Hi there. Welcome to Eicher Motors Q1 FY 2023 Post-result Con Call. We're happy that the management gave us the opportunity to host the call. We have with us Mr. Siddhartha Lal, MD and CEO of Eicher Motors. Mr. B. Govindarajan, Executive Director, Royal Enfield. Mr. Vinod Aggarwal, MD and CEO of Volvo Eicher JV. And Mr. Kaleeswaran Arunachalam, CFO of Eicher Motors Limited. Over to you, Mr. Siddhartha Lal, for your initial comments. Good afternoon, and hi to everyone. Thank you very much for joining us. Thank you to ICICI for hosting this. Welcome to the Q1 of FY 2022-2023 Earnings Call for Eicher Motors Limited. I hope you're all doing well. This quarter marks multiple new milestones for Eicher Motors Limited and for VECV, our joint venture with Volvo. Firstly, at Royal Enfield, we are continuing our path to becoming a premium global consumer brand from India, and we delivered our highest ever sales in the international markets. In India, where we continue to define the middleweight segment and have greater than 85% share in the above 250 cc segments. We, in motorcycles, we further strengthen our hold on the greater than 125 cc segment with a 36% segment share, which now puts us in number one position in all motorcycles above 125 cc. That means one in three motorcycles sold above 125 cc. Now, even though we're not present in, let's say, 150 to 250, we are still counting that share, and we're one in three motorcycles. We've really been able to grow the market towards Royal Enfield in India, that is. Additionally, we also recorded our highest ever revenue and our highest ever EBITDA at Eicher Motors Limited this quarter. We're just getting started. All these numbers are not including, of course, our latest motorcycle in our portfolio, which we just concluded a global launch of the all-new Hunter 350, which is a premium neo-retro style, compact, muscular roadster style motorcycle. We've just returned from Bangkok, where we hosted global media. Media from all over the world. From Latin America, North America, Europe, India host and ASEAN, Japan, Korea, Australia, New Zealand, so from everywhere. I believe they really, really liked the motorcycle. It was a very fresh, new concept from Royal Enfield for them. You can read the reviews. The embargo was lifted 10 A.M. this morning. You can read actually all the reviews from global motorcycle media. We've also launched it at a very accessible price point. It's an amazing motorcycle with great handling, with 17-inch wheels, with all the bells and whistles that one requires in the segment, but also extremely refined handling characteristics, ride and handling. Very nimble, but also at an extremely accessible price point, which we are extremely confident will usher a whole lot of new motorcyclists into Royal Enfield's world. These are customers who like the brand Royal Enfield. They have a positive leaning towards it, or they love the brand Royal Enfield. For now, our 350 cc offerings, for example, some of them may not be interesting to them. They may not subscribe to a classic look. They may not want a cruiser bike. They like Royal Enfield, but they don't currently have anything in the portfolio that is interesting for them, and that's where the Hunter 350 comes in. Our sole objective with this motorcycle is to get new customers who were originally not buying a Royal Enfield motorcycle. That's on Royal Enfield and EML. Coming to VECV, which is our joint venture with Volvo Group, the company recorded its highest ever first quarter volumes in Q1. We gained market share across light, medium and heavy duty segments. We continue to remain a profitable truck company, which is saying a lot considering all the bad times that have passed. We continue our strong business model that we've always had, the resilient business model we've had at VECV. The quarter also witnessed the inauguration of the first Eicher Electric City Bus delivered to the city of Chandigarh. That's a great milestone for us. We believe we have really strong electric offerings in the bus segment and this is the start of things there. Recently, Volvo Buses India has launched its next generation Volvo 9600 platform in India. It's an all-new modern platform and will have a factory-built sleeper. You should see the photographs of that. It's absolutely stunning. It looks like, you know, better than business class offering in the, in an airplane. We will also have Setra coaches in 15 meters and in 13.5 meters buses. They represent the largest and the most modern buses in India by far. We have also recently released our annual integrated report for FY 2022. That report captures our performance from the last financial year, in addition to a host of initiatives undertaken by Eicher Motors Limited towards its commitment for next stage of growth and for a much stronger ESG vision. Now, with the robust all-around performance at EML and a strong product pipeline and plans in place, we are absolutely confident to push forward on our long-term strategic business plans and objectives. Let me move to the financials. For the consolidated financials for the first quarter of FY 2022-23. In revenue, EML clocked its new highest ever quarterly revenue at INR 3,397 crore, up 6.4% quarter-on-quarter over Q4 of FY 2022, and up 72% year-on-year. Obviously last year there was a COVID effect, but it's still up 72% from last year. Our EBITDA for Q1 stood at INR 831 crore, which is a highest ever quarterly profit, up 9.8% quarter-over-quarter and 129% year-over-year. Our EBITDA margin for the quarter stood at 24.5%, and against 23.7% in the previous quarter, making a 0.8% quarter-over-quarter improvement. It improved 6.1% in the same quarter last year, from the same quarter last year. It's a great improvement again. Profit after tax was at INR 611 crore, which is similar to the same, which on quarter-over-quarter, which was INR 610 crore previous quarter. Largely, the fact that it seems so less is because of lower other income on account of mark-to-market losses of treasury income, and partially offset by state government grants which we received during the quarter. That's our overall quarter. I believe an absolutely stellar quarter. A great starting point for this year and for our future plans. There's lots of new things happening at EML and, you know, we're all super excited about those. Before I get into all of that, I'll ask Govindarajan, who's the CEO of Royal Enfield, to tell us more detail about the Royal Enfield business. Over to you, Govind. Thank you, Siddhartha. Just to add a few more points on what Siddhartha talked about with the Hunter 350. Royal Enfield, if you look at the cadence, we have our Classic 350, and we have our Meteor, we have our Himalayan, and we have the 600 cc twins Continental GT and Interceptor. When we started looking at where is the space for one more vehicle which can address the younger audience, which has an urban fit, which is very compact, nimble, easy to maneuver, and a vehicle which can actually connect with the younger audience more and more. That's where we actually brought in the Hunter on the same well-refined J series machine, powertrain, which is the Hunter 350. Myself, Siddhartha, we were there in Bangkok, along with the world's best journalists across the globe. We rode the motorcycle. We actually curated what's called as a night ride. All of us rode in smaller batches. Everyone came back and then said, "Exactly what we wanted to land in for the younger audience." That's where we landed this on the sixth to eighth. We did all these things, and we launched. Today is the day actually the embargo on the journalists are lifted. You can see the reviews which are coming up in this. This is one such motorcycling which we wanted to offer the pure motorcycling to a larger audience across the globe. The larger audience, we also wanted to keep it at a very accessible price point. We actually came up with our factory fit series at INR 1,49,900, which is a very accessible price point, which has been very well accepted by the consumers. You can see it, the reviews on the social media. All the journalists who rode the motorcycle, their reviews started coming in. It is so well received even by them. Hunter 350 on launch, you can see we have become the top 10 trending in the Google searches. Everyone is now searching for it. You can see what exactly the organization wanted to launch and what the product positioning have to be. Exactly it is landing in that. The booking is open. There's a lot of buzz which is happening at our dealership format. Hunter 350 in all, it's a global product for the younger audience who wanted a bit more compact, accessible motorcycle, and that's what we have delivered through the Hunter 350. Let me now share with you some of the highlights in Royal Enfield for Q1. Total sales, we sold about 186,032 motorcycles in the quarter. Up by 52.3% year-over-year from last year, and 2.1% higher than the Q4 FY 2022. In India, we sold 157,642 motorcycles, which is 51% higher than the previous year. On a QoQ basis, its volumes are more steady. Our market share above 125 cc is hitting nearly about 36% in this quarter as against 32.9% in the previous quarter, as Siddhartha was mentioning. International success for us it has been a steady growth which is happening month-on-month. We have recorded new high in our international business. We dispatched 28,390 units, making an increase of 30% QoQ and about 62% over last year. New variants for VTR we have launched in three new colorways in this quarter. All this have been received very well by the market. With the pandemic situations under control, we also did the Himalayan Odyssey in this year. We were very happy about conducting that. We had about 70 participants riding almost 2,700 km over 18 days. It's amazing after about two years. That's being done. On the occasion of the World Environment Day, Royal Enfield galvanized over 2,000 riders across this community for a pan-India cleanup ride, with a focus on building awareness for and uniting communities to demonstrate concern towards efficient waste management system. When we are doing this, our retail network, as last call also we have said, now we are into optimizing the retail outlets. India, our network expansion plan is as per the target. We are as of now almost about 2,132 retail outlets. Internationally during this quarter, we did an expansion, especially in the markets like Kuala Lumpur, Argentina, Colombia and Mexico, and 12 multi-brand outlets also which have come up. So the total count, including the multi-brand outlet, is almost about 850 numbers +. With the upcoming festive season in the market, the consumer sentiments. Supply chain, you all have been asking, it is steadily improving. The parts availability is becoming better. We are quite confident our sustained growth in Royal Enfield will continue in the coming quarters. Now I will request Mr. Vinod Aggarwal to talk about the VECV business. Over to you, Vinod. Thank you, Govindan and Siddhartha, and very good evening to all the friends who have joined today. First of all, let me give you the details about the industry. As far as the commercial vehicle industry is concerned, I think, after three years of very, very bad recession, the industry is on the recovery path. If you go by the trends of first quarter, I think this year we are going to see very, very handsome numbers in the CV industry, which will be still far away from the earlier peak of 2018, 2019, but still, you know, it will cover a lot of ground, lost ground in last three years. If you look at some numbers, this year, first quarter, the CV industry has gone up to 105,000. I'm talking of excluding 3.5 tons. 105,000 as against previous year first quarter of only around 42. Therefore, even if you just consider that balance nine months, if we take as the same number as of last year. Last year balance nine months was around 300,000. 300,000 + 105,000 of first quarter. It gives you 405,000 without considering any growth in balance nine months. If you add growth of maybe 10%, 15%, which is the current trend, then you reach a figure of maybe around 430,000, 435,000. The industry will be. It is still away from the earlier peak, but also it is getting closer. Industry situation is going to be good for the CV industry. Within the industry, the buses are doing very well because schools have reopened and the situation has improved in other segments also in buses. Similarly, in light and medium duty is almost at the earlier peak levels if you look at the monthly figures. Heavy duty is also. We are now getting consistently every month, 17,000-18,000 units every month. Now, within this industry, if you look at our figures, which Siddhartha has briefly mentioned in his address, we have improved market shares in all the segments. Like in light and medium duty, we are at 27.7%. In heavy duties we are at 7.4%. In buses we have in fact made much bigger progress. We are at 28.6% market share in first quarter, which earlier used to be around 17, 18%. We have made improvements in the market shares in all the segments. We have been focusing a lot on expanding our distribution reach, and we have improved our distribution network. We have added 29 more network points in last quarter, and we are almost adding every quarter two touch points every week. We are consistently focusing on improving our uptime and improving our after-sales with our customers and through our initiatives like 100% connected trucks and the uptime center. Our product range is improving there every day with better customer value proposition in various applications. Coming specifically to the financial figures, for the first quarter, we have total revenues of INR 3,934 crores, which is highest ever for the first quarter. It is up 140% as compared to INR 1,639 crores last year first quarter, even though last year first quarter figures are not comparable because we had the COVID impacted quarter. The numbers were very small. Nevertheless, I think first quarter number, 3,934 crores is very, very respectable figure. EBITDA margin for quarter one is INR 207 crores. Last year we had only INR 18 crores in EBITDA, and we are at 5.3% EBITDA margin as against 1.1% last year. In spite of sharp decrease in input costs as well as sustained changes in the price management, I think we are doing reasonably well as far as the profit margins are concerned. Profit after tax for quarter one is INR 62 crores against loss of INR 72 crores last year. We sold 19,469 units in quarter one as against 2,806 units last year. Export volume also by 3.1% with significant growth in our key export markets. As Siddhartha mentioned, we are very happy that we could launch first electric city bus in the city of Chandigarh in the first quarter. This month we are going to give the balance of the electric buses in Chandigarh. Of course, subsequently, we have also received an order of 150 electric buses from the city of Surat. Recently we launched Volvo next generation Volvo 9600 intercity sleeper coach, which is absolutely state-of-the-art and which will create new standards in comfort, safety and sustainability. Of course we are also coming out with more new models of Volvo buses, both in Volvo as well as Eicher brand name from our post-COVID plant of Volvo Buses. Looking forward, as CV industry is improving, I'm sure we will continue to do well in the CV industry and we are continuing to invest in products, services and network. Together with strong alignment with Volvo Group, we have all the elements to address upcoming market and technology needs, and we will continue to do it in a sustainable manner. Now I hand it over back to Siddhartha for closing remarks. Thank you, Vinod Aggarwal. Thank you so much. As you heard from Vinod Aggarwal, there's a lot going on at VECV. We're continuing to do well and have great value proposition in light, medium duty in buses, in our, of course, Volvo truck, Volvo bus segment. I think of particular interest is the continued growth in our market shares in heavy duty as well, which is the really big market out there. We have a 7.6% or somewhere in that region last quarter, and it's continuing to improve on a regular basis. It's really a story of focus, of continuous improvement and now of enormous customer centricity, which is bringing a great uptime and aftermarket to the customer, which is super important in VECV. From Govind's synopsis, I would just like to say that even at Royal Enfield, we're, I think one thing you can always take back from EML is that we're absolutely super focused. We don't do too many things. We do a few things, and I believe we do them exceptionally well. We have a great pipeline of motorcycles. This is just the beginning. We've got lots of amazing motorcycles coming. We are able to enter newer and newer markets. Within the markets that we're present in, we have lines of dealers waiting to get our distribution because it's a brand that is growing and doing well, and they're making money from it. There's a very positive virtuous cycle that is coming. We're also doing super new, interesting things in the entire world of pure motorcycling, as we call it, pure motorcycling experiences. It means breakthrough things on how we do events, activities, all with a sustainability focus. Rides, custom motorcycles, competition, all of it which is what brings desirability to the brand Royal Enfield around the world. We continue to do that. We have very, very strong and engaged teams, which is the cornerstone of Royal Enfield. We really believe that with all of these, this extreme focus that we have on our customer and understanding consumers and bringing the right product and story out is what is the advantage that Eicher Motors brings on the table. We continue to invest in that, and we believe we will continue to meet our long-term ambitions and targets. As you've seen in the past, we've grown to a true global motorcycling company and a very strong trucking company in India, and that path continues. That's it for me now. Looking forward to seeing some of you tomorrow in our investor meet here in Chennai. Over to question and answer now, please. Thank you. Thanks, sir. Requesting participants to raise their hands for questions. The first question is from Pramod Kumar, UBS. Yeah. Thanks everyone for the opportunity. Congratulations, Siddhartha and Govindarajan, for making RE very accessible again. I think great pricing. Starting, sticking with that, I just want to understand, given how the price point is, and this is where Classic used to be like, say, 4-5 years back, in terms of the ex-showroom price. How do you see the volumes evolving for Hunter in the domestic space? On the export front, do you see this brand widening your customer base and the addressable market even in a wider way and what could be the volume potential on the export side? Because it's a much more youthful product, much more, I would say compact and easy to handle. What will be your thoughts on the domestic and the export volume opportunity? I have a follow-up question for Kalees on the financials. Yeah. Thank you. No, thanks. Thanks, Pramod. Good that every one of you are liking the motorcycle. It is really a lovely motorcycle. The first question which you raised is what does it mean to us in terms of domestic volume? Every product that Royal Enfield is launching, as Siddhartha mentioned, we are a very focused company. We always look at it, what is that, the experience which we give. That adjacencies has actually started giving us the volume. That's how it is. You can see all the products which we have launched so far. We launched our Continental GT and Interceptor 650, it added volume to us. We had Thunderbird when we changed it to Meteor on the J series engine, then that actually doubled the volume there. Classic 350, when we upgraded to the new Classic 350, it has been holding its position as the number one motorcycle which is selling in 120 cc and above. Now we are adding Himalayan and the Scram which we added, you already have seen. Scram has added volume to this, even in the Adventure category. Now, Hunter is a motorcycle which we really thought that if you bring in a motorcycle which is accessible for the consumers globally, everyone wanted a particular format. Here is one for an urban take. The consumers who are having a true love for Royal Enfield, they express their love for Royal Enfield in acquiring some motorcycle of Royal Enfield. They wanted a motorcycle which is a bit more accessible, bit more lighter, bit more nimble. As a result of it, they could not buy anything in the Royal Enfield offering, but they love the brand of Royal Enfield. That's where we really felt Hunter is a motorcycle which comes and addresses that. There's a huge consumers who are actually inquiring our product, and there are drop-offs which comes up in the journey. We feel this is the product which is going to actually address all of them, and that's how it'll actually add volume to us. All our product, you would have seen, it's been actually adding volume to us over a period of time. The second question which you asked is about the international market. International market, Royal Enfield has been entering the entry segment in a way through the 350 cc, because all our J series are now Euro 5 compliant. It's opening up that segment for us when we are entering into the market. All the guys, the journalists who all came and then rode with me and Siddhartha when we were there in the launch, all from U.K., Europe, Brazil, North America, Thailand, all the guys, all the journalists who rode, everyone came back, "Wow, that's a fantastic motorcycle which fits into our country also." Not even one guy turned back and then said, "Maybe it is okay for this country, may not be okay." No. Everyone said, "Yes, there is a space for that." We also see there's a good traction possible even for Hunter 350, which adds into the international markets volume. Govind, any volume targets there? Because the media articles are suggesting 10,000-15,000 being cited to the management in terms of domestic volume. I just wanted to clarify on that bit, and also on export volume potential, if you can share that. We don't normally give any numbers. Yeah. Pramod, we look at how many faces have to be happy with our motorcycles more and more when we give it, and then enjoy the experience. What we want is that more and more people should come into the Royal Enfield fold, enjoy the motorcycle. We are here as a company in promoting motorcycling as a culture. If we are focused into this and create product adjacencies, we feel probably even that number can be lower. Why should not be more? We don't look at any numbers precisely to that, Pramod. Second is on the pricing bit and what it means to the profitability for the company. Yes. Because the pricing is really accessible. I think there are weight reductions and other cost savings. Even adjusted for that, looks like you've gone for prioritizing volumes here. Wanted to understand from Kalees and you as to how should one read the volumes, the pricing and the volumes, what comes from Hunter in terms of impact on gross margins and on operating leverage? Consequently, what could be the ultimate outcome on the EBITDA side? See if you can help us with that. Thank you. Sure. Just at a starting point, Pramod, on this, I think, there are opportunities right at the variant level. We have an entry variant, there's a mid variant and a premium variant. We have all seen over a period of time, Royal Enfield's variant modeling has helped us to improve the profitability also. While there is an attractive launch price that is there, the variant is one opportunity available, and there will be VAVE that will be continuing as we go forward. More importantly, the product, as Govind was rightly addressing, is to look at a growth opportunity for India. As we move forward, it is important for us to balance growth, profit and profitability. From our perspective, we think the incremental capital employed for this particular. Product is already part of the J series. The incremental profit that we'll be getting in absolute value will be higher. The incremental ROCE will be higher and eventually it will be accretive to the EPS also. Fair enough, Kalesh, I get that. Thanks a lot and best of luck, and I'll see you tomorrow. Thank you. Thank you. Thank you. Hi. Next question is from, Binay Singh from, Morgan Stanley. Hi team. Thanks for the opportunity. Congratulations for good set of numbers. I'll just carry on from the earlier question on margins. Clearly a good quarter, but from here on, how do you see margins playing out? Because on one side, is it fair to assume that the commodity tailwind is yet to play out, and in fact even volumes could start to go up, so you'll see some volume leverage? But on the other side, the Hunter would be margin diluted. If you could comment a little bit about directionally where do you see margins going from here? That's the first question. Yeah, Binay, we don't give any forward guidance on margin. At the same point of time, let's look at the levers available and how are we approaching it. Starts with revenue. I think a large part of our pricing action that we had to do with a catch-up pricing on previous accounts that is now largely behind us. There is mix that will continue to grow positively, both on the domestic side and with international catching up. That's a positive sign that will continue. We do think it's very, very early days for us in international and the potential to grow is significantly high from here. On the cost side, the commodity inflation is probably stabilizing right now. We are getting into a phase where the super commodity cycle is over. Touch wood there are no further any global political disruption that will come in to affect it. Right now looks like we're getting into a zone of stability. There is no need for any further pricing action in a significant manner as we have been done in the past, unless we are compelled in, to do that. On a base business pre-Hunter, we are on, ready to move towards an operating leverage. As you could see, the numbers for this quarter is also a visibility from that perspective. Operating leverage has started kicking in, and that's where the EBITDA margin is moving towards. Now coming to Hunter, we need to look at the holistic business model. On a base business, if we are at the X percent of EBITDA, on the incremental business, whatever it is going to deliver is straight coming to the bottom line. That's where we said it will be EPS accretive at the end of the day. On a combined basis, it should further add to both organization and all the stakeholders. Just to add, Binay, in the coming quarters, I think inflation, as Kalesh was mentioning, the super commodity cycle, that is slowing down a lot. We can see that. It is not that in the same place it's there. We also kicked in a lot of value engineering activities. Because of the volatility in the supply chain which we could not get the results out of it, that will also start flowing in for us in the coming quarters. Thanks, team. Is it fair to assume that directionally, the trend should be upwards only and Hunter will not be so low on margins that it sort of distorts the other levers which all seem to be pointing upwards? Yeah. Binay, maybe now we will look at Q1 and Q1 results, and we will get to that as we move forward to the forward quarters. Okay. Move on to the next question, which is on the volume side. You know, encouraging to see the market share trends, but when I look at July volumes, they are the lowest that you've done in eight months or so. Could you talk a little bit about both the demand side of equation as well as the supply side of things? Yeah, sure. Sure, Binay. I think in the July number, Binay, I'm sure you would have seen and checked in the market, the Hunter, which was supposed to be launched around 8th of August, 10th of August. The both channels inventories are built and also working capital of the dealers have to be managed. We have not been giving our Hunter motorcycles to the dealers in the month of July. If I have to talk about what's happening in the demand side in India especially, you know, we have reached above 120 cc a good market share. In the middleweight also we are continued to growing. The market inquiries are really good. More and more inquiries are there. More and more the desirability of owning the motorcycles are higher. On the conversion level, there is a bit of a pressure point which we saw last about 30, 40 days. With the Hunter coming in, there we see that is getting addressed even in Indian market, with the Hunter coming at an accessible price point, it will once again give an uptick onto the demand which is there in India. Thanks, team. Just one thing. What is your average consumer age now? Because we've been saying a lot about Hunter addressing younger audience. I always thought your average buyer age was actually below 30 anyway. What is it for the portfolio now? It's about 30. About around 30 29, 30 Yeah is the average age. Binay, I think what is more important which you have to look at it is not only the age which has to be looked at. You know, young can be even from the heart, right? One can look at it, well, I want to ride a motorcycle, even a guy at 60 can feel it. Hunter is a motorcycle, which has to be there in an accessible form, nimble, easy to ride, and it can actually go through an urban city in tight corners of even the traffic. That more and more a motorcycle which is lighter in weight compared to Classic, compared to our Meteor, that's going to address for the people who really love Royal Enfield, and they also want to own a motorcycle from Royal Enfield with a particular format. That's what is in Hunter which is going to give an additional volume to us. Our average age of the consumers are coming down. More and more young guys are actually coming into the fold of Royal Enfield, fundamentally because as we mentioned, as a focus company, we are looking at motorcycling as a company rather than a motorcycle company. That's where the younger guys are enjoying the motorcycling as a culture in Royal Enfield. Great. Thanks, team, and best wishes, B. Govindarajan, for the Hunter launch. Thank you. Thank you. Thanks. Next, Jinesh Gandhi from Motilal Oswal. Oh, hi, am I audible? Yep. Yeah. Hi. My question pertains to the RM cost pressures which you talked about. Is it fair to say that we are largely, I mean, the entire cost pressures are now in the P&L and second quarter onwards, there would not be material impact going forward? That's right, Jinesh. We don't see any significant headwinds on the material cost, as we stand right now. Okay. Can you talk about the price hikes taken in 1Q and 2Q so far? We have not taken any price increase in 2Q. In 1Q, we have taken about INR 3,000 per vehicle in our 350 cc portfolio, and in Twins we have taken about INR 5,000 rupees. Okay. Okay, got it. Secondly, with supply side issues now, given that we have onboarded additional supplier on the ABS side and product improvement, would it be fair to say that going forward there would not be, I mean, based on the current visibility, there would not be any material supply side related bottlenecks? With the visibility we have today, Jinesh, and the actions which we have taken to protect and you know, it is different levers, right? We have to look at sourcing, different countries sourcing, different levels of sourcing. One more is holding inventory, trying to manage the whole situation. I don't see it to be a major problem at this stage, supply chain volatility. It is slowly settling down. From a sheer efficiency of a supply chain perspective, should I say that everything is in order? It may take some time, but it is not disturbing us. Okay. Kaleeswaran, can you talk about the state government grant which you alluded to in the opening remarks? What's the quantum? It's about INR 40 crore, Jinesh. I think you need to look at this together along with the mark to market. For the quarter, because of the interest rate hikes that we have seen, we have to take a mark to market action of about INR 120 crore. Then we have about INR 40 crore of state government incentive in the form of soft loan that has been obtained. We have done an NPV accounting for that. The fair value accounting has taken about INR 40 crore into the P&L. Net-net between mark to market and in terms of the incentive NPV that we have accounted for, we have lost about INR 80 crore. The mark to market anyway as you would know is notional. Yeah. It will start accruing in the forward quarters. Sure. This INR 40 crore would be part of operating other income or other income? Other income. It's part of other income. Got it. Thanks. I'll fall back in queue. Thank you. Yeah. Next is, Kapil Singh from Nomura. Yeah. Hi. Good evening, team. First, Kaleeswaran, one question to you. If I look at the difference in the consolidated and standalone revenue, it's quite high this quarter. It's about INR 150 crores. Normally it's, you know, quite small. If you could give some color over there, please. Yeah. Typically, if you look at our, international, business, Kapil, the shift is slowly moving towards Americas. What used to be led by Europe, the business is moving towards Americas, and the lead time for Americas is slightly higher. As you look at it today, the average lead time for us from India to, Americas could be anywhere between, say, 8-12 weeks. Any shipments that we have done until last week for Americas gets reversed at a consolidated, level because it's in transit. That's the difference that you're seeing in. Sorry, I didn't get it fully. Can you explain it in more detail? It's an inventory adjustment that has been built from the India standalone business, which is not yet retailed out at the subsidiary level, and therefore you adjust it at a consolidated level. These are bikes that are built from India, you're saying? That's right. In transit. They are not retailed in the. Correct. international markets. Because it's in transit. Okay. That difference is sitting in the revenues over there. Yeah. That gets reversed in the consol. Okay. Understood. In that case, the India revenue should be higher, right? It is right. If you look at from a sequential quarter perspective, India revenue is almost at the same level on a like-for-like basis. Okay. These were shipped in the previous quarter, you're saying? Both. Could both. One would have got a positive gain. What would have got reversed last time. It would have got us a positive right now. What I've built this time would have got reversed at a negative. Maybe, Kapil, I can take it offline to give you a bridge. Sure. Second, I just wanted to check on Hunter. You know, Govind, you alluded to the fact that there are several customers who come, but there is nothing that is suitable for them, so they have not been buying it. You know, what is the primary reason that those customers have not found something suitable? Is it because they want a different form factor, or is it because they think that the product price is too high for them or not as accessible? Also in terms of capacities, because, you know, historically we've seen that for new products, we end up having a very long waiting period. What kind of capacities are you prepared with for Hunter? Do you think you are prepared for the kind of demand, initial trends that you're seeing? Okay. I will go from the capacity which you asked about. Yes, we are aware that initially when we started using the new product launches, we always used to have a supply-demand situations mismatch. From Classic 350 onwards, you can see in the market that that situation wasn't there, because we also have built-in inventory and then went into the market. The back end, we have now sorted to deliver the Meteor also. Sorry, the Hunter also, because we have tested, everything is ready, and that's why we started building the motorcycles also. Capacity-wise is not an issue, if I have to tell you one. Second is, you're also asking about who are the customers who are looking at the Hunter and what is the reason. You know, everyone who are there who wants to own a Royal Enfield, there is always an expression of love towards Royal Enfield. He comes and then when he's in his journey, he finds all the motorcycles which are there. Sometimes they feel that, "Well, I love this motorcycle, but maybe it has to be bit more lighter, in handling." So Classic is nice, but some have to like that Classic appeal. That's why this motorcycle which we are bringing it to him are those people who really love Royal Enfield brand and who likes motorcycling as a culture, but want a bit more agile and a vehicle which is stylish, fun for him to ride and easy to manage, like for his requirement. That's why we found this is set of consumers who are yet to be addressed by Royal Enfield with our own research. Because Royal Enfield as a company, we always say that we make motorcycles only on listening to the consumer more and more. We go to them, the community actually tells us what they want. This is an understanding which we got from the community that, yes, we need this motorcycle in this particular format. We landed that motorcycle and it is getting accepted very well. Okay. Thank you and wish you all the best for the launch. Siddharth, you want to add anything to this? Sure. I mean, we do an enormous amount of work before we launch a product or before we start working on engineering. The Hunter was late 2016, early 2017. We started actually conceiving the idea. Both the Meteor on the J series, as you know, which is our new 350 cc platform. Both the Meteor and the Classic are replacing existing products. That we call as renovation. We believe we also needed innovation, which is to get new customers into our portfolio. While riding and understanding and seeing customers who are not yet buying a Royal Enfield, but are interested, this is the kind of insight that we get, that they want something which is more agile. They don't subscribe to, let's say, a classic look. I do. I love my Classic, but some people don't subscribe to that look. Fair enough. They like Royal Enfield. Some people don't want a cruiser. Fair enough. They like Royal Enfield, right? We are understanding who are these customers, what do they want, what are their interests, what are they doing, why and what type of look. With all that great insight that we build, we then come up with the concept of a new motorcycle like the Hunter. As you can see in the past, we've been able to really get the right divisions and get the right segments and understand. We've not had one that would, let's say new product which has not hit the market, which has not got the right consumers that we want it to. Whenever we launch, like even when we launched a sub-brand of Himalayan called Scram, we got new customers in. We did what we were trying to accomplish because we understand the consumer need super well. That's the forte of Royal Enfield, and that's what allows us to bring a product like Hunter, which is really fresh, and we know it'll attract a different audience than we've been getting today because we've been told that. Thanks, Sid. Thank you. Hi. Next, we have in queue Gunjan Prithyani from BofA. Yeah, hi. Thanks for taking my questions and congratulations on the launch. I have two questions. First, maybe I'll take exports given it's not covered so far. You know, clearly, you know, it's been a great journey last year. I'm just trying to understand, you know, in terms of the overall opportunity, I mean, how should we think about exports? How much can it grow? I mean, we are at about mid-single digit or high single-digit market share in most markets. You know, when you think about the overall opportunity size, you know, is there something that you can share, you know, how big the market is in the midweight category? You know, what is the aspiration on the market share there? Yeah, sure, Gunjan. It's. You know, our international story has to be understood what is our thought. You know, we as a company, we don't rush things. We go to the market, understand the market, and then grow the market. That's what we did. That's what is the success which we brought in India over a period of time. We wanted to go into the international market at a particular product specifications. We have to come to a level. We went to international market first with our Continental GT and Interceptor. It actually opened up a good recognition and an acceptance of Royal Enfield as a global motorcycle brand, fundamentally because it came at a different design level, different quality level, because that's where our extensions started working it seamlessly. At that point of time, when we started looking at the markets, we said, "We'll go to one market, one city, one outlet. We will not go and just sign up to all the dealers and distributors. We never wanted to take that route because we are not that sort of a company. Because we wanted to build a culture of the motorcycling around that. When we are building with our world-class technology centers, which are there, and our manufacturing facility, which is built in very well, the J series engine, which is now Euro 5 compliant, which is now opening a new set of consumers. If I have to tell you how the acceptance is in the U.K., the rider community actually came around. Almost 8,900 people have signed up, as the rider community of Royal Enfield rider community. They just came around. The community build is taking place in all the countries where we are. Now, in the last one year only, we are actually looking at our retail outlets going up. Today, internationally, we have almost about only 850 retail outlets in multi-brand format and in our own stores. There's a huge potential for us to actually open up the retail stores to go near to the consumers. Because every country are different and that country has to be suited to the retail outlet. What is giving to us is all the products which we are launching and giving into the market, compared to last year, we have doubled. In my opinion, it's. We are working on it. That's with all the products which are coming in and the market is just getting opened up. We see there's a huge potential for us outside India. The way we had the growth in India is starting outside India. Okay, got it. Fair to assume that, you know, this can comfortably double from the levels where it is in the next two or three years, you know, that kind of potential is there for market share to reach low-teens levels. Maybe just to add to that, Gunjan, to answer this part. I think eventually today we are in about 70-odd countries, and the size of this market is as big as what is there in India. Our run rate, which used to be about 10,000 a year, we are now clocking at 10,000 a month. We do think it's pretty early days in terms of whatever inroads that we have made into international, driven by people, product and the network backed up with CKD in certain markets. We do think the journey has just started and we still have a long way to go, and it will mimic what we saw in India a few years back. Okay, got it. My second question is on the domestic again. Now, going back to Hunter launch. I know you've covered it a lot in terms of how this bike is different. Maybe, you know, I'm just trying to understand. There is already a younger population which is there buying RE. How do you know, in your thought process, you know, what is the risk of the existing customer down-trading to this? Because, you know, there is clearly a risk of cannibalizing, which is about these three models in particular, let's say, Classic, Meteor and Hunter. How do you differentiate that you don't see an existing customer who was looking to buy, let's say, a Classic, does not cannibalize into your existing portfolio? You know, any of the product, Gunjan, when it is launched into the market. See, we brought in Hunter 350 as a new product. It's two days now, and embargo is just lifted today. As Siddhartha was mentioning, our understanding by living along with the consumer, listening to the community, who are not part of the Royal Enfield. If you're part of the Royal Enfield gang, then you will be having a different view. We went to the community. We were trying to understand what do they want and all. Everybody was looking at a motorcycle, which has to be very agile and as I mentioned, slightly lower in weight, because that's where they were looking at. This is the Hunter, which is actually addressing to those set of consumers across the globe, let alone in India. As Siddhartha was mentioning, someone likes Classic, right? We differ there. Siddhartha likes Classic motorcycle. I like Meteor in our portfolio. Someone else will like a different form. We are looking at Hunter is a form which is actually there for that urban setup, which is there for the current level of traffic situations and the younger audience who want, "I want to use it for commuting and for my leisure purpose and for my enjoy purpose and for fun, but I need something which is very agile, nimble, easy to handle, lightweight." That's where the Hunter born. Will it come and then take the Classic market away? It can't. Will there be a borderline to some extent here or there? Probably, yes. That's how the market will mature over a period of time. That's how it would be. We don't see as a company that it is the same vehicle. It is different. Because that's what consumer told us, and that's how we brought the vehicle there. We are seeing the last one and a half days. That's why I said it's just one and a half days born baby. In one and a half days, whatever the new inquiries, bookings which are coming up, it is encouraging to us to see that there are new consumers whom we were looking at, that these set of consumers have to come in and enjoy the motorcycling in the Royal Enfield brand, and that's what we wanted and that's what is happening as of now. Okay. Sure. Thank you so much. Next, we have in queue Hitesh Goel from CLSA. Thank you for taking my question. I have two questions. First, you know, I wanted to get a perspective from management, right? Before COVID, I mean, in peak, we used to do 75,000 a month kind of domestic volumes, right? We have seen the impact on volume in domestic market, which I believe is due to pricing. Because the brand has not got impacted. You have been launching a lot of products also, and the product feedback is pretty good. You know, this number, do you think will, you know, start coming in next two years when the income increases and there's no increase in prices from here on if there's stability in commodity prices? What is the thinking on that? Secondly, on exports front, you know, you have talked about brand getting established. Should we assume margins will go up significantly there because of scale, you would give lower retailer margins, right? Because initially to build a brand, you have given higher retailer margins, I would guess, and the promotional expenses will come down. Just a sense on these two aspects. In terms of domestic market, pre-COVID to post-COVID, I think let alone the motorcycles, Hitesh, all products are being looked at how will the market come back post-COVID situation. I think it is just coming up, and it's coming to the normalcy level. Not that it has come to the pre-COVID level for everyone, any product for that matter. When the COVID situation comes in, I think it will be back for everyone in the same speed with which the market grows. Hunter will add us more volume into the overall. That's what is we are expecting our growth will be there. The next question which you were asking is about the international margin. Hitesh, I think again, the journey of international, within the markets is into two parts. We have developed markets and developing markets. Developed markets is already margin accretive to us, so any further growth will only further add to it. There are markets like Brazil, which has got huge potential in terms of what it can offer as volume to us. Having said that, as you would know, there are challenges around, the entire tax structure and the foreign structure. We are trying to see how to go about it and one by one, we are sorting that out. Over a period of time, as scale improves, these markets would also start mimicking operating leverage that we have seen in the past for Indian business. Sorry, just a clarification. Any clarification on the retailer margins in developed markets? Have they come down because where we have established a brand like Argentina, Colombia, Thailand, just to get a sense on the trajectory of the margins. Just as an example, we do take a call on that depending upon the country's growth, margin profile, potential and what is there in future. We have done that in the past, but I wouldn't want to give any forward guidance on that as to would that be the way forward for it. That's a lever that is available. Sure. Thank you. Thank you very much. Hi, all. Due to time constraints, that was the last question. I'd like to hand over to the management for closing remarks. Okay. Thank you all very much for attending this. As you've seen, we're, you know, a company on a mission and moving forward rapidly. We have a investor day after tomorrow. For those of you who are coming, we welcome you tomorrow evening. For those who can't make it, we will be broadcasting the day and we'll have a, you know, pretty intense day of to explain what we're doing, our, you know, business model, our plans, all of that. We urge you to join online in case you're not attending physically. Thank you very much, and look forward to seeing you soon. Bye-bye. Thank you very much. Thanks. Thank you. Thank you very much.