Hi, Divya. Hi, Vasu. We are online.
Yeah. Good evening, and, happy Dhanteras to all the participants. Thanks to Eicher Motors management for giving us the opportunity to host the Q2 fiscal 2024 post result concall. We have with us the senior management, represented by Mr. Siddhartha Lal, MD and CEO of Eicher Motors Limited; Mr. B. Govindarajan, CEO of Royal Enfield; Mrs. Vidhya Srinivasan, CFO of Eicher Motors Limited; and Mr. Ken Troll, CFO of VECV. So over to you, Siddhartha, for your opening remarks.
Hello, thank you so much, and welcome to all of you for our quarter two, the financial year 2023-24 earnings call for Eicher Motors Limited. I hope you're all doing very well. This has been an excellent start to the new financial year for us, and we continue to hit new milestones in Eicher Motors Limited. But before delving into our quarterly updates, I'd like to thank all the shareholders for the very strong support towards the resolutions that we presented during the AGM and postal ballot recently. We really value our long relationship with all of you and with the shareholders, and look forward to a robust, trust-based partnership between us, and continuing our journey towards enhancing our corporate governance and working closely together. With this, with the new additions, the EML board now comprises of our chairman, Mr.
Sandilya, independent director, B. Govindarajan here, and myself as executive directors. Vinod Aggarwal, who's not here with us today, he's normally here, but he's being represented by Ken. But Vinod Aggarwal is the non-executive director and non-independent director of the EML board. We have four other independent directors, Manvi Sinha, Inder Mohan Singh, Mr. S. Madhavan, and Mrs. Preeti Chopra. So that's the new constitution of our board of eight members. Now, let me begin by sharing a few business highlights for the quarter. We've had our highest ever volumes, revenue, EBITDA, and profit after tax for any quarter. In September, we had a spectacular launch of our new Bullet-
Recording in progress.
Celebrating the 90-year-plus legacy that we have for a Bullet brand, probably the longest running of of any automotive model. And this time, it's new avatar on our super refined J Series engine. With that, we've also transitioned all our high volume models from UCE model platform that we've developed in 2010, 9/10, to our J Series, which has been extremely well received, as is the motorcycle. Very importantly, very recently, last week, we attended EICMA Motor Show in Italy, which is the largest motorcycle event or trade show in the year. We showcased the all-new Himalayan, with an absolutely spectacular response from global audiences. The new Himalayan is an evolution of our first adventure tour bike, the that we launched in 2016, which is the Himalayan 411.
As customers have evolved and markets have evolved, terrains have evolved, for us it was really important to create a motorcycle that retained the DNA of the original Himalayan, which had a lot of success. But we wanted to give it a lot more power, torque, refinement, both on and off-road. So that's what the promise of the new Himalayan is. It's based on our... It's the first motorcycle that's based on our all-new Sherpa 450 engine, which is the first liquid-cooled, dual overhead camshaft engine from Royal Enfield. We also, B. Govindarajan, myself, our management, we also hosted the world's automotive experts in Manali just two weeks ago. Journalists, content creators, others, for a thrilling adventure it was, and great experience in the mountains on this new Himalayan. And the response and feedback that we got from them was absolutely tremendous.
I mean, people are calling it absolute best-in-class. People are calling it as a global disrupter, the best value adventure tourer by a mile. All the embargo was lifted today at noon for the reviews. The reviews have started coming out today at noon, so just a few hours ago. I encourage all of you to go and have a look at the reviews from both the Indian and the international journalists and content creators. I, I've been going through them as much as I can in the last few hours, and it's a game changer, this new Himalayan. It's a very, very, very strong motorcycle from our side and has the potential to be a world beater. So it's for markets around the world.
At the EICMA show, we also unveiled a special project, which we call as the Electric Himalayan Test Bed. It's a new expression of our sustainable exploration for the future, and it's a concept right now of what Royal Enfield electric adventure tourer could look like. It's a concept motorcycle, it's not meant for production necessarily, but to get more interest, feedback, and understanding from our side. But it is a motorcycle, it is a laboratory in a sense, more than a concept, because we have actually used this motorcycle and prototypes like this in the Himalayas. We've done a lot of testing, a lot of validation, and we plan to continue to evolve it. This is not gonna be the final guise of what we come out with, and if we come out with.
But again, it's to show all of you also what an electric adventure tourer from Royal Enfield could look like. Coming to VE Commercial Vehicles, our joint venture with the Volvo Group. We have really enhanced and fortified, I would say, our market share across all categories. In light and medium-duty trucks, heavy-duty trucks, buses, we've had excellent market share gains in all of these areas. And we delivered our best ever second quarter in terms of units sold across all three categories. The parts and powertrain sales clocked a strong growth as well in the first half. And once again, VECV has been ranked number one commercial vehicle manufacturer for the third successive year, and as a dealer satisfaction survey conducted by FADA, which is the Federation of Automobile Dealers Association.
Again, showing our extreme support work with our network channel partners, which are really important to delivering customer satisfaction to our dealers. We also, VECV has also continued on the sustainability journey by delivering electric trucks and buses to customers in various applications, and we're developing long-term partnerships with leading logistics and bus operators for this area. Today, we have Ken Troll, who's here, the CFO of VECV. He will take us later through more details about the commercial vehicles journey. Right now, moving to the financials for quarter two, and for the FY 2023-2024.
At a consolidated level for Eicher Motors Limited, which does not include VECV, for the second quarter, our revenue is for the seventh successive consecutive quarter, we've marked our highest ever revenue for EML, this time at INR 4,115 crores for the quarter, up 17%. EBITDA is our fourth consecutive quarter, marking highest ever EBITDA for EML, this time crossing INR 1,000 crores once again, I think the second time, if I remember, at INR 1,087 crores, up 32% from last year. And our profit after tax is our fifth consecutive quarter, marking the highest ever PAT for EML at over INR 1,000 crores this time, so INR 1,016 crores, up 55% from Q2 last year. So absolutely stupendous financial performance also.
Now I hand over to B. Govindarajan, who will take us through the business highlights for Royal. Over to you, B. Govindarajan.
Thank you, Siddhartha. Hi, everyone. Hope you guys are doing well. At Royal Enfield, and we have been continuing our running in top gear, and we have registered our highest ever H1 volume. The momentum is very good. It's very strong. It's an exceptional performance in the second quarter. In this quarter, we sold about 209,700 vehicles, motorcycles in the domestic market, which is almost about 14.6% growth from last year at the same time, about 183,067 motorcycles, which we sold. We have had a very strong growth in the sales of our motorcycles during the fiscal period, and I see the momentum continuing. Launch of all new Bullet 350, as Siddhartha mentioned, it marks the completion of transition to the J platform.
I must, I'm very happy to share with all you people, the traction was very good. The new Bullet has received an overwhelming positive response from experts and from consumers. This will get launched, the all-new Bullet will get launched, in the international markets also over the coming months. Because it's Euro 5 compliant, so it can be sold in other markets also. In the international markets, we sold almost about 19,780 motorcycles in Q2, which is a growth of about 9% over the previous quarter. We have maintained our market share in our key markets. RE is a leading middleweight brand in the UK and among the top three in Europe, and almost 9% market share in this region.
In the Americas, we have around about 7% market share, and in the Asia Pacific region, we are currently at almost about 8.99% market share in the middleweight segment. In our international markets, our retail has been ticking very well. That's a good sign for us, just wanted to share it with you people. In the recently announced results of the dealer satisfaction survey by the Federation of Automobile Dealers Association, FADA, Royal Enfield emerged as the first runner-up in the two-wheeler OEM category. We moved substantially in the list, the score increasing by about 96 points. What Siddhartha mentioned about the all-new Himalayan, it's a global media first ride at the global unveil, which we did at EICMA. This is the motorcycle which had been built by the Himalayas.
The all-new Royal Enfield is inspired also by the Himalayas, and that's how all our motorcycles are, and engineered for their real-life adventures. This is with the more power, more torque, using the long stroke design to give an excellent low RPM performance. This is what this Royal Enfield represents in, in motorcycling, and that's the core DNA also as, as a Royal Enfield feel. You know, when we were doing this closer to the launch, we also decided that it was a time for us an ultimate journey, the epitome of adventure motorcycle riding. So we actually took the, the finished motorcycle, which is there for the market, and one last time we should do a test from our factory, Oragadam. You know, we call it from, sea to the summit.
Chennai at about 22 feet sea level to 19,024 feet from Umling La. We tested the motorcycles, and, you know, that's what it is. It's a proof that this, this is a motorcycle which is inspired by Himalayas, built by the Himalayas. We wanted to do the final test also in that Himalayas. Now, the, the motorcycle is fully ready, and that's how we unveiled that, EICMA. We also celebrated our global monthly ride, the one ride, where we see the participation of more than almost about 28,000 motorcycle enthusiasts from 58 countries and about 300+ cities in India, who came together for the largest customer ride, which India has seen so far. Also, on the sustainability front, which I wanted to share a few points. We have been improving a lot.
Around one third of our manufacturing is done through green energy in all our facilities. As I earlier also shared with you people, all our plants are water positive. Now, it is almost two times. So more and more recharge is taking place into this, and all our plants are zero discharge. We are gearing up to the next edition of Motoverse, which is in this month on the 24th. I'm glad to share that the lots of exciting updates in the entire motorcycling community will be there. Look forward to see you, all people also in the Motoverse. The successful recent launches and the new platform launch, which we did on the Himalayan, we are well on our way to ride ahead on our strategic goals.
The new launches, which are all in the lineup, which are all there in the pipeline, and we are prepared for our growth journey in India and across the other global markets. We are very excited about what the future holds for us. Now, I will hand it over to Kenneth Olb to take you through the VECV performance and updates. Over to you, Kenneth.
Thank you. Good evening, everyone. Another solid quarter for the commercial vehicles. We had the highest ever second quarter sales of 19,551 units. On the heavy duty truck side, highest ever second quarter with the sales of 5,291 units. On the LMD side of the business, light and medium duty side, highest ever second quarter with 9,571 units. On the bus division, highest ever sale of 3,214 units. Also, as Siddharth mentioned, highest ever quarterly parts sales. We grew 29% over the same quarter last year. Also by our powertrain unit, we sold 14,834 units, which is also the highest.
As also mentioned before, we won the FADA dealer award for the third consecutive year. Moving over to some financial highlights. Revenue ended at INR 5,129 crores, up, or almost 22% compared to last year. EBITDA INR 404 crores, and the EBIT margin of 7.8% versus 5.8% for the same quarter last year. Profit after tax, INR 186 crores, up from INR 81 crores last year. And with that, I hand over back to you, Siddhartha.
Yeah, thank you very much. That's all from my side. We've had really tracking, you know, let's say, quarters both at RE and VECV, so at EML combined. And the festive season is on us. Things are going well. So yeah, it's... Thank you very much, and wish you all a very happy Diwali. And yeah, look forward to your questions. So over to you for questions now, please.
Thanks, Siddhartha. Requesting participants to raise their hands to ask questions.
Thank you, Vasu. We'll take first question from the line of Pramod Kumar. Pramod, please go ahead.
Yeah, thanks a lot for the opportunity. Can you hear me?
Loud and clear, Pramod.
Hey, Siddhartha. Hi, great. And I think congratulations on the good set of numbers. I think there's a beat there on the operational performance. But I'm more interested in Himalayan, Siddhartha, and what the Sherpa 452 do for us, because the reviews that just started dropping in today looks really great. I think a lot of can see the lot of hard work what you guys are putting. So if you can just help us understand, from where Himalayan 411 was and where 452 is, the kind of transition what you've done. What does it potentially mean for the company in terms of the kind of, the kind of, addressable market here, both in domestic and international side?
Because the segment is clearly doing extremely well, even in domestic, and this product looks pretty good. So if you can just, to begin with, help us understand what could be the volume opportunity here, and what could be the brand opportunity more than that, because this product can take you to many new markets, many new terrain in that sense. So, yeah, Siddhartha, to begin, to kick it off, probably we'll start with that.
Sure, Prabuddha. I think it's very pertinent because we really do believe that this can be a big, huge growth driver for us, both in numbers and in stature and in many other ways. The first Himalayan, which we came up with 7 years ago, was really a domestic market product. It was meant for India. It was meant to test the market. I mean, of course, we were all in on it, but it was, you know, the segment didn't exist, so it was really our stab at what we thought the segment would like. So it was a full-on adventure bike. But, you know, it was our first attempt at it, and it was. It did really well. I mean, we sold over 200,000 numbers globally since then, so it's been a great run.
But we got a huge amount of confidence from what people loved about the previous Himalayan and a lot of learning, so we have put all that into the new Himalayan. So as a result, for example, just on the spec side, you know, we've got it's—I mean, conceptually, you can say, okay, it's gone up from 410- 450, so, you know, only 10% increase. But really the... For example, the power has gone up by 65%, I think. The torque has gone up by 25%-30%. It's got a water-cooled engine, so it revs higher. It's got... We've kept a large part of the ergonomics because that's how, that's what people loved about the bike.
The accessibility, it's got, you know, the lowest seat height configuration can be just over 800 millimeters, so 80 centimeters. So really, someone who's even, let's say, 5 foot 3, 5 foot 4, can get one and a half feet on the floor. So it's stable, it's good, it's accessible, it's got. We've taken the chassis. I mean, the engine, I told you, it's anyway, it's super refined, gone up. It's ride-by-wire, so the exact configuration we can give it, the exact, let's say, nature of fueling and response is absolutely magic. The chassis is also totally next level. So our previous one was really good at off-road. This one is even better at off-road. It has excellent on-road manners as well. We've got a Showa suspension, which you can see the reviews. People absolutely love it.
They think it's fantastic, both off-road, on-road. Our TFT screen is breakthrough. I mean, nothing, you know, even bikes three times the price, don't have that kind of technology now on the instrumentation. And it's got, we insist we only have Google navigation on it, no, no third-party other navigation, because people only trust Google in navigation, and we had to have that, so it makes life really nice and simple on our screen. And so we've pulled out all stops. It's been absolutely fantastic. It's for us, the ambition is that we really believe that this motorcycle... Earlier, we were making motorcycles, you know, with our twins and other motorcycles that were getting to and had become world-class, right? We were, you know, previously, we were not 10 years ago, but then, after the twins, we were getting to world-class type of bikes.
We are now saying this is, and what we hopefully will hear from the press also, this is world beater. So this is setting the standard. It's better than... It's not just better, it's head and shoulders better than anything else in the world. It has the potential for changing the entire, I mean, in the best case scenario, I can't say it will, but in the best case scenario, our ambition is that it will actually shake up the entire adventure touring segment in the world. Even, I mean, people—we want people to question themselves that, "Should I really be buying this motorcycle, which is 3 times, 4 times as expensive, when I get every single thing I want out of the Himalayan? And it's better at certain things." To honestly, to go off-road, it's even better. Okay.
In some, you know, in an Autobahn in Germany, going at 160 kilometers, maybe on the margin, there'll be a bike which is three times more expensive, which is better. But other than that one very peculiar scenario, which not any of our customers are going to be doing regularly, it is a better bike than bikes three times its price and size, you know? So we're really, really confident that we've taken all the inputs. We've done everything we can to make it really a world beater. So that's on Himalayan. Anything you can add, Pudum?
Nothing. Well, Prabuddha, the only thing which I can tell you is, you know, it is with our decade experience of riding in Himalayas and about 2016 to 2023, about seven years of riding the Himalayan portal across the globe, the extreme terrain. And so we retained some of the DNAs of that Himalayas, which is required.... Then we act. Because in the evolution, we spoke to the explorers, globetrotters, and to the people who are into an athlete, just to get what all required to be the world leader, as I was mentioning. All those things are incorporated, which we tested. That's where the confidence is, that it will actually create one more movement in the entire adventure motorcycle.
And Govind, just to push that a bit, on the volume context, if you could just help us understand what are the volumes of the outgoing platform on a steady state basis, and what could be the potential here, if you can, if you can just help us there, quantify this opportunity?
Look, I think, Pramod, from a motorcycle in which the adventure motorcycle had been heavy, intimidating, not accessible.
Mm.
So when we launched the Himalayan in 2016, we changed the game. That's why it created a movement by becoming an accessible motorcycle. Here is a new motorcycle, which we just launched about three days back, and the reviews are just out today. As I mentioned, with all the distilled DNA of Himalayan, the Himalayan motorcycle, with the seven years of riding that across the globe, and incorporating all the best things which are required for future. So obviously, this motorcycle will create one more wave. How much is that? What it is? It's very good. There's a good response. The reviews are outstanding. Everybody feels it. It's a very different motorcycle, which is very accessible, not at all intimidating, which inspires confidence. And as Sath was mentioning, it is. It has a full-blown navigation system, which is there.
You know, the suspension is so well tuned for the extreme conditions like off-roading, and also to use it on the city rides in any of the traffics. So to that extent, the motorcycle is well thought out, executed, tested, as I mentioned, very well, the place where it belongs to. That's why we did a last test also from Oragadam, a bit of Chennai. There are some good roads, for 5,000 km, and then we also took it to the Himalayas to see whether the motorcycle is really behaving the way we wanted, and it all has turned out to be very good. So it's a winner product in hand. It will, over a period of time, will certainly grow. How much? We'll wait for some time.
Thank you. Second question is on the-
Pramod, I'm sorry, can you come back in queue? We have a long queue, and we have a hard stop.
Yeah, I'm back in the queue. Thank you.
Thank you so much. Next question is from the line of Kapil Singh. Kapil, please go ahead.
Yeah, thanks for-
Yes, please continue.
Yeah. Yeah, I said, thanks for the opportunity. I just wanted to ask about the new Bullet. You know, we had also launched that. So what kind of response you have got for that? And also, if you could share, what kind of growth are we seeing in the festive season so far?
Well, I think, you know, the Bullet 350, 90 years of legacy, from 1956 in India, which we have been manufacturing, was the last transition from the UC platform to the super refined 350 J platform. So that has been done. It got accepted very well. I can tell you, with respect to the UC, which we had the Bullet to now, the traction is higher than, very certainly the way we were expecting. It's, it's really got accepted very well in the market. Interesting.
Okay. Festive season, overall festive season growth so far, what kind of trends we are seeing? Or any numbers if you can share so far in the last 90 days.
You would have actually tracked the numbers by now, but still to just say, we also grew fairly well, almost about 14, 14% is the range compared to last year, which we grew in the same window. But this year, you know, festive is not in one month, it's in two different months. But I can tell you that the festive season was very good for us. It's a happy window for us in terms of retail.
Okay, that's great to hear. And second, on exports, if you could talk about, we've seen a bit of volatility in the numbers. So, you know, is there something there that's surprised you negatively, or things are going as per plan? Or what's happening in the markets, if you could just share about the context over there.
Well, on the international markets, as I mentioned last time also, the macros, are we completely insulated? No. Is it affecting this to our market to a major extent? There are two things which we have to communicate to you people. On the retail, it has been talking very well. So that extent, we have been holding the market shares almost about... in all the markets like APAC, Europe, and in Americas and Latin America, our market share is intact. We haven't lost market share. The market and the new products are just coming in. For example, Super Meteor, I just launched only about two months back in the United States, so it's all getting into the market.
On the wholesale front, as I mentioned, as per there also, we are not aggressively looking at wholesale, because normally what happens is, for the season, you'll go build the inventory and keep it, because that's where in some of the markets where the season have to be served. This year, because of the macro conditions, we are going cautious in building those numbers. That's why you will see our wholesale numbers slightly lower. But the good news in the international market is, the retailers are talking very well, and the new products are also coming into the international market, one after the other.
... So, can you share what is the average details we are doing, per month? Because, you know, some months we see 9-10,000 also, and, and wholesales, and some months we see 3,500. So, just, you know, any, any number you could share or, growth, that we ex- we should expect for full year?
We don't actually give the market-wise, the details, and all those things. But I also tell you a couple, as when I was saying that the market share is kept intact. Market share, we will share it with you, because that's what we normally share that. And so the traction is, even though there are macro situations and all those things, for us, on the ground, motorcycles which have already gone are all moving off. So it is, the flow is getting mitigated, but we don't want to actually over-inventorize the place, and we are going cautious in business. So you will see this normalizing within few months.
Okay, sir. Thank you, and best wishes for a very happy Diwali to the entire team of Royal Enfield.
Thank you.
Thank you.
Thank you. I would request all the participants to restrict their questions to two. Next question is from the line of Chandramouli. Chandramouli, please go ahead. Chandramouli, you can unmute your line and speak. We'll take the next question from the line of Omkar. Omkar, please go ahead.
Hello? Hello, can you hear me?
Yeah.
Yeah, this is Chandramouli, sorry. Yeah, sorry. If you can hear me now, my first question is on just the gross margin line this quarter. It looks like quarter-on-quarter, we've had literally flat volumes and maybe slightly inferior mix in terms of just export volumes this quarter versus the previous quarter. But in spite of that, looks like we have seen a pretty healthy gross margin expansion quarter-on-quarter. So just trying to understand what were the factors that might have contributed to that. Is it good mix in the domestic market? Was there any pricing opportunity that we saw?
I think it's a combination of everything. One is, of course, there's been a material cost savings that it had impact about 1% in terms of, that. Apart from that, the remaining part of it is a, is a combination of mixes, that is the price increase we've taken, in May, which full impact that is coming through in this quarter.
Got it. Got it. That's helpful. And my second question is just on the 452 cc Sherpa engine. So congratulations on the successful good reviews for the Himalayan 452. Just trying to understand over the next sort of 12-18 months, when we might sort of put that engine into maybe a roadster or a cruiser, which might potentially address sort of a much larger market opportunity set for us. And then that seems to be where maybe 350 cc engines might be heading in terms of market segment as well, over the next few years. So just trying to understand your thoughts on how you're thinking about that as well.
See, 452 cc liquid-cooled, the platform is an all-new platform which we are bringing in now. We all know we are a company which we will have the platform, and we will start looking at various genres of motorcycles, which gives a different experience to the consumers. It's time to come. Even now, if I have to tell you, the all-new Himalayan, which has unveiled about three days back, it's been received very well, and we have to give some space to this to get matured into the market. So only in the appropriate time, we will talk about all other products which are coming up on that platform. Yeah?
Awesome. Awesome. No, thank you very much, and all the best.
Thank you. Next question will take priority from the line of Omkar. Omkar, please go ahead.
Hello, am I audible?
Yes.
Yeah. Good evening. My question was regarding what's the yearly production capacity which you currently have?
So that's very nice speech. So we have said the build capacity of both the plants together is almost around 1.2 million. And that's why we said we don't need to look at any investments here and now, but all our lines are modular, and we can enhance the capacity whenever it is required. So the flexibility is there built into that.
Okay. So the way if you look at the volumes, say, from last four, five years, or last financial year, you just crossed the volumes you are generating in FY 2019. So at 2023, and you crossed at 2023 last financial year. So any aspirations you have of targeting around 1 million sales?
Omkar, you know, we don't give forward-looking guidance as to, you know, to get out of us.
Yeah. Since you have so many launches-
Sorry?
Since you are targeting so many launches and so many upcoming products are coming up, just wanted to have a sense of that.
Yeah, yeah. So just to add, as Raj was mentioning, Omkar, we are a company, we're a long-term, ambitious company. Don't look at anything here and now, because we understand then you tend to make a lot of mistakes, because that's how you see it in a very short-term window. We saw it, always, any product comes in, any platform comes in, we see it as a long term, and we are, we are not a company, we will be very fast. We are a long-term industry. We don't do anything here and now. So you will see how we grow also over the period of time. So the numbers are, in my opinion, a by-product. What we are doing, is it the right thing? Our products are getting accepted, is that is what we have to look at, and that's what we are doing.
... Okay, the second question is on the competition. Bajaj and Hero, both of them have launched new premium vehicles with their global types. So any primary on-ground situation you can tell about the competition? What kind of competition you are facing from these products?
Again, as a rule, Pankaj, we don't like to talk about others. You please do your assessment of others yourself. We will talk about ourselves. You know, it's not fair for us to talk about what other people are up to and, yeah, all of that. I can just say that, look, what we have at RE is, you know, I mean, of course, we've been doing so well for so long that, you know, all these guys, or let's say, competitors, have been trying to come into our segment. Till now, at least till recently, they've not been successful. And of course, there will be some successes, some failures, that's part of the game. What you have to see is that we have an exceptional brand, exceptional distribution, exceptional community, exceptional new products.
You've seen the new Himalayan also, and, you know, the Himalayan, I mean, somewhere you've seen the reports, it's always a response to person X or Y. I mean, it's been in the works for five years there, so it can't be a response to something which came out a few months ago, right? So, you know, we anticipate, we understand, we've got a lot going for us. At best, we see that, you know, if there is a couple of competitive bikes that are not as shabby as they've been previously, then maybe they'll help us grow the market. And, you know, we're 90% there in this 250 cc plus market.
So, you know, I think hopefully in the positive case for us, the increase in competition will mean growth in market size, which will in fact benefit us, even if we lose a couple of points of market share. Because, you know, when you're 90%, eventually there's only one place you can go. It's not that we're going to give up market share, but, you know, at 90%, you're not going to gain too much market share, let's put it that way. So, you know, we've got a hell of a lot going for us. We have, and we work very hard on customer experience on all these areas, in addition to amazing bikes that you see. So we're not worried, let's put it that way. And we're very bullish, let's put it that way.
Okay, just a small question on EBITDA margins.
Sir, I would request if you could come back online.
Sure. Thank you.
Thank you. Next question we'll take from the line of Ragunandan. Ragunandan, please go ahead.
Yeah, thank you for the opportunity and festive greetings. My first question was on the accessories side. What would be the current number in terms of accessories per vehicle? Would the blended accessory sale per unit have gone up after the recent Bullet 350 launch? Just wanted to get your sense on the trends you are seeing here.
You know, Ragunandan, looking at per motorcycle and all those things are, in my opinion, symmetric for just to see how it is going as a state. What primarily we look at is, in the accessories, we have almost about some 587 accessories which are coming up, one after the other. And it is to give an experience to the people. What we look at is, how many people who are actually buying the motorcycle are actually happy with our genuine motorcycle accessories, what's an adoption? If I have to tell you, almost about 89%-90% of the consumers who are buying our motorcycles, they also buy our accessories, because that's what is an experience which we wanted to give through that accessories. And the business is growing.
Got it, sir. Sir, in terms of the festive season, if you can share some trends in terms of regions, you know, which regions have done well, and also if you can talk about how the urban rural markets have done.
Overall, Ragunandan, during the festive time, as I mentioned, I think we grew almost about 13%-13.5% compared to last year. We look at it top 10, top 20 cities, how it is and all those things, and all the areas across, there has been a good growth, compared to last year, barring few regions. But I think what happens is, you know, Diwali in some regions will be very good. Navaratri in some regions will be very good. So there'll be a slight variations, because compared to last year, which was both in one month, this year, Navaratri and Diwali is actually in two different months. To that extent, you will see other regions also coming up.
But overall, during the festive season, the retails have been very good and it was in a happy note for all of us.
Thank you, sir. Very helpful. And lastly, do you expect the adventure tourer category to expand, given that, you know, you pioneered the segment and now, Himalayan 450 is receiving a very good response?
Yeah, I think category will grow when you have new products which are coming in. When we brought in the Himalayan at 2016, that actually created a good moment fundamentally because it was a more successful adventure tourer at that point of time. And the new Himalayan on the 450 cc, as I mentioned, is holding the DNA of Himalayan plus, plus with our inputs from the Globetrotters, with our inputs from athletes, from our inputs from riders, communities, we as the riders. So it is plus, plus with, as I was mentioning, about higher power, torque, which is required, the consumer changing, the motorcycle is also there for that, the evolution. And there is the TFT, that's the full navigation along with Google. So it's, it's a good motorcycle.
Obviously, it'll and the reviews are very good, so it will grow over the period of time.
Thank you very much, sir, for the thoughts. I'll get back to the queue.
Thank you. Next question we'll take from the line of Nitij Mangal. Nitesh, please go ahead.
Hi, good evening. Thanks for taking my question, and wish you all a very happy Diwali. My question: your product portfolio, if you look at how you have evolved over the last five, seven years, you have clearly come a very long way, both in terms of the number of products and the quality of products. When you look at the next three to five years, what do you think are the biggest opportunities on the product portfolio? Is it more products, more use cases, more refinements? How do you think of that over the next three, five years?
Product portfolios normally are looked at for 5-7 years, a window, Nitij Mangal. So obviously, what we look at is that the platforms have to be thought through. Based on the platforms, what sort of an experience which we can offer to the consumer, because every consumer wants a different kind of a motorcycle. Whether the platform can lend to those sort of motorcycles, which we can make and give a differentiated experience, and that's what we know better, and our focus also will be like that. So the core platforms are then, there is a Twin, which 650 cc platform, which is a global product, is very successful. Super refined J platform, which is a 350 cc, very well accepted. Now, there is a 452, liquid-cooled, new Sherpa engine platform.
The platforms are set as an engine level. You will see products which will be actually awarded around that.
Okay. My second question is on the VECV. The company has gained quite a bit of market share over the last few years. So I remember about five years back when you launched the Pro series, there was an expectation of market share gains, and seeing didn't happen immediately, but now over a period of time you have. So what's really helping you in gain these market shares in VECV? Thank you.
What? I'm sorry. What's the question of what the end game is when it comes to market share?
How do you, how did you gain market?
How we gain market share? Of course, over time, we have well launched new products. And also, of course, we have put a lot of effort into our retail network, and we're growing that, and that we are continuing to doing. So both, you can say, from the product side, having more product and driving them larger with the network. And as you saw, that we also had a award for being number one for the third year when it comes to from the dealers survey. So this is important for us.
Okay, thank you very much.
Thank you. Next question is from the line of Anuja Chauhan. Anuja, please go ahead.
Yeah, hi, sorry. This is Gunjan. I just had, you know, just shifting the gears to, you know, the unveil that you made on the EV during the recent EICMA. Can you talk a little bit around that? Is there a strategic change there in terms of, you know, accelerating the launches on the EV front? And is it something that you're expecting that this category can see, you know, can see some change, you know, can probably see faster, you know, shift towards EVs than what we, what we were calling out earlier?
Hi, Gunjan. I would say not really. That's—I mean, on the bigger motorcycle segment, it's still a while out, where the curves will cross, because the, with the range requirements that we have, the battery size, weight, packaging is still a big issue. So it's not a resolved issue. A motorcycle like the Electric Himalayan test bed, we call it, so there is more than a prototype, is indeed what it is. It's a prototype, it's a test bed, it's a concept. It's not, it's not for production. It's to understand, it's for us to work on stuff so that when the time is right, we have done all the homework and background work, but we don't think it's ready for prime time, right?
So because even if we were to make an excellent bike like that, which we, we believe we can, and no problem, it'll cost, you know, maybe 3x of what our current Himalayan costs, and, you know, it's not going to be that much better. So why would people buy that, right? So, so it's the economics don't work yet, but very much, this will give a glimpse, a flavor, a taste of what we can do, what we are working on. It's only one idea. We have many ideas that we work on, but because we, because we are showcasing the new Himalayan, we'll also showcase the electric Himalayan also, just to say that, "Guys, we're there. We've got lots of things brewing, but we'll come in the market when we, when we think the time is right.
Okay. And, I mean, I'm just, you know, besides this, I'm just trying to understand, if I look at the cc category, now we've got like, you know, these various platforms, 350, 450, and then, you know, the Interceptor and all. Is there anything else when you look at the entire product spread, we think it's the right space, and we would want to go up or down in terms of our, you know, product segmentation?
... We haven't moved within, because on the slide here, we said middleweight is the focus, and we determine middleweight also at a point of time, and our focus will be on the middleweight segment, because we see there is a huge potential in that. And when people are looking at a high cc motorcycle, and our platforms are very good, as you also mentioned and called out very nicely. Super refined J engine, 350 cc is accepted across the globe very well. Now, 452 cc, which is the new platform, liquid cooled, with a different power and torque ranges, and the 650 cc gave a global recognition as the best quality product. So we have platforms which are very good. We will focus on the middleweight. Wherever there is a space, we will start working on.
Okay, lastly, just if I can get the CapEx or product development spends maybe for this year and how we should think about it over the next two, three years?
I think roughly we spend somewhere between 2%-3% as far as CapEx is concerned, and we really can't give you a guidance of how it's going to shape up for the next 2-3 years. I think we will see as the product portfolio develops and matures, we will invest what we need to. Absolutely.
All right. Thank you so much, and apologies for the noise in the background.
Thank you. Next question we'll take from the line of Jinesh Gandhi. Jinesh, please go ahead.
Yeah, hi. Am I audible?
Yes, Jinesh.
Yeah, hi. Congrats on great set of numbers. Two questions from my side. One is, with respect to electric, motorcycles. So given that our focus is on middleweight category, which we define by CCs, how does electrification change that, in the sense, does it open up new opportunities where, middleweight is, we can define it in a different way now? How do you see that as an opportunity?
Look, I think the middleweight, which we talked about, is in an internal combustion engine. On an electric vehicle, today, the combination is on the motor power, range, the weight of the motorcycle. There are a few combinations which are there, and the experience which we can offer, too. So the definition of the electric vehicle portfolio can be very different, but that's not to say, will you make 100 cc equivalents in the electric vehicle? That may not be the focus. So our focus will be there at a particular range.
Yeah, so I think what Govind is saying is that we've never been in the... Not never, never say never, but in the foreseeable future, we don't plan to be in the, you know, in any basic commuter, basic that kind of stuff. So we're not in a game for basic mass product, none of that. We always aspire to be in premium product, in product that gives, you know, which has a lot more meaning than just commuting to an individual. So, you know, people who want the cheapest, motorcycle in a segment, there will be other chaps to go for. We will always be in a more premium, segment situation, and that goes for electric as well.
Actually, Siddhartha, where I was coming was, from that, when ICE we were very clear that we don't want to get into 250 cc or so. But, in EVs, can we look at, 250 cc equivalent, just to bring in it the cost of EV to be slightly lower than what it could have been, if we were targeting similar equivalents in terms of 350 cc? Is that the way you look at it, or, that is not the consideration side?
Yeah. So look, in honestly, in EV, it's an open book for us, right? We can do anything we want. And, I mean, we can do anything we want in ICE also, but we've chosen not to. So yes, it is an open book. We can, we do look at everything, clean sheet of paper, where can we make a difference? The parameters there, like I said, are that we, after having thought through, I mean, and this for years, I'm not talking about right now, I'm talking about many, many years we've been working on this. After having thought through, that we will be premium, we will not be mass, we will do very interesting things, bikes that, you know, have huge desire, et cetera, et cetera. So, but we're not specifying right now whether we'll be any power category, CC category.
We'll find out as when things happen. But yeah, it is a more open book for us with that.
Got it. Second question pertains to the number of platforms which we have now with Himalayan, 350, 452. So it's 350, 450, and 650. And if we continue with 400, then effectively, we have four platforms. Do you see gaps on the platform side, on the engine for RE, or effectively, these are the three, four platforms which we work with for more products?
On the 350, 650 cc platform itself, there are new products, variants, which as an organization, which you are working. That's why we said that there is a slew of new products which are, pipeline is full. We are all working on it, because we see a lot of potential there itself. And the 450 is, you know, three days back, we just unveiled it, and it has to go to the market, and I'm sure everybody will love it because the reviews are so good. Yeah, platform development takes a longer period of time, but we said middleweight is the focus.
In that middleweight, wherever there is a space, if there is a platform requirement which is there, we'll actually be doing this, because we are not going into the extreme of commuting, where there is a platform that's strictly developed. That's not what we are. The middleweight will be our sweet spot. Whichever is required, that's what we will focus on and do.
Got it. Just to clarify, whether we will continue with 400 cc Himalayan, or it will be replaced by 450 cc one?
... You know, one platform, the scale benefits, it actually helps, but there'll always be a transition. But the Himalayan is moving into the 450 cc. Other products in this 410 cc, the transition will take place over the period of time. But here and now, the focus is about the new Himalayan and the platform, which is liquid-cooled, well-defined, fantastic power end and the torque curve. That's the focus as of now in the platform.
Got it. Thanks, and all the best.
Thank you. We'll take one last question from Pramod Kumar. Pramod, please go ahead.
Yeah, thanks. This is my second question. Govind, on the festive demand, you talked about growth, and last year we had Hunter already in the base by this time. So if you can just help us understand on Classic, particularly, where there's a lot of focus, given what's happening in terms of the choices the customer has incrementally. How has Classic as a brand done for you? Because that's, that's, like, bulk of our volumes, and we've seen somewhat of a fatigue in the Classic volumes because of the price inflation, all of that. But if you can just help us understand, how is Classic on standalone basis doing during the festive retails, Govind?
Excellent. I think, Pramod, first and foremost, as you rightly pointed out, last year, during the festive season, Hunter was just new time, right? It's a new product which has come in. So that's the base which got set. So this year, during festive season, with that increased base, the has been good. So for everyone asking how the festive... And as I mentioned, the festive has been very good. It's fundamentally because I have noticed with that Hunter base, we really do very well. Classic is at highest growth during the festive season. If that's, that's what I can share with you people, is that, you know, we were looking at maybe which product will go now, you see the Classic across India, the growth has been good during the festive time.
And, yeah, we have lots of exciting plans for Classic as well. So, stay tuned. And Happy Diwali! Happy New Year.
Happy, happy Diwali to all of you. Thanks a lot. Thank you. Take care, guys.
Thank you so much. Happy Diwali, everyone. Yeah. Closing remarks. No, that's it, closing remarks. Happy Diwali. Thank you so much, and, yeah, have a lovely time with your families and, and talk to you next quarter. Thank you all very much.
Thank you.
Thank you.
Thank you. Thank you.