Do you think it will be easier for OEMs to pass on commodity as price increases in this cycle as the prices dropped quite sharply and customer appetite or affordability is better?
I think it is a balanced journey. I think definitely, I think when we fully passed on the GST benefits to the customer, that has helped for us to also grow and the industry also to grow. So it is not easy to just increase prices. I think as a responsible company, we want to give better value to our customers. We look at -- that's why we invest behind variants, new technology, new attractive features. Otherwise, you cannot hold on to the demand higher than whatever you have done. So this is a very, very balanced journey.
Any thoughts you would like to share that do you expect this sort of momentum to continue going into fiscal '27? Is it fair to say that we can have another 8%, 9% sort of growth here in fiscal '27 as well?
Gunjan, I will answer in 2 steps, okay? First, I never said there is shortage for products of TVS in the market. I said there were challenges in EV, iQube and now recently launched Orbiter primarily because of the magnet availability. Now that is also easing out. So from a capacity point of view, we are also taking proactive action. So that is the first point, okay? It is Pramod who asked there is a shortage in the market. I think it is for the dealers to plan, and we are here to support them with the products on time. Now coming to the growth rate, I'm very confident that Q4 also, you will see the benefit because GST got implemented, I think, third week of September or fourth week of September. So you will see the first half of next year is also going to be very good because the benefits will come into the industry. So overall, I'm a firm believer that 8% to 9% as a CAGR, you can look at on a long-term basis, okay? So second half of next year also, I'm very sure. If not like first half, you will see many of these things getting implemented in India. Overall, the GDP is likely to grow. So with that, I think you will see a robust growth in the 2-wheeler even '27. I don't want to give some projections as of now. But overall, this is my preliminary thinking.
Scooters, the way it is growing, how do I think about the margin profile of scooters versus the -- versus, let's say, bikes or mopeds? Is it premiumization within scooters that's helping?
See, we focus on the customer, and we focus on technology and features, And we want to look at overall portfolio. While I said, product mix is very important and premiumization is very important, and we are focusing on that, We have to look at the customer, customer segment and try to be leading many of these segments. So that has been our focus. We always look at the total portfolio contribution, We don't look at segment -wise, okay? Segment-wise is important, I agree. But we want overall top line to grow ahead of the industry. We want to look at how we can increase our premium category share to go up. Also scooter category share how to go up. So we do interventions with respect to products, variants and making sure that they grow faster than the industry.
Could you tell us what was the EV 3-wheeler volumes for the quarter and the EV revenues overall for the quarter?
Around 8,500 to 9,000, because every month it has been increasing. So around 8,500 numbers in this quarter.
So the gap, I understand to some extent, it is because of some of the suppliers who are getting those benefits and therefore, you're not accruing those. But still, is there a scope for increasing this? Or what is the gap here that we can sort of improve this quarter?
First of all, thanks to government on the PLI. I think you have answer in your question itself. It's a combination of the company and some of the suppliers getting the benefit overall, okay? For us, it is about 0.7%. And we have not missed any opportunity in securing the PLI benefits from the government, okay? Number two, I think our endeavor is to focus on delighting the customer, whether it is iQube, whether it is TVS Orbiter or TVS King. And as you know, our numbers have been growing ahead of the industry growth. So definitely, this is going to help us to improve the EV profitability going forward.
So we launched the Orbiter. How has been the response and the customer profile difference between iQube and Orbiter, if you can give some color over there? And also on the EV profitability journey, where are you? When can -- at what volume level do you turn EBITDA breakeven, some color?
See, first on Orbiter, this is -- you know the product differentiation. You know how it is priced. So it is basically to give it to those set of customers who want a lesser range and they can look at this as a differentiated product, okay? It's too early to really come back actual usage and how it is performing. But so far, whatever we have seen the markets where we have launched, we have not launched it in all India. The demand is excellent, and we are ramping up now. First, we'll cross that 10,000 numbers per month, okay? And the good news is iQube is also growing, Orbiter is also growing. Overall, it is growing ahead of the industry, okay? And the -- on contribution, we are positive, and we are becoming better and better quarter after quarter because that is our focus. And like I said, overall, when we look at the EBITDA margin, I'm pretty confident that while the volumes are growing, I'm very confident that this EV will also become EBITDA positive, and it will also grow forward the overall PBT level.
Sir, firstly, exports have witnessed a robust growth, more than 35% on a YTD basis. Within exports, how do you see the potential for Jupiter model in the future?
Yes, potential in future for markets like Asia, some markets in Middle East and some markets in Turkey, a few markets in Africa, very few markets in Africa, some markets in LatAm, also ASEAN. So I think Jupiter is a great brand. And what we are trying to look at is each of these markets, we are trying to leverage by marketing this product, it's advantageous. So it will grow. This year also, it will grow. Overall scooters will grow in international market. I may not be able to put a number to it. But fortunately, we have the product, we have the capacity to give it to the market. And Sri Lanka coming back in this category is a big, big advantage because Sri Lanka is a big scooter market, as you know. And Jupiter is one of the key players in Sri Lankan market.
So Q4 gross margin, you should be able to maintain, sir, as a combination of despite the commodity.
I don't want to give any guidance. I can only tell you that I already gave you in my opening remarks, you have seen our performance in quarter after quarter. The same performance will continue because we don't want to give any guidance on gross margin. But I can tell you, we are confident about growing ahead of the industry. That is going to help the company and our strategy of looking at the product mix, maximizing the scale benefits, also continued effort on our cost reduction. These are all going to help the EBITDA journey.
And last question, sir, on 2026 should see the launch of Norton motorcycles that you had shown in EICMA. And apart from that, you had also showcased that M1- S electric Maxi scooter and ESX, which is the electric motorcycle. What can we expect on the electric side, sir, for 2026?
See, the strength of TVS Motor is very strong R&D and new product development capability. We look at the customer very closely. I think those are all, I would like to say that certain products and the concepts what we had displayed there, okay? Closer to the launch, I'll tell you the time line. At this point of time, I think we believe in our strength of R&D and new product development capability. Most importantly, we want to focus on the customer and delight the customer. That strategy will continue as a company.
Wonderful, sir. And any date for the listing of preference share?
What is that? Sorry I didn't get you. No, no, the listing is still taking time. We are closely following up with SEBI. We will continue to follow up more closely. That's the status now. It's not in my control. We are not able to give a date.
Sir, I just wanted to understand like given the commodity price increase, which we have seen in Q4, what is the impact you see like without the price increase, just the impact from the commodity increase on margins?
I think this is the fourth time or fifth time, the commodity prices plus/minus are likely to happen in every quarter, okay? Sometimes we have seen softening. Sometimes we've seen marginal increases. Like I said, the strategy of the company is always to loo k at delighting the customer and giving the best value to the customer. And thanks to the industry, it is doing extremely well. And we have been -- thanks to our products and our thanks to our customers, we have been also growing very well on the top line. So continue to grow the top line, continue to get the benefit of scale, continue to work with the suppliers and look at what ki nd of cost reduction we can bring in and very clearly work on other cost reduction initiatives and wherever possible without hurting the customer, increase the prices wherever it is possible, okay?
Just want to understand if there's some upside risk to that 8% to 10% kind of growth bracket for the 2-wheeler industry in your view over the medium term?
Definitely, the GST is playing, and all of us should know that it is not only in 2-wheeler. There is a good basket of products wherein the consumers have got the benefit of GST. So it's all playing out. I'm pretty confident that Q4 also, you will see anything upwards of 15%, you can see in Q4, which is according to me, one of the best growth what we have seen. So we are very positive about the Q4 growth. So year as a whole, if you look at it, because you know the first half has not been so great. It was only 2% growth. And year as a whole, you will see somewhere around 9% growth. But exit is excellent.
Just want to understand what are the offsets available to the company to manage the commodity inflation? And have we taken any price hikes in the December quarter as well as the March quarter to date?
You are right. I think there are increases in aluminum, copper, zinc, platinum, palladium, rhodium, I think that you will see in this quarter. And we always look at a combination of -- with our top line growing. The strength of the company has been when the volume is growing, we are able to get the scale benefits. And we are also able to drive our cost down program. And we have been very prudent. We keep looking at price increases. And if you look at recently, we have taken up about 0.2, 0.3 percentage price increases. So this is a kind of a constant journey because we definitely want our growth momentum to continue, but we want to mitigate the journey with a combination of scale plus cost reduction plus product mix has definitely helped us and some appropriate price increases.
If you could share the international business revenues and the spare parts revenues, please?
IB overall revenue for this quarter is about INR2,909 crores and spare parts all put together about INR1,183 crores.
If you can just help us understand how the broader categories are doing on the ground? And within that, in rural, are you seeing better traction for premium and scooters after the GST cut?
Scooters have really done well. While the industry has done well, I think one category which has done extremely well is scooter. You remember, I always believe that scooters with ICE Plus, we should always add the EV. We are close to a 40% category share of overall 2 -wheeler industry. This is exactly what I used to say in the meeting that scooters will grow faster than the industry, and that is exactly what is happening in the industry today. Other important thing we should look at the premium and the super-premium is growing faster, okay? The executive category of motorcycle is also growing. I think what is happening is the entry-level segment is not growing as much. So -- but if you look at urban, rural, urban is about 21% and 19% rural. So rural is also doing well.
And within rural, are you seeing traction for scooters and premium getting better, sir, after the GST cut?
See, overall scooter has to do well and the premium and the super premium has to do well. Definitely, in the rural also, scooters are doing well. And thanks to the infrastructure, especially roads and road connectivity in many of the rural markets, I think this is definitely helping the scooters and the premium and super premium to grow. And of course, the support of retail financing.
If you can just help us understand where are we on the capacity side? What are the plans we have for improving capacity and improved availability of your products?
See, one thing, thanks to all the customers, our products are in very good demand in the market, thanks to our customers. And also recently launched products are also in good demand. End of December maintenance of f plus a few holidays in January, there is a little bit of challenge because end of December, there are company holidays on maintenance of f, which is very important for the factory. And then you have the New Year Day and then Pongal and these are some challenging times where there are some requirements of company holidays. Barring that, there are no challenges. And for taking capacity increases, it takes about 2 months to 3 months. And fortunately, we have been very proactive in investing behind that. And we always believe that the dealer should keep only 21 to 30-day stock because we want products to be fresh to the customer. Of course, in the EV side, we had a setup setback because of the magnet availability. We t ried our level best. Now it is recovering. I can tell you that it is recovering. And hopefully, by another month, you will see full supplies of EV also into the market.
Sir, any thoughts on the export market, sir, final question?
Export is also doing well. You have seen -- and we are expecting Q4 also should do well. Like I said last time, Africa, the last year had a bad year, but industry has done. It has come back well, and we are growing ahead of the industry. And I'm very sure Q4 also, you will see this kind of an industry growth, and we will outperform the industry because many markets, we are doing extremely well, and we will continue to do the same kind of focus in Q4.
If you look at other expenses in the previous quarter, we talked about 3 one-offs in other expenses. But in this quarter also, the other expenses growth seems to be ahead of volumes. So any one-off or anything you would like to call out in that?
See, the other expenses, most of them are related to the variable expenses related to packing, freight due to the volume growth. The only one of the things a little bit higher this year in this quarter is marketing expenses because you know the number of products we launched, We had about INR60 crores of additional expenses because of that. Otherwise, if you look at the other expenses, one is packing freight in line with that. Then marketing, I already told you. And new technologies, R&D, we always -- we put our investments, And this quarter, we have the maintenance, the annual maintenance. S o we spent about INR15 crores, which is as per plan. So overall, there is nothing unique other than the launch-related marketing expenses.
But sir, just lastly, precious metals have been the one which has seen the most inflation. Any number you would want to share as percentage of sales, how big that is?
See, overall, we have to look at it because when the customer looks at it, they want to look at as a product. So there has been increases in aluminum, copper, zinc, everywhere. So platinum, palladium, rhodium and with BS-VI, the contents are a little higher in these products. So I think as a total, we look at what is the impact ? and impact, maybe about 0.2%, 0.3%. I don't think it is huge.
Just wanted to hear your thoughts on how do we now think about the investments in the business because my understanding, we've also invested almost INR900 crores in subsidiaries in this quarter. So if you can give us some color on how do we see the investments going forward?
See, Norton, I'm extremely happy the products are getting ready, okay? We are now preparing for -- I'm very sure all of you, whoever has visited Milan show, you would have seen the products. And these products are going to hit the market in 2026 this year. You will see the growth coming, and they are super premium, and it is going to definitely delight the customers globally. So once we have a very clear plan of action to go to the market, we will definitely share with you. But -- this is a very, very important year from the Norton point of view. Now coming to investments in Norton, the first year, we have to put the products and we have to support it with marketing because we want to build the brand in a very, very strong way. Now coming back to the second question on INR900 crores, the delta this quarter has been TVS Credit Services, we have invested about INR200 crores. And for the prelaunch or pre-marketing of Norton, we have given another INR60 crores, INR 70 crores additional during last quarter, including the EICMA show, okay, EICMA Milan show. So I think these are all very measured delta and also the ION PT TVS project, we have invested about close to INR100 crores.
Sorry, sir, just a clarification, you mentioned INR 60 crores incrementally Norton, but the total -- like I'm just trying to get the breakup of this INR900 crores.
This will come to this quarter. Last quarter is what I said.
Sir, first question I had was on Mexico. Could you sort of tell us what's the impact of the new duties? How much were we paying currently? And what is our exposure to that market?
So we see, first of all, we are now building Mexico, okay? As of now, while there are some impact on the duty, we are also looking at localization. So we are not seeing a serious impact at this point of time because the volumes are low, and we are also trying to like increase our local content. So possibly, it may take about a couple of months' time. So it is not going to put a huge impact on TVS Motor.
Just a related question was on like PLI, we've been previously indicating about a 50 bps benefit because of PLI. Would that have gone up in this quarter or it's still at those sort of levels?
It has a little bit gone up. It is about 0.7%.
Sir, I was just trying to understand, so whole EV portfolio is now accruing PLI? Or is there some portion which is still not accruing any PLI benefit? Orbiter as well?
There are a few products where above certain price there, we are not eligible and the volume is also very small.
My first question was around the investment and capex plan for the year. At the start of the year, you had spoken about capex target of INR1,600 crores and investments of INR2,000 crores. So are you looking at revising those targets that you had for this year?
The capex will be around INR 1700 crores or slightly around that because we are also now looking at increasing some of the areas capacity given the kind of growth what we have seen, okay? And investments around INR2,900 crores overall.
So just a clarification earlier to Gunjan's question. You last quarter hadn't shared the Norton investment. So if you could just share what was the investment last quarter over which there is an incremental INR50 crores, INR60 crores?
I think last quarter, it's about INR240 crores and this quarter, about INR290 crores, Norton.
My second question was around your commodity cost. You spoke about 0.2%, 0.3%. Is that the total commodity basket impact or only the precious metals, which we are talking about? And has all of that already been flowing through your material cost or there's something which is yet to come through?
Total may be about 0.4% at best. Some are in Q3, some are in Q4, some are in Q3, some are in Q4, okay? So this is where I said we want to look at very closely the top line and look at growing faster than the industry. So you will get the scale benefits. In some areas, we also increased prices. For example, early part of this quarter, we have taken about 0.3% price increase. So it's a balanced review, what we look at.
My question is on the currency, what is the realization we've had for the quarter? Is there some hedging we are calling or we are realizing as per the spot rates?
We have a hedging policy, and we strongly follow that. It's a very robust policy where we cover the net exposure over a period of time. And for the current quarter, I think the realization is around INR88. Probably may get as per the policy, those benefits will accrue over a period of time. It's a policy where we cover the next few quarters. That's not a few quarters, a few weeks. 12 weeks, I guess.
Sir, can you give us the capacity numbers for overall and for EVs that we have currently?
EV, we are producing about average 30,000 to 32,000 of iQube. And as of now, we are producing about -- they are coming closer to 10,000 of Orbiter. We are reviewing that for next year. We are reviewing that for next year, and we are also investing. Possibly in the next call, I'll be able to give you the kind of increases we are looking at. But we are definitely investing in capacity because this is something which is growing.
And sir, just lastly, on the investments, we have increased the guidance to INR2,900 crores from INR2,000 crores. Where is the additional investment going towards?
Investments, one is on Norton. Another one is on TVS Credit Services. And we have also invested behind the ION project, which is part of the PT TVS. So -- and the e-bike business, okay? So overall, these are the areas. These are the areas we have done. And we have also -- you know strategically, we have invested in Dubai for international market. I think all this we highlighted in the last 3 quarters, This is primarily -- for more focus in the international and growing the international market.
And on the commodity side, would you also have hedges, sir, which can delay the impact of the recent commodity price increases?
We closely monitor here because this is something we also take advice from hedging agencies, and we very closely work with those people. We are not hedging at this point of time. We take advice. That's what I said, okay? According to me, we have to closely monitor the situation and then work. But what is most important is you have to improve the scale. Scale can help you to absorb, then you have to look at category by category, and we can look at what kind of overall value you can give to the customer. And that will give you an opportunity to look at some small price increases. I'm not saying fully you can pass on, but you have to look at on a balanced way.