Ddev Plastiks Industries Limited ($543547)

Ladies and gentlemen, good day, and welcome to Ddev Plastiks Limited Q4 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as of date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Selina Sheikh from Go India Advisors. Thank you, and over to you, Ms. Sheikh.

Good afternoon, everyone. On behalf of Go India Advisors, I welcome all of you to the Fourth Quarter and FY '26 Earnings Conference Call of Ddev Plastiks Industries Limited. Today from the management, we have Mr. Narrindra Suranna, Chairman and Managing Director; Mr. Dev Surana, Whole Time Director and CEO; Mr. Rajesh Kothari, Whole-Time Director; Mr. Arihant Bothra, Chief Financial Officer; and Dr. Rakesh Tiwari, CEO of Renewable Energy. I now hand over the conference to Mr. Dev Surana for his opening remarks, and then we will open the floor for question and answers. Over to you, sir.

Thank you. Welcome to the Ddev Plastiks Quarter 4 Financial Year '26 Earnings Call. We appreciate your time and continued interest in our journey. Yesterday, our Board of Directors approved the financial results for quarter 4, and we are pleased to share with you our performance highlights, key developments and outlook for the future. In its April 2026 India Development update, the World Bank projects India's rural GDP growth at 6.6% for financial year '27, a moderation amid elevated energy prices, yet positioning us among the fastest-growing major economies worldwide. Even as the West Asia conflict dampens market sentiment, our growth trajectory remains resilient, underpinned by robust domestic demand and sustained manufacturing momentum that buffers external shock. Our growth-focused budget with elevated government CapEx alongside fiscal prudence progresses on the FTAs, lower U.S. tariff and supportive domestic policies will further strengthen this outlook, complemented by steady investment flows also paves the way for demand-led economy recovery. Financial year '26 presented challenging external environment shaped largely by the Israel-Iran conflict that escalated from 28th February, disrupting export transit routes, tightening raw material availability and triggering steep input cost inflation. The demand sentiment to an extent was dampened by consequent rise in selling prices on the back of the geopolitical developments in the Middle East, but our teams executed with agility and resilience, enabling us to sustain momentum. Against this backdrop, Ddev Plastiks delivered a resilient performance. Our revenue grew by 13%, exports rose by 30% and our export volumes expanded 23% as well. Overall volume growth of 6% would have approached 10% under normal conditions. Our HFFR capacity sustained utilization of nearly 50% throughout this period of turbulence. And our new Bhiwadi facility commenced commercial operations in the last week of April this year. This outcome reflects the strength of our operating model, disciplined execution and a dominant position as India's largest listed polymer manufacturer. India's domestic wires and cable sector continues to thrive with robust growth fueled by surging demand across key areas, the rapid adoption of renewables expansion in transmission and distribution networks and the nationwide push for data centers. The ongoing global geopolitical crisis has intensified focus on localization in a big way, reducing import dependencies and bolstering opportunities for homegrown manufacturers. This plays directly into the strengths of Ddev Plastiks a leading domestic polymer compound producer with deep roots in this space and proud legacy spanning 3 generations, positioning us ideally in meeting this escalating demand with reliable higher quality solutions for wires and cable manufacturers. Our strategic priorities at Ddev Plastiks remains firmly anchored to our guided vision of achieving business -- consolidated revenue of INR 5,000 crores by financial year 2030 from polymer compounding business. This ambition is not nearly a target in its natural outcome of a disciplined growth road map built on expanding capacities, deepening our geographical footprint and fulfilling ever-growing demands of our customers. To sustain this momentum, we have strategically invested in both brownfield and greenfield expansions, elevating our total installed capacity to 2,68,400 metric tons per annum this fiscal year, adding another additional 30,000 metric tons per annum overall, another 48,000 metric tons dedicated to XLPE in operation from April 2026 onwards at a committed CapEx of INR 80 crores. This capacity addition will take our overall capacity to a level beyond 315,000 tons per annum. Even as the global macroeconomic landscape underwent significant turbulence through FY '26, we navigated these headwinds with prudence, ensuring operational resilience and long-term vision remains intact. In summary, Ddev Plastiks stands at a compelling inflection point, a proven core business growing with intent, complementing by a forward-looking entry into the energy storage space as well. We are confident that the foundations we are laying today will deliver sustained and superior value to all our stakeholders in the years ahead. Across the organization, our focus remains on executional excellence, translating strategy into outcomes and strengthening the foundation for long-term growth. Looking ahead to financial year '27, we are confident of sustaining our growth trajectory, targeting a volume of 231,000 metric tons per annum with a capacity utilization of 73% and a year-on-year revenue growth of 13% alongside top line expansion, we remain equally focused on margin quality with EBITDA margins anticipated at approximately 11%, reflecting our continued emphasis on operational efficiency and value-accretive business. BESS revenue has not been included in the above figures and will be additional to these numbers. Beyond the core business, Ddev Plastiks recognized early in the transformative opportunity unfolding in India's renewable energy ecosystem. Accordingly, we have taken a strategic decision to foray into battery energy storage system sector, a critical enabler for renewable energy integration and grid stability. With India entering a multiyear storage capacity build-out, underpinned by strong policy support, this segment offers compelling and long-term growth visibility. Our BESS road map is ambitious yet measured. We aim to develop 5 gigawatt of installed capacity in a phased manner with each gigawatt projected to generate approximately INR 800 crores to INR 900 crores in revenue. This positions BESS as a meaningful and incremental contributor beyond our INR 5,000 crore revenue aspiration from the polymer compounding business by FY '30 with an anticipated top line -- additional top line of INR 2,000 crores to INR 2,500 crores alone from this vertical of BESS. Now I hand over to our CFO, Mr. Arihant Bothra, for his remarks.

Thank you, Devji. For the full year ended March 31, 2026, we are pleased to report a strong and resilient performance. Our financial year '26 revenues grew by 13% year-on-year basis, driven by robust momentum in the cables and wire segment. EBITDA grew by 12% year-on-year with margins at 11%, a commendable outcome achieved despite multiple industry headwinds and softer trade sentiment amid the ongoing geopolitical tensions in the Middle East. We closed the fiscal at a PAT of INR 202 crores, registering a growth of 9% year-on-year basis, a reflection of our sustained operational discipline and earnings quality. The performance is largely structural in nature and is a direct outcome of our deeply entrenched market position, wire and cable manufacturers, our unwavering commitment to quality and our proud record of zero rejections to death. The intensification of the Israel-Iran conflict between 28th February till date introduced material macro headwinds for our business, disrupting export logistics and creating significant volatility in the raw material availability and cost. The sharp spike in input prices necessitated a pass-through to selling prices, which temporarily softened market demand. Encouragingly, the situation has begun to stabilize from April. However, we continue to monitor the geopolitical landscape closely and remain agile in our response to any further developments. Operationally, our volumes for financial year '26 stood at 2,01,370 metric tons per annum, translating a capacity utilization of 77%. The modernization in utilization level is attributable to the inclusion of 30,000 metric tons per annum of incremental capacities in PVC and HFFR added during financial year '26, which had limited operating time during the year. Turning to our balance sheet. We continue to maintain a strong and resilient financial position. Our net worth increased to INR 1,013 crores, reflecting a growth of INR 179-odd crores over the previous year and underscoring our disciplined approach to cash flow management. During financial year '26, we incurred a capital expenditure of close to INR 100-odd crores. Looking ahead, we plan to invest further INR 175-odd crores in financial year '27, primarily towards expanding our XLPE compound capacity with investments earmarked for our diversification into BESS as well. We are pleased to propose a final dividend of INR 1.25 per share for financial year '26 as a final dividend, reaffirming our commitment to delivering consistent returns to our shareholders. With this, I end my remarks and now open the floor to question and answers.

[Operator Instructions] The first question comes from the line of Archana Gude with IDBI Capital.

Congrats on good set of numbers, decent performance despite the challenging times. Sir, 3 questions. Firstly, in the opening remarks, you spoke about 13% revenue growth and 15% volume growth for FY '27. So is that we are expecting some [ NSR ] kind of degrowth over FY '26? Any challenges on that front, sir?

No. What we have done is we have considered the average realization for the current year as the base prices because in the current year, there has been multiple cycles of escalations. And the current [indiscernible] are expected to be coming down when the war situation neutralizes. So we have considered on [indiscernible] NSR, which we have achieved this year. Though for the current first quarter, the average NSR will be much higher as compared to what we have taken on a conservative basis.

Okay. Okay. And sir, this 30% growth in export is pretty commendable. So can you help us understand how was the performance in Q4? And how were the first 2 months of Q1 of FY '27? Do we see any negative risk to the business in terms of export?

See, as far as the actual scenario is concerned, I can comment on the month of April, we have done reasonably well. And the consignments stuck in the month of March due to logistics issue. A lot of those consignments have been transited in the month of April. So on a nutshell, I can say you, the average volume in exports have gone up on a month-on-month basis in the month of April and to some extent May as well.

Okay. So you are saying that March was the kind of the lowest and then things have kind of improved for us, right?

Yes.

Okay. And sir, for this other income in Q4, there has been substantial jump. So what contributes this other income, sir?

Actually, it's mainly the M2M gain with regards to the debtors and all. So there are 2 different reporting parameters as far as Ind AS is required. So the gain on the debtors and everything is reported as other income, which is close to INR 10-odd crores, whereas with regards to the forward contracts and the imports is reported in the other expenses, which is close to INR 11-odd crores. So if you knock out the net impact is INR 1-odd.

Right. Understood. Maybe lastly, if I may. So this inventory and receivables have gone up at the end of FY '26. So is that some contracts are still to be fulfilled? Or how exactly the numbers are there?

So since we have highlighted already, the average raw material prices have gone up substantially. There is a steep increase in the prices, close to 50-plus percent. So now that is the impact of that only. If you see -- if I even consider 50% to 60% price increase, last year, we had an inventory of close to INR 50-odd crores. And if you pull out 50% even that, then also the current inventory is comparatively comparable. And same is the situation for [Technical Difficulty] debtors are comparatively on a more controlled levels as compared to the inventory.

Next question comes from the line of Bhargav Buddhadev with AMBIT Capital.

Congrats on a good set of numbers. Sir, my first question is that in your guidance, you mentioned that you are not including the revenues coming in from BESS. So any particular reason why we are not including this?

This is the first year for us. So there will be some ramp-up time, which will be required to stabilize the production. And that is why as far as revenue guidance is concerned, though we consider it will be in the range of INR 200-odd crores of revenue. However, for revenue guidance, we haven't considered anything.

And at what levels can we breakeven in this business as a separate unit, BESS?

Close to the revenue we anticipated for this year, INR 200-plus crores of revenue will be a good breakeven point.

So there won't be any loss as such in FY '27 from this?

No.

Secondly, sir, obviously, we got the benefit of price hikes in the month of March given our inventory. But in April, is it fair to say that we've taken the full price hikes or it is happening on a calibrated manner?

So in the month of March also, we have played, I will say, a balanced approach. Wherever we had inventories, we have committed to our orders. And wherever I think the new orders we have taken at an average better rate. I think Kothari can add much better to what I can add.

See, in the month of March, also, we were able to pass on the increase to a great extent. And in the month of April also means March was the worst performing month if you look at the -- what you call pass-on effect is concerned. So we don't think that April will be worse than March. It should be probably better than March.

No, because, sir, in March, we would have low-cost inventory, but in April, obviously, inventory purchased in March would get sold out. So in April also, we have taken price hikes or...

Yes, yes, we have taken price hikes starting from the March itself, okay? So even for the contracts, okay, which we were holding in hand and whatever the shortfall was there for the inventory, there also, we have been able to affect some price impact, price hikes and customers have accepted looking at the situation. So March, of course, means the full price hike was not available. So March, there was an impact on our profitability. from the pass-through point of view because the inventories, when we talk about the inventories, there are 2 kind of inventories. One is there in your hand and another is the orders which are in transit. So what happened that in the month of March, the cargoes, which were supposed to come in the month of March, they didn't arrive of the low price. So you have to buy at the spot price, which was higher and we passed it on to the customer to some extent. So March, we took some hit on account of buying something on the spot. But the advantage of held up cargo coming in the month of April at a lower price and that being used against the higher price. So April will, in fact, would show better picture than March.

Okay. And lastly, sir, on the export side, if you can spend some time which geographies you are incrementally seeing demand post the war situation. Any particular country where we are gaining significant market share post this Iran war?

No. All markets have contributed well up to Europe, I would say, because it had not impacted demand sales point of view. Latin America and North America has not shown any growth, but rest of the world, say, MENA region mainly, Middle East and North Africa has contributed strongly to our numbers.

So there, we are seeing business. It's not that the business has become negligible in.

No, no, no, no. There the business is strong.

[Operator Instructions] Next question comes from the line of [indiscernible] with Swan Investments.

So sir, my first question is that currently, overall, you can witness that government is decreasing its spending, which could impact infrastructure. So do you see that this could dampen our demand for wires and cables and thus have further pressure on us and have pressure on our working capital because of delay in payments?

Yes. So, of course, this industry is connected with the government spending. But over a period of time, we have seen that this industry has diversified means the cable producers today are not only dependent upon the government spending on infra project because solar and all activities are equally done in the private sector. Solar installation is done with an equal intensity from the private sector players, be it Adani, be it Tata, be it JSW, be it Reliance. So that is continuing to generate demand. That is one part. Second is, of course, one may assume that government spending will go down. But again, government has to prioritize where to spend. And looking at the energy disruption, energy sources disruption, the government is putting even more rigorous efforts on renewable side. That is second. Third, we might have all seen that the peak demand for energy during the summer season is going to be a big challenge. And for that, a lot of efforts are being made to keep our grid and the distribution system in a healthy manner. So all these things are going to support the demand for wire and cable industry. And on top of that, the demand for the reconstruction and demand for keeping the safety stock of all critical capital goods item, the cable demand has gone up in the Middle East and North African region, the regions which have been affected very badly by this war. So we do not see any impact on our demand or our financials or our cash flows because of this perceived cut in the government spending.

And sir, we are guiding volumes of 2.3 lakh for FY '27, while our capacity would almost be 3.3 lakh tonnes. So are we trying to be conservative? Or are we expecting some headwinds during the year because of which we are giving a lower guidance?

No, no, sir. Capacity addition is being done in the spur because, say, for example, in Bhiwadi, we put up a capacity of 48,000 tonnes, knowing fully well that 48,000 tonnes will not be consumed cannot be sold out in 1 year's time. But you cannot -- because there is a scale with regard to your equipment and installation and this and that, to achieve that scale and to give the mass to that particular unit, we have gone ahead with the capacity addition of 48,000 tonnes, which should be fully utilized maybe the next financial year means 2027, '28. So because of that, you'll see a little lower capacity utilization against that capacity addition. And as Arihant also said in the opening remarks that this year capacity addition versus the utilization might seem low because much of the capacity has come up in the last, say, 3, 4 months' time. If you look at the total capacity of 315,000 tonnes, you will see 80,000 tonnes has come up in last 4 months.

Would it be fair to say that in FY '28, we assume volumes of almost 2.7 lakh to 2.75 lakh or that is a bit higher on the higher side?

See, if we are saying 2.3 this year, so 12% to 15% jump for that year also, which will take it close to those levels.

Okay. Got it. And sir, for our BESS project, have we signed or approached new clients or as of now or that would be post the commencement of the capacity itself?

Tiwari-ji is here, though. I will just like to add though Tiwari-ji can give it a better shot. We have started approaching customers. We have started discussing with them. We have started to understand their requirement. And in a lot of areas, we are discussing on the technical front as well. Tiwari-ji, if you can add a couple of sentences.

Good morning to all of you. This is Rakesh Tiwari, CEO of Ddev Clean Energy. We had already discussed with all the Tier 1 developer in India, including Sterling, Wilson and Enrich and Orange. So this customer, we already started to pitching and demand is high. And just we started to have their quality parameters, validation, quality supply chains, all the documentations required. So we had submitted all the documentation to -- by the supplier quality audit point of view. So next couple of months, they will see this our factory readiness. And after factory readiness, we'll sit together and we'll sign MOU for a long term to supply in the gigawatt hour scale. Our's not only container and our base container with our solution. So we are working for all these sectors where this grid is instable and the government is mandatory that you have to put solar plus renewable energy sectors. So solar cannot be put across the country without energy storage system. So we already discussed with all the developers are running from 20 years in solar sector. So this is my remarks. And if you -- any particular questions, please let me know.

Next question comes from the line of Varun Singh with AlfAccurate Advisors.

My first question is regarding this battery energy storage system. I think in the PPT, you called out some INR 200 crores of investment. And over and above this INR 175 crores, we are supposed to outlay for the compounding capacity expansion. So net-net, around INR 375 crores or INR 400 crores would be the total CapEx for FY '27. Is that understanding correct?

No, no. Let me correct you. Total outlay for this financial year is INR 175 crores, including BESS. And out of the INR 200 crores of BESS, there is a phased manner of implementation, which will be happening. So this year, we are allocating close to INR 70-plus-odd crores for BESS.

I see. So INR 70 crores for BESS and the other INR 100 crores would be for the capacity expansion.

Yes.

Understood. And when you said that the initial EBITDA margin are pegged 5% to 8% lower than the core compounding business. So I mean, this means what? The EBITDA margin would be just 2%, 3% in FY '27 in this segment?

For BESS?

Yes. Yes, yes for BESS.

As I mentioned just a couple of minutes ago, we are targeting breakeven in this particular financial year, achieving a turnover of close to INR 250-odd crores. So margins from that perspective will be comparatively less. However, in longer term, it also entails a good margin beyond 10%.

Okay. So in FY '28, we should expect maybe around 10% EBITDA margin.

Right. Understood. And also like -- so you are expecting around INR 300 crores to INR 500 crores revenue in the financial year '27 and maybe neutral PAT. But in FY '28, that INR 900 crores revenue should contribute minimum maybe INR 80 crores, INR 90 crores to EBITDA. That understanding is right. Current year, we are close to INR 200 crores to INR 250 crores because the machine will stabilize, there will be ramp-up. It will be taking some time. However, from next financial year, yes, you're right. We are targeting 1 gigawatt hour of sales and close to INR 800 crores to INR 900 crores of revenue, expecting EBITDA margins of 10-plus. So INR 80 crores to INR 90 crores of EBITDA, which we are anticipating is something which we have also factored in our estimates.

[Operator Instructions] Next question comes from the line of Nikunj Doshi with Bay Capital.

Yes. I just wanted to understand a bit more on the battery energy storage system project. What is the -- what are the raw materials? How are they sourced? From where they are sourced? And are there any challenges in sourcing of the raw materials and supply chain?

Sir, actually, we already identified with our suppliers is mainly like lithium cells and other component like encloser and harness, DC cables, sensors, cooling system, liquid cooling systems. So these are the major things we need to make battery we can make our container also. So total vendor is very limited and number of vendors are too much across the globe. We have already identified and we already visited to all the suppliers. [indiscernible] in terms of financial, in terms of quality, in terms of their long durations, reliabilities and we already identified each and every supplier. So regarding the sourcing point of view, we are make sure that all the suppliers should not be any hampered with our production and which we can achieve our target. So we selected the supplier based on the quality for must and the delivery times. And of course, the Tier 1 financial ability so that the supplier can continue to provide the services year-on-year for a long time. So these are the typical which I just mentioned mainly like our [indiscernible] and enclosures. [indiscernible] system [indiscernible] BMS the main component, which are in the energy storage system. So we already identified and locked this our supply sourcing for a longer period of time.

And is there any approval cycle from the customer side once you supply this storage system, is there any process for getting this approved? And is there a time cycle related to that because then the regular supply starts or something?

Yes. So far that we already mentioned in the last question which ask with someone my friend. And these are -- the approval system is mandatory in battery energy storage system like a solar because the battery energy storage system is a reliability product. It cannot be for the 1 year. It is like [Technical Difficulty] more than [Technical Difficulty] So these are the reliability [Technical Difficulty] is validated your factories, your products and whatever the reliability test is mentioning like charging, discharging, IP test, water test, heating test, patch test. So these tests are mandatory. And these tests are mandatory based on what because they ask about the certification, certification [indiscernible] 9540 even [indiscernible]. So these are the base guidance the developers follow the as per IC standard. So because as per IC standard, fire and safety concern. So they are validating from documentation to reliabilities each and every parameter. So we started to discussion, we already submitted what we have and what we applied for this longer period for certification and all the things. So it takes around 3 to 6 months, minimum 3 and maximum 6 months to board on any big developer. So we already started from the 4 -- 3 months ago. So those data we have available, we already submitted. And those we are under process like a factory audited and the certification will process and will submit it in a couple of months. Thank you so much.

So we don't expect any delay in supplies because of this approval cycle or anything. So whatever we have assumed for next year, we are confident that we'll be able to deliver, right?

Yes, sir. So that's why -- so that's why we already started to follow the process with all the developers. So we are -- this -- because they have the long and long period of validation of from factory readiness to documentation. So we are parallelly working on for that so that we should not divide -- we should not be surprised when our product will start and sell in the market. So before that, we will submit all the necessary document to developer and get the developer approval from them right.

And regarding the polymer business, just wanted to understand we guided for 11% EBITDA margin, which is almost same as the FY '26. So are we not expecting any operating leverage to -- on the margins for FY '27.

Arihant, maybe our CFO, Mr. Arihant, will reply this question. Arihant, over to you.

So see, in the current fiscal year, we have already seen elevated raw material prices because of which the availability as well as the risk of any substantial price increase and decrease volatility remains. So we don't want to have, you can say, aggressive estimates, which may be difficult to comment tomorrow. So we have always presented a conservative approach every time we have projected our numbers, and that is the same way we have projected this time as well.

The next question comes from the line of Arya Shah with Whitestone PMS.

I just wanted to understand the HFFR and XLPE market. So basically, who is our competitor? And what is the entry barrier? And are we the biggest player there?

Yes. HFFR is a kind of a product -- the XLPE is a kind of a product which is used for the cable. I think for this discussion, it might not be the appropriate platform because for this, you need some graphics and something like which we can explain that what is the cable and what is the role of the conductor. Conductor carries current and the insulation compound is insulating compound over a conductor and then HFFR is a jacketing compound to protect the entire system against fire, against hazardous conditions. And as far as the competition is concerned, in XLPE, we are the largest player. We are having major market share. So in XLPE, the competition is from overseas players like Dow and Borealis. Now the low-voltage fire-blast segment, there are a couple of Indian producers like Polymers. And in HFFR, Shakun Polymer is, which is now part of Orbia Group from Mexico. They are our competition. And as far as the entry barrier is concerned, it is -- I mean, it is a very critical and reliability related product. So proven performance is the biggest entry barrier. Those who are performing for a long period of time will gain business. Somebody coming up the capacity instant and trying to secure the business, it is not something which is possible. You have to go through the approval cycle. And even despite going through the approval cycle, once you are approved, then you have to establish your performance over the period of time to become a leading and reliable supplier.

Okay. And so we're not seeing any import pressure from China or anything like that for these 2 compounds, right?

No. See, China import pressure direct or indirect will always remain in every segment, but our scale and our capability is quite strong, and we are able to face it off without any challenge.

Okay. Sir, my next question is about the -- so basically, there's a price volatility going on right now. So we still operate at a fixed EBITDA margins of INR 14 to INR 15 per kg or it has changed?

Yes. We are able to pass through the price increases, which means we are able to maintain our fixed margins per kg basis.

Okay. And sir, also, I wanted to understand that are we supplying to any data center cable operator or an optical fiber, something like that in those segments?

See, the data center because we are supplying to the cable producers, and they are in turn supplying to data centers as well as for the optical fiber application purpose. But for this optical fiber, our product application is limited. But for data center, of course, our products are used by cable producers. Every cable producer is using our product for the cables being supplied for data center.

[Operator Instructions] Next question comes from the line of [ Nishita Shanklesha ] with Sapphire Capital.

So I had a question on the ramp-up of BESS we are going to do. You mentioned that this year, we can have around INR 200 crores to INR 250 crores of revenue from that. And then in FY '28, we can go up to 1 gigawatt hour. So beyond that, are we -- since we need -- we are going to add 5 gigawatt hour in total, are we going to keep adding 1 gigawatt hour per year? Or how is that going to be? How is the ramp-up going to be?

So it is more dependent on the forward strategies which we take dependent on the per gigawatt sold in the market and the market dynamics. There are multiple opportunities in the market. There is opportunity for solar plus BESS. There is opportunity for stand-alone BESS. There is opportunity for data center batteries and there are opportunities for C&I as well. So as we move into the market, we'll slowly and gradually pick each segment smaller proportion-wise. And that is how we will, at the next stage, decide which segment to be ramped up faster. So as of now, it seems utility scale solar plus BESS and stand-alone BESS are direct segments where the supplies can be going faster, whereas C&I and data centers are area where the product is much more complex, but it entails a very good margin. So we will be having a mix of both and slowly and gradually we will be ramping up the capacities.

Okay. Okay. Understood. And just a clarification. Am I correct on the part that in FY '28 also you mentioned we are assuming 15% volume growth over the base of FY '27?

Yes. FY '26 base to '27 or '27 base to '28, what is the exact question?

In FY '28, we are expecting 15% volume growth on the base of FY '27, Am I correct?

Yes, yes. See, Arihant, this question with regard to polymer compounding. So we are expecting 15% growth -- volume growth over what we achieved in 2026, '27. Means in 2026, '27, if we are targeting a polymer compound volume of 230,000 tonnes, then in 2027, '28, you can add on another 15% on that 230,000 tonnes.

Next question comes from the line of [ Hrishit Jhaveri ] TBA Asset Managers LLP.

The first question is what is the general price pass-through lag which we take into consideration? This is the price volatility? And how do we tackle the fixed price contracts?

Arihant, do you want to answer or should I?

Please, please, please. You answer it.

Yes. So can you please repeat the question? I couldn't get the question clearly.

Okay. So the first part was that whenever there is a price hike or drop, what is the pass-through lag? Do we immediately pass through or there is a lag that is felt on the books?

Yes. See, mostly, it is a lag of 7 days to 15 days. But again, it depends upon the intensity of the price hike. For example, the price hike is less than 8%, okay, then 7 to 15 days lag is there. But a price hike, as we have seen, which was very volatile and very aggressive price hike in the month of March, then the pass-through was instant.

Okay. And how do we tackle the fixed price contracts or annual contracts?

No, we don't have those kind of annual contracts. Maximum cycle of the contract, what we have, and that is for mostly export, and that is around, say, you can say maximum 90 days. And there also, we have back-to-back import bookings. So that kind of open-ended contracts are not there.

Okay. Understood. And sir, given the disruptions in the export market, how do we see exports panning out in Q1 as well as for the full year? What is the export growth guidance that we are commenting on?

See, first quarter visibility is already there. So we say that first quarter will see the continuity of the growth, which we have seen in the last quarter. And projecting at this point of time with this kind of geopolitical uncertainty for the second or third quarter would be a little bit of a challenge. So -- but the important factor is that we are having so many approvals and reach to so many markets for so many years. So we are confident that we'll continue to do well. But putting an exact growth percentage would be a channel, but we see that our core markets, which is MENA region, is growing and also some parts of Europe, they are growing very well. So we are confident of maintaining the growth momentum.

[Operator Instructions] Next question comes from the line of [ Apurva ] With ANS wealth.

So my questions are on the compound manufacturing side, what are our major raw materials and from where do we source it, like whether we source it from domestically or do we import? And is there still an availability issue? And how much the price movement being there?

Arihant, go ahead, please.

So we source from both domestic and import sources. In domestic we have all the big petrochemical players as our suppliers. Similarly, on import side, we rely on a lot of big players in the Middle East as well as in European countries. And there were issues till, I will say, mid of April, where the supply constraints were there. However, today, the supply is more or less normalized. In India, we are getting sufficient material and import slowly and gradually are coming into the country. As far as the price is concerned, there has been substantial volatility and the prices have gone up beyond 50% inflation. And now the prices are comparatively stabilized. And now not much, you can say, volatility is there in the prices unless and until there is a price -- this war is over and then the crude prices gradually come down.

Got it, sir. Sir, my next question is, how is the demand currently because of the spike in the prices, right? So are we getting sufficient orders right now? And -- and is everything normal because of war? Or do you feel this might continue?

As Kothari-ji highlighted earlier, that cable manufacturers have diversified over a period of time. And now they have sufficient demand, not only with regards to government, but private demand, private CapEx as well. So we are getting sufficient order book, and there is no lag as far as the booking is concerned.

Okay. Okay. And sir, my last question on the industry side. So sir, do we preserve risk of our clients going backward integration and our clients doing compound manufacturing as well?

Kothari-ji?.

Yes. See, it is a risk which is attached to our business, and it will always remain. That customer can go for backward integration. But again, it is the effort versus return every customer has to look at and the scale at which they can beat our size and the scale, then only they can think of. And then you need to have the skill and scale both. And that is where we are finding that for last so many years, sustaining with this risk of backward integration, we have continued our journey and we continue to grow. So yes, theoretically, this risk is there, but we are doing everything possible and within our means to mitigate that. That is by increasing our scale, increasing our skill and adding product range, which is not easy for somebody to go and do the backward integration.

Next question comes from the line of Arya Shah with Whitestone PMS.

So regarding BESS, what exactly are we doing? So basically, are we going to like import sales from China and then assemble here? Or what exactly are we doing on the BESS side?

Yes, initially for the initial period, we are going to import it from China. And over a period of time, we will be working on backward integration or [indiscernible] of many components, which are easily available in the country. Still as of now, we don't have sufficient capacity in the country, and it will be imported for the near future.

So basically, it's an assembly line on the BESS side, right?

Yes.

[Operator Instructions] Next question comes from the line of [ Yashwant ] an individual investor.

It was a good set of numbers. But I have a question on BESS segment. So actually, in the BESS segment, the management has confirmed that it is going to be an assembly line. The actual IP lies in energy management system or battery management system, right? Are we planning to even import that product? Or are we going to have our own IP on those things? What is the plan right now on those things?

Tiwari-ji.

Yes. Thank you so much for your concern. And yes, it is a very important question regarding the BMS and EMS in future, we are going to make our own BMS and own EMS already started working on that. [ CMS India ] will be restricted after 1 year, they are going to start the BMS must be from India. So we already started to work for EMS. EMS concerned for AC side of the DC block. So -- but for BMS, definitely we'll have to import from China initially from Tier 1 supplier because the hardware part is available only in China. And few [ Merin ] India, they have started to develop CMS in India. Meanwhile, Government of India is allowing you can import BMS from China. But EMS, you must start developing made in India so because BMS is the core of the battery energy storage system. And so the government does not want to any risk to [indiscernible] is not available in India. So they allow that you can [Technical Difficulty].

Sorry for interrupting. Your voice is breaking.

No, no. Actually, I'm just explaining about BMS. BMS is the core bone of battery and management systems. And without BMS, EMS cannot get any information from the battery side. So BMS definitely will starting, we'll buy from Tier 1 supplier from China. But in future, in the couple of months, we will have our own IP of BMS and EMS both. This is our future plan. But initially, we will start from China.

So what is the plan for working capital requirements as in the call, you have mentioned that it will be in a single-digit margin, right? And if the revenue expectation is about INR 800 crores to INR 900 crores for 1 gigawatt, if it is 5 gigawatts in future, how are we going to fund the working capital requirements for BESS projects?

So for the first phase of 1 gigawatt hour, we have plans that the total working capital requirement will be in the range of INR 200 crores to INR 250-odd crores, and we have sufficient limits available with us for that funding the same as well as the margins for them are also similarly available with us as a free cash flow. As far as the full 5 gigawatt hour capacity is concerned, definitely, we'll work out and think of increasing the cycles from banking channels as well as other channels as well.

Thank you for all the information that you have provided. We actually look forward to do something in India in the future on the manufacturing side as well apart from assembly.

Next question comes from the line of [ Alok Vakil ] an individual investor.

So in XLPE, we are -- we have reached up to the capacity of 132 kV and 66 and 132. So what about further 440 and all reaching that where are we in compounding for that higher kilowatts.

So if you see each and every high-voltage cable stabilization takes time as well as the next voltage stage will be requiring a lot of certifications for which the life time -- the life required is minimum 3 to 4 years' time. So right now, once 132 kV stabilizes in the Indian market, we'll start working on 220, which is expected to take around 3 to 3.5 years minimum for getting the certification and then the testing period. So we anticipate 4 to 4.5 years. So we have targeted 2030 for our 220 kV cable compounds, whereas 440 will take further time based on this.

Okay. And what about HVDC side for this solar and wind and all?

Again, HVDC is for the higher voltage applications mostly. So these are the products of the future. And globally, if you look at, there are very limited players in this segment. So of course, we will attend and manufacture these products, but not having any concrete plan at this point of time. At this point of time, our plan is highest is up to 220 kV by year 2030.

[Operator Instructions] Next question comes from the line of [ Apurva ] with AMS Wealth.

Sir, my one question was what is our major raw material, if you can name few.

For polymer compounds?

Yes, yes.

The polymers, whether that is polyethylene-based polymers or polyvinyl chloride-based polymers.

I mean overall compound manufacturing business side?

Yes.

Okay. And sir, what percentage of do we import the raw material?

Right now, we are importing close to 10% to 15% of our requirement as an import. I think that was the last call we have already 11:00.

Speakers, do you want me to -- we have no more questions at this conference. All right. So ladies and gentlemen, as we have no more questions, we have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

Dev-ji.

Yes, I want to thank everybody for their participation. And as we all know in such global uncertainties, we still managed to perform and match the projections. So that is a testament to our efficient business model and core competencies. But as we all know, like with all challenges, there also come opportunities. So just like after COVID happened, we saw a lot of growth opportunities in the export sector. So even now because of the disruption in supply chains globally, this is also presenting a good opportunity for exports as well. So as we are seeing a good increase in the number of queries coming in from new export customers and new geographies, so that we also see an opportunity there. And as the team also highlighted the emergence of renewables along with the existing infrastructure, transmission and distribution networks also provides us a good opportunity where we will see robust demand with the combination of the existing platform and the renewables emergence of renewable sector as well. So we are very positive on our growth trajectory, and we will continue to work best for all our stakeholders. Thank you.

Thank you. On behalf of Ddev Plastiks Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.