Pondy Oxides and Chemicals Ltd (BSE: 532626) Q3 2025 Earnings Call dated Jan. 27, 2025
Corporate Participants:
Sana Kapoor — Investor Relations
K. Kumaravel — Director, Finance and Company Secretary
Piyush Dhawan — President, Commercials and Strategy
Balakrishnan Vijay — Chief Financial Officer
Analysts:
Amit Lahoti — Analyst
Sani Vishe — Analyst
Shweta Dikshit — Analyst
Aadesh Gosalia — Analyst
Siddharth Mehrotra — Analyst
Sanjay Parekh — Analyst
Khush Gosrani — Analyst
Amit Agicha — Analyst
Soham Arora — Analyst
Rohit Ohri — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Pondy Oxide and Chemicals Limited Q3 FY ’25 Earnings Conference Call hosted by Go India Advisors LLP.
As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing a star then zero on your touchstone phone. Please note this conference is being recorded.
I now hand the conference over to Mr Sanak Kapoor from Go India Advisors LLP. Thank you, and over to you.
Sana Kapoor — Investor Relations
Thank you, Steve. Good afternoon, everybody, and welcome to Pondi Oxides and Chemicals Limited Earnings Call to discuss the Q3 and Nine-Month FY ’25 performance.
We have on the call Mr K., Director, Finance and Company Secretary; Mr B. Vijay, Chief Financial Officer; and Mr Piyush Dhawan, President, Commercials and Strategy.
We must remind you that the discussion on today’s call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces.
May I now request Mr K. Kumarawal to take us through the company’s business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.
K. Kumaravel — Director, Finance and Company Secretary
Thank you, Sana. Good afternoon, ladies and gentlemen, and welcome to our Q3 and Nine-Month ended financial year earnings call. I trust you have had the chance to go through the earnings presentation, press release and financial results that were uploaded on the stock exchanges. I will take you through the results post which we will have a question-and-answer session.
I am delighted to share that POCL has achieved a strong performance in Q3 and for nine months ended financial year 2025, excelling on both financial and operational fronts. Before diving into the operational and financial highlights, I would like to share strategic highlights and the projects updates.
On the — on the capacity expansion front, as you are already aware, we are expanding our lead capacity by 72,000 metric ton per annum in two phases of 36,000 metric ton at. This plant is fully automated advanced facility and the first-of-its-kind in India. I’m happy to share that the erection and commissioning of Phase-1 of 36,000 metric ton per annum plant are in final stages with the trial production expected to commence in the first week of March 2025.
Capex of approximately INR70 crore has been estimated for Phase-1 and the same is funded through the process of QAP and the internal accruals. Phase-2 expansion is expected to commission by half year — half year ending financial year ’26. The capex estimated for Phase-2 is INR20 crore.
So POCL has done capex of INR70 crore during nine months ended the current year ’24, ’25 and is also looking at setting up of R&D facilities for the creation of value-added products, both for the current portfolio and for feasible products, which will add overall value to the top and bottom-line of the company. The company has successfully raised INR175 crores approximately through QIP. These funds will be strategically utilized for long-term growth, expanding the existing and new verticals, strengthening operational capabilities and achieving our target of 2030 vision with a focus on sustainable growth, innovation and value-creation for all stakeholders.
Coming to operational performance. The nine months procurement, the mix of lead, plastic and copper through imports is approximately 76%, 53% and 100% respectively. Capacity utilization on year-on-year of lead, plastic and copper increased substantially on both nine months and quarterly basis. The production of lead has increased significantly by 34% on a year-on-year basis to 68,041 metric ton on nine months basis and by 6% on a year-on-year basis to 21,86 metric ton on quarterly basis. The sale of lead has increased by 33% on year-on-year to 67,577 metric ton on a nine-month basis and 9% to 21,618 metric ton on year-on-year basis on quarterly basis. There is a significant increase in-production and sales of plastics and copper as well as on both nine months and quarterly basis.
On quarterly basis, EBITDA per tonne of lead-in INR12,569 per ton, up by 2% on Q-on-Q basis and down 24% on a year-on-year basis. On Nine-Month basis, EBITDA per tonne of lead showed a drop of 13% to INR12,408 per tonne. On a Nine-Month basis, sales mix between domestic and export market remained at 36% and 54% respectively. The percentage of value-added products in the lead segment has been consistent.
Moving to financial results for nine months ended financial year ’24-’25. Consolidated revenue increased by 30% to INR1,533 crore, that is, we achieved in the nine months last year’s full year’s revenue in the current year. Consolidated EBITDA increased to INR80 crores, up by 47%. EBITDA margin increased to 5.2% compared to 4.6% in nine months in FY ’24. Consolidated PAT more than doubled to INR41 crore, up 108%, PAT margin increased to 2.7%.
On standalone basis also, POCL showed a similar growth story with the revenue, EBITDA and PAT up by 29%, 42% and 73% respectively. Coming to financial results for the quarter on year-on-year-on-year basis, consolidated revenue for Q3 FY ’23 increased by 11% to INR509 crore. Consolidated EBITDA increased to INR26 crore, up 11% EBITDA margin increased to 5.2%. Consolidated PAT increased by 31% to INR13 crore, PAT margin stood strong at 2.6%. On standalone basis also, revenue EBITDA, PAT increased by 11%, 9% and 21% respectively. The performance on Q-on-Q basis showed a drop because of reduced production and sales of lead plastics and copper. The reason for the same is to — due to year-end — year-end holidays in foreign countries and it is the trend in the industry.
In conclusion, BOCL is well-positioned to achieve its target 2030 with a clear focus on expanding lead capacity, exploring new verticals like lithium-ion and delivering over 15% volume growth, 20% plus revenue CAGR and profitability growth, achieving EBITDA margin exceeding 8% and ROCE above 20%. Our priorities include driving 60% plus revenue from value-added products and achieving a 20% reduction in energy consumption, underscoring our commitment to sustainability with robust capacity expansion plans, implementation of Singent government regulation, strategic CapEx initiatives, enhanced operational efficiencies, experience leadership and steadfast stakeholder support, POCL is passed to exceptional and sustainable growth in the years ahead.
That’s all from my side. I would now request to open the floor for Q&A. Thank you, and over to you, moderator.
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 star N1 on your touchdown telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Lahoti from Emkay Global. Please go-ahead.
Amit Lahoti
Thanks for the opportunity. I have three questions, if I may ask. First is what led to sequential decline in-production in sales volumes? The reason that you gave in your opening remarks doesn’t actually fully answer my question, so I basically wanted to repeat this question. And do we see them back to normal levels in Q4? That’s my first question.
K. Kumaravel
Okay. You can conclude other questions also.
Amit Lahoti
Sure. So the second question is, what was the share of domestic procurement in Q3? And then what is our target for FY ’26? And then the third question is that, that since you have done a recent capital raise, the ROCE could look optically low in the next one to two quarters until you deploy the cash. So do you still stick to 20% ROCE guidance for FY ’26 or you might want to give a lower number to get the right anchoring to the market.
Piyush Dhawan
Hi, Amit. So we’ll start with your first question. So with regard to the sales volume decline, if you look at the total nine months, we have almost completed 95% of what we achieved last year. So that’s a very positive sign in terms of the growth trajectory of what we’re going to-end up with this year. However, if you look at the particular quarter in question, this quarter, again, because of the calendar year ending and since we are in the automotive industry, brings a certain amount of decline in terms of quantity because of the holiday season, which is not a decline on this particular quarter standalone, but then it gets kind of compensated in the upcoming quarter. So that will get balanced out and we should be in a way to achieve a very good quantity for this particular financial year, given that we’ve already completed 95% of the last year numbers in terms of volumes. Now when it comes to the share of the domestic procurement, we are at — just one second.
Balakrishnan Vijay
This is Vijay. So in terms of domestic procurement, last year, we were about 86% import and 15% domestic. And this year, there is a reduction in import percentage, which is about 75% import and 25% domestic. And we foresee this number to continue the next year as well. With respect to your third question, ROC. ROC. ROC, yes, this year, the ROC is around 15% to 18% is something which we can see. But next year, definitely the numbers should be 20% plus with ours.
K. Kumaravel
So I’ll just add reason being that capital employed is not employed throughout the year in the current financial year. If it is available for throughout the year, that return on capital employed can be seen at the expected levels.
Amit Lahoti
Sure. So to be clear on the last two questions, coming back to the first one, so of course, you can say that there was some slowdown in auto sector plus some holiday period affecting your sales volumes. But why was production volume low? Did you intentionally try to match market expectations on production? Otherwise, what my thought was that you could actually produce it and then sell-in the month of January, was it just…
K. Kumaravel
Adding inventories?
Piyush Dhawan
No, of course not, Amit, this is something which is — which follows a trend. If you look at the previous years also and if you do an analysis on the peers and impact on the industry level also, the export market has a trend which is overlapping on the 3rd-quarter. So that justifies it completely. But the positive part is that quarter-four is going to improve anyways because there is a certain amount of tonnage that was attributed to quarter three that will get transferred to quarter-four. So this is something industry-related.
K. Kumaravel
Again, this holiday, because of holidays, imports also is getting delayed in the last week of December. From third week onwards, import also delayed because of holidays in the foreign countries.
Amit Lahoti
Okay. So you mean import of scrap?
K. Kumaravel
Import of scrap, yeah, 75% is imported anyhow, 25% only domestic. So naturally that import also after the second week of December, import automatically delayed that will pick-up only from the second week of January onwards only full pickup will come.
Amit Lahoti
Okay. Thank you. Very clear. Thank you.
K. Kumaravel
Thank you.
Operator
Thank you. Participants who wish to ask a question may press star N1. The next question is from the line of Shani Vishay from Axrus Securities. Please go-ahead.
Sani Vishe
Yes. Thanks for taking up my question. My question is broadly on the line of expansions and the use of proceeds from the QIB. So have you started aluminum recycling this quarter? And if not, do we plan to do so in the near-future. Similarly what is the update on the lithium-ion recycling? Given that we have now raised the funds, the funds are only to be used for lead expansion or we have other plans?
Piyush Dhawan
Hi, hi. So I’ll answer the question. With regard to the QIP that has been raised, the majority part of it will go to the project in question, which is the lead which we are going to go-live next month and that is what it is in terms of the capital employed. And of course, we are also looking at an alternative project for — in terms of the forward integration that we have planned for the non-ferrous metal portfolio. So that is from the project side.
Coming to the lithium-ion side of the project, of course, there is a feasibility study being done and we are in talks for implementing an R&D strategy because if you look at the overall lithium-ion manufacturing structure, majority of it is leaching, which is part of the second phase, which is a bit of a questionable process, which has not been kind of implemented by anyone as such in India or if you see globally. The first part of it, of course, mechanical is something which we are fully aware of. And if you look at the procurement cycle, that is going to come out in sometime in FY ’27. So we’ll be more of a plug-and-play prepared at that point of time. So right now, it is still at the pre-feasible — your feasibility stage. And when we get — once we get the go-ahead from the Board, we will start the implementation.
Balakrishnan Vijay
So in terms of your question in terms of utilization of funds, out-of-the total KAP, INR50 crores approximately has been, you know, allotted for capex in that the major part of that amount will be used for expansion of Phase-1 and Phase-2 and the remaining part will be used for our future metals portfolio.
Sani Vishe
Okay. Thanks a lot.
Operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and 1 to ask a question. The next question is from the line of Sweta Dixit from Systematix. Please go-ahead.
Shweta Dikshit
Hi, good evening, everyone. So a couple of questions from my side. One would be on the seasonality that you mentioned in the 3rd-quarter. So if that is the case and 2Q, we did around 25,000 tonnes of volume — lead volume especially. So can we see that the sales volumes going back to that level in the 4th-quarter? And the follow-up to that same question is industry perspective, is 2Q the strongest quarter in the year or 4th-quarter can be seen as the strongest quarter for the company?
K. Kumaravel
Yeah, definitely, 4th-quarter in terms of volume, we go with the second-quarter, no doubt, no doubt. Of course, there is no seasonality in the business. This is because of that year and the holidays in international level, both for supply and for customer side. This is the issue. Otherwise, there is no seasonality for the project for these products also. What is your next question?
Shweta Dikshit
On the volume side, is this 4th-quarter, can we see that going back to the…
K. Kumaravel
Already based on this January performance, alarm materials coming in-full swing, our sales also going-in full swing. So we will — whatever leftover in the December quarter, definitely will achieve in the 4th-quarter.
Shweta Dikshit
Okay. Another question being on the EBITDA per ton side, we saw and the steady-state run-rate of around 12,500 EBITDA per tonne for lead this quarter and it was 16 — above 16,000 in the same quarter last year. However, on the percentage side, the margins were still 5.4%. So could you explain this like how is per tonne EBITDA so strong, but on the margin percentage basis, we are still at 5.4% in the last quarter last year.
Piyush Dhawan
Okay. So when compared to EBITDA per ton when compared to last Q-o-Q and this quarter, the reason for a reduction in EBITDA is due to increase in domestic prices of raw-material. That is our concentration import has come down, there is a 10% reduction in your pricing. So that is one of the predominant factors by you know the EBITDA per ton per cage in terms of lead has decreased.
K. Kumaravel
That will be partially compensated through the EPR credits, which will be accrued in subsequent period.
Shweta Dikshit
So costly raw-material because of domestic procurement you’re saying?
Balakrishnan Vijay
So this is just a transitional effect. In fact, if you look at the domestic market, I mean the positive thing to look at here is that our domestic procurement portfolio has increased, which is good. And when you look at the overall domestic procurement panning out in the next three to six months, there will be a balancing effect in terms of the pricing, because if you look at the import price and the domestic pricing in India, there has always been a delta, I mean, from the beginning, this is something which is a given. But then due to the implementation of EPR, which we are seeing panning out, in fact, since the last quarter, again a positive sign that will kind of bring down the prices to the even levels and there will be a level-playing field, of course, for — as far as the domestic and the international procurement is concerned.
Shweta Dikshit
All right. Last question would be on the expansion that’s coming in since we are beginning trial production in the month of March as indicated in the opening comments. So from which quarter onward can we see this capacity at a full utilization level?
Balakrishnan Vijay
So we — as I had mentioned in the press release, we were going to do the trials in the first week of March. Of course, the coal trials are happening in the next month. And once the trials are on, we will be seeing as close to 80% to 85% utilization in the subsequent quarter, which will be the first-quarter of the next financial year.
Shweta Dikshit
All right. Thank you so much. I’ll join back the queue if I have further questions.
K. Kumaravel
Thank you.
Balakrishnan Vijay
Thank you.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you will press star and N1. The next question is from the line of Adesh Kosalia from Spark Capital. Please go-ahead.
Aadesh Gosalia
Hello. Am I audible?
K. Kumaravel
Yeah, audible.
Aadesh Gosalia
Yeah. Thank you so much for the opportunity, sir. I had a couple of questions. The first question was in the opening remarks, you mentioned that there is a significant increase in our sales from the plastics and the copper segment as well. So can you just give some numbers on that regards that how much was our production and the sales in metric tons if that’s possible.
K. Kumaravel
So do you have further questions or this is the only question.
Aadesh Gosalia
So the next question was with regards to the utilization. So I think you did answer about this in the — to the previous participant, but just to clarify that as we have almost reached 70% utilization, so you were — you said that the max utilization will be 80%, 85%. And on the same lines again that the additional capacity that we are adding since from which quarter in FY ’26, shall we assume the utilization will be like at the optimum level or at par with the current capacity.
K. Kumaravel
Okay. Okay. When it comes to plastics, nine months ended last year, we have done only 612 metric tons. This year, the number has increased to 2,984 metric tons approximately. With respect to copper, last year, year-on-year, the numbers were 81,000 metric tons and this year we have reached about 249 metric tons in terms of copper. So effectively, when compared to year-on-year basis, the numbers — the percentages increase is about 387 percentage in terms of plastics and 206 percentage in terms of copper. Lead, as you said, it is about 68.7 percentage capacity utilization when compared to 51.5% capacity in the previous year.
Aadesh Gosalia
Okay. And what about the optimization of the additional capacity and the peak optimization that we will be able to achieve..
Piyush Dhawan
So in terms of the optimization of the additional capacities, the Phase-1 is going to be an additional 36,000 tonnes where we foresee a close to 75% to 80% utilization. That would be the ideal number to foresee in the upcoming quarters because Phase-2 again is going to come back-in the second-half of the next financial year. For lead, about 75% to 80% capacity is quite reasonable and is definitely achievable or because it has to be again backed by sales, which is part of the order book in-progress. Coming to plastics, I mean there has been like Vijay said, there’s been quite a significant growth from about 600 to 650 tons last year for the nine months-to 3,000 metric tons almost this nine months. So there has been reasonable growth in the plastic side and of course, the balance three months we will be able to achieve the growth in the same number and of course, next speed, next year onwards, we’ll see a higher capacity utilization in plastics also.
When it comes to copper, numbers are again in terms of the overall volumes, it’s pretty low, which is two — about 81 tons last year and 250 tons this year. But these numbers have a very positive trajectory because again in the quarter-four, we are looking at doing a significant amount of copper as well in — if you look at the entire portfolio, what we have right now. So all are in-line in terms of the trajectory and in terms of the forecast that we panned out for this particular financial year. And of course, the next financial year also we’re looking at good, good numbers, positive numbers as we foresee.
Aadesh Gosalia
Okay. So, sir, the 36,000 tonnes that we are adding, can we assume from like the Q2 of FY ’26, we will be — like the production will be at par with the current capacity of 70% utilization or 75%.
K. Kumaravel
Yeah, for sure.
Aadesh Gosalia
Q2 will be a appropriate estimate or it can happen in Q1 also.
K. Kumaravel
Q1, of course, will be partial. I mean, we’re looking at, yeah, partially in Q1, but Q2 will be full-on. Q1 is partial only for the first month. I mean second and third months should be at an even 75% to 80% utilization.
Aadesh Gosalia
Okay. That’s great to hear. And sir, just one feedback from my end that as we are focusing on these other segments like plastic, copper in our revenue mix, it would be great if you can give the operational performance of these segments also in the presentation like we give with regards to lead.
K. Kumaravel
The point is well noted.
Piyush Dhawan
Point well noted. Yes.
Aadesh Gosalia
Thank you so much. I will fall-back in queue.
K. Kumaravel
Thank you.
Operator
Participants who wish to ask a question may press star N1. The next question is from the line of Siddharth from Kotak Institutional Equities. Please go-ahead.
Siddharth Mehrotra
Hi, sir. Good afternoon. Just a small question regarding the current structure of the different verticals. So I see that the revenue between — difference between your standalone and consolidated financials is around INR7 crores, while at PAT level, the difference is higher. So could you just tell me which segments are housed in standalone and which segments are housed in consolidated and whether the new capex, the Phase-1 and Phase-2 capex, are they housed in the standalone entity?
Balakrishnan Vijay
Yeah. So when you see on the EBITDA level, yes, see, we have a POC of standalone and within PFC or standalone, we have led division as well as copper division. These both divisions come under POCL standalone. When it comes to plastics, it is operating under separate subsidiary named POCL FutureTech Private Limited and we have one more subsidiary called Hastra Exito Engineering Private Limited. So predominantly, even though except for some regular expenses in Hasha, if you see the overall EBITDA numbers, there will be a slight difference. But where the difference is happening is in terms of depreciation in Hasha, Hasha, wherein we have an asset value of net block of about INR28 crores, which is predominantly building — land and building. So there the depreciation is around INR2.03 crores for nine months. And for FTEC as well, we have depreciation plus interest costs, which are both put together it’s about INR3.57 crores. This only has a drastic effect on your difference between your EBITDA and overall PAT.
Siddharth Mehrotra
Okay. So does that mean that our Phase-1 and Phase-2 expansions will be a part of the consolidated entity then, Harsha?
Piyush Dhawan
Okay, the Phase-1, Phase-2 for lead-in question will be part of the parent company, phase only. What — I mean, just to give you a heads-up, Harsha is the company that we had acquired for the last year. So that is what we were kind of highlighting earlier.
K. Kumaravel
We appeared with some building. So automatically, depreciation is to be charged since it is going concerned.
Siddharth Mehrotra
Yes. Okay, understood. And do we have any plans for merger because I understand these will obviously be used for our internal sort of projects now. So do we have a merger on the nor
K. Kumaravel
Will take at the appropriate time that we cannot give you anything on that now. Board has to take a call and appropriate. Definitely, Board will take a call. Definitely it is on the card.
Siddharth Mehrotra
Yeah, understood, sir. And just wanted to check, our EBITDA margins have been fairly stable. So we are not really seeing any sort of uptick, which we had guided for in our previous calls. So I mean, what are we doing to sort of get these to like higher levels? And how do we plan to achieve them? Any timeline?
Balakrishnan Vijay
Look at the EBITDA margins, what we’ve kind of indicated earlier, there will be a trajectory of growth because if you look at the Phase-1 operation that we’re implementing, there’s going to be a fair amount of operational efficiency coming out from the automation part of it and also the entire process as such is far more, I would say, technologically advanced than the status quo. So there will be a good amount of marginal growth there coming from the particular production and sales from the — from the new plant in lead. When it comes to the current operating plants, there has been a certain amount of change in fuel. So that part will also be reflecting in the upcoming quarters. And we’ve shown a guidance, I mean indicated in our projects in terms of our corporate report that we’ve — in the presentation that we have given and uploaded in the side that we’ll be transitioning from a 6% EBITDA margin on a blended level to an 8% over the next three to four years. So that is what we kind of foresee in the upcoming years and that will kind of start panning out transitionally, of course not immediately in a very stable way, but yeah, transitionally in the upcoming quarters.
Siddharth Mehrotra
Okay. So do we have any near-term guidance, maybe say the next year FY ’26, FY ’27 instead of like a four year, four years is a long-time.
Balakrishnan Vijay
If you look at the phases that we are implementing, indicatively the first phase will — first phase and the second phase will increase our EBITDA margins for the project of lead that we are going to start next month. So we see an EBITDA percent, of course improve to close to 6% plus levels in the upcoming quarters. And of course, the blended will increase because if you look at the other plants, they will continue to have these EBITDA levels till the time the automation is brought there. But then of course, there will — there will be a transaction growth trajectory from the current status quo to 6% levels.
Siddharth Mehrotra
Yeah. Okay, around 6% odd levels. Got it. And one small clarification. You had highlighted earlier in the opening remarks that this is the first-of-its-kind plant, this particular lead expansion. So like what is different about it? I was not able to understand that exactly. Is there any different technology or lead smelters different? Like I did not get back on.
Piyush Dhawan
So the technology remains the same. Basically in terms of the entire engineering approach, it is far ahead of what we do in terms of recycling now. So if you look at the overall structure of lead recycling, this is far more smart, lean and integrated. So there is a certain amount of benefit in manpower, a certain amount of benefit in terms of efficiency in fuel and in terms of the entire operational batch time, there is going to be a lot of savings. So that’s the reason why we had mentioned that it’s one of its kind and in the true sense, a state-of-the-art plan. Of course, once it starts and once it kind of starts giving out the product portfolio, then it will all of course reflected the numbers. So that is why we mentioned state-of-the art in a true sense, yeah.
Siddharth Mehrotra
Okay. Okay. Thanks a lot. Thank you.
Operator
Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Sanjay Parik from Soham Asset Managers. Please go-ahead.
Sanjay Parekh
Yeah. Thank you very much. So one end I just missed the proper volume, what would it be? What was it in this year and what is the expected 4th-quarter and what is it expected next year? I just missed that.
K. Kumaravel
So in terms of the volume for lead, we’ve got close to 67,500 — close to 68,000 numbers so-far, 500, yes. So if I look — if you look at the entire trajectory for Q4, we should be able to, of course, cross 90,000 levels for this year ended, which is — which is again a good number considering that we did close to 70,000 tons last year. So that is as far as lead is concerned. Even in plastics, the numbers which we’ve done so-far is about 3,000 tonnes and there is again the same trajectory for the year ended — for the financial year ended ’25 for plastics as well. And likewise in copper, we have kind of increased our numbers from, I mean very meager to 80 to 81 tons to close to 250 tons so-far and we again expect a good amount of growth in copper as we move ahead. I mean a higher number — much higher number in Q4. And likewise, given the presentation that we’ve already uploaded on the website for lead, our expansion plans are again on path. So given the Phase-1 implementation and the incremental increase to 168,000 tonnes in lead and by the end-of-the year to 204,000 tonnes in lead, there will be a very sharp, good amount of increase as far as production and sales is concerned, OLED from 90,000 levels to again a same growth pattern that we foresee and have highlighted in the presentations. And as far as copper is concerned, copper is again a very important portfolio for us. So we look at it again from a very important and a priority point-of-view after lead and that number will also significantly grow in the upcoming quarters. Likewise in plastics because plastics is something which is again complementary to lead because it’s again a byproduct that we get from the recycling of the lead batteries. So that number will be directly proportional in terms of the growth as we pan-out in lead.
Sanjay Parekh
Yeah. No, I just — I got this point. It’s very helpful. Only one thing is copper volumes next year. So what is the — I just missed the copper volumes next year and I just want to understand this is part of — this is separate processing, right? This is not a part of the lead plant that we are expanding. Copper processing will be separate, right, or it’s a part of this?
Piyush Dhawan
No, no, no, no, no. So we have in total four verticals status quo. We have lead copper, plastics and aluminum. Lead again is a very — these are hero products. So we have a priority set to, of course, given that we’ve already transitioned from 70,000 numbers to close to the numbers that we anticipate for this year. Copper is again a separate process. Principally, of course, it involves similar processes in terms of the smelting, in terms of different activities that we intend to do. But yes, it is a separate vertical and we intend to reach a very decent amount of portfolio number as far as copper is concerned.
Sanjay Parekh
Okay. So you’re saying volumes for for copper?
K. Kumaravel
Copper volumes for the full-year should be roughly between — we are expecting close to 3,000
Piyush Dhawan
700,000 metric ton is something which we are expecting this year should we asking. Next year should be around 2,500 to 3,000 metric ton is something which we are expecting.
Sanjay Parekh
Right. Can the plastic ramp-up will reduce the losses that we have in the — the future plastic the subsidiary, right?
Piyush Dhawan
True, true, yes. So there is — if you look at the P&L, there the material margin is positive, then of course, the operating margins are positive. Now when it comes to EBITDA, yes, we — because of different factors, there is a certain amount of gestation period that we have invested in the project to ensure that it pans out in the way that we intended to. So that will be a complete turnaround in the next financial year.
Sanjay Parekh
Sure, sure. And last one is, I just you know like our asset turns are good for this business. I mean, there’s hardly any appreciation. So let’s say you do 6%, 6.5%, 6% margins that you’re expecting next year and your asset turn, I was just doing some calculation can be around 4.5% if your projection for next year is hit. That means that, 24% 25% RCE is a possibility. So do you — I mean, what I’m trying to understand is, wouldn’t you target that sort of scenario, which is very possible from your capital employed and planning that you’re doing? Are you seeing that should not be achievable and it could be a little less. I mean, I’m just trying to understand the character of the business, not getting to a number.
K. Kumaravel
No, so this is a very exciting time for us because again, we are expanding in lead. Our focus on copper as a portfolio is extremely important for us because it again is a growing metal as far as we see in the overall market scenario. And plastics is again something which we are highly invested into in terms of time, right? So we are looking-forward to achieving the numbers that we’ve already highlighted in terms of the, the return on capital employed or the EBITDA or your — the asset turnover. So we are very positive about the growing scenarios that we kind of see in the upcoming quarters, in the upcoming years.
Sanjay Parekh
Sure, sure, sure. Sure. Last, just on — because things are volatile on raw-material, finished product, currencies and our margins are limited. So a little bit — I mean, we understood from you in earlier interaction, but if you can, how do you manage this risk in a way that this margins of five goes up to 6% and then eventually 7%. So a little bit on risk management, how do you handle that if you can
Piyush Dhawan
See, when it comes to risk management, the or the import, it’s of course divided into import, the procurement is divided into imports and the domestic procurement that we do. And we’ve done about 74% imports and 26% domestic for this particular quarter. So as far as our imports are concerned, that is again back-to-back hedged when it comes to the purchase and sales. So there is a risk management that has been there for a good period, so good amount of period in the last so many years.
Now when it comes to domestic procurement, that is something which has come out and started, I would say, exploding or I would say, expanding now because earlier, of course, there was a reservation when it came to domestic procurement. Now we see the domestic procurement in fact increase to good and certain amount of levels that can increase and that will increase our entire appetite in procurement as far as the entire procurement for lead is concerned. So given that EPR is transitioning, so when there is a decent amount of, I would say, delta when it comes to the landed cost for the cost of a lead scrap in India and versus the cost of domestic procurement. Of course, we know that the cash conversion cycle will improve given that the domestic procurement logistics is far more better than the imports. But given that there is a transition in terms of the local procurement and it is getting far more organized and farm than what we had kind of expected, there will be a transition of close to six months where you will see a volatility, but this volatility is not kind of more concerning to us because they’re looking at procuring larger number of batteries because that is what our intent is given that we are expanding our capacities and are looking at sales, of course, higher than what we’ve done so-far, like we have already crossed more than 95% of our total volumes since last year. And again, the trajectory is positive.
So when it comes to risk management, the domestic will kind of improve over the next three to six months, given that EPR is going to play a very important and significant role in bringing it down to good amount of levels that are with the imports.
K. Kumaravel
To add-on this sums of what Mr Piyush has already mentioned, in terms of currency risk, right now, since our import percentage has come down, we are typically a net exporter. So predominantly the currency risk is being managed through natural hedge and the — while the net part is being as you know, hedged through forward contracts. So over a period of last five years also, if you see, we have seen ups and downs in the markets as well as volatility is remaining. But if you see consistently, our EBITDA margins are at the same level. Be it currency risk or commodity risk, it has not affected our operations that you can see in the other income as well.
Sanjay Parekh
Sure, sure, sure. Also, one thing, just an observation that your — and in one of your slides, businesses Lance, you said your 10-year revenue and EBITDA growth is 15%, a 10-year track-record. I mean, I’m just saying a longer-term vision, you’ve said it for FY ’20 — FY 30%, 20% growth. So a question I have is, you know, this could be in this coming years based on your plan, the growth could be higher or it because based on the plan of volume this year should be a growth — higher-growth, not 20%, right, for ’26, but so this year — and then over a longer period, your plan is 20%. So 20% doesn’t mean that FY ’26 we’ll have 20% growth, right?
K. Kumaravel
Yeah, yeah. Yeah. That is exceptional year. ’26 due to some new expansion plans, the jerk in the volume will be there. So we are giving that average growth of that 15% to 20%. That doesn’t mean ’26 also the 20% growth. There’s a higher-volume will be there because of new implementation of the project.
Balakrishnan Vijay
Just to add, it is basically a CAGR over the next two years. Now we have panned out. Of course, there will be…
Sanjay Parekh
6% and ’27 also, right, because you would have further capacity expired benefits. So, 26 could be a higher-growth and then just an aspirationally you’re talking 20%, not that you’re saying every year we will be at 20%.
Balakrishnan Vijay
So aspiration — so by 20%, we mean a stable aspirational growth over the next five, six years. Of course, there will be things when there will be a 27, 25 24 and then of course there will be times when it will be an even 20. So that’s a futuristic number 20 what we have given. The next year, given our capacities will expand to 168,000 immediately and of course, 204,000, there will be a little bit of a steep curve in terms of growth, of course. But then yes, overall, there is going to be a 20% CAGR in the lead segment and the overall segment also, yeah.
Sanjay Parekh
Okay. Thank you. Thank you very much. Best wishes.
Operator
Participants who wish to ask a question may press star and one. The next question is from the line of Kush Gusrani from InCred Asset Management. Please go-ahead.
Khush Gosrani
Yeah. Hi, sir. Thank you for the opportunity. Just wanted to understand if our — over long-term, if our domestic sourcing increases, our margins should remain stable or improve from here, right?
Balakrishnan Vijay
So when it comes to our increase in domestic procurement, we just don’t see increase in domestic procurement standalone because given our capacities, our requirement for volumes will be in absolute terms growing in both imports and domestic. So yes, Reliance will be, of course equally divided because we are looking at numbers right now like we have 76 — 74, 26, we’re looking at an even 60-40% or 55% 45% because both will exponentially increase. And when it comes to margins in terms of what has transpired for this quarter, that is going to again transition to a very even level-playing number for domestic and the import with the arbitrage coming down and the number becoming equivalent to basically either the interest cost or basically attributing to the cash conversion cycle factors. That’s yeah.
Khush Gosrani
Sure. Got it, sir. And over next as your expansion happens, the margin growth would be restricted because the cost of these facilities would be coming, right?
Balakrishnan Vijay
I’m sorry, can you please repeat?
Khush Gosrani
So, sir, in terms of new commissioning post the trial end for the 36,000 tonnes. We could see it taking at least 1/4 or two quarters to stabilize the plant, right?
K. Kumaravel
1/4. See lead is something which is there predominantly from the beginning. So lead is not something which we have a learning curve to establish. So we see that getting — I mean, started from the first-quarter itself. Of course, the first month will may not have that kind of utilization. But yes, overall, we see that number coming up rightfully from the second-quarter…
Piyush Dhawan
From second-quarter onwards, that will come in-full soon. Maybe first-quarter is full period, maybe the would settle down in-full. Got it.
Khush Gosrani
Got it. Thank you. I’ll get back-in. Thank you.
Operator
Thank you. The next question is from the line of Amit from HG Hawa; Company. Please go-ahead.
Amit Agicha
Yeah, good afternoon, sir. Am I audible?
K. Kumaravel
Yeah, you are audible.
Amit Agicha
Thank you for the opportunity and congratulations to the team for the good set of numbers. Most of my questions have been answered. Just like the follow-up, like what are the management’s expectations for demand trends across domestic and exports markets in ’25 and ’26?
Piyush Dhawan
Thank you so much. So with regard to the demand-side or the sales side, so when it comes to lead, if you look at the overall market scenario and what has been projected in reports and what we also foresee given that we’ve been in the market for so long, both are in double-digit numbers. If you see the international market, that also shows a CAGR of a good amount of CAGR. And likewise in the domestic side also, we see a good amount of growth of certain verticals such as your automobile and which kind of forms the main part of the lead segment whom we cater to.
In addition to that, if you look at the telecom side, the database, the data centers increasing, even the electric vehicles increase, that all of that has a positive impact on the growth of lead as such. And that kind of plays out well for us both internationally and again internationally because of growth in such industries and domestically, primarily because, of course, the industries are also growing, but then given that the government initiatives kind of have a favorable impact on us, the procurement will also increase. That comes — that is as far as the procurement is concerned.
On the demand-side of it, internationally, given that these segments are growing, we also have a certain demand to cater to. So there has always been an order book that we are — we have filled up and again, we see the demand-side internationally grow at good levels because that is — and that was one of the rationals for the expansion for the 72,000 tonnes. On the domestic front also, if you look at all the verticals in terms of your batteries, different types, whether it is a telecom, tower, a battery or an automobile battery, all these have a growing trend. Even an EV requires a battery, even your data centers or your telecom, the railways, there is a positive trend of growth due to the industrialization, given that India as a country also is positioned to play a very important role in the Asia-Pacific or the Southeast Asian region. So that kind of plays out very well for us.
As far as copper is — I mean that is given the lead portfolio. When it comes to plastics, it more or less the supply-side is complementing because that kind of is coming out from the lead-acid battery. But when it comes to the demand-side of it, again, we cater primarily to the automobile to again the battery segment to again a lot of engineering and industrial plastics segment. And that also plays out very well for us because these are exciting times for recycling overall.
Copper as a metal also is high on-demand. And I mean, if you look at the overall resources, these are end-of-the day natural resources. And given that the non-ferrous metals that we are in are again declining in terms of if I may say so declining on a marginal basis from the primary route, the secondary route will of course have a growing trend. So that kind of helps us in the larger sense of the market.
Amit Agicha
Thank you, sir, for expanding in detail. And all the best for the future.
Piyush Dhawan
Thank you so much.
Operator
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask the question. The next question is from the line of Soham Arora from Summer Wealth Advisors. Please go-ahead.
Soham Arora
Congratulations for the good set of numbers. So I just have a small question regarding like you had mentioned earlier that there has been an increase in the domestic prices of — so now you are increasing the domestic procurement. So is there going to have a significant effect from that?
Balakrishnan Vijay
See, we look — we look at procurement from a weighted-average point-of-view. So when we say that we have imported 74% and the domestically procured 26%, both have a positive impact. When I — when we say that 26% is domestic and our footprint on the domestic map is improving, that should be taken on a note that our domestic footprint overall and procurement is improving.
Now when it comes to the prices, as we’ve mentioned earlier, there is a transition, there is a period which will overlap because there is an understanding which we have to impart in terms of the ETR commercials to the brand owners, to the OEs to commercialize it basically and bring it back closer to levels of the landed cost of imports. It is not going to happen overnight, but it is also not going to happen over one year. It is going to happen within three to six months because that is how do we see the overall market shaping up.
Soham Arora
Okay. And what is the utilization — utilization rate that you’re expecting for plastic and the other segments?
K. Kumaravel
Just one so in plastics, we’ve — last year, we’ve done close to, yeah, 50%. So last year — capacity utilization was about this year so this year, the capacity utilization is close to 50% and that will increase to Dutch would be increasing to the ideal mix of about 75% to 80% in the next financial year. That is as far as the plastic segment is concerned. As far as lead segment, we are at 68% status quo and we have again previously also mentioned that any percentage between 75% to 80 is very ideal for a lead vertical. As far as copper is concerned, yes, we are very positive on outlook when it comes to copper and we see that product portfolio develop and with the utilization levels coming to double-digit at least from next year onwards.
Soham Arora
Thank you, sir. Congratulations again.
K. Kumaravel
Thank you so much.
Operator
The next question is from the line of Rohit Ori from Progressive Shares PMS. Please go-ahead.
Rohit Ohri
Hi. Would you like to share any progress or developments related to the R&D facilities for the value-added products, maybe in the current portfolio or the one which are the other feasible products that you’re starting?
Piyush Dhawan
So as far as the R&D facilities are concerned, what we are looking at is, of course, lithium-ion is an important vertical that we look at because it is something which is going to eventually coming, which is going to eventually come up. When you look at the current status quo procurement, we look at the entire project from a point-of-view where it meets the procurement and to the end sales. So we also follow the entire circular concept of the entire operations. When we look at lithium-ion, as far as the operational process is concerned, one part of the mechanical process is completely aligned to our expectation, but the other part where you have to derive the element in a monopolymer form, for example, a lithium or a cobalt or a nickel or a manganese or phosphorus. So that is currently being derived in a compound form, whether it’s a carbonate or a sulfate. So that kind of doesn’t work-out well because then we cannot kind of give it back to the same industry. So that is where we are going to work on over the next two to three years — two years, say, because we expect the entire procurement cycle to begin effective 2027 calendar year.
As far as the other verticals are concerned, of course, given that we have already highlighted in a in the corporate report that we published about I believe last year. So the rubber is of course forming part of the R&D segment. And if you look at other verticals also, I mean the organic ones which are already there in our current portfolio to kind of expand and we look at adding value-added products. So say for example, we’re manufacturing lead alloys. So if we were to add more lead alloys or improve the way we manufacture the pure lead, then that kind of becomes a value-added product for us. Likewise, in plastics, a compound will be a value-added product. So eventually we see more of value-added products coming into the portfolio and of course, the R&D will continue to grow in other verticals as well. But specifically, it will be restricted to the non-ferrous segments only.,
Rohit Ohri
When do you think these efforts that the team is putting in will translate or start translating into probably 100, 200 to 300 bps kind of uptick in the EBITDA margins.
Piyush Dhawan
See, that’s a journey that we’ve undertaken and envisaged since we started the expansion. So if you look at the numbers previously been quite stable that way. Now the incremental growth or the basis-points increase like you’re mentioning, whether it’s incremental of 20%, 25% every quarter or a 50% a blended of 7% to 8% will happen over a period of time because that is the intent, that is what we have envisaged and that is something that we will have to undergo a journey as such to ensure that we have a portfolio, a strong portfolio where we have lead — where we have again plastics, where we have copper and aluminum and other verticals also playing an integral role in-kind of adding value addition. So that is a journey that we’ve undertaken for the next three to five years and that is where we are headed in the right direction.
Rohit Ohri
Okay. If you can share that I knew somewhere around 94%, 95% of the revenue comes from lead. By when do you think that this pie would get shifted to somewhere around 65% or 70% portfolio of lead.
Piyush Dhawan
Over the next three years, two to three years because in complementing to lead, our other vertical — our focus on other verticals have also been very clear. And once the priority of lead is completed this particular month as such, of course, Phase-2 is a given. Our priority on other non-ferrous metals will also be undertaken with immediate effect. So that way, the percentage will start also kind of — the dependency as such will start reducing over the next quarters. You will see that, of course, happening given that the numbers in plastics will kind of start having a positive impact and also copper growing in terms of the total top-line. So that way, we see that happening over the next three years, of course, but the transition will be on an incremental basis every quarter or a half yearly quarter for the next three years.
Rohit Ohri
Is it possible to share the milestone in the next maybe four quarters or maybe six quarters as such? This three years become slightly stretched. So your immediate targets, if you’d like to share over the next one and a half year or so for net reducing.
K. Kumaravel
Target to reduce from the 95% plus to 90% before the end of this financial year. Next year probably we bring down to 80% ‘25%, 26% then thereafter bring down to 70%. Every year 10% reduction.
Rohit Ohri
Okay. Okay. That makes sense, KK. That makes a lot of sense. My last question would be on any issues or any problems that we see because of BWMR, RCM or EPR coming into play, anything related to the GST or the taxes, which is slightly negative or one-off or exceptional item for us for the current year or the next year?
Balakrishnan Vijay
So everything kind of works out positive for us. I mean, all the government initiatives that have been undertaken, be it the BWMR of in terms of stringent guidelines. So the better the compliance is the stringent the compliance, the better for us. When it comes to the PWMR likewise, when it comes to EPR, again that’s a positive thing for us because we again are an important stakeholder in the ecosystem when it comes to recycling and manufacturing and giving it back to the circular economy or to the OE. And likewise, I mean GST also. So that again works out well in-kind of transitioning from the current status quo of the unorganized segment to the organized and bringing — bringing us in a level-playing field when it comes to procuring and selling. So we don’t see any of the factors becoming an issue rather those are solutions to the issues that we faced in the past.
Rohit Ohri
Nothing from the RCM side as well. Nothing from reverse.
Balakrishnan Vijay
RCM also. So in terms of batteries,
K. Kumaravel
That RCM is getting notified shortly. That’s what we are seeing.
Rohit Ohri
So, you think that these unorganized players, they will continue to be competition to you or they will be eliminated or do you think that you will form some complementary alliances with these unorganized players going-forward?
Piyush Dhawan
I think the latter one what you said, I mean the — so they will start complementing and also coming to the ecosystem, organized ecosystem. Elimination is not something which is the positive approach forward. I mean, bringing them aligned with an ecosystem which is good for the entire economy of India and also in recycling is what we foresee. So they will kind of also become part of the entire value chain proposition for us in terms of whether it is procurement of a battery or the other raw materials that goes into refining.
Rohit Ohri
Are you looking at acquiring some of these small entities and making it larger?
Piyush Dhawan
See, nothing as of now, I mean, that is something which will shape up in the upcoming quarters, years. So that is something which we cannot comment on right now, but then that is something but time will tell and how they kind of react to coming into the level — to the organized segment.
Rohit Ohri
Last question if KK can help. But when do you think that Phase-2 expansion will be achieved and by when do you think that you will be able to get the maximum utilization from the Phase-2 of expansion plan?
K. Kumaravel
So Phase-3 expansion, we are expecting in the second-quarter of next financial year, that is 2Q FY 2026. As Pirsh rightly said, first phase will start from April onwards and with achieve about 70 to 75 metric ton. And the second phase, yes, of course, we will start our thing in the Q2 and from September — and from October onwards, that also will — the capacity utilization will be around 70% to 75%. Overall, for full-year, you can see a 56,000 for next year-on a blended basis, the output should be around range of 50,000 to 55,55 metric ton tons of output in the TKD plant.
Rohit Ohri
Okay, team, thank you for answering my question. Thanks.
K. Kumaravel
Incremental 72,
Operator
Thank you. Ladies and gentlemen, this will be our last question. It’s from the line of Dixit from Systematix. Please go-ahead.
Shweta Dikshit
Hi, thank you again. My last question is, any thoughts on aluminum, whether what we’re looking at for FY ’26, I suppose FY ’25 that the segment was put on a pause, but how are we looking at it? What’s the future outlook for the segment? Any clarity there?
Piyush Dhawan
Yeah. So when it came to the aluminum, the die car series that we’ve started — that we started last year. I mean the start was good, but again, the business scenario kind of became very vulnerable because unfortunately hedging the diecast alloy, the alloy in question where aluminium typically forms about 80% to 85% of the entire alloy wasn’t possible. And the entire industry, in fact, I mean, just not to kind of benchmark us the entire industry as such, even significantly larger players in India got affected drastically. So it was judicious of pondioxides to kind of kind of take a step-back and put it in domincy.
Looking-forward for this year, we’re not kind of completely moving out from aluminium. We’re looking at it from a very different approach where there is a very strong possibility of kind of hedging both the supply-and-demand side of it. So we’re looking at an alternative arrangement in terms of the product portfolio, but aluminum will be a factor which will play a role in the entire portfolio because non-ferrous to us the entire portfolio analysis is quite important. And aluminum in the next — in the next financial year, you will kind of see aluminum numbers come in some form or the other for sure.
Shweta Dikshit
Thank you. Follow-up on that is, I mean, is this — are we still looking at evaluating the product portfolio for the aluminum segment or that is something that we still need to zero it down and then progress towards on that path?
Piyush Dhawan
No, we have done a revaluation, of course, but just to kind of — since a priority right now, like we’ve mentioned earlier, our priority now is to kind of ensure that lead gets implemented seamlessly and then we again do not a review, but just to kind of implement and execute what we planned in aluminium also. So that will take some amount of time, but then that is something which will be part of the journey for the next three years.
Shweta Dikshit
But it will — it is like affirmatively going to be contributing to the top-line this FY ’26 maybe?
Piyush Dhawan
Yes. Yes,
Shweta Dikshit
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today’s conference call. I now hand the conference over to the management for the closing comments.
K. Kumaravel
Thank you, everyone, for participating in this call. We trust we have addressed all your queries during this session. However, if there are any remaining questions, please feel free-to reach-out to us for Investor Relations team at the Go India Advisors. Once again, we extend our gratitude to all the participants for joining us today. Thank you and have a great day.
Operator
On behalf of Go India Advisors, LLP, that concludes this conference. Thank you for joining us and you may now disconnect your lines.