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Edited Transcript of BAJAJ-AUTO.NSE earnings conference call or presentation 30-Jan-20 10:30am GMT

Q3 2020 Bajaj Auto Ltd Earnings Call

Pune Feb 5, 2020 (Thomson StreetEvents) -- Edited Transcript of Bajaj Auto Ltd earnings conference call or presentation Thursday, January 30, 2020 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Rakesh Sharma

Bajaj Auto Limited - Chief Commercial Officer & Executive Director

* Soumen Ray

Bajaj Auto Limited - CFO & President of Finance

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Conference Call Participants

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* Aditya Jhawar

Investec Bank plc, Research Division - Analyst

* Aditya S. Makharia

HDFC Securities Limited, Research Division - Analyst

* Ashutosh Tiwari

Equirus Securities Private Limited, Research Division - Research Analyst

* Chirag Shah

Edelweiss Securities Ltd., Research Division - Research Analyst

* Gunjan Prithyani

JP Morgan Chase & Co, Research Division - Analyst

* Jinesh K. Gandhi

Motilal Oswal Securities Limited, Research Division - SVP of Equity Research

* Joseph George

IIFL Research - Assistant VP

* Nishit Jalan

Axis Capital Limited, Research Division - Executive Director of Auto

* Pramod Kumar

Goldman Sachs Group Inc., Research Division - Executive Director

* Priya Ranjan

Antique Stockbroking Ltd., Research Division - Research Analyst

* Raghunandhan N. L.

Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst

* Shyam Sundar Sriram

Sundaram Asset Management Company Ltd. - Research Analyst

* Sonal Gupta

UBS Investment Bank, Research Division - Director and Research Analyst

* Suraj Chheda

IIFL Research - Research Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, good day. And welcome to Q3 FY '20 Earnings Conference Call of Bajaj Auto Limited hosted by HDFC Securities Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Aditya Makharia from HDFC Securities. Thank you, and over to you, sir.

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Aditya S. Makharia, HDFC Securities Limited, Research Division - Analyst [2]

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Thank you, Nirav. Good afternoon, everyone. I would like to welcome the management and thank them for giving us this opportunity. We have with us today Mr. Rakesh Sharma, Executive Director; Mr. Soumen Ray, Chief Financial Officer; Mr. Sanjeev Garg, Divisional Manager, Treasury, IR and FP&A; and Mr. Anand Newar, Divisional Manager, Investor Relations.

As usual, we'll directly start with the Q&A session. Nirav, can you please take it forward from here?

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Ashutosh Tiwari from Equirus.

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Ashutosh Tiwari, Equirus Securities Private Limited, Research Division - Research Analyst [2]

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Congrats on a good set of numbers. Firstly, I want to understand that we have launched the new CT and Platina BS VI models with e-car technology. But if you look at the price increase, it's almost like INR 7,000. So I think the technology was supposed to be cost lesser. Is it that be-- probably want to move high in the margin in that segment? Or what's the focus for this? I want to understand that part.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [3]

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Okay. Let me take that. Thanks for the compliments. Foremost, I want to just dispel this point, once and for all, about this e-car technology. Now this is a label which has been given -- I don't know where it has come from, it is probably being given by the media or by the analysts. And there is no standard thing called e-car, okay? So let me first start by clarifying that point. What we have viewed is something which has been developed internally. And it is an alternative to fuel injection. It is what we -- we call it an electronic injection system. Just like in a fuel injection system, the system manages injection of fuel and optimizes it. In this case, the system injects air and optimizes it based on multiple sensors, which are placed around the engine and the exhaust so that the best result can be obtained, both from the point of view of meeting the initial spend and the mileage and performance. So it is something in-house, it is not e-car, and it is not fuel injection. The quarterly increases which you are seeing obviously pertain to -- partly to this system. And in some models, you will see that these also pertain to some -- we have taken the opportunity to improve the product here and there. Obviously, we don't want to lower down too much of cost because already, there is a good slug of costs which is going in, but we don't want to increase the costs too much. So a little bit of smart featuring here and there, which we have done. So the overall package of the electronic injection system and these few improvements is what has resulted in the price increase which we have -- which you are seeing.

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Ashutosh Tiwari, Equirus Securities Private Limited, Research Division - Research Analyst [4]

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But this pricing that we have done, will it be a better margin product than earlier BS IV product?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [5]

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Well, I think as Rakesh mentioned, there are multiple cost, which has gone up. One is obviously the BS VI compliance cost, and there are other small things which has been put in. At this point in time, I would not be able to say you specifically by model, but generically, mathematically, if I am not recovering including margin, then margin will dilute.

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Ashutosh Tiwari, Equirus Securities Private Limited, Research Division - Research Analyst [6]

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Okay. Secondly, on the other expense part, it has come down significantly on a quarter-on-quarter basis. So is there a one-off or just a normal cost?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [7]

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So there is no one-off. It is just that the other expenses is lower because some of the advertising expenditures, depending on what kind of expenditure it is, gets locked up from top line or gets reported as cost under the index. So anything which is in the form of a consumer scheme is locked up from the top line.

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Ashutosh Tiwari, Equirus Securities Private Limited, Research Division - Research Analyst [8]

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And comparing Q2 to Q3?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [9]

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Irrespective of whatever you compare. The point is that if I'm running more of consumer schemes, then it will be a lockup from the top line as opposed to showing it as cost. However, it has been a mode of advertisement, then it will cover its costs. They've done more of schemes. We just let to unlocking up from the top line.

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Operator [10]

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The next question is from the line of Raghunandhan from Emkay Global.

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Raghunandhan N. L., Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [11]

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Sir, firstly on the MEIS scheme is expected to be retained till April '20 when new foreign trade policy comes into effect. What are your thoughts on whether there will be a risk to withdrawal of incentives?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [12]

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There is a way by which Indian export is competitive. The government is already speaking of what complicated ROPDP and all that. Second really, we have a healthy margin in exports. And if the MEIS is withdrawn, we believe that over a period of time, we have enough pricing power to correct that should we need to.

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Raghunandhan N. L., Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [13]

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Understood, sir. And sir, any update on restarting 3-wheeler exports to Egypt? And how would be the quantum?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [14]

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So the last exports to Egypt were in April last year. And we have actually commenced exports to Egypt from January. And we have -- I think it's between 3,000 to 4,000.

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Raghunandhan N. L., Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [15]

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That's actually very good to hear. And lastly, congratulations on a good set of margin performance. Can you give like a breakup between how the benefit of commodity, currency mix would have played out in the margin improvement?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [16]

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So I think Rakesh gave a very nice explanation in the CNBC interview. I would just repeat it. 1/3 from forex, 1/3 from commodity, and 2/3 from commodity and mix. And when I say mix, I mean the mix between various business verticals and also the fact that we have been continuously innovating within a brand segment. And innovations generally is margin accretive to that brand. To give you a sense, the CT 110 margin is better than CT 100. And within that, our ES is better than KS, and our CT 110 H is better than CT 110. So the innovation is picking in, thereby improving the brand mix. The mix between various businesses and commodity cost is about 2/3 of the benefit and 1/3 is forex.

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Raghunandhan N. L., Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [17]

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Lastly, can you share spare parts revenue and 2-wheeler dealer inventory end of December?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [18]

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Of course. I knew this was going to come. So now it is like [careers]. So the spare parts revenue this quarter is about, just hold on for a sec, about INR 260 crores, INR 270 crores. One thing, one second. INR 400 crores plus INR 180 crores. My bad, my bad. So INR 400 crores, INR 115 crores plus INR 200 crores, about INR 700 crores.

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Raghunandhan N. L., Emkay Global Financial Services Ltd., Research Division - Senior Research Analyst [19]

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INR 700 crores. Got it. So sir, on the dealer inventory?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [20]

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So that's about a little around 4 weeks -- around 5 weeks.

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Operator [21]

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(Operator Instructions) The next question is from the line of Aditya Jhawar from Investec.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [22]

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Congrats on a great set of numbers. A couple of questions. One is that what -- if you can share the outlook for export for the next year and throw some light on individual geographies.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [23]

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Aditya, the output -- outlook for exports remains steady at least going into the next couple of quarters or 3 quarters. If you see that the last 2, 3 quarters have been quite rocksteady. And we expect the same thing going forward. You know that Latin America as a region -- we are not in Brazil, but outside of Brazil, Latin America is a region which is a little bit underperforming. The economies are underperforming. So the reason is -- sort of the motorcycle market in the region is declining gently. We are a bit ahead. So we're gaining margin and market share. The real driver for growth is Africa, particularly Nigeria and East Africa. These regions are powering the growth of Africa and actually for the entire international business. Egypt, as part of Africa also, the motorcycle business is doing pretty well. In the Asian side, which is South Asia and ASEAN, it's a mixed bag. We've got places like Bangladesh and Philippines, particularly Philippines doing exceedingly well. Philippines is really a bright star and has been doing exceedingly well. We've got a great position over there. Bangladesh also has become a very large market, but it has had some self -- I mean, it has had some regulatory intervention because of which the market had taken a little bit of a dive, but as the dust is settling, we expect Bangladesh market also to come back. And we've got another great position there. Nepal and Sri Lanka are a little bit down. So that's the sort of spread. Unless there is a major geopolitical disturbance in the Middle East, which then has a major ripple effect, as you can imagine, or some big event like U.S.-China trade talks collapsing and having a -- leading to a very big currency issue, currency rushing -- I mean people rushing to the dollar, which then have a lot of problem for the emerging-market currencies. Unless there are these big things, I think the outlook is fairly steady. More of what we have seen in the recent past is what's going to unfold in the future.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [24]

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That was quite helpful, Rakesh. And now one -- the second question is, what is our plan of addressing the executive that is a commuter 125 segment going into next year?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [25]

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We have -- that's a very, very important segment for us because after the imposition of the ABS lead costs, the prices have gone up in the 150cc segment. And we are seeing the 125cc segment responding -- I mean performance much better than the other segment. As you know, we had introduced -- we had extended the brand Pulsar and introduced the 125cc middle of last year. And even though we had introduced only one variant at that time, it has done exceedingly well. And in the short period of time, we have garnered about 13%, 14% market share. A lot of it has come from competition. There is a little bit of down trading, but there's also a lot of -- we are finding a migration also from scooters over there. So our approach is going to be to expand the portfolio of the Pulsar 125, and through that, to capture a bigger share of the 125cc segment.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [26]

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Just last one clarification. The press release talks about a growth of 37% in Latin America. And so the commentary -- your commentary seems a little bit more subdued, Latin America.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [27]

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You go ahead.

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [28]

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So in Latin America, the number of 37% is absolutely right. Last year was a very soft thing. Last year was very soft, especially Argentina, which was declining. So well, because of the base effect, you have got some serious growth in Argentina. Also, the Central America has been kicking very well.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [29]

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So just one point I would like to get, there's also -- my comment was not quarter specific. My comment was more on an annual basis. On an annual basis, we are seeing that the Latin American markets are underperforming, and we are slightly overperforming, but not to this extent. So I would say that the 37% is because of a quarter anomaly. I was giving more of an annualized explanation.

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Operator [30]

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Next question is from the line of Pramod Kumar from Goldman Sachs.

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Pramod Kumar, Goldman Sachs Group Inc., Research Division - Executive Director [31]

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My first question, Rakesh, pertains to the BS IV ramp down and the BS VI ramp up because if I'm not wrong, you haven't had any meaningful dispatches of BS VI vehicles in the market yet. So if you can just help us understand and then practically, what is left of this January, and February, and March. How do you see your ramp-up on BS VI versus BS IV, sir?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [32]

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Thanks, first of all. But our approach going into this transition phase was that we are not going to time the market. We are going to be supply chain led. We are going to ensure that we navigate this transition without our channel getting bruised and for us to make sure that the good products come in. And we are very well prepared to enter April with BS VI. Having said that, we are absolutely on track. It's going as per plan. In the next week or so, you will see the entire production almost shifting to BS VI. So multiple -- we have to look at not just motorcycle, Bajaj motorcycles, but there is the KTM SKUs, and there is the 3-wheelers, et cetera. So you will -- we will buy middle of Feb, a complete -- the entire transition to BS VI. And as we speak, BS VI dispatches have already started. And early Feb. also -- by first week of Feb. also, the motorcycles and the KTM transition will be complete. By middle in Feb, the 3-wheeler transition will be complete. We have consciously managed our stocks of BS IV downwards with the objective of ensuring that we are free of BS IV stock by first week of March. And I think we are on track, particularly if we witness some prebuying, I think we will be able to see that we'll be finishing off this talk by early March. We are, in fact -- this is a complex issue because I'm giving you average numbers. There are pockets where you're a little bit overstocked, and there are pockets where you're understocked. And we are already finding that for some of our SKUs, we are already stocked out when it comes to BS IV. So we have had to do a little bit of a top-up production of -- we will have to do a little bit of a top-up production of BS IV, but very, very little in first half Feb. And we don't want to stock out situation. That's why we are doing it. We are very, very clear that we are not pumping in BS IV. We are not wanting to do unnatural things to advance the people by luring them beyond whatever the arbitrage is and putting in more discounts on that. So given that strategy, we are fairly on track.

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Pramod Kumar, Goldman Sachs Group Inc., Research Division - Executive Director [33]

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And given this, I think -- so you effectively are saying that you don't expect any meaningful clearance discounts or anything like that on your domestic operations going into March, April?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [34]

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Yes, not at all. See, discounting has already started. If you see, lots of discounts have been announced, that's what I'm saying, over and above the arbitrage, which is there. But if you see our advertising, we are advertising the product. We are saying that CT 100 is [Foreign Language], and we are saying that the Platina is Foreign Language . And that is our key theme, which is very different from some of -- most of the industry, which is putting the price in the headlines. Our headline is about the brand. And definitely, we want to be in a position that by early March, we have cleared our BS IV so there is no need for us to go into panic discounting during March. That was the whole strategic objective. We said we want -- number one, we want to make a very good product transition. The products have to be tested, validated. Number two, we don't want to damage the channel. Number three, we don't want to discount be it for in a panic way. And number four, we want to ensure that we have opened with the right amount of stocking of BS VI to face April and May. As you know, in some parts of the country, there is a mini season at that time.

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Pramod Kumar, Goldman Sachs Group Inc., Research Division - Executive Director [35]

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So a final question to Soumen on the margin front. Sir, your margins have like come back to a 6-quarter high, which is a great performance. So -- but if you can just provide some context on the margins going forward in terms of -- what, according to you, are the favorable tailwinds or what you see as perceived as headwinds for the company and for the industry as well, that would be really great.

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [36]

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First, I'll be a little cheesy and say, you are slightly wrong. It is not 6-quarter high, it's the 7-quarter highest. But having made that point, let me move over to the question. So this is the highest in the last 7 quarters in terms of EBITDA margin. See, I have always told in such calls that my margin is as the penny falls. So I will not stop selling low-margin products if my high-margin product selling in Latin America is taking up BTL, or if Pulsar sales in India comes down, I will not stop selling CT. My sense, the headwinds that we will face in margin is between the business mix. The worst situation amongst all my segments is domestic motorcycle. As the domestic motorcycle starts to recover and the mix, they become a larger percentage of my overall portfolio, so that will be a headwind. I think commodity will become an headwind. We will see some increase in prices in Q4 itself. And I was recently being told that the global metals are having a very, very strong run. With catalytic converters being the norm of the deal, we will have some costs. So to me, the big issue that can be a headwind is the mix changing and the input material costs, primarily noble metals and steel and aluminum. Aluminum, someday we'll have to turn that because otherwise aluminum manufacturing companies will have a problem. In terms of tailwinds, I think we have got the innovations right. And I hope that the way we will price our products, we will be able to grow faster than the market, which will help me leverage on my fixed costs and, thereby, delivering a better margin.

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Operator [37]

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Next question is from the line of Jinesh Gandhi from Motilal Oswal.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [38]

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First, a couple of clarifications. First is, what is the export revenue for the quarter?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [39]

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So I really don't remember whether we give it out or not, but I will give you a rough number which should help you. So we are in the range of about INR 3,300 crores.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [40]

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Okay. We do share in quarters -- on the call. Secondly...

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [41]

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Before you go ahead, I gave a number which was wrong. I just need to correct it. The spares number that I said was INR 700 crore. I missed a digit. It is INR 770 crores. Go ahead.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [42]

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Okay. Secondly, with respect to third quarter FY '19 restatement, which has happened in other income and EBITDA, what is that restatement? What is the nature of that restatement?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [43]

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So we have done a restatement from first quarter of this year itself. This is not something which has happened in this quarter. There was a difference between how we saw certain expenditure and how you guys saw those expenditures. So now we don't have that other income, which needs to be reconciled. Everything which pertains to business has been included in income, and everything which does not pertain to business has been taken out. So now the way we declare our EBITDA and the way you calculate your EBITDA, the difference is only CSR.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [44]

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Understood. Right. Second question pertains to the financing side of the equation. Bajaj Finance has indicated that they are going to go slow on tooler financing, given the increasing NPAs. Any thoughts on that, whether that could be deterrent in the short term? And secondly, do we need to do any subvention if NPAs go up?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [45]

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No. So I'm at a loss why -- so I can tell you what my situation is. I do -- 60% of my 2-wheelers are financed, of which 80% is with Bajaj Finance. And we are not seeing any huge creeping up of NPAs at Bajaj Finance's level. So I don't think this is particularly applicable to any OEM who has their own financing now. We at Bajaj have a full-fledged financing operations. But the other OEMs also, some of them have their financing as well. So this is more of a market sentiment that things are bad and so on and so forth. We are not facing any problem in terms of financing.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [46]

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Okay. But in case the NPAs go up, do we need to sub-vent Bajaj Finance or that's not...

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [47]

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So subvention, if there is a decision which is being taken at the behest of Bajaj Auto to do a certain thing, well, the return to Bajaj Finance is lower than what is expected. NPAs, unless I am telling him, please give the loan to Mr. Jinesh Gandhi and Mr. Jinesh Gandhi goes bankrupt, I'm not responsible. They have their own credit evaluation model.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [48]

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Okay. So no material subvention on the...

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [49]

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We do not have any commitment of NPA norms. The credit evaluation is purely a vehicle score competency and they give loans based on that.

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Jinesh K. Gandhi, Motilal Oswal Securities Limited, Research Division - SVP of Equity Research [50]

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Sure. And last question on realization. If I look at this quarter versus second quarter, there has been a material decline. So is it just that the mix impact or there is anything else there?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [51]

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There's nothing in it. It's just a mix impact.

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Operator [52]

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Next question is from the line of Chirag Shah from Edelweiss.

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Chirag Shah, Edelweiss Securities Ltd., Research Division - Research Analyst [53]

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My first question is just a clarification on the initial comment that Rakesh shared on this FI technology. I'm still unable to understand. So it is not a fuel injection but it is an injection system. So how does it differ? What is the key difference? Because if it's an injection system, it should be -- in a sense, it's a fuel injection system only in that sense. So what is the key difference between the 2 technologies? Is that one that you have internally developed and what is generally available in the market in the fuel injection? Or we also have fuel injection in Pulsar, right? In India, even BS IV Pulsar, we do offer fuel injection system as -- in one of the variant.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [54]

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Of course. So we obviously have fuel injection. We're not just Pulsar, we are putting fuel injection in KTMs. And we actually moved on to fuel injection because of export requirements many, many quarters ago. So obviously, fuel injection is there. We innovated for the electronic injection system for the lighter bikes because we felt for the lighter bikes, it was not required given the kind of RPM load they have. It was not required to have a fuel pump. A fuel pump means it needs more electricity. It needs a higher magneto. And obviously, a fuel pump is more sensitive. So just like a fuel pump, injects fuel. The electronic injection system injects it. Its primary controller is air rather than fuel. That in simple terms is one of the key difference between this system and the fuel injection system. But -- and then, of course, the mixture is managed through inputs, which you get from multiple sensors all across the powertrain and feed from that optimizes it. The optimization is done through management of air rather than management of fuel, which works very well in lower-performance bikes. And we felt that this way we could eliminate the more expensive and more demanding fuel injection system. And not only that, we felt that with the tendency in the market of having a particularly commuter bikes being repaired, almost 50%, 60% of the people go to roadside mechanics. It's not very easy to repair or service fuel injection system. We felt the added advantage resides -- or the ones, which I've described, would be the easier serviceability of the electronic injection system. So that is the main -- that's the sort of difference.

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Chirag Shah, Edelweiss Securities Ltd., Research Division - Research Analyst [55]

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Yes. And a related question on this is that what was the thought process of introducing ABS in these lighter bikes along with BS VI? Do you think customer is really looking for this kind of upgraded technology in the entry-level bikes? Is that kind of feedback that you've got from your internal discussions?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [56]

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We have not introduced ABS in the lighter bikes. I mean ABS has been mandated for 150cc plus. And 150cc-plus bikes have ABS.

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Chirag Shah, Edelweiss Securities Ltd., Research Division - Research Analyst [57]

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Okay. Sir, I read you have introduced a disc brake, sorry?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [58]

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Yes, correct. Of course, I think overall, we are definitely picking up from the market that adds -- the road penetration is improving as the speeds are increasing. We are finding that safety is definitely becoming a higher concern. Earlier, the market was very unidimensional in the commuter bike. It was all about mileage. We have now found comfort. It's starting to occupy the #2, #3 type of a place. And along with that, safety is becoming an important factor. And that's why we felt disc brake provides a much better breaking performance, and we have introduced it.

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Chirag Shah, Edelweiss Securities Ltd., Research Division - Research Analyst [59]

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And one last thing on 125cc Pulsar. Is there a thought process as you introduced more variant to have a differential in marketing? Because today, when we check, we don't get a differentiated marketing from the dealer. You only mentioned if you want to buy a cheaper version, buy 125cc Pulsar. Is that the way you want to look at 125cc Pulsar? Or is there a different way of positioning that product?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [60]

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Yes. That is very deliberate. It is -- we are managing the brand Pulsar. The center of gravity of the brand Pulsar is in the 150-plus zone. And then it extends up to 220 and downwards, up to 125. So right across the range, we want the essence of Pulsar in terms of its performance, features, styling to be same. So we are not differentiating between a 125cc and a 220cc and everything in between, from a marketing point of view. That's why you see a common marketing. And these are options available, not just from a point of view of cheaper Pulsar, but also from the point of view of a more manageable Pulsar. There are people, like, for example, you've seen in the Duke range. The Duke 125 retains all the brand essence of KTM Duke. But by making at 125, it becomes more accessible to people, not just because it's cheaper, but because it's more handleable. And that's the same phenomena, which is there for the Pulsar 125 also. More handleable. And sometimes, people want a better balance between performance and mileage, which a 125cc is obviously able to provide.

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Chirag Shah, Edelweiss Securities Ltd., Research Division - Research Analyst [61]

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Just a clarification for...

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Operator [62]

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Sir, sorry to cut you. I'll have to ask you to come back in the question queue. (Operator Instructions)

Next question is from the line of Gunjan Prithyani from JPMorgan Chase.

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Gunjan Prithyani, JP Morgan Chase & Co, Research Division - Analyst [63]

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Just a follow-up on this electronic injection now is in this, you basically are introducing disc brake plus complying with the BS VI. So the INR 6,500 kind of increase that you've taken, does it cover the cost? Or -- I'm just trying to understand how you've looked at the pricing of the product? Because clearly, disc brake would also mean additional costs to the product.

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [64]

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So Gunjan, Soumen here. I think we should -- I mean I think this was the Q3 results call where we really delivered reasonably decent numbers. That is not getting discussed at all. Coming to your question, yes, we have tried to recover the cost. The specifics, we will be able to tell you a little later. Who is recovering how much of cost is something which we will have to wait and see. There would be economies of scale which will kick in. There could be rates which will come down because of the quantity that I buy. And then there are a lot of other angles. As of now, we have looked at our cost. We have looked at competition pricing either announced or expected. And this is that -- we feel that this is the right price to take. Any of these things changes, we will change our price.

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Gunjan Prithyani, JP Morgan Chase & Co, Research Division - Analyst [65]

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Okay. Got you. Just on the -- moving to this prebuying which you alluded to earlier in one of the questions. Are there any signs of prebuying you're really seeing in the market because of the price hikes that are being taken on BS VI? And how are you assessing the demand trends, let's say, in the month of Jan. from your channel?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [66]

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The -- we have started to see some early signs of purchase getting advanced. I must say, in the closing days of January, this is fairly recent. Most of January went by without much evidence of prebuying. But in the last 1 week or so, certainly this has picked up. The underlying demand according to us is still in decline mode. If you see November, December, it was minus 12%. It's in the minus 10% to minus 13% range. It continued like that in the first half of Jan. But it is getting mitigated in the second half of Jan. through prebuying. Now what will be the extent of prebuying? For sure it will accelerate, I think, because there's more and more BS VI products and announcements hit the market. People will sort of get sensitized to the play, which is there, and it may induce them to advance their purchase. And by March, things might -- we might see a different type of dynamic also up here, where people closer to the changeover might say that what the hell, why should we just go, might as well stay with the new technology, BS VI and kind of. So it's difficult to know as said that which side -- which type of customer, the deal hunter or the person who likes more surety and force will hold sway. So we'll have to just really track it very, very closely. But having said all that, yes, underlying demand certainly is still in the negative zone.

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Gunjan Prithyani, JP Morgan Chase & Co, Research Division - Analyst [67]

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And then minus 10% to 13% that you mentioned, this -- there is no disconnect between the retails and the wholesales now, right? This is how the underlying demand has been in the month of -- last 3 months essentially?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [68]

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Yes. This is -- my comment was more on the retail side of -- yes, they just picked up. So we will see it coming to almost even like 0 territory in -- when you take January full. But yes, for November, December and, let's say, first 10, 12 days of Jan, it was in that territory, negative territory.

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Gunjan Prithyani, JP Morgan Chase & Co, Research Division - Analyst [69]

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Okay. And just a second question on the electric Chetak launch. Could you just give us some sense on what is the kind of feedback that you've got on the product? How are you approaching this in terms of the volumes that you're looking at it? Or is there more portfolio expansion that should come on the electric side? Just thoughts around this launch.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [70]

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Our strategic objective with the launch of the Chetak is to make a beginning in the electric business. We want to sort of primarily learn and observe because it is not -- it is a category which is still in formation. And we are very, very -- we know that this is going to be a major category, but just nobody knows when and how it's going to happen. It is something very different. So the first thing is to make a play and learn, both the consumer side of things and the technology side of things, commence relationships with vendors. By doing things actually, you commence things and put in the manufacturing apparatus, et cetera, in position. So we are -- our objective is not really to go for -- and it's not a volumetric objective. It is just about creating a beachhead small enclave of electric business, which allows us to have a 360-degree learning. Having said that, the response to Chetak has been absolutely overwhelming. We have just launched it in 2 cities. And actually, for test drives, it is -- we launched it around 15th of -- I mean, it opened for bookings on 15th of January, and since then, we have had a lot of bookings. We've had probably, right now, we're talking 2,000 bookings or so. And which is a little bit more than what we had expected, particularly because we have not provided all dealerships with test drive vehicles, et cetera, as such. This is now happening, and we'll have 17 dealerships now, which will all be providing test drives. So I'm thinking of a steady rate of increase in these bookings. In due course of time -- at this point of time, I cannot say when, but in due course of time, we will certainly expand the Chetak portfolio. We have already got the prototypes in the pipeline.

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Operator [71]

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Next question is from the line of Shyam Sundar Sriram from Sundaram Mutual Fund.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [72]

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Congratulations on the wonderful operating performance. Sir, my question is on the 3-wheeler side. Specifically in the domestic 3-wheelers, in the last couple of quarters, you had alluded that there were some state-specific schemes that gave an impetus to the domestic 3-wheeler demand. Going forward, how are you seeing the outlook on the domestic passenger 3-wheelers? And any comment on the cargo side as well?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [73]

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So certainly, those schemes continue. And they have been one of the main reasons for the diesel segment to -- and the large passenger segment to show growth. And that has actually picked the full 3-wheeler category up. And hopefully, they should continue. And we should see growth in the region of minus 2% to plus 2% according to us. And what was it that you -- yes, you had asked about cargo. I think cargo -- 3-wheeler cargo is perhaps going to be the beneficiary of a lot of cost increase, which is going -- which is occurring in the 4-wheeler cargo space, again, due to BS VI reasons. There have been 1 or 2 discontinuations on light 4-wheeler cargo. And we think that, let's say, April, May, June onwards, this should fall down into 3-wheeler cargo. The border between the 4-wheeler cargo and the 3-wheeler cargo, the 4-wheeler cargo has got to become a lot more expensive because of BS VI. And some of that will fall down into 3-wheeler cargo, which is a good thing for us.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [74]

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All right, sir. So just a follow-up question on that. From a BS VI perspective in the petrol or CNG side for the passenger 3-wheelers, the end price increase maybe of the order of 5% to 6%, is that a reasonable expectation? And the same thing the diesel will be a little bit higher, sir? Any color, any -- if you can quantify anything.

(technical difficulty)

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Operator [75]

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Hello? Participants, please stay connected. The line for the management dropped.

Ladies and gentlemen, thank you for your patience. We have the line from the management back.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [76]

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Sir, I was just asking a follow-up question. As we go transition to BS VI, in the petrol 3-wheeler side, will the cost -- will the end price increase be of the order of 5% to 6%? And how much do you think will be on the diesel side, sir? If you can give any color on that, please?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [77]

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So we are putting these things together. And as I had explained earlier, by middle of Feb is when we will be commencing dispatches, and we'll roll out the prices at that point of time.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [78]

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Okay, sir. One question, sir. In the BS VI models that we have launched so far on the 2-wheeler side, you have given a great -- better value proposition for the customer, not just on -- not just the emission per compliance per se. Given all this, will the gross profit on a per vehicle basis be similar to the BS IV models that currently we are -- there in the system?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [79]

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Can you just repeat that once again? I missed it.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [80]

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Yes, sir. I was saying, we have given a better value proposition for the customer, not just the transition to the emission norms. Given all this, will the gross profit per vehicle for the company be similar to the outgoing BS IV models? Is that a fair assumption?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [81]

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That would be largely the idea.

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Shyam Sundar Sriram, Sundaram Asset Management Company Ltd. - Research Analyst [82]

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Okay. And as we move to the RB norms later on, sir, will this electronic injection system still hold good later after 2 to 3 years?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [83]

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That's too long a call to discuss now. I think whatever we have done is adequate for the current moment. And when those norms get adequately specified and discussed, we will see how best to handle it. As a -- some saying, in our factory at any given point in time, 5 different emission norms are meet. So we have the competence and demonstrated capability of managing tweaks to deliver all initial notes. So we don't see a challenge, whether that be, I will work or we will tweak it a little bit that we will see when the time comes.

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Operator [84]

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Next question is from the line of Sonal Gupta from UBS Securities Limited.

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Sonal Gupta, UBS Investment Bank, Research Division - Director and Research Analyst [85]

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Congrats on a very good performance. Sir, one was just, could you break up the spare part revenue into domestic and export?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [86]

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Yes. Because -- will just give that to you 1 second. So out of that, whatever, INR 770 crores that I told you, exports is about INR 200 crores.

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Sonal Gupta, UBS Investment Bank, Research Division - Director and Research Analyst [87]

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Okay. And my other question was on, like, clearly, the price increases have been very sharp. I mean, like what we are seeing for BS VI, around 14%, 15% on average. So -- and clearly, like you have been vocal on the thing that -- Bajaj Auto has been vocal that this could lead to a significant sort of negative impact on the market growth for next year. So could you just talk about -- I mean, how do you think about -- I mean, like, can increased finance penetration or some of these things offset some of that? Or what is your general thinking on growth for the industry for next year?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [88]

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Well, you see the -- like you said, the prices have increased -- are increasing significantly. If you just rewind a little bit and you see what was the impact when the insurance costs increased by INR 4,000, INR 3,800. What was the impact when we -- at least these performance category bikes cost increased by INR 7,000, INR 8,000 on account of ABS. At all these points of time, we found that demand took a hit. And it took some time, at least 2 or 3 quarters for the customer to digest this and adjust to a new normal. I don't expect anything different. There is no reason for us to expect anything different. So again, the prices are going back up by a similar amount. And therefore, just looking at the past trend, definitely, this will knock demand. Then after there, how long it takes for the customer to get adjusted to the new normal. That also would depend on a little bit of on the economic environment. But certainly, demand will get knocked out for a couple of quarters and then it starts to come in. I don't think that finance can single-handedly mitigate this. Of course, it is helpful. The penetration of finance is definitely enabling and widening the market, but it is not sufficient to mitigate in the short term, these kind of knocks.

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Sonal Gupta, UBS Investment Bank, Research Division - Director and Research Analyst [89]

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Sir, just related to that, I mean, so do you think that the customer -- I mean the other option for the consumer is that he still maintain this price point but downgrades the category of the product he's buying. So could we see a significant down trading instead of hit on volume?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [90]

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I think there is certainly some kind of down trading, particularly those customers who are -- who demonstrate adventurism that, okay, I'm coming to buy a 125cc. What the hell? Why not -- why should I not drive a 150cc? And that kind of adventurism gets stopped because the barrier of entry to the next level has suddenly been raised, definitely that. Having said that, what -- certainly, what consumer behavior we observed is that if there is a meaningful proposition, then customers like to stay with their meaningful propositions once the initial shock is over. So if a guy who have sound reasons wants to buy a 150cc, they will continue to buy a 150cc. If a guy wants to a 125cc, they will continue to buy a 125cc. So some bit of down trading. But I don't think it will cause a major shift. People will take -- demand will come down, a little bit of down trading, and then people will get normal, and we will find a similar type of a structure we'll continue in the industry. It will not shift the structures dramatically according to me.

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Operator [91]

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Next question is from the line of Nishit Jalan from Axis Capital Limited.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [92]

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Congratulations on a very strong set of numbers. My question pertains to 3-wheeler exports. At the start of the call, you highlighted that you have started exporting to Egypt with around 3,000 to 4,000 units. Do you think that in that market size -- in that market are behind, and we should be able to sustain this kind of run rate going ahead because 3-wheeler exports has been one segment, which was struggling while -- primarily because of Egypt, other markets seem to be doing very well. So should we be expecting a good pickup in that segment for you?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [93]

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Yes. I think Egypt's return is good news for us. And we are optimistic about the pickup. There are a couple of geographies, which we are watching very closely, which -- where we, again, have 90% to 100% share almost and which we have created places like Iraq, and to some extent, Cambodia, which is facing financing troubles, et cetera. So Egypt is happening at the right time to mitigate that. Now if those issues do not aggravate, then definitely we will see an uptick. Otherwise, we would say that it'll be a continuation of the same run rate.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [94]

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Okay. Are there any more new markets that you think where you are already selling your bikes and the demand is gradually -- or coming for 3-wheelers? Or you think you can create a demand for 3-wheelers in the next 1 to 2 years?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [95]

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Yes. We have a very active business development program. As we've seen in the last 3 years, we have created 16 new markets for 3-wheelers, which have basically -- which had never seen a 3-wheeler before. It is these 16 markets which includes places like Iraq and Philippines and Cambodia. These are fairly recent and it is these markets which have mitigated huge decline we have faced in 3-wheelers in Sri Lanka. There was a time when we were selling 10,000 3-wheelers per month in Sri Lanka, which is now down to 1,500 to 2,000. We definite -- so we have a very active 3-year horizon business development program. So I would not like to discuss which specific markets are at what stages of business development. It's a bit of a competitively sensitive information for us.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [96]

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Sure. So just one last thing. On the Africa 2-wheeler market, the market is still driven by the taxi segment. And the personal segment has not yet started or picked up in that -- in those countries, right?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [97]

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Yes. You're absolutely right. Almost 95% of the market is taxi.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [98]

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Any sense or anything you're getting that the market will open up for the personal usage as well from the regulatory perspective or from that front?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [99]

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No. Not really because this whole taxi business is so -- I mean it is so deeply penetrated and now also getting organized through the aggregators, both local and international, that it then starts to come in the way of development of the personal segment. But yes, as the purchasing power improves more than the purchasing power as the sort of the SEC ABC classifications, the socioeconomic improvement is there. We cannot rule out the possibility. And if there is a penetration of retail finance, these 2 things can be the catalysts, we can then get to see some personal segment. But it will be a slow burn according to me. The key trigger will be the arrival of proper retail financing at a consumer lens.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [100]

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And just lastly, I wanted to check on your hedging. I would assume you would be largely hedged for the next 3 to 4 quarters. I just wanted to understand what is the band in which -- because you do forward hedges and all of this forward range. So just wanted to understand the band within which you are hedged. What is the flow rate?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [101]

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Sorry, that is too confidential a number. I don't want to give out numbers which are competitively sensitive. But for the question, yes, we are forward hedged, and we follow a range forward policy.

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Nishit Jalan, Axis Capital Limited, Research Division - Executive Director of Auto [102]

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But it is fair to assume that if rupee depreciates further from here, we will get that benefit in the next few quarters as well?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [103]

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Yes. That is reasonably safe to assume.

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Operator [104]

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Next question is from the line of Suraj Chheda from IIFL.

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Joseph George, IIFL Research - Assistant VP [105]

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This is Joseph from IIFL. Congratulations on a great set of numbers. Just a couple of questions. One was, you mentioned that in the third quarter, you've seen a higher proportion of consumer-level promotions, which has been netted out against revenues. I'm guessing it's got to do with the festive season where the kind of promotion would have changed. Now post the festive season or coming into the Jan, Feb, March quarter, have we reverted back to the old mix in terms of consumer promotions versus advertising? Or we are continuing with the same level in terms of mix as it was in 3Q?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [106]

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No, it has been reversed because currently, there is no consumer promotions which are running.

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Suraj Chheda, IIFL Research - Research Analyst [107]

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Okay. Got it. And the second question I had was, when -- you talked about fuel injection versus electronic injection. Is there a plan to introduce electronic injection in the premium segments or there you plan to stick with fuel injection?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [108]

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Sorry, can you just repeat the question? Sorry, I missed that.

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Suraj Chheda, IIFL Research - Research Analyst [109]

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So in the premium segment, do you have plans to introduce electronic injection? Or will you stick with fuel injection?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [110]

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So it's not got to do with premium or nonpremium, it's more from a performance point of view. Wherever -- I mean at a certain level of performance, it becomes imperative for us to go into fuel injection. So we will be -- it will be based on the performance. And you -- both the technologies are available to us, in fact, so we will be using fuel injection for the higher performance bikes, which most of them are like 150cc plus.

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Operator [111]

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The next question is going to be from Priya Ranjan from Antique Stockbroking Limited.

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [112]

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Congrats for great set of numbers. First, on overall export. If I look at export realization, it has dropped around 5%. Whatever numbers you have given in like $426 million with the INR 71.3, -- I mean, USD/INR rate. So quarter-on-quarter, there was a dip of around 5%. Was it primarily because of mix or there was something -- some location you have taken, some price cut, et cetera?

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [113]

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Probably -- can you just repeat your point again?

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [114]

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Yes. So if I have to look at the realization for export, which was down quarter-on-quarter by around 5%. Given your export revenue of around $426 million with a 71.3 USD/INR rate. So if I have to do the math, quarter-on-quarter, the export realization falls by around 5%. So is it primarily due to mix or because of some price pressure...

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [115]

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We have not taken any price corrections anywhere in anything major. It is really mixed between countries and between models.

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [116]

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Okay. And the second question is on the overall consumer behavior, particularly with this kind of price hike, et cetera. What is happening between M1, M2, M3 evolves, I mean -- or even to the -- if I have to take into account the second and 2-wheeler market. So do you see that with this kind of pricing upgrade in BS VI, people or the entry segment customer might induce to move into more of a secondhand vehicle?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [117]

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That's a very big divide. I think certainly, demand will get impacted. But people might sort of think more about postponing purchase. So if I've got a bike for 3 years that I was thinking of replacing it, this will certainly be a factor and impediment. I might just postpone it and may buy one after 4 years. I think we will see more of that phenomena rather than people down trading to a secondhand buy because that'll happen only at a very broader level because that's a very big discontinuity of firsthand bike and the secondhand bike. There are associated things like availability of retail finance for firsthand bikes and nonavailability at retail bikes.

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [118]

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And how do you see -- I mean, with this price gaps between M1, M2 and M3. So -- and if I have to take into account the S1 of the 150cc as well. So do you see that some customer from S1 might move to M3 for quite some time and then M2 might move to M1? I mean, this kind of phenomena you foresee in, say, at least for the next 1, 1.5 years?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [119]

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I think certainly, we have already witnessed the M3 benefiting slightly from the S1 customer movement downwards to M3. If we do nothing, I feel that certainly, in the short term, which is, let's say, a year or so, there will be these kinds of shifts. But ultimately, if we are able to enhance the propositions and strengthen the propositions, we should be able to mitigate these kind of movements. And that is what is reflected in our product strategy. Not due to innovation, which puts it out of the affordability zone, but affordable innovation, strengthen the proposition. So as to mitigate the down trade -- down-trending forces, which have been unleashed by this price -- by this cost increase. And if we see that -- disc brake is a fine example, and there are others like LED lights, digital speedometers, et cetera, which we are trying to incorporate in along with our BS VI so that we mitigate the down trade.

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [120]

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And just lastly on the electric 3-wheelers side. So we have seen some kind of traction at least in Eastern markets so -- by some of the competitors. I mean so what's your plan there -- out there? I mean I just got to know that you have got the approval in New Delhi. But I mean what about the Eastern markets and elsewhere? I think there is decent touch into certain areas of UP, et cetera. The 3-wheeler electric are doing slightly better. I mean, not the old one, I mean, from the branded place I'm talking about.

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [121]

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So the -- I don't know which exact type you're referring to, but as you probably are aware that there is a lead acid and the lithium ion category of 3-wheelers. Our understanding is that the lithium ion 3-wheeler, which is obviously a superior battery pack, better performance, longer life, safer and all these things. Because of their very high cost, there is very, very little traction. It's very meager numbers all over India. The lead acid, of course, as you know, as proliferated largely because largely in those places where the 3-wheelers -- the IC engine 3-wheeler was restricted. So that is actually what is the lay of the land. We are, obviously, looking at the development of a lithium-ion based 3-wheeler, why, because of its cost will obviously have a much smaller play. And just like the scooter, our objective is a very limited one. It is about understanding the customer and having that 360-degree capability opposite to the vendors, manufacturing and customer knowledge. And that is what it is. So we are not really looking at a big play in electric 3-wheelers, too.

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Priya Ranjan, Antique Stockbroking Ltd., Research Division - Research Analyst [122]

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Sure. And just lastly, on the export market. How about the -- I mean, at one point of time, Iran was doing quite fantastic for us. So how is that geography behaving with some additional sanctions, et cetera?

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Rakesh Sharma, Bajaj Auto Limited - Chief Commercial Officer & Executive Director [123]

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So after the last round of sanctions, I think, if I'm not mistaken it for almost about a year plus, there have been no exports to Iran because of various types of sanctions. That situation, as you know, is continuing. And so we -- actually, at this point of time, despite having a very good competitive position, a great brand franchise in Iran, we were #1, Pulsar is like an iconic brand over there. We are not exporting to Iran. I don't think the situation is changing in the near term.

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Operator [124]

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I will now hand the conference over to Mr. Soumen Ray. Sir, please go ahead.

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Soumen Ray, Bajaj Auto Limited - CFO & President of Finance [125]

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Thanks a lot, ladies and gentlemen, for joining the call. We continue to remain committed to giving competitive, profitable and sustainable growth. I'm sure there could be further questions, but it was a 1-hour slot, and Rakesh has been around since morning on all the answering questions. So we will relieve him of any further answering.

I -- and I would also like to take this opportunity to introduce to all of you, Anand Newar. Anand has joined Bajaj Auto, and he -- whilst he will be working with Sanjeev, he would be the person who would be dedicated to Investor Relations. I request all of you to reach out to him.

After the call, if there are any further questions, as usual, you could reach out to Anand or to me. Anand's e-mail id is anewar@bajajauto.co.in. Thanks a lot for dialing in. And until we speak again on -- in April, wish you all the best.

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Operator [126]

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Ladies and gentlemen, on behalf of HDFC Securities Limited, that concludes this conference. Thank you for joining us, you may now disconnect your lines. Thank you.