The Chatter: The Pivot Quarter
Edition #39
Welcome to the 39th 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 16 companies across 8 industries.
Metals
Vedanta Ltd
Education & Training
Physicswallah
Engineering & Capital Goods
Kirloskar Pneumatic Company
Fujiyama Power Systems
Rulka Electricals
Schaeffler India Ltd
Kaynes Technology India
Bharat Forge
Tube Investments of India
Software Services
Canarys Automation
Auto Ancillary
Ashok Leyland
Sona BLW Precision
Uno Minda
Retail
Vishal Mega Mart
Building Materials
Welspun Corp Ltd.
Textiles
Page Industries
Metals
Vedanta Ltd | Large Cap | Metals
Vedanta Ltd is a leading natural resources conglomerate with operations in zinc, lead, iron ore, steel, copper, and more. The company focuses on creating value through strategic capabilities, alliances, and a portfolio of low-cost, profitable assets. It is a global leader in critical minerals and plays a key role in the energy transition by supplying essential materials.
Agarwal emphasized Vedanta’s contribution to India as the largest taxpayer and job creator.
“This is the need of our India. This is the most tax paying company. We have paid almost 5 lakh crore of tax, 50,000 crore every year. Largest job creation because manufacturing creates phenomenal jobs.”
— Anil Agarwal, Chairman
Discussing Hindustan Zinc’s expansion and India’s historical lack of silver production.
“Number one company which has HZL, Hindustan Zinc, will have at the moment 1.2 million ton production, going to produce 3 million tons. It has 1 million ton in South Africa and 2 million tons here. We have silver. India never produced silver. We invented producing silver. Today we produce 800 tons of silver, 25% requirement of India. We are going to cater to 100% requirement of India for 3,000 tons in 3 years time.”
Discussing the aluminium business and strong demand environment for green aluminium.
“Aluminium, we are producing 30 lakh tons today. We have a large mine and we started that work. We are producing green aluminium, probably the largest plant in the world for 30 lakh tons, but demand is so high, whether it is zinc or whether it is aluminium. It is double digit demand which is growing.”
Outlining new government policies that removed regulatory barriers for oil and gas.
“Oil and gas is very close to my heart. The most important thing, most exciting thing is the oil and gas. Government policy has announced that everything has been dismantled whereby it is literally like self-sufficient, long lease of mine till the time the reserves are there, no approvals are required. So I’m looking at oil and gas to deploy 25 rigs, working on it to produce 300,000 barrels to 500,000 barrels to make it 1 million barrels in four to five years time.”
Highlighting Vedanta’s position as largest iron ore producer and ESL’s green steel capabilities.
“Nothing is more important than iron steel. We are the largest producer of raw material iron ore. We were the largest producer and ESL steel company has complete infrastructure to produce green steel because we have complete availability of gas. We have special steel.”
Explaining the power generation business’s cost advantages from pit-head locations.
“This is the steel power. I’m very, very excited because our cost of power is going to be the lowest. All are on the pit head of the coal. So we are going to produce 20,000 megawatt power. This power plant will be again very, very exciting with the lowest power cost because of the proximity and plants that we have.”
Articulating his vision for all five demerged entities to become standalone powerhouses.
“All these five companies are going to be demerged and I’m looking as a vision that each company has the potential and will be like Vedanta by itself, have the same kind of profitability. Because of demerger and merger, as it is, the multiples are very small.”
Emphasizing strong cash generation capability and Vedanta’s fundraising track record.
“Each business is throwing so much of cash. Each business has the potential of throwing cash, whether it is aluminium, whether it is zinc, oil and gas, iron, steel. Iron ore is doing so well and the power. So there will never be a constraint on the capacity and people will be queuing up because we have the capability. We have raised $35 billion. So with our balance sheet there will never be a constraint. So far we have not taken joint venture as a partner but as it goes we’ll see what happens.”
Reaffirming commitment to maintaining Vedanta’s shareholder-friendly dividend approach.
“I live for the dividend. Dividend policy, Vedanta will always be an integral part. We are a dividend paying company. We will remain always a dividend paying company.”
— Anil Agarwal, Chairman
Education & Training
Physicswallah | Mid Cap | Education & Training
PhysicsWallah Ltd. is an Indian edtech company offering affordable online and offline coaching for JEE, NEET, and other exams. It aims to make quality education accessible and affordable for students across India.
The company sees substantial long-term enrollment growth potential due to low market penetration, increasing internet access, and strategic expansion into diverse exam categories and state boards.
“Where is all this coming from? Because there are a lot of kids in India who do not have access to a good quality teacher. Meaning, of those ~ 25 crores kids, we are having less than ~ 2% market share. So with the smartphone penetration, with the Internet penetration, with expanding to state boards as exam categories, K - 10 as exam categories, and adding new exam categories, the enrollment growth is still a long way from here.”
— Prateek Boob, Whole Time Director
Physicswallah’s offline strategy emphasizes student experience and results, leveraging a ~INR 60,000 IIT-NEET ARPU and achieving cost efficiency through controlled teacher costs (under 35%) and rentals (under 12-14%), alongside an optimized student-teacher ratio.
“In offline, we go with the experience story and the result story. And at this ARPU of IIT - NEET is 60,000, our picture becomes fair. We can see the split of that that ~ 35% which is the teacher cost , teacher cost should be less than ~ 35%. The rental should be less than ~ 12 % - 14%. The student - teacher ratio is much better than other brands.”
— Alakh Pandey, Chief Executive Officer and Whole Time Director
Physicswallah is diversifying its revenue by supplying academic books to approximately 3,000 schools through its PW Academy, which contributes to its 4% ‘other’ revenue segment.
“As our brand got stronger, we started tying up with schools and institutions for their academic books. So, we have an in - house vertical around content where we run it as P W Academy. And we supply books, so close to, I think, 3000 schools we give books to the children. ...49% is right now online , and 47% will be offline , 4% is others.”
— Alakh Pandey, Chief Executive Officer and Whole Time Director
Online business growth is expected to surpass offline growth, as the latter transitions from aggressive expansion to a sustainable annual growth rate of 25-30%.
“The growth of our online will outpass -- surpass the growth of offline. ... Now, the growth of offline will be sustainable , and that will be ~ 25 % - 30%.”
— Alakh Pandey, Chief Executive Officer and Whole Time Director
Physicswallah has optimized its marketing strategy by concentrating spend in peak enrollment quarters, leading to an expected reduction in full-year marketing expenses to 8-9% of revenue.
“Basically this year we have changed the marketing cycle. ... our overall marketing spend, that is going to be ~ 8 % - 9% this year, which was ~ 9.6% last year.”
— Prateek Boob, Whole Time Director
Physicswallah currently holds less than 2% of the total addressable market, positioning it as a fast-growing 5th player in offline penetration with significant growth potential.
“Overall, if we look at TAM, then our market share is less than ~ 2%. So we are just barely scratching the surface. If we look at offline penetration, then in this industry, we are the number 5th player at this point of time. There are four more players above us. But I am the fastest growing offline brand in the country at this point of time.”
— Prateek Boob, Whole Time Director
The company achieves a high student Lifetime Value (LTV) and exceptional daily engagement, with paid users spending 100-120 minutes on the platform daily.
“So, the LTV of our company is already very high. ... On my platform, a paid user spends almost 100 to 120 minutes on a daily basis. That makes me a very unique company.”
— Prateek Boob, Whole Time Director
Physicswallah’s offline expansion is strategically driven by its online presence, with 80% of offline admissions originating from its online learner base in specific pin codes.
“Our offline is linked to online. ~ 80% of our offline admissions are from online. Because in online, we are teaching almost 15 x more students. And if we have a sufficient online learner base in any pin code, then we go to that pin code and open our offline learning center.”
— Prateek Boob, Whole Time Director
Rapid growth in new exam categories signifies successful business diversification, while existing JEE and NEET segments continue to offer multi-fold growth opportunities across various regions.
“So new exam categories are growing very rapidly. In terms of JEE and NEET growth rates, we have taken a good market share in Hindi heartland. This is Central India and this is Southern India where we are also growing very rapidly. So overall there is a scope to do multi - fold growth in JEE and NEET itself. And in other exam categories, we have diversified our business.”
— Prateek Boob, Whole Time Director
Engineering & Capital Goods
Kirloskar Pneumatic Company | Small Cap | Engineering & Capital Goods
Kirloskar Pneumatic Company (KPCL) is a leading manufacturer of Air Compressors, Pneumatic Tools, Air Conditioning and Refrigeration systems, Marine HVACR, Process Gas systems, and Hydraulic Power Transmission machinery. With certifications in ISO standards and a reputation for Systems Engineering and Turnkey Projects, KPCL has established joint ventures and technology partnerships to develop sophisticated products for various industrial sectors while maintaining high standards of quality and reliability.
The company experienced a challenging first half of the fiscal year with reduced order booking, sales, and profits compared to the prior year.
“We had a quarter that was challenging on all fronts in order booking, in sales as well as in execution, making it a rather poor H1. For the first time in many years, our order booking, sales and profits were lower than the corresponding period of the previous year.”
— K. Srinivasan, Managing Director
Order booking was negatively affected by uncertainty in the oil and gas sector, resulting in an order book below planned levels.
“Order booking was most impacted due to the underlying uncertainty and churn, particularly in the oil and gas space, and this left us with an order book of INR1,667 crores as on 1st October as compared to INR1,624 crores on 1st April ‘25, significantly below our plan.”
— K. Srinivasan, Managing Director
The company is strategically entering the INR5,000 crore commercial air conditioning market with its indigenous Zephyros C system and has applied for a PLI scheme.
“In a significant move, the Board cleared filing an application under the production-linked incentive scheme for entering the commercial air conditioning space with our unique Zephyros C system. The commercial air conditioning market in India is over INR5,000 crores, and we expect to address a significant share of this with our efficient and economic solution.”
— K. Srinivasan, Managing Director
The oil and gas sector faces ongoing unpredictability due to technological changes, energy transition, and geopolitical uncertainty, leading to a sustained slowdown in gas compression systems that is not expected to improve soon.
“The oil and gas sector globally has been going through a period of unpredictability that has come from multiple reasons, technological changes, energy transition as well as the geopolitical uncertainty. As a company, we have learned to work with all this... Clearly, this has been slowing down quarter-on-quarter for nearly two years now. We don’t see this improving in the next quarters either.”
— K. Srinivasan, Managing Director
The company has experienced a structural change and loss of market share in the process gas business, especially CNG packages, due to competitors offering cheaper products, necessitating a review of competitiveness.
“One, there has been a structural change that is happening in the process gas business. Particularly in the gas distribution side, we seem to have lost market share in terms of the CNG packages and the boosters... I believe there is a clear down trading in this sector where they have all gone down to cheaper products and they are acceptable to them. So first is there is a sectorial change and there we have to look at how we can make ourselves more competitive.”
— K. Srinivasan, Managing Director
The company has secured two initial orders for hydrogen packages and has substantial quotations outstanding, aiming to embed itself as a critical part of the growing hydrogen value chain.
“We have put out quotations of almost more than INR1,000 crore for various hydrogen packages. The two orders that we’ve won gives us a lot of positive energy simply because for the first time, we are going to have an end-to-end... As this value chain grows... We would get embedded into this value chain.”
— K. Srinivasan, Managing Director
Fujiyama Power Systems | Small Cap | Engineering & Capital Goods
Fujiyama Power Systems specializes in designing, supplying, and installing rooftop solar systems, offering solar panels, inverters, and batteries. The company focuses on innovation with patented rMPPT technology and provides a wide product portfolio under ‘UTL Solar’ and ‘Fujiyama Solar’ brands.
The company’s growth is driven by addressing the fundamental problem of unreliable grids with off-grid and hybrid solutions, rather than solely relying on government subsidies.
“Our roof-top solar sales have historically been in off-grid and hybrid solutions. These are backup-driven installations, not primarily subsidy-driven. Our customers invest in solar because it solves their real problem they face, which is unreliable grid.”
— Pawan Kumar Garg, Chairman and Joint Managing Director
Increased in-house manufacturing of solar panels and batteries was a significant factor in the improvement of material margins.
“A key driver for this margin improvement was the movement in material margin, which improved by 0.7% over last year. This came mainly from higher in-house manufacturing across solar panels and batteries.”
— Prashant Gupta, Chief Financial Officer
A temporary revenue decline was attributed to customers delaying purchases in anticipation of a GST rate cut on solar equipment.
“The decline in revenue was largely due to the impact of the GST rate cut on solar equipment from 12% to 5%. The announcement and implementation of this change created a temporary pause in the market as customers postponed purchases to benefit from the lower tax rate.”
— Prashant Gupta, Chief Financial Officer
Fujiyama’s solar module manufacturing expansions are for captive consumption and B2C channel network, insulating them from potential oversupply issues in the broader B2B market.
“Our module manufacturing is backward integration only... all our capacities are for self-consumption. So, the panel expansions that we are doing or the existing capacities are totally for in-house consumption, for captive use and for our channel network... the issue of oversupply, we don’t have to go to B2B to sell our more than 90% business is for B2C, and all our capacities are for self-consumption.”
— Pawan Kumar Garg, Chairman and Joint Managing Director
Fujiyama’s unique market strategy involves converting existing non-solar inverter and battery users to solar solutions, effectively expanding the market rather than competing for existing shares.
“Sir, our market is completely different. We are converting the normal inverter market into solar. We are developing the market. We are not taking anyone’s share... So, we are basically converting those customers into solar, who are using the non-solar inverter and battery.”
— Pawan Kumar Garg, Chairman and Joint Managing Director
Fujiyama is actively focusing on expanding its presence in North-East India, Andhra Pradesh, Telangana, Karnataka, Odisha, West Bengal, and Jharkhand, aiming for at least one distributor and service engineer per district.
“We are focusing on North-East. Andhra Pradesh, Telangana, Karnataka. These are the three states. Then Odisha, West Bengal and Jharkhand, these states... We have to bring them to such a level. We will say that there should be at least one distributor in every district. And one service engineer.”
— Yogesh Dua, Chief Executive Officer and Joint Managing Director
Rulka Electricals | Nano Cap | Engineering & Capital Goods
Rulka Electricals is a turnkey projects contractor specializing in Electrical & Fire Fighting solutions. They provide a wide range of services including Electrical Solutions, Solar EPC Contracts, Maintenance Services, and Data & Voice Cabling Installation across various sectors like Industrial, Commercial, Retail, and Theatre.
Rulka Electricals is diversifying its sector focus by significantly entering the growing airport infrastructure business, alongside its core warehousing and retail segments.
“The thing what we do is in terms of our portfolio if you see, it continues - it contains about 60% of revenue from warehousing business and about 30% of business from retail business. This year, what has changed is we have also come very good into airport business, that is airports which are developing across India.”
— Nitin Aher, Whole-Time Director and Promoter
EHV projects are expected to yield the highest margins, followed by firefighting and then electrical works, signaling a strategic shift towards more profitable segments.
“Sector earning is EHV and fire are the sectors. If I tell you first, second, third, in terms of that way, it is, like, EHV, then fire, then electrical.”
— Nitin Aher, Whole-Time Director and Promoter
The company is proactively shifting its focus towards Extra-High-Voltage (EHV) government projects to diversify and enhance its revenue mix.
“So, going forward, we are also concentrating on EHV, that is, Extra-High-Voltage projects, like, as Rupesh told, for 220 kV, 100 kV lines, so that substations and all those type of government sector works, which we are taking forward with, and we also are into, getting into it, so that will also take contribution in this percentage.”
— Nitin Aher, Whole-Time Director and Promoter
The company is targeting complex, high-voltage projects in the transmission and distribution sector, which are expected to provide larger scale and improved long-term profitability.
“We are also actively pursuing high-voltage and extra-high- voltage transmission and distribution works, including 33 kV and 220 kV networks. These projects are technically demanding but offer scale, complexity and better long-term opportunities.”
— Rupesh Kasavkar, Chairman and the Managing Director
Schaeffler India Ltd. | Mid Cap | Engineering & Capital Goods
Schaeffler India Limited is a leading company in the automotive and industrial technologies sector. The company focuses on innovative technologies for CO2-efficient drives, electric mobility, Industry 4.0, digitalization, and renewable energies, contributing to motion and mobility efficiency and sustainability. They also offer top-notch training services to key groups in the automotive aftermarket and industrial distribution segments. With a strong presence in all business segments, the company maintains a balanced revenue mix between automotive and industrial operations.
Schaeffler India’s localization content rose to 79% in Q3 CY25, demonstrating effective utilization of domestic investments and alignment with India’s self-reliance initiative.
“And I’m happy to say that our localization content has increased to a percentage of 79% in the quarter, which is clearly a true indicator that we are leveraging the investments that we have been making in India for India’s growth and clearly aligning with the national agenda of Atmanirbhar Bharat.”
— Harsha Kadam, Managing Director and Chief Executive Officer
OEM customers are optimistic about future demand, driven partly by the recently introduced GST reforms.
“Well, we’ve been talking to a number of our OEM customers and what we hear and see is they are bullish about the demand that’s going to come up in the coming months as such. Obviously, the GST reforms is one of the triggers or the catalysts for this to happen.”
— Harsha Kadam, Managing Director and Chief Executive Officer
Automotive localization is high (85-90%) due to OEM preferences, while the industrial segment, particularly bearings, has lower localization with 40% imports due to project-based nature and varying volumes.
“So automotive, as Harsha has been mentioning that automotive is always higher localization because the auto OEs prefer the suppliers to be closer to their plants. So of course, in our case, also, automotive localization is in the range of 85% to 90%. And industrial because of several projects and sometimes the volumes not being so high, it is almost 40% is imports. So on bearings and all, 40% is imports.”
— Hardevi Vazirani, Director Finance and Chief Financial Officer
The volatility in the Bearings and Industrial Solutions segment’s growth is primarily due to the timing differences inherent in project-based and tender-based businesses, not a structural market weakness.
“Some of the sectors within the industrial business operates is we have project - based business. So you would have the customers executing or even seeking the products in that quarter for a project that gets executed the next succeeding quarter. So there is always a timing difference when it comes to project - based businesses. So those sectors, wherever we have the project - based businesses would continue to see the up and down, the seesaw effect would come in definitely.”
— Harsha Kadam, Managing Director and Chief Executive Officer
Capex will increase in 2026 compared to the current year, but a significant pickup in investments is anticipated only from 2027 onwards, following a period of capital efficiency focus.
“So, the capex activity, as we see this year, we were focusing on capital efficiency because we did a significant amount of investments in the last 3 years. But in the coming years, not immediately next year, that means in 2026 , we will be doing better than the current year. However, the pickup will come from 2027 onwards.”
— Hardevi Vazirani, Director Finance and Chief Financial Officer
Kaynes Technology India | Small Cap | Engineering & Capital Goods
Kaynes Technology India Limited is a leading end-to-end electronics manufacturing company specializing in IoT solutions. With expertise in electronics system design and manufacturing services, Kaynes serves various industries including automotive, aerospace, defense, healthcare, and IoT. They provide services from conceptual design to life-cycle support, catering to the diverse needs of clients across different sectors.
The management admitted to minor errors in financial disclosures but clarified they were reporting oversights, not issues of intent or governance.
“We acknowledge that a few disclosures required clearer clarification and articulation. These were errors in reporting of disclosure in notes to accounts and not lapse of intent, governance or conduct.”
— Ramesh Kunhikannan, Executive Vice Chairman
Key strategic initiatives in OSAT and high-end PCB manufacturing are advancing, aiming to establish India’s position in global semiconductor and domestic manufacturing.
“Our OSAT initiatives is progressing well and positions India meaningfully in the global semiconductor value chain. Our high-end PCB program strengthens domestic manufacturing in a largely imported independent category.”
— Ramesh Kunhikannan, Executive Vice Chairman
A disclosure inconsistency was a minor, rectified omission in the notes to standalone financial statements of a subsidiary, not affecting the accuracy of the underlying financials.
“The oversight pertains solely to the notes to the stand-alone financial statements in one of the companies, but the disclosure was inadvertently omitted. The underlying financial statement and schedules themselves were correct. So, there is no inconsistency actually speaking. It was just a small error of typographical nature in one of the subsidiary financials.”
— Jairam Sampath, Whole-Time Director And Chief Financial Officer
To address typical EMS working capital intensity, the company is implementing initiatives such as supply chain finance, factoring, bill discounting, and inventory optimization.
“The working capital intensity is typical to the EMS industry and multiple initiatives are underway to improve it, including collaborating with onboarding large customers into supply chain finance program, leveraging factoring and bill discounting and driving inventory optimization.”
— Jairam Sampath, Whole-Time Director And Chief Financial Officer
The company expects robust growth across various verticals, including automotive, industrial, EVs, railways, aerospace, defense, and IT, indicating diversified growth drivers beyond smart meters.
“As far as the other verticals are concerned, there is strong growth in automotive, there is strong growth in industrial other than smart meters, there is strong growth in electric vehicles. Also, now the resurgence of strong sectors like railways, electronics, as well as aerospace, outer space and defense, and also in IT field.”
— Jairam Sampath, Whole-Time Director And Chief Financial Officer
The company plans to implement software to automate related party transaction disclosures for its numerous subsidiaries, aiming to prevent future reporting errors.
“For a related party transaction, we are going to use some software to make sure that the contra entries of notes to accounts are fully done. And so that we don’t have this situation of any repeats. Because we have, we do have a large number of subsidiaries.”
— Jairam Sampath, Whole-Time Director And Chief Financial Officer
Bharat Forge | Mid Cap | Engineering & Capital Goods
Bharat Forge Limited is a global leader in metal forming, catering to sectors like Automotive, Railways, Aerospace, and more. It specializes in manufacturing and selling forged components, including aluminum castings for the auto and industrial sectors. With multiple manufacturing facilities in India, it serves both domestic and international markets.
Bharat Forge plans to intensify its focus on India as a key growth market, implementing a strategy to secure a larger share of the fast-growing domestic business.
“So, what I would really like to say is that we will continue our focus on our customers, products and opportunities globally but we are going to double down on India as most companies in the world are because it’s the fastest growing global market with the most headroom for growth. So, we have created a strategy that will allow us to get a stronger piece of the action in India and we are going to take some very fundamental steps to implement a growth strategy that allows us to get a larger share of this business.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
There are temporary five-year non-compete clauses in certain geographies, such as North America, for the American Axle business regarding exports.
“There are geographies like in North America that are non-compete, but everything is only for a period of five years.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The strategy for American Axle’s India business focuses on growth in India’s LCV, ICV, SUV, and off-highway/specialty axles segments.
“So, building your own LCV and ICV business is a big opportunity in India, as is the SUV sector when it comes to the on-highway market. And then you also have a large off-highway and specialty axles business. So, we will focus on these two areas and grow our business.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
Kalyani Strategic Systems secured a new defense order exceeding INR 250 crores from the Navy for unmanned marine underwater systems, which will be delivered within one year, highlighting a focus on the underwater domain.
“So, Kalyani Strategic Systems secured a business of more than 250 crores for the supply of underwater systems. This is for basically unmanned marine systems for the Navy. So, this is one of the orders that we have won, second order that we have won for this, but a bigger order. And this was just won yesterday, and this will be delivered from our facilities in Pune. This is within one year. All this has to be delivered within one year.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
The company is exploring the server manufacturing and data center space as a significant new opportunity but is currently in the learning phase, with further clarity on scale and margins expected in 6-9 months.
“It’s a very small, it’s a business that we are trying to evaluate, because we see that as a very large new opportunity. We see the whole data center space as a big opportunity. Server manufacturing is, I don’t know if it’s the end in itself or a means to an end, because we want to understand the whole product level and the system level, architecture, complexity, and understand where opportunity for us lies. So, I don’t think looking at server manufacturing as a very big opportunity right now, because we are only learning this business. Okay. So, I think in six months from now to nine months from now, we will have a better idea of this business. Clearly, that’s the whole area that we are interested in. But it’s too early to talk about what size and scale and margins.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
Management acknowledges that geopolitical issues have delayed recovery expectations, now anticipating Q3 performance to be similar to Q2, with hopes for resolution this quarter.
“Well, clearly, when we spoke last time, we were more hopeful of a quicker resolution to the issue. And if you see the statements coming out of the US, it seems like there’s a solution, which is very close to finalization. So, I think we would have hoped for it to have happened a little earlier. But I would expect that, hopefully, in this quarter, it should happen. And I would say Q3 will be on a similar line as Q2. As of now.”
— Amit Kalyani, Vice Chairman and Joint Managing Director
Tube Investments of India | Mid Cap | Engineering & Capital Goods
Tube Investments of India Limited (TII) is a key player in India’s manufacturing sector, providing a diverse range of products across industries like Automotive, Railway, Construction, Mining, and Agriculture. With verticals in Engineering, Metal Formed Products, and Bicycles, TII also has interests in TMT bars, Truck Body Building, optic lens, and vision systems for autos. As part of the Murugappa Group, a prominent Indian conglomerate, TII continues to drive growth through strategic expansions and explorations.
The company holds approximately a 50% market share in the Rs 900 Crores industrial chains market.
“Industrial market size is about 900 Crores and we do almost maybe let us say close to 50% share in that.”
— Mukesh Ahuja, Managing Director
The company has observed a significant uptick in demand post the September GST rate change, especially in October and November, attributed partly to the festival season.
“After that we see a really uptick in demand, but which can be coupled with the festival season also. October as well as November, both seems to be very very strong months like earlier festival months used to be but this time it is much better.”
— Mukesh Ahuja, Managing Director
The GST cut on ICE vehicles has a minimal impact on e-tractors and small commercial vehicles but significantly impacts the three-wheeler EV business due to increased ICE vehicle attractiveness.
“So, for example, in the e - trac tor business and the small commercial vehicle business, the impact is minimal and is recoverable in two months to three months from a total cost of ownership perspective. In case of three - wheeler business, where we see the impact is the highest because the diesel that translates to almost Rs. 20,000 for an ICE vehicle from a customer price point perspective.”
— Jalaj Gupta, Managing Director, TI Clean Mobility
The company has deliberately avoided retrofitting ICE vehicles for EV conversion, believing that purpose-built EVs are a superior approach.
“So, we have carefully and we have purposely chosen not to go this route, because we are convinced that grounds up EV is any day a better bet as compared to a retrofit on any of the vehicles. That is our understanding and our take on this.”
— Jalaj Gupta, Managing Director, TI Clean Mobility
Software Services
Canarys Automation | Nano Cap | Software Services
Canarys Automations Limited is a leading IT solutions provider. Its expertise lies in enabling digital transformation for businesses through its comprehensive range of software solutions in the space of Digitalization, Modernization, Automation and Intelligence. Its business operates across two verticals viz., Technology solutions and Water Resource Management Solutions.
AI is a major market disruptor, and Canarys is responding by rapidly upskilling over 25% of its workforce in AI/ML and delivering most new projects with AI capabilities to meet customer demand for faster, higher-quality, and cost-optimized solutions.
“AI, it is a disruption happening in the market and any new customer the first thing they ask is do you have AI practice and if yes, what kind of practice, right? So even if you have gone through my presentation, 25% of the Canarians have really upgraded the capabilities into AI, ML and data. So how cloud interrupted the entire business and the infrastructure side, right, so, the scaling part, AI is interrupting the automation and early to market. So, the customer preferred to be on AI because you can deliver much faster, pre-tested and quality is much better and the cost wise is also optimized. So, it is inevitable. At least for now, it is difficult to sustain without the AI capabilities. So, we are investing constantly on the AI skills, upgrading our staff, upgrading our solution. So more than 25% of the Canarians have already upgraded. We had a lot of training programs for certification. So, most of the projects are AI driven today, whatever we deliver.”
— Sheshadri Srinivas, CEO and Executive Director
Canarys’ Water Resource Management (WRM) contracts are multi-year (3-5 years), while 35-40% of IT solutions contracts are also multi-year, with the remainder being shorter-term.
“The WRM is definitely in a multi-year contract. Because we sign up minimum 3 years and it goes up to 5 years. So, it will be 3-5 year contract with WRM. It is all multi-year. With the IT solutions also, as I mentioned, about 35% - 40% is on a multi-year contract. And rest are short, mid-term to long-term, I would say, like, 6 months, 12 months, 15 months kind of contracts.”
— Sheshadri Srinivas, CEO and Executive Director
The current margin decline is a deliberate result of strategic investments in talent, products, and expansion, with profits being reinvested for growth rather than raising external capital, a trend expected to continue for several quarters until the business scales further.
“The margin decline, as I read out during my presentation as well, we are constantly investing on people, products and the expansion. So, when you are at the growth phase, two things can happen, right? So, one, whatever the profits we generate, you can invest back into the system and then grow or you can raise money through other systems, meaning it can be debt or equity or any other means. I am not taking the later route. So, we are investing some of our profit margins and then growing for now. And this will continue for at least next few quarters and then once we get into the autopilot mode, then we can see there will be a change in the margin as well. But we are cautious on even the investments and how we want to really scale this.”
— Sheshadri Srinivas, CEO and Executive Director
Canarys’ base business has 35% recurring revenue, while Fortira significantly contributes with 75-80% recurring revenue from long-term contracts.
“Canarys India, we have a repeat business of about 35% comes from the repeat orders and the long-term contracts what we have. And with Fortira, we have 75% - 80% is the repeat order because we have long-term contracts in Fortira.”
— Sheshadri Srinivas, CEO and Executive Director
Canarys has developed over 25 proprietary solutions available on major global marketplaces, enhancing its innovation and credibility in technology.
“Over the years, we have built 25 plus proprietary domain agnostic solutions that solve real challenges in DevOps, cloud migration, automation, and modernization. These solutions are now listed on global marketplaces like Microsoft, Azure, GitHub, SAP Cloud, and our own Canarys Marketplace.”
— Sheshadri Srinivas, CEO and Executive Director
Auto Ancillary
Ashok Leyland | Mid Cap | Auto Ancillary
Ashok Leyland specializes in manufacturing commercial vehicles, components, and diesel engines for industrial, genset, and marine applications. Its foundry division produces automotive parts like cylinder blocks, heads, and tractor housings, serving the automotive industry.
Ashok Leyland’s decision to enter battery manufacturing signals a long-term strategic pivot into the EV ecosystem, reducing reliance on external suppliers for critical components.
“In the 2nd Quarter, Ashok Leyland also took a milestone decision to foray into the battery manufacturing business, giving shape to its long - term strategic plans.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
The company’s market share gain in the domestic MHCV segment, excluding defense and EVs, indicates strong competitive performance in its core business.
“Our domestic MHCV market share was at 31%, with a gain of 50 basis points over H1 of last year. This is without defense and EVs.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
Increased freight demand is a more significant driver for new truck purchases than price reductions, indicating strong underlying economic activity boosting the CV industry.
“To me personally, higher freight demand is a bigger factor than the price cut or the GST cut for the truck itself. Because when there is demand, people would be coming out to replace their older fleets or buying new trucks.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
A drastic reduction in the MHCV truck break-even volume, from 6,000-7,000 units to 1,000-1,200 units a month, significantly de-risks profitability even during market downturns.
“Break - even volume when considered in terms of the units we have to sell for MHCV trucks. It used to be about 6,000 - 7,000 units a month. And now it has dropped to, I would say, more or less closer to 1,000 - 1,200 units a month.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
Plans to increase LCV capacity by 30-50% to 110,000-120,000 units with minimal investment signal confidence in the LCV segment’s growth and efficient capital deployment.
“Our current capacity is close to 80,000 units on the light commercial vehicles. But we have already laid out a plan to increase this capacity to 110,000 - 120,000 units without much of an investment.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
The company aims for 20% CAGR in exports to reach 25,000 units in 2-3 years, driven by strategic focus and higher margins from international markets.
“Last year, our volume was 15,000 plus in exports and this year, we are targeting about 18,000 units in the exports. Now, of course, the next couple of years or maybe 3 years, we would definitely like to touch that 25,000 mark as well. Exports, as you are aware, the margins are fantastic and therefore, it also helps us in the margin equation.”
— Shenu Agarwal, Managing Director and Chief Executive Officer
Retail
Vishal Mega Mart | Mid Cap | Retail
Vishal Mega Mart caters to middle and lower-middle income consumers in India by offering a wide range of products through its own brands and third-party brands. It operates across apparel, general merchandise, and fast-moving consumer goods categories via physical stores and online platforms.
Vishal Mega Mart is strategically increasing its store presence in the Southern region, with 15 out of 28 new Q2 stores opening there, driven by strong responses from states like Kerala, Karnataka, Telangana, and Andhra Pradesh.
“So, firstly, I would say that your observation is correct. We have opened a significant number of stores in the southern region. Firstly, as I mentioned in the last quarter call, we are getting a very good response from Kerala... 15 out of 28 stores opened in the south. 13 opened in the rest of the country as well.”
— Gunender Kapur, MD and CEO
The company anticipates the GST reduction will not decrease average bill value but rather boost consumption, either by encouraging customers to buy more items or to opt for more aspirational, higher-priced products due to increased affordability.
“my assumption at this moment is that it would not impact our average bill value at all because I’m also quite optimistic that this will lead to an increase in overall consumption. So, we anticipate one of the two scenarios... One is folks who are going to buy more things from the store... The second thing also, which will inevitably happen is that folks who are desirous of buying a more aspirational, higher price point product may find that it’s become somewhat more affordable right now.”
— Gunender Kapur, MD and CEO
Quick commerce revenue contribution ranges from 1.5% to over 9% of total revenue, with the higher end being a positive surprise given its recent rollout and maturity variations across stores.
“But the range falls almost between at the lower extreme 1.5 or thereabouts percent of our revenue and at the higher end, 9% plus of our revenue... And I would say 9% plus in such a short period is a pleasant surprise for us.”
— Gunender Kapur, MD and CEO
Vishal Mega Mart’s fastest growth is in higher price point, more fashionable apparel where quality is enhanced, and it commits to being the most competitive on opening price points within organized retail, not necessarily against unorganized online players like Meesho.
“The most fashionable, highest price points are growing the fastest... These are the price points where we’ve completely enhanced the fashionability and quality... On the opening price point, we will be the most competitive in the country. Now, I will clarify vis-a-vis all the organized sector retail, because the mom-and-pop stores, it’s impossible for us to monitor anything...”
— Gunender Kapur, MD and CEO
GST reductions will positively impact 1% of apparel revenue, 34% of general merchandise revenue, and a substantial 50% of FMCG revenue, leading to varying category benefits.
“In apparel, only 1% of our revenue is impacted... That number is significantly higher for general merchandise, where almost 34% of our revenue is positively impacted by GST reduction... And lastly, the largest impact would be on FMCG, where 50% of our FMCG revenue would be positively impacted by the GST reduction.”
— Gunender Kapur, MD and CEO
Sona BLW Precision | Small Cap | Auto Ancillary
Sona Comstar is a leading global mobility technology company specializing in designing, manufacturing, and supplying precision-forged components like bevel gears, differential case assemblies, and motors for electrified and non-electrified powertrains. It serves automotive and other industries with high-quality, mission-critical systems and bespoke solutions.
Company pivoted from heavy to light rare-earth magnets and developed rare-earth-free ferrite motors within months of China’s export ban impacting Q1 production.
“Second, since 8th April, it has been widely reported that China has stopped supplying heavy rare-earth magnets. This shortage has impacted the production of EV traction motors for us in Q1. In response, what we did was we shifted to alternative motor designs that do not rely on heavy rare-earth magnets. So now we also manufacture our motors using light rare-earth magnets, and in this quarter, we have also successfully developed, tested, and validated a rare-earth-free Ferrite Assisted Synchronous Reluctance Motor for electric three-wheelers and light commercial vehicles.”
– Vivek Vikram Singh, MD and Group CEO
Five-year US tariff relief extension on domestically assembled vehicles expected to benefit Sona Comstar’s US customer base.
“Third, again, in the news a lot, but uncertainties regarding the USA and the tariffs, they continue to persist during the 2nd quarter. However, I would like to add that the recent decision by the US administration to extend tariff relief on vehicles assembled in the US for 5 years should benefit our US customers, who are predominantly assembling their vehicles locally within the US.”
– Vivek Vikram Singh, MD and Group CEO
Proposed China JV with JNT shelved indefinitely due to geopolitical concerns and capital allocation priorities; engagement continues for potential future collaboration.
“I’d like to add that after careful consideration, we have decided to put a proposed joint venture with JNT in China in abeyance. This decision is based mostly on geopolitical factors and the need to prioritize other active capital allocation decisions. We remain in touch with JNT, and hopefully, we’ll do some other things together, but for now, the joint venture is in abeyance till things change.”
– Vivek Vikram Singh, MD and Group CEO
First Mexico plant order worth ₹2.6 billion for US recreational vehicle OEM validates plant strategy amid trade uncertainties; production starts Q2 FY28.
“As I mentioned earlier, we’ve secured our first program for the new driveline plant in Mexico, from where we will supply differential assemblies to a recreational vehicle OEM in the US. This program has added 2.6 billion to our order book with production expected to start in the second quarter of FY 28. This is a second order from this customer, which obviously shows confidence of the customer in us, but it’s very significant, given the current geopolitical and trade environment, and shows that we were right in opening or launching our Mexico plant last year when we did so.”
– Vivek Vikram Singh, MD and Group CEO
Railway business order book exceeds current run rate requiring capacity scale-up; new product pipeline including brakes, couplers, suspension mapped for 3-5 year growth.
“On the railway, we spoke last quarter as well. So now we have spent about 5 months in the business. We are very optimistic about the potential that the business presents from a medium-term perspective. As of now, we are working on meeting the demand, as you can see from the order book as well, there is order book which is higher than what the business run rate is. So we have to scale up to meet the demand, which is quite strong. Over the medium term, we have to add new products. We are working on our existing product, adding new varieties of brakes, couplers, suspension, and then we have identified new areas where we’ll enter from the next 3 to 5 year perspective.”
– Amit Mishra, Head, Railway Business
Uno Minda | Mid Cap | Auto Ancillary
Uno Minda specializes in producing and trading auto components like lighting, alloy wheels, horns, seating systems, seatbelts, switches, sensors, controllers, handle bar assemblies, and wheel covers. It serves markets in two-wheelers, three-wheelers, and four-wheelers both domestically and internationally, offering a wide range of automotive solutions.
Electric 2-wheeler penetration reached 7.8% in Q2 FY’26, up from 5.8% in full FY’25, showing accelerating EV adoption.
“Meanwhile, electric 2-wheeler category continued to gain traction with sales rising 5% quarter-on-quarter and 9% year-on-year, reaching 3.12 lakh units. The e-2-wheeler penetration rate for Q2 FY ‘26 stood at 7.8%, up from 6.3% in Q1 FY ‘26 and significantly higher than 5.8% recorded in the full FY ‘25. This steady upward trend highlights the increasing consumer acceptance and policy support driving India’s transition towards sustainable mobility.”
– Sunil Bohra, Group Chief Financial Officer
Airbag JV (TG Uno Minda) delivered 28% revenue growth as side and curtain bag capacity ramps up amid regulatory tailwinds.
“The share of profit from associates and joint ventures rose to INR 63 crores in quarter 2 compared to INR 48 crores in the corresponding quarter last year. While all major JVs, Denso, Roki and TRML performed well, the TG Uno Minda joint venture delivered a robust revenue growth of 28% year-on-year. The JV commissioned its enhanced airbag manufacturing capacity in Neemrana in Q3 FY ‘25, adding side and curtain bags to its product portfolio. This expanded capacity is now ramping up steadily, supported by rising OEM demand for airbags in line with the enhanced regulatory and requirements.”
– Sunil Bohra, Group Chief Financial Officer
Rare earth magnet supply disruptions impacted 2-wheeler switch exports in Q2, though situation is normalizing in current quarter.
“Growth in 2-wheeler segment was driven by market share gains, favorable customer mix and sustained domestic volume growth. Although 2-wheeler switch exports were impacted by supply disruptions of rare earth magnets during the quarter, the magnet situation has been somewhat getting normalized in the ongoing quarter. Meanwhile, the 4-wheeler switch business continued to strengthen, supported by a rising kit value per vehicle as OEMs increasingly adopt advanced feature-rich switch systems.”
– Sunil Bohra, Group Chief Financial Officer
Company began tail lamp exports to a major American 2-wheeler OEM, expanding global footprint while benefiting from LED adoption in EVs.
“During the quarter, the company also commenced a tail lamp supplies for export to a marquee American 2-wheeler OEM, further reinforcing its presence in the global market. The 2-wheeler lighting segment also continued to gain momentum, benefiting from the accelerating transition to LED systems. Higher e-2-wheeler penetration has been a key growth driver as these models predominantly adopt LED lighting solutions. Uno Minda remains one of the leading suppliers of lighting systems to both established OEMs and new age electric 2-wheeler manufacturers.”
– Sunil Bohra, Group Chief Financial Officer
PN3 regulatory approval for Inovance JV expected within FY’26; traction motors will use heavy rare earth magnets, creating supply chain exposure.
“In terms of JV with Inovance approvals, we have applied for this PN3 approval to government only in July. We have been working very close with the government. We understand internally, they have got certain approvals, but we don’t know what all approvals they have got. But as you understand, it is going as planned, and we should be having approvals ideally in the next few months. Very difficult to say a time line because it’s government and where things might take time, where things might not. But we are optimistic that ideally within this fiscal year, we should have approval in hand. In terms of traction motors, whether they use HRE, yes, they do use HRE magnets.”
– Sunil Bohra, Group Chief Financial Officer
Building Materials
Welspun Corp Ltd. | Small Cap | Building Materials
Welspun Corp Limited is a leading welded line pipe manufacturing company globally, offering various solutions in line pipes including LSAW, HSAW, and ERW pipes. The company is part of Welspun Group and provides services like coating, bending, and double jointing.
A significant market shift in the U.S. is emerging, with new demand for gas pipelines driven by the energy requirements of rapidly expanding data centers, in addition to existing LNG exports.
“Earlier, we were all talking about the Permian gas going to the Gulf Coast for LNG exports. We are now seeing a shift. Apart from that what LNG exports are happening, we are also now seeing a shift because of mushrooming of the data centers, which is likely to happen in America. These data centers are energy guzzlers... So, this is one major shift which is now capturing American market.”
— Vipul Mathur, Managing Director and Chief Executive Officer
Indian water sector fund crunch expected to ease early next year; river interlinking projects in MP, Maharashtra, Rajasthan could generate 4-5 million tons of pipe demand.
“The Indian market, the water sector in the Indian market has been slightly depressed over the last few quarters because of the fund crunch which we have been noticing. It appears that this fund crunch is now going to get over. We feel that starting next year or maybe the early part of next year, we are expecting the funds flows to come into the system and we would see the demand coming back into the market. There are huge projects which are being discussed at this point in time for the water. Primarily, they are more around interlinking of rivers and distribution. We are seeing states like Madhya Pradesh, states like Maharashtra, and states like Rajasthan, which are taking a lead in terms of capturing interlinking of rivers. All put together, the demand between all these three states put together could be in excess of almost 4 to 5 million tons of pipe over the next couple of years’ time.”
– Vipul Mathur, Managing Director and Chief Executive Officer
The anticipated decline in global natural gas prices is expected to significantly boost demand for LNG and gas pipeline network development in India.
“We are very confident that once those prices come into a very, very attractive range, which could just be a matter of time, there will be a huge demand for LNG, for the gas pipelines and network, which will be developed here in India.”
— Vipul Mathur, Managing Director and Chief Executive Officer
Aramco’s commitment to $10 billion in annual investments for the next decade, especially in offshore fields, signals massive future demand for pipes in the Saudi oil and gas sector.
“Aramco is on a major capital expenditure spree. They have already announced a $10 billion investment year-on-year basis for the next 10 years’ time. They are in the process of developing multiple offshore fields and for which they will be requiring a hell of a lot of pipes over a period of time.”
— Vipul Mathur, Managing Director and Chief Executive Officer
Saudi anti-dumping investigation on DI pipe imports creates strategic advantage for Welspun’s upcoming local DI plant, accelerating market capture.
“KSA has started the anti-dumping duty investigation. That is a fair point. Yes. They have already started doing that. You also must keep in mind that Welspun’s DIP facility in KSA will also come up by March of 2026, and these anti-dumping investigations will definitely be of significant help to our local entity, our local production facility, which we are setting up in Saudi Arabia. So, we are sitting on both the sides. We see a strategic advantage having with this investigation because it will help us stabilizing our Saudi entity much expeditiously and faster.”
– Vipul Mathur, Managing Director and Chief Executive Officer
Textiles
Page Industries | Mid Cap | Textiles
Page Industries Limited, brought the renowned innerwear brand ‘Jockey’ to India. The company introduced premium innerwear products for men, women, and children, revolutionizing the industry. With innovative marketing strategies and high-quality products, Page Industries has set a new standard in the innerwear category in India.
Nearly 90% of Page’s revenue comes from products priced below INR1,000, meaning the recent GST rate cut on apparel above INR1,000 will have minimal direct benefit to the company.
“Yes, we have — from a density of the portfolio point of view, there’s a large product offering in the above INR1,000 bracket. However, in terms of contribution to business, the sub INR1,000 is majority, almost 90%. So the impact on the GST cut on the overall business side, like I mentioned earlier, is not significant.”
– Karthik Yathindra, Chief Executive Officer
The company’s competitive advantage in bonded tech products stems from superior design, fit, and a robust global supply chain capable of high-volume, consistent quality production, despite the technology being replicable.
“The technology is definitely very much there. But as Karthik rightly said, we had -- it is not just the bonded tech alone. It’s also the design aspects to it and the fit element to it, which actually has helped us in getting a great acceptability of the product. It is definitely replicable. But I also feel from a supply chain point of view, there are very few factories in India with this kind of capability to give volumes and have consistent qualities. Even we have been importing this from some world-class suppliers. So we have a robust supply chain, and that is something which is going to help us in reaching the market and scaling things up much quickly.”
— V.S. Ganesh, Managing Director
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Quotes in this newsletter were curated by Meher & Vignesh.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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