Bajaj Auto Ltd 532977
Q4 2013 Earnings Call Transcript
Transcript Call Date 05/17/2013

Operator: Ladies and gentlemen, good day and welcome to the Q4, FY'13 Results Conference Call of Bajaj Auto hosted by Standard Chartered Securities India Limited. As a reminder for the duration of the conference all participants' lines will be in the listen-only mode and there will be an opportunity for you to ask questions at the end of today's presentation. Please note this conference is being recorded.

I would now like to hand the conference over to Mr. Aniket Mhatre of Standard Chartered. Thank you and over to you, sir.

Aniket Mhatre - Standard Chartered: Thank you, Lavina. Good afternoon everyone. Welcome to the post results conference call of Bajaj Auto. From the management team, we have with us Mr. Kevin D'sa, President, Finance. As always we will straight away go to the question and answer session.

Lavina, can you start the Q&A please.

Transcript Call Date 05/17/2013

Operator: Kapil Singh, Nomura.

Kapil Singh - Nomura: Good afternoon, Kevin. Thanks for taking the questions.

Kevin P D'sa - President (Finance): Sorry, I couldn't answer many other calls yesterday because the Board Meeting of BHI got extended and that's why I couldn’t take many. I got many miscalls, but I couldn't do so. I apologize to all who are on the call for not taking the calls yesterday.

Kapil Singh - Nomura: Just wanted to check, firstly, on the export side, some color as to, now you are – when we are talking about 10% to 12% kind of volume growth, how much of the growth is likely to come from the existing markets and how much of it will come from new markets? Just some color on that

Kevin P D'sa - President (Finance): Kapil, as far as I see it, compared if I look at sequentially in number terms between Q4 of last year and Q4 of the current year, we are seeing a 10% growth. I think the 10% to 12% growth is going to be maintained for the whole of the year. The figures of 10% to 12% growth does not take into account any new major markets. What I would see is the growth coming in a little bit from Indonesia when the Kawasaki tie-up kicks in. That will be some time from July, August. Then when I'm talking of new markets, I'm talking of new markets coming in, in extending ourselves in Africa. So the growth drivers will basically continue to be (technical difficulty).

Kapil Singh - Nomura: Some color on KTM volumes, what are the numbers that you're exporting now?

Kevin P D'sa - President (Finance): KTM, we've done approximately about 20,000 numbers is what we have done and 18,000 to be exact when we did in last year, I see that 18,000 going to closer to about 25,000 in the current year. In addition to that 18,000 that we did, we also did 7,000 with domestic markets. So if I look at KTM as a family, we did about 25,000 the year ended March 2013 and that 25,000 can easily go up to 35,000 in the ending March 14.

Kapil Singh - Nomura: Finally, Kevin on the margin side, just wanted to check is there any benefit that we see coming in from lower commodity prices going forward and how are you placed as far as hedging is concerned and what kind of benefits to expect?

Kevin P D'sa - President (Finance): My margin for the fourth quarter so that there was a little bit of confusion. I'm quite sure a lot more queries will come in, my margin for the fourth quarter was 19.2% and my margin for the whole year is 19.6%. In this margin of 19.2%, if I look at my material cost, it stands at 70.4% for the quarter, 70.8% for the whole year and 71.2% for quarter three. What I see is the margins – one has seen a bit of a softening in commodity prices et cetera that is taking place, but that I think will be offset by the increments that will take place in the conversion cost, both, when I'm talking about conversion cost, I'm talking about the labor input in the vendors end. It will be including the higher cost of power, fuel, inflation, transportation and all those cost. So what I would see that in going forward in the Q1 and Q2, there will be no substantial benefit on account of material cost. Now many companies, many auto companies normally have a six monthly contract wherein they take an estimate I believe for the first quarter and then the second quarter they finalize their results, they finalize the prices and that's what happens for the full half year. In our case, what we do is by the 7th of the quarter, we have finalized the rates of steel et cetera for the whole quarter. So we are absolutely on line on to the cost that is taking place. So, for my quarter one of the current year '13-'14, we've already finalized the rate, and I would say that there is not much of a benefit that is coming on account of the overall input costs.

Kapil Singh - Nomura: As far as hedging is concerned?

Kevin P D'sa - President (Finance): As far as hedging is concerned, we have hedged up approximately about 1,200 million in totality, about 800 million – I would say it's about 1,100 million, 800 million has been taken for the current year, that's '13-'14. We are covering our range. We're getting a range of between INR53 to and above to INR58 to INR60. My anticipation for the whole year ended '13-'14, will be somewhere near INR54 plus to the $1 and we've also started covering '14-'15, where my anticipation is where we'll get about INR55 to $1.

Kapil Singh - Nomura: Do we see retaining about half of the benefits that we get? I forgot to check what is the rate for this quarter that you've got.

Kevin P D'sa - President (Finance): For this quarter, we got INR49.5 to $1 and for the year as such it was also somewhere near the INR49.5. This compares with INR48.2 that we got for the year FY'12. So as against the INR49.5 for the current year, I anticipate for the year '13-'14 us getting somewhere close to INR54.

Operator: Sahil Kedia, Barclays.

Sahil Kedia - Barclays: I had some questions regarding the EBITDA margin calculation for the quarter, Sir. In your press release, you have given an other income and the breakup. As we understand in that that you were including the other part of it when you calculate the EBITDA, which for the quarter is INR162 crores, is that correct? So, Sir, in that situation, the margin is – the EBITDA that we are getting is like INR990 crore versus your press release of INR90 crore. Am I missing something in this?

Kevin P D'sa - President (Finance): Yeah, you’re missing. So let me just put because that's something that I think those are a little bit of confusion. I'll just like to highlight to you this other income. So if you look at the other income figure that is INR795 crores, that is there for the full year and INR243 crores that is there for the quarter. The INR795 crores includes treasury income of INR372 crores and other income of INR422 crores. On the same quarter, if you look at the figures for the quarter ended four, the EBITDA margin on investment income was INR80.88 crores and the others were INR162 crores. Now, in this INR162 crores, every year for the last three years we are prepaying sale tax loan incentive that we are getting, every year for the last three years. If you remember three years back, we had INR800 crore exceptional item, which was the backlog of CCOM that I paid a prepayment and I got that benefit. What is the CCOM loan is basically, I am entitled to collect sales tax, retain it with me interest free and pay it after 18 years in seven equal installments. The other option that I have is, I don’t wait for the 18 years, but I pay it upfront and discount it at the 10.14% or so. So I have in the current quarter prepaid my sales tax loan just like I'd done in the last year and just like I'd done in the previous year. So this is the INR69 crores that is the prepayment of CCOM.

Sahil Kedia - Barclays: INR69 crores, okay.

Kevin P D'sa - President (Finance): INR69 crores. I don’t take that in my EBITDA. So therefore, I take my EBITDA margin for the quarter has come to 19.2% and for the year has come to 19.6%. If I break that INR69 crore, it is a recurring amount, which will happen next year as well, which will happen a year after that as well, though the amount of INR69 crore may vary between INR55 crore to INR60 crore or INR65 crore, I don't take that in my EBITDA calculations.

Sahil Kedia - Barclays: Sir, where do you account for the 69 currently? Is it part of the – I mean INR162 crore is your income, right? So INR69 crore is booked as an income on that, is that the right understanding?

Kevin P D'sa - President (Finance): Yes, it is an income, because what has happened is, my liability to pay was about INR78 crores, I actually paid only INR9 crores and therefore, the residual value is INR69 crores.

Sahil Kedia - Barclays: Perfect, I understood that. Sir, I have now one…

Kevin P D'sa - President (Finance): Just for the explanation for the other people as well. There is a follow-up answer to this. This INR69 crores is a capital receipt, it is not subject to tax and therefore, in the fourth quarter my tax rate comes down to 25.6%. The effective tax rate in the fourth quarter came down to 25.6%, so INR69 crores is tax exempt.

Sahil Kedia - Barclays: Perfect, sir. Sir, any color you can give us on the realizations and kind of what's happening on the pricing front, sir?

Kevin P D'sa - President (Finance): On the pricing front, there has been no issue in terms of the – even though the market had been, what I would call a bit sluggish. One has seen industry taking up the prices between INR500 to INR1000. You have seen Honda, Hero, Bajaj, TVS all increasing the prices. Therefore, the pricing environment I think is stable. The export side, for example, I think Kapil had asked me a question in terms of how much of the benefit has been passed on. I would say about 50% of the benefit is passed on, 50% of the benefit is retained. The benefit has been passed on into markets where we are competing with what I would say Chinese or more importantly where we are competing with people where the market – the affordability of the product is a concern. So, for example, in Latin America et cetera, when I'm competing with Japanese and where there money availability is high, I may not have passed on but in Africa I have passed on.

Sahil Kedia - Barclays: Just a question here. The INR500 to INR1,000 price increase when has these happened, Sir.

Kevin P D'sa - President (Finance): This happened in, I think, middle of April.

Operator: Srinivas Rao, Deutsche Bank.

Srinivas Rao - Deutsche Bank: Kevin, thank you very much and congratulations on a good and stable set of numbers. Kevin, my question is actually in context of what Rajiv said yesterday that the focus is on, a, the segment between INR40,000 and INR50,000 and to meet -- it will be based on the launching of couple of more models, Discover models. The question is up until now, a, you have been dominant in the Pulsar side and the executive segments has been a segment where you have not – at least you yourself have believed cannot compete profitably. So now that there is even more competitive activity in that segment, how do you actually propose to move forward with launches and will it again impact your margins?

Kevin P D'sa - President (Finance): No, there are two points to this, Srini. One is what we have said is that we are not competing in the 100cc commoditized space which is the low end of INR40,000 price points. That's a price point which is, basically, commoditized where you don't get your margins. Having said that, for example, the Discover 4G which is priced at INR44,000 is doing very, very well. As far as the premium segment is concerned, which is today 16% of the market, we have a 47% market share. We continue to have that 47% market share. The area where we need to improve our market share is in the segment, which is approximately today at 64% of the market, which is what I would call commuter standard, commuter deluxe segment which is there, we are there with the Discover family. This is where Rajeev is saying that we'd like to come in, because that's where the mass market is and that's where we compete. But the competition will not be so much on the price as in terms of the feature. So for example, we have launched the Discover 100 CT, it is priced at about INR51,000. We have launched the Discover 125 ST, which is priced at INR55,000. So, the products that we launch will get much more excitement and how much feature that is what is available in the market today and definitely at a price which we believe the customer should pay for that. So, it's not going to be price – throwaway price product, but it's going to be technologically superior price for which the customer is hopefully willing to pay that amount.

Srinivas Rao - Deutsche Bank: On that related note, I mean other expenditures which went up this quarter. I mean, you had mentioned in the last quarter about in the interest subvention being there in some form. But that being part of your overall marketing budget and not impacting financials? Could you throw some light Kevin as to what is the current state of the market in terms of financings?

Kevin P D'sa - President (Finance): We stopped it on 31st March. So, right now there is no subvention scheme across. We did introduce the subvention scheme sometime on 15th of January to just sort of see whether there is an impact of that. But when the customer is not buying it, I think it went on record on TV itself in February and said the subvention scheme is really – it doesn't seem to work, because the customer is not willing to walk in. The subvention scheme, what you actually effectively do is the guy who has already buying on credit is getting the benefit without incremental sale for the company. So, there is no subvention scheme going on. There is incentive scheme going on. Very frankly, May month has been very strong, but is it something that one would say that it's sustainable, I have my reservations. April has been good. May has been extremely strong, but May has been extremely strong in North India; so UP, Bihar, Orissa, et cetera, the market has grown by over 20%, but South India, Western Maharashtra remains still subdued. The reason basically all of us are attributing to the entire growth in the Northern states is primarily because of the marriage season, which is concentrated in the month of May, as against last year where the marriage season was shift between April, May and June. So, therefore, one needs to see whether this – what happens in June and July. My own view is, I'm cautiously optimistic and the industry turnaround will take place primarily dependent on the monsoons.

Operator: (Dinesh Singh), Morgan Stanley.

Vinay Jaising - Morgan Stanley: Vinay (this side). Actually, Kevin you said that you have already passed on 50% of the benefit in the exports. So when exactly did you take these sort of price cuts or something similar in the export markets?

Kevin P D'sa - President (Finance): Vinay, I'm saying that I'm targeting – I have passed on 50%, it doesn't mean I have already passed on. What I'm saying in my mind is that, planning is up to 50% we (do on) passing on. So passing on may mean that when they increase cost of the vehicle we may absorb it. So it doesn't mean a price cut automatically up to 50%. So the weighted average of the entire thing, what I'm saying, is out of the total extra revenue that we may get from account of the (Asian) rate about 50% of that is reinvested. So let me not say passed on. I am using the word reinvested into the business. Reinvestment could be by way of reduction in prices in certain markets, it could be an upgrades at the existing prices or it could also mean higher advertisement spend in those markets, by way of building up the brand. All normal price amendments and changes take place on 1st April.

Vinay Jaising - Morgan Stanley: Second question Kevin if we look at FY'14, we do have a currency benefit, we are talking about three-wheelers doing a 10% to 12% both in domestic and export markets. So, ideally our margins should have sort of upside risk to them, but the Company sort of is maintaining for a more like a flattish margin, is it on account of the mix in domestic three, two-wheelers that could sort of deteriorate, is that the sort of understanding?

Kevin P D'sa - President (Finance): I would believe that given the fact where we stand today, there are two things of concern area, one is if you see my fourth quarter, my margins have come off from the 20% to 19.2% and the reason why 19% has come down to 19.2% because my volumes were just not there. My turnover for the quarter or the fourth quarter was the lowest for the whole year. So I'm being cautious in terms of saying that I don't see how far the domestic market will grow and if the domestic market grows and that's where I will be able to get some sort of leverage in that thing. So for me when I'm in a very lean organizations and most of my cost are variable, 0.5% or 0.6% goes either way, because (indiscernible) is the volume. Secondly it's very correct, what you have mentioned is as what Rajiv mentioned and Srini had asked me earlier is the fact of the launch of the new Discover family. The new Discover family that comes in will be launched, so it will not give you the 19% or 20% EBITDA margin that is there for the Company. So, therefore what will happen is the blended weighted average of the margins of the Discovery family will come off a little bit, and therefore we are being cautious in saying that if the margin stays at 19% to 20%, what we believe will be the right margin for the Company.

Vinay Jaising - Morgan Stanley: Kevin, lastly, like anything on the three-wheeler, like last year we had a good run because we launched diesel three-wheelers which (did) straightly well for us. This year the 10% to 12% growth that we are looking for domestic three-wheelers, what exactly is driving that?

Kevin P D'sa - President (Finance): I think there are two things driving that. One is the success that – three things I would say. One is the success of the existing diesel segment where we are making further growth. Second is the entire range of three wheelers is coming in for an upgrade. The new upgrades will be launched in the second quarter of the current year, so there is completely refurbished three wheeler that comes in with looks and features and form, etcetera, so that should probably hastened the replacement cycle. Third, there is reasonable good news round the corner on the permit side.

Vinay Jaising - Morgan Stanley: So this doesn't include anything on RE60…?

Kevin P D'sa - President (Finance): No. no. In my entire figure right now RE60 is not included at all.

Vinay Jaising - Morgan Stanley: Even in exports, your guidance…

Kevin P D'sa - President (Finance): Because RE60 in any case is going to come out into the market only in the fourth quarter, so it will not be a significant to swing the margins turnover numbers either way.

Operator: Pramod Amte, CIMB.

Pramod Amte - CIMB: I wanted to check in the marketplace there is warranty scheme which has been floated from the competitions, what's your feel and outlook on the same and what are your warranty expenses experienced on the products?

Kevin P D'sa - President (Finance): I think warranty expenses across the board for most of the companies in the two-wheeler, whether it's TVS or whether it's Honda, Hero, I think is less that INR50 a vehicle, here. So I think the five-year warranty scheme that is announced is more of a confidence building measure. I don't think it will be a significant impact to their P&L and also, for example, I would say that it's more a confident hit to GAAP P&L will not be substantial.

Pramod Amte - CIMB: You don't think that will be industry phenomena required as we go forward?

Kevin P D'sa - President (Finance): Not required at all.

Pramod Amte - CIMB: When I look at your free cash flow, because of the increased CapEx or the IRCA spending and also because of working capital, it seems to be almost like half of last year. Would you like to give more color on it? What's your outlook on the same on these parameters?

Kevin P D'sa - President (Finance): Approximately, INR300 crores if you look at it, my working capital management is what I got affected. So I would say that INR335 crores we have got is stuck in a further VAT. So my VAT outstanding which was INR800 crores odd as of 31st of March, will become INR1100 crores. So that's a INR300 crores incremental that's gone from our working capital, and debtors, domestic exports all put together has taken away another INR250 crores.

Pramod Amte - CIMB: Do you think that will ease off next year if we look at on that front?

Kevin P D'sa - President (Finance): I hope so, because you see I'm getting all the correct – commitment from the sales tax department. In fact, my representation to them, the commission sales tax orders out and gave us a circular during the year '12-'13 itself in February, circular came out, which should benefit me than the March budget that came out, my further point in terms of giving exporters a benefit that came out. So the guidelines now take care of me, but the issue is basically at the administration and the implementation. So logically all things going well, the INR1,100 crores in next year should reach somewhere near INR600 crores. So that should release some amount. As far the debtors and other issues are concerned, I don’t see any reason why that should go out further. We are at about – today outstanding will be about INR350 crores. I don’t see any reason why that should go up. So I would say that on a working capital side, next year I should be able to get back, plow back at least about INR500 crores.

Pramod Amte - CIMB: The spend of CapEx this year, where did it go and outlook for the same next year?

Kevin P D'sa - President (Finance): I think as far as the CapEx goes for the next two years, I would see us somewhere near about INR500 crores or INR600 crores total CapEx, that will take place.

Pramod Amte - CIMB: Sorry, this is combined two years?

Kevin P D'sa - President (Finance): Two years, yes.

Pramod Amte - CIMB: Including the RE 60 project?

Kevin P D'sa - President (Finance): Yes, including the RE60 project. Because the major part of this what has come in has come in the RE 60, an expansion projected at Waluj.

Operator: Akshay Saxena, Credit Suisse.

Jatin Chawla - Credit Suisse: This is Jatin. Just a follow-up on the CapEx. So this year, we've had a significant amount of CapEx. Where has that been spent, because we have not increased any capacity (rate)?

Kevin P D'sa - President (Finance): No, this is basically taking place in the Waluj plant and the R&D CapEx that has taken place over here for the R&D new plants and equipment that has been purchased. So when you see my Director's report, you'll see also a substantial increase in the R&D spend.

Jatin Chawla - Credit Suisse: This is on the two-wheeler side only, R&D side or is it…?

Kevin P D'sa - President (Finance): It is basically the infrastructure space, buildings, and equipment and all, which is for multi purposes.

Jatin Chawla - Credit Suisse: One small clarification on the export side. I was looking at the number for this year, which give the number for kind of – the last year number that you have indicated in the press release is about INR6,450 crores, and when I look at the number in the Annual Report last year, that's about INR6,600 crores. So is there some reclassification that we've done there?

Kevin P D'sa - President (Finance): When I gave the press release last time, I had given you in terms of the purpose of – the figures that I had given was export revenue, the F.O.B. value of exports plus exchange rates. So what you are looking in the balance sheet is the F.O.B. value of exports. So for the current press release, if you see, I've started giving only the F.O.B. value of export.

Jatin Chawla - Credit Suisse: So what is the value and the number that you have been giving us for the last three quarters, is – what's that number? So you've...

Kevin P D'sa - President (Finance): We think the exchange rate?

Jatin Chawla - Credit Suisse: Including exchange. So what is the – then including the exchange rate, what is the number for this quarter in terms of export?

Kevin P D'sa - President (Finance): It will be another INR31 crores.

Jatin Chawla - Credit Suisse: Another INR31 crores to be added, okay. I think that's all from my side. Thanks.

Operator: Jinesh Gandhi, Motilal Oswal.

Jinesh Gandhi - Motilal Oswal Securities: A couple of questions. One is on just continuing on this fix benefit retention part, you indicated that it will be the fleet investing 50% of fixed benefit and so effectively balance would in turn mean about 152 to 170 odd basis point improvement in margins. Are we looking to retain that or in case of demand doesn't pick up in domestic market, do we plan to reinvest in domestic market itself?

Kevin P D'sa - President (Finance): (Indiscernible) to say that because that has gone up, might margins will go up, et cetera. There are so many factors that affect margin. It will, of course, then also been that like I said some money will be spent on adjustment, there will be new product launches. The new product launches will not come as a 20% EBITDA mark, hence it will be at a little lower EBITDA. So I would say that overall keeping in mind everything a 19% to 20% business is what I would like to look at.

Jinesh Gandhi - Motilal Oswal Securities: 19% to 20% EBITDA margin, okay. Second question pertains to the depreciation part. This quarter we had seen an increase of about INR46 crore – increase to for above INR46 crore in the quarter. Should that be a more sustainable run rate or there would be any accelerated depreciation provided in that?

Kevin P D'sa - President (Finance): No, depreciation will be at about INR46 crores going forward.

Jinesh Gandhi - Motilal Oswal Securities: INR46 crore going forward.

Kevin P D'sa - President (Finance): Yeah, because again this INR46 crores that you're seeing is (I think in the) INR41 crores – INR43 crores that came in 31 March, 2012 and INR41 crores that came in that 31 March, 2012. But when you capitalize it in the fourth quarter, then automatically the depreciation goes up to that extent.

Jinesh Gandhi - Motilal Oswal Securities: Because in fourth quarter last year also we had seen that INR43 crores and then it again...

Kevin P D'sa - President (Finance): That’s because of the capitalization that take places at the fag-end, that’s when the depreciation charge goes up.

Jinesh Gandhi - Motilal Oswal Securities: Second question, last question pertains to the tax rate, considering that we'll be seeing further sales tax repayment. Do we expect tax rate be lower at about 26%, 27%?

Kevin P D'sa - President (Finance): No. See the 25% or 26% that you saw in the fourth quarter is an aberration because of the INR69 crores. So, if you remove the INR69 crores before profit before tax and then do the rate, we'll come back to the normal rate that I’ve been showing for the last three quarters.

Jinesh Gandhi - Motilal Oswal Securities: But there will be similar repayments in FY'14 as well?

Kevin P D'sa - President (Finance): It all depends on managements call, whether we want to prepay or whether we want to retain the benefit. Let me just tell you that, I did it three years back when I repaid the entire balance. I repaid it last year. I repaid it in the current year and next year, it all depends on the budget, et cetera. So, the budget, for example, I am just saying it aloud, if the budget, for example, say that this is going to be taxable, then I may not repay it.

Jinesh Gandhi - Motilal Oswal Securities: So how much is balanced to repaid?

Kevin P D'sa - President (Finance): Nothing to be repaid, but the outstanding benefit that I yet to get, so the current year benefit I will get in the next year. So that is about INR60 crores, INR70 crores is what I should be able to get.

Jinesh Gandhi - Motilal Oswal Securities: The INR69 crores in this quarter is also for the full year is the same number.

Kevin P D'sa - President (Finance): Full year. I account it only when I actually repay it because the management may take a call not to repay, so I can’t apportion it over the quarters.

Operator: Jamshed Dadabhoy, Citigroup.

Jamshed Dadabhoy - Citigroup: Couple of questions. On the export side, could you shed some more light in terms of 10% to 12% growth that you expect, how do you expect key markets to perform? That's the first question.

Kevin P D'sa - President (Finance): The answer to the first question is, I would believe that Sri Lanka will remain by and large constant. If at all Sri Lanka grows, it will be an upside to this 10% to 12%. I see growth coming from Latin America because the bottom seems to have reached over there, so fresh orders and demand coming in. I see growth coming from Africa as normal. Egypt is doing well. I have been said that Egypt currently has landed up in – for the last three months is landing up with a balance of payment problem. So I would say that that are hiccups here and there, but net-net if I look at it on a whole year basis, I'm comfortable to quote a 10% to 12% growth. This is keeping in mind…

Jamshed Dadabhoy - Citigroup: This 10% to 12%...

Kevin P D'sa - President (Finance): …10% to 12% growth in dollar terms and this I'm talking in terms of what is happening at the domestic demand level. Now, there are certain situations that may happen as far as the external environment is concerned, where you may have like someone mentioned about emergencies in Nigeria, someone who was talking in terms of a balance of payment problem in Egypt. Keeping all these things in mind, keeping in mind the fact that we have 55 countries, I would say that 10% to 12% growth is something that one would look at.

Jamshed Dadabhoy - Citigroup: Does this include the upside in Indonesia with Kawasaki?

Kevin P D'sa - President (Finance): It includes.

Jamshed Dadabhoy - Citigroup: This 10% to 12%?

Kevin P D'sa - President (Finance): Yes.

Jamshed Dadabhoy - Citigroup: It includes.

Kevin P D'sa - President (Finance): Because like I've mentioned in the opening thing is that Kawasaki kickoff will start sometime in the second quarter. Last year if I recollect right, we did about 18,000 sales of Pulsar. So what I would say that maybe in the next year, I will have only nine months of work left to do the 18,000. Next year, as Indonesia per se, I will not see a growth, but '14, '15 is when the growth will come.

Jamshed Dadabhoy - Citigroup: Second question on the domestic side. How many new models would you be looking to add to the Discover family and what's the net addition that you would expect to the brand as a whole and given that there is a fair bit of cannibalization between the models?

Kevin P D'sa - President (Finance): Ideally I would look at it and say that from the existing 110,000 or 115,000 Discovers' that we do, my first benchmark would be whether we can hit a 150,000 on a steady state.

Jamshed Dadabhoy - Citigroup: Do you think – and what will sort of really drive this according to you?

Kevin P D'sa - President (Finance): A combination of two things. One is, of course the industry is self-reviving, and the second is of course, the product feature that we give is really something that the customer is buying for.

Operator: Akshit Gandhi, Aviva Life Insurance.

Akshit Gandhi - Aviva Life Insurance: I think the 49.5, which we have realized on the Forex side that is net of the range forward contract loss, which we would have incurred for the quarter, would that be right?

Kevin P D'sa - President (Finance): That's right.

Akshit Gandhi - Aviva Life Insurance: So then what I mean…

Kevin P D'sa - President (Finance): Just to explain to you…

Akshit Gandhi - Aviva Life Insurance: Yeah, please.

Kevin P D'sa - President (Finance): If you look at the other expenditure…

Akshit Gandhi - Aviva Life Insurance: Correct.

Kevin P D'sa - President (Finance): …that is (debt), it is INR69 crore we have notionally lost, account of the fact that my export in a particular month was not equal to my cover. I did not lose money, actually did not pay a single rupee money.

Akshit Gandhi - Aviva Life Insurance: Correct.

Kevin P D'sa - President (Finance): But the accounting treatment say that since there is no export gain that that gets charged off. So in my other expenditure for the whole year, include INR69 crores towards this sort of notional accounting.

Akshit Gandhi - Aviva Life Insurance: Right. So now when we are saying that the INR54 is what we will be realizing for the next year so that is because our range-forward contracts would also be closer to that, so it is just the net realization, correct?

Kevin P D'sa - President (Finance): Correct, so what is happening is my lowest band of the export is at INR53 to the $1. My higher band is at above INR57 to INR58 to the $1.

Akshit Gandhi - Aviva Life Insurance: Correct.

Kevin P D'sa - President (Finance): The rupee currently is at above INR55 – very close to INR55 as of today morning. So all contracts that are maturing in this particular period are showed at INR55. What happened last year was, I had a cover that was between INR52 to INR51, so somewhere at INR49 and the latter part was at INR51.

Akshit Gandhi - Aviva Life Insurance: Correct.

Kevin P D'sa - President (Finance): Now, normally what happens is, you have an export which is 80% of your – you have a cover for 80% of the exports, so the 20% should come at the cash rate, which was higher than the INR49 or INR51. Last year, there was no excess because actually I had a shortfall. So what I got was only orders within the band. In the current year, my band is INR50 to INR55 or INR58 or whatever it is, and my cover is only about 70% on my projected exports every quarter. So the surplus that comes in, there is no chance on me not meeting the guideline of our hit on that side and if at all, it will get the spot rate.

Akshit Gandhi - Aviva Life Insurance: I also wanted to know how many dealerships have we increased in the last year?

Kevin P D'sa - President (Finance): We have close to about 650 odd dealerships. We may add another 30 or odd dealerships in the current year, but let me again clarify, the 30 odd dealerships does not mean than I am adding dealership in the place where I was never present. It only means that in these 30 dealerships, the market size has become large enough for us a convert our rural sales outlet or our authorized sale center into a main dealer. So, 30 new dealers does not mean incremental 30 into 100 vehicles per month sales.

Operator: (Sanjay Doshi, Reliance Mutual Fund).

Sanjay Doshi - Reliance Mutual Fund: Just one question from my side was on the dividend policy, Sir. If you can throw some light there, because we have been accumulating significant amount of cash. So what's the thought process? Is there some big investment is being planned, or some new segments?

Kevin P D'sa - President (Finance): No. The dividend policy of the Company has always been to have a steady and rising dividend, and the Board is comfortable in distributing above 50% of the after-tax profit, up to 50%.

Sanjay Doshi - Reliance Mutual Fund: In that case also, Sir, I mean the CapEx is not big enough to take away our annual generation of cash flows?

Kevin P D'sa - President (Finance): Yeah, that's a different issue and that's what we are doing. That's not to do the dividend policy. That's I think your question is more related to what will help into the surplus cash?

Sanjay Doshi - Reliance Mutual Fund: Yeah.

Kevin P D'sa - President (Finance): So the answer is the surplus cash, we will hold it for some opportunity if at all we see in the near future. What I'll tell you, what we'll not do with that surplus cash, we will not invest into equities. We'll not get into (privilege) and unrelated expansion projects and we will invest the money in AAA rated securities, which give us a return of 9%. Also, in the near-term, I rule out any buyback and I rule out any special dividends.

Sanjay Doshi - Reliance Mutual Fund: Sorry to just stretch a bit more because, I mean KTM also we have largely done our investments. So…

Kevin P D'sa - President (Finance): Correct, but we are here for the long-term and the management is here for a longer-term in terms of the family and the promoters. So they will keep the cash, because one never knows what is a long-term opportunity may come in. So, very categorically and clearly I'm saying that the cash will remain, it will not get distributed in terms of the special dividends or buybacks in the near-term.

Sanjay Doshi - Reliance Mutual Fund: Okay, Sir, this is very clear and if I can take one more, I heard right about the export growth target and the margins for the Company. Have we discussed anything on the domestic growth that we are expecting?

Kevin P D'sa - President (Finance): Domestic growth is, I would say, is very fluid at this particular point in time, because none of us can see beyond three to four months. May, like I have mentioned to you, is – at the retail level is good, but what it does for all manufacturers, there is a Bajaj or Hero, it enables us to correct the excess inventory into the system. So the reported number that may come out from Hero or from Bajaj will actually be lower than the retail that have taken place. So that's where the industry growth rate, which I have always maintained for the year (up to) – for the first quarter will show probably flat to negative 2% to 3% as a reflection of the stock correction that's taking place in the system. It's only after June, with the monsoons coming in, et cetera, that one can get a clearer picture of where the industry is heading.

Operator: Amyn Pirani, Deutsche Bank.

Amyn Pirani - Deutsche Bank: Most of my questions have been answered. Just wanted to get some color from you on, could you share how KTM as a whole has been doing in terms of overall volumes and revenue and (indiscernible) PAT if you can share for this quarter?

Kevin P D'sa - President (Finance): For the quarter, I don't have, but KTM has done exceedingly well in the last year. They have a calendar year ended, so for the calendar ended March 2012, they have done extremely well. After a long-term they have actually declared a dividend. That dividend will actually accrue to Bajaj Auto. So based on that dividend, about INR22 crores of dividend will accrue to the Company, which in all possibility will be accounted in the first quarter calendar year – our financial year. Second is, I would like to say that if you look at the consolidated results as against the standard results, we have taken our share which is close to about 48%, INR89 crores of their profit is what we have taken into books.

Amyn Pirani - Deutsche Bank: Sir, this INR89 crores of profits on a comparable basis, how much of it would have liked grown on a year-on-year?

Kevin P D'sa - President (Finance): I think if I recollect correctly, it was about INR25 crores to INR30 crores last year and the loss before that for the last five years.

Amyn Pirani - Deutsche Bank: Just when can we expect the Duke390 in India?

Kevin P D'sa - President (Finance): Maybe in two months.

Operator: Sonal Gupta, UBS.

Sonal Gupta - UBS: Kevin, just on financing in the domestic market, how has your financing – I mean, sales in financing moved last year compared to the year before, I mean, where are you?

Kevin P D'sa - President (Finance): I mean, I think, if I look at financing, you should see Bajaj Finance's results and if you track Bajaj Finance's results, you'll see how superbly they have done. A lot of the business, of course, in the personal durable segment and a lot of it is in far as the auto part of the business is concerned. So from doing about 45,000 numbers a month, that they have are almost close to about 58,000 to 60,000 numbers a month, that translates to 60,000 numbers per month – INR55,000 numbers a month as against our retail sales of about 210,000 numbers a month. So I would say that the financing today is about 65,000 out of the 210,000 that we do every month.

Sonal Gupta - UBS: So this is sort – so it moved up from 45,000 to 65,000.

Kevin P D'sa - President (Finance): Correct. The only difference is that while it has moved up and I'm talking here from Bajaj Finance point of view, the bad debts in this thing has come down significantly.

Sonal Gupta - UBS: But you don’t have any track of other non – I mean non-affiliated finances, how much…?

Kevin P D'sa - President (Finance): I would be able to say. That’s why I am talking of HDFC and others. I will put together would be 10,000 to 11,000 numbers only. What we don’t track is the unregulated broker network.

Sonal Gupta - UBS: The second thing is any plans to increase the KTM ownership because there is some news around that?

Kevin P D'sa - President (Finance): I have no news in that sense. That will always come out from MD's office.

Sonal Gupta - UBS: Just, while we’ve talked about Discover, there are also couple of Pulsar launches planned for this fiscal year?

Kevin P D'sa - President (Finance): See there are number of vehicles on the annual number of vehicles already ready is a question of timing, is a question of when we would like to launch it. So, let’s say for example, the R&D and the marketing and all of us sit down, there is a range of almost 14, 15 vehicles slewed up for launch in the next 12 to 15 months, I mean it will be ready. The question is, at which point of time you want to launch. So like Rajiv mentioned, the current year we’ll be focusing primarily on this mid segment versus (indiscernible) second space where our market share is 16% and that’s where the focus will be in the current year.

Sonal Gupta - UBS: Very frankly, the year has not really planned out, I mean last year, as you would have expected and we've seen some amount of market share erosion especially in the 125cc category. I mean how do you – I mean is this launching products going to be good enough for you because – I mean clearly last year also you had a great product in ST. That’s still not helped you in terms of maintaining the market share or improving it. So, I mean is that sufficient strategy?

Kevin P D'sa - President (Finance): Sameer, we have to try and do what we think is right. It is not that everything succeeds. I mean, if every of us had the magic mantra then there would be some (debit) on the 100% market share. So I think we try, we do our best (indiscernible). We believe in our strategy. We will like to entreat our market shares in a particular strategy, which is a long-term strategy of sort of not compromising on profit but getting the best value for the customer, keeping in mind all these factors. So maybe in a particular year it may lose 1% in the market share, but I think that the strategy remains in focus, it will remain more and more away from the commoditized space, it will remain more and more brand-centric in that respect. Now, I appreciate what you are saying is when we launched the Discover 125, there is an internal cannibalization that takes place, but if you're in a position to get now differentiated products at different price points, we hope that this will create enough of excitement to segregate the market and slice it more in order to give us the market share. That's why for me my first target for internally in my mind as for my satisfaction will be when Discover from 110,000 numbers per month goes to 150,000 numbers per month.

Sonal Gupta - UBS: Kevin, just last question on pricing, I mean in Africa you're saying you're passing on the benefit of the exchange rate, but Africa – I mean as you've sort of indicated earlier, sort of the place where you make the lowest margins. So wouldn't it have made sense to maintain or sort of get some of that benefit in Africa and probably pass it on other markets, where you make better margins?

Kevin P D'sa - President (Finance): No, see, the issues basically in Africa, the poverty level is so high that there's a vast number of customers who are available over there who cannot buy our motorcycle. So one is your profit margin; the second is, you may have want to make a high profit margin but if the customer cannot afford your motorcycle at that profit margin, you have to do something. The second is what happened in Africa and especially in Nigeria, it's the ban of the two-stroke vehicles. So when the two-stroke vehicles came off to 65,000, 70,000 (narrow) customers have no money to buy either 110,000, 115,000 (narrow) motorcycles that are four-stroke. So it makes more sense to sort of offer a vehicle which is a little lower so that the customer can afford to widen – expand the market share now.

Operator: Hitesh Goel, Kotak Institutional Equities.

Hitesh Goel - Kotak Institutional Equities: Basically this is on export market. Can you give – how have your mix has changed within different markets and how have your market shares have moved especially in Africa and Latin America during this year?

Kevin P D'sa - President (Finance): As far as I recollect, I don't have the full detail, but I will share with you to the best of my knowledge. I think we have gained significant market share in most of market that we have been presenting. I recollect – I'm not too sure, but these are my figures which I recollect is in for example in Nigeria the market fell by 22%, but we grew 12% and our market share is close to 40%. To the best my knowledge again, out of the 40, 50 odd country that we export, we are market leaders in 12 other countries. So in most of places, I think we have gained market share. The only place where we have lost market share will be Southeast Asia, which is primarily in Indonesia, which has grown much higher, faster whereas we have not kept pace, we have actually declined.

Hitesh Goel - Kotak Institutional Equities: Kevin, you are talking about 10% to 12% growth in revenue terms in exports or is it volume term?

Kevin P D'sa - President (Finance): Volume and dollar value.

Hitesh Goel - Kotak Institutional Equities: Because your dollar relation will be higher next year, so…

Kevin P D'sa - President (Finance): Correct, correct. So I'm talking, let's say, 10% to 12%. I will simply put it in terms of when I'm talking of dollar value terms, let's take in number terms so keeping the prices same.

Hitesh Goel - Kotak Institutional Equities: Is the Africa margins lower than Latin America, because of which also you must have seen some pressure on your export margins?

Kevin P D'sa - President (Finance): The Africa margin if I take as a continent, if you are asking me Africa, my margin is 20% because we sell a lot of three-wheelers over there, where my margins are in excess of 30%, but if we talk about the motorcycle, I sell the Boxers over there in Latin America I sell the Pulsars.

Hitesh Goel - Kotak Institutional Equities: So basically what is the outlook on three-wheelers exports? Do you see any revival happening? Because Rajiv said Egypt is coming up well, so can you give some color?

Kevin P D'sa - President (Finance): Egypt and Sri Lanka went off in May, June, July, August. Africa to Egypt took off big time and in fact Egypt where we are selling almost about from a normal 4,000, we went up 9,000 numbers. The record says, even today for example in Egypt for the last two months, the dealerships are out of stock. The demand has piled up, but because the balance of payment problems in Egypt for the three four months, it's very, very difficult for the importer to open a Letter of Credit and we are not going to offer any credit whatsoever. So that extent, whatever numbers I am reporting month-on-month, is actually a backlog of almost about 10,000 vehicles to Egypt, which has been delayed.

Hitesh Goel - Kotak Institutional Equities: This 10% to 12% growth in export is total of two-wheelers and three-wheelers or it's…?

Kevin P D'sa - President (Finance): Yes, total.

Hitesh Goel - Kotak Institutional Equities: One last question on domestic, on the margin side, you've been guiding that you have taken an increase of prices currently and the commodity cost is stable, so will it accrue to margins or will it be passed on in terms of advertising or promotions?

Kevin P D'sa - President (Finance): The margins will be based on, like I said, on number of factors, including and more importantly as you go forward into the product mix. So the product mix that you are talking about, like I mentioned, is my maximum growth in export also will be Africa. So that's going to be where I have not increased prices and actually that's where for example in a growth which is reflected in the margins. Second is like I mentioned earlier, my new products that are coming in, I would like to see the Discover going up to 150, which is again not give me a 20% margin. So therefore for me keeping all this in mind, a 19% to 20% margin is what I would like to aim at.

Operator: Pramod Kumar, IDFC Securities.

Pramod Kumar - IDFC Securities: Kevin, my first question pertains to marketing expenditure. If you can just explain how is that – how has it moved on a YoY basis because we definitely see quite a bit of Discover and Pulsar adds of late? So, just want to see how it has moved up and how do you see it going forward into FY'14?

Kevin P D'sa - President (Finance): I think as a percentage, it remain by and large the same. The spends will increase and the spends will increase not only because of the new product launches that are taking place in the current year, but also because of the amount of line that we want to buildup in the export markets. So if I spend INR4 in India, I spend almost INR1 abroad. So (advertising) spends will go up, you know the percentage of the sales target may not be off much, but advertising spends will go up.

Pramod Kumar - IDFC Securities: You did say that you're aiming to retain 50% of the – or pass on 50% of the benefit to the consumers?

Kevin P D'sa - President (Finance): So this 50% is an average that I'm talking about is not that as on 1st of April out of 54, I got 47, I mean I got INR6 extra and therefore INR3 pass, it's not like that.

Pramod Kumar - IDFC Securities: Exactly. So that's what I was coming to it. It just a – that's what you aim for the full year and to begin with it may not be so high and if the market demands you may actually end up giving that number?

Kevin P D'sa - President (Finance): That's right because what happened is basically for example, if I'm talking in terms of spending more money on dividend aboard, it come from this kitty.

Pramod Kumar - IDFC Securities: Exactly. Yes.

Kevin P D'sa - President (Finance): The way the company operates is a bottom up approach that I want, for Africa, this margin, for Nigeria, this margin, for so-and-so, this margin, that's how we work. So the kind of 20% and 19% as a result of the business models is accumulation, not that 20% target and drive downwards.

Pramod Kumar - IDFC Securities: Kevin, the second question was on Iran, there was some news article that India is trying to work out a new arrangement with Iran under the rupee export scheme because of the dollar embargo. I believe Iran has been impacted market for us for – at least in the last year. So if you can just explain how it's shaping up and whether – will this rupee export scheme help us?

Kevin P D'sa - President (Finance): Any rupee scheme export will us, in fact, there is already a scheme that was prevailing over there in terms of UCO Bank being the central agency. But it is not easy and I don't see much of – to do with this.

Pramod Kumar - IDFC Securities: Because I think the government is now reworking it and they are going to import more, because apparently we had a huge import and very little exports.

Kevin P D'sa - President (Finance): That's right, but right now I don't see any major benefit coming.

Pramod Kumar - IDFC Securities: If anything will happen there, that could be a positive in terms of…?

Kevin P D'sa - President (Finance): (Indiscernible).

Pramod Kumar - IDFC Securities: Kevin on RE60, now you are talking about a launch in 4Q and I think the product has already been sited around Aurangabad under trial. So is it like you are waiting for the government norms to come out even before you start exports?

Kevin P D'sa - President (Finance): No, no, whatever you are seeing is basically initial, what we call, tough customer feedback, price et cetera. All these vehicle go to six months or seven months of active trial, whether defects noted, whatever customer complaints are there, whatever issues are there, get addressed and then it's almost three to six months after which is really coming to fruition.

Pramod Kumar - IDFC Securities: In the export market, initially, will it be more like a replacement for three-wheelers as your – and then you will be feeding the same export three-wheeler market with RE60 or how will be the strategy? Whether it will add to the net volumes of your three-wheeler exports?

Kevin P D'sa - President (Finance): That I won’t be able to comment at this stage.

Pramod Kumar - IDFC Securities: Best of luck, Kevin.

Operator: Chirag Shah, Axis Capital.

Chirag Shah - Axis Capital: Kevin, first question is a follow-up on, that you had indicated you're seeing recovering in demand. Can you indicate which segments have seen recovery in terms of product? These are executive segment or – which is largely seeing volume recovery?

Kevin P D'sa - President (Finance): Executive segment and the lower segment.

Chirag Shah - Axis Capital: The lower segment. So nothing much is happening on the top end side?

Kevin P D'sa - President (Finance): No.

Chirag Shah - Axis Capital: Second question was on this 19%, 19%, 20% margins. Under the new reporting format if I have to look at this split up between reported margins and the way you calculate it, how this difference will behave? Right now, it's roughly 1.5 percentage points.

Kevin P D'sa - President (Finance): Yeah, I've always given for you all to calculate and I gave additional information in the block which is treasury and the other income. Treasury is pure treasury, which is the income. The rest for me as far as I am concerned, it is concerned about my automobile business. So the fact that SEBI changes its format to make it something else does not make my difference, because if it's not treasury, if it's not automobile, what is this money.

Chirag Shah - Axis Capital: So what that generally contains of, if you can help us understand broad key constituents of that?

Kevin P D'sa - President (Finance): The three main constituents of that, again I think I've mentioned it to someone yesterday, is made up of three basic (presenters). One is, when he talk of the direct income that is taking place, it is made up of the royalty that we receive. It is made up of – that is the main operating income. It is made up of royalty. It is made up of scrap sales. It is made up of the duty drawback. When it comes to other income, it includes interest received from dealers. It includes rent on property given to Probiking showrooms, where our Probiking vehicles are sold. More importantly, it includes the valuation gains on derivative hedging instruments. So if you recollect last year, there was a loss of INR134 crores. This year as I've mentioned to you, that's a notional loss, it gets reversed along with maturity of the contracts. So the maturity of the contract took place in the current and then INR134 crores got reversed completely and there's a further hit of – but there's a hit of INR2 crores, so INR131 crores gain, INR2 crores loss – INR134 crores gain, INR2 crores loss, INR131 crores. So the INR795 crores includes the INR131 crores of this.

Chirag Shah - Axis Capital: INR795 crores for the full year includes INR131 crores of this?

Kevin P D'sa - President (Finance): Correct.

Chirag Shah - Axis Capital: The INR69 crores notional loss that you indicated for this year that would again be a part of other expenditure, right?

Kevin P D'sa - President (Finance): Other expenditure. And other expenditure also includes for the whole year, INR35 crores on impairment of Indonesia.

Chirag Shah - Axis Capital: (So that alternate growth) INR35 crores were impairment of Indonesia. And that would be accounted in which quarter?

Kevin P D'sa - President (Finance): That is accounted over three quarters.

Chirag Shah - Axis Capital: Just a small clarification, in the earlier format, this hedging gain or loss that you indicated were used to be a part of your net sales? Is it correct?

Kevin P D'sa - President (Finance): No. Net sales is only the difference which comes out from hedges. So for example if I explain to you logically, you see my last year’s balance sheet, the current liability on the MTM basis, as I mark-to-market my hedging instruments, there is a loss of about INR468 crores odd. Out of that INR468 crores, INR134 crores was to the P&L charge because of the time value. The balance INR334 crores was sitting as a debit in my hedges. So this is the MTM gain of the contracts to be expired in the next year. So as the sales expire, I book the sales at the spot price but the contract which is there in the hedges hit the sales. So the INR339 crores that was there in the hedges of last year has become almost nil in the current year because INR339 crores has hit my sales.

Chirag Shah - Axis Capital: It's now come to your top line in the year …

Kevin P D'sa - President (Finance): Debit to my sales.

Chirag Shah - Axis Capital: Debit to your sales, yeah, fair point.

Operator: Basudev Banerjee, Quant Capital.

Basudev Banerjee - Quant Capital: I just wanted to have an idea of what was the volume growth for brand Pulsar as such in FY'13.

Kevin P D'sa - President (Finance): That we don't give individual numbers.

Basudev Banerjee - Quant Capital: Can you give some – throw some light on futuristic basis as such?

Kevin P D'sa - President (Finance): As of now, our market share is 47% to 48%. If the market grows, we will see numbers going up, and I'm quite sure that the market share of 48% to 49% will be maintained.

Basudev Banerjee - Quant Capital: Secondly, Sir, as you said that the African market trying to tab the lower end segment where affordability is an issue, and taking benefit from the rupee weakening in trying to tab that for volume growth in Africa, what will be your policy when the rupee reverses? So when – then that will become a low margin proposition. So will that become a hit on the negative side in that corresponding year?

Kevin P D'sa - President (Finance): My answer to that is, only I can tell you what we did historically, is when the drawback and the (DEP) will reduce from 9% to 4.5%, we immediately pass on 5.5% to the customer.

Basudev Banerjee - Quant Capital: But as you're saying that this part of the geography, the affordability is a question. So…

Kevin P D'sa - President (Finance): So the issue remains same. It's not going to the charity, if I can afford to do it, I will do it, but I cannot afford to it I'm not going to build up the market at my loss.

Basudev Banerjee - Quant Capital: So maybe at that corresponding year, you might take a hit on volume growth, because it has been…

Kevin P D'sa - President (Finance): Hypothetical, because like I’ve already mentioned to you in the thing that my next year’s contract is already rate higher than my current year’s contract. So I’ve already started covering '14, '15. While '13, '14 I'm assured of INR54 to the $1, '14, '15 also I'm going to assure myself of INR55 plus to the $1 and I don't know visibility of '16, '17.

Operator: Govind Chellappa, Jefferies.

Govind Chellappa - Jefferies: Two quick questions. What was the total ad spend last year and how much of it was in India and how much was it in…?

Kevin P D'sa - President (Finance): That we’ll wait for the balance sheet to come here.

Govind Chellappa - Jefferies: Similarly what was the total export benefit?

Kevin P D'sa - President (Finance): Export benefit, one second.

Govind Chellappa - Jefferies: I think it was INR564 crores in FY '12?

Kevin P D'sa - President (Finance): One second, I’ll just look at it. Export incentive was INR564 crores – it was INR417 crore.

Govind Chellappa - Jefferies: INR417 crore and as a percentage of export revenues, what would it likely be in FY '14?

Kevin P D'sa - President (Finance): In FY '14, it would be close to about 2.5%.

Govind Chellappa - Jefferies: It will be 2.5%.

Kevin P D'sa - President (Finance): 2.5% to 3% the reason being drawback rate is 2% and then I'm just taking it as a drawback, we never take it at 3%.

Govind Chellappa - Jefferies: The other question was on the premium segment, now you mentioned that you are confident of maintaining 47%, 48% market share. We are seeing more activity in that segment. I mean Honda has ambitious plans with CB Trigger. What gives you the confidence that you will be able to maintain this market share?

Kevin P D'sa - President (Finance): Simply on my past performance, yes. My past performance, that's all I can tell you and the product line-up that is coming in. That's why we believe, because it's not the Pulsar as a brand. If you'd look at it, my market share was 50% earlier, then Yamaha came in about 2.5, 3 years back. We dropped to 42%. We came up with the Pulsar again where we brought it up to 47%, 48%. There are ample products on the table that will bring it, so I think product enrichment, all those things help me maintaining this 47%, 48%.

Operator: Thank you. Participants that was the last question. I would now like to hand the conference over to Mr. Aniket Mhatre for closing comments.

Aniket Mhatre - Standard Chartered: Thank you, Lavina. On behalf of Standard Chartered Securities, I would like to thank the management team of Bajaj Auto, especially Kevin sir for taking his time out for the call. Thank you very much, sir. Thank you to all participants for participating on the call. Thanks and have a great.

Kevin P D'sa - President (Finance): Thank you.

Operator: Thank you. With that, we conclude the conference. Thank you for joining us. You may now disconnect your calls. Thank you.