Maruti Suzuki — Q4 FY26

Maruti Suzuki India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_a5sat1Z-y4 Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to the Maruti Suzuki India Limited Q4 FY26 earnings conference call. As a reminder, all participant 0:09 9 seconds lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:17 17 seconds during this conference, please signal an operator by pressing star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prana. 0:28 28 seconds Thank you and over to you sir. 0:31 31 seconds Thank you Dan. Ladies and gentlemen, good afternoon once again. Welcome you all to Q4 FI26 earnings call. May I 0:40 40 seconds introduce you to the management team from Mari Suzuki. Today we have with us our chief investor relations officer Mr. 0:47 47 seconds Rahul Bharti and CFO Mr. Arnaby. 0:51 51 seconds Before we begin, may I remind you of the safe harbor. We may be making some forward-looking statements that have to be understood in conjunction with the 0:59 59 seconds uncertaintity and the risks that company faces. I also like to inform you that the call is being recorded and the audio recording and the transcript will be 1:07 1 minute, 7 seconds available at our website. But please note that in case of any inadvertent error during this live audio call, the transcript will be provided with the 1:16 1 minute, 16 seconds corrected information. The con call will begin with a brief statement on the performance and outlook of a business by CO and senior executive officer 1:23 1 minute, 23 seconds corporate affairs Mr. Rahul Bharti after which we'll be happy to receive your questions. I would now like to invite our chief invests officer Mr. Rahuli over to you sir. 1:34 1 minute, 34 seconds Thanks good afternoon ladies and gentlemen and thank you for joining us. 1:39 1 minute, 39 seconds Before I come to the company's financial performance, I would like to briefly share our perspective on the passenger vehicle industry during the financial 1:47 1 minute, 47 seconds year 2526 and Maruti Suzuki's operating performance in this environment. 1:54 1 minute, 54 seconds Uh you would be aware financial year 2526 was a year of two distinct halves for the Indian PV industry. In the first 2:02 2 minutes, 2 seconds half of the fiscal year, the passenger vehicle market declined by about 0.4% 4% yearonear, 2:09 2 minutes, 9 seconds reflecting affordability pressures, particularly in the small car segment. 2:14 2 minutes, 14 seconds However, in the second half of the year, led by the government's GST reform, the industry witnessed a sharp turnaround 2:22 2 minutes, 22 seconds with the passenger vehicle market growing by a whopping 16.7% yearonear. 2:29 2 minutes, 29 seconds This rebound was clearly led by the small car segment uh vehicles in the 18% GST bracket where reduction in 2:37 2 minutes, 37 seconds acquisition cost helped revive demand for Maroti Suzuki. The rebound in the domestic market was even stronger than 2:45 2 minutes, 45 seconds the industry while our domestic sales declined by 5.6% in the first half of the year. 2:53 2 minutes, 53 seconds The sales volume grew by 12.3% in the second half of the year generating a swing of about 17.9%. 3:03 3 minutes, 3 seconds Our domestic sales volume growth during the year was constrained by production capacity. 3:09 3 minutes, 9 seconds As of the end of the fiscal year around 190,000 customer orders remained 3:16 3 minutes, 16 seconds unserved and of we are trying to service them fast. highlighting the strength of the underlying demand. 3:24 3 minutes, 24 seconds Importantly, near 130,000 of these pending orders were in the small car segment, falling in the 18% GST bracket. 3:33 3 minutes, 33 seconds In addition, the dealer inventory was at a low of about 12 days top. 3:41 3 minutes, 41 seconds Notably, even in a market largely driven by SUVs, the top selling passenger vehicle in passenger uh in financial year 2526 3:50 3 minutes, 50 seconds was the Desire, which is a sedan placed within the 18% GST bracket. 3:56 3 minutes, 56 seconds During the second half, we observed higher showroom traction from two-wheeler upgraders as well as an increase in firsttime buyers. While 4:05 4 minutes, 5 seconds rural markets continued to perform well during the entire uh year, the urban markets also recovered and posted a growth post the GST reform. 4:16 4 minutes, 16 seconds Alongside the recovery in small cars, Marauti Suzuki also strengthened its performance in the mid SUV segment during the year and towards this, the 4:26 4 minutes, 26 seconds launch of the Victor played an important role. The Victorius has seen strong customer acceptance and is the fastest 4:33 4 minutes, 33 seconds model in our portfolio to cross 50,000 cumulative sales. It is no wonder that the Victorious got the Indian car of the 4:42 4 minutes, 42 seconds year award where 19 prominent auto publications form a jury and jointly vote for the best car in the country. 4:52 4 minutes, 52 seconds While GST reform supported the revival of entry-level demand, the Victorious contributed meaningfully to our volume growth in the mid SUV segment, enabling 5:02 5 minutes, 2 seconds us to participate more competitively in one of the fastest growing segments of industry. 5:08 5 minutes, 8 seconds In addition, during the year, we also launched our first battery electric vehicle, the EVA. 5:15 5 minutes, 15 seconds The Evitara represents Marauti Suzuki's first fully electric SUV developed on a fresh dedicated platform and designed for Indian and about 100 global markets. 5:28 5 minutes, 28 seconds Happy to share that the initial response has been quite encouraging and the models strengthens our preparedness for the gradual transition towards electric 5:36 5 minutes, 36 seconds mobility while we continue to follow a balanced multi-art train technology pathway for reducing fleet carbon emissions. 5:47 5 minutes, 47 seconds Alongside the domestic market, exports remained an important growth driver during the year. Exports volume grew 5:55 5 minutes, 55 seconds strongly in the financial year, reinforcing Varushi Suzuki's position as the leading exporter of passenger vehicles 6:03 6 minutes, 3 seconds uh supported by a diversified presence across global markets. 6:08 6 minutes, 8 seconds Investors will be very happy to note that your company just one company among 6:15 6 minutes, 15 seconds 18 car manufacturers in India alone contributed 49% share of India's total passenger vehicle exports in the financial year. 6:28 6 minutes, 28 seconds At the same time in financial year 2526 the operating environment for the for the industry remained complex. 6:36 6 minutes, 36 seconds You are aware during the year geopolitical de developments such as supply issues in rare earth metals 6:45 6 minutes, 45 seconds uh the conflict involving uh the west Asia region pose risk to supply chains 6:52 6 minutes, 52 seconds particularly energy certain raw materials and logistics. 6:57 6 minutes, 57 seconds These developments increase uncertainty for the industry and required greater focus on business continuity. 7:04 7 minutes, 4 seconds The company has been working very closely with its supply chain and logistic partners to ensure continuity of operations and mitigate potential disruptions. 7:14 7 minutes, 14 seconds We have strengthened coordination across critical suppliers and enhance contingency planning. 7:21 7 minutes, 21 seconds However, the situation does remain dynamic and cost pressures do persist. 7:26 7 minutes, 26 seconds We continue to closely monitor developments and respond as required. 7:31 7 minutes, 31 seconds Despite the uncertainties posed by the ongoing geopolitical tensions, the company maintains strong confidence in the resilience of India's economy. 7:42 7 minutes, 42 seconds While acknowledging that war- related challenges may impact the business environment in the short term, the company believes these disruptions are 7:51 7 minutes, 51 seconds temporary and will likely subside as circumstances improve. 7:56 7 minutes, 56 seconds Importantly, the recent GST reduction is seen as a transformative factor for the passenger vehicle sector in India. By 8:04 8 minutes, 4 seconds lowering taxes, the reform has enhanced affordability, making passenger vehicles accessible to a broader segment of customers. 8:13 8 minutes, 13 seconds This in turn has set the industry on a path of sustained long-term structural growth by enlarging the potential customer base. 8:23 8 minutes, 23 seconds Consequently, the company is proactively accelerating its capacity expansion efforts to address the strong demand and fulfill pending orders. 8:33 8 minutes, 33 seconds In April 26, the second plant at the Koda facility was commissioned and the fourth production line at the Hanselpur 8:42 8 minutes, 42 seconds facility in Gujarat is set to become operational uh within the within this financial year. 8:50 8 minutes, 50 seconds Each of these new units will add an annual production capacity of 250,000 vehicles. 8:57 8 minutes, 57 seconds To put this in perspective, increasing production capacity by about half a million units in a 9:05 9 minutes, 5 seconds single year, is virtually unheard of in the passenger vehicle industry, at least in India and many countries abroad. 9:14 9 minutes, 14 seconds This bold move is a clear testament to our unwavering confidence and optimism in the immense growth potential that lies ahead. 9:22 9 minutes, 22 seconds Besides, the company has put plans uh in place to increase the production capacity to 4 million units peranom in the medium term. 9:32 9 minutes, 32 seconds Before we move to the financial results, I would like to share the major business highlights for the company. In this financial year, the company achieved several significant milestones. 9:44 9 minutes, 44 seconds First, the company recorded its highest ever annual sales of 2.42 million vehicles, which includes the highest 9:51 9 minutes, 51 seconds ever export of 447,000 vehicles. 9:57 9 minutes, 57 seconds Manuti Suzuki has set a new benchmark in the industry by achieving cumulative sales of 3 cr or 30 million units in the domestic market. 10:09 10 minutes, 9 seconds Coming to products, demonstrating its commitment to customer safety, the company is now offering six airbag as 10:16 10 minutes, 16 seconds standard in almost all of its uh PV uh passenger vehicle product lineup volumes going beyond 99%. 10:27 10 minutes, 27 seconds and advanced safety features like electronic stability control, anti-lock braking system with electronic brake 10:34 10 minutes, 34 seconds force distribution as a standard across the entire product lineup. 10:41 10 minutes, 41 seconds On the same lines, the all new desire, the victor, the evitara and the invo 10:48 10 minutes, 48 seconds secured five-star bat and cap safety rating while the Bellino secured a four-star rating. 10:56 10 minutes, 56 seconds Further strengthening the company's robust network of 2,000 exclusive charging points across our sales and 11:03 11 minutes, 3 seconds service network spanning across 1100 cities. We have collaborated with 13 11:09 11 minutes, 9 seconds charge point operators to offer access to a vast charging infrastructure across the country. Aligned with Suzuki's 11:17 11 minutes, 17 seconds global vision, we plan to introduce multiple EVs. And to support this, our aim is to en enable a network of over 11:27 11 minutes, 27 seconds one lakh charging points across India by 2030 along with our dealers and charge point operators. 11:36 11 minutes, 36 seconds For promoting inclusive mobility in mass segment cars, the company launched the wagonar with an option of a swivel seat. 11:45 11 minutes, 45 seconds Seemingly a small feature but extremely customerfriendly. So seat is specially designed to offer greater convenience to 11:53 11 minutes, 53 seconds senior citizens and persons with disabilities bringing the joy of mobility to them. Drawing inspiration 12:00 12 minutes from Suzuki Group's corporate slogan by your side. This initiative aligns with the United Nations sustainable 12:08 12 minutes, 8 seconds development goal that aims to reduce inequality. 12:13 12 minutes, 13 seconds The company continued to expand its sales and service footprint during the year. The total sales outlets increased 12:21 12 minutes, 21 seconds to over 4600 and service touch points increased to over 5,900 across the country. 12:30 12 minutes, 30 seconds Uh the company has also set a new benchmark in green logistics by dispatching over 600,000 vehicles 12:38 12 minutes, 38 seconds through railways in the financial year which is a growth of about 18.5% over the previous year. 12:45 12 minutes, 45 seconds Interestingly, in the past decade, Maruti Suzuki's share of rail mode in outbound logistics has grown exponentially, 12:54 12 minutes, 54 seconds growing from 5.1% in 2016 to 26.5% in financial year 2526, 13:03 13 minutes, 3 seconds significantly reducing carbon emissions, the country's oil imports, and easing road congestion. 13:12 13 minutes, 12 seconds Now I come to the financial results. 13:15 13 minutes, 15 seconds The company recorded its highest ever quarterly sales of 6676,29 13:22 13 minutes, 22 seconds units up 11.8% from uh quarter 4 of the previous financial year. This is for the quarter. 13:32 13 minutes, 32 seconds Domestic sales were at 538,994 unit and exports at an all-time high of 13:40 13 minutes, 40 seconds 137,215 units. 13:44 13 minutes, 44 seconds During this period, the company achieved record net sales of about rupees 5001 billion compared to about uh rupees 389 billion in the same period a year ago. 13:58 13 minutes, 58 seconds Operating profit ebit for quarter 4 of this year increased by 14:06 14 minutes, 6 seconds 30.4% 4% over quarter 4 of the previous financial year, reaching an all-time high of over rupees 44 billion. 14:17 14 minutes, 17 seconds Despite the growth in operating profit, net profit declined by 6.9% yearonear to nearly rupees 36 billion primarily due 14:26 14 minutes, 26 seconds to uh markettomarket impact which my colleague Bill will explain in his part. 14:33 14 minutes, 33 seconds Before coming to estimation of results, I want to reiterate that Suzuki Motor Gujarat Private Limited which was our 14:40 14 minutes, 40 seconds wholly owned subsidiary uh in Gujarat, it got amalgamated with Maruti Suzuki starting December 1, 2025. 14:49 14 minutes, 49 seconds The appointed date as per the scheme of amalgamation is 1st April 2025 and so the financial statements for the 14:57 14 minutes, 57 seconds relevant periods have been restated for the purpose of comparison. 15:04 15 minutes, 4 seconds Now I'll explain the broad reasons for the financial performance. U investors look out for a sequential comparison. 15:11 15 minutes, 11 seconds I'll I'll give you the analysis on a sequential basis. The overall sales volume grew by 1.3% and the net sales grew by 5.4%. 15:23 15 minutes, 23 seconds Sequentially the operating profit margin a bit has expanded to 8.8% 8% of net 15:30 15 minutes, 30 seconds sales compared to 8.1% in quarter 3 of the financial year. There were several favorable factors. 15:38 15 minutes, 38 seconds Lower employee cost of about 100 bips. 15:41 15 minutes, 41 seconds If you would recall in quarter 3, we had a one-time provision on account of new labor quotes. 15:48 15 minutes, 48 seconds So comparing with that uh quarter 4 was lower by 100 whips. The discounts were lower by about 50 basis points. 15:57 15 minutes, 57 seconds Favorable foreign exchange movement by 30 basis points. 16:02 16 minutes, 2 seconds Favorable fixed cost incidents of about 50 basis points due to inventory attrition. 16:09 16 minutes, 9 seconds These were the positive factors. They were partially offset by some adverse factors. The adverse commodity prices of about 80 basis points. 16:20 16 minutes, 20 seconds Higher new model expenses of about 60 basis points. The other expenses were higher by 20 basis points largely on 16:29 16 minutes, 29 seconds account of some lumpiness and seasonality associated with other expenses in CSR R&D. 16:38 16 minutes, 38 seconds Furthermore, at the PAT level at the uh net profit level, the hardening of bond yields resulted in marktomarket impact 16:48 16 minutes, 48 seconds of approximately 7.5 billion rupees on our invested surplus. 16:54 16 minutes, 54 seconds I now come to the highlights of the full year 2526. 16:58 16 minutes, 58 seconds The company recorded highest ever annual sales volume, net sales, and net profit. 17:05 17 minutes, 5 seconds The company sold a total of 2,422,713 units in financial year 2526 17:15 17 minutes, 15 seconds compared to 2,234,266 units in the previous year. 17:24 17 minutes, 24 seconds The company registered record net sales of over rupees 1.74 trillion in 17:31 17 minutes, 31 seconds financial year 2526, a growth of 20.2% over the previous year. The company achieved its all-time 17:40 17 minutes, 40 seconds high net profit of over rupees 144.4 4 billion in financial year 2526 17:48 17 minutes, 48 seconds compared to net profit of about rupees 142.9 billion in the previous year. 17:56 17 minutes, 56 seconds Along with profits come dividends. The board of directors recommended its highest ever dividend of rupees 140 per 18:05 18 minutes, 5 seconds share of face value of 5 rupees per share compared to uh rupees 135 per share in the previous year 2425. 18:16 18 minutes, 16 seconds With that ladies and gentlemen we are now ready to take your questions, your feedback and any other observations that you may have. Thank you. 18:26 18 minutes, 26 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 their touchstone 18:34 18 minutes, 34 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while 18:42 18 minutes, 42 seconds asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. 18:51 18 minutes, 51 seconds Our first question comes from the line of Gujan Pratani from Bank of America. Please go ahead. 18:58 18 minutes, 58 seconds Yeah. Hi. Um, thanks for taking my questions. Uh, my first question is on the u on the cost headwinds and thanks 19:06 19 minutes, 6 seconds for giving that margin bridge. Um, you know, can you please give us more color on how do we think about incremental cost headwinds? I mentioned it was 80 19:14 19 minutes, 14 seconds basis point in quarter 4. But looking at where the commodities are and the uh the steam um repricing that is uh uh you 19:23 19 minutes, 23 seconds know that is uh due. How should we think about the cost headwind going into the next one or two quarters and maybe uh 19:31 19 minutes, 31 seconds you know what are the mitigating factors that we are sort of working through uh to make sure that the margins uh you know sort of remain in a range or maybe 19:39 19 minutes, 39 seconds you just give us some guidance and how do we think about margin thanks uh Gjin uh so though you asked 19:47 19 minutes, 47 seconds only about margin but I I'll speak about both demand scenario and margins because just now we had uh uh we had a press conference along with their chairman. 19:59 19 minutes, 59 seconds One thing that he mentioned was that fortunately the impact uh does not seem to be much uh the demand sentiment seems to be good. 20:11 20 minutes, 11 seconds margins. Of course, some prices like commodity uh energy, gas prices 20:18 20 minutes, 18 seconds do go up in such times which is possible to understand but we've been seeing commodity changes in the past also. 20:26 20 minutes, 26 seconds So and we also believe that once the uh the the West Asia crisis is over many of 20:35 20 minutes, 35 seconds these uh cost pressures would return what uh would lapse. So yes there is some pressure but uh we are taking it as part of regular business. 20:48 20 minutes, 48 seconds Okay. And um I mean just any sense on um like do we see a similar sort of cost headwind going into quarter 1 as well? 20:57 20 minutes, 57 seconds Um uh you know 80 basis point was what we took in quarter 4. So I'm just trying to understand while these are temporary 21:03 21 minutes, 3 seconds and would get normalized uh any sense that you can give and is is there a mitigating action like you know of 21:10 21 minutes, 10 seconds course discounts are coming down any pricing move that can help you offset uh the commodity impact. 21:18 21 minutes, 18 seconds A lot of mitigation actions are in progress in fact that uh management spends a lot of time on this. One of 21:25 21 minutes, 25 seconds course is uh the first thing is we have to ensure that there is no disruption in our production operations. So whether it 21:33 21 minutes, 33 seconds is gas supplies or alternate fuels etc and arranging them from the lowest possible so diversifying our portfolio 21:42 21 minutes, 42 seconds that is one part. Second uh fortunately the demand scenario is good so we have a 21:49 21 minutes, 49 seconds focus that our utilization should also continue to be to be high. uh we are fortunate today we have pending orders 21:56 21 minutes, 56 seconds but we want that situation also to continue and volume bianc should be good that helps a lot 22:05 22 minutes, 5 seconds uh of course we are trying to arrange uh all the commodities at the lowest possible cost diversify your supply 22:13 22 minutes, 13 seconds chain so all those mitigating factors continue it will be difficult to put a 22:18 22 minutes, 18 seconds number but yes u in such a situation some cost headwind events do come and it's part of part of business. 22:31 22 minutes, 31 seconds Okay, good. My second question is on the um you know more on the reg you know emission regulations now um you know I'm 22:39 22 minutes, 39 seconds assuming the cafe norms what we've seen are near uh you know near final version um some sense on how are we thinking 22:47 22 minutes, 47 seconds about the cafe norms what does it mean in terms of the powertrain uh mix you know I'm particularly interested in sort of understanding what is the EV stadiums 22:56 22 minutes, 56 seconds that we'll need in the block of 3 years or two years the way Catherine arms defined it and And then recently there's also a lot of noise around this flex 23:04 23 minutes, 4 seconds fuse um E85 you know if you can talk us through the uh you know the readiness on this and what sort of portfolio cost 23:13 23 minutes, 13 seconds impact we see because of flex. So you know a bit more on these emission regulations. 23:19 23 minutes, 19 seconds Okay. So cafe is essentially an energy efficiency it's corporate average fuel 23:26 23 minutes, 26 seconds efficiency. So uh it's an uh energy efficiency regulation. Uh the final draft is yet to be notified. 23:36 23 minutes, 36 seconds Uh so it's not right to make a premature commitment but whatever we have seen till now seems to have a good balance 23:46 23 minutes, 46 seconds across multiple technologies powertrain technologies to reduce carbon. So they have encouraged all technologies uh 23:55 23 minutes, 55 seconds which is which is a positive and it's showing in the current war where bofuels uh like CBG 24:02 24 minutes, 2 seconds or uh compressed bio gas or ethanol uh is coming uh to the rescue 24:09 24 minutes, 9 seconds when crude oil imports come under pressure. Uh uh I should also tell you 24:15 24 minutes, 15 seconds that Marauti Suzuki models are inherently far more efficient than any in its peer 24:24 24 minutes, 24 seconds group and if you compare any likelike model we would be about 20% more efficient. So 24:33 24 minutes, 33 seconds that way uh the company is uh is is always positioned from a technology 24:40 24 minutes, 40 seconds perspective uh positively for energy efficiency. Uh your next question was on flex fuel. 24:49 24 minutes, 49 seconds We have the technology uh whether it is for ethanol uh blending increase or for flex fuel vehicles. We 24:58 24 minutes, 58 seconds have the technology and we'll support the government whenever the need arises. 25:05 25 minutes, 5 seconds What I mean what can be the cost increase because of flex view like in terms of the on on 25:12 25 minutes, 12 seconds um for you know upgrading the engine or complement change any prelimin 25:21 25 minutes, 21 seconds first of all let me tell you there are two distinct uh movements happening in ethanol. One is all cars on the road 25:31 25 minutes, 31 seconds which is something like we are talking about sales of u about 25:38 25 minutes, 38 seconds 5 million cars a year or all the park which is about 3 cr cars uh in the population. 25:47 25 minutes, 47 seconds The government is thinking of increasing the minimum blending from something like E20 to E21, E22, E something like that or maybe till all the way up to E25. 26:00 26 minutes That is one clear action. The other clear action is launching models that 26:08 26 minutes, 8 seconds can take any blend of ethanol and gasoline from 0 to 100. 26:13 26 minutes, 13 seconds So uh the second one is only a very small it won't be a meaningful volume by 26:20 26 minutes, 20 seconds number because such models we need uh dispensing pumps in the country that will 26:27 26 minutes, 27 seconds that will span the entire network. We need more models. We need parity between 26:34 26 minutes, 34 seconds uh uh ethanol and petrol price. So all those factors will take some time for 26:42 26 minutes, 42 seconds flex fuels to develop. So it is like a futuristic plan uh plan. The volumes will be minimal at this stage. It will 26:49 26 minutes, 49 seconds grow say 5 to 10 years from now it will become a meaningful volume. Nothing immediately. So it does not affect our cost structure. 27:00 27 minutes Okay. Got it. I'll join that. Thank you sir. 27:05 27 minutes, 5 seconds Thank you. Our next question comes from the line of Chandra Moli Mutaya from Goldman Sachs. Please go ahead. 27:14 27 minutes, 14 seconds Hi, good evening and thank you for taking my questions. Uh my first question is just around the growth outlook for the domestic passenger 27:20 27 minutes, 20 seconds vehicle industry and also what you think um could be the growth outlook on exports just given how the macro seems 27:28 27 minutes, 28 seconds to be evolving. I think at the CRM looking ahead conclaves three months back the industry thought that passenger vehicles should be able to grow between 27:36 27 minutes, 36 seconds 5 to 7%. In FY27 uh but the macro seems to have changed u but you did mention 27:43 27 minutes, 43 seconds that that demand um remains to be pretty good um there's not been much impact. So I just want to understand how you're thinking about industry growth both domestic and export for FY27. 27:57 27 minutes, 57 seconds So uh our chair I mean just uh mentioned first of all uh this time we would be thinking of uh utilizing our new plants. 28:09 28 minutes, 9 seconds Obviously the two new plants that come up with a cap with a steady state capacity of 500,000 units total. They 28:18 28 minutes, 18 seconds they will need a ramp up. So effectively one can expect that we'll have an additional volume of of about 250,000 28:28 28 minutes, 28 seconds cars available this year over the previous year. 28:34 28 minutes, 34 seconds So the broad expectation that our chairman also conveyed is about 10% growth uh uh uh in this year as compared 28:43 28 minutes, 43 seconds to the last year and uh of course the situation is dynamic. So uh but this is the initial 28:51 28 minutes, 51 seconds expectation. So this is this is above the estimates of industry that you mentioned about. 28:59 28 minutes, 59 seconds Sorry. So just to clarify the 10% growth you think is is industry volume of expectation domestic 29:07 29 minutes, 7 seconds domestic industry volume of expectation by FY27. Mhm. 29:11 29 minutes, 11 seconds All right. That's helpful. And just related to that my second question is on the upcoming capacity. I think um you did mention that there will be 2 to 29:19 29 minutes, 19 seconds 3,000 units which will come on board sometime in FI27 in Can you speak louder missing? 29:27 29 minutes, 27 seconds Sure. Is it is it better now? Uh slightly better. 29:32 29 minutes, 32 seconds Yes. Yes. Second question is just around capacity. Um so you mentioned that there will be 250,000 units of additional capacity coming on board in Gujarat 29:40 29 minutes, 40 seconds later this and you've already one in Hana the other in Gujarat. 29:46 29 minutes, 46 seconds Yes. Yes. So just um related to that uh last year when you had put the first green field in Kota there was I think 29:53 29 minutes, 53 seconds cumulative 60 basis points of startup costs because you had to build up utilization over a period of time. But at this stage it looks like you do have 30:01 30 minutes, 1 second good visibility around demand. We just want to understand if there will be uh any startup cost to be expected um in in these brownfield capacity additions that you're doing in Koda and in um Kat. 30:14 30 minutes, 14 seconds Yeah. 30:15 30 minutes, 15 seconds Look, there will be some ramp up definitely for the Kakoda phase 2 plant, but we do not expect anything significant because as Rahul explained 30:23 30 minutes, 23 seconds the demand outlook looks good and the economies of scale should be able to broadly take care of the startup cost. 30:31 30 minutes, 31 seconds So we don't expect anything significant. 30:33 30 minutes, 33 seconds If anything, the demand output stays positive. Of course, we'll have to keep monitoring the macro environment and the other variables here. 30:43 30 minutes, 43 seconds Got it. That's helpful. And last question just uh bouquet questions um around the other income outlook. So it 30:51 30 minutes, 51 seconds looks like you've had a 750 crores um mark tomarket notion impact on other income this quarters. Um if bond yields 31:00 31 minutes would remain constant do you think this completely reverses next quarter? Um and also just the other bookkeeping 31:07 31 minutes, 7 seconds questions are around export revenue and the reg retail number MY's retail number for the quarter. Yeah, first let me 31:16 31 minutes, 16 seconds answer your mark to market question. I think others will also have this question. So overall if you see because of the hardening of the interest rates and when we talk about hardening of 31:24 31 minutes, 24 seconds interest rates in our portfolio there are several I mean kind of benchmark rates which has a weighted average impact whether it is the one-ear GC or the one-year corporate bond or the 31:33 31 minutes, 33 seconds commercial paper but on a blended basis if one looks at it he had almost a 46 basis point impact this quarter and this 31:41 31 minutes, 41 seconds 46 basis point translates to about 750 crores hit in the quarter. Now if you compare it to a sequential sequential we 31:49 31 minutes, 49 seconds were nearly flat so the entire thing is reflected sequentially if you compare on a yi basis yi we positive by about 350 31:58 31 minutes, 58 seconds so on a yi comparison this is a,075 project so which is quite significant that's the reason you see the other income quite significantly down when you 32:07 32 minutes, 7 seconds are comparing the pbt of this year versus last year on a full year basis so this is something which you have to keep in mind as we see as of yesterday Yes, 32:16 32 minutes, 16 seconds some amount of reversal has already happened. Roughly about 35% of this is already reversed on yesterday's basis and this is a everyday 32:25 32 minutes, 25 seconds moving number. So we'll have to keep monitoring it. So that's on the mark to market roughly in terms of our overall credit quality 32:33 32 minutes, 33 seconds just to give you a thing I think our credit quality remains very robust and I think we are at a more than 99.5% rated securities. So that remains quite 32:42 32 minutes, 42 seconds robust. So the long term it is it is completely secure. shortterm of course we are exposed to the interest rate changes because of the macroeconomic 32:50 32 minutes, 50 seconds environment. Your second question was on exports right? 32:55 32 minutes, 55 seconds Uh uh yes exports revenue is about $1.24 billion for the quarter. 33:05 33 minutes, 5 seconds Got it. And just the retail numbers my retail volume number for the quarter. I think last year fourth quarter we did 430,000 33:12 33 minutes, 12 seconds units. Just checking this year what the retail number is for 4 last year. What is the figure you have? 33:21 33 minutes, 21 seconds 430,000 units for 4Q. ML domestic retail. Uh we have 415,000. 33:31 33 minutes, 31 seconds This was for last year fourth quarter. Uh this year fourth quarter was 468,000 about 700 units approximately. 33:44 33 minutes, 44 seconds All right, got it. Thank you very much and all the best. 33:46 33 minutes, 46 seconds So, there's a 12.9% yearon-year growth in the quarter in retail sales. 33:55 33 minutes, 55 seconds Makes sense. Makes sense. Thank you very much and all the best. 34:01 34 minutes, 1 second Thank you. Our next question is from the line of Ragunan NL from Noama Research. Please go ahead. 34:09 34 minutes, 9 seconds Uh good evening team. Thank you for the opportunity. Uh sir firstly if you can indicate uh growth or the share for 34:19 34 minutes, 19 seconds rural in FI26 and also if you can talk about the trends for first time replacement 34:27 34 minutes, 27 seconds additional buyers for fular FI26 34:34 34 minutes, 34 seconds see we've stopped uh kind of making so hard a line between urban and rural 34:42 34 minutes, 42 seconds because the boundary ries are blurring now and it's a very heartening thing that the rural India is integrating with 34:48 34 minutes, 48 seconds the urban India. So uh uh so 34:56 34 minutes, 56 seconds uh there are increasingly consumption trends which were earlier associated 35:02 35 minutes, 2 seconds with with urban India that are now being seen in rural India and uh so we don't 35:10 35 minutes, 10 seconds monitor that figure anymore but of course we keep the distribution network as extensive as possible. 35:21 35 minutes, 21 seconds Uh noted sir and uh how are you seeing the trend in the first time buyers the share increase? 35:30 35 minutes, 30 seconds So happy to share that the first time buyer is about 51%. 35:35 35 minutes, 35 seconds Uh the in Q4 18% is about uh repeat uh purchase 35:43 35 minutes, 43 seconds and uh 31% is additional car in the family. 35:51 35 minutes, 51 seconds And uh how has the share increased sir? 35:54 35 minutes, 54 seconds How should we look at it? How how has the share of first time increased in comparison to uh preGST cut? 36:02 36 minutes, 2 seconds PreGST cut. So so in in H1 the figure the Q4 figure of 51 36:12 36 minutes, 12 seconds uh was actually around 42%. 36:19 36 minutes, 19 seconds No, H1 was about H1 was about 42%. 36:23 36 minutes, 23 seconds Q3 was at 48% and Q4 at 51%. 36:32 36 minutes, 32 seconds No, sir. Thanks. Thanks for Sorry to interrupt. It is a very clear 36:39 36 minutes, 39 seconds signal that the government's intended support to the first time buyers is showing results. 36:50 36 minutes, 50 seconds Got it sir. Thanks. Thanks for sharing this. And this this also aligns with that one lakh 30,000 small car orders which you mentioned is this are pending. 37:00 37 minutes Uh just a bookkeeping uh uh question for Q4. Can you share the discounts uh blanket discounts number for Q4? 37:11 37 minutes, 11 seconds What we can share with you is that there was almost about a half% reduction on account of discounts in the quarter sequentially. 37:24 37 minutes, 24 seconds We got it s Thank you. Thank you very much. evit expansion because of this. 37:36 37 minutes, 36 seconds Thank you. Our next question is from the line of Kumar Rakkesh from BNP Pariba. Please go ahead. 37:43 37 minutes, 43 seconds Hi, good [clears throat] evening and thank you for taking my question. Uh my first question was for fiscal 27 the model launch plan that we have right and 37:51 37 minutes, 51 seconds let's not be speaking specifically about the models but if you can give some sense on how many new name plate addition and model refreshes you're 38:00 38 minutes targeting across IE and separately for EV uh we have a good lineup a healthy 38:09 38 minutes, 9 seconds lineup and we'll keep our customers enthralled we need to uh improve our market share But we'll keep the excitement also on. 38:19 38 minutes, 19 seconds So across uh across categories we will have new new models. We have spoken 38:28 38 minutes, 28 seconds about seven more SUVs all the way through the end of the decade. 38:34 38 minutes, 34 seconds So um that the excitement continue. 38:40 38 minutes, 40 seconds Sure. But can can we imply that going by that run rate we should be having one new model named completed each and every year? Is that a fair expectation? 38:50 38 minutes, 50 seconds Uh see a one model development is about four years lead time. So it's not necessary 38:58 38 minutes, 58 seconds that we space it out equally all the time. There may be lumpiness around it. 39:03 39 minutes, 3 seconds But there are seven SUVs and other models uh uh all the way to the till till the decade end. 39:14 39 minutes, 14 seconds Got it. And on the EV side, EVAR now is launched in the domestic market as well. 39:19 39 minutes, 19 seconds I understand earlier you had indicated the aspiration to become the largest EV manufacturer in the country which would include export as well. But how is the 39:28 39 minutes, 28 seconds product doing in the domestic market and what's your aspiration for the domestic market in the EV space? Uh thanks for that question. In fact in my opening uh 39:36 39 minutes, 36 seconds message I mentioned that we are happy that wherever we have sold that car the customers are very happy. Uh this is both in India and in our export markets. 39:50 39 minutes, 50 seconds So that bodess well. Currently of course uh we have uh we are constrained by uh production capacity. 39:59 39 minutes, 59 seconds Starting July when our fourth plant in Gujarat comes up and uh there's a gradual ramp up we'll keep increasing 40:06 40 minutes, 6 seconds our uh uh supplies. We are also targeting that the customers to whom we we give these cars and we you know we 40:15 40 minutes, 15 seconds fit home chargers etc. they should be totally satisfied and delighted customers. 40:22 40 minutes, 22 seconds So till the time we have lower numbers at least we should focus on customer delight uh 100%. 40:32 40 minutes, 32 seconds Got it. Thanks. Just one final question on the margin side. I understand spoke about that there are lot of moving paths 40:39 40 minutes, 39 seconds to the margin and things are dynamic but once we have passed through these middle east conflict and part of it getting reversed and we potentially taking some 40:47 40 minutes, 47 seconds price increase as well in a quarter or two we should get back on a trajectory of margin expansion and potentially in the direction of 10% a bit margin which 40:56 40 minutes, 56 seconds we have targeted to reach to by 2030 is that a fair expectation 41:02 41 minutes, 2 seconds so um it's always uh difficult to uh give out a guidance on margins but what I can tell you is the quarter score a 41:12 41 minutes, 12 seconds bit uh was to to estimate I mean the Bloomberg consensus estimate was 8.8% 8% 41:19 41 minutes, 19 seconds and that was where the figure was the actual figure also. 41:25 41 minutes, 25 seconds So as you rightly said there are many moving parts and I would also add to 41:31 41 minutes, 31 seconds that that a market leader has the u the uh privilege of having multiple moving 41:39 41 minutes, 39 seconds parts multiple levers to help margins. 41:44 41 minutes, 44 seconds So uh we are very confident and optimistic that uh subject to these 41:53 41 minutes, 53 seconds headwinds of the war the commodities and the energy prices after that is over uh we'll come back to a healthy trajectory. 42:04 42 minutes, 4 seconds Thanks a lot. 42:08 42 minutes, 8 seconds Thank you. The next question comes from the line of Arvind Sharma from city. Please go ahead. 42:16 42 minutes, 16 seconds Uh thank you sir for taking my question. 42:19 42 minutes, 19 seconds Uh first would be uh on an QQ basis uh ASPs have increased uh a fair bit. Uh how sustainable it is and what are the 42:28 42 minutes, 28 seconds drivers for this ASP increase quote unquote basis? 42:40 42 minutes, 40 seconds Sorry uh sorry I was on mute. We do believe that uh there is still headroom for ASP 42:49 42 minutes, 49 seconds because uh the upper segment uh models there is some headroom. 42:58 42 minutes, 58 seconds So there is some some upward room in in ASPs uh from the 4k levels as well. 43:08 43 minutes, 8 seconds Yes. uh for example E EVs have to increase in the future. So uh that will help uh ASPs. 43:20 43 minutes, 20 seconds Sure. Uh thanks. And uh on the balance sheet just two points uh what is the capeex plans for these two u expansions 43:28 43 minutes, 28 seconds for FI27 and also just saw that inventory was fairly high uh at this year end. Any special reason for that? 43:37 43 minutes, 37 seconds all on the capex for fi 2627 uh we are looking at a 14,000 cr capex for the full year I think uh so it will be 43:46 43 minutes, 46 seconds primarily driven by these two plants uh on the inventory no I don't think we have a significant increase if you look 43:53 43 minutes, 53 seconds at the total stock versus this I think we are at a fairly good level we are much lower than the industry in terms of our overall net stock 44:03 44 minutes, 3 seconds but I meant the on the balance sheet I meant in the balance sheet Um yeah there are there will be always 44:11 44 minutes, 11 seconds small timing issues but let me just quickly see that was question so we'll come back on this while he has a look on the 44:19 44 minutes, 19 seconds we can ask question sure thanks so much thank you next question is from the line 44:27 44 minutes, 27 seconds of Amitandani from Philip Capital [clears throat] please go ahead yeah thanks team for the opportunity and 44:35 44 minutes, 35 seconds congrats for reasonable set of numbers despite the input cost pressures and other challenges. Uh sir my first question wanted to just to reconfirm 44:44 44 minutes, 44 seconds that you said the domestic PV industry to grow by 10%. So are we right in understanding this? 44:51 44 minutes, 51 seconds No, no, we are speaking about Marauti not the domestic I'm talking about 44:58 44 minutes, 58 seconds Maruti Suzuki expectation understood it's clear and then secondly 45:06 45 minutes, 6 seconds on the export situation so what are your what are plans to deal with the uh present export situation 45:16 45 minutes, 16 seconds uh if you can help me predict the war I can predict the exports number. 45:24 45 minutes, 24 seconds So we are in a healthy position. We have built a good franchise across countries. 45:30 45 minutes, 30 seconds We we are on a steep ramp of path and uh we want to have at least uh 45:41 45 minutes, 41 seconds at least the current numbers but then there is so much of u uncertainty that it's not responsible to give out a figure. 45:55 45 minutes, 55 seconds All right. Thank you sir. All the best. 46:00 46 minutes Thank you ladies and gentlemen. We will take that as our last question for today. So sorry there was one question which uh needs to be 46:07 46 minutes, 7 seconds Yeah. So so let me come back on the earlier inventory question before we close. I think uh see it's a combination of predominantly uh various raw material 46:16 46 minutes, 16 seconds and work in progress not too much on the FG side of it because I mean the production in the coming period is is has a quite steep outlook. So there were 46:24 46 minutes, 24 seconds bunch of gits in that bunch of kind of a stock which is needed for the production for the coming periods because as you know we are ramping up the capacity in 46:32 46 minutes, 32 seconds the coming two quarters. A lot of preparatory work had to be done. So which is predominantly the composition of the country. 46:41 46 minutes, 41 seconds Thank you. 46:43 46 minutes, 43 seconds With that ladies and gentlemen this it brings our conference call to an end. On behalf of Marati Suzuki India Limited we 46:50 46 minutes, 50 seconds thank you all for joining us. You may now disconnect your lens.