Q4 2023 Tata Motors Limited Earnings Call
Speaker 1: Despite a very weak start in Q1 and Q2, which you see in the numbers, the business has been sequentially improving its performance and doing it in significant stretches. So very happy with the way we have ended.
Speaker 2: Next slide, please.
Speaker 1: Our source of growth, the quarter we grew by about 35% of which volume and mix contributed 24% of the 35. And the price came in at 10.5. So price is still a very strong variable in our growth agenda.
Speaker 1: Profitability 3.2 into 6.8 and all businesses contributing to it and JLR coming at a very large swing. There you know contributing to the 2.8% out of the delta there. Again, debt continues to reduce at 43,700 cross and TML India 6200 cross JLR 33 billion pounds. 3 billion pounds at the 30,000.
Speaker 1: Normally we don't do that, but it's fair to just pull back and reflect on what this quarter and the year actually means for the group. For us, it's each one of us in this call. We feel strongly about this. The highest ever revenue in a quarter, the highest ever every day in a quarter. One of the strongest PBT that you delivered and all three auto verticals will be profitable on that day.
Speaker 1: in the last 15 years, so it's worthwhile just to mull over it to say the. I would say that the potential of this business is slowly starting to come out and that's what we would want to build on when you're going there. 24 this is basically giving us the impetus to how you want to play refreshing for? 0Mario
Speaker 1: Next slide. This is also something which we are happy about. A dividend of 2 rupees per share for ordinary shareholders and 2.1 for the DBS shareholders coming in after sometime. And this will obviously have to be, the board has recommended this. And this is how we approve the NCU in shareholders meeting.
Speaker 1: This will result in a cash flow of 771 for this part of the plan of debt, which is factored into the debt reduction plan in any case.
Speaker 1: So again, very happy to see this. This has been a key demand for the retail shareholders and I always maintained a turnaround is not complete unless we pay dividends and nice to see this number coming through as well. So, thanks a lot.
Speaker 1: With this, let me hand it over to Richard, who will walk you through the numbers. And Adrian and I will cover the DLL section. Richard, over to you.
Speaker 3: Thanks, can you hear me okay? Yep.
Speaker 2: Absolutely.
Speaker 3: So I'm allergies already explained some of the positive future announcements for jail, so I get the chance to go through some positive historical financials as well. So if we go to the next chart.
Speaker 3: Left hand side of this is last year by quarter, so if you look through retail sales.
Speaker 3: Very glad to see us back over 100,000 units of retail sales for the quarter. That's up 20% versus Q3 and up 30% year on year.
Speaker 3: If you look through all of the financial metrics on this chart through revenue EBIT down to free cash flow, note that for each and every metric improves in each and every quarter.
Speaker 3: So we have demonstrated strong, consistent growth through the year.
Speaker 3: 7.1 billion, that is the highest revenue that we have seen since FY19. EBITs are 14.6%, 6.5% EBIT, PBT and £850 million worth of cash in the quarter.
Speaker 3: In fact, if you look at the second half of the year, we generated £1.3 billion worth of cash. That also is the strongest H2 cash performance for seven years since FY16.
Speaker 3: The strong performance in Q4. If you look at the full year, although there is some movement back in retail, that's the natural effect of dealers de-stocking when we had tight supply and restocking now that supply's coming back on stream. Revenue was $23 billion.
Speaker 3: We produced 2.4 EBIT for the year. PBT was negative 64, but if you look through that just like the old added game of two halves on PVT in the first half of the year was minus $697 million in the second half of the year it was positive 630. Free cash flow for the year.
Speaker 3: 521 million. Also the best full year cash flow since FY16.
Speaker 3: And we ended the year with £3.8 billion worth of cash, £5.3 billion worth of liquidity and £3 billion worth of net debt.
Speaker 3: So we have had like I said, strong consistent year. We do exit the year performing well. We also have an order bank which currently stands at 200,000 units to assist us as we go through the start of this year.
Speaker 3: we have had like I said, strong consistent year. We do exit the year performing well. We also have an order bank which currently stands at 200,000 units to assist us as we go through the start of the year. OK, next job.
Speaker 3: I won't read through this. This is a written version of most of the comments that I've made. Feel free to read it at your leisure afterwards so we go again.
Speaker 3: Right, so this is our wholesale performance. So wholesale for the quarter, 95,000 units.
Speaker 3: 19% up on the previous quarter, and that's been driven by a much more stable and expanding production system.
Speaker 3: So our production actually increased from 83,000 units in Q3 to 98,000 units in Q4, so that's also up 18%.
Speaker 3: And that's what's allowed us to increase our wholesale and meet our customers' demand in the period.
Speaker 3: the balance of our whole cell.
Speaker 3: remains reasonably consistent. So 50% of them are Range Rover, Range Rover, Sport, Evoque etc. Defender is another 25%, so 75-76% between those two brands.
Speaker 3: On a daily basis the analysis is the same.
Speaker 3: 50% Range Rover, 25%.
Speaker 3: And you know we're still selling 43,000 Jaguars. We are still making sure that those cars stay current. We've invested in technology on the F-PACE. We've invested in special editions to mark the 75th anniversary of Jaguars, a sports car manufacturer. So we still are investing in those brands as well.
Speaker 3: Blue year 321,000 whole steps.
Speaker 3: Next chart.
Speaker 3: So if you look at this on a regional basis.
Speaker 3: You'll see reasonably strong through each region in the quarter. The one exception I'll call out and explain is North America. That's not an issue of fundamental demand. That's just our allocation timing. So although it looks like a reduction there, when you look at retails in North America quarter on quarter, it's a little bit of a reduction in the
Speaker 3: It was 23.6 thousand in Q3, 22.3 thousand in Q4, so hardly changed and our customer order bank in North America is flat quarter on quarter. So that isn't a fundamental change in the demand signal from North America, just our timing of allocations.
Speaker 3: All of the regions strong, including China, progressed in Q4 as well.
Speaker 3: Oh yes, very similar picture. I won't go through that.
Speaker 3: on the right hand side that the proportion of our electrified vehicle is increasing. If you look at the bed on the P. Have section of column from 11 to 17%. That's the result of our, I'd say increasingly compelling. We have office.
Speaker 3: So we have increased both the range and the performance of several of the PHEVs in the range and that is starting to show through in the market along with the removal of some supply constraints that have impacted that. So we have had a significant increase in the share of our PHEV vehicles in our whole system.
Speaker 2: Next chart.
Speaker 3: Okay so in terms of a financial walk this takes PBT from the same quarter last year where it was 9 million to this quarter 368.
Speaker 3: The biggest variable is volume and mix. You can see there, it's probably worth mentioning, that mix is a higher effect than volume.
Speaker 3: And this comes back to some of the issues around quality of sales that we've been pushing during the past few months and will continue to push.
Speaker 3: So that mix is driven by Range Rover, Range Rover Sport, but it is also driven by trim mix within our ranges and making sure that we are continuing to allocate those chips and components that we have to the vehicles which are most favorable for.
Speaker 3: So volume and mix are very favourable.
Speaker 3: If you look at pricing and material cost together,
Speaker 3: This is the picture that I expected to happen and that I told you would happen when we sat down last quarter. So we've moved to a position where our output inflation in terms of our pricing is now higher than our input inflation.
Speaker 3: That wasn't the case last quarter. Last quarter pricing with 165 million favourable material costs was $300 million in adverse.
Speaker 3: So we have flipped that through the quarter and we would intend for that to continue.
Speaker 3: Going through to SG&A, through to the care point there for us, SG&A is increasing. That is partly marketing as we start to move to a scenario where we do want to trigger some more demand at the back end of this coming year.
Speaker 3: and also partly the investments in our transformation, particularly in terms of our digital transformation as a company.
Speaker 3: Operational FX did exactly what you would expect it to do on a quarter by quarter basis. billing has weakened that helps us from a transactional basis, but does give us a hit in terms of realized FX and unrealized capabilities on the project is marginal and multiple receivables.
Speaker 3: We can think of sterling versus the dollar gave us a favorable revaluation on our dollar denominated loans, which you would also expect. So fundamentally, the move in PBT quarter to quarter is volume to mix, volume to mix, and we've managed to offset input inflation and output inflation.
Speaker 2: Next chart.
Speaker 3: So this looks then at the move of that PBT through to cash.
Speaker 3: Key here is in the middle section of here cash profit after tax and investment.
Speaker 3: is favorable 400 million in the quarter. Working capital continues to move in our favor. That is partly natural as our business expands, our payables expand faster than our receivables, but also partly from some deliberate measures and initiatives that we've put in place using fairly advanced methods and done some continuous Goddt's.
Speaker 3: digital techniques for example to reduce our component inventory during the period. So those partly natural and partly from some deliberate efforts on our side generated the 815 million pounds worth of free cash flow that we reported.
Speaker 3: to reduce our component inventory during the period. So those partly natural and partly from some deliberate deliberate efforts on our side generated the 815 million pounds worth of free cash flow that we reported. OK, next chart.
Speaker 3: In terms of investment, the total investment for the year was just under $2.4 billion. That is an increase. The biggest part of that increase is in engineering which rose from $1.3 billion to $1.7 billion. That's a natural part of our product cycle.
Speaker 3: You know that we have a large series of launches coming between the end of next year and 2026 or those are at the high point of the engineering at the moment. So that's what's driving that expense up a bit. What you also see is that those programs go through their various pathways and start to move to production.
Speaker 3: they get more capitalized so our capitalization ratio is slowly increasing. It was 53% in the quarter versus 48% last quarter and for the full year it was 43% versus 35% last year.
Speaker 3: We would expect that capitalisation to continue to increase probably to around the 60% rate.
Speaker 3: We've also said, Balaji repeated this earlier on, that this investment number will increase. We're expecting it to be around £3 billion a year for the next five years as we continue to invest in both our electrified vehicles, the electrified powertrains themselves and the electrical systems that support them.
Speaker 3: OK, next chart.
Speaker 3: All right, now move on to a business update.
Speaker 3: Okay, we move forward.
Speaker 3: But this chart which shows our average revenue per unit is is really important and part of the demonstration of our journey towards modern luxury.
Speaker 3: So we've managed to increase our average revenue consistently over the last five years. In FY23 it moved up from £62,000 to £71,000 so up by 50%.
Speaker 3: Part of that is the increased production of Range Rover, Range Rover Sport, but even within the vehicle lines we have continued to increase our focus on the higher level trends.
Speaker 3: including for example SV.
Speaker 3: So the Range Rover SV, which was only launched October 21, already got 6,100 orders at an average transaction price of £180,000.
Speaker 3: We've even been testing the water north of that. We did a special edition Lansdowne edition of the Range Rover SV, which transacted at around 250,000 pounds. So there is room for us to operate in this space if we continue with diligence our modern luxury journey.
Speaker 3: testing the water north of that. We did a special edition Lansdowne edition of the Range Rover SV which transacted at around £250,000. So there is room for us to operate in this space if we continue with diligence. Our modern luxury journey. Next page.
Speaker 3: In terms of semiconductors, I think people have mentioned this a lot. My summary I think is probably three things. We are seeing fewer issues now.
Speaker 3: They've not completely disappeared, but we are seeing fewer of them.
Speaker 3: Our ability to see them in advance is improving due to our relationships with the chip manufacturers and with our suppliers and when we do spot them, the number of tools at our disposal to solve those problems is increasing.
Speaker 3: So they are proving less of a. I'm going to say nuisance. That's probably an understatement, but they were last year and they could still come back to bite us, which is considerably improving.
Speaker 3: Nice job.
Speaker 3: OK, key for us is to make sure that we are progressively and in a stable manner bringing our supply.
Speaker 3: up to continue to build our order bank down. Yes, and to meet our customers expectations for the arrival of their vehicles that they've ordered.
Speaker 3: We are showing good progress in terms of getting Range Rover and Range Rover Sport through our facility in Solihull went up to 2,600 units per week during Q4 and we expect that rise to continue progressively as we go through next year pushing north of 3,000 units per week during the year.
Speaker 4: Thanks, Charles.
Speaker 3: Thanks, Chuck. It's still an issue for us.
Speaker 3: We do have considerable headwinds. We've shown them here at £850 million for the year, of which about 40% of commodity prices and about a third were semiconductors. The rest is energy and labour costs, both with us and with our supply base.
Speaker 3: So we knew these were coming and we spent a large portion of last year doubling down on our refocus saving and can proudly say that we've offset that and more than often that in terms of our refocus savings during the year. A lot of that was very detailed work in terms of making sure that we allocated those chips that we had for the vehicles that we wanted to sell.
Speaker 4: So China.
Speaker 3: We're really proud of the results of our China JV. It has the best financial results for five years.
Speaker 3: If you look at the left hand side, segments of the market that we're operating in are relatively stable. If you look at the left hand side, segments of the market that we're operating in are
Speaker 3: And our share of those segments is also relatively stable.
Speaker 3: So we know that market is really fast moving, really dynamic. In sections that we're operating in, we are maintaining our share.
Speaker 3: If you look at the financials on the right hand side, it looks a little bit as if imports average revenue per unit isn't increasing as much as the global. That's a little bit of a misconception. There's some profits from our P&A operation, our after sales operation. If you look purely at vehicle average sales per unit for the imported volume, it is up 8% year over year.
Speaker 3: From a profitability standpoint, we were PBT positive in the quarter, 13% EBITDA, 2% EBIT.
Speaker 3: On a full year basis, we were also PVT positive. And EBIT and EBITDA were both 5% higher than FY22.
Speaker 3: So very good consistent progress within our China JV, best financial year for five years.
Speaker 3: Thanks, Charles. Right, fun pictures. We're continuing to develop our product range. If you look at the 24 model year fella on the right hand side, that is...
Speaker 3: That's as close to a flawless execution of our modernist design language as you're going to get. It's just beautiful.
Speaker 3: as close to a flawless execution of our modernist design language as you're going to get. It's just beautiful. We have made some tweaks to the exterior.
Speaker 3: We've made some technology upgrades. For example, the P have now has a 20% higher range than it did beforehand. It goes for 40 miles WLTP without charge and on the interior law there are also some upgrades so that vehicle is upgraded. And on the right is the Range Rover Sport SV.
Speaker 3: You will want one. They are going to be phenomenal and as I've mentioned beforehand, we're extremely proud of the success of our Range Rover SV and we've received 6100 orders for that. We haven't even announced or started taking orders for this one yet.
Next, Joel.
Next job. So looking ahead.
We are optimistic so we exited FY23 in a much stronger position than we started it. So we're on the right trajectory and we have had strong and consistent progress. So we think FY24 is going to be a good year for us. In reality the first half may be a little bit slower so I expect the second half of the year to be stronger than the first half.
But we do have the momentum that we're looking for and we will have a good year. All priorities.
is to continue to build our supply availability, our robustness, the accuracy with which we give our suppliers our forecasts.
We'll continue to focus on brand activation. There is a lead time with that. We have to start doing some of that now to activate orders towards the back end of the year.
We're going to execute our plans and from a financial perspective we're saying we're going to deliver 6% plus EBIT.
2 billion free cash flow after investment, which means our net debt will reduce from £3 billion at the end of the financial year just finished to circa £1 billion.
12 months from now.
That's it from my side. I'm sure we'll take some questions afterwards but thanks very much for the meantime.
I'm sure we'll take some questions afterwards, but thanks very much for the meantime. Thank you. Thanks Richard.
So quickly moving on to commercial vehicles. Next slide please.
The registration market shares after the correction to the approach to a demand pull strategy are now starting to recover. Q3, Q4 better than Q3. Barring 1, which is what used to be called intermediate light commercial vehicles, MGEs is where we still need to get some further impetus on that. That's very much part of the plan that the Grecian team are working towards.
but everything else is starting to sequentially start improving.
On the overall volumes, the callout here is a powertrain mix that you see with the CNG prices now coming under a policy and therefore expecting some stabilization in terms of delta between that and diesel. One would expect to see the CD numbers – sorry, CNG numbers starting to change as well.
On the overall volumes, the callout here is the powertrain mix that you see with the CNG prices now coming under policy and therefore expecting some stabilization in terms of delta between that and diesel. One would expect to see the CNG numbers starting to change as well. Next slide.
Overall revenues are happy that we ended the quarter with a double digit EBITDA, something that we said we want to get to as soon as possible. And the business ended pretty strong with a revenue of 21,000 crores and an EBITDA of 10.1%. And clearly with market share starting to inch up as well as profitability starting to improve, the business is on the right track. Further distance to go, but very much on track.
Overall revenues are happy that we ended the quarter with a double digit EBITDA, something that we said we want to get to as soon as possible. And the business ended pretty strong with a revenue of 21,000 crores and an EBITDA of 10.1%. And clearly with market share starting to inch up as well as profit starting to improve, the business is on the right track. Further distance to go, but very much on track. Next slide. Next slide.
The source of money that you see where the profitability came from, volume, mix, realizations, savings all coming through quite nicely and we intend to keep it this way as we go forward.
The other big one is the consumer facing metrics.
which is very, very important on a demand demand pool strategy to ensure that the brand is in a strong market. Very happy with the way things are starting to move. The brand is with the interventions coming through. The power of the brand power, the consideration, top box, top of mind awareness, all trending in the right direction. There are some very good numbers even at a geographical level as well.
And of course the customer satisfaction, the dealer satisfaction as well as the composite satisfaction score doing pretty well.
the satisfaction as well as the composite satisfaction score doing pretty well.
So let me give it to Girish to give an overall update on the business, Girish. Yeah, thanks Balaji. I think the industry continued its growth in volumes. And once all growth of 22% over the same quarter last year.
And in annual terms of growth of almost 34%. And during the year we launched more than 150 new products and 150 variants.
In addition to what we had unveiled in the Auto Expo.
As Balaji mentioned, we had the highest annual and quarterly revenue for FY23 and Q4 of FY23.
And I think as we started our discount production strategy from Q3. And as we continued ahead, we were able to grow and while one shared the restriction, we moved forward versus Q3.
with focus on continuously improving the product and service competitiveness as well as our communication to the customer.
I think the non-vehicle business which has been a significant area of focus grew by almost 33%.
and both spares and service penetration has been continuously improving for the last three years now.
With all this the habit improved sequentially and is now highest in 21 quarters.
with most of it coming from discount pullback, part of it from cost reduction and also commodity softening which happened in H2.
While the entire industry grew by 22%
and 34% over the last year I think the good part was
Significant growth in medium and heavy commercial vehicles, almost 52% over the last year.
And the passenger segment, especially the buses, which were
almost down and out during COVID have seen a very good growth finally in the year gone back.
I think as the biology showed some metrics are continuous focus to improve the brand health.
through judicious mix of ATL communication
digital communication
and also a lot of influencer advocacy has actually led to a good improvement in net promoter score and in fact net promoter score has reached the highest level level now 271.
And the brand power also grew by 170 bits. So I think both at a very good level. We have transitioned the entire portfolio.
to BS 6 phase 2 and in line with our philosophy, once again we have gone beyond mere compliance to the regulations. Thank you very much.
and across the range in each and every product, you further strengthen the superiority in terms of total cost of ownership, comfort and convenience, and you further strengthen the superiority in terms of total cost of ownership.
connectivity in terms of fleet edge as well as the safety features which have been added, especially in the trucks.
in terms of fleetage as well as the safety features which have been added especially in the trucks. On to CNG.
Interestingly, I think with the new guideline. Apart from reduction in the CNG prices. I think the biggest uncertainty which was in the minds of the customers.
was about the difference in CNG prices with respect to diesel. And for that matter, even petrol.
This uncertainty had led to drop in CNG volumes significantly.
So with this new pricing guideline, not only the CNG prices have dropped, but it is also getting pegged to diesel which will gradually start bringing in.
good certainty in the minds of the customers and we will see the CNG penetration increase.
Towards this, I think we have a very strong CNG portfolio.
both in the ILCD as well as the MCDs. And last year we launched our CNG vehicles and heavy trucks.
as also our intra portfolio. So I think we have CNG presence across the portfolio now.
Going ahead for this quarter as well as FY24, I think we will continue our focus on the retail now.
And registration share is what will drive us. And we will continue the realization improvement journey. As I said, I think the BS 6 phase 2 products have come up with a lot of measurements.
features and performance improvement and there will be a lot of efforts.
and performance improvement and there will be a lot of efforts to communicate this.
not just to the customers but also other stakeholders who play a very important role in decision making.
and therefore there will be a lot of influencer advocacy as well as actual in-field trials.
Getting into this year, I think we will now start scaling up EV supplies with the supply chain being resolved.
Same certification clarity being there and both on a CD as well as the electric buses which are meant for the CSL Tinder.
Downstream business will continue to grow being a focus area for us.
And in international markets, we will continue to play safe, we will maintain or grow market shares.
Ensure that the marginal channel health is protected.
And we will also see some of the new markets which we can enter during the year.
also see some of the new markets which we can enter during the year. Next slide.
Coming to the electric mobility.
Coming to the electric mobility, I think we have completed all our
E-Bus, electric bus deliveries meant to be done to Delhi Transport Corporation and Nagpur City.
In addition to that, we already started delivery of
the CSL first tender with the Delhi Transport Corporation buses.
And in addition to that also a few retail customers or orders that we have received.
We have delivered more than 300 AES electric vehicles and
fourth quarter and here on we can start ramping up significantly as I said earlier the clarity on supply chain as well as the same certification.
I think in Auto Expo we made a clear statement on our future roadmap in terms of
net zero greenhouse gas emissions and the decarbonization plan with a display of 14 product concepts.
On the smart city mobility, as I said, I think the concession agreements are then signed with Delhi Transport Corporation for 1500 buses.
The supply has already been initiated. Which will be followed by Bangalore for more than 900 buses and then one more Kashmir for 200 buses.
I think now.
Our e-bus fleet has crossed more than 7 crore or 70 million kilometers. And we have been able to maintain more than 95% of time in FY23. We have been delivering better than the contractual conditions.
The operational revenue has also been ahead of our own internal budget doing well at around 500 crores.
Coming to the digital businesses, so Fletage continues to do very well now with more than 390,000 connected trucks towards the end of FY23.
The monthly active usage is continuously increasing. And the customers are seeing a lot of value.
in terms of improvement in vehicle uptime, asset utilisation is also helping them for better tracking
improvement in vehicle of time, asset utilization is also helping them for better tracking and
Optimizing the usage and driving habits leading to improvement in the total cost of ownership. So I think the clear benefits which are being seen.
As a result of which, I think the penetration is continuously increasing. And in fact, I'm happy to share that it from 1st April we also introduced the subscription model for the fleet edge and we have seen a very good encouraging response to this model.
As I said, the engagement time has been improving consistently.
with the benefits being experienced by the fleet owners as well as the drivers. E-Vukan which is our online spare parts market place.
It grew better than what we had targeted. In fact, it grew 2.8 times.
Although on lower base, but doing pretty well and we also extended eBukan for.
diesel exhaust fluid as well as lubricants. So this will help us to grow these two business lines also.
I think digital lead generation has been a focus area for us. This has helped us not just to generate leads, but to generate leads.
but also communicate our brand message.
product competitiveness and other aspects.
This has led to improved brand health. And therefore, augurs very well for the future. So that's what we've been doing in the commercial retail business. Balaji, back to you for TV. Yep, thanks, Girish. Moving on to the TV number.
led to improved brand health and therefore augurs very well for the future. So that is what we have been doing in the commercial vehicle business. Balaji, back to you for PV. Yep, thanks Girish. Moving on to the PV numbers, PV-EVE. Next slide please. Hello, everyone.
Callout here is in PD as well. We are now going to report only Vahan registration market shares. We find that to be a far more reliable and closer to the customer metric. And the powertrain makes another column there where you're seeing penetration of EVs rising to 9%. And the.
CCNG sitting at 8% there. Next slide. Here again on the registration market share of EVs going to 84% network now increasing to 165 cities and 250 dealerships. Charging infra again increasing to 5,300 there.
Next slide. Overall financials. We ended the quarter 7.3% EBITDA with a PBTO of 200 crores on a full year basis of the business of 6.4% EBITDA or the PBTO of 700 crores. And therefore this business is now strongly profitable in terms of EBITDA.
We still got a distance to go to cover the 10%, but happy to see from where we have come to the 6.4. At the same time EBITDA positive, EBITDA positive, PVD positive and cash positive. One additional data point which you have pulled in this time is the ED financials. There has been a lot of pressure that you have been asking.
I also see a question saying that if I add EV plus PV doesn't add up to this one, there are some intercompany that need to be cancelled off as well because of consolidation.
On the revenues, this business is now making a better loss of about 350 odd cross out of the 350 or that's a 4.6% negative that you see there.
Out of the 350 crores, 300 crores is product development costs that are being charged off. And therefore the business is almost a bit neutral and this needs to be seen in the context of runaway increases in lithium prices. The reason I bring it out is that we believe the EV
from a sustainable profitability perspective on the right track. This does not include any PLI credits or anything that is being accrued. So this is underlying profitability I'm referring to. A billion dollar business or roughly a billion dollar business with broadly neutral limit. That is where we are on an underlying basis. Next slide.
These are obvious only thing. Why is the structural fixed cost going up there? Substantial increase in FME as you see the brands building up. There's also element of IPL phasing that will be there as we go ahead of that employee. Cost is basically investment that are happening in the EV business and DNA expenses again as a product investment pick up there so all these are good investment that are happening for the long term.
Next slide. Let me give it to Shailesh. Thank you, Balaji. So let me start with the key highlights of the industry first. So FY23 for the industry was the highest ever, since last highest ever, which was in FY19, which was $3.4 million. This year ended at $3.9 million.
which was nearly 27% growth versus FY22. SUVs continued to increase in terms of share, increased by 300 bits to 43%. And EV industry saw a phenomenal growth of 170% with several new launches and increasing acceptance of EV among customers.
As far as Tata Motors PV and EU business is concerned, this was our highest ever wholesale sale year which was nearly 5.4 lakh with a Bahan market share of 13.5.
This is nearly 45% growth as compared to FY22. Which was, you know, if you just compare with industry growth, which was 27%.
EV sales crossed a major milestone of 50,000. This includes about 2,200 volumes that we did in international business. Wahan market share was around 84% despite increasing competition. I already mentioned that in PV business we grew by 45%
What are the bright spots?
We clearly see that there are several new launches happening in the SUV space which will all go well for the growth in this financial year.
CNG demand with the prices coming down is also expected to pick up. And several new launches happening in the EV space and increasing acceptance of EVs. I think this will also offer well for the EV segment.
For Tata Motors, very happy to see that we transitioned to BSX phase 2 early February itself. And that has really helped us to ensure a very smooth transition.
Several new launches which are going to drive demand, Nexon EV Max in hashtag version has been receiving very good response. We recently launched it. This month we are also launching the twin cylinder technology in Altra which is Altra by CNG.
which retains the entire boot space in the CNG which is first of its kind very innovative concept. And of course this year we'll see some of our products going through the mid-cycle enhancement.
We are few players in certain segments, we are only one player in at least one segment where we are still in diesel segment. That should also help us improve our sales in the diesel side.
Talking about some of the challenges or headwinds, mainly the entry side of the PV industry which is hadges and sedans has been under pressure for some time. Channel inventory as compared to where we started the last financial year in FY22 is at a higher level. Two world's best
Pent-up demand really has gone down, but in certain new launches and few popular SUVs. And recently, price increase has been taken by OEMs to basically offset the cost increases which have happened because of the RDE transition. So this might have watched the impact of this.
From Tata Motor's side, the way we are preparing ourselves is to focus on demand generation through micro-market focus and actions to improve the conversion rates.
We are growing our portfolio both on CNG and EV. Both are expected to see good growth this year and therefore we should be the beneficiary of that.
And of course we are driving margin improvement through an institutionalized cost reduction initiative.
as well as what we have as internal moment feature 9 box framework.
So, both on margin as well as demand generation, we have clear action plans laid out. Thank you for those questions. Thank you, Shailesh. Next slide, please.
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Yeah, the call has dropped.
And the corner's locked.
Okay, I hope you can hear us. Apologies, we had a network outage here.
Got connected back again. People are happy to hear us. Let me keep moving and zooming. Just a minute to say.
Give us a minute again just confirming that you are able to hear us. Okay perfect. So, let us move on to the overall CV plus PV.
Investments we ended the year with about 6400 rows of investment spending and this is likely to increase to 8000 cores next year as we step up the whole electrification investments both in CV and PV. That's the main cost of this delta that is coming through next slide. On the cash flows overall the operating
The cash profit after tax and CapEx I see in the questions. One or some of the doubts lingering in terms of as how do we treat CapEx? Let me be clear for us. What we call out of three cash flows is operating cash and less CapEx, less working capital changes and any financial expenses are being so it's the entirety of it. Those three cash flows.
On a full year basis, working capital in Q4 normally reverses. Full year basis, no impact at all on working capital. What we are seeing is 2,400 crores. It's completely cash profit after tax, less capex, less finance expenses. Next slide.
Part of what is finance we did signal that this business the entire restructured portfolio we want to have a very very close watch on it and two things have happened this quarter. One is we have taken a hard look at the restructure book and taken adequate provisions to ensure that this book now completely is taken care of and the collect we started off the concerted collection efforts.
and that has ensured that the GNPA is now starting to sharply trend down. We did 2.6% in this quarter and the absolute numbers of GNPAs are also starting to come down sharply and we intend to maintain that. And the capital adequacy remains comfortable even at these levels. And the business is now pivoting squarely to quality.
on delivering double digit ROV in the medium term with a focus on improving NIMS, lowering the credit losses and very tight control on fixed costs. So business is being run for ROV as the case may be.
double digit ROV in the medium term with a focus on improving NIMS, lowering the credit losses, and very tight control on fixed costs. So this is being run for ROV as the case may be. Next slide.
Just from a credit rating perspective, we had S&P upgrade us by a notch and domestically ECROS also revised our outlook to positive and we will be engaging with them after the results. There's others as well. Next slide. We do invite you for the investor day, both in Tata Motors and in JLA. In India, it was on June 7th.
OK, Mumbai and in jail arts on June 12th. At gated. The new headquarters of jailer. Next slide. The overall outlook. How do we see it? I think on the demand side we remain optimistic despite some near term uncertainties that could be there, and inflation. We expect it to be moderate.
As far as FY24 is concerned, as I said earlier, it's an year of where we have to deliver. So we are squarely focused on putting our heads down and executing this plan and ensuring we make this make it count and from a year for the full year. Uh, as far as the momentum is concerned, it will build through the year. Keeping in mind there is a significant element of seasonality.
JLR is stabilizing its supply chain from where it has come. So we want to stabilize it. And of course there is a post RDA impact in India. That's the only reason we were calling this out as a momentum building through the years so we don't get carried away. At the same time, the plans of JLR continuing to, which Richard just talked about, C.V. ensure the demand pull strategy continues, W2G Debida to be delivered, and profitable growth in all the business verticals that Girish talked about.
And I think I covered when I the PV plus ice revenues why they are more than PV business. TEM is it collects wouldn't we don't want to comment on the smallest subsidiary that other they had design centers. They don't materially move the needle. They should be treated as part of the design cost that we income and PLI not considered government grants. So nothing is as far as the business. Nothing has been considered that out there and.
Let me give it on to Shailesh to talk about whether it's also coming through and one other question as well. Sure. So, you know, as far as let me talk first about the ICE segment. As far as tailwinds are concerned, I think what is really going to support growth are going to be the new launches, refreshes that will be launched by the various OEMs in this financial year. You all know, people get generalpled Hey, damn, I
We are still seeing the demand in terms of bookings of the industry are remaining strong. So that's a good news that demand has not dropped. Of course, you know, there are certain segments, especially the entry segment, which I mentioned, is under pressure and with interest rates, you know, now also impacting the vehicles and I'm seeing interest rates and all.
will have some impact on their segments. As far as EVs are concerned, there is hardly any headwind that I see. I only see the tailwinds. There are several launches which are going to happen in this space and that is going to expand the market. There is a growing acceptance of EVs among the consumers and that is continuing to help. We are seeing every quarter the industry is growing big in size.
In fact, if you really see the monthly rate of sales of EVs has grown to 8,500 to 9,000 per month.
for the industry which is very high just one year back it would have been 4000 or so. So I believe that EV industry will have all these statements apart from you know the various states which are also coming with very progressive policies.
I think the environment is very favorable. Thank you, Shailesh. Richard first question coming to you and then Adrian something coming your way as well. Can you give us a push pull factor for margins next year? This coming from couple you're currently at 6 1.5 guidance is 6% plus. 6% plus.
How does this work out? Some color would be helpful.
Yeah, of course. So we're expecting volumes next year to be circa 400,000, so a little bit higher than our Q4 run rate. On the positive side, we're also expecting supplier inflation to start to reduce. Some of it will become embedded in terms of their labour rates, some of it in terms of commodity prices and utility rates starting.
to show signs of coming off the peaks. On the other side, we at the moment we have foreign exchange rates that are slightly less favorable than we had during the course of Q4 and we will need to start investing in marketing to secure the order intake that we need towards the back end of the year.
Finally, I think the other negative is we do expect, I saw some questions on that later on, we do expect VME to increase, but we expect that to be a creep rather than a leap. So we are not going to get into mass discounting of cars, we're a modern cars, we're a modern luxury player, but we do expect VME to creep up.
I'd say FX, marketing and DME a little bit adverse, volume and supplier inflation a little bit favorable. Thanks, Richard. Adrian, there's a series of questions.
marketing and VME a little bit adverse volume and supplier inflation a little bit favorable. Thanks, Richard. Adrian, there's a series of questions coming from...
We have guided to a 6% EBIT margin and a 2 billion cash flow this year. Last year we started in a similar way, 5% EBIT and 1 billion SEF. What is giving you the confidence that this time around things will be different? One. Second, the Auto Bank also saw another question somewhere else.
Auto bank at 200 and if you net out sales and arrive at 8, the number seems to be much lower in terms of new orders coming in. Can you give some color there? Second point. Third, a very interesting question on what's behind the thinking of the JLR rebranding. Is it just corporate action or there is something happening on the ground?
which will we just figure this stuff. Yeah, thanks Balaji. I'll take them in the order that they've been asked.
Look, for the last 12 months we've been optimistic about breaking through on supply. And the truth is, for the first six months of that we were too optimistic. Break even has been in place. It's been in place for more than 12 months with 300,000 units. Simply put, we had to build more than 25,000 cars per month, of course.
And we really didn't get to that point to Q3 and you can see as soon as we have got to that point, which was a mixture of overall supply with semiconductors and the MLA products, don't forget, they're super crucial to our business model. You know, they started to come through in proportions we need from about November last year. So it's those two things which really moved us from a loss making to a...
What an aggressive and significant profit-making business. Break-even is still the same. We know the supply is higher with new semiconductor supply we secured from January . And we know our MLA production units, as Richard showed in the presentation, have grown to that 2,600 plus a week.
So the two critical things we're waiting for happened in quarter three, continued at pace in quarter four, and we believe will continue now into FY24. We can see it in the data we've seen in the first six weeks. So not only have we broken through, but we can see the continuation of that into the first half of this year and beyond.
From an order bank perspective, the 200,000 units, look it's still too high. I think that's the first point we have to make here, right? We don't have an expectation and aspiration for 200,000 units of orders. It's two reasons. It's a symptom of supply being too low and production being too low. And it's a symptom of the appeal for our vehicles that people are being prepared to wait for as long as they actually have.
But the reality is a healthier order bank is a lower order bank than 200,000 units. So my anticipation is it will continue to fall by about the 5,000 units per month over the first half of this year. And to Richard's point, if that continues to happen and our supply increases, as at that time we expected to do so, then we will be stimulating further changes. But if you look at any of our websites, we've
particularly on the most sought after vehicle, the Range Rover, a lot of those order times are now 12 to 18 months. You know, we're not stimulating orders beyond 12 to 18 months at this point. To the proportional share point, which is in the question, 200,000 orders at the end of March, 76% of them were Range Rover, Range Rover Sport and Defender. So it's still very skewed towards our three most modern, most luxurious nameplates today.
And in terms of the brand question, the point there number three, now I'll reiterate what I actually said and was quoted within the media. Land Rover is the trust mark for three brands. And when you think about it, the characteristics of those individual brands, Range Rover, Defender and Discovery are different.
and if we're truly going to, they're underpinned by the trust mark so the off-road capability, you know the versatility of the vehicle, the safety within the vehicle, the technologies are in all of the brands.
But if we're really going to grow our business in model luxury, we absolutely have to focus on the distinct Characterizations within those brands. Look, we know Range Rover is about luxury, quietness, serenity We know Defenders about utility go anywhere We know Discovery is about a family size and the utility of being able to
been able to in the broadest sense use this as a family traveler vehicle. We understand those things we have for a long time but we have to deepen the understanding the characteristics of vehicles because clients will be attracted to individually those brands not just a Land Rover going forward. That's already clear in most of our biggest markets China, USA, Middle East.
So that's why we've actually elevated those sub brands above the trust mark called Land Rover. And that's what we're going to keep working through and working on going forward. Thank you Balaji. Thank you, thanks Adrian. This is coming from JAMA, JP Morgan.
I think this question is picked up by someone else as well saying that can we give color on the free cash flow guidance in the net debt reduction for next year? How much of it is due to working capital and how much of it is due to underlying cash flows? One kind of a question. Second kind of question. Within that you are increasing my equity of 1.5 million.
but still guiding for a debt going down to 1 billion. Richard, can you reconcile the two for us? Yeah, sure. So we are going to increase our investment from 2.35 billion this year to 3 billion next year, and even considering that increase of 650,000 million pounds of investment, we are anticipating and expect.
to generate beyond that £2 billion worth of cash to take our net debt position down from £3 billion to £1 billion. In terms of the proportion of that cash generation that is operational and working capital, I'd say certainly for the first half of the year, the majority of it will be operational, working capital a little bit more in the second half of the year. But you only need to look at our cash flow generation and the law.
6 months. Yeah, 1.3 billion pounds after about 1.3 billion pounds worth of investment in the last six months. So we are a strong cash generating business when we're functioning at the type of levels that we're talking about. Adrian is mentioned several times. Our break even volume is around 300,000 units. I've mentioned that next year we should be operating at 400,000 units. That's where we get our focus and cash returns from.
Thank you. Thanks Richard. One question is Ben is there. Do you intend to come to the bond market and will you do some senior secure debt? The second the latter part I can answer clear answer no. First part Ben over to you.
At some point we will come back to the bond market. We've been a regular issuer, but I think we'll just keep monitoring the market for the right time. Part of it is our financial performance is improving as we've talked about here today.
some benefit to continuing to wait as we expect that to continue. But on the other hand, there are plenty of uncertainties. In terms of needing to go to the market, I don't think there is any need. As has been explained, we expect significant positive cash flow in the year, and that is after significant investment spending. So we don't need to fund investment spending. I think it would be more a matter of managing our liabilities. Thank you. Thanks, Ben. Question to Richard and then another one to share. The same thing in Australia is from Rakesh. We are a BNP partner.
Janus investment of 15 billion. Can you give us a rough idea of how much of this is going into R&D EV product development? How is going into ice? Um, yes, so look this year. Total engineering went up by.
£400 million to £1.69 billion. I would expect that to continue to increase a little bit next year. However, the majority of the increase over the next couple of years is going to be in capital as we industrialise all of our 2024, five and six car lines into Solly Hall, which is where we'll be.
producing Jaguar and we're also producing the Range Rover Bed and into Hailwood which is where we'll be producing EMA. So in the short term it will be partly an increase in engineering. In the next 18 months, two years, capital will be the primary part of the increase.
OK, go. No, I was just going to say like in in terms of EV and ice that we are going to have to continue to invest in ice to meet the euro 7 regulations that came through. However, obviously the vast balance of our efforts is in the EV space.
as the majority of the launches that we have post now are EVs. Thank you. Question to Shailesh.
In terms of the domestic PV market competition is obviously picking up, especially with clear head-on competition, Nexon and Punch. Any ideas of how you are preparing to defend your volume and market share? Yes, so we have seen in the past also and last year also we have seen that in SUV segments, whenever there is a new model which gets launched, typically the segment expands.
This expands because it is channelizing flow from adjacent segments into the ACB segments. This has been at the cost of hatches going down or VLANs going down.
So I think that phenomena is going to continue despite. And next one segment, you have already seen that this segment has seen every year addition of new models and only the segment has expanded. And we as a company have been.
are seeing increasing volumes of next month. Similar thing in punch, so this is one that there will be channel, channelized, volumes will get channelized from other adjustment
So the segment is going to expand. From our perspective, we will keep the excitement in these two products high through several interventions. New forever interventions we keep on bringing. Recently, we got the hashtag, punch, we came with chemo. But also, at the same time, let's take, for example, punch. We are going to.
bring CNG variant here with the twin-seminal technology. And this is going to be unique in the market. We are also planning to bring EDs. So we are very confident that in these two products we'll be able to sustain the volumes. Further actions, how we will further grow from where we are, and both in terms of volume and market share, we are going to add new nameplates. And we have showcased that in the next slide.
So it's called curve Sierra. These are new increase which are going to get lots. There's going to be a steep increase in the EV volumes. We are expanding our portfolio in the CNG segment. So I think we have several leavers which are going to increase our volumes as well as market. Thanks, Felice.
Next is from will just I think the JLF site of the questions have all been answered. So let me move to the PD side. I think that's also coming to the cashier later on as well. India PD volumes are 540 K and at this level capacity utilization extremely high.
65% SUV shares. From here on, what is therefore the margin improvement drivers? Why is the margin still not as strong as others who are there in the market and your plans for the same?
So, you know, one thing I would like to say that last year if you see the EBIT has increased by 300 bps, so it is an improving trend and significantly improving trend. The whole benefit of operating WebRIS has been fully realized.
The margins at a contribution level has been increasing. Of course, alongside we are also seeing a steep growth of EV business. There are the margins, I think Balaji very well explained that it is underlying margins are strong but there is a huge development expense which also gets charged up so it will have an impact.
But there are plans in terms of how we are going to strengthen the margins for EVs.
And also as the battery prices had gone up significantly by 35%, the sale prices had gone up. There was huge semiconductor open market purchase which was being done. All these are factors which we reclaimed back. Battery prices are going down, semiconductor open market buys have come down. So these are all positive things which are going to favorably influence the contribution for EVs. Also there is a...
Deep localization that we are doing, this is going to further bring down the cost. There are a lot of actions on the EV side, which is going to improve the margin, including the new models which we are going to launch, is going to be in the SUV, higher SUV segments, which will be better in margin. I'm not talking even about PLI and all because. But.
And we have a clear pathway to bring this to, say, at a contribution level into a global digital market, closer to where we are in PV. And on top of that, of course, we are going to have the PLI benefit and all. On the PV side, I think, again, a richer mix is what we are expecting in the coming years, which is going to strongly support this institutionalized cost reduction plan with a very aggressive plan that we are taking a benchmark and bearing down..
given that the demanding base is there. How do you want to do it? Do you want to start a CD?
Okay, so I think while the industry has grown pretty well in FY23 over the previous year.
I think we have to keep in mind that the industry volumes are still below the previous peak of Fi90. That's point number 1. Point number 2 is...
I think generally in the pre-election year, that is the general election year before general elections, market has always grown. specially because of...
the government spending and I think this year in the budget we are looking at almost record spending on infrastructure by the government. I think these are good tailwinds for the industry.
And I think this year in the budget we are looking at almost record spending on infrastructure where the government. I think these are good tailwinds for the industry and. As a result.
I think the industry should grow further during this year, although it may be in single digits. The growth may vary across the year as well as across various segments. One would see highest growth happening probably in buses because the buses still are at a higher level, followed by good growth in medium and heavy commercial.
It appears that the aisle CVs may remain flat compared with the last year. And the small commercial vehicles may grow a bit. In terms of timing, it appears that the first quarter may de-grow a bit.
Why why? Because of some pre buy effect has also the transition into the PS 6 phase 2 and the price increase which has happened. But after that one would see growth in Q2, Q3 as well as Q4. So I think that's how we see.
will grow overall. It appears that we will see a single digit growth at the industry volume level. Thanks, so on the PV side I would say that we are very clear that the singular trend of growth of the industry is going to remain in fact because of the underlying drivers that global iterations.lambles and.
Also given that now the market is having a lot of upgrade customers. So people are wanting to upgrade their vehicles and that is the phenomena that we have been seeing when it comes to SUV growth. And therefore going forward, you know while there was a very steep growth of 27% in the last financial year also thanks to the pent up demand and low inventory levels that we had.
at the start of FY22, sorry FY23. I think that helped in driving this kind of growth which was 27 percent. Otherwise, which would have been much lower I would say. So therefore, this year would be growth would be slightly moderate.
in the zone of 5 to 70 percent.
in the zone of 5 to 7 percent but I'm sure that
Beyond this financial year, the growth will come back to double digit number is what I would. Thank you finish a question from couple of eating margins is already covered. I think there's a question on PLI that is there in in various places. Where do we stand on payless? Shelly's you want to pick that up? Yes, so you know as far as the Sean.
There have been a lot of engagement with the Ministry of Industries on this topic and the discussions have recorded around the domestic value issue.
And the MHI has been very receptive of the inputs from our side.
There have been several inputs that have been given and of course the requirement of
A requirement from the MHRAE to establish the extent of delay that any OEM has attained was a bit stringent which has been brought to a level which is now practical and we are going to be working on that and hopefully the first model is what we are going to submit.
with the DVA status very soon. From there on, we finally secured the CLI eligibility for all our models.
Most of the models that we are selling today, as per our estimates, cross the DB requirement. Going forward, we are very confident of avoiding the PAWIP. April volumes much weaker.
Then industry for Tata Motors. What's happening and when they expect growth to return and tracking conditions. How was the trending?
What's happening and when to expect growth to return and trucking conditions. How is it trending and how are dealer inventories?
Right, so Kapil, first of all on the volumes, I think. First point is because it is aligned to the retail. I think the retail volumes in April have dropped. After the pre-buy effect in the month of March.
So as you said that we will align our. Production and optic to details. I think that is the first thing. Second, of course, as I mentioned earlier.
When we have transitioned to BS 6 phase 2, I think there is a significant change which has been done in the entire product portfolio. Every product in the portfolio, one has seen significant improvement in terms of power to weight ratio, total cost of ownership, comfort and convenience, safety.
And as a result there were some supply chain issues also in April month of April . Which will get addressed from this month of May. Finally,
As I already answered, I think Q1 we see that there would be a de-growth in retail registration volumes because of the pre-buy effect, but the growth will come back from Q2. As far as trucking sentiment index is concerned, we have seen that the
For the tippers it has gone up which was expected. I think for other segment which is trucks.
I'll see these small commercial vehicles they have dipped marginally. And that was also expected after a strong Q4. But as I said, I think the equation between headwinds and tailwinds, I think the tailwinds should prevail after some time and therefore one would still see growth happening from Q2. In terms of dealer inventories, I'm very happy that the inventories continue to be inspectors.
Are ED buses GCC model are ED buses viable without same subsidy? Those basic questions and will you participate in future MSRTC orders given that you are not participated in the recent CSL tender.
Okay, so let me take the first one. See as far as the electric buses bulk of those are being consumed today by.
Okay, so let me take the first one. See, as far as the electric buses, bulk of those are being consumed today by the government.
And most of those are now also being consumed in the own operate maintain model, which is an OPEX model and not a CAPEX model.
And most of those are now also being consumed. In the own operate maintain model, which is an OpEx model and not a CapEx model, right? So even if the same subsidies are not there.
Finally, it will lead to some increase in the OPEX that is the charge per kilometer and that will be part of the bids that all the OEMs will give and will then get translated into the ticketing or the ticket rates which will be there. So I do not think this should have an impact, especially on the gross cost contract model. As far as the private customers, retail models are concerned, the retail customers are concerned, there is an increasing interest because
Many of the corporates would also like to start moving towards their net zero goal for greenhouse gas emissions and therefore they would like to move towards electric buses for their employee transportation. This should also continue.
And lastly I think the 5000 MSRTC order or any other order, I think let me once again clarify.
We did stay away from the second tender of CSL because we had requested for a payment security mechanism to the government and the government agencies. Which didn't get implemented in the tender 2 and therefore we stayed away. The third tender was also released by CSL.
In which there was only one player who bid. Other all other players did bid because this payment security mechanism wasn't there. And therefore that tender will be rebate and we will continue to engage with the government to craft the payment security mechanism which will make the whole model bankable. Once that is done.
I think we will be very much into this game. College thank you. Thank you. Genesh you asked a series of questions. A lot of details. My suggestion we will take it offline with you so these numbers they can supply to you offline so can you pardon me for this is going to take a long time to go through all your questions there. Um? Going on to Joseph IFL. This is the order flow conversation, which I think is already being called.
the double digit vector includes these.
But that's what volume is going to come, so I'm not concerned about that. Coming on to Ashish, I think there's one battery which is new area. Let's talk about that. There are comments in the media on battery plants in India and you can you do some color on this? All we can say at this point in the underway.
don't give. I think everything we have to say we already said so further guidance is we don't intend to give. Nisha talking about India FCF generation fair point we talked about Jela. India will also be positive in free cash flows and it will be integral to one more contributor to the net introduction that we have in life.
despite the 8000 growth spend that we have on the capex. Second, this is Adrian coming your way from Stephanie under the House of Brands Jaguar intends to launch a premium GT with the pricing of given the reason, recent price cuts that have come from competition. Are you concerned about it?
There's work to do for sure, but we have really clear the positioning of this brand going forward. We've announced that the pricing of this will be more than 100,000 units. Position has a very low break-even point, so work to do, not concerned at this point now.
Thank you. The second one related the different question is the jail are intended to restate the reinstate the dividend if cash flow exceeds expectations and FY 24. The dividend policy has been approved by the board for jailer and the board at an appropriate time will take a look at it and it will be asked for the dividend policy. Next question.
From Chirag
Q1 is the base volume and will it keep rising? Will it lead to some adverse mix? And commodity benefits, are they likely to flow in?
And Jana let me let me Richard. You want to take that then I'll come to see me here. Yeah, sure, so um, the 94,000 that we sold in Q4. I think I said we expect the first half of the year to be sort of around that type of level. Will it lead to some adverse mix? No, it won't we.
inflationary pressures at the suppliers.
will start to come down, commodity rates being part of that utilities as well. Whereas some of the inflationary impacts on our suppliers, particularly in terms of their labour costs are going to be embedded and will probably continue to grow. So there are some upsides and downsides in terms of our supply costs but we expect the rates that I showed you in terms of outbound inflation exceeding inbound.
pullback biology has already shown in this presentation. There was a clear reconciliation in the slide.
Now coming to this discount pullback, I mean, I would rather like to say that it is about.
customer value perception. So what we have been focusing on two, three things. One is continuously increasing the customer value.
Second is taking a lot of efforts on communicating that value and ensuring that the customer experiences that value so it would be a mix of communication whether it is ETL, influencer advocacy or in market trials.
A lot of work has been done and we have been consistently increasing that customer value basis which we are able to increase the market operating prices. So it is I would say a function of customer pursued value and that too. How does the customer compare it with? The competitive offers that he or she has.
So I think our focus has been to continuously improve that. And I can say that when we transition to this 6 phase 2, we've been able to do a step change because that opportunity was available during product development.
Thank you. Thank you. There's a question on PD outlook seems to have changed significantly. I think it is already covered. We see the industry scenario going forward. So we stick to that. Clarification on whether will Terra Motors incur battery capex? No. That will be done by Tata funds company. The company has already been set up under the name of Agrita.
so that has already been created. So it will come through that company. So I think with this we have come to the end of the session. I really like to thank you for taking the time and the probing questions that you've been asking us. Feel free to reach out to our team in case you need further clarifications and specific details that you require. Thank you and look forward to speaking to the next quarter.
Bye-bye.
way.
Thank you guys.