TVS Motor Company Limited (532343) Earnings Call Transcript & Summary

I hope all of you know about TVS.

We do, we do. We're minority owners across -- yes, maybe just to give you a brief introduction. So yes, Axiom, we're basically growth-focused equity investors. I'm a generalist across -- we have 2 emerging market strategies, call it, $10 billion in AUM across the two. We've been minority investors in TVS for some time. I'm a generalist, but I do cover TVS, if you will. So I'm familiar with the story. I've been following it for the better part of a year and certainly a lot of admiration for what's been going on with the firm recently. Obviously, very strong 2022 FY -- first half of 2023 FY, but excited to finally get a full team on the phone today and get a little bit more context around the story.

Since we have 45 minutes, it may be a good idea to go with your clarifications or questions, whatever you have. I would like to invite you whenever you are in India, please do come to Bangalore, and we can spend a day here. You can visit the factory, you can interact with us, and we can organize that. Kindly let us know in advance when you are planning to be in India.

I like that plan now. I appreciate the invite. And yes, just to give a quick introduction for [indiscernible]. So Don Elefson, he's been with Axiom for the better part of 10 years. He's a portfolio manager also on our EM strategy. And Young Kim is also a senior portfolio manager across our EM strategy. So he's on the line as well. And if you could hear us in the background, thanks so much for arranging the call. We certainly do appreciate it.

So yes, I think with that, I think it would be great, to your point, just to jump right into questions. So I thought a good place to start was just coming out of, kind of high level, coming out of the January sales result yesterday. Obviously, incrementally, at least in my view, more positive month with sales improving both month-over-month and year-over-year. And EV sales continuing to track up really, really strong, call it, greater than 700% year-over-year. So maybe just to start there. When you think about that EV sales growth of 700%, obviously coming off of a very low base, how do you view the sustainability of those trends? Where do you see EV sales going? Any targets internally on that team?

Yes, EV, as you know, we also said in our Q3 business call that EV is our focus. And I hope you can all hear me?

Loud and Clear.

Yes. So we have a combination of the product strategy and a series of products, what we have planned for the next 8 quarters, on the 2-wheeler side and the 3-wheeler side. And the iQube, as of now, we have put the new 3 variants. They are available only in 200 cities or towns, I won't say all are cities. And there is a great opportunity to scale up in our India level, which goes to almost 800, 900 level. So even these 200 places, we have a booking, as on yesterday, something like 27,000, 28,000. So one of the reasons why we are not expanding everywhere in India is that consumers are very eager to book it and pay, then once they -- then they want the next day, the delivery. So we are in the ramp-up count. I mean month after month, there are challenges. While things are improving, still, we are not in the plan. For example, last month was good, 12,500, but we could have easily done 1,000 more. Some things stop on some semiconductor not available, or some part not available. It's not that the supplier doesn't want to support. So for example, this month, we should clock beyond 17,000, something like that. And in March, I'm looking at -- can be 2,000 a day. And so that's the kind of challenge I put to the team, and the team is responding. It may not be to my satisfaction but the most important thing is customers love this product. That is most important. And always, you have to keep the demand ahead of the supply. So there are 2 important strategies. One is to make sure that we cover more and more parts of India. And possibly next year, move to something like some international markets as well, because many of the distributors have seen this product. They are also very much interested. Okay. This is one. Number two, we have a series of product launches, which you will see in the next 4 to 6 quarters in various segments. I may not be able to guide you exactly what kind of products in which segment, but I can promise you that fairly advanced work is going on. Once they come, that will be different, different customer segments. So overall, we are looking at how do we scale up this to much, much higher level. So -- but I'm -- my immediate target is to cross the 25,000 in March.

Got it. Got it. And I guess that's broadly in line with the prior guidance that you gave in the last quarter. One thing that you mentioned...

Can you hear me?

The 25,000 unit target for EVs. You're breaking up a little.

Absolutely, absolutely. Because there is no point in setting target if you don't achieve that. To achieve that, then you will scale up beyond that. In the meantime, we launched a new product and looked at how much more you have the opportunity. The good thing is that we believe in customer, we believe in customer delight and customers are responding to that. So that is the good news. So now the ability to scale up and the ability to deliver more and more volume, that is a challenge, which we are now working on. As we ramp up and more and more, we will expand to more and more markets in India. Maybe by September or October, we may start some international markets. So that is the kind of strategy we have. Of course, A few more products will come in the '23, '24 financial year. Then we'll have to again look at how we are going to position it, how we are going to launch it in some of the cities in Indian markets and how do you scale up. Because every product will have something unique, something connected, something really exciting, something really in terms of digital, which is going to really connect the customers.

Aaron, Can I jump -- can I follow on to what he just said? You say by September, October, you might be selling some international, but you have so much demand domestically and it can go from 200 to 800 points of sale, why even go international?

No. See, what we have always look at is the -- by September, if you start, it's not that international is going to start like that. You have to put some products into the market, you have to rightly understand what the consumer requirements, what the second infrastructure. For example, even in India, as of now, the customers are using home charging. . So there is a lot to learn in this area from the consumer side, unlike the ICE. So we will scale up slowly and steadily. Maybe we will start with a couple of international markets and -- there is a learning curve. Like we did it in iQube, we started only with Bangalore, not even Karnataka as a state. We went to a small city and then slowly we expanded to the urban areas. Now we are going to semi-urban areas. So every area, you have to have that interface with the consumer, how they are using it, how they are charging it at home, what kind of support we need to provide, what kind of service we need -- because we -- the interface what we provide to the customer is very, very important.

That's helpful. You just kind of alluded to it and mentioned it earlier with the iQube brand. And obviously, you've been particularly successful in scaling that up of late. Is the plan to continue solely with iQube with all these incremental model launches? Or is it possible that there'll be like another lineup and then product launches associated with a sub-brand separate from iQube.

There will be lineup. I may not be able to share the overall brand strategy, but I can tell you -- I can give you an example of what you have seen in ICE, you have a Jupiter, you have a Jupiter 125, you have an NTORQ, you have a Jupiter 125. So there is a specific consumer segment and consumer usage. So we will be looking at that way, and then we definitely want to differentiate. iQube has got a certain customer profile, we are looking at it and slowly and steadily, that starts coming in. Then we will look at certain brands and certain models for certain type of customer segments. And that is the way it works. Price points will be different and the kind of features and the kind of technology. While we will leverage many of the common platforms, we will differentiate.

Is it fair to say that there'll be different brand options, both in price above and below iQube? And I mean, how do you think about...

I don't want to give you any kind of guidance on that.

Got it. Fair enough. Okay, cool. We'll be on the lookout for all the launches. This is a very high-level question, and we're really seeing this more on the global side in autos. But at the moment, we're seeing a lot of price competition in autos between all throughout different OEMs in China. Tesla, obviously driving a lot of that. Are you seeing any incremental price competition in EVs or really throughout the lineup? Or is that something that's not necessarily unique to India?

I think this price competition is inevitable. Even ICE, whatever you see between competitors, there is always the kind of price trend. But the strategy what we are using in the ICE will be a similar strategy we'll be using. And for example, I can give you an indication. In Jupiter, we have a basic model, which is [indiscernible] Activa which is the Honda model. But we have Jupiter ZX model, we have a Jupiter Classic model, we have a Grande model, you premiere it. And when somebody walks into the showroom or somebody comes through online, he looks at the price point and say, I want something -- this kind of a scooter, et cetera, et cetera. But the moment he looks certain and see 3 options and it is typically a retail finance customer, then he says, what is the incremental price difference between, let's say, it is INR 4,000 or INR 5,000 between basic model and that model. I think the mindset of the consumer is when you give something, is it in line with the competition. But when they have made the purchasing decision, what I have seen is they have made the decision. Then when they look at online or when they walk in, they always say that, no, I saw another Jupiter ZX or a Classic or this one, this will suit me more. Okay, another INR 5,000 is okay if it is the retail finance, 36 months, thanks to TVS here. He will say incrementally, I have to pay over INR 100, which is $1.50. That's okay. Key, his in mind is he has already decided Jupiter, but he immediately makes a decision to go to the high-end models. And today, confidentially, I can tell you, 50% of the Jupiter raising this variance what we sell. So my opinion, comparisons are inevitable. Price competition is inevitable. It is up to us how do we use the technology, how do we give something more to certain types of customers? How do we differentiate it? And how do we influence this customer. Okay, you have decided then it is for the sales boy/sales girl along the online chat, you have decided that is brilliant, can I offer you 2, 3 things? Would you mind looking at it? These are the customer benefit I'm going to offer. I have seen 1 out of 2 taking that.

That's good. That's good. I guess that's inherently pushing people off the price curve is the ideal scenario, of course.

The basic belief is we don't discount. We don't discount. And we always encourage people to look at, okay, you want this price point, take this product, it is available, okay? But if you want this, this, this, menu, you look at these are the features, these are the things. I'm adding more value, more benefits to you. I'm always superior to competition, look at it that way. That is the way of strategy. Even in iQube, it's going to be like that, even in the future competition it's going to be at that, products like that.

Got it. Got it. perhaps on the supply demand side of the equation with your -- all the inputs, you mentioned semi supply easing up, and that's become less of a concern. Obviously, that was an issue for not just you but for everyone 12, 24 months ago. When you think about input prices and supply, whether semis, raw materials, what sort of dynamics are you seeing at the moment?

In ICE, I think situation is far better. I would say that in the ICE area. When I look at iQube, everybody has to integrate. So each one is looking at who is the least common denominator? Sometimes people come. So the best way I do is those prognosis I look at next 8 weeks. And I tell the people, look, I'm going for 25,000, who can [indiscernible]. Then they will make short-term arrangement. The moment they see we are in that direction, they visit the plan they see -- seeing is believing. And they look at the booking then they say, okay, we will try to put capacity, we will try to divert something for you. Because high-end auto grade, still the demand is continuing, okay? Whereas in the ICE where it is primarily ECU, those kind of semiconductors, we are seeing much, much better supplies. And also, we have made some alternatives. Earlier, we had only 1 supplier. Now we have 2 suppliers, some areas, we have 3 suppliers. So time has given us a little bit of de-risking.

Got it. And then what about outside of semis just for commodities broadly. Any issues there on steel inputs, aluminum, anything, like that, copper?

I don't think. So far, we have seen, in the last couple of months -- the last couple of months may not be the right indicator because November, December is always slow. January, we have seen an uptake in the market, and our numbers are much, much higher. We did 22% up in the domestic. And our customer retails are pretty good. So we have to see 2, 3 months. So far, I think everybody is heading to the schedule. In fact I could say some of them are ahead of the schedule.

Got it. That's all helpful. One thing I just wanted to go back for a second. I was just looking at my notes from the last earnings call. And I think one of the first questions you got on the call was around your unit guidance for EVs. And off the top of my head, I believe like a UBS analyst asked about the EV growth. And just looking at his note post the quarter, he was kind of implying that you were guiding up the expectation of 25,000 units from March 2023 to something meaningfully higher than that amount, but it wasn't entirely clear to me. So is it safe to say that the 25,000 unit guidance for EVs is still the firm guidance for March 2023?

I wish everybody supports this. Demand is not a problem. Demand is not a problem, because I'm moderating the number of cities and number of dealers. But -- see there is no point in committing anything beyond 25,000 at this point of time. I have capacity. If you pay visit here, my left side plant -- now earlier, I had a smaller plant now I'm putting in the main line itself in my scooter production. You can see that. The more and more people have started to see that, they say, yes, the company is moving. And when you go to online or somewhere people saying that you are doing it.

Aaron, could I follow up on something he just said? Your dealer network is how big?

We have -- if you ask me my network in the ICE. It's almost 1,200 main dealers and 3,500 sub-dealers, so that is not a problem. And currently, I'm dealing with about 200 dealers, ICE dealers for this. And, of course, online and I've not gone beyond that, 100 cities I've not gone with.

Yes. So what you're saying is of your 3,000 ICE dealers, 200 are selling the EV?

No, 300 -- I think you should understand, I've 1,200 main dealers. Under every main dealer, there may be 3, 4 sub-dealers, okay? So you should take 1,200 as the main dealer. Of that, I have given only 200 main dealers currently iQube.

And what would cause you to give more dealers, iQube?

[indiscernible] life. I've to produce more. I have to produce beyond 25,000. I have to produce 25,000 because there is no point in going in waiting -- making the customer wait that is -- that becomes bigger [indiscernible].

So what you're saying is you have the infrastructure in place to double or triple, that will be easing your dealer network for electric.

Yes, we have -- these are all our ICE network. I'm not even inducting a new network, I'm not looking at new network.

How long does it take to set up a new dealer?

New dealer may be 3 months. 3 months, 6 months. 6 months. If he has got his own facility. If he has got his own land, his own building. Otherwise, if somebody is going to set up new, normally in these kind of businesses, when somebody is approaching us, they will have their own building, their own -- have infrastructure, everything. It's only branding and interiors and all that. Then it's 3 months.

And your existing structures can be set up immediately. They can just flip the switch and go?

Yes, absolutely. Absolutely. In fact, all my 1,000 dealers are ready to buy from me. And [indiscernible] giving...

One just high-level question I had and it was a big impact last year to sales after some like notable fires in the press at pure firms. I know Ola had a few fires. I feel like Ather might have as well, but perhaps I'm wrong, but I feel like Ola was the notable one, and there was some big splashy headlines in the press in India about this. And certainly, we saw that in the sales trend -- reflected in the sales trends where consumers were really moving away from them. They were viewing as a newer brand less trustworthy and moving towards you and more legacy players that, in my perception, they viewed as more trustworthy higher quality. So yes, I guess when you think about that dynamic and how it played out last year, how do you think consumers are currently viewing the space from a quality perspective? And where do you see TVS fitting in that mix?

I think we always believe in giving good quality and safety and good quality are very, very critical. That's also one of the reasons we are scaling up slowly. That is also one of the reasons I said even in the international market, you start it will take 6 months to 9 months because every country has got certain customer usages. Okay? India, while the public's travelling infrastructure is all getting built. Currently, we are seeing 80%, 85% of the consumers charging at home. So you need to be -- in my opinion, we have been a little bit patient. That's why I'm also a little bit patient in this new technology, new usage conditions. How to around them, how to understand them, how to support them? Any new technology has got a lot of failure modes. So you have to analyze the failure modes and keep looking at it. So we firmly believe in that.

Have you seen any fire issues, product quality issues with the EVs with the iQube brand? Any -- even if it's just idiosyncratic examples.

See, it's a part of testing and proving journey. We have got excellent R&D facilities. We have a lot of testing facilities. We keep testing and testing and testing. And this is a learning curve. Learning curve. And the fact that the consumers are looking at it is more positive. Having a good quality and safety it's only an order [ qualifies ]. They should start feeling that this is also like a Jupiter or an NTORQ. My entire family -- in the Indian typical style, there are minimum 2 -- minimum 2 plus 2, 4 people. And good roads, bad roads, rainy roads, you have huge traffic jams, you have flyovers, everywhere, it should go. Technology agnostic. They won't look at which technology. The only thing is this is silent and it is connected. It's got so many features, okay. So in the consumers' mind, they look at my usage, okay? So it has to be robust. So it's multiple factors. They look at multiple factors. It's not one factor they look at.

Got it. Got it. Maybe just back to guidance. I know that TVS and you and your management team don't necessarily provide too much forward-looking comments. But one thing that I know you mentioned on the last call was that you're viewing a positive inflection in 4Q in the international segment. Obviously, that's been an area that's been lagging relative to domestic. So if you wouldn't mind just spending maybe a couple of minutes on the dynamics that you're seeing there, perhaps just highlighting a couple of markets that you view as particularly interesting.

See, we always believe in -- in India, I always believe in 25 to 30 days of stock based on the fourth month of sales, okay? I don't keep more than that stock. I don't allow my team to push extra stock. Like -- from the customer point of view. Because customer want a fresh [Foreign Language]. I will always say that you, you go to Indian -- typically Indian people take the [ water ] like donut. They want fresh, hot, crispy. Like that, ideally, the customer wants directly from the plant a new bike. So the more stocks the dealer keeps, the more -- less fresh he'll be able to give to the consumer. So that is one of the reasons we said we will not give any credit from the company. Most of -- not most, everyone in India, all our competitors give credit. So I give you money, and I will lend that money and I charge you interest. We stopped that. We completely stopped that. So the dealer has to bring in his money, completely like international business, cash and carry. When a dealer is bringing the money he will buy only what is being sold. When we give money, in a truck 40 vehicles, I can put whatever I want to also put. Okay? Here, that option is not there for us, my sales and marketing team. Purely, purely what is selling, he will buy, or if that money he will put. I want more and more that kind of a pull from the market, okay? With a very clear condition that I don't want to lose any retail because the dealer doesn't have stock. But we can keep a very good working capital. So I'm really proud of that. We have less than 30 days also. Same principle I used in the international market. The only thing is you have a transportation time or a shipping time from India to various countries. So you add that stock plus the distributor stock and the distribution stock there. So for example, last month, our retails are [indiscernible]. I said cut down the stock. Don't worry. Don't worry. 2, 3 months, you cut it down, then the dealer will be on top of my head to take more and more. And most importantly, customer will get the fresh vehicle. So as always, proactive -- I don't look at dispatch. I look at customer retail, customer retail, customer retail.

Got it. As far as the demand dynamics in these markets, any trends that you're viewing in particular, regardless of the legacy ICE or EVs? Any markets that you're particularly intrigued by, interested by, concerned on at the moment?

Fortunately, one good thing about EVs is we have the best range. So we are looking at a very good -- even in the international market, I'm pretty confident that you will see a better February, better March. In fact, I'm trying to bring in the same systems what we use in the domestic in even international market, because most of the international markets are developing markets. Here, the distribution is I have 1,200 dealers. In international market, I have a distributor. It goes there from the distributor, he has got dealers and he also have multi-brand outlets. Multi-brand outlets uses all competitor products, et cetera, et cetera. So it takes time to bring in the TVS way of the customer experience and all this. So that is the journey we are now going through. So we put it that way. And I see our products have got a good pull, Indian brand and TVS brand has got a good pull in the market.

Just maybe to spend a minute on guidance again. I know it's obviously fine if you're not comfortable in formalizing certain things. So you mentioned the 25,000 unit target, you mentioned the sequential improvement in international markets. But just looking at like consensus in Bloomberg right now, I see revenue growth in FY 2024 to 2025 of like kind of mid-teens, if you will, 15%, 12% and then net income growth a little bit above that, call it, 30% to 20% this year and next, margins mid-20s percent. Do you view all of that as broadly achievable? Any context on those numbers?

There are plenty of people making predictions about us. I appreciate all of them. I am a firm believer that focus on the consumer, the rest will follow. I always say that first is consumer, consumer, consumer. Next is revenue, revenue, revenue. If the consumer is there, you can get the revenue. Once you have the top line, every line will follow. I'm a firm believer on that. So rest assured that would, in my opinion, even the international market, the severity of what we were looking at Europe or -- see African markets is getting affected because of this war and the inflation and all the -- all the other situations on the depreciation of the currency. I think there is a huge impact, indirect impact, some direct impact. All these are a little bit slow. I wouldn't say, completely out, but everyone thought and what likely happening is a little bit soft. When I talk to the distributors, they say, yes, we thought it was going to be very tough. Actually, I anticipate that is why I cut sharply in January. But people are saying, yes, it is not that bad. Customers are coming, customers are buying. Of course, there are currency issues, there are devaluation issues, but demand is there. This is a very healthy thing. And I always believe that when the consumer comes, he says, why don't you wait for 1 week, immediately the pickup goes up. It's psychology. I always believe that little bit demand ahead of supply is always good. That's -- how much it should be, that's the fee, that's fee. As long as you don't miss the customer and he goes, I'm going to the competition, then you lost.

I guess, changing the topic a little bit. Pretty exciting announcement back in 4Q -- the calendar year 4Q, with Amazon. How do you view the partnership is progressing? Maybe if you could also just maybe comment on the logistics of working through that partnership, how you view it as developing over time, the nature of it. Really just any color, it's obviously a great opportunity.

I think that -- these are partnerships, which is definitely going to grow disproportionately. Because Amazon as a partnership, you know how they are expanding in markets like India and e-commerce, how it is. Thanks to the lockdown, I think today's consumers deliver at home, including the number of people who buy items from home, not sitting. Typical Indian mentality is to go to the shop and shop. Now sit at home and shop, online shop. So I'm of the view, I cannot put a number, but it is going to grow disproportionately I can tell you. So these are the kind of partnership which is going to help us. And the moment they -- see my principle is they know us, we know them. Amazon is a global network.

Got it. And I guess the obvious opportunity here is just use iQube for lost -- last mile delivery?

Huge, huge. And see, one most important thing about EV according to me. So far, even in the international market, we are present only in the developing markets. We are in the African market. We're in the ASEAN market. We are in the Latin American market, we are in the Middle East. We are not yet there in Europe or U.S. or all the developing markets. This gives us a huge platform and an opportunity that I said last time also, the new platform, whatever we are designing and developing for BMW is going to be a cool -- I can't give you the specifications, but it's going to be an amazing EV vehicle. And that is going to be a partnership, which is what we're really, really excited about. And our product is also equally going to excite the market. So I see it as a huge opportunity.

Got it. I was -- the next thing I was actually going to comment on was to ask you about BMW and if you had any updates on that partnership. Obviously, that was announced back in 2021.

Closer to launch, I'll tell you because -- there is an agreement between both the companies that we will jointly announce. That's fair.

Got it, got it. I do have a few more questions, and I also want to highlight ESG and those sorts of topics before we finish. But Young, do you have any questions? I know you always like jumping in. Or Don, obviously, if there's anything else, I don't want to steal all the thunder here.

No, I'm well, I'm going to be signing off here in a second to catch a train. But thank you.

Before you sign off, you plan the next visit to Bangalore and be with us.

I would love to take a ride on an iQube.

Please, please. Please come here. I will post you some [indiscernible] and you can have a good visit to the plant. And you can spent some time, and you can see some very good words which come internationally from various places. We have an amazing bird park inside the plant, you will be amazed.

Well, that's neat. Thank you for the invite. Aaron, thanks for the meeting.

Thank you. Thank you.

Thanks. I have just one area there I would like to get some more clarity on. So demand is there, just supply an issue. How much is this a function of just conservative nature from you? Can you just maybe expand on a little bit further kind of supply chain strategy. Are there any changes that you are personally [indiscernible].

Yes. See, there is no way -- I disagree on the -- we are conservative, we are fairly aggressive. I think the approach we have now used is we are directly in touch with the big semiconductor suppliers. So we are in line with them. And unlike in the past where we go to some of the key suppliers and their suppliers, semiconductor, now, we are directly inviting the semiconductor suppliers and they come, they see, seeing is believing. Now they are partnering with us. I have the suppliers who are completely supporting us. And I'm very sure once you see this 25,000 happening, then it is a question of time. Because -- everyone wants to be partnering here, okay? Last year, same time, we were struggling to convince people. But this year, when I'm looking at it, it's completely different. But please understand, I need same-day production. If I have to produce 800, I want all the master material today morning. If I miss today, I can't make up tomorrow. So that is the kind of -- so ideally, I have to look at every day, how do I produce 1,000 per day. Then 25,000 will happen. So that is the level of maturity we are looking at with some of the suppliers, and they're completely now reorienting with our requirements. So I think that will be a brilliant, brilliant change.

Maybe just to ask Young's question a little bit differently. Is there any incremental CapEx investment that you guys need to make at the moment to scale in any one of your business?

No, not for 25,000. We already got the investment, everything is done. When we go beyond -- for example, the new products also we have invested. But when we go, let's say, from 25,000 to 50,000, that may require some incremental investments, not in the building because that's why I said when you come here, you will see certainly the same factory producing ICE and EV. But a battery management system, how do we create more controllers, more assembly facilities, more testing facilities. So there are incremental CapEx which are not so, so big. But the real investment in the product creation, the new product creation.

Got it. Young, apologized. It looks like he just got dropped. I think he had a bad connection. But if you wouldn't mind just commenting so obviously, we've spent a lot of time on the semi supply chain broadly, and it sounds like you've broadly improved your relationships with suppliers throughout during COVID and post. But any areas of bottleneck, any areas of improvement within the supply chain?

It is -- there is bottleneck. That's why we have some problems in the chargers. Now they have de-bottlenecking. Now there are -- one supplier, now there are 2 suppliers. So this is -- and we are a company where once we commit a capacity to a supplier, we will honor that. But when it goes to the next level, we'll inject another supplier. So that is the way, because it is about trust. In TVS, we always say that the T stands for trust. The supplier today, tomorrow, that supplier, quality will get affected because there is a system of prefab, there is a system of process quality proving, parts quality improving, subassembly moving. They understand that, we understand. So there is a very clear process.

Got it. And just to be clear, you said the bottleneck that you're seeing a little bit, that still exists is on the charging side?

No. charging thanks to a couple of people more inducting, proving the quality. So like that, I gave an example of charging, that's all. Like that I can talk about many, many suppliers. Each one is now improving.

I see. So is there any -- I guess, maybe just final question...

The best way to answer you, maybe first week of April, when I'm able to deliver maybe close to 25,000 and everyday happening, I think most of that will answered. The proof of the pudding is in eating.

That's well said. So just to put a pen at it, there's really no area of the supply chain that you're particularly still nervous about? Would that be accurate?

No, I'm not nervous. I'm -- how do I make sure that the daily supplies happen, there is no delay. Today, I don't have the luxury of keeping stock. If I look at ICE, I request my suppliers to keep 7 days stock, I keep 1 day start. That literally has not yet come anyway.

I see, I see.

So they're supplying to production today. So you have to build stocks at every level, okay? Not all parts. Some parts are getting built up, some parts are there. So this is something that generally because when you are scaling up, this generally we've seen in -- even in Raider or Jupiter 125, new products. So this happens, it happens.

I see. I see. Okay. Yes, I'd like to chat about that for a minute. So one thing that we look at a lot internally here Axiom, it's just a way for us to look at the portfolio holistically because we look at some of the companies, they still use like third-party ESG providers, MSCI, Sustainalytics. There's one that we call RepRisk, also sorts of different platforms. And probably the main one is MSCI. So I guess when we started doing the research on TVS a year or so ago, we were, I guess, pleasantly surprised to learn that the firm was ranked AA or A or objectively a very strong rank. So when you think about -- yes, I guess maybe just very high level, when you think about ESG, how does it factor into your calculus for the firm?

I couldn't understand the question.

Yes, sorry. So basically, all I'm trying to ask is, ESG is important from our perspective. When you think about ESG as a business concern for the firm, how does it factor into your calculation for planning...

Okay, ESG. Yes, you're asking about ESG.

Environmental, social, governance, yes.

Yes, yes, yes. I think you should come here and see. So the best way is we have on one side, the sustainability maturity model. On one side, we are looking at safety in a high, high level. I think when you come here and -- because I can't give you a maturity score. The moment you come here and spend 2 hours and then come and meet me, you will get an answer. But I can tell you it's one of the best in India.

Got it. So that's -- you're viewing that specifically on like a safety of workers perspective. Any other areas that you can focus on?

When we partner with somebody like BMW, they have their own standards. Some of the partners, they look at all these global standards and are we in line with that, and it's already there.

Got it. Got it. So one thing that I noticed in this MSCI report is that they say that you have not engaged specifically with MSCI. So our understanding of how it works is like MSCI, so this third-party rating agency will reach out to all sorts of firms that they cover, TVS and otherwise, and with a questionnaire of sorts. And they seek a response from the company, if the company responds, they're able to more holistically get an understanding of the data and comp and ranks and such. And so one thing, this seems like very low-hanging fruit, if you will, an easy thing to fix is that they noted that you have not engaged with them. So I guess, does your IR team or any sustainability style employees at the management level have plans to engage?

No. No issue. No issue. I think we can engage with any such rating agency. That's not a problem. There has to be purpose. There has to be purpose. We want to understand what is the purpose, and we can always do that. That's not a problem.

Okay. Okay. Typically, in like example, this happens all the time. Obviously, tons of firms are -- especially in India and similar markets are obviously ramping up there, thinking on ESG as it becomes more important globally. So typically...

ESG, I said I have a maturity model, and we are one of the best in India as of now. But we are also looking at which are the areas to improve on the global standards, and we are also working on that.

Okay. Yes, I'll probably send maybe through Andy and Macquarie like a link to you all for ways to engage with MSCI. It's something that we always encourage the firms that we're invested in. So to the extent that you're willing to engage, it's something that we look at very favorably.

Okay. Okay.

Cool. Is there anything internally as far as targets, even like carbon emissions or safety standards or different like quantitative metrics that you think about as a firm?

We have all quantitative standards. There is a separate sustainability book also published by the company, and there are standards. Also, we look at -- only within now we are -- for example, we use between wind and solar, all those 90% is from that and in [indiscernible] plant. Other plants are at 80% level. So same way with water, water discharge, 0 discharge. So there are many parameters, many parameters. And on safety, there are many parameters. So that's why I said the biggest way I can I don't know whether I can send it, but I can show you how we have developed a bird park behind our R&D. That shows -- and it's all the -- discharged water from the plant, and you have fish and you've 87 varieties of birds coming here every year and even today, you can see that.

Got it. One thing I noticed, I think it's on your IR page, or somewhere buried on the TVS website is that you publish a business responsibility report. I think that's perhaps as part of like reporting requirements. But do you have -- is there any intention to publish, say, like a broader ESG corporate social responsibility, sustainability report?

So for example, the corporate, social, we have already covered more than 2,500 villages. Srinivasan Services Trust is one of the best in India. See, we are a little bit conservative. We don't share some of the achievements. Because we say that we are doing it for social not to get publicity. It's not TVS. We don't publicize the good work that we are doing for the common man. For example, if you have had come here during COVID wherein everyday, we used to make 50,000 food packets and delivering to every hospital in Karnataka, every police station because they were not getting food, breakfast, lunch and dinner, and we never had any problem for getting any ICU beds in the hospital. They were saying anything for TVS, we will do. We were the company, we imported the oxygen, saturation kits and gave it to all the hospitals. So we are much proactive in this kind of social service. And this 2,500 villages, we went in, did vaccination free of cost.

Got it. Anything else?

The only this, we don't -- since you asked me, I'm sharing it, now we'll see this [indiscernible] anywhere. Because Mr. Venu Srinivasan doesn't like publicizing this.

Yes, understood. We really appreciate your openness to discuss all these topics. I know they could be a little sensitive and uncomfortable in these sorts of things. So thank you very much. Is there anything else? I know we're up on time. Is there anything else that you and your team would like to highlight here at the end, anything exciting?

Visit TVS. And all your questions will be answered. By seeing the eyes of my employees in the shop floor, all will be answered. I promise you that.

Excellent. Well, look, thank you so much again for speaking with us. Hopefully, we can be...

Before I close, I will only give you one thing about my employees. Average, I guess, one improvement by employee in his work area every day, every week, okay? And that is 52 improvements, either on productivity, quality, cost, delivery, waste or fires or safety or whichever area. Now there are 700 families, there is a home [indiscernible]. These family members have shared this and their spouses run this on energy saving, safety, environment, pollution, water conservation, education in and their own society, in their home, okay? Thank you.

Awesome. Well, look, thank you again. Thank you to Andy and Macquarie for arranging and yes, be well Thanks. Thank you.

Thank you so much. Thank you.

Bye-bye. Thanks a lot for taking time out.

Thank you.

Thank you. Thank you.