Ladies and gentlemen, good morning, and welcome to Q1 FY 2023 Results Conference Call of Bajaj Auto Limited. My name is Michelle, 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 initial remarks from management. 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 Mr. Anand Newar, Head, Investor Relations, from Bajaj Auto Limited. Thank you, and over to you, sir. Thanks, Michelle. Good day, everyone, and welcome to Bajaj Auto's Q1 FY 2023 earnings conference call. Trust you all are keeping safe. On today's call, we have with us Mr. Rakesh Sharma, Executive Director, and Mr. Dinesh Thapar, Chief Financial Officer. We will begin our call with opening remarks from Rakesh on the business and operational performance of this quarter, and Dinesh will take you through the financial highlights. We will then open the forum for Q&A. Over to you, Rakesh. Thank you, Anand. Good morning, ladies and gentlemen. Thank you very much for taking the time to join us for the call today. Let me begin with the highlights of our performance in quarter one. Overall, quarter one's effort and outcome was defined by supply chain management, in particular the management of ECU availabilities. As we had informed during our last call in April, and as anticipated, we faced significant shortfalls in ECU availabilities of about 20%, 20%-25%, in fact, with the domestic business being hit the hardest with shortfalls of up to 40%. This has resulted in severe depletion of channel stocks and indeed some loss of market share at the retail level. Our booking system across all business units has indeed helped to mitigate these shortfalls to some extent. We had also discussed earlier about our very robust effort launched to broadbase sourcing, ensure testing, validation, and integration of new sources into our production systems. I'm delighted to confirm that these plans have been largely on schedule, and we are now under execution. The process of rebuilding severely depleted inventories has fully commenced. May was our lowest point, and June was better than May, and July, with only a few days left now, is looking like better than June. This trajectory is expected to continue, and through quarter two, we will not only build the inventories back to normal levels, but we will be in position to meet demand. The rebuilding will not only be occurring in India, but also across the world. Perhaps the only exception to this will be our electric scooter, Chetak, where while month-on-month dispatches are improving, supplies will still trail behind demand in the short term. Now let me briefly comment on each business unit, starting with the exports business unit. The exports business unit turned in a steady performance of almost 200,000 units, 193,000 per month we supplied. The ECU shortage also impacted exports by a lesser extent. We estimate about 10% impairment to volumes there, and this impairment was unfortunately felt most in the sports segment in Latin America and to a smaller extent in some three-wheeler lines in ASEAN. At a global level, our market share in exports remained steady. Even after taking price increases, we were generally ahead of competition. We acquired market share in LATAM and ASEAN and maintained in the Africa region. I will call out the outstanding performance of our twin brands, Dominar and Pulsar, in the sports segment of LATAM. In fact, the twin Dominar models, the 250 cc and 400 cc, are expanding this segment all across Latin America. With these two brands, we are now a solid leader across all countries of Latin America in the very attractive sports segment. While our competitive position in overseas markets remains absolutely solid. Sharp strengthening of the US dollar has two impacts. First, firstly is the devaluation of local currencies. As you know, a lot of the emerging market currencies have got quite rattled by the sharp strengthening of the US dollar. This leads to an increase in retail prices. The second impact is in the availability itself of the US dollar. Combined, in the short term, we do anticipate challenges in managing a few markets in Africa because of this issue. Coming to the domestic motorcycles business unit. In domestic motorcycles, we face shortfalls from plan of up to 40%, with the worst month, like I said, being May. We estimate that this has impacted our retail market share by 2 basis points, and depleted channel stocks to under three levels, or three-week levels. This is expected retail. Of course, in some of the lines, as you know, this under three weeks is an average point, and some of the lines it is down to less than a week. This being a two-tiered distribution, the stock norm in general is six weeks, so we have a lot of covering up to do in the months of quarter two. During this period, we took care to funnel the short supplied ECUs because of the semiconductor problem, into the expanding 125 cc segment. There we have had handsome gains in market share, now, you know, reaching 25%. I called out the performance of the premium 125 cc, which is the Pulsar NS 125. This continues, the outstanding performance continues. It's our most expensive 125 cc, the most expensive 125 cc in the market, if you keep aside the KTM Duke. It has now become a very significant contributor to our 125 cc portfolio, obviously making a good impact on the brand's EBITDA. All other segments, including KTM, were severely affected by the shortfall. The penetration of retail finance grew, and particularly Bajaj Finance amongst all the players. Cash sales were actually almost stagnant. The finance sales grew by four or five times that of cash sales. Demand recovery in urban and semi-urban areas was experienced to be far ahead of what was happening in rural areas. Our new platform in Pulsar has been received extremely well by both the experts and amateurs. Expanding on the twin 250cc class introductions of the Pulsar F250 and the N250, we have recently introduced the naked dual channel ABS NS160 to this platform. This is a first in its class, and the early excitement surrounding the launch is very, very heartening. We have started the rollout with West Bengal and Uttar Pradesh, and we are already experiencing stock out, so supply chain is scrambling to ensure that we service those customers who are coming in and booking this product. We have also introduced the all-black twin channel ABS version in the 250 cc on the back of popular demand. There's a lot of request for the this type of color and graphic, and we've responded quite rapidly to that and introduced these two, which have again seen a very good uptake. Further models are going to be launched in the next four weeks, adding exciting options in our portfolio from the 125 all the way up to the refreshed 400 cc Dominar, which as you know, was embellished with some touring features and accessories. The overall industry demand has started to show signs of recovery, though a simplistic quarter-on-quarter comparison may suggest otherwise because of a very low base of previous year caused by, you know, the second wave of COVID being bang in the middle of quarter one last year. If you normalize for that effect, we believe the industry would still be in low single digit decline in quarter one, but this is a very good improvement from the decline rates of -15% to -20% being experienced in Q4 and Q3 of last financial year. The trend trajectory is pointing upwards, and, well, you can see on that basis that there is a recovery. We therefore expect the demand environment to continue to improve on the back of overall economic growth, which is now finally trickling down to our kind of segments. Our objective in Q2 will be to rapidly build up channel stocks, like I mentioned. We are placing particular emphasis on integrating retail finance propositions very, very tightly with our product propositions and brand propositions. As we can see that this is a growth segment. Most importantly, we are going to be fully leveraging our new product launches. As you know, nothing excites the customer more in the auto sector than new product launches. With these handsome product launches bang in the mainstream of the sports segment and the 125 cc segment gives us a great opportunity to engage with the customer in a reviving sense. In commercial vehicles and domestically. The business again suffered a similar impairment of plan to the extent of 40%. There has been some loss of retail level market share there too, and channel stocks are now actually down to something like 10 days. We have a large order book as customers across segments, which is small passenger, large passenger and cargo, and all geographies have preferred to wait for supplies to resume. Indeed, the shortfall in Bajaj is actually reflecting in the underperformance of the industry in quarter one. Introduction of electric three-wheelers has commenced with current trials now underway in Pune and Delhi. In view of the release of permits for electric three-wheelers in Delhi, it is an important market for us to target and to get right. Our observation is that despite the release of over 4,000 units, the permits for 4,000 electric three-wheelers, drivers there in Delhi have not taken them up, and sales is less than probably 10%. There, they have experienced issues with current products, which have been put out for electric three-wheelers. Hence, we decided to carefully craft our product trials to include Delhi, engage with the customers over there, the drivers over there, to ensure we provide to the drivers the right balance between convenience, assurance and earnability. We are very cognizant of our leadership position in three-wheelers and in particular markets like Delhi, where we have traditionally commanded an 80% market share. We are very sensitive to our responsibilities and take every step. Hopefully, if these live product trials, as I would like to call them, in Delhi and Pune turn out, then we will expand the volume beginning with Delhi in the next quarter. On electric scooters, Chetak's sales doubled from 3,300 units in quarter four to over 6,200 units in quarter one. Our geographic footprint has steadily expanded to now 27 cities and 43 dealerships, including exclusive Chetak experience centers. Besides this, during the previous quarter, we have made substantial progress in building capabilities which will ensure leadership in this segment, in the medium term. These include commissioning of a new plant by Chetak Technology Ltd. in Akurdi. The first spread over 500,000 sq ft to put up in record time. The investment in this financial year in it would be just by Chetak Technology Ltd. above INR 150 crore. It should have a capacity of 500,000 units, which we feel that should suffice in the short term of 18-24 months, and it is scalable at minimal cost and effort. Alongside this plant, just across the road, is a dedicated center for R&D, where a large team has been put up. As we speak, massive recruitments are taking place to, you know, to really complete the R&D center there. Together, the plant and R&D will, in our opinion, form an absolutely world-class EV center. We have completed a very detailed review of the opportunity for engagement with the B2B segment in India and overseas, both in the fixed battery and swappable battery formats. New products addressing this segment will roll out in three months' time, which will allow us to develop business in this rapidly expanding segment, engaging with all the, you know, premium e-commerce companies, both in India and later on obviously in overseas. As part of this, we are also in discussion with good battery swapping providers so that, you know, as an alliance, we can provide the required solutions to these companies. I had outlined earlier, and I want to reemphasize the objectives of the early phase of Chetak Technology, and these are threefold. First is the development of the Chetak brand as a preferred choice of the customer in at least 100 cities based on product performance and ownership experience. While we are not chasing volume, we are quite determined that whenever a customer in at least these 100 cities wants to buy an electric two-wheeler, Chetak comes at the top of the consideration set. We believe that a strong service network will provide a very important assurance to the customer in this very nascent category. Besides, of course, you know, having an elegant and well-performing product. The second objective in our early phase is the development of strong R&D and supply chain capabilities, which will allow us to win big time in India and overseas in the medium term. The third objective is to commence the expansion of the portfolio. I just mentioned to you that soon Chetak, which is a largely B2C proposition from attacking the personal segments. From that we will now add, you know, products which will address the B2B segment. Some of this work will also be done through Yulu, where, you know, with whom we have a strategic alliance. We are aiming to more than double sales of Chetak in the coming quarter and get ready to expand the portfolio in the following quarter, which is the October to December quarter. A word about spares business. Over the last six months, we have made a very, very conscious and aggressive attempt to expand penetration of spares. The domestic spares has grown quite handsomely on the basis of this effort by about 40%. As I'm sure you all know, the impact on profitability is quite good. You know that the spares turnover itself in the domestic business is now almost 20% of our overall turnover. It's a very, very significant business, and we are building very fundamental strength based on our engagement with retailers through, of course, our distribution partners, advanced analytics and improved fill rates. With this, now I would like to hand over the floor to Dinesh Thapar, our CFO, for his commentary on the financial performance. Thanks, Rakesh. Good morning to all of you, and, you know, thank you for your participation. Let me say at the outset that this quarter has had its fair set of challenges from an operating environment perspective. You know, as you've just heard, we continue to have significant constraints on semiconductor availability, although the situation improved in the latter part of the quarter with newly developed supply sources kicking in. It was yet another quarter of rationing where we were not able to fulfill demand in its entirety. What is heartening is that the retail numbers, as we see it, were way ahead of what we had built out. That has led to a significant depletion of stocks in the trade pipeline, and we hope to start building this back in the current quarter, clearly with an improved outlook on suppliers that is now coming in, from the very decisive actions that are being taken between us and our vendors. I think the other notable trend that I wanna call out, that appears to be emerging in a far more pronounced manner in recent months, is the weakening macros in some of the export markets. You know, they're witnessing a mix of foreign exchange depreciation. There's volatility, and clearly there seems to be some amount of unavailability of dollars in some of those geographies. It is clearly creating some near-term hiccups, but we're very seized of this issue, and looking to see how we can mitigate these effects. Of course, you know, all of this is being aggravated by stubborn inflation across both domestic and international markets and weakening sentiment. Now, it's against the backdrop of this operating context that I think, and I believe that we were able to put up a good set of numbers. Our performance in quarter one essentially was a demonstration of our resilience to multiple headwinds and a reflection of how a well-diversified business of ours, you know, across segments, across geographies, and dynamic management of the situation enabled us to weather this challenging environment. You would have seen our numbers for now. Our revenue came in at about INR 8,005 crores. It was up 8% over same quarter last year and near flattish compared to the previous quarter. We delivered this top line having bridged the gap in volumes to deliver value growth in its finality, essentially coming through a mix of judicious pricing, better foreign exchange realization, and a very value accretive mix given the solid interplay of sales across segments and geographies. Rakesh Sharma just made a mention of the very strong performance that we had on the spares part of the portfolio. That clearly has aided our performance in this quarter. Our EBITDA margin for the quarter was at 16.6%. It's up 100 basis points on a YOY basis. If you recall, it is clearly better than our initial calculations. You know, when we spoke the last time around, in April, we were expecting margins for Q1 to remain under some amount of pressure. Sorry to interrupt, sir. We are not able to hear you. Can you please repeat your last line? Okay, thanks. Let me start talking about our margin again. Our EBITDA margin for the quarter was at 16.6%, up 100 bps on a year-on-year basis. It is clearly better than our initial calculations. If you recall, when we last spoke in April, we were expecting our margins to remain under some amount of pressure for this quarter, driven by the outlook then on material inflation. However, as we progressed, we have taken price increases and simultaneously worked on containing costs and inflation, which has helped improve our margins. If I recall, I had mentioned at that point of time that we would look to recover anywhere between 50% to about two-thirds of the overall material cost through pricing, and that's pretty much what we've done. What has also aided us this quarter is the depreciating rupee, and therefore, our export realization for the quarter has come in at INR 77.4 compared to INR 75.5 in quarter four. That essentially has helped us then bridge the gap on material costs and allowed us to really deliver some more margin improvement in the quarter. Now, when you look at it sequentially as well, our EBITDA margin for the quarter was broadly in line with the quarter four margin. Let me take a minute to explain this. We announced a headline margin of 17.5% in quarter four. If you strip out the effect of two one-off items that we had called out then, which was the full year accrual of the PSI, Maharashtra PSI incentives, that we had accounted for in that quarter. It was a full year business that we had accounted for and a one-time gain on the actual valuation of our employee benefits. If you strip out the effect of these two, our margin was in the range of 16.8%, against which we've come to about 16.6%. Again, as we then look at it across quarters, we think it's a good show relative to where we thought we'd end up at the start of this quarter. A quick word on the commodities and cash balance. You know, commodities has been a mixed bag. The first half of the quarter looked fairly tight, in line with what we had indicated at our last call, whereas the second half started to ease out a bit, you know, particularly on the metals basket, now showing some signs of cooling off, which we hope will translate into the next quarter. However, the energy complex or energy-related derivatives continue to remain pretty stiff, and there is still some amount of pressure on that part of the input costs. Let me say on balance, having looked at both metals and energy, I think our view on commodities at this point of time is far more comfortable than we thought it was at the start of quarter one. We ended the quarter with surplus cash of about INR 20,500 crores, essentially having added approximately INR 1,500 crores during the course of this quarter. Before we open up for Q&A, I need to talk to you about two specific topics. The first, let me draw your attention to note eight of our consolidated financial statements. You know, as you'd be aware, Bajaj Auto has an international subsidiary based out of the Netherlands called Bajaj Auto International Holdings BV. BAIH BV, which is the entity that I just referred to, holds 49.9% stake in an associate called Pierer Bajaj AG. Right? You'll be very familiar with KTM and the transaction that happened last year between September and October, where the stakes in KTM got swapped into Pierer Bajaj, and so that's the entity I'm now referring to. Pierer Bajaj has a subsidiary which is PIERER Mobility, or more commonly called PMAG, which is listed on the SIX Swiss Exchange, which is in Zurich. The regulated market, general standard of the Frankfurt Stock Exchange and on the Vienna Stock Exchange, which is the official market there. There's a context why I'm giving you this, because for the current quarter ended June 30th, in our consolidated financial statements, it has no bearing on standalone. On the consolidated financial statements, we have been unable to account for our share of the consolidated profit of PBAG. This is really due to the fact that there are differences in the regulations between India and Europe on the frequency for publishing financial results by some listed companies. In view of this, you know, we've been informed by PBAG that the results of PMAG, which is the listed entity that I just referred to, are required to be published only on a six-monthly basis as per the stock exchange regulations that are applicable to PMAG and will be shared by Bajaj Auto only as per that publishing calendar. Right? Essentially, Bajaj Auto needs to prepare consolidated financial statements on a quarterly basis. PMAG, by virtue of local regulation, needs to prepare it only on a six-monthly basis. Therefore, as we are unable to receive the financial results for PBAG for the current quarter, the same has not been accounted for in our consolidated results in this quarter and will be accounted for on a six-monthly basis after receipt. Now, I want you to take note of this, that it's really born out of a compulsion, but on a full year basis you will still see the results of PBAG actually accounted for. No impact on a full year basis. However, there will be a quarterly skew. For the quarters ending June and December, we will not be able to consolidate the numbers of PBAG. For the quarters of September and March, we will have consolidated their six-monthly numbers into our quarterly results. The second piece I wanna talk about, we've not had a chance to speak ever since we announced it, was on the buyback that we announced last month. You know, we opened that up from July 4th onwards, and I'm sure you've gone through our public announcement, which essentially lays down the contours of that program. I'm not gonna go through the detailing of that, you know, but we'd be happy to take any questions, specific questions that you might have on it during our Q&A session. Though what I'd like to do is to reiterate that the business, our business remains very strongly focused on investing sufficiently for competitive growth and, you know, to any questions that might have come up sporadically. We have the fullest confidence in our cash generating ability and strong financial position to enable us retain our strong position and importantly, provide the fuel for ongoing investments and opportunities. Right. That's the context in which we went ahead and made the announcement. Let me then summarize by saying that we've delivered a resilient performance, stable revenues in a constraining environment and margin expansion through very dynamic management of the business performance. You know, as we look ahead, while some of the macroeconomic challenges continue to persist, we think we are a lot more encouraged by the prospect of recovering volumes as supplies improve through each month of the current quarter. Very decisive actions have been taken internally, and while it might have taken some time, we believe that it positions our business very well for the longer term. With this, let me hand the session over back to you, Michelle, to open it up 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 their touchtone 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 Binay Singh from Morgan Stanley. Please go ahead. Hi team. Good morning. Thanks for a very comprehensive outlook of information on the Bajaj Auto. My first question is on the margin side. In the previous call, we had sort of guided for margin pressure in Q1, and we saw some of that in the quarter. Now, from here on, how do you look at the margins going ahead? Because on one side, domestic, which we perceive as low margin business, will pick up. You will also have some commodity headwind, but on the other side, commodity tailwind, the high margin export business could be slowing down. Could you comment a little bit about margins going ahead? That's the first question. Thanks. Thanks. Thanks, Binay, for your question. This is Dinesh. Let me take that. You know, I did make a mention right now. I think there are two upsides that we're potentially looking at. One, of course, the commodity situation as it currently stands looks a lot more comfortable than where we might have been a few months back, right? The metals complex has cooled off, and we're hoping that those benefits start to translate into the current quarter as well. That should therefore provide some cushion. I think the other is, you know, the direction of the rupee at the moment. You know, that's been a key enabler for us to have delivered the margin improvement in the last quarter, even as you know, pricing did not entirely cover for the material costs. I think now with cooling commodity costs and the prospect of a better dollar realization, I think that should aid some amount of profitability. You're absolutely right that as supplies improve and the domestic business starts to come back, the lower margin domestic business starts to come back, there could be some challenges on the mix. While mix may have been a contributor in the past, you know, that could be a bit of a challenge as we look forward. I think on balance, the rupee depreciation and the commodity context does offer some amount of comfort on that front, on the margin front. I think clearly slightly better off compared to where we might have spoken in the first month of the last quarter. Right. To an extent, we can expect margins to sort of remain stable, with two positives and one negative, coming up. I think that is clearly our intent. Yeah. No, no, that's very clear. Thanks, Dinesh. The second one is on the domestic three-wheeler side. There are two questions. One is that could you talk a little bit about what kind of run rate could we see now that the supply chain issues are resolving? Secondly, in Delhi, where you are sort of meeting with vendors and customers, what is the total cost of ownership of EV and CNG looking like in your sort of sample set? Are electric vehicles better on total cost of ownership versus CNG in the Delhi experience? Binay, this is Rakesh Sharma. The volume of three-wheeler industry has still not recovered to the FY2020 levels. We think that it is still at about 50% level. The reason for this to not go back to 100% is largely because, you know, some of the markets where, you know, lots of users, for example, Bangalore, where work from home is still continuing, and therefore the, you know, the demand, the movement demand is still not come back to its FY2020 levels. Also the availability of the three-wheeler driver has come down. As a result of which, you know, the tendency to invest in a new asset reduces. That is largely on account of the higher fuel costs over the last couple of years. These two reasons has caused this recovery in the three-wheeler business to be much lower than what we are experiencing in the motorcycle business. In this context, happily, our market share is growing quite well on the back of the expanding network of CNG. Therefore, once the supply chain has resumed, we will initially see a surge because we will be replenishing stock. After that, we should get back to our original levels, which will be, you know, between 20-25 thousand units per month. Which would give us a very good market share because the market itself would have contracted. In terms of the operating economics electric three-wheeler, depending on which city you take, but if I just take Delhi, which has got the lowest fuel cost and the lowest electricity cost, if I use that as a comparison, because these comparisons can differ based on the city, then you know, we find that the electric three-wheeler is now almost at par with CNG, if not slightly less. Because the CNG costs have also increased in the recent past. It is you know at 75%, 50%-75% levels of diesel. Yeah. Great. Thanks, Rakesh. Thanks for that. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all the participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Raghunandhan N L from Emkay Global. Please go ahead. Thank you, sir, for the opportunity. A couple of queries. Firstly, how do you see the outlook for the domestic two-wheeler market this year given the low base? What is your sense on the urban and rural demand? Recent uneven spread of rainfall, is it leading to any concern on the rural demand, especially in the north and east regions? And my second question is a clarification on the raw material, or the commodity cost impact, for Q1. The earlier expectation was the hit could be up to 300-350 basis points. Just if you can quantify how much was the hit in the quarter, given that there was a correction in the months of May and June in commodity prices. Also for Q2, how much benefit can we expect from the fall of commodity prices? Thank you, sir. Let me take the first part of your question, which was about demand for motorcycles and domestic going forward, and then Dinesh can comment on the commodity cost side. The outlook for retail demand, in our opinion, is improving in motorcycles. You see, there is no point doing a simplistic comparison, like I said in my opening remarks, because the last year quarter one was very bad and the growth rates are looking quite astronomical. If I take a five-year sort of ratios and sanitize the base effect, then what you will see is the industry is still in the -3% to -5% growth region. If, let's say, we had a normal quarter one last year. Obviously, it's declining, so that's not good news. If you look at the industry performance post Diwali of last year, and we have been calling this point out, it was like -15% to -17%. Again, in quarter four it was also -15 percentage points. See, I'm only going by the retail patterns based on Vahan data. I don't see much merit in looking at billing numbers or numbers put out by the companies because channel stocks have been flexing quite a bit. To understand demand patterns, it is better to base oneself on the Vahan data, which is, you know, covering almost 80%-85% of the country and is the most reliable data. On that basis, the -15% decline has now come down to -3% to -4%. Going forward, our view is that this should improve to, let's say, to growth of 0%-5% region. In quarter one, what we have seen, even though demand was bolstered by the marriages in North India, we find that urban and semi-urban areas have grown much better than rural areas. Maybe as the monsoon rolls out and people experience the monsoon, the confidence will come and we will see, you know, the rural sector also performing. We've seen some of our large competitors put out schemes, which is a bit unusual because July is not a month when OEM put out cash discounts. For entry-level models, they've put out schemes. We didn't need to do that because, as you know, we were in any case having a supply problem. Hopefully, with the monsoon patterns emerging, rural should also come back. We've also seen that the cash sales are slower, the finance sales are much better, and therefore the penetration of finance companies is most welcome. That's where I would put it. I would say that even growth across rural and urban in the coming six months in the territory of, let's say, 0%-5%, I would still say that the growth will be better in the 125 cc plus segment than in the 100 cc segment. Thanks, Rakesh. There would be a question on material costs. Your question was fundamentally what was the cost and price in this quarter? The cost eventually came in at a little under 3%, and pricing was in the whereabouts of about 2%. That's the reason why in my commentary that we recovered about two-thirds of the material cost inflation through pricing. In terms of the outlook for the next quarter, essentially what's happening is, I did make a mention right now from my commentary that, we're seeing a softening on the metals complex very clearly. There is some inflation that will continue. I think, the inflation that we continue to see is on the energy related complex. For example, you know, in areas like polypropylene or synthetic rubber. In noble metals as well. Yeah. There is some inflation on those lines. Of course, and that's impacted. The piece that is happening on energy is also impacting conversion costs to that extent. I think that's where the inflation is. Our sense of you know many moving parts at this point in time, in fact, as recent as yesterday with some estimates coming in. Our estimation is that material costs for the quarter should be in the ballpark of between 1%-1.5% at this point in time. Thank you. That is very helpful. 1%-1.5% lower QOQ, correct, sir? I'm talking about 1.5% of, as we say, of revenue, in the course of the coming quarter. Yeah. QOQ. That's right. Thank you very much. The corresponding number of what I just mentioned of under 3% will be more like 1%-1.5% for this quarter. Got it, sir. That was useful. That's all from my side. Thank you. The next question is from the line of Aditya Jhawar from Investec. Please go ahead. Yeah. Thanks for the opportunity. I have a couple of questions. First is on our EV volumes. How is the line of sight of, you know, ramping up EV volumes? Now we are adding capacity of 0.5 million. Our ramp up has been slightly slower as compared to peers. Is there a specific issue on the availability in the supply chain? Or is there any, you know, product development program issues that you're facing with vendors? If yes, what is the expected resolution timeline? Aditya, I must point out one thing that every call I say that, you know, our objectives in this phase are not volumetric. I'm surprised that if I personally speaking, if I was an analyst, I would be looking and critically examining what, how the company's capability is shaping up. What I find is that media and the analysts are so glued onto what volume one is selling, which is a very short-term approach, if I might say so. Having said that, you know, I would urge you guys to look at capability. I want to deal with this question a little bit comprehensively, so that hopefully next time our engagement is a little bit more holistic in this. Our volume will to get that out of the way first, we were at 3,000 units, like I said, in quarter one and quarter four. Now, 6,000 plus in quarter one, and hopefully we will double again in quarter two. This is on the basis of only, you know, in 27 cities, whereas we have got about 100 cities in our line of sight. At this stage, our objective is really not gaining market share or volume. Our objective is to build capabilities, which is what I've been talking to you about. Now, let me explain to you why this whole thing takes a bit longer. There are two ways of approaching this business. I must say, I'm not trying to pass a judgment here, because we ourselves adopted the first approach in 2020. What is the first approach? The first approach is to get the aggregates off the shelf from anywhere in the world, slap them together and put out a product. I must say that even in 2019 and 2020, it was not as if we just went shopping. Our styling was our own. But under the hood, there were many components which we just brought in and integrated them into our design style and frame, et cetera. Even then, we had a lot of in-house stuff. We believe that the key to winning this game is to have deep and fundamental design manufacturing capabilities, which we will then throw out to a vendor system. It is a very convenient path to bring in, you know, all the components and put them together. When you do that, you are self-imposing constraints, because then design is not in your hands, because then you have to get the styling from overseas, because you know, or from wherever you're getting the components, because the components are dictating the design language instead of being the. The customer first looks at design and style. We want to retain that control. Obviously, I'm saying that there are many components like, you know, battery cells. Obviously we cannot manage them, but there are many components which we are doing this. That is what we are focusing on. That is the fundamental reason why the ramp up is slow. We can put out 10,000 Chetaks tomorrow if we just buy the aggregate off the shelf. That would be a roller coaster ride, and I don't think that would put us in a good position to win in the medium term. This is the reason why the ramp up is slow, because we have to develop the vendor system based on our in-house design component. We are taking our time over it. This also helps tremendously in managing quality assurance. You know, anything can go wrong. It's a new type of a vehicle. Anything can go wrong. By controlling the component development that are in-house, we are minimizing the chances of something untoward happening in this category and compromising our brand. This is what happens inside the company, which then leads to, you know, some of the more visible stuff like volume and ramp up. Yeah. Thanks a lot, Rakesh, for the elaborate answer. My second question is on the export market. This could be very interesting year where we could see that LATAM and Asian market performing better because of better availability of semiconductors. But at the same time, you know, if you can highlight that on the ground, how is the situation in Nigeria, how is the response to the higher prices? And we know how is the situation or dollar availability. Is there a better, you know, visibility on next couple of months down the line? And is there any postponement of buying because of, you know, potential ban in the Nigerian market? And overall, just to conclude, how should we look at FY2023 export number, putting all this into the context? It's a very good question, Aditya. You're right. There is stability in LATAM. The sports segment is growing, and we are, you know, for the last two-three quarters, having tremendous success with Dominar and Pulsar, so that's better. We are very happy that a very key market like Philippines, which is, you know, one of our top five-six markets, has now come back, and the effect of pandemic is receding over there. Month-on-month, things are building up very nicely. We're hoping that countries—they're much smaller. Malaysia and all will come back. We are hoping that Bangladesh will soon be out of its trouble. Nepal, we don't expect Sri Lanka to come out of their trouble. As you know, exports to Sri Lanka, it stopped 18 months back, right? In this, all this fracas which has just happened over there, it has really not worsened the situation. The exports to Sri Lanka has been zero even in the last, sort of financial year, except for some, police orders, et cetera. I would say that, yes, LATAM and, South, Asia and Middle East, ASEAN or Asia should largely, be on, track and steady performance. Africa is where the issue is. Now, if we plot the retail price and demand over the last, let's say, 16 quarters, okay? You will see that largely on account of, not just FOB increases, there have been some FOB increases. Largely on account of devaluation of the naira in Nigeria. I'm picking up Nigeria in, which is our largest market, as you know, in Africa. Largely because of devaluation, the retail price in Nigeria has gone two to three times over this long period, and at the same time, demand has also increased. My own thinking is that the more important thing is the volatility and the availability of US dollars. You see this devaluation which has occurred over the last, let's say, two years, has been a steady devaluation. What disrupts the market is the sudden up and down. As that settles down, I see that the industry is so big and so deep and so fundamental to Nigeria and as well as to other countries in Africa, that demand will come. People will digest the higher retail prices, and they will start charging higher ticket price to the consumer. You see, look at the options. The other option for intra-city mobility is used car. Used car gives a fuel efficiency of 5-7 kilometers per liter. A motorcycle, even though they've got four people in it, the motorcycle gives a fuel efficiency of 50-60 kilometers per liter. The viability of the Okada, it is not just happenstance that the market has increased to such a big extent. It is because it's a great source of employment, because there is a lot of demand for mobility, and the motorcycle offers the most effective way of transportation and also going into the narrow streets of, you know, the areas which are densely populated. This volatility, and that is coming on the back of this sharp increase in the US dollar, it shakes the market. Now, over the last 15 years which we have been in operation, we have seen that, when this happens, there are two-three months when things go topsy-turvy, and after that the equilibrium returns. Even if it settles down at a higher level, the retail price, it gets digested and demand sort of comes back. On that account, and this includes this availability of US dollars, et cetera. On that account, I see that indeed we will face some kind of turmoil in the immediate term, this month, next month, et cetera, this quarter. Going forward, I think things will settle down, and we will actually benefit because in tough times people gravitate towards the most trusted brand. It is precisely in this period of difficulty of devaluation in last, or the retail price increases in the last, like I said, eight quarters or so, our market share has increased from 40%-59%. We are like 60% of, you know, Nigerian market with a tremendous supporting network of service and dealers. Service workshops and dealers. I think, yeah, immediate term turmoil. You also asked about the recent announcement, which you guys have, which media, Indian media has picked up. Yesterday, but since the last seven, eight days, it has been reported in the Nigerian press. There has been talk in the, government circles about banning motorcycles, on account of, motorcycles being used for terrorist activity in some parts of Nigeria. Now, again, I want to tell you that we, you know, are a little bit, sort of battle-scarred and very veteran of these things over the last decade or so. We have faced bans in Iraq, we have faced bans in Sri Lanka, in Philippines, in Afghanistan, in Egypt, in Argentina, and Nigeria also previously, 250 CCs getting banned in Philippines. You know, these things come and these things go. There has been no notification. We have been in touch with people in Nigeria, including our high commission over there, and there has been no notification, but we are watching out for it. I just want to mention that there are over 3 million motorcycle taxi drivers across Nigeria. They ferry about 40 million people every day. That industry employs 6-9 million, I don't know. This is just a guesstimate. It's a very, very large service industry if you include mechanics, et cetera. An outright ban across Nigeria of motorcycles is, you know, it's a huge, huge challenge for whoever does it. We will see how it unfolds. Even if there are restrictions, our experience is that these restrictions come, they make a point because the government is probably wanting to make a point about terrorism. They come, and it's not as if the entire Nigeria is ridden with terrorism. Our teams are going there and coming back and, you know, one has to have the normal scare, but it's not as if it's such an unsafe country. Even if the government is trying to make a point, they will make the point and we expect normalcy will return. Perfect. Thanks a lot, Rakesh. All the best. Thank you. The next question is from the line of Kapil Singh from Nomura Holdings. Please go ahead. Hi. Good morning, sir. Sir, so on the balance, when you put together all the information on the export markets, what kind of growth are you looking at for this year? I think we are, like I said, definitely, quarter two might be a little bit soft. We have to see largely the dollar availability thing in Africa, like I mentioned. That part in Africa, by the way, is about 50%-55% of our total business. That will definitely put some brakes on growth. We had planned for about 10% growth, depending on how this goes. We should be, you know, getting back at least in the next four, five months back to that 10% number. I think, because these markets, you know, the international markets move almost like a snake in a tunnel. You know, it goes up and down, but directionally it is sort of pointing north, northwards still for us. We have set up an objective for ourselves to double in five years time, and it could take four years or it could take six years, but we feel that that is the kind of opportunity which we have. More or less 50% of that will come from increasing our market share in existing countries. Almost 25% will come from new geographies like, you know, ASEAN or Brazil and in limited way, Europe. Another quarter will come from the increasing penetration or growth in these territories because a lot of Africa and some of the other markets are still very under-penetrated. I would say that there is nothing which is suggesting to us that we will not be able to seize the, you know, opportunity and continue on that trajectory of doubling in five years time or thereabout. An immediate quarter may go up and down, but we are on that path. Thanks. Second question was on, you know, the retention of some of these benefits that we have on account of currency and also on account of commodities. If you could just share your experience from the past or what do you think will happen in future? With, you know, do you think most of this, rupee, weakness would be, retained by the company or you would need to pass on, these benefits mostly, to keep the retail price in those markets, under control? Similarly, for the commodity benefit that we are seeing, in the domestic market, do you think, there is scope to pass on some of the benefits to stimulate demand or, it's not really going to be material enough for you to make any, marked price variance, let's say? In the international markets, we do not see, we have very good leadership position, as you know. Apart from a few countries in West Africa like Guinea, Conakry and all that, we are in solid leadership position where we are setting the pricing and our price setting has always been ahead in the curve of competition and Indian competition, particularly trails behind in many markets quite substantively from us. I think we have said we are not really largely in the portfolio, not really under pressure to pass on any benefit. The only exception is where we will use this cleverly for you know, developing new business where we might have to go with a proposition which is very attractive. I'm talking of three-wheelers in some Middle Eastern countries or in African countries or some high-end motorcycles where we want to upgrade the customer from a 125 cc to a 150 cc or 250 cc. We might do some penetration pricing for some in some pockets. These are pockets of opportunities. They are not going to decisively impact the overall architecture. Overall, internationally, we're not. In the domestic, we are more led by competition, though in the sports segment, we are setting the price. Here I would say that because the domestic market is just recovering, we'll be a bit sanguine, we'll be a bit cautious. Even in those segments where we are leaders of increasing prices, our overall approach is generally to pass on the cost increases, you know. Now that we're not seeing any cost increases, we will not, you know, go and cut prices to try and stimulate demand. I don't see any reason to sort of reduce prices and to stimulate demand. We will expect our new product introduction to be attractive. We've got a very good portfolio shaping up in Pulsar, and there's nothing like a novelty of a new introduction in auto, and that should pull demand. In the mileage segment, which is the 100-125 cc segment, I must say that we will be very carefully observing what competition is doing, and if whichever way the competition moves, we will sort of be in the same ballpark. Kapil, I just want to clarify while you heard from Rakesh Sharma, I think I just want to still make the point saying what we are gonna see, based on just the most latest view is lower inflation. It is still the direction is still one of inflation. We saw about 3% or thereabouts of sales last quarter, which I just mentioned was gonna be in the ballpark as we currently stand of about 1-1.5%. It's still inflation, and it's not a full benefit that needs to be passed on. It's just that we will manage it through other means of mix and but it does not necessarily require us to take pricing as we might have had to in the previous quarters to really make up for that extent of inflation. Just be conscious that the direction is still inflation, although up to a lower extent of what it was in the last quarter. Oh, okay. Thanks. I think it was creating an impression that it's going down. Yeah. Thank you for that. Thanks. Metals complex is going down. The energy complex is stiff. On balance, it is still leading to inflation of 1-1.5% relative to the 3% of inflation that I mentioned in the last quarter. Okay. Thank you. Thank you. The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead. Yeah. Thanks a lot for the opportunity, Rakesh and Dinesh. First, a clarification on the spares. If you can just remind us what is the absolute spares revenue this year? Because you said 40% jump and 20% of revenues. If you can just elaborate a bit more as to what is the absolute number. Sales, spares. Sales. Just for quarter one, we have told you pretty well. 1,035 thereabout, Pramod. This is domestic export put together and, right? Yeah. This is the total sales. Yeah. Exports could be what, Dinesh, for the quarter? Exports, including Nepal rupee, exports and the US dollar exports, everything put together. Are you asking overall exports or exports? Yes. Yes. Within the spares, segment? No, no. Overall exports. Sorry, overall exports. Yeah, if you can split the domestic and export spares, that would be great. Yeah. Just give me a second. Yeah, sure. Yeah, just a second. It's about INR 4,270 crores. Okay. 4,270, right? Thanks for that. My first question, rather the second question, is regarding the entry-level portfolio, Rakesh, because I do understand semiconductor shortage affecting you on the premium category. Is there any semi intensity on the CT 100 and Platinas and even Pulsar 125s, because we are on electronic carbs even now, right? Is that understanding right, sir? The whole semiconductor issue affected even the entry-level segment. They even affected three-wheelers, you know. This month onwards, or actually July onwards, second half of July onwards, countermeasures have been taken and supply is back on track. When I'm telling you about what happened in, say, March, April, May and June, it affected everything. Except for some products which were exported to Africa. It affected entry-level buying. What we did was that we funneled. Of course, these are different chips. Instead of spreading all the chips across all the models, what we did was we funneled the chips into the higher portfolio or the higher EBITDA portfolio. Whether it was two-wheelers, whether it was three-wheelers, or whether it was the 125 cc in the 100-125 cc category. In every category of chips, we funneled the short supply chips into the higher end. Therefore, in the entry-level segment, which let me say I define as 100-125 cc, most of the chips went into 125 cc. Our 125 cc did not face any impairment from shortage. As a result of which we have got our market share has increased from, I think, 21% to 25% or 24% in quarter one. Okay. Rakesh, related to that, we are still on electronic carb for the 100 and 125 cc in the domestic market. When do we plan to transition to fuel injection? With the new RDE norms, if you can just share the timeline and also the implied implications on cost side because of the switch. No, no. I think our product is absolutely steady. We think we have an advantage. There is no action underway like that. Any new product introduction on its own merit, we will examine whether it should be triple spark, double spark, single spark, fuel injection, e-carb, you know, liquid cooled, non-liquid, water cooled, air-cooled. Those are depending on. The portfolio as it stands now, there is no. It's not in flux. Even with the RDE norms, you wouldn't need the fuel injection switchover from electronic carb? Which norms? Sorry. The RDE norms, the OBD norms and the upcoming new norms on the emission regulation. I'm not talking for the immediate term, say one, two years out, the series of norms which are coming like OBD, for example. No, no. Our portfolio is not in any flux. Okay. No, that's great. Final question, sir. Yeah. We may have to do other things, you know, but that is not the issue. There are other issues for in case you're referring to OBD two, A and two B. There is other stuff which has to be done, but not this. Okay. Final one, data point. Where would you put your export inventory at, the current retail level? Export inventory. Export Export inventory in the international market is a very difficult one, you know, with the inventory spread out. We don't really aggregate it and monitor it because this is done market-wise. When you know, the process is that when orders are being planned, we look at inventory, we look at transit time. You know, the transit time itself has been changing, like Latin America transit time used to be 30 days, they went to 90 days, and now they're back to 45 days. We look at all those things and then we plan. Again, we don't sort of aggregate it and say that this is our international inventory, so I'll not be able to reliably answer your question. You know, we are not seeing this as an issue. Okay. That's great to hear, Rakesh. Thanks a lot, and best of luck, sir. Thank you. Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today. I would now like to hand the conference over to Mr. Anand Newar from Bajaj Auto Limited for closing comments. Thank you everyone for joining the earnings conference call. I see quite a few questions still pending, more than a dozen of them. We can take up calls one after the other, after half an hour from now. Thank you so much. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.