Good evening, good afternoon, good morning to all the participants. Welcome all to the Q1 FY24 post result conference call of Eicher Motors Limited. We are thankful to the management for giving us the opportunity to host the call. The top management is represented by Mr. Siddhartha Lal, MD and CEO of Eicher Motors, Mr. Vinod Aggarwal, MD and CEO of VECV, Mr. B. Govindarajan, CEO of Royal Enfield, and Mr. Vidhya Srinivasan, CFO for Eicher Motors . Without any rest, wasting any time, over to the top management. Thanks.
A very good evening to all of you, and thank you for joining us this evening for our Quarter One FY 2024 earnings call for Eicher Motors Limited. I hope you're all well, and, yeah, thanks again for joining us. We've had, as you've seen the numbers, we've had an absolutely stellar start to this new financial year. We've had a great Quarter One, and have registered our best ever performance for the fourth consecutive quarter now. We recorded our highest ever quarterly revenue, our highest ever quarterly EBITDA, our highest ever quarterly profit after tax, and we've had significant milestones as well in both Eicher Motors and in VE Commercial Vehicles, last quarter.
At Royal Enfield, we had a absolutely fantastic sales performance in Quarter One, with more than 2.25 lakh motorcycles sold, so that's over 225,000 motorcycles sold, which is a growth of 21% over the same quarter last year, Q1. We continue to define the middleweight segment and grow the share of the middleweight segment in the overall motorcycle space. In international markets, despite a tough macro backdrop, where overall market has also been down for motorcycles, we continue to hold and even gain market share across most regions in Quarter One. Our the Hunter 350 that we launched around a year ago has really matured and hit all the right chords with consumers in India and around the world now.
As of July, we have a 2 lakh or 200,000 plus strong community for the Hunter across the world, and it's been just 11 months. We're really confident that the Hunter brand will keep growing. New customers will keep discovering this amazing motorcycle. It's also a testament to our capability at Royal Enfield of identifying sharply a new segment within our overall framework and chosen segment, and going after it with a very sharp, very solid, very thoughtful new product. We've, you know, it's become one of our higher selling models in just 11 months, which is tremendous. We've also launched the Super Meteor 650 across most markets in the world, and to tremendous response. We've had really, really good response in around the world, again, as the most refined, premium, middleweight cruiser, right?
It's really doing that job well in markets around the world. It's, it's very exciting to see our ideas that we've, you know, had over the years come into reality, come into the market, hit the road and be successful. It takes a lot, but we're there once again with the Super Meteor. On the EV front, we've made tremendous progress on all of our electric mobility plans. We've grown the engineering team over the last few years and have a very strong, capable engineering team. We've now actually also been growing the commercial side of the EV team, because it's not just a good product, we need to have a solid business, brand, distribution and every other aspect in EV for Royal Enfield. There's a lot of work going on all fronts, on the EV business, as it were.
Coming to VE Commercial Vehicles Limited, our joint venture with Volvo Group, Quarter One marks our highest ever first quarter sales for VECV. We're very proud of that. This is across all business segments, so light, medium duty trucks, heavy duty trucks, buses, and components. We've had our highest ever sales in all of the segments there, so it's, it's really quite exciting times. During the quarter, VECV also commenced delivery of the next order of 9 meter electric buses, which is Eicher Skyline E, we call it, to Kerala State Road Transport Corporation . We are now really in the thick of electric bus, you know, work in, or let's say, or electric buses on the road for VECV, an Eicher brand, which is again, a new journey altogether and doing well.
VECV is continuing to enhance its service and network through modernization, and in particular, our entire, let's say, enormous focus on uptime, as we've been calling it and as we've been doing it for the last couple of years, has really paid dividends of being able to give that satisfaction or that modern, modern uptime treatment to customers, where they're not used to that level of service, that level of support. Where their vehicles are just running 99+% of the time, and that's a promise we give our customers, along with amazing trucks, and that's the reason we're seeing good growth, good market share growth, good gains across the board. Yeah, that's on VECV. Coming to consolidated financials for Q1 FY24.
Our EML clocked its highest ever quarterly revenue, actually, at INR 3,986 crore, with a growth of 17% over the same quarter last year. Our EBITDA crossed INR 1,000 crore, that's INR 1,021 crore, up 23%. Our EBITDA margin crossed the 25% threshold, so it's at 25.6% against 24.5% last quarter. Last year, sorry. All of this resulting in a profit after tax of INR 918 crore, which is our highest ever, and 50% up from last year. Again, solid growth, solid gains, solid profitability in Eicher Motors. Last week, we also released our annual integrated report for FY2022-2023.
That captures our performance through the last financial year and our initiatives undertaken by EML towards a commitment for our next stage of growth and for a stronger ESG vision. I hope all of you had a chance to go through it. I'll hand over to Govindar ajan first, to take us through the business highlights for Royal Enfield, followed by Vinod Aggarwal for the Commercial Vehicles Limited. Thank you very much, and over to you, Govind.
Thank you, Siddharth. Good evening, everyone. Hope you guys are doing well. At Royal Enfield, you know, after registering a stellar performance in FY23, we had a very, very positive start for FY23-24. We have continued our growth momentum, and it's, it's there in all the product which is growing with that. To begin with, let me just share it with you what's the numbers in this Q1. We sold almost about 2.25 lakh motorcycles. That's about 225,000 motorcycles in this quarter, which is 21% higher than the last year, Q1. In India, we sold almost about 207,000. It's about 2.07 lakh. This is about 51% higher than the previous year.
As far as the network is concerned, you know, we, we mentioned that we are not going into the expansion just like that, so this is the optimization phase. We added, during this time, about 10 new dealerships in India and about 22 new stores in the international markets, taking the total overall network of almost about 2,034 in India and almost about 1,090, around that numbers across the outside India. During this quarter, we also inaugurated our new CKD facility outside India at Birgunj, Nepal, address the growing demand in Nepal and in the SAARC region. This is our fifth CKD plant, along with the CKD plants which are already there in Brazil, Colombia, Argentina, and Thailand. The new CKD facility at Nepal will actually locally assemble our entire range of motorcycles for that particular market.
We have already done almost 1,300 numbers out of that facility at Nepal. As Siddharth mentioned, though, we have made significant progress even in our EV journey. First, the focus had been on the technical area to get the right kind of people. We have almost about 100+ people who are dedicated and who are working on this area. As we mentioned the last call also, we are now into the execution phase. We are moving into the commercial side, where we are building up our own team, and we are also into the suppliers side, focus on make versus buy, which are to be made in-house, which are to be made by auto. On onboarding suppliers for the sales, motors, controllers, et cetera, that's an activity which is happening.
That's in the full speed now, the EV as, as an implementation phase. You all know Royal Enfield is all about community. We work with the community, so one such thing is our Motov erse. Last year we had almost about 18,400 people who registered for that. This year, Motov erse, is once again open for registration. Some of you please do join along with us. It's a three-day festival which you all should be there. It has been heartening to see the response even after we opening the registration in thousands, which is already started coming in. On the ESG, there's a lot of focused effort which has been going on in this. We have made significant progress in reducing the carbon emissions at our factories.
We have almost about 59% of our total energy consumption is now the renewable energy, which is almost a 4 times increase in the renewable energy consumption over the years. All our plants are zero discharge, and we also looked at water positivity. So water positive index for our, all our manufacturing plant is almost 2.6.
It means the water which we are consuming, we are actually populating more into the river. That's how it is. In this year, our key focus is also zero waste to the landfill, which we are taking on in every value chain of our entire supply chain. In conclusion, at Royal Enfield, it has been a very great beginning in this quarter, and working towards sustaining and growing this momentum in the time to come in this year. Now I will hand over to Mr. Vinod Aggarwal to take you through the VECV performance. Over to you, Vinod.
Thank you, Govind, and thank you, Siddhartha. Very good evening to all of you. Let me start with giving you an update on the CV industry. CV industry has done reasonably well in quarter one with bus segment and heavy-duty truck segment in the industry growing. Bus segments have grown, in fact, by around 35%, and heavy truck segments have grown by 10%. However, there has been some drop in the light and medium-duty trucks. At the same time, going forward with the economy continuing to grow and good monsoons and infrastructure investments continuing, it is likely that the CV industry will continue to grow in the balanced part of the year also. Now, coming to our performance highlights in brief.
Our heavy-duty trucks, both combined Volvo and Eicher trucks, we had the highest ever first quarter, with sales of 5,166 units, as against 4,006 units last year, Quarter 1, with market share of 9.4%. In light and medium-duty trucks, we had the highest ever first quarter sales of 8,308 units, as against 7,515 units, with a market share of 36.9%. As you all know, last year our market share was 31.2%. First quarter was 36.9%.
In the bus division, we had again the highest ever sales of 4,907 units in the 1st quarter, as against 4,219 units, with market share of 25.1%. Export markets have continued to drop, and they are under stress, our sales also have dropped significantly. Our sales in quarter 1 was 716 units, with a drop of 58.1%. We had the highest ever quarterly parts sales, with combined both Eicher and Volvo, Volvo trucks and buses of INR 478 crore, registering more than 25% growth in quarter 1 of current year.
We had the highest ever Q1 turnover of INR 424 crore in our components business, registering more than 18.5% growth over last year, Q1. We had, again, highest ever Q1 sales of 14,816 VE powertrain engines, registering more than 21% growth over previous year, Q1. We have seamlessly transitioned the entire range of trucks and buses to most Indian BS-VI, BS-OBD2 standards that came into effect from April 1, 2023. We continue to strengthen our position in truck segment with introduction of new variants, which will cater to the growing e-commerce applications.
On the electric vehicles business and as well as network and our other after-sale initiative, Siddhartha has already briefly mentioned, so I'm not covering that here. Giving the VECV's financial performance for Q1. Our total sales for Q1 have been 19,571 units with a growth of 12% over previous year Q1 of 17,469. As you all know, the industry, 3.5 ton and above, the growth was only 0.5%. We have outperformed the industry, resulting in our all-round market share growth.
As far as revenues are concerned, for quarter one, we had a total income from operations of INR 4,991 crore, as against INR 3,934 crore in quarter one of last year, with 27% growth. Our EBITDA margins for quarter one have been INR 387 crore, as against INR 218 crore last year, with a growth of 77%. EBITDA margin percentage, this year it has been quarter one, 7.9%, as against 5.7% last year. Our profit after tax has been INR 80.5 crore, as against INR 59.4 crore last year, quarter one. Our PAT percentage for the current year, quarter one, is 3.9%, as against 1.5% last year.
Now, I hand it over back to Siddharth, for taking it further.
Thank you, Govind, and thank you, Vinod, for the updates on Royal Enfield and VECV. Thank you all for being on the call with us today. It's been an absolutely tremendous first quarter for us, and it's a great start for us for the year. At EML, we continue to, we are committed to actually constantly elevate our product, offering our business, and this year you'll see a lot more exciting things from us in terms of new product, in terms of business development, other areas, so lots of interesting things going on. We are a solid, focused team at EML, and on the RE front, you know, very motorcycling first, motorcycling-oriented team. We have a robust, long-term thought process, strategic plan, that we go after, and world-class capabilities, infrastructure-
A nd outstanding product lineup. It's, you know, we continue to evolve, we continue to expand, our network, our capabilities, our stores, our distribution, all of that. We truly believe that this will continue, the growth for EML in the coming years as we speak, so both on RE front and on the VE front. That's it from my side for now, and over, over for questions. Looking forward to hearing from you guys now.
Thanks, sir. We can start the Q&A session. Requesting all to raise their hands if you have any question. Also kindly restrict your questions to two per participant so that we can maximize the number of people asking questions. We'll start the Q&A with Jinesh. You can start.
Yeah, hi. Am I audible?
Yes.
Yeah, hi. Quickly, starting with Royal Enfield performance. Can you talk about the divergence in margin performance versus the mix? We had lower share of exports and higher share of Hunter, but still, margins have improved quite substantially. What has driven this margin on Y-o-Y or QOQ basis?
Yeah, Lavanya.
Basically, margins have gone up about 1.4%, which is impact of price hike that we had taken in May first. That is flowing through the margin. Apart from that, about 0.8% is on account of, you know, the savings in sourcing costs, which we talked about last quarter as well. Of course, the national mix is therefore then weighing down, so that's essentially making up the overall growth in margin.
Got it. Got it. We have seen a very sharp increase in employee costs. Any bunching up in first quarter or, this is the normal trend right now?
No, well, actually, it's a combination of multiple things. One is, of course, we've had increments as far as the first quarter is concerned. Apart from that, a little bit of increase in number of employees, because obviously our production volumes and sales have also ramped up. I think that is also kind of adding to the employee costs and a little bit of granularity, but yeah.
Got it. The last question is on the export market. Globally, we have seen some calibrations in number of outlets on multi-brand ownership. They have come down from 958 in fourth quarter to about 820 now. What are we doing there? I mean, is it just the network optimization, what they've been? The second part question is there also. We've also talked about studio store in international markets. Can you broadly touch upon your evolving export strategy for the international market? That's my last question.
Yes, Jinesh. The international market, you know, I think in one other call, we also discussed we are a long-term aggressive company. We don't want to do anything here and now and rush into this. We believe that it has to be a full brand. That's how we are. Go to the market, develop the market, let the community enjoy the motorcycle, let them start demanding for Royal Enfield motorcycle. That's how it is. Wherever we have entered in the last three years, we have gained a market share of almost about 8%, averaging. I'm just saying, a few markets, we are almost about 9.2%, too. What are we doing there? As I mentioned, community build is the first activity which we are doing there.
A lot of new products which we are now lining up, which are all export worthy because statutorily it should match to all these things. Now Royal Enfield makes only the global products. In the area where, in terms of reach, we have, as of now, about 1,000 retail outlets. Most of them are multi-brand outlets, not distributed to a format, but in about 14 or so is our own. In those areas, what we are looking at is slowly increasing the, the reach through the multi-brand outlets. At a point of time, Royal Enfield multi-brand outlets, we have to go and search for people. Now there are a lot of people who are showing interest because the brand is known, the products are very good, acceptance is very well. That's where our focus is.
It is all about community building, new product launch, taking into this market, looking at the relevance for that and reaching out to the consumers, setting up the entire service network, which is required. The entire background activity, which is required for the growth, is what is the focus and that's happening.
Okay, are we also looking at the studio store format? That's what presentation talked about.
Yes, yes, Jinesh. You would guess that there's, so there are different formats, right? In India, we have a dealer format, we have a studio format. You know, why we have it is depending upon the size of the market, depending upon the ecosystems, dealer profitability, which one is better. We have our own exclusive stores, in the markets, and the sizes varies depending upon the market sizes and all. The studio format per se, of just having four motorcycles and all those things may not be there in the international market immediately, because there it is multi-brand outlet as a way of life. At the multi-brand outlet, now we are getting the prime space, wherever we are going. That's, that's how we reach to the consumers in the international market.
Thanks, Jinesh.
Thank you.
Next, we have a question from Chandramouli.
Hi, good evening, thank you for taking my questions. My first question is just on the competitive landscape. We've been sort of early leaders in creating the middleweight market in India, and now there are some other sort of credible competitors looking to compete in this space. We've always been sort of a long-term thinking company, so just wanted to hear your initial thoughts and your initial read on sort of the, the current situation and, and how you, how you see it progressing over the long term. That maybe?
Yeah, this is, look, of course, there's a, I mean, this is an inevitable question also, but, it's. I mean, competition is in itself inevitable. I would be, I mean, you know, over the course of the last 15 years, we have really grown the segment from sub 50,000 units, and I'm talking about the mid-size space in India, I'm talking about right now, which is 250-750 cc. We've grown it from sub 50,000 to nearly 1 million units, so 10 lakh units. It's a, you know, it's been a lot of work. In that time, we've had lots and lots of competition. It's not that we haven't. This is just a new wave that, you know, we are seeing right now.
We've had lots and lots and lots of competition from, from all the Indian manufacturers, from all the, from various European, American, in different forms earlier, now it's different. Also, let's not forget, from the biggest Japanese companies in the world as well, right? We've had competition from every angle coming in, direct, indirect, head-on, not head-on. We've been able to fend off the best so far, and we plan to do that again. I mean, but in our way, in the way we do things, right? It's not, you know, directly competing, it's not fighting directly, it's not worrying about them too much individually, but more about continuing to strengthen what we do and what Royal Enfield does really well and continue that journey, right? We've, we've really created, you know, a tremendous brand.
We've created a, I mean, really, really tremendous brand. It's not just the name Royal Enfield, it's the fact that it's on the tip of the tongues of intending buyers of motorcycles. It's more than just, you know, up there in the air. It's literally, you know, when you ask young people, "Look, what is a premium motorcycle in India?" "It's Royal Enfield, right?" That's what they say, and that's what they believe. There are so many things we do to fortify that, right? That's the community that we do. It's the distribution. You go into a Royal Enfield store, it, it looks nicer, the salespeople are trained better, they, they are able to offer you more stuff, they're able to talk to you better. It's just a totally different experience of our brand, right?
It's not something you can replicate very quickly. We continue to build all the strengths that we have, the community that we have, which is over 10 million strong. Things like resale value of our bikes, which is much higher than others. All of that, which fortifies the premiumness of our bikes. Having said that, we have over 90% share. You know, at some point, you know, it's possible that we could go down a bit because there's only one direction you can go through in 90%+. Which is fine with us. I mean, not that we will give it on a platter, but we believe that the market is there to be grown.
From $1 million, we believe that over the next couple, few years, it could grow to $1.5 million, and in the next decade, to $2 million and beyond, right? To be 80%-85% in a market which is, you know, double the current size is okay for us. I think we're quite happy with that. Yeah, that's, that's our take. I mean, I think there's, there's certainly credible competition, but there always has been, let's not forget that. We've managed to fend them off so far, and we certainly have thoughts and strategies to continue to, to focus on our growth cycle. I think most importantly, what I want to leave this conversation with is the, our focus on customer. We are not focused on competition because we are focused on customers, right?
We are seeing what, what's in their best interest, what gets them motivated, what gets them excited. We're not fixated on any one, third party who has nothing to do with us. We're fixated on our, our customer and our brand and our company. That's what we look at. Thank you.
Got it. Thanks. That's very helpful. My second question is just a related question around the, the product side. About 12 months back, during the analyst meet, we had revealed plans to launch between 13-14 new products over the medium term. I think we have delivered now on the Super Meteor 650, and we've also announced on the Bullet J-series . Just trying to understand the remaining sort of 11-12 products in the, in the product pipeline, what sort of time frame should we attach to that? Is it sort of three years, four years? Just trying to understand, you know, the cadence there.
Generally, if I have to tell you, you know, three years, four years, yes. The only thing is we have a slew of new products which are very differentiated, which will give a very differentiated experience for our consumers. Some of the products are ready, and we also want the product to get matured into the market when we launch, so we have to take some time and then launch it. Today we have almost about 400 odd guys who are working in our product development and the component development area. Now we have this slew of new products which are ready, which are yet to be launched in, in, in a particular time interval. We will space it. We won't be in a hurry to do anything because we are not that sort of a company, just to launch just something.
We will space it, we will bring it, but whenever we bring, always we have been a very disruptive product company, and that's what you will see when, when we are coming out with the new products in time to come.
Got it. Thank you very much, and all the best. Thanks. Next we have a question from Pramod Kumar.
Yeah, thanks a lot for the opportunity, and congratulations on the quarter number. My first question is pertaining to the other expedition line item. Is there anything related, which is causing the downward, downward pressure there in terms of, it's kind of reasonably lower quarter-on-quarter? Is it got to do with the launch cycle? Given that we did not have any launch and should we expect that?
I think you've answered, you know, the question. It's a little bit of a timing issue as well, because so I think our marketing campaigns, launch expenses have really not kicked into high gear in this particular quarter. We've also had a little bit of travel expenses, which are a little bit muted right now.
Fair enough. Second question is on the spares business or the non-vehicle business. Yeah, if you can just help us understand how has that kind of shaped up during the quarter? And how are we doing on the, the whole non-vehicle ambit, which is basically your accessories, spare parts revenue, all of that.
Non-motorcycle business, which is our apparel, accessories, and soft products, spares, promote, in this quarter, it has a gross about 25% growth, compared to last year, and it has been growing very well. You know, our accessories, we are adding SKUs more. Our accessories actually, you know, for the existing motorcycles, anyway, it is during the consumer journey, it goes through the, the MIY page, and then you can configure that against the styling, safety, comfort. That's what is the vertical which we give it in the motorcycle accessories. Also for the, the motorcycles which are sold about three years back, all the old motorcycles, for that also, we brought in a configurator wherein consumer can actually build the motorcycle accessories even in an existing motorcycle. To order that, that is also enabled, and that is also working.
At our service area also we are opening. Spare parts, we are looking at more than a revenue machine, which is very good, incidentally. We look at it from a consumer satisfaction angle, Pramod, because we always look at even the last washer, it should be available at any point of time, at any place when it is required. There should be no consumer should say that the part is not available, as a result, I'm not enjoying the Royal Enfield motorcycle. That's where we wanted to drive that business, and it is doing very well. To give you about 25% growth overall, and it's continued to grow.
The last one for Siddharth. Siddharth, your thoughts on the Classic and above category, because we've seen the category expand back to 50, 60 and above. The fact remains, Hunter has single-handedly pulled this category back from, from, from the, the slump, right, over the last few years. What are, what are your thoughts on by when do you expect the Classic and above category, the INR 2 lakh above price point kind of a segment to kind of come back, right? That is something which is still not anywhere close to the previous peak, right, and it's been like almost five years+ now. Your thoughts on what, what do you think is at play here? Is it just pure affordability, or is there anything else?
If you can just share your thoughts here, Siddharth. That would be my last question. Thank you.
Pramod, thank you. The way we look at it is multifold. One is, at one level, when you look at it, at one, if you remember many years ago, we used to say, look, there's overdependence on classic.
Yeah.
We had two-thirds of our sale on classic. Now that overdependence is not there anymore. We've got a range of products to service different segments in the market, and doing different jobs. I don't think we'll ever get to a position where classic will be two-thirds of our sales again. Having said that, we certainly see headroom for classic and others in that segment, like you said, to grow further. We've seen that already, and we have lots of exciting plans. You know, we have full teams that are working on four years on renewals, on thought process.
It's more, I mean, the product is there, it's great, it does a fantastic job, and now we're looking at more brand-led growth to continue to increase, rekindle the love, the desire for Bullets, for Classic, for that segment of bikes. Yeah, there's a lot of interesting things we're doing to get that back in vogue, let's say, and to bring it really up in people's eyes again as a real benchmark or flagship in a sense. I'm not talking about a price flagship, I'm talking about a thought flagship for Royal Enfield. We still think of Classic as that, and we're continuing to put a lot of love and energy behind it, and we're seeing some results in the market already. Yeah, interestingly, there for sure.
Thanks a lot.
Thanks. Next, we have a question from Kapil Singh.
Hi, good evening. Thanks for the opportunity. I just wanted to understand the demand environment, how are things shaping up right now? Also, you know, with the competitive launches, have you seen any impact on the bookings so far, or it's not really had impact?
As far as the domestic market is concerned, Kapil, you know, it's two months it was not so good, now it is slightly better. That's how it is, it's going on. You know, between June to July, obviously, it is seasonal, so there will be some amount of the numbers which will be here and there. Our retails have been very good. Our booking has been very good. In fact, I just went around all the, the regions to understand from the team, from the dealers, and all the festive season seems to be very bullish. Everybody are looking at a quite a good number in those areas. I think the discrete spending is coming back. Money availability is better, finance penetration is getting better. To that extent, I see the market will be growing in time to come.
International market, just to give you a favor, you know, we can't isolate ourselves from the macroeconomic conditions. In Europe, there is a bit of a pressure point, but what we are focusing is to clear off the retail more and more and working with the community. In markets like APAC and MENA, where the market is not growing, our market share has been growing. Once again, there also we are looking at the retail, but we have a few of new products which are going to come, as Siddhartha was mentioning, one after the other. That's going to actually kindle the love once again and more, more sales volumes for us, too.
Got it. Secondly, can you also, you know, talk about the cost outlook and how much price increase you have taken in the second quarter?
Yeah.
Yeah. I think, we don't necessarily talk about a cost outlook per se, but I think in the second quarter we've taken about a 1.5% price increase on certain models.
Okay. This is for both domestic and international markets?
Only domestic. international, we do, yeah. In certain markets we have taken, but that's just a market-specific, model-specific, action.
That's not a painted brush type, so it is only a few products, a few markets, which we have weighted depending upon the cost. You're asking what the cost outlook, if you're looking at the commodity cycles and all those things, Kapil, I think that's not in the imminent as of now, but we have to wait and watch during the festive season, how the consumption is going to be and how China is going to play. To that extent, I don't see it to be a major problem at this stage, but when it comes, then we'll, we'll react to it accordingly. Our value engineering pipeline is very strong.
Sure. No, sir, what I was trying to get at is, if there is a tailwind that is still left, like we got this quarter, that, that was where the question is coming from.
No, no, I, I figured as much, but, we don't actually comment. Thank you.
Sure. Thank you.
Thanks, Kapil. Next, we have question from Hitesh Goel .
Yeah, thanks for taking my question. Basically, you know, you've taken this price increase again in July, right? You said costs are muted. Last quarter also we had discussed that, you know, we have taken a price increase to pass on the cost, but we have seen some benefits coming through on margins on that. Can you talk about this price increase? Is it opportunistic or is it just a pass-through?
You know, pricing is not to be looked at an opportunistic or a pass-through. What we normally look at is, there is a business model, then there is a value proposition for the consumer in relative terms. That's how consumer looks at it, and what's an EMI? Because now the finance penetration is actually going up, so we have to look at it. If there is a commodity pressure which comes in, obviously we have to look at it. How do we do that when everybody does it? Because the relative price of everything goes up there. That we will look at it as an opportunity, as we are mentioning.
We have a cadence of actually going through the cost and what is happening, what's in the market, how is the relative position, is that our motorcycles are okay, how the consumers see the value proposition for us. That's a constant exercise we keep doing it. Accordingly, we calibrate the pricing.
Yes, it is basically. That's what my question is. It's a cost plus pass-through, right? It's not like because the penetration, there is an issue in terms of affordability, right? We have seen that in last three, four years. Now why industry is taking price increase when, you know, there is no need to, because we are not seeing costs going up. That was my question.
Yeah. Kapil, it is like this, it is not that always, you know, your product is priced at a particular level, and there is a cost pressure which comes up, and you have to do cost plus and then maintain the margin. Somewhere, what we have to look at is, for that particular price position, which we have given it in that, and the consumer sees a value. If it further goes up, will it, will it actually have a negative impact onto the product and the volume? That's what is a rebalance, which we also said. We said we are growth focused now, and to that extent, we won't be looking at the profitability. The cost plus is always towards the profitability, but we will look at it, how do we grow the market, and then look at it in an absolute pool.
That's what is the, directionally we are working on, Hitesh.
Okay. When can we expect the next motorcycle, like, Bullet 350 and all? There are media reports, that it is supposed to be in August end or something. Can you give some sense on the near-term launches? At least a timeline.
There are no Bullet we have sent you. The, the, the media invite and all the dates and all, that launch is really no plan. My mind is fully on that, of how do we celebrate and enjoy the Bullet's legacy and what it has brought us here. As Siddhartha was mentioning, we have a few of new products in all the categories which we are working on. We will come with more and more new products, and we'll give you the details when we are coming closer to the launch presentation.
Sure. Thank you. Thank you very much. All the best.
Thanks. Next we have question from Gunjan.
Hi. Thanks, team, for the opportunity. I had two questions. Firstly, on the exports, you guys talked about the macro weakness, you know, that's impacted the volumes. I'm just, you know, two-part questions essentially, you know, how should we then think of full year F '24 outlook for exports? Beyond the near term, also, if I have to think about exports, I mean, where does the growth come from? Is it market share? Is it category expansion? How should I think about it?
You know, market share is a, it's a derivative, Gunjan, to be honest, because we normally don't look at it only the market share. In a market which is already existing and our brand is getting accepted more and more, you know, I can't give you a direct answer of where exactly the numbers of international market will be, but I will tell you where the brand love is. I think I mentioned to you also is, you know, we, we were looking at a rider community in Europe. It's almost about some 17,000-18,000 people signed up for that. That's the product love which is coming up and the brand love coming in.
We have, mind you, we have only almost 1,000 retail outlets as of now outside India, and there is a huge potential which is there for us to grow. We are not doing just like them because we have to take the macro conditions of the particular market now. We have to be careful about not loading the dealers. We wanted to do it in a systematic form so that the ecosystem is also profitable. We are slowly opening up, and there are enough prospects which are cleared up for all the markets. The reach is going to be one major lever for the international markets to time to come. All the new products, which are going to come one after the other, because Royal Enfield nowadays are making only the global products.
It is not a country specific unlike earlier times. All those products also will create its own category in that market.
Okay, got it. The second one is on Hunter. You know, great scale-up that we've seen in the last one year. I mean, I remember, you know, maybe last conference call or prior one, you had mentioned that, you know, there's a lot more opportunity for Hunter to still scale up. Given that the volumes are now at 16,000-17,000 units a month, do you still see there are some gaps where, you know, this model can scale up from the current run rate to, say, 20,000-25,000? I mean, I'm not trying to get a number, but directionally trying to understand the potential of this model from where it is right now, or you think it's matured?
Look, I think for a product, one can't say it has come to the maturity level, Gunjan. Obviously, I'm not going to give the number exactly as you said, but I'll tell you directionally what. Hunter, what is this product? Once again, to give a clarity to everyone, is that people loved Royal Enfield brand. They wanted a product which is a bit more different and agile, and it is, it should be nimble, and you can relate to the product, and it is compared to the other products, can be slightly at a lower weight. That's where we thought that we should bring it to the younger audiences. What we wanted from the product exactly is what it landed into the hands of consumers.
That's why I mentioned when the metros are, started taking young guys, now the rural areas are also now started taking on the Hunter. International market, not that the Hunter is available in all the markets. Even in few markets, we are just opening up. The Hunter as a franchise, overall, it is growing for Royal Enfield. We see there is a huge potential for the Hunter in times to come.
Okay, got you. I join that picture. Thank you.
Thanks. next we have question from Vinay Singh. Vinay, you are not audible. Okay, next, we can take question from Arvind Sharma.
Hi, good evening. Am I audible?
Yeah.
Hi, good evening. Thank you for taking my question. This is on the Bullet as and when it comes on the new J platform, essentially a UCE platform would not have any model. Does that make you more efficient in terms of higher usage of the J platform? Are there any cost efficiencies associated with it? The second would be on the new model launcher. I know you're not sharing details, but, could we expect a new model or is it a new platform that you're launching in, probably in fiscal 2024? Those two questions. Thank you so much.
Bullet, it is on the, the super refined single cylinder J platform. That's the last transition which we have to do from the UCE platform, which we have been using it for almost a decade now in all of our products. That's what is the launch, which we are talking about. J platform, now it is there in all, all our products in the 350 cc. To that extent, the scale benefit, which will actually be there, will also be there for the Bullet. Which we will look at it exactly. What is the second question? The second question was about.
New launches.
New launches. After the Bullet, we have, as I mentioned, there are a lot of new products, CTGs, variants, all those things which are lined up. You know, we always look at what's the kind of an experience which we wanted to give it to the consumer. For example, Scram, which we brought in from a particular platform. Because we felt that in the same platform, we can come out with one more motorcycle like that, in the new platforms, new products which we are doing, and we'll always be looking at it in a platform business, and we'll give the adjacencies which can be given as an experience to the consumer, we'll continue to work on. You will see a lot of new products which will come from Royal Enfield stable.
Thank you.
Just to add on the platforms bit, that of course, I mean, eventually when we discontinue one platform, it does lead to a lot of. I mean, of course, scale leads to direct benefits in terms of unit cost reduction and all of that. I'm not sure how much more in terms of, you know, moving from UC to J, because we already have a mature J volume. Of course, we will add to it. There may be some gains there. I think the bigger gain is in the fact that, one, the product is very different. It's much more modern, let's say, and refined and all that. I think most importantly, reducing one platform helps a lot, right?
Otherwise the amount of effort and energy required by the company to continue to develop a platform, because no platform is standing still. You're always improving it, changing things, there are issues in the field, you're solving problems. All those things happen in a running platform. If you're able to reduce one platform, that actually helps tremendously in, in indirect costs as well, and efficiencies, let's put it that way.
Thank you so much.
Next, we have a question from Pramod Amthe .
Yeah, hi. Thanks for this opportunity. Just want to check your feedback on this competitive intensity. Are you surprised by the price aggression by international brands? One. Second, given, what are your feedback from the dealer levels, which products or what are the customers doing, wait and watch? If you are to fight back, would it be pricing or you would look more for a market promotions?
Sir, do you want to take or shall I go on? No, you carry on, Govind. I'll again add later.
The first is about the surprise element, which you are talking about. Maybe it'll be surprising to them on how exactly they will price it like this and continue to be there on that. You know, as far as we are concerned, we don't take head-on with any of the competitions. That's not what we are. Because we, you know, as a company, once again, we love motorcycles, we enjoy working with the community. We start looking at what sort of an experience they want and how can we build, because we go work with them and then see and ride with them, and that's how we are. All these new products which are being launched and all those things, you can't react to it then and there, because any new product, it requires almost about four years for you to bring in.
Until we launched it in August last year, it's almost about four years back, which we do that. We have our own path, which is charted, and we have lineup of new products which we have to come in. Because we work with the community, we understand what sort of an experience and what are the new areas where the consumers are looking for. That's how our new products are filled in, and then we'll continue to do this. We don't directly alter anything as it is efficient just because some competition is coming in now.
Anything on the dealer or customer feedback, in case if you have?
Anything on the customer feedback about the products which they have launched?
No, on the competitive. Are they waiting or are they still continuing the same rigor to come to the-
Where is the product? It's all in, it's all in discussion. Where is the product? Nobody has experienced the product as of now. Unless and until people experience those products, and that's how, that's how people will know, right? You know, to Royal Enfield, from 50,000 motorcycles to almost about 1 million motorcycle, we built it over the years and we know the nuances. We get what are the issues, how we have to do that, how to ramp it, what are all the problems which can be there. You know, Now it's all about, there are a lot of hype which is there. Once the product comes, then only people can actually give the feedback and all those things. It is only a few reviews.
Sure. Thanks.
Thanks. Next, we have a question from Raghu Nandan.
Thank you, sir, for the opportunity. Congratulations on strong results, and thank you for the comprehensive investor presentation. Two questions. Firstly, the share of about 250 cc motorcycles has increased to 8% of industry versus 2-3% 10 years ago. How would the share increase over medium to long term? What would be the share if you take the top 10 cities or some of the urbanized states?
Raghu, if in case I have to talk about the middle weight, As we mentioned, in an absolute number, it is go through it. It is from 50,000 at a point of time to almost about 1 million motorcycles. That's the growth over the decade. From here, where do we see it? Our understanding is that there are enough disruptions which are taking place, but I see, especially, I see vehicle in the premium segment, it is going to continue to grow. In that growth, the overall volume will grow, and as because we have enough new products which are coming in and our own activities which we are doing and working with the community, we'll also see our numbers going up, Raghu. That's how we look at it.
Got it, sir. On, on exports, on the by existing assembly units, what would be the capacity and how do you see the benefits on volumes from these facilities?
Benefits maybe Jagrati can add up. I'll tell you what's happening in terms of capacities. you know, in most of the areas in the CKD plant, Raghu, what we have talked about is only to start with the single shift operations. There is potential for you to increase another one shift in all the areas. It is easy for us to go and put money and put a big plant in that particular area and look at the market. No, we have cracked the code of doing it in a modular form, even our CKD is in a modular form. In all those countries now, from a market share from nowhere, we have come to almost about eight, nine%. That's all being fed by our CKD plant now.
We have reached in the middleweight, almost number two position in Thailand, and this is all being supplied by the CKD plants there, and similarly in Colombia and Australia. In all those areas, if I have to double it for one more shift, if I have to open it, then I can double it. If I have to tell you about the exact number of all those things, maybe I have to get back to you, Raghu, on sharing what will be the number in all the CKD plants one after the other.
Thank you, sir. Wishing you all the best. If you can just share the finance penetration in domestic market, how it has increased over the years?
It's about 60% now, so it's been growing quite, well.
Thank you, ma'am. Thank you so much.
Thanks. next we have a question from Hitesh Goel. Hitesh, you can unmute yourself.
Sorry, just wanted to check if we've, launched the Super Meteor in the U.S.?
Not yet, Hitesh, it's in the, in the cars.
Okay. Any specific how, how is the US market performing for us? It's been one of the largest markets. Do you see this slowdown impacting volumes there? If you could give us some color.
As of now, Hitesh, as, as I mentioned, you know, our focus is in retail. That's what we are doing in those markets. U.K., as I mentioned, we are taking on our own, the entire market activity, development activities from the distributor directly, we are going to do that, setting up the dealers. That's also a transition which is taking place. In all those markets, as of now, the market is not growing. It is slightly opening up, that's where it is. Where the good thing which is happening is that the retails are better. Our market share, we are marginally gaining or holding on to the market share, so we are not losing out anything. In my understanding, some of the markets will open up in another about five, six months' time. That's where I see it'll open up.
It's only, once again, readings and personal understanding of this. There is no science tool to say that this country will open up by this particular point of time. We will only be looking at consciously loading into those markets. We have a lot of new products which are going to come, and that new products are going to get us new consumer eyeballs into those, and that's why we are seeing there's a huge growth potential which is possible for us. We have almost about 1,000 retail outlets outside India. We are focusing on increasing those retail outlets in all the markets, but we will not rush ourself. We will go systematically because we always look at it has to be incredible over a period of time. This should be a full brand. Our focus will always be like that.
Sure. Thanks. Just one more question. See, the waiting times on all your models range from 1 month to six months. What is the cause for that? Are we running over capacity or how do you see it? Is it a shortage of parts?
Not really, Hitesh, you know, what happens is, every product when we come out with a business case, vis-a-vis what is the market acceptance and numbers, all our products have positively surprised us in a way. We have put something as, as a capacity, and then we started looking at the market response has been very good. There is a lead time which is required to come back and then give that extra need which is there in the market. That's the capital which we have to keep putting it in product after product. Most of our products are, as of now, about three, four weeks types, and barring few products, for which also we have already started action. That will take care of the supply situation for those products.
Sure. Thank you. Thanks a lot.
Thanks. That was the last question. Over to management for any closing remarks.
Is that the end?
We'd just like to thank you, guys. Like, thank you very much for joining us late today on this call, and, yeah, we've had a absolutely tremendous quarter, first quarter of the year. It gives us a good momentum into the, into the rest of the year, both on the RE side and the VECV side, so EML as a whole. Yeah, thank you very much once again, and look forward to catching up with you in a quarter. Bye-bye.
Thank you, everyone.