Welcome to the 86th edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered the SEBI Chairman’s Address & 5 companies across 5 industries.
Regulator
SEBI Chairman
Automobile
Maruti Suzuki India Limited
FMCG
United Breweries Limited
Financial Services
Indian Bank
Defence
Zen Technologies Limited
Engineering & Capital Goods
Lumino Industries Limited
Regulator
SEBI Chairman | 30 years of NSE Clearing Limited
Marking 30 years of NSE Clearing Limited, SEBI Chairman Tuhin Kanta Pandey reflects on India’s shift from T+14 paper cycles to a T+1 settlement architecture. He highlights key safeguards, like the Core Settlement Guarantee Fund and direct payouts, that make India’s segregated structure uniquely resilient compared to global omnibus models. Looking ahead, he challenges MIIs to move beyond traditional default risks to tackle complex, network-level operational and AI-driven vulnerabilities.
The regulator highlights how the clearing process converts private trades into guaranteed obligations to eliminate counterparty risk. This structural certainty is the foundation that allows Indian capital markets to scale and attract global institutional trust.
“Through novation, netting, margining and risk management, it transforms individual promises into obligations that can be settled with certainty. Thirty years of Clearing and settlement operations is therefore not simply a story about an institution. It is part of the story of how India built trust into its securities market.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
The transition to shorter settlement cycles like T+1 has significantly limited the duration that capital is exposed to potential market defaults. This shift increases capital efficiency for investors and reduces the likelihood of systemic contagion during high-volatility periods.
“The settlement cycle moved from T+3 to T+2 and eventually to T+1. Each of these measures addressed a different vulnerability. But together, they reduced the time for which risk remained open. They made risk measurable. And they made settlement more predictable.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
India’s market architecture has moved from assuming member solvency to actively preparing for potential defaults. For investors, this means the exchange has built ‘firewalls’ to prevent a single broker’s collapse from freezing the entire trading system.
“We are no longer relying only on the assumption that members will meet their obligations. We have built a system that is prepared for the possibility of failure. These may sound like technical mechanisms. Their purpose, however, is very simple. A problem at one point in the system should not become a problem for the entire market.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
Interoperability allows investors to use the same pool of collateral for trades across different exchanges, significantly lowering their capital requirements. This flexibility reduces the overall cost of trading and simplifies the operational burden for large institutional players.
“This is where interoperability among clearing corporations became significant. It enabled market participants to consolidate their clearing and settlement functions and collateral, even when trades were executed on different exchanges. It improved capital efficiency. It reduced costs and operational complexity. More importantly, it added to the resilience by providing greater flexibility in clearing arrangements.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
SEBI is introducing new rules to simplify compliance and create standard procedures for handling settlements during unexpected market holidays. These reforms aim to improve liquidity by allowing investors to reuse capital more quickly after completing security deliveries.
“To enhance operational efficiency, we have recently proposed to rationalise settlement, margin and risk-management provisions for Clearing Corporations. We are working to rationalise certain periodic filings and simplify the processes even further. We are also proposing to formulate an SOP for operational activities related to settlement on unscheduled holidays. We are examining a proposal on margin rationalisation for subsequent buy or sell transactions following acceptance of Early Pay-In of securities in the cash segment.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
The regulator is enforcing stricter governance and accountability for clearing houses to ensure they act as stable public utilities rather than profit-seeking entities. Investors benefit from this because it prioritises market stability and long-term security over short-term exchange profits.
“A clearing corporation is a systemically important financial market infrastructure. Its decisions can affect the functioning of the market well beyond its own balance sheet. That is why we have progressively strengthened the governance framework for Market Infrastructure Institutions. We have strengthened the role of public interest directors and specialised committees. We have clarified commercial and regulatory responsibilities. And we have strengthened accountability of key management personnel.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
India’s unique model of tracking assets at the individual level prevents brokers from pooling or misusing client funds, a common risk in many Western markets. This transparency offers retail investors a much higher level of protection against broker-level fraud or insolvency.
“One important feature is our segregated market structure, as opposed to an omnibus model followed in many developed markets. In India, every trade is traceable to the ultimate investor, and each client’s assets and obligations are handled individually. This creates greater transparency and investor protection. It also provides stronger asset security and helps contain risk at the client level.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
Management emphasises that as trading volumes explode, the financial ‘cushion’ protecting the market must grow at the same pace. This ensures that the system remains solvent and can absorb massive shocks without requiring government or taxpayer bailouts.
“The principle is important: market growth must be accompanied by commensurate growth in the financial resources available to absorb stress. No financial market can eliminate risk. What we can do is build multiple layers of defence so that risk can be identified, contained and absorbed before it becomes systemic.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
Regulatory focus is shifting from purely financial risks to ‘interconnected’ risks where a single technology vendor’s failure could halt the entire market. Investors should be aware that operational and technological uptime is now as critical to market stability as capital adequacy.
“The next set of risks is more interconnected. A participant may be financially sound, but its technology may be outdated and risk-prone. A market may be liquid, but a sudden liquidity shock may affect several participants at the same time. A clearing member may be safe on its own, but common exposures can create concentration across the system. A technology service provider may appear peripheral, yet a failure there could affect multiple market institutions simultaneously.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
The strategy is moving toward a ‘predictive’ model that looks at how risk travels through the entire financial network rather than just individual firms. This system-wide approach is intended to provide a more durable and stable environment for long-term equity investing.
“We must move from measuring risk to anticipating risk. We must move from entity-level risk management to network-level and system-wide risk management. And we must look at financial resilience together with operational resilience.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
Automobile
Maruti Suzuki India Limited | Large Cap | Automobile
Maruti Suzuki is India’s largest passenger vehicle manufacturer, maintaining a dominant presence across various price segments. The company is currently pivoting its strategy toward hybrid, CNG, and biogas technologies to complement its entry into the electric vehicle space.
Strong sales performance in regional markets like Kerala during Onam indicates healthy underlying demand ahead of the national festive season. This provides a positive signal for volume growth and market appetite across different vehicle categories.
“For Maruti, every day is a festive season now. But just to give you a perspective on Onam, in the previous month, we saw very strong retail sales in the Kerala market. For the first time in Maruti’s history, our van market share in Kerala reached 60%. That clearly shows vehicles are in high demand—be it in Kerala or across the country—and we are expecting that during the festive season, there will be a further surge in sales.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
The company is actively scaling up its new production lines to meet high demand, with full capacity expected within a few months. Low factory inventory suggests that production is being efficiently converted into channel sales without significant lag.
“As you are aware, we have already commissioned two assembly lines with a capacity of 2.5 lakh units each. The ramp-up is ongoing and will take another 2 to 3 months to reach full capacity. Nevertheless, whatever vehicles we produce—like in July, when we produced two lakh vehicles—nothing remains at the factory. All vehicles are dispatched to our channel partners, and retail remains very strong.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
Maruti is absorbing some input cost increases to keep prices competitive, even though it creates short-term margin pressure. The decision to skip festive promotions and the low 16-day inventory level reflect very tight supply-demand conditions.
“Danish, while there is commodity cost pressure, our organisation believes we should not pass the full cost burden onto customers. Thanks to our production and supply chain teams, we are working to pass on as little as possible. Nevertheless, there is margin pressure because we are absorbing a portion of commodity price increases. We do not intend to run special sales promotions this festive season, simply because doing so would require raising prices first, which we do not intend to do right now. There is such strong demand in the market that vehicles are not sitting in inventory; we are operating at just 16 days of network stock.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
Management attributed the recent dip in wholesale volumes to fewer working days in August rather than a cooling of consumer demand. This clarification helps investors distinguish between temporary calendar effects and structural shifts in the market.
“I will explain why you see that difference in numbers. Compared to July, the month of August had three fewer working days: one was Independence Day on August 15th, another was Raksha Bandhan, and there was an additional Sunday. For the domestic market, we produce around 8,000 vehicles per day. Across three days, that accounts for 24,000 vehicles, so you can do the calculation yourself. There is absolutely no demand issue; it was purely due to the lower number of working days.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
While the company has delayed price hikes longer than its competitors, persistent commodity inflation makes future price increases likely. This suggests that protecting margins will become a priority if input costs do not stabilise soon.
“Fundamentally, as a marketer, I never like to increase car prices. But at the end of the day, when commodity prices rise, we must eventually pass on costs to customers. We cannot indefinitely absorb input cost increases. You will also appreciate that we were the last among OEM peers to raise prices. While there is cost pressure from elevated commodity prices and we try to minimise the burden on customers, in the near future, we may still need to pass on a portion of these costs.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
Maruti is diversifying its green energy strategy by betting on biogas as a carbon-neutral alternative to electric vehicles. The conservative estimate for EV adoption suggests the company sees a much longer runway for internal combustion and gas engines.
“This is an excellent initiative approved by the Board, and we thank the Chairman and the Board. Combining Compressed Bio-Gas (CBG) with CNG results in a fuel profile that is as good as zero carbon—effectively as clean as an electric vehicle in India. We strongly believe that even by 2030, EV penetration in India will not exceed 16% to 17%. To reduce our overall carbon footprint, we look at our current portfolio, where CNG accounts for 42% of total Maruti sales.”
— Partho Banerjee, Senior Executive Officer, Marketing & Sales
FMCG
United Breweries Limited | Mid Cap | FMCG
United Breweries is India’s leading beer manufacturer and is part of the global Heineken Group. The company produces the iconic Kingfisher brand and manages an extensive portfolio of premium international labels including Heineken and Amstel.
Management is seeing massive volume growth in key states following favourable changes to how alcohol is distributed and sold. This confirms that the regulatory environment is becoming a tailwind for the industry rather than a hurdle.
“Number one, our confidence stems from policy reforms. The structural reforms in states like Karnataka, Jharkhand, and Maharashtra are driving explosive growth in the beer category. For instance, over the last three months, the beer category grew by more than 50% in Karnataka, and over 50% in Jharkhand following retail distribution changes. These figures reinforce our confidence in the massive long-term opportunity for beer in India.”
— Vivek Gupta, Managing Director and CEO
The company is focusing on high-end brands to offset rising raw material costs and difficult pricing regulations in some states. This shift toward premium products like Heineken Silver is intended to protect profit margins even if basic volume growth is uneven.
“The quality of our growth is extremely important because alcobev is a state-by-state business. In certain states, operations are currently not as sustainable or profitable, particularly as input costs have escalated following geopolitical conflicts in the Middle East. We are in active conversations with key state governments to improve operating profitability. That said, our top-line expansion will be driven primarily by premiumization. Our premium segment is growing at over 25%, anchored by strong momentum in brands like Heineken Silver and Kingfisher Ultra. Overall growth will be a balanced combination of premiumization, price-mix improvements, and underlying volume growth, supported by ongoing state-level policy reforms.”
— Vivek Gupta, Managing Director and CEO
The company is improving its profitability by selling more expensive beers and operating its existing factories more efficiently. By increasing production without spending more on new buildings, they aim to significantly improve the return on shareholder capital.
“Beer manufacturing is a capex-intensive business, so delivering strong returns on capital to our shareholders is paramount. The primary margin driver is our product mix, specifically premiumization. Unlike a couple of years ago, our premium portfolio is now margin-accretive. The second driver is optimising capacity utilisation across our own network of breweries and state mix, as gross margins vary significantly across states. The third driver is our internal productivity initiative. We have invested heavily in organisational capabilities, brewery infrastructure, and technology to do more with less. A key highlight of this program is maximising output from existing facilities at zero incremental capex.”
— Vivek Gupta, Managing Director and CEO
Management plans to maintain high levels of investment to capture India’s long-term potential as a top global market. They are aiming for a balance where they grow sales by double digits while slowly increasing their profit margins every quarter.
“We truly believe India will become the world’s largest beer market. Therefore, fueling category growth momentum is our primary objective. Whatever investment is required to sustain that structural momentum, we will commit. We are targeting balanced growth: double-digit net revenue growth alongside sequential margin expansion, rather than pulling back investments prematurely or over-investing ahead of demand.”
— Vivek Gupta, Managing Director and CEO
The steady influx of millions of new legal-age consumers every year provides a massive natural growth driver for the company. While state regulations are complex, this demographic trend supports the company’s goal of consistent double-digit revenue expansion.
“Double-digit revenue growth is not automatically guaranteed in a highly regulated state-by-state market. We must consistently deliver superior products in a competitive landscape. Our aim is to achieve double-digit net revenue growth while expanding operating margins year-on-year. Looking at macroeconomic drivers, 25 million young consumers reach legal drinking age every year in India. Kingfisher serves as the primary entry brand for the category, making us very buoyant about macro tailwinds.”
— Vivek Gupta, Managing Director and CEO
The company expects its high-end beer segment to continue growing at a very fast pace for several years. Reaching its target of a 20% premium sales mix by 2030 would fundamentally transform the company’s profitability profile.
“We expect 20% to 25% annual growth in our premium portfolio. Our premium volumes grew 34% in FY24 and 24% in the subsequent period, and we are running ahead of plan this year. By 2030, we expect premium products to represent close to 18% to 20% of our total sales mix.”
— Vivek Gupta, Managing Director and CEO
UBL has successfully gained significant market share in the premium beer category over the last year. This competitive success with brands like Heineken Silver shows they are effectively challenging rivals in the most profitable part of the market.
“Our number one priority remains overall category growth. We have already gained 300 to 400 basis points of market share in the premium segment, and we expect that share expansion to continue. However, driving the broader market pie is more important to us than competing solely for market share. Brand rollouts like Heineken Silver are performing very well and becoming top premium mild offerings in initial launch states.”
— Vivek Gupta, Managing Director and CEO
The company is launching new products specifically designed for longer social gatherings where consumers want a smoother taste and less smell. This focus on ‘sessionability’ and non-alcoholic options helps the company adapt to changing social habits and health trends.
“Sessionability is a major emerging consumer trend in India—consumers want beers that allow longer social occasions with a milder after-smell. Our innovation pipeline directly addresses this. For example, Kingfisher Strong Smooth was developed for enhanced sessionability with minimal after-smell. Heineken Silver is positioned as a natural product made strictly from barley, hops, and water. We are also educating consumers on lower-calorie natural beer profiles and plan to accelerate Heineken 0.0 to capture non-alcoholic beer occasions.”
— Vivek Gupta, Managing Director and CEO
Financial Services
Indian Bank | Large Cap | Financial Services
Indian Bank is a prominent Indian public sector bank offering a wide range of retail, corporate, and international banking services. The bank recently expanded its capital base through significant foreign currency deposit mobilisation to optimise its cost of funds and support aggressive credit growth.
The bank successfully raised $2.8 billion through international deposits and borrowings to fuel its next phase of expansion. These funds will be used to both support new lending and pay off existing, more expensive debt.
“We have mobilised $2.4 billion in Foreign Currency Non-Resident (FCNR) deposits and around $400 million in Overseas Foreign Currency Borrowings (OFCB), bringing the total to $2.8 billion. There are various deployment channels we are utilising. System credit growth remains healthy at around 18%, so part of these funds will be used directly to support credit growth. Another portion will automatically be deployed to substitute bulk deposits. Since we target loan growth of 14% to 15%, having this FCNR pool automatically allows a bulk of these deposits to replace higher-cost liabilities. Credit growth and bulk deposit substitution will be the primary deployment routes.”
— Binod Kumar, Managing Director and Chief Executive Officer
Management plans to use its newly raised international capital to replace high-cost bulk deposits. This move should help the bank maintain healthy credit growth while lowering overall interest expenses.
“System credit growth remains healthy at around 18%, so part of these funds will be used directly to support credit growth. Another portion will automatically be deployed to substitute bulk deposits. Since we target loan growth of 14% to 15%, having this FCNR pool automatically allows a bulk of these deposits to replace higher-cost liabilities. Credit growth and bulk deposit substitution will be the primary deployment routes.”
— Binod Kumar, Managing Director and Chief Executive Officer
Management clarified that raising large sums of foreign capital will not hurt profit margins because the new funds are cheaper than existing domestic deposits. Investors should expect stable interest margins as the bank replaces 6.6% cost debt with 6.4% cost alternatives.
“I do not expect any material negative impact if the funds are deployed judiciously. There will be minimal impact on Net Interest Income (NII) or NIM. While a portion will go toward credit lending, we remain disciplined with surplus liquidity and are not chasing loan volume at unviable rates. When analysing the cost dynamics, the average cost of our bulk deposits is around 6.5% to 6.6%. The total cost of the FCNR deposit pool—including swap costs—is approximately 6.4% to 6.5%, as our base offering rate is around 6%. Therefore, there will be no major negative impact on NIMs—perhaps just a positive or negative variance of one or two basis points.”
— Binod Kumar, Managing Director and Chief Executive Officer
The bank significantly exceeded its fundraising targets, raising $2.4 billion primarily from high-net-worth individuals in the Middle East and Singapore. This strong appetite from international investors suggests high confidence in the bank’s stability and growth prospects.
“We initially set an FCNR target of $1.5 billion, which was subsequently revised upward to $2.0 billion. We ultimately achieved $2.4 billion, so the outcome exceeded our expectations. Regarding deposit quality, I maintained strict criteria; otherwise, we could have easily raised up to $3.0 billion. We remained cautious and prioritised high-net-worth customers, carefully verifying source funds even for large deposits ranging from $50 million to $100 million. Inflows came from both existing and new clients, with ticket sizes starting as low as $100,000. Geographically, these deposits primarily originated from two key markets: the Middle East and Singapore.”
— Binod Kumar, Managing Director and Chief Executive Officer
Management is prioritising deposit quality by ensuring that 60% of their new foreign capital is unencumbered and not tied to internal loans. This conservative approach improves the bank’s liquidity profile and reduces the risk of sudden capital withdrawals.
“We explicitly discouraged leveraged deposits and evaluated them very selectively—primarily extending leverage only to high-quality existing relationships, such as clients who already held ₹600 crore in deposits with us. Net-net, around 40% of the $2.4 billion represents leveraged structures, while 60% consists of unencumbered deposits.”
— Binod Kumar, Managing Director and Chief Executive Officer
The bank has transparently shared the interest rates for its new deposit pool and the corresponding loans being offered to clients. These specific figures allow investors to accurately model the profitability and spreads of the bank’s international business.
“We offered 6.0% on the FCNR deposits, while the pricing for foreign currency loans against these deposits was set in the range of 5.5% to 5.6%.”
— Binod Kumar, Managing Director and Chief Executive Officer
Strong capital inflows have led management to raise their full-year loan growth forecast from 14% to as high as 17%. This aggressive upgrade signals that the bank has ample liquidity to capture market share in a high-demand credit environment.
“We initially guided for credit growth between 13% and 14%, but given these inflows, we are revising our full-year credit growth target to between 16% and 17%. FCNR deployment is a temporary dynamic; as these balances normalise over the coming quarters, funding will transition back to a standard mix of CASA, term deposits, and bulk deposits. Specifically, roughly 30% of the $2.4 billion will directly fund credit growth, while approximately 70% will be utilised for bulk deposit management and retirement.”
— Binod Kumar, Managing Director and Chief Executive Officer
The bank is pivoting its lending strategy toward high-growth infrastructure like data centres and green energy rather than low-margin general corporate loans. This focus on specialised sectors suggests the bank is prioritising yield protection and long-term structural growth trends.
“We see strong project demand in green energy sectors, including battery energy storage systems, solar panel manufacturing, and solar cell manufacturing. We are also seeing significant traction in data centres, driven by interest from the Middle East, where both established and emerging sponsors with strong track records are entering the space. We will continue lending to these high-growth sectors while actively refraining from participating in overly price-sensitive corporate lending segments where yields are squeezed.”
— Binod Kumar, Managing Director and Chief Executive Officer
Defence
Zen Technologies Limited | Small Cap | Defence
Zen Technologies is a leading Indian defence firm specialising in the design and manufacture of advanced combat training simulators and anti-drone systems. The company serves both domestic and international military and security forces with indigenous technology solutions.
Recent government policy changes have consolidated export approvals into a single category, reducing the time and paperwork required for international sales. This removal of operational friction allows the company to service international clients and spare parts requests much faster than before.
“To recap, even the time to export is now shortened because export permissions were previously taking longer. Even after we sold equipment, dispatching AMC spare parts involved multiple approvals, and any minor changes during transactions required additional sanctions. Now, all these aspects have been clubbed into a single category. This helps us avoid multiple approval cycles with the government, and the number of touchpoints has been reduced. Excluding UN-embargoed or blacklisted nations, we can now export to all other countries, which previously was a major operational challenge.”
— Ashok Atluri, Chairman and Managing Director
The company has provided a specific revenue guidance range for the current financial year that implies significant growth over previous periods. This target serves as a key benchmark for investors to track execution progress through the remaining quarters.
“We have indicated that full-year revenue is expected to be between ₹1,300 crore and ₹1,500 crore.”
— Ashok Atluri, Chairman and Managing Director
Management explains that recent revenue softness was caused by the military diverting funds to emergency operational needs, which delayed simulator purchases. The resumption of simulator ordering, including 600 crore rupees in new contracts, suggests a return to normalised purchasing behaviour.
“It is driven by order book execution visibility. Our order book previously moderated because prospective order awards got delayed—specifically simulator orders, as defence procurement temporarily shifted toward emergency operational requirements under Operation Sadbhavana. While we received emergency equipment orders, simulator orders were deferred. Now, simulator order inflows have resumed. We have received over ₹600 crore worth of simulator orders recently, with additional orders expected.”
— Ashok Atluri, Chairman and Managing Director
The military is increasingly adopting simulators because they can cut training times from nearly two years down to just three months. This efficiency gain provides a structural long-term incentive for the government to keep investing in the company’s simulation technology.
“Simulators already constitute a significant portion of our current order book. We expect a few hundred crore rupees worth of additional simulator orders in the forthcoming months. Defence authorities recognise that simulation training is the fastest way to maintain combat readiness. For instance, during Agnipath training programs, preparation timelines that previously took 100 weeks were compressed to 12 weeks through simulator integration.”
— Ashok Atluri, Chairman and Managing Director
The company still holds over 200 crore rupees in cash from its recent fundraising specifically for buying other companies. Investors should anticipate potential acquisitions that could broaden the company’s product portfolio or geographical reach.
“We have utilised over ₹700 crore, while ₹200+ crore remains available. A key portion of these funds is earmarked for inorganic growth through acquisitions. We are currently evaluating a couple of acquisition targets. If materialised, these acquisitions will expand our market footprint and utilise the remaining QIP capital, along with general corporate allocations over the coming months.”
— Ashok Atluri, Chairman and Managing Director
Management expects profitability to improve through operating leverage as revenue scales up during the year. They are maintaining high margin targets, including a 35% operating profit margin, which signals strong pricing power and cost control.
“Higher revenue turnover will automatically expand operating margins. We remain committed to our baseline target guidance of a 35% EBITDA margin and a 25% PAT margin. By year-end, our financial performance should match or slightly exceed these benchmark targets.”
— Ashok Atluri, Chairman and Managing Director
While defence contracting remains lumpy, the company’s order book is currently over 1,600 crore rupees and trending higher. The success of hitting fiscal year targets depends on whether the government completes fast-track procurement deals by the end of March.
“Order inflows in this sector remain inherently chunky rather than uniform monthly or quarterly increments. However, by the end of the financial year, our total order book position will be substantially higher. Many fast-track procurement (FTP) acquisitions carry a target conclusion deadline of March 31st. If those deadlines hold, order inflows will conclude within this fiscal year; if extended, they may spill into Q1 or Q2 of next year. Our current order book stands at over ₹1,600 crore, and we expect the overall order book trajectory to remain on an upward trend.”
— Ashok Atluri, Chairman and Managing Director
Engineering & Capital Goods
Lumino Industries Limited | Small Cap | Engineering & Capital Goods
Lumino Industries Limited is an integrated Indian manufacturer and EPC service provider operating in the power transmission and distribution sector. The company specialises in manufacturing overhead conductors, power cables, and transformer products, while also executing turnkey infrastructure projects for state utilities and private power operators across India.
The company is repaying ₹337 crore of debt from IPO proceeds, currently incurring an 8.5% interest rate. This repayment will make the company largely debt-free, significantly improving financial performance and PAT margins.
“Right now, we are paying an interest rate of almost 8.5%. This ₹337 crore of debt repayment from the fresh issue proceeds will be used to repay debt. Once we repay that, we will be largely debt-free. That is the financial advantage, which will help the company deliver better performance and also improve our PAT margins.”
— Devendra Goel, Managing Director
The company’s ₹3,200 crore order book includes ₹1,200 crore for products, expected to convert into revenue within the current financial year. This indicates strong short-term revenue visibility and a healthy order pipeline for the product segment.
“Out of our roughly ₹3,200 crore order book, ₹1,200 crore is for products and ₹2,000 crore is for EPC. The ₹1,200 crore for products will largely be converted into revenue within this financial year. As we are currently sitting in H1 of the financial year, we still have another 6 months to go. We do expect a lot of incoming orders and strong order flow. Whatever target revenue we are aiming to achieve on the product side, we will be able to achieve.”
— Devendra Goel, Managing Director
The ₹2,000 crore EPC order book will be executed over the next 3 to 4 years, providing longer-term revenue stability. Management aims to maintain a 70% product and 30% EPC revenue split, signalling a strategic shift towards higher-margin product sales.
“On the EPC side, we have an order book of ₹2,000 crore, which needs to be executed over 3 to 4 years. Our revenue split will always remain around 70% from products and 30% from EPC. As a management team, we will continue to focus on growing our product revenue while reducing our reliance on EPC revenues.”
— Devendra Goel, Managing Director
Product orders have short execution timelines of 3-4 months, limiting the product order book visibility to 1x-2x of capacity. This implies a steady, shorter-cycle business model for products compared to the longer-term EPC projects.
“When it comes to products, we don’t expect very large long-term orders to pile up because the timeline to execute most product orders is typically 3 to 4 months. So we can’t carry 2x, 3x, or 10x of our capacity in the order book; product order visibility will always remain between 1x, 1.5x, or 2x of capacity at the highest side. On the EPC side, yes, we can expect order book visibility spread across the next 3 to 4 years. So that is the range we expect.”
— Devendra Goel, Managing Director
The company is increasing capacity by 11,000 metric tonnes in H2 and establishing a new factory in Howrah for higher voltage cables (11kV-66kV). This expansion and focus on high-demand products like HTLS conductors are critical for future revenue growth and market share in advanced power transmission.
“Our base operations in Kolkata have that 40,000 metric tonne capacity you mentioned. Last year, we achieved a capacity utilisation of around 85%. In H2 of this year, we will be adding another 11,000 metric tonnes. Along with that, we are setting up a new factory in Howrah, West Bengal. Currently, we make low-voltage cables, but at the new facility, we will be manufacturing 11 kV, 33 kV, and 66 kV cables. We will also focus heavily on high-temperature low-sag (HTLS) conductors, which we feel will see massive demand in the country going forward. These are the main product lines where we will focus our growth.”
— Devendra Goel, Managing Director
While formal guidance will be issued after H1 results, the company expects to maintain historical trends of 10-11% EBITDA margins and 25-30% revenue CAGR. This indicates confidence in sustained profitability and strong top-line growth based on past performance.
“Regarding formal guidance, once we complete H1, we will be publishing our numbers, which will provide better visibility. Talking about specific future numbers right now would not be appropriate. However, looking at our past performance over the last 10 years, our EBITDA margin has consistently stayed in the 10% to 11% range, and our revenue CAGR has been between 25% and 30%. Going forward, we believe we should be able to maintain these historical trends.”
— Devendra Goel, Managing Director
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Quotes in this newsletter were curated by Shahid Barmare.
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