Greaves Cotton Ltd
NSE:GREAVESCOT
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
115.7
194.2
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Greaves Cotton Ltd
You don't have any saved screeners yet
Good morning, ladies and gentlemen, and welcome to Greaves Cotton Limited's Q1 FY '23 Earnings Conference Call. [Operator Instructions].
I now hand the conference over to Mr. Nagesh Basavanhalli, Execute Chairman -- Vice Chairman of Greaves Cotton Limited. Thank you, and over to you, sir.
Thank you. Good morning, everybody. Hope everybody is doing well on this Friday. Thank you all and let's get started for our conference call -- quarterly conference call. I would like to start off by giving you all an overview of the business. Mr. Dalpat Jain, our Group CFO, will take you through the financials of the quarter. I also want to take this opportunity to welcome our leadership team; Dr. Arup Basu, Managing Director of GCL; and Mr. Sanjay Behl, CEO and ED of Greaves Electric Mobility. They are also on the call.
Moving forward as -- a little bit of commentary on kind of the quarter. As you are aware, the geopolitical conflict in Central Asia, accentuated global supply chain and global economic situations, I'm happy to announce that our performance in spite of all of that has been strong for Q1. The results of Q1 reflect a successful beginning of translating a future-facing business strategy. It's reflecting in the market demand of our products, but it's also the positioning of Greaves and Greaves Electric Mobility as an attractive destination.
Our recent strategic partnership and investments from our partner Abdul Latif Jameel has borne fruitful results. Abdul Latif Jameel has committed a total capital investment of up to about $220 million, out of which the first tranche of $150 million has been commissioned and will be used for the purposes of expanded product development, manufacturing CapEx expansion, R&D activities, brand building et cetera. Greaves Electric Mobility does have the option to draw down the additional $70 million within a period of 12 months should they want to.
During the quarter, the other parts of the business also did well. The engine segment has seen a consistent growth of diesel 3-wheeler segment on a year-over-year level. As you may all recall, this was one of the segments that was worst hit during the pandemic, and with shared mobility, schools and colleges coming back, we are seeing demand improvement in that sector. Our non-auto sector also did well, partly because of the cleverness in which our engineers use different applications for different non-auto engine applications, i.e., in marine, defense, construction et cetera, et cetera -- gensets et cetera. Retail segment has been doing well, both our multi-brand service and our multi-brand retail has done well. Our optimism for the future arises from the bright outlook that we foresee in few of the exciting and promising business lines, and this will help continue to maintain our success story.
I do, request now Mr. Dalpat Jain to talk about our financial performance. Thank you.
Thank you, Nagesh. Good morning, everyone. Continuing with our growth momentum of Q4 FY '22, we are happy to announce that we had highest ever consolidated revenue in Q1 FY '23. We have great potential of growth and market expansion as a result of the diversification strategy that company undertook, including entry into electric mobility. Our share of new businesses has now grown to 56% of consolidated reported revenue.
Coming to the specific numbers, Q1, we saw a revenue of INR 660 crores; that was growth of 188% compared to last year's first quarter and 6.5% compared to sequential quarter growth that we saw from Q4 FY '22. Electric mobility grew 19% over quarter 4 and had almost 18x of revenue in the same quarter in FY '22. Consolidated EBITDA was positive at INR 38 crores compared to consolidated loss of INR 17 crores in last year's first quarter and consolidated PAT, we had a reported PAT of INR 16 crores as compared to loss of INR 22 crores in the same quarter last year. Overall, we saw a very strong financial performance and that reflects, again, the strength of the strategy that company overtook over last couple of years.
Net cash position, post the investment from ALJ Group, at a consolidated level, we had a net cash of INR 1,348 crores. The cash will be used for future growth strategies, including the new product launches, technology, and some of the brand building that we are looking at in our B2C businesses. Company had a positive internal cash generation. Standalone, we had an operating cash flow of INR 36 crore in quarter one, and that again shows the strength of recovery that we are seeing in our legacy business. Auto engines business reported a growth of 7% on a sequential quarter basis and we are seeing demand coming back in the industry.
The other area where we had seen a lot of pressure in last couple of quarters was overall commodity cycle, and that led to increase in the raw material cost for some for our product segments. I'm happy to note the commodity cycle softening is having a positive impact as we go forward and we are expecting raw material prices and raw material cost as a percentage of our revenue to come down in the coming quarters. We are confident of sustaining our growth prospects, supported by the product mix, technical and distribution strength, and pan-India presence.
With this, I hand over the floor back to Michelle to open for interactive session. Thank you, Michelle.
[Operator Instructions] The first question is from the line of [ Raj ] from Inven Capital Fund.
I'm calling from [ Raj Kumar's ] office. My first question is that what is your competition to other electric 2-wheelers who are providing high speed and high [Technical difficulty]? And my second question is, your 3-wheeler segment sales has reduced this quarter. What's the reason?
So let me start it off. In terms of -- I think you talked about high-speed 2. If you look at it from a strategy, when we started out, both in the 2-wheeler and 3-wheeler, we as a company are probably unique in that sense that we are one of the few companies, are doing both 2-wheeler, 3-wheeler. And in India last mile mobility, 80-plus percent of the vehicles in the last mile segment is either a 2-wheeler or a 3-wheeler. So, A, we are playing in heart of the market. B, within 2-wheeler when you look at the price volume relationship, the heart of the market is in that roughly the INR 80,000 category. Our products range from about INR 40,000-plus to about INR 90,000-plus, right? So we are playing in the heart of the category where the consumer is and when the consumer really wants to buy a vehicle.
Having said that, though, we touched upon a little bit about the incremental money that has been raised and I also talked about the incremental money will be used in manufacturing CapEx, marketing, plus products. In terms of products, our teams are working on higher-speed products, to your point. We are currently in the slow speed and the city speed. We are working on higher-speed products better that at an appropriate time we'll be launching, and Mr. Behl will be talking more about it. And so, yes, we will be present in that segment as well. Point #1.
Point #2. In 3-wheeler, as you probably have imagined, in the last quarter there were commodity price increases and as part of that, we did take a price increase and there were some short-term demand, supply-demand things. However, that has been corrected and we have already seen our June, July numbers bounce back. We have also incrementally added significant dealer network, both in the 2-wheeler and the 3-wheeler. So the 3-wheeler is a focus area and will continue to be expanded as we go forward.
Any further questions, Mr. Raj? We move onto the next question, which is from the line of Sonal from Prescient Capital.
Sir, I had a question, more a structural understanding. So I wanted to understand like as the electric 2-wheeler market grows, and I think you and your competitors will scale, what USP a company which has understanding of manufacturing or has that in their DNA have vis-a-vis, let's say, new-age entrants who consider this more like a mobile phone assembly kind of a setup? And so, sustainability is manufacturing something which is an advantage for cost -- for efficiency of the vehicle and where are you placed vis-a-vis the top 4, 5 players in that, in terms of your competitive advantage, is the first question.
Do you have a second question? Why don't you go ahead and then we'll come back.
Sure. Okay. The second question was more to understand the depth in the electric 3-wheelers in this quarter. So just wanted to understand that as well.
So I think let me -- so in terms of the manufacturing supply chain, we would say, yes, you're right, while the electric mobility product has less number of moving parts, is also a tablet on wheels, it's more software oriented, but it's also absolutely true that certain fundamental nuggets of the auto industry when it comes to scale, when it comes to efficiency, when it comes to supply chain, when it comes to manufacturing, all are critical for future success, while also embracing agility, embracing AI, software and connectivity. Right? So I think you need to bring in the blend of the old and the new.
And being an early mover in this sector -- remember, we got into this when not very many competition was there. So we were one of the earlier ones to believe in this market, believe in the total cost of ownership and move into the sector early. So I think the important thing is -- and we have brought in core talent and manufacturing and quality expertise from the core group where needed, right? We have also brought in supply chain and incrementally working with supply chain to improve the quality levels. So absolutely, on your question #1, while the industry is slightly different, certain fundamental things on the auto industry like manufacturing scale, quality, supply chain and even in the middle of supply chain, I think you've seen the numbers over the last couple of months, people who've been able to manage supply chains are the ones that have done reasonably well.
So I rest my case because the numbers speak for themselves. Right? Point #1. Point #1, on the 3-wheeler I touched upon it with the previous caller as well. So 3-wheeler, keep in mind, our MLR acquisition is relatively in recent times, we are building our dealer network, we are building financing network, we are building -- making sure that the products are ready to go primetime, both in terms of the traditional segment, i.e., the diesel CNG or the electric segment. And we are also looking at how to go to market. So I think the MLR story will unfold itself, the 3-wheeler over the next couple of quarters and you will hear more about that. We got some ambitious plans there in terms of products and capacity expansion.
And when you look at the E-Rickshaw market, like I mentioned to the previous caller, when the commodity price increase did happen, obviously, we -- the team took a price increase, because one thing that you must have seen with the GEM, GEM for now -- for a couple of quarters is not only growing, but it's also growing profitably in terms of both at the EBITDA level and a PBT level. So I think we're going to maintain that stance of responsibly growing the business and making sure that we are taking care of the things that are out of our control, like commodity, like supply chain, managing them. And we are not looking at this as a 1 month. We are looking at this as the long haul and how -- and we got into this early, as early mover and how we can move from there. Hopefully that answers your question.
That does. I have a follow-on, but I'll come back in the queue, sir.
The next question is from the line of Anubhav from Prescient Capital.
Sir, I just have one question. For the EV division, at like, whatever like, full scale, what sort of profitability do you see in steady state and at what level of sales will you achieve that kind of profitability?
So, Anubhav, Dalpat here. Though these are still early days, but if you see our quarter 4 and quarter 1 results, E-mobility is now close to 5% EBITDA margins. And in a steady state, we don't see any reason why E-Mobility should not be at comparable margins of what ICE players have enjoyed in this segment, which is somewhere around early double-digit. And I would say that will still take couple of years, if not less in terms of the overall -- going to that steady state, because, as we have mentioned in our earlier calls, our focus would be on ensuring right scale-up and market share gain in the initial period. Yes, we will continue to grow profitably and responsibly, but at the same time, we are not going to lose sight on the overall market share, and that's where steady state, I would say, still will be around 2 years from now.
And sir, just a follow-up. Will that path to profitability be driven both by like product mix, new product launches or like through more localization, how will like that pan out?
So, Anubhav, like we are already profitable, right, and we would be the -- maybe the only E-mobility player having a positive PAT margins. As we go forward, the increase in margins is going to be driven by both that we spoke. First, from the overall cost optimization with the increase in operations and operating efficiencies are going to kick in. So at the gross margin level, we expect improvement from there. And with the newer product launches, which are, again, as indicated earlier, going to be more towards the higher-speed segment, we are going to see improvement in margin. So in mid- to-long term, the overall journey to the steady state EBITDA margins will be driven by both increase in the gross margins at -- the operating leverage because of the fixed overheads and the new product launches that are planned by the company.
The next question is from the line of Jyoti Singh from Arihant Capital Markets Limited.
And my question is on the revenue side. So I want to know how much revenue we have for the Bestway and for the GEMPL for the Q1 FY '23, and what are our expectation going forward?
So, Jyoti, if you look at our overall E-Mobility revenue in this quarter that was close to 48%, and within that, the mix between 3-wheeler and 2-wheeler will be somewhere around 90-10, 90% 2-wheeler, 10% 3-wheelers.
Okay. And sir my second question on the price hike. So how much we take the price hike during the Q1 FY '23?
So our overall price realization in 2-wheelers if you see from the numbers is now close to INR 97,000 per vehicle, including from customers and subsidiaries, and the price increase was commensurate with the kind of raw material cost increase that we saw in the quarter.
Okay. And any further plan for the price increase?
So that will be driven, Jyoti, more by how we see the market panning out both on the demand side, as well as on the cost front. Good news is on the cost front, we are seeing overall commodity cycle softening and hopefully, the cost pressures will not be there to drive the price increases. The price strategy will be more driven by the demand in the market as we go forward.
Okay, sir. And sir my third question on the E-Mobility side, as Greaves Cotton entered earlier, but now competition is tough as everyone is entering into EV front. So what is our strategy to survive in this competition?
First of all, I think entering in earlier, bringing in the right foundational blocks, starting with the people. We brought in the leadership team, and now under the CEO we have a good CXO team. Building the manufacturing capability and doing it in the right way, frugally but yet create the capacity, bringing in the technology and the technology moats associated with it. Getting the product that the customers want to buy, understanding the consumer as to where the consumer wants to buy and which feature or which features does the consumer want to pay for, takes a lot of deep understanding of the customer whether you are a B2C customer or a B2B customer.
Greaves Cotton has always had deep relationships with customers, right, and building the network, expanding the network, and continuing to keep driving this as we go forward. So I think there are multiple things and the team continues to keep working on it and you're going to see more and more actions as we go forward, including brand building and creating brand Ampere which is aspirational.
And sir, my fourth question on the...
Sorry to interrupt Ms. Singh. I would request you to rejoin the queue as there are many other participants waiting for their turn. The next question is from the line of Kapil Singh from Nomura Group.
My first question is, wanted to understand how you see the evolution of market at various price points, because there are products available at INR 80,000, INR 100,000, INR 150,000 as well, and you being one of the leaders, are interacting with bulk of the customers who are coming to. So what really are they looking for? Are they looking for -- and I'm talking of large majority of the customers, are they looking for a higher speed, higher range or you think the current price points at which we are operating are the right price points? And what is the price point that you would want to saddle as you look forward over next 2, 3 years?
I'll start and maybe I'll have Sanjay Behl also jump in here. So one of the things, like I said before, I believe understanding the Indian consumer, understanding the Indian market is very, very important. We need to give the Indian consumer the product that India wants and not a product that is designed or developed somewhere else. Right? So I think also the meat of the market is that INR 80,000 to INR 90,000 that I touched upon at the very beginning. Right? So we believe we are playing in the right market set. We also have plans to do high-speed like I touched upon at the very beginning. So I think we have a solid plan going forward.
Sanjay, do you want to add on the consumer side?
Look, we -- looking at an India segmented has about close to about 100 million people, 70 million aspirers and about 30-odd million middle-class, even if I leave the top 3 million or 4 million which are categorized as rich and trendy. So if you look at the belly of this market, belly of the pyramid of India, what we cater to and our proposition is to exploit it and be the tipping point of electric mobility to escalate all the aspirers who are wanting to come either to personal mobility segment or wanting to shift from an ICE proposition to an electric, more cleaner, energy proposition there. So there are 70 million aspirers and 30 million middle class there. So that's a very large segment yet to kind of be penetrated with the propositions that Ampere as a product has.
Coming specifically to what is going to be driving that, a very large part of this is going to be still early adopters, though, that is going to very quickly move to early majority. And what are they seeking today? The first thing they're seeking or what is appealing to them in electric mobility is low total cost of ownership. As you know that an entry price is always comparable to ICE, especially with trend to subsidy trickling in, that's accelerated the industry and the overall cost of ownership really becomes a very attractive proposition then.
The second thing which is now improving dramatically is both in terms of speed and range that electric mobility offers is getting comparable to ICE. So that is a second very big trigger market to really happen. And as we move beyond the basic performance and liability, the next set of features will be design, style, comfort, all those features will start building up and further trigger the entire market there. So what you will see from Greaves Electric Mobility range is, it's really our product range spanning across basic functionality reliability, moving up to design style and then moving up also to smart connected school bus, which is also becoming a segment that is aspired by minds of India there, which will talk about all the connectivity features, dealer signs and all those things will start building in then.
So we are looking at the full stack offering, starting from very base level functionality reliability to style design and to connected schools bus. So we will represent it across all the segments. I can take any other question if you have.
Thank you very much for the detailed answer. Just a small one, if you could talk about what is the order book or the average waiting period that you have right now?
What we have done is, over the last quarter or so we've dramatically ramped up our manufacturing capacity. So if you see our numbers, we sold over 28,000-odd scooters in the last 3 months, in the first quarter, April to June, and that's led to a pretty much filling up the catch-up phase that we were earlier in. So currently we would be in the 1 to 2-week kind of a demand cycle.
The next question is from the line of Hiten Boricha from Joindre Capital.
Sir, my first question is related to a clarification, you mentioned we have a price realization of INR 97,000 per vehicle. Is it only for 2-wheeler or like 3-wheeler?
3-wheelers will be depending on the model, it will be different.
This is 2-wheeler cycle.
So this is only for 2-wheelers, right?
Yes.
Okay. And sir, can you help me with the current capacity utilization in this E 2-wheeler segment?
So Hiten, as we have mentioned earlier, from our Ranipet plant we have manufacturing capacity of 20,000 vehicles a month in a single shift now. And with the increasing shifts, if required, we can increase. But having said that, that's about Greaves Electric Mobility manufacturing capacity. We also have supply chain who are able to produce the parts and all of it. So considering the overall ecosystem, we are almost close to 100% in terms of our overall capacity utilization and we are working on increasing the capacity at the suppliers and also entering into strategic partnership and contracts with the larger suppliers and trying to build their capacity to align with our overall manufacturing capacity.
Okay. Sir, I have a question, I'll come back in the queue again.
There is a follow-up question from Sonal from Prescient Capital.
This is Sonal. I had 2 questions. First one, just wanted to understand, out of these 29,000-odd vehicles we've sold this year, the electric 2-wheelers, are there some B2B tie-ups you've done with the new-age delivery tech companies, anything you have there as a plan, as a strategy, if you could share? That's the first one.
And second is more again, I think, structurally trying to understand where do you see the -- is there a gap at all between you and the other 2, 3 dominant players in the market? And structurally like if you've identified where are you vis-a-vis them, if you could share maybe 2, 3 pointers for us to understand from a product, co-marketing or distribution perspective what is the journey that you have? From where you are vis-a-vis where you want to be compared to competition?
Yes. I think some of this we answered in earlier calls, but Sanjay, you want to take that, B2B Q1 sales, sort of the 29 and then the structure?
Yes. I've got the understanding of the B2B part of it, the second question I would want you to just rephrase for my clarity there. But let me answer the B2B part there, which was [Technical difficulty] question, where you said that what are the current B2B kind of -- do we have a volume going there and who are the key partners there.
We have been a preferred partner for Domino's now for quite some time. We've been supplying vehicles to them. So the sales that you see in Q1 does include the sales that we've made, close to about 2,000 vehicles to Domino's and we're doing -- we are continuing to be their preferred partner.
Apart from that, both for 2-wheelers and 3-wheelers, we have been doing -- and I'm talking about the -- Domino's is a 2-wheeler sale, which is a product called Zeal -- Z-e-a-l, which we sell to Domino's. In addition, we are undergoing advanced level of kind of closure talks or dialog and trials with many players, many B2B players. So we have just completed our trials with Amazon, where in cities like Pune, Nagpur, Gwalior, multiple city trials have been done with Amazon. There is location and demo plan already tied up with Big Basket. So the whole vehicles are being evaluated. So there are many such things, with digital, with delivery, with many more players. So there are a lot in pipeline, some nearing trials in closure stages, some in early stages of discussion. So yes, B2B is a vertical that we are looking very, very carefully and we are building business, and we already have some momentum in that part.
If you can just repeat your second question about distribution.? I didn't get that clearly.
No, Sanjay, I can take that. I think the second question was structure and how we're going to differentiate ourselves versus competition.
While I don't want to get into exactly the competition, I think what I want to focus on in, we saw the opportunity very early. We moved in very early. We were specific on which segments and which areas to go after, 2-wheeler and 3-wheeler, in that order. We said the unit economics we understand, we said we will bring in network, manufacturing, supply chain, products, design, capability in-house, right? So we continued our journey and we are building technology moats and the consumer acceptance of our product keeps increasing. And I think our -- as we go forward, we'll continue to keep working on that, and the case in point is the numbers that speak for themselves, and I'll just rest the case there.
[Operator Instructions] The next question is from the line of Akshay Kothari from Envision Capital.
So I just had 1 question. In E-2-wheeler mobility space, what is the frequency of servicing which is required and do we have adequate servicing network available?
Yes. Sanjay, do you want to take that servicing of 2-wheelers?
So we do have the basic -- at a very broad level the servicing requirement of an E-2-wheeler is much lower than an ICE 2-wheeler because the number of parts are just a fraction of the total parts that an ICE engine requires. So clearly as you understand, it's a change from a mechanical kind of delivery system, largely to electronics, and that -- also the reduction of the parts and the mechanics of the engines. The gear servicing requirement is extremely low. So overall, if you see, in a lifecycle of the scooter, the servicing in the first 3 to 6-month period is much lower than what a typical ICE scooter requires.
Coming to the second question that you said that do we have -- what's the service and spares kind of a strategy that we are working on, or what is the kind of the network we have. So we have 288 active dealers today as part of our dealer network in Ampere, and each of these points is capable of -- is having spare parts with them and is capable of extending a service proposition to all the Ampere customers, which becomes the first port of call for service in our scooters.
The second port of call is the Greaves Care network, where we have a massive amount of -- many numbers of trained engineers who are sitting, trained mechanics who are sitting. And Greaves Care becomes another umbrella in which we are able to direct through Ampere Care as a platform. So we have a platform called Ampere Care where our customers can reach out. So we can send them to the nearest dealer network, which can give them the spare if it's available there immediately and address the service request, or if it's Greaves Care network that needs to be reached out to, that can be answered to the customer. So both these networks pretty much have a very expansive pan India presence today to be able to meet the service requirement of our customers.
The next question is from the line of Pankaj from Affluent Assets.
Congrats for good set of numbers. Sir, you mentioned that you have a peak capacity of 240,000 and each vehicle is more or less realizing around INR 1 lakh. So would it be safe for me to assume that at peak capacity we would be having revenues from E-Mobility segment around INR 2,000 crores?
So though we don't give forward guidance, Pankaj, but if you look at the calculation -- from that point of view, you are right, because we are having a monthly production capacity of 20,000 vehicles per shift, which is 240,000 in a year. And if you look at our average realization, now it's close to 97,000. So your math is correct to that extent.
And what -- in case of -- as and when this peak capacity is achieved, what would be the tentative EBITDA margins? Would it be at the same 5% margins or we would be able to jump towards double-digit ones?
So Pankaj, if you look at the numbers of Q1, our gross margins were close to 20% and EBITDA margins were close to 5%. The 15%, which is there between gross margin and EBITDA, major part of it is fixed overheads and they are not going to increase in the same proportion of volumes or the revenue growth. So we expect margin expansion. Yes, some level of sales and marketing activities will build up as we go forward to build the overall Ampere and the other Group brands. But having said that, with the increase in volume, we expect margins to expand, purely because of the operating leverage that we have in this business.
Okay. Sir, second thing, in line with what the industry -- I mean ICE engine industry does, is it possible for us to give monthly numbers every first week or maybe first of the month?
So Pankaj, EV numbers are also available from Vahan portal every day, actually, in the end of the month. In terms of formerly disclosing from the company, they are some of the considerations which we are having in line with the compliance requirement and at appropriate time, company will start doing that.
Okay, last question if I may. Would you please help me with the A&P numbers as a percentage of sales? And as I understand, I may be ignorant, I do not see much of eyeballs or TV time for Ampere as a brand, whereas there are few others who have already made some flash. So just wanted to understand if we are planning for any such thing going forward.
Yes. So Pankaj, I'll start in terms of the A&P expense as a percentage of total revenue, that is up 3% in our B2C businesses. And at a company level, it will be close to 2% if you look at the P&L. From the marketing strategy point of view, company has been more focusing on performance marketing, you will see us in the digital media. If you come across any of the electric mobility vehicle, you will start seeing Ampere following you out there. So so far, our overall marketing campaigns have been more performance marketing-oriented. Going forward, yes, there a plans and maybe, I would like Nagesh to add on the future marketing strategy.
Yes. So I think Dalpat you covered most of it. I think as we relate to Ampere as a brand, like that -- Dalpat talked about, I think there is plan now especially under Sanjay, to kind of grow the Ampere brand to an aspirational brand, you're going to see more about it. Short term, demand has exceeded supply. Performance marketing, digital marketing has helped us, and as and when -- over the next couple of quarters you're going to see Ampere being built into a truly aspirational brand as well.
So we will not hesitate to put in the marketing dollars as and when it's needed, and you will see some of that, but we will also watch very carefully the growth and the profits at the same time and the market share, of course.
Sir, what is the current market share of us?
I'm sorry to interrupt, Mr. Pankaj. I would request you to rejoin the queue.
The next question is from the line of VP Rajesh from Banyan Capital Advisors.
Congratulations. I'm sorry I joined the call a little bit late, so you may have answered this question, but I was curious, what has happened on the engine side that we are seeing very good growth in this quarter?
Yes. So Rajesh, you rightly observed. On the engine side compared to the -- if you go back pre-COVID, engines overall were at a particular level of, let's say, 300,000, overall shared mobility was used across. COVID had a very significant impact on the shared mobility and that is where we saw overall 3-wheeler industry coming down from 600,000 to almost 200,000 in the peak of the COVID, and that had impact on our engine segment where we saw worst of the quarters in Q1 and Q2 of financial year '22.
Good thing is from Q3 onwards, we have started seeing recovery and now our engine volume have come -- or have grown, we have seen a quarter-on-quarter growth of 7% compared to Q4. And overall industry also is now inching towards 500,000 a year in the 3-wheeler. That's the first part.
Second part, the shift that we were seeing in the alternate fuel side, so the share of CNG which was increasing, again there is pricing dynamics, which has started working in favor of diesel, because CNG prices with the overall fuel prices going up. Now on the operating costs, diesel is also becoming comparable and we are seeing consumers, particularly in the Tier 2 and Tier 3 towns, moving back to diesel vehicles and that is where we are seeing volumes expansion in our auto engines and we expect that to continue as we go forward. In fact, demand was higher in Q1 compared to what volumes we did. Because of global chip shortage, almost 15% to 18% of the demand in auto engines could not be fulfilled.
That's wonderful. My second question on the aftermarket side, there is a big opening up happening all across, so what kind of growth you expect in this year?
So, again, Rajesh, in the aftermarket side, what we saw in last year's Q3 and Q4, things have started picking up and that pickup continued in the current year's Q1. So the loss what we had seen in last year's first 2 quarters because of COVID, that we are not going to see in financial year '23, and overall, we are seeing strong momentum. Considering the seasonality between Q4 and Q1. Still we saw almost same revenue in Q1 compared to Q4, and that augurs quite well for our aftermarket business. And from here on, we see the growth continuing in the coming quarter.
So will it be a double-digit kind of growth this year or it should be, right, because we had 2 bad quarters last...
Rajesh, we'll not be able to give specific numbers, but as you rightly mentioned, in terms of the overall market it is opening up. And if we don't see another black swan event coming in, in form of any other kind of pandemic or virus, et cetera, I hope this momentum should continue and that should lead naturally to the growth numbers that you are talking about considering we had 2 quarters loss in last year.
And lastly on the 2-wheeler side, did we gain market share in this quarter, or how did that play out? Was the volume growth higher than the industry?
Yes. So if you look at our Investor presentation, we have declared -- so as for the Vahan data, we had close to 15.2% market share and that's almost 200 basis point gain compared to the previous quarter.
The next question is from the line of [ Jain ] from Shree Sampann Assets.
Congratulations for the new investments which have been brought in and a good performance. Last quarter we had discussed about new variants being launched. So any time line for the new vehicles to be launched and what is the way forward we look for when we see next 2 years for the Ampere?
Yes. Thank you, Mr. Jain. As we had mentioned, we are working on as part of the fundraise in terms of bringing new products. So 2-wheeler, see, we are one of the few people who work on 2-wheeler plus 3-wheeler, B2B and B2C. So we are working on a couple of products, both in the 2-wheeler and in the 3-wheeler segment. 2-wheeler, you'll see us naturally progressing to the higher speed kind of market and in the 3-wheeler, you will see us progressing towards -- across the fuel lines and into both B2B and B2C segments, yes. So some of the fundraise is helping us fuel more product, more product innovations, and between now and the end of the year we will have some launches, and as we get closer to it, we will talk more about it.
Okay. And can you share some -- put some light on the arrangement with Bounce Mobility?
Bounce Mobility? Sanjay, do you want to talk about that at a high level? I think you...
Yes. So the arrangement with Bounce Mobility is on the battery swapping area, that's the platform that we are working with them. We're trying some vehicles. We've given some vehicles to them and we're looking at a battery swapping platform with Bounce for mopeds. So that's the arrangement. If you want more details, then we can take it offline. Is that all you wanted or some other --?
I think Sanjay in interest of time, that would be good. We can get into details in the one-on-one meetings or in the Analyst Day.
There is a follow-up question from Anubhav from Prescient Capital.
Sir how is the geographical breakup of, like, Ampere's field? Like, is there a particular region we are stronger in?
Sanjay, you're pan India now. All right. We started off -- I'll kick it off and then Sanjay will add. We started off, obviously, being strong in the South by nature of where the company was born. But very glad to report today we are pan-India, not South, East and West. Our dealer distribution, our market sales, our penetration all depict that. Sanjay, do you want to add?
So we today have close to about 288 dealers. That was the active dealer numbers, and that's -- as Nagesh said, it's pan India, across all the 4 regions, we are extremely well represented and across all the states of India, political states of India, we would have an active dealer -- actually many active dealers at this point of time. So if you want to just know the region-wise numbers that are there, broadly about 20% of our dealers are of this 288. So about 50 dealers are in North, about 30 are in East, and about 60 would be in West and about 120 would be South. South, as Nagesh said, it was the region from where we started. So just to give you -- so it gives you a fairly good understanding that we have a very high number of dealer penetration across the country.
And sir, is financing an important aspect for like customers for EV 2-wheeler purchase and do we have some financing tie-up with somebody?
Yes, so let me take this. In terms of overall financing penetration, we have seen that improving and for Ampere now financing penetration is close to 30% overall. And we have tie-up with most of the well-known financial institutions in India, including Greaves Finance, who is also driving that overall financing ecosystem in Indian e-mobility sector.
The next question is from the line of Karthik from Suyash Advisors.
Dalpat had talked about supply chain being currently around the current -- first quarter run rate. Just wanted to understand if you had to get to, say, a number like 200,000 on an annualized basis, what would be the biggest constraint today? Can you also talk about the current cell security? Some clarity on that could be helpful.
So Karthik, on the overall supply chain, today the critical parts which are specific for e-mobility or electric vehicles, the ecosystem is still developing. So in terms of powertrains, battery management system, as you know -- and global chip shortage which is a well-known fact. So these are some of the elements which are having constraint in terms of specifically designed products that are required for Ampere. We see these constraints to remain in the short term. We may not be able to have the entire production in line with what is the total demand in the market, but that should get sorted out as we see this geopolitical situation easing up. And hopefully, with that, at least the global chip shortage and the battery management pack-related issues should get resolved in the coming quarters.
It has improved. So if you see compared to last 4 quarters. overall, things have improved significantly, but still there is a little way to go before we see the overall constraint getting removed.
Second question, Karthik, I could not get it.
I was asking you, what is the current line of sight for cell availability, 3 months, 6 months? What is the current...
We have a supply chain plant for 2 quarters in advance. So in terms of our tie-ups with the global direct suppliers, et cetera, we have 2 months -- or sorry, 2 quarters of planning and that's the kind of visibility that our manufacturing and supply chain people have. Obviously, that is not as per the 100% of the demand, but still we are improving on fulfilling the overall demand cycle.
Sure. And one question in terms of the new partner who has come in, can -- has any business plan been crystallized, are there any details that can be shared currently or should that wait for a later day?
So Karthik, some of the details we have already been talking about and you are seeing that in the numbers as we are looking at the growth going forward. We are also going to talk about it in more details as we go forward, and you see, we as a company don't give forward guidance in particular, but you will see the trend becoming more and more clearer now.
The next follow-up question is from the line of Raj from Inven Capital Fund.
I'm [ Roshan ] from Inven Capital Fund. I wanted to know about the business model of Greaves Technologies. And my second question is with your strong technology, when will you be number one in sales?
Okay. So Greaves Technologies is our engineering services division. They do a lot of engineering work in terms of -- for global MNCs, both in India and outside. Right. So it focuses on our strengths and we are continuing to build that capability. And by the way, in fact, some of them do help Group companies also on a project arm's length basis as and when Greaves Electric Mobility or any one of the other divisions need help. So that's kind of where the thought process is. So currently it's an enabler or it's a smaller business for us.
And in terms of your other question, one is, I believe, when do we become number one, I'm assuming that is on the electric mobility side. So clearly, the way we look at this is, this is a marathon and we got into this early, we saw the trend early. We're going to focus on doing the right things in terms of understanding the consumer, the market, the products, the indigenous product development, all the way -- and what I mean with that is from design, styling, all the way to manufacturing and supply chain, bringing in supply chain partners. So are we doing the foundational stuff right, are we focusing on technology moats, I think the answer is yes. I think the outcome will follow and I'm not going to comment on that.
The next question is from the line of Gotham C Jain from GCJ Financial Advisors.
Good numbers. My question pertains to in E 3-wheeler, your -- sequentially volume has come down significantly. Was this one-off or can you just highlight what was the reason?
Yes. So Mr. Jain, I think this was a question which was also answered earlier. We saw some of the factors which were specific to Q1 and that's not going to continue as a trend.
And can you give some guidance on your E-2-wheeler sales for next year, what are your internal targets and what your capacity will be after 2 years?
So capacity we've already talked about. We are now at 20,000 per month or 240,000 per year in single shift. With the increasing shift, we can increase that particular part. So that gives an indication of what is the kind of demand that we are looking at in future.
Okay. And what is the order pipeline? I mean, do you have some waiting phase or it's like...
Yes. Like Sanjay mentioned in the earlier question, there is a 2 to 3 weeks-plus of waiting time line as of now.
There is a follow-up question from Jyoti Singh from Arihant Capital.
Sir, my question is on the new launches side. So if you can throw some light who will be the main supplier for Greaves Cotton for the new launches in the auto and service front?
So I think your question is on supply chain. So Jyoti, I think we have supply chain partners who are very credible and capable, I mean, and we are very encouraged to now that lot of -- more capable suppliers are coming on as we get into newer and newer products and the volumes are improving, right. So -- and it's a myriad of suppliers across the -- some of them, the traditional automotive Tier 2 --Tier 1, Tier 2 suppliers, and some new-age suppliers who are getting into this industry because of the focus on software and electronics.
So we got a combination of both. I don't want to get into specific names in this call but enough to say that we are working with supply chain partners and looking at them as strategic partnerships in some cases, and in some cases looking at where we own the design and we work with them for manufacturing. We are doing both.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Nagesh Basavanhalli for closing comments.
Thank you very much. We appreciate everybody's ongoing interest. We are certain that we can ascertain our position, due to the interest from our customers, our products, strong emphasis on operational efficiencies, and robust distribution network. Thank you, everybody, for joining in our call. If there are further questions, please do get in touch with our Investor Relations Advisor, Churchgate Partners.
Just a quick note on an upcoming event. You must have gotten or there will be an invite that will be going out soon for the August 25 Investor Day by Greaves Cotton, where management will be available to take detailed questions and present some of this in more detail. So I welcome seeing you all or answering your questions at our forthcoming event. Thank you very much for your time. Have a wonderful weekend.
Thank you. On behalf of Greaves Cotton Limited, we thank you once again. Stay safe. With this, we conclude this investor call. Thank you for joining us.