Welcome to the 92nd edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 5 companies across 5 industries and 2 addresses by Regulators.
Regulator
Reserve Bank of India
Securities and Exchange Board of India
Financial Services
National Stock Exchange of India (NSE)
Energy
Oil and Natural Gas Corporation Limited
Auto Ancillary
Hero Motors Limited
FMCG
Bikaji Foods International Limited
Textile
Pearl Global Industries
Regulators
Reserve Bank of India | Dr. Poonam Gupta Address | Macro Economy & Financial Stability
At the 13th SBI Banking & Economics Conclave, RBI Deputy Governor Dr. Poonam Gupta outlined India’s macroeconomic resilience amid compounding global shocks, detailing fiscal consolidation trends, capital market disconnects, and the structural outlook for the Indian Rupee.
[Speech]
India prioritised fiscal prudence over unsustainable economic stimulus during recent global shocks, leading the IMF to project a 5.7 percentage point decline in India’s public debt-to-GDP ratio by 2031.
“In response to such shocks, one mistake countries often make is that they try to pump-prime their economies beyond their productive capacities while stretching their fiscal envelopes beyond sustainable levels. Such endeavours end up compromising macroeconomic stability and thereby leading to growth sacrifice for a much longer period subsequently. Instead, for the past decade, India has prioritised fiscal prudence. In the latest edition of its Fiscal Monitor, the IMF (2026) projected that, in contrast to most other countries, India’s public debt, as a proportion of GDP, would decline between now and 2031 by 5.7 percentage points. This consolidation is attributed both to fiscal prudence as well as high GDP growth (both real and nominal).”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
The Reserve Bank of India highlights a disconnect between real domestic economic strength and financial markets, noting that bond markets are outperforming as they price in fiscal credibility and anchored inflation.
“This brings us to a relevant but confounding issue of whether our financial markets are currently fully reflecting this economic reality. Perhaps, only partly so. At one level, there seems to be a bit of disconnect between some parts of the financial markets and the underlying near- and medium-term promise of the real economy. What is causing this disconnect? Among the markets, the bond market has performed well, both compared to its own past as well as in comparison to most other countries. The relative strength of the market is due to the fiscal commitment of the government and the projected sustained high economic growth rates that would make the fiscal outcomes even better going forward. Credibility of monetary policy and declining structural pressures on inflation have contributed as well.”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
The recent relative lag in domestic equity markets is attributed to capital shifting toward global AI-driven trades, with expectations that strong real economy fundamentals will eventually reassert domestic market attractiveness.
“The equity markets, on the other hand, have not tracked the same optimism. This is plausibly because of a relatively more promising AI-led story in certain other economies. While the Indian equity market witnessed an exceptional run of its own, roughly from June 2022 to September 2024, some other economies are having a better run now. Eventually, the promise of the underlying real economy would reassert itself. Going by past experiences, it is only a matter of time before Indian equities look relatively more attractive again.”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
While recent commodity and gold price shocks temporarily pushed the Current Account Deficit higher and drove a 13% cumulative rupee depreciation, the RBI views this pressure as a short-term correction against 7–8% real GDP growth.
“The recent oil price and gold price shocks have pushed CAD temporarily higher. In addition, in the last two years, the capital account surplus has fallen short of CAD, resulting in a negative BOP of about US$ 5.0 billion in 2024-25 and US$ 23.6 billion in 2025-26. Against these developments, the rupee has cumulatively depreciated by 13.0 per cent (on a point-to-point basis) from March 31, 2025 to September 17, 2026. The questions then arise: How long may the BOP stay in deficit? Will it self-correct? What do history and cross-country experiences tell us about the direction of BOP and the exchange rate, especially in an economy positioned to grow at 7-8 per cent in real terms, and 11-12 per cent in nominal terms, for years and decades to come?”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
The central bank considers the cumulative Rupee depreciation an overcorrection, projecting market stabilisation and potential currency appreciation as external shocks subside and foreign capital flows normalise.
“Put together, these arguments indicate that one may think of the cumulative depreciation of the INR (or shall one say its overcorrection) in the past year and a half to be a temporary phenomenon. With the RBI remaining committed to ensuring orderly conditions in the foreign exchange market, and having the wherewithal to meet decades’ worth of CAD, or the net BOP deficit, the current market dynamics do not appear especially well-founded. If anything, there seems to be a fair case for the rupee to not just stabilise but perhaps even appreciate from the current levels, as was being anticipated by the market analysts when the capital flow measures were first announced.”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
India is advancing on a 7%+ growth floor supported by productivity gains and broad-based sectoral diversification, with structural initiatives positioned to push the economy toward an 8%+ equilibrium.
“All in all, the Indian economy has done exceptionally well, notwithstanding the multiple shocks it has faced. It is advancing ahead on a resilient growth equilibrium of 7 per cent plus, that is spatially broad-based; sectorally diversified; and underpinned by rising productivity, while steadily working to break into an 8 per cent plus equilibrium. This is quite a feat for a large emerging market, and makes India stand out in its asset class.”
Dr. Poonam Gupta, Deputy Governor, Reserve Bank of India
SEBI Chairman Address | Indian Capital Markets & Regulatory Reforms
At a capital markets conclave, SEBI Chairman Shri Tuhin Kanta Pandey outlined key regulatory initiatives to deepen corporate bond liquidity, streamline foreign portfolio investment workflows, and accelerate primary market capital formation to support India’s long-term infrastructure and economic growth.
[Speech]
The Chairman highlights strong primary market momentum, with ₹600 billion raised via IPOs in FY27 so far—55% representing fresh capital—and an upcoming listing pipeline estimated at ₹2 trillion.
“The momentum has continued in FY 2026-27, with around ₹600 billion raised through IPOs so far. Importantly, around 55% of IPO proceeds have represented fresh capital going to companies. Going ahead, potentially, around ₹2 trillion can be raised through IPOs.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
SEBI has operationalised the SWAGAT-FI framework to digitise and expedite onboarding for trusted, low-risk Foreign Portfolio Investors (FPIs), with over 200 FPIs utilising the mechanism.
“For foreign investors, our approach has been to reduce friction across the entire investment journey. At entry, onboarding is becoming faster, digital and more proportionate to risk. SWAGAT-FI reflects this approach for trusted, low-risk investors, with around 205 FPIs already using the framework since it became operational on June 01, 2026.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
To lower trading friction for foreign institutions, SEBI has permitted fund netting, reviewed block-window rules, and simplified compliance for FPIs invested exclusively in Government Securities.
“Beyond onboarding, we are reducing operational friction. The block-window framework has been comprehensively reviewed, netting of funds has been permitted to reduce funding costs, and FPIs investing only in Government Securities face simpler requirements. The objective is easier access and more efficient participation, with safeguards proportionate to risk.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
Regulatory frameworks for Alternative Investment Funds (AIFs) are adopting a tiered structure to provide accredited investors and large-value funds greater flexibility to deploy patient capital.
“In alternative investments, regulation must recognise investor sophistication. Sophisticated and retail investors need not be regulated identically. We have, therefore, provided greater flexibility to accredited investors and large-value funds, while retaining clear governance and accountability. The aim is to let patient, specialised capital reach opportunities that conventional finance may not serve.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
SEBI has launched Demat 2.0, a pilot program exploring the tokenisation of corporate bonds on a private, permissioned Distributed Ledger Technology (DLT) network operated by depositories.
“In corporate bonds, our approach has been to develop the entire market ecosystem - not merely increase issuance. A deeper market requires a wider issuer base, better price discovery, broader participation and greater secondary-market liquidity. Our reforms have therefore addressed issuance, distribution, market infrastructure and investor understanding together. More recently, we successfully launched Demat 2.0, a pilot for tokenisation of corporate bonds on a private, permissioned DLT network operated by the depositories.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
The regulator is evaluating Depository Receipts for REITs and InvITs alongside expanding FPI participation in non-agricultural commodity derivatives to deepen global market access.
“Global market access will remain a priority. We are examining simpler digital onboarding for Persons Resident Outside India, wider FPI participation in non-agricultural commodity derivatives with appropriate safeguards and Depository Receipts against units of REITs and publicly listed InvITs.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
SEBI is developing a comprehensive market-making framework for corporate debt, expanding distribution through Fixed Income Channel Partners on online bond platforms, and introducing a Credit Risk-o-Meter for retail investors.
“Corporate bonds need the next layer of depth and participation. Work is under way on developing a comprehensive market-making framework covering liquidity, market infrastructure and repo access. We are also consulting on Fixed Income Channel Partners to widen distribution through regulated online bond platforms, while the proposed Credit Risk-o-Meter seeks to make credit risk easier to understand.”
Shri Tuhin Kanta Pandey, Chairman, SEBI
Financial Services
National Stock Exchange of India (NSE) | Large Cap | Financial Services
The National Stock Exchange of India (NSE) is the country’s premier electronic exchange, providing advanced trading, clearing, and settlement services across multiple asset classes. It serves as a vital financial infrastructure pillar, supporting India’s economic growth through transparent capital formation and risk management solutions.
Management views the exchange as a foundational national institution whose growth is inextricably linked to the modernisation of India’s economy. Investors should see this as a long-term infrastructure investment rather than just a cyclical trading platform.
“The concept of NSE emerged from the market reforms of 1991–1992 following the Harshad Mehta scam, when India liberalised its economy. When NSE was conceptualised in 1992 as an automated, computer-driven exchange, many doubted whether bankers could successfully run a vibrant trading platform, especially after the failure of OTC. When NSE launched its debt market in 1994, followed by equities, many dismissed it as a passing phase. Yet it transformed Indian finance by pioneering electronic trading, real-time risk management, automated clearing houses, and national depositories. Institutions like NSE are created once in a nation’s lifetime. In 1994, it brought first-hand IT access to millions across India. Today’s listing is simply another milestone in India’s broader journey toward becoming a developed economy over the coming decades.”
— Ashishkumar Chauhan, Managing Director & CEO
Management believes that recent regulatory tightening in the derivatives market is a necessary correction to prevent speculation rather than a threat to growth. They expect the core business to continue growing at a double-digit rate despite these new restrictions.
“Regulatory measures surrounding retail options trading represent temporary correction phases within a long-term cycle. Neither the regulator nor the exchange questions the fundamental legitimacy of the derivatives market. The objective is to adjust market mechanics so derivatives serve their core purpose—price discovery, hedging, and risk management—rather than speculative gambling. Furthermore, we are only scratching the surface of India’s capital market potential. Even if specific trading products face calibrated restrictions, NSE’s underlying growth potential remains in the early double digits.”
— Srinivas Injeti, Public Interest Director
The exchange is diversifying its revenue streams by expanding into international capital gateways and high-potential products like gold receipts. These initiatives provide new growth avenues that reduce the company’s reliance on traditional domestic equity trading.
“NSE is developing international growth drivers, such as NSE International Exchange at GIFT City IFSC, which acts as a gateway for global capital. We are also focusing on initiatives like Electronic Gold Receipts (EGRs) to monetise India’s estimated 35,000 tonnes of domestic gold reserves, which could significantly reduce physical gold imports.”
— Srinivas Injeti, Public Interest Director
Leadership clarifies that regulatory changes are being made collaboratively with the industry to ensure market stability. The observation that trading volumes have stabilised suggests that the immediate impact of regulatory changes is already factored into performance.
“The regulator is not acting disruptively; SEBI has adopted a consultative process to implement safeguards without damaging market development. F&O volumes have stabilised rather than entering a downward spiral, so market impacts should not be overplayed.”
— Srinivas Injeti, Public Interest Director
NSE has deliberately restructured its product offerings to move away from an over-dependence on volatile weekly options. With 58% of income now coming from more stable sources, the company has built a more resilient revenue model.
“Three years ago, when daily options expiries were introduced across the industry, concerns arose regarding over-reliance on weekly options. NSE systematically rebalanced its product suite, reducing weekly expiries down to one per week and making core products like Bank Nifty monthly. Today, out of every ₹100 in NSE’s operating income: ● ~₹42 comes from weekly options. ● ~₹58 comes from non-weekly sources, including monthly options, index futures (~8%–9%), monthly stock options (~8%–9%), market data services, colocation infrastructure, terminal fees, and communications (~12%–15%).”
— Ashishkumar Chauhan, Managing Director & CEO
The exchange has demonstrated a high level of financial resilience, outperforming negative market forecasts despite significant regulatory shifts. Achieving nearly 10% growth in a challenging environment highlights the strength and scale of the platform.
“Three years ago, when regulatory tightening began, market participants expected our revenues to drop 30% to 40%. In reality, revenue dipped by just 2% to 3% before rebounding. In Q1 FY27, NSE delivered 8% to 10% year-on-year growth across revenue, EBITDA, and PAT. Our operational reality has consistently outperformed negative market expectations.”
— Ashishkumar Chauhan, Managing Director & CEO
Management is taking a conservative and regulation-first approach to listing its various business units. This suggests that while value unlocking is possible, it will not be rushed and depends heavily on regulatory approval.
“Subsidiaries must achieve critical scale and sustained profitability before listing can be considered. Furthermore, regulatory considerations play a significant role, as regulators may view certain market infrastructure subsidiaries as core public utilities that should remain unlisted.”
— Srinivas Injeti, Public Interest Director
The management plays down the impact of competition with other exchanges, noting that most volume shifts are due to regulatory adjustments rather than competitive losses. They emphasise that systemic cooperation on safety and surveillance is the actual priority over market share battles.
“Market share shifts reflected specific regulatory interventions designed for investor protection. Over recent quarters, NSE’s volume and market share have steadily recovered across Q1 and Q2 FY27. Regarding inter-exchange dynamics: 99.99% of the time, frontline regulatory exchanges must cooperate seamlessly on surveillance, risk management, and broker compliance. Market competition accounts for less than 0.01% of operational reality.”
— Ashishkumar Chauhan, Managing Director & CEO
NSE is monitoring global trends that allow exchanges to list on their own platforms, provided strict governance rules are in place. While not an immediate goal, this move could eventually streamline its corporate structure if the regulator approves.
“Global jurisdictions increasingly permit self-listing where robust regulatory firewalls exist to manage governance conflicts. While self-listing aligns with international best practices and remains a logical long-term framework, it depends entirely on regulatory comfort. It is not something we are desperately pursuing, but rather a framework that may evolve naturally over time.”
— Srinivas Injeti, Public Interest Director
The company’s business model benefits significantly from high operating leverage, meaning profits grow faster than revenue as volume increases. Management quantifies its growth as a multiplier of India’s GDP, positioning it as a high-growth proxy for the overall economy.
“NSE operates as a technology platform player with fixed baseline infrastructure and manpower costs. Operating leverage dictates that when market volumes expand, EBITDA margins expand accordingly. Because exchange activity is intrinsically tied to national economic expansion, NSE operates at an economic beta of approximately 1.5x to 2.0x relative to India’s GDP growth. As India’s economy grows, investor additions, corporate listings, and transaction volumes scale at a faster multiplier.
— Ashishkumar Chauhan, Managing Director & CEO
Energy
Oil and Natural Gas Corporation Limited | Large Cap | Energy
Oil and Natural Gas Corporation Limited is India’s largest government-owned energy company, specialising in the exploration and production of crude oil and natural gas. It contributes approximately 70% of India’s domestic production and maintains significant international operations through its subsidiary, ONGC Videsh.
The company has achieved its first successful gas discovery in the Mahanadi basin under a new government-backed risk-sharing framework. This shift in policy allows the firm to explore high-risk deepwater blocks with reduced financial exposure compared to previous models.
“Under the Samudra Manthan initiative, this well has struck natural gas. ONGC has previously discovered gas in this part of the Mahanadi basin, but under Samudra Manthan, this is our first gas strike, which is very positive news. We now have a very enabling environment because, through Samudra Manthan, the government is for the first time sharing exploration risks directly alongside operating companies.”
— O. P. Sinha, Director (Exploration)
Management estimates the total resource potential of the Mahanadi basin at 600 million metric tonnes of oil equivalent. Investors should note that these are prospective resources that require further drilling to be classified as proven, bankable reserves.
“Regarding block size and reserves, the Mahanadi basin is highly prospective, with estimated total resources of around 600 million metric tonnes of oil equivalent (MMTOE). While these are total prospective resources, conversion into proven reserves is an ongoing, continuous process. Exact reserve volumes will evolve as the drilling campaign progresses.”
— O. P. Sinha, Director (Exploration)
Domestic gas discoveries are a priority as India attempts to double the share of natural gas in its energy mix to 15% by 2030. Success in these exploration programs is vital for reducing the country’s reliance on expensive energy imports.
“On its national significance: India currently imports nearly 50% of its natural gas requirements. Discovering substantial domestic gas volumes is critical for import substitution. Furthermore, the country aims to raise the share of natural gas in its primary energy mix from the current 6%–7% to 15% by 2030. This discovery and our forward exploration work program will directly support achieving that 15% target by 2030.”
— O. P. Sinha, Director (Exploration)
The discovery well has demonstrated a flow rate of 0.25 million metric standard cubic meters per day during initial testing. This specific metric provides a baseline for analysts to model the potential output of the reservoir once it is fully developed.
“Regarding the flow rate, testing is still ongoing, but the well has tested at close to 0.25 million metric standard cubic meters per day (MMSCMD).”
— O. P. Sinha, Director (Exploration)
The company has identified both shallow and deep prospective targets, with the current discovery occurring at a shallower, more cost-effective depth. A final investment decision will depend on understanding how these different plays can be integrated into a single development strategy.
“Drilling costs directly correlate with target depth. While we struck gas at a relatively shallow depth in this specific well, the Mahanadi basin also contains deeper prospective targets that we plan to drill. Regarding commercial development timelines, we must first establish and delineate gas volumes across both the shallower and deeper plays. Once those volumes are consolidated, the comprehensive field development plan will be finalised.”
— O. P. Sinha, Director (Exploration)
Each deepwater appraisal well requires a three-month drilling window, suggesting a lengthy timeline before the project reaches a final investment decision. Management warned investors against relying on speculative market estimates for project costs during this early phase.
“Yes, drilling a single deepwater well takes approximately three months, so the full appraisal process will require additional time. Consequently, any speculative capex figures currently floating around for the development phase are unviable and unconfirmed.”
— O. P. Sinha, Director (Exploration)
The government is supporting exploration through a three-tier framework that funds seismic surveys, exploratory drilling, and shared infrastructure. This risk-sharing model significantly lowers the break-even cost and upfront capital requirements for ONGC in deepwater environments.
“It is not a matter of direct subsidies. Under the Samudra Manthan framework, the government provides structured budgetary and financial support across three core elements: 1. Funding for initial 2D/3D seismic surveys. 2. Partial funding for exploratory well drilling, which represents the major capital expenditure risk. 3. Financial support for developing common offshore infrastructure hubs. This risk-sharing support reduces upfront capex for operating companies like ONGC, improving the overall commercial viability of deepwater exploration.”
— O. P. Sinha, Director (Exploration)
Auto Ancillary
Hero Motors | Small Cap | Auto Ancillary
Hero Motors is a global precision engineering firm specialising in integrated powertrain systems and automotive components. The company operates high-margin divisions in brakes and aerospace while maintaining strategic joint ventures with global leaders like ZF and Yamaha.
Hero Motors is shifting from manufacturing individual parts to providing fully integrated and tested systems for its customers. This transition is expected to lift profit margins above the typical industry average for automotive component suppliers.
“Fundamentally, our company possesses strong structural capabilities supported by global joint venture partners such as ZF, Mitsui, Sumitomo, and Yamaha. We are transitioning from a component supplier to an integrated system solutions provider, moving significantly up the value chain. As we move up the value chain by offering end-of-line testing and integrated systems, margins expand beyond standard 10%–15% levels.”
— Pankaj Munjal, Chairman
The company is currently finalising major international contracts and professionalising its management structure following its stock market listing. Management wants investors to re-rate the business as a technology-driven system provider rather than a commodity manufacturer.
“In the coming months, we expect to sign several large contracts. Our Managing Director is currently in the UK finalizing agreements. While we are transitioning from an informal family-run organization into a structured, public enterprise with formal reviews, our core operational DNA remains intact. We are deploying capital, technology, and engineering capabilities to scale to the next level. Investors should classify Hero Motors not merely as a component maker, but as an integrated system solution supplier.”
— Pankaj Munjal, Chairman
Management is prioritising the expansion of sales to their current tier-one global clients to grow their ‘share of wallet.’ This strategy reduces the high cost and risk of finding new customers, ensuring more efficient capital deployment and predictable growth.
“We already serve iconic global customers. Rather than spending capital hunting for new clients, our strategy is to drill deeper into our existing customer base—who are among the best in the world—to increase our share of wallet. Expanding within established relationships lowers customer acquisition costs and reduces execution risks while driving exponential growth. Over the next two years, our business model will be fully transformed.”
— Pankaj Munjal, Chairman
The company is leveraging its relationship with Hero Cycles to supply high-value electric drive units for the booming global e-bike market. These internal synergies provide a guaranteed demand channel and position the company as a key player in the green mobility supply chain.
“Unlike a traditional component manufacturer whose product scope remains static over time, we build high-value systems. For instance, our parent entity, Hero Cycles—the world’s largest cycle manufacturer—is signing major international contracts to manufacture e-bikes globally. Hero Motors will produce and supply the integrated Electric Drive Units (EDUs) for these global e-bikes, capturing massive intra-group synergies. These operational catalysts are taking shape over the coming months.”
— Pankaj Munjal, Chairman
Hero Motors is expanding its high-precision engineering expertise into the aerospace sector through direct relationships with industry leaders. This expansion diversifies the company’s revenue streams into a high-barrier, high-margin industry beyond traditional automotive parts.
“Regarding our capabilities and growth strategy, precision engineering for aerospace has emerged as a key focus area. We are not losing focus; we specialize in high-precision engineering solutions. In aerospace, we deal directly with the top four global industry leaders and are actively working on opportunities where we expect concrete progress soon.”
— Pankaj Munjal, Chairman
The company possesses specialised divisions and joint ventures that generate significantly higher margins than its core automotive business. These technical partnerships and high-margin segments provide a strong financial foundation and a competitive technological edge.
“Beyond our core operations, we hold leading market positions across adjacent businesses—such as our brakes division, which enjoys a 28% EBITDA margin. We also operate strong joint ventures including ZF Hero, and maintain strategic relationships with global players like Foxconn.”
— Pankaj Munjal, Chairman
Leadership is currently focusing on operational efficiency and technological upgrades rather than immediate corporate restructuring or stock price movements. This emphasis on ‘shop floor’ execution suggests a long-term commitment to improving fundamental business performance and productivity.
“Regarding corporate restructuring or reverse mergers, our executive team is highly ambitious, but right now our heads are down and we are fully focused on core execution. I am not watching short-term stock price fluctuations; my focus is entirely on shop floor efficiencies, customer satisfaction, latest technology adoption, and engineering innovation.”
— Pankaj Munjal, Chairman
FMCG
Bikaji Foods International Limited | Small Cap | FMCG
Bikaji Foods International is a leading manufacturer of ethnic Indian snacks, including bhujia, namkeen, and sweets, with a significant presence across India and international markets. The company is currently expanding its presence into the western snacks category and scaling its distribution through quick-commerce and e-commerce channels.
Management is seeing strong consumer demand and distribution loading ahead of the Diwali festive season. The high-teens growth in core snacking indicates healthy volume momentum despite broader inflationary pressures.
“The festive season momentum and excitement are very high. Channel loading begins around 30 to 15 days before Diwali as we fill the distribution pipeline across our distributor network to reach retail outlets. For our sweets portfolio, which has a shorter shelf life, major secondary sales and offtake occur closer to the festival, starting from October onwards. Meanwhile, our core snacking portfolio is performing very well, growing in the high teens, which aligns with current consumption trends.”
— Manoj Verma, Chief Operating Officer
The company is maintaining its revenue growth targets but has lowered its full-year profitability outlook. Investors should expect a margin contraction of 1.5% as input costs outweigh top-line gains.
“On the top-line front, we are fully confident in achieving our mid-teens guidance and delivering on our commitments. However, given the sharp rise in crude and key commodity prices, operating margins will see a slight compression. We expect a margin slip of approximately 150 basis points for the full year, rather than maintaining the peak 15% to 16% level.”
— Manoj Verma, Chief Operating Officer
Bikaji is facing a significant 6% to 7% increase in raw material costs, primarily driven by expensive edible oils and crude-linked packaging. This breakdown highlights the specific macro variables that will impact earnings quality in the coming quarters.
“Two major factors are driving input cost inflation: 1. Edible Oils: Continuing double-digit price increases. 2. Packaging Materials (PM): Directly impacted by rising crude oil prices. Along with pulses (dals) and sugar, the net year-on-year inflationary impact across our entire raw material basket is around 6% to 7%.”
— Manoj Verma, Chief Operating Officer
The company has implemented partial price hikes to offset roughly two-thirds of its total input cost inflation. The decision not to pass on the full impact suggests a tactical move to protect market share and volume growth during a peak season.
“We have passed on approximately 4.5% to 5% of this inflation to consumers across select product categories, though not across our entire portfolio.”
— Manoj Verma, Chief Operating Officer
Digital sales are growing exponentially, with quick-commerce emerging as a key driver for both traditional snacks and seasonal sweets. This shift in distribution mix could improve access to urban consumers and reduce traditional inventory lag.
“E-commerce and quick-commerce channels are performing exceptionally well. Growth is no longer measured in percentages; it is scaling in multiples due to rapid consumer adoption and channel expansion. Interestingly, even packaged sweets—a category that historically lacked high salience on digital platforms—are seeing strong festive demand on quick-commerce.”
— Manoj Verma, Chief Operating Officer
International growth is being constrained by skyrocketing shipping costs and global supply chain disruptions. Investors should temper expectations for the export segment as high freight costs act as a drag on international margins.
“Conversely, our export division faces geopolitical and logistics headwinds. Ocean freight costs have surged nearly fourfold, and securing timely container availability remains a major operational bottleneck.”
— Manoj Verma, Chief Operating Officer
Bikaji is aggressively targeting the western snacks market to diversify its revenue beyond traditional ethnic products. The projected 1.5x relative growth rate indicates a strategic pivot toward a larger, albeit more competitive, market segment.
“Traditional ethnic snacks remain our core heritage and primary growth engine. However, the western snacks category presents a massive market opportunity because its total addressable market size in India is as large as—if not larger than—traditional snacks. We expect our western snacks division to grow at 1.5 times the rate of our traditional snacks segment. Over the next two years, we project western snacks to increase its contribution to around 11% to 12% of our total business revenue.”
— Manoj Verma, Chief Operating Officer
Textiles
Pearl Global Industries Limited | Small Cap | Textiles
Pearl Global Industries is a leading multinational apparel manufacturer that provides end-to-end supply chain solutions to global retailers. The company operates a multi-geographical manufacturing base across India, Bangladesh, Vietnam, and Indonesia, supported by design hubs in major fashion capitals.
Management is confident in reaching their long-term 2030 targets because they are already ahead of their previous growth schedules. This suggests strong demand and successful execution of their global expansion strategy.
“Good morning. What gives us confidence is our performance over the last three to four years. We are already tracking well ahead of the timelines we had outlined in our earlier guidance. The current commercial traction from our global customer base, evolving geopolitical supply chain realignments, and our strategic multi-product, multi-geography manufacturing footprint give both our customers and us the confidence to scale further. The long-term figures we have shared reflect our concrete internal forecasts.”
— Pallab Banerjee, Managing Director
The company expects a slight increase in average selling prices per garment as they refine their product mix. This modest growth in realisation provides a stable foundation for revenue expansion without relying on aggressive price hikes.
“FOB price realisation represents our average selling price at the origin port when handing over finished goods to international customers. It is calculated by dividing total garment revenue by the total number of pieces shipped. In our long-term financial modelling, we keep pricing relatively constant with minimal inflation adjustments. We are moving from a historical baseline of around ₹640 per garment toward ₹660 to ₹670 over the next four years. Because we manufacture across six distinct apparel categories, price realisation varies by product type—a basic T-shirt commands a lower unit realisation compared to an outerwear jacket, with pants and shirts falling in between. The ₹660 to ₹670 range represents our blended portfolio average.”
— Pallab Banerjee, Managing Director
Pearl Global is outperforming the broader Indian textile industry by leveraging its presence in multiple countries and offering design expertise. This multi-country approach reduces geographic risk and makes the company a more essential partner for major international brands.
“Yes, it is above standard industry averages. The domestic Indian textile industry faced significant tariff and trade headwinds over the past year. To look at global scale: the international garment trade is valued at approximately $550 billion. China leads with $150 billion in exports, followed by Bangladesh and Vietnam at $48 billion and $44 billion, respectively, while countries like India and Indonesia operate at around $15 to $17 billion each. Given our established manufacturing presence across Vietnam, Bangladesh, Indonesia, and India, we are uniquely positioned as a true global vendor to international buyers. Beyond manufacturing, we provide design solutions tailored to major retail markets across the US, EU, UK, Australia, Japan, and Canada. Delivering global fashion intelligence and design capabilities makes global retailers heavily reliant on us, differentiating Pearl Global from competitors focused on single geographies or limited product lines.”
— Pallab Banerjee, Managing Director
The company plans to boost its profit margins by manufacturing its own fabrics and handling specialised washing in-house. By performing these tasks themselves instead of paying third parties, they can keep more of the total profit for themselves.
“First, operational leverage plays a major role. As revenue scales, we leverage front-loaded fixed investments—such as our international design teams located in key fashion hubs like London, Barcelona, and New York. Second, two major strategic initiatives will directly drive margin expansion: 1. Vertical Integration: Bringing knit/jersey fabric manufacturing in-house. 2. Value-Added Processing: In-sourcing specialised garment washing and dyeing processes for high-fashion denims. By processing fabric and value-added washing internally rather than outsourcing, we directly capture that margin.”
— Pallab Banerjee, Managing Director
Management expects earnings per share to grow as fast as or faster than operating profits because they won’t need to issue new shares for expansion. This is a positive sign for shareholders as it prevents their ownership value from being diluted during growth.
“Regarding net profit compounding: because we have established our core infrastructure, future capital deployment will rely heavily on internal cash generation and standard project debt without equity dilution. Consequently, EPS and PAT growth should compound at or above the rate of EBITDA growth.”
— Pallab Banerjee, Managing Director
A large investment of 725 crore rupees is planned to expand production and integrate supply chains over the next four years. Over half of this budget is already approved, showing the company’s clear commitment to its scale-up plans.
“We have planned a total capital expenditure of ₹725 crore over the next four years, of which over ₹400 crore has already been sanctioned by our Board. The capex breakdown is as follows: ● ₹300 to ₹325 crore: Direct garment manufacturing capacity expansion. ● ₹350 to ₹375 crore: Vertical integration (knit fabric mill and in-house denim washing infrastructure).”
— Pallab Banerjee, Managing Director
New manufacturing assets are expected to be profitable immediately because the company already has the internal demand to fill those factories. This reduces the typical risks associated with new projects and helps maintain high returns on capital.
“Yes, ROCE will remain above 22%. Because the fabric and washing capacity we are setting up will immediately service existing, captive garment orders currently being procured from third parties, there is no gestation lag in demand. We already consume 40 tonnes of fabric, so bringing processing in-house immediately accrues margin to the bottom line, allowing full capital turnover within four to five years.”
— Pallab Banerjee, Managing Director
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