Welcome to the 81st edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 6 companies across 5 industries.

Financial Services

• YES Bank Limited

FMCG

• Colgate-Palmolive (India)

• Apex Frozen Foods

Logistics

• Allcargo Global Ltd

Automobile

• Olectra Greentech

Packaging

• Uflex

Financial Services

YES Bank Limited | Large Cap | Private Sector Bank

YES Bank is a full-service commercial bank that has transitioned into a stable growth phase following a significant 2020 reconstruction. It focuses on retail, MSME, and corporate banking, supported by strategic global partnerships and a massive digital transaction footprint.

[Concall]

A strategic partnership with Sumitomo Mitsui Banking Corporation has established the Japanese giant as the bank’s largest shareholder. This provides the bank with enhanced global corporate banking capabilities and a more robust risk management framework.

“FY26 was also the year of our alliance with one of the world’s leading financial institutions, SMBC, the Sumitomo Mitsui Banking Corporation. As the largest shareholder in the bank, SMBC opens new doors for growth, bringing deep capabilities in corporate banking, risk management and cross-border business that will strengthen our positioning in the years ahead.”

— Vinay M. Tonse, Managing Director & CEO

Management has successfully raised over $1 billion through foreign currency deposits, significantly outperforming its standard market share. This influx provides the bank with long-term liquidity and helps fulfill regulatory priority sector lending targets more efficiently.

“Regarding FCNR, which is currently being discussed and reported in the media, the amount we have raised is much more than our current market share of deposits. We have raised more than a billion dollars. We also see benefits from FCNR through free reserves and PSL benefits, as well as access to long-term financing. We have a pipeline of half a billion dollars or more in FCNR deposits as of today. We appreciate that only a few days remain for us to continue mobilizing these deposits, but we will see how the momentum develops.”

— Vinay M. Tonse, Managing Director & CEO

The bank is aggressively expanding its physical footprint with a focus on high-potential business clusters across India. These new branches are designed to act as centers for multiple financial products while bringing in low-cost deposits to improve margins.

“In FY26, the bank added 82 new branches, taking the total to 1,334 branches across India. We plan to continue expanding the distribution network, focusing on strategically important business clusters, districts and geographies, while also trying to densify our presence in existing key geographies. This aligns with our broader strategy of leveraging branches as multi-product profit hubs and enhancing low-cost liability mobilization.”

— Vinay M. Tonse, Managing Director & CEO

There is a strategic shift toward retail and MSME loans that offer higher interest rates compared to traditional corporate lending. By using partnerships and digital ecosystems to find these customers, the bank aims to drive higher overall portfolio yields.

“We are now focusing on increasing the share of high-yielding product categories such as personal loans, used vehicles, affordable home loans, unsecured business loans, micro-LAP loans and education loans. Our expansion plan is through co-lending partnerships, ecosystem-based origination, and deeper integration with supply-chain and MSME networks. A key priority is to increase the proportion of the priority-sector-lending segment in the loan book through both organic and inorganic routes.”

— Vinay M. Tonse, Managing Director & CEO

The bank currently processes approximately 33% of all digital transactions in India and is expanding its platform for small businesses. This massive digital scale provides a competitive edge in customer acquisition and embedded finance opportunities.

“Our key priorities include scaling our Iris and Iris Business platforms across retail and MSME ecosystems; strengthening API banking to deepen embedded-finance partnerships; and continuing to build our API capabilities. It is noteworthy that we already have more than 1,500 APIs. We are also looking at end-to-end digital onboarding journeys for both liability and asset products... The bank aims to sustain its leadership in digital payments, processing nearly 1 in every 3 digital transactions in India today, and to continue leveraging digital as a core driver of growth.”

— Vinay M. Tonse, Managing Director & CEO

The bank is implementing AI to speed up credit decisions and lower operating costs while maintaining strict fraud controls. This technological push is expected to improve pricing accuracy and create new ways to generate revenue from current customers.

“While we are looking at faster operations through automation, we also have adequate fraud-detection and risk controls. On one side, we have hyper-personalized customer experiences and quicker and more accurate credit decisions, which lead to lower costs and improved efficiency ratios. At the same time, we are maintaining a strong focus on enhanced cybersecurity and threat monitoring, supported by very strict responsible-AI governance. Through all of this, we are looking at new revenue opportunities and better pricing.”

— Vinay M. Tonse, Managing Director & CEO

FMCG

Colgate-Palmolive (India) | Mid Cap | FMCG

Colgate-Palmolive (India) Limited, a rapidly growing company in the personal care industry, offers a diverse range of products including oral care products like toothpaste and toothbrushes, personal care items such as skin and hair care products, as well as household care products like dishwashing paste. The company has recently expanded its product line to cater to dentists with offerings that include treatments for gingivitis, tooth sensitivity, whitening, fluoride therapy, mouth ulcers, and specialized cleaning.

[Concall]

Only ~19% of India’s toothpaste category is currently premium, substantially below categories such as soaps and shampoos. Management believes this leaves significant room to upgrade consumers.

“Our premiumization percentage as a category, in the toothpaste category, is about 19%, or about a fifth of the category, above the 140 index. If you look at toilet soap and shampoo, those numbers are in the order of magnitude of 2x and 3x. As a community of toothpaste brands, we certainly have an opportunity to do more, and Colgate can be at the forefront of this. Being at the forefront is an exceptionally important pillar for us.”

— Prabha Narasimhan, MD & CEO

Visible White Purple is one of the three brands at the centre of Colgate’s premiumization strategy. Management describes its performance as unprecedented within the Indian business.

“Then we have Colgate Visible White Purple, which is the newest launch. This launch is now a little under 2 years old; it will be 2 years old in the next quarter. It is the single most successful innovation of Colgate-Palmolive India.”

— Prabha Narasimhan, MD & CEO

Colgate says its revamped communication strategy and premium brands are translating into significantly faster growth versus competition.

“The outcome is that we now grow 5x faster than our key competitor in premium toothpaste. The fun, or the magic, does not stop there.”

— Prabha Narasimhan, MD & CEO

Digital channels are becoming increasingly important for Colgate, particularly for premium products and new-product discovery. Management sees e-commerce as structurally beneficial rather than merely another distribution channel.

“Coming to e-commerce, the ability and the desire to win on screen are supercritical for a brand like ours. I am really happy to say—I have said this before, and I am going to say it again—that e-commerce for us is growth-accretive, margin-accretive, premiumization-accretive, and share-accretive. It is a channel that is pure goodness on absolutely every count.”

— Prabha Narasimhan, MD & CEO

Quick commerce is helping Colgate sell premium and differentiated products while improving growth, margins and market share within its digital business.

“As we look at quick commerce, we then say that quick commerce is growth-accretive, margin-accretive, premiumization-accretive, and share-accretive to our e-commerce business. As channels evolve, we are in a really strong position.”

— Prabha Narasimhan, MD & CEO

While e-commerce represents roughly 6% of the overall category, Colgate materially over-indexes the channel. Digital channels are also being used as testing grounds for differentiated products.

“The 6% e-commerce contribution is for the market, not for us. Our contribution is actually in the double digits, just a little above the early double-digit level. That is why it is share-accretive, growth-accretive, and so on. The expansion in e-commerce and quick commerce is largely as I mentioned. We are in a good position and are driving this forward.”

— Prabha Narasimhan, MD & CEO

Colgate remains the challenger in sensitivity but is investing behind Sensitive Active and therapeutics. Early growth from the revamped proposition has been exceptionally strong, albeit from a small base.

“Colgate Sensitive Active has some exceptional technology that works to provide instant relief as well as 24-hour sensitivity protection. A lot of work has been done on repackaging this, as well as on creating demand. As a result, since we started in January this year, we have, on a very small base, been growing 10 times faster than the sensitivity category.”

— Prabha Narasimhan, MD & CEO

The company wants to build a dentist-led therapeutics business around Periogard and other products. It is increasing sampling and the number of oral-care experts visiting dentists.

“We are using this, along with the fact that we have an outstanding regimen of paste, brush, and mouthwash, to ensure that we drive prescriptions. For this, we are making a massive investment in both sampling and increasing our feet on the street, or increasing our oral care experts who visit dentists.”

— Prabha Narasimhan, MD & CEO

Management was unusually candid about its personal-care business. Despite leadership in premium handwash, Palmolive overall has not met expectations.

“Lastly, I come to personal care. I must confess that this has been an area of disappointment. We have not done a great job with Palmolive. There are some green shoots. One of them is that we now lead the premium handwash segment, which is great, but it is a relatively small segment and we have an opportunity to grow it.”

— Prabha Narasimhan, MD & CEO

Premium toothpaste has increased materially as a share of the portfolio. Management says incremental advertising is translating directly into stronger incremental sales.

“We have invested significantly behind our premium business, and you can see that it is up 2.5x in terms of its percentage contribution to overall toothpaste sales. We are seeing a high level of elasticity here: the more we invest, the greater the uptick we are seeing in incremental sales.”

— Jacob, Whole-time Director & CFO

Colgate’s EBITDA margin is around 500 bps above its nearest competitor, giving it room to reinvest. Management has decided to use that cushion to accelerate growth.

“Our EBITDA is 500 basis points higher than that of the nearest competitor, if you look at the chart. This allows us to choose between investing and going faster or continuing to grow at a higher level of profitability. Right now, we are making the call that we will invest more and grow the business faster. We are accelerating.”

— Jacob, Whole-time Director & CFO

Higher A&P spending could pressure near-term operating margins. Colgate says it will prioritise attractive investment opportunities rather than manage the business to a predetermined EBITDA percentage.

“As I mentioned, there would be an upward bias even on the currently reported quarter’s advertising numbers. Therefore, in the short term, we are not going to be constrained by EBITDA levels or target a specific level. If we think spending X more on Total and Visible White will give us Y growth, then we are open to doing that. We are not going to be constrained because we truly believe that this is how we build brands.”

— Jacob, Whole-time Director & CFO

Management says premium demand is no longer restricted to large cities. Digital advertising and e-commerce are allowing Colgate to reach premium consumers even where physical distribution is limited.

“What is interesting is that unlike earlier, when everything in India started in the metros and then percolated downward, what we are seeing now is quite democratic. We are seeing an uptick in premium in tier-2 towns. We are seeing an uptick in premium in rural villages. This is aided by the fact that physical reach no longer needs to be present in a town for consumers to access these benefits. The phone, or digital, allows us to communicate with people almost on a one-to-one basis. We do not have to cover an entire state to reach a particular audience. We can reach the audience that is more likely to buy premium. We are therefore seeing a more democratized desire for premium, which we are then able to fulfill through some of these channels.”

— Prabha Narasimhan, MD & CEO

Apex Frozen Foods | Micro Cap | FMCG

Apex Frozen Foods Limited is a leading exporter of processed L. Vannamei and Black Tiger shrimp, with a strong presence in the value chain. The company has strategically focused on backward integration and value addition, positioning itself as a premier supplier of high-quality shrimp.

[Concall]

Despite a weak Q1 due to labour and logistics disruptions, Apex maintained its FY27 volume target of around 12,000 MT.

“For now, we have estimated the current year’s production at around 12,000 metric tons. We are working in that direction. Q1 was affected mainly by labor shortages during the summer. There were also some supply and maintenance issues related to labor and logistics.

We should be able to achieve that. That is what we expect as of now. We will continue to work toward 12,000 metric tons for the current year, by the end of this year.”

— Management

Beyond FY27, Apex sees FTAs and geographical diversification creating a path towards significantly higher production volumes.

“Going forward, into FY28 and FY29, it would be too early to comment at this time. However, our next target is definitely to reach between 14,000 and 15,000 metric tons, as you asked. We should be looking forward to that with all these improvements in the global scenario relating to the FTAs, subject to no new issues arising regarding trade or related matters.

Hopefully, we should be looking at a diversified market and a diversified market environment. I think we should be moving in that direction toward 15,000 tons.”

— Management

Management says the Q1 volume miss was largely operational rather than demand-driven, with the labour issue now resolved.

“We definitely had issues during FY24 and FY25, and we have been coming out of those issues, particularly in FY26. The main issue was on the labor front. This was unexpected for many industry players during the summer of this year and was a setback.

Otherwise, we should have achieved at least 3,000-plus metric tons of volume in Q1 itself. There was an issue that we had not anticipated. That issue was resolved toward the end of Q1, and there are no issues relating to it now.

There has also been some shortage of raw material supply, but that will be overcome as the new crop comes in, including the second crop from different farmers and producers across the state and the country.”

— Management

War-related disruptions remain one of the biggest near-term risks to profitability, although Apex does not expect a significant margin decline.

“It should continue, but at the same time, as we have also stated previously, farmgate prices are firming up and increasing. We are also seeing some increase in realizations. Overall, margins should remain stable, subject mainly to supply conditions and, more importantly, the war-led disruptions that are still continuing.

We do not know how our freight costs have changed between Q4 of last year and now, but over these 3-4 months, freight costs have increased by more than double. That is another factor we are watching and preparing for. We do expect stabilization, and we do not expect a significant decline in margins.”

— Management

Q1 realization jumped sharply YoY, helped by better dollar pricing, higher value-added sales and rupee depreciation.

“As stated in the beginning, realization per kilo in rupee terms was 930 rupees for the first quarter of FY27, compared with approximately 812 rupees during the first quarter of FY26. There has also been an increase in the dollar-based unit value in general because we are increasing the volume of value-added products or ready-to-eat products, and this has also been supported by the depreciating currency.”

“Yes, we are seeing similar levels as far as realization in rupee terms is concerned. We are expecting similar levels for realization per kilo.”

— Choudhury Karuturi, MD & CFO

Demand visibility appears healthy, with Apex having orders in hand through roughly the first half of Q3.

“Our order book is good. It is currently filled until the middle of Q3. However, the order book position keeps changing because of issues such as equipment-related problems, shipment delays, or supply-related issues. Those factors can also change the order book. Currently, we are in a good position through the middle of Q3.”

— Management

After months of tariff uncertainty last year, the removal of the 150% tariff and finalisation of the 10% tariff have improved buyer confidence.

“Regarding your other question, whether it was related to dumping from Ecuador or to greater certainty regarding tariffs, the 150% tariffs were removed by the US government and the 10% tariff was finalized at the beginning of the year. Buyers in the US have also found greater certainty in doing business, rather than facing the almost 4-5 months of uncertainty during the previous year.

Because of this certainty, and subject to market conditions and business strategy, they accordingly increased their order positions with us, both as an industry and specifically for our company. That is one of the reasons why a large number of US orders were added.”

— Management

The EU is the more important FTA opportunity for Apex, but non-tariff barriers still need to be removed before the full benefit can emerge.

“Moving forward, once the FTA is fully implemented in all aspects—not just in relation to duty and tariff matters, but also through the removal of certain non-tariff barriers, such as the requirement for Indian shrimp consignments to be tested, with 50% of all shipments arriving from India still being tested—we could see even more volume growth in these markets, especially the EU.

The UK FTA is also expected to produce results sometime by the end of this year or early next year, and we will see the results at that time.”

— Management

Management expects the EU FTA around December/January and believes its full impact could start showing thereafter.

“Usually, by the time FTAs are fully implemented, they take a minimum of 1 year. The UK FTA has already been implemented. There are some minor issues, but for our trade, these issues are making things difficult.

Otherwise, we expect the EU FTA, hopefully, by the end of this calendar year, sometime in December or early January. That is what we have been told, and that is the feedback we have received. We should see the benefits.”

“Yes, we should see the full effect of these FTAs, particularly the EU FTA, on which we are placing significant emphasis and for which we have high expectations.”

— Management

Geographic diversification is progressing beyond the US and Europe, although Russia and Australia are taking longer to develop.

“Regarding Russia, that business has not yet taken off in the first quarter. Perhaps by the end of Q2 or in Q3, we should be able to pick it up as far as Russia is concerned.

Australia is still at the discussion stage because the customer conducted certain audits. Hopefully, once the customer clarifies the regulatory requirements, we will be able to proceed. We are waiting for that. So far, we have not taken up business there.

However, we have initiated business with Japan, a market in which we had not operated for the past decade or more than a decade. This has been initiated currently, and we expect it to be reflected in the subsequent quarters of the current fiscal year.”

— Management

The CVD determination expected around December could become an important industry catalyst if the US accepts India’s argument that RoDTEP and Duty Drawback are tax reimbursements rather than subsidies.

“Regarding Countervailing Duty, we will most likely have the announcement toward the end of this year, around December, when we will know whether there will be any changes. We expect a reduction, considering the good response we have received from the Government of India regarding schemes such as Duty Drawback and the RODTEP scheme.

Hopefully, the responses will be positive, and the US government will agree that these schemes are not subsidies but are more in the nature of reimbursement or refunds of taxes and various indirect taxes and levies paid by the sector. We expect to know more toward the end of the year, in December.

ADD was previously 1.35% and is currently 3.44%. It is reviewed every year, so there will be another review next year and we will know more then. I think the final determination on ADD will be around September. We will know around September. We will know about the anti-dumping duty in September and the Countervailing Duty in December.”

— Management

Logistics

Allcargo Global Ltd. | Small Cap | Logistics

Allcargo Global is a leading international shipping and air transport company specializing in less-than-container-load (LCL) consolidation with a 14.5% global market share. The firm operates an asset-light model across 2,400 direct trade lanes and uses a proprietary digital platform for approximately 70% of its export bookings.

[Concall]

Management is insulating the business from external shocks by aggressively cutting costs through AI automation and offshoring. This focus on internal efficiency and trade lane optimization is intended to protect margins even if global trade remains flat.

“We are using opportunities in technology-led automation, replacing some of the work with agentic AI, and continuing our drive to have more and more resources based in lower-cost geographies. This is made possible by our continued focus and investment in creating one single system for finance, HR, and operations across the globe. That is the trend that continues for us on the business side. As we move forward, we are not taking into account any significant improvements in the economic environment as we prepare our business strategy. Some of these geopolitical events are completely unpredictable. Rather than pivoting any of our plans to an outcome driven by the end of the Middle East conflict or the end of some of the other conflicts, our focus entirely remains on operating in the environment as the business opportunity presents itself and staying focused on improving our efficiency. We have brought down our loss-making trade lanes and focused on container utilization. All of these factors contribute to improved gross profit per unit of cargo that we carry.”

— Ravi Jakhar, Director, Strategy and Group CFO

Current LCL volumes are 10% below their peak, but the company is still outperforming a declining industry by several percentage points. Management expects LCL to return to its long-term trend of growing at twice the rate of the broader container market.

“In terms of growth, if you observe the business, you would find that it had steadily grown in LCL as well. However, over the last 2 years, there has been a contraction in volumes. In the most recent period, as I mentioned, over the last 6 months, the Middle East crisis has further had a negative impact on volumes. Where we stand today, we are almost 10% below our LCL volumes of a couple of years ago. The last 2 years have been quite poor for management, and actual industry volumes may have declined by almost 13-14%, because we would have outperformed by approximately 3-4%. The decline may have been slightly more than that on the overall volume side. I would say that the decline in volumes has been across both LCL and FCL over the recent couple of years. However, because we have a dominant market position in LCL, that impact becomes immediately visible in our P&L. In general, the rule of thumb is that the LCL business tends to grow at roughly 2x the FCL growth rate. This has been demonstrated over the last 10 years and is likely to remain true over the next 5-10 years as well.”

— Management, Management

The company is evolving from a simple port-to-port shipper to a provider of high-value, end-to-end delivery services. This shift to door-to-door services is a primary driver of the structural improvement in profit per unit of cargo.

“In terms of absolute gross profit, if you observe the last 7-8 years, we have improved our yield considerably, which is the gross profit per unit of volume that we handle. We have achieved this through a multitude of factors. Approximately 10 years ago, we were largely doing ocean port-to-port business. We have moved into significantly more door deliveries. We are offering first-mile and last-mile connectivity on many of the cargoes that we handle. We have created scale that enables us to negotiate better terms with warehouse contractors where we operate for consolidating and deconsolidating cargo and de-stuffing boxes. We have undertaken significant network optimization. Historically, a significant percentage of the business may have been in loss-making trade lanes because utilization was not optimal. We have used a great deal of technology, processes, and practices to significantly improve gross profit per unit of cargo that we handle.”

— Ravi Jakhar, Director, Strategy and Group CFO

The company is shifting its strategy from aggressive acquisitions to purely organic growth. This pivot should reassure investors that capital will be used to improve current operations rather than funding expensive new buyouts.

“In terms of acquisitions, we have made strategic acquisitions over the years to enter new products or new markets. At this point, we do not foresee a need to enter any further markets. We are present in all the relevant markets and in all the products that we want to be in. With the network strength that we have built over the last couple of years, we have grown more organically. Even in new markets, we enter by hiring new teams, both for new products and for entering new markets. Therefore, at least in the near term, the strategy is to grow by investing in people and not by buying businesses.”

— Ravi Jakhar, Director, Strategy and Group CFO

Allcargo aims to substantially lower its net debt within the next nine months through working capital improvements and property sales. This debt reduction is expected to further strengthen the company’s financial position and credit profile.

“We work with a single global bank in many countries, where cash sitting on the books also acts as a cover against this debt. Therefore, you can look at the cash balance against the debt. Almost 40% or slightly more of this amount would also be cash sitting on the books. Therefore, net debt is effectively 60% of the number you mentioned. Further, we intend to reduce that significantly over the next 2-3 quarters through, first, a focus on reducing working capital on the balance sheet; second, some non-core asset divestments, including real estate that we may still own but do not need to own; and third, a few other measures to improve working capital. These initiatives should see the net debt number—which I would identify as the more relevant number, looking at debt net of cash—come down significantly over the next 2-3 quarters.”

— Ravi Jakhar, Director, Strategy and Group CFO

The company identified $10-15 million in non-core real estate assets that it plans to liquidate. These proceeds will likely be used to further reduce consolidated net debt, which currently stands at 570 crore.

“Consolidated debt was approximately 942 crore at the end of the March-June quarter. Net debt was approximately 570 crore. [Regarding selling non-core assets] These would be some of the warehousing and office assets that we own. Combined, as a very broad ballpark number, they could be worth approximately 10-15 million dollars.”

— Stephen Dunn / Ravi Jakhar, Global CFO / Director, Strategy

Automobile

Olectra Greentech | Small Cap | Automobile

Olectra Greentech Limited, formerly known as Goldstone Infratech Limited, is a leading Public Limited Company in India specializing in the production of composite polymer insulators and electrical buses. With a strong focus on innovative technologies and high standards, the company has emerged as the top manufacturer and supplier of Composite Insulators in India, known for their global utility and technological advancement.

[Concall]

Olectra expects a meaningful acceleration in production through FY27 after consistently producing around 350 buses in each of the previous four quarters.

“Even if you take the 2,000 vehicles, the run rate in the coming quarters that we are discussing is 500 to 600 vehicles. The exit quarter, when we ramp up and have our own buses in the last quarter, will add to that.

To explain further, we are producing current-generation buses for current orders. We have consistently produced about 350 buses in each of the last 4 quarters. We expect to produce close to 500 this quarter, improving to 600 and 700 in the last quarter. That is what we are looking at.”

— Management

Beyond its existing 8,000-bus backlog, Olectra has won 1,085 buses in Telangana and emerged L1 for another 155 buses in Rajasthan on its next-generation platform.

“We already have an order book of about 8,000 vehicles. Last time, we won a tender for 1,085 vehicles in Telangana as part of the CESL tender.

Recently, we became L1 in Rajasthan. Today, we received the letter asking us to attend discussions. It is an outright order for 155 buses, and there were about 4 to 5 participants. I am happy to say that we became L1. This clearly demonstrates Olectra’s product quality as well as its competitive cost in the market for outright sales.

This will be our new 9-meter platform, which we are developing for the next generation. As I said, it will be ready by the last quarter of this financial year.

We already have 1,085 plus 155 vehicles under discussion, both for the new platform. For the existing platform, we have about 8,000 vehicles, which will be delivered over the next 2 years.”

— Mahesh Babu, Managing Director

Management says deliveries will be matched with depot and market readiness rather than aggressively producing against the large order book and locking up working capital.

“The market has to absorb the vehicles. If you look at the last full year, around 5,400 vehicles were registered. If the market is 5,400 vehicles, delivering 8,000 vehicles ourselves would not be prudent or appropriate. It would not be right for us to manufacture the vehicles and keep them in inventory because our working capital would be locked up.

We will have to time production and the supply chain in such a way that the market is able to absorb what we produce.

Similarly, if you look at the first quarter, about 1,400 vehicles were registered. Therefore, we will have to determine how to deliver based on market readiness, rather than producing aggressively. Aggressive production would not generate revenue; the vehicles would simply remain in our inventory if the depots were not ready. We have heard that this has happened with many competitors.”

— Management

Management highlighted working-capital discipline as a differentiator, saying it avoids keeping finished buses waiting for months for depot readiness or flag-offs.

“I would say that Olectra is one of the most efficient companies in terms of working capital management. As soon as we produce a vehicle, it is deployed within 30 days, or at most between 30 and 60 days, into the customer’s operations.

There are competitors holding vehicles for 3 months for flagging off and depot readiness, and they can afford to lock up their working capital.

I would say, rest assured, we have been number one since inception, and as of today we remain number one in terms of registrations. We are delivering the highest number of vehicles in this segment into the market.”

— Management

Management expects India’s e-bus market to reach roughly 8,000 units in FY27 and sees another substantial increase next year.

“We expect total FY27 TIV to be about 8,000 buses, out of which we expect to deliver about 2,000 to 2,500 buses in this financial year.

Next year, a CAGR of at least 30% to 50% is expected, depending on what happens in the market. That is our prediction regarding bus adoption.”

— Management

Management believes headline e-bus penetration understates adoption in Olectra’s core addressable segments, particularly state transport undertakings and 9–12 metre buses.

“The bus segment has reached a reasonable point at 7%. This 7% is very critical.

Even if you look at the overall bus market, the 7% is an overall figure. If you look only at 9-meter and 12-meter buses, out of 7,800 buses, almost 1,400-1,500 buses represent EV adoption. Therefore, adoption in that segment is almost 20%.

If you look at STUs, out of the 2,000 buses that STUs ordered or registered in the first quarter, 1,400 were electric. That is substantially close to 70%. Therefore, STU EV adoption in buses is about 70%.

For 9-meter and 12-meter buses, it is about 19% to 20%. Overall, it is about 6%.”

— Management

Olectra expects its upcoming vehicles to comply with PM E-Drive and PM e-Bus Sewa localisation requirements, with almost the entire vehicle sourced locally.

“The new-generation products will meet the PM E-Drive and PM SEVA requirements. All the aggregates will be local, and all the remaining parts except the cell will also be local.

At the current level, there is a transition taking place between the old generation and the new generation. I do not have the exact number for the current level, but apart from the aggregates, many of the components are local.”

— Management

Olectra explicitly expects better margins on its next-generation vehicles once localisation increases.

“Yes. In our new-generation products, when everything is local, we will have better margins than we do today. That is expected.

I cannot say how much we will realize, but the margins will definitely be better. You will see this from Q4 of this financial year onward.”

— Management

Management expects Q1’s margin pressure to ease but is stopping short of promising an immediate return to historical 14–15% levels because exports and product mix remain uncertain.

“We also wish, like you, that margins would return to the earlier levels. However, we do not expect the Q1 impact to continue. Margins will definitely improve.

Our wish, along with yours, is to return to the same margins. Our intention is to get back to those levels, but this will happen over a period of time because we will have to mitigate the risk by looking beyond exports, determining how to address it, assessing the market, and working accordingly.

What we are saying is that margins will lie between 12% and 15% on a given day, and that is the nature of the market. In fact, if you look at the auto industry, most companies have margins much lower than this, at around 10% to 12%.

While we continue to enjoy the higher percentage, we need to determine how to maintain it. That is the intention of management.”

— Management

The company expects the addressable EV truck market to reach 1,500–2,000 vehicles next year and is targeting a meaningful share immediately after launching its own platform.

“The 3 lakh 30,000 figure you mentioned is for diesel trucks. If you look at EV trucks, last year there were about 800 vehicles.

In Q1 FY27, EV truck registrations were about 270 vehicles. There is a good level of growth, and the figure will reach close to {? 1,000 plus vehicles ?}, or 1,200-plus vehicles, in this financial year.

We expect the addressable market to be 1,500 to 2,000 vehicles in the next financial year. Out of that, in the first year, we will target at least a 20% to 25% market share and then begin growing from there.”

— Management

Olectra plans to use FY28 to explore overseas markets, with its upcoming vehicles already being configured to meet export requirements.

“Our new-generation platform vehicles, both buses and trucks, are being prepared for the export market as well. That is one of the reasons we are not simply localizing components but are developing new-generation products.

We will have the potential to export, and we have already started configuring the vehicles to meet export requirements when they are introduced in Q4 of this financial year.

The next financial year will be our opportunity to explore participation in export markets and take our vehicles overseas. So, yes, the answer to your question is yes. With our new-generation products, we will be ready by the end of this financial year.”

— Management

The insulator business is becoming a second growth engine, with Olectra adding new products and capacity rather than relying only on its existing polymer-insulator portfolio.

“Our intention is to achieve 5x growth in Olectra’s energy division over the next 3 years. That is the plan, and the team is working toward making it happen. This will involve both new products and capacity enhancement.

Capacity expansion at the plant has already started. We will have another shed of a similar size to the one we have today, with all the equipment in the pipeline. This will enhance capacity to support this vision over the next 3 years.”

— Management

Management views the energy business as strategically as important as mobility and sees India’s transmission-grid upgrades as a major structural opportunity.

“While there are many predictions, our internal study indicates strong growth in the energy or insulator division. As you know, India is upgrading its power lines, and many of them are being upgraded to 800 kV lines.

Therefore, there is significant potential. As of now, we have close to 300 crore worth of orders in hand, and we are continuing to receive inquiries and deployments over time.

I strongly believe that with the new products we are developing, we will achieve 5x revenue in the insulator division over 3 years, as we have already stated. That is the objective we will work toward.

I strongly believe that we will maintain a market share of more than 30% in this segment. Therefore, we are treating the insulator division as equally important as the mobility division in terms of growth, investment, and new products.”

— Management

Polymer-insulator raw materials had surged 40–70% because of the war and supply constraints, but management says a significant part of that increase has already reversed.

“We faced a challenge from the increase in raw material costs. The prices of many raw materials used in polymer insulators increased by between 40% and 70%. Hence, we faced a margin challenge this quarter due to the war, higher petroleum prices, and supply constraints during this period.

That situation has now eased. Prices have already fallen by close to 40%; out of the 70% increase, 40% has fallen back. Therefore, if there are no further disruptions, we expect average prices from now on to return closer to the levels that existed before the war. Accordingly, improvements are expected in the coming quarters.”

— Management

Packaging

Uflex | Small Cap | Packaging

Uflex Limited is a leading Indian Multinational known for manufacturing and selling flexible packaging products globally. With a focus on quality innovation, it provides complete packaging solutions that help preserve freshness and extend shelf life of food products. Its reputation in the industry, both in India and overseas, positions it as a prominent name among printing and packaging companies.

[Concall]

Despite geopolitical uncertainty, Uflex gave unusually explicit FY27 guidance, expecting both revenue and EBITDA to grow around 35% over FY26.

“Generally, we should not give guidance because guidance is very difficult in today’s market scenario. Things change very fast because of the geopolitical situation. But since you are asking a specific question, and to respect you as an investor, I think we are expecting 35% growth in our topline in this financial year. Similarly, we expect EBITDA to show the same growth in this financial year compared to the last financial year.”

— Management

Uflex believes the improvement in margins is structural, supported by past capex and a growing contribution from value-added products.

“At the beginning of the call, we said that these margins are very sustainable going forward—not just sustainable for this year, but going forward for the next 3 years. Let me add that the 15.5% margin is something we are working on. The guidance we have given for FY27 is 30% topline growth and 30% bottom-line growth. We will have similar growth next year as well. You can see what kind of margin we will be able to generate going forward.

These are very strong margins that can be achieved with the kind of capex we have undertaken and the focus we now have on value-added products.”

— Management

Film realisations have risen sharply since the West Asia conflict began, with finished-product prices rising faster than raw-material costs.

“Giving you a very specific answer on price would be difficult, but I can tell you that price realization is up 30% compared to when the war started in West Asia. Our BOPET and BOPP prices have gone up. To be specific, BOPP prices have gone up by 25% and BOPET prices have gone up by almost 30-35% from the February 2026 level to now. BOPP is 25% higher, while BOPET is around 35% higher.”

— Management

Management believes the spread between raw-material costs and finished-film pricing can be protected even if geopolitical conditions eventually normalise.

“Prices are quite stable as of now, and we do not see any major correction in prices. However, these are global situations that evolve every day. As long as crude remains high and this crisis continues in West Asia, we see prices remaining in the vicinity of their current levels. But if everything normalizes, we may see some correction in prices. Our raw material sourcing and finished selling prices will have the same margin that we have now.

So we are not very concerned about pricing. We are concerned that whatever margins we make, we should continue to hold those margins. We are confident that we will hold those margins throughout the year.”

— Arun Kumar Sharma, President – Finance and Accounts & CFO

Despite aggressive duty-free Indonesian imports hurting Indian volumes, Uflex expects demand growth and higher-value products to revive the segment.

“From Q3 onwards, you will see aseptic coming back on track. It was somewhat slow this quarter in terms of volume, but not in terms of price. It will pick up next quarter. The packaging industry is more closely linked to consumer growth and FMCG growth in India, which we are seeing improve significantly.

You will see aseptic packaging becoming a major growth driver for the company going forward because it improves the quality of the product, improves the product’s shelf life, and improves the aesthetic appeal of the product. All these factors will help. We have an installed capacity of almost 24 billion packs, and I think we will be using a significant portion of that capacity by the end of the year.”

— Arun Kumar Sharma, President – Finance and Accounts & CFO

Existing domestic capacity itself has considerable headroom, particularly in higher-value metallised and ultra-high-barrier films.

“There are a lot of opportunities. If you look at our utilization graph this year, domestic utilization is currently only 70-73%. In addition, we have a lot of unutilized specialty segment films, such as metallized films and ultra-high-barrier film, where we have considerable opportunity. We are currently utilizing around 30-40% of that capacity. Those areas will therefore come up quite strongly.”

— Surujit Pal, Vice President & Head of Investor Relations

Uflex sees international manufacturing as structurally more profitable because overseas customers allow easier cost pass-through and significantly higher realisations.

“We will always generate higher margins in the overseas business. Overseas business will always give a higher margin because the price at which we sell the product in overseas markets is, if I can give you a ballpark figure, almost 2.5 times the price at which we sell in India. In India, however, the cost base is also lower. Overseas, the cost base is higher. Despite the higher cost in overseas markets, we receive better price realization and better margins there because customers..are willing to pay that price. In India, we have to be very conscious of competition and of the pricing that customers are willing to pay.”

— Surujit Pal, Vice President & Head of Investor Relations

Geographic diversification is central to Uflex’s strategy for reducing exposure to trade disruptions, shipping constraints and geopolitical shocks.

“We want to be near our customers. Wherever we have a large market, we cater to the Middle East through our Dubai facility. In the US and other places, we cater through our Mexico facility. In Europe, we cater through our Poland and Hungary facilities, and in Nigeria, we cater to African customers.

We are trying to be near our customers in all these markets so that the geopolitical events taking place, and the difficulty of shipping from one place to another, do not affect us. We are de-risking our topline model in such a way that at least 75% of our turnover should come from being near to our customers. That is the policy we have adopted.”

— Arun Kumar Sharma, President – Finance and Accounts & CFO

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Quotes in this newsletter were curated by Meher and Srusti.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 80th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 5 companies across 4 industries along with a keynote address by Sanjay Malhotra, Governor, RBI.

Regulator

• Reserve Bank Of India

Financial Services

• Canara Bank

Tourism & Hospitality

• Indian Railway Catering and Tourism Corporation Limited

Healthcare

• Apollo Hospitals Enterprise Limited

• Wockhardt Limited

Chemicals

• Solar Industries India Limited

Regulator

RBI Governor |Winning in the AI Era: The New Playbook for Indian Banks

The Reserve Bank of India (RBI) is India’s central bank and primary financial regulator. In his FIBAC 2026 address, Governor Sanjay Malhotra outlines a strategic playbook for banks navigating the AI era. He highlights AI’s potential to transform credit underwriting, operational efficiency, and fraud defence, while warning against risks like model opacity, algorithmic bias, vendor dependence, and lost human oversight. The speech emphasises a principles-based, proportionate approach to governing AI adoption across the financial sector.

[Reference]

The RBI views artificial intelligence as the most significant structural shift for Indian banking since the liberalisation of the 1990s. Investors should recognise that AI is not just a technology project but a fundamental change in how banks will evaluate risk and price capital.

“The theme of the conference – Artificial Intelligence - has been well chosen. It is apt and timely. It is a theme that, I believe, will define this decade of Indian banking as decisively as liberalisation defined the 1990s and digitalisation defined the 2010s. I also like the use of the word “playbook”. Artificial Intelligence is not a single technology to be procured, nor a project to be completed. It is a new way of doing business, of running a bank. It is a shift in how we evaluate risk, serve customers, price capital, and organise institutions. Many banks in this room are already deploying AI, and many more are considering it. The only question is whether you shape the AI journey with intent, or you let it shape you by default.”

— Shri Sanjay Malhotra, Governor

The regulator is on track to implement Basel III guidelines by April 2027 and has finalised several frameworks for credit risk and dividends. This provides a clear regulatory roadmap for banks to align their capital and operational policies with international standards.

“On strengthening financial stability, we have taken a number of measures. We have finalised the standardised approach for credit risk capital, ECL framework, Effective Interest Rate (EIR) related changes in investment guidelines, prudential norms on project finance, related party transactions, dividends policy, guidelines on Net Open Position (NOP) among others. We are well on target to implement all applicable Basel III guidelines with effect from April 1, 2027 on a calibrated glide path. The regulatory architecture is further bolstered by our enhanced supervision, especially with regard to technology risk.”

— Shri Sanjay Malhotra, Governor

AI can significantly lower the cost of credit delivery by using alternative data like GST filings to reach borrowers who lack traditional financial histories. This transition allows for faster identification of financial stress and opens new growth segments in retail and MSME lending.

“First, AI changes the economics of credit delivery fundamentally. Traditional underwriting relies on financial history – precisely the data that is thin or absent for a new-to-credit borrower, a gig worker, or a small enterprise without formal books. AI models, trained on alternative data – cash flows, GST filings, utility payments, digital footprints – can extend the frontier of “bankable” India considerably further than manual underwriting ever could, at a fraction of the marginal cost per loan. At the same time, AI-enhanced credit risk models, liquidity forecasting, and scenario analysis allow banks – and, indeed, us, as the regulator – to see emerging stress earlier than lagging financial statements permit.”

— Shri Sanjay Malhotra, Governor

The RBI expects AI to drive down cost-to-income ratios by automating routine tasks like document processing and regulatory reporting. This operational efficiency is critical for improving the long-term profitability and productivity of the Indian banking sector.

“Fourth, it can enhance operational efficiency. There is scope to reduce cost-to-income ratios or intermediation costs in India. Effective adoption of AI can significantly improve the productivity of Indian banks across operations, sales and customer service, and credit and collections. Document processing, reconciliation, and internal audit sampling are all ripe for AI-assisted automation, freeing skilled staff for judgment-intensive work. It can automate transaction reporting and regulatory return preparation, reducing both compliance cost and the operational risk of manual error.”

— Shri Sanjay Malhotra, Governor

Traditional security systems are no longer sufficient to stop modern frauds that happen instantly via digital APIs. Real-time machine learning is now required to identify transaction anomalies before losses actually occur.

“Fifth, it is AI that can beat AI-delivered fraud. Fraud today moves at the speed of an API call. A rules-based fraud engine, however well designed, is perpetually one step behind a fraudster who adapts more frequently. It is only machine-learning models which continuously learn from transaction patterns and can identify anomalies in real time rather than after the loss has crystallised.”

— Shri Sanjay Malhotra, Governor

The RBI is concerned that complex AI models are often unable to explain the reasoning behind credit rejections. This lack of transparency poses a risk to accountability and could lead to new regulatory requirements for explainable AI models.

“The first risk is the “black box” problem. Many advanced AI models – particularly deep learning and generative systems – do not readily explain their own reasoning. When an AI system recommends against extending credit to a small business, both the borrower and the regulator are entitled to know why. Opacity is not merely an inconvenience; it strikes at the heart of accountability. It makes it exceedingly difficult for auditors, boards, and the Reserve Bank to be confident that a model is doing what it was designed to do.”

— Shri Sanjay Malhotra, Governor

Reliance on a small number of AI vendors or models could lead to systemic failures if an error occurs across multiple banks simultaneously. Such “herding” behaviour in trading models could worsen market volatility during periods of financial stress.

“The third risk is concentration and herding. If a handful of foundation models, or a handful of technology vendors, come to underpin credit and trading decisions across much of the banking system, an error, a bias, or a vulnerability in that shared infrastructure ceases to be one bank’s problem and becomes a systemic one. AI-driven trading models, if too similar across institutions, can synchronise behaviour in stressed markets and amplify volatility rather than dampen it – a risk this Reserve Bank watches with particular care.”

— Shri Sanjay Malhotra, Governor

Management cannot use algorithmic decisions to avoid accountability for poor lending or operational outcomes. Banks must maintain human oversight to override automated systems, ensuring that legal and ethical responsibility stays with the institution.

“The seventh – perhaps the most important – is the erosion of human judgment and accountability. No matter how sophisticated the model, the responsibility for a bank’s decisions rests with the bank, not with its algorithm. “The model decided” can never be an acceptable answer to a customer, an auditor, or the Reserve Bank. Meaningful human oversight – the ability to explain, to intervene, and, where necessary, to override – must remain a design principle, not an afterthought.”

— Shri Sanjay Malhotra, Governor

The RBI is directing banks to immediately establish formal governance policies and regular stress-testing for their AI systems. This shift indicates that AI risk will now be supervised with the same intensity as traditional credit and market risks.

“Establish board-approved AI governance policies, with clear accountability for outcomes, not merely for technology procurement. Build the capacity to explain AI-driven decisions that materially affect a customer, particularly in lending and fraud outcomes. Red-team and stress-test AI systems before deployment and periodically thereafter, just as you would stress-test any other material risk. Preserve meaningful human oversight at every point where an AI system’s error could cause material harm to a customer or to financial stability.”

— Shri Sanjay Malhotra, Governor

Financial Services

Canara Bank | Large Cap | Financial Services

Canara Bank is one of India’s largest public sector banks, providing a wide range of retail and corporate banking services. It focuses on maintaining strong asset quality while strategically balancing its credit-deposit ratio to drive margin growth.

[Reference]

The bank moved its credit-to-deposit ratio from 75% to 80% to earn better yields on loans compared to investments. Investors should watch if they can push this further toward 82% without compromising liquidity.

“So yes, our CD ratio was down a little; it was at 75%. You earn less yield on investments, around 6.90%, whereas the yield on advances is at 8%. So it was obvious we wanted to grow on the advances side, though in a calibrated manner. We grew very calibratedly and kept underwriting standards in mind; we are very mindful of that as well. As of now, we are at an 80% CD ratio, and we can still grow one or two percentage points here and there, but we are focusing much more on deposits.”

— Brajesh Kumar Singh, MD & CEO

The bank plans to replace expensive bulk deposits with retail deposits to support its upward margin trajectory. Successfully reducing reliance on these high-cost funds will be a key driver for profitability in coming quarters.

“The trajectory is on the positive side. Yes, we have some leeway. We had high-cost bulk deposits, or dependency on bulk was a little on the higher side. So we will be running down some of those high-cost bulk deposits and replacing them. It will not be entirely possible to replace them with CASA, but gradually we will replace them with retail deposits, be it retail term or retail CASA.”

— Brajesh Kumar Singh, MD & CEO

The bank has already exceeded its $1.5 billion target for FCNR deposits, reaching over $2 billion. This successful fundraise provides a cheaper source of foreign currency funding during a period of high domestic deposit competition.

“We gave guidance that we would be garnering $2.3 billion to $2.5 billion across three routes: FCNR(B), ECB, and OFCB. We will be targeting ECB and OFCB in October, November, and December, considering this FCNR(B) dispensation is only up to September. Our target for FCNR(B) was $1.5 billion, but against that, we have already raised more than $2 billion.”

— Brajesh Kumar Singh, MD & CEO

FCNR deposits are replacing 7% bulk rates with much cheaper 1.5% effective costs due to RBI swaps. The exemption from regulatory reserve requirements on these funds adds an extra 22 to 23 basis points of cost savings.

“It is helping us not directly on the margin count, but on repricing some of our high-cost bulk rates. Last month, whatever we were repricing was above 7%, whereas here we are offering 6.5%. But that also comes with the concessional swap, the ₹3 swap offered by the Reserve Bank of India, which costs somewhere around 3%. So we are only paying around 1.5% there, saving about 1.5%. Again, this does not attract CRR and SLR, saving another 22 to 23 basis points. So it is definitely helping us.”

— Brajesh Kumar Singh, MD & CEO

Management expects to exceed its 12% loan growth guidance despite a high base from emergency credit schemes. This optimism suggests strong underlying demand across business segments and potential for earnings surprises.

“The guidance is there, but we will certainly better it. In the first quarter, there was help from the emergency line of credit dispensation, which helped MSMEs. Furthermore, due to the West Asia crisis, there was higher utilization of overseas lines of credit, and our dollar assets also got repriced. It was a combination of everything taken in perspective, but we will certainly better the 12% guidance we have given.”

— Brajesh Kumar Singh, MD & CEO

Higher yields in the bond market are driving corporate borrowers back to banks for their funding needs. Demand is particularly robust in sectors like green energy and data centres, providing fresh growth avenues.

“There is a lag between the deposit growth rate and advances growth rate, so some of this money will bridge that gap. Yields have hardened in the debt market, making it costlier for corporates, so they are turning to banks. We will find good opportunities there. In retail as well, we are growing very well in the RAM (Retail, Agriculture, MSME) sector. Everywhere there is demand: power, energy storage, green energy, and data centres. A lot of demand is coming from these emerging sectors as well.”

— Brajesh Kumar Singh, MD & CEO

Beyond capital needs, the bank is raising overseas funds to take advantage of concessional swaps and support rupee stability. These strategic borrowings are expected to lower the bank’s overall cost of liabilities.

“We are not doing this purely for margins or augmenting our capital base; we have other motivations. We want dollar inflows into the country to help stabilise the rupee. Additionally, there are cost benefits because the swap is supported by the RBI; we get a concessional swap on ECBs as well. So we will register cost advantages on that count.”

— Brajesh Kumar Singh, MD & CEO

The bank is raising its targets for overseas foreign currency borrowings from the initial $1.1 billion mark. This aggressive pursuit of dollar funding highlights a proactive approach to managing the current tight liquidity environment.

“Just like everywhere else where we are bettering our guidance, we initially thought of $1 billion to $1.1 billion, but I think we will be bettering that target as well.”

— Brajesh Kumar Singh, MD & CEO

Tourism & Hospitality

Indian Railway Catering and Tourism Corporation Limited | Mid Cap | Hospitality

IRCTC is the state-owned monopoly providing online ticket booking, catering, and travel services for the Indian Railways network. The company also produces Rail Neer bottled water and manages diverse tourism packages across the country.

[Reference]

Management reported a year-on-year revenue increase of 210 crore rupees, primarily driven by growth in the catering segment. This data provides a baseline for understanding which business units are currently contributing the most to the company’s top-line expansion.

“Overall, we had revenue of ₹1,370 crore versus ₹1,160 crore in the corresponding quarter of FY25. To talk about the revenue mix first: out of this ₹1,370 crore, ₹732 crore came from catering, ₹109 crore from Rail Neer, ₹361 crore from internet ticketing, and ₹168 crore from tourism. So there was a delta of ₹210 crore between ₹1,370 crore and ₹1,160 crore.”

— Rahul Himalian, Chairman and Managing Director

The company explained that because 86% of its incremental revenue growth came from low-margin catering, overall profitability did not grow as fast as sales. Investors should note that the business mix is shifting toward lower-margin services, which puts pressure on the consolidated bottom line.

“Catering has a conventional margin of around 10% to 12%. Internet ticketing has around 80% to 85%, tourism has 14% to 15%, and Rail Neer has 14% to 15%. So, ₹181 crore out of the ₹210 crore growth came from catering, which enjoys a margin of only 10% to 12% and forms around 54% of total revenue. That was the primary reason for our overall profits not scaling up—number one.”

— Rahul Himalian, Chairman and Managing Director

Geopolitical tensions in West Asia led to higher costs for plastic resins used in the Rail Neer bottled water segment. This highlights how global supply chain disruptions and commodity price volatility can directly erode the profitability of the company’s manufacturing operations.

“Number two, the West Asia crisis impacted the Rail Neer segment largely because the cost of raw materials, such as the resins which account for the preform caps and shrink rolls, increased the cost from ₹55 crore to ₹61 crore—that is ₹6 crore plus.”

— Rahul Himalian, Chairman and Managing Director

A policy change to increase gratuity and retirement benefits resulted in a one-time 20 crore expense during the quarter. This is a non-recurring cost, meaning earnings in future quarters should normalise once this impact is cycled through.

“Then, there was an HR decision we took where the gratuity limit was increased from ₹20 lakh to ₹25 lakh, along with post-retirement settlement benefits. This impacted around ₹20 crore, of which ₹10 crore was booked on catering itself since catering forms around 54% of revenue.”

— Rahul Himalian, Chairman and Managing Director

Operational costs were affected by the launch of several pilot train projects that were not present in the previous year’s comparison. The financial drag from these programs is expected to diminish over the coming quarters as the number of active pilot trains is reduced.

“Lastly, the Proof of Concept (POC) trains, which were not there in Q1 of FY25, had six trains, causing around a ₹4.7 crore impact. In Q2 of FY26, there will be around four trains, and two trains in Q3.”

— Rahul Himalian, Chairman and Managing Director

Management guided for a return to 30% or higher EBITDA margins as one-off headwinds subside and new high-speed trains are introduced. This guidance provides a clear profitability target for investors to track as the company attempts to recover from recent margin compression.

“So these were the retrograde factors which caused our EBITDA margin to come down. The West Asia crisis has stabilised, the HR impact will not repeat, and there is a tapering in the POC train impact. With all these factors, and with the introduction of new Vande Bharat sleeper trains, we will try to maintain an EBITDA margin of 30% plus.”

— Rahul Himalian, Chairman and Managing Director

A major overhaul of the ticketing platform is nearly complete, with a full rollout scheduled for the current quarter. A successful launch is critical for maintaining the company’s dominance in the digital ticketing space and improving the user transaction experience.

“As far as the new website is concerned, the beta version was launched on 15th July. Now, around 80% to 85% of the utilities and interface have been developed on that website. Anytime—maybe 15 days down the line or within this quarter—we will be able to come up with the full-fledged version of the website.”

— Rahul Himalian, Chairman and Managing Director

The new website will prioritise speed and ease of use by removing intrusive ads and secondary verification steps. While this improves the customer experience, investors should monitor if the loss of advertising real estate has any material impact on non-fare revenue.

“It features no advertisements, no CAPTCHAs, no pop-ups, and offers a seamless booking experience with faster ticket booking speeds for the user.”

— Rahul Himalian, Chairman and Managing Director

Healthcare

Apollo Hospitals Enterprise Limited | Large Cap | Healthcare

Apollo Hospitals Enterprise Limited is a leading integrated healthcare provider in India, operating a vast network of hospitals, pharmacies, and primary care clinics. The company specialises in high-end tertiary and quaternary care while expanding its digital presence through the Apollo 24/7 platform.

[Reference]

Apollo’s revenue growth is being fueled by a healthy mix of higher patient volumes and better pricing power. This indicates that the business is not just relying on price hikes but is successfully attracting more patients.

“Speaking of the drivers of growth in the hospital space, we had a revenue of ₹3,562 crore, representing a growth of 22%. Of this, 13% is volume growth. In terms of occupancy, we grew by 10%. There was an ARPOB growth of about 11%, driven by the insurance sector, which forms 46% of our mix. The rest of it was price”.

— Suneeta Reddy, Managing Director

Management sees a clear path to maintaining over 20% growth by combining steady performance from mature hospitals with new capacity. The target occupancy of 74% provides a benchmark for judging how well the company uses its assets.

“74% is the sustainable occupancy level. Going forward, established units will deliver 12% to 13% growth, while another 7% will come from new units, ensuring that overall growth remains above 20%.”

— Suneeta Reddy, Managing Director

Apollo plans a massive ₹8,000 crore expansion but intends to pay for it mostly using the cash it generates internally. This low reliance on debt for such a large project reduces financial risk for shareholders.

“Going forward, the capex will be around ₹8,000 crore. Currently, we have strong free cash flows and cash reserves in the bank. We generate close to ₹800 crore of free cash flow annually, which, along with existing reserves, will fund most of it. We may raise a small amount of debt towards the end of the expansion cycle.”

— Suneeta Reddy, Managing Director

New facilities are expected to start making a profit relatively quickly, with the major Gurugram site hitting break-even in just one year. Fast turnaround times for new hospitals are critical for maintaining overall return on capital.

“Sarjapur will break even faster. For Gurugram, we expect to achieve EBITDA break-even in 12 months.”

— Suneeta Reddy, Managing Director

The return of international medical tourism is providing a high-margin boost to the business. Management expects new infrastructure, like the Navi Mumbai airport and Gurugram hospital, to further accelerate this lucrative segment.

“We saw 24% revenue growth from international patients. Going forward, I expect this momentum to increase—especially with the opening of our hospital in Gurugram, where there is potential for international patients to contribute up to 30% of revenue. Additionally, the opening of the new airport in Navi Mumbai will boost international patient inflows. All in all, the outlook is strong, and we expect to sustain this momentum.”

— Suneeta Reddy, Managing Director

Apollo is focused on stripping out structural costs to push its total group margins higher over the next year and a half. For investors, this suggests that earnings could grow faster than revenue as the business becomes leaner.

“Right now, we are seeing strong operational leverage, with a 29.2% EBITDA margin in established hospitals. Going forward, we expect a structural cost reduction of about 150 basis points, which should take us to a 25% EBITDA margin overall in the next 18 months.”

— Suneeta Reddy, Managing Director

The retail healthcare and diagnostics arm is showing explosive growth and improving profitability. This diversification beyond large hospitals helps balance the business and taps into the high-growth diagnostic market.

“AHLL had a very good quarter, with total revenues at ₹499 crore. EBITDA margins also improved, driven by strong growth in diagnostics, which grew by 60%. The core focus on diagnostics and clinics will continue to drive Apollo Health & Lifestyle forward. Additionally, utilisation at Spectra and other healthcare formats has improved, lifting EBITDA to ₹49 crore.”

— Suneeta Reddy, Managing Director

Management is downplaying the risk of government-imposed price caps on hospital rooms by shifting the focus to the massive need for healthcare infrastructure. This suggests the company is confident it can navigate regulatory hurdles through collaboration and its low-cost advantage.

“The broader picture emerging is that India’s healthcare spending should increase to 5% of GDP, alongside a growing recognition of the structural demand for quality healthcare. Secondly, Indian healthcare costs are already a fraction of international costs. Focusing solely on room rent caps is less relevant when looking at the bigger picture. We are eager to collaborate with the government, insurers, and the broader sector to build the critical healthcare infrastructure India badly needs.”

— Suneeta Reddy, Managing Director

Wockhardt Limited | Small Cap | Healthcare

Wockhardt is a global biotechnology and pharmaceutical company focused on drug discovery and the manufacture of complex generics. The company is notably active in the development of novel antibiotics and insulin biosimilars to address unmet medical needs.

[Reference]

Management highlights a significant financial turnaround as the company moves from negative to positive EBITDA. This indicates that the business has reached an operational inflexion point where top-line growth is translating into profitability.

“See, our performance both on the top line, operating results, and bottom line has been consistently good over the last several quarters, and that is continuing. The major reason is that we have an overall top-line growth of about 26%, and our EBITDA, which was negative last year, is in a positive space this year at ₹107 crore.”

— Habil Khorakiwala, Founder and Chairman

The company identifies its international segment as the primary engine for recent revenue expansion. Investors should note that management expects this global momentum to be sustained throughout the current fiscal year.

“A major part of the revenue, as you would have noticed, has come from our international business, and that is our important focus area for future growth. That higher level of growth will continue during the year.”

— Habil Khorakiwala, Founder and Chairman

The company expects its core operations to sustain a 20% growth rate while new drug launches provide additional upside. This suggests a base layer of stable growth while the newer, high-potential molecules are scaled toward profitability.

“Our normal business will continue to grow at least 20% plus over the next 12 to 18 months. Our new molecules, like Zidebactam, would be additional as far as revenue is concerned. Because there is an initial investment in creating the organisation, we would be either at a break-even point or a little plus or minus.”

— Habil Khorakiwala, Founder and Chairman

The Chairman provides a specific timeline for when the company’s long-term research investments are expected to deliver explosive revenue results. This marks FY29 as the critical window for the company to achieve its target scale and valuation re-rating.

“Definitely FY28. In FY28, we would see the very beginning of rapid growth, and from FY29 onwards, you will see our growth like a hockey stick.”

— Habil Khorakiwala, Founder and Chairman

Management is committing to a steady R&D intensity to support the global expansion of its new antibiotic pipeline. This provides investors with a predictable cost model even as the absolute investment in clinical trials grows alongside revenue.

“Actually, the spend would remain at 10% to 12% of our revenue for the next 3 to 5 years, because we intend to take these products which we have now introduced in India—that is Emrok and Miqnof—over a period of time for global clinical trials and enter Western markets. Similarly, our WCK 6777, which is a unique once-a-day antibiotic, will be entering Phase 2 clinical trials and Phase 3. So over the next 4 to 5 years, R&D expenses will remain more or less consistent based on the top line, so it will increase proportionally.”

— Habil Khorakiwala, Founder and Chairman

The company forecasts a trajectory of gradual margin expansion over the coming years before a major spike in the late 2020s. This aligns with the expected commercialisation of high-margin novel drugs in global markets.

“I must tell you that our margins will continue to improve year-on-year, and they will improve significantly after FY29.”

— Habil Khorakiwala, Founder and Chairman

The Chairman reaffirms the company’s multibillion-dollar peak sales potential for its lead molecule, Zidebactam. This highlights the long-term cash flow potential of the company’s patent-protected intellectual property.

“When we talk of peak sales, it always means during the life of the patent. So it is quite possible that we reach this peak sale a little earlier as well, but definitely during the life of the patent, that would be our peak sales target. We might actually do better given the feeling and feedback we are getting, but I think we will stay with those numbers.”

— Habil Khorakiwala, Founder and Chairman

The company explains its deliberate approach to staggering new drug launches to ensure effective medical marketing and doctor adoption. This measured strategy aims to maximise the commercial success of each product rather than overwhelming the market.

“The other molecules we will be introducing over a period of years. At any given point in time, we cannot introduce too many products, because new molecules cater to the same customer group, and a lot of medical and scientific communication is required for them to understand a new molecule. So we need a reasonable gap between molecules, and that is how we are monitoring our research program. Based on potential and priorities from both business and scientific standpoints, we will introduce various other products over a period of time.”

— Habil Khorakiwala, Founder and Chairman

Chemicals

Solar Industries India Limited | Large Cap | Chemicals

Solar Industries India Limited is a leading manufacturer of industrial explosives and defence ammunition with a global presence. The company serves the mining, infrastructure, and defence sectors through advanced manufacturing facilities in India and several international markets.

[Reference]

Management is aiming for a substantial jump in revenue to ₹14,000 crore this fiscal year. Achieving this target would represent over 40% growth, signalling strong confidence in both domestic and defence demand.

“Yes, our ambitious guidance for this year has been ₹14,000 crore as against ₹9,800 crore in the previous year. The first quarter has been a good start for us, and we are very optimistic that the ₹14,000 crore figure is quite achievable. Since we gave the guidance just a couple of months back, we may revise it after our half-year results.”

— Shalinee Mandhana, Joint CFO

The defence business is seeing triple-digit growth but operates on long lead times from product development to supply. This implies that current orders will provide a steady, multi-year revenue stream rather than just one-off gains.

“Coming to the defense top line: yes, we are very happy to state that defense has been a key growth driver for our business, registering a growth of 123% year-on-year. But as you see, the defense business always has a slow-moving cycle—starting from product development to getting the product qualified, securing orders, and setting up the supply chain. So we see ₹4,500 crore as the current visible number for this year. But as I said, let the further quarters evolve, and we’ll see how the numbers unfold in upcoming quarters for any revision.”

— Shalinee Mandhana, Joint CFO

Profit margins have stabilised at 28% due to internal efficiencies and a higher contribution from high-margin defence products. Investors can likely treat this higher margin profile as a sustainable baseline for future earnings projections.

“Yes. We could maintain margins of around 28% in this first quarter despite volatility in most commodity prices. This has been achieved mostly on account of strong execution from our team members, efficient supply chain management, and the operational gains we have achieved through our recent expansions. Also, another segment which has recently come up is the defense revenue, which started generating good numbers since last year. We see margins around 28% as the new normal for our business at this growth stage.”

— Shalinee Mandhana, Joint CFO

Domestic growth is being fueled by power sector demand and new manufacturing plants across India. This geographical diversification helps the company capture regional demand while reducing transportation costs.

“We had stated with the annual results that volume growth this year should be around 15% and price growth should be around 18% to 20%, leading to around 30%–35% growth at both domestic and international levels. We maintain this guidance. The domestic business was really helped by good demand from the electricity segment, which led to demand from the mining sector and bodes well for our industry. We also benefitted from the commercialization of our Dhulla plant in northwestern India and the expansion of our Dholpur plant in northern India. We are also setting up a plant in Odisha and another plant in Southern India over the next 1–2 years. All of this should provide good backing for growth in the domestic market.”

— Shalinee Mandhana, Joint CFO

The company is negotiating a major contract for extended-range Pinaka rockets expected later this year. Securing this order would significantly bolster the defence order book and provide clear revenue visibility for the coming years.

“Coming to Pinaka: yes, we have an order book of around ₹18,000 crore from defence, where Pinaka is the largest contributor. We expect the Pinaka extended-range order to come in soon; it is currently in the negotiation stage, and we do see the order coming in before the end of this year. Once the order comes in, those Pinaka numbers will be added.”

— Shalinee Mandhana, Joint CFO

Trials for the Bhairavastra weapon system are nearing completion, with orders expected to start hitting the books next fiscal year. This marks the entry of another significant product line into the defence portfolio for mid-term growth.

“With respect to Bhairavastra, we are at a very advanced stage. Most of the trials we conducted have been completed, and the final testing and final lot trials are underway. We expect the trials to be completed before the end of this year and orders to flow in from next year.”

— Shalinee Mandhana, Joint CFO

Solar Industries has established capacity for 300,000 artillery shells and expects revenue to begin in the second half of this year. This new business vertical utilises existing facilities and expands the company’s addressable market in conventional ammunition.

“Yes, we have good demand for 155 mm shells and have set up the facility. Progress is ongoing, and final trials are in process. We will start seeing some revenue recognition from this vertical in the second half of this year. Some numbers may come in during H2. As for the capacity of 3 lakh units, at present it is very difficult to say; let’s see how the numbers roll in. We may comment further in the fourth quarter.”

— Shalinee Mandhana, Joint CFO

Years of effort in South Africa and Australia are finally paying off, with South Africa becoming the largest international revenue source. This highlights the company’s ability to successfully navigate complex regulatory environments in foreign markets to achieve scale.

“South Africa and Australia have been really good. If you recall, we slogged for 3 to 4 years before finally entering these markets. Currently, South Africa is the top revenue-generating international market for us, and we are expanding both in South Africa and neighbouring regions.”

— Shalinee Mandhana, Joint CFO

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Quotes in this newsletter were curated by Shahid Barmare.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 79th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 5 companies across 4 industries.

Auto Ancillary

• Bosch Limited

• Amara Raja Energy

Healthcare

• Zydus Lifesciences Limited

Financial Services

• Manappuram Finance

Engineering & Capital Goods

• EPACK Durable

Auto Ancillary

Bosch Limited | Large Cap | Auto Ancillaries

Bosch Limited is a leading provider of technology and services in the areas of Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The company is a key supplier to the Indian automotive industry, specializing in fuel injection systems, aftermarket parts, and power tools.

[Concall]

Bosch has achieved a sustainable margin expansion through a multi-pronged approach focusing on localization, productivity, and a richer product mix. This upward trend in profitability is expected to persist as the company continues to optimize its internal operations and sourcing.

“We have done quite a few things consistently over the last several years, at least over the last 2 years, which have led to a sustained improvement in our margins. The first thing is continuous improvement in our operational excellence, which has led to a sustained change. We have had a continuous increase in our localization content, which has contributed quite significantly. Volume growth has been favorable, which is also very good for us. We have had an overall improvement in productivity, which has also been a major contributor. The product mix has also been quite favorable going forward, so that is another positive addition to our margin base. Overall, I would say that we are on an upward trend, and we would say that we will sustain this.”

— Guruprasad Mudlapur, MD & CEO

The company is leveraging the global scale of the Bosch Group’s procurement network to mitigate risks from turbulent sourcing markets. This global integration acts as a buffer against cost volatility, helping protect domestic margins during supply chain disruptions.

“I think we also benefit from the worldwide purchasing organization. As you are all aware, the sourcing market is still quite turbulent. We are supported by a worldwide purchasing organization, which helps us maneuver through this very volatile situation and maintain our margins as best as possible through our sourcing activities. That is the only thing I would add.”

— Tillman Rocke, CFO

Despite the global shift toward electrification, Bosch remains heavily invested in internal combustion engine (ICE) technology to meet ongoing market demand. This balanced approach allows the company to capture growth from traditional volumes while simultaneously offering advanced tech like ADAS and EVs.

“Mukul, I think the answer is quite straightforward for us. We are a technology company, and we will support and continue to support whatever technology the market demands. You listed a few technologies: CNG, electrification, CNG, and several others, including ADAS and everything else. Every one of these is in our portfolio, and we continue to offer them to our OEMs. That said, there is also momentum that will carry combustion technologies forward, including possibly some alternative fuels. This progression will continue in the years to come. This is not stopping. We see volume growth in combustion technologies continuing to happen. There may also be upgraded legislation for combustion technologies as we move forward, and we are certainly leading that development and will continue to provide support.”

— Guruprasad Mudlapur, MD & CEO

The acquisition of the chassis systems business is primarily a strategic expansion into powertrain-agnostic components rather than a cost-saving exercise. This move reduces Bosch Ltd.’s reliance on specific engine types and adds a highly profitable, growth-oriented segment to its consolidated financials.

“The chassis systems business, which we acquired, was already a Bosch system company. In terms of synergy effects, we see very minimal improvement in costs and synergies. There will be some small improvements, but I do not see that as the major benefit. It is a great portfolio addition for Bosch Ltd. because we are adding a powertrain-agnostic product line to Bosch Ltd. That is the bigger focus. The company currently operates with very good performance characteristics and has very good projects acquired for the next several years. It is a highly profitable company with good growth and good market share. That should help Bosch Ltd. significantly going forward.”

— Management, Board of Directors

Strategic joint ventures with TACO and TSFS are nearing operational status following the completion of international regulatory clearances. These partnerships are critical for Bosch’s long-term EV revenue, with e-axle production expected to contribute by late next fiscal year.

“The JVs are in the process of being set up. Both JVs are in the final stages of formalities, which are ongoing. Both the Bosch Group and the Tata Group are operational worldwide, and we need merger-control clearances from several jurisdictions. Some of that administrative and procedural work is still ongoing. The JV with TACO will be set up in Nashik, or will operate out of Nashik. The JV with {? TSFS Group ?} will operate out of Chennai. Revenue from the e-axle JV should start coming out of the JV by late next year.”

— Management, Board of Directors

Amara Raja Energy | Small Cap | Auto Ancillary

Amara Raja Batteries Limited is a technology leader and one of the largest manufacturers of lead-acid batteries in India for industrial and automotive use. The company provides batteries for various applications including Passenger Vehicles, Two Wheelers, Commercial Vehicles, and Industrial needs like UPS, Telecom, Railways, Defence, and Motive. They supply to top OEMs, Aftermarket, Private Labeling, and export to over 50 countries worldwide.

[Concall]

New energy continued to scale rapidly in Q1, supported by more than 50% volume growth in both EV and telecom battery packs.

“For the quarter ended June 30, 2026, we achieved robust growth of around 24% on a consolidated basis, with revenue of around 4,215 crores. Approximately 95% of the revenue came from the lead-acid business, which grew by around 22%. The new energy business grew by more than 70%, recording revenue of around 290 crores.”

“The new energy business continued to deliver strong performance during Q1, with revenue growth supported by increased demand for telecom packs and two-wheeler packs. Both EV and telecom packs demonstrated volume growth of more than 50% on a year-on-year basis.”

— Sujatha Rathetti, Head – Corporate Finance

Cost pass-through is slower in B2B because customer negotiations take time, potentially delaying complete recovery of inflationary pressures.

“The price hikes in the B2B segment will be delayed because negotiations have to happen with various B2B customers. To that extent, there could be an impact that we may have to absorb, but most likely we should be able to recover it, if not fully in Q2, then in the succeeding quarter.”

— Management

Amara Raja is entering a heavy investment phase, with roughly three-fourths of FY27 capex directed toward its new energy expansion.

“During FY27, we estimate that we will spend around 1,700 crores towards our capex projects, with a major outlay towards the new energy business of around 1,300 crores and the remainder towards our lead-acid business, including recycling capex. This capex outlay is mainly towards our upcoming Giga 1 plant, which is expected to commercialize during H1 FY28, and towards other projects, including the Best 10 gigawatt-hour and E-positive plants.

Out of the planned 1,700-crore capex outlay for FY27, we spent around 450 crores during Q1 FY27, with major outlays towards the new energy business.”

— Sujatha Rathetti, Head – Corporate Finance

Amara Raja sees sufficient domestic demand visibility to potentially ramp half of its planned 10 GWh BESS capacity within roughly six months of commissioning.

“Initially, I think there is sufficient visibility with major EPC players that are installing projects for various power-generating stations. We are seeing a reasonable order book in India itself. There may also be export opportunities as we move ahead into other markets.

I do not see a major challenge in reaching a utilization level of around 5 gigawatt-hours within a period of approximately 6 months from the time the factory is completed. From there, it will depend on how the market develops.

The capacity can be made up because the line capacity itself is 10 gigawatt-hours. That is why we proceeded with the 10 gigawatt-hour line capacity. I think we should be able to ramp up, considering the way the requirement for solar energy is developing in this country.”

— Management

Management clarified that its BESS utilisation expectation is based on prevailing market demand and industry order books rather than committed orders.

“No, I am saying that, based on the market demand we are seeing today, there is a possibility that we can reach that kind of level over a period of around 6 months. This is because of the various existing order books we have seen in the country. We should also find a way to seed the market in other geographies so that we increase the utilization level and continue to grow consistently.”

— Management

The planned BESS facility is relatively asset-light, with management estimating ₹250–300 crore of initial investment for 10 GWh capacity.

“The initial capital outlay for the Best project could be in the range of 250-300 crores, and its capacity will be around 10 gigawatt-hours. At the current base price at the containerized solution level, the price could be anywhere between 100 and 120 dollars. In terms of asset turns, it will definitely be higher.”

— Management

Management expects BESS economics to broadly resemble its existing battery-pack operations, with localisation offering potential upside over time.

“In terms of operating margin, it may mimic the way the current pack business is performing, at around 5-6% or 6-7%. As we localize more and more components, the margin profile might change somewhat, but it will continue to have operating margin levels of that kind. The EBITDA margin could be around 7-8%, while a conservative margin could be around 5-6%.”

— Management

Amara Raja views BESS not merely as a pack-assembly opportunity but as a way to build customers and eventually localize cells for energy storage.

“As far as competitive intensity is concerned, I think this project should also, over a period of time, help us bring cell production into the country. In line with the government’s support for localizing supply chains for these BESS systems, I am sure it will help us establish customer relationships for all these products and eventually lead to the cell localization required for this BESS program.

We have to think long-term. The increased demand for energy storage requirements in the country, not only at the grid level but also at the C&I level, will definitely help fill this capacity and should also feed into our cell program expansion.”

— Management

Although the timing of capacity additions may change, the company’s longer-term ambition to capture a meaningful share of India’s lithium cell market remains intact.

“Even today, if you were to assess the risks of the lithium-ion business, I would intuitively say that demand is not the highest risk. It may definitely be in the bottom quartile because demand is coming from both EVs and the ESS segment.

Given our program, we may now prioritize an ESS cell over a standard EV cell because that could increase demand much faster. Therefore, while the milestone for a given capacity can change, our broad strategic direction of targeting approximately 15-20% market share of the available lithium cell market potential remains intact. The timing can change based on demand as well as the product mix required by the market.”

— Management

Geopolitical restrictions have materially changed Amara Raja’s approach to technology sourcing, particularly from China.

“As far as newer technology relationships are concerned, I would not say that we are not considering them. However, we will evaluate them on a need-based basis wherever we believe external help can augment our internal capability. We will work on a case-by-case basis.

At this point, given the geopolitical restrictions, I do not think a broad-based technology arrangement with any company from China is possible.”

— Management

Management expects customer approval cycles for LFP storage applications to be shorter than the extensive homologation required by automotive OEMs.

“Coming to the storage side, any LFP cell that we generate using our own technology can be tested in this plant. If we are able to convince B2B customers regarding their energy storage requirements, the time taken for customer acceptance may be substantially lower than what an EV customer would require. Some of these packs also come with a warranty commitment to energy storage customers.

However, for certain critical installations, such as telecom, customers will ask for extensive testing before accepting any particular cell. Any cells made by any supplier require customer approval, but the time taken by energy storage customers is definitely lower relative to EV customers.”

— Management

Amara Raja sees imported Chinese cells—not other domestic manufacturers—as the real competitive benchmark for India’s emerging battery-cell industry.

“By and large, there could be a market with, at best, three to four players on the cell side. That is our estimate based on the announcements we are seeing today.

From a pricing and competitive perspective, I do not think companies in India will compete primarily with each other. Rather, all of us will have to continue competing with imports entering the country.

To that extent, when competing with China, we are clearly at a price disadvantage. As we discussed in earlier calls, that disadvantage could be in the range of 15-20% today, simply because of the strong supply chain that exists in China and because we are still at a nascent stage of developing this market.

Until we develop sufficient depth in our own supply chain and receive some protection from the government, we should be able to stabilize this industry in the country.”

— Management

Even as cell manufacturing is localized, management acknowledged that critical upstream battery materials remain dependent on China.

“Clearly, on the supply chain, particularly for cathode material, we have to depend on China for procurement. There are no two ways about it.

However, various players in the country are also making efforts to localize parts of that supply chain. We have to wait and see how those plants reach a certain level of maturity.

In the long term, I think the industry as a whole will strive to localize the required supply chain in the country. Otherwise, substantial value cannot be retained within India. The government’s direction and policy push are also moving in that direction.

I am hopeful that, in the long term, we will be able to bring a large portion of the supply chain into the country.”

— Management

Healthcare

Zydus Lifesciences Ltd. | Large Cap | Pharmaceuticals

Zydus Lifesciences is a leading Indian pharmaceutical company that develops and manufactures a broad range of healthcare therapies including generics, biosimilars, and specialty drugs. The organization is currently transitioning from a traditional generics focus toward a research-driven model centered on proprietary innovation and branded formulations.

[Concall]

The company expects its Indian formulations business to significantly outperform the broader domestic pharmaceutical market. Investors should look for mid-teens growth in India to compensate for more moderate single-digit growth in the competitive US generics market.

“I think we continue to stay with our guidance that we will deliver strong double-digit growth for the year. Starting with the first quarter, I think our India business is poised to deliver significantly good traction, better than the market by at least 300 to 500 basis points. So we see mid-teens growth continuing for that business. Our international markets and the US are expected to deliver around single-digit growth. Looking at that, we will still see good revenue growth for the coming year.”

— Dr. Sharvil Patel, Managing Director

Zydus is preparing for a major US launch of Saroglitazar in FY28, noting that early market trends for this therapy area are stronger than previously anticipated. While the first two years will involve heavy investment, the expanding patient pool suggests significant long-term commercial potential for this NCE.

“For Saro, we are building for a FY28 launch right now, in April, and we are investing for that. The first 2 years will be focused on building up the business, so we will not see significant revenue in the first year. As we move into the second and third years, we would see the revenue and market build-up. The first 2 years will therefore look more like an investment phase in terms of how much we invest. From a market perspective, the recent guidance from both the other competitors in the current segment indicates better traction than their earlier guidance, and they have upgraded some of their guidance. This is being driven by a larger patient pool and more patients wanting to access this indication. We are seeing a positive trend in that the market is larger than expected. We are seeing positive signs in terms of how this market is forming, and we are quite excited about the opportunity.”

— Dr. Sharvil Patel, Managing Director

The Indian business is seeing a powerful convergence of high-growth chronic therapies and a successful rollout of complex biologics and NCEs. This diversified growth engine suggests that the current 20% growth rate in domestic formulations is supported by structural demand rather than one-off events.

“There are 2-3 things. First, the overall chronic part of our business is growing at more than 20%. If you look at the July numbers reported by AWACS, you can see strong traction on the chronic side across various therapies, with very meaningful growth, which is helping that growth. Second, we are seeing a very meaningful uptake in Saro and Desidustat, which is adding almost 30% to 45% growth in these businesses. That is also contributing very meaningfully and scaling up, and we see that traction continuing. The third factor is that our biologics have seen extremely good traction across 3 or 4 brands, which have also scaled very significantly after genericization. We are seeing very strong momentum in those brands. Sema is just at the beginning, so it is a small contributor. We rank third or fourth in market share today for our own brand, but overall we are the largest innovative generic Semaglutide product that we have launched. That is also adding to the momentum. I would say that the entire differentiated pipeline and the chronic business are helping this growth, and we see it sustaining going forward.”

— Dr. Sharvil Patel, Managing Director

Zydus is eyeing the large Chinese market for Desidustat, leveraging the success of existing molecules in that therapeutic class. While near-term revenue impacts are minimal, obtaining national reimbursement in China could unlock a significant new international revenue stream.

“The opportunity is very difficult to assess right now. We have not factored in any meaningful scale in terms of the current year. However, as we gain experience with obtaining reimbursement, we can see it doing well because the other molecule is performing very well and has already been launched. I think the other molecule is generating approximately 200+ million dollars in the Chinese market. Therefore, we can see this product also becoming a meaningful contributor to us.”

— Dr. Sharvil Patel, Managing Director

Consistent outperformance in the Indian market suggests that Zydus is successfully capturing market share from competitors across nearly all major therapeutic categories. This broad-based strength reduces the company’s reliance on any single brand or therapy for domestic growth.

“In the pharmaceutical space in India, our branded formulations business sustained market outperformance with strong 20% year-on-year growth during the quarter. This business has, in fact, outperformed market growth consistently over the last three financial years. Growth during the quarter was broad-based, as we grew faster than the market in the super-specialty, chronic, as well as acute segments.”

— Ganesh Nayak, Director

Financial Services

Manappuram Finance | Small Cap | Financial Services

Manappuram Finance Limited is a leading Systemically Important Non-Deposit taking Non-Banking Finance Company (NBFC) in India. Established in 1992, the company offers a wide range of fund based and fee based services such as gold loans and money exchange facilities.

[Concall]

After nearly 12% sequential gold-loan growth in Q1, Manappuram expects the business to grow 25–30% for the full year despite seasonal variations.

“We grew by around 12%, nearly 12%, in Q1. Our expectation for gold loan growth this year is somewhere around 25-30%. Some quarters are in season and some quarters are off-season, so we expect growth to be between 25% and 30%.”

— Management

Following pricing actions taken during Q1, the company expects gold-loan yields to stabilize around 18%, within a relatively narrow range.

“We expect the yield to be somewhere around 18%. It may go down by 25 basis points or go up by 25 basis points. Beyond that, we do not expect anything. It will be around 18%.”

— Management

Gold-loan momentum has continued beyond Q1, with both customer additions and pledged-gold tonnage showing strength in the first two months of Q2.

“If you look at the growth 1 year ago, from a tonnage perspective and a customer perspective, it was somewhat weak. In fact, on the tonnage side, I think we had declined in the first quarter of last year. This first quarter, despite being seasonally slow, we have had good momentum, and we continue to build on that momentum in July and August as well, both from a customer perspective and from a tonnage perspective.”

— Bhuvanesh Tharashankar, President & Group CFO

The branch rollout will remain concentrated in Manappuram’s stronger markets, while eastern India will account for another meaningful portion of expansion.

“Regarding branch openings, we have assessed that the overall growth possibilities are higher. Around 60% will be in South and Central India, that is, the 5 states of South India plus Maharashtra. Approximately 20% would be in the eastern states such as Bihar, West Bengal, and Odisha, where we have seen good potential. The balance will be in the rest of India.”

— Management

Manappuram is repositioning itself firmly around its core gold-loan franchise, with most of the remaining portfolio intended to be prime or secured lending.

“I am very happy to say that our focus will be more on gold loans. We want to maintain around 75-80% of consolidated AUM in gold, and the balance should either be prime or other secured lending, such as mortgage-based MSME lending and affordable housing.”

— Management

After the stress seen in microfinance, the long-term strategy is to grow Ashirvad cautiously while preventing MFI from again becoming an outsized part of the group.

“At the group level, we want to contain microfinance below 10% at the consolidated level. We want to grow it along with overall growth, but in a stable manner where asset quality is the prime concern. We will remain focused on asset quality, and we have always wanted to have prudent growth in the MFI portfolio.”

— Management

While regulation does not impose an LTV ceiling on income-generating gold loans, Manappuram has internally capped exposure at 85%.

“Having said that, for income-generating assets, we may go up to 85%, which is the maximum. These are EMI products or AIE products. Here, even though we have the gold collateral with us, greater emphasis is given to assessing the customer’s cash flow. These are all for business people who would otherwise qualify for EMI products based on cash flow and based on whatever security the letter of interest has for.”

“However, internally we have fixed the cap at a maximum of 85%. That is the maximum.”

— Management

The portfolio has already shifted materially toward larger borrowers, with 49% of gold loans now carrying ticket sizes above ₹3 lakh.

“Up to 1 lakh, it is 21%; 1 to 3 lakh, it is 30%; and above 3 lakh, it is 49%.”

— Management

Management expects reported LTV to normalize in the mid-60s, with recent movements largely reflecting changes in gold prices rather than underwriting behaviour.

“On average, this will be around the 64-65% level, or even the 66% level. March-end’s 57% came mainly because of the price. The price was 14,165. On June 30, that price is 12,954. That is why this is coming at 66%. Normally, if the increase continues, 64-67% is the average LTV range in the normal scenario.”

— Management

Despite increasing competitive intensity in gold loans, the company does not intend to pursue growth through indiscriminate pricing cuts.

“We will maintain a balance. Currently, our pricing is in one of the lowest ranges in the NBFC industry. We cannot be completely away from the market. We have to move according to the market. However, I hope we will be reasonably balanced in that regard.”

— Management

Manappuram managed Q1 funding costs despite elevated short-term rates, but management acknowledged that persistent rate pressure could eventually feed into borrowing costs.

“Bhaskar, in terms of the cost of funds, given the overall environment in which we have seen spikes in rates at the shorter end, we have seen a spike in rates, and we have seen MIBOR also at all-time high levels. Despite that, in the first quarter we were able to manage the cost of funds fairly well and keep it under control.

We continue to monitor the situation and look at the opportunities that arise in the future, and we will work on that. It is very difficult to put a number on where this will settle. However, given that these rates are currently elevated, we could expect some of this to flow into our cost of funds as well. It is very difficult to predict where this will be.”

— Management

New borrowing is being raised broadly around the current average funding cost, although management remains cautious given elevated market rates.

“On an incremental basis, I would say we would be around the 8.8-9% level.”

— Management

Manappuram’s gold franchise has become heavily digital, with online gold loans representing the overwhelming majority of the portfolio.

“Coming to the gold loan business, during the quarter we were able to add about 3.2 lakh new customers, and the outstanding customer count was 26.5 lakhs. Our average gold loan LTV was 65.6% in Q1 FY27. Online gold loan book accounts for about 86% of the total gold loan book.”

— Bhuvanesh Tharashankar, President & Group CFO

As profitability normalizes and the portfolio shifts toward gold and secured lending, Manappuram expects returns to improve steadily, targeting roughly 18% ROE within three years.

“We expect ROA and ROE to consistently grow. In 3 years, our expectation is to take ROE to around 18%.”

— Management

Engineering & Capital Goods

EPACK Durable | Small Cap | Engineering & Capital Goods

EPACK Durable Ltd. is an OEM/ODM manufacturer of consumer durables, best known as a top original design manufacturer of room air conditioners (RACs) and small appliances like induction cooktops, mixers and water dispensers, with integrated facilities across India supplying major brands and growing its product range.

[Concall]

Despite not giving formal revenue guidance, the company expects its RAC business to grow faster than the industry’s estimated ~20% growth in FY27.

“Nishita, in terms of forward-looking top-line numbers, as you know, we do not provide any forward-looking numbers. However, we are very confident about AC. The industry is expected to grow at around 20% this year, so we would definitely surpass the industry growth, as we have done in the past.

Our other sectors and product categories, namely Small and Large Domestic Appliances, are definitely growing at a much faster rate. Therefore, we are looking to grow much faster and much better than last year.”

— Management

The strong RAC performance was primarily volume-led, with roughly 30% growth in units and the balance coming from higher average realisations and commodity pass-throughs.

“Good morning, Tanay. First of all, in terms of the breakup, the total growth reported for RAC is 44%. Approximately 30% of this is volume growth, and 12-15% is typically value growth in terms of the increase in AOPs, including the pass-through of commodity prices. So, the breakup of 44% is 30% volume growth and 14% value growth.”

— Management

Most commodity cost increases have now been passed on to customers, leaving foreign-exchange losses as the more significant drag on Q1 profitability.

“Tanay, first of all, since our contracts with the larger customers are updated every quarter, most of the price increase was normally passed on. There is always a time lag between passing on the price increase and when it actually has an impact, especially amid the turbulence in the global supply chain and the global situation, particularly affecting March and April.

There was a period when the price increase was not fully passed on, but the contractual price increases were passed on, and there is hardly anything remaining to be passed on as of now. What impacted us most in the last quarter was the foreign exchange rate, so that is one line item we would like to flag. The foreign exchange loss is something that impacted us significantly. Otherwise, most commodity increases were effectively passed on after a time lag.”

— Management

Unlike last year’s inventory glut, EPACK believes the AC industry has largely liquidated excess stock and is entering the next cycle with relatively lean channel inventory.

“Tanay, I think, especially for the AC industry, the current situation is one of the most comfortable situations for the entire industry from an inventory point of view, particularly from a finished-goods point of view. Compared to last year, when there was a lot of pain in the industry because of inventory overflow and accumulated inventory, I think this is one of the best times. The trade has mostly liquidated its inventory, and inventory levels are at their lowest or below acceptable levels.

My estimate would be that, taken together, the trade, brands, and everything else, the inventory level would be anywhere around 3.5 to 4 million at maximum. Inventory levels are lower than what they usually are at this point in time.”

— Management

Regulatory changes around BIS and the Quality Control Order forced EPACK to carry elevated inventory, and reducing these levels is now central to improving working capital.

“Tanay, just to add to Rajesh’s comment, the other interesting thing to note is that, especially on account of the BIS and the Quality Control Order, which has been affecting the industry, we have communicated the operational difficulties we have been facing because we have been carrying more than the requisite inventory.

The timeline we had for the compressor, for the PLI, or for the QCO was amended, and then the QCO was amended again. Therefore, the timeline or the time available at the start of the season required us to maintain more than the required inventory. For the last few quarters, inventory levels have been highly elevated on account of this.

This is one area that has led to a greater requirement for working capital. As we move through the season, at the end of the season we are again left with inventory because we build up inventory in anticipation of the upcoming season. Therefore, from a working capital point of view, our key focus remains on normalizing inventory.

Currently, inventories are at a much more comfortable level compared to last year, but they are still slightly elevated. Our efforts continue to normalize them as we move forward.”

— Management

With imports temporarily permitted and domestic capacity ramping up, EPACK does not foresee compressor shortages becoming a meaningful bottleneck for the coming AC season.

“Rabindra, as far as compressors are concerned, the government has allowed the import of compressors until the end of this year. Imports can be made until then. At the same time, domestic capacity has already been installed and additional capacity is in the pipeline, which we believe will be operational by the end of November.

This is largely in line with the overall industry demand, and we do not foresee any significant challenge in procuring compressors to meet demand. We believe that there is sufficient domestic capacity already installed and in the pipeline to meet the industry’s demand.”

— Management

Diversification into washing machines and SDA/LDA is aimed at structurally addressing the historically loss-making Q2 and Q3 quarters.

“Absolutely. Pratap, you are exactly right that Q2 and Q3 have historically been loss-making quarters because of our heavy dependence on air conditioning. The entire SDA and LDA category is intended first to neutralize the loss, and we are on track in terms of scaling up washing machines and the other SDA businesses.

As I said in my opening remarks, we are constantly adding newer categories in SDA as well, which are also non-AC seasonal products. As we continue this journey, we believe that over the next 4 to 6 quarters, we should definitely see the seasonality situation come largely under control in Q2 and Q3. Washing machines are definitely a significant lever.”

— Management

EPACK remains on track with its broader growth plan, but improving revenue mix and eliminating seasonal quarterly losses are key milestones for the business model.

“We are largely on track in terms of our overall guidance. The seasonality factor needs to be minimized, and every quarter we are looking at and working toward achieving a situation in which every quarter is profitable and the revenue mix is maintained.”

— Management

EPACK expects to begin mass production of front-load washing machines around September-October and believes it could become one of India’s first indigenous ODM/OBM manufacturers in the category.

“As far as washing machines are concerned, we are currently manufacturing top-load fully automatic washing machines, which are already in production, and we are serving 3 large national and multinational brands in this category.

What I was mentioning, especially with regard to Hisense, is the front-load washing machine. This is one category in which we would probably be the first indigenous manufacturer to manufacture front-load washing machines as an ODM and OBM. This is currently under pilot production, and we believe it is a newer, more lucrative, and higher-priced category.

For front-load washing machines, we are targeting the start of mass production at the end of September or in October. The other category, namely top-load fully automatic washing machines, is already in production, and we are already serving approximately 5 to 6 multinational brands.”

— Management

The Hisense partnership is already scaling, with EPACK supplying around 60,000 ACs during January-June and generating roughly ₹120 crore from ACs alone.

“60,000—six-zero. The total volume delivered in the first half, from January to June, generated revenue of approximately 120 crores from the AC business alone with Hisense. If we talk about Q1 alone, the Q1 volume was 25,000, with revenue of close to 55 crores. That was the total Hisense growth for the AC business.

For washing machines, as we had mentioned earlier, the target date is the end of Q2. We believe that pilot production of front-load washing machines will start by the end of Q2, and we are on track to begin front-load washing machine production by the end of October.”

— Management

The strategic relationship extends beyond ACs into washing machines and other appliances, with EPACK reiterating its five-year cumulative revenue expectation of ₹8,000 crore.

“Yes. The total expected revenue from the Hisense partnership is 8,000 crores over 5 years. FY27 will be the first year. Cumulatively over the next 5 years, we expect to cross 8,000 crores from AC and other appliances, washing machines, and all products taken together. That is the 5-year cumulative revenue we had expected from Hisense.

The current year, FY27, is the first year. Whatever was estimated for the first year, we are largely on track to achieve. I shared the numbers in the previous question: For this calendar year, we have already achieved close to 220 crores of revenue with Hisense, and we have already crossed close to 60,000 ACs as well.

Therefore, we are largely on track for the current calendar year. In total, over the next 5 calendar years, the expected revenue from the Hisense partnership is 8,000 crores.”

— Management

Excluding PLI benefits, EPACK says its underlying EBITDA margin has been running around 6.5%, with scope for improvement as customer PLI discounts are withdrawn.

“On the EBITDA side, 6.5% has currently been the typical EBITDA margin, net of PLI or excluding PLI, for the last couple of quarters. However, there is clearly potential for growth. Approximately 1.5-2% has been the PLI benefit, which was typically partly shared with and partly retained by the company.”

— Management

Roughly half of the PLI economics had historically been passed on to customers, creating a potential margin lever as those discounts are progressively withdrawn.

“Generally, current EBITDA without PLI is closer to 6.5%. We also receive PLI income, which is practically shared between us and the customers. Over the last 2 years, since we have been receiving PLI, we have been sharing it approximately 50:50 with customers. Therefore, almost 1% was coming to us and 1% was being passed on to customers.

As I mentioned in the earlier question, we have already started negotiations with customers to roll back that PLI discount. We are working toward a situation in which, by the end of this year, we should be able to retain the entire PLI discount that has been passed on until now.”

— Management

Commodity exposure is managed through back-to-back procurement against confirmed customer orders, with quarterly cost increases subsequently passed through.

“Ayush, as far as commodities are concerned, whether copper, aluminum, or any other commodity, we do not do any forward booking in anticipation of orders. Whatever orders we have confirmed, we make back-to-back bookings for them in line with the agreement. Any increase in excess of the quarter’s price is passed on in the next quarter.

As a company policy, we do not undertake any forward trade or open booking in anticipation of a profit. We refrain from undertaking any trade without confirmed orders and back-to-back bookings.”

— Management

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Quotes in this newsletter were curated by Srusti & Meher.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 78th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 5 companies across 5 industries.

Financial Service

• State Bank of India

Logistics

• Delhivery

Retail

• Titan Company Limited

Engineering & Capital Goods

• Hitachi Energy India Limited

Defence

• Apollo Micro Systems Limited

Financial Service

SBI | Large Cap | Financial Services

State Bank of India (SBI) offers a diverse range of products and services to individuals, businesses, and institutions through its extensive network and remains a leading player in the banking sector.

[Concall]

SBI explained that the 18% YoY credit growth in Q1 benefited from a weak base and reiterated that sustainable growth should remain above nominal GDP.

“18% credit growth has to be viewed in the context of the base effect. Q1 of the previous year was a muted quarter. This was not limited to SBI; the entire banking system had muted credit growth in Q1 of the previous year. That is why we have given guidance anchored to the bank’s nominal GDP expectations. We believe nominal GDP may be around 12-12.5%, and SBI has always grown 2-3% more than that. That is why we have given credit growth guidance of 14-15%.”

— C. S. Setty, Chairman

SBI highlighted strong visibility on corporate lending, with a substantial pipeline across term loans, undisbursed sanctions and working-capital facilities.

“The pipeline is very strong. Overall, if you include term loans, undisbursed amounts, unutilized working capital, and the pipeline, it exceeds 9 lakh crores. There is a strong pipeline for corporate credit. As I explained, M&A is a very good opportunity, and we are seeing very strong interest.”

— Ashwini Kumar Tewari, Managing Director, Corporate Banking & Subsidiaries

SBI sees the newly opened M&A financing opportunity bringing in customers, including software companies that historically had little need to borrow from banks.

“Even in the mergers and acquisitions space, which is a newly opened space for us, we are seeing very good traction because everybody is consulting us and we see a lot of opportunity there, including in this space. It is opening up new segments and new classes of customers that we were previously unable to handle. For example, software companies never borrowed from us, but now they are borrowing from us because they want to acquire companies. They are borrowing from us for that purpose as well. I think there is significant opportunity available, and yes, we will set those benchmarks.”

— Ashwini Kumar Tewari, Managing Director, Corporate Banking & Subsidiaries

SBI believes India’s large investment requirements will require pension funds, mutual funds and insurers to become much larger providers of long-term capital.

“One of the constraints, as you pointed out, would be how we fund this requirement and where the capital pool will come from. This brings me to my favourite narrative: the shift in household savings that has taken place. Growth of 30 lakh crore cannot be funded by banks alone. One question is how many banks will actually enter the business of funding this capital expenditure. The other question is the capability of banks to fund this capital expenditure. Therefore, the overall funding structure has to change. As I mentioned earlier, if household savings are going to pension funds, mutual funds, and insurance companies, all of them will have to contribute to this capital expenditure in one form or another.”

— C. S. Setty, Chairman

SBI sees securitisation as a way to recycle large illiquid loan books and create additional capacity to fund India’s investment cycle.

“Many of us have illiquid asset portfolios on our books. Take home loans, for instance. I mentioned earlier, and I am reiterating, that the overall system has 34 lakh crore or even more in home loans. This is an absolutely illiquid home loan portfolio. Therefore, we need to consider whether securitisation structures can be introduced. However, if securitisation structures are introduced, they will not work unless there is participation from non-banks. We are consciously working as a market leader to introduce those structures and help the funding capability in the system grow.”

— C. S. Setty, Chairman

The bank is repricing parts of its corporate portfolio away from T-bill-linked loans toward MCLR and is prepared to let customers leave rather than compromise on pricing.

“On the corporate side, we did mention that there has been significant growth in T-bill-linked pricing. What we see on the corporate side is a combination of moving part of that portfolio to MCLR and, in the process, some customers who were not willing to pay MCLR looking for alternatives. However, T-bill pricing itself has largely been renegotiated in many cases, improving the yield. This is still a work in progress; the transition is not complete. However, there is general awareness, both among our teams and our customers, regarding our pricing expectations. Growth will probably be based on these expectations.”

— C. S. Setty, Chairman

SBI said corporate borrowers are switching much faster between bank loans and capital markets, making CP and NCD yields increasingly important for bank pricing.

“On the corporate side, pricing will be determined less by the available liquidity and more by what happens in the market. One of our DMDs mentioned that the shift from market to bank and bank to market is now very fast. Earlier, there used to be a lag. When market prices, bond rates, and CP rates increased, customers took a long time to return to banks. Now, they seem to be reallocating quickly. Therefore, I believe corporate pricing will be determined more by CP rates and NCD rates, which in turn will be determined by liquidity in the system. There could be some moderation. As I mentioned at the beginning, as far as SBI is concerned, we have communicated our pricing expectations. I do not think we will deviate significantly from that path.”

— C. S. Setty, Chairman

Despite changing liquidity conditions and FCNR(B) mobilisation, SBI retained its full-year domestic NIM guidance.

“Regarding the margin outlook, I still maintain that I am not going to give you a quarterly outlook. We are sticking to the full-year outlook of 3% that I mentioned at the beginning of my speech.”

— C. S. Setty, Chairman

SBI said it is unwilling to chase expensive wholesale deposits simply to report stronger deposit growth.

“Deposit growth has to be viewed through the lens of the liquidity available to us. Deposits have become extremely competitive, and wholesale deposit rates have increased significantly, which is not a rate that we are willing to pay.”

— C. S. Setty, Chairman

SBI highlighted the strength of its retail liability franchise despite industry-wide pressure on CASA deposits.

“Our retail franchise is performing extremely well. If you look at our retail term deposit growth, it is 14%. It continues to be 14%. Even in the last quarter, we recorded 14% deposit growth in retail term deposits. More notably, Savings Bank, with a base of 17.5 lakh crore, has grown by 10%. While the entire industry is struggling with CASA, we are probably an exception, having posted a 10% CASA growth rate.”

— C. S. Setty, Chairman

The bank said its large liquidity buffer allows it to treat bulk deposits as a tactical treasury decision rather than a structural funding requirement.

“We also have very significant liquidity on our balance sheet. As of June 30, we had excess SLR of 3.06 lakh crore. As we speak, also contributed by the FCNR(B) flows, we have excess SLR of 4 lakh crores. This means that we strongly believe, as I mentioned earlier, that bulk deposits are a treasury activity.”

— C. S. Setty, Chairman

SBI expects the overseas portfolio to be remixed toward FCNR(B)-linked deployment without materially diluting group or domestic NIM.

“What the foreign offices are doing is that, if they are funding FCNR(B) by providing leverage, they are reducing trade finance. The margins are equivalent, or sometimes the margin on supply chain finance is much lower than what they are earning on FCNR(B). Therefore, overall, I do not think there is any impact either on the whole-bank NIM or on domestic NIM.”

— C. S. Setty, Chairman

SBI sees fee income as an underpenetrated earnings stream and believes it can meaningfully increase its contribution.

“We still have a long way to go compared with many banks. Fee income as a percentage of overall income is still just about 15%. We definitely have the potential to take it up to 20%. Therefore, our focus on fee income continues. All the sub-themes in this area, whether loan processing charges, government business, or CV activity, are being focused on. Every area is being addressed.”

— C. S. Setty, Chairman

SBI disclosed the scale of its gold loan franchise across personal and agricultural lending.

“Our personal gold loans are of the order of 1.25 trillion. Our agricultural gold loans are of the order of 1.85 trillion. Together, we crossed the 3.1 trillion mark as of June.”

— Ram Mohan Rao Amara, Managing Director, Retail Business & Operations

The bank explained why it is aggressively growing gold loans despite yields being lower than some competitors.

“I also believe that gold loan growth needs to be viewed from an opportunistic perspective. This is not our core portfolio. There is a growth opportunity today, there is no capital allocation requirement, and the risk weight is virtually zero. From that perspective, it is ROE-accretive, with a small compromise on margins. It is also a safe portfolio.”

— C. S. Setty, Chairman

SBI said its larger average ticket size and conservative LTV make price a key customer proposition, limiting its appetite for aggressive repricing.

“Our loan-to-value ratio is less than 55-56%. With this combination of factors, the people who come to us are essentially coming for the price. Therefore, we will never move into double-digit territory there.”

— C. S. Setty, Chairman

SBI attributed slower growth in unsecured personal loans partly to existing customers shifting toward cheaper gold-backed borrowing.

“Coming to Express Credit, we are seeing a good amount of sourcing and disbursements in the current quarter and in the quarter that we have just completed. However, it is not moving into double-digit territory because of gold loans. Many of our regular Express Credit customers are opting for gold loans. There is an interest rate arbitrage of almost 3%. As the gold loan growth slows down, some movement will take place toward Express Credit.”

— C. S. Setty, Chairman

SBI plans to integrate analytics and AI with its physical distribution network to create a more sophisticated collection ecosystem.

“We are extensively using our analytical and AI capabilities to develop models and combine feet on the street, the branch network, and the contact centre to create a collection ecosystem. This will help us expand into the product range you are referring to. We have the products; we need to deepen them.”

— C. S. Setty, Chairman

SBI expects to disclose a more precise ECL assessment with Q2 results but believes capital augmentation and regulatory transition relief should contain the impact.

“The correct approach would be to provide the numbers when we meet again for Q2. However, I can give you one assurance: it will not have any major impact for two reasons. First, we will have some capital augmentation from the mutual fund and, hopefully, from the other major divestment that we are planning. We also intend to use the regulatory dispensation for the transition, which means that the annual impact on CRAR would be lower.”

— C. S. Setty, Chairman

Despite fresh slippages rising to roughly ₹7,000 crore, SBI said Q1 seasonality and subsequent recoveries suggest no deterioration in underlying asset quality.

“Regarding gross and net NPAs and fresh slippages, I think we should not really be worried about this. Just to give you a number, fresh slippages are normally higher in Q1. You should compare Q1 of last year with this quarter. Of the 7,000 crores of slippages we had, as we speak, we have pulled back almost 1,450 or 1,500 crores. So there is no concern on the gross NPA, net NPA, or SMA front.”

— C. S. Setty, Chairman

Government current-account balances are structurally declining, but SBI is offsetting this through significantly stronger penetration among non-government customers.

“We have been one of the largest holders of government current account balances, but those balances are drying up. Still, we are maintaining our share of the current account market because our penetration in the non-government segment is increasing significantly. The non-government segment has grown by 14%. I think we are doing fairly well. We can do much better, but overall current account balances in the system are going to decline.”

— C. S. Setty, Chairman

Logistics

Delhivery | Large Cap | Logistics

Delhivery is India’s largest fully integrated logistics service provider, specialising in express parcel delivery, freight, and supply chain solutions. The company utilises a proprietary technology stack and extensive automated infrastructure to serve thousands of e-commerce and B2B customers across the country.

[Concall]

The increase in freight pricing is largely driven by internal efficiency gains rather than just passing on higher fuel costs. This organic yield growth is a positive sign for the long-term margin potential of the freight division.

“On PTL yields, this is not a seasonal improvement in yields at all. It is a planned and delivered improvement in yields. We have been saying for several years that, as the quality of the network continues to improve and our relative scale continues to improve, our ability to generate higher yields will also improve. Of course, part of the improvement is linked to fuel pass-throughs, but I think we have seen something like a 37-paisa improvement in yield, of which only about 6 paisa is coming from fuel inflation. Most of it is simply organic improvement in yield. There is no reason to believe that this will not be sustainable, and it is across all distances.”

— Sahil Barua, MD & CEO

Delhivery is launching a financial services arm to help its truck partners get financing without using its own cash to make loans. By helping partners grow their fleets, the company secures a more reliable supply of transport while keeping its own balance sheet light.

“Our intention is not to lend heavily from the Delhivery balance sheet at all. We have a number of high-quality lending partners with whom we intend to work, and discussions are already underway. The logic is that Delhivery understands and knows both the demand side and the supply side, and therefore the information we have is valuable. The second part is that, to some extent, we are underwriting the demand that the supply side of the fleet owners is expected to serve. Fundamentally, we do not anticipate having to allocate significant capital ourselves for lending. The idea for Delhivery is to facilitate fleet owners in obtaining both insurance and fleet financing and in expanding their fleets. The benefit to us, of course, is that a larger pool of supply ultimately becomes a more stable pool of supply for us as we grow and also reduces our cost of service over time.”

— Sahil Barua, MD & CEO

Rising minimum wages are currently a bigger threat to margins than fuel costs because they cannot be automatically passed on to customers via contracts. This suggests that the company must rely on price negotiations or productivity gains to offset these rising labour expenses.

“Minimum wages would be expected to have a larger impact because there is no contractual pass-through clause for minimum wages. To some extent, in this quarter the contractual pass-through of fuel rates provided some cushion against cost increases and therefore some margin protection. The full benefit will be visible in the second quarter. For minimum wages, there is no such contractual clause. Therefore, yes, the impact would be larger.”

— Vivek, CFO

Management believes they can eventually pass on higher labour costs to customers because these wage hikes affect the entire compliant logistics industry. This provides some confidence that the current margin pressure from wages is a timing issue rather than a permanent loss.

On wage costs, the reality is both yes and no. Wage costs do not have the same contractual structure as fuel costs... Fundamentally, when wage changes are as dramatic as they have been, the increase does get passed on. It is not as difficult a discussion with customers as you might think, because when the minimum wage rises, it is a statutory wage increase. Unless a shipper is specifically deciding to work with a non-compliant partner—which large and meaningful shippers generally are not willing to do, because they ultimately want their goods to be delivered safely and through a reliable network—the reality is that this inflation is borne by all service providers. Therefore, it is not really as difficult a negotiation.”

— Sahil Barua, MD & CEO

Delhivery is avoiding the hype of 15-minute consumer delivery, viewing it as a low-margin commodity service that will eventually be taken in-house by platforms. Instead, they are focusing on the more profitable backend logistics of moving goods into the warehouses that feed these quick-commerce networks.

“As long as quick commerce continues to grow, there will obviously be a significant challenge in getting goods to mother warehouses and dark stores on time. Ensuring that this happens reliably is where Delhivery will participate. We have stayed away from 2 specific parts of quick commerce, as I have pointed out before. We do not run dark stores for quick-commerce players... We also do not deliver from dark stores to consumers... Similarly, we do not view last-mile delivery in quick commerce as a differentiated capability. I think that is something the quick-commerce players will ultimately keep captive, and they will reduce rates over time. We have seen this happen, for example, in food delivery, where the outsourced percentage is fairly small. We think the same thing will happen, and we have stayed away.”

— Sahil Barua, MD & CEO

The company is using real-time software to decide which packages to accept and how to route them through the network for maximum profit. This level of automated decision-making is presented as a key barrier to entry that competitors will struggle to match.

“Even from a software standpoint, a lot of the company’s focus has been on establishing these kinds of serviceability rules and making them more intelligent over time. This involves determining the right node from which to deliver a specific form factor... Our belief is that these systems create value that is very difficult to replicate. These are difficult decisions to make, even offline, and they become particularly complex in real time. Over time, we have matured our systems to the point where many of these decisions are now made in real time. Which packages do we accept? Which packages do we not accept? Which packages go to which type of location? What is the right architecture? As I mentioned, we have been withdrawing freight backwards into the network.”

— Sahil Barua, MD & CEO

Retail

Titan Company Ltd. | Large Cap | Gems, Jewellery & Watches

Titan Company Ltd. is an Indian luxury goods manufacturer that leads the domestic market in jewellery, watches, and eyewear. It operates prominent brands such as Tanishq, Fastrack, and Titan Eye+, serving a wide range of consumer segments through its extensive retail network.

[Concall]

The Damas acquisition is currently facing losses due to geopolitical conflict reducing consumer spending in the Middle East. While this segment is under pressure, the rest of the international portfolio remains profitable and is expected to stay in the green.

“You are right that the core business was not loss-making. However, given the current situation of the war, purchasing jewellery in Dubai, Saudi Arabia, and other countries is the last priority for anyone there. Footfall has fallen, ticket size has fallen, and if a business that was operating at a certain level declines by 20-30% from that level, it will end up making a loss. I would say that the rest of our international business portfolio, excluding Damas, is making a profit with a mid-single-digit EBIT margin, say 6%, and that should continue. Overall, Damas’ contribution to the international business will not be very high. Therefore, I would expect the overall portfolio to still deliver a positive EBIT performance for the full year. Damas’ performance is contingent upon the current situation. As soon as that situation ends, I am sure it will also improve quite rapidly.”

— Ashok, CFO

Titan is using product innovation, such as lower-caratage jewellery, to protect its margins against high gold costs. A shift away from low-margin gold coins toward higher-margin jewellery pieces is expected to support overall profitability.

“There are also various things happening in the system. We had discussed the acceptability of lower-caratage jewellery and the introduction of lower-caratage jewellery, which generally has a positive impact on margin. Various initiatives are being undertaken, and as we move forward, if gold prices stabilise, the product mix may also improve. The overall product mix, in which coins used to have a slightly higher share, may start shifting down, and we are seeing signs of that. All of this can result in a margin closer to that number. That is our belief at this point, and that is why we are saying that we are very hopeful of delivering something around that number on a full-year basis.”

— Ashish, Management Team

Customers are increasingly shifting toward the Riva Golden Advantage scheme as a way to hedge against volatile gold prices. This shift demonstrates the company’s success in using financial products to stabilise consumer demand during price uncertainty.

“On a value basis, we are tracking, but I would say that we started the Golden Harvest program many years ago, and then 2-3 years ago we added Golden Advantage. What is really happening is the dynamic between the two. We are seeing more customers prefer Riva Golden Advantage because it helps with rupee-cost averaging. We are seeing a shift in preference from Golden Harvest to Riva Golden Advantage, which is good for the customer. It was also introduced to solve the problem of gold rates either increasing or moving up and down. That is the dynamic playing out.”

— Ajoy Chawla, Managing Director

Management reports that the disruptive narrative of lab-grown diamonds vs. natural diamonds is fading as both products find their own niches. Stable pricing in the natural diamond segment is helping to maintain consumer confidence in premium jewellery.

“Regarding natural-diamond prices specifically in India, we have seen greater stability in pricing, perhaps, for both solitaires and small diamonds. At the retail end also, we have kept prices stable for both. I think the intent of your question may be how this is playing out relative to lab-grown diamonds and how the narrative is playing out in the customer’s mind. At the market level, it has stabilised. The narrative that was previously very prominent around lab-grown versus natural diamonds has declined substantially. Both exist in the market. Pricing is stable, and the narrative and sentiment are also stable.”

— Ajoy Chawla, Managing Director

Titan remains focused on capturing a larger share of the unorganised market and expanding its presence in tier-2 and tier-3 cities. The combination of market formalisation and a diverse product portfolio across various price points underpins their aggressive long-term growth outlook.

“The larger point I would like to direct everyone’s attention to is that the headroom for growth across all our businesses is very high. This is partly because of the tailwinds from formalisation, largely because of India’s growth story, and because of the opportunity in Middle India and our multiple-segment portfolio. This is true for jewellery, eye care, watches, fragrances, bags, sarees, and all our businesses. We have headroom both to gain market share and to benefit from India doing well, the inclusion of multiple segments in the consumption basket, and the premiumization story. These are the 5, 6, or 7 forces that we discussed when we met. Specifically on jewellery, I would reiterate that our growth drivers include gaining market share through regionalisation, high-value studded jewellery, retail transformation, brand differentiation, portfolio play, and core growth in both studded and gold jewellery in the sub-50,000 and sub-1 lakh price points through buyer growth.”

— Ajoy Chawla, Managing Director

Engineering & Capital Goods

Hitachi Energy India Ltd. | Large Cap | Heavy Electrical Equipment

Hitachi Energy India is a global leader in power technologies, providing integrated solutions for transmission, distribution, and grid modernisation. The company focuses on enabling sustainable energy transition through high-voltage products, grid automation, and power quality systems across utility and industrial sectors.

[Concall]

India’s power infrastructure is entering a multi-year growth phase, supported by investments in transmission, renewable energy, grid modernisation, urbanisation and digital infrastructure. This gives the company a structural growth runway beyond near-term geopolitical volatility.

“Despite the geopolitical challenges that the country continues to deal with, the underlying fundamentals of our business remain exceptionally strong. India continues to witness unprecedented investments in transmission infrastructure, renewable energy integration and deployment, grid modernisation and resilience, urbanisation, and digital infrastructure. These long-term structural drivers continue to create significant and sustainable growth opportunities for our industry.”

— N Venu, MD & CEO

Order intake grew strongly in Q1, with new wins across battery storage, wind evacuation, solar infrastructure and data centres. The diversification into these newer segments broadens the company’s growth opportunity beyond traditional transmission projects.

“Order intake in Q1 increased by 26.1% year-on-year and 39% quarter-on-quarter. This growth was driven by several notable wins across key sectors. Among these, I would like to highlight Hitachi Energy India’s first Battery Energy Storage System project, a 2-gigawatt wind power evacuation project in Europe, which is part of a 2-gigawatt wind power evacuation program, and the supply of GIS and AIS solutions for a 100-gigawatt solar park in India. In addition, we secured multiple data centre orders from a hyperscaler during the quarter.”

— N Venu, MD & CEO

Profitability improved sharply, with EBITDA margins expanding despite an unrealised forex loss. This points to stronger operating leverage as execution scales up.

“Profit before tax grew by 120% to 389.5 crores, representing a margin of 15.6%. On a year-on-year basis, the margin was 12%. Profit after tax was 11.8%, compared with 8.9% earlier. Operational EBITDA was 399 crores, representing a margin of 16%, compared with 11.5% on a year-on-year basis. It is important to note that this EBITDA performance includes an unrealised foreign exchange loss of 36.37 crores, which was recorded in this quarter.”

— Ajay Singh, CFO

Revenue from large HVDC projects is still building up, with execution expected to accelerate from the second and third years. This means the current financials do not yet fully reflect the scale of the existing HVDC backlog.

“If you have been following us, we have been telling you that in the first year, revenue and execution will be slightly on the lower side, and then they will pick up from the second and third years. That is what we have been saying. Therefore, not all of the HVDC revenue has been shown, or it is not all reflected in this particular quarter. That much we can say. However, it is picking up.”

— Management, Executive Team

Battery energy storage is expected to become a scalable growth opportunity as the technology matures and localisation improves. The addition of digital monitoring and services could also create an additional revenue stream.

“Right now, the margin profile is affected by the fact that this technology needs to mature, and we also need to undertake significant localisation. Over a period of time, these margins will become similar to the margins we have in the rest of the business. The key point is that this is a scalable version that is easy to fit and easy to deploy. There is significant revenue potential going forward because we add a substantial digital layer to the solution, enabling us to monitor the system and provide digital services going forward.”

— Management, Executive Team

The company is increasing local manufacturing and component localisation to improve competitiveness and build an end-to-end supply chain. The new capex is therefore aimed at both capacity expansion and greater control over costs.

“The whole idea is that we will continue to localise more and more components and create an end-to-end manufacturing scenario over a period of time. That is the intention behind undertaking this capex.”

— N Venu, MD & CEO

A high percentage of the company’s order book (70%) is protected by price-variation clauses, mitigating the risk of raw material inflation. This structural protection is critical for preserving margins in long-duration infrastructure projects.

“At the moment, we do not see any material impact. Most of the contracts we have discussed, approximately 70%, have a variable clause. Overall, in this quarter, there was no commodity impact as such. Even where there was a small impact, it was managed. At this point in time, we do not have the details, and we also do not want to share the segment-wise quantum.”

— N Venu, MD & CEO

Defence

Apollo Micro Systems | Small Cap | Defence

Apollo Micro Systems Limited is an engineering company that specialises in designing and manufacturing high-performance solutions for Defence, Space, and Homeland Security sectors. They offer custom solutions using common technology IPs, allowing for re-configuration to meet specific customer requirements.

[Concall]

Apollo reiterated its strong growth outlook, expecting both standalone and consolidated revenues to continue expanding at 40–45% from FY27 onwards.

“Regarding the guidance, we have been giving guidance earlier, and we continue to stand by the same guidance as far as growth is concerned. We expect continued growth of somewhere between 40% and 45% from this financial year onwards. For the next financial year, we will give you separate guidance at the end of this financial year.”

— Management, Apollo Micro Systems

Apollo expects a purchase order for the MIGM programme around December–January and believes it could secure about 70% of the overall ₹3,800 crore opportunity.

“The DAC approval has come for MIGM. We are expecting a call from the Indian Navy next month. In fact, we are already discussing it. Before floating the enquiry, they will discuss it with Apollo and BDL. After that, they are going to float the enquiry. Perhaps, by the end of next month, they are going to float the enquiry. We are expecting the order by December or January; we expect the purchase order by then. As you know, the total budget is around 3,800 crores. It is also good that they are accepting a 20% advance payment in this order. This is definitely a very good encouragement for our company. We are expecting a 70% share of the MIGM order, based on the 3,800 crores.”

— Karunakar Reddy Baddem, Managing Director

Apollo expects the MIGM programme to cover approximately 1,000 units, with execution spread across three years.

“Yes. We are expecting it over 3 years. They are expecting 1,000 units.”

— Karunakar Reddy Baddem, Managing Director

From the current consolidated order book of roughly ₹1,700 crore, Apollo expects a single ₹2,500–3,000 crore-plus order to potentially lift its order book substantially by year-end.

“As far as we are concerned, the current order book stands at around 1,700 crores. By the end of this financial year, we are expecting a single order of more than 2,500-3,000 crores, which could cumulatively bring our order book to approximately 3,500-4,000 crores on a consolidated basis. This is the guidance that we can give based on the new AON that has already been accorded. It is already in the news.”

— Krishna Sai Kumar Addepalli, Whole-time Director, Operations

Beyond MIGM, Apollo expects multiple bulk-production programmes to progress during FY27, including QR SAM, Akash NG and Pinaka.

“We are expecting QR SAM as one opportunity, and the Ministry of Defence has already cleared around 1,000 units of Akash NG. Another opportunity is Pinaka, where the Ministry of Defence is going to place orders with 2-3 vendors for 2,000 units. Pinaka is also an opportunity. I am talking only about bulk production; I am not quoting small items here. We are expecting all these opportunities during this financial year. We are expecting QR SAM and MRSAM orders during this financial year, before the end of this financial year. We are also partly expecting Pinaka orders.”

— Management, Apollo Micro Systems

Apollo sees Premier Explosives as both backward and forward integration, allowing it to move beyond weapon electronics toward manufacturing complete weapons.

“As you rightly understood and pointed out, the acquisition of Premier is primarily a part of our backward integration as well as forward integration. We have been quite vocal all the time that we have a very strong presence in weapon-system electronics and that we are part of every indigenous weapon of the country. We are also developing our own independent rockets, both guided and unguided rockets. For these systems, we already have a very strong presence across the entire range of weapon-system electronics technologies, from the fuze part to the seeker part and to the actuation of the fin. As far as propulsion systems are concerned, Premier is very strong in both space applications as well as weapon applications. This partnership would enable us to move towards the journey of making a complete weapon by ourselves without having any interdependence with any other company.”

— Management, Apollo Micro Systems

Premier’s propulsion and explosives capabilities could allow Apollo to take prime-OEM responsibility rather than remain predominantly a subsystem supplier.

“At the same time, it is also going to bring us a lot of synergy in terms of becoming a prime OEM for the weapons that we are developing in-house. That was the core objective, not only specifically in terms of missile programs but also various other ammunition programs, where we are very strong in fuzes and in engineering and other aspects. This partnership, by virtue of acquiring the holding in Premier, would make us an integrated defence platform company from the point of view of weapons, arms, and ammunition.”

— Management, Apollo Micro Systems

Apollo expects backward integration into explosives and propellants to improve economics versus outsourcing as consumption rises from FY28.

“As consumption starts, we will be able to provide more clarity from a margin point of view. However, compared to outsourcing, as the Managing Director has already said, there will definitely be an improvement because it will be in-house production for us, although it will be on an arm’s-length basis. Overall, from a margin-level point of view, compared to an outsourced basis, there will be an improvement with in-house production.”

— Management, Apollo Micro Systems

Apollo expects the restructuring of the loss-making IDL acquisition to take another few quarters, with new products, lower overheads and better margins aiding the turnaround.

“Broadly, various cost measures and overhead measures related to the post-acquisition integration of IDL into Apollo have already been undertaken, and we have been able to significantly reduce the multiple overheads associated with it. Going forward, we are also going to undertake a few more measures. This is an acquisition of a loss-making company, as you are all aware. The restructuring process is ongoing. We have already stated that it will take at least 3-4 quarters for us to bring it to the desired level. That is what we are working on, and we expect it to be fully positive from the next financial year.”

— Management, Apollo Micro Systems

Apollo currently has no export revenue, but expects Unit 3 commissioning to enable a more aggressive export push and sizeable orders next year.

“During this financial year, we are likely to receive some meaningful breakthrough orders. That is what I can broadly say. I will not be able to provide a firm commitment or guidance, but in the next financial year, there will definitely be sizeable orders, particularly from export opportunities. That is the current guidance I can confidently provide.”

— Management, Apollo Micro Systems

Apollo sees a potentially large opportunity in converting existing Air Force bombs into guided, range-extended precision weapons.

“The smart bomb that they are looking for needs to be made smart, with guidance and a range extension. We are familiar with this technology, and I am sure that very soon we are going to establish this technology. Once the Air Force is satisfied with the performance, I am sure there will be a requirement for good numbers. The Air Force has thousands of units in its inventory. Under the modernisation scheme, it wants to convert them into smart bombs. There is a very large requirement.”

— Management, Apollo Micro Systems

Autonomous platforms across land, air and sea are becoming a major strategic focus, supported by emerging commitments from the armed forces.

“Going forward, we will also be building a swarm of autonomous USVs. A new program is coming up, and activity has already started in the company for it. Going forward, in the autonomy area, during this financial year and the next financial year, the company will be investing heavily in the autonomy segment across land, air, and sea.

Now that PSO sanction orders and firm commitments are coming from the armed forces, we will also accelerate our internal development activity.”

— Krishna Sai Kumar Addepalli, Whole-time Director, Operations

Apollo believes the emerging autonomous defence opportunity is large enough to support multiple successful suppliers with sizeable order books.

“In terms of the size of the orders, the opportunity is extremely large. I am not commenting on it in detail at this stage, but I would like to say that even if 2 or 3 players enter the field and prove their mettle, everyone could still continue to enjoy orders worth several thousand crores.”

— Krishna Sai Kumar Addepalli, Whole-time Director, Operations

Premier may not be the end of Apollo’s inorganic expansion, with management indicating that additional acquisitions are already being evaluated.

“We are planning to acquire 2-3 companies. This may not be the right time to tell you. Once we sign memorandums of understanding with these companies, we will announce it.”

— Management, Apollo Micro Systems

The 150-km Kusha variant has completed testing, while longer-range versions are expected to undergo trials in the coming months.

“Converting this into an order may take 2-3 years, but I think it will definitely happen. The program is progressing on a fast track. Testing of the 150-kilometre version has been completed, and the 250-kilometer and 500-kilometer versions are also expected to undergo trials by DRDO over the next few months.”

— Management, Apollo Micro Systems

Apollo’s Make-2 anti-drone programme is approaching trials, after which management expects to have better visibility on the addressable opportunity.

“The size is very large. TAM is continuously and dynamically changing. I will be able to provide guidance around the quarter ending in December regarding the opportunity size that it could culminate into. Currently, the trials are scheduled for the next few months. Once the trials are complete, I will have more clarity and visibility, and I will definitely share it with you.”

— Management, Apollo Micro Systems

The overarching strategy is to combine Apollo’s electronics, guidance and control capabilities with explosives, propulsion, ammunition and autonomous platforms to address a much larger portion of the defence value chain.

“Taken together, these developments demonstrate the growing breadth of our capabilities across the Indian Air Force and the Indian Navy, with a strong entry into autonomous technology under the Make-2 category. As we expand into indigenous product development, autonomous systems, and precision defence technologies, we are building a broader technological portfolio that enables us to serve a larger role in India’s journey towards a stronger and more self-reliant defence ecosystem.”

— Management, Apollo Micro Systems

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Quotes in this newsletter were curated by Srusti, Shahid & Meher.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 77th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 6 companies across 5 industries.

Engineering & Capital Goods

• Dixon Technologies (India) Limited

Auto Ancillary

• Samvardhana Motherson International Limited

Healthcare

• Biocon Limited

• Glenmark Pharmaceuticals

Automobile

• Ather Energy Limited

Chemicals

• Deepak Nitrite Limited

  

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Mausam Kumar | India’s Industrial Policy

Mausam is a postdoctoral researcher at Princeton and the former Industrial Policy Fellow at the Harvard Kennedy School. His work explores India’s industrial policy, manufacturing, development finance, and the role of states in driving economic growth. He breaks down the evolution of India’s industrial policy, the PLI scheme, Centre-State coordination, and the opportunities and challenges in building a globally competitive manufacturing ecosystem.

[Reference]

When global giants Apple and Foxconn decide to set up shop in India, the central government’s PLI scheme gets much of the credit. But Mausam argues that these national incentives are only the second-order driver. The first-order driver is what happens at the state level. Without the local bureaucratic architecture to reduce transaction costs, secure land, and provide infrastructure, the central money has nowhere to land. The real competition is between states building the capacity to absorb this capital.

“So when you come up with a scheme the PLI scheme, it provides enough fiscal incentives for firms Foxconn and these suppliers of Apple to come to these geographies of manufacturing. But the moment these decisions have already been decided, then when you think of why Apple would go to Tamil Nadu, that decision is completely and solely contingent on state institutions and how they create initial policy ecosystems. That is the driver of how this attraction actually happens. The pitching of Tamil Nadu... goes to incredible lengths for investment promotion to go out of their way and provide enough information for these firms to make decisions.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

If there is a core distinction between the successful industrial policies of East Asia and India’s historical efforts, it is the concept of market discipline. In places like South Korea and Japan, state support came with strict export conditionalities that forced firms to compete on the global technological frontier. In India, import substitution created a captive domestic market, allowing incumbents to capture demand and remain profitable without ever having to learn how to swim in global waters.

“Indian markets were super protected that these firms had captured demand and that made sure that they could really be profitable and create value for shareholders and ensure that they can still function well without having to compete. You would never see an Indian car in US simply because India never produced a car for the US market. And that’s the challenge. Unless you find ways to force firms to compete globally, you will never have global champions. So it’s a bit of a chicken and egg problem... is it policy or is it firms not having the appetite to do it?”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

A persistent trope in development economics is that the East Asian miracle was contingent on authoritarianism — that only strong, centralised states can effectively discipline firms and execute long-term industrial strategies. Mausam pushes back on this framing, arguing that the mechanics of successful industrial policy rely more on institutional design and credit policy than on regime type. The lesson for democratic nations isn’t to mimic autocracies, but to build autonomous institutions capable of setting and enforcing conditionalities.

“A lot of people see this idea that authoritarianism is central in industrial policy as deeply problematic. At least for someone me, I do not think the successful cases of industrial policy in South Korea, Japan, and even for China, has been argued that it’s simply because of this idea of authoritarian tendencies. This ability for these institutions of authoritarianism to discipline firms is high. We understand that... But what I would point out is that it’s not so much about making sure that you can discipline firms through these techniques of authoritarianism, but techniques of credit policy, techniques of export policy, techniques of incentives, which then lead to contingent project requirements.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

Mausam highlights a structural tension in India’s industrial approach: while the central government controls the purse strings, the actual execution and coordination must happen at the state level. The true measure of successful industrial policy isn’t just about handing out fiscal incentives, but building the subnational institutions necessary to land those investments effectively.

“Unless you build state capacity at the subnational level, unless you have these regional ideas of industrial policy and how you can practise that, it would be impossible to reconcile this. So the tension here, which is that if the fiscal space is at the central level, but if the coordination is happening at the subnational level, then how do you reconcile this? This is a puzzle where I keep coming back to... you have to find a way to say that you can practise industrial policy across these fiscal incentives at the central level, but also make sure that you have these state institutions which then tap into it.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

While much of the global green transition relies on Chinese supply chains, India has been aggressively building its own capacity. Mausam points to the solar sector as a prime example of how a mix of strategic financing and protective policies—like the Approved List of Models and Manufacturers (ALMM)—can successfully foster domestic champions and rapidly scale up renewable capacity.

“We have this capacity for about 256 gigawatts of renewables right now, which is mostly driven through solar panels, solar manufacturing, and going forward... India is very well placed to think of solar as the driver for all renewable demand... and there is a very coherent mix of industrial policies, which is at play here. So think of the ALMM, the approved list of models and manufacturers in India, which is a huge industrial policy in India, which is making sure that specific, domestic incumbents can only participate in the sector and build productive capacity.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

As India attempts to scale its green transition, particularly in solar and battery manufacturing, it faces a structural bind: the technical know-how and capital are largely concentrated in China. While geopolitical tensions have made Chinese Foreign Direct Investment (FDI) highly controversial, Mausam suggests we need to separate state-driven initiatives from private capital. Developing economies have historically absorbed technology through FDI, and shutting it out completely might stall critical structural transformations.

“The risk for FDI is always on the books of the firms which are bringing these investments. If you think of a Chinese firm goes to say Morocco, a Chinese firm goes to say DRC, and brings these FDI, then the risk is essentially broadly on the books of these firms. And so even though your concerns around enclaving are very bright, the historical pathway for this transition has always been through FDIs, which is that FDI are much less risk prone compared to other forms of financing. At least the empirical evidence... would point that out. And so even though we have these enclaving problems, what really happens is that it creates a project for foreign enterprises to understand their potential to come into new markets.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

For decades, developing nations climbed the income ladder by capturing low-value, labour-intensive manufacturing. But the current landscape is shifting. Instead of vacating these sectors as it moves up the value chain, China continues to dominate them, creating a severe policy squeeze for countries such as India and Vietnam that are trying to absorb those jobs. This phenomenon forces a rethink of how late developers can carve out space in a crowded global market.

“Historically we have had debates about this China shock and this China shock has functioned very differently across, say, in the American context. A lot of manufacturing jobs which went out because of this China shock... are not functioning anymore. This new spin on this China shock, which impacts developing countries and countries which have the potential to do this low value manufacturing, but also create jobs which can then drive the agenda for structural transformation is very real. Especially if you think of countries India, Vietnam, and Cambodia... these countries have been trying to do this catch up approach in manufacturing and there have definitely been pockets of manufacturing which have emerged across these arenas that are doing reasonably well.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

The success of Japan’s post-war industrial policy is often attributed to the overarching authority of the Ministry of International Trade and Industry (MITI). Mausam highlights how establishing a central, autonomous institution capable of overriding even the Ministry of Finance was crucial for coordinating credit policy and reducing inter-departmental friction.

“The Japan Development Bank, postwar Japan was essentially. The Ministry of Finance in a lot of ways was actually subservient to the decisions from MITI as to how the create policy functioned. And so the eventual dispersals from the Development Bank of Japan would actually be routed not through the Ministry of Finance, but through MITI. And this is the autonomy I’m trying to point out, that when you try to do industrial policy, you have to create an overarching institution which has this legitimacy to make these decisions, which would eventually drive whatever goals that you have been able to lay out.”

— Mausam Kumar, Postdoctoral Researcher at Princeton University

Engineering & Capital Goods

Dixon Technologies (India) Limited | Mid Cap | Engineering & Capital Goods

Dixon Technologies is India’s largest electronic manufacturing services (EMS) company, providing design and manufacturing solutions across smartphones, consumer electronics, home appliances, lighting, telecom, IT hardware, and wearables. The company is rapidly expanding its backward integration, component manufacturing, and export capabilities through strategic partnerships and acquisitions.

[Reference]

India’s electronics manufacturing opportunity continues to expand rapidly, and Dixon believes its scale, government policy support, and China+1 tailwinds position it to double revenue over the next few years.

“We believe we are sitting on a very large opportunity. India’s electronics market, currently around $135 billion, is expected to grow nearly three times by 2030. Within this, the EMS industry is estimated to reach around $35–40 billion. With our scale, supportive government policies, the China+1 opportunity, and geopolitical tailwinds favouring India, we believe the opportunity ahead is significant. We hope to double our revenues over the next couple of years.”

— Saurabh Gupta, Group CFO

Management believes future expansion can be funded through internal cash generation and disciplined working capital, eliminating the need for equity dilution despite aggressive growth plans.

“We’ve grown from around ₹2,000 crore in revenue to ₹50,000 crore without compromising cash flows, the balance sheet or return ratios. We believe we can grow from ₹50,000 crore to ₹1 lakh crore without raising additional equity. At this stage, internal accruals and efficient working capital management should fund our capex. In fact, we expect to generate meaningful free cash flow from this year onwards.”

— Saurabh Gupta, Group CFO

Management expects margins to improve through greater component manufacturing, higher-margin ODM businesses, and operating leverage as volumes increase.

“There are three key drivers. The first is backward integration. Following our acquisition of Q Tech India for camera modules, we’re expanding manufacturing capabilities further. Our JV with HKC for displays across automotive, mobile and IT hardware should be operational by Q4 and ramp up next year. These initiatives should contribute meaningfully to margins. The second driver is increasing the share of our ODM business across washing machines, lighting and refrigerators, where margins are structurally higher. The third is operating leverage. As revenues grow, fixed costs get absorbed over a larger base.”

— Saurabh Gupta, Group CFO

Management believes investor concerns around profitability are short-term and expects margins to recover steadily as new businesses and acquisitions scale up.

“Investors appear concerned about margins, but I believe this is temporary. Margins should begin recovering from the next financial year, with significant improvement expected through FY28 and FY29. We’re also evaluating acquisition opportunities in precision components, which offer margins of over 20%. We’re also looking at high-end speciality EMS opportunities through acquisitions.”

— Saurabh Gupta, Group CFO

The company is shifting beyond assembly towards component manufacturing and exports, which should improve competitiveness and profitability over the long term.

“It will be largely component-led and export-led. Our partnerships and joint ventures will start contributing meaningfully. Exports will continue increasing across multiple verticals. Backward integration in displays, camera modules, SSDs, power supplies and mechanical components will also become major growth drivers.”

— Saurabh Gupta, Group CFO

Despite an industry slowdown caused by higher memory prices, Dixon expects to maintain volumes by increasing market share.

“Absolutely. This is especially relevant for low- to mid-range smartphones, where prices have increased by nearly 30–35% because memory prices have risen five to six times. Since memory is a major component of smartphones, this is affecting demand. Industry reports suggest that the Indian smartphone market could contract by around 10–15% this year, from about 153 million units. Despite that, we expect to maintain—and even increase—our market share. We should broadly deliver similar volumes this year, which means we would have performed well even in a declining market.”

— Saurabh Gupta, Group CFO

Auto Ancillary

Samvardhana Motherson International Limited | Large Cap | Auto Ancillary

Samvardhana Motherson International manufactures and supplies components to automotive OEMs through its divisions: Wiring Harness, Vision Systems, and Polymer Products. The company aims to be a globally preferred sustainable solutions provider, offering diverse products and services to strengthen its market presence.

[Reference]

The company is facing temporary margin pressure due to higher prices for raw materials like copper and polymers. Management expects margins to recover as commodity prices stabilize and new high-margin business segments like aerospace gain scale.

“There is always a lag in passing on increases in commodity prices such as copper and other raw materials. At the moment, commodities remain elevated, not just copper but also polymer prices because of higher crude oil prices. We expect these commodity prices to normalize during the year. As they normalize, our margin trajectory should improve. At the same time, our new businesses are growing well. Our aerospace business and consumer electronics business are performing strongly, and our efforts to build these capabilities are playing out well.”

— Pankaj Mittal, Whole-Time Director and President

The recent acquisitions of Utaka Giken and Nexen Auto Electric will start contributing to the financial results from the second quarter. These deals are expected to immediately add to earnings and provide new growth opportunities in the coming years.

“We are very pleased that both acquisitions have been completed, and from July onwards they will be consolidated into our financial results. These acquisitions are accretive, and we believe there is significant scope to create additional value. In the coming years, you will see substantial growth from both Utaka Giken and Auto Electric.”

— Pankaj Mittal, Whole-Time Director and President

The company is positioning itself to benefit from the global expansion of Chinese automakers while maintaining its strong European presence. Recent restructuring in Europe and a strategy of supplying all types of engines helps the company remain stable during market shifts.

“We cater to all customers. We operate in both China and Europe. In Europe, we primarily support our European customers, while in China we also support Chinese OEMs through our local presence and long-standing relationships. As Chinese OEMs expand outside China, they will increasingly require global suppliers, and that creates an opportunity for us. As for Europe, there are multiple model launches underway, so the market remains dynamic. We are a powertrain-agnostic company and are working closely with all our customers on their new vehicle platforms. We also restructured our European footprint over the last one and a half years to align with our customers’ future plans, and that has contributed to the resilience visible in our results today.”

— Pankaj Mittal, Whole-Time Director and President

Motherson is exploring entry into high-tech sectors like robotics and data centers to stay aligned with its existing customers’ diversification. This move marks a pivot toward becoming a broader industrial supplier rather than just an automotive specialist.

“We actively evaluate all emerging industries because many of our customers are entering these areas and want us to support them as suppliers. These businesses are still at an early stage for us, but we are proud to already be associated with several customers, even if only in a small way today. Over time, whether it is humanoid robotics, data centres or other emerging industries, we believe we can become a significant supplier. Our objective is to continue supporting our customers wherever they expand.”

— Pankaj Mittal, Whole-Time Director and President

The company envisions a radical shift where nearly half of its revenue comes from new, non-automotive business lines. This massive diversification target aims to de-risk the company from the cyclicality of the global vehicle market.

“A vision always involves assumptions, and reality can evolve differently. Broadly, we believe around 40-45% of revenue could eventually come from new businesses, while the remainder would come from our core transportation-related businesses and adjacent industries.”

— Pankaj Mittal, Whole-Time Director and President

Motherson is putting its capital toward future growth by allocating a significant portion of its budget to new business ventures. This clear spending plan highlights management’s commitment to transforming the company’s revenue profile.

“What we said was that if annual capex is around ₹6,000 crore, then roughly 50% would be growth capex, and around 60% of that growth capex would be allocated toward new businesses.”

— Pankaj Mittal, Whole-Time Director and President

The aerospace division is emerging as a major growth driver with a rapidly expanding multi-billion-dollar order book. Strong customer acquisition in this segment suggests it will outpace the growth of the traditional automotive business.

“It could grow even faster. Our aerospace order book remains very strong. It was around $1.6 billion previously and has since increased by roughly another 17-18%. We are seeing strong traction, adding new customers, and expect this segment to grow significantly faster going forward.”

— Pankaj Mittal, Whole-Time Director and President

Healthcare

Biocon Ltd | Large Cap | Healthcare

Biocon is a leading global biopharmaceutical company focused on biosimilars, generics, and innovative research. It has a diversified presence across North America, Europe, and emerging markets, with a growing portfolio of complex biologics and speciality pharmaceutical products.

[Reference]

Management is now seeing the expected financial benefits from combining their biosimilar and generic business units. This integration has led to a significant jump in net profit due to better operational efficiency and lower interest expenses.

“What we wanted to achieve through this integration was operating synergies, and that’s exactly what you are seeing in the numbers. We delivered strong top-line growth in both biosimilars and generics, which was encouraging. We also maintained a clear focus on profitability, which was critical for the turnaround we were targeting. Another positive was the reduction in interest costs that we had expected, which translated directly into the bottom line and resulted in a four-fold increase in reported profit.”

— Shreehas Tambe, CEO & MD

The CEO views the latest quarterly results as the beginning of a recovery rather than a finished success. Investors should expect gradual improvements in business performance over the next two fiscal years.

“Overall, I would say it has been a very strong start. However, I would refrain from calling it a complete turnaround. I would describe it as a resilient start, and we expect performance to progressively improve through FY27.”

— Shreehas Tambe, CEO & MD

North America is currently the fastest-growing market for Biocon, leading to a temporary shift in their revenue mix. Investors should expect the U.S. market to remain the dominant growth driver as new products are launched in the coming months.

“From a geographical perspective, we have always maintained a well-diversified business mix. Historically, North America contributed around 40%, Europe around 35%, and emerging markets around 25%. These proportions keep changing. During this quarter, growth was primarily driven by North America, so its contribution increased from about 40% to 45%. Europe’s contribution reduced from 35% to 32%, while emerging markets stood at around 23%. You will continue to see these quarterly shifts. As we launch new products, particularly those we have already discussed, North America may contribute a larger share in the near term.”

— Shreehas Tambe, CEO & MD

Management expects new, high-value product launches to protect overall profit margins from the falling prices of older drugs. This balancing act is essential for maintaining consistent earnings growth in a competitive pharmaceutical market.

“As we launch new products in high-margin markets, we naturally expect EBITDA contribution to improve. That is a fair expectation, and I believe it will happen. These launches will also help offset the price erosion that naturally occurs in older products as competition increases. Legacy products will continue to see price erosion, while new product launches should compensate for part of that impact.”

— Shreehas Tambe, CEO & MD

Biocon has successfully reduced its interest burden by 22% after paying off a portion of its dollar-denominated debt. This reduction in finance costs is a key part of management’s plan to boost bottom-line profits by ₹300 crore annually.

“Interest costs have reduced significantly. Even after accounting for rupee depreciation, interest costs have declined from around ₹280 crore to roughly ₹210 crore. This reflects the repayment of dollar-denominated debt when viewed from a rupee perspective. That is an absolute reduction of nearly 22% year-on-year, which is consistent with our earlier guidance of approximately ₹300 crore reduction in annual interest costs.”

— Shreehas Tambe, CEO & MD

The company has committed to keeping research and development costs steady at 7% of its total revenue. This financial discipline allows them to invest in future products while still aiming for overall profit margins in the 25% range.

“Regarding R&D investments, we have consistently maintained that R&D spending will remain around 7% of revenue. As revenues continue to grow at double-digit rates, the absolute investment in R&D will also increase. However, as a percentage of revenue, we do not expect it to change materially. It may fluctuate between quarters, but on a full-year basis it should remain around 7%. Therefore, we do not expect R&D spending to materially impact our expectation of achieving a mid-20s EBITDA margin.”

— Shreehas Tambe, CEO & MD

Glenmark Pharmaceuticals | Mid Cap | Healthcare

Glenmark Pharmaceuticals is a global pharmaceutical company focused on branded formulations, generics, speciality medicines, and active pharmaceutical ingredients (APIs). The company has a strong presence across India, the US, Europe, and emerging markets, with a growing respiratory and injectable portfolio.

[Reference]

The company reported 18% organic revenue growth and maintained 20% margins despite rising raw material and logistics costs. This indicates strong operational efficiency as profit growth is currently outpacing revenue growth across all global regions.

“Let me first talk about the overall business this quarter. If you see, we delivered revenue growth of 23%, and even if I remove the licensing income, revenue growth was around 18% plus. It has been a very strong quarter for us. If you see, EBITDA has grown faster than revenue, which shows that the quality of our earnings is also improving. This growth has been broad-based. India continues to grow very strongly, the US has grown very strongly, emerging markets, especially Latin America and Russia & CIS, have all delivered double-digit growth, and Europe has also continued to grow. Across all geographies, we continue to perform well. Despite global cost pressures, including higher API costs, packaging material costs and logistics costs, we have been able to maintain EBITDA margins at around 20%. Overall, this quarter has been good.”

— Anurag Mantri, Executive Director & Global CFO

The company has set a formal revenue target of over $430 million for its US operations this fiscal year. This guidance is backed by multiple product launches, giving investors clear visibility into growth expectations for its largest international market.

“We expect the US business to generate more than $430 million in revenue this year, which is a significant increase compared to the previous year. We expect this momentum to continue because we have multiple launches planned across respiratory products and injectables. We continue to see a strong growth profile for the US business this year.”

— Anurag Mantri, Executive Director & Global CFO

Management highlighted the successful launch of a new respiratory drug and the restart of the Monroe manufacturing facility. The Monroe plant marks an important manufacturing milestone that should support future injectable revenues from FY28 onwards.

“Specifically in the US, we had a good respiratory launch. We launched Fluticasone Propionate Inhalation Aerosol USP, 44 mcg last quarter, and it has continued to perform very well during its exclusivity period. We also relaunched RYALTRIS through our own commercial franchise, which will contribute this year. Besides that, the Monroe facility has restarted operations. We relaunched Fulvestrant from Monroe, which is the first commercial launch from that facility. It will start contributing meaningfully from FY28 onwards.”

— Anurag Mantri, Executive Director & Global CFO

The company has brought RYALTRIS under its own commercial organisation in the US. This transition gives Glenmark greater control over commercialisation and could improve the product’s long-term revenue potential.

“In the US, Fluticasone 44 mcg, which we launched last quarter, continues to perform well. The RYALTRIS relaunch is also gaining traction. Last year, we were not generating meaningful revenue from RYALTRIS through our previous partner. We have now relaunched the product through our own commercial organisation, and we expect it to continue performing well in the US.”

— Anurag Mantri, Executive Director & Global CFO

The company expects two important respiratory approvals in the second half of the year, which should further strengthen its US product pipeline and support revenue growth.

“In the second half, we are expecting approvals for Fluticasone 110 mcg and Ipratropium. All these products should make a meaningful contribution to our US revenue this year.”

— Anurag Mantri, Executive Director & Global CFO

Automobile

Ather Energy Limited | Mid Cap | Automobile

Ather Energy designs and manufactures premium electric scooters, battery systems, and charging infrastructure in India. The company focuses on product innovation, expanding manufacturing capacity, and building a nationwide retail network to drive EV adoption.

[Reference]

Management is prioritising production ramp-up to catch up with a significant surge in consumer demand for electric vehicles. This suggests that the primary bottleneck to revenue growth is currently supply rather than a lack of market interest.

“We’ve had a good quarter. Overall, EV demand has been inflecting upward quite strongly over the last several months, and we’re finally leaning into it. We delivered around 80% growth in Q1, and we believe that growth could have been significantly higher if we had been able to ramp up capacity faster. Right now, our entire focus is on ramping up supply and manufacturing capacity. We’ll also be supporting that with a new product launch later this month. So there’s a lot keeping us busy, and that’s essentially what we communicated yesterday.”

— Tarun Mehta, Co-founder and CEO

The recent volume surge is being treated as a permanent shift in consumer behaviour rather than a temporary or seasonal peak. With market penetration at just 11% and rising in smaller towns, the company sees a long runway for expansion beyond major metropolitan hubs.

“Q1 is actually the best quarter to answer that because it is not a festive quarter. In fact, Q1 is usually weaker than Q4 since March typically sees pre-buying in our industry. This year, however, Q1 witnessed a 40-44% surge across almost every industry metric. So no, I don’t believe this is cyclical. I believe this is a fundamental structural shift. One of the biggest drivers is the growing concern among consumers regarding fuel availability. Rising petrol prices have helped, but the larger concern is whether petrol availability could become uncertain in the future. Electricity is increasingly viewed as the more reliable energy source, and that is changing consumer behaviour. I believe this is a structural reset driven by stronger consumer confidence and consumer pull. Even after this growth, electric two-wheelers still account for only about 11% market penetration, meaning nearly 89% of vehicles sold are still petrol-powered. That leaves tremendous room for growth. Underlying demand is materially higher than before. We need to launch more products, build more capacity and expand our presence across the country because EV adoption is no longer limited to the top 10-20 cities. In fact, penetration is now significantly higher in Tier 2 and Tier 3 towns. This is a much larger structural trend that is currently underway.”

— Tarun Mehta, Co-founder and CEO

Ather is utilising an asset-light dealership model to double its retail footprint to 1,500 stores over the next two years. This strategy allows for aggressive national expansion without straining the company’s own capital or operating expenses.

“Distribution was our strongest growth lever in FY26. We expanded from 350 stores to 700 stores, which itself contributed roughly 30-35% growth as part of our overall 60-70% growth last year. We believe a healthy scooter portfolio can eventually support 1,400-1,500 stores across the country. Currently, we’re only about halfway there. Financially, this expansion requires no capex or opex from our side because we operate entirely through a dealership model. Dealers invest in the stores, carry inventory and bear operating costs. Right now, we’re deliberately slowing new store additions because we don’t have enough manufacturing capacity to supply them. Once our new plant starts operations around the festive season, we expect to begin opening hundreds of new stores very quickly. Over the next two years, we believe a doubling of our store count is realistically achievable.”

— Tarun Mehta, Co-founder and CEO

The company has hit its current production limit of 35,000 units per month as demand has unexpectedly doubled to nearly 60,000 units. The activation of the new Maharashtra facility by Diwali is the key catalyst needed to resolve these immediate supply constraints.

“As a startup operating alongside much larger companies, we’ve always maintained strict cost discipline. We can’t afford aggressive spending experiments. We’ve carefully managed capacity investments, supplier capacity and overall expansion. Our existing plant capacity increased from around 15,000 units per month to 30,000 units, with a maximum capacity of 35,000 units. Eight months ago, we expected monthly demand to reach around 25,000-27,000 units, but demand has moved onto a completely different trajectory. Today, we’re seeing demand of around 50,000-60,000 units per month, so we’ve clearly hit our capacity limits. Fortunately, we had already begun constructing a new manufacturing facility using IPO proceeds. Phase 1 of our new 100-acre plant at Chhatrapati Sambhajinagar, Maharashtra, will go live by Diwali this year, with production ramping up during Q4 (January-March).”

— Tarun Mehta, Co-founder and CEO

Manufacturing capacity is set to more than double to 77,000 units per month by early next year to meet current demand levels. Management has also secured land to add even more capacity if the market continues to outpace their current growth projections.

“This plant will add 42,000 units per month of incremental capacity. Our expansion isn’t linear. Capacity will jump from 35,000 units per month to around 77,000 units per month within four to five months after the plant ramps up. That should fully address current demand. If demand remains even higher, we’ve already secured additional land and could add another 42,000 units per month over the following year.”

— Tarun Mehta, Co-founder and CEO

The company is raising ₹2,500 crore to ensure it has enough liquidity for both future manufacturing expansion and faster product development. Securing this capital provides a financial cushion to compete aggressively with larger established incumbents.

“Phase 1 at Chhatrapati Sambhajinagar is fully funded using IPO proceeds. For Phase 2, we may require additional capital, which is why we initiated a ₹2,500 crore fundraise about a month ago. We’ve already raised ₹1,300 crore through a QIP and are awaiting shareholder approval to raise another ₹1,200 crore. With the full ₹2,500 crore available, we believe we’re well-capitalised for future capacity expansion as well as accelerated product launches.”

— Tarun Mehta, Co-founder and CEO

A significant portion of the upcoming capital raise is being led by Hero MotoCorp, signalling strong strategic backing from one of India’s largest automakers. This continued investment by a key industry player and the founders themselves highlights confidence in the company’s long-term value.

“Yes. This has already been announced. Out of the proposed ₹1,200 crore preferential issue, Hero MotoCorp will invest ₹960 crore. The India-Japan Fund will invest ₹200 crore, while the founders, including myself and Swapnil Jain, will together invest ₹40 crore.”

— Tarun Mehta, Co-founder and CEO

Ather has achieved a massive 1,600 basis point improvement in EBITDA margins over the past year, bringing the company to the brink of operational break-even. This rapid improvement demonstrates strong execution in cost control and pricing power amid inflationary pressures.

“We’ve delivered a very strong improvement in our EBITDA trajectory over the last four to five quarters. Compared to Q1 last year, our EBITDA margin improved by 1,600 basis points, moving from negative 16% to positive 1% including other income. Excluding other income, margins improved from roughly negative 20% to around negative 2-3%. This improvement came from effectively managing commodity inflation.”

— Tarun Mehta, Co-founder and CEO

Management expects to reach sustainable recurring EBITDA profitability within the next three to four quarters. By shifting the product mix toward higher-margin models and growing non-vehicle revenue, the company is building a more resilient and profitable business model.

“We partially offset higher input costs through calibrated price increases that the market accepted, while also maintaining tight control over fixed costs. Looking at the broader picture, most manufacturing industries are currently facing significant raw material inflation due to geopolitical events and semiconductor-related disruptions. However, every crisis creates opportunities. We’ve responded by increasing prices where possible, improving our product mix with higher-end SKUs and increasing non-vehicle revenue, which has grown from 13% to 14% of total revenue. These are structural improvements. Commodity inflation should moderate over the next four to five quarters, but these structural gains should remain, allowing our gross margins to improve further. Combined with continued discipline on fixed costs, we believe we’re heading toward sustainable recurring EBITDA profitability over the next three to four quarters.”

— Tarun Mehta, Co-founder and CEO

Chemicals

Deepak Nitrite Ltd | Small Cap | Chemicals

Deepak Nitrite is a leading Indian speciality and performance chemicals manufacturer with integrated operations across basic chemicals, intermediates, phenolics, and advanced materials. The company is executing a large capex program to expand into high-value downstream products and application-driven chemicals.

[Reference]

Deepak Nitrite’s strong Q1 performance was driven by years of supply chain preparation rather than a temporary geopolitical windfall. Management believes this operational discipline should continue supporting growth even after market conditions normalise.

“One thing I can say is that the entire sector experienced the same weather. The question is who was able to build a roof beforehand. In any such situation, companies that are able to secure both their raw material supplies and their customer base generally perform better than those that cannot.”

— Maulik Mehta, Deputy Managing Director

The company expects future growth to be driven primarily by higher volumes rather than elevated selling prices. With raw material availability secured and customer offtake improving, management believes earnings should remain resilient even as pricing normalises.

“What we expect going forward is a normalisation of consumption patterns. Over the last six weeks, we have already seen consumption normalising. Going forward, volumes will drive both the top line and the bottom line. While realisations on a per-kilogram basis may moderate, we are already seeing moderation in raw material prices as well. Since we have secured raw material availability, we are able to avoid short-term volatility whenever geopolitical tensions in the Middle East intensify or ease. Our supplies are secure, our customer base is increasing its volume off-take compared to Q1, and our assets remain ready to support that demand.”

— Maulik Mehta, Deputy Managing Director

Deepak Nitrite is executing one of the largest expansion programmes in its history, with over ₹3,500 crore already invested. The projects move the company into higher-value downstream materials while strengthening integration across its chemical value chain.

“We have already announced a total capex outlay of approximately ₹11,000 crore over the next three years. Out of this, we have already spent over ₹3,500 crore. The first phase covered upstream integration projects, including nitric acid, MIBK, MIBC, nitration and hydrogenation. These assets are already operational. The downstream projects include the Polycarbonate plant, the Bisphenol-A plant and several specialty chemicals projects. During this year, most of the expenditure will be towards construction and licensing fees.”

— Maulik Mehta, Deputy Managing Director

Management expects return ratios to recover meaningfully once the current capex cycle is completed. As new assets become operational by the second half of FY29, the company is targeting sustainable returns above 20%.

“As you rightly pointed out, the return ratios currently include investments that are under construction and are not yet generating revenue. A large part of the investments we are making are integrated projects. All of them are expected to be online by the second half of FY29. As these assets are commissioned and gradually ramp up, we should comfortably achieve returns in excess of 20% on a regular basis, and continue building from there.”

— Maulik Mehta, Deputy Managing Director

Management emphasised that today’s lower return ratios reflect an investment phase rather than weaker business economics. The focus remains on disciplined capital allocation while pursuing long-term growth opportunities.

“I would also point out that the 40% return was achieved during a period when we were not undertaking a major capex programme. While return ratios are important, they should be viewed differently for a growth-oriented organisation. Our objective is to maintain a minimum return above 20%, while continuing to invest whenever attractive growth opportunities arise.”

— Maulik Mehta, Deputy Managing Director

Deepak Nitrite is repositioning itself from a commodity chemical producer to a higher-value materials and application chemistry company. This strategic shift has the potential to improve margins and reduce cyclicality over the long term.

“We have firmly established ourselves in both the ammonia chain and the propane chain. Going forward, we see ourselves evolving from being an intermediate chemicals manufacturer to a materials manufacturer, and from an intermediate chemical supplier to an application chemistry company.”

— Maulik Mehta, Deputy Managing Director

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Quotes in this newsletter were curated by Shahid Barmare.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 76th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 6 companies across 6 industries.

FMCG

• Marico Ltd

Real Estate

• DLF

Financial Services

• BSE Ltd

Retail

• Nykaa

Engineering & Capital Goods

• Inox India

Auto Ancillary

• UNO Minda

FMCG

Marico Ltd. | Large Cap | FMCG

Marico is a leading Indian consumer goods company with a global presence in beauty and wellness across hair care, edible oils, and personal care. The firm is currently undergoing a structural transformation to diversify its portfolio through premium personal care, healthy foods, and digital-first brands.

[Concall]

The flagship Parachute brand achieved a five-year high in volume growth following strategic price reductions and market share gains. Management is leveraging its supply chain scale to outmaneuver smaller competitors during volatile raw material price cycles.

“Parachute Rigids delivered 10% volume growth, its strongest performance in the last 20 quarters, and gained more than 400 basis points in volume share, marking a new high. Revenue grew 23%, reflecting the anniversarization of prior-year price increases and pricing actions taken during the quarter, as we proactively passed on value to consumers in non-price-point large packs amid softening copra prices. Beyond the strong quarterly outcome, the performance underscores the enduring strength of the franchise and the competitive advantage we have built in the supply chain compared with smaller players over the decades. Our expertise in managing commodity cycles, combined with a differentiated supply chain and sharp execution, enables us to respond faster to market changes, based on the learnings from the past few cycles in which we have taken price drops.”

— Saugata Gupta, MD & CEO

While primary raw material costs for coconut oil remain low, rising crude and vegetable oil prices will likely pressure margins in the second quarter. The company remains committed to its long-term vision of reaching 20,000 crores in revenue by the end of the decade.

“Copra prices have corrected meaningfully. While they have seen some upward bias recently, we expect prices to remain range-bound at around 35% lower than last year’s peak levels. On the other hand, crude and vegetable oils continue to exhibit an upward bias, and consequently, we expect input costs to be relatively higher in Q2. As we advance towards our Vision 2030 of achieving 20,000 crores in revenues with a mid-teens EBITDA CAGR, our focus remains clear: strengthen our core franchises, expand into adjacencies where we have the right to win, scale up our digital businesses profitably, and further diversify our international growth engines.”

— Saugata Gupta, MD & CEO

The company intends to challenge dominant players in the almond hair oil segment using its improved distribution network. Management sees this as a major disruption opportunity similar to their historical success in the amla hair oil market.

“Coming to the almond category, in any category where a market leader makes supernormal profits without significant innovation, there is a case for disruption. We proved that with Amla when we started that journey. At one point, we had 9% market share while the leader had 78%, and then we achieved market leadership. I believe there is a case for disruption in this category. Over the last 1-2 years, our resource allocation matrix has focused on fewer, bigger, better, and bolder initiatives. Project Setu has given us access to distribution and provided us with a case to believe that we can take significant market share in this category. Our ability to execute has reasonably developed today; it is a machine that is executing this strategy. Therefore, given the size of the category, I believe 100 crores is a fair ambition.”

— Management, Executive

Investments in AI for demand forecasting have allowed Marico to maintain very low inventory levels at the distributor level. This efficiency enables the company to pass on price changes to consumers much faster than the industry standard of two months.

“The other thing we have done very well this time is that, because of significant investment in AI-led demand sensing and forecasting and across the entire supply chain, our overall pipeline is very thin. I believe that, across the entire FMCG category, our distributor stock is going to be among the lowest. Therefore, in the past, any price drop used to take 8-10 weeks to take effect in the market. This time, it has happened much faster. Secondly, what has also changed is that, by taking only one price drop, and because the other thing we did last year was to smoothen all trade spends, with no month-end spends, the pipeline is extremely clear. There are no blockages in the pipeline. This has resulted in a significant impact in terms of growth returning in the larger packs.”

— Management, Executive

Despite extreme seventy percent price spikes in packaging and crude-based materials, the company expects to maintain its gross margins. The financial math implies a potential operating margin expansion of up to 150 basis points for the full year.

“If you look at the gross margin in this quarter, we expanded by approximately 30 basis points versus Q1 FY26. While there are benefits from lower copra prices, at the same time, you also have to be mindful that crude-led derivatives such as LLP and polymers are experiencing a significant cost increase. For both these items, the cost increase has been in the range of 60-70%. Therefore, it will be a mix of gains from the consumption of lower copra prices that we witnessed in Q1 and the higher impact of LLP, polymers, and edible oil prices. We have not passed on the entire cost impact to the consumer. On the guidance side, it is very difficult to provide guidance on gross margin because we believe it will be a mix of both factors. However, we will try to hold the gross margin percentage at the level of last year. Regarding EBITDA margins, providing quarter-wise guidance could be difficult. However, on a full-year basis, you heard Saugata mention that high-teens growth is the base case, and we will try for 20% growth for the full year. If you do the reverse math and assume that 15,000 crores is something we should definitely deliver, the reverse math would suggest that EBITDA margin could expand by around 140-150 basis points compared with last year.”

— Management, Executive

The company is prioritizing cold-pressed oils because they offer significantly higher profit margins than traditional edible oils. Management is willing to sacrifice lower-margin sales in certain channels to improve the overall quality of earnings for the Saffola brand.

“I believe cold-pressed oil is a category of the future, and therefore we are investing in it. I believe that by next year it will represent a sizable portion of the Saffola business. It also makes sense for multiple large players to invest behind the category and grow it. It is a category of the future, and that is what we are pivoting towards. We are selectively choosing not to have a certain part of the Saffola business in some channels below a threshold level of profitability. To answer your question, Saffola Gold has not been impacted by cold-pressed oils. It has a gross margin that is far superior to the core Saffola edible oil gross margin.”

— Saugata Gupta, MD & CEO

Real Estate

DLF | Large Cap | Real Estate

DLF Limited is a real estate development company engaged in colonization, land acquisition, planning, construction, and marketing of projects. They also offer leasing, maintenance services, and recreational activities, contributing to the overall development of their business.

[Concall]

While discussing financial reporting, the company highlighted when the significant embedded profits from its ongoing projects will begin flowing through the P&L.

“We strongly believe that FY28 would be an inflection point from a reporting perspective, wherein all our large products, starting from The Arbor, will start to contribute to the P&L. Consequently, we will start to unlock the significant gross margin potential that we have been highlighting over the last several quarters. Just to remind you, the gross margin potential as it stands today is approximately ₹39,000 crore.”

— Badal Bagri, Group CFO

After a period of uncertainty driven by AI concerns and geopolitical tensions, management believes leasing activity is picking up again.

“Over the last two quarters there has been a fair amount of debate on the impact of AI on hiring by multinationals and GCCs. There was also uncertainty because of the Iran-US conflict. These factors slowed decision-making, but over the last four to five weeks I personally see green shoots of international companies coming back, making enquiries and starting to take decisions. I believe Q2 and Q3 will be good quarters from that point of view.”

— Sriram Khattar, Vice Chairman & Managing Director, Rental Business

While responding to a question on sales momentum, management highlighted the remarkable success of the flagship ultra-luxury project.

“Dahlias has been the biggest success so far over the last eighteen months. We are almost 65% sold. We have created history in terms of the first nine weeks of sales as well as in terms of the collections that are coming in. The price realisation of Dahlias is now over ₹1 lakh per square foot and on the higher floors it is touching ₹1.20 lakh to ₹1.25 lakh per square foot.”

— Akash Ohri, Managing Director & Chief Business Officer

The company explained why sales may appear slower despite very strong demand.

“The pricing algorithm for Dahlias states that the price increases now are going to be reasonably steep. Therefore, the entry level for Dahlias is now ₹100 crore plus. It requires that kind of attention and time.”

— Akash Ohri, Managing Director & Chief Business Officer

The buyer profile for Dahlias has expanded well beyond Delhi-NCR.

“The good thing is that we now have interest in Dahlias from all over the country and outside India. More than 25% to 30% of our business is now coming from the rest of India and outside India through NRIs. There is considerable interest in Dahlias across the country.”

— Akash Ohri, Managing Director & Chief Business Officer

Responding to questions on data centres, management clarified its long-term strategy.

“The data centre business consists of three different components. One is real estate, the second is power, and the third is the technology. At DLF, we have decided to focus only on the real estate business. We are constructing data centres for companies as real estate developers, but we are not getting into the business of buying the technology and running the data centres ourselves, and we do not intend to do so.”

— Akash Ohri, Managing Director & Chief Business Officer

Investors questioned whether delays in the Goa residential project could affect the company’s annual pre-sales target. Management remained confident of achieving its guidance.

“The Goa component, if at all it was included in the ₹20,000 crore guidance, was only about a couple of thousand crore—roughly around 10% of the guidance. Hopefully, we should be able to make up for it very comfortably. I don’t think we should be losing any sleep over that number, frankly.”

— Ashok Tyagi, Managing Director

Following the success of its first Mumbai project, the company indicated that it is actively evaluating additional opportunities.

“We have looked at some opportunities and we are exploring others as we speak. This project was supposed to be a dipping-our-toes-in-the-water project for us. Fortunately, it has done very well. We feel much more enthused and confident about being able to work in Mumbai, but we will obviously remain very selective in taking projects where we believe we can truly add value. In that sense, Mumbai continues to be part of our medium- and long-term strategy.”

— Ashok Tyagi, Managing Director

Management clarified speculation around the future development mix within the Privana township.

“To reiterate, Privana continues to be a high-rise scheme. The small plotted enclave there, if at all, will only be for certain collaborator obligations and nothing else.”

— Ashok Tyagi, Managing Director

The company provided an updated outlook for rental income across the group.

“At the group level, the exit rentals for FY27 will be between ₹7,300 crore and ₹7,500 crore.”

— Ashok Tyagi, Managing Director

Discussing buyer behavior at the ultra-premium end, the company said demand continues to be driven by genuine wealth creation rather than speculative activity.

“We continue to see very strong demand in the luxury segment. The buyer profile is becoming broader, with participation not only from Delhi-NCR but also from other parts of India and overseas. The quality of demand continues to remain extremely encouraging.”

— Akash Ohri, Managing Director & Chief Business Officer

Rather than accelerating sales volumes, DLF intends to maximize long-term value through calibrated price increases.

“We are not in any hurry to sell. We believe the product deserves the pricing it commands, and we will continue to increase prices in a calibrated manner while maintaining the exclusivity of the development.”

— Akash Ohri, Managing Director & Chief Business Officer

Despite temporary delays in leasing decisions, management believes India’s GCC story remains firmly intact.

“The demand from global capability centres remains very healthy. There may have been some delays in decision-making because of global developments, but we do not see any structural change in demand.”

— Sriram Khattar, Vice Chairman & Managing Director, Rental Business

Financial Services

BSE Ltd | Mid Cap | Exchanges

BSE Ltd. is one of India’s leading stock exchange groups, facilitating trading in equity, debt, and derivatives. It also operates significant subsidiaries in clearing, settlement, and mutual fund distribution through platforms like BSE STAR MF.

[Concall]

BSE reported a significant jump in revenue driven primarily by transaction charges across its trading and clearing platforms. Investors should note that a large portion of operating costs are variable and move in lockstep with trading activity, protecting margins during volume surges.

“Operational revenues have grown by 63% to rupees 1,566 crores from rupees 958 crores. Transaction charges, comprising revenues from the equity cash, equity derivatives, mutual fund, and clearing house segments, have registered a substantial increase of 80%, rising to rupees 1,328 crores from rupees 737 crores, reflecting robust growth in core trading and settlement-related activities. Other operating income, which includes enhanced data dissemination fees, co-location, index services, and other items, has increased by 40% to rupees 98 crores from rupees 70 crores. Operating expenses increased by 56% to rupees 520 crores from rupees 332 crores. It may be noted that 54% of the total operating expenses are attributable to regulatory fees and clearing and settlement expenses, all of which are directly correlated to increasing transaction volumes.”

— Sundararaman Ramamurthy, MD & CEO

BSE has seen a massive influx of new investors, with registrations reaching nearly 26 crore accounts across the country. This broad geographical growth in the retail base provides a larger pool of potential participants for the exchange’s various trading products.

“The total number of investor accounts registered on BSE has reached an impressive 25.8 crore, reflecting the steady expansion of retail participation across the country. Over the past year alone, we added 3.5 crore new investor accounts, with 11 states each contributing more than 1 crore investors. This clearly underscores the true democratic and geographic expansion of India’s capital markets. Complementing this structural growth, we conducted 23 investor awareness programs during Q1 FY27, reaching over 4,900 participants. Looking ahead, BSE remains deeply and unbreakably committed to expanding investor awareness and advancing financial literacy. We view this educational mandate as a key pillar for promoting informed investment decisions, safeguarding investor interests, and securing the long-term sustainable growth of India’s financial ecosystem.”

— Sundararaman Ramamurthy, MD & CEO

The exchange’s derivatives business has doubled its premium turnover by introducing specialized sector-specific products like IT index options. Continued success in product innovation allows BSE to differentiate itself from competitors and capture a higher share of institutional hedging activity.

“Our derivatives segment delivered yet another record performance, with the average daily premium turnover reaching an all-time high of rupees 29,615 crores during the quarter, representing robust year-on-year growth of 96%. Crucially, our strategic focus on expanding market depth is delivering measurable results. During the quarter, we successfully launched derivatives on the BSE-focused IT index, which has already completed 3 expiry cycles, with trading activity and market participation continuing to gain momentum with every passing expiry cycle. By introducing these contracts, BSE became the first exchange in India to offer derivatives products benchmarked to the vital IT sector. This met an immense market demand for hedging and tactical risk management in technology portfolios. The early adoption of the focused IT index, combined with our growing derivatives volume, proves that our platform enhancements and unique product designs are resonating deeply with market participants.”

— Sundararaman Ramamurthy, MD & CEO

BSE is taking full control of its global data distribution by ending a long-term partnership, which could lead to better monetization of its market data. Direct management of data licensing and rebranding its clearing arm strengthens the company’s independent brand identity and revenue potential.

“Starting January 1, 2027, BSE will conclude its 13-year marketing partnership with Deutsche Börse and directly manage the distribution and licensing of our market data worldwide, standardizing our outreach and establishing a direct line of engagement with our international client base. Our key subsidiaries, the Indian Clearing Corporation Limited, ICCL, and BSE Index Services, continue to scale through new client acquisitions, product innovation, and enhanced technology adoption. Furthermore, our clearing corporation, formerly known as ICCL, has been rebranded as BSE Clearing Limited, reinforcing its strong alignment with the trusted BSE brand and strengthening its position within India’s financial market infrastructure ecosystem.”

— Sundararaman Ramamurthy, MD & CEO

BSE is diversifying into new asset classes like digital pension products and electronic gold receipts to expand beyond traditional stock trading. These initiatives aim to capture long-term retail savings and modernize how investors hold physical assets like gold.

“We have recently, through our subsidiary, provided a platform to enhance the penetration of pension schemes as a process through PFRDA NPS. We call it STAR NPS. It is early days, but we feel that this is going to be another product that will revolutionize the market and make people think very seriously about pensions, which are part of retirement planning that everybody has to undertake. We are also thinking in terms of promoting electronic gold receipts because, as you know, excessive interest in gold can lock all our resources into physical gold. Instead, if we start with electronic gold receipts, it will be a movement away from physical gold and a move towards more dematerialized assets that mimic gold and could be good for the economy. That is another area we are working on.”

— Sundararaman Ramamurthy, MD & CEO

Retail

Nykaa | Mid Cap | Retail

FSN E-Commerce Ventures Limited, known as Nykaa, is a digitally native consumer technology platform offering a content-led, lifestyle retail experience. Established in 2012, the company focuses on brand discovery, offering a diverse range of beauty, personal care, and fashion products. Nykaa has its own brand products and provides consumers with an Omnichannel experience catering to their preferences and convenience.

[Concall]

Management estimates their target market will expand to 100 million online shoppers within five years as India’s income levels rise. This large pool of potential customers provides a long runway for future growth.

“The answer definitely lies in the fact that online Fashion has reached a level of approximately 55-65 million consumers who have bought Fashion online. These are serious online Fashion consumers. In many ways, we have always believed that this represented the available headroom for us. On top of that, given the way income levels are shifting, we believe that number itself will be about 100 million in the next 5 years. We therefore believe that somewhere between 65 million and 100 million will be the relevant TAM for Nykaa.”

— Falguni Nayar, MD & CEO

The quick-delivery service is helping Nykaa sell everyday personal items like face washes that people previously bought elsewhere. This opens up a new, frequent revenue stream from basic hygiene products that weren’t core to their luxury-focused platform.

“What is interesting on Nykaa Now is that new subcategories are starting to see incremental growth, such as certain personal-care categories that customers need in a hurry. These include low-ASP face washes, cleansers and bath gels. These are also purely incremental business for us because historically Nykaa did not have a significant role to play in these categories.”

— Anchit Nayar, CEO Beauty

Management is scaling its 60-minute delivery service, Nykaa Now, to more than 25 cities to compete in the quick-commerce space. By offering a much wider beauty assortment than general competitors, they aim to capture more frequent and unplanned consumer purchases.

“I’m happy to say that Nykaa Now has expanded and accelerated its growth quite remarkably. From being present in just three cities with a limited assortment in Q1 FY26, today we are present in 13 cities with more than 1,000 brands available through Nykaa Now. We are not only delivering packages within 60 minutes, which we believe is competitive, but more importantly, we are offering the widest assortment of beauty and personal care products available among any of the quick-commerce platforms in the country. We are combining speed with choice, and I think that is an important differentiator in our strategy. In terms of expansion, we plan to be present in more than 25 cities by the end of FY27.”

— Anchit Nayar, CEO Beauty

The beauty segment is growing by both reaching more people and encouraging existing customers to spend more per order. This dual approach indicates a healthy customer base that is maturing and buying higher-value products over time.

“We have spoken in the past about the two main pillars of the Beauty vertical’s growth strategy: penetration and premiumization, and both of those pillars are playing out nicely for us. On the penetration side, we have increased the number of visits to our platform to close to half a billion in Q1 FY27, which is a 22% year-on-year growth. The number of annual unique transacting customers on the platform has now crossed 20 million. In terms of premiumization, we are seeing positive signs on that front, with average order values at the aggregate level growing by roughly 5%. If I look at the average order values split between new and existing customers, the growth and premiumization of the customer’s basket is even more obvious.”

— Anchit Nayar, CEO Beauty

Engineering & Capital Goods

Inox India | Small Cap | Engineering & Capital Goods

INOX India Limited is an ISO 9001 and OHSAS-18001 certified Cryogenic Engineering Company specializing in insulation technology equipment and systems. They are the largest manufacturer of Cryogenic liquid storage and transport tanks in India, serving top Gas Companies globally like Air Liquide, Linde, and Praxair.

[Concall]

After receiving more than ₹500 crore of orders in consecutive quarters, management indicated that lumpy aerospace and mini-LNG terminal orders could drive growth significantly above its earlier assumptions.

“We normally receive many lumpy orders, such as the order we recently received from the aerospace company and perhaps a few mini-LNG terminal orders. Such projects definitely increase our order intake substantially.

We are quite hopeful that there are many such projects in the pipeline, and if they all come to us, our growth will definitely be much higher than what we had anticipated.”

— Deepak Acharya, CEO

Management identified Chart Industries as the only known competing manufacturer for the large cryogenic tanks supplied to the space customer.

“There is only one competitor that we know of from the US, and that is Chart Industries, as a manufacturer. There are very few companies in the world with the capability to manufacture large tanks.”

— Deepak Acharya, CEO

Inox India is supplying multiple semiconductor projects and expects to address both high-purity cryogenic equipment and specialised pipeline execution.

“We are concentrating all our efforts on growing multifold in the semiconductor business. We are supplying equipment to Micron, Foxconn, the Tata Assam project, the Tata Dholera project, and many more customers now.

Cryogenic equipment and transfer lines for vacuum-jacketed lines are some of the capital equipment required, and the industrial gases supplied to these facilities need to be of very high purity, of the order of 5N or 6N categories. We are one of the pioneers in manufacturing such equipment. We have already supplied equipment to Singapore and Japan. Therefore, we have a very good quality setup for manufacturing such equipment.”

— Deepak Acharya, CEO

The company received more than ₹30 crore of equipment orders from Dholera and stated that it had not lost any semiconductor order opportunity so far.

“We entered the semiconductor business only in the last two or three quarters, and we are capturing 100% of the opportunities that are coming in. However, it is difficult for me to tell you the exact total value of the orders at this moment.

We recently received orders from the Dholera project worth around ₹30 crores or more for tanks, storage equipment, and transport equipment. We had earlier also received an order from Micron. We are not losing orders; that much I can tell you. Knowing our engineering capabilities, manufacturing excellence, and experience in manufacturing such equipment for more than a decade, we are quite well placed to execute these orders.”

— Deepak Acharya, CEO

The company has begun training specialised workers to address an acute manpower shortage at Indian semiconductor plants, with individual projects requiring hundreds of trained personnel.

“While discussing with these major semiconductor complexes, we found that there is a shortage of people in this area, and it is difficult to execute these projects without the support of such people. When we talk about the Micron project in Ahmedabad, for example, they require at least 200 to 300 skilled workers to manage this pipeline. At present, India does not have these skilled people.

We have started training people. Our first batch has now qualified, and we will be supplying trained people to most of the semiconductor projects in India. We see significant potential going forward for this semiconductor pipeline business in India.”

— Deepak Acharya, CEO

The widening cost advantage over diesel has improved LNG economics, with three PSUs collectively evaluating roughly 20–25 fuelling stations.

“Regarding LNG, what we have seen over the last few quarters, especially in India, is that growth was not very fast. However, now, given that LNG prices are slightly lower compared to the earlier figures, we are seeing some movement in the segment.

The delta between diesel and LNG is now quite substantial. Because of this, we have seen many fuelling and city-gas-distribution companies emphasising fuelling stations. We have already received requests for quotations from PSUs, with at least three PSUs contributing to almost 20–25 stations going forward. The automotive industry and the Government of India are also pushing this strongly. The marine sector is moving very fast, and the shipping industry is using LNG on a larger scale.”

— Deepak Acharya, CEO

Management elaborated on the economics and potential applications of the Wayout partnership, positioning it as a decentralized drinking-water solution rather than just another manufacturing contract.

“The basic purpose of this micro-factory is to utilize any source of water and convert it into drinkable, potable water. It can be installed at the user’s point of need and produce almost 20,000 litres of water every day, catering to almost 1,000 people at a time. We have not worked out the approximate price yet, but it will be less than ₹10 lakh for the micro-factory and associated equipment such as kegs and dispensers.”

— Deepak Acharya, CEO

Management sees an opportunity to leverage its existing keg manufacturing capabilities to address the packaged drinking water market while reducing plastic usage.

“The biggest advantage is that you can avoid using plastic bottles for water storage and instead use the stainless-steel kegs that we produce. This will reduce carbon emissions and other environmental impacts to a significant extent. This is the basic idea behind developing this product and getting it manufactured in India at competitive pricing.”

— Deepak Acharya, CEO

Beyond the financial impact, management emphasized that repeat orders from leading global scientific institutions strengthen the company’s positioning in high-end cryogenic engineering.

“We secured a prestigious order from CERN for highly specialized cryogenic modules. We also received another important order from ITER France. These projects continue to demonstrate our capability to deliver highly specialized cryogenic systems for globally significant scientific infrastructure.”

— Deepak Acharya, CEO

Auto Ancillary

UNO Minda | Mid Cap | Auto Ancillary

Uno Minda specializes in producing and trading auto components like lighting, alloy wheels, horns, seating systems, seatbelts, switches, sensors, controllers, handle bar assemblies, and wheel covers. It serves markets in two-wheelers, three-wheelers, and four-wheelers both domestically and internationally, offering a wide range of automotive solutions.

[Concall]

Management shared its macro outlook, highlighting India’s structural advantages despite global uncertainties.

“India remains firmly among the world’s fastest-growing major economies, supported by resilient domestic consumption, a thriving services export sector, and sustained government capital expenditure. Looking further ahead, anticipated trade agreements with the US, UK, and EU are expected to significantly enhance trade flows, attract long-term private investment, and strengthen India’s structural growth prospects. For Indian manufacturers with the capabilities, scale, and technology credentials to compete globally, this is a moment of genuine and historic opportunity.”

— Sunil Bora, Group CFO

Management highlighted another record quarter driven by broad-based growth across product categories.

“We reported another strong quarter in which we continued to scale new heights, once again surpassing our previous peaks to achieve our highest-ever quarterly revenue. This growth was broad-based and high-quality, driven by value-added features and volume expansion across our core product offerings, including switches, lighting, alloy wheels, seating, and our rapidly scaling EV systems and alternate fuel divisions.”

— Sunil Bora, Group CFO

Management highlighted sustained market share gains in the switching business.

“Our switching system vertical delivered another strong quarter. Growth was driven across both our two-wheeler and four-wheeler switch businesses. In two-wheelers, sustained domestic volume growth was complemented by a consistent upward trajectory in exports, while our four-wheeler switch business continued to outperform the industry.”

— Management

Management discussed an important customer addition in the lighting segment.

“We received a business nomination from a global OEM for domestic four-wheeler lighting supply in India—a strategic entry into a new customer that opens the door to incremental customer share and cross-selling opportunities.”

— Management

Management highlighted emerging opportunities beyond conventional lighting.

“Interior ambient lighting is gaining commercial traction, with positive customer decisions that open an entirely new avenue of growth for our lighting portfolio.”

— Management

Management believes recent weakness in alloy wheel adoption is reversing.

“We had seen some temporary moderation in alloy wheel penetration over the last few quarters; however, we are seeing early signs of penetration inching up again.”

— Management

Management explained the long-term opportunity in die casting.

“The structural growth drivers for this business—light-weighting, EV platform requirements, and domestic content mandates—remain firmly intact. Near-term headwinds seem to be receding, and the business is expected to return for another upturn.”

— Management

Management described why entering passenger vehicle seating is strategically important.

“We announced our entry into the four-wheeler passenger vehicle seating system segment, one of the highest-value product categories in the automotive supply chain. It is a strategic leap that substantially increases our per-vehicle value potential and deepens our footprint in a segment central to the premium vehicle experience.”

— Management

Management highlighted the scale of the seating opportunity.

“Seating as a product has consistently been adding a lot of value. It is going up to almost ₹30,000–40,000 as a kit value per car. This will be one of the largest kit-value products in the group, or perhaps even larger than the alloy wheel segment in terms of kit value per car.”

— Management

Management outlined the drivers behind EV business growth.

“The growth in the two-wheeler EV business was contributed by multiple drivers, including new programs for DC-DC converters, electric motors and RCD cables, while EV chargers continued to grow through higher volumes, increased penetration with existing customers and higher share with newly added customers.”

— Management

Management emphasized its confidence in future growth.

“We are encouraged by the strong order pipeline across several emerging technology platforms, including EV powertrain systems, lighting, seating, sunroofs, infotainment and advanced electronics. These platforms provide excellent long-term visibility and reinforce our confidence in sustainable growth.”

— Management

Management explained why it remains confident despite cost inflation.

“Despite high commodity prices, we are maintaining our 11% margin guidance. We have been able to take a lot of actions in terms of automation, efficiencies and productivity, and absorb a large part of the wage increase as well.”

— Management

Management shared why it is excited about entering the passenger vehicle seating business.

“We are very positive about the seating business opportunity. We are very excited that we have finally been able to enter and break into four-wheeler seating, and this business can grow multi-fold as we move forward. However, we need to ensure that we provide not only better prices but also better features at better prices.”

— Management

The company believes regulatory and consumer trends continue to favour suppliers with advanced technologies.

“Higher feature content, premiumization and increasing electronic content in vehicles continue to improve our content per vehicle across multiple product categories.”

— Management

The company expects penetration trends to improve after a period of moderation.

“The softness in alloy wheel penetration appears to be behind us. We are beginning to see penetration levels improve again.”

— Management

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Quotes in this newsletter were curated by Meher & Srusti.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human, and mistakes are AI.

Welcome to the 75th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 8 companies across 5 industries.

We want to experiment a bit with The Chatter format. Until now, we covered around 15 companies every week. Going forward, we’ll instead publish three editions a week, with each one covering five to six companies.

The idea is that covering fewer companies in each edition means we can give you quicker and focused context on everything we cover. It would also mean each edition would be less overwhelming.

We’ll experiment with this format for the next few weeks. Let us know what you think about it.

Energy

• Indian Oil Corporation Limited

• Mahanagar Gas Ltd

Financial Services

• Muthoot Finance Ltd

• Bajaj Finserv Limited

• Aptus Value Housing Finance India Ltd

Automobile

• Maruti Suzuki India Ltd

Healthcare

• Divi’s Laboratories Ltd

Services

• Urban Company Ltd

Energy

Indian Oil Corporation Limited | Large Cap | Oil & Gas - Refining & Marketing

Indian Oil Corporation is India’s largest integrated energy major, operating a massive network of refineries, pipelines, and retail fuel stations across the country. The company is currently diversifying its portfolio by making significant investments in petrochemicals, green hydrogen, and renewable energy to support India’s evolving energy transition.

[Concall]

The company has significantly shifted its sourcing strategy toward spot market purchases and a wider variety of global suppliers to bypass geopolitical disruptions. This flexibility is essential for maintaining consistent refinery operations and managing costs during periods of high global volatility.

“Indian Oil continues to import secure, reliable, and economically competitive crude oil grades from diverse countries while managing the challenges of high market volatility, as well as logistical challenges relating to ships, insurance, freight costs, and other factors. Amid the disruption, we diversified our sourcing by increasing imports from other geographies such as Russia, Venezuela, Brazil, and even African countries, thereby ensuring continuity of crude oil imports to maintain our planned refinery operations. Spot imports for the quarter stood at about 84%, against 51% last year.”

— Anuj Jain, Director - Finance

Global political instability and fluctuating crude prices have put severe pressure on the profit margins for selling fuel at retail stations. While total revenue increased due to higher prices, these external costs ultimately pushed the company into a quarterly loss.

“The reported loss needs to be viewed in the context of heightened geopolitical tensions and ongoing conflicts, which led to significant volatility in international crude and product prices and resulted in considerable pressure on marketing margins on retail fuels, particularly impacting the quarter’s profitability. Revenue from operations during the quarter stood at Rs.2,75,972 crore, against Rs.2,32,855 crore in the immediately preceding quarter of this year. The sequential increase in revenue was mainly driven by higher product prices.”

— Anuj Jain, Director - Finance

Management absorbed some of the rising global oil costs to keep domestic fuel prices stable for consumers. They believe that as global markets stabilize, their strong sales volumes will allow for a fast recovery in profit margins.

“While we responsibly absorbed a portion of international crude price spikes to shield the domestic markets from inflationary pressure, our overall volume footprint remains solid, uniquely positioning us for rapid margin recovery as global energy dynamics normalize and our optimized product mix takes full effect. Talking about the numbers, let me briefly touch upon the major verticals.”

— Nitin Kumar, ED Corporate Finance & Treasury

Several massive expansion projects at key refineries are nearing completion and are expected to go online later this fiscal year. This new capacity will allow the company to process more crude and increase its output of refined products starting in late 2026.

“The major refining and petrochemical expansion projects across Panipat, Barauni, Gujarat, and Paradip are at an advanced stage of execution and are targeted for completion during FY26-27. Phase-wise commissioning of process units, utilities, and offsite facilities is being undertaken in a structured manner to enable progressive capacity build-up and integration. As far as the Panipat refinery expansion is concerned, it is expected to be completed by December 2026, Barauni by December 2026, and Gujarat by November 2026.”

— Nitin Kumar, ED Corporate Finance & Treasury

Management expects the government to provide financial assistance to offset the losses from selling cooking gas at subsidized rates. For investors, this sovereign support is a vital safety net for the company’s cash flow when global prices are high.

“Regarding LPG in particular, we are hopeful that we will receive reasonable support from the Government of India. Based on past experience, we have seen that the government has fully extended support to PSU OMCs. Therefore, based on past practice, we are confident that suitable compensation for LPG under-recoveries will be considered.”

— Nitin Kumar, ED Corporate Finance & Treasury

The company is entering a joint venture to acquire its own shipping vessels to better control its supply chain. Owning transportation assets will help the company manage freight costs and ensure more secure delivery of energy products.

“Under the aegis of the Ministry of Petroleum and Natural Gas (MoPNG) and the Ministry of Shipping, a non-binding MOU was signed on September 19. Under this, Indian Oil will explore procuring four MR vessels to begin with. This is a JV in which we will have other partners, including other oil and gas partners.”

— Anuj Jain, Director - Finance

The company’s debt rose significantly this quarter to cover higher working capital needs caused by expensive oil prices. While the increase is large, management maintains that their strong balance sheet allows them to borrow at favorable interest rates.

“In absolute numbers, my borrowings increased significantly by Rs.31,000 crore in a single quarter. However, because this is not the first time that oil-sector companies have seen such borrowing levels, we have banking arrangements to obtain money from banks at very competitive rates and manage the situation. Nevertheless, the situation becomes very strong in the sense that our borrowing increased by Rs.31,000 crore in a single quarter.”

— Anuj Jain, Director - Finance

Indian Oil is aggressively expanding into the green energy sector with a massive goal of 18 gigawatts of renewable capacity. This transition is intended to future-proof the business as the global economy shifts away from traditional fossil fuels.

“We have a target of 18 gigawatts of renewable power over the next 3-4 years. We have the 100% owned subsidiary company Tera Green, where we are putting in significant effort to commence our renewable operations. Already, 4-5 gigawatts of work is underway at various stages.”

— Anuj Jain, Director - Finance

Mahanagar Gas Ltd. | Mid Cap | Gas Distribution

Mahanagar Gas Limited is a prominent Indian city gas distribution company providing natural gas to Mumbai and its surrounding regions. The company manages an extensive network of pipelines supplying CNG for the transport sector and PNG for domestic, industrial, and commercial users.

[Concall]

Management highlights that while residential and vehicle supply is secured by domestic gas, the industrial segment faces supply cuts and potential price hikes. This prioritization protects core volumes but exposes industrial margins to global price volatility.

“100% of our domestic PNG and DPNG requirements and the major portion of our CNG requirement are sourced from domestically produced natural gas, ensuring uninterrupted supply to our DPNG customers and continued reliable supply to our CNG customers. Gas supplies to industrial and commercial customers are partly curtailed. Prices may be affected due to global indices in the near term.”

— Praveer Kumar Srivastava, Managing Director

The management details a diversified gas sourcing mix with a reliance on multiple price indices beyond regulated domestic gas. This complex sourcing structure means that blended gas costs will fluctuate based on international spot and hub prices.

“At a company level, roughly 30% is available through APM, and nearly 21-22% is available through NWG and pooled gas put together. Roughly 14-15% is through HPHT, and another... Our actual signed contract with respect to Henry Hub was higher, but roughly 21-22% has been received through the HH contract, and the rest is through some small Brent contracts or whatever we could buy through IGX and spot.”

— Rajesh Patel, Chief Financial Officer

Realizations in the non-regulated segments have risen sharply because they are indexed to expensive alternate fuels like LPG and furnace oil. This pricing mechanism allows the company to capture higher margins when global oil prices are elevated.

“In the industrial and commercial segment for this quarter, as you know, we have been pricing our industrial and commercial customers linked to alternate fuel. In the case of commercial customers, it is mainly linked to bulk commercial bottled LPG, and for industrial and commercial customers, it is linked to FO and LDO. Compared to the previous quarter, there was an increase in the range from Rs 27 per cubic meter to almost Rs 32 per cubic meter.”

— Rajesh Patel, Chief Financial Officer

The ongoing West Asian crisis is creating significant uncertainty regarding gas availability and procurement costs. Investors should expect short-term margin volatility until geopolitical tensions stabilize and supply chains normalize.

“Since supply has been impacted, prices and the quantity available have also gone up. It is very difficult to tell you what the margin could be for at least this quarter or going forward unless there is a complete resolution of this conflict in West Asia. However, we have been making an attempt to minimize our weighted average gas cost.”

— Praveer Kumar Srivastava, Managing Director

Management is warning of continued pressure on profitability due to high spot gas prices in the immediate term. This transparency suggests that upcoming quarterly results may reflect higher input costs that aren’t immediately passed to consumers.

“You may see some spike for at least the next 1-2 months. That is the current situation, which you can see in the pricing of JKM and in the spot market. It is very difficult to give a call on margins. They will definitely be under pressure for at least 1-2 months until this crisis is resolved or some settlement happens.”

— Praveer Kumar Srivastava, Managing Director

MGL’s volume growth is primarily driven by the significant cost advantage CNG holds over traditional liquid fuels. Maintaining this price differential is the key strategic priority for ensuring long-term vehicle conversions.

“We have been maintaining some legroom between petrol and diesel prices and CNG prices. As you could see, CNG is roughly 40-45% more competitive compared to petrol and in the range of around 12% compared to diesel. If we maintain that, it should be sufficient to drive our volumes.”

— Praveer Kumar Srivastava, Managing Director

Management believes the threat of electric vehicle (EV) buses is limited to state transport, with private operators likely to stay with CNG due to high capital costs for EVs. This protects a significant portion of MGL’s commercial gas volumes from near-term disruption.

“In the case of private operators, however, there may not be an incentive to adopt EV buses because the capital cost is much higher while revenue remains similar. Unless financing becomes available, which is really difficult for private operators because there is no lifecycle available and financing is obtained at a very high rate, we will not see much penetration among non-STU operator buses.”

— Praveer Kumar Srivastava, Managing Director

Management explains that while priority sector status helps, sourcing from High Pressure High Temperature (HPHT) fields requires competitive bidding. This shift toward market-based gas discovery will likely lead to higher average gas costs for the industry over time.

“HPHT is not allocation-based; you have to bid and buy it. The only point is that CGD gets priority. Whenever a long-term contract is offered for sale by the producer, HPHT is generally the maximum, so it gets apportioned among all the CGDs.”

— Rajesh Patel, Chief Financial Officer

MGL expects a surge in domestic PNG conversions as the government begins mandating the switch from LPG cylinders in gas-equipped buildings. This regulatory push is expected to convert ‘dormant’ connections into active, revenue-generating customers.

“As far as volume growth is concerned, domestic PNG is an area where growth is limited by the population and the number of households in that sector. Almost 50-60% of those connected but not consuming gas will be tapped because there is also pressure from the government, including the threat of bottled LPG supplies being stopped if a building has a gas connection but the residents have not taken it.”

— Praveer Kumar Srivastava, Managing Director

The company is taking a cautious, wait-and-watch approach toward EV initiatives, prioritizing core gas operations for now. This ensures that capital is not wasted on unproven segments before they reach commercial viability.

“You may not see a very sizeable amount of management time and money being invested in this segment for at least the next 3-5 years. However, once we are confident and know that the time has come for it to start operating successfully, we will definitely scale up at that time.”

— Praveer Kumar Srivastava, Managing Director

Management is signaling a shift toward inorganic growth through potential acquisitions as smaller or newer competitors struggle with declining gas allocations. This could provide MGL with a path to expand its geographical footprint beyond its current licensed areas.

“If required, we are open to and may look for opportunities for acquisitions as well. The time is coming when APM is declining substantially. There are new entrants who may have management issues, and new non-gas operators have also entered.”

— Praveer Kumar Srivastava, Managing Director

Financial Services

Muthoot Finance Ltd. | Large Cap | NBFC - Gold Loan

Muthoot Finance is India’s largest gold loan non-banking financial company, specializing in providing short-term loans secured by gold jewelry. The company operates a massive network of over 6,000 branches and has diversified into microfinance, housing finance, and insurance brokerage.

[Concall]

Management views new industry regulations as a favorable shift that will benefit large, organized players. For investors, this suggests that regulatory compliance will act as a competitive moat against smaller, less formal lenders.

The Reserve Bank of India’s April 1, 2026, gold loan guidelines introduced a tiered Loan-to-Value (LTV) structure, a maximum 12-month limit for bullet repayment consumption loans, and mandatory transparency frameworks across all regulated banks and non-banking financial companies.

“To wrap up, we believe that the regulatory changes implemented from April 2026 in the gold loan industry are structural positives. They strbengthen transparency and drive formalization, which favors established, trusted players like Muthoot Finance Ltd.”

— George Alexander Muthoot, Managing Director

The company experienced a sharp decline in its interest yields compared to the previous quarter. This drop reflects a strategic decision to lower interest rates to remain competitive in the current market.

“The yield in Q4 was 20.76%, and this quarter it is 17.93%. I agree that there is a drop in the yield. This is due to a variety of reasons. We have probably also reduced our interest rates in this quarter. The yield has declined because we are giving loans at lower rates as well. Higher rates are also there, and low rates are also there.

So, probably, in this quarter, some of the lower-rate loans would have taken more precedence. Number two, last year, in the third and fourth quarters, when we saw a yield of 20% and so on, it was actually a very good year in which our recoveries were also very good. A lot of loans were also renewed. There were a lot of renewals and rollovers last year, and the interest collections were also very good. That is also one of the reasons for the higher yield. As a steady state, 18% plus or minus, maybe 18% to 18.5%, should be the normal yield that we should be looking at going forward. What we have now is 18%, or 17.93%. Going forward this year also, it should be around 18%. I think that is a decent yield. What we got last year should be considered a one-time windfall. Anyway, we were able to cash in on that and we have received the benefit of it.”

— George Alexander Muthoot, Managing Director

The company is shifting its collection strategy to encourage customers to pay interest at least once every three months. This move aims to align with new regulatory norms and improve the overall quality of interest recognition.

“As you rightly said, we need to retrain our staff and customers to think about paying at least once in a quarter. If not monthly, they should pay once in a quarter. After some time, we are seeing a good response from the customers.”

— George Alexander Muthoot, Managing Director

Management explains that a decrease in gold prices actually results in a higher volume of physical gold being pledged for the same loan value. This mechanic provides a natural buffer for the loan-to-value ratio and asset security.

“If the gold price falls, tonnage will keep increasing because, if somebody wants 1 lakh rupees, earlier they needed to give 10 grams, whereas now they have to give 12 grams. It is as simple as that.”

— Management, Core Team

The company is avoiding high-risk lending products that bypass thorough credit assessment just to offer higher loan-to-value ratios. This conservative approach highlights management’s commitment to maintaining superior asset quality over risky growth.

“We have not launched income-generating loans merely to take advantage of LTV. That may not be the correct approach unless we are able to assess the repayment capacity as well as the end use of the loan. Otherwise, it may lead to problems.”

— Management, Core Team

Management plans to moderate growth in its microfinance subsidiary to prioritize risk management over asset size. This cautious stance protects the group’s balance sheet from the current stress in the unsecured micro-lending sector.

“We will not be aggressive in microfinance. That is the first question and the first answer. Second, we would like to have a very calibrated, less risky portfolio.”

— Management, Core Team

The current lower yields are partly attributed to the interest rebate schemes offered during loan renewals. Investors can anticipate some yield expansion as these loans progress into higher interest slabs over their lifecycle.

“We follow a rebate structure for most of the loans. Many of these loans, because of their ability to roll over, are currently at a lower yield structure. They will probably increase as they migrate to higher levels.”

— Management, Core Team

The CFO indicates that the company’s funding costs have likely bottomed out and could rise depending on central bank actions. This implies that net interest margins will rely more on lending yield stability than on further interest expense savings.

“I am not expecting any reduction in the cost of borrowing. It will mostly remain at these levels. Depending on RBI policies, it might increase.”

— Oommen, CFO

Management clarifies that loan growth is driven by genuine funding needs rather than just changes in gold market valuations. This suggests the business model has structural resilience even during periods of commodity price volatility.

“You saw gold prices coming down while AUM continued to increase. Therefore, business growth is not a function of the gold price.”

— Management, Core Team

Adoption of the high 85% loan-to-value product remains very low, accounting for only a small fraction of disbursements. This indicates that customers are borrowing prudently based on their actual needs rather than maximizing their debt against gold.

“Regarding 85%, it has just started, and it is perhaps 3%-4%. Again, the answer is the same. Everyone does not borrow just because a particular LTV is available.”

— Management, Core Team

Bajaj Finserv Limited | Large Cap | Financial Services

Bajaj Finserv is a diversified financial conglomerate with major holdings in consumer lending, life and general insurance, and asset management. The company operates through a large network of subsidiaries, leveraging technology and a massive customer base to provide integrated financial solutions.

[Concall]

The company is integrating artificial intelligence to drive cost efficiencies and lower its operating expense ratio for its lending arm. This targeted reduction in operating costs should help protect profitability as the company continues to expand its physical branch footprint.

“However, with visibility of green shoots in operating efficiencies due to our AI implementation, the company is confident that the Opex-to-NTI ratio will improve by about 25-40 bps in the current financial year.”

— Ramandeep Singh Sahni, CFO, Bajaj Finserv Ltd.

The digital marketplace business has successfully completed a technology transition that temporarily slowed growth in the previous year. The shift toward trail-based revenue models will create a more stable and predictable income stream for the platform over the long term.

“We are back on the growth trajectory after the planned digital customer journey enhancements that had impacted growth for FY26. Further, some of the revenue structures are now trail-revenue-based, providing stability, predictability, and non-linearity to future revenues.”

— Ramandeep Singh Sahni, CFO, Bajaj Finserv Ltd.

The board has greenlit a plan to enter the reinsurance market, which would expand the group’s insurance footprint. This move represents a strategic vertical integration that could allow the group to capture more value across the insurance value chain.

“We are also happy to confirm that the board of Bajaj Finserv earlier today approved the setting up of a reinsurance company as a natural progression towards further strengthening our insurance capabilities. We will now prepare to seek the necessary regulatory approvals to set up the company.”

— Ramandeep Singh Sahni, CFO, Bajaj Finserv Ltd.

Management is confident that their conservative reserving practices already account for potential increases in motor insurance liability resulting from court rulings. This existing buffer means the company is unlikely to face sudden financial hits that might affect peers with thinner reserves.

“We already have enough of a buffer to absorb any such increase if it does happen subsequently. That is already built into the reserving that we do. If a company does not have enough reserves and those reserves become stressed, then I think people have to hearten it. But for a company like us, our ultimate loss rates take into consideration this kind of extrapolation.”

— Tapan Singhel, MD and CEO, Bajaj General Insurance

Credit quality concerns that plagued the digital lending industry for the last few years are beginning to subside as partners adjust their risk models. Lenders are once again feeling confident enough to grow their volumes on the company’s digital distribution platforms.

“Starting with Bajaj Finance, many lenders have taken appropriate measures. We see that as well. While we have more than 50 lenders on Bajaj Markets, each with a different risk-return equation and, hence, different thresholds, they are generally growing their business and growing their business with Bajaj Markets. We do see that the position has improved.”

— Ashish Panchal, MD and CEO, Bajaj Finserv Direct

The Indian insurance sector is currently in a ‘soft’ cycle where high competition is driving down premiums across major product categories. This pricing environment makes it difficult for the industry to maintain high underwriting profits until the market naturally ‘hardens’ and prices rise.

“If you look at the Indian market, because there were no major catastrophe losses earlier, the market is soft right now. This means pricing is much lower than what average pricing would be. This applies to all lines of business, whether crop, fire, motor, or health.”

— Tapan Singhel, MD and CEO, Bajaj General Insurance

The life insurance unit has successfully diversified its distribution network to reduce its reliance on a few large partners. This structural change makes the business more resilient to potential disruptions or terminations in any single partnership agreement.

“In the last 15 months we have added more than 20 partners. If you go back almost a year or 18 months, at that point we started the journey of de-risking ourselves from depending on a small number of partners. At that time, we had a relatively large set of 2-3 partners that contributed a significant percentage—more than 50% at that time—of our business. That is no longer the case.”

— Tarun Chugh, MD and CEO, Bajaj Life Insurance

The new reinsurance venture will be rolled out in two distinct stages, initially focusing on India before expanding globally. This phased approach allows the group to manage its capital allocation more conservatively as it builds the necessary credit ratings for international scale.

“Phase 1 will largely focus on the domestic market, where we may not need too much capital. Then, in Phase 2, once we obtain the ratings, which will be a 3-year process, we will move into the international market. That is where we will need a large amount of capital.”

— Ramandeep Singh Sahni, CFO, Bajaj Finserv Ltd.

Aptus Value Housing Finance India Ltd. | Mid Cap | Housing Finance

Aptus Value Housing is a retail-focused housing finance company primarily serving low and middle-income self-employed customers in semi-urban and rural markets. The company provides home loans, loans against property, and SME business loans through a growing network across Southern and Western India.

[Concall]

Aptus managed to keep its profit margins stable even after lowering some loan interest rates by reducing its own borrowing costs. This shows management’s ability to balance competitive pricing with efficient treasury operations to protect profitability.

“Our margins remained resilient during the quarter, despite rationalization of pricing in certain loan segments and prudent liability management, including a reduction in the cost of funds. Asset quality remained broadly in line despite continued business growth.”

— M. Anandan, Executive Chairman

Management is aggressively expanding its physical footprint by opening over thirty new branches in a single quarter. This distribution growth, combined with a larger network of sourcing partners, is the primary engine for their projected AUM growth.

“First is branch expansion. We continued to expand our distribution network and, during the quarter, opened 33 branches, taking our total branch network to 322. Next is strengthening customer acquisition. We continue to diversify our sourcing channels through the expansion of our connector network.”

— P. Balaji, Managing Director

The company is planning to diversify its product range beyond traditional housing and SME loans to sustain long-term growth. Investors should watch for the launch of these new products as they could alter the company’s risk-reward profile.

“We are also evaluating opportunities to broaden our lending portfolio beyond home loans and SME loans through the introduction of a new lending product. Together, these pillars continue to strengthen our franchise and position us well to deliver sustainable growth while maintaining our profitability and asset quality.”

— P. Balaji, Managing Director

Strategic price cuts on specific loan sizes have already led to a significant jump in loan volumes for the month of July. This volume growth suggests that the company is successfully trading off some yield to capture higher market share.

“The other factor is that we have calibrated and optimized the lending rate on certain housing loan ticket sizes. That is also likely to provide momentum to growth. That is what has actually happened. If you look at our July 2025 disbursements compared with July 2026 disbursements, July 2026 disbursements were 25% higher.”

— P. Balaji, Managing Director

Aptus is choosing to avoid National Housing Bank (NHB) funding because it can find cheaper capital in the open market and through banks. This demonstrates the company’s strong credit rating and its flexibility to pick the most cost-effective funding sources.

“In the housing finance company, we are able to raise money from banks, through securitization, or through NCDs at 7.8-7.9%. Therefore, it is more prudent to borrow from these sources rather than from NHB. If NHB is able to offer a competitive rate of interest, we will borrow from NHB.”

— P. Balaji, Managing Director

The management sees product diversification as a necessary step to scale the business toward the 50,000 crore AUM milestone. This suggests the company is evolving from a pure-play housing lender into a more comprehensive financial services provider.

“As we look at our next stage of growth, from 15,000 to 25,000 crores or from 25,000 crores to upwards of 50,000 crores or more in size, we feel there is a strong need not only to strengthen our physical, online, and associate distribution, but also to diversify our product range.”

— P. Balaji, Managing Director

While leadership remains stable, the company continues to face high turnover among its ground-level sales and collection staff. Managing this high field-level attrition is a key operational challenge for maintaining consistent growth and credit oversight.

“At the senior level, there is absolutely no attrition. At the middle-management level, it is only around 5-10%. Earlier, field-level attrition was around 50-60%; it has come down to 45%, but it is still high.”

— P. Balaji, Managing Director

Aptus is opting for aggressive loan write-offs rather than just setting aside provisions, which provides them with significant tax advantages. This strategy improves net profit figures while keeping the balance sheet clean of long-overdue loans.

“The tax rate is lower because of the benefits we are receiving from the aggressive write-off policy that we are following. That is the tax benefit we have taken, and that is what has resulted in this. This will continue. Our current cost is largely on account of write-offs rather than provisions.”

— Sanjay Metpalli, Chief Financial Officer

The company’s low debt-to-equity ratio gives it significant bargaining power when negotiating with lenders for fresh capital. This allows Aptus to maintain superior net interest margins even when the broader interest rate environment is challenging.

“Since our leverage is very low, we are able to negotiate with banks and bring them to the pricing and interest rates we want. We can wait and bring lenders in at our terms and at our rates, rather than asking for or offering the rates that banks are asking for.”

— Sanjay Metpalli, Chief Financial Officer

A significant portion of the company’s debt is tied to floating interest rates, making its borrowing costs sensitive to central bank policy changes. However, management believes the overall impact on profitability would be limited and manageable.

“If you look at our total borrowings, 66% is variable and 34% is fixed. Of the 66% that is variable, 25% is linked to the repo rate and 21% is linked to MCLR. Therefore, if there is an increase in the repo rate, there can be some impact.”

— Sanjay Metpalli, Chief Financial Officer

The company is shifting its financial reserves to cover the small segment of loans showing early stress while reducing reserves for healthy loans. This dynamic provisioning reflects a data-driven approach to managing credit risk across different loan buckets.

“Regarding the reduction in Stage 1 provision, the repayment behavior of customers in the Stage 1 category has been very good according to the ECL model. That is why the percentage coverage has reduced from, say, 0.3% to 0.24%. At the same time, we saw some deterioration or an increase in Stage 2 assets, so we increased the provision coverage there.”

— Sanjay Metpalli, Chief Financial Officer

Automobile

Maruti Suzuki India Ltd. | Large Cap | Automobiles

Maruti Suzuki is India’s largest passenger vehicle manufacturer with a dominant presence in the entry-level and SUV segments. The company operates multiple manufacturing facilities in Haryana and Gujarat and leads the country in automotive exports.

[Concall]

The company is seeing a simultaneous surge in both entry-level small cars and premium SUVs. This broad-based demand is helping the company regain lost market share across different price points.

“For Maruti Suzuki India Ltd., small cars have come back with a bang. Our small car sales grew 34% in the quarter year-on-year. And not just small cars; three, SUVs grew by 44.6%, and we are close to SUV leadership in absolute numbers.”

— Rahul Bharti, Chief Investor Relations Officer

Management changed their payment terms to help suppliers survive sudden spikes in raw material costs. While this protected the supply chain, it caused the company to absorb cost increases much faster than usual.

“The sudden and steep increase in commodity and energy prices did create some working capital pressure for several suppliers. To support suppliers and ensure uninterrupted production, the company temporarily revised the settlement cycle for certain commodities, such as aluminum, plastics, and rubber, from a quarterly lag to a monthly lag basis. This was an extraordinary one-time measure taken in response to extraordinary circumstances.”

— Rahul Bharti, Chief Investor Relations Officer

Higher raw material prices and faster payment cycles significantly compressed profit margins this quarter. The company expects margins to improve as they return to their standard quarterly payment schedule.

“Commodity costs had an adverse impact of approximately 300 basis points. Importantly, nearly 110 basis points of this impact was attributable to the temporary change in the commodity settlement cycle from a quarterly lag to a monthly lag basis, which I explained earlier. As conditions normalize, we expect to gradually move back to the quarterly lag settlement cycle over the next few quarters, and hence some of the benefit will flow back.”

— Rahul Bharti, Chief Investor Relations Officer

Maruti now accounts for more than half of all passenger vehicle exports leaving India. This scale provides a significant hedge against domestic market fluctuations and builds global competitiveness.

“The company continued to be India’s leading passenger vehicle exporter and contributed more than 55% of India’s total passenger vehicle exports during the quarter. It is heartening that your company, just one company out of 17 car manufacturers in India, is exporting more cars than the other 16 car manufacturers put together.”

— Rahul Bharti, Chief Investor Relations Officer

The company believes buyer demand is currently stronger than their ability to produce cars. Achieving 10% annual growth will depend entirely on how quickly they can ramp up new factory lines.

“We had mentioned at the beginning of the year that, most likely, our sales this year would be constrained by the supply side rather than the demand side. The demand side seems to be healthy. From a supply-side perspective, we see headroom for about 10% growth.”

— Management, Executive Team

There has been a sharp increase in the number of people buying their very first car. This suggests that the entry-level market, which had been slow for years, is finally recovering strongly.

“Our first-time buyer percentage improved significantly from 51% in Q4 to about 54% in this quarter. It has improved significantly within just one quarter, which can also be corroborated by the steep increase in small car volumes.”

— Management, Executive Team

Prices for key raw materials like aluminum have peaked and are now trending downwards. This decline should lead to lower production costs and better profitability in the second half of the year.

“Aluminum has already started showing a reduction from its peak. From aluminum, we should get a reduction back, since we are following that cycle and also have to correct that cycle. At least for this particular commodity, we should get a reduction back.”

— Management, Executive Team

Management is planning a series of new SUV launches to fill gaps in their current lineup. They are focusing on high-volume models to ensure they get the best return on their investment.

“We will have many more SUVs in the next few years. Obviously, we will target some white spaces where we can achieve good volumes per model. Within the SUV and premium segments, we will have launches.”

— Rahul Bharti, Chief Investor Relations Officer

The company is making a massive 3,900 crore investment to turn its Gujarat facility into a global EV hub. This expansion signals a major shift toward electric vehicle production at a massive scale.

“Yesterday we announced the fourth line at the Hansalpur plant, which makes the Hansalpur plant one of the largest car plants in the world, within the top 10, let me say. This fourth line is predominantly an EV line, and the capex was about 3,900 crores.”

— Rahul Bharti, Chief Investor Relations Officer

Healthcare

Divi’s Laboratories Ltd. | Large Cap | Pharmaceuticals & Biotechnology

Divi’s Laboratories is a leading Indian pharmaceutical company specializing in the manufacture of Active Pharmaceutical Ingredients and Custom Synthesis for global innovators. The company operates massive manufacturing facilities and is heavily backward-integrated to ensure supply chain resilience for its global customer base.

[Concall]

The company is making a major push into the complex peptide market by expanding its manufacturing capacity and technical skills. This long-term investment is aimed at capturing a larger share of high-value projects from global pharmaceutical clients.

“Peptides remain a strategic area of investment for the company. Customer programs continued to progress across multiple stages of development during the quarter. While qualification and validation activities for several peptide fragments are expected to advance over the coming quarters, alongside capacity expansion in both solid-phase and liquid-phase peptide synthesis, we continue to strengthen the process development, analytical, and manufacturing capabilities required for increasingly complex peptide chemistries.”

— Dr. Kiran S Divi, Whole-time Director & CEO

The new Unit 3 facility is taking over early-stage chemical work to free up space in other plants for more complex tasks. This move helps the company produce its own ingredients and use its total manufacturing capacity more effectively.

“The facility is supporting our backward integration strategy through selected key chemistry operations while enabling the phase transfer of manufacturing activities from our existing facilities. This enhances supply assurance for critical intermediates, improves network flexibility, and supports more efficient capacity utilization across our manufacturing operations.”

— Dr. Kiran S Divi, Whole-time Director & CEO

High costs for chemical solvents are currently hurting profit margins due to global shipping and geopolitical issues. Management is negotiating with customers to adjust prices and cover these higher input expenses.

“While prices of certain raw materials moderated during the quarter, solvent costs remained elevated for a significant part of the period. We continue to engage closely with customers to evaluate commercially appropriate mechanisms to mitigate these costs wherever feasible. At the same time, the evolving geopolitical situation in West Asia has introduced additional uncertainty into global supply chains.”

— Ms. Nilima Prasad Divi, Whole-time Director Commercial

Management believes their ability to produce every component of a peptide in-house gives them a massive advantage over competitors. This deep integration makes them a more reliable and cost-effective partner for global drug companies.

“Divi’s is in a unique situation because I think we are the only ones who start from basic raw materials and build our own peptide building blocks. Then we have protected amino acids, we produce dipeptides and tripeptides, and we have moved into fragments. So we have the complete chain of backward integration, which gives us a much better opportunity compared to others.”

— Management, Executive Leadership

Management is now keeping three months of raw materials on hand to avoid factory shutdowns during global trade disruptions. While this requires more cash, it ensures they can always fulfill orders for their customers without delay.

“Around March was when we decided that we would operate on a rolling 3-month basis and secure the material. That is why we have not had any production loss or shipment stoppage in the last few months.”

— Management, Executive Leadership

By manufacturing all basic materials internally, the company can deliver finished drugs faster than most rivals. This speed and reliability are key reasons why global pharmaceutical innovators choose to work with them.

“When we say integrated, we mean that we are backward integrated from basic raw materials. Since all these are manufactured in-house, we have an advantage in supply, which gives us a stronger and faster approach to delivering products. That is why this gives us a competitive edge, along with other advantages, in the global market.”

— Management, Executive Leadership

The company is finalising multi-year supply deals for iodine products used in medical scans. These contracts will provide a steady and significant revenue stream as they scale up over the coming months.

“On iodine-based contrast media, we are in the process of signing long-term contracts with two customers, and these will be for multiple years. Commercialization for one of them has already started, and we will start with the second one in the next few months.”

— Management, Executive Leadership

Services

Urban Company Ltd. | Mid Cap | Consumer Services

Urban Company Ltd. is a leading tech-enabled platform providing professional home services including beauty, cleaning, and maintenance across India and international markets. The company also manufactures smart home products under the Native brand and offers on-demand assistance via the InstaHelp segment.

[Concall]

The core India services business has seen four consecutive quarters of faster growth while simultaneously increasing its profitability margins. This trend suggests the company is successfully scaling its most important segment without having to sacrifice its financial health.

“India consumer services grew 29% in NTV year-on-year to reach 1,056 crores, the first time it crossed 1,000 crores of NTV in a quarter. This is the fourth straight quarter of acceleration, up from 10% at the same time last year to 19%, then 21%, then 26%, and now 29% year-on-year growth. Adjusted EBITDA margin was 6.9% of NTV, up from 5.2% in the same period last year.”

— Abhiraj Singh Bhal, CEO & Co-founder

Operations in the UAE and Singapore have reached a stage where they are growing rapidly and generating profits. This provides the company with a diversified income stream outside of its primary Indian market.

“The second point I want to highlight is that our international businesses are now scaling fast and profitably and will become the second core profit engine of Urban Company Ltd. in the coming periods. NTV grew 76% year-on-year to reach 237 crores. Both the UAE and Singapore delivered profitable growth.”

— Abhiraj Singh Bhal, CEO & Co-founder

Most customers who purchased the company’s water purifiers are returning for filter replacements. This high retention rate creates a predictable and highly profitable recurring revenue model for the product division.

“As our early water purifier cohorts complete their first replacement cycle, about 75% of them are renewing filters through us, which adds a recurring, high-margin revenue stream. Native continues to demonstrate strong growth with improving margins.”

— Abhiraj Singh Bhal, CEO & Co-founder

Management has identified a massive potential market for its high-frequency assistance service in major urban centers. By defining this market size, the company is signaling the scale of its ambition and the reason for its current heavy investment.

“We believe the addressable market in the top 15 cities ranges anywhere from 7,000 to 12,000 crores in NTV. Given the competitive dynamics, we have shared what we can on InstaHelp in the shareholders’ letter and will not go beyond that on this call.”

— Abhiraj Singh Bhal, CEO & Co-founder

The shift toward on-demand service delivery within 60 minutes is significantly changing how customers use the platform. Reducing wait times is expected to lead to higher customer loyalty and more frequent service bookings.

“This has allowed us over the last two quarters to roll out UC Instant, which is basically getting all our core services, whether salon, cleaning, AC repair, electricians, plumbers, carpenters, and others, to users within 30 to 60 minutes. Users no longer have to wait and plan. That further improves word of mouth, usership, user retention, and frequency.”

— Abhiraj Singh Bhal, CEO & Co-founder

Management views the low-margin InstaHelp segment as a strategic tool to keep users engaged with the app every week. This increased frequency makes the platform more central to the customer’s life and protects the higher-margin core business.

“We see our investment in InstaHelp beyond just the ROI from the category itself, because we visualize the category within the larger scheme of the platform that we are building. It is a high-frequency category that allows us to enter the home on a weekly basis rather than on a monthly or quarterly basis, which is the frequency that our core consumer services business enjoys.”

— Abhiraj Singh Bhal, CEO & Co-founder

Management is taking a very long-term view on the profitability of the InstaHelp segment, prioritizing market dominance over immediate returns. Investors should expect continued losses in this specific vertical for several more years.

“We certainly have no intention of making any money from this business over the next 5 years, and our assumption is that this business has to break even by FY31. We would be happy if it gets there.”

— Abhiraj Singh Bhal, CEO & Co-founder

The company has achieved a massive technological shift by using AI to automate nearly all of its software coding. This efficiency allows the company to grow its technology infrastructure without hiring a proportionate number of expensive engineers.

“More than 90-95% of our code is now written by AI, and we are seeing significant leverage in our engineering costs and headcount. All our other teams are also aggressively deploying AI.”

— Management, Urban Company Team

A focus on retraining service professionals has helped the beauty segment grow faster again after a period of slower performance. Improved service quality is proving to be a key driver for customer demand in this competitive vertical.

“The beauty segment has definitely seen a resurgence in growth over the last 2-3 quarters, and we have been working hard to achieve that. One of the things we have done aggressively in this segment is work with our supply side to improve the overall quality of service, including retraining and retooling many of them.”

— Management, Urban Company Team

The Native product brand focuses on high-end, premium goods that target the company’s existing wealthy customer base. By focusing on the luxury end of the market, the company aims to capture higher profits even with lower sales volumes.

“What we are trying to do at Native is serve an underserved market that overlaps with our core users on the Urban Company Ltd. platform and enter categories that have very strong adjacencies to our core services business. It is our view, and a considered view, that a meaningfully larger share of the profit pool sits at the top relative to the revenue.”

— Management, Urban Company Team

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Quotes in this newsletter were curated by Kashish.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.

Welcome to the 74th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 5 companies across 4 industries, along with a keynote address by Rohit Jain, Deputy Governor, RBI.

We want to experiment a bit with The Chatter format. Until now, we covered around 15 companies every week. Going forward, we’ll instead publish three editions a week, with each one covering five to six companies.

The idea is that covering fewer companies in each edition means we can give you quicker and focused context on everything we cover. It would also mean each edition would be less overwhelming.

We’ll experiment with this format for the next few weeks. Let us know what you think about it.

Regulator

• Reserve Bank of India

Metals

• Tata Steel

Automobile

• Mahindra & Mahindra

• Eicher Motors

Software Services

• Hexaware Technologies

Healthcare

• Laurus Labs

Rohit Jain on Building Deep and Resilient Financial Markets for a Viksit Bharat | Reserve Bank of India

The Reserve Bank of India (RBI) is India’s central bank and apex financial regulator. In this address delivered at the Financial Institutions Leadership Conference, RBI Deputy Governor Rohit Jain outlines a strategic blueprint for “Building Deep and Resilient Financial Markets for a Viksit Bharat.” He highlights why India must transition beyond bank-led lending toward deep corporate bond, term-money, and credit derivative markets, calling on financial institutions to move from mere market scale to true operational depth and liquidity.

[Reference]

The regulator highlights that the traditional bank-reliant funding model is insufficient for India’s long-term infrastructure and manufacturing goals. This signals a strategic push to deepen bond markets and reduce the burden on bank balance sheets.

“India has traditionally relied on a bank-led financing model. That model has served the economy well. However, the scale, tenor and diversity of financing required for Viksit Bharat cannot be met through bank balance sheets alone. It will require a stronger complement of market-based finance—government and corporate bond markets for long-duration capital, and deeper foreign exchange and derivative markets for pricing and distributing risk.”

— Rohit Jain, Deputy Governor, RBI

Household savings are increasingly moving away from traditional bank deposits and into market-linked investment products. This trend provides a more diverse and stable pool of capital for long-term domestic investments.

“Alongside bank deposits, a growing pool of household savings is being channelled through insurance, pensions, mutual funds and other market-linked instruments. Well-functioning financial markets can connect these long-term savings with long-term investment needs. This is where different segments of the market perform complementary functions.”

— Rohit Jain, Deputy Governor, RBI

The central bank believes that robust financial infrastructure must be established in advance of economic growth rather than as a reaction to it. Investors should expect continued regulatory focus on improving market depth and liquidity over the coming years.

“In sum, the financial markets required by a developed economy must be built before the economy reaches developed status—not afterwards. This will require more than an increase in issuance or trading volumes. It brings me to my second proposition: moving from scale to depth.”

— Rohit Jain, Deputy Governor, RBI

The RBI identifies the lack of liquidity in term money markets as a barrier to accurate interest rate pricing. New guidelines aim to fix this, which will help banks and corporations better manage their financial risks.

“Beyond the overnight segment, however, term activity remains modest. A deeper term money market would strengthen benchmark formation, improve the pricing of financial instruments and support more effective management of interest-rate risk. In view of this, the RBI has recently issued guidelines to further expand participation in the term money market.”

— Rohit Jain, Deputy Governor, RBI

The Deputy Governor emphasises that high issuance of bonds is not enough if there is no active secondary market for trading. Improving liquidity will lower costs for investors and make the corporate bond market more resilient.

“Secondary-market liquidity gives investors greater confidence that they can adjust their exposures when required. It improves price discovery, reduces the cost of entry and exit, and can support participation by a wider range of issuers and investors. Put simply, issuance creates financial assets; liquidity helps create a market around them.”

— Rohit Jain, Deputy Governor, RBI

The central bank is introducing new derivative tools like Credit Default Swaps and Total Return Swaps to help institutions manage risk. This expansion of the credit market toolkit allows for better distribution of risk across the financial system.

“RBI’s recent reforms covering the introduction of Total Return Swaps, Futures on credit indices and extended Credit Default Swaps (CDS) mark an important step in deepening India’s credit derivative market by enhancing risk transfer, improving price discovery, and broadening the toolkit available for efficient credit risk management. The aim should not be to replicate every instrument available in other jurisdictions.”

— Rohit Jain, Deputy Governor, RBI

The Deputy Governor cautions that complex financial products must be sold responsibly to avoid damaging market confidence. This focus on product suitability and transparency is intended to prevent systemic losses for smaller market participants.

“Past episodes involving the sale of exotic derivative products to smaller enterprises demonstrated how quickly losses on poorly understood products can undermine confidence—not only in the product, but also in the institution offering it and in the market itself. Product innovation must, therefore, be accompanied by appropriate suitability and risk-assessment processes, transparent disclosure, fair pricing and the capacity of users to understand and manage the exposures they assume.”

— Rohit Jain, Deputy Governor, RBI

The regulator defines a healthy market as one that remains functional even during periods of extreme volatility. For investors, this means the focus is on maintaining liquidity rather than preventing all price fluctuations.

“The resilience of a market is ultimately tested when conditions become difficult. A deep market is not one in which prices never move sharply, or participants never incur losses. It is one in which credible prices continue to emerge, transactions remain possible, and risks can be transferred without disorderly disruption.”

— Rohit Jain, Deputy Governor, RBI

The central bank notes that regulation alone cannot provide liquidity without active commitment from financial institutions. Banks are expected to invest more in market-making and risk-management capabilities to support broader market health.

“Liquidity cannot be created through regulation, nor can participation be mandated into becoming meaningful. Market institutions must invest in the capabilities required to quote prices, assess risks, manage inventories and remain active across market conditions.”

— Rohit Jain, Deputy Governor, RBI

The RBI’s long-term vision involves creating a financial ecosystem that can efficiently turn domestic savings into productive investments. Success depends on maintaining investor confidence through both stable and volatile market cycles.

“To conclude, as India moves towards 2047, we must build markets that are equal to the scale of its ambitions. They must channel savings into productive investment, enable risks to be priced and distributed efficiently, and serve businesses and investors with transparency and fairness. Above all, they must command confidence—not only when conditions are favourable, but also when markets are tested.”

— Rohit Jain, Deputy Governor, RBI

Tata Steel | Large Cap | Metals

Tata Steel Limited is one of the largest steel producers in the world, with integrated operations spanning iron ore mining, steel manufacturing, and downstream value-added products. Headquartered in India, the company operates major primary production hubs in India and Europe, catering to automotive, infrastructure, construction, and consumer goods markets. The company benefits from significant backward integration through captive iron ore mines in India, positioning it among the lowest-cost steel makers globally.

[Reference]

The current fiscal year is free from major maintenance interruptions, allowing for a significant jump in production capacity. This provides a clear window for investors to see higher output before further maintenance begins next year.

“In the next financial year, we have a blast furnace relining again in another blast furnace in Jamshedpur, so we lose some volumes there. But this year is a clean year that’s why this year we expect volumes to be about 2 million tons higher than the previous year.”

— T. V. Narendran, MD & CEO

Falling steel prices are expected to put pressure on profit margins per ton in the immediate future. However, the company plans to offset this by selling a higher volume of products to keep total profits growing.

“The margins in India will get compressed a bit because we expect steel prices to be about ₹1,500 per ton lower in Q2 compared to Q1. So, we will see a margin compression, but because the volumes in Q2 will be much higher than Q1, we expect the rupees crore to be higher because the volumes will make up.”

— T. V. Narendran, MD & CEO

The company is shifting its strategic focus toward finished and semi-finished steel products rather than just raw steel. This move into downstream markets is intended to capture higher profits and create a more diversified business model.

“We believe that the value capture opportunity lies more in midstream and downstream than in upstream. And that’s why, while we will have the optionality to build upstream, we will have a better balance between downstream growth and upstream growth going forward.”

— T. V. Narendran, MD & CEO

By selling branded steel products directly to consumers, the company is able to maintain more stable profits regardless of global market price swings. This brand strength acts as a shield against the typical volatility of the commodities industry.

“In some sense, the stickiness of our margins is reflective of the fact that we have a fairly strong downstream presence and a very good franchise with products like Tata Tiscon, Tata Steelium, Tata Astrum, etc. So, that’s why in India we are consistently able to deliver good numbers irrespective of whether the steel price is going up or going down.”

— T. V. Narendran, MD & CEO

Management is maintaining a stable debt profile and does not expect to borrow excessively for upcoming projects. This suggests a disciplined approach to capital allocation while funding expansion through their own cash flow.

“So, the net debt to equity—you know, we are forecasting it to be in the 2.3 to 2.5 range. We are at 2.3 already, and we’ll be at that level. I think we are comfortable that the internal cash that we generate is good enough to take care of all the capex that we have planned.”

— T. V. Narendran, MD & CEO

Geopolitical tensions in the Middle East significantly increased operational costs during the quarter. Despite this massive headwind, internal efficiency measures helped the company maintain its financial resilience.

“The West Asia crisis, I think, hit us by about ₹1,200 crore in the quarter. So, these numbers have been delivered despite that, largely because of a lot of cost takeout actions that we’ve done over the years.”

— T. V. Narendran, MD & CEO

Mahindra & Mahindra | Large Cap | Automobile

Mahindra & Mahindra Limited is one of India’s largest automotive manufacturers and the world’s largest tractor manufacturer by volume. Headquartered in Mumbai, the company is a market leader in utility vehicles, tractors, and agricultural mechanisation. Its businesses span passenger and commercial vehicles, internal combustion and electric mobility, farm equipment, and financial services.

[Reference]

Management is highlighting a significant jump in profitability despite facing a difficult global environment. This suggests the company has strong operational control and can protect its bottom line even during tough periods.

“With the performance that our teams have driven at a 34% increase in profit year-over-year, I would not use benign words for it. It is clearly a very resilient and strong performance in a quarter that has been tough, but a lot of credit to our teams to work through that and be able to deliver these results.”

— Dr. Anish Shah, MD & Group CEO

The company has raised prices to offset the rising costs of raw materials like steel and rubber. Management believes these price hikes are enough to keep profit margins stable even if commodity prices fluctuate.

“I think we should be able to solve most of it. We did see commodity prices coming down late in June. They’ve gone up a little after that as well. But based on where we stand right now, we feel fairly comfortable, and with the price hikes taken, I think we’ve solved for it.”

— Dr. Anish Shah, MD & Group CEO

Management believes the business is now more resilient to weather changes than it was in previous years. This reduced sensitivity to monsoons makes the company’s earnings more predictable and less risky.

“We feel that monsoons are much better than what had been outlined a couple of months ago. It remains to be seen how monsoons continue, but there isn’t as much impact from a monsoon now as compared to what it was, let’s say, five or seven years ago. So, sometimes you feel a lot of this is overblown.”

— Dr. Anish Shah, MD & Group CEO

The company is currently producing as many SUVs as it can, but supply chain and labor issues are limiting even higher growth. Investors should monitor how quickly these production bottlenecks are cleared to unlock more revenue.

“We are at capacity at this point. We do see some challenges from time to time with labor shortages that we saw a couple of months ago and a potential supply issue as well. So, those brought down a little production that we could have delivered otherwise with an increase in capacity.”

— Dr. Anish Shah, MD & Group CEO

Management is planning for a future where electric vehicles are profitable without relying on government subsidies. They believe achieving larger production scale will naturally drive down costs and protect margins.

“Government incentives cannot last forever; it should not last forever. The incentive is there for the transition from ICE to EV, and as scale comes in, profitability for companies will improve. As profitability for companies improves, the government incentive should start dialing down.”

— Dr. Anish Shah, MD & Group CEO

The success of electric three-wheelers proves that EV segments can remain viable even after government aid is removed. This gives management confidence that their passenger EV business will eventually reach the same level of self-sustaining growth.

“Let me then go to the electric three-wheeler story, because in electric three-wheelers, the industry is at 40% penetration, and there we had incentives for FAME I and FAME II which have gone away. With that as well, with scale coming in, that transition has been very strong, and that’s a great case study across the world for a government giving a subsidy, helping transition the industry to electric, and then that subsidy coming down and not being required anymore.”

— Dr. Anish Shah, MD & Group CEO

Eicher Motors | Large Cap | Auto Manufacturers

Eicher Motors Limited is a leading Indian multinational automotive company and the listed parent of Royal Enfield, a global leader in middleweight motorcycles (250cc–750cc). The company also operates VE Commercial Vehicles (VECV), a strategic joint venture with Sweden’s Volvo Group that manufactures Eicher trucks and buses, Volvo trucks, and small commercial vehicles. Headquartered in New Delhi, Eicher Motors maintains a dominant market share in premium leisure motorcycling and plays a pivotal role in modernising commercial transportation across India and global markets.

[Reference]

Management is committing significant capital to build a new factory in Andhra Pradesh to significantly increase production capacity by 2030. This long-term investment shows the board’s high confidence in the future global demand for Royal Enfield motorcycles.

“Today, the board has approved an investment of ₹1,225 crore for Phase 1 of the greenfield expansion at Kadapa, which at full utilization can produce an additional 4.5 lakh motorcycles per year. The above capacity addition is expected to be completed during financial year 2029-30.”

— B. Govindarajan, Managing Director, EML and CEO of Royal Enfield

Despite dozens of new competitors entering the motorcycle market, Royal Enfield has maintained a dominant share as the overall segment has expanded. This demonstrates the strong brand power and customer loyalty that keeps the company ahead of its rivals.

“In the last three years what has happened: the middleweight segment in India grew from 70,000 units per month to 1.2 lakh per month, with about 20-plus launches taking place in this middleweight during this time. What has happened for Royal Enfield? When the base for the middleweight was 70,000 per month, Royal Enfield was about 61,000 per month; now that the base is almost about 1.2 lakh per month, Royal Enfield is almost about 1.01 lakh per month.”

— B. Govindarajan, Managing Director, EML and CEO of Royal Enfield

Rising costs for raw materials like steel and aluminium hit the company’s profit margins this quarter. Management is responding by redesigning parts and finding efficiencies to help protect the bottom line from these inflationary pressures.

“In the quarter, we’ve had a net impact of about 4% to 4.5% on account of the increase in input cost of commodities as well as some of the processes involved. We’ve also had some value engineering benefits which have come in, about 0.4%, and we continue to look at advancing value engineering programs as well as cost reduction programs.”

— Vidya Srinivasan, Chief Financial Officer

The company is making significant money from non-vehicle sources like repairs, clothing, and add-on parts. This is a high-margin recurring revenue stream that makes the overall business more stable and less dependent only on new bike sales.

“Beyond that, about 0.6% is on account of an increase in revenue from allied businesses, which is also about 15% of revenues now—including spare parts, service income, accessories, apparel, etc. We’ve seen almost 20% growth in service job cards in Q1 compared to last year; we are averaging about 9 lakh service jobs per month, which is a huge growth driver.”

— Vidya Srinivasan, Chief Financial Officer

The joint venture with Volvo has successfully entered the small truck market, which includes a notable portion of electric models. This diversification into smaller vehicles allows the company to compete in a high-volume market segment they previously did not address.

“Our entry into the small commercial vehicle segment has begun well with 1,041 Pro2000 trucks delivered, including 172 electric vehicles. This product range opens an important new avenue for future growth in the large and growing SCV segment.”

— Vinod Aggarwal, MD and CEO of VECV

Management is planning to set up a local assembly plant in Indonesia to avoid import restrictions and tap into a massive market. If successful, this could provide a significant new source of international volume and revenue growth.

“So now we have identified an assembler in Indonesia and are seriously considering establishing a CKD operating plant out of Indonesia. That decision will be taken during this quarter.”

— B. Govindarajan, Managing Director, EML and CEO of Royal Enfield

Hexaware Technologies | Mid Cap | IT Services

Hexaware Technologies Limited is a global digital and technology services company specialising in AI-led transformation, cloud computing, application management, automation, and business process outsourcing. Headquartered in Navi Mumbai, India, the company serves enterprise clients across key industry verticals, including banking, financial services, healthcare, insurance, manufacturing, and travel. Hexaware leverages automated delivery frameworks and AI capabilities to modernise legacy IT systems and optimise operational efficiency.

[Reference]

Management has officially lowered its annual growth expectations to reflect recent macro headwinds and project delays. The revised target requires a steady quarterly growth rate that management believes is achievable given the current deal pipeline.

“We guided down. We said we will now do a midpoint of 6.5%—6% to 7%, midpoint of 6.5%. For doing that, we just need a CQGR of 2.7%, and we are very confident of doing that.”

— R. Srikrishna, Chief Executive Officer and Executive Director

Execution timelines for several major contracts have slipped by a few months, delaying the realisation of expected revenue. Investors should note that while the business is being won, the conversion to billable work is slower than initially forecasted.

“In addition to that, there are at least four deals that we won in Q1 and Q2 where the ramp-up should have been complete by now. The good news is the ramp-ups have started in some cases or are due to start later in Q3. So, they’re all happening, but there’s a right shift of two or three months, and we felt like it’s better to be conservative because we don’t have much runway.”

— R. Srikrishna, Chief Executive Officer and Executive Director

Hexaware is confirming its earlier view that AI is causing a net reduction in project pricing across the industry. This structural shift means the company must find higher volumes of work just to maintain flat revenue as traditional tasks become cheaper.

“We were amongst the first companies, right early this year, to say—at that time the commentary was still mixed from the industry that demand will outstrip the deflation—we said there will be net deflation this year. And it is happening. I think that we had accounted for—maybe there’s a little more than what we had accounted for—but we had planned for some refresh.”

— R. Srikrishna, Chief Executive Officer and Executive Director

Clients are increasingly weighing the cost of automated computing power against the cost of human staff when setting budgets. This shift in spending could fundamentally alter the margins and labour-intensive business model of traditional IT firms.

“The bigger issue is how much money is going to go to tokens and how much money is going to go to human labour. That factor, I think, has a bigger impact on decision-making and budget allocations to our industry than any other factor.”

— R. Srikrishna, Chief Executive Officer and Executive Director

Growth is highly uneven across different business lines, with manufacturing showing strong momentum while professional services struggle. Diversification is proving critical as double-digit gains in some areas are being offset by declines in others.

“I mean, if you look at even our quarter numbers, Hi-Tech and manufacturing are actually growing in the high teens, and they could be in that range when they finish the year. Banking was double-digit, and FS / PS was actually negative growth for us—but it could improve a bit.”

— R. Srikrishna, Chief Executive Officer and Executive Director

AI has rapidly moved from a peripheral topic to a core component of every single client negotiation and contract. For investors, this signals that traditional IT services no longer exist in isolation and AI proficiency is now the minimum requirement.

“Virtually 100% of new deals are, in some way or the other, influenced or impacted by it. Virtually 100%. Any single deal we do, either incremental business with customers or new client proposals, are based on fully baking in the value of AI.”

— R. Srikrishna, Chief Executive Officer and Executive Director

Laurus Labs | Mid Cap | Pharmaceuticals

Laurus Labs Limited is a leading Indian pharmaceutical company operating globally across Active Pharmaceutical Ingredients (APIs), Formulations (FDFs), Custom Synthesis (CDMO), and Biotechnology. Headquartered in Hyderabad, the company is a global leader in anti-retroviral (ARV) APIs and is expanding aggressively into high-growth areas such as oncology, biologics, gene therapy, and antibody-drug conjugates (ADCs) through strong in-house R&D and strategic manufacturing partnerships.

[Reference]

Expansion in the CDMO business and higher plant utilisation drove a sharp rise in quarterly profits. This suggests the business is becoming more efficient and less dependent on its legacy segments.

“The primary reason is our revenues from the CDMO business grew significantly. Second, we also did very well in our efforts in both APIs, and our capacity utilisation also increased. So there was the operational leverage.”

— Dr. Satyanarayana Chava, Founder & CEO

Profitability reached new highs with gross margins hitting 63% and EBITDA margins nearing the 32% mark. This margin expansion signals a shift toward higher-value products and improved pricing power.

“One is our gross margin went up from 59% to almost 63% compared year-on-year. EBITDA went up significantly, almost 7 percentage points. We are now close to 32% EBITDA.”

— Dr. Satyanarayana Chava, Founder & CEO

Management is guiding for a sustained gross margin above 60% and EBITDA margins above 30% for the full year. This level of confidence suggests that recent operational improvements are structural rather than temporary.

“What we can say, and also we are confident, is we will maintain 60% plus gross margin and 30% plus percentage of EBITDA margin for the entire financial year.”

— Dr. Satyanarayana Chava, Founder & CEO

Revenue from anti-retroviral drugs is expected to stabilise at around ₹2,700 crore while its share of total revenue shrinks. This diversification reduces the company’s concentration risk and dependence on a single therapy area.

“We are still confident that this therapy will be anywhere between ₹2,600 to ₹2,800 crore in the next several years to come. It used to be the primary revenue contributor for our company. The absolute value remained very stable with a little growth, but percentage contribution-wise, it is coming down because our other divisions are growing.”

— Dr. Satyanarayana Chava, Founder & CEO

A massive ₹2,000 crore investment plan for the current year will be funded mostly by internal cash flows rather than heavy borrowing. Maintaining a low debt-to-EBITDA ratio while expanding shows a strong and disciplined balance sheet.

“This year, we expect to invest over ₹2,000 crore in capex spanning small molecule APIs, drug product, and also in bio, and also in antibody-drug conjugates. We will raise some additional debt, but most of the capex will be done through internal accruals. Even if we raise a little bit of debt to fund our capex, our net debt by EBITDA will be very comfortable.”

— Dr. Satyanarayana Chava, Founder & CEO

With only 5% of total revenue coming from the US generic market, the company is relatively shielded from potential US trade policy changes. This low exposure mitigates risks associated with geopolitical shifts or new pharmaceutical tariffs.

“See, currently, our pharma sales coming from generic supplies to the US market are around 5% of our total revenues. And it is too early to comment on how much that will be added. We are not highly dependent on sales of FDFs into the US market.”

— Dr. Satyanarayana Chava, Founder & CEO

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Quotes in this newsletter were curated by Shahid.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.

Welcome to the 73rd edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 7 companies across 6 industries.

We want to experiment a bit with The Chatter format. Until now, we covered around 15 companies every week. Going forward, we’ll instead publish three editions a week, with each one covering five to six companies.

The idea is that covering fewer companies in each edition means we can give you quicker and focused context on everything we cover. It would also mean each edition would be less overwhelming.

We’ll experiment with this format for the next few weeks. Let us know what you think about it.

Defence

• Bharat Electronics Limited

FMCG

• Hindustan Unilever

Financial Service

• Tata Capital

Engineering & Capital Goods

• Larsen & Toubro

• Suzlon Energy

Software Services

• Coforge Limited

Consumer Durables

• TTK Prestige

Defence

Bharat Electronics Limited | Large Cap | Aerospace & Defence

Bharat Electronics is a leading Indian state-owned aerospace and defence company that develops advanced electronic products for the military and civilian sectors. The company specializes in areas such as radars, missile systems, electronic warfare suites, and communication equipment.

[Concall]

The massive Project Kusha is expected to generate significant business in a few years as it moves through complex testing phases. This provides clear visibility into a major revenue driver for the long-term horizon.

“We expect the order size to be approximately 40,000 plus crores, likely in the FY29 timeframe, as indicated last time. After this series of testing, there will be many more evaluations before the RFP is issued for commercial activities. It is still a long way to go.”

— Manoj Jain, Chairman and Managing Director

The company has significantly improved its working capital cycle by reducing the time it takes to collect payments from customers. This efficiency in cash management strengthens the balance sheet for future investments.

“Regarding receivables, the number of days as of June 30 was 140 days, compared to 176 days as of March 31. This is an improvement. Receivables and cash flows are in good shape.”

— Damodar Bhattar, Director Finance and CFO

While a competitor won the main integration role for the Netra 2 project, the company will still supply critical high-value electronic components. This ensures they maintain a significant share of the project’s total value even without the lead role.

“We missed the system integrator role this time, but our in-house strengths in developing these subsystems will provide significant business in the future. Our strengths in radars, EW, data links, and other subsystems in the Netra program will be tapped.”

— Manoj Jain, Chairman and Managing Director

The company is expanding its footprint in the missile sector to meet the increasing demand for quantity and quality in modern warfare. By partnering with private firms, they are securing a leading role in the electronics that drive these systems.

“Missiles have become essential in any war scenario, as seen in recent conflicts. Both quality and quantity matter. To meet the requirements, there is scope for many players beyond BDL. We are collaborating with private firms and have received orders as a partner.”

— Manoj Jain, Chairman and Managing Director

The company is aggressively working to eliminate its reliance on imported electronic modules within five years. This shift to local manufacturing is expected to insulate the company from global supply chain risks and inflation.

“Our goal for the next 5 years is zero imports at the module and sub-module levels. Barring semiconductor components, we aim to indigenize all subsystems we currently import, such as RF, microwave, or compute modules. We have set a target to complete this indigenization, including validation and certification, within 5 years.”

— Manoj Jain, Chairman and Managing Director

International buyers are showing strong interest in the company’s communication and radar systems that are already proven in Indian operations. This provides a clear roadmap for expanding export revenues across multiple product lines.

“Almost all products we deliver to Indian customers have demand internationally. The main interest is in radios, software-defined radios, and D4 solutions. We are seeing leads for communication and weapon-locating radar (WLR) systems.”

— Manoj Jain, Chairman and Managing Director

FMCG

Hindustan Unilever | Large Cap | FMCG

Hindustan Unilever Ltd. is an India-based consumer goods company offering home and personal care products, foods, and refreshments. Its diverse segments encompass home care, beauty & personal care, and foods & refreshments, including popular brands like Horlicks and Boost.

[Concall]

Management highlighted that Q1 represents a meaningful step-up in HUL’s growth trajectory, driven by both volumes and pricing while gaining market share.

“Turnover for the quarter stood at ₹17,184 crores with an underlying sales growth of 10% given equally by volume and price. This represents our highest growth in 13 quarters. What is particularly encouraging is the consistency of progress. Our growth trajectory has trended from 3% in the first half of FY26 to 10% in this quarter. Equally important is that this growth is competitive as we continue to gain turnover-weighted market share.”

— Priya Nair, CEO & Managing Director

Management showcased one of its biggest AI-led productivity initiatives.

“Our Liquid Lab of the Future in Mumbai is built with advanced AI and digitally enabled facilities to accelerate innovation in future-facing, high-growth formats. This lab can accelerate formulation development timelines by up to six times.”

— Priya Nair, CEO & Managing Director

HUL continues to prioritize pricing discipline and cost savings over chasing gross margins.

“Commodities continue to remain elevated even now. We have been very measured in terms of passing price increases to consumers... That gives us confidence that even with judicious pricing, we will be able to deliver EBITDA around the guidance range.”

— Niranjan Gupta, Chief Financial Officer

Management believes the current growth cycle is healthier because it is diversified.

“Our growth in the quarter is very broad-based. It spans laundry, dishwash, coffee, Horlicks, Boost, Beauty and Wellbeing, hair care, and skin care. Growth is also broad-based across channels... Whether you look at rural and urban or mass and premium, it is broad-based. This gives us confidence that we are standing on a solid platform.”

— Management

HUL dismissed concerns around slowing quick commerce demand.

“Quick commerce is seeing the entry of new players and is evolving rapidly. Our growth has been very strong at double digits, around 40–50%. Moving forward, we see continued opportunities.”

— Management

Management explained why large FMCG companies are better positioned than standalone D2C brands.

“The barriers to entry may have been reduced, but the barriers to scale have only gone up. This is visible in how the brands we acquired, like Minimalist, have really taken off in a big way.”

— Management

HUL sees premiumization as a structural trend across consumer segments.

“Winning at each end of this market is very important... competitive growth at each end of the pyramid, while the premium segment naturally grows faster.”

— Priya Nair, CEO & Managing Director

Management highlighted rural recovery as one of the key drivers of growth.

“In the last few quarters, we have seen a step-up in our rural growth, which has been a big driver for us. Overall demand continues to be stable both in rural and urban areas.”

— Priya Nair, CEO & Managing Director

Management outlined the strategic priorities driving future growth.

“We are sharply allocating resources behind a few key bets, which we internally call ‘power moves.’ These are low-penetration, high-growth segments... Second is market development... Third is doubling down on our execution... Lastly, we continue to drive our portfolio toward higher velocity areas.”

— Priya Nair, CEO & Managing Director

Management stressed that premium growth won’t come at the cost of its mass franchise.

“I want to correct the notion that we are pushing only towards premium growth. We continue to be competitive... We must be competitive at the mass end of the portfolio to maintain a large volumetric base while driving premiumization.”

— Priya Nair, CEO & Managing Director

HUL sees liquid formats as one of the biggest structural growth opportunities.

“The biggest opportunity is to convert bathing products—the largest part of the market—to liquids. That is the body wash opportunity we referenced. We are driving activations and sampling to educate consumers on the benefits of liquids over soap bars.”

— Management

Management believes it can protect profitability even under volatile commodity prices.

“Generally, we have a playbook where if we pass on even half the inflation, we are able to maintain margins. We have the flexibility across all lines of the P&L.”

— Niranjan Gupta, Chief Financial Officer

Management dismissed fears that inflation is beginning to hurt FMCG consumption.

“There was apprehension earlier that there could be an inflation-led impact on FMCG demand, and we are not seeing that at all. Consumption continues to be strong.”

— Management

Rather than treating quick commerce as another sales channel, HUL is tailoring products specifically for it.

“Quick commerce allows us to segment consumers. We can build the right portfolio and channel architecture with packs designed specifically for that channel. It allows us to create new sub-segments that were previously difficult to reach.”

— Management

Management believes acquired brands can scale much faster within HUL than independently.

“The brands we acquired, like Minimalist, have really taken off in a big way.”

— Management

Financial Service

Tata Capital | Large Cap | NBFC

Tata Capital is one of India’s leading non-banking financial companies, offering a diversified portfolio of retail, SME, and corporate lending solutions. The company is focused on technology-led growth, disciplined risk management, and expanding its presence across secured and unsecured lending segments.

[Concall]

The acquisition of Yog Loans marks the company’s strategic entry into the lucrative and secured gold loan market. For investors, this represents a new growth vertical that combines high-yield potential with the safety of physical collateral.

“With an AUM of approximately 708 crores as of March 2026, a network of 162 branches, and nearly 32,000 customers, Yog Loans brings strong expertise in the gold loan segment. Combined with Tata Capital’s brand, capital strength, technology, and risk management capabilities, this acquisition positions us to capture the significant growth opportunity in secured lending while strengthening our full-spectrum financial services platform.”

— Rajiv Sabharwal, CEO

Heavy investment in AI is significantly lowering the cost of doing business while making loan approvals faster for customers. These structural efficiency gains should lead to better operating leverage and higher profit margins as the company scales.

“Within operations, about 70% of retail applications are processed through AI-led workflows, delivering around 40% productivity gains, nearly 40% improvement in processing turnaround times, and over 25% reduction in operating manpower cost per file. On the servicing front, over 70% of our email responses are now AI-generated.”

— Rajiv Sabharwal, CEO

The company maintains a strong capital cushion and does not anticipate needing to raise new equity for over two years. This gives it ample room to fund growth without diluting existing shareholders.

“Our endeavour is always to operate at least 200 to 250 basis points above the mandatory threshold on capital adequacy and CET1. Currently, our debt-to-equity is 5.3x. Looking forward, we look at a consolidated debt-to-equity of around 6.2 to 6.3x. Based on guided book growth, we are well-capitalised until September 2028.”

— Rakesh Bhatia, CFO

The company has successfully tapped global markets to lower and diversify its borrowing costs following its recent listing and credit rating upgrade. Diversified funding sources protect the business from local liquidity crunches and improve overall net interest margins.

“Tata Capital has successfully raised USD 400 million via a fixed-rate senior unsecured Reg S bond for a 3.5-year tenor at an interest rate of T-bill plus 107 basis points. The bond received strong demand from investors with a final order book oversubscribed by 4 times. It is our first issuance following our S&P rating upgrade and successful equity listing, representing an important step in further diversifying our funding mix and extending our access to international capital markets.”

— Rajiv Sabharwal, CEO

The company has reached its internal limit for corporate lending and will focus almost entirely on retail and SME growth moving forward. This strategy ensures the portfolio remains diversified across many small borrowers rather than a few large, risky corporate entities.

“We said our retail and SME will form about 85% to 88% of our book and we will remain within that corridor. I agree we have probably maxed out on the corporate side, and you should see more growth happening in retail and SME. If we originate more corporate debt, we will sell it down or syndicate it to maintain that mix.”

— Rajiv Sabharwal, CEO

The company is seeing continuous improvement in its bad loan ratios despite a volatile global economic backdrop. Maintaining low slippages in the unsecured retail segment suggests that their credit underwriting models are performing effectively.

“Gross stage 3 assets improved to 1.9% as of June 2026 compared to 2% as of March 2026, while maintaining the PCR at 57%. Even with the ongoing geopolitical uncertainty, our asset quality matrix remains resilient, underscoring the strength of our portfolio, underwriting discipline, and collections infrastructure. Slippages stayed benign across the portfolio, including in unsecured retail.”

— Rajiv Sabharwal, CEO

Engineering & Capital Goods

Larsen & Toubro | Large Cap | Engineering & Capital Goods

Larsen & Toubro (L&T) is a leading technology, engineering, and construction company with global operations. It is highly regarded in India’s private sector and operates in various key verticals including process industries, infrastructure, power, and aerospace. The company undertakes turnkey projects and has a strong presence in diverse sectors.

[Concall]

Management reaffirmed confidence in L&T’s FY27 order inflow guidance despite geopolitical uncertainties, highlighting the strength of its ₹15 trillion opportunity pipeline and continued momentum in both domestic and international markets.

“Against this backdrop and supported by the strength of our order book, healthy prospects pipeline, and continued focus on execution, I will now turn to our guidance for FY27.

On order inflows, we recorded strong 14% year-on-year growth in Q1 despite project deferments during the quarter. Looking ahead, our prospects pipeline for the remaining nine months remains healthy at ₹15 trillion, providing strong visibility for the rest of the year.

While awarding activity in the Middle East witnessed some temporary slowdown, tendering and bidding momentum continues to remain robust, and we expect project awards to pick up from Q2. Importantly, we have not seen any project cancellations across the opportunities that we are actively pursuing and bidding for.

In India, we see continuing investment momentum from both private sector and public sector enterprises. Given the strength of our opportunity pipeline and underlying market dynamics, we remain confident of achieving our order inflow growth guidance of 10–12% for the current year.”

— P. Ramakrishnan, Chief Financial Officer

Management maintained its revenue guidance despite disruptions in the Middle East, saying execution teams are actively working around supply chain bottlenecks while waiting for greater clarity before changing guidance.

“On revenue, during the Q4 FY26 earnings call, we had indicated that the first half of FY27, and Q1 in particular, could be relatively subdued given the conflict in the Middle East.

While the operating environment remains dynamic, our teams are actively pursuing alternate supply chain solutions and execution strategies to manage these challenges. Considering the rapidly evolving situation, we believe it’s prudent to wait for greater clarity before reassessing the full-year outlook.

For now, we remain committed to our FY27 revenue growth guidance of 10–12%.”

— P. Ramakrishnan, Chief Financial Officer

Management explained that while the Middle East conflict has affected execution in select projects, the majority of projects continue normally and the company expects clients to compensate for time and cost overruns caused by force majeure conditions.

“There are only certain sectors where some execution momentum has slowed down. But otherwise, for the major part of the order, execution momentum has continued, as I elaborated specifically while explaining the Energy Conventional performance.

We have not had that kind of a situation in Q1. However, going forward in segments like renewables, which form part of the Energy Green segment, supply chain challenges have occurred and there are intermittent supply chain disruptions happening.

The company is ensuring that we are trying to find alternate routes. While doing this, we also ensure that the client is informed of our next action. Because of this force majeure situation, we are in close touch with the clients whenever there is a change in the project scope in terms of the execution momentum.

...If the conflict continues to persist, there can be implications. We are working very closely with clients. They are appreciative of the situation; it’s not only with Larsen & Toubro but also with other contractors. Hopefully, a major part of these cost increases because of time extension and supply chain disruptions will be compensated at a later stage.”

— P. Ramakrishnan, Chief Financial Officer

Management expressed strong confidence in the offshore wind business, highlighting the scale of the current order book, attractive margins, and long-term global opportunity.

“Today we have almost 8 gigawatts of offshore wind, adding up to nearly ₹57,000 crore to ₹60,000 crore of order book. This will get executed over a four to five-year period. These are long projects and require a considerable amount of effort in procurement, fabrication, and installation.

The margin will be better than what we normally have in our EPC business in the Middle East, but it is too early to commit on the exact numbers.

We will continue to pursue offshore wind prospects in Europe and also in other parts of the world because that is the model and the business we want to grow.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management said L&T has no plans to significantly diversify the geographic footprint of its EPC business outside its core markets, except for offshore wind where it intends to expand globally.

“Other than the offshore wind business, the rest of our EPC business will still mostly be centered around India, the Middle East, and maybe some selected businesses in Southeast Asian countries.

We have no plans to diversify in terms of geography for the EPC business except for the offshore wind business.

Talking about the prospect line, I mentioned earlier that we are not seeing any significant delays. There could be a month here and there, but our order pipeline from the Middle East for the businesses where we are present, which is primarily hydrocarbon and renewables, looks quite healthy.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management highlighted that India’s private capex cycle continues to strengthen, with private sector projects now becoming an increasingly important contributor to L&T’s domestic opportunity pipeline.

“We have delivered very good order inflow in Q1, better than what anybody had expected. The overall guidance is still very much consistent with what we had indicated earlier.

As I mentioned, the domestic prospects are ₹7.45 trillion, almost 50%, and the most important thing over the last two years is that a major share of domestic orders is also moving into the private sector.

This is largely led by residential and commercial real estate, other industrial sectors, and power. The combination of these three types of prospects is still going strong for us in terms of domestic visibility. It is getting more balanced between both public and private.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management explained how L&T is protecting margins amid supply chain disruptions by refusing to incur incremental logistics costs unless clients agree to compensate the company.

“Material erosion is unlikely. The only reason we would have material erosion in the margin is if we incur the exorbitant cost of bringing in material, which we are not doing.

Whatever we are bringing in, we are doing so in consultation with the customer. There is a general understanding and agreement that the additional cost will be compensated.

If there is no agreement on that, then we will not incur that cost. In that case, there would be a revenue impact, the project timeline may get extended, and we would record that cost at a later stage.”

— Management

Management explained the accounting philosophy it is following during the Middle East disruptions, emphasizing that additional costs are recognized only when reimbursement agreements are in place.

“If we have prior consultation with the customer and there is an agreement that they will reimburse the cost, then it gets captured in our accounting once formalized.

If there is no agreement, we cannot recognize it until one happens. We are trying to avoid incurring additional costs as much as possible by deferring the project if there is no agreement.

Revenues and margins are determined on a percentage completion basis, which includes the estimated future costs to complete the job. We know what future procurements are required and their current prices.

Discussions in this environment happen actively with the client... Some pass-throughs will happen, and some may not.”

— P. Ramakrishnan, Chief Financial Officer

Management explained that the current disruptions in the Middle East are manageable because most large hydrocarbon projects are still in their engineering and fabrication phase, with the real execution risk arising only if the conflict extends into next year.

“Large mega projects in offshore should be ready for dispatch from our Oman yard sometime in the first quarter of the next calendar year. If the conflict extends to next year, then yes, it will become a problem for us. But until that time, we should not have an issue for the offshore projects.

On the onshore projects, we are overcoming that month by month. It is not that nothing is affected; we have logistics issues, but we are managing that. We are making sure that the project sites are not impacted because we are managing alternative routes.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management explained that while inventory buffers built at the beginning of the Middle East crisis have largely been exhausted, alternate logistics routes have been established and execution will continue selectively depending on customer approvals.

“I had said that at the beginning of the crisis, we normally have about three months of inventory. Most of it has now been consumed as expected.

We have figured out alternative routes to get material to the site, but there is a cost. If there is an agreement with the customer to reimburse that cost, we bring it in. Otherwise, we delay that progress.

We continue other construction activities that are not dependent on those materials. In most cases, we are successful in having an alignment with the customer.”

— P. Ramakrishnan, Chief Financial Officer

Management clarified that approximately half of L&T’s order book is fixed-price but expressed confidence that margins will remain protected because the company will not absorb uncompensated cost overruns.

“Around 50% of the order book is fixed-price.

To clarify, we have not needed to invoke force majeure across projects. As mentioned, most of our projects are going reasonably well.

In the conventional hydrocarbon space, 70–80% of projects are still in the engineering and procurement phase, which is not really impacted by the crisis in the region. Engineering is done in India and procurement is done globally.

We are not yet at the stage where we must ship the material to the site. Only projects in peak construction or beyond are affected.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management explained why L&T’s strong order book should not automatically translate into proportionately faster revenue growth, particularly as the mix shifts toward larger multi-year projects.

“When you have large contracts, the duration of the contract is longer, so you cannot expect the revenue to run faster.

Solar projects have shorter durations and faster revenue run rates, but large offshore projects are three or four billion dollar contracts over four years.

You have to factor in that an average ultra-mega project takes four years to burn through the revenue. This crisis is only four months old, so everything cannot be attributed to it, although it does have some impact.”

— S.N. Subrahmanyan Sharma, Deputy Managing Director & President

Management explained that the increase in private sector participation is one of the most encouraging structural trends in India’s capex cycle, making the domestic opportunity pipeline more diversified than in previous years.

“One of the significant changes we have seen over the last two years is the increasing contribution of the private sector to our domestic prospects. Earlier, the pipeline was largely driven by government spending. Today, residential and commercial real estate, industrial manufacturing, data centers, power, and energy transition projects are all contributing. This makes the opportunity pipeline much more balanced and sustainable.”

— S.N. Subrahmanyan, Chairman & Managing Director

Management emphasized that offshore wind is not an opportunistic business for L&T but a long-term strategic platform where it intends to build global leadership.

“We are not looking at offshore wind as a one-off opportunity. We have invested in capability because we believe this will become a very large global business over the next decade. We want to establish ourselves as one of the few engineering companies globally that can execute these complex offshore HVDC platforms.”

— S.N. Subrahmanyan, Chairman & Managing Director

Management said execution intensity is expected to increase meaningfully in the second half of FY27 as delayed project awards are finalized and supply-chain conditions improve.

“Historically, our second half has always been stronger than the first half, and we expect that pattern to continue this year as well. Once project awards come through and logistics normalize, execution intensity will increase significantly.”

— P. Ramakrishnan, Chief Financial Officer

Management highlighted that customer relationships have become a key competitive advantage during the current disruption, enabling collaborative decisions on project timelines and cost recovery.

“The advantage of working with long-standing customers is that discussions happen transparently. Customers understand the challenges faced by contractors in the current environment. Wherever additional costs arise because of extraordinary circumstances, discussions are taking place to arrive at mutually acceptable solutions.”

— P. Ramakrishnan, Chief Financial Officer

Concluding the discussion, management expressed confidence that despite near-term geopolitical uncertainties, L&T’s diversified business model, strong order book and execution capabilities position it well to deliver on its FY27 commitments.

“Overall, we believe the fundamentals of our business remain strong. We have a healthy order book, a robust prospect pipeline, diversified businesses, strong execution capabilities and disciplined financial management. While we remain watchful of the external environment, we are confident of delivering on the guidance we have set for the year.”

— P. Ramakrishnan, Chief Financial Officer

Suzlon Energy | Mid Cap | Engineering & Capital Goods

Suzlon is a company specializing in the design, development, manufacturing, and supply of Wind Turbine Generators for various capacities. They offer turnkey solutions for windfarm projects, focusing on reducing energy costs, ensuring high machine availability and reliability.

[Concall]

Management laid out its long-term view on India’s wind market, driven by structural electricity demand and the need for round-the-clock renewable power.

“India’s economic growth, rapid electrification, AI-led data center expansion, industrial growth, EV adoption, and cooling demand continue to drive structural power demand growth. The country’s peak power demand has already crossed 270 GW, reinforcing the need for large-scale renewable energy capacity additions, especially during non-solar hours. This momentum sets the stage for a multi-year growth cycle.”

— Ajay Kapoor, Group CEO

Management believes the Indian wind market is entering a structurally larger phase over the next five years.

“Annual installations are expected to cross 10 GW in the near term and reach 15 GW by FY31. With 57 GW already installed and a strong pipeline through STU, PGCIL and C&I demand, India is well positioned to achieve 100 GW of wind capacity by 2030.”

— Ajay Kapoor, Group CEO

One of the most important long-term opportunities highlighted during the call.

“Repowering has a potential of close to 25 GW in the country. Much of India’s installed wind fleet was commissioned 10 to 20 years ago using small turbines with low hub heights. Modern turbines can generate substantially more energy from the same footprint.”

— Management

Management highlighted execution resilience despite geopolitical challenges.

“Suzlon delivered 506 MW in Q1, marking our highest-ever first-quarter deliveries. This performance was achieved despite temporary supply chain and logistics disruptions arising from geopolitical tensions in the Red Sea.”

— Ajay Kapoor, Group CEO

Management clarified that supply-chain issues have delayed—not lost—business.

“These disruptions deferred approximately 10–20% of deliveries, which are expected to be recovered in the coming quarters.”

— Ajay Kapoor, Group CEO

Management highlighted how quickly customers are adopting the new development model.

“Sixty percent of new orders are coming from the Devco model, which will hopefully keep the momentum growing in the coming quarters.”

— Ajay Kapoor, Group CEO

Management reaffirmed its long-term growth ambition despite near-term margin pressure.

“While Q1 FY27 was impacted by these factors, in the long term, we continue to grow in line with our ambitions for Suzlon 2.0 at a 25% CAGR over the next five years.”

— Rahul Jain, Group CFO

Management explained how capital gets recycled under the Devco model.

“We earmark up to 25% for a project to invest in land. As we stage-gate and move to 50% investment, we typically already have a term sheet with a customer. We then transfer the land to the customer, recycling the capital.”

— Management

Management gave one of its clearest updates on BESS.

“We are in discussions with several potential partners. Our target is to reach 3.1 GW by FY31. We expect to close initial partnership arrangements in the next couple of months.”

— Management

Management indicated that industry pricing remains healthy despite increasing competition, reflecting improved discipline across the sector.

“Market pricing remains healthy and rational. Average Selling Price (ASP) increased from ₹5.6 crore per MW in Q1 FY26 to ₹6.3 crore per MW in Q1 FY27, aided by the product mix.”

— Ajay Kapoor, Group CEO

Management believes the new Approved List of Models and Manufacturers (ALMM) framework benefits established Indian OEMs like Suzlon.

“The ALMM SOP brings a level playing field for Indian players. Suzlon is fully compliant and well-positioned compared to import-dependent competitors. The SOP provides clear requirements for listing and inspection, along with a new import monitoring system.”

— Management

Management outlined its strategy to build an independent engineering business with higher export exposure.

“We are focusing on three distinct segments: Foundry, Forging, and Bearings. We are talking to more customers and building a strong order pipeline. Our goal is to increase the share of non-Suzlon, non-wind, and export business.”

— Management

Software

ServicesCoforge Limited | Mid Cap | IT Services & Consulting

Coforge is a global digital services provider that focuses on specific industry verticals including Travel, Insurance, and Banking. The firm specializes in AI-led engineering, data services, and cloud transformations to drive enterprise-level modernization.

[Concall]

The integration of the Encora acquisition is progressing faster than planned, specifically regarding leadership control and cost savings. Rapid integration reduces the risk of operational disruption and accelerates profit contribution from the new assets.

“Today, on July 28 in India, all aspects of Encora operations for the last 3 months are being overseen by Coforge leaders who led the Encora due diligence effort. We are ahead of the cost synergy plans we had shared as part of the acquisition case, and this is reflected in the fact that our consolidated reported EBIT margin in Q1 is already at 16%.”

— Sudhir Singh, CEO

The company is pivoting from general AI consulting to providing a specialized platform for running AI in complex production environments. This strategy targets higher-value, stickier enterprise engagements rather than simple experimental projects.

“Neuron is our AI operationalization platform. Its purpose is simple: to help enterprises move from AI pilots to AI operations. It brings together enterprise knowledge, decisions, workflows, governance, agents, and execution so AI can operate at enterprise scale.”

— Sudhir Singh, CEO

Coforge has demonstrated the ability to quickly deploy hundreds of engineers for new large-scale contracts. Efficient project ramp-ups lead to faster revenue recognition and higher client satisfaction scores.

“Regarding the deals, the ramp-up for the first deal has been completed in record time with 300 plus FTEs across 15 to 20 teams. The $230 million deal has already initiated its ramp-up.”

— Sudhir Singh, CEO

Management achieved a significant 40% reduction in administrative overhead for the recently acquired Encora business. These synergies are a primary driver behind the current quarter’s margin expansion.

“Coforge standalone was 6.7%, and whereas Encora was at 10% at the time of the acquisition. The combined G&A stands at 6.6%, which reflects a 40% cost out on Encora G&A.”

— Saurabh Goyal, CFO

Consumer Durables

TTK Prestige | Small Cap | Consumer Durables

TTK Prestige Limited is part of TTK Group. Over the past six decades TTK Prestige, has emerged as India’s largest kitchen appliances company catering to the needs of home makers in the country. The company is primarily engaged in the business of Kitchen and Home Appliances. The products include Pressure Cookers, Cookware, Kitchen Electrical Appliances, Gas Stoves, and Home Appliances.

[Concall]

Management believes demand has fundamentally improved after a strong quarter, though the current growth rate represents a temporary peak.

“We hope this would continue, though we believe this is not a sustainable, consistent demand at this specific peak. The demand will probably settle at a slightly higher level than before in our view, and I think that would augur well for us and for the industry as well.”

— Venkatesh Vijayaraghavan, Managing Director & CEO

Investors questioned whether the LPG shortage had artificially boosted one category. Management clarified demand was broad-based.

“Unlike the last quarter where there was a disproportionate growth impact because of induction, this quarter the growth has been significantly distributed across categories. Induction cooktops, small domestic appliances, air fryers, cookware, and cookers have all seen uniformly distributed growth across categories.”

— Management

Management dismissed concerns that distributors had merely stocked inventory ahead of price hikes.

“Our belief is that there is a minimal impact from upstocking... What started as just the induction cooktop has spread across all categories. We believe this has been triggered by consumer behavior and a one-time effort by consumers to refurbish their kitchens. To that extent, this is consumer-driven rather than upstocking in our view.”

— Management

Management explained that investments made over the past 18 months are now translating into stronger consumer engagement.

“Prestige, after almost a very significant gap in the last one-and-a-half years, has introduced close to 400–500 SKUs. We believe the walk-ins and the service have increased, leading to more buying combinations of cookware and appliances for the kitchen.”

— Management

Management reiterated that the company will grow through innovation and premium products instead of aggressive pricing.

“Our focus is very clearly on premiumizing our portfolio. Pricing is not our primary lever in terms of discounting or schemes. We are using the power of the Prestige brand and new designs to justify the premiumization. We would expect value growth to be higher than volume growth over a period of time.”

— Management

Management believes the LPG crisis permanently accelerated category adoption.

“Penetration is still low, so we believe this event has propelled awareness and adoption. It continues to be a reason why consumers walk into stores... It may not be as aggressive as this specific quarter, but it will definitely continue to push volumes.”

— Management

Management believes the demand shift extends beyond induction cooktops into premium cookware and appliances.

“Across categories, particularly cookware and cookers, we are seeing a shortened replacement cycle. Consumers are moving to stainless steel and tri-ply materials, which is an upgrade. In appliances, people are moving toward convenience and smartification of the kitchen... We believe this material upgrade and innovation-driven demand is accelerating growth.”

— Management

Management believes cookware and kitchen appliances exhibit relatively low price elasticity.

“This is not a very price-elastic product. It is a necessity in the kitchen space, so these kinds of price increases generally do not trigger a drop in purchase.”

— Management

Management highlighted how quickly the category has scaled.

“Induction cooktops currently contribute about 8% to 10% of our sales, up from about 5% a year ago.”

— Management

One of the strongest long-term structural comments from management on category evolution.

“We think it will be much better than it was in the past. This trigger has opened up category awareness and established the need for induction. The penetration curve will start to accelerate. It will certainly replace configurations where people previously used only cylinders or gas stoves. Over a period of time, it is a significant growth area and one of our key product categories.”

— Management

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Quotes in this newsletter were curated by Srusti, Meher & Shahid.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.

Welcome to the 72nd edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 6 companies across 3 industries.

We want to experiment a bit with The Chatter format. Until now, we covered around 15 companies every week. Going forward, we'll instead publish three editions a week, with each one covering five to six companies.

The idea is that covering fewer companies in each edition means we can give you quicker and focused context on everything we cover. It would also mean each edition would be less overwhelming.

We'll experiment with this format for the next few weeks. Let us know what you think about it.

Financial Services

• IDFC First Bank

• Bank of India

• AU Small Finance Bank

FMCG

• Tata Consumer Products Limited

• Dodla Dairy Limited

Healthcare

• Dr. Lal PathLabs

Financial Services

IDFC First Bank | Large Cap | Private Sector Bank

IDFC First Bank is an Indian private sector bank formed by the merger of IDFC Bank and the non-banking financial company Capital First. The bank provides a full suite of retail and corporate banking services with a strong strategic focus on digital-first delivery and retail assets.

[Concall]

The CEO admits that reducing the cost-to-income ratio took longer than initially planned due to asset write-offs and foundational investments. This transparency helps investors understand why historical overhead was high and sets the stage for upcoming productivity gains.

“We have been under pressure regarding the cost-to-income ratio for several years. I admit that in the first round, I got it wrong because I thought we would fix it in five years, and we are still dealing with it in the seventh year. However, I realized some income was wiped out because we wrote off a lot of bad loans. Some cost issues also came from the fact that we were building. “

— V Vaidyanathan, MD & CEO

Improving asset quality across various loan segments has allowed the bank to lower its credit cost guidance for the fiscal year. Lower credit costs directly contribute to higher bottom-line profitability and indicate a healthy loan portfolio.

“While we pre-guided 170-180 basis points for credit cost in the previous call, we now feel we could land more around 150-160 basis points for the year. Product-wise, all asset indicators like SMA, GNPA, and NNPA are trending well.”

— Sudhanshu Jain, CFO

Management is focusing on maintaining a gap between income growth and expense growth to improve the bank’s efficiency. This ‘positive jaw’ is a critical driver for increasing operating leverage and overall shareholder returns.

“We previously discussed a 13-14% increase in opex with an 18-18.5% increase in income. If that income growth is actually 20% or 20.5%, you might see a corresponding increase in opex because we don’t want to miss market opportunities. This 450 to 500 basis point jaw opening translates to a cost-to-income reduction of about 350 basis points.”

— V Vaidyanathan, MD & CEO

While growing the corporate loan book might slightly reduce overall interest margins, it helps in achieving a more balanced and lower-risk asset mix. The long-term target of 1.7% to 1.8% ROA suggests management sees significant room for further profitability improvement.

“Corporate banking NIM is lower than retail, so more corporate booking will have an impact on overall NIM. However, we see this in totality. Our vision is for the bank’s ROA to structurally reach 1.7% to 1.8% over time.”

— V Vaidyanathan, MD & CEO

The bank expects the shift to Expected Credit Loss accounting to have a minimal impact on its capital levels. This clarity reduces investor concerns about potential capital dilution or a sudden spike in provision requirements due to regulatory changes.

“On transition, the impact on capital could be broadly neutral. Regarding the run rate, there would be a higher provision requirement, but we would get benefits from EIR implementation because sourcing opex and processing fees will be amortized. Net of these, the impact should be manageable.”

— Sudhanshu Jain, CFO

The bank currently pays a fee to meet government-mandated priority sector lending targets, which acts as a drag on profits. As the bank grows its own organic lending to these sectors, this 250 crore annual expense will eventually decrease.

“We are still a bank that is short on its PSL requirements, as we started from a DFI base and zero retail franchise. Last year, the negative drag was approximately 250 crores. We are building our organic PSL franchise—which is now over 1 lakh crore—but we will continue to buy PSLCs as needed to meet our targets.”

— V Vaidyanathan, MD & CEO

Management is working to bring the bank’s high operating costs down below the 70% threshold this year. The fact that core income is growing twice as fast as expenses is a positive sign of improving operational efficiency.

“The Q1 cost-to-income ratio was 70.7%, and our endeavor is to bring it below 70% during the course of the year. Excluding that, opex increased by 2.3% sequentially. This increase of 2.3% on a sequential basis corresponds to an increase in core income of about 4.6% on a sequential basis.”

— Sudhanshu Jain, CFO

Bank of India | Large Cap | Banking

Bank of India is a leading public sector bank in India with a significant international presence across 15 countries. It provides a wide range of banking and financial services, focusing on retail, agriculture, and MSME (RAM) lending alongside corporate banking.

[Concall]

The bank is rolling out digital-first products like instant virtual cards and video-based account opening to improve customer onboarding. This shift toward automation helps reduce operational costs and improves the overall service experience for retail clients.

“With the aim to enhance the digital convenience and seamless banking, Bank of India has now offered the virtual personalized debit card in the RuPay segment. Customers can instantly apply for and self-activate the card directly through the BOI Omni Neo mobile banking application. The bank has also operationalized the Central Video Customer Identification Process Center in Mumbai, enabling seamless end-to-end digital account opening.”

— Rajneesh Karnatak, MD and CEO

Management is maintaining its previous outlook for mid-teen growth in loans and deposits for the full fiscal year. This predictability in guidance gives investors confidence in the bank’s ability to maintain its current momentum.

“Against this backdrop, our guidance for FY27 stays unchanged. Global advances are to grow by 15-16% and global deposits by 13-14% on a year-over-year basis. Our approach will continue to be guided by balanced growth with a focus on improving our deposit mix.”

— Rajneesh Karnatak, MD and CEO

The bank has successfully reduced its ‘Special Mention Accounts,’ which are early indicators of potential stress, to a very low percentage of the total book. This downward trend suggests that credit monitoring and collection efforts are highly effective.

“As far as the SMA numbers are concerned, if you see our 5 crore and above SMA numbers, our SMA has now come down to 4,070 crores, which is only 0.52% of our standard book. This was around 4,700 crores as on March 31 and more than 7,000 crores as on June 30, 2025. As far as the SMA numbers are concerned, the collection efficiency remains intact for Bank of India.”

— Rajneesh Karnatak, MD and CEO

Bank of India is aggressively raising foreign currency deposits and expects to hit a $1.2 billion target soon. These deposits are attractive because they offer a guaranteed spread with no reserve requirements, helping to lower the bank’s overall cost of funds.

“As far as the FCNRB is concerned, we have set a target of around $1.2 billion that we will be mopping up. We have a very robust mechanism and an international presence in more than 15 countries. As far as our AD branches are concerned, those enabled to take FCNRB and NRI branches all put together are around 250 across the entire country in the 13 FGMs. Presently, we have already garnered more than $200 million of FCNRB deposits. Our target is to achieve the $1.2 billion by September 30. We are seeing this deposit coming from across the globe, whether it is the USA, Canada, four countries in Africa, Europe, the UK, East Asia, Singapore, Hong Kong, or Japan. This money is coming from across the globe and within the country from all NRI segments.

As regards leverage, we have a product providing up to 9 times leverage. We have already rolled out and are marketing that leverage product. Regarding costing, for a 3-year FCNR, we are giving 6.25%. For 3-year to 4-year FCNR terms, we are giving 6.30%, and for the 5-year, we are giving 6.50%. Presently, we are getting bulk deposits at around 7%. Even if you see the gap for the 5-year FCNR at 6.50% with the hedging cost taken care of by the RBI, we are getting a clean spread of around 50 basis points on that 5-year deposit. There is an attraction for us, as there is no CRR or SLR to be maintained on those deposits. Cost of deposits will be coming down for the bank on that account”

— Rajneesh Karnatak, MD and CEO

The gold loan portfolio is seeing rapid growth while maintaining exceptionally low default rates and strong yields. This high-growth, low-risk segment is becoming a significant contributor to the bank’s overall interest income.

“Regarding gold loans, we have a book of approximately 57,000 crores as on June 30 with a yield of more than 9%, around 9.10%. Regarding asset quality, the NPA is less than 100 crores. Our gold loan book is performing nicely and growing at around 25% on a year-over-year basis.”

— Rajneesh Karnatak, MD and CEO

Management is intentionally slowing down growth in risky, low-ticket personal loans to avoid industry-wide credit issues. By focusing only on high-quality salaried customers, the bank is prioritizing long-term portfolio stability over short-term loan volume.

“We have put guardrails on personal loans. Low-ticket personal loans and non-salaried segments were showing risk in the industry. We are concentrating more on the service sector where salaries come into Bank of India accounts with nudge mandates. This has led to some de-escalation in the personal loan book, but we are watchful to protect asset quality.”

— Rajneesh Karnatak, MD and CEO

The bank is shifting its deposit strategy toward mid-sized corporate accounts to manage costs while supporting strong loan demand. While this has slightly lowered the CASA ratio, it allows the bank to fuel credit growth without paying the high premiums required for very large bulk deposits.

“We have focused on garnering deposits in the 3 crore to 25 crore bucket, where the interest rate is finer than bulk deposits of 500-1,000 crores. Since our credit growth is robust, we have been taking bulk deposits above 3 crores to support that growth, which has pushed the CASA and retail term deposit percentages down. However, we are optimizing costs to keep NPM stable.”

— Rajneesh Karnatak, MD and CEO

AU Small Finance Bank | Mid Cap | Private Sector Bank

AU Small Finance Bank is a retail-led Indian bank that transformed from an NBFC into a scheduled commercial bank. It specializes in vehicle finance, micro-business loans, and microfinance while expanding its digital presence through AI-driven banking solutions.

[Concall]

The bank has successfully shifted almost all customer transactions to its digital platform, significantly improving its service reach. Leveraging AI for customer support helps the bank scale without a proportional increase in operating costs.

“Our digital platforms continue to scale well. With more than 90% of the bank’s transaction and service requests now being processed through AU 0101, we also rolled out an enhanced UPI payment interface on this platform during the quarter. On the customer service side, we are leveraging AI voice bots to deliver a faster and more consistent experience across 11 languages while enhancing workforce productivity.”

— Gaurav Jain, CFO

The bank has intentionally prioritized credit quality over high yields in its credit card business by reducing riskier revolving debt. While this lowers immediate interest income, it protects the bank from potential spikes in bad loans in the unsecured segment.

“Specifically on credit cards, because of the tightening of underwriting norms that we have taken roughly 18 months back, the percentage of the revolver book has come down. That is why the yield on the credit card book is a bit subdued and that is why you see the weighted average yields at those levels.”

— Gaurav Jain, CFO

Management indicates that their borrowing costs have stabilized, ending a period of rapid increases. This stability helps the bank better plan its pricing and protect its net interest margins in future quarters.

“As we have mentioned in previous quarters as well, it is always difficult to predict margins because of multiple moving parts. I do not want to give you any directional guidance on that. But what we know is that the cost of funds has effectively bottomed out, as we mentioned last quarter.”

— Gaurav Jain, CFO

The microfinance industry is seeing a disciplined recovery following new regulatory guidelines, supporting a healthy growth outlook. This improvement allows the bank to resume growth in its high-margin inclusive banking portfolio with more confidence.

“After the MFIN guidelines, the industry has reached a stage where a lot of discipline has come into the field and that is why you will see more players falling in line and positive traction. In fact, MFIN has also projected about 17-18% growth. We are just following that and it is visible on the field.”

— Vivek Tripathi, Executive Director and Chief Credit Officer

The bank expects the transition to new credit loss accounting rules (ECL) to be financially neutral due to their strong collateral and low historical losses. This reassures investors that regulatory changes won’t lead to a surprise capital drain.

“What I can tell you confidently is that the historical trends of our LGDs, especially on our core asset classes, are very low. That gives us enough comfort to say that the impact would be neutral; we do not expect a significant additional hit on the balance sheet. Closer to the end of Q3, we will be in a better position to tell you because by then we will have more working models.”

— Vivek Tripathi, Executive Director and Chief Credit Officer

The bank has begun reducing its total headcount as AI automates administrative and back-end tasks. This shift demonstrates tangible progress in using technology to drive operating leverage and long-term cost savings.

“In May, for the first month, we actually decreased our manpower compared to April. This is partly because we are not growing the back-end headcount at all. We believe operations, accounts, and finance functions are being handled by AI. As we expand in new markets and products, we might hire for front-end roles, but there is a clear benefit from AI in terms of the number of people. It also helps manage risk and build scale. It is an amazing development where AI helps with adopting and managing scale, and it even allows for more flexible work-from-home options in banking. I am very happy with how we are using AI.”

— Sanjay Agarwal, Founder MD and CEO

FMCG

Tata Consumer Products Limited | Large Cap | FMCG - Food & Beverages

Tata Consumer Products is a prominent global FMCG player with a diverse portfolio spanning tea, coffee, salt, and innovative growth categories like pulses and snacks. The company leverages a strong distribution network and the trusted Tata brand to drive premiumization and expansion in both Indian and international markets.

[Concall]

Consistent market share gains in the US consumer business are helping offset volatility in the non-branded coffee commodities sector. This highlights the strength and stability of their international branded portfolio compared to bulk sales.

“The US business delivered 7% constant currency growth with what I believe is the seventh consecutive quarter of share growth. In the non-branded business, as coffee prices came down in line with expectations, we saw it declining 7%. If I take constant currency, it was down by 10%.”

— Sunil D’Souza, Managing Director and CEO

The ‘growth’ segment has reached a critical scale, now contributing over 30% of the India business. Rapid volume growth in staples and beverages is reducing the company’s dependency on mature legacy categories.

“In terms of growth, I think this was the best-ever quarter for the growth businesses for TCP, and they now account for more than one-third of the India business. Sampann grew 58%, and it was broad-based volume growth. RTD revenue was up 41% with robust volume growth.”

— Sunil D’Souza, Managing Director and CEO

The company is targeting niche, high-trust categories rather than competing in the mass edible oil market. This focus on premium segments allows them to maintain better margins while avoiding low-differentiation price wars.

“We decided to get into cold-pressed oils because we saw a consumer trust deficit regarding whether oils were refined or cold-pressed. Putting the Tata brand name on it worked well, and we figured we could drive growth with margins. In the base edible oil segment, our current hypothesis is that we do not have the full capability to play there, and we would struggle to find differentiators since the trust deficit is not as strong.”

— Sunil D’Souza, Managing Director and CEO

Input costs for tea are rising, particularly at the lower end of the market. Investors should monitor how this affects the company’s margin profile as they enter the peak buying season.

“Overall, we are seeing about 7-10% inflation for now, but the peak cropping season has just started. Right now, the crop seems quite good in Assam. We saw inflation more at the bottom end of the portfolio. We are not yet through a significant portion of our buying.”

— Sunil D’Souza, Managing Director and CEO

The Sampann brand has achieved a massive turnaround, shifting from losses to healthy double-digit margins. This success proves the company’s ability to scale newer brands profitably through efficient operations.

“In Sampann, we moved from a negative 5% margin in 2020 to closing in on 12%. This quarter had 150-200 bps of margin expansion year-over-year. The most critical piece is operating leverage.”

— Sunil D’Souza, Managing Director and CEO

The company expects future growth to be very efficient because they don’t need to add much more staff to increase production. This means more of the revenue growth should turn into pure profit for shareholders.

“Scale leverage should kick in quickly. In terms of headcount, apart from specific injections for vending and RTD, there is no substantial increase. Our headcount is broadly stable, and we do not expect significant increases in the middle of the P&L.”

— Sunil D’Souza, Managing Director and CEO

There is a massive opportunity to grow the water business by simply improving distribution in Northern and Western India. Bridging this execution gap will likely be a key growth driver for the beverage segment.

“We have availability in probably 75% of the country, but in terms of real distribution and marketing execution, we are probably only at 40-50%. We have a long way to go. The north and west are broadly white space geographies.”

— Sunil D’Souza, Managing Director and CEO

Dodla Dairy Limited | Small Cap | Dairy Products

Dodla Dairy is a leading regional dairy player in South India with a significant international presence in Uganda and Kenya. The company operates an integrated supply chain through direct procurement from farmers to produce a wide range of milk and value-added products.

[Concall]

Management opted to maintain high procurement prices to secure future inventory despite rising supply, which squeezed immediate margins. This suggests a tactical decision to prioritize supply security over short-term earnings during a period of market volatility.

“While milk availability has improved during the quarter, procurement prices did not come down as the focus was on building up the inventory for future requirements. Our strategy is in line with the overall industry trends. These elevated procurement prices were not fully passed on to the consumers, resulting in continued near-term pressure on our profitability.”

— Dodla Sunil Reddy, Managing Director

The company achieved record value-added product sales without relying on bulk commodity markets, indicating a successful shift toward high-margin retail products. This focus on consumer-facing VAP segments helps decouple the business from the volatility of industrial milk powder prices.

“Notably, the highest ever number is achieved without any support from bulk sales for Skimmed Milk Powder (SMP) or butter, reflecting our continuous efforts and the dedication of our team towards the VAP product mix aspiration. On a like-for-like basis, excluding the bulk sales proportion, VAP delivered a solid growth of 40.6% year-on-year.”

— Dodla Sunil Reddy, Managing Director

Dodla is taking a strategic stake in Sid Farm to enter the premium direct-to-consumer dairy space. This allows the company to participate in high-growth niche markets without the high risk of building a new brand from scratch.

“The investment aligns with our core dairy business and provides exposure to the fast-growing premium and D2C dairy segment. It also offers us an opportunity to associate with and support a growing, differentiated, high-quality dairy brand.”

— Dodla Sunil Reddy, Managing Director

Profitability was impacted as the spread between procurement costs and sales prices narrowed by over 1.7 rupees per liter. This quantification highlights that operational efficiencies were offset by the deliberate lag in passing cost increases to consumers.

“To put the squeeze in context, the spread between our milk realization of 59.4 and the procurement cost of 41.3 narrowed to 18.1 per liter from 19.8 a year ago, which largely explains the margin decline from 8.2% to 5.4%. In addition to that, we witnessed some increase in our operational costs, mainly due to input cost inflation and the shift in product mix from bulk sales to liquid milk and VAP sales.”

— BVK Reddy, CEO

The investment in Sitfarm serves as a low-cost research laboratory to understand emerging D2C trends and consumer habits. This conservative approach to innovation protects the balance sheet while keeping the company prepared for future shifts in dairy consumption.

“Regarding the capital allocation to Sitfarm, it is basically for us a way to learn and keep a closer watch on how the modern high-value D2C products behave. For example, we believe that for a consumption pattern to become a habit from a fad, it will take a significantly long time. Therefore, we try to learn from these pieces rather than trying to create them on our own.”

— Dodla Sunil Reddy, Managing Director

The company expects to pivot from selling bulk commodities to buying them to meet internal demand as procurement growth remains moderate. This shift reflects strong internal consumption of raw milk for branded products rather than a surplus-driven business model.

“This year, we might have to be net buyers of commodities. We are not seeing a surge of 20-25% in procurement volumes, so we do not have much bulk sales available.”

— BVK Reddy, CEO

High utilization rates in East Africa are prompting the company to plan its next phase of capital expenditure through a new project in Uganda. This expansion underscores the Africa segment’s role as a high-growth engine for the consolidated entity.

“In Kenya, we are utilizing almost 80%, with a capacity of 1.5 lakh liters. In Uganda, we are also at full capacity as we are targeting yogurt growth. We are planning a greenfield project in Uganda.”

— BVK Reddy, CEO

Dodla is adopting a defensive stance in Southern states where subsidized cooperatives keep retail prices artificially low. By focusing on volume in new markets like Maharashtra, the company aims to balance its procurement needs with profitable growth.

“In core markets like Karnataka and Tamil Nadu, the price differential with cooperatives is significant, so we focus on maintaining market share rather than aggressive pushing unless cooperatives correct their prices. Maharashtra will primarily be a procurement and balancing operation, with local sales of about 2 lakh liters per day.”

— BVK Reddy, CEO

Healthcare

Dr. Lal PathLabs | Mid Cap | Healthcare Services

Dr. Lal PathLabs is one of India’s leading diagnostic healthcare providers, offering a comprehensive range of pathology and radiology testing services. The company operates an extensive network of laboratories and collection centers across the country to serve a diverse patient base.

[Concall]

Income per patient grew significantly due to better pricing on government contracts and a shift toward more expensive tests. This improvement in realization suggests the company is effectively high-grading its service mix.

“Revenue per patient rose to 968, up by 10% from 818 in Q1 last year. This is primarily led by a favorable change in the test and geographic mix and an increase in CGHS and ECHS prices.”

— Ved Prakash Goel, Group CFO and CEO of International Business

Government-mandated price hikes are contributing roughly 3% to the company’s total revenue growth. This tailwind is expected to support financial results for the remainder of the fiscal year.

“The CGHS and ECHS price increase is now flowing through into the system. Our assessment is that it is impacting the numbers to the tune of 2-3% at an overall company level. I think this benefit will continue for at least another two to three quarters.”

— Ved Prakash Goel, Group CFO and CEO of International Business

The company plans to hold off on any general price increases until the second half of the year. This patient approach suggests they are prioritizing volume growth and market share over immediate margin expansion.

“Right now, we have anyway indicated that we would be thinking about a price change only towards the end of the year. We will reassess then whether a pricing change is required or not.”

— Shankho Banerjee, CEO

The company is launching specialized, affordable testing packages specifically designed for rural markets rather than using their standard urban products. This targeted approach could unlock a massive and underserved patient demographic for future growth.

“The rural outreach program is not driven by Swasthfit. It is a different, more affordable rural package. The objective there is to serve the rural population, identify what kind of non-communicable diseases are prevalent there, and help that population get the benefit of quality testing.”

— Shankho Banerjee, CEO

Operations in Western India are recovering and approaching double-digit growth following a period of integration. Investors should see this as a sign that the company’s regional acquisition strategy is finally gaining traction.

“The Suburban business, which is the main driver of our West portfolio right now, is really turning around and is moving very close to double digits in terms of growth. Last quarter, we started investing into new radiology centers and a collection network through the Suburban brand.”

— Shankho Banerjee, CEO

While current growth is robust, management is being cautious about identifying a single permanent driver for the acceleration. This suggests the current uptick is broad-based across various test types and geographies.

“Aside from high CGHS pricing, we need to wait for a few more quarters to get more clarity at the test and client level before we can decipher further, as there is no other differential trigger we have identified as of now. The growth is all around.”

— Shankho Banerjee, CEO

Global expansion is viewed as a multi-year project rather than a quick source of revenue. The company is taking a deliberate approach to learn international market dynamics before committing to large-scale operations.

“The international business growth is a longer-term plan which we expect to play out over a three-to-five-year horizon. These steps are being taken to ensure we understand these markets, which include Africa, parts of the Middle East, CIS, and Southeast Asia.”

— Shankho Banerjee, CEO

The company plans to use its substantial cash reserves primarily for domestic acquisitions. This signal suggests that inorganic growth in underserved Indian cities will be a key driver for the company’s future footprint.

“One of the major utilities for cash going forward would be M&A. Geographically, within India, there are parts of the country where we are underrepresented, so we are looking for getting a play or a larger asset in a given city.”

— Ved Prakash Goel, Group CFO and CEO of International Business

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Quotes in this newsletter were curated by Kashish.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.

Welcome to the 71st edition of The Chatter — a weekly newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.

We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.

In this edition, we have covered 12 companies across 7 industries.

Software Service

• Infosys Ltd.

Energy

• Adani Power

Aviation

• InterGlobe Aviation (IndiGo)

Fertilizer & Chemicals

• Coromandel International

• SRF Ltd

Financial Services

• Motilal Oswal Financial Services Limited

• Go Digit General Insurance Company Limited

• Ujjivan Small Finance Bank Ltd

• Spandana Sphoorty Financial Limited

• Suryoday Small Finance Bank Limited

Information Technology

• Mphasis Limited

Retail

• Meesho Ltd

Infosys | Large Cap | Software Services

Infosys is a global leader in next-generation digital services and consulting, facilitating clients worldwide in their digital transformation journey. With over 40 years of experience, Infosys leverages cloud and AI technologies to empower businesses with agile digital solutions and continuous improvement.

[Concall]

Nandan outlined a structured succession plan under which Salil Parekh will mentor Ashish Dash for several months before formally taking over as CEO in April 2027.

“The board has appointed Mr. Dash as the new CEO designate. He will work with Salil over the next few months. For the next two to three months, he will focus on receiving coaching and training on being a CEO, and then for six months, he will work as a mentee under Salil’s leadership, who will groom him for the complex job of managing a $20 billion company during this transformational time. We are all very excited by this choice; it has received a very positive response internally and with customers. You will have the opportunity to meet him in a few months.”

— Nandan Nilekani, Chairman

Salil Parekh highlighted the rapid acceleration in Infosys’ AI business, saying AI has become a meaningful revenue contributor and is creating long-term relevance for the company’s services.

“We saw strong acceleration in our AI business, which I shared earlier, with AI revenues for the quarter at 8.2%. This has been growing at double digits quarter-on-quarter over the last several quarters. With this momentum, we see long-term relevance of our services for our clients. In terms of delivery, over 80,000 employees are currently working on coding tools such as Copilot or CodeX for our clients and internal projects. We saw strong traction across the six areas of growth in our AI strategy, Hexagon. We see client work, for example, in building agents for processes, data for AI, modernization, and coding tools.”

— Salil Parekh, CEO & Managing Director

Management showcased a real-world AI implementation in healthcare and explained how Topaz Fabric has become the centrepiece of Infosys’ enterprise AI strategy by enabling clients to deploy multiple foundation models while retaining control over their data.

“For a healthcare company, we implemented AI agents to automate Medicaid eligibility verification and operations support. This solution reduced eligibility verification time from approximately 6–8 days to 4 minutes. We are building a team of frontier engineers to support our client work, with a plan to reach 6,000 frontier engineers over the next few years.

We built a platform, Infosys Topaz Fabric, that allows our clients to gain the benefits of AI while maintaining sovereignty over their data and company knowledge. Our clients are able to work with any foundation model—closed, open-weight, on-cloud, or on-premise. Topaz Fabric provides a harness that enables clients to fully deploy the benefits of foundation models into their organizations. Our clients are also able to optimize their token costs by ensuring appropriate models are used for specific tasks. Overall, we see a good pipeline for AI services, which provides visibility for continued AI work with our clients.”

— Salil Parekh, CEO & Managing Director

Jayesh Sanghrajka explained why revenue growth fell short of expectations, attributing it to a one-off client termination, softer volumes, pricing pressure and increased client demands for productivity.

“Q1 revenue growth was lower than our expectation, mainly due to a one-off 50 basis point impact on account of program termination by an EURS client during the quarter. This was not factored into the earlier guidance. Volumes were soft and weaker than expectations compared to historical Q1 trends. Additionally, client expectations regarding productivity, along with high competitive intensity, are resulting in softer price increases compared to our expectations. Sequential revenue growth was also impacted by higher offshoring to de-risk our business model, along with lower revenues from a European manufacturing client as mentioned in the last earnings call.”

— Jayesh Sanghrajka, Chief Financial Officer

Management highlighted the quality of large deal wins during the quarter, noting a high share of net new business and strong traction from vendor consolidation opportunities.

“Large deal wins were strong at $3.6 billion with a high net new component of 61%, reflecting the relevance of our value proposition. Out of the 22 large deal wins, we had three deals worth $400 million each. We have been on the positive side of vendor consolidation, with 20% of the total large deal TCV coming from new vendor consolidation deals.”

— Jayesh Sanghrajka, Chief Financial Officer

Management described how financial services clients continue to prioritise AI, modernisation and productivity despite macro uncertainty, with AI engagement becoming broader across strategy, engineering and operations.

“In financial services, uncertainty and geopolitical instability are causing some client hesitancy, leading to a more cautious approach to spending. Client priorities are centered on efficiency, productivity, and modernization, with discretionary spend being evaluated more carefully. We see momentum across banking, payments, capital markets, and wealth management. AI adoption has been incremental and additive, with clients increasingly engaging us to support their AI journeys across strategy, platforms, engineering, and operations. This is reflected in our strong deal wins this quarter. With approximately $1 billion in net new large deal TCV, GCCs continue to expand, and we are partnering with our clients in both the setup and growth of GCCs.”

— Jayesh Sanghrajka, Chief Financial Officer

Management explained why manufacturing continues to remain one of the weaker verticals despite growing AI opportunities, citing client-specific issues, macro uncertainty and disciplined deal selection.

“Growth in manufacturing continues to be impacted by lower revenue from a large client. Clients remain cautious on discretionary spend and decision-making is elongated, especially in the European automotive sector. The impact of tariffs, geopolitical uncertainty, and energy costs is keeping budgets tightly controlled. While AI adoption is creating new opportunity areas, it is also raising productivity expectations from clients. We are achieving better pricing on AI skills and consulting. We remain focused on supporting clients through digital, AI, modernization, and consolidation initiatives, while balancing growth opportunities with disciplined deal selection and sustainable pricing.”

— Jayesh Sanghrajka, Chief Financial Officer

Management highlighted how retail clients are increasingly funding AI investments through cost optimisation, resulting in new commercial models centered around AI-led productivity commitments.

“In retail and CPG, consumer spend remains muted and budgets are tightly controlled due to geopolitics, inflation, and tariffs. Spend is shifting toward AI modernization and productivity-led programs funded through operational efficiency and cost optimization. Clients are asking for AI-led productivity commitments, leading to new pricing structures. We are leveraging our native knowledge of client business processes and technology landscapes, augmenting it with AI. The large deal pipeline is healthy, but decision cycles are longer.”

— Jayesh Sanghrajka, Chief Financial Officer

Management discussed the revised FY27 guidance and identified the major factors that influenced the downgrade, including acquisitions, reduced client spending and a deliberate decision to avoid uneconomic deals.

“Considering lower-than-expected Q1 revenues and a revised view of the rest of the year, we are revising our revenue guidance to 1.5% to 3%. This includes approximately 1.7% contribution from recently closed acquisitions of Optimum Healthcare and InLogik. There is also a slightly over 1% impact from a large European manufacturing client due to reduced client spend, along with our conscious decision not to pursue certain deals that were not aligned with our return expectations. We also anticipate an approximately 0.75% to 1% impact from the shift toward offshore.”

— Jayesh Sanghrajka, Chief Financial Officer

Despite lowering revenue guidance, management reiterated its confidence in the long-term business outlook, highlighting AI as the primary driver of future growth.

“The overall business environment remains volatile. The lower end of the guidance assumes further deterioration in the macro environment. The top end assumes an improvement, though less than what we had assumed in our April guidance. Financial services and EURS are expected to grow higher than the company average. The underlying fundamentals of our business remain strong, and we continue to see healthy client engagements leading to a robust pipeline. We are taking decisive actions to capitalize on opportunities, especially across the six identified AI value pools. Spending is shifting toward areas with clear business cases such as AI-led modernization, cost transformation, cybersecurity, cloud optimization, and vendor consolidation.”

— Jayesh Sanghrajka, Chief Financial Officer

Management detailed the assumptions underpinning its unchanged margin guidance, explaining how productivity initiatives and currency benefits are expected to offset wage hikes and acquisition-related costs.

“As we look at the rest of the year, we remain confident in our strategy, disciplined in our investments, and focused on delivering stronger performance. Margin guidance is maintained at 20% to 22%. This assumes headwinds from wage hikes, productivity pass-throughs, AI investments, and a 50 basis point impact from acquisitions. These headwinds will be partly offset by initiatives under Project Maximus and currency benefits.”

— Jayesh Sanghrajka, Chief Financial Officer

Management explained that the guidance cut is not attributable to a single factor but reflects multiple headwinds, including weaker volumes, client productivity demands and pricing pressure.

“Typically, whatever happens in Q1 has a cascading effect on Q2, especially if volumes have been softer through Q1. This explains the guidance change. The multiple reasons for the change include the one-off situation with the EURS client, softer volumes, the demand for productivity from clients, and increased competitive intensity in pricing. Furthermore, we expect our onsite mix to be lower by roughly 0.75% to 1%, which impacts year-over-year comparisons. We previously called out a 0.75% to 1% impact from a European manufacturing client, which is now clearly above 1% as we have progressed on other deals. All of this is baked into the revised guidance.”

— Jayesh Sanghrajka, Chief Financial Officer

Management reiterated confidence in maintaining margins despite wage hikes, acquisition costs and other headwinds, citing multiple structural offsetting levers.

“We have given a guidance of 20% to 22% and remain confident in it. We will have headwinds from acquisitions, including amortization of intangibles and retention payouts. However, we have tailwinds from currency and Project Maximus, which provided 70 basis points and 20 basis points of tailwinds respectively this quarter. We also anticipate a 0.75% to 1% reduction in onsite mix. Balancing these factors, we are confident in maintaining our margin guidance.”

— Jayesh Sanghrajka, Chief Financial Officer

Management discussed how AI is fundamentally changing commercial models in IT services by increasing productivity expectations, even as Infosys continues to win new AI-led business.

“Large deal terms have not increased; they still average between three to five years. While mega deals can have longer terms, most of our current deals are under $500 million, including three between $400 million and $500 million. We must remember that renewals usually involve productivity asks. With AI, there is additional ‘AI-led deflation,’ which is a headwind. This is being offset by the net new business we are seeing.”

— Jayesh Sanghrajka, Chief Financial Officer

Management said AI-driven productivity demands are no longer limited to contract renewals and are increasingly becoming part of ongoing client engagements across industries.

“Demand for AI productivity is across most industries, particularly in telecom, financial services, retail, and utilities. The discussion often starts when new AI foundation models are released, and while it definitely comes up at renewal, it sometimes appears mid-contract as well.”

— Salil Parekh, CEO & Managing Director

Management dismissed concerns over hyperscalers expanding their consulting capabilities, arguing that Infosys’ client relationships, domain expertise and scale provide a durable competitive advantage in enterprise AI implementation.

“I see hyperscalers launching services practices as a positive, as it confirms the long-term relevance of the work we do. We have over 300,000 employees and deep context for our specific clients, which is necessary for complex AI integration. A few thousand consultants from a hyperscaler cannot match the scale of Infosys.

Regarding talent, we already have people operating at the frontier engineer level. We are building programs to elevate them and training graduate recruits. We will look externally, but our primary method is hiring from colleges and upskilling internally.”

— Salil Parekh, CEO & Managing Director

Management outlined how enterprise clients are increasingly optimising AI costs by choosing different foundation models for different workloads, with Topaz Fabric enabling model orchestration.

“Large enterprises are becoming more sensitive to which foundation model is best for specific tasks. They may use a smaller, less expensive model for simple tasks and a high-end model for complex ones. Our Topaz Fabric allows clients to manage this efficiently. We are currently working with 15 different models in Topaz Fabric, and we can help clients decide which is most efficient for their needs.”

— Salil Parekh, CEO & Managing Director

Management said AI is changing workforce productivity but does not expect it to reduce hiring, as expanding demand is creating new opportunities that require continued recruitment.

“We recruited 20,000 college graduates last year and plan to recruit 20,000 this year as well. We have already recruited over 4,000 in Q1. While AI allows the same amount of work to be done with fewer people, there is also more work being generated. We don’t have an exact end-of-year headcount figure, but we expect headcount to grow as revenue grows.”

— Salil Parekh, CEO & Managing Director

Management explained that Infosys is pursuing an AI transformation through reskilling rather than workforce restructuring, while identifying the areas seeing the strongest client demand.

“On the supply side, we have not done staff restructuring; we have focused entirely on reskilling. College graduates are coming in with a native understanding of AI, and we train them on Topaz and internal tools. We will use lateral recruitment for some niche skills in short supply, but we largely rely on our long-duration training from the ground up.

On the demand side, we see scaling in process AI, AI engineering, and the data layer for AI. Substantive work in building agents, coding, modernization, and data is scaling well.”

— Salil Parekh, CEO & Managing Director

Adani Power | Large Cap | Energy

Adani Power Limited (APL) is India’s largest private sector thermal power producer, operating across multiple states. The company focuses on leveraging technology and innovation to make India a power-surplus nation, ensuring the supply of quality and affordable electricity nationwide.

[Concall]

Management explained why it believes India’s recent power demand validates the need for large-scale thermal capacity additions, arguing that geopolitical uncertainty and extreme weather have reinforced the importance of reliable baseload power.

“As we begin this new financial year, one thing is increasingly clear: in times of geopolitical uncertainties and extreme weather events, a nation needs abundant, reliable and domestically available energy. As India’s economy continues to advance, the importance of reliable baseload power to the country’s growth story has become even more evident.

During the quarter, India experienced a hotter than usual summer with sustained heat waves across most regions. Due to these high temperatures, peak demand shot up to a record high of around 250 gigawatts in May 2026, while overall energy consumption rose by 8.4% year-on-year to 485 billion units for Q1 FY27. This has also put to rest concerns over any demand slowdown that arose in the previous year.

Thermal power was once again the mainstay for fulfilling the nation’s electricity needs during this period of surging demand.”

— S.B. Khyalia, Chief Executive Officer

Management outlined Adani Power’s strategic direction beyond thermal power, confirming its intent to diversify into hydro and nuclear while continuing to anchor India’s long-term energy security.

“Looking beyond the horizon, we are entering new and exciting territories as we expand our thermal base. We are also diversifying into international hydropower projects and preparing ourselves for new opportunities in the nuclear power field. We are strongly committed to helping India meet its long-term development goals with the supply of reliable and competitive electricity.”

— S.B. Khyalia, Chief Executive Officer

Management said the newly acquired Jaiprakash assets provide meaningful long-term optionality, not just through existing generation assets but also through strategically located land banks suitable for future thermal and nuclear expansion.

“Regarding the opportunities for expansion at Bina and Nigri, there is a good opportunity because at both locations, a lot of land is available. Potentially, going forward, we will have this as a land bank available, whether we want to go for thermal expansion or nuclear.

In the case of Bina, we are also exploring the possibility of developing nuclear power, depending on whether the site is conducive from the point of view of various requirements for nuclear. We have not yet planned anything, but these are two sites where a good land bank is available, and going forward, these sites will obviously be available for any growth opportunities.”

— S.B. Khyalia, Chief Executive Officer

Management explained that while it has set an ambitious nuclear power target, investments and technology choices will only be finalised after the Government notifies the enabling regulatory framework.

“The government has not yet come out with the rules under the Act. So, until we get clarity on that aspect, it would be difficult to decide on these things.

Nevertheless, we are evaluating both domestic and international technologies, and it will all depend on what is cost-effective in terms of cost per megawatt. End of the day, electricity has to be viable for Indian consumers and at rates affordable to Discoms.

We will make decisions regarding technology, domestic or foreign, only when the rules are in place. At present, we are waiting for the rules. As soon as that happens, we can move fast. We are keeping our sites ready from the point of view of their suitability, and various studies are being carried out.”

— S.B. Khyalia, Chief Executive Officer

Management highlighted a significant improvement in collections from Bangladesh, stating that monthly inflows now consistently exceed current billings and should continue reducing receivables over time.

“For the quarter ended, the receivables are in line as we are getting payments on a regular basis. Last month, we received approximately $100 million. On an average monthly basis, we are getting $100 million in payments.

Specifically for the June quarter, our receivable is near about $400 million. We are expecting that every month, on average, we will continue to get about $100 million from the Bangladesh Power Development Board. This will be continued, and it will be slightly higher than our monthly bill.

We are expecting that the receivable position, liquidity, and realization will increase over time.”

— Management

Management said the company is already planning additional thermal capacity beyond its existing expansion pipeline because state-level resource adequacy studies point to a significant shortage of baseload power over the coming years.

“A lot of opportunities are arising because this summer has given a clear indication to policymakers that many thermal power projects and baseload capacity are required.

Obviously, many states are contemplating coming out with bids. If you see the resource adequacy studies of various states, every state has a huge deficit and requirement for the next five to six years.

We expect many more bids will come from the Discoms, and therefore we have thought that we will probably need to add more capacity. The current 24 gigawatt capacity we have planned is now tagged to specific locations. If any state comes with a bid that is specific to that state’s location, we have to tie up new capacity. Keeping that in mind, this additional 3 gigawatts is considered and planned.”

— S.B. Khyalia, Chief Executive Officer

Management explained why Adani Power has increased its nuclear ambition to 10 GW, while cautioning that execution remains contingent on the Government notifying the operating rules under the amended Atomic Energy framework.

“You have rightly said that it will be dependent on government guidelines, and the government has not yet come out with the rules under the Act. So, until we get clarity on that aspect, it would be difficult to decide on these things.

Nevertheless, we are evaluating both domestic and international technologies, and it will all depend on what is cost-effective in terms of cost per megawatt. End of the day, electricity has to be viable for Indian consumers and at rates affordable to Discoms. The project cost has to be in that range.

We will make decisions regarding technology, domestic or foreign, only when the rules are in place. At present, we are waiting for the rules. As soon as that happens, we can move fast.”

— S.B. Khyalia, Chief Executive Officer

Management explained that the company has deliberately planned an additional 3 GW of capacity because state-level power deficits are creating a much larger opportunity pipeline than previously anticipated.

“A lot of opportunities are arising because this summer has given a clear indication to policymakers that many thermal power projects and baseload capacity are required. Obviously, nuclear will take some time, even if we get the rules in the near future. Any nuclear power project is going to take seven to eight years from the stage of planning to commissioning. During this period, thermal would be the only source providing the baseload power.

Obviously, many states are contemplating coming out with bids. If you see the resource adequacy studies of various states, every state has a huge deficit and requirement for the next five to six years. We expect many more bids will come from the Discoms, and therefore we have thought that we will probably need to add more capacity.”

— S.B. Khyalia, Chief Executive Officer

Management reiterated that the strategic objective is to steadily eliminate merchant market exposure by converting open capacity into medium- and long-term PPAs, thereby improving earnings stability.

“Merchant capacity has reduced. As I mentioned, for our Butibori plant as well as our Tuticorin plant, those were previously merchant but are now under PPAs. Specifically for volumes, this quarter we had 4 billion units, while the same period last year was 6 billion units. There is a one-third reduction in merchant units, and there is a capacity reduction in open capacities.

...Some capacity at Raipur is also tied up under PPA with Karnataka. A lot of reduction has happened, and going forward, we would like to tie up almost everything through medium-term or long-term PPAs to reduce volatility from market prices.”

— Management

Management outlined the scale of thermal demand emerging across India, highlighting several large state tenders where it expects to compete aggressively for long-term PPAs.

“The bids under progress include Uttar Pradesh for 4,000 MW, Gujarat for 4,000 MW, Uttarakhand for 1,320 MW, and West Bengal for almost 3,800 MW. That is 13,000 megawatts of total bids. We expect to be the strongest competitor.

Beyond this, many states have deficits. Bihar has further deficits, and Andhra Pradesh has sought coal linkages for future bids. We expect many more bids up to 2032-33 based on resource adequacy studies.”

— S.B. Khyalia, Chief Executive Officer

SRF | Mid Cap | Chemicals

SRF is a global leader in industrial and speciality intermediates, known for its strong R&D capabilities. It operates in Chemicals, Packaging Films, Technical Textiles, and Other Businesses, with a presence in India, Thailand, South Africa, and Hungary. The company is a market leader in several segments across multiple countries.

[Concall]

While acknowledging that the exceptional profitability in the Films business will moderate after Q1, management said the underlying earnings base has structurally improved because of value-added products and overseas execution.

“After this exceptional performance in Q1, which was aided by supply constraints and higher prices due to geopolitical uncertainties, we do see the performance of this business stabilizing to more normal levels in Q2. Having said that, we expect the baseline performance to be recalibrated at a higher level from here on.”

— Sameer Kashyap, President & Chief Financial Officer

Management cautioned investors that Q2 is seasonally weaker for SRF’s chemicals business but emphasised that the record Q1 performance puts the company in a strong position to achieve its full-year objectives.

“It is important though to recognize that SRF’s business, especially the chemicals business, is highly seasonal in nature and has been, as has been the case in the past, we will see lower numbers in Q2 compared to Q1. Having said that, this exceptional outcome across all our businesses in Q1, which has helped us deliver a best ever quarterly performance, positions us very well to achieve our goals for this financial year.

This outcome is a strong testament to the resilience, maturity, and robustness of our business to convert adversity into opportunity and maximize outcomes while remaining strongly committed and steadfast in our efforts to ensure the success of our customers as well.”

— Sameer Kashyap, President & Chief Financial Officer

Management said Speciality Chemicals is finally seeing the first meaningful signs of recovery after a prolonged downturn, with both volumes and pricing beginning to improve, although the recovery remains gradual rather than broad-based.

“We are starting to see volumes over a little bit through last quarter and this quarter as well. The trend is upward. So that is the first sign, and I think the second piece, which is probably one that has you more concerned, is around price. At least across key products at this point in time, we are finally starting to see the price trend marginally upwards in the right direction.

We’ve seen some volumes also... through this period in Q1, while there has been some opportunistic buying as well, across specific pockets where we have stayed by the customer’s side through this journey, we are starting to see support from them on the volume side.

We have seen uptake there. So I think that is the basis and genesis of my opening comments around volumes starting to look better. It is still early signs. It is in pockets, so I would not say it is a broad-based improvement just yet.”

— Sameer Kashyap, President & Chief Financial Officer

Management outlined its long-term pharmaceutical CDMO ambitions, saying the number of molecules and customer engagements is steadily increasing, improving the probability of meaningful scale over time.

“In terms of pharma, we have a stated goal to be in the 20-30% range of revenue by 2030. We are progressing well on that journey. We’ve had a strong outcome the last couple of quarters in growing that share. It is baby steps, and in the larger scheme of the numbers, it does not show up just yet.

But to give you some more color on what is positive on that front through this quarter is that we are working on a larger number of molecules with a set of customers. The number of customers we are working with is also growing. When you put that together, you are in a matrix where the likelihood of your hit rate improving has gone up because you’ve increased both the universe and the number of molecules that you’re playing in.

When one of these come to fruition in terms of truly large quantities that matter, I think we will start seeing some step function changes.”

— Sameer Kashyap, President & Chief Financial Officer

Management emphasised that SRF’s strategy during the agrochemical downturn was to protect market share rather than maximise margins. That strategy is now beginning to pay off as customers increase offtake and both prices and volumes improve.

“Through the last year, you heard the commentary from SRF being very clear around protecting share. That was the primary focus, and I think that’s paid off well over this time. It has been a very difficult journey as we saw the price destruction around us, but nevertheless, I think we’ve done a fabulous job of holding onto share.

...Across specific pockets where we have stayed by the customer’s side through this journey, we are starting to see support from them on the volume side. We have seen uptake there.”

— Sameer Kashyap, President & Chief Financial Officer

Management believes the “time for refrigerant gases has arrived,” suggesting that this business has entered a structurally stronger phase rather than benefiting from a temporary upcycle.

“We’ve said this for a little while now, even though some from a market standpoint looked at it differently—the time for gas has arrived. I think what you’re seeing in our results is that part of the portfolio is truly shining at this point in time and delivering on a plan that we put in motion sometime ago. So that will continue to be a big driver.”

— Sameer Kashyap, President & Chief Financial Officer

Management revealed that SRF’s packaging films business substantially outperformed competitors because its global sourcing model insulated it from the supply disruptions that affected much of the industry.

“In a way, the world had shut. The rest of the world was shutting plants and capacities were going off stream. Like I told everyone on the previous call, we were operating flat out at 100% capacity.

The fact that we operate in a DTA unit and source globally ensures that our raw material supply chains were very robust. That ensured we were operating right through this entire quarter... when you contrast us with the rest of the competition, we will stand out differently on that account.”

— Sameer Kashyap, President & Chief Financial Officer

Management explained that the outstanding Q1 performance in packaging films was not solely driven by price increases but also by SRF’s ability to reliably supply customers during a period of panic buying.

“There was a period where there was a lot of panic buying by a bunch of customers... We’ve tried to manage this journey of price volatility effectively for our customers because we also realize that at some point it is going to correct as well.

The crux truly comes down to the efficacy with which we could operate and ensure we could deliver products to customers reliably, which was significantly impacted during this period.”

— Sameer Kashyap, President & Chief Financial Officer

Management said the broader strategy for the Films business is to structurally reduce earnings volatility by increasing the mix of value-added products rather than depending on commodity film cycles.

“The broader strategy right now for the packaging film side of the business is really to de-risk ourselves from the volatility of film pricing.

Everything that we’re doing on every value-added play—whether that is on metallized products, coated products, what we’re planning to do on BOPA and capacitors, and even some of the new initiatives like the new capex the board approved yesterday—are all steps in that direction.

The reason we are embarking on this journey is really to de-risk ourselves from the cyclicality of polyester pricing.”

— Sameer Kashyap, President & Chief Financial Officer

Management said the recovery in speciality chemicals is expected to be gradual rather than V-shaped, with both pricing and volumes likely to improve steadily through the rest of FY27.

“Through the last quarter and this quarter, at least on the core set of products in the portfolio, we definitely have seen a directional shift in volume. I wouldn’t say it’s a step function as yet, but even in the sequential quarter, we are starting to see that trend get positive.

It is not only volume; it is both volume and price on those core types of products. Directionally at least on that front, it seems like we have scraped the bottom and are getting better from here.

Our view is that through the rest of the year, we will keep making steady progress. It is not going to be a hockey stick type of recovery; it will be linear and probably slow... As is typical seasonality in chemicals, we think H2 will be stronger than H1.”

— Sameer Kashyap, President & Chief Financial Officer

Meesho | Mid Cap | Retail

Meesho Ltd. is an online marketplace enabling small businesses and individual sellers to reach customers nationwide through a zero-commission, asset-light model. It offers affordable fashion, home, beauty, and lifestyle products to millions of users across India.

[Concall]

Meesho provides long-term guidance of 25% CAGR over the next 5 years, with growth expected to be higher in initial years and gradually moderate.

“We have a long-term growth guidance of a 25% CAGR over the next 5 years. This is obviously higher in the initial years and may be lower in the latter years. That is the baseline we work with.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho anticipates Q2 year-over-year growth rates to vary due to a shift in Diwali and annual festive sale timing from September (last year) to October (this year), but combined Q2 and Q3 growth should align with the typical trajectory.

“Regarding the Q2 and Q3 period, Q2 this year will be different from Q2 last year. Last year, our annual festive sale started in September because Diwali was earlier in the year. This year, with Diwali in November, our annual sale will start in October, which is a significant GMV-generating event. You will see variations in the year-over-year growth rate in Q2 versus our usual trajectory, but on a combined Q2 and Q3 basis, it will look similar to our typical trajectory. That is just a timing difference.”

— Dhiresh Bansal, Chief Financial Officer

Meesho’s primary objective is to continually reduce the cost per delivered order, and Valmo’s share in logistics remained around 50% in the last quarter, with no specific forward guidance on its share.

“The direction of the cost per delivered order will continue to come down. That is the objective function we work with, and hence, there is no specific guidance for the Valmo share at any point in time. In terms of quantification, the last quarter was about 50%, similar to the previous quarter.”

— Dhiresh Bansal, Chief Financial Officer

Meesho is developing localised supply chains to enable the sale of low-AOV products in categories like fresh grocery and ultra-low-priced apparel that are not viable on its national platform.

“A good way to understand this is through the grocery categories we do not serve today, such as fruits and vegetables, and apparel items with very small average order values, like sub-20 or sub-30 rupee products. We do not believe these can become viable on our core platform as it is hard to ship them nationally and make them available to consumers competitively. So we are building these localized supply chains so that sellers across grocery, apparel, and fast-moving consumer goods with very low price points can sell to consumers in a particular catchment.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho views competitive intensity as consistently high and unaffected by recent changes from other platforms, focusing on its own mission and vision.

“Intensity of competition in our sector has always been there; I do not think it ever went down. Even before the changes you referred to, changes have continued to happen. People have launched sub-platforms to compete with us over the last many years. I would not say the competitive intensity has changed in either direction. We continue to move forward on our own mission and vision.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho is a primary source of income for over 50% of its GMV-contributing sellers, indicating strong platform reliance among its merchant base.

“That being said, whenever we have done surveys or internal checks, we see that for a majority of our GMV-contributing seller base, we are one of their primary sources of income. For more than 50% of our sellers, we would be a primary source of income.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho successfully absorbed fuel price and minimum wage increases in Q1 and even reduced cost per delivered order by 1 rupee due to efficiency measures.

“Yes, during the course of Q1, we did see fuel price hikes coming through on both the Valmo network and some of the other 3PLs, and equivalently there were also certain minimum wage changes that happened across the ecosystem. I think all of those have been absorbed in the quarter. From a timing perspective, some of these happened around May, which is when the fuel price hike was announced. At the same time, we have also been taking measures to improve the efficiency of our operations. As a result, in the data book we shared, you can see that our cost per delivered order actually came down even during this quarter by about 1 rupee versus the previous quarter.”

— Dhiresh Bansal, Chief Financial Officer

Mphasis Limited | Mid Cap | Information Technology

Mphasis is an information technology services company specialising in cloud, AI, application development, infrastructure services, and business process outsourcing. It serves global enterprises across banking, financial services, insurance, logistics, technology, and other industries.

[Reference]

Management is positioning the company as a transformation partner rather than just a low-cost service provider. This strategic shift is designed to protect margins and maintain growth even during periods of slow IT spending.

“We are operating in the same environment as everyone else, whether it’s macro conditions, AI disruption, AI deflation, productivity issues, or longer decision cycles. Despite that, what’s working for us is our forward-leaning approach. Whenever clients seek efficiency, we focus on transformation at the intersection of technology and business outcomes rather than just cost.”

— Nitin Rakesh, CEO

The Mphasis Tria platform is helping the company capture more business from existing clients and enter new market segments. This indicates that the company’s internal product investments are successfully expanding its revenue potential.

“Mphasis Tria has changed conversations with customers, helped us gain wallet share, and allowed us to enter markets beyond traditional technology services. We believe the AI journey is only in its second innings.”

— Nitin Rakesh, CEO

Enterprises are shifting from experimental AI tools toward building core infrastructure that delivers tangible financial results. This trend creates a long-term pipeline of high-value implementation work for the company.

“Clients are moving away from choosing tools toward building AI foundations that deliver measurable business outcomes irrespective of the underlying model. We believe the AI journey is only in its second innings.”

— Nitin Rakesh, CEO

The company secured a major $100 million deal alongside several smaller foundational AI projects this quarter. A healthy mix of large and small deals provides both immediate revenue and a platform for future growth.

“We are seeing both large deals, including one over $100 million, and short-duration foundational AI engagements. These projects create the platform for multiple future waves of AI adoption, allowing us to participate throughout the enterprise AI transformation journey.”

— Nitin Rakesh, CEO

Recent margin compression was driven by temporary factors such as acquisition costs and investments in new project setups. Investors should watch if these upfront costs lead to the expected revenue acceleration in future quarters.

“Our guided EBIT margin range remains 14.75%–15.75%, and we remain within it. Margin softness came from a strategic acquisition, investments for deal ramp-ups, lower utilisation, and hedge losses.”

— Aravind Viswanathan, CFO

Despite general caution in the banking sector, financial institutions are still prioritising high-value AI transformation projects. This selective spending helps protect the company’s largest and most important business segment.

“BFSI remains our flagship segment with strong growth. While banks remain cautious on discretionary spending, they continue to invest in strategic AI transformation programs.”

— Nitin Rakesh, CEO

Mphasis aims to move up the value chain by becoming an essential partner for enterprise-wide AI deployment. Succeeding in this transition could lead to longer-term contracts and improved pricing power relative to traditional competitors.

“Companies that move beyond traditional IT services and become partners in enterprise-scale AI deployment will have the greatest opportunities. While banks remain cautious on discretionary spending, they continue to invest in strategic AI transformation programs.”

— Nitin Rakesh, CEO

Motilal Oswal Financial Services Limited | Mid Cap | Capital Markets

Motilal Oswal Financial Services is a diversified financial services company with businesses spanning wealth management, asset management, capital markets, investment banking, housing finance, and private equity. The company serves retail, institutional, and high-net-worth clients across India.

[Reference]

The company achieved record-breaking profits fueled by a mix of investment gains and underlying business growth. Investors should focus on the 14% sequential rise in operating profit as it represents the repeatable core performance of the firm.

“One of the highlights is that this is our highest-ever quarterly profit. We have declared a PAT of over ₹1,500 crore for the quarter. Though it includes around ₹900 crore of mark-to-market gains, the operating profit of about ₹600 crore is also an all-time high, up 14% sequentially.”

— Raamdeo Agrawal, Chairman and Co-founder

Asset management has become the dominant growth driver for the company, with profit growth significantly outpacing asset growth. This indicates high operating leverage and expanding margins within their fund management divisions.

“Among our four major businesses, asset management has led the performance. Our mutual fund and private equity businesses together have delivered strong growth. AUM has grown by over 30%, while profits have grown around 70%, including the unlisted business.”

— Raamdeo Agrawal, Chairman and Co-founder

The private equity segment is nearing a phase where it will realize performance-based fees from exiting investments. This points to a potential spike in high-margin income for the company over the coming year.

“Private equity earnings are fee-driven. Carry income depends on exits. We expect a carry event within the next 12 months as Fund II is nearing completion, although the exact timing depends on when the remaining investments are sold.”

— Raamdeo Agrawal, Chairman and Co-founder

Strong growth in fund management and housing finance is currently compensating for a temporary slowdown in the brokerage business. This diversification helps stabilize earnings even when capital market activity is soft.

“Despite subdued retail broking and wealth management, our asset management and housing finance businesses have grown by 30–40%, helping overall operating profit grow by 14%.”

— Raamdeo Agrawal, Chairman and Co-founder

The company holds a sizeable treasury while focusing on sustaining its core operating profit. Management’s confidence in maintaining the current run rate reflects a stable earnings outlook.

“We now have a treasury of around ₹10,500 crore. Operating profit remains the real indicator of business performance, and we are confident of sustaining the current quarterly operating profit run rate over the coming quarters.”

— Raamdeo Agrawal, Chairman and Co-founder

The housing finance business has stabilized and is entering its next growth phase with improving operating leverage. Management expects steady expansion in both assets and profitability.

“Housing finance has stabilised after the initial years. A new management team is in place, AUM is growing at around 25–30%, and operating leverage is improving. We are targeting 25–27% AUM growth and 30–32% bottom-line growth.”

— Raamdeo Agrawal, Chairman and Co-founder

The recent credit rating upgrade strengthens the company’s funding profile by lowering borrowing costs. This should support profitability across its lending businesses over time.

“CRISIL has upgraded our credit rating from AA to AA+, improving our cost of capital. Housing finance AUM has crossed ₹6,000 crore and continues to grow steadily.”

— Raamdeo Agrawal, Chairman and Co-founder

Management expects current business momentum to translate into higher operating profits for the full year, providing investors with a clear execution benchmark.

“Even with two businesses facing headwinds and two performing strongly, we have delivered 14% operating profit growth. If this trajectory continues, operating profit for the year should be around ₹2,500–2,600 crore.”

— Raamdeo Agrawal, Chairman and Co-founder

Coromandel International | Mid Cap | Fertilizers & Agrochemicals

Coromandel International is one of India’s leading agri-solutions companies with a diversified presence across fertilizers, crop protection, specialty nutrients, and rural retail. The company focuses on backward integration, capacity expansion, and technology-driven solutions to improve farm productivity.

[Reference]

he company managed to grow its top line significantly despite facing severe external headwinds like delayed rains and global supply chain disruptions. This suggests a resilient business model that can maintain operational stability even under difficult macro conditions.

“Just to correct one point, our revenue grew by 15%, while operating EBITDA declined only marginally by about 3%. It was a strong performance despite the delayed monsoon, the Middle East crisis, and challenges in the availability of key raw materials.”

— S. Sankarasubramanian, Managing Director and CEO

The company is actively lobbying the government to update subsidy levels to reflect the higher costs triggered by Middle East instability. A favorable decision here is a key catalyst for margin recovery in the coming quarters.

“As we move into the second quarter, we have been representing to the Government of India and the Department of Fertilizers for a revision in subsidy rates, since these rates were announced before the Middle East crisis. The government has received our representation favourably, and we are hopeful of a revision.”

— S. Sankarasubramanian, Managing Director and CEO

Management highlights that current government subsidy rates have not kept pace with the rising costs of essential raw materials like ammonia. The company is relying on its non-fertilizer segments to protect overall profitability while subsidy gaps persist.

“The sharp increase in prices of raw materials such as ammonia and sulphur was not adequately compensated through subsidies, which impacted fertilizer margins. However, Coromandel’s diversified business portfolio, including crop protection and retail, helped offset some of the impact.”

— S. Sankarasubramanian, Managing Director and CEO

Coromandel’s investment in its own acid plants is providing a major competitive advantage during global supply shortages. This backward integration ensures they can keep producing even when competitors struggle to find raw materials.

“While the industry faced raw material shortages, our captive plant enabled us to continue production. We operated the plant at nearly 80% utilisation, ensuring uninterrupted fertilizer availability.”

— S. Sankarasubramanian, Managing Director and CEO

A major production expansion is on track to go live by the end of 2024, promising volume growth in early 2025. The new specialty plant will also secure internal supply chains, potentially boosting margins in high-value product lines.

“Our 7.5 lakh tonne capacity expansion is progressing well and is expected to be commissioned by December, with the additional volumes becoming available during the fourth quarter of the current financial year. In addition, we are setting up a water-soluble MAP plant, which will ensure raw material availability for our specialty nutrients business.”

— S. Sankarasubramanian, Managing Director and CEO

The company is aggressively expanding its direct-to-farmer retail footprint by adding hundreds of new stores this year. This expansion into new states helps diversify revenue and improves the uptake of their proprietary specialty products.

“We currently have around 1,200 stores, and we expect this to increase to around 1,400–1,500 stores by the end of the year. Retail performed well during the first quarter.”

— S. Sankarasubramanian, Managing Director and CEO

Poor rainfall actually acts as a tailwind for the specialty nutrients segment because farmers rely more on controlled irrigation systems. This provides a natural hedge against the negative impact of a weak monsoon on bulk fertilizer sales.

“In specialty nutrients, demand generally improves during weaker monsoon periods because irrigation usage increases. We expect 20–25% growth in this segment as well.”

— S. Sankarasubramanian, Managing Director and CEO

When rural income is squeezed by bad weather, farmers shift toward more affordable products like Single Super Phosphate. Coromandel is benefiting from this trend by capturing demand for budget-friendly alternatives when high-end fertilizers become less affordable.

“During periods of monsoon stress, farmers’ purchasing power tends to weaken, leading to higher demand for lower-priced fertilizers. We are seeing strong momentum in SSP and lower-phosphate fertilizer grades.”

— S. Sankarasubramanian, Managing Director and CEO

Suryoday Small Finance Bank Limited | Small Cap | Banks

Suryoday Small Finance Bank is a scheduled commercial bank in India that focuses on providing financial services to the unbanked and underbanked. The bank offers a diversified range of products including microfinance, commercial vehicle loans, and mortgage-backed retail lending.

[Concall]

The bank is shifting its core business from group lending to individual loans to improve stability and customer relationships. Using government-backed insurance schemes helps protect the bank’s finances against potential losses in these loans.

“At Suryoday, our strategic transition from the traditional JLG model towards individual loans and Vikas loans continues to gain traction. Importantly, our customers are returning to their normal borrowing behavior, reflecting improved confidence and stability within the portfolio. The CGTMU framework continues to provide significant support to the balance sheet with a largely covered inclusive finance portfolio, successful claim settlements, and improved provisioning discipline.”

— Bhaskar Babu Ramchandran, MD and CEO

While official bad loan numbers look high at first glance, the actual risk is much lower because of insurance claims the bank expects to receive. After accounting for these payments, the net bad debt is very small, suggesting a healthy balance sheet.

“ On asset quality, our GNPA stood at 6.5% and NNPA at 1.2% as of June 30, 2026. In absolute terms, GNPA stood at 931 crores and NNPA at 170 crores, against which 134 crores is receivable under the CGTMU scheme. Adjusted for this receivable, the GNPA and NNPA stood at 2.9% and 0.3%.”

— Bhaskar Babu Ramchandran, MD and CEO

Management is prioritizing individual loans over group loans to better understand their customers’ full financial situation. They expect their secured lending, like vehicle and home loans, to grow even faster than their traditional micro-banking business.

“Our key focus continues on strengthening the inclusive finance portfolio, which is our backbone and our core focus area. As you know, we have moved to individual loans, which enables us an opportunity to directly engage with the customer and assess not just their credit needs but their overall banking needs. The secured assets are focused on commercial vehicles and mortgages which are gaining good traction, and we continue to focus on having a growth rate in this portfolio that will probably be higher than the inclusive finance growth.”

— Bhaskar Babu Ramchandran, MD and CEO

New bad loans in the microfinance division have slowed down to a manageable level each month. This suggests that the bank’s lending standards are working and repayments are becoming more predictable.

“I think the good part to note is that if you look at our MFI business, our slippages have moderated significantly. Our slippages on a monthly basis are less than 20 crores a month. So that is one discipline we should continue to focus on.”

— Kanishka Chaudhary, Chief Financial Officer

Interest rates for fixed deposits remain high, making it more expensive for the bank to get funding. To counter this, the bank is adjusting its savings account rates to attract cheaper, more stable deposits.