Good morning, good afternoon, everyone. On behalf of UBS, I welcome you all to the Paris Global Mobility Conference, which we are doing a virtual meeting here. We have with us the management of TVS Motor, which is represented by Mr. K. Radhakrishnan, President and CEO, and Mr. K. Gopala Desikan, Chief Financial Officer, and he's also the Group Chief Financial Officer as well for TVS Motor Group companies. The session is for 45 minutes. We will start with brief opening remarks from the management, which will be followed by a Q&A session. Given that this call is for the benefit of the clients, would request all of you to use the Raise Hand option to ask the question and identify yourself and your firm before you kind of ask the question to the management. With that, I hand over the floor To Mr. Radhakrishnan. Over to you, sir. Morning and good afternoon. I don't know which part of the world that you, all of you are. I have joined from Bangalore, and my colleague, Gopala Desikan, has joined from Chennai. It is 1:30 here. 1:35 here in the afternoon. All of you know about TVS Motor? If anybody doesn't know about TVS Motor, then I'll spend some time. Otherwise, straight we'll go to Q&A because we have only 45 minutes. Sir, I think a brief remark, five minutes, I think that will be great. Five, yeah. Yeah. Okay. TVS is in the two-wheeler category, one amongst the top five companies in the world in terms of the market share. We have an excellent product range, starting from the Moped to RR 310. Recently we have also launched the electric iQube, which is doing extremely well in India. Of course, this is available only in India in about 130 cities/towns. As we speak, last month we did more than 10,000 numbers. It's a scooter. We are planning to take it to much, much higher levels, going forward by March 2023. We did 10,000 numbers last month. On an average, we do about 300,000 per month. We have a market share in VAHAN of about 16.5% in India. We have almost 24% market share in the international market, where we are present currently in all the developing economies. On three-wheeler, this is also another portfolio we have. In the international market, we have almost 40% market share. Domestic, we have close to 10% market share. The strength of TVS Motor is we have a very strong design and development group, and we invest behind that. There are very many brands which are successful. In the last few years, when I look at it, we have Apache in the premium category, then Raider in the 125 cc category, then Star City+ entry-level economy motorcycles. In the international market, we have HLX in the taxi market, three-wheeler TVS King. On the scooter side, we have TVS Jupiter, we have TVS NTORQ. Even in Jupiter itself, we have a 110 cc and a recently launched 125 cc. This is from India. We have products from Indonesia, which is [Scoobeck] and a bebek. There are two bebeks, which are Neo and Rockz. Bebek is Dazz. We sell it in Indonesia and also export in many markets. The strength of TVS is the focus is always on the customer. Depending upon the market, depending upon the customer, requirements, and segment, we invest in designing and developing. Most importantly, in J.D. Power, all of you know about J.D. Power, we have been number one in the must-be quality and attractive quality and also service to the dealers. This is the broad brief, so that we can get into the Q&A. Thanks a lot for that, sir. I think we will now start the Q&A session. Would request participants to ask their question to Mr. Radhakrishnan and Mr. Desikan. See, I can give you. Currently, we started off with iQube, the base version. Now we have two more versions which we have launched recently. As I said, last month we did 10,000 numbers. We are now having, as I speak, we have more than 25,000 booking. Actually, we have put a cap of 25,000 because when the customers books it, he will agree for a delivery date of up to even three months. The moment that he books it, he wants it on the same day. We are now looking at ramping it to the next level. Our internal target is by March delivering this 25,000 into the market. That will be a big, big change. If I look at 25,000 scooters, today the industry of scooters on an average in India is about 500,000. I'm just rounding off to the next number. It is about 470,000 or so per month. Already EV is clocking, the medium speed is clocking around 45,000, okay? 45,000-50,000 average. Almost 10% of the industry ICE is EV. In that, we are 20% market share, volume share. We want now that to move to almost 25,000 by March. The most important thing is customers love our product. iQube, you know, they really love our product, and that is the biggest reason for the success. Now, when we look at our scooters, I can only give you an analogy. I don't want to give the exact number, how many products we are planning to launch. In the next 12 quarters, we are focusing on all segments. What are the segments available? For in the example, in the ICE segment, there is an entry-level scooter, then there is a Jupiter, there is a Jupiter 110, there is a Jupiter 125, there is an NTORQ, which is a 125. Please understand there is a ladder of commuting scooter to young and the premium scooter. This is something which goes up. Same way if I look at a premium motorcycle, we have a Apache at 160 cc, which is a 2 valve, then there is a 160-4 valve, then there is a 180, then there is a 200, then there is a 310. There are segments available. Each of these segments we are planning to enter in the next 12 quarters. That is our plan. Most importantly, the design and development of whether it is battery management system or controllers or the IVCUs, these are all internally designed, and we partner with some of the suppliers. Some we make, some we buy. That is the kind of arrangement we have. We believe in completely. That's why I said our strength is looking at the customer segment, and the usage, and also investing in the complete in-house design and development. See, we have today we are importing it, and we have a very good supplier with whom we have a good partnership. I may not be able to give you more details because these are very, very strategic in nature. Anybody whom we associate will be high quality and high safety. Okay? For our volumes and this one, we have to now look at many suppliers. I'm not talking about cell. Cell, depending upon the capacity and the kind of arrangement. We will keep discussions on strategic area. One good thing is, 10,000 has happened thanks to them. Now they are focusing on delivering 25,000. Soon we are also looking at an EV three-wheeler. This requires our own battery management system, and these suppliers are definitely supporting. It is not only the cell supplier, also we have to look at the other semiconductor suppliers in this area. They are all automotive range. I think it's an integrated effort from many suppliers globally. First of all, I cannot give you any guidance on the margins, but I can tell you that we are positive. Positive. When we started, it was negative. Now it has come to positive. For me, it is like any other investment. For example, we invested in our Indonesia PT TVS. I think, in the first few years we made loss, huge losses. In the last three years, thanks to the investment and our maturity to stand the pressure, today we are now coming to almost 10,000 per month on two-wheelers and 2,500 on three-wheelers. EV is going to be exactly like that. Most important thing is you have to build the top line. For building the top line, you need products, you need to segment-based products, and there has to be a very good appreciation from the consumers. That is why we have 25,000 booking. Please understand with EV there is a great opportunity to start giving it to the developing markets where we are exporting currently. Also developed markets, including Europe. Europe and many markets. Whoever has seen our products, that is a great opportunity. All of you know that when you go to the exports, the pricing opportunity and also developed markets, better pricing opportunity. EV is, first is volume. When the top line happens, every line happens. Okay. For example, when 10,000 goes to 25,000, absolutely, you are right. We'll have scale benefits. We will have more and more opportunity to look at suppliers. Okay. As you know, there are opportunities in terms of instead of just one supplier, you can always induct one more supplier. It is very, very important, you know, when you have that kind of opportunity. Our first focus is to customer delighting products, deliver that, grow the volume disproportionately on the top line, and then start looking at what all things we can do in every line. I can give you an analogy, the same analogy we'll be using even in the electric. When we started Jupiter ICE, we had only one base model. We looked at the customer and the customer requirements. Always, there is some when you talk about a salesman, marketing department, they will say that, "No, no, it should be competitive enough with the competition products." We gave a product, the Jupiter base model, along with Activa. You know, HMSI Activa is the most important selling model. We felt that there are set of customers who really want a lot of features, lot of new technology. We gave a ZX model in Jupiter. We gave a Grande model in Jupiter. Recently, we have launched a connected cluster model in Jupiter. Each one is much, much higher priced, much better contribution. I can tell you more than 50% of the sales happen from these models, which are higher variants, which are priced higher. Similar strategy you will see already, you know, iQube, there are three variants now we are launching. What happens is India has got a set of customers, and we have a very strong retail financing arm. When somebody comes in and he looks at a product and say, "Oh, this is a Jupiter ZX model or a Grande model or Classic model," he says, "Oh, per month it is only another 100 rupees." He immediately migrates from a base model to that model. Similar strategies we will be using between varianting with these limited editions and giving... Recently, we gave a model with completely voice assist in NTORQ. Doing extremely well. If I look at Apache, we have given ride modes which are there, or GTT, which are there in the 100 cc, 1,000 cc and 1,200 cc. All of these are priced high and good margins, and there are customers who really want to buy this. This strategy, even in the EV space, will continue. Last three years, you look at the performance, relative performance at TVS versus our competitors. I completely agree that our margins are the lowest, and EBITDA margins are the lowest. From 7% kind of an EBITDA, our last quarter we were at 10.2%. We have done it by continuously growing faster than the industry, thanks to the customer delight on our products. We have invested behind excellent new models. Today, there are plenty of brands which are super hits. When I say super hits, those brands which are selling more than 25,000 per month, including the recently launched Raider and Jupiter 125. What is most important is you have to get super hit brands, invest always in the new products and new technologies and features and areas. Invest in EV, okay? This is something we will continue and grow the top line ahead of the industry. One more most important thing, we are not giving any credit, neither in domestic. Earlier, we used to give huge credit in the domestic system. Today, we have less than 30 days of stock with the dealers. They bring money. What happens is when you don't give your money, the full system works. They will buy only what is required, what colors, what models. What happens is we want the customers to get really fresh products. If somebody keeps three months, the company would have got interest on the credit, whatever there. Ultimately, whatever is wanted by the dealer, not wanted by the dealer, gets into the dealership. We always believe in a kind of a very systematic pull from the channel and getting the customer the best, customer the latest. Ideally, you know, if you ask me, they should be able to get it within one or two days from the production date. That is not easy because there are transit times and logistics and all that. 30 days is a very good period, you know. Lot of new ways of working in the customer satisfaction area we have done, and a pull system. Dealers have to focus on that. Like I said, excellence in customer experience, customer care, that is why J.D. Power has given us number 1 for several years. Coming back to the margin. The moment you see top line growing, we have very clearly three strategies. 1 is the product mix. Premium products, for example, NTORQ plus, you have the Raider, and you have the series of Apache. I think the proportion quarter after quarter is going up. Also, the variants are going up. On one strategy is very clearly looking at premium products and the proportion going up. Second is exports. We look at our exports, okay? Even though there are industry challenges, our retails are always ahead of our dispatch. We always have a We always look at this stock levels, retail going up, moderate the supply. Never the customer gets a problem. I'm pretty confident that the kind of range what we have, the customers are delighted and we are able to grow ahead of the industry. Coming back to the cost side. The moment you are able to grow the volume, we can always get a second supplier, third supplier. We used to import. I remember there was a period we used to import almost 22%. Our import has come down less than 5%. Localize. Localize. Quite a lot of things are localized, and it definitely supports us. Common platforms, you know. A huge focus on common platforms. The themes on material cost reduction, product mix, premiumization, and making sure that we invest without compromising on investing in new product, new technology, and the brand. That is exactly what we have done. That is giving us huge benefits. I am pretty confident that you will see. I can again give you a guidance on our EBITDA journey. You look at the last six quarters, I think that will tell you. That's consistently. We believe in sustained and consistent growth in the EBITDA. See, still we are evaluating all options, not that we have zeroed in on one direction. We are in a very advanced stage. We will come back to you with all your questions very soon. At this point of time, we are evaluating all options. I'm a firm believer that EV transition is there to stay in India because I think the consumers. My experience so far, now we have almost sold more than 66,000, 70,000 numbers of EV. What I see, the profile of the customers, they are willing to look at a new technology, new way of looking at green. This technology will stay there. What is most important according to me is as consumers choose, there are positives in ICE. For example, I can give you iQube. Whichever customer whom I have met, they say that it is a Jupiter. It gives me all the benefits of two plus two, me and my wife and my two kids, and I can carry certain bags and can go good road, bad road, any flyover, rain, dusty, absolutely no problem. In addition, it's completely connected. It has got all the smart features of a smartphone. I think consumers, if you're able to connect with the consumers and give something which is liked by them, I think they will immediately migrate. There is definitely full credit to the government. There are a lot of support in FAME and GST. That is definitely going to enable this transition. Okay? I think EV is going to happen. I may not be able to put a number to it. I think it is for us. In TVS Motor, the way we are looking at is next 12 quarters, we should be present in every segment and we should embrace the change proactively, not wait for, you know, somebody to come in and then start thinking. That is the reason we are investing. Anyway, on the ICE side, we have a very good range, we have very good team. Now, we are building a very strong team for EV. Some of you, if you happen to visit Bangalore or Hosur, kindly let us know. We can take you around and say the kind of products and the investments what we make. I don't want to comment anything on that. All that what I can tell you is by March, I want to achieve 25,000. 25,000 will be much more than whatever you said at that time. Our objective, that's why I said our objective is EV, we see as a great opportunity to seize, not only in India, not only in the developing economies where we are exporting today, also enter into many developed economies like Europe or U.S., or Japan, or any other part of the world. I always tell this to Pramod, we invest today because we have been patiently investing and standing in the crease. Okay? Even in a 20-20 match, if the batsman waits for the right ball to hit. TVS, yes, when we started, many people used to ask me, "No, no." Today it is a 20,000+ book size, and it is the most profitable and also respected financing company. We started with 100% with the two-wheelers. Now, the two-wheeler dependence is less than 40%. Correct, Desikan? You're correct. You're right. right. Y es, y ou're right. Same way, PTT, we waited there. The last three years we are profitable, and I can tell you we will disproportionately grow now. Even EV space, I look at as an investment for future. You invest, you stay there, you stay calm, and do the right things with the right mindset. That's why I said I don't want to give credit and give three months stock. I want to give only 30 days stock so that the customer gets the best. Internally, day in and out, day out, we discuss that. You know, I want to say that first to get iQube kinds of super hit brands built. Okay? You need to have at least four or five brands which are there in the next 12 quarters, like Apache or Jupiter or NTORQ or Raider or Star City+ or HLX or, you know. You build some five, six brands which are strong. Okay, let me delight all of you. The next product, the cool bike for with the partnership of BMW is completely designed by us. It is going to be an EV. See, I closer to launch, I'll give you exact details. Okay? You are absolutely right. There's a huge pressure from many of the distributors to give them this product. You know, when I have 25,000 booking and I am able to give only 10,000, maybe this month a little better and ramping up to 25,000 by March, and we are present only 30% of the market even in India. I will not wait for, you know, only for India to be fulfilled fully. I think we will start soon. I am very, very sensitive with customer booking. I always say that when the customer booked something, we have to honor it. Otherwise, it's also customer dissatisfaction, you know. If you ask me, I wanted to do it yesterday, but, you know, the support from our supply chain people and our ability to ramp up to the volumes, that is what the constant challenge and the dilemma. Our good thing is this 10,000 whatever I have been talking, at least I was trying to do it in September, October, it did not happen, but November it happened. It's giving more confidence now. You know, once you cross 10,000 then go cross 15,000 then 25,000. Definitely, definitely, this is something we want to focus and drive. Only thing is, you know, you know us pretty well. See, whichever market you do, there may be some certain variants they love it, certain features they love it. We may have to do some modification, but may not be the modification in the platform, but some design elements we have to look at it. Certain features we have to look at. Such modifications might happen. I assure you, we won't look at discounting. Okay? The moment you get into discount, what you said is absolutely right. My existing customers feel cheated. Okay? He always say that, if I wait for a longer time, I can get. I'm not talking about half a kg of sweet given or, sometimes they give in the season time, maybe, you know, part-half face helmet free. I'm not talking about that. I'm talking about literally the price coming down. Okay? I'm a firm believer that there are retail finance schemes which are available with down payment and EMI. Even there we are very clear, you know. You don't give it to any type of customers. Give it to quality customers. Quality. When I say quality customers, you ask Desikan, he will tell you. Delinquencies are less than 3%, Desikan? Correct. Yeah. To me, the quality of customer and the quality of the resale price is very, very important. Why do I say that? Because more than 50% of the customers use this as the down payment when they buy after three years or four years. Very, very important. Okay? Number two, even when we all wanted the cost to come down disproportionately, please understand, this is a cycle we have seen. Okay? For example, now, we went through the lockdown, then suddenly, the lockdown got released, and we were all happy. Suddenly, there is a inflationary pressure because of the war. I have always seen, there are planned headwinds, unplanned headwinds. Okay? This is life. Third, I think the most important thing we have to give is give better and better value to the customer. You know, technology to the customer, features to the customer. That will enhance your pricing power. Okay. Growing volumes will always help you to build your EBITDA margins, both in percentage terms and also in absolute terms. I'm a firm believer that. We have to invest. We have to invest. For example, EV, we are disproportionately adding the software engineers, the analytics and digital team, which was not kind of numbers we had in the past. Okay. Disproportionately we are adding that. That is the space for the future. Some of the things even what we are trying to do in the EV space will be applicable in some of the ICE products. I think, these investments, one, your overall top line will grow disproportionately. The cost will get amortized. I'm very sure you would have seen our marketing costs. When the brands become stronger and stronger, your costs get amortized over a larger revenue figure, the percentages will come down. Overall, the strategy is sustained growth EBITDA. First to come to double-digit, now next step we have taken, we will continuously do that. We will never compromise building a brand, investing behind the brand or investing in technology. Never. Good times, bad times, immaterial. Customer, technology, brand, these are here to stay. You need to invest. We never look at it as a cost. We look at it as an investment. EV business, I'm very sure Tiger TVS CS or PT TVS, this is an investment for proactive investment, let me put it that way, for the future, which is going to take this company to even developed markets. Surely, surely. First is to leverage the Norton brand in many of the developed markets, because there is a huge positivity about that. Once you have the brand and the kind of you would have definitely seen and liked the Ronin, so this is the first. The good thing is, you know, already we have sold more than 10,000 bikes. There are 10,000 proud customers in the last three months. I'm excited about it. You know, like Apache brand, how we built. Ronin is another full category which is getting built. I'm very sure India is, I think next 50 years or 100 years belongs to India. That is the way I look at it. We have the right demographics. We have got the right population. There are a lot of investment happening in the infrastructure. Even a small percentage, 0.1% of the premium multiplies into the population, it's a huge number. Huge means huge number. Definitely we cannot ignore even with the Norton brand India. I think when the volumes start growing, that is the time to look at having common platforms. I think that gives a huge benefit to the company. To even the supply chain and for even the service, always we people talk about part count. Part count is very, very critical when it comes to the end-to-end supply chain. Indirect costs of managing the number of parts. This is one of the key points what we always look at inside the company. For that, the most important is disproportionately growing the volume. It has started. For example, if you recollect, there was a brand Wego, which was doing extremely well in Sri Lanka, Bangladesh and some other markets, which Sri Lanka is not there. Now Iran is not there. The platform is common with completely Jupiter. you know, you understand what I'm saying. Huge opportunities I can give you. Most importantly, one thing we are very conscious is always the customer retail ahead of the dispatch from India. Okay? If you recollect, I think September, I think we were 66,000. Last month, I think we were 72,000. Now you will see every month going up, but I can tell you my retails are far, far ahead. I am very sensitive... To me, the stock with the distributor, the stock cannot... We cannot pump and pump because it will affect the stock levels at the distributor level, and the customer will not get a fresh vehicle. I'm coming from the customer side, you know. Customer should always get a very, very fresh vehicle. We always look at country by country, model by model, even if it is giving you some pain. Okay? My retails are picking up. I'm gaining in return. I'm also gaining in dispatch, which is sustainable. Even in India, you can visit any of our dealers. I think March 2020, I think when just before lockdown announced, that is the time we said, "Let's pull out all the credit." There'll be a cash and carry model in our domestic market. It was a very difficult decision, because when you give credit, you can push what you want, not necessarily what the customer wants or the dealer wants. Okay? Today, when a dealer brings in money, they will take only what they want, what the customer wants. Ultimately, you know, you will not have any kind of customer issues because customer get what color they want, what model they want, and relatively very fresh. Those are the principles which. In the international market, I feel there is a huge opportunity for TVS because we have the best range. We have the best range, including Indonesia, if I add it. There is a huge opportunity for TVS. I think the journey has just begun, I'll put it that way. I'm mindful of time, but just wanted to take up the discussion on the domestic demand scenario, sir, because there is a lot of optimism. A lot of this is coming from the two-wheeler retail data in the festive season, and saying that rural is coming back in a big way, led by 100 cc category. What is your read on that? Was there other factors which kind of resulted in the sharp spike in retail? If you look at VAHAN data for the last couple of weeks, the numbers are cooling off. Numbers are cooling off very rapidly. If you just make some quick comment whether we have turned a leaf on the rural side and it's gonna be a sharp comeback on the rural demand side, going into next year if, e specially for 100 cc. See, the rural is according to me, post, I would say 2020 to January. The COVID situation and the hospitalization, that worries are now getting slowly getting mitigated. I think first was marriage season and Diwali season. You know, practically, there are no hospitalization. Even when I speak, I don't see anybody getting affected and getting into ICU or ventilator. I think that fear is gone. The kind of vaccination drive and other things are definitely helping. Why is it important? Because rural was most affected. Now, the moment this was opened, I think slowly now we are able to see. Rural there are 60% or so is self-employed. You know, they earn every day. All my moped customers are utility customers. They earn every day $2, $3, $5. They carry milk, they carry agricultural goods, they sell apples, oranges, whatever. I think they do. Many are self-employed like plumber, electrician. You know, they go house to house and do and then earn. I think that activity is back, which is very, very positive. Very positive, number one. Number two, India, definitely there is public transport is very poor. A lot of investments have been made in infrastructure today. You know, I travel by road quite a lot. Now, even in the rural area, there are a lot of effort in connecting. People really want to be mobile. People want to be mobile. That visibility is there. This is number two. Okay? When they are mobile means they need two wheelers. Okay? So far, if I look at last 12 quarters, again, I don't want to repeat which I always believe in. 45% is the price increases. Of course, it is BS6. Of course, it has got EFI technology. It has got everything. I don't think consumers' ability of income earning has gone up by 45%. Now, the confidence has come from the people's side that the income is going to be continuous. I think the basic hygiene factors are taken care. The medical worries are not there. I am very positive about 2023. Going forward, you will see, and we have seen that in our previous years, you know. If the delinquencies are not there practically, that means people have ability, they are paying back on time. The things are coming back in a big way. In my opinion, India has got the greatest opportunity. The demography, the profile of the people, the mobility needs. I'm a firm believer that at some point of time you should start seeing the 10% CAGR happening in the two-wheeler side. No, that's great to hear, sir. I think you did mention about TVS Credit, just want to touch base on that business in terms of you've stated your intent publicly earlier, that you would like to bring in financial investors in this company for the first time. So far it's entirely captively funded from TVS Motors' cash flow. Just any update there which you can share, sir, and what it would that mean for TVS's incremental investment run rate, and also the valuation, value unlocking, what one should expect from such a transaction, sir? It's too early to comment on that now. Still, we are discussing. The fact is yes, we have engaged a banker, and if everything goes well, probably in the next 30- 45 days, we will come out with a clear proposal on that. Till such time, TVS investment for maintaining the business-r elated reasons, we will be investing. Sounds great, sir. I think we overshot on the time side. I would like to thank you both for taking time out and spending time with the investors. Also would like to thank all the participants and my colleagues from Europe for taking time out and being on this call. Wish you all a great day. Stay safe. Take care. Thank you. Thank you. Thank you so much. Thank you. Thank you Thank you very much.