Q3 20/21

Jan 29, 2021

Ladies and gentlemen, good day, and welcome to the Tata Motors Q3 Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode. During the course of presentation, if any participant intends to ask questions, they can use the chat box option appearing at the bottom of the screen to submit their question to the speakers. All questions will be taken up at the end of the session. Please note that this conference is being recorded. I now hand over the conference to Mr. Prakash Pandey from Tata Motors. Thank you, and over to you, sir. Thank you, Rixa. Good evening, everyone. On behalf of Tata Motors, I warmly welcome you all for our Q3 FY 'twenty one results conference call. We have with us Mr. Gunther Gosech, MD and CEO, Tata Motors Mr. Sehre Bolor, CEO, Jaguar Land Rover Mr. P. V. Balaji, Group CFO, Tata Motors Mr. Adrian Waldal, CFO, Jaguar Land Rover mister Girish Wak, president, commercial vehicle business Tata Motors mister Salish Chandra, president, passenger vehicle and electric vehicle business Tata Motors and all our other colleagues from the investor relations team. Like always, we will start the session with quick a overview of the financial and business performance from the management followed by Q and A. Over to you, Balaji. Thanks, Prakash. Firstly, a warm welcome to all of you. Thanks for taking the time to attend this session. I hope all of you are safe and sound. And like last time, we will try and keep the presentation short, run through the key highlights of it and then have as much time as possible for the Q and A as is possible. Prakash, will you go to the next slide, the standard safe harbor statement go forward? It's been an intense period of activity for us despite COVID. And the key callouts I would call here is that the passenger vehicle business now reached in India reached 4,000,000 vehicles. That's hashtag we love you 4,000,000 plan. And then, of course, Nexon reached 150,000 vehicles. What you see out there is a launch of the legend, the Tata Safari is back. And this is the twin brother of the Harrier on the same Omega architecture that comes through. And in JLR, we're so proud to for the new Defender, which has been awarded the Top Gear car of the year and series of twenty one model year launches, which we can talk about as well. And on the commercial vehicle side, what you see is a picture of those 3,000 of the 6,000 vehicles that have been sold around the vehicles are quite a sight out there. Next slide. Overall performance, happy that we had a strong all round performance that came through where global wholesale dipped about 0.6% year on year, but still revenue went up 5.5% and PBT on a year on year basis up 209% to INR4200 crores almost and EBITDA at 14.8%, up five forty bps and EBIT at 6.4%, up four fifty bps and the second quarter, consecutive quarter of strong free cash automotive cash flows as well. With this, our EBITDA is now touching INR 11,200 crores and a free cash flow of almost INR 8,000 crores. So a strong performance coming through across the board. Next slide. Components of this growth, if I were to talk about in a minute, invariably coming in from volume and mix were against us because of the lower commercial vehicle sales on a proportionate basis as well as JLR decline. Transformation did help the overall revenue growth. From a profitability perspective, JLR, TML and all others also contributed. So it has been a consistent value creation happening across all parts of the business and resulting in the EBIT actually touching 6.4%. In line with our deleverage plan, a steady reduction in net automotive debt, now down to crores, another INR7000 crores. Overall debt profile is strong with the liquidity is well spread out. The promoters have exercised their warrants to for INR2600 crores yesterday and this has increased the voting shares of Taramo, the group, the promoters to 45.82%. This is not there the liquidity that you see in Taramo to stand alone, but that is a thing that has come up in Q4 as well. In JLR, a strong liquidity of $6,400,000,000 $4.5 in cash and $1,200,000,000 in RCF. That that bond issuance that we have done as well as the TTM and HS bond issuance that we did in November, all have gone through well and liquidity is adequate and well spread out. So let me hand this over to Adrian to take us through the JLR performance. Adrian, over to you. Balaji, good evening, everybody on the call. Okay. So the headlines are really strong, as you see there. The profit before tax was £439,000,000 EBIT percentage, 6.7%, best Q3 EBIT for JL for five years and free cash flow positive £562,000,000 the best Q3 cash flow in the history of Jaguar and Land Rover. It's important to look below the headlines, so please listen on. The patterns we see here are similar to the patterns that you saw actually last quarter. So retail is higher quarter over quarter but lower than the same quarter last year. Of course, revenue will therefore be the same. We'll talk about profitability and EBITDA income detail and also free cash flow. Next slide, please. So the headline, obviously, as I said, quarter over quarter improvement, a particularly good quarter again in China. You'll see in a moment when we break out regional sales year on year, up almost 20%. And we'll also talk about inventories maybe for the last time. Actually, you knew they grew disproportionately at the March. We are now made all the corrections we committed to make an impact. In many places, inventory is actually lower than ideal at this point. Profitability, I talked about. Charge plus two and what it does best. When we go into that slide, you should start to note that it's no longer just structural cost reductions, improvements and reductions in warranty costs in variable marketing also as well as manufacturing efficiencies starting to come through into the program. A fair point around CGMR, probably one of the disappointing elements in the quarter, we did lose money at CGMR as we trued up their year end position, particularly from the marketplace on variable marketing costs. And cash flow, as I said, is significantly strong, including investments which were lower than last year by just about £200,000,000 But this is now much closer to a normal quarterly level of investment you should expect to see going forward. Next slide, please. Okay. So these are the regional retail numbers. Again, you will see the same pattern as the total numbers in North America, in Europe and overseas, I. E, quarter over quarter growth, but not yet at last year levels. U. K, of course, has a particularly big month in September, which was in the Q2 data, and therefore, the year over year in The U. K. Is a better comparator. And then China, China, again, has grown not only quarter over quarter, but significantly versus the same quarter last year, 19% up versus Q3 last year. And that is actually impacting the results significantly, both on profitability, on margin and on cash. Next slide, please. And by nameplates, again, I'll just draw out the Defender from this page because most of the patterns I've talked about are repeated on Range Rover discovering the basis. It depends though we're now getting towards the normal size and scale quarter. I've told you in the past, about 5,000 a month is a good barometer for us. You can see we broke that level across quarter three. Margins are healthy as well. We've got a separate slide later on Defender to share more details. And then the Electrified Vehicles, 53% of the total in quarter three had some level of electrification. We've broken that down by the ICE, petrol, diesel and the MHF split and then particularly PHEV. And they're very strong quarter for us as we closed out some of the deals we had lined up in calendar year 2020. But note that we have proportions increasing now, particularly as we bring those twenty point five and '21 model year vehicles to the market. More about that in a few moments. Next slide, please. Inventory, all down to target levels or slightly below, whether it be retailer inventory, our owned inventory or days supply. So we've done the job we're committed to do, and we've held it level. You can see that within the quarter, and I do not anticipate this to substantially change either way going forward. Next slide, please. Okay. So our profitability in the quarter versus the same quarter last year. A number of things happening here. You've seen already air volumes were down substantially wholesale volumes. Of course, this would be like 27,000 units, so we lost $0.02 £5,000,000,000 off that, but a substantial swing in mix. And this mix swing happened for several reasons. Of course, the markets of China and North America are more open and more active than our U. K. And their European regions today, and they significantly sell our Range Rovers, our Range Rover Sport, our Defender Prote, I. E, the larger vehicles, the significantly profitable vehicles as well. So you see that within the mixed column. We're also seeing here a shift towards Land Rover from Jaguar. We talked about that as we've gone through the course of this year. And again, partially, that's because of the regional health of China and North America. That shift already exists in those two regions. China JV, as mentioned, was a disappointing quarter for the JV. There's work to do there, but we did have a really nice quarter on compliance. We talked about this last time. We did expect this quarter to be positive from a credit generation perspective, and we were able, as a result of that, to reduce our CO2 fine reserves, which we had at the September by £55,000,000 from £90,000,000 to £35,000,000 That's a one off within this 87 course. Net pricing, as we've started to constrain the supply to the marketplace for reasons we previously talked about and also for reasons I'll expand on a little later. VME is a symptom of supply and demand in many respects, and we're starting to see reduced supply means, reduced variable marketing also. The headline numbers were down to 5%. We haven't seen that level of VME for more than three years. The underlying is about 5.7%. Again, sub-six percent is a really good place for us to be at this stage of our evolution. And we did actually release some residual value reserves, mostly in North America, 36,000,000 on a year over year basis, and that would be the difference between the underlying and the headline numbers. Nice progress on warranty. Again, we picked this theme up for the last four to six quarters. We did say previously 4% was a good barometer line for us. You can see now we're quickly breaking through that line and the 3.2% underlying warranty number, particularly off the back of the 20 multiyear units. We talked this point before. We saw improvement in quality in twenty multiyear. It will be the best multiyear for at least three years for us as we're now making progress in terms of the consistency of the engineering within our vehicles and manufacturing efficiencies coming through. A handful in terms of commodity costs, but you would have seen yourself, precious metals, are actually increasing, and that obviously impacts our filler material. We have a number of those, which will be in the FX and commodities columns. We continue, of course, to rightsize our organization and only allocate spends that we believe are appropriate and year over year significant reductions in fixed marketing strategy, again, because we believe we've got our pipelines at a much better place and our order banks are healthier, you have to spend less money attracting people to buy the cars that you have. So this is a part of the quality of sale and the health of sales we've consistently talked about. And while it isn't just absolute numbers, modeling the quality of each sale, and as a result of which those costs of sale are falling exceptional costs, BR redundancy and some pension true ups as well. And if you look at the EBIT, look, it's 2.7 in quarter three last year, 6.7%. Those one offs, if we were to take those away at two to 2.5 points, the underlying here is closer to a 4% level. That was our target underlying for pre COVID. So we do actually think our operating performance is back to pre COVID levels, and we're benefiting from some of the adjustments from those two poor quarters in the first half of this calendar year. Next slide, please. Possibly the most dramatic slide actually, free cash flow, $562,000,000,000. As I've mentioned, that is a quarter three record for Jaguar Land Rover. Historically, our free cash flow has been significantly influenced by working capital movements, positive and negative. This was another positive quarter, as we said it would be, but it was less than half of the free cash flow. The bulk of it this time was actually underlying. Again, as a result of that very sweet model we had on China, on North America and a rich mix, it's starting to come through the cash problem as well. But cash profit after tax is just short of £1,000,000,000 It's a record for many years. We haven't had that end of Q3, and the investment level is 600,000,000 and some. That's why it goes to the far right hand side. So we're doing again what we said we would do, perhaps a little bit more dramatically than we indicated. A lot of that is to do with the mixture of sales we had in Q3 this quarter just gone. Next slide, please. Okay. So investment, a little higher this quarter, $675,000,000 as we started to lay down some of our investments for MLA. So this is probably at the higher level of a quarterly number you will see in recent times and in times coming at us. We're still on track for the guidance we gave you nine months ago of £2,500,000,000 investment this year. And this was £217,000,000 lower than last year, and the £200,000,000 cost and profit improvements plus this made about 400,000,000 plus improvement on the Charge plus program in quarter three. Next slide, if you want. All right. So this one is starting to shape. The reason why we put this page in place just like this, suddenly COVID got in the way, but you will start to see the consistency of the quarterly data. And when you look back twelve months, you'll start to see that the current quarters are better than previous ones. If I take you from the start of charge and you were to write up all of those numbers, we're net free cash positive since the start of the program despite the horrible events of COVID. So we're particularly proud of the work we're doing on our turnaround program impacting our overall cash management. So of course, this underpins our commitment to get to net debt positive over the next three years. We're starting to see the balance between gross debt and cash available to us, including the RCF in itself out, and we expect that to continue over the next quarter as well. Next slide, please. Okay. So a business update I'll quickly go into. We talked these a couple of times already. We've got a dramatic 21 modular series of product offerings. I mean, I think the industry has got used to a modular being minor change. This is dramatic change and not minor change. People should really understand these aren't just modulars. These are significant vehicle upgrades. And you can see the visuals we got here. Interior wise, there's a step change improvement. Drive wise, similarly, electrification wise with the PS being introduced to three of these vehicles and then heavy into the discovery. We have almost a complete new range of products. We're very, very proud of the work we've done over the last eighteen months, particularly through a COVID period, right? So this is the back end of hopefully, towards the back side of this COVID period, we've produced these vehicles in the marketplace. Please find a way to test drive. You will be wowed. Next slide, please. Defender. So you know we've been positive on Defender all year. We slightly changed the layout of it so we can continue with the good messages. The black line is retail. That continues to increase. So in December, we actually topped 6,000 retails for the first time. But I think even more dramatically, you now see the order bank of this vehicle approaching three months' worth of sales, more than 14,000 cars in the order bank as we've just started to release the Defender 90 availability. So I think it's reasonable to assume that 5,000 units a month is going to continue to be beaten on a month by month basis, in fact, probably lifted from that level. And the order bank situation over the next several months will be healthy. So very, very pleased with the Defender progress, Top Gear Car of the Year winner and European Car of the Year nominee. It will continue to get dramatic reports and feedback from people driving it, from reporters reporting on it. Super job by the team. Next slide, please. Okay. 12,013 vehicles are electrified. This is the next year we did towards the back end of quarter three. You can see them all there. That underpins the 53% of our sale retails in Q3 as some form of electrification, which also, of course, underpins the fact that we were significantly credit generating across the target we've been set by the different countries in quarter three. So it's super array of new products and electrification now hitting the marketplace. Next slide, please. Okay. And this is where it plays back in terms of financial data. So we still do end up with that twenty twenty full year problem. Pounds 90,000,000, as I said, we believe will fall to £35,000,000 when it's finally assessed by The U. K. European authorities. Everywhere else is green, and we expect to be substantially green going forward as well. In total last year across all of the regions, our compliance lines or our acquisition credits totaled around 60 some million pounds Now as this ebbs and flows across the regions, for those of you doing your modeling, I think it's reasonable to assume that across the planet, we will have a similar amount of tax credit CO2 credit, excuse me, acquisitions in 2021, but our intention is to continue to be compliant. And that's what we, of course, will be working towards. That's the gold medal. Next slide, please. Charge plus, so by the September, the first nine months, 2,200,000,000.0 was a statement. I think you can start to see the mirror of this within our quarterly results. As I mentioned earlier, particularly pleased, the cost and profits are no longer just structural cost of people and marketing support costs, manufacturing, warranty and B and B savings are starting to come through and will continue as we go beyond into quarter four and beyond that level. Warranty at 4%, stay there. We still hold that as a barometer, but I think it's reasonable to assume that our warranty cost of percentage of gross vehicle revenue will start with a 3% plus going forward into Q4 and beyond with the quality of those twenty one year vehicles substantially improved, as previously mentioned. We will hit the £2,500,000,000 guidance we set earlier in the year as well. That's pretty clear now, think. Next slide, please. Okay. So a deal did get done. As we all guessed, it was left pretty late, December 24. Some of us, yes, twenty ninth. So it was earlier than some of us feared, I suspect. We did get the deal mostly we were looking for. Clearly, the direct tariff imposition is not going to happen. You will know there are rules of origin to ensure that our vehicles do not fall subject to tariffs. So 55% of the content of ICE vehicles needs to be U. K, European, 40% EVs, and that 40% will grow up through 2027 in step changes, which will then be at the 55% level and then the twelve month period of phasing. So overwhelmingly in trade, this is the deal that we were looking for. The U. K. Government have also actually put in place their own free trade deals to mirror the deals which the EU had made and The U. K. Were previously benefited from. So mostly from a trade perspective, we pretty much ended up where we said we thought we would, but that actually did get done. It takes that significant potential risk away. From a compliance perspective, I talked that already in earlier slides. Operationally, we shouldn't bypass the operational challenges here. I know from a U. K. Government perspective, they would say Brexit means Brexit. Well, I think we're finding bureaucracy means bureaucracy, actually. There's a huge amount of customs declaration and paperwork required. Our teams are working flat out across end to end supply chain to make sure we can get the parts to our operations on time. It has been a bit lumpy in January. It probably will continue to be so in February. But over time, these processes will be embedded into what we do on a day to day basis. So I expect the operational frictions that we have seen, and you wouldn't have witnessed because they're not in the borders, we have actually seen we'll eliminate as we go through the course of this quarter. Next slide, please. And the more difficult one to assess, of course, is COVID. You know from a dealer perspective, we're locked down in The U. K. We're partially, stroke, significantly locked down in Europe, less so in North America, very little in China. This starts to explain by sales being stronger in China, of course, and also sales being stellar in North America and less so in U. K. And Europe, which starts to explain the mix pattern we had, which were disproportionately to those Land Rover biased, heavy and metal biased regions. From an operating perspective, our sites still do remain open. We've got an excellent record of health and safety, which we're very passionate about, the protection of the safety of our employees. Obviously, suppliers are going through these same challenges and do on a day to day, week to week basis suffer from probably not being able to attend work. So we expect this environment to continue through Q4, but we all hope and, of course, we all pray as well that this horrible virus actually becomes eliminated with the introduction of the vaccine as soon as possible. That, I know, is what we all pray for. Offices where people can work from home, of course, that's a safe place for them to be. Where they can't, then we make our offices safe as well. I myself actually work mostly from the office, and I feel very safe and secure here. And of course, we will always, always observe government guidance. We have lots of health and safety people, making sure that we are working to the highest standards both within our production facilities and our plants. And of course, we have registered NHS sites in our main facilities in Jaguar Land Rover as well. We're one of the biggest testers in the country, actually. In fact, I think we're now the biggest tester for COVID in The UK. And you know what? I'm really proud of that. And so are the management team. That is just an amazing response to these awful, awful events. Next slide, please. So the outlook, I expect Retail to be slightly higher than Q3 and Q4. We do expect a solid EBIT margin and also a positive cash flow in the quarter. Full year positive EBIT investments still, I'll say, the fifth time, less than £2,500,000,000 We've repeated that every quarter. And if we do in Q4 for cash, what we've done over the last two years, we'll be very, very close to that breakeven level. I mean the underlying, obviously, challenges here is whether dealers stay open and whether we can continue to safely build vehicles. And nobody can say both of those things were happening, but as we go through it will happen for sure, as we go through January, we're managing to navigate both of those challenges. Risks, COVID Brexit reduced, COVID still here. And of course, I think we are more compliant and have the product lineup over the next phase for the required electrification and emission. And I should call out, of course, our Investment Day, the JLR Investment Day, is on the February 27, and we've got some really exciting news for you on the February 27, which you'll probably want to ask about today. So Thierry, who's with me today, will obviously to say what he feels he should. Next slide, please, for me to ask for Richard. Many thanks. Thanks, Adrian. I think moving on to Tata Motors stand alone. Performance revenue at for wholesale growth of 80% and revenue growth of 35% with a PBT loss of about 600 crores, halving what it was in the last quarter on a sequential basis. EBITDA up five seventy bps at 6.8, and EBIT breakeven delivered with a 710 bps improvement here. And another quarter of strong free cash flow is coming through as well. With the next slide, turn and peel this a bit. Overall, volume and revenues, the sequential recovery is is strong. In the case of CV, the directory is led by medium and heavies and higher CV with a higher demand coming in from infrastructure, mining, and ecommerce. And in the case of passenger vehicles, that business is not there. Very, very strong sales momentum coming through with the new forever portfolio with the highest ever sales in the last thirty three quarters and the and the highest revenue in the history in the quarter. Profitability EBITDA at 6.8 is the highest we delivered in the last seven quarters. Net breakeven has been achieved. In the case of CV, the EBITDA at 8% is now touching its traditional levels of 11% that it's supposed to be there during this with significant improvement in margins and mix. And the case of CV, this is the highest EBITDA that we've had in the last ten years with EBITDA further improvement to 3.8%. And there is a particular point which I'll pick up in the when I come to the PV financials and cash we've talked about. On the cash savings, we had committed $6,000 of savings for the year. We've already delivered 5,100 and confident of delivering the remaining as well. Going ahead, where does the money come from? Slightly busy chart. I need to pause a bit to explain what's happening. Within the category, the mix is improving. So because, like, commercial vehicles, are selling more MNSCV and IMCV. So that's actually starting to help us. Within passenger vehicles, are selling more the Harrier and Nexon. But, actually, we are selling more passenger vehicles than commercial vehicles, and therefore, that's actually pulling us the other way around. So that's what is the dynamic that is playing out. Solid improvement in realizations as well as better wallet and pricing. These are the ones that are leading it and pretty tight control on fixed costs are the ones that are helping us improve this. So therefore, as the TV business starts coming back, you will start seeing this lifting even further. Go ahead. Free cash flows, again, very happy with the fact that the business is now funding itself. So the cash profit after tax is now higher than the investment that we are putting in place. And as far as working capital is concerned, I'm aware that a few of you have some worries on this. Cash conversion cycles are very steady. JLR is is neutral, and we are sitting at about minus fifteen days. That's what we need to get to. So, therefore, we are we are pretty comfortable on the working capital. And the reason that cash is coming out is that growth is coming back into this business. There's negative cash in the cycle of what's doing with cash coming through going forward. Investments are $5.47 crores for a year, lower than last year by $7.71 crores. Compared to the thousand 500 crores that we had originally put out, we are now up to the little bit of thousand 850 crores to manage the additional demand coming in from passenger vehicles. And therefore, that is something that we will dynamically manage going forward as well. Go ahead. Still the slide on the 6,000 versus 5,100, I expect on the investment side of for us to be slightly short of the 3,000. But on the working capital side, we'll exceed that, and cost and profits, we will deliver. So, therefore, the 6,000 will get comfortably met. Go ahead. On the commercial side, the market shares have been sequentially improving. We're a cumulative three months, six months, and nine months. That's what you see there. MNSCV is steady at about 50%. ILCV sharply improving as inventory levels started lifting. Small commercial rate is also improving. This does not include the almost the 3,900 vehicles that we sold to the under the state civil supplies corporation. That will come up in q four because the revenue recognition that's that is not recognized as revenue. Therefore, we have taken a lot of market share of it. Otherwise, it would have been sitting at almost 36%. This is what I sent. A series of about 35%. And therefore, this will continue to improve further as well. So commercial vehicles market share coming back as as the year is progressing. Next slide. On the financials, we have an important one. I'll talk a bit to explain what is happening. On the wholesale, we are down 8%, but on a year, retail, it looks like optically, it is down 23%. I draw your attention to the absolute number of ACG sold. You recollect we started the year with zero inventory. So therefore, it's broadly same. So there is whatever we are producing, we are able to put out there. We are able to retail the following month. So there's nothing happening as far as wholesale retail is concerned. We are still working our way through the channel inventory. As far as revenue is concerned, if you notice that the wholesale is down 8%, so revenue is up almost 21%. So just tells you there's a significant pickup in realization happening back to the basic price increase as well as lower VNEs that we are operating under. So even though volumes may not pick volumes may not pick up, the turnovers are not starting to move quite fast. And that's all goes well in terms of overall operating leverage going forward, and this is something for us to keep in mind. So we shouldn't get locked into just volume. There's a very different dynamic happening on revenues picking up faster than volume. On the EBITDA, we're now at 8%, touching the terms of the double digit, and therefore, that should as we go forward, we will start moving in the direction, and if it's also starting to improve. Next one. Let me hand it over to Girish to give a quick update on what's happening. Girish? Yeah. Thanks, Balaji. So let me speak about the market side first. So the industry here grew by more than 40% in q three or q two, whereas we had automotive actually grew by almost 50%, therefore, outpacing the industry growth. There is a broad based revival which is being seen if we look at the M and HCV. The revival is happening due to good growth in infrastructure projects, housing construction, mining, ecommerce. So across ECC, I think there is a good growth happening, and therefore, M and SCs for the first time, the sales reached almost 24%, 25%. Same case with intermediate and light commercial vehicles. I think e commerce and growth in manufacturing has been driving At the same time, we have also recently introduced vaccine transportation trucks, considering the requirement of the country. In small commercial vehicle and pickups, e commerce has been driving the demand. One has also seen urban demand coming back. In the first two quarters, it was more from the rural side. I think the urban demand is coming back, and consumption also seems to be going up. So that is something which is driving the small commercial vehicles. The CV passenger, I mean, buses and vans is something which still remains a concern. So while some employees have started going to the offices and a large part still working from home, schools not operating, SKUs running at a very low level of utilization, therefore leading to little demand in passenger. We've seen sequential market share growth across all the segments, as Balaji spoke, as we worked on supply constraints, which we have seen in Q1 and Q2. So most of those constraints have been behind us. But of course, as many of you know, there are few new constraints coming up, which I'll speak about. Therefore, on the back of this, we've seen the highest EBITDA margin in six quarters due to the continuous cost reduction efforts and also higher M and A resilience, which has therefore led to positive PBT in Q3. Going to the bright spots, I think one has seen improvement in most macro as well as some of the micro indicators that we look at, so whether it is the EV bill, fast track collection, container traffic, monthly diesel and petrol consumptions, or the freight rates, I think everywhere things are gradually going up, which is therefore improving. The fleet utilization is almost 90% to 100 of pre COVID levels, and the profitability of the fleet owners is also going up. The consumer sentiment index is something which we track internally every quarter. And the good thing is that the index is now trending up. The index has actually scraped the bottom in Q1. It improved in Q2. And in Q3, it has further improved. And the good thing within that is in sentiment index is is a multiplication of is a combination of both satisfaction in the current state and future expectation. So within that, I think the future expectations are even doing better. So this is also something which offers well for the industry. In terms of our BS VI product, I think we have been focusing a lot on back to back trials in the market with respect to our own BS VI, BS IV vehicles as well as competition vehicles, I think the purpose is to demonstrate to the customers the improvement in total cost of ownership and therefore, what is the payback for the higher price that they are paying for the DS6 technology. So I think this is also something which is helping us in terms of higher realization, which Balaji mentioned. Looking ahead, some of the challenges, I think since Q3, you started facing the semiconductor issue. It started with, you know, one supplier and then gradually a few more. But we are continuously tracking the situation. We are also talking directly with all the semiconductor manufacturers to see how we can manage the situation. So this does remain a very important agenda for us and going to drive the volumes in in this quarter. Increasing commodity prices is something which is which is an important thing which is happening, and I think something we have been tracking. We have been able to negate it through cost reduction as well as price increases. So we have taken price increase in Q3. We have also taken price increase in Q4. So this is something which is helping us to tackle this commodity price inflation. And finally, the CV passenger segment we just spoke about, I think the demand remains a concern. The industry has collapsed almost 80%, and schools yet to open up business and leisure travel is yet to normalize. So we are tracking this to see how this last segment within the commercial vehicles can come back. So this is summary of commercial vehicles. Back to you, Balaji. Thanks, Girish. Moving on to the next slide on passenger vehicles, a quick run up on the numbers. Draw our attention to the graph. We're against an industry decline of 15% in the year to date so far. We have grown 13% today, and that has ensured that our market share has stepped up strongly from 4.8, 10.8 holding it. Also, draw attention to the power and mix where EV, which is negligible, is now starting to make its presence fell to the 2% contribution of power. Nexon EV is now 6464% of the EV industry volumes in the last nine months. And vehicles, Tiago, Tigor, Alphor, Nexon, all of them in the top 10 in their respective segment. Harrier is a is a particular callout. It is now crossing 3,000 vehicles per month with a very strong growth rate compared to last year. And Alpro, of course, has been a blockbuster success for us and started. We just launched the iTurbo a week back and expecting continued strong performance on this front. I think the overall point on PV being the new forever range as well as the entire focus on the front end activation with Shreddish forward extensively two quarters back is is starting to pay results, and we will talk about this quite extensively in the Investor Day that's coming soon. Next slide. The financials, 85% growth here. Again, you'll notice there is very limited inventory there. We we sold 70,000 on our own from the wholesale of the 77 what retails. So actually, the retailer dealer inventories are are precariously low resulting in a huge lead time increase for orders. Revenue is touching 5,000 plus for the first time. EBITDA increasing substantially over last year. Now it's $7.80. And really draw your attention to what's happened to the EBIT line. We always talk on EBITDA, but as operating level is starting to kick in, you see that while we increase EBITDA by seven eighty bps, we are able to move the EBIT quite substantially by fourteen fourteen hundred bps. And therefore, the next target for this business is to now get to an EBIT breakeven and then, of course, a cash breakeven, and we are confident of pushing that through as well. And the good part is every line of the PN is now starting to work contribution mix, operating leverage, and, of course, the client ointment has come out the inflation, which we have to take it on the chin and manage it as well. Move forward. Shailesh, would you just wanna take this slide? Thank you, Balaji. Let me give a quick update on the business performance turnaround for PV, which is a result of actions taken broadly in three areas, demand generation, demand fulfillment and profitability improvement actions, starting with demand generation. The key actions actually were focused on strong, you know, strongly on retail, which was well supported and backed by a very synchronized demand supply plan. Channel partner margin structure and policies were revamped to enhance their profitability. And this was very important because this is what enabled the enhancement of working capital, which was extremely important for supporting growth, which was nearly doubling the growth. We just kept our share of voice high through marketing campaigns, and it continued in Q3 also to support the demand generation of our new forever product range and therefore we have been able to garner very strong bookings in quarter three also. We expect that in quarter four also the demand is going to remain strong for us particularly because our channel inventory is possibly the lowest ever in our history. And as I said that we have a very strong pipeline of bookings. Talking about demand fulfillment side, I think the demand generation could not have been supported if we did not do enough on the demand fulfillment side in the pandemic times. And I would say it was a unique situation for us where we were possibly the only player who was able to ramp up the production to twice what we were as an average in the last financial year. Particularly on the for petrol vehicle production, we increased more than two times as compared to the average of last financial year. And this has involved not only a lot of debottlenecking actions internally, but more so on the supplier side for many critical items where there was a very good partnering between Tata Motors and the suppliers to be working with capacities many a times without any CapEx and through multiple kinds of activities. So this has really helped us in debottlenecking fast. Yes. The challenge, as Girish also mentioned in CV, the semiconductor and steel availability will be a concern that we are taking several mitigation steps to see how we can minimize the impact of this global disruption that has, you know, happened. The last one on the profitability and cash improvement actions, efforts were actually put to optimize the product mix and variant mix, both actually because we already covered on the product mix, but there was an effort in terms of tweaking the pricing of the variance also within the product so that the movement of demand was in favor of more profitable product. And this had an impact, as you can see, on the profitability. Driving scale was one of the biggest motor for us because and we also add in parallel, we kept the fixed costs under control. And this was crucial to improve our EBITDA margin, and we have seen the result of that. There was a very systematic cost reduction initiative undertaken, which has involved nearly 600 employees who have been generating a very strong pipeline of ideas. In last quarter, we did more than 150 ideas in recent workshops, and we have actually done a very strong pipeline of ideas. So this is this in summary of the actions that we took on the PV side. Back to you, Balaji. Thanks, Shailesh. Next slide, please. Moving on to quickly to Tata Motors Finance. This business is now we made we made a PVT of INR 55 crores with an ROE of 7.3%. AUM increased to 41,000 crores during the quarter, and we did manage to at something about 10 to 10 crores out of that. And GNP is at 5.6% is stable, and NNP is at 4.2% marginally down. The real good news is the graph on the collection efficiency that you've seen before, sequentially improving, hit a 105% in December and continuing strong in January as well. And therefore, my collection will remain a focus area starting to get more reassured that the thing is starting to come back correctly, but we cannot take an eye off the ball. Excellent performance and cost to income ratios are now down to eight 32%, has fallen a long way over the last three, four years, and the business has pretty adequate liquidity at at its command. So business doing well, and business starting to move on track to an asset light. How do we agree to model? Next. So in conclusion, and I think we talked to the one I think the situation we expected to continue to improve the work despite the new lockdowns. I think the entire focus for all of us is on the various supply bottleneck, the function, Brexit related logistics matters. They're all causing a lot of irritation in the supply chain, and that's something we have we have seized off and working through it. The market situation needs to be managed everywhere. And despite all this, we intend to consolidate the gains that we have had in q three and finish the year strong, which all which will then place as well for the subsequent year ahead. That will be the broad message and the individual line items for each of them you already seen. For the next slide, please. Really keen to see you at the annual analyst meet, which will be there on the February 22 for Tata Motors and February 26 for JLR, and look forward to seeing you there and sharing our plans and more details there. Over to you, and then over to any questions that you may have. Thank you very much. We will now begin with a question and answer session. Participants on the webcast can use the chat box option appearing at the bottom of the screen to submit their questions to the speakers. Ladies and gentlemen, we will wait for a moment while the question to assembles. Okay. We have the first question that has come up from Yogesh Agarwal, HSBC. Great set of results. Thanks, Yogesh. Questions. Why was Discovery volume so weak in third quarter? Was it due to the upgrade? And number two, XE volumes are now almost negligible. Has it been discontinued now? Adrian, do you want to pick this up? Yes. Thanks, Balaji. I'd love to. So I think on Discovery, there's a few things to note on the Discovery project. One is the 21 module Discovery's dramatic refresh. And therefore, I would encourage you to think about Discovery volumes as we go through Q4 and into next year. Two, of course, is the share of production facility and production lines with the Defender, and you've seen how strong our volume demand is for Defender at the moment. It's outsold, so there are some imbalances we do across those product lines. And I think the third point to note is that there has been some cross shopping between Discovery and Defender over the first twelve months. So again, we'll see as Defender balances out whether that continues to impact Discovery plus 'twenty one modern year or not. XE volumes, they're mostly negligible now, okay? Of course, we've talked a lot to you previously about health of sale. House of sale and model isn't just to sell more cars, and model is to sell more profitable cars. We had a significant refresh again on XE into 'twenty one, midyear, which is just coming through into the marketplace. But the important thing to note here, we are also repositioning that nameplate in some key markets, like The U. K, where we've taken some price changes, and we've consolidated in North America XE and XEF just for the XEF going forward. So it's all a part of our strategy to put cars into the marketplace that customers have appetite for. We can make good solid returns on. And XE isn't one of the most profitable nameplates we have. Okay. Next question from Sonal Gupta, UBS. Can you share the best? Plus, we have volume share in U. K. And EU. The reason the question being asked is how much does this need to increase further to achieve the CY 'twenty one target? Second question, what portion of Okay. Sales are take this, then I'll read the next question after that. So go for it, Adrian. So around 30% PEF for U. K. And Europe in quarter three. And obviously, that was a substantial credit realization position. Going forward, you'll see going forward that four to 6% of total global demand is where we would expect to see in this quarter. It really has been slowed depending on regional changes. So actually, we expect p head proportions in Q4 to be higher than the normal quarter. Why? Because it's a strong selling month in quarter four, of course, March for The U. K, so we will sell more PHAB and MIPS in quarter four. It will level out a little bit as we go forward. The next one from Sonal again. What portion of JLR revenues are hedged for FY 'twenty two? And what's your hedging strategy for aluminium and other key commodities? And how much do you expect from the impact from the rising commodity prices in Q4? So our hedging differs by currency, of course. They're pro currencies, as you know, U. S. Dollar, RMB and euro, more than twothree of U. S. Dollar in RMB are likely hedged. It really depends on what the growth vehicle revenue is, of course, but that will be our expectation, slightly less on the euro, closer to 2.5%. Commodities, we hedge those twelve months and also broadly 40% of our commodity acquisitions. Aluminum on platinum, maybe a little bit higher next year, are already hedged in place, a little bit less on copper. Okay. To the next question from Chirag Elroy. CGLR and there's a few questions on CGLR down as well, so maybe Adrian, you want to wrap this all in one question. CGLR quarter on quarter ASPs have declined and margins are negative. Anything specific or anything else you want to talk about on the CGLR piece so that we can take all CGLR questions in one shot? Yes. Okay. So yes, this wasn't a good quarter for CGLR. It's definitely something we'll be working on more determinedly than we already have been. There was the end of the year position for them? We have got into a position. We've talked a lot about our supply lines for Jaguar Land Rover. We have got two months' worth of stock locally for local produced products, and it's starting to show itself as higher discounting. So we do need to pull back. We do need to pull back on the level of supply into the marketplace, which we will begin to do over the next few months. I would encourage you to assess the impact of that probably not in the next quarter, but in six months' time, where I'd expect us again to be back towards that breakeven position on C and J on lower volumes. We're looking for volumes to be 5,000, 5,005 units a month, and they are a little higher over the quarter three period. Of course, quarter three is the biggest adding quarter for Jaguar Land Rover in China and for the local business as well. I think we saw a little bit of discounting around the highest selling quarter also. So just in three to six weeks' time is what I would suggest. Got it. Another one on mix. I think we'll pick all the mix questions together. For JLR, volume contribution, Range Rover, Rover Sport and Defender and Wholesale, an all time high of 47%. How should one look at it from here on? Yes. That was about in terms of about a six to eight point swing from Jaguar to Land Rover across the quarter from what we would expect to be a normalized quarter. So 84% Land Rover, we would expect about 78%. And that swing was heavily as a result of China and North America being open for business a lot more than the other regions. So it's less about more sales in those regions, although China did very well. It's more about less sales in our historical U. K. And European regions. So that's really what's happening here. Volumes are lower than we would have expected on a pre COVID period, and they're dramatically impacting the regions of U. K. And Europe, the lower margin areas. So this will normalize out as we sell more cars. I would encourage you as we come out of quarter four, in 8% week's time, to look at the mixes and the absolute volumes in that quarter because I think Q4 is going to be closer to a normal quarter than the abnormal average of Q3. I think there'll be about a six point swing back to Jaguar's. So Land Rover's high 70% rather than mid 84%, and a lot of that will play itself out as a total portion lower Range Rover Sport and Defenders, which will be 40% low percent rather than 40% high percent would be my expectation. Okay. Again, another one on the one off, Adrian. So you mentioned some one offs in the EBIT of 6.7%. What are they? And can you quantify them? Yes. So there's some binary one offs in there. So the we talked about the compliance reserves, 55,000,000. We talked about the residual values, 25,000,000 or £36,000,000 year over year. So the binary went off to about 1.5 percentage points. It really then gets into that abnormal high level of risk and how you would evaluate that. Now my view is some of that is abnormal, and therefore, that totally influenced EBIT as well. So you should think underlying EBIT closer to 4%. However, quarter four is normally better than quarter three. So a comment on commodity inflation on Giles pickup. How much is visible in Q3 for India's JLR? Can you quantify it? We have called that out in this JLR sale about 19 odd million. And as far as India is concerned, the inflation has started now. And the bulk of the impact, you'll see it more in Q4 rather than Q3. Moving on to the next question from Amin Karani, CLSA. What are the retail trends in U. K. Currently and the expectation for the comps have been extended? Yes. We show you on the slide, Q3 versus last year was down 9%. That's been typical, the scale of the reduction we would have expected to have seen. Q4, as you know, in The U. K, is the biggest selling quarter, particularly biased to the biggest month in March. Normally speaking, therefore, we'd expect the higher quarterly volumes in The U. K. To be this quarter. Clearly, at the moment, are closed, and therefore, we're not selling at a normal level. If COVID actually starts to allow us to open dealers up for our biggest selling month in March, I would anticipate again quarter four to be the highest U. K. Retail of this year. Clearly, versus last year, we started to close down in March. So again, I'd expect year over year, quarter four, U. K. Retail to be higher than last year, quarter four. Thank you. I've got the next one from Vinay Singh, Morgan Stanley. Expective earnings, questions are on JLR. EBIT per unit is now almost a 15 quarter high. Could you share your thoughts on how you think of FY 'twenty, 'twenty three EBIT per unit? And the question is also coming later from all the movements Any views on FY 2223 CapEx and EBIT margin? That's an easy point to answer, which I'll pick up the first one. The hard one, I'll give it to Adrian. 2220, just give us a bit of time. The Investor Day is a better time to say that as we put our strategy also together along with And there, we'll also share the cost plans that we have. So the question more on the EBIT per unit, Adrian, how to think of this? How are you supposed to think about this? Yes. So think about the underlying level we talked about for quarter three. We're now back to where we were pre COVID. So I do have to say, depending on how COVID develops, of course, you'd expect me to say that. But if that increasingly becomes in control, I'd expect us to continue to trade at those pre COVID levels. So an underlying EBIT of around the 4% level ebbs and flows by quarter. As you know, Q1 tends to be a weak quarter for us. Q4, a stronger quarter. Don't forget, over the next twelve to eighteen months, we do have some significant product changes, and therefore, we'll give you better guidance quarter by quarter as we go forward. Okay. Given the accelerated regulatory regulatory timeline, maybe around the world, what are the impact on CapEx? We'll cover that in the next day. Moving to the next question coming from the the VSPF generation. It's PV. Can you please talk about cost reduction initiatives? What are the CV side turns around? How will we manage margins? How are you seeing Indian PV demand in FY 'twenty two? Shailesh, would you want to pick this up? Yes, Balaji. I'll take this up. So starting with the cost reduction program, you know, I mentioned, you know, while I was presenting my slide, that we have initiated a very structured program on cost reduction with very stressed targets, which involves nearly 600 employees in the company working in a very cross functional structure. And we have been organizing multiple workshops through which idea generations are done. And the key areas of focus would be value engineering, for example, or new variant creation, which leads to profitability improvement. Commercial reduction through should be cost approach. Then it could also include the ideas of import substitution, reduction in outbound logistics, and so on. So these are the initiatives which are going on, and very steep cost reduction targets have been taken. And you are already seeing the result of those initiatives, which have rectified in the last several months. So this is broadly as far as the cost reduction initiative is concerned. Talking about how we see the market as far as FY 'twenty two is concerned, all the estimates show that if the economy rebounds back and also given that the vaccine is there now, in the industry on the back of, you know, two years of decline, which has been pretty steep in in the last financial year and this financial year is also it is expected to be around 5% or so decline and 20% decline in the last year. It is expected to see a steep recovery is what is expected and some estimates hover around point 2,000,000 to 3,300,000.0 market in FY 'twenty two is what we anticipate. Thanks, Question on JLR from Shamsulur again. Can you talk about your electrification plans? More importantly, what is driving such faster adoption of EVs in your fleet? Is it driven by the supply push to minimize compliance cost? Or is it driven by subsidy? What's your take? Okay. Well, look, we talk a lot about the current nameplate plans, 12 out of 13 of them electrified in some form. Anything else, I think I'm simply going to say we've got a super Investor Day set up on the February 26. You have the pleasure to listen to our CEO, Thierry, and he will talk about this much more eloquently than I could. So please humor me and allow us to give you a really full outline of how we're thinking, how we're shaping our thoughts and what you should expect, but be excited. Okay. To see from Citi, cost reduction and other expenses in JLR, can you give some Yes. So this is where all the interesting stuff goes. So within there, other expenses, the reductions in engineering, the SME we called out earlier on the slide, reduction in all other expenses, warranties also find its way in there and the emissions compliance as well. So you will see the significant drop. Now I'll remind you, some of that's one off and a lot of that's underlying. The thesis we call that in the structural cost, think of mostly underlying. Our expectation is we will manage our business within those funding levels going forward. And you can see by the results, we're actually managing it pretty unsuccessfully. Okay. Question coming from Mark. Market share cost pillar, while we appreciate the focus, this is Morgan Stanley for JPX. Share cost at JPX. While you appreciate the profit focus, any thoughts on market share and how should we think of volume growth at JLR couple of years? And if someone else on the China market share loss as well, or how do we see market share in China? I can answer, if you wish, to the first part of this question concerning the semiconductor shortage. It's for the world car industry, it's a real issue. And it's a real issue in terms of allocation, in fact, at the moment because of the capacities of these big actors towards all sectors. As a matter of fact, we are not impacted at the moment because the team is doing a great job in order to get in touch with those Tier two, three and sometimes four suppliers compared to us in order to make it such that the allocations are positively happening to our company. And it's working mainly because we are so small compared to other actors that, in fact, our allocation doesn't change the picture for the other customers of these companies, and they understand that it may have a huge impact on to us. And with this type of approach, we have been very successful for now to be supplied. Thanks, Jerry. Question on market shares. Yes. Let me answer that one, Palaji. I'm sorry. You're breaking up a little bit, but I think I got the question. Look, you know those of you on the line will know me well, right? I've not been a great driver of market share in the last eighteen months. I talked about health of sales and quality of sales. So when we talk about market share, I'm a little bit looking at the results. However, you've asked the question, you've asked in particular to China. We told you that we were up significantly versus last quarter and previous year about 20%. When you look at our competitor data, I think BMW was up 10% over that same comparative period, Daimler 22%. So it would suggest our share is pretty much commensurate versus the growth that they are seeing as well, and therefore, the share isn't changing that much. Now that will be my expectations going forward as well. We do have aspirations to sell more vehicles, of course. We have aspirations to sell more vehicles in China, of course, but we don't have aspirations to challenge the quality of those sales simply for volume. And where that ultimately ends up on a share by share, quarter by quarter, we will explain as we go through the quarterly results in Q3. From Joseph George, IFL. GDP is appreciated sharply in the middle of the When will the negative impact of the same be visible in JLR P and L based on duration of the hedges? What's the way out to avoid the hit? Okay. Balaji, I can answer it. So it's Ben Burkhart, the Treasurer. So the answer is that it's already coming through our results. So for example, in this most recent quarter, operational exchange was unfavorable year on year of 46,000,000. It's just that, that was more than offset by hedges, 88,000,000 of gains on hedges in the period year on year. And that over coverage of it reflects the fact that we still had hedges last year that were heavily impacted by Brexit rates. So the better rates are why year over year are why we saw it overcovering it. Going forward, the reality is we'll continue to see an unfavorable effect on operational exchange on revenue, but we do hedge. And our hedging policy is to hedge up to seventy five percent one year out and then percentages thereafter. For example, on dollar power were hedged about 75% in FY 'twenty two and about 50% in FY 'twenty three. So that's how I answer the exchange question. From Rakesh Kumar, BNP Paribas. How do you see the play on margin? And the second we want to help her out there other than giving a broad of our our of our model. So with the first one, saying that as a I'm sorry, Balaji. You're really breaking up. I'm really getting Sorry. I didn't I'm I'm you hear me A little bit better now. I'm sorry, mate. Okay. Let me repeat slowly then. Back to the wrong question, otherwise. Yes. As residual value normalizes in the coming quarters, how do you see it bleeding out on the margin? Yeah. Don't don't forget what happens on residual values. It really shows itself, you know, in that in that year over year bridge. Right? We show itself very clearly what underlying is and what headline is, right? Now most of the residual value reserves we put in place actually progressively over last year, finally, with the COVID reserves that we saw at the March, most of those have now been unwind. What you should expect to see going forward, VME as a proportion of revenue closer to the underlying level 5% higher rather than the headline level 5%. That would be my expectation. But it particularly depends on what we sell, where we sell by region because there's no average average VME here, of course. The VME differs by nameplate and by region. But broadly, the underlying number is affected by going forward. Sorry. This is the operator here. Mister Balaji, can you hear us? I just I I have the yes, sir. You may go ahead. Yes. Let me take the next question. Okay. Can you hear me now better, sir? Is it okay? Yeah. This is better, Balaji. Okay. Let me hold the key. Apologies for that Question from Rajat, ICSP extension. For Jena, what are the sustainment and warranty level for the next one to I've gone on a journey with you on this, right? My first quarter, if you remember, I talked about 9% VME and 6% warranty, so 15% revenue. Twelve months later, we started to talk about 74%, 11% of revenue. I think it's reasonable to assume we expect it to be lower than 11% of revenue going forward. I think we had a really super quarter Q3, so it may not be hitting those levels every quarter, but it will be sub-eleven percent across the 2% for the foreseeable future. And the improvements we've been making on health of sale and on quality, you would expect over time that to be progressively improved beyond that point as well. So sub 11%, maybe even sub 10% from this point. Okay. Right. We talked about market share from Aditi and some group. Janesh, There's some accounting questions, Yunesh, if you can pick up with Prakash, where is the reversal of these clients accounted for and which line item we'll pick it up off line with Prakash. Other expenses, we've already talked about. CJLR realizations, we have talked about. Brexit is a new one. Brexit rules of origin criteria of 40% EV, is it including of MHAES and DHAES? So it doesn't include MHEVs. MHEVs go along with the ICE rules of origin rules, so 55% is the MHEVs piece. It does include PHEVs. So best PHEV go together, MHEFS and ICE go together. Good. Second, the R and D capitalization rate has been in the 62% to 64% range. Is this a new normal? Or will you revert back to the 70% range, which you had indicated earlier? With the 70% range in the minute, of course, we've still got we've still got some people in Q3, particularly in October who were out on furlough. And as a result of this, none of their costs were capitalized, so stay with 70% for the moment. But we have explained over the last eighteen months, and you've been very patient with us, I do agree that the new norm is below the 80%, down to the 70% level, and we would expect over time for it to decrease from that, but not yet. There's abnormality in the Q3 data still because of furlough. Thank you. So moving to the next question from Adityaam Kharia, HTS. As growth is expected to revive both in India and JLR, will we turn more aggressive towards our CapEx programs? I think if you India for instance, we had started the year with INR 1,500 crores of CapEx. We are now running more like INR $18.50 crores of CapEx. That's basically to take care of the delta demand that is coming through to cater to that and also ensuring that we are accelerating some of the product programs to continue delivering on the growth going forward. So we will not compromise on growth under any conditions. Adrian rightly quoted value creating growth, no debate about that. As far as CapEx therefore is concerned, it will be managed dynamically, but within the broad range that we had indicated. Because equally important for us is to ensure that we reduce our debt levels and go net debt free in the next three years. That is a hard constraint, and we will want to ensure that we get there. And whatever CapEx we're investing is anyway feeding growth, and therefore, that will come back as cash as well. So we are managing this dynamically. Question from Kapil Singh Nomura. Congrats on a great performance. Question for JLR. Mix headwind, will there be a mix headwind from here as we head into Q4? I think Adrian has talked extensively about the LR versus JS Plus, I'll skip this couple. Other expenses, he's again talked about that. Many OEMs are investing heavily into BEV and autonomous driving. Some of them are comfortable not generating free cash flows for the foreseeable future. What is JLR's plan and investment for these? Kiri, would you want to pick this up? I think the first element we should say is that all the evolution in terms of drivetrain is, of course, the cost of CapEx expenditure, which is already in our figures, first element. Second element, it is designed by construction, by the way our programs have been moved forward to generate the profits. It's a matter of business equation, and it is clear that it's not because we are moving towards electrification that suddenly we would reduce our ambition in terms of profitability by nameplate. That's the second point. The third point is that all the technologies which are being used in order to get electrified even towards the EV is moving forward extremely fast as well. And it is that the value chain is moving and it's being translated, and we are also making such that we take our churn from that new value chain so far we can get robust and continuously robust in our profit prospects. Thanks, Gary. And moving to the next question from Yogesh. Your PD business has been a real bright spot in India. Are there any market share targets for FY 'twenty two? And again, the standard question, what are the new launches that we will we've already explained what we are going to do. Shailesh, would you want to talk pick up the point on market share targets that you are internally planning? Yes, Balaji. So would say most specific number that I would but then definitely would like to think that, you know, we would be in double digit market share is what the immediate short term target would be. And this will be supported by, you know, the launch that we are gonna have Safari in the next month. And then we would in the same calendar year, this calendar year, we would have the launch of Hyundai. And these two would enable us to be in the double digit market share. And as I said that the market is expected to cross 3,000,000 next year, so this will be a very strong growth that we can expect next year also. What was the second question, Bhavan, you just looking No. There are three product launches. You have you have answered it. Okay. You have answered it. Yeah. Thanks, Kaleid. Question coming up for Girish, series. How should one look and this is from Chirag Shah Edelweiss. How should one look at the ability of the players to pass on the cost in the current cycle as this time cost inflation is coinciding with early stage recovery? Should it be relatively easy to pass on this cost? And also can you indicate the nature of the buyers, large fleet versus medium versus small fleet? Current demand should be more of a replacement demand. Is that the way we should look at it? Girish? Right. So thanks, Shilak. I think it's never easy to pass on the cost increases. But at the same time, generally, when I see that, the cost inflation, commodity inflation does happen when the CD cycle is on the upside. So we are quite, conversant with it. I think, as I said, we are addressing it We're maintaining our cost reduction efforts. And second is price increases in steps. So we took a price increase in q three. We've also taken a price increase in the beginning of q four. I think also what is more important is how do we communicate the value of the BS VI products and whatever higher investments we are doing with respect to BS IV, how fast is the payback. I think that's what we are focusing on, which is helping us to, therefore, let the customer digest this price increases. In terms of nature of buyers, always in an up cycle, it is the large fleet owners who come forward first, and that's what started happening in Q2. I think towards the end of Q3, we also started seeing the small fleet operators coming in. And I'm talking specifically about M and HCV. In LCDs and small commercial vehicles, one has always seen small fleet operators coming forward. In terms of the current demand, I don't think the replacement demand has come up yet because the BS VI vehicles are getting established in the market. The customers are still experiencing the benefit in terms of TCO. So they are watching both the technology as well as the TCO benefit. And once they see this happening more and more with more customers experiencing it, I think we will see replacement demand coming in, replacing the earlier DS3, DS4 vehicles will make economic concerns. Balaji, back to you. Thanks, Girish. Question from Kapil Singh. Before that, there's another one from Ronit Sadra from Systematics. Girish, back to you again. What's your view on HCV, ILCV and M and HCV demand outlook in FY 'twenty two? And secondly, are we also seeing an easing in the financing availability? So let me take the demand one first. I think we've seen that when the industry fell, it was, led more by M and HCV. So M and HCV has fallen the most. Of course, if you look at in the pandemic period, it is the passenger, that is the bus segment, which has fallen the most. And therefore, if you look at the next year, of course, there are a lot of uncertainties in terms of second wave or semiconductor supplies. But if we keep those aside, I think it is expected that when we see maximum demand upside on CV passenger, that is buses, but that's on a very, very small base. That will be then followed by MNSC. So MNSC, we also should see a fairly good recovery, followed by then ICV and small commercial vehicles. I think overall, it appears that the industry should be upwards of 700,000.0 to $750,000 during next year. In terms of financing availability, yes, there has been a significant improvement which has been happening gradually month over month, so in Q2, Q3, and we see good financing availability happening now. And apart from that, I think the financials have also come forward with very, very innovative and aggressive products considering the price increase, which has happened in VSA. So all this therefore is helping the customers also to come forward and buy the VSA. Balaji, back to you. Thanks, Girish. One more coming into you again. It's your time under the sun. You talked about a sentiment index, Girish. Where is it compared to what it was in twenty eighteen, nineteen? This is from couple of numbers. Yeah. Okay. Presentation, the sent you know, sentiment index more than the absolute value, it is the trend which is important. And across all the segments, we have seen that the trend is moving up, and we did scrape the bottom in Q1. After that, the sentiment index is going up. But if you insist on the absolute values, I think we are still behind the 2018, 2019, which is quite understandable. I mean, FY 2019 was our previous peak when we crossed $1,000,000 in volumes. I think this year, it is most likely that we will be touching around 0.55 or more than that, 550,000 kind of a volume. So in terms of overall volumes, we are still below FY 'nineteen. Malaji? Yes. Thanks, Girish. Question to me on Tata Motors Finance. What percentage of loan book has been restructured? A couple of things again. A couple two comments, I would say. One is to answer your question directly, 4% is broadly 4% is the book which has been restructured on MSME credit. Also another point, which I don't think I did it when I presented, the G and P that you're seeing is at 5.6% is the IFRS G and P or the India's GNPA. This is not in we have not taken any any benefit because of the Supreme Court ruling on GNPA. So this is the real GNPA that we are carrying in our books just for information which I missed when I presented. Question from Pramod's Incred Capital. Is the worst margin impact of EV already captured in the financials? Or will it continue to haunt for the coming quarters? I'll take India, and then, Adrian, if you could take JLR. In India, the EV margins the contribution margin that we are currently delivering is broadly in sync with the category contribution margin. So therefore, we do not see any drag because of EV. And as we start improving the contribution margins for the rest of the business, we will also be working on the EV side as well. Adrian, on the JLR side? Which because, no, we actually provided and supplied more BEVs and more PF units into the market in that quarter than we originally anticipated, so we got the benefit of reversing some of the costs that we had previously booked to the crude. Q4 is going to be a better sense of what normality is. Overall, I expect volumes to be higher and margins to be, on average, lower in quarter four. And a small piece of that, that normal quarter, a small piece of that will be increased U. K. And European volumes. And a part of that slight margin degradation is the cost of these units, which obviously we need to supply to the marketplace. So it's usually not a normal quarter. Q4 will be. But I will repeat what I said earlier. I expect us to continue to trade at pre COVID levels. And therefore, even with the mix in towards BEV and PHEV units, we've made significant changes in our business model and efficiency to offset the challenges and the costs of these compliances. And that's the right thing to do, and that's what we're committed to continue to do. Okay. I think we are now on the hour. So with this call it a day. Thanks all of you for the time that you've taken and the polling questions that you had. Feel free to reach out to us further in case you want us to anything specific. More than happy to chat with you on this. Once again, thanks a lot. Thanks for everybody for joining. Do stay safe. All the best, and look forward to catching up with you soon. Take care. Bye bye. Thank you. On behalf of Tata Motors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.