Good morning, ladies and gentlemen. My name is Sneha Gavankar. I head Investor Relations and Communications. A warm welcome to all of you to Tata Motors Investor Day. We have been repositioning ourselves with our brand promise of Better Always, which allows us to pursue customer-centric growth with agility and accountability. To begin the event, let's watch a message that embodies our commitment to being Better Always. Can we have the AV, please?
[Non-English content]
Indeed, [Non-English content] that powerful closing line from the Better Always video captures the essence of why we are here today. Progress to us is not just about our company. It's about the impact that we create for the communities we serve, the industries we shape, and of course, the nation that we help move forward. Today's Investor Day, you'll hear about the strides we've made in FY 2026, the opportunities ahead, and the vision that is guiding us towards the future. Thank you for being a part of this journey. On today's agenda, we begin with Mr. G.V. Ramanan, our CFO, who will share the progress that we've made since we last met. He will be followed by Mr. Girish Wagh, MD and CEO, with a strategic update on business.
Our business heads, Mr. Rajesh Kaul, Mr. Anand S., and Mr. Pinaki Haldar, will provide updates on the trucks, CV passenger, and SCV PU businesses. Mr. Swaminathan, Head of Digital, will then present our digital strategy. After a short break, we will return for a panel discussion on opportunities in the non-cyclical business streams. Mr. Ramanan will then rejoin us to share the outlook and closing comments, followed by a Q&A session with the leadership team. With that, I invite Mr. GV Ramanan to take the stage, but before he does that, let us look back at the year gone by through a video.
Good morning, everyone. First and foremost, thank you for making it to the Tata Motors Investor Day. I really appreciate that. Over the next few minutes, I am going to spend time taking you through the financial performance of FY 2026, not just purely looking at them as a headline number, but why these are structurally different and why this performance will continue. Next. This is the standard safe harbor statement, I think all numbers stated here are the standalone numbers, unless specifically we have caveated and shown a different thing. Next one. Coming to the overall scorecard for FY 2026, which has been our best performance yet, across every measure that matters. On volumes, we closed at around 428,000, which was a clear double-digit growth over FY 2025. Standalone revenue came in at about INR 77,400 crores, a clear 12% improvement over FY 2025.
EBITDA margin expanded to 13.2% from the previous year of 12%. The margin story has been one of a very structured growth and not a year which is just standing out, but this is how the journey is going to be from here on, I will talk about it a little later. Coming to the cash flows, the net cash came in pretty strong. Cash flow was at INR 9,186, almost 12% of revenue. Net cash came at around INR 7,500 crores. Previous year, the same number was at around INR 1,600 crores. In terms of profitability, PBT before exceptional items was a new record high of INR 8,682 crores. On the back of all that, the board has approved a dividend of INR 4 per share. This is subject to shareholder approval, and this will be a total payout of around INR 1,470 crores for the company. Next.
As you see the summary of the last four years, what has been our journey? The one word that I would really use to describe is consistent. Right? The revenue has scaled up steadily year-on-year, the underlying demand trajectory has been firming up. On the EBITDA, the improvement in margin has been sharp, pretty sustained, we hit 13.2% in FY 2026. The PBT has been robust, most importantly, this is the first time that the business turned double digit in EBIT. We hit around 11%, that is clearly the operating leverage and the cost discipline which is coming up together and showing up in the financials. I would really like to draw your attention to the bottom left quadrant and to show a highlight, our focus on the non-cyclical side of the business, which has been growing at a CAGR, which is almost 2.7 times the domestic cyclical business.
We've been focused on this for a few years now, building this mix makes a lot of sense because it makes our margins more meaningful. Prudent capital allocation, disciplined investment spends, and a very efficient working capital management has led to an FCF generation of almost 12% of revenue, amounting to INR 9,200 crore, which is a peak for us in the last four years. As EBIT scales, capital discipline remains intact, returns improve, and we see that reflecting here and also in the ROC, which is at a 72%, probably globally among the CV players, the best. Right? Next page, please. The performance you've seen over the last four years is a result of actually three deliberate structural shifts that we've had. The first one, clearly a customer value creation.
We've moved from a supply push channel loading kind of a model, which has low and volatile realization to a demand pull strategy, which is anchored primarily on the retail market share, which is the Vahan market share. With value-based pricing, we've been able to drive higher realization and a better product mix. The second one, which is the financial fitness, from a sub-scale profitability and a leveraged balance sheet, to a very resilient and improving EBITDA margin across the cycle. This is backed by a strong net cash position and also consistent free cash flow. Lastly, but not the least, is the revenue diversification from a pure-play cyclicity concentrated in core vehicle sales, is now de-risked profile through digital, and you will hear more from Swami and the downstream services, plus the geographic balance from a growing international business.
In FY 2026, the IB business grew by almost 54%. This clearly proves the anchor has shifted 35.7% of Vahan market share as a number one CV player, 13.2% EBITDA, which is a significant improvement from the 9% that we had in FY 2022, and a non-cyclical business, which is growing at almost 1.6% of our cyclical business in FY 2026. Next page. FY 2026 was a new chapter for Tata Motors Commercial Vehicles. We de-merged, effective 1st October 2025, as a separate entity, became a pure-play CV business. We got the name back again on 29th October as Tata Motors, and we got listed on 12th November in both the Bombay Stock Exchange as well as the National Stock Exchange.
The value unlock has been pretty clear, you can see that we hit a 52-week high of INR 502, and I'm sure we will race back once all the geopolitical situation settles down. As a pure-play CV company, we now have a very sharp strategic focus and agility, this also gives us the flexibility to allocate capital efficiently and pursue a higher growth strategy with a lot greater agility while reinforcing our accountability. Next page, please. This page calls out our key corporate actions, which only goes on to strengthen our position. The first one, which is significant, is the Iveco acquisition. Strategically, this transaction clearly expands our footprint globally and unlock clear technology synergies across powertrains while we are leveraging shared platforms.
In terms of the deal progress, we secured most of the regulatory approvals. We are on course for completion of the deal by Q2 FY 2027. The second one, which is also significant, is our digital strategy. We plan to house the entire gamut of digital business under a new single entity called AIEQU Mobility. I will not steal the thunder from Swami because he's got enough to share with you. Just to let you know, Freight Tiger has now become a subsidiary effective Q1, with our stake now going up to almost 63%. The goal is to form an integrated tech-led logistic ecosystem, where we will have a play even for being OE agnostic. I think that is going to be important because AIEQU Mobility will now cover both the truck and the trip ecosystem with end-to-end solution across the value chain. Next page, please.
Last year, around same time, we did put out our guidance. I think we hold ourself accountable to it. Just to show you a report card. If you see most of the financial things, all the parameters, we've not just delivered, but also exceeded versus our guidance. The EBITDA margin, clear call-out, we had said teens, we are at 13.2%, and this is a year ahead of where we had planned. Investment spends, without losing focus on what is key, where to invest, we continue to maintain a 2.4%. What happened, we achieved around 3.6%, well within the guidance. Free cash flow, I did speak about it, has been significantly higher than the guidance. All this resulted in an ROC of around 72%. Market share, I would call it out as a work in progress. Against a 40%, we were 35.7%.
Heavy trucks came in really heavy and strongly, strengthened our leadership, our highest of take share in a decade. I think Rajesh will talk about it in his speech. On the ILMCV, we came pretty close to the target. We were only short by around 70 basis points. SCV PU recovery is still underway. That's work in progress. Pinaki will cover more in his speech. With this foundation that are absolutely solid, let me hand this now over to our MD and CEO, Girish Wagh, to take you through where we've come from here from a business standpoint. Thank you.
Good morning. Thank you, Ramanan. A warm welcome to all of you from my side. This morning when I woke up, it was raining heavily. I felt relieved, not only for the year ahead, but more so, I thought, today I'll get one question less. Okay. I think as Ramanan mentioned, FY 2026 was a landmark year. First full year as an independent listed CV company following the demerger that became effective from 1st October 2025. The business responded with the strongest-ever financial performance, which Ramanan just read out. Record PBT, free cash flow, industry-leading return on capital employed. The proposed Iveco acquisition, subject to regulatory approvals, of course. I must say we are quite excited about it.
I know when we announced, there were a lot of questions about it, which is quite natural, I hope you don't have too many questions about the strategy now. Yes, you should continue to have questions on the execution, because finally, execution is the key. I must tell you, all of us are very excited about the Iveco acquisition, which is in the last lap. Now we enter this next phase of the industry, which is going through a major inflection, driven by energy transition, driven by digitalization and AI, and driven by sustainability. All of us at Tata Motors Commercial Vehicles remain committed to continued value creation for the customers, the shareholders, and you represent them here, the channel partners, and I'm very happy to tell you that our efforts on the channel partner profitability have been giving very good dividends.
I think the channel partners are in a very good position, maybe Rajesh will cover in his presentation. Beyond that, of course, the employees and the entire supplier ecosystem. Also happy to tell you, last year was one of the very few years when we had the customer satisfaction going up, the brand health going up, employee engagement going up, dealer satisfaction actually jumping, not just going up. It grew by 100 basis points. Even the supplier satisfaction has gone up. I think in a year when all the stakeholders and their satisfaction has actually gone up. A good beginning in the first year. Where are we in terms of the industry?
I think there are four global mega trends that we speak about ACES, autonomous, connected, electrification, and shared, which it used to be earlier, now it has become more of ADAS, and we have a big regulation coming up next year. Connected, where we already made huge progress, I would say. I think consistent investments over the last five years are now giving dividends. From electrification, now we are talking of a larger decarbonization journey. Finally, I think the last S in ACES is clearly moving from shared mobility to more of software-defined vehicle, and software-defined vehicle, which is applicable even in commercial vehicles. The only difference, in a car, the software-defined vehicle is more about entertainment and how a customer carries her own world into the car. Whereas in commercial vehicles, the focus of software-defined vehicles is going to be on two different things.
One is what value creation it will lead to for all the stakeholders or all the personas, and energy management. I think the software-defined vehicle in commercial vehicles is going to be clearly about energy management and how it can help decarbonization and how it can also help TCO reduction for the customer. All this is leading to quite a few fundamental shifts in the industry. The first is, I think the value pool is shifting, and for example, electronics and electrical architecture, the percentage contribution to the cost is almost doubling. As we all know, the powertrain value is migrating now to all the electrical components. I must thank many of you who spent your whole day yesterday at the Pune Development Center, and you could see the kind of investments that we have done over the last four years, five years.
In every Investor Day, I used to keep on saying that 35%-40% of our investments are going on ACES, these mega trends, and you could see, I think, what has been created as a part of these investments. I think the winners in this new era will be those who also strengthen their plane to the downstream and use digitalization and AI as competitive differentiators. How? See, increasingly, the customer, the fleet owner is now wanting to focus on his or her own customer and deliver on-time service for the freight being transported, therefore, they don't want to get into the vehicle. Therefore, the entire downstream piece of the commercial vehicles, where actually 90% of the value of a commercial vehicle gets generated through the lifetime, and which is highly unorganized.
One has to have a significant play there to deliver real value to the customer, therefore, also capture the value which lies in downstream. Therefore, the downstream play is going to be very important, and that calls therefore for completely new set of capabilities because new startups are also coming. They can import batteries and other electrical aggregates and cabs, cabins from China and make an electric truck here. I think what is very important is how do we integrate all this together and the software, which is going to be the lifeline of the vehicle, how one controls the software, and that's where we have been investing. On the domestic side, I think while we continue to keep a close watch on the Middle East crisis, the monsoon, and so on and so forth, I think most of the parameters are actually doing very well.
It's only the fuel prices, which is a dampener to some extent because 50% of the cost of operation of a fleet owner comes from diesel. Anecdotally, I can tell you the customers that I have met after the fuel price increase seem to be in a position to gradually pass on the diesel price increases and therefore achieve a new equilibrium. Let's look at long term. See, last year, most likely, the freight carried on the road was somewhere around 2.6 trillion ton kilometer or 2,600 billion ton kilometers, which is the metric I've been using. Since it is growing, I will start using trillions. As per NITI Aayog, this is likely to grow well beyond 3 trillion ton kilometers by FY 2030, which means at least 20% growth from here.
Today, the M&HCV park size is going to be somewhere around 4.5 million-5 million. A 20% growth in that means that we need to add 1 million vehicles more into the park in four years. Which means in these four years, the industry will certainly remain at the FY 2026 level, even if there is no replacement. Replacement demand will be an addition. One can also say that we are not as efficient as North America, we are not as efficient as China, if the efficiency has to improve, then replacement has to happen to a large extent. Therefore, I think in long term, we are in a very good space. While we do have short-term hurdles in terms of the diesel prices, the Middle East crisis, I think long term, the industry is in good space.
Till the time the GDP continues to grow, we will see the road freight continue to grow, that will lead to increase in the volumes, because we still have a lot of catching up to do with China, both in goods carriers as well as passenger carriers. On the regulatory side, I think we have a very good, stable regulatory map with consistent discussions the government has been having with the OEMs the next set of regulations which will play an important role. One is ADAS that I spoke about, but more so it is the fuel efficiency norms, which is called as HDFE, LDFE, also the N1 CAFE norms. I think these are the norms which are going to play an important role in how an OEM can use it for their advantage. Moving on, I think a very important slide.
Last year, I presented to you the pyramid of purpose, which was our vision, mission, the brand theme, the strategic focus areas and how all that aligns. This is the same representation, but a bit differently, and it also carries forward the theme Ramanan brought about. At the top, you have the vision, then you have the objectives, which all of you know, but I think very clearly the business has now three pillars. The first one is going to be clearly about strengthening the core, where we will defend and grow our domestic leadership while enabling customer success, which will remain core to our philosophy. Also we will ensure that we increase the share of the value pool and generate robust financial returns.
The second pillar is about scaling up the new growth engines, wherein we will continue to lead the CV electrification and grow our downstream businesses, digital businesses, and also create new growth engines. This will help us to reduce the cyclicality impact. Third, while we do both these, we will have the strategic pivot now towards global growth. Growing our current business in the current markets, get into some new markets, but also then leverage the Iveco acquisition, once it is done, and be a truly global player. This is what will be the way forward. While doing so, two very important key enablers, which will run across all the three pillars. The first is technology and digitalization, plus AI focus.
Technology is about product technology, which we demonstrated yesterday, and digitalization and AI, both to solve customers' problems, customers' pain points, and improve their business, and also to improve efficiencies in the company. Of course, on sustainability, we will continue to work on decarbonization. We are doing very well on the SBTi glide path. In fact, we are pivoting ourselves now to the 1.5 degree scenario, because that's what the world is looking at, and we are recalibrating all our plans towards 1.5 degree scenario, which is much tougher than what the earlier V4 was there, and of course, the V5 of SBTi was there. That's where we are going to focus on. Moving on, while Rajesh, Anand, Pinaki are going to make a detailed presentation about their businesses, I want to lay the context.
Trucks constitute around 60% of the revenue of the commercial vehicle industry in India. We have a 55% market share in HCV, a 40% market share in ILMCV, and by far the leader. This is the only market in the whole world where the leader is having this kind of a market share. In HCV, Rajesh Kaul will speak about it. We actually grew our market share, and we have now our highest market share in a decade. We are positioned very well here and will continue to drive the same agenda, not just in HCV, but also in ILMCV. The priority areas, of course, remain on profitable growth, pricing discipline, alternate fuel and EV transition, driving ADAS-led safety, and scaling up the next generation products.
In buses and vans, which is 19% of revenue salience as per our internal calculation, we are again the leader by a good margin. While we lost market share last year, it was a calculated call, especially on some of the government tenders. Anand S. will speak about how even in that particular segment, we have turned it around and have a very good visibility, and we are actually placed very well in this particular segment. We are, in fact, very bullish about this segment because the passenger kilometer, which is equivalent to freight BTKM, is very low in India on buses, and there is a good potential to grow. With our product portfolio, I think we are placed very well. The priorities here also remain very clear on profitable growth and continuing with the financial prudence.
In SCV pickup, which is around 21% of revenue salience, yes, we have lost market share here, but I think we've also started growing towards the end of the last financial year, and I think we continue to have our leadership in the mini truck segment. We've actually strengthened our leadership in the small pickup segment with Intra, and we are clearly aware that it is the large pickup segment where we do have an issue, and we have our game plan ready. What do we need to do here? Even here, I think our agenda remains very clear about financial fitness, and we are financially in a sound position with good market shares in mini truck and small pickup segment. Most importantly, I think the network expansion that we had done, 94% of these channel partners were profitable last year at the volume that we did.
As we grow the volumes, this will further improve their profitability. One of the first target for us during the year gone by was to ensure their profitability, and we are doing well here. Electric vehicles, in fact, continues to be the focus area for this. On the last count, the penetration in this segment was almost 7%, and also being constrained by availability. I'm sure as we exit this year, the penetration will be in double digits in small commercial vehicle and pickups of electrification. I personally believe that I think we are at an inflection point for electrification penetration in commercial vehicles in the country. We have clear visibility of TCO parity. There are many segments where TCO parity happens in two years for the higher initial cost, and post that, the operational cost savings is all benefit.
The regulatory support continues to be there, whether it is supply side incentive in terms of PLI or demand side incentives in terms of lower GST and PM E-DRIVE, and now there is this Naya Safar scheme. I think the government is quite keen on promoting it. Most of the financials have got warmed up to EV financing because in most cases, we are giving warranty on batteries, which is more than the tenure of the loan. The financials are becoming very comfortable, and the charging network is increasing. Let me tell you In small commercial vehicles, whatever electric vehicles we have sold, more than 95% of those customers are actually using home charging. They are not using any electric charging network. It makes a lot of sense for them to charge it overnight using their home charging.
That's where the reality is today, and therefore, good potential to grow. We have a very wide portfolio based on our iMove architecture and very high level of localization, which enables us to meet domestic value addition quite comfortably across the range. Despite dollar depreciation, increase in battery prices, we are able to meet the domestic value addition because a lot of other aggregates, which otherwise may be imported, have been localized by us by developing those indigenized way over the last four years.
Our approach, of course, is to therefore now leverage all these aggregates that we've developed, continue to work with the charging ecosystem and financial partners, and actually create tailor-made solutions, especially in trucks and buses, and also provide a complete life cycle support, which is the full maintenance contracts that we take on these electric vehicles, which gives a good peace of mind to the customers. Moving on the downstream piece, I think on parts and services, we have grown more than two times since FY 2021. If I actually talk from FY 2019, our penetration has actually grown more than 2.5 times in parts and services. We are playing a multi-brand strategy here. Our topmost brand is Tata Genuine Parts, which is generally used by the customer in the warranty period because they continue to get the warranty.
We have the second brand, which is DuraFit, which is at a lower price point. Once the warranty period is over and the customer wants to sell a vehicle in one or two years, they end up fitting the DuraFit. We meet this need also. Then there is a third, maybe retail customer who is using the vehicle from 7-12 years kind of a lifetime, and they may use it in a smaller duty cycle, well-defined duty cycle. For them, we have also created a Prolife brand, which is more about refurbishing the existing parts and refitting those because it meets their TCO requirement. We have a multi-brand strategy, which is helping us to increase penetration. Beyond that, we have done channel expansion, range expansion, and a completely digital-led supply chain now from order generation to order fulfillment.
We are doing a pilot in six cities where, in fact, we are committing a six-hour delivery of a spare part by using dark store concept. Even here, during the past five years, we have created some new businesses, whether it is the Tata Motors Automotive Fluids, where we sell not just the lubricants, but also the diesel exhaust fluid. It has become a big business now. We are also creating new businesses in terms of accessories, and also selling our aggregates to the adjacent industries because our aggregates, especially engine gearboxes, axles, I think make a lot of sense for them because it also helps them to reduce the TCO for their customers.
On digital, I won't speak much because Swami is going to have a separate presentation, but yesterday, we took 22 of you to the Customer Success Center, and we have actually demonstrated how we are delivering service to the customer using the digital backbone that we created with Fleet Edge. We are able to deliver now a significant uptime to the customer, and Uptime Guarantee is becoming a very important commitment and offering from our side to specifically those customers who need it, like whether it is e-commerce or mining operations and so on and so forth. That's actually becoming a very key differentiator. In addition to that, of course, we have the Mileage Saarathi, which actually improves the fuel efficiency in real-life operation. We have more than 150,000 vehicles, paying vehicles already on that platform.
With every new AI-enabled improvement in Mileage Saarathi, we are seeing an increased penetration of it. Smart City, Anand will speak about it. Message for you, I think we continue to work with our three-pillar strategy. That is, have a necessary payment security mechanism, must have an asset-light model, financial prudence is absolutely important to ensure that we get into a contract. That's where we are currently. We still manage the largest fleet in the country and have very good experience of what it means of managing a 12-year contract. It is very attractive to win a contract in year one, but it is a very different matter to run it for 12 years, and that too, with government agencies, especially in the areas of penalties and receivables and contractual conditions and so on and so forth.
I think we are in a very good position and a good place as far as Smart City Mobility is concerned. On digital, Fleet Edge, I won't spend time on that because we have a separate presentation. FleetZ, our online store, continues to do very well, almost 23% of our retails actually originated from FleetZ. Commercial vehicle, 23% customers are coming only on the net. Asking for what kind of vehicle they need. This is really going to help us to cast our net wide. e-Dukaan, as I said, is helping increase spare parts penetration. Now, e-Dukaan sells more than 50% of our retail net, which is one of our channel for selling spare parts. Of course, Industry 4.0, wherein we have done a lot of work on not only digital AI, but also physical AI in our factories.
We have some of our shops, like paint shops and heat treatment shops, which are part of those which have already become as dark factories. We have dark factories here and dark stores in e-Dukaan, and some of you who visited yesterday have already seen that in action. That's a good investment and progress that we have done in digitalization and AI. As far as IB is concerned, very quickly, I think we continue to double-click on Africa and Middle East. As soon as it comes back to normalcy, we will continue to drive deeper into Middle East because we believe in the potential of these markets. We have a good product portfolio to meet the requirements here. We will continue with our channel expansion. We will continue with our financial tie-ups in these markets.
In some of the markets where we've not been able to make a mark, ASEAN, because of Japanese dominance, I think with the Indonesia order of 70,000 vehicles for light commercial vehicles and pickups, it gives us a huge opportunity to set up our network there and actually establish the brand, and therefore start pushing our heavy commercial vehicles also in that particular market. We see a lot of potential coming even from ASEAN. Moving on, Iveco, as I said, I think we continue to be very excited. The regulatory approvals is in last lap, and once it is done, I think we have been using this time. Whatever regulation allows us to do, we've used this time to detail out the synergy opportunities, be it on revenue, be it on CapEx, be it on OpEx, and we are very well-placed to start running once the deal is signed.
The slide shows that once we get Iveco, it also gives us access to Latin America, with which, as I've been saying, I think we will be one of the few OEMs to have access to three growth markets in the world, which is Africa, Latin America, and Asia, ex-China. I think these three are the growth markets for commercial vehicles, and that's what we are focusing on. I won't repeat that there are huge synergies and there is a complementary on product portfolio pricing, and we have been using that to define the synergy opportunities more in detail. Finally, I think we do have structural tailwinds for the industry.
The GDP is expected to grow at 6%-7% CAGR, and the road freight will grow either at that rate or slightly lower, or some agencies also say that it generally grows at 1.25 times the GDP growth, especially in developing economies. Even if I take 1% lower than GDP growth, I think the road freight will grow and we'll be in a very good position. Fleet electrification mandates will help us increase penetration of electric vehicles, which will have a significant revenue upside. The part-based revenues of downstream, whether it is parts and services or digital, will continue to grow as the penetration increases. International business recovery is expected in phases through FY 2028, and we will grow our presence in ASEAN, we will grow our presence in Africa and Middle East, and of course, Latin America once the Iveco acquisition is done.
There are some headwinds, no doubt about it. Commodity costs is one major headwind. We do have unprecedented commodity increases. There is a geopolitical disruption. There are interest rate hikes likely. If I may say, all these three headwinds are cyclical and manageable, whereas the tailwinds are structural and durable. Therefore, the industry is in a very good place. Therefore, to summarize, I would say a landmark year for the company. FY 2026 was our first full year as a standalone listed company, delivering record revenues, profitability, free cash flow, and industry-leading return on capital employed. We have focused on building a structurally stronger business, which has evolved from a volume-led model to one focused on customer-focused value creation, disciplined pricing, improved product mix, stronger financial fitness, and sustainable profitability. We are very well-positioned to benefit from India's growth story.
India's commercial vehicle industry continues to be supported by infrastructure investments, industrial growth, logistics expansion, urban mobility demand, and healthy fleet economics. We have been strengthening the leadership in core, as I spoke about in the truck side. We are aware of the areas of improvements, and we are focused on those in a very clear manner, but also ensuring that financial fitness remains at the core, even for those businesses. The new engines of growth and company is scaling electric mobility, the downstream businesses, digital platforms, and mobility solutions to unlock new revenue pools, reduce cyclicality, and improve the business resilience. Leading the transition to sustainable mobility, I believe the commercial vehicle industry is approaching a meaningful inflection point, and Tata Motors is very well-positioned with the widest EV portfolio, ecosystem partnerships, and end-to-end mobility solutions.
I personally strongly believe that technology, digital, and AI will be competitive differentiators. That's why we have been investing more in these areas over the last four or five years. These investments in connected vehicles, artificial intelligence, and digital platforms are helping us move beyond vehicle manufacturing to deliver integrated mobility, fleet management, and logistics solutions. Finally, I think we are now pivoting towards building a globally diversified mobility company. Supported by a strong balance sheet, a growing international footprint, and with the proposed Iveco acquisition, Tata Motors is creating a more diversified, technology-led, and globally competitive commercial vehicle enterprise. Thank you.
Good morning. Thank you for joining us today, ladies and gentlemen. At Tata Motors Trucks, we are not just the market leaders, we are shaping the future of mobility. This is anchored on four simple principles: be bold, own outcomes, solve together, and stay deeply customer-centric. These principles, with our philosophy, what Sneha mentioned in the morning, Better Always, are driving our transition. Therefore, let me begin with a quick snapshot of where we stand today. We all know we are number one truck player in the company, rather commercial vehicle. We have a strong 47-plus truck market share, and truck typically has two verticals, heavy commercial vehicles and intermediate and light commercial vehicles. We operate at a significant scale, backed up by 50-year-plus legacy in Indian trucking. Our reach, as you can see, is unmatched.
4,500-plus sales and service touchpoints. On top of that, we offer a full platform from 3.5 ton to 55 ton in trucks. These deliver about 120 model clusters designed innovatively to cater to every customer use. Importantly, like was mentioned before me by the speakers, we are delivering profitable growth, and we continue to grow. As you can see, in Bharat Mandapam, we launched about 17 trucks. This was first time from us and perhaps in the industry. We launched on a multi-axle platform, all new high-payload vehicles. We launched entire EV platform, 7 ton, 9 ton, 12 ton, 28 ton tipper, 55 ton tractor prime mover across EV widest platform on EVs. We launched a mining tipper, Prima 400 horsepower with a new engine, 8.5 liter.
We launched Azura range. One of the top-end Azura 19 ton with a new engine platform, 3.6 liter. Right? This was a whole lot of products launched in January of the last financial year. As you can see, it's been raining awards for us in trucks, which is a testimony of the products we make and being liked by our customers. I want to specifically mention in the awards category, the CV of the Year award, which was won by Signa 5532. I want to specifically mention about Prime Mover EV of the Year award won by our electric truck of the year. In the past three years, if you see, our focus has been clear, grow profitably and strengthen market leadership. Right? Look at these graphs. In heavy commercial vehicles, as mentioned by Girish before, these are Vahan market shares.
I purposely will mention only Vahan. 55.2% market share. Decade highest market share in heavy commercial vehicles. I must say this is leadership by far because the number two player is almost half of it, shared about. 1.9 times is this number. 29% is the number two player. In ILMCV, we are leadership at 38%, the number two player is 32.5%. This also puts back on us that how much we stay ahead of the curve and continue grow. While ILMCV, this 38% is not sufficient, we have products I said in January we launched, and we are going all out now. Not only Azura platform, but also EVs, new engine, et cetera. Going ahead, we have our plans to grow in ILMCV as well. What is critical, over the years we have been talking about premiumization, right?
Girish also did mention about scaling up your flagship products, if I may say. We have been, if you look at this graph on one side, we have been this bottom. In HCV, some years back, largely our growth was driven by CX range, bottom of the pyramid customers. 59% of our products in heavy commercial vehicles are LX range. Prima, which used to be about 100, 150 vehicles a month, has been now last year 4,000-plus, and over last few months, 600-plus units. Drive flagship products, better and safe products, superior products. Prima more in tipper range, which is a revenue model where productivity matters, where operators operate almost, I would say, 22 hours out of 24.
Revenue, and therefore it's incumbent on us how much in this entire truck portfolio, how much is also not just the market share but the revenue share. Revenue is driven by high-end products, which is tippers, and how much penetration do we do there. If we look at some of the products which we launched. I spoke about high payload trucks. I am also talking about first time we shifted from 300 horsepower to 320 horsepower, which improved our, I would say, trip time, therefore the revenue for our customers, and this was run across 55 ton, 49 ton in cargo, and in tippers on 35 and 28. We have developed a mining tipper, which we are going to launch from quarter two, and this is India's first automated manual transmission. It will go up to 100, 150 meter mining.
I also spoke about we launched Azura across seven ton and 12 ton, and 19 ton, therefore redefining the trucking experience. I will talk more about it later. We introduced safety. Sometime back was nice to have safety and comfort, is now one of the decision-making points from the drivers and many of the stakeholders. Here we are meeting the European safety standards by ECE R29.03. Moving on to services, we are talking about setting up customer success center. Yes, we did set up. What does this success center do? These identify early faults and ensure uptime excellence. We purposely went by design with about 25 customers and worked on their fleet, ensured 98.8% uptime for almost 20,000 plus trucks they have.
We see there is too much of a demand coming from customers across India that we want to set up a success center where we can not only identify faults, but proactively reach customers, take the insights, and talk about how do we increase the vehicle efficiency. Girish did mention briefly about Mileage Saarathi, which is AI-led mileage and maintenance optimization offering for our customers. Again, this is a fuel efficiency improvement drive. What did it do? We picked up customers where we were either flat at par or maybe shared below or marginally upwards. We worked on with 40,000 plus customers, and we have now on record that we are doing 7% better fuel efficiency in these vehicles. These days, the buzzword is Salesforce because it serves to us as a unified platform which leverages artificial intelligence, right?
Adds value to customers 360-degree, I would say service automation, improves market visibility. It also does value selling. Salesforce is the next thing which is going to take off big time. We are continuously focusing on value engineering while keeping a close eye on the fixed costs. Quickly, I will take you through some of the new trucks and how they add value to our customers. These are customer verbatim I spoke about high payload trucks. For a moment, if we see in this, those of you who have been tracking heavy-duty trucks closely, there is a big shift happening from, I would say, rigid cargo to prime movers, which is a world phenomenon because of the fact that at the high end, lowest cost of operation, roads are improving, therefore this shift was inevitable.
What has happened post GST reduction in last September, October, multi-axle trucks has started again coming back because 10% for those set of customers, retail customers, is a lot of money. Icing on the cake. What has happened, we have migrated our, shifted our tonnage node 28 to 30 ton, 35 to 37, 42 to 44, and 48 to 49. Up to 1.8 ton extra payload, and that gives about 30% better profitability for those customers. What has that translated into? A market share improvement. Even though we had just two months last year, that was February and March. Now this has become a reality, and you know how we scale up in volumes.
This is a good lever, I would say, available with us because with very marginal price increase, there's a good payload availability, therefore opportunity to make more money, and also the payback reduces up to six months, which is huge. Second big thing of the new offerings, for us, AC migration was not just another event. We also took it upon ourselves, how do we further improve? We were industry first, moving from 300 to 320 horsepower. We all know, and including the fuel efficiency package which we launched, what we call as MY26, Model Year 26. Fuel constitutes in heavy duty trucks about 50%-60% of the cost, depending on the application we have. When we have a 7% better fuel efficiency, better turnaround time, it does magic to the customer business.
What I'm saying is 55.2 are now, this growth path in heavy duty trucks on the market share front is continuously improving, is a real time happening backed by these facts. I must make mention of Azura series also. Why Azura? Let's spend a minute on that. India's logistics ecosystem is evolving, and evolving rapidly. Some of the segments like e-commerce, FMCG, and some, I would say, vegetable segment, fruits, and because with more affordability, this consumption has also grown big time. It's growing in double digits, by the way. There's a rising pressure on TCO, uptime, and overall, I would say, fuel efficiency. Typically in these LCV, MCV categories, 18, 19 ton or 12 ton, from Nashik, one has to come to a Mumbai APMC market. They must reach early. That gives them the best price.
There is a need for a better uptime. There was also a need for a driver comfort, as I mentioned before. The market clearly needed a hero product, a very different platform. Azura came handy there because Azura is a new generation truck platform, a bold, confident, modular design, enhanced cabin safety, as I said, European safety standards meeting, high fuel efficiency, superior comfort, and there's a lot of utility inside a cabin which typically a driver uses. I must say, our approach is very simply sharply customer led. Everything we do is anchored on one principle, and that principle is customer must win. If you look at this pyramid, at the top is our North Star, the customer, supported by sustainability, trust, and brand reliability.
Underpinning this is strong focus on technology and innovation, because here you find multi-fuel platforms, connected vehicles, and modular design. All of this is built on execution excellence, because we have to have the right product and services, lean and digital processes, skilled and motivated people, I would say. At Tata Motors, I think we believe to build the best products, run the sharpest, I would say, processes, and develop the finest people. At the core, anything we do is designed to improve customer profitability. I want to take you through the six clearly strategic pillars we have defined. One by one, if we look at driving technology-led products, innovation on application-tuned products, like I said, stay focused towards sale of flagship products and new segment entry.
Services, this is one of the key pillars and planks, because building recurring revenue through telematics, uptime services and life cycle solutions. Scale alternate fuel, leading India's transition into, I would say, electric commercial vehicle. Of course, we are also partnering with the government of India initiatives on MNRE, on hydrogen vehicles, which you all may be aware, operating on two routes, and it's doing pretty well. Fourth plank is customer-centric solution, because whatever work towards building customer business value and engage deeply with the customers, that's extremely critical for us. International business, you all know, also mentioned by Girish in the beginning, drive 2X growth in the immediate near future, typically in those markets of Middle East, Sub-Saharan African, ASEAN markets, and LATAM as well with market fit products. Digital and connected, Swami will talk about it, but AI-driven predictive maintenance, TCO solutions, and Fleet Verse.
I believe together, these pillars will ensure that we capture growth, expand margins, and lead transformation. I also want to talk about the electric vehicles. Well, we have the widest EV portfolio from seven tonne, nine, 12, as I mentioned, and in tippers. By the way, these are all designed to cater multiple application demands, not just city distribution, but I must say today on the long haul also. Why I'm saying that or in the mining applications, which are localized one.
Why I'm saying that, we are signing contracts with cement companies, steel companies in long-haul applications because they believe that while the range is about 250 kilometers, but we are good to go even in the long-haul up to 500 and 600 kilometers because there are companies, startups we are signing with, partnering with, where charging infrastructure through the journey are being set up in order to ensure the smooth flow of vehicle. Even while there's a waiting in the plants for loading or unloading, instead of treating that as a liability, this is an asset. Why? Because this time is being used for charging. They're providing the charging. So build on homegrown iMove architecture with India's first in-house e-axle, and we have battery options from 96 kWh to 450 kWh, and battery management system tuned to the real-world operating environment.
These products are clearly designed for higher fleet owner profitability, which is actually standing on four pillars, which differentiates us from others in the marketplace. I must say, that is core to our DNA. You can go through that. That is clearly reliability, energy efficiency, accelerated ROI, and ecosystem support. Let me spend a little more time on the ecosystem support. Because EV is the next big thing happening, therefore, I'm going to take you through some more steps being taken because we know EV success is not just sale of a truck. It's about managing this entire, giving confidence on this entire ecosystem setup. This is where our approach is fundamentally different because we provide customers with charging infrastructure solutions through strong partnerships, end-to-end onboarding and advisory, long-term service and maintenance contracts, and tailored financing solutions.
We are already seeing this come to life because we have many customers where seamless transition to EVs is happening, starting with few vehicles and now multiplying because there is a predictable cost, uptime, and performance you can measure. I have many customers, as you can see, we are working with many entities to ensure unmatched value proposition. This is what gives our customers the confidence. Finally, driving profitable value creation. This is critical. Profitable growth, margin-led volume growth, disciplined capital allocations, and favorable product mix. This is the plank one. Sustained market share, market leadership. I would rather say defend number one position with future-ready range, customer-centric solutions, connected fleets, customized aftermarket services with focus on lower TCO, International Business growth, where we have to scale numbers and partnerships to begin with in high potential zones.
Frankly, I'm confident that with our scale, strategy, and execution discipline, we will continue to deliver sustainable and profitable growth. Thank you so much for your time. Thank you. I would now request Anand to come in, please.
Hello. Thank you, Rajesh. Good morning, everyone. On behalf of Tata Motors, and very specifically CV Passenger team and Smart City Mobility Solutions, I welcome all the investors, analysts, and our colleagues. It gives me immense privilege and pleasure to stand in front of you every year on this Investor Day to share with you of what we have achieved over the last 12 months, the challenges that we have navigated, and how we see as an opportunity that lies ahead of us. Last year, FY 2026 has been a very momentous year. Yesterday, some of you had witnessed product display in the test track in our facility in Pune, where we had displayed this Winger Plus, which is a beautifully positioned 9-seater van between an MPV as well as in a large bus or a van, and how this is gaining traction.
A testament to that is within six months of its launch, it got the Apollo CV Van of the Year award. Our commitment to stay invested, expand the manufacturing facilities, be part of the economic growth of the respective state of the locations and overall upliftment. Testament to that is the 1 millionth vehicle that we rolled out from our facility in Lucknow. We have three bodybuilding units, two, of course, our own, and one our partner. Tata Motors Body Solutions Limited, Dharwad, was perhaps the first organized bus body plant in India. I'm very proud to state here, this plant rolled out the 150th body in the year FY 2026. I don't think any other body builder or any other OE would have been able to do this in about 10-12 years.
We have stayed invested on and kept the promise of giving a reliable product, sustainable product, and offer the best-in-class TCOs to the customer. We keep going to the customer to check whether we are on the right track. Are we meeting their expectations? A measure of that is the NPS, Net Promoter Score, which fairly gives an idea of what customers think about our products and services. For the last three years, as you can see from the bar chart, there has been a consistent growth in the NPS. Specifically in FY 2026, the icing on the cake has been that all the three subsegments in the business that I represent, buses, Winger, and Magic, all three product lines have grown in the NPS.
That means all those initiatives that we have taken on product and services front have resonated well with the customer, that's reflecting in the improvement in the NPS scores. Last year, I stood on this stage, 9th June 2025, I said, "This industry is growing, and it is poised to grow." There are many macro structural reasons for that, which I'll cover in the subsequent slide. For the last four years, this has been the fastest growing. To top it all, Indian bus market is actually leading the growth in the global bus market. It's growing at, on a benchmark comparison, about 10 times more. In this, we have grown market volume of about 16% CAGR. What you see, there are two graphs that you are seeing. About 82%-84%, between 82% and 84% of our business comes from the private market.
There, as you can see from the graph, we have been growing market share consistently. That's where the product mix is there. That's where the market expansion is there. The volume drivers are Magic, where we are expanding volume through the last-mile connectivity. Winger is a known product which has been there for two decades now. We are using Winger to create a new market segment in the van segment. The other graph that you see is, on the chart that you will see is on the government business, where 95% of it or 98% of it are tender-driven. When it comes to tender-driven, you have to be extremely careful in picking up the tenders with the right set of financial metrics, commensurate with the volume that you are aspiring from the tender.
Therefore, we have taken some very careful, calculated calls in picking up those tenders which are very profitable. All these have helped us in improving our financial metrics. Number one, our product mix, our market mix, and a ruthless drive as far as cost reduction is concerned, clubbed with the fiscal discipline on reducing the inventory and maintaining a receivable. Because about 18% of our business are government business, therefore, we need to have a very strong prudence as far as the receivables are concerned. All these put together have helped us in sustaining a good financial improvement. At the same time, grow the volume at over 16% CAGR. We took about five, six strategic initiatives to make sure we are able to grow profitably, we are able to grow market share. At the same time, we are able to sustain this growth.
The first and foremost is expanding the last mile connectivity, which is the Magic. We call it as Project Swabhimaan, where for a country like India, with the very low penetration on the passenger movement, India needs a very good, strong, certified last-mile connector vehicle, and that's where Magic, where we have been growing at close to twice that of what it was about three years back. It's just the beginning with the kind of product portfolio, with the kind of government advocacy, and the kind of intervention that we have planned over the next two, three years, you'll find this 2X growing to 3X or 4X or so on. MCV buses has got a very high in terms of contributions as well as the ticket size. Plus it gives a very good visibility in the market.
That's one focus segment that we have taken for the last two year. Thanks to support from my colleagues in engineering and manufacturing and the quality, we have been able to double the volumes in the last two years. With the kind of bodybuilding facilities that we have, we are able to give an offer and fully build solutions to our discerning customer. The third is Winger, which is again, a very good product in terms of financials, very good product in terms of customer acceptance. There we are expanding the market and we are growing round off times in the last two years.
Therefore, while the run of the mill school buses, SDUs, all this will happen, these three will add to the revenue, will add to the volume, and add to the bottom line, and the focus will continue for next three years till we reach maybe 3X, 4X levels. These are all market-facing things that we have done. To sustain this kind of support, this kind of initiatives, we need to support the customers in terms of product and in terms of service. How do we measure that? We have a very robust internal measuring mechanism called product charter, where for every variant that we go to the market with, we take a feedback and check whether this product or this variant is making a profitable sense for my customer. Basis that I classify this as red, yellow, and green.
From that perspective, I am very happy to say that for the last three years, we have been able to grow an internal metrics on product charter, that somewhere is reflecting in the previous slide that I saw on the NPS, which has been growing consistently. On the service side, we are in the business of transporting people unlike other product lines, therefore it has got its own aspirations, emotions, and expectations because most of my passengers travel in the night, therefore your ability to put the vehicle back on road, to support the vehicle on road in the lengths and breadths of the country is very important, that we measure through service charter.
Service charter, especially in the intercity segment, we have something called a Project Vishwas, where we have promise of reaching to the breakdown spot within two hours, if it is not a many major breakdown, we put bus back on road within four hours. Friends, I am happy to state that 95%+ we have been able to do it across the lengths and breadths of the country. More than 3,500 buses we are covering under this, that is reflecting in the service charter, which is consistently growing. This, as I said again, it is just the beginning. We want to reach about 95%, 96% consistently. Mr. Girish Wagh spoke about taking in orders very carefully because it needs to have financial prudence. Beginning of the FY 2026, we had just about only 1,000 order book on hand as far as SDUs are concerned. Why? It was getting too competitive.
It would have added to the volume, but it would have drained our financials. Therefore, what we did, we got into huddle with the engineering, manufacturing, finance, or ruthless execution on cost reduction for about three quarters. Within fourth quarter, you can see in the bar chart, we ended up with an order book of 6,000. As we started this financial year, FY 2027, we had an order book of 6,000 vehicles, which will get executed in this coming quarters. These orders have been taken with some reasonable profits compared to what otherwise you would have taken if they had taken the order in the previous years. That is what is the essence of a turnaround that we have done on the GDS. This is government, defense, and SDU business that we have done. Last year, I made the statement that this business will continue.
Still, I am making the statement this will continue irrespective of what happens in the geopolitics, irrespective of what happens in the macroeconomics of why. All those parameters which are required for ingredients for the growth of this business is positive. My MD spoke about freight billion kilometers. I will talk about passenger billion kilometer. The passenger billion kilometers is growing to go at 1.6 times from 4,000 billion to about 7,000 in about five years' time. For a populous country of India of 150 crore, our bus penetration is only 1.2 per 1,000. Whereas the nearest in China itself is 1.7. This is what the data that we gathered, possibly China is much more than that. Some more countries are way ahead at four and six buses per 1,000 population.
Very small increments, small interventions done by any point of time is going to help us in doubling or tripling this industry. This business is poised to grow. Third, various reports suggest that 40% of Indian population is going to move into urbanized places. Cities are going to become mega cities, Tier 2s will become cities. Whenever a city expands, it's very good news for us, this business. Why? New suburbs will develop, new schools, new colleges, new employment generations, new metro stations, new railway station, new bus stands, and the business that I represent is a cog in the wheel. It connects everyone together in the form of either a school bus or a last mile connectivity van or an intercity bus or a city buses.
With the growth in urbanization, where 80% of India is going to live in India by 2050, and about 40% by 2030, this business is poised to grow to the next level. Electrification is the buzzword. It's already there in this segment in a full form. 25%-30% of buses we expect to be electrified by 2030. Ticket sales is going up, business model is changing, and it is adding new buses into the fleet. Coupled with a consistent high-performing GDP that India is expected to witness. Three days back, I read an article in LinkedIn where it says India will become world number three economy by 2031. With all those positive parameters, STUs, which has got a primary responsibility of giving a connectivity for the discerning public, 30% of their population is getting aged.
With the kind of financial structuring being done, it's only a question of time before this 30% gets replaced. That itself will add about 50,000, 60,000. This is apart from these EV buses that I'm talking about. All those macroeconomic parameters which are catalyst for the growth of my industry is turning positive. It's only pure positive push that's required to get this industry moving. What are we going to do in this? What is Tata Motors? That's what we'll all be keen to know. There are three pillars that we are working on: product, technology, and ecosystem. There are product, EVs are coming, new powertrains are coming. Yesterday, some of you had witnessed, we had displayed diesel, we had displayed CNG, we had displayed electric, and we had displayed hydrogen fuel cell buses.
It calls for a modular architecture so that time to the market can be shrunk. Your ability to respond to the varied needs within India, we are able to fulfill in a very short time. That we are investing on that. Number two, 50%-60% of our portfolio will still remain to be with the diesel plus, or I could say ICE for the next five-seven years. Being a very responsible player to ensure that TCO remains the best, improvement on fuel efficiency and reliability we'll continue to do in the current portfolio. New powertrains, new aggregates, we will try to develop in-house because we have a might of engineering. Our strength is on engineering will continue, and we will invest on CapEx in development of this, backed up by a very strong digital-led software defined vehicles.
Gone are those days where we used to sell a vehicle and then just leave away. We are now actively seeking an ecosystem partnership. Ecosystem partnership to scale up, to share the risk, and be focused on apportioning the risk as it might be. I'll explain this in the subsequent slides. One of the key aspects that we need to work on, which we are really investing on, putting a lot of time personally as a leader I'm spending, is on capability enhancement. With the change in technology, more powertrains coming in, our team needs to be upskilled. The dealer team has to be made ready, dealer infrastructure has to be made ready, therefore we are definitely working a lot in developing and resourcing our team. All this can happen, one, if you're able to get an innovation as a bedrock of all in these changes.
Therefore, culture on innovation, spending time on developing the manpower are those three things that we are looking at, and the ecosystem is concerned. We are present in almost all the parameters available as far as the business is concerned. On vans, we want to expand the market. In school buses, we will continue to be the safest school buses available in the market. In the EV buses, in private, we'll expand the footprint on EV buses. In the MCV buses, we will pick up only those tenders which are making economic sense or profitable sense, while we'll continue to grow on Tier 1, 2, 3 cities.
Giving an uniform customer experience, use of digital tools like Fleet Edge, Project Vishwas 2.0, ability to put the vehicle back on road through our numerous network available across the length and breadth of the country is something that we will continue to focus on. Therefore, technology, product, and ecosystem coupled with every segment play, every application play, taking a profitable business is what we will do. As we move into electrification, we have the complete product portfolio ready. I'm sure, I don't know how many of you are surprised, 23 cities already we have our electric bus footprint. As we speak, 23 cities have Tata Motors electric buses in both private and government institution. Number one, products are the key for this segment. We have got Tarmac EV, school bus EV, staff bus EV, intercity EV. We have a complete range available already there in 23 cities.
Possibly next year when I stand here, I will be presenting to you with some 50 or 100 cities where we have a footprint. These are doing a fantastic performance because we have Tata Smart City Mobility Solutions as a big player having deployed and running our buses ourselves. How many buses are we running? 3,800 buses we have deployed in the market. Not today, yesterday, or day before yesterday. For the last six years, we have been doing it. So here is a company which designs, manufactures, supplies services. That is one part. Smart City Mobility is a company which runs. So I am a customer of Tata Motors in one way in that. So we have an end-to-end ecosystem of running, and it is not one or two, it is 3,800 buses. Contract asks for a 95% uptime. We are doing more than 96% right now.
53 crore cumulative kilometers we have gathered. Imagine the kind of knowledge, data, and experience that we have got. Possibly this is keeping us 20 notches above anyone else in the market. We have spent a lot of time on improving the operational efficiency, reduction in the parts cost, reduction in the operational penalty, improve the power consumption, and therefore, EBITDA is reflecting in terms of growth over the last three years consistently. More so, it is helping us to keep our environmental clean. 13,000 people are directly or indirectly getting employed on this. This is one business which will help in improving our cyclicality or other risk of cyclicality in this business. Moving forward, how do we want to take this EV business? We have been advocating with the government for an asset-light mechanism and the payment security for the tenders.
I'm very happy to say after three and a half years of consistent effort by our finance team, we have been able to get this incorporated. Therefore, we have started bidding again, but we are bidding very carefully. We are taking only those tenders which are making a profitable sense. This business is not about selling and leaving. This business about staying put for 12 years, day in and 12 years of day in and day out, consistently giving 96%-97% uptime, and earning a revenue out of per kilometer basis. Therefore, you need to have the right partner, which makes it little bit asset-light, and therefore, consortium model is what we have now finalized and moving forward. Here, the risk is shared. Our core strength lies in getting the vehicle made, put it back into operation, and being able to maintain it.
Our partner can invest in the financials, and there can be an operating partner who is doing it. Therefore, a combination of two or three players in the consortium board is turning out to be a very right model, which we want to take it forward. For that, we have a very relevant experience in terms of having run 3,800 buses for more than six years and with 53 crore cumulative kilometers. In summary, in the buses and vans industry, we will expand the last mile connectivity, we'll create new segments through vans, continue to focus on MCV buses and tenders which are making profitable sense, and scale up the smart city mobility solution through the right partnership, which are profitable. Thank you for your attention.
Ladies and gentlemen, good morning. Before I dive into the presentation that I have, let me give you a brief context of this business. See, for the previous three years, prior to last year, this business was actually degrowing year-on-year. We were not just degrowing, we were also losing share sequentially year-over-year. Hence, last year effectively has been a year of a strategic reset, so to say. With very clear cut identified pillars as building blocks, which help us not just build the business for this year, but also help build the business for the long term, right? I'll give you a sense of what we have done last year. I call it a start of turnaround because you see the first parameter that is given here, which is market share.
We have lost market share for the full year last year compared to the previous year. If you look at all the actions that have been taken, which is reflecting in the volumes coming back, not just in terms of off takes, but also in terms of retail. As you will see in the subsequent slides, we are starting to beat the industry when it comes to growth. Which is helping us turn the tide on market shares as well. While the full year market share was 26.8%, we exited last year at 27.2%. April and May of this financial year it is 27.9%. Okay? Progress is happening. As I was saying, we grew 8%, our top line volumes grew 8%.
We started the year on a very horrible note because quarter one was a degrowth of almost 17%-18%, both in terms of retail and in terms of offtake. We started growing our offtakes from quarter two. Retail growth started coming from quarter three. Market share trajectory change started happening from quarter four. The way this market share game operates is that once the network has the confidence on the product and the entire ecosystem, they start investing in the business. Offtakes start happening. Then retails follow with a lag. Market shares follow with a lag from retail. That's how the basic maths and the equation works, right? I'll give some more color in the subsequent slides. This 29% salience of alternate fuel. Alternate fuel is basically defined as CNG and EVs. Right? Industry is at 19%.
We have increased our salience significantly vis-a-vis the industry. I'll talk about this also in the subsequent slides. This actually helps us in the long term as structurally, mobility moves more towards renewables, mobility moves more towards alternate fuel and away from fossil fuel. I'll talk about it. These are the structural pillars. There are quite a few, but these are the biggest ones. Our service network across the country improved and increased by 43%. I'll talk about why service is so critical. It is critical for any automobile business or any consumer business, it holds special significance for this particular business because the customer here is primarily a small-time customer. Unlike large fleet owners, they don't have so much voice. If something goes wrong for large fleet owners, they will write a mail, write up to the MD.
The smaller players, the driver-cum-owners, they don't raise so much noise and don't create so much fuss. They just quietly move away from the brand. Hence, service becomes the biggest strategic pillar for us going forward. Last year, we have been able to move the needle significantly in terms of our service fee. 43% improvement in our service network. Second is, this business is unlike car business. There are a lot of similarities, fundamentally it is different from the passenger car business. Is that their walk-ins to the showroom actually drive the business big-time. Here, there is no walk-in to the showroom.
We have showrooms as display centers where the products are there in display and the financial transactions get closed. People have to go out and seek out the customer and get them to the showroom, and it is highly dealer sales executive intensive. Last year, we have been able to increase the dealer sales executives or the feet on street from the dealer side by 26%. That is a significant jump. After years of decline, we have been able to get it back on track. Again, I'm saying this is just the start of the journey. Our dealers have started investing back in the business in terms of FOS, in terms of service networks, because now they have started earning money. They have confidence on the products that we have. They have confidence on the go-to-market strategy that we have.
They have confidence in the overall ecosystem building piece. Right? They are starting to invest back in the business because they are now profitable. This slide, the graph that you see which is TMCV volume growth and the industry volume growth, this is exactly what I was saying. We have started beating the industry from quarter four, and we are only accelerating because quarter one of this year, April plus May, we have significantly been able to beat the industry. Okay? Second, on Vahan share, as I was saying, the trajectory is starting to go back up. There is some distance to travel, whatever we are doing to structurally address the issues is starting to show results. The good thing is, one of the big drivers which helped start this positive flywheel was the launch of new products that we had last year.
Ace Pro launch, Ace LNT launch. Right? Big launches. This year also, we are strengthening, and I'll talk about it a little later. That helped start this flywheel. Okay? The great thing is that with Ace Pro launch, it is not that the Ace family growth is coming only because of Ace Pro. Ace family, Ace in itself is starting to grow. Ace Pro is adding to it. Intra is growing the fastest amongst all the segments. All segments of products that we have, Ace Pro, Ace, Intra, Yodha, we are seeing growth come back in each of these segments. It is a very broad-based growth that we see coming back. Next, on the alternate fuel PC in FY 2023, industry salience of alternate fuel was at 14%, we were at 15%. You see where we are last year, 29% and 19%.
You see in YTD this year, 32% and 21%. As the adoption of alternate fuel for the industry goes up, we are strategically best placed to take advantage of that because of our sustained investment in terms of having a wide range of products across all powertrains. Some of you saw that yesterday across petrol, diesel, CNG, bifuel, and EVs. This is what is helping us with this. Next is, I spoke about the 43% growth. Two aspects I spoke about. One is the service touchpoints, which increased by 43%. Channel manpower increased by 26%. If you look at the participation of the financiers in our business, it increased by 52%. There are 52% more financiers who are participating in our business.
As you all know, our financiers are an extremely critical stakeholder in our business, and the reason why they are participating is TM series books with them are one of the healthiest now. They also have a lot of confidence in us, and hence they are participating. The other piece is that, see, traditionally rural has been a place where our shares have been relatively much lower. One of the critical big reasons for that has been financier availability, financing availability. Last year there has been immense focus, and we have been able to add 22 Grameen Banks across the country, and the number of Grameen Banks has gone up by 300%. This is also helping us big time to strengthen the rural ecosystem. Structural tailwinds, I am not going to spend too much time because Mr. Wagh, Rajesh, Anand spoke about the structural tailwinds that we have.
See, one of the structural shifts that have happened in the industry, especially in the small commercial vehicles and pickup space, is that the industry and the ecosystem is becoming much more mature. The organized logistics partners, e-commerce, the salience of these businesses are going up. Earlier, if people used to buy a small commercial vehicle and then look for where to deploy it, were significantly high. Now, people before buying, they know where they want to deploy. That is a structural shift that is happening in the industry. If you look at the industry growth, and this is industry growth, this is not our growth. For the last few years, you would see that small commercial vehicles, because this business can be broken up into three broad parts. One is two broad parts, but actually three. Small commercial vehicles and pickups.
Let me just stick to that. Small commercial vehicles is the category that we created 21 years back with the launch of ACE. We have 48% share there. Okay. Over some previous years, the salience of small commercial vehicles had been going down. If the industry growth was 4%, small commercial vehicles -4%, small commercial vehicles was -11%. You see last year onwards, small commercial vehicles have started coming back up, and the growth of small commercial vehicles is actually ahead of the industry, ahead of pickups. That plays to our strengths. We have high share there. Our product portfolio is the best there.
Within pickups if you see, while industry grew by almost 20% and pickups grew by 16%, within pickups if I break up the small pickup and large pickup, and I categorize all the three-box format pickup, which is the Bolero format pickup, into large. The growth of small pickups is much faster, which is the Intra and Dost space. Our share there is 40% in the full frontal two-box architecture space, and we are the leaders there also. SCV, we are leaders by far. Full frontal two-box pickup, we are leaders by far. Three-box pickup is our Achilles heel. I'll talk about it a little later. Structurally, the way industry is moving, it plays to our advantage is what I want to say. Please keep that in your minds. Shift to EVs.
Mr. Wagh spoke about it, Rajesh spoke about it, Anand spoke about it, the same holds true for SCV pickup. The adoption is increasing. Three-wheeler cargo, the adoption today is at 22%-25%. In the next four to five years, small commercial vehicles adoption of EVs will get to that level. In EVs, at an overall level, we have a share of 46% last year. This year, we will have in excess of 50%, maybe quarter one only we will see very close to 50% share in overall EVs. As the adoption accelerates, this too plays to our strength because the portfolio of EV products that we have, which the earlier speaker spoke about, that holds true for SCV pickup as well. We have Ace Pro EV, we have Ace EV, we have Intra EV.
Starts from 650 kg to 1.75 ton, we are going to strengthen this portfolio further as we go ahead. Sustainable and profitable growth, this is what we are driving by taking structural interventions. First pillar as a focus for this year is strengthening the core through product leadership in SCV and pickup. We are having four new launches in SCV, we are having five new launches in the pickup space. This will further add to the range and product portfolio that we have, which is anyway the widest. What we are doing by adding more products in the portfolio is that now for each and every application, we will have a very targeted, pinpointed product, which no other competition has. Whatever is the need of the customer, we have a perfect solution for the customer.
This will help us strengthen our, consolidate our SCV leadership in excess of 50%, our pickup share will further consolidate the two box pickup space share where we have 40% share and increase it further. Second is customer value proposition. See service I spoke about, so I'm not going to repeat the criticality of service. What we are also going to do is focus on customer experience going forward. Demand generation remains a key pillar. Rural penetration and financing ecosystem, which we have been able to move the needle significantly last year, that will continue to be a focus area. With all this coming together, we want to drive our best-in-class customer experience and drive mix and premiumization of our portfolios. Next is EV. See, as I was saying, the range is the biggest that we have on EVs.
We'll continue to expand this range, we will focus on the ecosystem at an overall level as well. When I say ecosystem, it is the charging infra. Mr. Wagh spoke about 95% of our customers preferring slow charging because the applications that they use the vehicle for are ideal for slow charging. The cost is also lower. They're happy with it. As we get into pickups, their application will require fast charging, that is what Intra EV has. With fast charging being there, need for fast chargers will also grow. We already have tie-ups with 13 CPOs and 25,000-plus charging points are available across the country, we are strengthening that further as we go along. We also have specific tailor-made solutions for our captive customers.
Demand generation is the other focus in the ecosystem development, where we are going to focus on ensuring that we are not just trying to do demand generation for our products with our products in mind, but also in terms of expanding the overall EV adoption for the industry, because that plays to our strength, as I was mentioning. Third is connected vehicles and AI focus. Rajesh spoke about connected vehicles and the CSC centers which are used to monitor the vehicles. Well, SCV PU vehicles were not connected vehicles. Now we are going to make them connected as we get into Q 3 of this year, starting with EVs and then with ICE. All the benefits that our customers are getting in other LOBs, we will also be able to offer to our customers, 100% of them. This will fuel into better service and better customer focus. Right?
With that, I come to the end of my presentation. Thank you so much, and I would invite Swami to the stage, please.
Thanks, Pinaki. Many of you are experts in the Commercial Vehicle industry. The industry has its own up cycles, down cycles, mid cycles, et cetera. I have the privilege of running the part of the business which doesn't care about cycles. The digital business, we continue to make our revenue, continue to sell, and the best part is irrespective of how the industry performs, we always continue selling. Last year, I was about three months into the company when I stood here and told you about what we are really going to build, and in the next 15 minutes, want to show you what happened in FY 2026 and how we are building the business going forward. It will fundamentally change the way the kind of questions that you ask about Tata Motors Commercial Vehicles and how we are approaching all of this. Yeah. All right.
Last year we promised a bunch of stuff. We said, "Hey, we want to scale Fleet Edge. We want to monetize Mileage Saarathi. We want to really scale Freight Tiger, TMIS, and Courier Matching." We also said we want to monetize all of this. Now in FY 2026, Fleet Edge, we crossed 1 million vehicles. Right? Mileage Saarathi, and then very specifically, the most important point to note here is the renewals increased by more than 2.5x, and currently we are at close to about 3x, right? Mileage Saarathi, now we have got about more than 150,000 paying customers, and Rajesh alluded to it, more than a median of 6% improvement in fuel efficiency. People love it. Freight Tiger now carries about 5% of all the recorded trips that India moves by road, 9 million trips. Right?
overall, we grew up the revenue by about 45%, and our ARPU went up by about 50%. These two platforms, one of the things that we said, we're going to have them talk to each other, and they're already talking to each other. Our whole business grew up by about 49% year-over-year. The reason why I show this slide is not because, oh, yeah, this is what we did last year. I think this is really the tip of the iceberg. It's to really tell you what's really coming up next and how this industry is really shaping up, right? The inflection point for us has really moved, and it matters now more than ever before. There are three major shifts that's happened in the industry. One, agentic AI.
It stopped being AI being a feature, et cetera, and it's now started running the workflow of how the logistics business really goes. Gartner estimates that by 2030, this would probably be about a $50-plus billion industry. Second, data has become the moat, and as data compounds, the more the merrier. Our hardware sits on the vehicle at the source. We are now OE-agnostic, and we've deployed it across the fleet. A pure play software SaaS competitor would need years and years to just assemble a fraction of what we have today. Okay? Third, a lot of startups, standalone visibility finishes a business. That's not what the customers want.
The winners in this are going to be people who own the data, optimization, transactions, and all the intelligence around it, all the way from a trucker to a logistics service provider, to a shipper, to a customer, all under one roof. Okay? Each of these three shifts, in its own flavor, we've already built. Together, what you're going to see today is how we are shaping it in our direction, and that's really what we are focusing on. This is a structural position that we've taken. On the right, if you'd actually see, here you've got two axes. How deep are we able to get data from the vehicle? More importantly, what's the reach? Okay. There are captive players that you see globally.
You've got your likes of, and a lot more, likes of your Daimler, PACCAR, Volvo, with industry-grade data, but running only on their trucks, right? There are a lot of pure SaaS players, globally known names, Samsara, Geotab, Motive, et cetera. They're bolted from the outside with no intelligence in terms of beyond what they can bolt from outside. Okay? There's no factory data that's coming in, right? Then there are a whole galore of TMS startups, if you will, niche and fragmented across the industry. Where we play, the only one in the quadrant where we've got OEM-grade data rep, it's extremely important. We are now able to run it on any vehicle, AI native, both at the truck level as well as at trip level. This is very important.
What I want to call out here is this isn't a position that we are chasing. I want to let you know that we are already here. Right. Okay. For us, the way we are really pivoting the entire stage is FY 2026 for us was about the products individually. We had Fleet Edge, we had Freight Tiger, and we had Mileage Saarathi. We've got a lot of stuff, etc. We want to prove that independently, these two can really scale. We did that. Okay. Fleet Edge is a market-leading FMS on one end. One of the pivotal decisions that we also said is, "You know what? It's the value to the customer. We got to be providing value at absolutely population scale." It starts at close to about INR 100 a month for a trucker, and it's nothing.
We are the lowest by far in the industry, right. We grew Freight Tiger to be a full-stack TMS with multiple new modules, and our first AI feature is also something that we commercialize. We are doing all of this, and we were EBIT positive. FY 2027 for us is about the platform that we're building. It's multiple ecosystems. On one side, you've got the truck ecosystem, the other side you've got the trip ecosystem. How do we really get into one? The way we see it is as this flywheel turns, every kilometer makes our products better. Okay. For us, agentic AI is the native architecture, and it's not really a bolt-on that many of our competitors are looking at, and we monetize all of this in multiple layers.
Be it be subscription, be it be the transaction, be it be finance and the data as well. The way we've re-architected the platform is repointed for a global reach, not just India. Right. Beyond that, for us, the AI native operating layer for commercial mobility across fleets, shippers and drivers and everybody, here's one big takeaway in terms of how you should be looking at our platform. A year ago, you're valuing the individual products that we have on the software side. Today, you're looking at an overall platform, and that would make you look at TMCV very differently. Okay. What did we do in Fleet Edge? There are two main proof points. Right now, for example, we had close to about 500,000 customers that are really there onboarded.
For us, the way we measure is not just putting a platform out there and if people are actually paying for it or not. It's the engagement time that they spend on our platform. Every month, we're looking at about approximately 266 minutes that our customers are actually spending on the platform. That, when it grew from last year, indicates that it's not just a price, there's also product pull. The industry is shifting towards where you start using software to really deliver value for your businesses. That stickiness is extremely important for us, and that's one of the key KPI that we measured. 49% revenue growth. Our renewals are up by 15 points, and for us, with more than 1 million connected vehicles, we started monetizing Mileage Saarathi. Rajesh Anand-Pinaki spoke about the importance of this for our customers.
It's not just we're building tougher trucks, but we're also helping our customers. With fuel being one of the most top spends for any of the fleet companies, a median increase of about 6% is not a joke. This is something the industry has said, and we have proved it there. Fleet Edge is no longer a fleet management platform, if you will. For us, the way we see it is really the AI brain sitting behind entire Tata vehicle park, and now the intelligence layer for our customers is their entire fleet. It doesn't matter which badge it wears, Tata or not. That's an important point. Just flipping to Freight Tiger, our second proof point. We're today managing about 5% of recorded trips at an India level, India's road freight specifically. Nine to 10 million trips a year. It's not a small number.
For us, on one side, we've got the trucking ecosystem, the other side, we've got the trip ecosystem. We've got a lot of new badges that we've onboarded across multiple industries, a limited set of what you'd see here, be it FMCG, auto, chemicals, cement, across UltraTech, JSW, Amul, Reliance, Apollo. A lot of these customers who are now on our platforms. For this, we also built a lot of new modules to really get to production scale, carrier matching being one of them or freight matching. It's a single click from plan to dispatch, and we've also added financial elements such as FASTag, insurance, everything built into a single ecosystem. AI native command center that our customers love to manage their entire fleets and shippers. Most importantly, the World Economic Forum named Freight Tiger a technology pioneer this year.
We're not the only ones who think the future of freight is Freight Tiger. Here's the important part, where we think that one plus one is not two, but it's three. What happens when you put all of this together? The industry is fragmented where people look at things in silos. Oh, there's a fleet management company. Oh, there's a new startup that's come that does Courier Matching. Oh, there's a new startup that focuses only on prognostics and predictive, and there are OEs doing their own stuff. The left pane, what you see is input no one has. Millions of vehicles and a trip management at scale. In the middle is where our core is. An agentic AI engine that turns all of this into a smarter matching and a lower total cost of ownership. On the right, we've got the value monetized in various layers.
The subscription, the transaction take, the value-add services. It could go all the way from fuel cards, cash spends, insurances, et cetera, and all the data that we're converting into intelligence and monetizing it. The simple version in all of this, every kilometer driven on this platform makes all the products, including our truck, absolutely smarter. This is a flywheel none of our competitors can buy. It takes millions and billions of miles to really get to here. The question that many of you would have is like, "Oh, fair question, Swami, everybody claims AI today. What are you guys doing differently?" If you look at the large platforms and a lot of startups as well, in the last year, they've all been bolting AI into their existing stack. This is even before agentic AI came along.
Now, we've pivoted, we are rewriting our entire stack to be agent native from ground up. Now, what does it mean? It's no longer features on our platforms. It's agents that actually do dispatch, exception handling, maintenance, coaching for drivers, making sure our drivers drive with dignity, decide and act without a human pressing button. What that means is also, we do it at the lowest cost in the industry. It's more about the tool and the platform used. The way we are visioning about it is we don't want people to see our platform, but we want them to see the profitability. We want people to see really their fleets performing well. On the other side, we want to make sure shippers are most optimal in the way they actually run.
For us, the metrics that we look, really, we want to grow to about 3 million vehicles in the next five years. We want to make sure our revenue trajectory is compounding multifold. Last year, like I said, we grew about 49%. Okay. We intend to be world's first OE agnostic, agentic native platform, and a logistics operating system. There are vehicles on the platform. We've seen about the revenue. We've seen about what we'd really want to make sure we ring-fence the ecosystem in terms of what our customers need. They do not want multiple platforms, be it the IoT devices, compliance, FASTag. The reason this is credible and not aspirational, there's a market that's already built for it. Data says that the agentic logistics software ecosystem is set to grow by about 26x by 2030.
60%-65% of this is actually coming from the Asia-Pacific, and that's our home ground. Like I mentioned earlier, we're also architecting the platform to be global in nature. We're not really betting on the market arriving, but we believe we are strongly standing on where it's actually heading. Now, let me just wrap up the whole thing. One, logistics is at an inflection point, especially what's happening in the software area, the category is consolidating around platforms, which is where, squarely, we're playing. Two, the advantages, how we win, we've got OEM depth, OE agnostic reach, truck, plus trip, AI native. All of these are uniquely combined for us. Three, we build on a supply network of vehicles anchored in India, but we're ready to go beyond it.
Four, this is really early innings in the market, the market is huge, close to about 25x growth in the next five years. I'm sure you walked in today, pricing a truck company through a cycle, the way Ramanan mentioned about it, Girish mentioned about it, one of the key things is how we really break the cyclicality of how our industry runs. It's recurring, compounding, sitting in a position that no competitor can really reach, the trucks move the cycle, this does not really move through the cycle, we want you to be part of building it. As always, Better Always. Thank you very much.
Services business, International Business, Smart City Mobility, and our digital initiatives has been scaling rapidly. It's even outpacing the cyclical side of the business. With healthy margins and its non-cyclical nature, it provides resilience against the volatility which is inherent in our core operations. The opportunities ahead in this space are immense. To share perspectives on how we are unlocking them, we have a very distinguished panel. Joining us are Mr. Rajesh Kaul, Head of the Trucks Business, Mr. Anand S, Head CV Passenger and Smart City Mobility, Mr. Vishal Badshah , Head Operations, Mr. Rajesh Kannan, Head Tata Motors Digital.AI Labs, Mr. Swaminathan, Head Digital Business, Mr. Vikram Aggarwal, Head Parts and Services Business. Moderating the discussion will be Mr. Rahul Jand, Head of Strategy and Transformation. Rahul, over to you.
A very good morning, all of you. I'm really looking forward to this conversation because, as Sneha mentioned, I think all of us, for a while now, have really been talking about how commercial vehicle as an industry, because it's so product-led, famously has always been cyclical. It will continue to be cyclical. That's the reason why it's very important that our topic of conversation is shifting towards non-cyclical businesses. Not just the conversation topic, I think increasingly in our strategy as well, it's playing a very important role.
To get started, Vishal, I would like to begin with you because interestingly, you sit at the intersection of the traditional world of vehicle manufacturing. At the same time, you are playing a very important role in shaping our downstream growth agenda, specifically when we look at businesses like spare parts, aggregates, and some of the other new categories. With the vantage point that you have, where you view the economics and the value of both the sides of the cyclical business, then our non-cyclical downstream businesses, why do you feel or believe that these downstream businesses represents a very important strategic lever for us as we look ahead as part of our future strategy?
Thank you. Thank you, Rahul. I think, from the view of the downstream business, it gives us an opportunity to unlock and capture the value for the full lifetime of the product. It is not about just selling the product, but capturing the value that we can provide both to the customers and that we can derive through the total lifetime, which is more than 10 to 12 years for a commercial vehicle product.
Yeah.
This gives us a big opportunity to really unlock this potential that is there in the market. Today, if we see the market, this total potential is close to 1.5 times the truck sales that we have. It is a big opportunity for all of us to use this downstream business as a lever to rather work on the de-cyclical side, and give an opportunity to buffer up as we move in the years ahead. Beyond this, we are seeing that it is growing at 1.x times. It is a very CapEx light business. It also builds in a lot of customer satisfaction. As we are going in the journey of AI and digital, it gives us lot of leverage to really build strong relationships and bonds with the customer, and also build up this business as we move forward. It has huge opportunities.
It has opportunities to use the capacities of the plants and manufacturing processes, as well as reach out to this evolving market, which is growing at a much faster pace.
Right. I think the strategic logic is quite clear, as you put it. We are looking at a set of businesses that is growing faster, is growing with the pack, and at the same time is delivering economics for us, which is better than our core vehicle business. That brings me to you, Rajesh. Where, as we look to expand our play in the sets of downstream businesses, we are inevitably transforming ourselves from an OEM that, let's say, sells a truck or a bus once, into becoming somewhat of a partner, a very invested partner in our customer success across the life cycle. For me, I feel service is where this customer relationship lives and thrives.
How would you say, as Tata Motors, we are looking to convert service from a one-off workshop visits to something that delivers a more structured, a more recurring value for us, and at the same time allows us to deliver measurably better value proposition for our customers?
Rahul, thank you. Thank you for this question. This gives us an opportunity to actually tell you the way we are going to approach this downstream business. Downstream business is clearly, downstream as a word is at the center stage of customer centricity. Let's admit that. It commits us or any other OEM to ensure success of the customer's business continuously. Not at the sales, but directly impacting their TCO and earning. Because finally what matters is uptime is equal to revenue for the fleet. Okay. For us at Tata Motors, it's about structural advantage to build on. We have largest service network, parts network in the industry. I would say service on the wheels, take workshop to the customer's site.
What is critical is service shifts from transactional to more contracted, I would say annuity revenue like a stream build on AMC, FMS, on-site service support, and customer success center, like I said a little while before, acts as a premium top-up. Okay. We have AMC, which is also prepaid. You pay in advance. You have predictable maintenance that locks customer through the vehicle life cycle. You have FMS, OSS, and service on the wheels. This is like a reach and, I would say, uptime differentiator for all those customers who are operating in different locations, terrains, tough terrains, away from the network. We have an opportunity to build a service there. I see these levers clearly panning out a massive advantage for us, and therefore locking customer through the life cycle.
Thank you. Thank you, Rajesh. I'll just move on for a moment away from downstream and talk about a very important second counter-cyclical lever that we have, which is our growing International Business. Here, Anand, this one's for you. When we talk about International Business, we are talking about a set of business that is independent of the domestic fate cycle. It runs on a very different set of global macro factors. It's very important focus area for us in our strategy. I would like you to throw some light on how do you see our play when it comes to International Business, and what is the path to scale there looks like across all the diverse set of markets that we operate in?
Thanks, Rahul. This is a very pertinent question because morning, you must have seen Ramanan in his slide showcasing how we have grown on this non-cyclical business, and IB is very important element in that. We are traditionally a domestic, large, very strong player. The macro drivers for an international market, especially different continents, varies depending on time to time, and the triggers are also different. Focusing on International Business will definitely help us in beating the cyclicality. That's the point number one. Number two, it just cannot happen one product we give and you sell it in Africa, you sell it in Middle East. No, it's not going to happen that way. Since we are already a strong player domestic, and SAARC has got a lot of resonance in what we sell here, we are leaders in SAARC. We are leaders in Sub-Saharan Africa.
Where all we can expand? We can expand in MENA, Middle East. Right now as we speak, a lot of product portfolio, Rajesh, Pinaki, and I are working to make sure we enhance the product portfolio. Already we have a good network presence there. Augmenting with the product portfolio will improve the revenues as well as the volumes. One market which we need to look at product as well as distribution is ASEAN.
Okay.
We have made a significant breakthrough in the recent order that we have got from Indonesia. With that kind of acceptance in ASEAN, the next step is logically to increase or improve the distribution network and therefore, you are already leaders in SAARC and Sub-Saharan Africa, enhance the portfolio in Middle East, expand the network in ASEAN. All these three combined together and right set of product positioning will help us to expand and in therefore being able to manage the cyclicality. Having said that, we talked a lot about this downstream after-sale support and therefore parts business, revenue from service and domestic. The same will be applicable much more in these continents or in these countries that I'm talking about, where the dependency is pretty high on OEM-led network for this after-sale support.
All these things put together will help us in developing a cyclical thing which will ensure their constant revenue.
Yeah. Thanks, Anand. I'll just come back to the topic of downstream now and build upon, Rajesh, what you mentioned. You spoke about certain new offerings, be it around uptime, predictive maintenance, leveraging our customer success center. I feel these are not just offerings, but really promises that we are making to the customers. For us to deliver these promises, our connected vehicle platform, which is Fleet Edge, that Swami, you spoke about just a while ago, is going to play a very important role for us to deliver these offerings in the downstream. How are we as Tata Motors looking to use this connected play to really unlock these new, these innovative offerings in the downstream which the customers did not have access to so far? As a result, look to build an independent downstream business in its own right.
Sure. Thanks, Rahul. A couple of things. The way we are looking at it is really are we driving value to our customers? Starting from something as simple as prediction, predicting any potential failures. Because what a fleet owner or a trucker does not want is they've made a commitment to carry some goods somewhere, and then something goes wrong on the way, and they have a downtime. Starting from having a suite of services that actually predict downtime, making sure that they do not happen, or there are methods in which they are taken care of well ahead.
That's one big winner for us. The second part, the biggest win, Rahul, in the entire truck is really the fuel. While last year we had about 150,000 people subscribed to our Mileage Saarathi i subscriptions, we also launched a Mileage Guarantee program. Okay? Similar to Uptime Guarantee, Mileage Guarantee is where we've actually provisioned to some of our customers where we guarantee them fuel improvements of anywhere between 4%-6%, 7%. It's a guarantee or their money back. This really works on looking at how does the driver drive the ecosystem, drive the vehicle. There are AI and ML algorithms that work on it to really give feedback and making sure the fuel efficiency's gone up multiple notches. That being the biggest spend, it's something that's very important.
Now the drivers are also looking at this, for the fact that we've got cameras in our fleets, et cetera. All of this, they're embracing this ecosystem far better than what it was before.
They have an opportunity to run their vehicles efficiently. They don't want to be stuck with cargo and vehicles in an unknown place. The connectivity ecosystem really helps them from that perspective to make sure they reach their places safe. Third, for their own profitability and earnings, they now know how do I better drive this vehicle so that I can extract the best in terms of mileage? There are cases where fleet owners give them bulk amount and say, "Yeah, you know what? I'm just going to pay you this." In those cases, they love making sure that they extract the maximum out of what they get. Then we've got a driver app that actually enables this. Last but not the least, all of this add tremendous value back to our engineering and R&D.
Yeah.
On one side, we're very customer-centric, focused on what it means for the driver, the LSP, the fleet owner, et cetera. On the other side, we need to continuously improve the product. All of this, we're sitting on about 12 petabytes of data, goes back in terms of how our engineering sees this data and continuously works on improving our products to make sure our products are best there on the ground. That's how we leverage this entire ecosystem to make sure all the players in the ecosystem
benefit, I should say the adoption and the embracement of all of these technologies has been fantastic.
Thanks, Swami. I think just moving beyond the connected vehicle part, I think it's also important for us to look at the broader, larger ecosystem that we are faced with in the downstream. If we have to really play at scale in this ecosystem, we'll have to work together with a very vast set of stakeholders that exist here, be it our parts retailer or mechanics or used truck dealers. All of these are extremely fragmented today. They are also very unorganized and in a lot of ways, I see digital and AI playing a very critical role in terms of bringing more visibility, organizing this ecosystem, and really improving the quality of the solutions and services that we offer. Rajesh, you head our Digital.AI Labs, which in many ways is a core AI capability engine for Tata Motors.
How do you see this digital and AI engine shaping up for us? Why do you believe it'll unlock values in the downstream beyond just the customer features that we have spoken about?
I think it's a two-part response to your question. One is the ability, I think Swami mentioned the number of the connected vehicle platform throwing out millions of data points. How do we pick that up, use that for our service downstream is one part to this. How do I enable intelligence at the edge, at the service centers is going to be crucial in this part. Ability for us to be able to, let's say, assign a service advisor, be able to map a technician based on skill sets, on scheduled visits, which have happened because of revisits and so on. Providing intelligence in the service centers is one anchor to driving brand trust, building the ability for us to drive service revenues.
Now more directly to your point on how do we drive parts commerce, I think the whole ecosystem anchors around our eDukan, and I would strongly encourage the team here to visit our eDukan portal as well. This is an anchor for us for our parts commerce. Today, there are about 46,000 customers who are on eDukan. About 20,000 of them are active every month in terms of orders. For us, as we launch this year and look at how do we grow this ecosystem today for about eight cities or so, the last mile is available for us within, let's say, about 90 minutes or so. We want to go pan-India and so on.
For us, we believe that ability to put the right part in the right place in the hands of the technician with the bay being available, skill sets being available, gets us to deliver on our business products, which will be Uptime Guarantee, the ability for us to be the Mileage Saarathi products and so on. For us, I think the anchor of how we grow, enable eDukan in all ways, with good intelligence and the ability to use our data platforms, is going to be the anchor for success.
Thank you. That's well put, Rajesh, and with that, I think we've spoken about our established base of existing downstream businesses and International Business. I just want us to just take a step forward and really talk about some of the new or emerging growth areas that we are also working on when it comes to our downstream portfolio. Vikram, I would come to you and would like to explore more about two categories, particularly automotive fluids and aggregates. These are categories which are in addition to our portfolio of offerings that we have. I wanted you to throw some light on how do you see these categories fit into our overall downstream thesis? What is the financial logic? Do you believe that they can be meaningfully standalone revenue opportunities on its own in future?
Yeah. Thanks, Rahul. I'll answer it in maybe three parts. Starting with one of the core approach which we have taken to build the entire parts and service business is that we deeply engage with the customer during its lifetime journey of the vehicle. In the process, we identify those opportunities, those instances when customer is really investing money on the vehicle. Those are instances once we capture, we go back and really study whether we can be of any value to the customer, and we start building for some solutions, maybe a product, maybe a service offering, or a combination of both. Once we are sure that, yes, it makes the right sense for the customer, then we convert that into a business opportunity for us.
Coming back to the auto fluids, I think this is classic example of an outcome of this approach, wherein the complete range of the automotive fluid, we launched it in 2018 with TMGO, Tata Motors Genuine Oil, and since then, the portfolio has been growing steadily. I must mention that at TMCV, I think we have one of the most comprehensive portfolio of fluids for all our automotive needs. It's a growing business. It's growing really fast, and we are building the portfolio, we are investing more because we see there is a lot and lot of headroom for us in terms of business, and I think there are lots and lots of area to solve for the customer.
Coming to aggregates, the second business you spoke about, I think it makes tremendous sense for us. It takes away from the focus of commercial vehicle, but it actually extends all the capabilities we have built around engineering, manufacturing to some of the adjacent industries, like industrial applications, gensets, et cetera. We sell engines, gearboxes, axles. Number of these aggregates we manufacture in-house in our plants. Why customers choose us or prefer Tata Motors is because we have that knowledge, we have that understanding of the tech, we have the capabilities in engineering, manufacturing. The biggest strength we have is our very strong network of service ecosystem. I think that's combination of it benefits our customers, the OEMs to whom we are selling these, and they build machines with these, and we work very closely with them.
Another very high growth business and as an opportunity, we are looking at new such dimensions and aspects. We are investing here also. I think both these businesses truly reflects the non-cyclical by design in terms of its nature, and gives a lot of stability and hedge to the CV cycle we face. I think it absolutely makes sense.
Thanks, Vikram. The other emerging business that I wanted to speak about, Anand, with you is our smart city mobility, where we operate electric buses under the gross cost contract model, this is something genuinely different, right? Because we are no longer delivering just buses, but we are committing to outcomes over a period of 10 years and even beyond. How do you see the toolkit for success here? Because I would assume it's very different than what has served us well as a traditional OEM. Why do you believe that as Tata Motors, we have a genuine right to win in this new model?
This business is completely new for a traditional OEMs for the last four or five decades who have been like this, Tata Motors is one of them. If you recollect, we were the first to take off the block on this business way back in 2021. We have come a long way in terms of learnings, in terms of experience, and exposure for this business. Why this business is important or why this business is very pertinent is with the shift in the technology, with the shift in the powertrains, the knowhow and the skill set may not be completely available in the market, maybe with the state transport undertakings or the concerned cities.
Therefore, it's an incumbent upon a leading OE like Tata Motors to take the lead and demonstrate it in the market, which with reasonable confidence, I can stay with 53 crore kilometer cumulative. We think we have done it more than what is required for a contractual uptime. Having said this, the toolkit or the success or the factors or the key things lie here in getting an operational efficiency, getting 96% plus uptime day in and day out for 144 months, your very strong back end to make sure that you are able to have a robust maintenance mechanism, your operational partner being able to churn out drivers and mechanics, your ability to upskill them, and the most importantly, uphold very high levels of safety.
This is not an everyone's cup of tea, I can say with reasonable confidence that we have been able to get this fully into our grips. That's what is going to make it successful. Having said that, what's the future? We have got about 3,800 buses now. Can we take everything on our books and keep running? In the world of economics, it's getting into an asset heavy model, and therefore, the right tool for this is to get a consortium partnership where we focus on the core, which is design, manufacture, supply, and use our expertise in their operations and maintain. While the financial and the operation is done by the respective set of stakeholders who have the appetite, who have the skill set for that. That will become a win-win trio for the entire business, and that's how we are going to scale it up in the future.
Yeah, thanks, Anand. I think with that, I would like to bring an end to this conversation. Just to summarize, see what I've heard, the common thread across this conversation has been that while it started with us looking at downstream as a hedge against cyclicality, I think increasingly it's becoming clear that it's a very independent structural growth engine for us, which is going to give us revenue through the cycles, and it'll do so while compounding margins and returns, which are possibly higher and better than our vehicle business. At the same time, it allows us to connect with our customers better and deepen the relationship across the life cycle.
I feel that the vehicle park as well as the ecosystem that underpins these businesses, they are increasingly getting digitized, they're getting connected, which is allowing us to incubate new categories, innovate new offerings, and many of those are already looking quite accretive in terms of their value. Yeah, on that positive note, I would like to thank all of you for your time and valuable insights, and I will hand it back to Sneha.
Thank you.
Thank you.
Thank you, gentlemen. Those insights were indeed valuable. As we look into the future, it's time to bring the conversation back to the broader outlook that will guide our journey forward. To share his perspective and closing remarks, may I now invite our CFO, Mr. G. V. Ramanan, back to the stage.
Thank you, Sneha. I'm back, and this time it's going to be forward-looking. I think our profitable growth agenda continues, and as you can see on the screen, on market share, we continue to aspire for a 40% market share on an overall basis. EBITDA, the goal is to sustain double-digit through the cycle and teens during upcycle. The investment spends, as in the past, will continue to be disciplined and focused. 2%-4% of revenue is what our outlook would be. Free cash flow, we will continue to target 7%-9% of post-tax revenue, and ROCE would be range-bound between 30-35 as Iveco comes through. The funding and other pieces will increase the net capital employed. To that extent, ROCE will come down to 30-35.
Overall, I think the focus on non-cyclical revenue business growth will continue, and our accelerated path of increasing this at 1.5% of the domestic business will be the focus. As we enter 2027, there are probably three thoughts that I would really want to leave with you. One, I think with disciplined execution over the last four years, we've proven the transformation across all metrics. Second, Tata Motors remains number one, and now with Iveco coming in, strengthens our global footprint. Domestically, we were strong. Aspirations are global. We continue to strengthen our global footprint. We've also built a business which is resilient through the cycles, and I think you've seen that. Sometimes consistency is boring, right? You see some of those guidance being there. Holding it there is not going to be an easy task given the growth that we are looking at.
With that, I will hand this back to Sneha. My last word would be, this is the business that we are building. Thank you for your time today. With that, I hand this back to Sneha. Thank you.
Thank you, sir. We are now moving into the Q&A session, much awaited. Just a few quick instructions. Firstly, you'll have the mic passed on. Kindly limit the questions to a maximum of 2 because we are slightly running behind time, and we want to make sure that everybody gets a chance. On stage, can I have all the speakers, Mr. Girish Wagh, MVN CEO, Mr. Ramanan, CFO, Mr. Pinaki Haldar, Mr. Rajesh Kaul, Mr. Anand S, and Swami. Yes, do we have the first question? Yes, Kapil, can you? Please introduce yourself. You can ask the question. Oh, sorry. Maybe let them come and settle. Sorry.
Sneha, at least allow us to settle down.
Sorry. I think there's a mic there. Yeah, please introduce yourself, and you can go ahead with the question.
Yeah, good afternoon, sir. This is Kapil from Nomura. Thanks for the opportunity and very interesting presentation. Of course, my first question is on the volume growth for current year. What is it that you are expecting for the CV industry? Slightly longer term, what we are noticing in your presentation is that there are various areas which are bringing improvement in efficiency in the entire operations. Some are external, some are internal, whether it's more tonnage or it's faster movement of vehicles or predictive maintenance. Does that mean that going forward, the efficiency may lead to somewhat slower volume growth, but maybe more opportunity for value being derived for the customer from the same asset can go up, and that will give you opportunity to grow revenue somewhat faster and volume somewhat lower?
Thank you, Kapil. On the first question, see, we've had two months in this year, and although we were cautiously optimistic, as you would recollect, I think in two months, we've had a double-digit growth on a year-on-year basis. I think it most likely appears that we will end Q1 with a double-digit growth. Despite this Middle East crisis, et cetera. Q2 last year also, if you recollect, was pretty flat, and I think we expect this momentum to continue in Q2 also. Last year, Q3 and Q4, after the GST announcement, I think the industry really picked up. Therefore, the growth rate compared with last year in H2 should taper down. Therefore, I think for the full year, the projection that we have given, that it should be a higher single-digit growth still holds true. That's the first question.
I would look at it like this. Efficiency will start playing in. If I were to give an example, by one stroke of a pen, we actually increased the park load carrying capacity by 15%. Then you had COVID, but the freight growth has been at such an extent that it has digested all this and still the market has come up. This is the first thing. Second thing is, for longer term, as I said, the freight growth will continue. If we were somewhere around 2.6 trillion kilometers last year, we should continue at a healthy rate linked to the GDP growth rate. That should continue, therefore, a growth in the park size. Our park size is somewhere around 4.5 million.
Even if I take a life of a vehicle as 15 years with multiple change of hands, it is not just change of hands, with change of hands, it is change of duty cycle. The newer trucks will be used on a longer duty cycle, longer range, which calls for higher uptime and so on and so forth. Whereas later in the life cycle, it may be used for carrying sand from riverbed, et cetera, which is a very short-haul kind of an operation. If the park size is 4.5 million, the freight is around 2.6 trillion kilometer. In China, the freight available is 9 trillion kilometers. U.S., it is 8 trillion kilometers. In China, the park size is 9 million. Even if we achieve Chinese efficiency, the park size has to double.
One day I think we will catch up in terms of GDP with China. They will continue to grow. What I mean is that despite efficiency improvement, there will be a growth in park size, number one, which will lead to higher demand. When replacement demand has to come in, which I said in presentation, for efficiency improvement, replacement demand has to come in. A 15-year-old truck is not going to give that efficiency that is being expected today. I think therefore, there will be growth in the long term. We will have short-term swings depending upon utilization, depending upon some of the other external factors like fuel prices and so on and so forth. Overall, once these events are digested, it leads to a new equilibrium. The new equilibrium starts moving towards that end goal of freight available and therefore the growth.
What I would also like to add, Kapil, is that this whole efficiency improvement is actually going to come not only from product improvement, but also the whole downstream play that these guys spoke about. It is a dual opportunity for us. How do we improve the product also, but also create differentiation on the downstream side. I think that in nutshell is how I would like to answer your second question.
Thank you, Kapil. Can we come to Gunjan here? Can you stand? Can I request everybody to kindly stand when they are asking the question? Becomes easier for us to capture. Gunjan from BofA.
Thanks. Thank you for the presentations and the plant visit yesterday. It just helps us appreciate the business much better now. I had couple of questions. Firstly, we did touch upon the Iveco transaction that it is in approval stages. To some extent, we have been working on the synergies that we will look to get out of it. Can you give us a little bit more insight on what are the sort of synergies we do see, and more around the opportunities as you have been able to explore the business lot more. I am also putting in context that the last two quarters after the acquisition got announced have not been that encouraging to look at the numbers. A bit of a color on how do we see the business integrating and the synergy and opportunities from there.
Maybe the second question also, a lot of conversation on the non-cyclical business. Can you share what is the salience of non-cyclical overall right now, and is there a target that we are working towards if this is where we see the business getting to?
Let me take the first one, and the second one I will request Ramanan to take it forward. On the Iveco thing, Let me first address the elephant in the room, which is the last one or two quarter performance. Because of the regulatory constraints, we are also limited in terms of what we can understand and what we can see. What we know is that in Q1, let us break the performance and not look at only the financials. In terms of market and volumes, they have shown very healthy growth in buses and FPT. Because there are four businesses there, as you know, trucks, buses, FPT, and the financial business. Buses and FPT has shown very good growth. In trucks, they have shown growth in Europe, but a decline in Latin America. Net-net, it is just 1% revenue growth.
I think after two years of stress, especially in European market, this is a very good sign that the European market is coming back. If you see the volumes of other players, whether it is Daimler, Traton, or Volvo, in Europe they have shown growth, but they are quite big in North America, and North America market is going down. Therefore, overall level, they have also either flat or de-grown. In terms of financials, I think on cash flow, first of all, free cash, I think they have repeated the performance of Q1 of last year. I am sure many of you would have done this analysis, I am just bringing out the key points.
Coming to margins, I think they have underperformed on a YOY basis in Q1, and I think the main reason that has been put out is the higher investments which have been done for quality, both in the trucks business and the bus business. What I understand is bus business is specific to the investments that they have done to improve quality in the Annonay plant in France. They have a significant order book which they have to deliver on. As I understand, I think by end of our Q2, which is a Q3 for them, I think all this will be squared off. Finally, they should end the year at a performance level which is better than the year gone by. This is what we understand from an outside-in perspective right now.
In terms of synergy, I think we have used this time to understand their businesses more in detail in terms of which markets, which customers, which products, what price positioning, what is the R&D strategy, what is the supplier and sourcing strategy. We have analyzed all this in detail, and we have been able to detail out the synergy opportunities on revenue, for example, which is bringing their products here or bringing their products into the markets where we have a strong distribution channel. Then taking our products into the countries or continents where they have a strong distribution channel, strong financing. Let me take an example. I think the Daily van or the Daily minibus can make a very good value proposition in India.
Our ILCV, HCV, and van portfolio or small commercial vehicle portfolio can make a lot of sense in Latin America with minimal cannibalization because I think their price positioning is at a particular level, and in Latin America, the two biggest markets are Brazil and Argentina, where we are not present, and we are present in some of the other Latin American markets where we actually tend to do well. It is all import markets, very small, limited markets. Brazil, Argentina is really very big. We look at taking our products there and it makes a lot of sense outside in. That is another opportunity. That is about revenue. Even in revenue, I think we can leverage the FPT portfolio much better. For India, the business that Vikram spoke about just now before this Q&A session. That is where FPT portfolio can make sense.
In terms of OpEx synergies, I think we have already spoken about it, that compared with the European peers, Iveco's sourcing from non-Western European cluster is very low, and therefore, by meeting the covenants that we have, I think we can actually shift sourcing to non-Western European cluster and bring down the sourcing cost. I think we will start discussions as soon as the transaction is over on design-to-value methodology, what kind of design-to-value methodology we use, what kind of frugality we can bring in without impacting the customer value, and how that can be deployed onto their products and bring in some value there. This is the second one. I think yesterday you have seen the kind of digitalization and physical AI that we have implemented in our operations.
We also explained yesterday this Sampravaha, which Vishal also spoke today very briefly, has led to lot of working capital release. I think these digital assets have a good implementability across there and bring in those kind of working capital savings. This is about OpEx savings. I think on CapEx, long shot, but certainly I think one thing which is very common is how do we bring some of the engineering to India? Incremental engineering that they may need, if it is done from India, I think it will give those cost benefits. Platform sharing at some point of time can certainly bring in a lot of benefits. I think we have been able to pinpoint some of the synergies within revenue, CapEx, OpEx, as we have studied more during this period of time.
I think as soon as the transaction is over, I think we'll dive into it and detail out each and every opportunity, identifying owners from Tata Motors, owners from Iveco, and get that going. It will be part of their deliverables and our deliverables. As we start, you'll have some synergies coming in from short term and some in mid-term and some in long term. Longish answer, but I think this is where we are as far as Iveco is concerned from an outside-in perspective. Raman, the first question you want to answer?
I think, Gunjan, you would have seen today our non-cyclical business when we say that it's a cluster of businesses. Right? Each are at a different stage of evolution at this point of time. We did debate quite a bit in our mind when we looked at should we look at velocity of growth versus percentage of revenue. Right? The reason we chose velocity of growth is, one, the business is cyclical. If you want to put non-cyclical as a percentage of the overall revenue, there is a mindset sometimes to not exceed where you can. That's the reason we chose over velocity, and our guidance is to grow this at 1.5X of the domestic business, so that constantly this pile keeps increasing, and this makes our EBITDA and the margins more meaningful.
Thank you. Yeah. Next question on that table, maybe Sunil.
Amin is there. Amin has raised his hand.
Yeah. Okay. Is the mic there? Yeah.
Oh, yeah.
Yes. Hi. Thanks for the opportunity and also yesterday's event. Two questions. One, kind of a look back, because you talked about your HCV market share being the highest in a decade. We've seen that it bottomed out some time back, and it has been improving. In 2010s, at least the first half, you were also losing share. If you can just tell us some perspective as to what went wrong there and what has changed, and we've seen some glimpses of that, but if you could just talk about what has changed, which can help us to continue to build on this leadership, where we are already a leader, but we are showing gains on that level. Second question is on the SC, small commercial vehicle pickup market shares. Like you rightly mentioned, you are very strong in SCV and the box two pickups.
The 3 box is where you have a challenge. As we look at this market share continuing to move up, is it because the SCV and the 2 box will come back and gain share, or are you going to have a meaningful play in the 3 box sub-segment as well?
I'm sure Rajesh and Pinaki will be raring to go, but I'll give a very quick perspective. First thing on the share growth in trucks. I think we are very clear, and Rajesh also talked about in the presentation, that we are going to be focused on sustainable, profitable growth. While doing so, there will be ups and downs. For example, we have seen every time we take a price increase, we see a challenge for a month or maybe six weeks or one and a half months, but then it comes back. Right? We know that this is something which is going to happen. The whole ecosystem is therefore getting geared up. If you remember, I think three years back when we first discussed this, I also mentioned that this was also about a change in mindset.
Finally, neither do I sell the vehicle, nor does he, although he engages with lot of customers. The people who actually sell, it was about changing their mindset. We have been able to do that. I think the three-pronged strategy which Rajesh explained, which is customer value, how do we talk about the value that the product is going to deliver in terms of business? Second is the service infrastructure that we have improved and what we can promise to the customer. Don't use it to compensate for discount, but use it as a separate weapon. Right? Some customers may not take it. Yesterday you were asking, for example, one of you were asking why AMC penetration is so low if it is so good. We want it to grow with word of mouth rather than on discounting. This is the second thing.
Third thing is customers have started believing that this digital thing is not only helping them to improve their TCO, but also the delivery to their customer, which is what they want to focus on. In trucks, therefore, we will continue to focus on this. Yesterday, you would have seen this Hack a Future methodology that Rajesh explained. A team goes to the market every year for three months, spends time with the customers, understands what are their pain points, comes back, in short term, address the pain points, medium term, bring the next level of improvement, and this Hack a Future has been converted into a modular concept. Modular concept is something which is used in cars. We brought it here. Here, modular concept is not about making styling changes or design changes, but it's about performance improvement.
This is the strategy that we will continue to leverage. We do know, despite this, that whenever there is a price increase, there will be some hiccups, but we have to digest that for the longer term benefit. That's about trucks. In SCV pickup, I would say that we will certainly play in three box pickup. Right? This play is not only about product, it is also about creating the whole ecosystem. Same product, Amin, for example, has got an order of 35,000 numbers from Indonesia. Right? Same pickup we sell in Africa also. We know what is good in that product, but what is lacking for India, not just as a product, but for whole ecosystem, which is what we are working on, and it will be a journey which we will go through. It is not only about three box pickup.
As a company, the area of improvement for us, along with three box pickup, is also rural. Right? We are strong in urban, we are strong in all product ranges, otherwise it's the rural that we have to improve on, and three box pickup is the most important product which plays there. We will continue to have that ecosystem play, which Pinaki explained in his presentation. Long term, if you ask me, this is what is our plan. I think at the core still remains the financial fitness, which is going to come from the right customer value and pricing discipline, and continue to deliver more, not just through the product, but also through other services.
I think we had questions on that.
Rakesh was there, I think.
Sorry?
Pramod?
Yeah. On that table, I think there are quite a few questions. If you could have the mic on that side.
Pramod? Yeah.
Yeah.
Pramod, you'll have to raise your hand so they can come with the mic.
Pramod, UBS.
Thanks, Girish. Thanks a lot for the opportunity. The first question is regarding DCF, sorry, DFC, Dedicated Freight Corridor. Where is road as a % of the freight market, and what are your thoughts? Because historically, it has been an overhang on the sector, in terms of the structural long-term growth visibility. Any thoughts there as to, especially given the kind of operating, what you are saying, and the operate economics, are they getting the gap closing with CVs that it is so narrow that the convenience factor kind of trumps the cost advantage of DFC or any other developments on the railway side? Any thoughts there?
See on DFC, the commentary remains the same, and I am just going to recap very quickly. The northeast corridor is not such a big issue, because that corridor is more about transportation of minerals, raw material, which will move from the main line to the Dedicated Freight Corridor line. It will be beneficial for us because it will improve the output from eastern region to rest of the country or to the ports, and this will therefore lead to higher sale of tippers for Rajesh, because you need to mine more. That is about the eastern corridor. On the western corridor, it will have an impact on the tractor segment, right? Because that western corridor is more about exim or supporting the trade, and some of the tractors from the road may move to railways to the DFC.
As I have said, this will therefore lead to a growth also in ILMCVs and SCVs because whatever you move, which is not meant for trade, that is export, import, has to be actually finally distributed to the end user. That, therefore, has to go from hub to spoke to the last mile consumption point, because the DFC will be only on the hub to hub point. That is what I think. See, I think even NITI Aayog, generally, when they have been doing the planning for railways, they assume that the freight will grow at 1.25 times the GDP, right? Whereas we take, say, suppose one, 1.1%, somebody takes 0.9%, so whatever it is. Today, I think the share of road must be somewhere around 70%, and even if it reduces, it won't reduce to that extent to make a big dent, right?
If you take even developed markets which have good railway infrastructure, the road share continues to be the highest and pretty high because the convenience of road is very high, very good, and with the improvement in road infrastructure, the predictability of road transportation is increasing, which will therefore start making it more and more competitive with respect to the railways.
Yeah.
The price discipline in the industry has been the biggest factor for the rerating on margins and the stocks as well, and this was in upcycle environment. As we approach somewhat of headwinds, how is this holding up? Especially given that you are picking up market share, gain market share month after month, as in both in LCV and MHCV. How is the competitive dynamics playing out? How is the price discipline? Till what extent will you prioritize? Basically, how do you balance it out? Because any one player goes disruptive on pricing, it brings the entire industry profitability down, because everyone can match up to the discount. What are your thoughts there? Because you're gaining, you're in a very good position right now, both on margins and market share, but till when?
This, I will request Rajesh and even Anand later to answer, because they are managing it on a day-to-day basis. Rajesh?
Thank you. What is non-negotiable is growing profitably. You heard me, what was our three-year game plan laid out? Almost not three and a half years. We are not going to compromise on that. You heard just before this question around dip and thereafter, what did make actually happen to bring it back on track and rather grow from there. Temporary blips won't deviate us from our core belief that we have to grow profitably, and of course, we have to gain market share. What is making this turnaround actually in heavy-duty trucks happen is the product strength. Okay? We have to, like I said, three segments have to be clearly split. We have, for example, tipper, which is a revenue model, which is a high ticket for all stakeholders, whosoever contributes in that, customers to OEM and everyone.
We've been growing not only in market share but revenue share. There is a customer who's willing to pay more. Premiumization, I did display in the slide, LX version selling more, Prima cabins acceptability and far more. Therefore, this is going to be the compelling reason for a customer to accept product even if it's shaped better. Short-term measures will not really play into this. On top of that, various other product interventions, making us the preferred choice in terms of what we hear from customers in the Hack a Future exercise typically is, how do we become first choice, and what plus plus have to be done in, let's say, 90 days, 180 days and maybe three years and four years down the lane. We are aligned with this objective.
Short-term extra monies never give us permanent solution, therefore profitability would be at the core, I'm telling you, take it from me, we will still grow as long as the product and all other services are aligned, integrated to deliver the core purpose and customer profitability.
Yeah. As far as my business is concerned, there are three distinct segments. Magic, it's more of an ecosystem rather than a pricing, because you need to create a permit ecosystem, you have to create a financing ecosystem. Therefore, discount doesn't come. Second is on the van segment, Winger, where comfort and convenience are more important than the pricing per se. The third thing is a bus segment where there are certain markets or segments, even if you give more discount, people will not take because that's a time-bound application. Reliability and after-sale support. That's why over the last two years, if you have seen, last year also I spoke about it, this year also. We have spent a lot of money on strengthening our after-sale support in ability to Project Vishwas, I mentioned and I spoke about it.
Putting it back on road within two hours, reaching there within two hours, putting it back on road in four hours, this is something that has not been heard in this industry, especially late in the night at 3:00 A.M., 2:00 A.M. That is what is helping us to stabilize the pricing. We are focusing more on not just on product per se or pricing per se, but on the ecosystem. The only one place where pricing plays a role is the tender business that we are in, where L1 gets the maximum share of business. That's where Mr. Girish Wagh mentioned in his initial speech, I built upon it in my presentation. That's where we have to be very careful in taking which one, which profitable tender to take, not run just behind the volume just for sake of market share.
That balance is something that we have achieved over the last two years.
Pramod, I will add one thing. This is in continuation to what I mentioned to Amin. In these three years, I spoke about mindset change, and probably I ended up giving a message that the mindset change has happened only on the front end. That's not true. The engineering team is sitting here, the operations head is sitting here, purchase head is sitting here. Today, realization is not only his goal or it is not Anand's goal. Pinaki's business is different. Deal to deal, price variation doesn't happen so much. It's more like cars.
Here, say Aniruddha, he will ask Rajesh, for example, "What do you want from me to help you gain realization?" Vishal will ask him, "Is there any quality issue that I need to support you or Somajit who is our service head there?" The whole team, right up to the end in the organization, mindset has changed. Right. Improving realization through product improvement, through value enhancement, has become a part of the DNA. Internally in the organization, if a customer complains, we have a target of 90 days, that in 90 days that complaint has to be resolved fully, not for that customer. That customer, you can change the gearbox and solve the issue there. In 90 days, full resolution of the issue is the target, and these guys get paid on that. Right. It is part of their target.
I would say the whole organization's mindset has been aligned to this way of thinking, which is why these guys on the front end now have more confidence while talking to the customer, and it doesn't therefore become their goal alone. I think that's one change. Just carrying forward mindset change, not only on front end, but the whole ecosystem.
Okay.
Just on a lighter note, Pramod, they normally say it takes three weeks for anything to become a habit. We've been on this journey for more than three years now, and the other side of habit is habits die hard. Once it's become a habit, doesn't go so easily. Just on a lighter vein. Thank you. See, I must add that, see, it is very easy to speak here all this. It is so very difficult when you sit in front of the customer. These guys keep on it, keep at it, keep communicating the value. It's difficult, but that's how I think the journey is on. I told you, there are difficult moments. You increase the price and there is a challenge
You have to be at it, otherwise, you see we took 1% on 1st January, 2% on 1st April, even now we have to take because the commodity increases are massive. I know there is a question which is going to come on that, commodity increases are really massive.
Okay.
Sneha?
Yeah, I think Okay.
Sneha.
I think this is probably the last question that we might be taking.
No, fine. Let's take.
Okay.
We have sufficient time.
Yeah.
Yeah.
Sonal from HSBC. Go ahead, Sonal.
Yeah. Hi, thanks. This is Sonal Gupta from HSBC Asset Management. I think we've done extremely well. A lot of hard work has gone into improving the performance over the last four, five years, and now we've become an independent company also, so we have a lot of financial flexibility. I just want to understand, in terms of as a CEO, when you look at the next five years, how do you see this business shaping up and how do we accelerate the growth beyond the overall industry? We're on a very strong footing, gaining market share across a lot of segments. Just in terms of your goals or your vision, I know you may not be able to put a lot of numbers given that we've not shared anything, but just how do you see mix of business changing in the next five years?
I think it's a very good question, first of all. I would take reference of one slide in my presentation, which would have 100% appeared to be verbose for all of you, which was the three pillar strategy, and that's very clear in my mind. The first pillar there was about strengthening the core. For strengthening that core, financial fitness remains at the core of that business. Right? Therefore, how do we improve in his business, Anand's business, Pinaki's business. Right? In the past, when it was a volume-led business, a good part of our mind space will actually go on that. With the financial fitness in place and having some comfort on that fitness, I think I am able to spend good amount of time or more time on the second pillar and third pillar.
The second pillar was growing the downstream business. Downstream digital. Four years back, this was not even part of our presentation. Today, it is there in the part of the presentation. Yesterday also, we spent good amount of time to show the physical assets. What are those parts? What is multi-branding there? What are the gen sets and so on and so forth. I think it is therefore I'm able to spend personally good time because you asked this question specifically for me. You can appreciate that if I am spending time, then the people who are supposed to spend time will also do so. Comes the third one, which is the global growth.
I'm also able to spend more time on that, and I think when we meet again next year, the amount of time being spent there is going to be even more because hopefully the Iveco acquisition would have been completed by then. I think in a nutshell, therefore, the three pillars are very clear. Don't mix them, and more importantly, the time being spent has to be very clear between one, two, and three. I would therefore also say that for one, suppose revenue share growth is the key vector, and I'm here necessarily saying not market share, but revenue share. I know the measurement is not so clear, but internally, we track revenue share. On first it is about revenue share growth. Second is growing the existing engines. Second, can you create any new engine because there's so many adjacencies?
Third is, of course, right now, Iveco and the current International Business. Ramanan also, I keep spending time because we know we have to face you after some time, where are you going to deploy the cash, for example. I think we do end up spending time there also. That in nutshell is the answer. I know the slide appears a bit verbose, but the thought process behind that slide is actually this. I hope it gives you some sense of what's going on in our minds.
Okay. Can we have the mic here, please?
I think Pramod, Raghu.
Yeah
Rakesh.
Rakesh. Rakesh, BNP.
Hey. Hi. Thanks for taking my question. This is Kumar Rakesh from BNP. Girish, between yesterday and today, I think if I have to summarize what we understood is that you are trying to own lot of tech stack Both at the front end and the back end. At the front end, Fleet Edge, customer center, e-Dukaan, and on the back end, e-axle, fuel cell, even ADAS. There's a lot of work which is happening across front end and back end. Among those, all the things which are happening parallelly, and there's a lot, which are the two, three things which excites you the most to have the most business impact in the coming year or two? In the last year or so, we have seen the tonnage increase had quite remarkable impact in the last few months, MY26 fuel efficiency also had.
Something similar to that, what is the top two, three on your mind which you are most excited about? My first question.
Okay. See, I think the areas where we are spending CapEx or money, allocating CapEx is of course technology and digital plus AI. All this, we are trying to align it with two things. First is how can we improve the customer value? Or address customer pain points. And whether it is Swami in his business or it is the engineering team supporting Rajesh, Anand, Pinaki, it is about what customer pain points we can address and how we can create more customer value. Good amount of spend. For example, any program which comes for our approval internally, first we see the customer's business case, and then we see our business case.
There have been many cases where we have a good business case, but the customer doesn't have a business case, which means our business case is a castle in the air, we just reject it. I think all the money which is going therefore towards solving the customer problems, customer pain points, and increasing customer value is something which really excites me personally. The second is, I would say that industrial productivity is also important. You would have seen yesterday the kind of work which has been done on Industry 4.0, and it focuses not only on productivity, which is of course a very important attribute, but also safety, quality, delivery. I think Vishal has a clear view of which vehicle will reach which dealership by when. Which has helped us to take out a lot of working capital.
We have been solving these two problems. Initially, I must tell you, I was a bit skeptical on spending too much of money only on efficiency improvement, I ensured that lot of digital and AI focus was only on solving customer problems or customer pain points. That has helped. I must compliment Vishal on his own, he has actually done a lot of work on Industry 4.0, which is actually delivering business benefits, and Ramanan is also happy with it. Ramanan is always ready to sign checks for Vishal. That's what I would very briefly answer your question. I know Swami will give you a lot of nuances on that, but from a business perspective, this is what I think excites me.
Thanks, second question on the market share target, 40%, you are still holding onto that. What do you think would be the building block from currently where you are 35.7% odd market share to 40% market share? What takes you to that?
See, I think we are currently running at around 37% this year. This means around 3% growth, and which means when SCV pickup by volume is around 55% salience, you have to get 3% from there. That we believe is something which is possible with what we are doing. We need to get market share growth in buses and vans, which I said we are quite bullish. I think we should get there also. In Rajesh's portfolio, there is a good upside on the ILMCV, where we showed you some of the new aggregates and new technologies yesterday, which will help us to grow there by maintaining pricing discipline. Somebody asked me during the break, even in ILMCV, I think the price war is even more cutthroat, but maintaining pricing discipline, we should get back there.
In trucks, we will play the most stable game, if I may say so, because revenue salience, profit salience is pretty high, and he will continue to play that game. Considering all this, I think 40% is a good target and good aspiration to have, which we will continue to do. I must tell you that our internal target is to actually have higher revenue share. 40% is a volume share. Revenue share will be higher as we go ahead.
Thank you. Maybe one last question.
Pramod here. We are ready to take all the questions, it will eat into your lunchtime because I can't eat into Shailesh's time. I'm absolutely fine.
Hi, thanks for the opportunity. As a leader in CV, wanted to get your thought on government policy action. One which is favorable, which is basically the way that Delhi has showed a roadmap for scrappage. Wanted to get your take on the policy itself first, do you think it's replicable by other metropolitan cities where the problem is more about pollution? That's on the first. Second is in terms of the regulation on safety, which are going to hit next year. What is the cost implications, one. Second, how are you trying to offer a value proposition so that because for the customer it's much more painful than even the emission. What is the value proposition you as a leader are trying to offer there?
On the first one, I must add that I think the engagement with the government has been very positive, and I haven't seen an instance of any regulation being pushed through without discussion with the industry. Very positive, whether it is MoRTH, whether it is MHI, it is MoPNG, and therefore very positive discussions. I think there is a good progressive manner in which the regulatory roadmap is being laid out. I must also add that as industry representative, all of us also understand the importance of some of the regulations and how we should bring it, whether it is emission norms. The next one is BS VII or the FE norms, the fuel efficiency norms, which are to come in. Therefore, we have also been giving palatable suggestions, if I may say so.
I think the engagement with the government has been very positive on all the regulatory interventions. The government has been really very positive and pushy on the entire electrification journey. We see in Europe, for example, there is hardly any incentive, but here you have demand side, supply side, and the government, beyond that, keeps on asking. I've been asked so many times that, "You're the leader, but why are you not selling electric trucks?" Trucks is essentially big ones. We sell a lot of electric SCVs. We have been telling them that we don't want to bring something which creates news that there is an electric truck which is being sold. We want to give an ecosystem solution the way we did it in buses, which is what he's doing now.
Therefore, he also spoke in his presentation the kind of order book he's having, order pipeline he's having. That's on the incentive piece. Your second question, Pramod, just, sorry, remind me again.
Safety norms.
Safety norms. Yes, ADAS norms are coming next year. I think it is going to lead to a cost impact. If you ask me frankly, what I'm worried right now is not so much about the cost impact, but what value we are going to add to the customer. As I see, the possibility of adding value to the customer is by improving safety, which in turn should reduce the turnaround time. Just imagine that you have a higher power-to-weight ratio truck, your actual speed on the road will be determined not only by the vehicle capability, but what's happening around you. If your vehicle is made capable to handle the noise on the road better, noise I don't mean in terms of hum, but general, then you can actually reduce the turnaround time.
Whether it is ABS, for example, lane departure warning, I think these things will certainly lead to reduction in accidents, will lead to improvement in road safety, but we are also looking at it, how it can help to reduce the turnaround time. One trip more in a given time for a tipper in a day, for a cargo vehicle in a month, makes a huge difference on profitability. See, when the asset price is going up, the revenue or the turnover becomes important. How many times you are able to turn over the asset. I think I'm personally looking at this ADAS to improve therefore the revenue for the customer. I think that's the area where the team is working on.
In terms of meeting regulation, see, as you know, we already have a level 2+ ADAS truck, which already meets not just the current regulations, but also going beyond that. Meeting regulations is not a concern. It is more about giving value to the customer.
Yeah. Okay.
There were a few, one or two hands.
Yeah.
Yeah. Raghu, right?
Maybe that's the last one that we'll take.
Sneha's BP has gone up because the counter is zero for a long time. The time is over.
Thank you, sir. Raghu from Nuvama. Thanks for the session yesterday and today. Gives us lot of insight on all the work on the capability side you've been doing. Couple of quick questions. Firstly, on electrification, for instance, Ace Electric, you have already sold 18,000 units. Now that the electrification is happening across CVs, both HCV, LCV, buses, how is the profitability in electric vehicles? Are we getting PLI? Would EBITDA per unit be equal to that of ICE? That is the first question. Second is, Ramanan, sir, if you can talk about commodity, the price hike, cost savings. Post the July hike, how would the under-recoveries be?
On the first one, you want to go, Pinaki?
I can.
Please go ahead.
For SCV, I can.
Yeah.
See, there are two parts. You said SCV, 17,000, 18,000 vehicles we have already sold. On profitability, the only thing that I can say is that, yes, we are getting PLI. Second, with PLI, the margin structure is better than the average. Okay? For rest of the pieces
Sorry. Yeah. Raghu, see, let me tell you like this. We don't introduce a product without PLI. That is the first thing. Actually, the PLI criteria calls for you have to first bill one vehicle to the customer, then the PLI process starts. Actually, the PLI process has become very tough now. It's a long drawn process, but we are going through it. We don't sell a vehicle without PLI. Frankly, if you ask me, I'm happy to sell electric vehicles. That's how, in a nutshell, I will answer your question. On the second one, Ramanan, over to you.
Raghu, I think the commodity headwind is pretty strong. Our approach has been we've been very calibrated in terms of the price hike that we are taking. Unlike in the past where we had passed on fully, we've been very calibrated because the idea is not to shrink the demand. At the same time, also work within to see how do we optimize cost, and some of the pieces that we spoke about, better realization. I think these are additional challenges that each of the functions kind of picked that up to run to see how well can we mitigate. It will be a challenge. We will see, but our attempt, as I shared, that through the cycle, maintaining a double-digit EBITDA is where we will be. In terms when there's an upcycle, obviously we'll be back in teens.
Thank you, sir.
Yeah.
Okay. Yeah. Thank you very much for joining us. Please join us for lunch outside. Those of you who registered for the PV Investor Day, kindly be back by 1:50 P.M. Thank you.
Thank you very much.