Pondy Oxides And Chemicals Limited ($532626)

Ladies and gentlemen, good day, and welcome to Pondy Oxides And Chemicals Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Ms. Sana Kapoor from Go India Advisors. Thank you, and over to you.

Thank you, Steve. Good afternoon, everyone, and welcome to Pondy Oxides And Chemicals Limited earnings call to discuss Q4 and FY '26 financial results. Today, we are joined by Mr. Ashish Bansal, Chairman and Managing Director; Mr. K. Kumaravel, Director of Finance and Company Secretary; Mr. R. S. Vaidhyanathan, Executive Director; Mr. Vijay Balakrishnan, Chief Financial Officer; and Mr. Pratik Gupta, Associate Vice President, Operations. We must remind you that the discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks that the company faces. May I now request Mr. Ashish Bansal to take us through the company's business outlook and financial highlights, subsequent to which we will open the floor for Q&A. Thank you, and over to you, sir.

Thank you, Sana. Good afternoon, everyone, and thank you for joining us for POCL's Q4 and FY '26 earnings call. I hope you've had the opportunity to go through our financial disclosures available on the exchanges. I will walk you through the key strategic updates, operational progress and financial performance followed by a Q&A session. FY '26 stands as one of the most remarkable years in POCLs journey with the company delivering all-time high production and sales volumes, revenue, EBITDA, PAT and profitability margins. The stellar performance reflects the combined strength of our growth strategy, execution excellence and operational building on this momentum. POCL has generated an outstanding 5-year CAGR of 24% in revenue, 52% in EBITDA and 67% in PAT, demonstrating a consistent track record of accelerating growth, expanding margins and creating significant long-term value for all stakeholders. Before turning to the numbers, I would like to highlight the business developments and growth initiatives that have not only contributed to a strong performance in FY '26, but are also laying the ground off of POCL's continued expansion and value creation in the years ahead. One of the key highlights of FY '26 was a significant progress made in expanding our capacity in strengthening our growth platform. During the year, POCL enhanced its [indiscernible] capacity and the TKD facility by 55%, increasing it from 1,32,000 metric tons per annum to 2,04,000 metric tons per annum. Expanded [indiscernible] operated at approximately 65% during FY '26 and is expected to steadily ramp up within nearly 75% utilization in the coming years -- the coming quarters. We also successfully doubled our copper recycling capacity to 12,000 metric tons per annum in Q4 FY '26, reinforcing our presence in the copper recycling segment. The facility is expected to progressively ramp up to 70% utilization during FY '27. Further strengthening our growth platform, the Board has approved the setting up of a 36,000 metric tonnes per annum copper cathode plant at our TKD facility in Tamil Nadu with an estimated investment of approximately INR 200 crores funded purely through internal accivals. The project will be implemented in 2 phases of 18,000 metric tons per annum each and Phase 1 is targeted for commissioning by December 2026, which marks a significant step in expanding our nonferrous recycling portfolio and enhancing value-added capabilities. The press meeting will utilize integrated pilot refining and encore fining technology to produce LME-grade copper cathode strengthening our vertical integration capabilities. Upon commissioning the progress is expected to have the revenue and profitability through the value-added copper products, improved margins through a richer product mix, generate operational synergies across procurement, logistics and sales and create a scalable platform for future expansion and diversification. It will also support import subscription, reduce carbon footprint to increase use of recycled copper and further reinforce POCL's commitment to sustainability, circle economy principles and long-term addiction. Backing a growth strategy, POCL deployed approximately INR 49 crores towards capital expenditure in FY '26. We remain committed to investing for future and expect to incur additional INR 180 crores in FY '27 to support capacity augmentation in copper, downstream integration and other strategic growth initiatives. In line with this commitment to reward the shareholders, the Board has recommended a final dividend of INR 5 per equity share, representing 100% of the face value for FY '2025-'26. Against this backdrop of steady progress, our operational performance in FY '26 remained exceptionally strong. The company achieved record production and sales volumes of both lead and copper reflecting the strength of our operating model, execution excellence and growing market presence. The procurement mix from imports stood at approximately 73% for lead, 61% for plastic and 98% for copper during the period. Our lead business delivered strong growth while enhancing profitability. Net production and sales increased by 11% [indiscernible] metric tons and [indiscernible] metric tons, respectively, on a quarterly basis. Volumes moderated as we strategically focused on higher-margin value-added products. As a result, EBITDA per tonne of lead improved significantly by 39% to INR 18,462 in FY '26 and by 43% year-on-year to INR 19,739 during the quarter, reflecting the success of our value optimization synergies. FY 2026, reduction in sales volume of copper increased by 7x, respectively, there is EBITDA per ton stood strong at INR 39,896 per tonne. Copper sales witnessed a significant increase in FY '26 is growing by nearly 11x to [indiscernible]. Building on operational momentum, POCL delivered its strongest ever financial performance in FY '26, underscoring our ability to drive sustainable growth. Revenue growth remained robust across both quarterly and annual periods. Revenue increased to INR 932 crores in Q4 FY '26, registering a strong growth of 80% year-on-year and 20% quarter-on-quarter for FY '26. Revenue stood at INR 2,939 crores, reflecting a 45% year-on-year increase driven by improved capacity utilization and higher production and sales volumes. Exports contributed 66% of total revenue during the year, highlighting our expanding global footprint and growing customer confidence. Sales mix between lead and copper verticals stood at 77% and 23%, respectively. In FY '26, additionally, value-added products accounted for 65% of lead segment revenue, reinforcing our strategic focus on increasing the contribution of value-added products to over 60% over the long term. EBITDA more than doubled on both quarterly and annual basis, reaching INR 61 crores in Q4 FY '26 and INR 218 crores in FY '26, reflecting the improved earnings profile of the business. EBITDA margin expanded by 212 basis points to 7.4% in FY '26 compared to 5.3% in FY '25. Profitability growth remains strong with PAT more than doubling on both quarterly and annual basis. PAT increased by 11% year-on-year to INR 38 crores in Q4 FY '26, while FY '26 PAT grew by 113% year-on-year to INR 139 crores, reflecting the improved profitability of the business, that margin expanded by 151 basis points to 4.7% FY '26 compared to 3.2% in FY '25. Our consolidated performance made the strong momentum witnessed in the stand-alone business. On a consolidate based revenue and EBITDA PAT grew by [indiscernible] year-on-year, respectively. In FY 2026, the strong performance continued during the quarter with revenue EBITDA impact increasing by [ 78%, 124%, 126% ] year-on-year, respectively, reflecting broad-based growth and improved profitability across the business. FY '26 also with a notable improvement in our financial health indicators. Return on capital employed increased to [indiscernible] cash conversion days remain healthy [indiscernible] interest coverage improved to 20x from 8x in FY '25, and net debt to equity stood at comfortable 0.17x, highlighting the strength of our balance sheet and capital efficiency. In conclusion, POCL remains firmly on track to achieve its target 2030 aspiration guided by a clear and disciplined strategy focused on sustainable growth, operational excellence and long-term value creation. We continue to expand our lead and copper capacity while strengthening our presence across adjacent nonproduct recycling segments to deliver 20% volume growth and 20% CAGR in revenue and profitability. Our growth is complemented by a strong focus on margin expansion with targets, maintaining EBITDA margins above 8% and return on capital employed above 20%. At the same time, we remain committed to enhancing operational efficiency through innovation, modernization and increased value addition with the goal of deriving over 60% of revenue from value-added products significant -- significantly improving energy efficiency, anchored by a clear strategic road map, a robust balance sheet, disciplined execution of sizable land bank, support of government norms, proven leadership and support from all stakeholders, POCL is well positioned to capitalize on future opportunities and drive long-term sustainable growth. That concludes my update. Thank you for your attention. We will now be happy to take your questions.

[Operator Instructions] The first question comes from the line of Dheeraj Ram with 360 One Capital.

Congratulations for great set of numbers. Sir, your -- goods has increased during the quarter. Can we expect this to continue? Or what was the reason behind this?

Dheeraj, thank you. And yes, we had some opportunity on trading in the last quarter, and we had taken up based on the opportunities that are available. And I cannot specifically say that it will continue, but definitely, there will be some trading which has always been there. So I mean, as the opportunity comes in. Our focus is generally on manufacturing only, and that remains our commitment.

Got it. And is this more related to copper ore? Or do we -- should we corelate to this lead?

This is more related to copper.

Got it. And sir, our lead volumes for the quarter has dipped slightly, however, we have commenced TKD1 and TKD2. Is this a short-term lever, -- how do we take it for FY '27, what is the volume growth for lead?

This is only a short-term thing. It's not -- it was a conscious decision. At the point in time when the supply chain is a little tight. We deliberately focused more on the value-added products and the customer -- customers also well accepted the change as they were able to get the regular products from other suppliers as we are one of the prime suppliers for the value-added products. So we were able to convert those into added products, giving us better margins over the quarter as well.

Got it. And just last question, sir, on the CapEx, what is your CapEx forecast for FY '27 as INR 200 crores. Is there anything else? And what is your CapEx for FY '28? And can you give breakup for lead and copper?

Yes. For the current year, our CapEx will be well within approximately around INR 180 crores will be the, CapEx INR 180 crores to INR 200 crores for this financial year. And the following financial year will be probably in the range of INR 50 crores to INR 60 crores, unless additional anything else is specifically added, which we'll keep you updated.

Got it. And this question on inventory base, sir. Current inventory days in lead and copper back up and then what is it going to be in FY [indiscernible]?

Currently on -- so overall, we see we stand at 53 days. But technically, it is well below 50 days. It was at that point in time because towards the end last week, there was some delay in our shipment due to some vessel movement, and those paying payouts were delayed by a week. So at that point in time, it showed a little higher. But once you account for that, we are well below 50 days. But as on the specific numbers, it is at 53 days.

Any guidance for going forward, sir?

For lead, we are at about 45 days. And in copper, we were earlier at about 70 days, and we have brought that also closer to 50 and below 50.

Can we expect this to continue?

We are very strongly poised to bring overall below 45 days as we had spoken earlier as well, and we are -- we will continue to do that.

The next question comes from the line of Akhilesh with MK Global.

My first question is on the lead realization. So just wanted to get your thoughts on net premiums where we have kind of reported close to [indiscernible] premium. While if I look at our peers, they do somewhere around $300 per tonne of premium. So what are we doing differently, which are catching these of as high premium compared to our peers?

$700 premium. Can you give me a reference to your calculation on the premium? [indiscernible]

So I've got the realization number through -- so it is somewhere around [indiscernible]?

That is the basic cost. So basically, the value-added products that we manufacture are specific alloys and all of that, which have blend of different other elements and metals and the prices of those specific alloys are higher than the basic mix of regular lead or the basic antimony analysts or something of those stocks.

No, I get that. But still, I mean, what kind of product lines we are into, which are catching these high premiums? Because if I look at our peer, like I mentioned that they are also into a similar kind of product line and they are doing premiums of around $300 per tonne?

There are some specific niches that we manufacture, which few of the other peers are not manufacturing, and those alloys are what fetches us high premium.

Could you please give us a couple of examples of that? What will that be?

These are very industry-specific alloys, which I mean on an open forum, I would not like to give out the names of those specific allows. But these are specific to those customers who are -- we are 1 point source for them to buy these alloys and hence, we demand and command those premiums.

Got it. Got it. And my second question would be on -- could you please talk more about plastic and aluminum segment as well? How are we doing there? Are we EBITDA positive? And if yes, then how much EBITDA per tonne are we kind of making in those 2 segments?

On the plastic, as we mentioned during our last con call, we are moving the unit and now the unit has been moved to the new location, and it's been set up. And the production started around in the new location in March. And as of now, we are PAT positive, not only EBITDA positive, currently we are doing PAT positive. And we are very, very confident that this year, you will see on the Plastics segment as well PAR positive numbers.

Okay...

In terms of realization in per metric ton realization, we'll update you over our next quarter.

Okay. Sure, sir. Because the question came -- because when I add lead EBITDA and copper EBITDA per ton, what you have given in the PPT, that comes more than what EBITDA kind of you have reported, right? So just wanted to get clarity the EBITDA per what you could include other income also? Or how is it?

So this year, plastic was marginally negative, and that is why it is different. But now in the coming quarters, it will be positive.

Okay. Okay. And aluminum, are we doing anything there?

As of now, not much on aluminum, we'll probably look into that when we feel the time is right.

The next question comes from the line of Sagar Shah with Spark PWM.

First of all, hearty congratulations to the entire team of Pondy Oxides for delivering such numbers actually. Sir, my first question was related to the CapEx guidance. The CapEx guidance that you just alluded was around INR 50 crores to INR 60 crores for FY '28. For FY '27, you have already disclosed on the investor presentation. So still INR 50 crores to INR 60 crores of CapEx. So is this just for maintenance CapEx? Or does that include the CapEx for Mundra plant as well?

So basically, in this year's CapEx, what we have added this is in the Phase I. And also, it includes our other internal smaller CapEx and some balancing equipment and so on. So the Phase II of the copper will require that INR 50 crores to INR 60 crores of CapEx.

So that means in FY '27, we go live for only 18,000 tons of incremental copper capacity, right?

By December will go live for incremental 18,000. And after that, following 6 months, we'll go live for the next [indiscernible] 6 to 7 months here.

Okay. Now my second question, sir, was related to the copper itself. You this -- actually disclosed on the investor presentation that we are looking for the forward integration of copper. You even alluded on the presentation that you will be going for the copper bars and -- from the copper wires. So now can you actually highlight something that what are the exact -- what is the exact product profile that you are looking to lock? And secondly, is this different from the traditional copper volumes that we are actually already doing? So naturally, your EBITDA per tonne will also increase if you are going for forward integration. So can you highlight on that point, sir?

Sagar, we have not spoken anything on bus bars or any other wires or something, which I'm not sure where the data you will derive from. But definitely, yes, the copper cathode project by itself is the forward integrated -- forward integration from what we are doing currently is recycling. And yes, from the point where we've been recycling now when we reach our completion of this copper anode and cathode project, the margins per tonne will significantly increase. And once this copper cash flow is done, then we will look into further products of our integration.

Okay, okay. So at least for copper cath hold, we can assume the same margins that we are drawing as of now?

No, it will be at an elevated level. As of now, what we can see, we are looking at about 60,000 to 70,000 per tonne on the copper cathode versus 35,000 to 40,000 what we are currently doing. However, the precise numbers once the trial production is up, we will be able to give you more precise on the numbers.

Okay. Fine, sir. My last question was related to our working capital, actually. In this year, in spite of such a robust performance, actually, our -- we had a negative operating cash flow. And that is just because of the heavy trade receives that are sitting on the balance sheet of around INR 265 crores. So can you split that between the raw materials and the finished goods of the trade receivables? And one more thing that basically, how are we planning to -- in FY '27-FY '28 to bring in the operating cash flow to be at least positive in line with the PAT growth actually. So that as at least we can have some better visibility and our -- so that in the future also, we don't -- we are not in a position to take incremental debt actually to cover up those receivables?

Let me just explain to you this -- what you see as the negative cash flow is technically not a negative cash flow because this happened due to movement of some vessel -- our export consignment getting delayed because of the movement of time on some vessel departures. And that's when the receivables on the last week of March got moved to first week of April. So we technically around April 5, we received close to about INR 120 crores to INR 130 crores impairment within that immediate next week, and that is what has impacted the cash flow. At this point you have to look at it as a point-in-time figure when they had this coming on time because of the external factors, the vessel is not moving, these numbers would have been extremely positive.

Okay. So in fact...

In fact, inventory in a similar level, only on receivable as we explained, the [indiscernible] sales realization is delayed by a day or 2.

Yes. All right, sir. So can you split between RM and finished goods in the INR 265 crores worth of predicable?

There's no RM and finished goods trade receivables, Sagar. So it is purely finished good asset out if we [indiscernible] increase, which is more or less with our increased revenue, the current impact seems okay. As Ashish said, only on the pay receivable front, there is a huge increase. So that is a point-in-time figure, which has impacted our operating cash flows.

The next question comes from the line of Shweta Dikshit with Systematix.

Congratulations to everyone on this set of numbers. My couple of questions, firstly, on the copper side, we commissioned 6,000 tonnes of additional copper and in 4Q, and we still surpassed 3,000 tonne volume mark within 4Q, what kind of capacity utilization are we now looking at on the entire 12,000 tonnes for FY '27. And second question, when we get into the downstream or copper cathode or capacity of 18,000 tonnes in the next phase also. What would be the difference in capacity utilization of that segment versus the current recycle cost capacity? And whether we'll continue to sell the recycled copper externally or use it to feed our TKD copper plant?

Yes, Shweta -- so we -- in terms of the recycle part, so this -- in the current financial year, we're looking at something around 9,000 -- 8,000 to 9,000 tonnes of the recycled copper. And in the 18,000 tonnes capacity in the first phase, we'll have the production for the last -- that's the last quarter that will help. I'll say approximately anywhere between -- depending on the material -- raw material required, about 50% to 60% from this recycling copper will directly go into the annual process. And there will be other raw materials also that will be purchased, which will be blended. So that will be the product mix in terms of copper.

And FY '27 volumes, would this 8,000, 9,000 tonnes of sales volumes on the capacity of 12,000 tonnes. Is that correct? From the existing new cycle?

Yes. So including the copper cathode the volumes on copper will be approximately 12,000 tonnes.

Okay. In FY '27. And sir, another thing was if you're looking at around INR 180 crores of CapEx for this year, how are we likely to fund it basis and this 1 still the operating cash flow is negative and is already a little strain on the cash side. So how are we kind of fund this INR 180 crores of CapEx?

In his opening remarks, Mr. Ashish clearly informed that this is through the internal approvals, we are going to fund this project. We are not going to take term loans. But any how we have sufficient network to handle this, though it is a point-of-time figure for the edit cash flow. We have sufficient profit earned availability system to take care of this.

For Shweta, for the numbers part, approximately, you see the overall [indiscernible] INR 800 crores, whereas if you see our borrowings [indiscernible] and now the balance is -- that are short term. We don't have any long-term debt in our books. So we are very confident that we'll be able to meet this expenditure through our internal approach and we have sufficient liquidity to meet it.

And lastly, on net volumes, we saw a significant decline this quarter. I understand the focus was on value-added products. But the new lead plant primarily focused on pure lead and the existing one focus on value added. So are we likely to see this run rate continue going forward when the focus is on value-added products or what kind of utilization can we expect on that 4,000 tonnes of capacity for FY '27?

Definitely, we would love to focus and will focus on value-added products more, but the volumes will not decline in terms of going forward. And we are looking at a utilization of approximately close to 70% on the new plant capacity, 70% to 75%. So then we have good mix.

The next question comes from the line of Khush Gosrani with GOG Asset Management.

Just wanted to understand this quarter, copper pricing has been very volatile. And we have seen some impact on the reported margins as well. So could you highlight how do you handle this? What has happened on the copper side? And how was the contract structure? That was question.

Yes, you're definitely right. copper prices have been extremely volatile and not only this quarter through the last whole year, they have been pretty volatile. As we have explained in our earlier calls as well, we maintain a completely hedged position on the copper side and as well as our ForEx as well, and -- which gives us a proper clear indication what margins we are able to derive out of the product. Further also, if this quarter, the margins have been better than the previous quarter, one of the good reasons being there was some good demand in the domestic market on the copper, which fetched us little higher value and validation for our recycled copper and that is what gave us a little better margins on the copper side in this quarter.

Sure, Sir. And when you say aspiration of 8% EBITDA margin. Currently, copper is at the lower level of margins on compared to years. So is there room for improvement in the copper margins? And by how much, if you can quantify, that would be helpful because then [indiscernible] coming to an end?

With our current capacity, [indiscernible], it will be low. But when you look at our forward integration in terms of our [indiscernible] we are planning. The margin will definitely go up as I spoke to the earlier call there. I mean on the earlier questions as well. So you'll have a blended [indiscernible].

Got it, sir. And for FY '27 and '28, what are the plans for lead in terms of capacity addition and utilization levels?

We are looking at utilization of approximately close to 70% on the lead side.

And FY '28, we would need to add more capacity in lead. Are you planning anything as of now?

As of now, in these locations, we are not planning, we will try to move towards close to 80% to 90% utilization by FY '28.

Got it, sir. And last question, where are you on the EPR norms in terms of implementation and taking the credit [indiscernible]?

So on the EPS front, the total registrations are starting from June 1. And as of now, government has restructured and they are looking at the stations and people to start uploading the data. And maybe in 3 to 6 months' time, they might then further come out with -- I mean, for the framework for the same.

The next question comes from the line of Saransh Gupta at Swan Investments.

Congratulations on the really good set of numbers, sir. Sir, most of my questions have been answered. I just wanted to understand, like we expanded our copper capacity from 6,000 to 12,000. And in December '26, we'll be coming up with [indiscernible] of copper at load, which is a value-added product for us. Sir, I just wanted to understand like how the mix works like how much of the -- how much of the copper recycling will be for [indiscernible] consumption in copper and how much will we be purchasing from the other market?

As we just spoke, basically from the -- our own recycling about 50% to 60% we will be using, basically, from our recycling the lower grades will be used for the copper cathode production and the higher gate recycled make be directly moved for sales. So let's assume about 50% to 60% of our internal recycling [indiscernible] will go into the copper cathode and balance into the direct market for sales.

Understood, sir. And how will this mix change when we move from 18,000 to 36,000 of copper cathode?

It should remain similar because also we have increased our raw material in terms of our recycling on the recycled part also, we increased from 6,000 to 12,000, and as the 18,000 comes up, we will also be pushing up the recycling part also close to 18,000 or so. So we'll try and maintain our mix of 50% to 60% from internal generation.

Okay. So it will be a fair assumption that from [indiscernible] to 18,000 next year.

Yes. [indiscernible].

Definitely. And sir, just 1 last question. Like we have a CapEx. We have planned for a CapEx of INR 50 crores, INR 60 crores in FY '28. There's nothing new attractive comes up for us. So we can assume a debt repayment in FY '28?

We do not have [indiscernible] don't have anything. Yes, we don't have any before. What we have on our books is just for the working capital part of. So we are a debt-free company in terms of any long-term debt or any of that. So we have not taken any debt on books.

And going ahead, that would also reduce the inventory days coming down to 45 to 50?

Yes. And we are not looking at taking any debt as of now, even for our further expansion or any of these CapEx that we've announced.

Sir. And any plans on Mundra expansion, sir, like what are we looking there to expand it?

Yes. As indicated, in FY '27, we'll be starting up our Mundra project as well.

The next question comes from the line of Naman Parmar with Niveshaay Investments.

Firstly, I wanted to understand on the copper sourcing side. So any difficulty you are facing after the war between the Middle Eastern countries. So any issue on the copper sourcing you are seeing right now? It's normally?

So right now, the volumes that we are doing, we are not facing much of issues on the sourcing side. Definitely, there have been, in fact, the ceiling days have increased in terms of when the vessel arrives versus by 10, 15 days. But again, our payments or payments are on -- can when the vessels derive that does not impact on a payment cycle as well. And we are also further expanding -- we have expanded our procurement towards Southeast Asia as well and looking into aggressively into the domestic markets as well for procurement of our copper.

Okay, understood. Secondly, only after the full forward integration, how much your EBITDA per tonne you will be expecting from the copper? Like currently, you have 45,000 in the Q4.

So as of now, the MAX that has worked out on a very conservative basis, I can say, 60,000 to 70,000 per tonne on the capital side. But definitely, it would be better because once we have the active production in hand, we'll be in efficiencies and definitely have a better margin, but I would like to comment on the low side.

Right, right. Understood. And on the gross margin side, if we see in the current quarter, there was the impact. So it was mainly due to the increase in the contribution of the copper only or it was anything else?

So if you see on the left side, it is in excess of 8%, and the copper is approximately around 3.5% to 4% level. And the blended is what is showing at 6.4%. So this -- in this quarter, the copper contribution is almost close to 14%.

Understood. And lastly, on the other expenses, so what has happened in the current quarter, it has fallen down Y-on-Y also?

On the other expense side, in the last quarter, as explained, approximately that INR 7-odd crores of the mark-to-market was a part of it. And this quarter, that has been utilized in reverse. So that part, we don't see.

The next question comes from the line of Samay Shah with Nuvama Wealth.

Congratulations on the good set of numbers, sir. My question actually is regarding the other expenses only which you explained to the last participant. I mean we were on a run rate of INR 25 crores to INR 30 crores per quarter, which was majorly when our new capacities came online in the past 2 quarters and then it dipped to around INR 18 crores in this Q4. So I just wanted to understand a little bit more on this.

Yes. As I said, the first part is about the MTM, which got reversed in the current quarter. Apart from that, if you see the expenses when it comes to net volumes as we said the TKD utilization about a 65% level, so we have seen very good efficiencies from each and every line [indiscernible] power and fuel, we have reduced environmental expenses, factory expenses, everything has been reduced. So in the coming years to come, the other expenses are in the range of -- with increased volume as well, it will be in the range of INR 20 crores to INR 25 crores moving forward.

[Operator Instructions] The next question comes from the line of Shivam Dave with MIB Investments.

So I had 1 question was on the trade receivables. Now given that you've had INR 120 crores of -- I mean, that has flown in [indiscernible] so should we expect that your incremental capacity expansion that you're doing in copper cathode will largely be taken care from that money that you've got in, right?

I didn't get your question. I mean -- which [indiscernible].

Yes, correct. The trade receivables that was a point in time effect that you got after 31st March.

Yes, trade receivables is for the products sold for which we were to get our payment.

Correct. So you said that on April 5, you've got [indiscernible]?

Yes. Yes. That also the cash flow part, what I said on if you have received that in time if the delay was not there in terms of vessel movement, we have received that before March 31, and the cash flow would have been positive. [indiscernible]

Have we received that money probably our -- we would have had a reduced borrowing. Otherwise, we should have been invested in the short-term instruments. That is what -- that would have drastically come down as we received the money.

Got it. Got it. And the second question was on your overall debt volumes for this quarter. Was there any difficulty in procuring scrap because of the war -- or was this a conscious decision to kind of produce lesser and improve your EBITDA per tonne?

The war situation was more towards the later half of the quarter, so [indiscernible] of that impact was it? It was a conscious decision to sell these specific products in terms of the margin profile.

Okay. Because I think you guided for 120,000 tonnes of late for the full year, and I think you've done [indiscernible]?

We guided to 1,10,000. Yes. And we've achieved almost close to that.

The next question comes from the line of Kaushal Sharma with Equinox Capital Ventures.

So my question is on your mostly industry side, like gradual increase in the best capacities and within the opportunity of [indiscernible] and the most over peers are also in there. So what is your take on [indiscernible] and in going ahead? Do we have any plan by taking in capacities [indiscernible] and sir, what kind of back of this war that is netted and 2 months is going to pass. So what kind of impact that could happen in this first half of our business in [indiscernible] because all over the logistic cost has been increased and there is very difficult time going on?

This is Vaidhyanathan here. As regards to the lithium is concerned, we have been constantly keeping an eye on what is happening in the lithium ion industry. And we have been consulting a lot of technical experts on this, and we are in touch with people. And we are understanding the feedstock availability and the chemistry that is possible to recycle and to the kind of informal sector dominance in the market and also the collection infrastructure and all that. So we feel that whatever the batteries, the EV vehicle that has been sold between 2018 to 2022, we feel the battery stock might hit the market by 2028. So we thought it's probably since we are focused on various other things, we'll take this up later. But we are on it kind of.

And what is your take on [indiscernible]?

There has been a little play in overall receiving of material, like I said earlier as well, when I'm speaking with Shweta that I mean this is -- I mean, most -- there has been 10, 15 days, 20 days delay in receiving of the raw material, and that is actually the major impact. On the procurement side, most of our contracts are on CI basis. And our sales in terms of exports apart from domestic shares, apart from that happening into the Southeast Asian market, where the freight incremental on the outward freight is very marginal when you boil it down to per tonne basis, maybe about $2 or so per tonne on average lot basis. So that part of it has not impacted. Definitely, yes, in terms of the shipping, we have to be -- I mean the shipping schedules move a little back and forth. So that planning has to be a little more precise and backup plans need to be on that.

The next question comes from the line of Abhishek Mehra with Dam Capital Advisors.

So I have joined a bit late, so I don't know whether this question was covered or not, but just wanted to have an understanding of scrap formula. So actually, one of your peers highlighted a drop in the scrap formula for copper segment, which was highlighted as an industry phenomenon. So could you please just highlight or give some brief on what this scrap formula is for copper and as well as lead, and how does it move?

Are you referring to the purchase side, are you referring to the sales side [indiscernible].

Purchase and sale, both. So how does the purchase loan is the same? Is there any different is the reason why the margins get impacted?

Our margins have not impacted. In fact, our margins have improved. I'm not too sure what any other peer has spoken about drop in formula. Are they referring to both sales and purchase. If it's a sales and purchase, it's a whole delta that has moved, so that should not have impacted. But as of what I'm seeing, along with generally the purchase price goes down, also, the sale price also marginally goes down and [indiscernible]. So it's only a follow-through impact and the raw material gets little expenses, the sale part also starts getting expenses. It all depends on the demand and supply at that point in time and how you manage your books hedge. If you're managing your books, well hedged. And if you create a delta in terms of your purchase and sales margin, your margins generally should not get impacted. So the impact can be from the volatility on the metal side or from the FX side, we hedged on both ways, we'll be able to protect our margin.

Okay. Even when there is high volatility in copper segment, there should be no impact on the margins irrespective formula?

Irrespective of the thing we are hedging our position. Formula is based on your metal content, the quality of scrap that you're buying or could reflect to some other terms of your deal. But generally, that is how it is done. And in case if I'm buying something on ex price and hoping that the market will go up and does not go up and come down or is versa, that becomes a speculative trade, which we do not do. So I'm not sure what it's been referred to as in terms of formula drop or any of those sales.

The next question comes from the line of Ayush Jha with Sagun Capital. It's from the line of Sachi Mittal with Concept Investwell.

My first question is if we see any further increase in the competition in span of like 3 to 5 years, will we see a different margins and volumes for POCL?

You see another 3 or 5, I lost you, mam.

I'll repeat my question. Like the competition coming up in the next 2 years, will I see a dip in margins and volumes for Pondy Oxides?

So mam, as we transition through peers going forward, definitely, more players would come into the industry like they have come in, in the last 1 or 2 decades. But we need to also remember 1 critical part that with the energy transition and various infrastructure actually that are happening across the country and the push, our copper consumption is poised to almost go 3x in the next 3 to 4 years from almost close to 1.2 million tonnes to about 3 million to 3.5 million tonnes. So also if the demand is surpassing your consumption and you do not have the on manufacturing, the margin profiles as long as your products are right and we are able to place them in the right market, right customers, and stay well covered in terms of your [indiscernible] side hedges and all of those, you should be able to protect your margins.

The next question comes from the line of [ Devansh with Anwil. ]

I just wanted to check, like you've already clarified about the 40%, like we are in this quarter at around 40% utilization of our blended 2,04,000 capacity. So for Q1, has the utilization moved up already?

Sir, I think you misunderstood the statement. The 40 and 60 mix was told that the lead sales and copper sales mix for the quarter was 60 and 40 in the overall 100% sales mix, not about the capacity utilization.

No, sir, what I'm talking about is that if you take a 2,04,000 capacity, right, blended like 2,04,000 total capacity. So for a quarter, it's about 51,000 and our production is around 20,700 in this quarter. So I'm just calculating based on that, that we've done around a 40% capacity utilization. Is that correct?

The last quarter, as you see, we have to take a blended capacity. Even Phase 2, first month, January, we started. So it was under [indiscernible] effectively, that Phase II capacity was fully reflected the thermal. So overall, if you see 2,04,000 on a blended basis for full year it is for this year only, we have to count. For last quarter, it is approximately [indiscernible], it should be taken as 15,000 capacity, approximately for 1 quarter. So on that basis, TKD, yes, effectively, we utilized. For full year, the blended capacity, yes, what we have to take is about 175,000 metric for full year, approximately.

In Q1, have we seen an improvement already?

Q1 you see a forward-looking statement. There is always growth is there in the current quarter. That's what we can say. Beyond that, it's not correct on our part to reveal the numbers.

The next question comes from the line of Utkarsh Somaiya with [ ICO Quantum Solutions ].

I just wanted to confirm, you said that in FY '27, your lead utilization will be 70%, which is volume of 1,40,000-odd and copper will be 12,000.

Yes, that is what we are targeting and looking at.

And for the FY '28, can you tell me what could be a similar number?

Year-on-year on the lead volumes, we are looking at about 15% growth volumes. So accordingly, we will be taking up at that point in time.

And copper? What about copper?

Towards the end of FY '28, we should be able to do a volume of 36,000 tonnes, close to -- so in FY '28, we can look at anywhere between 28,000 to 24,000 to 28,000, 29,000 tonnes of copper.

24 to 28. So 12,000 tonnes in '27 and 24,000 minimum in FY '28.

On a conservative basis, yes.

And sir, 1 more question. Your EBITDA per tonne for lead, can we assume you can do 18,500 in FY '27. And for copper, 45,000 or using these numbers will be better next year?

In lead, we'll give you a margin guidance of 17,000 to 19,000 as we've been doing. And on a conservative basis, for copper on the recycling part, anywhere between 35,000 to 40,000 trying to maintain on the upper bank. And once the cathode part comes in, right now with our numbers, we are looking at a margin of 60,000 to 70,000 again being on the upper band on a conservative level.

So we can achieve 16,000 for the whole year in FY '28 in copper?

No, I specifically mentioned [indiscernible] part of it.

So can you give me a [indiscernible]?

FY '28, you're asking, yes, FY '28, we can achieve.

60,000 blended number in FY '28, right, for copper. Volume was 24,000?

Yes.

[indiscernible].

As of now, yes, for 17,000, 19,000 for lead. If there would be any product mix or something and if we can achieve higher through our value-added products, we'll be targeting to do that.

So the delta and copper from FY '27 to you on this because your volumes are doubling and your EBITDA per tonne is going from like 40 to 60?

Yes, sir, that's right.

The next question comes from the line of Rishab with [indiscernible] Capital.

Congratulations on good set of numbers. Sir, one specific question in terms of the Q4 numbers. So we have a purchase of stock in trade and traded goods of about INR 122 crores in the fourth quarter of March 2026. So if you could explain in terms of why there is a purchase of stock in trade and did this translate to a superior profitability in the particular quarter 3 numbers?

I'm not sure if you're joining the earlier part of the call. The same question was asked by Mr. Dheeraj, and I'll just quickly recap that. This was an opportunity that was available in the market for us and with good margins. So we were able to take it up, and we did the trade.

The next question comes from the line of [indiscernible].

So I've been following Pondy Oxides for the last 2 years and the real I think that's promising and [indiscernible]. This is actually I would like to cover [indiscernible]. So I have question.

We are unable to audibly understand. So could you be a little louder and a little slow.

Is it better now?

Yes.

[indiscernible] a promise and has been the [indiscernible] value in. So it's actually that is great, and I have seen only with a few companies. [indiscernible] are you stopping the different calls, but only if you are aware I can see what our promise [indiscernible]. I have a couple of questions. Maybe just a question. So the first question is with respect to procurement and the sales, is there any impact because of the Middle East contract?

So basically, like I said earlier, the impact is a little bit on that of receiving the raw materials, and that is what has impacted majorly for us. And that, again, in terms of our capital or something since we have everything on a CIF basis contract. So there's not much of a pass-through. But accordingly, a little bit on the timing part and all of those, we need to plan a little more in advance. And accordingly, we have also shifted a lot of our procurement to different regions are trying to avoid the Mid Eastern part of it.

And also, I think in India, I think last -- especially last couple of weeks the increase in the petrol and diesel prices. So does it have any impact on our margins in quarter?

So [indiscernible], our consumption is in terms of -- we don't use [indiscernible] oils and other gases. There is a marginal impact in terms of -- there's a quota and there's a marginal impact in terms of the pricing. And I think that should not be for too long, and it will be a pass-through as we go to our forward months.

Okay. That's and one last question. So if you see in the last Q3, we have -- if I'm not wrong, we got around 8% of our margin. But if you see in the last quarter, at least Q4, we [indiscernible]?

I would again repeat and highlight that the sales mix is different. If you look at the net part of it, that is in excess of 8% still even for the Q3 part of it. And the copper sales since copper sales are accounting for about 40% where the profit -- I mean, the margin profile in the range of 3.5% to 4%. And that is why we look at a blended margin of 6.4%. And all the numbers have been maintained in terms of lead and copper intel.

The next question comes from the line of Meet, an Individual Investor.

Sir, my first question was like what led to the [indiscernible] spike in the other noncurrent assets and in the other current assets in our balance sheet?

The noncurrent assets is mainly GST receivable from the government of India. Mainly that thing, sir.

So we see the loan to Mr. Meet, if you see the noncurrent assets is [indiscernible] the major business fixed service additions that has happened during this year. And in terms of current assets, which is about trade receivables, which is just a big pie in the overall current [indiscernible] Apart from that, in other current business, we have or GST receivables and supplier advance for that increase. And if you see the inventories, it is more or less with the volumes, with the revenue, it is more or less in line with the revenue numbers. So the major amount attributed is attributed to trade receivables.

Okay. Okay. And sir, my second question was like in our copper business, our sales volume has increased approx 9x for the current year. Then why is the EBITDA per tonne has reduced from FY '25?

FY '25 was the starting year and the volumes are very low. And at that point in time, only very specific amounts were both purchased and processed and sold. So technically, taking that as a base number for a larger volume would not be a right [indiscernible]. So from the first quarter, we've always given a guidance of about approximately in the range [indiscernible] import done for proper and that has been achieved.

The next question comes from the line of Shweta Dixit with Systematix.

Just a clarification, the copper volumes for the quarter include trading volumes as well?

In terms of sales, yes.

So I mean on a blended basis, you've done 45,000 per tonne EBITDA then -- this is a blended EBITDA per tonne for both trading volumes as well as direct manufactured products on the sales volume, right?

The reason -- like I told Shweta that the reason we took up the trade because it was a lucrative trade, and that's why we took it up. And the margin was on the higher side for a trade, and that is why it was taken up by us. Generally, the trading margins are on the lower side, but since you've got a higher margin trade opportunity, we took it up.

Okay, understood. And lastly, just a clarification on what's the lead volume you've guided for FY '27-'28?

We are looking at growth of about 15-odd percent.

In FY '27, so from a [indiscernible] for the segment?

We are looking at from -- somewhere around [indiscernible] range levels we are looking at.

The next question comes from the line of Jigar Jani with Nuvama BCG Research.

Congratulations to the entire team for giving such stellar results [indiscernible] environment. Just 2 clarifications from my side. One, you just said that there is a 40% -- 70% utilization on the 2 lakh volume of lead. So that comes to about 140. So what -- so what would we should take? Should we take a 30% kind of growth on a conservative basis on 1 lakh tonnes that we have done in last year?

70% was specifically for the newly commissioned unit. In terms of overall -- earlier also in a few calls, we had explained the includes value-added product capacity and various scales processing different shales of certain equipment can be used only for certain products. And if those sales are not happening, that capacity is slightly vacant. And the 70% what we spoke was more for the -- specifically for the TKD plant. In terms of volume, like I just spoke we looking at somewhere around 1,25,000 [indiscernible] tons of volume for this year. And if we're able to push it up, we will try to reach slightly higher. But as of now, the guidance that we can look at is about 1,25,000.

Okay. And sir, this still is a very large volume jump lead structurally doesn't grow that high. So have we got any some new customers getting added next year, which is driving this 25%, 30% kind of lead volume growth?

Yes, we have added some new products as well and customers as well.

Okay. Great, sir. And lastly, on copper, when you add this 18,000 copper cathode capacity, it is not fully backward integrated, right, with recycling. So 12,000 will be the...

Yes. So 12,000 recycling capacity and 18,000 will be. And like I said, we will debottleneck that and we will scale that up as well to 18,000.

Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Thank you, everyone, for joining us today and for your continued interest POCL. If you have any further questions, please feel free to reach out to our Investor Relations team at Go India Advisors, and we appreciate your participation and continued support. Thank you, and have a great day.

Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.