The Chatter: HDFC, Groww, Yes Bank, Havells & More
Q4FY26 | Edition #56
Welcome to the 56th edition of The Chatter — a weekly newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 18 companies across 6 industries and a few TV interviews
Information Technology
HCL Technologies
Tech Mahindra
Persistent Systems
Tata Elxsi
Financial Services
Billionbrains Garage Ventures Ltd. (Groww)
HDFC AMC
HDFC Bank
ICICI Bank
Yes Bank
Telecom
Tata Communications
Capital Goods
Mahindra EPC Irrigation
Transformers & Rectifiers (India) Ltd.
Retail
Havells India Limited
Automotive
SML Mahindra Limited
TV Interviews
HCL Technologies on its Q4 Results
Greenpanel Industries on Price Hikes
Pearl Global Industries on US Sourcing Shift & Tariff Mechanics
MM Forgings on Demand Recovery
Information Technology
HCL Technologies | Large Cap | IT Services
HCLTech is a global technology services company providing software, infrastructure, and engineering solutions to large enterprises. The firm operates across segments including IT and Business Services, Engineering and R&D Services, and HCL Software.
[Concall]
Management is seeing AI integration in almost every new contract, which has helped them maintain industry-leading growth rates. This suggests the company is effectively capturing market share as enterprises pivot toward AI-driven efficiency.
“Client behavior reflected familiar patterns of cost-takeout initiatives coupled with accelerated adoption of AI-led productivity gains. Notably, AI momentum remains strong with nearly all deals incorporating an AI or GenAI component. Given this backdrop, the year marks the third consecutive year that HCLTech is likely to deliver the highest organic revenue growth among scale players.”
— C. Vijayakumar, CEO and Managing Director
While total deal values appear flat, management notes that AI automation is making projects cheaper to deliver, effectively hiding an increase in work volume. This shift suggests that revenue growth in the AI era may require higher deal volumes to offset lower per-project pricing.
“TCV of net new bookings for the year clocked $9.3 billion, same as last year, despite some of the AI deflation that you see in the TCV net new booking. As we close the quarter and fiscal year, our AI strategy is translating into deeper client engagement and clear market leadership.”
— C. Vijayakumar, CEO and Managing Director
Management expects nearly half of the traditional IT services market to shrink as AI automates routine tasks, while new AI-specific services will boom. Investors should monitor how quickly the company can pivot its workforce from these shrinking areas into high-growth AI categories.
“40% of the industry runs the risk of being disrupted by AI and can shrink at a 3-5% CAGR for a few years and can eventually be 25% of the enterprise spend. ... Finally, there is a market that is AI-native, currently at 5% of the market growing at 30%, which can become 20% plus of the market in 5 years.”
— C. Vijayakumar, CEO and Managing Director
Advanced AI models are making software development much faster, which reduces the number of billable hours per project. This internal efficiency is a double-edged sword that improves speed but puts downward pressure on traditional revenue models.
“Starting with the deflation number of 3-5% that I shared, it is mostly based on the industry mix of services. For the specific question on how that changes with respect to model effectiveness, I think most of the enhancement in models is really driving more and more velocity and efficiency in the SDLC lifecycle.”
— C. Vijayakumar, CEO and Managing Director
The company is successfully securing large-scale infrastructure projects to build data centers optimized for AI workloads. This demonstrates that HCLTech is moving beyond simple consulting and into the core physical build-out of AI systems.
“I think AI Factory is where we are seeing tremendous traction. One of the large deals that we called out this quarter is a $100 million plus AI Factory deal for the design, implementation, and support of a next-generation AI data center for a large technology company.”
— C. Vijayakumar, CEO and Managing Director
The software division is seeing lower sales of one-time licenses as it tries to transition customers to more stable recurring subscriptions. This transition is expected to keep software revenue flat or slightly down as the old revenue model fades.
“For the software segment, we continue to work on pivoting the business to more subscription and steady revenue streams away from perpetual license sales. ... Our expectation is low single-digit, flattish, or marginally declining growth for the coming year.”
— C. Vijayakumar, CEO and Managing Director
AI is providing a new level of productivity savings beyond what was historically possible in IT outsourcing contracts. For investors, this means the company must continuously innovate to prevent these price reductions from eroding their total earnings.
“No, I think we were always careful that this is an incremental impact. The traditional productivity what we normally commit in a Greenfield or in a first-generation outsourcer — we should now be looking at an incremental impact or reduction in the overall solution.”
— C. Vijayakumar, CEO and Managing Director
Tech Mahindra | Large Cap | IT Services
Tech Mahindra is a global IT services company focused on digital transformation, consulting, and enterprise technology solutions, with strong exposure to telecom, manufacturing, and BFSI. The company is currently in a transition phase, improving margins and rebuilding deal momentum while positioning itself around AI-led services and large enterprise partnerships.
[Concall]
The company reported its highest-ever deal wins, including large strategic contracts, indicating strong demand and visibility for future growth.
“We closed the year with our highest ever deal wins in the last many years. Notably, we secured two mega deals over consecutive quarters aimed at accelerating innovation, strengthening digital resilience, and delivering AI-led operational efficiencies.”
— Mohit Joshi, CEO and Managing Director
Despite modest revenue growth, the company delivered strong margin expansion through disciplined execution, signalling improved operational efficiency.
“Full year revenues for Tech Mahindra stand at $6.385 billion, up 1.9% on a reported basis and 0.6% in constant currency. During the year, our focus remained on disciplined execution, staying close to clients, and progressing our solution-led approach. Operating profit is $797 million, up 31.4% year-over-year with margins expanding by about 290 basis points to 12.6%.”
— Mohit Joshi, CEO and Managing Director
The company is transitioning from a traditional outsourcing model to a higher-value strategic partner role, which improves deal stickiness and pricing power.
“We closed the year with total deal wins of $3.794 billion, representing a 42% growth year-over-year. Tech Mahindra is increasingly positioned as a strategic partner to clients rather than only as an outsourcing vendor.”
— Mohit Joshi, CEO and Managing Director
Margins continued to improve even while the company invested in AI and absorbed transition costs from large deals, indicating strong cost control.
“Operating profit for the quarter is at $223 million, up 5.5% quarter-over-quarter, and margin improves by 70 basis points to 13.8%. Project 40, FX tailwinds, and Comviva seasonality contribute positively, while we continue to invest in AI and work through transition costs in our large deals.”
— Rohit Anand, Chief Financial Officer
The company announced its highest-ever dividend, reflecting strong cash flows and a shareholder-friendly capital allocation approach.
“In line with our stated capital allocation policy, the board has recommended a final dividend of 36 rupees per share, taking the total dividend announcement for the year to 51 rupees per share. This is the highest ever dividend we have announced. The full year dividend payout ratio works out to be 104% of PAT and 91% of free cash flow.”
— Rohit Anand, Chief Financial Officer
Persistent Systems Ltd. | Large Cap | IT Services
Persistent Systems is a global digital engineering provider specializing in cloud-native application development and enterprise modernization. The firm leverages proprietary AI platforms like Tatwa and Iora to serve clients across the BFSI, Healthcare, and High-Tech industries.
[Concall]
Clients are moving their budgets away from routine maintenance and toward major technology overhauls designed to support AI capabilities. This shift is driving demand for Persistent’s core strengths in modernization and data infrastructure.
“We see a real shift in spending from business-as-usual programs to transformation initiatives that are preparing clients to adopt AI at enterprise levels. We are involved in accelerating clients’ transformation journeys in the following areas: improving time-to-market for new product rollouts, transforming complex legacy landscapes, end-to-end modernization of data, and reimagining customer experience.”
— Bharath Narayanan, Executive Vice President, Global BFSI and Europe Geography Head
Management clarified that their goal is to reach a $2 billion revenue pace by the final quarter of the next fiscal year. This target sets a clear benchmark for investors to measure the company’s growth trajectory over the next 12 to 18 months.
“So, for the USD 2 billion revenue, we are looking at the Q4 FY27 exit as the point where we hit that annualized run rate. Now coming to your other questions regarding the accounts, we have been managing those relationships closely. From the company’s perspective, we have fairly strong relationships with each of them, and they are still there.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
While new platform features like Salesforce Headless 360 allow direct software connections, they also increase complexity for the end customer. This complexity ensures that professional service firms like Persistent remain necessary to implement and manage these advanced systems.
“To keep it short, given the time constraints, if you look at the overall Headless 360, while it gives customers options to use APIs directly, it also increases the technical work. Not every customer is tech-savvy enough to take advantage of these without having that technical competence. So, we are working very closely with Salesforce.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Persistent is successfully gaining market share within the healthcare sector, even as larger competitors report slowing demand. This relative outperformance suggests that the company’s specific offerings are more resilient than the broader industry average.
“We play in the same vertical and some of our larger customers are there. We share these customers with a few other strategic tier-one firms as well. As far as we are concerned, we have been able to grow in the same set of accounts despite the headwinds that the industry has faced.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
The company is targeting private equity-owned firms as a primary customer base for their cost-saving AI tools. This strategy allows Persistent to tap into a massive segment of the US software market that is currently focused on efficiency and margin improvement.
“The fact is that there are more PE-owned companies in the US today than public companies. In the enterprise software space over the last 5 years, many companies have been taken private. If we can partner with the PEs and their portfolio companies to improve their margins using our platforms—whether we use open-source LLMs or Anthropic—it is a very big opportunity.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Persistent spends roughly $8 million to $9 million annually on developing its own internal data platforms. These investments are proving valuable as clients increasingly seek proprietary software solutions to gain an edge in their AI transformations.
“As far as the capitalization spend we do on our main data systems, that ranges around 8 million to 9 million dollars a year. You can assume our own developed IP is getting a lot of attention and momentum in terms of the benefits provided to clients.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Management believes that using third-party AI platforms will not hurt their profitability because the technology increases overall worker productivity. This suggests that AI is being viewed as a tool to maintain or enhance margins rather than an added cost burden.
“Most of this should be largely neutral or slightly accretive because the entire promise of AI is to do more work with fewer people and more technology. It should not be margin-dilutive. Our margins should stay the same or improve as we use more of this technology.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Management admits that new AI tools might reduce the size of some traditional coding projects, but they believe they can still grow by taking market share from others. Their relatively small size compared to the total market gives them ample room to expand despite industry-wide shifts.
“Even if we see compression in the tech world or cannibalization of our own business, the total addressable market is large, and we are a relatively small company at roughly 1.7 billion dollars. There is enough new outsourcing and market share rotation happening for us to lead the pack.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Tata Elxsi Limited | Mid Cap | IT Services / ER&D
Tata Elxsi is a leading global provider of design-led technology services across automotive, media, and healthcare sectors. The company specializes in engineering research and development, helping clients innovate through AI, digital transformation, and specialized domain expertise.
[Concall]
The company has successfully shifted its focus toward direct deals with car manufacturers rather than just parts suppliers. This strategy is winning new global business even while the broader market remains slow.
“In our transportation business, our revenues in Q4 FY26 grew by 0.2% quarter-on-quarter in constant currency terms. We are delighted with two strategic wins: one in the APAC region from a new OEM and another from a next-generation mobility services company in the US, paving the path for business growth in coming quarters. Our investment and efforts to pivot towards OEM business are delivering continued success, underscoring our strength and focused execution of chosen strategies.”
— Management, Executive Leadership
The company relies heavily on its existing client base for over 97% of its quarterly revenue. This high level of repeat business provides stability but makes the firm dependent on the health of its current accounts.
“If you look at it in any quarter, new customers would contribute maybe 2% to 2.5% of the revenue. So, a large portion of the revenue comes from existing customers and the deals that we win with them. However, we also see a good new set of customers coming in.”
— Management, Executive Leadership
Management admitted that the timing of deal closures in the healthcare segment missed expectations, leading to a poor quarterly result. They expect these delayed deals to close early in the next quarter, signaling a likely rebound.
“We were very optimistic that the healthcare business had reached the bottom and would turn around. We were pretty confident because there were a few deals that we were bidding for. Unfortunately for us, those deals did not close in time, which resulted in the situation we had. However, we still continue to carry those items in our high-probability funnel.”
— Management, Executive Leadership
New multi-year contracts often lower initial profits because of high setup and transition expenses. Management expects margins to rise in the later years of these contracts as projects become more efficient.
“When we look at a three-year or five-year deal, the initial year would have a lot of costs involved. That could include transition costs or acquisition costs. However, when you look at a multi-year horizon, we definitely look at how we can improve our margin sequentially quarter-on-quarter and year-on-year.”
— Management, Executive Leadership
Better employee utilization is a primary driver for the company’s rising profit margins. As the company moves more staff onto billable projects, investors can expect a predictable boost to the bottom line.
“The work has been happening in terms of the operating model, operating efficiencies, and leverage. It is not only about utilization, though utilization was below 70% at one point. Now we are inching toward the mid-70s. Every 1% increase in utilization helps by at least 25 to 30 basis points on the margins.”
— Gaurav, Chief Financial Officer
Global political tensions are making automotive clients more cautious about starting new work. Consequently, management has lowered its growth expectations for this key segment to high single digits.
“I am still pretty optimistic about the overall automotive market. However, given the current geopolitical situation and uncertainties, while we have the deals in hand and will look at ramping up, there could be some uncertainty. We are still talking to customers about that. Having said that, we would likely look at a high single-digit exit; we may not get into double digits for automotive.”
— Management, Executive Leadership
While some competitors are cutting prices by promising AI-driven savings, Tata Elxsi believes the specialized nature of engineering prevents massive price wars. They are maintaining price discipline rather than chasing low-margin work.
“I do not think we have seen irrationality in general. ER&D is still very specialized. It is not something where you can use AI or GenAI across the board. That said, we have seen a few contracts where competition has priced very aggressively.”
— Management, Executive Leadership
The company has officially moderated its annual growth guidance from double digits down to single digits. This reflects a more conservative outlook on how quickly global clients will commit to new spending.
“Today, looking at the global situation, we might be looking at a single-digit to higher single-digit growth for the financial year. We may not reach double-digit growth. This could change in the next three to six months based on deal momentum.”
— Management, Executive Leadership
Management is being cautious about taking on too many fixed-price contracts which carry higher risk if projects go over budget. They want a balanced portfolio to ensure financial stability during complex engineering projects.
“It is not necessarily advisable to shift more of the business to fixed-price. It requires a careful transition because we need the right subject matter experts and architects to execute and deliver margins. It is a double-edged sword. It is not our objective to move to 70% or 80% fixed-price; that would put too much risk on us.”
— Management, Executive Leadership
The company is quietly expanding into the aerospace and defense sectors to reduce its reliance on automotive and media. Success in these high-barrier industries could provide a new long-term growth engine.
“We are focusing on aerospace and defense. We have some exciting things happening there, but it is difficult to detail them until they result in large revenues. We are doing good work with defense organizations in India, such as HAL.”
— Management, Executive Leadership
Financial Services
Billionbrains Garage Ventures Ltd. (Groww) | Large Cap | Financial Services
Billionbrains (Groww) is steadily evolving beyond a discount broker into a full-stack investment platform, with a clear push toward wealth and AUM-led growth. While user activity and retention remain strong, the real shift is in how new investors are entering, through mutual funds and long-term products, signalling a more stable and scalable business model going forward.
[Concall]
The company is aggressively scaling its wealth management business to move beyond traditional broking and build a more stable, AUM-driven model.
“Going forward, our focus will continue to be on scaling our wealth business. It has been six months since the Fissdom acquisition, and now we have got a lot of learnings on how to look at the problem of scaling. We will continue scaling wealth.”
— Lalit Keshre, Co-founder and CEO, Billionbrains Garage Ventures Ltd.
The company views AI as a critical driver for both operational efficiency and enhanced user engagement in the coming year. For investors, this dual focus could lead to faster product releases and improved operating margins through tech-led productivity gains.
“Secondly, we will continue compounding our existing businesses and growing market share, which we have been continuously doing. Thirdly, we see this year as the inflection point for how AI will start impacting things, and we look at it in two ways. One is how we can improve the customer experience leveraging AI, and second is on the productivity side where our internal teams are shipping much faster and better.”
— Lalit Keshre, Co-founder and CEO
Muted market conditions have prompted a shift in how new users enter the platform, moving from direct stocks to passive products. This trend highlights the platform’s ability to remain relevant across different market cycles by offering diverse investment entry points.
“Markets have not been doing so great since September 2024. Since then, we have seen that the acquisition funnel has shifted more towards mutual funds and ETFs as products. Hence, the way customers are actually getting introduced to the capital market has become slightly different.”
— Ishan Bansal, Co-founder and CFO
Increased market volatility and the launch of new trading tools have significantly boosted the company’s derivative market share. This increased activity suggests that the platform’s active user base is highly responsive to market movements and new product features.
“First, with the new customers coming to the derivatives market, we are driving some benefits from new initiatives, including 9:15. But a large part of this is coming on Groww itself. Second, because the last quarter had a lot of volatility, we saw that our customers who used to trade earlier have started doing more.”
— Ishan Bansal, Co-founder and CFO
The firm is holding back on launching algorithmic trading products until there is more regulatory stability in the sector. This cautious stance protects the company from compliance risks while ensuring future products are built on a solid legal foundation.
“As of now, we do not have a very strong strategy focused on algo. We believe the new regulations that are still getting cleaned up will eventually give us more clarity. We will probably jump into this market once we have full clarity on the regulatory piece.”
— Harsh Jain, Co-founder and COO
Rising employee expenses are a result of strategic hiring for high-growth areas like wealth management and artificial intelligence. These investments are intended to drive long-term value creation even if they weigh on short-term personnel costs.
“On the employee cost, we are investing across multiple functions, including asset management and the wealth side. There are also initiatives on the AI side in Groww where we are investing. This investment typically comes in the form of people, and hence the employee cost has increased a little bit from last quarter to this quarter.”
— Ishan Bansal, Co-founder and CFO
Margin Trade Funding (MTF) is being used to deepen engagement with existing clients rather than as a tool to find new ones. This shift toward longer holding periods among traders can lead to more stable revenue streams from interest income.
“On MTF, it is not an acquisition product for us. Mostly our existing customers are using MTF. Earlier, they might have been doing intraday trading; now they are holding positions for longer.”
— Harsh Jain, Co-founder and COO
Expansion into smaller cities is bringing in a more stable, long-term investor base compared to the typical urban trader. These ‘sticky’ customers are expected to have a higher lifetime value, providing a foundation for steady AUM growth.
“What we are seeing currently is that as we expand into tier 2 and tier 3 towns, the profile of the customer is slightly different. These people are now new to stocks, and we have seen that their behavior and their investing habits are more long-term oriented. They are looking at building wealth over time, not just trading in the short term.”
— Lalit Keshre, Co-founder and CEO
Management explains that industry expansion is non-linear and heavily dependent on bull market cycles to attract new cohorts. Investors should expect periods of rapid growth followed by stabilization as the industry follows a steady 10-15% long-term growth path.
“Growth typically comes in those bull runs and then stabilizes. When the next bull run comes, that is when the market will expand, and that expansion is typically very high. In a longer frame, the industry is growing at a 10-15% CAGR.”
— Harsh Jain, Co-founder and COO
HDFC AMC | Large Cap | Financial Services
HDFC AMC provides a diverse range of mutual funds through active and passive strategies across equity, fixed income, hybrid, and multiasset solutions. The company also offers portfolio management services, alternative investment funds, and caters to HNIs, corporates, trusts, and institutions with tailored investment solutions.
[Concall]
The company plans strategic expansion into non-mutual fund businesses such as PMS and alternatives, indicating a diversification of revenue streams.
“Over the next several years, apart from the mutual funds, we also see opportunities to grow the non-mutual fund side of the business, which includes our PMS capabilities... and on the alternatives side.”
— Navneet Munot, Managing Director and Chief Executive Officer
Indian domestic investors are demonstrating growing maturity, adopting a long-term perspective and understanding the advantages of systematic investing.
“One thing is quite clear that domestic households are increasingly investing with a long-term mindset. And they are beginning to appreciate the benefits of rupee cost averaging.”
— Navneet Munot, Managing Director and Chief Executive Officer
Investors exhibited mature, contrarian behavior by capitalizing on market downturns and volatility to increase their investments.
“I mean that clearly shows that in extreme volatility and when markets were not doing well, the Nifty and the other indices were down, investors use that an opportunity to put more money to work. I mean that clearly shows a very mature behaviour of investors.”
— Navneet Munot, Managing Director and Chief Executive Officer
India’s nascent stage of savings financialization presents a substantial growth opportunity that HDFC AMC aims to fully leverage.
“We are in a growth business. And I would emphasize we are at very early stage of financialization of savings in India. We want to make the most of the opportunity which lies ahead.”
— Navneet Munot, Managing Director and Chief Executive Officer
HDFC AMC is taking a cautious and deliberate approach to launching SIF products despite regulatory approval, prioritizing thoughtful design over being first to market.
“On your question on SIF, so we have secured all necessary regulatory approvals... So, we are not approaching this as a race. In a category like this, being early doesn’t necessarily create an advantage. In fact, the first few products will end up shaping investor expectations for the entire segment. So, we would much rather be thoughtful and deliberate.”
— Navneet Munot, Managing Director and Chief Executive Officer
While the company is proud to secure prestigious government mandates like EPFO and SPFO, these non-discretionary PMS segments operate with very narrow profit margins.
“The non-discretionary, particularly the EPFO and SPFO kind, these are Government of India mandates and among the most prestigious and very tightly contested opportunities. So, we are honored to have been selected. That said, this is a segment that operates under very, very tight economics.”
— Navneet Munot, Managing Director and Chief Executive Officer
The company’s balance sheet equity holdings, mandated by SEBI’s ‘skin in the game’ rule, experienced a decline in value due to the market correction in Q4.
“The equity investment in mutual funds that we have on the balance sheet is largely due to the skin in the game circular from SEBI. So that portion of the equity investments saw a drawdown because of the market correction in the Q4, right.”
— Naozad Sirwalla, Chief Financial Officer
HDFC Bank | Large Cap | Financial Services
HDFC Bank and its subsidiaries offer various banking and financial services such as retail banking, wholesale banking, treasury operations, insurance, and asset management. With overseas branches in multiple countries, the bank operates in segments including Wholesale Banking, Treasury, and Retail Banking.
[Concall]
The bank achieved 12% credit growth, significantly outperforming the previous year’s low growth. This shows that the bank is regaining its lending momentum as the broader economy improves.
“We had estimated a system credit growth to be around 10.5-11.5%. We did 12%, up from 5.5% last year. As you can see, there is positive momentum as we had expected.”
— Sashi Jagdishan, CEO
Massive expansions in branch networks and customer bases are being viewed as long-term investments rather than just immediate costs. This setup creates a foundation for future profit growth as these new touchpoints become more efficient.
“The distribution nearly doubled to 9,700 branches. The number of customers nearly doubled to 100 million customers. Our tech investments more than quadrupled to around a billion dollars. The merger with mortgage company HDFC Limited too is an investment for the future.”
— Sashi Jagdishan, CEO
Management clarified that regulatory ratios regarding loans and deposits are no longer a major hurdle for their operations. This removes a key concern for investors who were worried about the bank’s ability to grow its loan book.
“The loan to deposit ratio is not a constraint; the regulator has come out and talked about it. We have demonstrated our ability to gain market share on deposits every year, almost around 30-50 basis points over the last five years. Hence, it is no longer a binding constraint.”
— Sashi Jagdishan, CEO
HDFC Bank has developed an internal AI platform to automate complex tasks and speed up customer service. This technology-first approach is expected to reduce operating costs and improve overall profitability over time.
“But the real story is how we created in-house the unified AI platform, which is going to be the center that stands across the entire organization. It allows us to deploy AI agents quickly without building custom interfaces between systems. The platform brings together enterprise search, document extraction, voice-based agents, and a full AI development lifecycle.”
— Sashi Jagdishan, CEO
Despite global political tensions, management sees continued high demand for loans from sectors like electronics and semiconductors. Sustained corporate demand is a positive sign for the bank’s commercial lending business.
“For the growth drivers, first from the corporate side, you have seen in our release the increase that we have done over the previous year. We do see this sustaining, as there has been demand. Of course, we will have to temper it given the fallout of what we see in the geopolitical area, which hopefully should not be more than a couple of months going into this financial year.”
— Management, Executive Team
While wholesale deposits spiked at the end of the year, the bank is keeping its focus on steady retail money. Maintaining a high percentage of retail deposits makes the bank’s funding source more stable and less prone to sudden withdrawals.
“If you look at the composition between retail and wholesale, there is some level of wholesale deposits that come in the March quarter naturally because of relationships as well as how the corporates manage their balance sheets towards the end of their financial year. You’ll see that the average of the retail versus wholesale is about a percentage point or two different in this quarter; in our earnings stack, you would notice that there is 82% against 84% in retail.”
— Management, Executive Team
Small-ticket deposits now make up nearly half of the bank’s new deposit growth. This shift towards granular retail money reduces the bank’s dependence on expensive or volatile large-scale corporate funds.
“In fact, the less than 3 crore deposits mobilized in 2026 on a net basis has grown almost about 74% over the net incremental deposits for FY 25 on the less than 3 crore bucket. So what constituted 31% of the total net accretion in FY 25 now constitutes 47%. These are very less volatile and very sustainable.”
— Management, Executive Team
Loan rates dropped faster than deposit costs during the recent rate cycle, putting temporary pressure on interest margins. This reminds investors that the bank’s profitability is sensitive to how quickly the central bank adjusts interest rates.
“On the deposit side, the transmission that has happened is only about 50-60 basis points so far. It hasn’t fully offset what the asset pricing move was. Now, due to the geopolitical situation and uncertainty, the rate cycle is currently on pause.”
— Management, Executive Team
Management emphasized that they prioritize Return on Assets (ROA) over other metrics to ensure they aren’t taking excessive risks just to boost growth. This focus on high-quality returns suggests a disciplined approach to capital allocation.
“ROA is what we should focus on. ROE is an intermediate metric. If you take higher risks and bring that into the top line, you may lose it in the credit loss below the ROA line. So, we focus on the returns on assets.”
— Management, Executive Team
The bank has successfully converted half of its home loan customers into regular banking customers, up from about a third previously. This successful integration proves the bank is capturing more value from its large merger.
“36% of the people who had home loans with HDFC had their liabilities with us. Net of attritions and acquisitions, over this journey, this 36% has come as high as 50% within the last 2.5 years. That tells you the strength of the liability franchise.”
— Management, Executive Team
Current account and savings account (CASA) balances from the merger group have grown significantly in just two and a half years. This growth in low-cost deposits helps the bank maintain better profit margins.
“Secondly, the actual CASA balances have grown. At that point in time, we had about 50,000 crores in CASA balances. We have today grown that to 86,000 crores. That’s the growth in 2.5 years in terms of both the numbers and the engagement of the accounts.”
— Management, Executive Team
ICICI Bank | Large Cap | Financial Services
ICICI Bank is a leading private sector bank in India providing a wide range of financial products and services to retail, SME, and corporate customers. With a strong presence across urban and rural areas, the bank offers digital banking solutions, international services, and financial solutions to businesses and government entities.
[Concall]
The bank has largely finished adjusting its balance sheet to the recent cycle of interest rate cuts. Investors should expect more predictable interest income levels in the upcoming quarters.
“Most of the rate cut impacts have moved through the system, though there was a small cut in December. Overall, we expect margins to be stable from here.”
— Management, Executive Leadership Team
Significant growth in rural lending is being driven by a strategic push into secure gold-backed loans. Maintaining provisions for agricultural loans shows a cautious approach to regulatory compliance in the priority sector.
“Higher demand for gold loans and our enhanced machinery in that segment are the primary drivers. On the agricultural priority sector provision, we are still holding those as of March while we work through the portfolio to bring it into conformity with regulatory requirements.”
— Management, Executive Leadership Team
The bank is committed to ‘positive jaws,’ where its revenue grows faster than its operating expenses. This focus on operational efficiency is a key driver for improving the bank’s overall cost-to-income ratio.
“OpEx was largely in line with expectations, though costs related to priority sector compliance and labor code remuneration were higher. Our objective is to keep OpEx growth below top-line growth.”
— Management, Executive Leadership Team
A shift in consumer behavior away from high-interest ‘revolving’ credit card debt is putting pressure on industry margins. However, ICICI Bank believes its credit card business remains fundamentally sound and profitable due to its focus on high-quality spenders.
“The Q4 decline is a function of spends and revolvers. While the decline in revolvers has impacted industry profitability over the last two years, it remains a very profitable business for us.”
— Management, Executive Leadership Team
Despite general industry concerns about liquidity, ICICI Bank maintains a healthy buffer of liquid assets. This comfortable position ensures that the bank can continue lending without being restricted by a shortage of new deposits.
“Our average LCR is very comfortable at about 126% for the quarter. Deposit flows are healthy and more than adequate, so deposit growth will not be a constraint for our loan growth.”
— Management, Executive Leadership Team
Yes Bank | Large Cap | Financial Services
Yes Bank is a full-service commercial bank in India providing a wide range of retail, MSME, and corporate banking solutions. The bank has completed a significant multi-year transformation following its 2020 reconstruction and is now focused on sustainable growth and profitability.
[Concall]
Management is aggressively scaling its retail lending engine to drive growth and improve yields across the total loan book. The rapid pace of retail disbursals suggests the bank is confident in its risk models and its ability to capture market share.
“Retail disbursals in particular have gained significant momentum, registering 41% year-on-year growth in Q4 FY26. We remain focused on balanced and profitable growth across retail, commercial, and wholesale businesses, supported by disciplined risk selection and effective pricing.”
— Vinay M. Tonse, Managing Director and Chief Executive Officer
The bank is guiding for loan growth to accelerate to industry levels of 14-15% after a period of deliberate calibration. This move toward market-matching growth signals that the bank’s rebuilding phase is fully complete and it is ready to compete for volume.
“We believe that momentum should certainly continue and it is now becoming more secular across segments. Retail disbursement growth rates are quite aggressive as we move fast now given our confidence on asset quality and profitability. Net-net, we should certainly aim to grow in line with industry, if not more, which anchors around the 14-15% range.”
— Vinay M. Tonse, Managing Director and Chief Executive Officer
The bank has provided a clear roadmap for the maturity of its low-yielding RIDF assets over the next few fiscal years. This predictable rundown provides investors with high visibility into a guaranteed tailwind for interest income and margin expansion.
“We think that next year the minimum reduction should be about 6,500 crores, and that could go as high as 9,000 crores by the end of March 27. The reduction of RIDF for FY28 and FY29 will be equally split, with some maturities in FY30. The base of the structure starts getting thinner.”
— Niranjan Banodkar, Chief Financial Officer
Management utilized excess recovery gains to create a voluntary buffer of 341 crores, rather than just flowing it all to the bottom line. This conservative approach strengthens the balance sheet against future uncertainties without indicating actual credit stress.
“Our core NPA credit cost is substantially lower quarter-on-quarter. These factors provided buffers to create provisions. We follow conservative provisioning policies, as seen with our PCR remaining above 80% for the last 3 quarters. As part of that philosophy, we reviewed our portfolio and determined that some proactive, prudent provisioning was appropriate.”
— Niranjan Banodkar, Chief Financial Officer
Management remains cautious regarding the ongoing AT1 bond litigation currently awaiting a Supreme Court verdict. While they maintain their legal stance was correct, the final judgment remains a key binary risk factor that investors must monitor.
“We have previously stated that we believe the actions we took were in line with contractual obligations and the allowed process. However, we must respect the court proceedings and wait for the decision. I would refrain from passing a judgment on what we expect.”
— Vinay M. Tonse, Managing Director and Chief Executive Officer
Despite global geopolitical conflicts, management reports that its MSME and corporate portfolios remain resilient with no immediate signs of credit deterioration. This suggests that the bank’s tight underwriting standards implemented post-reconstruction are currently holding up against macro shocks.
“We are proactively monitoring our portfolio. Currently, all our clients, including MSME and larger corporate clients, are managing well and have not shown signs of stress. We will continue to watch this space closely as it could impact inflation and lead to second-order effects.”
— Vinay M. Tonse, Managing Director and Chief Executive Officer
Telecom
Tata Communications | Mid Cap | Telecom
Tata Communications powers the digital economy with next-gen connectivity, cloud, IoT, and cybersecurity services. Its global network and integrated digital solutions simplify complexities for enterprises, enabling new opportunities in the evolving digital landscape.
[Concall]
Digital platforms now constitute over half of data revenue, indicating a significant and successful shift in the company’s business mix towards higher-growth areas.
“Our digital platforms are now, for the first time, contributing more than 50% of our data revenue.”
— Ganesh Lakshmi Narayanan, MD and CEO designate
Customer engagements reveal a shift from basic connectivity needs to a demand for advanced AI-driven solutions, such as AI agents for customer service.
“The conversations with my customers are very encouraging because they are not just talking about connectivity. For example, I met an insurance customer, and the conversation was about how we can build AI agents that can operate as relationship managers for their field service agents.”
— Ganesh Lakshmi Narayanan, MD and CEO designate
The company is actively monitoring geopolitical risks, noting some demand-side postponements but no significant impact on costs currently.
“Let me address the geopolitical situation first... On the demand side, we are seeing some risks; some events are being postponed or canceled... On the cost side, we are tracking energy costs and chip-related costs. Currently, we do not see a big issue with costs. We are assessing this daily and if there is anything material, we will report it.”
— Ganesh Lakshmi Narayanan, MD and CEO designate
Management quantified the opportunity from AI-led data center expansion, especially in India.
“Data center to data center connectivity… in India… we expect this to be at least a billion-dollar opportunity by 2030… We expect a four-fold increase in data center bandwidth needs.”
— Management
The company is actively pursuing an IPO of STT GDC’s Indian asset as the preferred method to monetize its stake and achieve optimal value discovery.
“STT GDC has already issued a press statement saying they are looking for a potential IPO for their Indian asset... if we get the right value, an IPO would provide the right value discovery for our stake. We have engaged with STT and the new buyer to secure our monetization rights, with an IPO being the lead option.”
— Management, CFO designate
The company leverages its unified infrastructure strengths in security, connectivity, and voice for AI solutions, aiming for ROI from its Commotion platform and open to AI partnerships.
“Our building blocks allow us to capitalize on the unified infrastructure required. It is not just about the agent; the agent needs security, connectivity to enterprise data, and voice infrastructure. Those are our strengths. The Commotion investment gives us an opportunity to participate in generating real ROI. We will also look to partner with other AI companies.”
— Ganesh Lakshmi Narayanan, MD and CEO designate
Tata Comm is winning bundled deals combining multiple capabilities, increasing deal sizes and stickiness.
“It is a true digital fabric win which included both our network fabric and the interaction fabric… enabling GCCs with a secure, cloud-ready, globally connected environment.”
— Ganesh Lakshminarayanan, MD & CEO
Management framed long-term growth around two large opportunities: backend digitization in emerging markets and AI-driven enterprise transformation.
“There are two big trends shaping the future… the back-end is still yet to be digitized… The second trend… is the AI-led transformation… To power enterprise AI at scale… customers will need a unified infrastructure.”
— Ganesh Lakshminarayanan, MD & CEO
Capital Goods
Mahindra EPC Irrigation | Nano Cap | Engineering & Capital Goods
Mahindra EPC Irrigation Limited was incorporated in 1981 having its registered office in Nashik, India. It is engaged in the business of Micro Irrigation Systems such as Drip and Sprinklers, Agricultural Pumps, Greenhouses and Landscape Products.
[Concall]
Cash flow constraints are almost exclusively driven by delayed payments from states where the company is most active. Management is trading off higher receivables for the sake of securing business in high-margin geographic areas.
“The pressure on cash flow in this industry is almost entirely due to receivables. While we have managed working capital through tight inventory controls, receivables build-up has happened in key states where margins are good and there is strong demand. We are currently in a period where there has been a build-up of pendency.”
— Ramesh Ramachandran, Managing Director
The company is actively building the operational expertise required to bid for significantly larger irrigation projects. Successfully scaling into the 50-100 crore project tier could drastically change the company’s revenue profile and market position.
“We have been taking projects of 5-20 crores. Any plans to take larger projects of 50-100 crores? We are preparing for a step-up from our current size. It requires us to align certain internal capabilities and experience, which we are building on.”
— Ramesh Ramachandran, Managing Director
Management believes that increasing costs and weather volatility are pushing farmers to view irrigation technology as a necessity for survival. This shift from a discretionary purchase to a core productivity investment supports long-term demand growth.
“Rising cultivation costs and climate-related risks are increasing the relevance of solutions that improve input efficiency and productivity. Micro-irrigation, by enabling savings in water, fertilizer, energy, and labor, while at the same time improving yields, continues to be viewed as a value-enhancing investment by farmers rather than a mere capital expense.”
— Ramesh Ramachandran, Managing Director
India’s impending water scarcity will force a reduction in agricultural water consumption to support industrial and urban growth. This transition creates a massive regulatory and economic tailwind for water-efficient irrigation solutions.
“As per current estimates, per capita water availability in India is expected to drop from 1,545 cubic meters in 2011 to 1,140 cubic meters by 2050. It should then classify India as a potentially water-scarce nation. Additionally, India is likely to see faster growth rates in the secondary and tertiary sectors... a larger share of water available in India needs to be provided to these sectors.”
— Ramesh Ramachandran, Managing Director
Current market penetration remains remarkably low, with over 80% of identified potential land yet to adopt micro-irrigation. The total addressable market could expand even further if surface water usage is successfully integrated into irrigation networks.
“With this background, as we look at the potential and the existing penetration of micro-irrigation in India, we see only about 17-18% penetration of the total identified current potential, which is 72 million hectares. This estimated potential is based mostly on groundwater availability and some portion of surface water. If most of the surface water is also assumed to be available for agriculture, then the potential for micro-irrigation will just double from the 72 million hectares.”
— Ramesh Ramachandran, Managing Director
The company significantly outperformed the broader industry growth rate despite severe cost and funding headwinds. This suggests effective execution and market share gains even in a volatile operating environment.
“In what we estimate as an industry that may register a growth of 6-7% versus FY25, your company registered a growth of 14.8% with 315.8 crores in revenue versus the FY25 revenue of 275.1 crores. This growth was despite the challenges faced in Q4 FY26, a quarter which saw the highest ever raw material prices accompanied by the challenge of states not releasing funds as planned.”
— Ramesh Ramachandran, Managing Director
While the central government has improved its funding procedures, delays at the state level have caused industry-wide receivable balances to rise. This highlight the ongoing working capital risks associated with government-dependent revenue streams.
“Despite a smoother process of the Mother Sanction released by the Government of India, key states took longer to release the state mandatory funds and the state top-up funds. This led to a pile-up of receivables for the industry in FY26, which significantly increased over the FY25 opening status.”
— Ramesh Ramachandran, Managing Director
Management is responding to raw material price volatility by adjusting their product mix and timing inventory purchases more carefully. These tactical moves are essential for protecting margins when raw material costs spike unexpectedly.
“We definitely see volatility in raw material prices as one of the risks for FY27. There are ways we are looking to mitigate the risk by way of our company strategy. This includes focusing on specific products within our mix, selectively looking at price increases in certain markets, and being careful about when we procure raw material.”
— Ramesh Ramachandran, Managing Director
Transformers & Rectifiers (India) Ltd. | Small Cap | Heavy Electrical Equipment
Transformers & Rectifiers (India) Ltd. is a manufacturer of high-quality power, distribution, and specialty transformers for global markets. The company is strategically focused on backward integration and entering the high-barrier High Voltage Direct Current (HVDC) segment.
[Concall]
Management is actively investing in making their own components to reduce reliance on external suppliers and avoid disruptions. This strategic move is expected to improve their internal operations and protect them from sudden market price changes.
“The backward integration journey is well on course. Site preparation is progressing well and the plant and machinery orders for the long-lead items have already been placed. This backward integration, along with our technology, will enhance our in-house capabilities, reduce our dependency on external sources, and improve our supply chain resilience.”
— Satyen Mamtora, Managing Director and CEO
Management highlights that the HVDC market is an oligopoly with very few global competitors. By becoming the sole Indian entrant, the company is positioning itself to capture significant market share with high pricing power.
“There are only four major players in HVDC: Hitachi Energy, Siemens, GE, and I think TBEA. Since TBEA is not able to compete with us in other tenders, there are only three major competitors. We are the only Indian player entering the HVDC space.”
— Satyen Mamtora, Managing Director and CEO
The company is capping its order book to about two years’ worth of work to avoid being locked into low prices if raw material costs rise. This disciplined approach protects the company from the long-term pricing risks common in the heavy engineering sector.
“We are deliberately not taking orders currently because, as we previously mentioned, we want to limit our exposure to no more than 18 to 24 months. We want to be very selective in which orders we take in terms of delivery and pricing. As long as we are booked for the next 24 months, we do not want to take any further orders.”
— Satyen Mamtora, Managing Director and CEO
The company is nearly doubling its production capacity to meet strong demand for power infrastructure. Investors should watch for the successful commissioning of these plants as the primary driver for future revenue growth.
“Our Changodar facility will be up and running from Q2, and after that, we will take up the Moraiya plant expansion. After these two plants, the capacity would increase from 40,000 MVA to 75,000 MVA. The Changodar plant will start in H2.”
— Satyen Mamtora, Managing Director and CEO
Internal component production will soon cover all the company’s requirements, with potential to sell excess to competitors. This shifts the company’s business model toward becoming a critical component supplier, diversifying its revenue streams.
“The current plan is to cater to 100% of our needs. Going forward, with further expansion, we will also look at third-party sales. We will basically become CTC suppliers to other transformer manufacturers as well.”
— Satyen Mamtora, Managing Director and CEO
The order book has been ‘cleaned up’ of older, less profitable contracts that were weighing down earnings. This implies that the current multi-billion rupee backlog is composed of high-quality, profitable work that should improve overall financial performance.
“We have already executed the bulk of the older orders. For the last six months, we have been critically analyzing every order we take. None of the orders in the current 5,000 crore order book have issues in terms of margins or cost pass-through.”
— Satyen Mamtora, Managing Director and CEO
Retail
Havells India Limited | Large Cap | Fast Moving Electrical Goods
Havells India is a leading Fast Moving Electrical Goods (FMEG) company with a wide range of products including switchgear, cables, lighting, and fans. The company also has a significant presence in the consumer appliance market through its Lloyd brand and is expanding into the renewable energy sector.
[Concall]
The company is strategically aligning with solar module manufacturers to scale its renewable energy business. This move signals a long-term commitment to diversifying its product portfolio into high-growth green energy sectors.
“Our renewable energy initiatives continue to scale. As you are aware, during the period we have recently divested investments. This investment allows us to leverage Goldi Solar module manufacturing capabilities to expand our solar portfolio.”
— Anil Rai Gupta, Chairman and Managing Director
Industrial demand is currently the primary driver for the cables business as the residential wire segment faces a high base and dealer inventory adjustments. This highlights the company’s reliance on infrastructure and industrial recovery to sustain its growth momentum.
“The cable and industrial cable segment has grown much faster than the domestic wire segment. During the quarter, there was some destocking in domestic wires and a very high base last year. If you remember, Q4 FY25 saw a major buildup and stocking.”
— Anil Rai Gupta, Chairman and Managing Director
Profitability is being managed through phased price hikes triggered by both regulatory changes and volatile raw material costs. These adjustments are critical for maintaining margins as global supply chain disruptions continue to impact production costs.
“Price increases actually happened in two stages. The first increase happened due to the energy efficiency ratings change during the quarter. And then, of course, there are raw material changes which are happening.”
— Anil Rai Gupta, Chairman and Managing Director
Cooling product sales were delayed by a slow start to summer, but demand is now picking up in major regional markets. Normalized channel inventory by the end of the month suggests that primary sales to dealers will likely improve in the upcoming quarter.
“The first half of April was also slow. So there were some channel inventories, but now it is evening out. South and west have started a good summer and I think it is now coming in the north as well. So hopefully by the end of this month, there will be normalized inventories at the channel.”
— Anil Rai Gupta, Chairman and Managing Director
The company’s cable plants are running near full capacity, necessitating a second phase of expansion to meet demand. Timely execution of this new capacity is vital for capturing further growth in the industrial and infrastructure sectors.
“Whatever capacities were added, we have still been operating at high capacity utilization. More capacities will come up during the year. Hopefully, by the end of this year or early in Q1 next year, we will have the entire capacity we planned for.”
— Anil Rai Gupta, Chairman and Managing Director
Havells is committing 800 crores this year to expand manufacturing, while also pivoting toward long-term R&D investments. The pause in new capex for Lloyd indicates a shift in focus toward sweating existing assets and improving profitability in that segment.
“A significant amount of that is happening in this financial year, around 800 crores. The rest is a big investment going into a new R&D center, which will happen over the next 2 to 2.5 years. There is no major new capex in the Lloyd segment.”
— Anil Rai Gupta, Chairman and Managing Director
Automotive
SML Mahindra Limited | Small Cap | Commercial Vehicles
SML Mahindra is an Indian commercial vehicle manufacturer that produces a wide range of trucks and buses for cargo and passenger transport. Following its acquisition by the Mahindra Group, the company is focused on scaling its market share through technological integration and shared distribution networks.
[Concall]
Mahindra’s acquisition of a majority stake in SML Isuzu has triggered immediate integration efforts. This control allows Mahindra to drive strategic changes and operational improvements across the combined entity.
“On August 1, we completed the transaction and acquired a 58.96% controlling stake in SML Isuzu. The same day, the Board of Directors and the key leadership of SML was reconstituted. We immediately kicked off synergy and integration projects, which I will discuss briefly and update you on the key developments.”
— Vinod Sahay, Executive Chairman, SML Mahindra
SML is leveraging Mahindra’s scale and research capabilities to lower the costs of developing advanced features like ADAS. These R&D synergies directly improve margins and speed up product time-to-market.
“For example, there is a new ADAS (Advanced Driver Assistance Systems) regulation. This is a combined project for both companies, which has led to significant savings in both component pricing and a substantial reduction in development costs for SML. Sourcing synergies have kicked in, and SML will see the benefit in coming years.”
— Vinod Sahay, Executive Chairman, SML Mahindra
The company will maintain both brands separately to avoid cannibalization and protect existing dealer investments. This cautious approach ensures they retain customer loyalty while maximizing total market coverage.
“Regarding brand strategy, we have marked this yellow because anything facing customers, partners, or employees requires more time and thought. Both brands have their own strengths and stand for different things in the market; they mostly do not cannibalize each other. They have independent networks and are continuing as such.”
— Vinod Sahay, Executive Chairman, SML Mahindra
A significant replacement cycle in the cargo segment is driving volumes following regulatory reforms. This structural demand provides a favorable tailwind for sales growth in the coming quarters.
“Regarding cargo, the industry has huge pent-up demand from a replacement cycle and fleet expansion post-GST reform. We have clear action plans for various scenarios depending on how things evolve.”
— Vinod Sahay, Executive Chairman, SML Mahindra
The addressable market for commercial vehicles is vast and closely tied to India’s economic expansion. This macro-alignment suggests a durable long-term growth trajectory for the business.
“The long-term outlook for the industry is very positive as it is directly linked to India’s GDP growth. India is one of the four largest CV markets globally. The industry revenue pool for the 3.5-ton-plus segment where we play was 1.25 lakh crores last year.”
— Vinod Sahay, Executive Chairman, SML Mahindra
The upcoming launch of an electric bus marks the company’s entry into a high-growth, green mobility segment. Focusing on commercial viability for tenders indicates a disciplined approach to capital allocation in EVs.
“Our electric bus is under development, and we will be launching it this financial year. Post-launch, we will evaluate every tender on its commercial viability and return profile.”
— Vinod Sahay, Executive Chairman, SML Mahindra
TV Interviews
HCL Technologies on its Q4 Results
HCL Technologies is a leading Indian IT services company providing software and digital solutions to global enterprises. The company reported a softer-than-expected Q4, impacted by delays in deal closures and a slowdown in discretionary spending. Management indicated a moderate near-term outlook, with client-specific issues weighing on performance, even as the company focuses on improving deal quality and sustaining margins.
The company experienced a sudden drop in software procurement and reduced client spending on non-essential projects at the end of the quarter. This unexpected volatility in the telecom sector directly caused the firm to miss its internal performance targets.
“Specifically talking about the last quarter in March, we saw a slowdown in procurement decisions in the software business, which largely contributed to the lower performance than what we expected, and in services, we had some slowdown in discretionary spend, especially towards the end of the quarter. The slowdown in discretionary spend was restricted to the telecom sector, or you saw it in retail and manufacturing.”
— C Vijayakumar, CEO & Managing Director
Management clarified that recent project delays are linked to specific client decisions rather than a broad industry-wide collapse in demand. They emphasised that their primary market in North America continues to show healthy demand despite some softness in Europe.
“I would not do a broad brush of the sector itself. Specific clients had certain programs that they had deprioritised, and I talked about two situations in telecom and two SAP programs. North America overall, as a market, and whatever we are seeing remains quite robust.”
— C Vijayakumar, CEO & Managing Director
The company has set a lower growth target for the next fiscal year as AI-driven automation begins to reduce the cost of traditional service contracts. This expected deflation suggests that while efficiency is rising, it is currently putting pressure on overall revenue growth.
“In FY27, the 1.5 to 4.5% guidance midpoint is at 3%. So this is really 80 basis points lower than last year’s organic growth, and we did call out that AI will create some deflation in the existing services, which we said would be 2 to 3%.”
— C Vijayakumar, CEO & Managing Director
The company is prioritising long-term profitability and strategic focus over high-volume, low-margin contracts. By walking away from unattractive billion-dollar deals, management is signalling a commitment to maintaining healthy margins and investing in future technologies.
“I think what I’m very confident of is we have a growth model, we have focus on all the right areas, and we are less concerned about the traditional areas. That’s where I did call out that we walked away from more than a billion-dollar kind of booking because that did not make sense. We would rather spend the management team’s bandwidth and energy on newer areas which are going to create a lot more cascading positive impact.”
— C Vijayakumar, CEO & Managing Director
The company has increased its margin guidance due to internal efficiency gains and higher employee utilisation rates. Programs like Project Ascent are successfully driving structural cost savings that help offset wage inflation.
“We do see some scope in utilisation. We can possibly increase it further and get the benefit. That’s why we felt comfortable with 17.5 to 18.5%, and Project Ascent is working well for us. Last year, it gave us 80 basis point benefits, and we expect similar benefits next year as well.”
— Shiv Walia, Chief Financial Officer
Greenpanel Industries on Price Hikes
Greenpanel Industries is a leading manufacturer of MDF and wood panel products in India. The company has taken multiple price hikes to offset sharp inflation in raw material costs, particularly chemicals, while maintaining stable margins. Despite export disruptions due to Middle East tensions, domestic demand remains steady, with management continuing to focus on volume growth and market share gains amid a highly volatile environment.
The company has implemented total price hikes of 15% to offset massive spikes in raw material costs, indicating a clear focus on protecting margins amid inflation.
“The first one was 5%. On top of that, there is another 10% which has been implemented earlier this fiscal. So this is largely to counter the hyperinflation that we’ve seen on our raw materials.”
— Himanshu Jindal, Chief Financial Officer
Key chemical inputs, which form a significant portion of raw material costs, have seen sharp inflation due to geopolitical disruptions.
“Chemicals are largely under three heads, which are resins, dyes and wax, and we’ve seen the prices of the underlying elements, whether it’s methanol, phenol, melamine or wax, going up by anything between 50% to doubling or tripling as well in a short period post the onset of the war in the Middle East.”
— Himanshu Jindal, Chief Financial Officer.
Management believes current price hikes are sufficient to protect margins as input costs begin to soften.
“Whatever price increases that we’ve taken are sufficient at this point in time, but things are changing every single day. There is a bit of softening in certain elements already, so we’ll see. At this point in time, on chemicals, we are protected, timber is largely stable, so I don’t think there is a major impact on margins at this point in time.”
— Himanshu Jindal, Chief Financial Officer.
Exports to the Middle East, a key market, have been severely impacted due to geopolitical tensions.
“March, we did zero to the Middle East for obvious reasons. Now, how much would we be able to do in April, May, and June? We’ll have to see.”
— Himanshu Jindal, Chief Financial Officer.
Domestic demand continues to remain strong even after significant price increases, indicating healthy market absorption.
“No, not really. We implemented the 5% increase. Did it make sense? Yes, it made sense. Post the 10% hike coming in, did we get orders? We are getting orders.”
— Himanshu Jindal, Chief Financial Officer
Pearl Global Industries on US Sourcing Shift & Tariff Mechanics
Pearl Global Industries is a leading multinational apparel manufacturer providing end-to-end supply chain solutions to global retailers. The company operates diverse manufacturing facilities across India, Bangladesh, and Vietnam to serve major international brands in the US and Europe.
Large US retailers like Walmart are increasingly looking to India as a primary sourcing hub for garments. This shift suggests a significant long-term growth opportunity for Indian exporters to gain market share on global retail shelves.
“See, like India, in terms of competitiveness, as yet in that particular sector is just moving in. So Walmart has started investing and sourcing out of uh India, and they’re ramping it up. So you will see more and more of Indian goods in Walmart.”
— Pallab Banerjee, MD & Group President
Entering elite retail channels like Costco requires long-term planning and high manufacturing standards that India is just starting to meet. The company is working to match the integrated ecosystems of rival Asian manufacturing hubs to secure these high-volume contracts.
“Costco does planning of a very very long term, and they have a particular way of working. So it’s going to happen, but I think we are just I think entering into that uh global competitiveness of manufacturing. We have the other Asian tigers who have been uh there for some time, and uh they have created a very strong ecosystem to be in these stores.”
— Pallab Banerjee, MD & Group President
Most Indian garment exports use a shipping model where the US buyer, rather than the supplier, pays the import duties. This means that any future refunds on US tariffs will mostly benefit the retail customers’ balance sheets rather than the company’s own profits.
“If we are doing landed duty paid kind of shipments some of the vendors do India there are very few like you know when you’re talking about all these big suppliers to Walmart and Costos from the far east or from China they do a lot of their landed uh goods duty paid and all but otherwise most of the Indian manufacturers who are supplying to customers they do FOB shipment that means freight on road from here from the country of origin so the majority chunk of these tariff if if it is uh now rolled back and if there’s a refund that happens it will go to these retailers and the brands.”
— Pallab Banerjee, MD & Group President
MM Forgings on Demand Recovery
MM Forgings is an auto component manufacturer catering largely to global OEMs, with a strong exposure to the US market. Management highlighted that demand has picked up meaningfully in both the US and domestic markets, although inflation and fuel costs remain key variables to watch. While volumes are expected to improve, the overall mix may shift as the base expands, indicating steady but measured growth ahead.
[Reference - Time Stamp - 06:04 Minutes]
Management reports strong demand in both the US and domestic markets, indicating healthy order flow across geographies.
“Demand is pretty strong from the US as of now, and also within the country. So the US appears to be chugging along.”
— Vidyashankar Krishnan, Chairman & MD.
While demand is currently strong, management remains cautious about the impact of fuel prices and inflation on future consumption and policy.
“However, higher gasoline rates and mild inflation arising out of that, the impact of all these will be known over a period of time, which is why I think even the FED is on wait and watch.”
— Vidyashankar Krishnan, Chairman & MD
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 Kashish, Meher, Shahid & Vignesh.
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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This is very good and useful. Thankyou