We are happy to share that the two new products launched by the company, TVS Jupiter and TVS Raider, excellent feedback from the market. Thanks to all the customers. Let me now take very quickly the Q3 overall performance. During this quarter, company's operating revenue grew by 6%, INR 5,706 crores as against INR 5,391 crores last year, third quarter.
Domestic market, company sold 5.81 lakhs units of two-wheelers against 7.26. Our sales declined by 20% as against the industry decline of 25%. International market, company sold 2.53 lakhs of two-wheeler units, growth of 12% as against the industry growth of 3%. Total two-wheeler sales, 8.35 as against last year's 9.51.
The mix of products are premium Apache, NTORQ, Jupiter Classic, Grande overall is 30%. Total sales of three-wheelers are at 0.44 lakh as against last year's 0.38 lakh, a growth of 17%. In terms of EBITDA, this is the highest EBITDA, INR 568 crore, grew by 11% as against last year's INR 511 crore. We registered the operating EBITDA margin of 10% as against 9.5% during last year same quarter.
Despite continuous increase in the commodity prices with the focus on product mix, premiumization, sustained cost reduction initiatives, and price increases, the company could manage the material cost as a percentage of sales to 76.3% as compared to 76.1% of last year.
Company registered highest ever PBT of INR 391 crore, grew by 8% as against last year's INR 362 crore. Profit after tax grew by 9%, INR 288 crore as against INR 266 crore. Year to date, I think the overall PBT after exceptional items is INR 871 crore as against INR 439 crore. Of course, the exceptional item is the INR 30 crore towards the COVID-19 in the first quarter. Nine months, company's profit is INR 619 crore as against last year's INR 323 crore. PT TVS sold 19,000 units as against 15,700 units of last year. Three-wheelers, we sold about 2,200 as against 1,800 units last year.
Our operating PBT is $0.5 million as against $0.3 million of last year Q3. Year to date, our PT TVS posted an operating profit of $1.8 million as against a loss of $1.5 million during the first 9 months of last year. TVS Credit during this quarter posted a PBT of INR 75 crore as against INR 58 crore during Q3 of last year. Book size of the company, December 31, 2021 is INR 12,805 crore. We are confident of continuing the good performance in the next financial year, 2024 and the next financial year. We are looking for outside capital and partners for value unlocking and future growth in TVS EVs.
With respect to new product launches, all of us know that TVS Raider and Jupiter 125, which were launched for the season, extremely good feedback, continues to have very good demand. We also have the RP series in TVS Racing's high-performance race machine lineage. Backed by four decades of rich racing heritage, TVS Racing, India's first factory racing team.
The Race Performance series will be introduced in TVS Apache series of motorcycles. RTR 165 RP is the first product to be launched under the Race Performance with limited numbers. It has got the best PS 19.2 at 10,000 RPM.
This motorcycle is equipped with features that include a race-tuned slipper clutch, adjustable clutch and brake levers, an all-new TVS Racing decals, red alloy wheels, and new seat patterns.
All along with that, you would have seen TVS Apache RTR 4V series of motorcycles that were launched with new headlamp assembly, new design, signature day lamp, daytime running lamp, three ride modes, urban, sport, and race. It is the top variant is also equipped with SmartXonnect. Excellent feedback from the market. TVS NTORQ comes with Marvel superhero Spider-Man, Thor, and Car.
These are two popular Marvel characters. You will all recollect last year we had the same superhero series. We have very good feedback from the Gen Z. We are optimistic that our customers will continue to play smart with this launch. Play epic. The new scooter, SuperSquad edition inspired by Marvel heroes has got Iron Man, Black Panther, and Captain America launched last year. This is you remember all of it.
In the SmartXonnect and also TVS NTORQ 125 Race XP. Really, NTORQ is supported with all these variants and technology, demonstrators, which are extremely good in the market, and we are getting very positive feedback. On EV, excellent positive response continues for TVS iQube. iQube continues to draw very good interest from EV intenders, and we have more than 6,000 bookings as of now. The biggest challenge continues to be electronic parts supply chain. However, we are able, thanks to the support from all of them, month after month, to improve our production and the sales.
We are continuously in discussion with major suppliers for a long-term arrangement, which is definitely giving us a lot of good positive improvement. Company, as announced earlier, we are already there in 33 cities. We will be reaching across the country by end of this financial year, and we will be starting the international markets. We are also progressing our investments on INR 1,000 crore, building portfolio, next level of capacities and market development. We have entered into a MoU with Tamil Nadu government to invest INR 1,200 crore for future technologies and EVs.
We have created the capacity of 10,000 units, which we will be planning to deliver very soon by first quarter definitely because of the challenges what I highlighted in terms of the semiconductor. This will further scale up from Q2 onwards, and we have put some aggressive capacity plans are being worked out for next financial year, 2022-2023. We are also committed to lead the technology development in EV and green fuel. Our product portfolio is planned for catering to various segments in two-wheelers and three-wheelers.
Our vision of electrification, we are envisaging a wide and reliable charging infrastructure for our EV customers across India. Our partnerships with widespread and reliable charging network like partners like Tata Power, CESL will substantially enhance the customer convenience. Company is also in the process of entering into partnership with other major charging infrastructure partners. CESL, company is shortlisted for supplying over 2,000 electric three-wheeler.
We will start supply of these products soon. As announced last quarter with BMW Motorrad, we'll be developing a common platform by mutually tapping the emerging technologies in the future mobility space, with special focus on EV, keeping in mind the global requirements of customer segments in various markets. Exclusive products for both companies will be developed on these common platforms, and the companies will retail their products globally.
What is the most important highlight is this Powerstorm is completely designed, developed and manufactured and including the Indian supply chain capabilities to provide best in class quality and economic advantage. We have entered into a strategic partnership with Swiggy. All of you know, they are the leading on-demand delivery platform.
This is going to give us huge advantage, and we will test the implementation of TVS Motor's EV for food delivery and other on-demand services of Swiggy.
This is in line with our commitment to expanding the presence in EV across all major cities by the end of this financial year. As I highlighted, the newly formed EV subsidiary will give us better flexibility, focus to create scale in the EV area globally. The company is actively progressing on this, and we'll update you soon.
Recent investments, all of you would have seen the Swiss E-Mobility Group. Just wanted to once again highlight that this was acquired. We acquired the majority stake through this subsidiary. This reaffirms TVS Motor's commitment to expansion in Europe, the largest market outside of China.
Through a portfolio of premium and technology-leading brands, including EGO Movement. SEMG is the market-leading provider of e-mobility solutions within the DACH region, operating the largest pure-play e-bike retail chain, M-way in Switzerland.
By combining its extensive physical network and e-commerce platform and two online platforms and 31 physical stores strategically located across Switzerland. As highlighted earlier, they have a strong omni-channel distribution and aspirational brands. TVS is very much excited to enhance the product range further and scale the company in this region and beyond.
SEMG is number one in Switzerland with a market share of 20%. During last year, the reported revenue was $74 million and a PAT of $6.4 million. This year the expected revenue will be $100 million. SEMG is going to be very strategic, and this is going to give us an opportunity to grow in the personal mobility business, including e-scooters, e-cargo bikes, which are emerging trends in global markets. What is most important is the current penetration of approximately 15% of the total bicycle population in Europe and growing at a CAGR of almost 18%.
The market for e-bicycles holds significant growth potential in the global industry. It is likely to touch $25 billion in five years. This is going to be a profitable acquisition with a growing platform, with an opportunity to drive further value which will honor the TVS vision and the long term plans. Coming to Q4, the monsoon is going to be normal. This COVID, I think all of us know that it's while it is spreading fast, the severity is much lesser. Practically, there is no hospitalization and people are recovering very fast, which is a very positive news.
Most of the areas now there are no lockdowns. Even Sundays are open. With our two new products, 125 cc Raider and Jupiter 125. The excitement in our products in NTORQ, Apache 4V, the BTO in RR 310, we are very confident that we will grow ahead of the industry.
Export of three-wheelers and two-wheelers are likely to grow in the coming quarters because of the stable economic and political situation in all the TVS operating geographies. The crude oil prices and the positive impact of the dependent economies is also going to help us, especially in Africa, Central America, Sri Lanka, we are seeing some signs of relaxing its restrictions on import of vehicles. All these are going to help us. The current portfolio, what we have on the product side. Also the container availability issues are becoming better now. It is available.
The COVID related issues are also becoming slightly better. Overall, both in two-wheelers and three-wheelers, we will continue to grow ahead of the market. We are definitely continuing the trend. We are seeing the continued trend of the premiumization in all markets.
We are confident that Apache, Raider, NTORQ, Jupiter ZX, Jupiter Grande series and Jupiter 125 will continue to do well, both in domestic and international market. The kind of countermeasures we have put to improve the premium product production. There are some challenges on semiconductor availability, especially for some of the premium products. We have built a very strong relationship which will help us definitely going forward. We are optimistic that these things will improve month after month.
The month of January, the company has taken up prices partially to mitigate further commodity cost pressures, whatever we have seen. This will be our constant endeavor to look at wherever there are opportunities to increase prices with a strong brand, we will look at it.
We are very confident that we will grow ahead of the industry with the kind of product portfolio both in domestic and international market. Products like brands like Apache, Jupiter, NTORQ, Star City, HLX, Radeon, TVS King, I think, and the recently launched Raider and Jupiter 125. Robust revenue growth, increased premiumization, continued cost reduction initiatives on material cost and other fixed costs will definitely lead to sustained EBITDA improvement.
As I said, despite various headwinds, we are able to achieve EBITDA of 10% during the last quarter. Company is confident of continuing this EBITDA growth journey, and company is also confident of scaling the EV faster and better. Thank you.
Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Kapil Singh from Nomura. Please go ahead.
Good evening, sir. Congratulations on a very good set of results. I had two questions. Firstly, I wanted to check on average selling prices. We've seen a pretty sharp improvement on a quarter-on-quarter basis. Could you call out any specific factors which have caused this? And should we expect these kind of average selling prices to sustain? And also if you could share the spare parts revenue and export revenue.
The price increases we have taken over last year. Q3 is almost 5% in the last quarter.
Okay. You've taken a 5% price increase. Because, in the last call, I think you mentioned you've taken a 1% price increase.
No, I'm saying Q3 and Q3. Last year Q3 to this year Q3 is 4.9%. If I look at Q2 to Q3, it's almost 1.5%.
Right. The average selling price is up almost like 6%.
Yeah, 1.1%. No, no. Q2 to Q3. This year, Q2 to Q3 is 1.1%.
Yes.
Last year, Q3 to Q3 is almost 4.5%. Almost 5%.
Yeah. I'm saying that if I look at Q2 to Q3, the average selling price that we calculate dividing the revenues by volume, then it is up almost like 6%. Anything to call out over there?
Last quarter to this quarter, the price increase is only 1.1%. Maybe the variance and the other new products, whatever we have launched, that has definitely helped. Because we have 2 launches in the 125 series. The same way we have also increased prices in the exports. Only those are the overall. That is the only reason.
Okay. The revenues for spare parts and exports?
Spare part, just give me a minute. Overall spare parts you're asking, right?
Yes, sir.
Overall spare parts for the quarter is about INR 659 crores.
Okay. Exports?
Exports revenue?
Yes, sir.
Export revenue is INR 1,878 crore.
Okay. The second question was related to this consolidated result if I see. I'm referring to segmental results. What we see, consolidated profit has actually gone down on a year-over-year basis. Even if I look at two parts A, which is automotive vehicles and spare parts, that has also gone down on a year-over-year basis. The gap between standalone PBT and the segmental PBT is pretty large for this particular quarter. Anything which is different in this quarter?
No. If I look at the TVS Motor, you have seen the standalone, you have seen the TVS Credit.
Yeah.
Okay? Other all subsidiaries are invested, and we are very confident that all of them will start yielding very good results. PT TVS is also making profit, so-
Sir, if I see, the PBT that we have last year is INR 393 crores. I'm referring to consolidated segment information for the quarter. This year it is INR 359 crores. This has actually gone down by 9%. Within that, actually, the major gap which is there is in the automotive vehicles and parts, which has gone down from INR 368 crores to INR 346 crores on a YOY basis.
Yeah, that is primarily because of the TVS Norton and the other subsidiaries.
Yeah.
Their losses, like we highlighted last time, they are investment for future.
Sure, sir. Could you call out like?
Yeah. They are the investments, whatever we have done. I think this is the time where we have to support them, building the product portfolio and also really support even the TVS Digital. These are the areas we are investing and they are the losses. We are pretty confident that they are going to give us very good returns going forward.
The losses have increased on a quarter-on-quarter basis over there?
These are investments. I don't look at these as losses.
Sure.
I'm pretty confident that we will definitely start yielding results in the going forward quarters.
Okay.
It may take time. For example, Norton may take time, but the digital whatever we are investing are going to definitely help us for the future.
Got it. Sir, last question. This automotive component also-
Just a minute. Please remember what I used to talk about PT TVS and TVS EVs.
Yes.
Because we invested, today they are giving very good returns to the company.
Sure. Sir, this auto component also we've seen a loss increase in this quarter compared to last year as well as last quarter. Could you also just throw some light as to how we see that progressing?
I think the business has started, and we are pretty confident that next year this will also start becoming positive.
Okay. Thank you so much, sir. Wish you all the best.
Thank you.
Thank you. The next question is from the line of Binay Singh from Morgan Stanley. Please go ahead.
Hi, team. Congratulations for good set of numbers. My first question is on the e-bike side. You made two investments relating to that, both in Europe. What is the long-term strategy over there? What kind of investment do you plan to make over there? Is this predominantly going to be focused on the Europe side, or will you take the products to other geographies also?
I think what is most important is the SEMG is the lead player in the market. You have seen it's a profitable company. They have got excellent range of products. They have got omni-channel distribution. They have got a retail chain. All these products can definitely be leveraged for many markets. At this point of time, we want to grow it in the European market. We are putting a proper strategy, how do we leverage. I think there is a very strong product portfolio from the Indian side.
There is a very strong product portfolio coming from both EGO Movement and SEMG. I think it will be a great benefit as a company to look at global market, how do we leverage which brands where. I think that is the strategy we are working on at this point of time.
Does it need a lot of investment in the initial years? Any number you would call out, anything around that?
I think these are very futuristic investments, and we are very, very confident that these strategic investments will definitely yield results.
Right. Sir, secondly, you know, when I look at the EV order book, as you know, all the startups are also giving a number on their EV order book. You called out 6,000 unit or so. So how do you look at that? Because most of these startups are, you know, somewhere between 25,000 to, you know, 70,000-80,000 unit of order book on the electric side. How would you look at your order book on that? Linked to that, is there any market share target that you would aspire in the electric space also a year down the line or so when most of the supply chain issues are behind us?
Well, this is exactly what I highlighted last time also. First of all, I'm extremely happy that iQube has got excellent response from the market and all the customers are delighted about it. Okay? The first objective is to come up with products which delight the customer. Second objective is there are various segments in the market. We are focusing on a range of product portfolio which to be launched into the market in the next few quarters and also enter into the three-wheeler.
Once the customer are delighted and you have an order book and there is a very good top line, I think all the other strategies will follow because we have very good partnership with suppliers.
Like I said, one of the most important thing is any of this product, you need at least once they are all in line with Atmanirbhar, that's completely designed and developed in-house by TVS. We have partnership with our supply chain. With them, we are trying to completely develop and deliver. You will see some of the launches soon. Okay? At this point of time, firstly to delight the customer, delight with the range, delight with the technology, delight with the demonstrator and the traction quality and must-be quality, grow the top line. In the process-
Right.
Build relationship with the suppliers and customers, and that is going to help us in building the entire ecosystem. As much as possible, we want to develop this ecosystem within India, and we can leverage all these products globally. For example, once we launch iQube in India, then we will be taking it to many global markets. There is a very clear strategy. Okay? We are also, as I highlighted, developing a common platform. This time the entire design and development of the platform for even BMW and TVS on the EV side is by us. This is going to be available for the global market.
It's a very clear strategic vision of looking at as though the EV has come, as though the EV has arrived. We are moving in that direction.
Right. Lastly, just on exports, you know, we've obviously had a very strong year on the export side, but lately, both for you and your peers, we've started to see that on that high base, volumes are starting to decline. How would you look at export run rate from current levels? Were there any one-offs in the last two, three months because of which volumes are suppressed? Or is it high base because of which we are seeing the growth declining?
There is nothing one-off, first. Second, all of us need to appreciate that the export markets are doing well, okay? Industry will continue to do well. Okay? Please understand there are also pricing pressures. Container costs have gone up. Ultimately, all this goes to the customer. For the customer to digest, it may take time. Very good thing is many of these markets, the penetration levels are so low. The good thing is, like India has got the wave three, most of these markets, the wave three is also going to be exactly like what we have seen in India.
What is most important is the political situation and the economic situations are stable. Crude oil prices are holding on. I'm pretty confident the kind of range. I told you about Sri Lanka.
We have started getting the orders for import of vehicles. Many markets are now slowly opening up. We are pretty confident that Myanmar will also start slowly opening up. Overall industry will grow, definitely grow in the international market. We will grow ahead of the market primarily because of the product portfolio and the customer delight, what we offer in the export market, both in two-wheeler and three-wheeler.
Great. Thanks. Thanks for the detailed response.
Thank you very much. A request to all the participants. Please restrict to two questions per participant. If time permit, please come back in the question queue for the follow-up question. The next question is from the line of Sonal Gupta from HDFC Mutual Fund. Please go ahead.
Yeah. Hi. Good evening, sir. Thanks for taking my question. Just first thing, just want to get what is the other operating income for this quarter?
Just give me a minute.
Sorry, in the meantime, I mean, like you mentioned in your opening comments, you're looking to have outside partners and investors. In which entity? I mean, you're looking at the EV subsidiary.
TVS Credit.
TVS Credit. Okay.
Anything you want to highlight? Yeah. No, TVS Credit, again, as informed by K. N. Radhakrishnan, the book size is INR 12,805 crores as of 31 December. The very good part in the last four months, we have not made any provision towards the NPA. Our collections are extremely good there. The gross NPA as it stands as of 31 December was 3.9% as against 4.4% or 4.3% of September 2021. The net NPA is around 2.2% as against 2.75% as of September 2021. A very healthy capital adequacy ratio of 18.8%.
Overall collections, as I said, was around INR 2,700 when compared to the comparable quarter of around INR 2,200. The disbursements again was close to INR 4,000 crore in this quarter as against INR 2,800 crore. Overall, the performance has been extremely good. What we are looking for is the outside capital and the partners for, one, value unlocking and for future growth. This is what we are looking at, exploring various options on that.
Got it, sir. Sorry, just I wanted to understand, do you have any thoughts on like raising external capital in EV subsidiary?
We will come back with the clear proposal. Yes, K. N. Radhakrishnan?
No, no. It is in the discussion stage. I think once we firm up the overall strategy, we will share with the strategists.
Sure.
Got it. Sir, would you have the other operating income number?
Other operating, there is nothing new. I think these are all normal. There is no one-off in that.
Absolute number would be around INR 60 crore or so?
Yeah.
Got it. Okay, sir. Thank you so much.
Thank you. The next question is from the line of Aman Birani from JPMorgan Chase. Please go ahead.
Yes. Hi. Good evening, sir. Thanks for the opportunity. My first question, you know, is on the EV side. As you mentioned something about electric three-wheelers and 2000 to be supplied, can you clarify on that? Because you've still not launched the product, so what's the timeline of that?
This is to the government agency, which is
CESL.
CESL.
Okay.
CESL is the Convergence Energy Services Limited. There we participated, and we have about an order book of 2,000 that we will be starting. Closer to launch, I'll give you more details.
Okay. Is there like a timeline in the order as to it has to happen over, like, a one-year period or something like that?
Yes, yes. Some timeline is there. I don't remember it exactly, but there will be closer to launch. We will give more details of this.
Would it be fair to assume that, you know, you will also be launching it, you know, it-
Absolutely.
On a retail basis, yes.
This vehicle is available for normal market as well.
Can you help us understand, you know, obviously, you know, on the ICE three-wheeler side, you have a very strong export market. On a domestic side, your market share has been on the lower side. With this EV three-wheeler, I mean, is there a chance of changing that? What could be different with the EV three-wheelers when you're launching it on the domestic market?
I think domestic market, we are very sure that the EV will do well. Okay? Domestic market, otherwise, you know, there were permits and there were many challenges.
Yeah.
I don't want to delve into that beyond that. Definitely EV three-wheeler will have a great opportunity, both in domestic and international.
Sir, lastly, you mentioned 10,000 EV two-wheeler capacity by first quarter of next financial year. This is per month capacity that you intend to deliver by 1Q?
Absolutely. We have capacity today, but the challenge is
Okay.
Like I said, we are working very closely with the semiconductor suppliers, and they are also supporting.
Okay.
It is not that they are not supporting. Month after month, you are able to see. For example, January.
Yeah.
You would have seen the number. Month after month, you will see the improvements.
Okay.
We are still trying for March, but lot of challenges are there. Definitely we are confident that Q1 next financial year will definitely be going 10,000. Beyond that, we have greater aspirations and plans with the product portfolio of launches. We want to take it to next level.
Sir, last, if I may, with the partnership with Swiggy, can you help us understand? I mean, will it be with the iQube product or is there a new product plan for that category? What could be the timeline for that?
You have seen whatever we have shared. I'm very sure, you know, there are many products. We have a portfolio of products. The strength of TVS is definitely designing and developing products like you have seen ICE, our products.
Yeah. Yeah.
Recent products are very. You can be very positive that our products will first delight the customer, and it will be applicable for even delivery kind of purposes.
Sure, sir. Looking forward to more information on that, sir. Thank you. Thanks for the opportunity.
Thank you.
Thank you. A request to all the participants, please restrict it to questions per participant. The next question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi, sir. Asking my question. Sorry for dwelling more on the ASP side. You know, your exports, ASP looks up 10%-12% on a quarter-on-quarter basis, based on the numbers which you have given. Can you help us understand what led to such quarter-on-quarter increase of the price hike in the export market? In the export market, is it largely done? The cost has been covered now or you think further price hikes would be taken there? That's my-
The exports also the same. Whatever the cost increases in raw material, and the recent cost increases on aluminum. The same thing is available in the international market also because we practically make all our vehicles in India only, and it is exported. That is what we are trying to do. There is still always a lag. There is still uncovered portion, but that we will look at it on a time-based scale, and we look at the market in terms of opportunity. This is something which we will closely monitor and look at. What is most important is the product portfolio, what we have and the healthy demand.
As I highlight, we never keep more than 30 days of stock. Okay?
In the international market, we also look at the time for delivery from India to various markets. Very clear we want our customers, distributors also to have very healthy working capital management, both in domestic market and international market. You know, we look at the volume share, we look at the very clear, what is the stock levels. Exactly like what we do in India, we do it in the international market.
Also, K.N., just to add, the mix also improved in exports led by premium motorcycles.
Absolutely.
That's also another thing.
Absolutely. Yes. That definitely the premiumization as a focus area has helped both in domestic and international.
Got it. My second question is, the way you told us, you know, the kind of bookings you have in electric part. When we look at today, there are about 15, 20 players in the system having a double or triple times of bookings of what the number you stated. You know, everyone has a different capacity. They are having almost a 15,000 booking.
Some has a 20,000 booking. You know, given, going forward, once you start selling the numbers, which you said in the last con call as well, you know, and assuming the bookings keep increasing for the industry players. You know, how do you define your market share in electric part?
Because two-wheeler players have been running with a very strong order backlog, and everyone's execution will come together once the supply chain solves for everyone together. At that time, you know, the base business you think in the domestic side would take some more time or more challenges would come, or you think electric and petrol will go together itself. If you can throw some light on that? Thank you, sir.
See, electrification definitely is our strategy and focus. Now, your question has got two elements. According to me, you will see electrification moving much faster in many cities in India. There are, when you look at urban and semi-urban and rural, there are its own challenges. Okay. Electrification, the proportion will go up. Okay. Our hypothesis is you will see more electrification coming in the scooter category because it has got lot of convenience. Our hypothesis is scooter as a category, the proportion will expand.
The category share will expand. This is number 1. Number 2, overall, as an industry, two-wheeler has got huge opportunity to grow, because the public transport issues are there. India is young.
You have seen the kind of investments this budget has announced on infrastructure. All these are going to increase the mobility needs in India. There was a period about 3 years back where we have seen the CAGR of 10%, 12% in two-wheelers. It is going to come. Definitely it is going to come. Number one. Number two, you will see the affordability of the people also going down, because in the last 36 months, I have repeatedly said this, a combination of many initiatives which are in the right direction.
The costs, including the BS-VI, including the safety, including the AHO, including the third party insurance. All put together, what has happened is the cost has gone up to almost 40%.
During this period, in the last eight quarters, you had the pandemic challenges, a lot of lockdowns and the entry level, especially the entry level people, the budget customers not able to come to the market. Premium is only going up. Even in the premium, we have seen some challenges. Overall, the industry has not been positive and growing. I am very confident that going forward, we are already seeing in the COVID this time. I'm very confident that there will be mobility needs. India is young, the penetration will go up, EV will go up, urbanization will happen.
It is going to see leveraging previous capability on investment behind EV is going to give us huge advantage. Okay? The kind of ICE. Today ICE vehicles are green.
With the BS-VI and the future norms, whatever you are going to be. You are going to see the future mobility in terms of both EV and the renewed green two-wheelers. It is likely to happen. Now, I am very confident that we as a company are working very clearly that EV is the future. EV gives us a great opportunity not only within India but globally.
Thank you, sir.
Thank you.
Thank you. The next question is from the line of Pramod Kumar from UBS Securities. Please go ahead.
Yeah. Thanks a lot for the opportunity, sir, and congratulations on a good set of numbers. Especially your EBITDA journey, because if I look at the financial performance of the past, on similar volumes in Q3 FY 2020, your EBITDA was INR 382 crores. On the similar volumes now your EBITDA has expanded to INR 567 crores. With EBITDA per vehicle nearly getting closer to the market leader. I think congratulations on that. I think incredible feat given the macro of the industry. Starting with the follow-up question, sir, before I get to my main question.
On the Norton side, is it right to assume that given the product launches are around the corner with the new plant and new product portfolio, the expenses levels there are elevated with not much of a volume from the model lineup. That explains the losses kind of increasing at the subsidiary level. Is our understanding right?
So far we have not launched any product from Norton.
Yeah.
I think, you know, we always look at the right product at the right quality and respect to the brand. You will see the product launches from Norton. What is most important is getting the overall progress in terms of building the plan, making sure that the supply chain is in place. It's a very important strategic investment, whatever we have done. I always believe that first you have to make sure that the product is really delighting, going to delight the customer. That work is going on. I think when the product is ready, we will come back to you. There is a strategy.
There is a very clear investment we have made. This is a great brand. Okay?
It is definitely going to help us going forward, and it is going to really support the overall portfolio of TVS Motors.
The main question, one on ICE and one on EV. On Raider and Jupiter, the feedback generally from dealers is that you're seeing some exceptional demand, the customer response to both the brands. The problem remains the supply chain, the volume is kind of struggling to go beyond 10-12,000 units per month. Just want to understand, is it again semis-related supply chain issues what you're facing on these two brands?
Given the response, what you've seen with dealers and customers, is there a number which you can share where these two brands will kind of settle in terms of contribution to the domestic portfolio? What are the plans for exports on these two brands, sir?
Please take a minute line for the management call. Ladies and gentlemen, please take a minute while we return the management back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected.
Sorry, I'll repeat the question again. Basically it's on Raider and Jupiter. The general feedback from dealers is that the customer response is quite strong, and there are multi-month waiting period for both the brands. I just want to understand what is holding back the production levels for this particular, these two brands. Because I understand model-wise data suggests not more than 12,000 kind of a production. What is the hurdle there, and where do you see these two brands kind of settling once your production constraints kind of get eased?
I think today when we look at both the brands the feedback from the market is very positive and we are also investing in terms of the capacities for future. Okay. So I'm pretty confident that you will see going forward numbers going up.
Any particular number? Because I think, can it be more than 10% of the overall domestic volume portfolio, both these brands put together?
Both will grow. Always I look at, you know, can we grow in terms of overall market share for the company? First, any new product, you know, can we grow overall market share for the company? That is the first objective and which is happening. I think which is happening, and we are very pleased with that. We will consistently. We don't want any customer to wait, you know. You know, we want to at least satisfy 95%, 96% of the requirement from the market. We will do that. Definitely we will do that.
Sir, last question on the EV side. You did talk about the upgraded version of iQube from the management in various media articles, interviews as well. Also talk about the three-wheeler now. If you can just help us understand, if not get into specifics, at least quantify the number of EV launches or major updates what you will do over the next two years and the categories which you are trying to address. If you can just throw some more color so that we get a kind of color of the product pipeline, what you kind of have on in terms of which is kind of reaching pre-production levels or near commercial launch level.
If you can just help us understand the kind of portfolio TVS would have, say, two years down the line on the EV ecosystem. Because I understand there is plans for even cargo three-wheelers as well, which are a category which you have never done in the past. If you can just throw some more color on the EV thing, which will help us understand your medium-term plan on this particular category, sir.
We have an excellent team. We have investments on people, and we have put it on the product portfolio. Next eight quarters, we will delight you, I promise you that. What and which product at what time, I'll announce closer to the launch.
Fair enough, sir. Thanks a lot and I wish you all the best. Thank you.
Thank you. The next question is from the line of Prateek Poddar from Invesco Mutual Fund. Please go ahead.
Sir, hi. Congratulations on a great set of numbers. Just one question on this e-bike kind of strategy and especially in Europe. If you can help us understand why have we gone after this segment? How big is this segment? You know, we have deployed a considerable amount of capital behind this segment. The synergy which we get out of that will be really helpful, sir.
See, we very clearly highlighted that in Europe, this is one segment which is growing very fast. The CAGR has been 18%, and e-bicycles holds a significant growth potential.
The person you are speaking with has put your call on hold. Please stay on the line.
Hello? Can you hear me?
Yeah, I can hear you.
I very clearly highlighted that the current penetration of the e-cycle market in Europe is growing very fast. There is a huge potential in this area. This is number one. With the omni-channel distribution and aspirational brands, there are many brands under SEMG, which is going to give a huge benefit. We can also leverage all the products of TVS, whatever we are designing, developing in India. It's going to be a synergy, okay? That is the main reason, and the returns are also pretty good here.
There is one company which has really made good profit after tax, good revenue growth. We have looked at all aspects, and we have invested behind this.
Got it. Maybe I can take this up then. Thanks.
Thank you. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead.
Hi, sir. Just to follow up on the previous question. Do we plan to launch our electric two-wheelers also through this e-bike network, or that will be separate in European market?
As I told you, we are working out the strategy. Closer to a complete finalization of the strategy, we'll definitely share with you. At this point of time, please understand there's a lot of synergy between the EV, whatever products we are doing with BMW, the e-cycles. Okay. If you put it together, you will understand these are for various segments, global markets. I think overall it is going to definitely meet the future vision of EV and future mobility.
Got it. Secondly, with respect to CapEx and investment, for FY 2022 and 2023, can you throw some light on what will be the CapEx for FY 2022 and 2023 and investment numbers separately?
Next year we are in the workout. I think I'll be able to share with you soon.
Sure. For FY 2022?
This year, that is 2021-22, will be around INR 750 crores including EV.
Investments?
Investments, overall investments you have seen recently, whatever we have announced.
Yeah. 91,000 close to 750.
You know. Basically you want to say, I think most of the investments are done.
I think the investments in previous years we may be investing another INR 50-100 crores going forward. The other acquisition investments will be being reported. Again, SEMG as what KNR indicated is a profit making company. Next year investments we will come back to you once we finalize. We are in the workout.
Got it. A follow-up question on TVS Credit. It seems we haven't seen any material impact of new RBI guidelines on NPA recognition. Can you confirm that the change in RBI guidelines we haven't seen any impact in third quarter?
Yeah. I mean, there is an impact, not that there's no impact. All the companies, all the NBFCs will have an impact. Fortunately TVS Credit has always been very conservative in making provisions and therefore that's helping us and it will not impact the PNL. That's what I want to say. We've always been making higher provisions and that's really helping us despite this impact which has been shown is impacting all the NBFCs.
Okay. No, because KNR had said that we had not made any provisioning in last four months, so I would just,
Because the reason is the collections are extremely good now. As I said, the collections for this quarter is close to INR 2,700 crores as otherwise the normal quarter is around INR 2,200. The only provisions what we have made earlier we are able to collect it now. That's the reason why the gross NPA is at 3.9% as against normally around 4.3%-4.4%. Therefore, that's the good news. The collections are good. Again, we have provided in the past, on a conservative basis. They are all helping us.
Got it. Sir, can you share USD INR realization for the quarter?
Seventy-five.
75, was it? Okay.
Yeah.
Okay, sir. Thanks. I'll call back in a few.
Thank you.
Thank you. The next question is from the line of Gunjan Prithyani from Bank of America. Please go ahead.
Yeah. Hi, thanks for taking my questions. Most of my questions have been answered. Just two clarifications. On this CapEx and investments, I'm not sure if I got this right. CapEx is INR 750 crores for FY 2022. On the investments when I see you've already invested about INR 750 crores and you're yet to the spend for this recent acquisition is yet to happen. You've also called that you will be taking you know, incremental more stake in SEMG. You know, could you just give us more clarity beyond INR 750 crores, how much more has to go towards investments?
This year's CapEx is almost done, and the investment also, most of the things are done. The next year, investments and the CapEx is under workout. That's what me and Desikan said. See, this year, the CapEx is INR 750 crores, and the investments are also around INR 750 crores.
750. Yeah.
INR 750 crore. Maybe some investments could come in TVS Credit. That's what Desikan highlighted.
Mm.
Okay?
Yeah, that's all. There's no further investment we are contemplating. Whatever SEMG we have already reported.
Yeah.
Probably another INR 100 crore of investment in TVS Credit Services may be required.
Okay. SEMG is already reflected in that INR 750 crores.
Yeah. The INR 750 can go maybe another INR 50 crores, INR 60 crores, what Desigan is saying, the investment.
Sir, just clarifying, SEMG investment is already reflected in the number for nine months.
Correct.
Okay. Got it. The second question is on EVs. Of course, there's been a lot of discussion already. You know, just broadly trying to get sense on this whole fixed versus swapping. I mean, what is the thought process there, given you know, the government is now trying to
Sorry to clarify here. The INR 100 crores or whatever investment in SEMG has happened only during this quarter.
Yeah.
Only in January. That will be reflected only in this quarter. I just want to clarify that point. Sorry, I interrupted in between.
The 750 belongs to Q3. The 600 happened in this quarter.
In this quarter. I just want to clarify things.
Sure.
That's the reason why. Sorry about it. Continue your question.
INR 750 crores done in nine months, and we will have incremental almost INR 600 crores in quarter four, which will be towards SEMG as well as little bit of investment in TVS Credit.
Correct. Maybe you can see another INR 100 crore in TVSE. Put together there is another INR 700 crore in Q4. Correct, Desikan?
Absolutely. Since another already done in January, another hundred is very possible.
Yeah.
Before March. You're absolutely right.
Okay. INR 1,400 crore for this year.
Correct.
Next year you will call out, later.
Yeah.
Okay. That's clear now. The second one was on fixed versus swapping, given, you know, the regulation is being worked towards, you know, looking at swapping as an option. You guys also have a tie-up with Swiggy probably is one of the, you know, in a segment where swapping could work better. Maybe, you know, just broadly share your thoughts on, you know, fixed versus swapping, how we are approaching it when you're looking at the product portfolio rollout.
This is too early to comment on. We are also internally discussing. We will come back to you on this.
Okay. All right. Thank you so much.
Thank you. The next question is from the line of Pramod Amthe from InCred Capital. Please go ahead.
Yeah, hi sir. Considering your aggressive stance on the M&A, would you give us some color, what white spaces you still see to be covered up through the M&A process in the next 1-2 years, considering you have an impressive ramp-up plan for EV?
We have a very clear roadmap on the EV. Okay? We are seeing there is a very strong investment in design development on the EV portfolio in India. We are also looking at the spaces where we can also look to invest, which are likely to grow disproportionately in the future. We are also looking very clearly at leveraging our association with BMW and in both developing markets and developed markets.
It's like it has been difficult to even look through for us at the e-bikes. Similarly, you feel, are there wide gaps when you plan for your next two years, which you need to cover through M&A? Anything you want to highlight?
Quarter after quarter, we will update you. There is a very clear M&A strategy behind EV.
Okay. Second one question related to the same. Considering that, do you guys feel at the board level you there is too much on the plate, and how will you spend time for so many acquisitions and run them successfully, considering that, the Indonesia one acquisition itself took a pretty long time? You have been successful there, but it took a long time to turn around. In that background, isn't it too much on the plate?
I think what is most important is we have to look at the opportunities and seize the opportunity. The strength of TVS is we have a very strong team. Okay? That team is able to manage pretty well.
One last question is with regard to Auto PLI. Have you applied for PLI?
Yes.
What's the medium term, how it's going to come through? In which segments you plan to invest and what will help you to make benefit of those incentives? How do you see if it's for EVs? Do you see for you it will give an advantage versus some of the smaller players who have not been able to invest?
I think the strength of TVS is definitely. You have seen iQube. You will see many new products and the platforms which are going to be in the next eight quarters. You will see that. I think the strength is the design development, real spirit of Atmanirbhar and using it for the global market. This is exactly what PLI stands for. I think PLI stands for design, development and completely manufacturing and making it global, making India brand global. I think we are really reflecting the true spirit of PLI.
Any product segment, sir, what will come under that PLI for you when you get a-
Closer to launch, I'll definitely tell you that.
Okay, sure. Thanks a lot.
Thank you very much.
Can we take the last question, please?
Yeah. Can we have the last question, please?
Ladies and gentlemen, we'll take the last question from the line of Shyam Sundar Sriram from Sundaram Mutual Fund. Please go ahead.
Hi, sir. Good evening. Thanks for taking the question, sir. A very good operational performance in a very tough quarter, per se. Congratulations on that. Sir, my question is if you do a product geography map for TVS Motor. So in Europe, for example, we want to be in the premium motorcycle via Norton. EV, electric bicycle. In India, we want to be in ICE two-wheeler, three-wheeler. EV two-wheeler, three-wheeler. And lastly, our growing export pie as well. Now, each of these segments need management bandwidth as well as growth capital as well.
So in this product geography matrix, which are top three priorities for you in the next three years? That is the first part of the question. Secondly, from a management bandwidth perspective, how are we preparing the organization to focus on these newer opportunities?
If you can give some perspective on the management development as well. Thank you.
What is most important is ability to delight the customer in terms of the product and design and development capability. We have got very good partnership with our supply chain. I think that will continue. I think even if you look at the last five years of ICE, that is exactly what we have demonstrated, whether it is India, whether it is Indonesia, whether it is the relationship with BMW. I think the same way of work, maybe when it comes to EV, we are also looking at very clearly how do we invest between more on software, more on the new technology areas.
That work is going on and TVS has got a great brand value. Today, we can attract, retain very good talent. Okay. We are a responsible company.
We have grown in international market, thanks to getting good distributors. It is end-to-end supply chain from supply. Good suppliers, good distributor, good dealers. End-to-end, we have to look at in totality. We have excellent partnerships, you know, that certain things we design, but it is completely developed and manufactured by some of our suppliers who have worked long-term relationship.
There is a very clear action planning in resourcing as well, both in HR, partnerships and also working with global institutes. As you know, in the past, we have worked with many international universities, many Indian universities. It is a combination of really working with and partnering with some of the best-in-class people, best-in-class talent, nurturing and growing internal talent. Helping suppliers as well as dealers in the front end.
This is something TVS is good at, and we are pretty confident that the same is going to help us going forward in the EV area.
Right, sir. Just from a top three priorities, focus segments or focus segment geography map, what would be our top three segments that we want to focus, sir?
Seize the opportunity.
Okay. Got it.
Because-
Thank you, sir. Thank you very much.
Many things are going to unfold. Seize the opportunity.
Sure. Thank you, sir. Thank you very much.
Thank you. Thank you.
Thank you very much. I now hand the conference over to the management for closing comments.
I think since there's a lot of questions on EV, we will delight all of you with the product portfolio from TVS. Okay? We are very confident that we will be able to ramp up. All the new investments in the Swiss E-Mobility, also the EGO, all are going to give a huge advantage. The relationship with BMW and co-designing and developing the common platform is going to make a global impact. As you know, in ICE, we have got an excellent product range. We will grow ahead of the industry, both in domestic and international, with the kind of product portfolio what we have.
We will make sure that the revenue grows and there is the increased premiumization, better mix, and a significant focus on the cost reduction, what we have started about a couple of years back.
We are very confident that we will lead to sustainable EBITDA improvements quarter after quarter. Thank you. Stay safe, and thank you.
Thank you very much. On behalf of B & K Securities , that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.