Tata Motors Limited ($TMCV)

Welcome to Tata Motors Q4 and Full Year FY '26 Results Call. I have with me Mr. Girish Wagh, Managing Director and CEO; G.V. Ramanan, CFO; and the Investor Relations team. So I'll first walk you through the results presentation, and this will be followed by Q&A. [Operator Instructions] And with that, I hand over to Mr. G.V. Ramanan.

Thank you, Sneha. To the next slide, please. Before we get into the numbers, just a quick word on the presentation format. Demerger being effective from 1st of October 2025. Tata Motors is now a pure-click commercial vehicle companies. And this is a defining shift changes how we think is most appropriate to present our financials. Historically, we reported a CV segment, which was an internal carved out CV operations from within the erstwhile combined entity. That was a practical necessity then. Starting this quarter, we are presenting stand-alone financials, including joint operations in Tata Cummins as our primary lens. This gives you a cleaner, more complete more directly comparable picture of the business going forward. Operating segment is the CV segment, comprising TML and subsidiaries. It's now included in the consolidated financial statements. Go to the next page, please. FY '26 is a year of strong execution across product, market and strategic initiatives. One of the key highlights included: we launched 17 new Next-Generation Trucks at the start of Q4. And earlier in the year around June, we launched the Ace Pro, which is positioned as India's most affordable full wheel mini-trucks. In February, we achieved a significant milestone by securing the largest ever order for 70,000 units, Yoddha and Ultra T7 vehicles for Indonesia. We also secured orders 5,000 buses from multiple use, porting India's mass mobility transformation. Collecting our focus on operational excellence, Nagar plant received the Golden Peacock Award for quality, and we also won multiple honors the Apollo CV awards 2026. Go to the next page, please? Going to the major strategic and corporate development during the quarter, on the Aveco transaction, all -- most of the regulatory approvals have been secured, and we are actively pursuing the remaining approval. We expect a transaction closure by Q2 FY '27. The Board has recommended a final dividend of INR 4 per share, and this is subject to shareholder approval. This will result in a cash outflow of close to INR 1,500 crores. And go to the next page, please. Let me now take you through the full year financial picture. And I think the headline really does say it, consistent growth across every metric that matters. Starting with the top line, revenue came in at INR 77,000 crores for FY '26, up from INR 66,000 crores in FY '23. Our revenue improved 11% Y-o-Y in FY '26. The underlying demand trajectory has been firmly upward. While I'm really pleased with the margin story, EBITDA margins have expanded from 7.8% in '23, 13.2% in FY '26. That's nearly 550 bps of structural improvement over 3 years, not a quarterly -- just not a 1 quarter phenomenon. In absolute terms, EBITDA has doubled from INR 5,100 to INR 10,200 crores now. PBT before exceptional items stands at INR 8,700 crores and is very robust. We crossed the double-digit EBIT margin for the first time at 11%. This is the result of operating leverage playing out as we scale, combined with cost discipline, improved realization, and we've maintained across all the business. What I also wanted to draw your attention to is the chart we're particularly proud of is the bottom left panel on noncyclical revenue growth. Over the period, noncyclical CAGR is running at 2.7x, a cyclical CAGR. We've been deliberately building this mix, and this is now showing up meaningfully in the numbers. On capital allocation, free cash flow generation was approximately INR 9,200 crores in FY '26. That's about 12% of revenue. And even after investing INR 2,800 crores back into the business, we remain strongly cash generative. Finally, the auto ROC runs at 72% is an industry-leading report and EBIT doubles capital discipline holds returns follow. That's the flywheel working as intended. Next page, please. We saw a strong volume momentum across product lines in FY '26. Q4, Wholesale reached close to 131.8 units, a 25% year-on-year increase. For the full year, total volume stood at 428,000 units, registering a 14% increase Y-o-Y. Looking at the product lines, in Q4 FY '26, all of them registered a double-digit growth on a Y-o-Y basis in Q4. International business continues its growth trajectory with a Y-o-Y growth at 17% in Q4 and 54% for the full year FY '26, mainly led by the SAP countries. Next page, please. This slide represents the summary of stand-alone financials of Tata Motors, including the joint operations with Tata Cummins. Revenue for Q4 reached INR 24,500 crores, marking a 22% Y-o-Y increase due to continued quarter-on-quarter ASP improvement driven by pricing discipline and favorable mix. EBITDA margin expanded steadily through the year and exited Q4 at 13.9%, up 130 bps Y-o-Y. This is the 11th consecutive quarter of double-digit EBITDA margin delivery. EBIT margin for Q4 stood at 5.1% with FY '26, closing EBIT at double digit as well, another important milestone for the business. All 4 vehicle business delivered healthy margin and improved unit economics. Noncyclical business continued to grow at nearly 1.6x the cyclical business, supporting the overall profitability for the company. The full year profit before tax and exceptional items rose to INR 8,700 crores, an increase of INR 2,700 crores compared to last year. As PAT almost entirely translated into free cash flow, disciplined working capital management for the full year, free cash flow was INR 9,200 crores. It is 12% of revenue. This led to a year-end net cash position of INR 7,500 crores as of March 31, 2026. Moving over to the Q4 EBIT walk. The EBIT margin expanded to 12.1%, up 220 bps Y-o-Y, while PBT before exceptional items increased to approximately INR 3,000 crores. Higher volume mix, price realization together contributed nearly 250 basis points of EBIT margin improvement. Variable cost impact of 50 bps on account of elevated material costs due to inflation in key commodities, including steel, aluminum and copper. We also continued to see pressure from precious metals and certain important components during the quarter. In terms of other costs, lower depreciation and product development impact contributed positively by INR 102 crores. Additional benefit from PLI and incentive benefit was approximately INR 25 crores. Overall, despite commodity headwinds, business delivered another quarter of strong structural margin expansion by higher volume, better mix and improved realization. Moving on to the cash flow now. As mentioned earlier, our free cash flow is growing consistently over the years. Full year FCF for the company stood at INR 9,200 crores. Performance was driven by strong operating profitability, efficient working capital management, controlled CapEx execution and lower finance costs. Working capital remained very well controlled with trade receivables at INR 376 crores, inventory burn of INR 690 crores. This was largely due to strategic inventory that we built up towards year end in the context of the ongoing geopolitical development. Payable and acceptance, with the release of INR 2,057 crores. Let me also take a moment to acknowledge the fact that this FCF is also taking into consideration tax payment, which we did not have in the prior years. Our cash conversion cycle is best-in-class at negative 31 days. It means the business continues to be self-funding on working capital. Moving to investment spending. For FY '26 was approximately INR 3,000 crores, and this remained fully aligned with our planned road map. Total R&D expenditure amounted to approximately INR 1,700 crores. Capital expenditure and other investments totaled approximately INR 1,100 crores. For FY '27, we expect investments to remain broadly in a similar range. Our investment spends have been consistent with the guided range of 2% to 4% of revenue and growth and tech investments have always been prioritized. Moving on to the consolidated financials. The slide presents a summary of consolidated financial, encompassing both automotive and the nonautomotive subsidiaries. For Q4, consolidated revenue stood at INR 26,100 crores, and EBITDA margin for the quarter came in at 13.1. While PBT before exceptional item was INR 2,400 crores, on a full year basis as well, consolidated performance remained very strong. Revenue for FY '26 reached approximately INR 84,000 crores and the EBITDA margin continued to improve steadily through the year, closing at 12.3%. Consolidated free cash flow in Q4 was particularly strong at approximately INR 8,000 crores. This also included advanced receipts related to Indonesia order. As a result, strong operating performance, disciplined cash management, year-end consolidated net cash improved significantly to approximately INR 13,700 crores. And this was INR 4,000 crores in Slide 25. With that, for business update, I'll now hand this over to Girish. Over to you, Girish.

Thank you, Ramanan. So let's begin the market share. I think the market share has been trending upward. And 24 VAHAN market share improved sequentially with measurable gains in [indiscernible] vans, that is CV passenger and SCV pickup. Heavy commercial vehicles continued to consolidate its position. And in fact, in HCVs, we posted our highest offtake market share in a decade. So I think overall, the market share story has been strong in Q4 for the year gone by. Next. On the fleet indicators, transporter profitability, fleet utilization actually held at healthy levels through the year. This is based on our fleet age data tracking, almost 1 million vehicles. And this indicates sustained freight activity. Transporter profitability remained resilient, which continues to support new vehicle purchases. ESL is the single largest operating cost for a transporter and therefore, is a key monitorable as we enter FY '27. Going ahead. As I've said, H1 was muted, weighted down mainly by Operation Sindoor-related sentiment and early monsoon onset that compressed activity costs of the market. But H2 staged a clear recovery driven by the GST 2.0 led consumption demand. And Q4 was clearly the standout quarter of the year. As we see, the demand fundamentals actually remain intact. As far as volume is concerned, the offtake TIV grew 19% Y-o-Y in Q4. While Tata Motors volumes outpaced the industry at 25% Y-o-Y growth. For FY '26, the TIV growth was 12.5%, and it marked the highest ever annual volume, whereas Tata Motors grew 11.6% Y-o-Y. The Freight Index edged up quarter-on-quarter through Q4 on the back of firm consumption, softened a bit in March and April. E-way bill generation grew 15% on a Y-o-Y basis in Q4, in fact, accelerated to 19% Y-o-Y growth in March 2026. April 2026 continued in positive territory at 12% Y-o-Y growth, which, in our view, is a reliable proxy for the underlying freight activity. Esel sales rose 8% Y-o-Y to 8.7 million tonnes in March, reflecting strong commercial activity. April was at around 8.3 million tonnes, which is 0.25% Y-o-Y growth. Fastrack transaction volumes remained flat in both March and April. On the supply side, we did see for international business lesser transit delays, which were then proactively managed and exposure to affected transshipment hubs like Dubai, Doha, has been contained. We undertook a structured review of more than 130 Tier 1 suppliers for energy dependence, especially LPG and their supply chain resilience. We completed this exercise and have taken quite a few actions to improve the supply chain resilience. Export plans for the Middle East and North Africa region have been recalibrated in response to the evolving Middle East situation. And it will be prudent to say that the sentiment remains cautious and is being monitored very closely. Coming to the businesses. In trucks, we strengthened our product offerings with the launch of the Azura range in ILMCV, and of course, HCV, we launched a few of new trucks with higher payload and higher fuel efficiency. Now our entire truck range actually meets the stringent European safety standards on all the cabins. In buses, we enter FY '27 with a solid government order book, avoiding near-term volume visibility. In SCV pickup, we broadened our lineup with ASLNT and intra-EV launches, and this helped therefore, to improve the volume growth in Q4. In the parts and service business, we are able to sustain the higher growth trajectory. And in fact, I must mention that for the diesel exhaust fluid, which needs technical grade urea, there was a significant support from the government to ensure that sufficient quantity is made available and vehicles keep running in an uninterrupted manner. In Smart City, we now have more than 3,815 cumulative buses, e-buses deployed with almost 59 crore kilometers under the belt, and we continue to deliver more than 96% of time. In the fleet-age business, subscription renewals almost doubled from Q1 to Q4 with launch of new value propositions during the year. On the sustainability side, very happy to note -- happy to report that we had the highest ever EV retails in Q4 since the fame incentives have been discontinued. Also on the back of the new products that we've launched, including intra EV. In trucks, we signed an agreement with Billion e-Mobility and initiated deliveries of the 55-tonne elecctric tractor. And we work closely with the customers to actually deploy these vehicles in their duty cycles. We also signed an MOU with the VOC port in Tamilnadu for supplying and doing trials of 40 hydrogen H2-wise trucks. We have additionally received orders for around 250 new hectic buses. Going ahead, in Q1, for trucks, the priority is to drive growth through the NY '26, the model year '26 portfolio as also the higher payload variance and the increasing battery electric vehicle portfolio. In buses, the focus is on rebuilding market share on a profitable basis, while converting the government tender pipeline into supplies. For small commercial vehicles, the objective is to sustain the volume momentum from Espro, Ace and intra and build on the market share gains achieved in the later half of FY '26. For Parts and Services, the goal is to step up the growth to portfolio broadening and a fully digitalized demand and supply chain. We are cautiously looking at near-term headwinds, especially the commodity headwinds, which I already see a few questions being asked about and a subdued sentiment in Middle East and North Africa. Needless to add, I think diesel prices will remain a very, very key monitorable. But I think despite all this external noise, actually, the freight availability and the demand fundamentals remain robust. And with our refreshed product portfolio, I think we are placed well to manage this particular external headwind that we are seeing. So that's the summary from our side. We'll get into question and answers now.

The first question is from Kapil from Nomura. What is the growth outlook for MHCVs, LCVs in FY '27? And how much risk do you see to this from fuel price hikes? And do you think it will be a more back-ended H2 FY '27 growth? Okay. And then maybe I'll take the next question.

So Kapil, on the growth outlook, see, the April volumes have also been good for the industry and that we have seen a healthy double-digit growth in April. We have now been through almost half of May. And actually, the momentum, as I said, the underlying demand fundamentals are still there. As I said, I think we are monitoring all the external factors, especially the diesel prices, which will have significant impact on how the market pans out because diesel will have at least 30% to 50% impact on the total cost of ownership. And I think at this point of time, I would say that we will have to take quarter-by-quarter rather than projecting for the whole year with the kind of event that we are challenged with. And I would say, therefore, that despite this, we should see a single-digit growth, if not more, in Q1. I think that's what I would like to say at this juncture with regard to the growth outlook. And as we get in touch, again, probably we will be more wiser or this event would have been -- become more clearer for us to give a longer-term visibility.

The next question from Kapil itself, but a lot of other people have also asked the same question is around commodity cost pressures. So how much of it is expected in Q1? How much of it is getting passed on? And what will be the competitive intensity like? And the impact on margins? What will be the drivers for margins from here?

Okay. So I think the commodity bids are certainly serious. And we've already seen around 100 basis point impact in Q4. Beyond the impact in Q4, we have also seen significantly higher impact being seen in Q1, which is the quarter that we are in now. Now to address this, we have taken a 2% price increase the month of April. But we have decided to not pass on the entire commodity increases. And we will work on the cost levers. So we don't want to impact the demand momentum by passing on the entire commodity increases. So we will work on the cost side, expense side to manage to financials. As far as margin drivers are concerned, Kapil, and since a few others have asked this question, I would say clearly, it will remain the same whether these commodity headwinds are there or not, which is about going on improving the value proposition for the customer. And the second one is, I think, keep managing the costs, expenses and expenditure, which is petrolable and in our hand. I think that's what I would say as far as the margins are concerned.

So next question from Nishit of Axis. When will we start executing the orders of 70,000 units to Indonesia? And will the entire order get delivered in FY '27 itself?

So we have progressed well on the Indonesia order. I'm pleased to tell you that we already have the product collocated in Indonesia. And our first shipment is already on the seas. And we will actually ramp up the supplies quite rapidly. I think we will probably talk about it as we go ahead and meet again in quarters ahead in terms of what is going to be the actual delivery time line. But of course, we are trying to ramp up the deliveries pretty fast.

Thank you. sir, Ramanan, maybe this one coming your way. What are the key reasons for delay in closure of the Iveco deal? Earlier, we were expecting closure by April, May, -- and how are you looking at the acquisition of a 6% to 7% stake in Aveco by an activist hedge fund from the market? How can this impact our deal closure or deal value?

Yes. So I think good question, Nishit. As you know, Aveco has a strong global footprint, right, and getting approvals from various regulators is time consuming. But despite that, I think we have received almost all the approvals, barring the last 2 pencil regulatory approvals because of France and Spain. We are working towards closing this at the earliest, and we expect this to kind of spill into Q2, and that's where our time line for deal closure is going to be Q2. On the second part of the question, in terms of the -- on the investor, I think we are confident that the Aveco investor would see value in our offer and would support the deal.

Thank you. Next question is from Pramod Amthe, InCred. ASPs have been dropping by and by EBIT. Is it because of discounting trends? Or is it because of change in product mix?

Also yes. Pramod, I'm happy that you've asked this question because actually, we have also engaged -- we had also engaged offline with some of you to explain this. So actually, see, the ASPs are not producing. Segment by segment, actually, the ASPs are increasing. And in fact, in trucks, there is a healthy increase in ASPs on a Y-o-Y basis. The key reason for this drop wherein if you divide the revenue or the turnover with the number of vehicles sold is essentially due to the increase in number of vans in our portfolio in the volumes. And compared to last year, we hardly have any electric buses being sold this year. This alone is one very important reason for the change that one has seen in terms of the ASPs. And as we go ahead, when we have electric buses coming back into the volumes and also have electric vehicles sold in some of the other product lines, actually, we will see a positive impact on the ASPs.

From Pramod itself, a couple of other questions. Can you talk about segment-wise drivers and challenges for FY '27? And in SCVs, with the new launches of EVs and L&T, has the cost economics turn favorable to ease the onslaught of 3-wheelers?

So I think let me, Pramod, first answer the second question because it is a really good question. So as a part of this quarterly connect, I have engaged with most of the financials, both banks and NBFCs. And invariably, I've heard about improvement in the asset quality for all of them in SCV pickup. And actually, the answer to your question is actually, yes, wherein you've asked whether with the launch of new L&T, et cetera, whether the cost economies have turned favorable? Yes, I think at least the quality -- asset quality for these vehicles has improved significantly for the financials. With EV launches of new EV, yes, I think the operating economics are becoming quite favorable with 2 products, especially one is Ace Pro and second is the Intra. And therefore, we are seeing a good pull for these vehicles. Now your question about segment-wise drivers and challenges for FY '27, see, I would suggest that we actually go quarter-by-quarter, which is what I answered to Kapil also. And frankly, at this juncture, we don't see any drop in rate availability. The real challenge in our view -- the first immediate challenge is going to be what happens to the diesel prices, and that's something that we need to monitor. I think the freight availability probably continues to be there across all the segments. Yes, sure. Raghu has also asked?

Yes. I think most of the ones which Raghu has said have been covered. But I've got a question on separately on WhatsApp. So maybe I'll read that out. This is from Gunjan Gofa. Can you talk about truck operator sentiment on ground more recently? What is your experience of past fuel price increases tell you about the industry cycle? What variables matter more from a cycle perspective? Does replacement cycle still play out, given the aging of trucks?

Okay. So actually, Gunjan, we have stopped doing that sentiment study, which I used to report every quarter. We are actually revisiting the entire methodology to make it more relevant to the current market conditions. And probably once we restart, we will come back on that. But if I were to put together some anecdotes and, therefore, tell you, I think amongst the fleet owners, diesel prices and how they pan out will -- is actually one of the big question mark. And due to that, I think at times, the customers are postponing their purchase decision-making maybe closer towards the month end. But this is something which I think the fleet owners, the customers are going through, largely on the heavy side. As you go down towards smaller vehicles, I think the uncertainty is lower is what I would say, which also probably indicates freight availability as we go down. And in fact, we have also seen for the whole of last year, SCV pickup and ILMCV. ILMCV is 5 tonnes to 19 tonnes, have actually showed the highest growth rates. And we continue to see that even in this particular quarter. So I think that's what I can answer right now in terms of sentiment, Gunjan. What was the second question?

Does replacement cycles still play out, given the aging of trucks?

Yes. I think the I've been saying this for true replacement being happening on ground. That means a truck being taken out from the system and then replaced by new truck. I should see a good number of trucks coming to our scrapped centers. But actually, that still doesn't happen. Yes, it may be true that we are not available at all the locations, but we are already there at 11 locations. I think the inflow continues to be low. And therefore, in my view, the fleet owners do replace the trucks after 4 to 6 years after the warranty period is over. But I think it changes hands and then it continues to remain in usage for smaller duty cycles, lower distances, lighter loads or whatever, but I think some of these trucks continue to be there. But if I were to answer your question, only for the large fleet owners who replace their vehicles after 6 years, 4 to 6 years, I think we have been working on that data. I would say that at least probably 40% of the volume was related to these large fleet owners replacing their trucks with new ones.

So just I believe we are having a technical glitch, and people are not able to post the questions online. So I'm getting them via e-mails so I will be reading out as they come. So the next question, again from Gunjan. Does the mid-teens EBITDA margin guide hold despite cost headwinds?

So Gunjan, whatever I answered to Kapil and then Pramod holds good. I think at this juncture, we will have to go really quarter-by-quarter. And let me tell you, I think the commodity inflation, which has happened, including rupee devaluation, it's quite severe. And we are trying to fight it out. And as I said, obviously, we have not passed on the whole increases. It's out of question because we don't want to completely describe or disturb the demand growth momentum. We have increased our cost side efforts and our endeavor will be to continue delivering good margins.

And if I may just add in, just a correction, Gunjan, our guidance was teens and not mid-teens.

Next.

Yes. So international growth guidance given the uncertainty in neighboring markets.

I think I did answer this question in response to questions from Pramod. But just to recap, I think we do see some pressure in Sri Lanka, especially because of reduced availability of fuel prices going up. We do see some impact in Middle East because, of course, the war is happening there. So we have had no shipments to Middle East in the last 2 months. We are trying to find out alternate routes or logistics to ensure that the vehicles can reach dread there. So that's what I see the impact right now, but we are trying to recover this through increase in volumes in other markets. And here, the Indonesia order is also coming to our rescue. So I would say that even in international market, we will have to take it more quarter-by-quarter approach in view of the uncertainties.

I think we've now resolved the glitch, so you can please post your questions on the chat itself. But in the meanwhile, while that comes, sir, Ramanan, sir, a question for you. Is there any clarity on the financing structure for Iveco?

I think as we had shared earlier. Our initial plan for financing is going to be through a bridge loan and the subsequent refinancing at this point of time, all options are open. So we've kept both equity and debt still open. And I think closer to date, we will finalize the percentage of equity or debt.

Okay.

Sneha, There is a question from Raghu, which we have missed. He -- I mean quite a few of his questions we have answered, but there is one question I will take. He -- 2 questions. He has asked, can you please share Aveco FY '26 financials, excluding defense, if possible? So no. And I mean, in fact, they have already released their results in the last week. So you -- I will look at those. You have asked a question what is supporting market share in tractor trailers, buses and LCVs in the recent time? So I think very clearly, the new product launches and therefore, the product superiority is a tier 1 of the reasons that is supporting this. I think the new products that we launched, whether it is higher payload, higher fuel efficiency, are clearly -- or the Azura range, I think these are the ones, which are driving higher traction. I must also say that our strategy at micro segmental level actions is also helping. Micro segmental level will be for a geography and a particular end-use segment we are having differing strategy and also prioritizing amongst those micro segments. So that's something which is helping us. I must also add that with the customer success centers now deployed across the country at more than 100 dealers, I think our service delivery has improved quite significantly. And a lot of proactive inputs we are being able to give it to the customers to improve functioning uptime and even sometimes the fuel efficiency delivery on the vehicles, I would say that all these things put together has helped us to improve the market share.

Sir, just a clarificatory question on one -- sorry. Yes. So this is from -- one moment, please.

There's a question from Tom. Ramanan, question.

I can take that.

So the question is, regarding the balance Aveco approvals, can you confirm whether the foreign investment approval in France and change of ownership approval from the Spain...

With respect to your question is to clarify and as I said with the earlier section 2, all approvals have been secured. What is spending is only the finance regulatory approval, which is from France and Spain. All FDI approvals have already been received.

Thank you. Yes. So there is a clarificatory question from Aditya. Yes.

So Aditya, I think arithmetically, you may be right, but I think the message that I wanted to convey was with this kind of uncertainty, very difficult to give a very specific number. But still, I think neck out saying that we will certainly have a single-digit growth in Q1, which is quite good. Coming to Kapil, your question is about what is the growth outlook for EVs, for LCVs and buses? And about intra, yes, I think intra EV has got price position very, very well and is at a very good spot and therefore, there is quite a bit of a demand which we have seen for intra EV. Regarding your point about supply challenges. So Kapil, this is just the second month of production since we started, and we have a plan to ramp it up gradually as we go ahead, and we are sure that we will be able to meet the demand. In terms of EV penetration, that we can expect in LCVs. I will say that, Kapil, for the whole of last year, our penetration in SCV pickup of EVs was around 4%. But if you look at towards the end of the year, especially last 1 or 2 months, this penetration has actually peaked to -- picked up to around 7%. So we do expect the penetration to be in this higher single-digit zone.

The next question from Nishit. In H2 FY '26, MHCV demand panned out way too strong compared to expectations. Any color what drove the same -- whether this was addition of capacity by fleet operators or replacement demand? And how much of was the role of stronger-than-expected pent-up demand in tippers? And does the strong growth in H2 make you cautious on FY '27 demand apart from the other near-term concerns? Or do you think there are more growth drivers?

So I think H2 FY '26 growth was clearly driven by increasing consumption. I think that was very driver and that led to higher freight being made available. And that translated into new purchases. So those new purchases could be either to add capacity or for replacement both. I mean I also answered Gunjan's question on what could be the likely replacement by the fleet owners. So that's where we are. And I think, see, separately, you guys only have asked a question that MNHCV or HCV volumes are still lower than FY '19 peak in volume terms, then I answer that [indiscernible], we are higher. So frankly, still there is a headroom. If -- and I've been saying, I mean, generally, one algorithm or one equation, correlation seems to be emerging that if the GDP growth is somewhere around X, and closer to that is also the CAGR in road -- road freight BTKM. And as road freight keeps on increasing, we will see addition of capacity, even in MNHCV. As far as tippers is concerned, I must say that post rainy season, that is September, there has been a significant uptick even in tippers, which is because I think the infrastructure activity also picked up. So that's something that -- we have seen, we are still seeing good demand, good pull for the tippers. But of course, we will now shortly be entering into the rainy season, which is typically a very low demand season for tippers. And maybe after that, we'll be in a position to then give better visibility of what's likely to happen in H2.

Some questions that we've got by mail. Can you tell us a little bit more about what's happening in the EV bus market? Why were we not participating or...

Yes. So see, in the electric bus tenders, we have participated in the last 2 CSL tenders. And I think in the first one out of those, we were close to L2 in one of the sub part of that entire tender. And the second tender, I think the tender has just got opened yesterday. I think across, we see 2 things. One is the government has addressed our requirement of payment security mechanism and also asset-light model, which is there. But in our view and with more than 50 crore kilometers under the belt more than 3,300, 3,400 buses, I think the current set of ports which are coming are in our view, unsustainable. So we are, therefore, going in a very prudent manner in this particular business. But let me add, I think we have been also pretty active on promoting electric bus travel now in corporates, especially for employee travel. We are also engaging with some customers for other applications, intra city, intercity -- mostly intercity, sorry, for -- and this, we believe, will also start bringing some volume to us. So that's where we are in terms of electric buses.

Thank you. Ramanan, a couple of questions coming your way. This one is from Amin, JPMorgan. Historically, we have seen very large working capital inflow in 4Q, which leads to a disproportionate increase in FCF. This time, the seasonality seems to be weaker in this regard. Anything to call out here? And the second question is on the CapEx guidance for FY '27, whether there are any specific areas of investment that we are looking at.

I think a good question on the cash. I mean, as you are aware, CV business is very cyclical in nature. Historically, we have experienced working capital burn quarter-on-quarter with Q4 being an exception. But I think FY '26 with our sustained focus on disciplined working capital management, the large things historically concentrated in Q4 have been more evenly managed through the year, resulting in a more stable, predictable and consistent cash flow. So on a YTD basis, post Q2, we've been consistently positive which was how it was historically. Coming to your question on CapEx, I think for the last couple of years, we've been giving guidance on CapEx of 2% to 4% of revenue, and we've been very consistent in meeting that. In FY '26 also, we are well within the guidance. And despite this gap, I think our focus on investment in priority areas, new technology has always been prioritized. So we expect FY '27 also, our guidance would remain similar, 2% to 4% of revenue.

Yes. I don't think we have any other questions on the call. I think with that, we can conclude the call. Thank you very much for joining in. And for any other questions, happy to connect offline. Thank you so much.