Strong revenue growth overshadowed by 3.4pp margin miss

Delivered ₹4,214.5 Cr (+23.9% YoY), lead-acid ~₹4,004 Cr

Delivered OPM 9.6% consolidated, down 0.5pp due to New Energy costs

Q1 delivered 4.5% NPM vs 13-14% target; full recovery remains hedged on commodity stability

Now demand-contingent; management says 'milestone can change', pursuing 15-20% market share instead

No customer names or hard contract values disclosed; claim relies on 'order book we are seeing'

Prior FY30 ambition (₹9,000 Cr capex) now demand-contingent; management reframed as 15-20% market share pursuit. Implies capacity additions below 16 GW possible based on demand signals.

NMC tie-up 'did not go through as planned.' Pivoted to internal R&D + 'plan B' (teams improving cells beyond partner tech). De-risks tech but extends timelines.

No new EBITDA margin target issued this call. Q1 delivered 9.6% vs prior 13-14%. Management attributes miss to temporary costs (brand, initiatives) + structural headwinds (raw materials, warranty), but has not re-guided.

FY27 capex ₹1,700 Cr (₹1,300 Cr New Energy) reaffirmed within prior ₹1,500-1,700 Cr band. But scope (16 GW → demand-driven) is now flexible.

Q1 automotive exports -20% YoY due to Middle East freight costs (alternate sea routes expensive). Management says recovery dependent on 'normalcy' + 'how geopolitical situation evolves' — contingent, not assured.

3% Q1, 2-3% this month. Raw materials (poly, sulfuric acid, alloys) still rising. B2B pass-through delayed vs B2C. If prices stabilize, 2-3% more hikes should suffice; if not, further increases needed.

Brand & Amaron Assist pilot temporary. Factory of the Future capex-like (cannot capitalize). Warranty provisions one-time hit on P&L. Freight & fuel may recur due to geopolitics. In 2-3 quarters, brand/efficiency spending should normalize.

Capex ₹250-300 Cr, 10 GWh. Asset turns higher but not quantified. Margins 5%-6% to 7%-8% (pack-like, improving with localization). Advantage: customer relationships, eventual cell localization via government support.

Due for delivery in Q3.

Reasonable order book visibility with major EPC players. Within 6 months of commissioning, expect 5 GW utilization based on market demand for solar energy storage. Thereafter, depends on market.

Once initiatives (brand, debottlenecking) complete, will see reducing trend. But freight (higher fuel) & warranty (higher raw material) will persist until commodity prices stabilize. Other costs (employee, admin) under moderation.

Automotive exports -20% YoY due to Middle East freight. Expecting recovery in subsequent quarters as sea routes normalize. UPS +10%, telecom lithium +50%, other industrial 5-6%.

Won't quantify asset turns yet; depends on product mix. Economic metrics likely in line with pack business. Picture will clear after 6 months of operation.

2170 NMC B samples in production. OEM testing will be extensive; C sample & homologation take time. Storage customers faster than EV. LFP can be tested at facility.

Gotion did not go through as planned. NMC: tech absorbed, team improved beyond partner input. LFP: plan B in place, no new partnership yet. Case-by-case basis; geopolitical constraints rule out broad China arrangements.

16 GW was initial strategy (₹9,000 Cr, market size 100-130 GW). Now demand-driven; capacity/timing can change. Strategic direction 15-20% market share still intact. Redundant capacity taxing, so demand-aligned expansion.

Domestic aftermarket: 2-wheeler lower double-digit, 4-wheeler 7-8%. Full-year lead-acid (incl. industrial, exports) estimate 9-10% (industry view, not formal guidance). EV penetration will moderate later.

Depends on customer mix & credit terms. Estimate ~90-100 day cash conversion cycle (pack business analog). Not certain without knowing cell procurement credit arrangements.

Plan B in place. Teams working on product development. ₹100-150 Cr R&D spend this year. Premature to commit specific timeline; depends on development program for cell type. Industrialization key.

3-4 player market expected domestically. Won't compete inter-India; will compete with China imports. Price gap 15-20% vs China due to supply chain maturity. No inter-India price war expected.

Multiple options. Holding company cash flow ₹700-800 Cr post-tax post-dividend. Risk capital ₹2,500 Cr covers 5 facilities. Future capex: need to explore options based on business cases.

Speed of change has moderated. Capex should serve product for reasonable time. Need fungibility between products. R&D effort cannot be reduced; teams must continue developing for market requirements.

Not aware of specific restrictions on battery cathode/anode. Processed material still flowing. Broader supply chain localization a long-term industry goal. Will monitor; no current barriers noted.

Domestic aftermarket 7-8% (4-wheeler) to lower double-digit (2-wheeler). Will improve once international recovery kicks in. EV penetration will moderate later.

Customer qualification plant live (July). Ramp dependent on OEM/storage customer acceptance. EV cell orders pending homologation completion; storage (LFP) faster path.

Q1 delivered 9.6%. Management cites temporary cost pressures (brand, initiatives, ~1 pp), structural headwinds (raw materials, warranty, ~2-3 pp). Recovery tied to commodity price stabilization + initiative completion.

Conservative case 5%-6%, upside 7%-8%. Asset turns higher than pack business but not quantified. Margins expand with local content & scale.

Q1 spent ₹450 Cr. Giga 1 cell plant (H1 FY28), BESS 10 GWh, E Positive facility, 2 GWh NMC line. Capex outlay 'majorly towards upcoming facilities.'

Sulfuric acid, poly, alloys rising substantially. 3% Q1 hike & 2-3% planned insufficient if inflation continues. B2B segment delayed pass-through vs B2C. Warranty provisions hit P&L for entire unexpired product base.

Automotive exports -20% YoY primarily Middle East due to expensive alternate sea routes. Recovery assumed but contingent on geopolitical normalization. Reversal could extend margin pressure.

Gotion tie-up failed; NMC tech absorbed internally (risk of unproven capability). LFP development has no committed timeline ('premature to comment'). 16 GW FY30 target de-guided to demand-contingent. R&D spend ₹100-150 Cr/year ongoing, with no path to profitability visible.

Price gap vs China 15-20% due to nascent Indian supply chain. 3-4 domestic players expected; no inter-India price war anticipated but imports will pressure. Cathode material fully China-dependent; localization aspirational (long-term).

Order book described as 'reasonable' but not quantified. Management expects 5 GW utilization within 6 months; thereafter depends on market. Capex ₹250-300 Cr; margins 5-8%. If demand disappoints, returns could lag expectations.