The Chatter: Patience & payoff
Edition #48
Welcome to the 48th 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 16 companies across 10 industries.
Software Services
Infosys
Financial Services
IDFC FIRST Bank Limited
Engineering & Capital Goods
ABB India Limited
CIE Automotive India Limited
SKP Bearing Industries Ltd
Schaeffler India Limited
FMCG
Apex Frozen Foods Limited
ITC
Godavari Biorefineries
Chemicals
Premier Explosives Limited
Healthcare
Sun Pharmaceutical Industries Limited
Sanofi India Limited
Metals
Jindal Steel Limited
Auto Ancillary
Bajaj Auto
Aviation
GMR Airports
Logistics
Glottis
Software Services
Infosys | Large Cap | Software Services
Infosys is a global leader in next-generation digital services and consulting, facilitating clients worldwide in their digital transformation journey. With over 40 years of experience, Infosys leverages cloud and AI technologies to empower businesses with agile digital solutions and continuous improvement.
[Concall]
Infosys views the current 5.5% AI revenue as the beginning of a significant, multi-year growth trajectory similar to its past digital transformation journey, eventually becoming a large portion of its business.
“What we see in this AI activity is it is going across many things in the areas that we described and becoming part of almost every discussion. And so our sense is it will now continue to grow... if you sort of look back a few years, we started to call out our digital numbers when they were around 25% or 20%, something like that, and we had a shift over 3, 4, 5 years where it became 65% to 70%. And so that is the sort of a play that you have.”
— Salil Parekh, Chief Executive Officer and Managing Director
Infosys has successfully absorbed substantial AI-related investments (partnerships, tech, training, sales & marketing) while maintaining margin stability, indicating efficient capital allocation.
“All of this is after absorbing all the investments that we saw through the day today, whether it was partnerships, whether it was tech investments, whether it was training investments, the sales and marketing investments that you see in our P&L already which has impacted, you know, 50 basis points. So we have absorbed all of that and delivered on our margins and maintained the margins stability.”
— Jayesh Sanghrajka, Chief Financial Officer
Despite AI’s speed, Infosys has not observed a significant reduction in the conversion timelines for large deals.
“So, if you look at the large deals that we have signed in the last few years and last few quarters, we have not really seen the timeline of those large deals shrinking at this point in time.”
— Jayesh Sanghrajka, Chief Financial Officer
Electric utilities are critical enablers of AI growth, as electricity supply is becoming a limiting factor for expanding AI data centers, creating a circular economy in the sector.
“If you look at utilities today, particularly electric utilities, they power and decide where the next data center should be and how fast the AI data centers can grow. In fact, there are views that electricity is the only limiting factor in growth of AI.”
— Ashish Kumar Dash, Segment Head-Energy, Utilities, Resources & Services
Infosys acknowledges some AI-driven compression in services like application development and infrastructure but believes the expansion from new AI opportunities will be larger, though unquantified.
“On the compression, we have talked about, again, what we understand to be where the compression is coming from, whether it is on application development, whether it is on infrastructure. We have not quantified that number for any external use at this stage. We have said that the expansion number from what we see today looks larger than the compression number.”
— Salil Parekh, Chief Executive Officer and Managing Director
Infosys emphasizes that the majority of AI implementation effort lies in data integration rather than model development, underscoring the importance of enterprise data foundations.
“When we look at AI programs, close to 60% of the effort goes into integrating structured and unstructured data into workflows.”
— Satish H.C. Chief Delivery Officer
Management signals continued investment in campus hiring to support transformation demand.
“We have recruited 20,000 college graduates this year… and next financial year, we also have a plan to recruit 20,000 college graduates.”
— Salil Parekh, Chief Executive Officer and Managing Director
Financial Services
IDFC FIRST Bank Limited | Mid Cap | Financial Services
IDFC FIRST Bank is a universal Indian bank created through the merger of IDFC Bank and Capital First. It is focused on building a high-quality retail deposit franchise and leveraging technology to provide credit to underserved consumer and MSME segments.
[Concall]
The bank has identified a total potential financial impact of 590 crore rupees from a localized fraud. This provides investors with a clear maximum exposure figure for the current incident.
“In terms of financial impact, the discrepancy currently found is about INR 490 crores. We have additionally estimated INR 100 crores, that’s how it comes to a INR 590 crores of impact which we have put out in the press release.”
— Sudhanshu Jain, Chief Financial Officer
The bank is introducing mandatory digital confirmations for all large physical branch transactions. This new control is designed to prevent future instances of manual check fraud and employee collusion.
“We are planning to put an explicit system based on confirmation of high value transactions for branch-based transactions exceeding a predefined threshold, we will take an explicit confirmation from the customer and we’ll make it mandatory.”
— V. Vaidyanathan, Managing Director and CEO
The bank has successfully reduced its cost of borrowing by 1.69% over seven years, reaching parity with established mid-tier competitors. This reduction significantly improves the bank’s ability to price loans competitively and protect its profit margins.
“We have brought it down today to 6.11%. So I’d like you to note, this is a reduction of 169 basis points. I’d like you to just pause for a minute and think about what the cost of funds of the mid-tier banks were at that point of time, mid-tier banks, and we all know the mid-tier banks.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
Management highlights that despite having higher credit costs than top-tier banks, their higher interest income leads to a superior risk-adjusted profit margin. This demonstrates that the bank’s lending model is fundamentally more profitable than standard peers when viewed across a full cycle.
“For our bank, again, look through 5-year cycle, all put together, good days, bad days, our NII by assets is 5.65%. And for 5.65% of assets, credit cost on asset is 1.36%. So that translates to 4.3% is our risk-adjusted NIM and if you take this number for top banks, it is basically 3.93% is NII by assets, credit cost is 0.58%, and that is at 3.35%.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
The bank expects to double its deposit and asset base to 6 lakh crore rupees over the next few years to reach a critical size. Once this scale is achieved, the high fixed costs of building the bank will dissipate, leading to a direct boost in net profits.
“In the next, maybe we are hoping the next few years, let’s call it, 4 years or 5 years, depending how it goes out, this will be INR 6 lakh crores. And at that point of time, this breaks even. And then whatever return on assets of the lending side translates to the P&L straightaway, okay?”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
Management is targeting an improvement in efficiency that would lower the cost-to-income ratio to the mid-50s percentage range. Reaching this target is expected to drive the Return on Assets toward a healthy 1.6%, signaling much higher shareholder returns.
“And therefore, at this 55%, 56%, if you plug that back into a business model, you would see that the ROA of this bank will start going to about 1.6 odd.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
The bank believes the recent credit issues within its microfinance portfolio have been resolved, clearing the path for smoother earnings. This allows management to focus on its core retail and commercial lending segments which are performing well.
“We’re looking quite hopeful for the upcoming Q4, Q1, Q2, Q3 of next financial year. We are looking at it with confidence because now I think with the microfinance issue behind us, rest of the model is anyway good and it’s just proven by coming out of the cycle.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
Bad loans as a percentage of total assets have declined, reflecting better collection practices and a stable credit environment. Lower bad loan ratios reduce the need for future provisions, directly supporting profit growth.
“The gross NPA ratio of the bank improved by 17 basis points to 1.69% from 1.86% in Q2. Similarly, the net NPA ratio of the bank stood at 0.53% compared to 0.52% in Q2.”
— Sudhanshu Jain, Chief Financial Officer and Head of Corporate Center
The long-term strategy is to shift the loan mix toward safer, lower-interest products like home loans as the bank matures. This shift will likely reduce overall risk and volatility in the bank’s earnings over the next decade.
“When we wake up 2030, we don’t see ourselves as a bank lending out at 13.5% and having cost of fund of maybe 3.5% or 4% and pocketing and having some insane ROEs... We would have probably come down the risk curve. We would have had a larger proportion of mortgages, business loans, loan against property, gold loans and these kind of businesses.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
Management views its credit costs as a necessary expense of testing and serving underserved markets using advanced technology. This suggests the bank will continue to accept moderate loan losses in exchange for the high yields found in niche retail segments.
“The unique DNA built at IDFC... which is lending to these segments by using technology and underwriting models and scorecards... we treat credit cost is a bit like research and development cost. It’s not something for us to zero at. That’s not what we’re striving for.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
The bank anticipates that new regulatory accounting standards for loan losses will not negatively impact its capital levels. This provides reassurance that the bank is well-prepared for upcoming shifts in banking regulations.
“I did touch upon that from implementation, first from a capital point of view, we feel that if the guidelines have to come through around ECL, around credit risk, around operational risk, this should be marginally positive for us on implementation.”
— Sudhanshu Jain, Chief Financial Officer and Head of Corporate Center
A higher percentage of the bank’s new loans are being generated through its own branch network rather than third-party agents. This trend helps the bank maintain better control over credit quality and lowers the cost of acquiring new customers.
“The business originating from branches give or take, is growing at about 35% to 40%. And so the proportion is obviously, by this mathematics, improving. But what is the exact percentage, maybe next time we’ll share with you.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
The bank is nearing the end of its ten-year transformation phase where it had to overcome significant legacy funding issues. Investors can expect the cost drag from the liability side to disappear over the next five years as the bank enters a high-profitability phase.
“Building a bank takes 10 years at least, not just building a bank, but actually to fix a INR 1 lakh crores funding problem, legacy plus build the growth of the bank. It’s already spent this time, maybe by next 4, 5 years, this -0.8% should come down towards 0.”
— V. Vaidyanathan, Managing Director and Chief Executive Officer
Engineering & Capital Goods
ABB India Limited | Large Cap | Engineering & Capital Goods
ABB India Limited is a leading technology company specializing in electrification and automation solutions across diverse industrial sectors. The company operates extensive manufacturing facilities in India and serves high-growth segments including data centers, renewables, and transport infrastructure.
[Concall]
The company is launching new energy-efficient products while increasing the local manufacturing of these items. Higher localization helps lower costs and allows the company to reach a wider variety of customers in India.
“We added a new line for energy-efficient drives and launched the next generation of machinery drives. When we introduce these, we focus on localization, which opens up new market segments and provides deeper penetration into the existing customer base.”
— Sanjeev Sharma, Managing Director
The new trade agreement between India and Europe is expected to streamline the company’s supply chain and technology access. Investors should view this as a long-term catalyst for improved operational efficiency and a broader product range.
“The India-Europe Free Trade Agreement (FTA) has been signed. While it may take about 6 months to be ratified and for the benefits to show, it is a net positive for India. It creates a two-way street of confidence, allowing us to deploy more portfolio and integrate our supply chains back into the EU.”
— Sanjeev Sharma, Managing Director
The company pre-purchased imported materials to navigate new quality control regulations in India. This move secures supply but will result in slightly elevated material expenses in the first half of 2026.
“Regarding QCO, we strategically stocked imported material in 2025, which will be consumed over the next two quarters, keeping material costs slightly higher.”
— Management, Executive Leadership
Demand for data center infrastructure is accelerating rapidly as projects scale from megawatts to gigawatts. This high-growth sector represents a major new opportunity for the company’s electrical and cooling solutions.
“We see a very strong pipeline [in data centers]. Both hyperscalers and large Indian business houses have big plans. Beyond hyperscale, we see momentum in co-locations. The AI summit has also highlighted future demand. We are seeing capacities moving from megawatt to gigawatt levels.”
— Sanjeev Sharma, Managing Director
The automation segment is recovering as customers in heavy industries finally move forward with delayed investment decisions. This revival in core sectors like oil and gas should bolster the company’s revenue in upcoming quarters.
“Our Process Automation division is seeing a revival. Decision-making stalled in the first half of 2025 but has started moving. We see good opportunities in oil and gas, power generation, and specialty chemicals.”
— Sanjeev Sharma, Managing Director
Data centers now make up a significant tenth of the total order backlog, showing it is no longer just a niche market. The company is using premium product features and local manufacturing to protect its pricing power against discount pressure.
“Data centers represent roughly 10-11% of our 10,471 crore backlog. Regarding pricing, customers always want lower prices, but we balance this by localizing and focusing on professional premiumization.”
— Management, Executive Leadership
CIE Automotive India Limited | Small Cap | Engineering & Capital Goods
CIE Automotive India is a multi-technology automotive components supplier with a global manufacturing presence across India, Europe, and Mexico. The company produces a wide range of parts including forgings, gears, and castings for passenger cars, commercial vehicles, and tractors.
[Concall]
The majority of the company’s revenue is now generated from its Indian operations rather than its international plants. This geographic mix highlights the increasing importance of the Indian market to the firm’s overall financial health.
“Plants in India accounted for 65% of the company’s sales and the rest of that 35% came from Europe and Mexico.”
— Vikas Sinha, Senior Vice President Strategy
The company’s European forging business is facing significant headwinds from international competition and the shift toward electric vehicles. This weakness explains why management is prioritizing the protection of profit margins over aggressive growth in Europe.
“The European forgings market, our largest vertical in Europe, continues to be weak on account of competition from China as well as India and also transition to EVs.”
— Vikas Sinha, Senior Vice President Strategy
The company is focusing its capital spending on increasing manufacturing capacity in India for both local and global sales. This strategy positions India as a central hub for the group’s future production needs.
“We’ll continue to invest in expanding our production capacity within India to cater to both domestic and export customers.”
— Vikas Sinha, Senior Vice President Strategy
The aluminum division is specifically targeting new components required by the electric vehicle market. This move ensures the company remains relevant as the industry transitions away from traditional engines.
“The aluminum business is developing competencies for different housings that will be used by electric 2-wheelers and electric 4-wheelers.”
— Vikas Sinha, Senior Vice President Strategy
While the company is winning electric vehicle contracts, the vast majority of new business in India still comes from traditional engine platforms. This indicates a gradual rather than sudden transition to electric mobility in the Indian market.
“In India, approximately 10% of these new businesses are for EVs, 90% are for internal combustion engine. That’s the share that we got last year.”
— Ander Arenaza Alvarez, Chief Executive Officer
Upcoming trade deals are expected to make Indian-made auto parts more competitive and attractive to European buyers. This could lead to a significant increase in export volumes for the company’s Indian factories.
“The free-trade agreement between Europe and India will boost the demand of Indian components, especially in certain technologies like forging and iron casting.”
— Ander Arenaza Alvarez, Chief Executive Officer
The company is physically relocating production equipment from Europe to India to take advantage of lower costs and higher demand. This move is a clear example of the company’s shift in focus toward its more profitable Indian operations.
“We are planning to move certain capacity from our European sites to India... by April, we will start moving some presses, fully automatized presses.”
— Ander Arenaza Alvarez, Chief Executive Officer
SKP Bearing Industries Ltd | Nano Cap | Engineering & Capital Goods
SKP Bearing Industries is a specialized manufacturer of high-precision needle rollers, cylindrical rollers, and steel balls for the automotive and industrial sectors. The company operates vertically integrated manufacturing facilities in India and France, serving major global Tier-1 and Tier-2 bearing companies.
[Concall]
Management is expanding the roller manufacturing plant to reach a monthly production target of 200 tons. This capacity increase is necessary to fulfill rising customer demand and support future revenue growth.
“We have started expansion in the roller plant itself. Some capacity has been added and utilization has started. Further addition is on the way, which is in line with our targets of 200 tons per month.”
— Shrikda Patil, CFO
The company is actively diversifying its customer base to avoid being overly dependent on any single industrial sector. This strategy helps protect the business from downturns in specific industries and stabilizes long-term income.
“We underwent an initiative to balance our portfolios to reduce the weightage of any one industry. That balancing strategy is working well, and we are seeing our portfolio diversify.”
— Shrikda Patil, CFO
A delay in government regulations against imports has slowed down the adoption of locally made products from the company’s new ball plant. Investors should note that the plant’s profitability is currently linked to these regulatory timelines.
“Because that activity [Quality Control Orders] was delayed by the government, people are currently more relaxed, and imports are in full swing. This is a challenge, which is why the utilization of Plant 3 is not progressing as fast as planned.”
— Shrinand Parshikar, Chairman & Managing Director
New customers in the bearing industry start with very small trial orders before committing to large volumes. This means that revenue from new client wins will build up slowly over several quarters rather than immediately.
“Usually, in our industry, the ramping-up process takes another year. If the annual demand is 100,000 pieces, they might start with 1,000 pieces every month. We are in the ramp-up stage for certain customers.”
— Shrinand Parshikar, Chairman & Managing Director
Earnings this quarter were reduced by mandatory one-time costs related to downsizing the workforce in France. These are non-recurring expenses, meaning the underlying business is likely more profitable than the reported numbers suggest.
“The substantial part of the quarter’s expense was the one-time employee retirement cost required by European regulations.”
— Shrinand Parshikar, Chairman & Managing Director
Schaeffler India Limited | Mid Cap | Engineering & Capital Goods
Schaeffler India is a leading manufacturer of high-precision components and systems for automotive and industrial sectors, including bearings and engine parts. The company operates a significant export business while maintaining a dominant domestic presence through its automotive and industrial divisions.
[Concall]
The implementation of tax reforms has reduced the overall cost of manufacturing and purchasing vehicles in India. This policy shift is expected to sustain demand and increase sales volume across the automotive sector.
“A hallmark of Q4 was the GST 2.0 reform, which provided a big boost for the automobile industry by simplifying compliance and lowering cascading costs. This increased vehicle affordability for consumers.”
— Harsha Kadam, Managing Director and Chief Executive Officer
The transition to BS-VI emission standards is creating a growing market for high-quality replacement parts in the aftermarket segment. This trend provides a steady, long-term revenue stream as more modern vehicles require maintenance.
“We continued adding products as more BS-VI vehicles required repairs. In bearings and industrial solutions, we had significant wins in ball bearings, needle roller bearings for two-wheelers.”
— Harsha Kadam, Managing Director and Chief Executive Officer
The company has successfully sourced 78% of its requirements locally while maintaining high factory activity. Reducing reliance on imports helps protect profit margins from global supply chain disruptions and currency changes.
“Localization reached 78% in the last quarter. Our plants are running above 85% capacity utilization. We enter 2026 with positive traction and a focus on cost management.”
— Harsha Kadam, Managing Director and Chief Executive Officer
The company is positioning itself to supply parts for both fully electric and hybrid vehicles. This diversified approach reduces the risk of betting on just one type of green technology transition.
“While battery electric vehicles see an upswing, we also see traction in hybrid technology. We believe both will coexist.”
— Harsha Kadam, Managing Director and Chief Executive Officer
Hybrid vehicles require more complex parts than traditional engines, allowing the company to sell more expensive components per car. Higher content per vehicle is a key driver for expanding profit margins over time.
“The hybrid solution is also an add-on to the IC engine technology, which increases our content per vehicle. Since we deliver at a module and subsystem level, the value is higher.”
— Harsha Kadam, Managing Director and Chief Executive Officer
Following the Vitesco merger, the company is winning new orders for advanced electronics in electric vehicles. Integrating electronics with traditional mechanical parts makes the company a more vital supplier to automakers.
“We have secured new business in battery management systems (BMS), specifically in the electric vehicle space. Our designs have been approved. The Vitesco portfolio is very complementary to our mechanical offerings.”
— Harsha Kadam, Managing Director and Chief Executive Officer
A potential trade deal with the EU may change how the company decides to source its raw materials and parts. While exports may not change much, the cost of imports could drop, affecting local manufacturing decisions.
“The FTA will require us to revisit our localization strategy to see if importing remains more competitive than local development. For exports to Europe, duties are already between 0-2%, so we do not see major changes there.”
— Harsha Kadam, Managing Director and Chief Executive Officer
The transfer of a production line from the UK to India is complete and will start contributing to revenue in 2026. This move demonstrates the company’s strategy to use India as a lower-cost global manufacturing hub.
“The relocation is done, but laying out the lines and full realization takes time. We will see the full impact this year. We are not yet disclosing specific numbers as order books are being reallocated.”
— Harsha Kadam, Managing Director and Chief Executive Officer
Strong demand for electric vehicle components is being met with deeper local manufacturing for e-axles. Increasing local content in EV parts will help the company maintain its competitive pricing as the market matures.
“The e-mobility business growth is very strong, and we are riding on our customers’ success. We are increasing competitiveness through phase two of localization for E-axles.”
— Harsha Kadam, Managing Director and Chief Executive Officer
The company is doubling down on manufacturing specialized industrial bearings locally to stay ahead of competitors. This strategy aims to maintain market leadership in the heavy industry sector despite new entrants.
“Our strategy is to increase our localization content. We will continue this journey, specifically focusing on spherical roller bearings. Competition always exists, but our focus remains on defining our own growth strategy.”
— Harsha Kadam, Managing Director and Chief Executive Officer
FMCG
Apex Frozen Foods Limited | Micro Cap | FMCG
Apex Frozen Foods is a vertically integrated producer and exporter of processed shrimp products to global markets. The company operates hatcheries and processing facilities focused on high-value products like ready-to-eat and ready-to-cook seafood.
[Concall]
Recent trade policy shifts have cut U.S. import tariffs on Indian shrimp in half, significantly easing a major trade barrier. This reduction is expected to drive a recovery in export volumes and improve competitiveness in the North American market.
“While tariffs were increased to 50% in August 2025, Indian shrimp export tariffs have now been reduced to 25% effective 7 February 2026. This development is expected to support an improvement in the volumes going forward.”
— Choudary Karuturi, Managing Director and CFO
An upcoming free trade agreement with the European Union is expected to lower duties on Indian seafood exports. This agreement provides a long-term growth catalyst for the company by opening up a high-margin geographic segment.
“The proposed India EU FTA indicating tariff reductions in a structurally positive development, it’s a structurally positive development for the industry as well as the company in specific.”
— Choudary Karuturi, Managing Director and CFO
Hatchery activity levels indicate that farmers are actively stocking ponds for the upcoming harvest season. Positive hatchery performance is a leading indicator of raw material supply security for the company’s processing plants.
“So currently, yes, the stockings are going on. And definitely, like you rightly mentioned, the hatchery operations are going in a very -- in a good way.”
— Choudary Karuturi, Managing Director and CFO
The lowering of U.S. tariffs is expected to bring back international customers who had previously sourced from competitors like Ecuador. This shift should lead to increased order inquiries and higher capacity utilization in the coming months.
“Now the tariffs being reduced from 50% to 25%, definitely, there is certain a positivity among the customers also who would want to go back to India and place the orders.”
— Choudary Karuturi, Managing Director and CFO
The company is expanding its footprint into new markets like Russia and Australia to further diversify its revenue stream. Success in these new regions would provide incremental volume growth outside of the traditional U.S. and EU channels.
“We are continuing to pursue those. And I think by the end of this financial year, we would be able to start our sales there... especially in both those markets [Russia and Australia], we see a good potential.”
— Choudary Karuturi, Managing Director and CFO
Ready-to-eat capacity utilization remains very low at just 11%, representing a major untapped opportunity for growth. Scaling this high-margin segment is critical to management’s strategy for earnings expansion.
“Only on the ready-to-eat capacity, what we have utilized as of this year, it’s only around 11%. So -- but currently, it is around 11% on the -- yes, currently, it was around 11% of ready-to-eat, and there is a good headroom for us to grow a lot on that.”
— Choudary Karuturi, Managing Director and CFO
Shrimp farming is expanding beyond traditional coastal areas into inland Indian states, diversifying the company’s sourcing options. A broader geographic supply base reduces the risk of localized crop failures or climate-related disruptions.
“Now Vannamei or shrimp farming is not restricted to the coastal states any longer - this has gone more inland also... Some of the Northwestern states also have been increasing, especially into Haryana and Rajasthan.”
— Choudary Karuturi, Managing Director and CFO
ITC | Large Cap | FMCG
ITC Limited is a diversified conglomerate operating in Fast-Moving Consumer Goods, Paperboards, Agri Business, and Information Technology sectors. It is a leading FMCG marketer in India, dominant in the Paperboard and Packaging industry, and known for empowering farmers through its Agri Business.
Often used as a barometer for the broader economy, FMCG’s correlation with GDP growth is real but evolving, as the basket of consumption itself continues to shift.
“It’s a fair correlation because India is, after all, a consumption-driven economy and FMCG does correlate to economic progress. However, we have to keep in mind that the basket of consumption is also shifting, and therefore the exact correlations will also evolve over time. But yes — growth in GDP and economic progress do correlate to consumption.”
— Sanjiv Puri, Chairman & Managing Director, ITC
The sheer scale of India’s FMCG opportunity becomes clearer when viewed through the lens of where peer economies were at a similar stage of per capita income growth.
“India will be a 21 trillion rupee FMCG market by 2030. If one correlates to the experience of other economies, when per capita GDP reaches $4,000 to $5,000, it becomes a point of inflection on consumption — and that is certainly going to happen over time. So from a size perspective, the market will only get much bigger.”
— Sanjiv Puri, Chairman & Managing Director, ITC
The democratisation of capital has fundamentally altered the competitive dynamics of Indian FMCG, making it a far more crowded and contested space than it was even a decade ago.
“Access to capital is no longer a problem in India — if you have a great idea, capital is available. So there are newer entrepreneurs coming into legacy systems, and many more people entering new-age systems like D2C, alongside a lot of local, regional, national, and MNC players all competing.”
— Sanjiv Puri, Chairman & Managing Director, ITC
ITC’s portfolio strategy reflects a deliberate balance between nurturing its core and actively building the brands of tomorrow — through both internal development and targeted acquisitions.
“We’ve been doing this at ITC — both organically by scaling our core brands and seeding vectors for future growth, and also inorganically, particularly when seeding those future growth vectors. We’ve acquired several new-age brands like Yoga Bar, 24 Mantra, Prasuma, Mother Sparsh, and Baby Care, while also supplementing these with internal interventions like Right Shift for cohorts over 40 with an active lifestyle, and Prana, among others.”
— Sanjiv Puri, Chairman & Managing Director, ITC
In an industry where speed of innovation has become a competitive moat, ITC’s sustained R&D investment has given it a structural edge over rivals that have historically underinvested.
“Our R&D intensity as a country is low, but at ITC, R&D has always been core to us as a challenger brand. We are now recognized as the largest private-sector innovator after CSIR — the ITC Life Sciences and Technology Centre ranks second. In today’s world, innovation is more critical than ever because there are many more channels and many more cohorts emerging, and you need to move fast.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Beyond skills and expertise, the kind of talent that will drive future growth in FMCG needs to combine entrepreneurial instinct with the organisational freedom to act on it quickly.
“Talent is critical — entrepreneurial talent. At ITC, we call it ‘proneurial’ talent. You need people with a high degree of learning agility, and you need processes designed to empower fast decision-making. These are the real ingredients required for enterprises to reimagine themselves and be prepared for the future.”
— Sanjiv Puri, Chairman & Managing Director, ITC
India’s talent story is not just about what is available domestically — it is also about the growing pull of returning diaspora professionals who bring a global lens back with them.
“The key is to blend people with deep domain expertise with strong market insights. There is also a tremendous pool of experienced talent overseas — people with great wisdom who actually want to come back to India because of the excitement here. So you blend talent that has grown up in India with talent that has worked overseas, and you get a global perspective combined with local insights.”
— Sanjiv Puri, Chairman & Managing Director, ITC
While India’s overall R&D investment remains well below global benchmarks, the country’s digital infrastructure has created conditions for unusually rapid AI adoption on the ground.
“Overall investments in R&D in the economy are not substantial — much lower than what other economies are doing — and out of that, the private sector accounts for only about 40%. So we have a long way to go. On AI specifically — the adoption and diffusion of AI in India is happening at a much faster pace than we are seeing anywhere else in the world. One key reason is our very powerful digital ecosystem and public digital infrastructure, which enables people to participate at a very low cost.”
— Sanjiv Puri, Chairman & Managing Director, ITC
At ITC, the time between spotting a consumer trend and acting on it has been dramatically compressed by an AI-powered intelligence system that operates across 22 product categories simultaneously.
“We have a centre we call the ‘Sixth Sense,’ which monitors hundreds of trends, distills them through proprietary algorithms, and converts them into actionables across 22 different categories. What would have taken months in the physical world is now available in near real time. And if you can act on it quickly — which you can, if you have invested in the right R&D platforms — you can convert a requirement into a product very fast.”
— Sanjiv Puri, Chairman & Managing Director, ITC
The protein and gut health wave served as a live test case for how ITC’s insight-to-product pipeline works in practice — moving rapidly from trend identification to a range of new market offerings.
“One of the strong trends today is around gut health, protein, and fiber. When we picked up on the protein trend, we very rapidly pivoted the Yoga Bar brand entirely to proteins — we went into protein beverages, soya chunks, and protein atta. AI tools help you shortlist very rapidly — in hours — and zero in on a limited number of viable options from there.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Quick commerce’s trajectory in India looks increasingly like what East Asian markets experienced at a similar stage, suggesting the current growth rates may only be the beginning.
“Quick commerce is a large segment. It is estimated to be around one trillion rupees today, and some data suggests it could be six trillion by 2030. We are seeing growth close to 40%. It is not about taking your standard general trade portfolio and trying to sell it in every channel — there is a right assortment for the right channel, and each channel throws up new opportunities that could not be served through earlier channels.”
— Sanjiv Puri, Chairman & Managing Director, ITC
One of the less-discussed advantages of quick commerce is its ability to surface and scale niche products that physical retail simply could not accommodate due to shelf space constraints.
“One of the advantages of e-commerce and quick commerce is that you can bring on board a lot more variety and niches, which you cannot do in a physical store due to space constraints. Consumers in India always wanted certain specialised products but found it difficult to get them — some imported them, some put them on their shopping list when travelling abroad. That is now changing.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Technology is also reshaping the economics of general trade, enabling ITC’s salesforce to move from reactive order-taking to proactive, data-driven outlet-level recommendations.
“We have an AI and GenAI-based system that guides the salesman, based on an analysis of 12,000 parameters — beyond what the outlet regularly buys, it identifies two or three additional products that may be of interest to that outlet. We also have an app called Unity on the shopkeeper’s handheld device, so that whenever they have spare time, they can browse the assortment and order anything they believe can be sold in their outlet.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Having built the non-cigarette FMCG business to 24,000 crores over two decades, the next phase of ambition is squarely focused on doubling down — with category leadership as the true north, not just scale.
“Last year we had a turnover of about 22,000 crores, and the run rate right now is around 24,000 crores — all achieved in roughly two decades. Our next natural milestone has to be 50,000 crores. More importantly, it’s not just about scale — it’s about attaining category leadership — not just in terms of size or market standing, but product leadership.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Far from being a passing trend driven by favourable conditions, premiumisation in India has structural legs rooted in the same economic forces that transformed other consumption categories before it.
“Premiumisation is very natural to a growing economy — it is a reflection of economic progress. Some time back, you had just the Ambassador or the Fiat or the Standard in the car market. Look at the variety we have today. Premiumisation is a sign of economic progress, and it is growing much faster than the overall economy in FMCG. It’s there to stay.”
— Sanjiv Puri, Chairman & Managing Director, ITC
The assumption that premium consumption is an urban story is increasingly being challenged by what ITC is seeing on the ground across rural India.
“You’ll be surprised at how widely premium products are sold across the country. With even rural India now owning smartphones and becoming far more aware than before, aspirations are rising there too. We are surprised not just that they are selling in rural India, but at the depth to which they penetrate.”
— Sanjiv Puri, Chairman & Managing Director, ITC
As a structurally underserved market relative to urban India, rural is expected to be the faster-growing engine of FMCG demand over the next decade — and that is by design, not by default.
“Rural India should naturally grow faster than urban, because that is where there is the most opportunity. It is a relatively underserved market compared to urban India. Incomes need to move faster there, and I expect that will continue. I do expect rural to stay ahead — and that is actually a healthy sign of India’s economic progress.”
— Sanjiv Puri, Chairman & Managing Director, ITC
At nearly 400 million strong and accounting for close to half of total FMCG spends, Gen Z is not just a demographic trend — it is actively reshaping what categories mean and how products are experienced.
“Gen Z is close to 400 million people accounting for about 46% of spends today. They are well-informed, focused on purpose, have very specific requirements around clean labels and health, and are even redefining indulgence. They have a lot of interest in flavours from overseas and regional cuisines.”
— Sanjiv Puri, Chairman & Managing Director, ITC
The multi-cohort nature of India’s consumer market means no single generation tells the full story — with the 40-plus segment and Gen Alpha both representing equally compelling, if very different, opportunities.
“Gen Z is not the only cohort. There are 250 million people above 40 who want nutrition-dense products for an active lifestyle — that’s where Right Shift comes in. And then there is Gen Alpha — 300 million strong — who will influence the next wave of consumption. The Indian market is getting very interesting and exciting — it is such a large market that all of these segments can create genuinely exciting opportunities.”
— Sanjiv Puri, Chairman & Managing Director, ITC
In a world where disruptions — whether geopolitical, climatic, or technological — have become the baseline rather than the exception, the ability to absorb and navigate shocks is now as important as the ability to grow.
“Geopolitics, climate change, technology-driven disruption, evolving consumer preferences, and demographic shifts — these are all par for the course now. We can no longer be surprised by unanticipated developments in the world. We have to stay invested and learn to navigate these situations, and we need to build our capabilities accordingly.”
— Sanjiv Puri, Chairman & Managing Director, ITC
On the question of food regulation, the conversation cannot stop at rules and guardrails — consumer awareness and individual accountability must be part of the equation too.
“There are regulations in India that were made a long time back, and the world and India have both changed. We need to contemporise them. At the end of the day, each one of us has to take responsibility for our health. It may be perfectly fine to have one samosa, but whether it’s fine to have ten is a call each person has to take. Consumer education is important so that we are all contributing to building a healthier society.”
— Sanjiv Puri, Chairman & Managing Director, ITC
For early-stage consumer brands, the temptation to chase topline growth through D2C can be costly — and the fundamentals of unit economics should always come first.
“Standalone D2C is expensive — the cost of customer acquisition is very high. Unless your brand has the margins to support that cost, standalone D2C will not work. Generally, you need to be on the marketplaces — that is where consumers are shopping. Don’t try to buy turnover. Create models with unit economics that actually work, because there are many startups with great ideas that are not able to progress because the economics didn’t work out and they ran out of cash.”
— Sanjiv Puri, Chairman & Managing Director, ITC
Godavari Biorefineries | Small Cap | FMCG
Godavari Biorefineries is a leading manufacturer of ethanol-based chemicals in India, offering a diverse product portfolio including bio-based chemicals, sugar, ethanol, and power. Their products cater to various industries like food, beverages, pharmaceuticals, power generation, and personal care.
[Concall]
The Dimethyl Ether (DME) to CO2 technology is a promising platform that simultaneously addresses climate change mitigation through carbon capture and global energy needs by converting captured carbon into energy.
“Platform technology in the sense the whole world is looking at two things. They’re looking -- the whole world is looking at many things. But I will talk about two of those things that the world is looking at. One is mitigating climate change and second is meeting energy needs. Now this is a very exciting technology that meets both these things at the same time. Because it is a carbon capture process and it converts that carbon which is captured into energy that the planet needs.”
— Samir Somaiya, Chairman and Managing Director
Godavari Biorefineries secured a US patent for an anti-cancer molecule and established a US subsidiary, Sathgen Therapeutics LLC, to commercialize this intellectual property through out-licensing.
“A key highlight was the grant of a US patent for a novel anti-cancer molecule, targeting Triple Negative Breast Cancer, highlighting the strength of our research capability. We also incorporated Sathgen Therapeutics LLC in the US, as a wholly owned step-down subsidiary to market our IP and pursue out-licensing partnerships.”
— Samir Somaiya, Chairman and Managing Director
The bio-based chemical segment significantly boosted profitability in Q3 FY26, with its EBITDA margin improving to 7.7% due to a focus on specialty and value-added products.
“From a segment perspective, the bio-based chemical business maintained a key contributor to profitability supported by a higher share of specialty and value-added products. Notably, the EBITDA margin of bio-based chemicals improved to 7.7% in Q3, FY26 compared to 4.5% in the corresponding quarter last year.”
— Samir Somaiya, Chairman and Managing Director
The company is diversifying its ethanol feedstock to include maize/grain, alongside sugarcane juice and molasses, to mitigate climate and feedstock supply risks.
“So, the feedstock risk is being mitigated by adding the additional maize/grain-based facility. So, as we look forward, we will be looking at making ethanol from sugarcane juice, B-molasses, or molasses that is cane molasses, and also maize or grain... By doing this, we are mitigating climate risk as well as the associated feedstock risk.”
— Samir Somaiya, Chairman and Managing Director
Despite rising cane costs and stable ethanol prices, which have compressed margins compared to the prior year, the company’s ethanol business continues to operate profitably.
“So today the company there is undoubtedly the fact that cane prices have increased, and ethanol blend prices have remained the same. That has affected the margin compared to the previous year, that is for sure. However, margins remain in the positive territory.”
— Samir Somaiya, Chairman and Managing Director
The industry is actively lobbying the government for higher ethanol prices from B-heavy molasses and sugarcane juice to reflect rising cane costs and improve distillery margins.
“The industry has been requesting the government for an increase in the price for ethanol from B-heavy molasses or from sugarcane juice commensurate with the increase in cane price that has happened over the last two to three years for which there is no corresponding increase in ethanol price.”
— Samir Somaiya, Chairman and Managing Director
The company expresses strong optimism for the ethanol sector, citing India’s early achievement of the E20 blending target by 2025 as a catalyst for potentially bolder future blending goals and flex-fuel vehicle adoption.
“I am very optimistic about the green transition. I do expect that the country -- let’s take a step back. The country had targeted for an E20 installation by 2030. And then we have advanced and reached that target by 2025... It now enables the government to imagine a future which can once again be ambitious to reset the next target for blending.”
— Samir Somaiya, Chairman and Managing Director
Chemicals
Premier Explosives Limited | Small Cap | Chemicals
Premier Explosives Limited is a major Indian manufacturer of high-energy materials, specializing in industrial explosives and sophisticated defense products like propellants and countermeasures. It holds a unique strategic position as the only Indian company qualified to manufacture countermeasures and serves as a key exporter of rocket motors.
[Concall]
Premier Explosives has secured a large contract for countermeasures from the Indian Air Force. This win solidifies the company’s dominant position as a critical technology provider for the domestic defense sector.
“In October, we secured a major order worth INR 429 crores from the Ministry of Defense, Government of India for the supply of chaffs and flares to the Indian Air Force. This reinforces our leadership in countermeasure systems and reflects continued confidence in our technological capabilities.”
— T. V. Chowdary, Managing Director
The company enjoys a monopoly-like status in the Indian countermeasures market and is expanding its footprint in the global rocket motor market. Such high barriers to entry provide a competitive moat that protects long-term profitability.
“Premier occupies a unique strategic position as the only Indian company qualified to manufacture countermeasures and as a key exporter of fully assembled rocket motors.”
— T. V. Chowdary, Managing Director
Current year revenue targets are heavily dependent on the timing of government inspections and final delivery clearances. Any delays in these bureaucratic processes could push expected revenue into the following fiscal year.
“Now the year is coming to closer to end, and we have stocks, which need to be inspected and delivered to MoD. So if the inspections are completed and then delivery is completed, yes [the guidance is possible].”
— T. V. Chowdary, Managing Director
The company is strategically diversifying its product portfolio from simple propellants into complex mines and ammunition. This diversification reduces reliance on any single product line and opens up new growth avenues in the defense sector.
“We are adding more products... countermeasures, we are the number 1 in the country. The third one is the mines... anti-personnel mines, we are already delivering. Then the next step comes is the ammunition.”
— T. V. Chowdary, Managing Director
Premier is the sole source for propellants in the QRSAM missile program, though official orders are still pending. This positioning ensures the company will be a primary beneficiary whenever the government scales up missile procurement.
“The QRSAM order is yet to be received. If any order comes, we are the supplier. The propellant is to be supplied by only Premier... somewhere around 10% to 15% is the percentage contribution of propellants.”
— T. V. Chowdary, Managing Director
A significant portion of countermeasure inventory is currently awaiting inspection before it can be recognized as revenue. This suggests a potential spike in revenue once these government approvals are cleared.
“Around INR 110 crores is left over... around INR 30 crores worth material is with us as on date and some more is on the pipeline, which we are thinking that in the next month or in the first quarter of the next year, we’ll be able to exit it.”
— T. V. Chowdary, Managing Director
The company anticipates steady and long-term demand for its landmine products due to national security requirements. This provides a stable, recurring revenue stream separate from one-off missile or rocket contracts.
“The demand will remain continuously for the anti-personnel and also for anti-armored vehicle [mines]... because the mines are needed by Army all along our border when there are tensions.”
— T. V. Chowdary, Managing Director
The company plans to invest INR 60 crores to further expand its propellant and rocket motor manufacturing capabilities. Continued investment in these high-tech areas is essential for supporting future order book growth.
“Around INR 60 crores is the capex for Katepally and PDK together... additional capacity of propellant manufacturing and casting and also integration of rocket motor integration.”
— T. V. Chowdary, Managing Director
Andhra Pradesh is emerging as the primary location for the company’s next major facility expansion. Securement of land is a critical step that will allow the company to scale operations beyond its current site constraints.
“The Andhra government has cleared our application for land in Andhra. So that appears to be more closer than Odisha. That also will add to our capex plan once the land is allotted to us.”
— T. V. Chowdary, Managing Director
Healthcare
Sun Pharmaceutical Industries Limited | Large Cap | Healthcare
Sun Pharma is the largest pharmaceutical company in India and the fourth largest specialty generic company globally. It manufactures and markets a diverse portfolio of generic and specialty medicines across more than 100 countries.
[Concall]
Sun Pharma is significantly outperforming the broader Indian pharmaceutical market in terms of unit sales growth. This suggests strong brand equity and effective distribution across key therapeutic areas.
“Our volume growth of 6.3% for the quarter beat IPM volume growth, which is at 1.2%.”
— Kirti Ganorkar, Managing Director
The company is prepared to capture the massive obesity and diabetes market in India immediately upon patent expiry. Early regulatory approval positions them as a first-mover in a high-demand therapeutic segment.
“Sun’s plan is to be in the market on day one of a generic launch [of Semaglutide]... We have already received the regulator’s approval for both the indication of chronic weight management as well as treatment of type 2 diabetes.”
— Kirti Ganorkar, Managing Director
Intense competition in the US generic market continues to act as a drag on overall regional revenue. This reinforces the management’s decision to pivot heavily toward specialty products to drive future US growth.
“Growth in innovative medicines was offset by lower sales in the generic business due to additional competition in certain products.”
— Richard Aschoff, CEO North America
Initial market reception for the new oncology drug Unloxit appears positive among US healthcare providers. Successful uptake of new specialty launches is critical for replacing revenue lost to generic competition.
“Our early launch efforts [for Unloxit] have been focused on education and awareness for healthcare professionals... The message is resonating in terms of the balance this product provides between efficacy and safety.”
— Richard Aschoff, CEO North America
Strong double-digit growth in emerging markets is successfully diversifying the company’s revenue streams. Success in regions like Romania and Brazil provides a hedge against regulatory or pricing risks in major Western markets.
“Our formulations revenues in emerging markets were US dollar 337 million, up 21.6% over Q3 last year. The underlying growth in constant currency terms was 14%.”
— Alok Shanghvi, Chief Operating Officer
A significant portion of the R&D budget is now dedicated to developing high-value innovative medicines rather than just generics. This investment strategy aims to build a sustainable pipeline of proprietary drugs with higher entry barriers.
“Innovative R&D accounted for 30.5% of our total R&D spend and stands at 7.2% of Global Innovative Medicine sales for the quarter.”
— Dilip Shanghvi, Chairman
The company is actively seeking smaller acquisitions to strengthen its global footprint and expand its reach. Targeted M&A remains a core component of the strategy to accelerate scale in key geographies.
“For emerging markets, we are looking at tuck-ins or smaller acquisitions which we can look at integrating with our existing business to get scale … We have also indicated that for an acquisition, if necessary, we are comfortable raising debt.”
— Dilip Shanghvi, Chairman
The company is reconsidering its entry into the biosimilar market due to evolving regulations and market dynamics. A formal entry into this space would represent a major new capital investment cycle for the firm.
“On biosimilars, we are evaluating and re-looking at it because we have to look at it comprehensively, including manufacturing investment, overall cost of development, and the time for the investment to produce a meaningful return.”
— Dilip Shanghvi, Chairman
Clinical trials for the company’s proprietary GLP-1 candidate are progressing toward major data milestones in the near term. Positive results from these studies would significantly increase the value of Sun’s internal drug pipeline.
“We are publishing Phase 2a data in scientific conferences both for diabetes and NASH over the next few months. The current Phase 2b study which has started should possibly conclude within 12-18 months.”
— Dilip Shanghvi, Chairman
Sanofi India Limited | Small Cap | Healthcare
Sanofi India Limited is a leading biopharmaceutical company focusing on therapeutic areas such as diabetes, cardiology, and central nervous system diseases. The company is currently transitioning its business model towards a partnership-led distribution strategy while maintaining its leadership in the Indian insulin market.
[Concall]
The company’s primary insulin brand continues to dominate its market segment even as new classes of diabetes drugs gain popularity. This resilience demonstrates the strong brand equity and defensive nature of Sanofi’s core product portfolio.
“Lantus, our flagship brand, continues to have market leadership of 31% in the basal segment with a volume acceleration of +6%. This is despite the turbulence in the insulin market and the emergence of GLP-1.”
— Deepak Arora, Managing Director
The company is advancing several high-potential clinical trials to bring new diabetes treatments to the Indian market. A robust R&D pipeline is essential for maintaining a competitive edge as therapeutic standards evolve.
“We are also fueling our potential pipeline to address unanswered questions in type 1 and type 2 diabetes. We have various phase 2 and phase 3 studies ongoing for Teplizumab, Gabikinab, and Fremanezumab.”
— Deepak Arora, Managing Director
The company achieved significant cost reductions following its organizational restructuring and move to partnership models. These efficiencies are expected to protect margins while the business model stabilizes.
“Employee costs and other OPEX are down 17% in the quarter and 17% for the full year. This reflects the strategy of the company and the various partnership contracts signed.”
— Rashid Harjari, CFO
Sanofi is positioning its new drug Soliqua to capture market share as the demand for advanced GLP-1 related therapies grows in India. Double-digit growth targets indicate management’s high confidence in this specific product’s trajectory.
“Soliqua is only 1 year old. As GLP-1 accelerates, we aim for double-digit growth for Soliqua in both private and public sectors.”
— Management, Executive Leadership
Management has clarified that there are no current plans to merge the listed Indian entity with the parent company’s private Indian operations. This removes short-term speculation regarding corporate restructuring and confirms the current standalone status.
“We have evaluated this in the past to see if there is real synergy between the listed company and the private entities. We didn’t find it would bring sufficient value to shareholders at this time.”
— Management, Executive Leadership
Sanofi is developing a plan to introduce reusable insulin delivery devices to better suit the preferences of the Indian market. Localizing delivery formats could improve patient adherence and strengthen market share in the insulin segment.
“We are working on a business case to bring reusable pens to India, as it is a pioneer market for cartridges and reusable pens. This project is in progress.”
— Management, Executive Leadership
Metals
Jindal Steel Limited | Large Cap | Metals
Jindal Steel Limited is a leading Indian industrial house with a significant presence in the steel, power, and mining sectors. The company is currently expanding its Angul facility to become one of the world’s largest single-location steel plants.
[Concall]
Excessive steel supply from China is flooding global markets and putting pressure on international prices. Investors should be aware that this global oversupply remains a primary headwind for domestic realization growth.
“The downtrend in Chinese steel demand continues to outpace the decline in domestic steel production, resulting in historic exports of 119 million tons in calendar year 2025.”
— Gautam Manohar, CEO
The Indian government has implemented protective taxes on imported steel to support domestic manufacturers for the next three years. This regulatory support helps stabilize local prices and protects the company’s market share from cheap imports.
“Ministry of Finance has notified the definitive safeguard duty on select steel imports for a period of 3 years... The step down will be 12% in year 1, 11.5% in year 2, and 11% in year 3.”
— Gautam Manohar, CEO
Domestic steel prices have started to rise again after a difficult period of price declines. Management expects this upward trend to continue into the next quarter, which should lead to better profit margins.
“Prices have recovered since mid-December 2025 after a prolonged correction and further support is expected in Q4 with improving overall demand dynamics.”
— Gautam Manohar, CEO
The average price the company received for its steel dropped because they produced more basic steel products to ramp up new plants. While this hurt margins temporarily, it was a necessary step to reach full capacity utilization.
“Our blended steel NSR was down... as the incremental volumes were skewed towards HRC, which carried the lowest realizations and margins in our product basket.”
— Gautam Manohar, CEO
Internal production of coke is now coming online, which will replace expensive external purchases. This shift will lower the cost of raw materials and improve the company’s overall operational efficiency.
“With the commissioning of an additional coke oven battery in November 2025, coke costs are expected to normalize and the BF2 coke rate has already begun to stabilize.”
— Gautam Manohar, CEO
Management plans to use the cash generated from new projects to pay down debt and improve financial ratios. A lower debt-to-equity ratio will make the company’s balance sheet stronger and more resilient.
“Incremental revenues and cash flows are expected to lower our net debt to EBITDA to sub-1.5 times levels.”
— Gautam Manohar, CEO
Management is prioritizing high-volume production of thicker steel to maximize total profit dollars over profit percentage. This strategy explains why their price-per-ton might look different compared to competitors who focus on different grades.
“As we move toward higher output on HRC, we are producing more of the thicker sections to get higher productivity and more EBITDA. That is why you see the difference between us and our peers.”
— Gautam Manohar, CEO
The company intends to remain primarily focused on the high-growth Indian market rather than chasing international sales. This strategy limits exposure to global trade volatility and currency risks.
“Regarding exports... our major export market has been Europe for plates. While that is a focus, it will likely remain in the 5-10% range.”
— Gautam Manohar, CEO
A portion of the company’s critical raw material needs is met by its own mines in Africa. This backward integration provides a partial hedge against spikes in global coal prices.
“About 15-20% of our coking coal comes from our owned mines.”
— Gautam Manohar, CEO
The company is diversifying its product range so it can serve both the construction and automotive/manufacturing sectors equally. This balance protects the business if one specific part of the economy slows down.
“Our portfolio is getting more balanced toward 50% flat and 50% long. This is a great diversification and provides strength to the company.”
— Gautam Manohar, CEO
Auto Ancillary
Bajaj Auto | Large Cap | Auto Ancillary
Bajaj Auto is a leading Indian multinational automotive company and one of the world’s largest manufacturers of two and three-wheelers. The company has a significant export presence across 70+ countries and maintains a strong portfolio under brands like Pulsar, Chetak, and KTM.
[Concall]
Export volumes have recovered to levels not seen in over three years. This recovery indicates that international demand is stabilizing and growing despite challenges in some regions.
“The business unit crossed an average sales level of 200,000 units per month in October 2025 after nearly 40 months and maintained this level through the remainder of the quarter, surpassing the 600,000 units mark after 15 quarters.”
— Rakesh Sharma, Executive Director
The company has successfully diversified its export revenue away from a heavy reliance on the Nigerian market. This reduces geographical risk and shows strength in other international markets.
“Nigeria’s weight in our portfolio is now half of what it was last year, indicating that the portfolio without Nigeria is at an all-time high performance.”
— Rakesh Sharma, Executive Director
Lower tax rates have sparked a significant and sustained increase in domestic motorcycle demand. Investors can expect healthy volume growth to continue in the coming months.
“Post-GST rationalization, Q3 has grown by about 15% in the industry, and our understanding is that January is sustaining at a similar level. We expect the growth momentum in the motorcycle industry to continue at 12-15%.”
— Rakesh Sharma, Executive Director
Management is planning a high number of product refreshes and new launches to regain market share. A modernized product lineup is essential for staying competitive in the premium bike segment.
“The wave of these interventions will be unrelenting hereafter, with over eight more such interventions planned for the next four months. By the end of this period, the entire Pulsar portfolio spanning the OG Pulsar, the N Series, and the NS Series would be a complete and potent portfolio.”
— Rakesh Sharma, Executive Director
Electric three-wheelers are seeing rapid adoption because they offer better financial returns for drivers. This shift supports the company’s leading position in the commercial vehicle market.
“The electric segment continued to drive the three-wheeler industry, growing at 50%+. We expect these growth rates to sustain as driver adoption is responding to healthy improvements in earnings and payback for both ICE and electric.”
— Rakesh Sharma, Executive Director
The electric vehicle division is now generating healthy profit margins rather than being a drag on the company’s finances. This proves that the company can scale its EV business profitably.
“The EV business now delivers double-digit EBITDA margins while improving unit economics.”
— Rakesh Sharma, Executive Director
Bajaj has taken a majority stake in KTM and is actively restructuring the business to improve performance. This deeper involvement aims to secure the long-term value of a key global partnership.
“Effective November 18, Bajaj ownership in KTM Austria increased to 75%, and a turnaround plan commenced immediately. This involves ensuring liquidity, which is complete; building the top management team, which will be finalized by April 1; and prioritizing cost reduction.”
— Rakesh Sharma, Executive Director
Management is raising prices to protect margins against rising costs for raw materials like metals. This highlights the company’s pricing power and commitment to maintaining profitability.
“For the 50-60 basis point impact anticipated, we have taken pricing actions to offset about half of this so far. We are watching the dynamic environment closely.”
— Dinesh Thapar, Chief Financial Officer
The company’s new financing arm is growing quickly with very low operating costs. This digital-first model allows Bajaj to earn more from every vehicle sold by providing in-house loans.
“BACL has ready access to our entire dealer network for originations, which is a major benefit. It is a digital-first business and not a manpower-heavy model, so its cost structures are industry-leading.”
— Dinesh Thapar, Chief Financial Officer
Aviation
GMR Airports | Mid Cap | Aviation
GMR Airports, a global infrastructure conglomerate, specializes in designing, building, and operating airports in India and overseas. Operating under the brand ‘GMR AERO’ and with Groupe ADP as a strategic partner, the company offers innovative aviation solutions and a range of aero services such as Duty Free, Retail, and Cargo.
[Concall]
Aviation traffic, previously impacted by aircraft issues, has shown improvement since December and is expected to further accelerate next year with a net addition of approximately 50 aircraft from major Indian airlines.
“See, currently the traffic has been a little flattened due to the aircraft issue and also the Air India crash and all other issues. But it has started showing the good improvement from December onwards. So next year, we are expecting the total deliveries as per the discussion we had with the airlines - so Air India will be taking about almost 20 to 30 aircrafts and IndiGo will be about 30 to 40 aircrafts and Akasa also will get about 10 to 12 aircrafts. So there will be a net increase even after grounding of certain aircrafts maybe around 50 aircrafts in the next year.”
— GRK Babu, Management
Indian airlines are expecting significant aircraft deliveries in 2026, indicating future capacity expansion and potential traffic growth.
“Boeing estimates that aircraft deliveries to its Indian customers including Air India Group and Akasa Air will average two planes a month in 2026.”
— Saurabh Chawla, Executive Director, Finance and Strategy
The company successfully reduced interest costs despite slightly increased debt, driven by improved credit ratings enabling cheaper refinancing.
“More importantly, despite debt slightly increasing, our interest cost for the quarter is lower versus Q2FY26, a trend which we had been communicating as our ratings continue to improve which enables us to refinance debt at lower costs.”
— Saurabh Chawla, Executive Director, Finance and Strategy
The company targets a sustainable long-term growth rate of around 15% for its non-aero businesses across all airports.
“For us as we have been communicating in the past, a more sustainable growth if we look at all our non-aero businesses to grow say in and around 15% a kind of thing which we are targeting.”
— Rajesh Arora, Head of Non-Aero Business
Investors should continue to model Delhi Airport’s revenue share at the headline 46%, despite potential minor fluctuations from OMDA exclusions or inclusions.
“So Aditya from your modelling perspective you should assume what the headline number of revenue share is. There could be some slight ups and downs that may happen because of inclusions or exclusions under the OMDA but from purely from a modelling perspective you just continue with the 46% headline number.”
— Saurabh Chawla, Executive Director, Finance and Strategy
Logistics
Glottis | Micro Cap | Logistics
Glottis provides end-to-end logistics solutions with multimodal capabilities, including ocean, air, and road freight forwarding, along with warehousing, cargo handling, 3PL services, and custom clearance to optimize global goods movement efficiently.
[Concall]
The global logistics market faced significant challenges in Q3 FY26 with uneven freight flows, softening rates, and cautious customer planning.
“The operating environment during the quarter remained challenging across global logistics and freight market. Freight flows across key corridors stayed uneven, freight rates continued to soften and shipment planning by customers remained cautious.”
— K Manikandan, Managing Director
Container volumes decreased in Q3 FY26, mirroring the broader industry trend of soft global container movement, slower ordering, and cautious importer behavior.
“From volume perspective, container throughput during the quarter was 20,710 TEUs lower than the earlier periods. This trend is broadly aligned with industry patterns where global container movement has remained soft due to slower ordering cycle, ongoing supply chain adjustment and cautious buying by importers.”
— K Manikandan, Managing Director
Sea exports showed a gradual improvement in revenue share, indicating successful engagement with export-oriented customers and expansion in specific trade routes.
“Sea exports show gradual improvement in share, increasing about 14.5% of revenue as compared to 12.2% in the previous quarter. This shift reflects better transition with export-oriented customers in select sectors and trade routes where we are expanding our engagement.”
— K Manikandan, Managing Director
Revenue declined in Q3 FY26 due to a soft market influenced by policy changes affecting imports from Southeast Asia.
“So, the revenue has dropped due to two reasons. One the market is very soft in Q3 FY26, due to lot of policy changes, policy angles especially from our country’s policy against the Southeast Asia countries policy. That is especially on terms of imports. That is one of the reasons the market was very soft.”
— Ramkumar Senthilvel, Managing Director
Freight levels dropped significantly by 28-30%, resulting in a 16% sequential decrease in the average revenue per TEU.
“And second the freight levels also dropped close to 28% to 30% which has brought down the average per TEU basis quarter-on-quarter it was very it was like lower. For an example in Q2 FY26 the average per TEU cost was around 79,000 and for this quarter Q3 FY26 it is close to 67,000 odd. So, there has been almost like a 16% drop in terms of the pricing.”
— Ramkumar Senthilvel, Managing Director
Renewable sector volumes were negatively impacted in Q3 FY26 due to policy fluctuations, particularly from the US, causing manufacturers to reduce raw material inventories.
“renewable due to some policies, one of Trump’s policies of exports is now picking up but there was no light in Q3 FY26, there was no visibility in Q3 FY26... So, due to this policy kind of fluctuations especially from the US, every manufacturer was very cautious about piling up their raw material which brought down the volume especially on the renewable sectors.”
— Ramkumar Senthilvel, Managing Director
Government policies like ALMM and “Make in India” are driving a shift towards domestic module assembly and manufacturing, reducing finished solar module imports while potentially increasing raw material imports.
“Once this ALMM came into place and government of India’s Make in India drive is in fact pushing all these module importers to do module assembly or module manufacturing in India. In which the volume compared with module imports or the raw material compared with raw material imports has come down.”
— Ramkumar Senthilvel, Managing Director
Glottis is an early entrant in the rapidly growing energy storage battery (BESS container) market, anticipating significant opportunities and movements into India over the next two years.
“And another one is energy storage batteries the BESS container. This is a big movement which is happening and we are again an early entrant into this energy storage battery units which is happening for this renewable industry. We see a big opportunity in 2026 and 2027 this next two years at least, I’m just giving a conservative two years. We see a big movement of this energy storage coming into India.”
— Ramkumar Senthilvel, Managing Director
Following a challenging Q3 due to global policy uncertainties, Q4 FY26 is expected to be promising for Glottis and the logistics industry, supported by positive announcements from Europe and the US.
“Q3 FY26 was very soft and the global cues as well as the policies were completely shapeless, especially for our industry. We thought, we will do a smaller percentage from our current cost model. but Q4 FY26 seems to be very promising, and we have some kind of a steady announcement coming in from Europe, US and other areas, which is very positive note for logistics industry and especially for Glottis.”
— Ramkumar Senthilvel, Managing Director
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Kashish, Meher & Vignesh.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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