The Chatter: Tata Steel, LIC, Vodafone, BPCL & More
Q4FY26 | Edition #60
Welcome to the 60th edition of The Chatter — a weekly newsletter where we dig through what India’s biggest companies are saying and bring you the most interesting bits of insight, whether about the business, its sector, or the wider economy. We read every major Indian earnings call and listen to the interviews so you don’t have to.
We’re always eager to improve—please share your ideas on how else we can innovate “The Chatter” format to better serve your needs.
In this edition, we have covered 15 companies across 12 industries.
Logistics
VRL Logistics Limited
Healthcare
Mankind Pharma Limited
Apollo Hospitals Enterprise Limited
Metals
Godawari Power And Ispat Ltd
Hindalco Industries Limited
Tata Steel
Engineering & Capital Goods
RITES Limited
Energy
Bharat Petroleum Corporation Limited
Auto Ancillary
Bosch Limited
Information Technology
BlackBuck Limited
Financial Services
Life Insurance Corporation of India
Diversified
Grasim Industries
Telecom
Vodafone Idea Limited
Personal Care
Honasa Consumer Ltd
Defence
Bharat Electronics Limited
Logistics
VRL Logistics Limited | Small Cap | Transport & Logistics
VRL Logistics is one of India’s largest surface transport and logistics providers, specializing in parcel and less-than-truckload (LTL) services. The company operates a massive network of over 1,200 branches and owns a private fleet of nearly 6,000 vehicles, focusing on service quality and network density.
[Concall]
The company keeps its drivers as direct employees rather than contractors to ensure service reliability in a labor-short market. This approach is a strategic advantage that allows them to maintain high service levels that justify premium pricing.
“We continue to view these increases as investments in our people, particularly given the industry-wide shortage of skilled drivers, where VRL’s on-role driver model remains a key competitive advantage. Despite these changes, we were able to achieve EBITDA margins of over 21% during the current quarter.”
— Sunil Nalavadi, CFO
VRL is actively passing on rising fuel costs to customers through targeted price hikes rather than broad blanket increases. This tactical approach helps protect margins without scaring away price-sensitive volume on competitive routes.
“Yes, of course, diesel prices are increasing and it affects every operator. Ultimately, whatever additional cost comes, it needs to be passed on to the customers. During recent movements, we have not increased rates generally to pass on those expenses, but in selective routes where we were offering some discounts or where volume growth is coming, we identified those routes and made rate tweaks where required.”
— Sunil Nalavadi, CFO
The company is continuing to invest heavily in owning its own hubs and warehouses to reduce long-term rental costs. While this requires significant upfront capital, it creates a more efficient and stable operating structure.
“Going forward, the mix will be similar: around 100-150 crores for vehicles and 200 plus crores for land and buildings. On a full-year basis, we are expecting 300-350 crores of capital expenditure.”
— Sunil Nalavadi, CFO
After a year of shutting down non-performing locations, VRL is pivot back to expansion with a target of 100 net new branches. This expansion into untapped markets is expected to be a primary driver for the targeted volume growth in FY27.
“In the current year, we are expecting 100 plus new branches to be opened. ... Going forward, closures will be fewer. We are expecting net additions of at least 100 branches in the coming year.”
— Sunil Nalavadi, CFO
The fleet size is set to expand significantly in the coming months with the addition of 400 new trucks. Increasing the owned fleet reduces reliance on expensive third-party hires, which should improve operating margins.
“Scrappage will not be at that level, but there will be additions. As we planned earlier, we intend to add 500 vehicles. We have already added 100 plus, and the remaining 400 will be added before December.”
— Sunil Nalavadi, CFO
Management dismisses the threat of the Dedicated Freight Corridor (DFC) taking away their business. Because VRL focuses on fragmented parcel loads rather than single-product full trucks, the railways are not a direct competitor for their core service.
“No, DFC is directly related to full truckloads. The commodity mix we carry is not directly linked with railway services, so the impact of DFC will not be significant on our volumes.”
— Sunil Nalavadi, CFO
Healthcare
Mankind Pharma Limited | Large Cap | Pharmaceuticals & Drugs
Mankind Pharma is a leading Indian pharmaceutical company with a dominant position in domestic formulations and a strong presence in consumer healthcare. The company is strategically shifting its focus toward high-margin chronic and specialty therapies following the significant acquisition of Bharat Serums and Vaccines.
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Mankind is rapidly increasing its market share in chronic disease treatments, which now account for nearly 40% of its business. Investors should value this shift as chronic therapies offer more predictable, long-term revenue compared to seasonal medicines.
“Mankind’s chronic share increased by 120 basis points year-on-year to approximately 40% during the quarter and 190 basis points to approximately 39% for the full year FY26. We expect this growth momentum to continue. We witnessed a 1.1x outperformance of the IPM in cardiac and a 2.1% outperformance in anti-diabetic, excluding GLP-1, in FY26.”
— Rajeev Juneja, Vice Chairman and Managing Director
The company achieved its highest organic growth rate in the domestic market since acquiring Bharat Serums and Vaccines. This indicates that the core business is performing strongly on its own merits rather than relying solely on the acquisition boost.
“In Q4 FY26, our domestic revenue grew 13.4% year-on-year to 2,886 crores. More importantly, our organic growth excluding OTC stood at 10.1%, the highest level since the BSV acquisition. This growth was broad-based, driven by improving execution across therapies, sustained momentum in chronic therapies, and strong traction in the BSV domestic portfolio.”
— Sheetal Arora, Chief Executive Officer and Whole-time Director
The company is ramping up capital investment to build a state-of-the-art biotechnology manufacturing plant. This move signals a significant long-term commitment to high-growth biological drugs and complex pharmaceuticals.
“As highlighted by Rajeev, in line with our enhanced focus on R&D and specialized products, we are setting up a new biotech facility in Vadodara. Accordingly, our capex guidance for FY27 is expected to be in the range of 6% to 7% of FY27 revenue.”
— Ashutosh Dhawan, Global Chief Financial Officer
Despite minor quarterly variations, management insists that the long-term potential for chronic care in India remains massive and untapped. This focus provides a durable growth engine for the company for many years to come.
“There is no pressure on chronic therapy because it is a long-term growth story. We believe the chronic growth trajectory remains sustainable over the long term. India continues to remain significantly under-penetrated in therapies like diabetes, obesity, cardio-care, and respiratory.”
— Management, Executive Team
Management is taking a cautious, non-traditional approach to the trending weight-loss drug market to avoid getting lost in a crowded field. This strategy suggests they are prioritizing long-term market positioning over immediate, short-term hype.
“Regarding GLP-1, there is a massive push in the market and every company is launching. At this time, a new launch could easily get lost. We have always been a contrarian organization; we look at what others are doing and often choose a different path.”
— Management, Executive Team
Investors should prepare for a significant jump in the company’s tax rate as historical tax exemptions expire. This will put pressure on net profit growth in the short term, even if operational earnings remain strong.
“For FY27, the expected tax rate will be in the range of 25% to 26%. The 80-IC exemption we have been enjoying ended with FY26. That is why our effective rate was in the 15-16% range previously.”
— Ashutosh Dhawan, Global Chief Financial Officer
Apollo Hospitals Enterprise Limited | Large Cap | Healthcare Services
Apollo Hospitals is a premier integrated healthcare provider in India, operating a vast network of hospitals, retail pharmacies, and digital health platforms. The company specializes in high-end tertiary and quaternary care while expanding its reach through primary clinics and diagnostics.
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Apollo is progressing with the legal separation of its pharmacy and digital businesses into a standalone entity. This move aims to simplify the corporate structure and highlight the independent value of its retail healthcare platform for investors.
“During the year, we also announced a strategic restructuring of the omni-channel pharmacy and digital health business, which is an important step towards sharpening focus on unlocking long-term value across our integrated healthcare platform. The NCLT-convened meeting of the shareholders is now being called for on June 24 to obtain the requisite shareholder approval, consequent to which we are hopeful the demerger process is completed by Q4 FY27 as planned earlier.”
— Sunita Reddy, Managing Director
Management has successfully reduced hospital stay times by using better technology and surgical methods. Shorter stays allow the company to treat more patients per bed, which directly increases the profit potential of existing facilities.
“The average length of stay reduced to 3.19 days from 3.3 days in the corresponding quarter, a decline of 3.3%. This reduction was driven by significant adoption of robotics, minimally invasive surgeries, enhanced recovery and discharge protocols, and stronger clinical pathway standardization across the network. Importantly, the improvement in ALOS [Average Length of Stay] has been achieved while continuing to manage a higher acuity and complex case mix.”
— Sunita Reddy, Managing Director
The company is merging its maternity vertical with Cloudnine to create a market leader in mother and child care. This transaction allows Apollo to monetize a specific asset at a high valuation while maintaining a stake in the segment’s future growth.
“Apollo Cradle & Fertility and Cloudnine would combine to create one of India’s largest integrated mother, maternity, and fertility care platforms. AHLL’s mother and child fertility business is valued at 1,550 crores through a combination of cash and a 9.9% equity stake in the combined entity. AHLL will become the largest non-financial shareholder in the combined platform and will have board representation through a nominee director.”
— Sunita Reddy, Managing Director
Apollo is significantly expanding its footprint by adding 1,400 new beds in major Indian cities. This capacity growth is essential for capturing rising demand in high-revenue medical specialties like cancer care and robotics.
“In total, these additions will bring approximately 1,400 operating beds, all in key metro markets. This will position us strongly as we move into FY27 and beyond, as they represent nearly 25% capacity addition in these markets. Alongside capacity expansion, we continue to deepen our clinical leadership through investments in high acuity specialties, oncology, robotics, and advanced care pathways.”
— Sunita Reddy, Managing Director
The company expects its new hospital launches to create a temporary 140 crore rupee loss during the startup phase. Investors should anticipate these initial costs as the company ramps up its large-scale expansion projects.
“On the first one, yes, we are sticking to our assumption that we will have a 140 crore loss. Most of this will actually occur in the fourth quarter where we would have opened almost all of the facilities. For the second question, let me pass it to Madhivanan.”
— Management
Management expects the digital health business to reach profitability as early as the first quarter of the new fiscal year. Achieving this milestone would remove a major drag on the company’s overall consolidated earnings.
“While Q1 is a slightly more seasonal quarter for us, we expect that we should be very close to break-even, or break-even very soon, within Q1 itself. We are on course. Thanks for that.”
— Madhivanan Balakrishnan, CEO of Apollo HealthCo
Increasing the sale of in-house pharmacy brands is a key strategy to boost profit margins in the retail business. Private labels offer higher margins than third-party medicines, supporting better long-term earnings for the HealthCo division.
“We have growth potential in private labels coming out of the storefront, which is the Apollo Pharmacy store. We believe further headroom is available on the private label side and that would be EBITDA accretive. On the expenses side, you have seen digital losses coming down as we believe we will be close to break-even in Q1.”
— Sanjeev Gupta, CFO of Apollo HealthCo
Proceeds from the maternity business deal will be reinvested into expanding clinics and diagnostic centers. This network acts as a patient funnel, bringing more people into the Apollo ecosystem before they require major hospital treatments.
“The cash we receive, 150 crores, will be deployed into primary care. We have built a primary care platform that includes clinics and diagnostics. We believe we have to be leaders in this platform because it serves as a funnel to Apollo and looks after customers who are currently not in our system or are not yet very sick.”
— Sunita Reddy, Managing Director
The company expects its entire new hospital expansion to become profitable by the 2028 fiscal year. Knowing the 50-55% occupancy target gives investors a clear benchmark to track the success of these new investments.
“Typically, we break even at a 50-55% occupancy level for the cluster. Some hospitals will reach break-even by Q4 of this coming fiscal year while others will still be in a burn mode. For FY28, we believe the new hospital cluster as a whole should be break-even.”
— A. Krishnan, Group CFO
Metals
Godawari Power And Ispat Ltd. | Mid Cap | Iron & Steel
Godawari Power & Ispat is an integrated steel manufacturer specializing in iron ore mining, pellet production, and power generation. The company is currently executing a major diversification strategy into battery energy storage systems and value-added steel products.
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The company maintained high profitability margins despite a general decline in market prices for steel products. This suggests the business has strong operational efficiency and a cost-effective manufacturing model.
“Despite soft realization, GPIL delivered a good set of numbers with revenue remaining steady and EBITDA and PAT margins strong at 23% and 15% respectively. On the operational front, GPIL delivered a strong performance in FY26, successfully achieving its production targets across key segments. Sponge iron, structural rolled products, and ferro alloys surpassed their targets with production exceeding 100% of planned levels.”
— Sanjay Bothra, Chief Financial Officer
Management secured a critical regulatory approval to more than double their iron ore mining capacity. This expansion ensures long-term raw material security and supports the company’s ambitious growth targets.
“I am pleased to share that GPIL received environmental approval and consent to operate from the CECB in February 2026 for the capacity enhancement of the Ari Dongri mines from 2.35 to 6 million tons. The ramping up of the capacities has already begun in a phased manner with full-scale operation targeted from FY28. The iron ore beneficiation plant capacity expansion at the Ari Dongri mines, increasing capacity tenfold to 6 million tons, is targeted for commissioning by Q3 FY27.”
— Sanjay Bothra, Chief Financial Officer
A new integrated steel plant is being planned to broaden the company’s product range. This move marks a major step toward becoming a larger player in the high-grade structural steel market.
“The board has approved the setting up of a 1 million ton integrated steel plant for manufacturing structural steel and wire rods. Land acquisition and environmental approval are in place while the consent to establish is awaited. Discussions with equipment suppliers and project engineering are underway with construction expected to begin in October 2026.”
— Sanjay Bothra, Chief Financial Officer
Management clarified that while they are mining more ore, lower recovery rates from certain types of rock affect the final output. Understanding these technical recovery limits is essential for investors to accurately forecast future pellet production.
“The actual mining will be close to about 4 to 4.25 million tons this year. With a 1.5 million ton portion being Banded Magnetite Quartzite where the recovery will be less than 50%, about 0.75-0.8 million tons of iron ore will be wasted as tailings. So the actual iron ore mining production will be about 4 to 4.25 million tons, but the guidance we have given is the net usable iron ore coming to the plant for making pellets, which is about 3.4 million tons.”
— Abhishek Agrawal, Executive Director
Higher diesel prices are currently inflating transportation costs and pressuring short-term mining margins. The plan to switch to electric trucks is a strategic move to permanently lower operating expenses and insulate the company from fuel price swings.
“This year, because of the diesel escalation and the shortage all over because of the war, our transportation cost is already up by 200-250 rupees. We have started talking to the transporters as we want to convert the entire fleet to EV trucks to have a substantial saving on the diesel side. This year, the guidance will be on similar levels, which is about 3,000-3,200 rupees, but from Q3 and Q4 onwards, we can see a substantial reduction in the pricing of mining.”
— Abhishek Agrawal, Executive Director
The company has set a target to quintuple its revenue in less than five years through massive new business segments. This indicates a high-risk, high-reward phase as the company transitions from a mid-sized steel player to a large industrial group.
“If you see the Battery Energy Storage System, which is about 20 gigawatt-hours, considering about 16 gigawatt-hours from there, we see a top line of about 15,000 crores. From the new steel plant, we see a top line of about 6,000 crores. From the CRM, we see a top line of about 3,000-4,000 crores. With the pellet capacity crossing 4 million tons this year, put together—the current complex and the projects we have already announced—we see a top line reaching close to about 30,000 crores in the next 4 to 5 years.”
— Abhishek Agrawal, Executive Director
While the battery storage business has lower percentage margins than iron ore, its massive scale is expected to generate significant new cash flows. Investors should view this as a volume-driven profit engine rather than a high-margin specialty niche.
“A 4-4.5 lakh rupees per megawatt-hour margin on a 16 gigawatt-hour line comes to about 700-800 crores if everything goes well. Still, if you consider a very conservative figure of 7-8% on 80 lakhs per megawatt-hour, we do about 4 lakh rupees of net margin, and based on that, you can multiply for a 16-18 gigawatt-hour line. That is how we have planned it for the phase one 20 gigawatt-hour line.”
— Abhishek Agrawal, Executive Director
Management has designed supply contracts to protect the company from volatile lithium and raw material prices. This index-based pricing strategy helps stabilize project margins even if global supply chain costs fluctuate.
“The way we have priced the entire supply of cells is index-based, where we have captured few important components which contribute to the manufacturing. If the market goes up, the supplier will pass on the price to us, and if the market goes down, it will be vice versa. Ultimately, any substantial increase in the cell price will be passed on to the buyers in the Indian market to maintain margins.”
— Abhishek Agrawal, Executive Director
A significant portion of the quarter’s profit came from selling older inventory at higher market prices. Investors should recognize that this gain is a one-time benefit and may not repeat in future quarters.
“We have roughly gained 20 crores on account of unsold pellet stock carried from last quarter and sold during this quarter. That higher realization was roughly 20 crores on 90,000 tons.”
— Dinesh Gandhi, Executive Director
Hindalco Industries Limited | Large Cap | Aluminium
Hindalco is a global leader in aluminium and copper, operating as one of the world’s largest integrated aluminium producers through its subsidiary Novelis. The company specializes in producing high-value rolled aluminium products for the beverage packaging, automotive, and aerospace industries.
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Management is restarting the fire-damaged Oswego facility earlier than expected, which will help normalize supply chains. This early restart reduces the duration of production constraints and supports immediate margin recovery.
“I am also pleased to let everyone know we have already started commissioning the Oswego hot mill and we will have coils coming off the mill within the next few weeks, well ahead of our previous guidance of the end of June. In the fourth quarter, adjusted EBITDA per ton increased 10% year-over-year to 544, reflecting solid demand, cost discipline, and benefits from our high-recycled content business model amid favorable scrap market conditions.”
— Steve Fisher, President and Chief Executive Officer
The company’s massive expansion project in Alabama is entering its final commissioning phase. This facility is critical for capturing growth in the supply-constrained North American market and improving long-term unit profitability.
“Finally, we continue to make excellent progress on our strategic growth investment in Bay Minette, Alabama. The cold mill began commissioning in March and we remain firmly on track for full plant commissioning later this calendar year. This investment positions us to support the under-supplied North American market today and capture future growth while strengthening our ability to serve customers with low-carbon, high-value aluminum solutions.”
— Steve Fisher, President and Chief Executive Officer
Management has increased their total savings target due to faster-than-expected progress in operational streamlining. This upgrade suggests that margins will be more resilient even if market conditions become challenging.
“We are now targeting 350 to 400 million in total structural cost reductions by the end of FY28, up from our original estimate of 300 million. The work is delivering sustainable results, but these actions are not just about cost. They are about creating a simpler, more efficient operating model that leverages automation, improves throughput, and ultimately strengthens margins.”
— Dev Ahuja, Chief Financial Officer
Capital expenditure will remain at peak levels for another year as major projects are completed. Investors should monitor leverage levels until these growth investments begin generating cash flow in late fiscal 2027.
“Looking ahead to fiscal 2027, we expect total capital expenditures to be at a similar level to fiscal 2026 as we complete peak spending at Bay Minette and carry out the necessary repairs at Oswego. Full year CapEx is expected to be in the range of 2.1 to 2.4 billion including approximately 350 million for maintenance capital.”
— Dev Ahuja, Chief Financial Officer
The completion of the Bay Minette plant is the primary driver for reaching the company’s target of $600 EBITDA per ton. Reaching this milestone would represent a structural shift in the company’s earnings power.
“Overall, this facility meaningfully strengthens our U.S. manufacturing footprint and is a significant contributor to achieving a long-term consolidated company adjusted EBITDA per ton above 600 dollars. In summary, our strong fourth quarter adjusted EBITDA and adjusted EBITDA per ton results reflect the positive underlying market fundamentals from favorable demand trends and scrap market conditions to the success of our cost efficiency program.”
— Steve Fisher, President and Chief Executive Officer
Management expects a rapid return to full production capacity once the Oswego hot mill restarts. This quick recovery is vital for satisfying pent-up demand and maintaining market share in core sectors.
“We are very encouraged by the progress at Oswego. We anticipate that we will be able to roll coils off the hot mill in the next few weeks. From that point in time, we believe we will ramp up the overall facility very quickly, which will help to support the overall constrained market in North America, both for automotive and beverage packaging.”
— Steve Fisher, President and Chief Executive Officer
Extensive hedging protects the company’s European and Brazilian operations from volatile energy costs. This risk management strategy provides more predictable margins despite global energy price fluctuations.
“We are hedged almost to the extent of two-thirds in regions like Europe looking forward. For this quarter, we were close to 100% hedged already. So we are not seeing such a negative impact as such at this point in time. This applies to Europe where the sensitivity to energy prices is pretty significant, but even in some other markets like Brazil, we take energy hedges well over 50%.”
— Dev Ahuja, Chief Financial Officer
The company expects to move from a period of heavy investment to a period of positive cash generation by the end of the fiscal year. This transition is a key milestone for deleveraging and strengthening the balance sheet.
“The thing I am most excited about is that we are now finally turning the corner to get to a positive free cash flow cycle. I hope that is not lost on you because as we finish Oswego, we start getting insurance recoveries. As we finish Bay Minette in the later part of this year, with our underlying operating free cash flow of over 1 billion, we are getting onto a positive free cash flow cycle starting from the fourth quarter of this fiscal.”
— Dev Ahuja, Chief Financial Officer
Current high margins have been aided by lower scrap prices resulting from the company’s own reduced production activity. Investors should be aware that scrap spreads may normalize once production returns to full capacity.
“Scrap availability is not a challenge in any of the regions. Right now, we are benefiting from multiple factors. The fact that our facilities are not operating at full capacity in the U.S. means we are not buying as much as we would normally, which reduces pressure on scrap prices. Our not competing in the scrap market is making conditions easier.”
— Dev Ahuja, Chief Financial Officer
Management asserts that volume declines are purely due to internal supply disruptions rather than a loss of customers. This implies that sales should recover fully once operational issues are resolved.
“We are not losing market share. Right now, we are impacted because of our inability to supply, but we are not losing any contracts. The 73 kilotons we reported is the direct impact of the fire. When you rapidly reset supply chains globally to prioritize customers impacted by the fire, it is not the most efficient way to run mills. As Oswego starts up and we get back to a normal cadence, we will be gaining market share.”
— Dev Ahuja, Chief Financial Officer
Tata Steel | Large Cap | Iron & Steel
Tata Steel is a major global steel producer with a dominant presence in India and operations across Europe. The company is vertically integrated from iron ore mining to high-value downstream products serving the automotive, retail, and construction sectors.
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The company is successfully scaling its Indian operations through major capacity expansions at Kalinganagar. This growth is essential for the company as it shifts its focus toward higher production volumes in its most profitable domestic market.
“The performance is a cumulative impact of multiple decisions and disciplined execution over the last few years and positions us well for the next phase of growth and value creation. India for us is a key anchor of our growth strategy, with annual crude steel production and deliveries increasing 8% year-on-year to around 23 million tons. And the successful ramp-up of the 5 million tons per annum expansion at Kalinganagar, alongside the commissioning of the downstream facilities, reflects our value-led growth strategy for India.”
— Mr. Narendran, CEO and Managing Director
Despite cutting fixed costs in half in the UK, cheap imports have kept the business in a loss-making position. New government trade protections are expected to finally level the playing field and help the UK operations become profitable again.
“Over the last 2 years, we have reduced fixed cost by about 50% from a base of approximately 1 billion pounds in FY24. However, weak demand conditions and the influx of low-cost imports have continued to weigh on performance with EBITDA losses of around 98 pounds per ton. The revised framework therefore has the potential to materially improve the operating conditions and performance.”
— Mr. Chatterjee, Executive Director and CFO
Management has aggressively moved debt from foreign currencies to Indian Rupees to protect the company from a weakening Rupee. This strategy reduces the risk of debt costs spiking due to exchange rate volatility.
“As a result the overseas debt has come down from about 50% of the total debt in 2021 to 18% of the total debt in 2025-26. By FY28 it will go down further when our overseas dollar bonds are repaid. The only overseas debt that will remain is the working capital line for our overseas businesses.”
— Mr. Chatterjee, Executive Director and CFO
The company will not commit to major new spending in the Netherlands until environmental and regulatory disputes are settled. Management is ensuring they have long-term legal certainty before risking more shareholder capital in Europe.
“Actually some of these are prerequisites to be resolved before we undertake any large investments. So, while the point is very valid, I think that’s precisely the conversation that we are having at this point of time with the various stakeholders. It is not that the coke and gas plant shutdown affects the plant or the volumes as such because there are alternative ways to do that.”
— Mr. Chatterjee, Executive Director and CFO
Tata Steel has secured enough land and sites to potentially double its Indian production capacity to 60 million tons. This provides a long-term growth pipeline that was previously restricted by land availability at their older plant.
“So while we have the optionality to grow the upstream, even with the existing sites between Kalinganagar, Meramandali and Neelachal plus Jamshedpur at 11 million tons, we already have the optionality to grow to 45-50 million tons in India. Once we start the Maharashtra site which was also announced, that potentially adds another 6-10 million tons. So that optionality is available for Tata Steel which was not there 10 years back when we were operating largely out of Jamshedpur.”
— Mr. Narendran, CEO and Managing Director
A vague regulatory letter regarding environmental permits in the Netherlands forced the company to disclose a ‘material uncertainty’ in their financial reports. Management is pushing for a clear, timed plan to close old facilities safely rather than facing an abrupt shutdown.
“If a letter lands which does not articulate that sequential path for a planned, controlled, and safe manner, then it creates an unhandleable uncertainty. That’s why it has been flagged here. I share your concern and that is also our concern in some ways because that is precisely what we want to do. The coke ovens are 40-50 years old.”
— Mr. Chatterjee, Executive Director and CFO
Tata Steel is moving away from joint ventures in India to gain full control over its production and supply chain. Owning 100% of these businesses allows them to capture all available cost savings and operational efficiencies.
“We believe that in our home market, we should ideally be by ourselves because this is our core market, this is where our strength is, this is where we have a strong franchise and hence we actually want to build capacities by ourselves in India. I just wanted to say that actually we think there is power in consolidation and in fact we are buying out our JV partners in India because the synergies that we see in the marketplace in Manufacturing Excellence and supply chain actually make us very clear that if we have to leverage the power of size, it has to be consolidated rather than fragmented.”
— Mr. Narendran, CEO and Managing Director
Management is warning that raw material costs will rise in the first quarter of the new fiscal year. These higher input prices for coal and iron ore will put immediate pressure on profit margins across their global operations.
“In terms of coal, the delta increase we expect in Q1 for India over Q4 is 15 dollars per ton. In Netherlands, it is about 10 dollars a ton. As you know in UK, we don’t buy coal. The iron ore increase in Netherlands is expected to be about 5 dollars per ton, Q1 over Q4.”
— Mr. Narendran, CEO and Managing Director
The company expects to sell significantly more steel this year as major new expansion projects in India come fully online. This increased volume is a key driver for expected revenue growth in the near term.
“The volume will be at least 2 million tons better in this financial year compared to the previous financial year, with most of it coming in India. This is largely because the Kalinganagar ramp up is pretty much complete. Ludhiana is only 0.5 million tons in this; we have not taken the full Ludhiana volume because it is still being ramped up, but you will have pretty much the full Kalinganagar volume.”
— Mr. Narendran, CEO and Managing Director
Management is deliberately shifting its sales mix away from basic steel toward specialized products like packaging and galvanized steel. These premium products offer more stable pricing and better profit margins compared to generic steel commodities.
“The objective is to sell less hot-rolled in the market and sell more value-added products. By selling hot-rolled you are always under pressure on prices and international prices; it’s a commodity you’re selling to the tube makers. We feel with less hot-rolled in the mix and more cold-rolled, galvanized, packaging steel, and more value-added products, we would be better equipped to deal with the cyclicality which is inherent in the business.”
— Mr. Narendran, CEO and Managing Director
External delays in getting high-power electricity to the new UK furnace have slowed the project, but management is finding ways to work around the bottleneck. They plan to run trials early so they can ramp up production faster once the full power connection is finally live.
“While as Kaushik said there is currently a visible delay of about 12 months on the electricity supply, what we are trying to see is to get at least some connection, one line, as soon as the plant is ready so that we can do some trials. We can test out some of the equipment so that we don’t waste that time waiting for the full electricity connection. Then what we are planning to do is a ramp-up that we had scheduled after the commissioning; we are seeing how to compress that to make sure that we catch up on the project IRR that we had targeted.”
— Mr. Narendran, CEO and Managing Director
The company expects that producing raw steel will become less profitable as iron ore costs rise in India. To protect long-term earnings, they are investing heavily in downstream processing where profits are higher and more stable.
“Strategically we feel it is not just about steelmaking capacity. Let’s understand one thing, the cost of iron ore in India is going up. The value pools will shift. Value pools are not necessarily upstream going forward. Some of those value pools will shift downstream.”
— Mr. Narendran, CEO and Managing Director
Engineering & Capital Goods
RITES Limited | Mid Cap | Civil Construction
RITES Limited is a leading Indian public sector enterprise providing multidisciplinary engineering and consultancy services in the transport and infrastructure sectors. The firm specializes in railway project management, rolling stock exports, and technical consultancy across multiple verticals.
[Concall]
A large portion of the company’s orders are very new and have not reached peak billing yet. This provides a clear view of where growth will come from as these projects start being built this year.
“The order book currently stands at 9,400 crores. A substantial portion, more than 50% of it, is very young, which is about 12-18 months old. These are the orders which will start generating revenue in this FY.”
— Rahul Mithal, Chairman and Managing Director
The company is winning more work by bidding against others instead of being directly chosen. While this shows they are competitive, it also means they will earn less profit on each project.
“As these competitive orders start generating revenue—if you compare the mix of the order book at the end of the financial year on March 31, 63% is competitive. If you count the fresh order inflow, it is about 70%+. The margins across all our streams on the new orders are much lower.”
— Rahul Mithal, Chairman and Managing Director
Turnkey projects make total sales look much larger, but the actual work remains basic consulting. This helps explain why overall profit percentages look lower even though the company doesn’t need to spend much on equipment.
“Let me be clear: we are not a construction company. We are a project management consultancy company. While the order size in a turnkey project is large—and that is why it is a large portion of the order book—our scope of work remains the same.”
— Rahul Mithal, Chairman and Managing Director
RITES is starting to ship a large order of train coaches to Bangladesh after a long break in exports. This is good news because exports usually bring in higher profits and help the business grow again.
“With the execution of the Mozambique order, we have a 1,750 crore export order balance. One of the key elements of this is the 200 coaches for Bangladesh. They are fully on track.”
— Rahul Mithal, Chairman and Managing Director
The energy management part of the business is growing and sending a lot of cash back to the main company. This steady income helps RITES keep paying high dividends to its shareholders.
“REMCL has grown by 16% and profits have grown by 19%. Total revenue was 163 crores and profit was 90 crores. It gave a substantial dividend to us of about 42 crores.”
— Rahul Mithal, Chairman and Managing Director
RITES is winning new work in areas like airports and shipbuilding, not just railways. This variety of work makes the company’s income safer because they aren’t relying on only one industry.
“In the last 1.5 months, we have received fresh orders across railways, various PSUs, private sidings, highways, ports, bridges, and airports. We received a large order for airport consultancy and another for a shipbuilding cluster. I do not see our strike rate for fresh orders or execution slowing down.”
— Rahul Mithal, Chairman and Managing Director
Energy
Bharat Petroleum Corporation Limited | Large Cap | Refineries
BPCL is a leading Indian central public sector undertaking under the ownership of the Ministry of Petroleum and Natural Gas. It operates major refineries in Mumbai, Kochi, and Bina while managing a vast retail network and expanding into upstream exploration and green energy.
[Concall]
BPCL is aggressively ramping up its intake of Russian crude to fill supply gaps caused by Middle Eastern disruptions. This procurement pivot provides supply security through mid-2026 but links the company’s cost structure to the availability of Russian discounts.
“We have increased our Russian crude procurement from 25% in Q3 to 31% in Q4 and it continues to increase to fill up our supply gaps in the light of the current situation. Further, we have diversified to eight new grades of crude during the year covering four geographical regions. I would also like to assure stakeholders that crude supplies have been secured through July 2026.”
— V.R.K. Gupta, Director Finance
Lengthy procurement delays for a critical production vessel have forced a significant impairment charge on the Brazil upstream asset. This write-down reflects the lower present value of future cash flows due to the project’s delayed start date.
“The major impairment is for the Brazil project. In fact, it took almost 3 years to finalize the FPSO tender. Since the project delay is happening in Brazil, that was the reason there is a need for impairment, assuming all other parameters remain at the same assumptions.”
— V.R.K. Gupta, Director Finance
Management is targeting an increase in retail market share to 32% through aggressive network expansion and digital convenience initiatives. Success in this area would improve the company’s competitive positioning relative to other public and private oil marketers.
“Our endeavor is to reach at least a 32% market share in the retail segment over a period of time. These two initiatives are our long-term strategy to increase our retail market share to around 32% in a couple of years. We are also bringing more initiatives to provide greater convenience to customers.”
— V.R.K. Gupta, Director Finance
The company plans to fund its massive capital expenditure program while keeping its leverage below a strict 1:1 debt-to-equity limit. This commitment to fiscal discipline provides a safety net for investors as the company enters a high-investment cycle.
“Our long-term projection is that debt-to-equity will not exceed 1:1 at the group level even with all planned capex. Once projects are completed, new cash flows will come in, and the debt-to-equity should return to a normal level in a couple of years. We ensure debt-to-equity does not cross 1:1 at its peak.”
— V.R.K. Gupta, Director Finance
The company is justifying investments in low-yield renewable projects by integrating them directly into refinery operations to lower energy costs. This strategy allows the company to meet environmental mandates while capturing internal cost savings that traditional metrics might overlook.
“For renewables, returns may only be around 8-9%, but we have net-zero objectives. While returns are mathematically lower, using this renewable power within our refineries makes the returns much higher than purchasing power externally. It meets both net-zero and profitability goals.”
— V.R.K. Gupta, Director Finance
Auto Ancillary
Bosch Limited | Large Cap | Auto Components
Bosch Limited is a leading supplier of technology and services in the areas of mobility solutions, industrial technology, and consumer goods in India. It is a flagship company of the Bosch Group in India and maintains a dominant presence in diesel and gasoline fuel injection systems.
[Concall]
Global geopolitical instability, especially in West Asia, and fragile supply chains, despite eased semiconductor shortages, remain significant headwinds for the company.
“Significant global headwinds continue to demand our attention. The heightened geopolitical instability, particularly in West Asia, continues to pose a material risk to energy price stability and has created volatility in key shipping and logistics routes. While the acute semiconductor shortages of the past have eased, the overall supply chain environment remains fragile.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
Bosch’s cautiously optimistic, flattish outlook for FY27 is primarily due to potential economic headwinds from the West Asia conflict and crude oil prices, but they retain the capacity to ramp up if conditions improve.
“We are a bit cautiously optimistic. We are cautious because of the potential headwinds in front of us, specifically the West Asia conflict now going on, which could have a serious impact on crude oil prices. If the pass-throughs are high, there could be a negative impact on the economy. Therefore, we want to be cautious. We have currently maintained a flattish outlook, but that does not mean we have issues ramping up when required or going much beyond that, just like the year we just closed.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
The significant growth in the two-wheeler business was primarily driven by increased sales of exhaust gas sensors due to the implementation of OBD2 norms.
“The two-wheeler business grew by 63.4%, mainly on account of higher sales of exhaust gas sensors due to the ramp-up of OBD2 norms implementation from April 1, 2025.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
Bosch is actively preparing customers for TREM Phase 3 regulations and spearheading ADAS adoption in commercial vehicles, ensuring partners’ compliance with new regulations rolling out from April 2026 to October 2027.
“For the upcoming TREM Phase 3 regulations, we are ensuring our customers will be fully prepared by actively aligning with OEMs for the rollout scheduled in April 2026. In parallel, we are spearheading the adoption of ADAS in commercial vehicles. Our proactive approach positions our partners to comply seamlessly as this important regulation takes effect starting in January 2027 for new commercial vehicle models and extending to all commercial vehicles by October 2027.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
The two-wheeler and powersports division achieved a significant surge in demand post-GST reforms, successfully scaling production despite supply chain pressures and maintaining 100% delivery to OEMs.
“Moving to our two-wheeler and powersports division, we saw a significant surge in demand following the recent GST reforms. Our operational team successfully scaled production to meet this demand. Importantly, it was achieved while managing ongoing supply chain pressures. We maintained our 100% delivery commitment to all OEMs, ensuring zero production disruptions.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
Bosch expects a continuous increase in content per vehicle, a trend that is anticipated to persist in the upcoming fiscal year, even with a flattish volume outlook.
“The first part on content per vehicle is a constant increase; this is happening and we have discussed this a couple of times in the past. This is a trend that continues all the time for us, and we expect this trend to continue in the upcoming fiscal year.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
The market for advanced air-processed braking and suspension systems in India is nascent, with global markets currently driving demand due to existing legislation, but Indian adoption is expected within two years.
“In India, this is very nascent. The air-processed braking and suspension systems market in India is a brand-new portfolio. It is something that we see upcoming in the coming years. However, the interest currently is largely global, as many countries already have legislation and are adopting fully electronically controlled software-driven modules for air compression, suspension, and braking.”
— Guruprasad Mudlapur, Managing Director and Chief Technology Officer
Information Technology
BlackBuck Limited | Mid Cap | Software
BlackBuck operates India’s largest digital platform for truckers, providing essential services including tolling, fueling, and vehicle tracking. The company manages a network of over 10,000 touchpoints to digitalize the highly fragmented trucking industry across the country.
[Concall]
Blackbuck anticipates short-term headwinds on trade movement and growth due to the West Asia conflict, which will impact the heavy truck intercity movement sector.
“So we believe that the west Asia conflict which is a widespread conflict not only for us but for the whole Indian economy will have short -term headwinds with anticipated drag on trade movement and which obviously because most of our revenue comes from flow throughs but we continue to climb on our revenues that will be consistent but maybe create a drag on our short -term growth.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
The company’s fuel business faces a direct impact from the temporary suspension of the loyalty program by Oil Marketing Companies.
“One small narrative on that which is a very direct impact is as you know that we have a fuel business which is basically built on top of the loyalty program which OMC’s work on and they have suspended their loyalty program temporarily.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
The vehicle finance business manages 600 crores in assets with partners, adhering to an asset-light model where Blackbuck’s own book is primarily used for new experiments and launching partnerships.
“Close to 600 crores is the assets managed by our partners overall in our books. About 10 percentage is basically on our books. Their strategy remains constant. Basically, whenever we onboard a new partner for the new partner’s confidence we do a co -lending book together. And any new experiments so if you see our book large part of the book is new experiments as well. So, anything we want to launch, or we want to see we first perfected on our book. So, our book we will only use for newer experiments and to probably launch new partnerships. So, we continue to build the vehicle finance on asset light model as we have always articulated the last 3 years the strategy remains same.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
The vehicle finance business is expected to become cash flow positive and transition out of investment mode into a core business by the end of the current fiscal year.
“Vehicle finance business probably by the end of this financial year would no longer be in the investment mode and would start probably churning cash flows which will also enable us to move that into a core business kind of a trajectory from a narrative perspective.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
All of Blackbuck’s businesses, including new growth initiatives, are managed to be contribution margin positive, ensuring profitability scales with order volume and avoids negative market behavior.
“So, in trucking business what we’ve understood over the years is that building a business with negative contribution creates a lot of negative behaviour and sentiment amongst the market participants because the nature is at the end of the day it’s a B2B relationship right. So, most or all our businesses across regardless they are new or experiments or whatever we are always contribution margin positive. We make money on every order we do so if orders scale our profitability converges.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Blackbuck explains that profit percentage is a complex outcome of core business profitability (X) minus fluctuating growth investments (Y), making it challenging to predict a stable percentage.
“profit percentage is actually again a much more further outcome because we generate X in core, we invest Y. Now we see rapid growth, we increase Y, right? X largely follows the secular trend which I was mentioning, follows the operating leverage construct, follows the growth construct. Y is all independent on that quarter need and probably subsequent two three quarters, right? So I would say that it’s hard to put a number to this, but the way to look at it is that it’s an outcome metric and it is determined by X + Y and X minus Y in fact Y is a negative sign and then depending on what Y is your X comes and X divided by overall net revenue is a percentage. So that’s why you see because the overall revenue growth happens and then there is increase in burn also and then you have a profit which also increases. So, it’s a pretty much composite metric, right? X minus Y by total R, right? RX plus RY. So that’s how you should look at it.”
— Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO
Financial Services
Life Insurance Corporation of India | Large Cap | Life Insurance
Life Insurance Corporation of India is the country’s largest life insurance provider, maintaining a dominant market share through its massive agency network. The company is currently undergoing a strategic shift to increase the proportion of high-margin non-participating products in its portfolio.
[Concall]
The company is seeing explosive growth in non-participating products, which do not share profits with policyholders and are generally more lucrative for the insurer. This rapid growth suggests LIC’s strategy to rebalance its product mix toward higher profitability is working.
“Since then, our non-participating APE has increased from 10,581 crore rupees to 15,214 crore rupees, reflecting an increase of 43.78% on a year-on-year basis. At this point, I would like to take you back to our nine-month results for the period ended December 31, when our comparable non-participating APE share within individual business was 36.46%.”
— Sanjay Bajaj, Head of Investor Relations
LIC has finally reached a key milestone in diversifying its distribution beyond its traditional agent network. Successful growth in the bancassurance channel reduces the company’s over-reliance on individual agents for new business.
“I would like to say that for long, since our listing, we have quite literally harbored an ambition to cross the level of 5,000 crores through bancassurance and alternate channels. And this financial year, we achieved the same, and we are very happy about it.”
— Management, Executive Leadership
The company is aggressively expanding its rural footprint through female insurance representatives to tap into under-penetrated markets. This grassroots expansion strategy supports the long-term goal of reaching every household in India by 2047.
“Our objective is to appoint at least one Bima Sakhi in every Gram Panchayat. We would like to inform you that out of 2,44,876 Gram Panchayats, we have covered 59% of Gram Panchayats by recruiting Bima Sakhis in 1,43,924 Panchayats up to March 31, 2026.”
— Management, Executive Leadership
A small portion of the company’s total sales is now generating more than half of its new business value. This reveals how critical the shift toward non-participating products is for LIC’s future earnings power.
“For the non-participating business, the individual non-participating contribution to the VNB is significant; 22.7% is the proportion of APE, which is contributing to the extent of 53% of VNB. The remaining comes from the group business.”
— Management, Executive Leadership
Management is prioritizing the quality of business over sheer volume by moving away from low-ticket microfinance sales that had poor persistence. This strategic trade-off should lead to a more stable and profitable book of business over time.
“It was a conscious decision to move away from those initiatives and concentrate on bigger ticket sizes. The decline is largely attributed to the microfinance side; the overall bancassurance universe remains intact.”
— Hemant Buch, Executive Director Marketing, Bancassurance and Alternate Channels
Large payouts for old policies are currently occurring, which explains the high maturity claims being reported. These are legacy obligations that are being cleared, allowing the company to replace old liabilities with modern, higher-margin products.
“We have had individual policies with assured benefits sold in big numbers 25 years back that are maturing now. One cohort of policies called Jeevan Shree is maturing, and the number of policies and the ticket size are significantly high.”
— Management, Executive Leadership
Management is carefully balancing the fixed returns offered to customers with the company’s ability to hedge those risks. This prudent approach to product pricing protects LIC against long-term interest rate risks.
“We have to take a conscious call for non-participating products where everything is guaranteed. We believe giving best value to the customer is the starting point for business growth. Our non-participating products have provided competitive returns, leading to a major uptick.”
— Management, Executive Leadership
Diversified
Grasim Industries | Large Cap | Diversified
Grasim Industries is a leading Indian conglomerate with dominant positions in viscose staple fiber, chemicals, and building materials. The company has recently diversified into high-growth consumer sectors including decorative paints and B2B e-commerce platforms.
[Concall]
The company has quickly moved up the ranks to become the third-largest player in the Indian decorative paints market. Investors should note the management’s confidence in soon becoming the second-largest player by leveraging their existing distribution networks.
“Our revenue market share expanded by approximately 90 basis points quarter-on-quarter, strengthening our position as the number three player in the organized decorative paint sector. The FY26 revenue market share expanded by 370 basis points over FY25. When you combine Birla Opus with our Birla White putty business only, we are now nearing the number two position in Indian decorative paints.”
— Himanshu Kapania, Managing Director
External global conflicts and currency issues have caused a massive spike in the cost of raw materials for the paint division. This creates a significant risk to short-term profitability as the company tries to manage these rising expenses.
“A large percentage of decorative paint raw material and the entire packaging material is linked to crude derivatives. The volatile geopolitical environment and steep depreciation of our currency against the dollar have resulted in the spiraling of cost of goods to as high as 20% to 25% of COGS, and we are still counting the impact. This level of increase is unprecedented, and even now, raw material prices are unstable and unpredictable.”
— Himanshu Kapania, Managing Director
The B2B e-commerce segment, Birla Pivot, is growing at a rapid pace and is close to hitting its full-year targets. This validates the company’s decision to enter the digital procurement space for building materials.
“Our revenue for Q4 FY26 more than doubled on a year-on-year basis. This business is within a striking distance of our annual revenue guidance of 8,500 crore. Now, in a business that is barely a few years old, doubling revenue is not just growth; it is validation.”
— Himanshu Kapania, Managing Director
The cement division has significantly improved its efficiency and lowered production costs over the last two years. These cost savings act as a buffer that helps maintain profit margins even when cement prices are volatile.
“Over the past 2 fiscal years, FY25 and FY26 combined, we have delivered cumulative efficiency gains of 185 per ton. This is not just a coincidence; it is the result of sustained focus on fuel mix optimization, logistics efficiency, and operational excellence across our plants. These structural cost levers give us confidence that margins will continue to improve even in a competitive pricing environment.”
— Hemant Kadel, Chief Financial Officer
Management is seeing a long-term shift toward eco-friendly fabrics that is driving high demand for their fiber products. This trend suggests a durable, long-term growth path for the Cellulosic Fiber division.
“Let me set the stage with a powerful fact: cellulosic fiber is the fastest-growing segment in the Indian fiber basket, expanding at a CAGR nearly two times that of other fibers. This is not a temporary blip; this is a structural shift driven by sustainability, cotton constraints, and rising consumer demand for eco-friendly fabrics.”
— Hemant Kadel, Chief Financial Officer
Management explicitly stated that gaining market share and hitting revenue targets are more important right now than showing a profit in the paint business. Investors should expect continued high spending as the company chases the number two market position.
“In the sequence of profitability, I want to repeat our order of priority. Our first priority is to become the number two decorative paints operator in India. Second is the 10,000 crore target, and third is profitability. We have always used all three words together, but they are in that sequence.”
— Himanshu Kapania, Managing Director
Data shows that the longer a dealer stays with Grasim, the more product they sell, reaching levels comparable to established competitors. This maturing dealer network suggests that revenue will naturally increase as more recently added dealers gain experience.
“Incrementally, for our older dealers who have spent more than 18 months with us, our counter share is significantly higher—as high as 25% to 50% in those outlets—and their throughput matches legacy paint operators. As a dealer becomes older and their comfort with the entire range of products increases, they tend to achieve similar throughput to a legacy dealer.”
— Himanshu Kapania, Managing Director
The company is using dividends from its cement subsidiary to pay its own shareholders and fund its financial services arm. This allows the company to use its own generated cash specifically to grow the new paint and e-commerce ventures.
“Net of tax we receive from our subsidiaries, specifically cement, we prefer to allocate that fund to dividends for our existing shareholders and toward maintaining our stake in Aditya Birla Capital. The entire revenue and EBITDA generated within Grasim itself will be reinvested in the growth of Grasim’s own businesses.”
— Himanshu Kapania, Managing Director
The B2B e-commerce business is expected to stop losing money and reach break-even by the end of the next fiscal year. This provides a clear timeline for when this segment will stop being a drag on overall corporate earnings.
“Regarding the profitability path for Birla Pivot, our growth momentum was shared in the opening comments and has been far ahead of the guidance we gave. Our goal for FY27 is to exit with EBITDA break-even, and we are well on that path. It might even happen a little sooner.”
— Sandeep Kumaravelli, CEO, Birla Pivot
The electrical insulator business is seeing high demand, with new capacity already being fully utilized by customers. Management is taking a disciplined approach to expansion, focusing on efficiency rather than building massive new plants all at once.
“In polymer long-rod, we recently expanded capacity and those units are sold out. We are looking at further increasing capacity in hollow composite. We are bullish on the segment, but we are not planning to suddenly double or triple capacity. Our aim is to gain operational efficiency from existing assets and make incremental investments.”
— Jayant Dhobley, Business Head, Chemicals & Insulators
Telecom
Vodafone Idea Limited | Mid Cap | Telecommunication Services
Vodafone Idea is a major Indian telecom operator providing mobile voice and data services nationwide under the ‘Vi’ brand. The company is currently executing a large-scale capital expenditure program to expand 4G capacity and accelerate its 5G rollout.
[Concall]
The government has significantly reduced the company’s outstanding regulatory dues after a formal reassessment exercise. This reduction provides much-needed long-term clarity for the company’s cash flow planning and balance sheet health.
“Our AGR dues have been finalized as 64,046 crores as of December 31, 2025—a reduction from the earlier frozen figure of 87,695 crores. The structured repayment schedule provides significant long-term clarity for the cash flow. The payment schedule till FY35 remains unchanged.”
— Akshat Kishore, Chief Executive Officer
The core promoter group is injecting fresh capital into the business to support its recovery phase. Investors should view this as a signal of continued promoter confidence despite the company’s historical financial challenges.
“In addition, the Aditya Birla Group has also committed to infuse an additional equity of 4,730 crores. These developments reaffirm the strong and continued commitment of the promoter group to our long-term growth.”
— Akshat Kishore, Chief Executive Officer
The company has finally halted its long-standing trend of losing subscribers and actually saw growth in the final months of the quarter. This stability is a critical turning point for the company’s ability to generate sustainable revenue growth.
“I am particularly pleased to share that during the quarter, we were able to stabilize our subscriber base to 192.8 million customers vis-a-vis last quarter, a first since the merger. More importantly, we have registered improvement in subscriber numbers for the first time post-merger in the month of February, which has continued into March as well.”
— Akshat Kishore, Chief Executive Officer
Management is correlating their heavy network investment over the last 18 months directly with the stabilization of the subscriber base. Sustained capital expenditure in broadband towers is essential for the company to remain competitive with larger peers.
“Over the last six quarters, we have deployed over 16,000 crores and added approximately 30,000 unique broadband towers and expanded capacity by adding over 1,26,000 new broadband layers. We have always maintained that consistent and right investment has been key in stemming our subscriber losses, and we are now witnessing tangible outcomes as 4G coverage and 5G presence deepens across circles.”
— Akshat Kishore, Chief Executive Officer
Expansion of the 4G network into new territories is the primary driver behind the company’s increasing average revenue per user. By providing better coverage, the company can successfully transition more users to higher-paying data plans.
“The combination of investment in the network, addition of sites, increased capacity, and improved population coverage—we have added roughly 48 million more population to our LTE network—is reflected in this strong ARPU growth. We intend to maintain this growth.”
— Akshat Kishore, Chief Executive Officer
A third of the company’s user base still uses basic feature phones, representing a massive internal pool for future data growth. Converting these legacy users to smartphones is a low-cost way for the company to boost its revenue.
“Almost 67% of our customers are now on smartphones, while 33% are on feature phones. That is a big lever for us to push, as the opportunity is available to upgrade those customers.”
— Akshat Kishore, Chief Executive Officer
Management is currently negotiating a significant 35,000 crore credit facility to fund their three-year expansion plan. Closing this bank funding is the most critical hurdle for the company to achieve its network upgrade targets.
“Regarding the debt raise, we have maintained our capex target of 45,000 crores over the next three years. We are looking at a 25,000 crore funded facility and a 10,000 crore non-funded facility. We are deeply engaged with an SBI-led consortium of PSU, private, and foreign banks.”
— Akshat Kishore, Chief Executive Officer
The company is intentionally slowing down its pace of new customer acquisitions to focus on high-value users who are less likely to leave. This strategic shift aims to improve the quality of the subscriber base and reduce the costs associated with customer churn.
“We reduced acquisitions from 21.8 million in Q2 to 19.1 million in Q4 by design to focus on quality rather than quantity. This produces better churn and retentivity.”
— Akshat Kishore, Chief Executive Officer
Management has set an ambitious target to reach 35% cash margins through a combination of subscriber growth and higher industry prices. Success depends on the company’s ability to turn its network investments into consistent revenue gains.
“If we achieve double-digit revenue growth, the cash EBITDA margin should be north of 35%. The levers are customer growth, ARPU improvements, industry pricing architecture, and reduced churn from capex implementation.”
— Akshat Kishore, Chief Executive Officer
Management admits that inconsistent network quality in some areas leads to lower active subscriber ratios compared to peers. This highlights the urgent need for the planned capital expenditure to provide a more reliable service for multi-SIM users.
“Regarding VLR, because network experience can sometimes be patchy, it results in higher churn. We have a proportion of customers moving in and out of the network, which lowers the VLR.”
— Akshat Kishore, Chief Executive Officer
The company faces a massive 1 lakh crore funding requirement for investments and debt payments over the next three years. Management believes their combined cash sources and projected earnings growth will be enough to meet these significant financial commitments.
“Adding spectrum payments of 49,000 crores and debt servicing of 5,000-6,000 crores, the total requirement is about 1 lakh crore. Combined with income tax refunds and the recent promoter infusion, we are very confident in our ability to fulfill all obligations over the next three years.”
— Tejas, Chief Financial Officer
The leadership team believes the company’s survival phase has ended and is now pivotting toward aggressive growth. They are staking their recovery on a tripling of earnings fueled by massive infrastructure spending.
“Our three-year targets are unambiguous: sustained net customer addition, double-digit revenue growth, and tripling the EBITDA. We are backing these targets with 45,000 crores of investment, strong promoter commitment, and a leadership team that has emerged intact from the most challenging conditions. The worst is behind us.”
— Akshat Kishore, Chief Executive Officer
Personal Care
Honasa Consumer Ltd. | Mid Cap | Personal Care
Honasa Consumer is a digital-first beauty and personal care company that builds and scales brands like Mamaearth and The Derma Co. The company utilizes a multi-brand strategy and an omni-channel distribution network to target the premiumization trend among Indian consumers.
[Concall]
Honasa’s core strategy across all brands is premiumization, targeting the aspirational demands of the emerging middle class with differentiated products, a trend expected to persist for decades.
“Our underlying hypothesis for all our brands has been premiumization. we exist because we felt the emerging middle class was not being served with differentiated, aspirational brand propositions that make them feel they are moving forward in life. All the businesses we have built tap into the premiumization trend, which we expect to continue for decades.”
— Varun Alagh, Co-Founder, Chairman and Chief Executive Officer
Honasa proactively implemented calibrated price increases in Q1 to offset rising crude, packaging, and raw material costs, and does not anticipate further hikes at current crude price levels.
“We foresaw the impact of crude prices and the war scenario on our packaging and raw material prices. In line with that, we have executed calibrated price increases where competition has done the same... At this point, given where crude is, we do not expect further price increases; what we have done should cover the current inflation.”
— Varun Alagh, Co-Founder, Chairman and Chief Executive Officer
Honasa employs a “horses for courses” strategy, investing in specific brands to capitalize on shifting consumer trends (e.g., actives, hydration), currently prioritizing The Derma Co due to strong tailwinds in the actives segment.
“Our strategy is to have “horses for courses”—different brands standing for sharp propositions. Depending on how consumer sentiments change—whether toward naturals, hydration, or actives—we will change our investment gears using the right brand chassis. Right now, there is a strong tailwind for actives, so we are doubling down on The Derma Co. As Aqualogica becomes material enough, we will share more.”
— Varun Alagh, Co-Founder, Chairman and Chief Executive Officer
Honasa projects Mamaearth to achieve a double-digit CAGR over the next five years, driven by significant share gain opportunities in focus categories and expansion from 200,000 to potentially 500,000 retail outlets.
“We are fairly confident of delivering a double-digit CAGR on the brand over the next 5 years. We see a lot of share gain opportunities across our focus categories, such as face wash, shampoo, and other categories of interest. We also see distribution gain opportunities, given the brand is only in 200,000 outlets and can potentially reach 500,000 outlets over the next 3 to 5 years.”
— Varun Alagh, Co-Founder, Chairman and Chief Executive Officer
The Derma Co’s strong performance is attributed to timely recognition of the actives segment trend and effective execution based on Mamaearth’s learnings, demonstrating Honasa’s capability to build another 1,000 crore brand.
“The Derma Co... has benefited from being in the actives segment, which we recognized at the right time. By executing correctly and finding the right fundamentals based on what we learned from Mamaearth, we have been able to scale that brand strongly. We double down on talking about it to show the replicability of our playbooks and our ability to build another 1,000 crore brand.”
— Varun Alagh, Co-Founder, Chairman and Chief Executive Officer
Defence
Bharat Electronics Limited | Large Cap | Aerospace & Defence
Bharat Electronics Limited is a premier Indian defense public sector undertaking that specializes in advanced electronic products for the military. The company is a lead integrator for radars, missile systems, and communication electronics under the government’s self-reliance initiatives.
[Concall]
Management is actively developing new-age technologies like quantum communication and drones through collaborations with startups and academia. These proof-of-concepts serve as the foundation for future high-value electronic warfare and secure communication contracts.
“For drone technology or quantum technologies, whether it is QKD or quantum-safe communication, we are working on all these four pillars of development. We have done good hands-on work on these technologies, and a few proof-of-concepts have also been provided to our defense users. We are totally geared up to tap into all these technologies through these four spectrums of work.”
— Manoj Jain, Chairman and Managing Director
The company is making significant investments in high-performance computing hardware to support AI-driven defense applications. This strategic spending ensures BEL has the digital infrastructure needed to process complex data for modern combat systems.
“The underlying technology is AI, which requires a very good computing infrastructure, whether it is CPUs or GPUs. We have invested heavily in that, on the order of a minimum of 100+ crores in the last 2 years, and at least around 100-200 crores worth of investments are in different stages of approval. That is the main capex required.”
— Manoj Jain, Chairman and Managing Director
Despite global supply chain concerns, semiconductors represent less than one-fifth of the company’s material costs. This relatively low exposure helps insulate the company’s overall profit margins from international price volatility.
“Semiconductors per se represent around 17-19% of our material cost or value of production. Therefore, a semiconductor cost increase—if it happens—only affects that portion. Overall, it may not affect our margins that much.”
— Manoj Jain, Chairman and Managing Director
BEL is positioned to secure a majority share of the electronics work for India’s upcoming large-scale submarine manufacturing project. This involvement secures a long-term revenue stream as the naval modernization program progresses.
“In this P-75I program, there will be a foreign component because the foreign partner is working with MDL and, indirectly, with us... I can tell you that more than 50-60% of the electronics in this program will be from BEL. We are in a very advanced stage of discussion with MDL and their foreign partner.”
— Manoj Jain, Chairman and Managing Director
Electronics constitute nearly a third of the total value for major platforms like submarines. This high percentage highlights the significant addressable market for BEL within multi-billion dollar platform orders.
“I cannot give an exact figure, but typically around 25-30% comes from the electronics portion. In this particular case, because there is a foreign element and it is not totally homegrown, the ratio may vary by about 5% on either side.”
— Manoj Jain, Chairman and Managing Director
BEL’s growth strategy relies on a mix of steady base orders and periodic massive contracts. This recurring cycle of big-ticket items allows the company to sustain high revenue growth over long periods despite year-to-year fluctuations.
“We mentioned last year that we receive a fixed set of regular orders every year, and then every 3-4 years we receive big-ticket projects. Those big-ticket projects maintain our healthy order book and growth rate. This year we expect the QRSAM order.”
— Manoj Jain, Chairman and Managing Director
The company is targeting massive government data center projects as a primary non-defense growth engine. Success in this vertical could significantly diversify revenue and reduce dependence on the defense budget alone.
“We are in advanced discussions for these projects, which could be valued between 2,000 crores and 10,000 crores. We expect the first segments to bring in 1,000-5,000 crores of business.”
— Manoj Jain, Chairman and Managing Director
By replacing expensive imported parts with local designs, BEL is effectively capturing higher profit margins. This focus on local manufacturing is the primary driver behind the company’s recent margin expansion.
“Indigenizing critical technology, modules, and subsystems has helped us. We have created a separate indigenization cell in BEL to monitor our internal developments and those of our MSME and startup partners. The faster we indigenize, the more profitable we will be.”
— Manoj Jain, Chairman and Managing Director
BEL is far exceeding the government’s minimum localization requirements, with most programs being over 80% indigenous. This high level of local content mitigates currency risk and supports the national ‘Atmanirbhar Bharat’ policy.
“Government policy now requires a minimum of 60% in all new projects. We are currently at roughly 80-85% indigenization for most programs. In some cases, it touches 90%.”
— Manoj Jain, Chairman and Managing Director
BEL is entering the development phase for India’s next-generation fighter jet, the AMCA, alongside L&T. Participation in such high-profile R&D programs ensures the company’s electronics will be standard on the final production aircraft.
“We expect the formal RFP to be received by the consortium—with L&T as the lead bidder and BEL as a partner—within the next 15 days to 1.5 months. Regarding development, the project is run by ADA (Aeronautical Development Agency) under DRDO. We will be the DCPP partner for the five prototypes.”
— Manoj Jain, Chairman and Managing Director
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Quotes in this newsletter were curated by Meher, Shahid, Srusti & Kashish.
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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