Escorts Kubota Ltd — Q4 FY26

Escorts Kubota Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=VavKSgGqKn8 Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 and FI26 earnings conference call of Escorts Cubota Limited hosted by Philip Capital India. 0:12 12 seconds As a reminder, all participant lines will be in the listen only 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 0:27 27 seconds zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over 0:34 34 seconds to Mr. Amit Hiranandhani from Philip Capital India. Thank you and over to you Mr. Hanandhani. 0:42 42 seconds Thank you. Good evening everyone. On behalf of Philip Capital India, I welcome you all to Escorts Kobota Q4 and 0:49 49 seconds FI26 earnings conference call. I take this opportunity to welcome the management team from Escorts Kobota 0:56 56 seconds Limited. Today we have with us Mr. Bhat Mad whole-time director and chief financial officer. Mr. Nirj Mahara, 1:03 1 minute, 3 seconds chief officer of tractor business division. Mr. Sanjiv Baj, chief officer of construction equipment business 1:10 1 minute, 10 seconds division. Mr. Rajan Chuk, chief officer of tractor kubota brand and agri solutions business. Mr. Sanjie Ger, head 1:19 1 minute, 19 seconds head of penance and CPMO and Mr. Pratik Singal investor relations and ESG. 1:26 1 minute, 26 seconds Before we start, I would like to add that some of the statements made by the company in today's call will be forward-looking in nature and are 1:33 1 minute, 33 seconds subject to risk as outlined in the annual report and investor releases of the company. Now I hand over to the management for their opening remark. 1:42 1 minute, 42 seconds Thank you and over to you Pratik. 1:45 1 minute, 45 seconds Thank you Amit. Good evening everyone and thank you all for joining us today. 1:49 1 minute, 49 seconds During the quarter, India's macroeconomic environment remained broadly supportive, marked by moderate inflation, a softer interest rate 1:57 1 minute, 57 seconds outlook and positive sentiment across both rural and urban market. However, global geopolitical development, particularly the ongoing conflict in the 2:05 2 minutes, 5 seconds West Asia continue to cause challenges resulting in higher input and logistics cost due to disruption in global shipping route. Additionally, the depreciation of the Indian rupees 2:13 2 minutes, 13 seconds against the US dollar further escalated cost pressure. In this operating environment, our focus remain firmly on delivering profitable growth and 2:20 2 minutes, 20 seconds discipline cost management. We remain confident in the underlying demand fundamentals of our core business in the near term and will continue to focus on 2:28 2 minutes, 28 seconds driving operational efficiencies and prudent capital allocation to create long-term value for all our stakeholders. We trust you had an 2:36 2 minutes, 36 seconds opportunity to see the results and the earnings presentation uploaded to the stock exchanges. Let us now walk you through our key financial state uh highlights of the company's standalone 2:44 2 minutes, 44 seconds financial performance for the quarter ended March 2026. Uh operating revenue from continuing operation as 2950.7 2:52 2 minutes, 52 seconds crores up by 21.4% yearonear. IATA is 386 uh crores up by 31.8% yearonear. The 3:01 3 minutes, 1 second Ibita margin in Q4 at 13.1% up by 103 basis point YI PBT from continuing operation before exceptional item at 3:09 3 minutes, 9 seconds 433.8 K up by 21.1% yearonear net profit p from continuing operation stood at 324.8 3:18 3 minutes, 18 seconds crores up by 29.6% 6% Y. Please note that Q4 of the previous year include an adverse impact of rupes 27.1 crores on 3:27 3 minutes, 27 seconds the account of impairment of the investment in an overse subsidy and a joint venture in India. Excluding this onetime impact, net profit grow by 20% 3:35 3 minutes, 35 seconds YI EPS from continuing operation as 29.52 rupees as compared to 22.79 rupees Y. 3:43 3 minutes, 43 seconds Reputed reported pet including discontinued operation up by 9.2% Y. 3:48 3 minutes, 48 seconds Some highlights of our standalone financial performance for the year ended March 2026 are as follows. Highest ever operating revenue from continuing 3:56 3 minutes, 56 seconds operations at rupes 11,472.8 crores up by 12.6% YI. Highest ever 4:03 4 minutes, 3 seconds tractor volume at 1 lakh 33,670 units up by 15.7% Y. Construction 4:09 4 minutes, 9 seconds equipment volume came at uh 5,794 units. Highest ever IITA at 1,513 KES up 4:18 4 minutes, 18 seconds by 28.5% Y margin at 13.2% up by 163 basis point Y PBT before exceptional 4:25 4 minutes, 25 seconds item from continuing operation at 1,85.5 cr highest ever up by 32.1% Y highest 4:33 4 minutes, 33 seconds ever net profit after tax from continuing operation at 1,380.9 crores up by 24.4% 4% as against 1,110 4:42 4 minutes, 42 seconds crores in the previous fiscal. Earning per share from continuing operation at 125.52 rupees up uh for the year by to 4:51 4 minutes, 51 seconds 24.3% as against 100.96 rupees in the previous fiscal. The board has recommended final dividend of 330% 4:59 4 minutes, 59 seconds for the financial year 26 equivalent to 33 rupees per share with the special dividend of rupes 18 per share already 5:07 5 minutes, 7 seconds paid. The total payout for FY26 will be 20 51 rupees per share for a face value of 10 rupee each. An increase of 82% 5:15 5 minutes, 15 seconds compared to the previous year. Payout ratio excluding profit for exceptional item is at 26.3%. 5:21 5 minutes, 21 seconds Pat excluding discontinued operation at 248.6 cr on consolidated basis. Company 5:28 5 minutes, 28 seconds financial performance for the year ended March 2026 are as follows. Revenue from continuing operations at 11,540.3 5:37 5 minutes, 37 seconds Kors up 12.7% yearonear IITA at 1,496.4 5:44 5 minutes, 44 seconds K with a margin of 13% up by 15 159 basis point Y reported net profit from 5:50 5 minutes, 50 seconds continuing operations at rupees 1,366.4 K up 21.6% 6% YI net profit including 5:58 5 minutes, 58 seconds discontinued operation and exceptional item at 2394.1 crores YI moving on the segmental 6:06 6 minutes, 6 seconds business performance in FY26 the domestic tractor industry grew by 23.4% yearonear reaching an all-time high of 6:14 6 minutes, 14 seconds 11.6 lakh unit compared to 9.4 lakh unit in FY25. This robbert's industry growth was supported by healthy ruler sentiment supported by strong farm income. 6:25 6 minutes, 25 seconds Favorable and well distributed monsoon along with adequate water level reservoir a strong crop production and higher MSPs minimum support price 6:33 6 minutes, 33 seconds reduction in GSC rate as pace of farm mechanization driven by government initiative and state level subsidiary program. Beyond near near-term driver, 6:42 6 minutes, 42 seconds long-term fundamental for the tractor industry remains strong. Low mechanization penetration relative to global benchmark, rising ruler wages, 6:49 6 minutes, 49 seconds labor shortage during peak agriculture season, and the increased need for time efficient farming practice continue to underpin sustainable demand for tractor 6:57 6 minutes, 57 seconds and farm machinery. Our domestic tractor volume at 1 lakh 26,994 units highest travel up by 14.9% Y. As 7:06 7 minutes, 6 seconds compared to the industry, our performance were moderated by regional demand variation. Growth in north and the central region, our strong market 7:15 7 minutes, 15 seconds was around 17% whereas other reason witness a growth closer to 30%. 7:19 7 minutes, 19 seconds Additionally, the limited availability of 13 key new models introduced during the year impacted our ability to fully 7:26 7 minutes, 26 seconds capitalize on demand. During FYI 26, we place a strong emphasis on excelling excellence with a clear focus on 7:33 7 minutes, 33 seconds improving retail conversion, expanding market reach and enhance on ground responsiveness. A key player of this effect was the uh deepening our 7:41 7 minutes, 41 seconds financial partnership as well as launch of our captive finance business. We strengthen engagement with both national and regional financial, reducing 7:49 7 minutes, 49 seconds approval turnaround time at the dealership level and introduce more customized financing solution aligned to specific customer profile. These 7:57 7 minutes, 57 seconds initiatives support higher retail throughput and improve conversion across market. We strengthen our dealer engagement and capability building 8:04 8 minutes, 4 seconds through sharper retail monitoring, target training program for new product platform, focus incentive structure during pe demand period and close 8:12 8 minutes, 12 seconds collaboration on inventory and supply planning. These action enhance dealer confidence, improve product availability in key micro market and enable us to 8:19 8 minutes, 19 seconds manage regional demand variation more effectively. FY 26 mark a significant year in our product journey with a comprehensive product portfolio refresh 8:28 8 minutes, 28 seconds aligned to evolving customer need crop specific application and regional requirement. Key launch during the year strengthen our presence across core 8:35 8 minutes, 35 seconds premium and application specific segment receiving encouraging market response. 8:40 8 minutes, 40 seconds We continue to invest in innovation platform renewal and fast go to market cycle with several new product introduction plan for FI27 reouncing our 8:48 8 minutes, 48 seconds commitment to sustain growth and market competitiveness. Looking ahead, we expect the current industry momentum to sustain in the near term. However, 8:56 8 minutes, 56 seconds geopolitical development, polical potential supply chain disruption and rising input costs could moderate farmer affordability and sentiments in the 9:04 9 minutes, 4 seconds short term. Additionally, evolving weather pattern particularly emerging elino signal will remain a key moderatable influencing future demand 9:11 9 minutes, 11 seconds trend. On export front, the tractor industry in FI26 was at 1 lakh 5,000 tractors up by 7% as compared to 98,800 9:20 9 minutes, 20 seconds tractors in FI25. Our export volume stood at 6,676 tractor up by 33.8% as against four 9:29 9 minutes, 29 seconds 4,991 tractors. Uh in the previous year, sales through Kobota global channel account for approximately 60% of the total 9:37 9 minutes, 37 seconds export. Non- sector revenue comprising agree solution business, engine business and the service and spare part business in FY26 constitute 18% of agree 9:45 9 minutes, 45 seconds machining segment revenue as against 20% in the previous year. During the year under agree solution we introduced nextgen KA6 and K9 RON transpler in 9:55 9 minutes, 55 seconds engineer in Japan with deliver higher productivity superior planning precision and improve operation comfort. These models are well aligned with the acceleration shift towards pan 10:03 10 minutes, 3 seconds mechanization driven by labor shortage and government's support particularly across Asia and benefit from global trend showing strong adoption of 10:11 10 minutes, 11 seconds mechanized transplanting for improved efficiencies and yield. Going forward we remain focused on expanding our advanced 10:18 10 minutes, 18 seconds agree agree machinization portfolio leveraging Japanese engineering to bring differentiated productivity enhanced solution to the market. Agree machinery 10:27 10 minutes, 27 seconds product segment revenue at uh for the year ended FY26 at 9,799.6 10:33 10 minutes, 33 seconds cr up by 15.8% as again 8,447.2 crores in the previous year. EIT margin for the agree machinery business were up 10:42 10 minutes, 42 seconds by 190 basis point at 12.6% as again 10.7% in the previous year led by easing material cost better operating leverage and cost control measures. 10:52 10 minutes, 52 seconds Coming on to the construction equipment business in FY26 was the year of transmission transition for the construction 11:07 11 minutes, 7 seconds by a combination of extended monsoon slower project mobilization during the first half and a broader normaliz and broader normalization in demand 11:14 11 minutes, 14 seconds following and the early search. As a result, serve industry volume across crane, back loader, mini excavator and compactor was declined by around 7 odd% 11:23 11 minutes, 23 seconds while mainly led by 13% decline in the construction uh in the crane segment, 10% in the back loader segment while mini excavator and compactor grew by 38 11:31 11 minutes, 31 seconds and 5% respectively. Our construction equipment volume stood at 5,794 machines down 10.6% yearonear. 11:41 11 minutes, 41 seconds Throughout the year, we remain firmly focused on long-term competitiveness, operational discipline and protecting the strength of our p franchise while 11:49 11 minutes, 49 seconds continuing to invest selectively in the capability critical for future growth. 11:53 11 minutes, 53 seconds As the year progressed, industry condition improved sequentially. The extent of the growth moderate throughout the first three quarter ending the year 11:59 11 minutes, 59 seconds with the growth assuming in resuming into Q4 FY 26. During the quarter, the serve industry in Q4 grew by 4% while 12:08 12 minutes, 8 seconds our volume increased by around 92 9% Y to 1,877 machines allowing us to perform the better as compared to industry and 12:17 12 minutes, 17 seconds gain market share. This performance was supported by improved execution, better channel throughput and gradual stabilization demand environment. 12:24 12 minutes, 24 seconds Construction equipment segment revenue for the quarter came at 556.5 crores up by 22.6%. Y IATA margin came 12:32 12 minutes, 32 seconds at 12.7% up by 386 basis point Y le led by leveraging operating leverage improve cost discipline and more favorable uh 12:41 12 minutes, 41 seconds product mix during the year we continue our strength of a construction equipment focus and we introduced Kubota K U26 12:48 12 minutes, 48 seconds mini excavator operating advanced precision and compact for performance for one and the confide space projection. We also showcase Hydra 15 12:56 12 minutes, 56 seconds mining BLX75 back loader and also show showcase the concept line of Hydra 72 crane representing a significant step in 13:04 13 minutes, 4 seconds the high reach lifting with new 72 port boom and enhanced safety system. These product action reform our long-term commitment to engineering in depth. 13:13 13 minutes, 13 seconds Looking ahead, we believe the fundamental drivers of the construction equipment industry remain intact. 13:18 13 minutes, 18 seconds Continuous emphasis on the public infrastructure development, improving visibility on product awarding and increased focus on urban infrastructure, 13:25 13 minutes, 25 seconds mining and industrial activity prove a supportive medium-term demand uh backdrop. Additionally, evolving geopolitical development are 13:33 13 minutes, 33 seconds reforcessing the importance of the domestic infrastructure creation and supply chain resilience which should structurally benefit the sector over 13:41 13 minutes, 41 seconds time. At the same time, we remain mindful that the geopolitical uncertaintity may lead to a temporary supply chain disruption, volatility in 13:49 13 minutes, 49 seconds the input cost and potential pressure on the pace of the government capital expenditure. We will continue to closely monitor these external risk while 13:56 13 minutes, 56 seconds maintaining flexibility in operation and cost fixture. Now we'll request the moderator to open the floor for the Q&A. 14:05 14 minutes, 5 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. 14:15 14 minutes, 15 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 14:23 14 minutes, 23 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 14:40 14 minutes, 40 seconds The first question is from the line of Ganjan Pritani from Bank of America. Please go ahead. 14:47 14 minutes, 47 seconds Yeah. Hi, thanks for taking my question. 14:49 14 minutes, 49 seconds My first question is on the um industry growth outlook. Uh you did mention a couple of things that the momentum is 14:56 14 minutes, 56 seconds sustaining but the external risk are there. How uh are you internally planning for fiscal 27 for the tractor 15:05 15 minutes, 5 seconds industry growth and there are a bunch of new products that you've launched in the last uh couple of quarters. Can you also 15:12 15 minutes, 12 seconds talk us through uh you know uh a bit more on those products and how they can just you know they can sort of help 15:20 15 minutes, 20 seconds strengthen the market share uh uh market share improvement uh going forward. 15:30 15 minutes, 30 seconds Hi and good evening. This is Nail. 15:33 15 minutes, 33 seconds Uh so uh as already mentioned in the opening comments uh uh we expect uh the industry to taper down uh over the next 15:41 15 minutes, 41 seconds few months. The overall guidance uh for uh physical year 27 is kind of a flattish industry 2 3% up 2 3% down. 15:50 15 minutes, 50 seconds That is what currently uh we are looking at. Uh overall from uh the tractor business perspective uh I think we are 15:58 15 minutes, 58 seconds very confident uh over the last uh few months uh there have been uh product launches across the three brands and few 16:06 16 minutes, 6 seconds other launches are planned uh over the next 3 four months plus uh we have uh utilized the last year in uh taking 16:14 16 minutes, 14 seconds certain corrective actions and developing the channel. So both uh from the channel perspective uh as well as uh 16:22 16 minutes, 22 seconds on the product side uh we are well placed uh certain product uh gaps have been covered uh covered. So uh financial 16:30 16 minutes, 30 seconds year 27 from a market share perspective uh and volume perspective looks pretty positive irrespective of uh the outlook of the industry. 16:42 16 minutes, 42 seconds Okay. If it's fair to assume that you we you know we we are confident of a positive growth irrespective of whether industry is a mile difference. 16:50 16 minutes, 50 seconds Absolutely. Absolutely. So so the the the products will actually help us tremendously. There were major product gaps. So uh you would have uh I had 16:59 16 minutes, 59 seconds spoken in the last call also. So we have uh introduced uh the patty special tractors for the southern markets which 17:07 17 minutes, 7 seconds was a major gap. uh and uh it's early days yet but the bleed in south in terms 17:14 17 minutes, 14 seconds of market share has uh started to drop and we this year we intend to see uh or 17:22 17 minutes, 22 seconds we will see a gradual increase in market share in these markets plus certain um I'm it will be uh not prudent for me to 17:30 17 minutes, 30 seconds speak on the new product launches but certain other uh product gaps we intend to cover over the next 3 to four months. 17:37 17 minutes, 37 seconds So uh we are actually pretty confident from the uh new product perspective side. 17:44 17 minutes, 44 seconds Can you also you know talk a bit about uh you know specifically on the Kobota brand scale up that was um you know that 17:52 17 minutes, 52 seconds was anticipated in terms of expanding the geo reach trying to uh uh you know re uh reconfigure the product so that 18:00 18 minutes rising is more suitable for Indian market. Where are we on that uh journey as far as the Kubota brand goes? 18:12 18 minutes, 12 seconds Uh Rajan Son can you answer? 18:14 18 minutes, 14 seconds Yes sure thanks for the question. So uh well uh on Kubota brand uh we we have 18:21 18 minutes, 21 seconds both agree solutions and tractors. Uh we uh kind of position ourselves there. In terms of practice when we talk you're 18:29 18 minutes, 29 seconds right uh we we've had some gaps and this year we are uh poised to launch multiple products to plug plug some of those gaps 18:38 18 minutes, 38 seconds and quite uh update about uh you know uh improving uh position in the market uh with the Kubota brand as well as like 18:46 18 minutes, 46 seconds Pratik mentioned earlier on agri solutions we uh last two years we've been launching newer products newer technologies and this year as well we 18:54 18 minutes, 54 seconds are planning to expand our portfolio in harvesting uh segment as well as planting segment. So yeah uh both 19:02 19 minutes, 2 seconds incoming quarter and uh little later part of the year we have uh quite a robust pipeline of products getting introduced uh this year. 19:13 19 minutes, 13 seconds Got it. And my last question um is on the margin uh performance. It clearly seems uh a bit underwhelming when I look 19:22 19 minutes, 22 seconds at the quarteronquarter a bit margin uh decline. uh can you uh give us some color on how you know what should happen 19:31 19 minutes, 31 seconds in this quarter and how should we think directionally because I'm assuming a lot of cost pressure from steel hasn't showed up in this quarter right so how 19:40 19 minutes, 40 seconds what explains the uh performance in this quarter and bit bit more color on the outlook for next year 19:50 19 minutes, 50 seconds there was a bit of obviously 19:52 19 minutes, 52 seconds [clears throat] 19:53 19 minutes, 53 seconds some pressure had come on the inflation side but was much in this quarter as you mentioned. I think most of it will happen in the coming quarter. So it's 20:01 20 minutes, 1 second mostly issue on the mix side with the new product sale actually had gone up and there's also some increase in the non- product sales non-tractors revenue 20:09 20 minutes, 9 seconds slightly was up. So because the margins are lower compared to the tractor business so that's why yearon year see there's a marginal dip but it's not 20:18 20 minutes, 18 seconds significant. I think it's more or less 1% if if you compare year on year on the bit model for every business though compared to the QC or the QC was the 20:26 20 minutes, 26 seconds operating leverage the volume was way higher and which is normally the case but going forward we do see pressure will be there on the committee side 20:34 20 minutes, 34 seconds because we're still getting lot of we face from suppliers for the passing on of input cost increases I know procurement team is still in discussion 20:42 20 minutes, 42 seconds to finalize those numbers but I'm sure uh it's going to be significant in the coming two orders to wait and watch and 20:50 20 minutes, 50 seconds see you know how this geopolitical situation really emerges and how much risk we are able to pass on to the market 20:58 20 minutes, 58 seconds and on a fiery year basis can we keep it flattish or do you see that there probably some hit in on a full year basis 21:07 21 minutes, 7 seconds so depends certain costs which are going to be permanent especially their cost related to energy and manpower so as you know in hana the minimum wages have been 21:15 21 minutes, 15 seconds increased by almost 35% for contract levels And in UP also where our larger vendor base is situated there also the 21:21 21 minutes, 21 seconds cost has gone up by almost 22 23%. So this is something which obviously will be a permanent increase. So this is also 21:28 21 minutes, 28 seconds going to impact our margin a bit. So even though on the commodity side we expect even if there's a temporary increase it will come back hopefully 21:36 21 minutes, 36 seconds once the situation improves but the process costs which are getting passed on especially on the energy side or on the manpower side these probably will 21:45 21 minutes, 45 seconds not come back. So as you know we had taken marginal price increase in the in the last month and in this month in April to tackle those you know some of 21:54 21 minutes, 54 seconds those cost increases but again we'll have to really see so effort will be to maintain the margin on a full year basis but obviously it's too too early to talk 22:02 22 minutes, 2 seconds about that unless we know how the geopolitical situation really emerges. 22:07 22 minutes, 7 seconds Got it. Thank you so much. I'll run back to you. 22:13 22 minutes, 13 seconds Thank you. Next question is from the line of Ragu Nandan from Noama Research. Please go ahead. 22:22 22 minutes, 22 seconds Uh good evening team and thank you for the detailed uh opening remarks. Uh 22:28 22 minutes, 28 seconds firstly to uh uh Ner sir uh sir can you uh talk about the region wise 22:35 22 minutes, 35 seconds performance which regions should be relative outperformers or underperformers in FI27 22:42 22 minutes, 42 seconds and how will that be uh uh beneficial for escorts. 22:49 22 minutes, 49 seconds Yeah. Hi Rahu. Uh thank you for the question. So uh a bit on uh first on financial year 26. So if you see the uh 22:59 22 minutes, 59 seconds industry growth in the northern and the central part of the country uh in the last physical as also mentioned by Pratik was uh close to 16 17%. Which are 23:08 23 minutes, 8 seconds our stronger areas and uh in the western part and in the southern part of the country otherwise the overall growth was 23:15 23 minutes, 15 seconds about 30%. West was uh to a very large extent uh driven by subsidies. Uh and we 23:24 23 minutes, 24 seconds feel that financial year 27 should be from a industry perspective uh should be to a certain extent good 23:32 23 minutes, 32 seconds from EKL's perspective because the growth uh in the last physical has not been uh in line with the overall growth 23:39 23 minutes, 39 seconds of the industry in the northern and uh the central part of uh country. So uh to answer specifically to your question I 23:47 23 minutes, 47 seconds think uh overall as we have mentioned uh a flattish uh outlook um or a marginal 2 23:53 23 minutes, 53 seconds 3% growth uh for financial year 27 the major uh hit will actually come uh in terms of industry in the western part 24:02 24 minutes, 2 seconds and the southern part of the country uh north should be more or less stable uh 24:09 24 minutes, 9 seconds or no growth kind of a scenario. So that is on the regional outlook noted sir. So the new products plus the 24:18 24 minutes, 18 seconds favorable uh regional outlook both should be positive for escorts in uh growing volume and uh uh m great gaining market share for FI27. 24:30 24 minutes, 30 seconds Yeah we are confident on that. 24:34 24 minutes, 34 seconds Uh thank you sir. Uh my second question is to Rajan sir. Uh sir the nontractor 24:42 24 minutes, 42 seconds share in agree segment is a meaningful part. Can you indicate uh what kind of a growth you expect in farm implements in 24:50 24 minutes, 50 seconds fi27 or the next 2 three years due to rising mechanization and also for the 24:57 24 minutes, 57 seconds kubota under the kubota brand tractors were expected with escorts engines when is this expected to happen? 25:08 25 minutes, 8 seconds So uh thanks uh Rau is Rajan here. Uh so your first question on the agree mechanization uh far machinery other 25:17 25 minutes, 17 seconds than tractor. So uh as uh we've also talked about uh in past 3 years we've been growing a pretty robust 35% plus 25:26 25 minutes, 26 seconds kind of a CGI and we continue to look at this segment uh you know uh at least in 25:34 25 minutes, 34 seconds uh 20 20% plus kind of the next 3 years outlook uh largely because it's uh the kind of product pipeline we have and the 25:43 25 minutes, 43 seconds channel we are expanding also the newer products which we'll be introducing every year uh uh and we've kind of uh you know consolidating our position in 25:51 25 minutes, 51 seconds harvesting segment which is second to uh tractors when it comes to mechanization um both in terms of volume and uh size 26:00 26 minutes of the market. Now coming to tractors uh so I I won't uh want to talk about specific uh timeline on uh localization 26:10 26 minutes, 10 seconds but we continue to improve uh and introduce newer products. uh this year we almost uh planned about eight or 26:19 26 minutes, 19 seconds nine newer products with uh three or four uh new segments we'll be covering when it comes to tractors and uh 26:27 26 minutes, 27 seconds similarly next year also we have a decent pipeline uh of products coming in uh to fill the gap and improve our 26:34 26 minutes, 34 seconds position uh in practice but yeah I mean uh we are uh kind of inre increasing or 26:41 26 minutes, 41 seconds improving our localization of uh components and uh products in India uh in both segments uh machinery and uh tractors. 26:50 26 minutes, 50 seconds Thank you. 26:52 26 minutes, 52 seconds Uh thank you Rajin sir. Uh lastly to Barat sir uh sir uh uh you indicated about the commodity inflation 27:01 27 minutes, 1 second approximately how much is the commodity impact uh expected in the near term as a percentage of sales how much price hike 27:10 27 minutes, 10 seconds was taken in April would it be around 10,000 per unit and how much more is required 27:18 27 minutes, 18 seconds the commodity right now like you mentioned is still not finalized but there is still negotiation happening by the procurement team with all the 27:25 27 minutes, 25 seconds suppliers but the indication we getting is varying because depends on commodity to county like tire suppliers are asking 27:32 27 minutes, 32 seconds for 15 20% hike steel is already gone up by 7 8% but we seen in the construction equipment space the base metal both 27:40 27 minutes, 40 seconds copper aluminium mar we're seeing the similar double digit pressure and then there are processed costs so so we don't know where it will really end but uh I 27:48 27 minutes, 48 seconds think our feeling is it will be somewhere five six% sort of cost increase can happen. The question is how much we will pass it on now or how it will be passed 27:57 27 minutes, 57 seconds on in next quarter to the supplier and how much of this can be further passion to the market to customers. So like you 28:04 28 minutes, 4 seconds mentioned so we had taken about one and a half% s of price increase in across various brands on tractor side and also 28:12 28 minutes, 12 seconds on construction equipment side. Uh but this is not really sufficient to take care of any of these pricing fees. So we 28:20 28 minutes, 20 seconds are still talking to many other players you know and also suppliers to see how much because there are many costs which are onetime impact these are not a 28:27 28 minutes, 27 seconds leering sort of cost. So they're cost in terms of like someone not getting LPG supplies so they're paying higher prices to get those continued supplies so that 28:36 28 minutes, 36 seconds the supply chain is not disrupted but these are oneoff costs which per can be negotiated and amortized over a longer period of time rather than taking in one 28:44 28 minutes, 44 seconds quarter but that's like something is too early to talk about. So we'll obviously try to minimize the impact and it will not be different from what maybe the 28:52 28 minutes, 52 seconds others uh in the auto industry will release also. 28:58 28 minutes, 58 seconds Uh noted sir just a clarification five 6% would be as a percentage of revenue or the increase in RM basket. 29:07 29 minutes, 7 seconds So revenue RM is much higher because all metals waste metals everywhere is double digit sort of inflation 29:14 29 minutes, 14 seconds and uh lastly capex and investments expected for FI275 capex normal capex is in the range of 29:22 29 minutes, 22 seconds 350 400 crores only. So last year also I think we spent about 311 course on total capacity as a cash flow. Obviously green will be additional because the green 29:30 29 minutes, 30 seconds field is going to be large investment which we expect should be I think this year will be only about roughly 500 crores somewhere around that. So this 29:39 29 minutes, 39 seconds will include your land development bond etc. So the land initial payment we already made and the balance payment will happen within this quarter. 29:50 29 minutes, 50 seconds in investment into uh captive finance division. How much has it been so far and uh how much more is required? Sorry, that's the last question. 30:00 30 minutes So, so far we had invested 200 crores in the capital and additional approval was taken for additional 500 crores. Uh but obviously we are injecting as and when 30:08 30 minutes, 8 seconds they need it. So by the year this year end we expect maybe additional 300 crores will go and balance 200 will go next year. 30:17 30 minutes, 17 seconds This also depends on the portfolio and how much am they are able to maintain and grow. 30:24 30 minutes, 24 seconds Many thanks sir. I'll fall back to the queue. 30:30 30 minutes, 30 seconds Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star N1. 30:39 30 minutes, 39 seconds Next question is from the line of Tammud Ae from Incred. Please go ahead. 30:45 30 minutes, 45 seconds Yeah. Hi. Uh thanks for taking my question. So the first one is with regard to the tractor industry outlook. 30:51 30 minutes, 51 seconds Uh when you are talking about the flattish or 2 3% uh what is the type of quarterly volatility you are looking at 30:57 30 minutes, 57 seconds and what's the exit type of a considering it's a high base in the second half. 31:07 31 minutes, 7 seconds So hi uh N again this side. So uh see uh last year uh the overall growth was 23% but quarter 1 uh the growth was very 31:16 31 minutes, 16 seconds subdued uh it was about 9%. So uh I think we will see a growth uh in this year uh sorry in this quarter and then 31:25 31 minutes, 25 seconds this growth will uh to a certain extent taper down and H2 would be a substantial negative growth because the base is very 31:34 31 minutes, 34 seconds very high. also the impact uh of uh the monsoons wherein the forecast has been a 31:41 31 minutes, 41 seconds subnormal uh monsoon this year. So uh the impact will also come in H2. So H2 31:48 31 minutes, 48 seconds would probably be a substantial degrowth basis these reasons uh but uh H1 should be at par kind of a uh scenario. 32:00 32 minutes So in that context uh the FI28 again uh it will be a challenging to turn around from a negative growth second half into 32:08 32 minutes, 8 seconds a positive territory or you feel it will all again depend on the monsoons. 32:13 32 minutes, 13 seconds See uh see uh know the industry uh tractor industry has to has been kind of cyclical. So if you look at the industry 32:20 32 minutes, 20 seconds over the last uh 8 years so leaving aside the last year um it has been alternated in a growth and a degrowth. 32:29 32 minutes, 29 seconds So one year it's been it grows the next year it degrosses then it grows it degross. So over the last uh 8 years or 32:36 32 minutes, 36 seconds 9 years that has been the cycle. Yes the growth has been higher than the degrowth of the previous year. So uh we feel uh 32:45 32 minutes, 45 seconds so it's very early to comment on financial year 28. uh but uh financial 32:51 32 minutes, 51 seconds year 27 even after uh our um guidance of a flattish kind of an industry would be 32:58 32 minutes, 58 seconds still be a very very high base of uh 11.6 11.5 11.7 and a 11.75 lakh 33:05 33 minutes, 5 seconds industry. So that is the scenario. So it's very early to comment on financial year 28 but uh it's nothing new. It's it's a cyclical industry and that has 33:13 33 minutes, 13 seconds been the norm over the last uh 8 years except the last year which has been an exception. 33:20 33 minutes, 20 seconds Yes. Second with regard to uh considering that there are series of new products which are coming in and you are replacing the old one. wanted to get uh 33:28 33 minutes, 28 seconds some thoughts in terms of how is your R&D spend that changed post Kota coming on board and what is the extent of help 33:36 33 minutes, 36 seconds you are getting from the global partner or it's all developed still from the Indian context 33:45 33 minutes, 45 seconds see the major cap which are increased on the product side only so I think out of 300 350 coursees majority of this will go on the product development side so 33:54 33 minutes, 54 seconds even last year almost 200 course would have spend on the product development and and next year also be 200 to 250 crores will continue to be spent on 34:02 34 minutes, 2 seconds this. So as as the thing we mentioned in the pipeline our product portfolio is quite strong and new launches will happen across all brands across both the 34:12 34 minutes, 12 seconds businesses. So obviously these sprints will continue any handolding by kibota here or it's 34:19 34 minutes, 19 seconds predominantly done from the uh Indian itself. So there are certain projects which are totally done locally uh 34:27 34 minutes, 27 seconds especially in our own platform our own brand but there are certain projects which are running jointly with Kota R&D team and they also helping us like this 34:34 34 minutes, 34 seconds patt special tractor their involvement was also there because Kota is specialist in the patt tractors so so their team also is involved any 34:42 34 minutes, 42 seconds development happening on the kota brand obviously their team is equally involved so so in agree solution they are equally involved so it's a it's a mixed development so depending on which 34:51 34 minutes, 51 seconds product which platform we are working on and then accordingly both the teams contribute. 34:57 34 minutes, 57 seconds Sure. Thanks a lot. 35:03 35 minutes, 3 seconds Thank you. Next question is from the line of Aayushan LD virtual investor. Please go ahead. 35:10 35 minutes, 10 seconds Good evening sir. So my question is what percentage of global cubota sourcing will shift to India by FI30? 35:22 35 minutes, 22 seconds You don't know how much of their global sourcing will shift but obviously our plan is is good. So so I think by FI30 35:30 35 minutes, 30 seconds so last year was not very high. I think there's some uh new production which was supposed to start did not start because some quality issues. So that was delayed 35:39 35 minutes, 39 seconds but now I think we started exporting in the in the last quarter there. So so but anyway between maybe 500 to,000 co sort 35:47 35 minutes, 47 seconds of number should happen by fi 30 on component export from India. 35:52 35 minutes, 52 seconds Okay sir. And where will ROI improvement come from? Will it from margins or capital allocation on asset terms? 36:02 36 minutes, 2 seconds Sorry. What will come from improvement? 36:06 36 minutes, 6 seconds It was discussed and I see okay [clears throat] no so it'll be essentially the orbiting leverage it will be at play and also the cost effort 36:13 36 minutes, 13 seconds because the company is working on cost isolation equally both on the productivity improvement efficiency improvement on the shop floor. So we 36:21 36 minutes, 21 seconds introduce quota production system on the line and that is going to help in further improving productivity and and improve quality. So I think all these 36:30 36 minutes, 30 seconds factors will lead to gradual improvement in the cost structure and we also looking at rasterizing multiple product platforms to reduce our supply chain uh 36:38 36 minutes, 38 seconds complexity. So I think all these parameters will help us in reducing costs and and improving our margins and reducing capital too both on inventory 36:47 36 minutes, 47 seconds side as well as on the on the supplier too. Okay sir that's all from my side. 36:58 36 minutes, 58 seconds Thank you. Ladies and gentlemen, anyone who wishes 37:06 37 minutes, 6 seconds to ask a question, please press star and one. Next question is from the line of vir 37:15 37 minutes, 15 seconds investments. Please go ahead. Hello. 37:23 37 minutes, 23 seconds You're audible, sir. Please proceed. Yes. 37:26 37 minutes, 26 seconds uh thank you for the opportunity. So I would like to know uh the results have been quite good for this year and uh uh 37:36 37 minutes, 36 seconds base created for the current year is quite high. So next year it is definitely likely to be a flattish year for the tractors but construction 37:45 37 minutes, 45 seconds equipment and earlier we had the railways. Now the railways [clears throat] we have divested of the business and uh we have the money 37:53 37 minutes, 53 seconds sitting in the balance sheet now but um the construction equipment last year was uh uh underperformer because of the 38:01 38 minutes, 1 second various results but um what is the outlook for the construction equipment uh going forward because last year our capacity utilization has been only 47%. 38:14 38 minutes, 14 seconds And uh so it had affected. Now the mini excavators which uh you were quite 38:22 38 minutes, 22 seconds bullish last time also whether these uh cranes and mini excavators um are likely to do well in the current year. 38:33 38 minutes, 33 seconds Yeah. Hi Sam Sanji Vijide I audible. Yes. Yeah. So uh two parts of your question. 38:42 38 minutes, 42 seconds uh first is uh uh last year has been little subdued. Yes, we I mean we've seen some difficult times in the last 38:50 38 minutes, 50 seconds year as far as the overall industry is concerned. Uh both uh overall construction equipment industry as well as our subserved industry has gone 38:58 38 minutes, 58 seconds through some tough time uh last year and you know having said so I mean it is uh compared to a base which was much higher last year the base was also very high. 39:09 39 minutes, 9 seconds Now um uh what is our anticipation of the industry that you know this year uh 39:16 39 minutes, 16 seconds had there not been these uh uh West Asia prices challenges and supply chain issues we would have seen some u you 39:25 39 minutes, 25 seconds know growing um demand in this quarter itself. Uh the signs of the that could be seen in the last quarter of last 39:34 39 minutes, 34 seconds financial year. uh while the first three quarters were very very low but in the last quarter actually industry picked up uh came up to the last last year's 39:43 39 minutes, 43 seconds level. So we could have continued with that growth but in the short run we see there will be little bit of challenge because of these uncertaintities of the 39:52 39 minutes, 52 seconds macro factors which are uh you know playing right now. uh but over a longer period in two to three years time uh we 40:01 40 minutes, 1 second see there is uh uh there is a you know turnaround uh just around the corner because we believe that uh the capex 40:09 40 minutes, 9 seconds which the government is every year committing uh that capex uh will uh as it gets invested uh it will uh bring lot 40:18 40 minutes, 18 seconds of growth for the overall industry. uh the focus on infrastructure and the focus on speeding up the uh the 40:25 40 minutes, 25 seconds projects, the focus on the quality of the projects and thereby you know moving to uh higher technologies of uh production, higher technologies of 40:34 40 minutes, 34 seconds construction that focus is clearly visible. Uh and we believe that uh you know in the product categories which we 40:41 40 minutes, 41 seconds where we are those are direct beneficiaries of uh all the uh you know investments on the infrastructure which 40:48 40 minutes, 48 seconds is going to happen. We believe that uh till uh till the next look elections uh there is uh there is a huge pipeline of 40:56 40 minutes, 56 seconds infra in infrastructure development which government is planning to do. Uh it is only u you know at the right time those funds have to flow to the market 41:05 41 minutes, 5 seconds that you know the the um the results will be visible in the industry numbers also. In the short run, we we see there 41:12 41 minutes, 12 seconds will be some challenge in terms of uh uh the the raw material cost which of course every manufacturer will try to 41:19 41 minutes, 19 seconds pass it on to the customer and therefore it might dampen the demand a little bit. 41:26 41 minutes, 26 seconds But I if this uh gets sorted out in next one one and a half quarter then I think we are looking at a a phase of uh uh a big turnaround after that. 41:37 41 minutes, 37 seconds So that is half half two is likely to be better. 41:42 41 minutes, 42 seconds It it is likely to be better. Of course I mean the the uncertaintity of macro factors is not uh purely within the 41:50 41 minutes, 50 seconds industry control. Uh but looking at the current situation if things settle down in next one or two months I think post 41:58 41 minutes, 58 seconds monsoon we should see a big turnaround in the industry. That's uh that is the uh you know the confidence of each every 42:05 42 minutes, 5 seconds manufacturer which we talk to. Um second part of your question was on on cranes and mini excavator. So uh in both the 42:13 42 minutes, 13 seconds segments uh our uh market share growth is visible even in the last year where it was uh the industry was going down. 42:21 42 minutes, 21 seconds We have gained 2.7% market share in cranes. uh and also we've maintained our number one position in the country in 42:29 42 minutes, 29 seconds mini excavators. So um I mean from uh from these two uh although the industry size for mini excavator is still very 42:36 42 minutes, 36 seconds small but um we are looking at know year 2030 2031 where the industry size is 42:43 42 minutes, 43 seconds expected to go to three times of what it is today. So we are definitely going to uh get benefited in the medium to longer 42:50 42 minutes, 50 seconds term by maintaining a good portfolio of products as well as maintaining a good position in the market. 42:59 42 minutes, 59 seconds Is there any export potential for these mini excavators and uh maybe cranes etc because the when domestic market is weak 43:08 43 minutes, 8 seconds but maybe because of the kubota channels etc. uh are we planning to do any on that export front? 43:18 43 minutes, 18 seconds Yes. So uh not for mini excavators uh uh per se because today whatever many excavators we are selling it is 43:25 43 minutes, 25 seconds currently fully imported from Japan and uh Kota channel uh other other countries Kota channel also buys from Japan or 43:34 43 minutes, 34 seconds Thailand. Uh so unless until we start manufacturing in India uh which will probably happen once the uh once we have 43:42 43 minutes, 42 seconds the new plant ready then we that could be planned uh but uh then probably there will be a case of uh exporting from 43:50 43 minutes, 50 seconds India uh at a better price u uh you know controls. So that is uh that is about uh the excavators. But on uh grains there 43:59 43 minutes, 59 seconds are few countries who use this type of cranes uh largely Africa and Southeast 44:06 44 minutes, 6 seconds Asia and uh s countries. So those are the countries that we are definitely exporting and we are continuously 44:14 44 minutes, 14 seconds u increasing our channel distribution presence there and uh and we we are making a good uh progress in in that. 44:23 44 minutes, 23 seconds Our uh export used to be about 3% 3 and a half% of total revenue. Uh it is moving uh upward of 5 to 6% now and we expect this to grow grow to 10% by 2030. 44:36 44 minutes, 36 seconds So this will continue to be our focus area. Okay. Now my next question is uh to Mr. 44:43 44 minutes, 43 seconds Madan. It is regarding the cash on the balance sheet which we are currently having including the current investments 44:50 44 minutes, 50 seconds of 6,000 crores. The last year we had some 3,500 crores. Now this year it seems the balance sheet we have about 44:57 44 minutes, 57 seconds 7,000 crores of cash. Now we uh as the capex is not likely to be very high of about just 400 or crores and the 45:07 45 minutes, 7 seconds capacity utilizations currently are quite comfortable. So it doesn't warrant any big expansion at this point. So what 45:14 45 minutes, 14 seconds are the plans to utilize this uh big amount which we are available with us? 45:21 45 minutes, 21 seconds No if you've been following our company we have made the announcement for investing in the green field facility. 45:27 45 minutes, 27 seconds So which we just mentioned we just acquired in the process of acquiring the land and initial payment has been made and the investment we have for phase one 45:35 45 minutes, 35 seconds in that project itself is more than 2,000 crores and then this only phase one then the expansion will happen. So overall plan I think over next 7 to 10 45:44 45 minutes, 44 seconds years will be to spend more than 5,000 crores on this green field project and this will include both tractor as well as construction equipment and maybe 45:53 45 minutes, 53 seconds going forward even the agree solution will also get added to this. So there are plans to do this and in addition there's also going to be the investment 46:02 46 minutes, 2 seconds in the captive finance company. So initially we mentioned 700 crores of capital has been earmarked for finance 46:09 46 minutes, 9 seconds company and we invested so far only 200 crores. The balance 500 crores will get invested over the next 12 months or so. 46:15 46 minutes, 15 seconds So obviously there are plans to do that and there'll be certain cash which will remain on the balance sheet for future growth and expansion requirements too. 46:22 46 minutes, 22 seconds So, so we don't think there's a liquidity which is more than required. 46:26 46 minutes, 26 seconds So, I think we think there are enough requirement from the business growth perspective which which will warrant this liquidity to remain on the balance sheet 46:35 46 minutes, 35 seconds over a period of 2 three years it will be utilized fully. Hello. 46:42 46 minutes, 42 seconds It may or may not be fully utilized but there's certain surplus which will obviously keep with the company for future growth. It'll never be zero. 46:49 46 minutes, 49 seconds Okay. Okay. And that's good. we are having net cash that is always a better way. Yeah. To uh go instead of going for the debt because that puts pressure. 47:00 47 minutes Okay. Thank you and all the best. 47:06 47 minutes, 6 seconds Thank you ladies and gentlemen. Please note in order to ensure that the management is able to address questions from all the participants in the 47:14 47 minutes, 14 seconds conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the 47:23 47 minutes, 23 seconds lineup. Hersa from Marcelus. Please go ahead. 47:27 47 minutes, 27 seconds Hi, my question is with respect to the cap NBFC. You alluded that we'll be earning 500 crores of capital into the 47:36 47 minutes, 36 seconds NBFC but any aspiration with respect to how much the loan size uh was likely to be by your end. 47:43 47 minutes, 43 seconds So how much loan the loan book size is expected to be an average that we lumping it up to? 47:49 47 minutes, 49 seconds Yeah. So as I mentioned we'll put keep putting the capital based on the loans book size only. We not going to give the capital in advance to them. So as and 47:57 47 minutes, 57 seconds when the portfolio increases we'll keep on investing. So our approval from the board is to invest it to 700 crores of capital and so far we done 200 course 48:05 48 minutes, 5 seconds investment into that entity. The portfolio is already more than 100 crores today as a friend of March. So obviously the portfolio is growing as 48:13 48 minutes, 13 seconds they expanding the reach in various states and more dealers are getting onboarded. So so the business will increase. So as in when the requirement 48:20 48 minutes, 20 seconds comes in we will keep putting the capital up to that level and obviously beyond that then we'll look at the leverage opportunities for that. 48:28 48 minutes, 28 seconds Yeah. So we'll be funding it full 700 crores and only then look after go after leverage is it? 48:34 48 minutes, 34 seconds Yeah. So initially up to 700 cr of capital will be funded by us. So 200 has already been invested. 500 more will go in next 12 to 15 months. 48:44 48 minutes, 44 seconds Okay. Got it. And with respect to this model, what would what is the RO aspirations that we have with respect to the capital MBFC? 48:54 48 minutes, 54 seconds The long-term you should look at most of the captive finance companies. So long-term RO will be somewhere between one and a half to 2%. But the basic 49:01 49 minutes, 1 second purpose of cryp is to help the main business in growing market share and increasing volume. So that is the primary objective is not that we'll be 49:08 49 minutes, 8 seconds going non- captive and focus more on the popularity but at the same time we don't want to be in a losing proposition. So business has to be sustainable. 49:17 49 minutes, 17 seconds So it should be reasonable return and at the same time also help the main business to grow. Okay sir. Thank you. 49:28 49 minutes, 28 seconds Thank you. Next question is from the line of Sadir Keria from Vio Wise. Please go ahead. 49:36 49 minutes, 36 seconds Yeah, good evening sir and thanks for the opportunity. Sir, you uh mentioned about the industry growth being flattish 49:44 49 minutes, 44 seconds for the full year and uh significantly negative for the second year uh second half of the year. My request is if you 49:52 49 minutes, 52 seconds can also elaborate in terms of one reason you said about the high base but if you can also elaborate on your view 50:00 50 minutes on the monsoon and elimin effect and the subsequent effect on the rural purchasing power because of that. 50:13 50 minutes, 13 seconds Yeah. So um hi uh Mr. Kia. So I I mentioned this earlier. 50:20 50 minutes, 20 seconds So uh I had mentioned this earlier. So uh overall the primary uh reason would be the high base but apart from that uh 50:29 50 minutes, 29 seconds the forecast uh of monsoons and and the impact of El Nino. So so um El Nino 50:36 50 minutes, 36 seconds impact to a certain extent currently what we see is that it it'll impact to a certain extent the probability is about 50:43 50 minutes, 43 seconds 70% 65 to 70%. Plus uh if you see the reservoir levels currently the rains that had to happen in Q4 of the last 50:52 50 minutes, 52 seconds physical the January, February, March period the rains were also uh uh much lower than uh uh what they normally are. 51:00 51 minutes So the reservoir levels are lesser or the levels are lower than last year or 51:07 51 minutes, 7 seconds for the last 10 year average as well. So the rainfall levels plus we are looking at a increase in the commodity prices as 51:15 51 minutes, 15 seconds as has been mentioned throughout the call today. So uh all these facts so uh one of the reasons for growth of the 51:22 51 minutes, 22 seconds industry last year was the GST impact uh which came in uh September and after which the industry grew uh 51:31 51 minutes, 31 seconds exponentially. So uh if if the commodity prices come into uh the increase comes 51:38 51 minutes, 38 seconds into uh effect uh in this year uh of course the purchasing power or the benefit of the GST is likely to go away. 51:45 51 minutes, 45 seconds So all these uh things uh the below u normal rainfall the elino impact the 51:55 51 minutes, 55 seconds high base uh the the commodity price increase all these are actually going to have a kind of a negative impact in H2. 52:05 52 minutes, 5 seconds So that is why I had mentioned that uh H1 would be a gain with respect to last year but uh H2 would be a 52:13 52 minutes, 13 seconds a drop with respect to last year industry. 52:16 52 minutes, 16 seconds Got it sir. So my only request was uh uh uh while while the answer is quite comprehensive what I was trying to 52:23 52 minutes, 23 seconds understand is that there are two effects which are playing out uh simultaneously here is one a very high base effect in 52:31 52 minutes, 31 seconds the second half and two an incremental negative impact uh due to two reasons. 52:37 52 minutes, 37 seconds One is the higher uh price of the material due to higher commodity prices and also due to uh uh bad monsoon uh and a low reserv. 52:49 52 minutes, 49 seconds So it's is it possible for by any reason to understand which effect would be playing uh by what percentage? uh let's 52:58 52 minutes, 58 seconds say if the base effect would have been normalized uh would you still be negative uh in 53:05 53 minutes, 5 seconds that sense because of the monsoon effect it's too early to talk about this today 53:12 53 minutes, 12 seconds right now because we can't say with decision how much will be the impact of each variable there are too many variables right now to play no one knows 53:20 53 minutes, 20 seconds what will happen we only assuming flat industry which we think will be very good because your industry was at a peak last Yes, if 53:27 53 minutes, 27 seconds you're able to achieve that even this of so many so much of headwinds I think it'll be a great achievement for the industry to really work on that. 53:34 53 minutes, 34 seconds So luckily for this year emission norms have been deferred. So that was one negative impact which was at play which will not happen. It'll only come into play horsepower tractor which is less 53:43 53 minutes, 43 seconds than 25 horsepower from 1 of October but they also industry has about 9 months time to continue to sell the old inventory. So really this year will not 53:52 53 minutes, 52 seconds have really much impact on that. But really how the monsoon distribution happens, which pockets get infected, what sort of geopolitical situation 53:59 53 minutes, 59 seconds emerges, how sort of cost pressure will come in future very difficult to predict at this point in time. So I think our initial assumption is if it's the 54:06 54 minutes, 6 seconds flattest industry which is what we assuming or maybe plus minus 2 3% here and there. I think it'll be a good scenario to play out in this year. And 54:15 54 minutes, 15 seconds if you have to call out H1 of fiscal 28, would you recommen 54:25 54 minutes, 25 seconds 28 as well because of the effects of uh H2 too early to talk about FI28? Uh but 54:33 54 minutes, 33 seconds long-term industry growth positions have been the CG of 6 7 8%. So we think in the long term that will continue. So the 54:41 54 minutes, 41 seconds industry has done that sort of you know performance in the last few few years and last few decade. So long-term obviously the growth momentum will 54:49 54 minutes, 49 seconds continue because your emission norm changes will only happen right now from first April 28 onward. So obviously 28 should be a reasonably good year but 54:57 54 minutes, 57 seconds again it will depend how the monsoon happens what sort of water reservoir levels are there in the beginning of FY 28 and then in the second half of that year. 55:06 55 minutes, 6 seconds Sure. So one more point how much financing and the interest rate plays a part in the buying decision of the farmers 55:14 55 minutes, 14 seconds 90% sale for us is on financing only so without financing the sale will not happen. So retail is dependent to a large extent on this financing availability. 55:25 55 minutes, 25 seconds Okay help thank you. 55:31 55 minutes, 31 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Katik Singal for closing comments. Over to you sir. 55:41 55 minutes, 41 seconds Thank you ladies and gentlemen for being present on this call. For any feedback or queries feel free to write into us at investor.relation escortco.com. 55:50 55 minutes, 50 seconds Thank you very much and have a good evening. Thank you. 55:54 55 minutes, 54 seconds Thank you very much on behalf of Philip Capital India. That concludes this conference. Thank you all for joining us today and you may now disconnect your lines.