Amara Raja Energy & Mobility Limited — Q1 FY26

Amara Raja Energy & Mobility Ltd Q1 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=kQROyciIbpo Published: 8 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Amara Raja Q1 FY26 earnings conference call hosted by Motila Losal Financial Services Limited. 0:11 11 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your Touchstone phone. Please 0:27 27 seconds note that this conference is being recorded. I now hand the conference over to Mr. Anik Mahadre from Motil Oswal Financial Services Limited. Thank you and over to you sir. 0:38 38 seconds Thank you Uda. Good evening everyone. 0:41 41 seconds Welcome to the post results conference caller from Amaraja. At the outset I would like to thank the Amaraja management for giving us an opportunity 0:48 48 seconds to host this call. From the management team we have with us Mr. Viapu, chief financial officer of the company. I would now like to hand over the call to 0:57 57 seconds Mr. Delhi Babapu for his opening comments on the company's Q1 performance post which we'll begin the Q&A session. Over to you sir. 1:06 1 minute, 6 seconds Uh a very good afternoon to everyone who has logged in. U thanks for your time. 1:10 1 minute, 10 seconds Uh during the Q1 of FI26 uh the consolidated revenue stood at 3,41 1:17 1 minute, 17 seconds crores. That's a growth of about 4% over the previous year. Whereas on a quarter and quarter the revenue growth is about 1:25 1 minute, 25 seconds uh 11%. About 96% 95 to 96% of the revenue comes from the lead acid batteries and the rest is coming from the new energy batteries and chargers. 1:36 1 minute, 36 seconds The lead acid revenue per se was around uh 3,270 crores and the growth of lead acid 1:43 1 minute, 43 seconds battery business on a overall basis is about on a basis about 4 and a.5% and uh during the current quarter uh the OEM 1:52 1 minute, 52 seconds demand was uh robust and also along with the u aftermarket growth growth in the four-wheeler as well as uh two-wheeler 2:00 2 minutes segments. uh the four-wheeler domestic aftermarket volumes growth was around 5% on a byway basis whereas OEMs have grown 2:09 2 minutes, 9 seconds about 12 to 13% during the current quarter and export volumes is where we have a challenge during the current 2:16 2 minutes, 16 seconds quarter where there is a degrowth compared to the previous year by about 7 to 8%. And uh two-heer volumes across 2:24 2 minutes, 24 seconds all segments have grown about five to six% uh over the previous year. And in the other application side, the tubular 2:32 2 minutes, 32 seconds batteries have shown substantial quarteron quarter growth. But whereas when it comes to WO basis going to a weaker season, the growth was limited to 2:40 2 minutes, 40 seconds about 3 to 4%. And the recently launched lubes product has continued its growth momentum. And we have seen a yearon-year 2:48 2 minutes, 48 seconds volumes getting doubled as far as the lube sales is concerned. 2:53 2 minutes, 53 seconds Uh in the industrial segment the telecom lead acid batteries volumes have degrown by close to 30% over the previous year. 3:01 3 minutes, 1 second Whereas we have witnessed a very strong growth on the up industrial UPS batteries at about 15% over the previous 3:09 3 minutes, 9 seconds year. While the lead acid batteries had a challenge during the current quarter, the lithium pack volumes have all registered a substantial growth. For the 3:17 3 minutes, 17 seconds first time in a quarterly basis, we have crossed almost 100 megawatt of sale of lithium packs to the telecom sector 3:25 3 minutes, 25 seconds resulting in the overall market share in telecom being protected over and above 15% uh that we have been having even in 3:33 3 minutes, 33 seconds the lead asset side. So uh as far as the overall new energy business is concerned the revenue was about 122 crores where 3:41 3 minutes, 41 seconds uh it was aided by a very strong growth on the storage side volumes to uh particularly to telecom sector whereas 3:49 3 minutes, 49 seconds the EV uh side of the business has slowed down uh during the current quarter owing to a lower demand from the 3:56 3 minutes, 56 seconds OEMs that we are supplying to both on the packs as well as uh the charger side of it and we expect this demand to revive in the coming quarter. 4:06 4 minutes, 6 seconds And uh during the current quarter into the subsidiary so far we have we have 4:13 4 minutes, 13 seconds infused about another 350 crores into the Amaraja advanced cell technologies the new energy business subsidiary with 4:20 4 minutes, 20 seconds that the overall investment into this subsidiary has reached to about 1,200 crores on a cumulative basis. 4:28 4 minutes, 28 seconds uh the margins of the current quarter uh were subdued going to the material cost challenges that what we have seen even 4:36 4 minutes, 36 seconds in the previous year while on standalone basis uh they at about 11 and a half% if I adjust it for the lithium revenues 4:44 4 minutes, 44 seconds that come into the standalone financials the AITA margin is around 11.7% or so and these margins are negatively again 4:52 4 minutes, 52 seconds affected by as I said the material cost as well as some of the cost increases on the power and employee cost uh as well as some revised provisioning that we are 5:01 5 minutes, 1 second doing for our warranty claims uh the trading revenue also because our tubular factory has just commenced its 5:08 5 minutes, 8 seconds production sometime in the month of July so some of the first quarter requirement were still met with the trading uh piece 5:15 5 minutes, 15 seconds thereby the trading revenue mix also has increased by almost 4% in Q1 on a VO basis what used to be a 19% in last year 5:25 5 minutes, 25 seconds the trading revenue today in this current quarter is about 23% that also kind of have shown a bit of a dilution on the AITA margin. So now that the 5:34 5 minutes, 34 seconds manufacturing activity is commenced in the coming quarters I think we will reduce the trading of home UPS tubular 5:42 5 minutes, 42 seconds batteries and then replace them with our uh manufactured tubular batteries. 5:48 5 minutes, 48 seconds uh as far as capex is concerned uh I think we we continue to have to project about 1 1200 to,300 crores of capex for 5:56 5 minutes, 56 seconds the current fiscal uh substantial part of it about 800 to 900 crores of it uh will be spent on the new energy uh 6:03 6 minutes, 3 seconds projects that are currently running and for completing them and the rest will be spent on the lead acid batteries side. 6:12 6 minutes, 12 seconds Uh that's a quick brief of uh the Q1 results. Now I would uh request any 6:18 6 minutes, 18 seconds questions from your side. We'll happy to clarify. 6:24 6 minutes, 24 seconds Thank you very much. We will now begin with the question and answer session. 6:28 6 minutes, 28 seconds 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 6:35 6 minutes, 35 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 6:45 6 minutes, 45 seconds The first question is on the line of Dunandan from Noama Research. Please go ahead. 6:51 6 minutes, 51 seconds Uh thank you sir for the opportunity. Uh sir firstly on the volume side uh you 6:58 6 minutes, 58 seconds indicated that export has seen a degrowth. How do you see the outlook forward there? 7:06 7 minutes, 6 seconds Uh yeah, I think see some of the uh additional uh volumes that we are expected to get from some of the u 7:15 7 minutes, 15 seconds markets has kind of weakened during the current quarter. Uh we hope uh this revised uh scenario will settle down in 7:24 7 minutes, 24 seconds the next one or two quarters and then we will again be back on a growth momentum. 7:29 7 minutes, 29 seconds The regular markets APAC and Middle East are also seeing some bit of competitive intensity going to all these um uh 7:38 7 minutes, 38 seconds tariff challenges that we are seeing and uh we hope to uh again increase the volume momentum by expanding into other 7:45 7 minutes, 45 seconds markets uh and then revive this growth momentum in the coming quarters. I think we we will have a challenge at least for 7:52 7 minutes, 52 seconds next uh one or two quarters and after that we expect that uh some of the uh market penetration activities that we 8:00 8 minutes are doing now should result in uh volume growth in the coming quarters. 8:07 8 minutes, 7 seconds Uh thank you sir. Uh on the industrial side uh telecom was uh 30% decline uh 8:14 8 minutes, 14 seconds lead asset then UPS was 15% growth. How much was the growth uh on the total industrial sides? 8:24 8 minutes, 24 seconds Uh with this it's kind of uh negated. 8:26 8 minutes, 26 seconds There is no growth on the overall volumes. In fact, if you look at 30% degrowth and 15% growth in UPS, it will result in a degrowth of industrial lead acid volumes by about 3 to 4%. 8:39 8 minutes, 39 seconds Got it sir. And for home inverter uh how much has it uh been on by basis? 8:48 8 minutes, 48 seconds Yeah, it was a 3 to 4% kind of an increase increase. Okay, got it. And that's why 8:56 8 minutes, 56 seconds my second question was on the margin side. Uh the traded mix has increased and this you said will normalize in the 9:04 9 minutes, 4 seconds coming quarter and sec uh within margin there is also some under recovery because of the increase in uh input cost 9:13 9 minutes, 13 seconds like antimony. So, so just wanted to understand uh how much is the under recovery uh whether more price hikes 9:22 9 minutes, 22 seconds will be taken and uh whether traded mix will also normalize in coming quarter. 9:27 9 minutes, 27 seconds So all that should lead to margin expansion ahead. 9:33 9 minutes, 33 seconds Uh see as far as antimony is concerned I think it is now getting stabilized at a given level. As you know, we have taken 9:40 9 minutes, 40 seconds some price increase in Q4 and thereafter uh the competitive scenario uh doesn't permit us to think about a further price 9:49 9 minutes, 49 seconds increase immediately. But I'm sure if it persists at this level, some pricing action will be taken or there will be some uh improvement on the material side 9:58 9 minutes, 58 seconds that we can consider. But uh the on the the other side on the expenses yes I'm hoping in the coming quarters uh some of 10:05 10 minutes, 5 seconds the power related issues once they get settled I think uh we should see some benefit uh that can occur to us in the coming quarters while I'm unable to give 10:14 10 minutes, 14 seconds you a particular number on what could be the margin improvement that I'm seeing maybe Q1 and Q4 of last year are the 10:21 10 minutes, 21 seconds worst that we have seen and it can only improve from here uh uh slowly but surely. 10:28 10 minutes, 28 seconds Thank you sir. And uh uh lastly on the uh lithium uh cell project uh update uh 10:37 10 minutes, 37 seconds so so we will be investing uh about uh uh last year was 850 cr another 800 to 10:44 10 minutes, 44 seconds 900 cr is the investment this year and fi27 when the facilities are likely to be 10:51 10 minutes, 51 seconds operational by fi27 how much will be the total investment and the facility which 10:58 10 minutes, 58 seconds will come up will it be both NMC and LSP and what capacity will it be? 11:05 11 minutes, 5 seconds Yeah, as I mentioned earlier the first capacity that will come is only of NMC uh where we have we are going to make 11:11 11 minutes, 11 seconds the 21700 uh cells. The initial capacity will be 1 GAW hour. Thereafter we will see if it needs to be expanded to 2 G or 11:20 11 minutes, 20 seconds should we go with an alternative LFP cylindrical cell of 30 to 140 pm factor. 11:25 11 minutes, 25 seconds So that is a decision that we are to take on. uh so for completing these uh three projects I think we will be 11:32 11 minutes, 32 seconds needing uh apart from what we have invest so far we have invested 1200 crores into the subsidiary uh which is not only used for capex but also used 11:41 11 minutes, 41 seconds for some of the working capital requirements uh so we should be uh required to infuse another uh 1200 crores for us to complete the uh 11:51 11 minutes, 51 seconds research lab customer qualification plant as well as the first uh gigafactory with about 1 gawatt hour capacity 12:00 12 minutes Got it sir. Any update on the customers sir? Uh we had added earlier few customers like ether and all. Any further updates? 12:11 12 minutes, 11 seconds No or no. I think there are discussions both happening at the low voltage as well as high voltage side. So there is nothing that I can uh disclose at this point of time. 12:21 12 minutes, 21 seconds Uh thank you very much sir. I'll fall back to the queue. 12:27 12 minutes, 27 seconds Thank you. A reminder to all participants, you may press star and one to ask a question. The next question is from the line of Capil Singh from Namura. Please go ahead. 12:38 12 minutes, 38 seconds Yeah. Hi, good evening sir. Uh sir, I noticed that your uh four-wheeler OEM growth is quite strong during the 12:45 12 minutes, 45 seconds quarter. Uh could you give some color because the industry has not grown uh during the quarter. So have we gained some market share, some new customers that we have added here? 12:57 12 minutes, 57 seconds No, see as you know see we it all depends on the platform that we are participating and where we are getting a bit of a higher volume in certain OEMs. 13:06 13 minutes, 6 seconds The number of customers that we are operating has not changed anything during the current quarter but only the some of the allocation that we have received on some of the platforms that 13:15 13 minutes, 15 seconds we are participating has increased. So beyond that there is no uh uh specific reason as such. 13:24 13 minutes, 24 seconds Okay. 13:25 13 minutes, 25 seconds And sir uh just to refresh like in terms of uh the unorganized market now would you have an estimate like what 13:33 13 minutes, 33 seconds percentage of the market is unorganized in the afterm market in uh four-wheeler and two wheeler 13:41 13 minutes, 41 seconds it still remains around that 10 to 15% range uh depending on uh which product segment that we are talking about uh 13:49 13 minutes, 49 seconds both in four-wheeler and two wheeler I think it is around that uh 15% Okay. And has it been coming down? 13:59 13 minutes, 59 seconds I think it is been at that level of uh middle double digits for some time now. 14:06 14 minutes, 6 seconds I think uh I'm not seeing a sharper reduction out of it. still uh I think uh 14:13 14 minutes, 13 seconds at least for the last 3 years that I'm seeing some quarters it our estimate suggests that some quarter it goes down 14:20 14 minutes, 20 seconds uh to maybe lower double digits and then again in some quarters like where there is irriia demand or tubular demand picks 14:28 14 minutes, 28 seconds up then suddenly it comes back also so it is still at around that uh number. 14:34 14 minutes, 34 seconds Sir, these are smaller regional players or these are like uh players who are uh unorganized players. How how would you classify them? 14:44 14 minutes, 44 seconds Both put together barring the four five large players uh rest of them who are very very local 14:52 14 minutes, 52 seconds brands and even some of the unorganized totally unorganized players as well. 14:57 14 minutes, 57 seconds Okay. Okay. Understood. And so last time you had on the lithiumion side last time you had mentioned that the LFP price was 15:05 15 minutes, 5 seconds had dropped to closer to $50 also in some cases. How is that moved uh during the quarter? 15:13 15 minutes, 13 seconds Recently we have seen some uptick at the raw material level uh but we are yet to 15:20 15 minutes, 20 seconds see that translating into uh price change at the cell level. uh but I 15:28 15 minutes, 28 seconds think our reading at this point of time is there could be a possible upward movement at the sell prices also because 15:35 15 minutes, 35 seconds some of the base raw material there is a uptick in the price but how much of that will come into the market is something 15:44 15 minutes, 44 seconds to be seen but we believe uh the $50 mark could be the bottommost and from there it can only uh move up. 15:55 15 minutes, 55 seconds Uh sure sir and uh lastly just on the capacity discussing but I request you to rejoin the queue for the follow-up question. 16:04 16 minutes, 4 seconds Sure thank you. 16:05 16 minutes, 5 seconds Thank you. The next question is on the line of MKkesh Sarah from Amendas Park. Please go ahead. 16:12 16 minutes, 12 seconds Uh yes sir good evening and uh thank you for the opportunity. Uh my first question is on margins. Um I mean while 16:19 16 minutes, 19 seconds we saw that this quarter the margins uh were at 11 and a half. You did mention that antimony is now probably stabilized. And when I look at lead on 16:28 16 minutes, 28 seconds an M minus2 basis as well, it looks like it is more or less flat. Uh we're also seeing the tubular plant up uh and the 16:35 16 minutes, 35 seconds refinery for you on the recycling up. So uh is it fair to say that uh from here on I mean we should go back to our typical margin range 13 odd percent. 16:47 16 minutes, 47 seconds Yes, m that's what my my estimate also at this point of time. Um it depends on 16:54 16 minutes, 54 seconds how the in the coming quarter the inventor season will behave. Uh because you know the current 17:01 17 minutes, 1 second very very low demand considering the way the weather is behaving. Uh so I think with recycling refining operations have 17:08 17 minutes, 8 seconds started. So battery breaking operations will take another 2 three months to start because uh the ramp up process is 17:15 17 minutes, 15 seconds currently on. Uh so I hope we will only move uh upward movement in terms of the margin planning. 17:24 17 minutes, 24 seconds Got it. And uh in the last say 3 months uh any pricing actions you have taken in the aftermarket? 17:31 17 minutes, 31 seconds No nothing in Q1. It was taken in last year. 17:36 17 minutes, 36 seconds Nothing Q4. Okay. Okay. And just lastly telecom now on the lead asset side telecom will be how much sir for us? About five five six% of revenues overall revenues. 17:47 17 minutes, 47 seconds Uh income overall revenue will be about um yeah it should be around uh 17:55 17 minutes, 55 seconds the lead asset side of it 6 to 7%. Yeah, six to seven. Okay, got it sir. Thank you. That's it from my side. Thank you. 18:05 18 minutes, 5 seconds Thank you. The next question is from the line of Samra Jada from Prosperity Wealth Advisor. Please go ahead. 18:13 18 minutes, 13 seconds Hi, good evening. Can you please provide me an update on the ramp up facility of our table plant at Chto and the battery 18:20 18 minutes, 20 seconds recycling plant at chair? Any delays or challenges you're expecting there or is it on time? 18:27 18 minutes, 27 seconds No, no. See the tubular plant is uh quite as expected we are able to ramp up. So July we have commenced our commercial production. So it will take 18:36 18 minutes, 36 seconds generally about 2 to 3 months to reach its uh full capacity. Uh thereafter it will run at its stated capacity of about 18:46 18 minutes, 46 seconds 150,000 batteries per month. Uh so there are no challenges as far as the tubular battery ramp up is concerned. As far as 18:53 18 minutes, 53 seconds the recycling plant, the refining operations are going smooth. Uh we are able to ramp up uh the entire refining operations pretty nicely. But the 19:02 19 minutes, 2 seconds battery breaking operations is where the general trial run term itself takes about uh four to 5 months. We are in the 19:09 19 minutes, 9 seconds midst of that uh journey right now. So we expect that the battery breaking operations to come into full stream 19:16 19 minutes, 16 seconds sometime around October, November kinds provided all the trial runs go as per our expectation because this being a 19:23 19 minutes, 23 seconds very uh state-of-the-art missionary we are working with the vendor from Italy very closely. So we expect this to come online sometime around October and November. 19:33 19 minutes, 33 seconds Okay. And the gigas cell factory the uh the cell factory construction has just started. So as far as the uh CQP 19:41 19 minutes, 41 seconds and research lab is concerned, equipment orders are all done. So we are we have slowly started getting one or two 19:48 19 minutes, 48 seconds equipments arriving. So we expect the customer qualification plant and the research lab to be functional by the end 19:55 19 minutes, 55 seconds of this financial year and or maybe research lab could be ready by end of this calendar year itself. Uh and as far 20:03 20 minutes, 3 seconds as the gigafactory is concerned, just now the building construction has just commenced. Now we are discussing on the equipment side of it. So I think we we 20:11 20 minutes, 11 seconds have earlier said that FI 27 uh end is when we will see the commencement of 20:18 20 minutes, 18 seconds Gigafactory first gigafactory as well a quarter here and there I think we should we are fine to hit those timelines. 20:26 20 minutes, 26 seconds Okay great thank you that's want to do one more question. Thank you. 20:31 20 minutes, 31 seconds Thank you. The next question is from the line of Girish Kumar from Valpro. Please go ahead. 20:38 20 minutes, 38 seconds Uh good evening sir. Can you hear me? Sir, sir. Can you hear me? Yes sir. 20:46 20 minutes, 46 seconds Hi. Can you hear me sir? 20:48 20 minutes, 48 seconds Okay. Uh sir, I have one question. Uh given the rising demand for battery energy storage system best in India. Is 20:57 20 minutes, 57 seconds Amra Raj exploring any opportunities in to participate in this space? 21:03 21 minutes, 3 seconds Yes, very much. I I think uh energy storage system is a very important area for our growth from a solution side 21:10 21 minutes, 10 seconds because there are three segments to this market. One is the retail home level. 21:14 21 minutes, 14 seconds Second is the commercial and industrial level. Third is the grid level. So all three levels we are trying to now develop our own solutions and then see 21:22 21 minutes, 22 seconds how we do how do we go for these three segments differently. there is a separate team that is working on this and then uh we'll be while I'm unable to 21:31 21 minutes, 31 seconds give you a very specific timeline in terms of when the revenues will kick in I think in the coming quarters we can have some update around it uh but there 21:39 21 minutes, 39 seconds is a very clear uh focused team that is working on tapping these opportunities on all these three customer segments around this 21:47 21 minutes, 47 seconds thank you sir thank you a reminder to all participants you may press star and one to ask a question. 21:56 21 minutes, 56 seconds The next question is from the line of Kapil Singh from Namura. Please go ahead. 22:02 22 minutes, 2 seconds Yeah, thanks for the opportunity. Uh sir, just wanted to check uh the initial capacity on lithium ion side that is 22:10 22 minutes, 10 seconds coming up which will be the primary uh product categories that we will be targeting with that. 22:18 22 minutes, 18 seconds As I mentioned, NMC is the form factor and predominantly it'll be a two-heer application and some of the high level power tool applications as well. Uh but 22:27 22 minutes, 27 seconds it'll be a predominantly uh two-heer application. There could be very small parts of storage applications where NMC cells might be required but it's 22:36 22 minutes, 36 seconds predominant focus will be on the two-heer side. 22:40 22 minutes, 40 seconds Okay. uh sir some customers are talking about the fact that they will start shifting towards LFP in case of two 22:47 22 minutes, 47 seconds wheelers. So just wanted your perspective on on the same. 22:53 22 minutes, 53 seconds Oh yes. I I think that is why from the beginning we have been saying NMC will not have a very significant uh uh portion of the total product portfolio 23:02 23 minutes, 2 seconds and then we continue to remain that stance and that's why we are now earlier we thought of going ahead with a 2 gawatt capacity for NMC but now we are 23:09 23 minutes, 9 seconds saying we'll go with 1 gawatt to start with and then see whether we should go with the same form factor or should to 23:17 23 minutes, 17 seconds the LSP cylindrical cell as well. So there is a very clear uh uh message that we are also seeing in the market even 23:24 23 minutes, 24 seconds with the OM that we are currently working on the three-wheeler side as well. We are seeing that shift of chemistry from NMC 23:32 23 minutes, 32 seconds because LFP offers that cost advantage as well. Uh but that that's been the way that we felt the market will behave and 23:41 23 minutes, 41 seconds I think uh there is no change in that that process. 23:46 23 minutes, 46 seconds And so lastly, I'm sure you you would have been following the news slow on GST. Um you know, still uh we're not clear, you know, what exactly will 23:54 23 minutes, 54 seconds happen, but uh rate rationalization uh if it happens. I just wanted to understand from your perspective, how 24:02 24 minutes, 2 seconds would you see which are the segments where you see uh Amar Raja could benefit? Just whatever is your perspective would like to. 24:12 24 minutes, 12 seconds Yeah. From a traditional lead acid battery point of view, it puts lead acid batteries on par with lithium because today lithium's GST is about 18% whereas 24:20 24 minutes, 20 seconds lead acid batteries are subjected to 28%. The first thing that will happen is both the batteries will come on to the same uh tax rate level. That is number 24:29 24 minutes, 29 seconds one. Number two, the raw materials that we are sourcing are also taxed at 18%. 24:34 24 minutes, 34 seconds To that extent, the overall working capital burden that will be there on the company also will come down. That's one advantage of GST rates coming down. uh 24:43 24 minutes, 43 seconds from a very very I mean out I mean top level perspective but when we look at the other side of the supply chain where 24:51 24 minutes, 51 seconds the scrap batteries where we are procuring which are currently subjected to about 18% GST if some rationalization were to happen on that as well that 25:00 25 minutes would make our entire collection process a lot more easy and then if the GST rates on scrap batteries also were to come down 25:08 25 minutes, 8 seconds then I think that would also help the entire recycling cycling process becoming more and more organized. Uh thereby the collection process will get 25:17 25 minutes, 17 seconds a lot more streamlined and then that way the presence of unorganized segment also might get uh a bit of a uh I mean they 25:26 25 minutes, 26 seconds may they may find it a bit difficult to source their lead given that more and more scrap players are going to come 25:32 25 minutes, 32 seconds into the GST net. uh so that that would be a very good advantage but I I don't know whether government is thinking 25:40 25 minutes, 40 seconds about reducing the scrap GST also but at the finished product level uh it has only one advantage of putting it on par 25:49 25 minutes, 49 seconds with lithium and also reducing some bit of working capital to the battery makers. 25:56 25 minutes, 56 seconds Sure. So just one clarification here for the electric vehicle uh batteries what is the GST rate and also for the scrap 26:03 26 minutes, 3 seconds batteries what is the GST rate currently scrap batteries also it is at 18%. And for fully finished batteries it is 28%. 26:15 26 minutes, 15 seconds And for EV batteries what is it? 26:18 26 minutes, 18 seconds It is 18%. GST is 18% whereas the basic customs duty uh for the sales is at uh 26:26 26 minutes, 26 seconds 5% because government is giving a 15% concession there. 26:31 26 minutes, 31 seconds Okay. Thank you sir. I wish you all the best. Thank you. 26:36 26 minutes, 36 seconds Thank you. The next question is from the line of VBAuchi from JP Morgan. Please go ahead. 26:44 26 minutes, 44 seconds Yes. Hi. Thanks for the opportunity. I am just trying to compare the Indian lead acid battery market size from your 26:51 26 minutes, 51 seconds annual reports. Uh so it looks like it is kind of flatline at that 36 37,000 26:59 26 minutes, 59 seconds crores level. Uh you know if I compare the FI21 annual report to the FI25 annual report. So is it true that the 27:07 27 minutes, 7 seconds you know battery is battery market size is is flattish over the last few years or there could be some you know 27:14 27 minutes, 14 seconds assessment related uh uh you know challenges over here. 27:21 27 minutes, 21 seconds uh see our estimate is uh I I don't know the basis of uh the 36,000 cr number u 27:29 27 minutes, 29 seconds but our estimate was around 40,000 crores uh and I think we we know that there is 27:37 27 minutes, 37 seconds downside risks as far as storage is concerned because we are seeing what's happening in the telecom side uh whereas on the mobility side given the OEM 27:46 27 minutes, 46 seconds sluggishness that we are seeing for a reasonably good period now uh that could uh kind of a hit some kind of a 27:55 27 minutes, 55 seconds platooning curve going forward. And also on the home point of view if even this home inverter 28:03 28 minutes, 3 seconds and then home solar application if that what also get migrated to uh lithium then there is a issue with it but right 28:11 28 minutes, 11 seconds now we believe the growth rates will remain strong as far as the mobility sector is concerned. storage side it will depend on uh how the lithium prices 28:20 28 minutes, 20 seconds will move and then uh what impact it will have on the overall cost of ownership for these uh uh players. 28:28 28 minutes, 28 seconds That's how we we we looked at the market and we believe lead acid battery business has a overall growth potential including the international markets 28:37 28 minutes, 37 seconds where we are operating. I think it will we should see a growth of in the range of 10% at least for a reasonable period. 28:45 28 minutes, 45 seconds Okay. Got it. That's helpful. So basically probably somewhere around 4.64 $4.7 billion 28:52 28 minutes, 52 seconds and uh probably higher export volumes could uh be an offsetting factor that could keep volumes higher like you 29:00 29 minutes mentioned that telecom and certain other industrial aspects are expected to even flattish but probably export uh 29:07 29 minutes, 7 seconds opportunity could be a could be a key reason. Correct. 29:11 29 minutes, 11 seconds Okay. Got it. Got it. Thank you. Because the penetration also is not playing in a uniform manner, right? So in some quarters we are seeing a very good 29:19 29 minutes, 19 seconds uptick. In some quarters there is a again a downtrend. So we had to establish a very clear uh trajectory as 29:27 29 minutes, 27 seconds far as Indian market is concerned. It it is same within even in some of the export markets also. So I think we just need to wait for some more data before we conclude this. 29:37 29 minutes, 37 seconds Got it. Thank you so much. 29:39 29 minutes, 39 seconds Thank you. A reminder to all participants, you may press star and want to ask a question. The next question is from the line of Shubhham Badra from Ambit EMC. Please go ahead. 29:52 29 minutes, 52 seconds Hi sir. Uh thanks for taking my question. Sorry if I am repeating the same question. Uh firstly uh when do we expect the battery manufacturing 30:00 30 minutes capacity to uh come up and what is our ramp up plan and secondly have we established a supply chain for 30:08 30 minutes, 8 seconds electrolytes and electrolyte salt and uh who are we trying to procure it from? 30:13 30 minutes, 13 seconds See if you are asking about the lithium batteries the supply chain is clearly everything is from China only I think except for few components that we expect 30:21 30 minutes, 21 seconds that Indian manufacturing will start u but most of the basic raw materials of cathode and anode materials including 30:28 30 minutes, 28 seconds electrolyte to it will start only from import from China uh it will take some time for the Indian ecosystem to really uh ramp up. 30:41 30 minutes, 41 seconds Okay. And sir, when do we expect the manufacturing to come up? The battery manufacturer. What what is your timeline? 30:48 30 minutes, 48 seconds Yeah, as we said, sometime around end of FI27. Okay. Thank you, sir. 30:57 30 minutes, 57 seconds Thank you. 31:00 31 minutes The next question is from the line of Anik Mahatri from Motilwal. Please go ahead. 31:06 31 minutes, 6 seconds Yeah. Hi sir just uh quickly on uh uh demand outlook sir could you give help us understand the outlook for your various segments uh both autos and 31:14 31 minutes, 14 seconds non-sautos clearly UPS I think as we mentioned earlier while this quarter we have seen 31:23 31 minutes, 23 seconds a very strong demand I think our expectation is on annualized basis it should still grow around five to 6% kind 31:30 31 minutes, 30 seconds of a growth number uh whereas when it comes to the automotive aftermarket market both two-wheeler and four-wheeler. Four-wheeler we expect the 31:39 31 minutes, 39 seconds aftermarket to grow around uh 6 to 7% kind of a number and whereas the two-heer might grow around uh 10 to 11%. 31:48 31 minutes, 48 seconds Uh that that's the growth number that we are expecting exports while we expect to grow around 15% but this year I think it 31:57 31 minutes, 57 seconds may be subdued given the uh supply chain challenges that we are seeing across the markets because of these tariffs and 32:04 32 minutes, 4 seconds all. So we have to see how exports will perform. We have seen a contraction as far as the first quarter is concerned. 32:11 32 minutes, 11 seconds We hope once we expand our presence in some of the other markets that we are trying to penetrate, we should be able to revive our growth numbers in spite of 32:19 32 minutes, 19 seconds these challenges. Uh but this year could be a tough year for exports. Uh assuming things settle down towards the second 32:27 32 minutes, 27 seconds half of the year, I think still we should be able to pull up. But uh exports is the area where I'm not too very uh certain about. 32:37 32 minutes, 37 seconds Sure. And on the industrial part, yeah, on the industrial I I think I have already mentioned the telecom is anyway 32:46 32 minutes, 46 seconds going to be a migration story. We continue to maintain more than 50% market share in telecom and UPS we expect it to grow around 5 to 6%. 32:56 32 minutes, 56 seconds Right. And just finally on on this power cost issue sir uh uh how uh I mean uh till by when do you expect this to get resolved uh for us uh any timeline? 33:07 33 minutes, 7 seconds Yeah, I'm expecting this to get resolved by end of the current quarter or at the best by beginning of Q3. I think we are there is some good developments that are 33:16 33 minutes, 16 seconds happening right now. So we hope this whole issue will get settled down in the coming quarter. 33:22 33 minutes, 22 seconds So uh I mean is it uh fair to assume that X of the power cost uh the other hedgements are uh you know largely be uh 33:30 33 minutes, 30 seconds the tubular battery they will start ramping up and even uh the RM is normal. 33:35 33 minutes, 35 seconds So I mean X of the purpose I think Q2 onwards we should start seeing the pick up in margins is that 33:42 33 minutes, 42 seconds yeah that's the expectation but obviously we have to wait and see until the Q2 gets closed. 33:49 33 minutes, 49 seconds Sure. So got it. Thanks. as it promises. 33:56 33 minutes, 56 seconds Thank you. A reminder to all participants, you may press star and one to ask a question. 34:12 34 minutes, 12 seconds The next question is on the line of Sor V from Ananta Capital. Please go ahead. 34:21 34 minutes, 21 seconds Hi sir, my question is that as Amar Raja scales its new energy business and 34:28 34 minutes, 28 seconds deepens its focus on advanced chemistry, how are you approaching talent acquisition for the R&D center especially in cell design, 34:37 34 minutes, 37 seconds electrochemistry, battery management systems? is the required engineering talent readily available in India. So are you building capabilities through 34:46 34 minutes, 46 seconds global partnerships or internal upsklling sir? 34:50 34 minutes, 50 seconds Yeah there there is clearly three prronged approach here. One is obviously working with uh some of the talents that 34:58 34 minutes, 58 seconds are available elsewhere in the world and then understanding and then tapping that through our internal talent and secondly some expact recruitments that we are 35:07 35 minutes, 7 seconds able to do not only in the cell design side but also on the uh the ESS and 35:13 35 minutes, 13 seconds other packaging solution side and thirdly obviously working with some of the partnership that we have built and 35:21 35 minutes, 21 seconds then absorbing the technology through the existing talent. 35:24 35 minutes, 24 seconds I don't think there is only one approach but largely the idea the reason why we are running behind investing good amount 35:32 35 minutes, 32 seconds into the research side of it is precisely to develop the talent and invest in that capability for a uh long term. So today we have roughly about 150 35:41 35 minutes, 41 seconds to 200 engineers working on uh these spaces on cell technology and design and a few others working on the back side. 35:50 35 minutes, 50 seconds uh but I'm sure we need uh to ramp that up as as as and when we start our giga journey for as and when we ramp up the 35:58 35 minutes, 58 seconds giga factories uh further uh there is no single solution that uh can solve all 36:05 36 minutes, 5 seconds all the talent problems thank you 36:13 36 minutes, 13 seconds thank you as there are no further questions from the participants I now hand the conference over to the management for Closing comments. 36:22 36 minutes, 22 seconds Uh thanks everyone. Thank for your time and questions. Uh hope to re reconnect with you soon. Thank you. 36:29 36 minutes, 29 seconds Thank you on behalf of Motira Laswal Financial Services Limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines.