JBM Auto MD Says Government To Stay Proactive With PM E-Bus Sewa Scheme Despite Election Year | NDTV Profit - video Dailymotion

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00:00 Good morning and welcome to NDTV Profit. We are now tracking JBM Auto as they have been

00:04 awarded the tender for a bus operator for procurement, supply, operation and maintenance

00:10 of roughly 1400 buses. We are joined now by Mr. Nishant Arya, Vice Chairman and MD, JBM

00:16 Auto. Hi sir, welcome to the show and thanks for joining us today. Just to start off, I

00:23 just wanted to check if you could tell us about the recent 7500 crore order win. How

00:28 long do you expect execution for this particular order to take? So this order is very prestigious

00:35 for us and we will be executing it in the next 12 to 18 months. The execution of the

00:41 order would start as we speak in the beginning of the coming financial year itself but the

00:48 deliveries would start happening from quarter 4 of FY25 and within 18 months, so basically

00:55 Q4 of this coming financial year and Q1 and Q2 of FY26 we will be executing this order.

01:06 Now where will these buses be supplied to because as I understand that this comes under

01:13 the PM E-Bus Seva Yojana which covers roughly 160+ cities in India. So could you just give

01:19 us a view of the geographical exposure of this particular specific order? So we would

01:25 be supplying these buses in about 20 cities across Maharashtra and Assam. Okay and just

01:34 as per the PM E-Bus Seva, as they say that this is roughly 10,000 buses are procured

01:41 under this particular scheme. I just wanted to ask how many are already tendered under

01:47 this particular scheme on the industry level and how many are specific to JBM Auto? Right,

01:55 so currently almost 2000 buses I believe have been concluded and out of close to 2000 buses,

02:06 1390 buses have been awarded to us. What do you expect on the order wins for you in this

02:14 particular scheme? Do you expect the government to be proactive over the next year because

02:18 as you know we have been, we are getting into an election year. How do you expect procurement

02:24 to continue in this particular scheme for the next financial year at least?

02:29 No, I think government is very proactive and very focused on this particular project because

02:36 this is going to cater to people across the country and in tier 2, tier 3 cities primarily.

02:42 So I think that's a big focus area for them and clearly they would not like to really

02:48 lose out on any opportunity of deploying these vehicles. So I think immediately after the

02:55 elections are concluded, things would be taking off on this front as well. That's what I see

03:01 as a likelihood. Now just to go back on what you said in the

03:05 previous question, you said that a lot of these orders would be procured in Maharashtra

03:09 in this particular specific order. Now just to get your view on this particular scheme,

03:14 it is to you know develop the underdeveloped e-bus markets in India. How do you see the

03:21 charging infrastructure of this particular segment going forward? Because as you will

03:26 be also maintaining and as well as supplying these buses, where do you see going forward

03:34 the newer cities getting added which have not been receiving these electric buses and

03:38 you think the charging infra is already set up there, is in the process of setting up

03:43 there? Just wanted to get your view on that. Sure. So charging infrastructure, when we

03:49 talk about the charger and the downstream charging infrastructure is also part of our

03:55 scope. So we'll be setting that up and that becomes much easier when you're doing buses

04:00 because all the buses have specified parking locations in the bus depots and terminals.

04:06 So therefore that can be done very easily and the upstream power infrastructure and

04:12 other things are being driven by the central government ministry of housing and urban affairs

04:18 along with the respective states and cities. Got it. And could you just throw some light

04:26 on your current order book and how much is currently the electric vehicle buses as a

04:32 percentage to the current order book? So current order book is 100% electric almost I would

04:39 say and earlier we had an order book of about 5000 buses and this year we have executed

04:46 between 1000 to 1500 which will be concluding end of this financial year FY 24. So from

04:51 the previous order book we'll be carrying forward about 3500 plus buses and the new

04:58 order of 1390 would take it to again about 5000 odd buses as opening for the next financial

05:05 year. Sorry the 1390 buses would be included in this 5000 or will be over and above that?

05:12 Included as I explained 3500 plus the 1390 buses that's what makes it close to 5000 again.

05:20 Correct and previously you had mentioned that for FY 24 you expect roughly 2000 buses to

05:26 be executed. I think currently you're mentioning a little lower number than that. 2000 per

05:32 hour on top line is what we had given as a guidance. The number of buses ranged between

05:37 1000 to 1500. 1500 so going forward for FY 25 at least you have roughly 35 to 3600 buses

05:46 and you also expect the government to not take their foot off the pedal and keep giving

05:53 these orders and tendering. Is that right? So 35 to 3600 buses plus the 1390 new buses

06:00 which already makes it 5000 as opening for the next financial year and then definitely

06:07 as the government comes up we'll be looking forward to participate in their process. Understood

06:14 and you had a new facility inaugurated in the late parts of last year somewhere around

06:20 October. Could you mention what is the capacity of this new facility and what is the current

06:28 utilization of the same? So the capacity of the new facility is 20,000 buses per annum

06:35 and the current utilization because this year has not been a full year so I think next year

06:41 will be the true testimony because we started at the almost midway in this year so next

06:47 year we'll be getting the full year in FY 25. Understood and previously you had mentioned

06:54 that for FY 24 as you correctly said in this interview as well that roughly 5000 crore

06:59 was the guidance for this year. For FY 25 I know that you are in the silent period for

07:04 Q4 so not asking much on Q4 but for FY 25 any kind of rough numbers and also as you

07:12 said that roughly like 5000 buses is what you guys are taking forward for the next year.

07:17 Any kind of numbers on what you expect on the revenue basis? No so we will be coming

07:24 out with the numbers in the next few weeks but definitely we will be looking forward

07:31 to maintain at least the same level of growth what we had in FY 23 moving on to FY 24 if

07:38 not more. And just since we are talking about revenue what kind of EBITDA margins are you

07:45 expecting for the next 1 to 2 years? I think roughly you are at 11 to 12% at the moment.

07:51 Do you see the scale benefit coming in with this new facility capacity utilization also

07:56 going up? Do you see EBITDA margins picking up from this range? No definitely we will

08:02 be looking at enhancing our share of business and growing at the same time the market will

08:08 be expanding so we will be looking at ensuring consistent EBITDA margin of 12% around that

08:15 number. And finally on cost utilization do you see with the additional scale benefit

08:23 coming in higher capacity utilization that will also translate to higher margins? Yes

08:30 yes definitely that will happen but simultaneously we are investing a lot as we go forward in

08:36 our R&D and engineering and technology domains so we will be ensuring to see that we are

08:42 cutting the technology and ensuring to maintain our leadership position in the market. Correct

08:48 and if I can ask you in this particular scheme we see that the PM EBITDA SEWA scheme we see

08:54 that the government is also putting up its share but the rest is also going to be coming

08:57 up from the states. Do you see generally it as a little bit of a challenge because if

09:03 it's coming directly from one particular government body or the centre has been really proactive

09:08 in giving schemes for example the PLI benefits and auto have reached the players also on

09:14 time. Do you see any kind of challenge on this going forward? No I think it has been

09:20 very well structured and the scheme has been very well planned so I would like to congratulate

09:25 the Ministry of Housing and Urban Affairs and CESL for doing a great job there along

09:29 with different cities and states. Definitely I think execution would be key and that is

09:35 what all of us are looking forward to in this scenario so personally I don't see any challenge

09:40 as of now because multiple deliberations and discussions have been held earlier with all

09:44 of us in the industry and many of these issues have been plugged. Understood and finally

09:52 I think you mentioned previously in one of our conversations that by 2020 currently you

09:57 see that the E-Bus market is going to pick up till FY27 and by FY30 you see 100% of the

10:04 market being completely electric. Do you still stand by those numbers and secondly do you

10:12 think on the charging infrastructure we will be picking up in the next couple of years

10:16 because as your company has been growing at really good numbers, the charging infrastructure

10:22 is it, do you see it coming up as well and are you looking for any kind of tie-ups in

10:27 this space as well? Yeah we are tying up constantly with different partners wherever any opportunity

10:34 exists and creating win-win partnerships so definitely I think that will go on. On the

10:41 other side I still clearly see that buses would be moving towards electric buses and

10:49 zero emission technologies and that will become the largest portion by 2030 very clearly.

10:55 Already we have hit parity in the buses today because compared to diesel buses on a per

11:03 kilowatt law metabases over a lifetime of 10-12 years electric buses are definitely

11:08 much cheaper and clearly I think as majority of the companies, corporates are going ahead

11:15 with the committed to ESG, SDG goals and their zero emission targets they are looking forward

11:22 to such kind of solutions for their own people. So therefore the whole ecosystem is transitioning

11:28 into this and charging infra as I mentioned today with the city buses and intra-city buses

11:34 and staff and school buses is not a challenge. I think the coach market is evolving slowly,

11:39 the inter-city market is evolving slowly where charging infra is developing very fast so within

11:45 next two to three years it should be in place completely and already a lot of action is

11:50 being taken by different players in that direction. And finally on competition there are a couple

11:58 of listed players who are operating in the e-bus space as well. Where do you see competition

12:04 going forward from here? Do you see newer players entering the space? And also as a

12:10 related question I wanted to check on your views for this particular scheme as you said

12:15 that apart from procurement there is also a maintenance of these buses. Do you think

12:20 because and correct us if I am wrong because the maintenance of the buses is also a key

12:27 in getting these particular tenders and bidding for them and on the cost basis as well. Just

12:33 wanted to check do you think that it will be very difficult for a newer player to get

12:37 into the scheme especially on the maintenance because it is a very long gestation period

12:41 as you said of 10 to 12 years. So what do you think of the competition and secondly

12:45 on the maintenance part? I think maintenance is a critical part for ensuring the vehicle

12:50 uptime which is definitely very important considering the lifespan of the vehicle and

12:55 the performance criteria which are there in place. We are very well equipped as a company

13:01 because we are one of the very few integrated EV ecosystem players in the world where we

13:05 have the vehicle technology, charging technology, battery technology, power electronics and

13:10 the full integration on the software and the hardware side. I think what new players experience

13:17 they will be best suited to tell you how they are positioned currently but we see the market

13:22 expanding in a big way and the adoption of electric buses increasing at a very fast pace.

13:28 That's why you see also in frame 2 close to 40% of the electric vehicle funding was dedicated

13:34 to buses and even now the payment security mechanism and other steps which are being

13:39 taken is for this because buses get into the common man which is 90% plus of the country's

13:44 population which is using public transport for at least one commute in a day at different

13:51 times. So therefore it's catering to masses at large where the asset utilization is also

13:58 the highest in the country. Understood and finally one last question from our side. Do

14:05 you think any kind of, do you have any guidance for any kind of CAPEX going forward in the

14:09 next one to two years and if so how will this particular and if so for this particular CAPEX

14:16 do you see any kind of funding requirement either on the equity or on the debt side for

14:20 the company? So definitely for our mobility business we are consistently doing lot of

14:27 CAPEX and we will be investing a lot of money across different projects in the next two

14:34 years and we are consistently working and inviting different financial institutions

14:39 on debt and equity side to partner with us. So any such opportunities are always welcome

14:43 and seen in space. On the manufacturing side we already have apt capacity in place so there

14:49 is no CAPEX required there. Understood. Thank you so much sir for joining us today at NETV

14:56 Profit. We look forward to your chat and best wishes for the fourth quarter. We'll be looking

15:04 forward to our next chat post that. Thank you so much for joining us today. Thank you.

15:07 Thank you.

15:08 Thank you.

15:08 (dramatic music)

15:11 [music]

JBM Auto MD Says Government To Stay Proactive With PM E-Bus Sewa Scheme Despite Election Year | NDTV Profit

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