The Chatter: TCS, ICICI Pru, HDB Financials & More
Q4FY26 | Edition #55
Welcome to the 55th 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 17 companies across 5 industries and a few TV interviews
Information Technology
Tata Consultancy Services
Sagility India
Automobile
Bosch Limited
Chemicals
Krishana Phoshchem
Financial Services
HDB Financial Services
ICICI Prudential Asset Management
Anand Rathi Wealth
ICICI Prudential Life Insurance
ICICI Lombard General Insurance
Anand Rathi Share
Telecom
Tejas Networks
TV Interviews
Baba Jewellers
Parle on cost shock
Paras Defence on Bandak deal
Mirae Asset Management on Energy transition
Nomura on India
Information Technology
TCS | Large Cap | Software Services
Tata Consultancy Services (TCS) is a global IT services company with deep industry expertise. They offer a wide range of services including application development, digital transformation, AI, data and cloud services, engineering, cybersecurity, and products.
[Concall]
Despite macro uncertainty and geopolitical tensions, TCS delivered sequential growth and reported a strong deal pipeline. The order book performance in Q4 reflects continued client confidence in long-term transformation programs, especially AI-led engagements.
“Our order book performance was also very strong in Q4 with 12 billion in TCV, including three mega deals… This underscores the strength of our five-pillar strategy and our AI-led positioning across services.”
— K. Krithivasan, Chief Executive Officer & Managing Director
FY26 marked a structural shift in enterprise AI adoption. Clients are now investing in scaling AI rather than piloting use cases, which is expanding deal sizes and scope.
“For the first time since the advent of generative AI… the shift from experimentation to scaled AI deployment showed a marked improvement. AI became a core part of our every customer conversation and solutioning.”
— Aarti Subramanian, Chief Operating Officer & Executive Director
TCS is building large-scale AI infrastructure capacity through its HyperVolt initiative, positioning itself across the AI stack—from infrastructure to applications.
“Demand signals remain strong and are translating into structured engineering and commitments… this infrastructure layer is forming the foundation of our full spectrum play from infrastructure to intelligence.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Management acknowledged that AI could initially cannibalize traditional services but expects it to drive net growth over time.
“We expect AI revenue to increase and eventually overcompensate for the reduction in traditional service areas.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Early signs indicate that AI-led work delivers superior productivity, although margins are still evolving due to upfront investments.
“Revenue productivity in AI and data is definitely much better than the company average for traditional business… it is difficult to call out margins currently because we are in the initial phase of heavy investments.”
— Samir Seksaria, Chief Financial Officer
TCS is reinvesting margin tailwinds into AI capabilities, ecosystem partnerships, and talent, impacting near-term margins but building long-term growth engines.
“We consciously reinvested these tailwinds back into strengthening our capabilities and growth engines… including talent, partnerships, and go-to-market expansion.”
— Samir Seksaria, Chief Financial Officer
Annual increments effective April will impact margins in the near term, similar to prior cycles.
“For the wage increment cycle, you should expect a margin impact in the range of 150-200 basis points.”
— Samir Seksaria, Chief Financial Officer
BFSI clients continue to invest but are prioritizing efficiency, regulatory resilience, and outcome-driven transformation.
“Spending patterns shifted from experimentation to industrial business-driven transformation with emphasis on cost discipline and regulatory resilience.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Contrary to fears, clients are not postponing spending to wait for better AI models; instead, adoption is accelerating.
“We have not seen that… clients are quite interested in leveraging AI now… there is no major benefit in waiting for the next best model.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Management expects AI to be a long-term growth driver, contributing more than any deflation in legacy services.
“Our expectation is that it will be net accretive… over time AI-related revenue will grow faster than any deflation in other parts of the service model.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Management highlighted that Q4 marked the third consecutive quarter of sequential growth, despite a difficult external environment. Growth was broad-based across geographies, suggesting improving execution and demand stability.
“We are very pleased to announce the third consecutive quarter of sequential growth. We delivered a strong 1.2% sequential growth on a constant currency basis in the backdrop of intensifying geopolitical conflicts and macroeconomic uncertainty.”
— K. Krithivasan, Chief Executive Officer & Managing Director
TCS pointed to broad-based strength across key markets in Q4. This matters because it suggests the recovery is not being driven by one isolated geography.
“This momentum was broad-based across major markets with North America growing 1.4% quarter-on-quarter, UK growing 2.4%, and Europe growing 1% on a constant currency basis.”
— K. Krithivasan, Chief Executive Officer & Managing Director
TCS called out healthier additions across revenue bands after a gap of more than two years. That points to reduced client leakage and better wallet-share traction.
“Every revenue band saw healthy additions this quarter after a gap of over 2 years. This speaks to the early signs of stability and growth returning to our mid-sized and large accounts.”
— K. Krithivasan, Chief Executive Officer & Managing Director
TCS maintained tight execution discipline through a weak revenue year. Margin delivery stands out because the company was simultaneously investing in AI, talent, and partnerships.
“We maintained a strong focus on execution to deliver an operating margin of 25%. This is the highest operating margin achieved in the last 4 years.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Management said clients are showing more willingness to enter multi-year transformation partnerships. That reflects both vendor consolidation and trust in TCS’ delivery capabilities.
“Clients showing greater willingness to commit to long-term multi-year multi-million dollar partnerships. This reflects the trust they place in us through uncertainty on value at scale over extended transformation journeys.”
— K. Krithivasan, Chief Executive Officer & Managing Director
TCS increased external consultant spending as part of the “build” strategy. This indicates near-term capacity support while internal AI and niche capabilities are being scaled up.
“We saw higher external consultant costs of 40 basis points to capture the demand and to ensure delivery timelines and quality were protected, while we continue to scale internal capabilities.”
— Samir Seksaria, Chief Financial Officer
TCS is framing modernization not just as cost takeout or tech refresh, but as essential preparation for scaled AI adoption. That helps expand the strategic value of these programs.
“While our customers want to accelerate AI adoption, their current enterprise stack lacks the readiness to scale. We are working with our customers to address this gap by upgrading their infrastructure to be scalable and secure, modernizing their core applications, and setting the data foundation.”
— Aarti Subramanian, Chief Operating Officer & Executive Director
Instead of only pursuing large, long-cycle transformation programs, TCS has built a repeatable deployment model to solve high-value client problems quickly.
“We have created an AI Acceleration Playbook: Innovate with AI, Build with AI, and Scale with AI… to solve high-value business problems in rapid deployment cycles of 12-16 weeks.”
— Aarti Subramanian, Chief Operating Officer & Executive Director
TCS sees AI-led renewals, cost optimization, and vendor consolidation as the main routes to market share gains. This is important in a slow-growth environment where wallet-share matters more than market growth.
“This aspiration is powered by capitalizing on AI-led renewals, vendor consolidation, and cost-optimization deals resulting in market share gains.”
— K. Krithivasan, Chief Executive Officer & Managing Director
Sagility India | Small Cap | Software Services
Sagility India is a pure-play healthcare focused services provider offering technology-enabled business solutions to clients in the U.S. healthcare industry. Their clientele includes Payers such as U.S. health insurance companies and Providers like hospitals, physicians, and medical devices companies.
[Concall]
The core investor concern was whether AI could deflate Sagility’s revenue model the way automation pressure has shown up in some IT services businesses. Management’s answer was that while AI will create efficiency-led revenue pressure in some scopes, it should also expand Sagility’s addressable work through broader, outcome-led contracts and deeper client integration.
“We are looking at AI as a force multiplier. We are not looking at AI as a disruptor… today with AI and Agentic AI, we think it’s a capability that will really open up additional opportunities for us… We believe that this is essentially going to help us even grow faster than we have in the past.”
— Ramesh Gopalan, Group CEO and Managing Director
Sagility says current demand backdrop is actually a tailwind, not a drag
“The cost, the profitability challenges are real and in that environment over the last three, four years we have continued to show sustained growth across our portfolio of clients.”
— Ramesh Gopalan, Group CEO and Managing Director
To support the above point, management disclosed recent portfolio growth metrics. This is one of the clearest hard datapoints in the transcript and matters because it suggests Sagility is still gaining wallet share even as payer clients face utilization and margin pressure.
“You can see in the last 12 months which is December 2025 over 2024, the top five grew close to 10%. 9.9% is the growth of our top five and if you look at the rest of the clients it’s even more healthier. It’s 28% growth.”
— Ramesh Gopalan, Group CEO and Managing Director
When asked directly what growth rate management was willing to commit to, the CEO avoided formal near-term guidance ahead of the May earnings call but still offered a clear directional framework.
“We believe that there is no reason for us not to grow at historical growth rates… what we see, at least for the near term… is we will continue to grow at historical rates in the, like I said, low double-digits to mid-teens kind of a number.”
— Ramesh Gopalan, Group CEO and Managing Director
Management drew a sharp distinction between taking cost out of an existing process and driving down medical costs for payers. This matters because MLR-linked work potentially expands Sagility’s revenue pool rather than just protecting current scopes from automation.
“All the discussion then no longer happens on I’m spending $10 million on my Care Management and I have to bring it down to $9 million… when we are having discussions in MLR Reduction it’s about the impact rather than just getting 10% saving on a given process like a managed services model.”
— Roopam Narayan, Executive Vice President, Solutions & Practice
Management says the market is expanding, not shrinking, because clients are adding spend to high-ROI care programs
“Clients are actually adding the cost to come with new programs in Care Management, because it’s likely to have 3x, 4x, 5x ROI… So, it’s a new market for us. So that’s where we are saying is that market is actually expanding for us including AI platforms and not reducing.”
— Roopam Narayan, Executive Vice President, Solutions & Practice
Sagility used this as proof that its value proposition is increasingly enterprise cost-avoidance rather than invoice reduction. The remark is material because it demonstrates measurable savings from domain-led point solutions layered with process mining, analytics, and agentic automation.
“For that particular use case for 2025, we saved close to around $15 million of late claim payment interest.
— Srikanth Lakshminarayanan, Senior Vice President, Healthcare Practice
Management also cited a broader transformation example where most value was not from simple invoice cuts. That distinction matters because it supports the argument that AI and transformation can deepen Sagility’s relevance even if unit pricing in individual tasks declines.
“Say one of the Medicare national plans, our admin cost reduction has been close to around $11.5 million for last year. Of this only 10% to 12% are probably invoice reduction. Most of it is enterprise transformation…”
— Srikanth Lakshminarayanan, Senior Vice President, Healthcare Practice
The clinical section was one of the strongest in terms of quantified ROI. Management argued that combining utilization management, care management, and post-acute interventions through AI-enabled workflows can reduce both immediate and downstream medical costs.
“UM typically can reduce anywhere between 5% to 15% of medical spend… On the left side, we just enabled and enhanced their UM integrated program, resulting in about a $24 million savings for not spending too much more on the UM operation.”
— Krithika Srivats, Senior Vice President, Clinical Practice
Payer revenue mix is roughly one-third claims, one-third clinical/payment integrity, one-third member/provider lifecycle
“Our payer revenues are around 90% of our total revenues. One-third of our payer revenues are claims revenues, one-third of our payer revenues are your clinical and payment integrity and the other one-third is a member and provider life cycle.”
— Abhishek Kayan, Deputy Chief Financial Officer
Management acknowledged the key investor concern — AI could reduce per-unit revenue. However, they framed this as a trade-off where total contract value expands through scope consolidation and outcome-based pricing.
“Yes, in some areas AI may reduce the unit price… but because we are able to take on a much larger scope and deliver outcomes, the overall deal value becomes significantly higher.”
— Ramesh Gopalan, Group CEO and Managing Director
This is a structural shift in the business model. Sagility is actively moving away from traditional FTE billing toward outcome-linked contracts, especially in AI-led engagements.
“We are increasingly moving towards outcome-based pricing models rather than traditional FTE-based pricing.”
— Ramesh Gopalan, Group CEO and Managing Director
Management emphasized that discussions are evolving beyond cost reduction to measurable business impact — a key change in positioning.
“The conversation is no longer just about reducing cost… it is about delivering measurable value and outcomes to the client.”
— Roopam Narayan, Executive Vice President, Solutions & Practice
Reinforcing earlier points on Synchrony, management highlighted that platform ownership fundamentally changes contract durability.
“Once the platform is embedded into the client’s operations, the switching cost becomes significantly higher.”
— Roopam Narayan, Executive Vice President, Solutions & Practice
Management sees the current phase as early adoption, with a sharper ramp expected as clients move from pilots to scaled deployments.
“We are still in the early stages… but we expect adoption to accelerate meaningfully over the next 12 to 24 months.”
— Ramesh Gopalan, Group CEO and Managing Director
This is a strategic positioning shift — moving up the value chain from execution to transformation ownership.
“We are positioning ourselves not just as an operations partner but as a transformation partner to our clients.”
— Ramesh Gopalan, Group CEO and Managing Director
Automobile
Bosch Limited | Large Cap | Auto Components
Bosch Limited is a leading provider of technology and services in the mobility and industrial sectors within India. The company is currently consolidating its market position by acquiring Robert Bosch India Chassis to strengthen its portfolio in advanced safety and braking systems.
[Concall]
Bosch’s newly acquired business produces safety components that work regardless of whether a vehicle uses a gas engine or an electric motor. This ensures the company remains relevant and gains more value per vehicle as the market shifts toward electric mobility.
“The RBIC product portfolio is largely powertrain agnostic, providing flexibility as OEMs transition platforms and diversify their model lineups. With increasing EV penetration, RBIC is well-positioned as it drives significant demand for next-generation braking solutions such as iBooster and Integrated Power Brakes, which are essential for regenerative braking integration, improved efficiency, and enhanced performance.”
— Management, Company Representative
Stricter government safety regulations for Indian vehicles are creating a reliable and long-term source of demand for the company’s braking systems. Investors should see this as a predictable growth driver that is less dependent on general economic cycles.
“The growth for this portfolio is driven by structural tailwinds. First, a strong regulatory push. We are seeing a clear roadmap for enhanced vehicle safety in India with mandates for airbags, ABS, ESP, and the adoption of the Bharat New Car Assessment Program. This continued tightening of safety norms provides a sustainable and predictable demand catalyst for RBIC’s core products.”
— Management, Company Representative
Integrating the chassis business will significantly increase Bosch’s total revenue and overall operating profit margins. This demonstrates that the acquired business is more profitable than Bosch’s existing portfolio, leading to better financial health for the group.
“Bosch Limited’s consolidated revenue from operations will increase by 22% from 18,000 crores to 22,000 crores on a pro forma basis for FY 2025. Looking at the historical trend on a comparable pro forma basis, the revenue from operations CAGR would have been 11.2% compared with 10.1% over FY 2023-25. The FY 2025 EBITDA margins will improve from 12.8% to 13.9% on a pro forma basis led by the higher margins of RBIC.”
— Management, Company Representative
Management decided against acquiring the automotive electronics unit because it currently requires too much capital and doesn’t offer high enough profits. This shows a disciplined approach to capital allocation, prioritizing high-margin acquisitions over just increasing size.
“At this point, we did not find a good commercial logic to bring that business in when it is not currently accretive, does not contribute much to margins, and requires heavy investment intensity. We thought it was best to leave it out for now. Going forward, we constantly look at opportunities and what makes sense from a Bosch Limited point of view, while the Bosch Group monitors the overall India strategy.”
— Management, Company Representative
The market is moving toward more advanced Electronic Stability Programs, which require a higher number of sensors per vehicle. This trend allows Bosch to sell more components for every car manufactured, driving organic revenue growth.
“We have seen a heavy shift towards ESP systems, and the largest part of our activity now involves ESP. All of this is coupled with a significant increase in the number of sensors introduced whenever there is a system upgrade. More sensors bring in additional revenue.”
— Management, Company Representative
Bosch saves money on expansion by repurposing manufacturing equipment from its global parent company for use in India. This strategy reduces the amount of new investment needed and helps maintain high profit margins.
“We have carefully and cleverly deployed capex in a modular way, utilizing idle lines from the international production network within the Bosch Group to set up capacities in India. This led to significant improvements in the bottom line. We view these margins as stable.”
— Management, Company Representative
Management issued a small amount of new shares to global parent entities to ensure they keep a direct stake in the Indian business. While the deal is mostly cash, this structure maintains long-term alignment between the Indian subsidiary and the global group.
“To ensure that continuity within the Bosch Group, we opted for a very small preferential allotment in Bosch Limited for both those companies. This was a preferential issue to the promoters. We appreciate the feedback on our governance framework. We constantly try to improve our governance, and we will take your suggestion into account.”
— Management, Company Representative
A partnership with Tata AutoComp is being used to scale up the production of electric vehicle parts like motors and axles. This collaboration combines Bosch’s technology with Tata’s local supply chain to capture the growing EV market more effectively.
“We believe the JV is a very good step towards the consolidation of volumes and creating synergies. Tata AutoComp has a great track record and an established supply chain. We have significant technology regarding e-axles. Given how the market is evolving, we feel a joint venture approach to build synergies and consolidate efforts is the best way to create customer value during this electrification wave.”
— Management, Company Representative
By sourcing more materials and small parts within India, the company has managed to keep its production costs low. This focus on local manufacturing is a key reason why they have been able to improve their profit margins over time.
“Additionally, localization has a major impact—not just for finished goods but also for child parts and raw materials. Our manufacturing is very efficient and quality-focused, which helps maintain a lower cost base. These lean structures have significantly improved both top and bottom lines.”
— Management, Company Representative
Despite spending 9,000 crores on the acquisition, the company will remain debt-free and hold significant cash reserves. This strong financial position ensures they can continue to invest in new projects without needing to borrow money.
“The enterprise value includes cash held within the company, which is sufficient for its operation. The 10,000 crore shown on our balance sheet is recorded at cost; the market value of those funds is much higher. Both Bosch Limited and the acquired entity have very positive cash flows. After the deal, both companies will be debt-free and will have sufficient funds for future capex and activities.”
— Management, Company Representative
Chemicals
Krishana Phoschem | Small Cap | Fertilizers
Krishana Phoschem is a company specializing in the manufacturing of specialized chemicals for the textile industry. Initially engaged in BRP production, it has expanded to include SSP and GSSP. The company now diversifies into intermediate dyes and other allied chemicals, providing products like H acid, E K acid, and PNCBOSA.
[Concall]
Global input costs for ammonia and sulfur increased significantly from mid-February due to supply constraints and higher logistics costs, creating cost pressure for the industry.
“From mid-February onwards, the global market witnessed a firming trend driven by supply-side constraints, tightness in gas and logistics, and higher freight costs. As a result, ammonia prices moved up sequentially during the quarter. Sulfur prices also firmed up towards March.”
— Praveen Oswal, Managing Director
The industry’s high dependence on imported intermediates makes it highly vulnerable to global price fluctuations, directly affecting the company’s cost structure.
“Given the industry’s reliance on imports for 90% of key intermediates, global movements have a direct impact on our cost structure.”
— Praveen Oswal, Managing Director
Integrated fertilizer manufacturers with diverse product offerings are strategically better equipped to manage volatile input costs and adapt to changing market demands.
“As a result, integrated players with diversified product portfolios are structurally better positioned to navigate input volatility while capturing evolving demand patterns.”
— Praveen Oswal, Managing Director
The company successfully completed a major capacity expansion, increasing NPK and DAP capacity by 50% and total phosphatic fertilizer capacity to 6,15,000 metric tons per annum.
“During the year, we successfully completed a significant capacity expansion. NPK and DAP capacity was enhanced by 50% to 4,95,000 metric tons per annum, and existing SSP capacity stands at 1,20,000 metric tons per annum, taking total phosphatic fertilizer capacity to 6,15,000 metric tons per annum.”
— Praveen Oswal, Managing Director
The company secured a 10-year green ammonia agreement, enhancing future supply security, supporting decarbonization efforts, and improving long-term cost predictability.
“As part of our long-term sustainability strategy, Krishna Phoschem Limited has entered into a 10-year green ammonia agreement under India’s National Green Hydrogen Mission for 70,000 metric tons per annum. This initiative enhances supply security, supports decarbonization, and improves long-term cost visibility.”
— Praveen Oswal, Managing Director
Despite supply disruptions, domestic fertilizer demand is inherently stable and secure due to India’s large population and reliance on agricultural output, with any demand drops impacting imports first.
“The 140 crore population of India needs to be fed. Unlike consumer items, you cannot compromise on agricultural output. Farmers must produce, and they need fertilizers. Domestically manufactured products will not face demand pressure. Even if demand were to drop hypothetically, India imports almost 40% of its fertilizer requirements. As domestic manufacturers, our demand is secure; it is the imports that would be affected first.”
— Praveen Oswal, Managing Director
The company plans to protect margins by passing on reasonable price increases to customers, anticipating a slight margin pressure in Q1 but expecting to recover afterwards.
“We are currently working on how to protect our margins. Reasonable price increases will be passed on to the customer because the subsidy has already been announced. While we expect some downturn in the first quarter, we will be able to pass on price hikes to customers after that.”
— Praveen Oswal, Managing Director
Green ammonia supply is 3 years away, but current domestic ammonia supply has been restored, easing immediate concerns, and future green ammonia agreements will provide long-term strength.
“Regarding green ammonia, that will be available after 3 years. For the time being, we rely on standard ammonia. Recently, supply to domestic ammonia manufacturing has been restored to 100%, and we expect supply to ease out in the next 7 days. Further signing of green ammonia agreements will strengthen the company in the long term.”
— Praveen Oswal, Managing Director
Krishna Phoschem is one of only three major players in India with access to high-grade rock phosphate, indicating a significant competitive barrier to entry for others.
“As far as high-grade rock phosphate is concerned, there are only three major players in India. One is the Government of Rajasthan, another is Madras Agrochemical, and the third is Krishna Phoschem Limited. It is not easily available to anyone else.”
— Praveen Oswal, Managing Director
Despite a slightly weaker monsoon forecast, the company expects stable fertilizer demand due to healthy reservoir levels and no anticipated stress on the agricultural sector.
“A forecast of 95% is not a major variation. Major reservoirs and water levels are high compared to previous times. We are not expecting any stress on the agricultural sector, and fertilizer demand should remain stable.”
— Praveen Oswal, Managing Director
FY27 margins are expected to be slightly lower than FY26 due to cost absorption across the value chain, but the company is committed to overall profitability despite potential Q1 challenges.
“Margin will be under pressure. The margins we had in FY26 may not be fully possible; there will be a slight reduction as some costs are absorbed by us, some by the government, and some passed to the farmer. We will try our best to maintain profitability. While Q1 may be difficult, we are committed to sustaining profits over the full year.”
— Praveen Oswal, Managing Director
Following the recent subsidy announcement, the company anticipates increasing product MRPs by 20-25% in the near future.
“Since the subsidy announcement just came out, we are expecting a price increase of 20-25% in the coming days.”
— Praveen Oswal, Managing Director
Financial Services
HDB Financial Services | Mid Cap | Financial Services
HDB Financial Services Ltd., a subsidiary of HDFC Bank, is India’s 7th largest retail-focused NBFC with a ₹1068.78 billion loan book as of Mar 31, 2025. Classified as NBFC-UL by RBI, it offers diverse loans via Enterprise, Asset, and Consumer Finance.
[Concall]
The company is utilizing AI bots to handle more than half of its early-stage collection reminders, leading to measurable efficiency gains. This technological intervention helps stabilize credit costs and reduces the manual labor required for collection efforts.
“In Q4, over 50% of our customers who needed a nudge were assigned a bot, which resulted in improved collection efficiency of about 25 basis points in the early buckets. As I said, this is still an early stage and we have seen a lot of improvement going forward.”
— Ramesh Ganesan, Managing Director and CEO
Management has set a target for loan book growth that significantly outperforms India’s nominal GDP. This target suggests high management confidence in taking market share from competitors over the next few years.
“We have always stated that in the medium term, we look at a nominal plus 6-7% growth. We are very focused on making sure we deliver on that.”
— Management, HDB Financial Services
Despite market fluctuations, the company has successfully maintained its lending rates to protect profitability. This disciplined approach ensures that growth does not come at the expense of margin dilution.
“One of the biggest things we pride ourselves on is holding our rates over the last three quarters. That continued this quarter; across every single product, we have made sure we held our rates to ensure good risk-adjusted returns.”
— Jaykumar Shah, Chief Financial Officer
HDB’s shift toward paperless, point-of-sale credit delivery is reducing the company’s reliance on physical branch infrastructure. This fundamental change in operations supports a more lean and efficient growth model going forward.
“The digitalization of processes has changed everything. Sales officers no longer carry files to branches; credit is delivered at the point of sale. We don’t need a physical office in immediate proximity to the salesperson anymore.”
— Management, HDB Financial Services
The company is targeting a major shift toward financing used vehicles to increase its presence in a high-yield market segment. This strategic pivot could drive higher average yields for the asset finance vertical over the medium term.
“In asset finance, we are aiming for a 50/50 mix between new and used over a 4-year period. We want to grow our used business significantly, as we are much smaller than established players.”
— Management, HDB Financial Services
HDB is successfully pivoting toward digital-first lending, which has already led to a more than doubling of disbursements via its self-service platform. Investors should view this as a positive driver for lowering acquisition costs and improving scalability.
“Focus on digital sourcing channels through our DIY (Do It Yourself) platform helped us multiply our disbursements by about 2.2 times in FY26, and we expect this momentum to continue. We have made significant investments in our technology capabilities including AI, which has started yielding positive results for our customers.”
— Ramesh Ganesan, Managing Director and CEO
Management highlighted that Q4 saw the highest-ever quarterly disbursements, supported by improving demand across segments. This is a key leading indicator for loan book growth into FY27.
“Disbursements for the quarter ended March 31, 2026, were ₹19,922 crores… an all-time high for HDB.”
— Jaykumar Shah, Chief Financial Officer
Net interest income saw robust growth both sequentially and annually, reflecting a combination of loan book expansion and improved margins.
“Net interest income for the quarter was ₹2,399 crores, an increase of 5% quarter-on-quarter and 21.6% year-over-year.”
— Jaykumar Shah, Chief Financial Officer
Management indicated a conscious strategy to reduce reliance on volatile short-term funding and maintain stability in funding costs.
“We still have very low CP levels as dry powder and a healthy mix of bank loans below 50%.”
— Jaykumar Shah, Chief Financial Officer
After a period of caution, management expects unsecured lending to pick up again as portfolio quality stabilizes.
“We expect positive momentum on our unsecured business going forward, where we have seen significant improvement in asset quality.”
— Ramesh Ganesan, Managing Director & Chief Executive Officer
Growth in consumer finance is being driven by strong demand in discretionary segments, reflecting improving consumption trends.
“This was led by consumer durables followed by auto loans… we expect momentum to continue.”
— Ramesh Ganesan, Managing Director & Chief Executive Officer
Management highlighted external macro risks that could impact growth and inflation, though no immediate impact is visible yet.
“The West Asia conflict and probable weather disruption from El Niño may have an impact on growth and inflation… [these] remain key monitorables.”
— Ramesh Ganesan, Managing Director & Chief Executive Officer
ICICI Prudential Asset Management | Large Cap | Financial Services
ICICI Prudential Asset Management Company Ltd. is a joint venture between ICICI Bank and Prudential plc, and one of India’s largest AMCs. It manages mutual funds, PMS and AIF products across equity, debt and hybrid categories with strong nationwide distribution.
[Concall]
Management observed that industry-wide equity inflows increased even as benchmark indices faced significant declines during the quarter. This trend suggests that retail investor commitment to equity remains resilient despite short-term market volatility.
“During this quarter, the equity category continued to be at the forefront, alluring net inflows of 1.24 trillion rupees. It is important to note that the industry level net flows in equity have seen a positive increase quarter-on-quarter, despite declining markets.”
— Management
Fintech platforms have become the dominant channel for new customer acquisition, accounting for more than half of industry growth. The AMC’s deep integration with these platforms ensures it remains a primary beneficiary of the rapid digitization of Indian finance.
“Upwards of 50-60% of new customers across the industry come through fintechs, and we benefit as one of the largest players integrated with them. Regarding our investment book, a large component is seed money for our products. We look for opportunities across asset classes, so the deployment in REITs and AIFs reflects where we find value.”
— Management
The launch of Specialized Investment Funds (SIF) targets a new segment of retail investors without cannibalizing the existing high-ticket PMS business. This tiered product approach allows the company to capture a wider range of the wealth spectrum while maintaining its premium services.
“The customers in SIF are largely fresh. There is no significant migration from PMS because the ticket size for SIF is 10 lakhs compared to 50 lakhs for PMS. Regarding SIP flows, many customers look at sectoral and thematic funds. We emphasize asset allocation, so we see significant flows into multi-asset funds. Regarding customer behavior, young first-jobbers entering through digital platforms are maintaining their SIPs. In fact, many people increase their SIPs when markets are down, treating it as an opportunity.”
— Management
Management is prioritizing the acquisition of ‘digital native’ investors who now view mutual funds as their core savings tool. By leveraging its established digital infrastructure, the company aims to secure long-term growth from a younger, tech-savvy demographic.
“A lot of young Indians are looking at mutual funds as a primary investment vehicle rather than an alternate one. These digital natives are a major focus area. Our long history and investment in digital platforms give us an edge in capturing a large share of digital customers.”
— Management
New regulatory guidelines for Total Expense Ratios are expected to compress gross yields by 3 to 4 basis points in the upcoming quarter. The company’s ability to renegotiate distributor payouts or optimize costs will be critical in protecting net margins from this regulatory headwind.
“If you are referring to regulatory changes effective April 1 regarding TER, there is an impact of 3 to 4 basis points on a gross basis before any payouts. We have identified certain steps and are in discussions. We will have a crystallized impact within the next two months.”
— Management
Management highlighted that investors are increasingly using market dips as buying opportunities rather than pulling capital out. This behavioral shift supports the durability of the company’s equity AUM even during geopolitical or economic uncertainty.
“In the past, people have seen so many V-shaped recoveries that in the month of March, while I agree there is a spillover, people have been investing on the days the markets have been falling. Inflows have continued on those days. Until now, the trends that were there in March and April are continuing.”
— Management
Anand Rathi Wealth Limited | Mid Cap | Financial Services
Anand Rathi Wealth Limited is one of India’a leading non-bank wealth management firms catering to high and ultra-high net worth individuals. The company specializes in providing data-driven wealth solutions through mutual fund distribution and structured products with a focus on risk-adjusted returns.
[Concall]
Management confirmed that the company has achieved a major milestone by crossing the INR 1 trillion mark in assets under management. This scale highlights the firm’s growing market presence and its ability to capture equity market upside for its clients.
“As of yesterday’s date, we have crossed INR1 lakh crores of AUM post the recent positive movement in the equity markets. This is a 5-digit number. So we were very intrigued to see when we would reach there.”
— Feroze Azeez, Joint CEO
The company has maintained a consistent trajectory of high profitability growth for over four years regardless of market cycles. This reliability in earnings growth distinguishes the firm from its peers in the broader financial services sector.
“This is our 18th quarter where we’ve been able to declare PAT growth Y-o-Y greater than 20%, which is, again, a rarity in Nifty 500. We are one of the very few, which can be counted on a fingertip of how many companies have been able to achieve that feat.”
— Feroze Azeez, Joint CEO
Management has provided a forward-looking roadmap for the next fiscal year targeting significant growth in both revenue and profit. The conservative guidance philosophy suggests that these targets represent a floor for the company’s expected performance.
“We have given FY ‘27 revenue guidance of INR 1,415 crores and PAT guidance of INR 460 crores, again, going with the principles which Rakesh sir Rawal and Rathi ji has always taught and every elder in the company has taught us that under commit, over deliver. Under the same principle, we are guiding you INR 1,415 crores and INR 460 crores for PAT.”
— Feroze Azeez, Joint CEO
The company reported an industry-leading return on equity, reflecting an extremely capital-efficient business model. This high ROE indicates that the firm generates superior value from its equity base while managing significant operational costs like ESOPs.
“Return on equity on an annualized basis stood at best in industry at 46.74% for FY ‘26. Reported number that includes fair value gains on investment of INR 54.6 crores, ESOP expenses of INR 39.3 crores and the related combined tax effect of INR 3.8 crores, total revenue for FY ‘26 was reported at INR 1,253 crores.”
— Jugal Mantri, Group CFO
Management clarified that their growth is driven by human capital and relationship quality rather than intensive financial capital. Investors should view the firm as a talent-led services business where scaling requires deliberate hiring and training of relationship managers.
“Wealth management is not a capital business. A relationship manager cannot handle thousands of clients. The business is actually a linear business, not an exponential business.”
— Feroze Azeez, Joint CEO
The company prioritizes building a strong distribution network and client trust before aggressively expanding into product manufacturing. This strategy mitigates the reputational risks associated with product failures that can damage a wealth management brand.
“Ideally, manufacturing mistakes are very, very, very, very scarring to a franchise. So quite a few people build a wealth management business starting manufacturing on the day zero. So we believe this is a backward integration business. Distribution is first, manufacturing later.”
— Feroze Azeez, Joint CEO
The firm focuses on internal talent development rather than hiring expensive external talent to ensure a consistent corporate culture. Having leadership active in client relationships ensures the management remains grounded in the realities of the business.
“So lateral hires cannot be a substantive portion of your strategy. Every leader in the company has to be an RM first. Very tough to achieve, easy to speak. So CEO is an RM, joint CEO is RM, unit head is RM, team leader is an RM.”
— Feroze Azeez, Joint CEO
Management does not anticipate significant margin pressure on mutual fund yields despite potential regulatory changes in fee structures. Their historical shift to a trail-only model has already insulated the business from the most aggressive commission cuts.
“Do I see any material change in 1.09, not significant. Like we have guided, we are at the fag end of any cycle, like 2016, we went all trail before SEBI made it mandatory in 2018, okay? That’s something which I take pride in till date because we were the first one who’s voluntarily said, I don’t want upfront income.”
— Feroze Azeez, Joint CEO
The company is planning for long-term growth by utilizing product features like rollover options that increase asset stickiness. This structural setup provides high revenue visibility and reduces the risk of massive sudden outflows.
“We work on a plan of not 2026. We play -- we work on a plan of 2031, which is 5-year hence, because most of our structured products have a rollover option now. So 99% of our business comes with a rollover option that implies. If clients, no need money, it rollover.”
— Feroze Azeez, Joint CEO
The firm attracted positive net inflows during a period when the broader industry saw negative net purchases in active equity funds. This outperformance suggests that their client base is more resilient and disciplined during market volatility.
“What I’m happy about as a professional is that in a year or a quarter like last year, last quarter, we got monies. People lose money also, right? Today, if you see industry’s net flows ex the SIP number, today, AMFI has given the number just now, INR 32,000 crores is the SIP number. Last month, the number was -- if you remove the SIP number, the net purchase was negative in equity 3 category.”
— Feroze Azeez, Joint CEO
The company is seeing an increase in inbound interest from ultra-high-net-worth individuals without active solicitation. This organic pipeline from extremely wealthy families signals a strengthening brand that appeals to the market’s top tier.
“It is surprising that people with INR400 crores are reaching out, INR 500 crores. I did one meeting in Gurgaon. We had never seen these green shoots of people who need a service of wealth management reaching out to us and uncomplicated appealing to a large guy.”
— Feroze Azeez, Joint CEO
ICICI Prudential Life Insurance Company Limited | Large Cap | Life Insurance
ICICI Prudential Life Insurance is a leading private sector life insurer in India providing a variety of protection, savings, and retirement products. The company focuses on a diverse distribution network and technology-driven operational efficiency to drive value for shareholders and customers.
[Concall]
The company is transitioning its financial reporting to Ind AS standards to better align with international insurance practices. This move is intended to provide investors with a more transparent and comparable view of the company’s financial value creation.
“On the regulatory front, we welcome the transition to Ind AS, which will align our financial reporting with global standards. This shift enhances transparency and market comparability, ensuring that our financial statements reflect an improved picture of value appreciation.”
— Anoop Bagchi, MD and CEO
Recent GST reforms in late 2025 have acted as a massive catalyst for demand in the retail protection segment by reducing costs for customers. This structural change significantly accelerated the company’s sum assured growth compared to previous periods.
“Life insurance products, particularly the retail protection segment, received a significant boost, partly aided by the GST reform effective September 2025. The retail sum assured growth for the industry was higher by 2.5 times in the post-reform period as compared to the pre-reform period.”
— Anoop Bagchi, MD and CEO
Investments in digital tools have successfully lowered the expense ratios for the company’s savings business even as assets under management continue to scale. Investors should view this as a sign of operating leverage and improving profitability within the core business segments.
“Notably, technology and digital solutions have enabled us to increase efficiency, resulting in a reduction of 40 basis points to 12.1% in our savings cost-to-premium ratio during FY26. Our AUM stood at 3.14 trillion and a total in-force sum assured grew by 16.9% year-on-year to 46.11 trillion at March 31, 2026.”
— Dhiren Salian, CFO
Management views the retail protection market as largely under-penetrated, suggesting a very long runway for growth ahead. This high-margin segment is being prioritized as a key driver of future Value of New Business (VNB).
“With an estimated 13% of the addressable population currently being covered through retail protection, we believe this segment offers a multi-decadal growth opportunity. Group protection, which includes credit life and group term business, grew by 7.1% year-on-year in FY26.”
— Amit Palta, Chief Product and Distribution Officer
The company successfully increased its profitability margins during the fiscal year through a better mix of products and favorable economic adjustments. This expansion indicates that the company is extracting more value from each unit of new business sold.
“VNB margin expanded by 190 basis points year-on-year to 24.7% in the current year. Margin expansion has been led by improvements in the new business profile and economic assumption changes.”
— Dhiren Salian, CFO
A specific annuity product line suffered from higher-than-expected policy cancellations due to changing regulations and market liquidity needs. This variance represents a risk to long-term embedded value if customer behavior remains volatile in this product category.
“Persistency variance is a negative 2.64 billion, which is largely on account of the 100% premium back annuity products where the persistency experience fell short of long-term assumptions. As you realize, it was an industry-first product and coincided with regulatory discussions aimed at increasing surrender values for traditional savings products during the year.”
— Dhiren Salian, CFO
Management has adjusted its forward-looking margin assumptions to reflect current challenges in policy retention and expenses. This resets the baseline for future earnings expectations, making them more resilient to recent negative trends.
“Whatever is known at this point, we will incorporate into our assumption setting. If experiences are temporary or pertain to specific portfolios, we allow those to go through the variance. At this point, we have factored what we know on persistency, mortality, and expenses into our margins.”
— Dhiren Salian, CFO
The transition to Ind AS reporting is facing minor delays as the company seeks more clarity on specific accounting inputs like the Contractual Service Margin (CSM). While the company is ready, investors can expect a gradual shift as these technical details are finalized with regulators.
“We are technically live, but as approved by the board, we will be seeking a transition period. Some decisions around inputs for computing the CSM still await clarity from the joint expert group. Also, it is a short time to transition given we are typically live with our results within the first 15 days of the quarter.”
— Dhiren Salian, CFO
High interest rates on bank deposits are creating significant competition for insurance-based savings products. This clarifies why growth in the non-participating segment has been challenging, as customers seek higher immediate returns elsewhere.
“Regarding growth in non-par, our products are compared to bank FD rates. In the current environment where FD rates are steep, products priced off the government security (G-Sec) look less attractive relative to the longer-term G-Sec yields. When there is a dichotomy between deposit rates and non-par pricing, customers can swing between the two.”
— Dhiren Salian, CFO
Rising interest rates provided a buffer that allowed the company to maintain competitive pricing without sacrificing margins. This stability in pricing helps support sales volume in a competitive environment where other costs are rising.
“Normally, we should have changed pricing, but the improving yield curve allowed us to hold prices. There have been very marginal price changes in certain cohorts, but not on mass.”
— Dhiren Salian, CFO
The company is prioritizing absolute profitability and value creation over simply chasing top-line revenue growth. This disciplined approach ensures that the company does not destroy shareholder value just to gain market share in low-margin products.
“Cutting margins to deliver growth on non-par might not be accurate for shareholders. We focus on absolute VNB rather than pushing a particular product for growth.”
— Anoop Bagchi, MD and CEO
The 18% cost reduction from GST changes is being directly passed to policyholders, making protection much more affordable. This structural tailwind is driving strong renewal behavior and new customer acquisition in the high-margin protection segment.
“We have innovated and created new propositions, but the biggest tailwind has been the GST reform. This is felt most in retail protection because the 18% cost reduction is passed to the customer. This benefit is available for both new and existing customers paying renewals.”
— Anoop Bagchi, MD and CEO
ICICI Lombard General Insurance Company Ltd. | Large Cap | General Insurance
ICICI Lombard is one of India’s largest private sector general insurance companies, offering a wide range of products across motor, health, fire, and marine segments. The company focuses on technology-driven underwriting and multi-channel distribution to maintain its market leadership and operational efficiency.
[Concall]
The Indian insurance regulator is moving the industry toward global accounting standards starting in April 2026. The company views this transition as a major benefit for transparency and better comparison with international peers.
“IRDAI has mandated insurers to prepare and present their financial statements in accordance with the applicable Ind AS effective April 1, 2026. We view this as a positive step, as the enhanced disclosure requirements under the Ind AS framework will meaningfully improve transparency and align the reporting standards of Indian insurers with global practices.”
— Sanjeev Mantri, MD and CEO
The company’s retail health segment is growing more than twice as fast as the rest of the insurance industry. This rapid expansion has allowed them to gain significant market share and double their new business volume in health indemnity.
“Our retail health business continued to demonstrate strong growth of 51.1% for FY26, significantly outpacing the industry growth of 19.9% in the same period. Consequently, our market share has improved from 3.3% in FY25 to 4.1% in FY26. For the year, the company has seen 2x growth in the new retail health indemnity business sourced compared to the previous year.”
— Sanjeev Mantri, MD and CEO
Management confirmed they are sticking to their conservative approach for setting aside money for future insurance claims. They advise investors to look at annual trends rather than quarterly fluctuations to gauge the true health of their reserves.
“If you ask us if any of our reserving philosophy has undergone a change, the short answer is no. We continue to maintain prudence in terms of maintaining our loss reserves. So hence, I think you have to keep looking at numbers more on a full-year basis as compared to any given quarter.”
— Gopal Balachandran, CFO
Switching to Ind AS accounting is expected to artificially lower the company’s combined ratio by up to 4.5% during the first year. Investors should note that this is a change in accounting methods rather than a change in the actual underlying profitability of the business.
“We always said in the past also that in the year of transition, there will be a significant decline in the combined ratio; it could mean a reversal of maybe 400 to 450 basis points. But look, that is only the accounting part of economic value; over a period of time, it is expected to converge.”
— Gopal Balachandran, CFO
Management is willing to lose some market share in commercial lines if it means avoiding risky or poorly priced contracts. They prioritize disciplined underwriting over growing the business at any cost in high-risk categories.
“Even last year, we had said that there was a marginal loss of market share for us on that side, purely on the account that we will do what is comfortable. These are all very exposure-driven products, and you have to be cautious of what you pick and what you don’t.”
— Sanjeev Mantri, MD and CEO
The company does not set fixed targets for its crop insurance business, choosing instead to participate only when the risk-reward ratio is favorable. This selective approach protects the company from the high volatility often associated with agricultural insurance.
“We have always maintained our plan that crop will be purely on a selection basis of what we feel is appropriate rather than a target segment. We do not have a specific target like “we must do this much.” That is not the way we look at it.”
— Sanjeev Mantri, MD and CEO
The company successfully increased its customer retention rate by 5% in retail segments, which is driving faster growth than just new sales alone. Maintaining this high retention rate is a key strategic priority for the upcoming fiscal year.
“At an aggregate company level, predominantly in retail lines, we have seen an improvement in our overall retention numbers by almost 500 basis points. That is something we will continue to stay focused on even as we head into FY27. Beyond new vehicle sales, the growth acceleration is a function of that improved retention.”
— Sanjeev Mantri, MD and CEO
Management suggests that the final loss ratio is a more accurate measure of profitability than the total dollar amount of reserves. They are entering the next year with confidence as they have grown the business while keeping claim costs within their expected range.
“The absolute amount of the reserve number is not necessarily the right metric to track; the better metric is the loss ratio outcome. We have seen a clear rebound of growth while maintaining our loss ratio expectations. We are very positive as we head into FY27.”
— Gopal Balachandran, CFO
ICICI Lombard believes it has a competitive advantage because it already operates within strict regulatory expense limits that some competitors struggle to meet. If the regulator enforces these limits strictly across the industry, it could level the playing field in the company’s favor.
“Any signing on a uniform basis across the industry would place ICICI Lombard at a significant advantage because we have remained within the EOM limits. If others fall in place, we can only see better times ahead for our industry. It just needs to be practiced uniformly.”
— Gopal Balachandran, CFO
Anand Rathi Share & Stock Brokers Ltd. | Mid Cap | Financial Services
Anand Rathi Share & Stock Brokers Ltd. is a full-service financial services firm specializing in stockbroking, margin trading, and investment product distribution. The company utilizes a relationship-driven approach supported by digital platforms to serve retail and HNI clients across India.
[Concall]
Management is highlighting a difficult year where geopolitical tensions and technological changes hurt investor confidence. This context helps investors understand the external volatility that pressured the company’s trading volumes and market performance.
“FY26 was a challenging year for global economies and financial markets. The world was dealing with multiple headwinds at the same time, including ongoing geopolitical tensions, shifting global trade dynamics, tariff-related uncertainties, and fast-paced technological shifts that disrupted established business models. As the year progressed, these pressures intensified with fresh bouts of adverse news, including the recent West Asia conflict, further weakening risk appetite.”
— Pradeep Gupta, Chairman and Managing Director
Retail interest in Indian capital markets is growing rapidly, as seen in the double-digit increase in demat accounts and mutual fund assets. For investors, this structural shift suggests a long-term expansion of the company’s addressable market.
“The steady rise in demat accounts from 15.14 crore in March 2024 to 22.2 crore by February 2026 clearly reflects sustained retail participation and deep market penetration. Similarly, Assets Under Management (AUM) in the mutual fund industry rose from 65.74 lakh crore as of March 2025 to approximately 82.02 lakh crore by February 2026, representing a 24.8% year-on-year increase. The growth underscores the continued financialization of household savings and a rising preference for market-linked investment avenues.”
— Pradeep Gupta, Chairman and Managing Director
Recent regulatory changes by SEBI are designed to protect investors and reduce market leverage at the cost of short-term disruption. These reforms are viewed as positive because they create a more stable and professional environment for long-term growth.
“SEBI has been proactive in introducing a series of regulatory measures aimed at strengthening risk management frameworks, curbing excessive leverage, enhancing investor protection, and improving the ease of doing business in capital market transactions. While some of these reforms may have required short-term adjustments and led to near-term discomfort for a few participants, they are critical in laying the foundation for a more transparent, resilient, and sustainable capital market ecosystem over a long period. Overall, we believe that the industry is moving in a constructive direction, although near-term conditions have clearly remained uneven.”
— Pradeep Gupta, Chairman and Managing Director
The company is intentionally diversifying its income to rely less on volatile stockbroking fees and more on stable distribution income. Achieving this 50:50 split should lead to more consistent earnings that are less vulnerable to sudden market crashes.
“Our strategic direction remains clear and unchanged. As guided earlier, we are fully focused on maintaining a balanced revenue mix with a targeted revenue split of 50:50 between non-broking and broking segments and growing both segments at a steady rate. This approach is central to improving the overall quality, sustainability, and predictability of our earnings over the long term.”
— Pradeep Gupta, Chairman and Managing Director
The addition of insurance distribution provides the company with a new stream of high-margin, recurring fee income. This expansion allows the company to capture more of its clients’ financial spending beyond just stock trading.
“We received the corporate agency license to distribute insurance products in the same financial year. Since then, we have commenced distribution of both life and health insurance products to our clients, green-lighting a huge source of fee-based income for the company. Lastly, we continue to remain focused on enhancing client servicing and satisfaction by adopting new initiatives aimed at delivering superior customer experiences.”
— Pradeep Gupta, Chairman and Managing Director
Income from selling financial products like mutual funds and bonds grew by over 40% due to better cross-selling to existing clients. This rapid growth indicates the company is successfully extracting more value from its current customer base.
“Our distribution income for FY26 amounted to 1,129 million, reflecting a strong year-on-year growth of about 44.1%. This growth reflects improved cross-selling across our client base as per our focused approach to grow our distribution business. Our objective is to address the broader financial needs of our clients.”
— Pradeep Gupta, Chairman and Managing Director
The company prioritizes cash-market investing over speculative derivatives trading to encourage more sustainable client behavior. A higher reliance on the cash segment often leads to higher quality and more stable brokerage earnings over time.
“Within the broking segment, we continue to maintain a healthy balance between equity cash, equity derivatives, and other segments. This reflects our philosophy of encouraging an investment-focused approach among our clients rather than speculative trading. For the full year FY26, the revenue mix across equity cash, F&O, and other segments stood at 51%, 41%, and 8% respectively.”
— Rupkishore Guthra, Whole Time Director
Changes in central bank policy restricted the company’s ability to borrow from banks to fund its margin trading loans. This regulatory constraint is a key risk because it limits the expansion of a highly profitable business segment.
“However, we saw a downfall in MTF by 10.53% in the quarter ended March 2026. The main reasons behind this are as follows: Change in RBI policy for capital market intermediaries. That change in policy reduced the avenues available from banks to meet the working capital requirements of the company. As a result, we had to control our growth in the MTF book.”
— Rupkishore Guthra, Whole Time Director
Despite a tough market, the company has managed its lending risks perfectly with no bad loans in its margin trading portfolio. The focus on smaller, granular accounts reduces the danger that a single large client default could hurt the company’s finances.
“We continue to maintain zero NPA on our MTF book as of March 31, 2026, once again reflecting our judicious underwriting practices. The book also remained granular, with approximately 61% of the outstanding exposure coming from clients with individual balances below 1 crore.”
— Rupkishore Guthra, Whole Time Director
Management clarifies that this specific entity focuses on execution and product distribution rather than high-end advisory services. This distinction is important for investors to understand the competitive positioning and margin profile of this business versus its sister company.
“In our group, we have a wealth management company separate from this company. This company is by and large focusing on broking and distribution of products. Having said that, as a philosophy, we are addressing all the investment needs of a specific customer by providing various different investment products suitable to that particular investor.”
— Pradeep Gupta, Chairman and Managing Director
The company is digitizing its services to match the personal touch of a physical advisor, with over half the clients already using digital tools. Increasing digital adoption should lower the cost of serving customers and improve long-term scalability.
“Regarding our technology side, we are strengthening that platform every day, trying to provide it in such a way that all the deliveries available from a relationship manager in the marketplace are available on our digital platform. Our broking platform is already there, which we are constantly improvising. Almost 60% of our customers are already using our digital platform.”
— Pradeep Gupta, Chairman and Managing Director
The company uses an internal committee to strictly screen which stocks can be used as collateral for loans. This conservative approach is meant to protect the firm from sudden market crashes that could wipe out client equity.
“First, we always ensure that we operate in a business where customer interest is protected at the first level. Second, we are conservative in our approach toward risk management. A simple example is our MTF product. On the regulatory side, a basket is defined, and we have an internal committee for stock selection to ensure margin levels and risk controls are managed effectively.”
— Rupkishore Guthra, Whole Time Director
The company has drastically reduced its debt levels relative to its equity over the last year. A cleaner balance sheet gives the company more financial flexibility to navigate future market downturns without distress.
“As you might have observed in the numbers, we have improved our debt-to-equity ratio significantly to 0.62 from 1.8. I hope this clarifies your question.”
— Rupkishore Guthra, Whole Time Director
The company is very close to reaching its goal of a perfectly balanced revenue stream between broking and distribution. This balance is key for investors seeking a financial firm that is less exposed to the volatility of trading cycles.
“If you look at our performance this year, 51% comes from broking and 49% from distribution. We have seen a good amount of traction on the distribution side, which has grown by almost 44%. What we are trying to achieve over time is that 50:50 scenario.”
— Management, Corporate Team
Even during months when the market indices fell, the company saw growth in its client count and total assets managed. This indicates strong customer retention and a resilient business model that can grow despite poor market sentiment.
“While the market level was down about 3%, the positive part is that the total number of clients has increased and the AUM from existing clients is also increasing on a constant basis. We are a customer-centric company and our policy is to look after the customers’ and investors’ interests first while simultaneously growing the company over time.”
— Management, Corporate Team
Telecom
Tejas Networks | Small Cap | Telecom
Tejas Networks Limited specializes in designing, developing, and selling high-performance products to various industries including telecommunications service providers, internet service providers, utility companies, defense companies, and government entities. Their products are utilized in high-speed communication networks for carrying voice, data, and video traffic over optical fiber, offering programmable software-defined hardware architecture for easy development and upgrades.
[Concall]
Management attributed the weak financial performance in FY26 to delays in large projects, especially after the peak execution of BSNL-related work in FY25. They emphasized that the demand environment remains intact and the issue is timing of execution.
“FY26 has been a year of consolidation. Our BSNL 4G/5G network went live across 100,000 sites… Several large projects we planned for were delayed, resulting in a revenue shortfall and financial loss. However, we have not cut R&D investments due to our positive outlook… While it has been a tough year, we have set a path for the future.”
— Management
The company reported a sharp increase in its order book, driven largely by India business and private/global customers. Importantly, management clarified that this number excludes the large BSNL 4G project, indicating broader underlying momentum.
“We had growth in our order book at the end of Q4, ending with ₹1,514 crores compared to ₹1,019 crores at the end of Q4 FY25… India once again dominated our business at 88%. Our order book was also dominated by the India business… [and] this does not include the BSNL 4G project.”
— Management
The company has made significant investments in its technology partnership with NEC, which is now expected to start generating revenues as milestones are achieved and commercial adoption begins.
“This consists of our product development efforts and the technology licensing agreement we signed with NEC… A large part is done… we expect the balance to be completed within the next two quarters… Yes, we will see revenue from the new contract with NEC in FY27.”
— Management
Tejas has secured initial deals and is in advanced stages of trials across multiple geographies. These are expected to contribute meaningfully to revenues starting FY27.
“We signed an agreement with NEC to manufacture and supply our 5G massive MIMO radios for global customers… We also received an initial order for the expansion of 4G networks from a customer in South Asia… A lot of the 5G massive MIMO business will generate revenue in FY27… more expansion expected this year.”
— Management
Concerns around high inventory levels (especially linked to BSNL) were addressed by clarifying that products are standardized and can be sold to other customers globally.
“We expect significant BSNL collections this year… The inventory procured is not unique to BSNL; these are 4G and 5G radios that can be sold to other global customers or for private networks.”
— Management
The company deliberately chose not to cut R&D spend, highlighting its long-term strategy to remain competitive in deep-tech telecom infrastructure.
“Being in deep tech, failing to invest in technology is a bigger risk… We took the call to continue investments despite the business shortfall in FY26… In FY27, the balance between investment and revenue will be tighter.”
— Management
Management anticipates a long-term surge in network demand as artificial intelligence traffic forces service providers to upgrade their infrastructure. This structural shift positions Tejas’s high-capacity optical and edge products for a potential multi-year growth cycle.
“Looking forward, AI will drive network transformation. By 2030, AI traffic is predicted to be more than 60% of total network traffic. This will require low latency and jitter. This trend will drive a network infrastructure build super cycle.”
— Arnab Roy, MD and CEO
The company expects future investments to be centered around high-speed optical networks and edge infrastructure to handle AI-driven workloads.
“Communication service provider networks will need to handle immense growth, with 50% of new AI traffic processed at edge nodes… We will see significant investment in 400G and 800G connectivity at the edge.”
— Management
Rising input costs, particularly memory components, are being addressed through pricing renegotiations and product optimization.
“Memory cost does impact us… we are addressing this through new technology and renegotiating prices with customers to protect our margins.”
— Management
The company is actively pursuing global deals, with multiple field trials across geographies, which could convert into orders in FY27.
“We have multiple ongoing field trials for our 4G and 5G RAN products across South Asia and the Americas… recently completing a successful 5G POC in South America… We are chasing large opportunities, particularly international wireless deals.”
— Management
Management framed current investments as enabling multi-fold growth rather than incremental improvement, especially as global opportunities scale.
“Our investments are aimed at significant growth—multiples of what we did in FY26… While projects like BSNL create spikes, the underlying trend without those one-offs should show consistent growth.”
— Management
TV Interviews
Baba Jewellers | Gold & Diamond Jewellery | Retail
Bawa Jewellers is a heritage jewellery brand specializing in gold, diamond, and silver ornaments, backed by a legacy of craftsmanship and trust since 1928. Led by Gaurav Bawa, the brand offers a diverse range of traditional and contemporary designs, blending timeless artistry with modern aesthetics to suit evolving customer preferences. Bawa Jewellers provides certified jewellery, fair pricing, and value-driven services, continuing to serve generations with a reliable and refined jewellery shopping experience.
The company has observed that jewellery demand is becoming less sensitive to price hikes as consumer purchasing power grows. This comes despite a broader environment marked by inflationary pressures and global uncertainties, indicating relative resilience in this segment.
“If you look at it closely, people’s spending capacity has increased over time. In terms of quantity, at our store, we’ve seen consistent year-on-year growth over the last three to four years. Price fluctuations don’t seem to affect demand much.”
— Gaurav Bawa, CEO, Bawa Jewellers.
Parle Products Private Limited | Cost Shock Reveal |
Parle Products is one of India’s leading FMCG companies in the biscuit and packaged foods segment, built on a high-volume, mass-market distribution model. Recent management commentary highlights rising cost pressures from fuel constraints and packaging inflation, with the company absorbing these increases to protect demand.
While fuel availability is recovering from its lows, the industrial supply of LPG remains significantly below full capacity. Investors should note that until supply reaches 100%, the company will continue to face inefficient production cycles and higher unit costs.
“Earlier, LPG availability was capped at 50%, which has now increased to around 70%, and supply continues to improve. Despite this, both production capacity and conversion costs have been impacted.”
— Mayank Pravinchandra Shah, Vice President, Parle Products.
Energy supply risks are systemic across the industry because the entire fuel basket is tied to volatile crude oil markets and government priority shifts. This implies that even companies with diversified fuel sources remain vulnerable to broader energy shortages.
“In terms of LPG dependency, around 25 to 30% of industry capacity runs on LPG, while the rest uses other fuels. However, since all fuels are linked to crude oil, the prioritisation of crude for LPG, petrol, and diesel impacts overall fuel availability across industries.”
— Mayank Pravinchandra Shah, Vice President, Parle Products.
The company is facing a sharp double-digit spike in packaging expenses due to rising global commodity prices. This significant inflation in non-food inputs will likely compress gross margins unless offset by pricing or volume gains.
“Another major cost component affected is packaging material. Packaging costs have increased by approximately 15 to 20%.”
— Mayank Pravinchandra Shah, Vice President, Parle Products.
Management is currently choosing to protect market share by absorbing higher input costs rather than passing them to consumers immediately. This strategy signals a temporary hit to profitability to maintain volume growth in a volatile environment.
“While price hikes may become necessary if costs remain elevated, no immediate action is being taken due to market volatility. Companies are currently absorbing the increased costs, but this is not sustainable in the long term.”
— Mayank Pravinchandra Shah, Vice President, Parle Products.
Paras Defence on deal with Bandak Aviation
Paras Defence and Space Technologies operates in high-precision defence and aerospace systems with a focus on indigenisation. Recent management commentary highlights a strategic partnership to bring air-to-air refuelling systems to India, opening a large long-term opportunity in a niche, import-dependent segment with limited domestic competition.
Paras has entered into an exclusive agreement to localise air-to-air refuelling technology in India for the first time. This partnership targets a significant market opportunity previously dominated by foreign suppliers.
“What we have signed with Bandak Aviation is an agreement that we are going to work together to make sure that a critical technology in aviation, such as air-to-air refuelling systems, is brought to India. It is supplied to the end customers, and this will open up a huge funnel which is already on the cards, and that funnel will run into hundreds of millions of dollars worth of opportunity. Now these opportunities will include all the platforms that already have air-to-air refuelling systems.”
— Amit Mahajan, Director
The agreement covers not just new equipment sales but also the servicing and upgrading of refuelling systems on existing aircraft. This dual focus on new hardware and maintenance provides both growth potential and steady recurring revenue.
“Now these opportunities will include all the platforms that already have air-to-air refuelling systems. Those will be required to be upgraded. Those will be required to be serviced, and those will be required to be overhauled as well. And at the same time, new systems or the replacement of certain systems will be required on existing platforms. Always an opportunity for new platforms to have an indigenous air-to-air refuelling system. So it’s a huge plethora of opportunities that we are eyeing with this particular agreement.”
— Amit Mahajan, Director
Paras is positioning itself as the only domestic manufacturer for a critical aviation subsystem that is currently 100% imported. Being the sole local provider aligns with India’s defence indigenisation push and creates a strong competitive moat.
“This becomes a very critical subsystem. So we will work with the platform manufacturers, and currently, these kinds of systems are imported. So there is a big gap that we see that an indigenous player can step into and make the most of this opportunity. Currently, there is no Indian company that is doing something like that.”
— Amit Mahajan, Director
Management conservatively estimates the total addressable market for these refuelling systems to be worth nearly one billion dollars. While this revenue will be realised over time, it represents a significant expansion opportunity.
“See, it is a very early stage for us to estimate, but like I’m telling you, the overall opportunity size, if I may be very conservative, will be very close to a billion dollars. But it’s spread across many years, and we will have to take it in a gradual fashion.”
— Amit Mahajan, Director
The current partnership is a strategic starting point that management expects will eventually transition into a formal joint venture, enabling deeper collaboration over time.
“Initially, when you are working with two companies that have not had earlier business relations, the linkage is purely based on the opportunities that you get and a joint recce kind of thing that both companies have done. Our relationship is fairly new, and as the relationship builds, it starts off with an agreement. Even if you see all the earlier JVs that we have done, we’ve had good working relations in the past. We’ve had our agreements in the past. So agreement is a first step, and then as the companies start gelling with each other, understanding each other’s business and way of working, then we get into more of a JV, like a permanent entity. So by the time we get into that, this can be a phase two if the business needs.”
— Amit Mahajan, Director
The company has reiterated confidence in its growth trajectory, supported by a strong order book and execution visibility.
“While we are currently around 415 cr in terms of trailing 12 months topline, we are on a good trajectory, and we will maintain it for sure. We are maintaining that trajectory; neither are we discounting it, nor are we saying that there is going to be any negative change to it. It is going to be the same orbit.”
— Amit Mahajan, Director
Mirae Asset Management on Energy Transition
Mirae Asset Investment Managers is a global asset management firm offering investment solutions across equity and diversified strategies.The management remains positive on EV adoption, small-cap earnings recovery, and demand across key sectors like auto and defense. While near-term cost pressures persist, the broader outlook continues to stay constructive.
The transition from internal combustion engines to electric vehicles is expected to gain momentum through new government policy support. Following global trends like China’s, India is likely to see an accelerated adoption rate for EVs in the near future.
“I think, you know, the shift from ICE to EVs, as far as auto is concerned, will further get strengthened, and I would expect in the next few months various state governments and the central government to come up with more programs on that side. So, if you look at China today, almost every second car which is sold is an EV, and I think India will also be forced to accelerate this transition going forward.”
— Varun Goel, Senior Fund Manager, Mirae Asset Investment
Smaller companies are emerging from a period of stagnant earnings growth over the last two years. Management anticipates a 20% or higher growth rate in earnings by FY26 due to the current low base and cyclical recovery.
“I think specifically, if you look at the small-cap space, we have seen almost a two-year kind of earnings holiday, and the earnings in FY26 will be very similar to what they were in FY24. On that very low base, we expect 20% plus kind of earnings growth, even despite the war that is going on. Before the war, the estimates were upwards of 25%.”
— Varun Goel, Senior Fund Manager, Mirae Asset Investment.
Tax incentives and government spending are driving strong demand across the automotive, defense, and railway sectors. This positive momentum is expected to continue through the peak festive season.
“I think auto, auto ancillary, consumer durables, the whole auto system space remains one of the biggest beneficiaries of the GST cuts, and we believe that momentum will sustain at least till Diwali. If you look at the whole capex-related activities, defense and railways, we expect a further boost to capex on that side.”
— Varun Goel, Senior Fund Manager, Mirae Asset Investment.
L&T on India’s Nuclear Scale-Up
Larsen & Toubro (L&T) is an Indian multinational conglomerate engaged in engineering, construction, and high-tech manufacturing. The management indicates a clear scale-up in India’s nuclear program, with visibility on capacity addition and a fast-tracked reactor pipeline. With opportunities across large reactors, SMRs, and lifecycle services, nuclear is emerging as a meaningful growth driver for L&T.
Management believes the target for nuclear capacity expansion is historically achievable, based on precedents from other major global economies. This suggests a strong multi-year tailwind for L&T’s high-tech manufacturing and engineering divisions.
“India needs to add capacity at a rate of 4.3 gigawatt on average per year, and these rates have been achieved in the past by countries like the USA and, to a lesser extent, France and China. That was in the late 80s and early 90s. Today, with the latest technologies available, I think this is very much possible and realistically achievable.”
— Anil V Parab, Whole-time Director & Sr Executive VP.
The government is moving into a fast-track expansion phase for stage two nuclear reactors after the prototype milestone, providing clear visibility on future capacity addition.
“I would say now, having started stage two, we will have to scale it up where more such fast breeder reactor capacities will be added by the government. The immediate plan is that after about a year of operation of this prototype fast breeder reactor, they intend to add two more reactors of similar capacity at the same location, which can be set up on a fast-track basis, and then more will be added for stage two.”
— Anil V Parab, Whole-time Director & Sr Executive VP.
The company highlights a clear market split between large-scale utility reactors and Small Modular Reactors (SMRs), with the latter catering to emerging industrial and data-driven demand.
“Now, in nuclear, there are two parts. One is the power reactors, which are 700 megawatt and higher in size, and the second part is India’s commitment to achieve a net-zero carbon footprint by 2070 and support cutting-edge technologies like artificial intelligence. There, you need small modular reactors, which are more for captive consumption of hard-to-abate industries and hyperscaler data centers.”
— Anil V Parab, Whole-time Director & Sr Executive VP.
L&T plans to expand its nuclear business beyond equipment supply into long-term plant services, aiming to capture value across the lifecycle of nuclear assets.
“So we will continue to play and be the industry trendsetter and market leader in nuclear in this particular segment, and over a period of time we will also extend our offerings to plant services, which will be required as more capacity comes on stream. These nuclear power plants, for reliable operation, will need such life extension plant services, which L&T will also address over a period of time.”
— Anil V Parab, Whole-time Director & Sr Executive VP.
L&T expects strong growth visibility in its nuclear segment, with revenues projected to scale significantly depending on the pace of government execution.
“Beyond that, I can’t really share on such media, but what I can tell you is that our current nuclear revenue will, in a realistic way, increase 3 to 3.5 times over the next five years, depending on how the government launches various new reactor plants. If it is faster, growth can be faster; if it is slower, it will depend accordingly.”
— Anil V Parab, Whole-time Director & Sr Executive VP of L&T
Management clarifies the cost structure of nuclear projects, highlighting the share of high-value components relevant for L&T.
“I think, first of all, what you shared is only one type of technology, that is the pressurized heavy water reactor, which is the Indian domestic technology. Other technologies like light water reactors are different. Generally, if you see the breakup, plant and machinery, depending on the technology selected, will be around 20 to 30 to 35% of the total cost. The remaining will be construction and associated commissioning costs.”
— Anil V Parab, Whole-time Director & Sr Executive VP.
Nomura on India: From Overweight to Neutral
Nomura Holdings is a global financial services firm offering research, investment banking, and asset management services across international markets. The firm has turned neutral on Indian equities, signaling a shift in relative positioning within Asia. While markets may move together, the real question is where capital flows next, and whether India can hold its ground amid rising competition from tech-driven markets and evolving global cues.
Nomura has shifted its rating on Indian equities to neutral, indicating that the market is expected to perform broadly in line with its regional peers rather than outperform.
“When we say we are downgrading our stance from overweight to neutral, all we are trying to suggest is that we think the market performance of India will be broadly in line with regional markets. The thesis is very simple. If the war were to deescalate and we start to see normalization of oil and energy flows through the Straits of Hormuz, I think all the markets in Asia will rally.”
— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings
Chetan expects that while India may participate in a regional rally, tech-driven markets like Korea and Taiwan are better positioned to outperform.
“Some markets will rally more. We think tech-oriented markets like Korea and Taiwan will probably rally more. India will also rally, but it is hard for us to expect India to outperform from here.”
— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings
Persistent foreign selling in India is being driven by capital reallocation towards global technology opportunities rather than a deterioration in domestic fundamentals.
“The reason for India’s underperformance, or persistent net selling by foreigners, is very simple. Investors can find opportunities elsewhere, particularly in tech, and that is where they have been buying. They had to sell somewhere to fund those positions.”
— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings
Weak inflows into active emerging market funds are forcing portfolio shifts, increasing the need to sell existing positions like India to allocate capital elsewhere.
“It’s not that emerging market active funds are getting a lot of money. Passive funds are getting more inflows, but active funds are not. So whenever you have an opportunity elsewhere, you have to cut exposure somewhere and allocate capital to that opportunity.”
— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings
Currency movement remains closely linked to foreign investor flows, creating a feedback loop that continues to impact market sentiment.
“The other problem for India is also the rupee. The rupee and equity flows are a bit of a chicken-and-egg situation. If flows start to normalize and we see inflows into India, the rupee will stabilize. But as long as foreigners are selling, the rupee will remain under pressure.”
— Chetan Seth, Asia-Pacific Equity Strategist, Nomura Holdings
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Quotes in this newsletter were curated by Kashish, Meher & Shahid
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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