Good evening, ladies and gentlemen. We welcome you to the Eicher Motors results earnings call on behalf of Emkay Global Financial Services. We are pleased to invite you all. From the management team, we have Mr. Siddhartha Lal, MD and CEO, Eicher Motors. And soon, we will have Mr. B. Govindarajan, Executive Director, Royal Enfield, and Mr. Kaleeswaran Arunachalam, CFO, Eicher Motors Limited. We would request management for opening remarks, and then we will open the floor for Q&A session. Over to you, Siddhartha. Thank you, Raghu, and thank you, Emkay for hosting this. Hello, everyone, and welcome to the quarter three earnings for Eicher Motors Limited for FY 2021-22. I wish you all a very happy new year. As we all recover from this third wave, I do hope that all of you and your families are doing well. This quarter saw us strengthening our commitment to becoming a truly global company at Eicher Motors and a truly global brand from India. Both Royal Enfield and VECV continued their strong momentum in international markets. Even amidst a challenging backdrop owing to the global semiconductor shortage and the onset of Omicron, we still registered a 28.1 sequential increase in Q3 revenues. The benefits of operating leverage and alternate sourcing were also visible in the sequential margin improvement. During quarter three, not only did we commence operations at Royal Enfield's CKD facility in Thailand, which is a really promising market for us, we also registered stellar growth in international volumes during this quarter. With this, Royal Enfield has now three assembly units outside of India, one in Argentina, another in Colombia, and a third in Thailand now. Our continued focus on aligning the next stage of growth with a renewed ESG vision at Eicher Motors Limited saw Dow Jones position us as one among only 10 global automotive companies to feature on its elite list of Dow Jones Sustainability Indices 2021 in the emerging markets category. Our manufacturing prowess was also recognized by Frost & Sullivan as Royal Enfield's Vadodara plant received the Frost & Sullivan Gold Award for Manufacturing Excellence. With the CV industry continuing its recovery, VECV delivered strong growth in all parts of the business, including a 25% growth in top line and in volumes, that is, and a market share of over 30% in light and medium duty segment. We also continued to strengthen our product range with the launch of an industry-leading Eicher heavy duty coach and sleeper bus range during this quarter. These are the intercity buses. At an overall level, there seems to be continued turbulence with the ongoing supply chain challenges and inflation. However, we expect the situation to gradually start improving over the next many quarters. To give you an update on our consolidated financials for Eicher Motors Limited, our revenue was at INR 2,881 crores, which was a sequential growth of 28% versus INR 2,250 crores in Q2, and up 1.9% from last year. Our EBITDA was at INR 582 crores, a sequential growth of more than 35%, and around 13.4% lower than Q3 last year. Our EBITDA margin was at 20.2%, up 1.1% quarter -on -quarter, and 3.6% lower than the same quarter last year. Our profit after tax was at INR 456 crores, up 22% quarter -on -quarter and lower by 14.4% compared to last year. That's the overall financials for Eicher Motors Limited. Now over to Govindarajan, Executive Director and in charge of Royal Enfield, to give us an update on Q3 2021-2022. Sorry. Over to you. Govind, you're frozen. Govind, you're frozen. Yeah. Thank you, Sid. Hi, everyone. Happy New Year. Hope you're all safe. Along with families also safe. Let me just take you through Q3 Royal Enfield updates. At Royal Enfield, we continue to remain on course on our strategic vision of becoming the premium global consumer brand from India. Coming specifically to this quarter, let me share with you the update on the highlights for Q3 FY 2022. Totally, we sold about 167,664 motorcycles, with a sequential growth of 35.7% against 123,515 motorcycles in Q2 FY 2022. Ongoing shortages of the semiconductor chips has impacted our performance in this quarter. We are down by about -15.6% YOY. We are working towards developing alternative supply ecosystem to minimize the effect of the shortage. In fact, we have onboarded one more supplier and the third supplier is also in pipeline. Thereby, the supply situation will be easing out. Demand continues to stay very resilient, added by the launch of the new products and the festive season. Our market share in the motorcycle segment with more than 120 cc engine size increased by about 2% to 27% in this quarter, as compared to 25% in the last year's same quarter. Royal Enfield had a market share of 9% in the overall motorcycle segment for December 2021. This is only for December 2021. As far as the network is concerned, we are continuing with our path of increasing, optimizing the network, and we have added about 12 large format dealerships. The total footprint as of now it stands about 2,118, of which 1,065 is a dealership format and about 1,053 is a studio format. You all have seen the international success has been outstanding for us. We have been continued to have a growth, and the momentum is very good. Our exports during this quarter stood at about 17,036 units as against 10,853 units during the same period last year. This is having a growth of 57.3% and more than 2x increase in compared to Q3 of FY 2020. Robust performance in EU and Americas with a market share in mid-size segment sitting about 7.1% and 5% respectively. Consistent growth in the market share from approximately less than 2% in financial year 2018 prior to the launch of 650 Twins. The product which we have launched has a very good traction in the international market. To strengthen our international presence with the commencement of operations of a local CKD unit in Thailand. Overall, we have added seven exclusive stores in France, Philippines, Argentina and Germany, and 11 multi-brand outlets during the quarter. We now have 150 exclusive stores and 660 multi-brand outlets outside India. Non-motorcycling business, apparel, accessories and spares and soft products altogether, we continue to grow consistently. We have witnessed a sequential growth of almost about 8.2% and year-on-year growth of more than 29.2% in the quarter. Total non-motorcycle revenue for the business currently stands at around 15% of overall revenue. Our constant endeavor to deepen the rider's engagement with his or her motorcycle has resulted in GMA and spares verticals growing consistently month-on-month. Launched in India in September last year, the all-new Classic 350 has witnessed a very enthusiastic reception from all our consumers. Since then, it has been unveiled at EICMA 2021 for Europe and launched in countries across Asia-Pacific region. During this time, we have rolled out more than 100,000 units of the new Classic 350 motorcycles, which continue to receive an overwhelmingly positive response across the market. The Global Motorcycle Show, EICMA 2021, showcased the best from Royal Enfield's 1.8-year journey. A major centerpiece of the show was unveiling of Project Origin, a working replica of the first motor-bicycle from 1901. The mission that represents a seminal chapter of Royal Enfield's illustrious history. We also showcased 12 iconic motorcycles from our history, one for each decade of our history in the unique showcase called The Ages. Also celebrating our history was the 120th year anniversary edition of the brand's flagship 650 Twin motorcycle, the Interceptor 650 and the Continental GT 650. These were very premium, limited run, special edition motorcycles. Looking stunning. 120 of these units were sold in a record time of 120 seconds in India on an online sale. The SG650 Concept motorcycle that we showcased created a lot of excitement. It's a futuristic concept that demonstrates our product design and development capabilities. Also celebrating 120 years of exploration and adventures was 90° South, a quest for the South Pole. Our team successfully completed a 28-day, 310 km first-of-its-kind motorcycle expedition to the geographic South Pole. It was a moment of inspiration and pride for all of us as we saw two Royal Enfield Himalayan at the very end of the earth. Exciting initiatives in motorcycling apparel. We have collaborated with prestigious British heritage brand Belstaff to introduce an exclusive range of riding apparel. We commenced the second season of Art of Motorcycling, our marquee creative campaign, which sees huge participation from artists and creative communities and motorcycling enthusiasts. With a focus on enhancing awareness on road safety and increasing adoption of helmets when we are riding, Royal Enfield partnered with Helmets for India, a nonprofit organization. Creative initiative aimed at bringing about a positive changes in the mass perception of wearing a helmet in India. We have partnered with renowned global artists to create the unique and evocative expressions of helmets, which will then be auctioned to raise funds for the causes. To conclude, consumer preferences for the personal mobility and premiumization continues to drive demand for the segment and for our products. As supply chain constraints are gradually easing out, we expect production to scale further soon. With a slew of new launches planned in the near and the midterm future, we are excited about what's in store for enthusiasts of pure motorcycling in India and in the global markets. Now I will hand over to Siddhartha to take us through the VECV performance and updates. Over to you, Siddhartha. Yeah. This is the update for VE Commercial Vehicles Limited, our joint venture partnership with Volvo. In VCV, we had a revenue of INR 3,626 crores, which is up 35% from last year. The EBITDA was INR 242 crores, which is up 7% and an EBITDA margin of 6.7% versus 8.4% last year. The lower EBITDA margin was largely due to higher discounting and input cost pressures in the commercial vehicle industry. All of this resulting in a PAT of INR 66 crores. Overall, there has been strong industry growth, so we're witnessing a quarter-on-quarter growth in the CV industry. VECV continues to perform better than the industry, backed by higher demand for CNG trucks and a solid response in our new export markets where we've been working on for the last many years. That's paying good dividends. VECV sold 16,004 vehicles in the quarter ending December 2021, registering a growth of 25% against 12,805 units in the same quarter last year. LMD segment consistently performed well, gaining a 30%+ market share and over 50% market share in LMD CNG segment. That's a segment that's actually growing a lot in these days. There we've been able to get very good market share. Our heavy-duty market share grew to 8%, which includes Eicher and Volvo trucks. That's a very substantial increase in market share. Our exports have grown by 72%. We've added new markets in South Africa, in Southern Africa, in Latin America and the Middle East. There's been a lot of progress on that as well. We've had some very good new product introductions with the leading intercity coach and sleeper buses that are built in our Volvo Buses India facility in Hoskote on Eicher’s chassis. As you know, we recently acquired the Volvo bus business from Volvo into VECV. In the plan that was part of this deal, we've now built the Eicher intercity bus, which we believe has an enormous potential in the coming years. Volvo Buses launched India's first 13.5 m and 15 m chassis for intercity coach and sleeper application. In addition to that, we launched the My Eicher app. Within the My Eicher app, we launched a gateway for connected vehicles-based services to key accounts. That's been also a very interesting addition to our services. We've added 37 new touchpoints in commercial vehicles this year and focused on improving presence in very large industry volume markets. As a result, we've had a growth. Our market share is continuing in VECV. There are some concerns on industry-wide issues on profitability. Having said that, we're still ahead of others. While some of the other much larger CV players are making losses, we're still in profitability, and that's reflected with the high discounts that others are making. We have to also match up to some of them to maintain our shares. That's the industry outlook. Having said that, we're still doing very well. We're growing in market shares and generally as a brand also performing very well in customer satisfaction and in brand salience. We've done studies recently where now we're number two in a lot of markets for brand salience as well. That's it for now. Thank you very much for joining. I mean, this is the management section. Now over to Raghu to you for conducting the question and answers. Thank you. Thank you, Siddhartha, for the opening remarks. As we go to the question and answer session, couple of questions from my end. Firstly, exports have been robust. Can you provide some color on which markets hold strong potential ahead over the medium term? And what portion of sales will you be targeting from exports over the medium term? Talking about Royal Enfield? Royal Enfield. Exports market, especially RENA, Royal Enfield North America, Thailand, LatAm, EU markets. In all markets, Royal Enfield is doing outstandingly well. Primarily about two years back when we are talking about when the new products come in and we prepare the market and we went in for the brand pull as a strategy. When we actually gone in for one store, one location, the brand gets accepted, then we improve. Today it is actually the success story which we have created in India is more of a success story which we can create in international markets. First, with the global product first we launched, which is the 650 cc Interceptor and Continental GT, which got accepted very well. Now with the Meteor launch and the Classic 350 launch, we see our growth in the international market is going to be very good, and this is the starting point. Raghu, on the forward guidance, we don't provide any color, as you would know. I'll leave it to us to disclose it as we move forward in the respective quarter for the respective quarter numbers. Thank you, BGR. Thank you, Kalees. Just a second question from my end. Dealers indicate a good waiting period for Classic 350 and Meteor models, especially for the dual channel ABS vehicles. Considering the healthy order book, how do you see the production ramp up in coming months? By when do you see production consistently being over 70,000 units now that you are adding multiple vendors? Yes, Raghu, you are right. We had only one vendor, and subsequently we started adding the second vendor, and now we are looking for another vendors also. For understanding purpose, it is slowly ramping up. Not yet the situation. I'm sure with all the automotive industry you would have seen, it's not that it is completely behind us, no issues type. It won't be the situation which was earlier. It is going to continuously improve. The ramp up will be happening. Yes, as you mentioned, we have a very good healthy order book. Month-on-month we see now with the sources addition, our production will be ramping up. Thank you, BGR. Wishing you all the best. Now starting with the question answer session. We have the first question from Pramod. Can you go ahead? Pramod, you can unmute and go ahead. Thank you, Raghu, and thank the management for the opportunity. My first question is on the quarterly results. I normally don't like to discuss the margins, but there seems to be a sequential drop in ASP and also a drop in the gross margins, quarter -on -quarter. I'm talking about September quarter versus the current quarter. If you can help us understand, because the volume run rate did improve, and there were pricing actions which were there. You did talk about very strong non-vehicle revenues as well. Just trying to understand if it's just a numerator, denominator effect, because of larger volumes and the lower non-vehicle revenues, numerator which is hurting ASP. Related to that is the gross margin bit. Is it also because of lower percentage of non-vehicle revenue in the quarter compared to September quarter year? Because gross margins have slipped quarter-on-quarter. Thanks, Pramod. I think to start with, if you look at what we delivered in Q2, it's about 125,000 volume, on which our exports was about 18,000. If you look at this quarter, the export revenue continues to be strong at about 18,000 on a base of 168,000. Yes. India business has gone up, where the ASPs are lower compared to our international business. That's why you see, it's more to do with the percentage of international business on the overall business leading to the ASP drop. Now second point in terms of the gross margin, 80%, 90% of that is also more on account of the mix that we talked about. Right. For the same point of time, there was no large pricing actions in Q3. The pricing actions happened effective January 1st, but there was aluminum inflation that we factored in Q3. Now, coming on to the overall summary financials, we do see an operating leverage kicking in already. As you review the financials compared to last quarter and after adding in the investments that we have done in marketing, the EBITDA margins have already started moving up. Last quarter we had the 24.1 one-off versus 19.1%. Yes. This quarter already at 20.2%. It shows that the operating leverage has started coming in. On the export side, I understand ASPs are higher, but I think you made a mention that it's not still accretive because I think we need some more scale benefits on the export side. Is that understanding right? At 10,000 or closer to 8,000, 9,000 per month, will exports be accretive on the EBITDA margin front? It is, Pramod. I think different markets are at different levels of maturity. Some of the markets have already hit the accretive numbers, and some of the markets are still in growth phase where you will see margins further getting added as we look at the forward quarters. Okay. Second question on the demand side, and I think Siddhartha, BGR, both of you can chip in. If you can help us understand, because if you look at volume data, your retail market share is 4.6%, 4.7%, which is one of the highest ever. Speaks a lot about demand for your brand and premium segment. It's in a backdrop of a very weak industry demand environment. Just wanna understand from our perspective on demand tracking as to where do you see the demand in terms of monthly bookings, and other activities which you track, like customer inquiries, conversion, everything. How is that tracking over the last few months, especially given Omicron in January and if there's any recovery in February? Looking forward, what could be the impact of new launches? Also some color on the new launch pipeline. Is it getting delayed or you'll have backlog versus any color on the product action as well? Thank you. From the demand side, Pramod, it is slowly inching up. When the dealership openings are taking place, even in as good as last month, there were some dealers which were not open, fundamentally because of the local restrictions and all those things. I think the booking rates are slightly going up. I would say rather, and in a week-on-week basis, I'm just seeing it's a positive sign. Second, it is also supported by, I think our new launch, Classic 350, which we have launched it in September, October. It has been a fantastic reception. And the booking for those numbers are also growing very, very steadily. Across month-on-month, I'm seeing the booking numbers are going up. On the new launch pipeline, Govind, as in, do we just stick to a quarter per launch kind of, one launch every quarter, that kind of a timeline? We have a very good pipeline of new products which are lined up. Every at a particular interval where we have to launch those motorcycles into the market, we will be doing it. Lal, you want to add something or say something? No, just that we do have a very strong pipeline. We're not gonna tell you any further details at this point. Yeah, it's a very strong pipeline. We're very excited about it. It's all out there. It's all ready. You know, we're ready with a lot of products. Now it's just a matter of sequencing stuff over the course of the next year, 18 months from there. Thanks a lot, and I wish you guys best of luck. Thank you. Thank you, Pramod. Thanks, Pramod. Next, we have a question from Jinesh Gandhi. Jinesh, please go ahead. Yeah. Hi. Thanks. My first question is on the supply side. You indicated we are seeing a recovery. Would it be fair to say that the month of December was a proper reflection of normalization of supply chain, where we did 70,000+, or that was primarily a play between single versus dual channels? Look, I think it is often available in the combination of dual channel and single channel ABS. As I mentioned earlier, we had only one source. We actually inducted one more source. There is an initial ramp-up, which was just coming up. Now the second source has to actually source the subcomponents across. Over a period of time, as I mentioned, between the last quarter, this quarter, there is substantial growth. I see that month-on-month it will be ramping up. That's the confidence which we are seeing it in the supply chain as of now. Okay. Secondly, with respect to the distribution network expansion, are we largely done with our studio network expansion? Considering that we've added substantial amount of stores in last two years in the studio sites. As of now, as I mentioned, studio stores, it is almost about some 1,100 numbers. That's right. [audio distortion] Studio stores are already there. Apart from that, what we are looking at is we keep on looking at where is the cluster, what's the kind of growth which is available, how can we go close to the consumer. That's the endeavor. It is not just a number, but we can say that the growth which is taking place, especially the rural economy, which is just getting opened up now, there is going to be more clusters and where we are not presenting, which we have to be present and then keep moving on. As a strategy, studio stores is here to continue. It is not blindly going behind some numbers. It is to see where exactly it has to be there, and the quality of the space has to be very, very carefully chosen and installed. Okay. Yeah. To add to Govind, the huge addition that we've done, there's not a huge addition ahead of us. Of course, in strategic locations we'll continue to add and continue to work with our dealers. Also last two years have been very tough for our distribution for all dealers everywhere because sales have been down. Service has been down, so service revenue has been down. Our job and what we're doing is to ensure that our dealers are doing well, that there's, you know, their profitability is secured. We don't want to add a lot more channels before we ensure that all our existing dealers are doing well. Okay, great. A couple of clarifications for Kalees. One is on the commodity side. What kind of inflation we saw in third quarter versus second quarter? The second question is on the staff side, staff cost. Was there any one-off in this quarter also? There is no one-off in staff cost, Jinesh. From a commodity perspective, roughly it's about INR 2,000 per bike that we saw for Q3. Just that on the ad spends, we had larger spends of about INR 60 crore towards launch of Classic and the South Pole and GT Cup that Govind talked about, that was also incurred in this quarter. Thanks. I'll fall back in queue. Thank you. Next can we have Nitin Arora from Axis AMC? Hi, sir. Thank you so much for taking my question. Just on the demand side, sir, is it possible to share the waiting periods across new models? Or let's say if you can, the way you can share. Because when we call the channels, they tell us that the bikes are available and especially the single channel ABS are available in abundance. So, is it some specific models? You know, wanted to know where the waiting periods are very low. Because we are getting everything when we speak to the channels, that there is a new Classic, it's available. Whether it's Meteor, it's available. If you can, sir, throw some light on this in fast-moving models, that will be helpful. Thank you, sir. Yeah, Nitin. Nitin, fundamentally it is like this. What has happened is when we added the second source, their capability was in the single channel supply. That's when the single channel numbers were slightly better. It is only a question of some 30, 40 days in which they have to come up and then prime their line for the dual channel. Now, what is happening is the other source is also priming for the second dual channel. In the combinations, in all these things which have to be homologated, we are quickly doing the homologations and all those things. We will be ready soon for the dual channels which will come in more. You saw the single channel slightly more in the pipeline only because of that. Waiting periods are actually, I can take that the bikes are available. I mean, if one wants to buy, despite the strong order book, you have the availability at the stores. No, Nitin, no. Is that right? No, no, Nitin, that's not. I think single channels were available fundamentally because of the single channel supply due to that. Whereas all other models, we are still there in a very healthy waiting period or very healthy order book. Thereby there is a period, there. Why I'm asking this is when we look at your production data and when I see your dispatches, there is a big mismatch happening. Mismatch in the sense your dispatches are not crossing your wholesale despite the strong order backlog. Is it because of corona that suddenly in the third wave without any impact to the economy, the retail is not matching? Just need your comment on that. Thank you. Retails are healthy. Yeah. I don't think there is a huge mismatch within the company. That's right. Let me add to what Govind said. The first point that you said, Nitin, is, I think, in terms of single channel, that is one model, and the contribution of Classic, the contribution of single channel within Classic to the overall portfolio is limited. There is a waiting period that is across Meteor and all the other brands in the portfolio. Within Classic, the rest of the models within outside single channel continues to have a strong waiting period at this point of time. That is largely on account of the supply constraint that we talked, which we think will even out as we move into Q4, Q1 onwards. Now, from a consumer demand perspective, we can look at in two parts. December is more a transition period that you see, and therefore, there is a year-end transition that you also see. That's where you see a little bit of slowdown in terms of retails compared to December to other months onwards. We don't see that as a major concern at this point of time. The demand and the overall booking trend continues to be positive. Thank you. Thank you. Next we have a question from Hitesh Goel. So I'm taking the question from the chat. Yeah. First question is what are the outstanding bookings of Royal Enfield? Can you share this number for past three quarters? Second question is, can you tell us about your plans for electric motorcycle segment? Hitesh, as a process, as we called out few quarters before, we don't comment on the actual booking number that is available. At the same point of time, the booking is extremely healthy, what we hold in hand, and we talked about the bookings. Let me hand it over to Sid and Govind to talk more on EV. On EV, as we've said in the past, we have a strong team, internal team. We have built the team capability, the infrastructure, the product roadmap. There's a lot of work going around in the background that includes a lot of prototyping, a lot of work on new ideas and models, and there's models in the pipeline. But as we said in the past, at Royal Enfield, while we are working very hard on EV, we're not coming out in the very near future at all or in the near future also or with any product in EV. It's all in the works. We think that it requires a lot more thought than what's perhaps being given currently to stick a you know electric driveline into an existing type of vehicle. It's much more complex than that. We're, as you've seen in our new products from the last five years, there's every single new product that Royal Enfield has come out with has been successful and has done what it was supposed to do in the market. We're talking about the Twins, we're talking about Himalayan, we're talking about Meteor 350 and our Classic. Our concept is that we put a large amount of time, effort, energy, capability behind the product that we've chosen to go after or the range of products that we've chosen to go after. We make them extremely ready for market rather than just putting something and hoping for the best. That's our approach. It's a deliberate approach. It's a long-term approach. We may not have, let's say, immediate product in the market like some competitors perhaps. That doesn't worry us. We think it's a long game for EV, and that's how we are playing it out. Thank you, sir. Next we have a question from Amyn Pirani. Yes. Hi. Thanks for the opportunity. My question is for Kalees clarification. You mentioned that, you know, there was INR 60 crore extra cost in this quarter. In general, if I look at the other expenses and if I look at 2Q and 3Q combined, and if I compare it to last year 2Q 3Q, because 1Q last year and 1Q this year, both were impacted by COVID. Despite volumes being down, the other expenses are, you know, materially higher. Is there some, you know, new kind of marketing expenses that you're doing right now? Is there some activity that you're doing? Should we assume that this is the kind of expense level, you know, that will be there going forward? Amyn, two parts to it. One, we talked about the marketing spend of INR 60 crore. These are specific towards launches that happened in the quarter and investments that we did into activities as part of our 120-year celebration, which is the South Pole ride and GT. I don't think so this is a recurring one that we need to look at. Now, sequential quarter, the other increase is also on account of the production ramp-up that happened last quarter to this quarter. We have moved up from about 1.25 to almost 1.7 in Q3. That's the second thing that has happened. Third is we have to incur about extra warehousing charges of about INR 7-8 crores more to store the vehicles and keep it ready for Classic. We talked about it in last quarter, where we planned for the launch in such a manner that the vehicle was available to the customer on day one, rather than having a large amount of waiting period. Retailing of 25,000 was done almost in early October and September. These were the three major things of which I do see the INR 60 crore is something not a recurring one. Understood. Thank you. Just to, you know, go back to the production thing. We saw significant recovery in November, December. In December, in fact, you did hit that 70,000 number, and in January the number was again lower. Is this the volatility from the supplier or which is just a matter of time as the new suppliers ramp up or you know, is there something else happening at your end? Because after December, the expectation was that, you know, at least it will remain in that range of November, December, but then January was, you know, even lower than November in terms of production. It is a supply situation really in January. As I mentioned, when the new supplier was onboarded, at that month, they were also having the back end because it was being developed. They also thought it will take some time, but they could able to quickly come back and then give it. Now they also have to ramp up, so they are also ramping up. It is only a question of the supply situation. As I mentioned, from here on, it will be actually a ramp up, which we will see. Having said, for everybody's clarity, not that the situation for everyone is completely cleared off. Not that globally the chipset availability has come. There's no extra capacity which is added. Mostly it will be the disruptions which were there. Some plant up in fire there. There is snow storm which has happened in some other places. Malaysia flooding. All those disruptions which actually caused issues in the supply chain of that will not be there, hopefully, and that will have a linear supply situation. That's why I'm saying that it will be a ramp up from here on. Understood. Thank you. Thanks. Next we have a question from Chirag Shah. Can you please unmute and go ahead? Hello? Yeah, please go ahead. Hello, am I audible? Yes, you are. I had a question. I had a follow-up question on the single channel and dual channel. Which specific product-wise at company level, how do you look at the contribution of single and dual channel? How should we look at, because it will have an impact ASP, it will have an impact on how consumers are doing, those two offerings. It would be interesting to share some, thoughts on that. Chirag, Govind, let me try and do that. Look, I think the main thought is that we will have dual and single channel for- We will have dual and single channel available for our Classic and Meteor, and Bullet. We will let the market decide. Currently, the supply side is deciding, so it's slightly more bent towards what is available, and therefore we're putting that in the market and sort of the market is pulling whatever is available really as such. Over time, as availability is not the issue, it is really for market to decide. We're not here trying to make decisions for the market, in terms of what they should buy. It will fall into a normal pattern. We don't know that pattern yet because it's controlled by supply side right now. It will eventually fall into a normal pattern. Yeah, that's what we think. Once supply is there, it doesn't matter to us, right? It's, you know, it's really up to the consumer to see what they want. Secondly for Kaleeswaran, just a clarification. There are no more underrecoveries left on the commodities, right? Roughly it could be about the Q3 inflation that we talked about, which anyway we have taken up a price increase in Q4 also. We'll take it forward as it goes from now onwards. What was the price hike? I missed that number, actually. About 1.5% on an average, Chirag, in Q4. In Q4. Okay. Thank you. Thanks a lot. Yeah. Thank you. Next, can we have Pramod Apte? Please unmute. Yeah, hi. A couple of questions on the export side. Seems like it's stabilizing at a particular number on a monthly basis. Will you be able to give me geographic mix for your export, either for last quarter or for the nine months, how it is mixing up in terms of regions? One. Second, how do you work on the export side? Because for us, it looks difficult to predict your export momentum, considering that you already might be having a demand pool. Do you work with a monthly order book, quarterly order book, which you try to fulfill or a yearly order book? Can you give a color how the actual execution of export happens on the ground? On the first part, Pramod, while we don't give a specific number wise annual basis. At this point of time, about a third revenue is led by e-com. The entire I think some disturbance, maybe if you want to ask those to mute. Yeah. Okay. It starts with EMEA and UK, and then we have LatAm markets leading for us, followed by APAC and North America. Now in terms of demand, I think it starts with the same way that we work with the Indian market. It starts with creating the aspiration for the product, which is what we have been working for over a period of time. It started with the launch of Twins. That was a very big success for us in the international market. We started the trend moving towards Himalayan. Now Meteor has also been very well accepted in the international market. It is not about chasing a particular demand number or an order book for a particular month. It's more about having a longer term view. How do we invest in this, in these markets? How do we look at creating the aspiration level for those markets and then fulfill the demand out of that? I mean, just to add, Kaleeswaran was just mentioning about an aspiration. At zero, we actually started what is called as a riders club. Within about a month's time, 8,000-odd consumers actually they signed up to that. You know, that's how we wanted to create the market. That's how people have to become a community. There's a pull. That's what we are doing it in India, and that's what is happening in this. Even in the APAC region, there are rides, people are coming in. Primarily what is happening is, it is an aspirational pull rather than a push. So that we would like to continue even in the international markets. Might be this is to Siddhartha. Considering that Harley has separated its EV division and has been able to create excitement with the [audio distortion]. Do you see, and also you guys are now more closer to the couple of markets which might be right for the EV only, in this segment. Are you advancing your timelines for EVs, considering the way the market is shaping up? Or are you getting more confidence now that the ecosystem is developing and hence you can plunge in much earlier than what you thought? I hope you heard me earlier. We don't plunge in. That's not our approach for anything. We don't plunge in. We are very deliberate. We do a lot of understanding of market, consumer, and huge depth on all those areas before coming in with the right product, hopefully at the right time, right? The market is certainly evolving. The competitors are also doing a lot of things, some more visibly, some a lot in the background in any case. We are. I don't think there's a case for enormously advancing anything as far as we are concerned. We are working on certain projects for the market. We have a new product introduction process. We are improving it. We're making it a bit, you know, adapting it, of course, for EV, but it is a very genuinely amazing process, as all of you have seen the kind of product which has come out, which is truly world-class. I'm talking about the new product introduction process, which includes the product strategy, the program management, the engineering, the supply side, the manufacturing, the quality, all of that. It's absolutely tremendous and world-class, and we're not shortcutting that in any form or manner for EV, especially not for EV, which is an unknown commodity in the market. If you look at motorcycles, there is no EV success story right now in motorcycles. Scooters, there is some trickle of scooters happening, certainly. It's not yet mainstream. It's not yet established, but the traction there will probably happen a bit earlier. Motorcycles, it's still a way out. The technology is not fully ready yet. It will be in a few years, and we're working towards that. Like I said, even while there have been so many players in international, India, all sorts of markets, there is no success story of motorcycle, two wheelers. Not to say that we're not doing anything. We're doing a lot. It's not that that market is available or is there already. We have our take on it. We are working hard towards that thinking that we have in mind, what will be successful in the market commercially, what will be successful for the long term. That's how we're going about it. We're not plunging in any market quickly just to either from a visibility perspective or from, you know, any other perspective. That's not our approach to business anymore. Thanks a lot. Next I'm taking up a question from Binay Singh of Morgan Stanley. It's on the chat. Other two-wheeler OEMs are seeing weak demand. How is demand for Royal Enfield? How is the demand in top ten cities? How are the monthly bookings? Secondly, other expenses are up 35% YOY, while volumes are down 15% YOY. What is driving other expenses? Yeah. The question first is about the other two-wheelers, demand situation. If you actually look at what is happening in the entire two-wheeler industry, even though the 125 cc and below, which normally say it is a very highest number of there the traction is slightly lower. Whereas the higher cc premium motorcycles in a way, so that particular area it is constantly growing. To that extent, where we are playing, we don't see it to be a tough situation for the demand. What's the second call? On the other expenses. I will take that one. Binay, as we discussed earlier, that includes the spends that we talked about marketing of about INR 60 crores. If I adjust for that, the overall EBITDA from 20.2% moves to 22.2%. We also talked about the sequential quarter performance and the operating leverage kicking in. Next we have a question from Kapil Singh. Kapil, please unmute and go ahead. Yeah. Hi, sir. I just wanted to understand how you are thinking about pricing right now. Do you think it's at the right level more or less, or do you think you need to take it up significantly? How do you think of the trade-off between volume and pricing? Do you think there has been an impact on demand because of the pricing increases that we have seen, or in your segment it's not really significant? I think it's too early to look at from a demand perspective, Kapil. You know that as of today being supply constrained, and therefore, we need to see as to at what full-blown supplies where does this stand in terms of a demand impact. Now, coming back to the other question on how do we go about this, are these the pricing features that we wanted to take it as such? These are cost pressures and not that we could give any consumer benefits to it, but largely the cost pressure that is on the table that needs to be passed on. If you look at the industry as a whole, the amount of price increase that has been taken across all players, we are in line. It's not that we are too far off from that perspective. The methodology that we use is a proper structured manner, where we look at what are the relative price index to the competition and where is the source of the growth coming from. How do we benchmark? Then we take a holistic call on pricing as such. Just to add on, as Kalees is talking about the pricing, what we have to look at is actually help the consumer to navigate through this is about making finance availability at the locations where it is required, at the right interest rate and that's what and how do we support, that's what we are all working on constantly in every outlet of ours. Okay. Thank you. Next we have a question from Ronak Sarda. Please unmute and go ahead. Hi. Thanks for the opportunity. Am I audible? Yes, please. The first question is on, you know, setting up the assembly lines in, you know, beyond India. One, can you help us understand what the cost-benefit framework here? Why I'm asking is because, one, we have capacities in India. In fact I understand the duty structure, but it's purely from the capacity. Second, do we have to set up a dedicated supply or a vendor base as well? How does that, you know, shape the profitability for exports? Hi, Ronak. These facilities are not for building any capacity. Primarily what is happening is every country has what is called as a minimum work content, which has to be there. Mm-hmm. There is a share of business which come in. You have to source some components to some percentage, and you have to manufacture some components, and you have to employ so many people. That's how the duty structure has to come in. That's the reason which we are doing it. As well as the dedicated lines which you are talking about, probably it depends on the depth of manufacturing. It varies company to company, I'm sorry, country to country. What we have done is all of our exclusive sub-assembly stations which are required only for our product, there we have put dedicated. Where we can actually share it, for example, a conveyor line, we don't need to invest or something like that or now the partner need to invest. In those areas, we have used the common lines. Testing anyway, it has to be different. To that extent it is dedicated. Product specific, which have to be specific, that has been made as a separate dedicated line. Wherever possible common lines which can be used, we have used the common line. Okay. Second question is for Siddhartha on VECV. One, we have seen, you know, the LCV segment doing very well in the last few quarters. Again, you know, the CNG portfolio has done very well there, which has helped Eicher gain market share. One, how do you see, you know, Eicher's market share moving ahead, especially with competition launching their products? How does Eicher differentiate in terms of, you know, the product portfolio, especially in the CNG segment? In the CNG segment, of course, we have an advantage in on product and on how we position ourselves and how we've been a relative early mover in that market. We've really been able to do well in the CNG market. Like I said, in light and medium duty, we have around a 50% share versus 30% for diesel, so we're doing exceptionally well there. In the larger scheme of things, as you're asking about the positioning and market share evolution, obviously the big focus for us from last many years has been on the heavy duty part, to get to a particular level on the heavy duty. We're really getting there now. Our view has always been that at 10% heavy duty market share, you're a very substantial, let's say, player from many different perspectives. That's what starts a very strong virtuous cycle in the market for us, and we're very much heading towards that. Our entire product portfolio is renewed, or let's say ground up new, not renewed. Our 2000 series is ground up new light and medium duty doing exceptionally well in the market. Even the people I talk to on the road in India. Just the look of the truck. Also, people stop, you know. It's like that level of interest that people have, and it's, of course, only at the skin level. The performance is absolutely outstanding. 3000 has really set its mark as the, you know, ICV/MCV type of product, medium and heavy, perhaps a low heavy-duty product doing exceptionally well as well. Same with up to 6,000-8,000, I'm talking about trucks right now. We've got all that under our belt. We've taken the advantage of BS6, which others were struggling a bit more in. We are getting the type of foot in the door or the number of times we get invited now for customers to work with them or to when they're bidding for trucks or whatever, is very high now. We've got our place in most of the deals that are happening now. Obviously as someone who's growing and doing so well in the market, some of the, or let's call it, the incumbents are not delighted about it, as you can imagine. They're throwing money at deals. I mean, at such ridiculous levels that you can see their profit margin. When a company which is four times our size should not be making losses at this point while we are making profits, right? That's because they're throwing money at deals at ridiculously low levels, which is, you know, and we take some deals, but we have to leave a lot of deals for them. They know we're there. They know we're a better product. They know we're a better offering. Our uptime of our vehicles is what we really consider as the biggest selling point, which is the highest uptime in the market for heavy duty. So that's what's happening. We are actually doing so well against the competition that they have only one tactic left, which is to throw money on the table and to get deals at very low prices, right? If they can sustain that forever, you know, that's unfortunate to their shareholders. From our perspective, you can see that, you know, one can see that we are making headway because we are able to actually be successful and still grow our share, even though we are profitable compared to the others. That's really the outlook, which gives me a lot of, let's say, hope for the future that we are doing the right things and our competitors are left with only one solution, which is, I guess, for the long term, not the ideal solution for them either. Thank you. We have time for one last question from Joseph George. Hi. Thank you. Am I audible? Yes, please. Yeah. I just had a couple of questions. One is, you mentioned that you increased prices by 1 and 1.5% in January. I wanted to understand whether in Q4 over the December quarter, are you seeing incremental raw material pressure or is this 1.5 something that will flow through to the gross margins? Joseph, we will discuss about the 4Q numbers as we drop in at that time. We don't give any specific guidance on quarters at panel, but some of the inflation that we had in Q3, that still we expect to continue for the time being. Sorry, did you mean that in 4Q there is incremental RM pressure? No, forget the gross margin expansion part. Is there incremental RM pressure? Oh, sorry, Joseph. I thought about the Q3 inflation. Raw material pressure, that is actually there. Not that it has gone off, but the intensity of the raw material inflation pressure I'm seeing, but it will pan out for next one or two quarters to actually discuss it. Pricing which was there on the commodity pricing, I see slowly normalized. Understood. Thank you. The second question that I had was, on this, you know, INR 60 crores of lumpy marketing spend that you mentioned in the third quarter. Isn't, you know, marketing spend something that will continue? Because even in future you mentioned that you'll have maybe, you know, one new launch every quarter. Wouldn't this continue every quarter, you know, maybe to a lower extent, but something that will be recurring going forward? Or should we look at, you know, about INR 300 crores as the right OpEx number for the level of production that we had in 3Q? I think, Joseph, there are two ways to look at it. One is that, technically the brand creates the desire and aspirations in the customer's mind. That's where a large part of the marketing spend goes in curating this for us. Now, one thing that the percentage will average out considering the demand and supply that we have today, we expect to come in considering the supply challenges. We don't see that as a significant concern as we look at the forward quarters also. Thank you. Thank you. That brings us to the end of the session. Participants whose questions were unanswered, please reach out to the IR team. Handing over back to the management for closing remarks. Over to you, sir. Thank you very much for joining us for this session. Look forward to talking to you in a few months. Thank you. Thank you very much. Be safe. Thank you, everyone. Good evening. Bye. Bye-bye.