Welcome to the 105th 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 2 Regulators Speech/Addresses & 5 companies across 4 industries.
Regulator
Securities and Exchange Board of India
Reserve Bank of India
Telecom
Bharti Airtel Limited
Metals
Tata Steel Limited
Hindalco Industries
Consumer Durables
LG Electronics India Limited
Energy
Oil and Natural Gas Corporation Limited
Regulators
SEBI’s Chairman | NSE RISA Kolkata
SEBI is the primary regulatory body for the securities market in India, dedicated to protecting investor interests and fostering market development. It oversees exchanges, intermediaries, and listed entities to ensure transparency, security, and integrity across the financial system.
[Speech]
The investor base in West Bengal has seen exponential growth, reaching 90 lakh participants and significant mutual fund assets under management. This rapid expansion highlights a deepening retail market in the region and an increasing reliance on formal financial markets for wealth creation.
“West Bengal has a long history of commerce and enterprise. Its securities-market investor base has grown nearly eightfold, from around 12 lakh in 2015 to about 90 lakh today. Almost 90,000 new investors have joined in October so far. As at the end of FY 2025-26, West Bengal had about 43 lakh unique mutual fund investors and nearly ₹3.65 lakh crore in mutual fund assets.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
While technology has made a wide array of financial products accessible, there remains a massive gap between awareness and informed participation. Investors need to focus on education and product understanding rather than just accessibility to manage their financial risks effectively.
“India’s capital markets have become deeper and more accessible. Investors can choose among stocks, mutual funds, bonds, REITs and InvITs. Technology has brought these choices to our phones. But access does not guarantee understanding. SEBI’s Investor Survey found that 63% of households knew of at least one securities-market product, yet only about 9.5% participated. Among investors, only 36% had moderate or high market knowledge.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
The regulator is mandating that mutual fund direct plans become the default digital choice to lower costs for retail investors and improve transparency. These new controls, including folio locking, are designed to significantly reduce the risk of digital fraud and unauthorised transactions.
“From tomorrow, mutual fund direct plans will appear as the default option on digital platforms of all AMCs. Investors who choose regular plans will be informed about their higher costs. We have given investors greater control over their accounts. They can voluntarily lock mutual fund folios or block trading accounts to prevent unauthorized activity.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
Recent policy updates have focused on tightening asset safety through direct payouts and simplifying the bureaucratic process for nomination and inheritance claims. These reforms reduce operational friction for families and mitigate the risks associated with broker-level fund management.
“We have strengthened safeguards for investor assets through pledge and re-pledge, direct payout of securities into demat accounts and periodic settlement of client funds by brokers. We have simplified nomination and transmission norms. Investors can update nominations more easily. Families face less paperwork when claiming investments. Centralized demise reporting reduces the need to approach multiple intermediaries.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
SEBI’s massive multi-channel outreach program, Project Jagrook, targets both urban and rural demographics through localised language content and institutional partnerships. This systematic approach aims to institutionalise financial literacy across schools, rural bodies, and digital platforms to combat investment fraud.
“Project Jagrook uses television, radio, print, digital platforms and physical outreach in familiar languages, including Bengali. Our WhatsApp outreach and SEBI Saa₹thi App bring verified information to people’s phones. For colleges, the MUST program will train teachers, staff and senior students to share investor knowledge. In rural communities, we are working with Panchayati Raj institutions, States and local partners.”
— Shri Tuhin Kanta Pandey, Chairman, SEBI
RBI | Deputy Governor | Leadership Conference of Indian Bank
RBI Deputy Governor Swaminathan J, speaking at Indian Bank’s Leadership Conference, discussed the changing banking environment. He highlighted how technology, customer expectations, savings preferences, and global developments are reshaping the sector. He stressed sustainable credit growth, stable deposits, cybersecurity, and operational resilience. He also emphasised sound governance, customer trust, and responsible lending. The speech focused on building stronger institutions through better leadership, talent development, and long-term planning.
[Speech]
The traditional banking model is under pressure from fintech competitors and shifting consumer savings habits. Investors should note that a bank’s ability to maintain a low-cost deposit franchise is now dependent on its ability to collaborate within a broader digital ecosystem.
“Secondly, the structure of financial intermediation is evolving. Banks now operate within a wider ecosystem of financial institutions, fintech companies, technology platforms and other service providers. This creates new opportunities for collaboration and innovation, while also changing competitive dynamics. At the same time, evolving household savings preferences and greater choices among financial products are changing the environment for deposit mobilisation. These developments call for renewed attention to business models, customer relationships and the strength of the deposit franchise.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
The banking sector is currently enjoying a high point in asset quality and capital levels, providing a buffer for future expansion. The focus for investors should be on whether banks are using this period of profitability to reinvest in long-term structural capabilities.
“The Indian banking system approaches this task from a position of strength. Improvements in asset quality, capital adequacy and profitability over recent years have created a sound foundation for future growth. The important task now is to build on these gains and ensure that institutional capabilities keep pace with a changing environment.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
Sustainable credit growth is only possible if it is backed by disciplined risk pricing and a diversified deposit base. This reminds investors that aggressive loan growth without corresponding liability strength can lead to long-term institutional fragility.
“Firstly, growth remains essential to the banking sector’s role in supporting India’s economic development. However, its sustainability depends on sound underwriting, appropriate risk pricing, and a clear understanding of borrowers’ repayment capacity. Equally important is the liability side of the balance sheet. A stable and diversified deposit franchise supports sustainable credit expansion and reflects the depth of customer relationships. The objective should be to pursue growth that is balanced, appropriately funded and consistent with long-term institutional strength.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
In a digital-first environment, operational and technological resilience is as critical as credit risk management. Management must treat cybersecurity and third-party vendor oversight as core strategic priorities rather than isolated IT issues.
“Secondly, as banking becomes more digital, the reliability of technology infrastructure assumes increasing importance. Cybersecurity, data protection, business continuity and effective oversight of third-party service providers must be integral to institutional planning. These responsibilities extend beyond technology departments and require engagement across business functions and senior management. The objective is not simply to introduce new digital capabilities, but to ensure banking services remain dependable as operations scale and grow in complexity.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
True governance is measured by decision-making quality and accountability at all levels, not just adherence to a rulebook. For investors, this emphasis on responsible lending and customer treatment is a key indicator of long-term reputation and risk mitigation.
“Finally, governance must be reflected not only in policies and procedures, but also in the quality of decisions taken throughout the institution. Clear accountability, effective internal controls, transparency and a willingness to identify and address emerging issues are essential. Responsible lending, fair customer treatment, and effective grievance redressal remain central to public confidence. Ultimately, an institution’s reputation is built on how consistently it fulfils its responsibilities to customers and other stakeholders.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
Quarterly financial targets are insufficient metrics to judge a bank’s long-term viability and readiness for disruption. Investors are encouraged to look for qualitative signs of future-proofing that may not be reflected in current earnings.
“An important aspect of this stewardship is the willingness to look beyond immediate performance. Business targets and financial results are necessary measures of progress, but they cannot fully capture an institution’s preparedness for the future.”
— Shri Swaminathan J, Deputy Governor, Reserve Bank of India
Telecom
Bharti Airtel Limited | Large Cap
Bharti Airtel is a global telecommunications provider with operations in 17 countries across Asia and Africa. The company offers a diverse portfolio including mobile services, broadband, enterprise connectivity, data centres, and digital financial solutions.
[Concall]
The company is generating high cash flows while aggressively investing in its long-term data centre infrastructure expansion. This shift toward high-capacity data centres signals a strategic move to capture rising demand for cloud services beyond traditional telecom.
“Operating free cash flow, which is EBITDA minus capex, was almost 13,000 crores. In addition, we invested about 2,900 crores in a strategic land parcel to pursue our 1 gigawatt data centre capacity ambition. You will hear more about this in the quarters to come. India mobile delivered another quarter of strong growth, underpinned by continued portfolio premiumization. Homes maintained its growth momentum, aided by our convergence strategy. Airtel Business continued to perform well, while our digital portfolio sustained strong double-digit growth.”
— Soumen Ray, Chief Financial Officer
Bharti Airtel is successfully scaling its financial services division, showing a significant monthly loan disbursement rate and steady growth in its payments bank. This diversification into finance provides a higher-margin revenue stream that leverages the existing massive customer database.
“Airtel Finance, the storefront of our financial services business, continues to scale strongly, with the monthly loan disbursement run rate now at about 770 crores. This momentum is underpinned by the strength of our digital platforms, advanced data analytics capabilities, and disciplined operating model. Together, these capabilities provide our NBFC with a strong foundation to democratize access to financial services at scale. Airtel Payments Bank, the third pillar of our financial services portfolio, continues to deliver strong growth, deepening its reach and engagement with customers. It ended Q2 with more than 125 million monthly transacting users. The annualised revenue run rate is now over 3,500 crores, growing 9% year-on-year.”
— Soumen Ray, Chief Financial Officer
Management is prioritising high-quality fibre-to-the-home installations over wireless fixed-access solutions to ensure better customer retention. This strategy focuses on long-term value and lower churn by bundling multiple household services into a single integrated plan.
“We have scaled back our FWA-led expansion, and it will serve only as an interim solution to capture demand until we can fiberize a particular area. Encouragingly, these actions are already translating into improvements in our portfolio quality and customer durability. Convergence remains a key differentiator of our Home strategy. The One Airtel plan brings our services together in a unified experience, offering customers greater convenience and flexibility. As adoption grows, convergence is deepening our customer relationships, driving engagement across our portfolio, and strengthening customer lifetime value.”
— Shashwat Sharma, Chief Operating Officer
The CEO is taking a cautious approach to the ‘GPU as a service’ hype, noting the financial risks of simply leasing hardware to smaller players. Instead, the focus is on building sophisticated software layers and internal AI use cases that provide more sustainable competitive advantages.
“On GPU as a service, I think there are 3 parts to this business. The first is GPU bare-metal leasing, which is a commoditized business. There is currently some froth, and it is simply a capex-to-opex gain. Counterparty risks remain, given the amount of demand, particularly among the smaller players. GPU as a service is where some software and orchestration need to be done, as some of the new clouds do. That is an area that we are currently studying. The third part is AI, where we are building for our own use cases. For example, one of the things we have worked on is optimizing model costs within Airtel’s use of AI, and we have built a platform that allows us to do that.”
— Gopal Vittal, Managing Director and CEO
Management is willing to accept temporary profit pressure in the home broadband segment to build out a high-quality fibre network. This long-term focus on infrastructure quality is intended to create a more stable and high-paying customer base over time.
“If you look at home broadband, I view this business as being in the acquisition and growth phase. We are doing everything we need to do to expand this business properly. We are expanding it, and significant investment has gone into fiber as well as CPEs, which are the 2 major capex components. As a result, EBIT has looked somewhat softer. Also, as I mentioned last quarter, we had seen some issues in the quality of acquisitions at low ARPUs and similar matters in the market for a couple of quarters. We are now correcting those issues, which also affected the short-term EBIT performance of this business. However, I would look at the larger picture and say that this is an investment phase for the business, and we really have to accelerate further.”
— Gopal Vittal, Managing Director and CEO
Leadership identifies moving to a consumption-based pricing model as the most critical change needed for long-term profit growth. If successful, this shift would transform data usage from a cost burden into a direct driver of revenue growth.
“On how we monetise data consumption per subscriber going forward, I think it goes back to what we discussed earlier. We had a detailed discussion on what needs to be done regarding pricing architecture. The consumption has to be priced appropriately. People who consume that much data must pay for it. I think that is the shift the industry will eventually have to make. If we are able to make that shift, it gives us organic, consumption-led ARPU growth, which can sustain us for many years to come. For me, that is a pivotal shift that we need to make.”
— Gopal Vittal, Managing Director and CEO
The enterprise business is seeing double-digit growth as digital services like cloud and cybersecurity offset the decline in older messaging services. This portfolio shift suggests that the company’s B2B segment is successfully modernising its revenue mix.
“When you look at the 11.5% growth we have achieved, you can see that there is an acceleration on the digital side, which is compensating for some of the managed decline in core commodity messaging and related services. A couple of quarters ago, this growth used to be about 7%. Therefore, you can see movement in the trajectory, and our hope is that this continues over the coming years.”
— Gopal Vittal, Managing Director and CEO
Metals
Tata Steel | Large Cap
Tata Steel is a top-tier global steel producer with significant integrated operations in India and primary production facilities in Europe. The company is currently transitioning its UK operations to low-carbon electric arc furnace technology while aggressively expanding its Indian capacity.
[Concall]
The company managed to increase its profit margins despite massive jumps in fuel, freight, and raw material costs caused by geopolitical tensions. This resilience shows that operational improvements are successfully offsetting global supply chain disruptions.
“Tata Steel delivered an improved performance in a seasonally softer quarter, despite significant cost inflation across the value chain due to the ongoing conflict in West Asia. Since the conflict started, oil and freight rates have risen by about 40%, and spot coking coal prices have also moved from about $235 to $280, although they have come down somewhat in the last few days. Key inputs used in value-added and downstream products, such as zinc, have also gone up. The disruption has also resulted in higher logistics costs through elevated vessel charter rates, demurrage charges, and insurance premiums across key shipping routes, while currency movements in India have also added to the cost pressures. At the same time, Chinese steel exports continue to be over 10 million tons a month, and that has an impact on global trade flows. However, we were able to successfully navigate this higher-cost environment and generate close to 90 bps improvement in EBITDA margin, from 15% in Q1 to 16% in Q2 on a consolidated basis.”
— T.V. Narendran, CEO & Managing Director
Tata Steel’s retail division has reached a massive scale with a presence in almost every district in India. The new capacity expansion at Neelachal is specifically designed to feed this high-margin consumer segment.
“Our flagship retail brand, Tata Tiscon, grew 13% year-on-year, supported by a distribution network that reaches nearly 97% of India’s districts. In the last 12 months, Tata Tiscon sold 2.7 million tons to around 500,000 customers. Embedded within Tata Steel, we now have a Tata Tiscon retail franchise of about $1.8 billion. The recently commenced 4.8 million ton-per-annum Neelachal expansion will support further growth of our retail business.”
— T.V. Narendran, CEO & Managing Director
The restart of a key processing plant in the Netherlands has immediately boosted European profitability and resolved environmental regulatory concerns. This recovery is vital for the group as the facility produces higher-value products that improve overall margins.
“In the first quarter, we effectively lost almost the entire output of this facility, which represents around 1.4 million tons of annual processing capacity and is about 18% of the total volumes in the Netherlands. The plant successfully restarted in early August under the terms of the agreement with the regulator and is presently operating at rated capacity, subject to periodic review. Importantly, the technical measures implemented are delivering the intended outcomes, with chromium-6 emissions reducing materially and currently remaining below prescribed limits. The significance of the restart extends beyond volumes. It strengthens our product mix, improves the efficiency of integrated production, and lowers conversion costs. As a result, EBITDA increased from 4 million in the first quarter to 72 million in the second quarter, both in euro terms. The EBITDA increase translates to about 56 euros per ton.”
— Kaushik Chatterjee, ED & CFO
The company is dramatically increasing its external sales of iron ore to 10 million tons this year to monetize its vast mining reserves. This shift provides a significant new revenue stream that leverages the company’s captive raw material advantage.
“Iron ore sales are very much part of our plan, and I think this year, Koushik, if I remember correctly, we will be doing about 8 million tons or something like that. About 10 million tons. Yes, about 10 million tons of iron ore sales. Last year, I think we did about 2 million tons or something. So that is very much part of our plan, and we optimize the qualities of ore that are available for our use as well as what is available for sale. We will continue to grow that side of the business going forward.”
— T.V. Narendran, CEO & Managing Director
When Indian steel is finished in UK plants, the total profit for the group reaches 13,000-14,000 rupees per ton. This combined profit margin explains why the company continues to support the UK business during its technological transition.
“The reason I made that comment is that today we supply a significant part of the substrate from India to the UK until the EAF is built. If you look at the combined profitability or EBITDA of the volume supplied from India to the UK, the part in India makes about 8,000 rupees per ton of EBITDA. It then goes to the UK for subsequent rolling, finishing, downstream operations, and so on. For the same coil, if you extend it further, as of last quarter it was about 5,000-6,000 rupees per ton. Therefore, if I add the two, it is somewhere around 13,000-14,000 rupees per ton. That is the reason I said it is an extension. This will change once the EAF comes in because then profitability will be measured based on the cost of steel that the EAF makes and the rolling that it does.”
— Kaushik Chatterjee, ED & CFO
Steel prices in India and the UK are trending significantly higher for the next quarter, which should drive better earnings. While the Netherlands will see a slight dip due to the specific mix of products sold, underlying prices there are also rising.
“In India, we expect realizations to be about 3,500-3,600 rupees per ton higher in Q3 compared with Q2. In the UK, they will be about 28-30 pounds per ton higher in Q3 compared with Q2. In the Netherlands, while at a product-to-product level it will be about 30 euros higher, because of the mix that we are selling, we expect it to be about 11—not pounds, 11 euros—lower in Q3 compared with Q2. This is because of the mix rather than the product-to-product level, where it is about 30 euros higher. Annual contract benefits will only come from Q1 next year, while the contracts are being negotiated this quarter.”
— T.V. Narendran, CEO & Managing Director
The company is prioritizing growth over extreme debt reduction, aiming to keep its leverage ratio between 2.3 and 3 times earnings. This strategy ensures they can keep investing 20,000 crores annually into expanding their high-margin Indian capacity.
“Below 1.5x is never our target. It happened in FY22, when the market was different. But if we are spending 20,000 crores on capex, I do not think that is our target. We have always said that our debt should be less than 3x. We are comfortable at 2.3x-2.4x. EBITDA growth will continue because of additional volumes coming in. Next year, we will have more volume because all our plants in India will be at capacity. We expect more stabilization in the Netherlands and the UK, and then we will spend more and more in NINL and elsewhere. From an absolute debt perspective, debt has to be related to EBITDA. As long as we are in the 2.3x-3x zone, we should be fine because we will pursue growth. If we pursue growth, there is a timing issue between the deployment of capital and the earnings.”
— Kaushik Chatterjee, ED & CFO
Hindalco Industries | Large Cap
Hindalco Industries is a global leader in aluminum and copper, specializing in high-value downstream products and sustainable recycling through its subsidiary Novelis. The company maintains a strong integrated business model with significant upstream capacity and a growing focus on specialty applications.
[Concall]
Management is highlighting that a majority of their earnings now come from segments that do not fluctuate based on global metal prices. This structural shift provides more stable and predictable profits for investors regardless of commodity market volatility.
“On slide 17, it is encouraging to see earnings from our non-LME-linked businesses, namely Novelis, aluminium downstream, and copper, continuing to grow and reaching 6,860 crores this quarter, with momentum continuing to accelerate. These businesses have a much lower correlation to LME price movements and are driven by factors such as value-added products, recycling, innovation, customer relationships, and operational performance.”
— Satish Pai, Managing Director
The copper division achieved record profits this quarter due to high demand and strong prices for by-products like sulphuric acid. Management expects the business to maintain a steady quarterly profit of 1,200 crores moving forward, establishing a new higher baseline for the segment.
“Copper performed exceptionally well during this quarter, delivering another strong set of results. Overall metal shipments were at 116 KT, up 2% year-on-year, while CCR volumes were stable at 96 KT. Quarterly copper EBITDA reached a record 1,673 crores, a significant 164% increase year-on-year, driven by strong operational performance and healthy domestic demand across segments despite elevated LME prices. In addition, higher realization from sulphuric acid and other by-products, along with certain one-time gains, further supported earnings during this quarter. Copper is expected to deliver underlying quarterly EBITDA of around 1,200 crores on a sustainable basis, underscoring the strength and resilience of this business.”
— Satish Pai, Managing Director
The massive new Bay Minette plant has reached a critical technical milestone by producing its first trial product. Investors should look for commercial sales to start in early fiscal 2028, which will significantly boost the company’s global production capacity.
“We also achieved a major milestone at Bay Minette, where our 600 KT greenfield rolling and recycling facility produced its first cold-rolled coil in September. Commercial shipments are expected to commence in the first quarter of FY28. Bay Minette will further strengthen our operating footprint, expand our recycling capabilities, and position Novelis for the next phase of long-term profitable growth.”
— Satish Pai, Managing Director
Management has outlined a clear timeline for commissioning several major expansion projects over the next few years. They plan to phase these investments to ensure the company’s debt levels remain within safe limits.
“Pinakin, I think our focus right now is to get the first set of projects completed. Just so that we can recap, the copper recycling plant in Pakhajan will be commissioned in December of this year. Then, starting with the alumina plant at the Aditya refinery, which will be commissioned in December 2027, the 180 KT Aditya first line will also be commissioned in December 2027. These 3 big projects are our focus. Then the next Aditya line will be commissioned in December 2028, and the copper smelter will be commissioned in December 2028. So this is part of that first 50,000 crores. In Mahan, the Mahan expansion is now going through the EC process, and we are trying to get the licensing and everything sorted out. That will be the next big project. Then, of course, we have the downstream copper recycling expansion from 50 KT to 150 KT. So it will be fair to say that every 1.5 years we will be starting one more project. What we are trying to do, Pinakin, is stay at consolidated net debt to EBITDA of about 2, which is the level we have committed to you.”
— Satish Pai, Managing Director
The company has locked in selling prices for nearly 30% of its aluminium production for the next year at favourable rates. This hedging strategy protects a portion of its income if global market prices happen to fall.
“For H2 of FY27, the remaining 6 months, we are hedged 29% at $3,000 per ton. If we now go into FY28, we are about 26% hedged at 3,168. That is our position. MJP had spiked up, but I think MJP is correcting. I think Q3 MJP is already about 270, and we expect MJP to be in the $200 to $250 range in Q4.”
— Satish Pai, Managing Director
The company is investing heavily in long-term capacity because they expect Indian demand to significantly outpace global growth. By owning their own mines, they aim to be one of the lowest-cost producers globally, protecting them during market downturns.
“Fundamentally, you have to take a 10-, 15-, or 20-year view of these things. We think that aluminium demand in India is going to grow at 7-8%, which is fairly conservative. Globally, it is 2-3%. It is also very clear that nobody in the Western world is adding any smelting capacity. So the only places left are India and Indonesia. If you look at our cost curve, Satyadeep, once Chakla, Bunder, and Meenakshi are running, we will have locked in our cost curve at very attractive levels, except for CP coke. LME prices can swing up and down, but we will be the last man standing. So yes, we think that taking advantage of the backward integration of bauxite and coal is the reason why we should make the investment.”
— Satish Pai, Managing Director
Profits per ton in the aluminium downstream business are expected to rise as the company starts selling more specialised products for batteries and packaging. Reaching the $300 per ton target would signal a successful move toward higher-margin manufacturing.
“It should start to increase because we are qualifying quite a few products in Aditya FRP right now. Aditya FRP is now at the 50% loading level. In the next 2 quarters, we would like to get many products through qualification, including battery foil, ULGE foil, and can body stock. As those volumes increase, EBITDA per ton should cross 300.”
— Satish Pai, Managing Director
Consumer Durables
LG Electronics India Ltd. | Large Cap
LG Electronics India is a leading manufacturer of home appliances, home entertainment, and business solutions products with a history of nearly 30 years in the Indian market. The company operates multiple manufacturing facilities and is currently diversifying into high-growth sectors like vehicle solutions and global exports.
[Concall]
The company has launched a specific ‘Essentials’ series to target the growing middle class and first-time buyers who face unique infrastructure challenges. This strategy broadens the customer base and establishes brand loyalty early in the consumer’s upgrade cycle.
“In India, home appliance ownership is still relatively low, while the middle class continues to grow. As a result, more first-time customers are entering the market. At the same time, demand for premium products continues to increase. To meet these needs, LG continues to lead the premium market. We have also launched the LG Essentials series, designed for the needs and living conditions of Indian customers. Through this series, we are reaching a wider group of customers. For example, we offer fully automatic washing machines that work well even with low water pressure. We also offer double-door refrigerators that automatically adjust their cooling temperature to changes in the outside temperature. By providing these essential features, we are getting closer to customers who are buying their first home appliances.”
— Hong Ju Jeon, CEO
Management is pivoting the company beyond traditional home appliances by entering the automotive electronics and telematics sector. This diversification into the B2B segment leverages global technology to tap into India’s rapidly evolving automotive supply chain.
“Vehicle solutions is one of LG Electronics’ key global B2B businesses, covering automotive infotainment and telematics products. We will bring these products to India and plan to manufacture and supply them from our third plant in Sri City. This is an important milestone in our journey beyond consumer electronics and home appliances. It will also strengthen our position in the fast-growing B2B market. We expect this business to become another growth engine for LG Electronics India Ltd. It will help us expand our business portfolio and create long-term value for our shareholders. For almost 30 years, LG has been part of everyday life in Indian homes. Now we want LG to be part of everyday life on Indian roads as well.”
— Hong Ju Jeon, CEO
The company has significantly increased its capital expenditure to build a massive new manufacturing hub in Andhra Pradesh. This investment will double production capacity, supporting both the growing domestic market and the company’s aggressive export ambitions.
“On capital expenditure, we invested a meaningful INR 8.7 billion during the quarter towards tangible assets, compared to INR 2.3 billion in Q2 of FY26, as work on our ambitious state-of-the-art manufacturing facility at Sri City, Andhra Pradesh, continues to progress steadily and in line with our internal targets. Backed by a committed investment of INR 50 billion over the next few years, Sri City will become our third and most advanced manufacturing base, which will double our existing production capacities and serve as a dedicated hub for both domestic and export markets.”
— Atul Khanna, Chief Accounting Officer
Management adopted a surgical pricing strategy by absorbing raw material cost increases in mass-market segments while passing them on to premium products. This approach allowed the company to maintain volume growth and gain market share without sacrificing overall profitability.
“On margins, we did something a bit different this year. Rather than raising prices across the board, we went category by category, absorbing the rise in copper, aluminum, and plastic costs in more targeted ways. We also moved early, ahead of the rest of the industry, and we were careful to protect our mass segment while letting our premium range carry more of that burden. That discipline, combined with strong operating leverage from volume growth across the categories, is exactly why segment EBIT grew a healthy 28.4% to INR 4.16 billion, with the margin improving to 8.7% from 8.2%, even in a cost environment that was challenging for the entire industry.”
— Rajesh Gupta, MD & CEO
The television segment is benefiting from a structural shift toward larger screens, which is boosting margins through a better product mix. Despite higher input costs for memory chips and currency volatility, volume growth and premium sales have driven record market share.
“The real story here is a shift in what Indian households want in their living rooms. Indian consumers are moving towards larger screens, and we do not think this is a one-season spike. It looks like a structural change, and we believe we are still early in that curve. Our offline value market share climbing to an all-time high tells us we are capturing our fair share of this upgraded cycle. On margins, we were managing a genuine balancing act this quarter. There were elevated memory chip and currency pressures on one side and the need to invest in go-to-market activity to win shelf space ahead of the festive season on the other. Segment EBIT still grew a healthy 19.9% to INR 3.37 billion, with the margin improving to 12.9% from 12.6%, helped by strong volume growth that gave us real operating leverage, on top of a richer mix of larger screen sizes that lifted margins rather than relying on price increases alone.”
— Rajesh Gupta, MD & CEO
The air conditioning segment is seeing a breakdown in traditional seasonality, with off-season sales actually exceeding typical peak periods due to rising temperatures. Management expects the second half of the year to be even stronger as new localised production comes online.
“RAC is perhaps the most interesting phenomenon we are seeing this year, because our Q2 sales were better than Q1 despite Q2 being the off-season. This was mainly driven by elevated temperatures across many parts of India. For LG, Q4 is our biggest RAC sales period, during which we do roughly 55% of our yearly sales, and we believe that the current momentum will continue into Q4 as well. To meet this demand, our Sri City plant is getting ready to deliver the new range of AI air conditioners with in-house compressors. We believe that the coming 2 quarters will be better than the first half of this year.”
— Sanjay Chitkara, Co-CSMO
Localised compressor production will start in the current quarter, adding 2 million units of capacity and reducing exposure to currency fluctuations. This move toward vertical integration is expected to yield permanent margin improvements and reduce supply chain risks.
“Commercial production of compressors will begin in Q3 of this financial year, and air conditioner manufacturing will follow in Q4, around January 2027. So, by the end of FY27, both lines will be fully operational. On cost benefits, we currently source some compressors from outside LG, and that comes with supply chain risk as well as foreign exchange fluctuation headwinds. Once we start producing locally in our plant, with the additional capacity of 2 million units, those costs will reduce significantly, and the savings will flow directly into our margins. The benefit will build as volumes ramp up, so it is a permanent and growing benefit that will endure for the organization.”
— Atul Khanna, Chief Accounting Officer
The B2B segment currently contributes about 11% of revenue, with a target to reach over 15% within three years through institutional displays and commercial cooling. Growth in corporate office and hospitality infrastructure is providing a strong pipeline for these long-term contracts.
“Our B2B business has continued to grow well, and our ambition of more than 20% growth over the long term remains intact. This business is something in which we are investing, and we see it as one of the most important growth engines for LG India over the next several years. Within B2B, institutional displays are our strongest-performing segment right now, with commercial TV leading the way. We are seeing very good traction in corporate offices, retail, hospitality, and public spaces. System AC is the other segment that is growing well for us, specifically in large commercial projects. Today, B2B is approximately 10-12% of our total revenue, and over the next 3 years our goal is to meaningfully grow this share. We believe 15% plus is achievable.”
— Aditya Bhasin, Head Investor Relations
Energy
Oil and Natural Gas Corporation Limited | Large Cap
ONGC is India’s largest crude oil and natural gas company, contributing significantly to the nation’s domestic production through extensive offshore and onshore assets. The company operates a vast portfolio of exploration and production projects both within India and internationally through its subsidiary, ONGC Videsh.
[Concall]
ONGC achieved record-breaking financial results for the half-year, driven by strong crude oil price realisations and revenue growth. This performance allowed management to reward shareholders with the highest-ever interim dividend payout in the company’s history.
“We reported standalone gross revenue of 43,875 crore, an increase of over 33% over the corresponding period of last year. Our average crude realization for the nomination fields during the quarter was US dollar 92.33 per barrel. Standalone profit after tax stood at 15,489 crore, registering robust growth of over 57% year-on-year. Riding on the strong earnings momentum, the company also posted its highest-ever H1 profit after tax of 32,522 crore. The Board also declared its highest-ever interim dividend of 160%, that is, 8 rupees per share, with a total dividend outgo of 10,064 crore.”
— Anupam Agarwal, Director Finance
The transition to a more favourable pricing regime for gas produced from new wells is significantly boosting ONGC’s top-line revenue. This incremental pricing benefit is becoming a core driver of the company’s gas business profitability compared to legacy regulated rates.
“During H1 FY27, ONGC generated revenue of 7,050 crore from new-well gas, realizing an incremental 2,859 crore compared to the APM gas pricing regime, accounting for over 34% of the company’s nomination gas revenues. New-well gas continues to strengthen ONGC’s earnings profile.”
— Anupam Agarwal, Director Finance
Management is expanding its technical partnership model to arrest production declines in mature offshore fields following positive early results at Mumbai High. This strategy is critical for sustaining production volumes from the company’s legacy assets while newer projects come online.
“The TSP, that is, the Technical Service Provider program at Mumbai High, continues to deliver encouraging results, with green shoots visible in Mumbai High production and demonstrating the positive impact of the interventions undertaken. Building on this success, ONGC is moving ahead with a larger drilling and intervention program aimed at further enhancing production from the field. The TSP program for the remaining western offshore assets, primarily the Neelam and Heera and satellite fields, was awarded during the last quarter. Teams have been mobilized and detailed work plans are being finalized, with implementation expected to support production enhancement and arrest natural declines in these mature fields.”
— Management, Executive Team
The company has committed substantial capital expenditure to two major offshore projects intended to secure production growth over the medium term. Investors should monitor these projects as they represent a significant portion of the company’s future hydrocarbon volume potential.
“ONGC reinforced its long-term growth pipeline during the quarter by awarding two major western offshore development projects with a combined investment of approximately 11,800 crore and an estimated hydrocarbon potential of 22 million metric tons of oil equivalent. The projects covering MBO-OSN-2005/1 SP-4, MB-S-17, and the additional development of Ratna-1 and Neelam-14 are expected to be completed over the next 2 to 2.5 years.”
— Management, Executive Team
ONGC is intensifying its deepwater exploration efforts under a new government scheme and expanding its drilling fleet to explore frontier basins. Successful monetisation of these discoveries through new pipeline infrastructure could provide a long-term catalyst for gas production growth.
“A significant policy milestone during the quarter was the issuance of detailed operational guidelines for the Samudramanthan Mission offshore exploration scheme. To support this, ONGC is scaling up its deepwater drilling capabilities. One deepwater rig is already operational in the Mahanadi basin, while a second deepwater rig is expected to be mobilized during this financial year. We are also encouraged by the gas discoveries in the Vindhyan region. With the commissioning and expansion of the IGGL gas pipeline network, these stranded gas resources are expected to be monetized, contributing to ONGC’s future production growth.”
— Management, Executive Team
The company recorded a large one-time provision for a disputed excise duty receivable, which masked some underlying improvements in operational efficiency and currency management. While the provision impacted current earnings, it reflects a conservative accounting approach toward ongoing litigation.
“Higher other expenditure was actually due to a case relating to terminal excise duty receivable from DGH for 1,861 crore, and this is already under litigation at the High Court level. Although we are confident that we should win this case, as a matter of conservatism, we have provided for that amount because the court’s decision is still pending. That, coupled with a decrease in opex by 609 crore and a decrease in exchange loss by 625 crore, resulted in a net impact of approximately 600 crore increase in other expenses.”
— Management, Executive Team
The flagship KG-basin project has encountered geological challenges and weather-related delays, resulting in production levels that are currently below peak expectations. Management’s revised timeline for well connections will be a critical monitorable for volume growth in the second half of the year.
“Regarding KG-DWN-98/2, if you remember, during the last investor call and the subsequent press meet, we had said that we were seeing some subsurface surprises—subsurface surprises. Today, in oil terms, we are seeing production of approximately 19,000 barrels per day. Gas from the wells was expected to be connected this quarter, but the offshore area was facing the monsoon season and there was recently a Arnav there, which disrupted the project schedule. We are now expecting those wells to be completed by the next quarter.”
— Management, Executive Team
ONGC is consolidating its petrochemical marketing into a single entity to eliminate internal competition and improve pricing power across its subsidiaries. This move is expected to drive better margins through logistical efficiencies and a unified brand strategy.
“Regarding the new initiative, we are forming a joint marketing company for petrochemicals between OPaL, ONGC, and MRPL. We have a significant petrochemical portfolio. At present, these companies were marketing the same product in the same market under different brand names and at different prices. We were seeing significant losses in terms of the marketing discounts they were required to offer. As a group strategy, we have decided to come together and establish a single umbrella marketing framework. This new company will market the products of all 3 companies together. This will result in a significant reduction in marketing costs and supply-chain costs. We will also be in a better position to hold prices in this arrangement.”
— Management, Executive Team
Management is pursuing a long-term strategy to import ethane from the US to lower feedstock costs for its petrochemical operations at OPaL. Securing a cheaper, consistent feedstock is vital for the long-term economic viability and profitability of the OPaL plant.
“At the same time, the ONGC Group is trying to obtain ethane from the USA. We have already contracted 2 ships, which are under construction and will be delivered in the early part of 2029. We are also in discussions with US companies to tie up long-term ethane prices. With ethane tied up as a feedstock for the project, OPaL will see much better days ahead.”
— Management, Executive Team
Significant capital infusion and debt restructuring have been undertaken to stabilise the financial health of the subsidiary OPaL. Reduced interest expenses and a cleaner balance sheet should help the petrochemical business reach a turnaround more quickly.
“Over the last 2 years, the ONGC Group has taken many steps to make OPaL viable. Capital restructuring was carried out, and 18,000 crore was infused into it. A significant amount of costly debt has been eliminated, and at the same time, ONGC is also supporting the company by helping it obtain loans at much more viable rates. Therefore, the financing cost is coming down.”
— Management, Executive Team
The major LNG project in Mozambique is back on track after a long suspension, with financial drawdowns set to begin soon. This project is a massive international investment for ONGC and is a key driver of long-term gas volume growth for the group.
“In this project, we have invested approximately 7 billion dollars to date, and the project is progressing well. This project was under Force Majeure for a 4-year period. Last year, the Force Majeure was lifted, and activities are proceeding at full speed. Approximately 49% completion has already been achieved. The sovereign guarantee from the Government of Mozambique has also been approved by its Cabinet, and we expect drawdown on the project to start sometime in the next month onwards.”
— Dr. Prabindra Singh Negi, Chief Treasury and Investor Relations
ONGC is transitioning to an operator role in its Venezuelan projects after obtaining critical regulatory clearances. Direct control over operations and production offtake is expected to improve the company’s ability to recover value from these assets.
“In San Cristobal, with PDVSA, the national oil company of Venezuela, we are the sole partner. Discussions are ongoing, and we are trying to establish a new type of operating arrangement under which we will take operatorship and run the project. In Petro Carabobo, there are other partners as well, such as Repsol. We have obtained the necessary approvals and OFAC clearances for this new arrangement. We will be the sole operator in San Cristobal and the joint operator in Petro Carabobo. We are ready to start working on those fields.”
— Dr. Prabindra Singh Negi, Chief Treasury and Investor Relations
The new operating model in Venezuela provides ONGC with direct rights to the oil produced, resolving previous issues where dividends were stuck. This change is a significant de-risking move for the company’s exposure to high-risk geographies.
“Under the new arrangement, we will have offtake rights. We will operate the project, take off the production, and sell it. We will also discharge various fiscal-regime-related responsibilities to the Government of Venezuela, and the remainder will belong to us. The pre-agreement matters will continue to be discussed, and we will try to determine how that amount can be settled. It may form part of the new arrangement under the agreement we are signing, or it may be settled through a separate set-off arrangement.”
— Dr. Prabindra Singh Negi, Chief Treasury and Investor Relations
Management intends to maintain a consistent capital expenditure program and dividend payout ratio of approximately 40%. This balanced approach suggests that the company is prioritising both growth investments and stable returns to shareholders.
“We have been incurring capex of approximately $3.5 to $4 billion per year, and we plan to continue. At the same time, we are exploring various diversification opportunities, and if anything materialises, we will pursue it. Regarding dividends, we generally pay approximately 40% or so. At this stage, we will not be able to say anything more, but we plan to continue with dividends at around that level.”
— Management, Executive Team
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