Welcome to the 85th edition of The Chatter — a 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 5 companies across 4 industries.

FMCG

Milky Mist Dairy Food Ltd
Avanti Feeds

Retail

Bluestone Jewellery

Engineering & Capital Goods

Leap India Ltd

Auto Ancillary

Precision Camshafts

FMCG

Milky Mist Dairy Food Ltd. | Small Cap | FMCG - Dairy Products

Milky Mist is a prominent Indian dairy player focused on the value-added segment, producing high-margin products like paneer, cheese, and yogurt. The company distinguishes itself through an integrated manufacturing model and a massive, self-owned fleet of cold-chain logistics vehicles.

[Concall]

The company is executing a multi-pronged growth strategy involving capacity expansion, digital logistics, and aggressive retail infrastructure deployment. The planned addition of 50,000 cooling units is a key forward-looking indicator of their intent to dominate shelf space and maintain product quality.

“We intend to harness this sizeable opportunity through a few of our key strengths, which include strengthening our leadership position in the South while accelerating our strong presence across newer geographies; continuously expanding capacity and procurement capabilities at our Perundurai facility, including the addition of a new whey protein concentrate manufacturing unit, capacity expansion in yogurt and cream cheese, as well as new manufacturing lines for natural cheese; strengthening our brand visibility through increased advertising, influencer partnerships, and performance marketing; and pursuing disciplined inorganic growth by building on our recent Asal and Briyas acquisitions to make a meaningful contribution from the new product categories. We will leverage our technology, IoT-enabled logistics, data analytics, and automation to continuously improve our cost and operational efficiency. We will further expand our retail footprint through visi coolers, ice cream freezers, and chocolate coolers. We plan to deploy more than 50,000 visi coolers, ice cream freezers, and chocolate coolers over the next 3 fiscal years, as we indicated earlier.”
— Dr. K. Ratnam, Whole-time Director & CEO

Quarterly performance was driven by exceptional growth in high-margin categories like ice cream and yogurt, which grew by 60% and 153% respectively. This broad-based growth across multiple premium segments suggests the company is successfully capturing the emerging consumer demand for specialty dairy.

“Paneer remained our largest contributor, with both volumes and revenue growing by 34%, taking revenue from paneer alone to 248.29 crore. Paneer contributes approximately 26-27% of the top line. Cheese and curd also delivered very strong growth, with revenue increasing by 38% in cheese and 27% in curd. Ice cream delivered particularly strong growth because of the season as well as our brand equity, with volumes growing by 45% and revenue growing by 60% year-on-year. This is one of the most promising and fastest-growing categories for Milky Mist. Yogurt was another standout performer. This includes fruit yogurt, basic yogurt, and protein categories such as Greek yogurt and Skyr, with revenue growing by 153% on a quarter-on-quarter basis to rupees 84.5 crore from the yogurt category alone, reflecting the continued strength of this category. This is yet another strong category that will contribute to both the top line and the bottom line of the company.”
— Dr. K. Ratnam, Whole-time Director & CEO

Management explains their strategic pivot to include a long-term exclusive partnership with a private-equity-backed procurement network to secure high-quality milk. This arrangement provides a stable, high-grade milk supply for premium products like yogurt without the typical risks associated with middleman aggregators.

“A private equity-owned entity known as Innoterra, and its offshoot in India, in Tamil Nadu, Milklane, set up procurement activities in Tamil Nadu to procure good-quality milk and sell it at a premium to the players in the sector. While doing so, as you know, liquid milk procurement and selling is always based on demand and supply. They were in a difficult situation post-COVID, and they approached us to ask whether we would be in a position to take over the operations. That is when we explored the opportunity and said that, if given a choice, we would go ahead with a long-term contract with them on an exclusive basis. That is the reason we have included the private equity-owned procurement entity in the aggregate. In fact, they are also like us; they have been collecting milk directly from farmers. We have been monitoring their operations day in and day out, and their payment system is also like ours, with payments made directly into the farmers’ bank accounts. There are no aggregators pouring milk into the third party. It is an extension of our procurement activity going forward as well. Since this is a long-term contract of 5 years, their volumes will contribute to some of our product categories that require very good-quality milk, such as yogurt and UHT milk.”
— Management, Executive Leadership

The removal of GST and stricter regulatory action against imitation ‘analogue’ products have leveled the playing field for organized players. As the largest paneer manufacturer, the company is uniquely positioned to capture the massive shift of market share from unorganized to organized trade.

“In Q1, our paneer volume growth was 34%, and our sales growth was also 34%. This has come from two factors. First, GST on paneer became zero in September last year. With that, the pricing difference between organized and unorganized players became almost nil. This gave Milky Mist very strong growth momentum in paneer. Second, we have been informing, telling, and discussing at various forums and with the authorities the need to stop analogue products, particularly analogue paneer. Thanks to FSSAI and some of the key states that have banned analogue paneer, we are now seeing a significant volume uptake in our paneer business. Going forward, we also see very strong growth coming from paneer. This would help not only companies such as Milky Mist, because we are the largest manufacturer of paneer, but also consumers, who will have access to a better product rather than analogue products.”
— Management, Executive Leadership

Milky Mist achieves an 18-20% cost saving in logistics by owning its fleet and optimizing ‘reverse logistics’ by carrying third-party cargo on return trips. This integrated cold-chain model is a major competitive advantage, enabling faster market access and superior product preservation compared to competitors.

“In our case, the minimum shelf life of our products starts at 30 days. We have a very strong manufacturing unit in 1 location. The company owns and operates more than 375 transportation vehicles. This gives us the ability to load the products as they come out of the manufacturing lines and transport them without interruption to their respective destinations. Since we own the logistics, we operate every truck around the clock using artificial intelligence and IoT-based systems. They reach the destinations in approximately 75% or 60% of the time taken by other third-party operators. This gives us a faster turnaround in reaching the products to the market. While returning, these trucks carry return loads because we have established very effective and robust reverse logistics. When they return from Maharashtra, Gujarat, Delhi, Punjab, and other parts of the country, they bring back food products, fruits, vegetables, or grains for third parties to Bangalore, Hyderabad, or Chennai. They offload these goods and return. We save approximately 18-20% on logistics costs by using our own transportation and skillfully employing these trucks for reverse logistics.”
— Management, Executive Leadership

The company is planning to monetize its massive whey byproduct by building a protein extraction plant, scheduled for completion in 15-18 months. This move into high-value B2C protein products represents a significant future margin expansion opportunity for long-term investors.

“At present, we are selling only whey powder, which comes from cheese and paneer manufacturing. As you rightly said, we generate approximately 1 million liters of cheese whey every day. It contains good-quality protein. If you look at our DRHP or RHP, one of the projects is to extract protein from this cheese whey and market it for internal consumption as well as for B2B and B2C applications. This would give us a further expansion in margins as well as a contribution to the bottom line. Of course, this is going to happen 12-15 months down the line because we have placed the orders, and the plant is expected to be up and running in a minimum of 15-18 months from now. This is one of the areas we are looking at very optimistically. We already have a protein category in our system, including high-protein paneer, high-protein cheese, and high-protein yogurt. We have already built that category. We are also developing a few more high-protein ready-to-drink categories, which we will communicate when they are ready for launch. Whey protein concentrate will become an additional product and further improve the category in this regard.”
— Management, Executive Leadership

Management is expanding procurement into Maharashtra and plans to establish a manufacturing plant there within three years to decentralize supply risk. By building the procurement network before the factory, they aim to ensure 40% utilization from the start, accelerating the path to profitability in a new region.

“Milky Mist has been evolving various strategies to avoid depending on only 1 source or 1 region for milk. We have started expanding our procurement network in adjacent districts of Karnataka, and we are also setting up procurement activities in Maharashtra. We have taken land there and are planning to establish a new setup. We initiated procurement activities approximately 6-7 months ago and will continue to improve them and take them to a sizable volume before commissioning the plant. This will allow the plant to handle at least 40% capacity utilization from day one, which will help it reach the break-even point. Right now, the plant configuration and capacities are still at a very nascent stage. We are at the drawing-board level. As I told you earlier, all these factors depend on the kind of growth we see over the next 3-4 quarters. If we continue to have this kind of growth, we may have to accelerate implementation and bring it forward. Otherwise, as I told you, we will have a manufacturing capacity there approximately 3 years down the line.”
— Management, Expansion Strategy (Q&A)

Avanti Feeds | Small Cap | FMCG

Avanti Feeds Limited is a prominent manufacturer of prawn and fish feeds as well as a shrimp processor and exporter based in India. The company has formed a joint venture with Thai Union Frozen Products PCL, a renowned seafood processor from Thailand. With multiple manufacturing units and processing facilities certified with international standards, Avanti Feeds is a leading player in the aquaculture industry.

[Concall]

Management’s on-ground commentary on farming was encouraging, with favourable climate and higher farm-gate prices supporting cultivation. The biggest remaining concern is feed cost.

“At present, the shrimp culture activity is very good. The farmers are very happy that the culture is progressing very well with the climate is also favorable. Farm-gate prices have also been have gone up. That is also very attractive. The agriculture is going very progressive very smoothly.
We hope that throughout this year, that is till December, the completion of the second season also will be like this. But only concern is about the cost. Cost is the only concern because the cost of feed is going up. Simultaneously, the price of the farmer, cost of production also goes up. Hopefully, the farm-gate prices will support the farmers with the reasonable return. This keeps going.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

The magnitude of raw-material inflation explains the sharp compression in feed profitability. Fish meal’s average consumption cost was ₹93/kg in Q1 FY26 and ₹153/kg in Q1 FY27, while the current purchase price has climbed further to ₹225/kg.

“The average consumption price of fish meal increased in Q1 to INR 153 per kg from INR 123 per kg in Q4 FY26 and increased from INR 93 per kg in Q1 FY26. In price of soya bean meal, their prices increased to INR 58 per kg in Q1 FY27 from INR 49 in Q4 FY26 and increased from 40 in Q1 FY26.
However, the wheat flour price decreased to INR 28 per kg in Q1 FY27 from INR 31 per kg in Q4 and Q1 FY26. The present purchase price of fish meal is INR 225 per kg; soya bean meal is INR 71 per kg and wheat flour is INR 33 per kg.”
— B. Santhi Latha, Chief Financial Officer, Avanti Feeds Limited

Avanti says the industry hasn’t previously encountered inflation of this magnitude, making it difficult to simply pass costs through to farmers.

“But one thing is very important to note here that the prices have gone up so phenomenally that the increase should be something very, very high, which both the industry, the farmers, feed, government, everybody exporters are taking it very seriously how to organize this. For the first time perhaps, this thing has happened with such a steep increase.
They are trying to find some solution whereby balancing act takes place.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

One of the most interesting remarks from the call: stakeholders are exploring a mechanism where movements in fish meal, soybean meal and wheat flour could be reflected systematically in feed prices.

“There’s some price mechanism were determining on the major inputs like fish meal, soybean meal, and wheat flour, they take as that how whether there can be a mechanism by which the variance of the prices will take a way in the price feed price.
That’s what the government is very seriously working. Even the stakeholders are also acceptable to that kind of a formulation, which will help both the farmers as well as the feed manufacturers. I think that exercise is going on.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

The pricing issue has escalated beyond informal industry discussions, with the state government constituting a committee and bringing in an external consultant.

“The government has, in fact, constituted a committee with one of the big four consultants. They are working on that how to handle this at the price because we have to keep in view not only the feed manufacturers, but also to the farmers and also how it becomes a sustainable activity for the farmers. It is an ongoing process.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

This explains why margins can remain under pressure even after the 10% price hike: farmer economics and regulatory considerations limit Avanti’s pricing flexibility.

“These raw material prices are, as we have seen that they keep increasing phenomenally, particularly in the last one year, particularly like fish meal, soya bean meal, all these prices have gone up. It is not like just because the raw material prices have increased, so we keep increasing the prices of the feed.
There is a lot of work that has to be done before we take any increase in the feed. We are trying to balance Mr. Khanna these things, and I hope that we’ll come to some balancing figure where the prices are affordable to the farmers as well as it is sustainable for the feed industry also.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

Better realizations, forex and operational efficiency helped processing PBT rise sharply YoY even as Q1 volumes fell.

“The profit before tax in Q1 FY27 was INR 45 crore, an increase from INR 25 crores in the corresponding quarter in Q1 FY26, reflecting a significant increase primarily due to improved average selling price realization, favorable foreign exchange rates and higher other income recorded in Q1 FY27.”
— D. V. S. Satyanarayana, CFO, Avanti Frozen Foods Private Limited

India’s export mix is diversifying: US volumes fell nearly 18%, while China and EU volumes grew 24% and 36%, respectively.

“On a YoY basis, export volume to the U.S. declined by 17.9%, whereas exports increased by 24% to China, 36% to EU and 5% to Japan in metric tons. Frozen shrimp continued to be the major item of export in terms of quantity and value, accounting for a share of 40% in quantity and 67% of the total U.S. earnings.”
— B. Santhi Latha, Chief Financial Officer, Avanti Feeds Limited

Avanti argues that policy cannot address feed makers, farmers and exporters independently because economics at each stage directly affect the others.

“Therefore, there is a need for a meticulous balance between the interest of the farmers, feed manufacturers and exporters to ensure the long term and sustainable growth of the aquaculture industry.
At this juncture, the industry looks to government for appropriate policy support to address these emerging challenges. It may be necessary to view the shrimp industry as an integrated value chain rather than treating shrimp farming, feed manufacturing and seafood exports as separate activities.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

Management suggested that exports of critical feed ingredients could be worsening domestic shortages and contributing to the extraordinary inflation in shrimp-feed costs.

“Some of the policy interventions that could be considered include: one, monitoring the availability and prices of key raw materials, particularly fish meal, fish oil, soybean meal and meat plots. Examining whether the excessive exports of critical feed ingredients like fish meal are affecting the domestic availability and contributing to price pressures creating an appropriate mechanism to monitor abnormal increases in the prices of essential feed raw materials, encouraging greater market diversification so that India’s shrimp exports industry is less exposed to price pressures, trade barriers and other levies imposed by any single market.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

This was perhaps management’s clearest assessment of the industry’s paradox: production and exports are strong, yet profitability across farmers, feed producers and processors is under stress.

“To conclude, India’s shrimp industry is currently in a paradoxical situation. The sector has never been so strong in terms of production and exports. However, the economics at different stages of shrimp value chain are becoming increasingly fragile, creating challenges for the long-term sustainability of the industry.
That said, I would like to share with you that state and central governments along with various stakeholders across the value chain are actively engaged in addressing these challenges and exploring long-term solutions for sustainable growth of the shrimp industry in the country.”
— C. Ramachandra Rao, Joint Managing Director & Company Secretary

Avanti has declared the refund entries, but US Customs will not process them until the anti-dumping and countervailing-duty review suspension is lifted.

“Regarding reciprocal tariff, particularly for seafood industry, that too for India, so now the entries are under ADD and the CVD review, which are under suspension status. Unless the suspension is lifted, the CBP will not process the reciprocal tariffs. As of now, they’re all under pending status.”
“What CBP said, you can declare the entry, but we will not process it. That’s what our legal counsel and even the customs broker said. Accordingly, we have declared the entry.”
— D. V. S. Satyanarayana, CFO, Avanti Frozen Foods Private Limited

Retail

Bluestone Jewellery | Small Cap | Retail

BlueStone is a leading omni-channel jewellery brand in India with stores across multiple cities. Offering diverse collections, it serves customers aged mid-twenties to mid-forties via online and offline channels. Backed by strong tech, design, and nationwide presence.

[Interview]

BlueStone ended FY26 with around 340 stores across 110+ cities. Strong same-store sales growth is giving management confidence to more than double the network over the next four years.

“We closed the last financial year with around 340 stores, and these are spread across over 110 cities. The expansion plan is what we had shared a couple of months back with the market and all our investors—that we intend to grow these numbers to almost double, to 700-plus stores over the next four years.
What is very encouraging is the very strong same-store sales growth that we are observing year over year, and that gives us the confidence that it is possible to open 700 to 800 stores across, let’s say, 300-plus cities in the country.”
— Gaurav Singh Kushwaha, CEO, BlueStone

BlueStone believes jewellery demand is already deeply penetrated across India. The opportunity in smaller cities is therefore less about creating demand and more about offering consumers greater design variety.

“India is a vast country, and jewellery is a category which is very well penetrated, not only in the bigger towns but even in the smaller towns. So the category and the demand are already there.
I think what we need to bring to the table is our design-first approach and our omnichannel-first approach. What we’re seeing is that as we go lower down the tiers, into Tier-2 and Tier-3 cities, the design unavailability is even higher there. So our stores typically tend to perform very well in Tier-2 and Tier-3 cities as well.”
— Gaurav Singh Kushwaha, CEO, BlueStone

BlueStone isn’t seeing structurally lower spending in smaller cities. Younger stores initially attract more first-time customers, while repeat customers tend to buy more frequently and at higher values as stores mature.

“Not quite. Typically, what happens is when our stores are in their initial years, they start with a lower ticket size because a lot of the demand is actually coming from new customers. But as those stores mature in a particular catchment, in a particular city, a lot of repeat also picks up, and repeat in a category typically happens at a higher frequency and higher value as well.
So in the blended numbers, you would see that the older stores have slightly higher ASPs or AOVs. In Tier-2 and Tier-3 cities, our stores are typically relatively younger, so because of that there is an ASP difference. But it’s not a Tier-2/Tier-3 phenomenon. In general, the ticket sizes continue to remain more or less in the same range.”
— Gaurav Singh Kushwaha, CEO, BlueStone

BlueStone has close to 11,000 designs but doesn’t need to replicate that entire inventory across every location. Its data backbone allows individual stores to stock designs relevant to their local catchment.

“We are an omnichannel jewellery brand. We started as online-only in 2012, and we remained an online-only jewellery brand till around 2019, when we started moving into omnichannel, and we saw the benefit in conversions from that.
On our website and at a catalogue level, we have close to 11,000 designs. Now, we don’t need to keep all those designs in every store. We have a very strong backbone of data. For all the designs, we know which area a design works in, what are the designs which are being browsed more in a particular catchment, and so on. Based on that, a typical store would contain around 1,200 to 1,300 out of those 10,000 to 11,000 designs.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Higher gold prices are pushing customers towards lower-weight jewellery, but BlueStone says the shift doesn’t materially hurt percentage profitability because lower pricing is accompanied by lower input costs.

“In terms of percentage profitability, it does not impact much. You lose a little on the pricing, but then you gain that much on the supply side also. So it’s not margin dilutive going down lower in weight or going down lower in caratage. It’s not margin dilutive.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Consumers have fixed jewellery budgets, so the doubling of gold prices cannot simply translate into twice the spending. Instead, buyers are adjusting weight and caratage.

“A lot of people have their budgets fixed, especially in the lower price points. It’s not that just because gold has doubled, you can spend double the money on jewellery this year. That is the case with most buyers—they have budget constraints.
Hence, the kind of jewellery that they can buy will either have to have lower weight or lower caratage and so on. I think people are opening up to that. Over the last 10 to 12 years, we’re seeing a gradual move towards lighter-weight jewellery rather than big, heavy pieces that you generally just keep in the locker.
A lot of people are actually moving to more wearable, more frequent, lighter-weight jewellery, and I think that move is just accelerating with these gold-price movements.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Just as Indian consumers gradually moved from 22-carat towards 18-carat jewellery, BlueStone is now seeing a similar acceptance curve develop for 14-carat products.

“That 22-carat to 18-carat move had been happening over the last 15–20 years or so. Till around 20–30 years back, India was almost a 100% 22-carat jewellery market. But the move from 22 to 18 had been happening because diamond jewellery just can’t be made in 22-carat. For it to have strength, 18-carat was required. So 18-carat had already become kind of mainstream.
Now I’m seeing the same movement happening between 18 and 14 as well. Where 14-carat is right now, 18-carat used to be around 10–15 years back. People would have a lot of questions and queries around it, but a lot of people are starting to open up to that as well. So I think 14-carat is gaining ground.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Education and affordability are reducing resistance to 14-carat jewellery, particularly as consumers realise that lower gold content is reflected in the price they pay.

“People are getting educated that if it’s 14-carat, it just means that the ratio of gold in the overall product is lesser, and correspondingly you also pay less. So it’s not that you’re taking less pure gold or any such thing.
It’s just that in order to get that strength, in order to get that thickness within a specific gold value in the product, caratage is something that can definitely be played around. So people are opening up a lot to it.”
— Gaurav Singh Kushwaha, CEO, BlueStone

While 14-carat is gaining acceptance, the industry is already experimenting further down the purity spectrum. BlueStone itself hasn’t tested 9-carat jewellery yet.

“There are some rumours about 9-carat as well. We have not tried that. But I think people are trying that in the industry.”
— Gaurav Singh Kushwaha, CEO, BlueStone

While higher gold prices change the gold-to-diamond ratio within a piece, BlueStone believes the broader migration from plain gold towards studded jewellery predates the recent gold rally.

“Higher gold prices definitely change the ratio of gold and diamond in a particular studded piece. But I don’t see the move towards studded jewellery coinciding with the gold-price increase.
I saw that move happening anyway because a lot of the newer generation is looking for very differentiated designs. They’re looking for something that is a lot more personal, a lot more aspirational and a lot more design-oriented.”
— Gaurav Singh Kushwaha, CEO, BlueStone

BlueStone sees the growing role of diamonds and gemstones as a consequence of consumers prioritising design, personalisation and aspiration over traditional plain-gold pieces.

“Typically, what tends to happen is, as you try to play around a lot with design, the role that diamonds play and the role that gemstones play just increases.
Hence, I think there is a general secular move in the category from plain gold to studded jewellery, though I don’t personally think that it is being driven by higher gold prices. I think it is driven more by aspirations. It is driven more by the changing lifestyle trends in today’s generation.”
— Gaurav Singh Kushwaha, CEO, BlueStone

BlueStone’s historical experience suggests jewellery demand is often deferred rather than permanently destroyed when customers pause purchases during periods of sharp gold-price volatility.

“Historically, what we have seen is whenever people have held back their purchases, they would actually then come back to the market over subsequent months. Along with gold volatility, there is sometimes some patchiness in demand.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Despite elevated prices, management isn’t seeing any structural weakening in gold’s appeal as an asset. If anything, conversations with customers suggest the opposite.

“I think what’s happening over the long term is that people’s belief in gold as a fundamental value—the fundamental asset value that gold carries—I think that belief has only strengthened. That shows up in our conversations as well. So I think people’s belief in gold is stronger.”
— Gaurav Singh Kushwaha, CEO, BlueStone

Engineering & Capital Goods

Leap India Ltd. | Small Cap | Logistics

Leap India is India’s leading supply chain asset pooling company, managing over 14 million assets including pallets, containers, and material handling equipment. The company operates an on-demand service model that connects suppliers, manufacturers, and retailers through a network of over 10,500 touchpoints.

[Concall]

The company highlights how transitioning from manual labour to palletised loading increased a beverage client’s truck throughput by 500%. This massive productivity gain demonstrates the critical value proposition that drives long-term customer stickiness in the supply chain.

“The first example I would like to quote is a leading global beverage company that was able to move only 50-60 trucks in a day from one plant using the conventional method of loading everything into the truck manually through labor. After using our pallets and forklifts, the number of trucks released from the plant has gone to more than 300 per day.”
— Sunu Mathew, Chairman, MD and CEO

The company maintains perfect customer retention since its founding and uses a formulaic pricing model linked to the German wood price index. This index-linked pricing serves as a built-in hedge against inflation, ensuring sustainable margin protection.

“Our business is also very sticky, as we have not lost any customer since inception. We may have decided not to service a customer due to various reasons, but otherwise we have not lost a single customer. As we have demonstrated in the past, we take a price increase of nearly 5-9% every year, based on the wood price index listed on the German Stock Exchange. Therefore, for the next couple of years, we could easily beat inflation with price increases.”
— Sunu Mathew, Chairman, MD and CEO

Management is intentionally limiting new container purchases because raw material costs have nearly doubled, which would hurt return on capital (ROCE). Instead, the strategy has shifted to increasing asset retrieval speed and pooling efficiency to meet high demand without expensive new capex.

“As far as component manufacturing companies ask for 4 units of crates, we are able to deliver only 1.5-2 units. Why? Because the cost of raw materials has increased tremendously over the last several months. If I was getting a crate for 650 rupees, it now costs 1,200 or 1,000 rupees. My entire ROCE is adversely affected if I acquire new assets. Therefore, we are going slowly on that, and that is one reason why, in the first quarter, compared with an investment of 110 crores last year, we invested only 76 crores this year. We are going slowly on this. We are asking our asset management team to retrieve the assets faster so that we can pool them.”
— Management, Executive Team

Despite a temporary slowdown in textile sector movements, Leap India increased its per-pallet yield from 1.45 to 1.54 rupees through successful price hikes. This demonstrates the company’s ability to drive revenue growth through pricing power even when specific industry volumes are subdued.

“The Movement Hire business, as I mentioned, was 711,000 pallets last year, and this year it was 766,000 pallets, which is an 8% increase on a quarter-on-quarter basis, even though overall revenue grew by 21%. This is not a desirable situation. It happened because of the slow performance of the textile industry. The cost of all raw materials, whether for plastic crates or textiles, has increased significantly. Companies in these industries therefore did not undertake as much transfer and movement... In the future quarters, we will continue improving our Movement Hire numbers. As far as price increases are concerned, we have taken a 5-6% price increase compared with last year. You need to understand that in the same quarter last year, our per-pallet yield was 1 rupee 45 paise, whereas this quarter it is 1 rupee 54 paise. That is an excellent increase, and this is how we look at our business.”
— Management, Executive Team

The lack of standardized truck sizes in India is the primary bottleneck preventing faster adoption of pallet movement services. Management is actively lobbying for standard container sizes, which would unlock significant logistics efficiencies and lower national supply chain costs.

“The reason Movement Hire is not increasing faster is the highly fragmented transportation system. We have approximately 1,000 different truck sizes. To standardize this, we have given recommendations to the relevant body that the number should be curtailed to at least 10. Then palletization and movement become very feasible, and we will be able to reduce supply chain costs by 5-6% of GDP. If you look at any developed country, it is not possible to make arbitrary changes to the truck body. In India, however, you can make almost any change to the truck body. We are now also speaking with OEMs, and they understand that one standard container size is the way forward. This is one reason why our supply chain costs will decline.”
— Management, Executive Team

Leap India is actively evaluating new acquisition targets both domestically and internationally to supplement its organic growth. Investors can expect more concrete details on these potential deals in the second or third quarter of the current fiscal year.

“In our last board meeting, which was conducted only yesterday, among a few other matters, we informed our shareholders and board members—and this is now also public—that we have examined a few acquisition opportunities. We are at a nascent stage, and we are looking at opportunities in India and elsewhere as well. As you have seen, we grow both organically and inorganically. We have certain acquisitions in mind. In Q2 or Q3, we will see more clarity on them, and we will inform investors and board members as we move forward.”
— Sunu Mathew, Chairman, MD and CEO

Auto Ancillary

Precision Camshafts | Micro Cap | Auto Ancillary

Precision Camshafts Limited is one of the world’s leading manufacturers and supplier of camshafts, a critical engine component, in the passenger vehicle segment based on its estimated global market share by volume. The company supplies several varieties of camshafts for passenger vehicles, tractors, light commercial vehicles and locomotive engine applications from its manufacturing facilities in Solapur, Maharashtra.

[Concall]

This is probably the most important disclosure from the call. The ₹1,500 crore order book comprises incremental business from existing and new customers and is expected to be executed over four to five years.

“Actually, during our previous con-calls as well as our AGM, we have disclosed this. I think a cumulative order book of approximately INR1,500 crores is what we have over and above the existing businesses from existing as well as new customers. And this is of course not an annualized order book. This will be spread over four to five years, and that is what we can share at this point of time. And beyond this, we are still working on newer opportunities.”
— Karan Shah, Whole-Time Director – Business Development

Several customer programmes have moved from development and validation into commercial production, creating a new source of incremental volumes as OEM production ramps up.

“The Indian PV market has continued to demonstrate strong growth, and we are seeing this momentum reflected directly in our customer programs. Several new programs with our key customers, including Mahindra, Tata Motors, Maruti Suzuki, have started production during this quarter. These programs are an important milestone for us as they move from development and validation into commercial production. We expect volumes for these programs to progressively ramp up as our customers increase production.”
— Karan Shah, Whole-Time Director – Business Development

Acquisitions could become an important diversification route, allowing PCL to move beyond camshafts into new products, customers and markets.

“No, there are several new opportunities we are looking at. As I mentioned during the call that our focus right now remains on our Indian standalone business as well as our subsidiary MEMCO through which we are doing several new products.
We are also actively looking at acquisition opportunities within India, and that will be a way for us to grow into new products, new markets, new customers, and so on. So, it’s not necessarily only camshafts, but we will focus on our India operations, that is for sure.”
— Karan Shah, Whole-Time Director – Business Development

Management sees a clear divergence between the growth opportunity in India and the weakness in European EV commercial vehicles, and is directing investment accordingly.

“Looking ahead, we remain extremely confident about the long-term outlook for Precision Camshafts Limited, and we see a clear difference between the outlook within our different businesses. Our standalone Indian business is entering a period of significant opportunity, supported by strong growth in the Indian passenger vehicle market, increasing investments by our customers, several new orders already secured, and a healthy pipeline of new programs. We are therefore continuing to invest in capacity, automation, and technology to take advantage of this growth.”
— Karan Shah, Whole-Time Director – Business Development

EMOSS is now the clearest weak spot in the group. Q1 revenue fell to ₹13.8 crore from ₹29 crore in Q4, prompting a more cautious stance on the subsidiary.

“Coming to our e-mobility subsidiary, EMOSS, in the Netherlands, the business reported a revenue of INR13.8 crores during the quarter compared to INR29 crores in the previous quarter. We have seen a slowdown in the EMOSS business, and we are currently taking a cautious view on its future outlook.”
— Karan Shah, Whole-Time Director – Business Development

Management attributed part of EMOSS’s weakness to the slow penetration of electric trucks in Europe, alongside insufficient infrastructure and reduced subsidies.

“While electrification of European passenger cars continues to progress, the situation in the electric commercial vehicle space remains considerably more challenging. In the first half of 2026, electrically chargeable trucks only accounted for 4.8% of all new EU truck registrations. The European Automobile Manufacturers’ Association also continues to highlight insufficient enabling conditions and pullback of subsidies as a constraint on adoption.”
— Karan Shah, Whole-Time Director – Business Development

Beyond weak EV adoption itself, restructuring across Europe’s auto industry is causing OEMs to delay decisions and rationalise investments.

“The broader European automotive industry is also going through a period of significant restructuring with OEMs under pressure to improve competitiveness, reduce costs, and rationalize investments. Against this backdrop, customer decision-making in the EV segment has become slower and program visibility has reduced. As a result, we remain cautious about the near-term outlook for EMOSS Europe.”
— Karan Shah, Whole-Time Director – Business Development

Asked directly whether EMOSS could eventually be wound down, PCL didn’t rule it out. Instead, management said the immediate objective is to make the subsidiary self-sustaining.

“Very hard to say right now, sir, because I think the markets are very dynamic. Things are changing rapidly. We have seen certain situations unfold in Europe which were unprecedented in the last eight to nine months, which have, you know, caused a lot of stir-up within the system there.
Of course, we have tremendous headwinds for this business. But we are trying our best to see what we can do to sustain it and to let it be a standalone business by itself without really requiring any support from India side. So, hard-hard to answer that question right now.”
— Karan Shah, Whole-Time Director – Business Development

The difficulties at EMOSS appear to have reinforced a more disciplined approach towards capital allocation, with the company prioritising returns over headline growth.

“At the same time, we take a cautious approach towards EMOSS, given the slowdown that we have experienced and the uncertain outlook for the electric commercial vehicle market. We will remain disciplined on cost and capital allocation and not pursue growth for the sake of growth.”
— Karan Shah, Whole-Time Director – Business Development

Despite caution around EMOSS Europe, PCL hasn’t abandoned e-mobility. Its India-developed EHCV platform has reached the customer-testing stage.

“Our own e-mobility business in India with our electric heavy commercial vehicle platform continues to progress. We have developed the EHCV platform and delivered the vehicle to a customer, and the customer is still undergoing evaluation and field trials at this point.”
— Karan Shah, Whole-Time Director – Business Development

Management summed up its capital-allocation framework clearly: scale the profitable Indian core, invest selectively elsewhere and maintain discipline across subsidiaries.

“Overall, our strategy remains clear: strengthen and scale our core Indian business, invest selectively in high-conviction opportunities, execute our new programs, and maintain financial and operational discipline across the group.”
— Karan Shah, Whole-Time Director – Business Development

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Quotes in this newsletter were curated by Meher and Srusti.

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