The Chatter: Talking Points
Edition #41
Welcome to the 41st 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 13 companies across 8 industries, along with an international features.
Retail
Titan
FMCG
Sapphire Foods India
Energy
Smarten Power Systems
Software Services
Coforge
Engineering & Capital Goods
Vidya Wires
KSH International
Financial Services
Shriram Finance
Cholamandalam Investment and Finance
Textiles
Raymond Lifestyle Ltd
Auto Ancillary
Mahindra & Mahindra
Samvardhana Motherson International Ltd
International
Broadcom Inc
Birkenstock
Retail
Titan | Large Cap | Retail
Titan Company, India’s leading lifestyle company, offers watches, jewelry, eyewear, wearables, Indian dress wear, fragrances, and fashion accessories. With a focus on superior customer experience, Titan has established leading positions in the jewelry, watches, and eyewear categories, driven by trusted brands. The company is known for its deep understanding of customer preferences and is highly respected in the industry.
Titan recently launched its Lab Grown Diamond brand – BeYon. This call was scheduled w.r.t the development.
Titan anticipates continued price erosion and potential commoditization in the lab-grown diamond market due to its technological nature and increasing competition.
“We know that this is a category which, because it is man-made and a product of technology, prices can only go down. With many players having entered it—close to 500 stores currently and about 100 odd players or more and counting—we always felt that this could get commoditized.”
— Ajoy Chawla, Managing Director
Consumers are aware but confused about LGDs, partly due to competitors misrepresenting them as natural diamond alternatives and offering inappropriate exchange policies.
“What we have recognized is that the customer, thanks to the media narrative, is now fairly aware of this category but also a little confused. Many players who have jumped in have looked at the low-hanging fruit of trying to pitch it as an alternate to natural diamonds and offering all kinds of exchange policies, even though this category is perhaps not suited for that.”
— Ajoy Chawla, Managing Director
Titan believes the Indian market is unique, allowing both natural and lab-grown diamonds to coexist and independently contribute to overall diamond adoption.
“Our first learning really has been that India is an “and” market where both could coexist. There is an opportunity for both to play independent of each other in driving adoption for diamonds as a whole.”
“It has been a step-by-step process of consumer understanding. Exploring this through a stage-gate approach gives us confidence that India is an “and” market, very different from the US. We don’t expect cannibalization of the order that would keep us from playing in this space.”
— Arun Narayan, CEO of Jewelry Division
Titan plans to initially focus on understanding BeYon’s unit economics in a few metro stores before pursuing aggressive expansion beyond top cities.
“While initially we might understand the unit economics over the next 5-10 stores which may come up in the next few months, we will not restrict ourselves eventually to just top metros. It will go well beyond once we have understood how it is progressing.”
— Ajoy Chawla, Managing Director
BeYon will be a comprehensive brand with online and offline presence, focusing on fashion-forward, experimental indulgence to attract new customers and facilitate their progression to other Titan diamond brands.
“Yes, beYon will be a full-fledged brand play with e-commerce plus retail. We should open our e-commerce website very soon. Having said that, for a customer, each of these are very strong brands with their own propositions. BeYon really plays in being fashion-forward, experimental, and plays to the indulgence aspect of diamonds. The idea is to bring consumers early into the category and bring them more often, then they can cross over to Mia, CaratLane, and then Tanishq.”
— Arun Narayan, CEO of Jewelry Division
Titan is pricing its LGDs competitively at Rs 23k-25k per carat, below the market average, and will offer exchange value only for the gold component, not the LGD stone itself.
“Currently, the way we have priced our LGD diamonds, it is around 23,000 to 25,000 rupees a carat. The market is operating at around 30,000 rupees a carat, though some players go up to 40,000 or 50,000. Wholesale prices are much lower, and therefore there is scope for retail players to price aggressively. We have kept in mind that there is no exchange value for the LGD diamond, though there will be exchange value for the gold which houses it.”
— Ajoy Chawla, Managing Director
Titan currently plans to rely on external, high-quality partners for LGD sourcing and will primarily use 14 and 18 karat gold, with some silver, for beYon jewelry.
“We do not expect to be backwardly integrated at the moment. We are working with very reputed partners whose quality standards match ours. The jewelry we have is in 14 and 18 karat gold and we have a small collection in silver as well. We are open to materials, but primarily gold and silver to begin with.”
— Arun Narayan, CEO of Jewelry Division
Beyond’s value proposition centers on empowering consumers, especially younger women, to make independent and indulgent diamond purchases without external approval.
“To exemplify, during our pilots, a young girl working in a hotel bought a product out of sheer indulgence without checking back with her home. That is the young persona we are looking for. Another woman said when she buys from her husband’s money, she buys natural, but when she buys from her own savings, she picks a lab-grown because she does not need to seek permission. This freedom is at the heart of the Beyond value proposition.”
— Ajoy Chawla, Managing Director
FMCG
Sapphire Foods India | Small Cap | FMCG
Sapphire Foods India Limited is a leading restaurant operator in the Indian subcontinent, serving customers with great food and experience in key metropolitan areas. As a franchisee of YUM, it focuses on brand and food category expansion, with an efficient in-house supply chain and technology solutions like SAP ERP and POS software.
Sapphire Foods and Devyani International are merging. This call was scheduled w.r.t the development.
Management giving some numbers about the scale of merged business
“The merged entity will have more than 3,000 stores globally and a turnover of approximately 8,000 crores on an annualized basis.”
“By the time the merger gets consummated, the merged entity is likely to cross $1 billion in annual revenues.”
— Ravi Jaipuria, Non-Executive Chairman, Devyani International
The merged entity will assume marketing, innovation, technology, and supply chain for Pizza Hut, but only technology and supply chain for KFC, leaving KFC marketing with Yum!.
“For Pizza Hut, we will be taking over marketing, innovation, technology, and supply chain functions. Whereas for KFC, as of now, it is only going to be technology and supply chain management.”
— Management Spokesperson, Executive
The immediate priority for Pizza Hut post-merger is to achieve a positive, low double-digit brand contribution margin by focusing on business turnaround rather than aggressive store expansion.
“in the first year post-merger, we expect to achieve a positive brand contribution margin for Pizza Hut, aiming for low double digits. We have negotiated with Yum! that our priority is to turn the business around rather than being under stress to open net new units.”
— Management Spokesperson, Executive
A unified technology roadmap with a common basic tech stack will drive speed and innovation across all brands, focusing on faster in-store service and delivery to enhance the QSR experience.
“Our technology roadmap will be common for all brands. While the UI/UX will be brand-specific, the basic tech stack will be unified. In the QSR world, speed and innovation are paramount—meaning faster turnaround in stores and faster delivery. That will be a big focus.”
— Management Spokesperson, Executive
The 320 crores payment to Yum! is a one-time merger cost, distinct from the recurring annual synergies of 210-225 crores that will benefit the business long-term.
“The 320 crores is a one-time payment to Yum!, whereas the synergies of 210-225 crores will accrue year after year for the entire lifespan of the business. It is not a direct comparison.”
— Management Spokesperson, Executive
Energy
Smarten Power Systems | Nano Cap | Energy
Smarten Power Systems Ltd designs and assembles power backup and solar products like home UPS, inverters, PCUs, and charge controllers. It also trade solar panels and batteries, sell via distributors in India, and export all products except solar panels.
Smarten Power Systems aims to become a prominent consumer electronics brand for energy solutions in India and other emerging global markets.
“Our long term vision is to transform Smarten into a trusted mass market consumer electronics brand, especially in the batteries, inverters and distributed solar energy solutions, not just in India but across emerging global markets such as Africa, Asia and Middle East.”
— Ravi Dutt, Whole Time Director
Smarten aims for approximately 30% annual revenue growth, targeting a doubling of its current revenue within the next three years.
“Every year we are targeting about 30% growth, and within the next three years, we are targeting for the double of this revenue. This is our target.”
— Arun Bhardwaj, Managing Director
While lead-acid batteries still dominate Smarten’s sales, lithium-ion batteries are gaining traction, though their local “manufacturing” is currently limited to assembling imported cells.
“Right now, our majority of batteries portion come from lead - acid batteries only, but for the last two years, lithium - ion batteries are taking place instead of lead - acid batteries. But in lithium - ion batteries, all companies are importing cell from outside India and lithium - ion batteries are more of an assembly of electronics because there is a BMS unit and there is a cell.”
— Ravi Dutt, Whole Time Director
Software Services
Coforge | Mid Cap | Software Services
Coforge provides IT/ITES solutions globally, specializing in Application Development & Maintenance, Managed Services, Cloud Computing, and Business Process Outsourcing. It serves sectors like Financial Services, Insurance, Travel, Transportation & Logistics, Manufacturing & Distribution, and Government, delivering tailored technology solutions to enhance business operations.
The acquisition is projected to create a $2.5 billion tech services leader, significantly boosting scale and capabilities in AI-led engineering, cloud, and data.
“Coforge’s acquisition of Encora will create an approximately $2.5 billion tech services powerhouse with both the scale and capability across AI led engineering, cloud, and data services to drive enterprise grade AI solutions.”
— Sudhir Singh, Chief Executive Officer
The combined entity forecasts $2 billion in revenue from AI-led engineering, data, and cloud services by FY2027, highlighting aggressive growth in these key areas.
“AI-led engineering plus data plus cloud services alone are likely to deliver $2 billion revenue in FY 27. AI-led product engineering business for the firm is likely to be a US $1.25 billion plus business in FY2027, cloud services, a $500 million business, and data engineering, a quarter of a billion, US $250 million business.”
— Sudhir Singh, Chief Executive Officer
The acquisition will immediately scale up Coforge’s High-Tech and Healthcare verticals to approximately $170 million each, broadening its industry presence.
“The second reason, high-tech and healthcare industry verticals of Coforge are expected to reach material scale immediately post-acquisition. The high-tech vertical will be a $170 million run rate business with several $10 million + relationships post-acquisition. The healthcare vertical of the combined firm will be again a $170 million run rate business.”
— Sudhir Singh, Chief Executive Officer
The acquisition significantly bolsters Coforge’s near-shore delivery capacity in LATAM, enhancing its talent pool for U.S. clients.
“Number three, this will reposition Coforge as a player with scaled-up near-shore delivery capability in LATAM, with an exceptional engineering and AI talent base servicing U.S. clients. Encora has a large and widespread near-shore delivery capability with more than 3,100 delivery team strength in its LATAM delivery centers.”
— Sudhir Singh, Chief Executive Officer
The acquisition is projected to be EPS accretive on a consolidated basis due to Encora’s strong margins and anticipated synergies, despite equity dilution.
“Despite the primary infusion, the deal is not expected to be EPS dilutive on a consolidated basis because of the strong margin profile of Encora and expected synergies from the two businesses, that is Coforge and Encora coming together.”
— Saurabh Goel, Chief Financial Officer
Encora’s capabilities in agent-native product engineering, AI foundation, data readiness, and AI Ops are top-tier, originating from Silicon Valley and serving leading high-tech companies globally.
“If you were to reflect on some of the services that they offer, these include agent native product engineering, they include AI foundation build, they include data readiness, validation and creation, they run the entire gamut of services across AI Ops. In terms of capability, this is once again just to reiterate, a firm born in the Silicon Valley, servicing some of the cutting-edge, leading high techs across the world, which would rank and stack up as one of the best, if not the best in this space, with a peer set anywhere around the world.”
— Sudhir Singh, Chief Executive Officer
Encora’s existing clients present significant cross-selling opportunities for Coforge’s broader 11 technology service lines, as Encora previously missed out on business due to a lack of scale in areas like BPS, AI-led QE, and ERP platforms.
“Coforge has 11 technology led service lines AI-led engineering is only one of them. As we have had conversations with leaders of the top accounts of Encora, it is very apparent to us that they have lost or walked away from a lot of business just because they did not have scale when it came to BPS, when it came to AI-led QE, when it came in some cases to enterprise platforms, especially cloud-based ERP platforms, and in some cases when it came to data and cloud-based operations as well.”
— Sudhir Singh, Chief Executive Officer
Engineering & Capital Goods
Vidya Wires | Micro Cap | Engineering & Capital Goods
Vidya Wires Ltd. manufactures copper and aluminium winding wires, strips and conductors used in transformers, motors, power and renewable energy sectors. The company offers diversified electrical solutions with expanding capacity to meet growing industrial demand.
The company expects to almost double its market share from 5.7% to 11% post-expansion, moving from the fourth to the third largest player.
“Today, Vidya Wires is the fourth largest player in the Indian winding and conductivity product industry with a 5.7% market share. With our ongoing expansion, we are well poised to become the third largest with 11% market share.”
— Shailesh Rathi, Managing Director
The company’s backward integration for 35-40% of its copper rod needs provides a competitive advantage and ensures product excellence.
“A key pillar of our competitive advantage is our backward integrated manufacturing model. We produce oxygen - free copper rods in - house from copper cathodes meeting approximately 35 % to 40 % of our copper rod requirements internally.”
— Shailesh Rathi, Managing Director
The company’s diversified customer base, with high repeat revenue and no major customer concentration, indicates a de-risked business model.
“Our business model is well de - risked. In FY 2025, we serve to more than 458 customers with no single customer contributing more than 9% of our revenue. Our repeat customers revenue stands at an impressive 94%.”
— Shailesh Rathi, Managing Director
The company is expanding its product portfolio to include 6 new categories, focusing on high-voltage, EV, and solar applications, indicating strategic diversification into high-growth areas.
“Looking ahead, we are systematically broadening our product range from 12 to 18 product categories. Our expansion roadmap includes high voltage products such as continuously transposed copper conductors, enamelled aluminium products, multi - paper covered copper conductors, PV ribbons, specialized enamelled copper strips for electric vehicles, solar cables, and copper foils.”
— Shailesh Rathi, Managing Director
The company operates on a 100% back-to-back pricing model, fully passing on copper price increases to customers, and does not anticipate significant demand slowdown despite high copper prices due to strong order book and outlook.
“Basically, we have a completely back to back pricing model. So about the pricing pass on, it would be 100% whatever price increase in the LME is there will be passed on to the customer. So there is nothing about that. Yes, about the demand, it may little here and there, can go a bit here and there. But as the orders position and the demand outlook is good, we do not see any, basically the demand can go slow.”
— Shailesh Rathi, Managing Director
KSH International | Small Cap | Engineering & Capital Goods
KSH International Ltd. manufactures and exports magnet winding wires and conductors used in transformers, motors, generators, and industrial equipment. It serves major OEMs across sectors and maintains a strong domestic and global supply presence.
Continuously Transposed Conductors (CTC) is a key differentiating product for KSH International, contributing over half of its specialized winding wire business and distinguishing it from competitors.
“CTC is what differentiates us from all our listed peers, and accounts for more than half of our specialized winding wire business.”
— Rajesh Hegde, Managing Director
Global transformer manufacturers are expanding capacity due to a significant supply bottleneck in power medium and distribution transformers, indicating robust demand for KSH’s products.
“The primary bottleneck is the supply of power medium as well as distribution of transformers, which is driving capacity expansion by transformer manufacturers globally.”
— Rajesh Hegde, Managing Director
Driven by strong T&D sector demand, the company is prioritizing rapid expansion of CTC capacity and the introduction of standard and EV wire machines by FY27.
“Given the current demand and environment in the T&D sector, our endeavour is to ramp up the CTC capacity as quickly as possible and bring some of the standard and EV wire machines over the course of FY ‘27.”
— Amod Joshi, Chief Financial Officer
KSH International is strategically licensing patented PEEK wire technology from HPW to indigenize production for the emerging global shift to 800-volt EV traction motors.
“And globally, what’s happening is the, when you shift to 800 volts, because of faster charging, etcetera, then the, you know, PEEK wires are generally used by these manufacturers of traction motors. Our, I mean, why we have gone with HPW is that HPW is one of the two manufacturers with patented technology for PEEK wires.”
— Rajesh Hegde, Managing Director
The PEEK wire venture for EV motors is a forward-looking investment, with significant market impact and financial benefits projected to commence after FY27.
“But this will not have an immediate, impact. But, you know, we will be working on programs with some of the manufacturers for EV motors. And that’s where the real benefit will come maybe, after FY ‘27 is when we expect to.”
— Rajesh Hegde, Managing Director
KSH International maintains a significantly higher EBITDA per ton than peers due to its 75% focus on specialized winding wires, which inherently offer superior profitability.
“Yes, so if you compare us to our peers, you know, we would, you know, out of the total capacity, almost 75% of our businesses actually specialized winding wires. Whereas if you compare with some of the other peers, they would be exactly reverse or maybe focused only on the standard magnet winding wires.”
— Rajesh Hegde, Managing Director
HVDC specialized magnet winding wires represent the highest value-added and most profitable product segment, reinforced by an initial order for 11 transformers.
“And HVDC, specialized magnet winding wires, which go into the HVDC segment are the highest value addition, actually, or are the most profitable orders within our family of products as well. And, we -- this is an initial order of 11 transformers.”
— Rajesh Hegde, Managing Director
Despite US tariffs, customers importing KSH International’s specialized magnet winding wires are absorbing and passing on the costs, demonstrating strong demand and product inelasticity.
“But today, the customers who are buying this material, they are paying – they are paying this tariff and absorbing this tariff and passing it down to their customer, end customer.”
— Rajesh Hegde, Managing Director
The company’s business model incorporates a direct pass-through for LME copper prices and exchange rates, effectively eliminating commodity price risk.
“Thus, LME copper prices and exchange rate is a direct pass-through for us, and we do not take any exposure to short or long-term variations in the copper price.”
— Rajesh Hegde, Managing Director
Financial Services
Shriram Finance | Large Cap | Financial Services
Shriram Finance specializes in financing, offering a range of financial products such as commercial vehicle loans, personal loans, and more. They focus on customization to meet the individual needs of customers, aiming to empower both individuals and businesses through tailored financial solutions.
Shriram Finance is partnering with MUFG, which will acquire a 20% stake and infuse approximately US$4.4 billion in fresh capital.
“The proposed partnership with MUFG will be with a 20% stake, in the sense, the professional allotment given to them. So fresh capital would be coming in with approximately US$4.4 billion.”
— Umesh Revankar, Executive Vice-Chairman
The company aims to accelerate its growth rate from the current 16-17% to 18-20% following the capital infusion.
“We have been growing around 16%-17%. We would like to grow another 3%-4% more, that is anywhere between 18%-20%.”
— Umesh Revankar, Executive Vice-Chairman
Shriram Finance expects its borrowing costs to decrease by approximately 100 basis points over the next two years due to the strategic partnership and rating upgrades.
“Overall we believe the 100 basis point advantage will get over the next two years on our borrowing cost.”
— Umesh Revankar, Executive Vice-Chairman
MUFG’s extensive international investment experience, including in Asian markets, is seen as a beneficial factor for Shriram Finance.
“The MUFG has an investment in Morgan Stanley with 23.7. And apart from that, they have investment into 4 Asian countries, that is Philippines, Vietnam, Thailand and Indonesia and their experience in these countries have been good.”
— Umesh Revankar, Executive Vice-Chairman
Shriram Finance aims to double its new vehicle market share from 3% to 6% over the next three years.
“See, basically, our new vehicle market share is very low. It’s around 3%, including the passenger vehicle among the overall new vehicle sales, which we would like to double it in the next three years.”
— Umesh Revankar, Executive Vice-Chairman
Cholamandalam Investment and Finance | Large Cap | Financial Services
Cholamandalam Investment and Finance Company is an RBI-registered NBFC-UL, offering diversified financial services including Vehicle Finance, Home Loans, Loan against Property, SME loans, and Unsecured Loans. It operates primarily in India and focuses exclusively on financing activities without separate geographic segments.
The company’s net worth has significantly increased by over INR 3,000 crores since FY25 closing, reaching INR 26,783 crores by November 2025.
“The net worth of the company stood at INR 26,783 crores as of November 30th, 2025, which is an increase of more than INR 3,000 crores over FY25 closing levels.”
— Vellayan Subbiah, Executive Chairman
The company explains its cash collection practice as a necessary aspect of catering to underserved segments in rural and semi-urban areas where borrowers often deal in cash.
“But some of these borrowers obviously earn and pay in cash, right, including for their EMIs from us. And obviously the amounts we collect in cash have to be deposited in banks.”
— Vellayan Subbiah, Executive Chairman
The company is actively pursuing legal action for libel against the agency due to its erroneous reporting and the stir it created.
“We definitely looks like there is clear scope that will, where they, given such erroneous reporting, that there is scope for libel. So, we will, we are going to basically engage, with legal advisors that will basically help us in terms of taking action against the agency, which we definitely think is warranted, given the nature of how they have kind of just gone out with all this erroneous information and created a stir around it.”
— Vellayan Subbiah, Executive Chairman
Murugappa Management Services (MMS) was established to centralize various consulting and review services for all 29 Murugappa Group businesses.
“MMS was incorporated as a company to provide consulting and review services to all the 29 businesses of the Murugappa Group, right. And so basically at the Group corporate level, several functions were centralized and focused.”
— Vellayan Subbiah, Executive Chairman
The CFO clarifies that earlier related party transaction figures were lower as certain entities did not meet the regulatory definition of a related party at the time.
“During the earlier part of this period, certain companies need not be classified as related party as per the regulations by itself, because they were not either a subsidiary or an associate in terms of their definition of related party. And hence, in the earlier part of the years, these were not related party transactions.”
— Arul Selvan, Chief Financial Officer
The proportion of cash collections has significantly reduced from 50% to 15% over time, indicating a positive trend towards digital payments.
“But the cash collection, which used to be 50% sometime back, long time back, has come down to now 15%. Correct.”
— Ravindra Kundu, Managing Director and Chief Executive Officer
Textiles
Raymond Lifestyle Ltd | Small Cap | Textiles
Raymond Lifestyle, formerly known as Raymond Consumer Care, is a leading Fashion and Retail company with iconic men’s fashion brands and a vast retail network. Incorporated in 2018, the company offers a wide range of fashion products and services including branded textile and apparel brands across formal, casual, and ethnic wear.
Income tax reductions are anticipated to boost disposable income and consumer sentiment, serving as a crucial catalyst for volume-led growth in the upcoming quarters.
“The recent income tax reductions introduced in Budget 2025 are expected to enhance disposable income and uplift consumer sentiment, creating a favorable environment for business growth and demand recovery. We view this tax relief as a key catalyst for volume - read growth in the coming quarters.”
— Amit Agarwal, Group Chief Financial Officer
The company’s current UK sales of approximately INR 150 crores annually have the potential to double within the next 2-2.5 years, contingent on the full enactment and benefits of the India-UK Free Trade Agreement.
“So, we are doing close to INR 150 - odd crores of sales to UK. I think it has a very good potential to double itself in the next two to two and a half years.”
— Amit Agarwal, Group Chief Financial Officer
Management expects income tax cuts (₹1 lakh crore) and GST reduction on apparel below ₹2,500 to be key catalysts for volume-led growth in coming quarters.
“The recent income tax reductions introduced in Budget 2025 are expected to enhance disposable income and uplift consumer sentiment, creating a favorable environment for business growth and demand recovery. We view this tax relief as a key catalyst for volume-led growth in the coming quarters. In addition to that, the GST rate reduction on select apparel with prices below ₹2,500 is likely to further stimulate demand, particularly within mid-tier and value-driven segments. Early indicators point to a positive shift in consumer behavior, with rising footfall across key retail zones. For Raymond Lifestyle, this presents a good opportunity to recalibrate its offering and accelerate volume-led growth across both urban and Tier-2 or Tier-3 markets.”
— Amit Agarwal, Group Chief Financial Officer
Auto Ancillary
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.
Electric vehicle penetration within Mahindra’s portfolio has reached 8.7% with only two products launched, indicating strong initial adoption and future growth potential.
“The penetration in our portfolio is now 8.7%, which we think is a very good number at this stage of the launch with the two products that are out. This should strengthen further as we introduce and add more products into the portfolio.”
— Rajesh Jejurikar, ED and CEO, Auto and Farm Sector
CEO calls GST rate cuts a “very good move” with strong multi-year benefits for simplification and demand; short-term disruption worth long-term gains across 70% of India’s GDP where M&M operates.
“So Kapil, just to start with, an overall view and then go to your question specifically. And I will request Rajesh to answer that. Overall, I think this is a very, very good move by the government because for the longer term, it simplifies things as well as reduces GST. And there will be, in our view, a fairly strong multi-year benefits from this move. In the shorter term, what we are seeing is, the fact that the strong fundamentals of the economy were waiting for some stimulus to be able to translate that into optimism from an overall feeling standpoint, which is important as well. And we are seeing that happen right now. So that’s a short term impact for this. I talk about across the economy. I’m not talking about auto farm in particular. We operate in, as you know, in 70% of India’s GDP and we’re are seeing that across businesses right now is a very positive thing. So therefore, for both of those aspects, we think it’s a very good step forward. Yes, a little bit of pain in the short run as we talked about, but that’s fine. We’ll take that any time for the benefits that that we are seeing here and with that, I’ll request Rajesh to specifically answer your question.”
— Anish Shah, Group CEO & MD
LCV and tractor customers endured unprecedented 25-30% price increases over five years due to commodity inflation and BS6 regulations; GST cuts now unlock latent demand that OEMs couldn’t have stimulated alone.
“Kapil, I will walk through all the 3 segments because it’s important to understand each. So, in a way, tractors and LCVs, I am first taking as one bucket. Over the last five years, customers have seen unprecedented price increases. I at least I have in, you know, if you go back many years, not seen this kind of a price increase in such a short period of time, huge commodity increases that happen starting 2020, more like 2021. Regulation change that kicked in, especially with BS6 and then BS 6.2 and multiple other regulatory costs that got added. So customers have seen more than 25, 30% cost increases. This was having especially in the LCV segment, a major drag on ability to grow, because the fleet owner or the vehicle owner was not able to pass on that on a freight cost charge to customer. So it was creating a drag. So I think, this was much needed to as a fillip to boost demand. And it’s not a small I mean, I don’t think any OEM could have taken a 10, 12% price correction.”
— Rajesh Jejurikar, ED and CEO, Auto and Farm Sector
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.
The company faces $10 million in tariff-related costs impacting the P&L, but trade dynamics are stabilizing, and discussions with OEMs are ongoing for resolution.
“As trade dynamics continue to evolve, a greater degree of clarity and stability is now emerging within the manufacturing ecosystem. We continue to engage in constructive discussions with our OEMs, and as of this quarter, there is about $10 million of tariff-related costs on our P&L, which will flow ,albeit with a lead-lag effect.”
— Laksh Vaaman Sehgal, Director
Planning to add 5,000+ engineers over next five years (doubling current 5,000 count) to build AI and technology capabilities; new building coming H2 to support this expansion of design, software, and automation competencies.
“We are also further enhancing our capabilities on the technology front. We are wanting to add more than 5,000 engineers in the next five years, building and bolstering our competency with global business services that we have built in-house and our AI platform. A new building will be coming up in the latter half of the year to support this growth. We already have about 5,000 design and software engineers in the group that are able to again, give us our information systems. That’s one of the key strengths for when we do acquisitions, that we can get access to relevant data and create strategies of how we can improve the operations of the plants that we acquired. So we think that’s a huge strength. And now, we want to double down on that.”
— Laksh Vaaman Sehgal, Director
Current EV revenues are 11%, with the order book’s EV share decreasing from 24% to 22% due to new launches including non-EV powertrains and recalibrated EV growth pace.
“Our EV revenues right now is 11%. And in the order book, you see a dip from 24% to 22%, which is largely reflective of what Vaaman was saying in terms of new launches that are happening along with non-EV powertrains as well.”
— Kunal Malani, Chief Financial Officer
International
Broadcom Inc | International
Broadcom Inc. is a major global technology company focused on designing, developing, and supplying semiconductor solutions (chips for data centers, networking, wireless, broadband) and infrastructure software (cybersecurity, mainframe, cloud, virtualization). They serve critical markets like AI, cloud, data centers, networking, and mobile, providing essential tech that connects the world, including products from their acquisitions of VMware, CA Technologies, and Symantec’s enterprise security.
[Concall]
Broadcom secured an additional $11 billion XPU order from an existing customer and acquired a fifth XPU customer with a new $1 billion order, signaling strong and expanding demand for its custom AI accelerators.
“And in this quarter Q4, we received an additional $11 billion order from this same customer for delivery in late 2026. But that does not mean our other two customers are using GPUs. In fact, they prefer to control their own destiny by continuing to drive their multi-year journey to create their own custom AI accelerators or XPU rats as we call them. And I’m pleased today to report that during this quarter, we acquired a fifth XPU customer through a $1 billion order placed for delivery in late 2026.”
— Hawk Tan, President and CEO
AI networking backlog exceeds $10B with Tomahawk 6 switch booking at record rates; total AI backlog stands at $73B to be delivered over next 18 months out of $162B consolidated backlog.
“Now moving on to AI networking. Demand here has even been stronger as we see customers build out their data center infrastructure ahead of deploying AI accelerators. Our current order backlog for AI switches exceeds $10 billion as our latest 102 terabit per second Tomahawk 6 switch continues to book at record rates and this is just a subset of what we have. We have also secured orders on DSPs, optical components like lasers and PCI Express switches to be deployed all to be deployed in AI data centers. And all these components combined with our XPUs bring our total order on hand in excess of $73 billion today, which is almost half Broadcom’s consolidated backlog of $162 billion. We expect this $73 billion in AI backlog to be delivered over the next 18 months.”
— Hawk Tan, President and CEO
Birkenstock | International
Birkenstock is into creating comfortable, durable, and health-conscious footwear, famous for its contoured cork footbeds that mold to your feet, using high-quality, sustainable materials like cork, natural latex, leather, and wool felt, blending traditional craftsmanship with modern style for wellness and longevity.
[Concall]
Growth limited by production capacity and disciplined distribution; Gen Z shift to in-person shopping driving B2B growth, creating additional pressure on already capacity-constrained operations.
“Our growth is only limited by our production capacity and disciplined distribution. We, as many other brands did, saw a continued shift toward in-person shopping, especially in the important Gen Z group. This consumer most often shops in the multibrand curated retail environment which is supported by our B2B channel. We are a consumer centric brand in its core meaning. Our desire is to be where the customer is, reach first-time users who need to touch and feel the product and transform them into brand fans for a lifetime. This strong wholesale growth driven by the younger demographic which we expect to continue requires us to produce more pairs in a situation where we are already capacity constrained.”
— Oliver Riker, CEO
Birkenstock will not implement extreme price increases to fully offset tariff impacts to maintain gross margin percentage, prioritizing its brand image as a “democratic brand” over immediate margin preservation.
“If we wanted to maintain a 60% margin, we would have to take pricing of $25 to bring our gross profit to 75, not 60. the price increase would have to be 2.5 times the tariffs. This is not something we would do to our customers being a democratic brand.”
— Avita Kroo, CFO
Expanding Portugal pre-production facility to create semi-finished goods warehouse for faster go-to-market; acquired 80,000 sqm Viitau factory near Dresden for €18M (operational in 2027) to address final assembly bottleneck.
“We are heavily increasing our pre-production facility in Portugal which is really a key thing for us to speed up the processes and speed up the go to market sequence from our products. In the near future we’ll probably have a half finished goods warehouse where we simply collect all the uppers and then finally push them into final assembly when needed and then the reaction time of this company to be in the market with the right article at the right door is very significant faster than today. The acquisition of Viitau near Dresden, the factory we bought, 80,000 square meters for €18 million, this will be ready in 27 and can fill the gap of final assembly lines because that’s the bottleneck at the moment.”
— Oliver Riker, CEO
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by 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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