead acid. Sorry to interrupt
Operator
In between Suraj, you’re not audible. Please use the answer mode.
Unidentified Participant
Yeah. Is it better now?
Operator
No, you’re not Audukey.
Unidentified Participant
Hello. Is it better now?
Operator
Yes, please proceed.
Unidentified Participant
Yeah, so couple of questions from my side. First on the core lead acid battery business. In the earlier comments during the call you mentioned that you are expecting mid high single digit growth to early double digit growth. This you mentioned with respect to FY27 or do you think over next three to four years that should be the medium term CAGR for your business?
Avik Roy
I think even in medium term CAGR it should be last 5 years. Also if you see the 5 year CAGR was 11% and I don’t see any reason for the next 5 years CAGR to be different from that. Plus minus few percentage 1% maybe because clearly if you look at the OEM business today which is for at least consecutive 2/4 as well as Q1 outlook of this year. The automotive OEM business is growing by you know 20% plus 25% plus these are all going to get reflected in aftermarket after two years.
Unidentified Participant
Understood. Okay. And what is the UPS revenue mix for you right now? In FY26
Avik Roy
The UPS revenue would be. Just a minute. It will be more than 2000 crores. Around 2300 crores.
Unidentified Participant
Okay. Telecom you mentioned is maybe around 2.3percent of your revenues right now.
Avik Roy
Yes. Yes.
Unidentified Participant
And second question was with respect to your first phase. One of you know 6 gigawatts capacity for lithium and cell manufacturing. How do you see this capacity being allocated between say automotives and maybe stationary application or telecom or BE segment. Any. Any plan you are having over next 12 years.
Avik Roy
I’ll request Praveen to take this.
Pravin Saraf
Sure. Thank you. So the six gavat. We have two chemistries. I think it’s a good thing that because of two chemistries we can able to cater the various applications. So we have cylindrical and prismatic. So our capacity is divided cylindrical in 3 and prismatic in 3 gigabyte. So as you know, cylindrical today’s applications is 2 Wheeler. And in prismatic we have applications like 4 Wheeler buses and stationary like telecom sector as well as bss. So this is how this. Today the capacity is allocated.
Unidentified Participant
Okay. Okay. Any breakup of this 6 gigawatt hours between the two chemistry ballpark numbers.
Pravin Saraf
3. 3. 3. So 3 for cylindrical and 3 for prismatic.
Unidentified Participant
Okay. Okay. And for this 3 gigawatts power prismatic one. This will also cover your tie up with the. Which you announced, right? No,
Avik Roy
No, no. That’s. That’s a little different. This is. This will not have an impact on the fundament.
Unidentified Participant
Okay. Okay. So that will be part of your interrupt in
Operator
Between. Suraj, I would request you to please rejoin the queue again.
Unidentified Participant
Sure. It’s a follow up on that. Just last question on this.
Operator
Thank you. We will take the next question from the line of Karan K from Tata AIA Life Insurance. Please go ahead.
Unidentified Participant
Yes, sir. Thanks for the opportunity. So I just had a clarificatory question. So if I heard right you said that sulfuric acid prices have gone up from 15 rupees per kilogram to 75 rupees. Per kilogram.
Avik Roy
The sulfur price. Not sulfur price.
Unidentified Participant
Okay. Sorry. So sulfur prices have gone up from 15 rupees per kg to 75 rupees per kg. You said this has happened since the start of the year. So this is since Jan. Or this is since April.
Avik Roy
No, this is for one year. Gradual increase. Gradual increase. Quarter on quarter. Started. The baseline is Q1 of 25. Four quarters
Unidentified Participant
For the last. For the last one year.
Avik Roy
Four quarters. Yes.
Unidentified Participant
Okay. And on a sequential basis. What will be the jump?
Avik Roy
Sequential basis. In Q4 sulfur was plus 40%. And sulfuric acid is year on year. Sorry. Quarter on quarter Sequential basis will be about 20%. April exit is higher than March exit by a lot. Yeah.
Unidentified Participant
Okay. And this increase in price, does it get reflected in the same quarter or will it get reflected in the upcoming quarter?
Avik Roy
More or less Same quarter. That’s why if you recall I just said that from 1st of April itself we took the price and because we did not wait normally acid and others impact immediately. So that’s why first we announced on 1st of April. Actually we took on 20th of March one round. If you check your channels you will know the 20th of March we announced and then 1st of April back to back. After 10 days we announced and now we again if ongoing in May and June you will also hear some announcements.
Unidentified Participant
Okay, got it. That’s it from it. Thanks a lot.
Avik Roy
Yeah, thank you.
Operator
Thank you. We will take the next question from the line of Deepak Ajmeera from IG India. Please go ahead.
Unidentified Participant
Yeah, thanks for the opportunity. We would like to understand your thought process that you have invested 5,000 crore, will be investing another thousand crore. And what sort of return metrics now looking at the raw material size and the demand and the availability. What’s your internal projection on the return metrics and the margin metrics?
Avik Roy
So sir, at the moment we are completely focused on ramping up the production. As Praveen has mentioned, we do not know what will be the level of commodity prices when we actually serialize our production. Today lithium has again gone up by double digit in the last couple of months due to various supply demand constraints. So it’s not proper for me to do a math based on assumptions on commodity prices because all those things will depend on that. What is good is that the customer has realized that lithium is also volatile.
Today last one year lithium was dropping because there was high over capacity in China. Today if you look at last two, three months, the situation is reversed because of this West Asia crisis. Because of crude shortages, the production of electric vehicle and electric vehicle batteries in China has shot up. Everybody has, you know, loaded their factories because primary fossil fuel is in crisis at this moment. So this has led into our, you know, demand side boom locally and therefore the prices are going up.
So people also understand that lithium prices is not exactly predictable because this type of volatility will happen going forward. And then China, suddenly the government has come up with a policy that, you know, you can’t bleed anymore. The EV manufacturer cannot make losses anymore. They have to be profitable. So they are forced to raise prices. That’s why Praveen told you that they have withdrawn lot of vat benefits and export benefits. So this is the environment of lithium. So I have a feeling that we will have a much better case than last year when we start production because prices will stabilize number one.
Number two is the prices are also indexed to a great extent so that the risk is also a pass through like lead. And third is, as I said, the OEMs will definitely take a deeper look of developing local supply chain for sales and packs. So I think with this we will have a much stronger case. But the time to announce that has not come. Let us ramp up our plant, let us operate at 85% utilization with 90% yield and that will be the time when I will come back and reply to this question.
Unidentified Participant
Noted. Thank you. Thanks for.
Avik Roy
Please have in mind we are the first one in the country to manufacture cells with this kind of scale. Yeah,
Unidentified Participant
Yeah, yeah, yeah. That’s a really great commendable. The second question is while you are licensed with ministry or discussing on the policy framework on the cell manufacturing localization, what is their feedback? What what they are exactly waiting for be any policy measures.
Avik Roy
It’s like kind of a chicken and egg. I mean you also have to have sufficient capacity locally to you know, announce a policy for making India. So unless there is, I would like to believe unless there is about 20, 25 gigawatt of capacity in India, let’s say 20 gigawatt, that is a minimum base where we will get a lot of support from the government. In fact today the whole EV market in automotive, the EV market in India is also 20 gigawatt hour. So to have that, just to have that in mind at scale. So Once we have two, three players coming up with 15, 20 gigawatt hour I think we’ll have substantial scale for the government to intervene and you know, take some policy changes.
Unidentified Participant
Noted sir. Thank you. All the best.
Avik Roy
Thank you very much.
Operator
Thank you. We will take the next question from the line of Sagar Parikh from Renaissance Investment. Please go ahead.
Pravin Saraf
Yeah, hi. Am I audible?
Avik Roy
Yes please.
Pravin Saraf
Yeah, so just I was confused actually you said 6 gigawatts, 3 is in NMC and 3 is in LFP cylindrical NMC cylinder free and LFP this thing. But and then you said Hyundai is separate. So what. What exactly.
Avik Roy
We have a separate contract which where there is a co investment. So we are delinking it with our own internal investment. So. So that that will be an incremental capacity over 6 kilowatt when we commission that.
Pravin Saraf
Oh, so that is not a part of that thing. So when will that be commissioned and that 4800 crores. Also 4800 crores.
Avik Roy
No, no, no. So that will make a disclosure when the time comes. Maybe soon. Yeah,
Pravin Saraf
But it’s not a part of FY27 commenting
Avik Roy
On that. This is still not in public. Could be, but I’m not commenting on this because this is a material disclosure.
Pravin Saraf
Noted.
Operator
Thank you very much ladies and gentlemen. We will take that as the last question for today. And with that concludes the question and answer session. I now hand the conference back to the management for closing comments.
Avik Roy
So thank you everybody for the extremely engaging questions. We have been pretty confident of the quarter coming by because last consecutive two quarters was pretty satisfying. Particularly after a week quarter two. I think we have been able to deliver a growth which normally is in line with the expectation both in top line and bottom line. And our April having gone, I think we also have a similar view on quarter one of this year as well. I hope we have been able to answer all your questions satisfactorily.
If you have any further questions, I mean we would be very happy to be of assistance. Kindly reach out to us. Thank you. Over to the moderator.
Operator
Thank you members of the management, on behalf of Investec Capital Services. That concludes this conference. Thank you all for joining with us today. And you may now disconnect your line.