The Chatter: Jio Financial, Wipro, Polycab, Piramal & More
Q1FY27 | Edition #69
Welcome to the 69th 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 11 companies across 5 industries.
Financial Services
Jio Financial Services Limited
Piramal Finance Limited
ICICI Lombard General Insurance Company Limited
360 ONE WAM Limited
Angel One Limited
5paisa Capital Limited
Muthoot Capital Services Limited
Software Services
Wipro Limited
Auto Ancillary
CEAT Limited
Engineering & Capital Goods
Polycab India Limited
Real Estate
WeWork India Management Limited
Financial Services
Jio Financial Services Limited | Large Cap | Financial Services
Jio Financial Services is a systemic financial services player in India providing a comprehensive borrow, invest, transact, and protect ecosystem. The company leverages a massive capital base and an AI-native technology stack to offer hyper-personalised financial products across lending, insurance, and asset management.
[Concall]
The company is using automated AI systems to handle growth without a massive increase in employee headcount. This non-linear cost structure means that profits could grow much faster than expenses over time.
“At JFS, our network of AI agents allows us to scale our transaction volumes, our loan books, and our customer base exponentially while keeping our fixed cost structure remarkably flat. This technology architecture completely optimizes our unit economics, protects our margin, and guarantees a friction-free experience for our users.”
— Hitesh Sethia, Managing Director and Chief Executive Officer
The lending portfolio is split fairly evenly between secured real estate loans and corporate/SME lending. This balanced mix helps protect the company from a downturn in any single sector of the economy.
“Our AUM mix remains highly resilient and balanced against macroeconomic volatility. Mortgages, home loans, and LAP comprise 45.4%; corporate and SME lending stands at 44.2%; and retail loan against shares accounts for 10.4%. Quarterly disbursals grew by 173% year-on-year to over 11,000 crores, completely driven by organic market transactions.”
— Hitesh Sethia, Managing Director and Chief Executive Officer
The company is able to borrow money at lower rates than most competitors, which is a major competitive advantage in lending. Low funding costs allow for better profit margins or the ability to offer more competitive rates to borrowers.
“Our average cost of borrowing trends at 7.07%, which remains the lowest in the industry, reflecting the credit market’s high confidence in our structural underwriting strength and corporate governance. We have carefully diversified our funding base across term loans, commercial papers, and market instruments.”
— Hitesh Sethia, Managing Director and Chief Executive Officer
The payment solutions business is becoming more profitable as it processes higher volumes and attracts merchants from outside the Reliance group. Growing the share of external merchants proves the platform’s competitiveness and independent viability.
“Our net processing margin expanded 12 basis points in Q1 FY27, from 9 basis points in Q1 FY26. Crucially, this growth is supported by an increase in TPV from merchants outside our immediate ecosystem. Margin expansion, combined with operating leverage, has driven an operational turnaround for JPSL.”
— Kashinath Hariharan, Managing Director and Chief Executive Officer of Jio Payment Solutions Limited
The asset management joint venture with BlackRock is rapidly gaining scale by targeting first-time investors. This focus on new-to-market users allows the company to grow the overall market rather than just fighting for existing customers.
“Closing AUM increased 21% sequentially to 18,412 crores with quarterly average AUM expanding 8% to 17,979 crores. We now serve 1.2 million retail investors and, true to our mission of expanding access to new-age financial services for the masses, 18.5% of investors are completely new to mutual funds.”
— Hitesh Sethia, Managing Director and Chief Executive Officer
The new reinsurance business has quickly secured a significant role in the Indian market due to its unique licensing status. This gives the company a first-mover advantage in a sector where most players are foreign entities.
“Allianz Jio Reinsurance completed its first full quarter of operations with 266 crores on underwriting premium. As India’s third licensed domestic reinsurer, we command priority market access, which has allowed us to secure lead reinsurance status from majority treaty programs across top-tier private insurers.”
— Hitesh Sethia, Managing Director and Chief Executive Officer
The company significantly improved the returns on its massive cash reserves by repositioning its investment portfolio. This higher yield provides a strong earnings floor while the core operating businesses continue to mature.
“Growth in our treasury income was driven by strategic portfolio reallocations done during the quarter, coupled with tailwinds from RBI policy actions, which led to a sequential increase of 109 basis points in the treasury yields.”
— Annapurna Venkataraman, Group Chief Financial Officer
Piramal Finance Limited | Mid Cap | NBFC
Piramal Finance Limited is a diversified non-banking financial company (NBFC) offering retail and wholesale lending solutions across home loans, loans against property, MSME finance, used vehicle finance, construction finance, and emerging products such as gold loans. The company is focused on expanding its retail lending franchise, improving asset quality, and delivering profitable growth while maintaining a prudent approach to risk and capital allocation
Management is witnessing stronger-than-expected demand across its retail businesses, leading to broad-based growth. Nearly the entire loan book now comprises growth businesses, reflecting the company’s successful transformation into a retail-focused lender.
“We are seeing a strong demand environment, and that’s resulted in a solid 25% growth at the consolidated level for our business and a 32% growth in our growth businesses, which now constitute 98% of our AUM. That part is growing at 32%.”
— Jairam Sridharan, Managing Director
The company is building its gold loan franchise through a measured branch expansion strategy. While the opportunity is significant, management is prioritising prudent growth over chasing volumes.
“Gold was a business we entered three months ago. June was actually our first full month. We’ve opened about 67 branches in the first quarter and intend to end the year with about 200 branches.”
— Jairam Sridharan, Managing Director
Despite the attractive growth opportunity in gold loans, management intends to remain conservative given the volatility in gold prices. The focus will be on building a sustainable franchise rather than maximising AUM growth.
“Gold prices have moderated from their peak. However, lending against gold has become the second-largest retail lending product after home loans. Our approach will remain conservative and measured. While we are expanding branches, business volumes will not be an area where we press the throttle too much just yet.”
— Jairam Sridharan, Managing Director
Asset quality remained resilient during a quarter that is typically seasonally weak for lenders. Management believes the overall operating environment is healthier than anticipated at the beginning of the year.
“On asset quality, the first quarter surprised positively. We usually see some seasonality in Q1, but this year’s numbers were quite strong across the board. I’m not seeing any particular pockets of anxiety.”
— Jairam Sridharan, Managing Director
The legacy wholesale portfolio continues to shrink rapidly and is expected to become immaterial by the end of the financial year. This marks another step in the company’s transition towards a predominantly retail lending business.
“The legacy book has now fallen below 2% of our overall AUM and should fall to around 1–1.5% by the end of the year. At that point, it will become too small to report separately.”
— Jairam Sridharan, Managing Director
Management expects the legacy portfolio to stop weighing on profitability, with the potential to become earnings-accretive starting next year.
“I don’t believe there will be any incremental P&L impact from this portfolio. If anything, things should turn positive next year.”
— Jairam Sridharan, Managing Director
The recently announced capital raise is intended solely to support organic expansion. Management ruled out acquisitions, reinforcing its focus on scaling the existing retail lending platform.
“No. Organic growth is what this capital raise is about, and getting just as much as we need.”
— Jairam Sridharan, Managing Director
ICICI Lombard General Insurance Company Limited | Mid Cap | General Insurance
ICICI Lombard General Insurance is India’s largest private-sector general insurer, offering a diversified portfolio of products across motor, health, fire, marine, crop, travel, and commercial insurance. The company focuses on profitable growth through disciplined underwriting, prudent reserving, strong distribution, and technology-led claims management.
Management believes the insurance industry continues to benefit from a strong macroeconomic environment. The company’s strategy remains focused on delivering profitable growth rather than pursuing scale at the expense of underwriting discipline.
“When you look at the overall market perspective, the demand momentum is very, very strong and is reflected in most of the key economic indicators. In that backdrop, for ICICI Lombard, the thought process in terms of driving profitable growth as a theme continues.”
— Gopal Balachandran, Chief Financial Officer
A recent Supreme Court judgment has increased the expected cost of motor third-party claims across the industry. In line with its conservative reserving philosophy, the company has fully recognized the impact in the first quarter itself.
“The recent judgment of the Hon’ble Supreme Court of India impacted the overall motor third-party loss ratios in the range of 12% to 15%. In line with our prudent and conservative reserving approach, we have done our own assessment of the impact of this judgment and have taken the necessary charge in the Q1 numbers.”
— Gopal Balachandran, Chief Financial Officer
The Supreme Court judgment resulted in an additional ₹165 crore charge during the quarter, increasing the combined ratio by nearly 2.8%. Management believes the industry now has a strong case for revising motor third-party insurance pricing.
“That impact alone is about ₹165 crores and the combined ratio has been influenced by almost 2.8%. This is clearly an industry event and the need for a revision in motor third-party pricing now looks pretty much imminent.”
— Gopal Balachandran, Chief Financial Officer
Large fire claims affected quarterly profitability, but excluding these exceptional events, the company’s underwriting performance remained stable.
“During this quarter, we had a couple of large fire losses that impacted our combined ratio by roughly about 1%. If you take both of these off, the combined ratio stood pretty much flat.”
— Gopal Balachandran, Chief Financial Officer
Management believes pricing discipline is gradually returning to the fire insurance market after a prolonged period of irrational competition. Early signs from June indicate that pricing conditions are beginning to normalise.
“The extent of degrowth has already started getting calibrated. Against the industry’s 27% degrowth in Q1, June saw it improve to about 22%. For us, Q1 degrowth of 32% improved to 18% in June. These segments cannot continue to exhibit price irrationalization for long periods.”
— Gopal Balachandran, Chief Financial Officer
Retail health insurance continues to perform within the company’s target profitability range, reflecting disciplined underwriting and the benefits of investments made in the portfolio over the past few years.
“Our retail health indemnity portfolio delivered a loss ratio of about 66% during the quarter, which is within our target range of 65% to 70%. This is better than Q1 of last year, when the loss ratio was around 74%.”
— Gopal Balachandran, Chief Financial Officer
Despite industry-wide pressure on motor insurance profitability, ICICI Lombard continues to significantly outperform peers through disciplined underwriting.
“Industry combined ratios in motor increased from 123% last year to 128% this year, whereas for us it broadly remained within the range of 105% to 106%. The gap between ICICI Lombard and the industry has further widened.”
— Gopal Balachandran, Chief Financial Officer
Management believes several factors could improve motor insurance profitability over the coming quarters, including tariff revisions, legal developments, and operational efficiencies in claims management.
“Any motor third-party price revision is a great positive. The General Insurance Council has filed a revision petition on the Supreme Court judgment. Improving claim settlement efficiencies and understanding the full impact of the judgment over the next few quarters will also be important variables.”
— Gopal Balachandran, Chief Financial Officer
360 ONE WAM Ltd. | Large Cap | Financial Services
360 ONE WAM is a leading Indian wealth and asset management firm specializing in the ultra-high-net-worth segment. The company provides integrated advisory, distribution, and alternative investment solutions through a full-stack platform.
[Concall]
Management highlights that the wealth market for India’s richest families is growing faster than the overall economy. This structural trend supports long-term growth for the firm as it focuses on capturing a larger share of client assets.
“Acceptance of professional wealth management continues to rise, and wealth creation at the top of the pyramid is outpacing the broader economy. For a full-stack platform spanning across wealth and asset management, this is a long and durable runway, and our strategy remains centered on being the manager of choice for our clients’ core portfolios.”
— Sanjay Wadhwa, CFO
The partnership with UBS is expected to bring in international capital for the company’s investment strategies this year. This collaboration enhances the firm’s global reach and strengthens its integrated business model.
“UBS’s global distribution is also expected to open up offshore capital access for our alternates and listed strategies during this year. Taken together, these businesses reinforce the 360 ONE flywheel as a single integrated platform across wealth and asset management, in which each business strengthens the other and deepens our relationship with the client.”
— Sanjay Wadhwa, CFO
The firm is pivoting away from the traditional PMS structure toward more efficient pooled investment vehicles like AIFs. This strategic shift allows the company to offer the same investment strategies while utilizing better-suited regulatory platforms.
“PMS as a structure is a little challenged because purely versus doing the same product on the AIF side, the mutual fund side, or even on the SIF side, those three structurally present slightly better platforms to launch the same product. While the strategy is alive and the same set of clients will come in, most likely it will find its way into these three pooled structures as opposed to coming into a PMS.”
— Karan Bhagat, MD and CEO
Management is targeting a significant reduction in the cost-to-income ratio as new business initiatives reach profitability. Investors should look for improved margins as operating leverage kicks in across the platform by the end of the fiscal year.
“ET Money together with the HNI piece should definitely help us retract the cost-to-income by approximately 100-150 basis points. A little bit of operating leverage both on the alternate side of the business as well as on the wealth management side should hopefully take us on a Q4 basis from 51% to approximately 49-49.5% and potentially for the full year approximately 100-150 basis points lower from where we are today.”
— Karan Bhagat, MD and CEO
The private credit market in India is seeing high demand from domestic institutions looking for higher yields over long periods. Management views this as a high-growth area that could rival the expansion of the private equity industry.
“Overall, the private credit industry is at a very nascent stage in our country and I would not be surprised if it continues to grow as fast as the private equity industry itself. Secondly, we have seen a lot of institutional demand from insurance companies and other domestic institutions to participate on the private credit side given the long tenure of the money they manage.”
— Karan Bhagat, MD and CEO
The company has set a target of moving over half a billion dollars in assets through its mutual referral program with UBS. This cross-border collaboration is a primary metric for evaluating the success of their global partnership.
“UBS potentially launching some of our funds and we launching some of UBS’s funds in India, while simultaneously referring clients to each other. We have a fairly conservative AUM target in the region of $500-600 million to get exchanged between both organizations over a period of time. That is really what we want to use as a measure of collaboration.”
— Karan Bhagat, MD and CEO
Angel One Limited | Mid Cap | Stockbroking & Financial Services
Angel One is a prominent Indian technology-led financial services firm primarily focused on retail stockbroking and investment services. The company is rapidly diversifying into wealth management, credit distribution, and asset management through its AI-powered digital platform.
[Concall]
Angel One is successfully lowering its dependence on stock trading fees by growing other income sources like lending and wealth management. This change makes the company’s total earnings more stable and less prone to market volatility.
“Importantly, our revenue profile continues to become increasingly diversified. While our core trading platform remains our largest acquisition engine, contributing close to 60% of our gross revenues, the remaining 40% now comes from complementary businesses such as client funding, distribution, depository, wealth, and asset management businesses. This diversification is steadily improving the resilience and quality of our earnings profile.”
— Vineet Agrawal, Group CFO
Despite a recent slowdown in loan disbursements, management is focused on fixing technical hurdles and improving the experience for borrowers. They maintain that the massive base of existing customers provides a huge untapped opportunity for future credit growth.
“We, however, continue to work with our lending partners to improve conversion and strengthen the customer journey, and are very confident that the actions we are taking put us in a much stronger position to improve growth going forward. Having said that, our long-term thesis remains completely unchanged. We continue to see a very large opportunity in credit within the Angel ecosystem itself.”
— Saurabh, Management Leadership
The wealth management division is prioritizing steady, recurring fee income over one-off sales commissions. This approach aims to build a more predictable and high-quality business model for the long run.
“As a team, we are focus on building a high-quality AUM-led business. That is why one of the key focuses we have is to have ARR-led AUM because, in this kind of market, it is easy to give into the temptation of getting AUM that is high on one-time transactional revenue. That actually puts a lot of pressure on building a long-term sustainable model.”
— Srikanth Subramanian, Management - Wealth
The asset management business is currently focused on low-cost index funds, which require time and investor education to reach a large scale. This long-term strategy relies on digital distribution to keep costs low while building the brand.
“AMC all along has been a passive-only approach for us at the start. Passive businesses take a long time to mature. We started this about 15 months ago, which is not too long. Passive grows as content and education grow, and it is largely sold as DIY on digital platforms.”
— Amit Majumdar, Management - AMC
Technical issues and changes in bank lending rules have temporarily slowed down the growth of the company’s credit products. Management is actively working to remove these barriers to ensure smoother loan processing in the future.
“In general, lenders keep calibrating their risk and pricing on our base over time. Quarter-over-quarter, some of these do impact our disbursements. Secondly, since we work with lenders who work with tech partners for underwriting and KYC, some friction in those parts of the funnel also impacts us in the short term. Some of these have been identified and are in the process of being corrected.”
— Saurabh, Management Leadership
The company is spending about 4% of its margin to build its new wealth and asset management businesses. This clear accounting shows that the core brokerage business remains very profitable and can easily fund these expansion efforts.
“Regarding cost, it is in line with our plans. Overall, the operating margin decrement is about 400 basis points for both the AMC and wealth businesses put together. On an adjusted basis, we are seeing about a 44% operating margin for the consolidated business, which includes the burn for these new segments.”
— Vineet Agrawal, Group CFO
The company is preparing to launch ‘Loans Against Securities’ to its entire customer base after finishing internal tests. This new product is expected to contribute meaningfully to earnings within the next few quarters.
“We spent time building the infrastructure for the LAS business and are in a closed user group (CUG) mode right now. As we gain more experience, we will open up the entire base; in the next two or three quarters, you should see that business becoming significant. On the Personal Loan (PL) side, we work with seven lenders currently, including banks, large NBFCs, and a couple of fintechs.”
— Saurabh, Management Leadership
Angel One is planning to revamp its international investing options using its new GIFT City license. This expansion into global markets will give customers more ways to diversify their portfolios on the same platform.
“US equities is an interesting opportunity. We have certain offerings but are looking to upgrade them. We obtained a GIFT City license for that. We cannot talk about pricing yet as we haven’t launched the upgraded product, but it’s an important segment for us.”
— Amrish Kenge, Group CEO
5paisa Capital Limited | Small Cap | Stockbroking
5paisa Capital is a digital-first discount brokerage firm providing online trading services in equities, derivatives, and commodities. The company focuses on a tech-heavy platform strategy to serve a growing retail investor base across India.
[Concall]
The company is actively seeking AI partnerships and potential acquisitions to enhance its digital platform and internal efficiency. This strategic focus on AI and inorganic growth suggests a push to stay competitive against larger tech-led brokerage rivals.
“We are very actively looking at the right partnerships in the AI ecosystem to accelerate our AI journey, both within the company internally for improving productivity and unleashing creative forces, but also, more importantly, for our customers, where they can leverage the power of AI to make them better investors and traders. Third, of course, we continue to selectively evaluate inorganic opportunities in the market which can accelerate our journey and give us additional speed and talent to move forward as an integrated platform.”
— Gaurav Seth, CEO
The company faced some growth moderation in the first quarter due to market volatility and recent internal adjustments. Management expects growth to pick up pace again as their new product and marketing initiatives take full effect.
“Overall revenue-wise, we have grown, but given the volatility in the last quarter, there is obviously some rub-off effect on us. I cannot make forward-looking statements, but we do expect growth to accelerate from our current base. We are doing the right things on the product side and the growth marketing side.”
— Gaurav Seth, CEO
The business is shifting its strategy from simple headcount growth to acquiring higher-quality users who generate more value. Increasing revenue per customer is a positive sign for the long-term sustainability and profitability of the user base.
“Our focus, now more than ever, is on both quantitative acquisition and, more importantly, the quality of that acquisition. That is already being reflected in our unit numbers. We are seeing better RPC, or revenue per customer, over the last few months and the last quarter.”
— Gaurav Seth, CEO
The National Pension System segment has seen strong growth by targeting long-term platform users rather than new sign-ups. This diversification into retirement services helps deepen the relationship with existing customers and creates more stable revenue streams.
“Our NPS business has grown through the retention of existing customers. Typically, the NPS cycle doesn’t grow with new customers; it grows as older customers trust your platform over time and try out the offering. That has shown encouraging growth for us—literally doubling over the last 15 months.”
— Gaurav Seth, CEO
A regulatory change by the RBI has forced brokers to fund their own intraday facilities, requiring significant capital. 5paisa’s recent capital raise puts them in a strong position to comply with these rules without disrupting their service.
“Effective July 1, the RBI stated that banks cannot provide intraday facilities to brokers, so every broker has to arrange the money. We were fortunate to get the money at the right time and have increased our margin. We are ready for the next phase with this.”
— Gaurav Seth, CEO
Management is delaying expansion into third-party distribution like mutual funds to focus on perfecting their core trading platform. This suggests a disciplined approach to capital and resource allocation rather than spreading the team too thin.
“We did try a couple of years ago. In the very near future, the answer is no, but in the mid-to-long term, we might potentially look at it if there are synergies to be leveraged. We won’t do it in the very near term because our hands are full with our core platform, and we want to do a very good job at that first.”
— Gaurav Seth, CEO
Muthoot Capital Services Limited | Small Cap | NBFC
Muthoot Capital Services is a non-banking financial company primarily focused on vehicle financing, including two-wheelers, used cars, and commercial vehicles. It operates within the Muthoot Pappachan Group ecosystem, leveraging a vast branch network to serve retail customers in semi-urban and rural India.
[Concall]
The company has achieved a credit rating upgrade following improvements in asset quality and governance. This upgrade is expected to lower the cost of funds and improve access to diverse capital sources.
“First and foremost, we received a CRISIL rating upgrade to AA- stable. We believe that this is a very strong external validation of the transformation that the company has undergone over the past couple of years. It reflects a sustained improvement in our asset quality, our governance standards, and our funding profiles, among many other things.”
— Mathews Markose, CEO
The company is successfully building its own retail deposit base to diversify its funding away from banks. For investors, this creates a more stable liability profile and helps insulate the business from institutional lending volatility.
“Second, our public deposit franchise crossed 100 crores. While this number may not be very big, considering that we just recently started scaling up on this and recently launched our online FD module, this is a significant achievement. This is important also from the fact that it gives us a very stable, diversified, and granular funding base, and it is a very important pillar of our long-term liability strategy.”
— Mathews Markose, CEO
The company is shifting away from co-lending models to focus on growing its own balance sheet. This transition increases the interest income retention and gives management more control over the lending lifecycle.
“Parallelly, our own retail portfolio has been considerably increasing. We reached 84%, which means our co-lending book has been steadily declining. That is a conscious call that we took. If you compare year-over-year, last year in Q1, we had about 120 crores of disbursement through co-lending, and this Q1 in the first month, we only disbursed 20 crores.”
— Mathews Markose, CEO
The firm is heavily investing in AI technology to handle debt recovery and customer operations. Successful automation of collections suggests a future path for lower operational costs and better recovery rates.
“Our entire red bucket collection is being done by AI bots. This month, our resolution with AI bots on the red bucket was as high as 55%, and we will continue to expand there. Other use cases of AI have been in our welcome calling, our audit and compliance, and our automatic ticket segregation of customer complaints.”
— Mathews Markose, CEO
Management has opted to take a proactive impairment charge to build a buffer against potential economic stress. This indicates a conservative accounting approach that aims to stabilize future earnings volatility.
“We engaged EY to help revise our ECL model. In Note Number 5, we have taken an additional 2.5 crore impairment because we want to anticipate macroeconomic factors. Even though the GNPA on the 14-month book went down from 3% to 1%, we kept that 2.5 crore as an additional impairment to avoid a P&L hit later in the year.”
— Ramandeep Gil, CFO
The company is deepening its integration with the broader Muthoot Pappachan Group branch network for customer acquisition. Increasing this share of business will lower marketing costs and improve overall profitability through cheaper sourcing.
“Currently, 15-20% of our incremental sourcing every month comes from group entities. Our objective is to take that to 40%. The acquisition cost is lower because our related-party transactions are vetted at a lower cost than the market.”
— Mathews Markose, CEO
Software Services
Wipro Limited | Large Cap | IT Services & Consulting
Wipro is a leading global information technology and consulting firm headquartered in India. The company provides a range of services including cloud computing, cybersecurity, and digital transformation, with a current strategic focus on AI-native business models.
[Concall]
Clients are moving past simple software updates and are now looking to rebuild their entire business operations using artificial intelligence. This trend suggests a long-term shift toward higher-value consulting and transformation projects for Wipro.
“Interestingly today, clients are looking beyond technology modernization alone. The focus is moving towards AI-enabled operating models that improve service quality, reduce operational complexity, strengthen resilience, and unlock sustainable productivity gains.”
While AI significantly speeds up new coding projects, its impact on older, complex legacy systems is much more limited. This indicates that traditional revenue from maintaining older enterprise systems may be safer from AI-driven automation than expected.
“The software development life cycle is seeing a dramatic improvement in productivity. We have to have the context that if it is a pure-play greenfield project using a tool like Python, the productivity is significantly higher. But on the other end of the spectrum, if it is complex code and you don’t have the right target environment—perhaps because it is a legacy environment—deployment into production becomes difficult.”
— Srini Pali, Chief Executive Officer and Managing Director
The company is committed to its long-term profit targets but is currently unable to provide a firm timeline for recovery. This lack of visibility suggests that investors should expect continued margin volatility in the coming quarters.
“Having said that, our mission is clearly to go back to the narrow band of 17% to 17.5%. Regarding the timeframe, in the context of the volatility and the revenue situation we see, I do not want to predict exactly when we will get there, but the point is that we want to get there.”
— Srini Pali, Chief Executive Officer and Managing Director
Wipro is investigating how to replace certain human roles with AI ‘agents’ to change its workforce structure. This internal automation is a key lever the company intends to use to protect its profit margins as pricing models change.
“We are also looking at how to restructure the pyramid in the context of AI and how many projects we can run through agents or agentify. These are all the levers we are looking at, and we will stay focused on that.”
— Srini Pali, Chief Executive Officer and Managing Director
Budget cuts and regulatory pressures in the US healthcare market are hurting revenue in that business segment. This industry-wide slowdown is a significant headwind that investors should monitor for signs of bottoming out.
“The impact we experienced is because of the US healthcare ecosystem, which is facing sustained pressure from both structural and demographic forces. Because of the pressures they face from the government, their budgets have been flattish or even showing negative growth. There is a lot of pressure to take costs out.”
— Srini Pali, Chief Executive Officer and Managing Director
Standard cost-saving deals now include expected AI productivity gains in the initial price, which can pressure margins. However, Wipro expects to charge premium prices for its more advanced AI consulting and data transformation services.
“Wherever the intention is to use AI to drive higher productivity and take costs out for large operations, you will see that forward productivity gets baked into the deals. The Reimagine AI offerings Srini spoke about, where you are seeing newer spend on account of AI, we are very confident we will drive a premium in realization.”
— Aparna Iyer, Chief Financial Officer
Auto Ancillary
CEAT Limited | Mid Cap | Tyres
EAT Limited is one of India’s leading tyre manufacturers, offering a wide range of tyres for two-wheelers, passenger vehicles, commercial vehicles, off-highway equipment, and specialty applications. The company has a growing international presence and is focused on premiumization, expanding OEM partnerships, and strengthening its global business through the integration of Camso.
Management acknowledges that raw material costs rose significantly faster than their ability to increase product prices during the first quarter. This lag in pricing adjustments has led to a temporary squeeze on the company’s profit margins.
“The raw material price escalation from Q1 over Q4 on an average has been around 15–16%. As you mentioned, the price increase passed through so far is in single digits. So there has been an inadequate price increase in Q1.”
— Arnab Banerjee, Managing Director & CEO
Management expects raw material costs to climb a further 8–10% in the second quarter before easing in the second half of the fiscal year. This indicates that margin pressure is likely to persist in the near term despite ongoing pricing actions.
“Looking at Q2, raw material prices will further go up versus Q1 by about 8–10%. Hence, the price increase effort should continue to cover that escalation as well. Q2 will be a similar quarter, and we expect easing in the second half of this financial year.”
— Arnab Banerjee, Managing Director & CEO
The company has already implemented significant price hikes and plans additional increases in the replacement market to offset higher input costs. Management is also working to improve pricing in international markets.
“We have taken a heavy dose of price increase from 1st July in replacement, and we have also received healthy price increases from OEMs which are indexed to raw material prices. We need to do more in replacement and we need to do more in the international business.”
— Arnab Banerjee, Managing Director & CEO
Underlying demand remains healthy across replacement and OEM channels despite recent price increases. Strong industry demand gives the company confidence that further pricing actions can be absorbed by the market.
“Post the GST change, through Q3, Q4 and now Q1, demand has been robust across segments in the replacement market and in OEMs. You are aware of the numbers being reported by the commercial vehicle, passenger vehicle and two-wheeler industries.”
— Arnab Banerjee, Managing Director & CEO
The company continues to premiumize its product portfolio by increasing the share of higher-rim-size tyres. This strategic shift is expected to structurally improve profitability once raw material inflation moderates.
“We are witnessing very good growth in two-wheelers as well as passenger car tyres because of what we are doing on the premiumization front in OEM and replacement. Our fitment of higher rim-size tyres is increasing from a lower base and this will be margin accretive when the raw material situation eases.”
— Arnab Banerjee, Managing Director & CEO
The integration of the Camso specialty tyre business is progressing as planned, with direct customer management expected to begin by the end of the second quarter. This is a key milestone that should improve operational control and profitability.
“We are not handling the customers right now because we are taking over customers from Michelin. We will complete that process by and large by September, which is the end of Q2. That will give us a big leverage in how we handle the customers.”
— Arnab Banerjee, Managing Director & CEO
The acquired Camso business is already generating higher gross margins than the core CEAT business even before full integration. Management sees meaningful upside once the company controls the complete value chain.
“You’ll be surprised to know that even now the Camso business gross margin is higher than CEAT’s. That gives you an indication of the possibility when we handle the full value chain.”
— Arnab Banerjee, Managing Director & CEO
Management is targeting double-digit revenue growth for the full year by continuing to gain market share, regardless of overall industry growth. This reflects confidence in the company’s competitive positioning and execution.
“Double-digit growth in the top line is a possibility for FY27. We have grown by 18.5% standalone in the first quarter. We would like to maintain that rate irrespective of market growth by gaining market share.”
— Arnab Banerjee, Managing Director & CEO
Engineering & Capital Goods
Polycab India Limited | Large Cap | Electrical Equipment
Polycab India is India’s leading manufacturer of wires and cables, with a growing presence in the Fast Moving Electrical Goods (FMEG) segment across fans, lighting, switches, switchgear, and solar solutions. The company continues to expand its manufacturing capacity, distribution network, and international footprint while focusing on profitable growth.
[Concall]
Management believes the company’s leadership in wires and cables, combined with the rapid expansion of its FMEG business, is creating a more diversified and scalable business model. Operational excellence and disciplined capital allocation remain central to its long-term strategy.
“The wires and cables business maintained steady momentum, leveraging its market leadership and execution capabilities, while the FMEG business continued its trajectory of steady improvement supported by a richer product portfolio and a wider customer reach. The progress we are seeing today is a direct outcome of our commitment to building a more agile, scalable, and future-ready organisation. We remain focused on operational excellence, disciplined capital allocation, and enhancing customer value across every touchpoint.”
— Nilesh Maru, Chief Financial Officer
The company continues to target growth well ahead of the industry while steadily improving profitability. Investments in distribution, product innovation, and brand building remain key pillars of its long-term growth strategy.
“Our strategic priorities remain unchanged: to grow at 1.5x to 2x of the industry growth while progressively enhancing profitability. Ongoing investments in distribution reach, product innovation, and brand strength will continue to drive sustainable value creation over the coming years.”
— Shashank Yagnik, Head of Strategy and Investor Relations
The solar business has become the largest growth engine within the FMEG portfolio, supported by structural policy tailwinds and increasing consumer adoption. Management believes the opportunity remains significant over the long term.
“The solar business, our largest category within the FMEG portfolio, continued to be the primary growth engine, delivering more than two-fold growth year-on-year. The category continues to benefit from favorable structural trends including the PM Surya Ghar Yojana, state-level incentive programs, and increasing consumer adoption of renewable energy solutions. We believe the long-term growth opportunity in this space is quite substantial.”
— Shashank Yagnik, Head of Strategy and Investor Relations
The company follows a cost-plus pricing model, allowing it to pass fluctuations in raw material prices to customers. This helps protect profitability despite volatility in copper and aluminium prices.
“Price will be something we cannot control as it is a cost-plus model. Whatever the cost is, we will pass it on.”
— Nilesh Maru, Chief Financial Officer
Management sees India’s rapidly expanding data centre industry as a meaningful long-term opportunity for both power cables and optical fibre cables, creating a new avenue for growth.
“Today, the installed base is around 1.6 gigawatts. We have read reports estimating it could reach 8 gigawatts to 15 or 18 gigawatts. We estimate that 1 megawatt translates into around ₹3.5 crore worth of cables, with 50-60% being conventional and the balance being optical fibre.”
— Nilesh Maru, Chief Financial Officer
Exports are becoming increasingly diversified, with North America now contributing nearly half of international revenue. The company continues to expand into new geographies to reduce concentration risk and drive future growth.
“North America contributed around 45-50% of our Q1 turnover and Europe was about 18-20%. We added 10 new geographies last year and believe this will pay rich dividends in the time to come.”
— Nilesh Maru, Chief Financial Officer
Management has secured raw material supplies for its BharatNet execution, significantly reducing exposure to rising fibre prices and improving earnings visibility for the project over the next few years.
“The strength of our procurement is such that we have secured fibres for the execution period of the next two to three years... We have already secured the fibre for that portion, so we are not exposed to the high fibre prices.”
— Nilesh Maru, Chief Financial Officer
Management believes India’s power infrastructure build-out will remain a major structural demand driver for the cable industry over the next five years, supported by strong investment across generation, transmission, and distribution.
“A ₹100 spend on transmission and distribution translates to a cable requirement of 15%, which is very high. We believe the next five years will be monumental for generation, transmission and distribution combined. Another lead indicator is the capacity expansion plans of transformer companies, whose order books are now 2.5x their revenue.”
— Nilesh Maru, Chief Financial Officer
Real Estate
WeWork India Management Limited | Mid Cap | Commercial Real Estate
WeWork India is the country’s largest branded flexible workspace provider, offering managed office solutions and digital services across major business hubs. The company focuses on serving global capability centers and large enterprises through a high-occupancy physical network and an integrated services platform.
[Concall]
The management explains that current financial performance should be judged by annual growth rather than quarter-on-quarter changes due to the costs of expansion. This helps investors understand that temporary dips in sequential profit are a result of investing in new properties that take time to fill.
“Look at us on a year-over-year basis, not sequentially, for two reasons. We are in a growth cycle, and in a growth cycle, fixed costs arrive before revenue does. When we sign new centers, rent and operating expenses start immediately; the desks fill up over the quarters that follow. So any quarter where we are expanding hard will look softer sequentially, even as the business underneath it gets stronger.”
— Karan Virwani, MD and CEO
The digital business segment is highly profitable because it generates additional income from existing physical spaces without adding much cost. For investors, this indicates a high-margin growth lever that significantly boosts overall profitability despite its small revenue size.
Digital business is essentially a set of software-enabled workspace products that let customers access office infrastructure without signing a traditional office lease.
“Digital is still under 4% of revenue, but those products monetize the same square foot more than once and run at close to an 80% EBITDA margin. This contributes materially more to the bottom line than the top line. This quarter’s shareholder letter has a full spotlight on it; it is worth a read.”
— Cliff, CFO
The company is keeping its operating costs and rent steady even as its revenue climbs sharply. This operating leverage means that most new revenue will directly increase profits, making the business more financially resilient.
“Rent per square foot was flat over the year. Opex per square foot only rose 5.6% while revenue grew 28%. That gap is our operating leverage. Portfolio break-even occupancy is just 56.6%, and even our newest growth centers are comfortably above that.”
— Cliff, CFO
The firm is funding its massive expansion using its own cash flow rather than taking on more debt. This low debt level reduces financial risk and shows the business is generating enough cash to fuel its own growth.
“We doubled our investment in growth and our own operations absorbed all of it. Net debt is 31.6 crores, down 89% from 297 crores a year ago, against 371 crores of cash on hand. Net debt to EBITDA is 0.06 times.”
— Cliff, CFO
A new service platform has been launched to capture more spending from existing tenants on business needs like IT, HR, and transport. This move transforms the company from just a space provider into an essential service ecosystem, potentially increasing customer stickiness.
“So on July 15, we launched Member Services, a business services platform built exclusively for our members that lives inside the WeWork India app. Here is how it works: we created a marketplace of business service partners and negotiated enterprise-level pricing and standards with each one of them. It is one place to discover services, engage partners, and manage billing with us running the workflow.”
— Karan Virwani, MD and CEO
Management expects profit margins to improve even as they open thousands of new seats because many are already committed to specific clients. This reduces the risk usually associated with expansion where space remains empty while costs are being paid.
“We do not foresee the margin dipping. We actually see potentially the margin moving upwards because of the large managed offices that are a component of that expansion. Nearly 7,000 seats will be managed offices opening this quarter.”
— Karan Virwani, MD and CEO
The value of signed future contracts is growing much faster than the company’s fixed rent obligations. This widening gap provides strong visibility into future earnings and suggests healthy long-term profitability.
“Yes, the 3,063 crores is the current average commitment over the portfolio average, which is about 27 months. That is growing almost 60% year-over-year and almost 15% sequentially. While rental, which is the committed cost we have, has only moved up about 200 crores in the same period.”
— Karan Virwani, MD and CEO
Regional performance varies, with Southern India offering better profit margins even at lower rental prices compared to the North. This insight shows that the company’s profitability is driven more by local efficiency than just high desk prices.
“In Hyderabad and Chennai, growth is coming from large managed offices. Margin profiles there are significantly higher, but pricing is almost half that of Delhi. The southern markets have stronger margins because the spread we make there is larger—between 2.8x to 3x plus—versus slightly lower spreads in expensive centers, though the quantum of EBITDA there is larger because of price.”
— Karan Virwani, MD and CEO
The promoters intend to eliminate the current share pledge by the end of the financial year. Removing this pledge would reduce a key governance risk and improve investor confidence in the stock’s stability.
“Roughly 15% of our shares are pledged. As market cap has improved, we see that pledge releasing slightly. Our endeavor is to remove the pledge or pay off the debt within this financial year, either through asset sales in the parent business or by a block sale if pricing is appropriate.”
— Karan Virwani, MD and CEO
Join us on WhatsApp, where we share interesting soundbites from concalls, articles, and everything else we come across throughout the day. You’ll also get notified the moment a new video or article drops, so you can read or watch it right away.
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 Shahid, Kashish, & Srusti.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.