Hero MotoCorp Ltd Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : My question was on the volume plans now. Obviously, on the wholesale side, your growth YTD has been below market. I think part of that has to do with inventory correction. But on the retail side, it hasn't been as good as what we would have hoped for. So can you help us understand what's happening on the retail side right now? And given that you have been correcting inventory, wholesales have been lower than retail. Where we would be currently on a retail inventory point of view?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : No. That context is helpful. So would it be fair to say that the inventory levels are lower than where they were, say, 6 months back? Like what is the kind of inventory levels that we're looking at right now, if you can help us quantify that number?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. And lastly, one thing on the EV side. You -- I mean, based on the press release and even in your commentary, you mentioned that ex of EV margins are already above 14%, which means that around 70 to 80 basis points [of a track] from EV. So is there a part of it, which is also because of the same subsidy removal? Or is it just a normal general investment on the EV side? And where does this cost sit, if you can help us understand? Like is it because the other expenses which had gone up earlier are come down now. So if you can help us understand where are you, where does this cost relative to EV sit?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Great. That context is helpful. I'll come back in the queue.

Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst : And I just wanted to raise the disconnect between what I hear from you guys on the call in terms of all the product launches that you had and the great response that you're getting and the market share because the data suggests that start of the fiscal till now you lost some [400] market share, and market share for August is trending below [27.]5. So I'm just trying to -- and I'm talking about Y-o-Y market share here like-to-like seasonality. So I'm just trying to understand what am I missing here? Despite all the launches, if we continue to see market share split, what explains that? Because in the core segments, you haven't lost market share as you alluded to. So just help us understand this gap between what we are seeing at your end and what we're seeing on the retail database.

Question: Pramod Kumar - UBS Investment Bank, Research Division - Analyst : Yes, yes. I think that explains because it will -- you need to feed these brands, make the marketing investment. And second follow-up, how should we look at the marketing budget? Because you're talking about like never-seen-before kind of a launch pipeline, right? So that definitely would acquire enough marketing support so that you don't kind of -- there are investments, not even marketing cost. It's investment, right, behind the brands. So how should one look at this and the ambition to get back to growth? Because to begin with for the first 4 months, we are down 5% on retail and 5% on wholesale. So we've got a lot to cover in terms of ground, in terms of volumes, right? So how should one look at the balance between volume comeback and marketing investments and the profitability?

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : So the first question with regard to the aggressive product launches you are planning. Considering the amount of your product, which goes in the product development and planning, how are you planning the system gearing up so that the full justification is made for these products to reach their potential, especially at the dealer end to give a time gap and to give proper attention to these products, otherwise, they usually go out, obviously. Can you give some color on that?

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : Excellent. So the second question is with regard to the prolonged government agency inquiries, which are happening. As shareholders, do you need to know -- do you have to make any provisions or impact for these taxes or any of those matters, one. Second, whatever policy-corrective actions you plan to take so that such things don't repeat?