The Chatter: Reliance, PayTM, Nykaa & More
Q3FY26 | Edition #54
Welcome to the 54th 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 12 companies across 5 industries.
Financial Services
The New India Assurance Company
Nippon Life India Asset Management
SBI Life Insurance
Max Financial Services
PB Fintech
One 97 Communications (PayTM)
Energy
Reliance Industries
Retail
Dabur India
Jubilant FoodWorks
FSN E-Commerce Ventures
Chemicals
Pidilite Industries
Steel
Tata Steel
Financial Services
The New India Assurance Company Ltd | Large Cap | General Insurance
The New India Assurance Company is India’s largest non-life insurer with a significant global footprint across 24 countries and a century-long legacy. The company maintains leadership in the domestic market through a diversified portfolio including health, motor, fire, and marine insurance.
[Concall]
The company is intentionally walking away from low-margin corporate contracts to prioritize more profitable retail and small business segments. This strategy aims to improve the overall quality of the insurance book and reduce capital consumption.
“Over the past few Quarters, we have taken deliberate steps to recalibrate our portfolio by exiting or restructuring select large corporate accounts where pricing did not adequately compensate for risk or capital consumption. This has been offset by an increased focus on Retail, SME and better quality risk. Our operating philosophy continues to emphasize prudent risk assessment at the policy level, ensuring that growth is aligned with profitability and capital efficiency.”
— Girija Subramanian, Chairman cum Managing Director
Recent underwriting losses were primarily caused by large one-time provisions for employee wage revisions and pension arrears. Despite these heavy costs, the company managed to maintain a slightly higher year-on-year profit after tax.
“The underwriting results were mainly impacted by the provision towards wage arrears and the retirement benefits of active employees where we had provided Rs. 759 crore for Quarter 3 of the Financial Year 2025-2026 and Rs. 1,877 crore for the 9 months ended 31st December 2025. After making provision for tax, our Profit after Tax stood at Rs. 372 crore for the Quarter of this year as compared to Rs. 353 crore for the Quarter of the previous year.”
— Mary Abraham, General Manager of Finance
Management is diversifying beyond the highly competitive motor and health markets by entering niche areas like parametric insurance. This shift is intended to find growth in segments with better pricing power and lower competition.
“We are launching innovative new products with focus on Retail and MSME. We have entered new lines like Parametric Insurance. There is emphasis on growth in segments other than Motor and Health where the competition intensity is high and this further impetus on risk management initiatives.”
— Mary Abraham, General Manager of Finance
Motor insurance growth is slowing because the company is aggressively exiting specific loss-making accounts and risky segments. While this hurts short-term premium growth, it is a necessary step to bring the motor portfolio back to profitability.
“So, the growth on Motor is a little dented because of very strategic and very well-thought-out solutions for these loss-making accounts that we have been suffering from in Motor. So, definitely because of us exiting from many of these segments in Motor, wherever we found the losses exceptionally harsh, growth has come down and this will continue for some time. Maybe we are trying to work with new dealers and new partnerships.”
— Girija Subramanian, Chairman cum Managing Director
An additional provision of up to 800 crore rupees is expected in the fourth quarter once the government notifies the family pension revision. This indicates that the impact of wage-related costs on the bottom line will persist into the next reporting period.
“We will have to provide for this Rs. 700 crore – Rs. 800 crore, around that amount for the FPS in the last Quarter. Because it cannot be done before the notification comes out. Notification is yet to come out. Yeah, that is prospective. That is why it has not been taken into account.”
— Girija Subramanian, Chairman cum Managing Director
To improve health insurance margins, the company is either raising prices on group accounts or walking away from those that are unprofitable. They are also significantly increasing mandatory inspections and fraud monitoring to lower the claims ratio.
“We are either pricing them and negotiating to get closer to the core right price or we are exiting from GMCs that do not give us adequate pricing and going for accounts where pricing is more fair and more adequate. Apart from that, we have increased our anti-fraud activities. Like, we have increased inspections from 30% to 50% compulsorily and we will be increasing it even more in the Quarters to come.”
— Girija Subramanian, Chairman cum Managing Director
The company is exploring parametric insurance, which pays out automatically based on weather events rather than traditional loss assessments. While currently small, this digital-first approach offers a faster, more automated way to settle claims in catastrophe-prone areas.
“Parametric Insurance is a new type of insurance which will take time to pick up in India because it is not exactly on the principles of insurance like wherein there is a threshold fixed for a particular weather-related peril and once the threshold is breached then everything from ground up is paid. So, whether the person suffers from a loss or not, it is paid. So, this involves a lot of active collaboration with FinTech companies, InsureTech companies.”
— Girija Subramanian, Chairman cum Managing Director
Nippon Life India Asset Management Limited | Mid Cap | Asset Management Company
Nippon Life India Asset Management is a leading Indian asset management company offering a diverse portfolio of mutual funds, ETFs, and alternative investment products. It leverages a strong retail distribution network and a strategic partnership with Japan’s Nippon Life Insurance to drive long-term growth.
[Concall]
The company is forming a strategic partnership with European giant DWS Group by divesting a minority stake in its AIF subsidiary. This collaboration is expected to enhance the company’s product capabilities in passive investments and expand its global distribution reach.
“Our Board of Directors at their meeting on November 13, 2025, authorised the Company to enter into a strategic collaboration with DWS Group (a leading European Asset Manager), wherein DWS intends to acquire a minority stake of up to 40% in Nippon Life India AIF Management Limited by subscribing to fresh issuance of equity shares. Further, as part of a wider collaboration, NAM India and DWS will also work closely in other areas including passive investment products and global distribution.”
— Sundeep Sikka, Executive Director & CEO
Management highlighted massive growth in commodity-based ETFs, with assets under management nearly doubling in a single quarter. This surge indicates a strong shift in investor preference toward physical asset-backed digital instruments for hedging and portfolio diversification.
“The Industry continued to witness a surge in Gold & Silver ETF volumes in the quarter. Combined AUM in these 2 ETFs for NIMF was ~INR 688 bn as of Dec 31, 2025, up 54% QoQ. Subsequently, the combined AUM in these 2 ETFs has crossed INR 1 trillion in Jan-2026.”
— Parag Joglekar, Chief Financial Officer
The management noted that equity inflows are becoming increasingly concentrated in specific categories like Flexi Cap due to market volatility. This trend requires the company to pivot its marketing and product focus to capture shifting investor demand within the equity segment.
“So, like it was mentioned in the opening speech, there has been a market volatility which is there in the equity market. And if one has seen the AMFI data, the flows in equities are now narrowing down to certain categories. There is one category called Flexi Cap which is a very large category in the MF industry, which is where there is a lot of investment coming in.”
— Saugata Chatterjee, Chief Business Officer
Management believes the ETF market is a scale game where dominant players capture the majority of liquidity and trading volume. This winner-take-all dynamic benefits the company given its existing large investor base and high trading volumes.
“Unlike mutual fund business, ETF business globally, the top 2-3 players always have the lion’s share. Because I mean unlike a mutual fund where an investor typically likes to diversify in 2-3 different schemes, here the underlying is the same. And typically for us because we have, as we talked about today, more than 56 lakh investors.”
— Sundeep Sikka, Executive Director & CEO
The company is positioning its New Asset Class (SIF) as a high-margin business vertical targeting sophisticated investors rather than a mass-market AUM play. This focus on value-added services over sheer size suggests a strategy aimed at protecting and enhancing overall company yields.
“I believe when we will be discussing 5 or 10 years down the line, SIF will be a separate business vertical, and we will be discussing that in that much detail. We clearly see if you can add value to the investor, the investor will be willing to pay. So, our strategy for SIF will be not AUM but more profitability.”
— Sundeep Sikka, Executive Director & CEO
The CEO expects structural pressure on asset management yields to continue due to regulatory and competitive factors. The company plans to offset this revenue compression by improving operational efficiencies to maintain its profitability margins.
“One needs to be mentally prepared that the yields can come down by 1 or 2 basis points year after year and that is the direction we will keep moving. Whatever the reason, the idea is how do you build up efficiency in the Company to absorb that.”
— Sundeep Sikka, Executive Director & CEO
Management is maintaining a cautious stance on small-cap valuations by continuing to restrict lump sum inflows to protect existing investors. This disciplined approach prioritizes long-term portfolio health over short-term asset growth during periods of perceived market overheating.
“See, the small-cap fund, as you know, it has been almost two years, we have stopped taking lump sum investments. We were very clear that at that point in time, the market was getting more heated, and I think we were right to have arrested more flows in this fund. As we speak, we continue to be in that camp.”
— Saugata Chatterjee, Chief Business Officer
The company argues that high liquidity in their ETF products provides a superior experience through lower tracking errors, giving them a competitive advantage. This liquidity-driven moat allows the company to maintain premium pricing compared to smaller, less liquid competitors.
“But the only thing, generally, when we talk of ETFs, and I’m not sticking to gold or this thing, liquidity helps the investor get a lower impact cost, low tracking error, and these two things put together, if you get it right, it allows you the capability to charge higher. Whether you charge or not is a different thing, but it allows you to charge higher.”
— Sundeep Sikka, Executive Director & CEO
SBI Life Insurance Company Ltd. | Large Cap | Life Insurance
SBI Life Insurance is a leading private life insurer in India, operating as a joint venture between the State Bank of India and BNP Paribas Cardif. The company leverages an extensive bancassurance network and diverse agency channels to provide comprehensive life insurance, pension, and protection products.
[Concall]
There is a massive jump in the total insurance coverage being sold, which shows a shift toward high-value protection products. This is a positive sign for future profitability as these products generally offer better margins than simple savings plans.
“The growth in sum-assured reflects strong consumer confidence and rising awareness of financial protection. Individual and group new business sum-assured increased by 74% and 67% respectively compared to the same period last year, while rider sum-assured has grown significantly now contributing 30% of the individual sum-assured.”
— Amit Jhingran, Managing Director and CEO
Reported profits were weighed down by one-time costs related to new tax rules and labor laws. Underneath these adjustments, the core business is growing much faster than the headline numbers suggest.
“Taking these factors into account, the Company’s profit after tax for the period ended 31 December 2025 stood at INR 16.7 billion, representing a 4% growth over the corresponding period last year. Excluding this impact, the profit after tax for the period ended 31st December 2025 would have been INR 21. 5 billion with a growth of 34%.”
— Amit Jhingran, Managing Director and CEO
The key measure of new business profitability is rising despite the headwind of new taxes on commissions. Management is successfully using a better mix of products to keep margins within their target range.
“Value of new business stood at INR 50.4 billion, reflecting 17% growth with a margin of 27.2% for the period ended 31st December 2025, up from 26.9% in nine-month FY25 driven by both volume growth and favorable shift in product mix. The margin is reported after accounting for the impact of GST. Excluding this impact, the VONB margin would have stood at 28.3% with a gain of 140 bps.”
— Amit Jhingran, Managing Director and CEO
Growth in guaranteed savings products was slightly slower because the sales team focused on a popular new money-back plan. However, the high growth in protection products is helping to balance out the overall business performance.
“So, product mix, as far as you were talking about non-par growth, so I would like to highlight that on IRP basis, the growth in pure non-par products, excluding protection, is 10%. Protection has grown by 44%. The numbers of non-par could have been better, but during the quarter, we launched our participating product, Moneyback, and a lot of our distributors got diverted to that new product, and it showed very strong growth.”
— Amit Jhingran, Managing Director and CEO
The primary sales channel through SBI branches is showing improved momentum after some earlier concerns. This supports the company’s full-year growth target of 13% to 14%.
“Within the channel mix, different channels have their seasonality and third quarter specifically has always been very good for SBI Life. There is some good traction being seen in the SBI also of late and we are very sure that in the 4th Quarter also, we will be able to maintain our overall growth number as per our guidance of 13 %-14% and within that, all the channels are performing as per our expectations.”
— Amit Jhingran, Managing Director and CEO
A drop in long-term policy renewals was expected because of the specific group of policies sold during the pandemic. Management believes this is the final wave of this trend and that renewal rates will soon stabilize.
“Only the 61st month persistency which has come down, which previously also we have communicated that this is the COVID cohort, which is going to hit this year. This is going to be the last cohort, which we are expecting. 25 th month and the 37th month, it is just a marginal, which we are very hopeful that it will cover up in the current quarter itself.”
— Amit Jhingran, Managing Director and CEO
The company expects to neutralize most of the negative margin impact from new tax regulations by selling more profitable insurance types. This means the final impact on the bottom line for the year will be very minor.
“And what we are saying that the impact that we are going to get on the new business on account of GST, 150 basis points will get offset mostly by the better product mix in terms of the line of business and within the product and different kind of products. And that will mostly offset and balance remain will be approximately 30-40 basis points at the end of this year.”
— Prithesh Chaubey, President and Appointed Actuary
Customers are increasingly choosing pure insurance over plans that return their premiums, which results in more insurance coverage for less customer money. While this lowers the average premium per policy, it is generally better for the company’s long-term underwriting risk profile.
“For the same sum assured, TROP has a higher premium than pure protection. Here our mix is improving in favor of pure protection. So, the premium is going down for the same sum assured.”
— Amit Jhingran, Managing Director and CEO
New savings products offering 30-year guaranteed returns are seeing strong demand from customers seeking long-term certainty. These long-duration products help lock in customer relationships for decades, providing a steady stream of future income.
“So, in the product that we launched in non-par segment we see very good traction in the market. And there are 2-3 reasons for it, because it gives more flexibility and also giving the longer-term guarantee. So, we introduced 30 years kind of guarantee as well.”
— Amit Jhingran, Managing Director and CEO
Max Financial Services Limited | Large Cap | Life Insurance
Max Financial Services is the primary holding company for Max Life Insurance, one of India’s leading private life insurance providers. The company focuses on long-term savings, protection, and retirement solutions through a multi-channel distribution network.
[Concall]
The Insurance Act has been amended to allow the merger of insurance companies with non-insurance entities. This change clears the path for the company to consolidate its structure by merging Axis Max Life directly into Max Financial Services.
“Section 35 was amended to permit the merger of an insurer with a non-insurer subject to IRDAI approval. This is a positive development for Axis Max Life. Accordingly, we have received in-principle approval from our Board to initiate the process for the proposed amalgamation of Axis Max Life and MFSL.”
— Sumit Madan, Managing Director and CEO
The company is growing much faster than the rest of the insurance industry, particularly in individual premium sales. This outperformance has allowed them to capture more market share, now nearing double digits in the private sector.
“Continuing our strong trajectory, individual adjusted first year premium grew by 20% in 9 months FY ‘26, led by 18% growth in the number of policies. Our sales growth is twice the overall industry growth of 10%, translating into a private market share expansion of 53 basis points, taking our share now to 9.8%.”
— Sumit Madan, Managing Director and CEO
Management is seeing strong business momentum carry over into the fourth quarter with high double-digit growth in January. This suggests that the core partnership with Axis Bank remains a powerful driver for new sales.
“Before we move ahead, happy to note that our growth trajectory continues in the month of January as well. Our sales grew by 29% at a company level with proprietary and partnership channels growing at equal growth rate with a very significant contribution coming from a leading bank partner, Axis Bank.”
— Sumit Madan, Managing Director and CEO
Protection sales, which are high-margin products, saw a massive jump of nearly 100% during the quarter. This shift toward protection and credit-linked insurance is a positive sign for future profitability and risk management.
“Retail protection grew by 99% in Q3 with pure protection growing by 95% and riders by over 100%. In addition, our group credit protection business continued to scale steadily, recording 45% growth in Q3 ahead of the industry average, reflecting increasing penetration and a very strong partner engagement.”
— Sumit Madan, Managing Director and CEO
The company has finished renegotiating terms with its distributors to help cover the rising costs from tax changes. They are now focusing on redesigning specific insurance products to improve profit margins further.
“We have, to a fairly large extent, actually executed some of those things. And on the categories which are more critical and important in our assessment, that has largely, it is kind of achieved and done. Beyond this, I think the recovery and recouping would be more the product structure changes, management and navigation of product variants within the product per se to mitigate the impact that kind of came across.”
— Amrit Singh, Chief Financial Officer, Max Life Insurance
To prevent mis-selling in bank branches, the company has implemented automated checks to ensure customers actually need and understand the products they buy. This focus on quality should lead to better customer retention and fewer regulatory complaints.
“Using a lot of analytics and checks in our journeys, what we had and this is largely implemented in all our large bank relationships, that each and every sale that is done, it is assessed for its suitability. And also, there is a very smart verification process to independently assess whether the quality of sale is adequate and understood by the customer.”
— Amrit Singh, Chief Financial Officer, Max Life Insurance
The company remains committed to selling non-participating savings products because they offer guaranteed returns that customers value. They plan to keep innovating in this category to ensure they aren’t relying too heavily on any single type of insurance.
“But if you step out from quarterly introductions, etcetera, I think a non-participating design with the long-term guarantee proposition that it offers is a very important product, which the consumers can have as part of their asset allocation decisions. We will keep the overall product mix balance and you will keep seeing from our products teams innovations coming in this specific area.”
— Amrit Singh, Chief Financial Officer, Max Life Insurance
Management notes a consistent daily improvement in the demand for protection plans over the last few months. This trend indicates that the high growth in protection is a sustained shift in consumer behavior rather than a one-time event.
“I think on protection specifically, we have been observing the numbers since 22nd of September. And on a daily basis, we have seen our traction improving as far as protection is concerned. When we were looking at the numbers, other than the exception of Diwali, 1 day prior to Diwali and 1-day post-Diwali, we have seen some very healthy growth as far as protection numbers are concerned.”
— Sumit Madan, Managing Director and CEO
The planned merger between the holding company and the insurance subsidiary is expected to take about a year to 14 months once the application is filed. Investors should watch for the official regulatory guidelines as the next major milestone for this corporate restructuring.
“Obviously, there will be a regulatory framework which needs to get created. We await guidance and clarity and direction from the regulator on that aspect. As in once that is closed, from the date of filing of the scheme, we do not expect it to be more than 12 to 14 months kind of a time frame.”
— Amrit Singh, Chief Financial Officer, Max Life Insurance
Max Life has successfully established itself within its newest bank partnerships, capturing at least a quarter of the insurance business in those locations. This diversification reduces the company’s dependence on its primary bank partner, Axis Bank.
“The new banks, like I mentioned, across 7 banks, that we have acquired recently in all the 7 banks, we have a counter share of more than 25%. In 3 of those 7 banks, we have already become the number 1 player as far as counter share is concerned.”
— Sumit Madan, Managing Director and CEO
Management admits that new rules allowing customers to get more money back if they cancel their policy early are putting pressure on policy retention. This is a risk to long-term profitability as it may lead to more customers dropping their plans in the first year.
“On persistency, what I indicated was, yes, there is some pressure because of 13 months. There are certain specific designs where we are experiencing that pressure. And post post-surrender revision, as you are aware, that there was a surrender value which was accruing immediately. So some of that element also creates some bit of a pressure.”
— Amrit Singh, Chief Financial Officer, Max Life Insurance
PB Fintech Limited | Large Cap | Financial Services - Fintech
PB Fintech Limited is India’s leading online platform for insurance and lending products, operating the well-known brands Policybazaar and Paisabazaar. The company leverages technology and data to simplify financial decision-making for consumers while providing efficient distribution for insurance and banking partners.
[Concall]
Management notes that consumer trust is increasingly tied to the platform’s ability to assist during the claims process. This focus on post-purchase service is driving superior growth and customer retention in the Indian market.
“As I start, a very clear thing which is becoming crystal clear to almost everyone and specifically to us, is that people will buy insurance from the person who can help them at the point of claims. This is becoming super clear, and specifically in the Indian market. I think Policybazaar, with the efforts that it has put over the last 3-4 years, is clearly outstanding in that space, and that is leading to a huge amount of positive PR.”
— Yashish Dahiya, Chairman & Group CEO
Management expects all new business initiatives to achieve profitability or break-even starting from the current period. This shift reflects the operational maturity of the group’s expansion projects and strengthens the overall consolidated bottom line.
“As I see the new initiatives part of our business, I think here onwards, we should be break-even or profitable. So, I think, as you look at the P&L overall, what’s starting to happen is, of course, Policybazaar is doing what it’s doing and Paisabazaar, here onwards, is profitable, and New initiatives here on are going to be at break-even or profitable. So, overall, from a profit perspective, we seem to have very sound ground.”
— Yashish Dahiya, Chairman & Group CEO
The company is actively exploring international acquisitions to leverage its technological edge in large, mature markets. This strategy aims to replicate domestic success in regions where insurance distribution remains traditional and lacks digital innovation.
“We have spent the last 3-4 years looking across markets, Middle East, Southeast Asia, European markets. As you would appreciate, when we look at these, we look at size of market, and we look at our ability to transform that market. This has two components: what is that we have done in India and how does it apply in that market, and how could we bring that to bear?”
— Yashish Dahiya, Chairman & Group CEO
The current regulatory framework allows flexibility for companies to choose their distribution models within overall expense limits. Management believes its efficient digital-first approach provides a competitive advantage under these industry-wide cost caps.
“And I think this is a great framework, and I’ll explain why. Because there are different companies at different stages. Some company wants to put money in its own marketing, its own call center, its own employees, and get sales. Perfectly fine. You can do that within 30% or 35%, please go ahead and do it. Some companies would pay somebody on a variable basis, the same amount.”
— Yashish Dahiya, Chairman & Group CEO
Management remains open to lower take rates as long as the cost savings are passed on to the end consumer. They argue that high-quality business and scale allow them to maintain healthy margins even if industry commissions are compressed.
“You’ve now got the last 10-12 quarters of recordings and every time I’ve said I would always welcome reduction in take rates as long as the benefit does get passed on to the consumer. Sarbvir, if you have anything specific to add on that.”
— Yashish Dahiya, Chairman & Group CEO
International markets like the US and Europe offer significant profit potential but lack the digital distribution innovation seen in India. The company intends to export its advanced technology stack to these larger markets to drive global expansion.
“If you look at certain markets. The US is, I think, 50 times bigger than the Indian market; Europe is 15 times bigger than the Indian market; and genuinely, we have been observing, like, I have been particularly observing. They are very profit-rich markets, but they have almost zero innovation. Almost zero. And, of course, they are crying for innovation. So, I do think we will add a lot of value.”
— Yashish Dahiya, Chairman & Group CEO
Building a sustainable risk business requires long-term investment in disclosure capture and claims management rather than just paying higher commissions. This high-barrier-to-entry strategy creates a virtuous cycle of customer trust and recurring renewal income.
“-Risk products have to be sold on the basis of disclosure, and the fact that, in general insurance especially, that you are able to produce or help a person at the time of claim, because that’s the only way that that person will renew the policy again, will stay with you, etc, etc. I think the point that comes through, in risk products, is that it takes a while to build capability. One is in sourcing. One is to attract customers, which you see, Policybazaar has spent 18 years of solid advertising, talking about why you should buy health insurance and term insurance.”
— Sarbvir Singh, Joint Group CEO
The introduction of Managing General Agents (MGAs) could revolutionize the sector by allowing distributors to manage underwriting and claims. This regulatory shift would empower platforms to offer more tailored products and improve the consumer experience.
“Now, on an MGA side, I believe, MGA is the single most transformational move that can happen in the Insurance industry. And I believe that at not just a Policybazaar level, but at a strategic level. And why do I say that? See, when the distributor, who’s in touch with the consumer, who understands the consumer, at that point, becomes responsible for both the underwriting and the claim settlement, and at a wholesale level, is working with the insurance company.”
— Yashish Dahiya, Chairman & Group CEO
One 97 Communications (PayTM) Limited | Mid Cap | Financial Technology
One 97 Communications, known as Paytm, is a leading Indian digital ecosystem offering comprehensive payment services and financial products to consumers and merchants. The company specializes in device-led merchant subscriptions and the distribution of loans, insurance, and wealth management solutions.
[Concall]
The company is shifting its consumer growth strategy away from aggressive cash burning and toward high-quality product innovation. Investors should view this as a commitment to more sustainable unit economics and organic market share gains.
“It’s been a year plus since we had decided that we’ll head down and execute on our core business principle, core business, which is payment and financial services. And we continue to dominate the merchant ecosystem. And now we have started to build for consumers, and like I had promised earlier, we won’t throw money on consumers, rather we will throw technology and products on consumers.”
— Vijay Shekhar Sharma, Founder and CEO
Management is clarifying that their financial model does not rely on government subsidies like the Payment Development Fund for profitability. This reduces the risk profile for investors regarding regulatory or subsidy-related income fluctuations.
“Does the industry need PIDF? Well, as an industry, we are welcoming every initiative that the government or any other entities look to give us. But at the same point of time, our business model is not based on this. That’s the key word. We are not sitting here to take grants as our profit and revenue. That’s it.”
— Vijay Shekhar Sharma, Founder and CEO
The company expects to quickly recover lost subsidy income by raising merchant fees and improving sales efficiency. This shows management’s confidence in their pricing power and the essential nature of their hardware devices.
“Our expectation is that obviously the work started immediately and we were ready to recalibrate what we have said, higher subscription revenues and more targeted sales efforts. Our expectation is at least 30 - 40 percent of this will be offset this quarter and more over time. The work, like I said, is starting immediately.”
— Madhur Deora, President and Group CFO
The relaunch of the ‘Buy Now, Pay Later’ product is showing much faster adoption rates than previous iterations. Early traction in this high-margin vertical suggests a potential re-acceleration of consumer credit revenues.
“Wait and see the numbers that Vijay mentioned. It’s been three months since launch. We have crossed one lakh customers. And within six months of launch, we expect to cross hundred crores of disbursal. So that’s the early trajectory. Of course, it’s much faster than the first time we launched Postpaid.”
— Madhur Deora, President and Group CFO
The company is actively pruning low-value business lines to focus strictly on products that strengthen its competitive moat. This disciplined capital allocation is intended to improve long-term return on investment for shareholders.
“And we don’t think that, ok, let’s just do this business. For example, like we used to distribute credit cards and we just stopped that business. Because I was like, it does not add to anything. Just because you have traffic, you can try doing it, is not a business model. Let’s say that is what we do, which grows your moat and protects and expands the moat instead of just because you are.”
— Vijay Shekhar Sharma, Founder and CEO
Continuous cost optimization is being used to fund future growth initiatives rather than just cutting expenses. Investors should see this as an attempt to improve operating leverage while maintaining innovation.
“And the good thing is that I’m removing the deadwood continuously. That project will continue. So there you see relocation happening within the cost. It is not that we are not investing in the future. We are rather investing in the future and removing what we don’t want to carry forward. That’s what it is.”
— Vijay Shekhar Sharma, Founder and CEO
Net payment processing margins are structural and consistently trending above previous guidance levels. This indicates that the core payments business is becoming more profitable as the merchant mix evolves.
“Exceeding that [4 basis points] consistently. Some of the instrument mix is helping. Last quarter there was a lot of question whether this was EMI driven or festive driven. That’s always a part of it, but it is not the major driver. We’re not guiding to higher numbers right now.”
— Madhur Deora, President and Group CFO
Paytm has moved away from free QR codes to focus entirely on monetizable device-carrying merchants. By targeting competitors’ hardware, they are prioritizing high-value, fee-paying users over simple transaction volume.
“QR only merchants are negligible. I mean, my sales team does not even deploy QR merchants. Internal funnel for device deployment is, churn the other competition’s device. It is not QR. We used to do it. And we used to deploy QR and upgrade them to Soundbox. Now we’re like, okay, the bad device is out there. Let’s churn them into us.”
— Vijay Shekhar Sharma, Founder and CEO
The company is focusing on high-quality merchant loans where they have proprietary transaction data rather than simple broad-market loan distribution. This strategy is designed to ensure better asset quality and lower defaults for their lending partners.
“So it may look flat, but internally very important to build a mode of payment led credit instead of just distribution of credit, which is traffic led. Okay. Now, this being the personal loan. Merchant loans are consistently growing. There is a great understanding by the industry - creditors or merchants, both sides that you do good. You get good credit.”
— Vijay Shekhar Sharma, Founder and CEO
Management sees significant headroom to grow loan penetration within its existing merchant base from 7% to potentially 20%. This internal growth runway offers a path to higher margins without requiring massive new customer acquisition costs.
“This number could get as high as 20%. Our whitelist base is 40 to 50%, typically. So, and I’m assuming that the whitelist based on everyone will need a loan, even once a year. But just to be clear, when we think about the business, we don’t think about primarily, can we drive penetration higher? We think about product market fit.”
— Madhur Deora, President and Group CFO
Paytm is building its own AI models and agents to drive internal efficiencies and create new commercial use-cases. This technical leadership is intended to maintain their competitive advantage against global and local fintech rivals.
“Guys, you are underestimating the power of ability of companies that will not only leverage AI by asking their vendor to deploy, but they will create the use-cases and they will create the use-cases for optimizing cost or expanding the business line items. And I’m phenomenally very happy to say this. This goes especially to the team that did it. And with that intention that we will keep not just playing along, but we will lead the race of AI in the country.”
— Vijay Shekhar Sharma, Founder and CEO
Energy
Reliance Industries Limited | Large Cap | Oil Gas & Consumable Fuels
Reliance Industries is a diversified Indian conglomerate with market-leading positions across energy, petrochemicals, retail, and digital services. The company is currently transitioning towards a green energy future through massive investments in an integrated new energy ecosystem.
[Concall]
The company received a credit rating upgrade because its earnings are now coming more from stable consumer businesses than cyclical energy markets. This change will allow Reliance to borrow money at lower interest rates from a wider pool of global investors.
“And just an update, you may have seen that S&P changed our rating from BBB Plus to A Minus, which is really two notches above. They have focused on the fact that higher portion of our earnings are coming from less cyclical businesses, especially the consumer side. And of course, as a company, we will benefit because there are pools of capital which lend only to A-rated consumers, A-rated companies, and liquidity improves, credit spreads come down.”
— V. Srikanth, CFO, Reliance Industries Limited
Jio has built its entire mobile and fixed wireless network technology internally rather than buying it from global vendors. Controlling the full technology stack allows the company to operate with higher efficiency and lower costs at a global scale.
“Today, our whole core of 4G and 5.G run on our own stack, developed in-house. We have, of course, spoken about the fixed wireless solutions technology that we have deployed in India, which is working very well, which has made us the world’s largest fixed wireless operator already, which is, again, developed completely in-house. It is a completely Jio solution, both the software side, the software stack, as well as hardware, and that is working quite well.”
— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited
The retail division is seeing explosive growth in its quick commerce business, reaching a run rate of 1.6 million daily orders. This rapid expansion positions Reliance as a dominant player in the high-frequency grocery and delivery market.
“Hyperlocal commerce, we are scaling up pretty rapidly. We are almost at; we ended the quarter at 1.6 million. On a quarter-on-quarter basis, the growth was 53% in terms of number of orders on a Y-O-Y basis, 360%. So, we are scaling up this business very, very quickly.”
— Dinesh Taluja, CFO & Corporate Development, Reliance Retail
The FMCG business is planning to double its production capacity for drinks within a single year by setting up several new food parks. This aggressive infrastructure build-up shows management’s commitment to capturing a massive share of the consumer goods market.
“We continue our expansion. We will be more than doubling our capacity on beverages this year. We have high-speed lines across 12 states during the year. We also have started working on our food parks. We have been allocated land across states in multiple states.”
— Ketan Mody, Executive Director, Reliance Consumer Products
Reliance has shifted most of its chemical production to use ethane as a raw material instead of the more expensive naphtha. This strategic move protects the company’s profit margins even when global petrochemical prices are under pressure.
“If you see the blue bars are the ethane cash margins on naphtha feed and whereas the green margins or green bars are the cash margins from the ethane feed. And over last 10 years while the blue bars have come down very sharply from 644 to barely anything in last four years... However, if you see the green bars and these are U.S. ethane price-based numbers landed in Asia, they have remained pretty robust. And our portfolio today, roughly three-fourth of our portfolio is based on these green bars, which has meant that we have been relatively very minorly impacted compared to our competitors.”
— Amit Chaturvedi, President – Petrochemicals, Reliance Industries Limited
The company is building massive solar component factories that are among the largest in the world outside of China. These plants will secure the company’s supply chain and provide a significant competitive edge in the global shift to renewable energy.
“Polysilicon is probably one of the third, one of the three large polysilicon facilities outside China and glass, again, one of the largest glass plants outside China are the world class for the solar cell and solar modules. During this current year, we will again commission these facilities, fully ramped up to the capacity of 10-gigawatt peak and further expanding it as we progress on 20-gigawatt peak and on capacity.”
— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited
Management believes their solar manufacturing project is being built at a fraction of the cost required in Western countries. This cost advantage combined with massive local scale makes their green energy business difficult for global competitors to replicate.
“I can probably say with much more confidence that I do not think anyone else can build this. Definitely, if the same facilities have to be built in US or Europe, you would be talking about at least five to six times more cost. But even delivery in those geographies with the kind of labour, which is required at the peak, we had some 20,000 workers working to deliver this, is going to be nearly impossible.”
— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited
Management confirmed that the public listing of Jio is now imminent and expected within the next few months. This highly anticipated IPO will likely unlock significant value for existing shareholders as the digital business matures.
“First one, the Jio IPO, internally we are working on it of course, we are awaiting the new notification to come from the government to see what the final details are going to be. We are working on the assumption that it is in line with whatever SEBI has recommended, but we will still have to wait for that before we finalize and then start the process, but it is imminent now, so we are just awaiting the final notification, so it should happen in the next few months for sure.”
— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited
Jio aims to grow its revenue per user by 5% to 6% annually through organic shifts in customer behavior rather than just price hikes. The superior quality of their 5G network is the primary driver attracting high-value customers who use more data.
“Organically, if we can improve our ARPU by 5% to 6% a year, I think that is a good number, good place to be in, while adding many more customers. The short answer to the second question really the quality of the network, the standalone architecture, which is providing us opportunities to give more, and we have not even launched some of these slice services which also are on the roadmap and will be launched.”
— Anshuman Thakur, Head of Strategy, Reliance Jio Infocomm Limited
Reliance’s quick commerce division is already making a profit on individual orders, unlike many competitors who are still losing money. By using their existing physical stores as delivery hubs, they can expand into delivering clothes and gadgets with very low extra costs.
“The only thing I would say is on a contribution margin level, we are positive. We are pretty uniquely positioned in the way that we are able to leverage our existing network of 2500, 3000 stores to do quick commerce and remember quick commerce is not just grocery it is also we are doing that in electronics, we are doing that in fashion as well.”
— Dinesh Taluja, CFO & Corporate Development, Reliance Retail
The cost of electricity is the biggest expense in making solar components, which is why Reliance is building its own renewable power plants. This integrated approach allows them to manufacture solar panels cheaper than those who must buy power from the grid.
“One of the key components of the cost through the value chain is also the power cost and that is where our ability to move to round the clock green energy and further optimize in the power cost gives us an additional leverage and the benefit through the value chain. I would not necessarily be able to quantify at this point of time, but I can tell you that in a polysilicon production the single most variable is the power cost.”
— Karan Suri, Senior Vice President - New Energy, Reliance Industries Limited
Reliance may not keep all its massive green energy generation assets on its own balance sheet, potentially moving them into separate utility-style structures. This financial strategy allows the company to fund massive growth without taking on too much direct debt.
“What we take for inhouse consumption, what we give for green chemicals absolutely, so the energy supplied will still be in some way utility, so you can look at those kind of power generation assets in a very different way. It need not be that it has to be entirely on our balance sheet, so all that flexibility to take care of in the broader construct of what we are trying to solve and I am being very, very similar to what I have been answering this question right from day zero and this remains unchanged.”
— V. Srikanth, CFO, Reliance Industries Limited
Retail
Dabur India Limited | Large Cap | Personal Care
Dabur India is one of the world’s largest Ayurvedic and natural health care companies, maintaining a diverse portfolio across health supplements, oral care, and beverages. It operates with a massive distribution network in both urban and rural India while expanding its presence in international markets.
[Concall]
Management observed that consumer demand began to pick up after the initial disruption caused by tax changes. The continued strength in rural areas is a positive sign for the company’s broad reach and volume stability.
“Demand trends in India witnessed a gradual recovery following the GST rate cuts. While the month of October experienced transient headwinds due to GST transition, demand improved over the rest of the quarter. Rural markets continue to outperform urban markets, consistent with recent quarters.”
— Mohit Malhotra, Chief Executive Officer
Consumers are moving quickly toward herbal and natural products in the toothpaste market. Dabur’s focus on these segments is allowing it to take market share from traditional, non-herbal competitors.
“The Herbal segment grew 530 basis points ahead of non-herbal segment, highlighting a strong and sustained consumer shift towards the natural and herbal oral care products. Capitalizing on this trend, our portfolio outperformed overall category growth, driving gains in market shares.”
— Mohit Malhotra, Chief Executive Officer
High-end juice and health-focused beverage products are growing significantly faster than basic offerings. This shift toward premium products is likely to support better profit margins in the food and beverage division.
“In Juices and Nectars, the premium portfolio, comprising ‘Real Activ’ 100% juices and coconut water, continued to scale up, delivering a robust growth of 38% and 52%, respectively. The Nectar portfolio remained muted on account of an unfavorable season.”
— Mohit Malhotra, Chief Executive Officer
A massive spike in coconut oil costs forced the company to raise prices significantly to protect its profits. Investors should note that recent high growth in this segment is driven by higher prices rather than selling more units.
“In coconut oils, there has been a huge inflation of roughly around 100% odd. ... So, all companies have taken price increases in coconut. So, if you look at the growth, growths are essentially price-driven growths, which I think is one-off till the time we lap over the base of the cost increases in coconut.”
— Mohit Malhotra, Chief Executive Officer
Rivalry in the toothpaste market remains intense, particularly in large supermarkets and online platforms. While the pressure eased slightly recently, management is cautious about whether this competition will stay low.
“So, I think competitive intensity in oral care has been inching up, especially in the modern trade side, with the main market leader being very aggressive on the modern trade. And of late, a bit of abatement was seen in the previous quarter, but not so much so that I can say that it is going to be sustained.”
— Mohit Malhotra, Chief Executive Officer
Dabur is successfully modernizing its health supplements by introducing new flavors and sugar-free options. These new versions are growing much faster than the original products and helping reach more health-conscious buyers.
“Gur has done exceedingly well for us. Ratnaprash has done well for us. So, all the newer variants that we have added in Chyawanprash have done. Sugar-free is doing exceedingly well. We have almost doubled our distribution in sugar-free also.”
— Mohit Malhotra, Chief Executive Officer
Management is optimistic that the worst of the demand slowdown and inflation is over. They expect a steady increase in sales performance as consumer spending power recovers in the coming months.
“And gradually, slowly, there will be only improvement on account of the sentiment improving. Consumer confidence levels are improving. Even the CPI inflation has reined in. So, I think the subsequent quarters are going to be better, because the 1st quarter was hit by season, 2nd Quarter was hit by GST, 3rd Quarter has been significantly better, and the 4th Quarter would even be better.”
— Mohit Malhotra, Chief Executive Officer
The company expects future growth to come from selling more items rather than just raising prices. While this is healthier for long-term market share, it requires more effort in marketing and distribution to achieve.
“The next year growth is going to be more volume-driven growth and not so much price-driven or value-driven growth. So, that is a little remark. And volume-driven growth is a little harder to get as compared to a combination of a value and a volume.”
— Mohit Malhotra, Chief Executive Officer
As raw material costs fall, the company intends to spend most of those savings on more advertising to drive growth. They only plan to keep a small portion of these savings to boost their final profit margins.
“And whatever upside in gross margins we will get, a significant portion of that we may want to reinvest in advertising and balance around 20%- 25% of that expansion in gross margin we will give back as operating margin expansion.”
— Ankush Jain, Chief Financial Officer
The company is cleaning up its portfolio by removing slow-selling items and focusing on successful new products. This strategy of narrowing their focus to high-growth categories like health juices should improve operational efficiency.
“We have rationalized a lot of tail products which were there. That has been rationalized. That said, a couple of NPDs are really doing very well for us. One is health juices that we had launched. Health juices are giving a growth of around 17% to 18% for us.”
— Mohit Malhotra, Chief Executive Officer
Jubilant FoodWorks Limited | Large Cap | Restaurants
Jubilant FoodWorks Limited is India’s largest food service company, holding the master franchise rights for Domino’s Pizza, Popeyes, and Dunkin’ Donuts. The company operates an extensive network of over 3,500 stores across India, Turkey, Sri Lanka, and Bangladesh, supported by a specialized supply chain and technology infrastructure.
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The Turkey business has reached a self-sustaining stage where it can now service its own acquisition debt through internal cash flows. This removes a major financial burden from the Indian entity and validates the company’s international expansion strategy.
“Turkey business continued to give positive results. It gives us immense pleasure to share with you that along with strong revenue growth and PAT, the business is generating steady cash flows and over the last couple of quarters have been paying dividends to service JFL’s acquisition-debt obligations. Our international business in Sri Lanka and Bangladesh also reported impressive top line growth and improvement in bottom line.”
— Hari S. Bhartia, Co-Chairman & Director
Management is successfully using premium product innovations to drive sales growth while simultaneously improving unit economics. These margin-accretive launches help offset inflationary pressures in raw material costs like dairy and flour.
“Our recent new product launches, including Sourdough Pizza and Cheese Lava Pull Apart, have seen an overwhelming response and have scaled rapidly in a short period. Also, these products are accretive to gross margin. India revenues stood at Rs. 18 billion, growing at 11.8% Y-o-Y.”
— Sameer Khetarpal, CEO & MD
The company is staying price-competitive by matching the aggressive entry-level pricing strategies of major delivery aggregators. This move protects the customer base in a price-sensitive market, even if it requires short-term tactical adjustments.
“So I do agree that in the last quarter or so, aggregators have brought down their minimum order value to Rs. 99. And in some places, we had to go back and correct and match that to not lose market share. So, we’ve done that.”
— Sameer Khetarpal, CEO & MD
Management is leveraging artificial intelligence to freeze corporate headcount growth and optimize administrative costs. This digital transformation is starting to show up as operating leverage, allowing revenue to grow faster than expenses.
“Also we’ve been very disciplined in head count increase. We’ve also deployed technology and AI, we’re beginning to use to drive efficiencies in our corporate G&A, and that has given the leverage. And I think we’ve been super disciplined in the last 2 years in where to deploy the technology.”
— Sameer Khetarpal, CEO & MD
The use of data-driven AI tools for store location selection is reducing the risk of opening underperforming outlets. Improving productivity at mature stores suggests that the brand remains healthy even as the network becomes more dense.
“Our site selection is totally AI-enabled now and we have a list of 1,000 stores. So I do see that the brand is very strong. Our mature store ADS has been the highest ever in the last quarter.”
— Sameer Khetarpal, CEO & MD
Jubilant is successfully shifting its customer base toward its own digital platforms rather than relying on third-party aggregators or walk-in traffic. Controlling the customer data and the delivery experience is a critical competitive advantage for sustaining long-term loyalty.
“Post-COVID and more recently, because all the investments are in 20-minute delivery, free delivery, the largest new customer acquisition channel actually is our own app and dine-in or takeaway is lesser. So therefore, both in terms of absolute and percentage growth, our own asset is the largest and the fastest-growing channel, so which augurs well for us.”
— Sameer Khetarpal, CEO & MD
The company is beginning to explore ad monetization on its app, targeting 1% of revenue from this high-margin stream. This represents a new, high-ROI revenue vertical that leverages the company’s massive digital traffic.
“At least my own take is at the right time, I’m not saying it short-term, we should get about 1% of our revenues on that channel. We should be able to monetize to that extent. Having said that, we have taken a conscious call to not monetize preorder or the preorder journey.”
— Sameer Khetarpal, CEO & MD
The company is shrinking the physical size of its stores to align with the dominant trend toward home delivery. Smaller store formats will reduce rental overheads and improve the overall profitability of the store network.
“Our per square footage of our stores is on a downward trend. Again, like you likely said, if you’re hitting a 75% delivery mix now as a business, it could vary between the tiers of cities we operate in. Overall, the square footage of our stores is coming down, which will again be an additional flip to our rental, right, going forward.”
— Suman Hegde, Chief Financial Officer
Management expects the margin dilution from newer brands like Popeyes to decrease by 50% in the near term. As these emerging brands reach scale and break even, it will provide a significant boost to consolidated company margins.
“And the reduction of the drag on the EBUs, at the point in time that we had disclosed our numbers, the drag was of Popeyes, Dunkin and Hong’s was approximately about 230 bps, 250 bps. And we should see that halving in that journey to getting to the overall margins up.”
— Suman Hegde, Chief Financial Officer
Management has decided against a single ‘super-app’ strategy, choosing instead to maintain distinct digital identities for its brands. This approach allows for more targeted marketing and preserves the unique customer experience for different food categories.
“So at least my past experience and knowledge suggest that this is not a good investment of technology. The two brands are different. Occasions are different. We’ve launched Popeyes’ own app.”
— Sameer Khetarpal, CEO & MD
FSN E-Commerce Ventures Limited | Large Cap | Specialty Retail
Nykaa is a leading Indian digital-native platform specializing in the retail of beauty, personal care, and fashion products through an omnichannel approach. The company operates multiple online platforms and physical store formats while also managing a growing portfolio of owned consumer brands.
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The fashion vertical is showing significant improvement in profitability and is nearing an EBITDA break-even point. Investors should view this as a reduction in the cash burn traditionally associated with the company’s newer business segments.
“And from an EBITDA margin perspective, happy to say that this quarter, the fashion business EBITDA margin is minus 2.0%. It’s come down from minus 5.4% a year ago. And even on a 9-month basis, the losses for the fashion business now stand at minus 3.7% of net revenue.”
— Falguni Nayar, Executive Chairperson, MD and CEO
Nykaa is expanding its business model to provide full-stack digital and physical operations for major global brands. This shift toward a service-led platform model creates stickier relationships with international partners and diversifies revenue streams.
“We have partnered with Nike to run their D2C business. In India Kiehl’s has similarly trusted us to run their entire India business, be it their D2C website, their stores as well as exclusively e-commerce and sell it on other platforms. There was a similar business we had started doing with Foot Locker earlier, which has been growing.”
— Falguni Nayar, Executive Chairperson, MD and CEO
New specialty store formats are successfully attracting a male demographic that was previously under-served. Expanding the customer base beyond women provides a significant new growth lever for the beauty segment.
“Interestingly, 45% plus of the business from these stores is coming from men’s fragrance. So, this store format is definitely playing out the way we expected, which is to have a much wider appeal than just our target female audiences. It’s also appealing to men in India.”
— Anchit Nayar, Executive Director and CEO, Beauty
The company has fully integrated its store network to support rapid hyperlocal deliveries in major cities. This move directly addresses the rising consumer demand for speed and counters competition from quick-commerce players.
“On top of the fact that we are now live in all seven Tier 1 cities with Nykaa Now. Also, all of our retail stores are now enabled with hyperlocal delivery capabilities across the country. And this is what’s allowing us to sell a lot of our luxury beauty brands through this quicker delivery model.”
— Anchit Nayar, Executive Director and CEO, Beauty
Management clarified that while new customers spend less initially, their spending increases over time through platform trust and education. This suggests that current customer acquisition costs will yield higher returns as these cohorts mature.
“New customer AOVs tend to be lower than repeat customer AOV. And that doesn’t really have to do with the quality of the customer. That’s just how the customer, the more they engage with the platform, the more comfort they get shopping on the platform... we are not seeing the AOVs for them dipping meaningfully.”
— Anchit Nayar, Executive Director and CEO, Beauty
Nykaa has modernized its advertising platform to allow brands to target consumers at every stage of the buying journey. This structural shift toward high-margin ad revenue significantly enhances the company’s overall margin profile.
“Historically, it used to be all top-of-funnel advertising opportunities, but we’ve built out the technology and what we call as the MarTech stack to enable brands to do advertising across the funnel... So we’ve just created a much larger bouquet of offerings for brands, which we’re able to monetize and so that’s more structural in nature.”
— Anchit Nayar, Executive Director and CEO, Beauty
Management is prioritizing order frequency over individual basket size for their quick-delivery service. If successful, this strategy will lead to higher annual spending per customer despite lower transaction values.
“Is there a chance that the average order values for Nykaa Now orders can be lower than mainline platform orders? Yes, that is possible... We’re more focused on seeing that if the frequency of purchase increases because of Nykaa Now, then that benefit is more than an offset to the potential dilution of average order values.”
— Anchit Nayar, Executive Director and CEO, Beauty
The Nike partnership is structured to mirror traditional e-commerce unit economics while leveraging Nike’s brand strength. This allows Nykaa to capture high-value sales without the traditional risks of inventory heavy multi-brand retailing.
“It is finally from a unit economic perspective for Nykaa boil down to very similar to e-commerce revenues and margins where there is some inventory, there is margins like an e-commerce company and then there are costs for marketing and everything. But everything is well-structured and covered. So we think this is a very good outcome for us.”
— Falguni Nayar, Executive Chairperson, MD and CEO
Gross margin improvements are being driven by advertising revenue and the increased scale of private labels. These internal levers help protect profitability even if external market conditions or category mixes fluctuate.
“I think there’s improvement in ad income for the core business. Overall, B2B net retention margins are much lower than gross profit margin of the beauty business... and also owned brands have also had a role to play and improving profitability of owned brands also have a role to play.”
— Falguni Nayar, Executive Chairperson, MD and CEO
Potential trade deals and lower import tariffs could make international premium brands more affordable for Indian consumers. Increased volume from lower prices would benefit Nykaa’s role as a major importer and distributor.
“So, I think there is probably a benefit to, not only to us, but to our international to our global brand partners in terms of the kind of additional volumes they could do with better pricing, if that’s the decision they choose to make. So yes, it is definitely, we’re looking forward to seeing how this plays out.”
— Anchit Nayar, Executive Director and CEO, Beauty
Chemicals
Pidilite Industries Limited | Large Cap | Specialty Chemicals
Pidilite is India’s leading manufacturer of adhesives and sealants, dominated by its flagship brand Fevicol. The company also maintains a significant presence in construction chemicals, art materials, and industrial resins.
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Lower raw material costs helped expand gross margins, but the gains were temporarily masked by a one-time employee benefit expense. Investors should note that the underlying profitability is better than the reported numbers suggest due to this non-recurring item.
“Our gross margins at a stand-alone level improved by about 200 basis points as input prices remained benign. However, this benefit in the material cost was offset because of a one-time provision that we took on account of the new Wage Code. Basically, for two elements, gratuity and leave encashment, we have recognized the impact because of the new Wage Code that resulted in a onetime charge of INR47 crores in stand-alone and about INR52 crores in consolidated.”
— Sandeep Batra, Executive Director Finance and CFO
The pigments division faced a sharp downturn this quarter because of its high reliance on the American market. This highlight’s the company’s vulnerability to specific international trade cycles and tariff discussions.
“In our pigments business, we have a direct exposure to U.S. as in we do export to U.S. And U.S. is a large component of our pigment exports overall. So I think that is the piece. This part got affected quite a lot in Q3 of the current financial.”
— Sudhanshu Vats, Managing Director
Management believes the worst of the export decline is over as they adapt to new trade tariffs and alternative supply strategies. This forward-looking confidence suggests a stabilization of the B2B segment in the coming quarters.
“Our own sense is that this is largely behind us. We should see action based on the new tariff rate, hopefully, maybe by the turn of this quarter itself, but definitely as we move forward. We also feel that the impact on B2B per se in this quarter and future quarters will also be minimal because of this prolonged negotiation, we had also built a few other plan Bs, if I could say.”
— Sudhanshu Vats, Managing Director
A potential trade agreement with the European Union is expected to benefit exports, but the actual impact is several months away due to the long ratification process. Investors should view this as a medium-term catalyst rather than an immediate revenue driver.
“EU trade deal benefits will accrue to us, but there are two things on EU trade deal, perhaps maybe three. I think one is that EU trade deal till the time it is ratified by the European Parliament and all that, is at the very least, 6 months away, maybe 9 months away. So therefore, anything in that in terms of when the rubber hits the road on the ground will happen only towards the end of this year.”
— Sudhanshu Vats, Managing Director
The company is aggressively investing in the Roff brand to replicate the mass-market success of Fevicol in the tile adhesive category. This strategy aims to shift the category from a commodity to a consumer-driven brand with higher loyalty.
“I think Roff is our next big brand. And when we build a brand, we built a brand holistically. We do not say we are building the brand only for applicators or vice versa only for consumers because some of them are not strictly, in any case, Bazaar brands are not strictly only, India is a DIFM country, so not strictly to be used by the consumers, but consumers are aware of them.”
— Sudhanshu Vats, Managing Director
The business is largely insulated from housing market slowdowns because nearly three-quarters of revenue comes from repairs rather than new builds. This high exposure to the renovation market provides more stable and predictable earnings for investors.
“Our portfolio is not only new construction dependent. Our portfolio has new construction, renovation and repair. And renovation and repair account for maybe 70% plus, I would say, 70% to 75%, and new construction is more like 25%, maybe a little higher, so depending on the cycle.”
— Sudhanshu Vats, Managing Director
Management is not seeing the real estate cooling that some analysts fear, noting steady activity across residential and commercial projects. This positive on-the-ground view contradicts broader market concerns about a construction downturn.
“As of now, I can confirm to you that we haven’t seen any slowdown whatsoever even in residential. And by the way, within the industry, we keep talking to each other who are in the allied businesses. And as of now, we do not see any slowdown in any part of the construction segment.”
— Kavinder Singh, Joint Managing Director
The company is intentionally prioritizing top-line growth and brand investment over maximizing immediate profits. This balanced approach aims to capture higher market share while keeping margins within a healthy, sustainable range.
“We are also very conscious that we should have right profitability, at the same time, focus on building capabilities, building brands. And all of that is leading to improved in revenue growth, as you pointed out. So the question is, from where we stand, from our vantage point, the way we are seeing, we are seeing improvement in top line growth.”
— Sudhanshu Vats, Managing Director
The Dr. Fixit brand is seeing its strongest growth performance in several years, indicating a successful ramp-up in the waterproofing segment. This suggests that competitive pressures in construction chemicals are being effectively managed.
“If you look at Dr. Fixit’s growth this year is better than the growth has been in the last 2 to 3 years. I can tell you that. I think it is distinctly better. So we pushed this up a little bit.”
— Sudhanshu Vats, Managing Director
Management intends to use their strong brand power to take small, tactical price increases even when raw material costs are low. This ability to maintain a ‘pricing gap’ over volume growth helps protect margins against future inflation.
“We always continue to identify such opportunities where we can take pricing without actually hurting the premium that we charge, without the premium going way beyond our comfort corridor. So this kind of gap that you saw in the third quarter, as Sudhanshu said, anywhere between 100 bps or so, should get maintained.”
— Sandeep Batra, Executive Director Finance and CFO
Growth in the tile adhesive market is currently limited to walls, as many builders still use cheaper cement for floors. The long-term growth story for the Roff brand depends on successfully educating the market to switch to adhesives for all surfaces.
“Tile adhesive as a category is a replacer of cement, as you know. And it is definitely more expensive than cement, okay, and significantly expensive. So while the conversion from cement to tile adhesive is going on reasonably well in the vertical surfaces, the conversion on the flooring piece is not as good as it could be because people do not see the need to replace cement on the floor.”
— Kavinder Singh, Joint Managing Director
The new NioPro premium range is showing early success, allowing the company to segment the market more effectively. This premiumization strategy helps protect margins and caters to specialized high-end construction requirements.
“I want to share it on behalf of the team that NioPro is doing very well Jay. So therefore, I just want to leave you with saying that as we are in this game, we will have a Roff range of products and premium NioPro range of products, which will be selectively available, available to very select dealers and to the project teams.”
— Sudhanshu Vats, Managing Director
The company is working on entering the high-tech electronics and automotive adhesive markets, which have long and difficult approval cycles. While this takes time, successful entry would create a significant, high-barrier-to-entry business for the future.
“Testing in most of these spaces, whether it’s consumer electronics, electronic autos is very rigorous. It goes through a couple of rounds, but each of the round could be 12 months, 12 to 18 months. So this is a rigorous process. We are at it though.”
— Sudhanshu Vats, Managing Director
Steel
Tata Steel Limited | Large Cap | Iron & Steel
Tata Steel is a major global steel producer with significant manufacturing operations in India, the United Kingdom, and the Netherlands. The company is currently focused on scaling its Indian capacity while transitioning its European assets toward sustainable, low-carbon technologies.
[Concall]
High levels of Chinese steel exports are currently pressuring global trade and causing price variations across different regions. Despite these external pressures, the company managed to expand its profit margins significantly over the first three quarters of the fiscal year.
“At the same time, Chinese finished steel exports have crossed 110 million tons for the second time in a row, which had a significant impact on the regional as well as the global trade in steel. Steel prices diverged across the regions during the quarter and amidst this, Tata Steel has delivered a consistent performance with our consolidated EBITDA margin improving by about 300 basis points YoY for the nine months ended 31st December 2025.”
— T. V. Narendran, CEO & MD
The implementation of the new European carbon tax is now directly affecting steel imports by adding significant costs based on carbon emissions. This regulatory change is designed to benefit local producers like Tata Steel by making cheaper, high-emission imports less competitive.
“On January 1st, 2026, CBAM entered its definitive phase with carbon costs being embedded into imports and structurally improving the competitive landscape for the EU producers. The CBAM’s definitive phase requires importers to verify embedded emission intensity. Verification is expected to take time and importers who fail to verify will face carbon costs calculated using the default values by the country of origin.”
— Koushik Chatterjee, ED & CFO
Management anticipates that European steel prices will decouple from lower Asian price levels and trend higher toward US benchmarks. This shift would lead to better profitability for the company’s European operations as trade protections take full effect.
“But, because of these actions, we expect that prices in Europe will move away from Asian prices and move towards the US steel prices. It may not reach the levels of US steel prices but certainly will move closer to that.”
— T. V. Narendran, CEO & MD
The company sees a massive internal opportunity to more than double its steel production capacity in the state of Odisha. A potential new project in Maharashtra would complement this growth by providing better access to markets in western and southern India.
“So, in Odisha, we have the opportunity to go up to 35 million tons as against the current 14 million tons. Maharashtra is in addition to that and gives us optionality on the iron ore and servicing western and southern markets.”
— T. V. Narendran, CEO & MD
Management is firmly committed to building a new electric arc furnace in the UK to replace aging, high-cost technology. Delaying this capital investment would only prolong the current losses and postpone the site’s return to profitability.
“So, the point is that if we were to not progress with the EAF, we are going to delay that transition into a more profitable unit. So, I think there is no upside in delaying the investment.”
— Koushik Chatterjee, ED & CFO
Tata Steel management believes that domestic steel prices reached a five-year cyclical bottom during the recent quarter. This suggests a more favorable pricing environment for investors to look forward to in the coming months.
“I think December quarter prices, particularly the first part of that quarter was probably the lowest in the last five years for flat products, and pretty low for long products as well. So, in some sense, that was the bottom as far as the prices are concerned.”
— T. V. Narendran, CEO & MD
The company is diluting its older, high-cost operations by expanding its newer and more efficient steel plants. This structural shift is narrowing the cost gap between Tata Steel and its most efficient competitors in the Indian market.
“As Tata Steel grows more and more in Kalinganagar, Meramandali, etc., the impact of the legacy costs in Jamshedpur keeps coming down and we are addressing the legacy costs in Jamshedpur. So, because of these actions, the cost disadvantage we may have in some sites vis-à-vis our peers will keep reducing.”
— T. V. Narendran, CEO & MD
The company’s strategy focuses on dominating specific high-value customer segments rather than just overall market volume. This focus on premium market share typically results in better overall price realizations and more stable profits.
“Generally, in Tata Steel, we always look at whether our market share in attractive segments be twice our overall market share. So, if we are a 15-20% market share player, then in the attractive segments, we should be at least 40% or more.”
— T. V. Narendran, CEO & MD
A significant restructuring of the European steel supply is likely as older blast furnaces reach the end of their lives without being replaced. This reduction in traditional capacity could lead to a tighter market and better supply-demand balance over the next several years.
“I don’t think anyone is going to reline a blast furnace in Europe now. So, it’s more of a question of running it as long as you can and then if you have the ability, invest in a new process route.”
— T. V. Narendran, CEO & MD
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Kashish.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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