Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
GRAVITA INDIA LTD (NSE: GRAVITA) Q4 2026 Earnings Call dated May. 08, 2026
Corporate Participants:
Yogesh Malhotra — Whole Time Director and CEO
Sunil Kansal — WTD & CFO
Naveen Sharma — Executive Director
Analysts:
Riju Dalui — Analyst
Unidentified Participant
Unidentified Participant
Sumant Kumar — Analyst
Unidentified Participant
Unidentified Participant
Amit Dixit — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Gravita India Limited 4Q NFY 26 Earnings Conference Call hosted by Antique Stockbroking. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Riju Dalui from Antics Talk Broking.
Thank you and over to you sir.
Riju Dalui — Analyst
Thank you Ruthuja. On behalf of Anti Stock Broken, I would like to welcome all the participants on the Q4 and FY26 earning call of Gravita India. We have with us from the management side Mr. Yogesh Malhotra, whole time director and CEO Mr. Sunil Kansk, whole time director and CFO Mr. Naveen Sharma, executive director and Mr. Anand chain investor Relations on the call. Without any delay, I would like to hand over the call to Mr. Malhotra for his opening remarks post which we will open the floor for Q and A and thank you.
And over to you Sir.
Yogesh Malhotra — Whole Time Director and CEO
Thank you Mr. Riju. Good afternoon everyone and welcome to our Q4 and FY26 earnings call. I hope you’ve had an opportunity to review the earnings presentation and financial results uploaded on the stock exchanges. I will walk you through the key strategic updates, operational progress and financial performance followed by Q and A session. I am pleased to share that Gravita ended FY26 on a strong note, continuing towards its growth trajectory over FY21 FY26 the company delivered a strong five year CAGR in revenue, EBITDA and PAT of 25%, 49% and 31% respectively, reflecting consistent operational and financial performance.
Despite macroeconomic uncertainties and elevated logistic costs arising from geopolitical conflicts, Gravita demonstrated resilient performance driven by disciplined risk management, agile execution and strong operational capabilities. Before discussing the financial performance in detail, I would like first to highlight the key strategic developments that continue to shape and strengthen our growth journey. Our expansion program is progressing broadly as planned with total installed capacity now at about 4.57 lakh metric ton per annum.
We continue to work toward our medium term target of scaling this up to over 8 lakh metric ton per annum by FY29 in line with our focus on building a larger and more diversified recycling platform. In February 2026, Gavita expanded its lead recycling capacity at Mundra by 80,300 metric ton per annum, taking the total capacity to 145,000 metric ton per annum. The company invested rupees 49 crore towards procurement and commissioning of the plant. Funded through internal accruals. The expanded capacity is expected to enhance operational efficiencies, optimize logistics and strengthen service capability for key export markets.
Located strategically near the port, the Mundara facility continues to offer significant advantages in raw material sourcing and global market access, further reinforcing Gravitas commitment to sustainable growth and the circular economy. As part of its diversification strategy, Gravita commissioned a 6,000 metricon per annum pilot lithium ion battery recycling facility at Mundra in January 2026 with an investment of rupees fourteen crore funded through internal approvals. The facility is expected to scale up gradually as operations stabilize.
Backed by advanced recycling technology, the plant will ensure safe and sustainable recycling of lithium ion batteries, minimize environmental impact and conserve valuable resources while strengthening Gravitas presence in the emerging EV battery recycling seg. I am pleased to share that Gravita has entered the copper segment through the acquisition of 99.44% stake in Rashtri Metal Industries Limited for rupees 560 crores, marking a strategic diversification beyond its core led business. RML operates an integrated manufacturing facility in Gujarat with a capacity of 31,200 metric ton per annum and derives 40% of its revenue from exports to key markets including the uae, usa, Thailand, Sri Lanka, Kenya, Indonesia, Oman and Saudi Arabia.
The acquisition strengthens Gravitas non LED portfolio, enhances backward integration capabilities and unlocks synergies across procurement, logistics and sales while expanding its presence in high growth electrical, automotive and other value added copper alloy segments. The company plans to establish a copper recycling facility in Mandavi, Gujarat with an initial capacity of 29,400 metric ton per annum. In phase one. By incurring a capex of rupees 160 crores approximately, the facility is expected to strengthen backward integration, enhance operational efficiency and support margin expansion in the copper segment.
Commercial operations are expected to commence within the next 12 months. The commissioning of plant will be funded through internal accruals. On the investment side we have earmarked a total capex of rupees 1700 crore through FY29. Of this rupees 815 crore is being deployed towards strengthening and expanding our existing businesses while the balance will support entry into new recycling verticals such as lithium ion, copper and Steel. During FY26 we incurred capex of rupees 372 crores. Gravita has been assigned an ESG rating of 65 by NSC Sustainability Ratings and Analytics Limited reflecting the company’s strong commitment towards sustainable business practices, responsible growth and long term value creation.
Coming to Operational performance in FY26 total volume increased by 5% to 56,208 metric ton per annum. The lead segment reported growth in sales of 7% to 48,889 metric ton per annum driven by capacity additions and stabilization on a quarterly basis. Sales witnessed an increasing trend. On the other hand, the aluminium segment witnessed a declining trend in FY26 as well as on a quarterly basis primarily due to the inability to hedge and a selective sales strategy. The volumes are expected to pick up once the hedging mechanism is live on.
MCX Due to tightening government regulations and the ongoing transition from informal to formal sector, the industry is undergoing supply chain formalization and enhanced compliance led sourcing in FY26. FY26 EBITDA per ton for lead, plastic and aluminum stood at rupees 22,043 crores, sorry rupees 23,043 and 16,043 and 12,328 respectively. Moving to the consolidated financial results for FY26 revenue stood at rupees 4,265 crores reflecting a y own y growth of 10% driven by increased capacity, utilization and operational efficiencies.
Value added products contributed 42% to the overall revenue demonstrating steady progress towards Vision 2029 where the target is a 50% contribution from such offerings. Adjusted consolidated EBITDA for FY26 stood at rupees 452.48 crores reflecting a growth of 12% year on year with margins remaining healthy at 10.6%. Consolidated PAT came at Rs. 378.80 crores registering a year on year growth of 21% with PAT margins at 8.88%. Coming to the consolidated quarterly performance, revenue grew by 13% year on year and 15% quarter on quarter to rupees 1172.76 crores.
Adjusted EBITDA stood at rupees 112.91 crores reflecting a growth of 4% year on year with margins remaining strong at 9.63% plus supported by operating efficiencies and an improved mix pad for the quarter came in at rupees 91.88 crores with PAT margins remaining healthy at over 7.83%. Gavita is steadily progressing towards its vision 2030 with a clear focus on scaling its core businesses and expanding into emerging segments such as copper, lithium ion, rubber and steel recycling. Backed by over three decades of recycling expertise, 14 eco conscious manufacturing facilities, presence across 70 plus countries, strong stakeholder support and robust capacity expansion plans, Gravita remains well positioned for sustainable long term growth driven by diversification, operational efficiencies and value added products.
That’s all from my end. I would now request to open the floor for questions and answers. Thank you and over to you moderator.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press start and one on the Touchstone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use answers 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 Akhilesh from MK Global. Please go ahead.
Unidentified Participant
Yeah, thank you so much for the opportunity. So my first question is on the CapEx. So our earlier CapEx guidance was of around 1200 source over FY26 to 28. Now since we have done RMIL acquisition and further expanding our, you know, recycling capacity. So there what is our plan now? Are you planning to rationalize some of our net capacity expansion or how it is going to be because of this?
Unidentified Participant
Yes, earlier Capex was not including the copper part which is now being added. So that is one which is making us more capex in next four years. So instead of 1200 crores we are planning to have bigger capacity in especially in copper.
Operator
May they require the participant to please mute themselves while management is answering your question there is a lot of disturbance from your lines. Thank you very much sir, you may please go ahead.
Unidentified Participant
Yeah, so we are adding copper and we as we already mentioned that we recently announced a capacity of 30,000 tons in copper which was not there earlier. So we are very bullish on this part because we already acquired a company in value added products in copper. So now the copper will be the bigger part of this Capex plan in next four years. So there is a reason we are increasing the capacity expansion and Capex plans for next four years which is from 1200 crores to 1700 crores.
Unidentified Participant
But sir, because of this capex are lead capacity going to get rationalized? I mean to say is there any change in expansion of lead capacity as such?
Unidentified Participant
No, we are not changing the capacity of lead. So lead capacity will be as per plan because earlier the plan was to Take this capacity to 700,000 tons, but now we are taking it to 800,000 tons. So the additional capacity is coming up in copper which is taking a more.
Unidentified Participant
Can we get the commissioning timeline of that 45,000 tons of lead capacity addition which was about to happen in Q4 itself?
Unidentified Participant
It is going to happen in, in this Q1 only in general
Unidentified Participant
And any estimated timeline like end of Q1 or something.
Yogesh Malhotra
So we have already installed the capacities. We are just waiting for the government approvals which will, which can come anywhere. Probably in the first half of this quarter only.
Unidentified Participant
Okay, okay. And sir, my last question. What has caused the decline in absolute EBITDA in Q4 despite the copper segment addition in the baseline revenue and EBITDA both. And how do we see the impact of West Asia in Q1 also?
Yogesh Malhotra
So copper did not have any impact in Q4 in the sense that we only took it over in March itself. So only a very small impact in the EBITDA came from copper. Miniscule part came from copper. But as far as the overall EBITDA reduction is concerned, I mean a lot of our material goes to the Middle east, around 10%, 10 to 12% of the total sales. And most of these products that we sell to the Middle east are value added products. So because of this disruption we could not sell that material to Middle East.
And therefore the value added content or value added products that we used to sell went down. And therefore the EBITDA per ton also came down to some extent. And also the inward necessity cost got went up and therefore the overall material cost has also gone up. So that has also impacted to some extent the ebitda margins.
Operator
Request Mr. Akhilesh to please rejoin the queue. Sir, we have,
Unidentified Participant
There’s a small follow up on this itself now since the station board is still going on. So how do we see our Q1 margins to look like.
Yogesh Malhotra
See we are in the short term it definitely will have some impact but we always keep to, I mean see how we can mitigate those issues by going to different markets. Generally in value added product it takes time to find new markets for those products. So there will be some impact. But we are trying to find out how we can mitigate some of the effects coming out of this if it takes longer.
Sumant Kumar
Thank you so much, sir.
Operator
Participants, in order to ensure that the management is able to address questions from all participants, we request you to please limit your question to two per participant. If you have a follow up question, you may rejoin the queue. The next question is from the line of Vilay Kumar Rai from Kamakhya, please go ahead.
Unidentified Participant
Hi sir. Congratulations on great set of numbers. I have two questions, so can you briefly outline your strategy in the copper business? Are we trying to launch more value add on products or are we focusing on the existing products that we have got through the acquisition and what are the synergies that we’ll get with our lead acid business and copper business? And will this lead to an elongated working capital cycle?
Yogesh Malhotra
Yeah, so basically there are already quite a few value added products in our kitty now with rmal. So the. In the initial phase we would try to consolidate whatever markets or whatever products we are having and at the same time do some backward integration by putting up a copper recycling plant at Mundra which will be commission within the next 12 months. So that will add on some value in terms of. And of course there will be some synergies in sales also apart from procurement that we talk about.
So that will improve the margins going forward. So that will be the first phase. In the second phase when we increase the capacities further in copper, then we will look at other value added products also apart from whatever we are making right now at rml.
Unidentified Participant
Okay, and then you also mentioned,
Yogesh Malhotra
Sorry, working capital base would not be impacted because I mean it’s a backward integration only. So overall EBITDA margins would increase but the working capital range would remain similar.
Unidentified Participant
Okay sir, and so you also mentioned rubber and steel recycling in the future. So do we have any plans out for that yet? Would we do an inorganic acquisition or would we try to set up the capacity on our own?
Yogesh Malhotra
So steel is not going to come anytime soon because we are now looking at copper and then other products also. But Tyre, we have already acquired a company in Romania and in India also we have started putting up a capacity for rubber and that would be coming up in H1 this year. So. So the rubber capacity would come up in H1 this year. So this is. Yeah, definitely. So this is just the first capacity as far as rubber is concerned. And that is also in the first phase only. Or, and the total capacity that we are planning for Rubber is around 30,000 tons.
That would come up in Q1 or Q2 this year, but apart we would then increase the capacity first of all in Mundra itself we’ll increase the capacity from 30,000 ton in the next phases and then we’ll set up other rubber plants in other regions in India also. And we are also planning to increase capacity in Romania where we already have a plant next year.
Unidentified Participant
So steel is more of a long term plan. We’ll See this after maybe two years or three years down the line, once we have scaled our existing businesses,
Yogesh Malhotra
It all depends on how fast we stabilize the existing capex that we’ve done. Steel is under consideration at all times. But the only thing is that we are having our hands full right now with copper, rubber and lithium ion expansion plans and of course our existing lead expansion plants. So that is why we put steel on the back burner right now.
Unidentified Participant
Sure sir. Thank you sir. I’ll join Wellbekue.
Operator
Thank you. The next question is from the line of Nirvana Laha from Badrinath Holdings. Please go ahead.
Sunil Kansal
Hi, good morning sir. Thank you for the opportunity. My first question is on rmil. So what is the current capacity utilization there and what kind of growth are you expecting there in FY 2728 and which areas do you think the growth will come from?
Yogesh Malhotra
So current capacity utilization is around 50% and we would want to take it to around 60 to 65% in the next year itself. Going forward, by the end of the two to three year period we would take it to. I mean we are also planning to have to go for expansion in the existing plant. So would take this current capacity to almost double the current capacity from 30,000 tonnes to around 60,000 ton in the next two years. But the overall capacity utilization at that point in time would also remain at around 60 to 65%.
Sunil Kansal
Okay sir. And the current product profile is. I understand there are some supplies to defense etc. If you can help us understand what is the current product profile and where do you see it going from here in the next three years?
Yogesh Malhotra
So in the current we are making copper sheets, brass cups, copper foils and other similar products that either go to the electric and electronics industries, coinage industry, ammunition industry, etc. So in the next two to three years we are only going to consolidate the current markets. Only the existing markets. Probably increase the product range in the existing markets only. But maybe two to three years down the line we may think of having other products in our kitties also. But right now we are only going to till the time we go and start producing 60,000 tonnes per annum, we would only concentrate on the existing product portfolios.
But then once we increase the total capacity then we may go in for other copper products also.
Sunil Kansal
Sure. So the copper recycling that you are setting up, what is the plan there? Is that like backward integration for rmil? Are you going to supply capitally to RMIL or are you planning to sell in the market?
Yogesh Malhotra
So both. A major part would go into RMIL only But then if there is, there is opportunity because we will keep on increasing the capacity at that end also at the backward integration part also. So if there are opportunities to sell it to other companies also, we would also be open to that. But major chunk of it would go to RMIL as backward integration.
Sunil Kansal
What are the current gross margins there at rmil and how much bump do you think this backward integration will get you?
Yogesh Malhotra
So currently on a sustainable basis we are getting around 45,000 rupees per ton. And going forward, I think if we do the backward integration, it would go up to 65 to 70,000 tons. 70,000 rupees per kg per ton in future.
Operator
This
Sunil Kansal
Is just a clarification on the answer that he’s providing. Please allow me to complete this. So this you are mentioning, sir, is the EBITDA per ton, is it?
Yogesh Malhotra
Yes, yes, yes.
Sunil Kansal
And the realization that tracks copper broadly. So if we track copper prices, RMI realization broadly track that. Is that the correct understanding?
Yogesh Malhotra
Sorry, can you come again
Sunil Kansal
For the products that RMI makes? Because I understand there are some alloy products also. If we have to understand how the realization. So if we track realization is a mix of
Yogesh Malhotra
All the products. Yeah, so the realization is the mix of all the products that they are selling. So there are part copper and part brass. But overall when we talk about the EBITDA per ton is based on the mix of the current products that they are selling.
Sunil Kansal
Okay, sir, I’ll come back in the line. Thank you.
Yogesh Malhotra
Sure. Thanks.
Operator
Thank you. The next question is from the line of Adesh Gosalia from Spark Capital. Please go ahead.
Unidentified Participant
Yeah, hello. Am I audible?
Unidentified Participant
Yeah.
Unidentified Participant
Yeah. So my first question was on the outlook on the working capital since so if you can just provide some outlook on for FY27 working capital scenario, what you are seeing with the new product lines coming up in the expansion that is happening. So
Unidentified Participant
Yeah. So current working capital was for this year including the copper part was around 90 days which was slightly higher because there was. We kept some more inventory considering the upcoming capacity at Jaipur and Mudra. So that was the reason. But going forward we see it with the copper business coming in and copper business says that will be more imported one. So it should be close to 85 to 90 days going forward.
Unidentified Participant
Okay. So more or less in the similar range because 90 days was in FY26. So is my understanding.
Unidentified Participant
Yeah, if we don’t consider copper it should be lower. But since the copper is more mostly imported one. So that’s the reason the working capital will be again back to 85, 90 days.
Unidentified Participant
Okay, okay, got it. So if you can share some outlook and the volume numbers of quarter for Q4, like we are expanding so much in quarter. So do we have some significant interest from such an OEMs or like some confirmed orders or something like that? If you can just give a picture on those, those lines
Yogesh Malhotra
Talking about rnal or the entire group?
Unidentified Participant
Entire group. Like the current capacity is coming up so I think both the lines would give a better picture.
Yogesh Malhotra
Yeah, so actually it’s very difficult right now to, to say anything about Q1 because you know, on one hand we have expanded at some capacities is going to give us some benefit in the quarter and of course we have as we have. I mean RMIL would be the first quarter that would start showing its complete result. But at the same time there are disruptions in logistic cost also and to some extent we are not being able to sell products or maybe bring raw material from the Middle east which is a major contributor in terms of both the value added content sales also and raw material also.
So that will have some negative impact going forward. But overall in this year we are very confident of and in the next three years we are very confident of getting a CAGR of 25%. 20 to 25% in volume terms consistently over the next three years.
Unidentified Participant
Okay. Okay. And the volume numbers we saw in Q4 for copper,
Yogesh Malhotra
So volume numbers overall we are planning to grow at around 40 to 50% in copper in this year. So it will be in the similar range over last year in copper also.
Unidentified Participant
Okay. Okay. And just one data keeping question on the steady state tax rate that we will have.
Unidentified Participant
Okay, so tax rate for last year it was around 15% but since the business which is coming up like RMI and copper business which is mostly in India and Indian tax rate are close to 25%. So blended tax rate for going forward should be in the range of 17 to 18%.
Unidentified Participant
Okay. Okay, thank you. That’s it from mind. I will join back in the queue.
Operator
Thank you. The next question is from the line of Amit Dixit from Goldman Sachs. Please go ahead.
Amit Dixit
Yeah. Hi, good afternoon everyone and thanks for the opportunity. Couple of questions from my side. The first one is essentially again on rml. Just wanted to understand if there is surplus land for you to expand over there. And looking at the margins of RML EBITDA margin that you have disclosed for FY26 that is close to around 8% now gravitas overall margins are like in the range of 10% or so. So is there Any possibility of increasing the margins over there or is the business like that, that, you know, copper business would remain at 8% kind of thing.
And if you could also highlight the sourcing of copper of currently, will it. Will you be tapping into a regular African markets or you know, you will be exploring, let us say Latin America also for that. So this is the first. Yeah,
Yogesh Malhotra
So in rmal I think the overall margins definitely we would plan to increase this. As I mentioned that we would probably change some product mix, sorry at the procurement level, some mix in terms of scrap also currently they are not optimizing use of copper scrap. We would like to increase that going forward. And of course we will use our existing yard network to source copper scrap also. And then of course in copper generally we would have to go to the developed markets also. So US, Europe and South America and of course Australia, these are the other markets that we will be considering in terms of setting up additional yards in the next two to three years and of course importing from our existing set of vendors.
So that will improve the margins in next two to three years to around 9 to 10% from current around 8%.
Amit Dixit
Sir, just a broad commentary would help actually on the shift from informal to formal sector. Last year or year before last there were a couple of endeavors from the government particularly with respect to correcting the inverted tax structure and you know, making sure that the BWR mechanism is implemented. So what are the changes that you are seeing and what would be the approximate shift that you would expect next three years to formal sector from informal?
Yogesh Malhotra
So one of the major shift that has started is actually earlier there was a lot of EPR transactions that were taking place between two parties and it was not transparent. Now the government has set up an exchange where only where you can sell or buy epr. So there is more transparency. Now nobody can sell at a rate lower than the earmarked rate for eprs. So that is one one area that has changed drastically in this case because in some cases the customers were forcing the vendors to sell EPR at a cheaper rate.
So with this, you know, exchange coming in between where you can sell it through that exchange only that will get, I mean that will change. So that will further, you know, fast track the fast track this shift from unorganized to organized.
Naveen Sharma
And add to further to this there will be an audit mechanism which Central Pollution Control Board is making that framework of audit so wherein somebody generating any fake edits that will also be audited. So this process will also improve in this EPR mechanism and BWMR regulations
Yogesh Malhotra
As far as battery is concerned. I think there is now a consensus between smelters and also the battery makers. And I think there is no resistance in terms of this EPR regulation. Now everybody is on board with the EPR regulation as far as battery is concerned. There are other sectors also where it is taking probably a little longer time. But most of the customers, I mean the battery brand owners and the smelting companies are in line with these EPR regulations now.
Amit Dixit
Okay, sir, Great. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Suman Kumar from Motilal Oswal. Please go ahead.
Sumant Kumar
Yeah. My question is for the copper segment existing how the existing yard and overall sourcing of land and other raw material after injuring to copper is helping and how much we have to expand to other geographies or also other yard to have a more sourcing of copper?
Yogesh Malhotra
Actually, I mean copper generation in developing economies is limited. So we have to go to the. And whereas most of the battery scrap that was coming to us was from our own yard was from developing economies only. So to some extent our developing economies would also give us copper. But most of the copper that would get import that we would import would come from developed economies as I mentioned, like US, Australia, Brazil, etc. So we have to set up or we have to strengthen our sourcing from these developed nations also when it comes to copper.
So we are setting up a recycling plant which will be operated from next year onwards. And we are also at the same time setting up our own procurement network in, in these locations. So we are very confident but that by the time we’ll set up the plant we would have a procurement network in these countries also.
Sumant Kumar
Existing network is helping you for getting. It
Yogesh Malhotra
Will definitely help. It will definitely help. But the, the. The plan is to going for a 30000 tons per annum in the first phase itself. So we would need to have other sources for copper also which would majorly come from developed nations only. It’s not that we do not have our own procurement network in these nations. In these countries we have a lot of other batteries come from us currently. So we would use that network to source copper, but then we would have to expand that network even further.
Sumant Kumar
Last question after consolation of RMIL I understand RMIL EBITDA per kg is higher, but working capital I think is also higher. So is it correct assumption working your margin profile of the company is going to improve, but your working capital is also going to increase.
Yogesh Malhotra
So margin profile in terms of Percentage would not improve in terms of absolute. It would improve per ton. If you talk about. And yeah, definitely because we would be importing a lot of copper from overseas locations then definitely the working capital would increase. So as Sunil Ji mentioned a little while earlier is that you can expect the total working capital to remain at around 90 days in future also.
Sumant Kumar
Okay. So higher than existing working capital.
Yogesh Malhotra
Existing also it’s 90
Unidentified Participant
Days. So with the copper because we were holding additional inventories for in the lead also we were holding some additional inventory and there’s a reason the whole year was 90 days for us in the last year. So and going forward also it should be in the range of 85 to 90 days considering copper coming in.
Sumant Kumar
Thank you so much.
Operator
Thank you. The next question is from the line of Akash Singh from ICIC Securities. Please go ahead.
Unidentified Participant
Good afternoon sir and thank you for the opportunity. So just wanted to understand our capital allocation in terms of that 1700 crore. If you can bifurcate it on a year wise and given the copper would require a huge absolute working capital how should we look at the debt?
Unidentified Participant
Yeah, so definitely year wise if you see the breakup is close to 600 crores for next year and 700 odd crores in the FY28 and then around 400 crores for FY29. So this is a broad breakup of 1700 crores. And definitely this 1700 crores will be funded from internal network. We can easily fund this 1700 crores. But definitely we need a more capital for. For working capital which will be taken from debt. Working capital debt. But we won’t consider this working capital debt as debt because we keep our hedging mechanism in place.
And all the inventories which is a major part of this working capital is always hedged inventory and we don’t see any risk. And metal is as good as liquid cash. So the idea is to keep this inventory in the form of metal and and take some debt on that.
Unidentified Participant
So still we didn’t get big, you know the clarity on what kind of debt increase we can expect in the next 12 to 15 months because of these endeavors.
Unidentified Participant
So debt should be working capital debt of around 800 to 900 crores after the copper coming in Once the copper business starting say next year. So that time we should be peak that should be close to 800. Currently we are 118 crore of net debt we are having and which will go up by 600 to 700 crores. 700 crores approximately.
Unidentified Participant
Notice sir, my second question regards to copper only. Unlike Lead we don’t have that kind of already established a sourcing system or a geographical advantage. So just wanted to understand given some of the competitors are also adding sharp capacities in this segment and VU is predominantly depending on the imports. So there have been already tied up with few people to get this or how should we look at from this geography we think that we would be able to source everything in terms of copper.
Yogesh Malhotra
So sir, in copper there are two things. I mean if you buy from aggregators, I mean that is true with any metal or any scrap is that if you buy from aggregator and then you make normal probably rod of copper and sell it to the market, you would not have any profits. But here now we have this RML where we are making value added products. So we are thinking of copper as a backward integration to that facility. Definitely our own procurement network is going to help. It’s not that it’s not going to help.
We already have material coming from countries from where copper is also coming. We have our representatives there. In some of these countries we have our own yards also in some of these countries. Earlier we were not buying copper from those vendors or in those yards. Now we would start buying copper also from those yards. So definitely there is going to be synergy in terms of reducing cost and there is where we are a little different from our competitors. So on one hand we would have some benefit in terms of going to the last mile and collecting copper scrap at the same time because of the value addition.
Also we would get some delta in terms of the overall realization from copper. So if you look at the overall margin that we believe is going to be better than some of our competitors who are just selling basic common copper products and are buying from aggregators
Unidentified Participant
Any synergy benefit which you want to point out in terms of percentage or figures.
Yogesh Malhotra
So currently as I mentioned that the RMAL if they’re buying, I mean RML is having a total EBITDA per ton of around 45,000 per ton. And we we are expecting it to go up to around 65,000 per ton in by the time our new recycling unit comes up in the next two years.
Unidentified Participant
That’s all from my side. Thank you and all the best for future.
Operator
Thank you. The next question is from the line of Srinik Mehta from Indo Alps Wealth. Please go ahead.
Unidentified Participant
Hi, my question was about the overall aluminium EBITDA which has fallen on a per metric ton basis from almost 23,000 per ton to 17,723% decline and plastics have also fallen from 20,300 to 9,800 almost half. Given that you have this vision of 2030 where non lead business would be almost 35 to 40% of the overall business, can you decompose how much margin compression is attributable in this case to one the LME named input cost pass through lag and second through the capacity ramp up absorption at Mundra and recently commissioned plants.
And third the structural pricing pressure from competition or end market weakness. And which of these do you expect that will reverse in the first half of FY27?
Yogesh Malhotra
So I think we’ve always mentioned that the pertinent EBITDA from aluminium is going to be around 14 to 15 rupees per kg and that has been true for the entire year. In fact there has been some increase in last quarter because of sudden increase in aluminium prices. But on a sustainable basis we always said that it’s going to be around 14 to 15 rupees per kilogram. And for the entire year because of copper pricing going up it has been around 16 rupees per kilogram in aluminium. So it’s not correct to say that the margins have been decreasing.
The margins are still over and above the guidance that we have given. But because there is no hedging mechanism then you can see some shifts in realization or EBITDA margins going forward also. But on a sustainable basis 14 to 15 rupees can be expected. And definitely because when we set up our own plant in India the working capital cycle increases and therefore the necessity to have hedging mechanism is very important. So therefore we are waiting for this approval from MCX or MCX starting a contract on aluminum before we scale it up in India.
As far as plastic is concerned, I’ve mentioned it many times earlier also that it will take some time and it’s also consistent if you look at FY25 last year versus this year there has been some increase in from around 10 rupees to around 12 rupees this year. And part of it was because of again Q4 when the plastic prices surged because of this disruption and no plastic coming from overseas locations. So therefore the plastic prices went up and therefore we could gain some higher EBITDA in plastic in the last quarter.
But on an average basis you can expect around 10 to 12 rupees EBITDA margins in plastic going forward also. So there is no decline in the margins overall but the volume in plastic would take some time. In aluminum we are regularly following up with MCX and waiting for the approval to then scale up aluminium in India
Unidentified Participant
And When do you expect that approval? Because it’s been hanging for a long time. We’ve
Yogesh Malhotra
Been expecting. I understand that we have been expecting this for the past one year. I can say that we can get it in Q1 next year also. But unfortunately it’s very difficult to predict because everything is there. I mean there is nothing that is left now. The approvals are already there. M6 has already made that contract but they are not releasing those contracts. So I think it can happen anytime.
Sunil Kansal
Okay,
Yogesh Malhotra
Thank you.
Operator
Thank you. The next question is from the line of Ashish Keshriwal from November, Institutional equities. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for the opportunity. The two quick questions, one you already mentioned about your sustainable EBITDA per term guidance for aluminium plastic. Is it possible to share that same for lead, copper and rubber?
Yogesh Malhotra
So lead again is around 19 to 20 rupees per kg. And copper currently is around 45 rupees per kg. But once we start our recycling facility, it would go up to 60 to 65 rupees per kg.
Unidentified Participant
Rubber.
Yogesh Malhotra
So rubber it would be around 7 to 8 rupees per kg.
Unidentified Participant
So sir, here, you know, when you are Talking about lead 19 to 20, you are considering the effect of this Middle east crisis also into that or this is not
Yogesh Malhotra
On a sustainable basis without any crisis or without any arbitrage opportunities. I mean if you look at last year, we had some opportunities of arbitrage where we increased our EBITDA per turn to around 22 rupees. But on a sustainable basis, I mean when there is no arbitrage opportunity and there is no disruption, then it is 19 to 20 rupees. But if any of these two can change the lead margin, but that would only be temporary, not a permanent shift. So on a permanent basis, 19 to 20 rupees is achievable.
And then as we become bigger and as our share of value added product goes up, you can see some improvements in the next couple of years.
Unidentified Participant
Understood. So that means Q1, one can expect at a lower end of the guidance in terms of EBITDA per turn at least.
Yogesh Malhotra
Yes, you can say that because there are certain disruptions that are taking place. But at the same time we are looking at other avenues so that we can compensate some of that effect. So we are still, I mean trying to find out what would be the exact. Understood.
Unidentified Participant
Okay. Second question is, out of this 850 crore capex which you are doing for copper, steel and others, how much is it is for copper? Because what we understand is that you know, lead was our bread and butter and then we tried to do it aluminium, plastic, rubber. But unfortunately for last four, five years nothing major happened over there. Now copper comes to our kitty and see that we will be focusing. Yeah.
Unidentified Participant
Okay. Out of this total capex of 1700 crores which we plan for next three years the capex for copper is approximately 700 crores.
Unidentified Participant
Okay. So in this 700 crore how much capacity we are building in including the integrated or backward integration also
Unidentified Participant
Yet to be planned because we are doing some capex for value added products also and at the same time for basic recycling also. So both around 200, 300 crores for value added products which will not be generating additional revenue but definitely it will improve the margins. But additional 300 to 400, 400 to 500 crores for increasing the capacity of basic products.
Unidentified Participant
So that’s what I’m trying to ask. So suppose you know in next three or four years we complete this 700 crore capex on copper and we have a capacity of 30,000 which you are saying we can double it to 60,000. So 60,000 again can go upward or not in this which is included in this copper capex. I’m trying to look at what kind of EBITDA we can generate once you, you know do the entire 700 capex and up and running in maybe four years down the line.
Yogesh Malhotra
I mean in the next two, two years the capacity would be around 60,000 tons. Only two to three years. But then when we increase our recycling capacities further then part of it would go to RMIL and the balance part we can, we would, we are planning to may probably go into some other value added products or some other products and therefore the total capacity would be around 100,000 tons in the by FY29.
Unidentified Participant
Okay
Unidentified Participant
So 100,000 tons, 65 to 70,000 rupees per ton. Abita. One can expect from there. That’s great sir. Thank you. And all the best sir.
Operator
Thank you. The next question is from the line of Sumanga Nivetia from Kotak Securities. Please go ahead.
Unidentified Participant
Yeah. Good afternoon. Thanks for the chance. So roughly now just continuing on the copper topic, what sort of working capital are we looking at say next three to four years? Is it roughly around 1200 odd crores?
Unidentified Participant
So basically the working capital cycle for copper is going to be around 90 days. So in that sense whatever. Right. If we calculate it for 30,000 tons capacity at 70% yes. It should be close to 1000 crores.
Unidentified Participant
Okay. Okay. So just I mean if you put in that 700 odd crores of capex, 1200 odd crores of working capital and EBITDA margin and some decent utilization of 60,000 tons capacity. Our calculation is suggesting not more than 1112 ROC. So just want to know what. What. What is our sense of the entire copper division return profile?
Unidentified Participant
No, basically as we said key the. The this recycling facility is the backward integration of our existing facility in copper. Like we took over this RMI lc. So if you consolidate this both the businesses together the overall the margin profile will be better and ROC should be in the range of 20% plus.
Unidentified Participant
Okay. Okay. So what margin profile? Yeah with. With backward integration we are taking around 6065 rupees per kilogram. Is that fair or will be better than that also on backward integrated capacity.
Unidentified Participant
So this will be 65 will be on the basis of current 45 of RMIL considering 45k of RML current current. So there will be some upside on that also in future and with integration it will. It will further improve. So we are going beyond 65 over a period of two to three years down the line.
Unidentified Participant
Okay. Okay, understood. So my second question is on. On. On the LED division. So generally as per our been the entire enforcement of the VPR norms and are we seeing any penalties being imposed because given all the policy tailwinds also in the last few years our volume growth has been almost in the lead division has just been around 15 CAGR which has been much weaker than what we were expecting or guiding. So what has been the key? Having disappointment here and how do we see this changing?
Naveen Sharma
Yes, as I mentioned earlier that there are a few changes which are going to happen on this EPR portal. One the trading will be happening through MSTC which will be an independent trading portal. And second the audit mechanism also involved evolving wherein the people who are providing EPR will be audited by Central Pollution Control Board. So this will create a higher value realization of EPR credits and later these script may become as a part of carbon credit also. So there will be more transparency coming in this area and parallel the reverse charge mechanism and TDS on particularly battery scrap is under discussions and the next GST council meeting it may be implemented because NITI Aayog has recently released three reports.
One on tire, one on end of life vehicles and other one was on batteries lithium ion as well as lead acid battery. Wherein also they have recommended all these reforms related to tax and operational reform. So hopefully in next council meeting it may come as a reverse charge mechanism. TDS1 is E portal and third with audit of the recyclers.
Yogesh Malhotra
So to answer your question, to some extent it is having an impact in terms of higher, you know, availability of material domestically. But at the same time, you know, 18% GST is creating a hurdle because of which most of the battery brand owners are not able to compete with the unorganized market. So therefore, I mean, although they are trying their best at the same time, unfortunately the lead prices globally have not been, I mean, they were very low over the last years. So the difference between domestic LED and overseas lead was very high.
So that also created some problem in terms of battery manufacturers to go and, you know, collect batteries from domestic market. But once this reverse charge mechanism will come, that 18% benefit that this unorganized sector gets, goes away, then it will probably go very fast. But otherwise also if the arbitrage opportunity which is currently available in domestic market vis a vis the LME or the global market comes down, then also the collection would be much faster.
Unidentified Participant
Got it, got it. If I can just squeeze in one more question. Can we get volume guidance for FY27 across division?
Unidentified Participant
So volume plan is like the same 20 to 25% growth and in additional growth, slightly additional growth because we missed some volumes in the last year. So we are expecting slightly more than this in the FY27.
Unidentified Participant
Got it. Thank you. And all the best, sir.
Operator
Thank you. The next question is from the line of Kushnahar from Electrum pms. Please go ahead. Kushner, please go ahead with a question. Your line is unmuted. Mr. Nahar may be requested to unmute yourself and proceed ahead with your question. As there is no response, we’ll move to the next question which is from the line of Nishita from Sapphire Capital. Please go ahead.
Unidentified Participant
Yes, hello. Am I audible? I just had, I had a question on the lithium ion battery plant that you put up of 6,000 MTPA. So we commissioned that in Q4. So what is the revenue potential from that plant?
Yogesh Malhotra
See, as we mentioned earlier also, that lithium ion battery is just a pilot project where we are trying to understand the technology. It’s only the first part of the overall lithium ion plant that we have established and that is still black mass. So currently we are putting up the second part where we would be refining and extracting lithium and other minerals from this plant. That is still to come. So we are not expecting any major revenue in this year from lithium ion battery recycling. But in the next two to three years, I mean, you can see some volumes coming, but not, not we are not considering any volume from Lithium ion battery in the next within our FY29 guidance.
If something comes that would be over and above the guidance.
Unidentified Participant
Okay. Okay. And like the backward integration of recycling for copper, the recycling plant that you are doing, what will be the capacity of that recycling plant?
Unidentified Participant
The root capacity for this plant is the phase one will be 29, 400.
Unidentified Participant
Okay.
Unidentified Participant
And like what will be the total capacity after all the phases are done?
Unidentified Participant
As we mentioned that over a period of two to three years, we are planning to take this capacity 200,000 tons plus.
Yogesh Malhotra
That is 100,000 tons plus.
Unidentified Participant
Okay. Okay, understood. And so like we are under a very high growth phase right now with all of our capacity expansion. So once all of the capacity expansion is done, what like at the maximum utilization, with all the capacity capacities commission, what is the revenue potential that we see?
Yogesh Malhotra
As I mentioned earlier, that the total you can expect a volume of around 800,000 tons by FY29
Unidentified Participant
In
Yogesh Malhotra
Terms of volumes
Unidentified Participant
And
Unidentified Participant
I’m
Yogesh Malhotra
Sorry, that is the total capacity and you can expect around 60 to 65 utilization of those capacities which will come to around 5,500 thousand tons. 500 tons. 500,000 tons
Unidentified Participant
By
Yogesh Malhotra
FY29.
Unidentified Participant
Okay. And the big will be more or less stay the same that you mentioned earlier.
Yogesh Malhotra
Segment wise EBITDA guidance we’ve already given and it would remain on similar.
Unidentified Participant
Okay. Okay, understood. Thank you so much. All the best.
Operator
Thank you. The next question is from the line of Madhwani from Step Trade Capital. Please go ahead. Aniket, please go ahead with your question. Your line is unmuted. As there is no response. We’ll move to the next question which is from the line of Sahil Kirk from CCV Fund. Please go ahead.
Unidentified Participant
Hi, good afternoon sir. Am I audible? Hello.
Operator
Yes, you are. Please go ahead.
Unidentified Participant
Sir, may I know like what was the reason for promoter offloading their stake in open market during last 12 months?
Unidentified Participant
So there was no sale in the open market. There was some dilution by way of selling to some institutional shareholders where they were looking for some. Some bigger, you know, stake in the company. Company. So that was the reason. And promoter was also looking for some liquidity for his personal purposes. That was the only reason.
Unidentified Participant
Okay. And someone second question is that the borrowings in the overall company is increasing. Like in March25 it was 286 crore. And March on the 5th we have closed at 736 crore. But our interest cost is, you know, decreasing. So we have put interest of only close to 25 odd crores against the borrowings of 736 crore. So are we capitalizing the interest cost or like what is the reason for such a low interest cost?
Unidentified Participant
Basically we are considering the net debt. So currently net debt is very small which is 100 odd crores at this moment. So earlier we were having some additional liquidity by way of we raised some equity from the QIP and that money was there with us. So later on we use part of that money for some of the capex and internal adverse and the working capital. And recently we acquired one company you heard about RML in copper. Copper business. So some of the liquidity was used for that also. So considering everything all after all, everything.
Now that we have the net debt of around 100 crores which is very small. And that’s the reason the interest cost was coming down.
Unidentified Participant
So by net debt you mean to say that you have a surplus cash balance, right? Or maybe some liquidity investment. So for that we are already booking some but for that we are already booking other income in the PNL. So there is a 77 crore of other income in the P L. So how we are like netting off with that?
Unidentified Participant
No. So overall on the debt side we have. But when we have the higher interest cost also then the basically the reduction of other income was also there.
Unidentified Participant
What is the cost of money
Unidentified Participant
That is not debt is increase in the in this year year and only because of. Because of this acquisition which was done in the March itself the debt is, you know increased otherwise the debt was lower. So so the interest cost if you see on the year end overall year was lower because that was lower.
Yogesh Malhotra
So the other income only stopped in March mid March only.
Unidentified Participant
Okay, so what would be the tentative interest cost for FY27 based on the current debt of 736 watt crore.
Unidentified Participant
So interest will be in the similar range whatever we are doing around 4 odd crores for a quarter. So that 4 to 5 crores will be the interest cost for this year till the time we start the copper recycling business which is the bigger part of the working capital. So once that is starting so we start some increase in the debt for working capital. Otherwise till the time we don’t start that recycling business in copper, the working capital will be debt will be similar.
Unidentified Participant
Okay. Okay, perfect. So as this one last question. May I know what is the current expansion status of the Moonra and the plant? I guess I missed it earlier.
Yogesh Malhotra
So Mundra has already been commissioned and Fagi you can expect in Q1. So there are two three part to Mundra expansion. One is the the lead expansion that has already happened in last quarter.
Unidentified Participant
The
Yogesh Malhotra
Rubber expansion would happen in Q1 or Q2 this year. H1 this year. Foggy lead would of around 45,000 tons of lead capacity would happen in Q1 of this year.
Unidentified Participant
Okay. Okay. Thank you sir. Thank you so much.
Yogesh Malhotra
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for closing comments.
Yogesh Malhotra
Thank you everyone for participating in this call. We trust that we have addressed all your queries during this 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.
Operator
Thank you. Ladies and gentlemen, on behalf of antic stock broking, that concludes this conference. Thank you for joining us. And you may now disconnect your lines.