Hello everyone. Good day and welcome to M&M Q1 FY 2022 earnings call. Let me start with a safe harbor statement. Certain statements on this conference call with regard to our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. Please note that this conference is being recorded. I would like to welcome the senior management of Mahindra & Mahindra Limited for this call. We have with us today Dr. Anish Shah, Managing Director and CEO; Mr. Rajesh Jejurikar, Executive Director, Auto and Farm Sectors; Mr. Manoj Bhat, Group CFO; and other senior management, including the IR team. We will have a presentation by our management team before opening the floor for Q&A. You are requested to use the raise hand feature if you want to ask questions during the Q&A session. You can also type the question in Q&A tool in your browser. Before handing over to Anish, I just wanted to bring to your notice that from this quarter, we have started reporting M&M plus MVML financials as M&M standalone financials, as all the formalities for the merger of M&M and MVML have been completed during the last quarter. With this, over to you, Anish. Thank you, Sriram, good morning, good afternoon, good evening, everyone. I know you're joining in from various parts of the world, so thank you for joining our call today. We're going to cover the four key messages that are listed here. One is significant headwinds in Q1, as we've seen across many companies. Despite that, we've seen a very strong performance in farm, good recovery in auto. Mahindra Finance has been hit hard, and we'll talk a little about what has caused that and what has Mahindra Finance said in terms of how it's getting back on track. Tech Mahindra's very positive momentum continues. All of that together has helped deliver very strong results for M&M. We continue to maintain a very stringent fiscal discipline, and we'll talk about some of the actions and outcomes on that front as well. Just a quick highlight on the headwinds that we saw. The impact of Wave 2 in many ways was very different from Wave 1, because it did penetrate into rural areas a lot more. The impact was much higher on our associates, on dealers and their families. That caused a significant disruption in operations, not only for ourselves, but for the entire ecosystem around us. We obviously saw commodity price increases, supply chain issues, as well as a semiconductor shortage, and higher freight costs. Despite all of these challenges, what we really felt good about as a team was that the farm business came out really strong, and when we see auto, we see a fair amount of strength there, obviously not as much. The farm business delivered its highest ever profit for the first quarter, at INR 1,081 crore, up 59% from first quarter last year, which had April as a washout, but a very strong May and June. Volume up 52%, and volumes in fact even up 7% quarter-over-quarter, after a strong fourth quarter of FY 2021. Market share is up 2.6 points to 14.8%. Commodity price increases were largely offset by cost management and by price increases. The one point that we were really focused on through all of last year was profitability of international subsidiaries. Today, very glad to report that every single international subsidiary of the farm sector was profitable in the first quarter of FY 2022. Good momentum, strong volume, and good momentum on cost and market share as well. As we look at auto, there were a lot more challenges in auto. Despite that, auto did manage to get INR 103 crore profits, up from a INR 584 crore loss. In contrast to farm, auto was much worse hit last year in the first quarter. In many ways, that's really not as much of a comparable number. The key aspects in auto are market share improvement for both UV and PV segments. Very strong product pipeline, as well as recent launches. Harish will talk a little more about the Thar and the XUV300, as well as the Bolero Neo and the excitement we have around the 700. Commodity prices, same comment as in farm. In auto, there has been a lot more supply chain issues. I would say the team has really managed them very well and come out much stronger than we would have expected at the start of the quarter. Mahindra Finance deserves a deep dive. Many of you may not have been at the Mahindra Finance analyst call, so this in some ways is a summary of what was covered there. Profit after tax dropped significantly to INR 1,529 crores. The key drivers were GNPA, up from 9% to 15.5%, which resulted in P&L provisions going up from INR 735, which is a little more for a normal quarter, probably a little higher than a normal quarter because that was again, a tough quarter last year, to INR 2,570 crores. The INR 2,570 has two aspects to it. One is an ECL provision increase of INR 2,124 crores that is essentially driven by forward flows of loans into stage 2, which is greater than 60 days, and stage 3, which is greater than 90 days. The second aspect of the provision was a INR 393 crore overlay provision. This is done from a prudency standpoint just to make sure that the business is staying extremely safe. We had put in some overlay provisions last year as well because of some uncertainties that we've seen over the last 18 months. With the addition of INR 393, the total overlay provision is INR 2,709 crores. The way to think about the overlay provision is this is over and above what our models would estimate from a loss standpoint. This factors the uncertainty in the environment, and once the uncertainty in the environment goes away, then this may not be required at that point in time. From a capital adequacy standpoint, despite all the provisioning, the business continues to be extremely strong at close to 24% from a capital adequacy standpoint. I will also add that the provisions are 54% of stage 3, which is industry-leading. From a safety standpoint, we make sure the business is very safe. Let's go to the right-hand side and talk a little about what happened, why did it happen, and what else from here. We talked about the ECL provisions being driven by stage 2 and stage 3. Let's start with stage 3, which is greater than 90 days. What drives the GNPA? Stage 3 contracts at the end of June were 294,000. They had gone up by 180,000 between March and June. Of this 294, 78,000 contracts were partially paid back in July. 92,000 contracts have an outstanding loan amount, which is less than 50% of the loan value, which essentially means that the value of the asset, because these are all asset-backed loans, the value of the asset is much higher than the value of the loan. Historically, what we've seen is when this happens, there is no loss on it, because usually customers will repay back because they don't want to lose the assets. In the event they just cannot repay, then the asset is repossessed and sold, and typically, there's enough value in the asset to cover any losses. A combination of 78 and 92 is 170,000, which essentially is close to 90-95% of the 180,000 increase. Similarly, in stage 2, this had gone up to 402,000, an increase of 316,000. Of the 316,000, right now we feel that 334,000 are solvable. Some of them possibly may stay in stage 2 and continue making some payments. Even on a conservative basis, if you assume that 250 are solvable, the Mahindra Finance team feels fairly confident right now that they could reverse 80%-90% of the additional ECL provision of the INR 2,124 crore that I talked about that was taken last quarter. This will be done by the time we get to the third or fourth quarter. What also gives us a little more comfort is that over the cycles, we've always seen Mahindra Finance portfolio higher GNPAs. The credit losses have always stayed within a tight range. A similar trend, as an example, during demonetization was a peak GNPA of 14.5%, and three quarters after that, it was 9%, and further three quarters later, it was 6%. The Mahindra Finance team essentially sees this as higher provisions due to COVID-related liquidity impact, with a number of earn and pay customers in various segments, a clear path to reversal, and a business which is well-capitalized and has prudent provisions. If you look at Tech Mahindra, which for this quarter at least is at the other end of the spectrum, just an outstanding performance. Up 39% versus Q1 last year, which also was a very strong quarter for Tech Mahindra. In fact, up quite significantly over last quarter as well to INR 1,353 crore of profit after tax. A lot of traction in various sectors, healthcare, BPS, communications, high-tech manufacturing. The pipeline is very strong. The total contract value is double the historical run rate at $815 million, driven really by cloud data, customer experience, AI. Margins are improving. Everything is going great guns at this point for Tech Mahindra, and we do see the momentum continuing there. We also want to focus on our growth gems and talk about three of them, the listed entities. We've talked about each of them reaching a billion-dollar market cap, while Logistics seems to be headed there faster than we had expected, because Logistics has gone up to $720 million in terms of market cap, up 2.7 times or 173%. Hospitality has close to doubled. Real estate is almost four times at 273% compared to a Sensex of 54% growth during the same time period. Logistics is really driven by core execution. Hospitality, because of a business model that was, in a sense, protected through COVID, and growth that is being driven through various initiatives right now. And Real estate was a combination of core execution and growth. We are seeing each of these three businesses really start to function well, and they should be great value additions for our investors as we go forward. Summarizing all of this in terms of standalone operating PAT and PAT after exceptional items. Operating PAT is at ₹934 crores, up many multiples compared to our quarter last year, which in many ways is really not that comparable. Similarly, PAT after EI is ₹856 crores and up significantly. Despite the headwinds, our teams have given a very robust operating performance. As you look at the consolidated numbers on the next page, as reported, ₹473 crore profit on the consolidated side. If you look at last year, we had a negative INR 20 from a continued operations perspective, but if we include SsangYong, it was really negative INR 582. That essentially is a ₹1,000 crore swing, despite the significant loss of Mahindra Finance. If we exclude Mahindra Finance, then we are looking at nearly a ₹2,000 crore positive swing on the profit side, as we would have been at ₹1,300 crore, whereas the SsangYong impact would have taken it down much further. This is really capital allocation showing results, plus a strong operational performance that helps us overcome the impact we think from Mahindra Finance this quarter. Rajesh will take you through more details on auto and farm. Manoj will then cover the financials, and I'll come back and talk about where we go from here. Rajesh, over to you. Good morning, good afternoon, good evening. I guess it's not good afternoon for anyone, morning only. Nice to be with you, and Anish, thanks for the first part of the presentation. I'm going to start with a recap of a slide that I had used the last time, we had broken up this year into two phases. The gear up phase, which we thought will be quarter one, which is about managing cash, costs, inventory and enhanced wellbeing, then our readiness to fly and some key strategic levers on the auto side and the farm side, which we've spoken about. Happy to share with you that one very important part of the enhanced wellbeing and people engagement has been that our automotive and farm sectors were ranked number two in India's Best Companies to Work For. We're particularly happy about this because it has happened in a year which was a year of high stress, and we truly believe that our teams really came well together to see us through what has been a difficult phase through the COVID period. The gear up phase has had, like I said earlier, three key areas. We believe we have managed the margins very well in a challenging environment in Q1. Debtors have been under control. We built stocks through Q1 to prepare ourselves for the festival season. A lot of focus has gone into enhanced wellbeing, vaccination drives, family assistance policy, the M-Protect for customers, mainly on the tractor side, but also in Mahindra Auto. COVID-19 package for 80,000-plus dealer employees. All of this has, of course, created positive goodwill, but also we believe that really is a critical and core part of our values. Some highlights. We saw a big increase in the market share of tractors. You know that through last year, we were losing share due to supplies, and we're happy that we've gained back and come back to a level of 41.8, which is the highest in the last eight quarters. Anish already spoke about the global subs performance on the FES businesses. The Hisarlar restructuring, which we believe is a part of capital allocation. We've moved out of the non-ferrous metal fab business and restructured the ag machinery business into our own tractors. On the auto side, we have the XUV700 launch, which is on the anvil. We're very excited about it. The Bolero Neo and the Supro Profit Truck launches are off to a very good start. Our brands are in momentum. We'll talk a little around that. Auto subs are on track in line with our expectations. Quick look at the automotive business. The revenue was at a level of around ₹6,000 crores. This is automotive standalone. Last year, quarter one was depressed. Quarter one of this year has seen a relatively good performance in the context of the large number of lockdowns we had through quarter one. We did make a profit of INR 100 odd crores in quarter one. Last year, of course, quarter one was a big loss. You can see that the volumes are lower in quarter one, which was expected with the various lockdowns including in the dealerships. That, of course, has impacted the bottom line. We think we managed a difficult environment well. We've used this time to build up our inventory. It's still not back up to the levels of the previous years, but we believe now we have a much healthier stock compared to the last three quarters. All our brands are in momentum. We have open booking of 39,000 for the Thar, which is a waiting period of 10 months. Open bookings of 10,000-plus on 300, and we did 6,000 billing to the highest ever on XUV300 in July. Product are doing extremely well. 4,000-plus open bookings on Bolero and 6,000-plus open bookings on Scorpio. A very strong demand momentum on pickups as well. The Bolero Neo has got very well received. It's opened up new segments, acceptance in newer markets, and that's what we were hoping for. We were hoping for a launch which would create new markets and segments for us with a minimal cannibalization of Bolero. We priced it well. The looks, which is the design, have been appreciated, liked, and it has created its own traction, and we are hoping that this will move on to be yet another new successful launch from our stable. The Supro Profit Truck also got launched in July and has seen a good traction since launch. It is a good product, and we are sure will create a very strong level of competitiveness for us. The XUV700 launch is around the corner. We would reveal it this quarter, and we hope to start deliveries in the quarter three of the year. We are not going to be delaying the launch because the semiconductor crisis. We believe we will be able to see it through with the planning that we've done so far. The response on the 700 has been immense, with 97 million views on the videos that we put out and a huge amount of social media engagement and a lot of excitement that has got created out of what we've called the snackable videos, short videos talking about some critical tech features, which are going to be segment leading. Next, on equipment side, we're seeing a revenue of INR 5,300 crore in quarter one, a strong growth on last year. Last year, quarter one on FES side was not so depressed, so it's a strong growth, and a strong growth in PBIT as well in quarter one. You can see from this chart that quarter one volumes on the tractor side was not as impacted. It's almost equal to the quarter three season volumes. The tractor momentum quarter one has continued. You can also see that we've been able to build back stock at the end of quarter one, which is now at a reasonable level. This said, to recap, is our stock with us plus dealers. We've delivered again a very strong margin performance in spite of the inflation on commodities, a margin of 20.3% and an increase in market share I mentioned earlier. These are the four key levers that we had spoken about, strengthening our core domestic business and what is happening around that to drive our market shares up through the year. We focus on scaling up our farm initiatives. We see that as a big opportunity. Grow the category and gain share, focus on technologies, new programs, K2 program, leveraging our global centers of excellence and building on precision ag. Global growth, as we now see consolidation of our global subsidiaries, we really think there's an opportunity to leverage that for growth and profits. This chart represents how we've done in our key markets where we have on-ground presence. As you can see, all of these are profitable. Anish mentioned that as well. We are seeing very good momentum in North America. We delivered a positive PBT in MAgNA. Turkey is seeing a very strong momentum. Again, Turkey was a profitable business operation as well as Brazil. Next. This chart brings alive the turnaround in the FES subs. You can see that from losing substantial amount of money in FY 2019 and FY 2020, over the last four quarters, we moved to breakeven and now a positive in quarter one of FY 2021. We believe we are on the path for a bold and aggressive growth strategy. There will be some constraints, especially on the auto side that would come around the semiconductor issue, we believe that we will be able to address those and, saying that too, that this is something that is going to be dynamic and we will have to learn to live with it for at least a couple of quarters, we believe, and we are gearing up towards that. With that, I'll hand over to Manoj. Thank you. Thank you, Rajesh. Good evening to everyone. I think I'm going to quickly cover the financials before we throw it open for questions. Rajesh talked about the revenue. I think the revenue is almost more than doubled. On the EBITDA side, I think if you look at the numbers, we have seen a 3X improvement in EBITDA compared to Q1. I think this has been driven by an increase in volumes, we'll talk about it some more. Then finally, operating PAT has gone up 23X from the Q1 levels of last year. The other significant feature here is EI has come down. I think last year we had a lot of capital allocation actions, this part of the year has come down to INR 78 crores. The PAT after EI is about INR 856 crores for the quarter. Coming to the year-on-year performance, I think if you look at domestic farm, Q1 FY21, while it was muted, was still profitable. That performance has since then improved to INR 844 crores. We are seeing a positive contribution of INR 288 crores from the farm business. Auto, which was in a loss position in Q1 because of the shutdowns. I think despite the lockdown situation in Q1 this year, it has managed to get to profitability through a combination of cost-saving and other measures. Auto is a big contributor when we look at the year-on-year bridge on margins. The other two amounts are about international subsidiaries and group companies. There are some small adjustments here or there, so it's not significant. Moving to the consolidated numbers, it's a growth of about 60% the same quarter last year. I've already talked about Auto and Farm, and Rajesh and Anish have also covered it. From a group company's perspective, I think there's been growth across the board, when compared to Q1. I think their performance, while many of them were impacted in April and May, I think we are seeing a rebound coming in June and July, and that is a trend we are hoping will continue. I think the operating PAT side, if I look at Q1, I think the number after for continuing operations, before EI and after NCI, is about INR 20 crores negative in Q1, which has moved to INR 473 crores. Now, within that INR 473 crores, there's an impact of INR 826 crores for financial services, because of the provisioning we took there. The other element which Anish Shah also touched upon is that since we don't have SYMC now in any of these numbers, in Q1, we had an impact of INR 562 after EI and after NCI and tax impact of SYMC, which is no longer there in the numbers. That's a benefit we have from because of the SYMC actions we took. EI is a smaller number this time. I think the INR 49 crores, which you see in the current quarter, is a part of the Hisar deal, which we did, where we sold a part of our business to another party. As part of that, there was some EI we booked during the course of the quarter. Moving to the next slide, please. I think in terms of Q1 to Q1, across the board, we have seen a substantial increase in profitability and profits. The one thing I want to highlight here is the international subsidiaries. In Q1 FY21, they were in a loss position of about INR 248 crores, which has now become a break-even overall. I think we have made substantial progress on both cost optimization and also kind of repositioning the business for the right kind of product set and the right kind of market approach. I think those are paying dividends, and that's something which we are hoping will continue. On the group companies, as I mentioned, there is improved performance across the board. The major ones here is TechM, which has been a strong performer Q1 to Q1. Finally, Mahindra Finance, I think if you look at it, Anish covered it, that this is a provisioning which we have taken based on the current situation, and that's something we will hope to recover. We'll cover more as we go along. I think, Anish, back to you. Thank you, Manoj. Going back to our key focus areas, as we've talked about earlier, we are looking at taking a leadership role in ESG globally and have outlined a roadmap for it. We'll talk a little about that today. Maintaining financial discipline, accelerating core growth with leadership in Auto and Farm. A turnaround in Mahindra Finance that goes beyond taking care of the short-term issues. A new trajectory at TechM, with strong momentum there. Scaling growth gems and seeding digital platforms. Beyond that, enhancing customer experience. Let's talk about a few of these today. First is 10 commitments that we are making for ESG. You've seen some of these before, but now we have targets around these, and the teams are geared up to deliver them. Starting with maintaining a gold standard in governance, being water positive across the group, carbon pricing, RE100, EP100, planting five million trees a year, educating one million girls a year, supporting one million women a year to get jobs from a woman empowerment standpoint, zero waste to landfill, and carbon neutrality by 2040, with science-based targets along the way. A significant set of commitments that we're making to really be able to make this real, to really live our purpose. I do want to come back to this slide, because you've seen various versions of this over the last year. The promise we had made was, by March 31, we would categorize all the companies into A, B, C, which we did. We had promised that we would take actions on the C companies, which we did as well. What we had also promised was milestones for everyone in A and B and continuing to maintain the discipline for companies that don't make the cut that may come into the C category. What we show here first is a report card in a sense. Under category A, PMTC has had some COVID impact, in terms of various challenges of supply chain, but it has still performed quite well based on the challenges. Fundamentals are strong. On the Farm side, as we look at the Farm subsidiaries in category A, we've seen a very significant turnaround from INR 103 crore loss to a INR 37 crore profit. Similarly, in category B, APF has launched or will be launching the Battista soon. Even in this category, the Farm subsidiaries have shown a very strong performance. From an INR 17 crore loss last year to an INR 22 crore profit in the fourth quarter of FY 2021 and an INR 31 crore profit in the last quarter that we are reporting right now. Beyond that, we have put 2 businesses in Category C, and we have taken action, and they have been sold already. One is the metal fabrication unit of Hisarlar, which was one of our Turkish entities. Second is the dairy business that we had as part of our agribusiness. We will continue maintaining this fiscal discipline, continue monitoring Categories A and B closely. Where they don't make the cut, they would fall into Category C. For leadership in auto, there is a series of actions that have been laid out, with 23 new products by 2026. 9 of them are in the core SUV segment. This is obviously in addition to what we launched already, the Thar, the XUV300. You see great traction on things that we have launched. The Bolero Neo is taking off quite well, and we're very optimistic around all of the excitement that has been created for the XUV700. Stay tuned for that. On the EV side, it's not only about four wheelers. On the three wheelers, we sold 30,000+ three wheelers, with a 50% market share in its category. Collectively, we have over 300 million kilometers for EVs. A lot of experience there has gone into our battery management systems. The Battista, as I talked about it earlier, is launching soon, an EV hypercar, arguably one of the best EV cars in the world. That's really starting to position us to maintain the EV leadership that we've had in the past and continue that for four-wheelers going forward as well. On the LCV side, as you're aware, we've always had a very strong market share leadership in the pickup segment for two to 3.5 tons. The Supro Profit Truck launch in the 0 to 2-ton segment also is doing extremely well and giving some of the others there a run for their money. Compact pickup is coming up soon. A number of activities outlined for us to maintain or rather, in some cases, regain leadership in auto. Let's talk a little about the turnaround for Mahindra Finance. While we feel that some of the issues for the past quarter are short-term, as explained earlier, we do have to ensure execution, as the team has done before. They are confident they can do it again. Put a sharp focus on collections and really move towards reversing 80%-90% of the 2024 ECL provision that was made last quarter. Beyond that, as we take a step back, let's look at the strengths of the model and what we need to augment. Mahindra Finance, in many ways, is a very unique model. It has a wide distribution in rural and semi-urban areas with a strong local connect and trust. 1,400 branches, local talent pool, and a brand that really epitomizes trust for all our consumers. It is a leader today in rural asset-based lending, but it has gone beyond rural as well. Rural today is 42% of its asset base, semi-urban is 35%, 23% is urban. The business has shown a strong expertise in financing cyclical products over decades and has managed stress periods well, despite having volatility in GNPAs where they go up to 14%, 15%, and they come down after that. It has diversified into non-captive with multiple products, strong OEM relationships, and as I mentioned earlier, very well capitalized, managed from a very prudent standpoint with an industry-leading provision of 53.7% covered, and a CRAR of close to 24%. That said, we do need to augment certain things here. We are looking at how do we reduce some of the volatility in GNPAs. Should we rationalize a few micro segments and customer types, enhance early warning signals with data and a link to collections? Leverage data and digital a lot more than we've done so far. Sharpen origination and credit underwriting. We've got a lot of proprietary data sets for Bharat, for rural India. 7.5 million customers, how can we unlock value in that? How do we drive growth with cross-sell? This is one area where we have been much worse than our peer group. There's a huge opportunity for cross-sell and to carefully target attractive product and market segments. Strengthen organization with specialized talent in AI, in digital and data sciences. We already have built a good team there, but we're looking at expanding that significantly, empowering our field agents. As you see across this, it's really looking at data and AI to drive a lot of actions, a lot of decisions, and be at the center of what Mahindra Finance does going forward. Finally, I do want to leave everyone with a view to our path to 18% ROE. We are not going to put numbers because we don't want to, in a sense, give forward guidance. Directionally, you have seen a few businesses being negative in ROE in FY 2020. In FY 2021, that has largely improved, but COVID hit businesses, auto, hospitality, and real estate stayed negative. What we are seeing all of them do is to track to positive territory this year. By FY 2026, we see a good position for all our businesses to be able to get us to 18% ROE with the growth rates that we're looking for. With that, Sriram, I'll hand it back to you and open it up for questions. Thank you, Anish, Rajesh, and Manoj. A reminder to all the participants, please, you can use the Raise Hand tool to ask questions. We have the first question from the line of Gunjan Prithyani of Bank of America. Gunjan, you can go ahead. Hi, everyone. Thanks for taking my questions. I have two questions. Firstly, on the listed. Now, clearly, it is good to see you cover the MMFS in detail in this quarter. You also captured the MTM gains there. When you put out this 18% ROE target, the listed subs have clearly been a drag. How should we think about the strategy on some of these listed subs? Is M&M engaging in some of the strategy execution with these listed subs so that we can get to that 18% roadmap? If you can talk about the strategy around that. Gunjan, as I shared, some of the progress done in the three listed entities, logistics, life spaces, and real estate, I think what will become apparent as the execution continues is we're going to start seeing much better returns there. That's really what's contributing to the overall portfolio. What I have also shared in the past is every entity will not be at 18%. Some we will be happy at 15% if they've got a very strong growth rate. What I would expect in real estate, for example, is a much stronger growth rate, but a 15% ROE. We're on track to getting that done. Each business has a roadmap to ROE that is being tracked closely, and each business knows that in order to get capital from the group, they have to be able to maintain that and exceed that. Anish, just a follow-up. How do we really monitor the performance? I mean, is there engagement from M&M to improve the performance? This is something which has not been seen in the past. Clearly, a lot of work has been done on SsangYong and some of these farm stuffs and all, but these are things which have been dragged for a while, barring Tech Mahindra. Are we extensively involved on this piece now in terms of turning around the businesses? Yes. The M&M representatives on the boards of these companies have been very vocal and very active in outlining the expectations from a returns perspective that all the investors of that entity have, not just M&M. Each of the entities has a path that has been outlined with specific milestones for every year in terms of how are they going to get to those return metrics. The answer to that is yes, there is a significant change in terms of the discussions at the boardrooms of those entities. Thank you. Can I just take the second question? Yeah, go ahead, Gunjan. Go ahead. The second question on auto business, if you can give us some color on how we should think about the margin, incrementally given all the commodity headwinds. If you can talk about the price increases taken and the trajectory going forward. Gunjan, clearly there has been an unprecedented level of inflation of commodity prices across the last 15-18 months. It's something we haven't seen before. We've taken a series of price increases, both on the auto side and the tractor side, to cover up as much as possible. There are two effects you see. One is if there's any lag effect or any uncovered material cost that's not passed on. The second effect you will see is we certainly haven't passed on the margin on the material cost, which deflates the overall percentage margin when you assume it in percentage margin terms. You see some effect on margins coming out of that, because with such a high commodity inflation, it's not possible to add the margin on the commodity price increase itself. We have, like I said, taken price increases, also seriously looked at all options on management of cost, which is why when you look at the impact at a PBIT percentage level, it is not as significant. We are focusing right now on managing our PBIT percentages, our OPMs, it is not completely possible to manage the variable margins right after variable expenses and material cost because of the huge increases in commodity prices that have happened. We have been leading the path in both auto and tractors, going ahead of competition and taking the price increases. We do hope that the commodity increase curve will flatten off starting quarter three. Rajesh, can you quantify the price increases taken in Q1 and how much it is under us? Yeah. I mean. If you can just- Sorry, Gunjan. If you can just quantify the price increases and the under recovery, it will just help us keep the operating leverage aspect for the under recovery. It will just help us map out the margins. Yeah. Well, there's very little under recovery fundamentally by way on the tractor side, we passed on everything, and we've taken three price increases this year in January, April, and July. The latest one that we have taken in July was approximately of the order of magnitude of INR 18,000. Of course, it varies depending on model to model. On the auto side as well, I think we've taken three price increases this year. We can give you the specific numbers separately, if you like, Gunjan. Sriram can connect with you and share that. Sure. Yeah. Thank you so much. Thank you, Gunjan. The next question is from Kapil Singh of Nomura. Kapil, you can go ahead. Yeah. Hi, my question is for Rajesh. I wanted to know in terms of the demand environment, both for UVs and tractors, where are we in terms of booking inflow? Related to that, if you could also talk about chip shortages, because in July, we have seen probably one of the highest volume numbers for UVs in the last two years. Maybe even that doesn't represent the underlying demand. On chip shortages, what are the actions you have taken? Some of the OEMs have talked about the fact that it has gotten worse for them than expected. From your perspective, are things getting better or we don't know at this point of time? That is the first question I wanted to ask. Okay. Thanks, Kapil. On the demand side, on auto, as I covered in my presentation, we see strong demand for our brands. Overall, I would say reasonable level of buoyancy even for the auto industry overall. In particular, our brands are in very good demand. Rightly pointed out, we did have a very good month of July. On the tractor side, the demand did start picking up from June. There is a regional skew. The southern markets have done better than markets like UP and the eastern markets. That's also because the rain dispersion was better in the south and west markets and has moved towards UP and eastern markets later in July. There has been some dampening of the sentiment that happened, though that the rainfall has caught up there as well. The tractor demand did get very strong through June and July. The reason we still maintain a conservative outlook for this year is because, as you know, last year was on a very, very high base. Last year base started building up from July, August onwards. To compare the first three months of last year, growth over first three months of last year, we don't think is representative or the right representative way to look at the full year. Because the, so to say, non-supply that happened in Q1 due to large COVID shutdowns, manufacturing and sales last year, did get compensated through July, August, September on the tractor side. We don't think that's the right way to compare, and that's the reason we still stay with low to mid-single-digit kind of forecast on the tractor side for demand. Of course, we all know in the tractor industry, these things change and there could be an upside, but right now we won't count on that. On the chip shortage, yes, there is a tightening of chip availability. It's something that we need to work around. A lot of that is happening because Malaysia, which is a key source of semiconductors, has got into COVID lockdowns in August of later part of July and in August at the moment. That's the reason there is a tightening of that. We'll really have to wait and watch, but we believe that we should be able to navigate that through, and are hence going ahead with our launch plans for XUV700. Clearly there is a tightening, as you rightly said, Kapil, and that's coming out of the situation in Malaysia. Okay. Thanks. Secondly, on capital. Yeah. Can I go ahead? Yeah, go ahead, Kapil. Yes. Yeah. Just on capital allocation, if you could explain slide 41, what does the green pluses and stars and two plus and three plus, what do they mean? The last quarter, we had talked about investment of INR 35 billion. How much CapEx and investment we have done in first quarter? Whether those investments are firmed up or they're dependent on some of the events which may take place. Kapil, we debated a lot around whether we should show the ROE slide or not because the one thing that we do want to stay with is not give forward guidance. Which is where we finally went with a terminology around pluses and stars. The star essentially means that it is well out of the ballpark. It is just so strong that we can't even compare it with any other business. That's what the star means. That's something that you and your colleagues are all aware of from a tractor business standpoint. The pluses essentially show a range, okay? All I would say there is a single plus is not acceptable for us. Two and three pluses are better. I would stay at that right now because if I start giving numbers, it will start really becoming forward guidance for many of those businesses. Some of them are public entities as well. At this point, the basic message there is we have a clear track for ROE for every entity, and that track meets what we are looking at from an overall portfolio perspective. Second, with regard to your question on the INR 3,500 crores. At this point in time, it is not gone down. This was given more as it could be that much over the next three years, just in the spirit of being completely transparent, saying, if we do need that to create more growth, to have a growth chance, get to a billion-dollar market cap, that is the max we would do. It is very likely that we may use only half of that or maybe even less. At this point, we have visibility for 10% of that. 90%, we don't have visibility. We will maintain a very strong lens with regard to is it giving us the returns we want or not. If it is not going to give us returns, we won't use it. In many cases, for our growth gems as well as our digital platforms, we will seek outside capital also. Where we feel outside capital will help grow that business faster, that will reduce the need for us to put in more capital. In the first quarter, I would say that we put in a small amount. At this point, I don't want to deviate from our practice of not disclosing that quarter by quarter, but that's something we can possibly do as we go forward. It's a very small amount at this point in time. As I said before, most of the INR 3,500 crore is not something that we are looking specifically at here is where we need to put it. Only if we do need to put it to create value, we will. Thank you, Anish. Thanks a lot. Okay. Thanks, Kapil. The next question is from Hitesh Goel of Kotak. Hitesh, you can go ahead. Thank you. Just to follow up on the tractor piece, Rajesh. Like you said, it's too early to give a direction on the growth outlook for this year, but we have not seen this kind of three years of monsoon being good. The reservoir levels are at 10-year high levels, as you compare with the 10-year average levels. There was issue in sowing, but sowing has also picked up. I fail to understand why the industry should grow at only single digit this year. I mean, already first four months, you have seen a 40% growth. Are we indicating a decline in the rest of eight months? What are the things you're seeing on the ground because to really make that call, or you think it's more of conservative guidance in the overall outlook should improve because second quarter should also be a growth quarter. Hitesh, right? That's right. Hitesh. Yeah, Hitesh. Hitesh, like I said, quarter one growth is not representative because last year quarter one was, it was better than auto, it was depressed. Most of the markets were shut from 27 March or 23 March, actually, all the way through May. Everything, including dealerships, factories were all shut. I don't think it's right to judge this year based on the quarter one growth. Like I said earlier, July, August onwards, we started seeing phenomenal growth. Let's keep in mind that last year saw 25% plus growth for the industry in spite of one and a half months being washed out. That is unprecedented as well. That's the reason we believe we are on a high base. As you all know, the tractors sell in two seasons of the year. If we see a very good festival season, which hopefully we will, obviously the year will end up better than what you're saying. We think it's a little early to reach that conclusion that on such a high base year, we will see anything more than single digit. Sure. Just a follow-up question on the tractor implement space. Can you give us the market size of the tractor implements, say, in FY 2021, and what do you expect in FY 2022? What is Mahindra's revenues as a group in tractor implements? If you can give that number. Only domestic we talk of. Yeah, domestic. It's not always easy to get these numbers because many are not published, but our guess is that the farm machines, not only tractor implements, so I'm including harvesters among the self-propelled products, would be in the region of about INR 5,000 crore. We are at about 10% share. Okay, great. That's in the region of about INR 500 crores. Great. I will also add that today it's an industry that's highly unorganized, and we see huge potential in that. If you look at that industry as a percent of the tractor industry in India, it's a small fraction. We've talked earlier about globally, that is 2x the value of tractors sold. We see huge potential in India, and we are looking at a significant growth in farm machinery over the next few years. Great. Thanks, Anish. Yeah. Hitesh, just to clarify, the INR 5,000 crores is organized. Sorry, INR 5,000 crores is? 5,000 crores is organized. Organized. There is a huge unorganized on top of that. Who would be the bigger players then? Sorry to just follow up then, because you are only 10% in organized. That's the thing. There are many players even within the organized sector. There is no one player who is a very large quantum of it. You have multiple sets of people, the Shaktiman and so on and so forth. They are all in the region, so they're not very far off, but there's no one player who is dominating this. Okay, great. Thanks. Wherein lies the opportunity as well. Thanks, Hitesh. The next question is from Binay Singh of Morgan Stanley. Hi, team. Thanks for the opportunity. The first question is on the auto sector gross margin. Like Rajesh pointed out, there is some pick up under recovery on the auto side. Could you quantify that? Linked to that, given your order book and given the new launch, it seems that in the coming quarter, your share of new models on the auto side will rise. Will that have an adverse impact on gross margin because new models are typically launched at introductory pricing, or you think you'll be able to offset that? That's the first question. Secondly, on electric three-wheelers. In the two-wheeler space, we are already seeing an inflection, but not so in the three-wheeler space. What do you think is missing over there? Thanks. Binay, it's going to be hard for me to answer the question because it will lead to giving a guidance. I'm not going to be able to give you a specific response on auto three margins. We haven't been able to fully recover our material cost on the auto side because the increases have been significant, and we also want to right now not go too much ahead of what others are doing because we do also want to get our volume movement come back, and we believe that's very crucial for setting up our future. We have been taking very good price increases. We'll share those details with you right away. In the 2nd quarter, again, there is a cost of commodity increase, so it's not stopping yet. We hope it will in quarter three. You are right about the fact that new products are on lower margins, we do still have a very strong momentum on our current products. Pickups is very strong, Bolero is very strong, Scorpio is very strong. We are not expecting that at the moment new products is going to be overwhelming majority of it. Okay. Thanks for that. On the electric three-wheeler side- Oh, sorry. On the electric three-wheelers, there are two parts to it. One is the passenger and one is the load. Load has a good demand. It does need a lot of local level approvals and so on, which takes some time to get into momentum, I think that is not the case in the case of two-wheelers, which is personal use and buying. The second part of electric, which is the passenger three-wheeler overall, electric and ICE has been severely impacted through last year by COVID. That is not yet seeing a recovery in the passenger three-wheeler segment. That's one of the reasons why even the electric three-wheeler is not as buoyant. We do, as we mentioned earlier, see the last mile mobility segment at a very good inflection point and will see momentum build up very strongly in the electric three-wheeler space. It's not the same as the personal buying decision. It does need fleet operators or individuals to come out, replace their current product, buy a new one, figure money out. It is very different than what's happening in the personal use two-wheelers, where there is a high bias towards owning personal mobility solutions at the moment. Okay. Thanks for that. Thank you, Binay. The next question is from Jinesh Gandhi of Motilal Oswal. Jinesh. Hi. My first question pertains to, can you give an update on SsangYong divestment, where we are and how long do you expect that to play out? Second question pertains to the inventory. Given the chip shortage issues, we have been building up inventory on the auto side. Given the outlook or uncertainty of outlook in tractors, why have we been looking to build up inventory? Those are my two questions. Thanks. I'll take the first one on SsangYong, then Rajesh will take the second one. The court process is underway. Going along the lines that we had expected, with one thing that we had not expected is there are a lot more buyers for the business than we had anticipated. That's a positive in some ways for us, but we will have to wait for that court process to play out, and that will then give us a sense of how much we can recover from it. Currently, we have provisioned everything that we think is prudent and adequate. At this point in time, we feel fairly comfortable around there. It will take the next few months for the court process to get over and get an answer to it. Yeah, Jinesh, on your specific question around why are we building tractor inventory. We're not building tractor inventory which is out of whack with what we normally do leading into the season. We have to realize that when we are talking about the current season, in an absolute context, it's going to be a very big number. Point is, so was last year's season. That's the reason we are not very sure about the quantum of growth this year, because last year saw a huge increase, which like I said, was also build up of the start of the year, which is quarter one of last year, not being operated. There was a pent-up which moved in. As you know, we lost a lot of market share last year, and the reason we lost market share was, as we kept reiterating, that we didn't have enough supply. What we are doing is building up our supplies, and we are sure that that's the right level of stock build-up needed for a season, given that we severely under-supplied last year through season. It's not out of line with our previous stock build-ups. In fact, it's still little lower than what we've done in the past. On the auto side, there's always a bit of a challenge at the moment because there is a balancing act on what is going to be short and what is not, and there will be some mismatched inventories that are there. We believe that's a risk worth taking. Have item A today and then you don't have item B, and you don't procure A because B is not there, and then the situation reverses two months later or one month later. We do believe that we have to build some inventories in for our pipeline. As you can see out of the chart that I have shown, it is still lower than what we've done in the past. We still are not at a level where we believe we want to be and not at a level in line with the demand for our products. Sure. We are doing it very prudently, but we do have to take some considered risks. Sure. Just a follow-up on tractors. Our cautious stance is just because there is a high base and not anything which we are seeing at the ground, which should make you worry right now. Is that the right understanding? That is correct. There is nothing on the ground that is worrying us at the moment. The only thing I would personally watch for is any effect that the recent price increases may have on demand. That's something to watch for. We haven't seen any of that through July. That's the only thing to really watch for. There is nothing on the ground right now which makes us feel that there is a slowdown. Got it. Thanks a lot. Thanks, Jinesh. The next question is from Hitesh Bhargava of BNK Securities. Hello. Can you hear me? Yes, Hitesh. Yeah. Sir, one book-keeping question. There is increase in employee expense. Is there any one-off, and what is the run rate going forward? Let me pick that up. I think if you look at the employee expense during this quarter, we had a scheme for all our affected employees during COVID, and I think we came out with a scheme where if there is any death of our employee due to COVID reasons, we gave a two-year salary as an ex gratia payment. We gave a monthly salary for up to five years, is what we have committed to them. In addition to that, we said that the children education up to grade 12 will be covered. I think it's part of a larger package which we have came up with, which is for all employees and also some dealers. In the employee expense piece, there is about INR 43 odd crores of expense which is there. I wouldn't call it a one-off because I think our salary hikes are coming in effective August. I think on a steady state, I think while that might go out, we might have the impact from the salary hikes. From a steady state perspective, this might be a good number to go with in terms of employee cost. Thank you. My next question is regarding the tractor inventory. How is our tractor inventory compared with the industry levels in tractor segment? Hitesh, we are well within our norms and very competitive, and that is normal in the region of four to month. Thank you. That's it. Thank you. The next question is from Aditya Makharia, HDFC Securities. Aditya? Yeah, hi. Am I audible now? Yes. You are audible. Aditya, you can go Sorry. Okay, maybe we'll come back to you, Aditya. Yeah. The competition has launched seven-seater SUVs, perhaps ahead of what we were launching. Any thoughts there? Sorry, not clear what the question is. I mean, they've taken the early mover advantage over us. Sorry. SUVs. I'm just saying that this space was not really that well covered, but now you've seen two, three launches come in the last year or so. Yeah. Aditya, we can see the huge amount of excitement around our launch. It is unprecedented. We are very positive about it. Okay. Secondly, on the inventory for tractors, would it be 45-50 days, because that's where the industry is today? No, I just answered that. Aditya, maybe you won't hear it when I responded to Hitesh. No, we are not at 35-40 days. We are within the region of 40 odd days. Okay, got it. Thanks. Okay. Next question is from Pramod Amthe, InCred Capital. Hi. This is to Rajesh. First, in the sense of the finance availability, if you have to look at the situation of Mahindra Finance and also the other NBFCs, do you see a challenge of finance availability for customers on either tractors or on the automotive? Second question is with regard to CAFE norms. Where do you stand as automotive division on CAFE norms, and what you expect to deliver, or what tinkering you have to do to reach the expected requirement on CAFE? Yeah. Pramod, I just missed out, couldn't hear you a little bit. Maybe my network dropped on your first question. I got the second one on CAFE. Do you mind just repeating the first question? Sure. The first one is with regard to the vehicle finance availability to the customers, especially in the background of Mahindra Finance challenges and similar challenge for other NBFCs on the GNPA. How is the situation on ground for tractors and automotive on the finance availability? I'll also let Anish comment on that. We haven't sensed any challenge on availability of financing on the ground, either for auto or tractors up until now. Of course, it's something to wait and watch for, and Anish has spent a lot of time talking around that in the context of Mahindra Finance. So far on the ground, we haven't seen any challenges. Let me, Anish, just do the CAFE question, and then you can come in. We are, Pramod, reasonably prepared with the CAFE norms, meeting the norms that are expected. Multiple actions are in place to enable us to do that, and we think we should be on course. Pramod, just to clarify, the Mahindra Finance stress is around the higher GNPA. The team feels very comfortable right now that they will be reversed based on what they've seen historically and based on the data that we've shared here earlier. Therefore, there is no impact on disbursements at all. Mahindra Finance disbursements are going on as normal, in fact, looking to grow on that front. The liquidity position has been very strong, as was shared in the Mahindra Finance analyst meet as well, in addition to the capitalization position. Thank you. Pramod. Okay. Next question is from Sonal Gupta of L&T Mutual Fund. Sonal, you can go ahead. Yeah. Hi, good evening. Thanks for taking my question. Just a first question on electric three-wheelers. Could you talk about what is the sort of capacity you have and what sort of run rate ramp-ups can we see if the demand is there? Secondly, on the financing piece for EV three-wheelers, is that figured out? What% of EVs are currently being financed, three-wheelers? Yeah. On the electric three-wheeler, I'm guessing your question is more around our readiness on capacity. Is that right, Sonal? Yeah, both on capacity and then on the financing part. Yeah. Yeah, sure. The financing was the second question. Your first question was related to capacity, right? Both are part of the first question, actually. Sorry. Okay. Like I said, we are seeing very good traction on the goods segment that comes out of two segments, so to say. One is the e-commerce players. The e-commerce players are looking at a significant pickup. As you know, we have spoken about our tie-ups with people like Amazon in the past, and we see good traction coming out of that. The second clearly is as we've launched Treo Zor and now expanding the network for that. We are seeing, again, very positive response, because clearly there is a value proposition in it based on the cost structure. We are well poised for that. As I mentioned, the dampener at the moment is the passenger segment. We think that is going to take a little bit of time to pick up, because that has not been very good for the owners of the vehicles over the last year or so. There is a resistance for that set of people to repurchase or new people to come into that segment at this point of time. That is the dampener, but we think that the momentum on load will offset this in the short term. On the financing part, clearly, that is something the finance companies are going to wait and watch. We've engaged in some very high-level discussions with key financiers, some in the PSU segment and some in the private banking segment, and we are seeing a high willingness to support financing. Clearly, there will be a little bit of a wait-and-watch as resale prices get established and so on. We are seeing a reasonable momentum. When any new category is getting created, there are going to be some barriers to change, and working around the financing situation is one. Anish, you want to comment as well on the financing? Yeah, I think it's financiers getting comfortable with the product, which is part of any product evolution. We don't really see too many challenges on that front. Yeah. Just on that, could you give a number in terms of what is it, like EV three-wheeler capacity, is it 60,000, 100,000? What sort of a number you have right now? Certainly, the three-wheeler segment has skyrocketed expectations. We are reasonably here. I'm not going to give you a number, Sonal, but we are well-placed at the moment. We don't need any significant investments to ramp up beyond some which we've just done, which are small investments to match capacity to the demand that's evolved. We will at an appropriate time come out with our overall game plan and so on for how we're going to build last mile mobility into a larger business. We are reworking and evolving numbers and seeing what it would take to get us there. I don't want to jump the gun right now. We have our group strategy team working with the business teams to put in place a long-term strategy to drive this. I'm just going to wait a little bit till we have all the elements in place. Sure. My other question was on the auto margins. Over the medium term, what do you see as the drivers of the improvement? Because clearly, over the longer period, we have seen these margins have kept on declining, and now there is a lot of pressure also because of the high depreciation of the previous, and our volumes have not really grown. What is the driver here? Is it going to be product-led and mix-led improvement, which will drive it, or there's a significant operating leverage, as you say, assuming the volumes come back to FY 2019 levels for SUVs plus the pickups. I'm just trying to understand what will be the driver to take you back to, say, a high single-digit margin range. Yeah. Firstly, our OPM margins are the most competitive amongst all published numbers, if you were to compare them on the auto side. While your question on margin pressure is very valid, it is the best-in-class margins compared to any other player in the domestic market in whichever segment that you look at. I just want to reinforce that while there is margin pressure, we believe we have done very well to manage our OPM margins. The key levers that we will work on are as follows. One is there are several projects on to improve and reduce material costs through value engineering. There is opportunity, and as we know, typically newer products have a greater opportunity because the older products have been already fully optimized. On the newer products, there is a lot of work happening on the new launches to optimize value without taking away customer benefits. That is one critical project that is on, which we believe will yield us quite a significant improvement. We did, in the last meet, talk about the very substantial reduction in fixed costs that we've done through FY 2021. We've completely redefined SG&A, marketing costs, so on and so forth. We are learning to do brand launches with very low budgets. We saw that on Thar. We are seeing that on XUV700. All this excitement is being created with very, very little mainstream media presence. That is a critical lever that we are working on. Certainly, operating leverage will kick in as volumes go up. It is unfortunate that we have not been able to fully leverage the demand that we have for our products, and we think that will even out in the next few months. I think what we are focusing on is driving material cost down of the newer launches, focusing on managing our fixed costs very well. I think the number we had shared last time was an INR 800 crore reduction and on the auto business. Of course, mix does matter, and we are taking price increases appropriately. Hopefully, the commodity cycle will start moving downward at some point. I just want to reinforce again that our margins are very good. Sure. Thank you. Thank you. We'll just take two more questions. Chirag Shah of Edelweiss, can you please go ahead? Yeah, thanks for the opportunity. My first question is on the farm subsidies. There is a significant improvement sequentially on the margin front. How much of this is seasonality, one, and how do we look at the margins that we have reported sequentially at 5.7%? What is the scope of improvement? Should I take that, Amit? Yeah, go ahead. Yeah. Chirag, hi. Firstly, it's a trend which is not just a coincidence. We've really worked very hard on restructuring each of these companies and each of these organizations. In each of these organizations, we have worked on significantly bringing down the breakeven point. Even in a company like Mitsubishi in Japan, where it is very uncommon to do restructuring and voluntary retirement schemes, we have very successfully done that in December of last year. Turkey has gone through significant manpower cost and other business model restructuring. A lot of work has happened in MAgNA, where our costs have been brought down to make us very competitive and a key focus on bringing down breakeven points. We are seeing the effect of all of that. Of course, there is an upside at the moment in demand in some of the markets like Turkey. Let's keep in mind that Turkey had a huge fall on industry size. If you go back three odd years, the tractor industry was in the region of 65,000, 70,000, 72,000 odd tractors a year, which have fallen to as low as 20-odd thousand tractors a year. When we are now looking at growth on that, it is growth on a hugely depressed industry size that had happened two years back. We don't think that this is a cyclicity. Of course, in every tractor market, there will be some highs and some lows, and volatility is a part of the business cycle. We think the efforts on restructuring our costs and strengthening our value proposition is what is giving good results. Chirag, does that answer your question, or did you have anything else? Yeah, this is helpful. Second one on the automotive side, if possible, can you indicate the impact of negative operating leverage sequentially? Is it possible to indicate how much is the negative, which will come back as volumes normalize for you? Say, if you go back to Q4 levels, how much of this negative operating leverage will reverse? I'm not absolutely sure I've understood the question, Chirag. Are you saying what will be our operating profit if we were at quarter four levels corrected for margin depression because of inflation, is that what you have in mind? Yeah. If you look at Q4 to Q1, there is a significant drop in volumes. Okay, there will be a negative operating leverage impact on various aspects of the business. Yeah. Can you just indicate how much that could be? When things normalize for us, what is the right level of operating profitability one should look at? I'm not sure how to answer this question without giving a very definitive guidance. Manoj Bhat, do you want to comment on any thoughts? I think, let me just suggest one thing here, because there are various variables there. We can talk about it in the sense of keeping everything else constant, but that might cause more confusion. My suggestion would be, we'll have Sriram work with you after, Chirag, to look through the various variables and be able to point out what's happened in the past, what has changed from there, and that will give a clearer picture. Just 1 clarification. Rajesh, you mentioned that you indicated that in autos, new models tend to have lower margins. I presume that is at EBIT level and not necessarily EBITDA. Because of higher depreciation, the EBIT margin would be initially lower on the new launches. Is that the right assumption? It depends on the pricing strategy, Chirag. I wouldn't want to give a generic answer. There are products which we price very aggressively to win, and there are some where we don't need to do that. The answer will vary depending on how strong a pricing stance we need to take to break into a segment. Basically, Chirag, that's not a generalization because, as Rajesh said, pricing strategy is also temporary because it might be aggressive for the first six months or the first 12 months and then catch up again. In general, it would not be fair to say that new products have lower margins. It will depend on the pricing strategy and for what time period. Yeah. Thank you. Thanks, Chirag. Okay. Just to give you a perspective, we held on to Thar prices because we didn't want to put off customers who had a very long waiting period. That's a conscious call we took through all the commodity increase, because it would have really upset customers who had booked when we were launching and then got a waiting period of six months, eight months, 10 months. We normally don't do that, but in the case of Thar, we decided to protect the huge demand that had happened right at the start. These are things that do have an effect and varies from product to product and time to time. Yeah. Thank you. Okay. We have the last question from Nitish of Jefferies. Nitish? Yes, hi, good evening, thank you for taking my question. First question is, if I look at the gap between the consolidated and the standalone profits between the fourth quarter and the 1st quarter. That seems to have contracted even excluding the Mahindra Finance issue. While you mentioned that pretty much all subsidiaries have seen an improvement in profit sequentially. Is there anything which is dragging your subsidiary contribution on a QOQ basis, or am I missing something there? I think at this stage it's essentially Mahindra Finance for this quarter. If you take Mahindra Finance out, consolidated goes up significantly. There, as we said, it's what the Mahindra Finance team believes is a short-term issue. Is there something else beyond that that I'm missing in your question? I meant excluding the Mahindra Finance. Let's say we knock off Mahindra Finance impact on the whole consolidated profitability for the quarter. Broadly what it seems is that the implied profit contribution of subsidiaries has gone from about INR 800 crores or so in Q4 to about INR 400-450 crores this quarter. You have mentioned on the slides that in most subsidiaries your profitability has improved sequentially. I just wanted to understand, am I missing something here? Is there something which is not like to like, or what could explain this? If you are looking at standalone after EI, there will be some impairments in the past which are not there right now. That is one thing that makes that margin narrower. Even if we take Mahindra Finance out, we're assuming zero profit for Mahindra Finance at INR 1,300 crore level. We compare INR 1,300 versus INR 934 or INR 848. You typically have a Mahindra Finance profit in there as well, that would extend it further. Anish, just to add to that, I think from Q4 to Q1, there are several businesses which did decline because of the COVID impact. Is that what you're referring to in your question? Yes, possibly. Is there anything specific? I think my only commentary there would be, I think if I look at many of these businesses, whether it is hospitality or real estate or logistics, I think April, May were bad, June was better, July is even better. I think it's just a normal curve. I wouldn't read much into it. As Anish mentioned, the financial services business is the biggest impact. Okay, understood. Thank you. My second question is, how are you thinking of discounting in the tractor industry? I guess FY 2021 would have been a very good year given it was a supply-constrained industry, and now we are probably getting more balance from demand and supply. Is there a case for discounting to get a bit more normalized versus maybe last year? You mean will discounts go up? Yes. Say, at least versus last year. Yeah. Nitish, I think there are two things at play here. One is the discounting and the other is the price increases. Everybody, each player will follow a different mix of how much in price and how much in discount. Potentially somebody may take a higher price increase and pass on something more by way of discount and some others who are Your point on the fact that supplies are better for everybody as we get into this season, and hence the level of competitive intensity will be higher than last year, I think that is a correct situational analysis. How that will play out is something that we have to watch. I think, I don't see it going out of hand compared to what was in FY 2020. FY 2020, we do believe is an aberration by way of very low discounting and a very good level of debtors. As you know, it had several quarters of negative core working capital, which never happens in the tractor business. These we think would be outliers. Okay. Thank you very much. Thanks for taking my questions. Yeah. Thank you. With that, we come to the end of the conference. Thank you everyone. Anish, back to you. I just want to again thank everyone for making the time today, and we'll be happy to follow up one-on-one if there are more specific questions that we have not answered today. Thank you everyone. Have a lovely day. Thank you. Thank you. Thank you.