Would it be possible for you to share the cash balance in TICM at end of 2Q?
No, we do not share specific data on that, Joseph, so I think kind of, we do not share it.
Based on current cost structure, what are the monthly volume levels for each EV segment where you can hit EBITDA break-even?
It is a bit early to tell. Honestly, I have given an estimate in the past and I have been wrong. So, I would rather kind of err on the side of caution here. So, till we get to a stage where we were comfortable giving numbers when we are getting this thing, we do not want to share at this stage.
On medical devices, you mentioned 15% growth. Earlier we were targeting 20-25%. Has anything changed?
I mentioned about the existing what we are doing the sutures but including what I told we are going to add some vertical surely, we are targeting 25% CAGR on TI Medical.
On 3xper — the remaining 25 Crores investment was supposed to be allocated if certain conditions were met. Have those targets been met?
So, we will take an appropriate call based on the time. As we discussed, maybe we will take those calls later.
Last quarter we were not really this confident of investing into TI Medical and 3xper higher numbers. What turned around?
The way we look at it is that the fundamental thesis of these businesses kind of remains, which is there is good long-term growth in both these businesses. Now, what we have to look at is I think it is better to look at how we ensure that these businesses give us the growth and profitability we need. So, if that requires more management attention, that is what we are now doing.
What is the industrial chain market size and have we lost market share in two-wheeler chains?
Chains, our market share is intact, rather it is a marginal improvement and industrial chain also has done pretty well. Industrial market size is about 900 Crores and we do almost close to 50% share in that. Exports as a total TI about 15%.
Compared to growth expected three months back, are you seeing a significant upgrade post the GST cut announcement?
TI is mainly dependent on auto as well as non-auto. After the 22nd September GST rates change, we see a really uptick in demand, but which can be coupled with the festival season also. October as well as November both seems to be very very strong months.
After the GST cut on ICE vehicles, are you seeing any impact on EV sales because of ICE becoming cheaper?
There is definitely an impact of the ICE becoming slightly more attractive versus the EV vehicles post the GST reduction. However, the impact varies. In e-tractor and small commercial vehicle, the impact is minimal and recoverable in two to three months. In three-wheeler business the impact is highest because diesel translates to almost Rs.20,000 for an ICE vehicle. M&HCV business is not impacting because customer takes the GST as input credit.
Could you share EV volume numbers for trucks, three-wheelers, SUVs, tractors etc for Q2?
For three-wheeler, it is 2082. For HCVs, it is 44. For small commercial vehicles, it is 167. And for e-tractor, it is 100. From a revenue perspective, Q2 was one of our perhaps one of our best quarter up till now for the business and we were up vis-a-vis quarter 2 of last year by 21% and we were up vis-a-vis quarter 1 of this year by 31%.
Can you share the volume growth for engineering division?
On volume terms, it is around 10%. Exports particularly Q2 was a bit slower, particularly in US, but rest of the geography it was Ok. We do not share the tonnage generally.
Strong growth in the mobility segment — is it market share gains or end market revival?
In mobility division, our focus was more towards the specialized bike and we launched even the e-bike and we are bit focusing going forward on the fitness side of the business story. So, this led to the margin improvement and we feel it is sustainable.
Could you talk about the impact on exports to US? Tariff increased to about 50% sometime in August.
Wherever we are supplying to the OEMs, the approval process is quite longer, and that gives advantage in this kind of time, where the business is sticky for some time. But wherever the distributor market is there, we see a bit of slowdown. Our US impact is around 4% to 5%, which in Q2 we see a bit of slowdown, about 10%.
Update on the railway business — was expected to start Q4.
Earlier we maintained that business will start in Q4. We met our customers. Maybe I met them even last week. So, we see that there will be a delay of about one quarter because of other suppliers' supply chain is not ready as of now. But from TI perspective, we are ready.
EV volumes — three-wheeler grew just 2% YoY and trucks 5%. EV is in adoption mode, why is the pace not faster?
On the truck side, we are seeing competition coming in. There are about seven to eight players who are now active. We held on to market share of 50% plus for H1. We introduced a 4 by 2 variant in September, swap technology, and a Tipper for Q4. On three-wheeler, there were product concerns which we have now put together — new variant launched last month. We are also planning to enter the cargo and L3 segment towards the end of the year.
Medical division — flat for last 3-4 quarters. What is the potential and any new product gains?
In particularly September month, we have seen a bit of slowdown because of the GST impact. All dealers and hospitals slowed down particularly to off take of orders. We feel maybe it will get compensated in November and December. We are working on new product development. Internally, we are targeting growth of 15% plus for the surgical business that we have. Also exploring a new vertical to launch under the TI Medical.
What was the capacity utilization for engineering division?
Plant capacity utilization is almost two to three years ahead. As of now, we are running at 80% to 85% capacity utilization. Our Nasik plant has just started in cold rolled strips, as well as Phaltan plant also started doing commercial production this month. So, we are covered at least for next one to two years for having enough capacity to drive the growth.
On EHCV — do we have what it takes to capture the market given increasing competitive intensity? Or is pricing still a deal breaker?
Yes, in terms of product performance, what we have demonstrated to the customer, our existing customer satisfaction and the repeat orders, we are very confident that we have enough to capture the market. Our market share has been in 50% upwards. We have purposely chosen not to go the retrofit route because we are convinced that grounds up EV is any day a better bet.
TI over a 5 to 10-year period has always delivered strong double-digit growth. So that thesis is still intact, right?
Yes, it is intact.
Cash and current investments about 150 Crores, debt repaid. What is the plan with capital allocation?
If we look into next year, the core business we are seeing revenue growing in the range of like 10%, PBT in the range of 12% to 15%. That requires capital for expansion. For base business we are going to invest next year about Rs.300 to 400 Crores range for the standalone business. The second is what will go into growth on TI Medical and 3xper - in the range of about 300-400 Crores. Then we are looking at some M&A — up to 200 to 300 Crores can get allocated towards that.
You said 50% market share for electric trucks — pan-India or just South India?
Pan-India.