Tata Motors Ltd

NSE:TATAMOTORS

Earnings Call Transcript 2023-Q1

[Sneha Gavankar, General Manager, Mergers and Acquisitions]

Okay. Apologies for the delay. Welcome to Tata Motors Q1 FY '23 Earnings Conference Call. I'm joined today by Mr. Thierry Bollore, CEO, Jaguar Land Rover; Mr. PB Balaji, Group CFO, Tata Motors; Mr. Girish Wagh, Executive Director of Tata Motors; Mr. Shailesh Chandra, MD, Tata Motors Passenger Vehicle Limited and Tata Passenger Electric Mobility Limited; Mr. Adrian Mardell, CFO, Jaguar Land Rover; and my colleagues from the Investor Relations team.

Today, we plan to walk you through the earnings presentation followed by Q&A. [Operator Instructions]

I now hand over to Balaji to begin the presentation.

[PB Balaji, Group CFO]

Thank you. Firstly, thanks everybody for taking the time to join the session. And as customary, we'll quickly cover the presentation by assuming that you're going to be on a first look on it is, and obviously, spend as much time as possible on the Q&A.

Regarding the safe harbor statement, you are well aware of nothing new there. Just again, a reminder to everybody that the way the numbers are being credit with consolidated new downwards into TM branded commercial vehicle anywhere in the world, Tata Passenger, Tata branded passenger vehicles anywhere in the world, Jaguar Land Rover vehicle financing. That's how the verticals are done, no change in that, just a reminder.

Thanks. Again, it's been another intense period for us, both in P&L and in JLR. And part of the we call out I would want to make is in terms of the importation of smart mobility solutions subsidiary for managing the GCC business of the Government of India and transport undertaking. And, of course, the EV portfolio continues to expand on the launch EV Nexon EV Prime. And JLR for the Defender 130 I'm going to talk about later come through this quarter, and we focus continues to deliver results for us. And the order bank rose to a new record of 200,000 unit.

Next slide, please, on the financials. Let me start by putting it in context that it'll be a disappointing quarter for us, and we are well aware of these numbers did not match our own expectations when we start in the quarter. Yes, there is a fair amount of challenges on semiconductors and COVID-related lockdown that we have to contain with.

But at the same time, the one that really cause put the ramp-up the slower-than-expected ramp-up that we had in Rang Rover and Range Rover Sports. And I'm sure Thierry and maybe we are going to talk about it in the coming plan.

But as we ended the quarter and we entered into Q2, we believe we are in a strong and therefore are quite confident of how the current quarter is going to land that is Q2. But that's for the future, but let's what we delve into Q1. Growth of 48% in more sales and about 8% revenue growth and the PBT before exceptional item of about INR 1,500 crores. And there are a lot of mention related matters, but Adrian will talk about in the INR 5,000 crore loss.

EBITDA deteriorated by about 90 bps year-on-year and EBIT percentages - an EBIT percentage of about 60 bps improvement compared to last year same time is something that would have been better. And FCF on outflow basis about INR 9,800 crores, most of it is working capital, so I'm not particularly worried about it.

Next slide, obviously the number also got impacted by the revaluation of FX and commodity hedges in the highly volatile FX and commodity markets.

Next slide. So growth, if you look at it, we grew about 8% in revenue terms, volume and price contributing roughly and translation took the way a lot of to basically from pound sterling, depreciating a lot vis-à-vis Indian rupee. And therefore, that's what we see at the 4.3% of the translation.

The profitability improvement, most of the cylinders fired in CDPB and the others. And of course, JLR took down the big profitability because of their challenges that they had with ensure turnaround in this quarter.

Net automotive debt went up from INR 48,700 crores to about 60,700 crores, almost entirely explained by working capital and about INR 2,000 crores of underlying external debt that is there, to INR 34,800 production reverse once the profitability improves.

With this, let me now hand it over to Adrian to take you on JLR in a bit of detail. Adrian?

[Adrian Mardell, CFO, Jaguar Land Rover]

Yes. Many thanks, Balaji.

Next slide, please. Okay. So this is our six quadrant, as Balaji said, disappointing quarter for us in Q1. Retails were balanced the same. So as you'll see in the presentation, we have no concerns about demand and retail levels at all.

Revenue was down. Wholesale volumes were down 7%, and that's reflected in the revenue particularly because of the model changeover in places Range Rover and an Range Rover Sport in the quarter. We had a particularly weak mix within that revenue base.

And that really is the story for the losses that you see there, the 500 million. The EBITDA 6% and the EBIT minus 4% in the quarter. Free cash flow was minus 769. That's not a number we're proud of, although it is the best quarter 1 result for five years, incredibly but we can do much, much better with that in Q2 and going forward with certain of that.

Next slide. Okay. So these are the key performance highlights. I've mentioned some of them. Order bank Balaji mentioned, up to 200,000 units, we will take you through that. There is a pensions benefit for the reestablishment of our future pension liabilities and an inflation level of CPI rather than RPI. That's excluded from that loss before tax because it's non-EBIT related. A refocused program continues to go well. I will take you through that. And the liquidity continues to be strong, 3.7 billion cash on hand and a 1.5 billion revolving credit facility from July 2022. So total liquidity 5 billion plus.

Next slide, please. Okay. So this is our retails under wholesales in quarter 1 by brand. We've broken this out by the - we used to refer this to nameplate families. We're now referencing this as individual brands. Retail is at the top there, you see a flat and they're pretty much flat across all of the brands. Obviously, that's retails being fed from dealer inventory. I do have an inventory slide later, and there's some things on there but hopefully, you'll see is this starting to turn around for us.

Wholesales. This really lands on the point about our Range Rover and our Range Rover Sport. You can see there in the Range Rover brand. Wholesales are the lowest quarter-over-quarter versus last year. That's where we've fallen because we haven't been able to build up the production in that new facility. I'll talk to that later as well as fast as we would have wished.

And that's really the story behind the total wholesale reduction in the quarter. Defender was stronger than previous quarters than last year as that plant in Nitra is getting closer to a level of production than any of the plant at the moment.

Next slide, please. And this is the same data but hit now broken down by region, regional sales, retails again at the top. And what you see here, which knowing our profile of what we sell here is corroboratory to the last page, we've done weakest in our regions that are most reliant on our Range Rover and our Range Rover Sport because of our inability to ramp those products up at the speed we would have wished.

So North America is down significantly heavy Range Rover and Range Rover Sport region. So is China down heavy Range Rover, Range Rover Sport region and also snippets of overseas. We've done better actually in the quarter in the regions that take the other products from other plants, i.e., Q3 in Europe and the U.K.

And the wholesale data you see there is while I won't go through that all in detail is a version of what I've said before. You see China down again because of that Range Rover, Range Rover Sport numbers there. Electrified data are up 2% on previous quarter now to 66%, [indiscernible] date was down slightly, and that's because of the absence of the Range Rover, Range Rover Sport for PBS also.

Next slide, please. Okay. So this is our walk from last quarter - sorry, from quarter 1 last year. And it's telling you what you should expect to see the significant adverse is on both volumes down 13,000 units and mix within that mix, there's actually a negative of 170 for Range Rover and Range Rover Sport and 50 positive for Defender.

Our VMA continues to be at historical lows and the pricing actions we took earlier in the year are starting to come through. Inflationary pressures are similar to what we actually indicated in Q4. We continue to have bad news on capitalized engineering. Why? Because our new programs haven't yet come to maturation expect that to change as we go through the balance of this year.

That's worth about 1.5 point EBIT. Next. And then the bad news on revaluation because sterling fell to 121 at the end of the quarter. The bad news on commodities because actually commodity rates for aluminum palladium, the ones we hedge most actually also far as we went through the quarter.

Obviously, both of those two things are good news for our operating model, and you can see operational financial exchange, particularly on the dollar was good news in the quarter. So overall, that walked us from the 0.9% EBIT to the minus 4.4% EBIT. And again, this excludes the pension exceptional item, which I referenced earlier.

Next slide, please. Cash, where are we on cash minus 769 million. Most of that, again, is working capital, but the constituents are slightly different. And the inventory has actually increased, which obviously, from a cash and a working capital perspective in quarter is bad news. But from a starting to build back the health of the pipeline and starting to build back parts inventories, which, of course, will help with our build issuance going forward. That's where that money is being consciously spent this quarter.

Underlying cash is actually minus 150 million. And again, that points to the weakness and our sales profile, particularly to Range Rover and Range River Sport. Next slide, please.

Okay. Our breakeven remains pretty much the same as was last year on a full year basis. 80,000 to 85,000 units in a given quarter. It was - even though we had a weak profile of sales in quarter 1, as I've explained already, that breakeven point was still 80,000 units.

We actually did build more cars than we actually wholesale, and I'll take you through that in a moment. We ended up by building our inventory work in progress by about 8,000 units, which we will complete in quarter 2. So that breakeven given the conditions we have is still really, really low and really, really strong.

Next slide, please. This is the investment a little bit lower than I was expected by about GBP 50 million. You can see the point there on the left-hand side, the amount of engineering expense we are capitalizing it's only just over a quarter total engineering bill. And previous year, you can see it was 40%.

When we take our new reimagine architectures, EMA and Pantera through their approval processes later in the quarter, strong early next quarter, then that will start to lift to a normal level I've given you before, 50% to 60%, and that's worth 0.5% EBIT. Capital investment is lower this time last year, we're finishing up our investments and our facility for MLA.

Next slide, please. Okay. So let's talk about where we were on supply and particularly on production in the quarter. I'll give you a second to start reading that, but I'll hit the highlights. So look, we did have some chip supply constraints, particularly earlier in the quarter, but particularly relevant to the build-out of our old Range Rover Sport.

That did delay the completion of the old Range Rover Sport. Many of those units we did actually need to build into WIP, which we're clearing through actually some of them this month in July. That did have an impact on the transfer of our labor into the new facility, which builds the new Range Rover and the Range Rover Sport.

So there was an impact on semiconductors, with a particular supplier and the work we've done with our particular supplier later in the quarter has meant we haven't had any further disturbance from that supply source right through to the shutdown period at the end of July. It shows the long-term contract work we are doing is actually starting to show benefits.

We are seeing the light at the end of this very, very long tunnel here, particularly on semiconductors, we feel. And then the rest has been all about our ability to ramp up two new vehicles on an all-new architecture in an all-new facility with an all-new body shop and of course, a workforce that needs training and an added shift, by the way. We have added a third shift into that facility because of the huge demand that we have for these products within our order banks.

And is - so those challenges are actually quite normal for a changeover point, but they have been exacerbated by the semiconductor point I mentioned earlier and also the COVID lockdowns in China, which did impact the ability for us to consistently build units week by week within that facility.

A lot of that is starting now to become behind us. I've mentioned the partnership agreement with our key supplier, which has meant no shortages of semiconductors from that source for the rest of the quarter and through the first three weeks of July. Our ramp-up is beginning, particularly on the Range Rover, which was the first vehicle and our production on that vehicle doubled as we went through the quarter from just about 500 units a week to just over 1,000 units a week.

So we're starting to see that increase ramp-up speed on the Range Rover through to July, that increased again to about 1,300 to week. So we really do feel we're breaking through on the Range Rover, and we now will go into that same process with the new Range Rover Sport, which may take a couple of months or so. And we're also seeing reduced impact from COVID lockdowns in China as well.

So just a point around MLA, the production of the new Range Rover, the production of the new Range Rover Sport, the improvements we've made over the last six weeks where we ended up in July at a much better place in April. Now with what we see in front of us, and we're now starting to see the capability to deliver 90,000 units to our dealers and importers in quarter 2. So a significant jump on that quarter 1.

Next slide, please. And the orders have kept growing. In fact, they've grown in this quarter larger than any other quarter, marginally larger than the quarter when we announced and showed the Range Rover in October last year. We've now got 200,000 customer orders. That excludes the dealer orders, of course.

And you can see there our three latest and greatest product offerings, Range Rover, the Range Rover Sport at the bottom there and the Defender making up almost 65% of that volume. They are our most valuable brands, our most valuable nameplates as well. So we have a super healthy order bank, a super healthy future revenue stream, and we're starting to break through the production issues, and they're starting to be light at the end of a very long tunnel on supply and semiconductors as well.

So a lot of that is not reflected in Q1. That's why we're really disappointed and as you can probably hear from my voice, but had frustrated about quarter 1 as well, but we are starting to see those core ingredients move in our favor into quarter 2.

Next slide, please. And we've also revealed a new member of our Defender brand family, the Defender 130, the extension of the vehicle are beyond the rear wheels. This vehicle will safely and comfortably occupy 8 adults. We expect it to be very, very popular in our U.S. and some Middle Eastern markets as well. And if you did notice, even though the production at Nitra is closest to a normal of the plant. Our demand in orders for Defender increased by 5,000, 6,000 units in the quarter. A lot of that was for this vehicle. So it's at an incredibly fast start and appeal even though it was only revealed a month before the end of the quarter.

Next slide, please. Okay. Refocus. Look, we did 1.5 billion last year. Even though it was a very thin transactional value quarter for us, we still did 250 million in quarter 1, that was broken down in three constituents. You've seen most of that data already earlier in the presentation. The net pricing value was GBP 120 million. That's a big constituent of it. We are starting to see labor and efficiency benefits within our agile transformation, particularly within the engineering fraternity.

Obviously, we're doing that mostly to ensure that we speed up the quality maturation of the delivery of our products, but of course, the unspoken within there is the cost of delivering them will be lower also spending less time and less people hours on it. And then the investment number, which was low for the quarter, and therefore, did contribute in this quarter, but I do expect that to be much, much less in later quarters. And I expect the other constituents to be greater.

Next slide, please. So inflation, we'll be talking about inflation. I'm certain for the next few quarters that we introduced this slide earlier this year. The same slide on the left. 12.5 billion in cost base, variable cost base, four significant elements within there, which are suspect to high inflation levels, labor, multi-cost semiconductor prices and energy, of course. And the balance between the pressures have shifted a little bit. We went into the quarter with aluminum at 3,500 per ton. We've come out the quarter with $2,400. Palladium came down as well $300. So it shifted a little bit temporarily perhaps from commodities and, of course, we're getting some utility energy cost increases, semiconductor cost increases and labor cost increases.

So the absolute number for the quarter versus last year was GBP 160 million greater. It's a little bit less than I was expecting actually in the quarter. I was expecting up to GBP 200 million. And some of these headwinds are stronger and some of them are starting to alleviate. But I think it's reasonable to assume we will have quarter-over-quarter data of this type of scale and size as we go through at least the next two quarters, not certain about where we end up in Q4 yet.

And our refocus program we're very, very confident will more than offset and almost did - if I did offset even though not fully in EBIT, the on cost and inflation as we go through FY '23. So I'll repeat two or things here. One is we're very confident about the overall scale of the program. And what we will do this year, we're confident that it will offset.

In total, the absolute amount of inflation. And as we go into the second half of the year, we expect an EBIT offset also as most of the inflationary pressures we're seeing is then overtaken by the other things that we are doing, including the pricing actions, which will come through later in the year.

Next slide, please. This is an important slide, although it doesn't look it, right? So this is the health of our end-to-end pipeline from build to ship in those vehicles. And if you take you back to January '21, we've talked this two or three times before, but I wanted to talk specifically today.

If I take you back to January '21, that's as close to a normal healthy pre-semiconductor pipeline that we have. And it increases and falls down because of the aberration called March in the U.K. where we build units and then we sell them. So if you draw a line versus the first three months, you'll see pretty much 60,000 units in the dealer pipeline and 40,000 units in our pipeline, 1,000 total units would have been a pre-semiconductor normal environment. And from there, our order bank is about twice of our dealer inventory.

That's what we would have expected before semiconductors. WIPs about 4,000 units. That's what that blue line lives. The WIP is a subset of the gray line called JLR inventory. We own the WIP we own the JLR industry. That's on our balance sheet. That's a part of the GBP 3 billion that you would have seen if you look at the balance sheet.

It really, really fell as we went throughout quarter 2. You will remember the quarter 2. They both fall towards the 30,000 level from an inventory dealer and an inventory JLR perspective. But our WIP also fell to about 2,000 units, right? So we were building cars, but very, very few.

We gradually grown both of these over the course of the next - last three or excuse me through to June. And there's been a significant uptick, as you can see there in June. So what that means is we are releasing more cars into the dealer network, and we are releasing more cars onto transporters, onto trains and onto ships, and they will turn into retails and wholesales at some point. And we do believe a part of that uplift is going to happen in quarter 2.

Now we did end up with 10,000 cars and work in progress at the end of June, 5,000 of those were Range Rover and Range Rover Sport, and I'm simply giving you more cooperator evidence to the real breakthrough here is in that facility at Solihull Range Rover, Range Rover Sport. That should have been 1,000, not 5,000, and we're starting to work that number down, including JLR shutdown period this week and next week, and we have high confidence those units would also be released onto those transporters, ships and trains as we go through August and into September. So we are a long, long way away from being normal, but this evident, so it's starting to shift back towards a more normal environment, which underpins our 90,000 unit projection for Q2.

Next slide, please. So one of the things that are in front of us, I've said them a few times already, right? We absolutely need to continue to make progress in our new facility at Solihull. We're very, very confident we're doing on Range Rover we can then repeat that product off the same architecture. Don't forget, in Range Rover Sport later in quarter 2. Our guidance is circa 90,000 units I've mentioned a number of times. We're very confident Refocus will be GBP 1 billion, and there is a plus there, by the way, I'd be more informative about and much of a plus when we talk in November.

Our full year guidance is still 5% and GBP 1 billion positive cash flow despite the disappointing and frustrating quarter 1, that does mean we need to break through in quarter 2 and delivering 90,000 units would be a sufficient breakthrough to underpin that number. And we will then need to break through again in quarter 3, and that's where the Range Rover Sport will come through strongly for us we do believe.

Our longer-term targets, of course, on Reimage, we rarely talk about these, right? Please don't think because we're not talking about that we're not doing them. We absolutely are doing them. 90% of our engineering teams are on Reimagined programs now. And those engineers were released from Range Rover, Range Rover Sport, which is why the capitalization is so low at the moment. So overwhelmingly, the focus and attention of our workforce is on future product.

We now have a much more concentrated determined full-time response to the daily activity, which you're starting to see us break through on and that has been added to again during quarter 1 because of the challenges we had in quarter 1.

Free cash flow. Look, I'm not walking away from the near debt number in FY '24. We have to break through in quarter 2. We are running out of time. We just have 21 months and that means from the end of June, that's an average GBP 200 million positive cash each month. This is still possible, but we now have to break through the speed and the confidence when we do breakthrough will underpin FY '24, 7% plus EBIT. And obviously, at that point, we'll be in a really nice plateau to talk to you about how we're going to walk to 10% plus.

Next slide, please. Balaji?

[PB Balaji, Group CFO]

To the numbers here. On the market share side, we had a - we dropped 42.5% for the quarter. And the key callout here is the shift away and more than a shift away to more shift towards the demand pool supply chain to ensure the market share gains are sustainable and focusing squarely on how we are working with the registration market shares rather than wholesale-led market shares.

So this is something that we are committed to. And therefore, this noise in terms of market share for a quarter or 2 will be there, but it didn't get us to a more sustainable pathway of simultaneous market share gains, optimal inventories at the dealers and, of course, lower levels of VMEs that we need to put in place. So that's the emphasis there. I'm sure Girish will want to talk about it subsequently.

Next slide, please. The key callout on this slide is a mix that you see of powertrains. We would want to watch the ILCV space carefully because we did notice the reduction in the CNG composition. I believe it is nice temporary nice as the prices of CNG was diesel arbitrage came down a bit, but let's watch it for a few more quarters before we can take any message out of that.

Next slide. Overall numbers, CD turned in a positive PBT for the quarter and on a year-on-year basis, revenue grew 107%. And obviously, this being a weaker quarter, you could see a sequential drop in terms of revenues. And EBITDA at about 5.5% and an EBIT 2.8%. We expect this is something that's now starting to stabilize, and we'll be able to build from here on as the commodities come up. So that is the thing on CV going forward.

In terms of the WACC, the P&L WACC, what you'll notice that we are stepping up SME in line with our plan to move to a more full-based supply chain. So therefore, working on retail leads. And employee cost of 200 people, basically just the beginning of the year when the number of reset bonuses for the year, et cetera. And what you see is the unrealized FX and commodity hedges we did lose on the rupee depreciation because the hedges on the exports did lose money. And this in turn get compensated by the dividend income coming in from a coming.

So overall, that thesis, the numbers balance each other out. But the other call-out I would definitely say is look at the line between realizations versus variable costs. This number if you recollect is to be at 540 bps. So most of the pricing actions have gone through realization to offset the commodity cost of gone through and therefore, we should start seeing this starting to improve here.

Next slide. Girish?

[Girish Wagh, Executive Director, Tata Motors]

Yes, Thanks, Balaji.

So some of the highlights for the quarter, I think the industry continued good recovery and double the volume over the Q1 of last year. Of course, the last Q1 was marked by the pandemic second wave, but nevertheless, I think good growth shown in Q1. The EBIT margin improved by 690 bps driven by the remaining growth has also the pricing and cost actions that we have taken and has also grown 240 basis points over FY '22 full year.

We continue to see a very good growth in our spares and service penetration, thereby improving the nonretail business revenue by 75% over Q1 of last year. And this is, of course, a good profitable stream for us.

On new products, we continue to launch 15 new products were launched along with 25 variants. And as all of you know, we also launched as electric vehicle in the quarter gone by. Some of the bright spots, and we've seen that the Tata Sentiment index, which we track every quarter is now almost at a two-year high in and intermediate and light commercial vehicles. Of course, this survey was done just before the first interest rate hike was announced. So we are keeping a track of this. There have been some softening of the sentiment after that, but I think overall, it remains very, very positive.

On the commodity side, it did show some hardening up during the beginning of the quarter. But towards the end, I think we are seeing signs of softening after a good upward run since second half of last year. Coming to the passenger segment. Finally, we are seeing a return of demand. So with the staff movement that is employee transportation to offices and factories back in place has also tours and travel and on specific opening of schools has led to good demand and the volumes grew by 60% over Q4 of last year, just the quarter gone by and almost 4x that of what we had seen in the first quarter of last year.

So very demand coming back, although this is still lower than the highest which we have achieved in FY '19. Balaji spoke about the retail push that we have initiated. And happy to tell you that we had the highest retails in small commercial vehicle and pickup in Q1 of any year or almost last 10 years.

Going ahead from our focus areas, I think our international markets, demand has been impacted especially in SAARC as well as sub-Saharan Africa essentially due to steep depreciation in the local currency, along with fuel price tick, high and of course, the Sri Lanka and all of us know about the political turmoil.

In this - in these circumstances, we are looking at alternate markets and products to see how we can get back to the required level of volumes for international business. I spoke about the retail acceleration and a lot of demand pull to ensure that we actually have sustainable gains going ahead, sustainable share gains.

So there's a lot of push on the digital yield generation. I'm happy to tell you that 20% of our volumes are now coming from lease, coming from digital in small commercial vehicle and pickup. With the interest rates increasing, I think we have continued our engagement with the key financials and trying to find out ways and means to see how we can support the customers in this environment.

We started the margin improvement journey towards the second half of last year. We continue to do that and as is being driven by both pricing actions as well as the cost savings and the fundamental margin has improved quarter-on-quarter from Q4 to Q1.

Next slide. Update on the new businesses. On electric mobility, happy to inform you that additionally 100 electric buses were delivered in Q1. So now we have cumulative 715 electric buses running on Indian roads and cumulative coverage of more than 40 million kilometers. So that's a good experience that we have at over multiple cities in the country.

We are also working on the fuel-side electric bus, as we've been mentioning, and the program is on track. And in fact, we had first milestone review with IOCL with whom we are working jointly, and this milestone has been completed successfully, and both the partners were quite happy in the progress.

We did foray into the last mile e-mobility on cargo side on the launch of SCV and we had more of understanding for now 39,000 units. We already started customer trials and towards the end of this quarter, we will also start delivery of products.

Going ahead, we also incorporated the a P&L Smart City Mobility and Solutions Limited as a subsidiary and operationalized 53 buses in Delhi - Delhi Transport Corporation. And as a part of the Smart City Mobility Solutions, which is the gross cost contract model or own and operate model, we are now managing 450 buses more than 450 buses and delivering more than 96% uptime.

And all of you we were declared anyone for the largest global tender more than 5,000 EV buses. And now we have received LOA that is letter of allocation from Delhi Transport Corporation amongst these 5,000 buses for around 1,500. We are engaging with the rest of the cities and where transport undertakings with LOAs for their share as well.

As an outcome, the revenue which this business has generated in quarter 1 is around INR 145 crores, and we are on track in terms of the revenue trajectory. On the digital businesses, [indiscernible] we are focusing on increasing adoption and active usage. So we have more than 235,000 vehicles now amounting to around 100,000 customers who are already onboarded. We are now initiating the minimum product to of our already being piloted with three customers. It will be launched in next month. We'll announce the user experience further. So this is based on the exterior expectations that we have captured from the customers.

And finally, our digital storefront for spare parts or as has been pretty well, continues to grow and has grown 26% in revenue over quarter 4 of last year. So that's in summary of about the new businesses.

Back to you Balaji.

[PB Balaji, Group CFO]

Thank you, Girish.

Just moving on to the passenger vehicle business. A follow-up on this slide is fundamentally around the powertrain mix, so what's the CNG numbers now increasing to 11%. EVs continue to grow astound at 7%.

Next slide. And market share of 14.3% and the EV market share continues to strong at 88%. Next slide. And from an overall financial perspective, we continue to do well on the improvements in profitability that we are putting through. So the business is now on a PBT breakeven after a long time and EBITDA of 200 bps and EBIT margin dropped 750 bps, pretty strong and likely to go further.

Obviously, for the - on a year-on-year basis, one other thing to watch out for the sequential SME pacing IPL came in, in this quarter that's a bit of a phasing issue that impacted sequential margins, but that's something that should take care of.

Next slide. On overall financials, both volume mix and realization is coming to strong, still about 30-odd bps of variable cost realization to be made up as we go forward. Stepped-up SME is strong and will likely to step up even further as we go forward. And overall, commodity hedges did cost us a bit of grief and that's flowing through the P&L that you see there in fact.

Next slide. Shailesh?

[Shailesh Chandra]

Thank you, Balaji.

So let me start with the Q1 industry highlights. So in Q1, the industry wholesale increased by 41% year-over-year as the semiconductor supplies improved. And the quarter sales were quite healthy at nine months and quarter. Segmental shift towards SUV further strengthened. It was at 40% and just continue to sort of share from 37% to 34% sort of intent in [ph] the last year. As far as Tata Motors is concerned, we continue to strengthen our market share and we have maintained the strength of the quarter-on-quarter growth market sales.

And while the PV ICE business grew by 103% with PV business grew by nearly [indiscernible]. The whole and production milestone we crossed the milestone of 133 and the last 12 month of the quarter, we also first and one of the major milestone out for a monthly sale of 45,000. As far as EVs are concerned, we posted the highest sales of 9,000 unit despite the space that we faced on semiconductors in the first half of the quarter and the market share has been very strong at 88%. The last several months now, we continue to be the number SUV in manufacture FY '23.

Next one has the that to further strengthened our supply side and we try to be another way in government of Gujurat board in Tata Motors than [technical difficulty]. As far as industry is concerned, we really see that for this financial year growth industry will grow nearly 3.5 million. EV demand is growing through e to continue to remain strong with a continued positive word of mouth of nearly 40,000 EV customers that we have today. As far as Tata Motors is concerned, our - at the start of Q2, we have a very robust booking pipeline and no channel inventory, which positive drive for quarter two demand for the SUVs remain strong. We have a very strong booking pipeline here also.

There has been a good traction of CNG, which continues. We expect the vehicle supply to improve with better semiconductor over growing in quarter 2. Our rural demand is expected to be strong on the back of good monsoon. And next one, which MACH [ph] we launched in May, has seen tremendous response and has augmented the EV demand and supplies are expected to increase in quarter 3.

And going forward, the challenges the way we see is that the high inflation and interest rates will start impacting the auto demand while there is no stress as far as Q2 is concerned, until the festive season, we don't see a consumer - we also don't see a sign as far as lengthening of demand is consumed. But given how the retail industry is getting impacted because of these factors, we have to be a bit watchful and post the festive season, we will witness a list of other industrial demand sustains.

As far as Tata Motors is concerned, we remain focused on large-generation activities with now our segment global and macro market are focus. We continue to enhance the supplies further with - as the semiconductor also gains and we'll pass back to cost effort. Back to you, Balaji.

[PB Balaji, Group CFO]

Thank you, Shailesh.

Moving quickly on to the cash flows slides like that flows straight into the Tata Motors Finance. Go to the next slide, so yes. So here calls out here collection efficiency starting to improve now at 98% for June, and therefore, GNPA will keep improving with every passing quarter and fully compliant with all the new PC norms that RBI has put in place, and both capital adequacy and liquidity remains comfortable. And that's way we should take that ROE from 5.1% all the way up to double-digits in the foreseeable future.

Next slide, so coming on to the outlook, key callouts, Demand remains strong, and we expect it to remain strong despite inflation and geopolitical situation. Obviously, need to watch the Indian situation carefully. But right now, we don't see any cost of concern at this point in time. Chip supply is expected to improve further from Q2 and therefore pulling and added with the cooling commodity prices, that should also help in underlying margins and therefore, we aim to deliver the strong improvement in EBIT and free cash flow from Q2 onwards.

And one of the key things in this is what Adrian talked extensively about is GLR [ph] delivering a 90,000 on this side, continuing to improve market shares while restoring double-digit EBITDA margin will be the key imperative of PV for CV and of course, PV keep the show going and accelerate as soon as possible. So that's in a broad nutshell what we are working on.

I am going to take any questions that you may have.

[PB Balaji, Group CFO]

I already seen about 13-odd questions that have landed up already. Let me start. I think Girish first one is coming your way this from Sonal Gupta, L&T Mutual Fund MSCD market share is now down to 54.6% in Q1. Is there a level at which you expect this to stabilize and what are the risk that the commodity benefits are competed away in that CV business – commodity benefits are given away in the CV business?

[Girish Wagh, Executive Director, Tata Motors]

Okay. So first of all market should trend so I think over the past four years, we have been consistently growing market share in MSCD. We've seen some softening happening in Q1, but we are determine to get this back and on the back of various actions that we have, both on the demand generation front as well as launch of new products, I think we should be getting it back. So certainly not satisfied at this level. As far as the commodities are concerned, Sorry Balaji?

[PB Balaji, Group CFO]

Commodity margins are likely to be given away and due to intense competition in the month?

[Girish Wagh, Executive Director, Tata Motors]

So I think we have a comprehensive margin improvement plan running, which is working on both the plants, that is how do we improve the realization basis delivering more value to the customer. And the second thing is how do we keep on shaving off cost. And one of the cost benefits is the commodity reductions, which are likely to happen, we see how it comes.

[PB Balaji, Group CFO]

And also, Sonal, just to add to that point, if you recollect the outlook, we are specifically calling out reached double-digit EBITDA earlier. So that's clearly an imperative for this business.

Okay. Next slide, next question from Jinesh Gandhi on for JLR. Adrian, I think it was coming your way. How should we think about mix for JLR, considering ramp-up in Range Rover and Range Rover Sport, Defender, but also chip supply is expected to improve to mix further deteriorate over first quarter levels?

And the second question, do you expect strong and consistent increase in wholesale from second quarter from the 90,000 level the way signal. And lastly, in which line item does and effect devaluation unrealized commodity hedges get affected three questions?

[Adrian Mardell, CFO, Jaguar Land Rover]

Okay. Thanks, Balaji. So the mix was really weak in quarter one. Range Rover mix was about 8% of that 70,000 units. Our order bank is telling us between Range Rover and Range Rover Sport is 40% of the order bank there. So there's a significant improvement of mix that will happen.

Once we start to overcome those issues, we've referenced significantly in the quarterly results so far. So I absolutely anticipate mix not only to improve in quarter 2, but to continue improving through the balance of the year as those production challenges continue to boost. Do I expect strong increase in wholesale from Q2? Look, I expect each quarter to be better than the quarter before. That's no different actually to what I've been saying for the last 2 to 3 quarters.

I did expect that in this quarter also, actually. So if I had to pull a number on the data last in March, that number would have been 70,000 high, that is 70,000 mid and the difference would have all been Range Rover, and that would have actually started to shape the quarter much closer to the level of EBIT stroke cash loss. I was inferring on May 13.

So I do expect each quarter to be better than the past. I can see the data for the first 3 works. We are now building consistently above 7,000 units a week, and we're building consistently week on week on week. That will increase to the 8,000 units plus, which we will need in this quarter when we start building Range Rover Sports.

We haven't built Range Rover Sports for 6 to 7 weeks apart from a few units just in and try that. That will begin to happen post shutdown from the 8th of August. So we're pretty confident actually with what we see in front of us that the build will grow from 7,000 to 8,000 units a week.

We have 11 production weeks in the quarter that gets you close to 90,000 units, and we have 10,000 units in WIP, which will reduce. And therefore, that's why we're saying we think the wholesale number will be 90,000 units, which line item does FX revaluation, Well, it appears down the whole step. So it's significant on revenue, of course, as we bring all of the overseas revenues into sterling.

It's significant on cost, of course, because so much of our cost base is sourced overseas currencies around 55%, a lot in euros. But it's line by line. So if you take marketing costs, if you take marketing costs and within the marketing costs, which is obviously in the other expenses, we add up all of the foreign currency pieces. And then we have a big line item in there, which really covers our exchange losses. So it's down the whole stop.

[PB Balaji, Group CFO]

Thanks, Adrian. Yes next question also from Jinesh Gandhi. What's our capacity and capacity in the what are the scope increase capacity to debottleneck?

[Shailesh Chandra]

So we are pretty much operating at full capacity in Ranjangaon and Pune. We have some headroom in as far as the salmon plant is concerned. To further to debottleneck our capacity in factories and plants and we see additional possibility of 10% to 15% further debottlenecking. So, that sets far as the capacity and as mentioned and as you know, we are further putting on food.

[Unidentified Analyst]

And Shailesh and Girish your way are you seeing of demand from small fleet operators?

[Shailesh Chandra]

Yes so, few things I would like to say first sentiment index that we measure is at a high and therefore that is an indication of interest from both large as well as small fleet operators. Also, if you see the intermediate and light commercial vehicles, as well as small commercial vehicles, generally, the small or retail customers, single vehicle owners are the buyers for these vehicles, and these segments have grown more than that of fleets are no more than of fleets. So actually it was small fleet owners, single vehicle owners are still in the market, and not likely to see softening immediately.

[Girish Wagh, Executive Director, Tata Motors]

The point of inflation which I'll pick up Jignesh, we expect commodity things to come in second quarter, we do see commodity starting to pull up and you should start seeing this coming from the second half at the current images where off as well as some of the contracts we're putting in place start coming through. So let's see how it plays out.

[PB Balaji, Group CFO]

Next question is from Ronak Sarda, Systematix in specific headwinds on CV EBITDA margin as Q1 FY '23 production was largely similar to the Q4, coupled with softening RM?

[Girish Wagh, Executive Director, Tata Motors]

Yes, so I think two points I would like to make one is, of course, the scale impact. So the revenue has actually gone down by 15%, from Q4 to Q1, so that is one of the reasons. Second is the volumes have come off by more than 20% from Q4 to Q1. So this certainly has an impact on the on the - margins. But what I would like to say is on the back of the pricing and the cost reduction actions that you've taken, the fundamental contribution or underlying contribution margin has actually improved over Q4 of last year.

[PB Balaji, Group CFO]

Excellent, thanks Girish. Next question is to me actually on India keepers auto wins. Can you please take us through how the DTC order win will be accounted in the financial?

Okay, there are two things here one is the Tata Motors standalone and then there's a subsidiary, Tata Motors, Smart Mobility Solutions Limited. So there'll be first to be a sale happening from Tata Motors to Tata Motors standalone to the smart mobility solution. This will be considered a sale in the in the standalone books, but in the consolidated book, this will cancel each other out so the revenue will not be recognized number one.

Number two, this asset continues to remain in the smart mobility solution books. And we will have - and the collection will happen over a period of time as this bus start running and therefore will be a revenue recognition happening on the - in terms of rupees per kilometer in terms of the number of kilometers that it promises. And that will be the smart mobility solution's books. Again this is running costs operating costs et cetera will be set up again.

Over a period of time once this particular so obviously the next question will come to us. We'll keep building assets in your books, the answer is yes. And over a period of time once the collection history has been established, then you will be able to take this as a copy of books, you'll be able to send it down and there are multiple options out there.

And there are also other conversations that have been happening with the government to find a way to actually ring fence this at the inception itself, and those things will start seeing some results of a liberation in the coming here. And definitely before the next tender that comes out of the size, but present there are a lot of possibilities to how to actually like at the balance sheet and reduce the collection risk and the solvency risk at this stage.

[PB Balaji, Group CFO]

Okay, next question from Prateek Poddar on Nippon AMC, Prateek Poddar, Nippon AMC. JLR has spawned out a production of close to 90,000 units. Is it fair to say that the facility of build rate has guided in people is very high. Prateen, Adrian has covered this elaborately, therefore, I would want to repeat this. We just can you highlight some of the reasons for the same, which you've already done so.

And then PV division looks like the model cycle tailwind for us is over, although model refresh and lever. Is there a concern in the time that the market share loss might be a possibility going forward until we start with the new model cycle? Shailesh?

[Shailesh Chandra]

Yes. So I think you are well aware of the intensifying competitive landscape country. And on our share, I think we have 2, 3 points here to share on that, as you rightly mentioned that the cycle plan on the Cs and the in the cycle that you can see in 2 to 3 years starting next year. And that should not only help us sustain but expect grow to our market share. Also right now, the share 1 at which we are the headroom because we are still a pioneer the mark.

The second major hero for us developments. We have a unique position. We have a unique position where we have all the 4 powertrains, petrol, diesel, CNG as well as. And therefore, we are at the sweet spot of the good that we are going to see in the next 2 years as far as CNG and electric is concerned, so that should give us with the current models and with the expansion that we're going to see as well as electrification on within more CNG models, we will witness a growth in this segment because of our unique position of having multi powertrain option.

And as far as, of course, we have been adding these mix, but there are certain gaps in our portfolio, which we are in the coming years. One of them, we have already during, which is unsold, which we had vehicle why that is doing the has a need, but it is also going to come with There will be additional nameplate, which we've announced at the. So next of all these actions is going to ensure that we continue to grow our market.

[PB Balaji, Group CFO]

Thank you. Next question is also, your way. What's your backup plan in hybrids become effective from the India PV market?

[Shailesh Chandra]

So as a company, see, we are close to - will be closely watching our production takes place. But see, 1 thing we are very clear that the long term, the drivers of the auto industry as well as the and the issues that we have as well as auto industry is concerned as of us than in issues, PV is the long-term view. Therefore, as a company, we are going to remain focused on means.

Having said that, in the later part of the CK as the emission norms have become more stringent, there won't be a degree, of electrification that would require for. And therefore, as an organization will keep ourselves fit.

[PB Balaji, Group CFO]

There's also a question on price, and we launched really the price is similar to hybrids or a slight see the value per commission from PV can further improve hybrid import.

[Girish Wagh, Executive Director, Tata Motors]

I have no clue of the hybrid price frankly because we are going to now see hybrid - a new hybrid strong hybrid so far. We had been even lesser than my leverage, but we'll see how the pricing pans out but as you have already seen that we have launched our meetings, which are 20% to 25% price, which current petrol or diesel model, electric model. So it's already very competitive. I'm sure that this pricing will be contradict to a hybrid option that is going to come in the market. But let's see the pricing when it announced.

[PB Balaji, Group CFO]

Thank you. Next question is from Ritesh Goyal, CLSA. How much is your steel contracts pricing in Q1 higher than spot price? And if you pick the steel cost at spot prices, could the margins be higher? Girish, do you want to take that?

[Girish Wagh, Executive Director, Tata Motors]

If you're a fixer, yeah, so the only steel contracts are for a period of six months, but due to the recent volatility we should get through three months. So we if you have been doing steel contracts on a quarterly basis, I can tell you that the spot prices are much more volatile and generally higher than the contracts that we have with this team.

[PBBalaji]

Thank you. Next question, JLR Adrian, coming your away. Is it possible, Adrian, to sum up what was the margin pressure in Q1 that was one-off in nature?

[Adrian Mardell, CFO, Jaguar Land Rover]

Sorry, Balaji, carry on.

[PB Balaji, Group CFO]

Carry on. Adrian.

[Adrian Mardell, CFO, Jaguar Land Rover]

Okay. Thank you. Yes. So look, we pointed towards this. It was particular around the Range Rover and Range Rover Sport facility. We only built and wholesale 6,000 Range Rovers in the quarter. There's a significant dilutive impact in the margin. I won't give you the data, but your modeling should mostly point towards that data. So is it one-off in nature? Well, the binary impact of very low production on Range Rover and almost zero production on Range Rover Sport is absolutely which will progressively improve the margins will increase as well.

[PB Balaji, Group CFO]

The next question, we skip the other one. The second one is on production at which you've already covered extensively. Let's go to the one on bases. When does the adverse impact of hedges start affecting operational numbers?

[Adrian Mardell, CFO, Jaguar Land Rover]

That's already affected the operational numbers, Balaji. I think you went back to our walk, our EBIT walk and our profitability walk, I think it would have said that the operational exchange was 210. And the impact of those hedges was about 115 versus previous year. If I give you the rates actually, the effective rate in Q1 was about 128. Our hedges is in place going forward, just over 130. So on a quarter-by-quarter basis, we have got hedges around the 130 going forward, but it's not too dissimilar to the effect of Q1.

[PB Balaji, Group CFO]

Okay. So next question is from Raghunandhan, Emkay Global. For India business, can you please indicate commodity impact in Q1? I've already called out more at all. In fact, look at the things reducing versus realization. Realization was a variable cost. And you do see about a 30-40 bps still can be recovered, but we believe this will come off as we go forward.

As far as the e-buses, the company has won large orders, what kind of equity infusion is planned in the company that we own the e-buses that supplies over on a gross contract basis. Obviously, this will pan out over a period of time because the buses have to be delivered by until FY '24 onwards. So there is a fair amount of time in front of us, and we'll do it on a sequential basis.

And a lot of things through the equity and debt combination to get that right as well. So leave with us at an appropriate time, we share with you. This will not complicate the calculations on getting net debt free. So you can rest you still have to track the fact that this is asset heavy, and there's a lot of work underway to get that back.

Girish, coming your way. How do you see the impact to the industry outlook for this year? Share of CNG vehicles?

[Girish Wagh, Executive Director, Tata Motors]

Yes. So let me take the first one on MNS series. So I think this would be the fourth quarter when we've seen successive growth that has happened in MNS series. This is happening on the back of upfront infrastructure spending by the government using freight, freight rates, fleet utilization. I think most of the things seem to be following in place.

As I mentioned in the presentation, we are keeping a watch on true monitorables, one is the fuel prices and second is the interest rates and see what kind of impact it will have. But as of now, I think it appears that we see a double-digit growth in MNS series for the entire year.

As far as CNG vehicles are concerned, I think over the past three months, the competitiveness of CNG price has gone down significantly with respect to diesel, although the gas still remains. But as a result, you've seen that the CNG salience, which used to be around 40% in our ILCV portfolio has already come down to around 25% to 27%.

This is something we will also keep a watch on how the relative pricing between diesel and CNG plays out. I think as a company, we are ready for the portfolio either between diesel and CNG and ensure that we write the one which is required in the market.

[PB Balaji, Group CFO]

Thank you, Girish. Adrian, this is coming your way. A slightly different question on the production point. Has there been any change in booking on the catalyst turn rate, and JLR production rate on other peers are rising ahead of us, particularly this quarter when you had a challenge? And then the next question, I think you covered is about your data inventory and JLR been writing for the last two quarters despite order backlog and any impact on the incremental demand due to the global economic growth center?

[Adrian Mardell, CFO, Jaguar Land Rover]

Yes. Okay. Balaji, let me take the first one. Look, when you study those order banks, I think a couple of things are quite evident. The three nameplates, the U.S. product, including the Defender, of course. The orders for those three nameplates just keep growing. Just keep growing.

And there's several reasons for that. I mean, we're not building as many as we need to, of course, that's one piece of that. But there aren't many on the road either, and that means we anticipate that the orders for these three nameplates, particularly Range Rover, Range Rover Sport will continue to grow, and the risk of cancellation on those nameplates is very, very low.

I think there is a disparity when you look at the other nameplates we have, the orders for those other nameplates if you notice that data stayed pretty flat over the last 9 to 12 months, around 70,000 units in total. We haven't built to the level we can build there. So I think it's pretty clear that once we can build all of the Range Rovers, Range Rover Sports, Defenders, by large and both, then once we go to a normal level of production, we will need to stimulate demand in some of these other nameplates, the lower transaction value nameplates, the SUV2 and SUV3 sectors and also Jaguar and sedans as well.

But we are months away from that, we feel. Any cancellations we're getting are more in those lower value transacting nameplates, and there may be a link to question three, which is there, which is a subset and a part of that, but that's so clear for us because it isn't that substantial yet.

I think your question two about - why is dealer inventory been growing? Just think of our global profile as we build more Range Rover and Range Rover Sports, and we have been I mentioned earlier about the slide, if you can visualize the slide about where do we actually sell those. We sell those mostly in markets which are far away China, U.S. today. And of course, we own that inventory until that inventory is passed through ports of entrants in those markets.

So from dispatch from plants here in the right through to the point of receipt in Shanghai, West, East and West U.S.A. That's on our inventory. So it's actually evidence that those cars are on the way. That's why it's growing, and it will continue to grow beyond this point when we get back to a normalized level, perhaps in the 5,000, 6,000 units. So it's actually a healthy sign, even though it may not lock it when you read the call date.

[PB Balaji, Group CFO]

Thank you. Adrian. Next question is from Pramod Kumar, UBS. So Adrian, this is coming your way again. In case the transaction price for the new Range Rover versus the old Range Rover given the significant upgrade to the model?

[Adrian Mardell, CFO, Jaguar Land Rover]

No, I can't. Look, I think this real data will show itself in two to three quarters' time. We're only built 6,000 cars. We've got 67,000 orders, 80-odd thousands across the two, almost 90,000 orders. It would be a great - it will be a great question when we get to Q4. But at this point in time, early orders, the most - the richest value orders are the most complex and the most difficult to build. So there are some other ones which are still certain work in progress. Any data I give you a bit misleading, but it's going to be bigger, right? You know it's going to be bigger. Those transaction prices are going to be bigger and they're going to be moving with close to 0 VME. So going to be a really rich healthy part of our portfolio going forward.

[PB Balaji, Group CFO]

Got it. We've talked about the macro side, so I would skip that question coming your way, Shailesh, order and Girish, order backlog for India PV and PV segments.

[Girish Wagh, Executive Director, Tata Motors]

Yes. So I wouldn't add. It's is no order backlog there, but PVs are more relevant for.

[Shailesh Chandra]

Yes. So we have a very strong order book, as I mentioned in my presentation also. And it ranges - on an average, it's about 2.5 to three months of the average sales that we are doing right now. As far as the various models are concerned for PV, it varies anywhere between four weeks to three months. EVs at higher, especially for the Nexon EV MAX. The average waiting period would be 7 months and upwards.

[PB Balaji, Group CFO]

Okay. The next question is from Kapil Singh, Nomura. You've talked about recession risk, do we have order books demand, we've covered it. India PVC, commodity we've talked about. I think same with Gunjan, I think you've talked about all the points that she has raised in that CSL funding, model shares, powertrain and mix. I think we talked about everything. Just hold on.

Question from Satyam Thakur, Credit Suisse. Given the luxury - global luxury OEMs, including JLR, I've seen GBP vehicle rise significantly over the last six to eight quarters. Do you expect to use any benign commodity environment in certainly boost unit profitability? Or do you see industry using lower cost environment ahead support demand amidst the global growth concerns? Adrian, I think this is probably right up.

[Adrian Mardell, CFO, Jaguar Land Rover]

[indiscernible].

[PB Balaji, Group CFO]

The gross profit per vehicle, given the contribution margins have gone up with lower commodity costs coming in and more profits coming your way, do you expect to take it to the bottom line or do you expect to stimulate the one?

[Thierry Bollore, CEO, Jaguar Land Rover]

What we can see at the moment is that in our segments, the offer, the supply is not at the right level compared to the end. That's the first element that people needs to understand. So there is - we can see as far as we are concerned that the demand continues to increase despite we are increasing the pricing and just because there is not something in the market and because of the visibility of our products are such that there is a kind of magic happening here. An increase and increase at the same time because it's clear that our profitability per car is also increasing, and we do more than compensating inflationary impacts that we can see.

[PB Balaji, Group CFO]

Thank you. Thanks Thierry. I think we're probably arriving at the last question is from Priya Ranjan, HDFC MF. Shailesh, this is your question. Does it make sense for the company to think of an ICE variant of curve and the entire taxation structure gives us too much levy to price the vehicle within 500 kilometers range with at a similar price point?

[Shailesh Chandra]

Absolutely, it makes sense. That's the reason why we are making both ICE pillars or EV. I think there's still going to be a significant difference between the EV as ICE because here, the attempt is to keep the premium that have been keeping on the EV versus ICE to increase the range as we are able to take the benefit of taxation, as you rightly mentioned, at the same time, take the benefit of a battery reduction, which might happen right now, we are seeing a slight spike in short term as it keeps on going on by the time we launch.

We expect that we'll be able to deliver better range as compared to what the current EVs are. So therefore, it makes sense at different price points, you pick up demand for different customer segments. And of course, there will be customers who have - who are very touchy about certain powertrains. So I think we would like to give all the options to our customers.

[PB Balaji, Group CFO]

Thank you, Shailesh. Shailesh, with that, we come to the end of the Q&A session. I think first, once again, thanks for your time, all of you. I really appreciate it and also the probing questions. As we started off, we do end this quarter on a disappointing note. But at the same time, a very clear plan of action and a pathway in front of us in terms of how to deliver the rest of the year in a very strong way. And therefore, quite committed to the numbers and the targets that we put ourselves and also [indiscernible].

Thank you, and speak to you the next quarter on better times.