Ladies and gentlemen, good day, and welcome to the Ashok Leyland Q4 FY24 earnings conference call, hosted by Axis Capital 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. Nishit Jalan. Sorry, Mr. Nishit Jalan from Axis Capital Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everyone. Welcome to Q4 FY24 post-results conference call of Ashok Leyland. From the management team, we have with us, Mr. Dheeraj Hinduja, Executive Chairman, Mr. Shenu Agarwal, Managing Director and Chief Executive Officer, Mr. Gopal Mahadevan, Director and CFO, and Mr. Balaji K M, Deputy CFO. I'll now hand over the call to Mr. Hinduja for his opening remarks and, and post which maybe we can start with the Q&A. Over to you, Mr. Hinduja. Thank you. Good afternoon, ladies and gentlemen. Before I start on the results, earlier today, we announced the appointment of Mr. K M Balaji as Chief Financial Officer. Mr. Gopal Mahadevan, currently CFO and full-time Director, will continue to be associated with Ashok Leyland as Director, Strategic Finance and M&A. Mr. Balaji, currently Deputy CFO, will take over the role of Chief Financial Officer with effect from 1st June 2024. Mr. Gopal Mahadevan, as Director, Strategic Finance and M&A will continue to serve on the Board of Directors of Ashok Leyland and its subsidiaries. In his new role, Gopal shall focus on the growth agenda of Ashok Leyland subsidiary companies, as well as M&A strategies for Ashok Leyland. The team will be further strengthened with both of these gentlemen. Coming to the result. FY24 has been a record year for Ashok Leyland, whether it is revenue or EBITDA margins or profit. We have achieved all-time high numbers in FY24. Coming in a year when we are celebrating our 75th year of existence makes this even more special. While revenue grew by 6% over last year, our EBITDA has grown by 57% to reach INR 4,607 crore. Our PAT for FY24 at INR 2,618 crore is also the ever higher. Our EBITDA margin touched 12% in FY24 from 8.1% in the previous year, reflecting our continued focus on better price realization, efficiency in sourcing and business operations along with a better revenue mix. The softening of commodity prices has also helped. I would like to specifically mention that FY24 has also been a year of record cost savings for us. Our material cost as a percentage of revenue is lower by 4.4% over FY23. Another factor that supported profitability was impressive growth in our high-margin business, covering spare parts, defense, and power solutions. FY24 performance gives us even more strength to move forward towards our midterm objective of achieving mid-teen EBITDA. Market has also shown confidence in the company's ability to grow in the future, as our stock price recently touched its peak. Since April 1, 2023, this is about 50% appreciation in the company's market cap. Our net debt at the end of FY24 is close to zero. This is after INR 1,500 crore investment in Optare Switch and OHM during the year. I'm also happy to state that Ashok Leyland is now back to number one position in MHCV buses, with a very impressive market share gain in FY24. While we had a few challenges initially, our market share growth of Q4 and of April reflects a positive momentum in the MHCV trucks as well. Going forward, we are confident of increasing our market share in both the trucks and bus segments. Our medium-term goal of achieving 35% market share in MHCV segment remains intact. In the 2-3.5 ton SCV segment, we are now number two with a market share of more than 20%. We have planned for six new product launches in this segment in FY25, which should give us a further boost to our market share. Currently, we address about half of the LCV market in India. We are looking to expand our LCV product portfolio to cover at least 70%-80% of the market in the next few years. LCV presents a huge potential for us to grow our CV volumes in future. Our market share in CV exports out of India has improved significantly in the last two years. Despite subdued market conditions in SAARC and in some parts of Africa, Ashok Leyland registered growth in export volumes. This reflects that our strategy of local market presence, focused product development for IO markets, and our strong distribution relationships in key markets is working well for us. As some of these markets start turning, we see good volume expansion in our IO business. Our focus on profitability remains. We are clear that we are not going to discount our products to win market share. We are confident that our market share wins will come on the back of our product superiority and our expanding reach. Our product portfolio is very robust, and our future pipeline is strong. Ashok Leyland's products are known for their reliability, fuel economy and application suitability. Actions are in place to further widen the differentiation on these aspects. We are proud of delivering our first ever battery electric BOSS ICV in the last quarter. Our 55 ton electric tractor trailer is also ready, and first units shall be delivered within the next few months. We already have customer pilots going on for H2-ICE truck. We are ready to deliver to NTPC our first set of fuel cell buses. Our first LNG trucks were delivered earlier to MGL. We are proud that we have now a complete portfolio of alternate fuel vehicles in the market. Switch and OHM are progressing well. We have just started delivering our first eLCVs in the market. In the next few months, we shall launch our second offering in the eLCV space as well. Both these vehicles will be segment first and have the potential to transform the last mile mobility in the country. We are preparing to make supplies of 950 electric buses to Delhi and 320 buses to Bangalore. The development of our E1 electric bus for Europe and Middle East is in advanced stages. OHM, our E-MaaS subsidiary, has now been fully activated. It is now managing electric bus operations in Bangalore, Ahmedabad, Bihar and Chandigarh. Ashok Leyland's balance sheet is strong enough to support fund requirements of both Switch and OHM. At the beginning of the year, there was widespread anxiety that CV numbers in Q1 and Q2 might degrow because of elections and other factors. April numbers has proven this wrong. In April, MHCV industry grew by 10%. Our addressable LCV industry also showed positive growth. The pulse on the ground is very positive. Most macroeconomic parameters are favorable. There is a prediction of a good monsoon. A stable government post the elections will see a flurry of robust economic measures. The country is poised to grow at a faster pace in the foreseeable future. All this augurs well for the future of the CV industry. We wish to remain optimistic for the CV industry for both H1 and FY25. I now hand it over to the moderator for any questions that you may have. Thank you. Thank you very much, sir. 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. Thank you. 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. Firstly, best wishes, both Gopal and Balaji, on your new roles. My first question is just on the outlook and the comments Mr. Hinduja had given on FY25. So, I think previously, over the past, you know, three to four election cycles before COVID, we have seen a pickup in M&HCV demand in the year following elections. And then last year also, I think you had given us a little bit of color on, you know, the sort of outlook you have for the MHCV and the LCV segments. So just wanted to dig a little deeper on that to see how you're thinking about both M&HCV and LCV growth opportunity ahead in FY25. Okay, thanks, Chandramouli, for the question. You know, before I speak on FY25 industry, let me just give a perspective on FY24, especially on the M&HCV side. You know, overall, M&HCV side industry, of course, had a single-digit growth, about 3%-4%, for the year. But I think we should look at it in a different way. We should, you know, divide FY24 in two parts, first part being the first seven or eight months, and the second part is the last three to four months. If you look at the first seven to eight months, the industry was growing at a pace of 8%-9%, you know, and, of course, in the second part, which is last three to four months, industry did degrew, but there was a specific reason for that. The reason was a very high base number that the industry was operating at in the last quarter. And that was because of the OBD-II norms that had forced some pre-buy. You know, so we have to just keep in perspective that if we exclude that period of high base numbers, because of which the industry degrew, you know, industry has been growing before that by 8-9%. And then in April, again, the industry has grown by about 10%, right? So to that extent, you know, there is nothing fundamentally wrong in the industry, and I say that also because we find a lot of positive momentum on the ground. You know, the pulse on the ground is very, very strong. All macroeconomic factors are in our favor. There were a lot of apprehensions before the start of the year that elections might drag the industry growth, but that has not happened. At least in April, it has not happened. Even in May, we think that the momentum is there on the ground, right? Of course, the results will come in next few, next, week or so. But, but we remain very optimistic about, M&HCV industry in FY25, not just for the whole year, but for H1 as well, and also for LCV. You know, again, the prediction was that there would be a negative growth in Q1 and Q2, but April was reasonably good. April industry was about 2%-3% positive, right? So on both, the segments, we are quite optimistic. Got it. That's helpful. My second question is just specifically how the mix of vehicles has moved within the M&HCV segment over the past three to four years. I think pre-COVID, the 40 ton plus vehicles were, you know, sub 5% of our M&HCV volumes, and at this point, they're at closer to sort of 30% of our M&HCV volumes coming from that 40 ton plus segment. So just want to understand going forward, how you see this migration. Are your key customers continuing to prefer replacing those 25-35 ton vehicles with 40 ton plus? And any fundamental factors, you know, behind this decision making? Just trying to understand how the mix might move going forward? Yeah, that's a good question. I mean, I think, you know, I mean, even in the last year or the last couple of years, we had this trend, emerging, and we think it will continue to emerge in this fashion. So few things are happening that we all know. One is that, you know, there is a, there is a great pull towards tractor-trailers and also, towards, tippers, you know. Now, both these, products, they need more power, you know, because the kind of applications they work around. Also, another thing is that, you know, we know that the aging of the fleet is at its highest, you know, it's at about 10 years, I think, and the normal used to be, like seven, eight years, right? So there is a lot of replacement demand, replacement market that is emerging, and it will continue to emerge for the next few years until we get back to a lower age, normal age bracket. Now, what is happening is, I think around 70% of vehicles in the market are from BS-IV era, yeah? And therefore—a nd these are all mid-ton, low-ton vehicles and when these get replaced, they will obviously get replaced by more higher-ton vehicles, right? So, I think this trend is, going to continue. Replacement demand is going to be very strong in times to come, and, slowly, these BS-IV vehicles are going to be converted into the latest, technology vehicles. Got it. And just lastly, a bookkeeping question. Just want to understand, I think a couple of quarters back, you had mentioned that you are currently in a high tax rate years, but FY25 onwards, you did mention that you're working towards getting to a different tax bracket. So just want to understand how we should think about tax rate for FY25. See, at the rate, you know, we will decide on the tax rate for FY25. This is Gopal. Hi, Muthiah. So on, you know, as we proceed through the year, because, you know, there is a threshold profit that we need to achieve for getting into the lower tax rate because of some, you know, the, some working that we need to do. But having said that, I think that in all probability, we would get into a lower tax rate next year. Got it. Thank you very much, and all the best. Thank you. The next question is from the line of Kapil Singh from Nomura. Please go ahead. Yeah, hi. Good afternoon, sir. Just wanted to ask you regarding the industry outlook, you know, one of the things is that the base in the first couple of months was also low last year. So, you know, when you're talking of strong growth, are you talking for Ashok Leyland, you know, or you're talking for the industry as well, you know, where you think? And any indication you think we could, we could be somewhere close to high single digit, double digit, somewhere in that band, for the full year? Yeah. See, very hard to give you a specific number right now. We are, it's too early in the year. Yeah, I agree to some extent, April had a low base, but then 10% is not bad at all, right? So—a nd even LCV has shown us some good prospects. We really think, you know, I mean, industry, because I'm not saying just from the numbers, et cetera, but we really think that the pulse on the ground is very strong, like I said. You know, we also look at other factors, you know, that affect the CV industry in short and medium run, f reight demand, diesel prices, you know, freight rates. You know, most of them are looking positive. Most of them are in the green, right? So we see no reason as to why the industry should not continue to perform well. Like I said, there was some anxiety about the elections, you know. So irrespective of a base, I mean, elections, if they've had a power to dampen the industry, it would have dampened, right? But that has not happened. So even that factor is not playing out that well. And, you know, even May is looking promising right now. I mean, this is just depending on, you know, the trends in the market or the kind of inquiries that are being generated as of now. So yeah, we continue to be optimistic, but very early to give you a specific number, but I think it should be a good year. Thanks, sir. That is very helpful and encouraging to hear. Also, if you could talk about the fact that, you know, we've achieved close to 14% margins this quarter, and, you know, full year we are at 12%. Do you think there is headroom here to keep improving margins over next couple of years as well, through the same ways as which we have been doing in last, maybe one to two years. And any broad perspective, do you think, because, you know, we have talked of making kind of margin as the aspiration. So, just your thoughts on, you know, how things are evolving. Any comments on commodity outlook and pricing environment and discounts as well, please? So, I think you're right. Our stated objective is to retain to this mid-teen EBITDA margin. That is why I think we're very clear of not really playing a discounting game and growing our market share on the basis of products and our extended network as well. I do believe it is possible to maintain this. We've done a lot of internal work in terms of cost reduction, productivity improvements, efficiency. At the moment, commodity prices are going in our favor as well. So I would say that our objective is very much to maintain these types of margins. Okay. And lastly, if you could just help us with the CapEx and investment plan for FY 25, please. Yeah. So see, last year, our CapEx was close to INR 500 crore, and you would have seen that we have been very, very consistent with our CapEx. And the reason for that is, you know, this is like a well thought out plan on the product. You know, it's not like you know, any... You wouldn't see any jerky reactions from Ashok Leyland on CapEx, right? Because it's already laid out for next few years. Of course, it is very dynamic, so we keep on looking at the market conditions and change the plans here or there. So even for FY 2025, our CapEx would be between INR 500- 700 crore. And the investment plan be? Investment is, you know, the only investment I think, or a significant investment required, will only be in Switch. Maybe to some extent, OHM, w e don't see much requirement in OHM right now, but we haven't finalized the exact numbers. It should be kind of lower than what we did last year, but we'll let you know. I think it'll take another month or so. But at least for the next, or at least for the first half, I don't think there is any need to invest even in Switch. And I would also like to tell you that Switch in quarter four has been EBITDA positive. Yeah, so this is the Q1 where they have turned around into being a profitable company. Even in FY25, we are, as I said, you know, we are still kind of refining the plans, but we hope that Switch would remain EBITDA positive. Switch India would remain EBITDA positive. That's great to hear, and best wishes for the next year, sir. Bye. Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead. Yeah, hi. Thanks for taking my question. Just a couple of follow-ups. On firstly, on the margin, there is, there's been, you know, quite a tight control on the staff cost also, if I see sequentially, and, you know, even most other cost items seem to have been rationalized a lot. So is there any specific to call out, that you think will normalize going into fiscal 25, or these are new, you know, slower reset base, that's how we should be thinking about fixed cost, going ahead? Yeah, Gunjan, thank you for that question. It's a very interesting question. See, I mean, in automotive sector, you know that, the cost tends to go up. Even if you don't increase the headcount at all, the cost tends to go up by 10%-11% because of increments and other recognition and reward that you do for your employees. Yeah, but in our case, you would have seen, while we of course give very handsome increments to our people, but in our case, you would have seen that the cost has not gone up to even that extent. Yeah? So there is definitely some efficiency that we do try to create, some productivity enhancement measures we do try to undertake as far as our executive manpower is concerned, or even our blue-collar manpower. Yeah. So, to that extent, I think, even going forward, there are several avenues that we would be looking at how we can increase productivity of our people, and therefore, keep the overall manpower cost on a tight leash. Sir, if I recall, I think, on a full year basis, last year you had mentioned that, you know, there were some INR 300-400 crore of cost savings, or costs which were taken out. Is there a number that you can sort of share? Maybe I don't recollect what exactly the number for last year was, but there was this fixed cost program where you were talking about taking out the fixed costs and being very, very efficient around it. Is there a number that you can share with us, and how should we think there is more efficiencies to be made going into, fiscal 25? Yeah, Gunjan, we never said INR 300- 400 crore. But I can tell you it is a significant number. As far as the future is concerned, this year also, we are looking at a very ambitious target on cost savings, yeah, which is even better than last year. We'll continue on that journey. You know, I mean, you know, at Ashok Leyland, we think that cost optimization is a journey that never stops. There is always an opportunity to reduce your costs, cut your waste, you know, and, you know, I mean, the simple reason for that is technology keeps on changing. You know, you come up with new products, new platforms, and whenever you come up with a new technology, new platform for the first time, you really, you know, I mean, build some extra cost in it, you know, just to be on the safe side, and therefore, there's always an opportunity to relook at your product, even your business operations, to see where the opportunities are. So I can tell you that at least for this year, we see there is a great opportunity in cutting costs further. And just to add here, to what Shenu says, it's not just merely fixed cost that we are looking at. You know, we are looking at the cost of the product and taking even some of the variable costs out. You know, so this is a continuous journey of improvement that will happen. We will be deploying digital. You know, there's a whole host of opportunities that come in, and so we have to be—y ou know, we are, we are, we are turning to be a completely fast-paced, digitally driven organization. There is not a lot of opportunities. Balaji here, Gunjan. In short, no, we are not leaving any expense heads. We look at every item and then look for a cost reduction, be it the material cost side or on the overhead expenditure side. Okay, got it. That's good to hear. The other question that I had was on the subsidiaries. Now, you know, you mentioned Switch being profitable. If, you know, if... I mean, I would imagine the scale is very, very small right now. And, you know, the contracts that we're doing on the e-buses side, running of those buses doesn't lie with Switch, right? I just want to be clear around that. It is the buses are run by the other subsidiary, and Switch is only the manufacturing company, right? Is that understanding correct? Yeah, in principle, correct, Gunjan. But just to just to correct or just to clarify that Switch we are not saying is profitable yet. We are saying it is EBITDA positive, right? So we have, still have some journey to go. Switch India, yeah, I'm talking about Switch India. So we are still have some journey to go as to make it the overall net profit positive as well. Now, coming to your answer, yes, we as you know, a few quarters back, we had activated a subsidiary directly under Ashok Leyland, which we call OHM Mobility. That company is our E-MaaS company, you know, and in future, all the contracts, GCC contracts that will be signed or we will undertake, will be signed by OHM Mobility. There are some contracts that we still have in Switch Mobility, which we are trying to transfer to OHM, you know, but it requires several approvals, et cetera. So we are in that process, and wherever it is possible, we will transfer those contracts to OHM. Okay. And last question on Hinduja Leyland Finance. If you can just share a little bit on the operating metrics around what's the AUM, what's the net worth, and where are we in terms of the process, you know, of that amalgamation or reverse merger that we were working on? See, as far as you know, the Hinduja Leyland Finance is concerned, I would say that the reverse merger process is back on track. It had, you know, some procedural issues more than anything else. So otherwise, what was envisaged as the original model strategy continues. So we expect that this may take a couple of more quarters. But I think once that happens, we believe that there is a value upside that will be seen not only for Hinduja Leyland Finance, but also for Ashok Leyland, because the investment that is there in the Ashok Leyland book is not reflective of the value that Hinduja Leyland Finance, and its own subsidiary, by the way, Hinduja Housing Finance has. So we are even looking at some sort of a value release even in Hinduja Housing Finance at the moment, but not through a listing. We are looking at whether there are opportunities for getting in third-party investors, but it's at a very early stage, but we'll let you know that. The whole idea is to see that these, you know, some of these subsidiaries that Ashok Leyland has, actually start getting reflected in their, you know, in their true value. That's what it is. And the other bit is, as far as, you know, Hinduja Leyland Finance is concerned, the overall AUM of Hinduja Leyland Finance is INR 38,000 crore, and of Hinduja Housing Finance is about INR 11,000, around INR 11,000, which makes it about nearly INR 50,000. Nearly INR 50,000. It's a pretty large- sized finance company today. The NIMs are, I don't have the exact number, but to give you a trend, GNPA is about 4.5, and the NNPA is at about 2.25 or 2.3. So it is, you know, it's, it's been pretty well managed. It is pretty diversified. It is not just focusing on commercial vehicles. They've got two-wheelers, three-wheelers, off-road, a Loan Against Property, and of course, they also do, you know, buy out of papers, sell down. So, you know, they have their own, path, charted out. And the CV share is now hardly about 27%-30%. The net worth, if you can share? Beg your pardon, please? Net worth as of the end of the year for the Hinduja Leyland Finance. Offline, I don't have that number readily- Okay. But I'll share that net worth with you. All right. Yeah. All right. Thank you so much. Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Hi. A couple of questions from my side. One is, you talked about, the fleet average age has been increasing, and this has been happening for the last few years. Any sense on what is causing this delay in replacement demand coming back? Is there any structural issue there, or, I mean, why it is not getting justified now? No, Jinesh, it does take time, you know, I mean, because, you know, this, t he aging of the fleet started actually happening during the COVID times, right? So, I mean, a lot of people are kind of trying to come out, you know, I mean. So a lot of it is happening. It's not that it is not happening, but as what I said was that it needs to accelerate further. And I mean, all indicators are positively saying that it will. But it takes time. I mean, it's not like... It's a major investment. It's like fleets, you know, so people do take time to invest and time to take at opportunities to grow their business and, you know, I mean, time their vehicle purchases accordingly. Okay. Okay. But are you seeing the large part of this replacement getting delayed because of small and single fleet operators holding back on their own purchases? Is that also one of the reasons or, you know— I mean, that is true. So the larger fleet operators will they will replace earlier than the smaller ones. Yeah, and smaller fleet operators, of course, they get, you know, when times are bad, they get into more of a problem. You know, for larger fleet operators, it's really easy to kind of absorb bigger shocks and then come out of it more quickly, right? So that is what I was saying, you know, so it takes a little bit of time. Got it. Got it. Secondly, with respect to, you know, we talked about, CapEx to be just about INR 500-700 crore. I believe we have still reasonable headroom to grow from the current capacity as utilization is going to be close to 80%. If we have to trigger next round of capacity addition, can we do it through brownfield route only, or we'll have to look at a greenfield? See, we are evaluating our manufacturing footprint as we speak, right? Because, of course, for next two to three years, we see no problem as far as capacity, capacity is concerned. But, hopefully, we have to prepare ourselves for a period beyond that. So we are looking at it. We'll come out with more details and share with you. Right now, it's hard to say how it will come. But yes, we would-- what-- one thing we know is that after three years, we might need additional capacity. Right. And the large part of the capacities would be fungible between the alternate fuels which you're looking at, including EVs, versus pure ICE. Would that be correct understanding? Yeah, definitely. The idea is to create common capacity. Yeah, I mean, common lines where we can do both, which will give us lot of flexibility in the future, and it will also kill lot of uncertainty, you know, market uncertainty to uncertainty to flow into our production planning, right? So that is the idea. Even the new plant in Lucknow that we are constructing is based on the same principle. So it should be the same line, on the same line, we should be able to make electric buses as well as the traditional buses with traditional fuels. Got it. And lastly, can you talk about what is our outstanding order book for e-buses, which we have on our hand, and now are all the hurdles being taken care for participating in the further tenders, the future tenders on e-buses? Yeah, yeah. I mean, Switch right now, I actually, we are very happy with the progress of Switch India. You know, Switch is actually going to have a different struggle now. I mean, the order book is very handsome. We have 1,500 in hand. We have 950 to deliver in Delhi and another 320 to deliver in Bangalore, and then few more. You know, so as we are kind of, as we are going to deliver these, we have to really ramp up on various aspects, on production, sourcing, capabilities, et cetera. So, Switch might have a different problem this year, where it will be kind of pushing, you know, the vehicles out. Of course, as far as tenders are concerned, new tenders are concerned, we will be participating in, in the tenders. Of course, we are going to do that on a profitable basis. If we think that we are going to make a loss, upfront loss, we are not going to be interested in that tender. But there is ample opportunity even for profitable tenders in the coming year. Got it. Got it. And, eLCVs again, do we have a sizable order book, or that will build up as now since deliveries have started? Okay. Well, the eLCV, you know, we've only launched into the market at the end of March, and the order book is building up. There's a lot of interest from e-commerce and logistics companies, especially many multinationals who are looking for the last mile to be green as well. So I would say that it's early days, but a lot of strong interest, and we will also be launching the IeV 3, which is the smaller version, in the next three to four months. Got it. Great. Thanks, and all the best. Thank you. The next question is from the line of Raghunandhan N.L. from Nuvama. Please go ahead. Thank you, sir, for the opportunity. Congratulations, team, on strong numbers, and best wishes to Gopal and Balaji, sir. Sir, firstly, on the defense segment, how has been the performance in Q4, and how do you see the outlook for FY25? Can it cross the INR 1,000 crore mark? Hi, Raghunandhan. Defense actually is one area we are very buoyant on. Even in FY24, we could grow our top line on defense by more than two times. And that 1,000 crore mark, we have always been saying we want to reach there, and we are very glad to say that we were, in FY24, we were almost there. We did not touch it, but we were almost there. Yeah, but having said that, I will also tell you that our order pipeline, also the visibility for the next couple of years is very, very strong. Yeah, so, so now having kind of almost touched that INR 1,000 crore benchmark for defense, we are going to set up a much higher target for ourselves. Thank you, sir. Sir, if you can elaborate a little on the new products in MHCVs, LCVs, can you provide more details on which categories, applications you are trying to strengthen AL's position or fill white spaces? It will be a combination, Raghunandhan, as you know, for obvious reasons, we can't divulge all the details on the new upcoming products, but, yeah, it will be a combination. Large part of it will be covering our white spaces, but even otherwise, it will be strengthening our product positioning in the market to the next level. So all the launches would be aimed at increasing market share. You know, so I mean, I mean, as a philosophy also, you know, when we look at any new product or any new launch, we look at how we can be better, yeah, by, from ourselves or, or better than competition. Yeah, so in each case, it should give, give us better market penetration. Thank you, sir. And, on the gross margin side, it has shown an improvement. Can you talk about the enabling factors? In opening remarks, the chairman referred to the pricing and discounts discipline. There is also a positive mix, and there is also share of defense, which would have gone up. Can you provide a little more on details of gross margin? And going forward, do you expect, you know, things to sustain on the discipline side, or do you see any risk of competition increasing? Hi, Raghu. Yeah, I mean, gross margin, of course, we have had an impressive, increase, in FY24 over the previous year. But I think more than that, what we are happy about is that it has come to all-round performance. You know, whether it is mix or whether it is cost savings on materials and other costs, or whether it is price realization, I think everything has played really well. On the mix side, like I said, defense is a good, I mean, reasonably good margin business for us. We have grown, more than twice. Power solution business is also a good margin business for us, and, we had a 40%+ growth there in FY24. Then spare parts is very high margin for us. We had a growth of about 32% in spare parts. Then even in LCV, you know, not just that we could increase the market share, but also our focus remains on margins. And even on the bus side, you know, I mean, we are actually very happy that bus margin has done very well. I mean, we have grown our market share by about 5-5.5% in buses. At the same time, we have grown our margins very considerably, I mean, quite, quite well. Yeah, so I think overall, it is a good thing, I mean in terms of mix and in terms of our ability to realize better prices in the market, which of course, as you would agree, comes mainly from your superiority of the product and your ability to reach the customer. So, so yeah, I mean, as far as FY25 is concerned, a lot of these actions, I think, will get translated into the next year, because it's not like one-off action, it's kind of a journey. It's like a series of actions that we have planned. Even on the cost, you know, we think we can do even better than what we did in FY24. A lot of it also depends on some of the external factors. So we will keep gauging, you know, the market, the competitors' response, et cetera. But I think if the industry continues to do well, like it did in April, I think even those external pressures would not be too much to handle. Thank you very much, sir. Wishing you all the best. Thank you. The next question is from the line of Priya Ranjan from HDFC Asset Managers. Please go ahead. Yeah, thank you. Two questions. One is on the mix of the, what was the non-vehicle revenue percentage in this quarter? And secondly, if I look at the consol PBIT and standalone PBIT, even last year, we have roughly around INR 500 crore loss. Even this year, we have around INR 520 crore loss. So if these losses are primarily only to switch or something else, I mean, can you just elaborate on that? So as far as the mix of revenues are concerned, I mean, we normally don't give out the complete breakdown here, but, the, the main, revenue earner is, of course, the trucks and buses, which, you know, they, they account for, nearly about, 60, maybe nearly about 70% of the revenues. And then you have light commercial vehicle, which again, accounts for about 11%. I'm just talking about it on an annualized basis. So, you have 70 and 80, well, the rest is coming with the rest of the businesses. But most important is, of all of these, businesses, light commercial has been flattish, but if you really look at it, the market share has grown in a, in a market in India, the addressable market has actually come down by 4%. But other businesses like aftermarket, you know, defense, power solutions, have actually done record revenues. Exports has posted a 5% growth despite very challenging circumstances in the international market and all major players in India actually posting a de-growth. So to that extent, the whole bouquet of businesses have done very well. And like Shenu mentioned earlier, the bus business has, you know, kind of sharply grown, domestic bus. The market share has moved from somewhere around 32 to 38.8, 38. Trucks has shown a little bit of a, you know, kind of a small 1%-1.5%, reduction, which the team is pretty confident can be reversed pretty soon. Now, as far as the delta difference between profits for Ashok Leyland and consolidated are concerned, you know, the major impact is only on account of Switch. You know, and that, too, I think the U.K. operations are where the challenges are. And we can't blame the management directly on that or because the market in Europe, which as you all know, is going through a lot of turbulence and challenge. The, you all European economies are actually going through a lot of uncertainty. The U.K. market themselves are not doing well. U.K. has its own internal problems in terms of fiscal challenges that it's having. So it, Switch India, on the other front, is actually launching products. See, these kind of situations, you know, what is most important is to ensure that you don't move away from your strategic direction, which is to ensure that you are launching the products, creating the customers, you know, keeping yourself ready when the market is going to grow. At the same time, you know, the management of Switch UK, while they are doing all of this, they've also been reducing expenditure, trimming down costs as much as possible to ensure that, you know, the cash burn is reduced. I think that this year, Switch India should do well, but we'll wait for things to unfurl. We've got an exciting range of products also now in light commercial vehicles. They have been making, you know, the OHM, which is the other subsidiary, is making bids in some of the tenders, which will again, you know, be an order book for OHM, means an order book for Switch also, because the OE that's going to supply OHM is going to be Switch. So I think we are very positive about the outcome of these businesses, but I thought I'd give a slightly longer answer to your question, because otherwise people will feel that, you know, this is just some loss-making entity. It's not just that. I think there's a lot of effort and excitement around the EV business. Okay, understood. Thank you, Christopher. Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Hi. In the past, we had won several orders or rather several tenders on defense side, so but they've been materialized. So are we seeing any progress on those tenders now, given there is quite a bit of activity on the defense procurement side? So, Jinesh, those are orders. See, those defense tenders have been won, but we'll have to wait for the—i t is not materializing. The government has its own pace of ordering. So some ordering will start now because, you know, the government is also managing its defense budget astutely. But here again, but what is happening is, aside of the core, Stallion revenues, we have started to the, both between Ashok Leyland defense business and ALDS. I think they are now actually growing very rapidly, and, while we don't want to issue a forward-looking statement, I think, 2025 numbers and 2026 numbers will be much, much better than even what we have posted in 2024, which itself is a very high record number. Okay. Okay. So this is coming from Stallion, only, the new- I think more than, not totally Stallion. It is coming from other new orders also, which have been started, executed in FY24. Okay. Got it. The competition is getting better, which means it is no longer—w e don't— we want to actually, ensure that the concentration of Stallion, while it should continue it to grow, should come off. The concentration should come off. Got it. Got it. And last question on on Switch U.K. So it was looking to put up capacity in Spain. So any update on that? Are we still going ahead with that given the pain which is very, you know? No, I think if you see, I mean, I think it's a very strategic, it's a very small strategic, you know, kind of pin that we have put on the map. Because what is important is that, you know, at point in time when Europe starts to expand, we need to have presence to quickly ramp up sales there. It's not really guzzling cash. There are very few people, but what happened is, at the time when we actually put that, you know, made that investment, we, the European market was looking very promising, and this was, you know, you must remember pre-Ukraine, Russia, and all that. Then what happened is there has been a little bit of a downturn in the European market, and we are now looking at, you know, waiting for things, but we are not stepping up. The first vehicles, actually, by the way, has been delivered, will be delivered in, in the coming September. I think it's a few numbers, but we want to ensure that, you know, we do make that small step in Spain. Okay. So with that, it's on track and, yeah, so placed on September. Yeah. Got it. Got Got it. Great! Thanks and all the best. Thank you. The next question is from the line of Nishit Jalan from Axis Capital Limited. Please go ahead. Yeah, hi. Thank you. Sir, one question around the industry growth. One common thing that we keep hearing is that the impact of Dedicated Freight Corridor will have on the road freight and on the truck demand. So just wanted to want to hear your thoughts. We have seen commissioning happening. It's still not full commissioning. Are you seeing any impact? What kind of impact are you seeing on the roads where DFC has got commissioned, especially on the container traffic? Any numbers or anything that you can highlight here? So, Nishit, as you said, you know, this has not played out fully yet. You know, a lot of links in the chain are missing, right? So, so far there has been no impact. But even going forward, you know, we have actually done a very massive in-depth study of this whole thing. You know, talking to various people in cement, steel, et cetera, and even other sectors, you know. So, I think there is, see, the whole TCO of this new model or potential new model around DFC is not working out yet. Yeah, so there are some, like, fundamental issues in the model, which have to be sorted out, and I really think it will take a long time, and it'll take a few years, at least, before it starts taking some shape. So yeah, I mean, this is a longer chat we need on that, but maybe when we meet, we can talk about more about this. But I, I don't think it is going to be a major or significant impact in the short term. Okay. Okay, that's good to hear. So, Shenu, one more question around Switch Mobility. So given that, there will be more and more requirements for investments around EVs, any medium-term outlook or any medium-term investment plan that you can share on Switch Mobility? I'm not asking for one year or two year, maybe over the next five years. What kind of investment would be required in Switch Mobility to do product development, set up capacity? I'm assuming and OHM as well, right? Because OHM will be a little bit more working capital-intensive business because you are not selling the product outright to the STUs, right? It's more of a build, operate kind of a model. So, any thoughts on how much, what kind of investments would be required over the next two to five years in both these EV entities put together? So, let me answer that. As we have said, the India Switch story is moving very well, and LCVs will start picking up as well. And as Shenu said, we. Our concern really is now how to get all the buses delivered, based on the order book and more tenders that we have been involved in. I think those results will come as well. And this should, irrespective of the performance of U.K., the India side should be able to manage the immediate funding needs. And as Gopal was explaining, U.K., Europe will pick up, and our, we have been spending time on development of new vehicles, so all of them are now coming out. So. for Delhi, for Bangalore, it's a brand-new 12-meter low-floor bus that is going. In Europe, it is a brand-new e1 that has been developed over the last 2, 2.5 years. So all the investments that have been done will now start bearing fruit, and in our view, the majority of the CapEx for those new products we have already borne. Now, the markets will pick up, and I would say that, you know, every government, every city, is moving towards electric. So let's wait and see, and I think we can probably give you a more precise response to this in another few quarters. Okay. Okay, thank you so much. Thank you. As there are no further questions from the participants, I would like to hand the conference over to the management for closing comments. I'd like to thank all of you for your continued interest in Ashok Leyland, and I would like to reiterate. I know there have been a lot of questions with regard to the expected growth for this year and what the outcome could be for this year. All we can say is that indications remain good, especially with the customer base. I think that's really the true test. How are the customers feeling and their replacement demand itself, and you can segment the market as well. So there are pockets that might see some slowdown, but they're more than made up by other areas of the vehicle. From Ashok Leyland's side, our interests, or I would say our goals, remain of maintaining our EBITDA margins and continuing to grow market share, but not buying market share. It'll be done on a profitable basis. We are, you know, as we said, on track, both in LCV and LTV. Overall, we continue to be fairly positive on the outcome in the near future. Thank you. Thank you. Thank you. On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.