Richard, we'll start with you first, with a question on JLR and then there are a couple of questions there for Shailesh. The first one from Sridhar, Antique Stock Broking. You spoke about a couple of factors which impacted wholesale volumes in Q1. I think the question is whether we are behind some of those temporary issues and how do we look at volume recovery in Q2 and Q3? The second question, if you could also guide towards the production ramp-up plan for Jaguar Type 01?

Yes, of course. So the Middle East, if you look through the number set, it was relatively flat in terms of wholesales, but down about 1,400 units of retail during the quarter as traffic through the retailer network was reduced. And also, to be honest, we had trouble getting some of the vehicles to the retailers anyway. The world is slowly adjusting to the new situation in the Middle East , where we, along with other manufacturers, are finding new routes into the region that avoid us having to go through the Strait of Hormuz. So, I think progressively the world will adjust and, obviously, we all hope that, at some stage soon, the situation will normalize and we'll be able to use the routes that we were previously utilizing. But I think, as I say, I think the world is adjusting to a new reality in the Middle East and adjusting relatively fast. In terms of Jaguar wind-down, yes, Jaguar was about 1500 units down versus last quarter in terms of wholesale. We are wholesaling the last vehicles that we have in stock over the next three to six months and then the new Jaguar Type 01, which by the way is absolutely fantastic, and we've just revealed some pictures of the interior, that will start production early next year. It is not going to have any material impact on wholesales for us in FY 27. It will come through in FY 28, along with the biggest impact of the Range Rover GT. The supplier fire, yes, that's done. That was early in the quarter. It knocked out our production facility in Solihull, which is the one that produced the Range Rover and Range Rover Sport for several days. The issue is now fully resolved. And yeah, that's now ended.

Thank you, Richard. Shailesh, moving-on to you now, I think there are a couple of questions lined up on EV bookings, raw material prices and price increases. I'll start with the first question is from Nishit from Axis. Despite such strong raw material headwinds, we've only taken a 1% price increase. Do you believe that customers are, what do you see the price sensitivity that customers had despite demand being so strong? No, it's a fair question. See, ideally, we would liked to have transferred all the price increase in the market. But unfortunately, we do not work live in an absolute world where we have no relative measures or benchmarks to look at. Unfortunately, every car that we have, we compare with the competitive set and what price increases they are taking. And therefore, we have to be around that to ensure that we don't lose on the competitiveness of each product. So, that has been broadly the reason why it has been 1% as of now. But from approach perspective or strategy perspective, we are very clear that to whatever extent we are able to accelerate and increase the cost reduction effort, whatever residual is left, we will pass it on to the market. And therefore, you will see more frequent but progressive price increases to ensure that we are able to compensate for the margin loss that we are suffering as of now. But taking a steep increase at this stage will definitely impact the competitiveness, less of volumes. And that's what we have to keep ourselves guarded. That's the only background of why we have taken 1%.

Shailesh, the next question, what are the inventory levels at the dealers? And what is your outlook on production amongst the supply challenges?

Yeah. So, inventory levels are right now around 30 days. We had an increase last month, as we were able to produce slightly more. Now, we have to significantly increase the inventory because these are not at comfortable levels ahead of the festive period. So, we are really expediting our efforts on the supply chain side to ensure that ahead of the festive season, we are able to build a healthy stock for a high retail in October. But we are as compared to the production that we were able to do in April, May and June, which was a lot affected because of labor issues as well as geopolitical issues, I think last month, if we had no rainfall issue in Sanand where we lost five days of production, you would have seen a much better number than 63,000. So hopefully, from this month, we will be seeing 65,000 plus production, more closer to 70,000 is what we are targeting for. But in the coming months, it should be more closer to 70,000 is what we are trying to achieve. But let's see, I mean, there are always surprises in the environment and we'll deal with that.

Okay. Shailesh, I'll try staying with you for another two, three questions before I go back to Richard. The next question again from Kapil. What is the kind of volume growth and margin outlook that you can provide for FY 27?

See, so far in Q1 and also I would say that if you take our growth, even in last financial year, we were twice the industry growth rate. I think in Q1, the industry grew by 24%, we grew by 46%. We would like to keep that kind of momentum going forward. So, I would definitely be targeting higher double -digit growths in FY 27. Margin outlook, as I said, we have to offset all kind of commodity increases that we are seeing through combination of price increase as well as cost reduction. So, we will try to neutralize the headwinds that we are facing through these two actions. Okay. Shailesh, the next question. This one is on EVs. Is the EV booking on a rising trend, even on a month-on- month basis from April? And what kind of inflows are you seeing now? Yes. So, it has been actually increasing because there have been new launches also, as you would have seen, and new refreshes which came after April also; Tiago.ev, for example, and Sierra.ev also got launched. So, if I compare with actually the pre -Mid-East crisis, which was Jan, Feb, whatever the average bookings that we used to get, that has gone nearly 3.5x of that. Of course, we are not able to supply even close to those numbers. But every month, you would be seeing we are ramping up our capacities, say 3- 4 months back, we were doing about 9,000 a month production, now we have, last month we crossed 15,000. And hopefully, in the coming months, this should further increase. So we are trying to overcome the gap that we have as of now between the demand that we are getting and the supply.

Thank you, Shailesh. Kapil, your last question, I think I've already answered. What was the price hike in Q2? We took a price hike of 0.5% each across April and July. And I think on the commodity pressure also I've mentioned, it was 4.5% in Q1. And we are expecting another 3% hardening in Q2. Richard, I'll hand it back to you now for a couple of questions. One from Timothy, Citi. Has the JLR FY 27 guidance been dropped or does it still stand? And with the focus on North America, do you intend to localize some production or do we assume lower margins on any incremental volumes that you sell through?

Okay. So on the first point, I think I mentioned during what I covered, the results in Q1 were not 100% where we wanted them. They're not inconsistent with our full-year guidance, and those results don't imply that we have a need to change that guidance. On North America, look, at our scale, it doesn't make sense for us localizing existing production of existing vehicles into North America. So, for example, we sell c.30,000 Defenders in the U.S. each year. But we can never localize into a local plant in the U.S. sufficiently at 30,000 units or even at 50,000 units. So our approach to North America, I think we announced earlier, is we've signed an MoU with Stellantis looking at producing vehicles which are specific to the U.S. market in North America. So that's our approach. We know we need to get some production, let me say the right side of the tariff barrier, but it makes no sense for us just duplicating production of our existing vehicles. So we are going with new vehicles, new segments, Defender brand, U.S. produced.

Thank you, Richard. I'll ask you to take the next question, too. With all the roadshows and marketing that we're doing towards Type 01 model, can you give us any indication of what's the kind of response we've got so far?

Big smiling faces. Everybody that sees the car and particularly everybody that has the opportunity to drive it or get driven in it comes out with an enormous smile. It is really quite impressive. Our engineers have done a stunning job turning what is an exceptional design into a sports car of exceptional quality. So yes, we're pretty happy with Type 01. Thank you, Richard. And the next question is also for you. I think everyone's seen the kind of hardening of commodities in India, almost 4.5% this quarter, but I think we've not talked about any raw material impact at JLR. If you could give some color around it.

Oh, phew. I'm glad that was the question because I thought, "why was JLR RM hit so low," referring to me, Richard Molyneux. So why was our hit so low? There's a couple of things. So, for us the biggest exposures are aluminum and let's say palladium, copper and a couple of the others. But actually in the quarter, aluminum prices came off, they were about $3,500 a ton at the end of March. They were about $3,150 a ton at the end of June. So although they remain high, during the quarter, some of our key commodities came down in price. We also have a hedging program on those, which mitigated some of any moves. Also, though to be fair, some of our contracts react on a quarterly basis. So, we would expect to see some of our prices, which are in Q2, reflecting the raw material prices in Q1. So, I would expect to see a little bit of an extra hit in Q2 from that effect. But that's fundamentally the logic there. Aluminum, which is our biggest exposure because most of our car is aluminum rather than steel, actually came down during the quarter.

Thank you, Richard. I'm going to ask you to take the next question, too, from Kapil. What is going to be the impact of rising EV mix on JLR margins? And if you could throw some color, whether they are going to be expected to be accretive or dilutive.

Where we're looking at it at the moment, we expect them to be, at least neutral. As I think, I've mentioned, we're not launching mass market EVs. We're launching Range Rovers with an EV powertrain. And those EV powertrains are absolutely perfect for the cars that they represent. A Range Rover is supposed to be quiet and powerful. That's exactly what the BEV is. So, we're not pricing these at a discount. We expect to price them to be at least margin neutral. And if you think of the EMA cars, these are the smaller cars of which Range Rover GT is one. They are replacing vehicles which are at the end of their life and relatively low in terms of margin. So, versus the cars that the Range Rover EV and the subsequent EMA cars would be compared to, I would expect, again, those to be at least neutral, if not accretive.

And just to add to that, Richard, Kapil, one of the key things for us since this brand-led and propulsion-next, the key thing to watch out for is how from a volume perspective, how much is it adding to the overall volume so that the level of cannibalization is minimal. And that's how we are seeing in the expressions of interest that is there in terms of overlap that we get. And for us, don't forget that we are from an operating leverage perspective, it is huge for this business. So, therefore, the more we are able to now prove that this is not cannibalized and we're able to step up volumes on the right product, then that f lows all the way to the bottom line. So, therefore, for me, EV is absolute as the key thing to watch out for is not so much variable margins, which Richard has already explained, but even more powerful would be the amount of cannibalization that we are getting. And, therefore, if that's going to be minimal, then we are absolutely up and away.

Okay. Sticking with you, Richard, the next question from Jyothi Singh from Haitong Securities. That's about , this is on China, and given that our current revenue from China is 13%, how do we see that share kind of evolve? Are we expecting it to go up or down?

I think the reality of China market at the moment where the economy is not growing at the pace that they are used to, and the retailers are suffering industry-wide from large overcapacity of domestic manufacturers, means that China is very unlikely to get any easier for us. It is most probably going to get a little bit worse before it stabilizes. We are in a decent place. We have been really disciplined in making sure that our retailer stock days are down to a level that do not encourage discounting, and we are focused on innovative ways of driving demand. But it would be incorrect of me to stand here and say that I think all the bad news from China is all done yet. I don't think it is.

And just to add to that, compared to what we said, we were expecting China to actually be leveling off from at a lower end during the Investor Day. I think the recent tax moves that have happened in terms of retrospective taxes has meant there's increased pressure on the customer segment that we are targeting, and that's something as a watch out that we need to be careful about. So, that's an additional headwind that's coming through as far as China is concerned.

Okay. Thank you, Balaji. Shailesh, I'm going to come back to you for the next couple of questions. Sierra is doing well with a two, three -month waiting period. How do are we kind of given that there's a festive period out, how are we thinking of production and supply so that we can deliver it.

Yeah. So, for Sierra, we were badly affected because of the casting of engines mainly for the petrol, but also true for the diesel engines. And there were also sheet metal items which came under stress, with all the shared capacity that we had for other products also, but also true that the industry demand went up from 350,000 to 450,000. So that created press capacity issues in many sheet metal suppliers also. So, I think we have been working on that for the past four, five months. We will see improvement from this month and next two months. And the major additional capacity enhancement work that we have been doing will kick in from October, hopefully. So, that should give the bigger boost I would say in October. But next two months, we'll see the improvement.

Thank you, Shailesh. I'll just ask you to stay for the next question too. We have been a market leader in EVs, and our market share, we spoke about how they've been rising to 40% and beyond. If you can throw some color as to how you see this market share evolving for us and what's the target we are looking at in the medium term?

Yeah. I think we have to see in light of, of course, one that the market is growing very fast. But at the same time, the good news is that there are multiple players with their new models also which are coming in and therefore, competition is also intensifying significantly. If you would have seen in the last one year, actually, we have increased our market share from 37% to actually last month it was 43%, and that has been possible because of two reasons. One that existing products have been significantly enhanced in terms of their value proposition which has multi-fold increased the demand for these vehicle. Example is Punch.ev. We today have, despite supplying about 4,000-4,500 a month, we are still with 8 to 10 months of waiting period. This month onwards, we are further enhancing the capacity. So that kind of action has helped increase the demand for our existing portfolio. On top of that, we are coming with additional products. As you would have seen, Sierra.ev was one product that got added. There will be one more additional product which will get added to the portfolio in this financial year and two big refreshes also. So, I think, this space we are therefore going very systematically, giving options to customers right from Rs. 7 lakh to Rs. 30 lakh. And this whole space, every model is punching above its weight. So, I think, we are very confident that we'll not be able to only protect our market share, but hopefully increase it despite a significantly intensifying competition. Thank you, Shailesh. The next question is from Raghu. If you could help me on question number one and then I'll take the rest. For India PV business, congrats on the strong sales performance. How do you see our exports planning out for FY 27 and FY28?

Yes. I think, these are early stages of our growth in export business. As you know, that last year, we opened the South Africa market and that has really helped us significantly grow our export. Last financial year, we grew by 4x on a low base of course, but this year, we are targeting more closer to 2x growth of what we did last year. So, that is the outlook for FY 27.

Thank you, Shailesh. On the next two questions, the first question is on proportion of revenues that we are receiving PLI and when do we expect our certifications for all the models? Right now, only two of our products are qualified for PLI, which is Nexon and Harrier.ev. All the other refreshes and the new launches including Tiago.ev, Punch.ev, Sierra.ev are under fresh certifications.

Curvv as well.

And Curvv. And we expect that we will be getting the PLI certifications as well as the TCA and start accruing the PLIs from Q3. And by Q4, almost our entire portfolio should be PLI accredited. The last question, how much is the commodity inflation impact? I've answered this. In Q1, it is 4.5% and in Q2, we are expecting another hardening of 3%

Okay. however, you would also like to give in terms of how you are going to offset that and to what extent to.

Yeah. we've kind of mentioned that in Q2, well, the hit is going to be 3%. We've spoke about some of the levers that we are kind of using to offset the commodity impact. The first one is price increase. We've taken already a 0.5% increase in July, which has not reflected in our Q1 financials. We will be taking further calibrated increases through the year. We are also having strong cost reduction programs that we are accelerating. We had a 2% benefit YoY. In Q1 itself, we had 1.5%. We'll get incrementally more this quarter. And third is, in Q1, we had the seasonal impact of IPL which was to the extent of 1%. We won't have that in Q2, so there's a benefit of 1%. Net-net, in Q2, despite the 3% commodity hit, we are expecting margins to be f lattish with respect to Q1. Thank you Shailesh. We've got one question from one of our analysts on email as he couldn't join the call. Shailesh, I'm going to have to read it out to you. India PV, could you provide some color on when we are going to launch Avinya? And where does it sit in your portfolio? Is it above or below Safari in terms of aspirational value for customers? I think, it just kind of democratizes the experience that you get in a luxury vehicle and therefore it is, I would say, significantly premium in for Safari as a comparison. So that was your second part of the question. In terms of when Avinya is going to get launched, I had been talking about 2026 end, but we had to, you would have seen the news articles and then our response to that we had to shift our platform strategy to Freelander platform of CJLR. And that is going to delay the project a bit, but in 2027, we should be able to launch the product.

Thank you, Shailesh. I think the second part of the question also, if you could take it, are we having any discussions with the government for extension of PLI beyond FY 28.

So far, we have not taken it with the government. But in future, we'll see to what extent we are able to consume our target or quota, and then we'll look at that.

Okay. And Richard, I'm going to have to read this question out to you too. I'll be slow so that you're able to catch it. The first question on JLR. What sort of EV mix do you need in Europe once the Euro 7 norms possibly kick in from 2027? And if you could take that one, please, and I'll move on to the next question after that

Yes. I mean, progressively, and we would expect our launch volumes of Range Rover Electric, Range Rover Sport Electric, and Range Rover GT, their sales mix will be primarily UK or primarily initially UK and Europe as that is where the leverage of BEVs are. So, we will have enough capacity in our production systems to be able to be legislatively compliant and will hope production and demand will get us there. But yes, our BEV rollout will undoubtedly not match our ICE mix. We will sell progressively more ICE in North America, progressively more BEV in the UK and in Europe.

Thank you, Richard. And I'm going to read out the second part of the question. If you could please share some color on the exploratory partnership discussions on potentially manufacturing our vehicles in the U.S.

Yes. We signed an MoU a couple of months ago. We are aiming to get that to a formal and definitive agreement by the end of the year. And yes, discussions are live and underway to be able to do that. So, as soon as I've got any more, I will let you know.

Thank you, Richard. The last two questions for the day before we close the call coming your way. The first question from Rishi, if you could throw some color on the kind of hedge book position we have on GBP, USD on our books and how do we look at profitability basis the current exchange rates that we are seeing?

Okay. I don't actually think I've ever said our hedge book is around 1.28. But to be entirely honest, you're not that far wrong. Look, we prefer a weak sterling environment as an exporter. We are the biggest exporter of goods in the entirety of the United Kingdom. So as an exporter, we prefer the scenario where cable is in the 1.20s than the 1.30s. That's the reason we have a hedge book, and we will use that to manage both risk and return. Obviously, our hedge book is marked-to-market largely, so the profitability of that hedge book is already on the balance sheet. And yes, we will manage our exposure and our hedges to ensure that we manage that. Also, of course, if you think through the scenario with Stellantis, and if that becomes real and goes into production, then we end up with much more of a natural hedge to what is at the moment an extremely large, long dollar position. So that's another small piece of our thinking behind the move to that MoU with Stellantis is to give us slightly more of a natural hedge on cable.

Yes. Just to add to that, to what Richard has said, all of it is right. Two additional angles there. One is we do put through cash f low hedges on the borrowings, which are in dollars, so that we are able to create a natural hedge on that, on the dollar side, number one. And Number two, if you recollect the thought in the Investor Day, we did talk about one point, in order for us to get our break-even down to the 300,000 units, we obviously have to think about taking out cost, including the fixed cost. A lot of it is pound denominated, and therefore, those are actions that are already underway. And we continue to keep -- we will keep a very tight leash on the cost structures as well, because that's finally the actions on getting a natural hedge and ensuring that we keep a very tight leash on pound costs are the ones that are going to deliver us on this. Hedges are more to ensure the volatility on this is ironed out rather than the structural profitability.

Thank you. And I think that there's one more question that has come in. So last two questions, Richard, for the day. One is if you could, I think the debt at JLR is now up to GBP 3.6 billion. So I guess the question is, what is the view that the credit rating agencies have on the credit rating, and what's the linkage to the overall cost of debt at JLR?

So, look, we're in constant contact with the rating agencies, obviously, and we'll take them through today's announcements. Up until now, the current situation where we're just on those borders of investment grade, but on negative watch, I think are likely to remain in place, but we'll stay in close contact with them.

Thank you, Richard. Last question for the day, Balaji, and this is coming your way. What is the volume we can expect from JLR EV in FY 27 and more so in FY 28? And what's the peak volumes we can assume from the four new models we're planning to launch?

So, let me not go all the way on that. Starting point is, of course, the launches that begin in September, when we start the Range Rover Electric. That's the first launch that starts in September. And, of course, as Richard rightly pointed out, we've got a slew of launches coming in, in the next six months and beyond. And therefore, as far as FY 27 is concerned, basis the production start that is planned, I think we are tentatively penciling about 12,000 cars this year on the EV space. And then we will keep you posted as how it goes along.

Thank you, Balaji. And that brings us to the end of the analyst call for this quarter. We wish you all a good evening, and we'll see you in the next analyst call in a couple of months from now. Thank you. Enjoy your evening. Note – this transcript has been edited for readability & any inadvertent errors.