Greaves Cotton Limited (501455) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to Greaves Cotton Limited Q1 FY '21 Earnings Conference Call. We have with us from the management today, Mr. Nagesh Basavanhalli, Vice Chairman; Mr. Ajit Venkataraman, Executive Director; Mr. Amit Mittal, Chief Financial Officer; and Mr. Arun Srivastava, Head of Strategy. [Operator Instructions] I now hand the conference over to Mr. Nagesh Basavanhalli, Vice Chairman of Greaves Cotton Limited. And over to you.

Thank you. Good morning, everybody. Thank you for joining the call today. We're happy to talk to all of you. We do hope that you're all doing safe amidst these trying times. As you may be aware, we've just recently concluded our AGM last week, and you may have gone through some of the recent announcements. As part of my new role, I will continue to provide the strategic direction to Greaves Cotton and be actively involved in the deliberations of the Managing Committee of the Greaves Cotton, which comprises of the Chairman and the Vice Chairman, even on a non-executive capacity. I will also continue to be a member of the Ampere Board, which is Greaves Cotton's EV venture. And I would like to thank everybody for supporting us during this journey. Let me also take this opportunity to welcome Mr. Ajit Venkataraman as the Executive Director of GCL. Ajit until now has been heading our automotive business for Greaves. And now in his new role, Ajit will take over the executive responsibility of Greaves Cotton as the Executive Director and build momentum of the organization on the automotive engines business, the aftermarket business, gensets, farm sites, so basically the auto and the non-auto and then the aftermarket businesses. So he will talk to you over the next couple of minutes and explain his vision on how the business is going. Just one quick word regarding the new mobility. We have a very strong team that will work with the managing committee and will continue to add value on the new mobility business, the Ampere and the Bestway as well. With that, let me invite Ajit Venkataraman to talk to all of you. Thank you. Ajit, over to you.

Thank you, Nagesh, and good morning to everybody on this call. It's indeed a pleasure to connect with all of you on this call. And I'm happy to be part of this dark moment and period where Greaves Cotton is in the cusp of a new change. We all have been facing tough times during COVID, and the industry has seen a sharp decline in the overall performance, and we are not immune to this pandemic-led slowdown. It has been challenging period worldwide, and we are adjusting to this new normal by pursuing innovation and staying invested in strategically important projects. We have kept up the momentum. The automotive business has been good -- has seen a good acceptance for the BS-VI engines from OEMs. So April and May has almost been a muted response in this quarter. We have stabilized the supply chain and manufacturing, and we have started seeing some good recoveries in June onwards. While there has been some margin dilution with BS-VI, we are still stabilizing the supply chain costs. And with active cost reduction programs, such as the Propel, we are confident of improving the margin, just like we have done in the BS-IV program. Now that the BS-VI launch have been completed, trials on stressed engines with OEMs have gathered pace, and the results are encouraging. We are hopeful of a positive result soon. The aftermarket business has been on a slow start, and we expect the service of spares demand to go up from Q2 onwards, as more vehicles start running on the road and once the lockdown, et cetera, gets lifted and the market reopens. The business has also been -- the -- we have completed the VRS scheme in Ranipet, which will help in providing a long-term structural cost reduction for the organization. When it comes to aftermarket, farm and non-automotive engine, we are seeing green shoots of recovery and, along with other businesses, it will help in driving the growth recovery. Over subsequent quarters, we will be interactive much more in detail. For now, I will wish you that you stay safe and healthy in these trying times. Can I invite Arun to take over now?

Thanks, Ajit. I will now walk you through some of the business highlights. Q1 financial performance did get sharply impacted due to the lockdown in April, May. However, like Ajit said, from June onwards, we have started seeing some rebound in growth. All manufacturing units are now open. The supply chains have stabilized, and almost 75% of the dealerships are now operational. Also despite the lockdown, the teams continued the trust on cash management and receivable management, and we have seen some strong improvement in this area. With a firm focus on future, the company launched its new IoT-enabled smart genset, which we call the Greaves Genius, as well as new high-speed electric scooter, Magnus Pro. Our EV business also strengthened its positioning by entering the e-3 wheeler space with the acquisition of Bestway that sells e-rickshaws under the ELE brand. The company has also accelerated business development with new OEMs for our BS-VI engines, both the diesel engines as well as the CNG engines, in the domestic market as well as we are pursuing both domestic and global OEMs for our nonauto engines. Ampere continues to accelerate, and almost 40 new dealerships have been opened since lifting of the lockdowns began and with new B2B OEMs as well. The business has also improved market share during the period to around 24% amongst the organized players. With the new Magnus Pro high-speed scooter as well as new business model innovations, like the subscription services, the digital initiatives and the Bestway e-rickshaw portfolio, we're confident that Ampere will continue its accelerated growth journey. Greaves also played a very strong role during the lockdown period as well as during the unlocked period by organizing service camps for auto rickshaws, including free service camps on the route for migrants who were returning back home. We also had the drivers ensure social distancing through customer shields, PPE kits, et cetera. In addition, we also provided gensets to quarantine facilities and engines for disinfection machines as well as backpack sprayers for localized disinfection. The company also actively engaged with its stakeholders, be it customers or channel partners or employees, to ensure their well-being and development during this tough period. We hope to continue building on these initiatives to deliver a stronger performance in the year ahead. That's a brief from my side. I would now like to invite Amit to take you through the financial highlights. Amit, over to you.

Thank you, Arun. Good morning, everybody. I hope everybody is safe and keeping healthy.

Sorry to interrupt, sir, but can you speak a little closer to the device, please?

Sure. So just for a moment.

Yes, sir. This is better.

Okay. So as Nagesh, Ajit and Arun briefly mentioned, due to the pandemic, we got impacted with 2 months being virtually a washout. June has shown some turnaround in terms of a decent pickup, and we hope that will continue now. But the quarter obviously took a beating, and we reported a revenue of INR 158 crores, down 69% against close to INR 500 crores in the same period last year, and a loss of INR 30.86 crores against a profit of INR 34.5 crores last year. I think the focus has been in terms of cash management, which Arun has alluded to. So we've seen a net -- over the period, a net reduction in our working capital by close to INR 167 crores. And cash, we remain to be net debt free. We have drawn down some debt at the beginning of the pandemic because we were expecting possibly issue in terms of banks citing on liquidity, but now we are a little comfortable with the situation and have started repaying it down. So at June end, we had INR 19 crores of net debt which we were -- debt, which we were carrying with us, but that is gradually being repaid off. And we -- by next quarter, and we shouldn't be having any debt on our numbers and with borrowing limits available to us. So the results are obviously, because of the unprecedented situation, are not comparable to last quarter last year as the business scenario is very different. I think we have announced already that we have concluded for a large section of the workers at Ranipet unit in Tamil Nadu. VRS settlement has been reached with them. They've all accepted, and we expect to do the final settlements at the end of this month, and the charge for that would be obviously taken as an exceptional item in Q2 results. But we now expect to see, going forward, the resultant savings coming through and flowing through into our bottom line going forward. Meanwhile, we are working in terms of plans to relocate the machinery and drawing up plans for the -- of what do we do with the unit itself and the property there. That's all from my end. Happy to take any questions whenever the Q&A session starts.

[Operator Instructions] The first question is from the line of Ashutosh Tiwari from Equirus.

Yes. So my first question is on the frequent changes in management. I think -- I see the company is going through a transformation phase because of diesel 3-wheelers segment, which was a big segment for us earlier. And now the contribution comes from there is going -- is a declining industry, and we are trying to densify through aftermarket and e-mobility and all those other areas. Now we probably needed the stability to be sustained. But first Karan left and then Neetu left. And now you, Nagesh, also is leaving. So this raises some question marks on the stability. So how do we address this thing because we have seen over the last 1 year 2 people leaving the top management side?

Ashutosh, I'll take the question and Ajit can jump in. Ashutosh, I think you rightly said, we are a company in transition. We are trying to get ready for the next 30 to 50 years, right? And the good part is we have a strong bench. I mean, it's an attribute for that -- the succession plan has come from within, not just that at the Ajit Venkataraman level, but also a couple of others? So we will continue to build that bench strength. And in my capacity as a Board member and as a Vice Chairman, I will continue to advise, mentor, work with the executive leadership. So I think that part, at least from my side, I'm going to add that. Ajit, do you want to add anything to that?

Sorry. Agree, Nagesh. Nagesh is going to continue. It's not that Nagesh is leaving. He is going to be continuing as a nonexecutive Vice Chairman of the organization. And therefore, there is definitely a continuity at the leadership of the organization. And as Nagesh also rightly pointed out, many of the new leaders that have started emerging, as a result of this change, are coming from within the organization. And therefore, there is no question of continuity of the strategy and the implementation that is going on at the moment.

I hope that I think the team is stable going ahead. Secondly, I want to understand that...

[Operator Instructions] The next question is from the line of Nagraj Chandrasekar from Laburnum Capital.

Given the better understanding of the 2-wheeler business and the economics of electric, with our ownership of Ampere, can you give me your point of view on the pace of electrification in both cargo and passenger 3-wheelers given same subsidies and incentives. What should be the pace of falloff of our diesel engine sales volume over the next, say, 5, 10 and 15 years, in your view, in both the passenger and goods segments?

Yes. Arun, do you want to take that?

Yes. So yes, I think it's a very interesting question. What I would say is that during this decade, as we have been maintaining that multiple technologies, we'll continue to co-exist, be it diesel or CNG or electric. Now what will happen is different customer segments -- it will be driven by different customer segments. So for example, if you look at the 3-wheel category today, on the electric side, it is primarily on the e-rickshaw side where the massive transformation has happened, where the pedal-driven cycle rickshaws have been replaced by e-rickshaws. That is because it can still work with a slightly lower capacity battery size and keep the vehicle cost economics in place. As we move ahead, the -- some of the semi -- some of the city 3-wheelers may start getting electrified, and a slow transition will start happening. But on the bigger 3-wheelers and the cargo 3-wheelers where typically Greaves is much stronger, I expect that diesel will continue to play a role in a slightly longer time. What we have done in our portfolio is we have upgraded our engines to BS-VI, so they comply to all the regulatory norms. We have said in the past that we have launched -- already launched a CNG engine, which is for the wider body 3-wheelers for the semi-urban and rural markets. That engine is already on the road. On the city 3-wheeler side, we are working on a fairly new engine technology, which we call the CREST technology, which will start seeing commercialization fairly soon. And on the third side, we have recently, through Ampere, entered electric rickshaw business, which is a fairly large market through acquisition of Bestway. So we are offering solutions to our customers in all the 3 powertrain categories. And depending on customer segments, we are ready with the solutions. So that's our thinking on those trends.

Thanks, Arun. Just to close this out, I'll just add. The strategy, like Ajit said, we will continue the strategy. Our strategy has always been on the demand. We went to fuel agnostic. We said diesel plus petrol plus electric. So to your question, as and when the inflection point happens in electric, we should benefit from both the 2-wheeler and 3-wheeler. And as and when the CNG market has more opportunities, which we know we do in the 3-wheeler side, I think Ajit and the team are working on that. So I think that's kind of where the genesis of the -- and demand strategy, where we are going to be operating in terms of giving the value proposition across the spectrum.

And just a quick follow-up. Just what is the biggest hurdle to a 3-wheeler customer in a city, be it passenger or goods, opting for an electric in your view right now if you add it through sort of rank and the biggest hurdles given same incentives above a certain amount of kilometers run now make it cost competitive?

So I was -- yes, go ahead, go, Arun. Go on.

Yes. So it is -- the 2 things. One part is still the initial price hurdle, especially if you are looking at some of the segments where the running is 100-kilometer plus every day. We are still some distance away from initial price parity, even after paying 2 subsidies. So that is one part. The second part is also in terms of comfort and awareness, so areas where people are working in closer circuits. There, the fixed -- or semi-fixed roofs there, the comfort is much higher, whereas there are 3-wheelers drivers travel across cities, there, probably the comfort factor and ranging likely still plays a role.

The next question is from the line of Mayur Patel from IIFL Asset Management.

Yes. Again, asking the same question, which is the first one, in a short span of time, we are seeing 3, 4 attrition from the top management team, including Neetu and the strategy person, and Nagesh. Just wanted to have some comfort that what is driving this high attrition in a short span of time, if you can just explain a bit on that.

Sure. Let me take this one. Again, I think I alluded this from my side, it was for personal reasons, right? And I think in one of the cases, people got a good offer, and it was hard to beat. And we would not like to lose some of the good people, but I think it has happened. But like I said, the bench is strong. And Ajit and the team here will -- I think, they are well placed to continue the strategy and drive future success. I mean, I'm quite confident that they will do that.

Sure, just allow me one more question. So going forward, like everyone is going through these turbulent times, when we look at one year forward in FY '22, what will drive the overall recovery? Will it be the core engine automotive business, which still finds a big chunk of the total mix? Or will it be the aftermarket, which is like around 25% of the mix? Or is it agri, which is firing well for others, like tractors and agrochemicals and all, but still we have to see any sharp improvement in our agri-related businesses? So which part of the business will be leading the pack in terms of pulling us out of this painful period and back to the growth trajectory?

Ajit or Arun?

Yes. So I would say, we are working towards and seeing recovery across segments. So 3-wheeler segment is facing the maximum stress right now, and you're right on that. And even if you look at amongst that segment, cargo has started to improve now. Passenger is still low because people mobility continues to be stressed at this point in time. So 3-wheeler, I believe, may take slightly longer, but all the other segments, like aftermarket or non-auto engines or including farm and the new mobility businesses, we are seeing already green shoots emerging and recovery happening post June unlock. July, there was -- again, if some markets are again locked down, then if anything, which is beyond controlled situation, but otherwise, we are seeing that growth has started coming back for the other segments.

So can I just add to what Arun said? The business, the 3-wheeler business is very similar to the commercial vehicle business. The product itself is a business -- individual business. And we have similarly seen a drop, which we have seen is very similar to that of commercial vehicles, almost 80%. What we have seen is that, as Arun mentioned, the commercial and the cargo part of it has seen a significant improvement mainly due to the last mile delivery. And on the other hand, passenger vehicle, passenger 3-wheeler is still on the recovery part because of the social distancing norms. Until that comfort happens, it is going to be stressed.

The next question is from the line of Bharat Gianani from Sharekhan.

Yes. Just wanted to touch base on your mix in the auto segment. I guess, 3-wheeler is about 30%, 45% of the top line. And in that, what would be the split between passenger and cargo, if you can just provide that?

So typically, we don't give the split. Just like the entire industry, passenger is on the higher side and cargo is on the lower side. But during -- here, we have seen more sales in the cargo sector.

Okay. But the 3-wheeler will be about 45%, 50% of the top line currently, roughly.

At a company level?

Yes.

At a company level, yes, it should be.

The next question is from the line of Ashutosh Tiwari from Equirus.

Sir, as of now, June and July, this segment, we are seeing better pickup, and there were some restrictions on the Chinese trailers. So are we sourcing anything from there? Or we -- because we started our own in-house production of trailers. So how are you seeing that market? Because we are seeing some benefit to other dealer players in the market.

Yes. So on the trailer side, you're right. So the farm has been -- segment has been much stronger. So we do import some equipment from China, but we also started our indigenizing program and some -- whatever we have sold or some of the areas where we do well are strong local value addition. So I think towards later part of Q1, the farm segment did perform fairly well. And in addition to power tillers, we also look at the volumes part. Some of the other light agri equipment, which are the smaller equipment, actually grew 50% over what we did in the first quarter last year. So farm, we are seeing some green shoots.

And Arun, if I can just come in here, please. In terms of the overall China question, because I'm pretty sure there may be other -- at the strategic level, the company and the management and the Board has really taken this very, very seriously. So whether it is the traditional various business, auto, nonauto, or whether it is new mobility, Ampere business, increasing the localization, increasing local content, reviewing their supply base, reviewing their risks and exposure to China has been critical part of our risk management strategy. So I think we're going to see a lot of action. Some have already been completed, some have been accelerated so -- to mitigate any potential China risks to the portfolio.

And one related question is that the Bestway that we acquired, the 3-wheeler e-rickshaw company, I think they must be sourcing sort of the motor control in China only. So how do -- so is it still being sourced? And how do we -- are we having a plan to basically source it locally or make it locally?

Yes. The plan is for a very strong localization. Just like for the 2-wheeler business, the same program has been extended on the e-rickshaw side. The good part is there is already a very strong localization levels for our e-rickshaw business. But some of the other critical components, which still come from China, hopefully, by end of the year, we should be able to mitigate this.

The next question is from the line of Mayur Patel from IIFL Asset Management.

Yes. So Ajit, I heard about you since my first job in Tata Motors. And clearly, your application was very strong right from a strategy base, and you setting up the entire business since Tata Motors Thailand. Just want to understand, the strategy in place, which Nagesh and the team and Neetu set up in terms of growth path for next couple of years. You taking over the executive charge, is there any change in strategy you are contemplating? Or would it be just on the same strategy trying to bring back the growth?

Thanks for the question. Let me reiterate that there is a lot of thought process, which has gone into the development of the long-term strategy for Greaves part. And actually, both Arun and Nagesh have been an integral part of it. And the strategy rollout has been happening over the past 3 to 4 years, and it is very evident from what we can see in the portfolio that we have got. And it's a very well thought out strategy. And fortunately, for me, it will be making sure that the implementation, which is already in place, is taken to completion. And also, yes, there may be tweaks, but at this point of time, I think it is a very well thought out strategy.

So the next question is from the line of Jayashankar Nair from IIFL.

My first question was with regard to the marketing trajectory. Given the pressure what we have on the transition to BS-VI, so when do we see that stabilizing and whether we actually see it coming back to that? We know Greaves as a company with a 14% kind of EBITDA margin, 13.5% to 14% EBITDA margin. So when do we see that trajectory coming back? And eyeing to that particular margin, in terms of the revenue quarterly run rate, which we were clocking a net debt INR 475 crores, INR 500 crores, so how long do you see that happening? And what's the time frame, if at all something has been crystallized from your end or some thought process on that?

So Arun, let me take this question. So in terms of the margin profile, since the BS-VI engine is a completely new technology and the round-shaped engine, definitely, there has been some margin deterioration, which has happened. There have been plans around the recovery of those margins, just like what we did during the period when we shifted from BS-III to BS-IV. So we believe that over the next 4 to 6 quarters, through sustained cost reduction, the margin profile should come back. The challenge, which we have faced is in Q1. The supply chain was significantly disrupted because of COVID. And because of that, some of the supply chain costs, et cetera, are still not at a steady state level. So I do hope that in the next few quarters, it should gradually start inching up. You'll start seeing improvement. And hopefully, sometime next year, it should be back to the same state. So that's on the margin side, yes.

And on the top line quarterly run rate...

Top line, typically, we don't give a guidance, but we are all working towards initiatives to ensure that it comes back to the steady state level. But typically, we won't give guidance.

And just if I can squeeze one more. With regard to the CREST engine and its acceptance, any time line you are seeing? Any acceptance from the OEMs you're seeing in a sense? I mean, at least, what I felt was that there's was some confidence, which you're showing. But in time lines, we can actually put to the CREST engine.

So CREST engine, like we've been saying that, very busy to the BS-IV -- BS-VI transition programs, and that is where some of the business development and technology discussions kind of slowed down in the past few quarters. But once BS-VI has been launched, even during lockdown, we have been working along with the OEMs, and we have strong interest from some of -- even some of the bigger OEMs. So hopefully, in the next few months, we should be able to have a positive news on CREST.

[Operator Instructions] The next question is from the line of Ashutosh Tiwari from Equirus.

So last time, you had mentioned that you'll probably share the BS-VI price increase in this quarter because it was taking some time to stabilize it with all the customers. So how much price increase happened with BS-VI engines?

I think, like I said, because of COVID, it's still not stabilized because the focus was on manufacturing. It was on stabilizing the operations and not on cost efficiency in the past 3 months. But going ahead now, I think, gradually, we are seeing some signs of stabilization. So hopefully, by next quarter, it should stabilize.

On this CREST engine, is it -- so we had earlier initially partnered with Pinnacle in developing some things. Are they still the partners or they are not?

They're still the partners. Now what we have started doing is field beta stage. It was primarily with -- along with Pinnacle. Now as we are moving ahead, we had started engaging with customers. So we're working together on this.

Okay. And lastly, sir, on VRS scheme, which has come for Ranipet workers. So how much saving in employee costs we can expect from there on annual basis?

So Ajit, you want to take that one?

I'm sorry, Arun. Thanks. In terms of the savings, which are coming from Ranipet, we have been -- we will be shutting down the operation. And we will be -- we are in the process of -- we just have finished and the impact of that will be starting to flow from the next quarter onwards.

But any number that we have?

Right now, we are not in a position to give out those numbers. Still, it is completely okay.

Okay. But what we can definitely add over there is it's not a very long payback project, and we will start seeing good structural cost reduction happening with Ranipet closure.

The next question is from the line of Bharat Gianani from Sharekhan.

Yes. Sir, my question is on the Ampere electric side. We had been guiding for the breakeven levels for the company at the EBITDA and the PAT level. So what's the status on that? Are we still maintaining for the guidance for EBITDA breakeven at this year? And do you still maintain that? Or like what's your sense on that? So just wanted your comments on that.

Yes. So in terms of the thinking and strategy, still, nothing has changed on Ampere side. We continue to target, which has been kind of a key driver for all the businesses of Greaves. So having said that, because of COVID, there has been no impact on the market and consequently on Ampere top line as well. So there may be some delay, but we are very confident of achieving EBITDA breakeven as the sales increase in the future -- in the next few quarters.

The next question is from the line of Bhagyesh Kagalkar from HDFC Mutual Fund.

Regarding Ampere, I would like to have some clarity, please. First, in 3-wheeler, you acquired a Noida-based company, e-rick, essentially. Another point here is in 2 wheelers. Okay, there is a talk that came as a narrative, and the lead asset has been asked anywhere from the deli policy in 2 wheelers. In 3 wheelers, I believe, they have given the concession, the deliver on policy. What is the way forward? Is there a confusion in the minds of how unique or like maybe like yours? Maybe it is a lead asset only that will remain dominant for some time because it is cheaper. So one needs to have products in both lines. What is the strategy for that? And also what is the volume you feel that you will do in 3-wheelers and 2-wheelers in Ampere next year, please, next fiscal year?

So also a couple of points. So around -- let me take the 2-wheeler segment first. So 2-wheeler is if you look at the market until about 2 to 3 years back, it was primarily a slow speed, less than 25-kilometer speed market. And so that segment, lead asset products were fairly well accepted. Now as the market has started moving towards higher-speed category, and it is also true for Ampere, with our product portfolio on the high-speed side, it is all lithium-ion. Gradually, I believe that it's all based on cost economics. Lead asset in the 2-wheeler segment will slowly and steadily start giving way to lithium-ion as the costs are coming down. On the e-rickshaw side, the bulk of the market today is lead asset. There also, we are seeing some early signs of shift towards lithium-ion. So in our portfolio, we have lead asset products, which are the current selling products. The lithium-ion products also are ready for launch now. So again, like Nagesh said initially, that we give that choice to the customers. We follow an end-to-end strategy that we will have a complete basket for affordable mobility products and let the customer decide what they want. So that's how we are looking at it. Does it answer your question?

; No. Yes, I would like to know what capacity is for your 2-wheeler and 3-wheeler post these headwinds?

I think capacities are not a constraint for the next 12 to 18 months. We have adequate capacity.

Okay. And any chance that we'll be able to market the 2-wheeler successfully in the B2B segment without compromising on profitability, obviously?

No. So we are already doing that. In fact, we have probably among the first ARAI-certified cargo version of the 2-wheeler, which we are supplying to B2B customers, like BigBasket. And then there are pilots going on with some of the other ones. Then for the ride-sharing applications, we work with customers, like Bounce, et cetera, who have sourced a large number of 2-wheelers from us. So we are very actively working on both B2B as well as the B2C segment.

Okay. The cargo version of the electric 2-wheelers, which are pretty good distance. Is my understanding correct?

Yes, yes, yes. They are high-speed products because of lithium-ion battery. And then we are seeing a very strong strength of Ampere in terms of product customizations based on the application requirement and the B2B customer requirement. So that is a significant strength for us.

Okay. And sir, any view that, okay, government is taking positive on the swapping outsourcing function that some people are doing. So what is your view that -- is there any chance in doing swapping or no you would like to have to patent in the 2-wheeler as well as 3-wheelers?

So we are ready with the technology solutions across. We have already made our batteries portable, so that they can be taken to houses for charging. You will not be constrained by where the vehicle is parked. So that is already done. We -- our vehicles are ready for swapping solutions as well as the customer preferences evolve.

As there are no further questions, I now hand the conference over to Mr. Nagesh Basavanhalli for closing comments.

Okay. Thank you, thank you all for attending today. Somebody, I just want to leave you with 2, 3 things, which as I heard the conversations go through. One is on the China derisking and the localization. As with our supplier derisking, all that is in the works, and it is being handled appropriately. Ramping up month to month, the management team has already talked about and how they see that, right? In terms of the VRS, more details will emerge as we go, but rest assured that it fundamentally helps improve the bottom line of some of the businesses. That's what Ajit was referring to. Coming to Ampere and Bestway, I think the localization continues. The B2B and the B2C offerings will continue to increase. Obviously, once the dealerships are all up and running, as you know, I think this will only get better because we're still operating at about 75% of the dealerships so far. So thank you, again, for all the support. Thank you for your faith, and we will at least support the management team as they go through this transition. But -- and I'm pretty sure, a lot of one-on-one conversations will continue. Thank you so much. Thanks for your time. Have a good day.

Ladies and gentlemen, on behalf of Greaves Cotton Limited, we thank you once again. Stay safe. With this, we conclude today's investor conference call. Thank you all for joining us, and you may now disconnect your lines.