The Chatter: Reading the terrain
Edition #51
Welcome to the 51st 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 11 industries, along with an international features.
Financial Services
HDFC Bank
Defence
Bharat Electronics Limited
Software Services
Tech Mahindra
Persistent Systems Limited
Tyres
Apollo Tyres Limited
Auto
Maruti Suzuki India Limited
Hero MotoCorp Limited
Engineering & Capital Goods
Larsen & Toubro
Indian Railway Finance Corporation Limited
Building Materials
JK Cement Limited
Energy
Adani Total Gas Limited
GAIL India Limited
Healthcare
Ajanta Pharma
Consumer Durables
Blue Star Limited
Retail
Kalyan Jewellers India Limited
International
Accenture plc
Financial Services
HDFC Bank | Large Cap | Financial Services
HDFC Bank and its subsidiaries offer various banking and financial services such as retail banking, wholesale banking, treasury operations, insurance, and asset management. With overseas branches in multiple countries, the bank operates in segments including Wholesale Banking, Treasury, and Retail Banking.
[Concall]
Keki Mistry strongly asserts the bank’s top-tier governance and ethical standards, expecting future performance to validate this claim.
“Please believe me, we have the strongest form of governance in the bank. There is nothing wrong from an ethical perspective. In the coming months and years, the performance of the bank will reflect that.”
— Keki Mistry, Interim Chairman
Sashidhar Jagdishan expresses confidence in the economy and the bank’s strong positioning, anticipating a return to pre-merger growth levels.
“The economy is in a sweet spot. The bank is well-positioned and on its intended trajectory. You will see the kind of growth we had pre-merger coming back.”
— Sashidhar Jagdishan, CEO & Managing Director
Harsh Kumar Bhanwala details the bank’s rigorous process for investigating social media complaints and affirms a commitment to taking action against culpable individuals.
“All complaints or references in social media that impact the bank are examined and brought before the Audit Committee... We will not hesitate to take action if something adverse is found against individuals, and we have done that in the past.”
— Harsh Kumar Bhanwala, Head of Nomination & Remuneration Committee
Management indicates the outgoing Chairman cited personal value differences, not regulatory issues or bank excesses, as his reason for resignation.
“All of us had asked him what the reasons were behind this. He said, ‘I personally have no issues. It could be my value systems, which are different,’ but he did not say anything regarding regulatory excesses of the bank. It was all sound, and he agreed with us.”
— Management, Spokesperson
Keki Mistry expresses puzzlement as the outgoing Chairman did not provide specific reasons for his resignation despite being repeatedly asked.
“In fact, we had repeatedly asked him to tell us why he was bringing about this line. He did not give us anything. We had to accept it, but he said there was nothing specific. That was a bit baffling.”
— Keki Mistry, Interim Chairman
Keki Mistry highlights the RBI’s awareness and comfort with the bank’s situation, evidenced by the swift approval of his interim appointment.
“Many of the board members met the regulator, the RBI. The RBI is fully in the picture and in the loop. The fact that they are comfortable with what is going on in the bank is reflected in the fact that, within a short period of time, they approved my appointment for 3 months just to stabilize things.”
— Keki Mistry, Interim Chairman
Sashidhar Jagdishan emphasizes that the merger benefits will materialize and the bank remains well-positioned for future growth despite recent events.
“The bank has had a wonderful merger. Any merger takes time, but the fruits will start to play out. As we have committed, we are very well positioned to move ahead.”
— Sashidhar Jagdishan, CEO & Managing Director
Keki Mistry assures investors that the Chairman’s resignation will not impact the bank’s operational profitability or committed plans.
“Let me reassure you that what happened yesterday has nothing whatsoever to do with the operational profitability of the bank. None of that changes, and the bank will commit to doing whatever it has said it would do.”
— Keki Mistry, Interim Chairman
Defence
Bharat Electronics Limited | Large Cap | Defence
Bharat Electronics (BEL), a Navratna PSU under the Ministry of Defence in India, specializes in manufacturing advanced electronic products for defense forces. In addition to serving the Army, Navy, and Air Force, BEL has expanded its portfolio to include diverse offerings such as homeland security solutions, e-governance, space electronics, and energy storage products.
[Concall]
The company’s order book stands strong at INR 73,450 crores as of January 28, 2026, with INR 19,300 crores in orders acquired so far this fiscal year.
“And order book position as on 1st January 2026 is INR 73,015 crores, and as on 28th January 2026, as on today, is INR 73,450 crores. And order acquired till 1st January 2026 is INR 18,100 crores, and till today is INR 19,300 crores.”
— Manoj Jain, Chairman & Managing Director
The recent EU deal presents new market and joint research opportunities, particularly for R&D-focused companies like BEL, potentially leading to future business.
“It is too early to tell that right now. But definitely it is opening up a new market for us. And there is 1 more thing, new joint research opportunities also. Because I think they have told that there is a big research fund also available with EU, where they want to have some joint development. So, there are definitely companies like BEL who are R&D focused, and technology focused companies. We will have good tie-ups for a good joint research and where we may expect some funds flow also from research point of view.”
— Manoj Jain, Chairman & Managing Director
BEL has mitigated the risk of semiconductor shortages by developing alternate, more generic designs and does not foresee a major impact on operations.
“Semiconductor chips are very important component of BEL designs, no doubt on that. But knowing this shortage of chips and especially sometimes 1 particular type of chips are in shortage. We had already made design efforts to make alternate designs. So, based on that, today we are not feeling that hit on because of shortage of chips. So, our designs are now much more generic I should say like that.”
— Manoj Jain, Chairman & Managing Director
BEL is actively indigenizing critical semiconductor chips, including developing its own designs and engaging early with new Indian fabs, to reduce import dependencies.
“So, we are coming out with that type of a plan of indigenizing those chips. So, firstly we want to start with some critical chips. We have already done some investment for microwave-related important chips. So, we have designed our own chips to avoid this type of shortages and this type of dependencies. A few of digital chips also, fabless designs we have done. And all the fabs which are coming in India, we have signed an MOU with them, and early engagement already started with them to leverage on strengths of them manufacturing in India.”
— Manoj Jain, Chairman & Managing Director
For the QRSAM project, the missile component, roughly 30% of the total order value, will be subcontracted to BDL, with BEL executing the remaining 70% with other industry partners.
“QRSAM is a very complex project, consisting of various big, big subsystems. And missile is of course the largest subsystem, and missile will go to BDL from BEL. So, BEL will place an order. Once we receive the order, we will place an order to BDL about the missile. And missile order itself will be roughly around 30% of the total order value, roughly, I am telling you.”
— Manoj Jain, Chairman & Managing Director
BEL aims to significantly increase its non-defense revenue from 6-7% to over 10% in the near future and 15% long-term, driven by opportunities in Railway, Metro (KAVACH, CBDC, PSD), and Aviation sectors.
“Certainly, as you also told, right now our non-defense is around 6%, 7% type of thing only, which we want to definitely cross (+10%) in near future and long-term our aim is to make it 15 % and beyond. So, for that continuous efforts are being done, especially in Railway and Metro segment we have got good leads, KAVACH program is going in right direction. Our CBDC program also is coming to almost a finishing touch and PSD platform, Screen Doors we have got some orders and some more good leads are there for us.”
— Manoj Jain, Chairman & Managing Director
BEL aims to aggressively grow its secure, value-added data center solutions business, targeting over INR 1,000 crores annually from next year, leveraging AI and cybersecurity.
“Yes, orders what we have won is a few hundred crores, which is not our aim. Our aim is to quickly get a few thousands of crores in this data center business. And main aim is that we wanted to give a secure data center solution and combined not only as a data center as a combined value-added solution with the AI cyber security and other components built into these digital platforms. So, we wanted to give a comprehensive package around data centers, so that is our aim and we have done some good beginning right now. Our aim is minimum INR (+1,000) crore next year onwards from data center type of business.”
— Manoj Jain, Chairman & Managing Director
BEL plans to significantly increase its R&D investment by over 20% year-on-year, targeting over INR 1,700 crores this year and INR 2,000 crores next year, to support indigenization and new technology development.
“Yes. This R&D CAPEX means R&D expenditure total, R&D expenditure has 2 components, one is revenue and one is CAPEX, CAPEX requirement of the R&D community means the test instrument and other infrastructure. So put together itself we will call it as a total R&D expenditure for us. That last year, it was INR 1,468 crore or so. This year, our target is crossing INR 1,700 plus crores and next year, it will be more than INR 2,000 crores. So overall, now, we wanted to have almost 20 % plus increase year-on-year on our R&D expenses...”
— Manoj Jain, Chairman & Managing Director
BEL is actively pursuing export opportunities across its operations, aiming to increase export turnover from the current 3-4% to 5% in the near term and 10% long-term.
“Definitely, export opportunities are there in all the areas of BEL’s operation and we are doing a focused attempt to increase our export turnover from presently 3% to 4% to 5% in near future and overall 10% in a long-term.”
— Manoj Jain, Chairman & Managing Director
Software Services
Tech Mahindra | Large Cap | Software Services
Tech Mahindra Limited, a global leader in digital transformation and consulting services, offers a wide range of solutions including Telecom IT & Network Services, Application Outsourcing, Engineering Services, BPO, and more. Combining physical and digital design with advanced technologies like AI, ML, IoT, and AR/VR, the company helps clients drive digital transformation and innovation for their businesses.
Tech Mahindra is enabling scalable AI adoption through platform-led solutions like Orion and Indus, focusing on flexibility, multi-use deployment, and responsible AI integration.
“We have built platforms to adopt the responsible adoption of technologies like agentic AI across multiple different processes that our clients want to transform. Our agentic AI platform is called Orion. Similarly, we built a platform to train language models called Indus… the best way to create scale and scalable advantage for our customers is to deploy platforms which allow you to solve multiple use cases using the same technology.”
— Sham Arora, CTO, Tech Mahindra
Successful AI adoption requires strong underlying architecture, including modernized systems, accessible data, and flexible model integration.
“Our platform has flexibility—it allows you to use different models, define your own workflows, create agents, and provide context to those agents. But underlying this is a lot of work in modernizing technology platforms, exposing data so AI can consume it, and building the right architecture across the enterprise.”
— Sham Arora, CTO, Tech Mahindra
AI is currently driving efficiency gains by solving specific operational inefficiencies rather than fully transforming business models.
“We have done significant work with clients solving very specific problems—improving inefficiencies rather than displacing tasks… reducing downtime in systems, interpreting manuals in multiple languages to fix equipment faster, and enabling predictive maintenance.”
— Sham Arora, CTO, Tech Mahindra
The next phase of AI—transforming customer experiences and enabling new business models—is still evolving and yet to scale.
“When it comes to using AI for transforming experiences, businesses, or creating new innovations, that journey is still evolving and yet to fully scale.”
— Sham Arora, CTO, Tech Mahindra
Core SaaS systems will remain intact, while workflows and user experiences built on top will evolve significantly with AI.
“Systems of record—like ERP systems or customer data platforms—are always going to stay. What will evolve are the workflows and experiences built on top of them… the possibilities of that evolution have gone up much more significantly.”
— Sham Arora, CTO, Tech Mahindra
AI should be viewed as a full-stack opportunity spanning infrastructure to experience layers, not just a narrow disruption.
“AI is really a layered stack—from energy and infrastructure to data, models, applications, orchestration, and experience… at Tech Mahindra, we are working across all of these layers.”
— Sham Arora, CTO, Tech Mahindra
AI is improving the quality of work, enhancing ROI, and is expected to drive sustained industry growth and enterprise spending.
“The work enabled by AI is becoming richer, creating better value, and delivering stronger ROI… that’s why we believe the industry will continue to grow and attract more enterprise spending.”
— Sham Arora, CTO, Tech Mahindra
Persistent Systems Limited | Mid Cap | Software Services
Persistent Systems is a global digital engineering and enterprise modernization company that provides software product development and technology services. The company specializes in cloud, data, and AI-driven transformation for clients across banking, healthcare, and high-tech industries.
[Concall]
Using internal AI platforms is starting to significantly increase profit margins by reducing manual effort. This shows that AI is moving from a cost center to a major driver of profitability.
“As we have been sharing with you, a greater proportion of our services engagements are now driven by our AI platform and tools... Couple of engagements of this nature, which we signed in the last quarter and which are now scaling up, have contributed to an improvement in margin by 150 basis points.”
— Vinit Teredesai, Executive Director and Chief Financial Officer
Internal AI tools are drastically improving the company’s own operational efficiency. These metrics serve as a powerful case study to convince prospective clients of the efficiency gains they can achieve.
“ITAssist has reduced mean time to resolution for IT-related incidents from 3 hours to under 30 minutes cutting manual workload by 70%.”
— Debashis Singh, Chief Information Officer
The SASVA tool automates the understanding of old, complex codebases, allowing for faster modernization. This technological edge enables the company to deliver projects faster than traditional competitors.
“Our SASVA platform helped us decode the legacy logic, which is otherwise scattered across the enterprise... while preserving mission critical continuity and targeting around 22% productivity as well as time-to-market improvement.”
— Jaideep Dhok, Chief Operating Officer
AI tools are providing massive efficiency gains in specialized areas like pharmaceutical research and development. This domain expertise creates a high barrier to entry for other IT service providers.
“The solution involved AI-enhanced biomedical knowledge graph designed specifically for their Crohn’s disease R&D pipeline. The solution delivered a 60% uplift in data mining efficiency and drove up to 40% higher productivity in their drug discovery process.”
— Jaideep Dhok, Chief Operating Officer
The iAURA platform significantly cuts the time and effort needed for large-scale data migrations. This allows the company to secure major projects in highly regulated sectors like banking.
“This engagement fully leverages multiple accelerators within our agentic data platform iAURA spanning across assessment, platform development, governance, observability and the migration itself. The result is a stronger data outcome while fully addressing regulatory, governance and data sharing obligations and we are seeing overall program effort reduced by approximately 40%.”
— Jaideep Dhok, Chief Operating Officer
Securing a massive $100 million contract from a top-tier US bank demonstrates the company’s ability to win large, complex enterprise deals. This proves they can compete with much larger global IT firms.
“A Tier-I bank in the US selected Persistent to support their transformation program in its cybersecurity organization... we won a total of $100 million TCV deal this quarter, which included 25% new TCV component.”
— Saurabh Dwivedi, Corporate Vice President, Finance and Strategy
The company is shifting toward selling technology and services together rather than just billing for hours. This model makes their services more unique and can lead to more predictable revenue over time.
“The second part of it is where we have our own technology stack... more and more, we are not pricing things in a way that we are taking these things as independent sales. These are integrated sales and the timing of the revenue recognition will depend on how these are priced.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Management is investing heavily in creating its own software tools and platforms. These investments are now starting to generate direct revenue, justifying the high research and development spending.
“We have been heavily investing into developing new AI tools, productivity tools, SASVA platform, iAura, etc. As a result of that, you’re seeing the increment that is happening on the intangible assets... The good part is we are also being able to link and generate revenue out of it, which sort of justifies the capitalization.”
— Vinit Teredesai, Executive Director and Chief Financial Officer
Management believes their early focus on AI gives them a structural advantage over competitors. They plan to use current project successes to win even more business in the growing AI market.
“Today, we have a head start. And we believe with our continued investment, we should be able to manage our competitive differentiation... we have won significant deals. Those should fuel more deals, showcasing these deals with other customers.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Their tools can automatically extract business rules from old software that humans no longer understand. This unlocks massive modernization projects that were previously considered too difficult or risky.
“Using our platforms, we are able to get to 60 to 70% of reverse engineering of business logic... The benefits are far, far more than just a productivity gain.”
— Sandeep Kalra, Executive Director and Chief Executive Officer
Tyres
Apollo Tyres Limited | Mid Cap | Tyres
Apollo Tyres is a leading global tyre manufacturer with a dominant presence in India and a significant production footprint in Europe. The company specializes in manufacturing high-performance tyres for passenger vehicles, commercial trucks, and agricultural equipment.
[Concall]
Demand in India is growing rapidly across the replacement, original equipment, and export markets. This broad-based growth suggests the company is not overly dependent on any single sales channel.
“On the domestic front, we saw robust double-digit growth in all channels. All our three product categories saw very, very strong growth.”
— Neeraj Kanwar, Managing Director and Vice Chairman
The company’s high-profile cricket sponsorship is effectively boosting brand awareness and expanding its dealer network. Improved brand recognition typically leads to higher market share in premium consumer categories.
“Our sponsorship of the official Indian Cricket Team jersey has garnered us extensive media attention and coverage, driving unparalleled brand reach and visibility and adding distribution.”
— Neeraj Kanwar, Managing Director and Vice Chairman
Existing factories are running near their maximum capacity due to strong market demand. This utilization level signals that new investments in production capacity are necessary to sustain future growth.
“Our current capacity utilisation level in India are in the high 80s, and given our growth expectations for the near future, as seen by the current demand momentum, we would start hitting capacity limitations soon.”
— Gaurav Kumar, Chief Financial Officer
A massive multi-year investment plan has been approved to expand passenger and truck tyre production in Andhra Pradesh. This large commitment demonstrates management’s confidence in long-term domestic demand trends.
“The Board of Directors in the recent meeting approved a INR 5,800 crores capex for our AP plant for expanding both the PCR and TBR capacities, spread over the next three financial years, that is FY ‘27, ‘28, and ‘29.”
— Gaurav Kumar, Chief Financial Officer
The truck and bus radial tyre segment is operating at full capacity with no room for further internal growth. Immediate expansion is critical to prevent losing market share due to supply constraints.
“In our estimates, in TBR, we are running at close to 100% utilisation. So we need expansions coming.”
— Neeraj Kanwar, Managing Director and Vice Chairman
The company is closing a high-cost factory in the Netherlands and moving production to lower-cost regions like India and Hungary. This restructuring is expected to significantly improve the profitability of European operations by late 2027.
“The Enschede plant in Netherlands will stop production end of June 2026, one quarter into FY ‘27. The transition of the various product categories to the plant in Hungary and India is already underway and we think that in second half of FY ‘27 you would start seeing the benefit of that flowing through.”
— Gaurav Kumar, Chief Financial Officer
Direct sales to consumers for replacement tyres offer the best profit margins for the company. Investors should prioritize tracking the growth of the domestic replacement market as it most heavily influences the bottom line.
“Replacement always remains as the most profitable category. Exports is usually much lower than that. Of course, it can depend on the currency part of it. So TBR is where exports may inch up closer to the domestic replacement. But in general, domestic replacement would be always higher margin than exports.”
— Gaurav Kumar, Chief Financial Officer
The company is working to recover lost market share in the passenger car manufacturer segment but will not sacrifice profit to do so. This shows a disciplined approach to growth that prioritizes earnings quality over simple volume gains.
“We still need to regain some of the lost ground on the PCR OEM side... some of the decisions on account of profitability that were taken one or two years back... we are taking strategic calls on OE business. We will not again completely swing, ignoring the profitability aspect.”
— Gaurav Kumar, Chief Financial Officer
Auto
Maruti Suzuki India Limited | Large Cap | Auto
Maruti Suzuki is India’s largest passenger vehicle manufacturer, commanding a dominant market share in the domestic automotive sector. The company produces a wide range of vehicles including hatchbacks, sedans, and SUVs, and serves as a major export hub for Suzuki globally.
[Concall]
Recent GST reforms have triggered a massive rebound in vehicle demand across the industry. This suggests a favorable regulatory environment is driving strong volume growth for the market leader.
“The passenger vehicle industry which had experienced a decline of 0.4% in the first half of the financial year 2026, sprang to a whopping 20.5% growth in the third quarter as compared to Q3 last year. Maruti Suzuki benefited even more.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
Lower tax rates on small cars have revitalized Maruti’s core entry-level segment. This recovery in mass-market demand is a significant positive for the company’s overall volume trajectory.
“The primary driver of our sales volume growth in quarter 3 compared to the same period last year has been the small car segment in the 18% GST bracket. Fortunately for Maruti Suzuki, the demand is robust across the whole spectrum.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
Extremely low inventory levels and a high backlog indicate that the company is struggling to meet current demand. This implies strong revenue visibility for the upcoming quarters as the order book is serviced.
“We ended quarter 3 with a very low network inventory of just about 3-4 days along with a healthy order book of around 175,000 vehicles.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
The company is rapidly expanding its production capacity with two new lines totaling 500,000 units annually. Investors should view this as a commitment to capturing long-term market growth and resolving supply constraints.
“Our second plant at the Kharkhoda facility is scheduled to be operational by April 2026. Soon after in Gujarat, the D line, which is the fourth line at our existing Gujarat facility, will also be commissioned. Each will have a capacity to produce about 250,000 vehicles annually.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
Rising prices for precious metals and rare earth supply chain disruptions are pressuring operating margins. These headwinds highlight the company’s vulnerability to global commodity cycles and supply chain bottlenecks.
“There were several unfavorable factors like adverse commodity prices of about 60 basis points, largely on account of PGM, aluminum, and copper. There was an adverse impact due to rare earth element supply issues of about 20 basis points.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
The company is facing resistance from domestic steel manufacturers who may use protective duties to raise prices. Managing these raw material costs will be critical for maintaining profitability in the coming quarters.
“We will engage with the steel industry and mention to them that the safeguard duty should not be misused to increase steel prices, but it appears there are some signals they want to increase prices.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
The global rollout of Maruti’s first electric vehicle is proceeding quickly with exports already reaching 28 countries. This international expansion demonstrates the company’s ability to compete in the global EV market.
“On the eVitara, untill the end of December, we had shipped out 13,000 units which had reached 28 out of the 100 countries. The UK is our top destination in terms of volumes.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
Management believes that tax cuts for internal combustion engines will not derail the growth of electric vehicles. Continued government support through incentives ensures that the company’s EV transition remains on track.
“On ICE, I don’t think GST has a negative impact on EVs. The government is providing significant funds through the PLI scheme and other incentives. There is no reason EVs should not grow.”
— Rahul Bharti, CRO and Chief Senior Executive Officer, Corporate Affairs
Hero MotoCorp Limited | Large Cap | Auto
Hero MotoCorp is the world’s largest manufacturer of motorcycles and scooters, maintaining its leadership position for 25 consecutive years. The company is aggressively expanding into the electric vehicle market under the VIDA brand and strengthening its presence in the premium segment.
[Concall]
Management is prioritizing supply chain stability to avoid the manufacturing delays seen during previous global parts shortages. This resilience is necessary for the company to meet demand in an increasingly unstable global trade environment.
“We will also focus on ensuring that our supply chain is flexible, robust and resilient. We’ve all seen some of the disruption that as an industry, we had to face due to various component crisis and geopolitical issues.”
— Harshavardhan Chitale, Chief Executive Officer
Urban demand is currently leading the recovery due to recent tax benefits for city-dwelling workers. While urban areas are growing faster, rural demand showed unexpected strength during the recent festival season.
“Clearly, urban has more things going their way with income tax coming in and the benefits of income tax coming in and that started growing. We’ve seen that moving a little faster than the rural, though in rural, we saw in the festives, them peaking the peak.”
— Ashutosh Varma, India Business Unit, Chief Business Officer
Rising material costs and currency fluctuations are putting pressure on profit margins. The company will likely need to continue managing costs carefully to offset these higher production expenses.
“We’ve seen the prices of aluminum, precious metals going up starting last quarter. We’ve also seen some forex impact again starting last quarter... the impact coming from the commodity in the previous quarter was approximately 40 to 50 basis points.”
— Vivek Anand, Chief Financial Officer
Selling the battery separately from the vehicle lowers the initial purchase price for electric vehicle buyers. This strategy makes expensive EV technology accessible to a wider range of budget-conscious customers.
“We also launched an innovative product, which was the Battery-as-a-Service offering. This improved affordability of consumers who are looking to own an EV and help them to kind of bridge that barrier between affordability and actual desire to own a high-tech product.”
— Kausalya Nandakumar, EV Business, Chief Business Officer
The company has cleared out excess stock at dealerships to ensure that new production aligns closely with actual customer demand. Keeping inventory low improves cash flow and prevents the need for heavy discounting later on.
“We have significantly reduced our channel inventory this year. And we are very judicious in terms of planning.”
— Ashutosh Varma, India Business Unit, Chief Business Officer
Hero has successfully expanded its market share in Colombia and sees significant room for further growth in Latin America. Successful international expansion reduces the company’s dependence on the Indian domestic market alone.
“We have also done very well in Colombia, massive growth and big share expansion. And still, there is a big headroom for growth. Between us and #1 there, there is still 700 basis points available.”
— Harshavardhan Chitale, Chief Executive Officer
Management believes customers are currently willing to accept price hikes without buying fewer vehicles. This pricing power allows the company to protect its profit margins even when manufacturing costs go up.
“Market conditions are strong. And I don’t see any big concern in terms of really taking judicious price increase... I think that’s something I don’t see impacting our business going forward.”
— Vivek Anand, Chief Financial Officer
Changing social trends like city traffic and more women working are driving a shift in demand from motorcycles to scooters. Hero is pivotting its strategy to capture this faster-growing segment of the market.
“Urbanization, city is getting congested and more and more women also coming into workforce, gig economy growing... I think scooters may have higher growth rate going forward versus motorcycles as well.”
— Harshavardhan Chitale, Chief Executive Officer
The company is rapidly building a dedicated network of high-end ‘Premia’ stores to sell more expensive bikes. This retail expansion is critical for competing in the high-margin premium segment where Hero has historically been weak.
“In premium, the expansion to 106 stores already, which covers more than 50% of premium industry footprint.”
— Umang Khurana, Head, Investor Relations & Chief Risk Officer
Engineering & Capital Goods
Larsen & Toubro | Large Cap | Engineering & Construction
Larsen & Toubro is an Indian multinational conglomerate primarily engaged in engineering, procurement, and construction (EPC) projects, manufacturing, and technology services. The company operates across diverse sectors including infrastructure, energy, hi-tech manufacturing, and financial services globally.
[Concall]
Middle Eastern countries are shifting their spending towards digital transformation and urban modernization projects. This shift opens up new, high-technology growth avenues for L&T beyond traditional oil and gas infrastructure.
“In Saudi Arabia and the UAE, capital deployment remains oriented towards priority transformation agendas, including large scale investments in digital and AI enabling infrastructures such as data centers and cloud capacity, alongside ongoing urban development and infrastructure initiatives.”
— P. Ramakrishnan, Management Representative
L&T is restructuring its real estate arm into a standalone platform to improve focus and operational efficiency. This consolidation is intended to help the segment scale faster and capture more value from the Indian property market.
“The parent, Larsen & Toubro, has initiated a transfer of its realty business undertaking to L&T Realty Properties Limited, a wholly owned subsidiary... This marks the start of a phased consolidation of all real estate assets into a unified platform, positioning L&T Realty for greater scale, agility, and financial strength.”
— P. Ramakrishnan, Management Representative
The company is deepening its footprint in high-tech defense manufacturing through a major partnership for unmanned aircraft. This positions L&T to be a primary beneficiary of India’s long-term defense indigenization programs.
“The Precision Engineering and Systems business of the company entered a strategic partnership with General Atomics Aeronautical Systems to manufacture medium altitude long endurance remotely piloted aircraft systems (RPAS) in India.”
— P. Ramakrishnan, Management Representative
Profitability in the energy segment has been temporarily hurt by older, low-priced contracts that were signed during challenging periods. Once these legacy projects are completed in the coming quarters, segment margins are expected to rebound.
“The margin decline in the hydrocarbon business is primarily due to cost overruns in a few competitively priced domestic and international projects. These projects are in their terminal execution phase and are expected to conclude over the next few quarters.”
— P. Ramakrishnan, Management Representative
L&T has a massive multi-year opportunity in Saudi Arabian power projects that will be recognized in the order book over time. This phased approach ensures a steady stream of high-value work from a key international client.
“Regarding the framework agreement [Tanajib], we have a total potential of 12 gigawatts... we have included in our order inflow two of those. We are in discussion with the customer for the third and fourth packages.”
— Subrahmanian Sharma, Deputy Managing Director and President
The company is intentionally slowing down work on specific water infrastructure projects where government payments are delayed. This disciplined approach protects L&T from taking on excessive credit risk and bad debt.
“As far as water is concerned, certain projects under the central plan have faced headwinds in terms of fund allocation, and to that extent, we have calibrated our execution momentum in this segment to the extent of funds that we receive.”
— P. Ramakrishnan, Management Representative
Operational difficulties are confined to projects won during volatile pandemic years that are now nearing handover. The exit from these projects will clear the path for a cleaner, higher-margin project portfolio in the future.
“Most of the projects in the portfolio facing challenges were secured during the COVID or post-COVID period... within two or three quarters we should be out of it.”
— Subrahmanian Sharma, Deputy Managing Director and President
The company has structured its green energy deals to protect its profits from the rising costs of raw materials. This hedging and contract structure reduces the earnings volatility usually associated with renewable energy projects.
“On renewable contracts, we have passed most of the price risk to the customer... our renewable projects are subject to very limited commodity risk.”
— Subrahmanian Sharma, Deputy Managing Director and President
There is a significant resurgence in traditional coal-fired power demand in India that L&T is well-positioned to capture. This unexpected growth in thermal power adds a new engine to the company’s energy business alongside renewables.
“Market development in thermal power has been a pleasant surprise... we believe the country will add 15 to 20 gigawatts in the next two years... we see at least a 4 to 5 gigawatt opportunity for us.”
— Subrahmanian Sharma, Deputy Managing Director and President
Indian Railway Finance Corporation Limited | Large Cap | Engineering & Capital Goods
IRFC is the dedicated market borrowing arm of the Indian Railways, primarily responsible for financing the acquisition of rolling stock and infrastructure assets. It is expanding its mandate to finance the broader railway ecosystem, including private sector entities and allied infrastructure projects.
[Concall]
IRFC has officially shifted its strategy from serving only the Indian Railways to financing various clients across the railway sector. This change reduces the company’s dependence on a single client and opens new growth avenues.
“As we started this FY three quarters back, it was a new era for IRFC being entering into a diversification mode from single client system that we had for nearly 38 years to multi-client mode in the railway ecosystem.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
IRFC is focusing exclusively on large-scale corporate lending with high ticket sizes for better efficiency. This strategy allows the company to maintain low overheads while managing a massive loan book.
“We are strictly into B2B, and our efforts are that we should look for the clients which are having potential of raising around INR 10,000 to INR 15,000 crore from us, and one ticket is not less than INR 5,000 crore.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
The company aims to reach a portfolio where 40% of loans are to the broader railway ecosystem by 2030. This shift is critical as these loans are much more profitable than traditional sovereign-backed lending.
“In this 2030 plan, we are looking forward to a mix of 60-40, 60 coming from the Indian Railways and 40% of the mix coming from the railway ecosystem, where the margins are nearly 3x of what we get from the railways.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
The management is carefully selecting only the highest-quality assets for their new lending portfolio. This selectivity is the core strategy for keeping the company’s loan book free of bad debts.
“Our cherry-picking in all the ecosystem that we are doing... will remain our mainstay. And we believe that... we will be able to maintain our pristine zero NPA system going ahead also.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
The company maintains a significant cost advantage in borrowing compared to other financial institutions. This lower cost of capital allows IRFC to be more competitive and profitable in its lending bids.
“We are nearly 20 to 30 bps cheaper than anybody in the ecosystem as our peers. And overall cost is always remaining less than 7%.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
The high number of competitors bidding for the same projects validates the high quality of assets IRFC is targeting. This competitive interest confirms that the company is lending to fundamentally sound businesses.
“Participation were as large as 7 to even 15 participants from the financial sector. That is a reinforcement of the fact that we are entering into the area where 10 to 15 companies are... finding the assets as pristine.”
— Manoj Kumar Dubey, Chairman and Managing Director & Chief Executive Officer
Building Materials
JK Cement Limited | Large Cap | Building Materials
JK Cement Limited is a leading Indian manufacturer and exporter of grey and white cement with a significant presence in India and international markets. The company is executing an aggressive capacity expansion strategy focused on the Central, North, and South Indian markets.
[Concall]
Work has begun on a major new project in Jaisalmer with a target completion date in late 2027. This confirms the company’s long-term growth plan to significantly increase its total production capacity.
“We have undertaken a Greenfield expansion at Jaisalmer... civil work has already started and we are hopeful that by September 2027, this should get commissioned.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
Changes in tax rates have reduced the amount of government incentives the company receives. Investors should be aware that lower incentives can create a drag on overall profitability margins.
“Q3 number of incentives is lower on account of the GST rate cut and the impact is around INR 25 crores. So, last quarter number was INR 86 crores and this quarter it is INR 60 crores.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
Plants located near coal mines benefit from lower fuel transportation and procurement costs. This geographical advantage helps the company maintain a lower cost structure than competitors located further away.
“Central plant is actually basically more on, closer to the mines, it is more on Indian coal, which is cheaper... we are closer to the coal field, so we have an access to cheaper fuel.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
The company has set aside money to cover new liabilities caused by changes in national labor laws. While this is a one-time expense, it reflects a permanent increase in employee-related costs.
“See, as an exception item, this is under the new Labour Code... this could be the liability on account of this revision, though we are still discussing and freezing the numbers.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
The company’s new paint business is growing and is expected to stop losing money by the next fiscal year. Reaching a break-even point in this segment would remove a drag on consolidated earnings.
“And paint turnover was INR 103 crores in this quarter... and next year, what we see when we cross the INR 500 crore number with a higher gross margin, that FY 2027, we should see a break-even in the paint business.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
Further capacity expansion announcements are being held until current large projects are closer to completion. This approach shows management is balancing its growth ambitions with financial prudence.
“I think that announcement [on Muddapur] will come post-commissioning of Jaisalmer... It all depends on how you see the market at that point of time, how you see your balance sheet.”
— Ajay Kumar Saraogi, Deputy Managing Director and Chief Financial Officer
Energy
Adani Total Gas Limited | Mid Cap | Energy
Adani Total Gas is a leading Indian city gas distribution company developing networks for Piped Natural Gas and Compressed Natural Gas. It operates as a joint venture between the Adani Group and TotalEnergies, focusing on industrial, commercial, and residential energy solutions.
[Concall]
ATGL is aggressively diversifying into the electric vehicle charging market to complement it gas business. Reaching the 10,000 charge point target would establish the company as a major player in India’s green mobility infrastructure.
“Our network through our subsidiary, Adani Total Energies E-Mobility Limited (ATEEL), has installed 4,908 charge points across 26 states and union territories... We are on track with our ambition of installing 10,000 EV charge points in the near future.”
— Suresh P. Manglani, Executive Director and CEO
A significant reduction in interstate taxes lowers the landing cost of gas for customers outside the company’s home state. This tax reform makes natural gas more price-competitive against alternative fuels in new markets.
“During the quarter, the CGD industry witnessed two important regulatory developments. First, the transition to 2% CST from the earlier 15% VAT on natural gas transported outside Gujarat.”
— Suresh P. Manglani, Executive Director and CEO
The new two-zone tariff simplifies costs and benefits segments located far from gas supply sources. Unified pricing allows for more predictable margins and easier expansion into distant geographical areas.
“Second, the introduction of a simplified two-zone transmission tariff structure. Entire supplies for domestic PNG and CNG transport segments are now applied a Zone 1 tariff of 54 rupees irrespective of distance.”
— Suresh P. Manglani, Executive Director and CEO
The new tariff regime is providing a substantial cost benefit to the majority of the company’s gas portfolio. This boost is particularly helpful for scaling operations in newer territories where infrastructure costs are high.
“Applying the Zone 1 tariff of 54 rupees for entire PNG and CNG volumes—which is about 70% of our volume—has benefited us significantly, especially in GAs outside Gujarat.”
— Suresh P. Manglani, Executive Director and CEO
ATGL is actively participating in compressed biogas (CBG) production and procurement, with current blending levels below the 2% target, indicating future potential for growth in this sustainable energy segment.
“Regarding the blending, there is currently a requirement to move toward 1% and then 2%. We produce CBG through our Barsana plant and purchase from other developers under the SATAT scheme. Currently, CBG volume gets pooled, becoming part of the unified base price. Our current blending is much less than the 2% you indicated.”
— Suresh P. Manglani, Executive Director and CEO
ATGL relies heavily on domestic gas sources, which are typically cheaper than imported liquefied natural gas. The stability of these domestic supplies helps the company maintain healthier profit margins.
“Domestic gas, including APM and HPHT, comprises about 65% to 70% of our portfolio, with the balance being RLNG. We have not seen a significant depletion in domestic gas.”
— Suresh P. Manglani, Executive Director and CEO
Direct financial incentives are being used to lower the entry barrier for vehicle owners to switch to CNG. Targeting heavy vehicles like trucks and buses can lead to massive jumps in recurring gas consumption volumes.
“We have launched incentives like cashbacks of 15,000 to 20,000 rupees for retrofits and up to 1.5 lakh for trucks and buses to widen our consumer base.”
— Suresh P. Manglani, Executive Director and CEO
The majority of vehicle additions are coming from factory-fitted CNG models rather than aftermarket conversions. High OEM sales are a more sustainable driver of volume growth as they indicate broader manufacturer support for gas technology.
“A significant portion is OEM. The current trend is leaning toward new CNG vehicles due to OEM promotions and our incentives. The split is approximately two-thirds OEM and one-third retrofit.”
— Suresh P. Manglani, Executive Director and CEO
The industrial segment faces competition from other fuels when their global prices drop. This highlight shows that the company’s volume growth can be sensitive to the price fluctuations of competing energy sources.
“Propane and LPG prices were very moderate this quarter, which put pressure on our volume.”
— Suresh P. Manglani, Executive Director and CEO
Adani Total Gas is proactively advocating for stricter cleaner fuel norms and incentives for MSMEs to encourage PNG adoption, aiming to boost industrial consumption and optimize infrastructure utilization.
“We are engaging with policymakers regarding compliance with cleaner fuel norms, especially in NCR. We are also advocating for incentives for MSMEs to voluntarily opt for PNG to help boost industrial consumption and infrastructure utilization.”
— Suresh P. Manglani, Executive Director and CEO
GAIL India Limited | Mid Cap | Energy
GAIL is India’s primary natural gas company, dominating the country’s gas transmission and marketing landscape through an extensive pipeline network. The company also operates significant business segments in petrochemicals, liquid hydrocarbons, and city gas distribution.
[Concall]
The company is challenging the recent tariff order to seek a higher rate that better reflects its operational costs and capital expenditure. If successful, this petition could lead to further upside in transmission revenue and improved margins.
“GAIL filed a review petition on December 26, 2025, seeking an increase of Rs.15 per MMBTU to the interim revision. We submitted approximately Rs.78 but received Rs.65.69.”
— Rakesh Kumar Jain, Director of Finance
Management is evaluating a massive investment in two fertilizer plants to create steady, high-volume demand for its pipeline network. This move integrates the business further downstream while ensuring long-term utilization of its gas infrastructure.
“GAIL has been offered to set up two fertilizer plants along the MNJPL corridor. Apart from entering the fertilizer sector, these plants will act as an anchor load for MNJPL. The investment for these two plants is 21,000 crores.”
— Rakesh Kumar Jain, Director of Finance
The company is scaling its footprint in sustainable fuel by investing in several new compressed biogas facilities. This initiative diversifies the company’s energy portfolio and aligns with national green energy targets.
“Compressed biogas (CBG) remains a strategic pillar. Following the successful commissioning of a 5-ton-per-day CBG plant at Ranchi, the board approved investment for six additional CBG plants. These are part of our commitment to establish 25-30 CBG plants across India.”
— Rakesh Kumar Jain, Director of Finance
The company plans to aggressively expand its long-term gas sourcing portfolio by over 30% by the end of the decade. Increasing the volume of contracted gas allows the company to secure supply for India’s growing industrial and domestic demand.
“By 2030, we want to increase our portfolio by at least 6-7 MMTPA from the current level, reaching at least 22-23 MMTPA.”
— Rakesh Kumar Jain, Director of Finance
Management is investing in infrastructure to optimize feedstock sourcing for its petrochemical operations. Lowering raw material costs through dedicated pipelines is a key strategy for turning around the currently loss-making petrochemical segment.
“We are also working on a C2-C3 pipeline from Vijaypur to Pata and exploring dedicated ethane sourcing to improve profitability.”
— Rakesh Kumar Jain, Director of Finance
Healthcare
Ajanta Pharma | Mid Cap | Healthcare
Ajanta Pharma is a specialty pharmaceutical firm focused on developing and marketing high-quality medicines in India, the United States, and emerging markets. The company maintains a leading position in niche therapeutic segments like cardiology, ophthalmology, and dermatology through a branded generics business model.
[Concall]
The company is expanding its portfolio into gynecology, and early feedback from doctors has been positive. Adding new therapeutic segments provides a fresh pathway for domestic growth beyond its core existing markets.
“The new therapy of Gynecology is taking good shape and is expected to contribute meaningfully to revenue in the coming year.”
— Rajesh Agrawal, Joint Managing Director
The company is rapidly gaining market share in the Indian dermatology segment and climbing up the industry rankings. Outgrowing the broader market highlights the strength of their brands and the effectiveness of their sales force.
“In Dermatology, we have gained two ranks and outperformed the market by nearly 2 times the growth rate.”
— Rajesh Agrawal, Joint Managing Director
Ajanta Pharma plans to be an early entrant in the Indian GLP-1 market, launching its own branded product in March and integrating it into next year’s growth projections.
“For GLP, we will be launching in India under our own trademark and expect to be in the first wave of the product launch in March. We have factored that into the growth plans for next year.”
— Rajesh Agrawal, Joint Managing Director
The GLP-1 market is expected to face intense competition in India with many players, but significantly less in other emerging markets with only 4-6 competitors.
“We believe India will have aggressive competition, perhaps 15 to 20 plus companies. In our other markets, we believe it will not be as aggressive, staying around 4 to 6 companies depending on who gets approval. Competition intensity in emerging markets will not be as high as in India.”
— Rajesh Agrawal, Joint Managing Director
Ajanta Pharma firmly clarified its commitment to remaining solely in the pharmaceutical business, dismissing rumors of diversification into non-pharma sectors.
“Absolutely, we are very clear about this. A clarification was issued that it was by one of the promoter’s family offices, not by Ajanta Pharma. Ajanta Pharma remains only in the pharma business and will continue to do so.”
— Rajesh Agrawal, Joint Managing Director
Consumer Durables
Blue Star Limited | Mid Cap | Consumer Durables
Blue Star Limited is a leading Indian engineering firm specializing in air conditioning, commercial refrigeration, and large-scale electromechanical projects. The company serves diverse sectors including residential, corporate offices, data centers, and industrial facilities across domestic and international markets.
[Concall]
A one-time expense related to new labor regulations significantly reduced the reported net profit for the quarter. This is a non-recurring item and does not reflect the underlying operational strength of the business.
“Pursuant to the notification of the labor codes... the company has recognized an incremental impact of gratuity and leave encashment amounting to 56 crores on an estimated basis.”
— Nikhil Sohoni, Group Chief Financial Officer
Management proactively cleared old stock to prepare for new government energy efficiency standards. This prevented the need for aggressive discounting that would have hurt profit margins.
“We took that decision much earlier to slow down production and move towards the new energy label products... so that we would not be saddled with inventory.”
— B. Thiagarajan, Managing Director
Despite a GST reduction, consumers will likely face a net price increase of approximately 10% due to higher costs from energy label changes, commodity prices, and exchange rate fluctuations.
“GST reduction is available, but the energy label change, commodity prices, and exchange rates will result in an estimated 10% net increase to the consumers.”
— B. Thiagarajan, Managing Director
The company’s current inventory levels are lean, allowing for better cash flow and flexibility. They are prepared to stock up aggressively to meet anticipated high demand during the peak summer months.
“For Blue Star, it [inventory] is lower, likely 5-6 weeks... In March or April, we are even comfortable with 12 weeks of inventory if we expect a strong summer.”
— B. Thiagarajan, Managing Director
Blue Star holds a dominant position in providing cooling infrastructure for high-growth tech sectors like data centers. This leadership provides a strong pipeline of specialized, high-value project work.
“In the EPC part of data centers and semiconductor space, we are already market leaders.”
— B. Thiagarajan, Managing Director
Retail
Kalyan Jewellers India Limited | Mid Cap | Retail
Kalyan Jewellers is a leading Indian jewellery retailer with a significant presence across India and the Middle East. The company operates through a large network of showrooms and an omnichannel e-commerce platform named Candere.
[Concall]
Management is actively adjusting inventory volumes to offset the impact of rising gold prices. This tactical trimming helps maintain efficient stock turnover and prevents capital from being locked in high-cost inventory.
“In our own showroom also, we cannot keep the same volume of jewellery, when the price is going up. We will have to trim the volume not directly to the percentage of the price increase, but to some extent to manage our inventory.”
— Ramesh Kalyanaraman, Executive Director
The company is introducing a new localized brand strategy to target specific regional demographics in India. Investors should watch this pilot as a potential template for deeper market penetration in fragmented regional markets.
“The region brand will be launched in the running quarter. And as I had mentioned previously, it is in one state in India at a go, wherein there will be only the region brand will come only in one state.”
— Ramesh Kalyanaraman, Executive Director
Revenue from consumer saving schemes remains a stable and predictable part of the total sales mix. This consistency provides a steady inflow of advance payments and secures future customer purchase commitments.
“Gold savings scheme usually is in the range of 18% to 20%, which remains the same.”
— Ramesh Kalyanaraman, Executive Director
Consumer preferences are shifting toward lower karatage options to maintain affordability amidst high gold prices. This transition allows the company to offer competitive price points while protecting transaction volumes.
“Customers are accepting 18-karat jewellery as it enables them more choice within their budget. So, two states - three states, which are predominantly 18-karat markets still continue to be strong.”
— Ramesh Kalyanaraman, Executive Director
The company is taking a cautious, wait-and-watch approach toward the lab-grown diamond market rather than rushing in. This indicates management is prioritizing its traditional high-value diamond and gold business for the time being.
“We continue to watch the space very closely. But as of now, we do not have any immediate plans for a lab-grown brand.”
— Ramesh Kalyanaraman, Executive Director
Management is actively working to monetize non-core land assets by the first half of the next fiscal year. Successful sales will inject liquidity into the business and could be used for further debt reduction or growth initiatives.
“We have appointed mediators for finding out interested buyers for real estate, which we are planning to sell. Hopefully, should happen by H1 of the next financial year.”
— Ramesh Kalyanaraman, Executive Director
The company is exploring a shift toward a franchise model in the Middle East, which has traditionally been company-owned. Moving to a capital-light model in international markets could significantly accelerate overseas growth and improve returns.
“We are in active discussions with a few Arab investors for franchise and the interest level from Arab investors for a Kalyan franchise has now developed. If that materializes, then the growth can be much higher.”
— Ramesh Kalyanaraman, Executive Director
International
Accenture plc | International
Accenture plc is a global professional services firm specializing in IT consulting, management consulting, technology transformation, and outsourcing. They leverage AI, cloud computing, and cybersecurity, organized under “Reinvention Services” to help businesses digitize operations. They serve over 40 industries, focusing on customer-centric strategies and digital operations.
[Concall]
Accenture said it delivered a strong quarter with broad-based revenue growth, record bookings, and continued market share gains.
“We delivered another strong quarter with $18 billion of revenue, growing 4% in local currency and once again taking significant market share. We had record bookings of $22.1 billion, bringing H1 bookings to a total of $43 billion.”
— Julie T. Sweet, CEO & Chairman
The company highlighted rising large-deal momentum, with a record number of clients generating more than $100 million in quarterly bookings.
“We had a record 41 clients with quarterly bookings greater than $100 million, bringing us to 74 of these bookings in the first half, 12 more than this time last year, demonstrating the continued demand for reinvention at scale.”
— Julie T. Sweet, CEO & Chairman
Accenture is stepping up acquisitions to expand into higher-growth areas, improve margins, and build more non-FTE revenue streams.
“Our goal with acquisitions is to more rapidly expand into higher growth areas with attractive margins, which will fuel organic growth and increasingly help us grow non-FTE-related revenue.”
— Julie T. Sweet, CEO & Chairman
The company said it is on track to more than double FY26 bookings from key emerging AI and data ecosystem partners versus FY25.
“We are on track in FY ‘26 to more than double our bookings over FY ‘25 from partnerships with our key emerging AI and data ecosystem partners.”
— Julie T. Sweet, CEO & Chairman
Accenture said AI-enabled transformation remains a core investment focus, including new acquisitions in AI-native services and decision intelligence.
“Last week, we closed the acquisition of Faculty, a leading U.K.-based AI native services company with the decision intelligence product business that provides a platform for us to expand into new areas of unmet AI demand with non-FTE revenue.”
— Julie T. Sweet, CEO & Chairman
The company is also investing in AI enablers such as data centers, cybersecurity, energy infrastructure, and data assets.
“AI enablers include data centers, cybersecurity, energy infrastructure and data.”
— Julie T. Sweet, CEO & Chairman
Accenture’s acquisition strategy is increasingly targeting subscription, licensing, and other non-FTE commercial models.
“Ookla, with only 430 employees, generated $231 million of revenue in their calendar year 2025 through non-FTE subscription and licensing revenue models and an 8% year-over-year growth rate and with healthy margins accretive to Accenture.”
— Julie T. Sweet, CEO & Chairman
Accenture said it has already exceeded its AI and data talent goal ahead of schedule.
“We now have over 85,000 AI and data professionals already exceeding our goal of 80,000 professionals by the end of fiscal 2026.”
— Julie T. Sweet, CEO & Chairman
Management said fixed-price work now makes up more than 60% of business, reflecting the growing role of proprietary platforms and demand for delivery certainty.
“Within bookings, the percentage of our work, which is fixed price, continues to increase over 60% in FY ‘25. This reflects the rising importance of our proprietary platforms and clients’ need for cost and delivery certainty, where our scale, experience and financial strength matter.”
— Angie Park, Chief Financial Officer
The company said AI is increasingly central to client transformation programs, often driving related cloud, security, data, and operating model work.
“Clients are implementing foundational programs with our ecosystem partners to capture the full opportunity of AI. These typically involve cloud, security and data modernization, often combined with operating model and talent transformation. We continue to see at least 1 out of every 2 advanced AI projects lead to a data project.”
— Julie T. Sweet, CEO & Chairman
Accenture said more clients are moving from proof of concept to production in AI, while new AI project initiations continue to rise.
“We also are seeing more moving from proof of concept to production, while others are still at the beginning of their journey with another 100 clients or so initiating advanced AI projects with us this quarter.”
— Julie T. Sweet, CEO & Chairman
The company sees AI as a current market share driver and a long-term growth opportunity.
“We see AI as a tailwind because it’s helping us win more today and take market share, and it is creating new opportunities for growth over time.”
— Julie T. Sweet, CEO & Chairman
Accenture framed its role in AI as helping clients decide what to deploy, integrate models into systems, redesign processes, and build the talent to scale adoption.
“Foundation models provide the intelligence, and our role is helping clients understand what to deploy and when, how to integrate it into their systems, reimagine their processes, modernize their data and digital core, help redesign their operating models and do effective change management and help build the capabilities and talent needed to scale across the enterprise.”
— Julie T. Sweet, CEO & Chairman
The company said SaaS work is evolving, with clients now expecting new implementations to be designed for AI from day one.
“Clients are continuing to modernize their tech stacks with SaaS, but they’re now asking that new SaaS implementations be designed from day 1 to use processes that integrate both AI from the SaaS provider and other providers.”
— Julie T. Sweet, CEO & Chairman
Accenture believes AI will unlock a large second wave of work in ERP by embedding intelligence into systems implemented before advanced AI existed.
“When those systems were implemented, advanced AI did not yet exist. Now, those clients want to embed the new AI and data capabilities and transform their end-to-end processes.”
— Julie T. Sweet, CEO & Chairman
Management said Accenture is beginning to see a broader pattern where core modernization is followed by AI-led enhancement.
“We’re beginning to see the same sequence more broadly, modernization of the core followed by AI-driven enhancement.”
— Julie T. Sweet, CEO & Chairman
The company sees AI as a major catalyst for cybersecurity growth and new modernization opportunities, including mainframe transformation.
“We see advanced AI as a catalyst to our cybersecurity business as the threat landscape expands and new tools emerge to protect and attack.”
— Julie T. Sweet, CEO & Chairman
The company identified conversational and agentic commerce as one of the most exciting new AI-led growth opportunities.
“In Accenture Song, LLMs are driving the biggest revolution in retail since the advent of social media.”
— Julie T. Sweet, CEO & Chairman
Accenture said some client software projects are already being delivered materially faster using advanced AI models.
“Those models are accelerating software work across the board, new development to upgrades. And some projects are already seeing delivery move 50% faster.”
— Julie T. Sweet, CEO & Chairman
Accenture called AI potentially the most important technology breakthrough since electricity and said clients will need major transformation to capture its value.
“AI, as it stands right now, may turn out to be the most powerful technology breakthrough since electricity.”
— Julie T. Sweet, CEO & Chairman
Despite conflict in the Middle East, Accenture said it is not currently seeing a meaningful financial impact.
“Currently, we are not seeing any significant financial impact.”
— Angie Park, Chief Financial Officer
Accenture increased its acquisition deployment target for FY26 and said it could invest even more if attractive assets become available.
“We have a strong pipeline of opportunities, and now, expect to invest about $5 billion in acquisitions this fiscal year. But as Julie said, we could do more if the opportunities present themselves.”
— Angie Park, Chief Financial Officer
Management said AI benefits should currently be judged through relative business performance, market share gains, and ecosystem growth rather than one isolated metric.
“At this point in our business, AI is permeating everything we do... like to start with like your first kind of way of looking at is how is our business performing relative to everyone else and are we taking market share, right?”
— Julie T. Sweet, CEO & Chairman
Accenture said better frontier models do not directly translate into bookings immediately, but they expand the set of enterprise use cases the company can pursue.
“When the models come out, there isn’t a direct correlation to bookings or new work, but what it does is create the next opportunity for us to look at what are the solutions that it’s going to now create.”
— Julie T. Sweet, CEO & Chairman
Management said efficiency-led AI use cases still dominate today, though growth-oriented AI programs are starting to increase.
“We are absolutely seeing an uptick in growth-focused AI programs, but efficiency is still leading the way.”
— Julie T. Sweet, CEO & Chairman
Among growth use cases, Accenture sees conversational and agentic commerce as the hottest area of current demand.
“The most exciting area right now on growth is conversational and Agentic commerce. Demand is surging there.”
— Julie T. Sweet, CEO & Chairman
Accenture acknowledged it is paying higher multiples for some acquisitions as it shifts toward higher-growth and higher-margin assets.
“In some cases, we are paying higher multiples than in the past. So the immediate uplift is lower in those instances than prior acquisitions.”
— Angie Park, Chief Financial Officer
Accenture said free cash flow strength is being driven by better operating efficiency and improved collections.
“That is really driven by efficiencies in our operations as well as DSO.”
— Angie Park, Chief Financial Officer
Accenture said large enterprises are generating more $100 million-plus bookings because AI is acting as a catalyst for broad-based reinvention across large technology estates.
“In the large enterprises, it just is a reflection of just how much reinvention they have to do and that AI is the catalyst for that.”
— Julie T. Sweet, CEO & Chairman
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.
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.
We’re now on Reddit!
We love engaging with the perspectives of readers like you. So we asked ourselves - why not make a proper free-for-all forum where people can engage with us and each other? And what’s a better, nerdier place to do that than Reddit?
So, do join us on the subreddit, chat all things markets and finance, tell us what you like about our content and where we can improve! Here’s the link — alternatively, you can search r/marketsbyzerodha on Reddit.
See you there!
Have you checked out Points and Figures?
Points and Figures is our new way of cutting through the noise of corporate slideshows. Instead of drowning in 50-page investor decks, we pull out the charts and data points that actually matter—and explain what they really signal about a company’s growth, margins, risks, or future bets.
Think of it as a visual extension of The Chatter. While The Chatter tracks what management says on earnings calls, Points and Figures digs into what companies are showing investors—and soon, even what they quietly bury in annual reports.
We go through every major investor presentation so you don’t have to, surfacing the sharpest takeaways that reveal not just the story a company wants to tell, but the reality behind it.
You can check it out here.
insightful & informative