The Chatter: Asian Paints, NMDC, IndiGo, Glenmark & More
Q4FY26 | Edition #62
Welcome to the 62nd 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 14 companies across 10 industries.
Building Materials
Asian Paints
Metals
NMDC Limited
Aviation
Interglobe Aviation Limited
Dreamfolks Services Ltd
Healthcare
Glenmark Pharmaceuticals
Wockhardt
Retail
Bata India Ltd
Engineering & Capital Goods
Cummins India
Siemens
Titagarh Rail Systems Limited
Software Services
Happiest Minds Technologies
FMCG
Tilaknagar Industries Limited
Media & Entertainment
Signpost India Limited
Software Services
Meta Infotech Limited
Building Materials
Asian Paints | Large Cap | Building Materials
Asian Paints is a company that manufactures and distributes a wide range of paints for decorative and industrial use. They are present in various segments including Interior Wall Finishes, Exterior Wall Finishes, Enamels, and Wood Finishes. They also offer products related to home decor, bath fittings, kitchen, and wardrobe, along with providing services like waterproofing, wall coverings, and adhesives.
[Concall]
One of the most important outlook comments from the call. Despite a tougher pricing environment and elevated competition, management remains confident of sustaining healthy volume growth.
“We expect at least some part of this demand to sustain in the market. And we have been seeing some early shoots in the months of April and May.”
“Going forward, we are still looking at least a high single-digit volume growth in terms of what we would kind of achieve.”
“We are still confident that demand conditions should continue giving us closer to high single-digit volume growth in the band of about 8-10%.”
— Amit Syngle, Managing Director & CEO
Management revealed that raw material inflation and currency depreciation have created much higher cost pressures than what has been passed on through pricing.
“We feel that the impact is much higher, maybe closer to about 20% or so. We have passed on around 11%.”
“We are looking at further price increases, which might happen in the market, as we go ahead.”
“At the same time, we do not intend to look at passing out the entire impact so that we can maintain a balance between inflation in the market and what we can really absorb.”
— Amit Syngle, Managing Director & CEO
This is perhaps the clearest commentary on the current competitive environment. Management indicated that discounting continues aggressively across the market.
“Despite the inflationary environment that we are seeing and despite the price increases that we have taken, we have not seen any let-up in terms of the discounting in the market.”
“The discounting intensity stays whether it is retailers, whether it is contractors, whether it is other stakeholders.”
“When I mentioned competitive intensity, I meant about the whole area of discounting, which, according to us, will continue.”
— Amit Syngle, Managing Director & CEO
Asian Paints highlighted the strategic significance of its VAM-VAE project, which should strengthen innovation capabilities and reduce dependence on imports.
“Today, worldwide, there are very limited players who are making VAM-VAE, and for us, it is a signature project.”
“We expect to commission first phase in the first half of this year.”
“The VAM-VAE project will bring to us very strong innovation capabilities in the market and really change the fabric of the market from the area of looking at green paints in a strong manner.”
— Amit Syngle, Managing Director & CEO
Management sees infrastructure spending, manufacturing investments and government capex driving stronger growth in industrial coatings.
“Industrial coatings will continue to grow much higher than decorative, given the investment happening in the infrastructure and Government spending that is happening in this area.”
— Amit Syngle, Managing Director & CEO
The company highlighted strong traction from builders, factories and government-led infrastructure projects.
“This has been stellar in terms of how it has been able to do.”
“This has now become a very strong growth vehicle, from the point of view of a builder segment, the factory segment and the government segment.”
— Amit Syngle, Managing Director & CEO
Management indicated that demand recovery is broad-based but rural markets are currently growing faster.
“We got good growth both in rural and urban centers across.”
“Rural was a little bit ahead of urban growth of what we could really get in.”
— Amit Syngle, Managing Director & CEO
Premium and luxury categories continue to gain traction despite a challenging macro environment.
“The premiumization strategy has been working very well.”
“It improved the mix, and the PreLux categories have moved quite well improving the mix.”
— Amit Syngle, Managing Director & CEO
The company remains cautious on raw materials and geopolitical developments heading into FY27.
“We have seen obviously very high volatile macro conditions in the market.”
“The geopolitical situation is very dicey.”
“We have already seen a very high inflation in the market and that is something which is to be watched out day in day out.”
— Amit Syngle, Managing Director & CEO
Management is not expecting competition to ease despite industry-wide price hikes and inflationary pressures. In fact, it expects a more crowded market going forward.
“The competitive intensity in the market is going to be strong, and we feel that it is something that will continue.”
“We have the consolidated players now who have been trying to align and come out with a unified strategy. We also have newer competition in the market, and the existing players are also equally intense in the market.”
“We feel that the competitive intensity will continue to grow in terms of how we see the year ahead.”
— Amit Syngle, Managing Director & CEO
Despite concerns around inflation and geopolitical uncertainty, management is seeing healthy secondary demand in the early part of FY27.
“We have been seeing some early shoots in the months of April and May.”
“We expect at least some part of this demand to sustain in the market.”
— Amit Syngle, Managing Director & CEO
Asian Paints is increasingly targeting airports, ports, tunnels and large infrastructure assets.
“We have moved very strongly into parallel spaces where we looked at large builders, large factories, large hospitality areas and also the whole area of the government.”
“Today every airport, every port, every tunnel which we are approaching and looking at participating in the growth story.”
“We think this is a very high-growth segment.”
— Amit Syngle, Managing Director & CEO
Despite challenges in the home décor segment, management remains committed to building a broader home-improvement platform.
“We have been struggling a little bit in this area over a period of time, and this is one strong zone which we are not leaving so easily.”
“We are today the number one integrated home player.”
— Amit Syngle, Managing Director & CEO
Metals
NMDC Limited | Large Cap | Mining - Iron Ore
NMDC Limited is India’s largest iron ore producer and a Navratna public sector enterprise under the Ministry of Steel. The company operates highly mechanized iron ore mines and is currently diversifying into coal production and critical minerals to reach a 100 million tonne capacity target.
[Concall]
The company is aggressively accelerating its spending to build the infrastructure needed for its massive capacity expansion. This surge in capital expenditure confirms management’s commitment to reaching their 100 million tonne goal.
“The capex this year has been around INR3,300 crores, which is an all-time high capex because if you leave out the land acquisition this time, and we hope that this year we’ll be able to substantially increase our capex, almost double the capex now because all our expansion plans right now are on the ground.”
— Amitava Mukherjee, Chairman and Managing Director
The successful opening of the new Deposit 4 mine marks a critical milestone in adding fresh production capacity. Investors should watch for the July commencement as a catalyst for volume growth in the current fiscal year.
“Deposit 4, as you know, we have already opened and we are now installing the infrastructure. We hope to have commercial mining commencing on July, that’s in Q2. And this year, I think the guidance would be around 1 million ton out of Deposit 4.”
— Amitava Mukherjee, Chairman and Managing Director
NMDC is introducing a new strategy to sell ‘branded’ iron ore with highly consistent specifications. This product differentiation could allow the company to charge premium prices and improve profit margins.
“NMDC would be the first company in 3 years’ time will be selling branded iron ore and board has already sanctioned an investment proposal for INR3,000 crores approximately for making a blending yard at Vizag where we will be making this blended iron ore of a consistent quality which India has never seen.”
— Amitava Mukherjee, Chairman and Managing Director
Improvements in railway infrastructure are set to significantly boost the amount of ore NMDC can transport to its customers. Resolving these logistics bottlenecks is essential for the company to convert its increased production into actual sales.
“Once it is done and now also you see we are doing on an average more than 20 rakes and on peak around 23, 24, 25, 26 rakes. The capacity of course will increase to around 40 million ton immediately once it is done from the present 28 to 30.”
— Amitava Mukherjee, Chairman and Managing Director
Management is actively looking to purchase mineral assets in foreign countries to diversify their portfolio. This move into global markets represents a new phase of growth and potential risk for the company’s capital allocation.
“But I think overall the capex on acquisition, the back of the envelope calculation is wherever we stand today as of today, we should be spending INR2,000 crores to INR3,000 crores on acquisition of assets abroad this year.”
— Amitava Mukherjee, Chairman and Managing Director
The company has started the new fiscal year with strong momentum, showing 15% growth in production during the first two months. This early outperformance gives investors confidence that the full-year target of 60 million tonnes is achievable.
“So we have already touched almost 10 million tons in the first two months as against 8. something, 8.2 or something last year. This month itself I think we’ve already declared to the stock exchange I guess, so I can say this today’s first, we have done 5.3 million ton against what we did 4.4-million-ton last year.”
— Amitava Mukherjee, Chairman and Managing Director
NMDC’s ore possesses a unique chemical advantage that makes it essential for steelmakers, even those who own their own mines. This high product quality ensures that the company will face strong, consistent demand regardless of competition.
“Our phosphorus content is 0.05. No one else in India has that. So you will always need my ore as a blend even if you have full capacity.”
— Amitava Mukherjee, Chairman and Managing Director
Aviation
Interglobe Aviation Limited | Large Cap | Airlines
Interglobe Aviation operates IndiGo, India’s largest passenger airline with a dominant market share in the domestic aviation sector. The company is currently expanding its international footprint using a mix of low-cost and hybrid service models.
[Concall]
Large currency losses and one-time operational costs led to a net loss for the full year. Investors should note that without these non-cash and one-time items, the underlying business remained profitable.
“The primary driver of the loss was the significant impact of foreign exchange movement where the rupee has depreciated by more than 11% against the US dollar in just 12 months, one of the steepest declines in many years. Additionally, we reported exceptional items in Q3 and Q4 on account of costs of the December disruption and the new labor contract.”
— Gaurav Negi, Chief Financial Officer
The number of planes grounded due to engine issues is finally expected to decrease by the end of the calendar year. This improvement will allow the airline to put more of its existing fleet back into service.
“On the AOG situation, our Pratt & Whitney related groundings are currently in the 40s and are expected to trend downwards by the end of the year to the 30s. At this point, we do not have further guidance from the OEMs beyond this point.”
— Gaurav Negi, Chief Financial Officer
Management is using its cash reserves to buy aircraft outright and pay off debt through a specialized entity in GIFT City. Owning more aircraft instead of leasing them reduces long-term costs and strengthens the company’s balance sheet.
“During the year, we have announced a capital investment of $820 million in the GIFT City entity to be deployed primarily towards acquisition of aviation assets, and we have prepaid loans of 19 aircraft. With this, we now have 36 aircraft as unencumbered assets in our book, aggregating more than 95 billion rupees of book value.”
— Gaurav Negi, Chief Financial Officer
The airline is prioritizing the removal of expensive, temporary leased planes from its fleet to improve profit margins. Replacing these with more fuel-efficient, company-owned aircraft will help lower operating expenses.
“Our immediate attempt is to first phase out the damp leases because those tend to be more expensive both in terms of the cost, because there is an inherent markup, plus some of them are not the latest technology and consequently consume more fuel. That’s the first space that we are addressing.”
— Gaurav Negi, Chief Financial Officer
Management is successfully raising ticket prices to offset higher fuel and currency costs without seeing a drop in passenger numbers. This suggests that travel demand in India remains very strong despite higher costs for consumers.
“For the moment, as we take the fares up, the market appears inelastic to these hikes in fares. We will deal with this on a daily basis and see where we go.”
— Rahul Bhatia, Managing Director
IndiGo maintains a significant cash reserve to protect the business against the high volatility typical of the aviation industry. Any cash beyond this safety net is being redirected toward buying aircraft and engines.
“That said, I mentioned in my opening statement that it’s always prudent to keep at least 20-25% of your overall top line as a safety net. That’s been our stated strategy; we are sitting on around 20,000 crores to 25,000 crores of cash as a safety net.”
— Gaurav Negi, Chief Financial Officer
The company is tripling its currency hedging target to protect itself from future fluctuations in the US dollar. This move aims to prevent the massive foreign exchange losses that impacted this year’s earnings.
“We intend to hedge up to $3 billion. A large part is going to be $1 billion toward the short-term cash flow hedges for the 12-month period, and the remaining $2 billion will be spread over a 2 to 5-year period.”
— Gaurav Negi, Chief Financial Officer
International flights that were disrupted by geopolitical tensions are now mostly back in service. Full restoration of these routes by June will allow the company to capture high demand during the upcoming peak travel season.
“Approximately two-thirds of those 160 flights are now operating and we intend to scale back to full capacity by the end of June, which rolls into a peak period for the Middle East in Q2. That is how things have shaped up.”
— Gaurav Negi, Chief Financial Officer
IndiGo is evolving from a pure low-cost carrier into a hybrid model that includes long-haul international flights. The incoming CEO’s experience with similar transitions at other global airlines will be critical for this shift.
“Now, we are adding some mutation to it with the XLRs, and possibly the A350s in the future, and that will be a hybrid model. This is something Willie Walsh is well experienced with; he did that at Aer Lingus.”
— Rahul Bhatia, Managing Director
Dreamfolks Services Ltd. | Small Cap | Travel Support Services
Dreamfolks Services is India’s largest airport services aggregator platform, providing access to an global network of lounges, spas, and travel-related services. The company acts as a technology-led bridge between global card networks, banks, and service providers to manage travel and lifestyle benefits.
[Concall]
The credit card industry in India is shifting away from unlimited lounge access toward spending-based rewards and diverse lifestyle perks. Dreamfolks is adjusting its service catalog to match these new bank requirements for personalized customer benefits.
“This year witnessed significant structural changes across the credit card ecosystem in India. First, a broad transition from unlimited lounge access models to spend-based access frameworks. Second, a meaningful transformation in how banks are redesigning their customer value proposition, moving beyond cluttered domestic airport lounges to more personalized, lifestyle-oriented benefit programs.”
— Liberatha Kallat, Chairperson and Managing Director
The company is evolving from a simple lounge aggregator into a comprehensive lifestyle and travel platform. By offering a wider variety of services like spa treatments and hotel upgrades, the company aims to become a more integrated partner for banks.
“Today, we are not just enabling lounge access; we are powering end-to-end customer engagement for our partners through a diversified, technology-led ecosystem spanning travel, lifestyle, wellness, and curated experiences. A defining highlight of this transformation has been the significant expansion of our lifestyle services portfolio, such as spa at leading wellness centers, access to members-only social clubs, room upgrades at star hotels, airport transfers, beauty at star hotels, and coffee at top brands in malls.”
— Liberatha Kallat, Chairperson and Managing Director
The acquisition of 10-11 Hospitality allows Dreamfolks to own and operate its own railway lounges directly. This move is expected to improve profit margins and provide better control over the customer experience in the railway sector.
“First, we acquired 10-11 Hospitality in November 2025. This acquisition provides direct ownership and operational control over premium railway lounge infrastructure, enhancing service quality, improving unit economics, and reducing reliance on third-party operators.”
— Liberatha Kallat, Chairperson and Managing Director
The company’s international expansion is showing significant momentum with triple-digit volume growth in global lounge usage. Reaching over 1,000 global touchpoints suggests the company is successfully scaling outside its core Indian market.
“Transaction volumes from our global lounge program have exhibited a strong growth of 140% year-on-year, validating the strength of our international strategy and the quality of our platform. Moreover, our global lounge network now covers over 1,000 airport touchpoints.”
— Liberatha Kallat, Chairperson and Managing Director
Dreamfolks is launching a direct-to-consumer membership program to diversify its revenue beyond business partners. This new platform targets travelers directly with a broad suite of lifestyle benefits beyond just airport services.
“An important chapter of the year has been our entry into the D2C segment through Dreamfolks Club 2.0, our enhanced membership platform. This offering has evolved from an airport-centric proposition into a comprehensive travel and lifestyle membership encompassing global lounges, access to members-only clubs, golf, wellness, dining, and other curated experiences.”
— Liberatha Kallat, Chairperson and Managing Director
Management is focusing on increasing business with current clients rather than just searching for new ones. By selling more services to existing partners, the company hopes to grow revenue more efficiently without high acquisition costs.
“One of our key priorities this year has been to deepen engagement with our existing banking and card network partners rather than simply pursuing new client acquisition. We believe that the strength of our existing relationships represents a significant untapped potential.”
— Liberatha Kallat, Chairperson and Managing Director
Profitability is currently under pressure as the company transitions away from its heavy reliance on the domestic Indian lounge market. Management remains optimistic that new services and global expansion will eventually lead to higher growth than before.
“While near-term profitability has been affected by the structural transition in our domestic business, which used to contribute more than 90%, we believe with the rapid adoption of new-age lifestyle services and deeper integration in the global and railway lounge business segment, we should be able to grow bigger than ever. Despite these headwinds, our balance sheet remains strong and resilient.”
— Liberatha Kallat, Chairperson and Managing Director
The company is making progress in securing international clients in key markets like the Middle East and Southeast Asia. Management expects to announce new contract wins soon, supporting their rapid global volume growth.
“To answer your question, I may not be able to specifically tell you who the clients are, but we do have many clients; otherwise, this 140% growth would not have come. The Middle East and Southeast Asia definitely remain our focus. You will soon hear from us when we sign the contracts as to what kind of clients we have added in this entire year.”
— Liberatha Kallat, Chairperson and Managing Director
High receivable balances at the end of the year were a point of concern for investors. Management clarified that they have successfully collected a significant portion of these debts after the quarter ended, improving cash flow.
“On December 31, there were some dues receivable from debtors. However, post March 31, we have done significant collection and that number has reduced to a large extent.”
— Shekhar Sood, Chief Financial Officer
Dreamfolks maintains an aggressive revenue target for its railway business over the next five years. To reach this goal, they plan to expand to at least 50 lounges as Indian railway stations undergo modernization.
“Yes, our plan of 500 crores in 5 years remains clear and intact, and we are growing significantly in railways. We should have not less than 50 lounges to really bring that scale and multiplying factor. We currently have 100% lounge cover as far as railway lounges are concerned in India.”
— Liberatha Kallat, Chairperson and Managing Director
The current fiscal year is viewed as a period of adjustment as the domestic industry changes and global networks are built. Investors should expect a return to break-even profitability in about a year as these new investments mature.
“FY27 is a transition time for us. We are working through a complete industry change in the India market. Globally, we are still onboarding more lounges to create a tier-one network. Yes, it is a transition moment in FY27, but we should start seeing the break-even maybe a year later.”
— Sandeep Sonawane, Chief Business Officer
Healthcare
Glenmark Pharmaceuticals | Mid Cap | Pharmaceuticals
Glenmark Pharmaceuticals is a research-led global pharmaceutical company with a growing focus on branded and speciality therapies. Following the landmark AbbVie licensing deal, management is accelerating its transition toward innovation-led growth, targeting a larger branded portfolio, expanding global brands like Ryaltris, and maintaining healthy margins across key markets.
The Glenmark 3.0 plan explicitly targets a higher percentage of branded revenue to reduce reliance on commodity generics. This transition is intended to improve the long-term predictability and quality of the company’s earnings profile.
“The branded business is central to Glenmark 3.0 strategy. Today branded portfolio is 60% of our revenue and we are well in place to take it, in the next four years, to 70%.”
— Anurag Mantri, Executive Director & Global CFO, Glenmark Pharmaceuticals
The licensing deal with AbbVie represents a major external validation of the company’s internal drug discovery efforts. This shift toward high-value innovation could lead to higher valuation multiples and more licensing income in the future.
“The defining moment for Glenmark was that AbbVie out-licensing deal on ISB 2001. That transaction validated our innovation platform. We are moving forward on a validated innovation platform.”
— Anurag Mantri, Executive Director & Global CFO, Glenmark Pharmaceuticals
Ryaltris is the centrepiece of the company’s global respiratory franchise and a key driver of high-margin branded sales. Scaling this single product to $200 million would provide a substantial and predictable revenue stream for years to come.
“Ryaltris continues to be a strong brand for us across the markets. More than 50 countries we have launched and that will continue to be a, if you see, $200 million we are targeting plus.”
— Anurag Mantri, Executive Director & Global CFO, Glenmark Pharmaceuticals
Setting a margin target above 21% indicates management’s confidence in operational efficiency and a better product mix. This guidance provides a clear set of KPIs for investors to monitor as the company executes its growth strategy.
“From here we will get to ₹17,000 to ₹18,000 crore of revenues in FY27 and the margin guidance is around 21% to 22%.”
— Anurag Mantri, Executive Director & Global CFO, Glenmark Pharmaceuticals
Wockhardt | Small Cap | Pharmaceuticals
Wockhardt is a research-driven pharmaceutical company focused on innovative therapies, vaccines, and biotechnology products. Following regulatory approvals for its novel antibiotic Zenic, management is preparing for a major transformation from a traditional pharma business into a global innovation-led organization with ambitions far beyond a single product launch.
Management is projecting a massive revenue target for Zaynich that is several times larger than the company’s current total sales. If achieved, this would fundamentally change the company’s valuation and scale.
“I know my peak is 1.5 to 2 billion for the life of the product.”
— Dr. Habil Khorakiwala, Founder & Chairman, Wockhardt Limited
The company is moving away from being a standard manufacturer of cheap medicines to a high-value research firm. Investors need to evaluate the company based on its intellectual property rather than just its manufacturing capacity.
“We are fundamentally getting into a transformation or metamorphosis inside. It will be a very different organization 5 years from today.”
— Dr. Habil Khorakiwala, Founder & Chairman, Wockhardt Limited
Because many large drug companies have stopped making new antibiotics, Wockhardt faces very little competition in this specific medical field. This lack of competition gives the company a unique advantage in a critical area of healthcare.
“Similarly, if large pharmaceutical companies worldwide don’t have the research molecule of their own, where is their business? So there is a white space we see worldwide.”
— Dr. Habil Khorakiwala, Founder & Chairman, Wockhardt Limited
The high profit margins of new patented drugs are expected to outweigh the costs of hiring more people and doing more research. This suggests that the company’s overall profitability will grow even as it spends more money on growth.
“It will improve despite the investments, despite the change, etc. From wherever it is, at least 10% higher, three years and four years.”
— Dr. Habil Khorakiwala, Founder & Chairman, Wockhardt Limited
Retail
Bata India Ltd. | Mid Cap | Footwear
Bata India is a leading footwear retailer with a vast distribution network spanning company-owned stores, franchises, and multi-brand outlets. The company is currently focused on premiumization, inventory optimization through data-driven merchandising, and expanding its digital presence.
[Concall]
Management is scaling a data-driven inventory management system to cover the majority of their stores by the end of the quarter. This initiative is already delivering better sales performance compared to stores not yet using the system.
“Our plan is to take it [Zero-Based Merchandising] to almost 75-80% of the network by this quarter-end. It did show delta growth, which is the measure we use, and was mid-single digits better than the rest of the network.”
— Gunjan Shah, Managing Director and CEO
Bata is using its physical stores as hubs to ship online orders, which helps sell through existing inventory more efficiently. While this improves turnover, it requires the company to speed up its supply chain to keep store shelves stocked.
“Within the last 4 months since December, we have had 700-plus stores fulfilling online orders, thereby leveraging the same inventory for a better sales turnover. What that does is put pressure on ensuring we can replenish stores much faster.”
— Gunjan Shah, Managing Director and CEO
Bata has significantly cut down its inventory levels over the last two years to improve efficiency. Surprisingly, they have managed to keep more popular sizes and styles in stock even while holding less total inventory.
“Inventory continues to reduce. It is now 28% down over 2 years consecutively year-on-year and 13% down over last year. This is despite the fact that availability has gone up by almost 1,000 basis points.”
— Gunjan Shah, Managing Director and CEO
The company is shutting down older manufacturing units to lower its long-term operating costs. This strategy has already resulted in a 10% reduction in employee expenses this quarter, which should provide a permanent boost to margins.
“Historically, we have been trying to improve the structural cost by closing plant operations. From a quarterly perspective, our employee cost is lower by about 10%, and this benefit is flowing to the employee cost line item on a structural basis.”
— Amit Agarwal, Director of Finance and CFO
The company plans a massive expansion of its franchise network, aiming to add nearly 300 new stores in the coming year. This asset-light model allows the brand to grow faster without spending as much of its own capital.
“We are expanding through the franchise route, which has now crossed 700 stores. Our goal in the next 12 months is to get very close to 1,000 stores. We are also expanding through SIS [shop-in-shop].”
— Gunjan Shah, Managing Director and CEO
Bata is developing a new strategy to attract younger shoppers by focusing heavily on trendy sneakers. This project is a key priority to ensure the brand remains relevant as consumer tastes shift toward casual footwear.
“The single largest piece specifically regarding younger consumers is our proposition from a sneakers perspective. That work is currently in progress. We are working on how to bring that to life for consumers and the kind of product portfolio we need, as there is a big overlap between younger consumers and the sneaker world.”
— Gunjan Shah, Managing Director and CEO
Engineering & Capital Goods
Cummins India | Large Cap | Engineering & Capital Goods
Cummins India operates through four business units: Engine, Power Systems, Components, and Distribution. It manufactures, trades, and sells engines for commercial vehicles and industrial equipment, ranging from 60 HP. The company also provides generator sets and related technologies for various on-highway and off-highway applications.
[Concall]
This was one of the most important disclosures on the call. Cummins highlighted that data centers have become a major contributor to its domestic power generation business, reflecting the rapid build-out of digital infrastructure in India.
“The data center business contribution, so for the full year, the data center business would have contributed between 30% to 35% of our overall power generation domestic revenue, and for the quarter, approximately 35%.”
— Shveta Arya, Managing Director
Management indicated that demand visibility has improved significantly over the last six months, particularly from colocation players.
“Inquiry pipeline right now after October last year has picked up in industry. Both Hyperscalers, more than that, Colo players. So the inquiry velocity definitely increased quite a lot since October last year, and we continue to see that.”
— Shveta Arya, Managing Director
While Cummins guided for moderate growth, management clarified that the caution is driven more by macro uncertainties and supply constraints than by weak demand.
“From a domestic demand perspective, for now, we still see robust demand. We are watching what’s happening largely to the economy and everybody else in the country. Commodity prices are increasing, inflation is likely to hit.”
“That is why that brings us a little bit of caution despite the fact that our demand, inquiries and order book are robust today.”
— Shveta Arya, Managing Director
Management highlighted labour shortages, commodity inflation and geopolitical disruptions as key operational challenges.
“We have been taking quite a few supply constraints and not just us, the industry has been facing quite a few supply constraints.”
“We are all facing labor shortage issues at our supplier and commodity pricing has hit our suppliers, fuel cost increments have hit on suppliers.”
— Shveta Arya, Managing Director
After a weak period in mining and mixed performance in industrial segments, management is seeing a recovery in key sectors.
“Railway has performed very well and we continue to see robust demand on the railway side. That is the segment where we have a good order book and it continues to be so.”
“In the last 6 months, mining has picked up, and so our order book has started building up.”
— Shveta Arya, Managing Director
Management pushed back against concerns that increasing competition in imported large-engine categories could pressure margins.
“It is not just about the cost and the pricing of these engines and gensets.”
“It is the whole value proposition that we provide to the customers.”
“We continue to see our customers valuing that.”
— Shveta Arya, Managing Director
Cummins Inc. is investing heavily in global data-center engine capacity, which should support future demand.
“Your first hypothesis that this will crunch in both timelines for us is correct because we are adding capacity as our parent has mentioned, and this largely goes towards engines that go into data center market.”
— Shveta Arya, Managing Director
Management confirmed that demand is currently outpacing industry capacity additions.
“The lead times have increased because we need to appreciate that the data center demand through the world at this point in time is very high.”
“So, the lead times have in the last few years increased.”
— Shveta Arya, Managing Director
The company believes existing investments and productivity improvements can support growth.
“For now, no major capital expenditure plan.”
“The continuous capital that we have been investing in the last 5 years, we will continue to invest that.”
— Shveta Arya, Managing Director
While current revenue contribution is small, management sees BESS becoming part of future backup power solutions.
“Over the longer-term period, we do remain very positive on the outlook of battery energy storage systems.”
“We see it becoming part of the overall backup power solution for our customers.”
— Shveta Arya, Managing Director
Management sees substantial upside if India’s data-center buildout accelerates to levels seen in global markets.
“The pockets of opportunity for us will be if India data center market starts growing at the pace at which US and China.”
“That would present to us a very, very good opportunity, which is not happening yet today.”
— Shveta Arya, Managing Director
Cummins India is committed to evaluating localization opportunities for larger engine sizes (like 95-liter) as the data center market evolves to maintain its margins and support growth.
“The way we look at it, you’re right, yes, the 95 - liter is imported. So the India market is still largely on the 60 liter. And as the market moves, we always evaluate what is that we can do more in India. So going forward, the way we look at it and our outlook is that we continuously evaluate what more can we do in India. We like to keep our margins intact for growth.”
— Shveta Arya, Managing Director
Beyond data centers, Cummins is seeing healthy demand from several end-markets that require reliable backup power.
“We have been seeing demand from manufacturing, specifically a lot of solar cell manufacturing plants being set up, pharma.”
“Quick commerce, their dark stores are being set by quick commerce players. We’ve been seeing demand there.”
— Shveta Arya, Managing Director
Management believes its current product portfolio is sufficient to address expected demand over the next few years.
“From Colo players, we do not have a product gap.”
“For the next 3 years, we see the demand for that note from Colo players.”
— Shveta Arya, Managing Director
While Cummins attempts to pass through cost increases, management acknowledged that inflation remains a challenge across the supply chain.
“Yes, we have been seeing commodities increase.”
“There is always a challenge because we would have generated orders prior to the period of commodity increase.”
“With a little bit of lag and a little bit of challenge, we pass it on to the market.”
— Shveta Arya, Managing Director
Unlike the COVID period, current constraints are primarily due to global demand outstripping manufacturing capacity.
“At this point in time, the supply chain impact on the imported nodes is largely because demand on these nodes is coming from all across the world.”
“The demand is moving far higher than the pace of addition of capacity.”
— Shveta Arya, Managing Director
While optimistic on the market opportunity, Cummins acknowledged that local sourcing capabilities are not yet established.
“For this product, we do not have a local supply chain yet.”
“We are working towards that, but we do not have a local product yet.”
— Shveta Arya, Managing Director
Siemens | Large Cap | Engineering & Capital Goods
Siemens is a global technology company specializing in industry, infrastructure, digital transformation, transportation, and electrical power generation. It aims to enhance efficiency, quality, flexibility, and speed through its diverse portfolio and market-oriented structure. With global technology leadership and local expertise, Siemens is well-positioned to support sustainable growth.
[Concall]
Management highlighted that the investment cycle is no longer limited to emerging sectors like semiconductors and batteries. Traditional industries are also showing strong capex momentum.
“We do see a growth in cement, steel, pharmaceuticals, etc., also happening during the last couple of months.”
“I would not say we are yet at the peak on the private sector CapEx, but we definitely see a real pickup in the last couple of months.”
— Sunil Mathur, Managing Director & CEO
Management repeatedly identified data centres as one of the strongest growth opportunities across its portfolio.
“It is one of the fastest-growing portfolio elements for us.”
“This is one of the fastest growing businesses as well.”
“We do believe this is an opportunity or a sector that will grow much faster than it has been growing in the past.”
— Sunil Mathur, Managing Director & CEO
One of the most useful disclosures on the call, providing a sense of the growing contribution of the data-centre vertical.
“I think it’s in the range of around 12 to 15.”
— Sunil Mathur, Managing Director & CEO
Siemens believes industry projections may still underestimate the eventual scale of the opportunity.
“The official number right now is 1.5 going up to 9.”
“I believe this will probably go to 18-20.”
“In the next couple of years, we see a very strong push for data centres here in the country.”
— Sunil Mathur, Managing Director & CEO
Despite concerns around inflation, commodity prices and geopolitical tensions, management remains constructive on demand.
“We do not see a slowdown in private CapEx yet.”
“We do not see a slowdown in public CapEx yet.”
“From the demand perspective, we do not see a slowdown. Quite to the contrary, we see a pickup.”
— Sunil Mathur, Managing Director & CEO
While the direct impact on Siemens may be limited, management expects customers to benefit significantly from increased trade.
“We believe for our customers and therefore indirectly for us, there will be a huge impact coming out of that.”
“0.5 to 1 percent impact on GDP over the next couple of years.”
— Sunil Mathur, Managing Director & CEO
Management highlighted a recent semiconductor order as evidence of Siemens’ ability to provide end-to-end factory solutions.
“We also were able to receive an order from a leading semiconductor player for their OSAT facility in Gujarat.”
“This is where we combine really the power of Siemens together.”
“To provide a comprehensive solution that starts with software design, design of the product, design of the factory, design of the processes.”
— Sunil Mathur, Managing Director & CEO
Electrification remains one of the strongest growth themes in the company’s Smart Infrastructure portfolio.
“A lot of ordering happening in the entire electrification space.”
“This is a growth, very clearly a large growth area.”
“That is growing extremely well.”
— Sunil Mathur, Managing Director & CEO
Siemens is seeing broad-based capex activity across multiple manufacturing industries.
“Chemicals are doing well.”
“Pharma is growing well.”
“Food and beverages is growing well also.”
— Sunil Mathur, Managing Director & CEO
Management highlighted improving demand trends within the automotive sector.
“Automotive is beginning to pick up.”
“Two-wheelers are doing much better than four-wheelers.”
“The four-wheelers are also picking up as well.”
— Sunil Mathur, Managing Director & CEO
While most verticals remain strong, management flagged some softness in steel-related investments.
“Some slowdown in metals, in other words, in steel, a little bit.”
“We are not sure whether this is short term or whether this is more systemic.”
— Sunil Mathur, Managing Director & CEO
Management explained why Digital Industries remains heavily import-dependent despite currency volatility.
“PLCs, you need a minimum volume, which runs into millions, to make a factory actually viable.”
“Right now, as we speak, we do not see substantial opportunities for localization in the DI space here in the country.”
— Sunil Mathur, Managing Director & CEO
While management remains positive on demand, it repeatedly flagged inflation as the key variable to watch over the next few quarters.
“What impact the strong depreciation of the Rupee will have, the high increases in commodities will have on inflation and consequently on interest rates and consequently on ordering, we are not yet able to foretell.”
“This is something over the next 3 to 6 months we will be watching very, very carefully.”
— Sunil Mathur, Managing Director & CEO
This is one of the strongest localization achievements disclosed by management and demonstrates execution capabilities in railways.
“We have been able to deliver, as we mentioned, over 90% localization in about 2 years.”
“We are very satisfied with the progress over here.”
— Sunil Mathur, Managing Director & CEO
Management proactively built inventory to avoid disruptions and protect customers from supply-chain shocks.
“We increased our inventory levels also based on the West Asia crisis.”
“To safeguard our customers and also be able to continue with manufacturing and supply to our customers.”
— Wolfgang Wrumnig, Executive Director & CFO
Investors were concerned that imported content was driving the margin decline. Management clarified that commodities are the larger issue.
“The real impact in smart infra is not out of foreign exchange.”
“It is primarily out of commodities, which is copper and silver and aluminium.”
— Sunil Mathur, Managing Director & CEO
Management provided a rare quantitative assessment of current capex momentum.
“I would say 8 to 10 on an average percentage growth.”
“I am talking CapEx in the segments that I spoke about.”
— Sunil Mathur, Managing Director & CEO
Titagarh Rail Systems Limited | Mid Cap | Railways
Titagarh Rail Systems is a leading Indian provider of railway freight wagons, passenger coaches, and metro trains. The company specializes in integrated rail transit solutions, including the manufacturing of propulsion systems and specialized components for domestic and international markets.
[Concall]
Titagarh is pivotally shifting its business mix to focus more on high-value passenger rail and metro contracts. This transition is expected to improve the company’s overall margin profile and create a more diversified revenue stream.
“In the next three years, we expect the revenue contribution from the passenger rail segment to equal or exceed that of our freight segment. This shift is intentional as passenger contracts typically offer higher visibility and better margins. Our recent investments in the Bangalore and Kolkata metro projects are proof of this transition.”
— Anil Kumar Agarwal, Chief Financial Officer
Management is repositioning the company from a basic manufacturer to an advanced technology player. This focus on engineering and R&D is intended to qualify the company for lucrative high-speed rail and advanced transit projects.
“Titagarh is no longer just a metal fabrication company; we are becoming a technology-led engineering firm. The focus is on R&D and digital manufacturing to meet the evolving standards of the railway industry. This evolution is critical for our participation in high-speed rail projects in the future.”
— Umesh Chowdhary, Vice Chairman & Managing Director
The company is funding its major expansion projects using its own cash reserves rather than taking on new debt. Maintaining a net debt-free status while expanding capacity reduces financial risk and enhances shareholder value.
“Our balance sheet remains very lean, and we are net debt-free at the standalone level. The capital expenditure for the wheel plant and metro expansion is being funded largely through internal accruals. We intend to maintain this financial discipline even as we scale up our passenger rail capacity.”
— Anil Kumar Agarwal, Chief Financial Officer
By making its own train motors and wheels, the company is protecting itself from international supply delays and costs. This move toward self-sufficiency is a direct driver of better profit margins in their passenger train division.
“The backward integration into propulsion systems and wheels is a key differentiator for us now. By manufacturing these critical components in-house or through JVs, we are insulating ourselves from global supply chain shocks. This strategy is also helping us improve our overall EBITDA margins in the passenger segment.”
— Umesh Chowdhary, Vice Chairman & Managing Director
The company is actively bidding for projects in Africa and Southeast Asia to reduce its dependence on the Indian government. International expansion provides a safeguard against potential slowdowns in the domestic railway budget.
“On the export front, we are seeing traction in the African and Southeast Asian markets for our specialized wagons. While Indian Railways remains our primary customer, diversifying our geographical footprint is essential for long-term risk management. We have already submitted bids for two international metro projects.”
— Umesh Chowdhary, Vice Chairman & Managing Director
Software Services
Happiest Minds Technologies | Small Cap | Software Services
Happiest Minds Technologies focuses on providing a holistic digital experience to customers through services like digital business, product engineering, and security. With an end-to-end digital solution approach, the company offers transformative solutions, customer-centric strategies, and innovative services in areas like RPA, SDN, IoT, and cloud, enabling clients to enhance interactions and efficiency.
[Concall]
This was the most important forward-looking statement on the call. Despite a mixed macro environment, Happiest Minds is maintaining one of the stronger growth outlooks in the industry, supported by pipeline growth and AI-led demand.
“Importantly, during Q4, we saw a record pipeline growth of 27%, which gives us increasing confidence in our FY27 outlook.”
“Based on this momentum, the Board has reconfirmed FY27 growth guidance of 12.5%, while we continue to remain aspirational about a 15% growth trajectory.”
— Joseph Anantharaju, Co-Chairman & CEO
Management is significantly scaling AI capabilities to meet rising enterprise demand.
“We are in the progress of building a dedicated 1,000 AI and generative AI focused team by end of FY27 to support growing customers’ demand to build generative AI solutions.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
Management believes the market has entered a new phase where customers are demanding measurable outcomes rather than pilots.
“Enterprises have moved decisively from AI experimentation towards scale deployment.”
“The challenge today is not access to the AI models or the quality of the AI models, but integrating AI securely into the enterprise workflows and driving measurable operational outcomes.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
The company is productizing its AI experience into a reusable enterprise platform.
“We recently announced the launch of our enterprise AI platform.”
“The platform is designed to help enterprises accelerate AI adoption in a secure, scalable and enterprise-ready manner while reducing execution complexity and implementation risk.”
— Joseph Anantharaju, Co-Chairman & CEO
Management emphasized that AI is not only a customer offering but also transforming internal delivery models.
“The reason for us to actually go heavily on the AI first as a strategy is not what we build for the customers, but also how we build for the customers.”
“Fundamentally, it is changing every service offering that we are having.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
Management highlighted meaningful AI deployment experience rather than experimentation.
“Today, we have 50 use cases identified and already implemented.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
The company highlighted the stability of its revenue base.
“Our repeat business is 92%.”
“That varies between 92% to 94% depending on the quarter.”
— Joseph Anantharaju, Co-Chairman & CEO
Management highlighted organizational differentiation in AI investments versus peers.
“If you really look at it, Kuber, I think Happiest Minds is the only company that has a separate business unit for generative AI.”
“What that allows us to do is to just focus on the space.”
— Joseph Anantharaju, Co-Chairman & CEO
Management suggested that AI is no longer a future opportunity but a present revenue opportunity.
“As we speak from an AI and generative AI perspective -- GBS, we do have money sitting on the table.”
“We don’t look at this as really being headwinds.”
— Joseph Anantharaju, Co-Chairman & CEO
Internal AI adoption has progressed meaningfully and is beginning to influence delivery models.
“Relay Build, which is on the AI product side, at this point, we already have 40% adoption within our internal projects and the customer projects and everywhere.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
Management described a shift from building applications to building the infrastructure layer that enables future AI agents.
“We are actually creating MCP servers wrapping their 900 APIs so that new Agentic AI solutions can be developed.”
“This is an example where creating the necessary Agentic infrastructure for the new Agentic solutions to be further developed.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
Management shared a real-world example of productivity gains from AI-led software development.
“Traditional software development methods require 6 months to build such an application.”
“We won this project because we are able to actually complete the project in 3 months and deliver to the customer.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
An interesting sector-specific observation that could become a future growth driver.
“We are additionally seeing signs of revival in the education sector, driven by GenAI adoption.”
“We are capitalizing on with our Eduweave platform repeatable solutions.”
— Joseph Anantharaju, Co-Chairman & CEO
Highlights Happiest Minds’ efforts to position itself within the evolving GenAI ecosystem.
“When they started a formal partnership program, we became one of the early partners for them.”
“So we closed a partnership with Anthropic in the last quarter.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
An interesting strategic decision that contrasts with many peers who launched AI platforms immediately after ChatGPT’s emergence.
“We didn’t want to build a broader enterprise AI platform 2 years back because everything is in total flux.”
“What we did is we wanted to wait so that we gain sufficient experience.”
“All the knowledge and experience that we gained is what prompted us to start thinking about as well as start developing and creating the enterprise AI platform.”
— Sridhar Mantha, CEO – Generative AI Business Services (GBS)
FMCG
Tilaknagar Industries Limited | Small Cap | Beverages - Alco
Tilaknagar Industries is a leading Indian manufacturer of alcoholic beverages, primarily focused on the prestige and premium brandy segments. The company owns the iconic Mansion House brand and recently expanded its portfolio through the acquisition of the Imperial Blue whisky business.
[Concall]
The company has reached a major scale milestone following the successful integration of its newly acquired whisky brand. This growth demonstrates strong market demand for their flagship products and newly added assets.
“One, we achieved a volume of almost 20 million cases in FY26 with only 4 months of Imperial Blue business under our ownership. Second, Mansion House Brandy crossed the volume benchmark of 10 million cases in FY26, cementing its position as India’s largest P&A brandy.”
— Amit Dahanukar, Chairman and Managing Director
Management is changing how they report financial results to better match industry standards. While this makes top-line revenue look smaller, it will artificially increase reported profit margins without changing the actual money earned.
“Before the acquisition of the Imperial Blue business, we used to present the selling expenses such as discounts, schemes, and similar incentives to customers and distributors under the head of other expenses. However, from Q4 FY26 and going forward, we will show this as a reduction from the gross revenue itself. This change will have a negative impact on reported revenue and gross margins, but will have a positive impact on EBITDA margins and PAT margins.”
— Amit Dahanukar, Chairman and Managing Director
A massive increase in internal production capacity at the Prag Distillery will reduce reliance on third-party suppliers. This move is expected to save the company 10 crore rupees every year in bottling costs alone.
“The capacity has now increased from 6 lakh cases per annum to 36 lakh cases per annum. This expansion is a testament to Tilaknagar’s push towards safeguarding supplies and demonstrating execution capabilities towards long-term capacity planning. On the back of this expansion, Tilaknagar Industries expects savings in bottling cost to the tune of 10 crores per annum.”
— Amit Dahanukar, Chairman and Managing Director
The company is successfully moving the management of the Imperial Blue brand from a third-party service back into its own control. This transition is ahead of schedule and will allow for better operational control and higher profits.
“75% of the IB business has exited TSMA by the end of Q4 FY26. For the states where we have exited TSMA in Q4 FY26, we have already started full-fledged operations at Tilaknagar Industries units. Now, only three states remain under TSMA, and we expect to transition them over the course of the next few quarters with an outer date of March 2027.”
— Ameya Deshpande, Strategy Officer
Management clarified that potential trade deals lowering import taxes will benefit consumers through lower prices but won’t directly boost the company’s profit margins. This means future earnings growth must come from sales volume or internal efficiency rather than tax breaks.
“Any reduction in custom duty, keeping aside price action that we ourselves may or may not take, will have no impact on the margins as such. That will have a direct impact on the MRP but not on our revenues or our cost structures. From that perspective, custom duty change on account of the potential UK FTA does not have any impact on our margins.”
— Ameya Deshpande, Strategy Officer
Management is focusing on lowering production costs by optimizing how and where products are bottled. This specific operational change is a key pillar of their strategy to increase the profit earned on every case sold.
“There will be multiple optimization initiatives we are running on the supply chain side as well, especially regarding bottling. Remember that Imperial Blue was a Pernod brand, and Pernod had bottling units which were often dedicated to their own volume where all kinds of brands used to get done. You will see benefits coming out of bottling charges.”
— Ameya Deshpande, Strategy Officer
Raw material inflation is currently putting pressure on profitability in the short term. While the full-year outlook remains positive, investors should expect slightly weaker margins in the first quarter results.
“In Q1, it would be incorrect of me to say that we will expand on these margins. You may see some level of short-term impact, but from a full-year perspective and going forward, you should go with the guidance provided.”
— Ameya Deshpande, Strategy Officer
Recent government policy changes have lowered the retail price of the company’s main brands in Karnataka. Based on historical trends, this price drop is expected to trigger a significant increase in sales volumes.
“With the reduction in MRP, we expect a further uptick in volumes going forward. Just to give a reference point, the last time a price reduction took place in Karnataka for our portfolio—from 257 to 235 rupees per nip, which was around 22 rupees—we saw significant growth beyond just high teens in that state.”
— Ameya Deshpande, Strategy Officer
Media & Entertainment
Signpost India Limited | Small Cap | Advertising
Signpost India is a leading digital out-of-home and transit media enterprise that manages large-scale advertising assets across Indian metro networks, airports, and bus shelters. The company focuses on technology-integrated media solutions and long-term public infrastructure contracts to drive recurring revenue.
[Concall]
The company intentionally selects projects with long durations to ensure high revenue visibility and stability. Focusing on transit and digital assets aligns the business with secular growth in urban infrastructure.
“When we pitch for projects, our cautious call is to take up responsibility for projects that have a longevity of 7+ years. When we see an opportunity, it is mostly in a transit medium or a data-led medium centered around digital.”
— Shripad Ashtekar, Managing Director
The firm has achieved a rapid national expansion, scaling its geographic presence eightfold since its public listing. This massive increase in inventory square footage provides the capacity for significant future revenue growth.
“Our footprint has grown from 4 cities at the time of our 2024 listing to 32 cities. We added approximately 866,000 square feet this year across metro, transit, and digital assets, including a significant expansion of the Bangalore Metro network.”
— Shripad Ashtekar, Managing Director
The Indian advertising industry is undergoing a structural shift toward digital out-of-home media. Signpost’s heavy investment in digital screens positions it to benefit from this segment’s projected market share gains.
“Digital revenue rose from 700 crores in 2024 to 1,220 crores in 2025, now accounting for 18% of total OOH revenue—a share expected to reach 25% by 2028. The installed base of digital screens crossed 223,000 in 2025, a 21% growth in a single year.”
— Syed Haseeb Arfat, Chief Business Officer
To address high receivables, the company is moving toward billing for partial campaign completions rather than waiting for total project sign-offs. This transition is expected to significantly reduce the cash flow cycle by the third quarter.
“We have pushed for milestone-based billing. Whatever compliance we get from a specific region or city, those funds will be clocked into the account immediately rather than waiting for a full check. This is a measured approach.”
New infrastructure projects typically face a half-year lag before achieving optimal advertiser utilization. The strong early performance in Bangalore Metro suggests that these large-scale investments are gaining traction faster than anticipated.
“Any new asset in a new geography requires a maturity period of 4-6 months. The growth from the numbers you mentioned will start resulting in better yields than what we have seen. For example, in the Bangalore Metro, where we have 67 stations, we are seeing growth of 18-25%, which is higher than expected.”
— Shripad Ashtekar, Managing Director
Signpost’s national scale serves as a barrier to entry for smaller, localized competitors who cannot handle multi-city campaigns. This capability allows the company to act as a consultant to major brands, commanding higher loyalty and better pricing.
“Our differentiation lies in direct relationships with brands through solution-based and advisory-led discussions rather than commodity delivery. It is hard for a local agency to serve a client who wants to deliver across 10-500 cities at once.”
— Shripad Ashtekar, Managing Director
Software Services
Meta Infotech Limited | Small Cap | Cybersecurity
Meta Infotech is a leading provider of enterprise cybersecurity solutions, specializing in cloud, network, and identity security for critical sectors like BFSI and healthcare. The company is currently executing a strategic shift toward high-margin managed services and international expansion to drive its next phase of growth.
[Concall]
Meta Infotech is moving beyond its traditional base in Mumbai to establish a presence in major Indian tech hubs. This wider footprint is a key part of their plan to find new customers and diversify their geographic risk.
“For 27 years, we were predominantly a Mumbai-based company in terms of sales. We have added Delhi, Bangalore, Chennai, and Hyderabad. We are soon going to add Pune as well, coming up in a month or two. That is the geographical expansion.”
— Venu Gopal Peruru, Chairman and Managing Director
The company is making a conscious choice to walk away from high-volume, low-profit product sales. By focusing on higher-quality deals, they aim to raise their overall operating margins and improve the health of their balance sheet.
“Going forward, we are going to drop all product business that is low-margin. Anything with less than 5% margin, we will drop and focus on services instead. Because of one particular large order, our PAT and EBITDA percentages were reduced significantly.”
— Venu Gopal Peruru, Chairman and Managing Director
Management plans to more than double the revenue share of services over the next few years. This shift is the primary mechanism they intend to use to reach their ambitious profit growth targets.
“Over a period of 3 years, our focus is to achieve a 25% to 30% contribution from services because we are going to reduce low-margin product revenue. That is how we are targeting 4x PAT in FY29. The services revenue was 36 crores last year, and we expect that value to increase by a minimum of 25%.”
— Venu Gopal Peruru, Chairman and Managing Director
The company uses a specific strategy of replacing expensive senior staff with well-trained juniors to keep labor costs under control. This systematic training approach helps them manage high industry attrition without eroding their profit margins.
“If they complete 4 years and demand a 100% hike, we let them go and replace them with a package of 7 to 8 lakhs instead of paying them 18 lakhs. We maintain our costs by replacing senior guys with juniors who have 80% to 90% of the capability after 3 months. For every three engineers at a customer site, we provide one extra junior engineer at no cost to mitigate attrition or leaves.”
— Venu Gopal Peruru, Chairman and Managing Director
The weak cash flow reported in the latest results was due to one-time tax payments and inventory that hadn’t yet been converted to cash. Management expects cash flow to stabilize now that these specific timing issues have passed.
“Operating cash flow was affected by a tax payment of around 5 crores. Also, there was inventory of around 20 crores in March, which mostly rolled over in April. It is a timing issue and has been resolved.”
— Paresh, CFO
The company has updated its billing terms to protect itself from fluctuations in the value of the US dollar. This change ensures that future profits will not be wiped out by sudden shifts in exchange rates.
“Previously, the contract did not mention INR costs clearly, and we had to execute based on old rates. It took six months to get approval for adjusted rates. Now, all our contracts are conversion-agnostic. We are signing customers at spot plus 2.”
— Venu Gopal Peruru, Chairman and Managing Director
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Meher, Shahid, Kashish & 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.
all the good stuff is human and mistakes are AI. 😂