Ladies and gentlemen, good day and welcome to Ashok Leyland's Q4 FY 2026 earnings conference call. I now hand the conference over to Mr. Mukesh Saraf. Thank you, and over to you, sir. Hello, am I audible? Yes, sir. Yeah, Mukesh, you are audible. Okay, great. Thank you, Adel. Good evening, everyone. Mukesh Saraf here from Avendus Spark. Appreciate everybody logging in this 4Q FY 2026 earnings call for Ashok Leyland Limited. From the management team, I am pleased to host Mr. Shenu Agarwal, Managing Director and CEO, Mr. K. M. Balaji, President Finance and CFO, along with the investor relations team. I will now hand over the call to Mr. Agarwal for his opening remarks, for which we will begin the Q&A. Over to you, sir. Good afternoon, everyone, thank you for your trust in Ashok Leyland, as always. I am pleased to report that FY 2026 has been a truly milestone year for our company. We achieved all-time high CV volume, revenue, profit and cash surplus, marking the best annual performance in Ashok Leyland's history. Building on FY 2025 record results, we have delivered another year of broad-based growth across all our core businesses, demonstrating the resilience of our operations and the trust that our customers place in us. Based on standout performance of FY 2026, the board of directors have recommended a second interim dividend of INR 2.50 per share. Q4 FY 2026 provided a strong finish to the year, with a solid performance that reflects the strength of demand in the CV industry and our disciplined execution. Domestic vehicles volume growth, led by GST 2.0 rate rationalization, gained further momentum during the quarter. Q4 domestic MHCV industry volume was higher 21.5% YoY, and for full year, it was higher 12% YoY. Ashok Leyland domestic MHCV volume grew in line with industry, with market share of a healthy 30.8% for quarter four. Ashok Leyland domestic MHCV trucks volume for FY 2026 was 105,905 units, with market share of 30.2%, and MHCV bus volume was 20,840 units, with a market share of 34.1%. Ashok Leyland continued its leadership position in MHCV buses. Ashok Leyland domestic LCV volume for Q4 was at 21,801 units, higher 23% YoY, growth better than that of industry. LCV Vahan market share for Q4 was 12.8%, with a gain of 90 basis points on YoY basis. For full year, LCV volume was 74,322 units, higher 12% YoY, and full year LCV Vahan market share stood at 12.7%, higher 80 basis points YoY. This is the highest ever annual volume recorded in LCV. Our export volumes for full year reached a historic high of 18,082 units, delivering a robust growth of 18.5% over the previous years 15,255 units. For the quarter, volume at 5,322 units was marginally lower YoY, primarily due to international logistics issues faced in March. Overall, CV volumes scaled a new all-time high of 220,437 units, surpassing the previous peak of 197,366 units achieved in FY 2019. This includes defence vehicles. Our non-CV businesses also demonstrated remarkable growth. Domestic aftermarket revenue for the quarter was up 11.2% YoY and higher 9.5% for the full year. FY 2026 revenue from power solutions business was higher by 16.4% YoY. Revenues from Defence business, including revenue from our defence subsidiary, ALDS, was higher 20% YoY. Defence order book and tender win pipeline remains ever strong. Coming to financial performance, Ashok Leyland achieved all-time high quarter four revenue, EBITDA and operating PBT. Revenue for Q4 was at INR 14,161 crore, higher by 19% YoY. EBITDA was at INR 2,066 crore, higher by 15.3% YoY. FY 2026 revenue was at INR 44,007 crore, higher by 13.6%. EBITDA for the quarter was at INR 2,066 crore, and EBITDA margin was at 14.6%. With full year EBITDA margin at 13%, we have now truly entered the teen bracket. This is an improvement of 30 basis points from last year. Q4 PBT before exceptional items was at INR 1,909 crore, higher 14% YoY. PAT, excluding exceptional items, was at INR 1,405 crore, higher 13% YoY. Full year PBT, before exceptional items, was INR 5,163 crore, higher 22% YoY, and PAT excluding exceptional items, I repeat, excluding exceptional items, was at INR 3,914 crore. We may note that during Q3 of FY 2026, on account of the new labor code, there was a one-time charge of INR 308 crore. Material cost as a percentage of revenue for Q4 was 71.4%, higher by 80 basis points on YoY basis. For full year, the ratio was at 71.4% again, 10 basis points higher than last year. Despite commodity headwinds, we could maintain and even improve our gross margins. This was made possible through better price realizations, rigorous cost-saving efforts, and continued focus on improving product and business mix. CapEx for the quarter was at INR 203 crore and cumulatively at INR 1,050 crore for the year. Most of the capital expenditure has been deployed towards new products, including future technology development, alternate powertrain technologies, and electric vehicles. Investments in subsidiaries in Q4 was INR 371 crore, primarily towards repayment of loans in the Optare books. Investments for full year was at INR 387 crore. Our cash position net of debt has got even stronger. We had net cash of INR 5,899 crore at the end of the year, an increase of more than INR 1,650 crores YoY. We are resolutely pursuing the path of premiumization, working diligently on delighting our customers with superior products and services, and maintaining operational discipline. The highlight of the year was our launch of HIPPO tractors and TAURUS tippers with industry best power and torque, delivering best in class TCO. In MAV category, we launched new trucks with improved powertrain of 280 HP. In LCV segment, we launched new 4.1 ton Bada Dost with industry best payload. We also launched our most advanced LCV product, Phoenix, for the export markets. Our product pipeline remains strong with substantial portion of our CapEx being allocated in creating new product capabilities. For strengthening our service delivery, we added more than 100 touchpoints, each in our MHCV and LCV businesses. More than 45% of our touchpoint additions have been in the North and the Northeast regions. At the end of FY 2026, Ashok Leyland network has a total of 2,104 touchpoints, 1,159 for MHCV and 945 for LCV. In international markets, we expanded our network to four new countries in the previous year. A particularly noteworthy achievement in FY 2026 was our progress in electric mobility and alternative propulsion vehicles, areas that are critical to our future growth. During Q4 FY 2026, we announced groundbreaking for a greenfield battery pack manufacturing facility at Pillaipakkam, near Chennai, intended to support our electric mobility programs. Our EV subsidiary, Switch Mobility India, delivered a standout performance, attaining net profitability in FY 2026, a major milestone in our electrification journey. During the year, Switch India achieved market leadership position in electric buses, as well as in 2- 4 ton electric LCV market. Switch significantly scaled up deliveries of electric buses and light vehicles during the year with 1,530 buses, higher 238% YoY and 1,600 electric LCVs, higher 56% YoY. Order book at the end of the year for Switch India stood at 1,600 units. OHM Mobility, our e-MaaS subsidiary, improved operational fleet to over 1,400 e-buses now. Hinduja Leyland Finance, our vehicle financing subsidiary, delivered robust growth in FY 2026 with its AUM expanding by 24% year-on-year to approximately INR 59,000 crore. HLF's strong performance not only contributed to our consolidated results, but also enabled vehicle sales through continued financing support to our customers. HLF's PAT at INR 491 crore was higher 20% YoY. Hinduja Housing Finance or HHF similarly saw its AUM grow by 15% YoY to approximately INR 16,000 crore on back of steady demand. HHF PAT at INR 387 crore was higher 4% YoY. Both HLF and HHF maintain healthy asset quality with consolidated net NPAs at 1.4% approximately. Delivering solid profitability alongside prudent risk management augurs well for the future growth of both the financial companies. Reverse merger of HLF with NDL Ventures is progressing as per plan and should get consummated within this or the next quarter. We remain focused on our ESG commitments. Our Road to School and Road to Livelihood program continues to grow, extending their reach to about 6.3 lakh students now. Our Dow Jones Sustainability Index ESG score has improved significantly, and we are now in global top 2% of the industrial engineering and electrical equipment companies. In our commitment towards RE100, we have achieved a 77% RE status against 69% in FY 2025, with our Tamil Nadu plants now at 91% RE100. In summary, FY 2026 was an outstanding year for Ashok Leyland as we executed our strategy effectively and delivered record results while planting seeds for future growth. Looking forward, we are entering the new fiscal year with cautious optimism. Demand drivers for commercial vehicles remain positive overall. We are mindful of the macroeconomic headwinds such as global economic uncertainties, commodity price volatility, and diesel price increases. Our foundations remain strong. We will keep innovating, attuned to our customers' needs, with intense operational discipline and heightened focus on prudent fiscal management. Ashok Leyland is well-positioned to navigate the road ahead and continue creating long-term value for our stakeholders. Thank you once again for your continued trust on us. I hand it over back to the moderator. Thank you very much. We will now begin the question and answer session. The first question is from the line of Kapil Singh from Nomura. Please go ahead. Hi. Good evening, sir. Congratulations on a strong performance. My first question is on demand itself. Recently we have seen fuel price hikes. Just wanted to check, what are the demand signals you are observing? Has there been any change? For FY 2027 as a whole, is there any outlook you would like to give on the growth for MHCVs? Similarly, on export also, if you can share the outlook. Thank you, Kapil. It's a very relevant question. We do hear a lot of noise in the media about several things, but I just wanted to clarify what our outlook or what our view about the market is. Of course, you know that since October, the market has grown very strongly on both MHCV side and the LCV side. The reason was basically, one, the effect of the GST rationalization, which reduced the prices by about 10%. The other reason was also that this GST rationalization acted as a trigger for replacement of the aged fleets, and we know that the aging of the fleet is at its all-time high. Now, having said that, Q3 and Q4 had very strong growth, and April also was very positive. In May, we are not seeing any significant slowdown, both on the MHCV and LCV side. There is a kind of a sentiment attached to the diesel oil prices that is there in the market, which is affecting the current logistics operations also, in many routes and in many areas. I think the resilience of the demand based on GST and on the replacement factor is acting very strongly, and it is protecting a minimum baseline on the CV demand right now. Of course, we have to watch how the diesel oil price situation in terms of availability and in terms of the price hikes, how these pan out. To that extent, we have to have a kind of a wait-and-watch approach. I can tell you for sure that when we are talking to our customers and the big fleet owners, and I was traveling in the eastern region last week or a couple of weeks back, I think that basic base-level demand resilience is very strong. On the export side, the situation is very similar. At least in our home markets of GCC, Africa, and SAARC. Although the oil prices have gone up quite significantly. We are not seeing any significant slowdown in the demand on the retail level. Now, of course, export volumes may get still affected because of the international logistics situation. Even in March and also in April, while there was demand, we could not ship out the quantities according to the demand because of logistics issue. Exports might drop, I would say in Q1. Things are now coming back to normalcy as we speak. The situation in our factory in RAK, also we had to drop the production there because of local challenges. We had some effect in March and also in April, now we are trying to bring it back to 100% capacity utilization. It may take few more weeks to do that. Overall, the demand scenario is not very concerning. Okay, that's good to hear. Sir, second question was on margins. The gross margins have seen an improvement this quarter. You alluded to it. If you could just elaborate, how much was the price hike we took, and what was the commodity cost pressure that was felt during the quarter? Also the outlook for next quarter, like if you've taken any price hikes and how much commodity pressure should we expect in the coming 1Q FY 2027? Thank you. Thanks for the question, Kapil. Actually, we have taken a price increase of about 1% effective January, and we could continue to recover that 1% for the entire quarter. Okay, that was the recovery part. On the cost side, there has been some increases which have happened on the cost, but we have been successful enough to get the savings on account of this value engineering and e-sourcing and commercial negotiations, et cetera, which is much higher than the kind of commodity increase which we witnessed in Q4. That is where we have sort of managed the commodity cost increases through the value engineering and e-sourcing savings. That has really helped us on the gross margin front. Okay. For margins, what is the outlook on both pricing and costs? See, pricing, we have taken a price increase of about 1.5%, but we'll have to wait and see whether we'll be able to sustain the kind of price increase for the full quarter. On the commodity cost side, there has been an increase. There has been a significant increase which has happened on the commodity cost side, predominantly steel. There it is going to be a challenge which we'll be facing as far as Q1 is concerned. Sir, any number you can share? Like what's the range of commodity pressure we are facing? No, it's too early to give a range or a number, Kapil. Okay. Thank you. That's all from my side. 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 congrats on the good set of numbers. Just firstly, just on the demand side, post GST, we're seeing a good demand from the small transporters. Just want to check how that has changed in recent times with the price hikes we've seen in the vehicle and also the diesel and disruption, what is happening in the market, sir. Thank you for the question. As far as the impact of the GST was concerned, you are aware that it had a slightly different level of impact, of course, positive impact on various segments of the CV industry. The LCVs, the smaller vehicles were the ones that had the most positive impact, followed by the intermediate commercial vehicles or ICVs, and then the heavy duty trucks. Within the heavy duty trucks, I think tipper demand has been more stronger than the rest because of various infrastructure activities also helping the demand. Now, this also indicates that the demand push was better or stronger on the retail side. Also the fact is that the fleet owners were still kind of making their bets in terms of calculating the real impact of GST because of input tax credit issues, et cetera. The fleet owner demand started surging from December onwards, while the first two months it was largely on the retail side. Basically that is the scenario, and as I said in response to the previous question, we think this is a fundamental factor that will play out even in the long run, that is for next several quarters. The price increase, there was no price increase actually taken between October and March. From April 1, we have taken a price increase, like Balaji said, between 1% and 1.5%, depending on various categories of products. If you compare that 1% or 1.5% with the 10% advantage that GST created, it is not a significant price increase. In any case, taking 1%, 1.5% over six months of period is a very normal phenomenon in the CV or the larger automotive industry. I think, let us not be too concerned about the price increase and its impact that has happened. However, the situation on the ground is a little bit challenging for truck operators. Mainly the reason is availability of diesel, not throughout the country, but in certain pockets, they are facing some problems with the availability of diesel. Some of the pumps have even rationed it. When we speak to the government, the government says there is no shortfall of supply. Some people indicate that probably this is because of the hoarding, et cetera, or a general fear in the minds of the people as to whether diesel supply will actually get impacted. The situation is quite manageable. Like I said, last month I was in the eastern zone and I met several fleet operators there. I think they have clearly laid out their plans for next 12 - 18 months in terms of how much fleet they will add into and what kind of fleet replacement they will do. Right now they are all sticking to those plans. Got it, sir. Thanks for this answer. Just if you can share, how would the mix of retail or the small transporter versus fleet institutional buyers? See, generally at the industry level, retail would be about 55%-60%, and the rest of it will be fleet. I'm talking about heavy-duty trucks mainly. When you look at ICV and LCVs, the retail proportion is much higher. For heavy-duty trucks, it ranges between 55%-60% right now, and the rest is fleet. Got it, sir. Thanks for this answer. Sir, just on the financial side, this quarter, the operating income has seen a rise to INR 86 crore versus INR 56 crore. Any reason for that increase? Lastly, what are the plans for FY 2027 CapEx and the investments? On the other income, the sundry income side, there is no specific reason except that we had some returns which we have got on account of the investment of the surplus funds. That is the reason for the increase in the sundry income. On the capital expenditure side, last year we incurred about a thousand crores. Next year also the plan would be to incur about INR 750 crore-INR 1,000 crore on the capital expenditure side. On the investments, we will decide based on the requirement of the subsidiaries. Even in the previous calls I have stated, many of you wanted to know how much we'll invest before this year-end. I indicated to you at that time itself that we will go based on the requirement of the funds by the subsidiaries. We have actually repaid about GBP 30 million out of the GBP 80 million loan which was there with the Optare PLC, with the Switch U.K. company. This I had indicated. We have not disbursed any other funds to any other subsidiary company during the quarter. We will do that based on the requirement. We have plans, as indicated to you earlier, some of the subsidiary companies like Hinduja Leyland Finance, and its subsidiary, Hinduja Housing Finance, as well as OHM, these would require funds. Of course, Switch, you would have noticed. Switch is in a very comfortable position now. They have made profits. For the first time, they have reported a profit after tax of about INR 100+ crores. They are all in a comfortable position. For the needy subsidiaries, certainly, we will step in and then we will provide the funds. That will absolutely be on the need base, and it will be very difficult for me to put a number now and then give you the details on that. Got it, sir. Thank you, sir, for the opportunity. Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. In the opening remarks, you shared the net cash number. I missed that. Could you repeat that again? That is INR 5,899 crores. That is at the end of the- The December net cash was INR 2,600 crore. That's quite a good jump between December to March. Binay, that's very typical of the automotive industry, especially CV. It is the working capital changes that came through for you. Yeah, because CV demand in Q4 is very high. We have to purchase a lot of raw material for that. The payables of those raw material at peak level comes into April and May. Correct. I think it is better to compare it with last year because that phenomenon is there for Q4. At the end of last year, like I said, it was INR 1,650 crore lesser than what is at the end of. That is the real gain in the cash. Not okay to look at Q3 versus Q4 to that extent. Correct. Secondly, team, could you share us what was your FY 2026 numbers for spares, defence, and exports? Binay, defence and exports, you want the revenue numbers? Yeah, if you could just, basically the non-truck item revenue numbers. For Q4 you want? For FY 2026 only, you can share. Yeah, FY 2026. Spares would be around INR 3,800 crore. Power solution business would be around INR 1,400 crore. Exports, it has crossed INR 3,000 crore. It is at INR 3,200 crore. Right. Okay. Thanks. Any number on- [audio distortion] Yeah. Defence and Standalone, how much? Yeah. Defence is at INR 800 crores in the books of here, but overall, defence business is at INR 1,200 crores, including our subsidiaries' defence business. Right. Team, lastly, just next year for subsidiaries, like we've seen turnaround this year. How to look at subsidiary performance next year? Subsidiaries, actually, they are doing well. Especially, Hinduja Leyland Finance and Hinduja Housing Finance, they are growing at a 15%-20% basis year-on-year. While on one side it is good to note that the growth is quite good and it is continuous, but on the other side, they would also require funds at times because the Tier 1 capital sometimes is low compared to the peers in the same industry. That is also, in a way, requiring us to invest in Hinduja Housing as well as Hinduja Leyland Finance. On Switch, it is growing very well. You would have seen the numbers. The numbers have gone several times, especially on the buses side as well as on the light commercial vehicle side also, we have sold about 1,600 ELCVs. The going is quite good now. For the first time, as per our plan, as indicated earlier in our earlier conference calls, the company has touched a profit figure. Our PAT is about INR 100+ crore. They have quite a good and a strong order book position also. About 1,600 vehicles order book position they have from various state transport undertaking as well as on the private requirement side. Overall, it is good. On the OHM side, as indicated earlier, they might require some funds because they will have to buy the vehicles and then they will have to run it for the STUs. They might require some funds, wherein Ashok Leyland might have to chip in with some investments in OHM. Similarly, as I indicated to you, we may also have to invest some funds in Hinduja Leyland Finance as well as in Hinduja Housing Finance. These will be the two companies that would require some funds towards their growth plans. Team, earlier in September, we had talked about the CALB partnership on the battery ecosystem. Any update on that? I assume it's not a part of the investment that you are talking about, right? No, the battery business is currently housed within Ashok Leyland only, so it's not housed in a separate subsidiary yet. All those investments would be part of our own CapEx, that number Balaji has given you. As far as the business itself is concerned, it is moving on track. We have already done the groundbreaking ceremony of setting up this battery pack manufacturing facility at Pillaipakkam, which is not very far from Chennai. We should be able to start construction work within the next 8- 10 weeks, I would suppose. The target for the start of production would be Q2 of next year. On cell manufacturing? No, we are starting with pack first. It is a phased approach that we are adopting. We are starting with pack for captive consumption and also for energy storage systems. In the second phase, we will expand the pack capacity to get into non-captive demand also on the automotive side. Then in the third phase, we will look at cell manufacturing. It is a phased approach that we are following because one thing is manufacturing, but also the other thing is the penetration of electric vehicle in India. We'll have to just dovetail our own manufacturing investments with the demand scenarios that will emerge in the country. Right. Lastly, just team, any thoughts on PLI? When do we expect that on the electric side? PLI, we are still trying to match up to those thresholds as per the government scheme. There are some investment proposals that are coming up. I think we should be able to provide you a better update on that, hopefully in four to five months from now. Okay, great. Thanks for that. Thanks. Thank you. The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead. Yeah. Thanks a lot for the opportunity, sir. Sir, before I go into the business questions, first a clarification. Can you just share the 4Q non-vehicle revenue bit, Balaji, like how you shared the spares and exports and the defence bit for the full year. Can you share it for 4Q and how has it grown year-on-year basis? 4Q spares is INR 1,060 crores for the spares. Last year number was INR 950 crores. Engines, INR 425 crores. Last year at same level. Exports, INR 1,100 crores. Last year was INR 825 crores. Defence, INR 275 crores. Last year was INR 170 crores. These non-vehicle revenue, do you expect the momentum to continue in 1Q? We do have a bit of a problem on the commodity and even on the demand side. I'm just trying to see, will we get the benefit what we got in 4Q in the subsequent quarters from non-vehicle revenue, or there could be some moderation there as well? Seasonality, rather. As of now, it appears that the demand continues to be there for the non-vehicle side. We don't see any dip happening on the non-vehicle revenue side, Pramod. Yeah, that's good to hear, Balaji. Shenu sir, the question to you, it's understandable given the macro and the situation, what you explained. We've all been working with mid-single digit to high single-digit industry growth for next year for fiscal 2027. This is even with the second half base kind of coming in, which is quite daunting. Now given the current scenario, if you can just help, what will be the conservative or if you can give us a range of growth which you expect, assuming that the situation doesn't resolve or the commodity escalation doesn't reverse out soon, and which could be the bottom case in terms of a number for the industry. That will be really helpful, sir, because we are all trying to work with this uncertainty, but you are definitely got a much better picture on demand on the ground pulse and everything. If you can just help us understand there as to what could be the range of outcomes there on the growth front? Pramod, listen, I would have loved to give you an estimate, I wouldn't hazard a guess here because I'm really shooting in the dark. I can tell you two things, then you can make your own judgments around it. One thing is, like I said, the base level demand in CV industry we have seen has been very resilient, even after the outbreak of the war, even after the increase in the diesel prices. This I am suggesting not just because of the numbers of April and May so far, I am also suggesting this based on several conversations we had with the customer. Like I said, most of the customers had made very ambitious plans on the replacement of fleet and addition of the fleets after GST. Around December, January, they had created those plans. The customers that are fully loyal to us, of course, they do share their plans with us so that we can work together and fulfill their expansions. Until about last week, I can say, and this is after the price hikes on the diesel, people are not changing their plans right now. While there is a bit of a challenge on the ground, and it is limited to some areas, not the entire country, like I said, in terms of uptime, in terms of that they have to deliver, mainly because of the diesel shortages in some pockets. Most of the fleet owners are sticking to their plans for the year in terms of expansion of the fleet. That is a kind of very good signal as far as the demand is concerned overall on the next two to three or four quarters basis. Now, what we need to see is how much of inflation we see on the oil, on the diesel side. So far, they have increased it about seven INR, which I said is very manageable for the fleet owners. I think the general view is that even if it goes to around INR 10-INR 15, they would be able to manage by passing on most part of it to the suppliers and bearing a little bit of compression there. I think that is the situation. It will be very difficult to put a number on it, like how much Q1 will grow or how much Q2 will grow. I am quite optimistic that at least Q1 is concerned, this industry level CV performance would be better than last year's Q1. Yeah. That we can see that in April itself, sir. Okay, let me put it this way. On a full year basis, do you envisage a scenario where you could actually see no growth of the industry level? Is that a possibility compared to a mid-single digit? Pramod, the way I see it is like this. Let us assume that there will be some setback in the demand in quarter one, quarter two, or so. Now, my feeling is that even if there is a setback, this demand is not going to go away permanently. Yeah. It is going to convert into a pent-up demand. The reason I say that, because fundamentally, the situation is very strong on the ground. The sentiment is very strong. People have huge expansion plans. The aging of the fleet is at its highest. The rate cut has really improved the economics and the TCO of the fleets. Right? When the fundamentals are strong, even if there is a temporary dip because of a certain macroeconomic factor, don't you think that will end up becoming a pent-up demand for the industry? Even if there is a dip in Q2, it should come back in Q3 or Q4. That is my view. People may have other views, but that is my view, talking to a lot of people in the industry. Fair enough, sir. Last question to Balaji, sir, on margins. I think it's a tough hand what you have here. You've got a very solid base for last few years in terms of execution on margins. Kudos to you and the team. Now, given this scenario and the high base, how should one look at the margins on the near term? Because even if the war stops tomorrow, I don't think the commodity prices are easing back in a hurry. In the near term, Balaji, if you can help us understand margins given all the inflation and demand potentially being a bit soft and which limits our pricing capabilities. If you can just help us understand the margin outlook for the near to medium term for the next two to three quarters, please. There are various pockets where we can work out on the cost. You can broadly divide the entire cost into two. One is controllable, the other one is not controllable. The non-controllable costs are the ones that are predominantly this commodity costs where you don't have any control. On the other side, we also have, just like how we did in Q4 of last financial year, we have control on the savings, the value engineering, e-sourcing, the commercial negotiations, the turnover discounts from the suppliers, et cetera, where we can work and then we can try and reduce and negate. This also, I can tell you that we can do it only up to a certain extent. If the commodity cost grows exorbitantly high, then it becomes an issue. We are confident that we can effectively reduce the cost which is in our control. Actually, we have started now forming the cross-functional teams essentially to understand and look at each of the operating expense accounting head-wise individually, and then work on the possibility of the reduction. We have started this process, and you'll see the benefit of this coming inside in the subsequent quarters. Balaji, just to quantify. Yeah. The under recovery, sir, right now, as of 1Q, where are we on the under recovery on commodity? How much is the under recovery? Q4, we could recover more than the cost increases. In Q1, we'll have to wait and see because there is a combination. There's also a price increase which we have taken. There's also a cost increase which has happened, and the balance we'll have to recover by way of the operating expense reduction as well as the value engineering and e-sourcing. Right now, the gap seems to be somewhat manageable, but we'll have to wait and see. Pramod, the situation on the commodity side is definitely challenging. You guys also have those data points, what is happening with the steel, on aluminum, copper, rubber, et cetera. Yeah. We are just hoping that some of it we can utilize through price increases, which has already happened. The question is whether we can sustain those price increases for the whole quarter. The second is like Balaji said, we have initiated a whole lot of cost control measures inside the company. Of course, we do not want to dilute any programs which have a future positive impact on the company because like I explained, even if there is a dip in the market, we do hope that it will convert into a pent-up demand, which will start showing back up again in the later half of the year. We do not want to sacrifice on that view or that demand which might come up later. Anything which is discretionary, anything that can be pushed out, anything that is not really adding a huge value over the next few quarters, each and every bit of cost we are looking at, and we are trying to put some restraints on those costs. I know you want a particular number, but it is very difficult. There is definitely an impact on the margins from the commodity side. Let us see how much of it we can neutralize through price increases and cost controls. Best of luck, sir. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead. Yes. Hi, thanks for the opportunity. My first question is actually regarding the quarter. In 4Q this time, we did not see the kind of operating leverage on the staff and other costs that we normally see in every fourth quarter as volume goes up. Is there anything that is a one-off or anything that we should keep in mind when we are looking at the financials for this quarter? Amyn, your observation is quite right. We could not get much of leverage as we got in the first three quarters of the last financial year, that is FY 2026. This quarter actually, in line with the performance, we also had to make some provision towards the performance-related bonuses for the executives. This, we wanted to provide after it reaching the threshold limits. This we did only in the fourth quarter. That's why you see that happening. On top of it, I did speak about this commodity cost increases. Though effectively we contained, but in the earlier three quarters, we didn't experience this kind of a surge on the commodity cost. That has also indirectly impacted. Though quarter on quarter, there has been 80 basis points improvement on the gross profit, but this has not really helped us on the operating leverage side. Your observation is right. Sure. Just as a follow-up, obviously we’ve talked at length about the commodity pressures and what the company can do. Given that there is a general inflation and there are challenges on employee costs, wages, diesel availability, gas availability, is there something that we need to keep in mind in your other expenses for next year? Do we need to keep something in mind whether this could be a year of extraordinary inflation or it will be a normal year and the only challenge is the raw material line which we need to monitor? We will also get challenges on the operating cost side also. Especially, there are few expenses like this transportation expense, which we incur towards the movement of the chassis from the plant to the selling point. There are certain expenses which are going to go up, which are entirely dependent on this fuel price. Similarly, there is also a lot of conversion which happens even on the raw material side, where we pay the conversion cost. Finally, we will also have to look at how this exchange is going to behave. Rupee, if it is going to weaken further, then that could also add up to the cost. These could be the possible costs which can get inside the other expenditure. Okay. That's good to know. Just lastly, if I can ask you. The last two, three years, you have been very judicious in taking price hikes. I think the industry in general has not tried to do a price war. Given the inflationary scenario and the uncertainty, is the industry still continuing to be judicious and disciplined or just some thoughts on that? I think the current situation should add to that discipline. Like I said, definitely there would be a challenge on the commodity cost side. Industry, to the extent possible, should use their judgment to see how much of it can be passed on to the market without affecting the demand. Generally speaking, yes, we are hoping that the industry should look at taking multiple price hikes during the year. Okay. Great. That's good to know, sir. Thank you. Thank you. The next question is from the line of Raghunandhan from Nuvama Research. Please go ahead. Congratulations, sir, on a strong FY 2026. A couple of questions. Firstly, within the MHCV, how do you see the demand for various subcategories? Which segments could outperform and underperform the overall market? Yeah, Raghu, thank you for the question. Like I said, so far, what we have seen as an impact of GST is more on the side of the ICV. ICV demand has grown more than the heavy-duty truck demand. That has created some kind of a mixed pressure on us. Like, heavy-duty trucks are more margin accretive. However, we do believe that that initial enthusiasm on the ICV side will start to moderate. The demand momentum on the heavy-duty truck side should start coming across now. With this, we have seen since February itself, heavy-duty trucks has gone through a good momentum since February, although first three months, larger fleet owners, they took time to adjust to the new system, especially the tax system. This year, we are thinking that the tipper segment and the multi-axle segment would be the fastest-growing segments, followed by a segment which we call tip trailer, which is part of the tractor-trailer, because tip trailers are generally used in the mines. Anything that is to connect with the mines or infrastructure projects or construction projects, I think they would show tremendous promise this year. While the tractor-trailer and in some routes of long haul, which is non-steel, non-cement, non-iron, may a little bit moderate. That is our view right now. A little bit moderation in ICV. Moderation when I say, it is not respect to last year, I say this respect to last six months. ICV and tractor long haul might moderate, but anything related to mine would show tremendous promise, is our view currently. Thank you, sir. That is very helpful. Also, if you can speak on LCV and Defence, how do you see the outlook? Specifically on Defence, how big is the pending order book? After a 20% growth in FY 2026, how do you see the prospects for FY 2027? Yeah, Raghu, like I explained, we had a fabulous FY 2026 in Defence, more than 20% growth. Revenues increased to INR 1,200 crore plus, including that of the subsidiary. Also the fact is that our order pipeline on Defence is strongest ever. Already it is above INR 1,500 crore, which are the orders in our hand, which are due for execution and supply. We also hope to receive many orders during the year also, right? On Defence, we are very sure that it is not just this year, but at least for the next two to three years, we will show very strong growth. Noted, sir. Thank you so much. How do you see the outlook for LCV? Sorry to interrupt, Mr. Raghunandhan, may we request you return to the question queue for a follow-up question? Sure. Thank you. Thank you. Participants, I request you to limit the questions to two per participant. The next question is from the line of Vipul Agrawal from HSBC. Please go ahead. Yeah, hi sir. Thank you for the opportunity. Just one question. On the market share side. Recently you have launched a new series of trucks, but at the same time, we have seen market share is largely stable or I would say slightly declined in last three to four years. How do you see the new portfolio launch helping in recovering or gaining some market share in future? Do we still have some white spaces in our portfolio which can be plugged in future to gain some more market share? Hey, Vipul. Thank you first of all. Maybe I'll ask our investor relations team to get in touch with you to clarify that we haven't lost market share in the last three, four years, but we have tremendously gained actually on the MHCV side, looking at FY 2022 as a base. FY 2023, FY 2024, FY 2025, FY 2026, four-year data if you look, there is a substantial increase in the MHCV market share. That we can discuss later. Right now, let me just tell you that we are very confident of the new product launches. I am not just saying because this is any other launch. I am saying because we have put in a lot of effort into these launches. One of the reasons we lost some market share in some limited segments was also that we were little bit kind of delayed in coming to the market with these higher horsepower tractor and tippers. Since we have these in our fold, and undoubtedly, I can tell you that these are the best in the industry right now in terms of power, torque, and mileage, reliability, et cetera. We would definitely see a positive impact in our market share or market penetration. Having said that, we have just started shipping these products. As far as last year is concerned, we just started shipping in February or March. There are only a few hundred units that we have shipped out until 31st March. You cannot see the impact in last year, but you would definitely see this impact starting quarter two. In quarter one also, the dispatches would not be to the full extent of the demand and because there is a certain lead time in ramping up the production of new products. You will see that impact definitely in especially two segments. One would be the tipper segment and the other would be our tractor-trailer segment. Thank you. The next question is from the line of Sridhar Kalyani from Antique Stock Broking Limited. Please go ahead. Thank you for the opportunity, sir. Just one follow-up question that I wanted to understand. For Defence, you mentioned that around INR 1,500 crore order book we have. This is like execution or anything on full annual revenues, if you could help us understand, INR 1,500 crore will be executing in the current year or it is split into two to three years? The way it happens is that different orders have different supply schedules. Right? None of the orders in Army or MOD, most of the orders cannot be fulfilled in just one year. Right? They have a longer supply schedule ranging between one to three years. The order book will not all be delivered in this year. However, as I said, there would be many new orders we'll receive during the year, which will also help us building the top line for the current year. One thing I can tell you that we have been delivering 20% growth in defence business over last few years, and at least that trend we hope to continue with. That is very helpful, sir. Just as you explained to us that segmentals MHCV, there might be some moderation over the next few months. How do you look at the ICV and LCV space? Do you see some moderation over there also in the coming quarters? Yeah. I just want to clarify that when I am saying about moderation, I am not comparing it with last year. I still believe our volumes will be higher than last year. Moderation when I am saying, I am referring to Q4 essentially. Because Q4, the industry went kind of berserk. All that GST effect started playing in all the segments, right? That is what my view is because LCV demand, I think, was up like 20%, 25% at an industry level in Q4. So when I say moderation, I mean moderation from those levels. Got it. Thank you so much. Some moderation would be seen in LCV and ICV and some pickup in demand, relative demand as from Q4 should be seen in the heavy-duty trucks. That is how we view it. Actually this will be helpful in terms of the mix as well because heavy-duty trucks is much more richer in terms of mix. Got it. Just one thing. In terms of geography, where do we see good substantial demand coming in from? Like it's geography specific, if you can just help us understand which regions are expected to do well compared to last year? I think it will be quite broad-based. If I were to pick on one or two specifically, I would say all the sectors related to mining and infrastructure would see the strongest demand this year. Mining, most of the mining is happening around Maharashtra, Odisha, Chhattisgarh, Jharkhand, West Bengal, et cetera. That part of the country I think will be strong because of mining. Also the other factor would be infrastructure and construction projects. These are quite broad-based, but you can figure out where the money is coming, which projects are running right now, or which new projects are coming. That is how we also plot our demand on the area-specific basis. Right. Got it. Thank you so much, sir. Thank you. Ladies and gentlemen, we take that as the last question of the day. Now I would like to hand the conference over to the management for closing comments. Thank you once again for your continued trust in us. We know there is a lot of noise in the market around various macroeconomic factors. I just want to once again tell you that the way we see the demand in CV industry, we think that there is a lot of resilience in the baseline demand. How much we will grow with respect to Q4 and Q3 and how much we will grow with respect to last year is something which remains to be seen. I think the sentiment is very positive, especially on the fleet owner side. They still have very ambitious plans to add fleets or replace fleets. The material cost situation is challenging. Like Balaji explained earlier in the call, we are looking at all avenues to see how we can neutralize it through price increases and also through cost savings. With that, I would like to close the call. Thank you very much once again for joining us. Thank you. On behalf of Spark Institutional Equities Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.