Q3 2021 Tata Motors Ltd Earnings Call
[music].
Ladies and gentlemen.
Good day and welcome to the Tata Motors Q3 earnings Conference call.
As a reminder, all participant lines will be in the listen only mode.
During the course of presentation, if any participant intends to ask questions. They can use the chat box option, appearing at the bottom of the screen to submit their question for this because all the questions will be taken up at the end.
Of the session.
Please note that this conference is being recorded I now hand over the conference to Mr. Prakash Bundy from Tata Motors, Thank you and over to you Sir.
Thank you Alicia and good evening everyone.
On behalf of Tata Motors warmly welcome you on what other Q3, FY 'twenty went to the conference call.
We haven't bid US Mr. Ghosn type of ship MD and CEO Tata Motors, Mr pay day below CEO of Jaguar land through it.
Mr of BB Biology group CFO Tata Motors, Mr Agent model, Yeah for Jaguar land Rover.
Mr. Guidi swab that you didn't come until they start the motors Mr. Celis turned it up then.
I think that'll make the land electric vehicle they start on motors and all of our other colleagues from the investor relation team.
Like all of US really started the season with a quick overview of the financial and business performance on the management followed by Q&A.
Well what do your ability.
Thanks for kind of show a cookie of warm welcome to all of you. Thanks for taking the time to attend the session.
I hope on the feel safe on the phone.
The like God of lifetime, all of we will try and keep the presentation shock run through the key highlights of it and then how about as much time of as possible for the Q&A as is possible.
Preferences of go to the next slide for the standard Safe Harbor statement.
Hmm.
It's been an intense period of activity for us Despite COVID-19 and the key callouts I would I would call. It go to the day.
Nobody can the business reached the in India reached a 4 million vehicles that's the.
The hashtag, we love you for million plant.
And then of course, the Nexon reached the 100 on for 2000, where he called what do you see on there the launch of the the legend the thought of the body is back.
And the this is the.
The twin brother at all for the half year of all at the same old make architecture of that comes through.
And in general the so called to the for the new defender because of being awarded the top of the economy and.
And the C DS of 'twenty on model year launches, which.
Which we can talk about as well.
And on the commercial vehicle side, the what you see of the picture of the 3000 of the $6 on vehicles that have been for the full for the articulated vehicles are quite the final day.
Thanks, Mike.
Our overall performance for them.
I'm happy that we had a strong all around performance of that came through.
For the global wholesale the dip the book, 6% year on year, but still revenue went up higher on behalf of the same and be beat the on a year on year basis off doing on 9% of 4200 of quarters of almost.
EBITDA of 14, 8% of 540 bps and EBIT at six 4% up 40 bps on the second quarter of consecutive quarter of strong free cash automotive cash flow as well.
With the thought of it but it does not cause an 11200 of course and the free cash flow of almost 8000 across all of us.
Strong performance coming through across the board. Thanks, a lot.
Components of this growth to prevent the talk about on the minutes.
The variable.
<unk> coming in from volume and mix were against Us.
Because of the lower commercial the weaker sales on a proportionate basis as well as channel decline.
Transmission, but the overall revenue growth for them.
The profit Liberty perspective, <unk> P M and and all of those also contributed so it has been a consistent value for your value creation happening across all parts of the business and that of something in the EBITDA that can be catching fix for it the same in.
In line with the deliberate plan a steady reduction of net automotive debt now down to 5050 4700 crores on.
The other kind of unfolds.
Yeah.
Thanks, Craig for Gosh.
Our overall debt profile of the strong all with.
But the liquidity is well spread on it.
Promoters of exercise the warrants true for 2600 crores is today.
And this was the increases are working share the thought of more of the group for the promote goes to $45 eight 2%. This is not there the liquidity the Racine Tata Motors Standalone, but that's the.
The thing that will come up in Q4 of us with in Jan on our strong liquidity of $6 4 billion for them to half in cash and one on 2 billion of nausea means that bond issuance that we have done as well of the TNT of malicious a bond issuance that we did the November all of gone through and liquidity is adequate and other.
The vast spread off.
Right.
Oh, let me hand, this over to Adrian to take us through the J a lot of performance Adrian over to you.
And the sheet good evening, everybody on the call. Okay. So the headlines of really strong as you see that across the full of taxes for under the 39 million depending on the percentage excluding the settlement.
Q3, EBITDA for gel for five years and true.
Free cash flow of close to 562 billion. The best Q3 cash flow in the history of Jaguar land drove us fix it.
The fortune to look below the headlines.
So there's no.
The pattern as we see here is similar to the passage of that give you saw actually last quarter.
Retail was high and for which over the course of but lower than the same quarter last year of course revenue would therefore be the sales when you talk of that profitability and in some detail on also free cash flow next slide please.
So the headline obviously on the said quarter drove the core set of improvements.
Particularly good quarter again.
In China, you would see.
When we break out of regional sales.
Year on year of almost 20% and we're also talking about inventories maybe for the last time actually we do they grew disproportionately.
Disproportionately at the end of March we are now named all of the corrections, we committed to make an impact in many places inventories actually lower than the ideal.
The point of profitability until two bad charge of plus two and one of the best when we get on to that slide you should start to note that it's no longer just structural cost reductions.
The improvements and reductions in warranty costs and variable marketing or sales as well as manufacturing efficiencies starting to come through into the program our cash <unk> CGM.
One of the disappointing element in the cohorts of we did lose.
<unk>.
As we true up the day here range position, particularly from the marketplace on the variable marketing costs and cash flow at the same significantly strong, including investments, which were lower than last year, but just to make 200 volume, but this is now much closer to our normal course for the level of index as you should expect to see.
Moving forward next slide please.
Okay. So these are the regional retail numbers again, you will see the same pattern as the.
The chosen numbers in North America in Europe, and overseas on a quarter over quarter growth, but not yet last year levels UK of course.
A particularly big months in September which was in the Q2 data and therefore the year over year on the U K is the expansion.
Comparator and in China, China again is grow the quarter over quarter. It gets significantly versus the same quarter last year of 19% versus Q3 last year.
Actually impacting the results significantly both on profitability on margin and on cash explain please.
Yeah.
And by net in place again on just draw at the defender from this page because most of the toxins I've told tabak a repeated on range Rover discovery of the pace.
The defender within the getting towards the normal on our side.
And the scale quarter until June of the policy.
As needed for the month.
It's a good barometer for US you can see we broken that level of cross quarter trading margins of healthy as well and kind of efforts slide later on the same could you share more details and then the electrified vehicles was 53% of the total and quarter three has some level of of black.
Dystrophication, we broke on that Dan by the.
By the ice petrol diesel and the <unk> and <unk>.
And then very strong for just the best for US as we closed on some of the deals we had lined up in the calendar year 'twenty, but notes that we have.
The proportion increasing now, particularly as we bring those 20 and a half in 'twenty one most of the of acreage to the market more of that in a few moments next slide please.
It has been a tree on.
The again to target levels on slightly below whether it be retail or inventory our own the inventory days supply. So we've done the job we committed to do and how did the level you can see that within the quarter and I do not anticipate this to substantially change either way going forward. The next slide.
Yes.
Okay. So.
Our profitability in the quarter. The first is the same quarter last year, a number of things happening here you've seen already on volumes were down substantially the wholesale volumes of course this would be like 27000 units.
We lost the caution for the end kind of jumped out of the substantial swing. It makes in this sort of mixed swing happened for several reasons of course, the markets of China and North America are more open and for active the non UK and then European regions today, and they significantly Scott on a range Rovers out of range of it.
For us not defend the projects.
The larger vehicles the significantly.
Significantly profitable vehicles as well so you see that within the mix of calling we also see the shift.
Towards land drove the from Jaguar, we've talked about that as we've gone through the course of this year.
And again, partially that's because of the regional how China and North America of that shift already exist in those two regions.
China JV as mentioned it was a disappointing quarter for the JV that spoke to do that but we did have a really nice quarter.
Clients, we talked about this last time, we did expect this quarter to be positive from a credit generation perspective, we're right, but as the results of that should reduce <unk> filing the reserves, which we had at the end of September by $55 million from 19 million tons to 35 million that's a one off.
Within the state.
Of course net pricing as we buy.
Starting to constrained the supply to the marketplace for the reasons we.
Previously told Tabatha for also for the reasons or expand on the.
The light test the symptom of supply and demand in many respects, we're starting to see reduced supply on the reduced variable marketing almost of the headline numbers were down to 5%, we haven't seen that level of BMA for more than three years. The underlying is about five 7% again sub six so really good.
Place for us to be at this stage of our evolution and we didn't actually released some residual value of reserves, mostly in North America and $36 million on a year over year basis the networks.
The the difference between the underlying.
On the headline numbers.
Nice progress on warranty again, we fit this theme of for the last four to six quarters. We did the same previously 4% was a good barometer of aligned for US you can see now we're quickly breaking through that line on the three 2% underlying warranty number particularly of the back of the twin teen multi of units.
At this point before we saw improvement in quality of <unk>.
It will be the best of all geared for at least three years for US as we are now making progress in terms of the consistency of the engineering within our vehicles and manufacturing efficiencies coming through cash flow on commodity cost for you would've seen yourself precious metals are actually increased.
And now obviously ex <unk>.
For the material we have.
Number of those which would be in the FX and commodities columns.
We continue of course to right size, our organization I know when the allocate spaces that we believe are appropriate on year over year and significant reductions in fixed cost of the styling and again, because we believe we're going to have type items on a much better place on aero the banks of healthier.
I've just spent less money the attracting people to buy the cars that you have so this is a part of the quality of sales and the health of sale, which we've consistently talked about and model isn't just absolute number at marvell is the quality of each sad and as a result of which of those costs of sales of all of it.
The exceptional cost of the redundancy and some pension true ups as well and if you look at the EBIT of two 7%.
In quarter, three last year of six 7% those one offs that was one of if we were to take those away of two to two and half of the underlying EBITDA was closer to 4% level that would that target on the alliance for pre Covid that we do actually think are operating on is back to pre COVID-19 level.
And we are benefiting from some of the adjustments from those two pool.
And the flow of Charles for this kind of on the next slide please.
Possibly the most dramatic slide actually free cash flow of $562 million as I've mentioned that as of quarter three record for Jaguar land Rover historically out of free cash flow will be significantly influenced by working capital movements positive or negative.
This was another positive quarter as we said it would be but it was less than half of the free cash flow.
The bulk of it this time was actually underlying again as the result of that very Sweet module, we had on China on North America, and the rich mix of starting to come through the cash problem.
Well, let's say cash profit after tax of two short term of billion patents is a record for many years, we have none of that in our Q3 and the investment levels of 600 and some of that's why it goes right hand side. So we do it again, what we said we would do perhaps a little bit more dramatically than we indicated a lot of that is.
To do with the mixture of sales, we had the which is great.
This quarter just gone on next slide please.
Yeah.
Okay. So investment of a little higher this quarter of 675, as we started to delayed and some of our investments of <unk> eight.
So this is probably at the higher level of of course, the number you see.
In recent times the times coming out of this we're still on track for the guidance. We gave you nine months ago and $2 5 billion patents investments. This year on this was $217 million lower the last yet and the 200 million cost and profit improvements plus.
Major pass the 400 plus million improvement on the charge plus program in quarter. Three next slide if you want.
Alright. So this one is starting to shape. The reason why we put this page in place just like this suddenly COVID-19 got in the way for you will start to see the.
You can see of the quarterly data when you look back 12 months, you'll start to see that the core.
For the current quarter of the better than previous quarters, If I take you from the start of charge right.
Right of all of those numbers were net free cash positive since the start of the program to support despite the horrible events of Covid. So I'm, particularly proud of the work we're doing on our turnaround program impacting our overall cash management and of course this underpins our commitment to get to net debt.
Over the next three years, we're starting to see the balance between gross debt and cash available to us, including the aussies even itself out of two we expect that to continue over the next culturally as well next slide please.
Okay. So a business update I'll quickly go in and say we took a couple of times already we've got a romantic romantic 'twenty will not be a series of product offerings. I mean, historically I think the industry has got used to a multitude of in mind. The change. This dramatic change is not mine of change.
People should really understand the these are just part of the as these.
These are significant vehicle upgrades and you can see the for US we got here and.
Cheerier wise.
The step the step change improvement Tribalized, Similarly, electrification wise with the PSP introduced the three of these vehicles and enhancing the discovery, we have almost a complete new range of products with very very proud of the work we've done over the last 18 months, particularly.
Two of Covid period.
So this is the backend of of hopefully towards the back side of this COVID-19. We produce these vehicles for the marketplace. Please find the way to test drive you will be wowed next slide please.
Okay.
So you know we've been positive on the end of.
Oh, yes, we slightly changed the lands of this that we can continue with the good messages of the Black line is re sales that continues to increase so in December we actually top six times the retails for the first time.
But I think even more dramatically you know all of the banks. This vehicle approaching three years three months worth of scale of more than 14 times the cost and the order bank as we've just started to release the defendant. The 90 availability. So I think it's reasonable to assume that <unk> units. The month is going to continue to be baked in.
On a month by month basis impact probably lifted from that level and the or the bank situation over the next several months will be.
Healthy so very very pleased with the defend the progress top tier current of the year went on.
European comp.
Normally it will continue to get dramatic reports and feedback from people driving it from reports is reported on a super job by the team next slide please.
Okay trials, the last 13 days of our electrified is the midstream we did.
Towards the back end of quarter three you can see them all of that underpins the 53% of Australia of retail in Q3 on some form of electrification, which also of course underpinnings of the fact that we was significantly.
Credit is generating.
The targets we've been set.
By the different countries.
Quarter three so it's a super on brain, the new product and electrification net of hitting the marketplace ex cyclists.
Okay and this is why on slide back in terms of the financial data, we still do end up for that.
The <unk> full year on problem 90 billion patents as I've said, we believe will fall to 35 million when it's finally assessed by the <unk>.
UK European authorities everywhere around us is great and we expect to be substantially greater going forward as well in total lost share across all of the regions.
On the compliance fines or acquisition of credits of Chow.
<unk> around 67 million pounds.
That's just ebbs and flows across the regions for those of the you're doing your modeling I think it's reasonable to assume that across the plan is we will have similar momentum.
Great.
The next excuse the acquisitions in 2021, but our intention is to continue to be compliant and that's what we of course will be working towards the that's the gold level ex.
Slide please.
The charge plus so by the end of September the post nine two points to volume tons of have savings on things you can start to see the mirror of the within our coach. The result, as I mentioned earlier, particularly pleased the cost the profits.
No longer just struck true cost of people and marketing support cost manufacturing warranty and BMA savings on <unk>.
<unk> seem to come through and we will continue as we go beyond into quarter, four and the pre owned without level of warranty at 4% to say that we still hold the barometer, but I think it's reasonable to assume then on warranty cost of the percentage of growth Big Congrats on the you will start with the 3%.
Plus going forward into Q4 and beyond with the quality of those 20 month EBITDA substantially improved as previously mentioned.
We'll hit the two 5 billion guidance, we said earlier in the as well all of that's pretty clear now on next slide please.
Yeah.
Okay.
The <unk> get done as we all get it was less for the late 'twenty for assembler some of the guests 29th.
As early as in some of that FID I suspect.
We did get the deal mostly we were looking for clearly the dirt.
Tariff imposition is not going to happen you would know there are rules of origin to ensure that have vehicles do not all subject to tariffs stay in on 55% of the content of ice vehicles needs to be UK European 40% Tvs in the 40% will grow.
Up through 2027, instead of changes, which will then be at the 55%.
And then the 12 month period of.
Phase and so that was the welding clean trades. This is Ben.
Deals that we were looking for the UK government of also actually put in place their own free trade deals to mirror the deals, which the EU has made and the UK where previously benefited from so mostly from the trade perspective, we pretty much ended up where we said we thought we would.
But actually did get done it takes a significant potential.
Potential risk away from a compliance perspective, I told at already know the side operationally, we shouldnt bypass the operational challenges here and then from the U K given the the perspective that you would say Brexit means Brexit well I think we're finding bureaucracy means bureaucracy actually there's a huge imagined customs.
And the paperwork required.
Teams of working lots of hedged across the end to end the supply change to make sure. We can get the parts to our operations on time and has been a bit bumpy in January of it probably will continue to be so in February.
The time these processes will be embedded into what we do for on the day to day basis of I expect.
The operational frictions that we have seen and you wouldn't have witnessed because theyre not at the borders we have actually seen will eliminate as we go through the course of this quarter next slide please.
On the more difficult one to assess of course is COVID-19, you'll know from of data perspective, where lockdown in the U K were partially shrunk significantly locked.
In Europe for lifestyle of North America, very little in China. This starts to explain why sales being stronger in China of course, and also sales have been stellar in North America and less so in UK and Europe, which starts to explain the mix of types of we had which were just.
Proportionally to those of the lung drove a bias heavy of national biased regions from an operating perspective, our sites still do remain open we've got on excellent record of health and safety, which we are very passionate about the protection of the safety of our.
Employees, obviously suppliers all going through the same challenges on due on the day to day week to week basis suffered from ethylene.
Not being able to attend work. So we expect this environment to continue through Q4, but we all hope that of course, we all pray as well at this horrible virus actually becomes eliminated with the introduction of the vaccine as soon as possible I know is what we all pray for.
All of US is where people can work from home of course, that's the safe place for them to be whereas the I'd cards, and we make our office is safe as well I myself actually work, mostly from the office and I feel very safe secure here.
And of course, we will always always observed the government guidance, we have lots of health and safety people, making sure that way of work into the highest standards folks within our production facilities and our plants and of course, we have registered the NHS sites and our main facilities in Jaguar.
Non drove for us while we're one of the biggest testers in the country actually in fact, I think with them the biggest tested for COVID-19 in the U K and.
I'm really proud of that.
So of the management team that is just an amazing response to these awful awful events next slide please.
For the outlook.
Thanks for retailers to be slightly higher than Q3 in Q4, we do expect a solid EBIT non.
Margin and also of positive cash flow in the quarter full year positive EBITDA investment sales I'll say for the fifth time less than two and a half of Penny and we've repeated that every quarter and if we if we do in Q4 for cash flow. We've done over the last two years will be very very close of that break even level.
I mean, the underlying all of them.
The challenges here is where the <unk> the stay out and whether we can continue to safely build for April and nobody can say both of those things were happening, but as we go through will happen for sure. Let's just go through January we manage against both of those challenges risks Covid Brexit reduce COVID-19 still here.
And of course, I think we are more compliant and of the product lineup over the next phase for the.
Electrification and mission.
And I should call as of course, our investment tankage add on investment day is on the 27th of February and we've got some really exciting news for you on the 27th of February which you'll probably want to ask about two days of Jerry Who's with me today will obviously the table.
It was the short term.
Next slide please and maybe the loss with each other.
Many thanks.
Thanks Adrian.
Moving on to Tata Motors Standalone.
The performance revenue at the.
Wholesale growth of 18% in.
Revenue growth of.
The thing.
With the PBT last couple of parts of the clinic costs.
Hobbies, what it was for the last quarter.
On a sequential basis.
The up by 17% of six eight and EBIT.
Keep it up.
With the 710 bits.
The improvement here.
The other quarter of solvency capital is coming to us with a weighted.
For the next slide on.
The little bit.
Overall volume and revenue the sequential directly is the strong and the C V. The activities led by the medium and heavies that see the.
With the higher demand coming in from an infrastructure of mining in E Commerce.
And of the kinds of passenger vehicles that the things are out there.
The very very strong sales momentum coming through with the new for the portfolio with the highest of let's say for the last sort of the quarter.
On the at the highest revenue and if that's true.
One of them.
The profitability EBITDA of six point because of the highest the delivered in the last seven quarters of net breakeven on the cheap.
And the gains will see the EBITDA of 8% of adult opinion the.
The additional levels of 10 11 net.
To be the getting day with significant improvement in margins in the call.
And of the kinds of fees of the highest EBITDA.
The loss of tenure with.
The other improvements of three 8% on dental.
The particular amount of point, which I picked up in both the makeup of the PZ that true.
Cash flow profitable on the cash savings book, they've committed to solve all of the savings for the year. We have already delivered for my thoughts on 100 and confident of the living with the meeting as well.
Moving ahead.
Where did the the money come from.
The busy chart, though I need the path a bit explain what's happening within the category of the mix of the pooling. So because most of the wasteful spending more of an interest in the United team for that.
Actually starting to help on.
With it back on the way, they're selling more of the heavier than the.
On the next one.
I can give you of selling more passenger vehicles commercial vehicles on the products that can be calling up the other way on.
So that's part of the dynamic that's playing off of solid improvement of realization as.
As well as better volume and.
The pricing because of the ones that are leading it pretty tight control on the fixed costs.
Of the ones that are helping nothing COVID-19. So therefore ask with the E book coming.
Coming back you will start seeing the sort of thing even for the.
Okay.
Okay.
The cash flow again, very happy with the type of the business is not funding expense so the.
Cash profit after tax is now higher than the investment that they are putting in place and that's part of the working capital and send them away for the few of you have somebody on the.
That's been more just cycles of the city.
The data that was not true and we are sitting at the board minus 15 days of support we need to get to.
So therefore.
We have we are pretty comfortable on the working capital of the pieces of cash is coming out of the growth is coming back into the split the business.
The cash and the likelihood of warrants given the cash coming true.
Moving forward.
The investments that quite 47 of course for the year lower than lot of people by 7% growth compared.
Compared to the calls on kind of both of it also on the proton.
We are now after the little bit the polls on 850 cross the man who's the additional demand coming in from a passenger league for and therefore that is something that would be the dynamic of the advantage going forward of it.
On it.
The slide on the bulk of the bipolar.
I talked on one of them growth.
On the net setup for us to be up slightly from other people.
But on the working capital sales will exceed the constant currency would deliver the therefore, the 6000 bill get comfortably.
Go ahead.
On the commercial book.
Oh, the market share for a bit sequentially Gui who's on the cumulative three months six months of them Mike.
The feedback.
Let's see the city at the bottom of type of thing.
Maybe of sharpening pooling as the.
Inventory levels sort of lifting small commercial vehicles ultimately improving the does not include the on most of the 3900 weak because of this sort of the.
For the state.
For Life Corporation.
That will come up in Q4, because the revenue recognition that's the.
And I suppose of living in the four we've taken a lot of market share of it.
Otherwise, it's sort of been sitting at almost the.
36%. This is one of my sense of it thinking about 35 per day.
And for this will continue to improve further as the commercial vehicles market share coming back.
As the year is progressing.
Right.
On the financials of an important one I'll talk a bit to explain what is happening on.
The wholesale for.
So we are down 8%, but on.
Yeah.
The EPS it looks like the optically the adult 23 per cent.
Drawing attention of the absolute number of leases the sport.
The connected he's talking to the other dealer inventory for their quarters broadly the same so that is more towards the producing.
Producing they're able to put all of that we're able to retain the following months of the nothing happening as part of wholesale retail book.
We're still looking on waiting for the channel inventory.
As far as revenue that's plenty of notice of the wholesale donate per se, but revenue was up almost 21 per se the distance to the significant pickup on realizations happening after the b of six price increase as well at the lower via means the bureau of putting on them. So even though volumes may not.
One of the spin off pick up the tunnel was on all starting to move quite fast.
And that all goes well in terms of all of our operating leverage going forward.
And this is something for us to keep in mind, So we shouldnt get locked into just one day.
The very different dynamic happening on revenue is picking up for them.
On the EBITDA of about 8% I think the terms of the double digit and therefore that's true.
The go forward the tuck ins.
Of the direction and the EBITDA.
The also starting to improve.
Paul.
Let me hand, it over to the beauty used to give a quick update on the flattening Trish.
Yes, Thanks <unk>.
So.
Speak about.
For the market thing for us.
So the industry grew by more than 40% in Q3 of Q2.
Most of the key move oil holds 50%, therefore outpacing the industry growth.
There is the broad based on the level, which has been seen if you look at <unk> Suisse.
The revival of happening due to good growth of infrastructure projects.
The construction mining E commerce. So of course, if you see I think there is a good growth happening in before and when he sees for the first time, the salience of each to almost 34 25 per cent.
Same gifts with interest digital light commercial vehicles, I think E commerce growth in manufacturing has been driving this improvement.
At the same time via what should we think the introduced.
<unk> transport expense trucks.
Considering the requirement of the country.
In small commercial vehicle and pick ups.
E Commerce has been driving the demand when it also seen on current demand coming back in the first two quarters. It goes more from the room side I think that when demand is coming back.
And consumption also seems to be going up so that is something which is driving the small commercial vehicles.
The CV passenger buses and vans is something which still remains of the concern.
So when some employees on started the going to the offices of large parts still working from home.
Schools, not operating excuse of running at the very low level of of classes and therefore, leading to the true.
The demand in passenger.
We've seen the sequential market share growth across all of the segments of <unk> book.
As we worked on supply constraints, which we have seen in Q1 and Q2. So most of those constraints other than behind us but of course.
As many of you the order a few new cost guidance coming up which I'll speak about.
The photo on the back of this you've seen the I used to withdraw of magazine in six quarters.
Due to the continuous cost reduction efforts.
And also higher reminiscent of resilience.
The quarterly true positive EBITDA in Q3.
Moving to the bright spots.
I think what I've seen the improvement in most of the macro.
I will of some of the micro in the indicators that we look at so whether it is the EBIT business.
The effect collection, but kind of traffic.
<unk> Zealand for true consumption on the freight rates I think.
Things are gradually going up which is there for reviewing.
The feed to close the shouldn't almost 90% to 100% of equal of limits and the <unk>.
Half of the beauty of the people on those is also going on.
On the consumer sentiment index is something which we track internally every quarter.
And the book the news that the index is now making up.
For the index has a few scrapes the bottom in Q1 it improved in Q2 on in Q3 sales for them.
On the good thing we've been back to this in the fixed income.
The multiplication of the combination of both satisfaction of the current Skus.
Future expectations, so within that I think the future expectations of even doing better.
So of the suite of also something which augurs well for the industry.
In terms of Vuzix products, I think we have been focusing a lot on back of backgrounds in the market.
With respect to our own DSP be of school ratios because the.
Well of competition, because I think the purpose is to demonstrate to the customers the.
Improvement in total cost of ownership and therefore, what is the payback for the higher price per day are paying for the Vuzix technology.
This is also something which is helping us.
In terms of higher realization with Bell as you mentioned.
Looking ahead of some of the challenges I think since Q3 of you started the chasing the.
The semiconductor issue it started with the well.
And then the one supplier of again gradually a few more but we are continuously tracking institution, you're also talking directly with.
On the semiconductor manufacturers to see how we can match.
Manage the institution. So this does remain a very.
The importance of jumbo for.
For us.
The volume.
In this quarter.
It is in commodity prices.
Which is an important thing to happen again, I think something we have been tracking we have been able to negotiate.
Who asked reduction guidance.
The pricing to the so you've taken price increases being below the current pricing introduced in Q4.
So this is something which is helping us do that.
It goes with the commodity price inflation the.
Finally.
On the CB passenger segment with the spoke about I think the demand remains a concern the <unk>.
Yes, Paul as well most of <unk> 80 per se.
And the school.
Who is there to open up the business and leisure travel is yet to normalize. So we are tracking this to see how the slot segments within the commercial vehicles kind of come back. So this is somebody of commercial vehicles backfill biology.
Thank you rich.
Moving on to the next slide the on passenger vehicles, we come up on the numbers.
Great attention of the graph, we go against an industry decline of 10% of the year to date, we have grown 30 net okay.
That doesn't show that on the market share of the stepped up.
For the expense.
All of them.
The projects.
And the mix that EV, which was negligible.
To make it as president of spend for the 2% contribution of the powertrain.
And the next one of the visa.
The 65 of 64% of the EV industry volumes in the last nine months.
On the way equals Tiago to go around for the next on all of them on the book them in their respective segments have yourself with a particular call on which is not crossing the 3000 vehicles.
On a per month with the very strong growth rate compared to last year.
And alcohol of course, that's been a blockbuster for photos on the target, we just launched the Idaho book.
A week back and expecting continued strong performance on those fronts.
I think the overall point on PV being the new affordable range as well as the impact focus on the front end activation with tradition covered extensively two quarters back.
Starting the peer results.
And we will talk about this quite extensively on the Investor day, that's coming on soon.
Excellent.
On the financials.
So 85% growth here again, you'll notice.
There is very limited inventory that would be for 70000 of model from the whole sales of the seven to seven what retail so I think of the retailer dealer inventories are.
The karaoke law or something in the suite.
The lead time increase the for orders.
Revenue of touching 5000 force for the first the time EBITDA.
EBITDA, increasing substantially over the last year and on what 2018 and really draw your attention to whats happening today, but we always talk on EBITDA what are the operating level starting to kick in you see that while the increase EBITDA by 70 bps wary of.
But the whole day, but quite substantially by 14 1400 bps.
For the next target for the business as they don't get too on EBIT breakeven and then of course, the cash breakeven and we are confident of pushing up towards with the good part of every line of the P&L starting to book contribution mix operating leverage.
And of course, the final alignment of commodity inflation, but I'd be happy to take it on the chin and none of it this way.
The forward.
So they sort of just wanted to take this the slide.
Thank you Bob.
Let me give a quick update on the business performance terminal for PV.
Which is the result of actions taken broadly in three areas demand generation demand fulfillment and.
The profitability improvement actions start to move the demand generation.
The key options of opportunity we're focused on strong.
Greetings and towards smoothed supported and backed by <unk>.
We recently named as the months of pipeline.
The channel partner margin structure on policies working for them.
<unk> homes for profitability on.
This was very important because this is what the neighborhood the enhancement of working capital, which was extremely important for simple thing.
Growth, which was nearly doubling the growth.
We just kept on share of voice volume through.
<unk> marketing campaigns on the continued and continue also to support the demand generation of Assortments vertical product.
And that's what we have been able to guidance of many strong bookings in the quarter to answer.
And we expect that in quarter on quarter also the demand is going to remain strong for us.
Particularly because of China mainland responsible for most of our mortgage team.
And as I said, but we are of very strong pipeline of bookings.
Talking about demand fulfillment side.
I think the demands on duration.
Could not have been supported the demand to the muscle on the demand fulfillment side do you book on the mid teens.
So it was a unique situation for us which we.
We will also move on NUPLAZID, who was the move to.
On top of the production book twice, what we will now begin the match you mentioned.
Political linear move for the true production, we can scale more than groupings.
As compared to the average of the last financial growth.
And this has in volume auto need a non.
The debottlenecking actions and boom, but more so on the supply side for many critical items.
There wasn't any good partnering between Tata motors on the suppliers to Debottleneck the capacities many of the times without the need.
Capex on the two multiple kinds of activities.
So this has really helped us on Debottlenecking Pos.
Yes, the chairman's is conditional on so mentioned in <unk>.
The semiconductor in scheme of Liberty can be open soon but we are taking some of the mitigation steps to see how we can minimize the impact of this on.
The global disruption levels.
Yeah.
The last two of one on the profitability and cash improvement actions.
Airports would actually put to optimize the product mix and volume mix, both actually because by the the color on the product mix, but there was some strength.
Canadian.
Also within the product.
So the movement of the mine wasn't seen sort of more profitable products on <unk>.
And in fact as you can see on the profitability.
Driving skin was one of the biggest multiple for us because and we also in parallel we kept the fixed cost under control.
This was crucial to improve EBITDA margin than we have seen book of went on that.
There was a very systematic cost reduction initiatives undertaken the.
It hasn't volume of 600 employees, who have been generating a very strong pipeline of ideas.
The last quarter, we did more than once the <unk> edition bookshops and your options.
On the really strong cash flow like you guys.
So this is growth.
In summary of all of the actions that we took on the PBC back too.
Actually I'm on it.
Slightly moving on quickly the Tata Motors finance.
The business is now.
We made of PBT of 55 of course with an ROE of seven 3%.
The increased to 41000 pools during the quarter and we did manage to.
Probably in about 70 of different pools of all of that and GNP is at five 6% of stable.
And M P at the four 2% margin, even though the.
The good news of the drop on the collection efficiency the received before.
The sequential improvement hit the 105 per cent in December and continuing strong in general yes, but.
Therefore, what correction will remain a focus area and starting to get.
More reassuring the that's the thing that's starting to come back correctly, but we cannot take on eye off the ball so ex.
Current performance on cost income ratios.
The 32 per cent.
Following the long view over the last three or four years and the.
That's pretty adequate liquidity.
Come on sort of business doing well and business starting to more on track for an asset light ottaway accretive model.
Thanks.
So in conclusion I think our we book the demand I think of the situation. We expected the continued to improve the value.
Book value.
The entire focus for all of US is on the various supply bottleneck the functions Brexit related logistics matters of the all causing a lot of expectation on the supply chain and that's something we see the Dortmund looking through it.
Commodity inflation needs to be managed every day.
And despite all of the intent to consolidate the gains that you're ahead of Q3 and finished the year of strong, which all of which would place us well for the subsequent year ahead.
That would be the broad message and the individual line items for each of them the already seen.
Modern ex slightly.
The really keen to see what that meet all of which can be then on the 20th of in the February for Tata Motors and 26 of the February for drill up and look forward to seeing your day and sharing our plans in more detail there.
Over to you and then over to any questions that you may have.
Thank you Lady much.
We will now begin the <unk>.
And answer session.
Participants on the webcast you can use the chat box options.
At the bottom of the screen the supplement the question for the speakers.
Ladies and gentlemen, we will wait for the moment my other questions with Emirates.
Okay.
For the first question that has come on from Yogesh Aggarwal of hedges B C.
Great set of results the bank's yogish questions why was discovery volume so the third quarter, what's the due to the grid and number two ex he volumes on now almost negligible at the being discontinued non.
It didn't do you want to pick this up.
Yes, Thanks, Pat as you have looked too.
So I think on.
The discovery is a few things to note on the discovery product what is the 21 module of discoveries dramatic refresh.
And therefore I would encourage you to think about.
The discovery volumes as we go through Q4 and into next year too of course, it does share of production facility on production lines with the defendant and you've seen has strong our volume demand is for debenture at the moment is and solve each other as some imbalances, we do across those product lines and I think the third point.
Notice that there has been some cross shopping between <unk>.
Discovery and defend drove for the first 12 months. So again, we'll see as defending the balance is that whether that continues to impact just the company post 'twenty one model year of not XD.
Ex the volumes then mostly negligible now okay of course, we've talked a lot to you previously about house of sale as of Saturday and model isn't just to sell more cars. The AD model is to sell more profitable cars get of significant refreshed again on XC into 'twenty one model year.
Net which is just coming through into the marketplace for the important thing to note here. We are also repositioning that nameplate in some key markets like the UK, where we've taken some price changes and we've consolidated the North America and ex Tac just for the excess going forward. So it's all a part of that strategy.
To put cars into the marketplace that customers have appetite for or we can make good solid returns on an ex the isn't one of the most profitable nameplates we have.
Thank you Jim.
Two of them.
Okay.
Next question from Sonal Gupta of.
UBS.
Can you share the Bev.
Volume share and you can view of.
The reason of the question being off the how much of the need to increase further to achieve the C Y 'twenty one target.
Second question what portion of the airline.
Alright, okay.
Okay.
For the corporate data.
It was around 30% of ISP.
The U K and Europe in.
In quarter three and other.
That was the substantial credit of credit Chad realization position going forward Jos Youll see going forward the last fall.
For the 6% of total global demand is where we would expect to see in this quarter, it really ebbs and flow depending on the regional change it so actually.
We expect he had the proportions in Q4 to be higher than a normal quarter why because it's a strong selling months. During the course of for of course March for the UK. So we will sell more P has some of that's in.
The quarter for it will level as the level, but as we.
The phone.
Thanks for the next one from some of them again of what portion of GL on revenue hedged for FY 'twenty, two and what's your hedging strategy for our aluminum and other key commodities and.
And how much do you expect from the buy back on the rise in commodity prices in Q4.
Yes.
So our hedges differs by currency of course at front of currencies as you know U S dollar.
B and your ROE in our more than two thirds of the U S. Dollar on AMR in the unlikely hedged you really dependent on what the growth vehicle revenue is of course that would be our expectation slightly less on the euro around closer to 50% of commodities, we hedged those 12 months as all of the style.
Broadly 40% of our commodity.
Physicians on the lithium on platinum maybe in the mid high next year are already hedged in place of little bit less on copper.
Okay.
For the next question from Charanga, Illinois.
C J on a few questions on C G on our doughnuts.
Well, maybe you may want to wrap this all of them in one question P. J on on a quarter on quarter on Asps have declined on margins of the negative.
Anything specific or anything else you want to talk about on the C&I piece. So that we can take all of the dealer questions I'm on truck.
Yeah, Okay. So yes, and this wasn't a good quarter for CGI law, it's definitely something we'll be working on.
More of determining delays and we already have paid that was the end of the year of transition for them, we haven't gone into position and we've talked a lot about our supply lines for Jaguar land Rover.
We have got two months worth of stock locally for local produced products and it's starting to show itself as higher discounting. So we didn't need the pullback, we do need to pull back on the level of supply into the marketplace, which we will begin to do over the next few months I would encourage you to assess the impact.
Of that probably not in the next quarter, but in the six months time, where are the expect just again to be back towards that breakeven position on.
C J.
On the level of volumes on lower volumes. We're looking for volume is paid net of five five and a half thousand units a month on there were a little higher over for the quarter three period of course quarter three of the payment.
The quarter for Jaguar land Rover in China and for the local business as well and I think we saw on the level of discounting around the highest quarter also so Joe just on three to six one times of all I would suggest.
Got it.
Another one on the mix I think of and pick all of the mix of questions together.
Jan on volume contribution range Rover sport on defender in wholesale the all time high of 47% how should one look at it from here on.
Yeah that was about there's about a six to eight point swing from Jaguar land Rover.
Across the course of from what we would expect to be of normalized quarter. So 84%.
The line drove the we would expect about 78% and that swing was heavily as the results of China and North America being.
Opening for business a lot more than the other regions. So it's less about more sales in those regions, Although China did very well, it's more of a less sales and our historical UK and European region. So that's really what's happening here of volumes are lower than we would've expected on the pre COVID-19.
And then dramatically impacting the regions of the UK and Europe of lower margin areas. So this will normalize out as we sell more cars I would encourage you as we come out of quarter for.
Eight to 10 weeks time to look at the mix is on the absolute volumes in that quarter. Because I think Q4 is going to be closer to a normal quarter. Then the abnormality of Q3, I think there'll be about a six point swing back to Jaguar land.
Non drove its high 70 cents rather missed.
4%.
All of that will play itself out at the toe proportionate lower on range Rover sport and defenders, which will be 40 low percent dropping 40 high percent would be my expectation.
Okay.
Again, another one on the one off Adrian So you mentioned some one offs.
The EBITDA of six 7% what are the end.
Hi, there.
Yes.
And so there's some sort of a binary one offset net or the <unk>.
Talked about the compliance preserves $55 million, we've talked about the residual values 25 million on 36 million year over year. So the binary one off for that one in the half percentage points. It really then gets into the abnormal the high level of risk and how you would evaluate that now.
My view of the some of that is abnormal on therefore that totally influenced the EBIT as well. So you should think underlying EBITDA closer to 4%.
However quarter for us normally invest in quarter three.
Sure.
So a quick comment on commodity inflation on some of them pick up how much is visible in Q3 for India.
Can you quantify it.
We have called it out of the Japan outside of the board 19 odd million and as part of India is concerned the integration of starting now.
On the bulk of the impact you will see more or rather than Q3.
Moving on to the next question from Crown needs of the other thing.
One of the retail trends in UK currently expectation for the company.
Of an extended.
Yes.
Yes, we share kind of the slide Q3 versus last year was down 9%. That's been the typical of the scale of the reduction should we would've expected to see Q4 as you know in the U K is the biggest starting the quarter, particularly bias to the biggest month in March.
Normally speak and therefore, we'd expect the highest quarterly volume in the U K to be this quarter clearly at the moment dealers on a close and therefore, we're not selling on a normal level.
Covid the actually starts to allow us to open daily sales for our biggest.
Month in March I would anticipate any quarter for it to be the highest U K retail of this year.
Clearly versus last year that we saw at the close down in March. So again, I would expect year over year quarter for UK retailers to be higher than the last year of cortisol.
You are going on one from the the nice thing Morgan Stanley.
The questions are on <unk>.
For the unit is now almost on a clean quarter heightened fiduciary your thoughts on how you think of FY 'twenty two 'twenty three EBITDA per unit.
And the question is also coming later from from Goldman.
Goldman on any deals on the FY 'twenty two 'twenty three capex.
With the margin.
That's an easy point on so trying to pick up the first on the hard one of them and give it to Israel.
The 'twenty just give us a bit of time, they must of the data better time to say that as the put our strategy also together along with that.
And that would also share of the cost of plants that we have.
So the question more on the EBIT per unit the Adrian.
Think of the.
I always like to think about the.
Yeah.
Yes, so think of that the underlying level, we've talked about for quarter three when they are back to where we were pre COVID-19.
I do have to say depending on how Covid develops of course, you would expect me to say that but it is that increasingly becomes the in control I would expect us to continue to trade at those pre COVID-19 levels. So you know on underlying EBIT of around the 4% level of ebbs and flows by quarter.
As you know Q1 tends to be a weak quarter for schuh for a stronger quarter don't forget over the next 12 to 18 months, we do have some significant product changes and therefore, we'll give you.
<unk> quarter by quarter as we go forward.
Okay.
Sure.
The applications on the sponsor.
Capex.
Yep.
Yeah.
Yeah.
I cannot give you.
The accelerated revenue.
In light of regulatory timelines on EV.
But one of the backward.
On Capex.
I'll cover that in the Investor day.
The only because of the question coming on my book.
Great.
But even if the uptick.
Phebe can you please talk about cost.
Cost reduction initiatives.
One of the B Besides the rock.
How would we manage margins I wasn't saying in the NPV demand in FY 'twenty two channel.
Sure do you want to pick the huh.
Yes.
Pick this up.
So.
Starting with the cost reduction program.
Mentioned in the way that was because of.
My slide.
You should go very structured program on cost reduction with where the stretch targets of it.
<unk> was nearly 600 employees for the company looking in a very cross functional structure.
But the have been organizing multiple workshops through which idea of generations have done and the.
The key areas of focus would be for value engineering for example of UBS.
The infusion, which keeps the profitability improvement.
The commercial D&O reduction through should be cost approach.
The nickel boatsman glued the ideas of the import substitution.
The reduction in on bond logistics, and so on so diesel maybe shippers, which are moving on.
The very steep for cost reduction targets have been taken on your on the new scheme motors in the Gulf of all of those initiatives, which I'll talk to each weighted in the best of.
Several of months.
So this is this is probably as far as the cost reduction initiative is consumed.
Talking about the.
Are we seaborne market that's one of the quake when you do is concerned.
On the is to make sure that the.
And for the economy or the bonds back and also given by book at some of this demo.
EBITDA in the scheme on the bulk of the multiyear zone.
For the claim.
It has been pretty steep in the March mentioned within disconnection of the Amazon. Some of it is expected to be around 5% of small decline on credit.
Some of the claim in the last year. It is expected to see the steepest banking slowed as expected in some estimates I'll let alone.
Three two to $3 2 million market index like when the Christmas.
Thank you.
On July from Thomson Miller again.
A couple of electrification plans for more.
More importantly, what are the driving such parts of adoption of either because the drilling.
By the supply of for so many of my compliance costs out of the given by driven by subsidy for two.
<unk>.
Okay, well, we look we talk we talk a lot of about the current nameplate plants 12, and 13 of them now of electrified and some of the full anything else I think I'm simply going to the state. We've got we've got a super Investor day kind of on.
On the 26th of February you'll have the pleasure to listen to allow us the Iot.
The area and it could even.
Talk about it and it's much more eloquently than Iqos. So please humor me and allow us to give you a really for outline of how we're thinking I wish exiting out of course, and what you should expect but the exciting.
Okay.
So for them.
Our production.
On the other expenses and Jane the kind of go somewhere else.
How much of.
Yeah. So this is where all of the interesting stuff going on within that other expenses.
The reductions in engineering, the SMB, we called out.
Earlier on the slides.
Reduction of all other expense is warranty is also finding its way and then the emissions compliance as well. So you will see the significant drop now remind you some of Thats one off and on.
Of all of that underlying the pieces, we call out on the structural cost think of think of mostly underlie. Our expectation is we will manage our business where they can those funding levels going forward and you can see by the results we are actually managing it pretty damn successfully.
Okay.
Uh huh.
Coming on board.
Wow.
Market share.
We appreciate the book.
Okay.
Morgan Stanley.
Yeah.
Market share losses.
While we appreciate the profit ex focus any thoughts on market share on how should we think of volume growth of the drill a couple of months.
Yes.
On someone else on the China market share lots of them.
How do you see market share in China.
Yeah.
I kind of answer if she wishes to the first part of this question concerning the semiconductor of shortage.
For the World car industry issue.
The issue on is the real issue in terms of allocation.
But at the moment because of the capacities.
Of these big actors towards all sectors of the mess.
The facts.
We are not impacted at the moment because the team is doing a retro the true.
And the touch with Goose tier two three income.
Of course, the guidance compared to us in order to make it such that the allocation.
It gives the happening to our company.
He is working mainly because we are so small compared to the actors does in fact, our allocation doesn't change the picture for the other customers of these companies and beyond the spend.
It may have a huge impact on to us and with this type of approach we have been very soon for now to be supply.
Okay.
Thanks Ernie.
The question on market share.
Yeah.
Our view on.
Goodbye.
The performance.
Sure.
Yes, let me answer that one policy I'm, sorry, you're breaking up the list of desktop.
I think on the other question you know those of you on the line will now be louder I have not read the direct drive on market share for the last 18 months I've talked about alpha sales and quality of sales.
When we talk about market share on <unk>.
Look look at the results. However, you've asked the question you've asked and particularly to China. We told you that we were up significantly versus last quarter and previous share of about 20%. When you look like compared to the data.
<unk> was up 10% over that same comparative period.
The 2%.
So it would suggest our share is pretty much commensurate of.
First is the growth that day.
Seeing as well and therefore, the shares of changing that much but that would be my expectations going forward as well, we do have aspirations of sound more vehicles of course of aspiration to sell more vehicles in China of course, but we don't have aspiration to challenge the quality of those sales simply for volume.
And where that ultimately ends up on that.
Share by share it quarter by quarter, we will explain as we go through the quarterly results.
By end of Q3.
Okay.
The comps.
Joseph Jordan.
Appreciate the chocolate within a month when one of the negative impact of the Sam be visible on the <unk> P&L for the rest of the hedges.
The mail the widened the head.
Yes.
Okay.
Apologies if I can answer it so it's been burp per hour of the treasurer. So the answer is the it's already coming through our results. So for example in this most recent quarter operational exchange was unfavorable year on year of $46 million.
So that was more than offset by hedges.
The 88 million pounds of.
Gains on hedges in the period of year on year.
And that over coverage of it reflects the fact that on.
We still have hedges on.
Last year that were heavily impacted by Brexit range, so the better rates on why.
Year over year of why we saw over cover of it going forward on the reality of this we will continue to see and the unfavorable effects of lot of operational exchange on revenue.
But we do hedge our hedging policy is to hedge up to 75% one year out and then the 17 percentages thereafter for example on <unk>.
Power for hedged about 75% in FY 'twenty, two and about 50%.
Yeah.
By 2023, so that's how I'd answer the exchange question.
Yeah.
From Rakesh Kumar of BNP Paribas.
One of them.
The coming home.
Okay.
On the Montney.
The second is the one.
And the top line.
No that'd be drawn for their other.
Other than giving a broad.
Hello.
Each of our model.
The first one.
Thank you.
Okay.
Sure.
Yeah.
So.
Yeah.
Oh.
I'm, sorry volume really breaking up on for Frank every day.
Oh, sorry.
Can you hear me.
Yeah.
And then the best now I'm sorry, Mike.
Okay, let me repeat slowly.
For the wrong question otherwise.
Yes.
On the residual value of normalized the com.
The quarter.
Or do you see moving on.
On the module.
On.
Yes.
What happens on residual value.
Really shows at the South.
And that's in that year end of the year, Great drive we show that sounds very clearly while underlying is.
And while headline is Brian most of the residual value of reserves, we put in place actually to aggressively over the last year finally, with the Covid reserves.
We saw at the end of March most of the divisions, namely unwind blend. So what you should expect to see going forward the MH.
As a proportion of revenue close to.
So the underlying level of 5% high rather than the the.
Of the headline level of 5% net would be my expectation.
Particularly depends on what we sell where we sell by region. Because there is no operating capex per year in EMEA.
Of course EBITDA.
On a different by nameplate and by region, but broadly the.
The underlying number of domestic guidance going forward.
Okay.
Okay.
This is the operator you Mr. Kenny on us.
Yes.
Okay.
Hi.
Yes.
Yes, let me take the next question.
Okay can you hear me on better day.
Great.
Yes.
Yes on the hit better value.
Okay.
Yes.
Apologies for that.
Question from.
Budget ICSC convention.
For the Vienna, one of them.
Of the Sustainment EMEA on warranty level within the next day, one two years.
I've gone on the journey with you on this type of my first of course, if you remember I talked about 9% of <unk>, 6%.
Guaranteed for a 15 percentage of revenue 12 months later, we started to talk about stepping in for lack of the sense of revenue I think it is reasonable to assume we expect it to be lower than the 11% of revenue going forward. I think we had a really simple quarter Q3. So it may not be hitting those levels every quarter.
But it will be sub on that 1% across the two for the foreseeable future and get out.
The improvements we are making on health of sales and on quality you would expect overtime that to be progressively improved beyond that point as well so sub of 11%.
Maybe even sub 10% from the spot.
Yeah.
Okay.
Thanks toward market some of them.
The other come true.
Duke niche on.
Net loss.
Hello.
The some accounting questions and interest you can pick up with per cash where does the reversal of these kinds of contract for and which line items will pick it up offline with potash.
Other expenses, we've already talked about.
<unk> CGM on realizations, we have talked about Brexit the nuance of Brexit rules of origin of criteria of 40% EV.
Is it including of <unk> the BS.
Okay.
So it doesn't include enhanced and the has to go along with the rumors.
Rumors of allergy to growth.
The 55% as of yet.
That's the piece. It does include the Hess <unk> go together and perhaps the nice go together.
I can the R&D capitalization rate has been on the 62% to 64% range.
Is this the new normal ordering the revert back to the 70 per cent range, which you had indicated earlier.
Okay.
For the 70% range at the minute of course, we still got we still got some three for late Q3, particularly in October.
Our average on furlough.
And as the results of that none of that costs were capitalized so stay with 70% for the moment, but we have explained over the last 18 months and you've been very patient with us.
I do agree that the new.
You know of is below the 80 down to the 70% level and we would expect COVID-19 time for it to decrease from that but not yet theres abnormality in the Q3 day still because of the product.
Thank you for moving to the next question from the Tim Korea his teeth.
As growth is expected to revive both in India and <unk>.
It will be turn more aggressive towards the capex programs.
Other current take India for instance, we had started the year of 1000 on planning for the Capex. We are now running more like Poland <unk> of Capex, that's basically to take care of the delta of demand that is coming through to cater to that and also ensuring that we are accelerating some of the product for them to continue delivering on the growth going forward. So we will not come.
Bromine zone growth the under any conditions.
Adrian rate reported for the value creating growth no debate about that.
As far as Capex. Therefore is concerned it will be managed dynamically, but within the broad range that we had indicated because equally important for us is to ensure that we reduce our debt levels and grow net debt free in the next few years that is the hard constraint and we will work to ensure that we get the and what other capex within the lifting of the enemy of feeding growth and therefore that the.
On back of cash as well so we are managing the dynamically.
A question from couple of thing Nomura.
Congrats on a great performance the questions for Gela.
Mix headwind will then be of mixed headwind from here as we head into Q4 I think.
<unk> talked extensively about the a lot of the splits on the skip this couple of.
Other expenses sales again talked about that.
Many Oems are investing heavily into beds on autonomous driving.
Some of them are comfortable not generating free cash flow for the foreseeable future what does <unk> plan and investment for these.
Judy would you want to pick this up.
I think the first the first of all remember we shoot for that.
Or all of the what you shouldn't themselves for the drug.
It's on.
Of course.
For the Capex expenditure, which is already on our figures first element second the elements.
It is designed for him.
Construction by the way of of programs have been moving forward.
<unk> generated profit is the metro for Christmas.
A question and answer.
That is not because we are moving towards electrification that suddenly we would reduce our ambition in terms of profitability by name in place that's the second point.
The first point is that all of the technologies, which are being used.
Electrified even towards the <unk>.
It's moving forward the extrusion trucks as well.
The piece that's too.
Value chain moving and it.
Speed translated and we are also make the search that we take our true from the new value chain. So far we can get the rubbish and continues to be robust profit prospects.
Thanks, Eric.
Then moving to the next question from Yogesh.
Our European business has been of real bright spot in India.
Are there any market share targets for FY 'twenty, two and again the standard question one of the new launches that we will be of already explained what we're going to do.
Charlotte would you want to talk because of the point on market share targets that you have internally plan.
But as you saw.
I would say most on the specific modern day.
The people you would like to do now.
We would be in the double digit market share that's where the.
The the chart on target for.
And this will be supported by you know the launch that we opened the house so far the into the next month.
And then we would in the same kind of on the real discussion. The view, we would have the non jobs on the.
These two.
It's enabled us to.
The in the double the two market share.
And as.
As I said that the market is expected to cross the $3 million next year. So this will be.
On a very strong growth that we can expect next year.
Yeah.
What was the second question, but on the U K.
The other product lines with the idea of answer you on.
But book.
Thank goodness.
The question coming up for <unk>.
The Greece, India Cds.
Should one look at this from a structure and otherwise.
Should one look at the ability of the players to pass on the cost in the current cycle as the this time cost inflation of Queen setting with the early stage of the acuity should it be relatively easy to pasta pass on the cost.
And also can you indicate the nature of the buyers large fleet was of medium was a small fleet.
Current demand should be more of a replacement demand is that the way we should look at it.
Girish.
Right.
So thanks, Sheila I think the annuity.
Annuity zebu bus on the cost increases, but at the same time <unk> seen that.
The cost inflation commodity inflation doesn't happen when the CV.
Michael is on the uptick.
So the real quick.
Congruent with this other thing as I said you are addressing it on.
Yes.
Continuing on cost reduction efforts.
Second is the.
Price increases the steps. So we took a price increase in Q3 view on sort of kind of pricing. It was in the beginning of Q4.
And also what is more importantly, the Hollywood communicate the value of the Vuzix products and whatever the higher investments. They are doing with respect to be useful how fast is the payback I think that's what we're focusing on.
Helping us to therefore electric customers digest the pricing through the.
In terms of nature of buyers.
On the with an up cycle, the large leap on those who come forward.
And the towards the backend happening in Q2, I think towards the end of Q3. We also started seeing the small fleet operators coming in and I'm talking specifically of what government of FCB.
In Ltvs and small commercial vehicles, when there's always seen small fleet operators coming forward.
In terms of the current demand.
I don't think the replacement demand has come up yet because of the PUC cyclicals.
The getting established in the market the customers are still experiencing the benefits in terms of the skills. So they are watching book the technology as well as the tissue of benefit and once the see this happening more and more of it more.
Customers are experiencing it I think we see replacement demand coming in or replacing the idea of abuse reviews for records will make.
Economic concerns.
But let's get back to you.
Thanks.
Rich.
The question from a couple of things.
Before that there's another one from products other from systematics Girish.
Back to you again, what's your view on C. D. I N C D N M and as Covid demand outlook in FY 'twenty two.
Secondly, on you're also seeing an easing in the financing availability.
Okay.
So let me take the demand one first.
I think you've seen back when the industry.
Because the learn more by many seats women in city of volume the most of.
Of course, if you look at in the pandemic it is the.
Passenger because the bus segment with the following the most and the.
For the if you look at for the next year of.
Of course, there are a lot of uncertainties in terms of second wave.
On the semiconductor suppliers, but if we keep those of saying I think it is expected that when we see <unk>.
Maximum or demand upside on the <unk>.
On the passenger related losses with a ton of very very small base.
That will be then followed by eminent seasonally of minutes of you also should see a fairly good Cody.
Followed by the Nio C D and the small commercial vehicles I think overall it appears back the industry should be upwards of a point of seven two points on per million given the next year.
In terms of financing availability.
Yes, there has been a significant improvement with what's been happening gradually non core muscle in Q2 Q3.
And we see good financing of Eqt's happening now on apart from that I think the.
Financials of also come forward with a.
Very very innovative and aggressive products.
On the price increase of each other for NDA. So all of this the importance and.
The customer of those could become for Oregon by the PUC.
But looking back to you.
Thanks, Gary.
Oh, one more coming to you again.
For your time on the phone.
<unk> talked about the sentiment index, the dish where does it compare to what it was on 2018 19.
Some couple of Nomura.
Yes.
Okay.
On the presentation.
In the sentiment index more than the absolute value is the trend was important.
And across all of the appointments of the <unk> seen the use.
Moving up and we.
The script the bottom in Q1 after that of the sentiment index is going up but if you insist on the values I think we are still behind the 2018 19.
Which is quite understandable I mean, the financing was our previous peak when we cross the $1 million.
Volumes I think the theory is the most likely you will be.
Touching on the auto one quite for a while more than back on five 5 million kind of a volume sort of in terms of overall volume you're still below 2019.
Well, let me.
Yeah. Thanks for this.
Question to me on Tata Motors Finance, what percentage of the loan book has been restructured.
A couple of thing again.
A couple of two comments I would say.
So that's the answer your question directly for per centers, the broadly for percent of the book, which has been a restructure on MMA credit.
Also another point of which I don't think I did when I presented the G&P that youre seeing is at five 6% as the.
The ifr of DMT or the Indias A&P this does not in the.
We have not taken any any benefit because of the Supreme Court ruling.
Rolling on G&P. So this is the real GNP the gear cutting in our books the for income.
Emission, which I missed the next differently.
A question from promote the incurred capital.
Each of the worst margin impact of E. The already captured on the financials or will it continue to harp for the coming quarter.
Take India and then.
Adrienne if you could take Jana.
India, the EBIT margins for the contribution margin that we're currently delivering as broadly in sync with the category contribution margin. So therefore, we do not see any drag because of EV.
And as we start improving the contribution margins for the rest of the business of the will also be working on the E side of it.
Adrian on the Dana for it.
Okay.
Hello.
Yes.
And the weighted because.
No we actually provided an supplied all of them.
Both of them and multi <unk>.
Each of the market in that quarter than we originally anticipated. So we got the benefit of different let's say some of the costs that we had previously book to the crude.
For Q4 of kind of the advent at a better value of central Port Normality is overall I expect volume to be higher margins to be on average lower in quarter, four and a small piece of that normal quarter of small piece of that will be increased UK and European volumes in the path of that.
Slight margin degradation is the cost of these units with share, which obviously, we need to supply for the marketplace.
Excuse me, it's not a normal quarter of Q4 will be but I will repeat what I said earlier I expect us to continue to trade at pre COVID-19 levels, and therefore, even with the mixing towards that.
And he has viewed it.
We've made significant changes in our business model and efficiency to offset.
The challenge is on the cost of of these combined it and Thats the right thing to do and that's what we've committed to continue to do.
Okay. I think we are now on the hour so with the client partners and quality of <unk>.
All of you for the time that you've taken in the polling questions.
Feel free to reach out to US further it gives you want us to.
Okay.
More than happy to chat with you on this.
Once again, thanks for asking.
Thanks for everybody for joining the state's fifth on the best and look forward of catching up with useful take care Bye bye.
Thank you.
On behalf of Tata Motor.
Ltd that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Okay.