Good evening, ladies and gentlemen. I regret the delay in the commencement of the call. On behalf of Emkay Global Financial Services, I take the opportunity to welcome you all to Eicher Motors Q4 FY 2021 and full year FY 2021 earnings call webinar. From the management team, we have Mr. Siddhartha Lal, MD of Eicher Motors, Mr. Vinod Dasari, CEO of Royal Enfield, Mr. Kaleeswaran Arunachalam, CFO of Eicher Motors. We thank the management for providing us the opportunity to host the call. We request the management for opening remarks, which can be followed by a Q&A session. Over to you, sir. Hello, good evening, everybody, and sorry for holding up this call. Thank you very much, Emkay, for having this call, and I hope all of you are safe and healthy, and your families, too. Welcome to the Q4 and FY 2021 earnings call for Eicher Motors Limited. After a soft start to the year, the automotive industry did witness a good pickup in demand as the economy started opening up and the COVID situation began to ease during the latter part of the year. Buoyant demand, both from rural and urban segments, also supported by preference of personal mobility, helped the motorcycle industry register a strong growth of 20% in the second half of 2020/2021 over the same period in 2019/2020. A faster recovery in demand and excellent response to the launch of our all-new Meteor 350 resulted in a very strong order book for Royal Enfield. Our international markets too showed good recovery as the Americas region recorded a double-digit growth in a very tough year. The truck industry also showed equal resilience with great recovery seen in the latter half of the year. VECV, our joint venture with Volvo, gained market share across segments. In the heavy-duty segment, we grew by 6% in 2020/21, while the industry declined by 21%, and we achieved a highest-ever market share of 7% in the heavy-duty segment. Now, in the wake of the emergence of the second wave of COVID in India, we expect the near-term demand and supply situation to be volatile in the industry. We continue to monitor the situation, but overall, we are confident of our strong business fundamentals to be able to withstand such headwinds. Last year, we committed INR 50 crores to the COVID relief and rehabilitation, and we've committed an additional INR 20 crores recently. We're working with state governments, district administrators, and hospitals to provide medical equipment, medicines, and other medical consumables to aid quick response. An update on the financials for the fourth quarter and for the financial year ending March 2021. We're happy to report a good quarter with significant growth across key financials. Our revenue for quarter four was the highest-ever revenue for EML at INR 2,940 crores, up 33% from INR 2,208 crores last year. For the full year, our revenue was INR 8,720 crores, which is down 5% from INR 9,154 crores last year, largely due to a very curtailed Q1 due to the first COVID situation. Our EBITDA for quarter four was at INR 634 crores, up 47% from INR 432 crores last year. For the full year, our EBITDA was at INR 1,781 crores, down 18% from INR 2,180 crores last year. EBITDA margin for quarter four was at 21.6% against 19.6 last year, 25% year-on-year increase in volumes. For the financial year, it was 24% against 23.8% last year, which was due to the 13% decline in volumes. Overall, our profit after tax for quarter four was at INR 526 crores, up 73% from INR 304 crores. For the financial year, our profit after tax was INR 1,347 crores, down 26% from INR 1,827 crores last year. That's the overall financials and update. I hand over to Mr. Vinod Dasari, the CEO of Royal Enfield, to give an update on Royal Enfield. Thank you. Thank you, Siddhartha. Let me give you an update on Royal Enfield for Q4 and for FY 2021. In Q4, we sold 203,000 motorcycles, which is up about 25% over last year. Our exports were up 72% at 13,700. We've got strong response across the geographies. The launch of Meteor helped as well as the network expansion. In India, the demand momentum continued to be strong across the country, and Meteor significantly helped create an uplift in the market. For the full year, we sold 609,000 motorcycles, just about, down 13% from 698 that we had done last year. Exports were down 8% at 35,700. America region, however, performed extremely well. You'll remember that there was lesser lockdowns in America, where there were significantly higher lockdowns in Europe. We had double-digit growth in America. Demand also swiftly came back in India as total bookings compared to year-to-year. We almost made up, actually exceeded the number of bookings for the full year. Sales were a little lower due to the gradual ramp-up and supply chain constraints that we faced. Overall though, in production, in Q4, our production run rate remained quite steady. With the great demand that we were seeing for Meteor, we ramped up the production, and it helped reduce the waiting period, which had gone as high as six months. Now it has come down a bit. Supply situation of certain electronic parts, which you've been reading across the industry and certain commodities remain quite volatile. Prices of some of the commodities, including precious metals, has put some pressure on the profitability for sure. We work with suppliers to secure availability of parts to ensure the continuity of production. We continue to produce at a decent pitch, not where we want to be, but not completely shut down either. We've taken about a 3%-8% price hike across models since January, and we'll continue to look at that, and if more needs to be done, more will be done. In India, we expanded our network significantly. We added a total footprint now is about 1,500 stores, 1,200 in cities. Now we crossed over 2,056 stores. We added 104 large-sized stores. Our large stores itself is more than 1,000. If you recall, we launched the studio store concept just a year ago, and we're happy that we crossed 1,000 overall. We added 430 just in the last one year, despite all the lockdowns. Outside India also, we continued our rapid expansion in international markets with exclusive store count now going from 77 stores in 21 countries to 132 stores in 26 countries. We saw a lot of expansion in France, Thailand, Brazil, Argentina. Equally, we entered new markets. We became the first automobile company from India to have a store bang in the middle of Japan, in Tokyo, Cambodia, Costa Rica, Dominican Republic, and we opened a CKD facility in Argentina. The biggest story of last year, of course, was Meteor. In line with our plans to expand our product portfolio in the global midway segment, this was perfect for it. We launched it last November 2020. It has won almost every single award that is there that I can think of in the auto industry, and it's won India's most prestigious award, the Indian Motorcycle of the Year. We won the Best Classic award in Thailand and Bike of the Year awards. It's truly a next-generation platform in the cruiser segment. It redefines the riding experience. Received fantastic response and feedback from customers and community on the level of refinement that we have done in the engine, and as well as the riding comfort. It's launched now in U.S. and U.K. and Europe, Asia-Pacific, and now it's coming up in LATAM. It's truly helped us expand the cruiser segment in India, and it's growing our presence in global markets as well. It's not just what we launched, it's also how we launched. With Make It Yours, that became an industry first or was an industry first, became an industry leader, creating a paradigm shift in the customer purchase journey. It allows customers to personalize and expand, and accessorize a motorcycle to their desire from hundreds of thousands of potential options. All of our 2,000+ stores are now MIY-enabled, as we call it, Make It Yours. A large portfolio of our MIY is now moving to MIY, the Classic, Meteor, Himalayan, and the Twin. Slowly, we are seeing that the penetration of MIY is now as high as 80%, indicating that the customer loves these additional choices. The added advantage is because of this MIY, the accessory level that we used to be at about 30%, 40% penetration is now as high as 70% penetration of accessories. Equally on the after-sales, we are focused on providing a smooth and hassle-free riding experience. We created better access through service, series of service interventions, the launch of Service on Wheels, which has more than 800 of them. A new RE Mechanic app that we talked about when we launched the Meteor. 13 mobile service trucks tied up with a leading taxi bike company so that we could offer pick-up and drop. All these have really helped enhance customer satisfaction and gives the customer a peace of mind. We launched the Himalayan as a refresh in three new colors. A host of upgrades, including the Tripper navigation. In the short span of five years, Himalayan has opened up a whole new category in the global adventures arena, it's now one of our top five, the top-selling models in Europe. Not just for us. It's among all top-selling models it is in U.S. and Europe. Pretty simple, versatile bike, which is true of all Royal Enfields. It's authentic and simple and pure. Equally, we launched new colors on the 650 Twin. As we introduced the MIY, we launched nine new colors on the Interceptor and the Continental. Along with that, there's a whole bunch of accessorization options that are provided so that it helps the customer personalize it as much as they can. We continued our process of significant and substantial digital transformation. With the pandemic, I think, has really given this a boost. We expedited some of the work. We now have almost 8 million strong, vibrant online community. The share of online inquiry increased over 2.5 times, and the share of online bookings has gone up over five times, given the conversion rate increase also that we see. Website visits have gone up to almost 66 million in 2021. Imagine that was 29 million just a year ago. Royal Enfield's share of voice in the 125cc and higher segment has gone up by 6% to about 29%. Nurturing the true spirit of motorcycle, pure motorcycling, and self-expression, that has been our constant endeavor. To celebrate the spirit of customization, we introduced new initiatives, especially the Build Your Own Legend and the Style Your Own initiatives that were for next generation of designers and motorcycle enthusiasts. In our endeavor to build a riding culture globally, we launched our first-ever Riders Club of Europe. This club shares programs, rides everywhere, and brand experience. All in all, we were very focused on making sure that not only us, but our entire community of riders and suppliers and dealers were supported well with the COVID-19 initiative. Reiterating 's point on the reoccurrence of COVID-like disruption, we'll continue to monitor the situation as it evolves and try to mitigate its impact. We'll continue to focus on providing the care and support to our employees, our dealers, and our suppliers, and our customers. The first half of this year is expected to be soft because there is lockdowns everywhere in the country, as you are aware. The second half, hopefully, I think the curves will flatten out by about June, middle of June or end of June. Already we're seeing improvements in Delhi and Mumbai. Hopefully from July onwards or the latter part of June, it should start to come back strongly. With that, I'll hand over to Siddhartha. Hi again. I just want to cover the financials and business update of our joint venture with Volvo. That's VE Commercial Vehicles Limited. The revenue for quarter four was at a high amount of INR 3,602 crores. That's up 71% from INR 2,100+ crores last year. For the full year, it was at INR 8,676 crores, up 2% from last year. The EBITDA for Q4 was at INR 320 crores, which is up again substantially from the INR 37 crores last year. For the financial year, the EBITDA is at INR 592 crores, up 43%. Overall, the EBITDA margin for the quarter was at 8.9% versus 1.8% last year. For the financial year, at 6.8% versus 4.9% in the previous year, largely due to improvement in realization and cost reduction measures that we've been able to do. The profit after tax for Q4 was at INR 127 crores against a loss of INR 26 crores last year. For the full year, the profit after tax was at INR 57 crores, down 2% from INR 58 crores last year. Overall, the sales units for the quarter were at 18,200 trucks and buses, up 56% from last year. For the full year, we were around 41,300 units, which is down 15% from the previous year. That downturn, I'll say that the 15% decline in VECV was actually much better than the 30% decline in the industry, thereby gaining VECV substantial market share in trucks and buses. VECV's export volume was up by 10% year on year as against a 29% drop in overall exports in 5 ton and above segment from India. Again, increase in export market share. The fourth quarter started actually on a positive note with more normalization of economic activities. We witnessed a significant recovery in the truck segment. We gained market share in FY 2021 across all segments. In LMD, from 29.8%, that's light and medium-duty trucks, to 30.6%. In heavy-duty segment, including Volvo trucks, that's Eicher plus Volvo trucks, from 5.9% to 7.9%, that's getting to a very substantial or reasonable volume market share in India in heavy-duty trucks. Very proud of that. In bus segment, from 14.1% to 19.9%. Our outperformance in market share was driven by successful introduction of BS6 range, including industry-leading product quality and focus on aftermarkets and parts availability. Our BS6 has really been an absolute standout range of products, we've managed that, I believe, much better than other manufacturers. As a result, we've been able to really gain share post BS6 introduction in India. We've also significantly enhanced our customer connect through both digital platforms and physical meetings. There's been a lot of interaction actually happening now with our customers. We've got the industry's first uptime center, and resulting in a much higher uptime of trucks and buses on the road. That's been an enormous advantage now for VECV. The new range of trucks and buses is 100% connected. They're connected vehicles. They're connected to our servers. We're really able to monitor on a real-time basis what's going on all new BS VI trucks and buses. That's an enormous industry shift and change as well. Again, we currently experience the impact of the second wave of the pandemic with local lockdowns and increase in restrictions, we're confident that as the economy recovers, hopefully soon, the situation will normalize, and focus of a good monsoon, government's focus on infrastructure and positive, let's say, policy stance should support the increased demand for commercial vehicles in the coming period. That's all from us at EML. Back to you for questions. Thank you. Thank you, Siddhartha. We will be opening the Q&A sessions for participants. Anyone who has a question, please use raise hand option. Participants, request you to limit your questions to two per participant. Once the participant is called out, please unmute yourself to ask a question. As the question queue assembles, a couple of questions from my side to Vinod. Firstly, can you give some color on current production situation? Easing of lockdown should drive a recovery, as you said, from July onwards. Can you talk about the ramp-up of production in coming quarters, whether it can move to over 80,000 per month in second half of the year? My second question is on the product pipeline. If you can provide some color, it will be helpful. Media reports highlight new generation Classic, Hunter, Guerrilla 450, Shotgun, all of these seem extremely appealing. Thank you, sir. Thank you. I think there are three types of supply chain concerns that we are facing. One is the global chip shortage that you heard about from other sources also. This is slowly but surely improving. There is also lockdown related supply chain disruptions from Pune and Delhi belt that we were facing earlier. The third, of course, was the sudden lockdown that was there in Tamil Nadu, which was expected, not sudden, I should say. They still wanted auto industry to continue, but suddenly they said two-wheelers are not allowed, only buses are allowed. While we were able to handle it, some of our vendors were not able to handle it. We also felt it was the right thing to do to shut down our plant. We shut it down for just three days, Thursday, Friday, Saturday. We'll reopen on 31st. As I mentioned earlier, we have enough backlog of demand that demand is not an issue. I think by the time production comes back, the demand will see a significant pent-up demand. I'm hoping for much better things. Getting back to 80,000 is not an issue at all. I think we'll easily get there. As soon as some of these supply chain issues die down, I think we will be getting back to 80,000. As far as new models are concerned, as I mentioned earlier, we have several new models being planned once every quarter. I love the names that you are coming up with though, and the way, and the media keeps coming up with newer and newer names. Even before we name them, I think we hear names from the media. I can't exactly talk about which models, and what names will come, but we have a very exciting pipeline. In fact, if I may say so, this year will be probably the highest number of new models that you've ever seen from Royal Enfield being launched in a year. That's the beginning of the pipeline. There's a whole bunch that is happening, and we are truly excited about it. Thank you, Vinod. Hoping to see those models. Next we have a question from Kapil Singh of Nomura. Hi. I'll just pick on what you mentioned. You mentioned highest number of new models. You've been talking about one per quarter. What should we expect for this financial year? Second, just on the production side, is there a thought here? Because last year we were struggling all through the supply, that during the period when we are not able to retail, we produce a bit extra and then sort of retail it. Even if retail network is not open, you sort of produce more. Thirdly, just on the other expenses, if you can give some comment because it's a bit on the higher side, if there were any I captured three questions. One was on product. Yes, we will continue to have one new model every quarter. Just because there is a delay due to COVID right now, I don't think we'll squeeze everything, but there are some very big models coming, and we are very excited about it. We have to do all the marketing and go-to-market preparedness for that. As far as getting back to 80,000 per month, if you just look at our Q4, we almost produced, what, 210,000, 220,000 at that point. That was despite having some supply chain difficulties and all that. Getting back to that level or even higher is not an issue as far as I'm concerned, especially on some of the models where we used to have difficulty, like Twins and Himalayans, which do exceptionally well overseas. We've added capacity. Even on Meteor, our capacity was what, about 8,000 to 10,000. We upticked about 15,000, and we are able to meet that quite well. I don't think once this lockdown is over, the production constraints will be visible. We'll be able to produce as much. Fortunately, we have a backlog, so we can continue to produce. By the time, just to get rid of the backlog or just to, not get rid, but just to deliver as per the backlog, it takes at least two or three months, and by that time, I'm sure there's a significant demand that will come back up. As far as overheads are concerned, Kalees, you want to comment on it? Yeah. Thanks, Vinod. As far the overheads are concerned, yes, there is about INR 50 crores of one-off in that. On a steady state basis, we see overheads run around roughly INR 290 crores, which is in line with our Q3 run rate and lower than Q4 of last year based on the cost initiatives that we have taken. Reason for the one-off largely is on account of, one, we had a forex difference in Brazil. Going forward, we are planning to set off this loan and pay off so that the forex difference will go away. Brazil was a volatile country for various reasons. That's the call that we took by Q1. We should be able to pay that off. The second is a provision that we have made for one of the vendor advances, on a conservative basis, because the vendor has filed for [roughing] NCLT. Excluding that, the run rate is pretty much in line with Q3 and slightly lower than Q4 of last year. Okay. Thank you. That's all from my side. Thank you. Can we have the next question from Pramod Kumar? Hey, thanks a lot, Vinod. Before I start the question, congratulations a lot for a great turnaround of VECV. I think all the moves you've been talking about with the technology shift from BS6 is literally playing out both in terms of market share and margins. Congrats on that count. Moving on, my question is pertaining to Royal Enfield, Vinod. I just want to clarify, Kalees, you said INR 50 crores one-off and other expenses are lined this quarter, right? Am I right? Did I hear that right? Yeah, you picked it up right. Okay. Most of them should revert out from next quarter onwards. Yes, that's right. No. Okay. That's good to hear. Kalees, if you can just help us educate on the precious metal side, because I believe your precious metal intensity will be much more higher than a conventional two-wheeler company or a small business company, and prices have literally gone through the roof. If you can just help us understand how is the precious metal situation for you, and from cost perspective, how much of the current spot or where was cost in context of the current spot prices on precious metal? Is there any scope for further optimization of precious metal where you can probably bring down rhodium and make do with other cheaper metals? If you can just help us understand precious metal a bit, Kalees. Sure. Pramod, to start with, I think the journey of precious metal started via the transition that we made from BS4 to BS6. The consumption as such, if you look at, say, a bike that is at 150cc or lower displacement compared to ours, we are about 30%, 35% more due to the segment that we operate, which is around 350cc to 650cc. There is, one, a 35% increase in consumption, and that 35% lion share is attributable to one metal, which is rhodium. If you look at rhodium specifically, the cost of rhodium from where it was about one year back to now has notched up by almost 10X. That's where you see the pressure on precious group of metal continues to be high in terms of cost, which is impacting the margins also. If you see from a Q4 perspective, the incremental trends have continued, but not as severe as we have seen in Q2 and Q3, but at the same point of time, other base metals have caught up. Kalees, can I add on the precious metals please? Sure, Vinod. I was just going to add that while you're absolutely right that we were about 35% higher than the normal bike, over the last nine months or so, we worked significantly on our engine emissions and how we place the exhaust, how we do the coating, how we do lots of other things. I don't want to get into the technical details. We did two projects, and together we were able to reduce the amount of rhodium consumption by over 66%. As a result, if you measure rhodium usage by Royal Enfield per cc, we are one of the industry's best, a global benchmark. That's a recent achievement. It's not in the past, but it will come in future engines we will have lesser amount of rhodium. Just I thought I'll add that. Thanks, Vinod. That's the value engineering that I wanted to add in terms of what we have done on the precious group of metals. Price, from an industry perspective, we see it going northwards only, at least from a near-term perspective. If I look at, say, next 9-12 months, both base metals and precious group of metals will continue to go up. Having said that, if you look at a year that has been significantly tough from an external environment, we have been able to pass on the entire cost increase to the extent that is feasible. In the year, if you look at from an ASP to material cost, almost INR 12,000 increase on material cost has been passed on on a like-to-like basis to where we were in YTD 2019/2022, where we are. Now, coupled with the value engineering that we have done on PGM, plus in case, say, for example, Q3, Q4 onwards, if there is a little bit of softening on commodity cost, we should be able to see benefits accruing, but that's something we have to park it for another day to see how does it move. Thanks, Kalees. Second question is more for Siddhartha and Pramod. We have seen a substantial increase in the ASP overall in Twins. A lot of this is cost pressure right from ABS to FI to precious metal now. We just wanted to think as to where you think you reach a point where pricing action incrementally could kind of dent demand. Because the reason I'm asking this is that a lot of the customers who buy Classic 350, which is our retro brand, a lot of them are probably moving from 150cc and the kind of price gap has been widening. Right? What we've seen is like with the 650 Twins, for example, a phenomenal value proposition if you compare the pricing of those products with anything else in the market We are struggling to sell more than 1,200, 1,300 units per month in the domestic market with the phenomenal value proposition. I'm just trying to understand, is there a point where you will have to probably start absorbing the cost inflation within so that you don't end up pushing the price too hard? Part of this will reverse off with commodity easing eventually, whereas reversal of pricing is not something which companies normally do. How do you think about this point, right? Personally, kind of disappointed by the Sorry. Apologies. Limited volume success is what you're seeing with the 650 Twins despite the phenomenal performance and the value proposition what they offer. Sorry for the long question, but if it can help us understand this. Thank you. To answer your question directly, the 650 Twins reason you see lower volumes in India is because we exported a whole lot more. There is a seasonality of when you can export to U.S. and Europe because of the winter months. We exported significantly more. We have a big backlog on Twins, and I don't want to specifically comment on how much, but demand still continues to be there. Once we get the refresh, and with MIY there seems to be continued interest in Twins. Sid, you want to add something to that or? Sure. Pramod, very wise questions, of course, because that's obviously an enormous area of debate in the company in terms of what is the elasticity of the price, right? We're right now battling really unprecedented commodity cost increases. Obviously, that's an enormous question in the company and in all companies these days to see how much you can pass on, how much you can absorb, how much value engineering we can do. All of that is being dealt with in a very systematic and a very scientific and in consumer understanding type of way to see that we can pass on the right amount of costs, which the company has to bear. You're absolutely right. That's a crucial thing. What that point is difficult to say. Of course, we find ways to try and proxy that and see whether we're not breaking the back, right, of demand. Till now, I think we're progressing in the right way, in terms of being able to balance, I said, the cost and the pricing. It's not substantially hurting us or hurting us from the perspective that the customer just says, "Oh my God, okay, this is now just way too much," and then the demand falls off a cliff. That's not happened at all. On the 650s, we know they said it all, but I'll just add one more point is that we are really long-term players also. Yes, we're increasing and we're improving and we've got some order book. As you saw with the Himalayan also, we had a couple of years, quite a few years of sort of, let's say, not as per our expectation, the volumes, right? It was not as much as we wanted. We stuck with it. We did lots of things. In that case, it was a lot of product improvement also. In Twins, that's not required. It's absolutely spot on in every aspect required. It takes time for consumers to rise up to a bigger capacity bike as well. We're going to continue to invest in the brands. We're going to continue to invest in becoming the absolute no-question-asked biggest premium motorcycle. I'm talking about Twins as premium and upper premium really. We've captured the entire market. Entire means above 500 cc. I think we have most of the market already. All the international players who've come in, they're struggling. I think largely because of us also, because we've just actually given such an amazing value and such an amazing motorcycle. More so, we're going to continue to press on and continue to. We have four, five million customers on the roads, and those customers are certainly going to. They are looking at updating. Now, sometimes the upgrade happens immediately, and we are seeing upgradation to 650, but it will also take more time. We have the consumer base, we have the brand, and we're certainly on the right track for that as well. Thanks a lot, Sid. Take care and all the best. Thank you. Thanks, Pramod. Next we have a question from Jinesh Gandhi. Jinesh, can you go ahead? Yeah, thanks. My first question is primarily on the price increases which you have taken. Kalees, can you clarify this INR 12,000 increase which you're talking of? This is since January 2021 or this is for the financial year as a whole? This is for the financial year as a whole, Jinesh. Okay. any sense on price increases since January? We have done a couple of increases between January to March also, and there has been one that has been done in April too. Okay. What would be quantum for that? That gets included in INR 12,000, right? That's right. INR 12,000 is not MRP, I was talking about the ASP. That has happened over a period of time in last year. Right. Understood. Okay. Second question is for Vinod. You talked about order backlog of two, three months in the sense that you said it will be cleared in the next two to three months. Would it be fair to say this is largely for Meteor and the newer models, because Classic feedback from the ground is it was readily available or waiting a week, 10 days. Can you throw some color on what would this order backlog be made up of? We don't like to give model-wise backlog. I must at least tell you that this two, three months or more backlog that I said is spread across several models. I can't say any model which is not on backlog. Okay. Right. Lastly, with respect to the supply side issues, you talked about chip shortages. Hello? Can you hear me? Yeah. The supply side issues, you talked about chip shortage getting addressed slowly but some other issues coming in. Would it be fair to say, when you say your new model launches are on track, this is after factoring in for the shortages, or there could be some influence of shortages on new launches? I think new model launch development takes about three to four to five years, depending on the complexity of the vehicle. The models are ready. I want to be able to have a clear visibility of the supply chain so I can launch it in enough quantity and not be short of supply. It may delay by a month or so, but I don't see any massive changes because of that. Got it. Thanks. I'll come back in queue. Thanks, Jinesh. Can we have Pulkit Singhal next? Pulkit, please go ahead. Yeah, hi. Thank you for taking my question. The first question is just trying to understand the consumer sentiment impact that COVID could have this time, because it is a lot more widespread, and there have been a lot more people have passed away, et cetera. People have had to spend a lot more on medical expenditure also this time. Can you help us understand whether this whole premiumization thing could get impacted because of COVID in your view? Have you seen any kind of regional variations in terms of either order cancellations in areas where there has been higher COVID impact, et cetera? It's absolutely terrible the kind of impact that COVID had this time or even last time. This time for all of us, it seems like it hit home. Every one of us has lost a colleague or a family member or something like that, or somebody we know. It's absolutely terrible. The good thing is that it's going away. People are getting vaccinated. Even in Tamil Nadu, which was the last of the places where it was still growing, I think the curve as of this morning was that it finally hit its peak and it's coming down. Hopefully in the next two to three weeks, it will go away. It's too early to say what is the impact of COVID, because markets have not opened up. In Maharashtra, Delhi, all of them still continue to be in lockdown, so our dealerships are all closed, so we don't know as of yet. I don't think it will have that much of an impact. In the end, while there is a lot of grief and despair, there's a lot more people who will continue to want to travel by motorcycles rather than take shared taxis or buses. Right. Second question, and last one, is on your distribution expansion strategy. Given your experience of the 2,000 stores currently, how do you look at expansion further on from here for the next two, three years in terms of studio and large stores? If you could share some of your learnings as well from the past expansion. I think there is a combination of big stores and small stores depending on the capacity of that region to take it. Our focus is more on international expansion, where the pace of expansion or the percentage growth is going to be happening much more internationally. If you see that we had about 900 big stores, and we went about 1,000, 1,056 or something. We had zero studio stores, we went to 1,000. Now we have a good combination. Other than maybe one state, we are practically covered with our network expansion plan that we had. We'll continue to do that as and when we create new models and there is more demand created from certain pockets. We'll continue to add that. Equally, slowly but surely, there is a change happening that I see where people want to buy directly from the company, directly delivered to home. In the long, long run, I'll have to say we'll have to re-look at the distribution strategy overall. Got it, sir. Thank you. All the best. Thanks, Pulkit. Next, can we have Pramod Amthe? Hi. Thanks for the opportunity. First question is with regard to the production challenge or the supply chain challenge. It looks like, as you alluded that COVID-2 is much worse than COVID-1. I want to get your last six months' experience structurally, what have you changed in terms of managing supply chain so that you can give a confidence that this time you'll be able to ramp up much faster? Than the last year issue as demand seems to be still better, but the supply chain, both domestic and international, is much worse in this year. The name of the game seems to be the quicker ramp up anybody can do. Can you give more confidence and more color structurally how you are trying to address it? Well, the supply chain situation, to put some jest on it, as we say, it's like "Kabhi Khushi Kabhie Gham." You deal with a new thing every day. Why do I have confidence that we'll come back strongly? We have experience from the past. Even last time we came back very strongly. We know which suppliers are going to be affected more. We used the last one year to create alternate source. We used the last one year to move those suppliers closer to us. There are some structural problems like the global chip shortage and whatnot. Overall, I think we have de-risked our supply chain to some extent, brought them closer to us, and as and when it opens up, we should be able to bounce back very fast. Also I should add that over the last 5- 10 years, there's a great deal of insourcing that Royal Enfield had also done, which has helped. Sure. Thanks. The second one is with regard to the earlier question by somebody participating on Twins. Can you give some color in terms of is it the category itself has shrunk because it was a new category you are embarking on? Or it's just a supply chain issue? Sorry, I didn't understand the question. The Twins products. Yeah, the Twins. I had said earlier that it was merely the fact that we were allocating more to international than to domestic market that it caused, that showed lower numbers in India. Is there anything more to read for your new products, how you want to position them, and how fast you want to refresh? Is there a category-related issue? No. I think Twins continues to win awards everywhere. It continues to do exceptionally well in overseas markets. There continues to be a good demand even in India, which we are not able to meet. We are actually enhancing the capacity, the Twins and Himalayan. Both of them have now achieved the top 10 models in most countries of the developed markets as well. Sure. Thanks in all the ways. Sorry, just to add, actually. Yes You see the 500+ cc segment three years ago and today, it's grown tremendously as a percentage. It's still not a huge part of the Indian motorcycling industry, but it has grown a lot as a percentage, and the entire growth has come from Royal Enfield. We are clear leaders with, I don't know the exact number offhand, but I would say two-thirds of the market at least belongs to us. We have grown that segment. We are continuing to grow that segment. We are absolutely determined to grow that segment over the course of time. We know the market the same way that we grew the market for 350s, and also now the Himalayans. We know that that segment will grow over here. There's no question. We're just going to continue to build the story, the brand, improve the products, and make sure they're relevant to customers. Sure. Thanks in all the ways. Thanks, Pramod. Can we have the next question from Arvind Sharma? Arvind, please go ahead. Yeah. Thank you so much, sir, for taking my question. Two questions from my side. First, on the numbers. The installed capacity at Royal Enfield, I believe, is around 100,000 bikes a month or, say, 1.2 million bikes a year. We are testing numbers which are somewhere around 70,000 to 80,000. In the last Q4, you evaluated it's because of the difference in the mix demand and the mix produce. When do you think that the numbers will match up to the installed capacity? In other words, out of the 100,000 installed capacity, what is the maximum that Royal Enfield can produce and sell? Well, I don't know when the supply chain issues will be resolved, but I hope sometime this year we will start to hit the run rate of something like 100,000 even in one month. If the supply chain helps us, we should be able to hit. Remember, 100,000 is a necessary number. We never said that we have a capacity of 100,000 and hence 1.2 million. This has kept coming back in the media, and enough number of people say it, so it becomes like it's our capacity. I believe we can achieve 100,000, but that's 100,000 if I make it a one model. Remember, we have a limited capacity of Meteor, we have a limited capacity of Himalayan. I can't just make something extra even though the demand is here, just because I have capacity there. I believe that combination of these, we will be able to perfect. When everything lines up and all the stars align themselves, we hopefully will hit that level of production sometime this year. Sure. Thank you so much, sir. The second question, more on the Q3 numbers. This INR 50 crores of one-off, is that captured in the standalone or in the consolidated numbers? The INR 290 crores of steady state, it means that INR 50 crores is- I believe consolidated, but Kalees can answer that better. Yes. It is consolidated. How much would that be in the standalone numbers, sir? Standalone will be roughly about INR 25 crores. All right. Thank you, sir. Thank you so much for taking my question. That is all from my side. Thank you, Arvind. Thank you. The next question is from Chirag. Chirag Shah, please go ahead. We will circle back to Chirag. The next question is from Hitesh Goel. Hitesh, can you please go ahead? Yeah. Thank you, Vinod. Sir, my question is on this, sorry to harp more on the commodity cost front, but can you give us what is the total commodity cost as a percentage of your ASP in a bike, including the precious metals? I just couldn't hear properly. You said you've taken a total INR 12,000 from April last year to April this year in terms of price increase, right? Did I follow that right? Yes, Hitesh, you followed it right. It is from April last year to March this year. Okay. For the financial year of FY 2021. Roughly, if you look at our material cost, we are roughly at about, say, 55%. Yeah. No, that includes actually the vendor fixed cost, vendor margin, everything, right? I'm only talking about the metal part, which is precious metal, steel, aluminum as a percentage of ASP. Generally, in auto companies it varies between 15%-25%. I believe for Royal Enfield, it'll be slightly lower because of the ASP being higher. If you can give me that ballpark number. I don't have it handy. Actually, never look at it like that. Yeah, absolutely. Honestly, we don't even give individual line item of commodity and all of that. Okay. Yeah, let me ask the question again then. What kind of price hike is required to offset the commodity cost increase which has happened in Q4? I don't think so it is a straight match to say what is the cost increase that you'll be able to convert into price increase and pass on. It's going to be a combination of, as we talked about, there's a pricing framework that we operate, how much of price that we can pass on to the consumer. Second is, what are the cost projections that we have in terms of the metals and commodities, and how will that move? Third is what is the kind of value engineering that we need to do. Net of that, what is the price increase that we need to take for a particular model or an SKU? That's how the model operates. As of specific price increases, you will hear about it as and when the action comes in the respective quarter. Other than that, not to comment on the future on that. Okay, great. Thank you. All the best. Thanks, Hitesh. Next we have a question from Chirag Shah. Chirag. Yeah, thanks for the opportunity. Sir, I have a question on price laddering. Given the way cost inflation that we have witnessed over the last two years, is there any thought internally on what should be the starting point as far as price laddering is concerned for the product? Is there a rethinking or revisiting to that thought process on price laddering, the entry point? No. Chirag, we are trying to do completely opposite to the typical concept of price laddering. We are putting the decision in the hands of the customer. I am not saying I sell this and this is at this price, and I sell this is at this price. Here is the base motorcycle, you choose the model, and on that you could have multiple editions, multiple options, like Meteor comes in three different base models, right? You could choose up to 500,000 combinations, and you choose your price laddering. You choose how you want it to be so that the price is defined by the customer then. The second question on the 650 side. Do you think there is a need for a additional model or a product over there, the way we have in 350cc where we have, and I'm including 400 also the part of 350, where we have three, four offerings. Do we think that 650cc at this point of time needs more addition? Chirag, you're asking very cleverly worded question to try and leak out of me what is our product plan on 650. I know you for many years, you are too intelligent a guy for me. Still the answer is yes. Okay. Okay. Yes, there is a need to think about every platform, Chirag. Why should we be thinking about? Why only on Twins? Why not on Himalayan? Why not on Meteor and Classic or whatever? Every platform we should think about how we can meet other kinds of customers' requirements. Okay. Thank you. All the best. Sidd, you want to add something to that? No, I would say well said. We think of them as platforms and to exploit as much as possible in as many ways as possible. Of course, there's a business case for every one. If there's just very small incremental sales, that's not interesting for us. If we find that there is a potential of much larger incremental sales, of course, we try to exploit our platforms to the maximum. Having said that, to the earlier point, while we are launching a lot of new products, we are also very controlled. As Vinod said earlier, our product development process is three to five years, and we are very, very rigorous. For a full new product, it could even be four years or something, and beyond. We're extremely rigorous. We don't launch just off the cuff something interesting, let's quickly try and do something. No shortcuts, nothing. That's what you've seen. I think all of you have seen and hopefully appreciated that all the new products that have come out of Royal Enfield are seen and are absolutely world-class. They're equivalent to Japanese, German offerings. That's our ambition, to get to that level of product finesse, of product quality. I believe that's where we've gotten to with the last couple of products. Therefore, while we're coming out with quite a few new products, it is still very deliberate and not an over-proliferation. Let me put it that way. Siddhartha, if you permit me, I think you compared us to Japanese and European. Somebody made a video comparing our 650 to an engine, and we were actually better than them. Yeah. We have to try harder because we are starting from behind. We have to try harder, and we are better, I think, in many ways now for the kind of offering. A lot of them look at the, let’s say, midsize segment as not so important. They are much more focused on the heavy-duty segments. As a result, their effort and focus on these areas is much less. Our products, you’re absolutely right, I believe, are way better. That’s why they’re outselling even Europeans and Japanese and all of those. Absolutely. Well said. Any other questions, Prabhu? Yeah. We have many more. I’ll take the last few. Next, we have Satyam Thakur. Satyam, can you go ahead? Yeah. Thank you. Good evening, everyone. Thanks for the opportunity. Could you please share how the situation on financing is? Everyone gathers from channel checks that there is probably a meaningful drop in the collection efficiency of lenders in the two-wheeler industry in April and May. Do you have a sense of how are our customers faring and how much of a drop in collection efficiency these lenders could have seen, our lending partners could have seen? We have not heard anything like that, Satyam, and in fact, Royal Enfield is probably the best customer in anybody’s portfolio. We’ve not heard of any such thing. Okay. That's great to hear. Our delinquencies, I don’t know the latest numbers. I haven’t talked in the last few months, but typically, our delinquencies are a fraction of other two-wheelers. It should be pretty- Yes, it is the lowest in the industry. Okay. That’s great to hear that April and May has been decent as well. The second question on the CV side, could you share what the industry has seen in terms of the discounting in the CV industry in the March quarter compared to, say, December quarter, what would have been the trend? I can’t say offhand, really, to be honest. It continues. There’s no serious abatement of discounts. I can’t say offhand whether it’s marginally higher or lower. It’s similar levels I’m assuming right now. I think VECV has actually not only increased market share but also increased margins because they didn’t play the discounting game. Yeah. The general market is still suffering from that. Yes, absolutely right. We’ve really been able to claw back and sell based on total value, as Vinod was saying. I think we’ve succeeded, especially in HD, where we were a much smaller player. We’ve been able to grow and do well and profitably as well. Yeah, absolutely. Okay. Thank you and all the best. Thanks, Satyam. Given the paucity of time, we’ve come to the end of the call. On behalf of Emkay Global, we thank the management for the opportunity and request management for closing remarks. Thank you all. Stay safe. I think while everybody thinks that this COVID is over and things are back to normal, my wife is a doctor, and she tells me it’s not over. I know of people and friends who’ve taken two doses of Covishield and still getting it. Please stay safe. Don’t relax. Mask up, stay in social distancing. I think the supply chain problems, these are all short-term. They will all go away once we put this COVID behind us, and I think if we stay safe for at least another two to three weeks, we’ll put this largely behind us. Then we use that window before wave three for vaccination, I think India will be safe. That’s the message that I want to leave with all my team members everywhere and for all the well-wishers as well. Wish you all the best. Thank you. Likewise. Thank you very much and stay safe. As Vinod said, all of that in terms of which are still short-term in nature. Just to be sure that at Eicher Motors and whether it’s VECV and of course, RE, Royal Enfield, which we're talking about, we continue to stay exceedingly focused. There’s a huge amount of management attention on the tiniest of details, and that’s what really makes this company what it is. It’s all about focus. It’s all about therefore being able to react quickly because we are sharp. We’ve got a small product portfolio, we’ve got a small footprint, and we can really move things when we need to. That trend absolutely continues even now. Thank you very much. Thank you. Stay safe. Bye-bye.