Q1 2027 Escorts Kubota Ltd Earnings Call

August 3, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings conference call of Escorts Kubota Limited, hosted by Motilal Oswal Financial Services Limited.

Operator: Ladies and gentlemen, good day, and welcome to the Q1 FY27 Earnings Conference Call of Escorts Kubota Limited, hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aniket Matre from Motilal Oswal Financial Services Limited.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Aniket Mhatre from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir.

Operator 1: Thank you, over to you, sir.

Operator: Thank you, over to you, sir.

Speaker #2: Thank you, Palak. Good evening, everyone. On behalf of Motilal Oswal Financial Services Limited, I welcome you all to the Escorts Q1 FY27 earnings conference call.

Aniket Matre: Thank you, Palak. Good evening, everyone. On behalf of Motilal Oswal Financial Services Limited, I welcome you all for the Escorts Kubota Q1 FY27 Earnings Conference Call. I take this opportunity to welcome the management team from Escorts Kubota Limited. Today, we have with us Mr. Bharat Madan, Whole-time Director and Chief Financial Officer, Mr. Neeraj Mehra, Chief Officer, Tractor Business Division, Farmtrac and Powertrac brands, Mr. Sanjeev Bajaj, Chief Officer, Construction Equipment Business Division, Mr. Rajan Chugh, Chief Officer, Tractor Kubota brand and Agri Solutions Business Division, Mr. Sanjeev Garg, Head Finance and CPMO, and Mr. Prateek Singhal, Investor Relations and ESG. Before we start, I would like to add that some of the statements made by the company in today's call will be forward-looking in nature and are subject to risks as outlined in the annual report and investor releases of the company.

Speaker #2: I take this opportunity to welcome the management team from Escorts Q2 Limited. Today, we have with us Mr. Bharat Madan, Whole-Time Director and Chief Financial Officer.

Speaker #2: Mr. Neeraj Mehra, Chief Officer, Structure Business Division, Farmtrac and Powertrac brands. Mr. Sanjeev Bajaj, Chief Officer, Construction Equipment Business Division. Mr. Rajan Chook, Chief Officer, Structure Q2 brand and Agri Solutions Business Division.

Speaker #2: Mr. Sanjeev Garg, Head of Finance and CPMO, and Mr. Pratik Singel, Investor Relations and ESG. Before we start, I would like to add that some of the statements made by the company in today's call will be forward-looking in nature and are subject to risks as outlined in the annual report and investor releases of the company.

Speaker #2: Now I hand it over to the management for the opening remarks. Thank you.

Aniket Matre: I hand it over to the management for the opening remarks. Thank you.

Speaker #4: Thank you, Aniket. Good evening, everyone, and thank you all for joining us today. During the quarter, India's macroeconomic environment remained largely supportive. Favorable Rabi harvest, increased grain procurement by the government, and positive farmer sentiment continued to support demand fundamentals across the sector and industry.

Prateek Singhal: Thank you, Aniket. Good evening, everyone, and thank you all for joining us today. During the quarter, India's macroeconomic environment remained largely supportive. Favorable rabi harvest, increased grain procurement by the government, and positive farmer sentiment continued to support demand fundamental across the tractor industry. Urban demand also remained resilient, contributing to a stable consumption environment. At the same time, geopolitical uncertainties in West Asia continued to disrupt supply chains and freight markets. Shipping disruption and the depreciation of the Indian rupee against the US dollar increased commodity, logistics, and imported component costs. Despite these headwinds, we remain focused on supply chain continuity, disciplined cost management, and profitable growth. With that context, let me turn to our performance for the quarter ended June 2025. Starting with the standalone financial performance. Operating revenue from the continuing operation at INR 3,178.9 crore, up by 28% year on year.

Speaker #4: Armored demand also remained resilient, contributing to a stable consumption environment. At the same time, geopolitical uncertainties in West Asia continued to disrupt the supply chain and freight market.

Speaker #4: Shipping disruption and the depreciation of the Indian rupee against the US dollar increased commodity, logistics, and imported component costs. Despite these headwinds, we remain focused on supply chain continuity, disciplined cost management, and profitable growth.

Speaker #4: With that context, let me turn to our performance for the quarter ended June 2025. Starting with the standalone financial performance, operating revenue from the continuing operation was ₹3,178.9 crore, up by 28% year on year.

Speaker #4: EBITDA at ₹355.4 crore, up by 9.4% year-over-year. EBITDA margin in Q1 at 11.2%, as compared to 13.1% in the corresponding quarter last year. Margin during the quarter was adversely impacted by commodity cost inflation, driven by geopolitical tension and related supply chain disruption.

Prateek Singhal: EBITDA at INR 355.4 crore, up by 9.4% YOY. EBITDA margin in Q1 at 11.2% as compared to 13.1% in the corresponding quarter. Margin during the quarter was adversely impacted by commodity cost inflation driven by geopolitical tension and related supply chain disruptions. PBT from continuing operation before exceptional item at INR 493.8 crore, up by 18.2% YOY, highest ever in Q1. Net profit from continuing operations stood at INR 387.3 crore, up by 4% YOY. Please note that Q1 of the previous fiscal include exceptional gain from the sale of land and building accounting of INR 76 crore. Excluding this, net profit grew by 26% YOY. EPS from continuing operation at INR 35.2 as compared to INR 33.87 YOY. Also note that Q1 FY26 reported PAT includes the RED business divestment impact. Therefore, the reported PAT for Q1 FY27 is not directly comparable on the year-on-year basis.

Prateek Singhal: EBITDA at INR 355.4 crore, up by 9.4% YoY. EBITDA margin in Q1 at 11.2% as compared to 13.1% in the corresponding quarter. Margin during the quarter was adversely impacted by commodity cost inflation driven by geopolitical tension and related supply chain disruptions. PBT from continuing operation before exceptional item at INR 493.8 crore, up by 18.2% YoY, highest ever in Q1. Net profit from continuing operations stood at INR 387.3 crore, up by 4% YoY. Please note that Q1 of the previous fiscal include exceptional gain from the sale of land and building accounting of INR 76 crore. Excluding this, net profit grew by 26% YoY. EPS from continuing operation at INR 35.2 as compared to INR 33.87 YoY. Also note that Q1 FY26 reported PAT includes the RED business divestment impact. Therefore, the reported PAT for Q1 FY27 is not directly comparable on the year-on-year basis.

Speaker #4: PBT from continuing operations before exceptional items was at ₹493.8 crore, up by 18.2% year-on-year, highest ever in Q1. Net profit from continuing operations stood at ₹387.3 crore, up by 4% year-on-year.

Speaker #4: Please note that Q1 of the previous fiscal includes an exceptional gain from the sale of land and building of ₹76 crore. Excluding this, net profit grew by 26% year-over-year.

Speaker #4: EPS from continuing operations stands at ₹35.2, as compared to ₹33.87 year-on-year. Also note that Q1 FY26 reported PAT includes the R&D business divestment impact.

Speaker #4: Therefore, the reported PAT for Q1 FY27 is not directly comparable on a year-on-year basis. The company's financial performance for the quarter ended June 26 is as follows.

Prateek Singhal: On consolidated basis, company financial performance for the quarter ended June 2026 as follows. Revenue from continuing operation at INR 3,207.6 crore, up by 28.3% year on year. EBITDA at INR 354.5 crore, up by 10.3% YOY. Reported net profit from continuing operations at INR 385.9 crore, up by 4.5% year on year. Moving on to the segmental business performance. Following the strong industry performance in FY26, the domestic tractor industry will maintain its growth momentum in Q1 FY27, achieving a record high first quarter volume of approximately 3.39 lakh tractors. Demand was supported by healthy farmer cash flow, favorable crop economics, adequate reservoir levels, and continued government support towards agriculture and rural development. These factors, coupled with positive rural sentiment, helped sustain robust demand across key agriculture markets.

Prateek Singhal: On consolidated basis, company financial performance for the quarter ended June 2026 as follows. Revenue from continuing operation at INR 3,207.6 crore, up by 28.3% year-on-year. EBITDA at INR 354.5 crore, up by 10.3% YoY. Reported net profit from continuing operations at INR 385.9 crore, up by 4.5% year-on-year. Moving on to the segmental business performance. Following the strong industry performance in FY26, the domestic tractor industry will maintain its growth momentum in Q1 FY27, achieving a record high first quarter volume of approximately 3.39 lakh tractors. Demand was supported by healthy farmer cash flow, favorable crop economics, adequate reservoir levels, and continued government support towards agriculture and rural development. These factors, coupled with positive rural sentiment, helped sustain robust demand across key agriculture markets.

Speaker #4: Revenue from continuing operations stood at ₹3,207.6 crore, up by 28.3% year-on-year. EBITDA was ₹354.5 crore, up by 10.3% year-on-year. Reported net profit from continuing operations was ₹385.9 crore, up by 4.5% year-on-year.

Speaker #4: Moving on to the segmental business performance, following the strong industry performance in FY26, the domestic sector industries maintained their growth momentum in Q1 FY27, achieving a record high first quarter volume of approximately 3.39 lakh tractors.

Speaker #4: Demand was supported by healthy farmer cash flow, favorable crop economics, adequate reservoir levels, and continued government support towards agriculture and rural development. These sectors, coupled with positive rural sentiments, sustained robust demand across key agriculture markets.

Speaker #4: Our domestic tractor sales stood at 35,457 tractors, the highest ever Q1 volume for the company, registering a growth of 22.9% year-on-year, as compared to industry growth of 18.6% year-on-year.

Prateek Singhal: Our domestic tractor sales stood at 35,457 tractors, highest ever in Q1 volume for the company, registering a growth of 22.9% year on year and as compared to industry growth of 18.6% YOY. This translates into 36 basis point gain in share of market during the quarter. The improvement was driven by combined impact of our ongoing initiative across product portfolio enhancement, channel effectiveness, and retail execution. In addition, regional demand dynamics were relatively favorable with our key markets, north and central, grew by around 22% as compared to 15.4% growth in the other markets. We remain focused on further strengthening our market position through disciplined execution, deeper customer engagement, and continuing enhancement of our go-to market capabilities. From a product standpoint, our product refresh initiative continue to see encouraging customer response.

Prateek Singhal: Our domestic tractor sales stood at 35,457 tractors, highest ever in Q1 volume for the company, registering a growth of 22.9% year-on-year and as compared to industry growth of 18.6% YoY. This translates into 36 basis point gain in share of market during the quarter. The improvement was driven by combined impact of our ongoing initiative across product portfolio enhancement, channel effectiveness, and retail execution. In addition, regional demand dynamics were relatively favorable with our key markets, north and central, grew by around 22% as compared to 15.4% growth in the other markets. We remain focused on further strengthening our market position through disciplined execution, deeper customer engagement, and continuing enhancement of our go-to market capabilities. From a product standpoint, our product refresh initiative continue to see encouraging customer response.

Speaker #4: This translates into a 36 basis point gain in share of market during the quarter. The improvement was driven by the combined impact of our ongoing initiatives across product portfolio enhancement, channel effectiveness, and related retail execution.

Speaker #4: In addition, regional demand dynamics were relatively favorable, with our key markets—North and Center—growing by around 22%, as compared to 15.4% growth in the other markets.

Speaker #4: We remain focused on further strengthening our market position through disciplined execution, deeper customer engagement, and continued enhancement of our go-to-market capabilities. From a product standpoint, our product refresh initiative continued to see encouraging customer response.

Speaker #4: The Shorya series under Powertech launched for the southern market in late Q4 FY26 is gaining traction and supporting market share gains across key southern geographies.

Prateek Singhal: The Shaurya series, under Powertrac, launched for the southern market in late Q4 FY26, is gaining traction and supporting market share gain across key southern geographies. During the quarter, we further strengthened our portfolio with expansion of the Digitrac range under the Powertrac brand and the NeoStar series under the Kubota brand, enhancing our presence across customer segments and application. Going forward, we have multiple product launches planned over the coming months to further strengthen our competitiveness across core, premium, and application specific markets. On the export front, the tractor industry exported 29,778 tractors in Q1 FY27, up by 17.7%, as against 25,307 tractor in Q1 of the corresponding quarter. Industry export was largely concentrated in the greater than 40 HP segment, which grew around 30% in the market where our presence remains limited.

Speaker #4: During the quarter, we further strengthened our portfolio with the expansion of the DigiTrack range under the Powertech brand, and the NeoStar series under the Q2 brand.

Speaker #4: Enhancing our presence across customer segments and applications. Going forward, we have multiple product launches planned over the coming months to further strengthen our competitiveness across core, premium, and application-specific markets.

Speaker #4: On the export front, the tractor industry exported 29,778 tractors in Q1 FY27, up by 17.7% as against 25,307 tractors in Q1 of the corresponding quarter.

Speaker #4: Industry export was largely concentrated in the greater than 40 HP segment, which grew around 30% in the market, where our presence remains relatively limited.

Speaker #4: Whereas our key export segment of less than 40 HP, basically a compact tractor, witnessed a decline of about 8%, and vessel availability challenges due to the geopolitical situation impacted shipment during the quarter.

Prateek Singhal: Our key export segment of less than 40 HP, basically a compact tractor, witnessed a decline of about 8% and vessel availability challenges due to geopolitical situation impacted shipment during the quarter. As a result, our export volume stood at 1,405 tractor as compared to 1,733 tractor in Q1 FY26. Sales to Kubota global network account for approximately 61% of our export volume. We continue to work closely with Kubota to strengthen our export portfolio and expand our presence across target international markets. Looking ahead, the underlying demand environment for the tractor industry remains supportive. However, monsoon distribution and prospective seasonal demand, especially against the high base of the last year, will be the key monitorable in the coming months. We also continue to closely track geopolitical development and commodity cost trend while remaining cautiously optimistic on the industry outlook.

Speaker #4: As a result, our export volume stood at 1,405 tractors, as compared to 1,733 tractors in Q1 FY26. Sales to the Q2 global network account for approximately 61% of our export volume.

Speaker #4: We continue to work closely with Q2 to strengthen our export portfolio and expand our presence across target international markets. Looking ahead, the underlying demand environment for the tractor industry remains supportive.

Speaker #4: However, monsoon distribution and festive seasonal demand, especially against the high base of last year, will be the key monitorables in the coming months.

Speaker #4: We also continue to closely track geopolitical developments and commodity cost trends while remaining cautiously optimistic on the industry outlook. Non-tractor revenue, comprising agri-solution business, engine business, and spare and service parts business, in Q1 constituted 19% of the agri-machinery segment revenue.

Prateek Singhal: Non-tractor revenue comprising Agri solution business, engine business, and spare and service part business in Q1 constitute 19% of the Agri Machinery segment revenue as compared to 18% in the corresponding quarter. Agri Machinery product segment revenue came at INR 2,766.5 crores, up by 26.8%, as against INR 2,181.5 crores in the previous year. EBIT margin for the Agri Machinery business division came at 10.8%, as against 12.6% in the corresponding quarter, adversely impacted by commodity cost inflation. Moving on to the Construction Equipment business. In Q1 FY27, the CE industry volume across crane, backloader, mini excavator, and compactor, grew by approximately 23% YOY. This growth was primarily driven by the crane industry, which recorded a strong 46% YOY growth as compared to the corresponding quarter last year. Our Construction Equipment business total volume came at 1,344 machines, up by 27.4% as compared to 1,055 machines in the corresponding quarter last year.

Prateek Singhal: Non-tractor revenue comprising Agri solution business, engine business, and spare and service part business in Q1 constitute 19% of the Agri Machinery segment revenue as compared to 18% in the corresponding quarter. Agri Machinery product segment revenue came at INR 2,766.5 crores, up by 26.8%, as against INR 2,181.5 crores in the previous year. EBIT margin for the Agri Machinery business division came at 10.8%, as against 12.6% in the corresponding quarter, adversely impacted by commodity cost inflation. Moving on to the Construction Equipment business. In Q1 FY27, the CE industry volume across crane, backloader, mini excavator, and compactor, grew by approximately 23% YoY. This growth was primarily driven by the crane industry, which recorded a strong 46% YoY growth as compared to the corresponding quarter last year. Our Construction Equipment business total volume came at 1,344 machines, up by 27.4% as compared to 1,055 machines in the corresponding quarter last year.

Speaker #4: As compared to 18% in the corresponding quarter. Agri-machinery product segment revenue came at ₹2,766.5 crore, up by 26.8% as against ₹2,181.5 crore in the previous year.

Speaker #4: EBIT margin for the Agri Machinery business division came at 10.8%, as against 12.6% in the corresponding quarter, as adversely impacted by commodity cost inflation. Moving on to the Construction Equipment business, in Q1 FY27, the served industry volume across crane, backhoe loader, mini excavator, and compactor grew by approximately 23% year-on-year.

Speaker #4: This growth was primarily driven by the crane industry, which recorded a strong 46% year-over-year growth as compared to the corresponding quarter last year.

Speaker #4: Our construction equipment business total volume came at 1,344 machines, up by 27.4% as compared to 1,055 machines in the corresponding quarter last year. Construction equipment segment revenue came at ₹419.6 crore, up by 39.2% as against ₹301.5 crore in the corresponding quarter.

Prateek Singhal: Construction Equipment segment revenue came at INR 419.6 crore, up by 39.2%, as against 5.8% in the corresponding quarter, adversely impacted due to commodity cost inflation. While there is a short-term challenge related to inflation due to West Asia crisis, however, the sustained demand is expected to help normalize the business health. Industry underlying fundamentals remain encouraging with the continued government focus on infrastructure creation, increasing investment in urban development, industrial projects, and improved visibility on project awards provide a supportive medium-term demand environment. While we remain watchful of the potential geopolitical challenges, we believe the sector is well poised, positioned for the sustained growth, and will continue to maintain operational flexibility to respond effectively to evolving market conditions. Now I will request the moderator to open the floor for the Q&A.

Speaker #4: Adversely impacted due to commodity cost inflation. While there is a short-term challenge related to inflation due to the West Asia crisis, the sustained demand is expected to help normalize the business health.

Speaker #4: Industry underlying fundamentals remain encouraging, with the continued government focus on infrastructure creation, increasing investment in urban development and industrial projects, and improved visibility on project awards providing a supportive medium-term demand environment.

Speaker #4: While we remain watchful of the potential geopolitical challenges, we believe the sector is well-positioned for sustained growth and will continue to maintain operational flexibility to respond effectively to evolving market conditions.

Speaker #4: Now, I will request the moderator to open the floor for the Q&A.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may please press star and one on their touch-tone telephone.

Operator 2: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is on the line of Gunjan from Bank of America. Please proceed with your question.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is on the line of Gunjan from Bank of America. Please proceed with your question.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Kunjan from Bank of America.

Speaker #1: Please proceed with your question.

Speaker #2: Yeah, hi. Thanks for taking my question. My first question is on the industry outlook. It does seem like, you know, when we did the call last time, we did call out, you know, some decline in the industry for fiscal '27.

[Analyst] (Bank of America): Hi, thanks for taking my question. My first question is on the industry outlook. It does seem like, when we did the call last time, we did call out some decline in the industry for FY27. Going by the sort of trend that we are seeing with every passing month, do you think that there is an upside risk to the numbers that we've given out? If you can give us a little bit more color on what are you seeing on ground. Is there any change in sentiment that you're seeing on the ground, in terms of the inquiries, getting into the festive months as well?

Speaker #2: But going by the sort of trend that we are seeing, you know, with every passing month, do you think that there is, you know, an upside risk to the numbers that we've given out?

Speaker #2: And if you can give us a little bit more color on what you are seeing on the ground? Is there any change in sentiment that you're seeing on the ground in terms of the inquiries for getting into the festive months as well?

Speaker #3: Hi Kunjan, Neeraj this side. Hope you're doing well. So yes, you are absolutely right—we did see an upside in the last quarter and also in July.

Neeraj Mehra: Hi, Gunjan. Neeraj this side. Hope you're doing well. Yes, you are absolutely right. We see an upside in the last quarter and also in July. Just a slight correction, Gunjan. In our last guidance, we had not said a negative outlook. We had said a ±2% to 3% variation. We were looking at a very marginal kind of a growth. The last quarter, and especially the last 45, 50 days have been very positive. As already mentioned in Prateek's opening comments, the overall sentiment is positive. Various factors are there, and Prateek has already mentioned, so I'll not repeat those factors. Yes, we are looking at a much better outlook for the current fiscal year as we go forward.

Neeraj Mehra: Hi, Gunjan. Neeraj this side. Hope you're doing well. Yes, you are absolutely right. We see an upside in the last quarter and also in July. Just a slight correction, Gunjan. In our last guidance, we had not said a negative outlook. We had said a ±2% to 3 variation. We were looking at a very marginal kind of a growth. The last quarter, and especially the last 45, 50 days have been very positive. As already mentioned in Prateek's opening comments, the overall sentiment is positive. Various factors are there, and Prateek has already mentioned, so I'll not repeat those factors. Yes, we are looking at a much better outlook for the current fiscal year as we go forward.

Speaker #3: And just, just a slight correction, Kunjan. In our last guidance, we had not said a negative outlook. We had said a plus-minus two plus two to three percent variation.

Speaker #3: So, we were looking at a very marginal kind of growth. But the last quarter, and especially the last 45–50 days, have been very, very positive.

Speaker #3: And as already mentioned in Prateek's opening comments, the overall sentiment is positive. Various factors are there, and Prateek has already mentioned them, so I will not repeat those factors.

Speaker #3: But yes, we are looking at a much better outlook for the current fiscal year as we go forward. It would not be very prudent for me to estimate at a quarterly or monthly level because of the shift of seasons, the high base, and GST last year.

Neeraj Mehra: It will not be very prudent for me to estimate at a quarterly level or a monthly level because of the shift of seasons and high base and GST last year. Yes, currently we are looking at a mid-single-digit growth for the financial year. That is our current take as of now.

Speaker #3: But yes, currently we are looking at a mid single-digit growth for the financial year. So, that is our current take as of now.

Speaker #2: And any regional divergence that you're seeing? Because, you know, of course, West and South did very well last year, and Prateek did mention that, you know, your stronger markets seem to be recovering more.

[Analyst] (Bank of America): Any regional divergence that you're seeing because, of course, western south did very well last year. Prateek did mention that your stronger markets seem to be recovering more. If you can give a little bit more color on where you see higher growth in terms of regional mix as well in fiscal 27.

Speaker #2: So, if you can give a little bit more color on where you see higher growth in terms of regional mix as well in fiscal '27.

Speaker #3: So, overall, the industry has grown across the country. Yes, it's grown slightly better in our stronger markets than the overall All India growth.

Neeraj Mehra: See, overall the industry has grown across the country. Yes, it's grown slightly better in our stronger markets than the overall all India growth. South, which has traditionally been our weak geography, the industry growth has been highest over there. In south, the industry growth has been close to 33%, whereas in Q1, the overall growth was 19%. As again, Prateek mentioned, a lot of input actions that are in terms of products and in terms of channels have actually helped us grow. Overall there has been a growth. Major growth is in south and then in the northern and the central part of the country.

Speaker #3: South, which has traditionally been our weak geography, the industry growth has been highest over there. So, in South, the industry growth has been close to 33%, whereas in Q1, the overall growth was 19%.

Speaker #3: But as, again, Prateek mentioned, a lot of actions at our end—input actions at our end—in terms of products and in terms of channel have actually helped us grow.

Speaker #3: So overall, there has been growth. The major growth is in the South, followed by the Northern and Central parts of the country.

Speaker #2: Okay. And when you say mid single-digit, we are still sticking with the point that we will gain market share, so growth for Escorts should be higher than the mid single-digit that we are anticipating for the industry.

[Analyst] (Bank of America): Okay. When you say mid-single digit, we still stick with the point that we will gain market share, so growth for Escorts should be higher than the mid-single digit that we are anticipating for the industry. That's the way we should think about it, right?

Speaker #2: That's the way we should think about it, right?

Speaker #3: Absolutely. Absolutely.

Neeraj Mehra: Absolutely.

Speaker #2: Okay. And second question, I think more to Bharat Sir on the margins. Can you give us a bit more color on what was the cost headwind that we saw in this quarter?

[Analyst] (Bank of America): Okay. Second question is, I think more to Bharat sir on the margins. Can you give us a bit more color on what was the cost headwind that we saw in this quarter from the metal basket, and how should we think about it going into Q2 as well? Plus, if you can give us some thought process on how we are looking to navigate it in terms of price action, cost reduction. Some color on how do we think about margin and the cost headwind.

Speaker #2: You know, from the metal basket, and how should we think about it going into the second quarter as well? Plus, if you can give us some thought process on, you know, how we are looking to navigate it in terms of price action and cost reduction.

Speaker #2: Could you give us some color on how we should think about margin and the cost headwind?

Speaker #3: Yeah, Kunjan, this is Bharat's mother. So, I think, as we mentioned in the last call, we were facing the commodity inflation thresholds in the first quarter.

Bharat Madan: Good evening. This is Bharat Madan. I think as we have mentioned in the last call, we were facing the commodity inflation pressures in the first quarter because of the geopolitical situation. We have faced close to, I would say about 5% sort of cost impact on the tractor business side. More or less 1% of that is coming because of this minimum wages for the contractual labor, which has gone up in Haryana, which is unique to us. If you remove that impact, all India industry level may still be about 400 basis points, an increase which has happened on the commodity side. Obviously, part of it got offset with the operating leverage, where the revenue growth was very good. 23% revenue growth has happened on the tractor business.

Speaker #3: Because of the geopolitical situation, we have faced close to about, I would say, a 5% sort of cost impact on the tractor business side.

Speaker #3: And more or less 1% of that is coming because of this minimum wage for the contract labor, which has gone up in Haryana, which is unique to us.

Speaker #3: So if you remove that impact, all-India industry level may still be about 400, 400 basis points, and the increase which has happened on the commodity side.

Speaker #3: Now, obviously, part of it got offset with the operating leverage, but the revenue growth was very good. Twenty-three percent revenue growth has happened in the tractor business.

Speaker #3: And then also, one price increase we took in the month of April, which was about 1% to 1.5% or so, which also to some extent was able to offset this.

Bharat Madan: Also one pricing which we had taken in the month of April, which is about 1% to 1.5% sort of range, which also to some extent was able to offset this. Having said that, the commodity pressure on metal and rubber is still continuing, there may still be some more cost increase which will happen in Q2. We are contemplating how to pass it on. The discussions are happening. The quantum is not yet finalized. We are also watching the industry. For the growth in the industry was very good, no one want to take a call in terms of touching the prices at this point in time when you are growing at double digit. Going forward, when you are looking at the base is already very high.

Speaker #3: But having said that, the commodity pressure on metals and labor is still continuing, so there may still be some more cost increase which will happen in Q2.

Speaker #3: So we are contemplating how to pass it on, so the discussions are happening. The quantum is not yet finalized. We're also watching the industry.

Speaker #3: So, the growth in the industry was very good, so no one wanted to take a call in terms of touching the prices at this point in time, when you're going at the budget.

Speaker #3: So, going forward, when you're looking at the basis, it's already very high. When the demand value starts getting impacted, you may not see the similar growth level.

Bharat Madan: When the demand slowly will start getting impacted, may not see the similar growth level. Obviously, the cost pressure will not be able to absorb, it will get passed on. We will have to see how much will it get passed on. We have not firmed up yet, but yes, it will happen sometime in this quarter itself.

Speaker #3: Obviously, the cost pressure will not be able to be absorbed. It'll get faster, so we'll have to see how much it really gets faster. So we're not firmed up yet.

Speaker #3: But yes, it will happen sometime in this quarter itself.

Speaker #2: And how much more cost pressure is there to be seen in Q2? Like, any number? Like, you gave 5% last time—that was pretty useful—but is it a similar magnitude, or much less?

[Analyst] (Bank of America): How much more cost pressure is there to be seen in Q2? Like any number? You gave 5% last time, that was pretty useful, but is it similar magnitude, much lesser? Any number that you can?

Speaker #2: Any number that you can?

Speaker #3: As I said, this 5% is still continuing, and on top of that, we are talking about another one and a half to two percent sort of pressure which will be there.

Bharat Madan: 5% is still continuing. On top of that, we are talking about another 1.5% to 2% sort of pressure which will be there. We expect this will be a temporary phenomenon. Maybe I think from Q4 you will see maybe some reversal may start happening. As of now, it's very difficult to predict the geopolitical situation. Every day it's changing. We are hoping it will start getting reversal in the Q4.

Speaker #3: And we expect this will be a temporary phenomenon. Maybe I think we'll be from Q4, you will see maybe some reversal may start happening.

Speaker #3: So, as of now it is very difficult to predict the geopolitical situation because every day it is changing. But we expect and hope it will start getting reversed in Q4.

Speaker #2: Got it. Thank you so much. I'll join back the queue.

[Analyst] (Bank of America): Got it. Thank you so much. I'll join back the queue.

Speaker #1: Thank you, ma'am. The next question is from the line of Raghunathan from Nuvama Research. Please proceed with your question.

Operator 2: Thank you, ma'am. The next question is from the line of Raghunandhan from Nuvama Research. Please proceed with your question.

Operator: Thank you, ma'am. The next question is from the line of Raghunandhan from Nuvama Research. Please proceed with your question.

[Analyst] (Nuvama Institutional Equities): Thank you, sir, for the opportunity, and thanks for the detailed opening remarks. In opening remarks, Prateek spoke about Shaurya model and how the model has helped in market share gains in south region. My question was, can you talk of the feedback for the other new products like Promax, Digitrac, and Kubota MU, and which products are helping in terms of volumes and market share gains? I see that there are gains even in the north region. If you can throw some color. Thank you.

Raghunandhan N.L.: Thank you, sir, for the opportunity, and thanks for the detailed opening remarks. In opening remarks, Prateek spoke about Shaurya model and how the model has helped in market share gains in south region. My question was, can you talk of the feedback for the other new products like Promax, Digitrac, and Kubota MU, and which products are helping in terms of volumes and market share gains? I see that there are gains even in the north region. If you can throw some color. Thank you.

Speaker #3: Thank you, sir, for the opportunity, and thanks for the detailed opening remarks. In the opening remarks, Prateek spoke about the Shaurya model and how the model has helped with market share gains in the South region.

Speaker #3: My question was, can you talk about the feedback for the other new products like Promax, DigiTrack, and Kubota MU? And which products are helping in terms of volumes and market share gains?

Speaker #3: I see that there are gains even in the North region. If you could throw some color? Thank you. Yeah. Hi, Raghu. Neeraj this side.

Neeraj Mehra: Hi, Raghu. Neeraj this side. Yes, overall, the growth has been possible because of these new launches. Shaurya was primarily for the southern market, and you would have seen that we have consistently grown, post the launch of Shaurya. It's not only restricted to a product portfolio introduction. There are a couple of other actions as well. Apart from that, if you remember, last year we had introduced Promax, that has actually helped us tremendously. Promax actually now contributes over 20% to 22% of the overall Farmtrac sales. With Promax, we had been able to cater to the four-wheel segment substantially, and that has helped us grow in the Farmtrac brand across the country. As regards to Digitrac was as it is in the market, but we expanded the portfolio. We brought in a 4x4 model.

Speaker #3: So yes, overall, the growth has been possible because of these new launches. So, Shaurya was primarily for the southern market, and you would have seen that we have consistently grown.

Speaker #3: Post the launch of Shaurya, and it's not only restricted to a product folio in the product portfolio introduction. There are a couple of other actions as well.

Speaker #3: Apart from that, if you remember, last year we had introduced Promax, and that has actually helped us tremendously. Promax now contributes over 20% to 22% of the overall Samtrak sales.

Speaker #3: And with Promax, we have been able to cater to the four-wheel segment substantially, and that has helped us grow the Samtrak brand across the country.

Speaker #3: As regards DigiTrack, DigiTrack was as it is in the market, but we expanded the portfolio. We brought in a 4x4 model. And what it has done, actually, is that it has massively impacted volumes and market share across the PT states.

Neeraj Mehra: What it has done actually is that it has massively impacted volumes, and market share across the PT states. Digitrac as of now contributes close to about 23% to 25% of the total Powertrac portfolio. All these products have actually helped us tremendously. There remains a small gap in the Powertrac portfolio in terms of four-wheel drive segment, which we intend to cover over the next few months. That is on the Powertrac and Farmtrac front. I'll let Rajan talk about the new launch of Kubota.

Speaker #3: So DigiTrack, as of now, contributes close to about 23% to 25% of the total Power Track portfolio. So all these products have actually helped us tremendously.

Speaker #3: There remains a small gap in the powertrack portfolio in terms of the four-wheel drive segment, which we intend to cover over the next few months.

Speaker #3: So that is on the Powertrac and Samtrac front. I'll let Rajan talk about the new launch of Kubota.

Speaker #4: Yeah, thanks. Thanks, Raghu. So, yeah, in the Kubota brand, we had introduced a fresh series last year that started to help us expand our footprint. Largely, Kubota has had strong holds in the western, southern, and eastern parts of India.

Rajan Chugh: Yeah, thanks. Thanks, Raghu. In Kubota brand, we had introduced a series last year, a fresh series last year that started to help us expand our footprint. Largely, Kubota has had strongholds in western, southern, and eastern part of India. Despite a bit of not as much growth in western part of India, we have been able to kind of expand our footprint with the newer products launched this year as well as last year in Kubota brand. It has also helped us kind of improve our situation in north and southern markets. There are more products kind of lined up this year as well within Kubota brand. We should start to see improvement there as well. Thank you.

Speaker #4: Despite a bit of not as much growth in the western part of India, we have been able to kind of expand our footprint with the newer products launched this year, as well as last year, in the Kubota brand.

Speaker #4: And it has also helped us kind of improve our situation in the North and Southern markets. So there are more products kind of lined up this year as well within the Kubota brand.

Speaker #4: So, we should start to see improvement there as well. Thank you.

Speaker #3: Thank you, Rajan Sir and Neeraj Sir. Can you also talk about what are the white spaces in the product portfolio which you want to address?

[Analyst] (Nuvama Institutional Equities): Thank you, Rajan sir and Neeraj sir. Can you also talk about what are the white spaces in the product portfolio which you want to address. I understand four-wheel drive was one space that you alluded to. Apart from that, is there any white space which is high volume and there is a need for you to address that and come out with new products?

Raghunandhan N.L.: Thank you, Rajan sir and Neeraj sir. Can you also talk about what are the white spaces in the product portfolio which you want to address. I understand four-wheel drive was one space that you alluded to. Apart from that, is there any white space which is high volume and there is a need for you to address that and come out with new products?

Speaker #3: I understand four-wheel drive was one space which you alluded to. Apart from that, is there any other white space which is high volume, and is there a need for you to address that and come out with new products?

Speaker #4: So, first, talking about the Powertrac and the Samtrac side, on the Samtrac side, the portfolio, to a very large extent, covers over 80% of the applications used in the country.

Neeraj Mehra: first, talking on the Powertrac and the Farmtrac sides. On the Farmtrac side, the portfolio to a very large extent, covers over 80% of the applications used in the country. Close to 85%. In Farmtrac, there is not much of a concern. There is never 100% coverage on the portfolio vis-a-vis applications. As I already mentioned, with respect to Powertrac, yes, a major gap is in the 35 to 50 HP segment in the four-wheel drive. The four-wheel drive market is actually growing across the country and there are certain states, if you look at our overall performance at a state level, there are certain states which are highly driven by the four-wheel segment. There we have not done well. That is one major gap on the Powertrac side. On the Kubota side, Rajan will update you.

Neeraj Mehra: First, talking on the Powertrac and the Farmtrac sides. On the Farmtrac side, the portfolio to a very large extent, covers over 80% of the applications used in the country. Close to 85%. In Farmtrac, there is not much of a concern. There is never 100% coverage on the portfolio vis-a-vis applications. As I already mentioned, with respect to Powertrac, yes, a major gap is in the 35 to 50 HP segment in the four-wheel drive. The four-wheel drive market is actually growing across the country and there are certain states, if you look at our overall performance at a state level, there are certain states which are highly driven by the four-wheel segment. There we have not done well. That is one major gap on the Powertrac side. On the Kubota side, Rajan will update you.

Speaker #4: Close to 85%. So, in Samtrak, there is not much of a concern. There is never 100% coverage on the portfolio vis-à-vis applications.

Speaker #4: And as I already mentioned, with respect to Powertrac, yes, a major gap is in the 35 to 50 HP segment in the four-wheel drive.

Speaker #4: The four-wheel drive market has actually been growing across the country. And there are certain states—if you look at our overall performance at a state level—there are certain states which are highly driven by the four-wheel segment.

Speaker #4: So there, we have not done well. That is one major gap on the Powertrac side. On the Kubota side, Rajan will update you.

Speaker #4: Sure. Yeah. So, thanks. On Kubota, largely we have been focused on the 20 to 30 horsepower niche orchard and compact segment, and also the 41 to 50 horsepower segment, where we have seen over a period the share of industry has swung towards that segment more and more.

Rajan Chugh: Sure. Yeah. Thanks. On Kubota, largely we have been focused on 20 to 30 horsepower niche, orchard and compact segment, and also 41 to 50 horsepower segment, which we have seen over a period, the share of industry has swinged towards that segment more and more. Largely we are focused in expanding our presence in these two segments, which contribute almost 77%, 78% of the industry. For now we want to kind of continue to focus on those segments. There are segments over 50 horsepower. Those are marginal or not that big. For now we want to stay focused and increase our presence in these segments. Thank you.

Speaker #4: So largely, we are focused on expanding our presence in these two segments, which contribute almost 70% to 78% of the industry. So for now, we want to continue to focus on those segments.

Speaker #4: There are segments over 50 horsepower. Those are marginal or not as big. So, for now, we want to stay focused and increase our presence in these segments.

Speaker #4: Thank you.

[Analyst] (Nuvama Institutional Equities): Thank you, sir. Just a clarification. How much would be the share of four-wheel drive for the tractor industry as of now?

Raghunandhan N.L.: Thank you, sir. Just a clarification. How much would be the share of four-wheel drive for the tractor industry as of now?

Speaker #3: Thank you, sir. Just a clarification: what would be the share of four-wheel drive in the tractor industry as of now?

Speaker #4: So, you see, overall four-wheel drive is actually taken in two parts. One is the four-wheel drive, which is used primarily in the smaller segment, in the orchard segment.

Neeraj Mehra: You see, overall, four-wheel drive is actually taken in two parts. One is the four-wheel drive, which is used primarily in the smaller segment in the orchard segment. The other one is other than the orchard segment, primarily starting from 35, 38 HP segment and going beyond the 50 HP segment. It is actually steadily growing. There is no clear-cut data as such for this particular segment. Because of our volumes growing tremendously post the introduction of Promax, we see the growth of four-by-four segment at a much higher level than the normal industry growth. It will be not very right on my part to exactly, when there is no clear-cut data available, but the way the four-by-four markets are moving, the growth in four-by-four segment is actually higher than the industry growth.

Speaker #4: And the other one is, other than the orchard segment, primarily starting from the 35-38 HP segment and going beyond the 50 HP segment. So it is actually steadily growing.

Speaker #4: There is no clear-cut data as such for this particular segment. But because car volumes have grown tremendously post the introduction of Promax, we see the growth of the four-by-four segment at a much higher level than the normal industry growth.

Speaker #4: So it would not be right on my part to say exactly, when there's no clear-cut data available. But the way the 4x4 markets are moving, the growth in the 4x4 segment is actually higher than the industry growth.

Speaker #3: Noted, sir. Very helpful. I'll fall back to the queue. Thank you.

[Analyst] (Nuvama Institutional Equities): Noted, sir. Very helpful. I'll fall back to the queue. Thank you.

Raghunandhan N.L.: Noted, sir. Very helpful. I'll fall back to the queue. Thank you.

Speaker #1: Thank you, sir. Ladies and gentlemen, to ask a question, please press star one now. Participants who wish to ask questions may please press star one at this time.

Operator 2: Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your question to two per participant. The next question is from the line of Gurpreet from InCred AMC. Please proceed with your question.

Operator: Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your question to two per participant. The next question is from the line of Gurpreet from InCred AMC. Please proceed with your question.

Speaker #1: Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference call, please limit your questions to two per participant.

Speaker #1: The next question is from the line of Breathe from Incred AMC. Please proceed with your question.

Speaker #5: Thank you for the opportunity, sir. My first question is on the line of construction equipment. How much has been the price hike we have taken in cranes and other equipment pre-regulation until now?

[Company Representative] (InCred AMC): Thank you for the opportunity, sir. First question is on the line of construction equipment. How much has been the price hike we have taken in cranes and other pre-regulation until now? If you could bifurcate this, how much was for emission norms last year and how much for the commodity cost hike which has been happening over the last two, three quarters?

Gurpreet Arora: Thank you for the opportunity, sir. First question is on the line of construction equipment. How much has been the price hike we have taken in cranes and other pre-regulation until now? If you could bifurcate this, how much was for emission norms last year and how much for the commodity cost hike which has been happening over the last two, three quarters?

Speaker #5: And if you could bifurcate this, how much was for emission norms last year and how much for the commodity cost hike, which has been happening over the last two, three quarters?

Speaker #3: Yeah, hi. So, if you could just decide—I'll try to respond to this question in two parts. Most of the emission norm-related price increases were pushed in last year, except for a few models.

Sanjeev Bajaj: Yeah. Hi. I will try to respond to this question in two parts. Most of the emission norm related price increases were pushed in the last year, except for few models like backhoe loader and compactor, where we are yet to introduce BSVI model. Those are getting introduced from September onwards, because prices of those models will be done at that time. The impact of emission norms was in two different segments. There were products which were moving from BSIII straightaway to BSVI, where the impact was about 6% to 7%. Products which were moving from BSIV to BSVI, the impact was about 3.5% to 4%, 4%, 4.5%. That was passed on in the last January 2025.

Speaker #3: Like backloader and compactor, where we are yet to introduce the BS5 model—so those are getting introduced from September onwards. Pricing for those models will be done at that time.

Speaker #3: But the impact of emission norms was in two different segments. There were products which were moving from BS3 straight to BS5, where the impact was about 6 to 7 percent.

Speaker #3: And products which were moving from BS4 to BS5, the impact was about three and a half to four percent, four, four and a half percent.

Speaker #3: So that was passed on in last January 2025. But after that, those prices got stabilized somewhere around the middle of the year. Then the old stock was exhausted by most of the manufacturers, and that was passed on.

Sanjeev Bajaj: After that, those prices got stabilized somewhere around middle of the year when the old stock was exhausted by most of the manufacturers. That was passed on. Now, the second phase of price increase. Normally we do once in a year price increase in January and that is the industry practice also. We have been able to pass on prices even after the war started and therefore the cost escalation caused that to take multiple price increases in small tranches all through in H1 so far. Price increase so far has been roughly about 5%, including the price increase which we have taken in the month of January. Having said that, there is also adjustment of channel discounts which have been done. Effectively it is roughly about 6% which has been passed on to the market.

Speaker #3: Now, the second phase of price increase—normally, we do a once-a-year price increase in January, and that is the industry practice also.

Speaker #3: We've been able to pass on prices even after that, after the war started. And therefore, the cost escalation caused us to take multiple size increases in small tranches.

Speaker #3: All through the first half so far, the price increase has been roughly about five percent, including the price increase which we have taken in the month of January.

Speaker #3: Having said that, there is also adjustment of channel discounts, which have been done. So effectively, it is roughly about 6% which has been passed on to the market.

Speaker #5: Oh, thank you so much, sir. That was helpful. Another question along the same lines: What kind of growth do we expect in our crane business for this year?

[Company Representative] (InCred AMC): Thank you so much, sir. That was helpful. Another on the same lines. What kind of growth do we expect in our cranes business for this year? This will lead by how much would be industry growth and how much would be market share increase? What will be the growth drivers for the same?

Gurpreet Arora: Thank you so much, sir. That was helpful. Another on the same lines. What kind of growth do we expect in our cranes business for this year? This will lead by how much would be industry growth and how much would be market share increase? What will be the growth drivers for the same?

Speaker #5: And this will lead by how much? How much would be industry growth, and how much would be market share increase? And what would be the growth drivers for the same?

Speaker #3: Yeah. So right now, the industry is showing positive signs, despite the fact that price increases have been taken by all manufacturers. The demand is good, and there is also demand from the corporate sector because project execution speed is what they are focusing on.

Sanjeev Bajaj: Yes. Right now the industry is showing positive signs despite the fact that the price increases have been taken by all manufacturers. The demand is good. There is also a demand from the corporate sector because the project execution speed is what they are focusing on. Especially on the higher tonnage segment and higher capacity segment cranes, the demand is relatively stable. We believe that if I compare Q1 over last year Q1, then last year Q1 was a little subdued because of BS VI introduction, so it is not a right comparison to make. In Q1 this year, the growth is roughly about 45% over last year same quarter. From a normal quarter, if it was not 2025 subdued volume, then the growth would have been somewhere around 20%, which we feel that is sustainable.

Speaker #3: Especially in the higher tonnage segment and higher capacity segment cranes, the demand is relatively stable. And so we believe that if I compare Q1 over last year Q1, then last year's Q1 was a little subdued because of the BS5 introduction.

Speaker #3: So, it is not a right comparison to make. So, in quarter one this year, the growth is roughly about 45 percent over last year's same quarter.

Speaker #3: But from a normal quarter, if it was not 2025 subdued volume, then the growth would have been somewhere around 20 percent, which we feel is sustainable, except for this quarter where the rains have been quite good—which is good for the agri sector, but not so good for the construction equipment sector.

Sanjeev Bajaj: Except for this quarter where the rains have been quite good, which is good for agri sector but not so good for construction equipment sector. This quarter we believe that it is going to impact construction activities a little bit. Overall for the end of the year, we are looking at anywhere between 12% to 15% kind of overall growth for the whole year.

Speaker #3: So this quarter, we believe that it is going to impact construction activities a little bit. But overall, for the end of the year, we are looking at anywhere between 12% to 15% overall growth for the whole year.

Speaker #5: Now, is it industry or our growth?

[Company Representative] (InCred AMC): Is it industry or our growth?

Gurpreet Arora: Is it industry or our growth?

Speaker #3: I'm talking about industry growth, and from the market share perspective, last year there was a gain of about 2.7 percent in market share for us.

Sanjeev Bajaj: I'm talking about industry growth. From the market share perspective, last year there was a gain of about 2.7% in the market share for us, and we will continue to be aggressive in this segment. Also, we'll be supported with some new models which we are introducing later in this year from October onwards. We believe that will give us traction both in terms of specific applications as well as some entry level products also.

Speaker #3: And we will continue to be aggressive in this segment. Also, we'll be supported by some new models, which we are introducing later this year, from October onwards.

Speaker #3: And we believe that will give us traction both in terms of specific applications, as well as some entry-level products also.

Speaker #5: Sure, sir. Thank you. And sir, are we seeing any pushback from the customer due to multiple price hikes? Like you mentioned, 6–7% last year and 6–7% this year, so in total, we would have taken about a 15–16% price hike.

[Company Representative] (InCred AMC): Sure, sir. Thank you. Sir, are we seeing any pushback from the customer due to multiple price hikes, like you mentioned, 6% to 7% last year and 6% to 7% this year, total price hikes you would have taken 15% to 16% price hike. Are we seeing any postponement of purchase for this year, or is there because a lot of price hikes would have happened in the month of May and June. Is this 12% to 15% number, shall we consider as a conservative or somewhat aggressive kind of number? If you could give some highlights on this.

Gurpreet Arora: Sure, sir. Thank you. Sir, are we seeing any pushback from the customer due to multiple price hikes, like you mentioned, 6% to 7% last year and 6% to 7% this year, total price hikes you would have taken 15% to 16% price hike. Are we seeing any postponement of purchase for this year, or is there because a lot of price hikes would have happened in the month of May and June. Is this 12% to 15% number, shall we consider as a conservative or somewhat aggressive kind of number? If you could give some highlights on this.

Speaker #5: Are we seeing any postponement of purchase for this year? Or is it because a lot of price hikes would have happened in the months of May and June? So, should we consider this 12 to 15 percent more as a conservative or somewhat aggressive kind of number?

Speaker #5: Or if you could give some highlights on this?

Speaker #3: Yeah. So, currently, I mean, there is a pushback from the customers to the extent that they are taking a longer time to decide, and it is taking deeper negotiation to fetch those prices.

Sanjeev Bajaj: Yeah. Currently, there is a pushback from the customer to the tune of they are taking longer time to decide, and it is taking a deeper negotiation to fetch those prices. At the same time as the demand is up, I think the demand is going to be a bit leveler for this. We believe that in next quarter also, in Q2 the prices will stabilize. If the demand continues from the projects, I think this growth is possible.

Speaker #3: But at the same time, as demand is up, I think demand is going to be a big leveler for this. We believe that in the next quarter or so, in Q2, the prices would stabilize.

Speaker #3: And if the demand continues from the projects, then I think this growth is possible.

Speaker #5: Sure, sir. Thank you so much. That was helpful. I'll join back in the queue.

[Company Representative] (InCred AMC): Sure sir, thank you so much. That was helpful. I'll join back in the queue.

Gurpreet Arora: Sure sir, thank you so much. That was helpful. I'll join back in the queue.

Speaker #1: Thank you, sir. The next question is from the line of Lakshmi Narayan from Tunga Advisors LLP. Please proceed with your question.

Operator 2: Thank you, sir. The next question is from the line of Lakshmi Narayan from Tunga Advisors LLP. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Lakshmi Narayan from Tunga Advisors LLP. Please proceed with your question.

Speaker #2: Yeah, thank you. So my question is regarding your non-agricultural business. There are different...

Lakshmi Narayan: Yeah. Thank you. My question is regarding your non-agricultural business. There have been.

Speaker #1: Sorry to interrupt, sir. The line for the management seems to have disconnected. Please wait while we reconnect them.

Operator 2: Sorry to interrupt, sir. The line for the management.

Operator: Sorry to interrupt, sir. The line for the management.

Lakshmi Narayan: Hello.

Operator 2: Seems to have disconnect. Please wait while we reconnect them.

Lakshmi Narayan: Hello.

Operator: Seems to have disconnect. Please wait while we reconnect them.

Speaker #2: Okay.

Lakshmi Narayan: Okay.

Speaker #1: Ladies and gentlemen, the line for the management has been reconnected. Thank you, and over to you, Lakshmi Narayan, sir.

Operator 2: Yeah. Ladies and gentlemen, the line for the management has been reconnected. Thank you, and over to you, Lakshmi Narayan, sir.

Operator: Yeah. Ladies and gentlemen, the line for the management has been reconnected. Thank you, and over to you, Lakshmi Narayan, sir.

Speaker #2: Yeah, thank you. My question is regarding the construction equipment growth. There has been significant industry growth, and we have also exceeded that growth in general, right?

Lakshmi Narayan: Yeah. Thank you. My question is regarding the construction equipment growth. There has been a significant industry growth and you have also exceeded growth in general. Right? Can you just explain to me what has led to this strong growth? Was it some kind of a base effect or there are certain interference which you did positively or how do you think about this part of the business for the rest of the year?

Speaker #2: Can you just explain to me what has led to this strong growth? Was it some kind of base effect, or were there certain interventions that you did?

Speaker #2: Positively, or how do you think about this part of the business for the rest of the year?

Speaker #5: Yeah. Thank you, Mr. Lakshmi Narayan. So, as I said, the growth looks to be very high. And when we compare it to the same quarter last year, part of it is because of the lower base of last year.

Sanjeev Bajaj: Yeah. Thank you, Mr. Lakshmi Narayan. As I said, the growth looks to be very high when we compare last year same quarter. Part of it is because of the lower base of last year and that was at the time when every manufacturer was trying to push BSVI product which was again a cost escalated product for the customer and also there was a little bit of apprehension on the new technology which is being introduced. Overall, the growth looks very, very high. Even if you compare it to the normal quarter, which was, say, FY25 quarter, same quarter, then again, there is a growth over that also. The real reason of growth is primarily because there is a clear push from the government in terms of completion of the projects.

Speaker #5: And that was at the time when every manufacturer was trying to push BS5 product, which was, again, a cost-escalated product for the customer. And also, there was a little bit of apprehension regarding the new technology that was being introduced.

Speaker #5: So overall, the growth looks very, very high. But even if you compare it with the normal quarter, which was, say, FY25 quarter, same quarter, then again, there is a growth over that also.

Speaker #5: So, the real reason for growth is primarily because there is a clear push from the government in terms of completion of the projects. Last financial year, the rate at which roads were constructed was almost half of what it was in the years 2024 and 2025.

Sanjeev Bajaj: Last financial year, the rate at which roads were constructed was almost half of what it was in 2024 and 2025. There is a renewed focus by the government to push these infrastructure projects. There have been a few developments happening in various states. Like Andhra is doing lot of development after introduction of new government and also new capital city being made. Bengal has recently seen new development starting, and there is also a good traction on projects like solar power and metro rails in various cities. This demand currently looks real. Only thing is the percentage of growth looks a little higher because the last year base was low.

Speaker #5: So, there is a renewed focus by the government to push these infrastructure projects. There have been a few developments happening in various states, like Andhra is doing a lot of development after the introduction of the new government, and also the new capital city is being made.

Speaker #5: Bengal has recently seen new developments starting, and there is also good traction on projects like solar power and metro rails in various cities.

Speaker #5: So, this demand currently looks real. The only thing is, the percentage of growth looks a little higher because the base last year was low.

Speaker #2: Got it. And what kind of growth do you think the industry will actually achieve for the current year in construction equipment?

Lakshmi Narayan: Got it. What kind of growth industry you think would actually achieve for the current year in the Construction Equipment?

Speaker #5: So, we are anticipating anywhere around 12 to 15 percent overall, in which there will be high growth for mini excavators and cranes. We believe that backhoe loaders will grow at about 5 to 7 percent.

Sanjeev Bajaj: We are anticipating anywhere around 12% to 15% overall, in which there will be high growth for mini excavators and cranes. We believe that backhoe loaders will grow at about 5% to 7%, and compactors also will grow at about 5% to 6%.

Speaker #5: And compactors will also grow at about 5 to 6 percent.

Speaker #2: Got it, sir. Thank you. I'll get back into it.

Bharat Madan: Got it, sir. Thank you. I will take that. Thank you.

Lakshmi Narayan: Got it, sir. Thank you. I will take that. Thank you.

Speaker #1: Thank you, sir. The next question is from the line of Vikram Dhamani from Dhamani Family Office. Please proceed with your question.

Operator 2: Thank you, sir. The next question is from the line of Vikrant Damani from Damani Family Office. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Vikrant Damani from Damani Family Office. Please proceed with your question.

Speaker #6: Hi. Good evening and audible.

Vikrant Damani: Hi. Good evening. Am I audible?

Speaker #7: Yes, we can hear you.

Bharat Madan: Yes, we can hear you.

Operator 2: Yes, sir.

Operator: Yes, sir.

Speaker #1: Yes, sir.

Speaker #6: Hi, thank you. Just a few questions. First is like this: I think we've done pretty well to gain market share and beat the market, especially when the southern market has grown the strongest.

Vikrant Damani: Hi. Thank you. Just a few questions. First is, I think we've done pretty well to gain our market shares and beat the market, especially when the southern market has grown the strongest. Can you all give us a sense of the market share that we had previously in the southern markets versus now?

Speaker #6: Can you all give us a sense of the market share that we had previously in the southern markets versus now?

Speaker #7: Yeah. Hi, Vikram. This is Neeraj Mehra Desai. So overall, in the South, we have gained close to about 0.6% in Q1. So our market share, from a pre-brand perspective, is around 6%.

Neeraj Mehra: Yeah. Hi, Vikrant. This is Neeraj Mehra. This side.

Vikrant Damani: Hi.

Neeraj Mehra: Overall, in south, we have gained close to about 0.6% in Q1. Our market share from a three-brand perspective is around 6%. We have gained about half a percentage point over there.

Speaker #7: It is around 6 percent, and we have gained about half a percentage point there.

Speaker #6: And do we expect this trajectory to continue in terms of gaining market share?

Vikrant Damani: Do we expect this trajectory to continue in terms of gaining market share?

Speaker #7: Yes, yes. It will, because of two primary reasons. One is in terms of new products—one is Shorya, the other one is the Digitrack series.

Neeraj Mehra: Yes. It will, because of the two primary reasons. One is in terms of the new products. One is Shaurya, the other one is the Digitrac series, and there is a third series, the four by four series, which we intend to launch over a period of time. What has actually happened is with the introduction of these kinds of products, we are able to now fill our white spaces in terms of network. Our channel strength is increasing every month. Both these aspects are actually helping us grow.

Speaker #7: And there is a third series, which we intend—the 4x4 series—which we intend to launch over a period of time. And also, what has actually happened is that with the introduction of these kinds of products, we are now able to fill our white spaces in terms of network.

Speaker #7: So, our channel spread is increasing every month. So, both these aspects are actually helping us grow.

Speaker #6: Excellent. Good to know. And regarding the finance business, how are we doing there? How much have we disbursed? What is the status?

Vikrant Damani: Excellent. Good to know. The finance business, how are we doing there? How much have we disbursed? What is the status?

Speaker #7: So, in captive finance, Vikram, we have now hit a penetration level of close to 10% to 12% in the first quarter. July, obviously, we did better.

Bharat Madan: In captive finance company, Vikram, we have now hit a penetration level of close to 10% to 12% in Q1.

Bharat Madan: July, obviously, we did better. We almost hit 15%+. Wherever we introduced the captive finance, which is in limited states right now, I think there were about 250 dealers which have been onboarded on this platform, where this is the penetration we are talking about. Gradually we are expanding now. Intend to open some of the southern state also this year to support these new product launches and grow the business there.

Speaker #7: We almost hit 15 percent plus. So, wherever we introduced that captive finance—which is at a limited stage right now—suddenly, there were over 250 dealers who have been onboarded on this platform.

Speaker #7: This is the penetration we're talking about, and gradually we're expanding now. So, we intend to open some of the southern states also this year to support these new product launches and grow the business there.

Speaker #6: Excellent. Are we seeing a better or an increased market share, or higher sales, wherever we've introduced the finance channel?

Vikrant Damani: Excellent. Are we seeing a better or increased market share of sales wherever we've introduced the finance channel?

Speaker #7: So that is the idea. Wherever we can approach, the market exists. Where we had difficulties, obviously, that's where the captive finance will help.

Bharat Madan: That is the idea. Wherever our weak and opportunity market exists, where we had difficulty, obviously that's where the captive finance will help. Obviously, in the stronger market, the financing is not an issue. For volume and scale perspective, we need to present across all segments. That's the only way you can actually gain. Our idea is, even if 20%, 25% of the volume, at least show a delta increase in the overall numbers. That should help in gaining market share.

Speaker #7: Obviously, in the stronger market, financing is not an issue. But from a volume and scale perspective, we need to be present across all segments. So that's the only way you can actually gain.

Speaker #7: But our idea again is, if 20–25 percent of the volume, at least, comes through a delta increase in the overall numbers, that should help in gaining market share.

Speaker #6: Excellent, thank you. As far as exports are concerned, we've spoken a little bit about the tractor sales. Can you throw some light on the other products—the spare parts and components? How are we doing so far this year, and what's the outlook for the rest of the year?

Vikrant Damani: Excellent. Thank you. As far as exports are concerned, we've spoken a little bit about the tractor sales. Can you throw some light on the other products, the spare parts, components? How are we doing so far this year, and what's the outlook for the rest of the year and maybe for FY28? If you can throw some light on that.

Speaker #6: And maybe for FY28, if you can throw some light on that.

Speaker #7: So this quarter was more or less a flat quarter, so not much really happened this quarter. But as we move forward, we expect that growth will happen.

Bharat Madan: This quarter was more or less flat quarter, not much really had happened this quarter. I think as we move forward, we expect the growth will happen. I think next year we are predicting very good growth in the component export. That should start showing the numbers. In another two years, I'll be looking at almost more than doubling the numbers for value terms. We will start seeing the result now the next two years' time there.

Speaker #7: I think next year we're expecting very good growth in the component export. So, that should start showing in the numbers in another two years. I'll be looking at almost more than doubling the numbers very soon.

Speaker #7: So, we will start seeing the results now in the next two years' timeframe.

Speaker #6: And when you said doubling, that's from our current base. And how much is that?

Vikrant Damani: When you said doubling that from our current base, how much is that?

Speaker #7: So last year, I think we did about 160, 170 gross in terms of overall numbers. So this year, so far, first quarter was more or less flat.

Bharat Madan: Last year we did about INR 160, 170 crores in terms of overall numbers. This year so far, Q1 was more or less flat. In the H2, we expect the recovery start happening.

Speaker #7: But in the second half, we expect the pickup will start happening.

Speaker #6: And then grow from there. Excellent. Thank you so much. And one last question: we have a cash surplus of almost ₹10,000 crore. Our capex requirements are nowhere sort of close to that.

Vikrant Damani: Go from there. Excellent. Thank you so much. One last question. We have cash surplus of almost INR 10,000 crores. Our CapEx requirements are nowhere sort of close to that, plus we are generating cash every year. Given the change in the buyback rules, could we expect something along those lines? I know your dividend payouts have done sort of realizing fees nicely. Anything to sort of watch out for there?

Speaker #6: Plus, we are generating cash every year. Given the change in the buyback rules, could we expect something along those lines? I know your dividend payouts have been sort of realizing fees nicely.

Speaker #6: Anything to sort of watch out for there?

Speaker #7: See, if you look at our overall holding structure—shareholding structure—the promoters collectively hold about 68 percent plus. And then there's some non-promoter, non-public shareholding, which is the IAP, etc.

Bharat Madan: See, if you look at our overall shareholding structure, the promoters collectively hold about 68% plus. Then there's some non-promoter, non-public shareholding, which is IAP, et cetera. It's about 70% is already there. The scope for further buyback is very limited.

Speaker #7: So, about 70 percent is already there, so the scope for further buyback is very limited. You can't go beyond 5 percent if you want to continue to be listed.

Vikrant Damani: Okay.

Vikrant Damani: You can't go beyond 5% if you are to continue to be listed. Yes, possibility definitely exists, but this is one of our capital allocation strategy going forward. Obviously the both promoters need to align to make it happen. With this new rules, obviously, this will help.

Speaker #7: So yes, the possibility definitely exists, but this is one of our capital allocation studies going forward. But obviously, both promoters need to align.

Speaker #7: To make it happen. So, with these new rules, obviously this will help, if it really comes to that. But definitely, it doesn't help the promoters.

Vikrant Damani: Yep.

Vikrant Damani: Definitely it comes to that, but definitely it doesn't help the promoters. It's good for the public.

Speaker #7: It's good for the public. So, if the promoters also need to participate in this, that will be an issue. But if the idea is to increase the promoter holding, then obviously, they need to align on this.

Vikrant Damani: Yep.

Bharat Madan: If the promoters also need to participate in this, that will be an issue. Idea is to increase the promoter holdings, then obviously they need to align on this.

Speaker #6: Excellent. All the best, and see you also. Thank you. Bye-bye.

Vikrant Damani: Excellent. All the best, and see you all soon. Thank you. Bye-bye.

Speaker #7: Thank you.

Bharat Madan: Thanks.

Speaker #2: Thank you, sir. The next question is from the line of Shagun from Anand Rathi. Please proceed with your question.

Operator 2: Thank you, sir. The next question is from the line of Shagun from Anand Rathi. Please proceed with your question.

Operator: Thank you, sir. The next question is from the line of Shagun from Anand Rathi. Please proceed with your question.

Speaker #4: Yeah. Hello. Am I audible?

[Company Representative] (Anand Rathi): Yeah. Hello, am I audible?

Speaker #7: Yes, yes.

Bharat Madan: Yes. Shagun, go ahead.

Speaker #2: Yes, ma'am.

[Company Representative] (Anand Rathi): Yes, ma'am. Yeah, thank you for this opportunity. Just wanted to talk about the demand. It's been quite good across the country, but it seems like in Gujarat and UP, significant pull has been due to subsidies. If you could just shed some light on what the demand would look like because of these subsidies, and if there's any numbers to how much could we expect the demand pull to be because of these subsidies?

Speaker #4: Yeah, thank you for the support. So, I just wanted to talk about the demand. It's been quite good across the country, but it seems like in Gujarat and UP, the significant pull has been due to subsidies.

Speaker #4: So if you could just shed some light on what the demand would look like because of the subsidies, and if there are any numbers as to how much we could expect the demand pull to be because of these subsidies.

Speaker #7: So, hi Shagun. Neeraj Desai again. So Shagun, the industry is growing pan-India, right? So yes, the subsidy impact has been there only in Gujarat.

Neeraj Mehra: Hi, Shagun. Neeraj this side again. Shagun, the industry is grown pan-India, right? Yes, the subsidy impact has been there only in Gujarat, and the subsidy impact is not there in UP. UP is an organic growth. Coming to Gujarat, in Gujarat, this was no special one-off subsidy. The government, every year, gives a subsidy. The only difference is in terms of timing and in terms of the quantum of units that they give. Yes, subsidy has actually helped in the growth of Gujarat market. In terms of UP, because I'm talking of these two states because you specifically mentioned these two states, UP is an organic growth and it's not to do anything with the subsidy.

Speaker #7: And the subsidy impact is not there in UP. UP is a organic growth. Now coming to Gujarat, so now this is in Gujarat, this was no special one-off subsidy.

Speaker #7: The government every year gives a subsidy, and again, so the only difference is in terms of timing and in terms of the quantum of units that they give.

Speaker #7: So yes, subsidy has actually helped in the growth of the Gujarat market. But in terms of UP—because I'm talking about these two states, since you specifically mentioned them.

Speaker #7: So, UP is an organic growth, and it's not to do anything with the subsidy.

Speaker #4: Okay. Second thing, you mentioned that the accumulator size since January has been about 6 percent. What was the price hike in Q1 exactly?

[Company Representative] (Anand Rathi): Okay. Second thing, you mentioned that the cumulative price hike since January has been about 6%. What was the price hike in Q1 exactly? If there is a number as to how much price hike would be there in the coming quarters, any specific number you could give?

Speaker #4: And is there a number for how much the price hike would be in the coming quarters? Any specific number you could give?

Speaker #7: So Shagun, the 6 percent price hike was mentioned by Mr. Bajaj for the construction equipment. We've not mentioned anything. Yes, Mr. Madan mentioned about a one and a half percent price hike in the tractors.

Neeraj Mehra: Shagun, the 6% price hike was mentioned by Mr. Bajaj, for the construction equipment. We've not mentioned anything yet.

[Company Representative] (Anand Rathi): Okay.

Neeraj Mehra: Mr. Manan mentioned about a one and a half percent price hike in the tractors in Q1, in April that we had taken. As we go forward, yes, there will be a price hike, but the quantum and the date we're yet to finalize.

Speaker #7: In Q1, in April, that we had taken. And as you go forward, yes, there will be a price hike. But the quantum and the date, we've yet to finalize.

Speaker #4: Okay, sir. That would be all from my side. Thank you.

[Company Representative] (Anand Rathi): Okay, sir. That would be all from my side. Thank you.

Speaker #7: Thank you.

Neeraj Mehra: Thank you.

Speaker #2: Thank you, ma'am. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time.

Operator 2: Thank you, ma'am. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Aniket from Motilal Oswal Financial Services Limited. Please proceed with your question.

Operator: Thank you, ma'am. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions may please press star and one at this time. The next question is from the line of Aniket from Motilal Oswal Financial Services Limited. Please proceed with your question.

Speaker #2: The next question is from the line of Aniket from Motilal Oswal Financial Services. Please proceed with your question.

Speaker #5: Hi. Thank you, management team. So you mentioned the fact that cost will further increase in Q2. Just wanted to understand how much of a price hike would be needed further to sort of offset this cost increase?

Aniket Matre: Hi. Thank you, management team. You mentioned the fact that cost will further increase in Q2. Just wanted to understand how much of a price hike would be needed further to sort of offset this cost increase.

Speaker #7: So, Aniket, first of all, we're not deciding the quantum of the price increase. And, firstly, this price increase will not compensate for the entire material cost increases.

Bharat Madan: Aniket, first of all, we've not decided the quantum of price increase, and price increase will not compensate for the entire material cost increases. The expectation is after three, four months when the situation stabilizes, the prices will come back. Whatever price will get passed on will be something which will be of permanent nature, but there will not be a rollback of that pricing piece. Obviously the pricing piece which will be taken will be something which will continue in future. That's why we're looking at a short-term phenomenon of three, four months. No one will take pricing piece only for three, four months and disturb the market.

Speaker #7: But the expectation is, after three to four months, when the situation stabilizes, the prices will come back. So whatever price we will get thereafter will be something which will be of a more permanent nature.

Speaker #7: But there will not be a rollback of that price increase. So, obviously, the price increase which will be taken will be something which will continue in the future.

Speaker #7: So that's why we're looking at a short-term phenomenon of three to four months. No one will take a price increase only for three or four months and disturb the market.

Speaker #7: So whatever we do, maybe some quantum will be there. But we don't know right now, obviously, the quantum which will be really caused on.

Bharat Madan: Whatever we do, maybe some quantum will be there, but we don't know right now what actually the quantum, which will be really passed on, but it's not going to cover the entire cost increase definitely.

Speaker #7: But it's not going to cover the entire cost increase, definitely.

Speaker #5: Sure, got that. And just could you talk about the inventory level situation with dealers right now, sir? Are we at normal levels, or how is the inventory situation for us and for the industry at the moment?

Aniket Matre: Sure about that. Just could you talk about the inventory level situation with dealers right now, sir? Are we at normal or how is the inventory situation for us and for the industry at the moment?

Speaker #7: So Aniket, it's difficult to comment on the industry. But from our channel perspective, we are relatively at a comfortable level. You can look at about 30 days of inventory with our dealers.

Neeraj Mehra: Again, difficult to comment on the industry, but from our channel perspective, we are relatively at a comfortable level. You can look at about a 30-day inventory with our dealers. As we go forward into the season, this might see a change.

Speaker #7: And as we go forward into the season, this might see a change.

Speaker #5: Sure. And incrementally, my sense is, I mean, we would look to sort of push stock into the system for the first day, right?

Aniket Matre: Sure. Incrementally, my sense is they would look to sort of push stock into the system for the festive, right?

Speaker #7: So I'll not say "push stock into the system." I'll articulate it as "build stock."

Bharat Madan: I'll not say push stock into the system. I'll articulate it as build stock.

Speaker #5: Sure, sure. Yeah, sure.

Aniket Matre: Sure. Yeah.

Speaker #7: Yeah. So, we build stock for the season because, as you see, agri seasons are very cyclic. So, you have very big lows also, and very, very big highs.

Bharat Madan: To build stock for the season because you see, agri seasons are very cyclic. You have very big lows also and very big highs. It's a crest and a trough kind of a situation. Yes, this time the season is a bit delayed. It actually starts from October. Yes, we will build stocks as we get closer to the season.

Speaker #7: So, it's a crest-and-trough kind of situation. So yes, this time the season is a bit delayed. It actually starts from October.

Speaker #7: But yes, we will build stocks as we get closer to the season.

Speaker #5: Sure. And sir, could you—are you related to the domestic industry outlook? Could you also help us understand how we should look at the exports outlook for this year and the next year?

Aniket Matre: Sure. Sir, you've alluded to the domestic industry outlook. Could you also help us understand how we look at exports outlook for this year and the next year, given that Q1 has not panned out well so far? How should we expect the balance fiscal at FY 2028 for us?

Speaker #5: Given that Q1 has not panned out well so far, how should we expect the balance fiscal results for FY28 to look for us?

Speaker #7: So, this year, FY27, we expect the export to be more or less flattish in nature. In Q1, it will be down, but we will be able to make it up in the balance three quarters.

Bharat Madan: This year, FY 2027, we expect the export to be more or less flattish in nature. Although Q1 has been down, but we will be able to make it up in the balance three quarters. The overall volumes will be flat in FY 2027, but FY 2028, we're looking at a good growth coming in. We expect the North American market may start opening up by that time. If we start exporting there, the numbers will do very well. We'll see good growth coming in over there.

Speaker #7: So, the overall volumes will be flat in FY27. But in FY28, we're looking at good growth coming in. We expect the North American market may start opening up by that time.

Speaker #7: And if we start exporting there, the numbers will do very well. We'll see good growth coming in over there.

Speaker #5: Fair enough. And any CapEx guidance for this year? Correct?

Aniket Matre: Fair enough. Any CapEx guidance for this year, Sunil?

Speaker #7: So this year, capex was divided into two categories. One is for the greenfield project, which is especially for land acquisition. So, we expect it to be about ₹450 to ₹500 crores, which will get spent on this land.

Bharat Madan: This year, CapEx was divided into 2 categories. One is for the greenfield project, especially for the land acquisition. We expect it'll be about INR 450 to 500 crores, which will get spent on this land. Land is already allotted now. We already made the payment there. Some development work will start happening now. We expect the groundbreaking for this plot to happen sometime this month. Normal CapEx will be somewhere around INR 350 to 400 crores. Overall, you can say about INR 850 to 900 crores total CapEx for this year, including greenfield investment which is lacking.

Speaker #7: So land is already allotted now. We have already made the payment there, so some development work will start happening now. We expect the groundbreaking for this plot to happen sometime this month.

Speaker #7: And the normal capex will be somewhere around ₹350 to ₹400 crores. So overall, you can say about ₹850 to ₹900 crores of capex for this year, including greenfield investment which will happen.

Speaker #5: And fair to assume it will remain similar for FY28 as well?

Aniket Matre: Fair to assume it will remain similar for FY28 as well?

Speaker #7: '28 will depend on the plan for greenfield. If we have to expedite construction, then maybe the spend will be more, because your overall capex for greenfield is ₹2,000 crore.

Bharat Madan: 28 will depend on the plan for greenfield. If we have expedite construction, then maybe the spend will be more because your overall CapEx for greenfield is INR 2,000 crores. Depending on the demand scenario, if the demand continues to be good, then probably we'll have to pre-book some of the CapEx on greenfield. It will be too early for us to comment right now on that, but normal CapEx will remain in this range of INR 350, INR 400 crores.

Speaker #7: So, depending on the demand scenario, if the demand continues to be good, then probably we'll have to pre-pone some of the capex on greenfield.

Speaker #7: It would be too early for us to comment on that right now. But normal capex will remain in the range of ₹350 to ₹400 crores.

Speaker #5: Sure. One final question, sir. On the captive financing bit, by when do we expect to cover all our dealer panels here?

Aniket Matre: Sure. Just one final question, sir. On the captive financing bit, by when do we expect to cover all our dealers pan-India?

Speaker #7: So maybe by FY28. But by FY27, we expect almost 40 to 50 percent of dealerships will get covered. And then by FY28, then we'll go panel there.

Bharat Madan: Maybe by FY28. By FY27, we expect almost 40% to 50% dealership will get covered. By FY28, then we'll go pan-India.

Speaker #5: Perfect. That's it from my end, sir. Thank you, and all the best.

Aniket Matre: Perfect. That's it from my end, sir. Thank you and all the best.

Speaker #7: Thank you.

Bharat Madan: Thank you.

Speaker #2: Thank you, sir. As there are no further questions from the participants, I now hand the conference over to Mr. Prateek, sir, for closing comments.

Operator 2: Thank you, sir. As there are no further questions from the participants, I now hand the conference over to Mr. Prateek, sir, for closing comments.

Operator: Thank you, sir. As there are no further questions from the participants, I now hand the conference over to Mr. Prateek, sir, for closing comments.

Speaker #3: Thank you, ladies and gentlemen, for being present on this call. For any feedback or queries, please feel free to write to us at investor.relation@escortsqubota.com.

Prateek Singhal: Thank you, ladies and gentlemen, for being present on this call. For any feedback or queries, please feel free to write in to us at investor.relation@escortskubota.com. Thank you very much and have a good evening.

Speaker #3: Thank you very much, and have a good evening.

Speaker #2: Thank you, sir. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.

Operator 2: Thank you, sir. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.

Operator: Thank you, sir. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.

Prateek Singhal: Thank you.

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