The Chatter: Pressure Points
Edition #26
Welcome to the 26th 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 8 industries, along with some international features.
Retail
Aditya Birla Fashion
Engineering & Capital Goods
Tega Industries
Energy
PTC India
Software Services
Tata Technologies
Metals
Tata Steel
Chemicals
Laxmi Organic Inds.
Financial Services
Embassy Office Parks
IIFL Finance
L&T Finance
SBI
Bank Of Baroda
FMCG
United Breweries
International
Bain Capital Specialty Finance, Inc.
Adobe Inc
Xerox Holdings Corporation.
Dave & Buster's Entertainment, Inc.
Retail
Aditya Birla Fashion | Small Cap | Retail
Aditya Birla Fashion and Retail Limited (ABFRL) is engaged in the business of manufacturing and retailing of branded apparels/ accessories and runs a chain of apparels and accessories retail stores in India.
Transcript
Sangeeta Tanwani, Chief Executive Officer, Pantaloons and OWND!, highlighted how the youth consumer is shaping the company’s strategy and future growth trajectory.
“The momentum with which the young consumer is reshaping the fashion landscape and its influential role in defining cultural trends is undeniable. Inspired by sharp insights into this segment, our strategy is a bold move, designed to forge a deep connection and a true sense of brand love. This new chapter, anchored in a vibrant brand name, a distinct identity, and a robust business model, will be a strong catalyst for our next wave of exponential growth.”
— Sangeeta Tanwani, CEO, Pantaloons and OWND!
With OWND!, Aditya Birla Fashion and Retail (ABFRL) aims to accelerate its play in the value fashion category. The company will convert existing StyleUp stores into OWND! outlets and expand its reach to 100 stores by the end of this financial year, marking a decisive push to capture the youth-driven fashion market.
Engineering & Capital Goods
Tega Industries | Small Cap | Engineering & Capital Goods
Mehul Mohanka explained the current product portfolio of Molycop and its growth outlook.
“As you know, primarily, Molycop is in the forged grinding media business, along with high-chrome which has been a recent addition to their product portfolio. Today, forged media is the substantial portion of the revenue. And as explained earlier, while the forged media business will grow at about 5%, the addition of the high-chrome strategy will increase the growth rates to about 7.5% over the next three years.”
— Mehul Mohanka, Managing Director and Group CEO, Tega Industries
On being asked how Molycop strengthens customer access and supply chain positioning, Sharad Kumar Khaitan emphasized the importance of local manufacturing and footprint diversification.
“The Molycop, if you see, it's got a global footprint and the local closer to the customer strategy helps because the customers want the consumables at shorter notice periods. And considering the current situation, the local manufacturing facilities are more logical actually. For example, even if you take a US example, Molycop has got its own manufacturing facilities there and that helps us serve the customers there and there is no impact of any tariff or regulations or any prohibitions as such.”
— Sharad Kumar Khaitan, CFO
Addressing concerns around Molycop’s declining revenues, Mehul Mohanka clarified the reasons behind the temporary dip and how the company plans to revive growth.
“So, if you were to look at the last five-year growth trajectory of Molycop in the years 21-22 financial years were growth years. In 23-24, it tapered primarily due to loss of two major customers due to mine closure and maintenance. And as I recently mentioned about the contingent deferred liability, it is linked to the reopening of those mines and those contracts and margins coming back into the business.
If I was to normalize the year for those two mines that closed, that's actually been a growth year for them, both 23 and 24. And as far as the high-chrome cast media strategy, we have a medium to long-term view on high-chrome cast media. We have expanded capacity in Molycop in high-chrome cast media. And the strategy going forward is to monetize the growth in high-chrome in Molycop in different markets across the world.”
— Mehul Mohanka, Managing Director and Group CEO, Tega Industries
When pressed further on whether Molycop already supplies high-chrome media, Mohanka outlined the progress made and the scale-up target.
“Yes. In the last two years, they've been able to increase high-chrome penetration from 0 to 62,000 tons in the past two years. And the aim is to scale to 200,000 tons for the next.”
— Mehul Mohanka, Managing Director and Group CEO, Tega Industries
Energy
PTC India | Small Cap | Energy
PTC India Limited is a prominent player in the power trading sector in India, established in April 1999 to provide credit risk mitigation to private power project developers. Through its unique Public-Private Partnership model, PTC has played a pivotal role in developing a vibrant power market in the country. It engages in long-term and short-term power trading activities to address supply and demand disparities across different regions.
Setting the tone for sector prospects, the CMD highlighted steady demand growth and supportive reforms.
“Looking ahead, we expect power demand to grow steadily at 6% to 8% per annum, although short-term volatility may arise due to transient weather conditions. A favorable monsoon is expected to create more demand and support this outlook. The guidelines for PHP-based power will further accelerate the adoption of storage in the energy basket. Regulatory bodies are also actively fostering market reforms, including discussion on virtual power plants and standardization of exchange products, including amendment in power market regulations to ensure level playing field among exchangers, traders, and OTC platforms.”
— Manoj Kumar Jhawar
On a query regarding prospects of Hindustan Power Exchange (HPX), Jhawar explained why market coupling is a key positive.
“Yes, actually market coupling is something about which we have been since a very long period advocating. We believe that it is a good development. It is a favorable development. It will help consolidate the very fragmented markets. It will bring in competition and it is likely to help the HPX significantly. So, we hope that this is going to be another business driver for us going forward. Market coupling would definitely help HPX and since we own 22.5% of the HPX, indirectly benefits would accrue to PTC also.”
— Manoj Kumar Jhawar
Addressing the quantifiable impact of market coupling, Jhawar broke down the DAM opportunity size and HPX’s scope to capture share.
“Actually, HPX is likely to benefit from this market coupling thing and if we examine the entire market scenario, the collective segment has got two components, one is the DAM and another one is the RTC. So, in the DAM component, the volume traded is roughly around 80 billion units and if we multiply the Rs. 0.04 per unit margin which is earned on all power traded in the DAM market, that gives us a revenue potential of around Rs. 240 crore per annum. That was basically 100% concentrated in IEX earlier. Now, with this coupling thing happening, the exchange which is able to provide better services to the clients, the exchange which has got better connect with the clients, someone who has got a better technology platform, would possibly have a real shot to earn some volumes out of that market. So, that remains to be seen as to how much of that 100% concentrated market from IEX can be taken away by HPX. But currently it is zero, so I would say that journey is only upward.”
— Manoj Kumar Jhawar
On the draft CERC guidelines around virtual PPAs, he highlighted the potential and the IT-driven nature of the opportunity.
“It is a very interesting emerging area. And being a trader, we see a lot of value. But we have to wait for the final guidelines to appear in this regard. This will be a very interesting opportunity in the sense that a large part of that business is likely to be built on solid IT platforms and effective execution. So, we are seized off that and we are watching the development keenly. We hope to play a meaningful role in that market as and when those final guidelines come.”
— Manoj Kumar Jhawar
When asked whether market coupling points to a future MBED (Market-Based Economic Dispatch) framework, Jhawar was emphatic on the upside for PTC.
“It is 100% positive. If MBED comes, then what it would entail is that all the capacity which has been tied into the long-term context, which are almost 85% of the power being traded, generated and consumed in the country, would also come to some kind of market mechanism. And that being the case, that will be an exponential growth opportunity for traders like us.”
— Manoj Kumar Jhawar
Software Services
Tata Technologies | Small Cap | Software Services
Tata Technologies Limited is a global engineering services company providing product development and digital solutions to OEMs and tier 1 suppliers. It specializes in the automotive industry and extends its expertise to aerospace, transportation, and construction heavy machinery. The company focuses on creating value for clients by developing innovative and sustainable products, leveraging diverse global teams and skill sets to solve complex engineering challenges.
Harris explained why Tata Tech acquired ESTEC and how it fits into their strategy.
“The rationale is twofold. First, it’s market access. Germany is becoming an increasingly important market for us. You might remember last year we announced the BMW joint venture. We’ve been growing that JV here in India and also making progress in terms of direct business in Germany.
This acquisition not only reinforces the team we’ve already got on the ground in Germany but also extends our coverage into northern Germany, where Volkswagen is located. So it’s a market access play, but it’s also a capability play.
ESTEC has tremendous depth in ADS and comfort electronics. They do a lot of work at the top end of the V-development curve for embedded electronics and software. They handle architecture work, requirements definition, and test and validation, which is a great complement to the software capabilities we’ve been building here in India.”
— Warren Harris, CEO, Tata Technologies
He clarified that ESTEC has strong profitability, making the deal immediately accretive.
“Interestingly enough, ESTEC has margins of about 28–29%. That’s one of the reasons we targeted them. Their margins are actually better than Tata Technologies’. So when the transaction closes, which we expect by late November or December, it will be accretive from both a margin and an EPS perspective on day one.”
— Warren Harris
He outlined Tata Tech’s current Germany exposure and the incremental boost from ESTEC.
“Germany directly is relatively low for us today—about $15–20 million. ESTEC adds about $40 million. So together we’ll see around 10% of our services revenue driven from that region.
One reason we’re so focused on Germany is that we see accelerated growth ahead. German OEMs are under pressure from Chinese competition, so they’re increasingly tapping into global delivery capabilities from companies like ours. The automotive industry is at an inflection point, shifting toward electronics and software, and we are well positioned to deliver.”
— Warren Harris
Harris addressed how the acquisition helps reduce dependence on group accounts.
“Our anchor accounts—Tata Motors and JLR—represent about 50% of our services business. We see that coming down to closer to 40% over the next 12 months, thanks to this acquisition and growth outside the group. While Tata Motors and JLR will continue to grow, business outside the group and even outside automotive is growing faster.”
— Warren Harris
On quarterly performance and industry outlook, Harris struck a more optimistic tone.
“Q2 will certainly be better than Q1. The headwinds are still there, but the pipeline has improved and customer confidence is better.
I was at the Munich Auto Show last week and sentiment was much better than three or four months ago. The CEOs of BMW and VW struck an upbeat tone on industry outlook and demand. That will have a trickle-down effect for us.”
— Warren Harris
Metals
Tata Steel | Large Cap | Metals
Tata Steel is a globally diversified steel producer with integrated operations from mining to marketing. Its raw material operations in India and Canada ensure self-sufficiency, while downstream business units in India include Ferro-Alloys, Tubes, Wires, Bearings, and more.
On the global steel environment, Narendran highlighted the continued pricing pressure from Chinese exports.
“Globally, for the steel industry, things continue to be challenging simply because China continues to export 9–10 million tons of steel every month, and often at prices at which they themselves don’t make money. So it’s very difficult for anyone to compete with that.
But luckily for the Indian steel industry, the demand growth in India has been strong. So we’ve been less vulnerable to what’s happening in the global markets. The additional capacity that many of us have built in India is being taken care of by the demand that there is in India. But if we were to export, yes, it would be challenging.”
— TV Narendran
He noted that U.S. tariffs have minimal impact on Indian steel, but trade talks should focus on supporting downstream exporters.
“I think, like the Steel Secretary said, India does not export much steel to the US, because the US traditionally has been a difficult market to export into, simply because of the trade actions they take. For instance, we used to export steel 30 years back to the US, and they were very quick on anti-dumping and safeguard duties. So you don’t see much steel exports going from India there.
But I think there’s a lot of engineering exports which go there—steel-consuming sectors export into the US. So when we look at trade negotiations, we’re more interested in what benefit it brings to our customers, and hence the indirect benefit it can bring to us.”
— TV Narendran
On Europe’s Carbon Border Adjustment Mechanism (CBAM), Narendran stressed pragmatism—leveraging existing deductions rather than opposing the policy outright.
“I think this mechanism was there, and I honestly think that’s what we should leverage. Asking Europe to remove CBAM becomes very difficult because they are only charging importers the same carbon tax that they are charging domestic players.
So for them, it’s not just a trade issue—it’s an industrial policy issue, and we should recognize that. They can’t just address it by removing it for trade.”
— TV Narendran
Narendran outlined the industry’s “asks” from the government—focused on infrastructure push, ease of doing business, and protection from unfairly priced imports.
“See, the Indian steel industry goes to the government only when we see very unfairly priced imports. Because it’s only when steel comes into India at prices at which the suppliers themselves don’t make money that we say it’s unfair.
Otherwise, the Indian steel industry is very competitive. We have some of the latest steel plants in the world—not just Tata Steel but our peers as well.
So I think from an Indian steel industry point of view, the ask from the government is: continue to spend on infrastructure (which they’re doing), address the cost and ease of doing business (which they’re also doing), and give us some support whenever we see unfairly priced imports.
We should also recognize that the steel industry has been one of the leaders of private sector capital investment. I think between us and our peers, we’re investing at least ₹40,000–50,000 crore a year, which is more than most other sectors.”— TV Narendran
Chemicals
Laxmi Organic Inds. | Small Cap | Chemicals
Laxmi Organic Industries Limited is a renowned manufacturer of Acetyl Intermediates and Specialty Intermediates, offering a wide range of products for industries such as pharmaceuticals, agrochemicals, and paints. With nearly 30 years of experience, the company produces chemicals like ethyl acetate, acetic anhydride, and amides on a large scale.
He highlighted a breakthrough deal positioning Laxmi Organic as a global supplier in a high-value application.
"We are going to be the global supplier for Hitachi Energy for an SF6 replacement. Now SF6 is used in power transmission as an arc quencher, and the product that we are going to be supporting Hitachi with globally is also going to have the same functionality."
— Rajan Venkatesh
Beyond the Hitachi partnership, the company sees broader opportunity since the technology remains in-house.
"We also have the opportunity to supply other majors similar to Hitachi because the IP and know-how for this technology remains with Laxmi. So that’s the way we are approaching this entire space and it becomes an important new growth engine for Laxmi in the fluorination space."
— Rajan Venkatesh
On overseas operations, Rajan outlined how chemical industry restructuring in Europe creates opportunity for Laxmi to leverage its cost position and on-ground presence.
"Europe and other geographies are also going through a large restructuring in the chemical space and that is where we continue to see opportunities to piggyback and also tap with our cost positions and already presence on the ground."
— Rajan Venkatesh
Financial Services
Embassy Office Parks | Micro Cap | Financial Services
Embassy Office Parks REIT is India's first publicly listed Real Estate Investment Trust (REIT) and Asia's largest official REIT by area. They own, operate, and invest in income generating real estate and related assets in India, focusing on properties that generate rental income.
Shetty called SEBI’s move a landmark step that will deepen participation and position REITs as mainstream investments.
“We welcome and commend SEBI’s landmark move to re-classify REITs as equity. As pioneers of REITs in India and long-time champions of the asset class, we at Embassy REIT see this move as a catalyst for the next phase of growth.
Currently, mutual fund participation in REITs is less than 0.5%, but this reclassification can take that significantly higher.Further, with potential index inclusion, REITs could see substantial passive inflows, given that index mutual funds together manage around ₹12 lakh crores of assets under management and today have virtually no exposure to the REIT space.”
— Amit Shetty, CEO, Embassy REIT
He stressed that the move aligns India with global REIT markets where they are firmly treated as equity.
“Absolutely. Globally, REITs are classified and treated as equity. In the US, which has the most developed REIT market, REITs are a staple part of equity indices like the S&P 500.
Similarly, in markets like Singapore, Australia, and Japan, REITs are well-established as equity instruments, attracting both institutional and retail capital. India aligning with this practice will help integrate our REITs into global fund flows.”— Amit Shetty
With a vast office stock base, India has significant headroom for REIT expansion compared to developed markets.
“Yes, this move is truly catalytic. India’s office stock stands at nearly 800 msf, of which about 550 msf is Grade-A institutional quality. Yet only 130 msf of operational stock is currently within listed REITs, highlighting the immense headroom for growth.
In comparison, in the US, nearly 90% of institutional-grade stock sits with REITs, underscoring the potential ahead for this asset class in India.”— Amit Shetty
IIFL Finance | Small Cap | Financial Services
IIFL Finance Limited, formerly known as IIFL Holdings Limited, is a prominent player in the Indian financial services sector. They provide a wide range of products including home loans, gold loans, business loans, microfinance, and more. Known for their retail-centric approach and strong ethical practices, the company maintains a solid reputation for delivering quality services and ensuring sustainable growth.
Jain highlighted that the gold loan segment has rebounded sharply after regulatory challenges last year, hitting record highs.
“Our gold loan business has fully bounced back from last year's embargo, reaching an all-time high in AUM. MSME-secured lending continues to be one of our core growth engines, and we are exiting the riskier segments.”
— Nirmal Jain, Founder, IIFL Finance
Explaining the reasons behind the surge in gold loan demand, Jain pointed to both customer behavior and macro factors.
“So, many of these customers, the MSME enterprises, probably they would have been earlier reluctant to lend their gold, but now that they have no source of funding, so they might be taking gold loans, that is one. Two, gold prices have been firm. So basically the loan-able value also has gone up against the gold. So, that is the second reason that I believe in. Thirdly, even the economic momentum has been improving, the growth momentum in the macroeconomic environment, there is a demand, so there is a slight improvement, so, SMEs are seeing good traction. I think these are the reasons for the gold loan growth to be strong across the industry.”
— Nirmal Jain
L&T Finance | Mid Cap | Financial Services
L&T Finance Holdings Limited is one of India’s most valued and fastest-growing Non-Banking Financial Companies (NBFCs). The company offers a diverse range of financial products and services in rural, housing and infrastructure finance sectors. It also offers Investment management services. Further, the company offers, Two-wheeler Finance, Housing Finance, Farm equipment finance, Mutual fund, Infra finance, Real estate finance and Micro loans.
Roy noted that even before GST cuts, asset quality and demand trends in unsecured lending and microfinance had been improving. GST reductions now provide an added boost, especially for autos and tractors.
“Even before the GST cut, we had started to see improvements, especially in the unsecured lending space. Last year, we faced asset quality issues in personal loans, which prompted the RBI to introduce curbs and guidelines on unsecured lending.
…We’ve been pleasantly surprised by the sharp uptick in demand over the past two months. Collection efficiencies have improved steadily across geographies, particularly in microfinance. Personal loans are also recovering well, and disbursements across the industry have picked up. For us, disbursements have been very strong this quarter, including personal loans.
As for the GST cut, the impact will be most visible in autos and tractors. For example, tractor GST has been reduced from 18% to 5%, which makes them much more affordable. We expect a major jump in tractor volumes during the festive period. Two-wheelers will also benefit, and the entire auto segment should see good growth. Overall, the festive season should bring a lot of cheer to BFSI, helped by the GST cuts. We’re hoping for a very strong second half.”— Sudipta Roy, MD & CEO, L&T Finance
Joshi explained that liquidity support, RBI’s stance, and rate cuts have stabilized growth, with L&T Finance well positioned for a strong H2.
“As soon as the new RBI governor took charge, growth was put back on the agenda. RBI has maintained liquidity of nearly ₹3 trillion in the system. Alongside that, the rate-cut cycle has begun, and with GST gains on top, there’s enough room for growth despite concerns on the tariff front.
We’ve just come out of the microfinance cycle—maybe a couple of months’ adjustment remains—but by September or October, L&T Finance should be fully past it. We expect the second half to be very strong in terms of disbursement growth and overall book growth.
For FY26, we’re targeting 20–22% growth. In Q1, we delivered 18% growth in both disbursements and book. While year-on-year growth may look muted due to the difficult past four quarters, quarter-on-quarter we’re targeting around 5% growth.”— Sachin Joshi, CFO, L&T Finance
Roy detailed how their in-house underwriting engine has lowered risk and expanded customer inclusion.
“Cyclops is an in-house software built by our engineers. It’s based on the idea of 360° underwriting… We first implemented it in two-wheelers in June last year, then in tractors, and now across our retail businesses. The difference is stark: in two-wheelers, the Cyclops-screened portfolio has 12–13% lower bounce rates compared to non-Cyclops.
Importantly, Cyclops doesn’t just cut out questionable credit—it also identifies ‘undiscovered prime’ customers, such as first-time borrowers who are actually good credit risks. This way, we’ve been able to reduce risk without sacrificing volumes.
We’re now on version three of the system. Initially, it processed 100 transactions per second. Today, it handles 1,400 per second. It’s evolving, and we’ll keep improving it.”— Sudipta Roy
Alongside Cyclops, L&T Finance is developing advanced portfolio monitoring systems while scaling through partnerships.
“Alongside Cyclops, we’re building what we believe is the country’s first automated portfolio management engine, called Nostradamus. Typically, in Indian financial services, portfolio stress is identified after the event. Nostradamus is designed to spot stress before it happens—essentially predicting hotspots.
On partnerships, we’re working closely with big tech platforms. We’re live with Amazon (where we’re the only lending partner), CRED, PhonePe, and Google Pay. These partnerships have scaled personal loan origination rapidly while maintaining credit quality. Going forward, both external partnerships and our in-house tech initiatives will continue to expand.”— Sudipta Roy
Joshi confirmed that collections in Karnataka, disrupted by a state ordinance, have now stabilized.
“The trouble began with a state ordinance, which caused collection efficiency to drop by over 300 bps to around 96%… Over time, as they realized their credit bureau scores would be affected, repayments improved. We’re now back at 99.05% in Karnataka, and overall at 99.5% as of August. The earlier ‘normal’ was 99.8%, but post these disruptions, we believe the new normal will be 99.6–99.7%.
Disbursements have also recovered. During the crisis, they dropped to ₹1,400–1,450 crore per month. Last quarter, they rose to ₹1,900 crore, and in August alone, we crossed ₹2,000 crore—the second-highest ever. This is a strong sign of normalization.”— Sachin Joshi
Roy explained that affordability from GST cuts will drive a significant near-term boost in two-wheeler demand.
“Two-wheeler financing cannot grow faster than the market itself. But the GST cut improves affordability, especially in the sub-₹1.5 lakh segment, which makes up the bulk of the market. I expect at least a 20–25% uptick in demand over the previous quarter.
We’ve also been forging deeper partnerships with OEMs, including strategic financing tie-ups. With the GST cut and the festive period, we expect strong disbursement growth in two-wheelers.”— Sudipta Roy
Roy explained the strategic entry into gold loans, driven by customer demand and high-yield potential.
“Our entry into gold loans was driven by two factors. First, we saw in our data that our microfinance customers had borrowed over ₹16,000 crore in gold loans from other lenders. That was a captive base we weren’t serving.
Second, gold loans are secured, high-yield products with good returns on assets. To fast-track entry, we acquired Paul Merchants Finance’s gold loan business, adding 130 branches in North India—a non-traditional gold loan market. This saved us nearly 24 months of build-out time.
We plan to add 150–200 gold loan branches this year. These will be Sapuno branches, offering not just gold loans but other products too, making them holistic retail branches. This segment will scale steeply for us.”— Sudipta Roy
Joshi highlighted how global upgrades open up overseas borrowing opportunities at competitive costs.
“This was our first time approaching international rating agencies. NBFCs are capped at the sovereign rating, so when India was upgraded, we too were upgraded to BBB. Fitch gave us the same rating earlier in July.
With AUM crossing ₹1 lakh crore, this is the right time to diversify funding. International ratings give us access to global capital markets. While we’ll be opportunistic, this opens a wide window to borrow overseas if swap-adjusted costs are lower than domestic borrowings. Importantly, our board requires us to fully hedge FX exposure, so we’ll only borrow abroad if it’s cost-effective.”— Sachin Joshi
SBI | Large Cap | Financial Services
State Bank of India (SBI) offers a diverse range of products and services to individuals, businesses, and institutions through its extensive network. Embracing change while upholding core values like Service, Transparency, Ethics, Politeness, and Sustainability, SBI remains a leading player in the banking sector.
[Transcript & Interview]
C. S. Setty pointed out that corporate India is already operating at fairly high levels:
“Most of the corporates are operating at 75-80 per cent capacity utilisation. This is actually the time to go for expansion. They are just looking to see whether the sustained demand comes back.”
– C. S. Setty
He acknowledged that the revival of private capital expenditure is tightly linked to consumption growth:
“I think everybody is waiting for a sustained domestic demand to come back, and hopefully the measures taken by the government to boost demand, RBI in terms of ensuring adequate liquidity, and interest rate reduction, they all should play out in terms of providing this confidence to corporates.”
– C. S. Setty
When asked where the action is happening, Setty highlighted new-age and energy-related areas:
“But this is predominantly coming from refineries, particularly in the public sector refineries and data centres and renewable energy. While traditional sectors like steel and cement are cautious, investments in refineries, renewables, and digital infrastructure are taking the lead.”
– C. S. Setty
With a large young customer base, SBI is reimagining digital empathy alongside physical presence.
“SBI’s 52 crore customers are highly diverse; 30–35% are under 30. Many onboard entirely digitally. ‘High touch’ needn’t be physical—it can be empathetic digital design. For example, in YONO 2.0 we’re introducing features such as personal carbon-footprint insights that resonate with younger users. And with ~1.5 lakh physical touchpoints (branches, CSPs, ATMs), even digital natives visit occasionally—those visits should be memorable. Over time, branches will evolve from transaction hubs to advisory centers, where human expertise matters most.”
– C. S. Setty
Despite 98% of transactions occurring digitally, SBI’s culture of trust and customer care continues to be the anchor.
“SBI’s culture rests on trust. Despite ~98% of transactions occurring outside branches, ~4 million customers still visit branches daily. As we shift branches toward advice over transactions, our longstanding culture of customer care will be even more relevant.”
– C. S. Setty
Setty noted narrowing gaps between rural and urban demand, but highlighted rural preference for physical assets.
“The gap is narrowing. Rural aspirations and consumption patterns are changing. But in financial services, rural India still favors physical assets—land, gold, silver. Financialization is growing, but the first step is bank deposits, then gradual SIP adoption. Even with SBI Mutual Fund being the largest AMC, mutual fund penetration among SBI’s 52 crore customers is only ~3–4%—there’s a long runway.”
— C. S. Setty
He called GIFT City a once-in-a-generation opportunity but flagged uneven state-level frameworks.
“GIFT City is a once-in-a-lifetime opportunity. SBI runs the largest IBU there. Harmonizing regulatory frameworks in GIFT can unlock cross-border investments. While the Centre has improved ease of doing business, state-level consistency remains uneven; greater uniformity will help.”
— C. S. Setty
Setty explained SBI’s planning horizon and philosophy of building with headroom to handle exponential growth.
“Plan in 2–3-year horizons; five-year tech plans are increasingly impractical given exponential digital growth. We build for the future and create redundancies. In 2021, when our live capacity was 5,000–6,000 transactions/second, we built for 23,000 TPS. Today we process ~15,000 TPS, still within headroom. Our board encourages continuous tech upgrades, often validated by global banks and consultants. This openness enables sustained efficiency.”
— C. S. Setty
He emphasized YONO’s centrality to SBI’s growth, while ruling out external listing for now.
“YONO will remain within SBI for the foreseeable future; we see massive internal potential first. SBI’s balance sheet historically doubles every six years (₹65 lakh crore today could be ~₹130 lakh crore in six years). We haven’t doubled branches or headcount; technology carries the load. YONO is our flagship—~1.5 crore (15 million) daily logins, likely the most used financial services app in the world outside China. It will be the primary engine for hyper-personalization and product delivery.”
— C. S. Setty
Bank Of Baroda | Large Cap | Financial Services
Bank of Baroda (BoB) was founded by Maharaja Sayajirao Gaekwad in July 1908. The bank is an Indian State-owned International banking and financial services company headquartered in Vadodara (earlier known as Baroda) in Gujarat, India. The bank is engaged in providing various services, such as personal banking, corporate banking, international banking, small and medium enterprise (SME) banking, rural banking, non-resident Indian (NRI) services and treasury services.
On the observed quarterly degrowth in the corporate loan book, Chand explained the dual factors impacting growth and the expected recovery.
“So, I mean, corporate, as I said, there are two factors for the current quarter growth. One is bit of seasonal factor, as I said, because we had a similar quarter also in June last year. So, when we realign the book, both in terms of the bulk deposit and the fine price book, so obviously there is a bit of realignment. Having said so, as I said, on the corporate side, I mean, those corporates having a very strong cashflow position. I mean, there is a deleveraging, we need to take a note of that. And, secondly, because of significant downward movement in rates in the bond market, I mean, typically these corporates are also able to raise funds at a cheaper rate. So, obviously, the dependency on the bank's loans is relatively low. So, these are the two factors which are impacting. But as I said, June last year we had a 2.5% YoY and the full year we had a 9%. I'm also thinking a similar corporate book outlook for the full year, where we can achieve almost 9%-10% growth.”
— Debadatta Chand, MD & CEO, Bank of Baroda
On the MSME portfolio, Chand shared growth metrics, sector focus, and regulatory tailwinds.
“So, the MSME, let me give you a couple of data points. Our growth this quarter is 13.1% and this is as against 9.8% on the corresponding quarter last year. Whereas in March, the growth was 14.2%. So, clearly, in the last one year we have upsized the growth in MSME. Clearly, we have done multiple aspects therein. We have put in a Cash Management System for MSME borrowers. A couple of sectors which are doing well for us is a sector like CV & CME, supply chain finance, the TReDs, I mean, the platform. So, the core MSME growth is also there. So, the bank will be focusing.
And, again, on the regulation side, the MSME definition has changed now and that gives a huge opportunity for us to grow in MSME. Secondly, the government has come up with a couple of new schemes on the MSME. One is a cashflow-based scheme, which is a smart OD that we have already rolled out to the market. Another is MCGS, which is a guarantee-scheme under which you can lend money. So, I think, the environment for lending to MSME is quite positive at this point of time. There are demands. We have leveraged our digital platform. We rolled out the digital platform. We rolled out almost 350 branches, which are MSME-focused branches. We are focusing on clusters on MSME. So, with all this, I think growing at around 17%-18% is possible for the bank. And we are expecting rather to upsize that. So, we are working strongly on the MSME, focusing key to the MSME.”— Debadatta Chand
Addressing questions on the corporate loan pipeline and demand sources, Chand outlined the recovery expected in H2 and the scale of opportunities in the pipeline.
“So, that's a fair question because, I mean, this quarter is a seasonal impact also, as I said, it was similar scenario in June 2024 also. So, again, H1 is a slack season and H2 is a busy season, right. So, the demand as such would come back in the H2 and by that time, the differential rate between the, let’s say, the bond market and the loan pricing would again get squished, right. That is what a transition we are looking that to happen in Q2 itself. So, in that scenario, I think people would come back strongly into the loan market and for us to optimize that. And as of today, if you look at a pipeline, we have a huge pipeline in order. Almost like cases which are sanctioned, not disbursed is almost 30,000-35,000 crore. Cases we are under consideration is almost 25,000-30,000 crore. So, we are going to replicate the same way that we did last year in terms of the Q1 growth slightly lower, but subsequently upsizing the growth in Q2, Q3 and Q4. And typically looking at a scenario where the demands are coming strongly on the renewable side, the data center side, whether it is a road project side. There are multiple sectors where the demands are still very strong and I think we will be in a position to achieve 9-10% corporate growth for the full year.”
— Debadatta Chand
Lalit Tyagi added that upcoming corporate and PSU CapEx would support funding demand, especially in the busy season.
“Yes, sir. So, sir, in fact, to add to what you have said that there are many CapEx announcements from various companies in the corporate sector and PSU space also. And they will come up for the funding in the coming years. So, we believe that apart from those sectors which MD Saab enumerated, there will be a demand from the corporate side also. And as we enter into the busy season, there will be a requirement on the working capital side also and there will be availments.”
— Lalit Tyagi, Executive Director, Bank of Baroda
FMCG
United Breweries | Mid Cap | FMCG
United Breweries is a leader in the brewing industry, renowned for its flagship Kingfisher brand and a diverse portfolio of premium international beers, including offerings from the HEINEKEN family.
Gupta emphasized that taxation policies should be pragmatic to support demand in the Alco-Bev sector.
“If the state govts work objectively, where they do not just increase taxes (excise) because they feel about a revenue shortfall coming of GST (changes), I think it should help in consumption of Alco-Bev because consumers will spend money on coming together, connecting together, going outside, eating food.”
— Vivek Gupta, MD
He argued that beer should be treated differently from hard spirits due to its lower alcohol content and natural base.
“One of the problems in India we have is that we have put all Alcho-Bev as one thing (for taxation). Beer is natural, has less than 6% alcohol, and is compared with (whisky and other products having) 40 to 45% alcohol.”
“There is a huge amount of work required for the government to separate beer, which is actually a natural product. Beer is made up of barley, which helps in crop productivity. We will have to think beer differently with spirits.”
“So we don't want people to get drunk. We want them to socialise and beer does that.”
— Vivek Gupta
Gupta cautioned that higher taxation makes beer unaffordable, hurting volumes in an already capital-intensive industry.
“By taxing beer, you make it unaffordable. In actuality, sales of beer go down, which is a highly capital-intensive industry.”
— Vivek Gupta
He pointed to inflationary pressures in packaging and global oil price volatility as key challenges.
“I think it's more than the inflation, it is supplies, especially on the packaging material, because we have a can shortage in India... Plus on top of that, there's a lot of volatility in the global market on oil pricing...”
— Vivek Gupta
Gupta explained how heavy rains have temporarily hit volumes but reaffirmed a strong growth outlook post-normalisation.
“So half the country, we are seeing a significant rain impact on the business, where the category is actually down double digit. In August and July, specially in the beer, the north of India is diverged... So we really need to see how September shape up.”
“The rains are impacting there. But if I normalise the rain, I think we are in all geared up to have a very good 6 to 7% volume growth. Premiumisation of 25% growth, and longer term outlook looks very strong.”
— Vivek Gupta
Gupta stressed that steep taxation in some states forces companies to rethink expansion plans and called for reforms.
“In some states where the taxation is going up so much, we do not even... We have to review our plans. In other states, we are working on it. But I think the biggest one is we have to reform, make reforms and make it easy to do business and have beer fair versus spirits and other things there.”
— Vivek Gupta
International
Bain Capital Specialty Finance, Inc. | International
Bain Capital, LP is an American private investment firm, with around $185 billion of assets under management.[4] It specializes in private equity, venture capital, credit, public equity, impact investing, life sciences, crypto, tech opportunities, partnership opportunities, special situations, and real estate.
[Concall]
95% of portfolio rated performing at/above expectations with 5% underperforming, no meaningful tariff impacts observed.
“Risk rating one and two investments which indicate that the company is performing in line or better than expectations relative to our initial underwrite total 95% of the portfolio. Risk rating three and four or underperforming investments comprise 5% of our portfolio at fair value. These investments on our watch list have been relatively stable and we have not seen any meaningful change from higher tariff impacts across the portfolio.”
– Mike Bole (President)
Adobe Inc. | International
Adobe Inc. is a software company that provides solutions for digital experiences, including tools for creative professionals, marketing, and document management.
[Concall]
AI-influenced ARR exceeded $5B vs $3.5B in FY24, surpassed full-year AI-first ARR target early, raising FY25 guidance.
“Adobe is the leader in the AI creative applications category. Our AI influenced ARR has now surpassed $5 billion, up from over $3.5 billion exiting fiscal year 2024. And we've already surpassed our full-year AI first ending ARR target. Given our customer focused growth strategy, product innovation, and strong go-to market execution in the momentum in our business, we're pleased to once again raise our FY25 revenue and EPS targets. “
– Shantanu Narayen (CEO)
AI-first products including Firefly and Acrobat AI Assistant already hit $250M ARR target ahead of year-end.
“Adobe AI influenced ARR surpassed $5 billion and we expect it to continue to rise as a percent of our business. Notably, ARR from our new AI first products, including Firefly, Acrobat AI Assistant, and Gen Studio for performance marketing, has already achieved our end-of-year target of over $250 million.”
– Dan Durn (CFO)
Direct correlation observed between AI usage and customer retention, enabling shift from seat-based to value-based pricing in enterprises.
“We have seen a direct correlation between increased use of AI and retention, and we feel very good about that. As we're selling into enterprises, the creative teams are often the ones that are bringing in these automation services. And so it lets us go from that seat-based pricing to a value-based pricing.”
– David Wadhwani (President, Digital Media)
Xerox Holdings Corporation | International
Xerox Holdings Corporation provides digital printing and document management technology and services, including printers, production presses, and related supplies. They also offer digital services such as workflow automation, managed IT solutions, and personalized communications.
[Concall]
Equipment demand softened in April-May due to Doge/tariff uncertainty, offset by strong IT solutions cloud services demand.
“This quarter demonstrated the improved resiliency of revenue and adjusted operating income afforded by our reinvention. In the second quarter, strong demand for cloud enablement services at our IT solutions segment helped offset a brief period of softer demand for print equipment in April and May amid peak Doge and tariff driven uncertainty.”
– Miranda Getsai (CFO)
Legacy Xerox print declining at market pace (low-mid single digits), Lexmark relatively flat at $950M revenue.
“We expect the legacy Xerox print business to decline at roughly the pace of the broader print market, which we assume to be low to mid single digits consistent with recent trends. Lexmark revenue is expected to be relatively flat year-over-year, resulting in another $950 million of revenue net of intercompany eliminations in 2026.”
– Miranda Getsai (CFO)
$60-65M net cash tariff costs to be recouped via pricing, synergy implementation costs declining from $50-75M in 2025 to sub-$25M by 2027.
“ Current year cash tariff outlays net of mitigation efforts of 60 to 65 million are expected to be recouped over time through future price increases. Synergy implementation costs of 50 to 75 million in 2025 are expected to decline in 2026 and be reduced to less than 25 million in 2027.”
– Miranda Getsai (CFO)
Dave & Buster's Entertainment, Inc. | International
Dave & Buster's Entertainment (PLAY) owns and operates entertainment and dining venues under the Dave & Buster's and Main Event brands, offering a combination of food, beverages, arcade games, sports viewing, and other entertainment attractions for adults and families.
[Concall]
Expecting 11 new store openings in FY25, second India franchise location opened in August with 5 more international openings planned.
“We now expect a total of 11 new store openings in fiscal 2025, the midpoint of our previously guided range of 10 to 12 new stores. With the opening of our second international franchise location in India in August, we expect five more international openings over the next six months. As a reminder, we have secured agreements for over 35 additional stores in the coming years.”
– Darren Harper (CFO)
CEO acknowledges specific operational failures including abandoning TV advertising, unfocused promotions, menu missteps, and poor corporate-field communication.
“We made specific execution missteps that resulted in lack of awareness of our offerings and inconsistent operational execution. In marketing, we moved away from TV completely and we had an unfocused promotional strategy going from a few targeted promotions to way too many promotions. In food and beverage, we leaned too heavily on appetizers and sharable and cut most of our highest revenue menu items. Operationally, we moved too fast, creating disruptions and breakdowns in communication between corporate and the field and a loss of focus on training.”
– Terrun Lol (CEO)
New stores delivering 40%+ returns with 22 opened since FY24 start, new assets outperforming non-remodeled stores by 700 bps.
“We continue to achieve sizable 40% plus returns on our new stores and we have opened 22 since the start of fiscal 2024. While we did not execute our remodel program to date as we would like, these new assets are outperforming non-remodeled stores by 700 basis points which continues to highlight the opportunity to do more remodels at an appropriate cost and with the right elements. “
– Darren Harper (CFO)
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Meher, Vignesh & Kashish.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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