Zelio E Mobility Ltd

we are growing, we are going to be a fairly sizeable company soon. So, if we can consider moving to quarterly earnings reports that would be of great help, sir?

Second one is also a small request, sir. It is nothing to do with the company as such, but given the super idiotic rules of the exchanges and SEBI, our stock keeps on getting thrown into periodic call auction repeatedly. And that happens because of God knows what rules these people are implementing. If your Company Secretary and the CFO can at least lodge a protest in the exchanges against the way in which the stock is like repeatedly being thrown in periodic call auctions, that would be of great help to the company as well as the investors. So, these are small requests.

Sir, I have just one major question. Given the exposure that we have to rural areas and Tier 2, Tier 3 cities, do you expect a bad monsoon to have any kind of repercussion for our growth in the current year? And a related question, sir, this INR50,000 to INR75,000 ticket size, given all the things which are working in your advantage, how is the funding environment?

Are loans available to customers easily? Are you in any way tying up with any of the NBFCs to provide loans like the other major OEMs do, or most of these are cash or equity financed? I mean, people are using their own money without borrowing. What exactly is the consumer behavior? That would be of great help, sir.

Hello, sir. You have asked many questions. Let me answer them one by one. Firstly, regarding quarterly results, it is mandatory for us to report half-yearly for now. We just listed in October last year, so we are still understanding the documentation. In the future, we will surely move to quarterly reporting, but it will take some time. Second question was about the periodic call auction. It is affecting us as well. We will definitely mail SEBI, and we would also like Hem Securities to mail SEBI regarding why this periodic call is happening repeatedly.

Secondly, regarding the monsoon, there is no effect on our vehicles because our scooters are waterproof with IP67 motors and controllers. So, there is no impact on our sales due to the monsoon. Thirdly, regarding finance options, we have many finance options available. We have tie-ups with Bajaj, Kotak, Trusera Finance, and many more. So, in Tier 1 and Tier 2 cities, proper finance options are available for customers. What was your other question, sir?

Sir, the monsoon question was not about waterproofing. It was about whether the customer's income gets affected because of rural exposure. If agricultural income or related income decreases, their discretionary consumption goes down, which hits auto sales. Do you think this will be a factor for you, or do you see any risk right now?

Sir, every year in North India, there is some impact on agriculture due to the monsoon. It is a considerable factor every year; it's not something new this year. Every year, there is some impact on agriculture due to monsoon and climatic changes. But sales are never impacted by that. It might get delayed -- if not this month, then next month -- but the numbers have never been impacted, sir.

Okay, sir. Thank you very much, sir. I have some more questions, but I'll go back in the queue and come back again, sir. All the best, sir.

Thank you, sir. Thank you.

Thank you. The next question is from the line of Kushal Kasliwal from InVed Research. Please go ahead.

Sure, thank you. Sir, in your introductory remarks, you didn't mention unit sales. So, how many units of two-wheelers were sold in H2, and what were our total unit sales in FY26? Also, what is our unit guidance for FY27 and FY28?

Sir, I will brief all investors from the beginning of '22. When we started the company in '22, we did 3,000+ scooters. In financial year '22-'23, we did more than 10,000. In '23-'24, more than 21,000. In financial year '24-'25, we did more than 38,000. And in this financial year '25-'26, we have done more than 70,000. Specifically, in H1, we did 30,000, and in H2, we did more than 40,000.

Got it, sir. Great. And guidance for next year?

For next year, as I mentioned in my script, our projection is more than 125,000 units.

And sir, is these 125,000 units happening because of expansion in Odisha, or is it also due to our normal Haryana facility?

It is happening all over. Having Odisha is supporting us because we are expanding geographically, so there is a lot of relief in transportation prices. Automatically, sales are growing from there as well, and our capacity has also increased. So, considering all factors, these numbers are coming.

Sir, what is the total capacity in Odisha and the current Haryana facility?

The capacity in Haryana, sir, is 120,000 per annum. And Odisha is 60,000 per annum.

Got it. And sir, would you like to say something about dealership expansion? I'm sure since we are growing so much, we are expanding in Odisha. I think in the last con-call… Currently, we have more than 400 dealers. And this year, we are planning to expand it to more than 550 dealers.

Got it, sir. Sir, I had some bookkeeping questions. In our balance sheet, there is a Loan and Advances figure of around -- one second -- around INR43 crores. What is that related to, sir?

Please hold on for a minute. CFO Shubhamji is with me; he will assist you.

Hi, good afternoon. Thank you for joining us. We value your interest in our company. Actually, these short-term loans and advances are the advances that we had paid to our suppliers. Actually, we had paid some advances to our suppliers for some cost-cutting and economies of scale. And there are some capital advances for our new plant that we had paid to some suppliers for plant and machinery. These are the large factors.

Sir, can you quantify the capital one and the suppliers one?

Actually, the advances to suppliers are around INR22.5 crores, and capital advances are of INR25 lakh. And there are some advances to GST and Customs authorities of INR19 crores.

Actually, we have an inverted tax rate in GST, so we have applied for a GST refund. And these GST and Customs refunds are of INR19 crores, totaling INR42.6 crores.

Understood, sir. Got it. Sir, my next question was on the tax rate. We have a current tax rate of around 17%. So, is this sustainable… Yes, the current tax rate is 17%. Actually, we have applied for 115BAB.

Okay, so how long will this 17% tax rate continue, sir? For 10 years. Got it. So, after… 10 years from 2021. So, we have five more years left.

Got it, sir. Thank you so much. I'll come back in the queue. Thank you so much, sir.

Thank you. The next question is from the line of Rajesh Gupta from Krishna Motors. Please go Hello, Namaskar ji My question is that you are adding the 3-wheeler line along with 2-wheelers.

Economies of scale will definitely be better, but this will be a completely different segment from 2-wheelers. If you have to focus more on its economies and you move sideways from 2-wheelers, it might affect the business significantly.

And second question, regarding the low-cost segment scooters that are coming -- I am also in this business -- how do you see the competition that will arise tomorrow? Are we opening exclusive showrooms or are we just dependent on dealerships? How do you see the future in this? The results are good.

And the IPO we did last year, the major funds for plant and machinery were for the 3-wheeler segment. So, it's not like that. We have distributed the funds separately for 2-wheelers and 3- wheelers; the teams are different and the plants are different. So, 2-wheeler sales will never be affected because of 3-wheelers.

Secondly, regarding your question about dealerships, if we just had to open dealerships, we would have more than 1,000 dealerships by now. But our key focus is brand visibility. That's why we did the IPL this year with Punjab Kings. We are also focusing a lot on Meta ads,

branding, and hoardings for brand visibility. As for showrooms, 70% of our showrooms currently are exclusive showrooms. And by this year, 100% of the dealerships will be 100% exclusive.

One more question. Regarding the Coimbatore plant you are setting up, what is the expansion role? How many 2-wheelers will you make there, and when will you move towards the West?

The Coimbatore plant we are setting up, which will be operational from next month, has almost the same capacity as the Odisha plant 60,000 per annum. And this is a very big step for our expansion in the South.

How big are you keeping this plant? Because in the South, the demand should be more than your capacity, in my opinion… Right now, it's the initial stage, just the start. Step by step, in the coming time -- currently, our capacity was 72,000, and within one year, we reached 240,000 capacity. Step by step, we did more than 70,000 vehicles last year. And after adding this South Coimbatore facility, our capacity will be 240,000 vehicles.

Our projection for this year is more than 125,000 vehicles. If we surely achieve more than 125,000 this year, side by side, the company has future plans for bigger plants. But initially, at least it has started; our presence will start building in the South.

Will you focus on increasing models or on increasing sales?

On increasing sales, whatever it takes. We are seeing what the market demand is. There are different types of categories in the market; we have to entertain every category -- students, gig workers, homemakers, elders. Wherever we feel we can get sales from a category and the demand is good, we are increasing models according to that category. It's not like we are just increasing models for the sake of it, we are bringing models for every category.

Sorry to interrupt. I would request Mr. Rajesh Gupta to please rejoin the queue. Thank you. The next question is from the line of Mukul Agarwal from Param Capital. Please go ahead. Hello, Kunal ji. How are you? Good afternoon, sir. Very well, sir.

First of all, many congratulations to you. After watching Vaibhav Suryavanshi's batting, your guidance and opening remarks felt similar, 75-80% growth maintained and 120% CAGR since the last 3-4-5 years. Congratulations. I am a very proud shareholder looking at your performance. Thank you, sir. Thanks a lot.

I have three or four questions; I'll ask them all at once, otherwise the lady won't let me ask later.

You can answer as per your convenience. So one is, given that oil and crude prices have increased, there is an energy security threat in India. And now the PM is also talking about

renewables and the government's big focus is on this. We see a lot of traction in EVs, like in high-speed EV vehicles.

I want to know your big picture on how the EV ecosystem will play out in India and how sales are happening? And knowing you now, that you are around 30 years old and the way you are batting, what can this become in 10 years? Where do you see Zelio in the next 5 to 10 years?

And in two-wheeler EVs, the top three players, like TVS has around 28-29% market share, Bajaj has around 23-24% then Ather has 18-20%, and then Hero and then Ola. Top 3 had individually market share of 20% -30%. You said that in low-speed, 8 lakh to 10 lakh vehicles are sold every year. And we will sell 125,000 this year. So, suppose the market also grows 15%-20% this year, you will sell 1.25 lakh out of 11-12 lakh, so your market share is around 10-11%. Can this market share go above 25% in 5 to 10 years?

Then, the last question is about our challenges. Every day we hear about import restrictions from China, and the Indian government also doesn't like it, which is very fair. If we want to grow, what is your preparation for all inputs, including cells? What percentage can we indigenize?

How do you see it going forward? I am very happy you got a professional CEO in the company, which is a very good step. How will you build this in a holistic view? I want to know that. Thank you.

Sir, you have asked many questions all at once, but I would love to answer them all. My point is that because of the increase in crude oil prices, we have got a very big advantage because the future is electric anyway. But because of the increase in crude oil, suddenly, as our PM also requested everyone to go for renewable sources, switch to EV, there is a lot of boom in the market. People are switching to electric scooters.

The growth in EV can come through low-speed. Secondly, regarding indigenous products, we are working very hard. This year, I mean, until last year when we brought the IPO, I used to tell you that two of our vehicles are indigenous. By 2027, I clear this to you, we will have five to six vehicles which will be properly 70%, 80% will be Make in India.

And after the three-wheeler plant starts, all fabrication will be in-house. So, in the coming time, both low-speed and high-speed, but low-speed is going to become a major part. The only hurdle we are facing right now is the lack of awareness among people. For that, we are focusing on branding and promotions.

We want people in the market to know which scooter is value for money and best to buy. We are doing promotions for that. And now the government is also supporting a lot and encouraging EV. So definitely, sir, in the coming time, this segment is going to become very big, excessively big. And the scooter industry, the two-wheeler industry, especially the scooter industry, I think in the next five years, 70%, 80% of ICE engines will convert to electric. And in that electric, we will be the leading players in both low-speed and high-speed.

Yes, Yes. In China, it has already happened; two out of three two-wheelers are EV, so it's 65%.

So India will also get there. And Kunal, is the advertising budget factored in? What percentage of sales will it be? And I believe this profit in the results has come after your IPL expenses.

No, sir. IPL expenses will be added this year because, as per the auditor, the first match of the IPL started on 31st March. And it then ran until the end of April and May. So, as per the auditor, they said the expenses will be added proportionately this year as prepaid expenses. But sir, that's not a problem; we are going to do even next-level promotions and branding this year. We have already taken the budget.

Very good, fantastic. Very happy to hear that. And all the best. Just like Vaibhav Suryavanshi is playing, you also keep playing, so it will be good for all of us. Thank you and all the best. Thank you, sir. Thanks a lot.

Thank you. The next question is from the line of Ashish Soni from Family Office. Please go Sir, what is your growth perspective and sourcing strategy from China? Because supply chain issues are happening a lot. So, what is your strategy for that?

Sir, we are moving towards indigenous products. We want to remain dependent on foreign countries, whether it's Vietnam, Middle East countries, China, or Indonesia, only for limited components, which are technical components. Other components, the major components, the bulk components which take up more space, we are making them 100% indigenous and in-house by this year or the next financial year. We will keep dependency only on small components or major technical components and then store them in bulk so that if there are shipping line or supply chain issues in any month, they don't affect our business.

Okay. And what is the marketing spend plan for this year and next year? How many crores in terms of quantum?

This year, sir, more than INR1 crore, INR1 crores to INR2 crores after IPL expenses. I am not considering the IPL expenses, nor the expenses for meta ads, promotions, and hoardings that I've done for it. Excluding that, I expect we will spend more than INR1 crores more this year. And next year?

We haven't decided for the next financial year yet, sir. Let's bet on today's match first; we'll talk about the next match later.

Okay. And since the government is promoting EV, do you think you can make more inroads in the three-wheeler segment as well?

Surely, sir. In the three-wheeler segment as well, currently, three-wheelers are only in North India. Gradually, it will convert in the East and South as well. So, there is a lot of room for expansion in that.

So, do you think that will grow faster than two-wheelers, or what do you think personally?

Simultaneously. Two-wheelers are doing more right now, but in the future, three-wheelers will also grow along with them, sir. Okay, sir. Thank you. All the best.

Thank you. The next question is from the line of Darshil Jhaveri from Crown Capital. Please go

Hello. Good afternoon, sir. Thank you so much for taking my question, sir. Firstly, sir, congratulations on a great set of results. Sir, I just wanted to ask that now that we are scaling up so much, what is our expectation for margins? Is it like we will keep margins stable and spend more on marketing and brand building, or what is the plan? This year the margin was 11%; what is the plan for margins going forward?

Okay, okay. Fair enough, sir. And sir, secondly, now that we are doing all this dealership and all, what do you think the competitive landscape is like in the market? What impact can competition have on us? Do you think as we go into the new market in the South, there is a new entrant there, so we might have to reduce pricing, or how do you see the competition, sir?

There won't be a need to reduce pricing because when our plant opens there, the price list we had for South India will automatically reduce because transportation will decrease. We have opened that geography specifically so that we can give good prices to our dealers. But that won't affect our EBITDA. The reduced transportation will be very beneficial for them, which will give growth to our sales there.

Okay, okay. Fair enough, sir. And sir, just last question. Our average sales price is roughly, I think, around INR44,000. So, what do you think this can be in the future? Because unit-wise we

are growing a lot, but as we might bring three-wheelers, a slightly higher-end segment, do we want to keep this same range or can we see some growth in this as well, sir?

It will go from INR45,000 to INR50,000, sir, in the upcoming time.

Okay, okay. Fair enough, sir. Thank you. Yes, that's it from my side. Thank you so much, sir. All the best. Thank you sir.

Thank you. The next question is from the line of Deepak Pruthi from Wealth with Wisdom.

Hi, Kunal ji. It was very good to hear your energy-filled pitch at the beginning of the call; it was very exciting. Thank you, sir. Thank you.

Kunal ji, one question is on service. As you expand, I'm sure you will make many dealerships and I'm sure you'll start clocking huge numbers. But along with this, what are you doing on the service team to ensure that the service turnaround time is minimum?

For this, sir, we are maintaining quality in and quality out in our plants, so that dealers don't have to face any quality problems. We have strengthened the PDI teams. Last year we had four service engineers; now we have more than 10 service engineers in the market.

And Zelio Auto Components, our wholly-owned subsidiary, was opened with the motive that spare parts availability can be provided properly. And I personally focus on the replacement and spare parts team so that no dealer has to face any problem and we can provide them replacement in the best time -- I mean, minimum time.

Okay, okay. One more, Kunal ji. A question is, how is the government supporting the EV industry, specifically the low speed --low-speed EV?

Other than that, registration charges are not applicable, so that's a benefit for the customer.

That is one support in the government policy, that it's without registration and without license.

Thank you, thank you, Kunal ji, and all the best.

Thank you. The next question is from the line of Subhanu Bangal from Three Head Capital.

Hello, hope I'm audible. Good afternoon. Sir, our dream about three-wheelers, that our three- wheeler vertical will also grow -- how much volume has the three-wheeler vertical done in FY26?

In FY26, sir, we have done 800 numbers, sir. Only 800?

Only 800 because our infrastructure and plant were not ready. From this month, I mean from 2026-2027 financial year, our Patan plant will be ready for three-wheelers, then we will give you good numbers. So, how much are we targeting in FY27? More than 2,000.

Okay. And my next question is on the dealer network. Our dealer network, as you said, is 400- something. How much will it expand to in FY27, and the next two to three years? More than 550 dealers, sir.

How many will there be in the next two to three years? I'm asking that.

In this financial year, our target is that, there will be 550 dealers in the company. More than 550+ dealers. Currently, there are more than 400, so we will make 100 to 150 new dealers.

Okay, okay. That's it from my side. Thank you. Best of luck.

Thank you. The next question is from the line of Gagandeep Singh, an Individual Investor.

Hello, hello Kunal ji. Congratulations for the numbers. My question is, are we venturing -- are we going to venture in the bike segment also?

Sir, currently the company has no plans to enter the bike segment because, from my point of view, I don't see quantity scale in the bike segment yet. Because in electric two-wheelers, for now -- for now, sir -- the two-wheeler scooter is for 50-60 kilometers. Until the government brings a policy on battery prices -- until a subsidy comes on Lithium-ion batteries or LFP batteries -- scaling the bike segment is a bit difficult, sir.

So currently, the company has no plans for the bike segment. In the future, maybe some government policies might come which make EV batteries -- Lithium-ion batteries -- a bit more affordable. Then only the bike segment can happen because in the bike segment, they need mileage and load capacity a bit more, sir. And because of that, prices go quite high, and then the customer starts comparing with the I-segment.

Okay, ji. Thank you so much.

Thank you. Ladies and gentlemen, that was the last question for today. With that, I would now like to hand the conference over to Mr. Nitin Jain for closing comments.

On behalf of Hem Securities Limited, I would like to sincerely thank the Zelio E-Mobility Limited management team and Mr. Kunal Arya for taking the time to join us today and for responding to all the queries in such a detailed, insightful, and fiery manner. I would also like to thank all the participants for joining this call and for their active participation. With this, I would like to hand over to Rutuja for closing remark.

Thank you very much, ladies and gentlemen. On behalf of Zelio E-Mobility Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.