Ladies and gentlemen, good day, and welcome to the TVS Motor Company Limited conference call, hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participant lines will be in the 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 the 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, and over to you, sir. Thank you, Steve. Welcome to TVS Motor Company Q2 FY 2024 results conference call. From TVS Motor Company Limited management, we have with us today Mr. K.N. Radhakrishnan, Director and Chief Executive Officer, and Mr. K. Gopala Desikan, Chief Financial Officer. I'll now hand over the call to Mr. K.N. Radhakrishnan for the opening remarks, to be followed by question- and- answer session. Over to you, sir. Good evening, good evening, everyone, and thanks for joining us today. First of all, I would like to give all of you and your family good festive season greetings, good Diwali, and great success during this year. Now, during Q2 quarter, company continued its growth trajectory and posted the highest quarterly sales, both in ICE and EV. Both revenue, EBITDA and profit. Recorded highest ever revenue of INR 9,228 crores, with a growth of 13% over last year, Q2. Recorded highest ever operating EBITDA of INR 1,080 crores, with a growth of 20%, and margin improved by 70 basis points from 11.1% during Q2 of last year to 11.7% during this quarter. We have achieved the highest PBT of INR 897 crores, registering a growth of 24% over the last year. Please note that we have not considered PLI, even in Q2. All these achievements were possible because of the continuous improvement in the sales, sustained cost reduction initiatives. Now let me get into more details about second quarter. The two-wheeler sales ICE grew by 14% compared to Q2 of last year, as against industry growth of 10%. The two-wheeler international market, company sales grew by 16% over last year. Two-wheeler ICE sales grew by 15% compared to Q2 last year, as against an industry growth of 11%. EV two-wheeler, we have increased to 31% comparing last year, quarter two, last year, quarter two of 58,000, 75,000. This is the highest we have done on EV. Total sales of three-wheelers was at 38,000 during this quarter of Q2. During the quarter, the company's operating revenue grew by 13%, and we are at INR 9,228 crores as against last year's INR 8,145 crores. On profit, during the quarter, company registered highest ever operating EBITDA of INR 1,080 crores, with a growth of 20% as against EBITDA of INR 900 crores during last year's Q2. Company's operating EBITDA margin improved by 70 basis points, 11.7%, as against last year's 11%. And all of you know that sequentially we are improving our EBITDA performance. Company posted the highest ever PBT of INR 897 crores, recording a growth of 24% this quarter as against INR 724 crores in the second quarter of last year. PBT for this quarter includes a fair value valuation gain of INR 23 crores as against last year. Also in Q2, we had a fair valuation gain of almost INR 38 crores. Please note again, we have not considered PLI during this quarter. Profit after tax grew by 23%, INR 663 crores, as against INR 537 crores during second quarter of last year. H1, the company's operating revenue has grown by 15%. We are at INR 17,604 crores as against last year's INR 15,363 crores in the first half. PBT for the first half, it grew by 26%, INR 1,680 crores as against INR 1,334 crores. Profit after tax grew by 23%, 1,240 crores as against 1,404 crores during the first half of last year. I'm very happy to say about TVS Credit. We have added over 2 million new customers in H1. Cumulatively, TVS Credit has served over 16.5 million customers till date. The book size is 26,652, grown by 13% over last year's quarter two. The company continues to maintain a strong growth momentum in disbursement, primarily driven by the increase in distribution reach, supported by growth in consumption and increased penetration. As part of its ongoing risk management and portfolio optimization, the company has taken proactive steps for further strengthen credit norms, ensuring sustained portfolio health amidst evolving market conditions. For this quarter, the PBT grew by 20% at INR 222 crores as against last year, INR 118 crores during Q2 of last year. If you recollect, Q1 this year was INR 187 crores. Apart from serving two-wheeler customers, TVS Credit is one of the leading consumer durables. We are also servicing consumer durable mobile phone financiers. It has a fast growing footprint in used car loans, tractor loans, used commercial vehicle loans. Unsecured loans powered by all the new age technologies and data analytics. So overall, it is a very good portfolio mix we have. On new product launches, I am extremely happy. All of you know that the all-new TVS Jupiter 110, with an unparalleled design, performance, comfort, and convenience, we have launched just before the season, doing extremely well. And all new Jupiter, TVS Jupiter 110 exemplifies the essence of Zyada: more style, more mileage, more performance, more comfort, more convenience, more safety and technology, okay? It has come with a reimagined design, exemplified by its Infinity Light Bar, premium piano black contrast panels and modern profile. And it comes with an iGO Assist, offering torque on demand and improved fuel efficiency. It comes with many first-in-segment features that elevate the experience. Dual helmets under the seat storage, front fuel filling, spacious floor board and better space, superior braking with Roto Petal, disc brake, turn signal lamp, emergency brake warning, hazard lamp, and I can keep on highlighting, you know, many, many features. Okay, it is receiving very good response from the market. It is available across India and from day one. The all-new TVS Apache RTR 310, the flagship offering for in the super premium sports motorcycle category. Two variants, one is you know, build to order, customized option. Okay, we have very good response, and this has got impressive combination of the aerodynamic design, performance and agility. We also added a new variant in TVS NTORQ 125 lineup. Widened its base with a suite of vibrant, striking color option. I think I'm very sure you would have seen the new blue, the new gray, okay? And I'm sure that is also attracting many new customers during the season. The NTORQ Race XT has launched a matte black special edition that combines multiple textures on black, ranging from matte and glossy piano black. As I told you, I think we always believe in giving best to the industry, best to the customers. Now, when we look at Q3, I think during season, so far, we have seen an overall growth of 4% in the industry. During Navratri, you know, it was around, industry grew by 11%, and TVS has grown significantly better during the season. Now, we are all looking forward to the next one week, including Dussehra, okay? And we are very positive about the festival for TVS. The ongoing festival season, we have started with a positive note, and we are pretty confident that we will grow much ahead of the industry. And, you know, I always believe that this year we started off well. Q2, there was little bit of slowdown expected. Q3, I'm expecting, you know, the industry should be doing well. There are some challenges we see, but I'm pretty confident that the good monsoon, good reservoirs, I think that is likely to support the industry, okay? We can expect a good momentum to continue for TVS. On EV, I would like to sincerely thank the government for the PM E- DRIVE scheme. They have given a very clear eight-quarter plan that is going to help the industry, and it provides seamless transition from earlier FAME II scheme. They have very clearly demonstrated that it intends to provide a long-term support for EV program, and this visibility of two years is going to help everyone. EV will slowly and steadily grow. If you look at the penetration, it's slowly going up. Now, it is already around 7% in Q2. So overall, the penetration of, you know, EV iQube has established very strong brand in the EV segment with its technology and the features and best-in-class quality. During the first half, company introduced new variants to the iQube portfolio for making the electric mobility accessible to everyone. We have now three battery options, depending upon the customer usage and the range. One is 2.2 KW, then 3.4 KW, and 5.1 KW, okay? The entire portfolio is getting a good response. Our sales during the second quarter grew by 31%. We did 75,000, which was the highest number, and we are very confident that we will grow better than the industry going forward. As you are aware, we are well planned for the product lineup for electric mobility. You will be witnessing some more launches during this financial year. We are exploring, we are exporting TVS iQube to few ASEAN and Asia countries. As you know, it will take time to establish because we have to start and the market has to be ready. We strongly believe that India will emerge as a major export hub for EV two-wheelers, and TVS will play a very, very important role. On the continuous improvement in the EV supply chain and infrastructure, we are confident that we will continue to be a strong player in the EV segment. Like I promised, you will see our EV three-wheeler soon in the market. On international market, we are witnessing improvement in retail higher than the industry for TVS. Challenges in Red Sea have continued in the current quarter. The transit times have increased, but the timely availability which got affected, we have taken counter measures, which is also helping us. The African markets are still facing some challenges. However, given the base effect, what we are seeing quarter on quarter, we are seeing growth. We are performing better than the industry, and we are pretty confident that we will be able to do much better going forward. Our HLX 125 5-gear is doing very well in the market. This product offers much better features, and they are powerful, yet efficient. Received very positive response across the markets wherever we have launched. LATAM, we have started doing well, and this is also a market which is growing. Okay, we have taken many actions on network expansion, brand building activities, and we are able to gain volumes much faster than the industry. Okay? We are very small in LATAM, but we are very confident that we will have great opportunity in LATAM going forward. In Asia, the markets are doing well. You know, Nepal and Sri Lanka started well. Of course, all of us know that there are some challenges in Bangladesh, but we are confident that over a period of time, that market also will start coming back. Middle East is another area. We are confident that that also will do well. There are some challenges on local currency depreciation, increase in interest rate, which is also affecting some challenges on the industry. We have taken enough actions to improve our retail, and we are pretty confident that this is also one market where we can have great opportunity. Now, we have continuously improved on EBITDA quarter after quarter sequentially. Very, very happy that the portfolio, the customer delight, and the timely new product launches are helping us in a big way. We are growing ahead of the industry. We are confident that the company will continue to deliver this growth, better product mix and sustain the focus on quality, the cost reduction initiative. Definitely, we are confident that we will improve profitability going forward. Please remember, we are investing for future. We are investing behind electric, we are investing behind software, investing behind digital. That is also one of the reasons why our employee cost is higher, but these are all for future. We are investing in new products. That is also a reason our depreciation is much higher than the industry, because we are very, very while we are managing the quarter, most important is investing for future, in product development, in technology, and having capable people for future. On Q2, we are extremely happy. Okay, we are, we were able to deliver the best in turnover, best-in-class EBITDA and PBT. We have best-in-class products. We are unwavering focused on our consumer, along with our strong portfolio of brands like Apache, Jupiter, Jupiter 125, iQube, Raider, NTORQ, Star City+, XL100, Radeon, TVS King and TVS Ronin. We will grow ahead of the industry, and we are happy that in the last five years, company have moved significantly on EBITDA. We are at 11.7. I am pretty confident that we will continue to improve our EBITDA gain. Thank you. Thank you very much, and once again, keep them safely. Hello? Yes, sir. Should we begin the question- and- answer session? Please, 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead. Hi, good evening, and thank you for taking my questions. Congratulations on the favorable response to the Jupiter 110 cc. First question is just product related. I think while Jupiter and NTORQ have had a good start to the festive season and good volumes for previous quarter, obvious that Raider 125 in the sports category seems to be moderating a little bit. So just want to understand, is there any production related issue there, or are we considering sort of repositioning the product in light of recent competitive events? Raider is a great brand. I don't see any challenges in Raider. We are pretty confident of the portfolio on Raider, and this is a brand which will do extremely well going forward. We are pretty confident on that. Got it. That's helpful. Second question is on just festive season comments you made earlier in the prepared remarks. I think you mentioned that so far, industry festive volume growth on your estimates is 11%. But you also mentioned sort of 3Q volume growth at, I think it was 4%. I just want to understand where there is a contrast between those two numbers. Hello. During the first nine days, we have seen a good growth. But after nine days or a few days now, okay, there is a bit of, you know, slowdown. Around 4% is the industry growth. So I'm pretty confident that next one week, things will be improving. We have Dussehra. We are all looking forward to that. Okay, so I'm pretty confident. But what is most important, that TVS is doing extremely well, much, much better than the industry. Thanks to our portfolio and thanks to all the customers who are supporting us. ... Got it. That's helpful. Just lastly, clarification on the export and the spares revenue for the quarter, please. Spares, let me just look at it. Spares is about INR 930 crore. Exports revenue, just a minute. You're asking revenue, right? Export? That's right. That's right. 2,229. For Q2. Got it. Thank you very much, and all the best. Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead. Yeah, thanks a lot for the opportunity. So first, just wanted some more detail on the investments you're doing on the employee side, because the reason why I ask that is, like, your employee cost is a good 25%-26% higher than Bajaj and, and just around 10%-15% lower than Hero. And, and then given the size of the company in terms of market share and revenue, it's, it's, it's a significant investment what you're doing in the future. So if and you alluded to that in terms of software, EV, other technologies. So if you can just help us understand how much of the current employee bill, I'm not asking, is roughly targeting towards these advanced investments, and, and what's the kind of IP, what we've built in, within the organization? So because the choice is either to do it yourself or outsource it, clearly your intention seems to be doing everything in-house in terms of a lot of technology. You can just help us understand because all this will kind of play out in the future in terms of benefits, right? If you can just help us understand how much is the steady state ongoing legacy business expenses or and what kind of investments which is going on the employee side? First of all, Bajaj and Hero, they are all role model companies, and I respect them as great competition, okay? I don't want to compare with competition. As a TVS Motor, we have a strategy that we want to design, develop, and then invest many of the technologies in-house. We have, last time, last quarter also, I highlighted that we have almost 250 software people and about 250 digital. These are all assets where we have added to really, really look for the future. Because, you know, future is going to be electric, future is going to be many new technologies which are likely to come, okay? So we have to invest, we have to build that capability, and we have invested in that. And we will continue to invest in areas where, you know, future customers are going to look at us, because we are completely, completely focused on how the transition is going to happen in the industry. So any quantification as to how much of the wage bill is towards the advanced investments or towards software? Because these are all investments. When you look at the investment, I am very, very confident that this will pay back. It will definitely pay back. Getting good quality resource is most important for us at this point of time, okay? And five hundred people, we have added. I gave you the quantification. Yeah, yeah. And so with the kind of investments which you are making, which are way out of the industry, so are you still confident on maintaining the margin momentum going forward? You have seen, you have seen last several quarters, we have been meeting the margin expectation, okay? And, see, it is, it is what... See, our strategy continues. We want to give best to the customer. Mm-hmm. We want to focus on customer delight. You see the current Jupiter 110? You see the future. We will continue to delight the customer. That is strategy one. We want to grow the top line ahead of the industry, okay? And, we will sincerely work on how do we improve the margin. Customer, volume, product mix, growth, cost reduction, I think these are all consistently we will look at and we will work on. No, great to hear that. So on Jupiter, I believe it's a very big hit. Currently, probably the only two-wheeler model which is waitlisted in the market. So what is the plan there to up the capacity, sir? Because I know we kind of take our own time to increase ramp-up of capacities, look at demand out there as well. But this clearly seems to be a standout product in terms of what it's doing in the marketplace, and what are you hearing from TVS and even the competition dealers. So what is the plan there on capacity? Where are we today on hundred and ten capacity, and where you expect it to be ramped up in the near to medium term? Capacity is not a problem. I think what is most important is, we are delighted that we are not able to fulfill the total demand in the market, but we are very happy that customers like it, customers, they are, they are wanting it, and Jupiter is a great brand. You know, Jupiter, you know, you have one ten, you have one twenty-five. It's a great brand, and we are very, very happy, you know? We are able to delight the customer and build this brand. Extremely happy. Fair enough. Sir, the final question is on the subsidiary performance of TVS Credit and to you as well. If you can just share on TVS Credit, is there anything which you received from RBI in terms of inquiry on the interest rates what you're charging? Because there have been some such moves on with other NBFCs, and there's a concern on whether interest rates will get capped. Anything, if you can share there. And also in terms of the breakup of the book as to how much of the book is currently what is the auto loan, two-wheeler auto, three-wheeler products, and what is the broader detailed classification or breakup of the loan book? And any numbers on ROE, ROA, if you can share that. And finally, update on the European subsidies. How's the cost control there going, and what's the kind of reduction in losses what we are seeing there, and any investments which are expected, which are not already kind of budgeted for, if you can share that color, sir. Thank you. Let Desikan again give you a color on previous credit. It has done extremely well, and the way the portfolio has been growing and how, you know, each segment has been growing, amazing journey. ... Yeah. So far as TVS Credit is concerned, I explained earlier, there is a 13% year-on-year growth, and we are at INR 26,600 crores is the book size now. The net worth of the company as of thirtieth September is INR 4,487 crores, and the capital adequacy ratio is around 19.1%, much higher than the statutory required percentage. And the cost of funds is also at a very competitive level, at 8.02%. The PBT for the quarter is 216 as against the comparable 180 crores. As far as two-wheeler related concentration is around 27% of the overall 27% to 28%. But it is steadily coming down, which means. Yeah. used car, tractors, CD, consumer durables, MSME, many other areas where we are investing, that is growing much faster. Yeah, we have a very diversified portfolio now. And second, even the credit appraisal interventions are there, so we are extremely careful in... Otherwise, we would have grown much ahead also. 26,000, we would have crossed 27,000 crores also. The credit interventions and credit appraisals we have tightened so that disbursals also less to that extent. TVS is doing very well, and TVS Credit Services. And also, Europe- Yeah, we are not. Yeah. You had a question on Norton. Please understand, again, last time I told you that we are investing behind a portfolio of product complete design development, and that is happening. That's why I said it will take another six quarters for the product to be available in the market, okay? These are going to be brilliant products, and you will see products from 2026 to 2026, okay? Which in our financial year 2025-2026. For Norton, it is 2026, okay? What is most important is this is a great brand, and this is super premium. This is going to definitely help us a new segment, new developed countries as our market. Definitely we'll be also looking at India. I did give you the kind of briefing last time. Mm. We'll continue to invest for the product development at this point of time. Fair enough, sir. And finally, EV revenue, have you shared it, so in the opening remarks, if I missed it? Which one? EV revenues. Revenues from EV during the quarter. I said EV overall number is about 75,000. The revenue numbers, sir, is it handy? We need to check and come back. I can check and come back. I'll check. Yeah, fair enough, sir. Thanks a lot. Understand that, sir. Thank you. Thank you. Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah. Hi, sir. Couple of questions from my side. One is, you referred to, you are seeing some challenges in the domestic market. Can you elaborate on that? What are the challenges visible on the ground currently, in two-wheeler business? Challenges? I can't say challenges. I think there are great opportunities in the, in the two-wheeler market. Like I told you last time, this is the first time we are seeing, good response from the rural market, okay? Maybe quarter two we saw a little bit slow overall industry, but, during Navratri we have seen pick up, okay? I am expecting a good Dhanteras spirit, okay? The rain is going to be good this year. Monsoon is going to be good this year, so, the reservoirs are going to be having... So I'm of the view that after a long time, we are going to see rural growing. Urban is also growing, okay? You know, a good growth rate we can always expect, you know, about 6%, 7% to 8% kind of a growth rate you can expect in the industry. You know, TVS has got very, very strong brands, and we will outperform the industry. Okay. 7%-8% is for fiscal 2025 or for the current season? No, no, I don't want to give 50%. We are working for- Okay. - quarter wide. 7-8% in third quarter. That is the way we have to look at it. I think industry will definitely do well, okay? 7%-8% is a good growth rate. Yeah, it's very good growth rate. It's for the third quarter? Yeah. Got it. Secondly, we have seen drop in our realization on a sequential basis. Is there any one-off you call out for that drop? I told you, we introduced a single pack on EV, okay? The iQube, what was launched in the market with a lesser price. It is only single pack, so correspondingly we also adjusted our price, okay? Okay. So there were a lot of competitive intensity in the market. Because of that, there is slight reduction in the realization, but I'm not so much worried about the realization because- Sure, sure. We will do well. Overall, you know, we have to look at are we growing ahead of the industry, and we are doing ahead of the industry, and we have a very good product range, and please look at our contribution also. We have been growing steadily. Yeah, undoubtedly, undoubtedly. And staff cost increased on QoQ. You mentioned about software charges, investment for the future technology. But is there any stock-related provision in this quarter, or that will come in future quarters? There is a provision about INR 11- INR 12 crores towards that, ESOPs. Oh, okay. Got it. And lastly, with respect to the e-bike business in Europe, so some of your peers have indicated severe stress in the e-bike business, and they have undertaken impairment. How is our e-bike business doing, and do we need to take any impairment there? ... I'm not able to hear. A little bit louder your voice. Can you repeat? Sorry, the electric cycle business in Europe, some of your peers have indicated severe stress in European business for e-cycles, and they have taken impairment for e-cycle business in 2Q. So are we seeing similar stress on the ground? How is our e-cycle business doing? Do we need to take any impairment there? You're asking about e-bike business? Yes, yes. E-cycle business, first I want to say that all of us know that Europe is going through some stressful conditions in the economy, okay? So when the economy goes through some difficult conditions, we have to be a little bit patient. I am very confident that this is a big opportunity in e-bikes, and we are looking at how do we cut down the cost, how do we make sure that the customer gets the best product. So there is no need for any impairment-related provisions. We are very confident about that business and the future. Also, in this period, we have used the opportunity to reduce our inventories. We have generated cash out of the working capital during this period, and therefore, we do not foresee a need for any impairment-related provisions. Fair point. Fair point. And lastly, working capital in first half was about INR 838 crores. For the full year, we still maintain INR 1000-INR 1100 crore of CapEx? So CapEx, we gave you the last time, the numbers are- INR 1,000- INR 1,100 crores is what you had indicated, but first half is already- INR 2,200- INR 2,400, that is the range we gave last time. Okay. Okay. That's where we are. Got it. Got it. Got it. So great. Thanks, and all the best. Thank you. Thank you. Thank you. The next question is from the line of Sahil. Please go ahead. Hello, am I audible? Yes. I think you have to be a little bit louder. Yeah, please proceed. Yes. Yeah. Hello. Thanks. Thanks for the opportunity. Congratulations on the success of Jupiter. Sir, I have two questions. First, on exports, sir. Like, what we have seen probably Jupiter volumes in the last quarter, sir, exports have dropped significantly. Is it because we are seeing very good demand on the domestic market, and we are facing capacity constraints, that's why we have reduced the demand... reduced the supply on the exports market, or is it some country-specific challenge where we are facing some constraints? See, there are no issues on the retail to the customer, okay? These are things we keep looking at, you know. We are one company who looks at only the end customer retail. To me, billing is only a checking point, okay? So if the customer retail happens, automatically it will happen, and depending upon sometimes season, you have to give little bit more. You know, there are some official days. So I think the operational team, along with the sales team, they take the decision. Okay. And sir, like this LATAM and LATAM market, where we are targeting higher exports, which can be higher growth segment for us. Sir, there, basically, what are products will we be exporting? Will it be ASP accretive in terms of our overall exports mix? Overall exports mix, all the products from India, and we are also delivering some other products from Indonesia. Okay. And sir, one question in margin, like, one of our competitor has called commodity inflation of fifty basis points on a quarterly basis in Concall. Did we see any commodity headwind, and, like, our gross margins have still only declined by ten basis points, even though RM cost share has mixed and there has been commodity headwinds. So have you taken any price hike, or is it more of value engineering and mix? No, no. I think point one, point two are, in my opinion, nothing to be worried about here. It could happen both ways, okay? There are no significant, you know, challenges we have seen, okay? And quarter to quarter, we have only done well. And last year to this year, you look at our material costs, you know, we have significantly improved on turnover, almost 2.6%. Last year was 74%; this year is 71.4%, okay? And if you look at Q1 to Q2, you know, again, there are no major surprises, okay? Point one here and there will be there, but that is not a big issue. Got it. And sir, just one last question on TVS X, sir. When can we expect volumes from TVS X? TVS X, we have started, okay? But as you know, it is a very super premium product, okay? You will see, over the next quarters, you will see much higher volumes. You will see pan-India. Okay. Thank you so much, sir. I appreciate it. Thank you. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead. Yes. Hi, sir. Thanks for the opportunity. So my first question is on the recent refreshes that you have done on the Jupiter and the Radeon and the Raider. And like you mentioned, you are giving more value to the customer. You know, with extra features, it looks like that in some variants, the prices are similar or maybe, you know, maybe even slightly lower. So my question was that, are you seeing some, you know, restraint from the customer in terms of the price points? And the related question is that, are you seeing any price competition in the market from other players in terms of headline discounts during this festive period? ...Are you happy on the gross margin improvement of the company? Sir, I'm very happy, but I'm just asking as to, you know, whether the- Because what we have to look at is, on a portfolio basis, we should not look at. You look at totality, okay? All businesses together, are you growing your contribution quarter after quarter? Mm. Okay. It's a combination of country, product, brand, pricing. Okay? We want to give good value to the customer, good features to the customer at an appropriate price. We don't discount. Definitely, we don't discount. Okay. Okay? And we want to grow, like I said, first is customer, customer, customer. Second is grow ahead of the industry. Yeah. Okay? Equally, now we have started quarter after quarter, looking at and improving the contribution and profitability- Right ... without compromising on investment for future- Yeah. Whether it is people, whether it is product, whether it's technology, whether it is... We don't compromise at all. Yeah. Because future is very, very important. While we are looking at this quarter, I think we work for the future. Yes. Yes. Fair enough, sir. And sir, speaking of margins, I just wanted to get a sense as to, like, is there a timeline by when you think that you want to, you know, start, you know, recognizing the PLI? I mean, is there a certain milestone that you're looking for, and the reason, any reason why you're not started to take it yet? See, we are working on a very clear revenue recognition policy for PLI. Based on that policy, the revenue will be recognized going forward in the most prudent and in the most compliant manner. You will expect a clear recognition of this going forward. For benefit of clarification, all our products are certified, and we are meeting the eligibility criteria. Okay? Yeah. And, sir, lastly, on the EV side, just, you know, in terms of directionally, could you give some color on how are the gross margins or EBITDA margins or any, you know, period by which you expect EBITDA breakeven? Or how are the trends moving in terms of profitability, if you can give some color? We are positive on contribution. We are extremely happy the customers are supporting us. We have a range of products in iQube. We are also coming up with new models for looking at various customer segments. Again, customers grow the top line, we are pretty confident that the bottom line will come. Whatever investments we are making, like I said last time, whether it is in software, whether it's in technology, whether it is EV technology, you know, all these are going to help not only EV portfolio, the entire portfolio of the company. Okay? So this is an investment for the future, and EV will grow. I may not be able to put a number, okay, but my, my hypothesis or our hypothesis is very simple: You invest today so that you can get the benefit. This is exactly what we have done in TVS Credit, exactly what we have done in Indonesia. Today, it is doing extremely well. Same way, EV will do extremely well. We don't look at when it is going to happen, but we are happy it is moving in the right direction. That's, that's good to know, sir. Thanks a lot, and all the best. Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead. Yeah, hi. Hi, thanks for taking my questions. Just quickly, you know, before I get to questions, I just wanted to recheck the numbers. The 4% growth that you mentioned earlier is for the industry since the beginning of the festive period, right? Is that understanding correct? Yeah, yeah. Festive period last year to this year, but during the Navratri nine days, industry grew by almost 10%-11%. Okay, got it. And 7%-8% guide that you're giving is for the third quarter? Yeah, that is industry, our expectation, and we will do much, much better than the industry. Okay, got it. Okay, just now, moving to the questions on the EV business, could you just talk, you know, give us a little bit more insight into how should we think about capacity ramp-up? Because clearly, you know, there's a lot of effort you're putting to, you know, put iQube to more dealerships. If you can give us a little bit update on capacity and how much touchpoints, you know, or dealerships you've covered in, you know, markets we've covered. And in continuation also, sir, if I remember, you've taken that call, you don't want to aggressively, you know, discount or participate in price discounting, but we have tactically started to do that in recent, you know, weeks. So I'm just trying to understand, you know, is there any change in the strategy around the EV business? Are we okay to now compete from a pricing perspective also? So just more on the how we are thinking about the business. See, TVS iQube is a great product, and the customers are happy. We are very systematically building the capacity. On manufacturing, we have enough capacity, okay? And even whenever we want to increase the capacity, it's a question of about three months, okay? Three months, ninety days is not a big period. Okay. On dealer network, we have now about 750. We are also now increasing that very systematically month after month, okay, on number of dealerships in India. We have started small exports because you have to see it in many markets. It will, it may take little time, but we are happy we have started exporting that to ASEAN markets, some of the Asia markets, and I'm pretty confident that the initial feedbacks are positive, but the numbers are very small. Okay? And, like I said, you know, we understood customer segments are there. That's why we gave a single battery pack with, you know, 2.2, you know, so that at a special pricing point. We always believe in, you know, not playing the discount game, but giving the value game to the customer, and that strategy will always remain for TVS. Okay. Got it. And, maybe just very quickly on this, you said the dealership of 750, this is - are we doing entirely exclusive or we are now, you know, No, no. From day one, we are giving it to our highest dealerships only. Okay. Okay, got it. And, the other question around EVs was on the affordable EV launch that we've been talking about. Are we looking to do that in fiscal twenty-five? Any timelines around that? I never said affordable EV launch, okay? I said there is a new product which is going to come to a customer segment. Okay, just to clarify. Okay. That will come, that will come in this financial year. Okay, got it. Just a second question on the export market. Now, clearly there's been good pickup we've started to see in export front. If you can just give us a little bit color on how our geographic mix is, you know, how much comes from Africa, LATAM, you know, just the geo mix, some color. I think Africa is the biggest market for us. Next is, now we have started, of course, Middle East is there, Asia is there, some markets in ASEAN is there, but Africa is the biggest market for us. And Africa, according to me, you know, the bottom we have seen, now it is all about, you know, how it is likely to grow only because it has gone through a lot of challenges in terms of- Mm. currency depreciation, availability, you know, inflation. Okay, so we are of the view that you will see improvements, because these are all big taxi markets and, you know, people's lives depend upon these taxis. So there will be an upward trend. Of course, the prices, because of the currency depreciation and customer prices have gone up for the industry. Okay, that is also one of the reasons, you know, the industry is bit low. But the worst is over, okay? And our brands, XL100 series, 100, 125, 150, has got very good pull in the market. LATAM, we are seeing a good opportunity. Our portfolio is very small in LATAM, but we can build it very well. You know, huge markets, good opportunity for TVS, and we are leveraging products from India as well as from Indonesia. Okay. So it's fair to assume Africa is 60%-70% or even more of your entire make volume mix? Tell me? Will Africa be more than 60%-70% of the volume segment? Africa, Africa is about, I think, first half, it's about, 65%-67%. Okay, got it. And lastly, sir, any comments on CNG portfolio? Is that something that we are now thinking to introduce to the market? And if we were, you know, how, what kind of timelines we are looking at? We are, we have a very strong R&D. Last time also I told you, okay, we are looking at the customer, how customers are looking at it. Already in three-wheeler we have CNG. Mm-hmm. It's accepted very well. So we are very closely looking at how the customers are looking at the CNG. Okay? We can always come back with the product into the market. Okay? That is the, that is the point I would like to highlight on CNG. Okay. Got it. Thank you so much. Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead. Yeah. Thank you, sir, for the opportunity, and happy festive season. So you mentioned about the rural doing well, sir. Can you indicate how it's been the rural market growth and how has been urban market growth this last few months, sir? See, H1. Just a minute. H1, if you look at the overall, I'm saying, looking at the rural, urban, I think overall growth in H1 was. Just a minute. Let me. Rural H1 growth volume was about 8%, and rural was slightly higher, 9%. Urban was about 7%. So this definitely tells us after a long time, 1% here and there may not be so big, but first time we are seeing rural also catching up. Okay? That's why it is very critical that monsoon, reservoir, agriculture and, you know, we have to see rural slowly picking up. It will be a good news for two-wheeler industry, okay? And, of course, Q2, we saw a little bit slowing down, which was expected. Navratri again, we are seeing 10%. We have to look at next week, which is very, very important, how it is going to pan out. I'm of the view that a reasonably good growth we can expect in Q3, okay? I'm hoping that rural will try to be in line with urban this year. Got it, sir. Sir, coming to exports, three-wheeler, sir, that has not yet seen a recovery like two-wheeler we have seen the recovery. Any reason for the slowness in the export three-wheeler market? I think we are extremely good in Africa. Africa is going through some tough times, and as you know, we are not losing on the retail, but we have controlled our dispatches. Because the last thing we will do is the same principle of one month stock, okay? When we look at international, we look at one month plus the transit time. Okay? And in domestic, we always look at one month stock. Maybe season time, three, four days extra here and there, depending upon because last thing we want is to lose retail, like Dussehra or on Navratri. So that we calibrate and we look at it that way. But do you see the recovery happening sequentially in the next three months? It will happen, it will happen. Going forward, it will happen. Q3, Q4, you will see that change. Got it, sir. Just lastly, on this PLI, just so I understand, by when, you'll be starting booking this increase of sales? Already I answered you earlier, someone asked the same question. Okay, we are developing the policy, and we will come back to you soon. Sure, sir. Thank you for this opportunity, sir. Thank you. There was a question from someone about the EV- Yes EV turnover. For the first half, it's about INR 1,600 crores. Hello? Yes, sir. INR 1,600 crores. It was an earlier question. There was an earlier question. At that time, I gave the number, INR 1,600 crores for the first half. Okay, sir. Okay. We'll move on to the next question. It's from the line of Viraj from SiMPL. Please go ahead. Yeah, I have one question. Pardon? Yeah. Hello? Yeah, please, please. Yeah. On the TVS Credit Services, you know, if you look at these segmental financials, you know, we've seen a reported PBT de-growth, while in our commentary, we talked about a PBT growth of, I think, close to 15%-18%. So just trying to understand, where is the disconnect? So where is the PBT de-growth there? Last year we grew INR 180 crores, and we are at INR 215 crores. We have grown. So if you look at the consolidated segmental numbers, you know, we reported around INR 209 crores of segmental EBIT as against INR 218 crores. For TVS Credit Services, standalone also, we reported that it is 216 as against last year's 180. Okay, Okay, I will take this offline, if that's okay with you. Yes, sir. No problem. And in terms of the EV product portfolio, and the PLI. So PLI, the cumulative amount, if you can just give some color, what kind of cumulative amount we'll be looking at, once we have a policy in place? And second question is on the EV, you know, you were looking at a very aggressive launch pipeline. So I think couple of quarters back, we were looking in next four to six quarters at that point in time, to have a very aggressive launch pipeline. But somehow, you know, we're not seeing much launches from our side. We're just trying to understand, you know, what is the thought process behind the launch? So we time the launches also, okay? We want to make sure that we overall grow ahead of the industry, okay? This is a very measured call. On one side, we keep developing the products, and we decide, you know, when to launch the product. Okay. And last question is on the investment and CapEx, if you can just give us the portfolio and FY 2026. CapEx, the same, well, INR 1,200 crores to INR 1,400 crores for the year. Investment, just a minute. Just a minute. I think investments, again, around INR 1,500 crores is what we said last time. Okay, great. Thank you very much. Can we have the last question, please? Yes, sir. It's from the line of Neil from ValueQuest. Please go ahead. Yeah, my questions have been answered. Thank you. Okay. So thank you, everyone. And, you know, it has been a great quarter two, and I'm pretty confident about the season, which is going to be in the next ten days. And we are also confident about the Q3. Overall, you know, with best customer satisfaction and quality, and the new products, whatever we have launched, Jupiter 110, and many more products to come in this financial year. I'm pretty confident that with the brands like Apache, Jupiter, Jupiter 125, iQube, Raider, NTORQ, XL, and TVS King, and TVS Ronin and Radeon, we are pretty confident that the range is helping us, and the customers are helping us to grow faster than the industry. Industry will be good in Q3, okay? Rural, first time we are seeing during the first half coming better growth than what we have seen in the past, and what is delighting us is, while we are investing for future in employees and in investments in products and technology, we are able to consistently improve our EBITDA. Over the last five years, we have seen significant improvement, and quarter on quarter, in the last six quarters, we have now come to 11.7, and we are confident that we will continue to leverage this growth, better product mix, sustain cost reduction initiatives to improve profitability going forward. Happy Diwali to all of you, all your family members, and let us bring lot of prosperity to society in India. May God bless. Thank you. On behalf of B&K Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.