Release Date: July 16, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue from operations grew by 16% to just under INR12,000 crores, driven by both domestic and export sales.
- EBITDA at 20.2% crossed INR2,400 crore, delivering a 24% growth, marking the third successive quarter of 20%-plus EBITDA.
- The electric vehicle (EV) portfolio, including two-wheelers and three-wheelers, now constitutes 14% of overall revenue.
- The new plant in Brazil commenced production in June, with a scalable capacity from 20,000 to 50,000 units per annum.
- The Chetak electric scooter business unit solidified its position, achieving a 12% market share in Q1 and aiming to expand to 1,000 stores by September.
Negative Points
- Africa, particularly Nigeria, continues to underperform, with motorcycle sales significantly below the benchmark.
- The electric two-wheeler segment remains a drag on profitability despite cost reduction efforts.
- Commodity costs saw a slight uptick, particularly in aluminum, copper, rubber, and noble metals, impacting overall material costs.
- The domestic market share in the 100cc segment remains low at 15%, indicating room for improvement.
- The premium motorcycle segment (250cc to 500cc) has shown lackluster performance despite new launches.
Q & A Highlights
Q: I noticed that volumes for electric 2-wheelers have been ramping up quite a lot. What has been going right, and do you think there is potential to rise up in the leaderboard to potentially number two position sometime this year?
A: The rise in market shares and volume is due to a combination of price adjustments and network expansion. Customers appreciate the build quality, reliability, and styling of Chetak. With the introduction of the [2901], we are now positioned to compete in the sub INR1 lakh segment. Our next goal is to achieve the number two position and eventually aim for leadership. β Rakesh Sharma, Executive Director.
Q: Can you comment on the profitability of electric vehicles, particularly two-wheelers, and the potential of CNG technology in motorcycles and scooters?
A: Electric three-wheelers are profitable at a margin level similar to ICE three-wheelers. Electric two-wheelers continue to be a drag, but cost reduction efforts have helped neutralize the impact of price drops. Regarding CNG, it appeals more to longer-distance riders, making it suitable for motorcycles. We are exploring the potential for CNG in scooters as well. β Rakesh Sharma, Executive Director & Dinesh Thapar, CFO.
Q: What percentage of your domestic three-wheeler volumes are now electric, and what is the market coverage with the distribution network?
A: About 19% of our three-wheeler portfolio is electric. We are now in 140 towns, covering 70% of the e-auto market. Our priority was to enter markets where CNG three-wheelers were not allowed due to permits. We aim to be a full-range player in the three-wheeler market. β Rakesh Sharma, Executive Director.
Q: How is the demand for Triumph motorcycles shaping up in domestic and export markets?
A: In metros and mini metros, we are seeing good traction and post-sales satisfaction. However, outside these areas, brand awareness is limited. The task now is to build local awareness through various marketing initiatives. β Rakesh Sharma, Executive Director.
Q: Can you share the CapEx guidance for FY25 and the areas of spend?
A: The CapEx for FY25 is expected to be between INR700 crores to INR800 crores, primarily for commissioning our new electric three-wheeler facility and other capabilities for electric vehicles. β Dinesh Thapar, CFO.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
