Ladies and gentlemen, good day and welcome to the Ashok Leyland Q1 FY 2027 earnings conference call. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Joseph George from IIFL Capital. Thank you and over to you. Mr. Joseph? Yes. Yes. Now you are audible. Please go ahead. Thank you, Ananya. Good evening, everyone. On behalf of IIFL Capital, I welcome you all to the Q 1 FY 2027 results conference call of Ashok Leyland. I also welcome the senior management of Ashok Leyland, Mr. Shenu Agarwal, Managing Director and CEO, Mr. K.M. Balaji, whole-time Director and CFO, and the investor relations team. Now I will hand over the call to Mr. Shenu Agarwal. Over to you, sir. Good evening, everyone, and thank you for your trust in Ashok Leyland as always. As we all have witnessed, Q1 this year was marked by various geopolitical uncertainties, translating into widespread challenges for the Indian automotive industry. The sequence of events that unfolded had put on test industry's execution capabilities and supply chain resilience, and also raised questions on the impact on customer sentiment and market demand. Ashok Leyland has been able to weather these volatilities well, and I am happy to report yet another quarter of strong financial performance for the company. For Q1 FY 2027, we achieved all-time high CV volume, revenue, profit, and cash surplus. Continuing from FY 2026 historic records, we could deliver broad-based growth across all our core businesses, demonstrating the resilience of our operations and the trust our supply chain partners and customers place in us. Q1 started with moderate CV industry volume growth due to fuel supply and pricing issues. However, it bounced back strongly in June once the situation stabilized. Overall in Q1, the domestic MHCV industry volume grew by 13% on year-over-year basis, while the domestic LCV Vahan industry grew by 17%. This is indeed a strong performance, especially given the headwinds faced during the period. This robust momentum demonstrates strong industry fundamentals and sustained growth potential of the Indian CV industry. Ashok Leyland domestic MHCV truck volume for the quarter was at 22,998 units, higher 15% year-over-year basis. Our bus volume declined in the same period, mainly in the STU segment, as the company decided not to take some unprofitable orders. In the medium-sized bus segment, which is about 2/3 of the total bus industry and is one of the company's focus areas for growth, we did better than the industry and increased our share. Overall, Ashok Leyland domestic MHCV market share stood at 29% for the period. Ashok Leyland domestic LCV offtake volume for quarter one was 18,874 units, higher 21% year-over-year. This is the highest ever Q1 volume recorded in LCV business. LCV Vahan market share for Q1 was 13.2%, with a gain of 30 basis points year-over-year. Our exports volume for the quarter was 2,461, lower 18% year-over-year. The war situation posed major logistical challenges in our Ras Al Khaimah-based plant in UAE, impacting our GCC volumes. SAARC and Africa volumes, however, grew substantially, negating the impact to some extent. With improving situation, we are confident of reviving the GCC volumes and make up for the losses in the remaining year. Our foray into ASEAN, in establishing it as our fourth home market outside India, is progressing quite well. Our overall CV volumes at 48,673 units is a new peak for quarter one. This includes defense vehicles. Our non-CV businesses maintained their growth streak and remained untouched by the recent global headwinds. Domestic aftermarket revenue for the. Ladies and gentlemen, the line for management has dropped. Please wait while we reconnect. Ladies and gentlemen, we have reconnected with management's line. Please continue. Yes. Thank you. Thank you. I will start from where I left. Overall, CV volumes at 48,673 units is a new peak for quarter one. This includes defense vehicles. Our non-CV businesses maintained their growth streak, remained untouched by the recent global headwinds. Domestic aftermarket revenue for the quarter was up 12.7% YoY. Revenue from Power Solutions Business was higher by 51% YoY. Revenue from defense business was higher 64% YoY. Defense order book and tender win pipeline remains ever strong. Coming to financial performance, Ashok Leyland achieved a record quarter one revenue at INR 9,634 crore, higher by 10% YoY. Despite record revenues, the EBITDA was flat at INR 970 crore as compared to same quarter last year. EBITDA margin was 10.1%, 100 basis points lower on YoY basis. We witnessed rising trends in the material cost owing to supply chain disruptions and commodity pressures. The company took several initiatives to address the situation, including better price realization, rigorous cost saving efforts, product and business mix improvement, and opportunity-based inventory buildup. These initiatives helped us in mitigating any significant gross margin contraction. As a percentage of revenue, the material cost stood at 71.5% for the quarter, higher by 90 basis points YoY, but in line with Q4. PBT for the quarter was at INR 830 crore, higher 4% YoY. Profit after tax was at INR 609 crore, higher 3% YoY. CapEx for the quarter was at INR 153 crore. New products, including future technology development, alternate powertrain technologies, and EVs, remain the focus areas for the new CapEx. Investments in subsidiaries in Q1 was at INR 10 crore. Our cash position net of debt has got stronger on YoY basis. We had net cash of INR 2,252 crore at the end of the quarter, an increase of more than INR 1,431 crore on YoY basis. While in the short run, we are taking aggressive measures to mitigate the impact of rising material costs, our long-term focus remains intact. We are resolutely pursuing the path of premiumization, working diligently on delighting our customers with superior products and services, and maintaining operational discipline. In terms of new products, the highlight of the quarter was introduction of the new air suspension technology in multi-axle trucks, which is an industry first and provides our customers industry best payload and TCO. This adds to our long list of innovations, which have always defined Ashok Leyland brand and its DNA for the last 78 years. We are also seeing very strong customer reception of our other recently launched range of trucks, the HIPPO Tractors and the TAURUS Tippers, with industry best power and torque. Our new product pipeline remains strong with many more launches slated for the rest of the year. Creating a new industry benchmark in service delivery remains our key focus. Our flagship program, Dhruv, is continuing to make progress with all our service processes now becoming automated and intelligent with deployment of AI and other digital tools. We continue to add more touch points. During the quarter, we added 33 touch points in our MHCV and LCV businesses. The focus of new additions continues in North and East region, where we have a higher headroom. At the end of the quarter, Ashok Leyland network has a total of 2,137 touch points, 1,177 for MHCV and 960 for LCV. Our EV subsidiary, Switch Mobility India, recently bagged an order of 650 electric buses. With this, Switch Mobility has a healthy order book of 2,100 e-buses. During the quarter, Switch Mobility delivered 225 electric buses and close to 300 electric Light Commercial Vehicles. Ohm Global Mobility, our e-MaaS subsidiary, improved operational fleet to over 1,900 e-buses with over 500 units added during the quarter. Ohm Global Mobility is progressing well towards its PAT breakeven target, which we hope to achieve in the near future. Hinduja Leyland Finance, our vehicle financing subsidiary, delivered robust growth in the quarter, with its AUM expanding by 20% year-on-year to INR 60,310 crores. Pre-provisioning operating profit increased by 56% to INR 587 crore from INR 376 crores in June 2025, while PAT grew by 37% to INR 123 crore from INR 89 crore last year. Hinduja Housing Finance similarly saw its AUM grow by 13% YoY to INR 16,157 crores. Total gross income of INR 470 crore, pre-provisioning operating profit of INR 136 crore, and a PAT of INR 69 crore. PAT was at the same level as last year. Both HLF and HHF maintain healthy asset quality with consolidated net NPAs at 2.1% on book basis. Delivering solid profitability alongside prudent risk management augurs well for future growth of both the financial companies. Reverse merger of HLF with NDL Ventures is progressing as per plan. NDL Ventures Limited and Hinduja Leyland Finance Limited have received the requisite approvals from their equity shareholders and unsecured creditors. The entities will now approach the National Company Law Tribunal for the requisite approvals, and upon receipt, will proceed with the merger and the listing process. ESG commitments remain close to our heart. Our Road to School and Road to Livelihood programs continue to grow, extending their reach to about 6.4 lakh students now. In our commitment towards RE100, we achieved 77% RE status with Tamil Nadu plants now at 91%. In summary, Q1 performance corroborates to our commitment to sustainable and profitable growth. Our business and financial results clearly demonstrate that our processes and management systems are robust and resilient enough to absorb any external shocks, enabling us to maintain focus on future value creation. In the recently concluded Monetary Policy Committee meeting, Reserve Bank of India, while maintaining a neutral stance and retaining key interest rates, has revised GDP growth outlook for the year to 6.7%. This indicates that macros are getting favorable. Looking forward, we believe that the overall demand drivers for commercial vehicles remain positive. We remain mindful of the key risks, particularly the elevated commodity prices, but shall continue to put all efforts to achieve better price realization and mix, higher cost savings, and enhanced operational discipline. Our foundations remain strong. We will keep innovating, attuned to our customers' needs while maintaining focus on prudent fiscal management. We will navigate the road ahead with even more rigor and heightened focus on creating long-term value for our stakeholders. Thank you once again for your continued trust in Ashok Leyland. Can I now hand it over to the operator? Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Gunjan Prithyani from Bank of America. Please go ahead. Yeah. Hi. Thanks for taking my questions. My first question is just to get a little bit better color on the margin delivery for this quarter. It is a commendable gross margin delivery. Just trying to get some more information on what was the sort of gross RM headwind that we saw in this quarter. How were we able to offset this through price hikes? Some color on price hikes taken, and maybe also some sense on how do we think about the next quarter. Like you pointed out, there are more elevated cost headwinds, right? So what is the sort of pending RM impact yet to reflect in quarter two? Yeah. Thank you. Thanks for your question, Gunjan. Actually, we faced increase in the commodity prices in this quarter. The increase was there, but one good thing that has happened in this quarter is that we could consume most of the item from our opening inventory. We had maintained considerable inventory, both in terms of production inventory as well as in terms of the finished inventory. So we could use about 1/5 to 1/4 of the total requirements in this quarter from the opening thing. What that has done is, that has prevented us from charging the commodity cost increases that have happened during the quarter. Only the 4/5 of the total costs that have been incurred during the quarter has got into the P&L, in the sense that the value of these increases have got added to the stock. When these vehicles get sold subsequently, from the opening inventory, we will get the benefit, and the charge will also flow as and when the production from the current year gets sold more and more when it gets sold in the subsequent quarters. This has really helped us in reducing the cost. The benefit of that is also what we are seeing by way of better gross margin and the lower material cost. This also, adding to this metal cost increases, the overheads also will have to be added for the stock, for the vehicles which are in stock. For us, we carried about 6,000 vehicles at the opening level. Again, this 6,000 level of stock at the opening level, it got increased to 8,000 level as at the quarter end. This also helped us because many of the overheads that have been incurred during the quarter have also been added to the increased inventory. So we got a good benefit from the inventurization, which has got added to the cost of stock, and not to the P&L. These costs will find its way to the P&L as and when the vehicles get sold in the coming months. Gunjan, just to add to that. That was one. The other was also, we accelerated some of the cost savings. We had started a project a couple of quarters back, which we internally call Achieve 2K. That project is now delivering some benefits, but it will deliver many more significant benefits in the upcoming quarters. Then also, the focus was on improving the mix from the product side, also from the business side. We also took some pricing actions. As a result of that, we could negate, I would say, most of the impact coming from the commodity side. In addition to that, Gunjan, we also took a price increase. Price increase during the quarter was about 1.2%-1.25%. That also helped us in negating the commodity cost increases. In a way, I can say that the commodity cost increase got negated 50% by way of the price increases and another 50% by way of the benefit from the cost savings as well as the inventurization impact. How do we think about next quarter then? Because we were able to have inventory which was at the lower cost, does it mean that Q2, we see a sharper hit? This is a very useful call, but just trying to think how does Q2 look in context of incremental cost yet to hit the P&L and pricing action, cost reduction. Should we be able to neutralize the impact heading into quarter two? Ladies and gentlemen, the line for the management has been disconnected. Please wait while we reconnect. Ladies and gentlemen, we have the management line back with us. Please continue with your questions. Actually, I was answering Gunjan's question. Gunjan was asking whether the impact of that will be felt in the subsequent quarters. The impact will be there in the subsequent quarters, but will not be felt in a big way. It depends on the quantum of the vehicles which are getting sold, and it will not be very significant. Yeah, just to add on that. The challenges we see continuing on the commodity price side. The respite from that, we think will come in Q3 and Q4 only. It will be a challenging quarter, but we are accelerating a few things internally, looking again at those levers that I just described. Product mix and business mix, pricing, we have again taken some price increase from July. We are considering some more before the quarter is over. Also, we are looking at accelerating some cost savings. Okay. My second question is on the investments bit. The Switch bit is a bit clear that there is a debt repayment. The Optare bit, sorry. This housing finances bit, it will be good to hear your rationale because I thought we are demerging the finance entity, and they were to be on their own in terms of funding the growth. This incremental investment in the housing finance, if you can give some sense how to think about it. Yeah. I would like to clarify to everybody who are present in this call. On Optare, as you rightly said, I have been indicating this literally in every call. In Q4 FY 2025 call I indicated, and in Q4 FY 2026 call also I indicated. We had debt of about $80 million. We paid about $30 million last year, and now we have about $50 million debt which is there, and we do not want to incur interest cost unnecessarily. Now we are trying to pay another $25 million by this year, and we will pay another $25 million by next year. That is the plan. I want everybody to have clarity on this. This is not something new I have spoken about this in the last two years, and I have been progressively repaying this loan. This is nothing new. This is not a surprise at all. The second aspect which you said on the HHF. The HLF, it is an investment. It is a growth capital which we are giving. The merger is in progress as far as HLF is concerned, and the capital structure of HLF cannot be disturbed at this point of time. So we thought that this HHF growth will be quite good and the AUM of this housing finance, it is growing at about 34% CAGR in the last four years. The growth trajectory has been quite good and the net worth growth is about 24%. So we thought that we will invest and the valuation also will be at arm's length and it is done by an independent valuer. We thought that we'll invest some money in the housing finance because we cannot also disturb by way of investment since the approval from the National Company Law Tribunal is at an advanced stage now. Okay, got it. That is clear. I'll join back the queue. Thank you. Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Thanks for the opportunity. Just carrying on the earlier question, just on your comment on future gross margins. Did you say Q2 is challenging? I couldn't sort of capture what were you trying to convey. Is the incremental gross margin hit manageable or it comes in second half? Just to sort of be clear on that. Binay, thanks for your question. You are asking about this inventorization bit, or you want to understand the overall margin outlook for Q2? Just overall the gross margin outlook. Looking at the commodity pressure that you see today, do you think you will be able to sustain this pressure, this margin level? Yeah. Listen, there would be few things we have to keep in mind while looking at quarter two gross margin. One thing I clearly said that the commodity pricing would continue to pose a challenge. Which means that the impact purely from the commodity side may be a little bit higher than what we faced in Q1. Okay, and this situation will only improve, what is our current estimate is from Q3 and largely from Q4. Okay, but there should be some turnaround in the situation starting Q3. So that is one. Now, how much we can manage this is basically two or three factors. One is that our focus now has turned into more profitable segments, which is higher horsepower segments. In my note, I described that TAURUS and HIPPO that we had launched are gaining a lot of momentum. These are high horsepower, heavy duty trucks where margin equation is better. Also we have just launched these air suspension trucks. We had lost some margin and market share in quarter 1 on the multi-axle trucks. But now with air suspension trucks, we hope that we will more than recover that. Right? Also we are trying to see, as in Q1 you have noticed that Power Solutions Business, defense business, LCV business, their growth rates were much higher. Similarly, we are trying to see that how much orders from defense, PSB, et cetera, we can execute. Like I said, we have already taken a small price increase from July 1, and we are trying to get one more before the end of the quarter. Right? I cannot at this time tell you exactly what the situation would be on gross margin. But yeah, you keep two things in mind, that commodity costs will be even higher than Q1. But we have a few levers at our hand to work around that. Okay, thanks. That is helpful. My second question is on the truck mix. We talked about it earlier also, that we've been seeing ICV growth has been higher than heavy truck growth, and we were expecting sort of some reversal in trends. So how do you see rest of the year truck mix to play out? Yeah. So far ICV growth has been higher because earlier, like in the previous calls we explained, after GST recalibration happened, the maximum impact or the early impact was supposed to be on vehicles which are mostly going into non-fleets, into retail market because those buyers would see this impact immediately in terms of pricing. For other buyers like fleet owners or users of heavy duty trucks, this will happen with a delay. So every quarter we are now seeing that the situation is improving. I think, in Q2, the situation should actually drastically improve, both at the industry level and more so at Ashok Leyland level. Now since we have fully ramped up our HIPPO and TAURUS, and now we have these air suspension on the MAV side also. I'm saying industry level should also improve, but I'm saying we should be able to improve even more. Thanks. And lastly, any just comment on domestic truck growth that you expect this year? Domestic truck? Yeah. Sorry, what? About domestic trend? The volume growth outlook. The volume outlook. Oh, yeah. Quarter one has gone pretty well, and that was despite a bad May. May growth was only, I think, 1% or 2% in MHCV, but June then bounced back very sharply. Like I said in my note, we have never seen this happening in the CV industry, actually. Because whenever there is an external factor which is affecting the sentiment, it takes a lot of time for the industry to recover from this. But here, in this case, as soon as the situation stabilized towards end of May, we saw that huge momentum coming back in June. June industry grew by more than 20%. That momentum continued in July, because July MHCV industry growth was also more than 20%. August, the sentiment is looking also quite positive. So definitely, against a 13%, 14% growth in Q1, the growth should be much better in Q2. Great. Thanks, team. Thanks for the detailed response. Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead. Yeah. Thanks a lot for the opportunity, sir. My first question is clarification on the commodity outlook what you gave, that from 3Q, you see a bit of a softening. I just want to understand what is driving that visibility, sir, because generally what we understand is steel prices are elevated, natural rubber is hitting new highs, which are our two biggest cost items. So just want to understand what is the visibility you are having and what kind of inputs which is driving that assessment, sir. Yeah, Pramod. So basically, we rely on a lot of factors. We talk to the suppliers. We look at various credible reports, SIAM report, CRISIL report, other reports. So based on that, current estimate is that quarter two will be the peak. Quarter three, there should be some softening. Of course, you are right about natural rubber, et cetera. But quarter three, overall, I'm talking, there should be some level of softening, and then quarter four, we should see some kind of a turnaround. So based on several factors, we can maybe separately talk about these in detail later. Sure, sir. The question now is on the price hike, sir. Can you quantify the price hike what you have taken so far in this quarter? In July, we have taken on the MHCV side, we have taken more than 1% in July. On LCV side, we have taken more than 2% in July. As I said, we are trying to see if either through price increases or through discount optimization, we can improve price realization even beyond this. Okay. Finally, on the other cost. Balaji, sir. Yeah. Cumulatively now, you would have taken about 2.25% price increase for MHCV and more than 3.5% for light commercial vehicles from the beginning of this financial year. Beginning of this financial year. That's helpful. On the other cost elements, Balaji, on your other employee costs, other expenditure, how should we see the trend going forward? Because that will be the additional bit which we need to watch out for when we talk about margins. Another follow-up to Shenu sir, given the current momentum in the first four, five months, would you say that the industry is on track to achieve double-digit growth, sir, from now on a full year basis? Thank you. On the cost side, actually, you will see a marginal increase in the manpower cost because our increment cycle, it starts from July of every financial year. So you will see a marginal 4%, 5% increase in the manpower cost over the previous quarter. As far as the rest of the costs are concerned, we would like to contain and then operate at the current levels, or maybe we will target to operate at the lower levels, because we have started many programs internally to monitor the cost, especially now on the administration overhead side. We have created a centralized team to monitor, to do the commercial negotiations, and bring down the cost. The administration overhead cost, which was erstwhile decentralized and was decided at the various parts of the country now, any amount which is beyond INR 50 lakhs, it gets referred to a centralized cell, which monitors and then reduces the cost by way of commercial negotiation. So you will see, and you can expect a tighter control on the costs in the coming quarters also. Yeah, Pramod, on the industry outlook, we have a good visibility. I think we are very confident the industry will grow, will continue its current momentum until about, let us say, September or October. Beyond that, there was kind of a high base of last year that we will face, because the industry started growing by about 20%, 21% starting October, November last year. Therefore, I want to be a little bit conservative when I am estimating industry momentum beyond October. But overall, I would say- Ladies and gentlemen, the line for the management has dropped again. Please wait while we reconnect. Ladies and gentlemen, we have the management back online with us. Please continue with your questions. Sorry about this interruption happening again and again because of some technical glitch. But Pramod, what I was telling you about the industry is that even if you take a conservative outlook for the second half of the year, let us say October, November onwards, we still believe that industry has potential to grow by high single digit. This is for MHCV. And for LCV outlook is actually slightly better than this. Yeah. So that is what we are estimating now. Best of luck, sir. Thank you. Thank you. The next question is from the line of Amit Hiranandani from PhillipCapital. Please go ahead. Yeah, thanks for the opportunity. Sir, this LCV market share, since last five, six years, has been broadly stable and hovering around 11%. We understand that the competitive intensity is pretty tough. Can you please highlight the company's plans and steps taken to improve the share here? Yeah. Two things, Amit, that I want to say. Firstly, historically, since we launched LCV products about 10, 12, 13 years ago, we had only been talking about our market share in 2 ton-3.5 ton, because that is where we had products. Now, we changed this view about a year back, when we had introduced this product called SAATHI, which is actually in 2 ton-3.5 ton, but is targeting the premium end of the sub-2-ton customers. We said that, okay, let us not look at just 2 ton-3.5 ton, but look at the entire LCV market, and that is how we shifted to vehicle market share. Now, if you look at vehicle market share, as far as I remember, I think, each quarter of the last year, and even in quarter one, we have gained continuously quarter-on-quarter. Right? So now, the whole outlook of LCV has now changed within Ashok Leyland. We don't want us to be restricted in our thinking to 2 ton-3.5 ton. We want to come up with products across the LCV range because we know that we are participating only in 50% of industry and there is a huge headroom if we come up with additional products. There are some products in pipeline, which of course I cannot reveal right now just because of confidentiality reasons. But there are some product pipeline and the whole notion now at Ashok Leyland, on the LCV market is to see what we can do in the entire market rather than restricting ourselves to half of the market. Right. Sir, secondly, on the buses side, we have been observing. Sorry to interrupt. Sorry to interrupt. Mr. Amit, could you please get in the queue for any follow-up questions? Sure. Thank you. Ladies and gentlemen, in order for the management to address questions from all participants in the conference, please limit your questions to one per participant. I repeat. Please limit your questions to one per participant. The next question is from the line of Raghunandhan N L from Nuvama Asset Management. Please go ahead. Good evening, Shenu sir and Balaji sir. Sir, there has been a very strong growth from June. The recovery has continued to July and as you said, to August. What are the drivers here? Is it better freight availability, infrastructure spending, replacement demand? How is the demand from large, medium, small operators? Raghu. Thank you for that question. You are right. We were ourselves a little bit surprised when there was such a huge turnaround from May to June. I mean, bounce back, I would say. As you know, April was roughly 12%, 13% industry growth on MHCVs and May was 1% or 2% and June was above 20%. It continued in July and I am hoping it will continue in August as well. But the triggers or the drivers are very clear now. We have always been saying that the CV industry is sitting on a huge potential, largely because of the replacement demand that can generate, the aging of the fleet and all those things we spoke about. I think it was just waiting for a trigger, which happened with GST 2.0 or GST optimization. Since then we have really seen very high growth numbers now, which is a clear indication that the TCO or the economics of buying a BS6 truck versus operating a BS3 or a BS4 has really gotten much stronger. So that trigger I think was needed and that trigger has happened. It should continue actually for many more quarters to come because it will take a few years to actually bring down or to, let us say, to take out all the BS2, BS3, BS4 trucks out of the equation. That is the primary reason of this significant growth. But yes, other factors are also helping. The interest rate, the availability of finance, the uptick in the infrastructure segment, et cetera. Everything is contributing to this. Thank you for highlighting that, sir. On the replacement demand side, trying to get a little more thought. Fleet age being high at 10 years is one of the drivers of replacement demand. How much should be the ideal average fleet age based on. Sorry to interrupt. Could you please get back in the queue for any follow-up questions? Sure. Thank you, sir. Wishing all the best. Reminder for all participants, please limit your questions to one per participant. Thank you. The next question is from the line of Harshit Mittal from JP Morgan. Please go ahead. Mr. Harshit, you have been unmuted. Please go ahead. We will move on the next participant. Next question is from the line of Kapil Singh from Nomura. Please go ahead. Hello. Good evening, sir. This is Kapil from Nomura. If you could just talk about the export outlook, and also share the CapEx and investment outlook for the full year FY 2027. Yeah, Kapil. Thank you for those items. Export, like I described in my opening statement, we had a tough time in quarter one, but we believe that it is already behind us now. Basically, what happened was that we have a facility in Ras Al Khaimah in U.A.E., where we assemble all our products for the GCC markets. That facility had to almost stop working in April and some parts of May. We had both the kinds of problems, the labor problem and also the material problem. Basically, local components that we procured from countries around. We had to pretty much kind of shut down the operations. Since then, the situation has stabilized now. Now the factory is Last month we did 600 units there. This month we are expecting to do 700, and next month we will come to our peak production of 800. The factory has a capacity of only 600, but we were running it at, say, 800 with some temporary arrangements. We are hoping to get it back to 800. Fortunately, we have not lost any retails there in the GCC segment, so it is basically reduction of wholesale and reduction of stocks at every point, which is reflecting in our Q1 de-growth in exports. Fortunately, again, that SAARC and Africa we could really pull up. If you look at our growth rates in those regions, it is really quite high. It is actually in the range of 40%-60% growth year-on-year. GCC, like I said, seems to be something that we can recover the wholesale losses because there have been not any significant losses on the retail side. As soon as the plant is up and coming, we will start pumping the units back into dealer stock. Also we are now expediting our new plant in Saudi. Originally the plan was to have it up and running in about 18-24 months. We are trying to see how much we can accelerate that, because the demand momentum in GCC is still very strong despite all the volatilities we have seen. The other question, I think, was on the CapEx and investments. We have increased our CapEx investment outlay in last couple of years. We were generally doing about INR 400 crore-INR 500 crore, and in last two years, we are in the range of INR 900 crore-INR 1,000 crore. As company has more cash available to invest in its future growth, we would be looking at various new technologies, new products, white spaces where we are not there. Actually, from a CapEx point of view, this is a good time for us because as we can think of those differentiated products and white spaces that we want to cover in future, then that will actually help us lay down a good growth path for the company in the next five years or so. CapEx will continue to increase over next two to three years. We can give you some more specific numbers once we have the whole plan ready. Operator. Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs India. Please go ahead. Hi. Good evening, and thank you for taking my questions. My question is on the regulatory outlook for the CV industry over the next one to two years. It looks like from next year onwards, there might be mandatory mechanized load covers, audiovisual alerts, sort of advanced braking norms. I just want to understand what the potential increase in price might have to be if these were all to come through. Just related to that, if you could give us some color on how the negotiations are going between the government and the industry body on possible BS7 at some point over the next two or three years. Thank you. Yeah, Chandramouli, thank you for that question. You know that regulatory burden on the CV industry has been very high compared to other auto industries. But yeah, we are very used to this, and the whole idea is to see how we can comply with the regulations but also create some value for the customer. So that is a whole challenge. Now, it may happen with a slight lag, et cetera, but I think most of the companies, including our peers, will try to create that value for the customer, which means that there has to be a positive TCO impact even if the prices go up. I think Indian consumer of CVs, especially the fleet owners, have also now changed quite a bit in last five years or so. So they are increasingly looking at value rather than only price. Because if they get a TCO benefit, even by paying a little bit more, we see that they lap onto it. We saw this recently when AC was mandated. Everybody had a different view in this industry, but as soon as AC was mandated, people just lapped onto it. I told you, I think in the last call, that we had created a stock of non-AC trucks that we thought that a lot of customers would ask for it because they do not want to go for AC and the associated price increase of INR 30,000 - INR 50,000. Right? But to our surprise, we had really difficulty in liquidating that non-AC stock later. So I think the market is changing. The challenge, of course, remains of the regulatory-related cost increases, but the idea is how we can make it relevant for the customer by impacting the TCO positively. So we are working on those issues. On BS6, of course, the final notification is yet to come. It will take some more time, but discussions are going on. My personal opinion is, BS7 we should not see in India in CV before 2031, and it could also be 2032. Got it. That is helpful. Thank you very much, and all the best. Thank you. The next question is from the line of Yash Agrawal from Nirmal Bang Securities. Please go ahead. Hi, sir. Thank you for the opportunity. As we have seen that we have made significant progress in diversifying from our core truck business through defense, power solution, aftermarket, EVs. I just wanted to understand how we see mix evolving in next three to five years. Ladies and gentlemen, sorry to interrupt. Ladies and gentlemen, the line for the management has dropped again. Please wait while we reconnect. Ladies and gentlemen, we have the management back online with us. Please continue with your question. Hi, sir. Thank you for the opportunity. I just wanted to get an update on, Ashok Leyland has made significant progress in diversifying beyond its core truck business through defense, power solution, aftermarket, and EVs. Where do you see this mix evolving over the next three to five years? How is the margin profile for these businesses versus truck business? Oh, very good question, actually. I say good because that is one of our key focus areas, key strategies at Ashok Leyland, without losing focus on our core, for sure, how we can enhance our other businesses. Because those businesses offer better margin opportunity. Also, they have a huge headroom available. For example, defense is like we can do a lot there. There has been a plan which has been put together on each of these, aftermarket, EVs, IO, defense, power solutions. These plans are very aggressive. The first milestone that we want to achieve is to make sure that we have enough non-MHCV domestic business which can take care of the complete fixed cost of the company. You know that we have made huge improvement there. If you look at three or four years ago, we had to sell about 6,000 to 7,000 units per month of MHCV trucks in domestic market to take care of the fixed cost of the company. Now, of course, we have reduced the fixed cost as a percentage, but also the fact is we have grown the non-MHCV domestic business. Now that break-even point, measured as the number of units of MHCV trucks we have to sell domestically to take care of the fixed cost, has come down to, I believe, something around 1,000 units- 1,500 units. Right? We have made a lot of progress with this diversification. Importantly, this milestone is important because some of us believe that MHCV industry, domestic industry is cyclical in nature, and therefore we want to reduce that dependency on it. Right? Even if it goes down, then we don't get hit as a company, and we can still pursue our long-term value creation. So yeah, that is the first milestone, but of course, we want to do much more than this on the non-MHCV businesses. What share you indicated 1,000 units - 1,500 units is on a per month basis. Okay. Yeah. One thing you mentioned in the starting of the call that you added 33 touchpoints during Q1. In previous calls, you have mentioned on focusing on increasing touchpoints in non-South regions. How has our share evolved in non-South versus South in last few years? Oh, we have done very good progress. I would say in some of the zones, like north, we have done good progress. If you look at our north market share, I do not remember the exact time, but probably four years ago or five years ago, then North, we were at 15% or so. Just giving you ballpark numbers. Now we should be touching 30% anytime. We are already at 27% or so in North. Right? Similarly, we have made progress in central. East is something we had made quite a bit of progress, but then we had some new issues that popped up. But east, we need to do a little bit more work now going forward. But the formula for North, Center, and East is quite clear in our mind now. Okay, sir. Thank you. I will get back to the queue. Thank you. Thank you. The next question is from the line of Mukesh Saraf from Avendus Spark. Please go ahead. Yes, sir. Good evening, and thank you for the opportunity. My question is on the competitor intensity in the MAV segment. We notice competition launching certain products with higher payload, and then Ashok Leyland further launching products with air suspension, which enhances payload even further. The question here is there a heightened competitor intensity right now in the MAV segment? Is this a precursor to probably some discounting? Or you don't think that's the case, and this is just regular kind of product updates? Yeah. Thank you, Mukesh. Very good question, actually, because it just kind of is in line with our theory at Ashok Leyland of premiumization. Just looking at what was launched in the market three months or four months ago. Yeah In confidence, I can tell you that we had looked at this kind of a product about three years ago, and we decided not to launch it. Right? Because it had certain issues with the way it was designed or it ought to be designed. Therefore, at that time, when we rejected this idea, we said, "Okay, what is a better engineering way to give the same thing to the customer or even better thing to the customer, but is designed in a proper way?" So that is when we had started this air suspension project. This is not a quick response from our side. This project was started about two and a half, three years ago. Now, fortunately, when this launch happened, we were quite ready with this new product. You can see the difference. If you understand a little bit about this, what got launched and what is what we have launched, then there is. Right Significantly different, better engineered solution. The payload also is twice. It is like we are offering 4 ton extra payload as against 2 ton. This is what actually we want to do in our company. We want to give the right solution, not a shortcut solution, but the right solution to the customer, which really improves customer TCO. Air suspension is a brilliant example of that. It is not that air suspension cannot be done by others. I think in six months or 12 months then somebody else will also bring it. The fact is, this is the first time in India. The fact is, customers are loving this option. The fact is that if we continue to keep our innovation pipeline robust, then we might come up with some more innovations in next few quarters. Right. Understood. Thank you. Thanks for that again. Thank you. The next question is from the line of Himanshu Singh from Baroda BNP Paribas Mutual Fund. Please go ahead. Yeah. Hi. Thank you for the opportunity. Sir, just wanted to understand, was there any issues on production for the buses side, and has that been resolved? No, there was no issue on the production side. If you look at the bus market, I am just simplifying it for right now. The bus market is in two parts. One is the bigger buses, or let us say heavy-duty buses, which is one-third of the market, and then there are medium-sized buses, which is 2/3 of the market. Historically, if you see, in the heavy-duty buses, we had a market share always of 60%-80%. On the smaller buses, we had a market share of only 15% or so, until a few years back. So two things we were very clear in mind that we wanted to increase our market share in the 2/3 of this bus industry, which is the medium-sized vehicles, which is for school and staff. And also we want to make sure that we are not losing money on the heavy-duty side, because heavy-duty side is also tender business. Now we are very clear how we want to approach this bus business. On the heavy-duty side, if there is an unprofitable tender, we are very clear we will not take it, even if we lose little bit of market share temporarily. But in the 2/3 of the industry, which is private, which is not tender, which is mostly school and staff, that is where we are focusing with lot of new products, lot of new improvements. And very happy to say that our market share in last three, four years have gone from 15% to close to 25% now in that medium bus segment. So I think directionally, we are on the right track. But yes, quarter one, we had to face loss of market share because we decided not to participate in some unprofitable tenders on the heavy-duty bus side. Okay. Thank you so much. Thank you. That was the last question for today. I now hand over to the management for closing remarks. Over to you. I would just like to say thank you to everyone who participated today in the call. As I said, we have a dichotomy of a situation right now. While on the top-line side, on industry side, we know that the industry's momentum is very strong, and we would like to capture that for Ashok Leyland as much as we can. On the other side, we have a situation on raw material commodity prices, which I do believe is temporary, and it should subside in the next few quarters. But in the meanwhile, we will keep our long-term focus. We will not let it dilute because of the commodity pressure. But at the same time, we will keep a very heightened operational discipline, whether it is in terms of cost or is in terms of any savings or mix improvement, pricing, et cetera. We hope to see you again at end of quarter two. Thank you. Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.