The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst
: And congratulations on a great set of number. My first question is on the non-vehicle side. Because looking at the Q-o-Q model mix and the way
the volumes have come off, and the ASP looks like your non-vehicle side of the business has done very well. So if you can just throw some color
on the quantitative aspects there as to how spare, how is defense, how is genset business, and that will be great?
Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst
: And second question is on the discounting side because the discounting scenario has seen a big change over the last 3 to 4 quarters. If you can --
Gopal, if you can just help us understand what used to be the typical discounts, what the industry was seeing on HCVs? And where are we today
as in -- just trying to understand how much of this profitability delta has come from discounting reduction alone?
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JULY 24, 2023 / 9:30AM, ASOK.NS - Q1 2024 Ashok Leyland Ltd Earnings Call
Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst
: And then, Gopal, do you expect this -- this is like something which you've not seen historically, even forget after the last 2, 3 years were discounting
went out of control, and now you're having a great run on pricing. But we never seen this kind of very strong pricing in this industry for the longest
period of time. I don't recollect if you -- from your experience or Balaji's experience or even Shenu's, if you've seen this even, like say, 15, 20 years
back, I don't recollect at least in the last 15, 13 years. So I'm just trying to understand what's driving this price discipline, sir?
Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst
: But that was on a lower cost structure as well, right? The content cost was much lower than where we are today. The average truck size were also
much smaller. But if you look at the price increasing velocity because it's 1 thing to -- because it ultimately adds up, right? Everything adds up, and
the customer also, there's somewhat of demand sensitivity at some particular level, right? I'm just trying to understand from a very high discounting
led environment where net pricing was actually collapsing to environment where net pricing is going up sharply. How is the industry -- how is the
customer base reacting to this? I'm just trying to understand how far can we continue to have such run, as in -- or will we see some... Yes.
Question: Pramod Amthe - Incred Research Services Private Limited - Analyst
: The first question with regard to the electric trucks. There are some signs of some mining companies or others importing the trucks from abroad.
How are you looking at the space, and when you're planning to introduce the products here?
Question: Pramod Amthe - Incred Research Services Private Limited - Analyst
: And second 1 is to Gopal. There seems to be a substantial movement in the net debt from a net cash position to a net debt from March to June. Is
it all attributed to working capital? So what is the working capital situation now?
And second with related to the same is, what is the investment into subsidiaries which has gone into June quarter?
Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst
: My question was actually related to what was just discussed right now. So just sticking to the cash flows, you mentioned that CapEx was INR 95
crores for the quarter. What was the investment in Switch in the quarter?
Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst
: Okay. Okay. Okay. But the full year...
Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst
: Great. And just on the Switch, the electric bus that you mentioned, now at least in India, most of these EV buses are being bought as of now by the
STUs and the model in which they are being bought is of a build/operate kind of a model. Now have you -- do you have any initial thoughts as to
when you launch an AV Bus? Obviously, I'm guessing that over a period of time, there will be a demand from the non-STU category also. So are
you gearing up for or planning to whenever you launch, bidding for these build/operate and transfer kind of projects? Or would you want to focus
on the non-STU segment for these -- for the EV buses specifically?
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JULY 24, 2023 / 9:30AM, ASOK.NS - Q1 2024 Ashok Leyland Ltd Earnings Call
Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst
: And if I can just squeeze in 1 last question on this model. Obviously, the way the financials and the profitability will work on these models is different
from how we have looked at the company for all these years. So how should we think about when you start -- like this will be long term, you will
not make the money upfront, you will keep the asset on your books. So maybe not today, maybe later on, whenever you can, it will be helpful for
us to understand how should we think of the profitability and the ROCs on this kind of a business? And how does it differ from your existing
business?
Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst
: Yes.
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JULY 24, 2023 / 9:30AM, ASOK.NS - Q1 2024 Ashok Leyland Ltd Earnings Call
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