Ather Energy Limited — Q2 FY26

Ather Energy Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=p55iRZUCp-U Published: 6 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Ather Energy Limited Q2 and H1 FI 2026 earnings conference call. 0:10 10 seconds As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:26 26 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over 0:33 33 seconds to Mr. Muri Shashidan run from Ather Energy Limited. Thank you and over to you Mr. Muri. 0:43 43 seconds Good morning everyone. Uh and welcome to Ather Energy Limited's Q2 FY26 earnings 0:50 50 seconds conference call. We have with us today Mr. Tarun Meta, executive director and CEO and Mr. Sohil Parik, CFO, Ather 1:00 1 minute Energy Limited. Before we begin, I would like to add that anything that the management might say on this call, which 1:09 1 minute, 9 seconds might be seen as forward-looking statements, may involve risks and uncertainties. 1:14 1 minute, 14 seconds Such statements or comments are not guaranteed by Ather Energy Limited and the actual results may differ from those statements. 1:23 1 minute, 23 seconds Please note that this conference is being recorded and all participants will be in listenonly mode. Uh there will be 1:32 1 minute, 32 seconds an opportunity for you to ask questions after a brief overview by our management team. Uh so let us begin and start with 1:39 1 minute, 39 seconds an overview from Mr. Tarun Meta, executive director and CEO Ather energy limited. 1:45 1 minute, 45 seconds Hey, thanks Molly. Uh morning folks. So Kudu was a strong quarter for us. Um 1:53 1 minute, 53 seconds units sold were up at 66,000 units which is a 67% growth yearon year and a 42% growth quarteron quarter. Uh total 2:01 2 minutes, 1 second income uh uh fantastically was up at 940 crores our highest ever and u up 57% 2:09 2 minutes, 9 seconds yearonear. Adjusted gross margin on an absolute basis was 210 crores uh and on a percentage basis was 22% which is a 2:17 2 minutes, 17 seconds 300 bips improvement year. there there was a one-time impact because of uh the rare earth supply crunch in Q2 wherein 2:26 2 minutes, 26 seconds we had to change our supply chain and where uh because of which the majority of vehicles in Q2 we haven't filed for subsidy so there was an uh associated 2:35 2 minutes, 35 seconds reduction in revenue and hence AGM uh however if you were to account for that uh AGM actually grew materially this 2:44 2 minutes, 44 seconds quarter uh for example without incentives AGM was up at 21% % which is a 100 bits improvement quarteron quarter and a 900 bips improvement year on year. 2:54 2 minutes, 54 seconds Uh finally overall EIDA came in at lower than 10 negative 10% the first time we've uh touched singledigit AIDA losses 3:01 3 minutes, 1 second uh in any quarter. Uh 1100 bips improvement year on year and a strong 600 bips improvement quarteron quarter. 3:10 3 minutes, 10 seconds Market share uh actually in Kudo I think in some sense a little bit of an exceptional quarter. We saw the strongest uh gain in market share in 3:17 3 minutes, 17 seconds recent times. uh market share came in at 17 and a.5% 17.4%. 3:22 3 minutes, 22 seconds Uh over the last six seven quarters our market share has been broadly on an upswing. The first few quarters was largely risalled improvement in market 3:31 3 minutes, 31 seconds share but the last three four quarters has been largely a distribution-led expansion of a market share which uh continues to pay dividends even as we 3:40 3 minutes, 40 seconds speak. Um on volumes in uh Q2 uh we were up 67% compared to same quarter last 3:47 3 minutes, 47 seconds year. Uh uh more importantly on an absolute basis we added more volume in Q2 corresponding to Q2 last year than we 3:55 3 minutes, 55 seconds did in Q1. Q1 we added 23,000 units over same quarter last year. In Q2 we added almost 26,000 units. So very strong 4:04 4 minutes, 4 seconds growth overall in Q2. All of this has been on the back of uh an expanding distribution. We've been calling out that our large part of our growth in 4:13 4 minutes, 13 seconds recent quarters has been distributionled and that's because we've been adding uh distribution. We have been adding new stores particularly new cities and 4:21 4 minutes, 21 seconds increasingly now also in same cities at a rapid pace. Uh Q2 was no exception. We added 78 stores taking our total store 4:27 4 minutes, 27 seconds count to 524 and uh keeping us on a strong path for our ambition of 700 uh nearly 700 stores by later this year. 4:39 4 minutes, 39 seconds When we began this distribution-led expansion, our south Indian stores uh were almost the st same as non- south 4:47 4 minutes, 47 seconds stores. Uh maybe even higher, I'll check the exact number, but they were quite comparable. Over the last 3 four quarters, we've added uh the majority of 4:55 4 minutes, 55 seconds our stores in non- south with a particular focus on middle India. So middle India is a strategy that we've been calling out for a while. uh instead of us saying that you know all of non 5:04 5 minutes, 4 seconds south is a focus we've chosen to focus in a big way in middle India over the last few quarters and that's certainly paid strong dividends if you see a 5:12 5 minutes, 12 seconds market share in middle India middle India is for everybody's uh recall the states of Chhattiskar Gujarat Maharashtra Madhya Pradesh Chhattiskar 5:21 5 minutes, 21 seconds uh and Odisha and a couple of union territories there so these five states have been a particular focus for us in the last few quarters from a 5:28 5 minutes, 28 seconds distribution marketing all perspectives And the payout has been strong. In uh Q2 we ended with 14 and a half% market 5:36 5 minutes, 36 seconds share in middle India growing almost 10 10 like 10 percentage from 4 percentage in Q125 to 14 1.5 percentage in Q2 FI26. 5:48 5 minutes, 48 seconds um taking us to a fairly strong presence in all states and honestly we are we are still at early stages in many markets 5:55 5 minutes, 55 seconds where our distribution still opening uh and there's a lot of headroom to grow for us particular callouts in the in in 6:02 6 minutes, 2 seconds these states Gujarat we've been uh consistently doing 20 25% market share now uh cementing us a very strong player 6:10 6 minutes, 10 seconds there uh Maharashtra we have now started to do almost 15% market share in fact in October we were I think at almost 16 17% 6:17 6 minutes, 17 seconds market share MP has been a uh outstanding story for us uh from something like 3 400 units just about 6:24 6 minutes, 24 seconds year and a half back now we're starting to see more than 2,000 units a month uh recent uh in Q2 we ended with uh more 6:31 6 minutes, 31 seconds than 10% market share and if you see our October performance on WAN you will see we're almost doing mid- teens performance in Madhya Pradesh Madhya 6:39 6 minutes, 39 seconds Pradesh also deserves a special mention because of how fast grow because of not just our market share gains but also it's compounded market because of how 6:48 6 minutes, 48 seconds fast MP is itself growing as an EV market. MBI has been one of the fastest growing EV markets in uh in recent quarters making it a particularly big focus for us in middle India. 6:58 6 minutes, 58 seconds On rest of India, while obviously middle India was our larger strategic focus and has been for the last few quarters, rest of India, we've been a bit more 7:06 7 minutes, 6 seconds targeted. Uh but those targeted uh efforts have been also paying out. Uh Q2 was the first time we've hit 10% market 7:14 7 minutes, 14 seconds share in rest of India together. uh October was I think even better performance uh and this 10% has come with some really strong performance in 7:22 7 minutes, 22 seconds specific states for example in Jammu Kashmir we have uh gone from number two number three to now number one with more than 40% market share in Punjab we have 7:31 7 minutes, 31 seconds now entered 12 13% market share uh with in fact we we've become market leaders in places like Amritsa Rajasthan has 7:38 7 minutes, 38 seconds been another fantastic story frankly I I I even I didn't think uh it'll grow uh so rapidly uh In fact, Rajasthan is 7:46 7 minutes, 46 seconds rapidly becoming one of our key focus areas uh in rest of India now with uh Q2 performance at 13% market share uh with 7:55 7 minutes, 55 seconds us uh showing really strong traction in places like Jodpur, Kota, Bikanair and many other places 8:02 8 minutes, 2 seconds with all this uh South India has not been uh uh lacking attention. uh we've been calling out that uh while distribution expansion is more focused 8:11 8 minutes, 11 seconds in non-s south states south India will also have uh will also continue to expand and it has Q2 we've hit 25% 8:19 8 minutes, 19 seconds market share becoming number one in all of south zone once again uh I I know this is Q3 but still want to call out uh 8:26 8 minutes, 26 seconds in October we were number one in every single state in all of south uh making this I think the first time we have 8:33 8 minutes, 33 seconds achieved so uh so south India continues to expand uh and this is happening because we still have had uh pockets 8:40 8 minutes, 40 seconds where Aether's distribution hadn't reached which we are continuing to open up uh particularly in south 10 city which is more stores in the same city is 8:49 8 minutes, 49 seconds opening up as a fantastic expansion opportunity now uh particularly in the states of Telangana Karnataka and Kerala where we able to go materi quite deep 8:57 8 minutes, 57 seconds now and the market is really opening up coming to financial performance uh adjusted gross margin uh for H1 one came 9:06 9 minutes, 6 seconds in at 23% uh 20% if you look at uh without any incentives uh overall Cox saw a strong a 9:15 9 minutes, 15 seconds good reduction if you look at Q4 in isolation as I called out AGM was at 22% 21% without incentives 9:24 9 minutes, 24 seconds uh there was roughly I think about a 20 cr uh subsidy that we haven't filed for in Q2 uh we expect this to be a one-time 9:33 9 minutes, 33 seconds hit as uh the as as the issue was resolved through the course of Q2. So we don't expect this to repeat in Q3 uh 9:42 9 minutes, 42 seconds making uh making us reasonably confident about AGM in the coming quarters also. 9:47 9 minutes, 47 seconds All of this AGM expansion and volume expansion has played out beautifully in EIDA. AIDA for H1 came in at uh negative 9:55 9 minutes, 55 seconds 12%, but if you see Q2 particularly Q2 came in at less than 10%. Uh about 90 cr 10:02 10 minutes, 2 seconds loss. Uh even here uh the rare earth hit was almost about 20 25 crores overall. 10:09 10 minutes, 9 seconds So EIDA's come in strong. Obviously there's still some more work to do but operating leverage is uh uh coming in is 10:16 10 minutes, 16 seconds playing out well at these scales. Now this was an 1100 bits improvement over same quarter last year. Um Q2 also saw 10:25 10 minutes, 25 seconds us uh uh starting to ratchet up our marketing and sales spend uh in the buildup to festive particularly 10:33 10 minutes, 33 seconds particular callouts on marketing were some of our integrations. For example, we had we've had a strong integration at with Tarak Matakala Chashma and 10:41 10 minutes, 41 seconds Siraatika Asai and Tamil Nadu. uh both of those integrations have been very well received and we are very bullish uh about how particularly with Rista we've 10:49 10 minutes, 49 seconds been able to really go mainstream with some of our marketing efforts in the in Q2 uh we've also seen some integrations in 10:58 10 minutes, 58 seconds movies like Pam Sundri uh and others and all of these are landing really well for us on new product launches in Q2 we 11:05 11 minutes, 5 seconds we've had a gap in our portfolio for a while now we've uh if you were to think of a portfolio with two axis one is technology and other is range We've had 11:14 11 minutes, 14 seconds three out of those four quadrants covered well between 450 and Rrista which is we've had enough technology options and we've had high range and low 11:22 11 minutes, 22 seconds range options but one quadrant which is low tech high range. This was a gap in our portfolio for a long while. We uh 11:30 11 minutes, 30 seconds finally filled that gap up. We finally filled that gap up uh with uh the introduction of lowrange models on 450S 11:37 11 minutes, 37 seconds and Rrista S. uh sorry the high range the high range options on 450S and Rrista S uh with about 160 km of range 11:45 11 minutes, 45 seconds each uh this has been well received we are seeing uh good demand uh and we are seeing very little to no cannibalization 11:53 11 minutes, 53 seconds of the higher uh higher technology models with this this is helping us expand our sales and our market share in many markets in Q2 we also launched 12:02 12 minutes, 2 seconds battery as a service bass which allowed us to reduce our upfront price of Rrista S to as low as $76,000 rupees. This is 12:10 12 minutes, 10 seconds uh an important top of the funnel introduction and uh while the actual attach rates are still emerging, we expect uh this to continue supporting 12:17 12 minutes, 17 seconds our marketing efforts on uh making and landing rrista as a more mainstream product across the country. Q we also 12:25 12 minutes, 25 seconds had our annual ather community day. This has become our flagship launch event every year now. Uh this time we had almost 4,500 people in attendance. We 12:33 12 minutes, 33 seconds launched our new generation fast charging uh which was almost two times faster. We unveiled astack 7.0 our 12:41 12 minutes, 41 seconds latest generation of software and more importantly we unveiled E platform our new generation scooter platform. E is uh 12:49 12 minutes, 49 seconds our a more versatile scooter platform with focus with a big focus on safety and convenience. And from an operations perspective, this is uh designed for 12:57 12 minutes, 57 seconds scalability and a better cost structure compared to 450 and today we also unveiled the first form factor, the 13:05 13 minutes, 5 seconds first concept vehicle on E, something that's shaping up incredibly well for a launch next year. E is going to bring to 13:13 13 minutes, 13 seconds the market uh uh Ather's first 14-in wheel in scooters. We are also launching 13:20 13 minutes, 20 seconds Aether charge drive controller AC/DC which is our integrated charger and motor controller module. Something that uh simplifies service simplifies 13:29 13 minutes, 29 seconds assembly and more importantly brings cost down considerably from a customer's perspective. Ather charge drive controller will also unlock onboard 13:37 13 minutes, 37 seconds charging reducing the portable charger massively in terms of size and weight. 13:43 13 minutes, 43 seconds Uh making it a big convenience upgrade uh with E uh in electric with with our E portfolio. E is also going to launch 13:50 13 minutes, 50 seconds with advanced electronic braking system AEBS which is our proprietary braking technology. Uh this mimics ABS like 13:58 13 minutes, 58 seconds performance in many scenarios uh at a very very very very low cost structure overall. 14:04 14 minutes, 4 seconds on Atherax 7.0. Uh we've uh I I think this was our best launch and the uh best launch for our stack uh till date. Uh 14:13 14 minutes, 13 seconds many very very viral features particularly pothole alerts which I think got picked up by media and consumers alike incredibly well. Uh 14:22 14 minutes, 22 seconds crash alerts uh voice on the ather 7.2 we were able to finally bring the entire power of our ecosystem together 14:30 14 minutes, 30 seconds incredibly well. the software, the vehicle software, our algorithms, the vehicle, our helmet, chargers, 14:38 14 minutes, 38 seconds everything coming together incredibly well as a incredibly well as a very tight package. 14:43 14 minutes, 43 seconds On the business front, uh this entire suite continues to pay again strong dividends with an attach rate of 89% for 14:51 14 minutes, 51 seconds uh customers uh for ether stack and a 12% contribution for non-vehicle revenue. 14:57 14 minutes, 57 seconds On charging, we un we unveiled we launched our fastest charger yet. This is a 6 kW charger, two times faster than our 15:05 15 minutes, 5 seconds current fast charger uh at uh at at a considerably smaller size and a better cost structure. Uh our fast chargers are 15:14 15 minutes, 14 seconds up at almost 4,300 points across the country making this a very important part of our entire value proposition to our customers. Uh a big focus for us 15:23 15 minutes, 23 seconds recently has been in enabling intercity rides for example between Mumbai, Pune or Bengaluru Mysuru or uh Chennai Pi 15:30 15 minutes, 30 seconds Chennai Pondi Cherry uh with our fast charging really going deep on connecting customers on these routes 15:39 15 minutes, 39 seconds with that uh at the end of my session just to summarize Q2 FI26 total income up considerably at 940 KS 15:48 15 minutes, 48 seconds pania market share of 17.4% 4% experience centers up at 524 uh centers across the country adjusted 15:56 15 minutes, 56 seconds gross margin up at 22% ebita losses have come down to sub 10% uh market leadership in South India uh new 16:05 16 minutes, 5 seconds variants launched bast launch uh E platform unvealed for a scheduled launch for next year and a strong reception to 16:13 16 minutes, 13 seconds astack 7.0 which is uh going live over the next few months. Uh with that uh folks, I'm done. 16:20 16 minutes, 20 seconds Thank you for your patience. Uh look forward to your questions. Now, thank you very much. We will now begin 16:27 16 minutes, 27 seconds the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove 16:36 16 minutes, 36 seconds yourself from the question queue, you may press star and two. Participants are requested to use hands while asking a 16:43 16 minutes, 43 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 16:51 16 minutes, 51 seconds The first question is from the line of Kapel Singh from Namura. Please go ahead. 16:58 16 minutes, 58 seconds Yeah. Hi, good morning Tarun and congratulations. I think uh great to see that market share is improving across 17:05 17 minutes, 5 seconds the country. Uh my first question is on the network expansion that you have been doing. Um how do you see the ASPs and 17:14 17 minutes, 14 seconds the attach rates in the new regions that you're going to because that would be more in the interiors and also 17:23 17 minutes, 23 seconds um you know a lot of stores probably closer to 160 uh stores you have added in the last 6 months. So how much time 17:31 17 minutes, 31 seconds does it take to for the stores to mature because uh you uh are you getting optimum volumes here or should we expect 17:40 17 minutes, 40 seconds further gains on account of that as well? 17:43 17 minutes, 43 seconds Hey thanks Kabell thanks for the question. Uh so you know as we've been adding these new stores this was a little bit of a new 17:51 17 minutes, 51 seconds territory for us also because the last four quarters last three quarters have been terrific uh store expansion something that we haven't really taken 17:58 17 minutes, 58 seconds on in our previous uh previous years. Um fascinatingly though our ASP has been 18:06 18 minutes, 6 seconds extremely steady. I I think the uh customer landed price uh extra room average of vehicle plus pro pack is 18:14 18 minutes, 14 seconds probably within a few hundred rupees over the last several quarters now. uh and I'll be honest I think that was a bit of a surprise to some of us also uh 18:22 18 minutes, 22 seconds and this is not just oh you know like some states cancelelling out other states uh even newer zones like Madhya Pradesh, Rajasthan, Gujarat uh Uttar 18:31 18 minutes, 31 seconds Pradesh are holding up the ASPs incredibly well despite massive introduction of new stores in these in these zones. 18:38 18 minutes, 38 seconds um uh which is actually very positive because what we are seeing is that the 18:46 18 minutes, 46 seconds older stores are starting to grow their ASPs. So let me just step back and give you a sense of what we are what we are seeing as internally as store growth. 18:55 18 minutes, 55 seconds when a new store opens up for Ather in the early few months we see that given that we obviously we we have a more 19:02 19 minutes, 2 seconds premium product portfolio available uh in the early months we see often sales teams initially only having the courage to frankly sell the more entry-level 19:11 19 minutes, 11 seconds models uh and hence ASPs are more modest but as the months start rolling by and there is a more there's better word of mouth in those in those zones in those 19:20 19 minutes, 20 seconds in those districts ASPs start inching up because maybe a mix of you know consumer pull and also dealers starting to 19:28 19 minutes, 28 seconds realize that you know it's not actually that crazy to sell are more higher priced variants. So the first first growth that we see typically within 6 8 months is ASPs for the store growing up. 19:40 19 minutes, 40 seconds This is followed by pro pack sorry the first growth that we see is actually pro pack attach rate going up. Uh sorry I mixed up the order there. Um so even if 19:48 19 minutes, 48 seconds the lower-end variants sell uh very quickly within like literally a few months uh uh our dealers realize that the ability to sell software is pretty 19:56 19 minutes, 56 seconds high and there's a massive pull for the pro pack in almost every geography that we go to including new geographies. So very quickly while new zones might open 20:05 20 minutes, 5 seconds up at 40 50% attach rate within literally quarters they start inching up to 70 75% attach rate. For example in Madhya Pradesh we have seen a very 20:12 20 minutes, 12 seconds similar trend starting at 45 50% attach rate. Now Madhya Pradesh is showing consistently 70 75% attach rates for Propac which is which is fantastic. So 20:22 20 minutes, 22 seconds the first thing that goes up is propack attach rate for us. Next thing that goes up is the ASP of the base vehicle itself as the confidence goes up to sell more 20:30 20 minutes, 30 seconds and more higherend variants. And finally what we see once stores stabilize typically around one one and a half year mark is accessory attach rate go up. So 20:39 20 minutes, 39 seconds for example Gujarat is a reasonably stable market for us from a distribution perspective. Now uh distribution expansion kind of reached a steady state 20:47 20 minutes, 47 seconds about a few quarters back. In the last 3 four quarters we have seen accessory attachments in Gujad go up as much as 60 to 75%. U 20:56 20 minutes, 56 seconds uh while newer stores obviously not that focused on accessories right now. So this is like a three tier opportunity. 21:03 21 minutes, 3 seconds New stores will first grow their prop packs followed by base vehicle attached base vehicle ASPs then finally accessories and eventually over a few 21:12 21 minutes, 12 seconds years time service revenues. Um but in general we have seen very very steady ASPs that you can also see in the 21:20 21 minutes, 20 seconds numbers. If you account for the subsidy math here you will see our ASPs are very very solid right now. 21:27 21 minutes, 27 seconds Okay. Uh great. And uh just on the new stores, I mean I had also wanted to check um are like how much time does it 21:35 21 minutes, 35 seconds take for the stores to mature? What are your observations on the dealer profitability in these new stores? Are 21:42 21 minutes, 42 seconds you finding uh interest from new dealers and new locations to expand? Just some color on that. 21:51 21 minutes, 51 seconds Very strong deal dealer pull. We are largely preferring our existing partners because it allows ease of expansion and frankly we want them to become larger and larger partners with our business. 22:01 22 minutes, 1 second Uh but very strong pull from almost every go. Uh very very few states uh where we would have a challenge. Almost 22:08 22 minutes, 8 seconds pan India there's a strong pull. Uh dealer profitability is at a good place now. Uh typically we are seeing new stores uh stabilize in three to four 22:17 22 minutes, 17 seconds quarters. Uh I would say again depends a lot on the exact city the exact variant 22:25 22 minutes, 25 seconds mix but I would say a few quarters three three four quarters is a is a is a reasonable estimate for dealer profitability currently. 22:34 22 minutes, 34 seconds So it's a it's a pretty rapid timeline and that all of this has been driven by EC 2.0 and EC3.0 are new format stores 22:42 22 minutes, 42 seconds which have been the primary driver of our new of our distribution expansion in the last one and a half years. These format stores have allowed very good profitability and hence a very strong pull from dealers overall. 22:54 22 minutes, 54 seconds So Tan and lastly just want to check on the cost side. Uh we have seen some uh drop this quarter on uh the cost per 23:02 23 minutes, 2 seconds vehicle and we can see the potential of E but if you could articulate uh on the existing platform as well what are the 23:11 23 minutes, 11 seconds other areas where you're looking to reduce cost and how much is the potential over there? 23:18 23 minutes, 18 seconds Right. So I think uh cost did come down by u uh I I think overall underlying gross margins have uh improved by 150 23:26 23 minutes, 26 seconds bips this quarter uh accounting for subsidy. Um I think part of that has been the increasing attach increasing 23:35 23 minutes, 35 seconds share of business of uh LFP batteries but also constant cost reduction by uh R&D uh teams uh for us and we've been 23:44 23 minutes, 44 seconds calling this out forever that while scale plays one set of roles scale largely plays an operating gives us operating leverage for our fixed costs most of our cost reduction has been 23:53 23 minutes, 53 seconds driven by very strong engineering efforts uh I expect that trend to continue all the way till actually E 24:00 24 minutes launches uh obviously E is a step change in our cost structures uh and that'll be a much stronger uh uh improvement in of 24:08 24 minutes, 8 seconds gross margin but even on 450 and RITA we are seeing uh uh strong cost reduction continuously this is despite a small uh 24:16 24 minutes, 16 seconds change of uh uh forex in in in Q2 uh despite that we are seeing a good improvement of underlying cost structures 24:25 24 minutes, 25 seconds okay thank you I'll come back in the queue Thank you very much. The next question 24:32 24 minutes, 32 seconds is from the line of Cherak Jane from NK Global. Please go ahead. 24:38 24 minutes, 38 seconds Yeah. Hi, good morning T Harbon and thanks for the opportunity. Uh Harun just wanted to get a sense in terms of how has been the festive season and and 24:46 24 minutes, 46 seconds probably in terms of retailates if you were to share some thoughts on inventory and particularly from the supply side standpoint uh I think the new plant is 24:53 24 minutes, 53 seconds coming a bit delayed by two three months. So how are we placed from a capacity standpoint till the time the new plan comes up? 25:01 25 minutes, 1 second Yeah. Uh thanks. So festive first very strong. Uh honestly uh we all scrambling 25:08 25 minutes, 8 seconds around to ensure that uh we can uh we we can keep raising the capacity particularly on the supplier ends. Uh I 25:15 25 minutes, 15 seconds think uh recent months have been the first few months where the retail's been outstripping wholesale by a considerable 25:22 25 minutes, 22 seconds margin. uh and we are working hard to fill that gap up while that presents a lot of operational work for us but I think obviously that's a very strong 25:31 25 minutes, 31 seconds sign for the business uh it underwrites it it underlines a very strong demand across zones uh you saw vajan numbers in 25:39 25 minutes, 39 seconds October you saw more than 30,000 registrations for us which is like almost a 50% growth over last year uh 25:46 25 minutes, 46 seconds and I can tell you we were we we were stocked out we were stocked out in I think almost every single EC uh ending 25:54 25 minutes, 54 seconds with a fairly slim channel inventory. Uh I'm I'm hopeful that over the next few quarters we'll improve this but this is a very strong underlying demand sign for 26:01 26 minutes, 1 second us. um on the new plant there was a two there was I think a 2 three month delay because of uh the delay in uh in in 26:10 26 minutes, 10 seconds obtaining environment clearances but that's behind us works begun in full swing uh to ensure that E does not struggle because of uh the delay of the 26:19 26 minutes, 19 seconds new plant we have a plan of commencing E production out of HOSU itself as an early measure to protect E timelines uh 26:27 26 minutes, 27 seconds and to ensure that from a customer perspective and a market perspective we don't really miss a step here. So I don't foresee any volume impact because 26:35 26 minutes, 35 seconds of this. Uh uh and this I think gives us uh and I I think overall Oric will come well on time for the overall ramp up of uh E. 26:48 26 minutes, 48 seconds Understood. Thank you. Uh next question is on a bit performance. Well, obviously we have seen major improvement in terms of our performance but one of the 26:56 26 minutes, 56 seconds incumbent tubular OEM did mention that they have reached a beta neutral in terms of the tool business. So where are the gaps between let's say an incumbent 27:04 27 minutes, 4 seconds versus us in terms of cost structure is it because of the shared resources on manufacturing distribution is where they have advantage as of now at this scale 27:12 27 minutes, 12 seconds and probably over time uh we might see major advantage I mean any thoughts on that if you want to share. Yeah. So I 27:20 27 minutes, 20 seconds think uh the the biggest difference is uh this our our P&L is a completely clean P&L. We have no mix happening 27:27 27 minutes, 27 seconds between you know like there's no sharing of resources. There is no uh like you can't switch you you can't mix incentives, you can't mix pricing, you 27:35 27 minutes, 35 seconds can't mix uh cost structures. So what you're seeing here is a pure clean P&L overall for electric uh free of uh and 27:42 27 minutes, 42 seconds and largely we are also discussing a P&L without additional incentives like PLI uh uh and others um what you are seeing 27:51 27 minutes, 51 seconds is very strong gross margins that continue to compound very strong ability to make margins out of software that will continue to compound uh overall 28:00 28 minutes cost structures are quite well um EITA came in at negative 10% and I That was also the full quarter average. 28:07 28 minutes, 7 seconds Obviously with increasing volume through the course of the quarter performance has been strong. So I'm feeling good about where we are headed on overall 28:15 28 minutes, 15 seconds profitability without a specific guidance for when uh I personally feel this is one of the better cost 28:22 28 minutes, 22 seconds structures in the industry on fixed costs. Uh but it's obviously hard for people to see that because ours is one 28:30 28 minutes, 30 seconds of those few panels that is pure electric and is not mixed up in any possible way. Um so yeah so I I I I 28:38 28 minutes, 38 seconds would say I'm feeling good about our overall cost structures and obviously you've seen the improvement this quarter. 28:44 28 minutes, 44 seconds Yeah thank you. Thank you so much. I'll come back to the Thanks. Yeah. 28:49 28 minutes, 49 seconds Thank you very much. The next question is from the line of Vipolar from HSBC. Please go ahead. 28:56 28 minutes, 56 seconds Yeah. Hi. Uh thank you for taking my question. So first question is on the gross margin trajectory like now the PME driver will go away in April and do few 29:05 29 minutes, 5 seconds margins now look like looks like a more realistic margins. So what will be the gross margin triggers going forward like if you can pinpoint some key improvement 29:13 29 minutes, 13 seconds areas uh on the existing platform would be really helpful. 29:18 29 minutes, 18 seconds Yeah. So um on the revenue front we expect as stores stabilize for our ASPs 29:25 29 minutes, 25 seconds to hold up well maybe even when a minor improvement in some geos uh we expect our accessory attach rates to continue 29:32 29 minutes, 32 seconds improving. Uh again we are looking I'm looking at our mature states versus our newly emerging states. Uh there is a 29:40 29 minutes, 40 seconds there is a good opportunity on accessory attach rates and the trend signs are extremely positive for us to be very confident about them. uh service 29:48 29 minutes, 48 seconds revenues will continue compounding and margins from there will continue compounding. So I think over the next one year as we go through the final set of subsidy removal there are a lot of 29:57 29 minutes, 57 seconds positive tailwinds on the revenue front uh even before E comes in by the way uh and this is at unit economics. Now on um 30:06 30 minutes, 6 seconds uh on the cost front uh variable cost front we have seen strong improvements in warranty costs. We have seen strong 30:13 30 minutes, 13 seconds improvements in bill of materials. Uh LFP obviously is a continuous trigger that continues to pay off and I think 30:21 30 minutes, 21 seconds even in Q3 you will see uh dividends out of it. Uh you will see constant cost reduction paying out particularly on the 30:28 30 minutes, 28 seconds Rista portfolio but also a little bit on the 450 portfolio. We've seen very good success with our ability to uh raise 30:36 30 minutes, 36 seconds prices in our strong markets. Uh particularly with 450 in the recent quarters, we've seen very strong traction. Uh in fact, even now we've 30:44 30 minutes, 44 seconds been able to undertake constant price hikes uh with uh with good response from the market. So overall the upcoming uh 30:51 30 minutes, 51 seconds subsidy removal in fact this quarter was largely a nearly very limited subsidy quarter. So I think what you're seeing 30:58 30 minutes, 58 seconds here is probably very strong sign of things very strong sign of things to come. Um so I for me the April subsidy 31:09 31 minutes, 9 seconds removal is probably no longer a big call out or a big concern. I think uh our business is very well set up to absorb that. 31:17 31 minutes, 17 seconds Um yeah that's I think overall software continues to be obviously a positive news for all of us. Uh I want to call it 31:25 31 minutes, 25 seconds a positive surprise but this is our third public conference call so it would probably not be fair for me to say we are surprised but we still are surprised 31:33 31 minutes, 33 seconds at 89% attach rates so and and I'm I'm hoping this will stay in somewhere this zone for some more time. 31:41 31 minutes, 41 seconds Yeah that that was actually important uh the software attachment is pretty strong. So just another second question is on the uh material service like what 31:49 31 minutes, 49 seconds was the share of that uh product uh in total sales so far and how many customers are opting for buyback option like what you have offered like 3 years 31:57 31 minutes, 57 seconds uh uh 3 years guarantee buyback or three and five years. 32:02 32 minutes, 2 seconds Okay so both bass and buyback is largely a top of the funnel activation for us. 32:08 32 minutes, 8 seconds um you know where the industry right now is. We have a lot of the consumers already coming in who I I won't call them early adopters we 32:17 32 minutes, 17 seconds definitely beyond that phase with almost 15 20% of the scooter market buying electric but let's say the early majority I think a lot of the early 32:24 32 minutes, 24 seconds majority and specifically the 125 cc buyers are already very positively looking at electricing and buying it in reasonable uh attach rates reasonable 32:33 32 minutes, 33 seconds penetration. Now we are starting to deal with a lot of the mainstream market which would be buying the 110 cc scooters and some of the 125 cc scooter 32:42 32 minutes, 42 seconds customers. For a lot of these consumers the problem is not the logic. I I think the logical argument for buying electric scooter is just astoundingly strong. The 32:51 32 minutes, 51 seconds uh the batteries are lasting 8 9 10 years like we our oldest batteries are now almost 7 8 years in the field and they're still holding well. Uh obviously 32:59 32 minutes, 59 seconds and the newer generation batteries will last longer. the the running cost is incredibly low. The overall servicing cost is uh uh has come to a great place. 33:08 33 minutes, 8 seconds Distribution is good. So a lot of the logical reasons are there. But we are now increasingly dealing with a customer who is not worried about the logic. They 33:16 33 minutes, 16 seconds are worried about the the the social proof of buying an electric. Right? This they are more afraid about things that they don't know. What will be the resale price? What will happen to a battery? 33:27 33 minutes, 27 seconds They've heard rumors that you know battery is like 70 80,000 rupees and if battery goes off in one or two years everything will go for a toss. So our 33:34 33 minutes, 34 seconds focus even in our marketing has with the ether advantage campaign which is jadamat zamat ethero been incredibly 33:41 33 minutes, 41 seconds focused on this and the launch of bass and the launch of uh the buyback program has been squarely aimed at giving 33:50 33 minutes, 50 seconds comfort to these customers. Honestly, I've been never expecting a lot of customers to opt for buyback. I don't 33:57 33 minutes, 57 seconds think they will need the buyback. But I think just knowing that the brand is able to promise the brand and its ecosystem is able to promise a 50 60% 34:07 34 minutes, 7 seconds resale value after four 3 or 4 years is a very strong signal for the incoming customer. We had a similar uh lever with 34:15 34 minutes, 15 seconds the 8-year battery warranty which is which has always been a viable product but uh consistently dealers and channel has given us feedback that don't worry 34:22 34 minutes, 22 seconds about the cost of it. Just the fact that the OEM is willing to offer a 70% range guarantee after 8 years is a very strong 34:30 34 minutes, 30 seconds signal for some of the mainstream consumers. Similarly, BAS and this plays the same role. Uh the attach rates are low. I would say they are like low 34:38 34 minutes, 38 seconds single digits but that is not their primary agenda. They are there in a portfolio to give comfort to customers. 34:44 34 minutes, 44 seconds Hopefully the attach will go up but I think they already playing the role that they were intended to. 34:50 34 minutes, 50 seconds Yeah, actually you partially answered my next question as well. So like since you are targeting 110 to 120 cc customers. 34:56 34 minutes, 56 seconds So so maybe apart from scooter segment what uh if you can give some idea like how many motorcycles customers are now 35:04 35 minutes, 4 seconds opting for EB like maybe some entry- level customers or maybe 120 cc customers who would have bought a motorcycle are buying scooter. Is there any kind of analysis you might have done 35:12 35 minutes, 12 seconds at your end? Maybe that will help us to understand what kind how are we looking at the penetration in a longer term. 35:19 35 minutes, 19 seconds I think motorcycles continue to lead customers to scooters on in general which is why scooter I think scooter penetration is almost nearly 40% now in 35:28 35 minutes, 28 seconds the two wheeler market but I would still hesitate to say that electric is particularly pulling those consumers from bikes to scooters yet. I think 35:37 35 minutes, 37 seconds that's that's likely a factor that will play out. But it's still at a fairly early stage right now. I think largely what we are getting are overwhelming the 35:45 35 minutes, 45 seconds overwhelmingly the 125 cc customer base moving to electric. Uh and now some of the 110 cc customers are starting to switch. Uh but I would say the 35:54 35 minutes, 54 seconds motorcycle transition is still a is still a small uh story. It that's not a big part of the story yet. 36:02 36 minutes, 2 seconds Thank you. Thank that was all from my side. 36:06 36 minutes, 6 seconds Thank you. The next question is from the line of Amin Pirani from JP Morgan. Please go ahead. 36:15 36 minutes, 15 seconds Yes. Uh, hi Kum. Thanks for the opportunity. Um, hi. Hi. Hi. Uh, so most of the questions have been answered but my question was 36:23 36 minutes, 23 seconds on the the kind of growth that you're showing. Obviously, there has been a very uh significant expansion of market share. uh even though the EV market 36:32 36 minutes, 32 seconds growth uh is still there but hasn't been like great in terms of penetration growth in the last say I would say 8 to 36:39 36 minutes, 39 seconds 10 months going so you do you think that this is just a temporary phenomena because of you know rare earth and maybe other issues or uh like how should we 36:48 36 minutes, 48 seconds think about the overall industry growth because at some point of time since you're already you know number one in south you're gaining market share your 36:55 36 minutes, 55 seconds growth will also be a function of you know growth any thoughts Thanks Amin. Uh so obviously that's a 37:03 37 minutes, 3 seconds that's an important question for our industry. Now this is by uh this is my perspective. I think um last two months in fact uh I think nobody's asked me 37:11 37 minutes, 11 seconds this but um GST on petrol was decreased by 10%age. I think that should have been a really scary moment for our industry. 37:21 37 minutes, 21 seconds Uh I think we should be we should have been seeing crazy discounting on electric portfolio. We should have been seeing a serious volume drop. You 37:30 37 minutes, 30 seconds haven't seen that. Actually October was a material growth over last October. 37:34 37 minutes, 34 seconds September was uh also actually underlying September was also strong. 37:38 37 minutes, 38 seconds Demand continues to hold up well. And I can tell you most players are actually having supply crunch. Uh obviously a 37:46 37 minutes, 46 seconds double factor of uh there is some growth but also the the rare earth crisis. I think despite a GST change, despite the 37:54 37 minutes, 54 seconds rare earth crisis, the industry's delivered growth. I think the underlying demand is strong. It's just uh it just is going to be visible in the coming 38:03 38 minutes, 3 seconds quarters. Um but beyond that there are there is one or two more stories to to describe here. 38:10 38 minutes, 10 seconds There are some of these more mature markets like let's say Tamil Nadu, Telangana, Andhra Pradesh uh where 38:17 38 minutes, 17 seconds obviously EV penetration has been healthy. Even Rajasthan actually where EV scooter penetration has been already quite healthy there we are seeing 38:25 38 minutes, 25 seconds moderate to no growth in recent quarters now that's not because that that's not that's largely because of the change of 38:33 38 minutes, 33 seconds the target customer base see if you have already gotten 20 25% of the scooter buyers you're now switching target to a 38:41 38 minutes, 41 seconds more mainstream buyer and there is a new PMF that is there's a new product market fit that is emerging which is why our marketing story narrative Everything is changing. 38:51 38 minutes, 51 seconds We are seeing in our marketing research every quarter a very strong growth in awareness, interest uh and intent to buy 39:00 39 minutes electric. But we are also seeing a lot of the consumers are at the fence waiting. Uh I think in many of these markets the switch to the mainstream 39:09 39 minutes, 9 seconds consumers buying electric would be very sudden and very rapid and when that happens that will present a very strong growth opportunity. But in the meantime 39:17 39 minutes, 17 seconds there are obviously very strong growth markets for electric which is also where our focus is now starting to switch to. 39:22 39 minutes, 22 seconds For example, Madhya Pradesh almost 50 60% growth in the last few quarters. 39:26 39 minutes, 26 seconds Bihar, Punjab uh they've grown incredibly well. Even Karnataka somehow has grown almost 17 20%. Which is kind of beating the trend in southern states 39:34 39 minutes, 34 seconds overall. Um even Kerala where so so this is one part where uh some markets are growing really 39:41 39 minutes, 41 seconds well. Uh we continue to we we are now starting to switch our focus there. In some markets like Kerala, I think uh 39:49 39 minutes, 49 seconds existing players like ourselves are now starting to grow the existing market. Kerala obviously has a strong E2 market. 39:56 39 minutes, 56 seconds Even Kerala grew 30% in the last quarters. Now that's happening because players like ourselves are doing 40:02 40 minutes, 2 seconds specific efforts. Uh we're doing uh targeted marketing. We are expanding our distribution. Well, so I think it is 40:09 40 minutes, 9 seconds possible and it is certainly happening where players like us is are now starting to pick up specific markets and grow them. There are clear markets that 40:17 40 minutes, 17 seconds are growing really fast. There are some markets which have now sort of stopped growing as I called out like EP Telangara Maharashtra where uh EV 40:25 40 minutes, 25 seconds penetration is probably already at a healthy pace. Uh but I don't think this is a this is a genuine wall here. I think this is basically means uh we are 40:33 40 minutes, 33 seconds undergoing a transition and as our product portfolio evolves for the next set of customers as our marketing evolves for the next set of customers I 40:42 40 minutes, 42 seconds think strong growth will restart in these markets also and on on top of all of this what I said at the start what what I think we should still not 40:49 40 minutes, 49 seconds discount is that despite the rare earth crisis and despite uh uh the GST change our industry is showing quite a strong 40:57 40 minutes, 57 seconds bit of resilience and will There is one last sorry one last point that I also want 41:05 41 minutes, 5 seconds yeah just one last point I also want to highlight um I think when we look at the growth over the last four to six quarters we 41:14 41 minutes, 14 seconds often look at early half early half of let's say calendar 24 and we wonder that the industry only seems to have grown so 41:22 41 minutes, 22 seconds much but I also want to call out that a lot of the volume happening in those quarters was happening below the 1 lakh rupees section ment now I think the one 41:30 41 minutes, 30 seconds lakh sub one lakh rupee category has a role to play in the industry I don't think it's a it's it's not a market but I think the kind of volumes that we were 41:38 41 minutes, 38 seconds seeing out of that segment in that in those quarters was not strictly fundamental I think a lot of it was like 41:47 41 minutes, 47 seconds like like sort of pushed growth as opposed to real organic growth and we have seen very strong signs of a lot of that market shrinking as the entire 41:56 41 minutes, 56 seconds industry is starting to that's most of the industry is starting to migrate in to beyond 1 lakh rupee price points. If 42:03 42 minutes, 3 seconds you see the growth of the north of 1 lakh rupee segment that's been very very powerful and that probably fits in very well with the narrative of electric two-heer growth that you would want to 42:12 42 minutes, 12 seconds see. Uh so some of this is also colored because those sub 1 lakh rupee segment grew artificially a little bit in in that timeline. Uh some of those 42:20 42 minutes, 20 seconds consumers have pulled back and disappeared because honestly I don't think they were real EV consumers in this timeline. But the real EV consumers above laps continue to grow really well. 42:32 42 minutes, 32 seconds That that's very helpful. Uh secondly, just an update. Uh it's it's good to know that you're already you know preparing for uh you know your own 42:39 42 minutes, 39 seconds version of an ABS. Uh any updates from the government side as to you know what are they thinking about the Jan 2026 deadline uh you know that they had 42:48 42 minutes, 48 seconds initially talked about for ABS across all two visas. 42:53 42 minutes, 53 seconds See I think obviously this is a much larger conversation with the government. 42:56 42 minutes, 56 seconds Uh Aether is supportive of a focus on safety in two wheelers. We do think this is a topic that's not discussed enough 43:05 43 minutes, 5 seconds and and I think should increasingly becoming a big part of the narrative and the conversation. I think India moves on two wheelers. So safety is paramount here. We are also however having said that not a big fan of mandating things. 43:16 43 minutes, 16 seconds I I think a lot of these things should happen organically. I think consumers will and are demanding more and more safety. You saw our year launch. We had 43:24 43 minutes, 24 seconds a big focus on safety. We announced EA uh the the u electronic advanced braking system. We announced uh a lot of 43:31 43 minutes, 31 seconds features there uh even in Atherax 7. I think the market will reward better safety products. Uh personally I'm not a big fan of mandating it but it's a much 43:41 43 minutes, 41 seconds larger industry conversation. Uh if ABS is mandated I think uh uh we will obviously prepare for it. uh 43:48 43 minutes, 48 seconds particularly for us uh almost our entire portfolio has front disc brake. uh so some of that cost that would increase 43:55 43 minutes, 55 seconds because of ABS is not uh is is not a challenge. Uh limiting a cost increase only to the ABS module. Uh and we have 44:04 44 minutes, 4 seconds we also developing uh systems like the advanced electronic braking systems. 44:08 44 minutes, 8 seconds Hopefully a mix of these will uh limit the impact on our business if at all. 44:14 44 minutes, 14 seconds Great. Great. That's good to know. I'll come back in. 44:18 44 minutes, 18 seconds Thank you very much. The next question is from the line of Gujan Pritani from Bank of America. Please go ahead. 44:27 44 minutes, 27 seconds Yeah. Hi, thanks for taking my questions. Thanks Tun for sharing um you know the insights on consumer behavior. 44:33 44 minutes, 33 seconds I'm going to just push you to share a little bit more on this. Uh when you know you know you've seen a journey over the last u you know few years. What do 44:41 44 minutes, 41 seconds you think the buyer you know buyer decision making hinges on? Because when the industry started off, it was all 44:48 44 minutes, 48 seconds about TCO, TCO, TCO, but by the look of it, it feels like, you know, it's not TCO. It's lot beyond TCO when they're 44:56 44 minutes, 56 seconds looking at these e- scooters. So, what are the top two or three things that customers come and ask on the showroom? 45:02 45 minutes, 2 seconds And second is a little bit more color on you know how do you see a Karnataka which is a mature scooter market different from an MP uh when when you 45:12 45 minutes, 12 seconds know when these you know is it is it the different models that the customer is looking at um you know a little bit more color on on how the two markets let's 45:21 45 minutes, 21 seconds say are evolving Karnataka versus a relatively more nent MD market. 45:27 45 minutes, 27 seconds Hey, thanks Kungjan for the question on the first question. That's actually part of the big 45:34 45 minutes, 34 seconds big big narrative that we've been trying to land. We've always been a big believer that electric is going to be ultimately driven by product and 45:42 45 minutes, 42 seconds aspiration as opposed to total cost of ownership. Total cost of ownership I think is a post-purchase 45:50 45 minutes, 50 seconds rationalization. I think electric first needs to win you by at the product stage itself and when that happens you will go 45:58 45 minutes, 58 seconds back to your family and you will tell them h you know what like petrol cost me so much more it's like 2 3 rupees a liter 2 3 rupees a kilometer this is 46:05 46 minutes, 5 seconds nothing there's like 10 20 pesa 30 pes you you'll you you will give all those arguments you will feel nice about having made the the better choice 46:13 46 minutes, 13 seconds because it's also logically very strong but I have and we we have been always strong believers that I don't think TCO has been the primary driver. I think it 46:22 46 minutes, 22 seconds was the primary driver many years ago like in the second wave or first wave of electric vehicles when we saw a lot of the low speed electric vehicles dominate 46:29 46 minutes, 29 seconds the horizon. I think yes at that point TC was the primary reason but when the switch happened to targeting the mainstream consumer market I think 46:38 46 minutes, 38 seconds electric has been first and foremost been driven by the appeal and the better product experience and then logically defended by all these arguments. 46:48 46 minutes, 48 seconds uh and I think that is what is driving growth even now when when when when uh a lot of the brands are growing they're growing on the back of very good stable 46:56 46 minutes, 56 seconds products better experiences and I think that will remain true um 47:02 47 minutes, 2 seconds on markets like Kataka and MP obviously MP is a new market for us so obviously our uh more lower-end 47:11 47 minutes, 11 seconds portfolio will dominate sales there uh what's exciting is how the pro pack attach rates are starting to look very similar between a super mature market 47:20 47 minutes, 20 seconds like Karnataka and even MP right now like literally the propack attached delta would be like 10 15 percentages now uh which is uh quite outstanding um 47:30 47 minutes, 30 seconds even on ASPs of the base vehicle itself we do we we are seeing all these signs for example I'll call out like in our 47:38 47 minutes, 38 seconds experience the more mature a dealer is the more vintage a dealer has the more 47:46 47 minutes, 46 seconds likely that they will be able to sell our more higherend products. Uh we see this trend play out even in a market like Uttar Pradesh where some of our 47:53 47 minutes, 53 seconds older dealers are able to sell even 450 in quite decent proportion and not just the higher end of wristas. So I think uh 48:01 48 minutes, 1 second there is a vintage that plays a substantial role. Uh obviously the big difference however between Karnataka and MP is Karnataka is an equal 450 in Rista 48:11 48 minutes, 11 seconds market. MPA is predominantly Arista market which probably is also down to the social uh preferences in these markets. 48:20 48 minutes, 20 seconds Got it. And just I think your dealer being able to sell propack etc. much more is just the confidence when you know initially you're just trying to get 48:28 48 minutes, 28 seconds the numbers and later on you get confidence around the business model as well. But just on pro pack that you uh you know there's so much data that you 48:36 48 minutes, 36 seconds collect through this uh what is the feature that customers really value because there are so many features that you know that a prop pack brings along 48:45 48 minutes, 45 seconds with it but I'm just understanding what is really a functional or you utility features that consumer you know that 48:52 48 minutes, 52 seconds buyers are using when you analyze the data or anything that you can share when you look at the propac uh uh data over 49:00 49 minutes the last couple of So let me just think um for us many of 49:10 49 minutes, 10 seconds our vehicle software vehicle features for example like auto hold uh magic twist uh they are big crowd favorites um 49:20 49 minutes, 20 seconds um the heavily used features would include navigation. I think navigation in the early years for us was a bit of a 49:28 49 minutes, 28 seconds tougher to crack. We had a good product but uh we were still fixing catching up on the hardware. We were still getting the story out. Navigation now sees good 49:36 49 minutes, 36 seconds usage particularly location based uh location based services like uh vehicle tracking uh live location sharing they 49:45 49 minutes, 45 seconds are seeing uh very strong traction actually live location sharing is seeing several thousand a real triggers. We we we remove the accidental triggers and 49:53 49 minutes, 53 seconds then then check for it. Live location sharing is seeing several thousand triggers every every day. Particularly 50:00 50 minutes again as a top of the funnel metric. Uh these are playing very strong roles uh in in in in many relevant markets where 50:08 50 minutes, 8 seconds in markets where safety is critical. A lot of these features are coming together incredibly well to land the point of safety. So you've got uh crash 50:16 50 minutes, 16 seconds alerts, you've got crash detection, you've got uh live location sharing, you are you are talking about theft and tow detection, uh skid control. These set of 50:25 50 minutes, 25 seconds features together paint a very strong safety suite of features to the end consumer and in in in relevant markets they are seeing very strong traction. 50:34 50 minutes, 34 seconds Our channel checks reveal that you know dealers are very happy to sell this as the primary reason to buy the prop pack. 50:40 50 minutes, 40 seconds Then there are some markets where where value is is is uh is is more prioritized and value I say like how much value you 50:49 50 minutes, 49 seconds get out of the product. That is places where things like uh the kind of range you get uh ability to see the the 50:56 50 minutes, 56 seconds accurate range uh uh convenience uh navigation WhatsApp alerts on dashboard they are really prioritized in in sales. 51:04 51 minutes, 4 seconds So there are two three different kind of markets here. Uh in terms of absolute usage, I would say the vehicle software features like auto hold uh uh magic 51:14 51 minutes, 14 seconds twist really dominate uh in addition to maps uh and other safety features. 51:19 51 minutes, 19 seconds Finally, I think we are very very very bullish about our upcoming uh introductions which we've already announced around uh pothole detection 51:27 51 minutes, 27 seconds and pothole alerts sorry and uh um safe parking which is uh predicting where to zones are. I think I I'm really 51:35 51 minutes, 35 seconds optimistic about this coupled with our voice to become a big crowd favorite over the next one two one and a half years. 51:42 51 minutes, 42 seconds Got it. Just last question on the margins. I think you did allude to uh you know you're happy at the place we are in direction it's heading but if I 51:50 51 minutes, 50 seconds were to like sort of think through the next you know 2 years uh how do you see the business uh you know getting to 52:00 52 minutes nebita positive zone in next 2 three years I mean if you can just sort of give us a few drivers to bear in mind is 52:08 52 minutes, 8 seconds it going to be a bit more on the cost uh platform when E platform comes and what do we think from a scale perspective 52:15 52 minutes, 15 seconds because you know the scale has been growing I mean 60 70% growth yon y is a massive number so at what scale we think 52:22 52 minutes, 22 seconds that you know this is a place to be a good place to be where the business can sort of have the operating leverage benefits as well 52:31 52 minutes, 31 seconds yeah I think um the current portfolio should be strong enough to take us to a 52:40 52 minutes, 40 seconds sustainable basis standalone uh to us internally. E always has been the product that drives future growth as 52:50 52 minutes, 50 seconds opposed to a product that we desperately need to get to break even or you know sustainability. Uh and that continues in 52:57 52 minutes, 57 seconds fact if I think that has become an even stronger truth uh given recent quarters performance. Uh so that's how I would see our u that that's how I would 53:06 53 minutes, 6 seconds describe our timeline our our direction of profitability. Basically what I'm saying is operating leverage should be strong enough over the over the coming 53:14 53 minutes, 14 seconds few quarters to take us to a sustainable place. Um even our gross margins you know one thing you will see in our P&L 53:22 53 minutes, 22 seconds is that we we've been extremely disciplined almost paranoid about adding 53:30 53 minutes, 30 seconds fixed costs or adding capex that could drag down our uh profitability. So the 53:37 53 minutes, 37 seconds gap between gross margin eida is actually quite low for us at this scale and as a pure play EV player uh we 53:46 53 minutes, 46 seconds haven't added cost of uh our own stores our own insurance you know our own uh uh logistics on that front we haven't added 53:54 53 minutes, 54 seconds costs of uh uh too much vertical integration u so I think we've kept a reasonably lean P&L and hence our 54:01 54 minutes, 1 second margins our gross margins give a much better payoff at an AIDA and patch than many other P&Ls. Um and yeah, I think 54:10 54 minutes, 10 seconds obviously yield should be a significant step up. Uh that coupled with the new factory uh in Orangabad should really 54:18 54 minutes, 18 seconds elevate uh volumes uh and margins quite a lot over the next couple of years. 54:24 54 minutes, 24 seconds I think uh I I think the EV business should be able to command I believe it should be able to command 54:32 54 minutes, 32 seconds as much or or even a little better gross margin than the ICE portfolios could uh because of the ability to upsell a lot 54:39 54 minutes, 39 seconds of things with EVs particularly around the software and the accessory front. So I remain very bullish about E uh EV gross margins uh at as an industry over the next few years. 54:50 54 minutes, 50 seconds And how does LFP fit in here? Sorry, I'm just squeezing one more question because uh is that something that you you sort 54:57 54 minutes, 57 seconds of think you know help from a profitability perspective or you know your thoughts on where we are heading on the LFP? 55:05 55 minutes, 5 seconds So obviously LFP has supported our profitability has supported our margins. 55:09 55 minutes, 9 seconds Uh we introduced that in by the end of Q1. In Q2 that's become a reasonable part of our uh product mix and will 55:17 55 minutes, 17 seconds continue to increase for another quarter or two. uh and that's definitely helping margins but LFP also plays a dual role 55:23 55 minutes, 23 seconds in our portfolio for us derisking our supply chain and hedging is a very important topic we want to derisk our 55:31 55 minutes, 31 seconds supply chain from a technology perspective from a partner perspective from a geography perspective and Helms's LFP plays that role so it's not just a 55:39 55 minutes, 39 seconds cost improvement it's also it also allows us to ensure that we have both technologies coming often from two different geographies multiple vendors 55:48 55 minutes, 48 seconds in our So we are better prepared for what seems to be an increasingly very volatile world. 55:54 55 minutes, 54 seconds Okay, got it. Thank you so much. 55:59 55 minutes, 59 seconds Thank you very much. The next question is from the line of Kumar from UBS. Please go ahead. 56:07 56 minutes, 7 seconds Yeah, thanks a lot for the opportunity. 56:08 56 minutes, 8 seconds Uh Taran, my question is on the industry side. You in a way spoke about it. Uh but just wanted to understand now that the GST card is behind and you've seen the demand has not got impacted so much. 56:18 56 minutes, 18 seconds uh how would you kind of categorize the industry growth for next year because this year has been marred by supply chain constraints as well. Um the reason 56:26 56 minutes, 26 seconds why I'm asking this is like um there have been multiple launches uh across the industry ramp up of network by you and others. Uh the EV reach has improved 56:34 56 minutes, 34 seconds dramatically year on year but uh the share is kind of stagnant at uh under 6%. So I'm just trying to understand uh 56:40 56 minutes, 40 seconds do we expect a uptrend anytime soon uh where the inflection point comes for uh EV demand uh which can make this 56:48 56 minutes, 48 seconds category more broad-based. I just wanted to hear your broad thoughts on this. 56:52 56 minutes, 52 seconds Yeah. So Premode uh I am in the near term let's say the next uh couple of quarters uh very bullish on industry 57:00 57 minutes growth in uh again it's you'll have to look at state by state on average uh the picture will be complex but states that 57:08 57 minutes, 8 seconds I'm very bullish on are MP Punjab Bihar Kerala uh um uh maybe even Rajasthan uh though 57:17 57 minutes, 17 seconds some though Rajasthan has been a little bit of a slow growing state recently but I'm in the short-term confident about these four five states. Uh the other 57:25 57 minutes, 25 seconds states I think are uh a little difficult to predict the exact timeline of but the early signs of consumer interest and 57:34 57 minutes, 34 seconds intent are very strong. So in the midterm I would be very bullish on all the southern states not just Kerala or Karnataka but all the southern states 57:42 57 minutes, 42 seconds and I would add Maharashtra and UP also to this list. 57:46 57 minutes, 46 seconds um with increasing penetration and particularly in increasing portfolio I think the industry will maintain a good growth trajectory um again if the 57:55 57 minutes, 55 seconds industry has grown almost 15 20% with all these issues I think the growth has to be a little better once the issues 58:01 58 minutes, 1 second are behind us uh starting this quarter so any growth number would you would you predict for next year like can we do 58:09 58 minutes, 9 seconds double dip next year uh or or rather let me put it this way what what should be the EV multiplier over the overall dual industry growth rate is 58:17 58 minutes, 17 seconds it going to be one and a half 2x because it's it's got impacted because of various issues in the last 12 months but as things settle now the GST settles and 58:25 58 minutes, 25 seconds uh ABS regulations come in which I presume EVs can a better position because with under a motor capacity you 58:33 58 minutes, 33 seconds need not have ABS on an electric vehicle. So given all this do you expect the weather where the multiplier to land 58:39 58 minutes, 39 seconds for the EV industry? So I think uh scooters grow at twice the pace of the tool industry and within scooters I I 58:49 58 minutes, 49 seconds believe electric scooters will grow at two to two and a half times the growth of uh scoo of the overall scooter 58:55 58 minutes, 55 seconds market. So that would be a compounding uh multiplier. So this would be about four to five times faster than the overall two wheel industry. 59:04 59 minutes, 4 seconds No good to hear that sir. So second question is on the uh the the the incentives uh as in as a industry we probably didn't have a great last two 59:13 59 minutes, 13 seconds three year in terms of where the category got identified uh or or kind of clubbed along with discounting as a 59:18 59 minutes, 18 seconds perpetual uh uh what do you say uh offer given by most of the companies u which 59:25 59 minutes, 25 seconds has also impacted residual values. How are you seeing the incentives uh trend in the industry from yourself and across competition as well? Uh because that has 59:34 59 minutes, 34 seconds a bearing on a lot of the customers purchase process right uh both in terms of as a as a demand trigger and at the same time also something which kind of 59:41 59 minutes, 41 seconds spoils the resale value for customers who bought it earlier. So how you seeing the incentive trends uh in the category uh kind of evolving sir? 59:50 59 minutes, 50 seconds So we've been very disciplined with the ASPs. If you were to model ASPs from the P&Ls and also from the market data, you 59:56 59 minutes, 56 seconds will see our uh consumerf facing prices on average have been extremely stable. 1:00:02 1 hour, 2 seconds Uh despite introduction of Rrista despite growth of uh its lower-end portfolio uh and that's because on 1:00:10 1 hour, 10 seconds balance we've been able to take relevant price hikes wherever appropriate and wherever market has allowed us because market frankly has given us those 1:00:17 1 hour, 17 seconds opportunities in many zones. Uh so we've been very disciplined on our ASPs and our realizations. Uh we've been never 1:00:24 1 hour, 24 seconds fans of discounting frankly. Uh I think we spent most of our road show during IPO telling people that do not think the discounting season will last. It will go 1:00:32 1 hour, 32 seconds away. It does not pay off. And I think we've seen something very play very similar payoff happen over the last few quarters. I think the entire industry is 1:00:40 1 hour, 40 seconds now calling it out that discounting and selling really low price products does not seem to work, does not seem to get you the right customer. Anyways, uh I 1:00:48 1 hour, 48 seconds think the industry is getting better discipline uh and we glad to see that because we've been always big fans of uh not uh discounting and uh keeping stable 1:00:56 1 hour, 56 seconds prices uh because as a new category and you're you rightfully called it out uh resale prices are massively impacted uh 1:01:04 1 hour, 1 minute, 4 seconds by any discounting action by the industry and the OEMs. So never big fans of it and I think we we we feel a little vindicated, a little validated uh 1:01:13 1 hour, 1 minute, 13 seconds because the industry is kind of moved in the similar direction now. 1:01:16 1 hour, 1 minute, 16 seconds Thanks a lot sir. I wish you all the best. Thank you. 1:01:20 1 hour, 1 minute, 20 seconds Thank you very much ladies and gentlemen. That was the last question. I would now like to hand the conference over to Mr. Muri Shashidharan for closing comments. 1:01:34 1 hour, 1 minute, 34 seconds Uh thank you everyone uh for joining joining us. This uh concludes our conference. Uh so thank you and have a good week ahead. 1:01:45 1 hour, 1 minute, 45 seconds Thank you very much on behalf of Ather Energy Limited. That concludes this conference. Thank you for joining us and 1:01:52 1 hour, 1 minute, 52 seconds you may now disconnect your lines. Thank you.