Welcome to the 101st edition of The Chatter — a newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 5 companies across 5 industries & a regulator’s speech.
Regulator
Securities and Exchange Board of India
Engineering & Capital Goods
Larsen & Toubro Limited
Financial Services
SBI Life Insurance Company Limited
Health Care
Cipla Limited
Telecom
Indus Towers Limited
Building Materials
JSW Cements Limited
Regulator
SEBI | Business Standard BFSI Insight Summit 2026
SEBI is the primary regulatory body for the Indian securities market, tasked with protecting investor interests and overseeing capital market participants. It develops policies for stock exchanges, mutual funds, and listed entities to ensure market integrity and facilitate efficient capital formation.
[Concall]
Indian capital markets have reached a milestone where market capitalisation now significantly exceeds the national GDP. This shift suggests that the economy is successfully moving toward market-based financing and deeper participation from retail investors.
“The growth of our markets is clear. The market-capitalisation-to-GDP ratio has risen from 69 per cent in FY16 to about 130 per cent today. Outstanding corporate bonds are nearly ₹61 trillion — close to 55 per cent of bank credit to industry and services. Mutual fund assets have grown by about 20 per cent a year over the past decade and now stand at around 23 per cent of India’s GDP. Average monthly SIP contributions in FY27, up to September, were around ₹32,000 crore — more than four times the level in FY19. These figures point to two important changes. Businesses have access to a larger pool of market-based finance. At the same time, more household savings are reaching financial markets through funds and other investment channels.”
— Tuhin Kanta Pandey, Chairman
SEBI is introducing new investment vehicles like the Specialised Investment Fund to fill the gap between retail mutual funds and high-ticket portfolio services. This will allow for more sophisticated investment strategies and broader access for accredited investors.
“To bridge the space between mutual funds and portfolio management services, we have introduced the Specialised Investment Fund (SIF). The Portfolio Managers Route for Investing in Mutual Fund units, or PRIM, will provide another channel for portfolio managers to invest clients’ funds in direct mutual fund plans, including SIFs. Recent changes to the accredited investor framework simplify accreditation and broaden the pool of eligible investors, while retaining appropriate safeguards.”
— Tuhin Kanta Pandey, Chairman
The SWAGAT-FI framework has been launched to make it easier for foreign institutional investors to enter and trade in the Indian market. Simplifying these compliance steps is likely to encourage more long-term foreign capital inflows into various asset classes.
“For eligible foreign portfolio investors, the SWAGAT-FI framework simplifies access and compliance, particularly for long-term institutional investors. We have also introduced a framework for net settlement of funds for eligible FPI transactions in the cash market. FPIs have also been permitted to participate in non-cash-settled non-agricultural commodity derivative contracts and non-agricultural index derivative contracts. Across these measures, the objective is to make market access clearer and more efficient, while keeping requirements proportionate to the risks and activities involved.”
— Tuhin Kanta Pandey, Chairman
SEBI is enforcing stricter governance and mandating that regulated firms cut ties with unregulated entities making false performance claims. Investors benefit from improved market safety and more reliable disclosures from financial institutions.
“To strengthen market integrity, we have progressively improved the governance standards of MIIs, their risk-management frameworks, and the transparency and quality of disclosures. We have mandated regulated entities to disassociate from unregulated entities that make unverified claims on returns or performance. We have specified norms for the appointment of key directors and mandated periodic performance evaluations of MIIs and their statutory committees by an independent external agency. We are developing a technology roadmap for MIIs. It will set out a structured short-term and long-term technology vision for the securities-market ecosystem and support its resilience.”
— Tuhin Kanta Pandey, Chairman
The regulator is proposing to upgrade accounting standards and eligibility criteria for the growing SME exchange platform. This move aims to prevent low-quality listings and ensure that smaller companies maintain high levels of financial transparency.
“We are also reviewing the SME framework. Proposals include determining eligibility based on post-issue market capitalisation and requiring larger issuers to follow Ind AS accounting standards. Taken together, these measures seek to ensure that market growth is supported by robust governance, credible disclosures and sound risk management.”
— Tuhin Kanta Pandey, Chairman
SEBI is exploring the creation of a domestic, market-specific AI model to act as digital public infrastructure for the financial sector. This would improve market oversight while protecting sensitive data from external technological risks.
“SEBI is working to implement the IOSCO Supervisory Toolkit for AI use in the Indian securities market. This will support risk management and the development of an agile AI governance framework. To strengthen the cybersecurity of MIIs, we have proposed extending the applicable IT and cybersecurity framework to their subsidiaries as well. Given concerns about the confidentiality and availability of frontier AI models, we are also exploring the possibility of developing a securities-market-specific AI model that could be built and governed domestically as a form of Digital Public Infrastructure.”
— Tuhin Kanta Pandey, Chairman
The regulator is increasing the space for institutional ‘anchor’ investors in IPOs and alternative funds to stabilise market demand. This strategy is designed to build a more sophisticated and diverse investor base for long-term projects like infrastructure.
“India will need both domestic and foreign capital to support its growth ambitions. Domestic savings provide an important foundation. International participation can widen the pool of capital and bring expertise. We have taken steps to encourage institutional participation in IPOs by increasing the anchor portion for eligible issues; in AIFs by reducing the threshold for Large Value Funds; and in REITs and InvITs, by including QIBs within the definition of strategic investors. The broader aim is to build a deeper investor base across products and markets.”
— Tuhin Kanta Pandey, Chairman
Engineering & Capital Goods
Larsen & Toubro Ltd. | Large Cap
Larsen & Toubro is an Indian multinational conglomerate specialised in engineering, procurement, and construction (EPC) projects across infrastructure, energy, and defence sectors. The company also maintains a significant presence in technology platforms, financial services, and high-tech manufacturing, including semiconductors and data centres.
[Concall]
L&T achieved record order inflows driven by massive energy and hydrocarbon projects both in India and internationally. This scale of order booking provides multi-year revenue visibility and demonstrates the company’s ability to win complex, large-scale engineering contracts.
“We recorded our highest-ever quarterly order inflow at Rs.1.48 trillion, registering a growth of 28% year-on-year, led by the receipt of ultra-mega and mega orders across offshore and onshore hydrocarbons, and carbon-lite businesses within the Energy Conventional segment. Within the Projects, Product, and Manufacturing, or PPM, portfolio, order inflows reached a record high of Rs.1.26 trillion, registering a robust 32% year-on-year growth. The growth was broad-based across both domestic and international markets, with order inflows rising 49% and 24%, respectively. International orders accounted for 62% of the portfolio mix, compared with 66% in the corresponding quarter of the previous year.”
— P. Ramakrishnan, Head of Investor Relations
Net working capital reached an all-time low due to disciplined capital management and high customer advances from new mega-projects. For investors, this efficiency significantly boosts cash flow from operations and reflects a lower-risk profile for the company’s balance sheet.
“Our focus on working capital efficiency and the changing underlying nature of the order book continued to yield positive results during the quarter. The NWC percentage improved to a record low of 1.7% as of September 2026, as compared to 4.1% as of March 2026. The improvement in NWC percentage was supported by a reduction in the gross working capital percentage from 51.7% as of March 2026 to 48% as of September 2026, along with customer advances received against the recently secured large orders.”
— P. Ramakrishnan, Head of Investor Relations
L&T is committing substantial capital to scale its AI data centre capacity to 100 megawatts over the next two years. This large-scale investment represents a move into high-margin digital infrastructure and could transform the company’s long-term earnings quality.
“As it stands now, as far as the 10,000 GPUs are concerned, this is close to approximately US$750 million of investment. This is being invested in our current 30-megawatt data centre near Chennai. We plan to put up another 50-megawatt AI data centre adjoining the 30-megawatt facility in Sriperumbudur, Chennai. It looks like over the next 2 years we may be putting up AI data centre capacity of 30 plus 50 plus another 30, so more than 100 megawatts is what we are looking for over the next 1.5 to 2 years. As I said, when I refer to this 100 megawatts, I am referring to an AI data centre, of which 30 megawatts is already set up, and the structure is in place. We may only have to invest in the AI chips. For the balance 70-odd megawatts, it is a combination of investing in a new data centre, which includes the civil component, along with the related investment in the prevailing GPU series, whatever is prevalent at that time.”
— P. Ramakrishnan, Head of Investor Relations
L&T has secured a spot in a major framework with Petroleum Development Oman, opening up a multi-billion-dollar opportunity pipeline. This preferred status reduces the cost of customer acquisition and ensures a steady stream of bidding opportunities in a core geography.
“This framework agreement with PDO covers a period of 6 years, and we believe that the order prospects we may target, based on what PDO will be spending, are in the range of US6billiontoUS7 billion over the next 4 or 5 years. Apart from us, three other companies have secured these projects. One is an Egyptian EPC company, one is Chinese, and the other is Korean. We believe that this gives us a passport to bid for those jobs. However, with competitive intensity present, it depends on how well we are placed. At least it gives us the right to bid for opportunities that I mentioned—US6billiontoUS7 billion over the next 3 to 4 years for hydrocarbons from Oman.”
— Subramanian Sarma, Deputy Managing Director and President
Profitability in the infrastructure segment is currently being weighed down by challenges in the legacy water treatment business. Management’s focus on converting claims into cash suggests that while margin pressure persists, they are prioritising the protection of the balance sheet.
“Infrastructure margins are what they are primarily because of the WET, or Water & Effluent Treatment, business that we are executing. If I were to take Water & Effluent Treatment out of this portfolio, the margins would have been better by almost 40 to 50 basis points. This is what has caused the softness in the entire Infrastructure and Utilities segment. We are ensuring that we also get paid, which is a very important point. Given that some of the projects are now receiving funding, funding has started to resume. However, time overruns and cost overruns, given that these are long-dated projects, mean that our ability to convert them into actionable claims on customers will take time. Until then, this segment will face some degree of execution pressure and margin pressure.”
— P. Ramakrishnan, Head of Investor Relations
L&T is adopting a more conservative investment model for its new green energy assets, requiring ‘take-or-pay’ contracts to eliminate market risk. This strategy aims to avoid the return-dilution issues seen with past infrastructure assets and ensures that new growth ventures support the group’s ROE targets.
“Now, where we are looking to invest in green hydrogen and green ammonia, do not expect L&T to make sizeable investments in the absence of a take-or-pay arrangement. Market risk is not there. When we had invested in Hyderabad Metro, the investment amount was quite high, and the exposure was quite high, but we did not have visibility of the revenue stream. Consequently, the return stream was also not visible. Here again, we will invest only in the quantum of investments that we have already communicated. The important point here is that returns are assured under a long-term take-or-pay arrangement. Therefore, this is not going to be dilutive of the L&T ROE that we had last year.”
— P. Ramakrishnan, Head of Investor Relations
Financial Services
SBI Life Insurance Company Limited | Large Cap
SBI Life Insurance is one of India’s leading private life insurance companies, benefiting from a massive distribution network via State Bank of India. The company provides a comprehensive range of products including individual and group insurance, protection, and pension plans.
[Concall]
The CEO indicates that SBI Life’s current business model already aligns with the regulator’s proposed changes to distribution costs. This suggests the company faces lower regulatory risk and potential competitive advantages compared to peers who may need significant restructuring.
“The recent IRDAI consultation paper on recalibrating the economics of insurance distribution is a constructive step towards strengthening the insurance ecosystem, with a continued focus on policyholder interests, transparency, and improved customer outcomes. This is consistent with the broader direction of recent regulatory reforms, including the GST exemption and the revised surrender value framework, which reinforce the importance of policyholder protection. While the final guidelines are awaited, we look forward to engaging constructively with the regulator. A balanced and sustainable distribution ecosystem remains essential for expanding insurance awareness, deepening penetration, and advancing insurance for all by 2047. SBI Life’s existing structure is broadly aligned with the proposed framework; therefore, we expect limited impact.”
— Amit Jhingran, Managing Director & CEO
Strong growth in the value of new business was driven by a move toward more profitable product categories. These healthy margins, especially when excluding one-off impacts, indicate high-quality earnings and efficient product pricing.
“Value of new business stands at Rs.32.7 billion, reflecting 19% growth, driven by both volume growth and a favourable shift in product mix. We have sustained a healthy margin of 27.9% for the period ended September 30, 2026, and for the quarter, the margin is 29.3%. Excluding the GST impact, VoNB would have been Rs.33.8 billion, representing 19.4% growth with a VoNB margin of 28.8%, and for the quarter, at 30%.”
— Amit Jhingran, Managing Director & CEO
The upcoming launch of a new deferred annuity product is expected to be highly profitable and tap into India’s ageing demographic trends. This new offering should help diversify the product mix away from market-linked products while supporting overall margins.
“We will be launching this deferred annuity soon, and the margin will be similar to, or perhaps higher than, the company margin. That is what we are looking for. The objective is to provide a return to the customer, and this is one segment where we see a lot of potential from the perspective of the country’s demographics. There is a lot of potential for deferred annuity as well as for margin-accretive products. We will be launching it, and we hope this will help grow our non-par share as well as enhance our margin.”
— Prithesh Chaubey, President and Appointed Actuary
SBI Life is seeing a significant shift in its protection business toward pure term insurance, which provides higher sum assured growth. This change in mix is healthy as it suggests deeper penetration of high-value protection products.
“The overall growth in protection on the individual NBP basis is 16% in H1. The contribution is mostly coming from pure protection. Pure protection is growing faster than return of premium. As far as our mix between ROP and non-ROP is concerned, it has now moved to 58% to 42%. 58% is ROP and 42% is non-ROP. The pure protection mix has moved from 19:10 to 58:42. The major growth is coming from pure protection, but at the same time, ROP is also quite an attractive proposition for our customers.”
— Sangramjit Sarangi, President and CFO
Management clarified that their credit life insurance products are not forced bundles, but they are often financed by the customer’s loan. This transparency is important as regulators scrutinise how credit-linked insurance products are sold to borrowers.
“First of all, there is a difference between these two things. I would not say that the product is bundled because it is optional for the customer. As I shared earlier, our attachment rate in the bank portfolio is around 50%, or less than 50%. It is optional for the customer to opt for this product. However, as of now, most customers are paying this premium by availing themselves of a loan from the bank. Going forward, as and when the guidelines change, we will adapt to the new guidelines according to the situation.”
— Amit Jhingran, Managing Director & CEO
Growth in non-SBI bank partnerships is exceeding 30%, adding meaningful volume to the business. Because commission structures are standardised across all partners, this diversification does not negatively impact the company’s overall margin profile.
“Institutional alliances growth is mostly coming from public-sector banks and some private-sector banks as well. We are seeing very good growth of more than 30% in this other-bank channel segment. The growth in this segment is particularly coming from the non-par segment. Regarding the margins you were asking about, we pay uniform commission to all our distributors, whether they are from the agency channel, bancassurance channel, or other-bank channels. Since the commission rates are uniform, the margin from all the channels is also uniform.”
— Amit Jhingran, Managing Director & CEO
SBI Life is successfully executing its plan to reduce reliance on market-linked ULIP products in favour of more stable traditional products. This diversification makes the company’s revenue stream less sensitive to stock market volatility.
“Regarding the product mix, as you already know, last financial year we closed with 66% of ULIP and 34% of non-ULIP products. This year, we had set a budget to reduce the ULIP contribution to around 63% by improving non-par, participating, and protection products, and our product launches have also been in that category to provide more solutions and more choices to the customer, and the market and our distributors have responded well to that. In the first half, we closed at around 62% of ULIP and 38% of non-ULIP products. As we move into the second half, we have that 1% cushion, and we expect that, broadly, we will be able to move in the direction that was set at the start of the financial year.”
— Amit Jhingran, Managing Director & CEO
Health Care
Cipla Ltd | Large Cap
Cipla is a leading global pharmaceutical company with a dominant presence in the Indian market and a growing portfolio of complex generics in North America. The company specialises in respiratory, chronic therapies, and biosimilars, maintaining a robust manufacturing network focused on high-quality standards and regulatory compliance.
[Concall]
Cipla’s domestic business continues to grow faster than the industry average, particularly in high-margin chronic categories. This consistent growth provides a stable earnings base for the company as it invests in more complex global opportunities.
“One India delivered 12% Y-o-Y growth, sustaining its track record of consistent double-digit growth over the last few quarters, driven by strong execution across key therapies and the resilience of our franchise in the IPM. In our branded prescription business, we continue to outperform the market, delivering 15% growth, which was led by the chronic portfolio. As per IQVIA YTD September ‘26, our key chronic therapies continue to grow ahead of their respective markets, with respiratory growing 11%; anti-diabetics growing 50%, including GLP; urology growing 11%; and dermatology growing 16%. This was underpinned by strong brand equity, robust volume growth, effective field execution, and sustained momentum from new product introductions. Our overall chronic mix stood at 60.3% as per IQVIA MAT September ‘26.”
— Achin Gupta, MD and Global CEO
The US business is gaining momentum following key approvals for respiratory products that are manufactured at the company’s own facilities. This validates Cipla’s ability to handle complex drug-device combinations, which often face less competition in the generic market.
“In North America, we delivered quarterly revenue of $172 million in Q2, which represents a $10 million improvement versus the previous quarter. We remain confident of furthering this momentum through the remainder of this year, supported by our launch pipeline and the scale-up of these new assets. Cipla continues to hold the number one position in the overall US albuterol MDI market this quarter as well, with a market share of 22% as per IQVIA data for the last week of September ‘26. So far this year, we have secured approvals for two key respiratory products, with generic Ventolin approved in Q1 and generic Advair approved in Q2. Notably, generic Advair approval marks our first DPI approval from our US-based manufacturing network, further validating our differentiated respiratory capabilities and reinforcing our commitment to complex respiratory therapies.”
— Achin Gupta, MD and Global CEO
Management is planning a heavy launch schedule for the US market, including high-value peptide and respiratory products. The target of 45-50 filings over three years signals a significant acceleration in pipeline development aimed at long-term revenue growth.
“Our pipeline for this financial year includes three additional significant launches for the US, which is in line with our previous guidance. This includes two more respiratory assets and one key peptide opportunity. Additionally, we have four biosimilar programs under development for global markets, which continue to advance steadily through key development milestones. Alongside these efforts, we remain focused on strengthening our R&D capabilities, particularly for the US market. We are progressing well on organic pipeline development, with approximately 45-50 filings planned over the next 3 years.”
— Achin Gupta, MD and Global CEO
The company reported a healthy expansion in margins due to a better mix of higher-profit products. Maintaining this trajectory is essential to reaching management’s full-year profitability targets while funding increased marketing and manufacturing costs.
“The EBITDA margin, excluding other income, stood at 18.7% for the quarter, reflecting a sequential improvement of 200 basis points. This performance is in line with the guidance of sequential margin expansion, and we remain confident of continuing this trajectory over the remainder of the year. The reported gross margin, after material costs, stood at 64.4%, up 7% quarter-on-quarter, supported largely by an improved product mix. Total expenses for the quarter stood at INR 3,382 crores, reflecting an increase of 4% quarter-on-quarter. This increase reflects our planned investment in upcoming product launches and enhanced manufacturing readiness.”
— Dinesh Jain, Global CFO
While the return of the profitable drug Lanreotide is delayed, the company is not relying on it to meet its billion-dollar US revenue goal. Instead, growth will be driven by the ramp-up of Ventolin and a new filing from a North American site to de-risk future supply.
“Regarding the 2 products that you mentioned, Ventolin will be a big driver for us as we progress through the year and as the product scales up. Ventolin will be a big contributor. We do not anticipate Lanreotide being back during this financial year. We are pursuing 2 parallel paths. One is to work with Pharmathen on their remediation and represent the matter back to the FDA to resume supplies of Lanreotide from there. The second is a new site in North America, which we are working on to file Lanreotide. However, neither of these is included in our exit run rate guidance of $1 billion as far as Lanreotide is concerned.”
— Management, Executive Leadership
Cipla is seeing rapid growth in its anti-obesity and diabetes portfolio following the launch of high-demand GLP-1 therapies in India. Management expects this trend to continue steadily, as patient adoption shows no signs of slowing down.
“We are seeing very good adoption of GLP-1 as a therapy, particularly Tirzepatide as a molecule in which Cipla is participating. We are seeing month-on-month growth rates of somewhere between 5% and 10%. We expect that trajectory to continue. {? Yugrpic ?} has become the second-largest brand in the GLP rankings. We do not expect any saturation on this front. We expect steady growth in the months to come.”
— Management, Executive Leadership
Revenue growth for generic Ventolin is currently limited by production capacity rather than market demand. As the new North American factory increases its output, management expects a massive jump in market share due to their strong existing customer relationships.
“These are from our North America manufacturing site, which is a new facility. Therefore, it is a function of the supply ramp-up that is happening, and as we are able to fully ramp up, you will see significant growth in the remaining part of this year. ... If you look at a crowded albuterol market, on the other Proventil generics, we are holding a very healthy 22% leading market share. From a commercial share perspective, we are very confident, and we have all the right relationships to get to that share. However, we need to ramp up supplies. ... This is approximately a 24 million-unit market. We can get to a much higher share of that market compared to Proventil, given that we are the only generic in this market. It is probably not 2, 3, or 4 times. It will be an exponential increase from where we are.”
— Management, Executive Leadership
Telecom
Indus Towers Ltd. | Mid Cap
Indus Towers is one of the world’s largest telecom tower companies, providing passive infrastructure services to mobile network operators across India. The company operates an extensive shared infrastructure network of over 270,000 macro towers to support rapid 4G and 5G network expansion.
[Concall]
The company has achieved an increase in its tenancy ratio for the first time in several quarters as major customers accelerate their network expansion. This suggests a shift from tower stabilisation to a growth phase driven by high order visibility.
“We are happy to share that we recorded strong growth in co-location additions in Q2. This has translated into an improvement in our tenancy ratio from 1.62 to 1.63, following a period of stability. Growth during the quarter was driven by continued network expansion from our customers, alongside a pickup in rollouts by a major customer. With healthy order book visibility and accelerating rollout activity, we expect the growth momentum to continue.”
— Prachur Sah, Managing Director and CEO
Management highlights that 5G data consumption is surging and now accounts for nearly half of all mobile data traffic in India. This trend necessitates significant network densification, which acts as a primary long-term catalyst for new tower and co-location demand.
“As these networks mature, deployment focus is shifting towards network densification to support higher traffic loads and emerging digital use cases. Given our comprehensive portfolio and strong customer relationships, we are structurally well-positioned to support this steady infrastructure expansion. Infrastructure expansion and sustained 5G adoption trends are validated by robust consumption trends. In Q1, total data volume increased by 30% year-on-year, supported by an 18% rise in average monthly usage per subscriber. Notably, 5G networks are accelerating this trend, with 5G usage alone growing 79% year-on-year, representing 44% of total data consumption, up from 32% in the prior year.”
— Prachur Sah, Managing Director and CEO
Management is optimistic about its international foray into Africa, claiming a lower capital expenditure per tower than established regional competitors. While currently serving a single anchor tenant, the company is actively seeking additional customers to validate its sharing model in these new markets.
“By achieving considerable capex savings per tower compared to competitors, we are delivering lower-cost solutions for our anchor customer. Rollouts have successfully commenced, with initial tower deployments as planned and scheduled to ramp up in H2. We have also initiated engagements beyond our anchor customer to leverage our tenancy-led business model. Africa expansion is a long-term strategy, and we strongly believe we have the right to win.”
— Prachur Sah, Managing Director and CEO
The significant 11% reduction in diesel usage is a result of structural changes, including large-scale lithium-ion battery adoption and AI-driven fuel management. These initiatives are designed to permanently lower the energy cost base of the business rather than providing just a seasonal benefit.
“The 11% diesel reduction and the cost reduction are primarily driven by the operational initiatives that we have taken. There has been substantial work on solar. As you saw in my slide, we have already deployed close to 49,000 solar sites by the end of September. Secondly, a lot of work is currently ongoing in terms of how we manage our operations through the infusion of digital and AI into our planning of fuel operations. Thirdly, over the last few years, as we have started to transition from traditional lead-acid batteries to lithium-ion batteries, this is also starting to contribute because it has now reached a scale where it can start having a meaningful impact on cost reduction. I would say these are structural cost initiatives that have been taken and are making an impact.”
— Prachur Sah, Managing Director and CEO
There is a noticeable industry shift back toward macro towers as telcos prioritise 5G capacity and multi-tenant capabilities over leaner, single-purpose sites. Indus is adapting its rollout strategy to match this customer preference for more substantial infrastructure assets.
“The deployment of leaner towers is less dependent on whether we are deploying them. It is dependent on how the customer is planning its network. In general, what we have seen is that a few years ago there was a large network expansion plan that was based on leaner towers; however, it is moving more and more towards macro or bigger towers. So I do not think it is a function of what we are able to deploy. It is more a function of how the customers are planning their network.”
— Prachur Sah, Managing Director and CEO
Building Materials
JSW Cement Ltd. | Mid Cap
JSW Cement is a leading Indian green cement manufacturer specialised in Ground Granulated Blast Furnace Slag (GGBS) and blended cement variants. A part of the multi-billion-dollar JSW Group, the company focuses on high-performance construction materials produced through sustainable industrial waste recycling.
[Concall]
The North India integrated unit at Nagaur has reached operational profitability, with further cost efficiencies expected from new grinding capacity. Growth in the specialised GGBS segment remains a key driver, supported by approvals for major infrastructure projects.
“I am happy to announce that at Nagaur, we achieved EBITDA breakeven in Q2. The additional 1 million ton per annum grinding capacity commissioned in October further strengthens our ability to serve this region, and our cost will continue to reduce over the coming quarters. As I highlighted in our previous calls, we have received several project approvals on the demand side, which has reflected in the current quarter’s numbers for GGBS volumes, which grew by 7% YoY. The business continues to witness encouraging momentum, driven by growing demand from infrastructure and the RMC sector.”
— Nilesh Narwekar, Chief Executive Officer
Total net debt stands at approximately 4,287 crore rupees, with leverage slightly above the company’s internal comfort threshold of 3x. Capital expenditure is tracking toward an aggressive annual target as the company funds its expansion pipeline.
“In terms of the balance sheet, net debt was Rs.4,287 crores at the end of September. Net debt to EBITDA stood at 3.2x. The average cost of debt for the quarter was stable quarter-on-quarter at 7.67%. The company incurred capex of Rs.483 crores during the quarter and Rs.820 crores during the first half of the year. This is on the basis of cash outflow, though the capex number will be slightly higher.”
— Narinder Singh Kahlon, Director Finance and Commercial and Chief Financial Officer
Significant cost reductions of 550 to 600 rupees per ton are expected in the North as key logistical and energy projects become fully operational. These efficiencies are designed to offset broader industry fuel price hikes and bring the company’s cost structure in line with top peers.
“Our own reading is that we expect our costs to come down by anywhere in the range of Rs.550-600 per ton with all this. Despite the increase in fuel costs, we expect to be broadly in line with the industry numbers. With the commencement of OLBC, which is a significant cost saving, and with the commencement of WHRS and AF coming into full effect, as our volumes start to ramp up and our clinker utilisation starts to increase, we expect these numbers to start getting corrected.”
— Management, Executive Team
Fuel costs are rising by roughly 14% to 2.10 rupees per Mcal, adding a 90 rupee per ton cost burden to cement production. The company aims to neutralise this impact through higher price realisations and increasing its share of cheaper green energy to over 50%.
“As was mentioned by our Director Finance, Rs.1.84 per Mcal is moving up to Rs.2.10 per Mcal, which translates to, based on our clinker factor, an increase of approximately Rs.90 per ton in cement cost. We believe that, because of our increase in green energy—we are moving from 41% to a higher number, upwards of 50%—and the price increase that came through in the second half of September and continues in October, this should offset the increase.”
— Management, Executive Team
Management provides specific details on October price hikes, which are strongest in the non-trade segment across all regions. While trade price increases have been limited to the East so far, the company expects the broader market to eventually absorb these hikes due to universal cost pressures.
“Let me start with non-trade. In the South, non-trade, as we speak for October, we are seeing a Rs.15-20 per bag increase. In the East, we are seeing a Rs.25-30 per bag increase, Rs.10 in the West, and around Rs.20 per bag in the North. This is for non-trade. On trade, we are seeing a Rs.10-15 per bag increase only in the East. In the other regions, the prices have yet to see the increase; we are yet to see the reflection of that play out. Our view is that prices should hold firm, primarily because of the cost pressures that the entire industry is facing.”
— Management, Executive Team
Management remains committed to rapid capacity expansion but will cap its risk profile by targeting a net debt-to-EBITDA ratio of under 3.0x. This suggests that while growth is the priority, the company will manage its cash flow and borrowing to maintain financial discipline.
“No, Naveen, the plan is always to stay aggressive, but at the same time, we have a mandate to keep net debt-to-EBITDA below 3. It will continue to be around 3 for perhaps another year or so, and it will definitely be below 3 in the coming years.”
— Management, Executive Team
The company’s high trade payables are a strategic choice to fund capital expenditure without ballooning long-term debt during this growth phase. Management expects these levels to normalise as new projects like the Rajasthan plant start generating operational cash flow.
“As you understand, today we are in a growth phase. Somewhere, something suffers, right? It is not that our vendors are unhappy with us. These numbers will come down very shortly. At the same time, keep in mind that I have to be mindful of the debt number as well. I do not want my debt to go up beyond a certain number. At the same time, I want to do my capex. There is a lag between when I spend and when I start generating cash from the investment. Once this starts, such as Rajasthan, when it starts generating enough cash, probably at the end of Q4 or sometime in Q1 next year, you will see a substantial drop in payables.”
— Management, Executive Team
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 Shahid & Srusti.
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Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes, so there may be 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.