Ladies and gentlemen, good day, and welcome to TVS Motor Company Q4 FY 2022 earnings conference call hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayaraj from Batlivala & Karani Securities India Private Limited. Thank you. Over to you, Mr. Jayaraj. Thanks, Neerav. Welcome to TVS Motor Company Q4 and the FY 2022 results conference call. From TVS Motor Company management, we have with us today Mr. K. N. N. Radhakrishnan, Director and Chief Executive Officer, and Mr. K. Gopala Desikan, Chief Financial Officer. As well as our group of members here in the management center. I now hand over the call to Mr. K. N. N. Radhakrishnan for the opening remarks. Followed by the question and answer session. Over to you. Good evening. Good evening, everyone, and trust all of you and your family members are safe. Thanks for joining this call on TVS Motor Company quarter four. First of all, I'm extremely happy and delighted to share with you that Mr. Sudarshan Venu has been elevated as Managing Director effective today. As we know, Sudarshan joined TVS Motor in 2011, and he was appointed as the JMD in 2014. With his deep-rooted values, he has been instrumental in driving innovation and advanced technology and investments in the future technologies like digital and future mobility. His passion for customer delight, quality, and drive for cost management are exemplary. He has created aspirational products which are extremely successful in the market. During his tenure, the company has tied up with BMW Motorrad, established TVS Digital, and recently invested in e-bikes, which is a growing segment in Europe. Under his leadership, the company has achieved more than 1 million exports volume. Due to his special focus on premiumization, it has resulted in the highest revenue, EBITDA and PBT during this year. Coming to 2021-2022, it was a very, very challenging year. As all of you know, impacted by COVID-19, we had the same time last year, a lot of shutdowns in wave two. First quarter after that, we had subdued rural demand, supply chain related issues and huge customer price increases driven by the commodity cost increases. This resulted in decline of the two-wheeler industry by 11%. TVS, with its strong portfolio and focused exports, grew in the total two-wheeler sales by 7%, resulting in a market share gain during the year. With a focus on premiumization, successful new product launches, growth in international business and sustained cost reduction initiatives, the company posted highest ever PBT of INR 1,263 crore in spite of all headwinds. During the year, two-wheeler domestic sales clocked 2.05 million units. International front, the two-wheeler sales was 1.09 million. The company has achieved this significant international business milestone in a financial year for the first time. On Q4, the revenue from operations grew 8%, INR 8,330 crore as against INR 5,322 crore last year. The domestic sales declined by 11% compared to Q4 of last year, against the industry decline of 23%. International market sales declined by 3% compared to Q4 of last year. The total two-wheeler sales declined by 8% compared to Q4 of last year, against industry decline of 19%. Total sales of three-wheeler during this quarter was 42,000 against last year's almost similar number. Profit in EBITDA, we reached INR 557 crore, grew by 4% over last year's Q4. Continued focus in cost reduction initiative helped the company to maintain the EBITDA for the quarter at 10.1%. PBT for the quarter it was INR 373 crore as against INR 387 crore last year. Profit after tax is INR 274 crore as against INR 289 crore. In three wheelers, company sold eighteen thousand six hundred and some. The sales is 18,649 as against the 22,000 of last year. We also sold three-wheeler, 2,669 numbers compared to last year's 2,298 numbers. PBT for this quarter is INR 1.1 million. Overall, for 2021-22, revenue from operations grew by 22% from INR 16,751 crores to INR 24,279 crores is the highest. Two-wheeler sales in the international market during the year grew by 13% over last year as against industry growth of 36%. Domestic two-wheeler sales declined by 5%. Industry decline in the same time was 11%. Three-wheeler sales grew by 39%. Operating EBITDA for the year is 9.4% compared to last year, 8.5%. During the year, the company posted highest ever PBT before exceptional item of INR 1,243 crores as against INR 826 crores last year. With 30 crores incurred towards COVID-19 related expenses are reflected as exceptional item. Profit after tax grew by 60%, 612 crores to 894 crores. TVS continued to achieve profit this year. Two-wheelers grew by 26%, 86,025 compared to last year's 58,901. Three-wheelers, we grew by almost 88%, 11,033 three-wheelers compared to 6,863. As you know, board at its meeting during March declared an interim dividend of INR 3.75 per share, absorbing almost INR 178 crores. On EV, we have excellent positive response from the customers, and it continues to grow. TVS iQube electric, based on the performance, dependable performance, reliable range and silent, comfortable driving experience. As from today, we have more than 12,000 bookings. We are currently present in 60 cities. We have sold so far 10,000 units of TVS iQube. In 2022-23, this financial year, we will be launching a series of new products focusing on different customer segments. Company is readying a complete portfolio of two-wheeler and three-wheeler in the range of 20-23 kW, all of which will be in the market within the next eight quarters. Part of this product will be in this quarter. I'll give you more information closer to launch. In TVS Motor, in line with the vision of electrification, we envisage a wide and reliable charging infrastructure for our EV customers across India. Recently, we collaborated with Jio-bp to access its widespread charging network for its customers. We also have Tata Power and CESL network. We have already tied up with them. This will substantially enhance the customer experience. As you know, EV industry is slated to grow rapidly, and company has got a robust plan for this segment. On outlook for 2022, 2023, we are expecting normal monsoon, and this will definitely help the agricultural sector to grow. This will be the fourth year in succession favorable monsoon in India. The rural economy should get benefit because of this. The future economic impact of COVID is expected to be low based on the wave three, which saw minimal hospitalization. The administrative response to vaccination drive and not resorting to broad lockdown measures is seeing positive impact on the consumer sentiment and overall economic activity. The improved investments in road infrastructure, economic environment with our current mass transit systems is driving higher demand for mobility in the market. This demand is best served by the two-wheeler segment, making its fundamentals very attractive in light of the resurgence in India. Four-wheeler and intercity business is also likely to see a good growth during the year with current trend of crude oil prices and availability and stability of currency. We have a strong portfolio of products which will enable us to grow ahead of the industry. I am extremely happy with the demand for TVS Raider and TVS Jupiter 125, which are the best we have ever seen, and we even have very good order bookings for both these products. We are very confident that these two new products will help us in the growth journey of TVS Motor, both in domestic market as well as international market. We are continuing to expect a trend of premiumization in all markets, and therefore, we are confident that our premium products such as Apache, Raider, Ntorq, Jupiter ZX, Jupiter Grande series and Jupiter 125 will do very well. The present geopolitical climate and allied economic consequences will have an adverse impact on different commodities and crude oil prices in the first half financial year. We have taken judicious price increases both in domestic and international markets to mitigate the impact on the commodity prices. We are pretty confident that this year we will grow ahead of the industry, both in domestic and international. With a strong portfolio of brands like Apache, Jupiter, Ntorq, Raider, and Star City range, and TVS XL and TVS Radeon. The new launches what we are planning this year, we will continue to grow ahead of the industry. Our sustained cost reduction initiatives will help us to significantly improve our EBITDA going forward. Thank you. Shall we open the floor for questions? Yes, please. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headphones while asking a question. Ladies and gentlemen, we will wait one moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Rakesh Kumar from B&K Securities. Please go ahead. Yeah. My first question was around, you know, your EV sales system and production capacity range of plan. So our sales people for the last quarter haven't been able to expand beyond existing cities, and I understand it's the reflection of supply chain, which we have. What is the visibility now you have, and what is the target you have setting now on the sales network expansion? Also on the production plan expansion, you had talked about that, first quarter of FY 2023, you should reach 10,000 unit production. I think that would also be critical for network expansion plans. How are we planning on this? We are definitely confident of ramping up to 10,000 by first quarter end. We had some challenges in terms of some of the semiconductor suppliers, but given the kind of relationship we have with them, they are all supporting us in terms of ramp up. We have an aggressive plan this year. Once we are able to reach 10,000 by end of this quarter, then, as I said, there is going to be a new product launch as well, and we will have a very good quarter after quarter disproportionate growth and we have enough capacity for that. Also we have lined up with all of the suppliers, so it will be a great journey in terms of the EV. I think most important is all the customers of EV and iQube really love it, and that is the reason we have over 12,000 bookings. Great. Thank you for that. My second question was on the acquisition side. We have made a few e-bike acquisitions in Europe, and earlier we had made an acquisition of Norton brand. How are we planning about the product and also the brand strategy around those? More importantly in the context, are these EV bikes would be purely for the European markets, or we are looking at it in conjunction with the Indian EV market and our strategy there as well? See, the whole principle is all these products will be applicable to many markets. The first focus, when we have acquired CMG, is to focus on markets in Europe, because this is the market which is likely to grow very fast. These products with CMG is also a leading provider of e-mobility solutions in this region. As you know, last year they have done INR 7 billion in revenue, and they were profitable last year. We will leverage that. This gives us a huge opportunity to expand the current portfolio of e-bikes, and we will be very closely looking at which are the other countries where we can use similar platforms. We can also look at some point of time India. On Norton, as you know, it's a very premium brand, it's a special brand. Definitely, since acquiring in April 2020, we have set up an excellent facility with all the focus on right talent pool, focusing on quality improvement and starting up for the production. This is in full health. You will see this year production and sales happening in a small way. We are now articulating the plan, the five-year plan for this brand. Once it is ready, we will share it with you. We are confident that both these investments are going to give us huge returns going forward. Got it. Thank you for your answers. Thank you. The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead. Yeah. Thanks for the opportunity. My first question pertains to your comments on the semiconductor situation easing. You talked about in specific context of EVs. I just want to understand, does it also help you alleviate the supply chain pressure on brands like Apache, Raider, Jupiter? Because they've been on the waiting list, all these three brands have been on the waiting list, especially Raider, Apache, and Jupiter 125. And I understand marriage season is ongoing and demand for some of these brands. Will there be any easing of the supply situation on the production side for these brands as well when you look at the remaining 2-4 months of this quarter? Surely. Because we are taking some alternative actions also. One or two players are not able to ramp up or we had a lot of challenges or bottlenecks. We are also looking at augmenting with some more suppliers in this area. We are pretty confident, especially in Raider and Apache. Fortunately, we were able to get full support on Jupiter 125, and the supplier also has helped us to increase the volume. I think what is most important is there is a genuine shortage of semiconductors. We have to plan some alternatives. Also we have to give some time, because both in Raider and Jupiter, the customer demand has been exceptionally good and the acceptance has been exceptionally good. Apache, we had a setback last couple of months, and this month we had a severe setback. We are coming up with alternatives soon. I'm pretty confident that once the current supplier itself, they are going to support us more, plus we will have some alternate suppliers also developed through the quarter. The good thing is the demand front, we are extremely happy in a difficult and challenging situation like this, both the Raider, Apache and Jupiter 125, huge demand, which is a very positive news. On that, for commencement of the demands for these two brands. Just trying to understand, because we've never seen a single month for Raider or Jupiter, and you haven't even activated marketing campaigns for them in a big way because of the capacity constraints. Just trying to understand how much could be the demand with Raider and Jupiter 125 alone as new brand introductions can add to your volume. 50% net cannibalization with some of Jupiter and all of that. Where do you see these brands can head to, at a combined level in terms of volume for your domestic market? Domestic market, you have seen, we exited around almost to 17% market share, which is one of the best for TVS Motor here. Thanks to the existing brands as well as for Raider and Jupiter. This is with some constraints we had in Apache in February and March. You can estimate. We have a huge opportunity to gain significant market share this year with existing brands as well as these two new brands. Please understand that Jupiter 125 is also moving in international market, and also Raider is moving in a big way in international market. Will I be wrong if I assume, like, these brands, once it has exported even 50-75,000 units per month, that is plus export both the brands put together? Will it be a just- I don't want to guide with any numbers. All that we look at is whether the customers are delighted, yes. There is a huge demand, yes. Continuously invest in high capacity and work with the suppliers, work with the dealers and distributors, and make sure that you grow profitably these brands. Thanks for that. Second question is for [Basakan] and for you also in a way on the cash generation. Just because last couple of years we've been investing very aggressively on either acquisition or capability build up, right? Investments probably are growing ahead of our operations in that sense. When you look back now with the SG acquisition being done and creation of the eMobility platform and the expected monetization on the financing arm and some possible transaction on the EV side, is it? How should one look at as an investor and as an investor on 2023 cash flow generation and going forward? Whether in terms of there will be big investments happening again, or we have kind of done bulk of the investments we have, which we wanted to. How should one look at the cash situation going forward? I would like to guide you saying that a significant portion of these investments made by the company are already earning good returns. For example, TVS Credit Services. TVS Credit Services, give me a minute. I'll tell you the numbers during this quarter. TVS Credit Services book value, it's now almost INR 14,000 crores. The net worth of the company, INR 1,866 crores. Q4 contributed INR 74 crores compared to last year's Q4 of INR 62 crores. Year as a whole also very good performance. Again, I go back to the other points. A significant proportion of whatever investments we have made in whether it is TVS or CS or PT TVS Indonesia, you know PT TVS Indonesia. Last two years it's giving us very good profits, and I'm very confident about this year also, 2023. The markets are growing, our exports are growing. There's a huge opportunity in FCL. Also, the two newly invested eMobility companies are already profitable. About INR 700 crores we have invested in this. We have already. We always invest in the right segment and right businesses, and we are confident that we will deliver good performance and returns in the future. We should understand that any company, you have to give one or two years to reach certain levels of complete, you know, maturity in terms of product, quality, standards and having the right network. These investments definitely are going to give very good returns in the future. We are confident about that. Desikan, you want to add anything? Yeah, on the monetization part. I just want to answer Prerak's question. A significant portion of investments have been paid up to a very early stage for our option. Second is the company continues to generate free cash flow, and next year we'll also continue to generate free cash flow. Answer on the monetization part, you did share about financing, now monetization and also potential opportunity for Last time you said that, TVS Credit Services is evaluating various options for fundraising and, we are pursuing various options. We will come back to you at the right time. We are progressing on that front. Okay. Sir, last two points. Just on the software side, I want to ask you a question. We've seen so many new features getting added to your products like, voice command on a new product like Ntorq, a new variant. I just want to understand, this is something which is unique in the two-wheeler industry, right? The kind of features what you're offering on your products, on the connectivity and, digital bit. Just want to understand, are these all, kind of bought out technologies which you're buying from vendors and the license? These are something which you've developed in-house, using your own software development? We completely believe in designing and developing in-house. Of course, we partner with the right, suppliers. We can be really proud that we are really having the spirit of Atmanirbhar Bharat from design and development. I was asking this more from the EV perspective because EV is Even for EV, most of the significant proportion of these developments are completely done in-house. We partner with the suppliers for some of the parts to be produced. Okay, that is the biggest differentiator. Thank you, Pramod. I'll request you to come back in the question queue. I request all the participants, restrict your questions per participant. The next question is on the line of Raghunandhan N. L. from Emkay Global. Please go ahead. Thank you, sir, for the opportunity. Firstly, on the demand side, demand conditions are improving and, your peers are indicating expectations of double-digit growth in FY 2023. Can you talk about which segments are driving this demand improvement? You indicated good traction in rural. Can you also talk about other customer segments like salaried, student, and urban, do you expect traction this year? The good news is, again, last year, you know, because of the lockdowns, urban initially got affected. Once the COVID situation in wave three became little bit better with minimal hospitalization and with vaccination, we could see, I think, the people coming for better buys. See, the biggest challenge was in the entry-level segment, starting from Pleasure and entry-level motorcycles. Primarily because of one, the cost and price increases, whatever they have seen. Secondly, because of the anxiety of the COVID and kind of almost two years of their income level being very, very subdued. Okay. Now, we are seeing first time post COVID three, the mobility. People are now doing their regular jobs. The self-employed are doing their jobs. Schools are opening. I think it is positive for the industry, very, very positive for the industry. I'm very confident that this year you will see rural will come back. Urban will continue to do well this year. The premium products always will sell. Now the challenge is the biggest of the market, which is in the entry level. Those segments will improve this year. Definitely will improve. Also the Indian financing companies now practically, for example, previous years, K. Gopala Desikan can you highlight our collection is 100%. Right, K. Gopala Desikan? Last 4-5 months, there are no provisions there. We have been collecting the earlier made provisions also. To that extent it is extremely robust. I think positivity through many qualitative measures we can look at it is very good for India. What we have to look at is this commodity increases. Okay. If commodity increases can also little bit you know because it's not that we are seeing huge increases but keep on increasing prices. We have some challenges, but I'm very confident in case of TVS, we have a range of products and range of customers, and we can definitely grow much ahead of industry. I am very optimistic about 2023. Always this little caution of wave four, how is it going to be. Vaccination is going to help us. Okay. We all pray that that be like wave three, like Omicron, no hospitalization. If that situation comes, I think we will see a great year this year. Thank you, sir, for the detailed answer. My second question was on the commodity inflation. You know, how severe is the impact expected for June quarter? How much is the price hike and net of price hike, what could be the QoQ gross margin hit? I don't want to look at any shift on the gross margin. I think the way we have to look at it, there is a commodity increase. We are not able to pass on fully. Always there is a balance between your own internal efficiencies and your own ability to look at the range and product mix and geographies. That is exactly the way we look at it. The good news is, for us, almost 30-35% of our income comes from international market. International market, it's really, really doing extremely well. Most importantly, if you are able to grow your top line much faster, I think that gives you supply chain efficiencies. It gives you an opportunity on certain brands to increase price. Maybe you can even pass on fully the commodity prices. Areas where the customers are not able to, you know, fully afford the pricing. It is maybe partially two, three installments. We have different strategies. I'm not so much worried about commodity prices really putting us a headwind. I think it's a combination. You would have seen our results. I think, most difficult times we have given such numbers. Given lockdowns not there, and with existing models and with alternate counter measures, what we are looking at in semiconductor and the new products, what it is today, Raider and Jupiter 125. I'm extremely positive about TVS Motor doing much better this year, both in top line and in bottom line. Thank you, sir. K. Gopala Desikan says, "Can you please share the export and spares number for Q4? Q4, what is the number you ask? I didn't get the question, please. Export and spares, sir. Just one minute. Export, revenue you are saying for Q4? Yes, sir. Revenue INR 1,899 crore. The USD INR realization? 70. [inaudible] Wonderful. Spares number, sir, if you have it handy? Let me look at it. Yes, we have one second. I feel like, the supply issues which you indicated even in month of April, how much would have been the production higher, if not for the supply issues? I think. That's a [dumb] question. Again, I don't want to give a number. Raider was practically we couldn't produce any Raider. I can say that. Whatever was there in the pipeline, we were able to sell. Apache also significantly got affected. Sometimes one-off this could happen in a month. Okay. That was very shocking. Despite that, I think our numbers are very good. That also shows confidence in the market for the existing models. We have to manage between the existing models and the new models. Sometimes one-off brands have got a challenge. We will find alternate solutions for them. Got it, sir. The spares number? Spares number I don't have it, straightaway. I'll get back to you. No problem, sir. Thank you so much. Thank you. Next question is from the line of Gunjan from Bank of America. Please go ahead. Yeah. Hi. Thanks, everyone, for taking my question. Just two from my side. Firstly, on this Norton, I remember this release, which was put out about INR 1,000 crore investment. What is the time horizon we are looking at? And, you know, how much has already been invested? And in the same, you know, on the same, around investments, when I look at this year, you all have invested about INR 1,400 crore in these three acquisitions or subsidiaries associated. When you look at FY 2023, what are the pending payments for acquisitions or, you know, how should I look at this investment number for next year? Investment announced about GBP 100 million. Forty to fifty million are already been made, leading to the creation of a world-class facility and imminent launch of some of the new products or reengineered products that we are planning to do this year. Okay. This will be spread over five years. These investments will be towards electrification, cutting-edge technology and world-class vehicles, manufacturing, sustainability and future of mobility. These are the areas we are looking at. I can promise you will see exciting range of products from global markets, from Norton. This is on the first question. On the second question, I already highlighted to you, majority of the investments, whatever we have done, are giving us very good returns, whether it is CVSEs, whether it is LTVs, whether it is FFEL. Two of the key mobility companies where we have acquired recently, both are profitable. I think we are pretty confident that we are investing in the right segment and the right business, and we are very confident about delivering good returns from these new investments going forward. No, sir, I was just trying to get a number. If there is a ballpark number in your mind that, you know, this is what how we look at 2023 CapEx plus investments. I do appreciate some of these are very strategic in nature, but, you know, generally trying to make sense of the amount of spend which will be made in FY 2023. CapEx for next year will be about INR 700 crore, including our future mobility area. Investments, any guidance? Investments, I don't want to give any guidance at this point of time. Okay. As you said, these are all very strategic. Based on the future plan for the company, we will look at where to invest and the plans. Okay. Just quickly from my side on the financing penetration this quarter, and if you are able to quantify the price hikes taken in January or in April, that will help us. Financing penetration this quarter. Yes, yes. Just a second, please. I think financing penetration this quarter is almost r ose to 50. O verall penetration for 2021-2022, this quarter is around 58%. 58%. It has gone up substantially. That's the confidence which you see in the market. Definitely you are able to see. Okay. Price hikes, sir, and then I'll join back the queue. Price hikes we have taken during this quarter. I think it was around 1.3%. Okay. Thank you so much. Thank you. Thank you. Next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead. Hi, sir. A couple of questions from my side. One is with respect to the RM cost increase which you talked about. Was there any material RM cost inflation seen for quarter or it was doubly faded? No, there is RM cost increase in this year Q1 as well, and Q4 also we saw. Any indication of what was the inflation seen in first quarter and expected in Q1? 1Q market settled because there is always a lag and there will be some negotiations which is going on. Sure. Because last quarter increase itself is something huge. We have seen 1.5% price increase and maybe uncovered is about another 1%. That should be there, given the last 6 quarters of material cost increases, whatever we have seen, because you can't immediately pass on all plans and lead markets. We have to look at a combination of product mix, geography mix, and also leverage the revenue growth. And of course, as to the sustained cost reduction, whatever we have done. That is the next way. But most importantly, if you look at year-on-year, we have managed our material costs very well, given all the headwinds what we had last year. Possibly little bit of better semiconductor availability in the last quarter, and container availability in international market in quarter two and quarter three. I think that would have helped little bit more on the revenue side. But these things happen. However, if you look at overall as a company, highest revenue and highest PBT, and we are able to Q2, Q3, Q4 hit a double-digit EBITDA margin under very difficult situation. Sure, sure. No, that's a very commendable performance in tough times. I'm not worried about that. Second question pertains to when I look at the consolidated performance, the auto component business seems to be having substantial pressure, continuing to have PBIT losses. What is happening in that business? What are we doing to turn around that business? I already highlighted that. See, when we started previous years, it was also having a lot of challenges, but it is today one of the best performers. This year, the PBT itself is INR 106 crore, which is outstanding. The book value is almost INR 1,000 crore. We always invest in the right area. Same way PT TVS is. You look at PT TVS's performance and you look at FCL performance. Two of the investments, whatever we made, are already profitable last year. Significant proportion of all the investments are profitable. There are new investments we have made last year. I'm pretty confident that they are strategic in nature. They are going to give huge returns going forward. Sure. Are the losses in auto component business reflection of difficulty to pass through cost inflation to end customers? Is that the main reason or there's something else here? I think markets have been very slow. All of us know that the markets have been very, very slow. I think the big challenge is this 8 quarters of lockdowns and country by country. Now look at China. China is on maximum lockdown, and many things are getting affected, including containers. I think uncertainty and unpredictability definitely is one of the reasons where these are this last eight quarters. Last eight quarters, I think this also tested the robustness of the company. We can be very humble and very polite in saying that we have done extremely well. Sure. Sir, can you share what percentage of auto component business revenue would be to third party? You are talking about FFEL. Right. FFEL, K. Gopala Desikan, you have how much it outlines? 60%, 60% is for TVS or 40% is for TVS? It's only as far as Sundaram Auto Components is concerned, their dependency on TVS Motor is around 40%. Slightly lower than 20%, the rest are only to outsiders. Got it. Thanks a lot for that. Thank you. Thank you. Next question is from the line of Arvind Sharma from Citi. Please go ahead. Yeah. Hello, good evening, sir. Thanks for taking the question. Sir, first question more on the quarter side. The realizations were literally flat quarter-on-quarter and you say you think 1.5% increase. So how do we kind of tie up this one? I think primarily we lost some volumes in the premium segment due to semiconductor availability, especially in February and March. I'm pretty confident that the kind of countermeasures we have taken, this will become better in this quarter. Of course, April also we had some setbacks, but I am pretty confident that May and June you will see full recovery there. Right. Sir, a quick question. We are already, almost, within a month into the first quarter. How much do you think that commodity costs have been better toward, you know, will be lumped into the first quarter? Is there any sense on that part? Commodity, in my opinion, has reached its peak. Even in Q1, we have not settled on the commodity pricing because the increased requests have been very high. Still negotiations are going on. We have increased prices even in this Q1. I'm pretty confident that there will be a balance you will see going forward. I think once you see the availability of many ingredients for the raw material becoming smoother, you will see a stable situation. Equally, this geopolitical situation easing out also will help going forward on the commodity prices. I'm expecting maybe Q1, Q2 onward you should see some easing there. All right, sir. Just one final question is more on the side. When you're selling your iQube, how much do you think is the commonality between the potential buyers and iQube and say something like a Jupiter or [Ntorq]? Is there any commonality in the target customers? See, since we have not given mass numbers today, we are averaging around 2,500 per month sales. 2,500 in these 33 cities, we are seeing techies trying this in the urban area. To answer you, maybe once we start selling 10,000, 15,000 per month for about six months, I think we will be able to see how the total, EV scooter to IC scooter, how it is happening. My hypothesis there is, scooter as a category today is 22% of the industry in IC. I am very sure this will expand because more and more consumers will look at EV scooter. More and more consumers will look at scooter as a form. I feel that both IC you will see change. EV will continue to grow. I'm giving my kind of prognosis at this point of time. Currently, if I look at the type of customers, they are all techie customers who want, you know. The normal digital type of customers we are just seeing now. You have to supply sufficiently into this market, then you can see what is the overlay of both type of customers. Got it, sir. I'm just gonna ask some more questions. Thank you. Next question is from the line of Amyn Pirani from J.P. Morgan. Please go ahead. Hi, sir. Thanks for the opportunity. Congratulations on a good set of numbers. Just want to go back, you know, apologies, this on the point raised by Pramod Kumar as well as Gunjan. Now, you know, we understand, you know, that when you make an investment, you know, you obviously have a three-five-year view. Markets may not be as patient. What would help us, and maybe, you know, hopefully we'll hear more on this, is that maybe on Norton and maybe on the other businesses, if you could come out and share some, you know, of your three five-year plan in terms of, you know, maybe capacity, you know, which geographies. That will give us some comfort, you know, that okay, investments are high, but that is fine. Like, you know, financial services has done and how Indonesia has turned around, these businesses, you know, will give us, you know, good returns in the future. That was just, you know, some, you know, a point that I wanted to make. Hopefully, like you mentioned, if Norton will start production this year, hopefully we'll hear some of your plans during the year. I can promise you the time what we took for TVS, EV and TVS will be much more faster than that. I promise. That's good to hear, sir. Secondly, on the EV side, you know, as you move from around 2,000 per month to, say 10,000-15,000 a month on the two-wheeler side, do you think that the current format of distribution, which is how you sell it in the current existing TVS showrooms, would work? Or do you think you have to create a slightly different format, maybe a shop in shop or a separate distribution? Because the category, while it's a scooter, it still has different nuances. Would love to hear your thoughts on that. Absolutely. See, TVS iQube, the company, we have also leveraged digital channels for our vehicle booking and sales, and, completely digitally enabled purchase processes, test ride, booking, payments, seamless home charging, unit installations, providing truly hassle-free experience. I think it is going to happen. It is going to happen. In my view, this could happen, not only in India, many parts of the world, number one. Number two, this could also change some of the IC distribution models as well. Today I cannot give an inference that this is the model. We are experimenting both the models. For example, iQube is available through some of our existing dealers. It is also available through the digital channel, but I cannot give you any conclusion what is the proportion through the digital channels and how it is going through that. I think some more numbers, maybe another six months when we start selling 10,000 per month or 15,000, 20,000 per month, I'll be able to give with much more confidence how is it panning out. I am very sure the new digital, the new ways of doing business will happen. Great, sir. Thanks. Thanks for this. I'll come back in the chat. Thank you. The next question is from the line of Hitesh Goel from CLSA India. Please go ahead. Yeah. Thank you, sir, for the Just to clarify, this is 10,000 per month capacity or 10,000 per quarter? 10,000 per month. Now we are looking at. Yeah. I want to hit 10,000 definitely by June. sir, why is the bookings only at 10,000? Just wanted to get a sense, We always, you know, we don't want to have customer dissatisfaction beyond a point once somebody books it. If I open my booking, there are enough people who love this product. We have restricted this 30 cities also. Once one month we reach 10,000, then we will ramp up much faster. Okay. You are planning to get to all over India, right? Which will happen. All over India 100%, and we will also start in international markets. Okay. Sir, on the export side, my second question is on export side. Can you give us some color on what is happening on the export side? Because, you know, all the oil, the demand oil prices have gone up, right? But there's inflation also, which is on the food prices, which could affect consumption, right? Can you give us some sense on how you see demand, especially in Africa, on the export side, what is happening there? Can you give us some color? Exports we see very good growth. What is helping us is our product range and the kind of customer satisfaction we have on the StaR City series or on Apache or even Raider, whatever we have launched or Ntorq or the new Jupiter 125, also small numbers we have started giving. The three-wheeler. I think Africa market is doing extremely well for us. I agree the challenges on inflation is across the globe this year. The positive thing is the political stability, availability and stability of currency, they are all helping. Crude oil prices are somewhere on the higher side this year. Just to rephrase, so if TVS is gaining market share in Africa and Latin America or the market is also expanding? Both. Markets are expanding, and we are gaining significant market share gains in every market where we operate. Great. Thank you. Thank you very much. Thank you. Next question is from the line of Kapil Singh from Nomura. Please go ahead. Hi, sir. Just wanted to check, in terms of strategic acquisitions or investments, how do you think about it? What is the play that TVS wants to have in the mobility space? How are you planning for management bandwidth for, you know, some of these new segments that you are entering? Please stay connected. Line for the management open. Ladies and gentlemen, please stay connected while we rejoin the management back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management re-connected. You may go ahead. Sorry, the line got disconnected. I think somebody wanted to ask some question. Kapil, may I request you to repeat your question? One second for the management, please. Yeah, sure. Just wanted to understand your thoughts on the strategic initiatives in the mobility space and, you know, global motorbike space as well. What are the ambitions? How do you think about activations? And will there be more such strategic investments that you intend to do going ahead? Also, how are you planning for, you know, management bandwidth to look at some of these new areas and new developments? The EV and future mobility, this is something definitely going to happen. We have embraced this change, and that is why we have invested in TVS Motor, as well as we are also looking at strategic investments. These strategic investments are based on looking at global market and opportunity. Because we feel that there is a great opportunity for TVS to leverage anything related to future of mobility. We have a very strong plan and we look at constantly on this area. On teams, you know, we have, for example, we have a separate team on Norton, we have a separate team on Ego. Here we have a separate EV team, more than almost 800 engineers, managers. Especially in certain areas like software and electronics, we are strengthening with lateral hire. We always believe in putting a very strong team and investing in R&D and facilities. Because most important is the belief that what I told earlier, Pramod, Atmanirbhar Bharat means it is also designing and developing. Partnering with many suppliers and global partners who are best in class. We always do that. Those partnerships are helping us, plus the kind of resources what we have invested in. We always do that. Sure, sir. Does this, you know, mobility is a very broad term. Does this include four-wheelers also, if there are opportunities, or will you be restricted to two-wheelers? Some thoughts around that. Now it is two-wheelers and three-wheelers. Okay. Simply I just wanted to ask on PLI, how will the accounting work? Will you be booking on accrual basis or when the company receives the actual receipts or whatever? PLI basically. No, the question, not PLI question, please. Normal question, PLI, I couldn't hear you clearly. No, PLI in the sense that will you be booking on accrual basis or you will be booking the cash flow as per the government notification will take place. You know, they will pay after one year, right? For FY 2023, they will pay in FY 2024. I just want to understand how will the accounting work. Will it come in your P&L in FY 2023 only or you will book when you receive the cash flow next year? No, we will be conservative in our approach and we will account it based on cash flow basis only. Okay. Thank you. Thank you. Thank you. Next question is from line of [Prerak] from Indus Capital. Please go ahead. Yeah. Hi, sir. This is Prerak again, EE Opportunity India. Considering your moped presence and also the number of positions you are doing internationally, how do you see low-speed two-wheeler opportunity in India? What's the market size as per you and what it can grow? And do you see a role for [GEF] to play in the low-speed two-wheelers? See, customer segments will evolve. Definitely customer segments will evolve. When we started moped, we found that there are set of customers in the bottom of the pyramid. They wanted to carry load and they want to earn income. Today, operator is carrying something like 100-150 kgs of either agricultural produce or milk or whatever. It is used for earning every income. Okay? I think we have to closely look at what is this type of application and what is the type of customer segment and then decide. I can't give a generic answer at this point of time. We are studying very deeply customer segment by customer segment. I can promise you every customer segment in the EV space, we will have a product. Any estimates based on this, based on your studies, what is the market size here? Because we, as we are not registered. Too early. Sure. Thank you, [Madhu]. Thank you very much. Ladies and gentlemen, due to time constraint, that will be the last question for today. I now hand the conference over to the management for closing comments. Thank you, conference and stay safe. We are all hoping that even if some wave of COVID comes, it will be like wave three, and it will not lockdown the country and all of us. We will see that the economy will do well in India. We want the rural with the very good monsoon should do well for this year. Overall, with the kind of new products whatever we have launched, Raider and Jupiter 125, and the portfolio of products which we have starting from Apache, Jupiter and Star City range, such as Radeon and XL. Now, iQube, previous iQube, we are confident that we will grow ahead of the industry, both in domestic and international. Our sustained cost reduction initiative, product mix, geography mix, this strategy will definitely help us to go beyond now the double-digit margin, whatever we have clocked quarter after quarter in the last three quarters. Thank you, and thank you very much. Thank you. Thank you very much. On behalf of Batlivala & Karani Securities India Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.