Pondy Oxides and Chemicals Ltd (BSE: 532626) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
Ashish Bansal — Managing Director
Balakrishnan Vijay — Chief Financial Officer
Analysts:
Sana kapoor — Analyst
Dheeraj Ram — Analyst
Rhinav Sagar Shah — Analyst
Vikras Singh — Analyst
Samisha — Analyst
Nihar Mehta — Analyst
Khush Gosrani — Analyst
Naman Parmar — Analyst
mittal Patel — Analyst
Kaushal Sharma — Analyst
Abhijit Mitra — Analyst
Sawman — Analyst
Shubham Thorat — Analyst
Utkar Sumaya — Analyst
Nikhil Agarwal — Analyst
Avish Chauhan — Analyst
Presentation:
operator
Ladies and gentlemen, good afternoon and welcome to the Pondy oxides and Chemicals Limited Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Sana kapoor from go india advices. Thank you. All over to you, Ms. Sana.
Sana kapoor — Analyst
Thank you. Swapnali.
Good afternoon everyone and welcome to Pondy oxides and Chemicals Limited earnings call to discuss Q3 and 9 month FY26 financial performance. Today we are joined by Mr. Ashish Bansal, Managing Director, Mr. K. Kumarawal, Director Finance and Company Secretary Mr. R.S. vaidyanathan, Executive Director Mr. Vijay Balakrishnan, Chief Financial Officer, Administrative and Mr. Pratik Gupta, Associate Vice President Operations. 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. Ashish Bansal to take us through the company’s business outlook and financial highlights subsequent to which we will open the floor for Q.
Thank you. And over to you sir.
Ashish Bansal — Managing Director
Thank you Sana. Good afternoon everyone and thank you for joining us for POCL’s Q3 and 9 month FY26 earnings call. I hope you’ve had the opportunity to go through our financial disclosures available on the Exchanges. I will walk you through the key strategic updates, operational progress and financial performance followed by a Q and a session. I’m delighted to report that POCL has delivered its strongest ever quarterly and nine month performance driven by disciplined execution and operational efficiency. On a nine month basis, revenue EBITDA and PAT increased by 33%, 96% and 114% year on year respectively supported by substantial growth in both production and sales volumes across our lead and copper business.
I would want to mention that the India EU trade deal serves as a structural catalyst for pocl enhancing our global price competitiveness, securing long term demand visibility and solidifying our status as an organized compliant leader capable of meeting Europe’s rigorous sustainability standards. On the domestic front, the regulatory environment continues to be supportive for organized recyclers. With stronger enforcement of BWMR and EPR frameworks, enhancing accountability and producers recyclers and collection agencies. This has led to more efficient collection mechanisms, reduced leakages to the unorganized sector and improved traceability across the value chain. These measures have materially strengthened domestic scrap availability, enabling higher local sourcing.
Before delving into the numbers, I’d like to begin with key strategic developments that are shaping up our growth journey. Our Capacity Expansion Update we are making steady progress on our capacity expansion roadmap. The second phase of lead expansion project, adding 36,000 metric tons per annum, was commissioned and became operational in December 2025. As a result, the total lead capacity has increased from 132,000 metric tons per annum in FY25 to 2,000 4,000 metric tons per annum, representing an increase of over 50%. The lead capacities are expected to ramp up to 70% in the coming quarters. Our copper recycling capacity is set to double from 6,000 metric tons per annum to 12,000 metric tons per annum by the end of January 2026.
During nine months FY26 POCL invested around INR 25 crores in capital expenditure and expects to deploy additional INR 35 crores in the last quarter of FY26. POCL’s board has approved the amalgamation of its wholly owned subsidiary POCL Future Tech into the parent company subject to regulatory approvals. The merger strengthens vertical integration in plastics recycling, improves cost efficiency and cash flow management and creates long term value for POSL without any equity dilution or cash outflow. We have shifted POSL futuretech from the lease premises to the Turvaikandike facility during the quarter. The facility is now operational and production has commenced in the facility.
Coming to our operational performance, the Procurement mix for nine month period comprised approximately 70%, 59% and 100% imports for lead, plastics and copper. There is a significant increase in sales of copper by 15 times on nine month basis to INR 296 crores. The production of lead has increased by 23% year on year to 83,746 metric tonnes on a nine month basis and 57% year on year and 26% quarter on quarter to 33,271 metric tonnes on a quarterly basis. EBITDA per tonne of lead increased significantly by 46% year on year to INR 18,086 per tonne on a nine month basis by 39% and year on year to INR 17,427 tons rs17,427 per ton on a quarterly basis.
Moving to financial performance, I would like to reiterate that POCL has continued to deliver consistent performance resulting in its highest ever quarterly and nine month revenue, EBITDA and PACT. On a quarterly basis revenue increased to INR 776 crore up 22% quarter on quarter and 55% year on year. On a nine month basis revenue stood at INR 2007 crores reflecting a growth of 33%. This growth was driven by improved capacity utilization and higher sales volumes across both lead and copper segments. Export contributed 67% of total revenue reflecting POCL’s growing global presence and customer confidence. On a nine month basis, value added products accounted for 65% of lead segment revenue supporting the company’s long term target of achieving over 60% contribution from value added products.
EBITDA increased by 122% year on year to 59 crores on a quarterly basis and by 96% year on year to INR 157 crores. On a nine month basis, EBITDA margins remained strong at over 7% plus compared to over 5% in nine months. FY25 PAT more than doubled on both quarterly and nine month basis. On a quarterly basis PAT increased by 148% year on year to INR 38 crore while on a nine month basis PAT rose by 114% to INR 101 crores on nine month FY26 PAT margins improved by to 5% up from over 3% in nine month FY 2025.
On a consolidated basis POSL reported strong performance with revenue EBITDA and pat growing by 32%, 94%, 128% year on year respectively on a nine month basis. On a quarterly basis these metrics increased by 53%, 119% and 167% year on year respectively. In conclusion, TOCL remains aligned with its target 2030 vision supported by a clear roadmap focused on value creation and sustainable growth. The company continues to scale its lead and copper capacities while expanding into adjacent non ferrous segments with an objective of delivering 20% plus volume growth and 20% plus CAGR in revenue and profitability. Growth will be supported by margin improvement with a focus on maintaining ebitda margins above 8% ROCE above 20% alongside scale and strategy emphasis.
Operational efficiency through innovation and modernization with a target of over 60% revenue contribution from value added products and 20% plus reduction in energy consumption backed by a net cash Balance sheet, disciplined execution, a supportive regulatory environment, extensive land bank, experienced leadership and stakeholder support. PSL is well positioned for long term sustainable growth. That concludes my update. I now like to open the floor for questions. Thank you.
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 and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may Press Star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Dheeraj Ram from BNK Securities. Please go ahead.
Dheeraj Ram
Hi sir. Thank you for taking up my question. And congratulations for a great set of numbers. This question is based on. Since you’re ramping up your capacities in copper which have a little lesser EBITDA margin compared to lead for 27 and 28. So how do you see the EBITDA margin guidance that you’ve given of 8% on consolidated basis?
Ashish Bansal
Hi Dheeraj. Thank you for your question. We have always guided our margins to be in the range of 7 to 8% EBITDA and these will continue as copper increases. Its we are increasing the copper capacity as well, which is currently at a lower EBITDA range. But we are also, we will also be adding on products on copper as explained in our earlier calls, which will also have a higher margin. So the blended margins will remain in the range of 7 to 8%.
Dheeraj Ram
Sir, what could be the range of. Copper EBITDA per ton including once your 6,000 tons is expected to commence?
Ashish Bansal
I will not be able to give you specifics on those numbers right now. But we’ll keep you updated as we announce the products.
Dheeraj Ram
Got it, sir. Last question is what is the volume. Sales of copper during Q3?
Ashish Bansal
Dheeraj, the volume sales for copper is about 1235 metric tons for this quarter.
Dheeraj Ram
Okay. Okay. And do we think that this EBITDA upper ton going to continue for copper that we have clogged in 3Q or will it improve.
Ashish Bansal
Right now for the recycling it is in the range of 35,000 rupees per second. I’ll put it this way. The copper, as you’re noticing, the whole copper market is going through extremely volatile phase. And when any metal which Almost close to 40, 45% just shoots up in a vertical manner, overall industry, it takes a little bit of time and momentum for it to absorb these kind of price increases and which have to flow down eventually to the end consumers. So there is always a slight margin shrink. And once these things start realigning and people start accepting these higher elevated prices the margins start falling back into the regular ranges. So that is the whole transitional period which again should be sustainable.
Dheeraj Ram
Got. Thank you. Congratulations for the good result again.
Ashish Bansal
Thank you Dhiraj.
operator
Thank you. We have the next question from the Rhinav Sagar Shah from Spark Capital. Please go ahead.
Rhinav Sagar Shah
Yeah. First of all congratulations. Congratulations sir for excellent set of numbers. Now my first question was related to our utilization. Actually can you tell me what is it? What is the utilization of the 52,000 tons per annum that you commissioned in Q1 and the one black 32 which. Which was the old capacity. So what is the capacity utilization of 1 lakh 68 thousand tons right now as of this 9 months? FY26.
Balakrishnan Vijay
Sagar, this is Vijay. See overall if you see the lead capacity utilization for this nine month standard is about 70 percentage. And for this quarter alone it is about 79.2 percentage. For copper for nine months it’s about 74. And for this quarter loans is about 86.2 percentage on an overall basis for this quarter.
Rhinav Sagar Shah
Okay, so basically we are at the peak of the capacity as regards the 32,000 tons per annum which is recently commissioned, right?
Balakrishnan Vijay
36,000. But you were able to get those capacities only the last month of previous quarter.
Rhinav Sagar Shah
Okay, okay, okay, okay. So basically. Okay, so now the growth will be largely led by the new capacity. The 36000 tons which is just recently commissioned.
Ashish Bansal
More or less, yes.
Rhinav Sagar Shah
Now coming on to this plastics one. The plastics one. Actually I see our capacity utilization coming down to almost 31%. And I understand that you are shifting your capacity to premises. So. But as far as the demand is concerned I wanted to understand that. What exactly are we seeing there? How is the demand shaping up from which industries and how are you placed up as FY27, FY28 is concerned and you are not. And I think so that is the reason you are not raising capacity also in that particular segment.
Ashish Bansal
Sagar, regarding if you see in the past also our quarterly capacities or the sales in terms of copper is about approximately 850 to 900 metric tons per quarter. But right now we see the demand very soft. But going forward, you know the 800 metric tons probably increased to 1,000 in the coming quarters. So that is what our plan does. Plan is we will be slowly looking at, you know, trying to build those volumes. But currently what we saw in the last quarter, the whole market demand was pretty much on the Softer side along with softer prices and offtakes as well.
Rhinav Sagar Shah
Okay. So this market was largely led by automobile or non automotive?
Ashish Bansal
Sir, it is a mix of both automotive and non automotive. And yeah, and also largely a little bit led by you know the primary material price also coming down quite a bit in the domestic market.
Rhinav Sagar Shah
Okay. Now my last question sir was related to Mundra. Most importantly which we are actually waiting for. And I saw your utilization proceeds also. You hardly have are left with around 13 crores of of money left in from your QIP proceeds as well. And also from your pref allotment. Because largely you have spent on your the new capacity. So I wanted an updated. What exactly when exactly are you planning the expansion in Mundra PLA. Because it’s been almost two years since you have purchased that land. 123 acres. So how’s the. What’s the progress in that land? What are you eyeing? What kind of plants are we getting there? Have you built the entire ecosystem? It’s near to the port also.
So what is the actually thought process behind that expansion? Because that is will be the major growth driver for POC if I’m not wrong in the years to come.
Ashish Bansal
So Sagar, currently as indicated earlier as well we will be looking into mundra Only in 2027. That is now once our copper expansions are completed by this last quarter of 2026. 27 and post that the Mundra land capacity will be listing. Definitely we’ll be looking at the existing businesses that we have and also some fresh business. But currently our thought process is to have a little more capacity of our existing copper business in Mundra. And like you said that having an advantage and also having better reachability and freights towards the European and Middle Eastern markets that will also serve as a driver for us to enter those markets.
Rhinav Sagar Shah
So basically are you referring to FY27 or calendar year 27?
Ashish Bansal
Sir, I’m referring to second half of calendar year 2027. Calendar year for financial year for 27. Because the thing is in the free cash flow also. Yeah. You’re. You’re going to generate over 100 crores of free cash flow this year and also correspondingly next year. So I think you have lot of cash left also. Yeah. So I mean even though we are using. We have used quite a bit of our QIP funds all of those but every year we are generating a cash surplus as well. So these will. These are going back into investments for our expansions and all of those.
Rhinav Sagar Shah
Okay. So first of all so right now after this your major focus will be towards the forward integration of the copper segment. The products that you are eyeing actually. Which will be margin accretive if I’m not wrong. Right?
Ashish Bansal
That’s true. That’s right.
Rhinav Sagar Shah
Okay. Okay. Sure. Thank you. Thank you so much and all the messages.
operator
Thank you. A reminder to all the participants, you may press star and one to ask question. We have the next question from the line of Vikras Singh from ICIC Securities. Please go ahead.
Vikras Singh
Good afternoon, sir. Thank you for the opportunity and congratulation on very good set of numbers. Sir, My first question pertains to the sourcing. Given the commodity prices are kind of a pretty volatile and actually moving in upward direction. Are we experiencing any problem with the sourcing because.
Ashish Bansal
Commodity prices are moving up vertically. In fact, sourcing tends to become a little better because everybody wants to get rid of the scrap that’s available to them and they’re getting a higher price. So that gives actually technically a better scenario to source more scrap.
Vikras Singh
So as of now, no such problem we have faced in terms of sourcing. Because sometimes the holdings kicks in. People think that they would get a better pricing if they sell at a later stage. So nothing that sort of is happening. Right.
Ashish Bansal
You see what happens is every time now what will happen drastically price drops people like I explained to Dheeraj in the initial part of the call. Also when there’s a sudden rise or a sudden drop, market pauses a bit to re understand and realign and then it gets back into the whole cycle. How long can anybody hold a material? I mean pockets are not continuously deep enough to keep holding material or keep waiting for the high or low side of it. And this is a trade so trade cycle has to resume. So definitely sometimes there is a pause in between and then the whole cycle starts resuming back again.
Vikras Singh
Notice that. So my second question pertains to our lead EBITDA per kilogram. If you could share that. And also given that the prices are moving in copper as well as other segments, shall we assume that since this scrap is as a certain percentage basis are EBITDA per kg in all these three segment is going to go up in the subsequent quarters. Irrespective of the price movements. Our EBITDA returns will be in the. For a lead will be in the range of. As we rightly. In the past we said that 15,000 to 17,500 is something what we have. It’s a sustainable EBITDA per ton irrespective of the price movement. Even for copper as well. For last quarter the per kg increases about 100 rupees per kg. That is why you can see a slight drop in your EBITDA percentage. But in terms of per ton basis the amount remains at 35,000 plus which we have already informed.
Balakrishnan Vijay
Noted. So we are not baking in any improvement in overall per kg basis. Right.
Vikras Singh
The more the value addition in terms of, as Ms. Ashish said, in terms of copper, the EBITDA per metric ton will increase once the forward integration happens. Which is, which we will do in the next financial year coming from coming financial year notice. That’s all for myself.
Ashish Bansal
Thank you.
operator
Thank you. We have the next question from the line of Samisha from Nuamaval. Please go ahead.
Samisha
Yeah. Hi sir. Congratulations on a good set of numbers. My question was regarding corpus capacity. You said for this quarter we’ve done 12, 1 2, 35 metric per metric tons for copper. So how much would be for nine months, sir?
Ashish Bansal
Nine months?
Samisha
Nine months is the overall volume is about 3,308 metric tons of. Out of which, you know, 6,000 is the overall capacity. So if you take on a, you know, average basis then it is. The utilization is about 74 percentage pro databases. Okay. And how much, how much production can we expect for the coming year? FY27.
Ashish Bansal
FY27, we are targeting a minimum of 12,000 metric tons, but would be definitely higher than that.
Samisha
Sir. You will be doubling your capacity to 12,000 tons for FY27 if I’m not mistaken. And then the capacity utilization would, you’re saying would be 100% for 12 for.
Ashish Bansal
FY27 and 12,000 through, through the year. Also there are other capacities that are getting added. So that will be a continual process. As of now in this last quarter, the capacity that we’re adding is relating to 12,000 will increase from 6 to 10.
Samisha
Would you be able to shed some light on how much capacity would be added in FY27 for copper?
Ashish Bansal
We are, we will be updating those in the future, you know, announcements that we have.
Samisha
Sure. So thank you. Thank you so much for this. So that’s all from my side.
Ashish Bansal
Thank you.
operator
Thank you. We have the next question from the line of Nihar Mehta from Bay Capital. Please go ahead.
Nihar Mehta
Hello. Hello.
Ashish Bansal
Yes, you’re audible.
Nihar Mehta
Yeah. Yes, Congratulations on good set of numbers. I just had a couple of questions. Your balance sheet size has significantly increased. If I compare as in December end. So what has led to the expansion of balance sheet size? There is an increase in the current assets. Typically, you know, inventory has increased by about 75 crores. And in terms of there are some refunds that are expected from the government authorities which is in the tune of about 75 to 80 crores. So this has led to increase in our balance sheet numbers. What is the defund nature of refunds from government?
Balakrishnan Vijay
This is regarding export with payment of duty wherein we procure domestically the igst part of it we claim as a refund from the government after paying the duty.
Nihar Mehta
Understood. Also Vijay sir, what’s the cash on. The books as on December end it’s about 35 crores. And my second question is related to the employee cost. Now if I see the size of the business has significantly increased but Q On QR employee cost is on a downward trajectory. So what exactly is the reason for this downward trajectory?
Balakrishnan Vijay
It is not downward the same actually in the second quarter we paid increment for the employees with arrears along with incentives. Also we paid for the last year performance which is accounted on paid basis. So because of that second quarter employee cost is comparatively higher than the third quarter employee cost.
Nihar Mehta
Understood. Thank you. That’s it. From my side. All the best.
operator
Thank you. We have the next question from the line of Khush Gosrani from Goji pms. Please go ahead.
Khush Gosrani
Yeah, hi, I’m audible Congratulations on the good set of numbers. Just wanted to understand your view on the aluminium side of the business. What are the numbers that we have done over nine months and how should we look at going forward?
Ashish Bansal
Aluminium is not a segment that we are technically concentrating on specifically so there are not much of numbers that we are technically doing. On the aluminum side it is a very small number which is about 7 to 10 crores. But that typically is not by doing the aluminium business but actually when you do a lot of scrap you do generate some few other metals. So that gets just added on. But typically there’s no concentration as of now on aluminium at all.
Khush Gosrani
Got it sir. And how should we look at lead? Because you know capacity expansions have been announced by two, three players now. So is the demand still there? How should we look at the segment for next two, three years?
Ashish Bansal
So the demand is, I will not say the demand is explosive but demand is consistent. For India we are looking at anywhere between 5, 6% of incremental demand and also the demand that comes from your regular replacement demand of existing batteries and vehicles. So and internationally about 2 to 3% is the growth.
Khush Gosrani
Got it. And by FY28 what should be our lead capacity with all the expansions in that you have announced?
Ashish Bansal
Now as of now our capacity is 2 lakh 4000 tons. Once we are doing any further expansion, we’ll keep. We’ll make an announcement and keep you updated. It.
Khush Gosrani
Got it, Sir. And in Q4 you could see some margin pressure with the copper plant also coming up now. Or it would be in Q1, the ramp of cost coming up.
Ashish Bansal
Well, the margins are pretty similar. I mean there was no margin pressure. It was more or less in similar lines of guidance of 7 to 8% and we’ve achieved that.
Khush Gosrani
Got it, Got it, got it. Okay, I’ll get it back in the queue. Thank you.
operator
Thank you. We have the next question from the line of Naman Parmar from Nivesha Investments. Please go ahead.
Naman Parmar
Yeah. Good afternoon sir. Thank you so much for the opportunity. So firstly I just wanted to understand what was the reason for decreasing the gross margin in the current quarter compared to the previous quarter.
Balakrishnan Vijay
I will tell this as two pronged. One is that if you see our procurement mix last, you know, last quarter is about 85% imports and 15%, you know, domestic. And this quarter it has significantly increased to, you know, imports is about 70% and you know, domestic is about 30%. So there is a shift in the procurement mix. Apart from that, the value added component which was typically 70% this quarter it has reduced to, you know, 55 percentage. That is also one of the major reason why your margin margins have dropped. But despite these two, you know, despite these two factors, the EBITDA margin is still at seven to.
We have delivered the EBITDA margin seven, seven to seven and a half percentage. So that is what we have already, you know, on a sustainable basis you’ll be able to do it.
Naman Parmar
So you expect that the 13, 14% that you used to do in the previous, you will be able to catch up that particular margin the coming quarters or years. We have not done 1314 material margin. Material margin last quarter was of course 14.6%. But that also depends upon your product mix, your procurement mix. This is a commercial decision, sir. So it will. But overall if you see due to volumes, you are able to get the advantage of our fixed cost. So that is why we are able. And apart from that you have operational efficiencies. Our new plant is in line. We have, you know, phase one and phase two is also live. So all put together we’ll be, we are confident that we’ll be able to deliver EBITDA margins in the range of sound to 7.5% in lead.
And absolute value of the profitability is increasing considerably. Over the period.
Balakrishnan Vijay
Okay, okay, understood. Secondly, on the press release that you have mentioned about the provision of the mark to market of 7.28 crore. I think it’s related to any derivative contract that you have been hedging for. So just wanted to understand on the hedging part of your copper basically. So how is the whole contract you serving it?
Naman Parmar
You. You used to fully hedge your copper sizes or what is your strategy on that side?
Ashish Bansal
Yeah, we used to hedge our copper, this thing. And since the volatility is increasing, 100% of our copper volumes are hedged. And if you see from the last quarter to this quarter there’s consistently incremental volume. So that mark to market difference of incremental volume is what is reflected back, which is currently a moving position as the sales happen, those profitability keep coming in and the next positions keep coming in. So when there’s increase in volume that much difference and the market has gone further above that. So there is a mark to market difference. It is a point of time figure as on 31st of December 2025.
Balakrishnan Vijay
Yeah. So in previous year quarter there was any such provision as of now or it was the first time that you have been making the provision for the. Market Every quarter some provision we are making. But it’s this time it’s amount will vary. This time it is a larger thing since the copper movement has been pretty vertical and also a little bit mark to market on the rupee side as well.
Naman Parmar
Okay, understood. And lastly I just wanted to understand on the EBITDA per case. EBITDA per turn for the late. Specifically if we compare with the other players, they are doing very wonderfully high, about 20,000 per turn they are able to. So any thesis that we can also achieve on that side, given that we have a very good capability and value added products kicks in significantly.
Balakrishnan Vijay
We will. We will not be able to comment on other peers, sir. So see our thing is very simple. Whatever we have said, the range will be in the range of the ton will be in the range of 15,000, 15,000 rupees to 17,500 rupees. And in fact the value additional component increases probably it will increase by thousand rupees, 1,500 rupees extra. So that all depends once again in reiterating it depends upon your product mix, procurement, everything determines the number overall like. You promise, 7 to 8% which will definitely be maintained.
Naman Parmar
Okay. Yeah, okay, understood. Thank you so much.
operator
A reminder to all, you may press star and one to ask a question. We have the next question. From the line of mittal Patel from 361AMC. Please go ahead.
mittal Patel
Yeah, thank you for taking my question. So just on the lead EBITDA per ton for this quarter, you know, I understand that the new capacity had a lower share of value add products, but are we going to sort of. Is that the only reason why the EBITDA per ton this quarter was lower and do we expect this value add share to go back to Q2 levels and we should be around 19,000 rupees per tonne mark for Q4?
Ashish Bansal
There are two reasons. Definitely yes. Because the value added product mix was slightly lower. That definitely did bring down a little bit of the margins. Apart from that, we had increased little bit of our domestic procurement on raw material as we want to spend slowly start sustaining our domestic procurement footprint where the current domestic prices were a little bit on the sharper side. And that also led to reduction in the EBITDA per tonne. Going forward, we are looking at this should be stabilized and should be in better numbers and should be able to achieve the higher side again.
mittal Patel
Okay. And just on the fact that this mark to market, I think the gentleman earlier asked this question so here. So if our sales, for example, if the sales in Q4 are up substantially for copper as well on volume basis and the prices stay around similar levels or higher, then this reversal will not happen in Q4. It will take some time.
Ashish Bansal
It’s not that specific manner the way you’re looking at that every time there’ll be a volume increase. It is a point in time when you hedge a particular, you know, quantum of metal and then from there where the market moves. And if this, when the sales happen, that gets reversed. So it is a point in time moving figure. It’s not necessarily that every time the volume increases, there will be a huge negative mark to market.
mittal Patel
Got it. Okay. Okay. And then let’s say this reverses, then this will show up in what line item will they show up in again.
Ashish Bansal
Same mark to market only.
mittal Patel
Okay. Okay. But this is currently bringing down the profitability. Right. So it will be sort of getting.
Ashish Bansal
So the profitability will get added up.
mittal Patel
Yeah, yeah. This is accounting standard requirements. That is not in our hand, that is to be accounted like that only.
Ashish Bansal
But the moment it is converted, it’s not in the. It’s a. I mean either it’s a part of your sale or it’s a part of your costing.
mittal Patel
Yeah. Casting or material costing or mtf.
Ashish Bansal
That’s all.
mittal Patel
And lastly, I think in your initial remarks you mentioned that the EU FDA agreement is positive for you. I understand there is a lot of sourcing and selling that goes from Europe and into Europe. So considering, you know, what are the sort of duties that we are paying currently and what could be the benefit in terms of both procurement and selling.
Ashish Bansal
For our business, what happens is the whole ecosystem starts opening up. Right now when you imported from India there were a lot of, there are customers duties and other, I mean other import duties that they have going forward. On metals specifically, they have indicated they will make it zero. So that opens up as a very good and competitive market for Indian material to start flowing into eu. And we definitely already have approvals with quite a few of the customers. But it was only optimistic business when we were able to sell to them. But once These agreements and FTAs are in place, this would turn back into a sustainable long term business.
Apart from this, this also gives us one more good reason to look into the Mundra side of it because operations from there towards the European side and the Middle Eastern side become much more feasible.
mittal Patel
And on the procurement side, when you import scrap batteries, is that something that is.
Ashish Bansal
Currently you can’t import batteries from EU region because they’re not allowed to be exported to India from eu. But hoping that with these, you know, because they do not have the recycling capacity and they’re piling up the battery, hoping with these agreements maybe some EPS or something could be done with them and that could be another opportunity of sourcing. So that we’ll have to wait and see how it translates within a few coming months.
mittal Patel
Got it, got it, got it. Great, thank you. Thank you and best of luck for the coming quarter.
Ashish Bansal
Thank you.
operator
Thank you. We have the next question from the line of Kaushal Sharma from Equinox Capital Venture Private Limited. Please go ahead.
Kaushal Sharma
Yeah, hi sir. Am I audible?
Ashish Bansal
Yes sir.
Kaushal Sharma
Yeah. Congratulations for good set of numbers. Sir, most of my question has been answered this last question on the working capital cycle. So how is our working capital cycle going forward considering current expansion and what is sustainable inventory and receivable days in our business?
Balakrishnan Vijay
See quarter on quarter working capital cycle has been, we are seeing, we have set our own targets and for the last quarter is about 47 days. This is including lead as well as copper. So we are seeing a substantial reduction on the working capital cycle and moving forward it is, you know, expected to sustain at this level. And for as for inventory, 200, 230 to 250 crores will be a number which we can expect in the by year end.
Kaushal Sharma
And what about receivable date, sir?
Ashish Bansal
Pardon?
Kaushal Sharma
Receivable date.
Balakrishnan Vijay
Right now it is about 15 days.
Kaushal Sharma
Okay. And since this last question on our copper side, could you please guide what is the current EBITDA margin per ton on our current production level?
Balakrishnan Vijay
The current for nine months it is about 34,361. For this particular quarter is about 35,325 rupees. This is our beta money, right? Yes.
Kaushal Sharma
Thank you very much for answering questions.
Ashish Bansal
Thank you, sir.
operator
Ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants in this conference call, we request you to kindly limit your questions to two per participant. If you have a follow up question, please rejoin the queue. Again, we have the next question from the line of Abhijit Mitra from Earnest Alpha Investment Management. Please go ahead.
Abhijit Mitra
Yeah, thanks for taking my question. So just to understand, you know, the, the nature of your value added product sales that you report. So typically it would mostly be OEM sales, right?
Ashish Bansal
Yes, that’s right.
Abhijit Mitra
And you know this new capacity which has come up is essentially, you know, 1 lakh 32 going to 2 04. I mean to sort of get OEM sales from this capacity is how long will it take you feel? I mean that, I mean there should be a timeline to sort of place incremental volumes to OEMs coming out of this line. Right. So I mean do you also think along this line and there would be a period, right, say 1/4, 2/4, 3/4.
Ashish Bansal
So basically for this in the first place, which is 36,000 tons which is already commissioned for that, the variated products orders have already been secured and those contracts start now, starting Jan. Feb. March for this financial year. And we have some smaller options to take up little more volume. But I will not say 100% of that balance, 36,000 tonnes volume in terms of products. But definitely since you’re already approved with them, we can try and expect and push for a little bit of volume increase on the value added part as well.
Abhijit Mitra
Got it. And the incremental volumes that we are seeing quarter over quarter in Q3. So we are seeing almost in terms of sales, 22,000 tons of additional sales coming in quarter on quarter in Q3 over Q2. So large part of that would not be OEM sales, right? Because those waters wouldn’t have gone to OEMs yet.
Ashish Bansal
No, quite a bit of that is to the OEMs as well. But it would be sometimes we route them through another channel that we have as well. So I’ll say about out of that incremental sales, almost 60, 65% is to.
Abhijit Mitra
The OEMs, it’s still 60. Okay, but, but if you’re, you know, routing it, say through Trapegura or other traders, then you will not get the volumes. Right.
Ashish Bansal
We don’t get the margin.
Abhijit Mitra
Sorry, not volumes. You will not get the margins. Equivalent margin.
Ashish Bansal
It doesn’t work that way. Our contracts are little differently done and not like our industry peers. And we have a direct, you know, I will say a direct contract where we route it through one or two of these traders and we have certain pricing benefits. We have some other options that we work around.
Abhijit Mitra
Okay. Lastly, just to end this thought process, Q4 over Q3, volumes will go up. Will value added go up or you feel value added will sort of stay the same with those higher volumes, value.
Ashish Bansal
Added will go up. We already secured a decent amount of volume orders.
Abhijit Mitra
Okay. That, that means that there can be an uptick on the margin side. Everything else remaining equal.
Ashish Bansal
We will maintain the guidance that we have given on the margins.
Abhijit Mitra
Okay, got it, got it. Thanks. That’s all from my side. Wish you all the best.
Ashish Bansal
Thank you, sir.
operator
Thank you. We have the next question from the line of Sawman from Lucky Investments. Please go ahead.
Sawman
I just want to understand the implications of a rising or a falling copper market on our EBITDA per ton and also on our balance sheet. From that perspective, if there is either a vertical rise or a vertical fall in copper.
Ashish Bansal
Could you repeat the question? It’s. It is a little unclear. Sorry.
Sawman
Is it better now?
Ashish Bansal
A little bit, yes, please.
Sawman
Okay, so, yeah, I wanted to understand what would be the implications of any volatility on the in copper prices from both the P L perspective. I think this has been alluded to, but if you could just repeat for, for my better understanding and also from a balance sheet perspective.
Ashish Bansal
So basically in terms of balance sheets, inventory is always at the purchase price. I mean, so it is not this thing. And the differential, whenever you buy, there is a hedge position created and the hedge position is what moves and that’s where the mark to market comes in. So basically the implied volatility does not change our, you know, in terms of our procurement ways or the way the margin determines. Like I explained, suddenly when there’s a vertical push up to this kind of extreme extent, which is, I would say this is like a historical time when in the history of copper, this is the kind of run up that’s happened in such a short while.
At that point in time, the market, like I said, pauses a little bit. Resets the prices. At that point in time there is a slight panic. Sometimes the deltas shrink a bit, but again eventually come back to the normal working position. And also lot of consumers, you have to understand that everybody does not have free working capital where they can absorb the 40% rise in working capital requirement and all of those. So they also start operating at a little lesser volumes and quantity. So that’s the whole shift that happens. Then eventually in two, three, six months, one or two quarters down the line, everything resets and restarts again.
So that’s how the whole cycle works.
Sawman
Okay, yeah, yeah, go ahead.
Balakrishnan Vijay
Sorry. In terms of EBITDA pattern, irrespective of prices, we still maintain a 35000 to 40000 levels. This is what we have made.
Sawman
Okay, now follow up on that. If your EBITDA per ton is going to stay sort of constant because of the hedging policy as copper prices increase, that means a higher receivable cycle on a fixed or on a same EBITDA per ton. Right? Is my understanding correct? And that would be, you know, roc dilutive, if I understand correctly.
Ashish Bansal
See now not technically. So there is, in terms of absolute numbers, there would be a rise. But like you rightly said, the financing cost increases. So eventually when we look at it, the margin in terms of percentage profile starts coming back to the similar levels. Currently the market is still digesting these rapid increase in prices and hence there is a slight marginal shrinkage. But off late from the January, what we are looking at is market is realigning itself to the newer prices and market is getting to these as fresh levels and margins will be back in place.
So I would say it is a transitional period and the whole business destabilizes in the next one or two months.
Sawman
Sorry, clarification that you mentioned.
operator
Sorry to interrupt. In between Sawmill, I would request you to kindly rejoin the queue for the follow up questions as there are participants waiting for their turn. Thank you. Thank you. We have the next question from the line of Shubham Thorat from Poperty Capital Advisors. Please go ahead.
Shubham Thorat
Hello. Am I audible?
operator
Yes, you’re audible.
Shubham Thorat
Thank you for the opportunity. First of all, I have few questions on the copper, so I just wanted to know from where do we source our scrap for the copper and the geography that we source. The second I just wanted to know was that when the 6,000 tons per annum incremental capacity for the copper will be lying and how much are we spending for that? And third, what kind of power integration are we looking to do in copper that you mentioned in order to improve the EBITDA per turn.
Ashish Bansal
Thank you. See on the copper side our sourcing is again global in terms of multiple countries that we source from us, South America, Australia, across the globe. We are sourcing wherever the scrap export is feasible and allowed to be exported to India. In terms of the capacity that you asked from 6 to 12,000, we are almost at Jan end and as we speak some trials are going on and these capacities should be live as soon as maybe the next two, three days. So you will have those incremental capacities come in for the month of February and March.
Apart from that, on the product side I will not be able to give you the specifics right now because we will anyways that out what product, what it is in our announcement the moment we make it on our further expansions. But this 12,000 tonnes, what we are talking is almost live as of now. How much Capex are we doing on that corporate? It is a moving Capex so we’ll be announcing that as well along with the larger plans on the project. But as we told during my initial speech, We’ve already done 25 crores of CapEx in this nine months and further approximately 35 crores will be done in this quarter.
Shubham Thorat
Okay, second on the plastic division. So I just wanted to know what products do we dealing with the plastic and what kind of EBITDA do we generate there? What current capacity that we have in the plastic?
Ashish Bansal
Currently on the plastic we are considering more on the plastic that we are generating in house from the batteries apart which is PPCP and abs. Apart from that we are also looking at nylon currently it is a very flattish number on in terms of EBITDA and this thing which slowly we will be converting a little bit on the polygon positive side.
Shubham Thorat
Okay. And early in the call, so you mentioned that.
operator
I would request you to please rejoin the queue again for the follow up. Thank you. We have the next question from the line of Utkar Sumaya from Elco Quantum Solutions Private limited. Please go ahead.
Utkar Sumaya
Which you had this quarter that almost had a 1% impact on your EBITDA margin. I just wanted to know, you mentioned this is a recurring number. So will it also be recurring next quarter? And what is the same number for Q2?
Ashish Bansal
So yeah, the last part was unclear. You said 1% drop and then 7.
Utkar Sumaya
Crores was the provisioning cost right in this quarter. Okay. What is the same expected to be in quarter three and the rest of the quarters ahead?
Ashish Bansal
I’m sorry, I wish all of us knew that we could stop manufacturing and just play the market basis understanding what the market would look like three months down the line. It’s only a market phenomena sir. And we definitely would not know what it could be in the future. It is only volume driven and at what price my purchase has come in and at what price it has been hedged at that point in time. So this is, you know, nobody I think can answer this question.
Utkar Sumaya
Was it higher than normal this quarter because of the high volatility in prices?
Ashish Bansal
Not higher volatility in prices. The vertical one way run up and when the products were bought at the lower level one, when you hedge it at that level level, the differential comes in as mark to market. When this gets sold, that mark to market gets reversed and comes back into the books as your sales numbers.
Utkar Sumaya
So what is the cost in Q2 for provisioning cost?
Ashish Bansal
Provisioning cost, provisioning cost. The MTM is 2cr in quarter two. Right?
Balakrishnan Vijay
Quarter two.
Utkar Sumaya
Thank you. And can I ask you one last question?
Ashish Bansal
Yes.
Utkar Sumaya
Would it be feasible for you to do 8% EBITDA margin for FY27?
Ashish Bansal
We wish to do a lot better than that as well. But as of now how we look at the markets we are sure about having it in the range of 7 to 8%.
Utkar Sumaya
Okay, thank you and best of luck.
Ashish Bansal
Thank you sir.
operator
Thank you. A reminder to all the participants, kindly restrict the questions to two per participant. We have the next question from the line of Akshay Jugani from Exponent Tribe. Please go ahead. Due to no response, we will take the next participant. We have the next question from the line of Pranav Jain from Aglas Capital Finance. Please go ahead.
Balakrishnan Vijay
So congratulations on the results. So my first question was just to follow up. So Vijay sir was saying we expect to end the year with an inventory of 220 crore. Around 220 to 250 crore which is similar to what we had last year in FY25 in the FY25 balance sheet. Just to understand won’t the copper prices going up, you know, optically increase your inventory number for the same amount of scrap that you’re importing?
Ashish Bansal
Definitely what you’re saying the way you’re looking at is in plain vanilla terms. Very right. But also along with the inventory management, they’re also, you know, trying and squeezing our working capital cycle and trying to rotate it more number of times with lesser number of days. So I mean we are looking at technically having lower inventory even though because the prices are going up and trying to manage the same in the lower working Capital cycle. So we are confident we should be able to achieve this good.
Balakrishnan Vijay
But the prices going up, they don’t pose a challenge in sourcing because of it. Maintaining a lower inventory while it’s good for the cycle, won’t it cause you problems while sourcing or you know, attaining your orders?
Ashish Bansal
I’ll put it this way, higher, higher prices, the higher scrap prices is better for any seller to sell. I mean if you had some scrap lying in your house versus six months back now you will look for some copper scrap to sell out because you know the prices are one and half times, two times than what it was six months back. So everybody, whether smaller or larger player would like to sell at these levels.
Balakrishnan Vijay
And so my second question sir, just want to understand your view on aluminium. I heard you said that you are not focusing on it, but is there any particular reason why? Because the way copper prices are going up, the next closest alternative to that is aluminium and there is a good demand there as well. So why not look at it right.
Ashish Bansal
Now the aluminium market typically in India and all of it is completely unhedged. I mean it is more demand driven or more availability kind of driven and it is not directly linked with lme. So I mean it becomes a little, you know, how do I explain? Little more, little less rather organized manner of running a business. So that is why we don’t look at that in a very serious manner. The secondary aluminium alloys.
Utkar Sumaya
Got it. Thank you. Those are my two questions. Thank you and all the best.
Ashish Bansal
Thank you.
operator
Thank you. We have the next question from the line of Nikhil Agarwal from Money Stories Asset Management. Please go ahead.
Nikhil Agarwal
Hello, thank you for the opportunity for the good set of numbers. I just wanted to ask your view on lithium ion. So we are expanding on copper lead and everything. So I just want to understand the rules on how we are approaching the lithium ion side of things.
Ashish Bansal
Yeah, I mean we have been contemplating on lithium ion. The reason that why we haven’t forward.
Nikhil Agarwal
Is firstly we are now currently concentrating.
Ashish Bansal
On the copper part of it. Number one.
Nikhil Agarwal
Number two on lithiumion basically we aren’t very sure of two things.
Ashish Bansal
One, the feedstock availability in the Indian market and number two, we also expect kind of the technology upgradation. What is happening in lithium ion is.
Nikhil Agarwal
Quite fast tracked and we just wanted.
Ashish Bansal
To monitor that and understand the technology and the feedstock availability because whatever, it.
Nikhil Agarwal
Mostly comes from the EV and the.
Ashish Bansal
Consumer and the electronics and both of it and especially in EV is the.
Nikhil Agarwal
Majority contributor and we foresee that probably.
Ashish Bansal
By 2028 or so the feedstock of lithium ion batteries would be much better and we thought we’ll take it later.
Nikhil Agarwal
So that is the only thing.
Ashish Bansal
And we are also exploring the technology part of it.
Nikhil Agarwal
Okay, got it.
Balakrishnan Vijay
So as I assume so for the next year we don’t think any lithium ion part kicking.
Ashish Bansal
Yeah.
Nikhil Agarwal
No. Okay, thanks. Thanks.
operator
Thank you. We have the next question from the line of Avish Chauhan, an individual investor. Please go ahead sir.
Avish Chauhan
In the last three quarters we have seen that our lead EBITDA per turn has been in the range of 17,000 to nearly 20,000 rupees per ton. But now we are guiding between that 15,000 to 17,500. So was just wondering whether we had some different advantages in last three quarters which are not going to be there going forward that we are, you know, guiding towards the lower end between that 15 to 17,000.
Ashish Bansal
Mr. Chauhan, our guidance has always been 15 to 17,500 and we are striving to have our margins over and above that. So that is all about it. So 15 to 17, typically 15 to 17,500 is a sustainable margin and that is why we are continually guiding 15 to 17,500 but yet achieving, you know, at those levels or higher than those levels. So we would like to keep the guidance at 15 to 17,500 even though we are achieving slightly over that.
Avish Chauhan
Right. But with value added products you said it can go up by 1500, right?
Ashish Bansal
Yes, that’s based on the mix. So what we have guided 15 to 17500 was a blended of value and this thing with the current mix that we’ve been having. So a little bit of value added mix increases that margin also will definitely increase.
Avish Chauhan
Okay. And in for our Mudra, we already have a land but we’re not happy, not done anything. But I know it’s not, it’s too early to comment but what is management thinking at least directionally what how we want to utilize that land.
Ashish Bansal
I think a couple of queries back I had answered the same question. Even though I’ll answer, we are looking that, looking at that in second half of calendar year 2027 once we complete our copper expansions. And like I said at Biden, also looking into the Middle Eastern European market, a lot of things open up. So definitely we’ll be looking into our existing businesses and also one or other verticals along with that in.
Avish Chauhan
Okay, great sir, and all the best.
Ashish Bansal
Thank you. Thank you.
operator
Thank you. We have the next follow up question from the line of Kush Khusrani from Goji Ms. Please go ahead.
Khush Gosrani
Yeah, hi sir, could you elaborate on how the EPR norms are shaping up and the rebates, etc, that would be helpful, thank you.
Ashish Bansal
So epr it’s. I mean the norms are yet. They are notified but I mean I’ll say yet to be. It’s a little bit still in the fluid state. So even though we have some credits in our book, the pricing is not yet evolved. So we’ll have to wait till the April 1 when the government is enforcing even in a stronger manner along with price mandates. So we’ll have a better clarity in the next quarter.
Khush Gosrani
Got it. Thank you.
Ashish Bansal
Thank you.
operator
Thank you. We have the next follow up question from the line of sawmill from Lucky Investments. Please go ahead.
Sawman
Hi, thank you for the follow up. Am I audible?
Ashish Bansal
Yes sir.
Sawman
Yeah. Just wanted to clarify one thing. You mentioned that over shorter cycles your EBITDA per ton remains fixed because of the hedging policy. But as the market calibrates to either higher or lower metal prices, specifically copper, that would mean that the market readjusts to a similar fixed percentage. Otherwise your balance sheet would look sort of very different or rather return metrics would look very different in case of high volatility on either side in the corporate prices. Is that understanding correct?
Ashish Bansal
Yeah. So basically you’re more or less right on that side. So basically once the prices adjust then people again the basic margin requirement for doing a particular business is needed. So people start readjusting and all of it. But like I said, sometimes when the market finally shoots up, there’s a panic sale or somebody has an edge position at the lower side for them it’s still a much higher margin, they liquidate. So once all these finds a plateau, the market readjusts and comes back to the normal positioning.
Sawman
Got it. And because you are hedged in the interim that would not affect at least.
Ashish Bansal
Yeah, not severely. But it did get affected a bit in this quarter because the prices vertically shot up, people are not willing to pay the full delta, the complete delta that we were receiving the previous quarter. And so there’s a marginal difference in the delta received this quarter. But coming quarter that will even out.
Sawman
That makes sense. Yeah. Thank you sir.
Ashish Bansal
Thank you.
operator
Thank you. We have the next follow up question from the line of Shubham Thorad from Purportule Capital Advisors. Please go ahead.
Shubham Thorat
Thank you for the follow up. Sir, earlier in the call you mentioned. That our gross margins were impacted due to higher percentage of domestic sourcing. So I just wanted to ask why are imported scrap is more economical. That’s one and second, why are domestic sourcing was higher for this particular quarter?
Ashish Bansal
I mean domestic sourcing sometimes is higher because it’s more of the availability phenomena. When little more scrapping happens, little more vehicle sales happen or those change in replacements due to seasonal changes, the flow is better. But sometimes when the flow is more lean, the domestic prices tend to squeeze up a little when more people are seeking for scrap and the availability is low. So it’s more of a market driven formula. And also you have to understand that for us to look into the domestic market we are extremely, you know, picky about taking it more only from the formal sector, from you know, the larger companies or the, you know, IT companies.
And so those kind of things are options and there, there’s typically slightly, the costs are higher.
Shubham Thorat
Got it. And so my final question on the LED side. So I just wanted to know what is our current lead capacity, what is there are and what kind of value added products do we produce in need?
Ashish Bansal
So your question is what kind of value added products we manufacture? I didn’t, I’m a little unclear on your question.
Shubham Thorat
Sorry. Yeah, that’s right. That’s right. So is there multiple kinds of alloys that we do? We do lectin based alloys, we do tin based alloys, we do antimony based alloys. Calcium. There are a lot of specific alloys that you manufacture for certain OEMs. So I mean it’s a blend of alloys. We do almost close to over 100 kinds of alloys for various customers. So it’s a whole lot of plethora of portfolio that we give to our OEMs. And comments on your current capacity and what kind of status are you looking over there in the lead?
Balakrishnan Vijay
The capacity for this quarter in terms of this quarter is about. We have done about 79 percentage overall for this year. It’s about 65 to 70 percentage capacity utilization. And in the new plant we expect capacitance in blended manner above 70% in the coming quarters.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to the management for the closing comments. Thank you. And over to you, sir.
Ashish Bansal
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 at Goindia Advisors. Once again we extend our gratitude to all the participants for joining us today. Thank you and have a great day.
operator
Thank you very much on behalf of Ponde oxides Chemicals Ltd. And GoIndia Advisors. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines. Thank you, everyone.