Thank you, Darwin. Ladies and gentlemen, good afternoon once again.

Welcome you all to Q4 FY '26 earnings call. May I introduce you to the management team from Maruti Suzuki.

Today, we have with us our Chief Investor Relations Officer, Mr. Rahul Bharti, and CFO, Mr.

Arnab Roy. Before we begin, may I remind you of the safe harbor.

We may be making some forward-looking statements that have to be understood in conjunction with the uncertainty and the risks that company faces. I'd also like to inform you that the call is being recorded, and audio recording and the transcript will be available at our website.

Please note that in case of any inadvertent error during this live audio call, transcript will be provided with the corrected information. The con-call will begin with a brief statement on the performance and outlook of our business by CIRO and Senior Executive Officer, Corporate Affairs, Mr.

Rahul Bharti, after which we'll be happy to receive your questions. I would now like to invite our Chief Investor Relations Officer, Mr.

Rahul Bharti. Over to you, sir.

Thanks, Pranav. Good afternoon, ladies and gentlemen, and thank you for joining us.

Before I come to the company's financial performance, I would like to briefly share our perspective on the passenger vehicle industry during the financial year '25-'26, and Maruti Suzuki's operating performance in this environment. You would be aware financial year '25-'26 was a year of two distinct halves for the Indian PV industry.

In the first half of the fiscal, the passenger vehicle market declined by about 0.4% year-on-year, reflecting affordability pressures, particularly in the small car segment. However, in the second half of the year, led by the government's GST reform, the industry witnessed a sharp turnaround, with the passenger vehicle market growing by a whopping 16.7% year-on-year.

This rebound was clearly led by the small car segment, vehicles in the 18% GST bracket, where reduction in acquisition cost helped revive demand. For Maruti Suzuki, the rebound in the domestic market was even stronger than the industry.

While our domestic sales declined by 5.6% in the first half of the year, the sales volume grew by 12.3% in the second half of the year, generating a swing of about 17.9%. Our domestic sales volume growth during the year was constrained by production capacity.

As of the end of the fiscal year, around 190,000 customer orders remained unserved, and we are trying to service them fast, highlighting the strength of the underlying demand. Importantly, near 130,000 of these pending orders were in the small car segment falling in the 18% GST bracket.

In addition, the dealer inventory was at a low of about 12 days stock. Notably, even in a market largely driven by SUVs, the top-selling passenger vehicle in financial year '25-'26 was the Dzire, which is a sedan placed within the 18% GST bracket.

During the second half, we observed higher showroom traction from two-wheeler upgraders, as well as an increase in first-time buyers. While rural markets continue to perform well during the entire year, the urban markets also recovered and posted a growth post the GST reform.

Alongside the recovery in small cars, Maruti Suzuki also strengthened its performance in the mid-SUV segment during the year. Towards this, the launch of the Victoris played an important role.

The Victoris has seen strong customer acceptance, and is the fastest model in our portfolio to cross 50,000 cumulative sales. It is no wonder that the Victoris got the Indian Car of the Year award, where 19 prominent auto publications form a jury and jointly vote for the best car in the country.

While GST reforms supported the revival of entry-level demand, the Victoris contributed meaningfully to our volume growth in the mid-SUV segment, enabling us to participate more competitively in one of the fastest-growing segments of industry. In addition, during the year, we also launched our first battery electric vehicle, the eVitara.

The eVitara represents Maruti Suzuki's first full electric SUV, developed on a fresh dedicated platform and designed for Indian and about a 100 global markets. Happy to share that the initial response has been quite encouraging, and the model strengthens our preparedness for the gradual transition towards electric mobility, while we continue to follow a balanced multipowertrain technology pathway for reducing fleet carbon emissions.

Alongside the domestic market, exports remained an important growth driver during the year. Exports volume grew strongly in the financial year, reinforcing Maruti Suzuki's position as the leading exporter of passenger vehicles, supported by a diversified presence across global markets.

Investors will be very happy to note that your company, just one company among 18 car manufacturers in India, alone contributed 49% share of India's total passenger vehicle exports in the financial year. At the same time, in financial year '25-'26, the operating environment for the industry remained complex.

You are aware during the year geopolitical developments, such as supply issues in rare earth metals, the conflict involving the West Asia region, posed risks to supply chains, particularly energy, certain raw materials, and logistics. These developments increase uncertainty for the industry and require greater focus on business continuity.

The company has been working very closely with its supply chain and logistics partners to ensure continuity of operations and mitigate potential disruptions. We have strengthened coordination across critical suppliers and enhanced contingency planning.

However, the situation does remain dynamic, and cost pressures do persist. We continue to closely monitor developments and respond as required.

Despite the uncertainties posed by the ongoing geopolitical tensions, the company maintains strong confidence in the resilience of India's economy. While acknowledging that war-related challenges may impact the business environment in the short term, the company believes these disruptions are temporary and will likely subside as circumstances improve.

Importantly, the recent GST reduction is seen as a transformative factor for the passenger vehicle sector in India. By lowering taxes, the reform has enhanced affordability, making passenger vehicles accessible to a broader segment of customers.

This, in turn, has set the industry on a path of sustained long-term structural growth by enlarging the potential customer base. Consequently, the company is proactively accelerating its capacity expansion efforts to address the strong demand and fulfill pending orders.

In April '26, the second plant at the Kharkhoda facility was commissioned, and the fourth production line at the Hansalpur facility in Gujarat is set to become operational within this financial year. Each of these new units will add an annual production capacity of 250,000 vehicles.

To put this in perspective, increasing production capacity by about 0.5 million units in a single year is virtually unheard of in the passenger vehicle industry, at least in India and many countries abroad. This bold move is a clear testament to our unwavering confidence and optimism in the immense growth potential that lies ahead.

Besides, the company has put plans in place to increase the production capacity to 4 million units per annum in the medium term. Before we move to the financial results, I would like to share the major business highlights for the company.

In this financial year, the company achieved several significant milestones. First, the company recorded its highest ever annual sales of 2.42 million vehicles, which includes the highest ever export of 447,000 vehicles.

Maruti Suzuki has set a new benchmark in the industry by achieving cumulative sales of 3 crore, or 30 million units, in the domestic market. Coming to products, demonstrating its commitment to customer safety, the company is now offering six airbags as standard in almost all of its passenger vehicle product line up, volumes going beyond 99%, and advanced safety features like electronic stability control, anti-lock braking system with electronic brakeforce distribution as a standard across the entire product lineup.

On the same lines, the all-new Dzire, the Victoris, the eVitara, and the Invicto secured five-star Bharat NCAP safety rating, while the Baleno secured a four-star rating. Further strengthening the company's robust network of 2,000 exclusive charging points across our sales and service network, spanning across 1,100 cities, we have collaborated with 13 charge point operators to offer access to a vast charging infrastructure across the country.

Aligned with Suzuki's global vision, we plan to introduce multiple EVs, and to support this, our aim is to enable a network of over 1 lakh charging points across India by 2030, along with our dealers and charge point operators. For promoting inclusive mobility in mass-segment cars, the company launched the WagonR with an option of a swivel seat.

Seemingly a small feature, but extremely customer-friendly, swivel seat is specially designed to offer greater convenience to senior citizens and persons with disabilities, bringing the joy of mobility to them. Drawing inspiration from Suzuki Group's corporate slogan, "By your side", this initiative aligns with the United Nations Sustainable Development Goal that aims to reduce inequality.

The company continued to expand its sales and service footprint. During the year, the total sales outlets increased to over 4,600, and service touchpoints increased to over 5,900 across the country.

The company has also set a new benchmark in green logistics by dispatching over 600,000 vehicles through railways in the financial year, which is a growth of about 18.5% over the previous year. Interestingly, in the past decade, Maruti Suzuki's share of rail mode in outbound logistics has grown exponentially, going from 5.1% in 2016 to 26.5% in financial year '25-'26, significantly reducing carbon emissions, the country's oil imports, and easing road congestion.

Now, I come to the financial results. The company recorded its highest ever quarterly sales of 676,209 units, up 11.8% from Q4 of the previous financial year.

This is for the quarter. Domestic sales were at 538,994 units, and exports at an all-time high of 137,215 units.

During this period, the company achieved record net sales of about Rs 501 billion, compared to about Rs 389 billion in the same period a year ago. Operating profit, EBIT for Q4 of this year, increased by 30.4% over Q4 of the previous financial year, reaching an all-time high of over Rs 44 billion.

Despite the growth in operating profit, net profit declined by 6.9% year-on-year to nearly Rs 36 billion, primarily due to mark-to-market impact, which my colleague Arnab will explain in his part. Before coming to explanation of results, I want to reiterate that Suzuki Motor Gujarat Private Limited, which was our wholly owned subsidiary in Gujarat, it got amalgamated with Maruti Suzuki starting December 1, 2025.

The appointed date as per the scheme of amalgamation is 1st April, 2025, and so, the financial statements for the relevant periods have been restated for the purpose of comparison. Now, I'll explain the broad reasons for the financial performance.

Investors look out for a sequential comparison. I'll give you the analysis on a sequential basis.

The overall sales volume grew by 1.3%, and the net sales grew by 5.4%. Sequentially, the operating profit margin, EBIT, has expanded to 8.8% of net sales, compared to 8.1% in Q3 of the financial year.

There were several favorable factors: lower employee cost of about 100 bps—if you would recall, in Q3, we had a one-time provision on account of new labor codes, comparing with that, Q4 was lower by 100 bps; the discounts were lower by about 50 basis points; favorable foreign exchange movement by 20 basis points; favorable fixed cost incidence of about 50 basis points due to inventory accretion. These were the positive factors.

They were partially offset by some adverse factors: the adverse commodity prices of about 80 basis points, higher new model expenses of about 60 basis points. The other expenses were higher by 20 basis points, largely on account of some lumpiness and seasonality associated with other expenses in CSR, R&D, etc.

Furthermore, at the net profit level, the hardening of bond yields resulted in mark-to-market impact of approximately 7.5 billion rupees on our invested surplus. I now come to the highlights of the full year '25-'26.

The company recorded highest ever annual sales volume, net sales, and net profit. The company sold a total of 2,422,713 units in financial year '25-'26, compared to 2,234,266 units in the previous year.

The company registered record net sales of over Rs 1.74 trillion in financial year '25-'26, a growth of 20.2% over the previous year. The company achieved its all-time high net profit of over Rs 144.4 billion in financial year '25-'26, compared to net profit of about Rs 142.9 billion in the previous year.

Along with profits come dividends. The Board of Directors recommended its highest ever dividend of Rs 140 per share of a face value of Rs 5 per share, compared to Rs 135 per share in the previous year, '24-'25.

With that, ladies and gentlemen, we are now ready to take your questions, your feedback, and any other observations that you may have. Thank you.

Hi. Thanks for taking my question.

My first question is on the cost headwinds, and thanks for giving that margin bridge. Can you just give us more color on how do we think about incremental cost headwinds?

You mentioned it was 80 basis point in Q4, but looking at where the commodities are and the steel, the pricing that is due, how should we think about the cost headwinds going into the next one or two quarters, and maybe what are the mitigating factors that we are sort of working through to make sure that the margins sort of remain in a range, or maybe you just give us some guidance on how do we think about margins?

Thanks, Gunjan. Though you asked only about margin, but I will speak about both demand scenario and margins because just now we had a press conference along with our Chairman.

One thing that he mentioned was that fortunately the impact does not seem to be much. The demand sentiment seems to be good.

Margins, of course, some prices like commodity, energy, gas prices, do go up in such times, which is possible to understand, but we've been seeing commodity changes in the past also. We also believe that once the West Asia crisis is over, many of these cost pressures would lapse.

Yes, there is some pressure, but we are taking it as part of regular business.

Okay. Just any sense on do we see a similar sort of cost headwinds going into Q1 as well?

80 basis point was what we took in Q4, I'm just trying to understand while these are temporary and would get normalized, any sense that you can give, and is there a mitigating action like if discounts are coming down, any pricing move that can help you offset the commodity impact?

A lot of mitigation actions are in progress. In fact, the management spends a lot of time on this.

The first thing is we have to ensure that there is no disruption in our production operations. Whether it is gas supplies or alternate fuels, etc., and arranging them from the lowest possible source, diversifying our portfolio, that is one part.

Second, fortunately the demand scenario is good, we have a focus that our utilization should also continue to be high. We are fortunate today we have pending orders, but we want that situation also to continue, and volume buoyancy should be good.

That helps a lot. Of course, we are trying to arrange all the commodities at the lowest possible cost, diversify a supply chain, all those mitigating factors continue.

It will be difficult to put a number,

but, yes,

in such a situation, some cost headwinds do come, and it's part of business.

Okay. Got it.

My second question is more on the emission regulations now. I'm assuming the CAFE norms what we've seen are near final version.

Some sense on how are we thinking about the CAFE norms? What does it mean in terms of the powertrain mix?

Particularly interested in sort of understanding what is the EV savings that we need in this block of 3 years or 2 years, the way CAFE norms define it. Then recently there's also a lot of noise around this flex fuels E85.

If you can talk us through the readiness on this and what sort of portfolio cost impact we see because of flex fuel. A bit more on these emission regulations.

Okay. It's Corporate Average Fuel Efficiency, it's an energy efficiency regulation.

The final draft is yet to be notified, it's not right to make a premature commitment, but whatever we have seen till now seems to have a good balance across multiple powertrain technologies to reduce carbon. They have encouraged all technologies, which is a positive, and it's showing in the current war where biofuels, like CBG or compressed biogas or ethanol, is coming to the rescue when crude oil imports come under pressure.

I should also tell you that Maruti Suzuki models are inherently far more efficient than any in its peer group. If you compare any like-to-like model, we would be about 20% more efficient.

That way the company is always positioned from a technology perspective positively for energy efficiency. Your next question was on flex fuel.

We have the technology, whether it is for ethanol blending increase or for flex fuel vehicles, we have the technology, and we'll support the government whenever the need arises.

What can be the cost increase because of flex fuel in terms of upgrading the engine or component change? Any prelim idea around that?

Let me tell you there are two distinct movements happening in ethanol. One is all cars on the road, which is something like we are talking about sales of about 5 million cars a year, or all the park, which is about 3 crore cars in the population.

The government is thinking of increasing the minimum blending from something like E20 to E21, E22, something like that, or maybe till all the way up to E25. That is one clear action.

The other clear action is launching models that can take any blend of ethanol and gasoline from 0 to 100. It won't be a meaningful volume by number because such models, we need dispensing pumps in the country that will span the entire network.

We need more models. We need parity between ethanol and petrol price.

All those factors will take some time for flex fuels to develop. It is like a futuristic plan.

The volumes will be minimal at this stage. It will grow.

Say, 5 to 10 years from now, it will become a meaningful volume, nothing immediately. It does not affect our cost structure.

Okay. Got it.

I'll join back the queue. Thank you so much.

Hi, good evening, and thank you for taking my questions. My first question is just around the growth outlook for the domestic passenger vehicle industry and also what you think could be the growth outlook on exports just given how the macro seems to be evolving.

I think at the SIAM looking ahead conclave 3 months back, the industry had thought that passenger vehicles should be able to grow between 5% to 7% in FY '27, but the macro seems to have changed. You did mention that the demand remains to be pretty good.

There's not been much impact. I just wanted to understand how you're thinking about industry growth, both domestic and export, for FY '27.

Our Chairman just mentioned, first of all, this time we would be thinking of utilizing our new plants. Obviously, the two new plants that come up with a steady state capacity of 500,000 units total, they will need a ramp-up.

Effectively, one can expect that we'll have an additional volume of about 250,000 cars available this year over the previous year. The broad expectation that our Chairman also conveyed is about 10% growth in this year as compared to the last year.

Of course, the situation is dynamic, but this is the initial expectation. This is above the estimates of industry that you mentioned about.

All right. Just to clarify, the 10% growth you think is industry volume expectation?

Domestic.

Domestic industry volume growth expectation for FY '27?

Mhm.

Got it. That's helpful.

Just related to that, my second question is on the upcoming capacity. I think you did mention that there'll be 250,000 units which will come on board sometime in FY '27 in

Could you speak louder, please? I'm missing.

Sure. Is it better now?

Slightly better.

Yes, second question is just around capacity. You mentioned that there will be 250,000 units of additional capacity coming on board in Gujarat later this fiscal and you've already

One in Kharkhoda, Haryana; the other in Gujarat.

Yes. Just related to that, last year when you had put the first greenfield in Kharkhoda, there was I think cumulative 60 basis points of startup costs because you had to build up utilization over a period of time.

At this stage, it looks like you do have good visibility around demand. I just want to understand if there will be any startup costs to be expected in these brownfield capacity additions that you're doing in Kharkhoda and in Gujarat.

Look, there will be some ramp-up definitely for the Kharkhoda phase 2 plant, but we do not expect anything significant because, as Rahul explained, the demand outlook looks good and economies of scale should be able to broadly take care of the start-up costs, we don't expect anything significant. If anything, the demand outlook stays positive.

Of course, we will have to keep monitoring the macro environment and the other variable factors which are here.

Got it. That's helpful.

Last question just bookkeeping questions around the other income outlook. It looks like you had a 750 crore mark-to-market notional impact on other income this quarter.

If bond yields were to remain constant, do you think this completely reverses next quarter? Also just the other bookkeeping questions are around export revenue and the retail number, Maruti's retail number for the quarter.

Yeah. First, let me answer your mark-to-market question.

I think others will also have this question. Overall if you see, because of the hardening of the interest rates, and when we talk about hardening of interest rates in our portfolio, there are several kind of benchmark rates which has a weighted average impact, whether it is the one-year G-sec or the one-year corporate bond or the commercial paper, but on a blended basis if one looks at it, we had almost a 46 basis point impact this quarter.

This 46 basis point translates to about 750 crore hit in the quarter. Now, if you compare it to a sequential, sequential we were nearly flat, the entire thing is reflected sequentially.

If you compare on a YoY basis, YoY we were positive by about 350, on a YoY comparison this is a 1,075 crore hit, which is quite significant. That's the reason you see the other income quite significantly down when you are comparing the PBT of this year versus last year on a full year basis.

This is something which you have to keep in mind. As we see as of yesterday, yes, some amount of reversal has already happened.

Roughly about 35% of this is already reversed on yesterday's basis, and this is a everyday moving number, we will have to keep monitoring it. That's on the mark-to-market roughly.

In terms of our overall credit quality, just to give you a thing, I think our credit quality remains very robust and I think we are at a more than 99.5% AAA-rated plus security, so that remains quite robust. The long term it is completely secure.

Short term, of course, we are exposed to the interest rate changes because of that macroeconomic environment. Your second question was on exports, right?

Exports revenues about $1.24 billion for the quarter. Yes.

Got it. Just the retail numbers, Maruti's retail volume number for the quarter.

I think last year fourth quarter we did 430,000 units. Just checking this year what the retail number is for 4Q.

Last year, what is the figure you have?

430,000 units for 4Q MSIL domestic retail.

We have 415,000. That was for last year fourth quarter.

This year fourth quarter was 468,000 about 700 units, approximately.

Got it. Thank you very much, and all the best.

There is a 12.9% year-on-year growth in the quarter in retail sales.

Makes sense. Thank you very much, and all the best.

Good evening, team. Thank you for the opportunity.

Sir, firstly, if you can indicate growth or the share for rural, urban in FY '26, and also if you can talk about trends for first-time, replacement, additional buyers for full year FY '26.

See, we've stopped kind of making so hard a line between urban and rural because the boundaries are blurring now, and it's a very heartening thing that the rural India is integrating with the urban India. There are increasingly consumption trends which were earlier associated with urban India that are now being seen in rural India.

We don't monitor that figure anymore, but, of course, we keep the distribution network as extensive as possible.

Noted, sir. How are you seeing the trend in the first-time buyers?

Has the share increased?

Happy to share that the first-time buyer is about 51% in Q4. 18% is about repeat purchase, and 31% is additional car in the family.

How has the share increased, sir? How should we look at it?

How has the share of first-time increased in comparison to pre-GST cut?

Pre-GST cut. In H1, the Q4 figure of 51 was actually around 42%.

Noted, sir. H1 was about

H1 was about 42%, Q3 was at 48%, and Q4 at 51%,

which

is a very clear Sorry to interrupt. Which is a very clear signal that the government intended support to the first-time buyers is showing results.

Got it, sir. Thanks for sharing this.

This also aligns with that 130,000 small car orders which you mentioned is pending. Just a bookkeeping question for Q4, can you share the blended discounts number for Q4?

What we can share with you is that there was almost about a 0.5% reduction on account of discounts in the quarter sequentially.

Got it, sir. Thank you very much.

EBIT expansion because of this.

Hi, good evening, and thank you for taking my question. My first question was for fiscal '27, the model launch plan that we have.

I understand that not being specifically about the models, but if you can give some sense on how many new nameplate addition and model refreshes you are targeting across ICE and separately for EV?

We have a good lineup, a healthy lineup, and we'll keep our customers enthralled. We need to improve our market share, but we'll keep the excitement also on.

Across categories, we will have new models. We have spoken about seven more SUVs all the way through the end of the decade.

Let the excitement continue.

Sure. Can we imply that going by that run rate, we should be having one new model nameplate addition every year?

Is that a fair expectation? See, a

one model development is about 4 years lead time. It's not necessary that we space it out equally all the time.

There may be lumpiness around it, but there are seven SUVs and other models all the way till the decade end.

Got it. On the EV side, eVitara now is launched in the domestic market as well.

I understand earlier you had indicated your aspiration to become the largest EV manufacturer in the country, which would include export as well. How is the product going into domestic market, and what's your aspiration for the domestic market in the EV space?

Thanks for that question. In fact, in my opening message, I mentioned that we are happy that wherever we have sold that car, the customers are very happy.

This is both in India and in our export markets, so that bodes well. Currently, of course, we are constrained by production capacity.

Starting July, when our fourth plant in Gujarat comes up and there's a gradual ramp-up, we'll keep increasing our supplies. We're also targeting that the customers to whom we gave these cars, and we fit home chargers, etc., they should be totally satisfied and delighted customers.

Till the time we have lower numbers, at least we should focus on customer delight 100%.

Got it. Thanks.

Just one final question on the margin side. I understand spoke about that there are a lot of moving parts to the margin and things are dynamic.

Once we are past through these Middle East conflict and part of it getting reversed and we potentially taking some price increases as well, in a quarter or two we should get back on a trajectory of margin expansion and potentially in the direction of 10% EBIT margin, which we have targeted to reach to by 2030. Is that a fair expectation?

It's always difficult to give out a guidance on margins, but what I can tell you is the quarter four EBIT was to estimate. The Bloomberg consensus estimate was 8.8%, and that was where the figure was, the actual figure also.

As you rightly said, there are many moving parts. I would also add to that that a market leader has the privilege of having multiple moving parts, multiple levers to help margins.

We are very confident and optimistic that, subject to these headwinds of the war, the commodities, and the energy prices, after that is over, we'll come back to a healthy trajectory.

Thanks a lot.

Thank you, sir, for taking my question. First would be on a QoQ basis, ASPs have increased a fair bit.

How sustainable it is, and what were the drivers for this ASP increase, quarter-on-quarter basis?

Sorry, I was on mute. We do believe that there is still headroom for ASP because the upper segment models there is some headroom, there is some upward room in ASPs.

From the portfolio mix as well?

Yes. For example, EVs have to increase in the future, so that will help ASPs.

Sure. Thanks.

On the balance sheet, just two points. What is the capex plan for these two expansions for FY '27?

Also, just saw that the inventory was fairly high at this year-end. Any specific reason for that?

Overall on the capex for FY '26-'27, we are looking at a 14,000 crore capex for the full year. I think so it will be primarily driven by these two plants.

On the inventory, no, I don't think we have a significant increase. If you look at the total network stock versus this, I think we are at a fairly good level.

We are much lower than the industry in terms of our overall network stock. Sir,

I meant the inventory on the balance sheet.

There will be always small timing issues, but let me just quickly see that. What's the specific question?

We'll come back on this while he has a look on the inventory. We can have the next question.

Sure. Thanks so much.

Thanks team for the opportunity, and congrats for reasonable set of numbers despite the input cost pressures and other challenges. Sir, my first question, wanted to just to reconfirm that you said the domestic PV industry to grow by 10%.

Are we right in understanding this?

No. We are speaking about Maruti.

We are talking about Maruti Suzuki expectation.

Understood. This is clear.

Sir, secondly on the export situation. What are our plans to deal with the present export situation?

If you can help me predict the war, I can predict the exports numbers. We are at a healthy position.

We have built a good franchise across countries. We are on a steep ramp-up path, and we want to have at least the current numbers, but then there is so much of uncertainty that it's not responsible to give out a figure.

Understood. This is helpful.

Thank you, sir. All the best.

Yeah.

Sorry, there was one question which needs to be

Let me come back on the earlier inventory question before we close. I think, see, it's a combination of predominantly various raw material and working progress, not too much on the FG side of it, because that the production in the coming period has a quite steep outlook.

There were a bunch of GITs in that, bunch of kind of a stock which is needed for the production for the coming periods. Because, as we are amping up the capacity in the coming two quarters, a lot of preparatory work had to be done.

Which is predominantly the composition of the inventory.