Hi, Patricia. You're on. Hello. Hi, good morning, everyone. Hello. Hi. Hi, Patricia. Good to see you. Hi. Okay. Good, good. sorry I'm late. I was waiting on the mic on Teams. No, it was an issue on our side because, you know, I wasn't able to come on that platform, so I requested this change last moment, so apologies for that. No worry. Let me, let me not waste much time for you guys. You know, I'll just introduce you. We have Mr., KNR, who is the CEO TVS Motors, and we have, Nesicken, sir, he's the CFO. You know, it's always good, engaging with them. You know, I'll let you guys, let you take over the meeting. This, sir, Patricia is from Edmond de Rothschild. She is Emerging Market PM, and there's Archit as well, who works with Patricia. Over to you guys. Yes. Thank you very much for organizing the call. Thank you very much for your time to introduce your business. We have also an India fund dedicated to India. I would like to ask you to take over this conference. It's thank you again for your time for doing this conference for us and presenting your business. Actually, it's the first time that we have this call with TVS. Can you hear us? Yes. Good afternoon. Good afternoon. Yeah, good afternoon, and thank you for taking this call. As Patricia mentioned that this is the first time we're having a call with TVS management. We just wanted to, you know, get some idea of the business and strategies. I'll start with some questions, unless you have something you would wanna start by. No, you better for time management, you start with the questions because you know the basics of TVS and what we do. Little louder, please. Little louder. That will sort out. Sure. Sure. Like my first question is around the EV business because it has garnered some very warranted attention in the last few quarters. Like you doubled the guidance for the EV around close to 25,000 from a month. Can you please explain how you're expecting to reach that number? I know you're looking to expand the network, I would also like to understand, is the supply chain aligned for the ramp up, given that we are already delivering the premium models almost to demand? The EV business, like I have always highlighted, first is to get the product right. iQube has been a fantastic product which is really delighting the customer. Currently we have about 200 outlets, our own outlets, ICE outlets, our bookings are little more than close to 30,000, I can say 27, 28. Because we have stopped the booking primarily because we have to deliver. The focus is on for fully on delivery. Month after month, we are able to ramp up better, thanks to the supply chain. We are moving towards that 25, close to that 25,000 in the month of March. This is one. From the point of view of the product, it is like any other scooter, but what is most important is it has got a lot of digital connectivity. It has got many, many connected features in iQube and that is really delighting the customer. It's a, it's a mobile on, you know, digital on mobile system, so consumers are liking both. Coming back to our overall EV strategy, we have a plan to deliver segment-wise products because there are many segments in India. If you look at the ICE, you have seen very different segments. You will see many more launches from the company in various quarters. We are also getting ready with our three-wheeler on the EV side. It's just going to be great opportunity for TVS, first, to expand in India to 100 dealers, which can go to much, much higher level. Second, deliver these new products, to delight the customer, various customer segments. Then, start international because, there is a requirement in the international, there is interest on this product, but without satisfying the local demand, we don't want to start it. Possibly next year you will see we're getting into some other markets. Okay. Thank you for that answer. I was just, so if I understand it correctly, for now you don't see any roadblocks in the supply chain because I think in the last call you mentioned there was some problem with the Apache in September which got sorted. I was just trying to see if you see any major risks to ramp up in the future. Yeah, Apache- You don't see any. ICE product, primarily we use electronics in the ECU. In the EV vehicle, significant proportion of, whether it be software or connected cluster or motors, controllers, we have more and more EV parts. There, Ramp up, because month after month we have to move to... When I spoke about 25,000, it is getting 1,000 per day matches sets. We are not yet there, but everybody has promised to support us to get a 1,000 per day. That is the focus which is going on. Okay. Okay, sure. You, like, mentioned something about different segments and, like, regarding also the collaboration with Amazon. I believe the company commented something along the lines of intent to expand across multiple segments. I just wanted to get your idea about your plans for different segments of the EV portfolio. Like, does the company plan to make the three-wheeler available through direct to customer channels? Or by when can we expect the products in different segments? I can give you an analogy. If you look at Jupiter, for example, you have a 110, you have a 125 Jupiter, you have an Ntorq. Same way if you look at Apache, there is a 160, 180, 200, there is a 310, there is a Ronin. Mm-hmm. If you mind map the type of customers, I think each customer, their requirements are different. Their expectation is different, their performance expectation is different. Also, you know, if you look at the 310 Apache or Ntorq, the customers are very young. Okay? Very young means around 25, 22, 23, that kind of age group. We will have products, if I look at iQube, it is used by everyone, practically everyone. It's a common commuter, scooter EV. Okay. Beyond that, closer to launch I'll be able to give you more, more insight because these are really, really confidential and we want to really excite the customer just before launch. No, no. Yeah, that makes sense. Still thank you for that answer. Okay. Okay. My next question is around the subsidy, the FAME subsidies, and, like, with the great acceptance for iQube, and no doubt it's, like, a great product, but with that sort of response, it's a double-edged sword, right? The runway for subsidies keeps on getting shorter, maybe seven, eight months now. Your voice is breaking. financially in 2024. Your voice is breaking. You are not happier, please. Your voice is breaking. Oh, okay. Yeah. Oh, okay. Okay. Hold on. We have to put some extra effort to understand your question. Could you repeat the question? Yeah, yeah. I'll switch off my video for a second. Yeah. Maybe that makes it better. all right. yeah. Is it better now? Yeah. We can hear you, but you can a little bit be louder. Yeah, yeah, sure. My question was regarding the subsidies, the FAME subsidies. I just wanted to understand, since we have received such a good response for the iQube and you're coming up with the new models and we're expecting a ramp up. With that sort of response, the runway for subsidies, it keeps on getting shorter, maybe around seven, eight months now on, if you're looking at the optimistic side. Just wanted to get the understanding of the strategy once the subsidies are not extended. Secondly, with the tightening of the battery standards, do you think that this could also have any material cost impact going forward? See, subsidies are, first of all, thanks to the way government has put support. When you need such major transitions, you need, you know, competitive price to change the mindset of the customer. Mm-hmm. That is the reason government has taken this very strong support in the form of FAME. In my opinion, what is most important in any business is to make sure that the customer loves your product. Okay? Once the customer loves your product, then you are sure of the demand. Second is, I can give you an analogy. When India started exports, we had almost 15% benefit in export. That continued for two, three years, and then they kept reducing the rate. Today, practically it is only 1.5%, the export benefit, what we get. Okay? It is to aid, it is to support. If somebody assumes that FAME is going to be continuously there, it is not going to be. We have also not planned in our business plan that FAME is going to be a permanent feature. That is number one. Number two, what is most important is, when you are present in various customer segments, the pricing will become different, the profitability becomes different. Even in iQube, if you look at it, there are three products now, three variants. There is a basic variant, there is an iQube S, there is an iQube ST. It's completely priced differently. When you give higher and higher variants, you know, you can price it higher. I can give you one example. You are very sure you would have seen our Jupiter. Okay? Yeah. Jupiter is equal in terms of price to Activa. Activa is a Honda product. It is the biggest competitor in that segment. We have been able to put very clear variants over Jupiter. We have Jupiter ZX, then you have Jupiter Classic, then there is a Grande version. Each one has got certain features and certain, you know, attractive features, plus technology, plus a certain look and feel itself, you know, and priced differently. When we started, 95% was the basic model. Today it is 50/50. Mm-hmm. These variants also gives you better and better profit opportunity. This is one. Second, you know that these products can be exported both to our current developing markets and developed markets, where the pricing can be completely different. It will be a strategy of first growing the top line, coming up with the variants, very clearly having new product launched over a period of time, exports. Please understand, when the volumes go up, there is a huge opportunity to cut down the cost. I'm very sure even the scales, when we started, you know, 18650, now it is 21700. There is a chemistry change, there's a cost change. There is going to be future chemistries which are going to come. Everybody's continuously working on how do you bring down the per unit cost. It's a journey. I am not so much worried about paying, not there. What is most important for any company is to delight the customer. If the customer gets delighted about your product and the top line is assured, every line will follow. Okay. Okay. Yeah, yeah. That definitely makes sense. I think the ideology of being customer centric is what kind of garnered our attention in the first place towards TVS. Yeah, it's great to hear that you are still aligned with that. All right, my next question is around the fundraising part for EV business. I understand that the company, they recently filed a disclosure that it's continuously exploring new value creation opportunities. I just wanted to understand your thoughts on, like, what sort of importance and implications you think that these investments have. Where does this process sit on your priority list? Is this something that you are actively working towards, or is it still something that still needs time to be finalized? Fundraise? Mm-hmm. Yeah. This is one. We are still in the same stage of evaluating options, including through a fundraise. Not yet closed, not even decided at any level. Whatever that is there in the press, I mean, it's not something very authenticated. We will come back as and when we decide, once the board decides. As of now, still we are exploring options only. Yeah. No, I understand that. I just wanted to understand, like get your thoughts on do you think it's really important or, like, could you see the business growing without that as well? Like, what's your understanding of the fundraising part? Fundraising doesn't have any kind of connections with the business. Okay? In fact, the various options I said, including option of investing my own money. In no way this will stop or hamper or delay our process of EV journey. We have a very clear roadmap of what kind of investments we have to put, what kind of customer segments, what kind of technology. That will continue. That will definitely continue. Okay? We are evaluating various options. That is what Jesigan is highlighting. Okay? Whatever is appropriate, what is the best for the overall business decision, we will take it forward. Okay. Okay. Yeah, sure. That definitely makes sense. All right, regarding the domestic business, in your recent comments you seem very confident about the demand recovery. If you look at the, like, the trends, other than the festive season, the demand has been very moderate. Where you were expecting, like, a cyclical rebound, can you maybe explain why the market was so weak and also, like, give your comments on, like, the on-ground sentiments about recovery? See, market, we should leave this Q1 of last year because previous year to last year, the Q1 showed huge growth primarily because last year we had in Q1, we had the COVID related closures. This year, if you look at Q2, Q3, I think the demand has been moderate. I won't say it is bad. Purely if you look at the Vahan, which is the registration, I'm not even taking the dispatch data. Vahan has been around 4%-5%, which according to me is a good start. There are some more improvements required. One positive thing is the COVID situation is really easing out and we don't anticipate any more lockdowns. If lockdowns are not going to be there, you remember that, in two-wheelers, there are two, three fundamental principles with the government putting a lot of effort in the infrastructure development roads, good roads, and public transport not being there so good, I think two-wheeler is the most important mobility vehicle, number one. Number two, more than 50% of the Indian consumers are self-employed. Okay. The efficiency and the effectiveness goes up when they have a two-wheeler, whether it is a plumber or an electrician or agriculturalist or somebody has to distribute milk or any item, he earns money every day. Okay. On the other side, premium, India is the youngest country. Okay. The demography has been fantastic. Okay. On one side you see the premium products are growing up, industry growing up. On the other side, the confidence of self-employed that there are no lockdowns, they are able to do their job. I'm of the view that... Monsoon has been very good. Overall, the sentiment, month after month is likely to go up, is my last time feedback. It is happening. 4%-5% is not a bad growth. I won't say it is a bad growth, given if you look at the overall geopolitical situation, I don't think there is any country which is seeing 5% growth in this kind of situation. You know, the economy has projected next year 6.5%-7% of GDP growth. I think all these are going to aid India two-wheelers doing extremely well. Yeah, yeah. Sure, sure. Thank you. Thank you for that answer. On that front only, like, I want to talk about the ASP. We are seeing like really constant improvements in the last quarters and almost 6% this quarter. Can you please comment on the impact of different drivers? Like, how much is like the percentage of price hike, domestic versus export, introduction of EVs, and how do you see this metric change in the future? I think, I don't have the data. I'll try to just take out the data. On terms of price increase, I think we have been very, very conscious. Whatever the material cost increases, whatever we have seen, we were able to take up the prices. Even last quarter we have taken up. Just give me a minute. Just referring my notes. If you look at Q3 this year to Q2, actually our material costs have come down 76.3%-75.5%. There was almost 3.5% commodity increase. Most of it has been passed on. There were benefits on material cost reduction. Overall there is a net benefit of 0.8%. One important thing which has happened for TVS is the focus on material cost reduction and premium product selling, the proportion going up. Whatever I told in the meeting was that this year, the electronic parts price, we are not seeing much of a shortage. I think the situation is likely to ease out going forward in price. The demand is good overall. And raw material may not go up the way it has gone up last quarter. We are seeing the settling down of the raw material costs, the material cost reduction kick in, also the availability of the electronic components becoming better for EV. Overall, I think you will see the same trend in terms of better demand. Okay? Only in the case of international business, we saw that there were some challenges, we have been very careful because the moment the industry came down, we started moderating our stock levels based on the retails. Today, if I look at last three, four months, our retails are much ahead of our dispatch. We are thinking that this slowdown may be another couple of months. You know, by April you will see the recovery coming back. We always believe in keeping at the, at the distributor or at the dealer in less than 30 days of stock, plus whatever is the lead time for transportation. You know, that has been the fundamental principle we have always looked at. Okay, okay. Yeah, that definitely adds up. Just like you mentioned about the export market, so, like, one question on that front. You mentioned that you're expecting recovery around March or somewhere around that. What I've noticed in the last few quarters that TVS has gained a lot of share of the export market. I was trying to understand what were the drivers behind that and what do you think that once the demand recovers, is TVS gonna continue doing that and improve their share in the export markets? How would, how would they continue to do so? Surely. See, I always say that the share is the best indicator because industry you don't have a control, geopolitical situation beyond a point you don't have a control. You know, some of the best markets like Sri Lanka, Myanmar and even Bangladesh, you know, when you have this geopolitical situation, the currency situation, you can't do much about it. Overall, within the industry, you are able to do much better. In fact, the gain of market share has been very, very good for us, thanks to the consumers having confidence in our product range. We always believe in putting the right product range, investing in the right kind of segments and giving new products, also upgrades in the current products. That journey will continue. That gives us enormous confidence that we will be able to continue to gain market share, even international market and domestic market going forward. Okay. Okay. I just wanted to like... So you consider that upgradation and confidence in product is, has been one of the main drivers for you to improving international market share, correct? Even in the international market, we always believe in customer service. We have authorized service people, parts availability. These are very fundamental things we always closely watch. You know, you know, many of the market, the first service comes just after 2-3 weeks. Genuine parts- Mm-hmm. -have to be there. Even before we send the material, we send the parts. These are all certain value systems of the company focusing on the customer and the kind of, focus on products and product range. Okay. Yeah, sure. That definitely does make sense. I think, that's all the questions from my side. Patricia, if you have any questions? Yes. I have just, some very complete, just have one last question, my side. If you could just, to finish the call, what's your, view for TVS in five years in terms of penetration rate on sustainability of margin? What's the margin that you think is sustainable for your business? That's my last question. Thank you. Mm-hmm. Overall information was very good. Thank you. Yeah. I already told you about with EV vehicles now and with the partnership with whatever we have done with BMW, there is a great opportunity to take TVS brands not only to the developing market, but the developed markets. You will see a big drive in really becoming TVS brand global. That's number one. Mm-hmm. Number two, we are at 10% EBITDA and, with the customer delight and more and more new products and the revenue growing ahead of the industry, I'm pretty confident that our cost will get amortized over a much, much higher revenue. That will definitely translate into much better EBITDA numbers. I may not be able to give you a guidance, I am pretty confident that the premium focus, the geography focus, development mar focus, the drive on cost reduction and overall, you know, focus of the company on looking at various elements of cost is definitely going to help us in terms of doing better and better EBITDA above 10. Okay. Do you have time for one more question or...? Yeah, yeah, please. Oh, okay. Thank you. In terms of your cost. Before you ask the final question, anytime you are in India, kindly visit us. You can have a direct feel, we can host you. Yeah, that would be great. I'd love to. Love to see the product itself. Yeah. I haven't been in yet. Thank you very much. This invite is for everyone who is now in this screen, including Gunja. Yeah. Gunja, maybe you can organize that. Yeah. Thank you. My question is, in terms of you said like, the materials, you put some pressure on the, on your margin. Do you see like, how do you see the battery e-evolving, in the future? We have seen some experimental with solid-state battery for scooters, in China. Do you think that could be, something to go as well? Like, what's your view on the cost side, especially on the, you know, advanced material like the battery part? I think battery, when we started with, we started with 18650, now already we have moved to 21700. I think the rate of pace of change in battery cells and the technology and the chemistry, I think all are linked to the volume. Patricia, if you ask me honestly, the most important thing is top line. How do we grow the top line? How do you make sure that I deliver all the new products, whatever I have planned? If these two are done, I assure you with every innovation, whatever we have seen, whether it is cell or BMS or the motor or the controller or the integrated VCU, you will see significant cost reduction. In fact, disproportionate cost reduction is the word I would like to say to take this company forward. Okay. With the operational leverage, right? Yeah. Okay. Thank you. That's great. I think, Thank you very much for your time and organizing. Thank you very much. Thank you so much. Ashish, I think you had everything. Yeah. Gunja, I wish, thank you very much for organizing the call as well. Wish everyone a good weekend. Thank you. Thank you. Thank you very much. Thank you. Thank you for taking the time. Bye-bye. Bye-bye.