Hi, I’m Kashish and I work on Plotlines.

It builds on Chatter, but with a more structured lens. Instead of looking at management commentary from earning concalls in isolation, we track a single theme across companies and over time to connect the dots. The goal is to piece together how narratives evolve, and surface the deeper structural shifts shaping industries.

Today, we cover how AI is changing the rules of Indian IT services industry. This edition couldn’t have happened without the help of my colleague, and in-house IT sector expert, Pranav Manie, so a huge shoutout to him.

For nearly three decades, the Indian IT services pitch was simple to draw on a whiteboard. Take work that costs $150 an hour in New York, route it to engineers who cost a fraction of that in Bengaluru, keep the spread, and scale by adding more engineers. The model was so durable that the listed Indian IT industry — TCS, Infosys, Wipro, HCL, Tech Mahindra and the next tier — grew into a $250-billion-plus export machine on the back of it.

FY26 was the year that loop got publicly disowned by the people running the companies. Not because clients stopped buying services — bookings, by and large, held up — but because management itself began naming the model’s mortality on earnings calls. Some called it deflation. Some called it accretive. Some called it disruption they were inflicting on themselves before someone else did it to them. The vocabulary varied. The shape underneath did not. What follows is FY26 in the words of the operators, across five fractures in the old way of doing business.

[1] Revenue and headcount come apart

The first fracture is the load-bearing one. For three decades, headcount was a leading indicator for revenue at every Indian IT major. In FY26, the link visibly broke. Here is HCL’s CEO C. Vijayakumar, in plain numbers:

“If you see our revenue in the last couple of years, we have grown 4%-5% and our headcount has not grown. So, that gives you a sense there is some non-linearity playing out. Even this quarter, in revenue growth and headcount, there is at least 1.5% or 1% difference.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q2 FY26

Two years of growth without bodies. The word the industry has started using is “non-linearity” — a clean piece of jargon that translates to: the old equation, where one more engineer billed one more set of hours, no longer governs how revenue is made. Mphasis says the same thing in its own language:

“This naturally means that there is certain amount of de-linkage between revenue growth and headcount growth, which, again, we’ve been seeing for the last few quarters.”

— Nitin Rakesh, CEO, Mphasis | Q2 FY26

The most uncomfortable version of the same point came earlier in HCL’s year, when Vijayakumar was asked what happens to the people whose work is now being automated:

“Of course, we have had a good amount of people released due to the productivity improvements. Now, not all of them are readily redeployable because the requirements for some of the entry level or lower end skills are being addressed through Automation and other elements.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q1 FY26

“Released” is the operative word. So is “not readily redeployable.” The Indian IT majors employ a combined two million people. Even small percentage shifts in redeployability translate to large absolute numbers of careers that have to find a new direction.

Infosys is the outlier — but the way it’s framed is the more interesting part. CEO Salil Parekh confirmed Infosys had added 13,000 people through the first three quarters and would keep adding:

“For the year, we have added ~13,000 net headcount for the first three quarters. My sense is, we will continue to add headcount as we go through. And it sort of comes back a little bit to an earlier discussion we were having, which is there is a macro element and there is an AI element.”

— Salil Parekh, CEO & MD, Infosys | Q3 FY26

Read carefully, that’s not a defence of the old model — it’s a hedge that the macro is still hungrier for engineers than AI is yet capable of replacing them. The decoupling is happening at HCL and Mphasis already. At Infosys it is, for the moment, being absorbed.

The cleanest data point on the decoupling, though, comes from a company that didn’t appear in this set of calls. Coforge — a mid-cap that has had the strongest growth print in the listed Indian IT universe this year — grew revenue roughly 30% in FY26 while its employee cost base grew only around 20%. The gap between the two lines is the entire thesis of this section, expressed in a single income statement. Coforge management hasn’t framed this on a call the way HCL’s Vijayakumar has, but the numbers describe the same phenomenon: the unit of revenue is detaching from the unit of labour.

[2] The margin paradox — same phenomenon, two stories

The strangest thing about FY26 is that the same productivity gain shows up on one CFO’s slide as a discount the company is forced to give clients, and on another’s as a price premium the company is finally able to charge. The cleanest illustration of the dichotomy is that Infosys’s own CFO articulated both views on the same earnings call.

On the accretive side, Jayesh Sanghrajka pointed out that Infosys’s pricing has actually firmed up — and credited AI for it:

“In terms of pricing, I think pricing environment for us has remained stable. On the contrary, actually, most of our growth this year has been pricing-led because the volumes have been softer. And that in a way corroborates with the fact that the AI revenue are coming at a better pricing.”

— Jayesh Sanghrajka, CFO, Infosys | Q4 FY26

And then, a few questions later on the same call, on the deflationary side:

“Market is competitive. As I said, the competitive intensity in the market has gone up and the productivity will get passed back to the client largely.”

— Jayesh Sanghrajka, CFO, Infosys | Q4 FY26

Both statements are true. New AI-led work commands premium pricing because clients are still figuring out what it’s worth. Existing services, where the productivity savings are quantifiable and the competition can match the offer, give the savings back. The phrase “AI is accretive” and “AI is deflationary” describe the same underlying economics applied to two different parts of the book.

HCL has taken the most explicit deflationary view in the industry — to the point of pre-announcing the revenue it expects to lose:

“I think we are being very transparent. We are telling the clients, if you allow us to use AI Force and use all the recipes that we’ve created, we will showcase to you the optimization that is possible. And it will mean some reduction in revenue for us. And we are okay with that.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q1 FY26

By the end of the year, Vijayakumar had put numbers to it. A $100-million deal in the old shape, he said, was now closing for closer to $80 million:

“I mean, $100 million deal would be much lesser today - maybe 80 million, just on a rough ballpark. So, deal TCV is flat. But technically, it does require at least 25%, 30% more effort to convert and get to the same number.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q4 FY26

And, taking a longer view, he sized the structural drag on HCL’s own portfolio:

“If we look at the industry today and categorize it, 40% of the industry runs the risk of being disrupted by AI and can shrink 3% to 5% CAGR for a few years and can eventually be 25% of the enterprise spend... The 3% to 5% deflation that I mentioned in the AI disrupted services, based on the mix of services that we have, it would translate to 2% to 3% for our portfolio.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q4 FY26

To make room for that pivot, HCL ran a restructuring program through the year. The cost showed up plainly on the Q4 P&L: a reported operating margin of 16.5%, against an underlying 17.7% — a 120-basis-point drag the company chose to absorb in a single year.

Mphasis sits in the accretive camp, and Nitin Rakesh has been the most forceful about why:

“The good news though is that because we have this approach, we are at least not playing the pricing game alone when it comes to winning business. We are playing the Savings-Led Transformation game, and while we win business, we don’t have to sacrifice profitability of those deals because we are using this as a leverage.”

— Nitin Rakesh, CEO, Mphasis | Q2 FY26

TCS, predictably more measured, made the same point on revenue productivity but flagged the timing wrinkle — early-stage AI delivery still carries investment costs that distort margin comparisons:

“On the AI and data part, the revenue productivity is definitely much better than the TCS average or the traditional business, both at onsite and offshore. Margins, I will not call out because there would be investments which would be temporary or in the initial phase, so it wouldn’t be like-to-like for comparison.”

— Samir Seksaria, CFO, TCS | Q4 FY26

The two camps are not actually contradicting each other. They are describing different ends of the same portfolio: new AI work prices well because it’s scarce and unmeasured; old work that has been re-priced under AI savings clauses gives margin back. The companies whose CFOs say “accretive” are the ones whose mix is tilted, today, toward the new end. The ones who say “deflation” are sizing the headwind from the old end. FY27 will tell us which dominates as the new work scales and the old work gets re-papered.

There is, however, a related move that two of the larger players have begun making — and it is the most concrete signal yet that they are willing to defend pricing with the one lever services firms rarely pull: walking away from deals. HCL’s Vijayakumar disclosed in Q4 that the company had voluntarily declined to chase a meaningful share of available pipeline:

“We have lost some deals which are voluntary losses. We have walked away from some deals which will not make sense and that would have easily contributed at least $1 billion more to this number. It’s only prudent to be a little bit more careful about this...”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q4 FY26

A billion dollars of foregone TCV is a serious admission for an industry that has measured its quarterly press releases in TCV growth for two decades. Tech Mahindra has been making the same call, and saying so explicitly:

“We have stayed extremely disciplined in large deals. So we have stayed disciplined so that large deals don’t end up creating a problem for us in the future, or doing large deals that don’t make business sense. Clients don’t want us to do deals that don’t make sense either, right?”

— Mohit Joshi, MD & CEO, Tech Mahindra | Q4 FY26

Tech Mahindra’s CFO Rohit Anand confirmed the same posture, in CFO language:

“We’re extremely conscious on what margins and the risk profile we sign it up... [we’ve] been very selective not just on the two large deals that we’ve announced but even on the deals that we’ve been ramping up for the last 3-4 quarters. Our as-sold margins on each of these deals from a portfolio perspective are accretive.”

— Rohit Anand, CFO, Tech Mahindra | Q4 FY26

Notably absent from this chorus is Infosys, which spoke of “financial discipline” and a “margin protection programme” through FY26 but did not, on its Q4 call, name any deals it had walked away from. The question this raises is not whether HCL and Tech Mahindra are bluffing — both have given up real TCV to make the point — but whether either of them can keep doing it through FY27. Walking away from a billion dollars of deals is a luxury in a year where reported growth was already supported by macro tailwinds and currency. If FY27 starts with softer demand and the competitive set begins matching whatever pricing HCL refused, the discipline will be tested in a way it wasn’t this year. Investors should watch quarterly TCV disclosures with that filter on: is the deflation in deal sizes coming because AI is shrinking the work, or because HCL and Tech Mahindra are choosing not to take it? Through FY26, both stories have been true. They may not stay true together.

[3] The pricing reframe

If the labor-hours model is in retreat, what replaces it? The honest answer from FY26 is: no one knows yet, but everyone is auditioning a candidate. The sharpest reframe came from Tech Mahindra’s CEO Mohit Joshi — the most transparent any large-cap Indian IT services chief executive has been about the pricing logic of the AI era:

“The way of thinking about running an AP function for our client, for instance, in the age of AI, is thinking about the work overall in terms of the number of service tokens that you will deliver to a client. So a service token in the context of an AP could be a sub-process of AP that you need to deliver for a telco. And as the combination of human labour and digital labour changes over time, and as the pricing for digital labour changes over time, the result is very transparent to the client.”

— Mohit Joshi, MD & CEO, Tech Mahindra | Q4 FY26

The “token” framing is borrowed, deliberately, from how large language models are priced. A unit of work, abstracted from how it gets done. Whether the work is performed by a human in Pune, an agent on a GPU, or some blend of both, the client buys outcomes by the token. Notice what it strips away: the offshoring rate-card. There is no longer a “billing rate” in the traditional sense.

Mphasis has taken a different route to the same destination — selling the savings, not the hours:

“Clients are also asking us to not just show me on a PPT or tell me but actually show me in a live sandbox environment in many cases. So, think of this as ‘RFPs are turning into hackathons’, and that’s their yardstick of who can deliver on what they’re promising versus not. So, it has in a way become a lot more about the ability to showcase through execution.”

— Nitin Rakesh, CEO, Mphasis | Q2 FY26

That sentence is worth pausing on. RFPs — request for proposals — have been the industry’s procurement language for thirty years. A multi-hundred-page document goes out, vendors respond with a multi-hundred-page document back, the decision is made on the document. If RFPs are being replaced by live sandbox demonstrations, the selling motion itself has changed: showing the working AI agent in the room beats describing it. The salesforce that wins is the one with engineering in the field, not slideware in the back office.

Infosys, more cautiously, hinted that pricing is in transition without committing to where it lands:

“Over a longer period of time, on the back of AI, etc., we may expect some part of newer pricing models emerging. It could be outcome-based pricing model. It could be pod-based or studio-based pricing model, etc. So there are various new pricing models that are emerging as we speak. I do not think over the next year or so the entire model is going to change.”

— Jayesh Sanghrajka, CFO, Infosys | Q1 FY26

“Pod-based” and “studio-based” are worth unpacking briefly. A pod is a small dedicated team — sometimes ten people, sometimes three plus an agent stack — billed as a unit rather than per head. A studio is a longer-running engagement priced on capacity and outcomes. Both share a common property: the client never sees an hourly rate.

[4] From labour to platforms and IP

If the work is no longer priced by the hour, where is the leverage? Every CEO in the brief converged on roughly the same answer: stop being a pure services firm, start owning intellectual property and platforms that get embedded into client environments. HCL’s Vijayakumar said it most directly:

“We believe this industry will have to evolve from being a pure labor-based service provider to people plus IP and platform-based service provider. When you have the platform as a third-party platform, there is very little leverage, very little stickiness that we can build. And we can really deliver very good quality vertical IP solutions, which can be replicated across customers.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q2 FY26

The argument is structural. A consultancy that uses someone else’s platform — Microsoft’s, Salesforce’s, ServiceNow’s, OpenAI’s — is renting leverage. A consultancy that builds its own platform, even a narrow vertical one, captures the leverage. HCL’s AI Force is the lead exhibit; by the end of FY26, the company reported $155 million in quarterly Advanced AI revenue, up from a $100-million annual milestone just two quarters earlier.

Wipro, in the most explicit organizational signal of the year, set up a separate business unit around the same thesis:

“As intelligence becomes industrialized and widely accessible, we are making a deliberate strategic pivot to stay ahead. We have launched a dedicated AI-native business and platforms unit to expand beyond a services-only model to a services-as-a-software approach. This unit will operate with dedicated leadership, focused investments and a distinct operating model to accelerate enterprise-grade agentic AI solutions.”

— Srini Pallia, CEO & MD, Wipro | Q4 FY26

“Services-as-a-software” is the phrase to watch. It is the inverse of “software-as-a-service” — instead of subscription software that requires services around it, the service itself is delivered as software that runs continuously. The CEO described the resulting structure as a “dual engine”: traditional services on one side, AI-native platforms on the other.

Tech Mahindra is making the same move under a different label — rebranding entire service lines rather than spinning up a new unit:

“We are repurposing our application development and maintenance services to agentic development and modernization services and it’s not just a name change, right. It’s not just a name change because it’s about how are we driving value to the customers. Now, how are we bringing that experience in the agentic form to our customers for building application agentic development is something that we are very, very focused on...”

— Atul Soneja, COO, Tech Mahindra | Q4 FY26

TCS has stated the destination in the largest terms:

“With AI, TCS aspires to be the World’s largest AI-led Tech Services company. This aspiration is powered by capitalizing on AI-led renewals, vendor consolidation and cost optimization deals resulting in market share gains; using new-age services and adjacencies that enable enterprises to ‘Get ready for AI’; becoming a full-stack AI services player — Infrastructure to Intelligence — thereby delivering maximum ROI to clients on their AI investments; and building new revenue streams such as building AI infrastructure.”

— K. Krithivasan, CEO & MD, TCS | Q4 FY26

The most provocative version of the labour-to-IP thesis, though, came from Infosys’s co-founder and chairman Nandan Nilekani, in a line that pointed at something even further out — the threat to the SaaS industry the IT services companies have spent twenty years serving:

“As AI becomes a bigger part of the spend, the balance of advantage is moving towards ‘build’ rather than ‘buy’. If you see some of the concerns about what will happen to SaaS companies and all that, it is because of this, that building applications has become so simple that very often you may just build, or you may replace something that you have, which you bought, with something to be built.”

— Nandan Nilekani, Chairman, Infosys | Q3 FY26

If Nilekani is right, the next chapter is not just IT services repricing labour. It is enterprise software being eaten by the same wave — and the consultancies that ride it being the ones that own the new application stack, not the old one.

[5] Where the new money is

The closing fracture is the most underappreciated one in the brief. The growth pocket nobody had on their bingo card eighteen months ago has turned out to be the building, running, and feeding of AI itself — what HCL calls “Day-1 services”:

“The real acceleration in what we are seeing is not necessarily in deploying AI within enterprises, but really ‘Day-1’ services, which are foundational for enabling AI, like a lot of work in our engineering services. Like I mentioned about custom silicon for edge inferencing, it is a big area with a lot of companies across multiple industry verticals. This is not restricted to semiconductor industry.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q3 FY26

Edge inferencing is the act of running AI models on the device — a car, a sensor, a factory floor controller — rather than in a centralized data center. Custom silicon is the chip designed to do that efficiently. Both used to be niche semiconductor specialties. In HCL’s telling, they have become mainstream IT services work because every industrial company building AI capability now needs both. By Q4, HCL had a concrete deal to point to:

“A global technology major selected HCLTech for another AI Factory program worth over $100 million. The HCLTech solution will fast-track the client’s requirements of building and operating next-generation AI data centers to support cutting-edge AI workloads using the latest GPU technologies. A global semiconductor major selected HCLTech’s AI engineering services to support ASIC development across multiple advanced node chips, strengthening its position in Physical AI.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q4 FY26

TCS made the most striking infrastructure announcement of the year — a move into the data centre business itself:

“The promise we see in our HyperVault Business — which has made significant progress this quarter on its journey to build out 1 GW of capacity. This includes winning customer commitments, land parcel finalizations and partnering agreements.”

— K. Krithivasan, CEO & MD, TCS | Q4 FY26

One gigawatt of data centre capacity, for context, is a serious number. Indian data center capacity in early 2026 totals roughly 1.4 GW. TCS, a services company, has signalled it intends to build something approaching the size of the entire existing Indian colocation industry — and intends to sell that capacity to AI workloads.

The more interesting move underneath HyperVault, though, is what TCS is positioning around it. The company’s stated aspiration of being a “full-stack AI services player — Infrastructure to Intelligence” reads, at first, like investor-day boilerplate. Read against the HyperVault build-out, it describes a sequence no other Indian IT firm is set up to deliver: an AI lab buys compute from TCS, then turns to TCS again for GPU operations, then cloud management, then the model fine-tuning and red-teaming work that Wipro and Tech Mahindra are doing on a project basis. Each successive layer is more services-intensive and more margin-rich than the layer below it. Owning the data centre at the bottom of the stack gives TCS a contractual reason to be in the conversation at every layer above it. That is structurally accretive in a way that running someone else’s GPUs cannot be — and, for now, no other Indian IT firm has the balance sheet, the customer book, and the infrastructure muscle to attempt the full stack the way TCS is.

Wipro and Tech Mahindra are working a different end of the same picture — getting paid to run models for the model-makers themselves:

“In my first example, a leading global technology company has engaged Wipro to help run and improve its frontier AI models. Wipro will manage the end-to-end operation of these AI models from training, governance and evaluation to domain-specific validation. In fact, this engagement will be done through a specialized global delivery platform.”

— Srini Pallia, CEO & MD, Wipro | Q4 FY26

“When we look at our BPS services, for example, close to one-tenth of our current business in BPS is working with technology players, high-tech players creating their AI models, continuously fine-tuning them and managing them over a period of time. And more and more work we are doing on the BPS side is actually towards that now.”

— Atul Soneja, COO, Tech Mahindra | Q4 FY26

For a layer of context here: BPS — Business Process Services — used to be the lowest-margin, most automatable layer of the Indian IT stack. The fact that one-tenth of Tech Mahindra’s BPS book is now training and fine-tuning AI models for hyperscalers is a sentence that would have read as nonsense three years ago. The hyperscalers, ironically, have become the buyers that need the most armies of humans — to label data, evaluate outputs, and red-team models.

HCL has put the cleanest framework on what comes next — a three-bucket split of its own portfolio:

“We will see differential growth rates in all the three different categories: AI disrupted, AI amplified, and AI native or Advanced AI services. We really look forward to growing our AI-native services in the 25% to 30% range. And that will truly be the validation of how we are evolving as a company.”

— C. Vijayakumar, CEO & MD, HCL Technologies | Q4 FY26

Three buckets, three growth rates. AI disrupted shrinks. AI amplified grows in line with the business. AI native compounds at 25-30%. The whole question for FY27 is whether the third bucket gets big enough, fast enough, to outrun the drag from the first.

What it adds up to

The Indian IT services industry spent FY26 publicly admitting that its core business is changing shape — and putting numbers, language, and organisational decisions behind that admission. The vocabulary fractured into deflation and accretion, tokens and pods, disrupted and native — but the underlying movement was a single one. The companies that used to sell engineering hours by the thousand are now trying to sell platforms by the licence, savings by the contract, and infrastructure by the gigawatt. None of them have completed the pivot. All of them have started it. FY27 is the year the math becomes legible — when the new revenue mix is large enough to either validate the bet or expose the gap.

What to Watch

• HCL’s 2-3% portfolio deflation forecast: Vijayakumar has put a number on the headwind; track whether reported FY27 revenue mix bears it out, and whether AI-native services growth (targeted at 25-30%) is fast enough to offset it.

• TCS HyperVault execution: 1 GW is a number large enough to reshape the Indian data centre market. Watch for customer commitments converting to live capacity, partnership announcements with GPU vendors, and the first revenue disclosure.

• Tech Mahindra’s “service tokens” pricing: No client has yet been named signing a token-priced contract. The first concrete deal at a stated token rate will be the signal that the reframe is real.

• Infosys headcount additions in FY27: Salil Parekh hedged “we will continue to add” — but the gap between Infosys’s hiring posture and HCL/Mphasis’s de-linkage narrows with every quarter of productivity gain. Watch the net adds in Q1 and Q2.

• Whether any IP/platform business crosses 10% of group revenue: HCL’s Advanced AI sits around 4-5% on a $13-billion run-rate; Infosys put its AI Hexagon at 5.5% in Q3. The 10% line is when “we’re pivoting” becomes “we have pivoted.”

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes & narratives 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 59th 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 13 companies across 10 industries.

Hotel

• The Indian Hotels Company Limited

FMCG

• Tata Consumer Products

• Shree Renuka Sugars

Engineering & Capital Goods

• Dixon Technologies (India) Ltd

Healthcare

• Cipla Limited

Metals

• JSW Steel

Consumer Durables

• Voltas

Financial Services

• Muthoot Finance

Retail

• Titan Company

• PNGS Reva Diamond Jewellery Ltd

Building Materials

• Cera Sanitaryware

• Berger Paints

Defence

• Paras Defence & Space Technologies

Hotel

The Indian Hotels Company Limited | Large Cap | Hotels & Resorts

The Indian Hotels Company Limited is India’s largest hospitality firm, operating iconic brands like Taj, Vivanta, SeleQtions, and Ginger. The company is strategically transitioning toward an asset-light business model to drive scalable growth and sustainable profitability.

[Concall]

The company is heavily shifting toward managing hotels for others rather than owning the buildings themselves. This strategy allows them to grow quickly and maintain high profit margins without needing massive amounts of capital.

“Our capital-light strategy continues to be a defining competitive advantage with 68% of our operating portfolio and 93% of our pipeline under management or asset-light formats. This enables disciplined expansion with superior returns. Even as we invested meaningfully for future growth, we delivered an EBITDA margin of 35%, reflecting operating discipline and structural efficiency.”

— Puneet Chhatwal, Managing Director and CEO

Management plans to spend over 1,000 crores every year to upgrade their current hotels and invest in new technology. They are also buying smaller companies to enter new parts of the travel market and grow their income sources.

“Even going forward, we will continue to invest 1,000 to 1,200 crores annually to strengthen our existing competitive advantages and, at the same time, build new ones. Alongside this, we deployed over 500 crores across four strategic acquisitions, expanding our presence into high-growth adjacencies and strengthening future revenue streams.”

— Puneet Chhatwal, Managing Director and CEO

The low-cost Ginger brand and the homestay business, ama, are showing exceptionally high profit levels and rapid expansion. These brands are proving that the company can succeed in mid-scale and luxury homestay markets, not just luxury hotels.

“The flagship Ginger hotel at Mumbai Airport crossed the milestone of 100 crores in revenue for the first time, while delivering an industry-leading EBITDA margin of 56%. Qmin expanded its footprint to over 100 outlets, while ama crossed the milestone of 375 bungalows in its portfolio with 85 villas signed during the year.”

— Puneet Chhatwal, Managing Director and CEO

The company aims to have 250 Ginger hotels in its network within the next year to dominate the mid-scale market. They also expect to charge higher prices at their flagship hotels now that major renovations are finished.

“As I have mentioned on a few occasions, we expect the Ginger brand itself to have a total portfolio of 250 hotels, either under development or in operation, by the end of FY27. Fourth, renovated inventory across key assets is expected to create further upside through improved pricing power and guest experience.”

— Puneet Chhatwal, Managing Director and CEO

FMCG

Tata Consumer Products | Large Cap | FMCG

Tata Consumer Products is a prominent global player in the food and beverage industry, managing an extensive portfolio of tea, coffee, salt, and water products. The company combines long-standing heritage brands with a growing presence in high-growth, health-oriented categories across India and international markets.

[Concall]

Management is highlighting the strong momentum in their newer, high-growth food brands which are now becoming significant revenue contributors. This shift reduces the company’s dependence on the slower-growing traditional tea business and improves the overall growth profile.

“Growth businesses crossed the 4,000 crore mark, growing 24% in this year. For the quarter, growth has come back to where it should be with 33%. Sampann grew 69% in Q4 and 46% for the full year.”

— Sunil D’Souza, Managing Director and CEO

Management believes their brand strength allows them to raise prices if raw material costs rise. This pricing power provides a safety net for protecting profit margins even in an inflationary environment.

“Regarding our portfolio, I think we have a fairly balanced mix of slightly stronger commodities and a piece of highly processed food. So far, we have not seen a big impact on the margins per se. We have enough in our equity across all the categories to take price increases to mitigate margin impacts.”

— Sunil D’Souza, Managing Director and CEO

The company is dominating the tea category on modern digital platforms compared to its traditional competitors. Success in these high-growth channels suggests the brand is successfully capturing younger, tech-savvy consumers.

“For quick-comm and e-comm, Nielsen does have a panel and gives us data. We are market leaders in tea on quick-comm and e-comm. I would urge you to go through different annual reports and analyst calls to pick up numbers and do comparisons on tea.”

— Sunil D’Souza, Managing Director and CEO

Stable raw material costs for tea are allowing the company to keep prices competitive without hurting profits. This stability makes earnings more predictable for the near term.

“I’ve stopped trying to forecast commodities too far ahead, but for this year, tea prices have trended well. They are roughly in the same ballpark as this period last year, so it is largely benign. That’s why we gave off pricing to remain competitive.”

— Sunil D’Souza, Managing Director and CEO

Using digital platforms as a testing ground allows the company to fail fast and cheap before committing to a nationwide physical rollout. This agile strategy reduces the risk of expensive product flops in traditional retail stores.

“E-comm and quick-comm allow us to test-market in a city at low risk and cost before rolling out to modern trade and GT. As long as the playbook is clear, I don’t see an issue. There are still many white spaces in food and beverage, especially in nutrition, health, and premium categories.”

— Sunil D’Souza, Managing Director and CEO

The company is hitting the limits of its current manufacturing capabilities due to high demand. Investing in new capacity shows management’s confidence in sustained future volume growth.

“Our Vietnam plant is running at 99% utilization, and we’ve started a project to expand capacity there which should be online in early 2027. The board has also approved capacity expansion for tea extracts, as we are running out of capacity there.”

— Sunil D’Souza, Managing Director and CEO

Shree Renuka Sugars | Mid Cap | Sugar | Lower Output, Falling Stocks & Export Curbs in Focus

Shree Renuka Sugars is one of India’s leading integrated sugar and ethanol companies with operations spanning sugar production, refining, and renewable energy. A sharp drop in output estimates, declining stock levels, and fading hopes of export policy relief are now raising bigger questions around supply and the industry’s pricing outlook.

[Reference]

National sugar production estimates have been significantly lowered due to poor crop yields and inflationary pressures. Investors should monitor how this supply shortfall impacts domestic procurement costs and overall revenue targets.

“In fact the production has actually plummeted down to less than 28 million tons and it could actually be something like 27.75 million tons and with food inflation moving northwards this was very much on the cards. My take is it’s on the right track.”

— Atul Chaturvedi, Executive Chairman.

Indian sugar inventory levels are projected to drop sharply as exports drain the remaining surplus. Lower closing stocks generally lead to firmer domestic prices, which can improve the profitability of the company’s milling business.

“But having said this I think as far as export is concerned a back of the envelope calculation tells us that anything between 8 to 9 lakh tons may actually have gone or may be in the process of going out. So that would mean that the closing stock which was estimated at around 4.5 million tons earlier may actually come down to less than 3.5 million tons.”

— Atul Chaturvedi, Executive Chairman

The government is unlikely to lift sugar export bans soon because broader food inflation remains a sensitive political issue. Investors should expect the company to focus primarily on domestic sales and ethanol for the near term.

“Honestly speaking I don’t think there will be any rethink because sugar is not the only food component which seems to be moving northward in terms of inflationary impact. I don’t think the government’s going to rethink on this at this point of time or in the next foreseeable future.”

— Atul Chaturvedi, Executive Chairman

Engineering & Capital Goods

Dixon Technologies (India) Ltd. | Large Cap | Consumer Electronics (EMS)

Dixon Technologies is a leading Indian electronics manufacturing services company providing design-led solutions for consumer durables, home appliances, and mobile phones. The firm operates as a major contract manufacturer for global and domestic brands, scaling aggressively into backward integration for electronic components.

[Concall]

Dixon reported strong annual growth with revenues nearing 50,000 crores and a 20% increase in net profit. This performance shows the company’s ability to scale its business significantly while maintaining steady bottom-line growth.

“Revenues for the year ended March 31, 2026, were 48,893 crores against 38,880 crores in the same period last year, which is a growth of 26%. EBITDA, excluding exceptional gains for the year, was 1,887 crores against 1,528 crores in the same period, representating growth of 23%. PAT, after minority interest, excluding exceptional gains for the year, was 845 crores against 706 crores in the same period last year, which is a growth of 20%.”

— Atul Lall, Vice Chairman and Managing Director

The company is more than doubling its camera module production capacity to support its main smartphone customers. This move into more complex component manufacturing will likely lead to higher value capture per device produced.

“We will be expanding the capacities of camera modules in our subsidiary, Qutek, which is an MSIPS beneficiary for smartphones, from 70 million annually to around 180-190 million annually over the next 15-18 months, largely catering to our anchor customer smartphone volumes. This is in addition to deepening the level of manufacturing and capturing more value-added depth.”

— Atul Lall, Vice Chairman and Managing Director

Dixon expects its IT hardware segment to triple in revenue this year due to a massive increase in orders. Successfully stabilizing production in Chennai positions the company to dominate the local manufacturing of laptops and desktops.

“The segment delivered a healthy performance for the quarter under review and we expect 3x growth in revenues in the current fiscal against last year, with a huge uptick in order books from all customers. Our dedicated IT hardware products manufacturing unit in Chennai has successfully stabilized mass production of laptops and all-in-ones and has secured orders for desktops from one of our customers.”

— Atul Lall, Vice Chairman and Managing Director

The company is planning to enter the server and data center hardware market to diversify its IT portfolio. This expansion into high-value enterprise equipment is incentivized by favorable government policies and tax breaks.

“We are also in discussion with our JV partner to participate in the fast-growing server opportunity and to move from end-client IT hardware into data center and enterprise infrastructure hardware. This is supported by strong government policy tailwinds on server manufacturing and backward integration, including a clear push on localization and a tax holiday framework.”

— Atul Lall, Vice Chairman and Managing Director

Management has secured new lighting export contracts with major retail chains in the US and Europe. These global wins demonstrate that Dixon’s manufacturing scale is becoming competitive on an international level beyond the Indian market.

“We have received two export orders from one of the largest US chains and a European retail chain for strip lights, which will start getting executed in Q2, and we are also in discussion for other product categories. Further building on our share in the B2B space for bulbs, battens, and downlighters, we are significantly increasing our volumes on other niche products.”

— Atul Lall, Vice Chairman and Managing Director

Dixon is working with consultants to enter high-margin sectors like aerospace and defense through potential acquisitions. Moving into these specialized fields could significantly improve the company’s overall profit margins compared to standard consumer electronics.

“We have partnered with a leading global management consulting firm to design a comprehensive multi-year strategic roadmap to build a scaled, specialty, high-margin EMS business, including M&A opportunities focused on the aerospace, defense, automotive, medical, and industrial verticals. This initiative is focused on identifying the most attractive high-growth and high-value products in these segments.”

— Atul Lall, Vice Chairman and Managing Director

Management estimates that a successful deal with Vivo could add over 20 million mobile units to their annual production. This potential volume represents a massive growth trigger for the mobile division once government approvals are finalized.

“It depends on the timelines. On an annualized basis, it would be 67% of what Vivo sells. Last year, Vivo sold almost 35 million units, so another 20-22 million units can be added on an annualized basis.”

— Atul Lall, Vice Chairman and Managing Director

The company is projecting at least 15-17% organic revenue growth for next year, even without including potential gains from the Vivo partnership. This guidance suggests strong demand across their existing client base despite a flat overall smartphone market.

“Bharat, I usually do not give guidance, but without the Vivo numbers, we are targeting almost 56,000 crores next year, with mobile volume being flat. If Vivo comes in, it is a major trigger. Without Vivo, we feel the company will keep growing at 15-17%.”

— Atul Lall, Vice Chairman and Managing Director

The new display business is expected to generate up to 6,000 crores in revenue with much higher margins than the core assembly business. This segment is key to shifting Dixon from a pure assembler to a high-value component manufacturer.

“In phase one, we are setting up a capacity for 24 million mobile displays and 2.4 million automotive and IT product displays. The first line being installed is for IT and automotive displays, with trials in Q3 and commercial production in Q4. Once we achieve 80-90% utilization, we target revenue of almost 5,500 crores to 6,000 crores with mid-teen double-digit margins.”

— Atul Lall, Vice Chairman and Managing Director

Healthcare

Cipla Limited | Large Cap | Pharmaceuticals

Cipla is a prominent global pharmaceutical company with a leading presence in the Indian, North American, and South African markets. The firm specializes in complex generic medications, particularly in respiratory and chronic therapies, while aggressively expanding into biosimilars and AI-led operational transformation.

[Concall]

Management is highlighting that the Indian business has reached a major scale milestone while the US business has hit a technological turning point. This performance validates the company’s dual focus on home-market dominance and advanced manufacturing in the West.

“In India, we crossed the significant threshold, with the business surpassing 12,500 crores in revenues, underscoring the strength and resilience of our domestic franchise, which is our largest franchise. In North America, the successful generic Ventolin approval from our US facility marked an important strategic inflection point and reinforced our R&D capabilities.”

— Achin Gupta, MD and Global CEO

The approval of generic Ventolin marks Cipla’s first commercial inhaler product made directly in the United States. This de-risks their supply chain by proving they can handle complex manufacturing outside of their primary Indian sites.

“Notably, we received regulatory approval for the first AB-rated generic Ventolin with CGT, representing the first commercial MDI product to be manufactured from our US facility. This milestone reinforces our growing confidence and capability to deliver complex generics, not just from India, but also from our US manufacturing facility.”

— Achin Gupta, MD and Global CEO

Cipla is positioning itself to capture a significant share of the massive biologics market as patents expire over the next ten years. Management views recent regulatory shifts as a tailwind that makes this complex space more accessible for generic players.

“We see biosimilars as a very large and underpenetrated opportunity, and with the recent change in some of the guidelines, we believe this to be an upcoming almost 200 billion dollar opportunity, with around 100 such biologics expected to lose exclusivity over the next decade.”

— Achin Gupta, MD and Global CEO

The company’s primary use of cash will be for high-tech product development rather than physical infrastructure. Investors can expect the current high-investment phase for facilities to taper off as the company reaches sufficient manufacturing scale.

“Our number one deployment is R&D to accelerate the pipeline in respiratory, peptides, and differentiated products. We will step up on biosimilars, aiming for six to eight internal assets supplemented by inorganic opportunities. Capex has increased over the last 3 years, but that cycle should reduce after another year as we have built enough capacity.”

— Achin Gupta, MD and Global CEO

Metals

JSW Steel | Large Cap | Metals

JSW Steel, a leading steel company in India, has a strategic collaboration with JFE Steel of Japan to produce high-value special steel products for various industries. Known for excellence in business and sustainability practices.

[Concall]

JSW Steel asserts that India’s 11.5% safeguard duty is balanced and lower than global protection levels (25-50%), thus mitigating the risk of withdrawal despite domestic price advantages.

“India is one of the more balanced countries with respect to protection as you see it worldwide today. We are seeing protection between 25% to 50% in various parts of the world. Every country is trying to safeguard their shores from trade flows which can be adverse for that country and that is becoming very critical to the supply chain resilience of the country. In India, with an 11.5% safeguard duty, I think we are far lower than what the rest of the world is.”

— Jayant Acharya, Joint MD and CEO

JSW Steel anticipates a total capex of approximately 226,000 crores (126,000 crores existing plan + 100,000 crores incremental) between now and FY33 to reach its 62 million ton capacity target, including JV equity and other investments.

“Currently, as we have given you the capacity expansion plans, our capex plans are at 126,000 crores as of now. Incrementally, to be at a 62 million ton capacity plus investment for equity for the joint venture and our mining, other investments, and downstream facilities, our sense is that we would require another 100,000 crores between now and FY33.”

— Swayam Saurabh, CFO

JSW Steel’s limited gas-linked production minimizes the risk of volume disruption from gas shortages, though it may impact production costs.

“Our exposure to the gas-linked production is very limited in the overall production. However, it does have an impact on the cost of production. We have ensured and we continue to ensure that there won’t be any production disruption by virtue of non-availability of gas unless it becomes too severe in coming months. Our portion of the gas-linked steel production is very small.”

— Jayant Acharya, Joint MD and CEO

India’s nation-building phase is expected to drive steel demand growth beyond GDP, increasing its global consumption share from 9% to 16% within a decade.

“India is going through a nation-building phase with steel being a key building block for growth. This creates a long runway for steel demand to outpace the real GDP growth in the country. India as the second steel producer and consumer will continue to increase its share of global steel consumption from about 9% currently to 16% in a decade.”

— Jayant Acharya, Joint MD and CEO

JSW Steel is targeting a total capacity of 78 million tons in India by FY32, comprising 62 million tons from existing sites and an additional 16 million tons from its JFE and POSCO joint ventures.

“We are now announcing a target of 62 million tons by FY32, which can be achieved through our existing sites. In addition to this, the joint ventures of JFE and POSCO will have a cumulative capacity of 16 million tons by FY32, taking the total capacity in India along with joint ventures to 78 million tons.”

— Jayant Acharya, Joint MD and CEO

Consumer Durables

Voltas | Mid Cap | Consumer Durables

Voltas Limited, India’s largest air conditioning company and a global engineering solutions provider, offers services in air conditioning, refrigeration, electro-mechanical projects, and engineering products for various industries. It operates as an EPC contractor in domestic and international markets including the Middle East and Singapore, serving sectors such as mining, water management, construction equipment, and textile industry.

[Concall]

The AC industry experienced a 10-12% de-growth in FY26, but Voltas anticipates a 15-20% market growth in the next year due to the weak base.

“The industry had a difficult year last year with a de-growth of roughly 10-12%. Total primary sales for the industry were 14.3 million units. We expect the market to grow 15-20% next year because of the weak base.”

— K V Sridhar, Chief Financial Officer

Following a weak previous year, Voltas observed strong positive traction in April and May, driven by a severe heatwave across India, leading to rapid secondary sales movement.

“Compared to the weak summer and unseasonal rains last year, we have seen very positive traction in April, which has continued into May. There is a serious heatwave in many parts of the country. Positive growth is occurring and secondaries are moving fast.”

— K V Sridhar, Chief Financial Officer

Voltas experienced record high sales in March, with April and May also performing strongly, indicating a positive outlook for the current quarter.

“March was a superb month and our record high in our history. April was also extremely buoyant and very close to that number. May is also looking good. ... We feel this will be a very good quarter.”

— K V Sridhar, Chief Financial Officer

For 40-50% of its domestic and some international projects order books, Voltas has price variation clauses that allow commodity, material, and labor cost increases to be passed through, thus protecting margins.

“Regarding margins, 40-50% of our domestic and some international order books have proper price variation clauses. Variations in commodities, materials, and labor are pass-through. We do not see an impact on margins there.”

— K V Sridhar, Chief Financial Officer

Commercial Air Conditioning (CAC), a B2B segment with significant growth potential (12-15% industry growth), is a key focus for Voltas’s capex and is anticipated to be a major growth engine alongside RAC and CR.

“Commercial air conditioning (CAC) is a B2B business driven by offices, restaurants, and the manufacturing sector... We are under-leveraged here, and it represents a huge headroom for growth. Much of our capex is going into CAC, as it is likely to be our next growth engine alongside RAC and CR.”

— K V Sridhar, Chief Financial Officer

Voltas implemented a 7-8% price hike for new products, followed by another increase for pre-war commodity prices, and anticipates passing through double-digit inflation as current stocks deplete.

“The blended increase of 7-8% mentioned earlier was purely on account of new table products. We took another rate increase for commodity prices that rose pre-war. ... We are talking about double-digit inflation. It will be passed through as costs hit us.”

— K V Sridhar, Chief Financial Officer

Despite intense competition from 60 brands, Voltas differentiates itself through the Tata trust, extensive distribution, and a refreshed marketing campaign.

“We know current competition is severe; almost 60 brands operate in this space. But what we bring to the table is the Tata trust, plus the fact that our distribution reach is phenomenal. You would have also noticed that we have refreshed our entire marketing campaign this time.”

— Mukundan Menon, Managing Director

Elevated inventory levels in Q4 FY26 were a strategic move for summer preparedness, new launches, and supply chain resilience, with normalization expected as demand increases.

“Inventory levels during the quarter remained moderately elevated, primarily driven by proactive readiness for the peak summer season, strategic stocking for new product launches, and precautionary planning in response to supply chain volatility and geopolitical disruptions. However, the inventory build-up was calibrated and aligned with anticipated demand trends, with gradual normalization expected as seasonal demand momentum strengthens.”

— K V Sridhar, Chief Financial Officer

Geopolitical tensions in the Middle East caused operational disruptions for Voltas’s international projects, but the company mitigated risks through crisis management and safety protocols.

“In the international projects business, geopolitical tensions and the Middle East conflict created operational disruptions across travel, logistics, site execution, and commercial settlements. Despite these challenges, Voltas responded with agility and discipline by activating dedicated crisis response teams, implementing employee safety protocols, strengthening travel controls and evacuation readiness, and establishing a rigorous daily monitoring framework...”

— K V Sridhar, Chief Financial Officer

Financial Services

Muthoot Finance | Large Cap | Financial Services

Muthoot Finance specializes in providing quick, affordable, and secure gold-backed financing with flexible repayment options and attractive interest rates. Alongside gold loans, the company offers personal and business loans, expanding its presence across the country.

[Concall]

Muthoot Finance recorded its highest-ever consolidated gold loan AUM, growing 54% year-over-year, indicating strong business expansion.

“We have achieved the highest-ever consolidated gold loan AUM for Muthoot Finance and its subsidiaries at 1,65,000 crores. This is historic growth, representing an increase of 57,000 crores or 54% over the last year. The consolidated AUM stands at 1,65,000 crores.”

— George Alexander Muthoot, Managing Director

RBI’s suggested reduction in gold imports will not impact Muthoot Finance, as the company finances household ornaments, not gold purchases, and a large existing public gold stock ensures continued business prospects.

“Because we do not finance gold purchases, bullion, or bars, this does not affect Muthoot. We only finance household ornaments. There are reportedly about 25,000 to 30,000 tons of gold held by the Indian public. We believe there are good prospects for this business going forward, regardless of restrictions on new gold imports.”

— George Alexander Muthoot, Managing Director

The decline in overall customer count is due to attrition in ultra-small loan segments, which is offset by growth in medium and high-value customer segments, maintaining total loan volume.

“As explained earlier, we lost about 5 lakh customers in the 0 to 10,000 bucket and another 8 lakh in the 10,000 to 30,000 bucket. However, since the total volume is maintained, it means we grew in the 50,000 to 2 lakh segments. Ultra-small loan customers may leave, but that doesn’t significantly impact us...Medium and high-value customers are continuing to grow with Muthoot.”

— George Alexander Muthoot, Managing Director

Muthoot Finance has the flexibility to adjust rates to attract more customers but does not currently see an urgent need, as it maintains diverse loan schemes and a comfortable ROA.

“We have the flexibility to reduce rates; we typically guide for a medium-term ROA of around 3.5%. We already offer various schemes with yields ranging from as low as 12% up to 23%. If we feel the need to step up the lower-yield portfolio to acquire customers, we will, but as of today, we don’t see a pressing need.”

— George Alexander Muthoot, Managing Director

Muthoot Finance increased its interest rates by 0.5% to 1% across specific loan types, directly contributing to the rise in yields this quarter.

“Last quarter, we increased our rates by about 0.5% to 1% across certain loan types, which is why the yield has gone up.”

— George Alexander Muthoot, Managing Director

Despite new competitors with deeper pockets, Muthoot Finance views its specialized focus and experience in the operationally intensive gold loan business as a key differentiator.

“Competition is present and new players are entering...we are a specialized gold loan company. The new players, despite deep pockets or lower costs of funds, are not focused exclusively on gold loans. This is an operationally intensive and challenging business, which new players often realize only after some time.”

— George Alexander Muthoot, Managing Director

Tonnage decline for Muthoot Finance is attributed to existing customers pledging less gold for the same loan amount due to higher gold prices, and the company is shifting its customer base towards higher ticket sizes despite a drop in small-ticket customer count.

“In Muthoot Finance, we are an established player with legacy accounts. The tonnage change is proportional to the churn of existing loans, which happens roughly every 4 months. When a loan is churned at a higher LTV because gold prices rose, the customer needs to pledge less gold for the same loan amount...For a large company like Muthoot Finance, it is harder to grow the customer count rapidly. We have lost about 15 lakh customers in the 0 to 30,000 ticket size range, but we added customers in the 50,000, 1 lakh, and 2 lakh ticket size segments.”

— George Alexander Muthoot, Managing Director

Despite regulatory NPA classification, the loans are fully recoverable due to a low loan-to-value (LTV) of 58% on the collateralized gold, indicating strong underlying asset quality.

“The LTV on this NPA bucket, including accrued interest, is only about 58%. This means the loans are 100% recoverable. It is an NPA from a regulatory standpoint, but the underlying collateral value far exceeds the principal and interest.”

— George Alexander Muthoot, Managing Director

Muthoot Finance has adapted to the new RBI LTV framework by updating software and rolling out new products, leveraging the increased flexibility for product tailoring while already adhering to regulations for a decade.

“We have maintained LTV at regulated rates for over a decade. The new options for 80% or 85% LTV give us more room to tailor products. We have updated our software and rolled out new products in line with these regulations.”

— George Alexander Muthoot, Managing Director

Retail

Titan Company | Large Cap | Retail

Titan Company, India’s leading lifestyle company, offers watches, jewelry, eyewear, wearables, Indian dress wear, fragrances, and fashion accessories. With a focus on superior customer experience, Titan has established leading positions in the jewelry, watches, and eyewear categories, driven by trusted brands.

[Concall]

Titan achieved its best-ever Q4 top-line growth with strong performance across all businesses and brands.

“We have ended the year with a superlative Quarter 4 top-line growth, perhaps our best-ever in the recent past. All our businesses have grown very well, and all our brands have enhanced their visibility and equity in the quarter and the full year that went by.”

— Ajoy Chawla, Managing Director

Titan has sufficient gold inventory and alternative plans to mitigate short-term gold supply concerns for its jewelry brands.

“So, we are at least not concerned in the short term as far as gold supply is concerned. For Titan, Tanishq and Caratlane perspective.”

— Ashok Sonthalia, Chief Financial Officer

The company does not anticipate an increase in gold loan costs in the short term due to extended loan tenures.

“So, we don’t see any increase in cost in gold loans, at least in the short term.”

— Ashok Sonthalia, Chief Financial Officer

Titan has formalized transfer pricing arrangements from FY26, treating international subsidiaries as low-risk distributors, resulting in a transfer pricing adjustment of approximately ₹80 crores in standalone books.

“Although we had a transfer pricing arrangement from the start of international business, we formalized that from ‘25-26, where we are now treating all our subsidiaries as low-risk distributors. And that Titan as a parent company is in a way ensuring that a certain amount of basic profit is there and that transfer pricing adjustment in the standalone books is about ₹80 crores plus minus”

— Ashok Sonthalia, Chief Financial Officer

Jewellery division saw an 8% resurgence in buyer growth in Q4, driven by customers buying due to rising gold rates and advancement of wedding purchases.

“So, very clearly, we have seen resurgence in buyer growth in Quarter 4 and what we have reported is 8% versus a flattish for the period prior to that. Now, two clear types of buyers, those who are waiting on the sidelines to buy and pretty much we have seen gold rates go up from festive onwards... And there are many customers who were waiting on the sidelines who came in to buy in Quarter 4.”

— Arun Narayan, CEO, Jewellery Division

The company believes its sustained investment in the gold exchange program will continue to drive buyer growth, particularly for wedding purchases and collection updates.

“We think so. We believe so. That’s why we are sustaining the investment behind exchange. It’s very relevant for wedding buyers. It’s also relevant for others who are looking at updating their collection of jewellery.”

— Arun Narayan, CEO, Jewellery Division

Jewellery margins face pressure from rising gold prices, despite efforts in product mix engineering and lightweight jewelry, making it challenging to assure margin sustainability if gold prices continue to increase.

“But if gold continues to go up, we may have to keep making effort... But beyond a point, there will be impact on margin, and that is visible.”

— Ashok Sonthalia, Chief Financial Officer

Consumers are increasingly accepting current high gold prices, with recent small cool-offs bringing buyers back due to an expectation of long-term upward trajectory.

“Yes. Actually, all of the above. Because I think people have started accepting gold at this level... Because there seems to be an acceptance that in the medium to long term, it’s again going to go back to its trajectory of upward movement.”

— Arun Narayan, CEO, Jewellery Division

The 15-20% growth target for the jewellery division is supported by fundamental tailwinds like industry formalization, the rise of organized players with stronger balance sheets, brand trust, and India’s overall economic growth story.

“See, the fundamentals of jewellery category and the industry formalizing and therefore organized players growing more rapidly... I think that formalization of the industry continues to be a very strong underlying factor for growth, interest in the category because of its preciousness, and thirdly, the India growth story. Therefore, the 15 % to 20 % is something that we ought to do”

— Ajoy Chawla, Managing Director

The high investment-led orientation, particularly towards gold coins, along with plain gold and diamond sales, significantly influences and impacts the company’s overall margins.

“Coins play the role these days because investment-led orientation is high and that and plain gold and diamond these are the three broad categories which interplays and impact the margin.”

— Ashok Sonthalia, Chief Financial Officer

The company views competition as “business as usual” and is confident in its playbook to deliver sustained results, indicating no significant concern about increasing competitive intensity.

“I think competition now has become business as usual. Nothing and I think we have shown that we have got a playbook to kind of, to deliver sustainable, sustained results. So, it is not something that we are so concerned about.”

— Arun Narayan, CEO, Jewellery Division

TEAL business is poised for strong growth driven by India’s manufacturing boom, government incentives, investments in sectors like aerospace and defense, and the global “China Plus One” strategy.

“I think the TEAL business has some good growth tailwinds or opportunities sitting in front. A lot of India manufacturing coming in, a lot of investments, aerospace sector, defense, infrastructure, electronic chips. So, manufacturing itself, because of partly government-led incentives, as well as the fact that internationally, many clients are choosing to have a China Plus One strategy.”

— Ajoy Chawla, Managing Director

PNGS Reva Diamond Jewellery Ltd. | Small Cap | Diamonds & Jewellery

PNGS Reva Diamond Jewellery Ltd. is a specialized retailer of branded natural diamond jewelry operating through an asset-light retail model. The company leverages a mix of exclusive brand outlets and shop-in-shop formats to serve customers across various price points in the premium segment.

[Concall]

The company has designed its inventory to attract new buyers with low-cost items while maintaining high-value collections for special events. This tiered pricing strategy is intended to keep customers coming back more often and spending more over time.

“Our product basket spans from entry-level offerings of 15,000 to 35,000 aimed at customer acquisition, to everyday wear between 35,000 to 1.5 lakh which drives repeat purchases. This structured portfolio enables us to cater to diverse customers and their needs for various occasions while also creating a strong lifestyle play within a single brand, driving higher wallet share and repeat engagement.”

— Amit Moda, Whole-time Director and CEO

Management is using aggressive buyback and exchange terms to convince customers that diamonds are a safe investment rather than just a luxury expense. High exchange values encourage existing customers to trade up to more expensive items in the future.

“A key differentiator for us is our robust buyback and exchange policy, where we offer up to 90% of the diamond price in case of buyback and 100% of the diamond value in case of an exchange sale. This enhances customer trust, provides liquidity and flexibility, and positions diamond jewellery not only as a discretionary purchase but also as a store of value, thereby encouraging repeat purchases.”

— Amit Moda, Whole-time Director and CEO

The company uses a low-cost expansion strategy by renting spaces and partnering with its parent group rather than buying real estate. This approach allows the business to grow faster and generate better returns on the money it invests.

“Our two-format approach comprising shop-in-shop with our parent company, P. N. Gadgil & Sons and their ecosystem, and exclusive brand outlets (EBOs), enables us to effectively balance capital efficiency with brand building while maintaining strong operational control. This is an asset-light, low capex vanilla model across both formats. These models support a higher return on capital employed.”

— Amit Moda, Whole-time Director and CEO

The company saw massive 40% growth in sales from its existing locations during the fiscal year. This suggests strong demand and brand acceptance within their current store network.

“In the last year we have seen SSG of around 40% in these existing SIS units. Looking at the SIS count, in FY25 there were 30 SIS, and in FY26 there are 34 SIS. For those 30 SIS that were there at the start of the year, the top line was around 313 crore in FY26.”

— Amit Moda, Whole-time Director and CEO

The company believes lab-grown diamonds are not a serious threat because they lack the resale value that Indian consumers prize. By focusing exclusively on natural diamonds, they aim to preserve the brand’s image as a provider of long-term wealth.

“Recently, a very good national level brand introduced lab-grown diamond outlets where they explain to customers that there is no resale value to lab-grown diamonds, only to the gold content. It is very clear in the market that there is no resale or buyback value for lab-grown diamonds. Because our buyback policy relies on the rarity and increasing value of natural diamonds over time, I do not see it as a threat.”

— Amit Moda, Whole-time Director and CEO

The company is currently keeping its prices low to gain market share and build its reputation. As the brand becomes more famous, they plan to raise prices to match the much higher margins typical of luxury jewelry competitors.

“Gross margins may improve in the future because right now we are not charging for brand value in diamond pricing. It is priced like a family jeweler would, with 30-35% gross margin loading. Over time, we will start loading brand value once our brand settles in the market, as this industry has gross margins between 30% to 35% or even as high as 40-42%.”

— Amit Moda, Whole-time Director and CEO

The company is shifting toward opening its own independent stores because they are significantly cheaper to build than the large showrooms used by their parent company. This strategy allows the firm to expand its footprint using less capital while maintaining better control over growth.

“We moved to EBOs specifically to avoid being limited by their passive expansion, as they require 90 to 120 crore to set up one store, which is very high capex. When we set up an EBO, it requires around 20 to 25 crore per store. That expansion delivers better numbers at lower capex.”

— Amit Moda, Whole-time Director and CEO

A significant budget has been set aside for marketing to ensure new stores gain traction quickly. Management is committed to consistent brand spending to support their expansion into Northern India.

“We plan to spend around 2 crore for every EBO, whether in or out of Maharashtra, spent over 12 to 18 months. It will not be a bulk spend but targeted region-wise. We will be spending around 3% to 4% of the top line each year on branding.”

— Amit Moda, Whole-time Director and CEO

Building Materials

Cera Sanitaryware | Small Cap | Building Materials

Cera Sanitaryware Limited, founded in 1980, is a leading provider of premium bathroom solutions known for innovative products like water-saving twin-flush WCs. The company manufactures and sells building products in Gujarat, along with utilizing wind and solar power. Offering a wide range of products including showers, steam cubicles, whirlpools, sanitaryware, and faucets, CERA appeals to customers seeking stylish and modern lifestyle products.

[Concall]

Management highlighted that the retail segment, which had remained sluggish since FY24, is now showing sustained improvement. This recovery is expected to continue through FY27.

“Since Q3 of the current financial year, we have started seeing an improvement in the retail demand, and we saw this sustaining through Q4 also. If we see the month of April also, we have seen a good surge in retail… We are hopeful that going forward, the kind of demand recovery that we have seen in the retail segment should continue in the full year of FY27.”

— Deepak Chaudhary, VP Finance & Investor Relations

Despite input inflation and sector challenges, management is guiding for a strong recovery-driven growth year across categories.

“With the demand trend continuing to grow upward, we expect the overall growth of around 18% to 20% next year… In sanitaryware, we expect 12% growth… and in faucetware, we expect growth of 18%.”

— Vikas Kothari, CFO

The company has aggressively raised prices to offset unprecedented brass cost inflation.

“Over a period of two months, we have taken a price increase of 12% in the case of sanitaryware and 16% in the case of faucetware… Brass prices have increased nearly 29%–30% year-on-year.”

— Deepak Chaudhary, VP Finance & Investor Relations

Elevated brass prices and trade discounts continue to weigh on profitability despite price hikes.

“EBITDA margins stood at 15.2% in Q4 FY26 as compared to 18.3% in Q4 FY25. This decline was primarily driven by continued pressure on gross margins led by elevated brass input costs and higher trade discounts.”

— Vikas Kothari, CFO

Gas supply disruptions in Morbi are affecting unorganized manufacturers, potentially benefiting Cera.

“Players who are not having their own manufacturing facility and are sourcing mostly from Morbi will find it a little tough… So, we anticipate that the current situation would be playing well for us going forward in Q1 and Q2.”

— Deepak Chaudhary, VP Finance & Investor Relations

The company remains relatively protected from industry-wide gas disruptions due to favorable sourcing arrangements.

“Cera has remained relatively insulated from these disruptions. This is supported by our continued gas sourcing arrangement, including supplies from GAIL at relatively subsidized rates.”

— Deepak Chaudhary, VP Finance & Investor Relations

Strong faucetware demand has pushed utilization beyond rated capacity, necessitating incremental expansion.

“Capacity utilization during the quarter stood at 106% for faucetware… We are undertaking capacity expansion to increase the production capacity to 5 lakh pieces per month.”

— Management

Adequate inventory levels enabled uninterrupted servicing despite supply-side challenges.

“Adequate inventory levels played a critical role in ensuring uninterrupted market supplies and meeting customer demand during this period.”

— Vikas Kothari, CFO

Cera is reducing outsourcing dependency amid supply disruptions.

“We have also undertaken a drive for internalizing the kind of products which were currently outsourcing from Morbi.”

— Deepak Chaudhary, VP Finance & Investor Relations

Premiumization continues to strengthen within the portfolio mix.

“From a product mix perspective, 41% of sales were from premium segment, 38% from mid-segment, and 21% from entry-level products.”

— Vikas Kothari, CFO

After years of increasing contribution, project mix is expected to stabilize as retail recovers.

“Going forward, we expect that the proportion of retail and project should now remain stable at 60% for retail and 40% for the project business.”

— Deepak Chaudhary, VP Finance & Investor Relations

Unlike sanitaryware and faucetware, the tiles business remains vulnerable due to outsourcing dependence.

“Tiles will be impacted… it is essentially totally driven by outsourcing. If the plants do not open up and we are not able to get procuring material from outside, the tiles portion during Q1 will be impacted.”

— Deepak Chaudhary, VP Finance & Investor Relations

Berger Paints | Large Cap | Paints | Margin Strength Holds Despite Cost Pressures

Berger Paints is one of India’s leading paint manufacturers with a strong presence across decorative and industrial coatings. Despite rising crude-linked input costs and an uncertain demand environment, the company is seeing improving consumption trends, stronger product mix, and believes margins may remain more resilient than expected.

[Reference]

The company believes its current pricing is sufficient to manage existing input costs related to crude oil. This provides clarity on pricing stability, which is essential for maintaining volume growth without hurting profitability.

“We have built in the current crude prices already. As of now there will not be any need for further price increases. However, if crude prices go up further, we will have to look for further price increases, but as of now we are covered.”

— Abhijit Roy, MD & CEO

Management expects to maintain current EBITDA margins if raw material prices remain stable in the near future. This guidance suggests that the current level of profitability is sustainable under prevailing market conditions.

“At the EBITDA percentage level more or less it should be similar to what it was in quarter four. We are expecting that if raw material prices hold at these levels, we should be able to hold up at those levels in terms of EBITDA margin.”

— Abhijit Roy, MD & CEO

The company anticipates that total revenue will grow in the double digits, supported by recent price hikes and solid volume demand. This outlook signals a healthy balance between expansion in sales quantity and realized price per unit.

“Because of price increases we will have a double-digit value growth and possibly a mid to high single-digit volume growth. As of now we should have somewhere around the high single-digit mark in terms of volume growth and double-digit value growth.”

— Abhijit Roy, MD & CEO

The company is shifting its sales toward newer, high-margin products to improve its overall profitability profile. A focus on premium or specialized products is a key driver for long-term margin improvement and competitive differentiation.

“There are some interesting products which we have introduced which are margin accretive. Some of them are doing quite well and therefore the mix profile is improving.”

— Abhijit Roy, MD & CEO

Defence

Paras Defence & Space Technologies | Small Cap | Aerospace & Defense | Strong Order Visibility Ahead

Paras Defence & Space Technologies is a niche Indian engineering company specializing in high-end defense and space applications across optics, defense electronics, and emerging anti-drone systems. While Q4 delivered a sharp jump in growth, management believes the bigger story lies ahead, with a rapidly expanding order pipeline, rising anti-drone opportunities, and expectations of a meaningful scale-up over the next few years.

[Reference]

Management anticipates winning enough new business to potentially double their current order book within half a year. Such a rapid expansion in the backlog suggests a significant scaling of the business operations.

“The upcoming order inflow that we are expecting in the next 3 to six months is huge. We will almost double our order book.”

— Amit Mahajan, Director

The company’s investment in anti-drone technology has started to pay off with meaningful revenue contributions. This diversification into modern electronic warfare indicates a move toward higher-technology products.

“The refreshing part of the business is the anti-drone subsidiary is coming into the game now. They’ve started clocking handsome revenues from the last financial year.”

— Amit Mahajan, Director

Management is confident that the high growth seen in the recent quarter will continue into the next fiscal year. This optimism is backed by a combination of current contracts and a strong pipeline of pending bids.

“The upcoming year the growth momentum will be sustained. The reasons for that is the opportunities that we have on hand, the order book that we already have and the order book that we are expecting in the next 3 to 6 months.”

— Amit Mahajan, Director

The company has crossed a major milestone with an order book exceeding 1,000 crores. A large influx of new orders is expected shortly, providing clear visibility for revenue growth.

“The order book currently stands at very close to 1,000 crores thousand plus crores and the upcoming order inflow that we are expecting in the next 3 to six months is huge.”

— Amit Mahajan, Director

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Welcome to the 58th 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 17 companies across 9 industries.

Retail

• Meesho

• Shoppers Stop Limited

• Marico Limited

• Godrej Consumer Products

Chemicals

• Garware Hi-Tech Films

Financial Services

• Punjab National Bank

• BSE Limited

Automotives

• Bajaj Auto Limited

• Mahindra & Mahindra

Real Estate

• Aditya Birla Real Estate Ltd.

• Raymond Realty Ltd.

Energy

• Adani Power

Healthcare

• Dr. Lal PathLabs

Metal

• Lloyds Metals & Energy Ltd

Engineering & Capital Goods

• Bharat Forge

• Larsen & Toubro Limited

• Polycab India Limited

Retail

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 anticipates that high inflation could act as a tailwind for value-focused companies like itself, as tighter consumer budgets generally lead to increased market share for affordable options, although overall spending might see some headwinds.

“Typically, if you look at times like these—and there is a fair amount of history from the 1970s until now—value-focused companies actually tend to gain share when inflation goes high because budgets are tighter for people across the board. That potentially is a tailwind. Now, of course, there might be a headwind in terms of the absolute amount that people are spending, and some of these might act in a counter fashion. We will see how this progresses, but a high-inflationary environment for value-focused players is generally a tailwind.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho Mall is strategically focused on serving “mass India” by offering value brands and packs to a broad customer base, rather than exclusively premium users, enabling popular brands to reach previously inaccessible online consumers.

“Yes, so I think we are scaling Meesho Mall for affordable brands, or I would say value brands or value packs of all the brands that you know. We have seen a lot of progress over the last 1 year. A lot of mass brands that are popular in India have scaled their selection on Meesho and they find that they’re able to reach a customer for the first time that they could not reach earlier and sell selection online for the first time that they could not sell earlier. Everyone is seeing a lot of potential there. So it is going to be a big focus for us. Meesho Mall is not just focused on the premium customer. It is going to be focused on anyone who cares about value.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Meesho emphasizes that contribution margin is the most relevant metric for assessing business trajectory, as a higher mix of prepaid orders, while reducing revenue per order, is beneficial due to lower costs and stable contribution margins.

“From our business standpoint, the right number to consider from a trajectory standpoint is contribution margin. As I was explaining earlier regarding prepaid versus cash on delivery orders, if you start getting a higher mix of prepaid orders, which is fundamentally good for the platform, you would see that the revenue per order would decline. But the contribution margin would remain the same because the lower cost of serving a prepaid order is what we pass back to our consumers in the form of lower pricing.”

— Dhiresh Bansal, Chief Financial Officer

Users who have been on the platform for three years or more tend to exhibit a significantly higher purchase frequency, typically making 15 or more orders annually.

“I don’t have the specific number of frequency off the top of my head but in general as users mature on the platform their frequency in a 3-year time period starts going up to 15 times or more, so I would suspect for the FY24 and before cohort it will be a similar number.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

Customer acquisition cost (CAC) has decreased due to technological investments and AI-powered product enhancements like the Vani voice agent, which effectively reduce user friction despite the challenges of acquiring customers in deeper Indian markets.

“The CAC reduction is happening due to the investments that we’ve done historically in terms of technology, in terms of improving the value proposition from a price perspective as well. In fact, as you go deeper into India, on a like-for-like basis, CACs only go up because you have to convince a certain user more in order to transact. But with the improvements in products that we’ve made through AI and otherwise, that barrier threshold has come down. Vani, for instance, our voice agent, or other investments we’ve done in terms of algorithms as well have reduced that friction between a user installing the app and placing their first order and that’s the reason why CAC continues to be in a fairly limited zone.”

— Vidit Aatrey, Chairman, Managing Director and Chief Executive Officer

While BNPL is in its nascent stage, the primary driver for the reduction in cash-on-delivery (COD) transactions has been the increasing adoption of prepaid orders, supported by lower costs and consumer discounts, with BNPL expected to contribute more significantly in the future.

“I think BNPL is still fairly early in its life cycle. Right now the key initiatives that we’ve had within our prepaid products, which is payment before delivery, the cost of prepaid orders coming down and us passing consequently some of them back to our consumers with better prepaid discounts has been the driving force so far in terms of cash on delivery share coming down or prepaid share increasing. Going forward as we continue to invest behind BNPL and we’re seeing good early signs there, that will become a driver but at this point in time it is more direct prepaid share increasing.”

— Dhiresh Bansal, Chief Financial Officer

Shoppers Stop Limited | Mid Cap | Retail Stores

Shoppers Stop is a leading Indian retailer specializing in premium apparel, beauty products, and lifestyle accessories through its extensive departmental store network. The company also manages a high-growth beauty distribution arm and is expanding into the value-fashion segment via its InTune brand.

[Concall]

The core department store business has reached a significant revenue milestone while delivering its best same-store sales growth in ten years. This suggests a successful recovery and stabilization of the flagship format after years of stagnant growth.

“The departmental store business crossed 5,000 crores revenue for the first time, which is a big milestone for us. At the start of the year, we had given a guidance of mid-single digit LFL and I am very happy to share that we ended the year with 4.7%, which is our highest ever LFL in a decade, particularly after two consecutive flat-ish LFL sales for FY24 and FY25.”

— Kavindra Mishra, Managing Director and CEO

The company’s top-tier loyalty program is seeing record high enrollment and extremely high retention rates among its wealthiest customers. This strong retention provides a stable foundation for future revenue and proves the brand’s resilience in the premium segment.

“The premium end of our loyalty, which is our black card program, has reported the highest ever 67,000 new recruitments and highest ever renewals of 66,000, with the renewal rate being an impressive 74%. Demonstrating deep value proposition from a customer perspective besides personalized service standards helped us to increase the loyalty base to 13.5 million.”

— Kavindra Mishra, Managing Director and CEO

The beauty distribution segment is growing at an exceptional pace and has become a dominant player in the Indian market. This diversification adds a high-growth revenue stream that complements the traditional retail store model.

“Our beauty distribution business continued its strong growth trajectory, generating revenue of 426 crores, which is equivalent to 650 crores of GMV, with a stellar 81% growth year-over-year and delivering a three-year CAGR of 90%. This would make us the largest beauty distributor in the country.”

— Kavindra Mishra, Managing Director and CEO

Operational improvements and better inventory management have led to the highest cash generation in nearly a decade. This increased liquidity allows the company to self-fund its growth initiatives and reduce reliance on debt.

“I am very happy to state that because of strong operational efficiency, we were able to generate cash from operations of 301 crores. This is the highest in the last 8 years, supported by working capital optimization of 155 crores.”

— Kavindra Mishra, Managing Director and CEO

Management is balancing new store openings with the modernization of existing high-performing locations. The strategy focuses on maximizing productivity from current assets where they have already seen proven sales uplifts.

“We plan to add 9 departmental stores and 35 to 40 InTune stores in this financial year. This includes the renovation of marquee stores. We have seen with both Inorbit Malad and Juhu that once we renovate our marquee stores, the throughput really increases.”

— Kavindra Mishra, Managing Director and CEO

Management has set a high bar for sales productivity improvements before resuming aggressive expansion in the value segment. Investors should watch for this 25-30% productivity jump as a signal that the business model is ready to scale.

“In the case of InTune, as I mentioned, right now we are not looking at opening stores in H1. The SPSF should go up by another 25-30% for us to be confident. We need to see that over a couple of quarters rather than just one or two months.”

— Kavindra Mishra, Managing Director and CEO

Renovating major existing stores is yielding massive productivity gains without increasing the fixed rent or staff costs. This high operating leverage means that extra sales from these stores will fall heavily to the bottom line.

“We are seeing that once we renovate marquee stores, our sales productivity goes up 35-40%. Of course, because that cost is fixed. That is why we are excited about renovating our five big stores this year.”

— Kavindra Mishra, Managing Director and CEO

The company is warning of potential stock delays in the second half of the year due to global supply chain issues. However, they believe their size and relationships with major brands will protect them better than smaller competitors.

“Second is on supply chain uncertainties. They may cause some intermittent disruptions in merchandise availability, particularly in H2. However, given our diversified sourcing and scale, we are confident of effectively managing and mitigating this risk.”

— Kavindra Mishra, Managing Director and CEO

Management is prioritizing overall profit over just hitting a specific percentage of private label sales. Their success with the new ‘InTune Girlz’ brand shows they can successfully compete with international brands in niche categories.

“We look at the profitability of the business rather than just private brand contribution. We just launched InTune Girlz, a private brand for the girls’ business, and it is doing really well. We started with five stores and expanded to 69, and the throughputs are higher than any of the international girls’ brands.”

— Kavindra Mishra, Managing Director and CEO

Marico Limited | Large Cap | FMCG

Marico Limited is a prominent Indian consumer goods company specializing in hair care, edible oils, and healthy foods. It operates flagship brands like Parachute and Saffola across India and several international markets in South Asia and Africa.

[Concall]

The price of coconut oil, a major raw material, has dropped significantly, allowing the company to lower prices for consumers. This move is intended to drive higher sales volume and gain market share starting in the next quarter.

“With copra prices having corrected by about 35% from peak levels and expected to remain range-bound from here on, we have passed on the benefit to consumers through some selective pricing actions. As pricing stabilizes, we expect a recovery in consumption with a pickup in volume growth, which will be evidently visible from Q1 FY27 itself.”

— Saugata Gupta, MD and CEO

The company’s digital brands have reached a significant sales milestone and are becoming increasingly profitable. Investors should note the shift from high-growth spending to a focus on sustainable double-digit profit margins.

“The digital-first portfolio of premium personal care exited FY26 at a 1,100+ crores ARR. The scale-up of this portfolio is being accompanied by a structural improvement in profitability as we aim to exit FY27 at double-digit EBITDA margins and eventually mid-teen EBITDA margins by FY30.”

— Saugata Gupta, MD and CEO

Marico is actively reducing its reliance on traditional commodities to protect itself from price swings. This portfolio shift aims to make the company’s earnings more stable and predictable over the long term.

“By FY30, we expect to have substantially transformed the portfolio, resulting in lowering the share of commodity-linked businesses from more than 70% to 50% over a decade. To sum up, we have delivered on our aspirations across key performance parameters while navigating a highly volatile input cost environment and strengthening the underlying growth drivers of the business.”

— Saugata Gupta, MD and CEO

Management has set a clear target to reach 15,000 crores in revenue next year with strong profit growth. They plan to achieve this through technology investments and selling more high-end products.

“At a consolidated level, we will aim to deliver double-digit revenue growth to cross 15,000 crores in revenue and high-teen EBITDA growth, subject to stable macros. Over the medium term, our strategy remains anchored in driving profitable growth through expansion of the total addressable market, sharper portfolio choices, accelerated premiumization, and continued investments in digital media analytics, automation, and AI capabilities.”

— Saugata Gupta, MD and CEO

The company’s recent acquisitions are already contributing healthy profits rather than burning cash. This immediate financial benefit supports the management’s higher profit growth targets for the next fiscal year.

“Two of the three acquisitions—Cosmiq and Skinetics—are profitable. Skinetics is in the mid-20s and Cosmiq is in the high teens. Additionally, Plix, a large part of our digital business, is experiencing an upward trajectory in operating margins.”

— Saugata Gupta, MD and CEO

The company is focusing on traditional neighborhood stores (General Trade) because it is harder for competitors to enter that space. Strengthening this retail network creates a durable barrier that protects Marico’s long-term sales.

“We invested in Setu because GT creates significant employment and is a source of competitive advantage since entry barriers are decreasing in modern trade but remain in GT. This systematic investment helps our distribution partners and increases their viability, helping us grow consistently regardless of state-specific consumption.”

— Saugata Gupta, MD and CEO

The company is intentionally cutting low-profit products in its foods business to improve overall health. This strategy prioritizes quality earnings and better focus over simply reporting higher sales numbers.

“Overall Foods growth was affected because True Elements was lapping a high base and we took SKU rationalization calls on low-margin products there. Additionally, Plix is pivoting toward personal care, so its contribution to Foods growth is decreasing. We expect teen growth in True Elements in FY27.”

— Saugata Gupta, MD and CEO

Godrej Consumer Products | Large Cap | FMCG

Godrej Consumer Products is a leading FMCG company with a strong presence across home care, personal care, and household insecticides in India and international markets. While the company delivered healthy volume-led growth in Q4, rising commodity costs and crude-linked inflation are expected to keep margins under pressure in the near term, making pricing power and cost control the key factors to watch ahead.

[Reference]

Rising costs for oil-based raw materials are making it difficult for the company to maintain current profit levels. This suggests investors should expect near-term pressure on margins until commodity prices stabilise.

“Commodity inflation and crude-linked input costs are expected to keep near-term margins under pressure.”

— Asif Malbari, CFO, Godrej Consumer Products Ltd.

The company is responding to higher costs by selectively raising product prices and optimising expenses. These measures are aimed at protecting profitability despite inflationary pressure.

“Management has taken calibrated price hikes and cost optimisation measures to offset inflation.”

— Asif Malbari, CFO, Godrej Consumer Products Ltd.

The home insecticide category continues to perform strongly, contributing meaningfully to both revenue growth and profitability. Management sees this segment as a key growth driver going forward.

“Home insecticides continue to perform strongly and remain an important growth and margin driver.”

— Asif Malbari, CFO, Godrej Consumer Products Ltd.

International operations are showing signs of stabilisation after a prolonged weak phase. Management expects overseas profitability to improve meaningfully in the next fiscal year.

“International business showed signs of stabilisation, with management expecting profit recovery next year.”

— Asif Malbari, CFO, Godrej Consumer Products Ltd.

Despite risks from inflation and weather-related disruptions, management remains confident about sustaining growth momentum across categories and markets.

“Management remains confident about growth despite inflationary and weather-related uncertainties.”

— Asif Malbari, CFO, Godrej Consumer Products Ltd.

Chemicals

Garware Hi-Tech Films | Small Cap | Chemicals

Garware Hi-Tech Films Limited is a manufacturer of specialized solar control films for architectural and automotive applications, paint protection films (PPF) for automotive applications, and high-end BOPET films for industrial applications.

[Concall]

The company achieved record-high profitability in Q4 FY26, driven by strong operating leverage, improved pricing, and a better product mix.

“Q4 was the highest-ever profitability quarter in our history. EBITDA stood at 157 crores, up 29% on a year-on-year basis, with margins expanding to 26.2%. Profit after tax stood at 108 crores, up 39.1% year-on-year, a clear reflection of our operating leverage, improved realization, and a stronger product mix.”

— Deepak Joshi, Director of Sales and Marketing

The company anticipates maintaining an export-heavy revenue mix of 75-80% exports to 20-25% domestic, despite domestic market growth, due to overall company expansion targets.

“While the domestic market will grow, it will ultimately be a ratio between 75-25 or 80-20 between exports and the domestic market. That ratio will continue because of the overall growth we are targeting for the company.”

— Deepak Joshi, Director of Sales and Marketing

Management sees a large untapped opportunity in architectural films, privacy solutions, and smart surfaces.

“The sky is the limit for architectural business… We offer safety, security, decoration, and privacy-on-demand switchable films… We want this technology in every standard home in India and eventually abroad.”

— Management

Garware’s presence across 90+ countries helped reduce concentration risk during geopolitical disruptions.

“Garware supplies over 90 countries. When the US is in trouble, Europe helps. When there is an issue in one region, another performs well.”

— Management

The MENA region is a key growth driver, with current sales of $15 million projected to grow at a 25-30% CAGR to $20-22 million this year, supported by a newly established subsidiary and dedicated team.

“We consider the Middle East and North Africa (MENA) region a primary growth driver. Currently, sales there are roughly 15 million dollars. We expect 25-30% CAGR, targeting 20-22 million dollars this year. We have a separate team in the Middle East recruited from top competition. The subsidiary has already been completed.”

— Deepak Joshi, Director of Sales and Marketing

Sun control films are the company’s fastest-growing and largest revenue segment, with unique and advanced manufacturing capabilities providing a significant competitive advantage.

“Our growth has been phenomenal. 50% of our revenues come from sun control, making it our number one product and fastest-growing segment. Building a sun control line is one of the toughest challenges. Our lines are so advanced that others cannot compete with our operations, which are built by our own team. We have unique operations with sun control machines that no one else in the world possesses.”

— Deepak Joshi, Director of Sales and Marketing

Garware has largely passed through raw material inflation, preserving margins.

“We discussed cost increases with our customers in a healthy and ethical way and were able to secure price increases… We have been able to pass on the maximum amount.”

— Management

Financial Services

Punjab National Bank | Large Cap | Public Sector Bank

Punjab National Bank is one of India’s largest public sector banks, providing a wide range of retail, corporate, and agricultural financial services. The bank is currently executing a strategic shift toward digital-first lending and high-yield retail and MSME segments to improve its margins and asset quality.

[Concall]

The bank is signaling a bottoming out of net interest margins after facing pressure from sticky deposit rates. This forward guidance suggests that recent loan repricing and mix shifts will drive profitability improvements in the coming quarters.

“We expect the margins to improve moving forward and our NIM to witness a Q-o-Q increase from the level of Q4 FY26. We expect our global NIM to remain in the range of 2.6% to 2.7% for financial year 26-27.”

— Ashok Chandra, MD and CEO

Management highlighted that nearly 70% of the current loan book consists of newer loans sanctioned under stricter post-2020 underwriting standards. This significantly lower delinquency rate in the fresh portfolio supports a more stable long-term asset quality outlook.

“The outstanding in these loans as on March 31 is 8.75 lakh crore, which is close to 69.5% of our total outstanding loan book. The NPA in this book is hardly 5,034 crore, which is only 0.40% of the disbursed amount under fresh underwriting.”

— Ashok Chandra, MD and CEO

PNB is successfully scaling its digital lending capabilities, with digital loans now accounting for a substantial portion of new volumes. This shift helps the bank lower its cost of acquisition while speeding up the credit delivery process.

“We have sanctioned and disbursed more than 20,873 crore through digital mode in Q4 to 4.8 lakh customers. Every third loan is being sanctioned in digital mode in our bank.”

— Ashok Chandra, MD and CEO

The bank has proactively created a floating provision buffer to manage the transition to Expected Credit Loss (ECL) accounting standards. This financial preparation reduces the risk of a sharp capital hit when the new regulatory guidelines take effect.

“We have enough cushion to take care of any requirement that arises from the implementation of ECL from April 1, 2027. That is the first thing. Second, keeping in view the additional provision likely to come, we have already kept 2,045 crore precisely for floating provisions.”

— Ashok Chandra, MD and CEO

The bank is deliberately pivoting its portfolio away from low-yield corporate lending toward the Retail, Agri, and MSME (RAM) sectors. This rebalancing is intended to enhance overall portfolio yields and improve interest income growth.

“We are doing these activities so that the dependency on corporate loans, which is currently around 46% to 47%, can be brought down to 40% in the long term, and 42% in the short term. We want the RAM share to reach 60% in the long run and around 58% in this financial year.”

— Ashok Chandra, MD and CEO

PNB plans to completely phase out its Inter-Bank Participation Certificate (IBPC) portfolio, which has traditionally been a low-margin business. Replacing these assets with higher-yielding direct loans will contribute to the bank’s net interest margin expansion strategy.
IBPC (Inter-Bank Participation Certificate) is a mechanism through which one bank temporarily sells participation in a pool of loans to another bank for liquidity, risk-sharing, or priority-sector compliance purposes, with or without transfer of credit risk.

“We are going to replace all those low-rate IBPC assets. We expect a further reduction of 18,000 to 20,000 crore. We want to completely exit the IBPC business.”

— Ashok Chandra, MD and CEO

Management noted that the incremental cost of acquiring new deposits has begun to trend downward. This reduction in funding costs is a critical lever for the bank to meet its margin expansion targets in the upcoming fiscal year.

“Since new deposits are being gathered at a lower cost, we expect improvements in our NIM during Q1 and Q2. I expect about a 5 basis point improvement in the cost of deposit.”

— Ashok Chandra, MD and CEO

The bank highlighted a significant 145 basis point yield advantage in MSME lending compared to corporate lending. This data point reinforces why the bank is prioritizing MSME growth to drive better bottom-line performance.

“The corporate yield is 7.55% and the MSME yield is 9%. Our global domestic yield is 8.23%. The corporate loan book gives us a lower yield than the domestic average.”

— Ashok Chandra, MD and CEO

BSE Limited | Large Cap | Stock Exchange & Allied Services

BSE Limited is India’s leading stock exchange and the oldest in Asia, providing a platform for trading in equity, debt instruments, derivatives, and mutual funds. It also offers essential market infrastructure services through its subsidiaries, including clearing, settlement, and index services.

[Concall]

BSE has seen its derivative segment more than double in size over the last year as trading activity shifts toward its platforms. This high growth in premium turnover suggests that the exchange is successfully capturing a larger slice of the lucrative F&O market.

“The BSE index derivatives segment continued to demonstrate strong momentum in FY26 with average daily premium turnover reaching a record of 19,523 crores compared to 8,978 crores in FY25, translating into a robust year-on-year growth of approximately 118%. This sustained expansion reflects deeper market participation and improving liquidity.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

Management is expanding its product lineup with new sector-specific derivatives to attract specialized traders. Diversifying the product suite beyond broad market indices is a key strategy to increase the stickiness of its trading volumes.

“Based on market feedback, derivatives on the BSE Focused IT index will be launched from May 11, 2026, further expanding and strengthening our monthly derivatives suite. The launch of derivatives on the Focused IT index will provide participants an additional hedging tool to manage their portfolio risk effectively.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

Revenue from co-location services has more than doubled, driven by higher demand for high-speed trading and a new fee structure. This high-margin revenue stream provides a stable income base that is less volatile than general transaction charges.

“For FY26, co-location revenues increased to 171 crores compared to 74 crores in FY25, reflecting strong growth, healthy utilization levels in the country, and the benefit of the revised throttle charges framework introduced in July 2025. Co-location remains a strategically important part of our diversification agenda.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

BSE is moving beyond equity trading by launching a National Pension System platform to capture a wider range of retail financial savings. This shift toward becoming a ‘super gateway’ for wealth management opens up new long-term growth avenues for the company.

“We are evolving from being India’s senior mutual fund distributor into the country’s definitive super gateway for long-term wealth. With STAR NPS, we now capture the entire financial life cycle of the Indian investor from their first SIP to their final pension.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

BSE’s clearing arm has significantly upgraded its tech capacity to handle high-frequency trading with minimal delays. This infrastructure upgrade is crucial for attracting large institutional players who require high throughput and low latency.

“As far as ICCL, ICCL has been adding members, both big and small. I had stated that ICCL has significantly increased its technological capability to handle around 29,000 trades per second per broker and a peak of 59,000 with a small latency of one second, which is a big number.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

The company has cut its quarterly profit contribution to the Settlement Guarantee Fund in half after reaching safe reserve levels. This reduction will directly boost bottom-line margins and improve earnings quality for shareholders.

“We had initially decided that as BSE, in order to prevent any sudden jerks in the P&L, we would voluntarily contribute a specified stipulated percentage of our profits into SGF every quarter. At the point of time when we reviewed, we had already touched the threshold of more than 150 crores. We have crossed it and in this situation, we are reducing the contribution requirement per quarter from 5% to 2.5%.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

Management is maintaining a flexible approach to pricing, leaving the door open for fee adjustments based on market conditions. This optionality is a significant lever for future revenue growth as the exchange gains more market power.

“As far as the cost is concerned, we always believe in charging appropriate amounts at appropriate points of time considering multiple factors including the volumes that we are making, the cost of trading, the affordability, and what will be easy for the members, etc. These are subject to revisions and review and as and when we feel the appropriate time has come for either an upward or downward revision, we will consider doing it.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

The exchange is focused on shifting trading volume from high-risk daily expiries to more stable monthly contracts. Success in this transition will lead to more sustainable and predictable revenue patterns for the exchange.

“In the coming months and years, I see that more such participants who have a long-term view on the market will be participating in an even bigger way with Sensex contracts, which will bring in those types of monthly volumes which we are looking forward to. One of the recent contracts introduced is Bankex, which as you would be seeing is showing some traction with respect to monthly contracts.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

BSE is currently exploring a new strategy for entering the commodity derivatives market with a unique value proposition. While not immediate, this expansion represents a major untapped market opportunity for the exchange’s next growth phase.

“We want to create a value proposition for the market by thinking about some unique selling proposition, not just the expiry day alone as a differentiator. Do we have anything immediately on our mind and on the cards to implement? No. But some thought processes are on and our sincere wish is that very soon we should be able to come out with consolidated views and take the commodity agenda forward.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

The growth of BSE’s cash market share is currently being held back by a lack of progress in automated order routing across exchanges. Investors should watch for regulatory shifts here, as a breakthrough could unlock significant volume gains for BSE.

“But unfortunately, what we are understanding is that the applications for Smart Order Routing (SOR), which people send to both the exchanges, while we have cleared them, are still pending for more than 6 months at the other exchange. Because of this, Smart Order Routing has not taken off and clients are not able to be exchange agnostic and take the best prices available at BSE.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

BSE is aggressively targeting foreign institutional investors to close the participation gap between it and its competitors. Higher FPI participation is critical for improving market depth and the overall quality of trading volumes.

“Our FPI count has grown from 100 to 520, which is commendable, but we have set a target for ourselves of around 800 FPIs. We are already at around 5-6% while in the market generally we find the participation is around 9%. So that is a target for us to reach around 9% of FPI participation.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

BSE is productively deploying accumulated cash into significant capacity increases (500 crores gross block) and rapidly growing technology investments, noting that the technology budget might need to double due to rising hardware costs.

“The accumulated cash is being used productively. In the last 2 years, we have built a gross block of around 500 crores for capacity increases. BSE is a rapidly growing company that requires significant technology investment. The current year’s technology budget appears underpriced. We set 300 crores, but with the global situation, the price of memory and hardware is increasing; the investment requirement to ‘keep the lights on’ and grow is almost doubling.”

— Sundararaman Ramamurthy, MD and CEO, BSE Limited

Automotives

Bajaj Auto Limited | Large Cap | Automobiles - Two & Three Wheelers

Bajaj Auto is a prominent Indian multinational manufacturer of motorcycles and three-wheelers, ranking as one of the world’s largest in both categories. The company operates across diverse segments including mass-market commuters, premium performance bikes, and an expanding portfolio of electric vehicles.

[Concall]

Record export revenues highlight the company’s ability to drive high-value growth even when traditional volume peaks in markets like Nigeria remain under recovery. This performance provides a significant hedge against domestic market fluctuations and improves overall dollar realization.

“Exports business unit: Starting off with that, the business unit crossed the 600,000 units mark for the second consecutive quarter, clocking 25% growth year-over-year. This has resulted in the highest-ever quarterly revenue from exports. In FY26, we recorded our second highest-ever performance in volume terms, but at USD 2.2 billion, it was the highest-ever performance in revenue terms.”

— Rakesh Sharma, Joint Managing Director

Management is targeting a 10 percent increase in monthly export volumes as demand stabilizes across Latin America and Asia. Investors should monitor geopolitical stability in the Middle East as it represents a primary risk to achieving this upgraded target.

“Overall, the exports business has established a sustained growth momentum. We are looking at moving the exports needle to 220,000 units per month this quarter, up from the 200,000 levels. And this is despite some loss of business in the Gulf region—we are of course hoping that there will be no further disruptions due to the geopolitical issues in the Middle East.”

— Rakesh Sharma, Joint Managing Director

The rapid success of new Pulsar variants confirms that management’s aggressive product refresh strategy is effectively defending and gaining market share. High consumer acceptance of these variants suggests strong pricing power in the critical 150cc plus motorcycle segment.

“Sequential gains in market share are being made month-on-month driven by the performance of our refreshed Pulsar portfolio. 10 new variants and updates have been introduced in the period of October to March and they now contribute to 50% of our sales. It signals very good acceptance.”

— Rakesh Sharma, Joint Managing Director

The electric vehicle business has reached a significant scale where it contributes nearly one-fifth of domestic revenue with healthy profitability. This transition indicates that the company is successfully pivoting away from internal combustion reliance without sacrificing its margins.

“In totality, our two-wheeler and three-wheeler electric business is actually now the largest in the auto industry, accounting for almost 20%+ of our domestic revenues and contributing double-digit EBITDA percentage.”

— Rakesh Sharma, Joint Managing Director

Management anticipates a sharp deceleration in domestic motorcycle growth due to multiple external headwinds affecting consumer sentiment. The focus shifts to premium segments, which are proving to be more resilient than the entry-level mass market.

“The demand environment has softened in April due to general inflation, increased prices of our vehicles, LPG shortages, manpower migration, and the LPG shortage-led effect on the consumer sentiment. This is bound to slow down the motorcycle category from its rocking 20% growth in Q4 to an estimated 7-9% in the near term. But having said that, the great thing from our point of view is that we expect this growth to come almost entirely from the 125cc plus segment and even more so from the 150cc plus segment which should grow at twice the industry rate”

— Rakesh Sharma, Joint Managing Director

Achieving double-digit margins in the EV portfolio is a critical milestone that addresses long-standing investor concerns about the cost of electrification. The profitability of e-three-wheelers provides a financial cushion while the Chetak e-scooter reaches a break-even point.

“Underpinning the margin delivery was a significant development that we have made on our electric portfolio, which hit double-digit EBITDA margins in its entirety for the very first time in the course of this year. The improvements came on the back of rising scale of the very popular and profitable electric three-wheelers and the improving unit economics of Chetak, which has now reached EBITDA neutral as a portfolio.”

— Dinesh Thapar, Chief Financial Officer

Management warns that mandatory price hikes are eroding the benefits of previous government tax cuts for consumers. This price sensitivity could further pressure volume growth if inflationary trends persist into the upcoming festive season.

“What this means is that depending on the product group, the benefit which the GST rate cut had given to the customer—almost 30-40% of that could get rolled back. So obviously, it will have some impact on the demand. Secondly, there is already some adverse sentiment which has set in.”

— Rakesh Sharma, Joint Managing Director

Demand for Chetak scooters is currently outstripping the existing supply chain capacity. A planned massive expansion in manufacturing capacity signals management’s confidence in long-term EV adoption and their intent to capture higher market share.

“Yes, with Chetak we have not been able to fulfill the demand that has been there for one reason or the other. ... We are taking steps, there is some serious work going on to see how and where we should expand capacity in a quantum manner and once we are done with that exercise we’ll be happy to talk to you guys about it. But yes, we have now reached a position where we think a substantive increase in capacity in Chetak is needed.”

— Rakesh Sharma, Joint Managing Director

The strategic decision to lead with premium models in Brazil aims to build brand prestige before pursuing mass-market volumes. This high-margin approach should lead to better long-term profitability as the company expands its manufacturing footprint in South America.

“Regarding Brazil, it has done quite well. At this point of time we are so small in Brazil, which is a very big opportunity as a very large country. We have taken a top-down approach; our approach has been to keep the brand forward rather than volume forward and the way it’s manifesting is that we have launched our highest-end models over there first.”

— Rakesh Sharma, Joint Managing Director

Structural changes in Indian mobility, such as increased inter-town commuting and road network expansion, are driving high demand for larger-format three-wheelers. This trend turns a traditionally slow segment into a major growth driver for the company’s commercial vehicle division.

“And I’ve been saying even though it’s a humble vehicle, I’ve been saying that we are sitting on the threshold of very large growth in three-wheelers. ... This is being driven by people now wanting to travel between towns even for work to escape the rental requirements. It is now very possible for a person to stay in their hometown and work in the neighboring town and take a shared three-wheeler to commute.”

— Rakesh Sharma, Joint Managing Director

The company is executing a large-scale capital return through a massive buyback alongside substantial dividends. This aggressive payout policy reflects a high degree of confidence in the company’s internal cash generation and balance sheet strength.

“Given that the buyback is now 5,600 crores, we will get started straight away with the process of seeking shareholder approval. And then this is essentially the process which will run now and likely culminate by the end of July with the SEBI filing. I would expect that payouts would essentially happen sometime in the second week of July, likely.”

— Dinesh Thapar, Chief Financial Officer

The company anticipates sharply inflationary commodity costs in Q1, with significant price increases across key metals and tight material availability.

“Looking ahead to Q1, the commodity environment has moved to being sharply inflationary, almost hyper I would say, with the prospect of material availability on the aluminum alloys and polymers front also being very tight... To put that in some context, many of you would be aware from publicly disclosed numbers, steel is almost up 15%, copper 20%, while aluminum and noble metals are all up in the range from 35 to 45%.”

— Dinesh Thapar, Chief Financial Officer

Mahindra & Mahindra | Large Cap | Auto & Auto Components

Mahindra & Mahindra is a leading Indian conglomerate with a dominant presence in the domestic utility vehicle, tractor, and commercial vehicle markets. The group also operates significant businesses in IT services, financial services, logistics, and real estate through its various subsidiaries and ‘growth gems.’

[Concall]

The group’s smaller and emerging businesses are contributing meaningfully to overall profit growth, helping Mahindra outperform despite slower growth in its core farm segment.

“If at some point in time I had mentioned to you that if auto profit growth is 33% and farm profit growth is 13% for the year, what number would you say for the Mahindra Group? I don’t think any of us would have said 35% at that point in time. But with auto at 33% and farm at 13%, the Mahindra Group is still at 35% for the year.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

Management highlighted that the group’s ‘growth gems’ are scaling rapidly and are now becoming meaningful contributors to both earnings and valuation.

“Our growth gems collectively have increased profit by 50% year-over-year. These are not small numbers now. They have to be larger, so if you look at the average of 35% with auto at 33% and farm at 13%, others have to contribute in a meaningful way.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

The company is using uncertainty as an opportunity to expand aggressively while competitors remain cautious, supported by a strong cash position.

“Our theme is going to be ‘Accelerate in Uncertainty.’ There is uncertainty, and we don’t expect that to go away. But we are best poised to take advantage of it with the talent we have, the foundation we’ve built, the strength of our businesses, and, of course, the cash that we have.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

M&M is quantifying the direct financial impact of artificial intelligence across multiple businesses, with AI expected to contribute meaningfully to revenue and lending growth.

“For FY27, we are tracking a delivery of 4,100 crores in terms of revenue impact from AI. At Mahindra Finance, we expect to have 10,000 crores more in disbursements because of AI. This reduces fraud and enhances revenue.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

Management laid out aggressive long-term growth ambitions across automotive, finance, technology, and real estate businesses over the next five years.

“Looking at the next 5 years, between FY20 and FY31, we expect Auto revenue to grow 8 times, Farm revenue 3 times, TechM revenue 1.5 to 2 times, and Mahindra Finance AUM 5 times. Residential pre-sales are expected up 14 times.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

The company is significantly expanding its SUV and EV manufacturing capacity alongside an aggressive new product pipeline.

“We will hit 60,000 ICE and 22,000 EV capacity by the beginning of FY28. The Nagpur plant is on track to start in mid-2028. We are planning 10 new LCV launches and 10 new ICE SUVs plus 6 new BEVs by FY31.”

— Rajesh Jejurikar, ED and CEO of Auto and Farm, Mahindra & Mahindra

Management indicated that demand remains stronger than production capacity in the SUV segment, reflecting strong pricing power and customer demand resilience.

“Capacity is a bigger constraint than demand right now. Regarding fuel prices, our customers at the 12-15 lakh price point are less sensitive to small increments in monthly fuel costs.”

— Rajesh Jejurikar, ED and CEO of Auto and Farm, Mahindra & Mahindra

The Aerospace and Real Estate businesses are scaling rapidly and could become major long-term value creators for the group.

“In Aerospace, we got a billion dollars of orders in the last 12 months. Our aspiration is to be among the top 5 aerostructures companies in the world. Real estate profit today is roughly 5 times the average of the last 10 years.”

— Dr. Anish Shah, Group CEO and MD, Mahindra & Mahindra

Real Estate

Aditya Birla Real Estate Ltd. | Mid Cap | Real Estate

Aditya Birla Real Estate is the real estate arm of the Aditya Birla Group, operating primarily under the Birla Estates brand. The company develops premium residential and commercial projects across key Indian markets, including MMR, Bengaluru, NCR, and Pune.

[Concall]

Management observes a divergence in the housing market where luxury homes are selling much better than affordable ones. This trend justifies the company’s strategic focus on high-end developments in major metro areas.

“The real estate sector continues to benefit from these largely supportive conditions, strengthening the sector’s long-term growth trajectory. In terms of industry performance, residential demand remained stable in Q4 FY26. However, the premium and luxury segments continue to outperform, while affordable and mid-income demand softened.”

— R. K. Dalmia, MD, Aditya Birla Real Estate Ltd.

The company is entering the Mumbai redevelopment market with a significant first project in a high-demand suburb. Success in this segment could provide a steady stream of high-value projects without the high cost of outright land purchases.

“We announced our maiden redevelopment project in Khar with a GDV potential of Rs. 1,700 crores. Discussions with several more societies are progressing well, and we remain optimistic about concluding additional partnerships in the months ahead. This segment will further contribute to our growth going forward.”

— R. K. Dalmia, MD, Aditya Birla Real Estate Ltd.

A major luxury project in Mumbai is facing potential delays due to the timing of regulatory approvals. Investors should monitor this timeline as the launch is a critical driver for the company’s near-term revenue goals.

“Regarding the launch for Birla Niara Tower C, it is really touch and go. We are pursuing the approvals very hard. We are expecting launch in the first half or H1, but it is possible that by the time we launch, it may spill over to Q3.”

— K. T. Jitendran, MD and CEO, Birla Estate

The company maintains a very liquid balance sheet with over 2,300 crores in cash and investments. This financial strength allows them to acquire prime land and fund construction without relying heavily on debt.

“For land acquisition, we have a very strong cash balance. Our operating cash flow is positive. We have almost 1,000 crores of mutual fund balances at a consolidated level and almost 1,300 crores of cash and RERA balances.”

— K. U. Shah, CFO, Birla Estate

The management has acknowledged that their long-term sales milestone of 15,000 crores might be delayed by a year. This transparency helps investors set more realistic expectations for the company’s growth scaling timeline.

“Looking at the current trajectory, it is possible that the 15,000 crore target might slip from FY28 to FY29. We will try our level best, but a slip to FY29 is a definite possibility for the reasons you mentioned. Our attempt will be to continuously stack up our pipeline and deliver.”

— K. T. Jitendran, MD and CEO, Birla Estate

Raymond Realty Ltd. | Mid Cap | Real Estate

Raymond Realty is the real estate development arm of the Raymond Group, focusing on premium residential and mixed-use projects across the Mumbai Metropolitan Region. The company leverages an asset-light model through Joint Development Agreements while developing its significant 100-acre legacy land bank in Thane.

[Concall]

The company has successfully hit its diversification target early, reducing its reliance on a single micro-market in Thane. This transition to a more balanced portfolio across various Mumbai regions reduces geographic risk for investors.

“The most strategic milestone for the last year was the structural shift in our portfolio mix. We had previously communicated a target of a 50-50 mix between our own land in Thane and new JDAs by FY27. I am very happy to report that we have achieved this milestone one year ahead of schedule in FY26.”

— Harmohan Sahni, MD and CEO

The company’s expansion into Joint Development Agreements has created a significant revenue runway without requiring heavy upfront capital for land. This strategy allows for rapid scaling and presence in high-value markets like Bandra and Kandivali.

“Our JDA portfolio now comprises 7 projects with a combined revenue potential of approximately 17,000 crores based on current prices. This includes our most recent addition in Kandivali added in FY26. Our execution engine has been firing on all cylinders across the MMR.”

— Harmohan Sahni, MD and CEO

While initial reporting for new projects shows lower margins, the company maintains a strict 20% internal threshold for all new contracts. This suggests that the current blended margins are a factor of accounting timing rather than poor project economics.

“When we launch a project, the initial EBITDA margin is low. However, when we contract a deal, we do not look at anything less than a 20% margin. It may start in single digits for the first 6 months and then creep up.”

— Harmohan Sahni, MD and CEO

The company is prioritizing rapid growth and project acquisition over immediate cash retention, leading to expected negative cash flow in the near term. Investors should view this as a strategic investment into scaling the business for future earnings.

“For the next 2 years, we will likely be cash negative on an overall basis as we reinvest internal accruals to grow our portfolio. Growth has a price, and cash flow is that price, but you get it back through P&L and balance sheet growth.”

— Harmohan Sahni, MD and CEO

Despite high growth and significant project launches, the company is maintaining a conservative debt profile relative to its equity. Staying well below the 1:1 internal ceiling provides a safety buffer against market downturns.

“We ended FY26 at 0.6 debt-to-equity. We have an internal discipline not to exceed 1:1, and we will stay within that.”

— Harmohan Sahni, MD and CEO

Energy

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]

Adani Power has secured revenue visibility by tying up 95% of its operating capacity under long-term and medium-term PPAs, mitigating market volatility risks.

“Furthermore, we have ensured revenue visibility for our current operations with 95% of our operating capacity now tied up under long-term and medium-term PPA. This strategy provides stability and derisks our business from short-term market volatility.”

— S. B. Khyalia, Chief Executive Officer

Adani Power is expanding its focus internationally into thermal, hydro, and transmission sectors, including a new 570 MW hydropower plant SPV in Bhutan.

“We are expanding our area of focus beyond the Indian territory. We will evaluate internal projects in thermal, hydro, and transmission sectors and invest in attractive opportunities that qualify. We have recently incorporated an SPV in Bhutan setting up a 570-megawatt hydro power plant.”

— S. B. Khyalia, Chief Executive Officer

The company is strategically positioning itself for future growth by exploring nuclear power projects in India, including site identification and necessary approvals.

“We are also aligning ourselves to the emerging long-term opportunities in the power sector, such as nuclear power. We have incorporated several SPVs in India for investment in nuclear power projects. We are identifying sites for these projects and seeking necessary approvals.”

— S. B. Khyalia, Chief Executive Officer

Outstanding payments from Bangladesh have decreased with regular collections, and an expert has been appointed to resolve the dispute regarding the undisputed amount.

“As regards to collection is concerned, the outstanding has gone down. And therefore, we are getting regular payments from the Bangladesh. As regards to the other issue probably which you are asking or seeking details about the undisputed amount and its regulation process. So as a part of the process, we have appointed an expert who is going to hear both the parties soon.”

— S. B. Khyalia, Chief Executive Officer

Adani Power is not facing domestic coal shortages, and while imported coal prices are impacted by geopolitical issues, the pass-through mechanism mitigates financial impact.

“So far, there is no coal shortage that we are facing, since the domestic coal supply is not directly impacted by the geopolitical issue and the production of coal in India is sufficient. So, we are not really having any issue as far as domestic coal availability is concerned. As far as imported coal is concerned, there is some impact on the price because of increase in bunker fuel, et cetera. The shipping cost has gone slightly high, but since it is passed through, we will not get impacted by that.”

— S. B. Khyalia, Chief Executive Officer

There are significant PPA opportunities in the market, with approximately 13 GW of bids and an additional 4 GW recently issued by Gujarat.

“Upcoming PPAs in the market, we have almost 13 gigawatt. Particularly, it is from Uttar Pradesh, Rajasthan, Uttarakhand, West Bengal, and Gujarat. There are PPA bids in the market for 13.8 gigawatt Further, Gujarat has also issued the latest bidding document of another 4,000 megawatts.”

— Dilip Jha, Chief Financial Officer

The company expects merchant power prices to decline with increasing renewable energy penetration, leading to a strategy of securing more long-term PPAs to mitigate this risk.

“But we feel, we are of the view that when more and more renewables will get added, the prices of merchant are bound to go down. So that is the risk which we are trying to mitigate by signing long-term PPAs more and more. So, risk is visible.”

— S. B. Khyalia, Chief Executive Officer

Adani Power aims to achieve INR50,000 crore in EBITDA conservatively by FY 2031, potentially even by 2030 if current plans are executed without unforeseen challenges.

“So, Bharat Bhai, we should be in a position to achieve INR50,000 crore conservatively by FY 2031. If what we have planned today, if we could achieve that and let’s say, no issues arise during this period related to like what presently we have et cetera. In that case, we can touch this even in 2030.”

— S. B. Khyalia, Chief Executive Officer

The company sees significant long-term strategic opportunities in India’s nuclear energy sector, aligned with the country’s ambitious target to expand nuclear capacity from 9 GW to 100 GW.

“But strategically, if you see as a country target for nuclear energy going from 9 gigawatt to 100-gigawatt addition is there. So maybe we will have a huge opportunity of the area or the global scenario also, the things are in place, opportunity in the market.”

— Dilip Jha, Chief Financial Officer

Healthcare

Dr. Lal PathLabs | Small Cap | Healthcare

Dr. Lal Pathlabs Limited is a leading provider of diagnostic and healthcare services in India. The company operates a vast network across the country, offering a wide range of tests for patient diagnosis, disease prevention, monitoring, and treatment. They cater to individual patients, hospitals, healthcare providers, and corporate clients.

[Concall]

The Middle East war has not yet impacted raw material costs or availability due to existing inventory and long-term contracts, but potential supply chain impacts could arise if the conflict persists beyond 3-4 months.

“Bino, as of now, no, because we are, obviously, we have ample sufficient inventory for the next 3 - 4 months, and we have long - term contracts as well. Having said that, I cannot comment, I mean, what happens after 3 - 4 months. If this war continues, obviously, there will be some impact on our supply chain. I mean, because we import most of our reagents and consumables also, there are linkages with oil and all that stuff. But as of now, we are able to maintain. But yes, in the future, I do not have visibility right now.”

— Ved Prakash Goel, Group CFO and CEO, International Business

The incorporation of a Dubai subsidiary is part of a 3-5 year international expansion strategy, aiming for on-ground operations in new geographies, including the Middle East, beyond existing presence in Nepal and Bangladesh.

“As I mentioned on the last call as well that we are making inroad to our international expansion. It is not something immediate, but over a period of, let us suppose, next 3 - 5 years, we are looking to expand a few of the geographies. Right now, we have an on ground presence in Nepal and Bangladesh. But we are looking at some of the new geography on ground operations, including the Middle East. This incorporation is in line with that expansion plan.”

— Ved Prakash Goel, Group CFO and CEO, International Business

Delhi NCR’s sustained double-digit growth is attributed to strong brand equity, channel activation, improved service levels, added testing locations to enhance turnaround time, and a focus on specialized portfolios.

“I think, firstly, on Delhi NCR, I think it has a lot to do with maybe all the things that you said because we have got a very strong brand equity and presence. We have just tried to activate all our channels, including our own infrastructure, our partners as well as improved our service levels. I think I had mentioned in one of the previous calls, we have also added a few testing locations in Delhi NCR to improve the turnaround time. And a lot of work is happening on the specialized portfolio as well. It is an all - around effort, which is carrying on. And then we are seeing results and that is how Delhi NCR growth at double digits is getting sustained.”

— Shankha Banerjee, Chief Executive Officer

Despite 39% of revenue from Tier 3+ geographies, the realization per patient is not dilutive because the company employs a cluster-based pricing strategy, maintaining consistent prices within regions.

“I think this is a discussion we have been pondering in the last quite a few of these calls and you see close to 39% of our revenues is now coming from Tier 3 plus geographies, and we have a realization, which is in front of you. So obviously, it cannot be dilutive and I think I have tried to explain it in the past as well. The way we run our pricing is actually in clusters. So it is not as if I move from a city like Lucknow to, let us say, a city or a town, which is smaller nearby, the pricing is going to change. The pricing in that cluster is actually the same.”

— Shankha Banerjee, Chief Executive Officer

Metal

Lloyds Metals & Energy Ltd | Mid Cap | Iron & Steel

Lloyds Metals & Energy is a major Indian iron ore mining and sponge iron manufacturing company. It is currently executing a large-scale vertical integration strategy to become an integrated steel producer while diversifying into copper and cobalt mining.

[Reference]

Management is seeing strong demand traction in both steel and iron ore markets, while guiding for a sharp increase in iron ore and pellet sales in FY27.

“Price inflation is there. In fact, the market is very, very steady upward. There’s a very good demand traction both in steel and therefore in iron. The projection for this year is around 27 million tons of sales around 7 and a half million tons to 8 million tons of pellet sales.”

— Rajesh Gupta, MD, Lloyds Metals & Energy Ltd.

The company expects its steel plant to be commissioned by the end of the year, marking a major transition toward becoming a fully integrated steel producer.

“And to add to that, we will be having around 800,000 tons of DR sales as well as around 150,000 tons of steel sales. It will be commissioned by the end of this year.”

— Rajesh Gupta, MD, Lloyds Metals & Energy Ltd.

Management highlighted that copper and cobalt assets could become meaningful long-term contributors as production scales up over the coming years.

“That’s right. Yes that’s right. We anticipate around 10,000 tons this year from the sura assets. And around which will be ramped up to 30,000 tons ultimately.”

— Rajesh Gupta, MD, Lloyds Metals & Energy Ltd.

The company plans to continue aggressive expansion through large-scale capex while maintaining relatively controlled debt levels.

“We invested 8,000 crores this year FY26 and this year should be around 12,000 crores. Last 3 years we have invested around 30,500 crores. Our net debt is only 4,000 crores even now.”

— Rajesh Gupta, MD, Lloyds Metals & Energy Ltd.

Management hinted at a potential future IPO for its mining and infrastructure business to unlock valuation upside.

“Being a more steady business we think that the valuation should be given a better multiple and at some point of time we would go in for an IPO. The detailing is yet being done and is on the drawing board but that’s not off the cards.”

— Rajesh Gupta, MD, Lloyds Metals & Energy Ltd.

Engineering & Capital Goods

Bharat Forge | Large Cap | Auto & Defence

Bharat Forge is a global manufacturing and engineering company with leadership across automotive forgings, industrial components, defence, and aerospace systems. While strong demand in North American trucks, defence, and data centre-linked exports is driving aggressive FY27 growth guidance, the bigger shift appears to be the company’s push toward high-technology manufacturing beyond traditional automotive markets.

[Reference]

Management is projecting strong growth across both automotive and defence businesses, indicating robust demand visibility across core segments.

“I think the automotive segment, including the industrial segment, we are likely to see a growth of almost 25% plus. Including the industrial side of the growth and the defence business, we are likely to see a growth of about 50%.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

The company is seeing strong demand from the US truck market and rapidly growing opportunities linked to data centre infrastructure.

“As far as the automotive and industrial business is concerned, there’s a strong growth in the US truck market. That’s one part. Second, there’s a strong growth in the data centre business, especially for people who supply standby power equipment to data centres.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

Bharat Forge believes raw material inflation will not materially impact margins due to pass-through arrangements, while technology initiatives are helping reduce operational costs.

“As far as raw materials are concerned, it’s a direct pass through, so it’s not a problem for us, and our customers understand it. Using a lot of technology, including AI and digital technology, we are reducing our cost quite substantially.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

Management is targeting meaningful cost reductions through AI and digital technologies, particularly in defence product development.

“We are targeting by next year at least a 5 to 7% cost reduction. We are using a lot of AI and digital technologies to design our new product, especially in the defence sector.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

The use of AI in product development is sharply reducing the time required to design and launch defence products, improving speed-to-market.

“We are using a lot of AI and digital technologies to design our new product, especially in the defence sector. What normally would take two to three years to make, we are able to make it in less than one year.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

Management is actively exploring expansion opportunities in defence and aerospace while also building internal explosives manufacturing capabilities.

“We are looking at inorganic growth largely in the defence and aerospace sector going forward. We are setting up our own explosives facility.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

The company expects a new technology-led export business to become a meaningful contributor by FY27, reducing dependence on traditional automotive markets.

“Going forward for FY27, it’ll be roughly close to 100 million dollars in terms of exports of components to these companies, which we were not doing before, and I think this will only keep going up. We are trying to build a large technology-based component business going forward.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

Management emphasised that Bharat Forge is consciously diversifying beyond automotive into higher-technology manufacturing segments.

“We don’t want to be dependent only on the automotive market, although that’s a big market for us.”

— Baba Kalyani, Chairman & Managing Director, Bharat Forge

Larsen & Toubro Limited | Large Cap | Engineering & Construction

Larsen & Toubro is a leading Indian multinational engaged in technology, engineering, construction, manufacturing, and financial services. The company executes large-scale turnkey EPC projects and high-tech manufacturing across global markets, particularly in India and the Middle East.

[Concall]

The company maintains a massive 3 trillion rupee order book in the Middle East despite ongoing regional geopolitical tensions. This concentration highlights both the company’s dependency on the region for growth and its proactive management of supply chain risks.

“On the Middle East situation, we would like to clarify that all our project sites are functioning as of today. All our employees and workforce are safe and none of our projects have been cancelled. The Middle East remains a strategically significant market for Larsen & Toubro, and as of March 31, 2026, we have an order book of almost 3 trillion coming from the region. While we do anticipate some near-term impact on execution, primarily due to supply chain constraints, we are working closely with our clients on alternate routes and logistic arrangements to ensure minimal disruption.”

— P. Ramakrishnan, CFO

Project award deferments in the Middle East are subsiding as bidding resumes, and L&T is actively negotiating with clients to mitigate the material increases in logistics and insurance costs.

“While we did observe some deferments in project awards during the period when the conflict was most active, the bidding activity since then has resumed and we do not foresee cancellations of projects in which we are actively participating. In terms of input costs, the most significant impact has been in logistics and insurance, which have increased materially. We engage in active discussions with the clients to seek appropriate relief for such costs.”

— P. Ramakrishnan, CFO

High costs from finishing older projects dragged down margins in the energy division during the final quarter. Management anticipates a recovery in profitability as the portfolio shifts toward newer, more favorably priced contracts.

“The energy segment margin in Q4 FY26 is at 6.5% as compared to 8.2% in Q4 of the previous year. Cost overruns and close-out costs in legacy projects impacted the segment margin. As mentioned in the previous quarter, we expect the margin to improve in this segment after a couple of quarters.”

— P. Ramakrishnan, CFO

L&T is aggressively scaling its real estate business, which saw pre-sales double over the past year. The structural consolidation suggests the company is preparing this segment for a potential future value-unlocking event or independent listing.

“In parallel, the Realty business has also more than doubled its pre-sales to 94 billion in FY26, aided by successful launches in Noida and Panvel. The primary focus of the Realty business was to create a simplified and scalable structure through consolidation of all the group real estate undertakings under a single platform.”

— P. Ramakrishnan, CFO

The company is committing substantial capital to future-tech sectors like green hydrogen and semiconductors to diversify its long-term revenue streams. While these investments are large, they signal a shift toward becoming a technology-led industrial conglomerate.

“Within new businesses over the plan period, we envisage a capital outlay of approximately 50 billion toward industrial electronics, 30 billion into the semiconductor business largely for proprietary IPs, 150 billion in green hydrogen, and around 100 billion toward the data center business. The pace and scale of data center investments may change depending on final partnership structures.”

— P. Ramakrishnan, CFO

L&T is actively managing supply chain risks and increased logistics costs by seeking customer agreement for reimbursements, otherwise slowing project progress, as alternative routes and declining costs offer some relief.

“The biggest risk is the supply chain, but it is continuously getting better. There are more movements now between the GCC countries and some alternate routes have opened up. Of course, the cost is high, so we are taking a very measured approach. If the customer agrees to the increased logistics cost to keep the project progressing, then we proceed. If not, we find other ways and we are carefully calibrating that. We are not going ahead and incurring the cost unless the customer is ready to reimburse; otherwise, we are slowing down and will move the material when the cost comes down.”

— P. Ramakrishnan, CFO

L&T is shifting toward a modular manufacturing model to reduce the complexity and risk of working at overseas sites. This strategy allows them to bid for global projects while keeping high-value engineering and fabrication within their controlled facilities.

“We will try to reduce site intensity, becoming geography agnostic by manufacturing items in our fabrication shops in India and the Middle East and shipping them globally. For example, we handled an EPC contract for a urea plant in Australia where most parts were modularly fabricated in our Kattupalli yard and shipped, with only commissioning work done locally.”

— P. Ramakrishnan, CFO

Management believes the period of margin pressure from old, low-margin energy contracts is finally coming to an end. The conclusion of these ‘legacy’ jobs should lead to visible margin expansion in the energy segment in the coming quarters.

“We have had legacy projects at terminal stages of completion. Most of these are nearly finished or in the handover phase, with only the defects liability period remaining. We believe those projects are concluded and we should not see further cost creeps.”

— P. Ramakrishnan, CFO

L&T is targeting the high-computing data center market by developing AI-enabled facilities for global hyperscalers and quantum computing clients, aiming for 200 MW capacity, rather than just traditional real estate development.

“There are two distinct business models for data centers. One is developing real estate and collecting yields based on tenancy, which we are not excited about. We want our data centers to be AI-enabled, with servers and GPUs to enable high computing. Global hyperscalers and quantum computing organizations would be our clients. The current thinking is to create 200 MW of data center capacity over time.”

— P. Ramakrishnan, CFO

Despite the focus on diversification, L&T remains heavily reliant on the Middle East to meet its double-digit growth targets. This region is expected to remain a primary driver of the company’s order book for the foreseeable future.

“International orders should continue to contribute around 50% of the total. Middle East will continue to be our core market. We cannot provide that level of growth without the Middle East. We are very optimistic about that region.”

— P. Ramakrishnan, CFO

Polycab India Limited | Large Cap | Electrical Equipment

Polycab India is the largest manufacturer of wires and cables in India with a growing presence in the fast-moving electrical goods sector. The company operates an extensive distribution network across India and exports products to over 90 countries globally.

[Concall]

Management is moving forward with a massive investment plan to expand manufacturing capacity while maintaining a very strong cash position. This suggests the company is well-prepared to fund its own growth without needing to take on significant debt.

“We remain on track to execute our planned capex program of 60 billion to 80 billion rupees over the next five years, which will further enhance our capabilities, scale, and innovation. We have also strengthened our balance sheet with net cash increasing to 41.9 billion rupees, reflecting disciplined cash flow management.”

— Shashank Jagani, Head of Strategy and Investor Relations

The vast majority of the company’s investment budget is being funneled back into its core cable business. This focused spending plan aims to cement their market leadership while keeping small portions for developing their consumer goods division.

“Regarding capex focus areas in FY27, per Project Spring guidance, around 90% will go into cable and wire capacity expansion alone. About 5% will go into backward integration and another 3-4% may go into FMEG expansion.”

— Shashank Jagani, Head of Strategy and Investor Relations

The company is rebuilding its sales infrastructure in the U.S. to boost international sales and diversify its revenue away from the domestic market. Investors should watch for increased export contributions to help stabilize earnings during local slowdowns.

“Additionally, we have reestablished our distribution network in the United States, which we believe will enhance our reach and further strengthen our export business over time. EBITDA margin for the wires and cable business stood at 13.1%.”

— Shashank Jagani, Head of Strategy and Investor Relations

The company sees a wide range of industrial and high-tech sectors driving long-term demand for its core products. This broad demand base reduces the risk of being overly dependent on any single industry for growth.

“Sectors like utilities, metals, semiconductors, oil and gas, manufacturing, logistics; all of this is going to convert into strong demand for cable and wires. Also, there are new demand pockets which are yet to fully unfold or we are yet to fully exploit the opportunity there. Areas like defense and data centers are yet to pick up in a big way.”

— Shashank Jagani, Head of Strategy and Investor Relations

The solar products business achieved two-fold year-on-year growth, becoming the largest category in the FMEG portfolio, driven by structural tailwinds.

Polycab’s solar business provides integrated rooftop and distributed solar solutions — including solar cables, inverters, PV modules, and balance-of-system components — leveraging its electrical distribution ecosystem.

“Our solar products business was a standout performer, delivering two-fold year-on-year growth and emerging as the largest category within the FMEG portfolio.”

— Shashank Jagani, Head of Strategy and Investor Relations

Polycab is currently using about three-quarters of its available manufacturing space while simultaneously building more. This strategy ensures they have the physical capacity to meet sudden jumps in demand without losing orders to competitors.

“In terms of capacity utilization, on a full-year basis, we were at mid-70s, around 75%. There is room for growth there, plus we are adding capacity. Looking at our capex guidance, we have already pumped 1,500 crore in this financial year, which will add to our capacity.”

— Shashank Jagani, Head of Strategy and Investor Relations

The company is entering the extra-high-voltage cable market, which is a specialized segment currently reliant on imports. Successfully launching this capacity will allow Polycab to compete for high-value infrastructure projects and improve margins.

“EHV is very much on track. Capacity is expected to come on stream by the end of this calendar year. In FY28, we can see some addition in revenue from EHV because it is a tender-based business and we see a ready market. About 50% of domestic consumption today is coming from imports.”

— Shashank Jagani, Head of Strategy and Investor Relations

Polycab protects itself from supply shortages and cost spikes by manufacturing many of its own raw material compounds. This vertical integration provides a major competitive edge in cost control and supply chain reliability.

“We completely pass on all raw material prices, be it aluminum, copper, or PVC. There has been no challenge. Regarding the availability of XLPE and other compounds, thanks to our backward integration, we typically purchase only raw resins and do compounding in-house.”

— Shashank Jagani, Head of Strategy and Investor Relations

The company was able to quickly adjust its sales prices to match the rising cost of metals like copper and aluminum. This speed in adjusting prices is crucial for maintaining stable profit margins when commodity markets are volatile.

“In the very first fortnight of January, we were able to pass on everything, so we were completely in tandem with the raw material price throughout the quarter. There is nothing we are withholding; we have completely passed it on.”

— Shashank Jagani, Head of Strategy and Investor Relations

High raw material prices, like PVC increasing 60-80% in early March, and geopolitical conflict negatively impacted distributor lifting and primary sales, reflecting broader industry sentiment.

“Our business model is such that 90% of our business happens through channels. The trade sentiment itself, with all the raw material prices going up — even PVC prices went up by 60% to 80% in the first fortnight of March — plus the sentiment from the West Asia conflict, there was definitely some impact in terms of lifting from our distributors.”

— Shashank Jagani, Head of Strategy and Investor Relations

Kyle Chan on China’s industrial power and entrepreneurship

If you’ve been tuning in lately, you’d know we’re hosting a lot more podcasts with experts we admire and read.

We recently spoke to Kyle Chan, one of the sharpest minds we read to understand China - we’ve often featured his insights on The Daily Brief. Our conversation dives deep into the dynamics that shape China’s manufacturing landscape. It goes into the nature of Chinese entrepreneurship, how China’s price wars affect innovation (and vice versa), why China’s policies are far less all-knowing than people assume, and how China wields its manufacturing prowess as a geopolitical power. Do give it a listen!

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Welcome to the 57th 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 8 industries.

Energy

• Reliance Industries

FMCG

• Varun Beverages Limited

Tourism & Hospitality

• Mahindra Holidays & Resorts India Limited

Software Services

• Infosys Limited

Healthcare

• Sun Pharmaceutical Industries Ltd.

Financial Services

• Piramal Finance Ltd

• Bandhan Bank

• Tata Capital

• Bajaj Finance

Metals

• Motherson Sumi Wiring India

• Hind Zinc

Real Estate

• Mindspace Business

Energy

Reliance Industries | Large Cap | Energy

Reliance Industries is India’s largest private sector company with diverse operations in hydrocarbons, refining, petrochemicals, renewables, retail, and digital services. It leads in managing a fully integrated Oil-to-Chemicals portfolio and emphasizes inclusive growth by partnering with various stakeholders.

[Concall]

Revenue per user is naturally rising by about 5% annually as customers upgrade to better data plans on their own. This organic growth provides a steady revenue lift even in periods where the company does not officially raise its phone plan prices.

“So, you should expect some increase in the ARPU even without any tariff increases and we spoke about this 4% to 5% kind of number that we have been observing over the last few quarters.”

— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited

Retail profit margins have been slightly pressured because fast home delivery services cost more to operate than traditional in-store shopping. However, management believes this is necessary to capture a larger share of total consumer spending.

“Now, that is obviously reflected in the margins also. If you have looked at my margins, they have come down a bit because my hyper local deliveries are growing pretty rapidly. Internally, we look at the big box growth from the same box how much I am able to deliver.”

— Dinesh Taluja, CFO & Corporate Development, Reliance Retail

Reliance’s refineries are specifically designed to process heavy, complex crude oils that are often cheaper than standard light oils. The availability of heavy Venezuelan crude allows the company to lower its raw material costs and improve its refining spreads.

“So Venezuelan crude typically tends to be very heavy. It is a very heavy oil, and US of course is lighter crude. Canadian is heavy. That is actually a positive for us.”

— Srinivas Tuttagunta, COO – Refining & Marketing, Reliance Industries Limited

Reliance is aggressively expanding its battery manufacturing capacity to become a global leader outside of China. This large-scale investment positions the company to capture the growing demand for energy storage and electric vehicle batteries.

“On the battery as again, I had mentioned last time that we are now scaling the capacity to 100 gigawatt hours, where the equipment, the production line, equipment orders have already been placed. That effectively makes us one of the largest non-China LFP manufacturer globally.”

— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited

The signing of a massive green ammonia contract with a major global partner validates the commercial potential of Reliance’s new energy business. This move provides a clear path for future revenue as the company transitions toward sustainable fuels.

“We had a very significant event in the last quarter where we have signed probably one of the world’s largest green ammonia supply contract with Samsung C&T. This effectively demonstrates the confidence that the off-takers have in our integrated green energy and green chemicals ecosystem.”

— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited

While high naphtha prices are hurting many Asian chemical producers, Reliance is insulated because most of its raw materials come from other sources like ethane. This structural advantage allows the company to maintain profitability even when global oil prices are highly volatile.

“And of course as I have said earlier, also in these meetings, our feedstock is roughly about 75% of the line comes from non-naphtha sources. So, this situation was pretty good to be situation for us.”

— Amit Chaturvedi, President – Petrochemicals, Reliance Industries Limited

Reliance Retail has reached the 1,000 large-format store mark at a speed that surpasses any other retailer in global history. This rapid scaling demonstrates the company’s aggressive strategy to dominate India’s organized grocery and supermarket sector.

“In our understanding, this is the fastest ever roll out any retailer globally has reached to the milestone of 1000 big box stores. The growth is quite broad-based across categories.”

— Dinesh Taluja, CFO & Corporate Development, Reliance Retail

Individual data usage on the Jio network has reached exceptionally high levels and is projected to keep climbing as AI applications become more common. Higher data consumption typically supports long-term revenue growth and justifies the massive investments made in 5G infrastructure.

“Per capita data consumption increased to 42.3 GB per month, and this continues to see very healthy growth. And we are expecting this to keep growing like this with more use cases coming in now within AI-enabled use cases.”

— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited

Management contrasted the strong macro setup through most of the year with the sudden disruption in March driven by energy markets. This sets the tone for how external shocks impacted performance.

“The first 11 months seemed fairly robust… domestic activity was fairly strong, consumption tailwinds were decent… energy prices were range bound. And then you go into March… almost doubling of prices… the concern for everybody is the supply shock and its impact on industry and consumer confidence… rupee depreciation is also an area of concern.

— V Srikanth, CFO

Despite a reported decline, management emphasized that the operating environment was extremely challenging and numbers understate the disruption.

“Oil-to-Chemicals down 4%… but that number does not capture how difficult the environment was… physical inability to get crude, logistics cost, insurance cost, volatility… and under recoveries on fuel retailing… I am very happy with the quality of performance.”

— V Srikanth, CFO

Rising data usage continues to be a structural tailwind for telecom monetization.

“Total data traffic increased to 241 exabytes for the year… around 66 exabytes for this quarter… that is 31% increase year-on-year… per capita data consumption continues to grow.”

— Anshuman Thakur, Head of Strategy, Jio Platforms

Jio is embedding AI across its network stack, which could improve efficiency and customer experience.

“AI-first network… we have been implementing intelligence, AI automations, energy optimization… we should see good results coming out of these in the next few quarters.”

— Anshuman Thakur

Retail continues to scale strongly, though profitability is impacted by investments in quick commerce.

“We had the highest ever revenues of Rs.98,000 Crores… EBITDA at Rs.6,900 Crores… EBITDA margin at 7.9%… hyperlocal commerce continues to grow steadily.”

— Dinesh Taluja, CFO, Reliance Retail

Quick commerce is seeing exponential growth and driving transaction volumes.

“We had a 30% growth in average daily orders quarter-on-quarter and 300% growth year-on-year… transactions grew 39% for the full year.”

— Dinesh Taluja

Reliance is positioning its retail model differently from pure quick commerce players.

“We do not look at dark store or walk-in store… every store in my network can deliver… ultimately, I am looking at wallet share of the customer… dark stores only fill gaps.”

— Dinesh Taluja

Reliance Consumer Products is scaling rapidly across categories and geographies.

“We closed our revenue of Rs.22,000 Crores… Q4 revenue of Rs.7,350 Crores… both delivered two times growth over last year… categories growing across the board.”

— Ashutosh Goyal, CFO, Reliance Consumer Products

Campa has scaled rapidly to become a significant player in beverages.

“Campa delivered a revenue of Rs.4,700 Crores… making it the fourth largest carbonated soft drink brand in the country in a very short span of time.”

— Ashutosh Goyal

The Strait of Hormuz disruption created one of the biggest supply shocks in recent history.

“Dubai crude has surged to $168… never before kind of a price… totally unprecedented… we have never seen even during earlier crises this kind of shortage.”

— Srinivas Tuttagunta, COO – Refining & Marketing

RIL’s ability to process diverse crude types helped mitigate supply disruptions.

“We have processed more than 200 grades of crude oil… that flexibility stood in good stead… we could source crude from Venezuela, Russia, Brazil, Mexico and keep operations near capacity.”

— Srinivas Tuttagunta, COO – Refining & Marketing

Apart from crude price spikes and logistics disruptions, the downstream business also faced pricing constraints, which further impacted margins. This is important as it shows pressure was not just upstream-driven.

“We also had under-recoveries on fuel retailing because prices could not be fully passed on… so that also added to the pressure on the O2C business during the quarter.”
— V Srikanth, CFO

While revenues grew, ARPU expansion remained constrained due to pricing stability, indicating monetization still has headroom.

“ARPU growth has been moderate because we have not taken tariff increases… growth is largely volume and usage-led.”

— Anshuman Thakur, Head of Strategy, Jio Platforms

Beyond mobility, Jio is scaling home broadband aggressively, which could drive incremental ARPU and stickiness.

“Fixed broadband continues to scale well… and will be a key growth driver going forward.”

— Anshuman Thakur

Operational resilience ensured high utilization even during extreme supply-side disruptions.

“Despite all these disruptions, we were able to operate our refinery at near full capacity.”

— Srinivas Tuttagunta, COO – Refining & Marketing

FMCG

Varun Beverages Limited | Large Cap | Beverages

Varun Beverages is one of the largest franchisees of PepsiCo in the world outside the United States, producing and distributing a wide range of carbonated and non-carbonated drinks. The company operates an extensive manufacturing and distribution network across India and several international markets in Africa and South Asia.

[Concall]

VBL has completed its entry into the South African market by acquiring a major local producer. This expansion allows the company to apply its efficient business model to a new high-potential region for long-term growth.

“We consummated the acquisition of Tiza in South Africa through Bevco, strengthening our manufacturing footprint and route-to-market capabilities in Africa’s largest soft drink market. The acquisition is expected to generate meaningful operational and commercial synergies over time.”

— Ravi Jaipuria, Chairman

While global earnings per case rose, the company saw a small dip in India as they gave customers more product for the same price to attract new buyers. This strategy focuses on gaining a larger share of the market even if it slightly lowers the revenue per bottle in the short term.

“At the consolidated level, net realization per case improved by 1.6% year-over-year, supported by improved realizations in international territories primarily due to favorable currency movement. In India, realization per case declined by a marginal 1.5% primarily due to volume growth initiatives such as upsizing of packs and selected price point launches in target markets to onboard new consumers.”

— Raj Gandhi, President and Whole-Time Director

A significant portion of sales now comes from healthier drink options, aligning the company with modern consumer trends. Despite rising costs globally, the company improved its profit margins by buying raw materials early before prices went up.

“-In line with our focus on healthier offerings, the mix of low-sugar and no-sugar products increased to approximately 63% of consolidated sales volume during the quarter. Gross margins improved by 62 basis points to 55.2%, supported by early stocking of key raw materials despite an inflationary input environment.”

— Raj Gandhi, President and Whole-Time Director

Management is maintaining high inventory levels to protect their international operations from global supply chain risks. This massive stock provides a competitive advantage because they won’t be forced to raise prices as quickly as their rivals.

First of all, in our international markets, our effect on raw material will be practically zero or perhaps a couple of points, because we are well-stocked for this quarter and the next quarter as well. We normally carry six months of inventory internationally. So, our impact will be practically very low, which actually gives us an edge over our competition because I do not think competition carries anywhere close to six months of inventory.”

— Ravi Jaipuria, Chairman

High-margin segments like dairy are growing rapidly and earning three times more per unit than standard soft drinks. This shift toward premium products helps maintain overall profits even when costs for other products rise.

Vivek, in fact, we have premiumized a lot of products. For instance, in our dairy business, which grew by 70%, the realization is 3 times higher than the normal portfolio. So, the focus is to compensate from within the system itself for the major part.”

— Raj Gandhi, President and Whole-Time Director

The company is improving its profitability by shifting production to larger, modern factories and closing older, expensive ones. These structural changes allow them to produce drinks at a much lower cost per bottle as sales volumes rise.

Utilization is definitely helping as volumes go up. We are using the bigger plants more and we have shut down a couple of small, old, high-cost plants. Overall efficiencies and cost-cutting are helping.”

— Ravi Jaipuria, Chairman

Tourism & Hospitality

Mahindra Holidays & Resorts India Limited | Mid Cap | Hotels & Resorts

Mahindra Holidays & Resorts India Limited is a leading player in the leisure hospitality sector, operating vacation ownership memberships under the flagship brand Club Mahindra. The company manages a diverse portfolio of resorts across India and international locations, focusing on family-oriented holiday experiences and domestic tourism.

[Concall]

The company added a record 900 rooms in FY26 and plans to accelerate this expansion by adding over 1,000 keys in the upcoming fiscal year. This aggressive capacity growth supports the management’s long-term vision of scaling the domestic hospitality business.

“If I look at the other measure of growth in the business, I think our network expansion continues at a good pace. We are expanding inventory while focusing on quality. During the year, we added about 900 keys. Our total inventory today is about 6,228 keys. As we go into FY27, we are looking to build on this and we expect more than 1,000 keys to be added in FY27.”

— Manoj Bhat, MD and CEO

The company has fully written down its equity investment in its European subsidiary following continued geopolitical and economic challenges in Finland. While this creates a one-time accounting loss, the company maintains a very strong cash balance to fund domestic operations.

“This quarter, as Manoj mentioned, we have taken an impairment charge of 234 crores towards equity investment in the entity driven by the HCR business outlook. Excluding this one-off charge, our PAT was 55.4 crores. Our total cash position continues to be healthy at about 1,446 crores as of March 31, 2026.”

— Bimal Agarwal, CFO

The launch of the Keystone product has successfully shifted the sales mix toward longer 10-year membership plans. This increase in tenure improves long-term revenue visibility and strengthens the company’s deferred revenue pipeline.

“New sales have jumped up roughly 20%, holding the number we mentioned in December. This is led by a few factors. One is that we are seeing more adoption of the 10-year product. Previously, our largest product was the 5-year plan; now it is the 10-year plan. It is trending in the right direction.”

— Manoj Bhat, MD and CEO

Management is initiating a strategic review of its European operations to explore partnerships or other long-term options. In the interim, they are focusing on fixing credit availability for customers in Finland to revive sales performance.

“Long-term, this is the year we will start looking at strategic options for the business. Any geopolitical improvement in the Ukraine situation would be positive for Finland, but we are not building that into our projections. For FY27, we are addressing the credit situation. We are onboarding new partners to help with sales conversions because many people are not getting loans to buy the product.”

— Manoj Bhat, MD and CEO

The company is deploying AI tools to track guest sentiment and personalize hospitality services in real-time. Improving the guest experience through technology is a key lever for driving higher on-site spending and member upgrades.

“For engagement, we launched an integrated AI sentiment meter in December. It tracks all interactions across channels, allowing our front office and sales staff to personalize offerings. This is helping us create more engaging and curated experiences for our guests.”

— Manoj Bhat, MD and CEO

The company is pursuing a capital-light expansion strategy, with most new room additions being leased rather than owned. This approach allows MHRIL to scale rapidly without heavy debt or depleting its cash reserves for land acquisition.

“No. Only about 25-30% of the room additions will be owned; the balance will come from capital-light models, such as leases. Even this year, we had a normalized cash flow from operations of 300 crores plus. Capital is not a constraint.”

— Manoj Bhat, MD and CEO

Software Services

Infosys Limited | Large Cap | IT Services

Infosys is a global leader in next-generation digital services and consulting, assisting clients in over 50 countries to navigate their digital transformation. The company leverages its AI-first core and cloud-enabling platforms, Topaz and Cobalt, to deliver high-scale business solutions and operational efficiency.

[Concall]

The company achieved significant growth in large deal signings, reaching nearly $15 billion for the full fiscal year. This robust order book suggests strong market demand and provides a high level of revenue visibility for future quarters.

“We had strong growth in financial services, the communications industry, manufacturing industry, and for the Europe geography for the full year. Large deals were strong for the full year; we had 14.9 billion dollars of large deals. This is a growth of 24% over the prior year. For Q4, we were at 3.2 billion dollars, a strong showing for the quarter.”

— Sunil Parekh, CEO

Only 50% of the newly won contracts have reached full execution, leaving significant revenue potential to be realized in the coming year. The company expects profit margins to improve as these deals scale and employee utilization rises toward more optimal levels.

“About half of it [net new deals] has already ramped up, and the other half will ramp through the year, so we will continue to get benefits from that in FY27 as well. Utilization levels today are not optimum; there is room to improve from where we are currently.”

— Management, Leadership Team

Infosys is commanding premium pricing for its specialized AI services, which helps offset the falling prices in standard IT maintenance. This shift toward high-value consulting is critical for the company to maintain its overall profit margins in a competitive market.

“The pricing dynamics are definitely better for some of the AI and transformation-led services. There is a consultative aspect and high expertise involved, so while pricing can be tight, it is certainly better than pure-play commoditized IT services. Where we see challenges is in legacy work or areas where AI-led productivity gains are already well understood by the client, which leads to downward pressure on pricing.”

— Management, Leadership Team

A specific manufacturing client in Europe will create a notable 1% drag on total company growth due to project cancellations and unfavorable deal terms. This specific headwind, combined with an aggressive shift to offshore delivery, is a key factor in the company’s modest growth outlook.

“To repeat what I said earlier, between a 70 basis point and 1% impact will come from the European client, which is a combination of a deal that did not meet our return expectations and ramp-downs due to the challenging macro environment in that sector. As for the reduction in onsite mix, we expect a 40-50 basis point impact based on the exit trajectory, and we believe there could be further improvement there.”

— Management, Leadership Team

Traditional project volumes are no longer the primary driver of growth, as AI automation allows the company to do more with less labor. This transition toward ‘flatter’ volumes suggests that future earnings growth will depend more on specialized pricing rather than simply hiring more people.

“We do see some deflation from existing services, and a large part of that is being offset by new AI-driven services. At this point, volumes for the last year have remained flattish. As we go forward, we continue to see volumes remain flatter or marginally positive, which is baked into our guidance.”

— Management, Leadership Team

Healthcare

Sun Pharmaceutical Industries Ltd. | Large Cap | Pharmaceuticals

Sun Pharmaceutical Industries is a leading Indian multinational pharmaceutical company that specializes in specialty and generic medicines. It maintains a strong global presence across over 100 countries, with a significant focus on therapeutic areas like dermatology and oncology.

[Concall]

Management contrasts the current cash-based Organon deal with the previous stock-funded Ranbaxy acquisition. This highlights a strategy to avoid shareholder dilution while leveraging a strong balance sheet for massive scale.

“At that point in time, we were of course a much smaller company, but at that time we were also buying another company which was almost 80% of our company in terms of size. We did not pay for that acquisition through cash, but we paid for that acquisition through a much more expensive currency; we paid through our stock. The dilution to Sun Pharma shareholders was close to 20%.”

— Dilip Shanghvi, Managing Director

Management acknowledges the significant debt required for the merger but emphasizes that the 2.3x EBITDA ratio remains manageable. Investors should see this as a temporary departure from their conservative fiscal history to fund transformative growth.

“This debt, even though large in terms of overall size, is still going to be 2.3x the combined company EBITDA. We have a focused effort toward finding a way to minimize the debt by finding a way to repay it as early as possible. All of you who have been tracking the company for a long time know that we have been either a low-debt or a significant cash-positive company for a long time.”

— Dilip Shanghvi, Managing Director

The merger grants Sun a strong foothold in China, the world’s second-largest pharma market, which currently generates nearly $1 billion for Organon. This geographical expansion diversifies Sun’s revenue streams away from US and Indian markets.

“Organon’s presence in China is substantial, with FY25 revenues of more than $800 million. They have eight large brands, including Propecia, Follistim, and Zetia. The business is growing despite many generics and being part of the Volume-Based Procurement (VBP) system.”

— Kirti Ganorkar, CEO, India Business

The company plans to proactively manage Organon’s existing high debt burden through strategic refinancing and negotiations with bondholders. Successful debt restructuring will be critical for maintaining the company’s credit rating and financial flexibility.

“Organon has a gross debt of about $8.5 billion and with cash of close to $900 million, the net debt is something we would be looking at refinancing. Our thought is to work with the existing bondholders to see if there is a possibility for a swap.”

— Jayashree Samar, Head of Finance

Financial Services

Piramal Finance Ltd | Mid Cap | NBFC

Piramal Finance is a diversified financial services firm focusing on retail lending, housing finance, and wholesale funding. It operates a wide-reaching network across India, utilizing a tech-enabled platform to serve customers in urban and rural markets.

[Concall]

The credit rating upgrade will significantly reduce interest expenses over the next three-year churn cycle. Lower funding costs should directly improve net interest margins and provide a competitive pricing edge.

“Domestic credit rating upgrades from AA to AA+ have the potential to lower our cost of borrowing by 50-80 basis points once we turn our current borrowings out and replace them with new borrowings. The AA+ rating also offers us access to certain parts of the lending market we could not access before, thus enhancing our ability to continue delivering industry-leading AUM growth.”

— Vikas Singla, CFO

Using AI to keep headcount flat while doubling the loan book demonstrates a highly scalable business model. Investors should view this as a structural improvement in long-term margin potential through technology.

“Our AUM has doubled in this period, whereas our operations staff and headcount has remained roughly flat. This compares well with the best of global elite enterprise-scale companies in terms of token usage for high-frequency agent AI and processing of massive amounts of document data.”

— Anand Piramal, Executive Chairman

The company has proactively tightened lending in sectors vulnerable to Middle Eastern geopolitical tensions. This defensive stance helps mitigate potential spikes in defaults if global supply chains remain disrupted.

“We have originally taken SMEs in the S&B sector as the epicenter of potential vulnerability and impact, but we have since expanded our watch list to include a broader set of sensitive sectors, including travel and logistics, textiles, gems and jewelry, food processing, etc. As of now, risk metrics here all appear contained. Bounce rates in these vulnerable sectors in April have come in at the same levels as March.”

— Jayaram Sridharan, MD and CEO

Massive early repayments in the wholesale book indicate that the underlying real estate projects are highly liquid and successful. This de-risks the balance sheet and provides surplus cash to redeploy into higher-yielding retail segments.

“In fact, due to these significant repayments, almost 50% of the contractual repayments due to us in FY27 have already been paid by our borrowers to us today. While strong rates of repayments continue to be a major growth segment for us, it also highlights that the portfolio is doing very well and is performing well ahead of our underwriting.”

— S. Natkarni, CEO, Wholesale Lending

Increasing the proportion of unsecured loans is a deliberate strategy to hike the overall portfolio yields. If credit costs remain controlled, this shift will be the primary driver of consolidated margin expansion in FY27.

“Regarding the levers on the growth book NIM itself, there are two main factors. One is exactly what you said, which is the product mix on the asset side, specifically an increase in unsecured lending. We have previously guided that we would like unsecured to be about 400-500 basis points larger in our mix compared to where it is right now.”

— Jayaram Sridharan, MD and CEO

The company is moving into higher-quality borrower segments that were previously inaccessible due to higher funding costs. This diversification reduces the overall risk profile of the mortgage book while leveraging the new, lower cost of funds.

“We have already seen signs of this in our high-ticket LAP and mass affluent housing disbursements. Those are more AA+ like businesses, and we have been building that muscle in anticipation. We were purely a mid-prime player in the past; now you will see a bit more of a prime-like portfolio.”

— Jayaram Sridharan, MD and CEO

Management remains open to acquisitions but maintains a disciplined, value-oriented approach to capital allocation. This strategy protects shareholders from the risks of overpaying for growth through expensive, transformational deals.

“We remain quite interested in M&A. Piramal has a DNA of doing mergers and acquisitions. However, we are value-based acquirers. We have limited interest in buying perfect assets at fully priced-in values. We would rather find something that might be a little imperfect but is priced at a value.”

— Jayaram Sridharan, MD and CEO

Management expects the impact of geopolitical disruptions to have a lagging effect on credit quality, potentially appearing in the second quarter. Providing this timeline allows investors to track specific leading indicators like bounce rates for early signs of stress.

“I do not think there was any chance of seeing it in Q4, and I do not expect it in Q1 either. But in Q2, we should watch. July or August is when you might see that outcome. That is why bounce rates are important to watch.”

— Jayaram Sridharan, MD and CEO

The new focus on rural and gold lending branches is highly capital efficient compared to urban expansion. This allows the company to rapidly grow its physical footprint without negatively impacting the overall expense-to-assets ratio.

“A gold branch takes about one-third of the operating expense of a regular urban branch on an annual basis. A rural branch takes about one-tenth of the investment of an urban branch. These categories are much cheaper than our full-service branches.”

— Jayaram Sridharan, MD and CEO

Using one-time gains to aggressively write down assets helps create a cleaner and more conservative balance sheet for the future. This reduces the risk of unexpected negative surprises from the legacy portfolio in subsequent quarters.

“The markdowns we took this quarter were to make good use of the one-time gains we had. We had 1,500 crores in bounty and we wanted to strengthen the balance sheet rather than taking it all through the P&L. Suffice it to say, this helped us clean up the legacy book nicely and created pockets of conservatism.”

— Jayaram Sridharan, MD and CEO

Bandhan Bank | Mid Cap | Private Bank | Asset Quality Recovery & Margin Stability

Bandhan Bank’s latest quarter hints at a stronger comeback than the market expected. With margins improving, key stress areas showing signs of easing, and management sounding confident about the road ahead, the bigger question now is whether this is just a good quarter, or the beginning of a much larger turnaround.

[Reference]

The bank reports a stabilising credit environment, with expectations for loan provision costs to drop significantly in the future. Lowering credit costs is essential for the bank to improve its net earnings and return on equity metrics.

“Credit cost exited Q4 at 2 percent with guidance to improve toward 1.6 to 1.7 percent.”

— Partha Pratim Sengupta, MD & CEO.

The bank has set a clear medium-term profitability target for its return on assets, signalling confidence in its operational efficiency. This outlook provides investors with a concrete benchmark for the bank’s earnings recovery over the next few years.

“ROA guidance remains 1.5 to 1.6 percent exit by FY27.”

— Partha Pratim Sengupta, MD & CEO.

Management is seeing interest margins improve as the bank lowers its cost of borrowing while maintaining better asset quality. This supports stronger core profitability.

“NIM improvement driven by lower cost of funds and better asset quality.”

— Partha Pratim Sengupta, MD & CEO.

Tata Capital | Large Cap | Financial Services

Tata Capital Ltd, the flagship financial arm of the Tata Group, is a leading diversified NBFC. Its core business includes retail, SME, and corporate lending, along with wealth management, insurance distribution, and private equity services.

[Concall]

Management is using artificial intelligence to drastically speed up the loan approval process for small businesses. This automation helps the company handle more business efficiently and should lower operating costs over time.

“Our underwriting assist platform, amongst the first in the industry, has reduced credit memo preparation time from 2 days to 20 minutes in our SME business, thereby improving productivity of the underwriting team by 30%. The adoption rate of underwriting assist platform today stands at 85%.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

The motor finance business intentionally shrank its total loan book to focus on profitability and quality over size. Management expects this division to start growing again soon now that the internal cleanup is finishing.

“The AUM stood at INR25,390 crores, a sequential decline of 4% reflecting our fitness-first approach. Even though positive growth in AUM is lagging by about a quarter, underlying momentum is improving. Disbursements grew 32% sequentially in quarter 4 and we expect this to build as business stabilizes.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

Current global conflicts in West Asia have not yet caused major supply chain disruptions for the company’s business clients. Most borrowers are currently able to pass higher costs to their customers, which protects their ability to repay loans.

“When we talk to clients who are there in the SME or the large corporate side, they have stocks of raw materials and which is helping them tide over this situation. Similarly, they are saying that raw material is available and they are able to produce. There’s been some impact on their cost structures, but as most of them are saying that they are able to pass this on.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

Improving loan performance has given management the confidence to start lending more in high-yield unsecured categories like personal and business loans. This strategic shift is expected to boost the company’s overall interest earnings next year.

“So we’ve seen significant drop which has been happening and that’s the reason we’ve started looking at increasing our disbursements in each of these businesses. We started activating the same post quarter 1 and if you look at those numbers, our disbursements in each of the unsecured businesses, whether it’s personal loans, business loans, or microfinance business, is increasing and that’s an increasing trend in every quarter.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

The company is being extra careful when lending to small and medium businesses that might be affected by global economic shifts. This proactive monitoring helps the company avoid future losses in its SME portfolio.

“In terms of our assessment, we feel that we should be more careful in certain parts of the MSME business and this is where our messaging to our credit team is that you should look at some segments within the MSME and try to understand more, more from the working capital cycle at this point of time and availability of raw material. So our caution as far as impact of the war is there, it’s more on the MSME segment.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

The vehicle financing unit is successfully diversifying by funding more brands outside of Tata Motors. By focusing more on used and smaller commercial vehicles, they are reducing their reliance on the volatile heavy truck market.

“In the Motor Finance business, our non-Tata OEM share in new commercial vehicle disbursements for quarter 4 has reached 26%, reflecting early success in our multi-OEM strategy. We are increasing exposure to used commercial vehicles and small and mid-commercial vehicles while reducing our heavy commercial vehicle concentration.”

— Rajiv Sabharwal, Managing Director and Chief Executive Officer

Bajaj Finance | Large Cap | Financial Services

Bajaj Finance is a financial services company specializing in lending, partnerships, payments, and deposits. With a diverse portfolio catering to retail, SMEs, and commercial clients in urban and rural India, the company also offers various financial products.

[Concall]

After a period of rapid post-COVID expansion and subsequent adjustment, management views the current state as a sustainable ‘cruise’ phase. Investors can expect a more predictable, high-ROE growth profile moving forward as the business matures.

“Over the last 18 months, we have calibrated those responses. From here, you should see us in a cruise mode. At 5,10,000 crores, we are a significant player with a fiduciary responsibility to remain resilient. We intend to deliver a 20-22% ROE and a 22-24% balance sheet growth.”

— Management, Executive Leadership

The gold loan segment is being aggressively scaled and is expected to triple its contribution to the overall loan book within the next year. This diversification into secured, high-margin lending provides a buffer against volatility in unsecured retail segments.

“The gold loan portfolio continued to witness strong momentum, growing by 115%. That business now contributes 3.5% of overall AUM. We foresee the gold loan portfolio probably crossing 10% of total AUM by FY27.”

— Rajeev Jain, Vice Chairman and Managing Director

Management intentionally slowed MSME lending over the past year to manage risk and clean up the portfolio. The projected return to double-digit growth by mid-FY27 suggests that management now views the segment’s credit environment as stabilizing.

“MSME continued to see muted growth, growing by only 6% on account of a set of proactive risk actions we have been taking since Q2 FY26. We expect it should return to double-digit growth or the company growth momentum between Q2 and Q3 of FY27.”

— Rajeev Jain, Vice Chairman and Managing Director

A small, legacy vehicle financing portfolio has been disproportionately hurting the company’s asset quality metrics. The planned run-down of this book by late 2026 should provide an automatic tailwind for improved credit performance and lower overall provisioning.

“The captive two-wheeler and three-wheeler business now contributes less than 1% of AUM, but in Q4 it accounted for 13% of GNPA and 5% of overall credit cost. This book will wind down to less than 1,500 crores by September 2026, which will lead to further improvement in GNPA and lower credit costs for FY27.”

— Rajeev Jain, Vice Chairman and Managing Director

The company is transitioning nearly all customer interactions to automated AI interfaces to drive operational leverage. This shift is designed to dramatically lower the cost of servicing millions of customers while maintaining high engagement levels.

“On customer engagement, 27 AI voice and text bots are now live, and all customer engagement will move into a bot interface by June 2026. Any communication across any channel, whether for sales, service, or debt management, will have a text bot embedded in it.”

— Rajeev Jain, Vice Chairman and Managing Director

Management is seeing immediate cost benefits from AI deployment, specifically in call center operations where bots are significantly cheaper than human agents. These efficiency gains directly support the goal of reducing the opex-to-NTI ratio over time.

“Consumers and employees will start to experience the benefits this year. An AI call center agent is one-third of the cost. We had 5,000 outbound voice agents, and we have optimized that; 30% are now AI voice agents.”

— Management, Executive Leadership

A large portion of new loan volume is coming from the existing customer base, which lowers the cost of acquisition and provides more reliable risk profiles. This internal ecosystem is a key competitive moat that drives superior economics compared to pure-play lenders.

“For the open architecture two-wheeler business, 50% of customers are existing customers. For new car financing, about 43% to 45% of volume comes from existing customers. Given our 120 million customer franchise, focusing on the existing base provides better risk management and operating leverage.”

— Management, Executive Leadership

AI is already delivering tangible operational leverage, especially in loan processing capacity.

“During the peak of Diwali, we processed 600,000 loans in a single day… without AI our capacity was 100,000… next Diwali we might process close to a million loans in a day.”

— Management

Metals

Motherson Sumi Wiring India | Mid Cap | Mixed Q4, Copper-Led Margin Pressure

Motherson Sumi Wiring India is a leading manufacturer of automotive wiring harnesses and electrical distribution systems, supplying major OEMs across ICE, EV, hybrid, and CNG platforms. The company delivered healthy revenue growth in Q4, but margins remained under pressure due to elevated copper prices and forex impact. Management believes this pressure is temporary, but the key question is whether margin recovery will meaningfully improve if commodity costs stay elevated.

[Reference]

Short-term costs like copper price spikes and currency fluctuations reduced the company’s profit margins this quarter. These pressures are expected to be temporary as the company will recover these costs from customers over the coming months.

“Margins were impacted mainly by temporary copper price increases and forex mix. Copper cost impact is expected to be offset over the next 3 to 6 months through customer pass-through arrangements.”

— Anurag Gahlot, COO, Motherson Sumi Wiring

The company has contractual agreements to pass on raw material price increases to clients with a slight time lag. This structure protects the long-term earnings potential of the core business despite short-term volatility in metal prices.

“Copper cost impact is expected to be offset over the next 3 to 6 months through customer pass-through arrangements. Management remains confident that the underlying profitability of the core business remains stable.”

— Anurag Gahlot, COO, Motherson Sumi Wiring

New manufacturing facilities are currently increasing production levels to meet market demand. As these plants reach higher capacity utilization, the resulting efficiency gains will likely support overall margin improvement.

“Greenfield plants are ramping up and management expects margin improvement as volumes increase. Management remains confident that the underlying profitability of the core business remains stable.”

— Anurag Gahlot, COO, Motherson Sumi Wiring

Electric vehicles and hybrid models now make up nearly nine percent of the company’s sales. Since these vehicles require more complex and valuable wiring systems, this shift improves revenue potential per vehicle sold.

“EV contribution stands near 8.5 percent of Q4 revenue with management highlighting EV and hybrid platforms as content accretive. This contribution is expected to grow as more platforms launch.”

— Anurag Gahlot, COO, Motherson Sumi Wiring

Leadership believes the fundamental drivers of the business and profit margins remain intact. This suggests recent financial headwinds are temporary rather than structural.

“Management remains confident that the underlying profitability of the core business remains stable. The company continues to see strong demand across various automotive segments.”

— Anurag Gahlot, COO, Motherson Sumi Wiring

Hind Zinc | Large Cap | Metals

Hindustan Zinc, a Vedanta Group company, is the world’s largest integrated zinc producer and a top global silver producer. It excels in mining critical minerals and metals with a diversified portfolio, known for operational excellence, innovation, and sustainability. The company integrates mining to marketing, ensuring efficiency and high-quality zinc, lead, silver, and value-added products.

[Concall]

Management is actively diversifying the business by entering the critical minerals segment with specific projects for potash and rare earths. This expansion reduces the company’s dependence on zinc and lead while tapping into high-growth sectors like energy transition.

“On our journey to becoming a multi-metal enterprise, we have secured three critical mineral blocks: potash, tungsten, and rare earths. We have established clear timelines with work now underway.”

— Arun Misra, Chief Executive Officer

Hindustan Zinc achieved its lowest quarterly production cost in years due to internal efficiency and better pricing for by-products. Maintaining a low-cost structure ensures that the company remains highly profitable even if global metal prices face future volatility.

“On the cost front, despite a volatile geopolitical environment, we achieved the lowest quarterly zinc cost of production excluding royalty since underground transition at $903 per ton, reflecting a decline of 9.0% year-on-year and 4.0% quarter-on-quarter. The reduction was driven by a combination of factors: lower power cost, improved by-product realization, and operating leverage benefits from increased volume.”

— Arun Misra, Chief Executive Officer

Management has locked in specific prices for a portion of their 2027 production to protect against market price drops. This hedging strategy provides a level of earnings certainty for investors regardless of short-term price swings in the global market.

“For the Q1, for the zinc, it is a hedge at 20 KT spread between the April to June at a average price of $3,100, and silver is hedged 25 tons at a average price of $57. For the full year FY27, 71 KT is hedged at an average price of $3,225 per ton and silver is hedged at 59 tons at a average price of $60 per troy ounce.”

— Sandeep Modi, Chief Financial Officer

Management is using a flexible production strategy that allows them to prioritize the most profitable metal based on current market prices. This ability to shift focus between zinc, lead, and silver helps protect margins when individual commodity prices are volatile.

“And if the lead metal prices fall while zinc prices are up, which happened last year, then we’ll tilt our production towards more of zinc, less of lead. And we will sell the lead MIC which is made surplus this way. And then produce silver whatever is possible through the zinc maximization route at the same time recover silver through the lead MIC sale.”

— Arun Misra, Chief Executive Officer

The shift toward renewable energy is not just for sustainability but is a core part of the company’s cost-reduction strategy. Moving to 70% renewable power could permanently lower production costs by $25 per ton, making the company even more competitive.

“So we earlier said that every 2% renewable energy increase will have a $1 cost reduction. We still stand by it given the long-term coal prices. So if we move from 20% to 70%, we can see the further potential of $25 per ton cost reduction.”

— Sandeep Modi, Chief Financial Officer

The company is choosing to keep most of its silver production unhedged to benefit from potential price increases. This strategy reflects management’s belief in strong silver demand and their comfort with existing high profit margins.

“Given that 58%, 59% kind of EBITDA margin of the company, we believe that and silver being a by-product, we believe that it’s not worthwhile to experiment and do the hedging beyond 10%. And every company has a philosophy. Either you have the Indian counterparts in the other metal business who has the 40% to 60% hedge for the many of the quarters.”

— Sandeep Modi, Chief Financial Officer

Real Estate

Mindspace Business | Micro Cap | REIT

Mindspace Business Parks REIT (MINDSPACE) is a leading Indian commercial real estate investment trust with a portfolio of over million sq. ft. of office space, reporting a strong 95.7% committed occupancy as of March 2026. It focuses on Grade-A business parks in key markets like Mumbai, Pune, Hyderabad, and Chennai.

[Concall]

Management pushed back against the “AI reduces office demand” narrative, highlighting empirical evidence of growth.

“The AI narrative has been running for the last 3 years… office demand has grown 18%, 16%, 15% year-on-year… There is no evidence of mass vacancy increases… AI increases productivity… productivity drives growth… and talent needs space.”

— Ramesh Nair, CEO & Managing Director

AI-driven work is increasing demand for premium office spaces, aligning with Mindspace’s portfolio positioning.

“AI will accelerate the flight to quality… companies will seek upgraded spaces, stronger amenities, and better sustainability credentials… for a portfolio like ours… this shift works firmly in our favor.”

— Ramesh Nair, CEO & Managing Director

India remains a key destination for global companies, supporting long-term office demand.

“Rupee depreciation has made India more attractive to GCCs… in dollar terms, Indian office rents have effectively held flat while infrastructure and talent have strengthened.”

— Management

Macroeconomic pressures are increasing the cost of construction materials across the board. While the company is well-positioned, these rising costs and geopolitical tensions have led to slightly slower lease closures in the short term.

“Oil-driven inflation and rising input costs are real. Steel is up 2%, RMC and cement is up 8%, paints are up 15%, tiles are up 10%, and PVC pipes are up 16%. We observed some slowdown in decision-making on a few deals.”

— Ramesh Nair, CEO and MD

The REIT is expanding into data centers, which could become a meaningful revenue driver.

“We are the only REIT with data centers in our portfolio… once complete, our data center portfolio will span approximately 1.7 million square feet.”

— Management

Significant pre-leasing ensures future occupancy and rental growth.

“We have pre-leased 2 million square feet… including 0.8 million to a healthcare GCC at ₹110 and 0.7 million at ₹121 per square foot.”

— Management

Occupancy has reached historic highs, indicating tight supply-demand dynamics.

“Committed occupancy reached 95.7%, the highest we have ever reported since listing… up from 93% in FY25.”

— Management

While macro risks are causing delays in leasing decisions, underlying demand remains intact.

“We observed some slowdown in decision-making on a few deals… Global headwinds and travel disruptions may delay some transactions in the near term… When the pent-up demand releases, we are positioned to capture it.”

— Management

Industry data points to strong structural demand for office spaces, especially from GCCs and global firms.

“India’s office market posted a quarterly record 21.5 million square feet of gross leasing… GCCs expanded their footprint by 43% year-on-year… Pan-India vacancy dropped to a 5-year low of 14.7%.”

— Management

By reinvesting in property upgrades, the REIT ensures that tenants are less likely to move and more willing to pay higher rents upon renewal. This cycle of building and upgrading is central to their strategy for long-term compounding of returns.

“Modernized assets drive stickiness, stickiness drives renewals, and renewals drive rental growth. We are not just building parks, we are building ecosystems where businesses grow and people belong.”

— Ramesh Nair, CEO and MD

Because market rents have risen so quickly, lease expiries are currently viewed as a positive development that allows for significant price hikes. This situation has enabled the company to achieve very high rental spreads during the recent quarter.

“Right now, given where the market is today, we are not complaining about tenants exiting because it is giving us a massive upside; otherwise, we would not be achieving the 40% mark-to-market that we did this quarter.”

— Ramesh Nair, CEO and MD

While the extreme rental growth of the past year may moderate due to corporate budget limits, the lack of available space in Hyderabad continues to support high prices. This supply crunch ensures that the company’s existing assets in the city remain highly valuable.

“We definitely see rentals going up in the next year, though not by the 25% we saw last year because companies will have their budget restrictions. But regarding the Hyderabad market—I wish we had more space to give. Everything is gone.”

— Ramesh Nair, CEO and MD

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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

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.

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Hi, I’m Kashish and I work on Plotlines.

It builds on Chatter, but with a more structured lens. Instead of looking at management commentary from earning concalls in isolation, we track a single theme across companies and over time to connect the dots. The goal is to piece together how narratives evolve, and surface the deeper structural shifts shaping industries.

Today, we cover evolution of India’s E-waste rules.

Every year, India throws away the equivalent of a small mountain of electronics. In FY 2024–25, the Central Pollution Control Board counted 13.97 lakh tonnes of e-waste — discarded phones, televisions, refrigerators, cables, batteries — generated across the country. That’s up from 7.08 lakh tonnes in 2017–18. Almost double in seven years. By total volume, India is now the third-largest e-waste generator in the world, behind only China and the United States.

The rules to handle this have technically existed since 2012. But having rules and enforcing them have been, for most of that time, entirely different propositions. The story of India’s e-waste framework is the story of a government that kept tightening its grip — through mandatory targets, customs enforcement, a digital certificate trading platform, and now a minimum floor price contested in court — until the industry, reluctantly, started moving. What follows is that story, told through the people building and paying for the new system.

The Paper Tiger (2012–2016)

The first iteration of India’s e-waste rules arrived in 2012 and operated on an optimistic principle: that producers of electronics would voluntarily take responsibility for what happened to their products at end of life.

It did not work.

“In India, the EPR policy first came into picture in 2012 where it was voluntarily compliance. Not taken very seriously, right, so no producer essentially wanted to do anything.”

— Nitin Gupta, Founder and CEO, Attero Recycling | Aug 2025

Extended Producer Responsibility is the idea that the company which profits from selling a product should bear responsibility for what happens to it when the consumer is done. As a principle, it’s intuitive. As a regulatory mechanism, it requires enforcement. The 2012 rules provided the principle without the enforcement.

Four years later, the government upgraded from voluntary to mandatory.

“And then the government actually made it mandatory compliance in 2016. Still nobody did anything...”

— Nitin Gupta, Founder and CEO, Attero Recycling | Aug 2025

The 2016 rules set escalating collection targets — 10% of historical sales in the first year, stepping up to 70% by 2022–23. But the rules had a structural gap: verification. Producers self-reported their compliance. Penalties were modest. The informal sector — hundreds of thousands of waste pickers, kabadiwalas, and crude dismantling units operating across Indian cities — continued to handle the overwhelming majority of e-waste, exactly as it always had.

Enforcement finds its teeth (2016–2022)

The breakthrough came not from environmental enforcement but from trade logistics.

“...then the checking of EPR compliance was handed over to customs. So as an OEM, you could not import a product or a subassembly or a component without EPR compliance. That’s when a lot of OEMs started taking it seriously...”

— Nitin Gupta, Founder and CEO, Attero Recycling | Aug 2025

India’s electronics industry runs on imported components. A company that couldn’t clear customs couldn’t sell. Tying EPR compliance to import clearance was the enforcement lever that actually worked — because the cost of non-compliance was no longer an abstract penalty. It was a supply chain shutdown.

The rules continued tightening. In 2019, the scope of products covered under EPR expanded from 21 categories to 30. The E-Waste Management Rules 2022 — notified in November 2022, effective April 1, 2023 — expanded that further to over 100 product categories, adding tablets, GPS devices, modems, air purifiers, medical equipment, solar PV panels and modules, and laboratory instruments, among others.

“So back in 2019 it was 30 products covered under EPR, then they made it 100 products. Then they introduced a platform for trading of these EPR certificates as well and now they’ve introduced the minimum floor pricing right which is in contention in the courts because some OEMs have opposed it.”

— Nitin Gupta, Founder and CEO, Attero Recycling | Aug 2025

The trajectory is worth pausing on: from 21 to 30 to 100+ products; from voluntary to mandatory to customs-enforced; from self-reporting to a digital certificate trading market with a government-set price floor. Each step was a tightening of the system.

What the rules actually ask for?

Before getting into how industry has responded, it’s worth explaining the mechanics — because EPR certificates are doing a lot of work in this story and the concept is less intuitive than it sounds.

An EPR certificate is proof that a certain quantity of e-waste has been collected and scientifically processed by an authorized recycler. Under the E-Waste Management Rules 2022, every producer — any company that manufactures or imports electronics — must meet annual recycling targets based on what it sold in prior years. The current target is 60% of historical sales volume, stepping up to 70% by FY 2025–26 and 80% by FY 2027–28.

A producer can meet its target one of two ways: run its own collection and recycling program, or buy EPR certificates from authorized recyclers who have already done the processing. This certificate-trading mechanism transforms a compliance obligation into a market. CPCB launched its EPR Electronic Trading and Settlement Platform (EPRETP) to host it. Certificates are denominated in kilograms, priced by category, and valid for two years.

As of 2024–25, EPR certificate prices for e-waste range from roughly ₹10 to ₹50 per kilogram, with a minimum floor price of ₹22/kg established by government amendment in March 2024.

The floor price is the live controversy in the system. The logic: without a price floor, certificates could collapse toward zero, making it economically irrational for formal recyclers to invest in infrastructure. The counterargument, advanced by several of the country’s largest electronics brands, is that the floor distorts the market and constitutes an unfair financial burden.

In April 2025, a group of major OEMs — Daikin, Samsung, LG, Havells, and Voltas among them — challenged the floor pricing mechanism in the Delhi High Court. The case is ongoing. It captures the central tension in the system: the government is trying to make formal recycling economically viable; the brands whose products create the waste are pushing back on what that costs them.

What compliance looks like in practice?

For appliance and consumer electronics brands, the shift from theoretical compliance to actual accounting showed up in earnings calls from around FY 2023–24 — roughly when CPCB moved from accepting broad industry data to issuing specific, company-level targets.

“You would be aware that the government had brought out the E-waste regulation particularly consumer durables a few years back but at that time there was no clarity on how that should be treated. Now the government / CPCB has come out with a lot of clarity and we all the industry players have submitted all sort of data so they have come out with the specific number which every company needs to comply with.”

— Rajiv Goel, Executive Director, Havells India | Q3 FY24

This is the moment the rules became real for companies. Until CPCB issued company-specific numbers, the obligation existed but the liability was undefined. Once defined, it had to be provisioned. And the quantum is not small — nor is it stable.

Bajaj Electricals, whose lighting and appliance business generates significant e-waste obligation under the Consumer Electrical and Electronics Equipment category, gave a clean accounting of where it stands.

“So EPR for this year is about Rs. 9.5 crores and last year also was similar. Going forward next year it will be a charge of about Rs. 18 crores.”

— E.C. Prasad, CFO, Bajaj Electricals | Q4 FY25

The cost is essentially doubling. And this isn’t an anomaly — it’s arithmetic. EPR targets step up every two years; the compliance cost scales accordingly. For Havells, a company with broader product categories and a larger sales base, EPR has graduated into a named line item alongside commodity inflation and energy efficiency regulation changes.

“I think it is consumed, and we are hoping for better contribution margins. It’s not comparable as against last year because EPR liabilities have also increased in the current year, which obviously when the season comes, when we are in a position to pass on that price to the market, we’ll have to do that. But right now, because of low season, we’ve also been restrained to do so.”

— Anil Rai Gupta, Chairman and MD, Havells India | Q2 FY26

“We remain optimistic about a gradual recovery in demand. However, we are cognizant of the industry headwinds such as cost increases on account of commodity inflation, BEE changes, e-waste, etc. We are in the process of taking calibrated price hikes and enhancing operational efficiency.”

— Anil Rai Gupta, Chairman and MD, Havells India | Q3 FY26

The ‘BEE changes’ reference is to Bureau of Energy Efficiency star rating upgrades for appliances, which impose their own compliance costs. Companies are now managing a convergence of regulatory cost pressures — and e-waste is clearly one of them. The costs will eventually move into product prices. The question is timing.

Amara Raja’s ₹700 Crore bet

The producer-side response of absorbing costs, buying EPR certificates and timing price increases is one approach to the new compliance reality. Amara Raja Energy & Mobility chose a different one.

Battery companies operate under a parallel framework to the E-Waste Rules: the Battery Waste Management Rules 2022, notified in August 2022 and effective from February 2023. The structure mirrors the e-waste system — EPR registration, collection targets, certificate trading — but the targets are steeper. For automotive and EV batteries, the requirement is 90% collection and recycling by FY 2026–27, with minimum recycled content mandates in new batteries from FY 2027–28 onwards.

Amara Raja is one of India’s two largest lead-acid battery manufacturers. For a company whose entire business runs on lead — buying it, forming it into batteries, selling those batteries, and now bearing regulatory responsibility for what happens when they die — in-house recycling isn’t just a compliance option. It’s a raw material strategy.

“The refining operations... are expected to commence the commercial production in the month of September or October. And then we’ll be using that lead coming from that factory for our purposes. And the battery breaking operations are expected to commence the production, maybe about four, five months after the refining operations are completed.”

— Y. Delli Babu, CFO, Amara Raja Energy & Mobility | Q1 FY25

Lead-acid battery recycling runs in two stages: battery breaking — shredding spent batteries to separate lead plates, plastic casings, and acid — and lead refining, which smelts the recovered material into usable metal. Amara Raja’s facility, called ARCSPL, was being built in phases. Refining came first; battery breaking would follow. This sequencing matters because a refinery without its own breaking operation still buys pre-processed lead from the market. Only once both stages are integrated does the company control the full loop.

The investment rationale is direct.

“...once we do the entire 1,50,000 tons, that is what is being envisaged in that particular location, that should give us close to about 30% of our overall requirement from our own internal recycling sources. So that’s the objective of that investment.”

— Y. Delli Babu, CFO, Amara Raja Energy & Mobility | Q1 FY25

Phase 1 is approximately ₹500 crore; the board approved an additional ₹200 crore for Phase 2. At full scale, the plant would supply 30% of Amara Raja’s lead from recycled material — insulating that portion of its raw material from London Metal Exchange (LME) price volatility and from the margins lost when sending scrap to outside smelters.

By Q3 FY25, the refining phase had commenced commercial operations.

“Then on the recycling plant in this quarter, we have commenced the 1st Phase of commercial operations of the refining capacity of 50,000 tons, we have started the commercial operations in the current quarter, and it will continue to operate at a full capacity for the next quarter as well. And then we are expecting to start the smelting operations, that is the battery breaking operations, sometime towards the end of Q1 of next financial year.”

— Y. Delli Babu, CFO, Amara Raja Energy & Mobility | Q3 FY25

Then came the harder math.

“Amara Raja is running a battery collection program over a period of years. And today, we are able to collect 75% to 80% of the batteries sold. As per the BWMR regulations from the current financial year, we have an obligation to collect 90% of the batteries sold 3 years ago. This percentage was 70% till last financial year, and we met our obligations.”

— Swajitha Rapeti, Head, Corporate Finance, Amara Raja Energy & Mobility | Q2 FY26

A 10–15% shortfall in collection means buying EPR certificates. And buying EPR certificates means provisioning for a cost that is uncertain today and likely to rise.

“We are also buying our EPR credit wherever there is a shortfall, and we anticipate the demand for this EPR certificate may go up in future. Hence, on a prudent basis, we have provided for EPR credit cost in our books based on our revised estimates on scrap collection program. Going forward, as we ramp up our collections, provided the scrap recycling price is competitive with the LME rates, these provisions may come down or even may not be required.”

— Swajitha Rapeti, Head, Corporate Finance, Amara Raja Energy & Mobility | Q2 FY26

The clause ‘provided the scrap recycling price is competitive with the LME rates’ contains the whole economics of formal battery recycling in one sentence — and it’s worth unpacking, because it explains why regulation alone can’t fix the supply problem.

The LME — London Metal Exchange — is the global price benchmark for industrial metals. Lead trades on the LME the same way oil trades on Brent: it sets the reference price that every buyer and seller in the world uses to negotiate. When Amara Raja buys lead as a raw material, it pays something close to LME spot. When it processes scrap through ARCSPL, the value of the lead it recovers is also measured against LME. So the economics of recycling are simple: if your cost to process scrap into usable lead is lower than the LME price, recycling makes sense. If it’s higher, you’re better off just buying virgin lead at market price.

The problem is what this does to scrap collection. A formal recycler — paying GST, running compliant acid disposal, employing workers with safety equipment, maintaining regulatory certifications — carries significant overhead. That overhead limits how much it can afford to pay for used batteries at the collection point and still turn a profit after processing. The informal sector carries almost none of these costs. No GST. No compliant disposal. Often no safety equipment at all. Their lighter cost structure means they can offer battery sellers — auto repair shops, retailers, consumers — a higher price for scrap than formal recyclers can while still making money.

This is the outbidding problem. Batteries flow to whoever pays more. In most parts of India, that is still the informal operator. Amara Raja’s collection program falls short because the scrap it needs is being outbid at the source. The gap then has to be closed with EPR certificate purchases — which is a financial cost, not a recycling solution.

Amara Raja’s own recycling plant partially changes the equation. When you process your own scrap, you capture the full value of recovery without paying a middleman. You also have more control over what you pay to collect — because you’re not relying on an external recycler’s pricing. The question, as Delli Babu frames it, is whether the plant’s recovery ratios are good enough to make in-house processing cheaper than buying lead at LME prices. That’s the real test still ahead.

That said, by Q3 FY26, the recycling plant was contributing to margins — modestly, but measurably.

“Our lead recycling plant led to a margin accretion of around 0.6% at EBITDA level during the quarter. At a LAB level, we are able to sustain the operating margins of about 12% despite cost pressures at raw material levels.”

— Swajitha Rapeti, Head, Corporate Finance, Amara Raja Energy & Mobility | Q3 FY26

The battery-breaking phase — when Amara Raja begins shredding its own scrap rather than buying pre-processed material — was expected in Q4 FY26.

“The battery breaking is going to start from Q4. And as Swajitha has articulated earlier, the refining operations are providing that additional margin comfort at this point of time. But we hope after the battery breaking gets into full shape, I think we should see some mitigation of the lead cost that we are currently incurring. But of course, recycling operations are always kind of lower margin business. So we hope with the technology, what we have put in place, our recovery ratios will be better, and then we’ll be able to improve our overall operating margins for the lead acid business.”

— Y. Delli Babu, CFO, Amara Raja Energy & Mobility | Q3 FY26

The last sentence is an important acknowledgment. Recycling is structurally a lower-margin business than manufacturing. The economics work through volume, through recovery ratios — how much usable metal you can extract from each kilogram of scrap — and through the avoided cost of buying virgin material at market prices. This is a margin improvement story, not a margin transformation.

The informal sector refuses to die

For all the progress on the formal side — certificate trading, customs enforcement, company-level EPR targets — the informal sector remains the dominant physical reality.

“...four years ago 99% of e-waste was being recycled in the informal sector and 1% in the formal sector. Today that number is 75% in the informal sector and 25% in the formal sector. That shift is happening...”

— Nitin Gupta, Founder and CEO, Attero Recycling | Nov 2024

Moving from 1% to 25% formal in four years is real progress. It is also a reminder of how far the system has to go. Studies have found that 76% of workers in informal e-waste units suffer from respiratory ailments. An estimated 4,00,000 to 5,00,000 children between ages 10 and 15 are engaged in e-waste handling across India. They work with lead, mercury, cadmium, and arsenic, typically with no protective equipment, in conditions that cause permanent health consequences.

The informal sector persists not because of ignorance of the rules but because of a structural economic advantage. Informal operators pay cash, carry no GST overhead, have no compliance costs, and can outbid formal recyclers for scrap at the street level. The 18% GST on e-waste and metal byproducts falls only on registered businesses — giving the informal sector an embedded cost advantage before any other factor enters the calculation. The minimum EPR floor price of ₹22/kg was partly designed to help formal recyclers compete; informal operators aren’t bound by it.

“Indian policy today is good from a regulation standpoint on EPR angle which is basically shifting the industry from informal to formal, but there has to be a lot of emphasis on capacity creation. There’s a lot of emphasis on sustainability and critical minerals aspect and probably a lot more financing is required for the sector to be able to develop the capacity and the speed that the capacity needs to develop.”

— Nitin Gupta, Founder and CEO, Attero Recycling | Nov 2024

The ask from the formal recycling industry isn’t a change in tax rates. It’s a structural fix to make the market traceable.

“Majority of the supply chain is shifting from informal to formal, there has to be some sort of GST rationalization that is required here and not because of rates. In the metal scrap industry or e-waste or lithium battery, the government should introduce a reverse charge mechanism. We are not saying change the tax rate of stuff but bring in RCM for better transparency in the sector.”

— Nitin Gupta, Founder and CEO, Attero Recycling | Nov 2024

A note on what Reverse Charge Mechanism would actually do here — because it sounds technical but the logic is simple.

Start with how GST normally works. When a kabadiwala sells scrap batteries to a recycler, the kabadiwala is supposed to collect 18% GST from the buyer and remit it to the government. But the kabadiwala is almost certainly not GST-registered. He’s a street-level collector working in cash — there are hundreds of thousands like him across India. Enforcing GST registration at that level is practically impossible. So in practice, the transaction happens with no tax collected, no receipt issued, and no record of it anywhere. The e-waste just moves and disappears into the informal system.

Reverse Charge Mechanism flips who is responsible. Under RCM, the buyer — in this case, the registered formal recycler — pays the GST directly to the government, instead of collecting it from the seller. The kabadiwala doesn’t need to be GST-registered. The formal recycler, who is already in the system, simply includes the purchase in their GST return and pays the tax on it.

Here’s what that changes: every time Attero or Amara Raja buys scrap from any source — registered or not — the purchase becomes a line in their GST filing. CPCB can then see, at any point, exactly how much material is flowing through the formal recycling system, where it’s coming from, and at what volumes. Today, none of that is visible. The informal supply chain leaves no paper trail.

Crucially, the total amount of tax paid doesn’t change — RCM is not a rate hike. The economic cost of the transaction stays the same. What changes is that it becomes legible. This matters enormously for EPR compliance, because right now the government cannot reliably verify whether the recycling claimed on EPR certificates actually happened. RCM would attach a paper trail to every purchase at the point where the informal supply chain meets the formal one — which is the only point where it’s practical to enforce. That the formal sector has been asking for this for years, while the government hasn’t acted, says something about how low administrative traceability sits on the priority list.

The urban mine

India’s e-waste rules were designed primarily as an environmental compliance framework. They’re increasingly becoming something else: a resource security mechanism.

India has 100% import dependency on several critical minerals — lithium, cobalt, nickel — that underpin the EV and electronics supply chains it is simultaneously trying to build. China dominates global rare earth supply and, as of 2025, has imposed export restrictions on several of them. Every tonne of e-waste processed formally is a tonne that partially offsets that dependency.

“The government of India is also considering a significant sort of incentive mechanism for incentivizing the rare earth industry in India to ensure that India becomes self-reliant on the rare earth material supply chain and is not dependent on China. So from that perspective, we will definitely benefit — as the industry will benefit — from the current geopolitical shifts that China has announced.”

— Nitin Gupta, CEO, Attero Recycling | Q1 FY26

A printed circuit board contains roughly 0.02–0.20% gold, 0.01–0.45% silver, and trace amounts of palladium and platinum. The value embedded in India’s 14 million tonnes of annual e-waste is estimated at approximately USD 6 billion — most of which is currently being captured by informal operators through crude acid-bath processes, or exported as raw scrap to processors elsewhere.

The formal sector’s response has been to build digital supply chains capable of competing with informal networks on transparency and traceability, if not always on price.

“Over the last few quarters we have very successfully transitioned our entire supply chain to a complete digital supply chain based on an AI-based pricing engine. Our supply basically is through Metal Mundy which is an online aggregator collection network — completely digital, completely transparent and traceable.”

— Nitin Gupta, CEO, Attero Recycling | Q1 FY26

Attero claims over 30% market share in the EPR certificate market — more than three times its nearest competitor. That concentration reflects how new and fragile the formal sector still is. A market where one player holds 30%+ of volumes is not a mature market. It is one in early formation, which is exactly what makes the next few years consequential.

“Completely aligned — in fact, in the EPR business, we are a leader in the country today. Our market share is more than 30%, the next best player is less than one-third of our size, and there is significant benefit that we are deriving from the government of India’s EPR policy.”

— Nitin Gupta, CEO, Attero Recycling | Q1 FY26

India’s e-waste rules have traveled a long distance since 2012 — from voluntary to mandatory, from self-reported to customs-enforced, from no market to a digital certificate trading platform with a government-set floor price now being challenged in court. The formal sector’s share of physical e-waste processing has moved from 1% to 25% in four years. Companies that once treated EPR as a footnote now provision for it as a growing line item.

But the numbers also show how much distance remains. Three-quarters of India’s e-waste still flows through an informal system that rules alone cannot reach — not because enforcement has failed, but because informality has a structural economic advantage that compliance mandates haven’t closed. The formal sector needs more than rules. It needs GST architecture, financing, and the infrastructure to compete on price.

And the next wave is already in the pipeline. Solar PV panels are now covered under the E-Waste Management Rules 2022, but India’s standalone solar waste management framework remains unfinished. By 2030, projections suggest India will generate approximately 340 kilotonnes of solar panel waste, concentrated in five states. EV batteries — governed by the Battery Waste Management Rules — will test the recycling infrastructure that companies like Amara Raja are just beginning to build. The rules that found their teeth over the last decade will need to grow a new set.

What to watch?

• Delhi High Court ruling on EPR floor pricing:

  If the court strikes down the minimum price mechanism, formal recyclers lose their margin buffer and the economics of certificate trading shift. The outcome will tell you whether the government can hold the line on making formal recycling financially viable.

• Amara Raja’s battery-breaking operations (Q4 FY26):

  Full vertical integration of its ₹700 crore recycling plant comes online this quarter. The recovery ratios it achieves — how much usable lead it can extract per kilogram of scrap — will determine whether formal recycling in India can compete on economics, not just compliance.

• GST Reverse Charge Mechanism for e-waste scrap:

  Attero has been advocating for this for multiple quarters. Any indication from the Finance Ministry or GST Council signals whether the government is willing to address the structural cost disadvantage of the formal sector.

• Solar Waste Management Rules finalization:

  MNRE and CPCB have the roadmap; standalone solar waste rules haven’t arrived. When they do, EPR obligations will land simultaneously on Adani Green, Tata Power Solar, Waaree Energies, and Premier Energies — companies whose panels are already aging in the field.

• India’s National Critical Minerals Mission linkage to e-waste:

  Whether the government ties urban mining incentives to formal e-waste processing will determine if the sector gets the financing it needs to scale fast enough to matter for the rare earth supply chain.

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes & narratives 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 56th 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 18 companies across 6 industries and a few TV interviews

Information Technology

• HCL Technologies

• Tech Mahindra

• Persistent Systems

• Tata Elxsi

Financial Services

• Billionbrains Garage Ventures Ltd. (Groww)

• HDFC AMC

• HDFC Bank

• ICICI Bank

• Yes Bank

Telecom

• Tata Communications

Capital Goods

• Mahindra EPC Irrigation

• Transformers & Rectifiers (India) Ltd.

Retail

• Havells India Limited

Automotive

• SML Mahindra Limited

TV Interviews

• HCL Technologies on its Q4 Results

• Greenpanel Industries on Price Hikes

• Pearl Global Industries on US Sourcing Shift & Tariff Mechanics

• MM Forgings on Demand Recovery

Information Technology

HCL Technologies | Large Cap | IT Services

HCLTech is a global technology services company providing software, infrastructure, and engineering solutions to large enterprises. The firm operates across segments including IT and Business Services, Engineering and R&D Services, and HCL Software.

[Concall]

Management is seeing AI integration in almost every new contract, which has helped them maintain industry-leading growth rates. This suggests the company is effectively capturing market share as enterprises pivot toward AI-driven efficiency.

“Client behavior reflected familiar patterns of cost-takeout initiatives coupled with accelerated adoption of AI-led productivity gains. Notably, AI momentum remains strong with nearly all deals incorporating an AI or GenAI component. Given this backdrop, the year marks the third consecutive year that HCLTech is likely to deliver the highest organic revenue growth among scale players.”

— C. Vijayakumar, CEO and Managing Director

While total deal values appear flat, management notes that AI automation is making projects cheaper to deliver, effectively hiding an increase in work volume. This shift suggests that revenue growth in the AI era may require higher deal volumes to offset lower per-project pricing.

“TCV of net new bookings for the year clocked $9.3 billion, same as last year, despite some of the AI deflation that you see in the TCV net new booking. As we close the quarter and fiscal year, our AI strategy is translating into deeper client engagement and clear market leadership.”

— C. Vijayakumar, CEO and Managing Director

Management expects nearly half of the traditional IT services market to shrink as AI automates routine tasks, while new AI-specific services will boom. Investors should monitor how quickly the company can pivot its workforce from these shrinking areas into high-growth AI categories.

“40% of the industry runs the risk of being disrupted by AI and can shrink at a 3-5% CAGR for a few years and can eventually be 25% of the enterprise spend. ... Finally, there is a market that is AI-native, currently at 5% of the market growing at 30%, which can become 20% plus of the market in 5 years.”

— C. Vijayakumar, CEO and Managing Director

Advanced AI models are making software development much faster, which reduces the number of billable hours per project. This internal efficiency is a double-edged sword that improves speed but puts downward pressure on traditional revenue models.

“Starting with the deflation number of 3-5% that I shared, it is mostly based on the industry mix of services. For the specific question on how that changes with respect to model effectiveness, I think most of the enhancement in models is really driving more and more velocity and efficiency in the SDLC lifecycle.”

— C. Vijayakumar, CEO and Managing Director

The company is successfully securing large-scale infrastructure projects to build data centers optimized for AI workloads. This demonstrates that HCLTech is moving beyond simple consulting and into the core physical build-out of AI systems.

“I think AI Factory is where we are seeing tremendous traction. One of the large deals that we called out this quarter is a $100 million plus AI Factory deal for the design, implementation, and support of a next-generation AI data center for a large technology company.”

— C. Vijayakumar, CEO and Managing Director

The software division is seeing lower sales of one-time licenses as it tries to transition customers to more stable recurring subscriptions. This transition is expected to keep software revenue flat or slightly down as the old revenue model fades.

“For the software segment, we continue to work on pivoting the business to more subscription and steady revenue streams away from perpetual license sales. ... Our expectation is low single-digit, flattish, or marginally declining growth for the coming year.”

— C. Vijayakumar, CEO and Managing Director

AI is providing a new level of productivity savings beyond what was historically possible in IT outsourcing contracts. For investors, this means the company must continuously innovate to prevent these price reductions from eroding their total earnings.

“No, I think we were always careful that this is an incremental impact. The traditional productivity what we normally commit in a Greenfield or in a first-generation outsourcer — we should now be looking at an incremental impact or reduction in the overall solution.”

— C. Vijayakumar, CEO and Managing Director

Tech Mahindra | Large Cap | IT Services

Tech Mahindra is a global IT services company focused on digital transformation, consulting, and enterprise technology solutions, with strong exposure to telecom, manufacturing, and BFSI. The company is currently in a transition phase, improving margins and rebuilding deal momentum while positioning itself around AI-led services and large enterprise partnerships.

[Concall]

The company reported its highest-ever deal wins, including large strategic contracts, indicating strong demand and visibility for future growth.

“We closed the year with our highest ever deal wins in the last many years. Notably, we secured two mega deals over consecutive quarters aimed at accelerating innovation, strengthening digital resilience, and delivering AI-led operational efficiencies.”

— Mohit Joshi, CEO and Managing Director

Despite modest revenue growth, the company delivered strong margin expansion through disciplined execution, signalling improved operational efficiency.

“Full year revenues for Tech Mahindra stand at $6.385 billion, up 1.9% on a reported basis and 0.6% in constant currency. During the year, our focus remained on disciplined execution, staying close to clients, and progressing our solution-led approach. Operating profit is $797 million, up 31.4% year-over-year with margins expanding by about 290 basis points to 12.6%.”

— Mohit Joshi, CEO and Managing Director

The company is transitioning from a traditional outsourcing model to a higher-value strategic partner role, which improves deal stickiness and pricing power.

“We closed the year with total deal wins of $3.794 billion, representing a 42% growth year-over-year. Tech Mahindra is increasingly positioned as a strategic partner to clients rather than only as an outsourcing vendor.”

— Mohit Joshi, CEO and Managing Director

Margins continued to improve even while the company invested in AI and absorbed transition costs from large deals, indicating strong cost control.

“Operating profit for the quarter is at $223 million, up 5.5% quarter-over-quarter, and margin improves by 70 basis points to 13.8%. Project 40, FX tailwinds, and Comviva seasonality contribute positively, while we continue to invest in AI and work through transition costs in our large deals.”

— Rohit Anand, Chief Financial Officer

The company announced its highest-ever dividend, reflecting strong cash flows and a shareholder-friendly capital allocation approach.

“In line with our stated capital allocation policy, the board has recommended a final dividend of 36 rupees per share, taking the total dividend announcement for the year to 51 rupees per share. This is the highest ever dividend we have announced. The full year dividend payout ratio works out to be 104% of PAT and 91% of free cash flow.”

— Rohit Anand, Chief Financial Officer

Persistent Systems Ltd. | Large Cap | IT Services

Persistent Systems is a global digital engineering provider specializing in cloud-native application development and enterprise modernization. The firm leverages proprietary AI platforms like Tatwa and Iora to serve clients across the BFSI, Healthcare, and High-Tech industries.

[Concall]

Clients are moving their budgets away from routine maintenance and toward major technology overhauls designed to support AI capabilities. This shift is driving demand for Persistent’s core strengths in modernization and data infrastructure.

“We see a real shift in spending from business-as-usual programs to transformation initiatives that are preparing clients to adopt AI at enterprise levels. We are involved in accelerating clients’ transformation journeys in the following areas: improving time-to-market for new product rollouts, transforming complex legacy landscapes, end-to-end modernization of data, and reimagining customer experience.”

— Bharath Narayanan, Executive Vice President, Global BFSI and Europe Geography Head

Management clarified that their goal is to reach a $2 billion revenue pace by the final quarter of the next fiscal year. This target sets a clear benchmark for investors to measure the company’s growth trajectory over the next 12 to 18 months.

“So, for the USD 2 billion revenue, we are looking at the Q4 FY27 exit as the point where we hit that annualized run rate. Now coming to your other questions regarding the accounts, we have been managing those relationships closely. From the company’s perspective, we have fairly strong relationships with each of them, and they are still there.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

While new platform features like Salesforce Headless 360 allow direct software connections, they also increase complexity for the end customer. This complexity ensures that professional service firms like Persistent remain necessary to implement and manage these advanced systems.

“To keep it short, given the time constraints, if you look at the overall Headless 360, while it gives customers options to use APIs directly, it also increases the technical work. Not every customer is tech-savvy enough to take advantage of these without having that technical competence. So, we are working very closely with Salesforce.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

Persistent is successfully gaining market share within the healthcare sector, even as larger competitors report slowing demand. This relative outperformance suggests that the company’s specific offerings are more resilient than the broader industry average.

“We play in the same vertical and some of our larger customers are there. We share these customers with a few other strategic tier-one firms as well. As far as we are concerned, we have been able to grow in the same set of accounts despite the headwinds that the industry has faced.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

The company is targeting private equity-owned firms as a primary customer base for their cost-saving AI tools. This strategy allows Persistent to tap into a massive segment of the US software market that is currently focused on efficiency and margin improvement.

“The fact is that there are more PE-owned companies in the US today than public companies. In the enterprise software space over the last 5 years, many companies have been taken private. If we can partner with the PEs and their portfolio companies to improve their margins using our platforms—whether we use open-source LLMs or Anthropic—it is a very big opportunity.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

Persistent spends roughly $8 million to $9 million annually on developing its own internal data platforms. These investments are proving valuable as clients increasingly seek proprietary software solutions to gain an edge in their AI transformations.

“As far as the capitalization spend we do on our main data systems, that ranges around 8 million to 9 million dollars a year. You can assume our own developed IP is getting a lot of attention and momentum in terms of the benefits provided to clients.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

Management believes that using third-party AI platforms will not hurt their profitability because the technology increases overall worker productivity. This suggests that AI is being viewed as a tool to maintain or enhance margins rather than an added cost burden.

“Most of this should be largely neutral or slightly accretive because the entire promise of AI is to do more work with fewer people and more technology. It should not be margin-dilutive. Our margins should stay the same or improve as we use more of this technology.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

Management admits that new AI tools might reduce the size of some traditional coding projects, but they believe they can still grow by taking market share from others. Their relatively small size compared to the total market gives them ample room to expand despite industry-wide shifts.

“Even if we see compression in the tech world or cannibalization of our own business, the total addressable market is large, and we are a relatively small company at roughly 1.7 billion dollars. There is enough new outsourcing and market share rotation happening for us to lead the pack.”

— Sandeep Kalra, Executive Director and Chief Executive Officer

Tata Elxsi Limited | Mid Cap | IT Services / ER&D

Tata Elxsi is a leading global provider of design-led technology services across automotive, media, and healthcare sectors. The company specializes in engineering research and development, helping clients innovate through AI, digital transformation, and specialized domain expertise.

[Concall]

The company has successfully shifted its focus toward direct deals with car manufacturers rather than just parts suppliers. This strategy is winning new global business even while the broader market remains slow.

“In our transportation business, our revenues in Q4 FY26 grew by 0.2% quarter-on-quarter in constant currency terms. We are delighted with two strategic wins: one in the APAC region from a new OEM and another from a next-generation mobility services company in the US, paving the path for business growth in coming quarters. Our investment and efforts to pivot towards OEM business are delivering continued success, underscoring our strength and focused execution of chosen strategies.”

— Management, Executive Leadership

The company relies heavily on its existing client base for over 97% of its quarterly revenue. This high level of repeat business provides stability but makes the firm dependent on the health of its current accounts.

“If you look at it in any quarter, new customers would contribute maybe 2% to 2.5% of the revenue. So, a large portion of the revenue comes from existing customers and the deals that we win with them. However, we also see a good new set of customers coming in.”

— Management, Executive Leadership

Management admitted that the timing of deal closures in the healthcare segment missed expectations, leading to a poor quarterly result. They expect these delayed deals to close early in the next quarter, signaling a likely rebound.

“We were very optimistic that the healthcare business had reached the bottom and would turn around. We were pretty confident because there were a few deals that we were bidding for. Unfortunately for us, those deals did not close in time, which resulted in the situation we had. However, we still continue to carry those items in our high-probability funnel.”

— Management, Executive Leadership

New multi-year contracts often lower initial profits because of high setup and transition expenses. Management expects margins to rise in the later years of these contracts as projects become more efficient.

“When we look at a three-year or five-year deal, the initial year would have a lot of costs involved. That could include transition costs or acquisition costs. However, when you look at a multi-year horizon, we definitely look at how we can improve our margin sequentially quarter-on-quarter and year-on-year.”

— Management, Executive Leadership

Better employee utilization is a primary driver for the company’s rising profit margins. As the company moves more staff onto billable projects, investors can expect a predictable boost to the bottom line.

“The work has been happening in terms of the operating model, operating efficiencies, and leverage. It is not only about utilization, though utilization was below 70% at one point. Now we are inching toward the mid-70s. Every 1% increase in utilization helps by at least 25 to 30 basis points on the margins.”

— Gaurav, Chief Financial Officer

Global political tensions are making automotive clients more cautious about starting new work. Consequently, management has lowered its growth expectations for this key segment to high single digits.

“I am still pretty optimistic about the overall automotive market. However, given the current geopolitical situation and uncertainties, while we have the deals in hand and will look at ramping up, there could be some uncertainty. We are still talking to customers about that. Having said that, we would likely look at a high single-digit exit; we may not get into double digits for automotive.”

— Management, Executive Leadership

While some competitors are cutting prices by promising AI-driven savings, Tata Elxsi believes the specialized nature of engineering prevents massive price wars. They are maintaining price discipline rather than chasing low-margin work.

“I do not think we have seen irrationality in general. ER&D is still very specialized. It is not something where you can use AI or GenAI across the board. That said, we have seen a few contracts where competition has priced very aggressively.”

— Management, Executive Leadership

The company has officially moderated its annual growth guidance from double digits down to single digits. This reflects a more conservative outlook on how quickly global clients will commit to new spending.

“Today, looking at the global situation, we might be looking at a single-digit to higher single-digit growth for the financial year. We may not reach double-digit growth. This could change in the next three to six months based on deal momentum.”

— Management, Executive Leadership

Management is being cautious about taking on too many fixed-price contracts which carry higher risk if projects go over budget. They want a balanced portfolio to ensure financial stability during complex engineering projects.

“It is not necessarily advisable to shift more of the business to fixed-price. It requires a careful transition because we need the right subject matter experts and architects to execute and deliver margins. It is a double-edged sword. It is not our objective to move to 70% or 80% fixed-price; that would put too much risk on us.”

— Management, Executive Leadership

The company is quietly expanding into the aerospace and defense sectors to reduce its reliance on automotive and media. Success in these high-barrier industries could provide a new long-term growth engine.

“We are focusing on aerospace and defense. We have some exciting things happening there, but it is difficult to detail them until they result in large revenues. We are doing good work with defense organizations in India, such as HAL.”

— Management, Executive Leadership

Financial Services

Billionbrains Garage Ventures Ltd. (Groww) | Large Cap | Financial Services

Billionbrains (Groww) is steadily evolving beyond a discount broker into a full-stack investment platform, with a clear push toward wealth and AUM-led growth. While user activity and retention remain strong, the real shift is in how new investors are entering, through mutual funds and long-term products, signalling a more stable and scalable business model going forward.

[Concall]

The company is aggressively scaling its wealth management business to move beyond traditional broking and build a more stable, AUM-driven model.

“Going forward, our focus will continue to be on scaling our wealth business. It has been six months since the Fissdom acquisition, and now we have got a lot of learnings on how to look at the problem of scaling. We will continue scaling wealth.”

— Lalit Keshre, Co-founder and CEO, Billionbrains Garage Ventures Ltd.

The company views AI as a critical driver for both operational efficiency and enhanced user engagement in the coming year. For investors, this dual focus could lead to faster product releases and improved operating margins through tech-led productivity gains.

“Secondly, we will continue compounding our existing businesses and growing market share, which we have been continuously doing. Thirdly, we see this year as the inflection point for how AI will start impacting things, and we look at it in two ways. One is how we can improve the customer experience leveraging AI, and second is on the productivity side where our internal teams are shipping much faster and better.”

— Lalit Keshre, Co-founder and CEO

Muted market conditions have prompted a shift in how new users enter the platform, moving from direct stocks to passive products. This trend highlights the platform’s ability to remain relevant across different market cycles by offering diverse investment entry points.

“Markets have not been doing so great since September 2024. Since then, we have seen that the acquisition funnel has shifted more towards mutual funds and ETFs as products. Hence, the way customers are actually getting introduced to the capital market has become slightly different.”

— Ishan Bansal, Co-founder and CFO

Increased market volatility and the launch of new trading tools have significantly boosted the company’s derivative market share. This increased activity suggests that the platform’s active user base is highly responsive to market movements and new product features.

“First, with the new customers coming to the derivatives market, we are driving some benefits from new initiatives, including 9:15. But a large part of this is coming on Groww itself. Second, because the last quarter had a lot of volatility, we saw that our customers who used to trade earlier have started doing more.”

— Ishan Bansal, Co-founder and CFO

The firm is holding back on launching algorithmic trading products until there is more regulatory stability in the sector. This cautious stance protects the company from compliance risks while ensuring future products are built on a solid legal foundation.

“As of now, we do not have a very strong strategy focused on algo. We believe the new regulations that are still getting cleaned up will eventually give us more clarity. We will probably jump into this market once we have full clarity on the regulatory piece.”

— Harsh Jain, Co-founder and COO

Rising employee expenses are a result of strategic hiring for high-growth areas like wealth management and artificial intelligence. These investments are intended to drive long-term value creation even if they weigh on short-term personnel costs.

“On the employee cost, we are investing across multiple functions, including asset management and the wealth side. There are also initiatives on the AI side in Groww where we are investing. This investment typically comes in the form of people, and hence the employee cost has increased a little bit from last quarter to this quarter.”

— Ishan Bansal, Co-founder and CFO

Margin Trade Funding (MTF) is being used to deepen engagement with existing clients rather than as a tool to find new ones. This shift toward longer holding periods among traders can lead to more stable revenue streams from interest income.

“On MTF, it is not an acquisition product for us. Mostly our existing customers are using MTF. Earlier, they might have been doing intraday trading; now they are holding positions for longer.”

— Harsh Jain, Co-founder and COO

Expansion into smaller cities is bringing in a more stable, long-term investor base compared to the typical urban trader. These ‘sticky’ customers are expected to have a higher lifetime value, providing a foundation for steady AUM growth.

“What we are seeing currently is that as we expand into tier 2 and tier 3 towns, the profile of the customer is slightly different. These people are now new to stocks, and we have seen that their behavior and their investing habits are more long-term oriented. They are looking at building wealth over time, not just trading in the short term.”

— Lalit Keshre, Co-founder and CEO

Management explains that industry expansion is non-linear and heavily dependent on bull market cycles to attract new cohorts. Investors should expect periods of rapid growth followed by stabilization as the industry follows a steady 10-15% long-term growth path.

“Growth typically comes in those bull runs and then stabilizes. When the next bull run comes, that is when the market will expand, and that expansion is typically very high. In a longer frame, the industry is growing at a 10-15% CAGR.”

— Harsh Jain, Co-founder and COO

HDFC AMC | Large Cap | Financial Services

HDFC AMC provides a diverse range of mutual funds through active and passive strategies across equity, fixed income, hybrid, and multiasset solutions. The company also offers portfolio management services, alternative investment funds, and caters to HNIs, corporates, trusts, and institutions with tailored investment solutions.

[Concall]

The company plans strategic expansion into non-mutual fund businesses such as PMS and alternatives, indicating a diversification of revenue streams.

“Over the next several years, apart from the mutual funds, we also see opportunities to grow the non-mutual fund side of the business, which includes our PMS capabilities... and on the alternatives side.”

— Navneet Munot, Managing Director and Chief Executive Officer

Indian domestic investors are demonstrating growing maturity, adopting a long-term perspective and understanding the advantages of systematic investing.

“One thing is quite clear that domestic households are increasingly investing with a long-term mindset. And they are beginning to appreciate the benefits of rupee cost averaging.”

— Navneet Munot, Managing Director and Chief Executive Officer

Investors exhibited mature, contrarian behavior by capitalizing on market downturns and volatility to increase their investments.

“I mean that clearly shows that in extreme volatility and when markets were not doing well, the Nifty and the other indices were down, investors use that an opportunity to put more money to work. I mean that clearly shows a very mature behaviour of investors.”

— Navneet Munot, Managing Director and Chief Executive Officer

India’s nascent stage of savings financialization presents a substantial growth opportunity that HDFC AMC aims to fully leverage.

“We are in a growth business. And I would emphasize we are at very early stage of financialization of savings in India. We want to make the most of the opportunity which lies ahead.”

— Navneet Munot, Managing Director and Chief Executive Officer

HDFC AMC is taking a cautious and deliberate approach to launching SIF products despite regulatory approval, prioritizing thoughtful design over being first to market.

“On your question on SIF, so we have secured all necessary regulatory approvals... So, we are not approaching this as a race. In a category like this, being early doesn’t necessarily create an advantage. In fact, the first few products will end up shaping investor expectations for the entire segment. So, we would much rather be thoughtful and deliberate.”

— Navneet Munot, Managing Director and Chief Executive Officer

While the company is proud to secure prestigious government mandates like EPFO and SPFO, these non-discretionary PMS segments operate with very narrow profit margins.

“The non-discretionary, particularly the EPFO and SPFO kind, these are Government of India mandates and among the most prestigious and very tightly contested opportunities. So, we are honored to have been selected. That said, this is a segment that operates under very, very tight economics.”

— Navneet Munot, Managing Director and Chief Executive Officer

The company’s balance sheet equity holdings, mandated by SEBI’s ‘skin in the game’ rule, experienced a decline in value due to the market correction in Q4.

“The equity investment in mutual funds that we have on the balance sheet is largely due to the skin in the game circular from SEBI. So that portion of the equity investments saw a drawdown because of the market correction in the Q4, right.”

— Naozad Sirwalla, Chief Financial Officer

HDFC Bank | Large Cap | Financial Services

HDFC Bank and its subsidiaries offer various banking and financial services such as retail banking, wholesale banking, treasury operations, insurance, and asset management. With overseas branches in multiple countries, the bank operates in segments including Wholesale Banking, Treasury, and Retail Banking.

[Concall]

The bank achieved 12% credit growth, significantly outperforming the previous year’s low growth. This shows that the bank is regaining its lending momentum as the broader economy improves.

“We had estimated a system credit growth to be around 10.5-11.5%. We did 12%, up from 5.5% last year. As you can see, there is positive momentum as we had expected.”

— Sashi Jagdishan, CEO

Massive expansions in branch networks and customer bases are being viewed as long-term investments rather than just immediate costs. This setup creates a foundation for future profit growth as these new touchpoints become more efficient.

“The distribution nearly doubled to 9,700 branches. The number of customers nearly doubled to 100 million customers. Our tech investments more than quadrupled to around a billion dollars. The merger with mortgage company HDFC Limited too is an investment for the future.”

— Sashi Jagdishan, CEO

Management clarified that regulatory ratios regarding loans and deposits are no longer a major hurdle for their operations. This removes a key concern for investors who were worried about the bank’s ability to grow its loan book.

“The loan to deposit ratio is not a constraint; the regulator has come out and talked about it. We have demonstrated our ability to gain market share on deposits every year, almost around 30-50 basis points over the last five years. Hence, it is no longer a binding constraint.”

— Sashi Jagdishan, CEO

HDFC Bank has developed an internal AI platform to automate complex tasks and speed up customer service. This technology-first approach is expected to reduce operating costs and improve overall profitability over time.

“But the real story is how we created in-house the unified AI platform, which is going to be the center that stands across the entire organization. It allows us to deploy AI agents quickly without building custom interfaces between systems. The platform brings together enterprise search, document extraction, voice-based agents, and a full AI development lifecycle.”

— Sashi Jagdishan, CEO

Despite global political tensions, management sees continued high demand for loans from sectors like electronics and semiconductors. Sustained corporate demand is a positive sign for the bank’s commercial lending business.

“For the growth drivers, first from the corporate side, you have seen in our release the increase that we have done over the previous year. We do see this sustaining, as there has been demand. Of course, we will have to temper it given the fallout of what we see in the geopolitical area, which hopefully should not be more than a couple of months going into this financial year.”

— Management, Executive Team

While wholesale deposits spiked at the end of the year, the bank is keeping its focus on steady retail money. Maintaining a high percentage of retail deposits makes the bank’s funding source more stable and less prone to sudden withdrawals.

“If you look at the composition between retail and wholesale, there is some level of wholesale deposits that come in the March quarter naturally because of relationships as well as how the corporates manage their balance sheets towards the end of their financial year. You’ll see that the average of the retail versus wholesale is about a percentage point or two different in this quarter; in our earnings stack, you would notice that there is 82% against 84% in retail.”

— Management, Executive Team

Small-ticket deposits now make up nearly half of the bank’s new deposit growth. This shift towards granular retail money reduces the bank’s dependence on expensive or volatile large-scale corporate funds.

“In fact, the less than 3 crore deposits mobilized in 2026 on a net basis has grown almost about 74% over the net incremental deposits for FY 25 on the less than 3 crore bucket. So what constituted 31% of the total net accretion in FY 25 now constitutes 47%. These are very less volatile and very sustainable.”

— Management, Executive Team

Loan rates dropped faster than deposit costs during the recent rate cycle, putting temporary pressure on interest margins. This reminds investors that the bank’s profitability is sensitive to how quickly the central bank adjusts interest rates.

“On the deposit side, the transmission that has happened is only about 50-60 basis points so far. It hasn’t fully offset what the asset pricing move was. Now, due to the geopolitical situation and uncertainty, the rate cycle is currently on pause.”

— Management, Executive Team

Management emphasized that they prioritize Return on Assets (ROA) over other metrics to ensure they aren’t taking excessive risks just to boost growth. This focus on high-quality returns suggests a disciplined approach to capital allocation.

“ROA is what we should focus on. ROE is an intermediate metric. If you take higher risks and bring that into the top line, you may lose it in the credit loss below the ROA line. So, we focus on the returns on assets.”

— Management, Executive Team

The bank has successfully converted half of its home loan customers into regular banking customers, up from about a third previously. This successful integration proves the bank is capturing more value from its large merger.

“36% of the people who had home loans with HDFC had their liabilities with us. Net of attritions and acquisitions, over this journey, this 36% has come as high as 50% within the last 2.5 years. That tells you the strength of the liability franchise.”

— Management, Executive Team

Current account and savings account (CASA) balances from the merger group have grown significantly in just two and a half years. This growth in low-cost deposits helps the bank maintain better profit margins.

“Secondly, the actual CASA balances have grown. At that point in time, we had about 50,000 crores in CASA balances. We have today grown that to 86,000 crores. That’s the growth in 2.5 years in terms of both the numbers and the engagement of the accounts.”

— Management, Executive Team

ICICI Bank | Large Cap | Financial Services

ICICI Bank is a leading private sector bank in India providing a wide range of financial products and services to retail, SME, and corporate customers. With a strong presence across urban and rural areas, the bank offers digital banking solutions, international services, and financial solutions to businesses and government entities.

[Concall]

The bank has largely finished adjusting its balance sheet to the recent cycle of interest rate cuts. Investors should expect more predictable interest income levels in the upcoming quarters.

“Most of the rate cut impacts have moved through the system, though there was a small cut in December. Overall, we expect margins to be stable from here.”

— Management, Executive Leadership Team

Significant growth in rural lending is being driven by a strategic push into secure gold-backed loans. Maintaining provisions for agricultural loans shows a cautious approach to regulatory compliance in the priority sector.

“Higher demand for gold loans and our enhanced machinery in that segment are the primary drivers. On the agricultural priority sector provision, we are still holding those as of March while we work through the portfolio to bring it into conformity with regulatory requirements.”

— Management, Executive Leadership Team

The bank is committed to ‘positive jaws,’ where its revenue grows faster than its operating expenses. This focus on operational efficiency is a key driver for improving the bank’s overall cost-to-income ratio.

“OpEx was largely in line with expectations, though costs related to priority sector compliance and labor code remuneration were higher. Our objective is to keep OpEx growth below top-line growth.”

— Management, Executive Leadership Team

A shift in consumer behavior away from high-interest ‘revolving’ credit card debt is putting pressure on industry margins. However, ICICI Bank believes its credit card business remains fundamentally sound and profitable due to its focus on high-quality spenders.

“The Q4 decline is a function of spends and revolvers. While the decline in revolvers has impacted industry profitability over the last two years, it remains a very profitable business for us.”

— Management, Executive Leadership Team

Despite general industry concerns about liquidity, ICICI Bank maintains a healthy buffer of liquid assets. This comfortable position ensures that the bank can continue lending without being restricted by a shortage of new deposits.

“Our average LCR is very comfortable at about 126% for the quarter. Deposit flows are healthy and more than adequate, so deposit growth will not be a constraint for our loan growth.”

— Management, Executive Leadership Team

Yes Bank | Large Cap | Financial Services

Yes Bank is a full-service commercial bank in India providing a wide range of retail, MSME, and corporate banking solutions. The bank has completed a significant multi-year transformation following its 2020 reconstruction and is now focused on sustainable growth and profitability.

[Concall]

Management is aggressively scaling its retail lending engine to drive growth and improve yields across the total loan book. The rapid pace of retail disbursals suggests the bank is confident in its risk models and its ability to capture market share.

“Retail disbursals in particular have gained significant momentum, registering 41% year-on-year growth in Q4 FY26. We remain focused on balanced and profitable growth across retail, commercial, and wholesale businesses, supported by disciplined risk selection and effective pricing.”

— Vinay M. Tonse, Managing Director and Chief Executive Officer

The bank is guiding for loan growth to accelerate to industry levels of 14-15% after a period of deliberate calibration. This move toward market-matching growth signals that the bank’s rebuilding phase is fully complete and it is ready to compete for volume.

“We believe that momentum should certainly continue and it is now becoming more secular across segments. Retail disbursement growth rates are quite aggressive as we move fast now given our confidence on asset quality and profitability. Net-net, we should certainly aim to grow in line with industry, if not more, which anchors around the 14-15% range.”

— Vinay M. Tonse, Managing Director and Chief Executive Officer

The bank has provided a clear roadmap for the maturity of its low-yielding RIDF assets over the next few fiscal years. This predictable rundown provides investors with high visibility into a guaranteed tailwind for interest income and margin expansion.

“We think that next year the minimum reduction should be about 6,500 crores, and that could go as high as 9,000 crores by the end of March 27. The reduction of RIDF for FY28 and FY29 will be equally split, with some maturities in FY30. The base of the structure starts getting thinner.”

— Niranjan Banodkar, Chief Financial Officer

Management utilized excess recovery gains to create a voluntary buffer of 341 crores, rather than just flowing it all to the bottom line. This conservative approach strengthens the balance sheet against future uncertainties without indicating actual credit stress.

“Our core NPA credit cost is substantially lower quarter-on-quarter. These factors provided buffers to create provisions. We follow conservative provisioning policies, as seen with our PCR remaining above 80% for the last 3 quarters. As part of that philosophy, we reviewed our portfolio and determined that some proactive, prudent provisioning was appropriate.”

— Niranjan Banodkar, Chief Financial Officer

Management remains cautious regarding the ongoing AT1 bond litigation currently awaiting a Supreme Court verdict. While they maintain their legal stance was correct, the final judgment remains a key binary risk factor that investors must monitor.

“We have previously stated that we believe the actions we took were in line with contractual obligations and the allowed process. However, we must respect the court proceedings and wait for the decision. I would refrain from passing a judgment on what we expect.”

— Vinay M. Tonse, Managing Director and Chief Executive Officer

Despite global geopolitical conflicts, management reports that its MSME and corporate portfolios remain resilient with no immediate signs of credit deterioration. This suggests that the bank’s tight underwriting standards implemented post-reconstruction are currently holding up against macro shocks.

“We are proactively monitoring our portfolio. Currently, all our clients, including MSME and larger corporate clients, are managing well and have not shown signs of stress. We will continue to watch this space closely as it could impact inflation and lead to second-order effects.”

— Vinay M. Tonse, Managing Director and Chief Executive Officer

Telecom

Tata Communications | Mid Cap | Telecom

Tata Communications powers the digital economy with next-gen connectivity, cloud, IoT, and cybersecurity services. Its global network and integrated digital solutions simplify complexities for enterprises, enabling new opportunities in the evolving digital landscape.

[Concall]

Digital platforms now constitute over half of data revenue, indicating a significant and successful shift in the company’s business mix towards higher-growth areas.

“Our digital platforms are now, for the first time, contributing more than 50% of our data revenue.”

— Ganesh Lakshmi Narayanan, MD and CEO designate

Customer engagements reveal a shift from basic connectivity needs to a demand for advanced AI-driven solutions, such as AI agents for customer service.

“The conversations with my customers are very encouraging because they are not just talking about connectivity. For example, I met an insurance customer, and the conversation was about how we can build AI agents that can operate as relationship managers for their field service agents.”

— Ganesh Lakshmi Narayanan, MD and CEO designate

The company is actively monitoring geopolitical risks, noting some demand-side postponements but no significant impact on costs currently.

“Let me address the geopolitical situation first... On the demand side, we are seeing some risks; some events are being postponed or canceled... On the cost side, we are tracking energy costs and chip-related costs. Currently, we do not see a big issue with costs. We are assessing this daily and if there is anything material, we will report it.”

— Ganesh Lakshmi Narayanan, MD and CEO designate

Management quantified the opportunity from AI-led data center expansion, especially in India.

“Data center to data center connectivity… in India… we expect this to be at least a billion-dollar opportunity by 2030… We expect a four-fold increase in data center bandwidth needs.”

— Management

The company is actively pursuing an IPO of STT GDC’s Indian asset as the preferred method to monetize its stake and achieve optimal value discovery.

“STT GDC has already issued a press statement saying they are looking for a potential IPO for their Indian asset... if we get the right value, an IPO would provide the right value discovery for our stake. We have engaged with STT and the new buyer to secure our monetization rights, with an IPO being the lead option.”

— Management, CFO designate

The company leverages its unified infrastructure strengths in security, connectivity, and voice for AI solutions, aiming for ROI from its Commotion platform and open to AI partnerships.

“Our building blocks allow us to capitalize on the unified infrastructure required. It is not just about the agent; the agent needs security, connectivity to enterprise data, and voice infrastructure. Those are our strengths. The Commotion investment gives us an opportunity to participate in generating real ROI. We will also look to partner with other AI companies.”

— Ganesh Lakshmi Narayanan, MD and CEO designate

Tata Comm is winning bundled deals combining multiple capabilities, increasing deal sizes and stickiness.

“It is a true digital fabric win which included both our network fabric and the interaction fabric… enabling GCCs with a secure, cloud-ready, globally connected environment.”

— Ganesh Lakshminarayanan, MD & CEO

Management framed long-term growth around two large opportunities: backend digitization in emerging markets and AI-driven enterprise transformation.

“There are two big trends shaping the future… the back-end is still yet to be digitized… The second trend… is the AI-led transformation… To power enterprise AI at scale… customers will need a unified infrastructure.”

— Ganesh Lakshminarayanan, MD & CEO

Capital Goods

Mahindra EPC Irrigation | Nano Cap | Engineering & Capital Goods

Mahindra EPC Irrigation Limited was incorporated in 1981 having its registered office in Nashik, India. It is engaged in the business of Micro Irrigation Systems such as Drip and Sprinklers, Agricultural Pumps, Greenhouses and Landscape Products.

[Concall]

Cash flow constraints are almost exclusively driven by delayed payments from states where the company is most active. Management is trading off higher receivables for the sake of securing business in high-margin geographic areas.

“The pressure on cash flow in this industry is almost entirely due to receivables. While we have managed working capital through tight inventory controls, receivables build-up has happened in key states where margins are good and there is strong demand. We are currently in a period where there has been a build-up of pendency.”

— Ramesh Ramachandran, Managing Director

The company is actively building the operational expertise required to bid for significantly larger irrigation projects. Successfully scaling into the 50-100 crore project tier could drastically change the company’s revenue profile and market position.

“We have been taking projects of 5-20 crores. Any plans to take larger projects of 50-100 crores? We are preparing for a step-up from our current size. It requires us to align certain internal capabilities and experience, which we are building on.”

— Ramesh Ramachandran, Managing Director

Management believes that increasing costs and weather volatility are pushing farmers to view irrigation technology as a necessity for survival. This shift from a discretionary purchase to a core productivity investment supports long-term demand growth.

“Rising cultivation costs and climate-related risks are increasing the relevance of solutions that improve input efficiency and productivity. Micro-irrigation, by enabling savings in water, fertilizer, energy, and labor, while at the same time improving yields, continues to be viewed as a value-enhancing investment by farmers rather than a mere capital expense.”

— Ramesh Ramachandran, Managing Director

India’s impending water scarcity will force a reduction in agricultural water consumption to support industrial and urban growth. This transition creates a massive regulatory and economic tailwind for water-efficient irrigation solutions.

“As per current estimates, per capita water availability in India is expected to drop from 1,545 cubic meters in 2011 to 1,140 cubic meters by 2050. It should then classify India as a potentially water-scarce nation. Additionally, India is likely to see faster growth rates in the secondary and tertiary sectors... a larger share of water available in India needs to be provided to these sectors.”

— Ramesh Ramachandran, Managing Director

Current market penetration remains remarkably low, with over 80% of identified potential land yet to adopt micro-irrigation. The total addressable market could expand even further if surface water usage is successfully integrated into irrigation networks.

“With this background, as we look at the potential and the existing penetration of micro-irrigation in India, we see only about 17-18% penetration of the total identified current potential, which is 72 million hectares. This estimated potential is based mostly on groundwater availability and some portion of surface water. If most of the surface water is also assumed to be available for agriculture, then the potential for micro-irrigation will just double from the 72 million hectares.”

— Ramesh Ramachandran, Managing Director

The company significantly outperformed the broader industry growth rate despite severe cost and funding headwinds. This suggests effective execution and market share gains even in a volatile operating environment.

“In what we estimate as an industry that may register a growth of 6-7% versus FY25, your company registered a growth of 14.8% with 315.8 crores in revenue versus the FY25 revenue of 275.1 crores. This growth was despite the challenges faced in Q4 FY26, a quarter which saw the highest ever raw material prices accompanied by the challenge of states not releasing funds as planned.”

— Ramesh Ramachandran, Managing Director

While the central government has improved its funding procedures, delays at the state level have caused industry-wide receivable balances to rise. This highlight the ongoing working capital risks associated with government-dependent revenue streams.

“Despite a smoother process of the Mother Sanction released by the Government of India, key states took longer to release the state mandatory funds and the state top-up funds. This led to a pile-up of receivables for the industry in FY26, which significantly increased over the FY25 opening status.”

— Ramesh Ramachandran, Managing Director

Management is responding to raw material price volatility by adjusting their product mix and timing inventory purchases more carefully. These tactical moves are essential for protecting margins when raw material costs spike unexpectedly.

“We definitely see volatility in raw material prices as one of the risks for FY27. There are ways we are looking to mitigate the risk by way of our company strategy. This includes focusing on specific products within our mix, selectively looking at price increases in certain markets, and being careful about when we procure raw material.”

— Ramesh Ramachandran, Managing Director

Transformers & Rectifiers (India) Ltd. | Small Cap | Heavy Electrical Equipment

Transformers & Rectifiers (India) Ltd. is a manufacturer of high-quality power, distribution, and specialty transformers for global markets. The company is strategically focused on backward integration and entering the high-barrier High Voltage Direct Current (HVDC) segment.

[Concall]

Management is actively investing in making their own components to reduce reliance on external suppliers and avoid disruptions. This strategic move is expected to improve their internal operations and protect them from sudden market price changes.

“The backward integration journey is well on course. Site preparation is progressing well and the plant and machinery orders for the long-lead items have already been placed. This backward integration, along with our technology, will enhance our in-house capabilities, reduce our dependency on external sources, and improve our supply chain resilience.”

— Satyen Mamtora, Managing Director and CEO

Management highlights that the HVDC market is an oligopoly with very few global competitors. By becoming the sole Indian entrant, the company is positioning itself to capture significant market share with high pricing power.

“There are only four major players in HVDC: Hitachi Energy, Siemens, GE, and I think TBEA. Since TBEA is not able to compete with us in other tenders, there are only three major competitors. We are the only Indian player entering the HVDC space.”

— Satyen Mamtora, Managing Director and CEO

The company is capping its order book to about two years’ worth of work to avoid being locked into low prices if raw material costs rise. This disciplined approach protects the company from the long-term pricing risks common in the heavy engineering sector.

“We are deliberately not taking orders currently because, as we previously mentioned, we want to limit our exposure to no more than 18 to 24 months. We want to be very selective in which orders we take in terms of delivery and pricing. As long as we are booked for the next 24 months, we do not want to take any further orders.”

— Satyen Mamtora, Managing Director and CEO

The company is nearly doubling its production capacity to meet strong demand for power infrastructure. Investors should watch for the successful commissioning of these plants as the primary driver for future revenue growth.

“Our Changodar facility will be up and running from Q2, and after that, we will take up the Moraiya plant expansion. After these two plants, the capacity would increase from 40,000 MVA to 75,000 MVA. The Changodar plant will start in H2.”

— Satyen Mamtora, Managing Director and CEO

Internal component production will soon cover all the company’s requirements, with potential to sell excess to competitors. This shifts the company’s business model toward becoming a critical component supplier, diversifying its revenue streams.

“The current plan is to cater to 100% of our needs. Going forward, with further expansion, we will also look at third-party sales. We will basically become CTC suppliers to other transformer manufacturers as well.”

— Satyen Mamtora, Managing Director and CEO

The order book has been ‘cleaned up’ of older, less profitable contracts that were weighing down earnings. This implies that the current multi-billion rupee backlog is composed of high-quality, profitable work that should improve overall financial performance.

“We have already executed the bulk of the older orders. For the last six months, we have been critically analyzing every order we take. None of the orders in the current 5,000 crore order book have issues in terms of margins or cost pass-through.”

— Satyen Mamtora, Managing Director and CEO

Retail

Havells India Limited | Large Cap | Fast Moving Electrical Goods

Havells India is a leading Fast Moving Electrical Goods (FMEG) company with a wide range of products including switchgear, cables, lighting, and fans. The company also has a significant presence in the consumer appliance market through its Lloyd brand and is expanding into the renewable energy sector.

[Concall]

The company is strategically aligning with solar module manufacturers to scale its renewable energy business. This move signals a long-term commitment to diversifying its product portfolio into high-growth green energy sectors.

“Our renewable energy initiatives continue to scale. As you are aware, during the period we have recently divested investments. This investment allows us to leverage Goldi Solar module manufacturing capabilities to expand our solar portfolio.”

— Anil Rai Gupta, Chairman and Managing Director

Industrial demand is currently the primary driver for the cables business as the residential wire segment faces a high base and dealer inventory adjustments. This highlights the company’s reliance on infrastructure and industrial recovery to sustain its growth momentum.

“The cable and industrial cable segment has grown much faster than the domestic wire segment. During the quarter, there was some destocking in domestic wires and a very high base last year. If you remember, Q4 FY25 saw a major buildup and stocking.”

— Anil Rai Gupta, Chairman and Managing Director

Profitability is being managed through phased price hikes triggered by both regulatory changes and volatile raw material costs. These adjustments are critical for maintaining margins as global supply chain disruptions continue to impact production costs.

“Price increases actually happened in two stages. The first increase happened due to the energy efficiency ratings change during the quarter. And then, of course, there are raw material changes which are happening.”

— Anil Rai Gupta, Chairman and Managing Director

Cooling product sales were delayed by a slow start to summer, but demand is now picking up in major regional markets. Normalized channel inventory by the end of the month suggests that primary sales to dealers will likely improve in the upcoming quarter.

“The first half of April was also slow. So there were some channel inventories, but now it is evening out. South and west have started a good summer and I think it is now coming in the north as well. So hopefully by the end of this month, there will be normalized inventories at the channel.”

— Anil Rai Gupta, Chairman and Managing Director

The company’s cable plants are running near full capacity, necessitating a second phase of expansion to meet demand. Timely execution of this new capacity is vital for capturing further growth in the industrial and infrastructure sectors.

“Whatever capacities were added, we have still been operating at high capacity utilization. More capacities will come up during the year. Hopefully, by the end of this year or early in Q1 next year, we will have the entire capacity we planned for.”

— Anil Rai Gupta, Chairman and Managing Director

Havells is committing 800 crores this year to expand manufacturing, while also pivoting toward long-term R&D investments. The pause in new capex for Lloyd indicates a shift in focus toward sweating existing assets and improving profitability in that segment.

“A significant amount of that is happening in this financial year, around 800 crores. The rest is a big investment going into a new R&D center, which will happen over the next 2 to 2.5 years. There is no major new capex in the Lloyd segment.”

— Anil Rai Gupta, Chairman and Managing Director

Automotive

SML Mahindra Limited | Small Cap | Commercial Vehicles

SML Mahindra is an Indian commercial vehicle manufacturer that produces a wide range of trucks and buses for cargo and passenger transport. Following its acquisition by the Mahindra Group, the company is focused on scaling its market share through technological integration and shared distribution networks.

[Concall]

Mahindra’s acquisition of a majority stake in SML Isuzu has triggered immediate integration efforts. This control allows Mahindra to drive strategic changes and operational improvements across the combined entity.

“On August 1, we completed the transaction and acquired a 58.96% controlling stake in SML Isuzu. The same day, the Board of Directors and the key leadership of SML was reconstituted. We immediately kicked off synergy and integration projects, which I will discuss briefly and update you on the key developments.”

— Vinod Sahay, Executive Chairman, SML Mahindra

SML is leveraging Mahindra’s scale and research capabilities to lower the costs of developing advanced features like ADAS. These R&D synergies directly improve margins and speed up product time-to-market.

“For example, there is a new ADAS (Advanced Driver Assistance Systems) regulation. This is a combined project for both companies, which has led to significant savings in both component pricing and a substantial reduction in development costs for SML. Sourcing synergies have kicked in, and SML will see the benefit in coming years.”

— Vinod Sahay, Executive Chairman, SML Mahindra

The company will maintain both brands separately to avoid cannibalization and protect existing dealer investments. This cautious approach ensures they retain customer loyalty while maximizing total market coverage.

“Regarding brand strategy, we have marked this yellow because anything facing customers, partners, or employees requires more time and thought. Both brands have their own strengths and stand for different things in the market; they mostly do not cannibalize each other. They have independent networks and are continuing as such.”

— Vinod Sahay, Executive Chairman, SML Mahindra

A significant replacement cycle in the cargo segment is driving volumes following regulatory reforms. This structural demand provides a favorable tailwind for sales growth in the coming quarters.

“Regarding cargo, the industry has huge pent-up demand from a replacement cycle and fleet expansion post-GST reform. We have clear action plans for various scenarios depending on how things evolve.”

— Vinod Sahay, Executive Chairman, SML Mahindra

The addressable market for commercial vehicles is vast and closely tied to India’s economic expansion. This macro-alignment suggests a durable long-term growth trajectory for the business.

“The long-term outlook for the industry is very positive as it is directly linked to India’s GDP growth. India is one of the four largest CV markets globally. The industry revenue pool for the 3.5-ton-plus segment where we play was 1.25 lakh crores last year.”

— Vinod Sahay, Executive Chairman, SML Mahindra

The upcoming launch of an electric bus marks the company’s entry into a high-growth, green mobility segment. Focusing on commercial viability for tenders indicates a disciplined approach to capital allocation in EVs.

“Our electric bus is under development, and we will be launching it this financial year. Post-launch, we will evaluate every tender on its commercial viability and return profile.”

— Vinod Sahay, Executive Chairman, SML Mahindra

TV Interviews

HCL Technologies on its Q4 Results

HCL Technologies is a leading Indian IT services company providing software and digital solutions to global enterprises. The company reported a softer-than-expected Q4, impacted by delays in deal closures and a slowdown in discretionary spending. Management indicated a moderate near-term outlook, with client-specific issues weighing on performance, even as the company focuses on improving deal quality and sustaining margins.

[Reference]

The company experienced a sudden drop in software procurement and reduced client spending on non-essential projects at the end of the quarter. This unexpected volatility in the telecom sector directly caused the firm to miss its internal performance targets.

“Specifically talking about the last quarter in March, we saw a slowdown in procurement decisions in the software business, which largely contributed to the lower performance than what we expected, and in services, we had some slowdown in discretionary spend, especially towards the end of the quarter. The slowdown in discretionary spend was restricted to the telecom sector, or you saw it in retail and manufacturing.”

— C Vijayakumar, CEO & Managing Director

Management clarified that recent project delays are linked to specific client decisions rather than a broad industry-wide collapse in demand. They emphasised that their primary market in North America continues to show healthy demand despite some softness in Europe.

“I would not do a broad brush of the sector itself. Specific clients had certain programs that they had deprioritised, and I talked about two situations in telecom and two SAP programs. North America overall, as a market, and whatever we are seeing remains quite robust.”

— C Vijayakumar, CEO & Managing Director

The company has set a lower growth target for the next fiscal year as AI-driven automation begins to reduce the cost of traditional service contracts. This expected deflation suggests that while efficiency is rising, it is currently putting pressure on overall revenue growth.

“In FY27, the 1.5 to 4.5% guidance midpoint is at 3%. So this is really 80 basis points lower than last year’s organic growth, and we did call out that AI will create some deflation in the existing services, which we said would be 2 to 3%.”

— C Vijayakumar, CEO & Managing Director

The company is prioritising long-term profitability and strategic focus over high-volume, low-margin contracts. By walking away from unattractive billion-dollar deals, management is signalling a commitment to maintaining healthy margins and investing in future technologies.

“I think what I’m very confident of is we have a growth model, we have focus on all the right areas, and we are less concerned about the traditional areas. That’s where I did call out that we walked away from more than a billion-dollar kind of booking because that did not make sense. We would rather spend the management team’s bandwidth and energy on newer areas which are going to create a lot more cascading positive impact.”

— C Vijayakumar, CEO & Managing Director

The company has increased its margin guidance due to internal efficiency gains and higher employee utilisation rates. Programs like Project Ascent are successfully driving structural cost savings that help offset wage inflation.

“We do see some scope in utilisation. We can possibly increase it further and get the benefit. That’s why we felt comfortable with 17.5 to 18.5%, and Project Ascent is working well for us. Last year, it gave us 80 basis point benefits, and we expect similar benefits next year as well.”

— Shiv Walia, Chief Financial Officer

Greenpanel Industries on Price Hikes

Greenpanel Industries is a leading manufacturer of MDF and wood panel products in India. The company has taken multiple price hikes to offset sharp inflation in raw material costs, particularly chemicals, while maintaining stable margins. Despite export disruptions due to Middle East tensions, domestic demand remains steady, with management continuing to focus on volume growth and market share gains amid a highly volatile environment.

[Reference]

The company has implemented total price hikes of 15% to offset massive spikes in raw material costs, indicating a clear focus on protecting margins amid inflation.

“The first one was 5%. On top of that, there is another 10% which has been implemented earlier this fiscal. So this is largely to counter the hyperinflation that we’ve seen on our raw materials.”

— Himanshu Jindal, Chief Financial Officer

Key chemical inputs, which form a significant portion of raw material costs, have seen sharp inflation due to geopolitical disruptions.

“Chemicals are largely under three heads, which are resins, dyes and wax, and we’ve seen the prices of the underlying elements, whether it’s methanol, phenol, melamine or wax, going up by anything between 50% to doubling or tripling as well in a short period post the onset of the war in the Middle East.”

— Himanshu Jindal, Chief Financial Officer.

Management believes current price hikes are sufficient to protect margins as input costs begin to soften.

“Whatever price increases that we’ve taken are sufficient at this point in time, but things are changing every single day. There is a bit of softening in certain elements already, so we’ll see. At this point in time, on chemicals, we are protected, timber is largely stable, so I don’t think there is a major impact on margins at this point in time.”

— Himanshu Jindal, Chief Financial Officer.

Exports to the Middle East, a key market, have been severely impacted due to geopolitical tensions.

“March, we did zero to the Middle East for obvious reasons. Now, how much would we be able to do in April, May, and June? We’ll have to see.”

— Himanshu Jindal, Chief Financial Officer.

Domestic demand continues to remain strong even after significant price increases, indicating healthy market absorption.

“No, not really. We implemented the 5% increase. Did it make sense? Yes, it made sense. Post the 10% hike coming in, did we get orders? We are getting orders.”

— Himanshu Jindal, Chief Financial Officer

Pearl Global Industries on US Sourcing Shift & Tariff Mechanics

Pearl Global Industries is a leading multinational apparel manufacturer providing end-to-end supply chain solutions to global retailers. The company operates diverse manufacturing facilities across India, Bangladesh, and Vietnam to serve major international brands in the US and Europe.

[Reference]

Large US retailers like Walmart are increasingly looking to India as a primary sourcing hub for garments. This shift suggests a significant long-term growth opportunity for Indian exporters to gain market share on global retail shelves.

“See, like India, in terms of competitiveness, as yet in that particular sector is just moving in. So Walmart has started investing and sourcing out of uh India, and they’re ramping it up. So you will see more and more of Indian goods in Walmart.”

— Pallab Banerjee, MD & Group President

Entering elite retail channels like Costco requires long-term planning and high manufacturing standards that India is just starting to meet. The company is working to match the integrated ecosystems of rival Asian manufacturing hubs to secure these high-volume contracts.

“Costco does planning of a very very long term, and they have a particular way of working. So it’s going to happen, but I think we are just I think entering into that uh global competitiveness of manufacturing. We have the other Asian tigers who have been uh there for some time, and uh they have created a very strong ecosystem to be in these stores.”

— Pallab Banerjee, MD & Group President

Most Indian garment exports use a shipping model where the US buyer, rather than the supplier, pays the import duties. This means that any future refunds on US tariffs will mostly benefit the retail customers’ balance sheets rather than the company’s own profits.

“If we are doing landed duty paid kind of shipments some of the vendors do India there are very few like you know when you’re talking about all these big suppliers to Walmart and Costos from the far east or from China they do a lot of their landed uh goods duty paid and all but otherwise most of the Indian manufacturers who are supplying to customers they do FOB shipment that means freight on road from here from the country of origin so the majority chunk of these tariff if if it is uh now rolled back and if there’s a refund that happens it will go to these retailers and the brands.”

— Pallab Banerjee, MD & Group President

MM Forgings on Demand Recovery

MM Forgings is an auto component manufacturer catering largely to global OEMs, with a strong exposure to the US market. Management highlighted that demand has picked up meaningfully in both the US and domestic markets, although inflation and fuel costs remain key variables to watch. While volumes are expected to improve, the overall mix may shift as the base expands, indicating steady but measured growth ahead.

[Reference - Time Stamp - 06:04 Minutes]

Management reports strong demand in both the US and domestic markets, indicating healthy order flow across geographies.

“Demand is pretty strong from the US as of now, and also within the country. So the US appears to be chugging along.”

— Vidyashankar Krishnan, Chairman & MD.

While demand is currently strong, management remains cautious about the impact of fuel prices and inflation on future consumption and policy.

“However, higher gasoline rates and mild inflation arising out of that, the impact of all these will be known over a period of time, which is why I think even the FED is on wait and watch.”

— Vidyashankar Krishnan, Chairman & MD

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Welcome to the 55th 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.

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In this edition, we have covered 17 companies across 5 industries and a few TV interviews

Information Technology

• Tata Consultancy Services

• Sagility India

Automobile

• Bosch Limited

Chemicals

• Krishana Phoshchem

Financial Services

• HDB Financial Services

• ICICI Prudential Asset Management

• Anand Rathi Wealth

• ICICI Prudential Life Insurance

• ICICI Lombard General Insurance

• Anand Rathi Share

Telecom

• Tejas Networks

TV Interviews

• Baba Jewellers

• Parle on cost shock

• Paras Defence on Bandak deal

• Mirae Asset Management on Energy transition

• Nomura on India

Information Technology

TCS | Large Cap | Software Services

Tata Consultancy Services (TCS) is a global IT services company with deep industry expertise. They offer a wide range of services including application development, digital transformation, AI, data and cloud services, engineering, cybersecurity, and products.

[Concall]

Despite macro uncertainty and geopolitical tensions, TCS delivered sequential growth and reported a strong deal pipeline. The order book performance in Q4 reflects continued client confidence in long-term transformation programs, especially AI-led engagements.

“Our order book performance was also very strong in Q4 with 12 billion in TCV, including three mega deals… This underscores the strength of our five-pillar strategy and our AI-led positioning across services.”

— K. Krithivasan, Chief Executive Officer & Managing Director

FY26 marked a structural shift in enterprise AI adoption. Clients are now investing in scaling AI rather than piloting use cases, which is expanding deal sizes and scope.

“For the first time since the advent of generative AI… the shift from experimentation to scaled AI deployment showed a marked improvement. AI became a core part of our every customer conversation and solutioning.”

— Aarti Subramanian, Chief Operating Officer & Executive Director

TCS is building large-scale AI infrastructure capacity through its HyperVolt initiative, positioning itself across the AI stack—from infrastructure to applications.

“Demand signals remain strong and are translating into structured engineering and commitments… this infrastructure layer is forming the foundation of our full spectrum play from infrastructure to intelligence.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Management acknowledged that AI could initially cannibalize traditional services but expects it to drive net growth over time.

“We expect AI revenue to increase and eventually overcompensate for the reduction in traditional service areas.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Early signs indicate that AI-led work delivers superior productivity, although margins are still evolving due to upfront investments.

“Revenue productivity in AI and data is definitely much better than the company average for traditional business… it is difficult to call out margins currently because we are in the initial phase of heavy investments.”

— Samir Seksaria, Chief Financial Officer

TCS is reinvesting margin tailwinds into AI capabilities, ecosystem partnerships, and talent, impacting near-term margins but building long-term growth engines.

“We consciously reinvested these tailwinds back into strengthening our capabilities and growth engines… including talent, partnerships, and go-to-market expansion.”

— Samir Seksaria, Chief Financial Officer

Annual increments effective April will impact margins in the near term, similar to prior cycles.

“For the wage increment cycle, you should expect a margin impact in the range of 150-200 basis points.”

— Samir Seksaria, Chief Financial Officer

BFSI clients continue to invest but are prioritizing efficiency, regulatory resilience, and outcome-driven transformation.

“Spending patterns shifted from experimentation to industrial business-driven transformation with emphasis on cost discipline and regulatory resilience.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Contrary to fears, clients are not postponing spending to wait for better AI models; instead, adoption is accelerating.

“We have not seen that… clients are quite interested in leveraging AI now… there is no major benefit in waiting for the next best model.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Management expects AI to be a long-term growth driver, contributing more than any deflation in legacy services.

“Our expectation is that it will be net accretive… over time AI-related revenue will grow faster than any deflation in other parts of the service model.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Management highlighted that Q4 marked the third consecutive quarter of sequential growth, despite a difficult external environment. Growth was broad-based across geographies, suggesting improving execution and demand stability.

“We are very pleased to announce the third consecutive quarter of sequential growth. We delivered a strong 1.2% sequential growth on a constant currency basis in the backdrop of intensifying geopolitical conflicts and macroeconomic uncertainty.”

— K. Krithivasan, Chief Executive Officer & Managing Director

TCS pointed to broad-based strength across key markets in Q4. This matters because it suggests the recovery is not being driven by one isolated geography.

“This momentum was broad-based across major markets with North America growing 1.4% quarter-on-quarter, UK growing 2.4%, and Europe growing 1% on a constant currency basis.”

— K. Krithivasan, Chief Executive Officer & Managing Director

TCS called out healthier additions across revenue bands after a gap of more than two years. That points to reduced client leakage and better wallet-share traction.

“Every revenue band saw healthy additions this quarter after a gap of over 2 years. This speaks to the early signs of stability and growth returning to our mid-sized and large accounts.”

— K. Krithivasan, Chief Executive Officer & Managing Director

TCS maintained tight execution discipline through a weak revenue year. Margin delivery stands out because the company was simultaneously investing in AI, talent, and partnerships.

“We maintained a strong focus on execution to deliver an operating margin of 25%. This is the highest operating margin achieved in the last 4 years.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Management said clients are showing more willingness to enter multi-year transformation partnerships. That reflects both vendor consolidation and trust in TCS’ delivery capabilities.

“Clients showing greater willingness to commit to long-term multi-year multi-million dollar partnerships. This reflects the trust they place in us through uncertainty on value at scale over extended transformation journeys.”

— K. Krithivasan, Chief Executive Officer & Managing Director

TCS increased external consultant spending as part of the “build” strategy. This indicates near-term capacity support while internal AI and niche capabilities are being scaled up.

“We saw higher external consultant costs of 40 basis points to capture the demand and to ensure delivery timelines and quality were protected, while we continue to scale internal capabilities.”

— Samir Seksaria, Chief Financial Officer

TCS is framing modernization not just as cost takeout or tech refresh, but as essential preparation for scaled AI adoption. That helps expand the strategic value of these programs.

“While our customers want to accelerate AI adoption, their current enterprise stack lacks the readiness to scale. We are working with our customers to address this gap by upgrading their infrastructure to be scalable and secure, modernizing their core applications, and setting the data foundation.”

— Aarti Subramanian, Chief Operating Officer & Executive Director

Instead of only pursuing large, long-cycle transformation programs, TCS has built a repeatable deployment model to solve high-value client problems quickly.

“We have created an AI Acceleration Playbook: Innovate with AI, Build with AI, and Scale with AI… to solve high-value business problems in rapid deployment cycles of 12-16 weeks.”

— Aarti Subramanian, Chief Operating Officer & Executive Director

TCS sees AI-led renewals, cost optimization, and vendor consolidation as the main routes to market share gains. This is important in a slow-growth environment where wallet-share matters more than market growth.

“This aspiration is powered by capitalizing on AI-led renewals, vendor consolidation, and cost-optimization deals resulting in market share gains.”

— K. Krithivasan, Chief Executive Officer & Managing Director

Sagility India | Small Cap | Software Services

Sagility India is a pure-play healthcare focused services provider offering technology-enabled business solutions to clients in the U.S. healthcare industry. Their clientele includes Payers such as U.S. health insurance companies and Providers like hospitals, physicians, and medical devices companies.

[Concall]

The core investor concern was whether AI could deflate Sagility’s revenue model the way automation pressure has shown up in some IT services businesses. Management’s answer was that while AI will create efficiency-led revenue pressure in some scopes, it should also expand Sagility’s addressable work through broader, outcome-led contracts and deeper client integration.

“We are looking at AI as a force multiplier. We are not looking at AI as a disruptor… today with AI and Agentic AI, we think it’s a capability that will really open up additional opportunities for us… We believe that this is essentially going to help us even grow faster than we have in the past.”

— Ramesh Gopalan, Group CEO and Managing Director

Sagility says current demand backdrop is actually a tailwind, not a drag

“The cost, the profitability challenges are real and in that environment over the last three, four years we have continued to show sustained growth across our portfolio of clients.”

— Ramesh Gopalan, Group CEO and Managing Director

To support the above point, management disclosed recent portfolio growth metrics. This is one of the clearest hard datapoints in the transcript and matters because it suggests Sagility is still gaining wallet share even as payer clients face utilization and margin pressure.

“You can see in the last 12 months which is December 2025 over 2024, the top five grew close to 10%. 9.9% is the growth of our top five and if you look at the rest of the clients it’s even more healthier. It’s 28% growth.”

— Ramesh Gopalan, Group CEO and Managing Director

When asked directly what growth rate management was willing to commit to, the CEO avoided formal near-term guidance ahead of the May earnings call but still offered a clear directional framework.

“We believe that there is no reason for us not to grow at historical growth rates… what we see, at least for the near term… is we will continue to grow at historical rates in the, like I said, low double-digits to mid-teens kind of a number.”

— Ramesh Gopalan, Group CEO and Managing Director

Management drew a sharp distinction between taking cost out of an existing process and driving down medical costs for payers. This matters because MLR-linked work potentially expands Sagility’s revenue pool rather than just protecting current scopes from automation.

“All the discussion then no longer happens on I’m spending $10 million on my Care Management and I have to bring it down to $9 million… when we are having discussions in MLR Reduction it’s about the impact rather than just getting 10% saving on a given process like a managed services model.”

— Roopam Narayan, Executive Vice President, Solutions & Practice

Management says the market is expanding, not shrinking, because clients are adding spend to high-ROI care programs

“Clients are actually adding the cost to come with new programs in Care Management, because it’s likely to have 3x, 4x, 5x ROI… So, it’s a new market for us. So that’s where we are saying is that market is actually expanding for us including AI platforms and not reducing.”

— Roopam Narayan, Executive Vice President, Solutions & Practice

Sagility used this as proof that its value proposition is increasingly enterprise cost-avoidance rather than invoice reduction. The remark is material because it demonstrates measurable savings from domain-led point solutions layered with process mining, analytics, and agentic automation.

“For that particular use case for 2025, we saved close to around $15 million of late claim payment interest.

— Srikanth Lakshminarayanan, Senior Vice President, Healthcare Practice

Management also cited a broader transformation example where most value was not from simple invoice cuts. That distinction matters because it supports the argument that AI and transformation can deepen Sagility’s relevance even if unit pricing in individual tasks declines.

“Say one of the Medicare national plans, our admin cost reduction has been close to around $11.5 million for last year. Of this only 10% to 12% are probably invoice reduction. Most of it is enterprise transformation…”

— Srikanth Lakshminarayanan, Senior Vice President, Healthcare Practice

The clinical section was one of the strongest in terms of quantified ROI. Management argued that combining utilization management, care management, and post-acute interventions through AI-enabled workflows can reduce both immediate and downstream medical costs.

“UM typically can reduce anywhere between 5% to 15% of medical spend… On the left side, we just enabled and enhanced their UM integrated program, resulting in about a $24 million savings for not spending too much more on the UM operation.”

— Krithika Srivats, Senior Vice President, Clinical Practice

Payer revenue mix is roughly one-third claims, one-third clinical/payment integrity, one-third member/provider lifecycle

“Our payer revenues are around 90% of our total revenues. One-third of our payer revenues are claims revenues, one-third of our payer revenues are your clinical and payment integrity and the other one-third is a member and provider life cycle.”

— Abhishek Kayan, Deputy Chief Financial Officer

Management acknowledged the key investor concern — AI could reduce per-unit revenue. However, they framed this as a trade-off where total contract value expands through scope consolidation and outcome-based pricing.

“Yes, in some areas AI may reduce the unit price… but because we are able to take on a much larger scope and deliver outcomes, the overall deal value becomes significantly higher.”

— Ramesh Gopalan, Group CEO and Managing Director

This is a structural shift in the business model. Sagility is actively moving away from traditional FTE billing toward outcome-linked contracts, especially in AI-led engagements.

“We are increasingly moving towards outcome-based pricing models rather than traditional FTE-based pricing.”

— Ramesh Gopalan, Group CEO and Managing Director

Management emphasized that discussions are evolving beyond cost reduction to measurable business impact — a key change in positioning.

“The conversation is no longer just about reducing cost… it is about delivering measurable value and outcomes to the client.”

— Roopam Narayan, Executive Vice President, Solutions & Practice

Reinforcing earlier points on Synchrony, management highlighted that platform ownership fundamentally changes contract durability.

“Once the platform is embedded into the client’s operations, the switching cost becomes significantly higher.”

— Roopam Narayan, Executive Vice President, Solutions & Practice

Management sees the current phase as early adoption, with a sharper ramp expected as clients move from pilots to scaled deployments.

“We are still in the early stages… but we expect adoption to accelerate meaningfully over the next 12 to 24 months.”

— Ramesh Gopalan, Group CEO and Managing Director

This is a strategic positioning shift — moving up the value chain from execution to transformation ownership.

“We are positioning ourselves not just as an operations partner but as a transformation partner to our clients.”

— Ramesh Gopalan, Group CEO and Managing Director

Automobile

Bosch Limited | Large Cap | Auto Components

Bosch Limited is a leading provider of technology and services in the mobility and industrial sectors within India. The company is currently consolidating its market position by acquiring Robert Bosch India Chassis to strengthen its portfolio in advanced safety and braking systems.

[Concall]

Bosch’s newly acquired business produces safety components that work regardless of whether a vehicle uses a gas engine or an electric motor. This ensures the company remains relevant and gains more value per vehicle as the market shifts toward electric mobility.

“The RBIC product portfolio is largely powertrain agnostic, providing flexibility as OEMs transition platforms and diversify their model lineups. With increasing EV penetration, RBIC is well-positioned as it drives significant demand for next-generation braking solutions such as iBooster and Integrated Power Brakes, which are essential for regenerative braking integration, improved efficiency, and enhanced performance.”

— Management, Company Representative

Stricter government safety regulations for Indian vehicles are creating a reliable and long-term source of demand for the company’s braking systems. Investors should see this as a predictable growth driver that is less dependent on general economic cycles.

“The growth for this portfolio is driven by structural tailwinds. First, a strong regulatory push. We are seeing a clear roadmap for enhanced vehicle safety in India with mandates for airbags, ABS, ESP, and the adoption of the Bharat New Car Assessment Program. This continued tightening of safety norms provides a sustainable and predictable demand catalyst for RBIC’s core products.”

— Management, Company Representative

Integrating the chassis business will significantly increase Bosch’s total revenue and overall operating profit margins. This demonstrates that the acquired business is more profitable than Bosch’s existing portfolio, leading to better financial health for the group.

“Bosch Limited’s consolidated revenue from operations will increase by 22% from 18,000 crores to 22,000 crores on a pro forma basis for FY 2025. Looking at the historical trend on a comparable pro forma basis, the revenue from operations CAGR would have been 11.2% compared with 10.1% over FY 2023-25. The FY 2025 EBITDA margins will improve from 12.8% to 13.9% on a pro forma basis led by the higher margins of RBIC.”

— Management, Company Representative

Management decided against acquiring the automotive electronics unit because it currently requires too much capital and doesn’t offer high enough profits. This shows a disciplined approach to capital allocation, prioritizing high-margin acquisitions over just increasing size.

“At this point, we did not find a good commercial logic to bring that business in when it is not currently accretive, does not contribute much to margins, and requires heavy investment intensity. We thought it was best to leave it out for now. Going forward, we constantly look at opportunities and what makes sense from a Bosch Limited point of view, while the Bosch Group monitors the overall India strategy.”

— Management, Company Representative

The market is moving toward more advanced Electronic Stability Programs, which require a higher number of sensors per vehicle. This trend allows Bosch to sell more components for every car manufactured, driving organic revenue growth.

“We have seen a heavy shift towards ESP systems, and the largest part of our activity now involves ESP. All of this is coupled with a significant increase in the number of sensors introduced whenever there is a system upgrade. More sensors bring in additional revenue.”

— Management, Company Representative

Bosch saves money on expansion by repurposing manufacturing equipment from its global parent company for use in India. This strategy reduces the amount of new investment needed and helps maintain high profit margins.

“We have carefully and cleverly deployed capex in a modular way, utilizing idle lines from the international production network within the Bosch Group to set up capacities in India. This led to significant improvements in the bottom line. We view these margins as stable.”

— Management, Company Representative

Management issued a small amount of new shares to global parent entities to ensure they keep a direct stake in the Indian business. While the deal is mostly cash, this structure maintains long-term alignment between the Indian subsidiary and the global group.

“To ensure that continuity within the Bosch Group, we opted for a very small preferential allotment in Bosch Limited for both those companies. This was a preferential issue to the promoters. We appreciate the feedback on our governance framework. We constantly try to improve our governance, and we will take your suggestion into account.”

— Management, Company Representative

A partnership with Tata AutoComp is being used to scale up the production of electric vehicle parts like motors and axles. This collaboration combines Bosch’s technology with Tata’s local supply chain to capture the growing EV market more effectively.

“We believe the JV is a very good step towards the consolidation of volumes and creating synergies. Tata AutoComp has a great track record and an established supply chain. We have significant technology regarding e-axles. Given how the market is evolving, we feel a joint venture approach to build synergies and consolidate efforts is the best way to create customer value during this electrification wave.”

— Management, Company Representative

By sourcing more materials and small parts within India, the company has managed to keep its production costs low. This focus on local manufacturing is a key reason why they have been able to improve their profit margins over time.

“Additionally, localization has a major impact—not just for finished goods but also for child parts and raw materials. Our manufacturing is very efficient and quality-focused, which helps maintain a lower cost base. These lean structures have significantly improved both top and bottom lines.”

— Management, Company Representative

Despite spending 9,000 crores on the acquisition, the company will remain debt-free and hold significant cash reserves. This strong financial position ensures they can continue to invest in new projects without needing to borrow money.

“The enterprise value includes cash held within the company, which is sufficient for its operation. The 10,000 crore shown on our balance sheet is recorded at cost; the market value of those funds is much higher. Both Bosch Limited and the acquired entity have very positive cash flows. After the deal, both companies will be debt-free and will have sufficient funds for future capex and activities.”

— Management, Company Representative

Chemicals

Krishana Phoschem | Small Cap | Fertilizers

Krishana Phoschem is a company specializing in the manufacturing of specialized chemicals for the textile industry. Initially engaged in BRP production, it has expanded to include SSP and GSSP. The company now diversifies into intermediate dyes and other allied chemicals, providing products like H acid, E K acid, and PNCBOSA.

[Concall]

Global input costs for ammonia and sulfur increased significantly from mid-February due to supply constraints and higher logistics costs, creating cost pressure for the industry.

“From mid-February onwards, the global market witnessed a firming trend driven by supply-side constraints, tightness in gas and logistics, and higher freight costs. As a result, ammonia prices moved up sequentially during the quarter. Sulfur prices also firmed up towards March.”

— Praveen Oswal, Managing Director

The industry’s high dependence on imported intermediates makes it highly vulnerable to global price fluctuations, directly affecting the company’s cost structure.

“Given the industry’s reliance on imports for 90% of key intermediates, global movements have a direct impact on our cost structure.”

— Praveen Oswal, Managing Director

Integrated fertilizer manufacturers with diverse product offerings are strategically better equipped to manage volatile input costs and adapt to changing market demands.

“As a result, integrated players with diversified product portfolios are structurally better positioned to navigate input volatility while capturing evolving demand patterns.”

— Praveen Oswal, Managing Director

The company successfully completed a major capacity expansion, increasing NPK and DAP capacity by 50% and total phosphatic fertilizer capacity to 6,15,000 metric tons per annum.

“During the year, we successfully completed a significant capacity expansion. NPK and DAP capacity was enhanced by 50% to 4,95,000 metric tons per annum, and existing SSP capacity stands at 1,20,000 metric tons per annum, taking total phosphatic fertilizer capacity to 6,15,000 metric tons per annum.”

— Praveen Oswal, Managing Director

The company secured a 10-year green ammonia agreement, enhancing future supply security, supporting decarbonization efforts, and improving long-term cost predictability.

“As part of our long-term sustainability strategy, Krishna Phoschem Limited has entered into a 10-year green ammonia agreement under India’s National Green Hydrogen Mission for 70,000 metric tons per annum. This initiative enhances supply security, supports decarbonization, and improves long-term cost visibility.”

— Praveen Oswal, Managing Director

Despite supply disruptions, domestic fertilizer demand is inherently stable and secure due to India’s large population and reliance on agricultural output, with any demand drops impacting imports first.

“The 140 crore population of India needs to be fed. Unlike consumer items, you cannot compromise on agricultural output. Farmers must produce, and they need fertilizers. Domestically manufactured products will not face demand pressure. Even if demand were to drop hypothetically, India imports almost 40% of its fertilizer requirements. As domestic manufacturers, our demand is secure; it is the imports that would be affected first.”

— Praveen Oswal, Managing Director

The company plans to protect margins by passing on reasonable price increases to customers, anticipating a slight margin pressure in Q1 but expecting to recover afterwards.

“We are currently working on how to protect our margins. Reasonable price increases will be passed on to the customer because the subsidy has already been announced. While we expect some downturn in the first quarter, we will be able to pass on price hikes to customers after that.”

— Praveen Oswal, Managing Director

Green ammonia supply is 3 years away, but current domestic ammonia supply has been restored, easing immediate concerns, and future green ammonia agreements will provide long-term strength.

“Regarding green ammonia, that will be available after 3 years. For the time being, we rely on standard ammonia. Recently, supply to domestic ammonia manufacturing has been restored to 100%, and we expect supply to ease out in the next 7 days. Further signing of green ammonia agreements will strengthen the company in the long term.”

— Praveen Oswal, Managing Director

Krishna Phoschem is one of only three major players in India with access to high-grade rock phosphate, indicating a significant competitive barrier to entry for others.

“As far as high-grade rock phosphate is concerned, there are only three major players in India. One is the Government of Rajasthan, another is Madras Agrochemical, and the third is Krishna Phoschem Limited. It is not easily available to anyone else.”

— Praveen Oswal, Managing Director

Despite a slightly weaker monsoon forecast, the company expects stable fertilizer demand due to healthy reservoir levels and no anticipated stress on the agricultural sector.

“A forecast of 95% is not a major variation. Major reservoirs and water levels are high compared to previous times. We are not expecting any stress on the agricultural sector, and fertilizer demand should remain stable.”

— Praveen Oswal, Managing Director

FY27 margins are expected to be slightly lower than FY26 due to cost absorption across the value chain, but the company is committed to overall profitability despite potential Q1 challenges.

“Margin will be under pressure. The margins we had in FY26 may not be fully possible; there will be a slight reduction as some costs are absorbed by us, some by the government, and some passed to the farmer. We will try our best to maintain profitability. While Q1 may be difficult, we are committed to sustaining profits over the full year.”

— Praveen Oswal, Managing Director

Following the recent subsidy announcement, the company anticipates increasing product MRPs by 20-25% in the near future.

“Since the subsidy announcement just came out, we are expecting a price increase of 20-25% in the coming days.”

— Praveen Oswal, Managing Director

Financial Services

HDB Financial Services | Mid Cap | Financial Services

HDB Financial Services Ltd., a subsidiary of HDFC Bank, is India’s 7th largest retail-focused NBFC with a ₹1068.78 billion loan book as of Mar 31, 2025. Classified as NBFC-UL by RBI, it offers diverse loans via Enterprise, Asset, and Consumer Finance.

[Concall]

The company is utilizing AI bots to handle more than half of its early-stage collection reminders, leading to measurable efficiency gains. This technological intervention helps stabilize credit costs and reduces the manual labor required for collection efforts.

“In Q4, over 50% of our customers who needed a nudge were assigned a bot, which resulted in improved collection efficiency of about 25 basis points in the early buckets. As I said, this is still an early stage and we have seen a lot of improvement going forward.”

— Ramesh Ganesan, Managing Director and CEO

Management has set a target for loan book growth that significantly outperforms India’s nominal GDP. This target suggests high management confidence in taking market share from competitors over the next few years.

“We have always stated that in the medium term, we look at a nominal plus 6-7% growth. We are very focused on making sure we deliver on that.”

— Management, HDB Financial Services

Despite market fluctuations, the company has successfully maintained its lending rates to protect profitability. This disciplined approach ensures that growth does not come at the expense of margin dilution.

“One of the biggest things we pride ourselves on is holding our rates over the last three quarters. That continued this quarter; across every single product, we have made sure we held our rates to ensure good risk-adjusted returns.”

— Jaykumar Shah, Chief Financial Officer

HDB’s shift toward paperless, point-of-sale credit delivery is reducing the company’s reliance on physical branch infrastructure. This fundamental change in operations supports a more lean and efficient growth model going forward.

“The digitalization of processes has changed everything. Sales officers no longer carry files to branches; credit is delivered at the point of sale. We don’t need a physical office in immediate proximity to the salesperson anymore.”

— Management, HDB Financial Services

The company is targeting a major shift toward financing used vehicles to increase its presence in a high-yield market segment. This strategic pivot could drive higher average yields for the asset finance vertical over the medium term.

“In asset finance, we are aiming for a 50/50 mix between new and used over a 4-year period. We want to grow our used business significantly, as we are much smaller than established players.”

— Management, HDB Financial Services

HDB is successfully pivoting toward digital-first lending, which has already led to a more than doubling of disbursements via its self-service platform. Investors should view this as a positive driver for lowering acquisition costs and improving scalability.

“Focus on digital sourcing channels through our DIY (Do It Yourself) platform helped us multiply our disbursements by about 2.2 times in FY26, and we expect this momentum to continue. We have made significant investments in our technology capabilities including AI, which has started yielding positive results for our customers.”

— Ramesh Ganesan, Managing Director and CEO

Management highlighted that Q4 saw the highest-ever quarterly disbursements, supported by improving demand across segments. This is a key leading indicator for loan book growth into FY27.

“Disbursements for the quarter ended March 31, 2026, were ₹19,922 crores… an all-time high for HDB.”

— Jaykumar Shah, Chief Financial Officer

Net interest income saw robust growth both sequentially and annually, reflecting a combination of loan book expansion and improved margins.

“Net interest income for the quarter was ₹2,399 crores, an increase of 5% quarter-on-quarter and 21.6% year-over-year.”

— Jaykumar Shah, Chief Financial Officer

Management indicated a conscious strategy to reduce reliance on volatile short-term funding and maintain stability in funding costs.

“We still have very low CP levels as dry powder and a healthy mix of bank loans below 50%.”

— Jaykumar Shah, Chief Financial Officer

After a period of caution, management expects unsecured lending to pick up again as portfolio quality stabilizes.

“We expect positive momentum on our unsecured business going forward, where we have seen significant improvement in asset quality.”

— Ramesh Ganesan, Managing Director & Chief Executive Officer

Growth in consumer finance is being driven by strong demand in discretionary segments, reflecting improving consumption trends.

“This was led by consumer durables followed by auto loans… we expect momentum to continue.”

— Ramesh Ganesan, Managing Director & Chief Executive Officer

Management highlighted external macro risks that could impact growth and inflation, though no immediate impact is visible yet.

“The West Asia conflict and probable weather disruption from El Niño may have an impact on growth and inflation… [these] remain key monitorables.”

— Ramesh Ganesan, Managing Director & Chief Executive Officer

ICICI Prudential Asset Management | Large Cap | Financial Services

ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI Bank and Prudential plc, and one of India’s largest AMCs. It manages mutual funds, PMS and AIF products across equity, debt and hybrid categories with strong nationwide distribution.

[Concall]

Management observed that industry-wide equity inflows increased even as benchmark indices faced significant declines during the quarter. This trend suggests that retail investor commitment to equity remains resilient despite short-term market volatility.

“During this quarter, the equity category continued to be at the forefront, alluring net inflows of 1.24 trillion rupees. It is important to note that the industry level net flows in equity have seen a positive increase quarter-on-quarter, despite declining markets.”

— Management

Fintech platforms have become the dominant channel for new customer acquisition, accounting for more than half of industry growth. The AMC’s deep integration with these platforms ensures it remains a primary beneficiary of the rapid digitization of Indian finance.

“Upwards of 50-60% of new customers across the industry come through fintechs, and we benefit as one of the largest players integrated with them. Regarding our investment book, a large component is seed money for our products. We look for opportunities across asset classes, so the deployment in REITs and AIFs reflects where we find value.”

— Management

The launch of Specialized Investment Funds (SIF) targets a new segment of retail investors without cannibalizing the existing high-ticket PMS business. This tiered product approach allows the company to capture a wider range of the wealth spectrum while maintaining its premium services.

“The customers in SIF are largely fresh. There is no significant migration from PMS because the ticket size for SIF is 10 lakhs compared to 50 lakhs for PMS. Regarding SIP flows, many customers look at sectoral and thematic funds. We emphasize asset allocation, so we see significant flows into multi-asset funds. Regarding customer behavior, young first-jobbers entering through digital platforms are maintaining their SIPs. In fact, many people increase their SIPs when markets are down, treating it as an opportunity.”

— Management

Management is prioritizing the acquisition of ‘digital native’ investors who now view mutual funds as their core savings tool. By leveraging its established digital infrastructure, the company aims to secure long-term growth from a younger, tech-savvy demographic.

“A lot of young Indians are looking at mutual funds as a primary investment vehicle rather than an alternate one. These digital natives are a major focus area. Our long history and investment in digital platforms give us an edge in capturing a large share of digital customers.”

— Management

New regulatory guidelines for Total Expense Ratios are expected to compress gross yields by 3 to 4 basis points in the upcoming quarter. The company’s ability to renegotiate distributor payouts or optimize costs will be critical in protecting net margins from this regulatory headwind.

“If you are referring to regulatory changes effective April 1 regarding TER, there is an impact of 3 to 4 basis points on a gross basis before any payouts. We have identified certain steps and are in discussions. We will have a crystallized impact within the next two months.”

— Management

Management highlighted that investors are increasingly using market dips as buying opportunities rather than pulling capital out. This behavioral shift supports the durability of the company’s equity AUM even during geopolitical or economic uncertainty.

“In the past, people have seen so many V-shaped recoveries that in the month of March, while I agree there is a spillover, people have been investing on the days the markets have been falling. Inflows have continued on those days. Until now, the trends that were there in March and April are continuing.”

— Management

Anand Rathi Wealth Limited | Mid Cap | Financial Services

Anand Rathi Wealth Limited is one of India’a leading non-bank wealth management firms catering to high and ultra-high net worth individuals. The company specializes in providing data-driven wealth solutions through mutual fund distribution and structured products with a focus on risk-adjusted returns.

[Concall]

Management confirmed that the company has achieved a major milestone by crossing the INR 1 trillion mark in assets under management. This scale highlights the firm’s growing market presence and its ability to capture equity market upside for its clients.

“As of yesterday’s date, we have crossed INR1 lakh crores of AUM post the recent positive movement in the equity markets. This is a 5-digit number. So we were very intrigued to see when we would reach there.”

— Feroze Azeez, Joint CEO

The company has maintained a consistent trajectory of high profitability growth for over four years regardless of market cycles. This reliability in earnings growth distinguishes the firm from its peers in the broader financial services sector.

“This is our 18th quarter where we’ve been able to declare PAT growth Y-o-Y greater than 20%, which is, again, a rarity in Nifty 500. We are one of the very few, which can be counted on a fingertip of how many companies have been able to achieve that feat.”

— Feroze Azeez, Joint CEO

Management has provided a forward-looking roadmap for the next fiscal year targeting significant growth in both revenue and profit. The conservative guidance philosophy suggests that these targets represent a floor for the company’s expected performance.

“We have given FY ‘27 revenue guidance of INR 1,415 crores and PAT guidance of INR 460 crores, again, going with the principles which Rakesh sir Rawal and Rathi ji has always taught and every elder in the company has taught us that under commit, over deliver. Under the same principle, we are guiding you INR 1,415 crores and INR 460 crores for PAT.”

— Feroze Azeez, Joint CEO

The company reported an industry-leading return on equity, reflecting an extremely capital-efficient business model. This high ROE indicates that the firm generates superior value from its equity base while managing significant operational costs like ESOPs.

“Return on equity on an annualized basis stood at best in industry at 46.74% for FY ‘26. Reported number that includes fair value gains on investment of INR 54.6 crores, ESOP expenses of INR 39.3 crores and the related combined tax effect of INR 3.8 crores, total revenue for FY ‘26 was reported at INR 1,253 crores.”

— Jugal Mantri, Group CFO

Management clarified that their growth is driven by human capital and relationship quality rather than intensive financial capital. Investors should view the firm as a talent-led services business where scaling requires deliberate hiring and training of relationship managers.

“Wealth management is not a capital business. A relationship manager cannot handle thousands of clients. The business is actually a linear business, not an exponential business.”

— Feroze Azeez, Joint CEO

The company prioritizes building a strong distribution network and client trust before aggressively expanding into product manufacturing. This strategy mitigates the reputational risks associated with product failures that can damage a wealth management brand.

“Ideally, manufacturing mistakes are very, very, very, very scarring to a franchise. So quite a few people build a wealth management business starting manufacturing on the day zero. So we believe this is a backward integration business. Distribution is first, manufacturing later.”

— Feroze Azeez, Joint CEO

The firm focuses on internal talent development rather than hiring expensive external talent to ensure a consistent corporate culture. Having leadership active in client relationships ensures the management remains grounded in the realities of the business.

“So lateral hires cannot be a substantive portion of your strategy. Every leader in the company has to be an RM first. Very tough to achieve, easy to speak. So CEO is an RM, joint CEO is RM, unit head is RM, team leader is an RM.”

— Feroze Azeez, Joint CEO

Management does not anticipate significant margin pressure on mutual fund yields despite potential regulatory changes in fee structures. Their historical shift to a trail-only model has already insulated the business from the most aggressive commission cuts.

“Do I see any material change in 1.09, not significant. Like we have guided, we are at the fag end of any cycle, like 2016, we went all trail before SEBI made it mandatory in 2018, okay? That’s something which I take pride in till date because we were the first one who’s voluntarily said, I don’t want upfront income.”

— Feroze Azeez, Joint CEO

The company is planning for long-term growth by utilizing product features like rollover options that increase asset stickiness. This structural setup provides high revenue visibility and reduces the risk of massive sudden outflows.

“We work on a plan of not 2026. We play -- we work on a plan of 2031, which is 5-year hence, because most of our structured products have a rollover option now. So 99% of our business comes with a rollover option that implies. If clients, no need money, it rollover.”

— Feroze Azeez, Joint CEO

The firm attracted positive net inflows during a period when the broader industry saw negative net purchases in active equity funds. This outperformance suggests that their client base is more resilient and disciplined during market volatility.

“What I’m happy about as a professional is that in a year or a quarter like last year, last quarter, we got monies. People lose money also, right? Today, if you see industry’s net flows ex the SIP number, today, AMFI has given the number just now, INR 32,000 crores is the SIP number. Last month, the number was -- if you remove the SIP number, the net purchase was negative in equity 3 category.”

— Feroze Azeez, Joint CEO

The company is seeing an increase in inbound interest from ultra-high-net-worth individuals without active solicitation. This organic pipeline from extremely wealthy families signals a strengthening brand that appeals to the market’s top tier.

“It is surprising that people with INR400 crores are reaching out, INR 500 crores. I did one meeting in Gurgaon. We had never seen these green shoots of people who need a service of wealth management reaching out to us and uncomplicated appealing to a large guy.”

— Feroze Azeez, Joint CEO

ICICI Prudential Life Insurance Company Limited | Large Cap | Life Insurance

ICICI Prudential Life Insurance is a leading private sector life insurer in India providing a variety of protection, savings, and retirement products. The company focuses on a diverse distribution network and technology-driven operational efficiency to drive value for shareholders and customers.

[Concall]

The company is transitioning its financial reporting to Ind AS standards to better align with international insurance practices. This move is intended to provide investors with a more transparent and comparable view of the company’s financial value creation.

“On the regulatory front, we welcome the transition to Ind AS, which will align our financial reporting with global standards. This shift enhances transparency and market comparability, ensuring that our financial statements reflect an improved picture of value appreciation.”

— Anoop Bagchi, MD and CEO

Recent GST reforms in late 2025 have acted as a massive catalyst for demand in the retail protection segment by reducing costs for customers. This structural change significantly accelerated the company’s sum assured growth compared to previous periods.

“Life insurance products, particularly the retail protection segment, received a significant boost, partly aided by the GST reform effective September 2025. The retail sum assured growth for the industry was higher by 2.5 times in the post-reform period as compared to the pre-reform period.”

— Anoop Bagchi, MD and CEO

Investments in digital tools have successfully lowered the expense ratios for the company’s savings business even as assets under management continue to scale. Investors should view this as a sign of operating leverage and improving profitability within the core business segments.

“Notably, technology and digital solutions have enabled us to increase efficiency, resulting in a reduction of 40 basis points to 12.1% in our savings cost-to-premium ratio during FY26. Our AUM stood at 3.14 trillion and a total in-force sum assured grew by 16.9% year-on-year to 46.11 trillion at March 31, 2026.”

— Dhiren Salian, CFO

Management views the retail protection market as largely under-penetrated, suggesting a very long runway for growth ahead. This high-margin segment is being prioritized as a key driver of future Value of New Business (VNB).

“With an estimated 13% of the addressable population currently being covered through retail protection, we believe this segment offers a multi-decadal growth opportunity. Group protection, which includes credit life and group term business, grew by 7.1% year-on-year in FY26.”

— Amit Palta, Chief Product and Distribution Officer

The company successfully increased its profitability margins during the fiscal year through a better mix of products and favorable economic adjustments. This expansion indicates that the company is extracting more value from each unit of new business sold.

“VNB margin expanded by 190 basis points year-on-year to 24.7% in the current year. Margin expansion has been led by improvements in the new business profile and economic assumption changes.”

— Dhiren Salian, CFO

A specific annuity product line suffered from higher-than-expected policy cancellations due to changing regulations and market liquidity needs. This variance represents a risk to long-term embedded value if customer behavior remains volatile in this product category.

“Persistency variance is a negative 2.64 billion, which is largely on account of the 100% premium back annuity products where the persistency experience fell short of long-term assumptions. As you realize, it was an industry-first product and coincided with regulatory discussions aimed at increasing surrender values for traditional savings products during the year.”

— Dhiren Salian, CFO

Management has adjusted its forward-looking margin assumptions to reflect current challenges in policy retention and expenses. This resets the baseline for future earnings expectations, making them more resilient to recent negative trends.

“Whatever is known at this point, we will incorporate into our assumption setting. If experiences are temporary or pertain to specific portfolios, we allow those to go through the variance. At this point, we have factored what we know on persistency, mortality, and expenses into our margins.”

— Dhiren Salian, CFO

The transition to Ind AS reporting is facing minor delays as the company seeks more clarity on specific accounting inputs like the Contractual Service Margin (CSM). While the company is ready, investors can expect a gradual shift as these technical details are finalized with regulators.

“We are technically live, but as approved by the board, we will be seeking a transition period. Some decisions around inputs for computing the CSM still await clarity from the joint expert group. Also, it is a short time to transition given we are typically live with our results within the first 15 days of the quarter.”

— Dhiren Salian, CFO

High interest rates on bank deposits are creating significant competition for insurance-based savings products. This clarifies why growth in the non-participating segment has been challenging, as customers seek higher immediate returns elsewhere.

“Regarding growth in non-par, our products are compared to bank FD rates. In the current environment where FD rates are steep, products priced off the government security (G-Sec) look less attractive relative to the longer-term G-Sec yields. When there is a dichotomy between deposit rates and non-par pricing, customers can swing between the two.”

— Dhiren Salian, CFO

Rising interest rates provided a buffer that allowed the company to maintain competitive pricing without sacrificing margins. This stability in pricing helps support sales volume in a competitive environment where other costs are rising.

“Normally, we should have changed pricing, but the improving yield curve allowed us to hold prices. There have been very marginal price changes in certain cohorts, but not on mass.”

— Dhiren Salian, CFO

The company is prioritizing absolute profitability and value creation over simply chasing top-line revenue growth. This disciplined approach ensures that the company does not destroy shareholder value just to gain market share in low-margin products.

“Cutting margins to deliver growth on non-par might not be accurate for shareholders. We focus on absolute VNB rather than pushing a particular product for growth.”

— Anoop Bagchi, MD and CEO

The 18% cost reduction from GST changes is being directly passed to policyholders, making protection much more affordable. This structural tailwind is driving strong renewal behavior and new customer acquisition in the high-margin protection segment.

“We have innovated and created new propositions, but the biggest tailwind has been the GST reform. This is felt most in retail protection because the 18% cost reduction is passed to the customer. This benefit is available for both new and existing customers paying renewals.”

— Anoop Bagchi, MD and CEO

ICICI Lombard General Insurance Company Ltd. | Large Cap | General Insurance

ICICI Lombard is one of India’s largest private sector general insurance companies, offering a wide range of products across motor, health, fire, and marine segments. The company focuses on technology-driven underwriting and multi-channel distribution to maintain its market leadership and operational efficiency.

[Concall]

The Indian insurance regulator is moving the industry toward global accounting standards starting in April 2026. The company views this transition as a major benefit for transparency and better comparison with international peers.

“IRDAI has mandated insurers to prepare and present their financial statements in accordance with the applicable Ind AS effective April 1, 2026. We view this as a positive step, as the enhanced disclosure requirements under the Ind AS framework will meaningfully improve transparency and align the reporting standards of Indian insurers with global practices.”

— Sanjeev Mantri, MD and CEO

The company’s retail health segment is growing more than twice as fast as the rest of the insurance industry. This rapid expansion has allowed them to gain significant market share and double their new business volume in health indemnity.

“Our retail health business continued to demonstrate strong growth of 51.1% for FY26, significantly outpacing the industry growth of 19.9% in the same period. Consequently, our market share has improved from 3.3% in FY25 to 4.1% in FY26. For the year, the company has seen 2x growth in the new retail health indemnity business sourced compared to the previous year.”

— Sanjeev Mantri, MD and CEO

Management confirmed they are sticking to their conservative approach for setting aside money for future insurance claims. They advise investors to look at annual trends rather than quarterly fluctuations to gauge the true health of their reserves.

“If you ask us if any of our reserving philosophy has undergone a change, the short answer is no. We continue to maintain prudence in terms of maintaining our loss reserves. So hence, I think you have to keep looking at numbers more on a full-year basis as compared to any given quarter.”

— Gopal Balachandran, CFO

Switching to Ind AS accounting is expected to artificially lower the company’s combined ratio by up to 4.5% during the first year. Investors should note that this is a change in accounting methods rather than a change in the actual underlying profitability of the business.

“We always said in the past also that in the year of transition, there will be a significant decline in the combined ratio; it could mean a reversal of maybe 400 to 450 basis points. But look, that is only the accounting part of economic value; over a period of time, it is expected to converge.”

— Gopal Balachandran, CFO

Management is willing to lose some market share in commercial lines if it means avoiding risky or poorly priced contracts. They prioritize disciplined underwriting over growing the business at any cost in high-risk categories.

“Even last year, we had said that there was a marginal loss of market share for us on that side, purely on the account that we will do what is comfortable. These are all very exposure-driven products, and you have to be cautious of what you pick and what you don’t.”

— Sanjeev Mantri, MD and CEO

The company does not set fixed targets for its crop insurance business, choosing instead to participate only when the risk-reward ratio is favorable. This selective approach protects the company from the high volatility often associated with agricultural insurance.

“We have always maintained our plan that crop will be purely on a selection basis of what we feel is appropriate rather than a target segment. We do not have a specific target like “we must do this much.” That is not the way we look at it.”

— Sanjeev Mantri, MD and CEO

The company successfully increased its customer retention rate by 5% in retail segments, which is driving faster growth than just new sales alone. Maintaining this high retention rate is a key strategic priority for the upcoming fiscal year.

“At an aggregate company level, predominantly in retail lines, we have seen an improvement in our overall retention numbers by almost 500 basis points. That is something we will continue to stay focused on even as we head into FY27. Beyond new vehicle sales, the growth acceleration is a function of that improved retention.”

— Sanjeev Mantri, MD and CEO

Management suggests that the final loss ratio is a more accurate measure of profitability than the total dollar amount of reserves. They are entering the next year with confidence as they have grown the business while keeping claim costs within their expected range.

“The absolute amount of the reserve number is not necessarily the right metric to track; the better metric is the loss ratio outcome. We have seen a clear rebound of growth while maintaining our loss ratio expectations. We are very positive as we head into FY27.”

— Gopal Balachandran, CFO

ICICI Lombard believes it has a competitive advantage because it already operates within strict regulatory expense limits that some competitors struggle to meet. If the regulator enforces these limits strictly across the industry, it could level the playing field in the company’s favor.

“Any signing on a uniform basis across the industry would place ICICI Lombard at a significant advantage because we have remained within the EOM limits. If others fall in place, we can only see better times ahead for our industry. It just needs to be practiced uniformly.”

— Gopal Balachandran, CFO

Anand Rathi Share & Stock Brokers Ltd. | Mid Cap | Financial Services

Anand Rathi Share & Stock Brokers Ltd. is a full-service financial services firm specializing in stockbroking, margin trading, and investment product distribution. The company utilizes a relationship-driven approach supported by digital platforms to serve retail and HNI clients across India.

[Concall]

Management is highlighting a difficult year where geopolitical tensions and technological changes hurt investor confidence. This context helps investors understand the external volatility that pressured the company’s trading volumes and market performance.

“FY26 was a challenging year for global economies and financial markets. The world was dealing with multiple headwinds at the same time, including ongoing geopolitical tensions, shifting global trade dynamics, tariff-related uncertainties, and fast-paced technological shifts that disrupted established business models. As the year progressed, these pressures intensified with fresh bouts of adverse news, including the recent West Asia conflict, further weakening risk appetite.”

— Pradeep Gupta, Chairman and Managing Director

Retail interest in Indian capital markets is growing rapidly, as seen in the double-digit increase in demat accounts and mutual fund assets. For investors, this structural shift suggests a long-term expansion of the company’s addressable market.

“The steady rise in demat accounts from 15.14 crore in March 2024 to 22.2 crore by February 2026 clearly reflects sustained retail participation and deep market penetration. Similarly, Assets Under Management (AUM) in the mutual fund industry rose from 65.74 lakh crore as of March 2025 to approximately 82.02 lakh crore by February 2026, representing a 24.8% year-on-year increase. The growth underscores the continued financialization of household savings and a rising preference for market-linked investment avenues.”

— Pradeep Gupta, Chairman and Managing Director

Recent regulatory changes by SEBI are designed to protect investors and reduce market leverage at the cost of short-term disruption. These reforms are viewed as positive because they create a more stable and professional environment for long-term growth.

“SEBI has been proactive in introducing a series of regulatory measures aimed at strengthening risk management frameworks, curbing excessive leverage, enhancing investor protection, and improving the ease of doing business in capital market transactions. While some of these reforms may have required short-term adjustments and led to near-term discomfort for a few participants, they are critical in laying the foundation for a more transparent, resilient, and sustainable capital market ecosystem over a long period. Overall, we believe that the industry is moving in a constructive direction, although near-term conditions have clearly remained uneven.”

— Pradeep Gupta, Chairman and Managing Director

The company is intentionally diversifying its income to rely less on volatile stockbroking fees and more on stable distribution income. Achieving this 50:50 split should lead to more consistent earnings that are less vulnerable to sudden market crashes.

“Our strategic direction remains clear and unchanged. As guided earlier, we are fully focused on maintaining a balanced revenue mix with a targeted revenue split of 50:50 between non-broking and broking segments and growing both segments at a steady rate. This approach is central to improving the overall quality, sustainability, and predictability of our earnings over the long term.”

— Pradeep Gupta, Chairman and Managing Director

The addition of insurance distribution provides the company with a new stream of high-margin, recurring fee income. This expansion allows the company to capture more of its clients’ financial spending beyond just stock trading.

“We received the corporate agency license to distribute insurance products in the same financial year. Since then, we have commenced distribution of both life and health insurance products to our clients, green-lighting a huge source of fee-based income for the company. Lastly, we continue to remain focused on enhancing client servicing and satisfaction by adopting new initiatives aimed at delivering superior customer experiences.”

— Pradeep Gupta, Chairman and Managing Director

Income from selling financial products like mutual funds and bonds grew by over 40% due to better cross-selling to existing clients. This rapid growth indicates the company is successfully extracting more value from its current customer base.

“Our distribution income for FY26 amounted to 1,129 million, reflecting a strong year-on-year growth of about 44.1%. This growth reflects improved cross-selling across our client base as per our focused approach to grow our distribution business. Our objective is to address the broader financial needs of our clients.”

— Pradeep Gupta, Chairman and Managing Director

The company prioritizes cash-market investing over speculative derivatives trading to encourage more sustainable client behavior. A higher reliance on the cash segment often leads to higher quality and more stable brokerage earnings over time.

“Within the broking segment, we continue to maintain a healthy balance between equity cash, equity derivatives, and other segments. This reflects our philosophy of encouraging an investment-focused approach among our clients rather than speculative trading. For the full year FY26, the revenue mix across equity cash, F&O, and other segments stood at 51%, 41%, and 8% respectively.”

— Rupkishore Guthra, Whole Time Director

Changes in central bank policy restricted the company’s ability to borrow from banks to fund its margin trading loans. This regulatory constraint is a key risk because it limits the expansion of a highly profitable business segment.

“However, we saw a downfall in MTF by 10.53% in the quarter ended March 2026. The main reasons behind this are as follows: Change in RBI policy for capital market intermediaries. That change in policy reduced the avenues available from banks to meet the working capital requirements of the company. As a result, we had to control our growth in the MTF book.”

— Rupkishore Guthra, Whole Time Director

Despite a tough market, the company has managed its lending risks perfectly with no bad loans in its margin trading portfolio. The focus on smaller, granular accounts reduces the danger that a single large client default could hurt the company’s finances.

“We continue to maintain zero NPA on our MTF book as of March 31, 2026, once again reflecting our judicious underwriting practices. The book also remained granular, with approximately 61% of the outstanding exposure coming from clients with individual balances below 1 crore.”

— Rupkishore Guthra, Whole Time Director

Management clarifies that this specific entity focuses on execution and product distribution rather than high-end advisory services. This distinction is important for investors to understand the competitive positioning and margin profile of this business versus its sister company.

“In our group, we have a wealth management company separate from this company. This company is by and large focusing on broking and distribution of products. Having said that, as a philosophy, we are addressing all the investment needs of a specific customer by providing various different investment products suitable to that particular investor.”

— Pradeep Gupta, Chairman and Managing Director

The company is digitizing its services to match the personal touch of a physical advisor, with over half the clients already using digital tools. Increasing digital adoption should lower the cost of serving customers and improve long-term scalability.

“Regarding our technology side, we are strengthening that platform every day, trying to provide it in such a way that all the deliveries available from a relationship manager in the marketplace are available on our digital platform. Our broking platform is already there, which we are constantly improvising. Almost 60% of our customers are already using our digital platform.”

— Pradeep Gupta, Chairman and Managing Director

The company uses an internal committee to strictly screen which stocks can be used as collateral for loans. This conservative approach is meant to protect the firm from sudden market crashes that could wipe out client equity.

“First, we always ensure that we operate in a business where customer interest is protected at the first level. Second, we are conservative in our approach toward risk management. A simple example is our MTF product. On the regulatory side, a basket is defined, and we have an internal committee for stock selection to ensure margin levels and risk controls are managed effectively.”

— Rupkishore Guthra, Whole Time Director

The company has drastically reduced its debt levels relative to its equity over the last year. A cleaner balance sheet gives the company more financial flexibility to navigate future market downturns without distress.

“As you might have observed in the numbers, we have improved our debt-to-equity ratio significantly to 0.62 from 1.8. I hope this clarifies your question.”

— Rupkishore Guthra, Whole Time Director

The company is very close to reaching its goal of a perfectly balanced revenue stream between broking and distribution. This balance is key for investors seeking a financial firm that is less exposed to the volatility of trading cycles.

“If you look at our performance this year, 51% comes from broking and 49% from distribution. We have seen a good amount of traction on the distribution side, which has grown by almost 44%. What we are trying to achieve over time is that 50:50 scenario.”

— Management, Corporate Team

Even during months when the market indices fell, the company saw growth in its client count and total assets managed. This indicates strong customer retention and a resilient business model that can grow despite poor market sentiment.

“While the market level was down about 3%, the positive part is that the total number of clients has increased and the AUM from existing clients is also increasing on a constant basis. We are a customer-centric company and our policy is to look after the customers’ and investors’ interests first while simultaneously growing the company over time.”

— Management, Corporate Team

Telecom

Tejas Networks | Small Cap | Telecom

Tejas Networks Limited specializes in designing, developing, and selling high-performance products to various industries including telecommunications service providers, internet service providers, utility companies, defense companies, and government entities. Their products are utilized in high-speed communication networks for carrying voice, data, and video traffic over optical fiber, offering programmable software-defined hardware architecture for easy development and upgrades.

[Concall]

Management attributed the weak financial performance in FY26 to delays in large projects, especially after the peak execution of BSNL-related work in FY25. They emphasized that the demand environment remains intact and the issue is timing of execution.

“FY26 has been a year of consolidation. Our BSNL 4G/5G network went live across 100,000 sites… Several large projects we planned for were delayed, resulting in a revenue shortfall and financial loss. However, we have not cut R&D investments due to our positive outlook… While it has been a tough year, we have set a path for the future.”

— Management

The company reported a sharp increase in its order book, driven largely by India business and private/global customers. Importantly, management clarified that this number excludes the large BSNL 4G project, indicating broader underlying momentum.

“We had growth in our order book at the end of Q4, ending with ₹1,514 crores compared to ₹1,019 crores at the end of Q4 FY25… India once again dominated our business at 88%. Our order book was also dominated by the India business… [and] this does not include the BSNL 4G project.”

— Management

The company has made significant investments in its technology partnership with NEC, which is now expected to start generating revenues as milestones are achieved and commercial adoption begins.

“This consists of our product development efforts and the technology licensing agreement we signed with NEC… A large part is done… we expect the balance to be completed within the next two quarters… Yes, we will see revenue from the new contract with NEC in FY27.”

— Management

Tejas has secured initial deals and is in advanced stages of trials across multiple geographies. These are expected to contribute meaningfully to revenues starting FY27.

“We signed an agreement with NEC to manufacture and supply our 5G massive MIMO radios for global customers… We also received an initial order for the expansion of 4G networks from a customer in South Asia… A lot of the 5G massive MIMO business will generate revenue in FY27… more expansion expected this year.”

— Management

Concerns around high inventory levels (especially linked to BSNL) were addressed by clarifying that products are standardized and can be sold to other customers globally.

“We expect significant BSNL collections this year… The inventory procured is not unique to BSNL; these are 4G and 5G radios that can be sold to other global customers or for private networks.”
— Management

The company deliberately chose not to cut R&D spend, highlighting its long-term strategy to remain competitive in deep-tech telecom infrastructure.

“Being in deep tech, failing to invest in technology is a bigger risk… We took the call to continue investments despite the business shortfall in FY26… In FY27, the balance between investment and revenue will be tighter.”
— Management

Management anticipates a long-term surge in network demand as artificial intelligence traffic forces service providers to upgrade their infrastructure. This structural shift positions Tejas’s high-capacity optical and edge products for a potential multi-year growth cycle.

“Looking forward, AI will drive network transformation. By 2030, AI traffic is predicted to be more than 60% of total network traffic. This will require low latency and jitter. This trend will drive a network infrastructure build super cycle.”

— Arnab Roy, MD and CEO

The company expects future investments to be centered around high-speed optical networks and edge infrastructure to handle AI-driven workloads.

“Communication service provider networks will need to handle immense growth, with 50% of new AI traffic processed at edge nodes… We will see significant investment in 400G and 800G connectivity at the edge.”

— Management

Rising input costs, particularly memory components, are being addressed through pricing renegotiations and product optimization.

“Memory cost does impact us… we are addressing this through new technology and renegotiating prices with customers to protect our margins.”

— Management

The company is actively pursuing global deals, with multiple field trials across geographies, which could convert into orders in FY27.

“We have multiple ongoing field trials for our 4G and 5G RAN products across South Asia and the Americas… recently completing a successful 5G POC in South America… We are chasing large opportunities, particularly international wireless deals.”

— Management

Management framed current investments as enabling multi-fold growth rather than incremental improvement, especially as global opportunities scale.

“Our investments are aimed at significant growth—multiples of what we did in FY26… While projects like BSNL create spikes, the underlying trend without those one-offs should show consistent growth.”

— Management

TV Interviews

Baba Jewellers | Gold & Diamond Jewellery | Retail

Bawa Jewellers is a heritage jewellery brand specializing in gold, diamond, and silver ornaments, backed by a legacy of craftsmanship and trust since 1928. Led by Gaurav Bawa, the brand offers a diverse range of traditional and contemporary designs, blending timeless artistry with modern aesthetics to suit evolving customer preferences. Bawa Jewellers provides certified jewellery, fair pricing, and value-driven services, continuing to serve generations with a reliable and refined jewellery shopping experience.

Reference

The company has observed that jewellery demand is becoming less sensitive to price hikes as consumer purchasing power grows. This comes despite a broader environment marked by inflationary pressures and global uncertainties, indicating relative resilience in this segment.

“If you look at it closely, people’s spending capacity has increased over time. In terms of quantity, at our store, we’ve seen consistent year-on-year growth over the last three to four years. Price fluctuations don’t seem to affect demand much.”

— Gaurav Bawa, CEO, Bawa Jewellers.

Parle Products Private Limited | Cost Shock Reveal |

Parle Products is one of India’s leading FMCG companies in the biscuit and packaged foods segment, built on a high-volume, mass-market distribution model. Recent management commentary highlights rising cost pressures from fuel constraints and packaging inflation, with the company absorbing these increases to protect demand.

Reference.

While fuel availability is recovering from its lows, the industrial supply of LPG remains significantly below full capacity. Investors should note that until supply reaches 100%, the company will continue to face inefficient production cycles and higher unit costs.

“Earlier, LPG availability was capped at 50%, which has now increased to around 70%, and supply continues to improve. Despite this, both production capacity and conversion costs have been impacted.”

— Mayank Pravinchandra Shah, Vice President, Parle Products.

Energy supply risks are systemic across the industry because the entire fuel basket is tied to volatile crude oil markets and government priority shifts. This implies that even companies with diversified fuel sources remain vulnerable to broader energy shortages.

“In terms of LPG dependency, around 25 to 30% of industry capacity runs on LPG, while the rest uses other fuels. However, since all fuels are linked to crude oil, the prioritisation of crude for LPG, petrol, and diesel impacts overall fuel availability across industries.”

— Mayank Pravinchandra Shah, Vice President, Parle Products.

The company is facing a sharp double-digit spike in packaging expenses due to rising global commodity prices. This significant inflation in non-food inputs will likely compress gross margins unless offset by pricing or volume gains.

“Another major cost component affected is packaging material. Packaging costs have increased by approximately 15 to 20%.”

— Mayank Pravinchandra Shah, Vice President, Parle Products.

Management is currently choosing to protect market share by absorbing higher input costs rather than passing them to consumers immediately. This strategy signals a temporary hit to profitability to maintain volume growth in a volatile environment.

“While price hikes may become necessary if costs remain elevated, no immediate action is being taken due to market volatility. Companies are currently absorbing the increased costs, but this is not sustainable in the long term.”

— Mayank Pravinchandra Shah, Vice President, Parle Products.

Paras Defence on deal with Bandak Aviation

Paras Defence and Space Technologies operates in high-precision defence and aerospace systems with a focus on indigenisation. Recent management commentary highlights a strategic partnership to bring air-to-air refuelling systems to India, opening a large long-term opportunity in a niche, import-dependent segment with limited domestic competition.

[Reference]

Paras has entered into an exclusive agreement to localise air-to-air refuelling technology in India for the first time. This partnership targets a significant market opportunity previously dominated by foreign suppliers.

“What we have signed with Bandak Aviation is an agreement that we are going to work together to make sure that a critical technology in aviation, such as air-to-air refuelling systems, is brought to India. It is supplied to the end customers, and this will open up a huge funnel which is already on the cards, and that funnel will run into hundreds of millions of dollars worth of opportunity. Now these opportunities will include all the platforms that already have air-to-air refuelling systems.”

— Amit Mahajan, Director

The agreement covers not just new equipment sales but also the servicing and upgrading of refuelling systems on existing aircraft. This dual focus on new hardware and maintenance provides both growth potential and steady recurring revenue.

“Now these opportunities will include all the platforms that already have air-to-air refuelling systems. Those will be required to be upgraded. Those will be required to be serviced, and those will be required to be overhauled as well. And at the same time, new systems or the replacement of certain systems will be required on existing platforms. Always an opportunity for new platforms to have an indigenous air-to-air refuelling system. So it’s a huge plethora of opportunities that we are eyeing with this particular agreement.”

— Amit Mahajan, Director

Paras is positioning itself as the only domestic manufacturer for a critical aviation subsystem that is currently 100% imported. Being the sole local provider aligns with India’s defence indigenisation push and creates a strong competitive moat.

“This becomes a very critical subsystem. So we will work with the platform manufacturers, and currently, these kinds of systems are imported. So there is a big gap that we see that an indigenous player can step into and make the most of this opportunity. Currently, there is no Indian company that is doing something like that.”

— Amit Mahajan, Director

Management conservatively estimates the total addressable market for these refuelling systems to be worth nearly one billion dollars. While this revenue will be realised over time, it represents a significant expansion opportunity.

“See, it is a very early stage for us to estimate, but like I’m telling you, the overall opportunity size, if I may be very conservative, will be very close to a billion dollars. But it’s spread across many years, and we will have to take it in a gradual fashion.”

— Amit Mahajan, Director

The current partnership is a strategic starting point that management expects will eventually transition into a formal joint venture, enabling deeper collaboration over time.

“Initially, when you are working with two companies that have not had earlier business relations, the linkage is purely based on the opportunities that you get and a joint recce kind of thing that both companies have done. Our relationship is fairly new, and as the relationship builds, it starts off with an agreement. Even if you see all the earlier JVs that we have done, we’ve had good working relations in the past. We’ve had our agreements in the past. So agreement is a first step, and then as the companies start gelling with each other, understanding each other’s business and way of working, then we get into more of a JV, like a permanent entity. So by the time we get into that, this can be a phase two if the business needs.”

— Amit Mahajan, Director

The company has reiterated confidence in its growth trajectory, supported by a strong order book and execution visibility.

“While we are currently around 415 cr in terms of trailing 12 months topline, we are on a good trajectory, and we will maintain it for sure. We are maintaining that trajectory; neither are we discounting it, nor are we saying that there is going to be any negative change to it. It is going to be the same orbit.”

— Amit Mahajan, Director

Mirae Asset Management on Energy Transition

Mirae Asset Investment Managers is a global asset management firm offering investment solutions across equity and diversified strategies.The management remains positive on EV adoption, small-cap earnings recovery, and demand across key sectors like auto and defense. While near-term cost pressures persist, the broader outlook continues to stay constructive.

[Interview]

The transition from internal combustion engines to electric vehicles is expected to gain momentum through new government policy support. Following global trends like China’s, India is likely to see an accelerated adoption rate for EVs in the near future.

“I think, you know, the shift from ICE to EVs, as far as auto is concerned, will further get strengthened, and I would expect in the next few months various state governments and the central government to come up with more programs on that side. So, if you look at China today, almost every second car which is sold is an EV, and I think India will also be forced to accelerate this transition going forward.”

— Varun Goel, Senior Fund Manager, Mirae Asset Investment

Smaller companies are emerging from a period of stagnant earnings growth over the last two years. Management anticipates a 20% or higher growth rate in earnings by FY26 due to the current low base and cyclical recovery.

“I think specifically, if you look at the small-cap space, we have seen almost a two-year kind of earnings holiday, and the earnings in FY26 will be very similar to what they were in FY24. On that very low base, we expect 20% plus kind of earnings growth, even despite the war that is going on. Before the war, the estimates were upwards of 25%.”

— Varun Goel, Senior Fund Manager, Mirae Asset Investment.

Tax incentives and government spending are driving strong demand across the automotive, defense, and railway sectors. This positive momentum is expected to continue through the peak festive season.

“I think auto, auto ancillary, consumer durables, the whole auto system space remains one of the biggest beneficiaries of the GST cuts, and we believe that momentum will sustain at least till Diwali. If you look at the whole capex-related activities, defense and railways, we expect a further boost to capex on that side.”

— Varun Goel, Senior Fund Manager, Mirae Asset Investment.

L&T on India’s Nuclear Scale-Up

Larsen & Toubro (L&T) is an Indian multinational conglomerate engaged in engineering, construction, and high-tech manufacturing. The management indicates a clear scale-up in India’s nuclear program, with visibility on capacity addition and a fast-tracked reactor pipeline. With opportunities across large reactors, SMRs, and lifecycle services, nuclear is emerging as a meaningful growth driver for L&T.

[Interview]

Management believes the target for nuclear capacity expansion is historically achievable, based on precedents from other major global economies. This suggests a strong multi-year tailwind for L&T’s high-tech manufacturing and engineering divisions.

“India needs to add capacity at a rate of 4.3 gigawatt on average per year, and these rates have been achieved in the past by countries like the USA and, to a lesser extent, France and China. That was in the late 80s and early 90s. Today, with the latest technologies available, I think this is very much possible and realistically achievable.”

— Anil V Parab, Whole-time Director & Sr Executive VP.

The government is moving into a fast-track expansion phase for stage two nuclear reactors after the prototype milestone, providing clear visibility on future capacity addition.

“I would say now, having started stage two, we will have to scale it up where more such fast breeder reactor capacities will be added by the government. The immediate plan is that after about a year of operation of this prototype fast breeder reactor, they intend to add two more reactors of similar capacity at the same location, which can be set up on a fast-track basis, and then more will be added for stage two.”

— Anil V Parab, Whole-time Director & Sr Executive VP.

The company highlights a clear market split between large-scale utility reactors and Small Modular Reactors (SMRs), with the latter catering to emerging industrial and data-driven demand.

“Now, in nuclear, there are two parts. One is the power reactors, which are 700 megawatt and higher in size, and the second part is India’s commitment to achieve a net-zero carbon footprint by 2070 and support cutting-edge technologies like artificial intelligence. There, you need small modular reactors, which are more for captive consumption of hard-to-abate industries and hyperscaler data centers.”

— Anil V Parab, Whole-time Director & Sr Executive VP.

L&T plans to expand its nuclear business beyond equipment supply into long-term plant services, aiming to capture value across the lifecycle of nuclear assets.

“So we will continue to play and be the industry trendsetter and market leader in nuclear in this particular segment, and over a period of time we will also extend our offerings to plant services, which will be required as more capacity comes on stream. These nuclear power plants, for reliable operation, will need such life extension plant services, which L&T will also address over a period of time.”

— Anil V Parab, Whole-time Director & Sr Executive VP.

L&T expects strong growth visibility in its nuclear segment, with revenues projected to scale significantly depending on the pace of government execution.

“Beyond that, I can’t really share on such media, but what I can tell you is that our current nuclear revenue will, in a realistic way, increase 3 to 3.5 times over the next five years, depending on how the government launches various new reactor plants. If it is faster, growth can be faster; if it is slower, it will depend accordingly.”

— Anil V Parab, Whole-time Director & Sr Executive VP of L&T

Management clarifies the cost structure of nuclear projects, highlighting the share of high-value components relevant for L&T.

“I think, first of all, what you shared is only one type of technology, that is the pressurized heavy water reactor, which is the Indian domestic technology. Other technologies like light water reactors are different. Generally, if you see the breakup, plant and machinery, depending on the technology selected, will be around 20 to 30 to 35% of the total cost. The remaining will be construction and associated commissioning costs.”

— Anil V Parab, Whole-time Director & Sr Executive VP.

Nomura on India: From Overweight to Neutral

Nomura Holdings is a global financial services firm offering research, investment banking, and asset management services across international markets. The firm has turned neutral on Indian equities, signaling a shift in relative positioning within Asia. While markets may move together, the real question is where capital flows next, and whether India can hold its ground amid rising competition from tech-driven markets and evolving global cues.

[Reference]

Nomura has shifted its rating on Indian equities to neutral, indicating that the market is expected to perform broadly in line with its regional peers rather than outperform.

“When we say we are downgrading our stance from overweight to neutral, all we are trying to suggest is that we think the market performance of India will be broadly in line with regional markets. The thesis is very simple. If the war were to deescalate and we start to see normalization of oil and energy flows through the Straits of Hormuz, I think all the markets in Asia will rally.”

— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings

Chetan expects that while India may participate in a regional rally, tech-driven markets like Korea and Taiwan are better positioned to outperform.

“Some markets will rally more. We think tech-oriented markets like Korea and Taiwan will probably rally more. India will also rally, but it is hard for us to expect India to outperform from here.”

— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings

Persistent foreign selling in India is being driven by capital reallocation towards global technology opportunities rather than a deterioration in domestic fundamentals.

“The reason for India’s underperformance, or persistent net selling by foreigners, is very simple. Investors can find opportunities elsewhere, particularly in tech, and that is where they have been buying. They had to sell somewhere to fund those positions.”

— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings

Weak inflows into active emerging market funds are forcing portfolio shifts, increasing the need to sell existing positions like India to allocate capital elsewhere.

“It’s not that emerging market active funds are getting a lot of money. Passive funds are getting more inflows, but active funds are not. So whenever you have an opportunity elsewhere, you have to cut exposure somewhere and allocate capital to that opportunity.”

— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings

Currency movement remains closely linked to foreign investor flows, creating a feedback loop that continues to impact market sentiment.

“The other problem for India is also the rupee. The rupee and equity flows are a bit of a chicken-and-egg situation. If flows start to normalize and we see inflows into India, the rupee will stabilize. But as long as foreigners are selling, the rupee will remain under pressure.”

— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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From “not expecting any known risks” to “the issues are clearly behind the industry” — eighteen companies, eight quarters, and a credit cycle that rewrote the rules of Indian microfinance, told entirely through the words of the people who lived it.

The Goldilocks Trap

In March 2024, the Indian microfinance industry was in a celebratory mood. Asset quality had recovered from the pandemic. Growth was strong. Guidance was ambitious. The sector had disbursed record volumes and the worst of COVID-era stress was firmly in the rearview.

Satin Creditcare’s HP Singh called FY24 a “momentous chapter” in the company’s 33-year journey. Muthoot Microfin’s CEO saw a clear path to 4.5% ROA. CreditAccess Grameen, the country’s largest pure-play microfinance NBFC, set its sights on numbers that would have seemed outlandish just two years earlier.

“Assuming a stable operating environment, we look forward to achieving loan portfolio growth of 23% to 24% in FY25. We are anticipating credit cost of 2.2% to 2.4%... Overall, we aim to achieve ROA of 5.4% to 5.5% and ROE of 23.0% to 23.5% in FY25.”

— Udaya Kumar Hebbar, Managing Director, CreditAccess Grameen | Q4 FY24

Bandhan Bank, which had spent three painful years cleaning up pandemic-era stress in its microfinance book — the “Emerging Entrepreneurs Business” in Bandhan parlance — declared the legacy behind them. Its SMA-0 pool had halved. Slippages were trending down. The technical write-off of the old book was done.

SMA-0 pool is the set of loan accounts that are overdue by up to 30 days, indicating the earliest stage of repayment stress.

Slippages are loans that move from standard (performing) to NPA status during a period.

“So I think as Rajeev said, we believe that decisively, we are out of the pandemic problem. In fact, all the parameters, as you see, you can clearly see that practically the slippages has come down significantly. Recovery rates have improved. DPD pool has dried down.”

— Ratan Kesh, Executive Director and COO, Bandhan Bank | Q4 FY24

When analysts asked CreditAccess’s managing director what risks he saw on the horizon, his response carried the confidence of a man who had navigated COVID, demonetization, and the Andhra Pradesh crisis — and come out the other side each time.

“We are not expecting any known risks actually. Known risk if you see the last 10 years or 15 years, the risks which have come to this industry are unknown. Whether it is COVID or demonetization, the second COVID, all are unknown. The industry has not lost because of any known risks.”

— Udaya Kumar Hebbar, Managing Director, CreditAccess Grameen | Q4 FY24

It was a reasonable statement grounded in history. Every previous microfinance crisis — Andhra Pradesh in 2010, demonetization in 2016, COVID in 2020 — had been triggered by an external shock that no one could have modelled for. The sector’s risk management frameworks were built around this assumption: the threats come from outside, and when they pass, business returns to normal.

Not everyone agreed. A few voices struck a different note that quarter. Kotak Mahindra Bank’s new CEO Ashok Vaswani looked at the same data and saw a warning sign rather than an all-clear.

“If you look at what is happening in the industry and look at loss rates and stuff like that post the COVID provisions, it has really been a Goldilocks period for the last 2-3 years at least since COVID. Now, all of us know that credits go through cycles. At this point in the cycle, to go out and get aggressive on credit, I don’t think it is a smart thing to do.”

— Ashok Vaswani, MD & CEO, Kotak Mahindra Bank | Q4 FY24

HDFC Bank was quietly building buffers while the sun was shining — creating what it called “countercyclical provisions,” essentially setting money aside during good times for the bad times it expected would eventually come.

“We have, as a part of prudent risk management, created a countercyclical provision, which is a provision in good times.”

— Sashidhar Jagdishan, MD & CEO, HDFC Bank | Q4 FY24

IndusInd Bank, one of the largest MFI lenders through its subsidiary BFIL, was even more specific about where it saw cracks. Its CEO Sumant Kathpalia said the bank had spotted stress building in Punjab eleven months before the rest of the industry acknowledged it.

“We saw Punjab coming 11 months ago. We saw the waves of Punjab coming and even some parts of Odisha and Bihar also coming and some parts of UP also. We started exiting those portfolios at that point.”

— Sumant Kathpalia, MD & CEO, IndusInd Bank | Q4 FY24

Whether the early detection translated into early protection would become one of the more revealing questions of the cycle.

• • •

Something Breaks

The first tremors arrived in Q1 FY25 — the April-June quarter of 2024. A brutal heatwave across northern India made fieldwork difficult for loan officers accustomed to collecting repayments door-to-door. General elections in April and May disrupted collection schedules — in several states, political activists ran “Karj Mukti Andolans,” loan forgiveness campaigns that encouraged borrowers to stop repaying.

“Majority of that activity has stopped. It was almost linked with the election activity that was going on during that period in Q1. So now we don’t have too much of activism.”

— Sadaf Sayeed, CEO, Muthoot Microfin | Q1 FY25

These were plausible, temporary explanations. Heat waves pass. Elections end. But underneath the seasonal noise, something structural was breaking. At IDFC First Bank, the JLG collection efficiency — the percentage of current-bucket borrowers who pay on time — slipped from 99.7% to 99.2%. Half a percentage point sounds trivial. In microfinance, where the entire model depends on near-perfect repayment discipline, it was a red alert.

“Normally, pre the floods, our credit loss in the JLG book used to be around 1.6%. Now our estimate of credit cost for this year on the joint liability group, because we are 60% concentrated in Tamil Nadu, it is expected around 5% or a little short of it.”

— V. Vaidyanathan, MD & CEO, IDFC First Bank | Q1 FY25

A brief detour is useful here to understand what was actually going wrong. Microfinance in India works primarily through the Joint Liability Group model — small groups of borrowers, typically 5-10 women, who collectively guarantee each other’s loans. The model’s genius is that it replaces traditional collateral with social pressure: if one borrower defaults, the group faces consequences. It works remarkably well in normal times, keeping credit costs at 1.5-2.5% despite lending to some of the most economically vulnerable households in the country.

But the model has a critical weakness. It doesn’t control how many groups — or how many lenders — a single borrower joins. And since 2022, something had quietly shifted. Credit bureau data showed that borrowers were taking on loans from more and more institutions simultaneously. Ticket sizes were creeping up. Total indebtedness per borrower was rising fast.

Fusion Finance, a mid-sized NBFC-MFI, laid this out in stark numbers.

“I would like to draw your attention to Slide #8 on our customer leverage. As you can see, our outstanding per customer is mostly below INR 40,000. But 33% of these customers have outstanding greater than 1 lakh across micro finance loans. This increased from 23% in March to 32% March ’24.”

— Devesh Sachdev, MD & CEO, Fusion Finance | Q1 FY25

In twelve months, the share of borrowers carrying more than Rs 1 lakh in microfinance debt had jumped by 10 percentage points. And these were just the loans visible on credit bureaus. Equitas SFB’s veteran founder P.N. Vasudevan — who had been in microfinance for nearly two decades — identified another layer that was harder to track.

“What is not really understood or clear is also there’s some kind of a parallel lending happening to the same set of borrowers by so called app loan companies.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q3 FY25

Spandana Sphoorty’s data quantified the damage from overleveraging: borrowers with five or more lenders were just 12% of the company’s AUM but contributed 21% of its arrear bucket. The more lenders a borrower had, the more likely they were to default — and the industry had spent two years adding lenders to each borrower’s profile.

The most important observation of Q1 came from Vasudevan, who named what nobody else was willing to say clearly: for the first time in living memory, this crisis wasn’t caused by something that happened to microfinance. It was caused by microfinance itself.

“For a change, the crisis or it’s not the word crisis, but at least a stress levels in microfinance for a change is not induced by an external one. This is the first time, I think, in the last 15 years that I know or 17 years that I have been in this business that I’m saying that it’s not an external event trigger, but it’s something inherently coming up from the sector itself.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q1 FY25

Not everyone agreed with this framing. Spandana’s MD Shalabh Saxena pushed back on the idea that overleveraging was systemic.

“I personally do not believe there is a systemic over-leverage issue across the industry. I firmly believe that. There could be a few pockets, a few institutions here and there.”

— Shalabh Saxena, MD & CEO, Spandana Sphoorty | Q1 FY25

Within two quarters, the data would prove him wrong.

• • •

The Guardrails

In July 2024, MFIN — the Microfinance Institutions Network, which functions as the sector’s self-regulatory organization — rolled out what became known as the Guardrails. These were a set of industry-wide lending norms, agreed upon by members representing roughly 87% of the microfinance market, aimed at curbing the overleveraging that was now clearly driving the stress.

The key rules: no borrower should have loans from more than four microfinance lenders. Total unsecured indebtedness, including microfinance, should not exceed Rs 2 lakh. Lenders were required to check bureau data before every disbursement, not just at onboarding.

The guardrails were a significant step, but they were forward-looking — they could prevent new overleveraged loans from being created, but they couldn’t fix the existing book. Borrowers who already had five or six lenders would continue to struggle. The stress already embedded in portfolios would need to be absorbed through provisions, write-offs, and time.

The impact on new business was immediate. At Muthoot Microfin, about 11% of loan applications that would previously have been approved were now being rejected under the new rules. Satin Creditcare reported that at the time the guardrails kicked in, just 1% of their existing clients exceeded the four-lender cap — a sign that some companies had been more disciplined than others.

Fusion stopped disbursements entirely in 104 of its branches. CreditAccess tightened credit filters. Spandana paused new member acquisition in 230 branches and stopped sourcing new-to-credit customers altogether. The industry was simultaneously trying to fix the new pipeline while absorbing damage from the old one.

The CreditAccess team tried to quantify the timeline.

“We however, expect the delinquency trend to stabilise in the coming quarter and credit cost within the guided range of 2.2% to 2.4% for the year.”

— Udaya Kumar Hebbar, Managing Director, CreditAccess Grameen | Q1 FY25

That guidance would not survive the next ninety days.

• • •

Into the Storm

By September 2024, the scale of the problem was undeniable. What had started as “stress in some pockets” was now a full-blown industry credit cycle. The heat waves and elections were months behind, but collection efficiencies were still deteriorating. Equitas’s Vasudevan captured the moment of realization.

“The industry and us included were quite caught by surprise when the collection efficiency dipped further in Q2 for no apparent external reasons. In our case, it dropped from 98.9% of Q1 down to 98.2% in Q2. And when this happened across geographies, it was clear that an important reason for the stress was as much internal as external.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q3 FY25

CreditAccess Grameen, which six months earlier had guided for 23-24% portfolio growth and 5.4% ROA, rewrote its entire outlook.

“In light of the current industry landscape and short-term challenges encountered, we have revised our estimate for FY25 annual performance guidance. We anticipate loan portfolio growth of 8-12%, NIM of 12.8-13.0%, credit cost of 4.5-5.0%, ROA of 3.0-3.5%, and ROE of 12.0-14.0%.”

— Udaya Kumar Hebbar, Managing Director, CreditAccess Grameen | Q2 FY25

Growth guidance halved. ROA guidance cut by nearly 40%. Credit cost guidance doubled. And CreditAccess was among the better-positioned players — it had been conservative relative to its peers, with a diversified geographic footprint and a long track record. For the more concentrated and leveraged players, the numbers were far worse.

Fusion Finance reported a quarterly credit cost of Rs 693 crore — a number large enough to trigger covenant breaches with lenders. This is worth pausing on: Fusion’s borrowing costs and credit lines depended on maintaining certain financial ratios. When its losses blew through those thresholds, its own access to capital came under threat. The stress wasn’t just flowing from MFI borrowers to MFI companies — it was threatening to flow from MFI companies to their lenders, creating a potential second-order shock.

“I would like to mention that post the review of our auditors, our actual credit cost for Q2 FY25 has been determined at Rs. 693 crore. The elevated provisioning has been due to us proactively taking accelerated provisions... Looking at our portfolio performance and challenges faced by the sector, our auditor wants to bring to the attention that there are covenant breaches that will require waivers.”

— Devesh Sachdev, MD & CEO, Fusion Finance | Q2 FY25

IDFC First Bank’s V. Vaidyanathan, who had spent the previous quarter framing the Tamil Nadu floods as a one-off episode, acknowledged the broader reality and took an aggressive provisioning stance.

“Now, what we have done this quarter is because microfinance is an issue and we cannot wish it away because the microfinance portfolio is disturbing in many parts of India. So, what we have done is that in SMA-1 and SMA-2, we have taken provisions and therefore... almost 99% of SMA-1 plus SMA-2 has been provided for by the Bank, fully.”

— V. Vaidyanathan, MD & CEO, IDFC First Bank | Q2 FY25

Ujjivan Small Finance Bank, one of the larger microfinance-focused SFBs with a significant presence in southern states, saw its PAR — the portfolio at risk, measuring any loan that’s even one day overdue — climb sharply.

“On asset quality, as mentioned earlier, we are observing stress in the microfinance segment, due to which our PAR has increased to 5.1% in September 24 vs 4.2% in June 24. PAR 0 for our group loan portfolio has increased to 5.5% in September 24 versus 4.1% in June 24.”

— Sanjeev Nautiyal, MD & CEO, Ujjivan SFB | Q2 FY25

IndusInd Bank’s CEO Sumant Kathpalia — who had claimed to spot the trouble eleven months early — was now projecting confidence that the worst would be over within weeks.

“In my opinion, if everything goes well, within two months we should start seeing the flow rates coming down in this business... I am very bullish on the microfinance segment, and I think you will see the stability coming in very soon.”

— Sumant Kathpalia, MD & CEO, IndusInd Bank | Q2 FY25

That timeline would prove wildly optimistic. Kathpalia himself would not see it through — within months, he would exit the bank amid a governance crisis triggered in the bank’s derivative portfolio.

Vasudevan, characteristically more measured, offered the hardest truth of the quarter.

“This is the first time I’m seeing where an extended period of nearly 9, 10 months, we have been seeing high slippages and it’s by all of us and in many markets. So it’s very difficult to tell you within what time frame we expect it to come back to normalcy.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q1 FY25

• • •

The Darkest Quarter — and the Turn

Q3 FY25 — October through December 2024 — was when the stress peaked for most companies. Bandhan saw microfinance slippages of Rs 1,196 crore in a single quarter. Its collection efficiency outside West Bengal dropped to 96.3%. Satin Creditcare’s PAR-1 rose to 6.8%. RBL Bank described conditions on the ground as being “in a flux.”

But this quarter also contained the single most important inflection point of the entire cycle: December 2024.

For months, the data had been uniformly grim. Then, almost simultaneously, company after company reported the same thing — the first material improvement in the current bucket, the pool of borrowers who are not yet overdue. When this pool stops deteriorating, it means fewer borrowers are falling into trouble for the first time. It doesn’t fix the existing NPAs, but it signals that the pipeline of future stress is narrowing.

CreditAccess’s MD, who had initially expected the peak in September, acknowledged the delay but confirmed the reversal.

“Our initial assessment of the current delinquency cycle being transitory in nature has come true as we see the new delinquency addition rate slowing down across various geographies in mid-November 2024... The new delinquency trend reversal was materially visible across various markets beginning mid-November, getting further stronger in December and January.”

— Udaya Kumar Hebbar, Managing Director, CreditAccess Grameen | Q3 FY25

RBL Bank saw the same inflection.

“In the JLG segment, the situation on the ground has been in a flux for most of the past months, but December has seen the first material uptick in collection efficiency and the recoveries of old NPAs.”

— R. Subramaniakumar, MD & CEO, RBL Bank | Q3 FY25

Fusion’s Devesh Sachdev, whose company had been among the hardest hit, was watching a different metric — the new loans disbursed under tighter guardrails since August.

“Even I can tell you one more data, that the new sourcing which we are doing, which we changed in the middle of August. And now when I look it’s a five-month MOB, though it is too early, it’s just a 5 months MOB, but I believe the numbers are infant or early delinquency is clearly showing trends which we have seen in year 2022, ’23.”

— Devesh Sachdev, MD & CEO, Fusion Finance | Q3 FY25

This was quietly one of the most significant data points of the cycle. Loans written under the new guardrails weren’t just marginally better — they were performing like pre-crisis vintage. The guardrails were working.

But Bandhan’s new MD Partha Pratim Sengupta — who had replaced Ratan Kesh in yet another leadership change during the crisis — offered a note of caution that tempered the optimism. The SMA-0 book was improving, but the backlog of loans already deeper in arrears still needed to work through the system.

“So, maybe the level of slippage could not be 1,196 in EEB book, what we have witnessed in Q3, but it will be substantial... But slippages, we are seeing the trend, but at the same time as you are witnessing, you see that our SMA-0 book is improving... But the trend is reversing.”

— Partha Pratim Sengupta, MD & CEO, Bandhan Bank | Q3 FY25

The green shoots were real. But the cleanup was far from over.

• • •

The Reckoning

Q4 FY25 — January through March 2025 — became the quarter of reckoning. The turn in collection efficiencies was confirmed, but the damage from the preceding three quarters had to be absorbed. Companies took massive write-offs to clear the decks. The numbers were staggering.

Equitas SFB revealed the full toll. Its microfinance credit cost went from 2.3% in FY24 to 11.37% in FY25 — a nearly fivefold increase that wiped away Rs 630 crore of profit and dragged the bank’s overall ROA down to 0.32%.

“Last year turned out to be a tough year. We had credit cost in Microfinance portfolio moving up from 2.3% in FY ’24 to 11.37% in FY ’25, wiping away about INR 630 crores of profit of the bank.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q4 FY25

“In response to these headwinds, the bank slowed down its fresh disbursements in Microfinance, leading to a drop in the MFI advances from INR 6,265 crores in March ’24 to just around INR 4,500 crores in March ’25.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q4 FY25

Spandana Sphoorty posted a net loss of Rs 1,035 crore for the full year. CreditAccess wrote off Rs 1,124 crore, including Rs 479 crore in accelerated write-offs of non-paying 180+ DPD accounts. Muthoot Microfin saw its GNPA climb to 4.84% — but its CEO called this the peak.

“So our GNP levels are at 4.84%, which is at an elevated number. But this is the peak of these GNPAs. We feel that in coming quarters, these numbers will only come down because we are seeing better collection efficiency.”

— Sadaf Sayeed, CEO, Muthoot Microfin | Q4 FY25

RBL Bank took perhaps the most aggressive provisioning step of the entire cycle — writing its JLG net NPA to zero in a single quarter.

“In the JLG business, we normally take 25% provisioning each quarter on NPAs, but we have now taken 100% provisioning on the NPA as at March 31, 2025. This means we have a nil net NPA in the JLG business. We have also taken 75% provisioning amounting to INR 283 crores on SMA-0, 1 and 2.”

— R. Subramaniakumar, MD & CEO, RBL Bank | Q4 FY25

And then there was IndusInd Bank. In an industry already reeling from credit stress, IndusInd disclosed something that went beyond a credit cycle — it was a governance failure. An internal review found that microfinance loans at its subsidiary BFIL had been misclassified, concealing Rs 1,885 crore in under-provisioning and unrecognized NPAs.

“The review has also identified the misclassification of certain microfinance loans has resulted in under-provisioning and non-recognition of NPAs aggregating to Rs 1,885 Crores. The Bank has addressed the underlying cause and is in the process of taking actions for staff accountability.”

— Sunil Mehta, Chairman, IndusInd Bank | Q4 FY25

The disclosure triggered a leadership overhaul. Rajiv Anand replaced Kathpalia as MD & CEO. The microfinance subsidiary’s governance framework was restructured for “greater transparency.” It was a stark reminder that credit cycles don’t just stress balance sheets — they expose operational weaknesses that good times had papered over.

Meanwhile, the industry’s aggregate footprint was shrinking. This is a number that didn’t get much attention in individual earnings calls but told a dramatic story at the sector level.

“The overall loan outstanding at the sector, which was about INR 4.4 lakh crores in March ’24, came down to about INR 3.75 lakhs in March ’25 and further down to INR 3.5 lakh crores in June ’25.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q2 FY26

From Rs 4.4 lakh crore to Rs 3.5 lakh crore in fifteen months — the entire Indian microfinance industry shrank by 20%. That’s roughly Rs 90,000 crore of credit that was withdrawn from some of the poorest households in the country. The human cost of an industry correcting its own excesses.

IDFC First Bank’s Vaidyanathan, whose bank had taken provision hits early and heavily, offered a framing that captured what this quarter was — not the start of a new problem, but the crest of a wave.

“You think of this 2025 as a year that this has happened because of microfinance. You think of it that 2026, we will stage a smart recovery. And FY 27, FY 28, FY 29, we should be back winning ways.”

— V. Vaidyanathan, MD & CEO, IDFC First Bank | Q4 FY25

• • •

The Proof

The first sign that the recovery was real — not just hoped for — came from CreditAccess Grameen’s Q1 FY26 results. The company that had slashed guidance a year earlier now reported its highest-ever first-quarter disbursement.

“Our Q1 FY’26 performance has created a new benchmark, achieving the highest ever 1st Quarter disbursement in our history. This is a testament to our resilience and agility that define us given that we are coming off the back of a challenging credit cycle.”

— Ganesh Narayanan, CEO and MD Designate, CreditAccess Grameen | Q1 FY26

Note the leadership change here too — Ganesh Narayanan had taken over from founding MD Udaya Kumar Hebbar, whose guidance had shaped the company through both the confidence of Q4 FY24 and the crisis that followed. CreditAccess wasn’t alone. Bandhan had moved from Ghosh to Kesh to Sengupta in the span of two years. Spandana’s MD Shalabh Saxena — who had pushed back on the overleveraging thesis — had exited, replaced by Ashish Damani as interim CEO. Fusion brought in Sanjay Garyali. The cycle had churned leadership across the sector.

But the data was now more important than the names on the door. The deleveraging that the MFIN guardrails had set in motion was showing up in every company’s investor presentation with striking consistency. The overleveraged borrower pool that had caused the crisis was being systematically drained.

“GLP of borrowers with greater than 3 pre-lenders stood at 11.1% in June 2025 versus 25.3% in August 2024. GLP of borrowers with greater than 2 lakh unsecured indebtedness stood at 9.5% as of June 2025 compared to 19.1% in August 2024.”

— Ganesh Narayanan, CEO and MD Designate, CreditAccess Grameen | Q1 FY26

Muthoot Microfin saw the same pattern from the industry-level data.

“If you look at the overall industry, the leverage customers were around 20%. They have come down to around 8%, which is more than 4 loans.”

— Sadaf Sayeed, CEO, Muthoot Microfin | Q1 FY26

And the proof that the guardrails were producing a fundamentally better book — not just a smaller one — came from Equitas.

“We had implemented the MFIN Guardrail 2.0 from Jan ’25. Out of the portfolio created between Jan to June of ’25, the X-bucket efficiency is about 99.6%, which is more or less what we used to have before this whole crisis started sometime in the first quarter of last year.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q1 FY26

New loans, written under new rules, were performing at pre-crisis levels. Spandana’s data was even more definitive — its FY26 disbursements were tracking at 99.9% collection efficiency. The problem had been in the origination standards, the guardrails had fixed the origination standards, and the new book was proving it.

Fusion Finance, which less than a year earlier had reported covenant breaches and a Rs 693 crore quarterly credit cost, showed a steady trajectory of decline.

“Credit costs have steadily declined QoQ from Rs. 571 Cr in Q3 FY25 to Rs. 253 Cr in Q4 FY25 and further to Rs. 178 Cr in Q1 of FY26. GNPA improved from 7.92% in Q4 FY25 to 5.43% in this quarter.”

— Devesh Sachdev, Managing Director, Fusion Finance | Q1 FY26

Muthoot Microfin, which had posted a loss-making FY25, reported a small but symbolically significant quarterly profit — Rs 6.2 crore. Modest. But the direction mattered more than the magnitude.

“Though it’s a very modest profit, more importantly, it indicates a firm ushering of a turnaround within the operation and the financial performance of the company.”

— Sadaf Sayeed, CEO, Muthoot Microfin | Q1 FY26

• • •

The Industry Exhales

In April 2025, Guardrail 2.0 kicked in — tightening the lender cap from four to three, and further restricting indebtedness limits. Some companies, like Spandana, had already implemented stricter rules from January. The immediate effect was another spike in rejection rates and a temporary pause in the recovery of collection sentiment. Utkarsh Small Finance Bank’s CEO noted the disruption.

“From 1st of April 2025, they changed it to 3 lender caps. Because of that, we saw some more slippages or little elevated credit cost during this quarter. And you must have seen that is more or less industry phenomena.”

— Govind Singh, MD & CEO, Utkarsh SFB | Q1 FY26

But by Q2 FY26, the adjustment was absorbed. And the tone in earnings calls shifted from cautious optimism to something closer to relief. IDFC First’s Vaidyanathan, who had spent five quarters absorbing microfinance losses, said what many were feeling.

“Looking ahead, our own sense is that this microfinance issue is behind us. It’s really taken a lot out of us in the last 5 or 6 quarters. Many of you may have almost begun to lose confidence in us.”

— V. Vaidyanathan, MD & CEO, IDFC First Bank | Q2 FY26

By Q3 FY26 — December 2025 — the normalization was broad-based. Collection efficiencies across the sector had returned to 99.4-99.7%, close to or at pre-crisis levels. Monthly PAR accretion — the rate at which new loans fall overdue — had collapsed. CreditAccess reported the number at 18 basis points in December, down from 47 bps in September.

Fusion Finance returned to profitability — a PAT of Rs 14 crore. Its new CEO described it as an inflection point.

“Q3 represents an important inflection point for Fusion. The business has now entered a phase of controlled stabilization and disciplined execution. I’m pleased to share that we have returned to profitability this quarter.”

— Sanjay Garyali, MD & CEO, Fusion Finance | Q3 FY26

Lenders who had pulled back from the sector during the crisis were returning. Fusion noted that “several banks have freshly opened up” and institutions that were in “wait-and-watch mode” had started actively re-engaging. The wholesale funding squeeze — the second-order effect of the credit cycle — was easing.

RBL Bank’s JLG disbursals had crossed Rs 700 crore monthly, with early bucket collection efficiency at 99.5%.

“The disbursal in the JLG segment is at a run rate of INR 700 crores per month versus INR 550 crores in the previous quarter. The good news is that the early bucket collection efficiency is 99.5%. This is as good as one has got in this segment for a long time.”

— Jaideep Iyer, Head of Strategy, RBL Bank | Q3 FY26

Bandhan declared the de-growth phase in its microfinance book over. Muthoot was back to normalized disbursements of Rs 850 crore a month. Ujjivan SFB reported bucket-X collection efficiency of 99.7% in December — its highest in the current fiscal — with 10 out of 10 states at 99.6% or above.

Satin Creditcare’s HP Singh, who a year earlier had been deploying 1,100 dedicated collection staff to manage overdue buckets, offered a simple verdict.

“The headwinds are practically over. You can see green shoots now coming in. I think overall it bodes well for the industry as well as for us.”

— Dr. HP Singh, CMD, Satin Creditcare | Q3 FY26

And Equitas’s Vasudevan, who had been the first to diagnose this crisis as self-inflicted, delivered the closing line for the cycle.

“As we sign off, I can only reiterate that I think the issues of microfinance is clearly behind not just us but the industry. And going forward, let’s hope for better times for all of us.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q3 FY26

While the MFI players had been fighting for survival, the large diversified banks had watched from a very different vantage point. HDFC Bank’s microfinance exposure was less than 1% of its total book. SBI’s chairman noted their MFI portfolio of Rs 10,000-11,000 crore “does not really add up to anything.” By Q3 FY26, HDFC Bank’s deputy MD was using language that felt like it belonged to a different industry entirely.

“The banking industry right now to borrow a term is going through a Cinderella phase where you’ve got very strong balance sheets... We have the lowest accretion of gross NPAs and net NPAs are at decadal lows.”

— Kaizad Bharucha, Deputy MD, HDFC Bank | Q3 FY26

A Cinderella phase for large banks. A near-death experience for several MFIs. The same economic cycle, experienced at entirely different altitudes depending on how much microfinance a company carried on its books.

• • •

What Changed

The industry that emerged from this cycle was not the one that entered it. The changes were structural, deliberate, and in some cases, permanent.

Every major player shrank its microfinance portfolio as a share of total assets. Equitas took its MFI mix from 20% to 8.5% and intended to stabilize at 10%. IDFC First expected its microfinance book to bottom at Rs 7,500 crore — half its peak. Bandhan’s non-microfinance book now accounted for 63% of advances, up from 45% two years earlier. RBL shrank its JLG book by 23% and targeted keeping it at 6-7% of advances, down from 9%. The consensus: microfinance at 7-10% of the balance sheet, not 20%+.

Companies were also insuring against the next cycle. CGFMU — the Credit Guarantee Fund for Micro Units — had existed before the crisis but was lightly used. Now it was becoming standard.

“The intent is to take that to 100% and thereby eliminating the tail risk on the microfinance business. So, if you are able to do that and manage the proportionality of the business somewhere between 7% - 8% of the asset side, I do believe that we can build a more predictable and profitable microfinance business going forward.”

— Rajiv Anand, MD & CEO, IndusInd Bank | Q3 FY26

RBL reached 80%+ CGFMU coverage on its standard JLG book. IDFC First had been insuring since January 2024 — one of the earliest movers.

Kotak Mahindra went further than portfolio caps and insurance. It did something more fundamental — it replaced the joint liability group model itself.

“What we have done is that we have replaced the joint liability group model with individual underwriting risk-based models. And therefore, the way we are dispersing and where we are not dispersing has a lot to do with what the model says are the propensity for repayment.”

— Ashok Vaswani, MD & CEO, Kotak Mahindra Bank | Q1 FY26

It was a quiet admission that the JLG model — the foundational innovation of microfinance — had weakened. Social pressure among group members was no longer enough to ensure repayment in an environment where borrowers had loans from five different institutions. Individual credit assessment, powered by bureau data and machine learning, was being layered on top of or replacing the group guarantee.

And the baseline expectations for the business had permanently shifted. The “old normal” of 1.5-2% credit costs was gone. Vasudevan was explicit about what the “new normal” looked like.

“Post corona, we thought around 3% is a normal credit cost for microfinance. Now post this 2024 overleveraging crisis, probably anywhere between 3% to 4% could be a normal credit cost for microfinance.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q1 FY26

Three to four percent, not two. The industry had recovered, but to a worse steady state than before. The premium for lending to this segment had been repriced — not by a regulator, but by experience.

Vasudevan also offered the most honest structural assessment of the sector — one that explained why every company was simultaneously declaring the crisis over while also reducing its exposure to the business that had built them.

“And in spite of that, we have been seeing a series of crisis in the Microfinance sector time and again for various reasons. The reasons change, but the repetitiveness of the crisis doesn’t change.”

— P.N. Vasudevan, MD & CEO, Equitas SFB | Q4 FY25

The industry had survived. The cycle had turned. But the companies that came out the other side were building for a different future — one where microfinance remained in the portfolio but never again dominated it. Smaller books, government guarantees, individual underwriting, tighter guardrails, higher steady-state credit costs. The cycle didn’t just create losses. It created a new architecture.

• • •

What to Watch

• The “new normal” credit cost. Most companies guide for BAU credit costs of 2.5-3.5% going forward, up from the pre-crisis expectation of 1.5-2%. Whether this holds through FY27 will confirm the repricing is real and not just post-crisis caution.

• Karnataka. The last major geography to stabilize. Several companies still flag it as lagging behind the rest of the country. CreditAccess expects Karnataka’s PAR accretion to normalize by end of Q1 FY27.

• CGFMU as industry standard. IndusInd targeting 100%, RBL at 80%+, IDFC First already covered. If credit guarantee becomes universal, the tail risk profile of microfinance changes permanently — but it also adds ~1% to the cost of lending, which has to be passed on somewhere.

• Guardrail 2.0’s growth ceiling. The 3-lender cap is structurally limiting the addressable borrower pool. Several managements now expect industry growth to settle at 10-15% — a far cry from the 25%+ that was standard before the crisis. Whether this is a temporary adjustment or a permanent reset will shape the sector’s economics.

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes & narratives 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 54th 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.

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In this edition, we have covered 12 companies across 5 industries.

Financial Services

• The New India Assurance Company

• Nippon Life India Asset Management

• SBI Life Insurance

• Max Financial Services

• PB Fintech

• One 97 Communications (PayTM)

Energy

• Reliance Industries

Retail

• Dabur India

• Jubilant FoodWorks

• FSN E-Commerce Ventures

Chemicals

• Pidilite Industries

Steel

• Tata Steel

Financial Services

The New India Assurance Company Ltd | Large Cap | General Insurance

The New India Assurance Company is India’s largest non-life insurer with a significant global footprint across 24 countries and a century-long legacy. The company maintains leadership in the domestic market through a diversified portfolio including health, motor, fire, and marine insurance.

[Concall]

The company is intentionally walking away from low-margin corporate contracts to prioritize more profitable retail and small business segments. This strategy aims to improve the overall quality of the insurance book and reduce capital consumption.

“Over the past few Quarters, we have taken deliberate steps to recalibrate our portfolio by exiting or restructuring select large corporate accounts where pricing did not adequately compensate for risk or capital consumption. This has been offset by an increased focus on Retail, SME and better quality risk. Our operating philosophy continues to emphasize prudent risk assessment at the policy level, ensuring that growth is aligned with profitability and capital efficiency.”

— Girija Subramanian, Chairman cum Managing Director

Recent underwriting losses were primarily caused by large one-time provisions for employee wage revisions and pension arrears. Despite these heavy costs, the company managed to maintain a slightly higher year-on-year profit after tax.

“The underwriting results were mainly impacted by the provision towards wage arrears and the retirement benefits of active employees where we had provided Rs. 759 crore for Quarter 3 of the Financial Year 2025-2026 and Rs. 1,877 crore for the 9 months ended 31st December 2025. After making provision for tax, our Profit after Tax stood at Rs. 372 crore for the Quarter of this year as compared to Rs. 353 crore for the Quarter of the previous year.”

— Mary Abraham, General Manager of Finance

Management is diversifying beyond the highly competitive motor and health markets by entering niche areas like parametric insurance. This shift is intended to find growth in segments with better pricing power and lower competition.

“We are launching innovative new products with focus on Retail and MSME. We have entered new lines like Parametric Insurance. There is emphasis on growth in segments other than Motor and Health where the competition intensity is high and this further impetus on risk management initiatives.”

— Mary Abraham, General Manager of Finance

Motor insurance growth is slowing because the company is aggressively exiting specific loss-making accounts and risky segments. While this hurts short-term premium growth, it is a necessary step to bring the motor portfolio back to profitability.

“So, the growth on Motor is a little dented because of very strategic and very well-thought-out solutions for these loss-making accounts that we have been suffering from in Motor. So, definitely because of us exiting from many of these segments in Motor, wherever we found the losses exceptionally harsh, growth has come down and this will continue for some time. Maybe we are trying to work with new dealers and new partnerships.”

— Girija Subramanian, Chairman cum Managing Director

An additional provision of up to 800 crore rupees is expected in the fourth quarter once the government notifies the family pension revision. This indicates that the impact of wage-related costs on the bottom line will persist into the next reporting period.

“We will have to provide for this Rs. 700 crore – Rs. 800 crore, around that amount for the FPS in the last Quarter. Because it cannot be done before the notification comes out. Notification is yet to come out. Yeah, that is prospective. That is why it has not been taken into account.”

— Girija Subramanian, Chairman cum Managing Director

To improve health insurance margins, the company is either raising prices on group accounts or walking away from those that are unprofitable. They are also significantly increasing mandatory inspections and fraud monitoring to lower the claims ratio.

“We are either pricing them and negotiating to get closer to the core right price or we are exiting from GMCs that do not give us adequate pricing and going for accounts where pricing is more fair and more adequate. Apart from that, we have increased our anti-fraud activities. Like, we have increased inspections from 30% to 50% compulsorily and we will be increasing it even more in the Quarters to come.”

— Girija Subramanian, Chairman cum Managing Director

The company is exploring parametric insurance, which pays out automatically based on weather events rather than traditional loss assessments. While currently small, this digital-first approach offers a faster, more automated way to settle claims in catastrophe-prone areas.

“Parametric Insurance is a new type of insurance which will take time to pick up in India because it is not exactly on the principles of insurance like wherein there is a threshold fixed for a particular weather-related peril and once the threshold is breached then everything from ground up is paid. So, whether the person suffers from a loss or not, it is paid. So, this involves a lot of active collaboration with FinTech companies, InsureTech companies.”

— Girija Subramanian, Chairman cum Managing Director

Nippon Life India Asset Management Limited | Mid Cap | Asset Management Company

Nippon Life India Asset Management is a leading Indian asset management company offering a diverse portfolio of mutual funds, ETFs, and alternative investment products. It leverages a strong retail distribution network and a strategic partnership with Japan’s Nippon Life Insurance to drive long-term growth.

[Concall]

The company is forming a strategic partnership with European giant DWS Group by divesting a minority stake in its AIF subsidiary. This collaboration is expected to enhance the company’s product capabilities in passive investments and expand its global distribution reach.

“Our Board of Directors at their meeting on November 13, 2025, authorised the Company to enter into a strategic collaboration with DWS Group (a leading European Asset Manager), wherein DWS intends to acquire a minority stake of up to 40% in Nippon Life India AIF Management Limited by subscribing to fresh issuance of equity shares. Further, as part of a wider collaboration, NAM India and DWS will also work closely in other areas including passive investment products and global distribution.”

— Sundeep Sikka, Executive Director & CEO

Management highlighted massive growth in commodity-based ETFs, with assets under management nearly doubling in a single quarter. This surge indicates a strong shift in investor preference toward physical asset-backed digital instruments for hedging and portfolio diversification.

“The Industry continued to witness a surge in Gold & Silver ETF volumes in the quarter. Combined AUM in these 2 ETFs for NIMF was ~INR 688 bn as of Dec 31, 2025, up 54% QoQ. Subsequently, the combined AUM in these 2 ETFs has crossed INR 1 trillion in Jan-2026.”

— Parag Joglekar, Chief Financial Officer

The management noted that equity inflows are becoming increasingly concentrated in specific categories like Flexi Cap due to market volatility. This trend requires the company to pivot its marketing and product focus to capture shifting investor demand within the equity segment.

“So, like it was mentioned in the opening speech, there has been a market volatility which is there in the equity market. And if one has seen the AMFI data, the flows in equities are now narrowing down to certain categories. There is one category called Flexi Cap which is a very large category in the MF industry, which is where there is a lot of investment coming in.”

— Saugata Chatterjee, Chief Business Officer

Management believes the ETF market is a scale game where dominant players capture the majority of liquidity and trading volume. This winner-take-all dynamic benefits the company given its existing large investor base and high trading volumes.

“Unlike mutual fund business, ETF business globally, the top 2-3 players always have the lion’s share. Because I mean unlike a mutual fund where an investor typically likes to diversify in 2-3 different schemes, here the underlying is the same. And typically for us because we have, as we talked about today, more than 56 lakh investors.”

— Sundeep Sikka, Executive Director & CEO

The company is positioning its New Asset Class (SIF) as a high-margin business vertical targeting sophisticated investors rather than a mass-market AUM play. This focus on value-added services over sheer size suggests a strategy aimed at protecting and enhancing overall company yields.

“I believe when we will be discussing 5 or 10 years down the line, SIF will be a separate business vertical, and we will be discussing that in that much detail. We clearly see if you can add value to the investor, the investor will be willing to pay. So, our strategy for SIF will be not AUM but more profitability.”

— Sundeep Sikka, Executive Director & CEO

The CEO expects structural pressure on asset management yields to continue due to regulatory and competitive factors. The company plans to offset this revenue compression by improving operational efficiencies to maintain its profitability margins.

“One needs to be mentally prepared that the yields can come down by 1 or 2 basis points year after year and that is the direction we will keep moving. Whatever the reason, the idea is how do you build up efficiency in the Company to absorb that.”

— Sundeep Sikka, Executive Director & CEO

Management is maintaining a cautious stance on small-cap valuations by continuing to restrict lump sum inflows to protect existing investors. This disciplined approach prioritizes long-term portfolio health over short-term asset growth during periods of perceived market overheating.

“See, the small-cap fund, as you know, it has been almost two years, we have stopped taking lump sum investments. We were very clear that at that point in time, the market was getting more heated, and I think we were right to have arrested more flows in this fund. As we speak, we continue to be in that camp.”

— Saugata Chatterjee, Chief Business Officer

The company argues that high liquidity in their ETF products provides a superior experience through lower tracking errors, giving them a competitive advantage. This liquidity-driven moat allows the company to maintain premium pricing compared to smaller, less liquid competitors.

“But the only thing, generally, when we talk of ETFs, and I’m not sticking to gold or this thing, liquidity helps the investor get a lower impact cost, low tracking error, and these two things put together, if you get it right, it allows you the capability to charge higher. Whether you charge or not is a different thing, but it allows you to charge higher.”

— Sundeep Sikka, Executive Director & CEO

SBI Life Insurance Company Ltd. | Large Cap | Life Insurance

SBI Life Insurance is a leading private life insurer in India, operating as a joint venture between the State Bank of India and BNP Paribas Cardif. The company leverages an extensive bancassurance network and diverse agency channels to provide comprehensive life insurance, pension, and protection products.

[Concall]

There is a massive jump in the total insurance coverage being sold, which shows a shift toward high-value protection products. This is a positive sign for future profitability as these products generally offer better margins than simple savings plans.

“The growth in sum-assured reflects strong consumer confidence and rising awareness of financial protection. Individual and group new business sum-assured increased by 74% and 67% respectively compared to the same period last year, while rider sum-assured has grown significantly now contributing 30% of the individual sum-assured.”

— Amit Jhingran, Managing Director and CEO

Reported profits were weighed down by one-time costs related to new tax rules and labor laws. Underneath these adjustments, the core business is growing much faster than the headline numbers suggest.

“Taking these factors into account, the Company’s profit after tax for the period ended 31 December 2025 stood at INR 16.7 billion, representing a 4% growth over the corresponding period last year. Excluding this impact, the profit after tax for the period ended 31st December 2025 would have been INR 21. 5 billion with a growth of 34%.”

— Amit Jhingran, Managing Director and CEO

The key measure of new business profitability is rising despite the headwind of new taxes on commissions. Management is successfully using a better mix of products to keep margins within their target range.

“Value of new business stood at INR 50.4 billion, reflecting 17% growth with a margin of 27.2% for the period ended 31st December 2025, up from 26.9% in nine-month FY25 driven by both volume growth and favorable shift in product mix. The margin is reported after accounting for the impact of GST. Excluding this impact, the VONB margin would have stood at 28.3% with a gain of 140 bps.”

— Amit Jhingran, Managing Director and CEO

Growth in guaranteed savings products was slightly slower because the sales team focused on a popular new money-back plan. However, the high growth in protection products is helping to balance out the overall business performance.

“So, product mix, as far as you were talking about non-par growth, so I would like to highlight that on IRP basis, the growth in pure non-par products, excluding protection, is 10%. Protection has grown by 44%. The numbers of non-par could have been better, but during the quarter, we launched our participating product, Moneyback, and a lot of our distributors got diverted to that new product, and it showed very strong growth.”

— Amit Jhingran, Managing Director and CEO

The primary sales channel through SBI branches is showing improved momentum after some earlier concerns. This supports the company’s full-year growth target of 13% to 14%.

“Within the channel mix, different channels have their seasonality and third quarter specifically has always been very good for SBI Life. There is some good traction being seen in the SBI also of late and we are very sure that in the 4th Quarter also, we will be able to maintain our overall growth number as per our guidance of 13 %-14% and within that, all the channels are performing as per our expectations.”

— Amit Jhingran, Managing Director and CEO

A drop in long-term policy renewals was expected because of the specific group of policies sold during the pandemic. Management believes this is the final wave of this trend and that renewal rates will soon stabilize.

“Only the 61st month persistency which has come down, which previously also we have communicated that this is the COVID cohort, which is going to hit this year. This is going to be the last cohort, which we are expecting. 25 th month and the 37th month, it is just a marginal, which we are very hopeful that it will cover up in the current quarter itself.”

— Amit Jhingran, Managing Director and CEO

The company expects to neutralize most of the negative margin impact from new tax regulations by selling more profitable insurance types. This means the final impact on the bottom line for the year will be very minor.

“And what we are saying that the impact that we are going to get on the new business on account of GST, 150 basis points will get offset mostly by the better product mix in terms of the line of business and within the product and different kind of products. And that will mostly offset and balance remain will be approximately 30-40 basis points at the end of this year.”

— Prithesh Chaubey, President and Appointed Actuary

Customers are increasingly choosing pure insurance over plans that return their premiums, which results in more insurance coverage for less customer money. While this lowers the average premium per policy, it is generally better for the company’s long-term underwriting risk profile.

“For the same sum assured, TROP has a higher premium than pure protection. Here our mix is improving in favor of pure protection. So, the premium is going down for the same sum assured.”

— Amit Jhingran, Managing Director and CEO

New savings products offering 30-year guaranteed returns are seeing strong demand from customers seeking long-term certainty. These long-duration products help lock in customer relationships for decades, providing a steady stream of future income.

“So, in the product that we launched in non-par segment we see very good traction in the market. And there are 2-3 reasons for it, because it gives more flexibility and also giving the longer-term guarantee. So, we introduced 30 years kind of guarantee as well.”

— Amit Jhingran, Managing Director and CEO

Max Financial Services Limited | Large Cap | Life Insurance

Max Financial Services is the primary holding company for Max Life Insurance, one of India’s leading private life insurance providers. The company focuses on long-term savings, protection, and retirement solutions through a multi-channel distribution network.

[Concall]

The Insurance Act has been amended to allow the merger of insurance companies with non-insurance entities. This change clears the path for the company to consolidate its structure by merging Axis Max Life directly into Max Financial Services.

“Section 35 was amended to permit the merger of an insurer with a non-insurer subject to IRDAI approval. This is a positive development for Axis Max Life. Accordingly, we have received in-principle approval from our Board to initiate the process for the proposed amalgamation of Axis Max Life and MFSL.”

— Sumit Madan, Managing Director and CEO

The company is growing much faster than the rest of the insurance industry, particularly in individual premium sales. This outperformance has allowed them to capture more market share, now nearing double digits in the private sector.

“Continuing our strong trajectory, individual adjusted first year premium grew by 20% in 9 months FY ‘26, led by 18% growth in the number of policies. Our sales growth is twice the overall industry growth of 10%, translating into a private market share expansion of 53 basis points, taking our share now to 9.8%.”

— Sumit Madan, Managing Director and CEO

Management is seeing strong business momentum carry over into the fourth quarter with high double-digit growth in January. This suggests that the core partnership with Axis Bank remains a powerful driver for new sales.

“Before we move ahead, happy to note that our growth trajectory continues in the month of January as well. Our sales grew by 29% at a company level with proprietary and partnership channels growing at equal growth rate with a very significant contribution coming from a leading bank partner, Axis Bank.”

— Sumit Madan, Managing Director and CEO

Protection sales, which are high-margin products, saw a massive jump of nearly 100% during the quarter. This shift toward protection and credit-linked insurance is a positive sign for future profitability and risk management.

“Retail protection grew by 99% in Q3 with pure protection growing by 95% and riders by over 100%. In addition, our group credit protection business continued to scale steadily, recording 45% growth in Q3 ahead of the industry average, reflecting increasing penetration and a very strong partner engagement.”

— Sumit Madan, Managing Director and CEO

The company has finished renegotiating terms with its distributors to help cover the rising costs from tax changes. They are now focusing on redesigning specific insurance products to improve profit margins further.

“We have, to a fairly large extent, actually executed some of those things. And on the categories which are more critical and important in our assessment, that has largely, it is kind of achieved and done. Beyond this, I think the recovery and recouping would be more the product structure changes, management and navigation of product variants within the product per se to mitigate the impact that kind of came across.”

— Amrit Singh, Chief Financial Officer, Max Life Insurance

To prevent mis-selling in bank branches, the company has implemented automated checks to ensure customers actually need and understand the products they buy. This focus on quality should lead to better customer retention and fewer regulatory complaints.

“Using a lot of analytics and checks in our journeys, what we had and this is largely implemented in all our large bank relationships, that each and every sale that is done, it is assessed for its suitability. And also, there is a very smart verification process to independently assess whether the quality of sale is adequate and understood by the customer.”

— Amrit Singh, Chief Financial Officer, Max Life Insurance

The company remains committed to selling non-participating savings products because they offer guaranteed returns that customers value. They plan to keep innovating in this category to ensure they aren’t relying too heavily on any single type of insurance.

“But if you step out from quarterly introductions, etcetera, I think a non-participating design with the long-term guarantee proposition that it offers is a very important product, which the consumers can have as part of their asset allocation decisions. We will keep the overall product mix balance and you will keep seeing from our products teams innovations coming in this specific area.”

— Amrit Singh, Chief Financial Officer, Max Life Insurance

Management notes a consistent daily improvement in the demand for protection plans over the last few months. This trend indicates that the high growth in protection is a sustained shift in consumer behavior rather than a one-time event.

“I think on protection specifically, we have been observing the numbers since 22nd of September. And on a daily basis, we have seen our traction improving as far as protection is concerned. When we were looking at the numbers, other than the exception of Diwali, 1 day prior to Diwali and 1-day post-Diwali, we have seen some very healthy growth as far as protection numbers are concerned.”

— Sumit Madan, Managing Director and CEO

The planned merger between the holding company and the insurance subsidiary is expected to take about a year to 14 months once the application is filed. Investors should watch for the official regulatory guidelines as the next major milestone for this corporate restructuring.

“Obviously, there will be a regulatory framework which needs to get created. We await guidance and clarity and direction from the regulator on that aspect. As in once that is closed, from the date of filing of the scheme, we do not expect it to be more than 12 to 14 months kind of a time frame.”

— Amrit Singh, Chief Financial Officer, Max Life Insurance

Max Life has successfully established itself within its newest bank partnerships, capturing at least a quarter of the insurance business in those locations. This diversification reduces the company’s dependence on its primary bank partner, Axis Bank.

“The new banks, like I mentioned, across 7 banks, that we have acquired recently in all the 7 banks, we have a counter share of more than 25%. In 3 of those 7 banks, we have already become the number 1 player as far as counter share is concerned.”

— Sumit Madan, Managing Director and CEO

Management admits that new rules allowing customers to get more money back if they cancel their policy early are putting pressure on policy retention. This is a risk to long-term profitability as it may lead to more customers dropping their plans in the first year.

“On persistency, what I indicated was, yes, there is some pressure because of 13 months. There are certain specific designs where we are experiencing that pressure. And post post-surrender revision, as you are aware, that there was a surrender value which was accruing immediately. So some of that element also creates some bit of a pressure.”

— Amrit Singh, Chief Financial Officer, Max Life Insurance

PB Fintech Limited | Large Cap | Financial Services - Fintech

PB Fintech Limited is India’s leading online platform for insurance and lending products, operating the well-known brands Policybazaar and Paisabazaar. The company leverages technology and data to simplify financial decision-making for consumers while providing efficient distribution for insurance and banking partners.

[Concall]

Management notes that consumer trust is increasingly tied to the platform’s ability to assist during the claims process. This focus on post-purchase service is driving superior growth and customer retention in the Indian market.

“As I start, a very clear thing which is becoming crystal clear to almost everyone and specifically to us, is that people will buy insurance from the person who can help them at the point of claims. This is becoming super clear, and specifically in the Indian market. I think Policybazaar, with the efforts that it has put over the last 3-4 years, is clearly outstanding in that space, and that is leading to a huge amount of positive PR.”

— Yashish Dahiya, Chairman & Group CEO

Management expects all new business initiatives to achieve profitability or break-even starting from the current period. This shift reflects the operational maturity of the group’s expansion projects and strengthens the overall consolidated bottom line.

“As I see the new initiatives part of our business, I think here onwards, we should be break-even or profitable. So, I think, as you look at the P&L overall, what’s starting to happen is, of course, Policybazaar is doing what it’s doing and Paisabazaar, here onwards, is profitable, and New initiatives here on are going to be at break-even or profitable. So, overall, from a profit perspective, we seem to have very sound ground.”

— Yashish Dahiya, Chairman & Group CEO

The company is actively exploring international acquisitions to leverage its technological edge in large, mature markets. This strategy aims to replicate domestic success in regions where insurance distribution remains traditional and lacks digital innovation.

“We have spent the last 3-4 years looking across markets, Middle East, Southeast Asia, European markets. As you would appreciate, when we look at these, we look at size of market, and we look at our ability to transform that market. This has two components: what is that we have done in India and how does it apply in that market, and how could we bring that to bear?”

— Yashish Dahiya, Chairman & Group CEO

The current regulatory framework allows flexibility for companies to choose their distribution models within overall expense limits. Management believes its efficient digital-first approach provides a competitive advantage under these industry-wide cost caps.

“And I think this is a great framework, and I’ll explain why. Because there are different companies at different stages. Some company wants to put money in its own marketing, its own call center, its own employees, and get sales. Perfectly fine. You can do that within 30% or 35%, please go ahead and do it. Some companies would pay somebody on a variable basis, the same amount.”

— Yashish Dahiya, Chairman & Group CEO

Management remains open to lower take rates as long as the cost savings are passed on to the end consumer. They argue that high-quality business and scale allow them to maintain healthy margins even if industry commissions are compressed.

“You’ve now got the last 10-12 quarters of recordings and every time I’ve said I would always welcome reduction in take rates as long as the benefit does get passed on to the consumer. Sarbvir, if you have anything specific to add on that.”

— Yashish Dahiya, Chairman & Group CEO

International markets like the US and Europe offer significant profit potential but lack the digital distribution innovation seen in India. The company intends to export its advanced technology stack to these larger markets to drive global expansion.

“If you look at certain markets. The US is, I think, 50 times bigger than the Indian market; Europe is 15 times bigger than the Indian market; and genuinely, we have been observing, like, I have been particularly observing. They are very profit-rich markets, but they have almost zero innovation. Almost zero. And, of course, they are crying for innovation. So, I do think we will add a lot of value.”

— Yashish Dahiya, Chairman & Group CEO

Building a sustainable risk business requires long-term investment in disclosure capture and claims management rather than just paying higher commissions. This high-barrier-to-entry strategy creates a virtuous cycle of customer trust and recurring renewal income.

“-Risk products have to be sold on the basis of disclosure, and the fact that, in general insurance especially, that you are able to produce or help a person at the time of claim, because that’s the only way that that person will renew the policy again, will stay with you, etc, etc. I think the point that comes through, in risk products, is that it takes a while to build capability. One is in sourcing. One is to attract customers, which you see, Policybazaar has spent 18 years of solid advertising, talking about why you should buy health insurance and term insurance.”

— Sarbvir Singh, Joint Group CEO

The introduction of Managing General Agents (MGAs) could revolutionize the sector by allowing distributors to manage underwriting and claims. This regulatory shift would empower platforms to offer more tailored products and improve the consumer experience.

“Now, on an MGA side, I believe, MGA is the single most transformational move that can happen in the Insurance industry. And I believe that at not just a Policybazaar level, but at a strategic level. And why do I say that? See, when the distributor, who’s in touch with the consumer, who understands the consumer, at that point, becomes responsible for both the underwriting and the claim settlement, and at a wholesale level, is working with the insurance company.”

— Yashish Dahiya, Chairman & Group CEO

One 97 Communications (PayTM) Limited | Mid Cap | Financial Technology

One 97 Communications, known as Paytm, is a leading Indian digital ecosystem offering comprehensive payment services and financial products to consumers and merchants. The company specializes in device-led merchant subscriptions and the distribution of loans, insurance, and wealth management solutions.

[Concall]

The company is shifting its consumer growth strategy away from aggressive cash burning and toward high-quality product innovation. Investors should view this as a commitment to more sustainable unit economics and organic market share gains.

“It’s been a year plus since we had decided that we’ll head down and execute on our core business principle, core business, which is payment and financial services. And we continue to dominate the merchant ecosystem. And now we have started to build for consumers, and like I had promised earlier, we won’t throw money on consumers, rather we will throw technology and products on consumers.”

— Vijay Shekhar Sharma, Founder and CEO

Management is clarifying that their financial model does not rely on government subsidies like the Payment Development Fund for profitability. This reduces the risk profile for investors regarding regulatory or subsidy-related income fluctuations.

“Does the industry need PIDF? Well, as an industry, we are welcoming every initiative that the government or any other entities look to give us. But at the same point of time, our business model is not based on this. That’s the key word. We are not sitting here to take grants as our profit and revenue. That’s it.”

— Vijay Shekhar Sharma, Founder and CEO

The company expects to quickly recover lost subsidy income by raising merchant fees and improving sales efficiency. This shows management’s confidence in their pricing power and the essential nature of their hardware devices.

“Our expectation is that obviously the work started immediately and we were ready to recalibrate what we have said, higher subscription revenues and more targeted sales efforts. Our expectation is at least 30 - 40 percent of this will be offset this quarter and more over time. The work, like I said, is starting immediately.”

— Madhur Deora, President and Group CFO

The relaunch of the ‘Buy Now, Pay Later’ product is showing much faster adoption rates than previous iterations. Early traction in this high-margin vertical suggests a potential re-acceleration of consumer credit revenues.

“Wait and see the numbers that Vijay mentioned. It’s been three months since launch. We have crossed one lakh customers. And within six months of launch, we expect to cross hundred crores of disbursal. So that’s the early trajectory. Of course, it’s much faster than the first time we launched Postpaid.”

— Madhur Deora, President and Group CFO

The company is actively pruning low-value business lines to focus strictly on products that strengthen its competitive moat. This disciplined capital allocation is intended to improve long-term return on investment for shareholders.

“And we don’t think that, ok, let’s just do this business. For example, like we used to distribute credit cards and we just stopped that business. Because I was like, it does not add to anything. Just because you have traffic, you can try doing it, is not a business model. Let’s say that is what we do, which grows your moat and protects and expands the moat instead of just because you are.”

— Vijay Shekhar Sharma, Founder and CEO

Continuous cost optimization is being used to fund future growth initiatives rather than just cutting expenses. Investors should see this as an attempt to improve operating leverage while maintaining innovation.

“And the good thing is that I’m removing the deadwood continuously. That project will continue. So there you see relocation happening within the cost. It is not that we are not investing in the future. We are rather investing in the future and removing what we don’t want to carry forward. That’s what it is.”

— Vijay Shekhar Sharma, Founder and CEO

Net payment processing margins are structural and consistently trending above previous guidance levels. This indicates that the core payments business is becoming more profitable as the merchant mix evolves.

“Exceeding that [4 basis points] consistently. Some of the instrument mix is helping. Last quarter there was a lot of question whether this was EMI driven or festive driven. That’s always a part of it, but it is not the major driver. We’re not guiding to higher numbers right now.”

— Madhur Deora, President and Group CFO

Paytm has moved away from free QR codes to focus entirely on monetizable device-carrying merchants. By targeting competitors’ hardware, they are prioritizing high-value, fee-paying users over simple transaction volume.

“QR only merchants are negligible. I mean, my sales team does not even deploy QR merchants. Internal funnel for device deployment is, churn the other competition’s device. It is not QR. We used to do it. And we used to deploy QR and upgrade them to Soundbox. Now we’re like, okay, the bad device is out there. Let’s churn them into us.”

— Vijay Shekhar Sharma, Founder and CEO

The company is focusing on high-quality merchant loans where they have proprietary transaction data rather than simple broad-market loan distribution. This strategy is designed to ensure better asset quality and lower defaults for their lending partners.

“So it may look flat, but internally very important to build a mode of payment led credit instead of just distribution of credit, which is traffic led. Okay. Now, this being the personal loan. Merchant loans are consistently growing. There is a great understanding by the industry - creditors or merchants, both sides that you do good. You get good credit.”

— Vijay Shekhar Sharma, Founder and CEO

Management sees significant headroom to grow loan penetration within its existing merchant base from 7% to potentially 20%. This internal growth runway offers a path to higher margins without requiring massive new customer acquisition costs.

“This number could get as high as 20%. Our whitelist base is 40 to 50%, typically. So, and I’m assuming that the whitelist based on everyone will need a loan, even once a year. But just to be clear, when we think about the business, we don’t think about primarily, can we drive penetration higher? We think about product market fit.”

— Madhur Deora, President and Group CFO

Paytm is building its own AI models and agents to drive internal efficiencies and create new commercial use-cases. This technical leadership is intended to maintain their competitive advantage against global and local fintech rivals.

“Guys, you are underestimating the power of ability of companies that will not only leverage AI by asking their vendor to deploy, but they will create the use-cases and they will create the use-cases for optimizing cost or expanding the business line items. And I’m phenomenally very happy to say this. This goes especially to the team that did it. And with that intention that we will keep not just playing along, but we will lead the race of AI in the country.”

— Vijay Shekhar Sharma, Founder and CEO

Energy

Reliance Industries Limited | Large Cap | Oil Gas & Consumable Fuels

Reliance Industries is a diversified Indian conglomerate with market-leading positions across energy, petrochemicals, retail, and digital services. The company is currently transitioning towards a green energy future through massive investments in an integrated new energy ecosystem.

[Concall]

The company received a credit rating upgrade because its earnings are now coming more from stable consumer businesses than cyclical energy markets. This change will allow Reliance to borrow money at lower interest rates from a wider pool of global investors.

“And just an update, you may have seen that S&P changed our rating from BBB Plus to A Minus, which is really two notches above. They have focused on the fact that higher portion of our earnings are coming from less cyclical businesses, especially the consumer side. And of course, as a company, we will benefit because there are pools of capital which lend only to A-rated consumers, A-rated companies, and liquidity improves, credit spreads come down.”

— V. Srikanth, CFO, Reliance Industries Limited

Jio has built its entire mobile and fixed wireless network technology internally rather than buying it from global vendors. Controlling the full technology stack allows the company to operate with higher efficiency and lower costs at a global scale.

“Today, our whole core of 4G and 5.G run on our own stack, developed in-house. We have, of course, spoken about the fixed wireless solutions technology that we have deployed in India, which is working very well, which has made us the world’s largest fixed wireless operator already, which is, again, developed completely in-house. It is a completely Jio solution, both the software side, the software stack, as well as hardware, and that is working quite well.”

— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited

The retail division is seeing explosive growth in its quick commerce business, reaching a run rate of 1.6 million daily orders. This rapid expansion positions Reliance as a dominant player in the high-frequency grocery and delivery market.

“Hyperlocal commerce, we are scaling up pretty rapidly. We are almost at; we ended the quarter at 1.6 million. On a quarter-on-quarter basis, the growth was 53% in terms of number of orders on a Y-O-Y basis, 360%. So, we are scaling up this business very, very quickly.”

— Dinesh Taluja, CFO & Corporate Development, Reliance Retail

The FMCG business is planning to double its production capacity for drinks within a single year by setting up several new food parks. This aggressive infrastructure build-up shows management’s commitment to capturing a massive share of the consumer goods market.

“We continue our expansion. We will be more than doubling our capacity on beverages this year. We have high-speed lines across 12 states during the year. We also have started working on our food parks. We have been allocated land across states in multiple states.”

— Ketan Mody, Executive Director, Reliance Consumer Products

Reliance has shifted most of its chemical production to use ethane as a raw material instead of the more expensive naphtha. This strategic move protects the company’s profit margins even when global petrochemical prices are under pressure.

“If you see the blue bars are the ethane cash margins on naphtha feed and whereas the green margins or green bars are the cash margins from the ethane feed. And over last 10 years while the blue bars have come down very sharply from 644 to barely anything in last four years... However, if you see the green bars and these are U.S. ethane price-based numbers landed in Asia, they have remained pretty robust. And our portfolio today, roughly three-fourth of our portfolio is based on these green bars, which has meant that we have been relatively very minorly impacted compared to our competitors.”

— Amit Chaturvedi, President – Petrochemicals, Reliance Industries Limited

The company is building massive solar component factories that are among the largest in the world outside of China. These plants will secure the company’s supply chain and provide a significant competitive edge in the global shift to renewable energy.

“Polysilicon is probably one of the third, one of the three large polysilicon facilities outside China and glass, again, one of the largest glass plants outside China are the world class for the solar cell and solar modules. During this current year, we will again commission these facilities, fully ramped up to the capacity of 10-gigawatt peak and further expanding it as we progress on 20-gigawatt peak and on capacity.”

— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited

Management believes their solar manufacturing project is being built at a fraction of the cost required in Western countries. This cost advantage combined with massive local scale makes their green energy business difficult for global competitors to replicate.

“I can probably say with much more confidence that I do not think anyone else can build this. Definitely, if the same facilities have to be built in US or Europe, you would be talking about at least five to six times more cost. But even delivery in those geographies with the kind of labour, which is required at the peak, we had some 20,000 workers working to deliver this, is going to be nearly impossible.”

— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited

Management confirmed that the public listing of Jio is now imminent and expected within the next few months. This highly anticipated IPO will likely unlock significant value for existing shareholders as the digital business matures.

“First one, the Jio IPO, internally we are working on it of course, we are awaiting the new notification to come from the government to see what the final details are going to be. We are working on the assumption that it is in line with whatever SEBI has recommended, but we will still have to wait for that before we finalize and then start the process, but it is imminent now, so we are just awaiting the final notification, so it should happen in the next few months for sure.”

— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited

Jio aims to grow its revenue per user by 5% to 6% annually through organic shifts in customer behavior rather than just price hikes. The superior quality of their 5G network is the primary driver attracting high-value customers who use more data.

“Organically, if we can improve our ARPU by 5% to 6% a year, I think that is a good number, good place to be in, while adding many more customers. The short answer to the second question really the quality of the network, the standalone architecture, which is providing us opportunities to give more, and we have not even launched some of these slice services which also are on the roadmap and will be launched.”

— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited

Reliance’s quick commerce division is already making a profit on individual orders, unlike many competitors who are still losing money. By using their existing physical stores as delivery hubs, they can expand into delivering clothes and gadgets with very low extra costs.

“The only thing I would say is on a contribution margin level, we are positive. We are pretty uniquely positioned in the way that we are able to leverage our existing network of 2500, 3000 stores to do quick commerce and remember quick commerce is not just grocery it is also we are doing that in electronics, we are doing that in fashion as well.”

— Dinesh Taluja, CFO & Corporate Development, Reliance Retail

The cost of electricity is the biggest expense in making solar components, which is why Reliance is building its own renewable power plants. This integrated approach allows them to manufacture solar panels cheaper than those who must buy power from the grid.

“One of the key components of the cost through the value chain is also the power cost and that is where our ability to move to round the clock green energy and further optimize in the power cost gives us an additional leverage and the benefit through the value chain. I would not necessarily be able to quantify at this point of time, but I can tell you that in a polysilicon production the single most variable is the power cost.”

— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited

Reliance may not keep all its massive green energy generation assets on its own balance sheet, potentially moving them into separate utility-style structures. This financial strategy allows the company to fund massive growth without taking on too much direct debt.

“What we take for inhouse consumption, what we give for green chemicals absolutely, so the energy supplied will still be in some way utility, so you can look at those kind of power generation assets in a very different way. It need not be that it has to be entirely on our balance sheet, so all that flexibility to take care of in the broader construct of what we are trying to solve and I am being very, very similar to what I have been answering this question right from day zero and this remains unchanged.”

— V. Srikanth, CFO, Reliance Industries Limited

Retail

Dabur India Limited | Large Cap | Personal Care

Dabur India is one of the world’s largest Ayurvedic and natural health care companies, maintaining a diverse portfolio across health supplements, oral care, and beverages. It operates with a massive distribution network in both urban and rural India while expanding its presence in international markets.

[Concall]

Management observed that consumer demand began to pick up after the initial disruption caused by tax changes. The continued strength in rural areas is a positive sign for the company’s broad reach and volume stability.

“Demand trends in India witnessed a gradual recovery following the GST rate cuts. While the month of October experienced transient headwinds due to GST transition, demand improved over the rest of the quarter. Rural markets continue to outperform urban markets, consistent with recent quarters.”

— Mohit Malhotra, Chief Executive Officer

Consumers are moving quickly toward herbal and natural products in the toothpaste market. Dabur’s focus on these segments is allowing it to take market share from traditional, non-herbal competitors.

“The Herbal segment grew 530 basis points ahead of non-herbal segment, highlighting a strong and sustained consumer shift towards the natural and herbal oral care products. Capitalizing on this trend, our portfolio outperformed overall category growth, driving gains in market shares.”

— Mohit Malhotra, Chief Executive Officer

High-end juice and health-focused beverage products are growing significantly faster than basic offerings. This shift toward premium products is likely to support better profit margins in the food and beverage division.

“In Juices and Nectars, the premium portfolio, comprising ‘Real Activ’ 100% juices and coconut water, continued to scale up, delivering a robust growth of 38% and 52%, respectively. The Nectar portfolio remained muted on account of an unfavorable season.”

— Mohit Malhotra, Chief Executive Officer

A massive spike in coconut oil costs forced the company to raise prices significantly to protect its profits. Investors should note that recent high growth in this segment is driven by higher prices rather than selling more units.

“In coconut oils, there has been a huge inflation of roughly around 100% odd. ... So, all companies have taken price increases in coconut. So, if you look at the growth, growths are essentially price-driven growths, which I think is one-off till the time we lap over the base of the cost increases in coconut.”

— Mohit Malhotra, Chief Executive Officer

Rivalry in the toothpaste market remains intense, particularly in large supermarkets and online platforms. While the pressure eased slightly recently, management is cautious about whether this competition will stay low.

“So, I think competitive intensity in oral care has been inching up, especially in the modern trade side, with the main market leader being very aggressive on the modern trade. And of late, a bit of abatement was seen in the previous quarter, but not so much so that I can say that it is going to be sustained.”

— Mohit Malhotra, Chief Executive Officer

Dabur is successfully modernizing its health supplements by introducing new flavors and sugar-free options. These new versions are growing much faster than the original products and helping reach more health-conscious buyers.

“Gur has done exceedingly well for us. Ratnaprash has done well for us. So, all the newer variants that we have added in Chyawanprash have done. Sugar-free is doing exceedingly well. We have almost doubled our distribution in sugar-free also.”

— Mohit Malhotra, Chief Executive Officer

Management is optimistic that the worst of the demand slowdown and inflation is over. They expect a steady increase in sales performance as consumer spending power recovers in the coming months.

“And gradually, slowly, there will be only improvement on account of the sentiment improving. Consumer confidence levels are improving. Even the CPI inflation has reined in. So, I think the subsequent quarters are going to be better, because the 1st quarter was hit by season, 2nd Quarter was hit by GST, 3rd Quarter has been significantly better, and the 4th Quarter would even be better.”

— Mohit Malhotra, Chief Executive Officer

The company expects future growth to come from selling more items rather than just raising prices. While this is healthier for long-term market share, it requires more effort in marketing and distribution to achieve.

“The next year growth is going to be more volume-driven growth and not so much price-driven or value-driven growth. So, that is a little remark. And volume-driven growth is a little harder to get as compared to a combination of a value and a volume.”

— Mohit Malhotra, Chief Executive Officer

As raw material costs fall, the company intends to spend most of those savings on more advertising to drive growth. They only plan to keep a small portion of these savings to boost their final profit margins.

“And whatever upside in gross margins we will get, a significant portion of that we may want to reinvest in advertising and balance around 20%- 25% of that expansion in gross margin we will give back as operating margin expansion.”

— Ankush Jain, Chief Financial Officer

The company is cleaning up its portfolio by removing slow-selling items and focusing on successful new products. This strategy of narrowing their focus to high-growth categories like health juices should improve operational efficiency.

“We have rationalized a lot of tail products which were there. That has been rationalized. That said, a couple of NPDs are really doing very well for us. One is health juices that we had launched. Health juices are giving a growth of around 17% to 18% for us.”

— Mohit Malhotra, Chief Executive Officer

Jubilant FoodWorks Limited | Large Cap | Restaurants

Jubilant FoodWorks Limited is India’s largest food service company, holding the master franchise rights for Domino’s Pizza, Popeyes, and Dunkin’ Donuts. The company operates an extensive network of over 3,500 stores across India, Turkey, Sri Lanka, and Bangladesh, supported by a specialized supply chain and technology infrastructure.

[Concall]

The Turkey business has reached a self-sustaining stage where it can now service its own acquisition debt through internal cash flows. This removes a major financial burden from the Indian entity and validates the company’s international expansion strategy.

“Turkey business continued to give positive results. It gives us immense pleasure to share with you that along with strong revenue growth and PAT, the business is generating steady cash flows and over the last couple of quarters have been paying dividends to service JFL’s acquisition-debt obligations. Our international business in Sri Lanka and Bangladesh also reported impressive top line growth and improvement in bottom line.”

— Hari S. Bhartia, Co-Chairman & Director

Management is successfully using premium product innovations to drive sales growth while simultaneously improving unit economics. These margin-accretive launches help offset inflationary pressures in raw material costs like dairy and flour.

“Our recent new product launches, including Sourdough Pizza and Cheese Lava Pull Apart, have seen an overwhelming response and have scaled rapidly in a short period. Also, these products are accretive to gross margin. India revenues stood at Rs. 18 billion, growing at 11.8% Y-o-Y.”

— Sameer Khetarpal, CEO & MD

The company is staying price-competitive by matching the aggressive entry-level pricing strategies of major delivery aggregators. This move protects the customer base in a price-sensitive market, even if it requires short-term tactical adjustments.

“So I do agree that in the last quarter or so, aggregators have brought down their minimum order value to Rs. 99. And in some places, we had to go back and correct and match that to not lose market share. So, we’ve done that.”

— Sameer Khetarpal, CEO & MD

Management is leveraging artificial intelligence to freeze corporate headcount growth and optimize administrative costs. This digital transformation is starting to show up as operating leverage, allowing revenue to grow faster than expenses.

“Also we’ve been very disciplined in head count increase. We’ve also deployed technology and AI, we’re beginning to use to drive efficiencies in our corporate G&A, and that has given the leverage. And I think we’ve been super disciplined in the last 2 years in where to deploy the technology.”

— Sameer Khetarpal, CEO & MD

The use of data-driven AI tools for store location selection is reducing the risk of opening underperforming outlets. Improving productivity at mature stores suggests that the brand remains healthy even as the network becomes more dense.

“Our site selection is totally AI-enabled now and we have a list of 1,000 stores. So I do see that the brand is very strong. Our mature store ADS has been the highest ever in the last quarter.”

— Sameer Khetarpal, CEO & MD

Jubilant is successfully shifting its customer base toward its own digital platforms rather than relying on third-party aggregators or walk-in traffic. Controlling the customer data and the delivery experience is a critical competitive advantage for sustaining long-term loyalty.

“Post-COVID and more recently, because all the investments are in 20-minute delivery, free delivery, the largest new customer acquisition channel actually is our own app and dine-in or takeaway is lesser. So therefore, both in terms of absolute and percentage growth, our own asset is the largest and the fastest-growing channel, so which augurs well for us.”

— Sameer Khetarpal, CEO & MD

The company is beginning to explore ad monetization on its app, targeting 1% of revenue from this high-margin stream. This represents a new, high-ROI revenue vertical that leverages the company’s massive digital traffic.

“At least my own take is at the right time, I’m not saying it short-term, we should get about 1% of our revenues on that channel. We should be able to monetize to that extent. Having said that, we have taken a conscious call to not monetize preorder or the preorder journey.”

— Sameer Khetarpal, CEO & MD

The company is shrinking the physical size of its stores to align with the dominant trend toward home delivery. Smaller store formats will reduce rental overheads and improve the overall profitability of the store network.

“Our per square footage of our stores is on a downward trend. Again, like you likely said, if you’re hitting a 75% delivery mix now as a business, it could vary between the tiers of cities we operate in. Overall, the square footage of our stores is coming down, which will again be an additional flip to our rental, right, going forward.”

— Suman Hegde, Chief Financial Officer

Management expects the margin dilution from newer brands like Popeyes to decrease by 50% in the near term. As these emerging brands reach scale and break even, it will provide a significant boost to consolidated company margins.

“And the reduction of the drag on the EBUs, at the point in time that we had disclosed our numbers, the drag was of Popeyes, Dunkin and Hong’s was approximately about 230 bps, 250 bps. And we should see that halving in that journey to getting to the overall margins up.”

— Suman Hegde, Chief Financial Officer

Management has decided against a single ‘super-app’ strategy, choosing instead to maintain distinct digital identities for its brands. This approach allows for more targeted marketing and preserves the unique customer experience for different food categories.

“So at least my past experience and knowledge suggest that this is not a good investment of technology. The two brands are different. Occasions are different. We’ve launched Popeyes’ own app.”

— Sameer Khetarpal, CEO & MD

FSN E-Commerce Ventures Limited | Large Cap | Specialty Retail

Nykaa is a leading Indian digital-native platform specializing in the retail of beauty, personal care, and fashion products through an omnichannel approach. The company operates multiple online platforms and physical store formats while also managing a growing portfolio of owned consumer brands.

[Concall]

The fashion vertical is showing significant improvement in profitability and is nearing an EBITDA break-even point. Investors should view this as a reduction in the cash burn traditionally associated with the company’s newer business segments.

“And from an EBITDA margin perspective, happy to say that this quarter, the fashion business EBITDA margin is minus 2.0%. It’s come down from minus 5.4% a year ago. And even on a 9-month basis, the losses for the fashion business now stand at minus 3.7% of net revenue.”

— Falguni Nayar, Executive Chairperson, MD and CEO

Nykaa is expanding its business model to provide full-stack digital and physical operations for major global brands. This shift toward a service-led platform model creates stickier relationships with international partners and diversifies revenue streams.

“We have partnered with Nike to run their D2C business. In India Kiehl’s has similarly trusted us to run their entire India business, be it their D2C website, their stores as well as exclusively e-commerce and sell it on other platforms. There was a similar business we had started doing with Foot Locker earlier, which has been growing.”

— Falguni Nayar, Executive Chairperson, MD and CEO

New specialty store formats are successfully attracting a male demographic that was previously under-served. Expanding the customer base beyond women provides a significant new growth lever for the beauty segment.

“Interestingly, 45% plus of the business from these stores is coming from men’s fragrance. So, this store format is definitely playing out the way we expected, which is to have a much wider appeal than just our target female audiences. It’s also appealing to men in India.”

— Anchit Nayar, Executive Director and CEO, Beauty

The company has fully integrated its store network to support rapid hyperlocal deliveries in major cities. This move directly addresses the rising consumer demand for speed and counters competition from quick-commerce players.

“On top of the fact that we are now live in all seven Tier 1 cities with Nykaa Now. Also, all of our retail stores are now enabled with hyperlocal delivery capabilities across the country. And this is what’s allowing us to sell a lot of our luxury beauty brands through this quicker delivery model.”

— Anchit Nayar, Executive Director and CEO, Beauty

Management clarified that while new customers spend less initially, their spending increases over time through platform trust and education. This suggests that current customer acquisition costs will yield higher returns as these cohorts mature.

“New customer AOVs tend to be lower than repeat customer AOV. And that doesn’t really have to do with the quality of the customer. That’s just how the customer, the more they engage with the platform, the more comfort they get shopping on the platform... we are not seeing the AOVs for them dipping meaningfully.”

— Anchit Nayar, Executive Director and CEO, Beauty

Nykaa has modernized its advertising platform to allow brands to target consumers at every stage of the buying journey. This structural shift toward high-margin ad revenue significantly enhances the company’s overall margin profile.

“Historically, it used to be all top-of-funnel advertising opportunities, but we’ve built out the technology and what we call as the MarTech stack to enable brands to do advertising across the funnel... So we’ve just created a much larger bouquet of offerings for brands, which we’re able to monetize and so that’s more structural in nature.”

— Anchit Nayar, Executive Director and CEO, Beauty

Management is prioritizing order frequency over individual basket size for their quick-delivery service. If successful, this strategy will lead to higher annual spending per customer despite lower transaction values.

“Is there a chance that the average order values for Nykaa Now orders can be lower than mainline platform orders? Yes, that is possible... We’re more focused on seeing that if the frequency of purchase increases because of Nykaa Now, then that benefit is more than an offset to the potential dilution of average order values.”

— Anchit Nayar, Executive Director and CEO, Beauty

The Nike partnership is structured to mirror traditional e-commerce unit economics while leveraging Nike’s brand strength. This allows Nykaa to capture high-value sales without the traditional risks of inventory heavy multi-brand retailing.

“It is finally from a unit economic perspective for Nykaa boil down to very similar to e-commerce revenues and margins where there is some inventory, there is margins like an e-commerce company and then there are costs for marketing and everything. But everything is well-structured and covered. So we think this is a very good outcome for us.”

— Falguni Nayar, Executive Chairperson, MD and CEO

Gross margin improvements are being driven by advertising revenue and the increased scale of private labels. These internal levers help protect profitability even if external market conditions or category mixes fluctuate.

“I think there’s improvement in ad income for the core business. Overall, B2B net retention margins are much lower than gross profit margin of the beauty business... and also owned brands have also had a role to play and improving profitability of owned brands also have a role to play.”

— Falguni Nayar, Executive Chairperson, MD and CEO

Potential trade deals and lower import tariffs could make international premium brands more affordable for Indian consumers. Increased volume from lower prices would benefit Nykaa’s role as a major importer and distributor.

“So, I think there is probably a benefit to, not only to us, but to our international to our global brand partners in terms of the kind of additional volumes they could do with better pricing, if that’s the decision they choose to make. So yes, it is definitely, we’re looking forward to seeing how this plays out.”

— Anchit Nayar, Executive Director and CEO, Beauty

Chemicals

Pidilite Industries Limited | Large Cap | Specialty Chemicals

Pidilite is India’s leading manufacturer of adhesives and sealants, dominated by its flagship brand Fevicol. The company also maintains a significant presence in construction chemicals, art materials, and industrial resins.

[Concall]

Lower raw material costs helped expand gross margins, but the gains were temporarily masked by a one-time employee benefit expense. Investors should note that the underlying profitability is better than the reported numbers suggest due to this non-recurring item.

“Our gross margins at a stand-alone level improved by about 200 basis points as input prices remained benign. However, this benefit in the material cost was offset because of a one-time provision that we took on account of the new Wage Code. Basically, for two elements, gratuity and leave encashment, we have recognized the impact because of the new Wage Code that resulted in a onetime charge of INR47 crores in stand-alone and about INR52 crores in consolidated.”

— Sandeep Batra, Executive Director Finance and CFO

The pigments division faced a sharp downturn this quarter because of its high reliance on the American market. This highlight’s the company’s vulnerability to specific international trade cycles and tariff discussions.

“In our pigments business, we have a direct exposure to U.S. as in we do export to U.S. And U.S. is a large component of our pigment exports overall. So I think that is the piece. This part got affected quite a lot in Q3 of the current financial.”

— Sudhanshu Vats, Managing Director

Management believes the worst of the export decline is over as they adapt to new trade tariffs and alternative supply strategies. This forward-looking confidence suggests a stabilization of the B2B segment in the coming quarters.

“Our own sense is that this is largely behind us. We should see action based on the new tariff rate, hopefully, maybe by the turn of this quarter itself, but definitely as we move forward. We also feel that the impact on B2B per se in this quarter and future quarters will also be minimal because of this prolonged negotiation, we had also built a few other plan Bs, if I could say.”

— Sudhanshu Vats, Managing Director

A potential trade agreement with the European Union is expected to benefit exports, but the actual impact is several months away due to the long ratification process. Investors should view this as a medium-term catalyst rather than an immediate revenue driver.

“EU trade deal benefits will accrue to us, but there are two things on EU trade deal, perhaps maybe three. I think one is that EU trade deal till the time it is ratified by the European Parliament and all that, is at the very least, 6 months away, maybe 9 months away. So therefore, anything in that in terms of when the rubber hits the road on the ground will happen only towards the end of this year.”

— Sudhanshu Vats, Managing Director

The company is aggressively investing in the Roff brand to replicate the mass-market success of Fevicol in the tile adhesive category. This strategy aims to shift the category from a commodity to a consumer-driven brand with higher loyalty.

“I think Roff is our next big brand. And when we build a brand, we built a brand holistically. We do not say we are building the brand only for applicators or vice versa only for consumers because some of them are not strictly, in any case, Bazaar brands are not strictly only, India is a DIFM country, so not strictly to be used by the consumers, but consumers are aware of them.”

— Sudhanshu Vats, Managing Director

The business is largely insulated from housing market slowdowns because nearly three-quarters of revenue comes from repairs rather than new builds. This high exposure to the renovation market provides more stable and predictable earnings for investors.

“Our portfolio is not only new construction dependent. Our portfolio has new construction, renovation and repair. And renovation and repair account for maybe 70% plus, I would say, 70% to 75%, and new construction is more like 25%, maybe a little higher, so depending on the cycle.”

— Sudhanshu Vats, Managing Director

Management is not seeing the real estate cooling that some analysts fear, noting steady activity across residential and commercial projects. This positive on-the-ground view contradicts broader market concerns about a construction downturn.

“As of now, I can confirm to you that we haven’t seen any slowdown whatsoever even in residential. And by the way, within the industry, we keep talking to each other who are in the allied businesses. And as of now, we do not see any slowdown in any part of the construction segment.”

— Kavinder Singh, Joint Managing Director

The company is intentionally prioritizing top-line growth and brand investment over maximizing immediate profits. This balanced approach aims to capture higher market share while keeping margins within a healthy, sustainable range.

“We are also very conscious that we should have right profitability, at the same time, focus on building capabilities, building brands. And all of that is leading to improved in revenue growth, as you pointed out. So the question is, from where we stand, from our vantage point, the way we are seeing, we are seeing improvement in top line growth.”

— Sudhanshu Vats, Managing Director

The Dr. Fixit brand is seeing its strongest growth performance in several years, indicating a successful ramp-up in the waterproofing segment. This suggests that competitive pressures in construction chemicals are being effectively managed.

“If you look at Dr. Fixit’s growth this year is better than the growth has been in the last 2 to 3 years. I can tell you that. I think it is distinctly better. So we pushed this up a little bit.”

— Sudhanshu Vats, Managing Director

Management intends to use their strong brand power to take small, tactical price increases even when raw material costs are low. This ability to maintain a ‘pricing gap’ over volume growth helps protect margins against future inflation.

“We always continue to identify such opportunities where we can take pricing without actually hurting the premium that we charge, without the premium going way beyond our comfort corridor. So this kind of gap that you saw in the third quarter, as Sudhanshu said, anywhere between 100 bps or so, should get maintained.”

— Sandeep Batra, Executive Director Finance and CFO

Growth in the tile adhesive market is currently limited to walls, as many builders still use cheaper cement for floors. The long-term growth story for the Roff brand depends on successfully educating the market to switch to adhesives for all surfaces.

“Tile adhesive as a category is a replacer of cement, as you know. And it is definitely more expensive than cement, okay, and significantly expensive. So while the conversion from cement to tile adhesive is going on reasonably well in the vertical surfaces, the conversion on the flooring piece is not as good as it could be because people do not see the need to replace cement on the floor.”

— Kavinder Singh, Joint Managing Director

The new NioPro premium range is showing early success, allowing the company to segment the market more effectively. This premiumization strategy helps protect margins and caters to specialized high-end construction requirements.

“I want to share it on behalf of the team that NioPro is doing very well Jay. So therefore, I just want to leave you with saying that as we are in this game, we will have a Roff range of products and premium NioPro range of products, which will be selectively available, available to very select dealers and to the project teams.”

— Sudhanshu Vats, Managing Director

The company is working on entering the high-tech electronics and automotive adhesive markets, which have long and difficult approval cycles. While this takes time, successful entry would create a significant, high-barrier-to-entry business for the future.

“Testing in most of these spaces, whether it’s consumer electronics, electronic autos is very rigorous. It goes through a couple of rounds, but each of the round could be 12 months, 12 to 18 months. So this is a rigorous process. We are at it though.”

— Sudhanshu Vats, Managing Director

Steel

Tata Steel Limited | Large Cap | Iron & Steel

Tata Steel is a major global steel producer with significant manufacturing operations in India, the United Kingdom, and the Netherlands. The company is currently focused on scaling its Indian capacity while transitioning its European assets toward sustainable, low-carbon technologies.

[Concall]

High levels of Chinese steel exports are currently pressuring global trade and causing price variations across different regions. Despite these external pressures, the company managed to expand its profit margins significantly over the first three quarters of the fiscal year.

“At the same time, Chinese finished steel exports have crossed 110 million tons for the second time in a row, which had a significant impact on the regional as well as the global trade in steel. Steel prices diverged across the regions during the quarter and amidst this, Tata Steel has delivered a consistent performance with our consolidated EBITDA margin improving by about 300 basis points YoY for the nine months ended 31st December 2025.”

— T. V. Narendran, CEO & MD

The implementation of the new European carbon tax is now directly affecting steel imports by adding significant costs based on carbon emissions. This regulatory change is designed to benefit local producers like Tata Steel by making cheaper, high-emission imports less competitive.

“On January 1st, 2026, CBAM entered its definitive phase with carbon costs being embedded into imports and structurally improving the competitive landscape for the EU producers. The CBAM’s definitive phase requires importers to verify embedded emission intensity. Verification is expected to take time and importers who fail to verify will face carbon costs calculated using the default values by the country of origin.”

— Koushik Chatterjee, ED & CFO

Management anticipates that European steel prices will decouple from lower Asian price levels and trend higher toward US benchmarks. This shift would lead to better profitability for the company’s European operations as trade protections take full effect.

“But, because of these actions, we expect that prices in Europe will move away from Asian prices and move towards the US steel prices. It may not reach the levels of US steel prices but certainly will move closer to that.”

— T. V. Narendran, CEO & MD

The company sees a massive internal opportunity to more than double its steel production capacity in the state of Odisha. A potential new project in Maharashtra would complement this growth by providing better access to markets in western and southern India.

“So, in Odisha, we have the opportunity to go up to 35 million tons as against the current 14 million tons. Maharashtra is in addition to that and gives us optionality on the iron ore and servicing western and southern markets.”

— T. V. Narendran, CEO & MD

Management is firmly committed to building a new electric arc furnace in the UK to replace aging, high-cost technology. Delaying this capital investment would only prolong the current losses and postpone the site’s return to profitability.

“So, the point is that if we were to not progress with the EAF, we are going to delay that transition into a more profitable unit. So, I think there is no upside in delaying the investment.”

— Koushik Chatterjee, ED & CFO

Tata Steel management believes that domestic steel prices reached a five-year cyclical bottom during the recent quarter. This suggests a more favorable pricing environment for investors to look forward to in the coming months.

“I think December quarter prices, particularly the first part of that quarter was probably the lowest in the last five years for flat products, and pretty low for long products as well. So, in some sense, that was the bottom as far as the prices are concerned.”

— T. V. Narendran, CEO & MD

The company is diluting its older, high-cost operations by expanding its newer and more efficient steel plants. This structural shift is narrowing the cost gap between Tata Steel and its most efficient competitors in the Indian market.

“As Tata Steel grows more and more in Kalinganagar, Meramandali, etc., the impact of the legacy costs in Jamshedpur keeps coming down and we are addressing the legacy costs in Jamshedpur. So, because of these actions, the cost disadvantage we may have in some sites vis-à-vis our peers will keep reducing.”

— T. V. Narendran, CEO & MD

The company’s strategy focuses on dominating specific high-value customer segments rather than just overall market volume. This focus on premium market share typically results in better overall price realizations and more stable profits.

“Generally, in Tata Steel, we always look at whether our market share in attractive segments be twice our overall market share. So, if we are a 15-20% market share player, then in the attractive segments, we should be at least 40% or more.”

— T. V. Narendran, CEO & MD

A significant restructuring of the European steel supply is likely as older blast furnaces reach the end of their lives without being replaced. This reduction in traditional capacity could lead to a tighter market and better supply-demand balance over the next several years.

“I don’t think anyone is going to reline a blast furnace in Europe now. So, it’s more of a question of running it as long as you can and then if you have the ability, invest in a new process route.”

— T. V. Narendran, CEO & MD

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

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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.

We’re now on Reddit!

We love engaging with the perspectives of readers like you. So we asked ourselves - why not make a proper free-for-all forum where people can engage with us and each other? And what’s a better, nerdier place to do that than Reddit?

So, do join us on the subreddit, chat all things markets and finance, tell us what you like about our content and where we can improve! Here’s the link — alternatively, you can search r/marketsbyzerodha on Reddit.

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Birla Opus entered the paint market with aggressive pricing and a deep wallet. Three quarters of earnings calls later, here’s what the incumbents have been saying — and doing — as they adjusted.

— — —

When Birla Opus launched in FY25 — backed by Aditya Birla Group’s balance sheet, priced well below the market, and offering extra grammage on top — it was the first serious new entrant the Indian paint industry had seen in decades. The working assumption, among analysts and investors, was that this would force a race to the bottom. Incumbents would match the discounts, margins would compress, and the sector’s premium valuations would need rethinking.

Three quarters of earnings calls have produced a different, messier picture. What follows is what the managements of five listed paint companies said — and, at points, what Birla said about itself — quarter by quarter, as the industry figured out what the entry actually meant.

— — —

Q1 FY26: “The initial euphoria is over”

By Q1 FY26, Birla Opus had been in the market for roughly a year. The first thing incumbents wanted to talk about was what was happening at the dealer counter.

Berger’s Abhijit Roy was the most direct:

“The initial euphoria is over completely. That’s gone. You know that initially, that curiosity, the enthusiasm that was there, something new, something great is happening — that is completely gone.”

— Abhijit Roy, MD & CEO, Berger Paints | Q1 FY26

The reason, he said, was straightforward economics. More Birla dealers meant more competition between them — which meant thinner margins for each.

“Once with the network expansion happening heavily and inter-dealer competition increasing, that margin of profit has reduced considerably. And as a result of that there is a little bit of a loss of interest from the dealers. People might be feeling that some of these dealers might be coming back to the legacy companies with whom they have been dealing in the past, because once they see that there is no great margin, and the movement of the product is nothing great.”

— Abhijit Roy, MD & CEO, Berger Paints | Q1 FY26

Akzo Nobel was seeing something similar and had launched a formal program for it. Rohit Totla, Akzo’s Whole-time Director, described the counter-offensive:

“Wherever we saw an action, we were very quick in talking to our retailers and bringing them back to the fold, what we call a program called ‘Ghar Wapsi’. And that is where within a quarter we were able to bring back. In the last five quarters, this aggressive competition was there but we were able to do better than the market.”

— Rohit Totla, Whole-time Director, Akzo Nobel India | Q1 FY26

Nerolac’s Pravin Chaudhari reported the same:

“In fact, we are seeing the reversal now. Many dealers of ours who started batting with competition has now started coming back to us. I think they are realizing power of Nerolac brand as well as groundwork that our team does as well as consumer and painter activity that we’re doing.”

— Pravin Chaudhari, MD, Kansai Nerolac Paints | Q1 FY26

Birla, for its part, had a different reading of the same quarter. Rakshit Hargave, CEO of Birla Opus, pointed to a starker picture of the industry without his company in it:

“On a QoQ annual basis, the market has grown only at 5%. And if you remove Birla Opus, then the market is actually minus one or zero. So, obviously, Birla Opus has taken a lion’s share of the growth, which has happened on an annual basis.”

— Rakshit Hargave, CEO, Birla Opus (Grasim Industries) | Q1 FY26

But the impact wasn’t uniform. Akzo’s Rajiv Rajgopal mapped the disruption geographically — and the pattern was uneven:

“If I break India into four regions, the impact of the new competition was highest in South, followed by a bit in West, Punjab and North largely, and East has been very minimal.”

— Rajiv Rajgopal, Chairman & MD, Akzo Nobel India | Q1 FY26

Nerolac confirmed. South was the pressure point, particularly for players already weak there:

“South continues to be a problem for us because as such, we are weak there. And given the onslaught of competition and extra focus on South by most of the leading player, there has been the issue for us.”

— Pravin Chaudhari, MD, Kansai Nerolac Paints | Q1 FY26

Asian Paints, the market leader, framed the disruption differently. Amit Syngle argued that Birla’s discounting was pulling in the trade — contractors and dealers — not the end consumer:

“Sometimes it is the intermediary who benefits a little bit more in terms of looking at what extra the person is getting because that might result in a higher margin for the intermediary which could be a contractor, which could be a dealer. So, to some extent it is like a discount... and not too much of a consumer proposition.”

— Amit Syngle, MD & CEO, Asian Paints | Q1 FY26

One thing all five companies agreed on: the disruption was playing out at the bottom of the market, not the top. Berger’s Roy:

“In the luxury, premium segment, brand plays a far bigger role there. It is difficult to change a customer in this particular area. However, at the lower end or at the mid-lower end, it is relatively possible, with the effort of the influencers to change customer preferences.”

— Abhijit Roy, MD & CEO, Berger Paints | Q1 FY26

And then there was Indigo Paints — the niche player that had spent Q1 pushing back on the doomsday narrative:

“The prediction of outsiders was that this will devastate the margins of the paint industry. And we were all collectively saying that, that is not going to happen. Everybody’s gross margin is more or less the same as what it was a year ago or 1.5 years ago.”

— Hemant Jalan, Chairman & MD, Indigo Paints | Q1 FY26

That was Q1. Dealers reportedly drifting back. Regional variation. Premium holding. Margins intact. The tone across boardrooms was cautious but composed.

— — —

Q2 FY26: “Let’s not kid ourselves”

By Q2, the composure started showing cracks. Not because anything dramatic happened — but because growth hadn’t.

“The overall industry would not be growing more than about 3.5 to 4%. Therefore, we were very clear that we need to really shift our gear in terms of how we really galvanize the market, how do we look at playing to our strengths in a very strong manner.”

— Amit Syngle, MD & CEO, Asian Paints | Q2 FY26

Akzo’s Rajgopal dropped the most candid assessment of the quarter:

“There is a fight happening in the market between a market leader and a very strong challenger. Let’s not kid ourselves in saying that it has had impact on the profitability of the industry and also the market shares of all the players, maybe lesser on some of us, more on a few others. But the reality is it has had an impact.”

— Rajiv Rajgopal, Chairman & MD, Akzo Nobel India | Q2 FY26

He also mapped where, specifically, the new entrant had gained ground:

“80% of the growth has come from mass market, economy, putty, textile, construction chemicals. And these are segments where some of the established players found it too difficult to react because it would be hugely dilutive to the margin and the profitability of the business.”

— Rajiv Rajgopal, Chairman & MD, Akzo Nobel India | Q2 FY26

Something else had changed at Akzo between quarters. The Jindal family had taken a controlling stake, and the mandate from new ownership was unambiguous:

“The brief from Mr. Parth Jindal has been very clear to us as a team — let’s get after revenue and get back to high growth and get back to market share gain. So our endeavor starting from September has been to look at where are we significantly premium. And that’s where we’ve been taking some price corrections to make sure we are far more competitive.”

— Rajiv Rajgopal, Chairman & MD, Akzo Nobel India | Q2 FY26

Those corrections were already underway — cumulative price cuts of 1.5-2% across the portfolio.

On the other side, there were signs that Birla’s initial sprint was flattening. Berger’s Roy:

“By stabilization, I mean, the sales figure is not jumping upwards, as was happening in the past few quarters. The numeric reach is not expanding at a very fast clip. It’s improving, but at a normal pace, as would happen for any industry player.”

— Abhijit Roy, MD & CEO, Berger Paints | Q2 FY26

Indigo’s Jalan was blunter:

“New player is now stagnating. They were taking a 5%, 6% market share in the first year. Now they are more of a status quo.”

— Hemant Jalan, Chairman & MD, Indigo Paints | Q2 FY26

Birla’s own filings suggested otherwise. By Q2, all six manufacturing plants were operational — 1,332 million litres of annual capacity. Himanshu Kapania, Birla Opus’ business head:

“This makes Birla Opus the second largest decorative paints company commanding 24% of the industry capacity, a feat unmatched around the globe for speed and cost. Now we focus all our energies to bridge the gap between our volume market share and capacity share.”

— Himanshu Kapania, MD & Business Head, Birla Opus (Grasim Industries) | Q2 FY26

The extra grammage scheme — where Birla offered 10% more paint per can — was also being scaled back:

“For most products, this extra grammage that they were giving, originally in 4-liter, 10-liter and 20-liter cans, I believe that they have discontinued it in the 4-liter and 10-liter cans. And there are rumors in the trade that this extra grammage even in the 20-liter cans may get discontinued before the end of the fiscal.”

— Hemant Jalan, Chairman & MD, Indigo Paints | Q2 FY26

Nerolac, meanwhile, was making a deliberate choice — pulling back from the segments where the fight was fiercest:

“We are reducing our exposure on all the ancillaries and parties, which is actually getting into commodity play and people are using it as more of an entry kind of product. Despite reducing our inputs on these products, there was no major impact as far as the network defection is concerned.”

— Pravin Chaudhari, MD, Kansai Nerolac Paints | Q2 FY26

And Berger flagged an asymmetry that defined the competitive dynamic — in the ad spend war, the new entrant was outspending its position:

“The new entrant, their share of voice is much higher compared to their market share. In our case, we used to be similar to our market share, but now it is slightly below that.”

— Abhijit Roy, MD & CEO, Berger Paints | Q2 FY26

Q2 was where the industry moved from acknowledging the disruption to responding to it. Growth was tepid. The mass market had been conceded to a degree. Price corrections had begun. And Birla’s growth curve was bending.

— — —

Q3 FY26: “It will still take 2-3 quarters”

By Q3, the language across the sector had shifted from “disruption” to something more settled — a recognition that the new competitive landscape was now simply the competitive landscape.

“From a point of view of competitive intensity, it is bound to remain now. We have obviously newer competition; we have also amalgamation of two players which is coming in the market. So, I think we will have the competitive environment continue as we go ahead.”

— Amit Syngle, MD & CEO, Asian Paints | Q3 FY26

Akzo’s Rajgopal, still the most forthcoming voice in the room, laid out the pricing gap in full:

“You are talking of a new entrant which has come at prices which are anywhere up to 12% lower than the prices at which we operate, in addition to additional discounts, and then there was the 3-litre which while you say it’s been called off, it’s still there in a few markets. So, you are talking of a band between 12% and 18% lower pricing which is not a small sort of a negate.”

— Rajiv Rajgopal, Joint MD & CEO, Akzo Nobel India | Q3 FY26

And then a striking admission. Akzo had been benchmarking its own pricing and found it wasn’t just Birla undercutting them — they’d been off-market for a while:

“We looked at our pricing across our premium brands and some of our other offerings versus some of the lead players. And we did see that we were usually overpriced between 5% and 9%, which is what had led to volume erosion. We have addressed some of those.”

— Rajiv Rajgopal, Joint MD & CEO, Akzo Nobel India | Q3 FY26

His timeline was sober:

“I would love to believe that the worst is behind us, but I think the reality is that it will still take 2-3 quarters for it to really play out.”

— Rajiv Rajgopal, Joint MD & CEO, Akzo Nobel India | Q3 FY26

Berger’s Roy offered the clearest picture of market share movement across the industry:

“Market leader has also lost market share. It has gone mostly to Birla. If you take Birla also into one of the categories — given that whatever they say, we assume that this is what they have done — then there is a slight gain in market share for them, and losses for everyone else in the system.”

— Abhijit Roy, MD & CEO, Berger Paints | Q3 FY26

Birla’s own numbers quantified the gain. Kapania claimed revenue market share had expanded by over 300 basis points year-on-year:

“Birla Opus accelerated its market share gain with revenue growth of nearly 3x the Indian decorative paints industry growth rate, inclusive of Birla Opus.”

— Himanshu Kapania, MD & Business Head, Birla Opus (Grasim Industries) | Q3 FY26

He also named the asymmetry at the heart of the spending war:

“The player that you spoke about is much in excess of the market share that they hold, and that’s their entry strategy, which they don’t have to worry about their profitability. We do, and we are very conscious about it.”

— Abhijit Roy, MD & CEO, Berger Paints | Q3 FY26

One area where the incumbents remained secure: the premium end had held.

“In premium, I don’t think that the order is really reversed. While people have tried — one of the faster growing newer emerging players, when they got into the project business, they started getting consumer complaints and we started getting some of those businesses back.”

— Rajiv Rajgopal, Joint MD & CEO, Akzo Nobel India | Q3 FY26

Birla had started nudging prices upward — two increases totaling 2-2.5%. But starting from 5% below market, the incumbents were unmoved.

“The price change about Birla Opus is not very significant. 2%, 3%, I don’t think is going to really change much as far as industry is concerned. As such, Opus was lower by 5%.”

— Pravin Chaudhari, MD, Kansai Nerolac Paints | Q3 FY26

Though in some segments, the gap was genuinely narrowing:

“They were at 5% discount in DPL itself. Now, they have taken price increase — two price increases totaling 2 to 2.5% approximately. Some of them are now almost matched in the luxury category.”

— Abhijit Roy, MD & CEO, Berger Paints | Q3 FY26

Birla’s explanation for the increases was matter-of-fact:

“We always want to maintain a particular distance from the market leaders, and we felt the distance was slightly more than what was necessary and we are bridging that gap. That is the objective of price increase and there is no other objective.”

— Himanshu Kapania, MD & Business Head, Birla Opus (Grasim Industries) | Q3 FY26

Indigo’s Jalan, who had spent three quarters arguing the disruption was overstated, delivered his closing assessment:

“Time has borne itself out that we were right. Nobody’s profitability has been impacted. Yes, a new entrant may have taken some market share at a significant cost to itself — that is their business.”

— Hemant Jalan, Chairman & MD, Indigo Paints | Q3 FY26

He also hinted at Indigo’s own next move — using the highest gross margins in the industry as ammunition:

“Why should we not think of going even more aggressively on trade discounts and maybe sacrifice a percentage point from our gross margin — we’ll still be the highest. But if sales can grow disproportionately higher, then our EBITDA margins will not be impacted.”

— Hemant Jalan, Chairman & MD, Indigo Paints | Q3 FY26

Meanwhile, the elevated competitive intensity hadn’t eased:

“Ending Q3, we have not seen any change in the intensity on all the fronts — whether it is influencer, whether it is dealer discounting, or investment in the manpower.”

— Pravin Chaudhari, MD, Kansai Nerolac Paints | Q3 FY26

— — —

— — —

Over three quarters, the conversation in Indian paint boardrooms moved from cautious first reactions to active recalibration to a quieter acknowledgment: this is how the industry works now. The extra grammage is being wound down. Birla’s growth has flattened. But the spending hasn’t come down, and the pricing gaps remain wide in the segments that matter most.

What to watch

• Birla’s price trajectory. Two increases so far, totaling 2-2.5%. They’re still meaningfully below market in most segments. Whether that gap keeps narrowing will shape the next phase.

• Akzo under Jindal ownership. The most visible recalibration underway — price corrections, a revenue-first mandate, market-by-market repricing. The results start showing in Q4.

• Mass and economy margins across FY27. This is the segment Birla’s entry actually reshaped. Whether incumbents can compete here without eroding their margin profile is the open question.

• The dealer homecoming. Three companies have reported dealers returning. The painting season will test whether that’s a structural shift or a seasonal blip.

• The next entrant. Asian Paints flagged the JSW-Nippon amalgamation. Another variable entering an already crowded field.

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

Share

Quotes in this newsletter were curated by Kashish.

Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes & narratives 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.

We’re now on Reddit!

We love engaging with the perspectives of readers like you. So we asked ourselves - why not make a proper free-for-all forum where people can engage with us and each other? And what’s a better, nerdier place to do that than Reddit?

So, do join us on the subreddit, chat all things markets and finance, tell us what you like about our content and where we can improve! Here’s the link — alternatively, you can search r/marketsbyzerodha on Reddit.

See you there!

Welcome to the 53nd 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.

Subscribe now

In this edition, we have covered 10 companies across 6 industries

Chemicals

• EPL

• SRF Limited

• Cipla

Auto Ancillary

• VST Tillers Tractors

• Endurance Technologies

Consumer Durables

• Blue Star Limited

• Havells India

FMCG

• Pajson Agro India

Cement

• Ambuja Cements

Energy

• Gujarat Gas Limited

Chemicals

EPL | Small Cap | Chemicals

EPL Limited, formerly Essel Propack Limited, is a global company specializing in manufacturing laminated plastic tubes for FMCG and Pharma sectors. They produce packaging materials like collapsible tubes and laminates for Beauty & Cosmetics, Health & Pharmaceuticals, Food, Home, and Oral care products, along with offering packaging solutions and ancillary services

[Transcript]

EPL’s strategic vision involves expanding into new emerging markets, diversifying its product formats, and becoming a global innovation partner.

“Our vision is to become a leader in consumer packaging for the emerging markets. This means we would enter new emerging markets in Southeast Asia and Africa, evolve from a single-format supplier to a multi-format player, and become an innovation partner for both large and emerging brands globally.”

— Mr. Bakshi, Executive

EPL is merging with Indovida to form a $1 billion revenue packaging leader focused on emerging markets, expanding its product portfolio and global reach.

“Today I am excited to share that we have taken a foundational step towards our vision by entering into definitive agreements for the merger of EPL and Indovida to create a consumer packaging leader focused on emerging markets. This merger will create a $1 billion revenue packaging powerhouse with an expanded product portfolio and capabilities, wider global presence across emerging markets, and stronger financial metrics.”

— Mr. Bakshi, Executive

The merger will create substantial synergies, doubling combined revenue and EBITDA, establishing a diversified multi-format packaging leader with 75% of revenue from high-growth emerging markets.

“Together, we are creating a diversified multi-format packaging platform that doubles our combined revenue to 8,300 crores and EBITDA to approximately 1,750 crores. The combined platform will be an emerging markets leader with 75% of revenue coming from emerging markets in Asia, Africa, and Latin America, which are growth-oriented in nature.”

— Mr. Bakshi, Executive

The valuation of EPL at a significant premium to Indovida makes the share-swap merger highly accretive for EPL shareholders.

“EPL was valued at 339 per share, a 70% premium to Friday’s closing price. EPL’s transaction multiple represents a 55% premium relative to Indovida. The attractive relative valuation makes the merger hugely accretive to EPL shareholders.”

— Mr. Bakshi, Executive

Indorama Ventures will become the new promoter with 51.8% ownership, while Blackstone will retain 16.6% and continue as a promoter post-merger.

“Post-merger, IVL will hold 51.8% of the merged company and will be the promoter of EPL. Blackstone has been an integral part of EPL’s journey; post-merger, Blackstone will hold 16.6% of the merged company and will remain a promoter.”

— Mr. Bakshi, Executive

The merger will enable reciprocal market access, allowing EPL to enter markets like Vietnam leveraging Indovida’s presence, and Indovida to enter India, China, and Latin America leveraging EPL’s.

“Now, the same opportunity will become more accessible to us in markets where Indovida exists today, for example, Vietnam in Southeast Asia, which is a big growing market... For Indovida, there are markets where EPL is present, like India, China, and Latin America, and they can enter these markets by leveraging our presence here.”

— Management, Executive

The company prioritizes securing supply and maintaining margins by passing raw material cost increases to customers, expecting no significant disruption despite inflation.

“Our first priority is to secure supply; our customers are keen that we avoid any supply dislocation. Second, while raw material costs are rising, our model is clear: cost inflation is passed through to our customers... We do not see a big disruption in either supply or margins.”

— Management, Executive

SRF Limited | Large Cap | Chemicals

SRF Limited is a diversified industrial conglomerate and a global leader in the manufacturing of fluorochemicals, specialty chemicals, and technical textiles. The company also operates a significant packaging film business providing solutions for the food and industrial sectors.

[Concall]

Internal business improvements are currently being overshadowed by aggressive price competition from Chinese manufacturers. Investors should monitor how long these pricing pressures last as they are limiting the immediate financial benefits of the company’s upgrades.

“In our Specialty Chemicals business, we have significantly enhanced our product mix and achieved notable improvements in operational efficiencies... However, these advancements have not fully reflected in this quarter’s financial performance due to persistent pricing pressure from customers, driven largely by irrational pricing from Chinese competitors.”

— Ashish Bharat Ram, Chairman and Managing Director

SRF anticipates that the current irrational pricing from Chinese competitors in Specialty Chemicals is unsustainable and expects a market correction, though the timing is uncertain.

“From our discussions with stakeholders, it is evident that Chinese players are finding it difficult to sustain these price levels, and we believe that this situation is not viable in the long run. When this correction will happen, remains difficult to predict at this stage.”

— Ashish Bharat Ram, Chairman and Managing Director

Despite ongoing deferments in agrochemical orders, SRF is confident about ending the fiscal year strongly due to a strong product pipeline and early signs of revival in crop protection demand.

“We are also witnessing continued deferment in offtake for certain key products by agro majors. Encouragingly, agrochemicals used in crop protection are now showing signs of revival. This, along with a strong pipeline for the coming quarter, gives us the confidence to finish the year on a strong note.”

— Ashish Bharat Ram, Chairman and Managing Director

The company is investing in new capacity to expand its presence in the pharmaceutical intermediates market. This capital expenditure demonstrates management’s commitment to diversifying the business beyond agricultural chemicals.

“We are adding a second pharma intermediate plant at an investment of INR 180 crore to come up at our Dahej site, which is expected to be commissioned in the next 8 months.”

— Ashish Bharat Ram, Chairman and Managing Director

The cooling gas business is seeing high prices due to supply limits in China and strong global demand. This provides a significant boost to profitability during months that are usually slow for the industry.

“The refrigerant gas segment performed exceptionally well despite this being a traditionally lean season, supported by firm global HFC prices, driven by China’s quota-led supply restrictions and steady international demand.”

— Ashish Bharat Ram, Chairman and Managing Director

The industry is shifting toward more environmentally friendly refrigerant gases due to global regulations. Companies that can build efficient plants for these new products will likely gain a major competitive advantage.

“The transition to new generation gases is inevitable... those who will be able to develop the technology and put up plants which are capex efficient and opex efficient, will have the opportunity to really benefit.”

— Ashish Bharat Ram, Chairman and Managing Director

Prices for a key packaging film product have started to rise as Chinese competitors reduce their excess supply. This price increase should help improve the profit margins of the company’s packaging division soon.

“In recent weeks, we have also seen some price improvement in BOPET from China, which should bode well for us in the coming months.”

— Ashish Bharat Ram, Chairman and Managing Director

Unanticipated rupee depreciation negatively affected SRF’s currency hedges, a trend expected to persist for several quarters, though a weak rupee is generally beneficial for the company.

“However, our forward positions on rupee-dollar hedges have had a negative impact due to the unprecedented rupee depreciation, something we could not anticipate. While we expect the negative impact from forward covers to stay for a few more quarters, in general, a weak rupee will be extremely favorable for us.”

— Ashish Bharat Ram, Chairman and Managing Director

The company is intentionally expanding into pharmaceuticals to reduce its dependence on the volatile agricultural market. This strategy aims to create more stable and predictable earnings for shareholders over time.

“We have always maintained that we will continue to grow agro, but we also want to derisk from agro... And that’s really why we are building on the pharma story.”

— Ashish Bharat Ram, Chairman and Managing Director

Future production limits for certain gases will be based on how much a company produces over the next few years. This makes current production levels critical for securing the right to manufacture and sell these products in the future.

“It is the baseline production of 2024, 2025, 2026, that is going to give you the quotas going forward... India will not go back on any commitment on the global platform.”

— Ashish Bharat Ram, Chairman and Managing Director

There is currently an oversupply of R32 refrigerant gas in India, forcing manufacturers to rely on export markets. Investors should watch how this domestic overcapacity affects pricing if global demand slows down.

“Our analysis says that the domestic demand for R32 is probably in the range of 17,000 - 18,000 tonnes... Capacity is substantially more than that, and that’s why everybody is exporting as well.”

— Ashish Bharat Ram, Chairman and Managing Director

Management aims to double the revenue contribution from the pharmaceutical sector within the specialty chemicals division. Achieving this target would diversify the company’s income and likely improve overall valuation.

“The pharma business is, maybe in the region of close to 10% of our total specialty chemicals business; and we’ve always said that we want this to go to atleast 20%.”

— Ashish Bharat Ram, Chairman and Managing Director

Cipla Limited | Large Cap | Pharmaceuticals

Cipla Limited is a leading global pharmaceutical company with a dominant position in the Indian respiratory, anti-diabetes, and cardiology segments. The company specializes in complex generics and has a robust presence across North America, South Africa, and emerging markets.

[Concall]

The company is introducing innovative delivery mechanisms like inhaled insulin to differentiate its diabetes offerings. These unique products help the company maintain premium pricing and patient loyalty.

“We further strengthened our diabetes portfolio with the launch of Afrezza, India’s first and only inhaled rapid-acting insulin, marking a significant milestone in transforming insulin therapy.”

— Achin Gupta, MD & Global CEO Designate

The US business is transitioning away from its heavy reliance on the drug Lenalidomide. Investors should look for new product approvals to stabilize and eventually grow US revenue streams.

“In North America, we delivered quarterly revenue of $167 million, which included a small contribution from Lenalidomide. We expect upcoming launches to help cushion the decline in Lena revenues and provide long-term growth.”

— Achin Gupta, MD & Global CEO Designate

Cipla has a heavy launch schedule for complex respiratory and peptide products over the next fiscal year. These high-value launches are critical to the company’s strategy of replacing maturing generic revenue.

“By this time, our pipeline includes four significant respiratory launches, including generic Advair. During the quarter, we will be launching generic Victoza, and we further expect to launch three more peptide assets in FY’27.”

— Achin Gupta, MD & Global CEO Designate

Management is very confident that major respiratory product approvals are imminent within the next six months. Success here would act as a major catalyst for restoring earnings growth in the US market.

“From 0 to 6 months, we are calling for... two big respiratory launches, and one smaller launch... there is a fair amount of belief that... the launches are more likely than not to happen soon.”

— Umang Vohra, MD & Global CEO

The company expects its new products to fully replace lost generic revenue while offering high profitability. Because these assets are developed in-house, Cipla will not have to share profits with external partners.

“Collective our new launches will make up for the generic side revenue drop... important to note is that our respiratory assets are all in-house. So, they will come at a very good gross margin.”

— Ashish Adukia, Global CFO

New Indian manufacturing quality regulations are likely to hurt smaller competitors but benefit large players like Cipla. This regulatory shift could lead to market consolidation and higher market share for established companies.

“As far as Schedule M is concerned... It is more of an impact for smaller players who will need to ramp up... From CIPLA perspective, we do not have much or any impact because we are already at or better than the standards.”

— Achin Gupta, MD & Global CEO Designate

Auto Ancillary

VST Tillers Tractors | Small Cap | Auto Ancillary

VST Tillers Tractors Limited was established in the year 1967 by the VST Group of companies, a well-known century old business house in South India. The company is pioneers in manufacturing of power tillers, tractors, engines, transmission, power reaper and precision components over five decades.

[Interview]

March performance was normal despite a high base last year; overall demand remained strong in Q4 with solid growth across segments.

“It has been a good year for us. The March performance has been normal. I would say the previous March was high due to pent-up demand caused by various reasons. So, compared to that, this March was quite good. Overall, demand was quite strong in Q4, and that is reflected in our numbers.”

— Antony Cherukara, CEO

Strong growth across key segments, with power tillers and weeders leading, while tractors also saw steady domestic growth.

“Power tiller sales grew upwards of 35% for the full year. Volumes in the power weeder space grew upwards of 52%. Domestic tractor sales grew by almost 19%.”

— Antony Cherukara, CEO

International business saw pressure in Q3 but recovered partially in Q4, ending with marginal decline.

“We did see a drop of almost 20% by the end of Q3 in the international business, but we were able to recover a significant portion in Q4. We ended with single-digit degrowth in international business, but given the circumstances, it has been quite good.”

— Antony Cherukara, CEO

Near-term outlook remains uncertain due to geopolitical risks and monsoon concerns, making guidance difficult.

“The coming year is a bit tricky at this point. There are several factors at play. There is the war, and the supply situation is becoming a bit critical. If this continues, we could face supply issues… Then there is the monsoon, which is predicted to be weaker this year… giving a specific number or percentage right now is extremely difficult.”

— Antony Cherukara, CEO

EV tillers and weeders seen as a major opportunity driven by lower total cost of ownership for farmers.

“We believe that with EV tillers and EV weeders, the total cost of ownership will reduce significantly for farmers, which should drive adoption.”

— Antony Cherukara, CEO

EV segment is still a new category, and growth visibility will improve over the next few quarters.

“This is a new category we are creating, and it’s difficult to give a specific growth number at this stage. Over the next couple of quarters, we will get better clarity on how fast this can scale.”

— Antony Cherukara, CEO

Mechanisation among small and marginal farmers is accelerating, supported by strong growth in existing products.

“Mechanisation in the small and marginal farmer segment is growing rapidly… this is evident from our weeder growth of 52% and tiller growth of 35%.”

— Antony Cherukara, CEO

Company targets ₹3,000 crore revenue by FY30, driven by sustained high growth.

“We intend to reach ₹3,000 crore by FY30… to achieve this, we need to grow at about 24–26% CAGR over the next 4–5 years.”

— Antony Cherukara, CEO

Monsoon even slightly below normal could still support mechanisation demand due to healthy reservoir levels.

“If the monsoon is normal or even slightly below normal… it should still be supportive, given that reservoir levels are relatively healthy.”

— Antony Cherukara, CEO

₹3,000 crore target is achievable through organic growth; inorganic opportunities remain optional upside.

“The ₹3,000 crore target is achievable through organic growth alone at 24–25% CAGR. Any inorganic growth would be additional.”

— Antony Cherukara, CEO

Company continues to evaluate inorganic opportunities but without a defined timeline.

“We are continuously exploring inorganic opportunities… however, it is difficult to assign a timeline to them.”

— Antony Cherukara, CEO

No immediate plans to monetise Whitefield land, though it remains a future value-unlocking opportunity.

“There is no update at this point… it is a potential opportunity to unlock value, but it will be done at the right time.”

— Antony Cherukara, CEO

Endurance Technologies | Mid Cap | Auto Ancillary

Endurance Technologies manufactures and sells aluminium die casting products, including alloy wheels, suspension, transmission, and braking systems. The company operates in India and exports its products internationally, catering to both domestic and global markets.

[Interview]

Geopolitical disruptions have created supply chain challenges, but the company has managed to maintain production through operational agility and contingency planning.

“Yes, this is a difficult situation right now. The difficulty is in ensuring that we run our production lines and get access to materials, fuel, gases… what was really put to test was the agility of our entire team handling the supply chain and the ability of our vendor base to support us… in terms of whether our production has been affected — as of now, no.”

— RS Rajagopal Sastry, Group CFO

Enterprise risk management and contingency planning helped mitigate disruptions, including switching to alternate fuels.

“We have put in place all the plans under our enterprise risk management approach where such disruptions are already documented… we have also ensured alternate fuels for our smelters and other areas requiring gas.”

— RS Rajagopal Sastry, Group CFO

Input costs, especially aluminium and gases, have risen sharply, though the company views this as a temporary phase.

“There has been a significant increase both in the spot prices of gases and also in aluminium… we are treating this as a temporary blip so that we do not damage long-term relationships with customers.”

— RS Rajagopal Sastry, Group CFO

Strong pass-through mechanisms are in place, with customer agreements allowing recovery of commodity cost increases.

“We do have arrangements where commodity increases will be passed on to customers… some on a quarterly lag, some on a real-time basis.”

— RS Rajagopal Sastry, Group CFO

Aluminium exposure is significant, making cost movements critical, but recovery mechanisms remain intact.

“Almost 54% of our material has some amount of aluminium in it… however, we have arrangements to pass it on to the customers.”

— RS Rajagopal Sastry, Group CFO

Gas supply challenges are being actively managed through fuel substitution and operational adjustments.

“Regarding gases… we are moving to liquid fuels, changing burners… it’s a lot of agility and team strength which is coming into play.”

— RS Rajagopal Sastry, Group CFO

Aluminium price spike has been sharp (~20–25%), but the company expects full compensation from customers.

“Significant increase in spot prices… close to 20–25% is what we are witnessing… we have the arrangement that we get compensated 100% of the increases.”

— RS Rajagopal Sastry, Group CFO

Margins may compress in percentage terms due to pass-through structure, but remain protected in absolute terms.

“Margins in percentage terms will get affected… but on a rupee-to-rupee basis we will still get all that which we are spending.”

— RS Rajagopal Sastry, Group CFO

Revenue outlook remains strong, supported by sustained demand in the two-wheeler segment.

“Revenue is very strong… demand as far as two-wheeler production has been very strong and is continuing to be so.”

— RS Rajagopal Sastry, Group CFO

Premiumisation trend is emerging in two-wheelers, supporting higher value realisations.

“There is a premiumisation which we are seeing… customers are opting for higher-value products.”

— RS Rajagopal Sastry, Group CFO

Consumer Durables

Blue Star Limited | Mid Cap | Consumer Durables

Blue Star is a leading Indian company offering a wide range of air conditioning and commercial refrigeration products. It also provides air purifiers, water purifiers, air coolers, cold storages, and specialty solutions. Their AC and refrigeration products cater to both residential and commercial segments.

[Interview]

FY26 was a challenging year impacted by weak summer demand, GST disruptions, and supply chain issues, though revenue impact remained limited while profitability was under pressure.

“A very bad and challenging year is coming to an end… it started with a very weak summer season and GST-related disruptions, followed by trade war-related supply chain issues… the room air conditioner revenue shortfall compared to the previous year would have been only around 5%, but profitability remains a question mark.”

— B Thiagarajan, Managing Director

Management is more concerned about demand-side risks and pricing power rather than supply constraints.

“I am not so much worried about LPG supplies… I am more concerned about market sentiment and the extent to which price hikes can be passed on.”

— B Thiagarajan, Managing Director

Price hikes of ~13% are being implemented, driven by regulatory changes and input cost inflation.

“The price hike is around 13% — about 5% due to energy label changes and around 8% due to input cost increases.”

— B Thiagarajan, Managing Director

Dealer inventory built at old prices is delaying full price pass-through and impacting primary sales.

“Inventory built at old prices is still in the system… from February onwards, billing had to reflect the increase, but since old inventory was still in the market, there was resistance.”

— B Thiagarajan, Managing Director

Summer demand has been weak so far, and a strong season requires significantly higher growth.

“For it to be a truly good summer season, growth needs to be around 25–30%… but so far, that is not happening.”

— B Thiagarajan, Managing Director

Worst-case scenario assumes at least 15% volume growth, highlighting downside expectations.

“At least 15% growth over last year — that would be the worst case.”

— B Thiagarajan, Managing Director

Maintaining margins depends on successful price pass-through despite demand uncertainties.

“I need to pass on price increases to maintain margins of around 8–8.5%.”

— B Thiagarajan, Managing Director

Production and supply are not key risks; demand recovery and temperature trends are critical.

“Production disruptions are not the issue… the key issue is that temperatures need to rise and consumer sentiment should not deteriorate.”

— B Thiagarajan, Managing Director

Future risks include further raw material inflation and rising consumer financing costs.

“Plastics, intermediaries, and steel could push prices further… around 40% of consumers buy through finance, so if interest rates go up, that becomes an additional burden.”

— B Thiagarajan, Managing Director

Base case outlook suggests 20–25% revenue growth for FY27, contingent on normalization.

“The base case… would be around 20–25% revenue growth… if the conflict ends, full-year growth could also be around 20–25%.”

— B Thiagarajan, Managing Director

Summer remains a critical contributor to annual performance.

“Summer accounts for around 40% of annual sales.”

— B Thiagarajan, Managing Director

B2B segment, especially data centres, provides partial insulation against weak consumer demand.

“The B2B segment… can offset roughly 50% of room air conditioner profits in a weak summer… data centre demand is helping sustain growth momentum.”

— B Thiagarajan, Managing Director

Alternative processes are being deployed to mitigate LPG dependency, with minimal cost impact.

“Alternatives like DG sets for powder coating and oxy-acetylene for brazing are being implemented… it does not materially increase costs.”

— B Thiagarajan, Managing Director

Management reiterates that sentiment-driven demand risks outweigh supply-side disruptions.

“I am not worried about supply chain disruptions — I am more concerned about market sentiment and consumer demand.”

— B Thiagarajan, Managing Director

Havells India Limited | Large Cap | Consumer Electricals

Havells India is a leading Fast Moving Electrical Goods (FMEG) company with a diverse portfolio ranging from industrial cables to consumer appliances. The company operates prominent brands like Havells, Lloyd, and Crabtree, maintaining a robust pan-India distribution network.

[Concall]

Management notes that the previous oversupply of air conditioners and fans in the market is finally clearing up. This sets the stage for a potential recovery in sales for the Lloyd brand as the summer season approaches.

“As regards to the cooling products, we saw a challenging environment in the last couple of quarters. However, now the channel inventory is normalizing.”

— Anil Rai Gupta, Chairman and Managing Director

Havells is expanding its range to cover almost every electrical and electronic need for modern homes. A broader product list gives them more power when negotiating with distributors and makes their marketing more efficient.

“We are becoming a complete product portfolio in terms of electrical and electronics is concerned... this will give us more leverage at the channel as well as utilizing the brand fully.”

— Anil Rai Gupta, Chairman and Managing Director

The company has strong pricing power in its wires and cables segment, allowing it to pass on changes in copper and aluminum prices to customers. This stability helps protect the segment’s profit margins despite volatile raw material markets.

“For cables and wires business, at least, I think there is far more predictability in terms of passing on price increases or price reductions.”

— Anil Rai Gupta, Chairman and Managing Director

Lloyd products are expected to see significant price increases due to new energy ratings and rising production costs. While this helps margins, investors should monitor if higher prices reduce consumer demand during the peak season.

“Overall, there could be a 5% to 10% increase [in prices] this quarter [for Lloyd].”

— Anil Rai Gupta, Chairman and Managing Director

Cables growth was boosted by public infrastructure spending and distributors stocking up on inventory. Investors should be aware that some of this growth might slow down as channel inventory levels even out.

“Cables has been higher because of the government infrastructure spends... last quarter, it’s primarily some sort of channel stock build-up, which has happened.”

— Anil Rai Gupta, Chairman and Managing Director

The company is moving its investment focus from building factories to research and development. High capital expenditure suggests a long-term commitment to product innovation rather than just manufacturing capacity.

“Lloyd pretty much is done in this present year. But there will be a higher capex spend for the new R&D center... overall, it should be in the range of another INR 1,000 crores in the coming year.”

— Anil Rai Gupta, Chairman and Managing Director

Marketing budgets are flexible and directed toward products with the best growth potential, while the primary focus remains on profit margins. This disciplined spending approach aims to balance brand growth with bottom-line health.

“A&P spend is not something very specific to any product category... we will continue to focus on margin improvement. And even with these cost increases, I think there are opportunities of cost rationalization as well.”

— Rajiv Goel, Executive Director

The solar business is currently the fastest-growing part of Havells’ emerging segments. Management expects this business to become a significant contributor to both total sales and overall company profits.

“In the ‘other’ solar is moving much faster than the other product categories... we have a very positive outlook for solar in the coming times, both in terms of revenue growth as well as margin expansion.”

— Anil Rai Gupta, Chairman and Managing Director

By investing in Goldi Solar, Havells has secured its supply chain for solar panels without having to build its own factory. This move allows them to offer complete renewable energy solutions to customers more reliably.

“The strategic investment in Goldi was to assure that we have a strategic supply of modules available... there is a larger ecosystem play which Havells can do.”

— Rajiv Goel, Executive Director

Smaller regional brands have recently gained some market share from national players due to cost advantages. Management remains confident that long-term population trends will eventually favor premium, established brands like Havells.

“Post-COVID... unorganized and regional competition also starts gaining some ground... I don’t think India demographics are such where we will continue to see tepid demand.”

— Anil Rai Gupta, Chairman and Managing Director

FMCG

Pajson Agro India | Micro Cap | FMCG

Pajson Agro India Ltd. processes raw cashew nuts into kernels and dry-fruit products under the “Royal Mewa” brand. It sources nuts from India and Africa, operates a modern plant in Visakhapatnam, and supplies to domestic and export markets.

[Transcript]

African cashew crop quantity is sufficient, but early indications suggest slightly poorer quality compared to last year.

“For the upcoming season, if we talk about quantity, we see that the crop is sufficient. The quantity is there across all countries. If we compare the quality this year to last year, the overall quality of the crop seems to be a little poor, but it is still very early to say.”

— Ayush Jain, Promoter, Chairman, and Managing Director

The company anticipates strong demand for the new plant’s output, despite lacking pre-planned off-take agreements, due to existing customer shortages and high repeat business.

“We do not have pre-planned agreements because customers are always looking for delivery timelines. Until production starts, we cannot give those timelines. However, we are always short of product. More than 80% of our revenue comes from repeat customers. We are currently unable to serve many new customers, and our institutional clients are demanding more quantities.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Pajson Agro’s top institutional clients include major packers like VRO, Farmley, and Happilo, with significant wholesale presence in key northern Indian states.

“It is a mix of both wholesale and institutional customers. The institutional customers are some of the largest packers in the country, namely VRO, Farmley, and Happilo. Our top wholesale customers are predominantly based in Delhi, Uttar Pradesh, and Rajasthan.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Large customers prefer Pajson Agro due to the specialized skills, experience, and complex supply chain management required for efficient cashew processing, which is difficult for multi-product companies to manage in-house.

“Cashew processing is highly skilled and experience-backed. Establishing a raw material supply chain and managing the technical aspects of processing is difficult. Since these companies deal with multiple products, focusing only on a cashew plant would be tough for them.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Middle East disturbances have not disrupted Pajson Agro’s West Africa-India supply chain, though increased fuel prices have resulted in slightly higher freight costs.

“It is unfortunate that the Middle East is going through these disturbances, but our supply chain comes from West Africa to India. There is no direct impact on the shipping routes we take. The supply chain has not been disrupted. However, because fuel prices have gone up, there is a slight increase in freight prices.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Rupee depreciation is largely passed on to customers through higher finished kernel prices, mitigating long-term P&L impact.

“Rupee depreciation is mostly passed on to customers. The prices for finished kernels increase accordingly. In the short term, say one to two months, it might impact the balance sheet, but we make provisions for that beforehand. In the long term, currency impacts are definitely passed on to the customers.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Technology upgrades and improved SOPs have enhanced cashew processing yields, reduced waste, improved quality, and ultimately increased both revenue and profit margins.

“The main factor is technology. Cashew processing has evolved, and high-capex technology now improves the yields of cashew wholes. It reduces broken percentages, contamination, and improves the color of the kernels. Enhancing our technology and Standard Operating Procedures (SOPs) has helped us increase both revenue and margins.”

— Ayush Jain, Promoter, Chairman, and Managing Director

A minimum capacity of 15,000 metric tons is essential for efficient cashew processing, with larger scales offering an additional 2-3% margin advantage over smaller operations.

“A plant would need at least 15,000 metric tons to match our production efficiency. A 1,000-ton plant might only make 1% margin or even lose money; they are effectively cottage industries. Moving from 18,000 tons to 50,000-55,000 tons can provide an additional 2-3% margin difference.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Pajson Agro aims to significantly increase the B2C segment’s contribution to 15% of its total revenue within the next three financial years.

“Currently it is very small, but our target for the next three financial years is to reach 15% of total revenue.”

— Ayush Jain, Promoter, Chairman, and Managing Director

The company anticipates 30-40% revenue growth in FY27, primarily due to the new plant commencing production in late FY27, with a baseline growth of 10-15% from existing operations.

“Moving forward in FY27, as the new plant comes into production in November or December, we look at growth of 30-40% for the year. Even if we encounter any unforeseen circumstances, we are looking at 10-15% growth from the current plant in terms of revenue.”

— Ayush Jain, Promoter, Chairman, and Managing Director

Cement

Ambuja Cements Limited | Large Cap | Cement

Ambuja Cements is a leading Indian cement manufacturer and a key part of the Adani Group’s industrial portfolio. The company is currently integrating several major acquisitions, including ACC and Orient Cement, to create a massive unified building materials platform.

[Concall]

The company is expanding its market presence much faster than the rest of the cement sector. This rapid growth suggests they are successfully capturing a larger portion of national cement demand.

“This has been our decisive and strategically important quarter for Ambuja Cements. We delivered industry-leading performance, growing our volumes at 2x the industry average.”

— Vinod Bahety, Chief Executive Officer

Management is combining multiple cement brands into a single operational entity to improve efficiency and scale. For investors, this merger is expected to boost profit margins and simplify the corporate structure.

“The proposed amalgamation of ACC and Orient Cement with Ambuja Cements... marks the beginning of a unified One Cement Platform that will accelerate our growth trajectory.”

— Vinod Bahety, Chief Executive Officer

Cement prices are rising across key regions, helping to reverse previous periods of price volatility. Sustained price hikes directly translate into better revenue and earnings for the company.

“Southern markets are leading increases in the range of INR 15 to INR 20 for non-trade, while the Northern market has witnessed price increase in the range of INR 5 to INR 10.”

— Vinod Bahety, Chief Executive Officer

The company is shifting its focus toward retail ‘trade’ customers who typically pay higher prices than large industrial buyers. Increasing this share should improve the company’s average selling price and profit margins.

“Current share of trade is 65% and non-trade is 35%. Down the line, it will be moving towards 70%-30%.”

— Vinod Bahety, Chief Executive Officer

The company aims to shift its sales mix to 70-30 (trade-non-trade) and eventually 75-25, leveraging brand equity to regain trade market leadership and improve realizations.

“Our focus will be to regain the leadership position of Adani Cement on the trade side on back of the strong brand equity, what we have. So therefore, forward-looking, I can say 70%-30%... and gradually down the line, 75%-25%... So that will definitely help me to improve my realization.”

— Vinod Bahety, Chief Executive Officer

The company identifies immediate opportunities to save significant money on power and fuel expenses. These efficiency gains are expected to flow directly into higher earnings per ton of cement produced.

“INR 100 to INR 125 a ton, I see improvement possible quickly on the power. On the fuel, almost INR 150 reduction is what we would like to peg ourselves.”

— Vinod Bahety, Chief Executive Officer

The company is expanding its footprint into new geographic areas like Assam to tap into regional demand growth. Diversifying plant locations helps reduce transport costs and provides access to new customer bases.

“Assam, Mundra are -- let us say, Mundra is still a brownfield... Assam is greenfield... which will be up and running in February.”

— Vinod Bahety, Chief Executive Officer

Cement pricing strengthened in January with significant increases in Southern and Northern non-trade markets, indicating a more stable pricing environment compared to previous years.

“Pricing has entered January on firmer ground as we are seeing a similar uptick in price in January, along with double-digit volume growth... Importantly, these hikes have helped making a departure from the rollback-prone patterns of the previous years.”

— Vinod Bahety, Chief Executive Officer

The company plans an annual capital expenditure of approximately INR 10,000 crores, with INR 8,000 crores allocated for growth and INR 2,000 crores for efficiency improvements.

“for the growth part, say, ballpark, INR 8,000-odd crores and for the efficiencies and all, another, say, INR 2,000-odd crores... ballpark, yes, INR 10,000-odd crores, you can consider... This is like I’m saying yearly capex.”

— Vinod Bahety, Chief Executive Officer

Energy

Gujarat Gas Limited | Large Cap | Utilities - Gas Distribution

Gujarat Gas Limited is India’s largest city gas distribution entity, operating across 27 geographical areas in six states and one union territory. The company manages a vast network of over 44,500 kilometers of pipelines serving millions of domestic, industrial, and commercial customers.

[Concall]

Management expects the corporate restructuring and merger process to be finalized by April 2026. This timeline provides clarity for shareholders regarding the upcoming allotment of shares in the merged entity.

“There were certain queries from MCA which we have addressed and we are expecting that final hearing of the matter should come up somewhere in middle of February. That takes us to completion of the scheme by end of April, including allotment of shares to GGL and GTL shareholders.”

— Sandeep Dave, Company Secretary and Head of Corporate Communications

Industrial demand in the Morbi cluster suffered because propane was significantly cheaper than natural gas. This pricing disadvantage explains the volume contraction seen in the company’s industrial segment.

“As anticipated, the propane prices remained considerably lower than the GGL’s natural gas prices due to which Morbi volumes were lower during the quarter.”

— Dipen Chauhan, Head of Industrial Marketing and Business Development

The CNG segment is seeing strong growth, particularly in new markets outside the home state of Gujarat. This geographical diversification helps insulate the company from regional industrial volatility.

“CNG sales rose by 11% year-over-year, with Gujarat recording a 9% increase and areas outside Gujarat delivering a notable 22% growth, underscoring GGL’s success in deepening its presence across geographies.”

— Dipen Chauhan, Head of Industrial Marketing and Business Development

Low-cost domestic gas allocation from the government continues to decline, forcing the company to buy more expensive market gas. This trend puts pressure on the company’s ability to maintain low prices for the transport sector.

“On the sourcing side, APM gas allocation shortfall has increased from 45% to 51% of our total requirement. Shortfall in CNG is currently 64% and the same is being met through spot as well as long-term contracts that we have.”

— Devendra Agarwal, Executive Director - Commercial

Gujarat Gas plans to offer propane as an alternative fuel solution to retain industrial customers and market share, leveraging GSPC’s identified storage locations and securing unloading capacity.

“To counter this challenge, our parent company, GSPC, has identified locations for storage and handling of propane. We are currently in advanced talks to reserve unloading capacity, ensuring that we have access to physical infrastructure, to basically capitalize on this opportunity. To manage competition, we’ll be actively offering propane as an alternate fuel solution, ensuring that we retain our customers, maintain customer relationship and market share in the industrial belt of Morbi and other industrial locations.”

— Devendra Agarwal, Executive Director – Commercial

The global LNG market is expected to experience a significant supply glut and downward pressure on spot prices over the next 2-3 years due to new liquefaction capacities, which bodes well for India’s long-term demand.

“On the LNG market side, the LNG market over the next 2- 3 years is projected to experience a significant supply glut driven by massive wave of liquefaction capacities coming in, particularly, from the U.S. and Qatar. And this surplus is expected to put downward pressure on spot prices in Europe and Asia, although the long-term demand growth remains intact, especially in emerging economies like China and India.”

— Devendra Agarwal, Executive Director – Commercial

New long-term gas supply contracts are scheduled to begin deliveries by the middle of 2026. This will reduce the company’s reliance on volatile spot market prices and stabilize sourcing costs.

“And then going forward in middle of 2026, we expect a lot of term contracts to start get delivering volumes into India.”

— Management, Corporate Leadership

The company plans to significantly expand its fuel retail footprint to over 1,000 stations within a few years. This aggressive infrastructure buildup is intended to capture the rising demand for vehicle gas.

“I think I won’t be surprised if we’ll enter into 4-digit number in coming 2 to 3 years, that is we may cross 1,000 CNG stations.”

— Management, Corporate Leadership

Legal proceedings regarding third-party access to the company’s gas networks are ongoing but currently stalled in court. The continued legal protection prevents immediate competitive disruption to their distribution monopoly.

“In fact, they have concluded the hearing on open access guideline, final hearing, since May 2025. Thereafter, they have reserved the order... So once they conclude hearing and then only they will give a final verdict on this.”

— Management, Corporate Leadership

Management aims to secure up to 70% of their gas supply through long-term contracts to hedge against price spikes. Achieving this target would provide more predictable margins for the company over the long run.

“The objective is to have a stable price, less reliance on spot and maybe on an overall basis, have 60% to 70% volumes tied up on a long term basis.”

— Management, Corporate Leadership

The company plans to use its existing credit relationships and financial deposits to beat out propane competitors. Offering credit terms that other commodity suppliers cannot match is a key competitive advantage in the industrial sector.

“They already have a security arrangement in place. So if they buy propane from any other supplier, they will have to pay in advance, whereas in case of Gujarat Gas, since we already have the financial securities, we’ll give them some credit.”

— Management, Corporate Leadership

Gujarat Gas aims to increase its long-term gas sourcing from the current 39% to 60-70% to achieve stable pricing and reduce reliance on volatile spot markets.

“So basically, right now, our share of long-term gas is 39%, which obviously we want to increase it to a much higher level. So our parent company has signed a few contracts. The volumes of that will start getting delivered this year onwards partially. So I think the objective is to have a stable price, less reliance on spot and maybe on an overall basis, have 60% to 70% volumes tied up on a long term basis.”

— Devendra Agarwal, Executive Director – Commercial

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Quotes in this newsletter were curated by Meher & 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.

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In this edition, we have covered 11 companies across 9 industries.

InvIT

• Energy Infrastructure Trust

Logistics

• Swan Defence and Heavy Industries

Engineering & Capital Goods

• Railtel Corporation Of India

• Vikram Solar

Chemicals

• EPL Ltd

Software Services

• Ceinsys Tech Ltd

• Sagility Ltd

Building Materials

• Berger Paints India Ltd

Diversified

• 3M India Ltd

FMCG

• Varun Beverages Ltd

Healthcare

• Aurobindo Pharma Ltd

InvIT

Energy Infrastructure Trust | Micro Cap | Financial Services

Energy Infrastructure Trust is an India‑based Infrastructure Investment Trust (InvIT) owning and operating a 1,485 km natural gas pipeline and related infrastructure; it transports gas across key consumption hubs, offers imbalance services, and provides stable investor distributions through energy asset income.

[Presentation]

India’s natural gas share in the energy mix is expected to rise meaningfully, driven by strong growth in city gas distribution and industrial demand. This will increasingly be supported by LNG imports and expanding pipeline infrastructure.

The pipeline is a critical link connecting KG Basin gas to key demand centers, with volume growth driven by rising domestic production and LNG integration. Strong downside protection through long-term contracts and a stable dividend track record adds to its investment appeal.

The asset plays a key role in transporting gas from the KG Basin, which holds a significant share of India’s reserves and is seeing rising production. Volumes have grown steadily, supported by increased domestic output and LNG contribution across sectors.

The 1,485 km pipeline connects India’s east and west coasts, enabling efficient gas transmission across regions. Backed by long-term agreements with Reliance and regulated tariffs, the asset offers stable and predictable cash flows.

Logistics

Swan Defence and Heavy Industries | Small Cap | Logistics

Swan Defence and Heavy Industries is currently engaged in the business activity viz. designing and manufacturing of ships primarily for defence sector, commercial shipbuilding, refits, repairs, etc. The Company is having integrated shipbuilding facilities (Shipyard), which is the largest engineering infrastructure in India and also one of the largest in the world.

[Presentation]

Swan Group is a diversified infrastructure conglomerate with strong growth momentum (~116% revenue CAGR), operating across textiles, real estate, energy, technology, and shipbuilding. Its multi-sector presence and scale position it well to capitalize on India’s infrastructure and industrial growth.

India’s ship repair market is expected to grow to ~$1.7 bn by 2033, driven by defence needs, commercial fleets, and regional demand. Both domestic and international opportunities create strong long-term visibility for ship repair players.

Offshore wind and energy fabrication present a large upcoming opportunity, with strong growth in foundations and tower markets. Strategic coastal locations and proximity to projects enhance execution advantages.

Government-led PSU demand (~$20 bn over the next decade) provides strong order visibility, driven by oil, steel, and logistics requirements. Mandatory domestic sourcing further strengthens the opportunity for Indian shipyards.

India’s naval expansion (47 to 85 vessels by FY30) creates a large, multi-year order pipeline across submarines, frigates, and support vessels. This positions defence shipbuilding as a key long-term growth driver.

Defence production and capex are set for strong growth, with increasing allocation toward naval modernization. Rising fleet size and sustained budget support provide long-duration visibility for shipbuilders.

Policy support through subsidies, incentives, and long-term maritime visions (2030, 2047) aims to position India among top global shipbuilding nations. Large investments and job creation plans strengthen the ecosystem.

India’s commercial shipbuilding and repair markets are expected to grow at strong double-digit CAGRs (~25%+), supported by policy push and cost advantages. Increasing localization can significantly reduce forex outflows.

Global shipbuilding is dominated by China, Korea, and Japan, with India holding <1% share despite handling ~95% of trade via sea. This highlights a massive opportunity for India to scale its shipbuilding capabilities.

Engineering & Capital Goods

Railtel Corporation Of India | Small Cap | Engineering & Capital Goods

Railtel Corporation Of India Limited is a major neutral telecom infrastructure provider in India. It offers high-capacity DWDM technology and MPLS network to meet critical communication needs of Indian Railways and other clients. The company also manages data centers in Gurugram, Haryana and Secunderabad, Telangana for hosting essential applications.

[Presentation]

RailTel has a strong orderbook of ₹10,166 Cr, largely driven by government clients, with state governments and Indian Railways forming the bulk. This provides high revenue visibility and stability given the public-sector focus.

RailTel is expanding into data centres, AI-led railway safety (KAVACH), and global projects, diversifying beyond core telecom. These initiatives open new growth avenues while strengthening its digital and international presence.

RailTel plays a critical role across telecom, ICT, and signalling for Indian Railways, including Wi-Fi, surveillance, and KAVACH deployment. Its deep integration into railway operations creates strong entry barriers and recurring demand.

The company offers a diversified portfolio spanning telecom, cloud/data centres, and turnkey projects like smart cities and signalling. This broad capability positions RailTel as a full-stack digital infrastructure player.

Vikram Solar | Small Cap | Engineering & Capital Goods

Vikram Solar and its subsidiaries specialize in manufacturing and selling solar photovoltaic modules and systems. Their product portfolio includes a variety of monocrystalline silicon-based modules such as PERC modules, N-Type modules, and HJT modules, available in bifacial or monofacial configurations.

[Presentation]

India’s battery storage market is large (~321 GWh by FY35) and strongly policy-backed through PLI, VGF, and storage mandates. Low current penetration and rising EV + renewable demand create a significant long-term opportunity.