Q4 2022 Tata Motors Ltd Earnings Call
Interface that 168 is going to grow as we go through quarter. One next slide please.
This is the beautiful range revenues for US say hopefully you did have the opportunity to see the available on Tuesday.
Obviously off the M&A platform.
This is beautiful to drive as well as a range Rovers beautiful described it looks absolutely gorgeous and the color the picture looks good but you see that up close it is just fantastic.
Next certification, we've talked about electrification of our land Rover products from 2024, including this connectivity.
Improved capability of our <unk>.
Architecture in terms of connectivity, we see that within the warranty data as well, but locally to us in the U K I'll just leave that there for two or three seconds to stay around.
Before I take it from the page.
Next slide please.
The wonderful refocused program, one and a half billion in FY 'twenty two across pretty much all of the areas you would expect us to focus on a lot of activity in market performance continued into quarter, four and will continue into quarter, one and quarter, two particularly thats the.
And to dose to shortages of supply of course.
Well a lot of work to do on cost.
Including that mitigating inflationary pressures. The teams are very very folks focus on mitigating those pressures and to help us the digital transformation program on both market performance and cost we are getting much better and recruiting many more people to enable us to dive and see actually whats happening.
So it needs the billions of datasets that we actually have.
And I've mentioned investment we did make some investments savings we are tough on non product investment in the criteria, but we do need to spend more and we will spend more towards the target going forward next cycles.
Okay. So one of the questions I'm sure as inflation, we've tried to be helpful. Here again, as well 12, and a half billion pounds for the cost last year. We've identified the key areas. The costs that we think is going to be subject to inflation commodities semiconductors energy labor.
Can see it that it's about 20% of our total cost.
What are we doing about it obviously, we're trying to mitigate those claims paloma. So that's why the refocused program and our sense is that it's for efficiency capability and value generation.
Sustainable solutions all of those things.
The programs maturing with confidence over the course of the full year, we will offset those inflationary claims.
The claims are hitting us early so again Q1, maybe more inflation than offset but over the course of this 12 month period with very competent refocus what offset inflationary claims were actually seeing next slide if you would please.
Summary.
<unk> supply challenges of course compounded by the conflict in Ukraine and in China, then shouldn't come obviously inflation.
Volumes, well, we think grow, particularly as we get through the launches you shouldn't underestimate now bring in a run out of a range rather than run in and run active range Rover sports and run in wood and at South maintenance slowdown in volume until we are ramping those up late in quarter. Two we are increasingly confident about short term EBIT target in FY <unk>.
<unk> four and beyond and also our cash targets as well you see that as a prioritization is exactly what we have explained already in the presentation I think that's the last slide. Thank you. Thanks Adrian.
Moving to sort of more of those commercial vehicles.
So just to re clarify it doesn't move the Suffolk amongst all tied up under commercial vehicles and you added the world.
The next slide.
Oh.
The numbers out there a draw your attention to the powertrain mix of particular callout is the penetration of <unk> Tvs that you are seeing in the portfolio with IFC.
40% of FCB commercial vehicles running that book the eight buses almost entirely.
Replacing the Venezuela.
So it's a significant shifted powertrains that youre seeing as a fuel prices are starting to increase and the lots of the CDW have done just hasnt accommodate twofold. Thanks.
Next slide please.
Really happy to report back that we and our increasing market share across all segments and that's what's happening on for a long time and we also believe that the normalization of the SCB failures will also help us from an overall mix perspective, as well, but what really stands out as a testimony to the quality of the products that are in the market.
And that's being well received.
As youre well aware off.
Financially I think the performance of the overall <unk> business delivered an EBITDA of $5 nine and an EBITDA of $3 four.
And basically a call out to you is as you look at the revenue growth.
<unk> significantly higher than the one that growth led by improved mix and pricing. So pricing has been playing a very very logical.
So we have been increasing market share and increasing price and improving sequentially. The profitability. So we are on the right track and Thats a trend that we intend to continue going forward, but obviously the biggest challenges.
Remain commodity prices.
And therefore, that's something we should keep a close watch on exactly.
This is the work that is there.
The big investment that you're seeing in terms of fixed costs are already driving the growth of the business as we see growth coming back has been a catalyst.
Alright, so I won't call out kids go back to the slide is the Unrecovered price. If you recollect sometime back we used to be calling all backed by 40 bps of negative unrecovered prices come down and starting to narrow as pricing and starting to align with the market.
Thanks, Mike.
Okay.
Got it okay.
Thanks Melanie.
So highlights of fourth.
Quarter end of the year gone by.
So while the industry grew by 46% last year have you been able to.
Along with the 33% growth.
Grew our market share by.
The vps and the good point is I think we were able to gain market share across all the segments whether it is.
Medium and heavies intermediate and late small commercial world.
Passenger segment.
I think the commodity inflation did impact us.
Europe .
And the margins were impacted but of course, we kind of scrape the bottom in the middle of Q3 and after that towards the end of Q3 and Q4, we have been continuously bring with iron ore.
The comprehensive margin improvement plan.
For the 510 bps improvement both due to the margin improvement.
The operating units.
Delighted to tell you that you've been able to grow our spares and service penetration consistently and penetration has grown almost two times.
In last four years. So we are thinking about 30% now in spares and service penetration.
We will continue with our product offering soup, so launched more than 80, new products last year. As also 140 variant that you will recollect.
In the month of October we in fact launched 21 products together, which was received very well in the market.
Okay.
Looking at the bright spots I think the sentiment index.
Internal metric that we continue to track every quarter.
He is doing pretty well in fact, both in medium and heavy than intermediate in light commercial vehicles.
Over the last three years, because because of the high now so its consistently improving over the past two quarters.
The medium and heavy commercial vehicle demand does remain.
On the back of infrastructure work being done by the government and even in intermediate and light commercial vehicle. It does seem well due to growth in the manufacturing sector as well as e-commerce sector.
As far as.
Finance familiarity for medium and heavy retail customers. It is improving consistently and in quarter. Four we have now seen the retail customers coming back into the market. This is one point, which we have been calling out consistently that our retail customers are not bad for a minute fleet I think the good point Bill started coming back in.
That's one of the reason that the demand has firmed up in order for it.
Also a good point.
CV passenger which is the buses and vans.
Been doing very well very bag, so to say for last few years I think in Q4 the demand our stock is picking up and we also see the trend continuing in Q1 of this year.
Some of the challenges, we would like to call out the inflation.
Of the one of the challenges to be addressed.
But.
What about fuel price increases that have happened in the month of April .
I have deep confidence metric to some extent by the freight rate increases in fact, one has seen the freight rates work consistently during Q4 effect from the end of Q3, which has been improving transport our profitability is just that the.
Spike one has seen in fuel pricing through this has not been recovered three but otherwise overall I think the trend has been good because of <unk> and.
And freedom Liberty has been going up.
So we are watching the situation on the overall.
Inflation in terms of your price increases in rate hikes.
Closely watching it I must say that the pipeline for our customers has not yet been impacted in D. C.
Good pipeline in place.
Even in the month of May.
As far as the on the supply side commodities.
Im in creating further I mean, we have had.
Of course reduced impact in Q1 of this financial year, but in Q4.
We had we had to be a good increase in the steel prices is also a precious metal.
But where does this I think we do have a comprehensive margin improvement plan now in place and we see a consistent improvement happening in the margins.
On the supply constraints semiconductor.
Steve continues to be a concern in Q few products.
Some of our diesel powered vehicles as well as CMG powered vehicles.
We have been able to manage this.
Well, we havent debottlenecking by looking at videos so levered.
There is our generics and by also bringing some strategic inventory.
And we think that.
Where does the end of each one of this year it appears.
In fact, we should be able to address this good logics team.
I must also add back in this we have been focusing on establishing the new prices right. So you've taken another price increase on first of April and in Q1 of this year.
And that has been pushing the market to establish these new prices.
<unk> demand.
Okay.
This time I would also like to take a few minutes. We explained some of the new areas that we have been pushing in the commercial vehicles.
So first one amongst them is electric mobility.
And within this I think we operationalized more than 250 electric buses last financial year, mostly in.
Wei best and.
In Nevada, the Michael J Martin emitter.
And now cumulatively, we have more than 645 buses.
<unk>, an Indian rewards that cumulative kilometers covered more than $35 million.
All of this is being delivered within obtained more than 95%. So I think we are they are looking very good experience in this industry Inc.
We also have received a fuel cell electric vehicle bus order from <unk> for 15 buses and we will deliver towards the extra two years, but I think we are using this opportunity. This capability because we do believe that fuel cell is a very promising technology towards.
Zero pathway.
Lastly in electric mobility apart from buses, we want so 400 into cargo <unk> mobility now.
With the launch of the <unk> electric vehicles just to meet back.
And very encouraging.
Answer delighted to tell you that on the same day of launch we actually were able to sign a memorandum of understanding with quite a few e-commerce customers and their logistic service providers.
Amounting to almost 39000 units.
On the same day. So this is a very good beginning quite odd.
Mistakes and positive of bulk.
The small commercial electric rate case.
On the entire mass mobility solution electric one so as mentioned we have strengthened our team.
Buses.
We want to maintain and operate Margaret So we are delivering some risks on the policy limit so.
We have now more than 400 buses running under this vertical.
And also delighted to let you know that we have.
We merged US alone in the tender, which was recently by CSN with the Google or quantity of more than 5000 buses. So we have been focusing on building a lot of capability in this vertical.
On the physical side as well as the digital side.
Hoping you could reduce two words.
This exhibition.
Depot management.
So do you think activities to ensure that we are delivering the best operating efficiencies to the customers.
In addition to this <unk> and team are working on what will be the right financial structuring for this business as we go here, but we do see a very very promising the business opportunity in this area.
On the digital front.
Few things two posters.
A brief about fleet age so fleet ages are connected vehicle platform and commercial vehicles.
With them.
In terms of enabling customers to manage their operations efficiently bring down their cost.
There are a set of productivity and finally.
Help them focus on their customers better.
We have benchmarked this with some of the best in class.
Platforms are available globally, and then British roundup.
To date, we have more than 100000 vehicles on the platform and 90000 customers.
With an average engagement time off around the nine minutes and we have more than 75% monthly active users.
And now he test data is now being used by our advocacy will offer insights on fuel efficiency to the customers.
And therefore, this actually becomes a very good.
<unk>, so to say and ways to the customers, we booted from inefficiencies.
And then portable operating economics, and also manage maintenance and therefore fleet uptime and better so we have come up with.
<unk> new value added services, which will represents management program as well as uptime guarantee.
We argue bridging all this data to provide value added services.
Yeah.
We also see that more than 100000 downloads have been bid on Google play store.
And a rating of more than four.
From the customers were downloaded and I'm using this.
I'm also pleased to tell you that <unk> now has the highest number of euro six vehicles on the platform, we have heard of anyone else in the country.
In addition to this.
<unk> also launched <unk>, which is our digital storefront all spare parts during last year.
And would you be able to reach a lot of customers, who otherwise they're finding it difficult to reach our physical retail and equipped with electric to tell you that in the first year. It's certainly post revenue of 100 gross and we have very aspirational targets even for this business. So this is in summary about the commercial vehicle business biology back.
Thanks Krish.
At least I'm wanted to passenger vehicles.
In fact, our ranges launched.
Launched in proceeding received very well by the market.
Here again, the numbers youre seeing draw our attention to two data points here. One is the domestic market share in the last quarter catching up eight 4% consistently increasing.
There is a fuel of the powertrain mix that you see.
<unk> penetration increased to 9% and electric penetration offsetting a seven point focus on substantial shifts that you're seeing in the spot exactly.
Here again, the EV market shares.
87% for the full year 94 for the current quarter.
<unk> and frozen area, where.
The numbers are starting to more quite rapidly and will continue to keep pushing this buyer and hiring expertise.
Okay.
Financials, I think all of them.
The key messages I want to leave you with the business is on a very strong turnaround that's increasing shares delivering growth well ahead of market.
Breakeven.
It's very strong.
All away from the breakeven to <unk> $6, 9% kind of EBITDA and is now an EBIT breakeven business and they also mastered or PBT breakeven and cash breakeven. This quarter. So this business is now well and fully on track.
And does she needs to be seen in the context of some significant challenges on contribution margins given the commodity price increases that we have so that's something that we're dealing with but nice to see the momentum build up on operating leverage starting to come through us.
Slightly.
<unk> seen I'm not going to talk about the only reason that I mean number that the size of our ICL numbers aggregate provided for this corporate sales. That's the only reason that are then otherwise nothing new Windows X factories.
Let me hand, it over to Charlotte to quickly run yet.
Bright spots and challenges.
Could be.
Yes.
First a flavor of what the industry was in Q4.
We saw the easing out of situation of semiconductor suppliers in Q4 as compared to what we had seen in Q2 and Q3 of last financial year. It was a 21%.
It is important increase into place.
As she leaves a trend you'll see continuous increase as a percentage of that.
Share of DIY and it can feasibly esports into not 40%.
On the back of some new launches answer which happened during the year.
So to start our model is concerned but as you've already presented.
This quarter will be.
<unk> increased our market share to $14 four.
And also it was the highest ever.
Our sales.
Third quarter level as well as for the full year of FY 'twenty two.
History of clinical news of E&P business.
We honestly most is the number one is TV manufacturer in Q4 on the back half of two strong brands <unk> had even somebody.
Next one for the first time.
<unk> financial year, FY 'twenty, two almost as the number one sealy among 43 models that we have today.
In Q4, he assumes tons to 9000 units.
Which was a penetration actually in photo studios.
And our market share of <unk>, 94%.
This will be achieved with a floor.
Talking about auto.
Slide 23.
Predictions that we have seen to introduce Susan our estimated oil towards <unk>.
Possibility also.
The industry.
So passing the peak that we had seen in 2018 to $3 4 million.
And since this is.
So on the business side, we hired over the last years.
Quarter, one of the financial year, FY, 'twenty, one and FY 'twenty, two we lost volumes because of Covid disruptions.
Hoping that this will be more disruption of Dr. <unk> and also semiconductor.
Situation might start using them.
Because on the basis of data solution.
Demand for <unk> modules.
You said, you're already seeing increasing christophe customers in these two powertrains.
Primarily driven by I would say in prison patroon prices.
I'm just trying to start a motors is concerned we have a very robust bookings pipeline.
Bookings Englishman grid has been increasing.
The channel inventory has been blue at nine to 10 days for the entire financial year last year.
As windows, we see inventory levels remaining low.
The strong response, we have seen for Suvs Ford excuse me, which I talked about.
<unk>, what we launched in June 22.
<unk> also got some very strong bookings.
And is really poised to move it.
We are also going for certain capacity debottlenecking actions.
Further unlock the mixed feasible.
We have planned for this year.
And you can demand remains very strong and fast ramping of displays.
To really catch up with the demand to screen.
It makes it currently.
In the last six months, we have already ramped up spending.
Nearly three and a half things.
Talking about the challenges traditional to go orders semiconductor institution is what is still very uncertain.
It is.
Restricting us to tap the full day mindful to ensure that we have.
Commodity price increase.
It is also one factor, which may impact the profitability.
Sure.
I was kind of title.
I don't want business consume certain electronic components of Intermune Chinese Vips.
<unk>.
Multiple actions to mitigate this risk in terms of creating alternatives Irishman switches most transmission its own semiconductor suppliers in terms of end market based on soup.
As far as cost is.
Is concerned.
Continue to focus.
Focus on value engineering and then.
We have identified 90 was to improve our profitability.
And the next thing in between.
So quick update also on the PB and we say that we've already.
Next slide please.
Shifting gears to the turmoil of CDI plus <unk> together just to get a sense of cash flows.
So just a comparison here.
You will notice that.
The operating cash flows the cash profit after taxes. So ahead of the investment cycle in English can plants and therefore, it's been funded internally and with the growth coming through the negative working capital is generating the cash flows that youll see at an overall level and we do expect that normalizes next year. Once the growth stabilizes. This is something that we should normally and we'll also look at it more of a negative working capital.
We can tighten that a bit slippery up we are able to resolve that so thats exactly.
Overall investment the only call out I have a <unk> will be stepping up investments product between <unk> and <unk> both of them and even for CBS .
And therefore, we expect to see anywhere between close to about 6000 crores of Capex is what we were spending it but rest assured as CFO remain positive. Despite the significant step up in investments no change in strategy that it is declining fronts more of another growth coming back we will be able to deploy to pick up.
Exactly.
Taking a minute on Tata Motors Finance, you would notice that sort of an area of concern. We had last time. The good news is that the collections are starting to improve significantly and we are compliant with our vips Vietnam's up from corrective action and.
Having said that the auto is at five 4% is not something that we like and therefore, we will be continuing to work on improving the market.
Auto is better by focusing on maintaining our market share of around 30%, reducing GNP NPA as aggressively.
With the collection strategy has been to be calibrated the inline with the June losses are coming in.
From RBA from October onwards, we will expand nims product and excellent digital transformation and also create new digital auto accretive income streams as well. So the business is clearly on message and delivering on the strategy that they have and we will accelerate that going forward as with expertise.
So it does bring us into the last slide which is basically looking ahead slide the key callout I would want to make euros.
The amount is likely to remain strong despite the geopolitical inflation concerns and given the strong order book both in CV.
As well as PV and Greece explained eloquently the demand situation and CBS will be the Nazi concerns there at this point in time.
Supply situation is improving albeit gradually.
And commodity inflation is something that we need rate is likely to remain at elevated levels. It will be sticky.
We do expect to deliver a strong improvement in EBIT and free cash flow that we get from net automotive debt free by a quite frankly, that's the journey. We are committed to and that's part of the FY 'twenty three is concerned the immediate first quarter Q1, we'll obviously have the impact of the Covid led China Lockdown without there and does something once that is behind us the performance will improve through the year.
Like what we have promised sequentially trip Saka joint improve there as well and of course individual cluster areas adult therefore, all of you to see with this let me now hand, you over to take any questions that you may have.
Okay.
Okay.
The question you have already built up let me now start with the most obvious question generic R&D from what last fall and it is providing the pro forma P&L to make it compatible with US 12, Standalone and also would it be possible to share that <unk> CV and PV business on a quarterly basis.
The rest I think the.
We are moving to our consolidated Don because it is very it is meaningless to look at the Standalone number or just a CV minus interest rates.
And therefore, I wouldn't want to do a pro forma that I'd, rather encourage you to move to the new more do you already have full comparison across time.
Any way, giving into yields so definitely we would encourage you to look in that direction and from a materiality perspective, the CV business in India is something which is quite in line with the dominant segment depth and BD is almost entirely India. Therefore, it was pretty comparable to what it used to be in the past, but it is something that we would want to.
We wouldn't want to encourage you to move towards those consolidated.
Let me then move onto the other questions that you may have.
Again generic R&D I think.
On Gela Adrian would you want to take this call.
<unk> target of EBIT, 5% and CFO GBP $1 billion is based on what kind of volumes.
And do you expect those mixed to normalize and in first half FY 'twenty three our phase out of our support militaristic the mixed normalization in the second quarter or third quarter.
Yes, thanks packaging, so we do expect volumes to increase particularly as Ala.
As a range Rover range Rover sport products come through.
You won't see a full year number this year, which is as strong as we run out of the year.
You won't see that but.
But I can model of 5% and opinion cash, but I want a series of volumes, because we will actually target the volumes, which is highest value. So it will be higher after quarter, one quarter by quarter towards towards the end of the year I'm not going to give you a number.
Actually I don't know when Covid is going to closing in China, and I don't know when the semiconductor is going to improve but let me reassure you. There's a variety of volumes that they were doing this which will enable us to get to 5% EBIT and free cash flow were pretty in patents going forward, but it would need to lift in the second half of the year.
Expect mix to normalize in half one now I do not know whether or not that's a phase in phase out and expect the phase in phase out period to be half one.
Quicker on range Rover slower range Rover sport that three months behind each other so you're really going to have to start to see quarter three data Chris to talk about.
What the new norm actually yes, and hopefully by then the China position is closed down and our semiconductor position as easy as well I did say to you in February 'twenty one.
18 months before we saw a version of normality. The reason why I said that was because of the running rate. After those two products. So you won't actually see that come through until second half of the year.
And the last one is on the consolidated cash flows.
How do you plan to raise his CFO Glenn already blend two year tenure.
Zero by FY 'twenty four let me take the question I think.
Two pieces here, we are saying anyway.
Ways in which we intend to look at our cash flows primarily being Mcf second is monetizing any noncore and any residual equity for all thereafter, we need we'll look at it the strategy doesn't change obviously.
Fundamentally weighted towards free cash flows and Youll notice even this year the free cash flow basically working capital that is the one that has joined us and a growth comes back to learn about on one of those we do expect to see JA solar its numbers with Adrian has already talked about 1 billion cash flow in the current year and as growth picks up that number doesn't pick up even further so we haven't we are quite comfortable that this plan that we have.
That's the reason we are reiterating it and that is something that we will deliver that spec.
Moving to the next question.
Let's go to the military to get our technology soccer one minute. Please.
Okay. He has are facing.
At this time.
Stifel.
Two months.
Okay.
Promote UBS behaves are facing headwinds with customers opting for beds, you masbate cost of 3% was a minus 5% of our behalf and regulator scaling back support.
With Germany facing our incentives in China importing license restrictions, how does it affect us all properly.
In the market given Jay last higher depends on the dependence on PFS in 2024.
Yes.
T have been deaths total in Q4 was 14%. So it is increasing we anticipate that to continue until the full band offerings actually arrive in two years' time, we expect to advance <unk>.
Nation to double over the next three years and then double again over the following five years. So.
So we do actually see and we do have a lot more demand and order by four P. Hep units. So what you're suggesting here is actually within the dataset that we have today they are constrained like other products by shortages in supply.
Okay. Thanks Adrian.
Rakesh from BNP Paribas.
GBP 500 million of lower investment in <unk> compared to the plan levels, whereas the cutbacks been made and will that not be needed to be done in FY 'twenty, three implying higher capex need in FY 'twenty three.
There is a mixture of reasons why the $500 million and SSA. Some was an undefined spend.
We have quite critical determinations for what we allow returns on investment some will be call. It took us we go into FY 'twenty three whether that means we breached two and a half but in with it.
And that catch up in FY, 'twenty, three or in FY, 'twenty I'm not certain yet, but there is some of that cash back, which we actually need to do and we have no intentions of saving money in areas that we need to spend okay.
Alright, thank you.
The next is from practically <unk> Nippon AMC question to Greece recently, Tata Motors was and one in the CES in tender and is please explain the unit economics of the order rate so rates corporate we're extremely confident that we're in very close to ice counterparts on our rupees per kilometer basis.
Yes, so pathetic.
I am glad to give you some context C.
It will be a an operating almost 3000 buses in the lead or the last 10 years.
And then.
Many of these vessels have covered more than 7 million kilometers, but we're still operate with.
90% of pain on a daily basis so.
We have a huge amount of experience all of these <unk> and Broadway.
Which we have discussed including the Stifel amongst lenders. In addition to this I think we have been into the electric bus market now almost four years.
Yes.
With buses being around the world <unk>. All this experience has been that put together and we actually assembled a team of almost one risk professionals.
They looked at each and every cost element, which goes into forming.
Our retail from Pittsburgh, Columbus, and Randy will impact optimizing each and every cost element, bringing efficiency in each of the past 700, and finally, we were able to come through.
The most efficient and kind of have some blood, which we reported.
And we are quite confident to.
<unk> delivered on this but also to make money at the rates at which vehicle. So I think there is a.
Among this amount of work, which is gone behind.
We're in this.
And experience of almost experience and wisdom of operating buses for almost 10 years.
Yeah. Thanks rich.
Our next question theories is coming your way.
Consolidated as from promos and grid capital considering uncertainties of supply chain in commodities, what gives the management the confidence to give an absolute value that info agenda.
And the second question is good to see an increasing order book or how the how does that order cancellation trends been in <unk>.
Recent months as new unique capacities have been created in Europe . Okay. Thank you, but if you just concerning the first point I think we of course to.
The uncertainty around the house is quite big on the Samsung we can see gradual improvements quarter after quarter, even if the speed is that you cannot do one we would expect the reality of the actions that we are performing better and better is giving us the confidence that we will continue on that trend and hopefully accelerating that's the first the first.
Good.
Constantly.
The robustness of the bank I would say that.
These are our ability of our products as such.
<unk> sells more non significance is the fact that.
Thank you.
Our next is from.
Joseph.
From December into March and we have seen an increase in <unk> inventory as soon as retailer inventory already explained those given such a strong order book look I see this as a really healthy sign because we've got several things we need to do here one of them is to refill the pipeline.
And over the last six months, we sell at about 15000 units back into the pipeline I would expect this trend to increase and to continue you need to think it'll add footprint is global.
It can take US 90 days to get a car to a wholesale point or two days it depends on where they go and so our intention is to refill. The whole pipeline you will see and can see increases once we start getting up in total from the 66000 units today 30000.
36000 data zones to around 90000 in the health of our pipeline would have been rebuilt it's going to take a few quarters in law.
Along with that.
Re supply position, we've talked several times, but this is a good and a healthy sign.
Okay.
Yeah.
Okay.
Maybe I'll take <unk> question from the lot of workshops.
Working capital requirement is expected to increase in gender pickup in volumes and activity.
I don't think so because it's a negative working capital business. So therefore actually generates cash and working capital.
Business growth company. So you don't need to worry about that EBIT margin target for 'twenty three 'twenty four 'twenty five you've talked about 2496 in FY 'twenty three and you talked about 5%. So most of the numbers are there for you from that perspective.
Oh.
Let me couple of thing Nomura.
Congrats on the team on a strong performance here.
What's the long term outlook for the first part on a FIFO industry and tentative forecast any broad range will also help one.
And how do you see ASP in FY 'twenty three wasn't there quite when you do in India.
<unk> is coming to you always subsequent it's definitely go first question Adrian.
Quarter, one is going to be a difficult quarter because of China, let's see if we can continue the gradual improvement.
423 will be stronger than FY 'twenty two.
Big things again, a range relative changeover on range Rover sport will change as the China Covid, a little bit of Ukraine for US and then the semiconductor piece and as they start to lift it will start to see the volumes lift in our order bank stabilize thank.
Thank you.
Charlotte <unk>, how do you see the selling price in FY 'twenty three versus FY 'twenty, two for India PBS Whatsapp.
What is the auto book in monthly order inflow for <unk> overall, and how much does this production locked in we have due to supply constraints in April or may.
And how many of these really large positive one one of them together.
Okay. So maybe the first tranche is really difficult to really assess what will be the change in ESP, especially because of the commodity situation, it's going to play out and therefore, the extent of price increase that we are going to deal with from a mix perspective, I would say.
It will be pretty much in line with.
The mix that we have seen in Q4 and the realizations that we thought it will be pretty much in those lines and additional.
Price increases that we made it.
So that is kind of guidance I can give at this stage as.
As far as order book in monthly or alluding to is consumed for.
See <unk>, okay. So for auto I would say it would be about two to three and a half things maybe.
Maybe.
For ease it would be about five months.
I cannot give you the exact number for you.
Sensitivity reasons.
How much percentage production loss due to supply constraints.
Glenn can talk about <unk>, but as far as the pool is concerned I would say that we have been growing.
If youll see bundle and won't be growing as well.
Ladies are concerned and we were able to still hit the number of what the one constant 2000, but in terms of what we could have produced based on the capacity and the order book that we had.
I would see it would be still a 10% loss, which would tend to 15% loss that we would have incurred in terms of the sort.
<unk> second Houston Hanmi easily launching its liquidity, we have launched one yesterday.
We have already mentioned that in the next five years, we are going to launch <unk> products. So you can expect.
<unk> products at least.
In every financial year is what I can see.
Thank you Charlotte.
If it is coming your way you appear to be losing retail market share in most of the developed markets I understand that but semiconductor ratios market shares dynamics are different at such low market share when mark but did not impact the brand.
Yes, let adrian any of your equity.
Yeah.
I think the.
It is clear that we are impacted more than some of our competition.
Many recent steps we have also developed a remember in some of the previous reaching we got together and we are getting that.
A big array of actions, especially some look long term strategic agreements, which are helping to make it such that we have got a much better location, so thats quite gradually improving the situation.
We are losing some market share at the same time.
Sure.
The impact of that on.
On the ground is maybe the country.
Higher salary ability because scarcity is creating desirability to be even higher to the extent, we just sometimes it's incredible.
Even surprised we should maybe not but we are because of the incredible appetite of the customers and clients forward quarters, and we cannot supply enough. So the broadly to certain extent, even boosted towards modern luxury at higher levels that we expected and faster.
The next question also to Youre coming in from <unk> Mutual fund.
The visibility we have talked about.
To that I think there's a very interesting question.
How much improvement do you expect driven by alternate sourcing by reprogramming redesigning vehicles for other chips, assuming extract existing supply levels don't change from FY 'twenty two levels and your plans for that.
It's a very interesting question because we are the hubs.
After some differences we have with our competitors our products Super complex.
We know that Korea for chips, which are very sophisticated.
Very often they are.
<unk> chips, so the utilities are much more difficult or longer to put in place to redesign we felt with tier ones are directly with some of our suppliers.
Or where they are working hard on that.
On that angle as well.
Along with US you understood with the creation of an incredible intense and fruitful dialogue with our suppliers not only to win but of course, even more with our chip suppliers. So far deliberative attraction that we're creating for us, especially now that we are.
We are sourcing new businesses is making such that we are as well.
Moving the shop some supply.
Just because of the huge interest that we are we.
We are creating for them and Thats. The way we are improving the situation by having all these part of his actions together.
Thanks Terry.
Again from solo two.
Users coming your way or what's the plan for <unk> on site of any commercial vehicles.
Okay.
I think on the CMG.
The silence.
Silence has to be done between.
That range.
And the people right because for higher range generally.
Commercial vehicles, or maybe Paul longer range use and therefore, they need longer range and knowing the retail infrastructure of CMG and essentially you need the longer range. So we have been selecting applications. There is a range of equipment makers ROA and.
And bringing in products that we would've seen small commercial vehicles, mostly used or intensity applications.
In the intermediate and light commercial rate in April so.
And to some extent intercity. So there you have seen a very good penetration of CTG.
We are certainly looking at some applications, even in the medium and heavy commercial vehicles.
Where it makes sense to move towards <unk> sufficient to induce available without compromising on the pillow.
And you'll see some action coming from our perspective, and you'll see it but we are quite clear that this movement.
Towards our tonnage growth is here to see because it makes sense for the customers as well as for the conveyor collapsed.
Exploration.
Question to Adrian Shrug and Louis.
Can you give a production range that you can achieve in Q1 and Q2 based on current visibility appalling that it can change.
Yes, sure. So I'll go back to what I've said before actually rather than give you any numbers quarter, one it's going to be difficult. So linked quarter, one because of the China position the range out of the position and the range Rover sport position, we do expect some of those things, particularly a range Rover <unk>.
Actually increased production as we go out of quarter, one range Rover sport new start production at the end of quarter. One so it's reasonable to assume Q2 will be stronger standing down developments in China of course.
Thank you next.
Next one against <unk>.
A rundown on new launch impact of renewables or is it restricted to Q1, our H. One another extension can be expect normalized volumes off of peak quarter of Orange will work is only $5 in Q4 impacting ESP. So rundown as Q1 ramp up is Q2 will impact both quarters in the first half on range Rover sport.
On the range Rover I'll say to you what I said two years ago on defender assets. I said, then fine sized units a month is a healthy benchmark for us.
We are pretty certain will be significantly higher than that if we could build them today. So on range Rover I'm going to just say, yes, you're probably right at five months is a healthy baseline for us and if you then back load that into 50000 orders that we have today.
That would suggest we are flat types on the planet is sold out for tenants, that's telling me, it's likely to be higher than that as well.
Okay.
<unk> and <unk> business, how do you see the margin traditional demand headwinds inflation impacting liquidity.
Novartis had been headwinds at an impact of a significant impact on EBITDA. So maybe July possibly you Adrian and good HCV coming your way.
Yes look all of the things you have listed there other things you would expect.
Factors to impact this year's results are referenced while I said early on inflation, we think the refocus Kirk was strong enough to eliminate eliminate that.
And.
Across all of the hedges that we actually have so yes inflation will impact, but we expect the offsets to ICP in place and zero is a problem for us this year the real Big thing again is.
Volumes were able to produce very healthy side, where you saw that in China, but across the piece.
<unk> will be strong again in FY 'twenty three it really is all about the volume position.
Same question Gregory shelving.
In the commercial vehicle, let's look at the customer profitability first and then the company margins.
First customer profitability is concerned.
I think more than interest rate. It is the fuel price, which has a bigger impact. So you can see the operating economics of the transporter.
The impact of fuel prices almost four times back off the interest rate hike. So we'd be more concerned about the fuel price hike and then followed by of course, the interest rate hikes.
Demand is always dependent on what is the kind of balance or imbalance between headwinds and <unk> as of now we see.
In terms of availability of freight for transportation.
And therefore too long at list what are the headwinds have been very in terms of fuel price and interest rate hike seems to have been overcome with recruiting suite, but as I said in the beginning we are keeping a very close watch on this because this balance is very important and then we keep track of the snow coming to our profitability I think we have one.
Often that.
Steel price increases.
Ill just impact on the CV profitability.
This is something that we've been watching and also having a little and actions to reduce the impact of steel pricing.
Bankerish.
The next one is from I mean granted JP Morgan.
China, we have discussed the supply chain issues on a part of China Lockdowns is there a risk of demand getting impacted due to the disruption of economic activity and can you share any latest trend for April and May in terms of order intake and channel Gary I think the impact is massive as we seek for all rents for the global industry.
By orders of magnitude for the last months is where the industry is about minus 40%.
On the premium side, it's even more than 50% decrease for overruns included so that's the normal situation because the traffic control rooms is almost zero because people are kind of get out of their homes the situations in which.
Part of the country, but the significant part of the country.
As such.
I think people were thinking but other things then.
The new process amendments however, as soon as the situation is going to come back to normal.
We try to catch up and we can see that with <unk>.
The context, we have all the insights we have in the country is absolutely massive massive and by the way it's happening in many countries when they get out of Covid certainly people are going to troubled southern people went to enjoy life again.
New car is part of that so although you will regain concern except that we expect.
Entry to repurchase through Christmas.
Yes.
First one is from factory. The next one is from a couple of thing Nomura.
Another significant volume ramp up plans for EV of Bvs for buses for CBS .
Kind of synergy what kind of advantages can give from a synergy perspective finish krish.
Do you actually.
Thompson.
So we have really looked at each of the segments since he leaves us with SPD.
<unk> fleet as well as the <unk> segment, and we are trying to see major potential synergies can be in video of motor rest with us.
In the area of batteries batteries, especially the chemistry.
There are people, who choose the form factors and as well as the Cedar thing because.
The fast charging capability in on.
This was the ski house certain areas, where we have seen a convergence, especially let's say for example, as Cds in the fleet segment and Bebe.
There are certain comment on the Destocking, we have seen in the mobile.
Category.
And the order period of time, we have taken a view of <unk> for five years.
Ginny see certain arrangements as well as for the choice of Chemistries and so.
It's an ongoing exercise as some of you couldn't get extending different segments reported kind of choices can be made.
Green power ratings.
And therefore, there are areas of synergies, but also it yesterday.
Yeah.
Okay.
Okay Fair enough for the next question I would take how are we planning to secure battery supplier for such large volumes.
<unk> indicated earlier that I think there's clearly a plan or from a product perspective to look at setting up battery facilities.
We are consciously and you discussed this last time, we've not applied properly aligned because we found the conditions to be onerous at the same time, we're very clear that this is something that we would want to setup. So plans are in progress and ethylene we are ready to share then we will do so in the Meanwhile, there are clear.
In the intermediate between now until the end of factory comes up.
Traditional battery sourcing strategies are being implemented.
Satish next to you from Rocco and rotating securities.
Sure current EV production capacity, obviously that.
<unk>.
When we restructured our speed iron horse trainer in minerals fitting the EV powertrain.
So there we used to have an issue of capacity it was limited to start with.
But for all our products now we have integrated and are.
Assembly line.
So literally we can.
Fully convert ice capacity <unk> capacity is not an issue.
As finance.
Certain supplier capacity in certain comprehend capacities.
Soon.
We have enough headroom than what we are supplying right. Now we are also come with a very comprehensive plan based on the.
The volume projections that we have.
Two new.
New lines in the area of battery box trade.
Trade Lane.
And part of electronics items so.
As far as capacity is concerned we are absolutely on track.
It's something which is really stopping us or restricting us to unleash the full potential of demand that is out there is the issue of semiconductors.
Thank you.
Yes.
The next question is from Glenn Chin.
<unk> Bank of America.
On Gela can you give us some color on the commodity and just again I'll ask and how do we expect commodity inflation for metals to flow through the P&L.
Yeah. Thanks, So I'll refer you back to slide nine in terms of the actual position.
The material customers down $80 million.
Quarter over quarter, and our hedges are up 82 million.
So those hedges are running off.
And in terms of that specific exposure within that Alan Minneapolis FX exposure.
And I think over the course of the next 12 months, we have about 25% of that hedge.
More of it in the short term less in the second half of the year surface continues into the second half there will certainly be more exposed, but again, our third to what I said earlier, we expect the refocus program offset all of that inflation across including the increases in commodity costs in FY 'twenty three.
Land evenly by quarter.
But we certainly over the course here will offset all of these cups.
Next question again to you the EMEA has come down below 1% do they expect these low levels of sustained to see why.
Financially if any three unchartered, how should expand beyond that.
So on on Jaguar land drove the 1% look that is the low supply.
Number 1% as we resupply that number will increase during the course of the year. So whether it stays at 1% will really depend on the speed of resupply when we do re supply the projects tell us the biggest towards the banks.
And the biggest demand will have the lowest BMA range Rover range Rover sport and defender <unk> quite a healthy position in the foreseeable future because of re supply southern is to re supply and then those products are.
Very very sought after.
Thank you.
I think the the next question in English advance more CD business can you talk about fleet, operator, economics have discovered it quite extensively and as far as skip that and also how our OEM discounting trend in the market.
So I think the.
Last year you had.
<unk> was one more than Q1 in next one.
My Nederland was in Q3.
And we know whenever the demand goes down I think.
Williams keep on fighting for Noah.
Lower volume, which is that we've been monitoring so those were the times men.
Discounts have gone up but I think we should also keep one thing in mind that there has been significant price increases which will happen during the last year due to the commodity pricing visits.
And I think the point to point pricing is doing last year has been.
Words of 9%.
The pass through within that.
Has not been full has been part of that which is therefore led to increasing discount in absolute terms, but if you look at the.
The momentum fluids January of this calendar year to now I think gradually the market operating places have green are going up.
Which is therefore, helping us improve our realizations have you seen on the optical say in terms of datacom letting the freight rates have also been going up so we're already seeing improvement in their economics, and we have also been improving our realization.
And just to amplify that point, if you noticed the waterfall that we had.
Earlier, we used to be having unrecovered pricing a hallmark by under 600 reps in the model that we used to call out that is not down to 200 bps that speaks to the 200 reps there.
Our next question is from.
Ross Sandler systematic.
Nothing that's been covered so let me skip that so I think at a clear engine has GNC carry I think it's probably coming your way and of course in light of the scope of pay up with Nvidia.
Is there scope, including existing programs or other future ready program.
Also we are entering the let me stop there and then go to the next question.
Yes.
The partnership.
We can deviate is really.
Going to be visible in the next generation of cars.
<unk> costs, you're absolutely right.
On all of our products actually weaker state of the art typically sees in terms of.
Because it was driving so we're working hard with them and it goes very well it is very much on track.
The next question also for you.
We are entering with eds in circuit.
Collection that we only and it isn't.
Just a question on the position of Jaguar I do you want to position Jaguar addressing our phosphate based on type legacy.
We want to them.
To reinvent completely.
Grant of course using.
Okay legacies.
S preparing.
You have nothing.
A couple of months the mix also and because of the legacies too great legacies of our brands.
<unk> such that we're creating to demonstrate an absolute technology's superiority and this is where in the world.
We're performing with.
Racing is absolutely fantastic when you see the magnitude of what we can translate from truck routes and we have potential for examples that we are capitalizing on the amendment and even enhancing so far we can have to the edge.
<unk>.
Technologies in terms of electric drivetrain and of course specific controls.
The battery management system, so for electronic Arts picture in terms of for.
We felt forgetting of course, the absolute sweet conductor technologies to make that happen.
Thanks, Gary.
Next question, Joe challenges coming your way.
Forget a paragon is just CFC what has been a recent trend in R&D hiring for the company and what kind of additional or new capability buildup are we doing.
And.
And in July and a vignette, maybe let me first half revenue what kind of voltage architecture that we planned for.
So as far as hiring in R&D expense.
Of course, we are Greenfield road major hiring.
Actually this year, but there is also.
Another area, which we have looked into very deeply as upskilling. The current engineers within <unk>.
On R&D.
And that's going to be also a big component of how we are going to really expand our R&D base is from there. So.
It is concerned and also clinical data simplicity sake.
As far as capabilities are consumed.
There are many areas, where we are starting to develop these capabilities within it isn't easy.
Batteries BMS.
Motor design.
New architectures that can field eds, we have shown the concept of India as.
As well as the <unk> beauty of electrical architecture, and there is lot of collaboration both the two months what happened.
With maybe a startup companies to your knowledge.
So capabilities will not be only what we've seen limited didn't Tata motors, but also.
Seeing the opportunities of synergies Vince you not as well as the completion of the Jetblue.
A lot of capability.
Software.
So these are the areas, where we are focusing one spread as a linear is consumed.
Chips are cheap.
I would not like this at this stage when it is in the CDO funds on symptom government and engineering feasibility, but I would like to see that our choice of words architecture.
Eight nodes in the range of 401 continuing in June .
We'll depend on home charging and from your seat.
No.
Mortgage lenders and the state of grid as far as India is concerned and also more importantly, the choices that we would have us, but it isn't going to get some sub systems are concerned or the $3 six members.
Definitely seen trend and luxury segments in Ontario, Gleevec is going to 840.
$8 million in <unk> for <unk>.
Some time that this will be in those one offs.
Where we get the sweet spot.
So right now as far as R&D is concerned I'm not confirming that it is Michael.
101, but these are the constriction slip here taking into account.
Actually David.
Alright, great answer.
From <unk> I would maybe just compliment we could and then go to which is the one double into the one of the.
Political change in the value chain of E mobility compared to the previous ones of course, why because we need to.
REIT investors some comfort foods.
You mentioned the sense apology, we could you mentioned the EU, we mentioned in the Investor We could mentioned the semiconductor the strategics to become the chosen which are part of this new value chain and its scale thats mastering controlling the value chain, which is not excluding from partnership is absolutely critical to manage not Sunday.
The particular verticals together, but also.
We will continuously.
Satisfaction and its dealers.
So that's that's what is driving us. So we are of course, excluding the default.
That's moved up we're hiring and we are partnering in order to make it such that we are at the most liberal of these topics. It is absolutely true that the second point in my view is the.
The way, we can enhance and embrace the full ecosystem, which goes along with E mobility.
The technological advance.
The capabilities that we have.
In order to manage not only the product, but also the services, but also a seamless experience for example, when you're charging and all of that is very much Todd So everything we can share with Tata.
As a group and one of the key point being of course software and so youre right to assume instruments.
Thank you I think with this we come to the end of the questions that are there I think the rest of the questions are basically.
Reframing of the earlier questions. So we believe we are off and everything.
Any can you believe that you would love to take a clarification on something MCC to reach out to our Investor Relations team.
To be more than happy to address you on that one thanks, a lot for attending especially on bank settlement for also your candid answers so seasonal best wishes everybody. Thank you. Thank you.
Okay.
Okay.
Okay.
Okay.