Ladies and gentlemen, good day, and welcome to Q2 FY 2023 results conference call of Bajaj Auto Limited. My name is Yashaswi, and I will be your coordinator. As a reminder, all participant lines will be in the listen-only mode, and there is 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, Yashaswi. Good evening, everyone, and welcome to Bajaj Auto Q2 FY2023 earnings conference call. 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 the quarter, and Dinesh will take you through the financial highlights. We will then open the floor up for Q&A. Over to you, Rakesh. Thank you, Anand, and good evening, ladies and gentlemen. Thank you very, very much for taking the time to join us for the call on a Friday evening. Our results were announced a couple of hours back, and I hope you have had a chance to review them. We wanted this conversation to be fresh and not stale by Monday, hence this late call, but we try to close the call by 7 P.M. so that you can head out for your weekend. Let me begin with the highlights of our performance in quarter two. Quarter two was an outstanding quarter with record-breaking top-line and bottom-line outcomes. As you know, there have been serious macroeconomic issues overseas, and also supply chain challenges. This performance in quarter two yet again demonstrates the resilience of Bajaj Auto, arising out of a well-diversified portfolio, robust operational management and a strong competitive position in most key segments in India and overseas. The main story in the quarter was finally the restoration of ECU supplies to industry normal levels. As you know, a substantive R&D and supply chain effort has been made in the last five months to localize vendors for critical components and reduce dependencies. This project was completed, resulting in resumption of supplies to now almost 98% levels. There are still some remnant issues in the top-end models and some three-wheelers, but these will also get resolved within October. Now, coming to the commentary on our main business units. Exports. The key issue in quarter two was a dramatic downturn in several overseas markets, which, as you know, are mostly emerging market economies. While the motorcycle industry's pace of growth had slowed down in Q1, in Q2, there was a dramatic double-digit fall in retails compared to the same period last year. Of course, these signs were visible by end of Q1. The root cause of this downturn has been the sharp appreciation of the U.S. dollar, causing two impacts. A severe double-digit devaluation in most currencies, leading to an increase in retail pricing in these markets. Secondly, extremely poor availability of the U.S. dollar for trade. The combination of these two phenomena resulted in a fall of exports. ASEAN bucked this trend, and the impact was not so severe in LATAM as it was in South Asia, Middle East and maybe Africa. While recognizing the evident fall in retails around April, May, as a prudent measure, we cut our exports to bring this risk of stock and their exposure down to manageable levels. We have taken the bigger hits on a YTD basis, which is H1. Our shipments and retails are now well matched, which means that in the last couple of months our shipments have been lower than what retails we've been experiencing. While having said this, we have seen some recovery in retails in both August and September after the low point in July. Hopefully, this will continue and enable us to set up Q3 in exports to be better than Q2. On the positive side, we witnessed a strong show by ASEAN, with Philippine industry reviving back to pre-COVID levels and Bajaj Auto registering its highest ever sales in Q2 to emerge as a clear leader in this very important ASEAN market. Secondly, at a global level, the sports motorcycling brands, Pulsar and Dominar, increased their contribution in the portfolio of exports to 21%, and their combined market share has also increased beyond 40% level, making us the undisputed leader in the sports category across all the emerging markets of LATAM, ASEAN and Africa, but Africa's sports market is small. Both Pulsar and Dominar offer very good opportunities for Bajaj Auto to grow share, grow category, particularly the 250 category, 250 cc category, and thereby deepen brand strength and improve profitability. Thirdly, the rupee realization at almost INR 18 per U.S. dollar, which is a 3% improvement sequentially, is directly adding to our bottom line. Coming to domestic motorcycles. With the easing of supply chain constraints, volumes almost doubled sequentially to over 620,000 units in quarter two, therefore building back our inventory across channels ahead of the festive and actually just in time for the festive. We have entered the festive with about 5 weeks of stock. It is quite adequate to ensure the surge in demand during festive days is matched by stocks on the ground at every primary and secondary store. Moreover, and more importantly, by end-September, the retail market share has been almost restored to the levels we enjoyed before the supply chain disruption. The industry, the motorcycle industry appears to be bottoming out of the negative performance zone. On retail basis, motorcycles declined by about 5% in FY 2022 and grew by 50% in Q1, but that is because of the base effect of a COVID impacted Q1 in FY 2022. In Q2, while retail still shows a decline of 6% for the industry, most recent retail data appears to suggest that we can expect growth per week, small, single-digit growth in the industry aided by the festive season. The overall industry performance is a consequence of two very distinct and opposite trends. While the entry commuter, which is largely the cheaper 100 cc bikes, is declining quite sharply and particularly in the rural areas, the 125 cc + segment is growing. Consequently, since FY 2020, the industry has reshaped itself towards this segment, and it now constitutes almost 50% of the industry, while it was just about 42%, 43% only two years ago and 40% three years ago. For Bajaj Auto, 60% of our portfolio as compared to industry at 50%. 60% of our portfolio in Q2 were 125 cc + segment, as compared to only 46% in FY 2020. This is a key driver for improved profitability and a superior competitive position. We have made 2 important launches in quarter two. The all-black dual-channel ABS Pulsar N160 and the CT 125, as well as a refresh of the Pulsar 125 being rolled out as we speak. We are delighted with the acceptance of the new Pulsar platform. While it commenced last year with the launch of the 250s, the more mass-appealing N160 was rolled out across the country to an outstanding reception, clearly demonstrating gain of market share, particularly in those states where we have launched it early. Combined with better supplies, this has already helped us gain substantial market share across the country now. This platform, the new Pulsar platform, will be expanded further in the coming quarters, thus completely and substantively upgrading the Pulsar portfolio. The CT 125 was also launched as an entry 125 cc bike with a differentiated proposition of durability and style. Retail of CT 125 are showing week-on-week growth too, but it is early days, but we are happy with the initial results. We will continue to direct our innovation R&D energy to the 125 cc+ segment, which appears to be enjoying tailwinds and growing faster than the overall industry. This will help us improve both the profitability profile of the domestic motorcycle business unit as well as the market share. A quick comment on the festive season underway. It has been a bit up and down so far, but overall, we expect the industry to come through with single-digit growth, and we expect to be in line with the industry, but ahead of it in the 125 cc+ segment. Coming to commercial vehicles. As with motorcycles, we saw a ramp up in volumes on the back of improved supplies, with our dealer inventory being restored back to previous levels. We continue to see signs of recovery as the industry is now back to 54% levels of pre-COVID era. Against this backdrop, while retails have improved to 65% of pre-COVID levels in Q2. With this, our market share is a solid all-time high of 72%. One of the biggest catalyst to this outstanding performance is the continuous rollout of the CNG network by the government and our company's ability to capitalize on this opportunity. The industry has reached its highest ever CNG penetration levels to 67%. With our market share in CNG-based products, which is 60%, our market share has now grown to almost 80% in Q2. We expect industry to keep recovering, though at a slow pace, and it will be driven by the ability of drivers to improve earnings through better ticket prices to mitigate the higher fleet TCOs, which will then make new purchases attractive. Trials of electric three-wheelers are continuing in different markets. The rate of adoption of e-autos has been very slow as the commercial segment has very stringent requirements of performance. Our extensive R&D is going to ensure a robust product proposition, which hopefully will accelerate the adoption of EV autos when they are launched in the next few months. On electric scooter, Chetak volumes grew by over 50% from about 6,200 units in Q1 to over 10,000 units in Q2. We gradually increased our presence to now 40 cities across the country. We're also working towards expanding the EV portfolio to cover different emerging segments and geographies. Supply chain visibility is much better and we expect Q3 to be a lot better than Q2. Going forward at a company level, we expect to hold this performance, and we have a few initiatives in play, and we'll be actively seeking to actually improve on it. Now, let me hand over the call to our CFO, Dinesh Thapar, for his commentary. Thank you, Rakesh. Good evening to all of you, and, you know, thank you for joining us, on a Friday evening at this hour for this call. You know, at the outset, let me emphasize that in the two quarters that I've been with the business, it's proven one thing about Bajaj Auto, and that this company has a well-balanced and diversified business, and arguably better than many others, which has allowed it to absorb shocks and still deliver a resilient performance in the aggregates through these challenging times. Now, the quarter on discussion really has had two major events. I think first, we had supplies from the new vendor. You'd recall that we'd spoken about this, when we were talking in July, that we had developed new supply sources, and that's come in very handy for the business. That kicked in and allowed us to really build channel inventory that significantly decreased and hit a low in the month of May. Therefore, ahead of festive season, we think we are well-placed with channel inventory that's built back the levels that Rakesh has just spoken to you about. Secondly, I think the other development which is most in the context of our financial results was the very weak macroeconomic environment in our export geographies that have dampened our export volumes. While both events have had material impacts on our results, what is very reassuring is that the outcome has turned out to be a record quarter for Bajaj Auto with all-time high top line and bottom line. Now, talking about the specifics of our financials, our top line clocks you know the very important milestone of INR 10,000 crore in a quarter for the first time. This is the very first time that Bajaj Auto has reported that number. Our revenue from operations came in at INR 10,203 crore, which is up 16% year-on-year and 27% over the previous quarter. This was primarily led by improved volumes, which were up 23% sequentially, on the back of improved supplies from the new vendor source that's come. And also was aided by very judicious pricing that we've taken, particularly at the start of the last quarter and better dollar realizations as the quarter passed by. Our EBITDA came in at a very strong INR 1,759 crore, up 26% year-on-year and 36% over previous quarter. Our operating margins expanded about 100 basis points, sequentially. I'd say a tad better than our initial calculations. When we spoke last quarter, we had anticipated material costs to inflate at anywhere between 1%-1.5%, primarily led by imports which were indexed to the energy basket. You will recall I had made this comment and said that when you look at our commodities or our input costs, you've got to look at them from the prism of two real baskets, the metals complex and the energy complex. It was in that context that I'd mentioned that we were likely to see some inflation in the current quarter. What we'd also said was in keeping with the trend of pricing that in recent quarters, we had hoped to cover about 2/3 of that cost inflation through pricing. Now, that is how we had anticipated it as we got into the quarter. Looking back, as the quarter has progressed, we've seen further signs of metals, you know, particularly aluminum, and a few a little bit of alloys, which has softened even further. Some of the other material groups have come off as well. This essentially has meant that material inflation in action came in at the lower band of the range that we had put out. The impact of this was almost entirely neutralized by the pricing that we had taken out early in the quarter. The two were in essence balanced out, as you look at the margin numbers. Therefore, with price versus cost being neutral, and operating leverage on the back of higher revenues, making up for a little bit of the adversity that we saw, the improved dollar realization has meant that that flew straight into the margins. Our foreign exchange realization for the quarter came in at 79.8 versus 77.4 in the previous quarter and 74.6 in the same period last year. On balance sheets, and because we are publishing a six-month balance sheet as is required by regulation, we continue to maintain a very strong track record of cash generation. We've added about INR 2,500 crores of cash from operations in the first half of this year. At the end of the quarter, our surplus cash stood at about INR 15,500 crore, and this most notably was after paying out about INR 7,000 crore by way of dividends and buyback. I'd like to reiterate that we think our balance sheet continues to remain very healthy and offers us enough headroom and flexibility to invest sufficiently in capabilities and growth opportunities looking ahead. Now, as we look ahead to the next quarter, the focus will clearly be to build volume-led revenue momentum with a very strong emphasis on market share gains and really underpinned by the work that we continue to do to drive our supply security. That's an agenda which is making very sharp-footed and steady progress, and there's still some amount of work to be done, but we're making very, very definitive progress on that count. In particular, what we're also doing is to work very closely with developers in some of our large export markets. While each of us may have views on how that will pan out and how the macroeconomic situation will unfold, our intent is to stay very focused on taking decisive actions to drive our business and our competitiveness across these geographies. On the domestic front, the priority very clearly remains strong execution and impactful activation through the rest of season, now that we have our dealerships well stocked up. On margins, the softening commodity costs, you know, progressively through the last quarter and as we currently see it, particularly a further easing of the metals complex, presents a welcome respite after many quarters of inflation and should be a bit of a tailwind as we look ahead. The rupee continues to depreciate and is now over INR 82 to a dollar, and this should really help the case for better realizations and margins. Before we move into Q&A, let me update you once again on our disclosure relating to our consolidated financials, and I'll talk very briefly about the buyback as well. If you recall, in the last quarter, I had made a specific point on our consolidated financial statements and the line that we consolidate, which is share of profit from our associates and joint ventures. That's the one line I'd like to draw your attention to. I had mentioned that on Pierer Bajaj AG or PBAG, which is where we have an indirect holding through our wholly owned subsidiary, BIHBV, was not able to share its quarterly financials with us, and they were only to be sharing it on a six monthly basis. You know, given that they were governed by a regulatory market context which allowed only for publication of financial results at a half yearly rate and not quarterly rates. As a result of which, when we consolidate our results for the last quarter, we did not have any profit that we had built into our consolidated financial statements for PBAG, and therefore that line was zero, if you look back to it in the first quarter. This quarter, having received the published financials from PBAG, because PBAG or the listed entity out there was able to publish it, we have now consolidated six months of profit into this quarter's financials. When you look at that line on share of profit from associates and joint ventures, you will fundamentally see a number which represents six months of the consolidated profit of that entity. On a full year basis, this will not have any impact, but on a quarterly basis they are likely to be skewed. Just to make the point once again and get this out of the way, in the first quarter, which is quarter ending June and the quarter ending December, we will not have financial results from that entity and therefore will not be consolidating it. For the quarter ending September and the quarter ending March, because we will have six monthly results from that entity, we will be consolidating six months into those respective quarters. On buyback, we closed this earlier this week on 10th of October and well ahead of the six-month stipulated time period that we had. We took essentially three months in completing it. We have mopped up over 64 lakh shares during this period of time. The initial numbers that was in the plan was 54 lakhs. We've been able to mop up 64 in the three months that we've been in market, which is fundamentally covering the full INR 2,500 crores that we had set aside for the buyback. We've also issued our post buyback public announcement in today's newspapers. It appears in the Financial Express, the Times of India, and the Lokmat, and I'm sure many of you would have already sighted that. The announcement laid out the contours of the executed buyback along with the revised capital structure. With this, let me hand the session back to Anand and then open it up for Q&A. Over to you. Yes, we can open the Q&A now. 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 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. We have our first question from the line of Amyn Pirani from JP Morgan. Please go ahead. Yes. Hi. Good evening. Thanks for the opportunity and congratulations on a good set of numbers. My question was on the fact that, you know, you mentioned that both commodities and currency will potentially be a tailwind for you. Given that now the focus will be on volume growth and market share, how should we think about, you know, you wanting to invest some of these tailwinds back into the business to grow volume and market share and, you know, and hence the revenue and the margin and the growth? How will it pan out. Thanks, Amit. You know, the platform volume and market share continues. I'm not saying it is completely de-linked from whatever opportunities are getting created by commodities and exchange realization, but it is not our automatic choice to pass these on. We will be very selective. We have a very good understanding of those product market segments where we believe that we need to deploy pricing as a strategy or promotions as a strategy, or even use these opportunities over there. There are many segments where we think we need to attack these through product solutions, through distribution solutions, et cetera. That is an exercise which continues irrespective of, you know, whether these tailwinds are there or not there, because we are pressing forward to continuously expand our footprint. Yes, we know that we have this kind of leeway, and if a large market segment requires it, then we will not hesitate to use some of this. Sure. Thank you. If I can just squeeze in a bookkeeping question. Your other operating income, you know, was quite strong in this quarter, despite the fact that export volumes were lower. I understand that a large part of this is, you know, the export incentive. If you can help us understand, you know, as to what's happening in that number, is there something that we should take into cognizance? Amyn, you're right. The benefit is coming out from export incentives. You know, there's been a waiver that is accounted for. Some of the export incentives that we receive are also sold out or traded. We therefore had a better realization on those claims in the course of the current quarter. I think the bump up that you're seeing, the other operational income is coming in on the incentives, but the way it gets accounted for and the way it gets realized is slightly different, and that can be phased out over time. Okay. Understood. I'll come back in the queue. Thanks for this. Thank you. We have our next question from the line of Kapil Singh from Nomura. Please go ahead. Mr. Kapil Singh, please proceed with your question. Yes. Thank you very much. Thanks a lot for a very detailed commentary. That's quite helpful. I had a couple of questions. Firstly, on the export markets, could you share what is your outlook for the export volumes? And also, what is likely to happen in terms of export pricing? Are you likely to retain those benefits? Because you mentioned that some of the currencies in those countries are also depreciating quite rapidly. Given your experience of last many years, you know, how do you foresee that? Kapil, I had mentioned that we expect quarter three in exports to be better than quarter two. While I would not specify a precise number because it's very difficult to do so given the circumstances. Why I'm saying that it should be better, other things remaining the same, is because in Q2 we had taken the hit of adjusting the stocks in the channels. You see, there is almost three to four months of stock in the case of overseas markets, which is either under shipment, on water or in the plants of the distributor. When there is a dramatic fall in retail, there is a sort of a pull effect which pervades right down the supply chain. Because, you know, before the distributor knows there are a couple of months worth of previously high retail oriented stock hitting them. We have to adjust for those. That adjustment has now got completed in quarter two. That's why I said that our shipments were below or were lower than the retail which we were expecting in the market. Now, going forward, we expect to go up and down with the markets which are showing some signs of improvement. Now, using price as a means of dealing with the macroeconomic issue is not justified. I mean, if the currency has got devalued by 20%, I cannot do anything about it. Even if I shave off a few percentages from our margins because of better realization, it's not gonna make a difference. The macroeconomic world issues have to be digested over the period of time. You see, as you know, we have been in the game for many years now, and even more serious devaluations have been weathered by the company. International businesses have the same target. You know, Argentina and there are other countries, Egypt and all, have experienced serious devaluations. There's a mechanism in the country which comes into play. I've never found that by shaving off the price, we can deal with this massive devaluation. That's not the way we are going to approach it. Yes, where there is intrinsically, there's a competitive issue or there is some promotion which needs to be done to build awareness, we will not hesitate to do that. I don't expect the realizations to be used for reducing prices so that we can offset the devaluation impact in the destination markets. Yeah. Thank you very much. Secondly, I wanted to check. You mentioned tailwinds on commodities. Could you quantify how much tailwinds we are expecting on the commodity front, in what range, and price increase on what basis? A couple of levels, we went for quantification of this trade only because we are at the cusp of a change. The last time when I did mention that there was an inflation, I gave you a sense of it was coming from the energy complex, which might be slightly contrary from what most had expected, because I thought the view was that people were assuming that the metals complex was softening. This time around, I'm giving you a sense that what we're seeing is a deflation that is likely happening, and equally it seems to be happening across the board. Next, like the metals complex, I think the only exception that we're seeing is really on a few areas like electricals, plastics, polypropylenes and maybe rubber have some material groups which are showing an inflationary trend. For the most part, the rest of the commodity basket seems to be easing out. I wouldn't put a number to it at the moment only because, you know, some of these are still work in progress in terms of how we're seeing some of the negotiations come through. But the direction of trend, like I said, is one of an easing. Okay. Pricing? Pricing, I think, you know, at this stage, given the commodity context, I don't think we need to price out to recover costs on that account. If there are opportunities on pricing, you know, where we can think that there is a market opportunity in that space, maybe, but at the moment, no need for us to price out for cost recovery. Okay. Mark, anything? Mr. Singh, I'm sorry, you were not audible. No, I said, Your voice is breaking, sir. Okay. We'll move on to the next question from Mr. Pramod Kumar from UBS. Please go ahead. Thanks a lot for the opportunity and congratulations on a great financial trend. Before I move to the question, just a clarification on the other operating income. If you did mention that there was a slight change in accounting and there was slight lift which came in for the back. If you can just help us understand what should be the normalized other operating income as a percentage of revenues or and/or other way is like what are the kind of additional benefit which you had in the quarterly trend on account of that? Pramod, there isn't a change in accounting. It is the way it is accounted for. When you make an export, in the yesteryears it used to be MEIS scrips that used to give us an incentive. We now get RoDTEP, right? You could either use this for your own imports or technically you could sell them out. Yes. When you sell it out, there's a cost realization. That realization percentage gets accounted for quarter by quarter, depending on what the market's prevailing rate is, right? That market was a subdued market in the past. Those realizations have improved, right? Given the duration that we've had on our scrips and their expiry, we've liquidated in advance of those scrips in the current quarter at a realization that was higher than what it was in the preceding quarter. Okay. And so it- Yeah. That has led to a higher other operational income. That's one factor. The other factor is also incentives, which is fundamentally the PSI. Can you recall when we had spoken about the year-end results, we had called out the PSI working at that point of time because we had accrued for the full year of last year's PSI in the last quarter. Currently, we're now doing it month after month, and that number has stepped up in the current quarter relative to the last quarter, and it did not have a base in the same quarter of last year. These two are the incremental impacts of what has flown into the other operational income in the current quarter. Dinesh, just to make this easy to model, normally what is a good thumb rule in terms of as a percentage of export revenues that we should use this as a benchmark? On that note, if you can share what are the current quarter export revenue in rupee terms for you? Export revenues is about INR 3,800 crore. Yeah. On a rule of thumb, I don't think I can give you a number at this point in time. The RoDTEP entitlement, clearly you're aware, is about 2%. Of course, it layers on with all the other incentives that we might have. You know, and there's a whole host of stuff that gets booked in, Pramod Kumar, into this. At some point in time, maybe you can take the question offline with Anand Newar, but there is stuff which goes into scrap sales with various around various counts, various recoveries that happen. Some of those can be a bit lumpy. The largest chunk in this line is fundamentally incentives that come in from exports, some royalty that we receive on sales of all, and fundamentally incentives that the government announces for manufacturing. There are a few big chunks, which put our cost. Thanks for that, Dinesh. Yeah. The exception this time is the improved realization on a sizable chunk of NEIS scripts that we have sold that were nearing expiry and got realized in the current quarter. Thanks. Thanks for that, Dinesh. Rakesh, the question is on the domestic market share situation, because if you look at the October trend, we are running at around 9.5 on average, and even September was not a great month in terms of retail market share. This is despite the supply situation, as we've stated, has improved meaningfully for you on the semiconductor side. If you can just help us understand because historically we've seen when you come below 10%, it's not a great, it's not a healthy market share to be at, right? Because it causes a lot of trouble for the dealers and on the viability side. How should one look at a market share level which you would like to regain in the domestic market? What could be the implications of that on the margin band? Because as you said, there has to be a trade-off between the two. How are you thinking about it? Why I'm kind of probing on this is because in the past you've done a product intervention in terms of bringing in CT 100 and repositioning CT 100 to a lower price level. We've done all of that. How do we see the market share going forward? What, according to you, will drive the comeback on the market share side now? I'm not in sync with the numbers you are quoting. I think possibly the reason is, you're probably looking at the two-wheeler market. We don't look at the two-wheeler market because we are not addressing the scooters or let me say, ICE scooters and mopeds side. We are focused on the motorcycle segment. In that point, number one. Point number two is that we are looking at market share while we are talking to you, the media or within our own company in our reviews, not based on our shipments to the dealers, but based on registration, which almost 80%-90% you get good accuracy from the Vahan database. When I look at these two, the motorcycle market share and the Vahan through the retail data, we were at about 19% in FY 2022. That already, you know, by March we had started to face some shortages because of its dependencies, which were more particular to Bajaj Auto. We have talked about this quite transparently previously. While the overall industry is going up and down with the semiconductor shortage, Bajaj Auto in particular faced a little bit more than the industry. Not a little bit but quite a bit more than the industry because of our single source dependencies. Now these are what we corrected in the period of March to August. Because our supply fell dramatically, you know, in quarter one, we also lost retail market share, and it had plummeted to about 14%-15% during the quarter, which of course was causing us concern as to once the supplies were resumed, how quickly this market share can be reclaimed. If you look at the Vahan data, which is for September, which is the first full month of having supply, our retail market share has come back. It climbed back to 18%. We're still not at the 19%, which was there at the onset of this supply chain disruption. My hopes are telling me that if you look at, you know, second half September and you look at first half October, already we are touching those levels. Hopefully with the tailwind behind the 125 cc and above segments, which we are growing much faster than the industry, we will see this market share increase coming up. To address the second part of your question, which was you were talking about CT 100 and all that. Our approach is that we are not chasing market share at the expense of the profitability. We are not shaving off. The only exception we make to this is when we don't have a product solution, when we create a bridge where we say that, okay, you know, as observers may have seen that we were very early to spot the 125 cc trend, almost 18 months, 20 months back. But we didn't have a product. We've taken one of our lower cost SKUs and Pulsar 150 and priced it at almost a 125 level, which bought us some time in terms of giving us stay in the 125 cc segment while product developments were going on. As soon as the Pulsar 125 was ready, we introduced the Pulsar 125 and restored the prices of Pulsar 150 or in fact withdrew that SKU. It was a similar story with CT 100. When we did not have a product solution, we had used what we had and tried. The moment we have got Platina 100 with tube and 110 with the tubeless tires and the CT 110X and the CT 110. As soon as the product solutions were coming, we have corrected the price range. What I'm saying is that we are attacking the market consistently to upgrade it from drum to disc, from kickstart to electric start, from 100 cc to 125 cc, from 125 cc to 150 cc, from non-ABS to ABS. It's a constant maneuver. Sometimes you might see aberrations to this, you know, which are the two illustrations which I gave you. The central theme and central plank of our strategy is to leverage innovation and cause the market to upgrade. Thanks. Thanks. We move on to our next question from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead. Hi. My question pertains to the export demand. You alluded to the fact that we are seeing some signs of recovery almost in September. Are you seeing this trend across markets or this is more to do with LATAM and ASEAN and Africa is still under pressure? Can you please enlighten on that? See, ASEAN did not experience a downturn. In fact, the market improved because, you know, the pent-up demand because they finally emerged out of the COVID situation and demand has actually improved. There has been a slight decline in the LATAM sector, which is at about 5% level. There was almost a 20% decline in Africa, in most countries of Africa in the period of, I would say, April to July or so. You know, I must say that it's not easy to get data from most of the African countries as one kind of a. This is all put together. You know, so I'm quoting our internal assessment. Now, this -20% has sort of eased off and come down to -10% like-to-like period. We wanna watch it for a little bit more time and see whether it is improving. That, I think, in Africa. Similarly, we find that it is easing off a little bit in LATAM also. I also feel that ASEAN growth will now temper down a bit because the pent-up demand is. I would say the demand in the period of August to December would be better than the period of April to July. Okay. Any update on, you know, on the three-wheeler ban, both in Egypt as well as African markets? The three-wheeler ban in Egypt remains. As I've mentioned before, that we are through our partners over there, institutional partners over there in engagement with the Egyptian government to work out solutions to satisfy their requirements of you know, cleaner fuel and better aesthetics and lessen congestion, et cetera. You know, there is a huge need for mobility and transport in the Egyptian towns. The villages and the towns have got very narrow streets, so solutions of transport cannot be deployed there. We are in engagement, and as you know, these engagements take time. Yes, we are positive about the outcomes eventually when they happen. Okay. Thank you, sir. Mr. Jinesh Gandhi, I request you to come back in the queue. Okay. Ladies and gentlemen, kindly restrict your questions to two at a time. We have our next question from the line of Raghunandan M. N. from Emkay Global. Please go ahead. Thank you, sir, for the opportunity. Congratulations on great set of numbers. Two questions. Firstly, on the EV side, company's volumes in EVs are increasing, and there was a media interview which highlighted 6,000 units per month by March 2023. Can you indicate efforts on supply chain and production ramp-up? Also, if you can talk about upcoming EVs in two-wheeler, three-wheelers, and are you seeing any delays versus the initial plans? Thank you. You're right. The volumes are ramping up quite smartly and largely because we've got better supply chain visibility. See, the issue with supply chain visibility is also that it restricts the advancement of each network. Our model is that we think that it is important to have touch and feel in the network and dealerships and service centers, and we don't want to go and establish them before we have the ability to service that network with volume. The magnitude of volume is very important before we ask a dealer to invest in new network. That is why we've been calibrating the advancement of our network to the visibility in supply chain. Now, that is now coming and we are seeing a doubling every quarter. The number which you quoted about 6,000 was eminently doable. We are seeing visibility up to that, so we will be expanding the number of cities, I think. We had thought that we will go up to 100 cities by the end of the financial year, but I think we'll be at around 85 or so, because there was a period in Q2 till Q2 where, you know, supply didn't proceed as we had expected. We think that we have a very good product acceptance. The Chetak is a standout product. It stands out in terms of its elegant style. What echo we are receiving from the customers is that they're saying it is practical elegance, so its ergonomics, its reliability, its drive feel, et cetera, is really being appreciated, cutting across all walks of life. We feel we have to exhaust its potential with a singular focus, so we are focusing on that. While, as we are doing it, we are expanding our portfolio. Over the next 18 months or so, we will see at least 3 or 4 introductions which will attack new segments, not the same segments. It will be under the Chetak umbrella. See, we will attack new segments. In three-wheeler, I do recall that we have thought we were expected to be in the market by this time. As we have done our trials a few months ago, we have found that it is important to do and receive feedback from the drivers. Because the trial was being done in actual use, in consultation with a real life situation. We found that there are certain improvements to be made in the three-wheelers, so that the proposition can be appealing. To give you an understanding of what it takes. As you know, the Delhi government has issued almost 4,500 permits by May. Nobody can sell any new three-wheeler over there. It has to be electric. They have issued these 4,500 permits by May. Since last one year, but only 400 have got sold or maybe 500 have got sold. Why? It is because the current set of three-wheeler will be completely reject. e-3-wheeler, e-auto will be rejected by the market because they have a certain set of requirements. These numbers are all there, not that I've got some special intelligence. The reason why is because the potential customer for e-auto is a commercial guy. He has a very stringent requirement on range, on reliability, downtime, charging time. As we have taken the e-auto, we have understood this, and we want to come with a product which is near perfect rather than, you know, go with something which is not and try to improve it on the run. We have chosen the path of, you know, going back and tailoring our product to. You know, we've got very, very good engagement levels with the auto. We've got a very good brand credibility. We do not want to go there and soil the brand name. The trial has sort of extended. We are hoping that they will get completed by end of this calendar year and by, you know, before the financial year, we are able to put a product in commercially. We just want to make sure that we get the hot buttons right from a e-auto user's point of view. Don't suffer the same fate as some of the other companies are suffering in Delhi in this period. Thank you, sir, for the comprehensive answer. My second query to Dinesh, sir. Can you talk about what is the CapEx expectation? Given the increasing focus towards EVs, how would the share of CapEx be skewed towards EVs going forward? Thanks, Raghu, for your question. I think our CapEx estimate for the full year should be in the whereabouts of about INR 750 odd crores. It is a step up over the past. You will see from the published financials that we just put out, the CapEx for the first half is closer to about INR 335-INR 340 odd crores. Where most of the CapEx goes, the CapEx is going on really establishing the EV facility that we have for two-wheelers. The EV facility that we will have for three-wheelers in our volumes slot. For the expansion of a new site at our Jharkhand facility, for premium motorcycles, and then of course routine CapEx. These are the really large areas of where we are putting in our CapEx funds. Like I said, we expect that it will be in the ballpark of about INR 750 crores for this year. Got it, sir. Thank you. Phone back in the queue. Thank you. We have our next question from the line of Gunjan Prithyani from Bank of America. Please go ahead. Yeah. Hi. Thanks for taking my questions. Most of my questions have been answered. I just have two follow-ups. One on the export side there. I mean, you did mention these currency volatility impacting the outlook, but there was also this press talking about regulatory ban. Could you just share some, you know, thoughts on that? You know, what is it really happening on the ground? Is there an order in place or, you know, how should we read that ban? And in the same, you know, on the export side also, if you could explain the Q- on- Q realization, it seems to be almost 13%, 14% up. So, you know, that's on the export business. Sure. Yes. I think that the regulatory ban which you are referring to pertains to the news emanating out of Nigeria and not Egypt, because Egypt is old news which the government put into effect for three-wheelers in October last year, where we continue to ship out, where the government has allowed relevant orders to be shipped out. That's going on till March. I think you're not getting to that. You're referring to the motorcycle ban in Nigeria, which is the largest market in Africa. Here, there is no desert, but you know, a lot of governorates and municipalities take their own course of action. There is a ban in Lagos, which has actually been in place for some time now, but it has been enforced quite stringently. Why we have not called that out specifically is because in the overall scheme of things, it is as a percentage very small. Lagos market, Lagos city market is only about 10% of Nigeria. That has from 10% it has come down to 1%, 2%, because there are certain exceptions which are allowed. It has come down to that. You know, in the overall scheme of Nigeria or let me say Africa, it is not a very, very big number. Okay. Got it. The second question I had was on the market share in India, in the domestic business. You know, when I look at it, yes, you've been defending the market share at, you know, that similar levels of 18%, 19% in the bike segment. When I go down looking at the mix, of course, you know, 125 cc has been a, you know, made really good inroads. At the same time, we seem to be losing in the premium bike segment. Now, structurally, that's a great opportunity to be in. I I mean, Pulsar has sort of been losing market share in the last, you know, 12, 18 months. You know, what is the thought process in terms of fixing the market share in the premium segment? You know, what sort of interventions are we looking at, you know, to recoup that market share? Yeah. See, Gunjan, the most real impact on the Pulsar market share was because of the supply chain disruption, which caused us to, you know, lose market share at a retail level. As I said, forget the billing market share, we don't track that as much. That was very serious and most recent. If I take a 3-year long shot view of things, you're right, the market share has eroded, but we didn't lose it. I mean, you know, it was eroded by 2, 3, 4 percentage points, and which was causing us concern because we are, at the end of the day, the leaders in that segment. That has given rise to the initiative that we must now refresh the whole Pulsar platform. You know, this is one of the few instances we had a very successful platform, which was running at a 40%+ market share, and with 2-3 percentage point erosion, it was running at that level, but we still decided to refresh it. Not refresh it, in fact, completely upgrade it. Therefore, in a calibrated program, we launched the 250 in October last year. We launched the N160. We launched a couple of new products in the same platform in November, which has completely changed the face of Pulsar. This gives us an opportunity to completely change the customer experience as well as talk about the brand. You know, in auto there's nothing like a new product introduction to talk about the brand, otherwise everything else is stale news. With this, with the supply chain going off, I'm already seeing the market share approaching the fourth segment to 40% levels. I think they're about 37, 38. They're approaching 40% levels. In the next six months, as the whole Pulsar story plays out, we again think that we will be, you know, comfortably beyond the 40% level back to what we were, let's say, three years ago. Because we are getting a very good echo from the marketplace about the acceptance of the N160, which was very crucial. 250 was accepted well, but the 250 cc is a very small part of the whole motorcycle industry, and the 160, which is a more mass product. That's a good sort of happy outcome. Okay. Just the export realization, I'll join back with you if you can, you know, 13% you want to increase. Think about that, Gunjan. I think the question was on export realization. I think if you look at export volume, export volumes were down about 20%. And export revenues were down close to 10, 11%. Clearly what's able to bridge the bridge between volume to value is better mix. You know, with clearly a number of the African geographies showing some amount of pressure. There's been a lesser export of commuter bikes. Lower commuter bikes has led to just an improved mix. We've sold more commercial vehicles, and that's therefore aided mix as well. Then, of course, the last is better dollar realizations. Okay. Thank you very much. Thank you. We have our next question from the line of Chirag Shah from Nomura. Please go ahead. Yeah. Thanks for the opportunity, sir. Just, first, a housekeeping question. One, staff cost as percent of revenue decline, is there anything to call out in that or is it? It's a normalized trend? Sequential decline, Q- on- Q decline. Yeah. Chirag, if you're looking at the previous quarter versus the current quarter, a couple of things. One is, the last quarter was a quarter of increments, and therefore when you pay out increments, you also restate liability for various retirement benefits. Therefore, that was a one-time charge that got taken with the increment cycle last quarter. It did not reflect this time. The second was, of course, true up of various performance pay and other payoffs that had to happen, which have flown into the current quarter. Where we used to have cover relative to a charge of last quarter, we've not had the first element this time, which is the higher payout on account of, let's say, leave encashment. The second, as I mentioned, was the true up that we've accounted for in the current quarter of performance pay. Any comment on gross margin Q-on-Q decline? If I say sales minus raw material, actually the margin have declined sequentially despite a better dollar realization and some of the expense. Is it an even better mix? Is it more driven the regional mix or there are some element of pass-through that you did? I think, sir, on the overall picture, mix has been adverse at an overall entity level, purely because, you know, exports has been lower, domestic has been higher. Within domestic, there's been a significant build-up of the entry commuter segment as well. At an enterprise level, while we may have spoken about mix improving in various pockets of the business, at an overall enterprise level, mix will be adverse. Yeah, because it's 120 this quarter, reasonably sharp decline. That's not been the general trend for you. Okay. Sir, second is on the Chetak side, just because if I go back a quarter or so, our aspiration was to do 10,000 units a month kind of a run rate by Q4. Now the aspiration seems to have gone down significantly to 6,000. Any comment on that? Also if you can indicate the current state at ground level, given the government strong vigilance on localization proving and all those stuff. If you can comment on that, it will be helpful. See, the aspiration is still there. There is no reduction in the aspiration, but the numbers which we are telling you is based on our supply chain visibility. Like I said, it is very easy for us. We've got 773 dealers across the country, and it's very easy for us to flip a switch and deal these dealers sign these new deals and start to create a network for Chetak. We have to do it based on calibrated to the supply chain visibility. We are still looking at, you know, increasing that, and we will see in the next quarter or so, or let me say the next six months, the addition to our portfolio and see whether we can use new products to, you know, get to that kind of level. It's really driven by supply chain visibility. Sir, any comment on this? We are still waiting for the supply chain to change, in short. Sir, any comment on this subsidy issue as the government has increased its vigilance on and giving out or rolling out the subsidy. How should one look at that industry and who will benefit in that sense? Because it gives an opportunity for a player like you to ramp up at a faster pace. No. I'm sorry. I have not understood. Which subsidy are you talking about? No, recently government had indicated that OEMs have to prove the localization, and they are really monitoring the encashment of subsidy on the EV side. Chirag, you know, no new news for us because we've in any case been on the path of localization. I'm presuming you're talking about the FAME II subsidy, right? Is that- Yeah. Is that correct, sir? Yeah. Yeah. No different from that from our perspective. It's not new news. Of course, what they're doing is revising with the intention of incentivizing local manufacturing and localization of components. Like I said, nothing new from a financial perspective. We continue to remain compliant. We continue to deliver the threshold domestic value addition. The FAME II subsidy is being passed on to the customers through our dealerships as was stipulated. Not a new development. I'm not sure where the question is emanating from. Have we answered that or is there something else that came up there? No, thanks a lot, sir. Sir, if I can squeeze in one last question, and it would be helpful if you can highlight. There was a news article which indicates that there are five new names you have been trademarked, like Darkstar and Twinner and Dynamo, et cetera. Any comments, sir, from your side? Are there existing models in pipeline for which these are trademarked? Or and when can some of these see the light? See, this is an ongoing process. If you see over the last five years, there are many brand names which are registered because you've got to move fast and we obviously know the kind of product pipeline which we are having over the next three to five years. At this stage, we would not like to go into, you know, what new brand or what new product is being launched. It's a regular exercise. We spot a good brand name, the management will register it for future use. Okay. Thank you very much, and have a good one. Thank you. I would now like to hand the conference over to Mr. Anand Newar for closing comments. Over to you, sir. Thank you very much for joining the call. I'm happy to take the questions after this call, with all those who wanted to have a conversation with this. Thank you, everyone, and a very happy Diwali. Thank you, sir. On behalf of Bajaj Auto Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.