Ladies and gentlemen, good day and welcome to the Hero MotoCorp Limited Q2 FY 2025 earnings conference call hosted by Nirmal Bang Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star-10 on a touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Arora, CEO of Nirmal Bang Institutional Equities. Thank you, and over to you, sir. Thank you, Steve. On behalf of Nirmal Bang Institutional Equities, I'd like to welcome everyone on this call for hosting the Q2 FY 2025 results call of Hero MotoCorp. At the outset, I'd like to wish everyone a very happy Gurpurab, a very auspicious day to be holding this call. I'd like to thank the management of Hero MotoCorp for giving us the opportunity to host them for this quarter's earnings call. I'd like to hand the call over to Mr. Umang Khurana, who is the Chief Risk Officer and the Head of Investor Relations at Hero MotoCorp for the management introduction, and to take the call forward from here. Umang, thank you, and over to you. Thank you, Rahul. Hello, everyone, and happy Gurpurab. For the quarter call, we have our Chief Executive Officer, Niranjan Gupta, on the call. We have Vivek Anand, Chief Financial Officer. We have Ranjivjit Singh. He is the Chief Business Officer, India Business Unit, and Swadesh Srivastava, who is the Chief Business Officer for Emerging Mobility Business Unit. The call is for an hour. We will begin with opening comments from Niranjan and Vivek, and then take your questions. Over to you, Niranjan. Thanks, Umang. Good morning, friends. A lot has been happening in the world, and it seems like '78 is a new '58, and it also means that nothing is impossible in this world, as we have seen with the U.S. elections. To the home, of course, the election fever resumes after the festive cheer that we have seen. And we have our own reasons to cheer, as you saw, with another quarter of highest-ever revenue and highest-ever bottom line, and many of the firsts that you saw in our yesterday's results. I'll, of course, leave Vivek later on to talk in detail more about the results. More importantly, the results are testimony to our strategy playing out very well in terms of execution, and we'll continue to stay true to that strategy. Our P&L shape is stronger than ever before. Our balance sheet is stronger than ever before. The cash flows are stronger than ever before, and that allows us the flexibility and the headroom to invest even more aggressively behind our growth priorities, which we have talked about earlier, namely EV and premium specifically. So we'll be investing behind brand building. We have already talked about the new model launches they're going to come up with. There's a lot of excitement in the future, excitement in the premium segment, as well as the scooter segment, over the next six months, as you will see. The economy, I think, is on a more positive trajectory than earlier, clearly, and we are very optimistic about the outlook of the economy in general and the auto sector in particular. So overall, I would say the festive cheer will continue even beyond festive. With that, let me just hand over to Vivek to take you through the details of the results. Thank you, Niranjan. Good morning to all of you. Thank you all for joining the call, and warm greetings for the festive season to everyone. I'm pleased to report strong financial results for Hero MotoCorp for the second quarter financial year 2025 and H1 financial year 2025. The company recorded its highest-ever quarterly revenue of INR 10,463 crores, reflecting year-on-year growth of 11%. Highest EBITDA, which stood at INR 1,516 crores, growth of 14%, and highest-ever quarterly PAT of INR 1,204 crores, growth of 14%. The company also reported its highest-ever quarterly revenue from parts, accessories, and merchandise business at INR 1,456 crores, year-on-year growth of 7.5%. Moving on to the half-year financial year 2025 results, the revenue amounted to INR 20,607 crores, year-on-year growth of 13%, highest-ever EBITDA at INR 2,976 crores, a growth of 17.4%, and the highest-ever PAT of INR 2,326 crores, year-on-year growth of 24%. Our continued strong focus on cash management resulted in delivering cash from operations during half one INR 2,817 crores, which is up by 160% over last year, strengthening our financial position even further. EBITDA margin during the quarter for ICE business improved by 160 basis points to 16.5%, driven by mixed improvement, lower material cost, and deep savings, while we continue to invest behind brand building and new business. During the quarter, after taking into account the investment behind EV business, INR 175 crores, the overall EBITDA margin improved by 40 basis points to 14.5%. Our continued efforts in the EV business have started to show encouraging results as we further scale our volumes and improve market share in the segment to now double at 5,000 units per month during the quarter. We further scaled up to 11,600 units during the festive and gained 20% market share in five cities and 10% in 10 cities during the festive period. We will continue to improve the product contribution as we scale up volumes and drive value efficiency with the launch of new products, covering all price points later in the year and in early next year. We clocked the highest-ever festival sales of 1.6 million units this festive season, 16% revenue growth in the festive period of 32 days, reiterating the confidence customers have with Hero. During the period of 32 days, our Vahan market share improved to 31.6%. Moving ahead, we'll continue our investments behind new products and segments, including premium, EV portfolio, and improve customer experience in-store with Hero 2.0, Premia, and online with investments behind digital and technology. I'm delighted to share with you that we have been recognized for our contribution towards sustainability by the Dow Jones Sustainability Index for 2024. We are the top-rated two-wheeler company globally and the fourth in the world in the auto sector on the DJSI. We are optimistic about the growth prospects of the two-wheeler industry and the continuity of demand and recovery in the broader two-wheeler market for us, both rural and urban. Ramp-up of 125cc portfolio, new product launches, and strong investment behind building power brands, we expect to grow ahead of the industry. On that note of festive cheer, let us open the floor for Q&A. Over to you, Umang. Thank you. Thank you. We'll take the questions now. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, please limit your questions to two per participant, as there are several people online in the queue. The first question is from the line of Kapil Singh from Nomura. Please go ahead. Good morning, sir. Congratulations on a strong performance, and also the rankings for Dow Jones Sustainability Index. My first question is on demand environment itself. I saw that the company has grown around 13% in the festive season. How does it compare to the industry growth, if you have any data on that? And are you seeing, after the festive season, also demand sustaining? That would be my first question. Good morning, Kapil. Ranjivjit here. Happy Gurpurab and festive greetings again. The festival was indeed very, very positive for us, as we saw. We prepared very well. The preparation for something like this that goes into a result like 1.6 million with a 13% growth, obviously, all the channel partners inspiring them, motivating them, getting onto the same page, getting the production and the inventory geared up, and the model mix geared up for that takes a lot. Building that connect with the customers, with our prospects, and therefore the theme that we brought in was "Shubh Muhurat Aaya, Hero Saath Laya," and that really resonated very, very well, I must say, across. In addition to that, the work that we did around our power brands, the Xtreme film, I'm sure you couldn't have missed seeing the Virat Kohli film that we did with Xtreme 125, as well as Xtreme 160, the film that we did with Megastar Ram Charan for Glamour, as well as the excellent campaign that we did for Super Splendor around mileage. All of that resonated very well. We saw the upswing coming in from rural as well as from urban. Getting a result like this, obviously, has to be a pan-India effort, and that landed very well. It resulted in a Vahan share increase in October, as well as in November. We see that continuing in terms of the trend and the outlook that we currently have, which is the auspicious days of marriages continuing, et cetera, is still quite positive, I would say. So overall, it helped us to reduce our inventories incredibly. And so overall, I would say we're very, very happy about the way the Dhanteras happened to the highest ever for us. The overall festival results are good. We believe overall it's been an excellent performance by HMCL. If I may just ask Swadesh to talk about the EV festival as well. Yeah. Thank you, Kapil. It's been a great festive on the VIDA front as well. We clocked 11.6k units in retail, and we have gone to a market share of 5.4% overall. And each of the zones have fired up on this, and we see very uniform growth happening across the country. Obviously, the top markets continue to grow fast, but we see all the regions contributing to this. Yeah. And also, Kapil, in terms of the question that you asked around how do we look moving forward, like Ranjivjit said, the positivity is continuing. You also see the cheer around a lot of people getting united, and I mean wedding days. And of course, a lot of positive from the monsoon are yet to come in into the incomes at the bottom of the pyramid, which is where, like initially Vivek said, that we are very positive about the outlook. Oh, that's great to hear. So the second question about margins, we saw very good improvement on a quarter-on-quarter basis. Probably the other players may not have seen this when I look at the data. So it's a two-part question. First, if you could just let us know, is it just the parts mix or any other factors are here? And second, we can also see particularly, I was talking about gross margin. And the second is we can also see investments going on as well from your side, and you have talked about it for some time to drive growth. So how should we see the investments for growth continuing? EVs in particular, you're still investing close to between 150 to 200 basis points. Do you see a visibility that localization and PLI benefits, by when could they be available? As they come, should we expect margins to improve, or should we expect that you would invest more for growth as you have been talking about? So, Kapil, let me take that. In terms of our margin, it's been a continuous improvement. So it's not just one quarter's improvement if you see it's been continuously improving. And it's on the back of, of course, some benefit from the commodities, but there's deep savings. And the third big element also is the mix improvement. We have been optimizing our entire portfolio over the last eight quarters, as you have seen through Xtreme series, and each one of them starts adding to the margin. So it's been a continuous improvement. Investment behind EV, of course, 200 basis points, and as the cost curve keeps coming down through external factors on the sale prices as well as internal actions that we are taking. In terms of scale and the builds, it may actually not require as much, but that's something to be seen. We will, of course, continue to invest to get the growth. And as far as margin is concerned, we've always maintained the overall range of 14%-16%. And of course, our financials allowing flexibility. Vivek, you want to add any more color to this? Yeah. Yeah, Yeah, just one point, Kapil. So I think as far as the overall business is concerned, we will continue to invest behind growth. Right? So So our priorities are already very clearly defined. And we'll make sure while we are investing behind growth, we'll continue to really deliver on the profitability in line with the guided path we've given to you. Sure, sir. And on the PLI part as well, if you could comment, by when are you expecting to be eligible? Hi, Kapil. Yeah, this is Swadesh. So in FY 2026, you'll see our products getting compliant with PLI, and those benefits will start to improve. Thanks a lot, sir. I'm wishing all the best. Thank you. The next question is from the line of Amyn Pirani from JP Morgan. Please go ahead. Yes. Hi. Thanks for the opportunity, and congratulations on a strong performance. So obviously, this question has been addressed partially with Kapil's question. We are hearing all different kinds of news flow on automotive growth moderating, slowing down. We have heard from some financiers also, especially on the two-wheeler side, that asset quality is starting to become a problem. So obviously, we are getting into marriage season that helps you on a sequential basis. But generally, over the next six to nine months, are you seeing any signs that the momentum that we have seen in domestic two-wheelers over the last one and a half years, is that moderating, slowing down, or things are going as they were in the last six to nine months? Some color there would be quite helpful from a financing side as well as from a consumer inquiry sentiment side as well. In fact, I mean, I would say that a good part of the bottom of the pyramid, as we call it, is yet to fully participate in India's growth story. And they are coming back. We've seen them in parts in festive so. And of course, as we know, over the last three, four years, there's been huge government CapEx spending which has happened. These things have a long-term positive impact. And of course, the crop and monsoon are all short-term. If you look at even the initiatives which have been taken by the government during this Union Budget and continued focus on creating long-term investments and employment, I would actually say as we move forward the next four to six to eight quarters, as the bottom of the pyramid starts participating more, this would actually benefit the economy, of course, and the auto sector in particular, and especially whichever is arising out of the rural. Do not see negative there. In fact, see only the positive side there. The rest, of course, whether it's the marriage days or these are all short-term factors, but over a medium term, that is what we see, that the growth still does not have the full dividends of the bottom of the pyramid which is yet to participate. That's helpful. So if I may just maybe ask for some data points, what was the financing share in the current festive period, and how much of that was done by Hero FinCorp? And also, how did you see any extra discounting or schemes in the market by competition this festive vis-à-vis last festive? So on the finance penetration during the festive period, the number was close to 66%, of which HFCL was around 26%. That's almost in line with the last festive and festive year. Okay, so you're saying 26% of the 66%, so 74% is done by external parties. Is that? Yes. Okay. Wow. Anything on the schemes in the market this festive? Did you see more competitive activity there vis-à-vis last festive? No, I think as far as the schemes are concerned, every year the festive season has those schemes. It is not that this festive as a percentage of revenues were anything disproportionate or out of the way. That's helpful. I'll come back in the team. Thank you. Thank you. The next question is from the line of Gunjan from Bank of America. Please go ahead. Hi. Thanks, Team, for taking my questions. And thank you for sharing that highlight, really. It sort of answers a lot of questions. I just had two follow-ups. One was on the demand, continuing with what Kapil and Amyn also asked, how divergent is it between rural and urban? And the reason I ask this is because a lot of companies are talking about urban moderation. So in your book, you actually see both very clearly. So if you can sort of give us some comments on how did that 13% festive growth look between rural and urban and general color on both, that would be the first question. So I'll ask Ranjivjit to talk about that. But before that, let me just talk about his stance. Can Can be looked at in different ways. So when the rural percentage goes up, you can say urban moderation. Or the other way to look at it, you can say now rural has started participating more. Over to you, Ranjivjit. Okay. With that, it's a very interesting phenomenon, and I think these 32 days of the festival give us a good insight in terms of how consumers behave also in different zones and regions of the country. Just some background. There's some background noise. Maybe we want to mute? We all want to celebrate, but maybe we'll do that right after the call. Yeah. Yeah. That's cool. I didn't mind that music. Ranjivjit, over to you. That was rural and the celebration. Yeah. So the first part of the festival, I think everyone participated. There was obviously some pent-up demand after the start dates, less marriages in H1, et cetera. So there was a lot of enthusiasm. But in the second part of the festival, I'm sure everyone's aware about the rainfall, the unseasonal rainfall, some of the cyclone effects, et cetera. What was really good and heartening was that the inquiries kept going up. And that gave us a very strong indication that there is demand right out there. So the demand was there. And then obviously, in the last part, when Dhanteras comes in, it went up literally like a rocket. So that again tells you a very balanced demand trend that goes out across urban and rural. In our case, particularly, we obviously benefited with strong rural demand in addition to the urban flow that happened. I think the fact that there was pent-up demand before the festival and the oncoming wedding season, which people also use this as an auspicious time, the festival season, to buy. I think both sides it worked well for us. So to give you sort of a thing in the festival, what really came through was a very strong consumer buying behavior that we see continuing even as we go forward, as we shared before. So overall, between rural and urban, I think it was a very, very balanced and good demand trend that we saw. Okay, so it's fair to assume that both were double digits for you guys, I mean, two percentage points here and there, but both were similarly positive in the festive season, both urban as well as rural. That's right. I assume that urban was in single digits. Yeah. It is in the broadest sense. Of course, the rural came in a little higher, but I wouldn't make too much out of that. I think it's very balanced, like I said. Both were double digits. Yes. Both were double digits. Yeah. Okay. Got it. And the second question I had on the EV market share that you speak about 20% share in four towns and 10% in 10 towns. I mean, what is it that we are getting right in these towns? Is it the brand Hero? Is it the reach? I mean, if you can just share some color on how we are progressing in terms of scaling this business up, because 20% market share does look quite impressive in four towns. So which towns are these, and what drives higher market share in these towns versus lower in some other towns? Hi, Gunjan. This is Swadesh. In festive, we saw huge growth in markets like Kolkata, Mysore, Cuttack, Bhilwara. These were some of the markets where we saw 20% market share, while others also participated quite heavily, like Delhi, Bhubaneswar, Patna, and all, where we saw more than 10%. I think what is working for us in these is that we have a very strong sales network in these areas, and the demand for EV, especially for the customers who are looking for reliable EV from likes of the House of Hero, is definitely there. We have definitely strengthened our dealer density also in these markets, and a combination of that is really helping us grow fast in these markets. And also just to add, Gunjan, apart from what Swadesh has talked about, it's also our footprint of expansion as to how we are pulling out. For instance, as we keep expanding the Premia stores footprint, wherever these stores are coming up, there obviously there's more traction and easier to convert the customers to the Premia stores. Similarly, the Hero 2.0, Hero 1.0, 2.0, and which is where we are putting. So it goes simultaneously also with our expansion of our upgraded 2.0 and the Premia store, apart from, of course, the network and the disproportionate focus that we are putting out in these. 30 cities. Absolutely. Yeah. Okay. Okay. Got it. I'll join back with you. Thank you so much. Thank you. The next question is from the line of Chandramouli Muthiah from Goldman Sachs. Please go ahead. Hi. Good morning, and thank you for taking my questions. My first question is on the premium portfolio, where we are making efforts in expanding the product portfolio as well as the network. At this stage, it appears that in volume terms, about 18%-19% of our volumes are in EVs plus scooters plus 125 cc and above. So just trying to understand from a margin perspective, what's the sort of scale we need to achieve here to get that portfolio closer to corporate average margins? So in terms of the scale that we are talking about, given that we leverage our existing scale of manufacturing, of distribution, of sourcing, we don't require to scale too much up to get to the normalized margin of those segments. I won't give a number, but I would say that anything upwards, wherever you are able to get around 8%-10% market share, we are able to get to the normalized margin of that segment because of the power of existing scale that we have, Chandra. I hope that answers your question. Sure. That's helpful. Second question is on electric motorcycles. So I think you did make a very interesting presentation in January this year, at the time of the Xtreme and the Mavrick launches. I think you had mentioned that you'd start with performance, then premium, and then over time go to mid-premium and mid-segment on electric motorcycles from FY 2026 and beyond. So I just want to understand how you're thinking about that plan and also on timelines for execution on that. Timelines? Sorry. You asked about the electric motorcycles? That's right. That's right. The move from performance to mid and what is the timeline for execution on that product plan? Got it. Got it, Chandra. So basically, as far as EV motorcycles, as we had talked about that we are developing in partnership with Zero Motorcycles. And that's something that, while we've not given out the timeline, but the work is in progress, and it will be coming in the mid to late segment. I would say it's in the advanced stage. We haven't announced the timeline as yet, but we would be looking at something which would not be too far off. But that's what we are working on, and it will come in the performance motorcycle segment. On the scooters part of it, on the EV, of course, we are expanding our portfolio. I'll ask Swadesh to talk about that. It's happening in two stages. But Swadesh, why don't you talk about how we are expanding the VIDA scooter portfolio? Yes. Hi, Chandramouli. So this is Swadesh. On the scooter side, while we are selling the two models right now, you will see addition happening and expansion to other price segments happening before the end of this calendar year. And within six months of that, you'll see even further expansion going into other user segments. So we'll have a very robust portfolio within six months. So basically, within six months, you would have covered most of the price and the customer segments as far as EV scooters is concerned, Chandra. I hope that answers your question, Chandra. Got it. That's helpful. And lastly, just a quick follow-up. I think a few quarters back, Ranjivjit, you had shared that roughly 55%-60% of your inquiries were coming from rural versus the prior period of 40% of inquiries coming from rural towards the end of COVID. So just want to understand at this stage if you could give us an update on what percentage of your inquiries are coming from rural. That trend continues, Chandra, and that we have seen in the festival as well. And like Ranjivjit talked about, that resulted in overall 13% growth. And within 13%, it was really higher on the rural side and a little less on the urban side. So that trend continues in terms of the participation, the positive momentum on more participation from rural. Got it. Thank you very much, and all the best. Welcome. Thank you. The next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead. Hi. Good morning. Thank you for taking my question. My first question was on the financing side, which we thought we had just heard. But how has been the delinquency, especially in the two-wheeler automobile, which you have in Hero FinCorp, over the last quarter or two? We do not comment on segment-wise delinquencies, but what I'll ask Vivek is to maybe spend just one minute on the Hero FinCorp overall, what we see as performance. Yeah. Very briefly, I think in the first half of this financial year, we've seen the delinquencies and the collections slowing down. And so as a result of that, that has really impacted the profitability of HFCL. Right? And And so the company is really taking steps in terms of really improving the collection efforts. Hopefully, we'll see collections coming back in the second half of the year. And their loan book overall, just to supplement Vivek, has grown 16% in quarter two over quarter two. And they're on a very strong trajectory of their AUM and the growth, which is there. And of course, it's a short-term phenomenon, which is the increase in some of the GNPAs. But it's well managed and moving forward, and they're well on their path to IPO. Yeah. And also, just to add, I think what we see in the result of HFC is something which we are seeing across the industry as well. Right? The delinquency rates, right, and the cost of credit actually has gone up, impacting the overall profitability of the NBFCs. Yeah. Thanks for that. Yeah. That is something which I'm noticing is happening. My question was more specifically that your credit cost in the second quarter has gone up. So is that across the segments which you are seeing, or. Or Or together with the outlier or even within the two-wheeler also, we would have seen a variation to have. So, I would say that that's more related to the Hero FinCorp corporate answer, so we'll not get into that in terms of answering their credit costs. Yeah. Fair enough. Okay. My second question was on the premium store strategy which we have. So we are looking to open about 100 stores by the end of this year. I would assume that you would further expand beyond that. So based on the strategy which you have on the premium store side, what kind of monthly premium volume do you need to make that sustainable? And I would be assuming that you would have about 30,000 monthly volume right now. Is that enough to sustain the expansion strategy that we have on the premium store side? What we expect is that any of the premium stores that's opened up to be sustainable within 12 to 18 months' timeframe. So that's roughly the timeframe that one is looking at. And we continue to have a lot of interest from our dealers in terms of opening up. We've already activated 58, and there is a path forward to even accelerate that. Ranjivjit, why don't you talk about the traction on the premium store and the type of customers that are coming in and what the dealers are saying, the NPS scores, and your accelerated path for expansion? Yeah. So this is something I really wanted to share with you all. During the festival, I traveled a lot. I went to Vadodara, I went to Alappuzha, Kochi, even Bulandshahr, Mysuru, Bengaluru. I traveled to a lot of places. I think I must have, out of the 58 that Naveen Chauhan mentioned, I must have traveled to at least 13 of the premium stores. And the dealers are very, very excited. The dealerships, the premium stores are looking, if I can use the word, gorgeous. They are fantastic in terms of the welcoming atmosphere and the way the customers are taken into a different realm of imagination. And I would encourage and invite you all, when you do visit the market, have a look at it. It's a nice experience, very, very nice experience. Similarly, Hero 2.0 are also, and this time when the customers came in, they all had a fantastic experience in this new avatar of Hero coming into Hero Premia and coming into Hero 2.0. That has lifted a lot of the conversions that we have seen. So we've seen a lift in the conversions. The Hero Happiness Score, the Net Promoter Scores that we are seeing, again, there's a lift in that that is coming through. The customer service upgrades that we've done, I mean, the bigger ramps, the training, the software, all of that is adding to the overall experience that we put into place. So these are things like, Niranjan says, will take a year and a half for it to reach the level that we have anticipated. But I'm sensing that there's a lot of excitement around this, and also our dealers are participating very well around this. In fact, let me just add to this that unlike, let's say, if you were to be only in this segment, the viability that you will require to be sustainably expanding will have a lot more pressure compared to us, where we have the power of scale. So most of our dealers who are putting up the premium stores are our existing dealers. And therefore, there are profits from the existing stores, which is from our core which is coming in. And therefore, one doesn't have to look at a standalone viability for the sustainability of expansion. So that will never come in question. But equally, we are mindful that we should look at getting break-even points of these stores within 18 months or two years' time. Ranjivjit, just add one more thing, which is when I visit, I see a different set of customers coming into premium stores. So that, again, is an incremental kind of new customers that are coming in that, again, has a lot of. So our expansion will continue in short. Yes. Got it. Great. Thanks a lot for that detailed answer. Thank you. The next question is from the line of Pramod Amthe from InCred Research. Please go ahead. Yeah. Thanks for speaking. So first question, if you look at the export markets, you have in the Philippines, you have Nigeria, and also Brazil, Latin America, and the economy lines. What's the volume output, if you look at it from a 2-5-year perspective, what these markets can bring into you? Because they seem to be pretty decent size. So why, again, it's not our policy to give a volume outlook. But if you look at the first half, we did grow 30% versus the industry growth of 16% as far as the global business is concerned. And therefore, that led to an increase in the market share to 6.1% in quarter, which you compare sequentially up by almost 60 basis points. And second half, we have the plans to ramp this up even further. We are seeing a good traction coming from markets like Colombia. In fact, Colombia, I must say, has delivered their first quarter of a bottom-line turnaround. They are cash and EBITDA positive for the first time. And of course, then we see traction coming from Mexico and from some of the other countries as well. There are countries that need to fire more, and that's because of their geopolitical, their economic situation, which is Bangladesh, Turkey, Nigeria, but as it gets sorted out in terms of the economic scenario, that should also aid the growth of our global business. I think our focus there, disproportionate focus on growing the top 10 countries while nurturing the rest of the countries and making selective entries into some of the markets is starting to play out well. The second question with regard to the quick commerce and the various segments you're shaping up, where the entry-level two-wheelers might be used. How are you seeing that? Is there a study or any breakdown on the size of that market? What's your product suite there? What's your strategy for your products both in the ICE and EV space? Any thoughts in the short and medium term? So as far as quick commerce is concerned, usually, I mean, different parts of this use different types of vehicles. And some of them use the entry-level motorcycles. Some of them use a lot of nowadays the EV scooters, but some of them use low-end, some medium-end. So that, in terms of the shape of the market, is developing in terms of vehicle usage. Of course, we have our own institutional business segment which works on this. And in terms of product format, also, the VIDA team is working on customized B2B formats. Of course, early days there, but that's also in the offing. So therefore, there are institutional business segments in the company which actually works on that. In fact, to these segments in this festive, we would have probably sold close to around 30,000 vehicles, with big buyers being the usual ones who do quick commerce and food deliveries. Sure. Thanks, Ranjivjit. Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead. Yeah. Thanks a lot for the opportunity, and congratulations on the very good festive, what you're seeing. So my first question is really related to the buyer behavior. Because what we've seen, it's probably not only in two-wheelers but also in other categories, that demand going into the season was not that strong. And demand really came up very strongly during the festive season because of various marketing efforts and some categories seeming to discount. And just trying to understand, are we seeing that the customer's on the ground getting smarter and waiting his purchase for the festive season so that he gets better deals? And of course, there's the festive cheer and all of that. Because the reason why I ask this is, for example, last year, we had a counter retail of 1.4 million in 32 days. But the entire October, November, December, Vahan retails were a much weaker number in context of 32-day retails of 1.4 million. So I'm just trying to understand, are we seeing massive bunching up of demand which is happening around the festive season, especially in the rural markets? Because we are not seeing that momentum in Vahan registration data beyond the festive season as such. And I'm talking about last year as a specific example because you had a very strong retail last month, last year as well. So if you can just help us understand the buyer behavior here. Yeah. Thanks, Pramod. Good question. And we should meet at some time between festive and. Yes, sir. Sure. Absolutely. Right. Let me come to this. First of all, on your question of are the customers getting smarter, we do believe that the customers are the smartest lots. And customers are the king. They are the smartest lot. And we always need to learn something or the other from our customers. And equally, we respect our competitors as well. In terms of the buyer, the behavior, I won't say it's anything unusual. In fact, it's not that we were taken by surprise. So we actually built up. If we were taken by surprise, we would not have been able to sell. So our homework that the teams did indicate that this kind of demand may come up. And that's how we planned our production. And that's how we've ensured that the sale happens. And we ended up with the inventory that we would love to, which is four weeks at the dealer end. So I would say it's all planned out. There's a lot of research that goes around. Yes, of course, sometimes people wait. But I won't say that any extra or disproportionate bunching in terms of this festive is that we have any other festive that we talk about. What is different in this festive, though, is the participation of rural, which has been more given the trend that was. So I think one should read into that as the positive aspect. But in the run-up to that, and the last few quarters, we know that there have been stresses on the bottom of the pyramid. That's something that is coming up, which gives positivity, as we said at the beginning of the call, that the rural participation is going up. Of course, as far as Vahan is concerned, we all know there is a lag and stuff that happens. Key indicators are which are the states, which are the geographies which have started participating versus earlier. I think that gives positive indications, Pramod, apart from, of course, the macro fundamentals, which should pay dividend, which I just talked about earlier in the call. Okay. No, sorry. I understand that, Ranjivjit. The reason why I said that, as for the math, we had like 43,000 odd retailers every day on the counter last year. But if I look at the entire December quarter data for Vahan, it's 1.7 million, just short of 1.7. Even if I add January, the average retailers after the festive dropped off really badly. So I'm just trying to understand that. But nonetheless, I think thanks for the input. And on the rural, if you can just provide color, because what we've seen is that a lot of dealer feedback is that you've seen traction for EVs gaining in the rural markets, semi-urban markets, let me put it that way. And even scooters and premium categories taken off in semi-urban markets. So how are you seeing the trend at your end? Because you've got the deepest network by far and a pretty solid portfolio in the form of Xtreme now in the 125cc and VIDA as well. So if you can just help us understand the changing buyer behavior on the semi-urban market particularly? Thank you. Thanks, Pramod. Absolutely. You're on your first one. Just to say that I would always think that better follows good rather than bad follows good. So that's been the philosophy that we work on, which is working out well. Portfolio, like what you've said rightly, we've got a very strong portfolio of brands. We do see semi-urban participation coming up. And like you pointed out, the Xtreme 125R has received great traction and huge demand. It's been a huge success in our 125cc segment, and which plays out both in urban and semi-urban as well. Let me just ask Ranjivjit to just talk about the Xtreme 125R in particular, how it's doing, and you see tractions from the various pockets of semi-urban like Pramod has. So the Xtreme 125, as you've also picked up, has received extremely good traction in the market. The ABS features, the sporty looks, and the whole proposition that is there. Firstly, of course, we gave it more to the urban markets. But as we saw the demand picking up and we increased the capacity to 40,000 a month, now it's also gone to the secondary networks. It's gone there. And in the festival, it's been one of those products which customers have been demanding and wanting to lay their hands on. So it's done extremely well. Our market share continues to grow in the 125cc segment. And in fact, going forward also, we're going to be touching new highs in October, et cetera, as we are seeing the traction and the uptake of Xtreme 125. Having said that, there's also Super Splendor that's done well and Glamour, which is also contributing well in their own regional markets. So Xtreme 125R has been now a pan-India phenomenon. Thank you. The next question is from the line of Vanshaj Modi from Swan Investments. Please go ahead. Hello, sir. May I have a look? Go ahead, please. Hello. Hello. Yeah. Go ahead. Yes. So my question is, sir, on the realization. This quarter, your realization was highest ever. And going forward, do we expect this to be sustained at this level, or do we see an improvement? So you're right. Our realization during this quarter, compared to quarter one, has improved by almost INR 2,700, right? That's two-wheelers actually contributing INR 1,400 out of which, and the balance coming from the parts business, right? So I think going forward, we also expect that our mix will continue to improve. Our spare parts business will continue to improve. And therefore, the realization per unit will continue to improve. Another question is on EBITDA per vehicle. This quarter, there was almost a 5% improvement compared to the previous quarter. Could you just throw some light on what was the reason for that, and how does it shape going forward? See, I talked about the EBITDA improvement during the quarter, right? And it's largely driven by mix improvements, lower material costs, and yield savings, right? So we had a significant improvement coming from there. And a part of it got invested behind brand building and new businesses. And going forward, as I talked about earlier, we've given a certain guidance on margins, which is range bound between 14%-16%. And we are confident that despite our investment strategy, we'll continue to maintain that range. Okay, sir. Thank you. That's all from my side. Thank you. The next question is from the line of Nitij Mangal from Jefferies. Please go ahead. Hi, good morning, and thanks for taking my question. Can you talk a little bit more about what you mean when you're saying you're planning to now aggressively invest more into brand building? What are the opportunities? What are the gaps that you're trying to do in terms of brand building? Yeah. What I mean there is that, look, over the last couple of years, we have expanded our portfolio. So that job, I would say, in terms of now we have five brands in the premium segment, which is very important for us to create traction around that. We talk about Xtreme, XPulse, Mavrick, Karizma, and HD X440. Of course, and we have also announced more variants to be coming up into that. So the portfolio keeps getting stronger and stronger. That's the part. The second thing that we are addressing is the place part of it, which is where the premium stores come into play. And you've seen and we have talked about how we are expanding that. Now, the third important element is the power brands, which is, of course, we have a portfolio. But obviously, creating power brands out of these brands that we have launched takes time. And that requires marketing investment, awareness creation. So it's more around the media, the communication that should increase the awareness. So there's always a cycle of these because you cannot be doing that up front the moment the models come out. So all of that, which is what we said, is that as we move forward, we've done the portfolio. It will keep getting stronger. We are well on the way to premium. And now is the time to actually ramp up the brand building and the brand awareness and the communication around these brands, which is what we meant by allocation and investing accordingly. Can you tell me spend in mind in terms of how big you want to take your spending? I wouldn't like to give a spend guidance, but like Vivek said earlier, we have huge scale. And therefore, last couple of years, we're heavy investing behind EV. EV costs will be coming down. The scale will be going up. The PLI benefits, so they talked about FY 2026, we'll keep getting accrued. So we have a way of generating resources to be able to deploy behind different growth priorities. And of course, we'll be mindful there in terms of the margin guidance. But we do believe that our scale allows us to invest aggressively behind premium beyond this. Okay. And my second question is that you do seem to have a lot of product launches in the next six months. You're talking about three new ICE scooters, three premium motorcycles. There was some plan for three to four EV models as well and expansion of the portfolio. Can you talk a little bit more about, let's say, especially when you're thinking of the ICE portfolio, what are you trying to do differently with these products? Are there gaps you have identified, especially that's on the scooter and the premium motorcycle side? Thank you. Yeah. So let me take that. For instance, let's take the premium first. I just talked about that brand. It's not that in the next six months we'll be launching a new brand in premium. What we're going to do is we want to come out with XPulse 210, which is liquid cooled. You talked about EICMA. We unveiled there, so you have the details there. Xtreme, as you said, power brand keeps getting bolstered. We have Xtreme 160. We then launched Xtreme 125R, which has done very well. We want to launch Xtreme 250R. You can see that the brand gets siblings and across the spectrum and creates that. That's what we are trying to do with that. Similarly, Karizma gets its wing again, which is XMR 250 on top of. So that's the strategy that within the same brands that we have talked about five, now you actually move them with a full portfolio within the brand itself. So that's the strategy there on to premium. So it's clearly in line with what we would have wanted to do and on the timeline. On the our scooter, obviously, the scooter needed a refresh in terms of our portfolio, which is where we've talked about Destini, full body change. And Xoom, again, it's you see in the same brand. So how do you create power brand out of Xoom? Because Xoom is 110. We want to put Xoom 125, Xoom 160. And again, that's the strategy there that the brand gets traction with three models within the brand family. So that's going to be in the ICE scooter, again, within the next six months, in fact, probably well before March, as we have talked about. And then we've talked about the EV, where we have talked earlier as well, where we always said that in EV, we started at the top end. And obviously, the market has moved a lot to a price segment, which is on a more affordable range. We have taken a bit of our time. We've been conscious about that in balancing. And now we will be expanding to cover the price range there. So there are the strategies to cover the price ranges, which is on the EV side. So you can clearly see the three different strategies playing out in terms of expansion of the portfolio and launching of these products. Thanks. And just one more follow-up on this. On the EV scooters, is there a revised timeline for launches? On the EV scooters, yeah. I mean, I don't think we've revised, but can you just comment on that? Yeah. We had mentioned that we'll be launching within this calendar year, and we are well geared for that. And we had also mentioned that we will bring expanding the portfolio beyond just the price point to new user segments, which is also lined up for next year. We are onto it. Okay. Thank you very much. Thank you. The next question is from the line of Joseph George from IIFL. Please go ahead. Hi. This is Joseph. Thank you. Just one question. When you look at the incentives situation this festive compared to last festive, have you seen a big swing? We have seen several new lows, one is discounting. But unlike last year, we have seen some of the OEMs come and cut list prices, which is quite unusual. So your comments there? Yeah. I think we covered it, Joseph, in the earlier part of the call as well, that it's not hugely disproportionate compared to any other festive when you compare the spend to the percentage of the revenue. Okay. Thank you. Yeah. I'll just open it up for a moment if there are any final comments before we leave. Yeah. Let me take that in terms of that. So all in all, I would say that, again, repeating once again, good things must be repeated so that they become repeatable and they become scalable in terms of what happens in the future. And therefore, the highest level top line, bottom line, cash, and product firing, again, is a testimony to our focus on all the key parameters of sustainable growth from a future point of view. We are also excited about all the launches that are upcoming, whether it's in the ICE scooter or the EV scooter portfolio. We are very much focused on cost leadership in EV segment, which we will see panning out over the next few quarters, which will, again, allow us in terms of even more investment behind that. We are also excited about our premium journey where we are expanding the premium stores and the portfolio. And as I talked about, that we will be investing aggressively behind brand awareness and communication to create power brands out of these brands. And of course, our global business has done a good recovery in the first half. Second half, we plan to ramp it up more leading into fiscal year 26. And then with impending recovery in some of the countries, that should augur well in terms of our revenue streams, which are going to get diversified and scaled up. And of course, our parts business continues to roar. They also registered their highest level quarter revenue. Our focus in the medium term beyond continuing to develop our parts business will be around scaling up accessories and merchandise beyond where it is today. Over to you, Nitij. That's what I had to say at the end. Thank you so much. I think thank you for coming in. I'm conscious it's a holiday for most of you. Thank you for sharing your time. Have a lovely day and talk to you soon. Thank you all. Thank you, Nitij Mangal. Thank you, Rahul, for hosting us. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.