The Chatter: Short-Term Pain, Long-Term Gain
Edition #28
Welcome to the 28th edition of The Chatter — a weekly newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 15 companies across 8 industries, along with some international features.
FMCG
Bikaji Foods
Hindustan Unilever
Auto Ancillary
Bajaj Auto
Maruti Suzuki
Engineering & Capital Goods
Data patterns
Ceigall India
Services
Felix Industry
Retail
V-Mart Retail
Financial Services
HUDCO
Cement
Adani Cement
Real Estate
WeWork India
International
Synaptics Incorporated
NIKE, Inc.
Accenture plc
Genpact Limited
FMCG
Bikaji Foods | Small Cap | FMCG
The Government of India reduced GST on traditional and ethnic snacks from 12% to 5%, covering nearly the entire portfolio of companies like Bikaji. Understanding the volume elasticity and pass-through strategy is critical to assessing H2 FY26 growth.
“We expect a good volume growth compared to the first half. Our estimate is an incremental 2-3% volume growth once the new rates come into effect.”
– Rishabh Jain, CFO
The breadth of GST benefit across Bikaji’s product portfolio determines the magnitude of pricing advantage versus competitors and potential market share gains in the ethnic snacks category.
“The move, aimed at simplifying tax structures and easing costs for consumers, covers nearly 90-94% of Bikaji’s portfolio, including its core offerings like bhujiya and namkeens.”
Management’s decision to pass on “most of the benefit” to consumers (rather than protecting margins) signals an aggressive volume-driven strategy to gain market share during the transition period.
“While nothing major has been changed on GST from the input lens, most of the benefit will be passed on to the consumers.”
Bikaji’s strategic pivot from pricing-led growth in H1 to volume-led expansion in H2 reflects management’s confidence in demand elasticity and festive season tailwinds combining with GST benefits.
“While the first half of the year focused more on pricing adjustments, the second half will shift towards volume-led expansion, supported by increased demand during the festive season.”
The 10-11% volume growth target for FY26 represents a significant acceleration from recent quarters, indicating management’s bullish view on GST-driven consumption uptick and market penetration opportunities.
“For the full fiscal year 2026, Bikaji expects overall volume growth of around 10-11%. This is attributed to a combination of factors, including the favorable GST revision and a growing consumer base.”
With only 50% capacity utilization, Bikaji has significant operating leverage to absorb volume surges without major capex, which should aid margin expansion if demand materializes as expected.
“Currently, utilisation of manufacturing capacity stands at roughly 50%, giving it sufficient headroom to meet the expected spike.”
The transition period before GST rate implementation creates channel inventory disruption. Distributors destocking under old tax regime and subsequent restocking at lower prices will create short-term volatility in offtake patterns.
“Distributors are cautious in the run-up to the change, building lower inventories to avoid carrying excess stock purchased under the old tax regime. Unsold stocks will likely be offloaded at lower prices, as distributors aim to pass on benefits to consumers. It’s a tough situation for the trade, but once the new GST rates come in, demand will shoot up.”
GST rationalisation eliminates the input-output tax differential that formed the basis for state-level investment incentives. This could impact capex ROI for companies that expanded manufacturing based on these schemes.
“With GST rationalisation, state-level investment subsidies previously linked to GST input-output differences are expected to vanish. He called on the government to consider converting these into turnover-linked subsidies, especially given the substantial capital investments companies like Bikaji have made in the sector.”
Input cost stability (except edible oils) provides tailwind for margin expansion when combined with volume leverage. Edible oil volatility remains a key risk given its significant share in snacks manufacturing cost structure.
“The raw material situation has largely stabilised, with the exception of edible oils, which remain volatile. Other than edible oil, everything has been controlled this year. Crop yields were good, and we are seeing comfortable input prices overall.”
Hindustan Unilever | Large Cap | FMCG
The Government of India implemented revised GST rates, reducing taxes on essential FMCG products from 12%/18% to 5%, affecting a significant portion of HUL’s product portfolio.
“The latest GST reforms are a positive step by the Government to drive consumption. With the revised GST rates, approximately 40% of our portfolio including Toilet Soap, Toothpaste, Shampoo, Hair Oil, Talcum Powder, Lifestyle Nutrition and other Foods now benefit from a reduced GST rate of 5%, down from the previous GST rates of 12% or 18%.”
Management outlined their approach to implementing the GST benefit and the timeline for price adjustments.
“HUL remains committed to supporting the Government’s efforts by ensuring that the GST benefits are being passed on to consumers through competitive pricing and enhanced value across a wide range of products from 22nd September onwards. These reforms are expected to increase disposable income and drive long-term demand across key categories.”
The implementation of new pricing created temporary chaos in the distribution network as stakeholders adjusted to the new price points.
“While this measure supports long-term consumption, we have seen a transitory impact in the form of disruption at distributors and retailers across channels to clear existing inventories with old prices. This has resulted in postponement of ordering in anticipation of receiving new stocks with updated prices and lower orders across the overall portfolio as consumers delayed their pantry buying.”
The immediate consequence of the channel disruption manifested in reduced sales during September 2025.
“This has led to a short-term impact on sales for the Company in September. Given our existing pipeline inventory in the channels, we expect this impact to continue into October as well.”
Management provided preliminary guidance for the quarter ending September 30, 2025, ahead of the official results announcement scheduled for October 23, 2025.
“Due to the aforesaid context, we expect the consolidated business growth to be near flat to low-single digit for the quarter ending 30th September 2025, basis current view.”
Management characterized the disruption and provided visibility on when normalization is expected.
“This is a one-off, transitory impact, and we anticipate recovery starting November as prices stabilise, underpinned by rising disposable incomes and our ongoing portfolio transformation actions.”
Auto Ancillary
Bajaj Auto | Small Cap | Auto Ancillary
Bajaj Auto reported strong September sales. Understanding whether October can sustain or improve upon this momentum is critical, especially given the GST rate cut timing and festive calendar.
“I think October should be better than September because in October we will realize the full impact of the GST cut, which has a combination of effects. One, there’s more money in the customer’s pocket due to the across-the-board reduction in GST, so there’s more disposable income. Second, the timing was spot on, and sentiment is very positive.”
– Rakesh Sharma, ED, Bajaj Auto
Two-wheelers are discretionary purchases sensitive to sentiment and economic outlook. Management’s framing of shifting consumer mindset from “Why buy now?” to “Why not buy now?” indicates confidence in sustained demand beyond festive spike.
“Motorcycles are a discretionary purchase. When the environment is uncertain, people ask, ‘Why buy now?’ As the environment improves—as it is now—that changes to, ‘Why not buy now?’ These two factors should combine to give us a better October than September.”
The GST announcement created temporary demand suppression in early September as customers waited for lower prices. Understanding how much of September’s late surge was merely deferred purchases versus genuine festive demand helps normalize run-rate expectations.
“In September the first two to three weeks saw a sharp fall after the GST announcement as people held back purchases; some suppressed demand came back in the final nine days. We don’t yet know how much flowed into September versus October, but the setup is good and October retail should be much better.”
Bajaj’s claim of “best Navratri ever” in five years provides qualitative validation of strong underlying demand, even if absolute numbers aren’t disclosed due to competitive sensitivities.
“Looking at the last five years, this is our best Navratri ever. We’re heading in the right direction, but it’s difficult to pin even a range.”
Understanding demand headwinds through August (inflationary pressures, rental inflation for urban consumers) and subsequent sentiment reversal post-GST cut helps assess durability of recovery beyond festive season.
“The key change is positive sentiment. Until August, the industry was in marginal decline, largely due to inflationary pressures—urban consumers faced rental inflation, etc. With the GST cut, there’s more money to spend and a belief the outlook is more benign. That prompts advancement of purchases during the festive period and supports up-trading.”
The shift from entry-level (≤100cc) to higher-segment motorcycles reflects structural improvement in customer purchasing power and Bajaj’s strategy to capture higher-margin premium segment growth.
“Over the last five years, the shift is clear: the ≤100cc segment, earlier ~55%, is now ~48%. The upper half has been growing faster, and the GST cut should reinforce that—customers who are slightly better off can take the leap to a bigger, better bike.”
While most two-wheelers got GST relief (cut to 18%), bikes >350cc saw GST increase from 28% to 40%. Bajaj’s decision to absorb the 12% increase for KTM and Triumph brands signals long-term brand-building priorities over short-term margin protection.
“For the >350cc portfolio, our effective GST moved from 28% to 40%, while the broader cut elsewhere went to 18%. We chose to hold retail prices at the prior 28% regime levels. It’s an investment from our side to avoid distortion just as KTM and Triumph are ramping up with exclusive dealer networks. It wasn’t the right time to raise prices sharply.”
Bajaj’s 15-20% export growth, driven by both market recovery and improved competitiveness, provides revenue diversification and natural hedge against domestic market volatility. Latin America delivering highest-ever quarter signals strong brand positioning in key geographies.
“Exports are doing well—we’re in the 15–20% range. Two factors: markets are coming back, and our competitiveness has improved. We operate in 100+ countries, but ~30 contribute >80% of business—industry-typical. Most of these are on a growth path, and we’re growing at ~1.5× the industry rate. LATAM had our highest ever quarter.”
Continued export momentum (expecting Q3 to exceed Q2) combined with USD appreciation provides both volume growth and margin expansion opportunity for the export-heavy business mix.
“Combining market recovery with our position, the outlook is good. We hope to better Q2 as we move into Q3, and the USD appreciation is helpful for the bottom line.”
Management’s January-February timeline for assessing true GST impact (post-festive seasonality normalization) suggests investors should look beyond Q3 festive surge to Q4 run-rate for evaluating structural demand improvement.
“To gauge the fundamental impact of GST, we’ll likely have clarity by January–February. After the festive frenzy, there’s a natural dip in Nov–Dec; Jan–Feb is when to assess the underlying trend. We’re optimistic it will make a difference from Jan–Mar, provided inflation doesn’t spoil the gains.”
A potential regulatory mandate for ABS (Anti-lock Braking System) across all two-wheeler segments could add ₹3,000-5,000 per vehicle in costs, partially offsetting GST benefits and creating headwind for entry-level segment demand.
“A specific watch-out for two-wheelers is the potential ABS mandate across all classes—if implemented, added costs could push back some GST benefits. So we’re optimistic near-term and longer-term, but mindful of inflation and regulatory cost additions.”
Maruti Suzuki | Large Cap | Auto Ancilliary
Maruti reported strong wholesale numbers in September, coinciding with the Navratri festive period. Investors want to understand if demand is genuinely robust or if supply constraints limited even better performance.
“The growth has been pretty good. As you rightly mentioned, in retail we saw a growth of 27.5%. This was one of the best Navratras we’ve seen in the last 10 years, where in the first 8 days we delivered close to 1.65 lakh vehicles.”
Strong demand often leads to waiting periods and delivery delays. Management’s willingness to ramp up production signals confidence in sustained demand beyond the festive spike.
“Our supply chain and production teams are working very hard. In fact, in October we are going to work on Sundays and some holidays to serve our customers. The endeavor is to deliver vehicles as quickly as possible.”
Maruti has historically been viewed as a small car company losing market share to the SUV boom. Understanding which segments are driving growth is critical to assessing the company’s product portfolio relevance.
“We are seeing traction across all segments — it is not only one category driving growth. Specifically, for small cars we are seeing around 50% growth in bookings. Across all segments, growth has been healthy at about 35%. For SUVs also, we are seeing growth of over 30%.”
September benefited from Navratri. With Dussehra and Diwali falling in October, investors need visibility on whether momentum continues or if sales were merely pre-bought.
“The endeavor is always to set a new benchmark. As I mentioned, this Navratra has been a record for Maruti over the last 10 years — performance has never been this strong. We are looking forward to healthy and very good sales in October as well.”
Maruti has been building its export business as a growth lever beyond saturated domestic segments. Strong export growth indicates global competitiveness and revenue diversification.
“All cylinders are firing from the Maruti stable. Exports have also seen fantastic growth — almost 50%. So, whether it’s domestic sales or export sales, both are performing very well.”
Engineering & Capital Goods
Data patterns | Small Cap | Engineering & Capital Goods
Discussing the increased government focus on indigenous defense procurement following Operation Sindoor
“Post the Operation Sindoor, we are witnessing heightened urgency from the government to procure and deploy indigenous defense equipment, some of which aligns well with our capabilities. However, to participate meaningfully in such opportunities, it is critical that companies have fully developed products and complete internal trials before submission. This underscores our strategy. We must build first to be eligible to win.”
— S. Rangarajan, Chairman and Managing Director
Explaining the company’s substantial upfront investment in product development
“We remain deeply committed to R&D and product development. We already deployed over INR120 crores in the new product development activities with a focus on building indigenous capabilities across radar systems, electronic warfare, communication systems and airborne systems... These initiatives align with our long-term strategy to scale our total addressable market, and we’re doing that with discipline and foresight.”
Responding to questions about the company’s strategy of self-funding product development rather than just doing manufacturing or collaborations
“It’s a very hard way of growing. But the only way accessible to us. Otherwise, it’s just only collaboration. So we have taken the hard route and going through what we think we are competent and where there are no such product available in India, so we’re trying to be unique in that and building products and putting our money and effort on this.”
Discussing the strategic shift in business model to address end-users directly
“We are trying to -- we have worked with DRDO for last 25 years. Learned a lot from them and through contracts from them. Today, I think the time has come, not only to look at only DRDO markets. We also have to look at the MoD market, because MoD market now it’s opened up to Indians... So our focus today is to build full -- if you want to build scale, you want to be a INR10,000 crores company, it’s going to be very difficult to do this by making components and subsystems... So the company is changing from a component and subsystem vendor to a system vendor.”
Discussing the jammer pod development and Air Force’s offer to provide Sukhoi 30 for flight testing
“So government is very positive on industry participation in industry-driven R&D. And after delivering validation of the 5 systems in ground, they’re willing to even spend on flight testing on their own, which is a welcome difference in the last 10 years. So we believe we are very well positioned there.”
— S. Rangarajan, Chairman and Managing Director
Explaining the successful flight test of their BrahMos seeker and the potential for replacing all imported seekers
“But most of the seekers now -- all the seekers now are imported seekers for BrahMos, the idea is to make this indigenous. If this happens now, I expect a substantial increase in order as we go around in the coming year.”
— S. Rangarajan, Chairman and Managing Director
Ceigall India | Small Cap | Engineering & Capital Goods
Ceigall India has announced significant order wins in recent months, expanding its order book substantially. Understanding the composition (LoAs received vs. L1 status) and execution timeline is critical to assessing revenue visibility.
“We have bagged ₹3,855 crores worth of projects plus GST. We have received LoAs for almost four projects, and the rest are at L1 stage. We have also added a new vertical in renewable energy and transmission & distribution... With these LoAs and L1s, our order book now stands at close to ₹14,000 crores, which is fairly strong for a company of our size.”
Ceigall is transitioning from opportunistic small-scale renewables and T&D work to creating dedicated verticals, signaling a strategic pivot to diversify away from pure-play road construction and tap into India’s clean energy capex cycle.
“Earlier, we were handling these at a smaller scale — for example, fixing solar plants or T&D for existing projects — but now we have decided to create full-fledged verticals and scale them.”
—- Ramneek Sehgal, CMD
Ceigall is exploring sale of five HAM (Hybrid Annuity Model) projects to InvIT investors. This capital recycling strategy would unlock equity tied up in operational assets and provide funds for future growth without dilution.
“We are always open to such opportunities. We are already in discussions with marquee and large investors. Talks are on, and we’re just waiting for the right price. We’re positive about a transaction happening.”
Understanding typical project durations (2.5-3.5 years for infrastructure, 24-27 months for renewables/T&D) helps model revenue recognition patterns and working capital cycles for the company.
“Typically, projects take 2.5 to 3.5 years. For renewables and T&D, it’s about 24–27 months, plus time for financial closure.”
Delays in financial closure for HAM projects can stall execution and create working capital strain. Ceigall’s completion of financial closure across its entire HAM portfolio de-risks execution and cash flow concerns.
“I’m happy to share that we have completed financial closure for all our HAM projects — not a single one is pending. On the HAM side, except for three projects, all are under execution.”
Management maintains 10-15% revenue growth and 11-12% EBITDA margin guidance despite strong order wins, suggesting conservative forecasting philosophy that prefers positive surprises over guidance cuts.
“What we have guided, we will definitely try to achieve. We prefer to stay conservative and let our results surprise positively when we exceed those numbers.”
With 83% concentration in roads/highways, investors question execution risks and cyclicality. Management highlights expansion into 11 verticals to position Ceigall as a diversified infrastructure contractor rather than pure-play road builder.
“We now operate across 11 verticals. For example, we’re already executing metro projects in Kanpur and Agra. We recently completed a runway in Ludhiana (Halwara). We’re also building one of the country’s longest elevated corridors in Bihar — Danapur–Bihta — worth ₹2,000 crores.”
Ceigall’s presence across 12 states and 11 verticals reduces concentration risk from state government funding delays, regional economic slowdowns, or sector-specific capex cuts.
“Beyond highways and elevated corridors, we are doing specialized structures, metros, and tunnels... Renewables have now been added as a vertical, along with T&D. Geographically, we are present in 12 states, with a well-diversified portfolio across highways, elevated structures, metros, tunnels, bridges, renewables, and more. So, it’s not just about highways anymore.”
Services
Felix Industry | Nano Cap | Services
Responding to questions about profitability expectations
“So, generally what we try to do is we try to touch EBITDA range of about 26% to 28% or somewhere around it. And because of this EBITDA, the PAT is variably in the range of about, let us assume 20% or something, 21% to maybe 23%.”
— Ritesh Patel, Managing Director and Founder
Explaining the technical process and revenue streams at their Oman facility
“In this facility, we have created an oil processing unit, wherein all the waste crude of the refineries is coming in as a raw material to our plant. Out of this waste crude, we are generating oil as a finished product or as a standardized product, which can be sold in the market... So, whatever oil is generated from our factory or from our premises could be sold into market at the market price. So, that is the revenue generation what we are doing today.”
— Ritesh Patel, Managing Director and Founder
Discussing long-term business strategy and focus areas
“So, over the period of time, as and when we are growing, my personal opinion would be that we should always go on infrastructure development like BOOT. So, BOOT is for one plant or one process. We should always have our own infrastructure where, you know, you can cater 20-30 clients altogether. Same kind of energy consumed if we are doing one project and same kind of energy consumed if we are doing some infrastructure project.”
— Ritesh Patel, Managing Director and Founder
Clarifying which business segments generate higher profitability
“No, no. So, EPCs are never the higher margin business. Operating revenue is always the higher margin business because it involves a lot of manpower, a lot of service revenue and a lot of day-to-day activities. So, anytime operating revenues are always the higher revenues.”
Retail
V-Mart Retail | Small Cap | Retail
V-Mart delivered 11% SSSG in Q2, above its guided mid-to-high single-digit range. Given V-Mart’s exposure to semi-urban/rural markets, investors need clarity on whether this reflects genuine rural consumption recovery or festival-driven spike.
“My sense is that we should continue guiding for mid- to high-single digit same-store sales growth for the full year. Half the year is gone, but the real test will be in Q3 — our biggest quarter, with major festivals.”
— Anand Agarwal, CFO
Q3 is traditionally V-Mart’s strongest quarter given its Tier 2/3 market presence where Diwali, wedding season, and winter apparel drive peak demand. Management highlights multiple tailwinds but remains cautiously optimistic given weather disruptions.
“We’ve just closed Durga Puja and are now preparing for Diwali, followed by Chhath, then the marriage season, and a potentially good winter. There are also some tailwinds from GST. For value retail, GST does not play a huge role, but overall consumer sentiment should improve. If winters turn out well, Q3 should be strong, and the full year should shape up positively.”
V-Mart added 40 stores in H1 against full-year guidance of 65 net additions. This aggressive pace in Tier 2/3 markets signals strong execution capability and availability of viable locations in semi-urban India.
“We’re comfortable at 65 net additions. This is after closures — we closed two stores this quarter and a few last quarter. Overall, we’re targeting 70–75 gross additions, with around 5–6 closures, which is normal in this business. So net 65 still feels like the right number, with a slight upside bias.”
Recent GST rate cuts on apparel (12% to 5% for items above ₹1,000) were expected to boost discretionary consumption. Management clarifies V-Mart’s limited exposure given its value retail positioning focused on sub-₹1,000 merchandise for price-sensitive customers.
“Actually, the GST cut doesn’t significantly benefit value retailers like us, because our average selling price is ~₹350. The bigger benefit is in merchandise priced above ₹1,000, which is a smaller part of our portfolio... 80% of your portfolio is below ₹1,000.”
While near-term impact is muted, the GST cut opens up product category expansion opportunities for V-Mart to trade customers up in the ₹1,000-1,500 merchandise bracket—critical for improving ASPs and margins in value retail.
“What the cut does allow is room to experiment more with ₹1,000–1,500 merchandise. Earlier, that bracket had 12% GST; now it’s 5%. That gives us some flexibility to expand offerings in that space. In the short term, there won’t be much impact, but in the medium to long term, this can help us diversify and lift volumes.”
Footfall growth in Tier 2/3 markets is a leading indicator of rural/semi-urban consumption recovery. V-Mart’s positive sentiment despite weather disruptions in eastern/southern markets (key geographies for the company) indicates underlying demand resilience.
“More importantly, consumer sentiment is positive, and we’re seeing better footfalls despite weather disruptions in Odisha, Andhra Pradesh, and Tamil Nadu.”
Festive sales performance (Durga Puja, Diwali, Chhath) in V-Mart’s core eastern and northern markets determines whether the company can sustain double-digit SSSG momentum or reverts to mid-single digit growth.
“The festive period has begun well, though slightly short of expectations. Weather disturbances in the east and south have been a challenge. But overall, growth is visible, momentum is positive, footfalls are better, and consumer sentiment is stronger. We are hopeful of a good Q3.”
Financial Services
HUDCO | Mid Cap | Financial Services
HUDCO signed an MoU with NBCC to develop its land parcels in key urban centers (UP, Haryana, Gujarat, Delhi) for rental income generation, marking a strategic shift to unlock value from legacy real estate holdings.
“We are trying to harness revenues out of our land properties and buildings. We are expanding our penetration toward rental income. We have mandated NBCC, which is an arm of MoHUA, to develop our properties. Finally, these will be converted into rental income streams. So, it is only to leverage our income through properties which have been with us for a long time.”
Understanding the investment quantum, payback period, and IRR helps assess whether this asset monetization is accretive to shareholders versus alternative capital deployment in HUDCO’s core lending business.
“The total investment will be around ₹150 crores, as estimated over 2–3 years. The payback will be within 5–7 years. We are expecting an IRR of around 18–19%. If you see the property market, rentals are going up, and that’s what we are aiming to capture.”
— Sanjay Kulshrestha, CMD, HUDCO
HUDCO’s “other income” (non-lending revenue) provides diversification and fee-based earnings. The incremental ₹100 crore annual rental income from these developments would nearly triple current levels.
“This is not a new business for HUDCO. We are already doing such projects. Our other income was as high as ₹55 crores in the last financial year. From these developments, we estimate another ₹100 crores will come in.”
Management clarifies that asset monetization is opportunistic rather than a strategic pivot, ensuring investors understand HUDCO remains fundamentally an infrastructure lending platform.
“Let me clarify — HUDCO’s core business is not property development. We are essentially a lending institution — an infrastructure finance company. This is one-of-a-kind for us.”
HUDCO is transitioning from a housing-focused lender to a broader infrastructure financier, riding structural tailwinds from urbanization, smart city projects, and state-led infrastructure development.
“Business is very robust, and the outlook is very good. There are strong tailwinds for infrastructure development in our country. We are transitioning from being primarily a housing finance company to a broader infrastructure finance company. Many states are giving us confidence. New towns and cities are being planned.”
HUDCO’s ability to secure multi-thousand crore mandates from states signals strong government relationships and positions it as a preferred financier for large-scale urban development projects.
“We recently signed an MoU of around ₹11,000 crores with Maharashtra for the creation of a new Nagpur city. In Andhra Pradesh, we are already funding projects.”
Disbursement targets indicate management’s confidence in pipeline visibility and loan book growth trajectory. ₹1.5 lakh crore represents significant scale for an infrastructure NBFC.
“Our initial guidance was ₹1.5 lakh crores of disbursement for FY26, which I am confident we will achieve.”
In a falling interest rate environment, maintaining NIMs above 3% while growing the loan book indicates strong pricing power and asset quality discipline in HUDCO’s lending operations.
“Regarding NIMs, we are targeting 3% plus, which we believe is sustainable.”
Cement
Adani Cement | Large Cap | Cement
Adani Cement has rapidly become a major player in India’s cement sector post-acquisition. Understanding current capacity and ranking helps assess competitive positioning in a consolidated industry.
“We are the second largest in the country. We achieved 100 million tons of capacity; therefore, everybody will see ‘100 million tons’ — that is our theme for this year. This is a special year — like any company, when it achieves 100 million capacity, it becomes very, very special. We celebrated on 5th of May our 100 million tons capacity.”
— Vinod Bahety, CEO, Adani Cement
In the cement business, proximity to consumption centers and distribution reach determine market share gains and logistics cost efficiency. Adani’s pan-India presence indicates aggressive network expansion.
“We are present all over India. We have 56 plants, including the bulk terminals, and we have a presence in almost 636 districts.”
The cement industry typically adds capacity gradually due to capital intensity and demand cycles. Adani’s growth rate signals aggressive market share ambitions and confidence in sustained demand.
“We are the fastest growing cement company in the industry. We are adding — with your support, with your blessing — 1 million ton of cement every month. That’s the speed at which we are working.”
Adani’s capacity roadmap indicates whether the company expects structural demand growth or is pursuing market share gains through scale. The aggressive targets suggest both.
“A company aspiring to achieve 140 million tons by end of March ‘28 — and plus, plus after achieving 100. You know why? He will not be satisfied unless you add another 100 more. So 200 million is the next, which is already given. That is the speed and growth the company is working on.”
Cement is a globally fragmented industry with regional champions. Adani’s rapid ascent to top-10 status globally demonstrates the scale achieved through acquisitions and organic expansion.
“We are now the ninth largest company in the world in terms of finance.”
Management draws parallels with China’s industrial competitiveness, attributing it partly to strong university-industry linkages. This signals Adani’s intention to build long-term R&D capabilities rather than just manufacturing scale.
“When I visited China with Karan, one thing... universities and colleges are extremely strong in terms of R&D, technology, and knowledge base, and the industries associate themselves. Look at companies like Sany... connected to one of the universities in China. When it comes to Huawei — which is now one of the world’s largest technology companies — they have strong associations with academia, with universities in China.”
Real Estate
WeWork India | Small Cap | Real Estate
WeWork India is pursuing aggressive expansion plans (adding 20,000+ desks annually) while the IPO is a pure OFS with no fresh capital raise, raising questions about funding sources.
“The business is now in a place where it is generating healthy operating cash flow. We are on a path where we can sustain our growth plans and meet all our capex requirements... the business is in a financially healthy situation to continue growing in a way where we can deliver value.”
— Karan Virwani, MD & CEO
As WeWork adds new capacity, understanding how quickly centers become profitable is critical to assessing capital efficiency and scalability.
“At COVID time, our break-even occupancy was roughly 73%. Today that’s down under 55%. In some of our newer centers we’re actually breaking even within 47–50%. We usually get to that within 4–6 months.”
With annual capex of ₹250-300 crores planned, investors need clarity on returns and payback periods for each new center.
“We sign 10-year leases on these spaces and we’re seeing recovery of capex within 3–3.5 years, which works out to almost a 30–35% return on capex. That means the remaining 6–7 years of the lease are essentially value-accretive.”
In an inflationary environment and with landlords demanding higher rents, the company’s ability to pass through costs while maintaining spreads is crucial for margin sustainability.
“For about 95% of our portfolio, we sign leases with escalations every 3 years — usually 12–15%. At the same time, we have annual escalations with our members. This ensures we always maintain the spread between the two.”
WeWork globally struggled with exposure to volatile startups and freelancers. Understanding the customer mix shift is critical to assessing business model stability.
“When we started in 2017, we targeted startups, freelancers, and mid-tier companies. But we saw huge demand from enterprise companies as well... Today, 80% of our business is enterprise companies — defined as those with 1,000+ employees. About 25% of our mix is Fortune 500, 36% is GCCs.”
Occupancy rates directly impact revenue per desk and profitability. Recent capacity additions may temporarily suppress occupancies.
“As of Q1, it was around 75–76%. It’s already moved up this quarter. Typically, when new capacity comes on, occupancy dips temporarily. Within 12 months, centers usually ramp up to 80–85%.”
With AI potentially displacing IT/ITES jobs, investors worry about demand destruction in India’s largest white-collar employment sector.
“Honestly, almost 0% of our mix is IT/ITES. AI will impact lower-end IT services, but GCCs are hiring strongly — growing 20% year on year. The biggest competition for us is actually traditional real estate, where companies decide between flexible vs long-term leases.”
Understanding structural tailwinds beyond current operations helps assess long-term growth sustainability and pricing power.
“What we see is premiumization — Indian offices are no longer just back-office centers. They’re building global products. GCCs and specialized centers are expanding rapidly. Even the H1B visa restrictions in the US could be a tailwind for Indian entrepreneurship.”
WeWork’s ability to command premium pricing depends on overall office space availability and quality in tier-1 cities.
“In India, there’s very low Grade-A supply relative to demand. Ready-to-move-in spaces that match hiring needs are critical... All the Indian private banks, several global banks, and some of the biggest startups like Zepto and Meesho began with us.”
International
Synaptics Incorporated | International
Synaptics Incorporated is a semiconductor company specializing in custom-designed human interface solutions, with products integrated into devices like smartphones, PCs, wearables, smart home devices, and automobiles. Its core technologies include touch controllers, display drivers, fingerprint sensors, voice capture, and AI-powered processing.
[Concall]
New Astra AI processor co-developed with Google enables Gen AI at disruptive price points with samples this quarter.
“The team has done an excellent job taping out our latest Gen AI native Astra processor. This new portfolio integrates a neuroprocessor co-developed with Google research which supports transformer-based architecture. This enables native execution of generative AI applications at the edge to support text, video, vision, audio, and predictive maintenance workloads. It supports both current AI use cases and emerging AI models across a broad range of IoT applications and delivers high performance and low power consumption at truly disruptive price points.”
– Rahul Patel (CEO)
New CEO brings track record of scaling Qualcomm’s IoT business from sub-$1B to multi-billion dollars.
“I have spent three decades driving growth in semiconductor industry, including more than 20 years in senior leadership roles at Qualcomm and Broadcom. At Qualcomm, I led the IoT business scaling from under $1 billion to multi-billion dollars. This success was built on delivering highly differentiated products and compelling technology roadmaps strategically positioning the business for sustained growth, market leadership, and enduring customer relationships. I am energized by the opportunity to scale Synaptics into a much larger and differentiated core IoT and edge AI semiconductor solutions player.”
– Rahul Patel (CEO)
Gaining traction in foldable phone touch solutions as that market segment grows.
“We are seeing strong traction for our latest touch architecture designed for foldable phones and other large screen applications. We are optimistic about the opportunity as the share of foldable phones continue to grow. We continue to collaborate with multiple OEMs for their current and next-generation design.”
– Rahul Patel (CEO)
NIKE, Inc. | International
Nike is involved in the design, manufacturing, and marketing of athletic footwear, apparel, sports equipment, and accessories for a wide range of sports and fitness activities.
[Concall]
Tariff impact increased 50% to $1.5B annually, expanding gross margin headwind from 75bps to 120bps in FY26.
“Since our last earnings call, new reciprocal tariff rates have been increased for certain countries. And so with the new rates in effect today, we now estimate the gross incremental cost to Nike on an annualized basis to be approximately $1.5 billion, up from the $1 billion we shared 90 days ago. Given the magnitude and timing of the most recent rate increases, we now expect the net headwind in fiscal 26 to increase from approximately 75 basis points to 120 basis points to gross margin.”
– Matt Friend (CFO)
Running business up 20% demonstrating success of sport-focused strategy to be replicated across other categories.
“Our running business continues to be a strong proof point of progress. We’re getting back to delivering a relentless flow of innovation that serves real athlete needs and we’re pulling it all the way through the marketplace in consumer-friendly ways. The early results have been positive with Nike running growing over 20% this quarter. Our opportunity is to quickly seize the benefits of a sport offense and apply them to more sport and sport culture including global football, basketball training and sportswear.”
– Elliot Hill (CEO)
Accenture plc | International
Accenture plc is a global professional services company specializing in strategy, consulting, digital transformation, technology, and operations services. It provides comprehensive solutions across cloud, data and AI, security, and software engineering, and offers industry-specific services to various sectors including banking, healthcare, and technology.
[Concall]
Advanced AI revenue tripled to $2.7B and bookings nearly doubled to $5.9B, with scope expanding to agentic and physical AI.
“In FY25, we tripled our revenue over FY24 from GenAI and increasingly Agentic AI to $2.7 billion and we nearly doubled our GenAI bookings to $5.9 billion. And as a reminder, these numbers only reflect revenue and bookings specifically related to advanced AI, which is Gen AI, agentic AI, and physical AI, and do not include data, classical AI, or AI used in delivery of our services.”
– Julie Sweet (CEO)
$865M restructuring charge for rapid talent rotation and divesting non-core acquisitions to fund growth investments.
“Before I move on to the details of the quarter, I want to spend a moment on the six-month business optimization program we initiated in Q4 for which we recorded a charge of $615 million and expect to record an additional approximately $250 million in Q1 for a total of approximately $865 million over the period. The business optimization program has two parts. One related to rapid talent rotation that Julie mentioned which reflects severance associated with headcount reductions that we are making in a compressed timeline and second related to the divestiture of two acquisitions that are no longer aligned with our strategic priorities.”
– Angie Park (CFO)
Despite restructuring, headcount will grow across all markets in FY26 with $1B+ savings reinvested in business.
“In FY26, we expect to increase our headcount overall across all three markets, including in the US and in Europe, reflecting the demand we see in our business. Overall we expect savings of over a billion dollars from our business optimization program which we expect that we will reinvest in our business and in our people because it’s so important for our future growth.”
– Angie Park (CFO)
Genpact Limited | International
Genpact Limited is an advanced technology and consulting services company that provides business process outsourcing (BPO), information technology (IT) services, and other enterprise services to global companies across industries like finance, healthcare, and manufacturing.
[Concall]
Multi-year workforce transformation underway with only two employee categories planned: AI builders and AI practitioners.
“As we progress there will be only two cohorts of people in Genpact AI builders or AI practitioners. This transformation is not happening overnight. It is a multi-year transition and transformation. We are wanting to take all these solutions to our clients and we got to meet where our clients are.”
– BK Kalra (CEO)
Advanced technology solutions grew 17% year-over-year with AI pipeline tripling and 270+ GenAI solutions now in production.
“Advanced technology solutions revenue, which includes data and AI, digital technologies, advisory, and agentic solutions continue to accelerate up 17% year-over-year, driven by strength in data and AI. Our data and AI pipeline has tripled over the last year and we are innovating rapidly. We now have more than 270 GenAI solutions in production environments with clients either deployed or going live up more than 3x year-over-year.”
– BK Kalra (CEO)
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Meher & Vignesh.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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Synaptics getting tracion on multiple fronts is pretty cool to see. The Astra AI processor with Google is a big deal if they can really hit those disruptive price points, that could open up a lot of lower tier device makers who've been priced out of edge AI so far. Patel's experience scaling IoT at Qualcomm from sub 1B to multi billion is exacly what they need right now. The foldable phone touch stuff is more of a niche play but with Samsung and others pushing foldables harder, could turn into somethng. Overall seems like they're finally getting the pieces together for a real run at edge computing dominance. Great summary of all these companies, tons of good info here.