Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 Post-Results Conference Call of Bosch Limited, hosted by Batlivala & Karani Securities India Pvt Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayaraj from Batlivala & Karani Securities India Pvt Ltd. Thank you, and over to you, sir. Thanks, Prashant. On behalf of B&K Securities, welcome to Bosch Limited FY 2022-2023 Post-Results Conference Call. From Bosch Limited management, we have with us today Mr. Soumitra Bhattacharya, Managing Director, Mr. Guruprasad Mudlapur, Chief Technology Officer, and Ms. Karin Gilges, Chief Financial Officer. Mr. Soumitra Bhattacharya will make a PowerPoint presentation, and we will follow with a question-and-answer session. To view the PowerPoint presentation by Mr. Bhattacharya, please click the PPT link, which we have provided in the conference call invite. Over to you, sir. Thank you, Mr. Annamalai Jayaraj, for your continued support. Friends and colleagues, good afternoon, and welcome to this part of the call. I sincerely hope that all of you are healthy and keeping safe. Today we had our annual general meeting, and it was a very positive meeting. We would like to first share with you the macroeconomic policies, followed by later an aftermarket automotive market update, and then walk you through the financials. Finally, I'll end with the highlights for the quarter, which is affecting our business. The global economy is facing a downward risk on growth, and we all know that, because there is very high inflation happening. Some of the large economies, including the U.S., have already started contracting. While the central banks continued to hike key policy rates through the last few weeks, one has noticed that the narrative is slowly shifting from inflation to growth. Coming to the Indian economy, a host of indicators suggest that the economic recovery is ongoing. The PMIs continue to be in expansion. GST collections you've already seen are at all-time high and continue to be robust. Capacity utilization levels are also inching upwards, and investments for new projects are also showing a positive movement. Employment conditions and supply chain pressures, there are of course tight situations, but relatively they are easing a little bit. We see a good progress of the monsoon. Of course, colleagues, the monsoon is still not totally even, though of course, reservoirs are getting filled up. Also, the current sowing has been progressive. We see a positive year-on-year change thus far. That said, like the rest of the world, India too is facing a high inflation, which has resulted in the RBI revising the GDP forecast for FY 2023, now down to 7.2%, and also hiking the policy rate by 90 basis points and the CRR by 50 basis points. I also have to say, colleagues, that the RBI governor is doing a very splendid job in trying his best to ensure India stays in a relatively sweeter spot. Overall, the automotive market production has increased by 31% in the current quarter, with the exclusion of two-wheeler. The bulk of the increase can be contributed to the lower base of April-June 2021, which was, as all of us know, affected by the COVID second wave. Hence, we've done a comparison with the January-March 2022 quarter, or which is the quarter four of FY 2021-2022. Here we see it largely flat. Now, this is driven by seasonality. Historically, the first quarter of a financial year is lower than the last quarter of the fiscal year. The chip shortages in the industry which affected during April and May production of passenger cars and LCV. From June, I have to also say that there has been in the industry an improvement in the chip supply. While we are aware that in June, there was a one-week shutdown at Suzuki for maintenance. Within the segments of PC and LCV, which were generally flat or minor degrowth, this has been driven by a slightly higher, backlog order and waiting period. Again, I have to say, you can't take it generically. You have to remember that these order backlogs are defined on models and mixes. For example, in fast cars, we see that for the automatic and the higher end, the backlog is still relatively high. The tractor market grew by double digits in April-June 2022. This has been driven by a lower base of January-March 2022. The kharif sowing reported a year-on-year decline of 5.3% as on July 1st, 2022. Now, two-wheeler consumer sentiments are still low. This is partly due to the price hike witnessed at the entry-level bikes. BS6 variants of these bikes are in the range of INR 70,000-INR 90,000 against INR 50,000-INR 60,000 for BS4 bikes. Chip shortages in premium segment also led to lower inventory and larger waiting periods. Now let's look at the automotive market outlook for 2022. In this slide, each row represents a particular segment. For instance, the first row represents pass car, followed by HCV, then LCV, tractors, two-wheelers and three-wheeler segment respectively. The first column represents 2018, and here I've referred to the calendar year production volume, which is considered as one of the best years in the Indian automotive industry and the industry was at its peak. The second column represents the 2020 production volume. Third column represents the 2021 production volume. The fourth represents the first half of 2022. The fifth and sixth represent the quarter three and quarter four forecast. The last column represents the expected calendar year 2022 volumes. Based on these numbers, we are expecting a better year for PC and LCV segments, and we are likely to reach the 2018 peak. Heavy commercial vehicles, two-wheeler and three-wheeler recovery will take quite some time, as we all know, to reach the peak of 2018. Tractors, of course, was the front runner which peaked already last year, and we are expecting on a high base, a minor decline this year. Coming to profitability. The overall revenue from operations for April to June 2022 stood at INR 35,444 million or INR 3,544 crore, which is an increase of approximately 45% as compared to the corresponding period of the previous year. Please remember, the previous year quarter was badly hit by COVID. Now here, the automotive sales grew by about 48%, largely driven by Powertrain, while the non-automotive sales increased by about 54%, largely led by Power Tools. Overall, product sales have increased by about 49%, primarily on account of a low base of April-June 2021, as I mentioned earlier, owing to the second wave of COVID-19 pandemic. Income from services mainly comprises of R&D services provided to OEMs and Bosch Germany. While the billing of our R&D services was at a healthy INR 1.1 billion for the quarter, the income recognized in the books based on customer SOP dates was about INR 628 million. The balance income would get recognized in the subsequent quarter based on project completion dates of customers. This is very important to understand, colleagues, that what is it that we build and what is it that, you know, we have recognized. The other operating income includes some income from lease rentals, miscellaneous income and export incentives. In April-June 2022, we have received the installment of our claim for refund of taxes under the Mega Project scheme of the Government of Maharashtra pertaining to our Nashik plant and also increase in miscellaneous income. Hence, other operating income for the current quarter was relatively higher. Our material cost as a percentage of total revenue from operations has increased from about 59% in April-June 2021 to about 64.6% in April-June 2022. This is mainly due to three reasons. A, change in product mix over the same quarter of the previous year. B, impact of transfer pricing adjustments with respect to imported traded goods. Three, most importantly, raw material price increase. Sequentially, the material cost as a percentage of total revenue from operations has remained at 64.56%. Our employee cost for April-June 2022 is INR 270 crore or INR 2,702 million, as compared to INR 271 crore in April-June 2021. Hence, as a percentage of revenue from operations, employee costs improved from 11.11% in April-June 2021 to 7.6% in April-June 2022, mainly due to higher revenue from operations compared to the same quarter of the previous year. Our other expenses stood at INR 553 crores, approximately 15% of total revenue in April-June 2022, as compared to INR 428 crores with a 17.5% of total revenue in April-June 2021. Increase is in line with increase in sales, increased spending on new businesses that we are doing from Bosch Limited, as well as increased advertisement expenditure that we've done specifically for our Power Tools business. Our depreciation for the current quarter is at INR 65 crores, 1.8% of the total revenue, as compared to the INR 67 crores or 2.7% of total revenue in April-June 2021. Our operating profits stood at INR 385 crores in April-June 2022, as compared to INR 240 crores in April-June 2021, which is an increase of 61%. Our other income primarily, which consists of interest on fixed deposits, change in market value of mutual funds which are debt-based. Other income has reduced from INR 99 crores in April-June 2021 to INR 57 crores in April-June 2022, mainly on account of reduction in market value of mutual funds in the current quarter. This is driven by the sell-off in the bond yield. During April-June 2022, RBI has increased the repo rate by 90 basis points. That said, the sovereign bond market has sold off between 90 - 50 basis points across the one- to five-year segment. Our average portfolio duration has been hence reduced from 1.5 years to 1.1 years. For the quarter ended June 2022, your company posted a profit before tax or PBT of INR 438 crores as compared to INR 335 crores in June 2021. As a percentage of total revenue from operations, PBT or profit before tax stood at 12.3% of total revenue in the current quarter. Profit after tax or PAT for the quarter ended June 2022 stood at INR 334 crores, which is 9.4% of the total revenue from operations. Profit after tax in June 2021 was INR 260 crores. Bosch has set foot in India as early as 1922 with a sales office in Calcutta, now Kolkata. The history of our company is an invaluable part of its existence. For over 60 years, Bosch India has traversed a remarkable journey in the Indian automotive industry and for 69 years, Make in India. For the last five years, Bosch has invested around EUR 100 million or INR 800 crores developing our smart campus, which we call the Spark.NXT campus, which has a capacity to potentially house 10,000 Bosch associates and was officially opened at a ceremony inaugurated virtually by the Prime Minister on 30th June this year. The 76 acres site is Bosch's first smart campus in India and features multiple smart solutions based on sustainability, security, user experience for our associates, customers, and visitors. Not only did the Prime Minister inaugurate our campus, but it was done in the presence of our honorable Chief Minister of Karnataka, Mr. Basavaraj Bommai, and our Bosch Global Board of Management member, Ms. Filiz Albrecht. The campus will meet up to 85% of its total energy needs with in-house solar panels and the purchase of green g roup captive power. Almost two-thirds of the annual domestic water demand at Bosch in India is set to meet through rainwater harvesting projects. The campus is a testimony to Bosch's existence as an AIoT company aligned with India's program for carbon neutrality and sustainable targets. By the way, I would like to remind all colleagues that Bosch worldwide and Bosch India attained carbon neutrality under Scope 1 and 2 already in 2020. Bosch India will continue to invest in technologies which are economical, sustainable, safe, and secure. I would like to thank you on behalf of our leadership team for your contribution, your support, and for your patient listening throughout the call. Together as a leadership team, we will now address your queries, and thank you very much. Your questions, please. 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 your touchtone telephone. If you wish to withdraw 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. A reminder to the participants, anyone who wishes to ask a question may press star and one at this time. The first question is from the line of Pramod Kumar from UBS. Please go ahead. Yeah. Thanks a lot for the opportunity, sir. My first question is on the electrification bit. If you can share your thoughts on the two-wheeler electrification, which is happening so rapidly. Is there anything which you would like to highlight in terms of new order win, or how the content for Bosch is kind of keeping pace with the rapid electrification that we're seeing in the space? If you can throw some color on that. I will hand over to our Chief Technology Officer who also heads our electrification project. Over to you, Guru. Thank you, Soumitra. Specifically on the two-wheeler electrification topics you asked, we have a full portfolio from the motors, all the power electronics and of course, battery system. We have been in first generation products with several OEMs. We continue to have further design-ins with new OEMs right now. We are also discussing on getting our batteries, which are, by the way, designed to very high levels of safety and performance, get designed into new OEMs as we speak today. You will of course hear more about where they are and which OEM, as and when the OEMs announce their. Thank you, sir. Second question is on the hybrid side. Given the expectation of electrification and in the car industry as well, the new launches where Maruti Suzuki are talking about strong hybrid technology in India, what are your thoughts on that broad area of technology and its relevance in India? Also, if you can kindly confirm whether you are participating in this technology rollout with Maruti Suzuki. I cannot comment specifically on an engagement with an OEM right now in this call, but we have a full portfolio of solutions for the hybrid applications as well. This is something we've offered to OEMs already for the last six, seven years now. We've done that. This is the operator, sir. We are not able to hear you. Ladies and gentlemen, request you all to please stay connected while we check the line for the management. Thank you. Ladies and gentlemen, thank you for patiently waiting. The line for the management is reconnected. Over to you, sir. Yeah. Thank you. Sorry about this glitch. I don't know where you lost us, but I'll repeat the answer again. I said we cannot comment on a specific engagement with an OEM on hybrid topics right now. You know, at least not during this call. But in general, we have a very good portfolio of solutions for the hybrid applications. In fact, we've been one of the leaders, global leaders in hybrid batteries for a long time now. We have offered our solutions also to the Indian OEM. In terms of its applicability and usefulness, I think it's a very debatable point in terms of what efficiencies it brings in. As an intermediate technology towards full electrification, probably it has a value, but the ultimate choice is with the OEMs and in terms of how they can show economics to the consumer. We will of course provide technologies as they ask. We have the full portfolio here. No. Sorry for that. Just the reason I'm asking this is that to confirm in a way Bosch has a presence in India on this because the idea of this technology is to grab market share both from petrol and diesel categories. Diesel is quite relevant in this segment of mid SUVs. It is a technology, a field where we are reasonably stronger, relatively stronger. Just wanted to confirm whether in India we have the presence to understand the implications on the content share and if there's a meaningful shift towards strong hybrid. I think I understand the sensitivity around not disclosing specific details, but I just want to understand if a OEM were to come to you today requesting for a strong hybrid solution, what would be the timeline for them for you to kind of meet that requirement and the OEM to commercially launch the product? I'm not saying that if hybrid as a technology picks up, more and more OEMs would want to adapt to that. If you can just help us understand from a project timeline perspective, what could be the minimum to maximum duration by when an OEM can follow this particular path? I mean, it's a very generic question. Hybrid, as I said, hybrid technology is available, and we've offered it to several OEMs globally and also in India. You are now referring to from the start of offer till an OEM gets into production, what would be the sort of timeline to introduce technologies? I would say typically, and this is a very generic statement, again, it's typically between 12-18 months. Fair enough. Thanks a lot. I'll come back with you. Thank you. Thank you. The next question is from the line of Sonal Gupta from L&T Mutual Fund. Please go ahead. Good evening, and thanks for taking my question. Just a related thing, given that, we are seeing SUVs sort of gaining share in the passenger vehicle market, and while diesel is also stronger, what we are seeing is that across OEMs there's clearly gasoline direct injection has also gained considerable share. Just want to understand, in terms of, I mean, are you participating in that market, at least with a few OEMs? That was my first question. Very important and good question. We have a strong presence both in diesel and in gasoline. GDI is segmentalized, as you are aware. In India, the utility vehicle market is also broken up into different parts. There are different types of SUVs. While we started with diesel long time ago, we came in with gasoline relatively later than diesel, but we have progressed significantly. Answer is yes, we do participate. I would like to also mention that while electrification is a buzzword, ICE in India is going to be there for a long time. Today, electrification is at a very nascent stage. By 2030, while we expect electrification to increase and improve, and the most optimal in India could be an e-mobility case of 2030 to the extent of 30%, 70% will still continue to remain ICE. Also, I think GDI, you can observe in the market, has started to come into prominence, passenger car segment as well. Typically OEMs launch 1 liter GDI, 1.5 liter GDI and also a 1 liter normal car. It's not just the fuel segment, but also the passenger car segment. Got it, sir. Sir, just when you talked about the BS6 transition, I think a year or a few years back, actually, you talked about the fact that the OHT segment and the construction equipment space will also be a meaningful part of your BS6 transition order book. Given the changes that have been. I mean, timelines have been pushed in that space, et cetera. Just want to understand, like, would you say that now a substantial portion of that has got into production, or there is still a lot of a major chunk of that transition is still left? You have to segregate on the emission norms between vehicles on BS6 versus example tractors or off-highway market. Yes, Bosch is playing in every area of the emission legislation, and like BS4 to BS6, also for the emission change norms, either for CPCB or for TREM IV to TREM V, we are fully in, and I am happy to say that we have a pretty solid order book. Now, of course, we don't give you the acquisitions customer-wise, but I can confirm, like we did for BS4 to BS6 transition, that we have done well. We are continuing to acquire and we are also happy that the Government of India is laying down the timelines and are generally following it. Some small shifts have happened, but generally following. Got it, sir. Just my last question, if I may please, is that we've seen a step-up in the RM cost to sales over the last couple of quarters, where it's gone to over to almost like 65%. I understand this might be due to, I mean, the commodity prices spiking up. To that extent, as we are now seeing some moderation in commodity prices, should we expect that these numbers should moderate and we should see some benefit of commodity price moderation? Good question again, Sonal. I already in my talk, I gave you that there were three elements of the reason for this material cost increase. You referred to one, a very important one, which is raw material price increase. We are working very closely with a win-win situation with our OEMs and our other customers on raw material price increases, logistic price increases, and electronics price increases. Because, you know, every organization and every segment, whether it's OEM, tier one, tier two, we can absorb some amount, and we can also not absorb some amount. I call this a win-win situation where even finally the OEM can pass on a certain amount into the customers. If I summarize a complex topic, you will see that, generally the OEMs have the mix and model changes have increased, led to you know the price tags being relatively higher compared to the past. If you see, this also then has to flow down into tier one like us and tier two, and we are conscious of this, and we are working on this. However, as I mentioned, in a fair and win-win situation. Got it, sir. Great. Thank you so much for taking my questions. Thank you. Thank you so much. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead. Hi, sir. First question pertains to just clarification on the RM cost side. Clearly there is some impact of Forex, adverse Forex movement on the RM side. For us, does Forex cost pass through or that is on negotiation basis? I didn't get the name. Is it? Jinesh. Jinesh? Jinesh Gandhi. Thank you, Jinesh. We have a very robust system of contracting, Jinesh. Of course, it's customer to customer. I'm sure you followed our company for quite a while. Our contracting process with our OEMs and also with others is robust right here. You know, it depends on case to case. We do ensure that risks are mitigated including Forex as well as. Very importantly, we also have a very strong treasury, and we do a very strong risk management through hedging. On both fronts, whether it's a customer front, where we have a very transparent but solid contracting. As also in our own internal processes, because Bosch is a very process-oriented company, we have strong processes on risk management in our Forex including very systematic hedging. Okay, great. Second question pertains to the BS6 phase II, which will be effective from April 2023. How do we see that as the transition influencing our product offerings? Jinesh, you know, this part of it, what you're referring to, you know, we call it in Bosch core and then revising the core. Bosch is very strong both in core and in revising the core in Bosch India, that is Bosch Limited, in the automotive area and therefore the powertrain area. I mentioned to you have to look at the emission and legislation roadmap for all elements of mobility. I can assure you and your colleagues that Bosch plays on these areas front-ended, just like we have spoken BS6, so I don't have to go through every element. Where we are very strongly front-ended, where we can support our customers from inception right up to SOP. I think that's our USP on our strength. I also mentioned to you, Jinesh, that we have the largest R&D center in India. This is not just for Powertrain, but the largest R&D center across all our sectors outside Germany. These things we tackle. My final point, which you have not asked but for this to be answered for some of you all who may ask this question. As my colleague mentioned, our parent is very strong on the transitioning to the transformation which will happen in India. For example, in the last 12 years, our parent has spent between you know EUR 450 million-EUR 500 million for the last 12 years on electrification, hydrogen ICE, hydrogen FCEV, stationary fuel cell, and so on, so forth. We have very strong connections with our parents. Then we do localization here. Finally, we give innovative and affordable solutions to India. Core and revive, and then the transformation. I end by saying our Spark.NXT. When you go to the logo of Bosch in India a hundred years is exactly this. What is our next spark to work with the customers and consumers across different segments to provide technical and innovative solutions for the future? Got it. Any thoughts on how diesel on the passenger vehicle side will get impacted under BS6 phase II or RDE norms? Jinesh, we've come to a settling point diesel. This question which you had asked is a very valid question, for example, two years ago. If you remember, a few years ago, four or five years ago, India touched the peak at 48% of diesel, maybe half of. It climbed, you know, from 15%. Today at 18%-20% of diesel share, exactly on passenger cars and utility vehicles, there's something that is settling down. Of course, content per vehicle is going up where Bosch has a place. Of course, there's many segments, like for example, like EV, where people still prefer the higher torque and therefore diesel. We believe this is going to stay there. We believe ICE will still play a dominant role. We believe that the transitioning and the transformation will also happen, all of which we are doing. Of course, Bosch Limited also works with our sister companies. For example, you know, we work very closely with our sister company which makes the ECUs which go through Bosch Limited finally. Quite a few things also then come our sister company goes through Bosch Limited. Got it. Thanks. I'll send it back. Thank you. Thank you. The next question is from the line of Rajesh Ranganathan from Doric Capital. Please go ahead. Hi. Thanks for the opportunity. While diesel has settled down to a certain level, CNG has been increasing in India, both in passenger cars and in LCVs. Can you please comment about our strength in CNG and how that compares to, say, our strength in diesel? Hello. Okay. CNG is a part of our portfolio also. You know, Bosch has CNG solutions. Bosch has solutions for flex fuel. We see that in certain segments, you're right. We see in certain cities, again, you're right. Right now, if you look at the overall percentage, it's relatively still pretty low. If you look at segment wise and if you look at cities, it's happening. Bosch has a play on CNG and we also have solutions for it. Would you be able to comment on our relative strength between, say, our strength in diesel versus CNG? Look, Rajesh, I'll give you a small example. You know, Bosch came to India in 1953 with inline pumps, diesel. Relatively, we came later into gasoline. Look at our presence in gasoline today. In a market which is relatively more fragmented, it's pretty strong. In CNG also we have the technology. You have to yourself understand and accept that CNG in relation to rollout in India is very much dependent likely be on infrastructure. While certain cities like Delhi have had after time improved infrastructure, CNG has not been a rollout across India. It will take time for that to happen. It will be city-specific based on infrastructure and acceptance, and it will be segment specific. We have the strength. Bosch, our parent and Bosch India is a full portfolio organization, and we will use our strength whenever required based on timing, to you know get deeper into the market. The question is valid. The total weightage is still relatively low and we have our entire portfolio. Thank you. With respect to, you know, in the previous calls we've discussed this and you mentioned that you have a roadmap for localization and you also participated in the government scheme for localization. You had a plan for discussing with the global Bosch organization for potentially making India a hub for export, especially for diesel related technologies. If you could comment on these three in terms of what has been the progress over the last few months, in terms of what decisions have been made or how much progress has been made in these three areas. First question is on PLI. Yes, the Bosch Group has applied, including Bosch Limited, and we've been approved. We are eligible and we will work and we are working on that. The second part is in relation to diesel. We retain our strengths in diesel and gasoline and allied areas. We have brought in for our various plants different elements from our various sister companies or even countries, and done certain amount of strong consolidation. We will continue to look and focus wherever it makes sense for our company, Bosch Group as a whole. We will continue to remain strongly local for local. In relation to export, you know, I have mentioned that we have strong focus on growth in the domestic market, which you will continue to see this year and the years to come. This year, I mean the year 2022-2023 over the previous fiscal. Now diesel, you know, be in a bandwidth depending on what we need to do as a policy and strategy between 9%-12% on export. Perhaps the max we could go over the years would be 15%, but our domestic and local play will have the highest weightage as before. There's a clear strategy on what we will do and what we will not do. Finally on diesel, yes, I endorse your direction what you mentioned. We will use our strength to do further consolidations. On localization, if you could comment on the progress. On localization, we have a very systematic localization plan, partly driven by PLI, but basically driven by business. We have always focused and met localization targets right from the time of nozzle holder assemblies, common rail injectors, pumps. We have multiple plants in India, and we will continue doing that. Again, I make one point very clear. We will not do localization for localization. We will do when it makes sense. Sometimes, you know, this question is a little counterproductive because if you localize the localization and it is not meaningful, then you actually don't aid business. We have a robust process. We have done it in the past, we are continuing to do it, and we'll do it in the future, but at the right time. Thank you so much, and I wish you all best luck. Thank you. Thank you, Rajesh. Thank you. The next question is from the line of Sanjaya Satapathy from Ampersand. Please go ahead. Hi, sir. Thank you a lot for the opportunity and also congrats on the decent set of results. You have already discussed about localization plans. If you can just help us in understanding that current profitability, the profit margin of yours is really far from the 18%-19% kind of margin that we used to enjoy pre-COVID and BS6. Is there a possibility that we can go back to those kind of margin in near future? Rajesh, that's a very leading question, and it's also a guidance question. Very politely, but as always, I'll have to tell you, A, we do not give guidance, and B, we don't take leading questions. However, I'll give you an answer in a generic way for you to get a direction. You know, if you look at Bosch Limited, we have also been investing a certain percentage of our profits for new business areas very actively. This is what is called as preparing the soil for the future. We will spend good amount of money in our electrification process, in our hydrogen roadmap, in different elements for the future. This is something which you get payback for the future. The request I have to you and your community is, please look at the mid and long term and not quarter to quarter, because you should not get into a euphoria on a quarterly result which goes up or in a bit of a depression when it goes down. This company is prepared to invest for the future, which will bring in future sustainable benefits with the optimal profit. Second, we have very strict cost control processes. Third, very importantly, Rajesh, we have rightsized the company. If many of the analysts will know that this company had a headcount some seven, eight years ago of 11,000-12,000 people. Today, if you look at the permanent headcount, we are nearly half, and therefore our productivity levels are very high. If you remember, many of you I mentioned when you asked why is EBITDA down to 7%, in 2020 and 2021 we did a CR program and one of the sub-elements was we spent INR 750 crore each year for the CR redeployment, reskill, and restructure. Today see, you're just seeing the financial result on personnel cost. What you are not seeing is the huge competency building that we are doing, whether it's digital fluency, you're not seeing that Bosch Limited has climbed to the top quartile of the Great Place to Work and is now amongst the best workplaces in automotive component and auto companies. The good news is, three days ago when we did our dipstick, we have further improved. You must understand that we are tackling business in a holistic way. People who are the greatest assets who make and take this company forward. Infrastructure. We gave you an example of the 76-acre campus, which is one of the smartest and the best. Our average age of this company, Bosch Limited, is now down to 37. Most importantly, looking at future mix of talent linked to technology. In summary, I would say. This you also see in our growth in Powertrain, and then you see our growth in Aftermarket and all this profitable growth. Finally, you will see that we will continue to invest significant sums and optimal sums for new technologies and still give a decent return, which I call a double-digit EBITDA. Understood. Sir, thank you a lot, sir. My name to start with is Sanjaya. Sorry, Sanjaya. Correcting it. Thanks a lot for this elaborate answer. When you were saying that you are currently investing for electric mobility and all those new technology, so it seems like your business development related expenses are on the higher side. When I'm looking at the cost mix, which you have, as you correctly said, your staff costs have fallen compared to what used to be as a percentage of sales. Your other expenses and most other things have fallen. The only thing where the increase is happening in the material cost as a percentage of sales, which used to be 55% of sales, has gone up to upwards of 60%. Can you clarify if that is where all your development costs are sitting? And or that the imported components are so much higher nowadays that the raw material costs have gone up and you will have to do lot of input substitution as well as localization. And those will be very critical and really long drawn-out process that is at least three, four years away before you kind of settle into your historical margin level. Sanjaya, that's again a leading question. Yeah? You know it and I know it. But I'll answer part of it. Basically, in terms of material cost, you have to understand a product mix change has changed the material cost for not just us, the entire industry. That correction, I think I would request from you and the community. BS4 to BS6 changed the material content for everyone. You added exhaust gas treatment. Yeah? And you added a few other things. Your material content will go up if your product mix changes. Yes. Hello? Hello, Mr. Satapathy? Yeah. Does that answer your question, sir? I couldn't hear if there is any. I can- Further matter. Sir, we are not able to hear you. Ladies and gentlemen, request you all to please stay connected while we check the line for the management. Ladies and gentlemen, thank you for patiently waiting. The line for the management is reconnected. Over to you, sir. Sanjaya, I'm back. I heard what you were asking, and I'm gonna keep my answer short. Sure, sir. The material content, if it goes up, there are different elements to it, and one part is the mix. I gave you an example of BS4 to BS6, and that can be applied as there. This is not for Bosch only, this is for the industry. Please understand that. Second is you can cover the mix with the right optimal pricing, which we do. Third is raw material price increases across the world has happened. I suppose you would agree to that on RMI, ECI and LCI. That we are tackling. Yeah? In summary, we have a clear localization plan for product wise and also systems wise. Secondly, we do by design a mix change which requires for different, norms and emissions, and legislations which are bringing us closer to Europe and reducing the gap in number of years in terms of technology. Third, we are very, very clear of, you know, because some of your colleagues asked on Forex and XYZ, which we have been doing for decades and we will do. In summary, when you have, EBIT, you have to manage your EBIT to also invest for the future, which in the last few years we started aggressively also doing. After all this, we will still deliver a double-digit EBIT. Thank you a lot, Vinny. Wish you all the best, and we simply wish that you'll bounce back to sector-leading margin sometime soon. Thank you, Sanjaya. Thank you. The next question is from the line of Ravi Purohit from Securities Investment Management. Please go ahead. Hi. Good evening, gentlemen. Thanks for taking my question. Sir, you know, from whatever you've mentioned so far in the call about localization, is it fair to assume that all our future localization programs are going to be driven through the PLI-led CapEx? If yes, then, does it require us to set up new greenfield manufacturing units to participate in this PLI, or whether the existing plants will suffice for us to kind of, you know, do this PLI-led CapEx? Second is, can you please provide an update on the 100% subsidiary which you had created two years back, to take the, you know, the benefit of the new tax income tax dispensation at 15%. Because the manufacturing will need to start by March 2024. How are we and where are we for that company? Okay, Ravi. Very briefly, our localization, again, I have mentioned to you before, but I'll say it, of course we have applied for the PLI and of course we are gonna work on the PLI, but we have been doing localization also without the PLI. The answer is and, not or. Even during PLI, we'll use PLI and we will still continue to do localization. In relation to the 15% company, we have something in it. We are looking for other things which are meaningful, and we are not doing it for the tax benefit. In relation to our plants, we have the adequate capacity both for existing as well as future expansions, as also the people. Finally, are we willing to invest money into all this, either through P&L or for CapEx? You have seen we have done it year-wise. Even during COVID, we did not stop either on the revenue or on the CapEx, we did not go shy. We'll continue this. I want to make one point, Ravi, to you, but also to all colleagues. Bosch Limited and Bosch in India is a company which is a long-standing player, which looks at putting its actions for the mid and long run, not on a quarter-to-quarter basis. This you have to appreciate, understand, and also please accept. In case of PLI does not require that, it needs to be greenfield. PLI has certain definition of how it qualifies. For example, the products need to be advanced automotive technologies or the value add needs to be at a certain level and so on. There is no requirement that it needs to be greenfield. Okay. Thanks for the clarification. Anyway, just to clarify to Mr. Bhattacharya also, we are not really seeking answers for quarter-on-quarter basis. All our questions and, you know, we could, you know, go back and check on all the calls that we've been there. Our questions are always over the next three to five years, what is our horizon? What is the plan? What is the strategy? Please be rest assured our focus is not on quarter-to-quarter basis. Thank you. I'm delighted, Sanjaya. Sorry. Ravi. Yeah. With that, I think that is the last question, and look forward to again contacting you all either in our future meetings, yeah. Sir, should we conclude the call? Thank you very much. Thank you. Ladies and gentlemen, on behalf of Batlivala & Karani Securities India Pvt Ltd, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.