Gujarat Fluorochemicals Limited (FLUOROCHEM) Earnings Call Transcript & Summary

Thank you, everyone. Now we will have an update on the EV business. We have Gujarat Fluorochemicals Limited management on call represented by Mr. Vivek Jain, sir, MD; Dr. Bir Kapoor, sir, CEO and DMD; Mr. Akhil Jindal, sir, Group CFO and other members of the Senior management team. I would like to invite GFL management to initiate with opening remarks, post which we will have Q&A session. Over to you. Thank you.

Yes. Good evening, everyone. This is Bir Kapoor again. I have with me our MD, Mr. Vivek Jain, accompanied by Mr. Akhil Jindal, our Group CFO. Mr. Manoj Agrawal, who's our CFO; and Mr. Rajiv Rao, who is Head of our EV, Battery Materials Business segment. He is here with us. So I would now like to request our MD, Mr. Vivek Jain, to give us an opening comment.

Hello. Good evening, everyone. I welcome you all to the business update of GFL's EV business. We thought about getting into this business way back in 2021. As we saw a significant potential in this segment driven by the environment sustainability and clean climate agenda worldwide. Over the last 2 years, we have seen this segment unfolding rapidly with significant activities in domestic as well as global markets. Several market leaders on the global space have emerged, and the current projections for this space is expected to be 5 to 6 terawatt hours with a business opportunity of over $300 billion by 2030. Looking at this opportunity, we started our EV initiatives in 2021 under our wholly-owned subsidiary of GFL. And today, I'm happy to announce the recent commencement of production on a commercial scale of one of our initial capacities. Through this -- through our wholly-owned subsidiary, we intend to participate in the large global energy transition opportunity, particularly in the EV and ESS ecosystems. We are well positioned to capture a sizable value share in global battery materials industry, and we have preferred party -- partner to EV/ESS battery and cell manufacturers in their quest to secure a sustainable and reliable supply chain outside China. Our plans are strongly supported by GFL's track record of commercializing complex performance-based products. Today, we have announced a broad long-term plan for GFCL EV, which entails a cumulative CapEx outlay of almost INR 6,000 crores over the next 4 to 5 years. Out of this INR 3,200 crores is planned to be spent in the next 3 years and with asset turnover expectation of 2x and EBITDA margin expectation of over 25% at full capacity utilization of these CapExs. GFL's visionary investment and unwavering commitment to innovation highlight our pivotal role in shaping the future of the EV and ESS battery industry. The significant investment in the EV/ESS battery chemical supply chain underscores our dedication to driving innovation in the electric mobility sector and Energy Transition. As a pioneer in the green segment, our objective extends beyond mere market prominence. We aspire to be pioneers in sculpting a cleaner environmentally sustainable tomorrow, which resonates with our ethos of being a Green Group with expanding business in the renewable sector also. I will now like to hand it over to Dr. Bir Kapoor for his comments.

Thanks, Mr. Jain for a very warm -- once again, a very warm welcome to all of you. Details of our plan has already been uploaded on the stock exchanges. I would like to add at this point that GFCL EV's current product portfolio includes LiPF6, which is electrolyte salt, additives, electrolyte formulations, cathode binders, such as -- which are essentially a fluoropolymers PVDF and PTFE along with a specialized offerings of NaPF6 for sodium-ion batteries and cathode active materials such as LFP. The first commercial plant of LFP is anticipated to be operational by quarter 3 of this calendar year. With this, our portfolio will cater to almost 40% value of LFP battery cost. Making us one of the few companies globally to provide such a comprehensive range of EV/ESS batteries under 1 roof and strengthen our position or solidify our position as an industry frontrunner. With world taking stride towards electrification of mobility and ESS, the global world battery market is conservatively expected to reach approximately 6 terawatt hour by FY '31. We believe these are very big opportunities and investing at the right time and right scale to garner significant market share in this space is very, very important for us. We have already invested close to INR 650 crores up to December, and our future CapEx plans are aligned with the expected scale up of product demand as per our estimate -- internal estimates. To give a brief overview of the overall market opportunity in this segment, I would now like to invite Mr. Rajiv Rao, our Business Head of Battery Materials. Rajiv?

Thanks, Dr. Kapoor. Good day, everyone. I appreciate your time today as we discuss the exciting future of GFCL EV, a venture of Gujarat Fluorochemicals. Our focus today is on the growing battery materials market and our strategic position within it. International research reports and our own estimates projects that by financial year '31 the battery market globally will expand to over 6 terawatt hours. Concurrently, the global demand of battery materials like LiPF6, electrolyte salt, LFP cathode active material, PVDF cathode binders is projected to grow at a CAGR of 25% to 30% over the next 5 to 6 years. Gujarat Fluorochemicals has a long-standing experience in handling complex fluorine chemistry and our significant global market share form the bedrock of our venture into the battery materials space. Battery materials require extremely high purity. GFL has a history of adherence to stringent purity specifications for our global fluoropolymer and chemical customers. This is a key differentiator as few global players can achieve such purity standards at an industrial scale. At GFCL EV, we are constructing a fully integrated manufacturing complex. Our initial capacity of LiPF6 at Jolva has already been commissioned. Not only will we manufacture battery material intermediates like battery grade and hydrofluoric acid and lithium fluoride, we are also back integrated to captive Fluorspar mines in Morocco. We believe we are investing in a sunrise industry at the right time and scale. As 1 of the first movers outside of China supplying to India, the U.S.A. and Europe, we aim to capitalize on the demand opportunities arising from the U.S. market driven by the Inflation Reduction Act. Capture the European markets by the China + 1 strategy and PLI-driven demand from the Indian market. GFCL EV is in a unique position offering a wide range of battery materials such as electrolyte salts, formulated electrolytes, cathode-active materials and binders. Consequently, we are engaging with marquee global customers for long-term tie-ups with a bouquet of products. So in conclusion, GFCL EV is well positioned to leverage the growing demand in the global battery material market. Our strategic advantages, coupled with our ambitious plans makes us a compelling investment opportunity. Thanks for your time, and we'll now open the floor for question and answers.

[Operator Instructions] The first question is from the line of Ketan Gandhi from Gandhi Securities.

Sir, very excited about the GFL EV bouquet of the battery materials. Basically, only anode material is pending, otherwise everything -- mostly everything is given by us, that's a very long term and fantastic reason, sir? My understanding regarding the type of the batteries, regarding lithium battery, sodium batteries and the solid straight dry battery, which is now 1 or 2 large players you've announced. For that, you require -- for a solid-state dry battery, you require dry electrolyte. And for making that you require PTFE. So is my understanding correct that a high-end PTFE will be required for dry battery. And that can drive the PTFE demand very largely. And in a couple of over 3 years, PTFE of this grade could be on short supply and a very fantastic strategy of derisking the battery model like whether it is lithium is working or sodium is working or the dry battery working. Can you please throw some light on that, sir?

Coming back to your question about the solid electrolyte. There are -- PTFE is used right now. The solid electrolyte is still not part of the existing industrially -- developer industrially operating battery plant right now. However, there have been significant effort, which is being done right now in making a dry cathode. So there is a wet cathode and a dry cathode. Dry cathode does not require any solvent. And in dry cathode, PTFE is used and the specialized PTFE grades has a big application. So you are right. So we expect to see our PTFE business also to get a boost by this new development, which is emerging, particularly in the dry cathode space.

And sir, I think a very fantastic move by derisking the business model whether lithium or sodium or let's say dry battery, we are there. We are -- our skin is in the game. Is my understanding correct?

Yes. Yes. I think, in fact, because what we believe is currently, there are a certain set of batteries, which is working, which is the core. And new development will keep on coming, and there will be market -- these new technology will emerge, coexist. So we want to make sure that we prepare ourselves to cater to whichever segment which emerged over a period of time.

And the next question is from the line of Sanjesh Jain from ICICI Securities.

A couple of questions here. First, can you help us explain the technology part of the piece in the entire EV space, where are we getting these technologies, how proven these technologies, which we are putting the CapEx for and what is the capacity for each of this product we are starting with, these will be my initial questions.

Yes. First of all, today's call and the announcement, Sanjesh is because that we have already commercially produced the material. And obviously, we have all the right elements in place to do that. So as far as the technology is concerned, yes, we have a good understanding, our internal developments plus through international experts, we have been able to do it. And we are confident this will happen -- continue to happen in all the products which are on the anvil. So today, we already have commercially produced LiPF6 with us LIF high-purity-grade HF with us.

So we are starting with the 3 products right now where we have gone commercial as LiPF6, LIF and high-grade HF.

Correct. And also it electrolyte. Our electrolyte plant is also ready, which will -- which, I think, of course, it's validation and customer engagement is starting too -- but our plant is ready for the electrolyte as well. Electrolyte, as you know, is a customer dependent. There's no particular standard grades there. Coming back to the fourth product, which is electrolyte -- which is LFP. Our plan is in place and our plan would be up and running, as you said, in the second quarter of the next financial year, which is the third quarter of this calendar year.

Got it. No, no. I'm just trying to understand, have we supplied the samples to the customers? Are there any agreements we are anticipating? Are there any late stage discussions we are doing for all of these products because we are now commercially ready probably ahead of the competition within India. Where are we in terms of customer discussion on all these products?

Sanjesh, it's not really appropriate for me to name any customer here. However, we have been in touch with several set of customers. But let me tell you in this space, typically, the customer discussion engagement, et cetera, happens. But the actual game starts when there is a product in hand from a commercial plant, okay, which is where we are today. So I think we expect this product to go for a testing and validation, and that's how we start. But yes, we are in touch with several global customers on the battery space, yes.

No, no. We earlier mentioned, sir, that this business will be more like a long-term contract basis where probably we may look at cost plus. In that backdrop, and when should we see revenues being booked in this particular segment.

As we said that the revenue would start trickling down probably after the second quarter, so more of the second half of the next financial year. And the contract would be done by then. Yes. It's -- the nature of the business is that this is part of the long-term contract, which eventually gets signed. And it's -- I would not like to say cost-plus, Sanjesh. It's not cost plus, it's a long-term contract, but of course, with all sets of protections for the buyer as well as sellers.

Fair enough, sir. On the LFP, what kind of initial capacity we are looking at because there is one of the peer who has announced a very large CapEx of 200,000 metric tons over a period of time, starting with 40,000 metric tons. So where are we in that journey in terms of capacity for each of this product? Can you help us? What is the kind of capacity we are starting with for all the 4, 5 products?

See Sanjesh. In this, we are starting with the LFP, we're starting with the first commercial scale line, okay. Now I cannot really give you capacity numbers because those are confidential. But yes, our plan -- long-term plan when we look at -- show the CapEx number, it is in line with the market requirements, et cetera. But the first line that we are looking at is the commercial line -- commercial scale. And I cannot give you the exact numbers, Sanjesh.

No, no, that's fine. That's fine. One last question before I jump back into the queue. Can you help us understand where are we in the additives. I think we also had an intention to start certain additives for the electrolyte. Which are the additives we are looking at it and when are they getting commercialized?

Yes, there are several additives we are working. I'm not sure whether we have announced the additive, particularly, but we are in the advanced stages of building up the commercial facilities for these additives probably within a -- after a quarter or so, we'll announce more development in that area as we initiate the commercial production. As far as the additives are concerned, I'm not sure whether we have announced the name of the additive. We have not announced the name of the additive Sanjesh, because some of it may actually be proprietary between us and our customers.

Got it. Got it.

But these are electrolyte additives with the broad category, which there are several of them that you would probably know.

Yes, yes. So we intend to manufacture all of them or few of them?

A few them, the bulk one. Again, as I said, that electrolyte formulations are -- depends on the customer. But there are certain additive, which are like a base, which goes into multiple formulations. So we will probably be starting with that first.

And we will not have any solvents, right? It will be only...

Not as of now, not as of now, Sanjesh. Solvent is a different ball game. And also it's a different type of business. It's a relatively high volume, low margin, low value business.

Yes. Got it. Got it. Best of luck for the new endeavor.

And the next question is from the line of Hansal from Lalkar Securities Private Limited.

Thank you first of all for giving such an insightful and comprehensive long-term vision for the GFCL EV business. It is truly encouraging to see that we are planning products, which are virtually timeless and adaptable to diverse technology landscapes even with reference to these additives like LiFSI and lithium borate, it's very encouraging and exciting to see this. Sir, my question remains the same as I had asked before. I think on the previous presentation, we had indicated that the CapEx that we were doing in GFCL -- I'm sorry, GFL was virtually exclusive of the CapEx you've just announced in the EV business of approximately INR 6,000 crores odd. So my question is that how will we essentially raise this funding? Are we talking about some sort of a dilution or something and can you throw some light on the statement that was made saying that without the cost to the parent GFCL, if I get -- if you could throw some light on this, it would be very encouraging.

Sure. I mean, we deferred discussion in our previous call, so we definitely take it and share our thoughts on that. I would request Akhil to please take this up.

So basically, as you all know, GFCL EV is a separate company. And in this company, GFCL EV has already invested close to INR 650 crores till December 2023. And we expect that by that time, this financial year ends in March, it will be approximately INR 800 crores. So what we really want to do going forward is that GFCL raised its own fund. Now there are multiple ways of raising the funds and some of the steps that we are going to take is that it would be either by way of a debt. If it's a debt where -- it would be on a completely nonrecourse basis to GFCL EV -- my apologies to the GFCL. What it means is that even if the debts are there and where we would refrain from giving any comfort letter, any corporate guarantee any kind of lateral support for the debt. But more particularly, debt would be our last option. We would rather be looking at some external private equity, which can easily be raised through some of the large global offerings. As you would realize and recognize that this business [ curtails ] to the renewable sector. It has been, I would say, a focal point of many, many climate focus funds and given the high-growth EV and the ESS solutions, they're also extremely keen to partner in this growth story. So our endeavor would be to raise external private equity and that would be sufficient to fund the EV business for the period of next 2 to 3 years until the business starts throwing its own cash flows, and the further growth would be self-propelled and it will be funded by its own cash flow. So this is our endeavor to isolate the cash flow of GFCL at a parent level to the extent of INR 800 crores, that cumulatively, they would be spending until March '24. Beyond that, it would be self-funded by way of private equity or in a worst case, even debt, which would be on a nonrecourse basis through the parent company.

Great. Sir, are we seeing any interest in this, which is why we are confident that we will be able to raise this through the private equity? Or are we in talks or anything?

Yes. So we have just initiated that discussion. Obviously, such processes take nearly 4 to 6 months. But the initial reaction that we have got from some of these large investment bankers -- the global investment bankers that we have reached out is very encouraging. And we believe that over the period of next 4 to 6 months, we would be in a position to raise substantial capital for the growth of this business. And obviously, as I mentioned to you, there are a number of private focused funds which are looking for such opportunity, and they would be very keen to partner with us.

And the next question is from the line of Rohit Nagraj from Centrum Broking.

Sir, my first question is in terms of the technology for all the products that we have developed. So is it in-house technology and whether it is pride or tested? And a light question to that is in terms of product when we are selling to customers. Is it going to be a piecemeal basis? Or is it going to be a complete solution, which accounts for, say, 40% of the battery. So how are we trying to engage with the customers from this?

Yes. First of all, regarding technology, Rohit as we had already answered and I think in this call, that technology, of course, is some part of it is in-house developed and in combination with international or global experts. And we already have approved because see our product is already being produced as of now. Coming back to your next question, how the customer engagement, whether it will happen on the 40%. At this point of time, we are phasing in products step by step. So obviously, our engagement with the customer will start perhaps with 1 product and then it will go on. What you said is right, eventually, our target would be to offer an entire bouquet of products, which includes our new battery chemicals and materials and also fluoropolymers, which is already part of our portfolio, including PTFE and PVDF. So it will be -- what you said is exactly is going to be, that's the intent that we would like to target in the long term when we have the entire bouquet developed and available with us. So it will ramp up to that level absolutely.

All right. Got it. That's helpful. Sir, my second question in terms of the financial numbers. So one thing to clarify for FY '24 the CapEx that we have indicated INR 1,100 crores, does this include the INR 800 crores, which is supposed to be invested by FY '24. And an allied question to that. In terms of the -- I mean, the plant getting commissioned during FY '25, what is the kind of revenues that we expect in FY '26 from the EV initiative? Just a ballpark number would also do.

See, it's -- our again, revenue guidance that we had given is the asset turnover based on the -- our capital investment. And out of the INR 1,100 crores that we talked about, the INR 800 crores that we are talking about is over a period of last couple of years. So it's not exactly everything is passed -- part of INR 1,100 crores that we are incurring this year, okay? So coming back to the revenue guidance that if we can presume that -- if the entire CapEx that has been added by the end of this or the middle of next financial year, that would probably reflect in totality a year later as a part of 2x the asset turnover. That's all I can say. It will ramp up over a period of time. But the full potential of this CapEx is 2x the asset turnover, that's the guidance that we had given.

Just one clarification on FY '26, what could be the CapEx on the EV front? So would it get clubbed in our consolidated financials, even if we take the external funding through private equity or through debt.

See, we had given that the cumulative CapEx by FY '26 is INR 3,200 crores, okay? This is what we had given FY '26. So obviously, this total cumulative CapEx to result into revenue probably would take some time. So you are asking about the FY '26 revenue.

CapEx number.

So CapEx number by FY '26 is INR 3,200 crores. Is that what we had given. It's already part of the presentation. Out of which INR 800 crore is already being incurred in this financial year. So you can say that in next 2 financial years, which is FY '25 and '26, so there will be roughly INR 2,400 crores, which will be coming in. So at the rate of maybe INR 1,200 crores per year.

And the next question is from the line of Rohan from Nuvama.

Sir, if I just get the supply chain right in this EV chain. First, we need to get the -- our samples approval from the customers in terms of grades development and which is suitable for the battery grade. Battery which you are developing. And then after the commercialization of the plant, then we need further approvals from the customers and then only we can supply to them. Just getting sir, my understanding right on this part?

Yes. Rajiv, take that.

Yes, the validation process of a product is that from our commercial plant, it goes to the customer and they test it in actual cell performance based on which they start procuring the product. So depending on what product it is, it goes to a different part of the value chain. So as far as the LiPF6 salt is concerned, it goes to the electrolyte manufacturer who put it in their electrolytes and test out the product in an electrolyte which is put in a cell. Does that answer your question?

So sir, right now, we have already started supplying after the commercialization of a LiPF plant to the end customers, and they are already putting it to the electrolyte salt and making the formulation by themselves and putting in the final batteries, right?

We have just started sampling our product from the commercial plant, and the -- our customers are currently validating that.

What is the validation period, sir?

Validation period, it takes 3 to 6 months, typically.

And sir, it is coming after -- I mean, first, we would have given them the initial samples right...

Sorry to interrupt sir, can you join the queue for the follow-up questions?

I have yet not asked my question, sir.

Okay.

So sir, I was asking, sir, this is happening again. I mean, after the commercialization, while we have already got our samples approved, right, from these customers, and then also it is going to take another 3 to 6 months after the commercialization of the plant, right?

So let me clarify, it was mentioned earlier that the customers validate the product from a commercial plant only. So sending samples from a lab or a pilot plant has no meaning in the end. They would like to validate the commercial product only. So that's where we are right now. Our commercial plant is up, and we are in the process of sending samples and getting it validated from the commercial plant.

Okay. That's very helpful. Sir, any numbers you will share that how many customers we are working with right now and in what region domestic, Europe, U.S., if any, any color you can share on that sir?

Yes, we are working globally. This EV market is a global market. So we have customers in all regions, and we are validating the product, both Indian as well as global customers and the developed economies.

And you expect that the LiPF revenue will start flowing from these customers from Q2 FY '25.

Yes. So the validation period is 3 to 6 months thereafter second half of '24.

And sir, how the utilization will change? I mean, how quickly we can ramp up the plant and reach up to the full potential of LiPF's existing capacities?

The plant is -- we currently already commercialized. So at the moment the customers validate it, we can ramp it up in no time.

Thank you. [Operator Instructions] The next question is from the line of Paras from Enam Holdings.

Hello. Can you hear me, sir?

Yes, Paras, I can hear you.

Sir, I wanted to understand, particularly on Slide 5 of your presentation on EV, you mentioned that the LiPF6 global demand in FY '26 will drop by around 30% odd. Is there anything that we are missing? So is there anything that we have to understand.

You're talking about -- okay.

So it says that from 150 kpta, it will go down to 102 kpta. So is there anything that we have to understand in this? Why is the demand dropping?

Yes. So one of the things that we need to be in this business is to be very agile in being close to customers. And earlier, we talked about innovation in battery chemistries and how the formulations for electrolyte are being developed. So based on our interactions with our customers, we understand that there is some changes in the electrolyte formulations, which we have factored into this on that particular year.

Okay. So you mean to say that there can be non LiPF6 kind of a usage in battery, which can drive -- in the sense which can drive up the demand and the demand for LiPF6 can come down in a year's time, at least for one year.

See, electrolyte formulation is a blend of 7 to 8 different chemicals like LiPF6 being one of them. And LiPF6 is the base, and that will continue for the next decade or so. So we don't see -- we expect LiPF6 to continue growing. There are shifts from time to time that happen. And based on that, we have made this prediction, but LiPF6 will continue to grow over the next 10 years.

And the next question is from the line of Nitin Agarwal from DAM Capital.

Sir, my question is on the export opportunity perspective. What is the -- can you give us some color on the competitive dynamics with the IRA act and the China Plus which you mentioned from a European company sourcing perspective, I mean who are the guys are we competing with and how tight in the supply market for some of these chemicals which sort of puts us in a favorable position. If you can just provide some perspectives on that.

Nitin let me get your question right. You are asking that in view of the IRA and China Plus One strategy, whom are we competing with? Is that right?

Yes. And how -- is there a -- from a demand-supply perspective, is there a challenge of some of the other non-Chinese players being able to scale up to meet the requirements and which put us in a favorable...

The way it stands right now, the battery chemical capacities outside China is only there in some part in Korea and Japan, which is very, very small, okay. So -- and there is some capacities which has been announced due to IRA in U.S., which will come much, much later. So if I look at the space -- competition space, outside China. I believe that we are -- we'll be very competitive, both in terms of ramping our volumes up and also in terms of the cost competitiveness. So outside China, I think the competition is limited to the geographies that I mentioned. Okay. And if I look at those geographies and competitiveness with respect to India, it is much -- it's going to be much, much better.

And the next question is from the line of Resham Jain from DSP Asset Managers.

I have just one question. Just on the structuring part of this separate entity, if one looks at the cash flow, let's say, over the next 2, 3, 4 years, does this mean that your cash flows will be insufficient to fund this particular business line? Because again, when you will raise money through private equity, this will have a separate kind of entity, different structure, you have to give exit to them. And then this whole holding company structure will again come into picture. Similar to what we used to have 5, 6 years back -- 3, 4 years back? And that has its own implication in terms of how people value the company. So how are you thinking about this whole structuring and from cash flow perspective?

Resham, this is Akhil Jindal, once again. So basically, look, firstly, to answer your first question, if you feel that the cash flows of the main business is not enough to fund this business. That's not correct. We have enough cash flows coming over several years, I mean, over the next few years to fund this business as we have done it so far. The idea of bringing in the global fund are twofold. One, we are looking at a single-digit dilution, not like a massive dilution, a single-digit dilution to the extent possible and to raise the fund for the future growth. The second is the marquee name that will get associated through this association will also enable us to be a real thought leader in the EV space and the ESS space, and which is whatever endeavor is. So in that sense, it would be a very simplistic private equity participation. We are not expecting any complications arising out of it. And in that sense, the funding that would be done from private equity, would be good enough for us to be able to fund our initial 2 to 3 years funding plan. And then this business will be in a self-propelling mode for the future growth. So this is a cautious decision that the company and the Board has taken in interest of the -- preserving the cash flows of the main company also for its own future growth, for its all future potential, while the EV can be funded separately through external route.

And the second part of the question, if you can answer, how will you think about giving an exit to private equity? Will it be a separate IPO? Will this be a subsidiary of Gujarat Fluoro itself because there will be still some kind of related party transaction, if it will be a separate company, which will still be there between parent and the subsidiary. So how are you thinking about on those lines?

Yes. I mean, Resham, you're right. In the entire group, you would have seen the company is maturing to the reasonable level and going through a public market route. So given that this business has reached to a certain level and with the new investment that we are proposing, it will reach to a threshold where it can attract the private -- the public market capital as well. So the idea would be to go to an IPO situation at a later date. But clearly, there is no commitment. There's no, I would say, assurance that we are giving to the private equity players or they are seeking from us. This would be a natural process. As and when the business gets developed, as and when the business cash flows get established and at an appropriate valuation, at an appropriate time, we will go to the public market. I mean, we are not putting any pressure on the management or on ourselves for promising any exit within 2 years, 3 years. That's not our endeavor. It would be a natural process that as other group companies in this have got listed at an appropriate time. They should also see the public market listing. I can't put a time line to it. But once the cash flows and everything gets sustainable, it would see its natural course.

And the next question is from the line of Yash Shah from Investec.

Sir, my first question was regarding sourcing of the lithium. We were in basically trying to source lithium and had appointed ENY as well in the last -- for the last 6 quarters. And as we've also mentioned in the past that how pertinent it is to source lithium for the EV business. Can you provide some update on that? Now where are we and basically given that in the past it was only limited to the LiPF6 business. But right now, we are also catering to the LFP along with the additives as well. So given that the lithium supply will -- lithium demand would increase, so where are we right now?

So we looked at the lithium sourcing opportunity, and we are continuing to look at that space. However, as you know, the current situation -- market situations are very different, lithium is no longer where it used to be at least at that point of time now. There is a, lithium prices are softened up and there's a lot more new mine than the new refining has come up. So there is a continuous -- that area is very, very dynamic, and we have been looking through it through experts and consultants. At this point of time, what we believe is that the visibility that we have from next 2 to 3 years, we are covered with respect to lithium. And this whole market space, again, the way the industry works, often is that the lithium security, to some extent, is provided by OEMs. And as you may have read and seen, that the lithium, for example, the large OEMs have captured or have control on the lithium supply to make sure that this is -- does not impact their overall growth plans and the growth strategy. So it's going to be a combination for us. Yes, some part of it is through our customer and some part of it even if we procure is typically on the pass-through model okay?

Got it, sir. Sir, one other last small question. Regarding the new product segments which we are entering into, can you basically give a broad idea of the segment wise of which is going to be our primary market? Is it going to be domestic market? Or is it going to be the export market? Like in the case of electrolyte formulation, obviously we can't export it. So domestic market is going to be the key. But whereas in terms of the other segments, can you give some broad idea? If we are basically targeting more towards export or the domestic market?

We are -- the size of market that we talked about -- and if you look at that we are looking at it at a global market size. And again, as China Plus One kind of strategy, which is driven primarily by the changes that is being seen in the several regulatory framework of U.S. as well as EU for dependencies on particularly with 1 dominant player. So in view of that, we are looking primarily at the export market. Yes, in case of products like electrolyte, which cannot be transported, we'll be looking at the domestic market only. But overall, in all the set of products that we talked about, we will be looking at the global market. And overall size of this global market is very big. I mean this is estimated to be in 2030, for example, this market is around $100 billion. That TAM that we are looking at.

Thank you. That was the last question. I would now like to hand the conference over to management for closing comments.

First of all, thank you very much for -- to all of you for showing interest in GFL and GFCL EV. For us, as we have mentioned that this is a momentous occasion for us, where we are embarking on a new horizon, a new journey for GFL as a group and also particularly in the battery material space where we are entering. It's a very large opportunity, as you can see from our presentation that if you look at the battery growth rate, it's almost close to 20%, 30%, which is predicted. Now a combination of EV plus ESS, which both require battery and where both battery material goes, it's a very, very big, large opportunity for us. Clearly, in view of that, we are very, very excited about this. And the total value of the battery that we are planning to target is almost 40%, so which is a very big market for us. So and we believe that we are very well positioned to capture it in view of our past experience, in view of our expertise in fluorine and fluorine chemistry NHF handling. And in terms of taking high-performance product to market. So I think we have all the right elements and capability in place. With today's announcement, we are one of the first players in this area who has come up with a commercial plant. And we would like to leverage this. And the last point is that, as I mentioned in between the call, that we are one of the very few companies in the world who has such a large bouquet of products for battery materials, starting from electrolyte salts, CAM to fluoropolymer. So with this, we look forward to an exciting journey for GFCL EV. So thank you very much for showing all your interest, and I appreciate your time. Thank you.

On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line.