Q4 2021 Tata Motors Ltd Earnings Call
Yeah.
[music].
Yeah.
Ladies and gentlemen, good day and welcome to day, Tata Motors Q4 earnings Conference call.
As a reminder, all participant lines, but it would be in the listen only mode.
During the course of the presentation, if any participants to ask questions.
Can you speak guidebooks auction, if you think at the bottom of the screen.
The subject that questions to the speakers.
Questions will be taken up at the end of profession.
Please note that this conference is being recorded.
I now hand, the continental to Mr. Prakash Bondi some talked on motors. Thank you.
You would do yourself.
Thank you.
Good evening everyone.
Oh Boy I Hope you and your family members that are healthy and safe during these uncertain.
Good day.
We all hope that the Motors Eyeball me welcome you all quite a lot in Q4, FY 'twenty one day they spun.
It's funny.
But if you haven't been done.
Mr. Jay <unk>.
M D and feel that I'm all good.
<unk> CEO of Jaguar land to it.
Mr. P B <unk> group CFO Tiger Motors instead.
Instead of doing Martin with Jaguar land Rover.
Mr. Li from.
From a TV business.
Mr <unk>, President and day to make an electric vehicle business and certainly something that Mr. Allison.
Like all day.
Before we review all of their financing and business performance from the management and then followed by Q&A.
What do you buy that day.
Okay.
Thank you.
So stay warm welcome to all of you. Thanks for taking the time Oh.
Like I said I did I called.
Policy, let's say from film.
I I intend to the presentation has already been uploaded into the interest of.
I guess, what I'm, assuming all of you had a chance that they can look at it and also have a coupon book too.
Go to the page numbers and move forward with.
I didn't have any pieces of the safe Harbor statement well into the next one.
Yeah, Oh, an intense period of product actions as well as a comp.
Any actions that you saw in Jaguar land Rover.
From that of course, we're going to talk a lot of book defended the today.
Letting the world car design.
And Oh almost ran out of a study now placed on non electrified and Oh you were there.
Despite its going to be focused transformation goes along and we can talk about that later.
Will be concluding charge in this quarter.
And because they needed a billion.
Bonds of lifetime savings one of them.
Projects in local most of the world and very happy with that.
Exactly.
Automotive is of course.
Yeah.
Oh, we did see significant product contains interventions both BSD and <unk> at this point in time, what is really happening with customer sorry, excuse me per product and really get.
Giving us excellent feedback with his nose are reflected on our market share, particularly in the MLP.
Oh, that's a party with the amazing growth will be bought Oh, Yeah of course, it's stronger response from the market and he has been a standout performer with sales mix is going to talk about even more.
And the cost savings target weird weird indicators thousands of course for the yard we ended up at 9003 underscores the strong performance out of that and the promoters have completed that.
Funding the ones the remaining outstanding warrants have been exercised.
Thanks, Mike.
From a performance perspective for the quarter a strong all round performance. Despite the pandemic. If we look at the full year EBITDA of almost 30000 of course, but if I look at most of them into Q4.
The EBIT number could you see a seven people from the highest grade of you would've seen in the last many quarters.
We ended the year with a strong cash flow for the quarter and as we look for the year being a positive free cash flow and the overall EBITDA margin picked up and if you look at the full net number if it doesn't cool despite the decline in revenue or volume increase expense due to the business is getting intrinsically more strong book.
And the implication of a strong business what does it do in revenue just come through as seen in Q4, that's what we'd like to see the business today.
No problem.
Oh from a the numbers are therefore call out the net automotive debt, we had called out the deleverage plan. When we are when we announced it in the AGM.
I'm happy to report that for the.
Current year were lower than what you added clothing that of last year and every quarter, we have been reducing our net debt level and that is something which we are quite happy about it.
Right.
What are the three things that actually are which are which are a bit different to the rest of the flow, which is a traditional being in our analysis.
Just gela, where we called out the E. Imagine led changes that youre doing to a strategy, resulting in a one time non cash write down of 195 billion and a restructuring cost of about one 6 billion and this will impact doesn't have quite when you talk about even then will deliver a breakeven cash flow, but this is an important.
Prevented you bumped up the business and therefore these write downs that you take them.
Will actually help us from a strategy perspective to go fully into the electrification and the acuity and gave you I'm going to talk more about it.
This will also give us a.
Credit going forward in terms of lower D&A charge of 150 million per annum and also the head count savings that we're looking at a book with all the I'll call them definitely result in savings of close to 1000 100 million per annum sorry.
Despite these write downs for the network continues to be strong looks like once we begin so that was the first one of the exceptional items.
In the case of the MLP the sweet deal. So were the strong performance of the business. It's a significant improvement even well ahead of our own internal expectations.
The outlook remains strong thanks to the pandemic and our performance book together.
The goodwill impairment that you're taking the same period last year totaling 200 growth. We also had the onerous contract provision for volume from one off standard that is also being reversed and therefore.
There's lots of snow villa poorly performing but expense that'd be one and of course more to be achieved.
Subsidiary, they shouldn't we had the shareholders' meeting.
Where does meeting and got approval for that you are waiting the final in PMT approval, which is not scheduled on June 14th and we're hoping to get better flow from there and for most of them already comfortable with this let me hand, it over to Adrian.
Understood.
Highlights of geological from Adrian over to you.
Many thanks <unk> good afternoon evening to you all on the call so same format for us.
Actually its value as you said first.
Half was the week off.
Strong second half performance.
Particularly in Q4.
Can everybody hear me.
Particularly in Q4.
Thank you, 7.5% you see that EBIT in Q4 was mostly overwhelmingly underlying performance. So really pleased with that you'll see the PBT $500 million.
And the big free cash flow as well 729 million times full year results on the right you will see dramatic improvement to the previous year, even though FY 'twenty was impacted partially in quarter. Four if you recall next slide please.
Yeah.
Okay. So these headlines below that we'll get into revenue details later in the presentation biology has talked about the exceptional item and we will go.
Two the walks on cash flow as we normally do net.
Slide please.
Unimportance I wanted to make an exceptionally cause I, yeah, I don't want to repeat what balance. He said was look at our assessment at the end of the year was very close to the preliminary assessment. We made on February the 26th 1.5 billion pounds and just to remind you you know those.
Alex MLA image did not fit in to the re imagined strategy.
Not leap from competition.
We're all about being the best of the best not just competing so that's why we took the really difficult and emotional decision to cancel those programs. We are still working through the restructuring costs beyond the head count 2000 people and that's mostly about getting the right positions in there.
Get people into the organization with the right skill sets that's management grades now more people with specialist skills, which is fundamental to success in this.
In this environment next slide please.
Okay busy ones and said we wanted to show you several flavors of the retail data qualify at the top full year below look you can see the highlights since study it in your own time, but dramatic quarter over quarter improvement on China.
In part because Q4 FY 'twenty of course, COVID-19 in China first and therefore was impacted negatively but nice year over year performance in North America, as well, particularly in Q4 and the other regions are starting to build back they were limited impacts of course last year, but they are starting now.
Build back with a huge.
Or order demand we have at this point in time was almost 100000 customers waiting to drive vehicles, So very very healthy order bank going into quarter. One next slide please.
And this is it by family don't forget we talk a lot about how sales quality of sale and we're playing this back by.
Sales family range Rovers versus last year were a little bit higher.
Obviously, China is a good piece of that take a look at the defense data <unk> said, we would talk defenders Jan that 17000 units in Q4, our highest quarter. So far we told you several times about 5000 units a month, we have surpassed that already other data sets for you to focus on.
This page, 62% net vehicles were electrified in one form or the other pure <unk> Q2 <unk>.
So.
The pure ice vehicle content is reducing quarter by quarter and that trend will continue particularly net we brought out two of modeling P have vehicles that will continue going forward more of our vehicles will be electrified going forward next slide please.
Okay defend.
This is really dramatic I talked about 100000 orders overall for our families of cost more than 22000 orders NAV for the defender family, you'll see the uptick here towards the right hand side as had defended 90 came on stream stream at the end of last year.
The solid line there that is the retail day to 7000 cars in March So we talked about 5000 per month.
I start talking about six to 7000 units a month as that supply comes on wound car design of the year you would have seen that last time, we got announced was our women's world car of the year. So this is definitely a vehicle that actually gets appeal across all the spectrums and all the agenda and it's a brilliant indication.
What this organization can and does do this is the best of the best and that's what we aspire for our next slide please.
Okay. So you talk to us a lot about share. So we've added this page. This point few things to draw a route and share is growing quarter over quarter, but particularly growth growing stronger and those families, which we are focusing most on range Rovers and defend.
That's how the same quality of sand, we're not competing on total units were competing on overall profitability and this is shown I think perfectly by this page overall you can see in total loss share has grown from four 4% the start to the fiscal year to 6% at the end of the fiscal year.
Yes, and again, that's mostly around that defend the family and the growth you see in the range for over next slide please.
So while traditional walks unprofitability I'm just going to draw a few themes here. This one is quarter four last year of course, we recorded a big loss. Some of that was as a result of those COVID-19 provisions variable Nox in provisions we put in place a set.
Non vehicle market collapsed at the end of that yet and this year, the 534 million things to draw that we talk about health of sales quality of sale you can see a huge increase in mix.
Actually there within the volume and mix almost 200 million patterns within the quarter.
Dramatic data from variable marketing the other thing about house of sales of course, you cannot oversupply to the marketplace, we haven't seen oversupply in Iran.
That's helpful Knock-knee substantially improve because of that almost half of that last year number was as a result of the reserves we put in place, but I told you several times about the MAA less than 7% underlying number dropped to four 9% in Q4 with the headline number at four 4% eliminate.
Reserve adjustments.
I wanted to talk about and call out as warranty again, we told you about this almost every quarter, we've been very transparent and very clear about what our intention is and what's likely to happen and you'll see in the data here right 20 model year vehicles are substantially better than previous model, we said that mature at the end of.
Q3, and into Q4, and we set our warranty as a proportion of growth vehicle revenue dropped below 4% towards three 5% slightly under that $3 four per cent.
And then I won't repeat all the other pieces, but there was a big favorable year on year on exchange Sterling depreciated last year, which meant our euro denominated liabilities net dollar and euro denominated debt.
It was more expensive in Sterling that give us bad news last year, the other way Sterling depreciated post Brexit Brexit again, as we said it would.
And that's given us that optical improvement on revaluation, but great work by the Treasury team in terms of the hedging levels. We've had both on commodities and currencies, which of course have helped as well next slide please.
Full year performance adroit different things on this one volume significantly lower year over year of 120000 units down $1 2 billion of cost that mix improvement is partially offset that you can see the full year numbers from BMA and for warranty.
Wanted to draw out the engineering DNA here.
We've talked about this one as well and we did say to you the capitalized engineering would start to fall.
Net programs mature and you can see here really for the first time.
Mentos capitalization is lower than our 19th amortization that means with the supplement in the balance sheet on these programs and you will see in the backup data substantially less capitalization, particularly over these last few quarters versus previous years and that trend will continue.
We believe and then the full year exchange, which is a switch of the full year evaluation of the items I mentioned early on revaluation on hedges and on commodities next slide please.
Yeah.
Okay cash look at the Middle box again, Ive been asking you to look at the middle box for the last several quarters and see how dramatic our underlying cash position is almost 1 billion pounds generated investment now within that $2 $5 billion range more than $400 million in the quarter and we did reverse out.
Working capital losses of quarter three quarter, one as we went through the year. So that was behind the 700 million patents cash flow in the quarter next slide please.
Investment to enough volume was the guidance, we said $600 million a quarter broadly we came in a bit lower than that our guidance for next year is two and a half billion or so I think it's reasonable for you to assume plus or minus $100 million over the next years depending on.
Where those investments finally get deployed and crystallized, but we were lower than the target for this year, two and a half billion stays in place.
Going forward next slide.
Okay.
Charge, but as he said we've now finished the program we did exactly again, what we committed to do right. So this is becoming a theme from us we make commitments and we deliver on those commitments. We set in April we will generate two and a half billion dollars. This year and that would take the program up to $6 billion.
Did and it has.
In summary for the program over two and a half years, we took 1 billion patents out of inventory. We took almost 3 billion pounds out of investment laterally measured on a year over year basis, not the notional stop point, which we started off with and we took $2 1 billion agile several areas of cost strategic costs.
The Sapphire program all of the things we told you about previously so again, we did what we said we would go into the programs close but the power of the program lives on through refocused, which is substantially expanded the scope of the program as well more in later slides next slide please.
Okay. So I introduce the slides you at the Investor Day, I won't repeat it all like I did then but this is quite dramatic what the program is done we've effectively reset the investment on the structural cost base eight years now Joseph first column breakeven volume was 400.
25000 used in FY 14, we wholesale $4 71 significantly cash generative, but.
We invested and we brought more structural and more people and right through to the start to the charge program in 2019 at breakeven.
Cash position was 600000 units to that point and even though in that year, we had a wholesale number of the highest in our history, we lost substantial cash.
Charge started to bring that down pre COVID-19 500000, obviously at a dramatic yet in the year of COVID-19 as you would expect.
Artificially low, including some furlough money there, but the big point here is we never know we've restructured and we've rebalanced 400000 units. So we've reset this organization eight years and Thats before the power of the re imagined and refocused programs kick in fully next one.
Okay.
From my first three quarters before the program $2 7 billion in cash loss last three quarters of the program. One 7 billion in cash gain since charge started net cash gain is almost 8 billion patterns. So that's quite a dramatic turnaround as balance sheet has mentioned next slide.
Okay.
Those are the core finance slides I quickly go into the business updates slides. This is the same as last time, our electrified portfolio is now in the marketplace next slide.
Okay re imagined strategy look we took you through at almost two hours worth of detail on February the 26 on re imagined so I'm literally just hit a few highlights.
Re imagines that fundamentally to fix the problems. We've designed within this organization. So the first thing clearly.
Is that from re imagined as we need to make Jaguar great again.
The power of that brand deserves to be greater and that's our intention to actually do that.
We will be a copy or nothing.
Upgrade into modern luxury so and intend to repositioning of this brand.
With luxury materials as well as obviously a luxury external design all of that is in process. We made a lot of progress over the last few months will bring those details to you going forward all Beth Jackie will be from 2025, let me remind you and land Rover will have its first full.
As from 'twenty 'twenty four onwards, our estimation is about 20% of our sales will be all best buy 2026 with a commitment for a child pipe zero by 2036, that's the intention and the commitments. We made on February 22006, they will not change going forward net.
Slide please.
So how are we going to do it but obviously the first thing we're going to do is consolidate our architecture six architectures down to three and most importantly to alon drove a one jaguar that will enable us to design those brands personalities and specific to those two brands no compromise here.
No compromise so the freedom of the design and the engineering authority discreetly within those brands, that's something that other organizations and other Oems don't do as well as we can do this is a competitive advantage for us and we are not going to give us that competitive advantage.
Increased collaboration, particularly with that group with charter announcement will be made on that forthcoming not today, but forthcoming very excited about the speed of consolidation and synergy within the broader Empire and also working with external people collaborate.
To get the best we want to be the best of the best stuff, where you have to work with the best to enable and to actually do that and please don't underestimate and many of those companies want to work with us.
We are a brilliant profile company for them to wish to work for as well. So we're very excited about the collaborations we will be able to make in the in the foreseeable future and again when we're ready to announce those you would hear about it at that point in time, but we will also take on the other challenges we've created for us south excess capacity.
This is a production facilities, obviously, we announced on February 26, our intention to consolidate our nameplates within facilities and also to repurpose the cash some permits site. After we finish building the current range of Jaguar vehicles. There. So that's that's what we intend to do.
<unk>.
But under that modern luxury by design.
What you should judge us by net cyclists.
Okay mechanism, how are we going to do it that's the refocus program.
Because we told you before six pillars three enablers across all of those pillars next slide.
Let me draw some of it because obviously each time, we told you we need to build on it but I'm going to talk about one of the pillars that wasn't a focus of charge. This is pillar. Two this is program delivery and this is where we've really tie in the palace.
Item seven enabler agile work and we've introduced some agile specialists were bringing on agile people to add to our work force with rolling this out, particularly within the engineering.
<unk>, we've already started with hundreds of teams and we will have thousands of people working in those scrums those springs empowered to fix the problems that we have over the course of the next six to nine months, what do we expect we expect to significantly speed up our time to market you can see there.
But were actually committing to a 40% improvement and we also expect.
To improve customer satisfaction, why because the input into the engineers and designers are coming from several different sources into the individual groups and obviously the engagement to those work force and speeding up will actually improve the quality of the engineered solution and as a result of which we will spend less less time.
Means less less rework means less less iteration means less spend so we expect a 30% reduction in spend which of course will also help deliver those investment targets.
Send to one customer market performance, we talk to you in some detail about this two years ago, particularly into the U S market, but we have significantly scaled this snap under that in digital side of refocus, where we brought our analytics team and our robotics teams together.
With data solutions to the problems we have in the marketplace. We have also scaled our intention is two years ago. I told you that national sales company work. This is working directly with the dealers and you can see that again the commitments that we're making.
It's true that analytic solutions and making sure we're providing the right cars to the right market at the right time with the right specifications, they sell quicker with less marketing support around that we've already proven. This out. This is the scaling of those ideas very excited about our pillar five and everything that isn't embedded out.
We're from charge goes into pent up nine.
So the 2000 people coming on to the organization was the first decision we made but we will continue our work obviously in terms of real estate consolidation post COVID-19 and a lot of the other side of India towards the robotics team.
And to help our teams become more efficient taking administrative roles out replacing with robots. So very very excited about the scaling up of the program in terms of refocus on a fast start here. We've got the momentum of all the whole charge program into refocus which is why we are.
Committing to a billion pounds value in FY 'twenty two of this program next slide.
Still problems at that of course.
None of us will arrest until the planet's vaccinated against COVID-19, we know that the speed to electrification.
Enhancing therefore, we need to make sure that we speed up as well pellet to agile as part of that and of course, you know their supply concerns, particularly as a result of the semiconductor post COVID-19 and also the fire in Japan, which are the Oems have told you about.
We're not immune to then also but I didn't want to talk about the first half of FY 'twenty two will cover that in terms of our Q&A from a Q4 perspective, we manage these challenges quite excellently within our results as you would've seen in our intention is to manage them excellently going forward as well.
Right.
Next slide please.
Okay outlook are very similar to what we told you on February the.
<unk> six also revenue will be bigger this year than last year. So in FY 'twenty two more already seeing that in the first quarter of course, despite the headwinds. The challenge is the supply constraints, we're reconfirming, 4% or better EBIT margin for this year with <unk>.
Confirming investments to <unk> billion, and we are also reconfirming cash positive better than breakeven is just referenced here despite the.
The monies will need to pay on restructuring the 500 and some million.
All of that will improve through FY 'twenty four.
Underlying business is stronger than FY 'twenty, two it's those challenges, which you will hold us back and the momentum of that transformation program will clearly build over the next several quarters and we've got some superb product offerings.
Hi range Rover range Rover sport defend the 130 coming out between those two periods as well. So we're very very confident of being able to build not only our EBIT, but reduce and eliminate our debt and I'll remind you in FY 'twenty <unk> guidance EBIT margin is 10% or better not up to 10% 10 per.
Central better and Thats, what we intend to do I think come back to your balance sheet.
Okay.
Net slightly.
Talking about Tata Motors, Standalone numbers, you'll want to be seen or callout I would make.
Yes.
The spread between EBITDA and EBIT Arlington laterals per revenue start picking up.
On overall Europe, despite the two.
2% revenue was up 7% and EBITDA margin improving by almost create the books over last year.
A good place to be.
The free profit before tax before exceptional items net of a profit.
About the PV impairment reversal.
And that looks like.
Fred back with Guadalajara.
Breakeven PBT from there.
Our reported impacted by the fourth quarter revenue.
We saw free cash.
Cash flow of course strong per year per quarter level.
And from there also ended on a positive basis as we had guided earlier.
Thanks, Michael.
Same highlight maybe I'll just pick up one or two items here I think.
Bob.
A question on <unk>, if I look at the recovery starting to move from M&A activity in Iot. So it's multiple.
Things are starting to fire revenue.
With higher demand from and you're probably also seeing but can they look I'm almost thinking overall portfolio also starting to increase.
PV of costs.
<unk> sales that we saw in the last 34 quarters doing some EBIT.
<unk> growing up to 115%.
Volume growth that we're seeing on the EBIT flow.
EBITDA is the highest in the last eight quarter and EBITDA within touching distance of the double digit that we've talked about in the guidance.
And PV.
EBITDA at four 9% well ahead of the bid.
We indicated an absolute EBITDA higher from the last 10 years, so overall domestic business come through well costs slightly.
Oh.
The quality I think every line item with volume mix realization starting to book the one that's really applying all material variable cost coming from inflation on commodities that net fee.
And that is of course going to be an issue as we go into Q1 that's value.
That coupled with Lockdowns will talk a little bit towards the end of that from a.
Fixed cost control continues to be tight and that's what you're going to see a benefit coming of London's picking up and.
Overall EBIT margin of 3% per the quarter, though is something that we are quite satisfied with given the conditions.
Similar to <unk>, what's the central box, so that I think cash profit after tax so well ahead of investments and even on a full year basis. So the position per actually cut back on investment.
Right and at the same time, we are not being pedantic Avantek EBIT.
Dial up the next months, particularly BB actually started seeing growth come through.
I further working capital changes are concerned most of it from a base perspective.
We are reducing our inventory day, reducing our better days and we are reducing average ticket. So a combination of the despite bankruptcy starting to see working capital negative continue.
Our growth is coming from Youre seeing that number really is pure cash.
<unk>.
Hygiene point here at Q1, with the kind of locked down, but you're seeing this will unravel fall away.
<unk> growth comes back again, so that's just the nature of.
The game that we're currently on.
Excellent.
Right.
Net income.
<unk> already seen it go more spend more time on this other than to say that we are managing our existing quite prudent in current conditions focused on product and technology excellence.
This is a 6000 core target that we had given ourselves to deliver and against that you have done about 9300 Youll notice from the investment line, we did not meet the target because we divert that money for growth, which is what youre seeing on the PV side and on the working capital side of course, we will look good number there.
Overall market share is the fact that non mortgage goodbye.
Overall market shares have been sequentially, improving as the year progress and we did end the quarter at almost 47% share of its on a YTD basis number $42 four.
Draw your attention to the MSP market share improvement over the last four years, we've been consistently increasing their share and almost 400 bps jobs added over the last few years.
Iot all for continuing to increase.
Market share momentum as it goes forward.
Call out will be on small commercial vehicles that I think we have with our content.
We did end the quarter strong in terms of pickup in number sequentially. There was an improvement.
That is the number of episodic sensible growth.
And we need to ensure that we work on that and kind of what I'm getting buses.
Buses I wouldnt speak too much about where the savings are completely required.
Can you talk about.
The overall number actually embarked impacted by the small commercial written salient disproportionately increasing in the first half of the year and therefore that is what youre seeing is number non excuse us. It is just the nature of the game and therefore, we need to do a better job growth picking up so much in Lakewood share, which we are committed to.
Excellent.
Financials.
Commercial vehicles.
Clearly the revenue number going from 90% for the quarter, even on a sequential basis, the number of starting to increase.
Good news EBITDA at $9, one we talked about on the GAAP between EBITDA and it's starting to narrow.
Overall on a full year basis day, because breakeven despite the first half.
Europe has seen those numbers there.
Let me hand, it over to Bruce in terms of policies, the current quarter and what would've happened in the last quarter here shortly next lately.
Yeah. Thanks <unk> so.
<unk> summarized.
The key points in the last quarter. So I think most of the end use sectors showed a strong recovery.
Of course prior to the onset of the second value.
I think our <unk> product superiority in the value added services continued to be well received by the customers.
Non <unk> sequential market share growth, but also our net promoter score.
For the third year of unsecured and has no move from 65 to six years, but at a high level and continues to grow.
We also did well in the non retail business, we were able to improve our spare parts penetration by almost 500 basis points during the year with John So therefore is it.
Our contribution to the revenue.
We also increased the penetration of <unk>.
Connected.
Platform.
I think we have a penetration of upwards of 90% in medium and heavy trucks.
Those were the highlights and of course, we were able to reduce the break EBITDA breakeven by 25% gearing during the year gone by permitting.
The current quarter of course, I think we are non challenges of secondary to COVID-19.
There we are focusing on.
Ensuring the dealer health. So we have provided support to the dealers to.
Various initiatives.
<unk>.
Would it be so ensuring that the kingdom Turkey.
Youre also giving wherever required support on.
Interest on the stock were to be in and support.
We are supplying vehicles to boost geographies and segments, where the demand is not.
Impacted much and continue to monitor our pipeline on a daily basis.
Terms of somewhat connect that continues to be on our digital business continues so on virtual engagements with the customers across all the segments.
We have also formulated user growth standard operating procedure.
If you take those two all the channel partners in terms of demand fulfillment. So we are aligning our production to <unk>. So whatever it has been the retail and <unk> seen a drop in retail and you can see some of the.
Right.
Highlights <unk> one is the drop in diesel consumption when they've seen a drop in the past guidance.
<unk> also seen a drop in the 100 reduced cash out of the vehicles or operating the marketers.
And we have immediately aligned overproduction, who redeemed starting from the month of April 2nd book Nate.
You're doing so even in this month and even this month I think production is lower than that.
We are ensuring that we are able to achieve.
Effectively in all the plants by having sufficient shutdowns and even on the leap year, working day, and having the 60% of momentum.
We are looking.
Looking at.
Hopefully the spare parts and international business order, which continued to be good.
Brokers in some of our international markets also then have been COVID-19 driven lockdowns.
Soccer, maintaining strategic inventory of critical parts, I mean, especially electronic items, which have been in shortfall through.
Throughout the last year and reported.
Looking at moving yields from the task force, which is monitoring the vector.
When the cycle of percentage.
Also their operational requirements.
In terms of cost reduction and cash from the recent we carried forward the learnings from the business continuity plan that we had last year.
Direct material cost reductions are being expedited net.
Q1.
We have deferred capex.
As regards our budget on plan.
Almost 30%.
All the fixed expense reduction that we had done during the previous year has been put into action again, so that you're able to sustain.
The benefits.
The Capex the capital allocation has been revised book products.
A large part of it now moving on Vuzix is true programs.
That's what we have done.
Aligning our sales and do you see the changing market environment through the business agility plan.
<unk> biology.
Backlog growth.
Moving on to passenger vehicles.
Slide two.
To call out here.
Attention to the growth numbers industry declined 2%.
Grew by 69% in automotive BV and the EDI business within that group from 118% so significant shift in numbers there.
Market share from a point that we talked about also draw your attention to the penetration of Evs in our portfolio. At this 0.2 per bank is now up to two per cent.
And are likely to increase further as we go forward. So therefore, we do see significant.
Change happening in the consumer segment, and we're very clear channel model, we will lead the BV disruption as part of India.
Thanks, Mike.
Financials.
Delighted to see the EBITDA numbers are consistently improving in the PB business volume book, starting to come true mix is improving and.
EBIT margin starting to come down as operating leverage improved rather.
Operating margin leverage kick there.
We believe.
This trend is not fundamentally coming from the fact that the consumer is clearly looking to break free and this is a shift towards personal mobility, the beauty and within that argue for the portfolio really firing all cylinders. So the consistency in growth that youre seeing is likely to continue.
What's happening in Q1, the theater or a different discussion, which will come to a non stop one site in Australia to talk about it with you.
Thank you <unk>.
So second wave of COVID-19 has of course adversely impacted both demand and supply side, but the good thing PV businesses that we started the quarter with from very low inventory.
And a very strong booking per train for those things.
And therefore.
One book so.
Amit.
On a decline.
We have therefore articulated.
Needs to own the business integrated plan to navigate effectively in this uncertain period.
And actions have been developed in three areas, which is on demand creation fulfillment as well as profitability.
On demand creation.
You've seen that because of progress of lockdown in the country since middle of April.
It has really impacted the demand side.
And obtain the retailer bookings dropped in the range of four.
Nearly 40 to $45, but.
But to me it is trending at a much steeper drop.
We can be I would say less than 20% of showrooms and channel Krishnan.
And therefore demand is expected to be significantly subdued in the quarter one.
And satisfaction book and some other demand creation failure closely tracking the <unk> segment from changes opinion.
On the demand side and keeping out of chicken production completely and then come back.
Using digital government constitution distance based.
Net loss to one so.
Leveraging it through platforms like <unk> and hyper local marketing initiatives.
Ensure that even in the lockdown, Peter we are able to keep getting the floor to bookings.
And since you've owned less than 10 days of inventory at the start of per quarter.
This was due to demand.
More than our suppliers and.
And therefore, we are using this month to increase the stock in the channel and bring down the waiting period for our customers, which will pay.
Pretty high and therefore, this is an opportunity for us.
So from the demand to adult.
Oh, sorry on the demand fulfillment side displacing sales got impacted primarily due to.
The lockdown all the major auto question, especially Mato strong I'd sales.
From a second connected close to the true badly impacted.
And most of the suppliers are operating extra people some manpower mis.
And also a semiconductor supplier.
It is what we have seen in this quarter.
While it was a concern in Q4 also but this quarter. It is for the country to them from that.
There are concerns over the coming months.
And therefore zone.
We're trying to maximize production.
From the demand and strategic inventories from you're continuing with the production among our three plants.
And <unk>.
We had taken shutdown for the force for five days.
Mainly index enhancing our capacity further from.
Supporting the growth that we had planned for this year.
So some people want to maintain infections.
On the profitability from Oh, it's going to be impacted by the more operating leverage in the commodity inflation that ESP.
And therefore, we have an issue could tight controls from fixed cost more attraction ticket.
Structural cost reduction efforts, which is now pretty much an institution made from ongoing initiatives for us.
And we have also taken price increase which is in line with the industry, but the.
We are the only place we have also given the price protection.
Customers.
And that basically is headed basin.
<unk> income solutions to the strong booking pipeline that we have.
That's from my side by the EBIT.
Thank you Les net slightly.
A quick trip into automotive finance they ended the year pretty strong market share 33, PBT of 2% to six growth significantly better than last year and return on equity, which is the metric that they are going after of nine 2% GNP is also below five and npls below four.
The key one is the cost income ratio has been price.
Control at the same time focus on collections, where we sit at almost 5% in March.
I really would like to draw your attention to the last two lines out there for the next few months, we do expect to see a challenge and the standard is different.
Because it's not just about the transportation business that isn't getting affected the collection infrastructure in terms of people, who are going out there and getting collecting.
Almost 900 people, who have been impacted by COVID-19, what people or feet on street and unfortunately, the loss picks up them into automotive financing in there.
Before we are wanting to be very careful with respect to our people and that will definitely have an impact on collection efficiencies, we're already seeing it come down quite significantly to almost 80% level.
Last month, and therefore, it's not it's not an easy time out there in the in the field.
And we are working closely with our pizza our customers our people to ensure the industry, but it is fair to expect that Q1 is going to be a significant pain and <unk>.
Our recruitment into all of the policy would be to find ways to alleviate the stress. So this is going to be a critical quarter for all of us from that perspective.
Lastly.
Our outlook I think.
You can see it but Q1 FY 'twenty will be adversely impacted by Lockdowns Johan.
Torkington agreed financing myself clear.
Clearly impacted by Lockdown semiconductor smokers, we have book.
A couple of growth.
Paul.
So a strong end to the year is something that.
We were very happy with but then of course Q1, we need to deal with the stress, but we will come from this fall with the fundamentals of the business as you've seen are very small and therefore that makes us even more resilient in terms of performance and we will get there and we are not changing any of our plant in <unk>, because what we need agility and therefore that is worthy of focus strong.
So with this let me stop here and hand, it back to your guidance for questions that you may have.
Thank you.
We start our Q&A.
Bill.
Sure.
Yeah.
So when you walk quickly explain for cash.
It's a process.
Yes sure.
For all the participants on the webcast can be used per chatterbox, often appearing at the bottom of the screen to submit their questions provide speakers.
We'll wait for a moment value.
Uhm.
Okay, let's get started.
Next question is from which is net.
Mutual funds agendas for you for.
For <unk>, the Q4 implied ASP it seems to be lower by 5000 pounds quarter on quarter could you walk us through the cost per bit Sam.
Yeah, Okay. So let me go back to them.
A couple of the points I've made in previous presentations different markets have different peak periods different times of the year quarter three actually.
The peak selling period for China.
And therefore, there was a disproportionate value within our China business in Q3, and don't forget that means SUV for an SUV five vehicles at the highest transaction price vehicles that we sell to.
Q4 is different Q4 has a peak selling period in the U K and not such a pretty challenged period in China.
And of course U K is about SUV too and SUV three vehicles lower transacting price is lower gross vehicle revenue and lower margins as well. So you really need to start to look and plot, whereas peak sales periods off Rab peak regions, which will give you a heads up that our average selling.
Price in Q3, unless theres something extreme happening will always be higher than Q4.
Thank you Andrea second is from predict for that and I'll take the question Tayo Motors has been very clear that the equity fundraise will be the last three book despite such a good performance on both Jan RMP among stand alone or the rationale of thinking of our countries.
I think you're absolutely right.
The last option that wont change in that particular from and also to just to be.
And to add that the board has therefore, the physician to a subsequent board meeting and the reason we had to we had an AGM coming up from a flexibility perspective, we wanted to keep all the options open and that is why we have not been clear in terms of what are the instrument that we will raise in almost every day and that is something that is part of the discussions per day and therefore the board.
Decided we will defer to a later point in time, given the performance that we have price here and at the same time, we shouldn't forget that we are in the midst of COVID-19.
A fair number of challenges that we have outlined and the reason we wanted to keep our options open book this because its an AGM coming up and therefore, those enabling resolution you can notice them to read the nodal carefully Europe, specifically quarter doesn't enabling resolution and that then gives us a good one year not one not having to go back to the shareholder.
Of course, not subsequently from there.
On the board, we have decided to defer it so therefore.
The background to speak to it.
Our next question is from Yogesh, otherwise hedges B C general volume growth guidance of better than FY 'twenty, one seems very conservative considering the base effect in FY 'twenty. One can you please provide more flavor.
Would it be a 20% plus kind of growth.
So.
Youre absolutely right. It is very conservative and the answer is yes, it will be better than 20% higher than last year.
Okay. Thank Nomura on.
<unk> guidance of your point ready to forecast the company has been reporting channel EBIT margin of around 7% per the last two quarters last.
Plus you will get the benefit of nearly 100 bips from restructuring costs taken in FY 'twenty, one, but why is the guidance for 4% EBIT margin what are the key factors that can take the margin is down to 4%.
Was there any reversal in residual values for maybe a separate question maybe even after this one.
And the next day.
Yes sure yes, so let me take you back to <unk>.
Half to FY 'twenty, one to answer that please let me remind you what we told you. So far we told you Q4 underlying is about 7%.
Q4 is always our best quarter.
Volumes were 123000 units.
So it's closer to an indicator of a normal quarter, but Q4 is normally stronger Q3 don't forget what I told you we were six 7%, but we had a lot of.
Reversals of residual values and PMA in Q3, and the results that our underlying was a couple of points lower so I think it's reasonable free to use you to assume based on what we've already told you.
Second half performance was close to about 6%.
So why 4% plus while a number of factors come in going forward, we don't yet know.
The level and the scale of impact from the semiconductor challenges that the whole industry faces. Other Oems have told you a specific numbers, we're not going to do that and the reason why we're not going to do that is because we haven't given up on it.
Alright, we are working tirelessly to enhance our position.
Every week every day every week and every month. So it does actually know where we'll end up from a volume perspective in core OTA in quarter, one while I do know is we're optimize everything we possibly can net last year in quarter. One we lost 13, 5% EBIT margin, we could be EBIT loss in this quarter as well.
Very small if we are so it will impact the full year.
He is a key points here on Q1 will impact the full year, however, depending on the speed and the balance of the industry response to the semiconductor build I don't know how much of that we would then get back in Q2, Q3 and Q4, while I do know is if we can overcome those challenges we will be stronger than.
<unk>, 4% and that's why we said higher so it's speed of recovery for those challenges and whether we can cash back units or the two unknowns today and I really don't want to mislead you, so, giving you a baseline of 4% or better and depending on how the industry can respond to semiconductors debenture will get bigger.
And so our balance sheet.
And second question for you again was there any reversal in Brazil value for Gen. <unk> in USA in Q4, do you see more coming through in Q1.
So we did reverse some some of the.
Residual values in the U S. If I would have made all of those reversals actually within quarter four so no more to come. However, we did book some reserves in Germany. So the net reversal in Q4 was very.
0.2% that's whole so most of it is done and we think also with the changes we made in Germany, we have contained and trap those losses as well. So overwhelmingly we do not expect <unk> to be driven by residual value improvements reductions going forward, while we do expect and this lean market.
Of under supply and significant demand is that underlying underlying there needs to be better than we've actually previously communicated that was 6% or lower so we do expect that to continue particularly with supply shortages it'll be close to 5% of the first half as Mike is my estimate.
Thanks.
Question back to you again.
From <unk> capital credits courtesy.
Could you help understand the moving parts behind the gross margins of Gi loss sequentially.
Quarter on quarter fourth quarter weather per quarter.
Much of the impact of higher raw material costs, and what all went into offsetting back if you could quantify please.
Yes, so I'd refer to the response to the first question ITD overwhelming issue is the mix of the vehicles, we sell and should be 45, Q3, SUV two three quarter four so even though volume were to increase we would naturally expect gross margin to fall quarter three over.
Quarter four over quarter free for those reasons mix of vehicles and regional regional strength.
We know that.
We know that.
Commodity prices are increasing is it not yet having a significant impact on our numbers on our margins. In fact Q4 from an overall material cost perspective was lower as the proportion of growth vehicle revenue in quarter in quarter three.
So.
Ltd to date, we have a hedging strategy in place it will increasingly hit as we go forward and those hedges roll off over the course of the next six to 12 months is it becomes a particular impact from the data we will call out at that point in time not from the data today.
Thank you.
The next one is from day, one day more collateral swap.
Question is on India and pick that up can you discuss your fundraising plant construction effort, including equity considering the sustained sharp improvement in both China and India why do we need on any fundraising.
The first question I think Dinesh I'll answer that it doesn't enabling growth in that retail sales.
In this environment.
Basically there's too many things coming at us, but we wanted to be sure that we have the options of the Eagles and enabling provision and at this point in the board of that project.
Obviously, the strong performance there.
And we will revisit that if required so that's the way that's the way we're looking at it.
For the $9 from channel gross cash saving almost of the actual cost savings.
Referred to it in slide 37 day rates.
Constant profit of 2200 growth all of that how much of this are obtainable.
<unk> seen are sustainable because they.
Chris you've mentioned.
Breakeven production with non <unk> 25 per cent for the commercial vehicles passenger vehicles EBITDA improvement also includes the savings that are coming through here.
But do keep in mind going forward, we need to take a look at those we're going to be the commodity inflation, that's coming from these become the source of money to manage that.
Inflation that is coming at us.
And it <unk> like on the product pipeline post handle on what new models can we expect growth are.
Clearly that's something that we wouldn't want to discover the right forum for that will be the auto Expo.
Once we have made up our mind as to what Youre going to show up there. So we will definitely share it with you.
Our next question is from Stephanie Vincent from Jpmorgan Hong.
Much of the semiconductor and raw material issues, respectively, hitting their quite 'twenty two guidance agent.
It didn't really on a per cap.
Yes, I think I have actually already a balance sheet within my 4% or better question, which I covered semiconductors and within the margin question, which I covered.
The raw material, so nothing to add to previous questions.
Okay.
Second is from the next one is from back to the balance sheet and the capital wireless scene led by one off restructuring cost of 500 to five day.
That will be neutral.
We are confident of maintaining operating cash flows and capex of $2 5 billion at last couple of quarters levels.
<unk>.
The next one is on India, So Adrian we're going to pick this one up.
Yes, yes, I'll take that one so yeah, we are actually confident but unless I Miss I would say this and I have to give you a different set of numbers right. So the bottom line is our commitment is to reduce net debt and we won't go backwards, we will have a challenging quarter. One for the reasons already discussed, but we will get that back over the balance of the year and net debt was one.
<unk> 9 billion at the end of.
At the end of March we expect at the end of March next year to be slightly lower but for the moment that guidance with the uncertainties, we've already mentioned.
Is maintained as a cash flow positive or better than breakeven. Despite the 500 some million restructuring costs, you take that away and have been 500 plus million patents cash flow.
The question is for India, India, Capex outlook for FY 'twenty to.
It seems higher than importantly, people's updated earlier.
For the year is more like 3000 to 3000 per unit growth the 1800 roles for FY 'twenty one.
In the flow in the midst of a pandemic, where we are planning our business continuity plan haven't seen three quarters of performance. We are very clearly seeing that once the pandemic. The zone. The lockdowns are definitely a demand resurgence that happens and therefore from this time, it's not a business continuity plan for business agility plan.
And therefore, we want to be flexible and we can obviously situation dramatically alters the navy would be.
Well not hesitate to go back to the drawing board on this or at this point in time, we see the current issues are temporary and therefore, we intend to generate positive cash flow. Despite those capex investment day, and they are going towards products and technologies that are going to aid growth. So.
We will not be per day.
And pick up more quoting a number of these government we are watching it and moving it dynamically in line with demand out there.
We see it.
Next question is from Rakesh Kumar of BNP Paribas.
Profitability continues to improve agenda is there a possibility that we could increase our capex plan to accelerate the margin side any timelines and what share of sales come from lease sales in U S. In Europe, and one of the big share of leases we have seen historically.
Yes, okay.
The first one is unlikely we got a real clear plan, we are setting out.
We are making sure that every element of that plan is fundamental to the success of this organization. We don't actually think we've missed anything.
Throwing money at this doesn't necessary speed you up actually so the agile approach the scrums that springs, the empowerment and making sure people are responsible to fixing things first time, so that will speed. This up and we've made a commitment actually that overall in time, we will be 40% faster than we are today.
That's a huge improvement a huge commitment and that's what we maintain at the point in time as we go forward.
Eliminate had debt.
Just as the Investor day, as we eliminate had debt and then decide what we wish to do with the cash flow positions at KML friends at artisans friends and our board will discuss what we wish to do but the current plan stands the investment guidance standard yourself.
Lease sales Adrian what share of lease sales come from lease sales in U S. In Europe, and what are the picture yet.
Again, we're overwhelmingly consistent with the rest of the marketplace. So U S is at highest lease market. As you would know followed by U K and markets in Europe, mostly Germany I do have some data in front of me would suggest it's about 80% in North America, but that's consist.
<unk> with the marketplace.
Okay.
Next one is from Ghana.
Other often systematic.
Let's take the <unk> piece of personnel do the Pvp is later for general lower D&A and employee benefits start reflecting from Q1.
We haven't gone back to the free drug XP thing should we expect <unk> will focus mainly on profitable model second question.
The last one on <unk>.
Ron I'll pick it up for <unk>.
And we have an EBIT waterfall and scirocco PBT you already have that in the slides, but look bottom line, that's where you can use that in case you need more clarification do reach out to her back you Adrian for the first two pieces yes.
Okay. So let me take DNA first of all Okay DNA over the next few quarters will be similar to the second half last year don't forget the MLA mid vehicles were not available to be introduced in the first half a day at the point, we would have introduced them 12 months 18 months time, that's when the reduction in the D&A would have kicked in of course.
DNI will next actually change when we introduced our new models range Rover and range Rover sport in 12 to 18 months time.
Employee benefits as we release those 2000 people over the course of the next three to six months and yes. The cost of pay per will actually start to fall as about $100 million per year, we believe but in a particular quarter that filters down to 20 or $25 million. So I don't anticipate that to dramatically impact the quarter.
Data you will see.
Then on <unk> I think the profitable model piece part of reminders.
We called out that we are looking at profitable growth here.
That's how it will be done so no change in strategy day.
Then on PD impairment, yes. These are non cash cost. The question is are these non cash cost.
These are welcome to non cash absolutely yes. They are.
Yeah.
Moving to the next slide.
Perfect.
Ronnie.
Given that the first land Rover beds will come in 2024 do you think it may pose a risk in models such as evoke undisclosed port where competition is already in the process of launching bet.
Whereas a greater vote can have great discuss for them.
Platform. Shortly afterwards, so if it were to the time to new vehicle delivery is quite short so that wouldnt be a concern for us.
Okay.
Again on geologic from Dinesh once again multimodal.
July realization declined sharply quarter on quarter by 9% one of the key reason behind it I think.
As already explained it extensively in the previous question before maybe that.
Indicative.
<unk>.
Order book of 100, K units per Gina can you give some flavor on which models region and makeup of the order book is this due to supply side impact are we done the write offs to streamline the new normal in the business.
Finally, an effective tax rate question as well for FY 'twenty two.
Okay, Let me, let me take them.
As U.
As you evolve from study <unk> thousand units of latest been granted 2000 units a month the phenomenon that business most of those order and process happening in UK and Europe, and that's where 60% of the order book is less in China unless in North America. That's just a buying phenomena and then logistics phenomenon Orion vehicles have to be there.
In place because of the pipeline to get the math is so long. So mostly you can your particular emphasis on IP has vehicles. They have had a dramatic impact in the marketplace. Some of those vehicles in some markets in Europe have up to 12 month waiting list four so clearly those customers are going to have to be.
Super patient for us. So ultimately yes. The answer is it is it a result of the supply side and as we work through some of those supply issues. Let me just referenced from the moment semiconductors, but they're also P. Have issues. Then we would expect those order books to actually start to normalize in <unk> nine.
Or 12 months' time, but we don't need writeups to streamline the new normal business. We believe so we don't have anything left that we're aware of right. We really think we've had a <unk>.
Strong six months review of what our strategy is and we think we've communicated that to you and we think we've actually made the adjustments we need to make and as you would know our external auditors have been working alongside us for three months and they agree with us. So I don't expect any additional tests for any of the element.
So we've actually communicated as a part of a re imagined to date.
Tax rate expected in FY 'twenty two.
See the tax rate's been pretty damn weird over the last 12 months is so big and losses are non.
Non.
Allowance of deferred tax assets as we become more profitable.
Honestly that deferred tax position will change and we'll be left with a couple of phenomenon will be left with a phenomenon called overseas. We expect obviously the tax rate will now become unprofitable overseas. So we will be paying taxes, you would've seen this time around and we would expect the deferred tax asset to start to normalize the effective tax rate also I suspect that will happen later.
This year as our profitability growth in H two.
Got it.
So next one from.
Aditya Maccario is GMP securities.
Congrats on the market share gains with land Rover.
The impact that Tesla is having on the luxury market.
As our volumes are not firing at kit can you give some color on this thing.
Maybe I can take this one balance sheet.
Gary speaking.
I think that even if we don't talk very offered by competitors in this type of decision.
The reality of if you look at it.
<unk> day is that they are not really in the luxury markets.
And more and more.
They are less to a certain extent, we started with the high end premium and now if you look carefully to the retro costs associated with volumes you will notice that it's more and more green to recruit.
Which is giving us a huge space.
Okay. Thanks, Gary.
<unk> from <unk>.
Sorry for again can you share an update on what's happening with Bnb BMW partnership on <unk> share.
<unk> quarter last week, where I took the thing that day, a lot of exploding with BMW ongoing book over the partnership.
Can you share anything that is on the video.
We continue to work with BMW and as such we are permanent exploring new opportunities concerning our of course, our core motion I mean do you use.
Of course interest.
But it's clear that we have stopped also our <unk>.
Although we returned the IP on our joint ownership.
Thank you Craig.
<unk> from Pramod Kumar Goldman Sachs.
Given the acceleration from pure EV demand led by competition launches and regulatory push are you comfortable with your business and is there a risk of gen are moving out on demand and customer mind share on EPS.
Okay.
Well.
I think what is key in aggregate answered in that spirit has worked for one of the previous question is to be on time against the real demand from our customers and today, the <unk> medical where consumers is very much from as you understood.
We are glad about that and at the same time, we would like to see that the easy stuff.
It's really to take off worldwide and Thats why we are fine with our timeline.
For sure. We are we are clearly and we enjoy the fact that with our refocused plan that we can see an acceleration of our processes in the company to seamlessly and excellently deliver what we promised standard we are going to make the best use of that.
Thank you Peter.
Question, maybe this is.
Our grecian childish.
In terms of can you. Please guide for India, CV and PV growth outlook, how do you see it given COVID-19 second day of impact on semi urban and rural India.
Chris you want to go faster in China, If you wanted to get that next year.
Yes, he is balanced.
Sure.
<unk> seen the last.
While I think you had indicated.
With DIY and almost 700 to 800000 reported by 'twenty two.
In which we had predicted Q1 being at around $170000.
Okay.
At the end of margin also in the month of every day.
From a growth moving second view.
Which has created.
A slowdown in the demand.
As we got into me I think the slowdown has been even more as many states I wanted to lockdown.
And in previous feedback the global industry volume.
And then just one component.
True.
To view, a clear prediction per year.
You can see how this gets unlocked.
This is something that youre monitoring on almost on a daily basis as the state's unlock in the fleet starts moving.
In the country and get back to the people who live in that unit position who indicate.
What's likely to happen.
<unk> share it is very difficult to provide a formal group, although there could be some scenario. That's true then.
When the economy gets back to the <unk> levels, but as we stand here now.
It's difficult a year and we'll do we'll be able to get this 35, 37% global industry volume growth that we are indicating for the exact number maybe below.
For the next analyst call.
Volume.
Yes sure.
I'll just take this the Brazilian beauty business.
Moving to.
That issue has been 40, plus improving from 60 plus growth.
Last year, it was slightly tilted towards the Google where again the share by one or two person.
So far in this year and we have seen that Oh.
It really is the only month, where we saw the convertible expected higher and that was primarily on account of the lockdown enforcement being a bit weaker in proven areas as compared to women.
But the jury is out in terms of you know how this quarter issue is going to play out as far as the ruble is concerned, but clearly we would expect that.
We would would stabilize around 40% on lead this financial year also.
Scott Gordon from niche prediction for PV industry is consumed.
<unk> to be in the range of three two to $3 four as.
As per <unk> to meet the who would be no.
We're aware of the COVID-19 secondly.
This might to decrease by 250000 per 300000.
As all of.
One scenario that has been projected but as the pent up demand, which is getting benefit from these two months.
As well as general one has seen that all the.
The shift towards postponed mobility might be coming in both stronger given that the customers are expecting multiple waves of COVID-19 and therefore, there is greater to concerned about their well being and therefore there might be.
Boston mobility ship phenomenon that one might see.
And therefore the.
One can see the margin that this can be a corridor of losses that we are going to see in Q1.
But as far as Google is concerned we would still think that we will will remain around 40% of whatever demand, but we've seen the PV industry as far as type of mobile, Wisconsin. Since last year are it mixes more pivoting toward settlement given that the young.
Customers.
Getting more.
And also excited with the extra from design and the safety aspect of this as being more appreciated modern center. So that has been as far as book.
Multiple CP business.
Back to EBITDA.
Ask the question alone from.
Moving on any timeline you can share on that day, we plan for the India cognizant.
So far no division has been taken numbers from what element something comes up we will definitely share it with you.
Question. This one chip shortage.
Can you give some more color on the chip charters, how long will this last how do we plan to mitigate the same and also does have the effect of it all our plants.
First of all our plants.
Yeah.
Karen would you want to pick that up yes, yes, I can take detriment of course I will not.
Repeat the commend from <unk>, which were clear enough I believe on the on the shortage in terms of impact.
I think it's important to say that true during the first part of this crisis. The team did an incredible dropped to mitigate that risk to the extend that.
The impact I think on the Q4 of last fiscal year was about 7000 units, which was quite limited we showed big consequences and our strong figures as you could see.
But from a crisis, you're always room and you find opportunities in force what I'm learning with the team is about our tier two and tier three hour microprocessors suppliers and the way they work the way they operate and at the end of the day.
What's happening is that we need a change in the way we are operating our supply chain and its exactly what we are preparing at the moment to have a structural fix to this problem.
Thank you.
So what you want to just give us color on the implication from that money the ability myeloma population.
As already mentioned <unk> in the fourth quarter because of the dedicated.
The dedication the commitment of the teams in PV in CV, although we have Susan shortages could actually prevent.
Apply impacting our delivery position in order to give us the chance to actually meet the strong demand has already highlighted.
As we as we expected.
Couldn't get worse and felt pretty comfortable moving the situation to a certain expense under control.
The situation has already mentioned by <unk> underwent its life has worsened.
To the extent that we see across the book significant constraints.
We are now working with the team of based on the database for submission in the first quarter.
More or less so on the daily daily volume.
The mitigation of the impact on production what does it mean.
We have actually look too deep.
And to the ease of use in order to understand which kind of chips from which kind of supplier would actually use per hour tier two tier three tier supplier.
And in order to see remember disciplined screen, which of the ease of use and therefore, which kind of components or modules could be impacted.
We started to establish direct contact with the chip suppliers, although we are not contractually linked with them.
But since we have established relationships from the past.
To ensure that our modest demand.
Got prioritize cost net.
Net.
And perhaps were made available.
The body chip suppliers to our second tier suppliers in order to have transparency in the first instance, and to a large extent to the largest possible extent also free.
Control of the situation. Nevertheless, as already indicated by theory, the situation of Tata Motors is not different to the one that trade off it's a daily struggle a.
And it requires lots of detail to reboot.
<unk> review work.
Effectively on a daily basis by the team.
In order to keep book the supply chain moving and to limit the impact. Nevertheless, we expect to situations as mentioned per will get worse in the first quarter.
We expect some kind of an improvement in the second quarter, but it wasn't because of the factors mentioned by <unk> that we have started to actually build some stock because of some of the.
Shutdown this sort of you have experienced in the last couple of days because of the COVID-19 situation in India.
And so that would be hopeful that we can actually get back to peak with action in the moment, we get out of the lockdown.
And thirdly, a call with us.
Generally the expectation of the industry that the second half of the fiscal year, we are going to see a gradual improvement of the situation.
To what extent, but I think it would be too early and would be too much of a kind of crystal ball approach.
As of October we are among the DC.
We expect at least the gradual relaxation of the situation on the wafer growth.
Thank you. Thanks number question from truck shop.
Right.
Jana commodity costs hardest commodity contract book annual Semiannual also how does the commodity hedging is different from revenue hedging.
And if you break raw material costs into commodity and value add how much from the commodity space and this would be of the total RMC.
Adrian.
It's there.
Then Bruce power of the Treasurer Jaguar land Rover. So I'll take that question. So I think on the first piece of it how does the commodity contract works. So I think it's different across different commodity. So it's really difficult to answer that question in the context of <unk>.
This this event I think on the second question around how it's commodity hedging different I think one thing I'd say is generally the horizon is shorter so.
On FX, we go out four to five years.
In practice with commodities, we really only going out about two years and quite a bit reduced percentage in the second year I think the other thing that's worth mentioning is the hedge accounting is different so we have hedge accounting for the FX. So essentially both the P&L impact of the hedge and the cash flow both occur when the hedge.
Matures in the case of commodities actually theres not hedge accounting. So there's an immediate mark to market, which comes through our P&L and that's why you see that tend to see that number in our profit bridges, but then the cash flow a flows when the contract actually mature. So there is a difference between the timing of the cash flow and the profit.
And then I think on the last one just one as raw material costs as.
As a percentage of RMC I don't have that number.
Just on my fingertips, but what I'd generally say is it's a second order kind of number I think that the commodities as a total value of components that we buy is smaller than you would think just for an example in Q4 year over year commodities was worth 19 million pounds unfavorable despite.
The significant moving commodities that you've seen.
Thank you Beth and I think.
Second the second part of the question is can we assume from here on there won't be any extraordinary charges like I think Adrian was already on foot.
Let me take a question from from all the <unk>.
<unk> capital <unk> reduced by two bps year on year can you sustain it considering our options over the coming quarters all day.
Mindful healthier.
Second quarter automotive can pick it up.
Thank you.
Yes of course, yet so.
The health of sale approach without taking out <unk>.
<unk>, reducing dealer stocks I think we took Q a lot through that detail so the per.
Previous two presentations that continues to be our intent.
We were surprised by the scale of the impact to the marketplace from the speed of that impact.
It's certain that when we have more supply concerns and demand concerns today.
Over that period of time will be at levels lower than I'd previously indicated hence why I've said earlier expected in the first half a number close to 5% rather than the 6% underlying we were had previous to that as we grow back demand then we will see how the marketplace responds later in the year, but in the first.
Half of this share it will be certainly lower than the 6% guidance ive.
Previously given to show.
Thanks Adrian.
I can I'll take that this is on collections in Tata Motors Conagra two questions on that two people have asked the same question How's It performing force.
The COVID-19 assay sales.
I recall I mean, as I said in the presentation.
Ended the March quarter at 105% kind of collection efficiency.
This has obviously come down to more like about 80% to 83% in month of April and we are expecting to grow this to go down even further.
It will be a painful quarter for automotive finance and navigate because the issue is not about just cash flow. It's also about feet on street in infrastructure. So we are working through those things.
This comes back on track from the earlier.
Ensuring the safety of our people.
Second question is on growth of CV, which I think <unk> already answer.
Let me connection from you and the second question I answered.
The question is more to you actually share price.
Price increases taken in CV and PV.
So far this year, how much of that or Ottoman practice likely in Q1.
When you want to pick that up duration challenge <unk>. So.
<unk> already taken a price increase of around one 5% zone was January.
This calendar year, which is Q4 of FY 'twenty one.
And the non Holistically, we took.
Another increase per.
Sent across all the models.
This quarter, so thats the kind of price increase.
Already taken.
In terms of raw material impact from fourth quarter.
Can be divided into two groups one is the precious metals, which moving block because it means there is more internationally.
And therefore that is kind of going up and we have one six monthly contracts.
The second one of course is the speed.
Although deferral lead to very interesting prices is also dependent on domestic convention.
And as of now with the auto demand going down.
You do have any dialogue in terms of the steel price increase.
The net institution on the commodity cost in this quarter.
Yeah.
Yes, so I think the second part of the question.
The response will be the same copy as far as the price increase is concerned.
In Q hurdle for FY 'twenty, one we have taken about one 6% per weighted average price increase.
And then in April and May we have taken additional one 8%.
Average price increase.
<unk> reported.
Thank you.
Maybe it's the time for one last question from the sharp claws Indian coming early can you shed some light on the CGM business improvement plan, what's the timeline for EBIT breakeven for that business.
Yes of course balance sheet I mean, if you look at the data and in fact, the charts I should have called it out actually the year over year chart to show quite a dramatic improvement lost share over the previous year I think the number is $99 million improvements you will see that so I think my first response is it's already happening.
Already happening the health of CGI law is starting to improve its nowhere near where we wish it to be.
You know what the semiconductor shortages in CJR will teach us a lot of things because a lot of our turnaround model and the import business.
It was a result of deliberately constraining the pipeline huge improvement in transacting value reduce PMA and gross margin some of that may be enforced from us over the next few months, we'll see how the market responds, we hope the rocket respond favorably there and the other side of this is the power of the charge program, which we talked about.
As well last time last time Teu will now introduce the charge program, formerly two CJR working alongside our charity partners and colleagues and we'll just be tougher on spend right. We're just pizza from spend because where there's still opportunities for <unk>.
Structural cost reductions CJ at all so you think about how we've applied charge within Jaguar land Rover, a resetting of eight years of Astro true cost base, we havent done that yet within <unk>. So there is lots of opportunity.
A bit more time, because we have to bring our partners along with us of course, but I do expect us going forward to find ways to improve our viability profitability in <unk>, but it was a dramatic turnaround in the previous 12 months of police, we Shouldnt Pos offset volume.
Thank you so with us having so.
The doctors are eight o'clock here.
So thanks, everybody from TMR engine oscillator, and more importantly, thanks, everybody who attended the call taking the time to true identification and understand the auto book much appreciate it real estate sales in town and I wish you all the very best to you and your families.
Thank you and look forward to speaking with excellent value for them.
Thank you.
Thank you on behalf of Tata Motors.
That concludes today's conference. Thank.
Thank you for joining us and you may now disconnect your lines.