Q1 2022 Tata Motors Ltd Earnings Call
[music].
And gentlemen.
Good day and welcome to the Tata Motors Q1 earnings Conference call.
As a reminder, all participant lines will be in listen only mode.
During the course of the presentation, if any participant and Denso asked the question.
And they can use the bulk of option appearing at the bottom screen to submit.
Great questions to the speakers.
All the questions will be taken up at the end of the session.
Please note that this conference is being recorded.
I now hand, the conference over to Mr. Miao got 1 day from Tata Motors, Thank you and Oh, what do Ya man.
Thank you and good evening and have you.
And we have looked at them on debt I would like the way you can give on what you want as far as and when you do the Basque country.
The Navy has it that the theory polluted C or the gold and galore.
It's the P b biology looks here for that and with it.
Mr Adrian and I did see and for Jaguar land door instead.
And I said each block.
And they're not the motors.
Mr. Shao Lee Sandra President passenger and electric made for the business started Milton and.
And I believe some day and the simulations team.
And when it started the session with the quick overview of of the financial and business performance from management followed by Q&A.
Well, what do you chose and instability.
And they get it back here.
So let me back of the repos.
My name is called for all of you.
Paul.
And Oh somebody the.
The only spend about 30 minutes.
Okay.
And the ballroom on the as the you'd want that the fight and the awful, but all for Q&A and we want.
Moving.
Yeah.
Public statements Oh.
Oh no.
Exactly.
Peter on the cause.
And the people of Clos and despite the the mic and.
And 1 day.
And talking about.
For us isn't the passenger vehicle side, the the launch of the cash Doc additions of cost that force.
And 1 of the.
And so.
And then of course of imagine program continues on pace and Andrew lots of long wheelbase variant of the order book and of course, what are called Autobahn quite the walk on the health and good execution.
And I was optimistic.
And slightly.
Oh, it's fair to say, the there's been a challenging quarter for us of having.
The vulnerability to the pandemic and coming out of the pandemic, but the list.
This quarter had to contend with the semiconductor stoppages and has been the second wave of Lockdowns and yeah.
The wasn't true though.
For the 2.
The state of the world as debt.
On a year on.
Basically the number of of flattening because.
Haven't seen the big so for weird given also the people and all of those for us.
And therefore, you would most of that growth of about 132% are obviously within the whole hub.
What kind of revenue.
About the specific cells on the Kohl's no other competitor the he sells a lot of walk on the bulk of it.
The things on the year on year and.
For those that even before exceptional items of the coupons on for some of the still of loss EBITDA.
The 8.3%.
Minus 1.3% and basically showing the operating day in the deleverage coming in because of the 1 that's coming off on the.
Quarter on quarter basis free cash flow outflow of about getting those on close most of the coming out of working capital on line.
And the people and it's coming off exactly.
We did see growth coming across all of those people.
And some fish and other.
On the profitability basis.
The second improvement in day, Lucky and MIT and others basically kind of more spending on who can talk about what's the.
And on the net automotive debt.
The.
And the underlying growth of about 34 calls on frozen all the way.
This quarter did the deteriorate or almost 16000 of it is coming from working capital.
The change after the ball and of the because of course delivering about for the 7.
7000, and close so that is the situation of on net debt, we do expect to see does the mcdonough.
Based on the second half on lot of that as long as they come.
Okay.
Oh.
And what do you.
And you have the body next slide if you would please.
Okay. So these are all kpis across the same information.
And she just took you through for the group.
And so the point he made we've included the quota for FY 'twenty, 1 and I'll remind you and all of you that was the really good for representative quarter for us.
Yes.
Obviously, I concerns, which is why it's a really good compared to retail is actually in Q.
Well I think Q4.
The normal pattern for us so ex us.
It reinforces the retail level, we have and the marketplace.
And 2 day, a tightening of supply issues is very strong.
Obviously, our revenues and by wholesalers and retailers you can see already an impact.
Revenue in Q1, which of course will continue into Q2.
And beyond that the loss actually of the country and 10 million zero and 9% negative EBIT was slightly better and I was indicating 2 weeks ago on the calls.
And I'll take you through the details of that.
On the down 9% held the see suppressed by the volume levels as well on the free cash flow of what's the billions of patents out of the smile.
Within the 4 million the numbers, which we announced on the sixth of July of next slide please.
Okay. So most of that I've already said I think the thing and I didn't say it was the.
EBIT Bank just a reminder, that's the 110 thousands of units at the end of June of 'twenty.
29000 defenses for that product continues to be incredibly strongly received and the marketplace and.
And number over the last 2 weeks of stayed about the same level next slide please.
And they used all of the quarter 1 retail is the hundred and 24000 units by major region. You can see a dramatic increase year on year of course, this time quarter..1 last year was significantly impacted by the dealer closures and the isolation of the buying public along with.
On sort of us the.
The regional split pretty much and he would predict pop from the China, China of course return to normal but sooner than other regions last year, but even in China.
Year over year basis, we were 14th and Hyatt.
Oh total of 68% higher 124 and.
The rest of thousands of units home sales were more impacted of course.
These will be impacted sooner.
And we have a pipeline before we hadn't done the 2 out of dealers had and politics.
And and the important point that wholesale increase of 73000 used for dramatically.
Half the retailers normally the only different shouldn't be CJR. The all of the joint venture of course.
And what you would expect retails for about 15000 units and this quarter.
And we see a big falloff and wholesales and I think the key point to take away from the slide now on pipelines and the idea.
And that was ex the falling you will begin to see falls and retail sales from call to change and <unk>.
And please.
And this is the slide on the stocking levels.
Take you back 12 months, the Blue line at the top day.
That's the inventories on our retails retailers.
Let's start on which of course and pass into customer hands. It was high at the end of the <unk>.
April may of last year of cost instead of just retailers were closed and we did deliberately take it down.
Ideal levels, we told you about the on the number of occasions at quarter, 2 and quarter 3 lost.
As you can see that with the dealer stocks around 60000 units pay for and a lot of since March.
All of them from about 68000 units down to about 42000 units.
And that enabled us to keep the retail is high and Q1 from that level, we would not be able to keep those retailers as high and quoted.
Last year of the on the wholesale stop the brown lines of stop but we are.
Obviously, the error on my way through to the day list.
And the already to about 30000 units you can see what's the allowance when the plants are closed in April and May last year.
And again, the number can drop a little bit but the pipeline is very very thin.
And therefore going forward for the foreseeable future production will be a better measure of both wholesale and retail levels with the exception of CJR next slide please.
Okay. So retails.
My family.
And the cotton.
And driver of cost doing incredibly well, even though those vehicles.
The 7 and 8 years old and the bigger ones are obviously, the vet all of us doing while also.
Up 56% quarter on quarter and defend their entrance 12 months ago.
So that's why that number for the defense it was break even levels and the previous year.
We had a good 17000 units remember I told you for a while for the needed to be 5000 retailers that month, we went through that and quarter 4 and that's continued in quarter..1 for the appeal for those products is very strong.
All of these of both discovery and Jack you ever up year every year or so for the reasons mentioned, our electrification numbers were 66% and quarter, 1 and let.
Let me remind you that was 62% in Q4 and 53% last year, so more and more of our units actually asking and electrify.
And just as we.
<unk> said that you want to gain next slide please.
So this is the bridge, which takes us back to prior quarter profitability, We lost 413 million and Q1 last year, obviously heavily impacted by Covid I think of all of this would be expected.
Oh for volumes.
Richard I bet, 30% and the quarter just gone.
And so significantly higher and the same quarter last year up about 36000 units you can see a big number that's the volume and mix mix is richer than the previous year.
The improvements in parts and accessories as well within the quarter versus 12.
2 of them.
But we did have restrictions on volumes and CGI and our don't forget China wasn't impacted as much.
And last year as the rest of our regions and the emissions numbers and needs calling out as well.
We've got a compliant portfolio we've explained.
And so to you and you know when we had free demand in terms of those T have units and free supply at the end of last year.
And we reduce the fines and the reserves however.
The semiconductor and reductions and supply reductions.
Touching on our ability.
And for them to build compliant units and the quarter and you see that within the all the banks tend to which I've shown you previously the 110000 units and the all the bank.
The biggest or the banks in Europe, and the U K and underpinning those all of those cuts.
Customer requirements for hand, overdone and he heads.
And both of those units and pass the note with the we will have the compliant pulse of yes that was not the case and quarter, 1 and will not be the case in our coated too.
You bet.
The other things highlights <unk>, DNA and talk consistently about V and the over.
Over the last 2 years.
And when we on this time last year, we're at 7 and the half the send some of that was 1 of incremental reserves because of the marketplace be negatively impacted by Covid, we knew of fall.
Out of 4.7%, let me remind you and Q4 is for them and again in the.
Ally and data.
So the 4%, but the actual reserve recorded data of 3.1% and the quarter. So that drop was more than we were anticipating particularly towards the end of the quarter.
Coming through which improved our actual.
Quarter, 1 reduced and quarter 1 losses of <unk>.
Warranty of it.
For us just as we said we are suffering actually some added important you did as the result of the changes.
And that relationship with Europe, you see it and that and some commodity cost increases with a net material cost you see the net.
But the big year over year increase is actually in the category, we talk of structural costs.
Batteries and all of that is for a lot of money, which we took from governments around the world and 12 months ago that was of course was the jump of retention policy and it served us incredibly well over that pay rate of unfortunately, we weren't able to retain all of our workforce through the re imagined changes, but that's definitely helped to protect.
The subs over the critical period last year and.
And as we since then and let me remind you almost 20000 people last year of <unk>.
Of course, you know the amount of cost spend overhead spend fixed marketing spend was much much lower and suppressed and you've all seen the increasing not back to normal levels actually but.
Tire and previous she is the other things of note here is that our engineering capitalization continues to be lower just over 40% in the quarter and again, we've explained that chi before the policy was changed and FY 18 and mandates.
And that just changes will ebb and.
Much of it depending on where we are on each of the product cycles. What's happened here is we've completed the defense and we've completed 20 of model year, and those engineers and moving over to the new architectures, which have not reached the capitalization point yet because of the maturity of the product all of that is exactly as we've explained to you in previous years operating.
Flow change of bad news, because sterling appreciation offset on the hedges we have in place that sounds and 10 million lost no for 9% underlying the breakeven point here is about 90000 units.
And I read the underlying is lower than we're indicating you know a.
A couple of months of stomach.
And that's the start of us just to optimize and maximize the position of.
And supply shortages next slide please.
And the circumstances. This wasn't the really good result on cash so the.
This is out of traditional walk the.
The 2 numbers and the middle of the cash.
Cash profit after tax on the investments, we look to balance that and obviously overachieve on.
Within $74 million of doing not on just 84000 units, which tells me and underlying cash breakeven was just under 90000 units and we've said our intention was 100000 units.
And the and the Investor presentations and temporary and also in the net year and presentations, so again with starting to optimize that position and difficult circumstances.
While we made the cash losses in the quarter was the working capital.
You can see it that we're not building cars and that for and payable.
At the end of Q and much lower and you also know that will reverse the point, we stopped building more cash to exactly the patch and you saw last year, 1 and 45 billion outflow of last year's hit on the bottom line and look the working capital number was $1.1 billion and let me remind you last year and that $1.1 billion.
And reversed itself within 25 billion and on a full year basis. So once we're able to build more cost that working capital number will begin to reverse the unnecessary mix.
Next slide please.
Investment, our investment numbers and <unk>, 2 and a half.
5 billion full year, I've said ebb and flow of around $600 million of quarter. It was slightly under $600 million and I expect that to be the case, and Q2, as well and and investments to grow and Q3 and Q4 as we start to bring our new MLA high products range of Us first.
2 of the marketplace and the Finalization of the second half of the year.
Next slide of slippage.
Okay. So on the business update.
And so.
Obviously, a big focus for this organization is re imagined and of the transformation.
Nation program of refocus.
This program is much much more complete and holistic and the fantastic charge program. We have you see the pillars that it really is engaging a lot more people and we engaged during the the.
Turnaround programs across the 6 pillars.
With the free enablers in the <unk>.
Really exciting news here with <unk>.
Starting to see value generation and value creation, particularly and pillars 5 and 6.
$150 million, we recorded in the and the quarter. If you were to go I won't take you back to the previous slide, but if you will.
Go back to the previous slides you will note of what we're <unk>.
Recording here is less than the value we saw in quarter..1. So we've attempted to subdivide the quarter between what happens because of shortage and what happened because of the power of the program. If I were to added up everything and you can go back and and record.
And the parade and Theres, almost $350 million actually worth of reductions quarter on quarter over the previous year weighted.
Recognizing the $150 million of those the refocus program. This is a really great strong simple start for this program. This is just the first full quarter of cost of refocus we also.
Also saw improvements on quality and to 3.3% and drove an $18 million improvement and we're starting to see improvements on pillar, 3 although and the volume and constrained environment and the <unk>.
Absolute savings on material cost of course are going to be lower than and the free supply environment. So.
The size of that number will partly be determined by the speed of recovery of volume and supply and half to kind of great first full quarter to the program and <unk>.
And we assure you of momentum is building.
The momentum on this program is absolutely.
The next slide please.
Okay. So the big news this quarter for us for semiconductors, we covered a lot of that.
And our announcements on the sixth of July and also and the special meeting and we had with a number of you on the seventh of July of this is the page we use the headlines on the strong demand and.
On the corner.
And 1 for retail for take you through that and.
<unk> sales were up versus previous year, but importantly down 27% from the level of we would've expected 2 of.
The passed over to the dealers and those orders worth of expected and underpinned sorry for about 30000 units.
The team will.
B.
Worse performance supply quarter on quarter, 1 of lots of the quarter 1 happened towards the end of the quarter, including New news at the end of June as we talked about.
And we can see July production has been impacted quite significantly August was better than July and September spaces and.
August we are starting to see the end of the quarter better than the start.
Our volume.
Sales prediction and the quarter slightly higher than and I told you back in.
In 2 weeks ago I said at the 60000 units, we think were slightly higher and 65000, but broadly and that 60.
60% to 65000 of range I also indicated at that point in time. The problem was the fixed in quarter..2 we are taking a number of actions and tortured through all of those 2.
2 weeks ago, we have of mission control Center, which is a permanent center of activity and energy.
Which we meet the.
The level twice a week the re.
Has been the rigorous engagement right led from the FERC by TRA La actually today sure.
Arizona The road he is listening into the call, but when we get into the Q&A. Just just just be aware of that he has and a different locations and myself so and requirement.
The board of light Passover for him to make appropriate comments.
But that's.
Engagement is obviously at the first tier level era of contractual points Africa and much beyond the end to end pipeline right back to the semi conductor manufacturers with fully engaged with so we have true visibility.
For a more importantly, they have true visibility of our requirements and there is no filter and that down through the answer and pipeline.
We will begin to prioritize the vehicles that we produce the non.
We had 110 north is therefore, obviously, we want to make sure we do the right thing and provide those cost of customers since we can.
And 1 of the new orders, we take will start to re prioritize the highest derivatives within Nate and place and if we have to choose between nameplate more valuable name and place of course.
But how big a big drive the areas to it.
Increase the allocation of supply to Jaguar and land.
Land Rover.
For plants, and we believe we're starting to make traction and progress on that although only a small amount is coming for is incremental and Q2 of those 5 units. So far next slide please.
So the outlook page and this is a difficult 1.
And you want to say more but we're not and the habit of misleading you. We have added more information and 2 weeks ago. So the revenue of those 65000 wholesales of about $3.7 billion pounds of.
And I've told you already and breakeven point and Q1 was about 90000 and might be slightly lower than that and Q2.
Based on obviously 65000 will be negative EBIT margin and <unk>.
And 2 and half and and we do not plan to delay investments the absolutely full speed ahead on introducing those new products to the marketplace and free cash flow will be up to a billion outflow in Q2 the actual.
The slightly lower than that but for the moment. If you hold that number obviously if things were to significantly change we bring the information for you.
<unk> revenue is difficult because we're not clear yet on the supply, but it will be determined by supply because of those customers the weighted because we do however expect quarter.
The state ready to be batteries and quarter, 2 and quarter for to be better than quarter..3 so it's reasonable to assume as we start to reduce the breakeven point again, which we will do and half 2 towards the 80000 unit level will be positive EBIT and the second half and where all of survey free cash flow positive.
At the point with the more units because obviously that working capital piece will reverse very very quickly and our underlying breakeven points and have been brought down to a level, where we're not that far away from the September activity to actually be and cash positive territory no change in guidance for.
Quarter of 24 or FY 'twenty 6 why are we super confident about FY 'twenty for for the reason on the right hand side.
This was our underlying data and half to FY 'twenty, 1.6% EBIT optical was just over 7 percentage you would know.
So we feel very.
And to put them if you draw the line between <unk> to 'twenty, 1 and FY 'twenty for as soon as we get through this.
And I would first of all of the participants to please stay connected the line from Mr. Adrian Mark and has disconnected.
And finally step and Hamburger, obviously of having a problem day.
And let's see here.
For the the numbers of underlying number on the page 2 gives us the confidence back from a margin perspective, we are talking of the rate table. So I haven't been the same current semiconductor issue gets resolved.
Starting with moving the domestic would be and improvement in EBIT margin.
And that's something that should play through and a number and the.
Of course from a cash flow perspective as well.
And there it goes.
And the second half we added almost 1.2 billion of cash and you put that could also lead to an all out of the year's progress from second half of the quanta on Wix.
So, let's then move on to Tata Motors.
Exactly.
Overall, the revenue of the Barclays and telephone calls the.
And obviously got impacted the vacuum and even for the last few quarters are coming through quite nicely did face of stumbled on it.
And because of the we have 2 lockdowns that we have and therefore back and resulted in full sales coming off from 1.9 to say yourselves and units for Borgwarner.
114000 units the sharp drop there and that translated into revenue is also coming off on 20000 cost of about 11000 of course, you have on year of flattening I wouldn't cover that.
And the overall EBIT margin of 1 point the Fremont EBITDA.
EBITDA margin of 1.8% kind of the 7 point earlier and.
On the.
The free cash flow of 8000 and negative almost entirely explained by our working capital and Mike and exciting.
On the key callouts as part of the 1 of them and actually we can talk about and little bit of market share for the life of 10.
Passenger of it because of it of the.
At the standout for us.
The order book up of work with the 3000 units Greenstone E. D of course, so really the rocketing non penetration of the 3% of of the portfolio you can point to person when it goes back for.
And the highest ever quarterly sales of thousands and so on and units and then moving on stronger.
Profitability of the see the EBITDA was.
Breakeven with the volume is being impacted and the operating leverage as well of inflation playing on debt and on PV. The 4.1% of the continuing progress we see cash flows almost entirely explained by working capital with the very strong liquidity the effect on the nation of growth.
Exactly.
Just the waterfall here compared to last year on the volumes are recovering and shopping and.
The.
The deterioration of the vehicle for us for this come on.
Inflation, particularly being greater.
And when it's all of the precious metal cost and grief and on the fixed cost the lockdown.
Like last time, so we have kept all of them lately.
And I feel there for revenue in the sense of.
And the Mexicans on DNA the play out of there. So we have not stopped for any actions here and it all sort of a bunch of and metrics.
And she is picking up but that was needed to ensure the piece of it on subsequently.
Conscious choice of the time of a business of agility plan and it has the things of a capable and unlike last time.
Exactly.
Okay.
Cash flow is very similar to the <unk> story right on.
And for taxes, and that's going to be just out of the 2.
The band and.
And therefore, even at these low levels of volume for this business with all of them.
Cash breakeven, which is the good deals and everything it's clean and working capital and.
And the combination of their move trade receivable and inventory all of them going the other way and.
And the inventories.
And particularly of functionally built on first of all to ensure the the semiconductor of water, whether it's coming out within the manufacturing costs and demand and sort of call.
And the payables, just the absolute New Orleans being low.
Thank you.
And there's some spending on track.
On T cells of the people who.
And of course embedded in Mexico.
For the land some.
Some of the industry went towards the lower and didn't seem and relapse.
But on track.
It's Mike.
We wanted the commercially with the business the market share is the key measure that.
And then.
The series has been doing very well for us. So then all of the third year of note offerings of the market share of income.
The increasing and the quarterly picked it up further to about 62, 7% and I'm quite happy with the way the kind of degree of and progressing for us and I'll see if there's value and all started to increase market share and the cause.
Put simply picking that up and that's another good 1 that's coming through of challenge has been spun commissioning of equals.
Brian on the drop of items site talk.
1 of them whenever you look at the CDC aliens it used to be only and work with people. Some of the business now almost at 65, plus and other business given the current economic conditions and they have any of them moving chance and not sort of lower level. It does impact the overall market share of the 40 points of bankruptcy and we don't like the shape and the.
And Charlie.
Actions on the space.
And for that.
On the Bakken Bad last year, and we did.
And on more similar to the previous year and at the same time the theory and want to really go ahead of that so look the luxury on the part of your phone.
And for the remainder.
The ceilings has almost evaporated and the.
Of.
And so.
The second half of the scale of buckets and come back again at constructively and.
Slightly.
How much of it.
For the key callout the beats.
Between the retail and wholesale broadly the same on the and they're going on.
Particularly let's say move the quiet there and.
And revenues obviously impacted.
Corporate and the fallen a little.
Market the D C.
The EBITDA breakeven with the disappointing for the business with very comfortably costing towards the double digit EBITDA margin, so combination of lower volumes and commodity inflation the cost of brief and hopefully the since talking about recovering from some of the quarter onwards EBITDA.
And those are just the fact of the operating leverage.
Okay.
Just a comment on the business.
And the ratio with you.
Thank you <unk>.
Good evening everyone.
Who.
The first quarter of the financial.
EBITDA of course.
On a going up and down so the stock in the month of the brain.
The second wave of Covid and the volume has actually dropped by 50% or of the month of March.
And then further in the month of me and there was another drop of 50 per the same so from margin.
March to me and the volumes actually dropped by almost 70 type of thing.
But the good thing is in the month of June the volume standard picking up, especially in the second fortnight and 1 saw.
Almost.
The 94% growth or Mi, which means that the volumes and June came back with Brilinta.
And the.
The overall level Q1 volumes were 56% lower than Q4.
But at a very good level as compared to the previous Q1 of FY 'twenty..1 and then we had almost the complete lockdown, so local and lockdowns across the country and.
And actually helped the the econ.
The economy.
Can you and we were able to sell volumes almost for enough times of last few on.
And as <unk> mentioned, I think the eminent CB, United and CD market share momentum has continued.
And which augurs well for us I think the.
The focus now is on Suvs and pickups as the balance sheet in check.
And I don't know overall level.
The free have started improving towards the second for NATO for June with the EBIT builds and increasing diesel consumption increasing or in.
Internal metric of for the Chubb Jackpots.
The recovering.
As far as the.
Street rates are concerned I think they are also improving.
Below the demand and the month of May.
In terms of.
Commodity inflation and I think this is something which we keep on fighting and as a result of this and we had to take 2 back to back price increases of 2 and half percent peanut brittle and almost up to 2 and a percent even.
And translate.
This is in addition to the cost reduction and towards the new starter the.
Accelerating for the business.
Steel inflation and also some inflation and the precious metals.
And with the increasing prices for for diesel and gasoline when there's also steam and increasing penetration of CMG tools.
So the independently.
And Unfortunately is not limited to a few buckets and the country with the T&D infrastructure also improving.
So many areas and the country and the penetration of <unk> increasing.
Because of the profitability of the transporters under stress 1 saw the sentiment index of transport.
Penetrate and also bring down in Q1 and.
And the transporters sentiment index of medical who of bonds 1 of satisfaction with the current conditions and the second 1 of the expectations from the future the satisfaction with the current conditions would actually and they can do which means the transport of complete.
Completely.
And for the paired with the current scale in Q1.
But the good power partnered walls.
They were optimistic about the future going ahead, and Q2 and it's true.
The government infrastructure perfect continues.
And this is driving the demand the dip.
And also and segmental.
The second of the Sema and steel and mineral we also see the e-commerce, the continuing to Google, which is for both up to hub is the level of my distribution.
In terms of of Liberty of credit I think the financial collection ratios.
And to improve on towards the end of Q2.
And after a good.
<unk> approval of me and this is also therefore, the late to increasing the availability of credit and convergence in the month of June.
Moving ahead.
With the deal.
Diesel prices and where we are on the freight rate the transport the profitability is still a concern it is still below the levels of <unk>.
All but the free trade zone continuously increasing with.
The demand increasing and the demand supply balance of being restored so.
1 bid for looks like.
And the transporters and profitability improving as we go ahead.
Semiconductor of EBIT.
Continues to be a focus area. So.
And managing it for more water whom of.
Perspective, and we are looking at almost every component of the semi.
Semiconductor growth and tracking it on daily and weekly for Nike Monkey business, depending upon.
Our reported.
Of the parties or what is the inventory with us and we have taken multiple steps.
And.
Engaging directly with the semiconductor suppliers.
Spot buying on for semiconductors from the open market.
And we're also developing alternate sources to ensure that at least towards the <unk>.
And half of the year on year and a better position. We've also build inventory of for critical semiconductor based sponsor and Q1 when.
Tier 100, Guangdong.
And also I believe you are looking at design interventions.
To optimize the semiconductor convention of the footprint and the overall vehicle.
So these are all the steps <unk> taken in the reported Q1, where EBIT is better of course, the demand and also go on to bundle.
And the difference was the beauty of demand for Q2, and you seem to be.
Please better but as of third this is something which is being tracked almost on a daily basis.
And coming to the next challenge the inflationary pressure, especially on steam and.
And the precious metal continues and.
And so on.
On steel and commercial vehicle.
And therefore, we are the having.
Having the significant dry towards cost reduction by Repurposing of lot of our teams to ensure that we are able to pull out.
And whatever amount of steel convention as possible and the floor of reduced the cost.
And finally I think the.
And with the <unk> singer area of buses still continue to have a very very muted demand.
There has been the could fully to some extent and ambulances, but otherwise all of the deposits continued.
<unk> continued to do very very low.
The only green shoot there is the manufacturing potential employee transportation for the manufacturing sector.
Seem to be doing well.
But all of those segments, whether it is employee transportation for items sector School buses.
You and intercity transport is something which remains.
Okay, but I think gradually the things are improving as we had also seen last year, but the Q4 wall cash.
Operator, you better same thing we expect that.
Sales into the head the.
On the bus demand sort of started coming back to some semblance.
That's the.
And natural and Murray for any business, but let me back to you. Thanks.
Thanks Rich.
And I'm pulling on the passenger vehicles.
Market share of tens of thousands of 90 of height.
And the penetration of <unk>.
The green are starting to tax of 3% for the quarter.
And the.
The thing that I think we are seeing all of our segments, starting to do well, particularly market share price.
And the CV segment of up almost 800 bps.
And the strong response coming from mix of Ontario, and the provider.
And the.
What we are noticing on the EV side.
Several of the overall quarterly sale of the portfolio of fault and foundry and.
And market share losses.
This quarter. So good momentum building up on the customer with the business that it continues that way and Kathy.
Okay.
On the financial.
The.
The greater attention for the wholesale and retail number.
Wholesale higher than retail and a conscious choice.
The dealer inventory levels had dropped precipitously for just about 6 day and we have built it back for about 17 days compared to industry is looking at anywhere between 30 to pockets of activity.
Yeah.
So for we intend to keep it around these levels at the spot and time that still the lately.
For our call.
And if we can make progress.
But that doesn't work and what level of control and profitability of course continues to do well.
And 1% despite the slow volumes for that.
The business is very much on a couple of on.
And the sort of improved performance, even further as equal forehead ex factory.
<unk> over to you.
Thank you for energy.
And as biology has already spoken about the last quarter performance.
I'll share with you the actions that we are planning for and Q2.
And as we've witnessed progressive recovery in July and.
And the <unk>.
And expect the quarter to be reasonably better.
And the same quarter that we had seen last year and on sort of since Q1 of disconnection of yours.
So on the demand generation side of the have identified certain micro markets.
We are systematically working on for Christy was to drive growth.
And also working on.
Certain supporting interventions to recovered and.
The segments and geographies and Chad.
The 12 impacted in Q1.
And as you know we have.
The upcoming tests of season and to meet the most out of it and we have.
Plans for the first of all campaigns and also on.
Our presence will be sent and idea.
And the charity starts in September to provide the.
Better visibility to our products ahead of the festive season in October the non but on source.
And the ligand for the philosophy of New Forever, we have been and will continue to launch exciting new product interventions.
The hashtag Darko is what belongs.
And this month is 1 such example, I would say on the.
And <unk> getting excellent response, so there won't be more such interventions and this quarter on sales.
So on network is key to our growth and we are systematically strengthening it in terms of reach of in terms of.
The low customer experience processes and also chairman of <unk>. So these are the actions.
Actions that we are planning for on the demand generation side.
On the demand fulfillment.
We have progressively enhanced on capacity and the last 2 quarters.
And we should be able to now realize the gains on the back of and the strong demand and balance you also mentioned the boat.
On the semiconductor supply has been and ongoing crisis.
And the best strength to mitigate this through creating alternatives and.
We have been working very closely with our supply partners.
We have new product lines.
And we are trying to accelerate the work on the same especially those millions of witness and high demand for example, <unk> and answer is.
No question and really moving very fast.
And given the supply side the.
The risks due to various uncertainties and the environment.
We're also building strategic inventory for the on the identified confidence.
As far as the profitability is concerned we are keeping a strict control on cost as.
As for the business agility plan that we have done that.
And a supply constrained environment and certain product segments losses and thresholds. We are also trying to best optimize the mix to drive for better profitability.
We have of.
And we have also been organizing more than 300 ideas.
The education bookshops and the last quarter, we did.
Involving more than 1000 employees to drive cost erosion ideas.
And we are going to further accelerate this and this.
Quarter, 1 and so.
Finally, given the continued pressure on for the rising commodity prices.
And be taking price increase too.
Potentially offset partially offset the same.
And this will be done in a manner that we keep the competitiveness of our products impact.
So this was a quick update on the actions that Covid business has planned for and can put back to another day.
Thank you Liz.
And all the turmoil of transport.
With all of the slump who'd been on them.
And for a segment of the business got significantly impacted this quarter and.
Unlike the last kind here and we had on collection infrastructure and people are getting impacted by the pandemic and are more than a total of 400 and factored by Covid and Unfortunately, the last couple of 16 of thing.
And so we have consciously taken of course slowdown for victims of it.
The Vegas cases predictor of Pico.
And that of course brief in terms of credit and efficiencies throughout the property.
The Lang Lang chocolate off of.
And the good news is and I'll give more.
And then the 9 kept us and the whole people vaccinated our infrastructure at all.
And well and truly on track and in July we are already seeing 101 person the collection efficiency coming back again and.
And this meant that the interest shocks of the roof type, 1 and 3% of 12, 3%.
Due to the lockdown.
And what's kind of the same time on that.
And so on and there was the Brooklyn and almost 3 months.
And the.
On block of stock ticking on BNP for this kind of the most of the flavor from RBI.
So we are going on in terms of protecting our people and.
And we also ensured that our cost income ratios remain tight even in this environment and.
And we now expect to see a significant reversal of on vehicles.
All of them and the current quarter of collection efficiency and pick up but.
And this has been on from from all of the portfolio platform for the talking about the finance team.
The next 1 the next time.
The overall outlook relative to summarize and I think much situationally and we see continued improvement of vaccination rates pick up the plan.
And of course is 1 of the challenging semiconductor of issuers commodity inflation and.
The intermittent stoppages and can lock volume and.
And we do expect performance simple progress on these buckets 2 onwards.
On July 8.
Of the already covered it but.
We do intend to manage all of the supply.
The change the stockpiles priority for.
The debate execute the re imagined and strategies as well because of that.
And the refocusing of the already covered it for us for.
So as things pick up of seating and the bulk of it on.
All of the free cash flow for all of its true.
Is the key priority and overall level.
And it's automotive I think how much of the way too.
On the hearing too.
Market share of across segments and the C. In particular the chemo.
And for cleaning of the country. It accelerated the sales momentum of the PSC and the.
And you need the waterborne and greater penetration even further.
And the setting of the charging infrastructure on priority.
And the estimate.
And the profit and margin.
And hopefully the basis.
And this is what we have to face so happy to take any questions that anybody else there.
Okay moving on to the.
Okay.
Yes good.
The questions I think the first 1.
Just couple of Korea, sorry.
<unk> the aggregate China sales have been declining for the last few months of the reason for the above also of a luxury car sharing.
And China.
And the article and I hope you're on.
Sure.
On a GAAP hopefully you can hear me now apologize, we obviously fell off the call at some point Jordan the end of my presentation, but hopefully you can hit on.
So I'm not sure which day, you're referencing here, but let me tell you what's happening to China and.
And the day to the first point of course is there is of peak selling period and China.
And from the early part of November through to the early part of the February was the parent last year. Its basically singles' day in China to each of Chinese new year and that ends the period, which as Alexandra on other Oems will be selling most vehicles. So you might be referencing are normal.
And in market fall off after Chinese new year is February and March on lower sales always the.
And on December and.
January and maybe that you're referencing if I give you the data sets.
Quarter, 1, even though China for us and pretty much returned to normal last year.
We were up 14% so in a like for like period, Changqing and premiums selling periods and the market and in a particular marketplace like for like we were better and China last point to make our China volumes will start to reducing Q2 alongside other regions for the reasons set ice supply.
Supply is starting to be reduced as a result of the semiconductor challenges as.
That's where we are in China.
The net.
The next question from the National and the most of that also.
A final question for Jim.
Quarter on quarter of decline and gross margin, despite the favorable mix and.
And pricing.
Think of commodity price impact.
1 of the cost impact on first quarter on the expectations on the second quarter.
And second related question with the team the Makena and benefit of staff cost reduction due to restructuring has none of the acquisitions of the impairment.
Are you expecting savings some of these levels.
On the NAV of Christian for BD, which I'll take it subsequently.
Yeah.
Okay, let.
Let me take them and the older used awesome, so if commodity prices keep coming up and it.
The biggest influence on our margin performance by far and.
And even though commodities are increasing and if I give.
Give you of valuing and the quarter and it gives you a sense of that and impacted us by about 30 million pounds of adverse on the year over year basis, if I compare that to the 243 million improvement year over year of Nvme, you can see relative to variable marketing and the house of sale, it's a small.
More of an impact and we expect it to be and increasing impact, but relatively a small impact going forward also.
And plays it's not commodity prices that are going to influence and impact what we do and performing.
Going forward.
The VA MVP.
Pieces are much more impactful along with warranty, which is why I've consistently called those out over the last 2 years and other potent to restaurants and non material.
Benefit of staff reduction costs, while we've got a slide in the deck.
I will say I think its page 38.
We don't need to go to it and you'll see our absolute costs and quarter, 1 last year, which we had the furlough monies and that we've called out of that number of $115 million improvement year over year.
Last year compared to this year.
There is a small cost increase versus quarter, 4 and I keep.
Century of quarter for your reference quarter here. So when you look at the impact of staff costs, they have gone down versus quarter for some people did leads and the quarter and more people on to the re imagined and redundancy programs will lead and later quarters also you're asking about of DNA again, when you look at that slide when.
When you have chance to look at page 38, you will see the idea and a digital shop actually versus prior quarter of little bit I think you're probably referencing the MLA mid here and the point of MLA mid of course is those assets are on the balance sheet not yet being depreciated. So the same thing for MLA mid.
Which you may be restaurants, and there was actually a cost and then at that point come through to our income statement of what does it for the brought those vehicles to the marketplace and there's a small reduction on on.
And the DNA MLA mid has done is stop that number increasing by about half.
The percentage of EBIT going forward, you won't see of reduction you will see and avoidance of and increasing.
And I think yeah. Thanks Adrian.
And on the challenge on the D Walker and capacity.
And your transition what are the scope of Quebec.
The expansion of our existing location.
And of our work.
And because they can see and any input for Brian.
Right.
For the.
Okay.
Paresh.
Yeah.
So I would not get into the <unk>.
The numbers in terms of capacity, because it's slightly complicated from a shop to shop for them.
And for us, but broadly if I have to give you the <unk>.
Best of utilization of the relocations and which we operate.
I would say buena and sudden would be operating some better on.
And 65% to 70% non and Kona is going to grow up towards from joined the cause of the new launch which will be.
The group slated on little bit sort of as you know there is going to get launched in the coming months.
As far as a sort.
And then volume is concerned there because of the joint venture of factory, but we have the <unk>.
Past utilization would be greater than 90% and.
On the engine and transmission, which is powertrain capacity utilization without some.
Since the launch of 90% of small town center.
I will take the first part of the question on the price increase and then my last call of duty is to talk about seats on the price increase so far and maybe how you're thinking about 1 point of view of course in place of inclusion PD.
And the Avia you could take a price increase on the quarter.
Audio bridge for Seabee.
And.
Yes, thanks <unk> so.
And if we took a price increase on let's get rid of it shows about went up for the fact.
And across the range and.
Looking at the steel pricing because it is and you've taken another price increase of around 1 to 2 and up per se.
Starting towards the late so those.
Kind of for price increases and you pick them.
I also saw a question on the little easier and PV, you'll see me too.
On the cost per cost include living and boat business units, it's not that the illegal platform and.
And out of focus on sort of food has been to look at what we can do on cost reductions.
It was evidenced and.
And the rest of course I'm going to try.
The and pass it onto the market.
But back to you.
Krish.
Our next question is from Seth Rogen.
And Jacob.
Because of the royalty and very tight call on.
And of the fuel price.
So the mix improvements during the day.
All of them through the years.
And so the implement key to upsell customers with more market things for auto and being done online.
Out of the a lot of management and customer behavior.
All of the additional options of Cooper.
For example.
Yeah.
Okay, Yeah, I'll take that 1 of our ship okay.
So.
For the few things to consider here on this 1 you're correct our inventory is tight and become a lot tied to.
Over the course cost of quarter, 1 that's absolutely correct, you're starting to see the first impact and not and.
The variable marketing, obviously, that's the money we used to close deals and the.
So and marketing support and starting to fall quite dramatically actually so you will see already in quarter, 1 as a result of.
The pressure on supply and the deals we actually did with customers.
And more valuable to us now that was quarter, 1 and don't forget.
Variables challenge unfolded and quarter, 1 so going forward and supplement to that I and addition to that we will also and also to control of all of the banks of course, we don't want all of the banks of 4 of 567 months on average sales with starting to actually.
The whole idea of ability for customers towards the either in the data online the lowest value derivatives.
Temporarily some of those derivatives will not be available. So they cannot be ordered they would need to up spec the request by nameplate if they wish to order of 1 of our vehicles.
Taken we get back to normalization. So those of 2 things 1 already happening now exists and deals in the marketplace with less marketing support and now we're going on to the next stage of taking away the lowest value derivatives within the nameplate. So customers if they wish those costs will lead to.
Of specify their vehicles for us to be attitude to go live for that to them in the marketplace. Most of the second piece will start to impact and the second half of the year not the first half of the year because of course, our obligation is to fulfill the orders we've received already and the order bank stocks.
The 100000 plus units.
Okay.
Yeah.
Our next question is on.
And of course capital.
Ship charters is helping Jane.
And then.
How quickly do you see an opportunity for.
For me the system inventory or do you need to go back to the March 1.
And second China, JV and the piece of the slip into and losses is of concern.
Medium term fixed needed here.
Okay and balance sheet, let me take them in order of spin offs.
Inventory at March it was globally.
3 billion times level that we remind you.
So yes. The early it was for 4 billion pounds.
So we've not only been impacted by the supply shortage, we had already drastically reduced inventory.
And over 30%.
Across all nameplates and all.
Markets.
And all regions do I see and opportunity to reduce from that it's marginal if anything on the number of nameplates and the number of markets. We now have 2 low inventory and that would impact.
Is this level that is starting to impact the number of customer or just wait and closed.
And hence the retail levels will be suppressed in quarter, 2 and so.
And what you'll find is it will continue to drop and that dropped to an unnaturally low level and we do need to bring it back appropriately.
The levels, we were seeing closer to February time on site rather than March.
The time actually February last year of time as we normalize the disposition just around 3 billion pounds is a good place for us to pay for a molecule games beyond the that China JV repeated slip into losses is of concern any medium term fix for don't forget the China JV has been impacted by the semiconductors.
The supply as well I did say to you I think at the yearend, we formally kicked off of a charge of improvement structural cost program in China and breakeven point going into the start of the year was above 70000 units.
We're challenging ourselves to get down to 65000.
Expense structural cost improvement and then below that and the other key metric and Chinese you wouldn't see obviously and our quality of sales. This is for local cost of course, and our house of sales.
And that was 30% of discounts on the number of AD products to.
2 reasons for that but had been over supply.
On the 10th of dealers were 2 and a half months that now dropped to 1.3 months at the end of June and that's another great sign the disc and on average is reduced from 30% to 26% that's another great sign and.
Don't forget finally of course, we're replacing some of the products.
Range Rover range Rover.
And 3 the extended wheelbase you and.
And the marketplace and the ex step along as well so both of those vehicles effectively brand new vehicles will start to improve so a mixture of all of those actions, we've taken and taken on the structural costs together with supply and we think will improve the position.
The robot and our China JV considerably.
Thanks, Adrian for our next question from number of.
Couple of things the Nomura.
Let me give you, but on the leading sports and who you.
And I think the and their questions for some kind of compensate us for free.
And frankly what.
And between.
And the business with veterans.
And the media who of course today can you. Please let us know of the hallmarks of admits and as a company plan and charging infrastructure and on top of units in India and 1 of the scale. We plan to build what's the current D. The order book and India.
Couple of yes, you're right we did the <unk>.
And for that today, and we haven't quantified the amount of investment that would be and importantly, the this is obviously.
Veterans of the information and we'd like to keep it there and.
And the very clearly we see it.
In the EBIT portfolio, and we know that Hasnt been traveling and then you are able to break the law.
And of the bad deals for the auction and we are working closely with tariff on on this 1 and we definitely want to play of the Williams capitalizing.
Recently the quantum.
And now it looks light of debt.
On the scrapping units, we do see that the scrapping for home.
The amount you would want for work without the partner.
And at the desk.
And I need to come and in terms of of being the provider for that working with the thought leaders and scrapping.
The LNG.
Getting into conversations with and thereafter on the.
Columbus to ensure consistency of technology being adopted across the entire.
The ecosystem and.
And the equal system partners will be the onslaught of and the investments operating and also make the bulk of it sort of it and we had a prudential standards in terms of shopping is done on recycling.
Tragic on outreach and ensure that the.
And of the World class in terms of market, but he is part of it.
Rising rates the effect of a few people on the bringing the already have bid on.
Physicians who've already with the partner.
And once we have 2 of the should definitely come through during the fourth of this year and on a period of comparable GAAP correctly and if not.
But that's sort of period of time has the start getting the unit economics, the right on that for that.
The book on the.
The current order book and India is really on.
Oh, yes.
And I'm on the deal.
So you know the cut and suppliers quarter of what we have been sort of playing them and us for 2 to 3 months the vertical.
That is the basis.
And.
And what would be and.
And then between 14 to 16 weeks and I would say.
But this is going to get improved in terms of you know, reducing despite increasing supplies, but and the last 1 on 2 months because really short of.
It is double what the.
The bookings we use to the sales so it doesn't.
Simple and trust.
Thank you Liz.
And.
Continuing on the DNR question Chip shot at this 1 of the specific factor affecting tier 2 suppliers of the restaurant.
And the Powerpoint presentation.
Expect the sharply and production in Q3, FY 'twenty, 2 and more than breakeven level.
And really 3000 here.
Okay. Thanks by the he I'll start the question and then if I may I will ask Gerry actually 2 he is leading this from the front on.
Asking for comments, but bear in mind T areas actually on the road. So we'll see how this.
In terms of the tier 2.
And I specifically of had in mind as we wrote that with the couple of significant issues. We brought to your attention previously I E. The Renee sauce plant fire.
Japan, which happened and the middle of March and yet production is now back and then built back towards.
And with some 3% levels. So we do expect that to increasingly improve as we go through Q2 into quarter 3 and another 1 would have been the the.
Texas Snow storms, which again, we'll run that same periods in the.
And late February early March also and similarly.
What's the I expect those facilities to be coming back on stream progressive as we go through Q2 into Q3.
But we're not in a position to confirm the production levels and quarter..3 at this point, we have said to you and breakeven is lowering the expected to be better than the 90000 units by the time they get that marginally.
But we just don't have those confirmations from suppliers, yet and I really don't want to mislead you by saying probably so once we get to a point, where we get those combinations. If it's significantly different to what we've communicated and we will communicate that to you for.
And I would like to hand of the tiara, if he's able to hear me.
And he is on the road and he has a.
The first time flavor of this and I'm certain of our thing for us.
The missed from the response TRA and few of them.
Yes, absolutely thank you Audrey and.
And I think what is very key in D C very severe.
The crises and all OEM.
Is this amendment with the chip supplier is that we are and I'd say, we are learning and we are lawn and garden fast about the way our chips are working and what is their modus operandi and what's the what are the needs. They have the to make it such that capacities and the allocation of the capacities is.
Kind of a table and efficient and we also learned that's on <unk>.
Well not necessarily a play the sudden music of the 1 of the chips of failure would like and that we would like to play with it.
For example, having long term contracts, we got we should take home pay approach and so far the capacity.
Is there whatsoever and.
The good news is that we are getting balance and we're doing that with the with our key for finger at the amendment, we speak so far.
And we havent tier structure and fix to the problem that we have at the moment and J.
And at all.
The team is well positioned to certain extent because I would size is considered to be.
Small compared to some of the big customers, especially outside the OEM world.
And it's also a very interesting approach that we are following at the moment with the chip suppliers and with our tier 1.
But to your balance sheet.
Thanks Terry.
And the extra from the bridges.
Bank of America.
2 questions 1 of the.
Guidance for the full year.
For FY 'twenty, 2 for Jan and not looking at a breakeven EBITDA.
Corporate adjusted EBITDA, David earlier.
And the PS.
And on this 1 for him.
And the security and the agents the threat.
First of all the things the things that too fluid at this point and time it doesn't make sense for a number of them.
For the children are able to eat but what we are calling on what the best that'd be on being at this point in time and all of this gives clarity on just reported.
Got it.
And ladies and different insurers of all the myth.
Communication happening from us on that front and the number 1.
And the any change for the launch timelines and jammed up due to lack of visibility on semiconductor availability Aegean.
No no expense.
And I forget did change and the timeline of the launch of our new product. Let me remind you each time I communicate this the timeline gets show of test, we expect some of that new product now to be in the market place within 9 months, which is really good the range Rover and and the range of 6.
Months later on that we don't plan to and any way of slowdown and the launch of these vehicles and.
Whether we find as we launch that some of those semiconductors are a problem on the new vehicle or not we havent got to that point yet of course, because we are not yet clear enough on Q3.
The spec.
The intention is to absolutely push ahead and delivering those wonderful new vehicles for the marketplace. When they are ready and that's likely to be and around the 9 months time.
Yeah I think.
If I may balance sheet at something and complements and so for mobile I think the company at.
Supply is experimenting is huge.
You can see of.
Part of the progress through 3 imagine and refocus and the fact that we are on the attention because of supply.
It doesn't change of the country, but intensifying and Forbes the to go faster.
Our plan of <unk>.
For the moment, so which means that the company and it gets even more muscular is getting faster is getting better synchronized and that's the reason of why we are just the.
Making such that the supply is coming back and then we will show the progress that we have made during these periods of some of them.
Thank you thank you Rick.
The other live on the Indian business, the things of the market demand for reopening and the domestic market is there any volume outlook for CV and PV business quite frankly, and you do that we can sure wouldn't want to conjecture on hold and the market other than the fact of the book.
And the good Easter the lead to significant pick up.
The thing and the market as we speak.
And.
On the road and the both Phoenix and some graphene.
Back on.
And.
The question too.
BNP levels in jail on a very low given the supply shortages and there's an industry wide phenomenon.
The good of the number.
And he and warranty for the midterm and the second on the emissions how do we think about for and makes it needs to move to comply with this.
Okay. Thank you balance sheet, so CME I'm going to interpret mid term post supply shortages for Austin.
Pane of glass jar and supply shortages and we take you back to the announcements I've made previously.
We are.
2 barrels of oil marketing at that point and time to the actual around 6% and warranty are items 3 and half percent. So once we get to a normalized marketplace, assuming there isn't a permanent.
The correction here, then I would anticipate that that guidance is still good guidance, although it would be any in the foreseeable future of this constrained period will be closer to the 4% or below the level until supply has been adjusted to be commensurate.
With demand I think it's reasonable for you to take that message away from today as well.
From an emissions related penalty perspective, I've mentioned to you today the call.
1 day Chet.
No.
Total pass and P have numbers and quarter 1 shown in the presentation on.
Menstruous 9.8.
H and the half percentage so at that level.
Actually non compliance so we would need that number to grow through to double digits. Let me say in total of about 12% constant and get to a compliant portfolio, we know and we look at the all.
On the pace from our customers we are on that level with a strong request demand for IP have units. So again, it's about 12% and not the 8 and the half and we can see that within our customer or the banks. It's just our ability to both of those cost day, which is holding us back and.
Penalizing us from the potential size perspective.
Thank you Jim.
The question on mix, maybe the thing that the.
From a truckload brokerage fees.
And our ESP.
How important is the mix and the improved further in the near term.
The bank, what do you see the shaping up on.
The black Fox formalizing and third quarter.
Yeah, Okay balance sheet. Thank you, let me take that 1 look again, I think youre asking me beyond.
Beyond the <unk> chips piece I think there's 2 levels here actually I'm going to stay within the supply shortages.
For the first half and talk of to cause that will be show of institution of half 2 it's just the extent I do believe the actions we've taken trying to moderate the increase of the or the banks trying to reduce the.
The lower derivatives with the name plates of course, that's kind of of natural impact.
And reaching those average selling price is and improve even more of the net try and vacuum prices because of the lack of Ami. So I see those 2 items actually increasing over the second half of the year. Once we've supported the orders that have been put in place again as we.
Normalized post crisis, it's more difficult for don't forget and listened to Jerry's words.
And this 1 inspire us to actually even further accelerate and refocused transformation program and.
And we're very focused within that program for all regions, improving health and quality of sale.
Norm you will see that coming back has increased.
Acting prices net transaction prices and so there will be and legacy as we rollout of the program.
And I'm just transacting price is like for like on exchange rates and of course, we'll continue to be strong if not improving going forward.
And Catherine.
The question from the Sean the us on.
For my taste of the counties.
Can you shed some more light on the strategy of 10, new launches on he sees them and be up in 2025.
The answer is going to the spread equally across all of the reported to be more back into the any breakdown of target segment.
All of the battery supplier.
And the plant in India.
Net income.
I would like to look at the walk there.
This is the plan on the aspiration that you off the.
We are pretty excited by the.
And the speed of which the countries moving into electric.
And particularly with the rising fuel prices aren't traveling and perfect for filing the come together the body of zones.
And.
And therefore, we believe the customer needs to be given the choice and giving them the choice of Eva.
And all of them play out and already called out of any time zone, and we just quantifying the variables.
And some meat for the bone the behalf so the.
The new launches of definitely.
Part of the plan.
For 95 reasonably well spread out and.
And.
And.
We wouldn't want the.
Without any specific target segments other than things out of it.
And the amendment.
And what could be otherwise, we wouldn't be and OEM to begin with and all of us getting back on and be fully integrates the to ensure that.
The other compliance and security.
And the.
And the work to be able to share and the rest.
Sure on that.
And as and when we get closer to it more and more color would be provided.
Peter.
I hope that helps in the Trump.
Our next question is for outlaw.
And.
Other capital.
Even if things improve and second half again is it fair to assume that FY 'twenty 2 of net debt for consolidated will be higher than $40 for <unk> seen at the end of FY 'twenty 1.
Great question do you think the the point to be made of that.
At this point and time out of the 18th of them for the outflow that would be.
And more than 16, both on planet frozen and just working capital.
And the short both and Gela and internal models that the the operating cash net capex is actually near breakeven and better there.
And therefore at this point and time.
And wouldn't want to comment on the euro and debt would be.
So it made it very clear of that part of the kind of more of the sometimes you're going to be cash flow for them in the year free cash flow positive and gela on AR.
Full year basis most of it.
None of the way you actually have to go and where exactly we would land.
And we've quantified it going on.
But and many times for me, saying that the.
The seat improvement and second half.
How far how much revenue of how much comfort on getting all of that depends on of the of activity on the semiconductor quite comfortable and can.
We are on a good place and we need to get the demand we need to sort of the demand that is the area. So.
So and want to hazard, a guess on Bellevue Orlando on a full year basis, but do keep in mind the.
The addition of the quarter most of it on working capital and the will obviously see a significant amount of the working capital the minute volume start picking up it doesn't make it 1 of the accidents.
Nothing to add to that balance sheet and nothing too.
Okay.
The question from financing on the similar.
And you're doing that if revenue in the second half of the sphere is going to be very similar to the revenue that we hadn't locked the of same time why wouldn't EBIT margins be on Noah.
Lower on the year on year basis.
We haven't specifically called on EBIT margin for the second half of the year, Therefore, I must admit.
And I.
The line I understand your question too much.
And I'm, not prepared and figured out and where you stand with it.
If I may balance sheet I think the question is misunderstood the outlook slide.
Because the 6% I think this is where I did drop off so.
I didn't explain it but it sounded like hubs.
And then into myself.
And.
And the 6% the 6% it's actually the underlying for last year and.
The headline of 7.1% of the 2 numbers both relate to last year and we have not provided any guidance for H to FY 'twenty 2 for.
Total debt.
Yeah the helicopters.
But I hope that the clearer for you.
And then you have the maybe holds from and Brown.
And on that asset management fees in our questions. If I may do you think you can get the Q1 levels of absolute wholesale for better as early as of Q.
3 should we continue to expect the emission charges and hedge to should we expect volume the P. J lack of follow a similar pattern on the rest of the or not and everything we've done the right C J and on.
On OLED.
Or should we be prepared for more losses going forward.
And.
Thank you your balance sheet do I think we can.
Of the race, 2 Q and Q3 Q1 levels, yes, we can.
And now, but I haven't got the supply guarantees Ics.
The demonstrate we will and we certainly can and as such.
Certainly possible.
And our guidance that's just what it's in the range of.
And get reasonable outcomes, let me put it like that I should we continue to expect emission charges and H 2 but if I take you to the first piece of your question. If we have of profiling Q3, similar to Q1, I think it's reasonable to assume it won't be of compliance profile that's reasonable to.
The assumed so we would need to increase volumes the above that quarter, 1 level and my view for us to actually see the full power for that compliant portfolio that would be my expectation of here. So we would need to get closer to a normal level of supply.
And if not to the supply we could serve the demand we have for us to be compliance and.
Any given quarter I do not expect this to be compliant and Q2 would that 65000 unit volume number we've indicated.
And C gela.
Its.
Reasonable to assume the pattern is the same day will be impacted by semiconductor shortages similar to ourselves for the foreseeable future and I did mentioned on 1 of the previous questions. We are absolutely working on reducing our breakeven point to the CJR.
And of course that will be 2 fold.
Fold health of sale quality of sale reduction to incentives given on <unk>, but also structural cost reductions as well. They obviously have a much lower cost base and here and therefore, the absolute numbers will be nowhere near as big as the reductions we've made and the COVID-19.
The business, but I do expect breakeven to reduce below 70000 units for those 2 reasons yes.
Thank you thanks Adrian.
Question for beauty show from Clarkson total currency.
And what has been the quarter on quarter of trends and the palms and them and and see how do you.
See that.
Okay. Thanks biology.
Luke.
And as I mentioned, the we Havent picked on.
And the price and threes on.
The beginning of January and then again and in Peru.
And really when we take the price increases the spacing.
And it.
Accepted.
As we go ahead and the quarter, so by middle of the part of our <unk>.
And remember I think the previous baked into the good acceptance. So I would say in terms of realization.
Towards the end of the quarter, we are back to the levels that we were in the previous quarter.
Okay. Thanks, Thanks, Alicia maybe stay on the line for a minute.
The inventory for a retrofit are you doing anything and C D and some of the explanation for you and PD and Adrian for you and Gela.
So all of the on.
On CV.
We don't want to keep.
There is no need to keep inventory.
Oh of finished vehicles.
As I mentioned in my presentation via the keeping strategic inventory of.
The semiconductor and semiconductor parts ex parte level, even with very few cases that aggregate level, but not at the week of level. That's not required because we are a learning of what production to retail.
Well, let me back to you.
Challenge of started before I hand, it over the fence.
<unk> came from CIT Akshay and like.
Satish on the PDI I didn't read the VR.
Yes, so <unk> given that you know of.
And already on lease operating out of on the big capacity of certain items be.
And the new industry volume months give or take.
Can keeping some finished good inventory on the call.
Most of the uncertainties that we see on the supply side, given the same kind of disruption that we are increasing but the.
And is limited to just 10% peso for the monthly volume and what I would say.
And those things absolutely some notice CV of keeping started the inventory of 4.
The common parts and as I said that and this is moving towards preparation for the new launches.
Got it.
And on the debt side any benefit of entry of the building.
Yes.
And we did build.
Inventory for retrofits at the end of June.
And actually had just over 7 times and costs and what we would call working progress.
And your words retrofit normally this time of year, we would expect less and 3000 units. So we all know.
And as travel to the inventory at the end of the June exactly to do what you're suggesting here and our expectation is a lot of that retrofit will happen in quarter..2 while I don't know is where we will end the quarter, because obviously, we will make our decisions around September and what we retrofit payload.
Versus what we don't build as we go through the next 3 to 4 weeks post our shutdown period.
And if you would you like me to continue with the question 2 balance sheet, yeah, but the already have thought that the rebound again.
The plan for the students all of the company already covered it there so for.
And you've got another 3 minutes and.
I'll take the next question. Thank you.
The next question is from that and the huge market.
And from Jefferies.
2 questions, particularly on the Havent covered on how about on it takes the expert credit.
And the acceleration of Dana why on lots of tax expense, despite and exclusivity and how the flow from the second quarter and second half.
On.
And I think the always going to look at EPS near basis the money.
And it goes by we went into effect within the quarter, we think the contributor for the deferred tax assets of the bumping back up on that 1.
And on the controlling losses the loss.
For the quarter bump it up at night.
And within that the UK system in particular had a higher effects of losses within the construct.
Solid weighted with partners.
Of course, there and again, we Couldnt break my rule of.
Lots of their theatres.
For.
For me.
Both of them a bunch of assets as well of our hedging of the approval.
Yeah.
As well and also you have to be restated because of the fact of strengthen and 1 of the 19% dependent type of thing.
Of the for breakthrough for the lapping of DTA for that but given the current tax most bullish on the embark on.
And these are obviously new debt as and when the business becomes profitable and you are getting back into the margin.
So do look at the EPS on on overall basis of the gross profit growth team and the ETR father's day.
Out of some kind of.
And anything on the after that.
And just the 1 point I think balance sheet excuse me, if I missed it and the line isn't isn't so great.
Look this is this is the Ias 12, I think it is accounting so it's accounting regulations Roth and cash payments.
And at the point, where we become.
Sustainably profitable this deferred tax asset will be created by this accounting rather than cash used the points I just wanted to make.
On the very good for the should we should have added that thank you.
And maybe time for 1 of the last question that was all day.
The business from nickel and.
Sure.
Of the top of our guests for that and Scott.
For the complete.
And.
Yes.
And our semiconductor of the shoe.
All of which you already covered the other live on the EV launches what are the Capex plan for India PD business and.
On the subject of the JV partnership with the strategic partner.
As you said the.
And for US the strategic Colo and obviously there is of strategic partner for that or financial partner for that'd be of more than happy to take it.
And for it it will be implemented.
Part of our plan.
And.
And as the business is starting to do well and was able to turnaround and that also gives us more degrees of freedom.
Having said that we will be open to any partnership as part of the consent. So Nick on for that clarifies that for you. So.
So I think what we have come to the end of the session 8 o'clock Tonight, and I wouldn't like that so.
Thanks, all of you for joining and thanks for the theme of the DNR and him.
And for taking the questions hopefully any of their comps.
For all your questions for your satisfaction feel free to reach out for in case, there's anything else that you'd like us the clarifying and.
The look forward the engaging with you on the coming days, all the very best and stay safe.
Okay.
Hi.
Thank you. Thank you, ladies and gentlemen on behalf of Tata Motors Limited that concludes this conference. Thank you all for joining US and you may now disconnect your lines.