The Chatter: Storm clouds and sunny skies

Edition #2

May 02, 2025

Welcome to the second 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.

Your response to our first edition was overwhelmingly positive, so we got a little enthusiastic and covered a lot more companies. So it’s a little long. Only a little.

But in the interest of our beloved readers (you guys!), we’re given an index.

In this edition, we have covered the following companies:

Zomato
Shopper Stop
Bajaj Finance
JSW Infrastructure
Bharat Petroleum
Star Health
Indian Oil Corporation
Varun Beverages
Vishal Mega Mart
CEAT
SEBI comments
Apple
Google
Meta

Zomato

Zomato’s food delivery growth slowed due to weak demand, delivery partner shortages, quick commerce competition, and a cleanup of ~19,000 low-quality restaurants, but fundamentals remain strong long term.

Yes, growth does remain below our expectations for now. We think there are three key reasons
behind the current slowdown in food delivery –
1. The sluggish demand environment (especially on discretionary spends)
2. Shortage (temporary) of delivery partners due to high demand of delivery partners in quick commerce given the rapid expansion of the industry in the last few months
3. Competition from quick delivery of packaged food from quick commerce leading to drop in demand for food delivery from restaurants
On top of these, in this quarter, two other factors impacted growth –
1. We delisted ~19,000 restaurants who either a) did not pass muster on hygiene standards based on severe customer escalations, b) were mimicking established brands and misleading customers, or c) operating multiple identical menu listings to hog more listing impressions. As one of the leading food delivery platforms, we think it is critical to weed out bad actors which erode trust in the category. While this did impact order volumes, this was the right thing to do for the long term.
2. There was one less day in Q4FY25 compared to the same period last year (which was a leap year).
Adjusted for the above two specific factors, NOV growth could have been higher by about 2 percentage points.
Overall, however, we don’t see any long-term structural reason for this slowdown, as the fundamentals -low penetration of restaurant food and increasing urbanisation and per capita income in India - remain unchanged.
— Deepinder Goyal (CEO, Eternal (formerly known as Zomato)

Shoppers Stop

Despite early sales seasons, Shoppers Stop reports shoppers trading up to premium products

“The overall sentiment improved as we progressed despite the continuous advancement of end of season sale every year. Especially for shoppers, the secular trend of premiumization remained resilient with premium products going ahead. This also indicates that consumer needs and aspirations to upgrade continue to evolve and the aspirations remain high. Our ATV [Average Transaction Value] has been consistently increasing with 8% growth in quarter 4. In the last two years, our ATV has increased by 17% with 8% CAGR [Compound Annual Growth Rate]. Similar to ATV, our ASP [Average Selling Price] has also increased by 4% and IP [Items Per Bill] by 4%.”
“Our margins have increased in private brands helping us to achieve an overall increase in margins by 730 basis points in Q4 and 530 basis points for the full year. This is primarily due to increased premiumness, sharpness in positioning and better inventory control.”
— Kavinda Mishra (MD & CEO, Shoppers Stop)

Shoppers Stop CEO expresses confidence in retail market revival, citing positive monsoon predictions and revealing a complete turnaround in footfall trends

“IMD has forecasted a good monsoon which augers growth momentum for industry. I believe from Q2 retail growth should gain further momentum. We'll focus on key strategic pillars such as brands, beauty and expansion. We are confident our beauty business will continue to grow and our 100% subsidiary global essence beauty will have another record in FY26.
“My sense is that the customer entries have made a big U-turn. So from where we were at the start of the year we have actually turned it completely around and April as we speak would be a 0% or little bit in positive in terms of the number of opening of stores.”
— Kavinda Mishra (MD & CEO, Shoppers Stop)

Bajaj Finance

Bajaj Finance commits to deploying 100 AI applications next year under its "FinAI" initiative, targeting everything from revenue growth to compliance controls.

"FinAI... the company will deploy AI use cases across revenue, cost, customer engagement, underwriting, productivity and controllership. The company estimates to deploy about 100 AI applications in FY26 and we remain committed to the plan."
— Anup Saha (Managing Director, Bajaj Finance)

Bajaj sees positive signs in rural consumer business, with their strong B2B rural presence giving them confidence to push forward with rural consumer lending again.

“Rural B2C is improving… we remain very confident from here to grow the rural B2C business. We also significantly strengthened our debt management capability in rural. And the point on rural B2C growing back – it is backed by our rural B2B business [which] remained very, very rock solid… that gives us a fair bit of confidence on growing rural B2C going ahead.”
— Anup Saha (Managing Director, Bajaj Finance)

Bajaj Finance on prioritizing credit quality over growth in FY26

"At a overall level we remain very small as we call out our aggregate market share is only 2.14% of India's total credit. If I look at from a count share that number goes to about 7-7.5%. Across all businesses of ours other than the B2B business where we have a 54% plus market share our market share remains small. So as we plan to grow I think the growth will come across all businesses."
"As a design level we grow at about 2x of nominal GDP and about two times the growth of the industry. But for us, very clearly if I had to make a choice between growth, credit and profitability, we are a risk business. So the point we are not happy with this year as we called out that credit did not play out to our appetite. Our core objective at this stage is first to get to the credit cost corridor which we have laid out."
"Once we get there we are not saying we'll not grow. We see opportunity, we'll seize it. We're also utilizing this time as we called out the fin to AI strategy is to significantly get operating leverage in terms of our cost structures, because I think that's very important to reshape the P&L - focus on the cost to income ratio, bring it down, do the transformation between the fin components of it and the AI component and then restart the growth because with those metrics the growth would look very different than in the current."
— Anup Saha (Managing Director, Bajaj Finance)

JSW Infrastructure

JSW Infrastructure's CEO reveals the company's strategy to capitalize on the growing green economy by positioning its ports as enablers.

"At our Jaigarh port, we are looking at these opportunities and there is a lot of interest from various companies to set up green ammonia type of stuff. So we are very keen and once we have something here, we can always plan to have it in Keni also. So things are being seen by the various interested parties and as soon as something materializes, we keep the media updated.”
“We are not taking up, we are just enablers, this gives business to the ports, better utilization of our waterfront is what we will be looking at."
— Mr. Dinkesh Roy (Managing Director and CEO, JSW Infrastructure)

JSW Infrastructure has a three-pronged approach to logistics expansion that emphasizes cost efficiency.

“We are looking at strategizing this growth in an asset light model. So our main targets are getting into Gati Shakti terminals where we don't have to spend a huge capex on building the railway sidings or purchasing land at very expensive rates. So that is the first part of it is the terminal capacities we are looking at at a way lower than what the industry generally does.”
“Number two, we are looking at powering these terminals through group cargo wherever they are available and this through a combination of rates, additional containers and new terminals which move into the right market. Lastly, we are looking at reducing the empty return ratio of this rate so that on return we get third party cargo and other cargo so that the entire model sees to it that we are able to reduce the final cost for the customer."
— Mr. Dinkesh Roy (Managing Director and CEO, JSW Infrastructure)

Bharat Petroleum Corporation

BPCL's finance chief reveals how sanctions have cut Russian crude throughput from 34% to 24% - a key driver of their superior refining margins

"From the refining side we don't generally calculate inventory gains because our average inventory is less than one month only. Generally in the same month we procure and our throughput will be completed in the same month. However, the impact on our margins is mainly on account of Russian crude throughput and better refining performance. In Q4, we processed 24% Russian crude out of the total throughput, down from previous levels because in Q4 the availability of Russian cargo due to the new sanctions meant we could not get the full cargo requirement."
Why it matters: Russian crude remains a key driver of refining margin outperformance, despite declining from 34% to 24% of throughput due to sanctions, impacting the competitive advantage going forward.
— Mr. Vyaki Gupta (Director of Finance, Bharat Petroleum)

BPCL outlines an ambitious capital expenditure roadmap that increases annually from ₹20,000 crore to ₹30,000 crore over three years.

“This year our target for capex [Capital Expenditure] is around 20,000 crore, with around 17,200 crore as direct investment and around 2,700 crore equity investment through our JVs [Joint Ventures]. For the current year we're expecting around 20,000 crore for capex, but next year FY26-27 we are expecting the capex will be 25,000 crore, and in the subsequent year we are expecting around 30,000 crore.
“The peak capex for Bina will happen in that timeframe. The major capex investment will go for CGD [City Gas Distribution] and our Mozambique expansion, Bina expansion, and petrochemicals. These three are major areas where our capex is going to happen. For the current year, out of 20,000 crore capex, we have allocated around 5,900 crore for refineries, around 2,400 crore for pipelines, and 5,600 crore for marketing, of which 2,500 crore is for expansions."
— Mr. Vyaki Gupta (Director of Finance, Bharat Petroleum)

Indian Oil Corporation

IOC has a dual strategy to expand market share while building a renewable portfolio through a dedicated subsidiary Terakan Limited, as part of its transformation from traditional oil company to diversified energy provider.

“Indian Oil has envisioned to increase its share in the national energy basket from 9% to 12.5% by the year 2050 in alignment with the anticipated doubling of the country's overall energy demand. This transformation will be anchored in a balanced portfolio that continues to leverage the strength of the conventional fuels while expanding decisively into cleaner, more sustainable energy vectors.”
“A key enabler for this transition is a wholly owned green subsidiary, Terakan Limited, which is spearheading our green ventures. Indian oil board has already accorded approval for implementation of 5.3 GWof RE projects through Terracle Limited.”
— Mr. Visheshwar (ED of Corporate Finance and Treasury, Indian Oil Corporation)

Star Health

Insurance claims are rising: more people are choosing hospital treatment instead of home care, especially for cancer and women's health issues, while the company builds up cash reserves to handle these higher costs.

"An elevated frequency and severity that we observed in Q3 also largely led by carcinoma obstetrics and gynec cases. So the preference for hospitalization over conservative treatments, aided by easier access, availability, early screenings and of course the cashless availability is all playing their role. That's one of the reasons why we see those loss ratios. Yes, we've strengthened our reserves this quarter."
"On severity, yes, while the market continues to see medical inflation at 15% plus but we are holding that to well below 10% as of now. In fact ours would be one of the better controlled book as far as medical inflation is concerned. Medical inflation in terms of what the industry is maintaining versus what we see actually happening in the hospitals, that's what I'm talking about."
— Mr. Amitabh Jain (Chief Operating Officer of Star Health)

Earlier cancer detection through increased screenings, preference for tertiary care, and a shift toward hospitalization represent structural healthcare changes requiring pricing recalibration across the industry.

"The annual increase [in frequency] is upwards of 7% and that's primarily led by movement from secondary to tertiary care hospitals, also more preference for hospitalization over conservative treatments, better accessibility and screenings happening. We have seen a lot of increase in cancer frequency because early screenings are happening now."
"So some of those trends have come in and obviously that will take its time to settle in as a new sort of benchmark for us to price because all of these when they show up in the data and actual actuarial methods kind of go through those trends and then build that as part of pricing. So some of those corrections happen with time and we hope that that will settle at a level where we can sustain it at this pricing and the future pricing corrections."
— Mr. Amitabh Jain (Chief Operating Officer, Star Health)

Varun Beverages

Varun Beverages' management said hydration, energy drinks, and value-added dairy are their fastest-growing categories, with Nimbooz and dairy both growing nearly 100%.

So hydration and energy are the fastest growing categories which we see happening and which is happening in, you see it, our energy drink is one of the largest in India. Secondly our hydration drink which is Nimbooz is growing at practically 100%, which is a fabulous growth. Our value-added dairies are growing at close to 100%. So the new categories are doing extremely well and at the same time there are enough newcomers who are entering the category and those regular categories are also growing but the faster growth is coming from these categories.
— Ravi Jaipuria (Chairman, Varun Beverages)

Varun Beverages’ Q1 2025 saw CSD make up 75% of volumes, healthier low/no-sugar drinks rise to 59% of sales, while gross margins fell 171 bps and EBITDA grew 28% year-on-year.

CSD constituted 75% of the total volumes while non-carbonated beverages and packaged drinking water contributed 7% and 18% respectively. Aligned with our growing focus on healthier beverages, the mix of the low sugar, no sugar products increased to 59% on consolidated basis of the total sales volumes in calendar year 2025 Q1 due to relatively lower margin profile of own brands in the South African market and the higher mix of CSD in India. Gross margin at 54.6% declined 171 basis points as compared to Q1 of the calendar year 2024. EBITDA increased by 27.8% in Q1 of 2025 to the level of 12,639.6 million rupees compared to the rupees 9,887.6 million in Q1 of 2024, broadly in line with net revenue growth.
— Raj Gandhi (President & Director, Varun Beverages)

Vishal Mega Mart

Vishal Mega Mart’s average store size has been declining over the past 3 years

“As we are going deeper and deeper into India, we fine-tune our store size to ensure the viability of the stores… because in smaller towns, the total revenue opportunity from a store in an absolute sense is smaller… we adjust the size so that revenue per square foot remains consistent.”
— Gaurav Kapoor( MD & CEO, Vishal Mega Mart)

CEAT

CEAT's CEO highlights the gap between strengthening rural demand and soft urban markets

“As far as demand outlook is concerned, the same trends which were continuing and we've been talking about will continue into the first quarter of FY26. Which means the urban demand continues to be soft whereas the rural demand is definitely much more positive year-on-year and there is a delta of about 4 to 5% in terms of demand level between rural and urban in most segments.”
“This trend will continue which means that with our extended distribution network into rural territories, we should be able to tap into rural demand better especially for two wheelers and for farm tires. Demand for passenger car tires will be a little bit soft because that comes primarily from the urban markets."
— Arnab Banerjee (Managing Director and CEO, CEAT Ltd)

SEBI Chairman

SEBI Chairman Tuhin Kanta Pandey, in an interview with CNBC-TV18, shared key updates on F&O market reforms, SME IPO regulations, conflict of interest disclosures, and other regulatory priorities—here’s what he said.

On F&O Market Regulation

"The basic premises that we should make systemic improvements and also provide—while the F&O market is very important market for price discovery for hedging, we also don't want it to be reduced to one single problem that we were facing on index options on the expiry day... We will bring the delta in terms of the options."

On SME IPO Concerns

"One of the objectives of bringing IPO are a little light touch regulation for them was exactly to facilitate SMEs to access capital markets where the cost of accessing is relatively down and it is easier for them to access capital market... We are watchful if there are certain aspects where we have brought in some changes in terms of profitability criteria, in terms of usage and deployment of funds post IPO, also on the fact that this money cannot be simply used by loan repayment of the promoters."

On Conflict of Interest Disclosures

"There is very little public exposure. There is in fact no public disclosure of the conflict of interest... We need to have comfort for those who are working within SEBI as to how they need to conduct... We need to know who has recused for what and rationale. So we need to have some database and also have public disclosures."

On Regulatory Burden

"I think in many areas we should have a much simpler regulation. Many regulations were contextual in nature and some of them have been changed also... There is a need for relook at the regulations. Many times context have changed. Many times a better way of regulation may have come simply because you have a better technology now."

On Regulation vs Implementation

"There is a difference between implementation and a regulation. That is what the effectiveness of regulation is like. Wherever the risk is higher, that is where we have to concentrate. If we try and ask too much of micro that may not be our game... We can't be in everyone's boardroom."

On NSE IPO

"There are certain issues which are going back and forth... There is a technology architecture issue. Then there is a governance and there is a clearing corporation. In these all of these things, there is an active interchange between the exchange and the SEBI and we intend to look at it positively forward to not as a procrastinating device but actually to make it happen."

On Market Stability and Stress Testing

"Stress testing actually not only should be done but actually SEBI has also got it done for small cap and midcap in '24 it was done and the results have also been released... We have buffers and we have mechanisms... The kind of settlement guarantee fund which is there that has been more than doubled in the last 5 years and it has worked as also our system works as more like a counter cyclical."

Global

Apple

Cook reveals a dramatic supply chain realignment with most iPhones sold in the US now originating from India and virtually all other products from Vietnam

“The existing tariffs that apply to Apple today are based on the product's country of origin as you allude to for the June quarter. We do expect the majority of iPhones sold in the US will have India as their country of origin and Vietnam to be the country of origin for almost all iPad, Mac, Apple Watch and AirPods products sold in the US. China would continue to be the country of origin for the vast majority of total product sales outside the US. And so if you look at the categories of tariffs that are applicable to us today for the June quarter, most of our tariff exposure relates to the February EA related tariff at the rate of 20%. Which applies to imports to the US for products that have China as their country of origin."
— Tim Cook (CEO, Apple)

Apple's CEO discloses a precise $900 million cost impact from current tariffs for the June quarter while emphasizing that most Apple products are exempt from the April "global reciprocal tariffs”

"Also for transparency and clarity, the vast majority of our products, including iPhone, Mac, iPad, Apple Watch, and Vision Pro, are currently not subject to the global reciprocal tariffs that were announced in April as the Commerce Department has initiated a section 232 investigation into imports of semiconductors, semiconductor manufacturing equipment, and downstream products that contain semiconductors.
“So for the June quarter, as I talked about in my opening comments, we estimate the impact assuming that the current global tariff rates, policies, and applications don't change for the balance of the quarter to be $900 million to our costs. I wouldn't want to predict the mix of production in the future. But I wanted to give you clarity for the June quarter of where the country of origins are so you can use that for your modeling."
— Tim Cook (CEO, Apple)

Google

Google reports users are embracing its new AI-powered search features, with AI Mode queries running twice as long as traditional searches

"Building on the positive feedback for AI Overviews, in March we released AI Mode, an experiment in Labs. It expands what AI Overviews can do with more advanced reasoning, thinking, and multimodal capabilities to help with questions that need further exploration and comparisons. On average, AI Mode queries are twice as long as traditional Search queries. We are getting really positive feedback from early users about its design, fast response time, and ability to understand complex, nuanced questions.
“We also continue to see significant growth in multimodal queries. Circle to Search is now available on more than 250 million devices, with usage increasing nearly 40% this quarter. And monthly visual searches with Lens have increased by five billion since October."
— Sundar Pichai (CEO, Google)

Google ramps up massive technical infrastructure investments for AI capabilities across its divisions, warning investors that the rapidly growing capital spending will drive accelerating depreciation costs throughout the year.

“With respect to CapEx, our reported CapEx in the first quarter was $17.2 billion, primarily reflecting investment in our technical infrastructure, with the largest component being investment in servers, followed by data centers, to support the growth of our business across Google Services, Google Cloud, and Google DeepMind. Moving to investments, starting with our expectation for CapEx for the full year 2025. We still expect to invest approximately $75 billion in CapEx this year. The expected CapEx investment level may fluctuate from quarter to quarter, due to the impact of changes in the timing of deliveries and construction schedules.
“In terms of expenses, first, as I mentioned on our previous earnings call, the significant increase in our investments in CapEx over the past few years will continue to put pressure on the P&L, primarily in the form of higher depreciation. In the first quarter, we saw 31% year-on-year growth in depreciation from the increase in technical infrastructure assets placed in service. Given the increase in CapEx investments over the past few years, we expect the growth rate in depreciation to accelerate throughout 2025."
— Anat Ashkenazi (SVP and CFO, Google)

Meta (Facebook)

Zuckerberg reveals business messaging across WhatsApp, Messenger and Instagram will be Meta's next major revenue pillar beyond advertising, pointing to surprising success in Southeast Asian markets

"The third opportunity is business messaging. Right now the vast majority of our business is advertising in feeds on Facebook and Instagram. But WhatsApp now has more than 3 billion monthly actives, with more than 100 million people in the US and growing quickly there. Messenger is also used by more than a billion people each month, and there are now as many messages sent each day on Instagram as there are on Messenger. Business messaging should be the next pillar of our business.”
“In countries like Thailand and Vietnam where there is a low cost of labor, we see many businesses conduct commerce through our messaging apps. There is actually so much business through messaging that those countries are both in our top 10 or 11 by revenue even though they're ranked in the 30s in global GDP. This phenomenon hasn't yet spread to developed countries because the cost of labor is too high to make this a profitable model before AI -- but AI should solve this."
— Mark Zuckerberg (CEO, Meta)

Meta raises its 2025 capital spending forecast by $7 billion to fund expanded AI infrastructure and absorb rising hardware costs

"We anticipate our full year 2025 capital expenditures, including principal payments on finance leases, will be in the range of $64-72 billion, increased from our prior outlook of $60-65 billion. This updated outlook reflects additional data center investments to support our AI efforts as well as an increase in the expected cost of infrastructure hardware. The majority of our capex in 2025 will continue to be directed to our core business."
— Susan Li ( CFO, Meta)

That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!

The Chatter by Zerodha

Discussion about this post