Q1 21/22

Jul 26, 2021

Ladies and gentlemen, good day and welcome to the Tata Motors Q1 Earnings Conference Call. As a reminder, all participant lines will be in listen only mode. During the course of the presentation, if any participant intends to ask All questions will be taken up at the end of the session. Please note that this conference is being recorded. I now hand the conference over to Ms. Neha Gavankar from Tata Motors. Thank you, and over to you, ma'am. Thank you, and good evening, everyone. On behalf of Tata Motors, I would like to welcome you all to our Q1 FY 2022 results conference call. Today, we have with us Mr. Thierry Bulure, CEO, Jaguar Land Rover Mr. Phoebe Balaji, Loop CFO, Tata Motors Mr. Adrian Mardell, CFO, Jaguar Land Rover Mr. Girish Swag, Executive Director, Tata Motors Mr. Shalish Chandra, President, Passenger and Electric Vehicle Business, Tata Motors and our colleagues from the Investor Relations team. We will start the session with a quick overview of the financial and business performance from management followed by Q and A. Over to you, sir, Mr. Balaji. Yes. Thanks, Eyal. Firstly, thanks, everybody, for joining this call. Hope all of your stations sound. And as customary, we'll probably spend about 30 minutes going through the deck test and pausing on the areas that you'd want to And there are open up for Q and A as we want. Moving on to the Safe Harbor statement, A period of intense activity for all of us and despite the pandemic and the key one that I will follow-up Here in Tata Motors is in the passenger vehicle side, the launch of the Hashtag Editions, of course, the Alpros, the Harrier and the Nexon. And in JLR, of course, reimagine program continues apace and we've lost a long wheelbase of Range Rover Evoque. And of course, the Red Fort AutoBank is at about 110,000 units, close to about Next slide, please. It's fair to say that this has been a challenging quarter for us, having seen a Solid recovery through the pandemic and coming out of the pandemic, but this quarter had to contend with Semiconductor shortages as well as the 2nd wave lockdowns in India and of course, issues of wave 2 elsewhere in the world as well. On a year on year basis, the numbers are flattening because of a very low base. So therefore, we have given also the Q4 numbers for context. And therefore, you would notice that growth of about 132%, obviously, lower than the quarter than Quarter revenue of about INR66,000 lower as compared to the INR 88,000 last quarter, about 107% on the year on year And the PBT before exceptional items of our 2,604 loss. EBITDA of 8.3% and EBITDA of minus 1 20% basically showing the operating deleverage coming in because of the volumes coming off on a quarter on quarter basis. Free cash flow outflow of about INR 18,000 crores, most of it coming out of working capital unwind because of the volumes coming off. Thanks, sir. Next please. We did see growth coming across all factors, be it volume mix, price, translation and other. And on a profitability basis, we did see This is an improvement in JLR, TMS and others, basically Tata Motors finance, which I'll talk about towards the end. And on net automotive debt basis, The underlying debt was about INR 34,000 crores last I mean, they ended last year. This quarter, it did deteriorate. Almost 15,000 of it is coming from working capital change as it's unwound. And the build is, of course, delivering about 37,700 crores. So that is the situation on net We do expect to see this return from second half on when this volumes pick up. Thanks, Patrick. Adrian, over to you. Good morning, everybody. Next slide, if you would, please. Okay. So these are our KPIs across the same information sets. Balaji just took you through for the group. To the points he made, we've included quarter 4 FY 2021. And I remind you, in our view, that was a really good representative quarter for us. Obviously, some slight concerns, which is why it's a really good comparison. Retail is actually in Q1, were higher than Q4. That is not a normal pattern for us. So it just reinforces the retail level we have in the marketplace. Today, pending supply issues is very strong. Obviously, our revenue is determined by wholesales, not retails. You can see Already an impact on revenue in Q1, which of course will continue into Q2 and beyond. Our loss actually of 100 and 10,000,000 0.9 percent negative. EBIT was slightly better than I was indicating 2 weeks ago on the calls, And I'll take you through the details of that. EBITDA 9%, obviously suppressed by the volume levels as well. And the free cash flow was the £1,000,000,000 outflow Within $4,000,000 the numbers which we announced on the 6th July. Next slide, please. Okay. So most of that I've already said. I think the thing that I didn't say was the order bank. Just a reminder, that's 110,000 units At the end of June, 29,000 defenders, so that product continues to be incredibly strongly received in the marketplace. And that number over the last 2 weeks has stayed about the same level. Next slide, please. So these are the quarter 1 retails, 124,000 units by major region. You can see a dramatic increase year on year. Of course, This time, quarter 1 last year was significantly impacted by the dealer closures and the isolation of our buying public Along with the rest of us, the regional splits pretty much as you would predict apart from China. China, of course, Returned to normal much sooner than other regions last year, but even in China, on a year over year basis, we were 14% higher. Overall, 68% higher at 124,500 units. Wholesales were more impacted. Of course, These will be impacted sooner as we only have a pipeline before we hand over to our dealers and importers. And the important point that wholesale increase of 73,000 units but dramatically lower than retails, normally The only difference should be CJLR, the joint venture, of course, where you would expect retails of about 15,000 units in this quarter. So you see a big fall off in wholesales. And I think the key point to take away from this slide, now our pipelines Under dealer stocks are falling, you will begin to see falls in retail sales from quarter 2. Next slide, please. So this is the slide on stocking levels. If I take you back 12 months, the blue line at the top there, That's the inventory that our retailers own, which of course then passed into customer hangs. It was high at the end of April, May last year, of course, as those retailers were closed. And we did deliberately take it down to Ideal levels, we talked to you about that on a number of occasions at quarter 2 and quarter 3 last year. You can see that with the dealer stocks around 60,000 units. They've fallen a lot since March. They've fallen from about 68,000 units down to about 42,000 units. And that enabled us to keep the retail as high in Q1. From that level, we would not be able to keep those retail as high in quarter 2. The unwholesale Stock brown line to stock that we own, obviously, they're on their way through to the dealers. That's down already to about 30,000 units. You can see it was lower When the plants were closed in April May last year, and again, that number can drop a little bit, but the pipeline is very, very thin. And therefore, going forward for the foreseeable future, production will be a better measure of both wholesale And retail levels with the exception of CJLR. Next slide, please. Okay. So retails by family in the quarter. Range Rover, of course, doing incredibly well, Even though those vehicles are 7 8 years old, the bigger ones are, obviously, the Velar is doing well also Up 56% quarter on quarter. The Defender entrants 12 months ago, obviously, that's why that number for Defender was very low in the previous year. We had a good 17,000 units. Remember, I talked to you for a while for it needed to be 5,000 retailers a month. We went through that in quarter 4, and that's continued in quarter 1. So the appeal for those products is very strong, Both Discovery and Jaguar were up year over year also for the reasons mentioned. Our electrification numbers were 66% In quarter 1, let me remind you that was 62% in Q4 and 53% last year. So more and more of our units actually have an electrified offering just as we said they would do. Next slide, please. So this is the bridge which takes us back to prior quarter profitability. We lost $413,000,000 in Q1 last year, obviously heavily impacted by COVID. I think a lot of this would be expected. Our volumes were restricted I bet 30% in the quarter just gone, but still significantly higher than the same quarter last year, up about 30 6,000 units, you can see a big number there for volume and mix. Mix is richer than the previous year. Good improvements in parts and accessories Well, within the quarter versus 12 months ago, but we did have restrictions on volumes in CGLR. Don't forget China wasn't impacted as much Last year as the rest of our regions and the emissions numbers needs calling out as well. We've got a compliant portfolio. We've explained that to you when we had free demand in terms of those PHEV units And free supply, at the end of last year, we reduced the fines and the reserves. However, The semiconductor reductions and supply reductions are impacting our ability to build compliant units in the quarter. And you see that within the order bank data, which I've shown you previously, the 110,000 units in the order bank, The biggest order banks in Europe and the UK and underpinning those orders are customer requirements for handover delivery of PHEVs. So when we can build those units and pass them over, we will have a compliant portfolio that was not the case in quarter 1 and will not be the case In our quarter 2, either other things highlights here VME. I've talked consistently about VME over the last 2 years, this time last year, we're at 7.5%. Some of that was one off incremental reserves Because of the marketplace being negatively impacted by COVID, we knew it would fall out of 4.7%, let me remind you in Q4, It's fallen again. The underlying data is just over 4%, but the actual reserve recorded data was 3.1% in the quarter. So that drop was more than we were anticipating, particularly towards the end of the quarter coming through, which improved our actual Quarter 1 reduced our quarter one losses. The warranty a bit better as we said. We are suffering actually some Added import duties as a result of the changes with our relationship with Europe, you see them there, and some commodity cost increases within our material costs you But the big year over year increase is actually in the category we talk as structural costs. A lot of that is furlough monies, which we Took from governments around the world 12 months ago, that was, of course, was a job retention policy, and it served us Incredibly well over that period. Unfortunately, we weren't able to retain all of our workforce through the reimagine changes, That definitely helped us to protect jobs over the critical period last year. And as we said, let me remind you, almost 20,000 people home last year. Of course, the amount of cost spend, overhead spend, fixed marketing spend was much, much lower and suppressed. You are seeing it increasing, not back to normal levels actually, but much higher than previous years. The other thing to note here is our engineering capitalization Continues to be lower, just over 40% in the quarter. And again, we've explained that to you before. The policy was changed in FY 2018 and its and those changes will ebb and flow Depending on where we are on each of the product cycles, what's happened here is we've completed Defender, we've completed 21 Modular, and those engineers are moving over to the new architectures, which I've not reached the capitalization point yet because of the maturity of the product. All of that is exactly as we've explained to you In previous years, operating exchange, bad news because sterling appreciation offset by the hedges we have in place. That's $110,000,000 loss, 0.9%. Underlying the breakeven point here is about 90,000 units. So our EBIT underlying is lower than we're indicating a couple of months or so ago, and that's the start of us just to optimize and maximize this position In the circumstances, this was a really good result on cash. So this is our traditional walk. The two numbers in the middle of the cash profit after tax And the investments that we look to balance out and obviously overachieve on, we were within $74,000,000 of doing that On just 84,000 units, which tells me our underlying cash breakeven was just under 90,000 units. And we've said our intention was 100,000 units in the investor presentations in February and also and the May year end presentation. So again, we're starting to optimize our position in difficult circumstances. Overwhelmingly, the cash loss in the quarter was Working capital, you can see it there. We're not building cars and therefore our payables at the end of June were much lower. And you also know that will reverse The point we start building more cash. It's exactly the pattern you saw last year, dollars 1,500,000,000 outflow last year, And look, the working capital number was €1,100,000,000 Let me remind you, last year, that €1,100,000,000 Reversed itself within $25,000,000 on a full year basis. So once we're able to build more cars, that working capital number We'll begin to reverse that as a certainty. Next slide, please. Investment our investment numbers, dollars 2,500,000,000 full year. I've said to you ebb and flow around $600,000,000 a quarter. This was slightly under the $600,000,000 and I expect that to be the case in Q2 as well. And then investments to grow in Q3 and Q4 As we start to bring our new MLA high products Range Rovers, first of all, to the marketplace And the finalization in the second half of the year. Next slide, if you would, please. Okay. So the business update, thank you. So obviously, a big focus for this organization It's reimagine under the transformation program of refocus. This program is much, much more complete and holistic And the fantastic charge program we had, you see the pillars there. It really is engaging a lot more people than we engaged During the turnaround programs across the 6 pillars with the 3 enablers, and the really exciting news here We're starting to see value generation and value creation, particularly in pillar's 56, $150,000,000 we recorded in the quarter. If you were to go I won't take you back to the previous slide, but if you would go back to the previous slide, you will note What we're recording here is less than the value we saw in quarter 1. So we've attempted to subdivide the quarter between What happened because of shortage and what happened because of the power of the program, if I were to add it up, everything you can go back and record In the bridge, there's almost $350,000,000 actually worth of reductions quarter on quarter over the previous year. We're recognizing $150,000,000 of those for the refocus program. This is a really great strong super start for this program. This is just the 1st full quarter, of course, of Refocus. We also saw improvements on quality, down to 3.3% drove an $18,000,000 improvement, and we're starting to see improvements on Pillar 3. Although in a volume constrained environment, The absolute savings on material cost, of course, are going to be lower than in a free supply environment. So The size of that number will partly be determined by the speed of recovery of volume and supply in half two. Got a great first full quarter to the program. And let me assure you, momentum is building. Momentum on this program is Absolutely, building. Next slide, please. Okay. So the big news this quarter for us Semiconductors, we covered a lot of that in our announcements on the 6th July and also in the special meeting we had With a number of you on the 7th July, this is the page we use. The headlines are there's strong demand In quarter 1, for retail, so I'll take you through that. Wholesales were up versus previous year, but importantly, down 27% From the level we would have expected to have passed over to the dealers and those orders would have expected So it's about 30,000 units. Quarter 2 will be a worse performance supply Quarter 1, a lot of the quarter one happened towards the end of the quarter, including new news at the end of June, as we talked about. And we can see July production has been impacted quite significantly. August is better than July. September is better than August, so we are starting to see the end of the quarter better than the start. Our volume wholesale prediction in the It's slightly higher than I told you. Back in 2 weeks ago, I said it was 60,000 units. We think we're slightly higher around 65,000. But broadly in that $60,000 to $65,000 range, I also indicated that point in time. The problem won't be fixed in quarter 2. We are taking a number of actions. I talked you through all of those 2 weeks ago. We have a mission control center, Which is a permanent center of activity and energy, which we meet at the board level twice a week. There really has been a rigorous engagement, right led from the front by Thierry, who actually today, Thierry is on the road. He is listening into the call. But when we get into the Q and A, just be aware that he's in a different location to myself. So There might be a requirement for a delayed pass over for him to make appropriate comments. But that supply engagement is obviously at the first your level where our contractual points are, but going much beyond end to end pipeline right back to semiconductor manufacturers we're fully engaged with. So we have true visibility and more importantly, they have true visibility of our requirements and there's no filtering that down through the end to end pipeline. We will begin to prioritize the vehicles that we produce. At the moment, we have 110,000 orders. And therefore, Obviously, we want to make sure we do the right thing and provide those cars to customers as soon as we can. But the new orders we take will start to reprioritize So higher derivatives within nameplate, if we have to choose between nameplate, more valuable nameplates, of course. Well, our big drive here is to increase the allocation of supply to Jaguar and Land Rover All plants. And we believe we're starting to make traction and progress on that, although only a small amount is So the outlook, Paige, I know this is a difficult one because you want us to say more, but we're not in the habit of misleading you. We have added more information in 2 weeks ago. So the revenue of those 65,000 wholesales will be about £3,700,000,000 I told you already our breakeven point in Q1 was about $90,000 It might be slightly lower than that in Q2, Well, obviously, dollars 65,000 will be negative EBIT margin. Our investment is $2,500,000,000 We do not plan To delay investments, we're absolutely full speed ahead on introducing those new products to the marketplace. And Free cash flow will be up to $1,000,000,000 outflow in Q2. The actual status is slightly lower than that. But for the moment, if you hold that number, If things were to significantly change, we bring that information for you. Off to revenue is difficult because we're not clear yet on Supply, but it will be determined by supply because those customers are waiting for cars. We do, however, expect Quarter 3 to be better than quarter 2 and quarter 4 to be better than quarter 3. So it's reasonable to assume as we start to reduce the break Once again, which we will do in half 2 towards the 80,000 unit level, we'll be positive EBIT in the second half and we'll also be free cash Flow positive at the point we build more units because obviously that working capital piece will reverse very, very quickly And our underlying breakeven points now being brought down to a level where we're not that far away from September's activity To actually be in cash positive territory, no change in guidance for FY 'twenty four or FY 'twenty six. Why are we super confident about FY 'twenty four? So the reason on the right hand side, this was our underlying data in half to FY 'twenty one, 6% EBIT. Optical was just over 7% as you would know. So we feel very confident if you draw a line between H2 Let me probably step in here because obviously, we're having a problem there, Alekisha. The numbers of underlying numbers of H2 Shuv gives us the confidence that from an EBIT margin perspective, we are clocking at the right level. So as and when the current semiconductor issue gets resolved, Things are improving. We do expect to see an improvement in EBIT margin and that's something that should play through in our numbers. And of course, from a cash flow perspective as well, this is a big one there, Because in the second half year, we did almost $1,600,000,000 of cash. And that will also feed through in our as the years progress from second half of this quarter onwards. So let's then move on to Tata Motors. Next slide please. Overall, the revenue of about 11,000 tonnes, we obviously got impacted. The recovery for the last 3 quarters is coming through quite nicely. Did face a stumble when it because of the wave 2 lockdowns that we had. And therefore, that resulted in full sales coming off from 195,000 units about 114,000 units, so a sharp drop there. And that's translated into revenues also coming off from INR 20,000 crores to about INR 11,000 crores. Year on year I won't cover that. And overall, EBIT margin of 1 point sorry, EBITDA margin of 1.8% That was a 7.8% period earlier and free cash flows of INR 8,000 crores negative almost entirely explained by working capital and mine. Next slide please. The key callouts as far as the volume industry, we'll talk about a little bit on market shares in a while And passenger vehicles, Azith. The highlight stand out for us is EV's order book of about 53,000 units going strong. EV, of course, really rocketing now. Penetration at 3% of the portfolio used to be 0.2% only 2 years back And highest ever quarterly sales of 1700 units and moving on stronger. Profitability, The CD EBITDA was breakeven with the volumes being impacted, hence operating leverage as well as inflation playing on there. And on PV, the 4.1% is a continuing progress that we see. Cash flow is almost entirely explained by working capital with a very strong liquid just by combination of gross. Just a waterfall here compared to last year, the volumes recovering sharply and where you could see deterioration as a variable first This is commodity inflation, particularly steel being created as well as some of the precious metals causing grease. On fixed costs, This is a lockdown, unlike last time. So we had kept all the guns blazing. We had IPL, therefore SMU investments continued and the investments in DNA did play out there. So we have not stopped any action here and it also resulted in inventory is picking up, But that was needed to ensure that we service demand subsequently. So this is a conscious choice. So this time of the business agility plan and hence these things were kept going unlike last time. Next slide please. Cash flow is very similar to the JLR story, Profit up, tax and investment, we just add the 2 broadly there. And therefore, even at these low levels of volumes, this business is now in Great, Kevin, which is a good news. And everything explained as working capital and combination of Cable, trade receivables and inventories, all of them going the other way. And inventories, in particular, we have consciously built up, 1st of all, to ensure that the semiconductor, whatever is coming our way, we are manufacturing cars, because you know demand is going to come and payables just to absolute volumes being low. Thanks, Aitik. Investment spending on track around 3,000 to 3,000 I am proposing that we will actually land somewhere in that range more towards the lower end. We will see where we land, but on track. Next slide. Moving on to the commercial vehicle business, the market share is a key measure there. M and S Series has been doing very well for us. So now the 3rd year in a row, things like market shares have been increasing and this quarter we picked it up further to about 62.7%. And we are quite happy with the way this category has been progressing for us. And ILCVs as well, we have now started to increase market shares and we're consistently picking that up. Another good one that's coming through. Our challenge has been small commercial vehicles. Draw your attention to the graph on the right hand side top corner, Where we look at this SCV salience, it used to be only about 50% of the business, now almost at 65% of the business, given the current economic And there when you're losing shares and also at a lower level, it has impacted the overall market share at 40.5%. We don't like the shift And, Nishu, I'm sorry, we are ensuring action value based on that. We Last year, we did end at almost similar to the previous year. And at the same time this year, we would want to really go ahead of that. So what's it under way on that particular front? Buses remain the sector where the tailings has almost evaporated and We hope and praise and come second half of the sales, buses will come back again as soon starts opening. Next slide please. Commercial vehicle, the key call out between retail and wholesale broadly the same and at domestic level, the inventories are quite there And revenue is obviously impacted by the fall in the overall market that we see. Hence, EBITDA breakeven, which is disappointing because This was very comfortably coasting towards the double digit EBITDA margin. So combination of lower volumes and commodity inflation with cost brief and hopefully this will start From this quarter onwards, EBIT, of course, is just a factor of operating leverage. Let me hand over to Girish to comment on the business decision and client. Girish, over to you. Thank you, Balaji, and good evening, everyone. So, Q1 of this financial year was Going up and down, so we started the month of April with the 2nd wave of COVID and the volumes actually dropped By 50% over the month of March and then further in the month of May, there was another drop of 50%. So, from March to May, the volumes actually dropped by almost 75%. But the good thing is in the month of June, Volume started picking up especially in the 2nd fortnight and one saw almost 94% growth over May, which Means that volumes in June came back to April level. At an overall level, Q1 volumes were 56% lower than Q4, But at a very good level as compared to the previous Q1 of FY 2021 when we had almost a complete lockdown. So, localized lockdowns Across the country, have actually helped the economy to continue and we were able to sell volumes almost 4.5 times of last Q1. As Balaji mentioned, I think M and SCV and ILCV market share momentum has continued and which augurs well for us. I think the Focus now is on SCV and pickups as Balaji mentioned. At an overall level, I think the freight has started improving towards the 2nd fortnight of June with the EVA bills increasing, diesel consumption increasing, Our internal metric of workshop job parts also recovering. As far as freight rates Our concern, I think they are also improving from the low that they made in the month of May. In terms of Commodity inflation, I think this is something which we keep on fighting. And as a result of this, we had to take 2 back to back price increases, 2.5% in April and almost up to 2.5% even on 1st July. This is in addition to the cost reduction efforts that we started Accelerating further basis, the steel inflation and also some inflation in the precious metals. With the increasing prices of Diesel and gasoline, one has also seen an increase in penetration of CNG. So CNG penetration is not Limited to a few pockets in the country with the CNG infrastructure also improving. So, many areas in the country, the penetration of CNG is increasing. Because of this profitability of the transporters under stress, one saw the Sentiment index of Transporter is also going down in Q1. And this Transporter sentiment index is made up of 2 parts. 1 is Satisfaction with the current conditions and the second one is expectations from the future. The satisfaction with the current conditions are actually negative, which means the transporters were completely dissatisfied with the current state in Q1. But the good power plant there was, they were optimistic about the future going ahead in Q2 and H2. Government's infrastructure thrust continues and this is driving the demand in tippers and also in Segments like cement, steel and minerals, we also see the e commerce continuing to do well, which is for both hub to hub as well as last In terms of availability of credit, I think financial collection ratios have started to improve towards the end of Q2. And after a good fall in April May, and this has also therefore led to increase in availability of credit and convergence in the month of June. Going ahead, I think with the diesel prices as well as where we are on the freight rates, the transport profitability It's still a concern. It is still below the levels of March, but the freight rates are continuously increasing with The demand increasing and the demand supply balance being restored. So, one therefore looks at The transporters profitability improving as we go ahead. Semiconductor availability continues to be a focus area. So, we We are managing it from a war room perspective and we are looking at almost every component where semiconductor goes in And tracking it on daily, weekly, fortnightly, monthly basis depending upon how important That part is or what is the inventory with us. So, we have taken multiple steps here like engaging directly with the semiconductor suppliers, Spot buying of semiconductors from the open market, we are also developing alternate sources to ensure that at least Over the later half of the year, we are in a better position. We have also built inventory of critical semiconductor based parts in Q1 when the demand had gone down. And also, apparently, we are looking at design interventions to optimize the semiconductor consumption or the footprint in the overall vehicle. So, these are all the steps which have been taken and therefore in Q1 where we were is better, of course, the demand had also gone down. And with the current visibility of demand for Q2, we seem to be placed better, but as I said, this is something which is being tracked almost on a daily basis. Coming to the next challenge, inflationary pressure, especially on steel and precious materials continued and Also on steel in commercial vehicle and therefore we are having a significant drive towards cost reduction by repurposing A lot of our teams to ensure that we are able to pull out whatever amount of steel consumption is possible and therefore reduce the cost. Finally, I think the CV passenger area buses still continue to have a very, very muted demand. There has been a good pull to some extent in ambulances, but otherwise all other buses continue to do very, very low. The only green shoot there is the manufacturing sector. So, employee transportation for manufacturing sector seems to be doing well. But all other segments, whether it is employee transportation for IT sectors, school buses, even intercity transport is something which It remains muted. But I think gradually the things are improving as we had also seen last year that the Q4 was comparatively better. Same thing, we expect that going ahead, the bus demand should start coming back to some semblance. So that's So in nutshell, summary for CV business. Balaji, back to you. Thanks, Girish. Going on to passenger vehicles, Market share of 10%, 9 year high. And the penetration of EV is now starting to touch 3% for this quarter. And Even this is where I think we are now seeing all our segments starting to do well, particularly market shares. The midsize SUV segment was up almost 800 bps, The strong response coming from Nixxon, Halyor and the Safari. And what we are noticing on the EV side is I just said a little over to our quarterly sales of the portfolio of 1500 units and market share now staying at 77% for this quarter. So good momentum building up on the customer base business and continues that way. Next slide, please. On the financials, draw your attention to the wholesale and retail number. Wholesale is higher than retail, a conscious Choi, because dealer inventory levels have dropped precipitously to just about 6 days and we have now built it back to about 17 days compared to Industry is continuing to be between 30 to 45 days, depending on the clear. So we intend to keep it around these levels at this point in time. There's still a waitlist waiting And if you'd like to obviously ensure that doesn't go too much out of control. And profitability, of course, continues to do well at 4.1 Despite the low volumes, this business is very much on a turnaround and should improve performance even further as we go ahead. Thanks, Jagdeep. Shailesh, over to you. Thank you, Balaji. As Balaji has already spoken about the last quarter performance, I'll share with you the actions that we are planning for in Q2 as we witnessed progressive recovery in July and Expect the quarter to be reasonably better than the same quarter that we had seen last year and also versus Q1 of this financial year. So on the demand generation side, we have identified certain micro markets where we are systematically working on focused levers to drive growth And also working on certain supporting interventions to recover in product segments and geographies which are which were impacted in Q1. And as you know, we have the upcoming festive season and to make the most out of it, we have planned for festive campaigns and also Our presence will be felt in IPL, which restarts in September to provide better visibility to our products P. Vijay Kumar:] Living to the philosophy of new forever, We have been and will continue to launch exciting product interventions. The hashtag DARC What we launched this month is one such example, I would say. And this is getting excellent response. So there are going to be more such interventions in this quarter also. Network is key to our growth and we are systematically strengthening it in terms of reach, in terms of Dealer customer experience processes and also channel health. So these are the actions that we are planning for on the demand generation side. On the demand fulfillment, We have progressively enhanced our capacity in the last two quarters and we should be able to now realize the gains on the back of The strong demand that Baraji also mentioned about. The semiconductor supply has been an ongoing crisis and we are best trying to mitigate Yes, through creating alternatives and we have been working very closely with our supplier partners. We have New product lined up, and we are trying to accelerate the work on the same, especially those variants which are witnessing high demand, example, Due to various uncertainties in the environment, we are also building strategic inventory for the identified components. As far as profitability is concerned, we are keeping strict control on cost as per the business agility plan that we have developed. In a supply constrained environment and where certain product segments are facing pressure, we are also trying to best optimize The mix to drive better profitability. We have also been organizing more than 100 ideas iteration workshops in the last quarter we did involving more than 1,000 employees to drive cost erosion ideas. And we are going to further accelerate this in this quarter also. Finally, given the continued pressure of the rising commodity prices, We will be taking price increase to potentially offset partially offset the same. And this will be done In a manner that we keep the competitiveness of our products intact. So this was a quick update on the actions that 1, there has been a segment of the business that got significantly impacted this quarter. And unlike last time, here we had our collection infrastructure, our people Getting impacted by the pandemic and more than 1200 people were impacted by COVID. And unfortunately, we lost about And so we had consciously taken a call to slow down physics and visits to various places to protect our people. And that did cause grief in terms of production efficiencies to be dropping, as you see in the line chart below. And the good news is now we have more than 95% of our people vaccinated. Our infrastructure is now well and truly on track. And in July, we are already seeing 101 percent collection efficiency coming back again. And this meant that the increase shocks were the roof, 5.3% to 12.3%. Well, I do the last time, same time, there were no the moratorium was very much on And the clock has stopped ticking on the NPS, but this time there is no such waiver from RBI. So we have done it in terms Protecting our people, and we also ensured that our cost income ratios remain tight even in this environment. And we now expect to see a significant reversal amount of FPA provisions in the current quarter as collection efficiency pick up. But this has been from our overall perspective, this quarter was a very, very tough one for the Tata Motors finance team. Next one, next slide. So overall outlook, to summarize, I think in March situation, we see continued improvement as vaccination rates pick up. Supply situation, of course, is going to be challenging between semiconductor issues, commodity inflation and the intermittent stoppages due to lockdowns. And we do expect performance to improve progressively from H2 onwards. For JLR, Adriel has already covered it, but we do intend to manage all the Supply Chain business is topmost priority for us, execute the reimagined strategy, and this work is well underway and refocusing is already converted. Gaurav, as things become achieving an EBITDA positive EBITDA margin and positive free cash flow for H2 is a key priority at an overall level. Tata Motors, I think commercial vehicles grow is continuing to grow market share across segments and SCV in particular is a key one. And for PV, we continue to accelerate the sales momentum that we are seeing. And in PV, we will want to drive up penetration even further and accelerate Setting up of the charging infrastructure on priority. And we are still confident in delivering a positive margin and obviously can on a full year basis. This is what we have to say. So happy to take any questions that may be out there. Okay. Yes. Moving on to the questions, I think first one from Ankitya Makaryan, SCSE Securities. The aggregate China car sales has been declining since the last few months. What's the reason for the above? Also how can luxury sales car fare in China? Yes. Hopefully, you can hear me now. Apologies. We obviously fell off So, I'm not sure which Data you're referencing here, but let me tell you what's happening to China in the data. The first point, of course, is there is a peak selling period in China From the early part of November through to the early part of February was the period last year. It's The Singles Day in China through to Chinese New Year, and that is the period which ourselves and all other OEMs will be selling Most vehicles. So you might be referencing a normal in market fall off after China New Year, a February March Our lower sales always than December January. Maybe that you're referencing. If I give you the data sets, Now in quarter 1, even though China for us had pretty much returned to normal last year, we were up 14%. So in a like for like period, taking out premium selling periods in the market in a particular marketplace, like for like, we were better in China. Last point to make, our China volumes will start to reduce in Q2 alongside other regions for the reasons said, I. E. Supply is Starting to be reduced as a result of the semiconductor challenges. That's where we are in China. Thanks, Adrian. Next question from Dinesh Gandhi, Moshe Rao of Swal. Foreign question is for JLR. We have seen a quarter on quarter decline in gross margin Despite a favorable mix and pricing, is this due to commodity price impact? If yes, what are the gross impact in Q1 and expectations of Q2? And second related question, we have seen the material benefit of staff cost reduction due to restructuring as well as depreciation due to impairment. Are you expecting savings from these levels? And then I have a question for PV, which I'll take it subsequently. Okay. Let me take them in the order you've asked them. So commodity prices keep coming up. It isn't the biggest influence in our margin performance by far. And even though commodities are increasing, if I give you a value in the quarter, To give you a sense of that, it impacted us by about £30,000,000 adverse on a year over year basis. If I compare that to the $243,000,000 improvement year over year in VME, you can see relative to variable marketing and the health of sale, It's a small impact and we expect it to be an increasing impact, but relatively a small impact Going forward also. So please, it's not commodity prices that are going to influence and impact What we do in performing going forward. The VME pieces are much more impact Along with warranty, which is why I've consistently called those out over the last 2 years. Other points you're referencing So now material benefit of staff reduction costs, well, we've got a slide in the deck. You'll see, I think it's page 38. We don't need to go to it. You'll see our absolute costs in quarter 1 last year, which we had the furlough monies in there. We called out that Number, dollars 115,000,000 improvement year over year last year compared to this year. There is a small cost Increase versus quarter 4, I keep saying to you, quarter 4 is your reference quarter here. So when you look at the impact of They have gone down versus quarter 4. Some people did leave in the quarter and more people under the reimagined redundancy programs will leave In later quarters also, you're asking about D and A. Again, when you look at that slide, when you have chance to look at Page 38, You will see that our G and A did drop actually versus prior quarter a little bit. I think you're probably referencing MLA Mid here. Now the point of MLA Mid, of course, is those assets were on the balance sheet not yet being depreciated. So the saving for MLA Mid, which you may be referencing here, It was actually a cost that hadn't then at that point come through to our income statement, but would have if we'd have brought those vehicles to The marketplace, there is a small reduction on D and A. What MLAMid has done is stop that number Increasing by about 0.5 percent of EBIT going forward, you won't see a reduction, you'll see an avoidance of it increasing. A question on Shailesh on PV. What's the current capacity and utilization? What is the scope of capacity Expansion at our existing Visa locations. And I want to 2, the CBP is welcome to it. Suresh? Yes, Madhaji. So I would not get into the Numbers in terms of capacity, because it's slightly complicated from a shop to shop than we go. But broadly, if I have to give you capacity utilization of the 3 locations in which we operate, I would say Puna and Sun would be operating somewhere around 65% to 70% now. And Puna is going to go upwards from here because of the new launch, which will be which is slated on bill, which as you know is going to get launched in the coming months. As far as So Ranjan Bao is concerned where which is the Fiat joint venture factory that we have, the capacity utilization would be greater than 90%. And our engine and transmission, which is powering capacity utilization would also be in a force of 90% is what I would say. I would take the first part of the question on the price increase and then I'll ask Girish to talk about CE. On the price increase so far in May, we had taken about 1.8% price increase in PV, and we are yet to take a price increase in the quarter too. Over to you, Birish, So, Seebi? Yes. Thanks, Shailesh. So, yes, we took a price increase on 1st April, which was About around 2.5% across the range and looking at the steel price increases, we have taken another price increase of around 1% to 2.5% starting 1st July. So those are the kind of price increases we have taken. I also saw a question on whether it's easier in PV or CB to pass on the cost increases. I think In both business units, it's not that easy to pass on. And our focus also, therefore, has been to look at what we can do on cost reduction first And rest of us, I'm going to try and pass it on to the market. Balaji, back to you. Thanks, Harish. Next question is from Seshnee Vincent, J. P. Wirth. Because inventory is very tight, all OEMs are seeing pricings of mix How are I'm curious as to the ability to upsell customers with more marketing store ordering being done online? How does JLR management find customer behavior with this, order additional options, etcetera, for example? Yes. I'll take that one, Bhajit. Okay. So a few things to consider Here on this one, you're correct. Inventory is tight and become a lot tighter over the course of Quarter 1, that's absolutely correct. You're starting to see the first impact in that in our variable marketing. Obviously, that's the money we use to close deals And the variable marketing support is starting to fall quite dramatically actually. So you will see already in quarter 1 As a result of the pressure on supply, the deals we actually did with customers were more valuable to us. Now that was quarter 1, and don't forget this challenge unfolded in quarter 1. So going forward, in Supplement to that, I. E, in addition to that, we will also and also to control our order banks, of course, we don't want order banks of 4, 5, 6, 7 months on average sales. We're starting to actually take away the ability for customers to order Either in dealer or online, the lowest value derivatives. Temporarily, some of those derivatives will not be available, so they cannot be ordered. They would need To up spec their request by nameplate if they wish to order 1 of our vehicles until we get back to normalization. So those are 2 things, 1 already happening, existing deals in the marketplace with less marketing support, and then we're going on to the next stage Of taking away the lowest value derivatives within a nameplate. So customers, if they wish those cars, will need to of specified their vehicles for us to be able to deliver that to them in the marketplace. Most of the second piece will start to impact In the second half of the year, not the first half of the year, because of course, our obligation is to fulfill the orders we've received Already in the order banks, those are 100,000 plus units. Anjeet? Yes. Next question is from Pramod Ansek, Chip shortage is helping JLR system inventory to reduce drastically. Do you see an opportunity to Should you reduce system inventory or do you need to go back to March level, 1? And second, China JVs repeat the slip into losses as a concern, Any medium term fixed needed here? Okay, Balaji, let me take them in order. It's being asked. So, Inventory at March, it was globally at £3,000,000,000 level. We remind you, 2 years earlier, it £4,400,000,000 so we've not only been impacted by this supply shortage, We had already drastically reduced inventory by just over 30% across all nameplates, All markets, all regions. Do I see an opportunity to reduce from that? It's marginal. If anything, On a number of nameplates in a number of markets, we now have 2 low inventory and that would impact This level, that is starting to impact the number of customer orders we can close out, hence the retail levels will be suppressed In quarter 2, so what you'll find is it will continue to drop, but it has now dropped to an unnaturally low level and we do need to bring it back Appropriately, actually to levels we were seeing closer to February time, I'd say, rather than March time actually, February last year's time, as we normalize this position, just around £3,000,000,000 is a good place for us to be. There are marginal gains beyond that. China JV repeated slip into losses is a concern. Any medium term fix, well, don't forget the China JV has been impacted By the semiconductor supply as well, I did say to you, I think at the year end, we formally kicked off a charge Improvement structural cost program in China. Our breakeven point going into the start of the year was above 70,000 units. We're challenging ourselves to get down to $65,000 or 10% structural cost improvement and then below that. And the other key metric in China that you wouldn't see, obviously, our quality of sales, this is for local cars, of course, and our health of sale, There were 30% discounts on a number of our products. Two reasons for that, there had been oversupply. Inventory at the dealers were 2.5 months. They've now dropped to 1.3 months at the end of June. That's another great sign. The discount on average is reduced from 30% to 26 That's another great sign. And don't forget, finally, of course, we're replacing 2 of the products, Range Rover Evoque, Extended wheelbase is now new in the marketplace and the XF Long as well. So both of those vehicles, Effectively, brand new vehicles will start to improve. So a mixture of all of those actions we've taken and taken on structural costs, Together with supply, we think will improve the position in our China JV considerably. Thanks, Adrian. Next question from Namur Kapil Singh, Nomura. Let me give you a bit of a reading step to you. I'll take the India question first and then company Subsequently, you have a lot of water in between. India Business, with reference to some media quotes today, can you please let Noah, how much investment does the company plan in its charging infrastructure and staffing units in India? And what are the scale we plan to build? What's the current EV order book in India? So couple of yes, you're right. We did allude to that today. And we haven't quantified the amount of investments that we had to put in place This is obviously sensitive information. We'd like to keep it there. And very clearly, we see expense in the EV portfolio. And we know that As and when charging infrastructure comes in, you are able to break one of the barriers to the adoption. And we are working closely with Tata Power on this And we definitely want to play a role in capitalizing the charging infrastructure, as I called out even in the outlook slide as well. On scrapping units, we do see that the scrapping So we now formally announced we want to work with our vendor partners. And our job is to definitely to come in, in terms of We are the technology provider for that working with the world class leaders in Scraping, whom we are already getting into conversations with. And thereafter, the job is to ensure consistency of technology being adopted across the entire ecosystem. And ecosystem partners will be the ones on whom the investments operate it and also make the profits out of it. And we are able to ensure standards in terms of how And ensure that this is sustainable and it will work well in terms of what we bring as traffic. Sizing wise, we have said that we want to bring in, we already have intense conversations with our ecosystem partners. We have 2 or 3 should definitely come through during the course of this year. And over a period of time, we won't get up to at least 10, if not more. But that's over a period of time as we So that's the work on this. Current EV order book in India, Shailesh, would you want to pick that up? Yes, Balaji, I'll pick that up. So the current supply rate, whatever we have been supplying in the last 2 to 3 months, If I were to take that as the basis, then our order book would be anywhere between 14 to 16 weeks, I would say. But this is going to get improved in terms of reducing this by increasing supplies. But in the last 1 or 2 months, this has really shot up. It has doubled what bookings we used to receive. So this is really going fast. Thank you, Balaji. Thanks, Hilesh. So Adrian, continuing on the JLR question, chip shortages, what are the specific You're expecting Tier 2 suppliers as referred to in your PowerPoint presentation. Do we expect a sharp revival in production in Q3 FY 2022 More than breakeven level of €90,000 Okay. Thanks, Balaji. I'll start this question and then if I may, I will ask Thierry, actually to he's leading this from the front. I'll ask him to comment. But bear in mind Thierry is actually on the road. So we'll see how this Well, in terms of the Tier 2, what we would specifically have had in mind as we wrote that were a couple of Significant issues we brought to your attention previously, I. E. The Renaissance plant fire In Japan, which happened in the middle of March, and yes, production is now back and being built back Towards the 100 percent levels, so we do expect that to increasingly improve as we go through Q2 Into quarter 3. And another one would have been the Texas snowstorms, which again were around that same period in Late February, early March also. And similarly, we would expect those facilities to be coming back On stream progressively as we go through Q2 into Q3. Look, we're not in a position to confirm the production levels in quarter 3 at this point. We have said to you breakeven is lowering. We expect it to be better than the 90,000 units by the time we get there marginally, We just don't have those confirmations from suppliers yet, and I really don't want to mislead you by saying probably. So once we get to a point where we get those confirmations, if it's significantly different to what we've communicated, then we will communicate that to you. I would like to hand over to Thierry, if he's able to hear me. As I say, he is on the road. He has a firsthand flavor of this, and I'm certain there are things that I We've missed from that response. Thierry, if you're there. Yes, absolutely. Thank you, Adrian. Well, I think what is very key in this Very severe crisis that all OEM have at the moment with the chip supplier is that we are Let's say we are learning and we are learning very fast about the way our chip suppliers are working, what is their modus operandi And what are the needs they have in order to make it such that capacities and allocation of capacities is Stable and efficient. And we have also learned that our Tier 1 not necessarily are playing the same music as the one that the chip Supplier would like and that we would like to play with them, which means, for example, having long term contracts with them with take or pay approach. So far, the capacity is there whatsoever. And the good news is that we are getting direct and we are doing that With our key offender at the moment, we speak. So far in the future, we have a clear structural fix To the problem that we have at the moment. And JLR is well positioned to a certain extent because our size is considered to be Quite small compared to some of our big customers, especially outside the OEM world. And as such, it's also a very interesting Approach that we are following at the moment with the chip suppliers and with our Tier 1. Back to you, Balaji. Thanks, Thierry. The next is from Gujal, Bank of America. Few questions. One is Great. Thanks for the full year for FY 2022 for JLR. Arjun, looking at a fee of breakeven at 4% EBIT 4% plus EBIT as guided earlier. Can you please clarify on this one? Puneet, I think as Thierry and Adrian just referred Things are too fluid at this point in time. It doesn't make sense to call a number of which at this position we are not able to meet. So what we are calling out is what it is that we are seeing at this point in time. And obviously, as Clarity emerges, we put it back again. And we will definitely ensure that there is always miscommunication happening from us on that front. That's number 1. Then any change to the launch time lines in JLR due to lack of visibility on semiconductor availability, Adrian? No expected change in the timeline of the launch of our New products, let me remind you, each time I communicate this, the time line gets shorter. We expect some of that new product now to be in the marketplace within 9 months, which is really good, the Range Rover and then the Range Rover Sport 6 months Later than that, we don't plan to in any way slow down the launch of these vehicles. Whether we find as we launch That some of those semiconductors are a problem on the new vehicle or not, we haven't got to that point yet, of course, because we're not yet Clear enough on Q3 supply. So our intention is to absolutely push ahead And delivering those wonderful new vehicles to the marketplace when they're ready, and that's likely to be in around 9 months' time. I think, maybe if I may Balaji add something and complement the answer from Adrienne. I think the company at the moment is experimenting a huge Intensive, a path of progress through 3 Imagine and Refocus. And the fact that we are under tension because of supply Doesn't change at the contrary, but intensify all efforts in order to grow faster in our plan of progress. So which means that the company It's getting more muscular, it's getting faster, it's getting better synchronized and that's the reason why we are just Making such that the supply is coming back and then we will show the progress that we have made during this period of time as well. Thank you. Thanks, Yuri. The other one on the Indian business, same as the market demand post reopening in the domestic market, is there any volume outlook for CV and PV business For FY 2022 that we can share, wouldn't want to conjecture on volume outlook other than the fact that both Shailesh and Girish did allude to Significant pickup that we are seeing in the market as we speak. It has been on a roll. And as far as CV is concerned, we are seeing gradual demand coming back up for Q1. Question to April, VME levels in JLR are very low given supply shortages and there's an industry wide phenomenon. How sustainable is the number for VME and warranty for the midterm? And the second on emissions, how do you think the powertrain mix needs to move to comply with this? Okay. Thank you, Banerjee. So, VME, I'm going to interpret midterm post supply shortages rather than During supply shortages, let me take you back to the announcements I've made previously. We were Thanks to variable marketing at that point in time to be at or around 6% and warranty at or around 3.5%. So once we get to a normalized marketplace, assuming there isn't a permanent correction here, then I would anticipate that, that guidance It's still good guidance. Although, VME in the foreseeable future over this constrained period We'll be closer to the 4% or below level until supply has been adjusted To be commensurate with demand, I think it's reasonable for you to take that message away from today as well. From an emissions related penalty perspective, I've mentioned to you today the quarter one data. Our Total BEVs and PEV numbers in quarter 1 shown in the presentation on Page 9 was 8.5%. So at that level, It's actually non compliant, so we would need that number to grow through to double digits. Let me say, in total, about 12% To get to a compliance portfolio, we know when we look at the order banks from our customers, we are at that level with a Jerome requested demand for our PHEV units. So again, it's about 12%, not the 8.5%. And we can see that within our customer order banks. It's just our ability to build those cars today, which is holding us back I'm penalizing us from a potential fines perspective. Thank you, Adrian. Another question on mix, Where you're saying that this is from Hakim Takor Credit Suisse. JLR ASPs Quarter on quarter, is this peak mix or can this improve further in the near term? How do you see that shaping up once the supply starts normalizing from 3rd quarter? Yes. Okay, Balaji, thank you. Let me take that one. Look, again, I think you're asking me beyond the chips I think there's 2 levels here actually. I'm going to stay within the supply shortages for the first half and talk Half 2 because there will be shortages in half 2. It's just the extent. I do believe the actions we've taken Trying to moderate the increase of the order banks, trying to reduce the lower derivatives within nameplates. Of course, that's going to have a natural impact to reaching those average selling prices and improve even more the net Transacting prices because of the lower VME. So I see those two items actually increasing over the second half of the year Once we've supported the orders that have been put in place, again, as we normalize post crisis, it's more difficult, but don't forget Listen to Thierry's words, this will inspire us to actually even further accelerate our refocus transformation program, And we're very focused within that program for all regions improving health and quality of sale, and you will see that coming back as increased Transacting prices net transacting prices. So there will be a legacy as we roll out the program. Those transaction prices like for like on exchange rates, of course, will continue to be strong, if not improving going forward. Thanks, Adrian. Question from Nishant Priyas from IPC Securities. Can you shed some little more light on the strategy of 10 new launches on EVs in India till 2025? Are the new launches going to be spread equally across the years or is it going to be more backhanded? Any breakdown of target segment? How is the battery supply chain being planned in India? Nishant, I think the way I would like to look This is the plan and aspiration that it will be after. We are pretty excited by the speed at which the country is moving into electric. And particularly with rising fuel prices and charging infrastructure starting to come together, the barriers are also falling. And therefore, we believe the customer needs to be given choice. And given the We will be given choice. And given the choice, we will be an all in player. We already called that out any time ago and we're just quantifying it So that we are able to put some meat to the bone that we have. So the 10 new launches is definitely is a part of the plan by 2025, Reasonably well spread out. And we wouldn't want to put out any specific target segment other than saying wherever the Tata Motors is going that way we want to be, otherwise we wouldn't be an OEM to begin with. And obviously, the back end will be fully integrated to ensure that At this point, this is what we will be able to share. And rest assured that as and when we get closer to it, More and more color would be provided as we normally do. I hope that helps, Nishant. Next question is from Jay Tarik from JLR Capital. Even if things improve in second half for JLR, is it fair to assume that FY 22 net debt for consolidated will be higher than 40,000 crores seen at the end of FY 2021. Great question, Jay. I think the point to be made is that At this point in time, out of the INR 18,000 outflow that we saw, more than INR 15,500 crores is just working capital. And we showed both in JLR and in Tata Motors that the operating cash less CapEx is actually near breakeven that is there. And therefore, at this point in time, wouldn't want to comment on how the year end debt would be. We have made it very clear that as far as Tata Motors is concerned, we will be cash positive in the year free cash flow volume. And JLR on a full year basis, work is still underway To actually figure out where exactly we would land, 2 and we have clarified Adrienne as many times today saying that we see improvement in second half, We are in a good place. Now we need to get the demand we need to serve the demand. That is where we are. So we wouldn't want to hazard a guess on where we would land up On a full year basis. But do keep in mind that the deterioration of this quarter, most of it is working capital. And we will obviously see a significant amount of the working capital when A minute volume start picking up. Adrian, anything you want to add to this? Nothing to add to that Balaji. No, thank you. Okay. Question from Vinay Singh on very similar line saying that if revenues in the second half of this year is going to be very similar to the revenues that we had last year same time, why would EBIT margins be That we had last year same time, why would EBIT margins be on lower on a year on year basis? We haven't specifically called out EBIT margin for the second half of the year. Therefore, I must admit that I didn't understand your question too much. If I may Balaji, I think the Question has misunderstood the outlook slide because the 6% I think this is where I did drop off. So I did explain it, but it Sandra, like I was talking to myself, the 6% is actually the underlying for last year And the headline is 7.1%. So the two numbers both relate to last year. We have not provided any guidance for H2 FY 'twenty two for the reason you said. Yes. Now I got it. Got it. Now I understood. Then I hope that's clear for you. Then we have Amy Hobbs from SandBram Asset Management, Sandbar Asset Management. 3 JLR questions, if I may. You think you can get to Q1 levels of absolute wholesales or better as early as Q3? Should we continue to expect emission charges in H2? Should we expect volumes at CJLR to follow a similar pattern to the rest of JLR? Can anything be done to reduce CJLR over its spot? Or should we be prepared for more losses going forward? Adrian? Thank you, Balaji. Do I think we can get to In Q3, Q1 levels, yes, we can. But I haven't got the supply guarantees as yet To demonstrate, we will. We certainly can. That is certainly possible. That is not guidance. That's just what's it's in the range Of reasonable outcomes, let me put it like that. Should we continue to expect emission charges in H2? Well, if I take you to the first piece of your question, if we have a profile in Q3 similar to Q1, I think it's reasonable to assume it won't be a compliant profile. That's reasonable to assume. So we would need to Increased volumes above that quarter one level, in my view, for us to actually See the full power for that compliant portfolio, that would be my expectation here. So we would need to get Closer to a normal level of supply, if not to the supply we could certainly the demand we have for us to be compliant In any given quarter, I do not expect us to be compliant in Q2 with that 65,000 Unit volume number we've indicated. CGLR, I think it's reasonable to assume the pattern It's the same, I. E, they will be impacted by semiconductor shortages similar to ourselves for the foreseeable future. And I did mention on one of the previous questions, we are absolutely working on reducing our breakeven point at CGLR. And of course, that will be twofold, health of sale, quality of sale, reduction to incentives given, I. E, VME, But also structural cost reductions as well. They obviously have a much lower cost base than here, and therefore, the absolute numbers We'll be nowhere near as big as the reductions we've made in the core business, but I do expect breakeven to reduce below 70,000 units For those two reasons, yes. Thank you. Thanks, Adrian. Question for Girish from What has been the quarter on quarter trends in discounts in M and HCV? How do you see that? Okay. Thanks Balaji. So, as I mentioned, we have taken a price increase on Beginning of January and then again in April, so generally when we take these price increases, these price increases get Accepted as we go ahead in the quarter, so by middle of the quarter or second month, I think generally these price increases get accepted. So I would say in terms of realizations, towards the end of the quarter, we are back to the levels that we were in the previous quarter. Okay. Thanks. Girish, maybe stay on the line for a minute. In terms of the pre built inventory for retrofit, Are you doing anything in CV? And similarly Shailesh for you in CV and Adrian for you in JLR? Yes. So Balaji, on CV, We don't want to keep there is no need to keep inventory of finished vehicles. As I mentioned in my presentation, we are keeping Strategic inventory of either semiconductor or semiconductor parts at part level in very few cases at aggregate level, But not at the vehicle level, that's not required, because we are aligning our production to retail. Balaji, back to you. Shailesh, sorry, before I hand it over to Shailesh, the question came from Chirag Shah, I will say. Shailesh, on the PV side, any 3rd build you're Yes. So Balaji, given that we are already always operating at the peak capacity of certain items, In the low industry volume months, we are taking we are keeping some finish full inventory also Because of the uncertainties that we see on the supply side, even different kind of disruptions that we have been facing, but this is limited to just 10% or so Of a monthly volume is what I would say. Rest is absolutely similar to Seabee. We are keeping strategic inventory of Common parts, as I said, that this is more towards preparation for new launches. Back to you, Baranjit. Got it. Adrian, On the JERA side, any kind of inventory you're rebuilding? Yes. So we did build Inventory for retrofit at the end of June. We actually had just over 7,000 cars in what we would call Work in progress or in your words retrofit. Normally at this time of year, we would expect less than 3,000 units. So we almost trebled the inventory at the end of June exactly to do what you're suggesting here. Their expectation is a lot of that retrofit will happen in quarter 2. What I don't know is where we will end the quarter Because obviously, we'll make our decisions around September what we retrofit build versus what we don't build As we go through the next 3 to 4 weeks post our shutdown period, would you like me to continue with the question too Balaji? Yes, but you already have covered that. This is already J and R's plan for H2. So that's something we already covered, if you have. So You've got another 3 minutes, so I'll take the next question. Thank you. The next question is from Nishish Mangal Jefferies, two questions, particularly the next one we haven't covered, I'll probably take that first. Could you explain the tax situation at JLR? Why a large tax Thanks, this is for negative PBT and how will this look in the second quarter and second half. Nishu, I think you always maintained to look at EPR On a clear basis, it is very easy when you look at within the quarter. Three things that contributed to the deferred tax asset that's not being recognized. 1, given the constrained losses, The loss for the quarter could not be recognized. Within that, the UK system, in particular, had a higher tax loss, the consolidated was 110. Therefore, there again, we couldn't recognize the tax loss there, the G and F. Thirdly, Both on pension assets as well as on hedging reserves which go through OCI, as well as OCI has to be restated because the tax rates 1 of the 19% to 20 5%. We should rightly be recognizing a GTA for that, which given the current tax loss position we have not. And these obviously mean that as and when the business becomes profitable, you are getting back into recognizing this. So do look at ETRs on an overall basis. There's no structural Is there anything you want to add to that? Just one point, I think Balaji, excuse me if I missed it, the line isn't so great. Look, this is IAS 12, I think it is Accounting, so it's accounting regulations rather than cash payments. And at the point where we become sustainably profitable, This deferred tax asset will be created, but it's accounting rather than cash is the point I just wanted to make. Yes, spot on. Those are good spot. We should have added that. Thank you. So maybe time for one last Question that is out there. This is from Nikunj. Let me pop it up earlier So that's the best of us can see it. Give me a minute please. Yes, this one again to JLR semiconductor issue, Which we have already covered. The other is on EV launches. What are the CapEx plan for India PV business and these subject to the JV partnership with a strategic partner? As we have said, EV for us is a strategic call out. And obviously, there is a strategic partner for that or a financial We are more than happy to take it. But obviously, the imperative will be implemented as part of our plan. And as the business is starting to do well and enables the turnaround, that also gives us more degrees of freedom. Having said that, we will be open to any partnership as far as it is concerned. So, Nikhil, hope that clarifies that for you. I think with this, we have come to the end of the session, 8 o'clock right now at my time. So thanks all of you for joining in. Thanks to the teams in JLR and Timel for taking the questions. Hope we are able to answer all your questions to your satisfaction. Feel free to reach out to us In case there's anything else that you'd like us to clarify and look forward to engaging with you in the coming days. All the very best and stay safe. Take care. Bye bye. Thank you. Thank you, Balaji. Ladies and gentlemen, on behalf of Tata Motors Limited, That concludes this conference. Thank you all for joining us and you may now disconnect your lines.