The Chatter: Tailwinds building
Edition #46
Welcome to the 46th 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 18 companies across 8 industries.
Financial Services
Punjab National Bank
Bank of Baroda
State Bank of India
Muthoot Finance
Auto Ancillary
Tata Motors Passenger Vehicles
Amara Raja Energy
Ashok Leyland
Mahindra & Mahindra
Samvardhana Motherson International Ltd
Engineering & Capital Goods
Pitti Engineering
Bharat Forge
Quality Power Electrical Equipments
IT
Honasa Consumer
BlackBuck
Media & Entertainment
PVR
Services
VA Tech Wabag
Energy
ONGC
Metals
Hindalco
Financial Services
Punjab National Bank | Large Cap | Financial Services
Punjab National Bank, a premier banking institution in India, offers a wide range of financial products and services for both retail and corporate customers. Known for its strong franchise value, the bank continues to fulfill its social responsibilities while adopting technology to become a modern, techno-savvy institution.
[Concall]
The bank has launched digital journeys for most credit products and revamped its mobile banking app, PNB One 2.0, to enhance customer experience and operational efficiency.
“Digital journeys for almost all credit products have been launched. Our mobile banking app has been revamped for better customer experience.”
— Ashok Chandra, MD and CEO
The bank has a significant credit growth pipeline with INR1.02 lakh crores of sanctioned loans yet to be disbursed, indicating future asset growth.
“We have sanctioned credit lines of more than INR 3.12 lakh crores during 9 months of this financial year, out of which we have pending disbursement to the tune of INR 1.02 lakh crores, which are yet to be disbursed.”
— Ashok Chandra, MD and CEO
The bank proactively made INR955 crores in additional floating provisions in Q3, bringing the total to INR1,775 crores, to prepare for the upcoming ECL implementation from April 2027.
“We have made additional floating provisions of INR 955 crores on a prudential basis in Q3 on account of which credit cost is looking elevated at 0.46%. Now total floating provision is INR 1,775 crores, which will help us in moving towards ECL transition.”
— Ashok Chandra, MD and CEO
The bank estimates INR9,000-10,000 crores capital is required for full ECL implementation over five years, with INR1,775 crores already provisioned.
“Bank has done it. We are putting the digital framework in place. Then we will have the exact calculation, but rough calculation, which we have done, it comes to a round INR9,000 crores to INR10,000 crores. That is the total capital that is required for the full implementation to happen in the 5 years’ time.”
— Ashok Chandra, MD and CEO
The recurring impact of ECL implementation on credit cost is estimated to be around 10-15 basis points per quarter for the next five years.
“So, 20 quarters means every quarter, if I am able to do INR500 crores, I am able to meet that requirement. And that INR500 crores every quarter, hardly it comes to around 10 to 15 basis points.”
— Ashok Chandra, MD and CEO
The low NPA ratio of 0.41% on loans disbursed since July 2020 demonstrates strong underwriting standards and asset quality improvement over recent years.
“The NPA in this book [loans sanctioned from July 2020-Dec 2025] is hardly INR 4,687 crores, which is only 0.41% of the disbursed amount under same underwriting. I think this speaks about the underwriting standard of the bank for the last 6 years.”
— Ashok Chandra, MD and CEO
Punjab National Bank asserts it is fully compliant with RBI’s PSL requirements and does not face challenges like other banks.
“No, no, no. We don’t have any such challenge [regarding RBI compliance on PC Agri crop loan PSL requirement]... We are totally compliant in that. We don’t have any such challenge.”
— Ashok Chandra, MD and CEO
The bank’s NIM was impacted by immediate repo-linked rate cuts on advances and a slower repricing of deposits, with significant deposit repricing expected by Q2 FY27.
“Since 50% and above the Repo Linked rates were there -- so that we have passed on immediately... But to that extent, we have not gone for the deposit repricing... from 1st April 2025, this scheme was withdrawn. Now those deposits are getting repriced. 70% repricing has already happened by December ’25. And 21% is going to be repriced in the fourth quarter... and 9% still it will get repriced in the first 2 months of first quarter of ‘26 - ‘27.”
— Ashok Chandra, MD and CEO
The bank is strategically shedding low-yielding corporate advances and replacing them with higher-yielding ones to improve asset quality and profitability, even if it tempers overall corporate loan growth.
“there are some low - yielding advances are there in the corporate book. That also we are selling it and we are replacing it with high - yielding advances. Otherwise, our corporate loan book would have grown more than 11% to 12%.”
— Ashok Chandra, MD and CEO
Bank of Baroda | Large Cap | Financial Services
Bank of Baroda offers a wide range of banking services including personal, corporate, international, SME, and rural banking, along with NRI services and treasury operations. It leverages advanced technology and alternate delivery channels like net banking, mobile banking, and e-lobbies to provide convenient and efficient customer service. The bank focuses on catering to diverse financial needs with innovative solutions.
[Concall]
The bank recorded one of its strongest business growth performances in eight quarters, with global advances growing significantly.
“The bank has a very strong or rather I would put it one of the strongest in last 8 quarters with regard to the business growth, whether it is a growth in the advances, whether it is growth on the deposit or growth in the overall business is concerned. The global advance of 14.7% is one of the best in last 8 quarters.”
— Dr. Debadatta Chand, Managing Director & CEO
The bank has achieved exceptional low-cost deposit growth, with savings and current accounts contributing to one of the best CASA growth rates in eight quarters.
“The saving s account growth has been 7.4%, which is better than the 5.5% growth we had in last quarter. And again, 7.4 % is the best in last 8 quarters in terms of the growth in saving. Similarly, the current account growth has been very normalized at almost at 19%. Our CASA growth of 8.6% is again one of the best in last 8 quarters.”
— Dr. Debadatta Chand, Managing Director & CEO
The bank expects to exceed its 11-13% credit growth guidance, acknowledging that overall advances growth will be prudently moderated by the pace of deposit growth.
“So, one condition that would be mindful while giving a guidance is that, look, the advances growth for all the banks have been quite strong. But deposit growth has not been to that extent because of, obviously, the profile change that happened in the market. So, we will be mindful of the deposit growth while positioning the advances growth... That means we are expecting higher, we are not conservative, we are optimistic having a growth higher than 13%.”
— Dr. Debadatta Chand, Managing Director & CEO
The strong corporate loan pipeline is broad-based, with notable demand from renewable energy, power, data centers, service proposals (LRD), and chemicals sectors.
“But couple of sectors we see good demand in terms of pipeline, either renewable sector, some of the energy power sector, data center, couple of service proposal in the form of LRD and all, Chemicals is showing some good outcomes. So, all types of broad-based thing.”
— Dr. Debadatta Chand, Managing Director & CEO
The bank estimates a maximum 0.6-0.7% impact on CRAR from ECL, spread over five years, with recurring annual provisioning elevating credit cost by only 18 bps, which is well within its revised guidance.
“The net impact on the ECL, CRAR which can be spread over 5 years would be somewhere at 0.6 or 0.7 maximum... The incremental provisioning, recurring provisioning year-to-year because of the ECL can elevate the credit cost only by 18 bps as on today.”
— Dr. Debadatta Chand, Managing Director & CEO
The bank currently expects minimal material impact from the new Labour Code, estimating only Rs 8-9 crore, as the rules are still being finalized.
“No sir, there is not much impact as far as the Labour Code is concerned. These rules are being finalized. So, once these are finalized, then we see the actual impact. But right now, there is no impact. Hardly, it has an impact of Rs 8 to 9 crore.”
— Mr. Lal Singh, Executive Director
While the bank aims to prioritize low-cost deposits, it occasionally relies on wholesale (bulk) funding to bridge the gap between asset and liability growth, maintaining bulk deposits at a comfortable 19-20% of domestic deposits.
“The bulk, we have to rely on bulk at some point of time, the reason being, there is a wide gap between the asset growth and the liability growth... So as of today, if you look at the bulk as a percentage, ... the domestic deposit is almost at 19-20%. That’s, I think, a fairly comfortable level for a bank like us to operate.”
— Dr. Debadatta Chand, Managing Director & CEO
State Bank of India | Large Cap | Financial Services
State Bank of India (SBI) offers a diverse range of products and services to individuals, businesses, and institutions through its extensive network. Embracing change while upholding core values like Service, Transparency, Ethics, Politeness, and Sustainability, SBI remains a leading player in the banking sector.
[Concall]
SBI has revised its credit growth guidance upwards to 13-15% for the current quarter, indicating strong credit demand.
“Regarding credit growth, we had previously given guidance of 12-14%. We are revising that upwards to 13-15% for the current quarter.”
— SBI Management Team, Management Representative
SBI anticipates a 6-8% recovery rate from its written-off loan portfolio, with better recovery rates observed in more recent slippages.
“In recent slippages, you definitely see better recoveries. Much of the current run rate of approximately 2,000 crores per quarter comes from recent slippages and write-offs, meaning those that are about 2-3 years old. You are correct that written-off accounts less than 5 years old have a better recovery rate, but it is most appropriate to look at the portfolio level. We are sticking to our guidance that 6-8% recovery is possible in this portfolio.”
— SBI Management Team, Management Representative
Customer Value Enhancement (CVE) income, driven by increased cross-selling of life insurance, mutual funds, and other products through various channels, is experiencing secular growth.
“Regarding CVE income, there has been good growth in terms of life insurance and GST benefits, as the number of policies sold has increased. Trail income from mutual funds has also gone up. There is a secular movement in Customer Value Enhancement (CVE) income, which is basically cross-selling income. We have enhanced the number of products available through our counters and the YONO channel.”
— SBI Management Team, Management Representative
Customer Value Enhancement (CVE) income, driven by increased cross-selling of life insurance, mutual funds, and other products through various channels, is experiencing secular growth.
“Regarding CVE income, there has been good growth in terms of life insurance and GST benefits, as the number of policies sold has increased. Trail income from mutual funds has also gone up. There is a secular movement in Customer Value Enhancement (CVE) income, which is basically cross-selling income. We have enhanced the number of products available through our counters and the YONO channel.”
— SBI Management Team, Management Representative
SBI is actively involved in financing data centers and has made renewable energy a major focus, growing its green portfolio to 1 lakh crores, aligning with the energy demands of new infrastructure.
“We are active in data center financing. While many mega data centers are still developing their business plans, we are part of the journey wherever capacity is being created. There will be significant demand for green energy for these centers. Renewable energy is a major focus for us; our green portfolio has reached 1 lakh crores, primarily consisting of renewable energy.”
— SBI Management Team, Management Representative
SBI achieved over 13% corporate credit growth in Q3 while maintaining margins by shifting to a comprehensive corporate banking ecosystem model that values overall client relationships beyond just lending.
“In Q3, we had over 13% corporate credit growth without compromising margins. We maintain a philosophy of pricing risk properly. We have also strengthened ecosystem banking. Today, corporate underwriting involves a checklist of 22 non-funding areas, such as cash management, salary accounts, and foreign exchange. We have moved from corporate lending to corporate banking. This gives us confidence that even if we adjust pricing for a corporate client, it is based on the total value generated from the relationship.”
— SBI Management Team, Management Representative
SBI is strategically focusing its international expansion on wholesale banking in key geographies, leveraging existing presence to support corporate and MSME funding arising from trade deals, with no plans for aggressive physical branch expansion.
“Regarding overseas expansion, in most geographies where trade deals are signed, we already have a large presence. For example, our New York branch is our largest operation. In these jurisdictions, we act primarily as wholesale bankers. Trade deals will help us in corporate and MSME funding. We do not currently see a need for aggressive physical branch expansion in the EU.”
— SBI Management Team, Management Representative
SBI believes the corporate bond market is poised for growth, with new RBI regulations enabling lower-rated corporates to access it through Partial Credit Enhancement, a development SBI will participate in while prioritizing loan funding.
“On the corporate bond market, it is time for it to become vibrant. Our participation depends on our credit growth; funding loans is our priority, but we do subscribe to corporate NCDs. The new allowance for Partial Credit Enhancement by the RBI will allow lower-rated corporates (A or AA) to access the bond market, which is currently dominated by AAA companies.”
— SBI Management Team, Management Representative
Muthoot Finance | Large Cap | Financial Services
Muthoot Finance specializes in providing quick, affordable, and secure gold-backed financing with flexible repayment options and attractive interest rates. Alongside gold loans, the company offers personal and business loans, expanding its presence across the country. Known for transparent services and minimal paperwork, Muthoot Finance upholds strong ethical standards and compliance for fair and integrity in operations.
The company’s gold loan AUM reached an all-time high of 1,39,658 crores over the nine-month period, indicating strong asset base expansion.
“Over the nine-month period, the standalone gold loan increased by 36,700 crores, setting a new record for gold loan AUM of 1,39,658 crores.”
— George Alexander Muthoot, Managing Director
Despite PSU banks offering lower interest rates on agricultural gold loans for many years, Muthoot Finance has not experienced market leakage due to its strong growth and customer preference for its convenience and services.
“Not at all. We grew significantly over the last year. PSU banks have offered those rates for 15 years, yet customers still choose us for convenience and other factors.”
— George Alexander Muthoot, Managing Director
The company has robust safeguards against gold price declines, including a low LTV of 57% and the added value of making charges on ornaments, which historically prevents customer abandonment.
“Our 57% LTV provides a large margin. Additionally, ornaments have making charges that add 15-20% to the replacement cost for the customer. We have not seen people abandon gold due to price fluctuations in the last 15 years.”
— George Alexander Muthoot, Managing Director
AUM growth is driven by demand for secured credit, as evidenced by a conservative loan-to-value of 57%, rather than solely by gold price fluctuations, especially given the difficulty in obtaining unsecured loans.
“AUM growth depends on demand, not just price. Our current LTV is 57% at today’s prices, which shows people are not over-borrowing just because prices increased. Demand is driven by the fact that unsecured loans and microfinance loans are currently harder to obtain.”
— George Alexander Muthoot, Managing Director
Yields increased primarily due to one-off recoveries from old NPAs, auctions, and ARC sales, rather than a change in regular yields, despite ongoing competition from banks and NBFCs.
“Competition exists from both banks and NBFCs. Banks hold about 13 lakh crores in their portfolio, while NBFCs have about 3 lakh crores. We grew by 50%, which is decent. The yield increase is due to the recovery of old NPAs, which added 667 crores in interest, fresh NPA booking of 110 crores, auction income of 100 crores, and recovery from the ARC sale of 125 crores. Regular yields remain around 18.5-19%.”
— George Alexander Muthoot, Managing Director
The company’s strategy of allowing longer repayment periods for customers and avoiding aggressive gold auctions contributes to higher NPA recoveries and helps retain customer relationships.
“We give a lot of time to customers when they request it, which helps us get more business. We do not aggressively auction the gold. Our NPA was 3,700 crores at the beginning of the year and is now 2,300 crores. These recoveries include several months of accruals.”
— George Alexander Muthoot, Managing Director
The new regulation allowing freer branch expansion signals strong regulatory support for the gold loan business, which is a positive for future growth.
“The most important message is that the regulator is supportive of the gold loan business.”
— George Alexander Muthoot, Managing Director
The cost of funds has not decreased because banks have not significantly reduced their MCLR, despite a general declining rate environment.
“We are not seeing much decrease in rates from banks. Interest rates have been volatile, and banks have not significantly reduced their Marginal Cost of Funds-based Lending Rate (MCLR).”
— George Alexander Muthoot, Managing Director
New customer additions are stable at 440,000 per quarter, indicating a consistent inflow rather than a slowdown.
“We have 440,000 new customers coming in. It is not necessarily stabilized there; it is a steady flow of new customers.”
— George Alexander Muthoot, Managing Director
Auto Ancillary
Tata Motors Passenger Vehicles | Large Cap | Auto Ancillary
Tata Motors passenger Vehicles Ltd is a global automobile manufacturer known for cars and utility vehicles. With a focus on e-mobility solutions and innovation, it leads India’s commercial vehicles market and ranks highly in passenger vehicles. Tata Motors emphasizes engineering excellence and tech-enabled automotive solutions to meet evolving market and customer needs.
JLR acknowledges the global rise of Chinese OEMs but remains confident in its brand strength and unique vehicle capabilities as a competitive advantage, preferring a free trade environment to foster improvement.
“Chinese OEMs are coming, and they’re coming globally. So far outside of China, there hasn’t been that much of an impact in terms of the segments of the markets in which we operate. Because the one thing Chinese OEMs do not have is brands. And brands is where we are focusing, our unique selling point, along with the capabilities of the vehicles, which sort of emphasize those brands. So, there’s two choices. Either the world goes completely protectionist, in which case they’re protected from Chinese cars, but with considerable disadvantages, or it goes free trade. JLR prefers a free trade model. It is a better model for JLR, and we welcome competition. It will force us to be better. So, are we concerned? Yes. Are we paying close attention? Yes. Are we frightened? No.”
— Richard Molyneux, CFO, Jaguar Land Rover
JLR is entering a busy launch period, planning to release the Range Rover Electric, a new production Jaguar car, and the first EMA platform model this year.
“Yes. Of course. So, look, plans are always adjusting, but as of now, we’re going to launch the Range Rover Electric this year and start delivering to customers. And we’ll also unveil the new production Jaguar car this year. And finally, also unveil the first car off our EMA platform. That’s a unique new model from the Range Rover family that’s going to get built at Halewood. So, we are approaching a really, really busy launch period for JLR in the next couple of years.”
— Richard Molyneux, CFO, Jaguar Land Rover
Tata Motors expects Q4 growth of around 40%, leading to an FY26 growth in the mid-teens, significantly outperforming the industry’s projected 8-9% growth.
“So, the first month of quarter four was about 14% growth for the industry, we were at about 46%, we clearly see that the growth of industry in Q4 will be around 13% to 14% kind of a zone. We should be 40%, roughly that kind of a growth rate. So, we expect that for FY26, therefore, the industry would grow by about 8% to 9%, rough estimate, I would say. Whereas for us, we should be somewhere in mid-teens. So, it would be a double-digit industry-leading growth for us.”
— Shailesh Chandra, MD & CEO, Tata Motors Passenger Vehicles Limited
Sierra’s bookings are now in six digits, but production ramp-up is constrained by supplier capacity issues, not just in-house manufacturing.
“Yes, we can’t share with you the current status of the bookings, but I can clearly tell you that 70,000 is what we had announced on 16th December. It’s, of course, in six digits. As far as the capacity is concerned and ramp up, I think in Jan we were able to supply about 7,000 units and the deliveries started only from 16th Jan. So, we are clearly in a ramp up phase and the first, even before I talk about in-house ramp up, the first level problem is, on the supply ramp up from the suppliers itself.”
— Shailesh Chandra, MD & CEO, Tata Motors Passenger Vehicles Limited
JLR’s increased debt will not return to a net cash position within the next two to three quarters, indicating a longer recovery period.
“Our debt has increased. It will certainly not get back to net cash over the next two or three quarters. That is going to be something that takes a little bit more time.”
— Richard Molyneux, CFO, Jaguar Land Rover
JLR’s cash breakeven for the current year is significantly higher than its historical 325,000 units, with a detailed future outlook to be provided at the June Investor Day.
“So, it’s fair to say that this year our cash breakeven is significantly above 325,000 units, but that’s a metric that’s best used prospectively to judge how well the business is performing rather than retrospectively. Prospectively we will give you a proper update on FY27 and the years beyond in our Investor Day in June, so probably defer further conversation of that until then.”
— Richard Molyneux, CFO, Jaguar Land Rover
JLR views the challenges in the Chinese market as structural and permanent, impacting their performance more severely in recent months despite previous resilience.
“This is not a short-term boom-bust cycle. This is structural and permanent in China, and JLR has until very recently weathered the storm well with volume reductions lower than the market. But in recent months, we’ve suffered more severely.”
— Richard Molyneux, CFO, Jaguar Land Rover
JLR faces a challenging global market, with U.S. tariffs and Chinese luxury market pressures negatively impacting its performance.
“This reflects the pressures of tariffs in the U.S. and industry overcapacity, retailer margins, and luxury pushback in China. These are the two biggest car markets in the world, so when they both suffer simultaneously, the OEM’s world gets very difficult.”
— Richard Molyneux, CFO, Jaguar Land Rover
JLR acknowledges a universally adverse operating environment, necessitating business model adjustments to be detailed at their Investor Day in June.
“Looking forward, we have to face reality. The environment in which we are operating has changed rapidly and almost universally in an adverse direction. We recognize this will require us to adjust our business model, and we will share much more on this in our Investor Day in June.”
— Richard Molyneux, CFO, Jaguar Land Rover
The cyber incident severely impacted JLR’s production, leading to a significant drop in wholesale units for the quarter.
“The cyber event cost us around 50,000 units of production, and that led to a wholesale result of 59,100 units in the quarter.”
— Richard Molyneux, CFO, Jaguar Land Rover
Amara Raja Energy | Small Cap | Auto Ancillary
Amara Raja Batteries Limited is a technology leader and one of the largest manufacturers of lead-acid batteries in India for industrial and automotive use. The company provides batteries for various applications including Passenger Vehicles, Two Wheelers, Commercial Vehicles, and Industrial needs like UPS, Telecom, Railways, Defence, and Motive. They supply to top OEMs, Aftermarket, Private Labeling, and export to over 50 countries worldwide.
Amara Raja is strategically entering the BESS market, with a board-approved 280 crore capex for a 5 GWh plant expected to be operational by FY27, targeting significant market demand by FY31.
“Besides telecom packs, we are now shifting focus to battery energy storage solutions (BESS), where the market demand is expected to reach approximately 25-30 gigawatt hours by FY31. Our board has approved setting up a 5 gigawatt hour integrated solution plant with an estimated capex outlay of approximately 280 crores to cater to both grid and commercial industrial energy storage solutions. We expect this plant to be operational by the end of FY27.”
— Y. Delli Babu, Chief Financial Officer
The company invested an additional 200 crores into its lithium subsidiary, bringing the total investment to 1,400 crores.
“During Q3, we infused approximately 200 crores into Amara Raja Advanced Cell Technologies, which is our lithium subsidiary. With this, the total investment is now 1,400 crores.”
— Y. Delli Babu, Chief Financial Officer
Telecom lead-acid volumes plummeted over 45% in Q3, reducing its revenue share to less than 5% due to the ongoing shift to lithium.
“In telecom, volumes declined by more than 45% during the quarter. If you compare this to previous quarters, the overall telecom share in revenue has come down significantly. I think the share is now less than 5% of the overall revenue because of the transition to lithium.”
— Y. Delli Babu, Chief Financial Officer
BESS unit economics are complex due to varying lithium pack levels and container sizes, with the business initially relying on imported content but aiming for localization due to government mandates and domestic support.
“The per kilowatt hour price will vary significantly depending on the lithium pack levels and the size of the container required. It is difficult to provide specific unit economics right now. This business somewhat mimics the pack business because we will be importing a lot of content initially. Over time, there is a push because the government has stipulated certain percentages of BESS solutions that must be produced within the country. There is also support for domestic content inclusion, similar to what happened in solar.”
— Y. Delli Babu, Chief Financial Officer
The BESS business is expected to have high asset turnover ratios of 9-10 times, initially with imported components but potential for future cell manufacturing and better ROCE despite lower operating margins.
“The business demand is high, and asset turnover ratios are expected to be very high—anywhere around 9-10 times—because Amara Raja is providing the solution architecture while components are initially imported. Over time, this paves the way for localizing components, particularly cells. The cells used in BESS currently have a rating of approximately 314 Ah. Once we see robust demand evolving, we may go back and manufacture the cells as well. From an operating margin percentage level, it will be low, but from an ROCE level, it should be better as we move into this business.”
— Y. Delli Babu, Chief Financial Officer
Amara Raja aims for a 15% market share in the BESS segment, leveraging its strong telecom market position (55-60% combined lead/lithium) and EPC expertise to compete effectively in the evolving lithium market.
“Regarding competition, I suggest looking at what happened in telecom. When we started the telecom packs business, many players entered. Today, on a combined lead acid and lithium basis, we still hold about 55-60% of the market. While we agree that lithium is not a duopoly market like lead acid, especially on the pack side, we believe value will be provided by larger players who understand power requirements. Furthermore, Amara Raja Group is in the EPC business for solar generating stations, which allows us to participate in private tenders and supply solutions. To meet our 5 gigawatt hour target in a 30-40 gigawatt hour demand market would give us approximately a 15% market share, which is a rightful goal.”
— Y. Delli Babu, Chief Financial Officer
The company has flexibility to convert NMC lines to LFP with minimal capital expenditure if market demand shifts, while also exploring new chemistries like sodium-ion for future relevance.
“In the worst-case scenario, migrating an NMC line to LFP chemistry is not very taxing from a capital point of view. There could also be demand for NMC in export markets. Regarding new chemistries, we have a dedicated team looking into feasibility. As sodium-ion and others become relevant, we will work on them. For now, LFP remains the mainstay for mobility applications.”
— Y. Delli Babu, Chief Financial Officer
Export volumes declined due to the inability to supply to the US market this quarter and increasing competition in the Middle East/Asia-Pacific, prompting efforts to form a US subsidiary and monitor trade developments for stabilization.
“Regarding exports, last year we commenced supplies to the US markets, so those volumes were built into the base. This year, we were not able to supply any volume to the US in this quarter. In the Middle East and Asia-Pacific, where we are strong, competitive intensity is on the rise, leading to a natural drop in volumes. We are looking at mitigations and consider US markets too large to ignore. We are working on forming a small subsidiary to help stabilize our US business. We hope that as trade announcements are finalized, the situation will smoothen out.”
— Y. Delli Babu, Chief Financial Officer
Ashok Leyland | Large Cap | Auto Ancillary
Ashok Leyland specializes in manufacturing commercial vehicles, components, and diesel engines for industrial, genset, and marine applications. Its foundry division produces automotive parts like cylinder blocks, heads, and tractor housings, serving the automotive industry.
GST rate cut significantly lowered CV prices and triggered a fresh replacement cycle, driving 24% domestic MHCV growth in Q3 with momentum continuing into January 2026.
“The GST reset provided a much-needed trigger for a fresh commercial vehicle replacement cycle to kick in. GST rate rationalization not only lowered the prices of CVs significantly, but also created a major fillip in consumption and therefore in trade demand. It elevated sentiments of both retail and bulk buyers, resulting in strong volume growth in the last three months consecutively. In Q3, the domestic MHCV industry volume grew 24% with the overall MHCV industry growing by 21%. The LCV industry volume grew by 23%. The momentum has continued in January 2026 which augurs well for a strong FY26 finish.”
— Shenu Agarwal, Managing Director and CEO
Ashok Leyland plans to enter the biofuel segment soon and has a robust pipeline of new products scheduled for launch in the next six months.
“Shortly we will enter the growing biofuel segment as well. Our product pipeline remains strong with the launch of many more new products planned in the next 6 months.”
— Shenu Agarwal, Managing Director and CEO
Ashok Leyland is strategically expanding its international footprint, particularly in ASEAN, through partnerships for electric buses and defense vehicles.
“Ashok Leyland signed an MoU with PT Pindad of Indonesia... for the joint development of electric buses and defense vehicles for the Indonesian market... establishing ASEAN as our fourth home market outside India.”
— Shenu Agarwal, Managing Director and CEO
Management indicates that bulk buyers, initially cautious due to GST complexities, are now confidently returning to the market and projecting future demand, signaling the start of a new CV replacement cycle.
“Initially, we were a little apprehensive whether the bulk buyers would move forward because of complications relating to ITCs and cash flows. But now in January, we are much more optimistic about the future prospect, having seen the bulk buyers moving out and projecting their demand for the next many months. We are very confident at this point that this could be the start of a new replacement cycle in the CV industry.”
— Shenu Agarwal, Managing Director and CEO
Fleet age jumped from 7.5 to 10.5 years, creating massive pent-up replacement demand; GST cut may be the long-awaited trigger to normalize fleet age back toward 8 years over next few years.
“We had always been talking about the aging fleet and how the average age has gone up from 7.5 to 10.5 years. We were waiting for a trigger that could provide the replacement cycle to kick in, and we think this could be it. There is only one way this aging can move, which is to return to the normal. Ten and a half years is not sustainable for our industry. If GST and macroeconomic factors have triggered a replacement cycle, we will have good times ahead. There is also consideration from the government regarding scrapping in metro cities because of pollution. If those policies come in, they provide additional triggers. Reducing the age from 10.5 to 8 years would take a few years, but it represents potential demand in the market.”
— Shenu Agarwal, Managing Director and CEO
Management believes the logistics industry will accept higher vehicle prices for mandatory ADAS features due to the perceived value in improved safety and reduced damages, reflecting a shift in industry priorities.
“With ADAS, which is safety-oriented, people will see value in reduced accidents and lower damage to goods. It takes time to adopt new technologies, but industry dynamics have changed. Reliability remains important, but comfort and safety are playing a big role now.”
— Shenu Agarwal, Managing Director and CEO
Mahindra & Mahindra | Large Cap | Auto Ancillary
Mahindra & Mahindra Limited (M&M) is a prominent Indian automobile manufacturing company known for its wide range of mobility products and farm solutions. With a history dating back to 1947, M&M has established itself as a leading player in the industry by offering SUVs, pickups, commercial vehicles, tractors, electric vehicles, two-wheelers, gensets, and construction equipment.
GST rate cut viewed as fundamental shift triggering multi-year replacement cycle, not pent-up demand; improves LCV operator profit by 4-5% and enables customer upgrades to higher variants.
“The biggest impact of GST will be in commercial segments. It improves the cost of ownership and viability. A 10% change in price is a big shift for that segment. In LCVs, it leads to a 4-5% profit improvement for an operator. We believe this is a fundamental shift that will lead to a cycle of increased demand rather than just a short-term pent-up effect. The replacement cycle had been delayed due to COVID, and GST provided the needed impetus. In other segments, we think this enables customers to move up the ladder to higher variants or models. For instance, the 7XO pricing allows a 4.6 meter product to compete with 4.2 or 4.3 meter products.”
— Mr. Rajesh Jejurikar, ED and CEO of Auto and Farm business
The company will not launch new electric vehicle models this calendar year but plans two more LCV launches.
“No new EV launch is happening in this calendar year. For LCVs, we have done the Bolero Camper and Bolero pickup, and two more will happen this calendar year.”
— Mr. Rajesh Jejurikar, ED and CEO of Auto and Farm business
EU Free Trade Agreement enables duty-free car exports to Europe under quota system while reducing costs of imported electronic components, supporting both exports and competitiveness.
“On FTAs, the government did a fine balancing act. We want more car makers to invest in India to build a better ecosystem. The EU FTA allows us to export cars to Europe at 0% tax under a generous quota. It also lowers the price of imported components like electronic screens.”
— Dr. Anish Shah, Group CEO and MD
Memory chip shortages are a widespread risk affecting the entire vehicle portfolio, managed through short-term premiums and inventory, but remain a concern.
“Memory chip shortage is not an EV-specific issue; it affects the whole portfolio because it is used in infotainment systems. We are covered in the short run by paying premiums and building inventory, but it remains a risk similar to the semiconductor issue during COVID.”
— Mr. Rajesh Jejurikar, ED and CEO of Auto and Farm business
The company’s 25% EV mix target is an internal ambition, which may exceed the eventual, potentially lower, government-mandated CAFE norms.
“Regarding CAFE, the industry is engaging with the government. The 25% target we set was our own internal target and not strictly linked to what is needed by the CAFE norm. We expect the CAFE requirement will likely be lower than our internal target.”
— Mr. Rajesh Jejurikar, ED and CEO of Auto and Farm business
Samvardhana Motherson International Ltd | Large Cap | Auto Ancillary
Samvardhana Motherson International manufactures and supplies components to automotive OEMs through its divisions: Wiring Harness, Vision Systems, and Polymer Products. The company aims to be a globally preferred sustainable solutions provider, offering diverse products and services to strengthen its market presence.
Motherson is actively expanding its global manufacturing with 12 greenfield plants, including two new additions in India and Morocco, to support future growth across segments.
“We currently have 12 greenfield plants under development across emerging markets to support future growth in both automotive and non-automotive segments. In Q3, we have added two new greenfield facilities, one specialized in vision systems in India, and the other in wiring harness in Morocco.”
— Management, Senior Executive
Motherson’s non-automotive segments, consumer electronics and aerospace, are showing accelerated growth with a 21% year-on-year increase in Q3.
“This is evident in the accelerating growth of our consumer electronics and aerospace businesses. You can see that these businesses continue to gain traction, growing at a 21% year-on-year growth rate in the third quarter.”
— Management, Senior Executive
Motherson is acquiring Flexens Auto Electric’s wiring harness business to create a global growth platform for PV and consumer electronics, with completion expected by H1 FY27.
“During the quarter, we also signed an agreement to acquire 100% of the wiring harness business of Flexens Auto Electric, which will provide Samvardhana a scalable platform for PV and CE growth globally. This acquisition is expected to be completed by the end of H1 FY27.”
— Management, Senior Executive
Motherson expresses confidence in its adaptable business model, stating it is unconcerned with specific OEM performance shifts, believing it will succeed regardless of which vehicle models gain traction.
“I do not think we worry about which one is going to do better. In the automotive business, we have seen players go down and return to the top with the next model. Time is on our side. We are sure that the car the customer chooses is going to do well.”
— V. C. Sehgal, Chairman
Motherson’s entry into semiconductors in India is strategic, leveraging high entry barriers and strong commitment from technology partners who are investing equity.
“Semiconductor is extremely new in India and only a few companies are investing because entry barriers are large... Our technology partners are putting equity into these companies so they are fully committed.”
— V. C. Sehgal, Chairman
Engineering & Capital Goods
Pitti Engineering | Small Cap | Engineering & Capital Goods
Pitti Engineering Limited, formerly Pitti Laminations Limited, is India’s leading manufacturer of Electrical Steel Laminations, Motor Cores, and more. Known for quality and innovation, they also produce castings, fabricated parts, and machined components. The company focuses on expansion through integration and capacity enhancement, holding ISO certifications and numerous awards for excellence.
The company is strategically using factoring for export receivables to reduce working capital intensity, prioritizing the positive balance sheet impact despite higher costs compared to traditional financing.
“So we are reducing our intensity on working capital required for exports by doing factoring, which I mentioned in my speech. So the idea is to sell our receivables and take this off our books. Cost is maybe 0.5 percentage in terms of cost since factoring will be more expensive than traditional bill discounting. But we see that having a net effect on our balance sheet, which is far better than the cost.”
— Akshay Pitti, Managing Director and Chief Executive Officer
The Data Center segment is a rapidly growing market, with revenue contribution increasing and a projected growth faster than the broader industry in the medium term.
“Data Center segment showed particularly encouraging momentum with revenue contribution increasing from 2.7% in the previous quarter to 3.7% in Q3 FY ‘26. This reinforces our confidence in the segment’s potential to grow faster than the broader industry over the medium term.”
— Akshay Pitti, Managing Director and Chief Executive Officer
Mexican tariffs, mirroring US Section 232, remain in effect but are not significantly impacting sales, with the company maintaining a small discount to secure orders.
“So Mexico has the same tariff that the US had imposed under Section 232 for their free trade region, and that continues to be in effect as of date. On terms of engagement with the customer, I don’t think that has any meaningful impact on our sales performance to that region. We had a small discount that we had given last quarter to secure those supplies. And I think the same will continue to be enforced over the next few years.”
— Akshay Pitti, Managing Director and Chief Executive Officer
The company maintains a strong order pipeline in North America, has acquired two new customers, and expects improved US tariffs to accelerate further acquisitions, while Europe is a steady and growing contributor to machine components revenue.
“So in US and Mexico, basically North America, the order pipeline from our largest customer in the region remains strong. In terms of new customer acquisition, we had two customers acquired in the Mexico and US region in the last 2 quarters. And another two customers are in active engagement to get the orders. I think with the current tariff situation in US, those discussions should pick up more steam. As far as Europe is concerned, that region is continuing to grow steadily for us. I think it’s already contributing about 4% to 5% of the revenue. And going forward, I think it should be a significant contributor to our machine components business.”
— Akshay Pitti, Managing Director and Chief Executive Officer
The data center segment is a rapidly expanding market for the company, with client forecasts indicating 25-30% growth over the next 12-18 months.
“So data centers continue to remain an extremely fast-growing market for us. It continues to surprise us quarter-on-quarter. I think Q3, we had 3.7% revenue coming from this segment. And by all indications from our clients over the next 12 to 18 months, we should look at at least a 25% to 30% growth in this segment. So, data centers continue to remain strong. That’s all I can say about this segment.”
— Akshay Pitti, Managing Director and Chief Executive Officer
The company manufactures stators and rotors for DG sets in data centers, primarily for Cummins Generator Technologies, holding over 90% market share for these specific products with this customer.
“I was saying we make basically stators and rotors for our customer, which is used in the DG sets in data centers. Our main customer here is Cummins Generator Technologies. And in terms of competition, we have about 90%-plus market share in this product with them.”
— Akshay Pitti, Managing Director and Chief Executive Officer
Bharat Forge | Mid Cap | Engineering & Capital Goods
Bharat Forge Limited is a global leader in metal forming, catering to sectors like Automotive, Railways, Aerospace, and more. It specializes in manufacturing and selling forged components, including aluminum castings for the auto and industrial sectors. With multiple manufacturing facilities in India, it serves both domestic and international markets.
Destocking in the North American truck market negatively impacted export revenues, though growth in the industrial segment, particularly oil, gas, and aerospace, offset some of the auto sector’s decline.
“Continued destocking in the North American truck market had an adverse impact on export revenues in quarter three. While the auto sector was down 13%, the industrial segment witnessed a sharp 11% growth.”
— Kedar, CFO
A positive trade deal and signs of the US Commercial Vehicle market bottoming out with increasing orders are expected to provide significant growth momentum.
“The recent announcement with the trade deal has also been positive and, coupled with the CV market in the US bottoming out and beginning to show higher order intake, will also give us a lot of momentum.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The defense business is projected for a strong 30-40%+ growth next year, fueled by the ATAGS order and CKB production.
“On defense, we see a strong uptick driven by the commencement of the ATAGS order and the beginning of CKB production. We should look at 30-40%+ growth in our defense business next year.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The aerospace segment is poised for very strong growth in the coming years due to new programs and significant capacity additions.
“In the aerospace segment, we also see very strong growth next year and the year after because next year we have some new programs and some new capacities coming online, but significantly larger capacity is coming online the year after next.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The company plans to diversify its defense business across multiple verticals, including global opportunities, to mitigate risks associated with lumpy orders.
“We will de-risk defense from any one vertical. We will have multiple verticals; some will have continuous business and some will have lumpy business. We will look at global opportunities for all the products that we make.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The defense business has the potential to grow significantly, possibly becoming as large as the company’s current overall business, driven by global and Indian defense budget increases, with a target to reach 18-20% of revenues in the long term.
“Realistically, defense has the opportunity to become as big as our overall business is today if we look at global opportunities. Europe’s defense budget is going from 350 billion to 800 billion. India’s defense budget is growing 21% this year. Overall, there is huge growth in these sectors. It depends on what we play in and what we win, but clearly, 10-11% will definitely move closer to 18-20%. If things go right, it could be even more than that.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The company observes an increase in US Class 7 and 8 truck orders over the past two months, leading to confidence for a stabilized and growing market next year.
“You have seen the incoming orders in the US for Class 7 and 8 in the last 2 months; they have been on the upside. Generally, there is a sense of confidence given that the uncertainties of the last year are behind us. We are hoping that things will be better than last year, stabilized, and growing. That is what we are planning for.”
— Subodh, Group CFO
Quality Power Electrical Equipments | Small Cap | Engineering & Capital Goods
Quality Power Electrical Equipments, an Indian company, specializes in high voltage electrical equipment and solutions for global clients in the energy transition sector. With a focus on power generation, transmission, distribution, and automation, the company offers technology-driven products and solutions for electrical grid connectivity.
Discussing how data centers represent massive power requirements, with hyperscale facilities requiring gigawatt-level power infrastructure.
“With regards to your first question on data center, I think anything if you are doing on data centers, the only cost of running a data center apart from people is energy. Some of the data centers in India that we are talking about hyperscale is already 1 gigawatt that is what Google said. We are also looking at some projects like Fermi in US where they’re talking about 11 gigawatt in Texas.”
— Bharanidharan Pandyan (Joint Managing Director)
Emphasizing the enormous scale of data center power requirements - comparing it to powering an entire city.
“And with tax breaks in India with cheaper renewable power, I believe we should also be in that scale in the next four-five years in India. So, when you talk about 10 or 11 gigawatt, this is like a city of Pune that needs to be fed to a data center 24/7.”
Explaining that data centers create opportunities across multiple product lines, not just HVDC.
“There is going to be lot of high power equipments that’s being built, not just HVDC. It can be instrument transformers, wave traps, transformers. It’s just a power ecosystem.”
Tempering expectations - while optimistic about data center opportunities in India, he notes actual projects are still 2+ years away as investments haven’t materialized yet.
“So, whether or not HVDC, I don’t know, but whether there’ll be a lot of AC transmission equipments, 100% yes. And but do I see anything happening in the next two years? I don’t think so, because there has to be still some commitments like even the money is still not seen on the ground yet.”
Highlighting that the company is already executing data center projects internationally, particularly in the US and Europe.
“But in the US, we see a lot of hyperscale data centers coming up. We are working on some few opportunities. We just executed a Microsoft hyperscale data center in Finland.”
— Bharanidharan Pandyan (Joint Managing Director)
IT
Honasa Consumer | Small Cap | IT
Honasa Consumer Limited is a digital-first house of beauty and personal care brands focused on millennial customers. Their portfolio includes Mamaearth, The Derma Co., Aqualogica, Ayuga, BBlunt, and Dr Sheth’s. They cater to evolving consumer needs with purpose-driven brands powered by technology.
Honasa Consumer identifies men’s skincare as a rapidly growing segment, moving beyond traditional grooming to specific skincare products, representing a significant market opportunity.
“We believe men’s skincare is at an inflection point driven by volume consumer preferences. Men’s grooming has been discussed for quite a long time, but over the last decade, it was largely focused on shaving. In the last 3 years, we have specifically noticed a strong inclination towards skincare designed specifically for men.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
A change in Flipkart’s revenue recognition model had a 28 crore accounting impact on reported revenue, but underlying growth remained strong at 21.7% on a like-for-like basis.
“As mentioned in the last quarterly meeting, there is a revenue recognition impact due to Flipkart changing its revenue recognition model. This resulted in a 28 crore impact. However, if you correct for this basis, growth continues at 21%. On a like-for-like basis, it is 21.7%.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
All distribution channels, including e-commerce, modern trade, and general trade, are exhibiting strong double-digit growth, validating the company’s strategy of focusing on core categories.
“E-commerce is at 30% plus growth, while modern trade and GT are delivering 25% plus growth. We are seeing strong secondary growth, which is a great sign of brand traction. Our strategy of focusing on our core categories has clearly paid off.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
Derma Co is a standout performer among the young brands, demonstrating both strong growth and achieving a double-digit EBITDA margin.
“The star of this portfolio continues to be Derma Co, which is not only delivering strong growth but has also achieved a double-digit EBITDA profile.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
While online market share data is scarce, Derma Co has been independently recognized as the number one sunscreen brand in India by Euro Monitor, highlighting its strong position against legacy competitors.
“Honestly, there is no other reliable indicator of online market share for us. The only offline data we get is from Nielsen, but 60-70% of the market lies online. We did receive a Euro Monitor indication last year declaring that Derma Co is now the number one sunscreen brand in the country, ahead of legacy brands.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
The company actively manages its brand portfolio through regular repositioning and refreshes, such as Aqualogica’s upcoming Gen Z-focused update, to maintain relevance and appeal.
“Every 3-4 years, we re-evaluate our brands’ positioning for the future. We have done that with Mamaearth twice and Derma Co once already. Aqualogica has already seen significant work to make it more appealing to Gen Z, and a new refresh is coming up for the summer season.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
The company intends to preserve Mamaearth’s premium brand status by maintaining higher pricing and avoiding mass-market price points, aligning with the broader trend of premiumization despite potential distribution limitations.
“We have maintained, and will continue to maintain, a brand premium over mass brands. This is visible in our P&L; and our pricing. We do not participate in the mass-market price points of less than 20 rupees. Access to Mamaearth starts from 100 rupees. While this limits expansion into every single outlet, we believe premiumization is a mega-trend.”
— Varun Alagh, Co-founder, Chairman and Chief Executive Officer
BlackBuck | Small Cap | IT
Zinka Logistics Solutions is India’s largest digital platform for truck operators. It offers services such as digital payment management for tolling and fueling, driver and fleet monitoring through telematics, load finding on its marketplace, and financing for used vehicle purchases.
Blackbuck is successfully maintaining consistent profitability despite significant investments in new growth verticals like Superloads and vehicle finance.
“So, headline being that as all of you are aware we are investing very strongly in newer business verticals like superloads and vehicle finance. Despite those investments we’ve been able to keep up delivering consistent profitability and this story will continue to play out.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
The core tolling business grew its GTV by 24% year-on-year, significantly outperforming the industry’s 15% growth, indicating increasing market share.
“Underneath the core business, which is growth of 31.5%, tolling business which is basically one of the core revenue levers, that’s grown obviously more than 24% but the GTV growth is 24%. Which also is an important determinant how the revenue in the tolling business essentially grows versus the industry grew at about 15% which continues to call out that our market share is compounding, and we are able to grow healthily and continue to accelerate there.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
New growth businesses, primarily Superloads and vehicle finance, achieved a substantial 271% year-on-year growth and a 25% sequential growth.
“From a growth business perspective which is again largely led by super loads and vehicle finance, we had a growth of roughly 271% on a year - on - year basis. Sequential quarter roughly close to 25% growth which largely led by superloads.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
The Superloads business is actively expanding its operational footprint, now live in nine cities, indicating progress in its playbook building phase.
“Now giving a colour on super loads as we’ve always maintained super loads is in the phase of a very strong playbook building phase where obviously orders are scaling and we continue to launch newer cities as we speak. Last time when we were speaking, we were live in four cities now we live in totally nine cities.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Achieving a market share of 65% or more is considered possible, but the pace is dependent on industry dynamics and the growth of Blackbuck’s acquisition market share, potentially within a 2-3 year timeframe.
“Whatever number you just quoted is possible because we’ve been gaining market share continuously. But the point is the pace to reach there is hard to determine. It’ll all depend on basically how the whole industry sort of models out and when our acquisition market share like let’s say assuming that whatever number you said if our acquisition market share is that number then we can see this number reaching the market share number maybe in a 2 - 3 years timeline. So that’s how I think it will work.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Blackbuck’s platform and supply are secular across India, correcting the misconception of being solely southern-driven, with significant market shares in diverse states for long-haul trucks.
“Yeah, I think your question also had certain assumptions. Your assumptions were that we are predominantly a southern - driven company. I think that’s not true because our supply our platform the supply on the platform is pretty much secular all across the country. In fact , like states like Rajasthan, we enjoy like something like a 70% kind of a market share and like states like Andhra which are still not like fully fledged buyers we enjoy 50 - 55 - 60% kind of a market share. So , our market shares are anywhere in the range of 15 - 20% to as high as 70% from a long - haul big capacity trucks. So , the platform is really widely secular because the fleet management business is present everywhere across the country in like 80 - 85 - 90% of the pin codes right.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Blackbuck’s strategy focuses on directly serving SMEs for spot and cash-and-carry loads, while enterprise demand is channeled through transporters, and the company avoids direct engagement with large corporate shippers.
“As we have articulated like our marketplace strategy the end shippers are two: one is SMEs and other is basically corporates. Corporates are not equipped to work on a platform a spot kind of a platform where they can decide on a daily basis the rates . They will never ever come to a spot platform and that also involves working capital and involves the whole relationship management which is a little bit sticky and unscalable so we don’t believe in that business. SMEs we have already started working as we’ve always articulated there are various markets in which we are probably doing a good share of the business from SM E s so we are directly working which is largely spot and cash and carry and we will continue to work with transporters through which the enterprise demand will essentially get channelized so that’s how we will be working and we will never go to the end shippers because that’s not a market we would want to directly interact with.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Media & Entertainment
PVR | Small Cap | Media & Entertainment
PVR INOX Limited, formerly known as PVR Limited, is a player in the movie industry engaged in exhibition, distribution, and production. In addition to movies, it generates revenue through in-house advertising, food & beverages, gaming, and restaurant business. The groundbreaking merger between PVR and INOX has revolutionized the cinematic experience in India, offering a broad range of premium content, both international and regional. The company also provides a diverse range of food and beverage options to cater to various tastes.
The Indian theatrical business recorded its strongest year ever in Calendar 2025, with significant growth in box office collections above pre-pandemic levels.
“Calendar 2025 emerged as the strongest year ever for the Indian theatrical business with highest ever all - India gross box office collections of Rs. 13,400 crores up 13% year - on - year and nearly 32% above pre - pandemic levels.”
— Ajay Bijli, Managing Director
The company has achieved pre-COVID EBITDA margins at significantly lower occupancy levels for two consecutive quarters, highlighting effective merger synergies and cost optimization.
“Importantly, for two consecutive quarters now, the business has delivered 18% EBITDA margins at an occupancy of around 28% , compared to pre - COVID levels where similar margins were achieved at 350 to 400 bps higher occupancies. This underlines the sustained benefit of merger synergies and structural cost optimization, resulting in a more resilient and efficient operating model.”
— Ajay Bijli, Managing Director
While margins are optimal, the company is further optimizing costs through solar panel deployment and rental renegotiations, aiming for more efficient operating expenses.
“I think it’s already at a very optimal and healthy level in terms of the margins, if you look at it at 28% occupancy, 18% margins. Having said that, there are still line items in our P&L where we are working towards optimizing. For example, electricity cost is one area where if you notice, we have seen a 4% year - on - year drop because we are deploying solar panels on the rooftops of many of our cinemas... Also, rental renegotiations and seeking discounts and moving to more revenue share kind of deals will further make the overall rental cost more efficient.”
— Gaurav Sharma, Chief Financial Officer
The ongoing Warner Bros. and Netflix development is being closely monitored as it could significantly impact the global exhibition industry and various stakeholders, with the U.S. government also actively involved.
“On Warner and Netflix, again, the matter is ongoing. We continue to monitor it closely with our colleagues in North America, Europe and other parts of the country. It’s an event which is going to have an impact on the global exhibition industry and , therefore, all exhibitors are looking at the events and the developments in a very close fashion... Clearly, the U.S. government is also in a very proactive fashion, looking at this combination in a very serious fashion because they feel it will impact a lot of stakeholders...”
— Kamal Gianchandani, Chief Business Planning & Strategy
Services
VA Tech Wabag | Small Cap | Services
VA Tech Wabag Limited is a multinational technology company based in India, providing water solutions to industries and municipalities globally. They focus on creating sustainable water and wastewater infrastructure for industries like oil & gas, power, steel, and food & beverages. With operations across various continents, the company has positively impacted millions of lives by ensuring access to clean water and a healthy environment.
Despite soft oil prices, the company does not anticipate a slowdown in Middle East project pipeline or conversion, as water treatment is a necessity, and their projects are typically backed by multilateral or sovereign funding, ensuring payment security.
“Shahzad, the geographies that we work in, whether it is Middle East or Africa, for them, water treatment is not an option. It cannot be dependent on whether the oil prices go up, come down. That may give them a fillip to do more, but they will have to still do the basic water treatment that is required... So we have generally not seen “any slowdown” as you mentioned. Jobs are good... And third, of course, the kind of projects we pick, multilaterally funded, sovereign backed, LC backed allows us to get larger projects with good payment security and insulates us fairly from any of these risks.”
— Skandaprasad S. Seetharaman, Group Chief Financial Officer
International projects offer faster execution timelines and significantly better working capital and cash flow profiles compared to Indian projects, driven by more efficient collection cycles in regions like the Middle East and Africa.
“See, generally, international orders are a little faster than the Indian orders. On a broad basis, you could take about 2.5 to 3 years as the general timeline for a large EPC project. Of course, it depends project by project, what scope it is, what kind of project it is, size of the project will determine the time line. In terms of working capital, of course, the international mix brings a lot of advantage to the working capital, because the cycle times of collections are better, especially in the Middle East and African geographies... So from both a working capital perspective and cash flow perspective, the international projects are certainly better as compared to equivalent Indian projects.”
— Skandaprasad S. Seetharaman, Group Chief Financial Officer
The domestic order book is expected to pick up significantly in early next year, with a strong pipeline of deferred government, private, and municipal projects converting into orders, despite recent flatness.
“As far as India order backlog is concerned, we have a healthy position as of now. And going forward, as I told earlier, many of the prospects almost on the verge of conclusion. And as I told you, Rs. 3,000 crores of order is already in visibility. As far as pipeline is concerned, we see a very strong pipeline. Some of them have only got deferred, which is going beyond this quarter. But early next year, we see many of those prospects converting. And while I say that, it’s a mix of government, private investment, municipal bodies.”
— Shailesh Kumar, CEO - India Cluster
Energy
ONGC | Large Cap | Energy
Oil & Natural Gas Corporation (ONGC) is a leading exploration and production company in India, offering in-house service capabilities in all aspects of oil and gas exploration. With state-of-the-art technologies like depth domain processing and stochastic lithofacies modeling, ONGC specializes in advanced oil-field services.
New well gas revenue exceeded 5,000 crores in nine months, demonstrating a significant premium over APM gas prices and contributing over 18% of total gas sales, highlighting its increasing importance.
“During this nine-month period of FY26, revenue from new well gas crossed 5,000 crores. This delivered an additional 944 crores compared to the APM gas price, reflecting the premium eligibility of new well gas. Notably, new well gas now contributes over 18% of ONGC’s total gas sales revenue, underscoring its growing significance in the company’s portfolio.”
— Vivek Songaonkar, Director of Finance
The critical infrastructure for the KG-98/2 project, including SURF and SPS, is nearing completion after all 26 wells have been drilled, indicating progress towards production.
“With regard to KG-98/2, as you are aware, all 26 wells have been drilled so far. I am happy to share that as per the latest update, the subsea umbilical, risers, and flow lines (SURF) and the subsea production system (SPS) works are nearing completion.”
— Vivek Songaonkar, Director of Finance
The Mumbai High field is showing production gains from TSP 1, and the Daman Upside Development Project is set for monetization soon with a peak gas output of 4-5 MMSCM.
“Coming to the Mumbai High field, the TSP 1 is already showing encouraging production gains. Additionally, the Daman Upside Development Project in western offshore is also on track to be monetized soon, with a peak gas output expected at 4-5 MMSCM.”
— Vivek Songaonkar, Director of Finance
KG-98/2 gas flow is anticipated to begin in Q1 FY27 (April-June) and ramp up to 5-6 MMSCMD by the end of FY27.
“We expect that the gas flow from these wells should start from the next quarter, which is April to June, and the gas would be ramped up. Toward the end of FY27, we expect that this gas quantum should increase to 5-6 MMSCMD.”
— Vivek Songaonkar, Director of Finance
The force majeure on the Mozambique LNG project has been lifted, with work resumed and production expected by 2028 without any increase in capex.
“On Mozambique, the force majeure has been lifted and work has started on the ground. It is on track to start LNG production from 2028 onwards. Capex remains the same with no further increase.”
— Vivek Songaonkar, Director of Finance
Metals
Hindalco | Large Cap | Metals
Hindalco Industries is a leading company in the aluminium and copper industries. It operates in multiple countries with a variety of established units. The company’s segments include Aluminium, producing hydrate, alumina, aluminum products, and Copper, manufacturing copper rods, cathodes, sulfuric acid, and other products. Hindalco is a major player in the global copper rod market and specializes in high-margin, high-growth specialty alumina products.
Hindalco is aggressively expanding its renewable energy capacity, aiming to reach 522 megawatts by the end of FY26 through a mix of solar, wind, hydro, and storage-based power projects.
“At the end of this quarter, our renewable energy capacity was at 418 megawatts, powered by solar, wind, and hydro resources. We are on track to adding another 103 megawatts in the following quarter, and are well advanced in our round-the-clock renewable energy initiative, with 130 megawatts of storage-based power to be deployed this year, taking our renewable capacity to 522 megawatts by the end of this financial year.”
— Satish Pai, Managing Director
Chinese copper smelters are agreeing to zero-cent per pound treatment and refining charges (TCRCs) for 2026, indicating a significant and tightening deficit in the global copper concentrate supply.
“On the TCRC front, Chinese smelters are finalizing the 2026 long-term copper concentrate contracts with Antofagasta Minerals at 0 cents per pound, underscoring a sharply tightening near-term structural deficit in the global concentrate market.”
— Satish Pai, Managing Director
Hindalco’s major upstream expansion projects, including the Aditya Alumina refinery and aluminum smelters, are on track, supporting the company’s goal to double its upstream capacity.
“Our key upstream expansion projects of Aditya Alumina refinery and aluminum smelters are progressing well and remain on schedule as we move ahead with our objective of doubling down on our upstream capacity.”
— Satish Pai, Managing Director
Indian aluminum exports are not currently restricted by CBAM because power emissions are not yet included, making exports to Europe potentially more attractive under existing trade agreements.
“In aluminum CBAM, power is not included right now. The Indian aluminum carbon per ton is no different from the Middle East or elsewhere because power is not yet part of CBAM. Until that gets included, CBAM is not a restriction for any Indian aluminum exports. In fact, following the current trade unit agreement, exporting to Europe will become more attractive for us.”
— Satish Pai, Managing Director
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 Kashish, 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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