Strong growth masked by volume declines and capacity underutilization

Delivered 41.8% YoY; management stated 42%, rounding variance negligible

Delivered 14.3% YoY PAT growth; matches closely

Delivered NPM 7.0%; claim is 21 bps above actual

Overall 4% stated, but lead volumes DOWN YoY for first time due to Gulf disruption; mixed performance

Stated at 50% utilization; management hedges that future ramp to INR60-75k will take 2-2.5 years

Management no longer guides division-wise volumes due to ongoing supply disruption. Q1 saw first YoY lead decline; Q2 expected similar impact. Hedging with long-term growth narrative.

Current INR55k/ton at 50% utilization. Now targeting INR60k by end FY27 (vs prior ~INR65+ implication), then INR70-75k over 2.5 years. Phased improvement reflects capacity constraints and hedging dilution.

Overall 52% despite recent Phagi (40.5k MT) and Mundra (80.3k MT) expansions. Lead utilization at Jaipur 45%, Mundra 50%. Supply chain is the bottleneck, not demand.

East European rubber capacity temporarily shelved. Resources being redirected to fast-track copper expansion (higher logistics value-add) and lithium-ion R&D.

Target 25-30% PAT CAGR maintained. Past 5-year PAT CAGR 48%, past 3-year 24%. Management confident recovery will resume once supply/capacity issues resolve.

INR1,680 Cr through FY29 (was INR1,700 Cr). ₹850 Cr for existing businesses, ₹830 Cr for new verticals (copper, lithium-ion, steel). Allocation shifted toward copper ramp due to supply chain diversification priority.

Gulf supply disruption (15-20% of imports affected). Capacity expansion in place; supply chain recovery expected. Long-term growth in line with FY2030 vision; short-term volumes pressured but margins compensating.

Debottlenecking machinery by end FY27 to reach 60%+. Margins remain INR55k/ton sustainable, rising to INR70-75k over 2.5 years. Last year's margin boosted by higher LME copper ($9k→$13.5k); hedging neutralizes commodity upside.

Pending at MCX internal decision. All formalities done. MCX considering within this year for volume benefit. No ETA certain.

Plastic INR10-12/kg steady, aluminum INR15-17/kg (overseas), some transient gains. Sustainable ranges stated. No major one-time windfall.

Will reduce costs. Not capex operations, just yard procurement network. Same model as aluminum/lead. Incremental benefit even initially.

Value-added only. R&D underway for black mass processing. No interest in plain manila product. Will set up refining unit once black mass availability improves.

Mundra ~50% utilization. Capacity ready, scrap constrained. Not a linear system—supply disruption prevents full ramp.

Already using pyrolysis oil. East European plant supplies Europe only. Rubber capacity on hold, fast-tracking copper instead for higher logistics value. No new margin benefit expected.

By year-end, US yard procurement network will offset Gulf disruptions. Confident in 25-30% PAT CAGR for next 4-5 years. Diversification strategy mitigating volatility.

Stepped guidance: INR55k sustainable now, INR60k by end FY27, INR70-75k over 2-3 years. Phased through capacity utilization, debottlenecking, backward integration.

Current 20% ROCE including copper. Copper will reach 25%+ ROCE in next 3 years. Underutilization in lead also dragging overall ROCE; both will improve.

Contract-based hedging monthly/fortnightly averages. Buy all metals (copper, zinc, nickel) separately, hedge each proportionately. For brass: 70% copper, 30% zinc hedge ratio.

Copper 100% VAT helped. But also refocused on selling value-added lead/aluminum/plastic (40-42% baseline→50%) due to volume pressures and margin focus. Both drivers contributed.

Capacity expansion underway; supply chain recovery expected by end FY27. FY28-29 acceleration from copper ramp and new verticals.

Sustainable ranges provided by management; current results align with stated ranges.

Phased via capacity utilization (50%→60%→70%+), debottlenecking, backward integration. Current 50% util at ₹55k; target end-year 60%+ → INR60k.

CapEx details: ₹160 Cr for Gujarat copper, ₹30 Cr for Phagi (done), remainder for lithium-ion, steel, capacity ramp.

Phagi expanded 40.5k, Mundra 80.3k, Gujarat copper 29.4k in progress. Balance from existing debottlenecking and new facilities.

Middle East conflict blocking Gulf route for 15-20% of lead scrap. Led to first YoY volume decline in Q1; Q2 expected similar impact. Logistics cost rising, material availability uncertain.

Phagi and Mundra expansions (120k MT combined) completed but only 52% utilization overall. Lead at 45%, copper at 50%. Scrap bottleneck, not demand. Risk: capex not generating expected returns if supply remains constrained.

Copper at INR55k/ton (50% utilization) vs prior ~INR65k implied target. Hedging strategy neutralizes commodity price upside; LME copper at $13.5k vs $9k prior, but margin percentage diluted. Risk: if commodity prices fall or utilization stays flat, EBITDA per ton compresses further.

Copper acquisition (RMIL) paid premium and currently ROCE is 20%, dragging company average below 25% target. Risk: if copper utilization/margin improvement slips, ROCE recovery delays and shareholder returns compressed.

Lead volumes down YoY for first time despite capacity additions. Supply disruption is near-term, but risks: lead market is cyclical; customer base concentrated (OEM dependency); alternative scrap sources may not materialize if geopolitical issues persist.