Tata Motors : 2023-2024 Tata Motors Group earnings call transcript q 4

Tata Motors Limited

May 10, 2024

Tata Motors Group

Q4 FY24 earnings call transcript

MANAGEMENT: MR. PB BALAJI - GROUP CFO, TATA MOTORS LIMITED MR. ADRIAN MARDELL - CEO, JAGUAR LAND ROVER

MR. GIRISH WAGH - EXECUTIVE DIRECTOR, TATA MOTORS LIMITED

MR. SHAILESH CHANDRA - MD TMPVL AND TPEML

MR. RICHARD MOLYNEUX -CFO, JAGUAR LAND ROVER

MS. NAMRATA DIVEKAR - HEAD, TREASURY, IR, M&A, TATA MOTORS LIMITED

Presentation

Anish Gurav

Good day, and welcome to Tata Motors Q4 and Full Year ended FY 2024 Earnings Call. With me today are P.B. Balaji; Group CFO, Tata Motors; Mr. Girish Wagh, Executive Director, Tata Motors; Mr. Shailesh Chandra, MD - Tata Motors Passenger Vehicles Limited, and Tata Passenger Electric Mobility Limited; Mr. Adrian Mardell, CEO, Jaguar Land Rover; Mr. Richard Molyneux, CFO, Jaguar Land Rover and our colleagues from the Investor Relations team. Today we plan to walk you through the results presentation followed by Q&A. As a reminder, all participant lines will be in listen-only mode and we will be taking the questions via the Team's platform, which is already open for you to submit your questions. You are requested to mention your name and the name of your organization while submitting the questions. I now hand over to Balaji to take this forward.

Over to you, sir.

P.B. Balaji

Thanks, Anish. Good evening everybody and good morning wherever you are from. Standard safe harbor statement coming up, nothing new to report here. Next.

I think it's a year which has been pretty intense at all ends, be it on the business side or the

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May 10, 2024

corporate actions side. And I'd particularly like to call out in the CV side, the BS VI Phase 2 transition that has been a roaring success for us in terms of product delivery and market share pickup. We also had a very good work happening on Fleet Edge in terms of connecting almost 600,000 vehicles. And on the EV side, host of actions and particularly to call out the new EV dedicated stores that are starting to open up and of course, launch of the next architecture in our framework, the Pure EV architecture, and of course commencing of production on the new facility in Sanand and the rest is there for you to see. So a very satisfying year from a product and the business side as well.

Going on to JLR, equally intense actions at their end, where of course performance from a financial perspective has really picked up and there's a level of stability into the performance coming through. And Reimagine Transformation which Richard and Adrian are going to talk about is progressing quite well. And we also announced, I think the big one was announcement of the Agratas battery manufacturing setup which will be a very key vendor to JLR. And of course, the products continue to do exceedingly well. And with the kind of cash that got generated, more than GBP 1.8 billion of debt has been repaid out of operating cash flows in JLR. Next slide, please.

The corporate action side of course, equally intense there. The ADRs have been delisted, Tata Technologies had a very successful IPO. We picked up 27% stake in Freight Tiger, all of which you are well aware of. Additional one is the DVR EGM, where we had greater than 99.5% majority of minority approval for the scheme. It just tells you how well it has been received by the shareholders of both the "A" Ordinary and the Ordinary shareholders. And of course, on the demerger, we are working at frenetic pace to bring the scheme to the Board for approval. Next slide.

Moving on to financials, really a satisfying and a very pleasing performance after many years of challenging performances. And finally, on a full - year basis, revenue grew almost 27% with an EBITDA of 14.3% and an EBIT of 8.3%. In quarter, of course, it was Rs. 120,000 Cr of revenue. On a full-year basis, we're now touching the Rs. 4.4 lakh Cr of revenue, almost $50 billion of revenue starting to come through in this business. And call out your attention on the PBT numbers of before exceptional item of almost Rs. 29,000 Cr for the year, with the highest ever that we have done and I will talk about the numbers in context in a little while and of course, the reasons being the volume ramp up in JLR, as well as, India. Pricing actions across the board are done in a surgical manner and of course, mix continuing to play a very big role for this. And with Auto Free cash flow of almost Rs. 14,000 Cr for the quarter, another Rs. 27,000 Cr for the full year, that managed to help reduce the automotive debt. Next slide, please.

Thanks to this performance, the Board has recommended a dividend of Rs. 3 for the ordinary shareholders, Rs. 3.1 for the DVR shareholders, which is the normal dividend and there is also a special dividend in lieu of the successful TTL IPO of Rs. 3 per share for Ordinary and Rs. 3.1 for the DVR holders. So together is about Rs. 6 and Rs. 6.2 resulting in a cash flow of almost Rs. 2,300 Cr, the highest ever dividend that Tata Motors has paid out. Next slide.

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May 10, 2024

This is just to summarize of our performance, the slides are there for you to see, but maybe the next slide brings it alive even more. Why? This is really a year for all of us in Tata Motors to be satisfied. Revenue at its highest ever, EBITDA now touching Rs. 63,000 Cr of EBITDA in a year, and an EBIT of 8.3%. And if you see the prior high achieved, there's still some distance to go and therefore our journey continues. And PBT (bei) at the highest ever of Rs. 29,000 Cr. The second section is even more interesting because we did our highest ever investment spend of Rs. 42,000 Cr and still delivered our highest ever free cash flows after investment and after interest cost of Rs. 27,000 Cr. And thanks to this, now the ROCE is really starting to switch gears and ended the year at an 18.7% ROCE. So this, in a nutshell, is the performance and the rest of the slides basically bring this alive as to how we managed to do it. Next slide, please.

So a 13.3% growth for the quarter came from volume and mix as a lead at 9.3% and translation of 3.4%, every business contributed to the improvement in profitability as you can see in the numbers. And automotive debt is now Rs. 16,000 Cr, of it Rs. 7,300 Cr is the external debt and Rs. 8,700 Cr is financial leases. And split differently, the India business is now Rs. 1,000 Cr positive cash. JLR and Singapore are the two places where we have the debt to be knocked out, and the plan is to ensure this year we take that out completely. Obviously at a gross level and then the individual line items will be there, because Singapore may take slightly longer to take out, but between TML,JLR, overall we should be moving into net cash. Next slide, please.

Let me now hand it over to Richard to take you through the JLR performance. Richard, over to you.

Richard Molyneux

Okay, thank you. Go to the next chart, please. Right. So look the headline is we've continued to perform very strongly, both financially and operationally. Q4, if you look at the shaded section in the middle, is the best quarter of a very successful year. In fact, every metric is higher than each of the previous four quarters. So just a couple of highlights. Record revenue in the quarter of GBP

7.86 billion, that's up 11% year-on-year.Full-year revenue also a record. EBIT, 9.2% in the quarter and 8.5% full-year, that's in line with our updated and increased guidance at the end of H1. And free cash flow, GBP 892 million (Q4) or GBP 2.27 billion for the full year that's a record for JLR and a record by a large margin. And that has allowed us to exceed our net debt commitment and bring net debt down to a closing value of GBP 732 million at year-end. And that's from GBP 3 billion a year ago. Next, chart.

So I won't go through this in detail, I'll cover the majority of the points through the rest of the presentation. However, I did want to reference the point at the bottom around deferred tax asset. So after a series of significant UK PBT losses in the FY 2019 to 2022 period, we demonstrated sustainable profitability and this triggered a review resulting in a UK DTA of GBP 1 billion being recognized on the balance sheet. It means the profit after tax in the quarter was GBP 1.4 billion, and the full-year profit after tax GBP 2.6 billion. Next, chart.

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May 10, 2024

So, to go through the wholesales, in each quarter and you'll see at the top, each of our brands is improving, allowing us to get to 110,000 wholesales in the quarter. And if you look annually on the bottom side of the chart, Range Rover is up 27%, that's driven by progressive improvements in both our production system and those of our suppliers, allowing us to move up capacity levels in our Solihull plant. That level of 201,000 units is a record sales for the Range Rover brand. Also Defender, 115,000 units, that's in its fourth year, it is up 32%, which is an exceptional performance. That 115,000 is the highest sales level for Defender ever in its 76 years of history, since 1948. Next, chart.

This looks at the same thing regionally. Seasonally Q4 is always strong in the UK and a little bit weaker in China, largely due to Chinese New Year timing. But it's also typically strong sales performance for us in North America, even though that number was impacted right at the very end of the quarter by the Baltimore Bridge disaster. If you look annually on the bottom of this chart, every region is up, the UK, the U.S., and overseas, by about 30%. Even China which is almost certainly the most competitive car market in the world at the moment, was up 17% year-over- year and actually up 27% on FY 2022. Next, chart.

This looks at our PBT walk from Q4 FY 2023 to Q4 FY 2024, where we delivered the GBP 661 million. You can see a large part of it is volume, we did sell 16,000 units more than we did in the same quarter last year. Also see interestingly, there is some price pressure in the market, price is now a negative in this walk, whereas historically for the last few quarters, it's been positive. That is due to slow increases in our VME rates from 0.5% a year ago to 3%, that 3% is still very light in comparison to many others in the market. Those increases in VME have however been more than offset by material cost improvements versus a year ago. About half of that GBP 267 million is related to raw materials, which were quite benign in terms of cost in the fourth quarter. The other half relates to a non-repeat of costs from a year ago, where we were having to spend very heavily on both semiconductor supply and supplier volume claims. Within the structural cost element, you can also see we are spending more in terms of FMI & selling. That is, trying to make sure that we generate the orders going forward. So you can sort of see that in combination with the VME as being an increase in our costs to acquire customers, which we are offsetting through our own contribution costs. FX and commodities, not a major element in this walk, Sterling moved from about 1.24 against the dollar at the end of FY 2023 to 1.27. So a small adverse for us, but our hedging policy managed to protect us from most of it. Next, chart.

The top half of this takes the same PBT GBP 661 million and walks it to free cash flow. You can see within that cash profit after tax of GBP 1,357 million. That is a record for us. And even with very high investment spending required to deliver our cycle plan over the next couple of years, it still allowed us to generate free cash flow of GBP 892 million. A part of that was very favorable working capital, we do expect that to be a little bit seasonal, so to reverse back out in Q1, however, in Q4 it was very helpful for us. Bottom half of the chart looks at the same thing on a full-year basis, essentially says the same story, so I will not go through it again. Next, chart.

This looks at our total investment level. The total investment for the year was just under GBP 3.3 billion, of that GBP 2.3 billion was engineering. Engineering is in the hot phase of developing all of the future vehicles. Over time, that number will come down a little bit and the capital

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May 10, 2024

investment required to actually produce those vehicles will increase. Within our total engineering, 62% of it was capitalized, that is fairly stable as we've gone through this year. I also expect it to be relatively stable in the next few quarters. Next, chart.

All right, we go into the business update. So, next page.

So something's coming. Range Rover Electric, it is coming. We're doing it differently, this is not a BEV which is going to get sold as a Range Rover. This is the Range Rover with a BEV powertrain. And BEV happens to give the exact combination of power, quietness and serenity that is perfect for the Range Rover brand. So this will be the top end of Range Rover. This will not be any other thing than probably the best performing Range Rover that you can get. We have opened a waiting list for this vehicle, as of earlier on today there were 33,000 people who have signed up to that waiting list. In the middle, we will keep developing our SV offerings on Range Rover and Range Rover Sport. We are continuing to push price points up in that sector. So, for example, Range Rover SV doubled its volume in FY 2024 with an average sales price of GBP 202,000. And actually within that, there were 30 SV Bespoke Sadaf editions which were sold at over GBP 330,000 each. On the right-hand side, Defender OCTA, which will get launched later this year. This is the ultimate still with everything on every terrain that a Defender can do, but with the fastest and most powerful Defender that there is. I've seen this car and it absolutely passes the I really want one test, this will be a big success for us. Next, chart.

Takes us to our look ahead. fSo we expect EBIT margin for this year to be around the level of FY 2024. We do expect to have to spend a little bit more in terms of demand generation, and we will offset that operationally with cost reduction. We expect investment spend to be around GBP

3.5 billion, and we are holding our target to be net debt zero by the end of this financial year. However, I did note that with the reversal of some of the working capital effects that we've seen in Q4, Q1 cash flow will be broadly breakeven. Our priorities, we've written customer love to be at the heart of what we do, and we don't just mean this as words on a page. This will actually guide us in what we do and how we prioritize our time this year. It is crucial for us that we focus on this element of our strategy. We will continue to focus on brand activation to maintain our order bank and we will deliver our cycle plan.

With that, thank you very much for your time. I'll hand back to Balaji.

P.B. Balaji

Thanks, Richard. Let's get on with commercial vehicles. Next slide, please.

On the market shares, I think it's starting to stabilize with the trucks continuing to do well and the intermediates also starting to do well. And there are green shoots starting to emerge in a small commercial vehicle space as well, which is something that we said, we will continue to work upon. So it's going to take a few more quarters, but it's nice to see this now starting to turn, and it is seen to have bottomed out. Next slide, please.

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May 10, 2024

Overall numbers, it's been again a very strong year, there's a highest ever revenues, highest ever profits as far as this business is concerned as well. And we ended at Rs. 78,800 Cr revenue with a double-digit EBITDA that we had committed. And for the quarter the EBITDA came in stronger at about 12%, and overall the business generated a PBT (bei) of almost Rs. 6,000 Cr. And it also delivered about $1 billion of EBITDA, which is also a new high for this business. And as we demerge this business, you will start hearing more and more granular details about this as we go forward. Next slide, please.

Source of margins, we specifically called out the pivot towards a demand-pull strategy and improving realization that's exactly what is you see in the numbers. So the English and the math are in tandem. Next slide, please.

Girish, you want to cover this.

Girish Wagh

Thanks, Balaji. So I think the wholesale volumes grew by 14% over Q3. However, as we had indicated, there was a decline of 7% in Q4 and almost 4% on an entire year basis. Balaji spoke I think highest ever quarterly revenue also in Q4, surpassing the previous high which was in Q4 of FY 2023. On the shares, I think we improved the market share quarter-on-quarter. SCV pickup I think seems to have bottomed out in Q3 and we started the movement up. The transformation in SCV pickup is underway and we should start seeing results as we go ahead. In the non-vehicle business, we grew the revenue by 13% in Q4 and almost 17% on a year-on-year basis. And we've also seen a healthy growth in the annual maintenance contracts, which is an attractive business. Some of the bright spots, I think heavy commercial vehicles grew 5% Y-o-Y. Passenger carriers grew once again 26% Y-o-Y. And just in Q4, I think we had 38% growth, so the capacity increase actions that we have taken, have also started panning out. Going ahead on the customer sentiment index, I think they have remained firm and in fact, slightly grown in the Tipper segment, remained firm in ILCV. They dropped marginally, which is seasonal for HCV Cargo and SCV. Happy to report that the percentage of digitally generated leads and the sales grew to almost 26% now in Q4. So this is becoming a significant part of our lead generation mechanism and we will continue to ramp this up. I think this is giving a significant convenience to the customers. Net promoter score continued to improve and is now at a highest-ever level of 72, so we'll continue to maintain and grow this. During the year we launch more than 140 new products, more than 700 variants, and we will continue the same momentum. We saw in the commodities, the ferrous metals had some softening, while barring aluminum which has gone up, I think all other non-ferrous metals have stabilized. And I think the cost optimization efforts and realization improvement have helped to improve the margins. I think, during the year the fleet utilizations also improved, freight rates also stabilized. I think so we actually exited the year on a strong note. Going ahead we will continue our agenda of driving realization improvement by delivering more value to the customers and thereby have growth in the Vahan share. I think the demand generation, as we have been saying now will have a judicious mix of ATL, BTL and Digital, with digital becoming a key part of our demand generation. In electric vehicles, we are now looking at generating the demand in the post FAME environment, in the

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May 10, 2024

sense for ACE kind of a segment. There is a pause in the FAME incentives. And to address that we've actually launched a new variant of ACE EV which can carry a payload of 1 tonne. So the price in the hands of the customers will be around 17% more without FAME for a 1 tonne variant as compared to the earlier 600 kg variant which had FAME incentives and it will deliver almost 30% better TCOs. So it's far better business proposition for the customer. So we were preparing for this post FAME environment and have launched an exciting range of products. In the downstream business, we will continue the growth with increase in the spares and service penetration which has been continuously growing now for the last four years. Value added services penetration continues to grow and that will be our focus now. Essentially it also delivers higher customer value and also therefore helps us to improve the realizations. International markets, I think while the top line has remained flat, we have been able to maintain the market shares and in fact improve profitability quite a bit and we will also continue to maintain the health of the channel in these countries. Next, slide.

Coming to the Electric Mobility, I think during FY 2024 we deployed more than 1,700 electric buses, so now we have more than 2,600 electric buses on the road covering more than 140 million kilometers cumulative. ACE EV, we improved the retails month-over-month during the year, and overall we have now more than 4,300 vehicles plying on the road. Here we have clocked more than 16 million kilometers, so strong set of experience under the belt. In Q4 you will see the retails were at a high of 2,115, so good numbers on retail. In the market, the vehicle is delivering more than 99% uptime and happy to let you know that we are getting a large number of repeat purchase orders. I spoke about this higher payload variant being launched and it becomes a better business proposition for the customers despite the FAME incentive being paused for some time till we get to know about FAME III. Smart city, I spoke about the buses covering more than 140 million kilometers and consistently delivering more than 95% uptime. We continued to deploy the buses in CESL tender in Delhi, Bangalore. In addition, we have also started in Jammu and Srinagar now, where 150 buses have been operationalized. Going ahead, we continue the engagement with the government agencies. Happy to note that payment security mechanism is mostly in place. We are now working on options for the asset- light business model. And I think with this you should see us participating in the future tenders. On digital, Balaji spoke on the first slide itself. Fleet Edge has now more than 600,000 vehicles on the platform and it's amongst the top three globally in terms of customers on platform. In our quest to keep on introducing value-added options, we launched a machine learning-based model which gives live inputs to the drivers and the owners about fuel efficiency. We have branded it as Mileage Sarathi and I think it is giving a very good fuel efficiency improvement in real-life operating conditions. Fleet Edge now is providing a lot of contextual insights to both the drivers and the customers about vehicle health, driving behavior, as well as overall operations and thereby enabling them to improve the business. We also completed integration of Fastags, so we finally want Fleetedge to become a one-stop shop for managing the entire logistics business. E-Dukaan, which is our online marketplace for spare parts, grew a very healthy 3.8 times in revenue, and we have onboarded many more customers as well as retailers on the platform. So the convenience being provided by this platform is actually enabling us to improve the penetration of the spare parts. During the year, we also launched the online sales platform for vehicles. I'm very happy to tell you that we had total retail on the platform of almost 24,000. And just platform generated retail was almost 9,000 commercial vehicles. So I

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think on digital also, we are moving pretty well and we are committed to accelerating the pace of deployment as we go ahead.

Balaji, back to you.

P.B. Balaji

Thank you. Girish. Moving quickly on to Passenger Vehicles. Next slide, please.

I think the real heartening feature is a consistency in share improvement that you see. And second half actually at 14.3%, we were the number two player in the market for a good six months, which is nice to be. And other piece that's striking is the level of, I mean Shailesh had talked extensively about the multi-powertrain strategy. You do see it exactly playing out in the numbers. With petrol at 58%, diesel at 13%, 13% EVs, and 16% CNGs, so we are playing all the powertrains and it's coming through very nicely. And that has ensured those green emissions friendly vehicles also mean that our CAFE headroom that we have is substantial at this point in time, and well-prepared for the next phase of CAFE introductions as well. Next slide, please.

On the EV side, it's a slight disappointment when it comes to the 73,800. We would love to do something more on that, but that's fine, because markets do stabilize a bit and pull forward thereafter. So we just redoubled our efforts to bring in the early majority of people coming in. So therefore the charging network is a big piece of work that's underway. 10,000 chargers have come in, another 22,000 charges coming in the next 18 months which we are working with the various charge point operators. On the market share at 73% needs to be seen in the context of 14 models having coming in. And that's actually welcome news because more and more models coming in, the EVs become more and more dinner table conversations, which is what we would like to see. Next slide, please.

Financials, strong set of numbers coming through on the revenue line, close to now almost Rs. 52,000 Cr is the size of this business now or selling 573,000 vehicles. EBITDA at 6.5%, I'll peel it out for you in terms of PV and EV, because the mix of PV, EV as it changes, that is something that we will play out. And despite all the investment we are making in EV, the business is now comfortably profitable and doing well. Next slide, please.

A very important slide in terms of the split between PV and EV. Firstly, is a significant achievement for the PV business to become double-digit EBITDA. You recollect not so long back we were looking at EBITDA breakevens in this business and we have really come through a long way. The team has really put in a stupendous effort to bring this double-digit EBITDA business. And the business is now comfortably generating Rs. 1,800 Cr of profit, which is substantial. On the EV side, we are continuing to improve our profitability. You will notice that this is a quarter, we also took price cuts to pass on the benefits of the battery price reduction, some of them. And that's the reason you will see the EBITDA starting to increase now at 1.1% after we remove the PDE expenses, and PBT(bei) negative about Rs. 100 odd Cr, which is extremely manageable in the grand scheme of things that we're taking there. More importantly, the revenue is now almost Rs. 9,000 Cr, which not so long back was the size of the PV business

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itself. So we have created a new PV business out of this EV. Next slide, please.

Let me now hand it to Shailesh to give you a sense of the market and the performance of TML.

Shailesh Chandra

Thank you, Balaji. First, I would like to start with the first comment that you see on the table that we witnessed highest ever wholesale and Vahan in Q4 as well as in FY 2024. So happy to share that two of five highest-selling models were Tata PV cars. Starting with also the key highlights on industry, it was the highest ever wholesale, which was 4.2 million with a growth rate of 8.6%. However, the Vahan growth was slower at 6.1% and that really led to addition of channel inventory last year. SUVs further strengthened, we have been seeing this segmental shift, and that trend continued in FY 2024, the share increasing now to 51% at the cost of hatches of course, which fell down to 28%. But the other main observation was that the emission-friendly vehicles, mainly CNG and EVs, contributed to significant growth in the last financial year.

Coming to Tata Motors, this was the third successive year of posting highest ever wholesale, 573,000. And Balaji already spoke about, we being ranked 2 in second half of FY 2024 in terms of Vahan with a 14.3% market share. EV volumes grew by 48% and also we crossed the milestone of 1.5 lakh EV production cumulatively since the time we started selling EVs. Also Balaji talked about the double-digit EBITDA margin in Q4 for the PV business and this has been driven by a richer mix, structural cost reduction actions and of course, the operating leverage that we got in quarter four because of the increase in the sales volume. Coming to bright spots for the industry, I think, SUV is continuing to do very well and there is a huge traction that we see for the new launches, especially in the 4.3 meters segment and the subcompact category. As I mentioned about CNG and EV volumes, in terms of number it has grown by 55% and 70% respectively, in a market which has grown otherwise at 8.6%. So which clearly shows that the growth will be driven in future by the emission-friendly vehicles. And therefore for PV and EV business, it means that with the leverage that we will have of having a wide range of products in CNG and EV portfolio, it will really be upon us to capitalize upon. Good thing is also that all our products in the seven products that we have in our portfolio, most of them are in top two in their respective segment and therefore the traction for all the products continue for us. Also, we are going to introduce the new nameplate later in this calendar year which is Curvv. This is one segment where we had not been present, which is the 4.3-metermid-size SUV segment. Last year if you see this was a segment which grew very strongly by 42% and therefore this would be the product which would be helping us get into this high-growth segment. Talking in terms of challenges for the industry, after triangulating the projections from multiple places, we clearly see that the industry will moderate and grow less than 5%, given that the pent-up demand has got exhausted, the channel inventory is high and in the first quarter, we will face certain factors like that of elections, heat wave which might dampen the demand temporarily for quarter one, I would say. For us, you know, we would be focusing on driving higher penetrations of EVs and CNG. And here we are actually focusing on certain cities which we have identified where EVs and CNG have a greater propensity of selling. And we are also coming with exciting product interventions. In the next month, you will see one of our cars coming

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with what we call as the New Forever intervention. So this will continue for other models also. To drive the charging infra growth and I think we have been doing this for the last six months and it is working out to be very well in terms of accelerating the growth of charging infra through the charge point operators and oil marketing companies, the latter being more aggressive, I would say. And that has ensured that in the second half of the last financial year, we have doubled what was done in the first half of the last financial year. So going forward this is going to accelerate much faster. The public charging infra has already crossed 12,000, and we intend to further increase with this partnership through the open collaboration route that we have taken to increase it by 20,000-22,000 numbers in the next 18 months. And of course, the razor-sharp focus on profitability is going to remain through the structural cost reduction initiatives.

So back to you, Balaji.

P.B. Balaji

Thanks, Shailesh. Quickly wrapping up the rest of the slides.

Overall, CV, PV, the main one to call out is, Capex is well funded by the operating cash, and nothing abnormal there. And the investment spending, we ended the year at Rs. 8,300 Cr. There are some sure questions, I already see what is likely to be JLR's investment and what is ours - about GBP 3.5 billion in JLR and broadly similar lines for Tata Motors. So that's what our Capex for next year is also going to be. So I think we have stabilized broadly on our capex spends. Next slide.

And on Tata Motors Finance, let me quite quickly take that, we don't comment on market rumors that have come in this morning, but more importantly the performance of this business, underlying performance is starting to do good. Prudent sourcing and the concerted collection effort, the teams have been over the last 18 months working to get their house in order and accordingly work the system, resulting in very healthy early delinquency rates that we are seeing today. Collection efficiency continues to improve and that's why GNPA has now reduced to 5.6% and NNPA is 3.2%. So from that perspective, the portfolio is back under control. And therefore we are now focusing on profitable growth in a steady manner, that's how we want to build this business, and disbursals are starting to pick up. And also a fair amount of asset diversification underway in terms of used vehicles, structured financing, all this starting to improve the mix and support the NIMs as well. Capital adequacy and liquidity both adequate. No trouble there. Next slide, please.

So on the ratings, we are there. So nothing further to add other than we'll continue to work with the agencies to explain our performance and keep improving this number even further. Next slide.

Overall, outlook we remain cautiously optimistic on the domestic side, particularly in the first half, and do expect premium luxury demand to be relatively resilient. But of course, there are emerging concerns in the overall demand, which I'm sure Adrian and Richard will be talking