Good morning, ladies and gentlemen, and welcome to the Bajaj Auto's conference call to discuss the fourth quarter and fiscal year 2022 financial results. We have with us Mr. Rakesh Sharma, Executive Director, Mr. Dinesh Thapar, Chief Financial Officer, and Mr. Anand Newar, Division Manager, Investor Relations. My name is Rutuja, and I will be your coordinator. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to the management for their opening remarks. Thank you, and over to you. Good morning, ladies and gentlemen. This is Rakesh Sharma here. Thank you for taking the time to join us for the call today. We announced our Q4 and annual results last evening. I'm sure by now you would have gone through the details and may have questions. After a brief opening remark, we can move to the Q&A. Foremost, let me introduce our Chief Financial Officer, Dinesh Thapar. Many of you may probably know of him or know him. Dinesh has joined us from Reliance Retail, where he was the Group CFO. Prior to that, Dinesh spent a couple of decades with Hindustan Unilever Limited, where he held a range of leadership roles across corporate finance, business finance, investor relations, supply chain, and even in managing JVs. We are really delighted that Dinesh has come on board, Bajaj Auto's top team, and I'm sure you all will enjoy your engagements with Dinesh. Thank you, Rakesh. Good morning, everyone, and it's an absolute pleasure to be here on the first earnings call. I've been into the business now for about six weeks and really coming on board, and I look forward to engaging with you offline in the months ahead. Thanks, and absolutely look forward. Thanks. Rakesh, b ack to you. Okay, great. Let me begin with the highlights of our core performance since we have regular interactions every quarter and refraining from going into a commentary of the full year and preferring to remain with the most recent events. Overall performance in Q4 was a reasonably strong one, given the backdrop of weak and domestic demand, rising costs and supply chain distributions. Amidst this, we reported our second highest quarterly as well as annual profit. Fundamentally, I would like to attribute this to the inherently robust business structure of Bajaj Auto, which is a business spread across segments like entry-level commuters, three-wheelers, CNG three-wheelers, KTM, high-end bikes, and across geographies, you know, India and of course overseas, in all the emerging regions of the world. This structure in itself is risk mitigating. It ensures resilience and supports us to ride out volatility. Now, let me talk about each of the business units. Exports remained strong and steady. Almost each month of FY 2022, the volume performance was over 200,000 units, delivering an all-time annual record of 2.5 million units export, as well as a revenue of just over $2 billion. I would like to call out a few of the highlights, which are leading indicators of a continued performance at this level. We grew our market share by about 2 percentage points in the whole year in all the regions. Latin, Africa, South Asia, and Middle East and ASEAN all witnessed a 2 percentage point improvement in market share. Over 80%, in fact, close to 85% of our revenue continues to come from markets where we are holding number one or number two positions. This is a very important point because it gives, you know, it's a leading indicator, about how we will be able to continue to harvest the return, post-pandemic return in each of these markets. The share of our sports brands, Pulsar and Dominar, has continued to increase quarter-on-quarter and is at its highest now. We have a large audience from Dominar for Dominar from Latin, Europe and Asia. With Dominar, we are securing leadership positions in the quarter-liter class in many countries. This is instrumental in strengthening the prestige of the Bajaj corporate brand and bodes very well for our channel partners. I must add here that supply chain issues in quarter four compromised the performance even in export. Otherwise, it should have been better by at least 5% or so. In motorcycle business, in domestic, the overall demand situation remained weak. As per VAHAN, we estimated decline in registrations of motorcycles was 12% for the industry over quarter four of last year. This decline was visible across all segments. In fact, FY 2022 has been the lowest year for the two-wheeler industry in a decade. For sure, this is signaling two things. The two-wheeler customer, representing the relatively weaker section of the society, has not recovered from the economic hardships. The cost increases on account of input and other regulatory requirements continue to retard the demand recovery. Bajaj Auto, however, fared slightly better than industry and declined less than the industry decline, resulting in gain in retail market shares from 18% in FY 2021 to about 20% in FY 2022. These numbers I'm quoting are from VAHAN registrations. We can confirm that our products, new product introductions, which I've been talking about in the previous quarter, been very well accepted. The Pulsar 250 twins, the [NSX], have had an outstanding reception, enabling us to gain share in the said sub-segments and indeed in expanding the segment itself. With the CT 110, we made a play for improving the quality of our portfolio in the entry commuter segment, and it is showing very good resilience despite price increases. It asserts a unique position based on its style and design. This has bolstered our profitability in that segment. In the middle segment, the NS125, which is the most expensive 125 cc in its segment, almost 22% more expensive than the average 125 cc bike. It is doing extremely well. It is today 45% of our 125 cc portfolio with a big thumbs up from the youthful buyer. Almost 60% of its buyers are below 25 years of age. I would also like to call out in the motorcycle business unit, the completion of a two-year project with our dealership, which has put in place a robust system of measuring customer experience and using dynamic feedback to improve it in the moment as well as structurally. Over 1,000 dealerships of motorcycles and three-wheelers have been covered by the NPS system, and these have done a lot to improve the customer experience at our showrooms and service centers. We will be building on this initiative in the months to come to redefine our processes and indeed to lift our culture in the showrooms and service centers and make it more customer-friendly. For the three-wheeler business, the domestic three-wheeler business continued to see improvement as economic activities returned to normalcy. In retail terms, we sold over 52,000 units in the quarter, an improvement of 15% over quarter four, FY 2021. This brings our retail market share close to 70%, which is our highest ever. We have overall leadership. We are now leaders in every segment, in passenger and cargo, large format and small format, CNG and otherwise. The current cost economics of CNG versus diesel, the government's focus on increasing the CNG penetration, and Bajaj being a highly preferred choice of CNG leads us to expect to outperform the industry through this natural transition. Our market share in the CNG segment, inclusive of passenger and cargo, is now 77%. The CNG segment itself has moved from 24% of the industry in FY 2021 to 62% in quarter four, FY 2022. It just tells you which way the three-wheeler industry is moving. [I'm thinking] support of the f inance has been a key enabler for the outperformance of this business unit. EVs, electric two-wheelers, we have sold over 3,300 units during the quarter and have an order book of over 15,000 units. We've also added another 12 cities during the quarter, including cities like Delhi, Mumbai, Surat, and that's bringing the overall count to 20 cities. I just want to take a moment and reemphasize our near-term plans and the emphasis of these plans. For EVs, we prioritize certainty and safety over speed. EV is a nascent segment, and we are keen to see the responsible development of this category. It's a great opportunity for Bajaj Auto at a global level, and we are very optimistic about its growth. However, we believe we are in the build phase, which precedes the scale phase. In this build phase, we have three objectives. Foremost, build a dependable brand on the basis of product performance and customer experience, inclusive of high quality service support. Build deep capabilities in R&D, manufacturing, supply chain, and customer experience. Finally, build a portfolio of products across personal and business, low speed and high speed, two-wheelers and three-wheelers, fixed battery and swappable battery systems. We expect that in the next 18 months or so, we will be guided by building capabilities, which hopefully will keep us in good stead to scale up and aspire for leadership, not just in India, but globally. We will be launching our electric three-wheeler in a limited way by the end of this quarter, probably in June. A word about our financial performance. It was a good quarter. We delivered an EBITDA of 17.5%. This is our calculations. The underlying [audio distortion] call out was 16.8, the net of one-time accruals like, Maharashtra government incentives. Even this is 120 basis points higher than the other quarter three. There were multiple factors that drove this improvement. Foremost was a mix of the business units in favor of export. The export constituted 60% of our volumes in quarter four, compared to 55% in quarter three and EBITDA. Exports, we enjoy relatively better profitability and that is what has impacted the margins. Secondly, superior performance of better margin products in the export portfolio as well as domestic, and a net positive impact of price increases, which was slightly ahead of the material cost increase. As you would have noticed, this has driven up the ASPs by about 7% in between quarter three and quarter four. The ASPs in export business, motorcycle business actually, increased by 11%. To tie in with the earlier point I made about the increasing contribution of Pulsar and Dominar in the export portfolio. We had accounted towards the accrual of incentives receivables from state government of Maharashtra under the Package Scheme of Incentives amounting to about INR 31 crore as part of income for the year and INR 315 crore as an exceptional gain for income pertaining to previous years. With regard to the outlook for coming quarters, while in the immediate term driven by the high season in demand, we think that it will add a luster to the retail demand in April and May. We would like to watch the months of June, July and August to fundamentally understand whether there is a genuine and structural turnaround of the two-wheeler industry in play, or not. We expect a shortfall of about 15%-20% of our requirements on account of semiconductors, which will impact mostly the domestic business units and to a smaller extent, the export brands in international markets too. This is the result of defaults by some established vendors on whom we had single source dependencies. Our R&D teams are developing out alternative sources. However, the testing and validation actions require time. Therefore, this will lead to a temporary loss of market share in quarter one, which we should hopefully recover rapidly in quarter two, by which time our countermeasures on-ground basing the supply chain are expected to be in full play. On the cost side, we definitely see some headwinds. We think we may see up to about 3.5% increase on cost, basically because of metals. As the demand environment remains agile, we will be observing it very carefully, and we will be observing competition before we decide our move about recovery of the cost increases. However, on first of April, we have already taken a price increase of recovering about 1.5%-2% of this cost increase. The balance, like I said, we'll watch demand and competition before deciding on it. Finally, the board yesterday recommended a dividend of INR 140 per share, which amounts to about a payout of INR 4,051 crore and a payout ratio of over 80%, in line with our dividend policy of distributing up to 90% of the surplus. Thank you very much for listening in. Now we can open the floor for Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. 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 Pramod Kumar from UBS. Please go ahead. Yeah. Thanks a lot for the opportunity, Rakesh and Dinesh, and congratulations on an excellent print. Also welcome, Dinesh, to the autospace. Look forward to interacting with you. Rakesh, my first question is on the export outlook, because it's been kind of more stable in terms of the volume trajectory of late. Though you've been talking about good demand market, and they've also absorbed much higher price increases versus the domestic consumers. Given that context and the growth what you had this fiscal, how would you see export as a space for FY 2023 at the industry level, vis-a-vis domestic demand and if you can provide some guidance on whether it can do a double-digit growth again in FY 2023 as a segment for the industry? I suppose you meant a double-digit growth for the export business unit. Is that what you're talking about? Yes. Okay. The outlook for exports is quite steady. We've been tracking over 200,000 units as you know, and we expect to continue this thing. Now, like I mentioned in the opening remarks, our competitive position in all our markets is fairly strong. Out of the Mm-hmm. 70 markets or so, I would say at least in 65, we have very, very leading positions. We have, you know, dealerships, service centers, people, manufacturing, all that is very well in position. Most of the markets we are doing pretty all right. You know, all the regions are in the growth phase. There is a little bit of uncertainty about local currency movement vis-a-vis the dollar. Till now it is not very alarming at an overall level. There are some hits and misses here and there. Apart from that, we have seen a steady business environment overseas, and we feel that we should be able to get a good proportionate share of the market growth, which will mean that we continue to increase our market share. Like I said, the best thing is, you know, the performance of the Pulsars and Dominars. As the year rolls on, the new Pulsars will start to hit Latin America. We can already see, I mean, our order book for Dominar, for example, is, I mean, we already got an order book which we can't service in the next couple of months. It is showing that the customer is really responding very well to upgrading to the 250cc. I'm getting a bit of a déjà vu over here because a few years ago when we launched the Pulsar 200 NX, we were worried whether people will upgrade from 150ccc to 200cc or not. It had an outstanding reception in Latin America, which sort of changed our fortunes with Latin America even for the [Kraken]. I am seeing the same play with Dominar and subsequently hopefully with the Pulsar 250. That bodes very well for our bottom line in the business unit also. The only issue which has to be really managed is the shortfall arising out of Egypt. As you know that Egypt banned the three-wheeler import. We, through our distribution partner, have been in touch with the government. They and supporting them. The government is trying to work out a solution which sort of takes care of, you know, the congestion issue which they have, the registration issue which they have, but still solves the problem of short distance mobility in interior villages. We are in very, very close and very good discussions. You know, these things take time. That used to be a big market. In the interim we are facing a gap over there. I think in three months or so or three to six months we will see a solution emerging and that will manage it. That business also returning. Apart from that little bit, little that piece, everything else seems to be in good nick in export, and we expect to deliver a double-digit growth. Our five-year objective, we are counting five years from two years back, is to double the international business on the basis of largely deepening our share in existing markets and to some extent entering new markets like Latin America and little bit of Africa. Yeah. Thanks, Rakesh. Second question is on the profitability, because at one end in 4Q we had one of the best ever mix, right? Because international and domestic business doing better at the expense of lower margin category 100 cc domestic. With the marriage season going good and demand coming back to an extent for that category, you should ideally see some bit of normalization of your mix. Right? Then there's a commodity headwind. In that context, just want to understand how do you see the domestic mix evolving with three-wheelers coming back, but at the same time there's electric three-wheelers which are taking more and more share, and you are launching an EV electric, which could have implications for your margin mix in that category. There's the commodity overlay, right? Which you kind of hinted to. Given all this, directionally, how should one look at margins for the next six months? I know months? I know it's compared to last quarter, which was a pretty upbeat number. On a year-over-year basis, how should one look at margins, say, for 2023 versus 2022, Rakesh? In your manner of asking your question, you answered it partly already. Because you're very right. The margin, it's a blended margin for Bajaj Auto. Let's look at the positives first. I think a continued story of growth in the export business unit and the improvement in the portfolio within the export business, which I talked about. That's a positive thing. You rightly said the return of the three-wheeler business. You know, it is growing from strength to strength because traffic is coming back, and it is now almost at normalcy, at 92%-95%, and it will be over 100% in a few quarters. Again, here what's happening is that the mix is changing in favor of better margin products for us. So that's a very big thing. The arrival of the electric three-wheeler would not have much of a play because our objective in FY 2023 is a cautious introduction. You know, the three-wheeler is a commercial vehicle, and we need to make sure that the customer and future customers are feel completely reassured about the vehicle as well as the support system surrounding the vehicle. So we're not going to be making a big play. We're going to be launching the three-wheeler in June in a couple of cities only, and then observe for three months, and then expand to 10, 15, in that manner. Pretty much similar to the [playbook] which we deployed in [audio distortion], but that, of course, got interrupted because of COVID. From a volumetric point of view, the e-three-wheelers are not going to compromise the profitability of the three-wheeler business because it is pretty small. The third thing which I would like to say is that, you know, our price increases in export business and, to some extent in three-wheelers and the two-wheelers, have been ahead of competition and have been digested pretty well. You know, you got to keep testing the optimum between share growth and profitability. I think one of the good gains from quarter four was we tested it. We were ahead of the cost increases through our price increases, but we did not compromise market share overall. This is as you see, three-wheeler market share has increased, export market share has increased, and we'll continue in that direction. Now, some of the downsides, I agree with you that arithmetically speaking, the rise of the motor parts business and that rate increasing will have a downward pressure on the overall blended margin. Secondly, definitely, at least in the next few months, we can see that the cost increases are there. They're very real. Like I said, we've only recovered, let's say, one third of it. That will certainly be an issue to watch out for. I cannot tell you what our plan's going to be on that, because if indeed this cycle of April, May, and the return of demand continues, and we sense that demand is recovering nicely in June, July, it emboldens this industry to pass on the cost increases and increase price. If it does not, then one is a little bit more circumspect about price increases. Of course, for us, there is that soft devaluation which is in play every quarter. You know, INR 75 goes to INR 75.5, and INR 75.5 is now going to INR 76.2 kind of a realization. That is definitely mitigating this cost increase. I would say that we'll take it quarter by quarter. There are positives, but there are downward pressures. If by the end of the year we are able to hold on to this, it will, I think, be a very, very good performance, but it will be challenging. I unfortunately cannot give you a, even a time at this point of time. Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead. Hi, team. Congratulations for good earnings in this environment. Two, three questions. Firstly, Rakesh, could you share a little bit more about your hedging strategy? What kind of realizations on rupee-dollar did you get in the March quarter? And how will the currency impact you in the coming year? Secondly, you know, among your export markets, we've seen a challenging environment in countries like Sri Lanka and Nepal. Could you share what percentage of this 200,000 monthly run rate is coming from these countries? That's it for now. Thanks. Okay. Let me take your second question first. See Sri Lanka, it's got into the news recently because of the protests, et cetera, spilling over onto the streets. It has been facing a foreign exchange crisis for some time now. Sri Lankan government, in response to that, has banned the imports of popular products as well as some other categories. Actually in FY 2022, our exports to Sri Lanka were very small. There was one tender win for three-wheeler for the police, and then there was, you know, we commenced this for CT 100, which is very popular product in Sri Lanka on the basis of localization. This would be less than 1% of the overall. FY 2023 does not really get affected because of Sri Lanka compared to FY 2022. Secondly, your second country which you asked was about Nepal. Nepal we do again about 5,500 units including three-wheelers per month. We have got the number one position over there. You can calculate in the overall scheme of things it is not very big. I think that the Nepal issue will probably be over sooner than later. Really that even comes up around the Dashain time. About a month or two before that, I definitely see the country opening up. [Audio distortion], I think Dinesh will answer that. Sir, I think you had a question on foreign exchange. Just, Rakesh mentioned this in his prior comments. Our realization for exports in quarter four was at INR 75.5, clearly better off from what it was in quarter three, which was just about a tad over INR 75. With the way the INR depreciation is happening, we expect that the next quarter could land anywhere between INR 75.5 and INR 76. That's the current outlook as we have it. That's very helpful, Dinesh. Lastly, just, could you comment a little bit about KTM? How was KTM profitability in this quarter? Well, see, we don't get into segment and brand-wise profitability, as you know. KTM in India and overseas enjoyed better than average profitability. [Audio distortion], just if I may interrupt you here. I think the, with the change in the structure now we are holding shares into PMHE, which is a listed entity. The numbers are publicly available and, they can easily source from there. Sorry, Dinesh, my comment was really on the KTM business within Bajaj Auto. I was not commenting on the KTM AG, you know. KTM business within Bajaj Auto, which is exports as well as domestic under the KTM and Husqvarna brand, their overall profitability was superior, but we don't get into the details at that level. Thank you. The next question is from the line of Raghunandhan NL from Emkay Global. Please go ahead. Thank you, sir, and congratulations on good set of numbers, and welcoming Dinesh, sir. Sir, firstly, on the Q4 result, the press release had mentioned the deferral of raw material cost increase. Can you quantify what was the positive impact in Q4 margin because of this deferral? I'm not able to quantify the number, but let's give you a directional sense of what we had said. We had anticipated that we were gonna be getting some amount of cost inflation. What the team was able to do was on the negotiated part of the cost portfolio, able to push that out into quarter one. A lot of that inflation is what we're gonna be seeing in quarter one, as Rakesh had just mentioned. We think material inflation in quarter one, as things currently stand, could be in the range of between 3.5%-4%, but that is now with metals. The metals portfolio continuing to inflate. You'd be aware that on just some of the key raw materials that we have, which is let's say steel and alloys, that's currently seeing inflation of anywhere close to 10%-15% already. We don't know where the quarter will end, but 3.5%-4% is what the impact looks like currently. This one time we're planning to try and recover about anywhere between a third to a half of that in the pricing that we've taken in April. We'll wait and watch how the quarter you know plays out. To give you a sense, the last quarter did benefit from that. I think the pricing impact what we saw as a benefit in quarter one was just about 1%. Thank you, Dinesh. That was helpful. Rakesh, sir, can you talk about the expectation of a recovery in the student demand in FY 2023? Would it be fair to say that student demand pre-COVID used to be as high as 10%-15% of volume, which had substantially reduced in the last two years? This year, given the complete reopening of educational institution, this demand can come back strongly? Yes, I think it is a fair expectation that on the basis of colleges opening up and all the segments open up that work from office starts to become a little bit more popular in the IT companies. On the back of that, certainly there could be a positive play on that sub-segment. Thank you. [Of course] The next question is from the line of Kapil Singh from Nomura. Please go ahead. Hi, sir. Thanks for the opportunity. Could you talk about what was the spare parts and export revenue for this quarter? Also we've seen a dip in the employee cost on a QoQ as well as a YOY basis. Some color and outlook for next year for the same. [Audio distortion]. Did you say employee cost? [Audio distortion] Okay. Let me just yeah. You wanted to know about the sales revenue. In fact, we've had very good performance by our domestic spare parts business unit. The penetration percentage is now increasing quite smartly. Two years back it used to be 14%, now it is about 18%. The spare parts profitability again is very high, and we expect that this 18% will probably be moving into the 20% zone. I think that it is fairly ahead of our competitors. Okay. Let me take a question on the employee benefit expenses. Just to put the numbers up, we are at INR 305 crore this quarter. Last quarter was INR 339 crore. You've seen us mention in the press notes that we've got a benefit of about INR 30 crore. You'd be aware that as we process, one has to undertake an actuarial valuation of the employee benefits at the end of every financial year through an independent actuary. That's what we've done as per extant practice. In doing that, we've got a benefit that's come out of the valuation. You'll be aware that when you do that valuation, there are two factors which essentially drive the sensitivity of that liability calculation. One is the inflation rates that are taken in, and the other is the escalation, and the other is the interest rates. Clearly, that's been one of the factors which has led to the INR 30 crore reduction relative to what we might have recognized in the preceding three quarters of the financial year. Essentially what we've done is to true up that impact in quarter four as we've gone ahead and done the exercise independently. That's the INR 30 crore reduction that you're seeing in just the quarter to true up for what we may have accrued in the previous quarters. Because it's come in in this quarter for the year, we've adjusted it in the current quarter's financials. On a year-on-year basis, I thought I heard you mention that employee benefits you're seeing down. I'm actually seeing numbers of close to INR 1,358 crore relative to INR 1,285 crore in the previous financial year. On a full year basis, employee costs have come down. Okay. Thanks for the detailed explanation. I also asked for the export revenue, please, if you can share that as well. The spare parts revenue number, if you can share it, if it's available. Otherwise I can take it up. Kapil, I think separately, Singh has shared that with you. Sure. All right. Sir, one question is on the mix that we see for the quarter. There is a significant drop in volumes for TT and Platina. Is this a conscious choice of allocation that we are doing because of the chip shortage? Directionally, when you look forward for next one or two years, will this segment be a focus segment for you? Because you've been very successful in, you know, premiumization, as a strategy globally. I just wanted to know your thoughts on the same. Yeah. The first part of your question, the answer is yes. Absolutely, we have prioritized the use of the chips towards high profitability products, high profitability geographies. We take a corporate look of all SKUs in all countries and India, and then we prioritize for profitability. In that respect, yes, Platina and TT have suffered a little bit more. Though I must point out here that, you know, there are different sets of chips for different product classes, so it's not all very fungible. That would be going into too much of detail. Now, our approach is really to participate in all the segments, as you know. To try and move up the customer to a higher level product where we enjoy a better margin and where we have some scope for differentiation. Therefore, when it comes to the absolute entry level, you would have seen that we have almost vacated the kickstart segment. Our whole effort, which has been very successful, has been to take up the kickstart customer into Platina electric start. Then you would have noticed that we have launched the CT 110X, which is, you know, we're trying to differentiate on the basis of style and on the basis of durability. Again, if you see the pricing, if you compare the CT 100 pricing with the CT 110X pricing, you would see a bigger difference. Again, here our whole point is to upgrade the customer. In the 125 cc you would have seen with the NS125. Even within the 125 cc segment, we are trying to move the customer towards a higher end of the 125cc. At the same time, we do see an opportunity at the entry point of 125 cc to upgrade the 100 cc customer there. Over a period of time, you will see upgrade coming from Bajaj Auto. I cannot say precisely what it is and the timing of it, but certainly this upgrade strategy of taking a 100 cc customer into 125cc will be continuing to be played out. Remember, seeing the same action taking place in the fourth segment, where the latest move is to, you know, take the customer up to the 250 cc class. That would be our approach. Cover all segments, but within the segment, move the customers to a higher price variant and move the lower segment into the higher segment. Those are the twin forces. I'll be working on those twin vectors. Thank you. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead. Hi, sir. A couple of questions from my side. One is, with respect to, the INR 13 crore incentive which you have mentioned. How much of that is pertaining to, previous nine months of FY 2022 and how much is for fourth quarter? Second question on the price hikes which have taken in fourth quarter. Okay. Hi, Jinesh. You know, for your question on the incentives, let me just take a minute and actually explain this for the benefit of everyone. You know, this is the Package Scheme of Incentives that was announced by the government of Maharashtra in 2007. You know, to provide certain benefits to eligible entities who are making a certain investment. Bajaj also had made an investment in the Waluj plant in Waluj of Aurangabad. We've now received the eligibility certificate after much to-and-fro that happened with the authorities. This benefit is for vehicles that are manufactured in our Waluj plant and sold and registered within the state of Maharashtra. Right. With the eligibility certificate now having come in, we've accrued for this. We've done it in two parts. This benefit is available from 2015. It runs for nine years to 2024, so it's gonna be available till March 31st, 2024. The accounting entries that we've passed this quarter will appear in two lines. There is INR 3 crore that will sit under other operating income, which is for the current year in question, to which your question, Dinesh, is how is that phased out across the year. Of the INR 30 crore, INR 8 crore pertains to quarter four and INR 22 crore for the nine months preceding it. That's INR 30 crore, which appears in the other operating income, which pertains to the current year in question. There is INR 315 crore that we have accrued for prior periods, which is for periods ranging from 2015 to FY 2021. INR 315 crore of it, which sits in exceptional items. Like I mentioned, this incentive will be available for two more years up to March 31st, 2024. Sure. Just one clarification. The balance INR 22 crore for nine months was also accounted in fourth quarter, right? It was accounted in previous quarters? Because we've now had visibility to the eligibility of it. Got it. We've accounted for two years accrual in quarter four. The INR 30 crore of which pertains to the quarter in question and INR 22 crore for the nine months prior to it. Got it. On the price increases taken in fourth quarter? On the price increases taken in the fourth quarter. For the fourth quarter. The quarter went by. June through March. I just did mention, Jinesh, the price increases that were taken in the fourth quarter is in the range of close to about 3%. Understood. Got it. Great. Thanks, and all the best. Thank you. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead. Hi. Thanks for the opportunity. My question is actually on the domestic three-wheelers. Rakesh, you mentioned that, you know, the three-wheeler EV that you'll be launching in June, it'll be a limited launch initially. So my question is, as we look into the next two to three years, would it be fair to say that both CNG and EV could be eating into the share of, you know, diesel instead of really competing with each other? Or are there use cases in your view where EV could actually be more beneficial than CNG as well? I think let us ask it. Use cases where? Where EV is more beneficial than CNG itself. Than CNG itself. Yeah, of course. Yes. Initially, CNG has obviously eaten into diesel. I gave you those numbers which show you the tremendous turnaround of the CNG based three-wheeler, their component increasing in last year, particularly in quarter four. Now, at this point of time, given where the CNG prices are and given the electricity cost and the cost of the EV three-wheeler, we feel on total cost of ownership, there is almost parity. However, we're expecting a major price increase in CNG in the coming months. At the same time, you know, this reduction in cell cost, which was being assumed by the industry over the last five years or so of a consistent decline in cell cost, has not been experienced this year. In fact, costs are going back to almost 2019 levels. Therefore, we don't see the electric three-wheeler becoming cheaper from that point of view. Therefore, right now, the cost of ownership is almost at parity, assuming that both CNG and electric three-wheeler prices rise. The penetration will now depend on how well we are able to reassure the commercial driver of range, resale value and robustness of the product. That is what I was saying, is that we want to take our time about it and go in a systematic way with this engagement. Now, if I take a long shot view of things, and we see that supply comes on stream for cell costs and the reduction in cell costs resumes its downward journey, then over a period of three to five years, I certainly think that electric three-wheeler will start to cannibalize CNG as well at some point of time. In terms of use cases, new use cases which till now are not in operation, you know, it's a very mature category, so I do not see vast use cases coming up. I do see from our point of view the eclipsing of the e-ricks, you know. Mm-hmm. The e-ricks, which is actually a substantial subsegment in the category. It's almost like 40%-50% is already this ramshackle lead-acid based three-wheeler, which is very widely prevalent in particularly North India and East India. Yes. Definitely I see, as and when the, you know, e-autos based on lithium-ion with much better sort of features and owner's rideability and all that, they will start to eclipse the e-ricks. Because e-ricks are, you know, in quotes, a very "jugaad" solution, and so they'll not be able to withstand a superior product. I actually see a big new segment opening up for the e-three-wheeler. It's not a new use case, but it certainly is a new catchment area of an existing use case. We just have to see what is happening, unfolding in China, where in fact in many cases Chinese government has mandated that lead-acid must move to lithium-ion. Therefore, you know, this whole sort of era of very tactical and very fixed products based on lead-acid and very fragile frames and, you know, unsteady vehicles, you may have seen a lot of videos of these vehicles toppling over and all that. I see that drawing to a close. A new course of time, all that moving up to standard e-autos. Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead. Hi, [team]. Thanks for taking my questions. Just two follow-ups from my side. Firstly, on the supply shortages that you spoke about, can you give some more color on which models is this for? Because my understanding was, is it mostly for ABS models, right, above 125 cc. Just a related point, if you can give us some sense of where is the channel inventory level now? Is it you all are losing out on the retail demand in the market because of shortages? You know, this is affecting all models. This is not about ABS. You know, that period of shortages on the ABS side, we have faced and we have overcome by developing by broadening our supplier base. We are not having that issue. This is around injection systems, carburetors. There are multiple chips, and we are facing shortages across the in you know entry-level in sports brand and even in RE, I mean, three-wheeler, CNG three-wheelers. The channel stocks at this point of time are dwindling as we speak. I don't see an issue in the motorcycle business in April, but I definitely see an issue in the retail level operation in the motorcycle business in June. Hopefully by July. Sorry, in May and June. Towards the end of June and July, we should be able to resume supplies based on development of other suppliers. In the three-wheeler business, we have a very strong position, and what happens is that the lack of stock translates into an order book, and it's just that there will be some irate customers who will now, instead of getting the product off the shelf, will be getting it in 30 days' time or so. This is what the case is also in Chetak, in the electric two-wheeler segment. Certainly April we should tide over. May we see some issues in some of the, you know, more undifferentiated brands in motorcycle business in India. Okay, got it. The second follow-up I had was on the exports. Now I do understand there is a little bit of seasonality or let's say, you know, impact that we see in March quarter, where volumes tend to be lower. Even if I look at, you know, versus last year, there's clearly been decline. I'm just trying to understand how should I read this. Is this only supply related challenge? And if you can just refresh us on the region-wise mix which you used to give around Africa and, you know, LATAM, given, you know, these are the only two markets which are growing and I think Middle East and Southeast has not been growing yet. Some color on that. See there is a lot of base effect. I agree with you when you look at it, you know, at the surface, it does seem like that. Because last year, at least for a good six months, there was the relief of the pent-up demand. You see the other thing which was happening was that the transit times were increasing. As a result of which there was a big increase in uptake that is visible. The stock levels had to be rebuilt and pent-up demand was coming up and all that. The way we look at it and what gives us confidence is the retail level. Which obviously doesn't get reported. Our retail performance across the board is at its highest ever. If you had asked me the same question last year, our shipments were way ahead of retail last year because the stock has to be built up, transit times were increasing, and that gave it a higher base. That is why you are seeing some negatives and or small positives. If I compare retail to retail, which I do internally. We're having a very good movement. This problem will get ironed out, I think, in a few months' time. For a few months you might see, I think you might see this till about August. You might see that either it'll be slightly negative or slightly positive, but at the retail level it is a double-digit growth. In fact, if I'm not wrong, I think January and March was our highest ever retail globally. You know, it's running at that level. This comment is mostly on motorcycles. I've already talked about the issue of a gap in three-wheelers from Egypt, because we need to do almost 6,000 units per month in Egypt, and that's now zero. Apart from that, you know, one is seeing very good retail. In terms of the spread, about 50%-55% is Africa, about 20% is Latin America, tad under 20%, and the balance 22%-25% is Asia. Middle East, Asia and ASEAN. In ASEAN, the recovery, most of the countries are, let's say our top 20 countries and regions, all of them are now back to their pre-pandemic levels. Places like Africa have bounced back even better. They're doing much better than the pandemic level. LATAM is also doing. I think only Philippines, Malaysia are still not reached the pre-pandemic levels. Of course, Nepal, Sri Lanka for other reasons. I would say Nepal, Sri Lanka and Philippines still trailing behind from pre-pandemic levels. Other than that, almost all the countries and regions are back to their pre-pandemic levels. Thank you. The next question is from the line of Chirag Shah from Edelweiss. Please go ahead. Yeah, thanks for the opportunity. It's a good cross-section of members. My first question is a follow-up on the trade short and your commentary that you would be able to procure 15%-80% lesser than what you intend to. If I look at last full year, how should we look at the volume buildup for this year? Because last year itself you were having supply challenges, either ABS, hot chips or both combined at some point of time. Our base is already suppressed. We can expect a growth over last year, at least that kind of surprise or six months for you? A reasonable double-digit growth over last year, or even that is in question given the shortages that you have indicated. Yeah. Let me summarize that for you by just commenting on each of the business units. Export, I've already told you, I think, Pramod asked this question right in the beginning. Gunjan also asked this question just now. On the back of you know, our competitive position, improvement in retail performance, we definitely and entry into some new markets, we will continue to drive for a double-digit growth in the export business unit. Export business is about 50%, 50%-60%, you know, depending on how the others. That's half of the business very firmly on a double-digit growth track. We have three-wheeler business, most certainly on a growth track. Lastly, because again, not just that the market is coming back, but the market share is at an all-time high. As the market returns, you know, we are going to get 75% of that disproportionate share of that return because we are sitting on a 70% market share. I told you about most of the return of the market is in CNG, where our market share is 77%. Very, very firmly on a good growth track. Domestic motorcycle business, some of the sub-100cc, they've actually proved that they suffered a little bit more because we have prioritized the chip allocation towards the more profitable segment, as a result of which they have suffered more. I think after quarter one, we should be through with this embarrassment of chip shortage because some actions have been ongoing for the last six months to broad-base our supply chain. You know, having single source dependency was a strategic choice. It helped us in very good stead because it allowed us to develop innovative and proprietary solutions to things. Downside in a situation like this became that if there was a default, then we suffered disproportionately, and that is what has happened. We have, over the last six months, broad-based supply, and July onwards we should be coming back to it. Now, given the fact that we have got some really solid plays in the sports segment and in the 125 cc segment already, you know, out there in the market, because these, you know, the Pulsar 250s, et cetera, has been accepted very well. We've got a stream of products. We are waiting for supply chain to stabilize. There are There are stream of products, good pipeline, which is waiting for its launch. Yeah. Of course, the 125 cc continues to do well. A couple of launches here and there in the 125 cc segment will also take place. I think we will definitely see a strong growth in the domestic motorcycle business as well. Apart from quarter one hiccup in the domestic side, I see all this falling in place very nicely. Someone had asked a spare parts question, and this year we have grown by 25% in domestic spare parts. We are going to further accelerate it. We have shifted our strategy in spare parts from you know, being more distributor engaged to retailer engaged. There is a slew of digital initiatives which allows us to engage with 25,000 retailers, of course, through distributors. This was a much better route into expanding the spare parts penetration. We have sensed an opportunity here because of COVID some of the smaller manufacturers of spare parts in Northern India have got weaker, and this has opened up a nice opportunity in a very, very profitable business segment. That is where we're going to, you know, look at very, very high growth in this year. When I put it all together, the growth agenda is very much on. We can watch the cost increase and inflation a bit carefully and make sure that the semiconductor bit is history by July. Sir, thank you very much for the elaborate answer. Just a follow-up. On the EV front also, the two-wheeler on the Chetak side, we are doing around 800,000 units a month broadly. How should we see that part of ramp up? Are there any specific challenges on supply chain in that specific part of business, which is hindering our volume ramp up? I tell you, we have not foreseen. What is hindering us is the semiconductor shortage. The problem with this is that you can calculate yourself that there is a six to nine months waiting period. I think that is too much. The customers are very worried about annoying the customer. Now, here we are trying to win the customer. Make Chetak a brand. We want people to fall in love with Chetak yet again. There we are in the first quarter just annoying the customer because we're not able to. They're saying, "Bhai sir, please tell us the date when we will get it." I feel very bad. Our team feels very bad that we can't promise the customer. She's saying that, "Okay, tell me a date which you will give me in two months time." We're not able to do that. I don't want our business and our brand to be in that position. We are not pursuing volume. I can tell you one thing. By end of this year, our objective is to be the most preferred brand in 100 cities in three-wheelers, in electric scooter. Chetak must be one of the most preferred brand. Now, people may not buy it because it is the most expensive, but when they set out to buy, it must be in the consideration set. This is our objective, and this is going to be achieved on the basis of having carefully getting into these 100 cities and delivering a very good customer experience which is backed up by solid service. In this segment, to not have service when people are not very clear about what this product is not the right thing. We are putting in service network even before we are entering the town. I want to be led by that aspiration rather than by a volumetric aspiration, because on that I've not got any control. If we get the supply chain, we're going to max it. There is no hedging about it. We will max it. But I can't give you a number because I don't know the number. But we're now going to spread the butter a little bit all over the country and make sure that we achieve that status in 100 cities. Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference to Mr. Anand Newar for closing comments. Hi. Thank you everyone for joining this call. I see quite a few messages. I'll be taking calls after half an hour from now. On certain numbers that I've got asked on the messages, I'll just quickly run through them. The spare revenues is about INR 980 crore, again split as 80/20 between domestic and exports. Our export revenue is about $500 million, translates into somewhere around INR 4,000 crore. On the financing bit, it is close to the same number that we had last time, which is about 55% of our two-wheelers are financed. Most of it, about 75% of it, is financed through Bajaj Finance. Just one more information, there is our recording of this call will be put on our website either by today or max by tomorrow, first half. So you can probably get access to it, and if you miss certain parts of the call, you can really get an access to it tomorrow. That's all from my end. Thank you. Thank you once again for joining. Thank you all. Thank you all. Thank you. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.