EICHERMOT — earnings call
The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.
Questions and answers
System · Call Header
“Q3 FY '25 Earnings Conference Call” February 10, 2025 MANAGEMENT: MR.
SIDDHARTHALAL– MANAGINGDIRECTOR& CHIEF EXECUTIVEOFFICER– EICHERMOTORSLIMITED MR.
B.
GOVINDARAJAN– CHIEFEXECUTIVE OFFICER-ROYALENFIELD& MANAGINGDIRECTOR– EICHERMOTORSLIMITED. MS.
VIDHYASRINIVASAN– CHIEFFINANCIALOFFICER– EICHERMOTORSLIMITED MR.
VINODAGGARWAL– MANAGINGDIRECTOR& CHIEF EXECUTIVEOFFICER- VECV & VICECHAIRMAN-- EICHERMOTORSLIMITED MS.
VIDHYASRINIVASAN– CHIEFFINANCIALOFFICER– EICHERMOTORSLIMITED MODERATOR: MR.
MUKESHSARAF– AVENDUSSPARK Page1of18 Eicher Motors Limited February 10, 2025 Moderator: Ladiesandgentlemen,goodday,andwelcometoEicherMotorsLimitedQ3FY'25Earnings ConferenceCall.Asareminder,allparticipantlineswillbeinthelisten-onlymodeandthere willbeanopportunityforyoutoaskquestionsafterthepresentationconcludes.Shouldyou needassistanceduringthisconference,pleasesignalanoperatorbypressingstarandthenzero on your touch-tone phone.
Please note that this conference is being recorded. InowhandtheconferenceovertoMr.MukeshSaraffromAvendusSpark.Thankyou,and over to you, sir. MukeshSaraf: Thankyou,Darwin.Goodevening,everyone.MukeshSarafherefromAvendus Spark. Appreciateeverybodyloggingin.Fromthemanagementteam,I'mpleasedtohostMr. SiddharthaLal,ExecutiveChairman,EicherMotorsLimited;Mr. Vinod Aggarwal,Vice Chairman,EicherMotorsLimitedandMDandCEOofVECV;Mr.B.Govindarajan,M.D., EicherMotorsLimitedandCEO,RoyalEnfield;andMs.Vidhya Srinivasan,CFO,Eicher Motors Limited. I'llnowhandoverthecalltothemanagementforopeningremarks,postwhichwe'llbeginthe Q&A.
Over to you, sir. SiddharthaLal: Hi.Goodevening,everyone.ThisisSiddharthaLalhere,andwelcomeeveryonetoEicher MotorsLimitedearningscallforthethirdquarterendingDecember31st,2024.Thishasbeen alandmarkquarterforusatEicherMotorswithsignificantmilestonesandstrongperformance acrossbothRoyalEnfieldandourjointventurewithVolvoVECommercialVehiclesLimited. We've recorded our highest ever quarterly revenue EBITDA and profit after tax in this quarter. StartingwithRoyalEnfield.We've hadanincrediblefewmonths.Andourcommitmentto puremotorcyclinghastranslatedintostrongdomesticgrowth,makingthisourbestever quarter. We launched2veryspecialmotorcycles,theGoanClassicandtheScram440,both rooted in authenticity and purpose-built design. TheGoanClassicintroducedatMotoverse,whichisourannualeventinGoa,isinspiredby thefreespiritedmotorcultureofGoaandaplacethat'slongbeenahavenforridersandfor RoyalEnfieldaswell.TheupgradedScram440,firstunveiledatMotoverse2024,was launchednowandisanadventuretourercrossover, builtforthosewhowantamotorcycle that's fun in the city as well as on the trails.
So it's multipurpose that way. Thisquarteralsomarkedadefiningmomentinourjourneytowardsthefutureofmobility.We tookourfirststepsintoelectricmobilitywiththedebutofourEVbrand-FlyingFleaandthe progressindeliveringourpromise.Beyondourproductlaunches,oneofthehighlightswasthe 14theditionofMotoverse,wherewehadnearly10,000ridersthatcametogethertocelebrate thespiritofmotorcycling.Itwasapowerfulreminderofthevibrantcommunitythatwehave at Royal Enfield, and that fuels our journey towards a way forward. Andaspartofoursocialmissiontosupport100Himalayancommunities,weconcludedour firstevereditionofJourneyingAcrosstheHimalayas,whichiscelebratingtheregion'snatural beauty,cultureandtraditionsthroughartwork,photography,installations,highlightingthedeep connections between its ecology and people. Page2of18 Eicher Motors Limited February 10, 2025 MovingtoVECVnow. We hadastrongquarteraswellwithmarketsharegainsacrossthe board,acrossbusinesssegments.We justconcludedourexcitingparticipationinBharat Mobility2025atVECV, whereweshowcasedawiderangeofalternateenergy products, includingelectricbusesandtrucksandnewsmallcommercialvehicleplatform,EicherProX. Overall,theperformanceatEicherMotorsLimitedhasbeensuperlative,andwe'veregistered record-breaking performances of best ever across revenue, EBITDA and PAT. Socomingtothefinancials,ourconsolidatedfinancialsforEicherMotorsLimitedforthird quarterFY24-25.EMLclockeditsbesteverQ3revenueatINR4,973crores,markinga growthof19%overQ3lastyear.OurEBITDAisatINR1,201croresversusINR1,090crores lastyearsamequarter. AndEBITDAmargin stoodat24.2%against26.1%lastyear.Profit aftertaxisatINR1,171crores,whichincludesINR164croresofshareofprofitfromVECV for EML, up 17.6% from INR 996 crores last year. I’dalsoliketotakeamomenttobrieflytellyouaboutsomekeyleadershiptransitionsthat wereapprovedattheBoardmeetingtoday.TheBoardhasappointedme,SiddharthaLal,as theExecutiveChairmanofEicherMotorsLimited.Vinod Aggarwalhasbeenappointedas ViceChairman,Non-ExecutiveofEML,andthat'sofcourse,inadditiontohiscontinuingrole ofManagingDirectorandCEOofVECommercialVehiclesLimited,ourjointventurewith Volvo. B.GovindarajanhasbeenappointedasManagingDirectorofEicherMotorsLimited,while,of course,continuingasCEOofRoyalEnfield.Additionally,wehaveappointedIraGuptaand ArunVasu, theyhavebeeninductedonEicherMotorsLimitedBoardasIndependent Directors. We're alsobiddingfarewelltoourChairmanof25years,S.Sandilya,whostepsinto retirement.HehasbeenwithEicherGroupfor50years,sooveraround5decadesandhas reallybeenaguidingforceatEicher,shapingthecompanytowhatitisrightnow.Andhe's had a huge influence on our culture and our performance. OnbehalfofallofusatRoyalEnfieldandVECVandEicherGroup,Iexpressmygratitudeto Mr. Sandilyaandwishhimalltheverybestforhisnewchapterinhislife.Wealsoliketo thankManviSinha,whoretiresasIndependentDirectorafterthecompletionofhertenureof 10years.ManvihasalsohadagreatimpactontheEMLBoard,andwewishherallthevery best. Andyeah,I'dliketoheartlycongratulatethenext2speakers,bothGovindarajanandVinod Aggarwal,ontheirexpandedrolesatEicherMotorsLimited,andlookforwardtotheir leadership,theirsupport,theirexperienceindrivingEMLforwardtothenextphaseofgrowth. InowhandovertoGovindarajantotakeusthroughthebusinesshighlightsforRoyalEnfield. Thanks.
Govind, over to you. B.Govindarajan: Thankyou,Siddhartha.AtRoyalEnfield,wecontinuedourstronggrowthmomentumwith exceptional performance in the third quarter. During this quarter, we sold 2,69,039 motorcycles,whichisupby17%onY-o-Y fromQ3FY24basis.AndinIndia,wesold Page3of18 Eicher Motors Limited February 10, 2025 2,41,971units,up13%fromQ3oflastyear.Whileourvolumesaresteadilyimproving,the premiummorethan125ccsegmentitselfisalsoshowingwitnessofhealthygrowth.Wehave hadastrongretailgrowthof7%inthesalesofmotorcyclesinFY25(Apr-Dec); (12%during thefestiveperiod)inIndia.AndQ3hasseenthehighesteverdomesticretailforRoyal Enfield. Intheinternationalmarkets,weshipped27,068unitsinQ3,anincreaseof71%overthelast year. Basedonthestronggroundworkwelaidinthefirsthalfof2024,anddetailingand planningourlaunches,strengtheningouroperations,refiningourmarketapproach,ensured we'reallwellpositionedforthemonthsahead.Withtherightproducts,promotion,pricingand presence,wecreatedtheperfectmomentum,leadingtoourbesteverfestiveseasonanda historic milestone for Royal Enfield. Evenastheindustryvolumessloweddown,werecordedpositivegrowth.It'satestamentthat ourexistingandthenewmotorcycles,whichwelaunched,iscontinuingtoperformverywell. SomeoftherecentlauncheslikeBear650,GoanClassic350,BulletBattalionBlackhasdone verywell,verywellacceptedbythecommunity.Andeachmotorcyclethatrepresentswhat Royal Enfield stands for, pure purpose-built motorcycling. TheHunter350crossedamilestoneof500,000sales,cementingitsplaceasoneofthe fastest-growingmotorcycleglobally. Thatreflectsitsversatilityappealacrossthediverse markets.I'malsoexcitedabouttheprogresswearemakinginelectricmobilitythatSidspoke about.AtCESinL.A.,weannouncedourcollaborationwithQualcommTechnologies,akey partnershipindeliveringadvancedconnectivitytoourcustomers.There'sanincredible response for that. We arealsopreparingtolaunchthelimitededitionShotgun650incollaborationwithICON Motorsports.Itwillbeonly100motorcycles,whichwillbeavailableworldwide.It'satrue collector'sedition.It'sastepforwardinnurturingtheglobalcustombuildcommunity.Beyond motorcycles,wehaveexpandedourretailpresencewith2exclusiveapparelbrandstores,one inPuneandotheroneinGurgaon.Thesestoresoferapremiumrangeofridinggears,helmets and lifestyle apparel that combine safety, function and style. Atanoperation,weinauguratedourfirstfully-ownedCKDplantinThailand,amilestonethat furtherstrengthensourcommitmenttotheAsiaPacificregion.Globally,wehavemaintained ourmarketshareinthekeymarkets.RoyalEnfieldisaleadingmiddleweightbrandintheUK, Number1thereandamongtop3inEurope,holding8.5%ofmarketshareacrossseveral countriesintheregion.IntheAmericas,weholdan8%marketshare.AndinAPAC,wehave reached 9% market share in the middleweight. Thisquarter, wealsohadMotoverse2024.Wehadnearlyabout10,000attendees,ofwhich 69%ofthepeoplearefirst-timeridersintothemotorcyclefestival.We tooktheREOWN, whichisthesecond-handmotorcycle,usedmotorcyclesofRoyalEnfieldtothenextlevelby expanding toalmost256citiesacrossIndia,makingpre-ownedmotorcycletransaction smoother and more accessible for our consumers. Page4of18 Eicher Motors Limited February 10, 2025 Wehaveagreatstartatawardsandourmotorcycleshavereceivedgreatrecognition.Guerrilla 450gotthePremiumMotorcycleawardfromMotoringAwards andApparelBrandofthe Year.WealsogottheManufactureroftheYearandViewers'Choice,theGoanClassic.Classic 350isthemostGoogledbikebyAckoDrive.Internationally,RoyalEnfield'sBullet350won the Gold Award in the Foreign category at the 2024 Japan Bike of the Year Award. Onourenvironmental,socialandESGjourney, wehavemadetremendousprogress.Our Vallam planthasbeenawardedastheSustainableFactoryoftheYearbyFrost&Sullivan IMEAManufacturingExcellenceAward. EicherMotorscontinuestofeatureamongthe leadingautomakersintheGlobalCorporateSustainabilityRatinginS&PandDJSIassessment for 2024.
Eicher Motors is among the top 30th percentile in the global autos. Wealsomaintainedourpositionas#8outofthe90inglobalautosintheSustainalyticsESG ratings.Withseverallaunchesandinitiativeswhicharelinedup,wearewellpreparedforour growthjourneyinIndiaandglobalmarkets.With that,nowI'llhanditovertoMr.Vinod Aggarwal,MDandCEOofVECV,totakeyouthroughtheVECVperformanceandupdates. Over to you, Vinod. VinodAggarwal: Thankyou,Govind.Iwillstartwiththeindustryupdates.Inquarter3financialyear2025, total commercial vehicle industry in the relevant market segment declined by 1.7% year-on-year to1,17,161units.ThiswasprimarilyduetosofterHDtrucksandLMDtruck segments,whichcontractedby5.4%and4.4%,respectively,anda1.4%dipinthe3.5to5-ton range.ThedropintrucksalesisattributedtolingeringsoftnesspostUnionElectionsandthe uneven monsoon in many parts of the country. Incontrast,busdemandremainedverystrongwithHDbussurging30.8%andLMDbusrising 10.7%,liftingtheoverallbusvolumesby17.3%.Exportstotalindustryvolumegrewamodest 0.3%, reflecting geopolitical challenges impacting many markets. NowmovingtotheVECVperformanceinquarter3,inthiscontext,VECVdeliveredastrong performance,recordingitshighesteverquarterlyandYTDsaleswith21,012unitsinquarter3 offinancialyear2025,surpassingthepreviousrecordof20,706unitsinquarter3offinancial year2024.Thisperformancewasdrivenbystrongperformanceacrosskeysegments.Eicher performedstronglyintheLMDtruckmarketwitha36%marketshare.Q3sales,9,702units despite a marginal volume margin drop. Intheheavy-dutytrucksegment,Eichersold5,428units,8.9%marketshare,whilecombined, theheavy-dutysalesmarketshareofEicherandVolvostoodat5,964unitsat9.7%market share,reflectingcompetitiveresiliencedespitesectoralchallenges.VECV'sbusbusiness performedverywell,postingitshighesteverQ3salesof3,749units,up10%year-on-year, witha20.7%marketshare,supportedbyrobustdemandforLMDbuses,3,151unitsplus 12.3% growth year-on-year. Reflectingourgrowingserviceandpartsnetwork,VECVpartsbusinessalsohitaquarterly recordwithsalesofINR708croreswithagrowthof25.6%year-on-year. Exportssurged 44.5%to1,192unitsdespitedisruptionsinSouthAsia.YTDVECVtotalvolumesgrew2.8% Page5of18 Eicher Motors Limited February 10, 2025 to61,488unitswithmarketshareinmorethan3.5-tonsegment,includingexportsgrowingto 18% vs 17.2% in financial year 2024. EBITDAmargin,excludingOCIonetimeincomeforthequartergrewto8.8%,growing0.8% overthesamequarterlastyear,reflectingbettercostmanagementandpricingdiscipline.At therecentBharatMobilityGlobalExpo2025,welaunchedoursmallcommercialvehiclein the2to3.5tonsegment,theEicherProX.TheEicherProXislaunchedelectricfirst. Deliveries to the customers will begin shortly. ComingtothefinancialsforVECommercialVehicles, thirdquarterfinancialyear24-25, VECVrevenuesrosetoINR5,801crores,up5.8%fromINR5,483crores.EBITDAmarginat INR509crores,up16.6%fromINR437croresofQ3offinancialyear'24.EBITDAmarginas apercentagetonetsalesisat8.8%asagainst8%inQ3of2024.Profitaftertax(NonOCI)at INR301 crores, up 44% from INR209 crores of Q3 financial year '24. I now hand over back to Siddhartha for any last remarks. SiddharthaLal: Yes. Sowe'vehadagreatperformanceinquarter3,andthat'sputEicherbackonareally stronggrowthtrajectory. AndI'msurewe'llcarrythisforwardmomentumintoquarter4as well.Ourtrustonprioritiesandobjectivescontinuestobeinlinewithouroverallstrategic vision, and we're confident that we'll build on this strong growth momentum. SothankyouallforjoiningtheEML'searningscall,andwenowmoveovertothe question-and-answer session.
Thank you. Moderator: Thankyouverymuch.We willnowbeginthequestion-and-answersession.Anyonewho wishestoaskaquestionmaypress“*”and“1”ontheirtouchtonetelephones.Ifyouwishto removeyourselffromthequestionqueue,youmaypress“*”and“2”.Participantsare requestedtopleaseusehandsetswhileaskingaquestion.LadiesandGentlemen,werequest youtopleaserestrictyourquestionsto2perparticipant.You mayrejointhequeuefor follow-up questions.
We will now wait for a moment while the question queue assembles. Moderator: The first question is from the line ofKapil Singh from Nomura.
Please go ahead.
Kapil Singh. Kapil Singh: Hello, Can you hear me Moderator: You are audible, sir. KapilSingh: Okyeahthanksfortheopportunityandcongratulationsonastrongsetofnumbers.Sir,Ifirst wantedtounderstandifyoulookatthequarterlyperformance,itlookslikethestrategythatwe outlinedseemstobeplayingoutwell.We hadcomeoutwithsomenewvariantsandthere seems to be a pretty big response from the customer. Soisthis--Ijustwantedtounderstandhowyouarethinkingaboutthis?Isthissomethingthat youintendtocontinue?Wasthisatemporaryaction?Andthenwe'veseensomesharpincrease inotherexpensesinparticular. Soifyoucouldjusthelpusunderstand,arethereany nonrecurring items or these are normalized business expenses? Page6of18 Eicher Motors Limited February 10, 2025 B.
Govindarajan: Yes, Kapil, Is this question for Royal Enfield I suppose Kapil Singh: Yes yes B.Govindarajan: So,RoyalEnfieldduringthefestiveseason,wereallydidverywell.Andinthisquarter,we- ourretailhasgrownbyalmostabout19%.Ourproductactions,whichwehavetakenonthe Classic350,BulletBattalionBlackandallthenewlauncheswith,asmentionedinthelastcall also,abouttheelevatedmarketingcampaignsandourinventorybuild-uppreparatoryforthe festive season, everything worked very well. AsImentioned,itisoursisagrowthfocus.Soallouractionsinthecompanywillbealigned aroundthegrowth.Wehaveto,allthenewproductswhicharelaunched,allthebrandswhich aretobesupported,sothatactivitywillcontinue.EveninthemonthofJanuary,ithasbeen verygood.Wholesalegrowthforthemiddleweightmotorcycleindustrywasalmostabout7% in April to December '25 despite all the noises and the new entrants. Wewillbecontinuingtofocusonexpandingthemiddleweightsegmentandstrengtheningour productpositioninginthemarkets.We willrampupourbrandawarenessforClassic650, GoanClassicandBear650andGuerrilla450,whichareallinourfocus.Yeah,wearealso buildingandscalingupourinitiativeslikeREOWN,assuredbuyback,whichareallgaining traction. Themotorcycleindustry, assuch,hasseenamutedgrowthafterthefestiveperiod,butthe middleweightsegmenthasbeensustainingthegrowth.Andwebelievewecanoutgrowthe motorcycleindustryinthelongterm,andthat'swhereouractionsareallaligned.Aboutthe onetime expenses, maybe, Vidhya? VidhyaSrinivasan: Yeah.Ithinkotherexpenses,toyourquestion,wehad5majorlaunchesinQ3ofthisyear.We hadBear650,newClassic350,BulletBattalionBlackthatBGRtalkedabout,theClassic650, GoanClassic,againstonemajorlaunchinlastyear'sQ3.Apartfromthat,wealsohadanEV brandlaunch.WeunveiledtheFlyingFleabrandinEICMAthisyearandalsoseveralregional activities in Europe against building the brand. Soapproximately, we'vehadaboutINR70croresincrementalspendinQ3forlaunchesas comparedtothepreviousyear. Outofthat,almostINR20croresistowardstheEVbrand launchandevents.Ithinkapartfromthat,wealsospentalittlebitadditionallyonon-ground marketingactivationofabout0.9%thisquarterversuslastyear. SoIthinkthatbasically explains the mix of our big swing in our other expenses.
I guess your question is, yes. B.
Govindarajan: Around that cost.
So it's one time,yes. Vidhya Srinivasan: Some of it is onetime, yeah. B.
Govindarajan: I hope that answers, Kapil. Page7of18 Eicher Motors Limited February 10, 2025 KapilSingh: Yes, sir. Understood.AndjustthesecondoneisonVECV.We'veseenprettystrongmargin expansionoverthere.SoverystronggrowthinEBITDA.Soanymoredetailsyoucanshare like what was the driver for margin expansion over here and if it's sustainable? VinodAggarwal: No,it'sfundamentallybettercostmanagementandbetterpricemanagement.Thereisno specific reason otherwise. Kapil Singh: Ok ok thank you, sir.
That's all.
I willcome back in the queue. Moderator: Thank you.We have the next question fromthe line of Amyn Pirani from JPMorgan. AmynPirani: Yes.Thankyoufortheopportunity.Ihadaquestiononexports.Obviously,youhaveseena verystrongrecoveryinexports,butpartially,thelastyear'sbasewasalsoimpactedbecauseof alotofheadwindsintheindividualmarkets.Canyougiveussomecontextofhowthemarkets aredoing?BecausewehadaphaseinwhichEuropewasgoingthroughatoughtimeforthe marketitself.USwashavingitsownissues.Also,ifyouhavesomeviewsonthistarif-related concerns,whicharebuildingup.Sohowaretheindividualexportmarketsdoing,ifyoucan give some context? B.Govindarajan: HiAmyn,youknowlastyear,youallknowwetalkedabouttheinventorycorrectionsandall thosethings.Thisyear,forus,theinternationalmarketperformancehasbeenverygood.We havesoldaround70,000unitsininternationalmarketsfromApriltoDecember'24.That's almostabout35.5%growthforthelastyear.Moreimportantlyistheretailgrowthhasbeen very good.
It is tracking ahead of the wholesale throughout the year. Nowthefocusismoreandmoreonretails.It'salmostabout8%,9%higherthanthe wholesale.MarketswhichareleadingthegrowthareUK,Brazil,Italy, EuropeandNorth America.We haveseen,wehavealsostartedBangladesh,andwehavealsodonetheCKD, andweopenedoneofthelargestflagshipstoreinDhaka.Sowearealsoenteringintothenew markets. AsIalwaysmentioned,internationalmarkets,wearecautiouslyoptimistic.Thoughthereare- thesentimentsareslightlyweaker,weseeourpositionsaregettingcementedovertheperiod oftime.Inthecomingyear, ourfocuswillbemoreonthebrandbuilding.Andinsome markets,wearetakingoverdirectentrythroughoursubsidiariesandallthosethingsbecause we see it as a good market for us in the long term. Soasofnow,theinternationalmarketis,itisdoingwell.Notthatthemacrosarebehind,but we are going slowly and steadily, and our progress has been very good, Amyn. AmynPirani: That'sgoodtoknow. JustontheThailandCKDplant,anybroadsenseastowhatkindof capacitywe'relookingat?Andwhatisthekindofannualpotentialforyouinthatmarket?And alsoanupdateonwhat'stheCKDcapacityinBrazil?Ithinkyouweregoingtoexpandthatas well.
So some recap there would be helpful. B.Govindarajan: Yes.SoThailand,CKDis-Imean,wesignedupwithathirdpartyalmost3yearsback.Now wehaveunderstoodthatthemarketisgood.Andforfuture,wehavetohaveourownsetup Page8of18 Eicher Motors Limited February 10, 2025 becausethedepthofmanufacturingalsohastoincrease.Sowehavegoneaheadwithourown manufacturing facility. Thatfacilityisscalable.Asofnow, weareoperatingonlyinoneshift,whichcandeliver almostabout5,000to7,000motorcyclesamonthbecausewearealsolookingatthatbase from there, what are all the other markets which have an FTA, which can be made use of. Soit'sunderexploration.Therearefinerdetailswhicharebeingworkedout.ButasI mentioned,itisscalablebecausethedepthofmanufacturingisnotveryhighinThailand.Soto that extent, speed at which we wanted to do to scale up will be higher.
That's about Thailand. AndBrazil,whichyouhaveasked,soweactuallygoneinforthesecondCKDplant,andthat isalmostinthefinalstages.Themarketisgood.Soatsomepointoftime,becauseofthequota non available, we put the expansion on hold. NowwithourCKDfacility,whicharecomingup,andnowwearelookingatslowlyopening the retail outlets also.
So we are bullish about that market in time to come. Amyn Pirani: Ok thanks for that.
I will come backin the queue. Moderator: The next question is from the line of PramodKumar: from UBS.
Please go ahead. PramodKumar: Myfirstquestionisregardingthegrowthversusprofitabilitypivot.Soweclearlyhavemadea transitionfocusingourpivottowardsgrowth.AndIthinkwe'veseenthebenefitsofthatinthe festiveseason.Butjusttryingtounderstand,havewefoundtherightbalanceintermsofthe valuepropositiontothecustomersandthemarketingefort?Oristheremoretothisaswe kind of go forward? I'mjusttryingtounderstandwherewillthemarketingeforts andtheothermarket-driven activitieswillkindofsettle?I'mjusttryingtogetadirectionaltrend,arewekindofsatisfied withthebalancebetweenvolumegrowthandmargins whatwehavecurrentlyseeninthe quarteradjustedfortheone-ofs,ofcourse?Sojustanythoughtsonthat,Govind,Vidhya,you would say, please, that would be very helpful. B.Govindarajan: SoPramod,asanorganization, aswehavebeensaying,weareagrowth-focusedcompany. Andalltheproductswhichwearelaunching,weareactuallyaddingvaluebacktothe products.Wehaven'tincreasedthepricing.Wewererampingupourbrandbuildingactivities andthemarketactivationsduringthistimebecausethat'swherewefeltwehavetodomore work on all the new products which are launched. LikeClassic650,GoanClassic,Bear650andthe450ccSherpaengineplatformRoadster,the Guerrilla,whichisanoutstandingmotorcycle,allthosemotorcycles,wehavetodothebrand buildingactivitiesandthemarketactivation.Sothatwillcontinue.Soit's--asweareadding valuebacktotheproductandthemarketingactivationandsupport,whichwehavetodoand brand building activities, growth is the focus. Page9of18 Eicher Motors Limited February 10, 2025 Sonowspecifictotheprofitability,wealwayshavebeenmentioning“profitabsolutepool”is what we have to look at. PramodKumar: Okay, soyeah.Okay, Govind,butI'mjusttryingtounderstand,havewefoundtheright balanceiswhatI'mtryingtogetat.Arewesatisfiedwiththekindofefortswe'veputinand the result of what we got in terms of the market response or the consumer response? B.Govindarajan: Yes.Wehavetoconstantlykeeplookingathowthemarketdynamicsisandwhichareallthe areas,whichproducthastobelookedatandsupporthastobedone.Sothebalanceisnotthat we have one answer for it.
As growth focus requires, from time to time, we'll keep doing that. PramodKumar: Andthesecondquestionisonthedemandresponse,Govind,becausewe'vebeenkindof seeingweakdemandforthelastfewyears,ofcourse,outperformedinthemotorcycle category.Butyes,generally,there'sbeenabitofasluggishdemandgoingintotheseasonand all of a sudden, the demand came in. SoI'mjusttryingtounderstandwhatyouweretryingtodo:abridgeofwheredemandwason amonthlybasisbeforethefestive orthemarketsharebeforemonthly--beforefestiveand whereitistoday,couldyoujusthelpusunderstandhowmuchofthisisledbyexistinginquiry converting to actual purchase? Andhowmuchofthisiskindofwinbackfromcompetition?Whatwasthereintermsofsome bitofconfusioninthemindsoftheconsumerwithsomanybrandlaunches,right?Soifyou canjusthelpusbreakdownthecomponents,andalsohowmanyofthemarenewcustomers, which are helped by your additional reach on the semi-urban, rural side? Andanycolorontheregionalperformance?Atdiferentregions,howtheyhaveresponded duringthefestiveseason?Andalso,anyfinalthoughtsonhowyou'reseeingdemandpost festive because January was very strong. Therecouldbeayear-endphenomenonthere.Buthowareyouseeingdemandasyoustand todaybasedonalltheinputswhatyouhaveonwalk-ininquiriestoallthoseinputswhatyou have? Moderator: Thanks, Pramod. B.Govindarajan: Yes.ToomanyquestionsyouputitinonethingPramod,butletmejusttrytoaddress.Firstis acrossthefunnelfrominquirytilluptotheconversion,throughthisinquiry,bookingsandthen wholesaleandretail,everything,wehavebeenconsistentlygrowingduringthelastquarter.In fact,inthelastquarter, wereachedamarketshareofalmostabout10.5%inthe2-wheeler industry in motorcycles. Whatishappening,asImentionedinthelastcallalso,isthatwewillstartlookingatproduct byproduct,whichrequiresamarketsupportonourbrand-buildingactivities.Wewillupthe gameinthatarea.That'swhatexactlywedid.Wealsofoundinthemarketsduringthefestive season what sort of an inventory which we have to keep, that we activated. Page10of18 Eicher Motors Limited February 10, 2025 OurClassic,BattalionBlack,allthoseproducts,whateverthemarketactivitieswhicharetobe done,thatalsohasbeensupported.Soallputtogether,ithasactuallyreallyworked.Andnow thereisapositivemomentum,whichI'mseeing,andthat'swhyyoualsomentionedJanuary also has been the growth.
That's continuing. Intimetocome,therewillbemoremarketactivationwork,whichwewillcontinuebecause someofthebrandslikeGuerrillaandall,wehavetodoabitmoreworkinthebrand awarenessitself.AndHunter,wewillbedoingsomeactivities.Therearesomenewproducts which we have lined up.
So we are positive about the growth continuing as of now. Pramod Kumar: Thanks a lot, Govind.
I will join backin the queue. Moderator: Thankyou.ThenextquestionisfromthelineofGunjanPrithyanifromBankofAmerica. Beforeyougoaheadandaskyourquestion.Letmeremindparticipantsthattheymaypress “*” and “1” to ask questions.
Gunjan, you may proceed. GunjanPrithyani: Thankyoufortakingmyquestions.Ijustwantedtoclarifytheonetimeimpact,Vidhya,that youcalledout.It'sINR70crores,whichistodowiththelaunchesinEV,andyoumentioned 90basispointsadditional.Isthatunderstandingcorrect,bothyour90basispointsand1.4 percentagepoints,whichisINR70crores,bothofthesearenonrecurringaswelookintothe next couple of quarters?
Is that understanding correct? VidhyaSrinivasan: Letmejustclarify. INR20croresoutoftheINR70croresisonaccounttoEV,okay.And obviously, thisisbasedonthelaunchintensity,andifwehavemorelaunches,therewillbe some launch spend.
I mean, but yes, broadly, that is the way to look at it. 0.9%iswhatwe'vespentonon-the-groundmarketingactivation.Duringthefestive,again, likeIthinkBGRhaspointedoutearlier,therecouldbe,dependingon,ourfocusisongrowth, and therefore, we keep looking at our marketing intensity from time to time, yes? GunjanPrithyani: Okay.That'sclearnow.Andtheotherfollow-uparoundthisIhadwasthat,ofcourse,you've donealotofvalueadditionintermsofyourBattalionBulletandClassicalso.Andtherewere nopricehikestakenonthose.Soisthereanypricinginterventionthatwetooktowardstheend ofthequarterorsomethingthatisdueasyouseetheresponsetotheseinterventionsquite positive? Andwhileyoucoverthepricehikes,ifyoucanalsotalkalittlebitaboutOBDrelatedimpact that you may see in the next couple of months? VidhyaSrinivasan: IthinkasfarasBulletBlackorwehaven'ttakenanypricinginterventionstowardstheendof thequarter.Asyouknow,wedon'treallycommentonanypricingactionsthatwemighttake inthefuture.ButIthinkonethingIwouldwanttosayisthatgiventhegrowththatwehave seeninBullet,inspiteofthefactthatweweremutedintermsof,Imean,we'veinvestedin the product, overall our GC has grown as far as across the Bullet family. B.
Govindarajan: And we'll continue to add value backto the consumers on the product.
That's the focus. Page11of18 Eicher Motors Limited February 10, 2025 GunjanPrithyani: Okay.Okay,gotit.Andjustgoingbacknowtothegrowthquestion.BulletandClassicclearly hasseenaprettygoodmomentumoverthelastcoupleofmonths.IfIseeBullet,wearegoing backtotheFY'18numbersthatweusedtosee.Nowintermsofthebrandpotential,thatis withBulletandClassic,ifyoucantalkalittlebitmorehowdoweordoweseemoreupsideto the bullet run rate than we're seeing right now? Andsecondly,onClassicagain,wearewayoffromwherethepeakvolumesusedtobeback infiscal18.Sojusttryingtounderstand,dotheinterventionsthatyou'remakingrightnow give us confidence that there is a huge potential left with these brands, both of these? B.Govindarajan: Ithink,Gunjan,youreferred2018.In2018time,theproductwhichwehad,Bullet350and Classic350,wemovedontotheJ-platform.Thatisoneactionwhichwehavedone.And BattalionBlack,youallhaveseenwehavelaunchedit.Theresponsehasbeenverygood. Primarily, wherethemarket,wherethebulletwasverystrong,inthatmarket,theBattalion Black got accepted very well.
Now we are also opening to the other parts of India. Classic,it'sayearofclassicism,whichwewanttocelebrate.Wearedoingalotofactivities aroundClassic.Ifyouremember,wedidthefactorycustomsontheClassicasaspecial.Soa lotofactivitiesandtheGoanClassic,whichwelaunched.SotheClassicwholefamily,there's a lot of activities which are happening. AndtheloveofClassicisalsoback.ConsumersstartedreallylikingthenewClassicandthe colorways,whichwehavelaunched.SoIdoseeinthefuturealsotheloveiscontinuing.But we have to support it, which we will continue to do through market activations. GunjanPrithyani: AndGovind,ontheinventoryside,thislastquestionis,isthatsortednow?Wewereinastock outsituation.Wherewouldtheinventorylevelsstandnowatanoveralllevel,channel inventory? B.
Govindarajan: Go ahead. VidhyaSrinivasan: SoGunjan,Ithinkthestockoutsituationonlybecauseduringthefestiveseason,wehadsuch astrongsaleduringOctoberthattherewereafewareaswheresomeofthecolorwaysand someofthemodelskindofgotoutofstock.Wehavestockedbackup.Ithinkwearebackto our regular inventory levels. B.
Govindarajan: We have 2 to 3 weeks... Vidhya Srinivasan: Yes, 2 to 3 weeks, yeah. B.Govindarajan: SomecolorsandSKUs,whichwehavetomatchbecauseasVidhyawasmentioning,during thefestivetime,Imeanitwaspositive.Sosomestock-outsituationsofafewSKUshastaken place.Nowtheplantteamisgearinguptofillthatbackbecausewehavegonewiththe replenishmentmodeltoextractthefulleficiencyandsupportthedealercommunityalso.Itis working really well. Gunjan Prithyani: Thank you so much. Page12of18 Eicher Motors Limited February 10, 2025 Moderator: Thankyou.ThenextquestionisfromthelineofMumukshMandleshafromAnandRathi Institutional Equities.
Please go ahead. MumukshMandlesha: Yeah,Thankyoufortheopportunity.Sir,firstly,toVinodsir,ontheCVindustryoutlook.So howdoyouseetheQ4quarter?Andjustonnext6-to12-monthperspective,canyoushare how do you see the industry growth? VinodAggarwal: Ifyoulookattheoverallindustry,first9monthshavebeensortofastagnantandalittlebit marginal droparound,Ithink,2%to3%drop.However, goingforward,wearevery optimistic.ThereasonbeingthatifyoulookatthecapitalexpendituretrendsofGovernment ofIndia,first9months,theyhavespentaround,onanaverage,everymonth,INR72,000 crores.Andbasedonthecurrentplan,thislastquarter,Ithinktheexpectedspendisgoingto bearoundINR92,000crores,INR95,000crorespermonth.Andthatwillbeasimilarspendin the next year as well. Sotherefore,basedonthisincreasedspend,weareexpectingthattherewillbegooddemand inquarter4.Andotherwisealsowithallthebettermoney,whichisgoingtobeavailableinthe handsofmiddleincomegroupswiththebettertaxation,withthetaxationrelief,Ithinkthere willbesomebetterconsumerspends,whichwillhaveaclearcircularimpactontheentire economy, leadingtomoreconsumptionandthenmoremovementofgoodsandservices.So therefore, we are very positive that the commercial vehicle industry next year should do better. Andofcourse,ouroverallexpectationontheGDPgrowthcontinuestobemorethan6%, around6.3%or6.5%.Andreplacementdemandisalsogoingtoremainverystrong.Interest rates,whichhavebeencutrecentlybytheReserveBankofIndia,0.25%,thatwillalsohavea positiveimpactontheoverallfinancingrates.Sotherefore,Ithinkcommercialvehicle industry, based on all these fundamental factors, should do better. MumukshMandlesha: Gotit,sir. AndjustonhowistheinventorysituationintheCVindustry, andhowisthe discounting going, sir? VinodAggarwal: Asfarastheinventorysituationisconcerned,inventoryisquitehealthy.Ican'ttalkofthe inventoryintheindustry. Butofcourse,aswellasourinventoryisconcerned,wearequite healthy,andwearewithinournormsontheinventory.Asfarasthediscountingisconcerned, thisissteadilyimprovingonly. Sopricemanagementaregettingbetter. Moreandmore realization is there with everyone that the discounts are not good. Sotherefore,thediscountsarealsonotsustainableinthelongrun.Sotherefore,weare expecting that the discount levels should continue to drop. Moderator: Gotit,sir.Sir,thenextquestionistoGovindarajansir.OntheEVlaunchpipeline,sir,wehave thisFlyingFleaandtheStarkcollaboration.Justwanttounderstandwhat'sourtimelinefor the launches for these brands? B.Govindarajan: SoontheFlyingFlea,whichistheCityPluselectricmotorcycle,that'sabrandfromRoyal Enfield,weunveiledtheFF-C6andthescramblerFF-S6,boththeversions.There'salotof Page13of18 Eicher Motors Limited February 10, 2025 activitieswhicharehappening.Aroundthefirstquarterof2026willbethetimewhereinwe will be hitting the market. Mumuksh Mandlesha: Got it.
And for Stark partnership,any plan to launch the product? B.Govindarajan: StarkisactuallyastrategicinvestmentfromEicherMotors.Primarily,itisallabouthelping eachotherandunderstanding.We getthehelpfromStarkintermsoflightweighting, modularitydesignandpushingtheenvelopeoftheinnovationswhichwecanbringinintothe motorcontroller,batterycontrollerandtheintegrationinthewholevehicle.That'swhatweare actually learning from them. Andalso,forStark,becausewearegoodinthescale,supplychainoperations,wesupport theminthat.Sothat'sthekindofacollaborationwhichwedo.Thereisnosuchproductwhich we are working around to bring it to the market immediately. Mumuksh Mandlesha: Got it.
And for Flying Flea, sir,what kind of production capacity initially we would have, sir? B.Govindarajan: Ithink,wearecurrentlyourFlyingFleawillbemanufacturedoutofourVallamplant.Sowe arebuildingacapacitywhich,wehavementioned,isalmostabout1.5lakhperannum.But that'sallscalablebecausethat'savehicleassemblyline,andwewillgomodular. Andwe always have looked at that we won't put a heavy capex onto this. Wewillgomodularandthat'swhatwearegoodat.EvenforFlyingFlea,dependinguponthe market situation, we will keep improving whenever it is required. MumukshMandlesha: Gotit,sir. Sir, nextquestionistoVidhya Ma'am.Justonthegrossmargin, thisquarter sequentially, there was a fall in the gross margin.
Is it due to mainly the mix of the products? VidhyaSrinivasan: Ithinkyou'vekindofansweredmyquestion.Butbasically, Ithinktherearetwothings essentiallybecauseofproductmix.We'vetalkedaboutsomeoftheopportunitiesthatwe've donefromaBattalionBlackstandpointoreveninClassic350wherewe'vetriedtomakeitnot toimpactoncustomers,andwe'vealsonotincreasedourprices.SoIthinkthat'swhatandthe productmix,that'swhatisresultinginthegrossmargin.Butonanabsolutelevel,grossmargin has increased obviously. MumukshMandlesha: Gotit,gotit.Understood.Andjustlastly,onthecapexside,howwasthe9-monthcapexfor the Royal Enfield and VECV?
And what is the guidance for the full year? VinodAggarwal: Ithinkinthebeginningoftheyear, weannouncedthatwewillhavethecapexofaround INR1,000croresforthefullyear. Soweareontrack.Andwearelikelytobearound INR1,000 crores for the full year. Moderator: Sorrytointerrupt,werequestyoutopleasere-jointhequeue.Youmayaskyourquestions once you're asked again, sir. Mumuksh Mandlesha: Sure, Thank you. Moderator: Thank you.We have the next question from the line of Jinesh Gandhi from Ambit Capital. Page14of18 Eicher Motors Limited February 10, 2025 JineshGandhi: Myquestionpertainstoexports.Soinexportmarketofallthenewproductlauncheswhichwe havedoneinthelast12months,whichmodelsareyettobelaunchedinsomeofournew export markets? B.Govindarajan: Well, productinanexportmarket,therewillalwaysbealag,Jinesh.Soforexample, Himalayan,wearejustlaunchinginBrazil.GuerrillawehavejustlaunchedatanAPAC region.Soit'salltheproductsinthisquarter,mostprobablywillbelaunchcompletioninall the international markets. Jinesh Gandhi: Including the Classic 650s and Goan650? B.
Govindarajan: Yes, all the products. JineshGandhi: Gotit.Andsecondly, thisThailandCKD,whichweareputtingup,thiswillbealsofrom exporttoEuropeanmarketaswellgiventheFTAThailandhasandinthatcontextwhatkindof advantagedoesThailandofer tousfromthatperspective?Whatisthethatyes,sorry, go ahead. B.Govindarajan: Butfirstisthatparticularmarkethavetobetakencare.Sowehavetogetthatright.Sowe haveestablishedthebasethereandtheFTAisbeingstudiedbyourteam,whatevertheASIAN marketsfirst,thenwe'llparallellylookatonaTCObasis,whatmakesasense,whethertosend thefullcontainerfromIndiatoEuropeorfromThailandtothatplace,thatstudyisonand maybecomingyear, wewillsee.Ifthereisamerittothat,wewillreviewit.Otherwise, currently, Europe will be going only from Chennai plant. Jinesh Gandhi: Okay.
But any sense of what would be import duties on our bikes in Europe? B.
Govindarajan: Sorry? Jinesh Gandhi: What would be import duties on ourbikes in Europe? B.
Govindarajan: 5%.
It's about 5%. Vidhya Srinivasan: Yes. Jinesh Gandhi: Hello? B.
Govindarajan: It's about 5%. JineshGandhi: 5%,okay.Andlastly,Vidhya,thetaxrateforthequarterwasbelow22%.Isthatanormalized rate?
Or we should see going back to 23%, 24%? Vidhya Srinivasan: 24% to 25% is the rate. Jinesh Gandhi: 24% to 25%, got it, got it.
Thanks and All the best. Moderator: Thank you.The next question is from the line of Sanjaya Satapathy from Ampersand. Please go ahead. Page15of18 Eicher Motors Limited February 10, 2025 SanjayaSatapathy: Sir, myquestioniscanyougiveussomeindicationofwhatisthesustainablemarginfrom hereon? Vidhya Srinivasan: What is the sustainable marginfrom here? B.
Govindarajan: No, we don't give. Vidhya Srinivasan: We really don't give guidance.You know that. SanjayaSatapathy: I'mjusttryingtounderstandinthecontextofthenumbersthatyouhavecalledoutintermsof the recurring and nonrecurring, if you can give us something? B.Govindarajan: AsVidhya mentioned,someoftheexpensesbecauseofthehumpinthelaunches,that's one-time.Andgoingforward,that'ssortofahumpmaynotbesomuch.Butwecontinueto havetospendonbrandbuildingandthemotherbrandRoyalEnfieldbuildanaspiration.So there will be marketing activation expenses, which will continue. Butthehumpmaynotbesomuchbecausetheseareallsomeoftheproductsduetothe COVID,whichcameupforthelaunchesoneaftertheother.Sothatsortofanexpensewillnot be there.
But marketing support activities and activation expenses will continue. Sanjaya Satapathy: Thank you sir. Moderator: Thankyou.ThenextquestionisfromthelineofOmkarRanefromEmkayGlobalFinancial Services.Thecurrentparticipantseemstohavedroppedfromthequeue.Wewillproceedto the next question, which will be from the line of Jay Kale from Elara Capital.
Please go ahead. JayKale: Yeah, thanksfortakingmyquestion.Somyfirstquestionis,againharpingontheearlier question,whatwouldyouseeinyourendeavorofbalancingprofitabilityversusgrowth?IfI lookattheEBITDApervehiclealso,itiskindofa7-quarterlow.SoI'mjustthinkingfroma managementperspectivegoingforward,areyoulookingatsustainablemargins whenyou balanceprofitabilityversusgrowth?AreyoulookingatEBITDApervehiclegrowingfrom here? Becausedespitethehighvolumes,we'venotreallygottentheabsoluteoperatingleverage benefits,whichwereexpectedwhenyouhaveaveryhighvolumegrowth.Iunderstandthe bulkyexpenses,butthemarketingexpenses,likeyoumentioned,aregoingtogoongoing.So howdoyou--whatisyourtargetinthesensethattogrowEBITDApervehiclesustainablyor margins or how should one look at it? B.Govindarajan: See,ifgrowthisafocus,whatdoesitmeanwhenyougrowisthat,aswementioned,we haven'tincreasedthepricingbecausewehavetobeanaccessiblemotorcycle.Andwealso wantedtoaddvaluebacktotheproduct,whichalsoourconsumershavebeenlookingatfrom RoyalEnfield.We areconsciousofit.Andwearethemarketleadersandwehavethe responsibilityofcontinuingtogrow,whichiswhatwehavedoneforthelastonedecadein India. Page16of18 Eicher Motors Limited February 10, 2025 AndnowwearetryingtodoitoutsideIndiaalso,themiddleweight.Sowehavetodomore activitiesaroundthatinpromotingthemotorcyclingasacultureandaroundthatsurround systemsofthemotorcycling.Sotherewillbeexpenseswhichwillcontinue.Whatonehaveto look at is not to look at an absolute percentage. Thegrowthhastobelookedatonanabsolutevalue,whichwewillactuallygetoutofthe overallrevenueandalsoontheEBITDAoverall.That'showweshouldlookatit,notonthe percentage alone. JayKale: Understood.Yes. Justonemoreonyourgrossmargin.Soyoumentionedthatthisismainly becauseofmix.SohowwouldhavecommoditiesmovedinQ3versusQ2?Andgoing forward, how are you seeing the commodity projected? B.Govindarajan: Commodityhasbeenlargely stable.Itwasnotaheadwind,thoughsteelandaluminumhad someuptickhereandthere,butourvalueengineeringhasbeenofsettingallthosethings.We arestudyinghowitdoeswiththeentiresituationacrossthemarketonthecommodity movement and all those things. WewillknowinthisquarterbecauseweareintoanSBPcycle.Soduringthiscycle,we'llonce againbelookingathowtheinflationis,howthecommodityismovingandaccordinglywhat actions to be taken. ButasImentioned,alltheseplatformchangesactivitieswhicharedone,firstiswehaveto landthevaluetotheconsumer.That'swhatwehavedone.Nowthefocusonalltheseproducts on the value engineering also will start. JayKale: Understood.Andjustonelastquestion.WiththisinterventionofBattalionBlackpricing,et cetera,howhaveyouseenyourcustomerprofilechange?Hastherebeenanincreased proportionoffirst-timebuyerscomingintoREortheupgrader'scontributionhasincreased? And in that context, how has your RE to RE replacement growth panned out? B.Govindarajan: Look,IthinkBattalionBlack,welauncheditintothemarketbecausewhenwelaunched BulletontheJseries,whichwasthelasttransitionontheJ-platform,themarketcameback, especiallyontheareawheretheBulletwaslovedandlookedatitinadiferentcontext.And they were looking at a few changes which are required. Asanorganization,wequicklywentbackandthenwebroughttheBattalionBlack.Inthose markets,especiallyDelhi,Punjab,Chandigarh,Haryana,andpartofUP,themarkethascome back,dealersarehappy,consumersarehappy.Andnowwearealsoopeninguptotherestof India. Asfarasthefirst-timebuyerswhichyouweretalkingabout,ourfirst-timebuyersisalmost, what,about18%,19%now.Sothat'swhatistheshareoffirst-timebuyers.Upgradingcycle, asI'vebeenalwayssayingthatwearewaitingforthatmomenttoclickin.Andthat'swhy REOWN brought in.
And we are almost there at about 234 towns now. Page17of18 Eicher Motors Limited February 10, 2025 Weareslowlybringinginawarenessabouttheupgradetoourconsumers.Sowearesettingthe basewhenthemomentclicksin,atleastwecanstartgettingintothatjourneyfastersothatthe base is being set as of now, Jay. Jay Kale: Thanks and All the best. Moderator: Thankyou.ThenextquestionisfromthelineofAmynPiranifromJPMorgan. Pleasego ahead AmynPirani: Thanksfortheopportunity. Mostofmyquestionshavebeenanswered.Ijustwantedtoask regardingthisOBD2B.Obviously, we'llwaitforyourpricehikesandall.Butanybroad contextastowhatisthekindofcostinflationthatwemightseebecauseofthis?Andshould webepreparedforanywholesalecorrectionsthatyoumightdoasyouarerampingupor ramping down the older vehicles and the newer vehicles? B.Govindarajan: SoAmyn,maybeI'llanswerthesecondonefirst.ForeverytransitionbeitfromBS-IVto BS-VI,weareacompany,wewerenotstartedwithanyoftheholdinventories.Wehaven't goneinthat.We'llalwaysbeconsciousintransition.AndsoasevenOBD2B,thetransitionis well planned, and we have tested, kept everything ready. Yes,youallknowtherewillbesomeamountofcostincreaseduetoOBD2B,whichwillbe there,butwehaven'tdecidedwhatthepriceincreaseshouldbeorshouldn'tbebecausethat's future looking, that we have to wait for some time. Amyn Pirani: Ok.
Thank you. Moderator: Thankyou.Ladiesandgentlemen,wewilltakethatasalastquestionfortoday.Iwouldnow like to hand the conference over to the management for closing remarks.
Over to you, sir. SiddharthaLal: Allright.Thankyousomuchforjoiningthecallandlookforwardtotalkingtoyounext quarter.
Thank you.
Bye-bye. Moderator: Thankyou.OnbehalfofEicherMotorsLimitedthatconcludesthisconference.Thankyouall for joining us.
You may now disconnect your lines. Page18of18