The Chatter: Havells, Ambuja, Cipla & More
Edition #53
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.
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
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.
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.
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.
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.
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
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 & 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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