Thank you. Good afternoon.

Thank you for joining us today. I welcome you all for the ZF Commercial Vehicle Control Systems India Limited's earnings call to brief on their Q3 FY 2025-'26 quarterly earnings, which will be presented by the management team.

Your hosts today from ZF Commercial Vehicle Control Systems India Limited are Mr. Paramjit Singh Saada, Managing Director; Ms.

Shweta Agarwal, CFO; Mr. Shankar Venkatachalam, Head of OE Sales; and Ms.

Muthulakshmi, Company Secretary. I will now hand over the call to Mr.

Paramjit Singh Saada, who will provide further insights into the results. Over to you, sir.

Thank you. Good all of you.

I warmly welcome you all to ZF Commercial Vehicle Control Systems Limited third quarter results for the financial year 2025-'26. Certain forward-looking statements that we will make today are based on management's good faith and expectations concerning future development.

The actual results may differ materially from these expectations because of multiple factors. ZF Commercial Vehicle Control Systems India Limited results for the quarter ending December 31, 2025, were published on February 10, 2026.

They are available on the website www.zf.com under the ZF CV India Investor Relations section. We hope that you have had an opportunity to go through them.

A transcript and recorded audio of this call will also be made available on the website www.zf.com under the ZF CV India Investor Relations section. I am happy to talk to you today as we give you an update about business of the company.

We will start with the industry and economic updates. The global economy continues to demonstrate greater resilience than previously anticipated, supported by easing uncertainties and broadly stable financial conditions.

While trade flows are gradually normalizing and some market volatility persists, overall macroeconomic fundamentals remain steady. India's growth trajectory remains robust.

GDP expanded by 8.2% in Q2 2025-'26, with GVA rising 8.1%. This strong performance has been underpinned by solid domestic demand, healthy momentum in both industrial and services sectors, ongoing tax rationalization, and front-loaded public capital expenditures.

High-frequency indicators signal continued strength this past quarter, reflecting resilient rural demand, improving urban consumption, firm investment activity, and an uptick in manufacturing output. Looking ahead, positive agriculture prospects, benign inflation trends, strengthened corporate balance sheets, and supportive monetary conditions are expected to sustain the growth momentum.

GDP growth for 2025-'26 is projected at 7.4%. Inflation has moderated sharply to multi-year lows, driven by broad-based decline in both food and core components.

For 2025-'26, inflation is projected at 2%, supported by favorable supply conditions and moderating global commodity prices. Overall, the outlook for both growth and inflation trends remains balanced, with risks contained and domestic fundamentals continuing to prove a strong foundation for sustained economic performance.

This, some data is taken from Reserve Bank of India press release rbi.org.in. Let us talk about Indian commercial vehicle industry, basically more than 6-ton commercial vehicles.

The overall CV industry has gained momentum in Q3, supported by strong economic activity driven by GST reforms. Also, RBI repo rate cuts, rising demand, improved goods movement recorded 6.1% growth billion ton-kilometer in the calendar year of 2025 over the last year.

With the CV more than 6-ton segment growing at an even stronger rate of 11%. On a quarterly basis, the CV more than 6-ton segment registered 20.6% growth in Q3, and model mix largely remained same as last year, with a marginal change in the bus production.

Looking at the truck segment, in the truck segment, growth is supported by several favorable factors and is expected to continue in the upcoming quarter as well. With GST reforms effective September, increase in consumption demand directly boosting goods movement and, in turn, CV growth.

Supported by tailwinds like repo rate cuts, this momentum is set to sustain industry growth. Second aspect is increased government capital expenditures supported by strong infrastructure and construction activity along with the recent Union Budget outlay ₹12.2 lakh crore that places strong emphasis on infrastructure expansion and freight corridor development.

This will indirectly boost demand for truck production. The resumption of mining activity post-monsoon along with government focus on developing rare earth corridors, which further promote mining, is expected to accelerate mining operation and stimulate demand growth in this segment.

Looking at bus segment, in line with the overall CV industry growth, the bus market also experienced robust expansion driven by strong demand from state transport units, STUs, the intercity segment, and urban transport needs. EV bus sales reached 1,219 units in Q3 2025-'26, supported by finalization of PM-eBus tenders and fresh government procurement orders.

Looking at trailer segment, while the medium and heavy-duty trucks shown a strong growth, migration towards multi-axle vehicles, fleet underutilization amid export declines, the expansion of mega LPG pipelines, which collectively triggered a short-term production dip. However, with the government's focus on infrastructure, this sector is expected to rebound.

Looking at impact of this industry growth on OE sales for our company, during Q3 FY '25-'26, CV more than 6-ton production recorded a growth of 20.6%, while our overall sale rose by 28.1%. This strong performance enabled us to outperform the market by 7.5%, primarily supported by following factors: high EV bus production and increased market share among independent bus manufacturer for e-compressor and EBS systems; a sharp rise in ESC penetration driven by updated regulations effective September 2025; SOP of a new variant of exhaust brake valve in Q3 FY '26; profitability improvement actions, including price resetting of low-margin products.

Looking ahead, the outlook for commercial vehicle industry remains positive, with several indicators pointing to a sustained rebound. Improving market sentiment, coupled with strong budgetary emphasis on infrastructure development, freight corridors, and new initiatives such as strategic mineral corridors, is expected to directly stimulate demand for heavy-duty trucks.

Additionally, the growing focus on EV ecosystem and public mobility is accelerating demand for electric buses. In anticipation of this upswing and in alignment with the adoption of new technology trends, we are advancing strategic initiative aimed at strengthening our competitiveness and delivering long-term value.

Some of the key strategic initiatives are as follows: Increasing penetration of ESC is driving our focus on localization efforts to enhance and sustain market share across all customer segments. With government's ongoing discussions on mandating low-floor buses for city applications, a significant increase in ECAS penetration is expected.

In response to this emerging demand, we have initiated efforts to localize ECAS to strengthen and sustain our market position. We aim to increase penetration of trailer ABS, trailer EBS, and SCALAR EVO Plus systems in line with AIS-113 trailer regulations and growing demand for safety and operational efficiency in the trailer fleets.

Close collaboration with OEMs is enabling the expansion of AMT applications, effectively leveraging the segmental migration toward higher capacity engine that is driving increased AMT adoption. These developments reinforce our long-term growth trajectory and underscore our strategic alignments with the future of commercial mobility.

Looking at aftermarket, in Q3 FY '25-'26, our aftermarket sales reached ₹158 crore, reflecting a strong 19.2% growth over the ₹132 crore recorded in the same quarter in last financial year. This performance was driven by broad-based momentum across key segments.

A significant contributor to this growth was continued acceleration in retro fitment demand, particularly from PSU oil and gas customers, generating ₹4.1 crore through trailer ABS, EBS retro fitment programs. Our traditional product portfolio, including air compressor, air processing units, actuators, AMT modulators, and brake control system also saw increased penetration across markets, supported by strengthening demand patterns.

We also witnessed greater uplift from OES-driven requirement, primarily due to replacement demand arising from BS-VI vehicles park expansion. Our mining segment maintains its positive trajectory, with higher equipment deployment driving strong sales of compressors and actuators.

Additionally, the expansion of our service footprint through seven new authorized service centers enhanced network accessibility and customer support. This strengthened infrastructure contributed meaningfully to overall aftermarket growth by improving reach, responsiveness, and service reliability.

Let us discuss about export of goods. In Q3 financial year 2025-'26, our export performance declined by 10.9% compared to the same period last year, primarily due to volume reduction from the US market.

Tariff-related cost pass-throughs by OEMs to the end customer continued to adversely impact demand. While the US market saw a drop, this was partially offset by improvement in the EU market.

Overall, the combined market decline stood at 12.2%. Despite this, we outperformed the market by intensifying our focus on portfolio expansion across regions.

While these factors created short-term headwinds, the recent FTA agreement with the EU and indications of potential tariff reduction in US are expected to support demand recovery in the upcoming quarters. We remain fully committed to ramping up our capabilities to meet this anticipated growth.

Along with this, the company has proactively advanced several strategic initiative aimed at reinforcing future growth and recalibrating priorities. Notable achievements include the successful start of production for actuator 4.0 and air compressor for additional global OEMs, strengthening our global customer footprint.

Concurrently, we continue to broaden and diversify our product portfolio to position ourselves for recovery and long-term expansion. We also speak about export of services.

Export of services grew by a robust 11.1% in Q3 FY 2025-'26 compared to the corresponding quarter last year. This growth was driven by a sustained increase in engineering activities delivered from India to global centers.

The continued expansion of these capabilities reinforces India's position as a strategic engineering hub for ZF globally, underscoring the strength, scalability, and technical depth of our talent base. We talk about now on ESG initiatives.

Sustainability continues to remain a core strategic priority for the company, and our focused effort are yielding meaningful recognition and impact across our operations. Our Jamshedpur facility received first prize in the ACMA Regional Kaizen Competition under the safety ergonomic improvement category, underscoring our commitment to building safer and more efficient workplaces.

We also continued to advance energy conservation with several key initiatives delivering measurable benefits. A 200 CFM compressor energy saving project, supported by a leak arresting campaign, is estimated to generate annual energy savings of approximately 50,000 units.

The introduction of e-fans in AHUs has resulted in an additional reduction of around 20,000 units per annum. Our ESG leadership was further highlighted when we were invited to share our best practices at IIT Madras during the Accelerating Net Zero AI and Energy Efficiency Conference.

The event saw participation from more than 200 companies, and our initiatives received strong appreciation from peers and industry stakeholders. These achievements reflect our continued commitment to sustainability, operational excellence, and responsible growth, reinforcing our alignment with global environmental and safety standards.

Some updates about engineering. On engineering front, the company had successfully enabled start of production of e-compressor Air Light for truck platform, diameter 60 and 90 exhaust brake assembly product for major OEM, 9-inch vacuum booster was launched for aftermarket, advanced driver assist system ADAS test dummy was developed through institutional collaboration, won prestigious new product development excellence award from major OEM for significant contribution of ZF towards launch of advanced electronic braking system, electronic stability control, automated manual transmission, compressor, air processing unit, and axle products.

Advanced technology products demonstrated at technology day events organized by leading OEM across India were also done. On manufacturing updates, the company continues to ramp up production of advanced technology products from its new multi-divisional manufacturing plant at Oragadam.

New products including e-compressor and hydraulic ESCs, electronic stability control for e-mobility, ASP air system protector cartridges for Indian OEMs, and wheel-end products such as actuators, brake chambers, and automatic slack adjusters for both domestic and export markets. New products such as EBA, exhaust brake assembly, e-compressor light, brake signal transmitter for Indian truck with trailer OEMs, and expansion of current portfolio to aftermarket have been successfully launched.

Assembly lines have been upgraded in Jamshedpur, Lucknow, and Pantnagar plant for manufacturing footprint capability, resulting in improved delivery performance, flexibility, and customer responsiveness as well as supporting our sustainability objectives through reduction of transportation emissions. The company continues to realize significant gains in productivity and quality through implementation of smart automation, robotic technology, testing automation, and leveraging digitalization in assembly and machining cells.

Let us talk about awards and recognitions. I am pleased to share that in Q3 FY 2025-'26, our ZF teams earned significant recognition across leading industry forums, securing four national level awards, four regional awards, and nine state level awards.

Our teams achieved top honors in prestigious competitions such as IMTMA productivity championship, NIQR Six Sigma, and ACMA Kaizen Awards, along with accolades from CII, QCFI, and ABK-AOTS. These achievements underscore our unwavering commitment to operational excellence, innovation, and continuous improvement, reinforcing ZF's leadership position in the industry.

Clarification statement on sale of ZF ADAS business to Harman International. We would like to clarify that we have also given in the media.

ZF Commercial Vehicle Solutions CVS confirmed that the announced transfer of certain advanced driver assistance system ADAS activity applies exclusively to its ADAS division portfolio, specifically compute solution, camera, radar, passenger car ADAS function, and does not pertain to ADAS portfolio of ZF CVS division. It does not affect ZF CVS development, supply, service, or support of ADAS solution for commercial vehicles.

Existing customer contracts, service agreement, and terms and conditions remain in force, and program deliveries continue without interruption. For the complete statement and further details, please refer to the stock exchange announcement dated 14th January 2026.

We will also talk about India-Europe Free Trade Agreement. ZF Group applauds the signing of India-EU Free Trade Agreement, a truly important pact set to shape an integrated economic zone serving nearly 2 billion people and strengthening one of the world's key trade relationships.

In times of geopolitical uncertainties and rising tariff hurdles, the agreement is an important sign for cooperation and exchange. This agreement opens new paths for collaboration, innovation, and sustainable growth across industries in both regions.

For ZF Group, it unlocks significant opportunity to deepen our technology innovation and advance future mobility technologies with this bilateral agreement. Additionally, it allows us to contribute to more resilient and diversified value chains.

Regarding some changes in the operations, new head of operation, effective Friday, 30th January, Mr. M.

S. Ravikumar retired as Regional Operating Officer of CVCS India after 39 years of service.

He was succeeded by Mr. G.

Mukund, who joins us from VE Commercial Vehicles Limited. He has more than 35 years of industry experience.

We would like to thank Mr. Ravikumar for his many years of service and wish Mr.

G. Mukund the very best in his new role.

Now, moving on the financial performance for Q3 FY 2025-'26, I would hand over to Shweta, our CFO.

Good afternoon, thanks for joining in. For your ready reference, the results were made public at 15:50 hours on February 10, 2026.

I hope you've had a chance to go through them. I'm happy to share that our total revenues consolidated for the quarter ending 31st December '25 reached ₹1,105 crore compared to the ₹980 crore in Q3 of the previous financial year.

This is an increase of 12.8% year-on-year and a 15.3% increase compared to the previous quarter. The company delivered strong operating performance in Q3 FY 2025-'26, achieving an EBITDA margin of 20% on total sales, and profit before tax before exceptional items stood at ₹194.5 crore.

After factoring in the ₹7.9 crore of exceptional impacts relating to the labor code changes, our profit before tax stood at ₹186.5 crore, translating to 16.9% of total revenue. The company reported a PAT, profit after tax, of ₹140.2 crore with 12.7% PAT margin, and our PAT grew by 11.7% over same quarter in the previous financial year and an increase of 29.5% compared to Q2 2025-'26.

I'm pleased to note that this is the first time we have also crossed revenues of ₹1,100 crore in a single quarter, and we continue to grow sustainably across ₹1,000 crore in three out of the last four quarters. Handing back to our MD, sir.

Thank you, Shweta. Despite [unclear], favorable policies along with improved mining activity and rainfall patterns have enabled us to remain resilient in a volatile macroeconomic environment and continue supporting the demand from our valued customer.

We remain committed to driving sustained growth for all our stakeholders, including our investors, customers, suppliers, and employees. Looking ahead, we are optimistic about continued momentum, supported by recent India-Europe FTA and positive volume outlook across the CV industry.

Thank you. We now welcome your questions.

Sir, good afternoon, and thank you for the opportunity. My first question is on the EBITDA margins.

We've seen the margins improve significantly this quarter. We actually saw the same last year third quarter as well, when sequentially the margins improved more than 300 bps.

Just trying to understand what has driven this margins? Because other expenses have come down while gross margins have stayed similar Q-o-Q.

It'll kind of help understand this phenomenon, please.

Thank you for the question, Mukesh. Mukesh, we typically do our retrospective price amendments in Q3.

What you would see is a small impact of the price adjustments or collections of the increases of prices from April to September also being collected in December. That's why you see this seasonal increase in the same quarter of last year as well as this year.

On an financial year basis, you would see a small expansion in our margin over what we delivered for FY '25 and '26, but this is a seasonality that you're seeing in December quarter standalone.

Right. Retrospective price adjustment will probably reflect in the gross margins, I would imagine, whereas your gross margins haven't really moved sequentially.

It's the other expenses that have come down. Is this also driven by this pricing, the retroactive price adjustments?

That's right. It just goes into adding to the margin, right?

Okay.

There is of course an effort in our cost management and better absorption due to higher volumes, but the impact of the higher EBITDA in last December as well as this December would come from the SPV or the sales price variances.

All right. Understood.

Secondly, I think you did mention that exports have remained weak this quarter, obviously because of the tariff issues, etc. Now that we have a lot of clarity on the US tariffs as well as with the EU deal, how are we placed in terms of exports?

If you could kind of help us understand next couple of years how could exports grow, especially given that the parent actively looks to source from India, given its best-cost engineering capabilities. Any outlook for the next couple of years you can provide on exports specifically?

When you're asking for a outlook on a couple of years, let's say that the EMEA is showing consistent growth in vehicle production. Having said that, we are living in a very volatile world, commenting for '27 would be difficult.

In general, we can say EMEA is strengthening, but however, early days yet for the US tariff announcements, and we are not able to comment on that, and we don't see that impact in India as yet.

Okay. Just lastly, I think in the opening remarks, you mentioned about the mandating low-floor buses for city applications and how that could benefit the ECAS, the electronically controlled air suspension product.

Any timelines we could have on the possible mandating of this low-floor buses? How is our current revenue from ECAS?

Are we currently importing this product? Any sense on the ECAS product?

Right now this is a draft legislation at this point of time. You might be aware that the market is gradually shifting to ultra-low entry buses to facilitate ease of entry and mobility in cities.

There is a draft legislation that in the upcoming October 2026 timeframe, all the buses that are going to be sold in major metros and cities could be ultra-low entry. We see a potential of this ECAS being utilized in each of these buses.

Currently, yes, it is an imported solution, and we have internally activated some actions towards fully localized content.

Okay. How much on an average the content per vehicle for ECAS could be for us say once it's localized, what could be the potential per vehicle realization?

Today it's running at very low volumes. Going forward, when the volume increases, the price would also typically come down to maybe about 25 to 30k per vehicle.

Okay. All right.

Just lastly, I think the revenue mix that you mentioned for 3Q, some of the numbers are inaudible. If you could just repeat the OEM, aftermarket, and exports revenue mix alone for this third quarter, please.

That's it from my side.

Sorry, could you repeat your question? Channel-wise, yeah.

Ma'am,

the third quarter revenue mix between OEM, aftermarket, and exports. If you could just repeat those numbers.

Some of those numbers were inaudible.

Okay. Our OEM was about ₹520 crore, aftermarket ₹157, and exports ₹259, with service income being about ₹125.

All right. Thank you so much for this, ma'am.

I'll get back in the queue.

Thank you for the opportunity, and congrats on the healthy results, and greetings to the management. Sir, we are 1.5 year away from the ADAS regulation implementation.

Most of the OEMs would have started finalizing the vendors for the ESC, ABS, and the ADAS function. Can you help us understand how are you seeing the book building for us for this ESC and ADAS system?

How we are seeing the traction with the major CV OEMs?

Hi Mumuksh, thank you for the question. On the ESC side, we are working with all of the OEMs.

We would retain our current leadership position in terms of the ESC system overall with each truck and bus OEM. On the ADAS side, this is still at a discussion phase, advanced discussion phase with most of the OEMs.

There are discussions going on in the market with regards to other players who have offered products at a lower pricing than what is currently being offered by ZF. As a result of that, there are several discussions and ongoing proof of concept related topics that are undertaken with each OEM.

We are at an advanced stage of discussions and expect to have some directional conclusion in the coming quarter.

Understood, sir. Just on the content value for this system, we earlier mentioned 65,000 kind of value for the system, broadly 25,000-30,000 for ESC.

On the ground, are you seeing the same kind of pricing post the negotiation that's going with the customers?

On the ESC, we would be at around 20 to 25k as we had indicated earlier. On the ADAS, the earlier indication of 40 to 45k was the number we had indicated during our earlier discussions.

However, based on the latest outlook and the feedback from customers, their expectation is somewhere half of that. That's the kind of pricing levels which we are looking at as we are going forward.

Got it, sir. Thank you for this.

Sir, for this regulation, would we require any capex requirement for the next few years to support the order, sir?

At this moment, we are only enabling our capabilities from an application engineering perspective. That's more from a test track related capability requirement only, yes.

Okay. Then going ahead, there would be a requirement to then start manufacturing when the regulation comes in, right, sir?

In a longer term, yes. We would be looking at further localization content when the volume picks up for the market overall.

Got it, sir. Sir, for this quarter, because the regulation of ESC for buses have started, right?

Just want to understand what kind of volumes we are doing or what kind of revenue this quarter came from the ESC solution for the buses?

Just to give a comparison from Q3 of '24-'25 to the Q3 of '25-'26, we are seeing approximately 3,000 units of ESC delta increase. Approximately 1,000 units per month increase over last year, based on the legislation that has been mandated for the buses.

Got it. Great to hear that, sir.

Sir, just on the low-floor bus the application...

Sure, sir. Thank you.

Thank you. I just want to understand what has been the growth of the trailer segment in the last 9 months, because what I understand is that that segment was actually growing faster and there are some components which we are actually able to put on the trailer segments, where we were doing EBS and and so on and so forth.

Can you just help me understand how the mix has changed, and what has been our content in these trailer combinations?

Thank you for the question, Mr. Lakshminarayan.

I think the trailer segment had been growing in the early part of the year, primarily driven by a change in mix from the rigid to the tractor trailers. However, in this quarter, quarter 3, compared to previous year, there was a dip of about 6% to 7% in the overall trailer production.

There has been multiple factors related to GST, fleet underutilization, export requirement decline, and so on. These were certain factors that triggered a drop in the overall trailer production in this quarter.

Overall, if you see this has impacted in terms of numbers, volumes of trailers that are produced in the quarter 3.

All right. What kind of components we actually have it in them, and can you just give a rough estimate?

Apart from the prime mover to which we supply to all the OEMs, on the trailer side, we supply the actuators which are fitted on the axles, as well as the braking system related components, valves, and EBS, lift axle control systems as well.

Got it. See, we were supplying to a Russian commercial vehicle manufacturer, and that actually had a challenge because of all this Russian war, etc.

Right? Now, can you just help me understand whether that particular thing was lost or it is actually augmented in some other way?

From India perspective, we were not supplying directly to any Russian manufacturer. That was more from a global business perspective.

I think since we are part of the companies which are part of the European Union, I think post the Russia-Ukraine war, all supplies have ceased for Russia.

Got it. Third question is that can you just talk about what are the other regulations that would actually help us, there is ESC in buses, and also ADAS, EBS, ECAS, etc., right?

Can you just plan out what would be the next two or three years and which would actually drive the growth in terms of priority in terms of which would be taking higher prioritization? Of course, you talked about ADAS in the previous question.

Right. ADAS is already a legislation which is coming up in 2027.

Apart from that, we have a few other draft legislations. I think one is the draft legislation of mandating ESC in school buses.

That is again something that is potentially going to roll out later this year. The other point which we spoke about is mandating ultra-low entry buses in the Type-1 city bus segment, which could lead to improved sales of our ECAS.

Thirdly, this would be something that is an overall benefit to the CV industry is the scrappage policy, which is under discussion for last several years. If that is potentially rolled out, that would have an overall benefit in the CV industry as a whole.

All right. Thank you, sir.

Thanks for taking my question. Sir, my question was on EV bus e-compressors.

We understand that our content in the EV bus jumps about 4x or 5x, mainly because of this e-compressor versus the IC buses. Is this with respect to even the smaller buses or is this for a particular segment of the buses?

One. Another piece within this was are we a near-monopoly in the e-compressors for the EV bus, or is there competition?

We heard names like Knorr-Bremse, Bitzer, Valeo, Denso, etc. Are these our competition or we are near-monopoly in India?

I think you rightly said that in electric vehicle, e-compressor is more expensive as compared to the IC vehicle. Mostly in India, we are, I would say, major supplier from India.

There are some imports also by some of the manufacturers. As a government policy that every EV has to ensure that local content, we are fulfilling that [levelity?]

.

Okay. This e-compressor opportunity is for all buses or is it for a particular range of buses, like more than 9 meters or 12 meters?

Today majority of the buses are 9 meter and 12 meter, and current product what we have proposed fits in that application. Off late, there are some requirements coming for the smaller 7-meter buses as well.

We are trying to see suitable product fit with our product, which is also capable to be packaged across board. Typically in a bus application which has higher air consumption and requirements, our product is a right fit.

Got it. Sir, we understand about 4, 4.5 thousand EV buses were sold in calendar year '25.

One report projected that e-bus volumes could hit about 17,000 in 2 years' time. Can you share your perspective on whether this is plausible from your perspective?

As you rightly mentioned, the e-bus segment has seen a steady year-on-year growth that has been positively driven by two factors: one is the state transport unit undertaking related tenders, as well as the PM-eBus Sewa related discounts and incentives that are offered. Most recently, I think the 10,500 buses order was also concluded in the month of November, December, which is going to add a real fillip to several OEMs who are into bus manufacturing.

These are the quantum of buses that are going to be produced over the next two years. It is anticipated that the government will further incentivize these kind of initiatives going forward, driven largely by domestic value addition.

The key OE players who are able to give maximum local content will also be incentivized to offer these buses, the complete opex model operation system to the public. In lieu of that, it seems possible, but of course subject to a lot of other charging infrastructure and capabilities that need to also be built in to support that.

Absolutely. Right.

The last question, on the recent order that Tata Motors received from Indonesia for exports of 50,000 70,000 vehicles. Just wanted to understand whether we have an opportunity in this.

Would this vehicles be exported to Indonesia in a complete knockdown position, and our products would go with them, or this is not in our domain?

Of the vehicle orders that they have received, there is an Ultra T.7 which comprises 36,000 units, and that is offered on an air brake system platform. In that air brake vehicle system platform, we are working with Tata on that product.

Got it. The advanced products are not part of that, right?

Like a smaller vehicle?

I think it's a very basic ABS system only. There's no advanced products as part of their spec.

Right. The last, if you can share the number of service centers in...

Sorry to interrupt, Mr. Ankit.

May

I'll join back. Thank you.

Hi. Thank you for the opportunity.

Sir, my question is on this ADAS comment that you made that where the content per vehicle or the pricing between our and the competition is a difference is of 50%. If you can just talk a little bit more on this, how serious is the competition, because given we are the technology leaders, how easy will it be for someone to replace us with OEM?

If you can just highlight a few points there, that'll be helpful.

Thank you for the question. I think the main background of the other players who have come into the segment are from different segment, the passenger car portfolio.

Their product and offering may be differently suited. However, we are still in discussions in advanced stage of alignments with customers with vehicle proof of concept trials and so on.

Okay. You expect that in order to win the orders, we'll have to come midway with the competition on our pricing or we'll have to compromise on our pricing part?

At this point of time, we are talking about what value we are offering to the customer, and we also have our own testing capability as well as the field vehicle data acquisition. These are the algorithms that are available with us, which are our USP when it comes to talking about the product to customers.

Okay. That's it.

Thank you.

Hello. Yeah.

Ma'am, can you please repeat on that retrospective price adjustment part?

Dishant, price increases happen with effect from 1st April, but the effect is given via POs in November or December. That is the reason why in December results, there would be an impact of retrospective price increases from April to September.

Sure. Then, ma'am, if the prices increase, then it should have been in the increase in the gross margins, right?

It does get into the gross margin, yes. The gross margins are still...

Sorry, please ask your question.

Yeah. The effect of the price increase should be visible in the gross margin, right?

Because on Y-o-Y basis, it is on the similar lines.

If you're comparing it to the same quarter of last year, there is the same impact also in the same quarter of last year.

Even on a sequential basis, the gross margins are same.

I'm not sure where you're getting your numbers from. Maybe you can connect with me or send me your question via email and we can take it up there.

Sure. My second question, ma'am, would be on the recently EU deal.

The parent company thinking of introducing some products from the Indian operations since we would be in a position to supply to the Europe after this deal? Any thoughts on that?

The EU FTA has just been signed off. Of course, this presents a significant opportunity, but we are still evaluating what would increase and how this would play out, and ZF will release comments upon developments on how they're affecting and how they're translating for us.

Sure. Just last question, ma'am, is it possible to give the Europe growth and the US growth for Q3?

Yes. Europe has grown about 20 Just a moment.

Europe has grown about 9% and US has degrown by about 28% on volumes on vehicle production.

On vehicle production?

Yes.

Okay. Sure.

Thank you.

Hi, thank you for the opportunity. My question is on the low-floor bus city application.

What is the segment opportunity in terms of volume and value? How are we positioned to capture the opportunity?

Hi Dishant, when we look at the ultra-low entry buses, these would be typically Type-1 city buses. Today, if you look at the overall volumes in this particular segment, maybe there may be about 1,500 buses a month potentially that could be transformed into the ultra-low entry type application.

Of course, the infrastructure and the routes that are currently mapped on the usage of these buses need to be enhanced, otherwise you're going to have all these buses scraping the floor of every single road pothole that we have. Surrounding that, and going forward the potential opportunity that we have apart from the basic braking system is the ECAS, because these ultra-low entry buses also would have the kneeling and raising functionality similar to the tarmac coach buses.

That is the opportunity that we spoke about a little while earlier.

Okay. My second question would be in the smaller CVs, how are we getting traction for ESC or ABS?

Smaller CV you are referring to SCV or LCV? Which segment are you having your query with regards to?

Over 5 ton.

Okay. In the SCV segment, the products that are there with the air brake, we are already present.

The products that are fitted with the hydraulic brake, we are in series supplies to some of the OEMs with our hydraulic ESC products. Those are already in series production today.

Okay. Thank you.

Thank you.

Thank you very much. We are, as we discussed, that commercial vehicle market above 6 ton is booming, buoyant market.

Our team is working to support that. Definitely the indications given by all the OEMs during our personal visits also last month are talking about this buoyant market at least till March, and even indications are given after April.

Thank you very much to all the stakeholders who are supporting us into this growth. Thanks and wishing all the best for the seasons.

Thank you.