Q3 2022 Tata Motors Ltd Earnings Call
<unk> pretty intense period of action.
The automotive as well as in Gela commercial vehicles, we unlocked.
Unleashed rather more than unveiled almost guarantee you on commercial vehicles across all segments on one day.
It seemed very well.
We then introduced the CMG technology, and Tiago, and <unk> and I'm sure Felicia I want to talk about it a little bit more.
We touched on made for a brief moment in December would be the second largest car maker, but I think the gap. This is the second player is now clothing.
Quite well.
In <unk> chip suppliers have started to improve with production up 41% over the previous quarter.
And the order bank is now sitting at a very strong 155000, and we'll talk our Adrian will want to talk about a little bit more and of course range over continues to win many more awards.
Ensuring the what card award next slide please.
Overall, the quarter saw a 72000 crores of revenue.
The decline of one 5%.
PBT before exceptional item of 700 growth improved over the last quarter, but definitely lower compared to the same period last time.
Of 10, 2% sequentially, improving but year on year down 60 bps and EBIT also improving sequentially, but declined over the previous year and free cash flow was positive at 4000 crores for the quarter, what CLR anteater models being Scf positive next slide please.
Competence of growth.
The big decline.
The four 5% growth decline that you saw.
22, 7% is related to volume and mix.
We are trying our level best to put through including managing Vimy Vms efficiently in gela, but that would only give about 14%. So there's a fair bit of price are still to be recovered.
Which is impacting the margins will talk about later.
And all of the businesses pretty quiet profitability declined from $6 four to $1 seven on a year on year basis.
<unk> contributed about 420 bps sort of Tata Motors about 50 bps others reflect.
Net automotive debt the external debt that you see out there is sitting at 36000 crores.
Working capital related impact.
Is now at $17 gross.
We expect to see that reversing with every passing quarter as growth comes back and of course, the leases continue to remain about 7000 crores.
Next slide please.
Let me hand, this over to Adrian to take us through the July performance Adrian over to you.
Many thanks balance sheet. Good afternoon show good evening, everybody on the call next slide if you would take place.
So these are the gela.
Direct results you can see standard format for us retailers are down in this quarter versus previous quarters. We did signal that last time. The stock pipeline finished pipeline is at all time lows.
The actual big data going forward will be production, which will take you through later revenue, it's actually up quarter over quarter.
Although down 21% versus the same quarter last year, and we will take you through those details in the presentation also we basically optimize the revenue base available to US we were close to break even bottom line in the quarter, just 9 million adverse significantly better.
Then quarter two as we signaled we would be in October EBITDA, 12% back into double digits.
We continue to be above double digits going forward and the two commitments, we actually called out in October EBIT positive for the second half, we said, while actually literally EBIT positive in quarter, 314%.
Cash flow positive in half two also while we were cash flow positive in quarter $364 million. So we are making good progress we're back in the stabilization and growth period now next slide if you would please.
So these are the key highlights that we show actually in words, the couple of items not called out on the last page. The refocused program did another 400 million pounds EBIT in the caution I'll take you through more details of that later in the presentation and balance sheet you referenced 165000.
Or the bank, which has grown by 30000 units from the end of September and I will take you through those details also later in the presentation next slide if you would please.
Okay. So these are the details in quarter, three retails and wholesales I'm going to take it's a wholesales first bottom of the page.
69000 units.
Slightly ahead in the UK of previous quarter also in North America, and also in Europe , and China, just a little bit lower in the overseas markets. When you see the next page on the family's euro understand why that is so retailers have said would be down versus last quarter the big data.
Here is the production levels and I would take you to those levels of production. They did grow significantly Q3 to Q2 and that pipeline will begin to build from this point forward next slide if you would please.
So these are the family slides, it's super important to us.
Wholesales again first of all obviously drives our revenue base.
Important to us that we built out our old range Rovers in the quarter of course quarter. Three was the last quarter upload for the range Rover, we manage to do that you see that within the wholesale data here clearly our customer orders and this was the final chance we had to build those units. So we were successful building those old range Rover.
Units in quarter, three and we had to make compromises elsewhere on the other families you see at the bottom that so we prioritize those customer orders.
Other simply because we can build those other costs later from quarter four onwards retails you can see that our bias in the range Rover.
Again because of the.
On the wholesale positioning production position, we were able to slightly ahead on those range drove our retailers in a quarter or so as we manage to maintain that pipeline level electrification on the far right up to 69% of our vehicles were electrified that was up three percentage points from quarter two.
With 66% and significantly higher than last year. The step change of course was the 21 model year vehicles that were introduced in quarter four last year next slide if you would please.
Okay. So we've actually got two profit appreciate for you today and what we've done on this one this is a quarter over quarter profit bridge, what we've done on this one as we've tried to show you. The progress we've made in the semi conductor constrained environment. So you can see.
Quarter, two we lost just over 300 million and in the volume and mix.
Volumes were higher 8% higher 106 million pounds positive because of that but a significant shift as I mentioned early in the in the production of the vehicles to the range Rover family drove a significantly more value in Q3 over Q2.
Our China business actually the levels of production were lower than in Q3 versus Q2, there were some discrete supply challenges, we had within the China business, including some of our suppliers impacted by snowfall in the northern region later in the quarter.
<unk> is all about quarter quarter three.
Three a.
Quarter, two excuse me, we completed our emissions positions for the year earlier this calendar year at the end of September hence why that negative actually as compared to a benefit last quarter. The A&D environment continues sub 2% I think that's a key indicator for us going forward and over this period is a supply constraint.
You will see viable knocks it closer to that 2% level.
Contribution costs.
Today, we were flat on the <unk> quarter over quarter in this environment of low supply, it's obviously impacting our suppliers as well.
Looking to offset the cost increases coming out just with cost and manufacturing was a little bit higher utility costs of course come into that and there are a lot of you ask about those input costs, you'll see some of those coming through.
And we did have we.
We did have increased campaign provisions in the quarter and I'll take you through more details.
On the latest slide specific to warranty structural cost.
We are at the low point of our engineering capitalization cycle as engineers come up completed completed programs, an MLA highest at the range Rover, they move onto new platforms, which haven't yet hit our capitalization points later in the year, we talked about this for the last three years and we're now at the low.
The low piece of our cycle around just above 30% of the engineering cost is capitalized and we've taught on average over a cycle it will be 50% plus but it will grow to around 60% at peak. So at the low point of the cycle here and you'll see when I compare year over year it had a dramatic.
<unk> on a year over year results.
And the life was all about Q2.
And the.
And the rate move all of those reserves at the end of quarter two.
And on FX and commodities again, thats, all really about activity that happened in the prior quarter, which hasnt repeated this time and therefore those are really swings in the sterling are relative to our overseas European.
<unk> eliminated loans and liabilities. So that's the walk from last quarter's four 7% EBIT negative margin you see that to one 4%. This next slide I want to land on just a couple of points. This is our traditional one full year over year.
And then it could simply be said look the complete difference versus last year as all in volumes.
Looking at minus $432 million, so it'd be easy for me just I just missed this the volume story, but there are real things happening offsetting themselves, which is important to draw the mix I've talked about already I've also talked about the emissions we closed earlier this year.
You can see with three percentage points lower we will continue to be that over the.
Periods of supply constraints.
Really we're looking for is where that normalizes beyond our belief is it will normalize but look beyond below 5%, but that will be a discussion we'll come back to in later quarters.
There was contribution cost year over year, you see there in the manufacturing costs, particularly 40 million two or three things happening in the utilities I mentioned pay award and also the duty costs relevant to the changes.
Our relationship with Europe for Michigan with the first last year was prevalent in quarter. Three that's about a third of that number material cost down is mainly the commodity cost increases year over year as I've said, our intention is to find ways to offset those cost increases in this relatively low production environment for supply.
We are a little bit short in quarter, three and the campaigns again I'll get into more detail, but you can say they had a significant impact and the value of our quarterly quarterly business in quarter three the other one I wanted to reference that you just mentioned it the capitalization look we are capitalizing more than 100.
So that's in the course of the last year and that's the difference between getting a high point of the cycle and the low point of the cycle as those engineers come off our MLA high platform and move on to other platforms.
Which we've talked about it of course as a part of a re imagined and Ponce are all Jaguar electrification. So that capitalization will raise again going forward. So if you think about our underlying results one 4%. There are a lot of one offs in there, but the two negative thesis on campaign on <unk>.
<unk> already low points in worst points for us and we do expect those to improve going forward. So a true underlying what's stronger than one 4% on just 69 thousands units the FX and commodities is all about this time last year there wasn't much happening.
On those currencies between September and December this year.
Next slide if you would place.
Okay. This is quite dramatic jump forget that were just 69000.
<unk> sales in the quarter and our underlying cash flow the pace of cash we've talked about for the 11 quarters I've been in this role was significantly positive more than 200 million pounds on just 69000 units there was a one off.
Cash taxes, you can see that normally isn't a receipt, but we did have some tax receipts in the quarter for that 50, some million patents, but even so our underlying cash of 69000 units.
Was close to 117 million pounds, which was dramatic working capital again negative most of that negative after the <unk>.
After the ebbs and flows of payables receivables and inventory net of himself that much of that negative was the repayment of the payments of those claims which we've referenced for the MLA mid cancellations.
<unk> go to the bottom of the page that's year to date data.
Very clear what's happening now at one 5 billion and $1 496 billion cash outflow for the year is all working capital. So we are in the Super low point of a cycle building just 23000 cars a month.
All of that will come back to us as the semi conductor.
Challenges start to free themselves up going forward. The worst of those of course are behind us So actually cash breakeven for the first nine months on just 218500 units. So our average cash breakeven point for the quarter shows 73000 vehicles, which is probably the richest per unit data we've had.
More than 11 years next slide please.
Okay investment.
Still at the lower point in the investment cycle.
And that will increase as we finalize those range Rover and range Rover sport products and pay the suppliers for those tools at $512 million in the quarter year to date 156 7 billion. So we are actually lowering our full year guidance to $2 2 billion.
Patterns that you will see on one of our final slides. It's been just over 500 million every quarter. Two we expect it to tick up a little bit in Q4, but not substantially next slide please.
Okay. The business update in the key things driving that data. We've shown you I think for the first time at least three years production volume. That's the key data here, even though obviously our revenue and our cash is determined by hold sales, what we were able to do in <unk>.
Our quarter two soon to September is really lower the stock pipeline, which.
Mens wholesales were quite a bit higher than the 51000 cars, we actually built in quarter two there hasn't been a step change in production in quarter three.
51% to 72000 units.
40%, but obviously there was a small pipeline build in that quarter.
We only wholesale 69000 with Osha units, but the key point here is the production level is going to be commensurate for the wholesale level going forward. We are signaling because the questions will come about Q4, we are signaling in an increase in quarter four versus quarter. Three you can see there is a range there rather than a single point.
And particularly as we go through into the second half of quarter. Four we are increasing our confidence that again there'll be another step.
Improvements in production levels, a lot of that May actually manifest itself through increased revenues at the back end of the quarter and in quarter. One any more details I'll leave to Q&A HCA has been leading a lot of this information with its equivalent and a lot of the supply base. So if you wish you have them.
Youll be able to provide some nice texture and where we actually are with those key discussions next slide if you would please.
Okay.
Supply has been low production has been low.
Customers continue to order.
Vehicles grown from 125000 over the bank at the end of September to 155000 at the end of December again, I could easily dismissed this just to be new rate brain drove up <unk> 30000 units, but don't forget in the new order bank. The old range Rover orders are falling and so the range Rover sport orders both of them.
Those vehicles will be replaced over the next six to nine months. So the order bank is growing both in defense and in a range of Andy another nameplates, even though we're consciously.
Consciously not allowing customers towards the lowest value derivatives here because they have the last units to be built we do not want customers be waiting.
12 months or more for their vehicles. So we have plenty of an opportunity not only to fulfill this order bank as supply comes back to reopen other derivatives, which we believe will increase the order pace going forward. So we are in a very nice place on the customer order position, but we do need we do need to.
Obviously increased production to avoid this continuing to grow next slide if you would please.
Refocus so the refocus program as either an environment, we wouldn't have anticipated to operate chain, it's an environment, where net revenue improvements, obviously and the techniques, we use particularly the digital transformation techniques Vin <unk> bin analysis market by market.
The analysis so were built in the cost that's how quickly and most value P. Valuably dull environment has worked really well with the supply and demand we've seen our cost reduction environment not as well you've seen that in the earlier slides clearly with supplier factories like our factories being 60% full.
More challenging to get.
Cost efficiencies cost through to US. However, we did manage our best quarter. Since the program began in Q3 500 million pounds in this data set.
The techniques and methods we've been using since the transformation program started 400 million of that was EBIT related $100 million investments and we're signaling the EBIT related to continue.
Quarter four even its investment reductions do not continue through the end of the fiscal year. So our new guidance is $1 4 billion pounds for the quarter beyond the billion dollars. We signaled at the start of the program continues to build momentum as it take points and we'll continue to do so through FY 'twenty.
Three or so next slide if you would please.
Yeah.
So this is the warranty position I've shown you a lot of information here impact of sharing the information for the 11 quarters that have actually been in this role one of the first things I did say to you is that warranty was close to 6% in the quarter you see it.
Including the campaign costs in the first column and I referenced that close to 6% on several quarterly calls.
I'll, then talk to that in environment moving into sub 4% impacted new target volume, which we've drawn across the page at three 5% and we've I think how fully broken out the underlying I E. The warranty on the vehicles and the current warranty periods, obviously differs by market three four or five years.
And the one offs, which are the campaign costs, which you actually show the total number in grade that you can see over the last five quarters, 3.5% pretty close actually.
No because the gray line for most of those quarters for three of them any way have been below the underlying level as we've released campaign reserves for the period through quarter three through to.
Quarter, one you see all the gray lines less than that this quarter. We have agreed to put in place additional campaigns. One of them is a top up to a program <unk> six which are lost told you about in quarter. Two you can see the gray line that we're coming towards the Finalization of those programs that are in China.
Taiwan and South Korea has been a lot of work over the course of the last three months and final evaluations of course where else to.
Test each of those each of those powertrain units, we are substantially through the program we've taken the weed.
We've taken the direction here to increase our provisions through two program Finalization and we're signaling an additional two programs, which we're working actually with the different regulators on at the moment. Most of these are customer protection programs.
So one of which actually relates to an extended warranty program. We had in place and we've agreed actually to bring the customers in ahead of any potential failure points.
So three additional campaigns are put in place has increased the optical number this time, but I would encourage you to look at that three five percentage line.
The Gray line, which is the total cost ebbs and flows around that and we believe it will continue to ebb and flow around that in the future, even though it will be below and above on any given quarter next slide if you would please.
Breakeven points of the data has been even more dramatic is the power of our techniques and refocus kicked in.
So if you look at half two a second from the right I've lowered the guidance for breakeven in half 210 to 300000 units annualized or 75000 units a quarter.
It was just under 70000 in quarter three it will be higher in quarter. Four we had a very rich range Rover mixes we produce in past antero lots of our old range Rovers through to December .
Now in the change quarter for range Rover, where we stopped belt and the old one we're making sure that new one is ready to go before we ramp up <unk> and we will have a weaker mix of new range Rovers in quarter, four which will work itself through into the first half of next fiscal year. So we'll increase our breakeven in Q4 to around the 80000 units.
But second half average of 75000 units has the lowest breakeven pulp we've had for 10 or 11 years. So we're super proud of the work that the teams have done under the refocused program, which really has helped us optimize our position.
Periods of low supply if you wanted to the guidance going forward is still around that 350000 units of course, we will allow spend levels to increase somewhat to drive demand as supply reduces in FY 'twenty, three and going forward, that's about 15% lower than the <unk>.
Guidance, we would have been given just over 12 months ago next slide if you would please.
So our outlook page is quarter four.
Revenue will be above Q3, we are expecting a positive breakeven point.
EBIT margin as well, even though breakeven point will increase investment will be a bit higher up towards the 600 million, but not breaching it and we do expect positive cash flow in quarter. Four also that would be the full year position that would result off the back of that revenue of course down.
Around breakeven EBIT margin slightly short as I see the data today, but there's a lot of time to go of investment around that $2 2 billion and negative full year cash flow all of which will be working capital all of which will come back to us as we build more cash the guidance on FY 'twenty, four and FY 'twenty six.
<unk> FY 'twenty four of course.
We will very soon BNS sites, and we will give guidance on 2003, when we next meet.
The Mei enhancements for the full year FY 'twenty, two and of course, you would expect it to be somewhere between FY 2224, that's the key issue as you see the key for US is that continuing to work really really hard on those bottlenecks. We have on the supply chain, we're definitely breaking through but we're not at the end.
These challenges yet nor is anyone else as you would note.
Continuing to execute our electrification strategy under re imagined and our modern luxury which will be personified in the new range Rover, which will be in Dallas, Georgia in quarter four the refocused program has gone beyond the 1 billion target levels, we will reset that for FY 'twenty three.
And then positive EBIT going forward, we're now in the in the stabilization drove growth phases of this difficult last two years I think that's my last slide balance sheet. So it will be back to you.
Thanks Andrea.
Moving on to Tata Motors.
Next slide please.
Overall, 21000, CRO revenues from pick up in wholesale and retail and.
Also see the sequentially. Unlike Jim you've had a few challenges I wanted to talk about that in the coming slides we.
We see strong revenue recovery margins from our commodity cost as well as a few one offs have created a challenge for the quarter cash flow being positive of course.
Next slide please.
Overall, if you just pull out the volume and revenue piece I think CB at 19% growth with market share gain across product segments. This year has been a very strong performance PV of course is kind of standout year and continues the sweep.
Highest ever growth then.
Hi, instead of a one nims this quarter over the last nine years.
Full calendar year was the highest one in the.
Delaware touching the assumed within number the number to an EBIT of course penetrations in our touching almost five 6%. So very very strong performance in volume and revenue coming through.
On the profitability side commodity inflation is marking off almost 130 bps before the Cvs almost about 500 bps of margin is going away because of inability to price to the extent of the inflation.
We have taken our prices. So the last since March of last year, almost 26% prices gone through it it's not that we've not taken prices, but there is still inflation has been there but the good news of steel is now starting to stabilize so therefore, I would expect things to improve here.
PV of course, EBITDA $4, 2% higher than last year by about 40 bps and the subsequent <unk> related one off costs impacted margin by 200 bps without reserves might be more like six 2%.
Free cash flow strong with operating cash funding Capex may be similar to the <unk> story.
Please.
Numbers the way they play out.
This is compared to last year same time wonder mixed and realizations.
Stepping up quite significantly, but see the variable cost line, which leaves an unrecovered price of almost 430 bps between realizations and then variable costs passenger vehicle related one offs 80 bps.
The fixed cost is basically coming from Oh.
As we step up growth as well as higher depreciation and amortization for the new cars being launched.
So that's the story there next slide please.
On the cash flow side operating cash profit after tax is now more or less taking care of the investments and as profitability steps off we believe this number should really start stepping up further.
On a full year basis, not working capital is more or less normalized <unk> 50 close negative.
Although for the Puc's basically finance costs and therefore as the operating cash picks up we expect this number to shift on a swim lane.
Please.
And this has been spending at about 900 crores. This quarter, we expect to end the year anywhere between two to 3000 to 3200 crores down from the 3000 final cost that we had earlier so capex are under control.
Excellent.
So we want to commercial vehicles on the market share fight.
<unk> market share improving across all segments.
Particularly reassured, we've been calling out FCB market share of an area of focus for us.
Glad to see that picking up as well I'm sure China is going to talk about it.
So we're going to talk about that.
And also where it was heartening to see that <unk> really gone out of whack now starting to normalize again, so overall business from a competitive growth perspective has performed particularly well.
Volumes have been.
The C V numbers, the key number which I'm sure. All of you who are keen to understand is why is despite significant increase in volumes we have.
Not seeing it.
Margins improve.
440 bps of the EBITDA drop.
Almost entirely explained by the commodity cost increases that we're seeing so that is the <unk>.
Shannon that we have in front of us and the good news is that October was our worst month of November December started coming out we are starting to see those margins pickup and therefore I do expect to see.
Still on stabilizers and external pricing have gone in in January Q4, we should start going again.
Next slide please.
Girish can I hand, this over to you.
Yes, Thanks Belge.
So.
Highlights for the quarter gone by.
Volumes increased by around 15% over quarter two.
19% over the last quarter.
And as we saw the.
Micron third wave on the horizon.
So pulled back some of the production in optic.
And therefore retail was marginally ahead.
But as you mentioned, we've been able to gain market share across all the segments.
The game this year in nine months is almost 300 bps.
To counter this commodity increase impact we have been increasing nickel prices.
I mean, all the quarters, we have taken a price increase.
And you also have been continuing our efforts on the cost reduction.
But as you also mentioned in the beginning we launched <unk>.
With new products in Q3, it's a simultaneous launch event that we did where and we got very good response. So it was great from a.
750 <unk>.
Also buses were launched together a very good response.
We do continue our actions on deepwater looking specifically into areas semiconductors for the.
Engine control units.
Ninja components, because as the India demand has gone up.
If you see now the <unk> is.
For almost 45% for intermediate and light commercial vehicles.
Towards the 30% for the.
Small commercial vehicles, so it's almost more than doubled over the previous year.
Looking ahead, while we entered this quarter with the one microgram per view.
Generally as we've talked to most of the stakeholders I think the impact seems to be kind of sharp yield and economic activity is getting back.
Depending upon the regions of the visas at different points of time in different parts of the country, but generally the economic activities coming back and the customers seem to be coming back.
We do.
Broker sentiment index, which we do every quarter. So this was done in the month of November the field work happened in the month of November .
When the market was doing well and we've seen very good improvement continuing across all the segments over literally the minute CV <unk> commercial vehicles has been employed.
Gradual demand recovery received across the sectors, but led by E Commerce and infrastructure. The only thing is I think the growth that you've seen over the previous year.
Bill.
Putting off because of the abuse effect.
In service and spares penetration one of the.
Our focus areas for us I think we have been seeing consistent improvement month over month.
In fact, a record number of job cards in the month of December .
On the electric buses.
To whatever business, we have been running the operationalize 60, new versus the work for them the budget might be muted.
And now considering all the buses running across the country.
Cross more than 25 million kilometers.
And across the country and uptime of about 95% on a BOE. So I think we have been getting very good experience on running these electric buses and also on the gross cost contract model wherein we are onto operating the business not just the maintenance, but operating the buses through today. So this is one good experience there.
We are now having under the bic.
Looking ahead.
Yes commodity inflation has been impacting our margins, we will be taking the price increases the past who has not been.
And also the price increases have been clearly the commodity business, which had been happening quarter over quarter.
From first Genuity as well as you mentioned I think the steel prices seem to be flattening and stabilizing. So that's a good thing and we have deployed a comprehensive margin improvement plan.
All the levers to ensure that we get back to the required elements.
There has been some uncertainty in demand in the immediate term.
Due to the third world, but as I said I think generally the economic activity is coming back and therefore, we should see towards the end of the part of the demand coming back to the.
Fortunately <unk> a week.
Have activated the business agility plan when we are looking at both Nike products and planning and also aligning production with the retail.
On vehicle financing.
We must be aware there has been a change in.
<unk> main peer recognition norms by the RBA.
We do see.
Likely impact not in immediate term I think this quarter should do fine, but maybe in the following quarters there could be some impact on the small commercial vehicle funding, which <unk> been monitoring along with Macy's.
On buses van.
Sector demand does remain sluggish, but there is a good news now.
We seem to be starting in some parts of the country and you started getting some embedded in that area.
Semiconductor availability is still below requirement, but we have been managing it through.
<unk> daily monitoring and also through wearing the product mix to ensure that we are able to meet the market requirement for the maximum.
So that's been a big from CV side, but let me back to you.
Thanks, Rich next slide please moving onto passenger vehicles passenger electric vehicles.
The key highlight for this quarter has been the market share increase that has been extremely strong now at 13% and also a quick call out on the powertrain mixes is now evs among nearing almost 6% of the portfolio is just about 2% growth and about a year back so significant shifts that we're seeing in this one.
Next slide please.
Okay.
Performance in terms of numbers wholesale and retail is growing at almost 40% plus.
Revenue is now in this quarter it was known.
Hi.
EBITDA, increasing to four 2% on a reported basis and of course once you adjust for these one offs that are there. It's almost six 2% and business is now very touching distance of an EBIT breakeven and we are confident of achieving that pretty soon so on the commitments that we've made in terms of winning sustainably not playing out exactly as we.
We had planned for.
Next slide please.
<unk>, let me handle what percentage was of the growth drivers of the probably the most interesting part of this finish this one on the next one or do you want to take.
Thank you <unk>. So does this shows the trend from the lifts made if you see.
The NATO.
Greenland shows the industry trend.
The dark bar shows lithium volumes.
You can see we have been the main driver.
Industry growth, which has been.
<unk>, three and a half times of year to year basis, we've started with a very moderate.
Market share being the secondary markets level posted in FY 18.
Sure.
Last quarter, we have these 281, 6% year to date.
A few things, which are really driving this one as well.
<unk> posted 14000 customers who have already bought.
Good day.
We have spreading.
Splitting positive word of mouth. These people are very explicit earlier of closing the majority.
Posting their experience on the social media, which has really attracted a lot of sense. It doesn't just one data point, which I will share his thoughts.
<unk> launched <unk>, we had only 40% of the buyers who are using <unk> as their primary card or the AUM decline. This number has increased from 65%, okay, which means that it is.
Already being seen as a mainstream car.
Second.
<unk> team, which has happened is the concern around public charging inflow is.
Moving very fast because these.
12000 13000 customers.
Based on the telematics data that we have 90, 296% of the banks, they're charging at home.
<unk>.
The issue around public charging.
Clearly is coming off of your advanced ticketing and that type of comfort is increasing.
Two states smart Austrian construct gameboard demand incentives on top of the centers incentive remember the postpaid segment.
It's not hard to benefit offering.
And are these governments are extended.
50% of that we will see what.
Incentive voice.
The postman segment buys or some additional CD spruced up the demand in these two states into Switzerland.
A major driver.
Quickbooks.
Also it is proving to be better value proposition in terms of performance running cost of course maintenance cost and that has been released today.
<unk> segment, which was pretty much nonexistent after the onset of Covid has strongly come back.
And also the increase in petrol and diesel prices.
Ship towards the weekend and lost.
Few months, we have really ramped up the showcase of EV, which is also one of the big factors.
Capability.
Okay.
Quickly, giving you an update on the <unk> business, starting with the quarter highlights what industry. The industry grew by 15% year on year, primarily because of the semiconductor shortages.
But demand was pretty much similar to the.
The last two fiscal season complete demand ways, I would say booking condition and the industry was as good as last quarter.
Of the financial year.
We are seeing a structural shift continue we'll just see on the back of new launches and this has increased from 32% to 40% zone or the loss of share or participate in mercury and to some extent sedans.
As far as our performance is concerned Tata motors, 14% market share, which ability cohort, which is nearly 44% growth.
In BB and 264% growth in EV.
If you take the highest typically during our history in quarter three.
190 <unk>.
We also most US number one is heavy manufacturing after the launch of tack a bunch before this we used to be playing on book, but even it seems so there is a mutual.
Change in the competitive landscape in this space.
It's pretty soon.
But as you already mentioned that we have narrowed the gap with number two player.
Next one became the highest selling SUV in the last quarter.
We also obtained a monthly scale of protein protein.
This used to be around food food and <unk>.
<unk> over a period of time, we have not taken in 14 and 13%.
Last month.
And as I said number one assuming out of 45 modules that we have in the industry.
<unk>.
<unk> 5500 unit and in fact in quarter three.
19, 93% market share.
Help us take our EV penetration to 6%.
Going forward in quarter food industry outlook is better as compared to quarter, two and quarter three.
Pending bookings are strong in the industry with very low channel inventory less than 10 days.
Semiconductor supply situation is relatively better as compared to quarter, two and quarter three as well.
Starter motors consuming we have a very robust bookings pipeline and.
Lower channel only listed <unk> actually as we started the quarter four.
The.
The new launches that we've hired in quarter of key bunch was the main one.
<unk> has very strong response, and we have a good.
Good booking pipeline between available with us despite ramping.
Ramping up our supply as you guys get to meet the requirement of the market. This month. We also advanced the Diablo integrated ICT models, clearly differentiated versus what was existing in the industry in which has been taken driven and we hope to see some very strong bookings.
And just a matter of 14 days.
<unk>.
For the last two quarters, we have been working on capacity Debottlenecking machines.
This is going to continue to help us improve the place from where it is.
<unk> seen in the chart that <unk> had shown that every quarter, we have been improving at some place.
Very well mitigating all the factors around the semiconductor.
Situation.
We hope to improve it further given a better outlook of semiconductor FCC.
Critical electronic part of looking at getting better.
Demand remains strong we have.
Highest spending booking in terms of you know number of weeks I would say scale and we are very fast tracking of this place.
Talking about the challenges for the industry semiconductor remains a big problem because it is improving in quarter four as compared to quarter, two purportedly but cannot still on lease to full demand potential.
Pardon me of corporate inflection wasn't issue at the start of this quarter I would say, but I would say the process behind us it does not.
Not led to any significant impact this month.
From next month on what we expect that there should be better.
As far as challenges for Tata Motors is consumed pretty much the same to challenges for the industry.
We have not got impacted I would see this month also because of Covid, we managed it very relevant business agility plant.
And now the challenge remains to bring down the waiting period.
Two a strong pipeline of bookings that we have including the EV, which remains a priority for us.
So that was the uptick.
On PV and EV battery ability.
Thanks Eddie.
Next slide please.
I want to take a little bit of time on this business currently.
Normally we don't spend too much time on those but maybe it's worthwhile given the changes in the regulation there.
Motors finance the intrinsic business fundamentals are in a good place with the disposals going market shares remaining strong cost to income ratio remaining lower 29, NIM expanding to five three continuing assignments happening and good liquidity.
Two issues to deal with.
One is the REIT structure as well as EMS SME portfolio, we are seeing increased stress and even though we have not seen changes to the <unk>.
Expected credit loss.
We have taken additional management overlays this quarter and that is reflected in the all stage III assets.
Sitting at almost 10, 4%.
On top of it there has been a change in our payer relations with some of you may have noticed where to go two angles one is.
Identification of NPA is on a daily basis.
And second ensure in order to get an asset back to normal all overdue have to be cleared and not just the GNP of overdose.
We have always been calculating G&P on a daily basis for the last four years. So therefore that is not an issue.
But this is recognition of.
Little overdue before we can take in account out of G&P meant that the GNP of sharp to 17, 5%.
Obviously this is unacceptably high levels of GNP.
Therefore, we believe it's going to take us about 18 months to cure this it'll come for behavior change.
This is particularly coming from retail MSN me, mostly as CD customers.
And therefore.
Making the behavior change with them will required to strengthen the collection team focused on the 60 day collection bucket into the 90 day bucket and.
At the same time, we will also see growth of key lever because these are from a return perspective, it's in a good place and therefore, we would want to drive growth further to ensure refunders particular shift and use technology to deliver to manage risk even better from a lot of them.
Interesting ideas that we've shared with you in the coming quarters.
And of course continued affords the athlete partnerships that we have been doing successfully. So this is something which is we will cease to operate as a company and as Tom waters Finance. It enjoys full pro bono for more support on startup motors as it navigates. These GNP of challenges and also growing profitably. So this is something which we will keep a close watch on next slide please.
So overall outlook, we see demand remaining strong supply situation gradually improving but inflation what is do persist.
And we do expect to see this resilient performance that we have been now turning in the last two quarters to improve further in Q4, FY 'twenty two and beyond.
Jane I have already talked about its focused actions and we'll have Chinese and.
Girish. So let me maybe add one last piece on the EV Helios TPG piece.
We are in final stages of completing the Cps in.
For drawing down the tranche one so we hope to do this in this quarter and brought on should happen.
Work is underway to complete the final stages on that.
And of course, both of the businesses.
Aimed to target to deliver EBIT margin, that's positive and positive free cash flows and the two are reasonably confident Josh.
So thats, what we have to see as the presentation, let me quickly move on to the Q&A.
What I'm trying to do is spend the first section of Q&A around GE. Another series of questions. There then we'll do the next set of questions around Cvs and then <unk> and then once the first main set of issues are covered we will then mix it up as it goes along.
So starting with the first question that of their <unk> from <unk> capital to secure better chip suppliers going forward, especially with the onset of Evs a dealer has there been any meaningful cost increase the generalists coming through to the suppliers. That's question, one and two how starter motors, India PV manage the chip shortage.
What has it done differently that David <unk> has not been able to do.
<unk> theory can I hand this deal.
I can tell you that the question.
Well first point, you can imagine that with such retention.
Between demand and supply globally speaking for all the industry.
There are some tensions on prices as well, but this is not our.
Problem at first to rerun is really the availability of our our semi persist semiconductors, which is really what we are looking for permanently.
If I may also give you an insight about.
The specificity of distinction of DLR.
Is the following first point is that we have.
Little margin of maneuver in terms of litigation between lower and lower and cost against higher energy cost because we only have cost.
Cause that's the first point, which is different when you look at some of our Oems very different.
And the elements you have to know is that we have more steep very complicated sophisticated proprietary chips.
Which means that.
I mean 60 source for example is much more complicated long lasting is not sometimes impossible that explains <unk>.
Two key reasons why we.
Maybe a bit more impacted visibly, especially compared to two <unk>.
Thank you Suri.
Our next question.
And for July .
Can you give an update or an indication on the expected production for the fourth quarter as well as FY 'twenty three the chart seems to be so just only a marginal improvement.
Second the breakeven point of the speaker to substantially increase from 70 gateway deferred gain FY 'twenty three what is driving it.
Mix improvement has been very impressive do you expect this to sustain Adrian.
Yeah of course strategy. Thank you.
We're not going to put specific numbers on Q4, we're confident it's going to be stronger.
Quarter three but this is a gradual improvement at this point and that's why we've shaded the strength, we are progressing with certain supply bottlenecks and we duly anticipate step changes going forward, but only gradual improvement at this point in Q4 over quarterly.
Sorry.
And I'm not going to put a specific number on it because frankly it changes towards the back end of the quarter, particularly and if I give you a number of I guess, what you're going to ask me may well I didn't you hit that number.
So let me not pretend I have a specific number in mind I'm very confident the work. The teams are doing and I'm confident it's going to overcome some more bottlenecks in quarter, four which will lead to greater supply.
In terms of the point around the breakeven locked down don't look FY 'twenty three as a specific actually assess FY 'twenty three plus if you go back to that slide and what we're really saying is once we move towards a more normal environment, when we move towards a more normal environment.
We won't we won't continue after bias, particularly run at vehicles like range Rover. So you would've seen also a few read the data by carefully.
5% of our wholesales in Q3 will range Rovers that is not a normal business for us we will move towards a normal environment that means that we will be building more of the other families and that means that the mix average will actually start in a normal circumstances to reduce which means our breakeven point will naturally get.
Hi, Ed.
There was another question around what your breakeven be different if you build quarter four levels in FY 'twenty three I saw that I think all I'll say is at lowest levels of production and volumes you would expect to have breakeven point to be lower for the reasons that we've just articulated unexplained in quarter three which.
Why pull to those reasons apps.
Yeah.
Apart from product changeover, which we have two product changeovers that big range Rover and range Rover sport in our mix going forward again, we can as we drive incremental volume.
For all of FY 'twenty, three and we will continue to update you on that on later calls thanks Patrick.
Yes.
Thanks.
One more coming down the track from Stephanie <unk> from JP Morgan.
Thank you.
Can you verify that the UK financing is on unsecured.
And then you had about $230 million of restructuring provisions on the balance sheet as of last quarter and what is it at the end of December .
And third when orders of defender look very solid wholesale seem to be down versus last quarter why was that.
And.
Any feedback from the potential of our customers about not having a big four months.
And what would you estimate would be the number of potential customers who are waiting for that.
So Stephanie that answer to your first question is your cash flow is unsecured.
Yes defend.
Unfortunately that was a symptom of the prioritization of rain drove US right. When we last time, we can build the right drivers and all the families actually.
Did suffer from reduced production because of that and you will see within the order data the range to be defended orders excuse me rose.
Off the back of that.
So I just find your orders are solid we expect to build more defend this in Q4 and we pay out in quarter three.
Wholesale is that vehicle going forward, what increase that's pretty clear as soon as the point, where you can actually build them and don't forget we will at some point over the course of the next 12 months extend the defender family with.
An extension of the 130 range, which basically means.
Bigger party on the <unk>.
And going forward. So we will have even Greg Beecher offerings in that family as we go through the course of 2022 .
Our range of our customers and there is no data that I've seen at this point around Bev only range revenue customers were just starting to open the order books on a PFS for the new range Rover.
<unk> orders have come in over the last week or so I'll be well placed to explain to you in may.
Over the bank has gone we expect the <unk> to be Super successful.
Other derivatives, we're issuing.
Water fall, but at the moment the orders on <unk> No I don't have any site of that data and by the way even if I did it's pretty reasonable to assume they would just continue to be more appealing and growing before the release states in any event.
That's all I have to say I think on the questions unless I missed one balance sheet.
The restructuring provisions will be remembered as Ralph just curious may.
Dropped to about $200 million.
The end of quarter, three we won't pay all of that in quarter four so I suspect a finalization on some of those will continue into FY 'twenty three.
Okay.
Next question is strong <unk>.
Jana can accompany collaborate with other Oems for licensing of EV platform, so that EV launches can happen sooner and.
And second is one of the R&D capitalization rate expected for FY 'twenty three.
I can take that.
Our balance sheet.
Yes.
Prominently.
Solicitations and also exploring any type of partnership opportunities.
For the future.
At the same time.
It's interesting when you look at the picture of our new rent drover.
You can understand that we are absolutely unique in its not by chance and the M&A platform.
Need platform, it's a platform, which is bringing all this proportion that you can see on that.
Cost, but also all the extraordinary capabilities, which make them completely unique and that's that's the difference of differentiation that we continue to see once we're unhedged. So the consequence is that.
We are we are creating at the moment and we speak to new platform.
Because it's going to be.
It's going to bring a unique proportion and capabilities to our to the cost that we're going to manufacture with that platform.
And concerning a new drug where we have put the priority of the unique proportion of <unk> and that's the reason why for the moment.
We do it by ourselves.
Thank you thanks, Larry.
Yes.
Yes.
On the capitalization look I think the best way to think about this rather than give precise numbers at this point the best way to think about this is recognized what's happening engineers are coming off both range Rover and range Rover sport. They will increasingly do so over the next three to six months and then they will go on to the new platforms.
And the Jaguar platforms, which will meet their capitalization points as we go through into FY 'twenty. Three if you think about this in blocks of capitalization of 30 to $40 $40 $50, 50% to 60% there. The three blocks now you should have in mind, when they could come up to mature.
She will be in the 50% to 60% range when they are.
Earlier than that stages in the 30%, 40% you should expect the 30% to 40% range to be predominance over the next quarter to two and then we'll move into that 40% to 50% range and I'll start to signal to you as we go through the quarters and through FY 'twenty three when we have a site for a change from.
About 40% to 50% upwards, which it will do in this in the latter stages of those new platforms.
And the.
Jaguar platforms. So over this next phase we are in the 30% to 40% range.
Thanks, Adrian one more on <unk> than I moved to CV.
Is there a target for fourth quarter, taking into account the one off.
100 million outflow for restructuring.
Well the 500 <unk> isn't an outflow for restructuring originally they were the reserves. We set was most of those I think I've just said to the previous questioner, we have about $200 million still left to settle with the suppliers, it's reasonable to assume less than half of that will be paid in quarter four.
Of course that will ultimately be determined by the dialogue and discussions we have given that these are non contractual claims.
But the positive cash flow is net of restructuring can we confirm that the.
Positive cash flow, we intend to be net of restructuring.
Okay.
Just switching gears into <unk>. So that we are able to cover all the areas and then I'll come back to <unk> towards the end.
Greece shall not coming down your tracks.
In India most of the demand enablers in terms of improving fleet utilization fleet profitability recovering replacement age of seven plus year, how and when do we see them in SUV demand recovering.
In FY two correctly before right.
So.
Yes, you are right I think the freighter close in has gone up the freight rates have also gone up towards the end of Q3.
But if you look at the total industry volume. This year, we are still going to be less than 40% of the peak.
Right. So we are looking at the industry growth over the previous year. It is still far away from the peak.
The industry has already achieved.
Even next year, where you'll see some double digit growth still going to be.
A portion of work.
He was in the peak year, but as of 2019. So I think frankly, we are still far away from the peak.
And even while feed utilizations are improving.
They are not up to the level that we'll see in the previous peak. So there is some way still to go.
And as a result, if you see today, even in the customer mix I think it is more of.
The feed the larger accounts, who are coming forward buying and retail customers.
Very small very small amount in terms of their participation. So I think overall I would say the industry is still far away from the peak, which we talked about in the Q.
Thank you Great next question is from growing outside of the systematic the next one from Southampton contracts. Please.
Are the margins don't seem to have improved sequentially in third quarter, despite higher volumes and some price.
Have the tons in CV continue to go up into the third quarter to what has been the experience in Jan.
The <unk> price has been met with another round of discount bump or is it stuck at this time.
Do you think discounts have been going up in CV, Despite rising volumes.
So I think part of the answer to this question was in the earlier answer that again, so while the volumes are increasing over the previous year.
We're still far away from the peak number one number two I think the price increases that we've been taking in a trailing.
Trailing the commodity increases.
The price increases that we take.
<unk> gradually getting passed on into the market month over month within the quarter.
I think in this quarter of Q4 is a quarter, where we have seen that there has been no steel pricing. Please.
We've taken the price increase this is what our commodity increases that happened in Q3 and now we will continue to pass through the same month over month as Valerie mentioned earlier, we've already seen a month over month margin improvement happening in Q3 person and I think we will continue on the same trajectory dividends this quarter also.
Well, let me thanks, Chris There is another question on Gela from something I'll come to it in the end as we complete the CD questions are more on the PV and then come back to them.
Diminish hold the question and discipline.
Our question from <unk>.
Chris are you seeing any signs of the single and small fleet operators coming back.
Width.
Already talked about the eminent CV growth, so and one of the under a Korean economy kind of commodity costs, which are already covered in the presentation Dinesh.
<unk>.
What kind of chip suppliers do you expect in the fourth quarter for Cds and Tvs. So maybe the first section good.
Issues right up your alley.
Yes, So I think I spoke in the first response about the customer mix. So the customer mix is currently skewed completely towards larger accounts.
<unk> seen.
A sign of retail customers now.
Small customers coming back into the market gradually.
Starting from few regions.
This is something we continuously track.
The.
<unk> the <unk> the profitability comes back to you Bill.
See the retail customers coming back, but as of now I think it lifts and also when should I appreciate that.
One of our new <unk> six purchases the large fleet accounts larger.
Larger accounts were doing.
They are selling have been ordered at <unk> School records, which in a way are going to these smaller retail customers. So that's our goal.
Continuing hanger is happening currently but we do see these things off the retail customers coming into the market.
On the semiconductor if I can answer ability. So we do continue to face.
Shortages, but I think.
The efforts that you've taken we've been able to secure supplies in Q4.
Medium and heavies, the intermediate and lights.
Of course, the requirement is pretty low.
We continue to face challenges in the small commercial vehicles segment and that's something that we have been working with the supplier.
Thanks.
Thanks Krish.
Well more than a set of questions on PV that is coming up so China show to you.
Tata Motor Speedway Division strategy clear on them. However, if consumer demand is strong for hybrids during the transition in the next three or four years with automotive be considering launching products there.
If you ask what would be the lead time for deciding that launch.
We launched <unk> seen strong demand for the variance and the same question. Another question from Jacques Henri again.
What are the company's plans on flex fuel engines and <unk> in the next two to three years.
Felicia.
Yes, <unk> so.
Let me first talk about the hybrid.
There are certain players who have taken a position on <unk>.
Vehicles available and therefore, they are processing claims.
Italy to meet their equivalent of Kathy.
And there would be few players who for the purpose of complying with the Cascade equipment food cost prohibited.
And therefore, the way we see this technology is.
Mainly for compliance and experiences on people going to sustain itself for the next few years.
We have to focus on technologies, which will not only help us to meet the cafe requirements, but also.
Which is going to lead.
This is going to enable us to lead the charge as far as yield.
Zero emission technologies are concerned which is going to be done.
Acknowledging that will sustain itself for the coming years worth of growth.
First and.
And Thats why we have taken a conscious call focusing on.
And just to give you some understanding of what it.
Takes two of simple cash if we are at a 3% to 4% penetration level of Tvs.
We would fully complex and what is needed in the country and our targets are much higher so we definitely will need.
Hybrid and support the complaint to cafe, and therefore keep us focused we have to make strategic choices can keep other sources.
Towards future.
Future growth and this is the conscious call we have taken.
This can be clear that spun as a capability is consumed to make hybrid.
30 months day, because some of the peer companies would welcome hybrid density. So that's not a problem, but we have made a strategic place to focus on EV strongly.
It helps ito the future demand.
Future relevance that stood us strongly meeting the need of cafe to the extreme that we can be surplus front deck.
Chris.
The second question was concerned on CMT.
Yes, I think it will CMG.
Yes.
Segment, which is going to grow in the coming years.
This will be a subset of I would say the patroon because.
This is being more triggered with the rising cost of petrol. It uses a petrol engine as you know and therefore can.
<unk> so the true end to operate extremely well so diesel are replacing diesel in the entry segment cars.
We see a strong future of this given that there is.
Deeper penetration and expansion of the C&D eclipsed at ESC in the country.
Therefore, we will focus on CMT, because it's a more cleaner option on the ice side.
So this is something that we continue to focus on but it is can you just refresh me the part of the question, which you asked.
Flex fuel savings.
Flex fuel on the flex fuel as you know the first milestone for us.
In 2020 slate, where it is mandated that we need to be treated with <unk>.
For all of our models and we are pretty much on track as soon as that is concerned.
There is a discussion ongoing discussion with the mortgage on implementation of flex fuel.
Beyond this ratio going up to 85% or so.
Okay.
A discussion on the time linked product.
So the whole ecosystem readiness, which is required for that.
It is the final outcome of that discussion.
Completely done.
As far as fixed wireless business.
Okay.
One more.
Questions and comments to questions, we're going to see the similar one is from growing outside of the systematic then issued July <unk>.
Otherwise, we wont CMG.
Which customer profile do you see <unk> picking up.
How do you see the mix between petrol diesel <unk> going forward and that is one and also any any indication on the order book and how has been the response to the launch and would you be also doing it in other products as well.
And will this.
Premium hatchback and compact SUV segment.
Yes, so I think all of the questions are interrelated, let me start with the customer profile.
As you know that.
The important of BS six norms.
Diesel became less valuable in the entry segment, primarily the hatches endo sedans compared to them.
And.
So most of the segments, which will list the new club with diesel really struggle in terms of.
Being relevant in those segments and Thats why you will see all the models, which existed in diesel.
That's completely gone away.
This is also a segment therefore, particularly from a customer profile perspective, which is sensitive to the running cost.
And less worries about the rest of the other aspects on performance.
Our drug.
For example sophisticated features.
And therefore, the customer profile is.
Just.
I will take a price point less than <unk> segment.
ILUVIEN was liability these a little last year segment and customer profiles. It also connects philpott.
And with your customer profile in that segment.
No.
About.
The CMG.
And the fuel mix distribution, which was also the other question that you had.
Andre.
Let me, let me give you per institution and firstly can you talk about automotive is how we see the spending.
Over the next three to five years today.
Diesel is 15% about 60.
Talking about the exit situation this year, because let me focus of where we exit this year.
We would be at about 65% to 66% of petrol diesel would be 15%.
CMT, we believe we'll be in the range of 10% to 12% as we exit this.
Quarter, and Evs will reach around 7%.
In the next three to five years.
<unk>.
Possibly come down to about 50% <unk>.
<unk> will go up to 20% also on the back of it.
Two of them.
Few other models that we might come through and that was also part of the question and I'll reply to that also.
Diesel would come down to about 10% and I would say.
We have already declared our target of going more towards 20%. So this is the kind of mixed.
Believe would be three to five year period.
The industry this would be slightly different given that we are more aggressive on the east across the industry. This would be say, 70% penetration in three to five years.
And the CMT will definitely be a bigger portion, which is 25% because I see this is mainly going to cannibalize.
The patrol and to some extent diesel come down from.
Current industry level, 18%, 20% kind of level.
This is the kind of transition that I see in the next three to four years, but also depends on how the whole.
Mix of fuel Grace's CMG petroleum diesel play out in the coming years.
Coming to you know what are the potential segments, which will be relevant for CMT and what models we make.
Therefore consider.
I think in Suvs, the <unk> might struggle given that it is very performance oriented segment.
And.
Less sensitive to running cost.
Therefore, they see the CMT will have only partial.
Penetration in those segments, but as I said, there are still segments and you mentioned in the premium segment.
Simply less what to say.
Inclined towards <unk>, given the price points and the economics of CMT.
As a patrol it might play out to some extent, but not as deep penetration as we have seen in the precinct mentioned compared to <unk> because of the boot space that youll get which is completely compromised on Hudson. That's the thing that we're seeing in the demand profile also that we are getting for the pull model state.
There's a strong preference for compact sedan, therefore, given the boot space that it gets.
So therefore, we would target a few most segments evoking lending, but as of now we have work.
Really focused on the hotspot of CMG pitches.
<unk> and <unk>.
And I must tell you that.
Bookings are very strong economic <unk>, the numbers, but would be like.
Three months bookings property.
But as you correctly, yes. Thank you thanks, Alicia before jumping too.
One final question on CD that is common and then coming.
And back to Gena.
Is a gain in some.
Some deeper mines are gaining market share in CV segment due to <unk> sales of LCD segment. We're the second largest players plus some does not do you see continuation of market share gain in the segment and where do you see the share gain in share in Q4 'twenty.
The original <unk>.
No.
See first of all I think our share gain has been across all the segments.
So eminent CV there is most of the engine penetration at all.
So our LTV, yes, there is.
Almost 45% penetration.
And you spoke of you ask specifically about SCB I mean below ltvs.
So below Ltvs will get the market into sub segments. One is what we call a small commercial vehicles and the second one is pick ups.
The pickup suitable maybe 60% of the total.
<unk> segment.
Because we don't have a senior offering at all it's only in the small commercial vehicles, where we have a senior offering web.
As I mentioned in the presentation I think the penetration is somewhere around 33%. So I think the.
Market share gains number one has happened across the segments and its not.
On the back of senior loan number one number two.
With regard to Q4, so we have our own retail targets I think we're working towards building a strong retail capability to reach a particular level and thats, what we are working on.
We will continue to improve on this.
Back to your ability.
Thank you.
Krish so let's go back to a set of questions coming in on Gillette.
First we've been software we'd have to subcontract with credit Suisse <unk> Capex came in at a new low of GBP, two 2 billion in FY 'twenty two how should we think of this falling capex in light of the immediate EV transition underway. Both Janet is a partnership with some other Oems are cross leveraging our platform's inherent in these assumptions.
Let me take that balance sheet look.
Theres nothing intended all behind this reduction.
We give guidance each quarter around $600 million and we have been low for the last three quarters now some elements of Capex and non production investment.
Really tough actually on the return on investments required much tougher than historically, we would have been and Thats certainly is a pace.
On the spend here, but you should continue to expect.
<unk> to be around $2 5 billion and maybe next year be slightly higher than that as a as a piece of catch up here in terms of the spend profiles, obviously below each of the spend to categorize the different profiles come out at different points by far the easiest.
To assess is what the engineers are doing and what they're working on I have already explained that as a path of the capitalization questions. So theres nothing theres nothing mysterious about the levels. We're spending you Doug you shouldnt be thinking we're consciously trying to reduce that spend anything you'd wish to watch here, yes, I think maybe interesting rich.
With the previous question on the on the glass contracts, where it because.
Remember when we launched <unk> mentioned, one year ago, we committed to grow from two divide by two the number of platforms, which is happening and the second point, which is not necessary.
Is that.
Criminalizing.
Significantly <unk>.
Those platforms to key control points after new value chain.
Typically the batteries.
Of course.
The electric Motors, Sam we do software onboard of growth and all that together is creating a real skill level of Geo lock, but we are benefiting from management.
As an impact of course.
Thank you. Thanks, Susan Thanks, Dewey next question is from <unk>.
The average realization per unit in the quarter was almost 68000 pounds up from the 61000 in Q2 is this driven by a higher range Rover range Rover sport quarter on quarter or was there any other driver how should one liquid realization per unit when it will normalize and what can be the normalized range.
Yes look I called out the data as I did in the presentation hopefully to head off some of these questions in the past I'm not sure I was successful with that.
We had a huge bias towards the range Rover in the quarter, we did that because we know we have to close down our production.
To make sure that we were ready for the new range Rover that really has that really has tilted. The average revenue in this instance up to that 68000, you need to connect data sets here, it's really important because there's a lot of.
Suspect initial modeling going on beyond the low some of this.
Low volumes high average per unit they go together.
So as you asked the question what are the volume is likely to be next year, but I can certainly confirm to you if not substantially higher than this year than we were a very high average gross vehicle revenue points, what you might be thinking about what point do they cross over ice.
Suspect they will be above 60000 times average until we drove more than 100000, causing a quarter right. So there is some frames I've given you that it's very little to do with range Rover sport Bild in quarter three it will be more to do with the range Rover sport <unk> actually in this call.
On our quarter for which we will attempt to do exactly what we were successful.
In our quarter, three and that is to be able to those final vehicles that customers of all just because of where our last chance for us to fill that order and that's just the right thing to do and Thats, what we will do again in quarter four.
Thank you. Thanks, Andrew I think that is onset of set of questions around the range Rover and range Rover sport.
Realization per unit, let me go to a different question.
Global Oems from benign. Thank Morgan Stanley . The second question, the global Oems highlighting software sales as a revenue opportunity.
In the long run how does <unk> see this opportunity and lastly could you talk about China demand outlook for both the JV or some of the important morgans.
Well I think we announced it very clearly in our strategic re imagined that yes of course, there is a significant shrink and increase in software revenue but.
Because we have what we need to put us in terms of onboard software of borders.
And it is improving.
Untested manner for the next generation of platforms as well so it's a fantastic enabler when it's in the neighborhood that we are already using by the way.
We launched our in control renewables fleet telematics.
And of course, we're making the best of luck.
Software over the air to improved from Nok two services against the answer is clearly yes.
Okay.
On the China point LNG import business originally were constrained in terms of production levels like the rest of our or the rest of our global business increasingly in quarter three.
The JV or CCL ours become Sim.
Similarly constrained there were specific production issues in Q3 as I referenced in the main part of the presentation, perhaps some supplies in the north of China now they are being worked through but the conditions now for both imports and for local is that.
Demand is above our levels, we can't currently supply.
Obviously, what you are seeing similar to other parts of our business as a significant increases in <unk> and importantly in cancer.
Camps are in variable marketing and I expect those two things for both elements of China to continue as we go into FY 'twenty three.
Okay.
Thank you.
Another question from promote commodity UBS can you throw some color on the hit of GBP $45 million related to the battery end of life on slide nine.
Romer agent covering this in the discussion you didn't want to speak a little bit on this.
It was it was actually a reserve release, we did in September so we.
<unk> quite extensively to it in our Q2 results at the end of October , but that's why it challenges of negative. This time because there aren't two releases, we effectively were building up end of life for patients on batteries and the absence of a defined.
Methodology to actually dispose of and that's changed over the last several months and we removed all of those reserves from our books.
September based off a piece of work we did I think I talked at the time under ignite alongside some external consultants. So there's no we don't eliminate.
Eliminate the reserve twice, that's why you're seeing it this time around but it really relates back to actions. We took in September <unk> September .
Thank you.
Let me.
Another question is coming up on.
Extraordinary expenses I think there's one question BLA Rishi, where our codec securities.
Why did the target group not participate in the BLA for advanced chemistry sales.
We have considered this extensively and when you looked at the.
Conditions of this particular BLA, we found that the risk return equation was not working out for us and therefore, we decided to stay away from it after having done off.
Humungous amount of work I would say so.
So that's why we decided to stay away.
Another question from <unk> July on India can you share more details on the extraordinary expenses in this quarter related to formation of the subsidiary C. I think.
The formation of a subsidiary has a series of steps to be done in terms of you will have a one more hit coming close to about 200 gross coming up in the next quarter as well, it's all related to how are you.
Stamp duty the land transfer premiums.
Starting with the buildings are up to the Mark all of those are getting ready for PV subsidization is done. So therefore these are.
Treated as exceptional extraordinary expenses, and hence called up but we are not able to take exceptional and hence that is the underlying cost. There is another item that you will see in the Standalone books related to an exceptional item that an impairment reversal that you have because the two subsidiaries design subsidiaries are now being sold to the <unk>.
And therefore, we have been we are fair valued them and then taken to them. These were impaired earlier, because we did not.
In March of 2020, along with the BD impairment when the Capex plans were low. Therefore these people. These companies didn't have the revenue.
Stream coming to them, but with the step up in Capex in performance of the PV business net reversal of happened. So that's the background, but that exceptional item.
I think there is one final question on the accounting matter, which is from sort of ambit capital.
Regarding the PD segment, we can see that the PV segment is showing a profit of 834 Cros as profit from discontinued operation our EBIT margin in the presentation is showing a minus two 6% and not able to reconfirm.
Sorry, if you recollect I have started my presentation with this thing that there is an accounting item, which is just.
Of clearness of accounting were discontinued operations are not allowed to take the depreciation of that and that is sitting as.
Item in the balance sheet.
Obviously once this company comes into existence from Q4 onwards, the business goes back the moment, but for like to like comparison in the underlying business performance is unchanged.
Sure the number on a like to like basis.
Presentations on this is there in the north store concepts will need further.
Clarification feel free to reach out to us we will explain that in detail if needed.
So with that I think we are.
Now coming to the end of the session here.
So it's on the hour. So thanks, everybody for joining us and I hope <unk> been able to take most of the questions coming our way.
Give us a feedback in terms of whether this format does work for you. We are trying to getting asked many questions in as possible.
And we will try to improve upon those going forward as well, thank you and stay safe.
Take care Bye bye.
Im turmoil doesn't Janet in thanks for your time guys.
Hello.