Hello? Yes. Your name, please?
David.
Can you spell for us, please? And?
Yes.
Anderson? Okay. And your company name, sir?
Anderson.
Anderson Family Office. Okay, just a second. Okay. And your conference call name? Joining you. Thank you.
The conference is now being recorded.
10.7%, lifting the overall bus volume by 17.3%. Exports, total industry volume grew a modest 0.3%, reflecting geopolitical challenges impacting many markets. Now, moving to the VECV performance in Q3. In this context, VECV delivered a strong performance, recording its highest-ever quarterly and YTD sales, with 21,012 units in Q3 of financial year 2025, surpassing the previous record of 20,706 units in Q3 of financial year 2024. This performance was driven by strong performance across key segments. Eicher performed strongly in the LMD truck market, with a 36% market share. Q3 sales: 9,702 units, despite a marginal volume drop. In the heavy-duty truck segment, Eicher sold 5,428 units, 8.9% market share, while combined heavy-duty sales market share of Eicher and Volvo stood at 5,964 units, at 9.7% market share, reflecting competitive resilience despite sectoral challenges.
VECV bus business performed very well, boasting its highest-ever Q3 sales of 3,749 units, up 10% year-on-year, with a 20.7% market share, supported by robust demand for LMD buses, 3,151 units, plus a 12.3% growth year-on-year. Reflecting our growing service and parts network, VECV parts business also hit a quarterly record with sales of INR 708 crores, with a growth of 25.6% year-on-year. Exports surged 44.5% to 1,192 units, despite disruptions in South Asia. By today, VECV total volumes grew 2.8% to 61,488 units, with market share in more than 3.5-ton segment, including exports growing to 18%, with a 17.2% in financial year 2024. EBITDA margin , excluding OCI, one-time income for the quarter grew to 8.8%, growing 0.8% over the same quarter last year, reflecting better cost management and pricing discipline.
At the recent Bharat Mobility Global Expo 2025, we launched our small commercial vehicles in the 2 to 3.5 ton segment, the Eicher ProX. The Eicher ProX is launched electric-first. Delivery to the customers will begin shortly. Coming to the financials for VE Commercial Vehicles, Q3 2024-25, VECV revenues rose to INR 5,801 crores, up 5.8% from INR 5,483 crores. Vidhya Srinivasan at INR 509 crores, up 16.6% from INR 437 crores of Q3 of financial year 2024. Vidhya Srinivasan as a percentage to net sales is at 8.8%, as against 8% in Q3 of 2024. Profit after tax at INR 301 crores, up 44% from INR 209 crores of Q3 financial year 2024. I now hand over back to Siddhartha for any last remarks.
Yeah, so we've had a great performance in Q3, and that's put Eicher back on a really strong growth trajectory. And I'm sure we'll carry this forward momentum into Q4 as well. Our focus on priorities and objectives continues to be in line with our overall strategic vision, and we're confident that we'll build on this strong growth momentum. So thank you all for joining the EML's earnings call, and we now move over to the question-and-answer session. Thank you.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we request you to please restrict your questions to two per participant. You may rejoin the queue for follow-up questions. We will now wait for a moment while the question queue assembles. We have the first question from the line of Kapil Singh from Nomura. Please go ahead. Kapil Singh, your line has been unmuted. You may proceed with your question.
Hello. Yeah, can you hear me?
You are audible, sir.
Okay. Yeah. Thanks for the opportunity, and congratulations on a strong set of numbers. So I first wanted to understand, if you look at the quarterly performance, it looks like the strategy that we outlined seemed to be playing out well. We had come out with some new variants, and there seems to be a pretty good response from the customers. So I just wanted to understand how you're thinking about this. Is this something that you intend to continue? Was this a temporary action? And then we've seen some sharp increase in other expenses in particular. So if you could just help us understand, are there any non-recurring items, or these are all normalized business expenses?
Yeah, Kapil, yeah, the question is for Royal Enfield, I suppose.
Yes.
Royal Enfield, during the fiscal season, we really did very well. In this quarter, our retail has grown almost about 19%. Our product actions, which we have taken on the Classic 350, Bullet 350 Battalion Black, and all the new launches, with, as mentioned in the last call, also about the elevated marketing campaigns and our inventory build-up and preparatory for the fiscal season, everything worked very well. As I mentioned, it is us as a growth focus. All of our actions in the company will be aligned around the growth. We have to, all the new products which are launched, all the brands which are to be supported, so that activity will continue. Even in the month of January, it has been very good. Wholesale growth for the middleweight motorcycle was almost about 7% in April to December 2025, despite all the noises and the new entrants.
We will be continuing to focus on expanding the middleweight segment and strengthening our product positioning in the markets. We will ramp up our brand awareness for Classic 650, Goan Classic, and Bear 650, and Guerrilla 450, which are all in our focus. Yeah, we are also building and scaling up our initiatives like Reown, Assured Buyback , which are all gaining traction. The motorcycle industry has seen a muted growth after the fiscal period, but the middleweight segment has been sustaining the growth, and we believe we can outgrow the motorcycle industry in the long term, and that's where our actions are all aligned. About the one-time expenses, maybe you're there.
Yeah. I think other expenses, to your question, we've had five launches, five major launches in Q3 of this year. We had Bear 650, new Classic 350, Bullet 350 Battalion Black that Vidhya talked about, the Classic 650, Goan Classic, against one major launch in last year's Q3. Apart from that, we also had an EV brand launch. We unveiled the Flying Flea brand in EICMA this year and also several regional activities in Europe against building the brand. So approximately, we've had about INR 70 crores incremental spend in Q3 for launches as compared to the previous year. Out of that, almost INR 20 crores is towards the EV brand launch and events. I think apart from that, we've also spent a little bit additionally on on-ground marketing activation of about 0.9% this quarter versus last year.
So I think that basically explains the mix of our big swing in our other expenses. I guess your question is, yeah?
I think I have that call.
Yeah.
So it's one time. Yeah.
Yeah. Some of it is one time. Yeah.
Something. Hope that answers Kapil.
Yes, sir. Understood. And just second one is on VECV. We've seen pretty strong margin expansion over there. So very strong growth in EBITDA. So any more details you can share, like what was the driver for margin expansion over here and if it's sustainable?
Fundamentally, better cost management and better price management. There is no specific reason otherwise.
Okay. Okay. Thank you, sir. That's all. I'll come back next week.
Thank you. We have the next question from the line of Amyn Pirani from JPMorgan. Please go ahead.
Yes. Hi. Thanks for the opportunity. I have a question on exports. Obviously, you have seen a very strong recovery in exports, but partially the last year's base was also impacted because of a lot of headwinds in the individual markets. Can you give us some context of how the markets are doing? Because we had a phase in which Europe was going through a tough time for the markets itself. The U.S. was having its own issues. Also, if you have some views on these tariff-related concerns which are building up. So how are the individual export markets doing if you can give some context?
Hi Amyn. Last year, you all know, we talked about the inventory corrections and all those things. This year, for us, the international market performance has been very good. We have sold around 70,000 units in the international market from April to December 2024. That's almost about 38.5% growth for the last year. More importantly, the retail growth has been very good. It is tracking ahead of the wholesale throughout the year. Now, the focus is more and more on retail. It's almost about 8-9% higher than the wholesale. Markets which are leading the growth are U.K., Brazil, Italy, Europe, and North America. We have seen we have also started Bangladesh, and we also done the CKD, and we have opened one of the largest flagship stores in Dhaka. So we are also entering into the new markets. As I always mentioned, international markets, we are cautiously optimistic.
Though the sentiments are slightly weaker, we see our positions are getting cemented over the period of time. In the coming year, our focus will be more on the brand building. And in some markets, we are taking over direct entry to our subsidiaries and all those things because we see it as a good market for us in the long term. So as of now, the international market is doing well. Not that the macros are behind, but we are going slowly and steadily, and our progress has been very good in that.
Okay. That's good to know. Just on the Thailand CKD plant, any broad sense as to what kind of capacity we're looking at and what is the kind of annual potential for you in that market? And also an update on what's the CKD capacity in Brazil? I think you are going to expand that as well. So some recap there would be helpful.
Yeah. So, Thailand, the CKD is, I mean, we signed up as a third party almost three years back. Now, we have understood that the market is good, and for future, we have to have our own setup because the depth of manufacturing also has to increase. So we have gone ahead with our own manufacturing facility. That facility is scalable. As of now, we are operating only in one shift, which can deliver almost about 5,000-7,000 motorcycles a month. Because we are also looking at that base from there, what are all other markets which are in FTA, which can be made use of. So I'm under exploration. There are final details which are being worked out. But as I mentioned, it is scalable because the depth of manufacturing is not very high in Thailand.
So to that extent, the speed at which we wanted to do to scale up will be higher. That's about Thailand. And Brazil, which you have asked, so we actually gone in for the second CKD plant, and that is almost in the final stages. The market is good. So at some point of time, because of the quota not available, we put the expansion on hold. Now, with our CKD facility which are coming up, and now we are looking at slowly opening the retail outlets also. So we are bullish about that market in time to come.
Okay. Thanks for that. I'll come back in a few.
Thank you. The next question is from the line of Pramod Kumar from UBS. Please go ahead.
Yeah. Thanks a lot for the opportunity. My first question is regarding the growth versus profitability pivot, so we clearly have made a transition focusing up to it towards growth, and I think we've seen the benefits of that in the festive season, but just trying to understand, have we found the right balance in terms of the value proposition to the customers and the marketing effort, or is there more to this as we kind of go forward? I'm just trying to understand where will the marketing efforts and the other market-driven activities kind of settle? I'm just trying to get a directional trend. Are we kind of satisfied with the balance between volume growth and margins what we are currently seeing in the quarter?
So, just any thoughts on that, Govind, Vidhya? You would say that it, please. That will be very helpful.
Pramod, as an organization, as we have been saying, we are a growth-focused company. All the products which we are launching, we are actually adding value back to the products. We haven't increased the pricing. We were amping up our brand-building activities and the market activations during this time because that's where we felt we have to do more work on. All the new products which are launched, like Classic 650, Goan Classic, Bear 650, and the 450cc Sherpa engine platform roadster, the Guerrilla, which is an outstanding motorcycle, all those motorcycles, we have to do the brand-building activities and the market activation. That will continue. As we are adding value back to the product and the marketing activations and support which we have to do in brand-building activities, growth is the focus.
Now, with respect to the profitability, we always have been mentioning profit, absolute value is what, that we have to look at.
Okay. So yeah, I am okay, Govindarajan, but I'm just trying to understand, have we found the right balance is what I'm trying to get at? Are we satisfied with the kind of efforts, what we put in, and the response we got in terms of the market response, consumer response?
Yes. We have to constantly keep looking at how the market dynamics is and which are all areas which product has to be looked at and support has to be done. So the balance is not that we have one answer for it. As growth requires, from time to time, we'll keep doing that.
And second question is on the demand response, Govind, because we've been kind of seeing big demand for the last few years, of course, outperforming the motorcycle category. But yeah, generally, there's been a bit of a sluggish demand going into the season, and all of a sudden, the demand came in. So I'm just trying to understand what were the if you were to do a bridge of where demand was on a monthly basis before the festive or the market share before festive and where it is today. So it just helps us understand how much of this is led by existing inquiry converting to actual purchase and how much of this is kind of win back from competition, what was there in terms of somewhat of confusion in the mind of the consumer with so many brand launches, right?
So if you can just help us break down the components and also how many of them are new customers which are helped by your additional reach on the semi-urban rural side and any color on the regional performance, different regions, how they have responded during the festive season, and also any final thoughts on how you're seeing demand post-festive because January was very strong? There could be a year-end phenomenon there, but how are you seeing demand as you stand today based on all the inputs what you have on walk-in inquiries? Thank you.
Yeah. Too many questions you've put it in one thing, Pramod, but let me just try to address. First is across the funnel from inquiry to lead to the conversion through this inquiry, bookings, and then retail, wholesale, retail, everything, we have been consistently growing during the last quarter. In fact, in the last quarter, we reached a market share of almost about 10.5% in the two-wheeler industry in the motorcycles. What is happening, as I mentioned in the last call also, is that we will start looking at product by product which requires market support and a brand-building activity. We will up the game in that area. That's what exactly we did. We also found in the market during the festive season what sort of an inventory which we have to keep that we activated.
And our classic, Italian black, all those products, whatever the market activities which are to be done, that also has been supported. So all put together, it has actually really worked. And now there is a positive momentum which I'm seeing. And that's why you also mentioned January also has been the growth that's continuing. In time to come, there will be more market activation work which we will continue because some of the brands like the developed level, we have to do a bit more work in the brand awareness itself. And under there, we will be doing some activities. There are some new products which we have lined up. So we are positive about the growth continuing as of now.
Thanks a lot, Govind. I'll come back in a few. Thank you.
Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Before you go ahead and ask your question, let me remind participants that they may press star and one to ask a question. Gunjan, you may proceed.
Okay. Thank you for taking my question. I just wanted to clarify the one-time impact, Vidya, that you called out. It's INR 70 crores, which is to do with the launches and EV and VECV, and you mentioned 90 basis points additional. Is that understanding correct? Both your 0.90 basis point and 1.4 percentage point, which is the INR 70 crores, both of these are non-recurring as we look into the next couple of quarters. Is that understanding correct?
No, let me ask.
Yeah, yeah, yeah. Let me just clarify. INR 20 crore out of the INR 70 crore is allocated to EV. Okay. And obviously, this is based on the launch intensity. And if we have more launches, there will be some launch spend. So I mean, but yes, broadly, that is the way to look at it. 0.9% is what we've spent on on-the-ground marketing activation during the festive season. Like I think Vidhya has pointed out earlier, there could be, depending on our focus, which is on growth, and therefore, we keep looking at our marketing intensity from time to time. Yeah? Okay. That's clear now. And the other follow-up around this I had was that, of course, you've done a lot of value addition in terms of your Battalion Bullet and Classic also. And there were no price hikes taken on those.
So is there any pricing intervention that we took towards the end of the quarter or something that is due as you see the response to these interventions quite positive? And while you cover the price hikes, if you can also talk a little bit about OBD-related impact that you may see in the next couple of months.
I think as far as Bullet Black is concerned, we haven't taken any pricing interventions towards the end of the quarter. As you know, we don't really comment on any pricing action that we might take in the future. But I think one thing I would want to say is that given the growth that we have seen in Bullet, in spite of the fact that we were muted in terms of the I mean, we've invested in the product, overall, our GC has grown as far as across the Bullet family.
We continue to add value back to the consumers on the product. That's the focus.
Okay. Okay. Got it. And just going back now to the growth question, Bullet and Classic clearly have seen a pretty good momentum over the last couple of months. If I see Bullet, we are going back to the FAT numbers that we used to see. Now, in terms of the brand potential that is with Bullet and Classic, if you can talk a little bit more, how do we see, do we see more upside to the Bullet run rate that we're seeing right now? And secondly, on Classic again, we are way off from where the peak volumes used to be back in fiscal 2018. So just trying to understand, do the interventions that you're making right now give us confidence that there is a huge potential left with these brands, both of these?
I think, Gunjan, you referred 2018. 2018 time, the product which we had, Bullet 350 and Classic 250, we moved on to the J platform. That is one action which we have done. And Battalion Black, we all have seen. We have launched it. The response has been very good. Primarily, where the market, where the Bullet was very strong in that market, the Battalion Black got accepted very well. Now, we are also opening to other parts of India. Classic, it's a year of classics, which we want to celebrate. We are doing a lot of activities around Classic. We also, if you remember, we did the factory customs on the Classic as a special. So a lot of activities are which are and the Goan Classic which we launched. So the Classic whole family, there is a lot of activities which are happening.
The love on Classic is also back. Consumers started really liking the new Classic and the colorways which we have launched. I do see in future also, the love is continuing, but we have to support it, which we will continue to do through the market activations.
Govindarajan, the inventory side, this last question is, is that sorted now? We were in stockout situation. Where would the inventory level stand now at an overall level? Channel inventory?
So Gunjan, I think the stockout situation only because during the festive season, we had such a strong sale during October that there were a few areas where some of the colorways and some of the models kind of got out of stock. We have stocked back up. I think we are back to our regular inventory level. Yeah, two to three weeks after, yeah.
Some colors and SKUs which we have to do the match because, as Vidhya was mentioning, during the festive time, I mean, it was positive. So some stockout situation of few SKUs has taken place. Now, the plant team is gearing up to fill that back because we have gone with the replenishment model to extend the full efficiency and support the dealer community also. It is working really well.
Okay. Got it. Thank you so much.
Thank you. The next question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities. Please go ahead.
Yeah. Thank you for the opportunity. So firstly, to Vinod sir on the CV industry outlook, so how do you see the Q4 quarter? And just on a next six to 12-month perspective, can you share how do you see the industry growth?
If you look at the overall industry, first nine months have been sort of a stagnant and a little bit marginal drop around, I think, 2%-3% drop. However, going forward, we are very optimistic. The reason being that if you look at the capital expenditure trends of Government of India, first nine months, they have spent around, on an average, every month, INR 72,000 crores. And based on the current plan, this last quarter, I think the expected spend is going to be around INR 92,000-95,000 crores per month. And that will be similar spend in the next year as well. So therefore, based on this increased spend, we are expecting that there will be good demand in quarter four.
And otherwise, also with all the better money which is going to be available in the hands of middle-income groups with the better taxation relief, I think there will be some better consumer spends which will have a clear circular impact on the entire economy, leading to more consumption and then more movement of goods and services. So therefore, we are very positive that the commercial vehicle industry next year should do better. And of course, our overall expectation on the GDP growth continues to be more than 6%, around 6.3% or 6.5%. And replacement demand is also going to remain very strong. Interest rates which have been cut recently by Reserve Bank of India, 0.25%, that will also have a positive impact on the overall financing rates. So therefore, I think commercial vehicle industry, based on all these fundamental factors, should do better.
Got it, sir. And just on how's the inventory situation in the CV industry and how's the discounting going, sir?
As far as the inventory situation is concerned, inventory is quite healthy. I can't talk of the inventory in the industry, but of course, as far as our inventory is concerned, we are quite healthy and we are within our norms on the inventory. As far as the discounting is concerned, this is steadily improving only. So price managements are getting better. More and more realization is there with everyone that the discounts are not good. So therefore, the discounts are also not sustainable in the long run. So therefore, we are expecting that the discount levels should continue to drop.
Got it, sir. Sir, the next question is to the Govindarajan, I think, sir. On the EV launch pipeline, sir, we have this Flying Flea and the Stark collaboration. I just want to understand what's the timeline for the launches for these brands?
On the Flying Flea, which is a city plus electric motorcycle, that's a brand from Royal Enfield. We unveiled the C6 and the Scram S6, both versions. There's a lot of activities which are happening. Around the first quarter of 2026 will be the time when we will be hitting the market.
Got it. And for a Stark partnership, any plan to launch the product?
Stark is actually a strategic investment from Eicher Motors. Primarily, it is all about helping each other and understanding. We get the help from Stark in terms of lightweighting, modularity design, and pushing the envelope of what are the innovations which we can bring in into the motor controller, battery controller, and the integration, the whole vehicle. That's what we are actually learning from them. And also, for Stark, because we are good in the scale supply chain operations, we support them in that. So that's the kind of collaboration which we do. There is no such product which we are working around to bring it to the market immediately.
Got it. For Flying Flea, sir, what kind of production capacity initially you would have, sir?
I think we are currently, our Flying Flea will be manufactured out of our Vallam Vadagal plant. So we are building a capacity which we have mentioned is almost about 1.5 lakh per annum. But that's all scalable because that's a vehicle assembly line. And we will go modular. And we always had looked at that we won't put a heavy CapEx onto this. We will go modular, and that's what we are good at. Even for Flying Flea, depending upon the market situation, we will keep improving whenever it is required.
Got it, sir. So next question is to Vidhya ma'am. Just on the gross margin, this quarter sequential, there was a fall in the gross margin. Is it due to mainly the mix of the products?
I think you've kind of answered my question, but basically, I think there are two things. It's essentially because of product mix. We've talked about some of the opportunities that we've done from a Battalion Black standpoint, or even in Classic 350, where we've tried to make it not too impactful on customers. And we've also not increased our prices. So I think that's why the product mix, that's what is resulting in the gross margin. But on an absolute level, gross margin has increased, obviously.
Got it. Got it. Understood. Lastly, on the CapEx side, how was the nine-month CapEx for the Royal Enfield and VECV, and what is the guidance for the full year?
I think in the beginning of the year, we announced that we will have the CapEx of around INR 1,000 crores for the full year, so we are on track, and we are likely to be around INR 1,000 crores for the full year.
Thanks. And for Rolands, Vidhya ma'am?
We request you to please rejoin the queue. You may ask your questions once you're asked again, sir.
Sure. Thank you.
All right. Thank you. We have the next question from the line of Jinesh Gandhi from Ambit Capital. Please go ahead.
Yeah. My question for you is for exports. So in export market, of all the new product launches which we have done in the last 12 months, which models are yet to be launched in some of our new export markets, key new export markets?
Well, products in an export market, there will always be a lag, Ganesh. So for example, Himalayan, we are just launching in Brazil. Guerrilla, we have just launched at an APAC region. So it's all the products in this quarter most probably will be launch completion in all the international markets.
Including the Classic 650s and Goan 650?
All the products.
Got it. And secondly, this Thailand CKD which we are putting up, this will be also from export to European market as well, given the FTA Thailand has. And in that context, what kind of advantage does Thailand offer to us from that perspective? What is the, sorry, go ahead.
But first, that particular market has to be taken care of. So we have to get that right. So we have established the base there, and FTA is being studied by our team. Whatever the ASEAN markets first, then we'll finally look at on a TCO basis, what makes sense to represent the full container from India to Europe or from Thailand to that place. That study is on. And maybe coming year, we will see if there is a merit to that, we will review it. Otherwise, currently, Europe will be going only from Chennai plant.
Okay, but any sense on what would be import duties on our bikes in Europe?
Sorry?
What would be import duties on our bikes in Europe?
5%. It's about 5%.
Yeah. Hello?
It's about 5%.
5%. Okay. And lastly, the tax rate for the quarter was below 22%. Is that a normalized rate, or we should see going back to 23%-24%?
24%-25% is the rate.
24%-25%. Got it. Got it. Great. Thanks and all the best.
Thank you. The next question is from the line of Sanjaya Satapathy from Ampersand. Please go ahead.
Yes, sir. My question is that can you give us some indication about what is the sustainable margin from here on?
What is the sustainable margin from here? We really don't give guidance on that.
I'm just trying to understand in the context of the numbers that you have called out in terms of the recurring and non-recurring, if you can give us something.
As Vidhya mentioned, some of the expenses because of the hump in the launches, that's one time, and going forward, that sort of a hump will not be so much, but we continue to have to spend on the brand building and the mother brand, Royal Enfield, to build an aspiration, so there will be marketing activation expenses which will continue, but the hump will not be so much because these are all some of the products due to the COVID which came up for the launches one after the other, so that sort of an expenses will not be there, but marketing support activities and activation expenses will continue.
Got it. Thank you so much.
Thank you. The next question is from the line of Omkar Kamtekar from Emkay Global Financial Services. The current participants seem to have dropped from the queue. We will proceed to the next question, which will be from the line of Jay Kale from Elara Capital. Please go ahead.
Yeah. Thanks for taking my question. So my first question is, again, harping, the earlier question, what would you see in your endeavor of balancing profitability versus growth? If I look at the EBITDA per vehicle also, it is kind of a seven-quarter low. So I'm just thinking from a management perspective going forward, are you looking at sustainable margins when you balance profitability versus growth? Are you looking at EBITDA per vehicle growing from here? Because despite the high volumes, we've not really gotten the absolute operating leverage benefits which are expected when you have a very high volume growth. I understand the lumpy expenses, but the marketing expenses, like you mentioned, are going to go ongoing. So what is your target in the sense that to grow EBITDA per vehicle sustainably or margins, or how should one look at it?
See, if growth is the focus, what does it mean when you grow? Is that, as we mentioned, we haven't increased the pricing because we have to be an accessible motorcycle, and we also wanted to add value back to the product, which also our consumers have been looking at from Royal Enfield. We are conscious of it, and we are the market leaders, and we have the responsibility of continuing to grow, which is what we have done for the last one decade in India, and now we are trying to do it outside India also, the middle weight, so we have to do more activities around that in promoting the motorcycling as a culture and around that, around systems of the motorcycling, so there will be expenses which will continue. What one has to look at is not to look at an absolute percentage.
The growth has to be looked at on an absolute value, which we will actually get out of the overall revenue, and also on the EBITDA overall. That's how we should look at it, not on the percentage alone.
Understood.
Yeah.
Yeah. Just one more on your gross margin. So you mentioned that it is mainly because of mix. So how would commodities move in Q3 versus Q2? And going forward, how are you seeing the commodity trajectory?
Commodity has been largely stable. It was not a headwind. Though steel and aluminum had some upticks here and there, but as value engineering has been offsetting all those things, we are studying how it is with the entire situation across the market on the commodity movement and all those things. We will know in this quarter because we are into an SBP cycle. So during this cycle, we'll once again be looking at how the inflation is, how the commodity is moving, and accordingly, what actions to be taken. But as I mentioned, all the platform changes activities which are done, first is we have to land the value to the consumer. That's what we have done. Now the focus on all these products, on the value engineering also will start.
Understood. And just one last question. With this intervention of Battalion Black pricing, etc., how have you seen your customer profile change? Has there been an increased proportion of first-time buyers coming into RE or the upgraders' contribution has increased? And in that context, how is your RE to RE replacement growth panned out?
Look, I think Battalion Black, we launched into the market because when we launched Bullet on the J, which was the last transition on the J platform, market came back, especially on the area where the Bullet was loved and looked at in a different context. And they were looking at a few changes which are required. As an organization, we quickly went back, and then we brought the Battalion Black. In those markets, especially Delhi, Punjab, Chandigarh, Haryana, and part of UP, their market has come back. Dealers are happy. Consumers are happy. And now we are also opening up to the rest of India. As far as the first-time buyers which you are talking about, our first-time buyers is almost what? About 18-19% now. So that's what is the share of first-time buyers.
Upgrading cycle, as I've been always saying, that we are waiting for that moment to click in, and that's why we won. We brought in, and we are almost there at about 234 accounts now. We are slowly bringing in awareness about the upgrade to our consumers, so we are setting the base when the moment ticking, at least we can start getting into that journey faster, so that's a base is being set as of now.
Great. Thanks and all the best in the future. Thank you.
Thank you. Can you give me the last question?
Thank you. The next question is from the line of Amyn Pirani from JPMorgan. Please go ahead.
Yes. Thanks for the opportunity. Most of my questions have been answered. I just want to ask regarding this OBD-2B. Obviously, we wait for your price hike announcement, but any broad context as to what is the kind of cost inflation that we might see because of this? And should we be prepared for any wholesale corrections that you might do as you are ramping up or ramping down the older vehicles and the newer vehicles?
So maybe I'll answer the second one first. For every transition, be it from BS4 to BS6, we are the company. We are not saddled with any of the old inventories. We haven't gone in that. We'll always be conscious in transition. And so as even OBD-2B, the transition is well planned, and we have tested it, kept everything ready. Yes, you all know there will be some amount of cost increase due to OBD-2B, which will be there, but we haven't decided what the price increase should be or shouldn't be because that's a future looking that we have to wait for some time.
Okay. Okay. Thank you.
Thank you. Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to the management for closing remarks. Over to you, sir.
All right. Thank you so much for joining the call, and look forward to talking to you next quarter. Thank you. Bye-bye.
Thank you. On behalf of Eicher Motors Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.