The Chatter: Inflection Watch
Edition #12
Welcome to the 12th edition of The Chatter — a 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.
Note: As we near the end of the earnings season, the frequency of concalls is naturally tapering off. Accordingly, we’ll be publishing The Chatter once a week — Thursdays — for now. Once the next earnings season picks up, we’ll return to our twice-a-week schedule.
In this edition, we have covered the 17 companies across 7 industries:
Financial Services
Federal Bank
Brookfield India REIT
Pharmaceuticals & Healthcare
Lupin
Cipla
Wockhardt
Biocon
Apollo Hospitals
Chemicals
Gujarat Fluorochemicals
PI Industries
Energy & Utilities
NTPC
Indraprastha Gas Ltd
Industrials & Infrastructure
Adani Ports and SEZ
Bharat Electronics Ltd
Hindustan Aeronautics Ltd
Conglomorate
Reliance Industries Ltd
FMCG / Consumer-Facing
Avanti Feeds
IFB Industries
Financial Services
Federal Bank Limited | Mid Cap | Banking
Federal Bank Limited is a major scheduled commercial bank in India, headquartered in Kerala. It operates across commercial banking, treasury operations, and other financial services with a strong presence in South and West India, along with a significant NRI banking franchise.
Strategic pivot to mid-yielding segments delivering immediate results just two months after strategy announcement, demonstrating exceptional execution capability.
"If you look at the medium yield segment, which I had also focused during my strategic presentations, the growth rates on our medium yield segment is fairly strong at 19%, right, on a Y-o-Y basis. And even on quarter-to-quarter basis, it's a strong number."
– KVS Manian, MD & CEO
Current account acquisition breakthrough addresses historical weakness in deposit franchise quality, with acquisition rates accelerating dramatically.
"Current account acquisition running at a 50% higher rate compared to the previous period. CA growth happened at a very, very strong 27% Q-o-Q and 35% Y-o-Y. The focus on liability growth is yielding results."
– Venkatraman V, CFO
Comprehensive operational transformation through "Operation Udaan" signals long-term efficiency gains and cultural shift toward profitability focus.
"We have launched Operation Udaan previously known as Free the Branch in my strategy document led by a senior internal leader and supported by a big 4 consulting firm. This initiative is set to modernize our branch operations over the next 12 to 18 months, unlocking significant potential for efficiency and customer experience."
– KVS Manian, MD & CEO
Multiple tactical levers deployed to defend NIMs amid rate cut cycle, showing sophisticated asset-liability management approach despite acknowledging margin pressure.
"We have changed T+1, to T+90, multiple factors playing, of course, our objective. And of course, we have cut savings rate, as you know, in April, so there are multiple levers playing. Our objective is to try and minimize the impact, but it is difficult to yet give you the guidance for the year on where the NIM will be."
– KVS Manian, MD & CEO
Brookfield India REIT | REIT | Real Estate
Brookfield India Real Estate Trust REIT Limited, sponsored by Brookfield Asset Management, aims to become the top owner of income producing commercial real estate assets in key Indian markets. It focuses on high quality assets, proactive portfolio management, sound capital structure, and best market practices. Additionally, it benefits from Brookfield's global platforms for resources, relationships, and expertise.
The CEO describes a distinct shift in the leasing market dynamic over the past year. As high-quality office vacancy has fallen, the negotiating leverage has moved from tenants to landlords, creating "an urgency to take up space.”
"Yes, let me take this question, Puneet. And, of course, this is a pertinent question, but I'm happy to say, at least we are not hearing any uncertainty... Tenants have seen that most of the institutional Grade-A properties' occupancies have moved to around 90s, and that availability is getting a bit of a challenge, while space is available, but if you want continuous space in one go... that's becoming a challenge. Landlords are not willing to wait very long for signing of leases, and tenants are aware of this phenomena. So we are not seeing any slowdown. And there's an urgency to take up space.... A year back, it was different. Today, we are already at around 90%, deal momentum is strong. So if you want a space... you got to close it without a lot of delay."
– Alok Aggarwal, CEO
Pharmaceuticals & Healthcare
Lupin Limited | Mid Cap | Pharmaceuticals
Lupin Limited is India's 12th largest generic pharmaceutical company globally and 3rd largest in the US by prescriptions dispensed. The company operates across complex generics, branded drugs, and biosimilars with a strong presence in respiratory, diabetes, and cardiovascular therapies.
The respiratory franchise has become a third of US revenue, representing a fundamental business model transformation that creates sustainable competitive advantages.
"When I look at our MDI and DPI business in the US, right now it's one-third of our US portfolio from a revenue's perspective. So a material contributor to our business in the US as well as globally and also differentiates us as an organization."
– Vinita Gupta, CEO
Direct engagement with the US National Security Council on essential drug manufacturing indicates strategic partner status, not just commercial supplier relationship.
"We are actively exploring that with the National Security Council as part of the White House right now. The government has identified 9 drugs that they believe that are essential and we go into the dialogue back and forth with them to determine how we can build the partnership between India and the US."
– Vinita Gupta, CEO
Core business margins are actually ~30% when adjusting for investments and loss-making adjacencies - significantly higher than the reported 23.2%.
"This quarter, we ended up at 23.2%, but this is after taking into account a couple of things... So if you would adjust for these two, the actual EBITDA margin would have been close to about 26%. And the other thing that you should certainly take into account is the fact that some of our adjacencies that we started in recent times are still making a loss... If you were to take that into account, that would actually be good another 3.7% points."
– Ramesh Swaminathan, CFO
Management provided concrete guidance of $250M+ quarterly US run rate while acknowledging competitive pressures - suggesting conservative guidance relative to internal expectations.
"We expect some products to go down and products like Tolvaptan and continued growth in Spiriva would offset some of the decline in other products and helps us hopefully grow over USD 250 million a quarter."
– Vinita Gupta, CEO
Cipla Limited | Large Cap | Healthcare & Pharmaceuticals
Cipla Limited is one of India's leading pharmaceutical companies with a global presence across respiratory, HIV/AIDS, anti-infectives, and other therapeutic areas. The company operates in India, North America, South Africa, and EMEU markets with a strong focus on complex generics and respiratory products.
Indian pharma market fundamentally decelerating from double-digit to high single-digit growth due to end of patent cliff cycle and lower inflation reducing pricing power.
"The market – overall market growth rate range of 10 to 12 has now moved to 8 to 10. And the reasons for that is that we've gone through pretty superlative new introduction movement in the market because you had everything coming off patents, dapagliflozin, empagliflozin, right? You had sacubitril/valsartan. A lot of products went off patent and therefore, NI growth actually went up... possibly 1%, 1.5% lower future growth due to the fact that the NI season, as you may call it, of expiries is gone. The second aspect is inflation used to be higher. So companies were given pricing adjustments, which was at inflation then. Inflation numbers are now lower, so you lose another 1% to 1.5% there."
– Umang Vohra, Managing Director and Global CEO
Management transparently guides for 150 basis point EBITDA margin compression in FY26 despite revenue growth, primarily due to Revlimid exclusivity loss.
"I think in the current year, just to be in all transparency, we have possibly exceeded what we gave as a guidance range. And if you – Ashish's commentary was about 150 basis points from where we guided is where EBITDA is higher, right? So if you were to just take the 150 basis points out, we're broadly in the same range that we had communicated as a possible guidance range for the last year."
– Umang Vohra, Managing Director and Global CEO
Exceptional regulatory success with VAI classification across all five FDA-audited Indian facilities, significantly de-risking business from regulatory delays.
"The U.S. FDA audited 5 of our manufacturing facilities based in India at Patalganga, Kurkumbh, Goa, Virgonagar and Medispray and all of these inspections have been classified as VAI. This accomplishment reflects our dedication to quality, compliance and operational excellence."
– Umang Vohra, Managing Director and Global CEO
Disciplined capital allocation strategy focusing on high-return opportunities in India, complex generics partnerships, and selective M&A rather than transformational acquisitions.
"So I think, again, we see India as our growth market. And I think it always gives you a good return on capital as you invest capital in India. We've invested on people. We've been investing on capex that I talked about. And we'll also continue to look at small to large M&A opportunities out there, which can come in the form of not just companies, but product portfolio, etcetera, that we may acquire out there. I think the second opportunity that we see is always adding to the portfolio in the U.S. So we keep looking at partnerships where complex – where we can acquire complex generic ANDAs or NDAs, which requires you to pay some sort of milestone upfront, but then the asset is yours and you start to commercialize those assets."
– Ashish Adukia, Global Chief Financial Officer
Wockhardt | Small Cap | Healthcare
Wockhardt Limited is a global pharmaceutical and biotechnology organisation, providing affordable, high-quality medicines for a healthier world. It is India’s leading research-based global healthcare enterprise with relevance in the fields of Pharmaceuticals, Biotechnology and a chain of advanced Super Speciality Hospitals. The company's businesses include manufacture and marketing of pharmaceutical and bio-pharmaceutical formulations, active pharmaceutical ingredients (APIs) and vaccines.
Management is not passively waiting for a licensing partner. They are actively building a parallel, credible plan to self-launch ZAYNICH in the U.S. This creates significant negotiating leverage.
Zaynich can help fight the global problem of antibiotic resistance — when bacteria no longer respond to normal treatment.
"Yes, okay. Fine. As far as India is concerned, we would be doing it ourselves. We have already built up a top leadership team and they have come from the organization who have the experience of launching new drugs in India. Now as far as the US is concerned, we are simultaneously operating on 2 options to optimize our value proposition. One option, we are seriously thinking to create our own organization for which we are in the process of recruiting top team and also have consultant for various aspects because ZAYNICH is only prescribed and used in large tertiary care hospital and it is not a mass market product. So from that perspective, number of resources you require to cover is very limited. That is one option. Second option, we are simultaneously looking to out license the product with some of the big pharma or any suitor. Our objective basically there is if we get a good valuation for what we believe ZAYNICH value is, we may consider that as an option. But if you don't see that kind of valuation coming, we will do it ourselves."
"As far as the licensing is concerned, licensing is moving quite all right. At the same time, our own organization creation is moving space. So we might in next few months have a CEO anywhere for the organization. Because if I have to get more value for my proposition, I have to be very serious of creating my own organization as an alternative. So that it's not that for people come and give me a rate."
– Habil Khorakiwala, Founder Chairman
By openly admitting that the initial launch of EMROK was a learning experience fraught with challenges, management validates their new, more sophisticated go-to-market strategy for Miqnaf and ZAYNICH.
“We introduced EMROK and we didn't have a good experience because we were new to it, so we went through a major learning curve internally. And for Miqnaf and ZAYNICH, we have built the organization and literally our top team we have got it from multinational companies who have the experience of launching new drugs. So the same thing we have done for ZAYNICH. And from day one we would be going very quickly to almost all doctors ZAYNICH by multi-channel approach..."
– Habil Khorakiwala, Founder Chairman
Management on de-risking a major potential bottleneck for the US launch.
“There are 3, 4 aspects about 5222. One is manufacturing. The whole manufacturing is being done in Europe both for API (Active Pharmaceutical Ingredient), as well as formulated product. And we are already completed initial batches required for filing long back. ...their existing people, existing capacity, they all facilities are approved by USFDA. So that manufacturing is totally we have the risk that -- that is one."
– Habil Khorakiwala, Founder Chairman
The exit of the market leader from a significant segment creates a vacuum that Wockhardt is strategically positioned to fill.
"In addition to that, there has been one development in the last year. And Novo Nordisk, which is the largest insulin company in the world has decided to discontinue its disposable insulin pens and cartridges, so that they can have a larger focus on semaglutide and other GLP-1 (Glucagon-like peptide-1) analogs, where their capacity is not able to meet the demand. And as a result of that, that space opens up for existing players in insulin market. The equivalent market in India is about INR450 crores and in emerging market is another $157 million. We are well positioned in this space to capitalize on this opportunity and we are also ramping up our capacities and in fact doubling -- want to double our capacities over the next 24 months..."
– Murtaza Khorakiwala, Managing Director
This reveals a fundamental shift from a traditional pharma sales model to a science-led, education-focused commercial approach.
"...we have populated our medical doctors to a fairly high ratio 1:4, 1:5 to representative. Mainly because you have to communicate the scientific aspect of the molecule and a qualified medical doctor can do a much better job. So we don't expect years to get into a doctor to appreciate, we expect doctor to appreciate this molecule very short time."
"And I must tell you, our scientific team which has discovered the drug... our team over the years we have created a team which interact with them on a regular basis. So they work as a team and that is why the innovation comes. ...we have extended that model to our business also now with the scientific team. So they are totally in sync, because scientists know much more of the molecule because they have lived with the molecule for last 10-15 years."
– Habil Khorakiwala, Founder Chairman
Biocon Limited | Mid Cap | Pharmaceuticals
Biocon Limited is India's largest biotechnology company focused on biosimilars, generics, and research services. The company operates through three main divisions: Biocon Biologics (biosimilars), Biocon (generics), and Syngene (research services).
Insulin market transformation creates unprecedented opportunity as major innovators withdraw from key geographies, positioning Biocon to capture abandoned market segments across 80+ countries.
"We are witnessing a surge in global demand for our insulins. Given our global scale manufacturing capacities, we are well placed to capitalize on this large opportunity... innovators have withdrawn products... in India... and other geographies as well... that certainly creates a large opportunity for Biocon Biologics, because we are already present in many of these countries. We sell in over 80 countries at this point in time, and we see that demand increasing already."
– Kiran Mazumdar Shaw, Executive Chairperson & Shreehas Tambe, CEO Biocon Biologics
Dramatic operational improvement with inventory days reduced from 400+ to under 280, freeing up significant working capital.
"Our working capital position has substantially improved compared to last year... Inventory, in fact, has come down dramatically compared to last year... March'24 DIO, days inventory outstanding, was in excess of 400. And as of March,'25, as I said, it's lower than 280."
– Kedar Upadhye, CFO Biocon Biologics
Strategic pivot away from IPO toward potential merger consideration due to market volatility, signals value-maximizing approach and recognition of current valuation challenges.
"Given the market volatility that we are seeing on the IPO front, I think the Board was of the opinion that we should look at other strategic options, which also includes evaluating a merger. So at this point in time, the Board has constituted a committee. We will evaluate all strategic options and then get back to you in a few months."
– Kiran Mazumdar Shaw, Executive Chairperson
Launch acceleration with 5 new biosimilars over 12-18 months represents "bunching up" of previously delayed products, creating unusually strong growth period through sustained product cadence to 2030.
"We've launched Stelara biosimilar... bevacizumab... Aspart... Aflibercept settlement and the launch in July... Denosumab... these are the 5 products we expect to launch in that 12-to-18-month window... Apart from the bunching up that has happened in the current time period because of whatever reasons, we've said that from '25 to '30, we saw ourselves launching a product a year."
– Shreehas Tambe, CEO Biocon Biologics
GLP-1 emerging market strategy targets "large unaddressed market" while innovators focus on Western markets, positioning for early-mover advantage ahead of 2031+ patent expiries.
"A large part of the volume over the next couple of years is going to be driven by Liraglutide and Semaglutide in emerging markets... innovators have been focusing on supplying these drugs mainly in the advanced markets... there's still a large unaddressed market, especially in the emerging markets."
– Siddharth Mittal, CEO & MD Biocon Limited
Apollo Hospitals | Large Cap | Healthcare
Apollo Hospitals is a leading integrated healthcare services provider in Asia. They offer a wide range of services including hospitals, pharmacies, primary care clinics, telemedicine facilities, e-learning platform, health insurance services, and more.
Management is making a clear strategic choice to build its own quick delivery infrastructure rather than partnering with existing platforms. The rationale is to avoid becoming a commoditized "back office" and to maintain control over the customer experience and regulatory compliance.
"So to answer the first question, as far as the quick commerce alignment is concerned, as of now, we do not have any plans of working with any of these. We have received multiple offers, but we believe that it is not in the best interest of what we are trying to put forward. ...As far as the response to the quick commerce companies are concerned, this particular phenomena started around a year back. Since then, Apollo 24/7 has also launched a 19-minute proposition, which today contributes to almost 30% of our total GMV (Gross Merchandise Value) . ...we have no intentions of tying up with anybody, because that basically relegates us to a back office a function, which one of our group companies, Keimed is already doing."
– M. Balakrishnan, CEO - Apollo Health
Management provides a precise quantification of the financial drag from the disruption in patient flow from Bangladesh.
“If you look at the overall hospitals growth, Bangladesh, the impact was pronounced in Q3 and very pronounced in Q4. Clearly, the Bangladesh business has for the whole year impacted our revenues by at least INR 100 crore and which is 1.5% for the full year. And somewhere, if you look at our EBITDA margin also, had Bangladesh been there with us, we would have been closer to another 50 basis points on the EBITDA as well..."
– K. Akhileswaran, Group CFO
Management proactively addresses a key investor concern associated with large-scale expansion: funding. They explicitly state their belief that the entire multi-year, multi-thousand-crore CAPEX can be funded internally through cash on hand and future cash flows, without needing to raise external debt or equity.
“With this, we are committed to spending over INR 8,000 crore for the additional 4,300 capacity beds over the next 3 to 4 years. We have already spent INR 1,000 crore for land acquisition... Balance project cost to be incurred over the next 3 to 4 years is around INR 6,000 crore. We have significant cash and cash equivalents on hand and generate healthy free cash flows in excess of INR 1,000 crore per year after accounting for routine items. We believe we can fund this portfolio expansion, primarily through existing funds and internal accruals."
– Sunita Reddy, Managing Director
This provides a clear explanation for the underperformance in the diagnostics segment. The slowdown was not due to market weakness but was a self-inflicted, deliberate "reset" of the franchisee model to improve long-term profitability and sustainability.
"So I think I will take your first part, yes, in diagnostics, there has been a slowdown. I think one of the things is we had to reset the model of our franchisee business. And I think for that, we had to do some changes with respect to the pricing and the commission modeling. So obviously, we will do that change. And hence, there was a bit of a slowdown . but we have successfully managed to build a model which is more sustainable and profitable going ahead."
– Sriram Iyer, CEO - Apollo Health & Lifestyle
Chemicals
Gujarat Fluorochemicals Limited | Mid Cap | Chemicals
Gujarat Fluorochemicals Limited is a leading manufacturer of fluorochemicals, fluoropolymers, and refrigerants. The company has been aggressively expanding into battery materials for electric vehicles and energy storage systems, positioning itself as a non-Chinese global supplier in the lithium battery value chain.
Massive ₹1,600 crore capex commitment for FY'26 signals business model transformation, with ₹1,200 crores earmarked for battery materials expansion despite lacking firm long-term contracts.
"We have announced capex of INR1,600 crores for FY '26 with INR1,200 crores earmarked for GFCL EV, largely towards increasing the current capacities with increased customer approvals and audits in place and INR400 crores for GFL, largely earmarked for Fluoropolymers and refrigerant business."
– Dr. Bir Kapoor, Deputy Managing Director & CEO
Battery materials business approaching commercial inflection with LFP plant commissioning next month and revenue expected in H2 FY'26 after years of investment.
"Our LFP plant have achieved mechanical completion with commissioning and trial production set to begin next month. We expect the revenue from EV business to trickle in towards the second half of this financial year. Our electrolyte and binder plants are also at advanced stage of customer validation with multiple successful global audits already completed."
– Dr. Bir Kapoor, Deputy Managing Director & CEO
Legacy Fluoropolymer players exiting market creates organic growth opportunities, with customer pipeline inventory expected to clear by Q1 FY'26.
"So some of it has trickled in, but more – we see – expect to see a lot more because for one of the legacy players stopped their production in a few months back in December only, and they were pipeline. So we have started seeing a traction now. And there's another legacy player who has relocated and stopped the production in Europe."
– Dr. Bir Kapoor, Deputy Managing Director & CEO
Management provides 25% growth guidance for Fluoropolymers business, indicating strong demand visibility.
"Yes, we are. I mean Fluoropolymer, what we are seeing the traction right now, we expect to see almost 25% growth in Fluoropolymers from where we are today. So we will see a gradual growth in Fluoropolymer as we go along."
– Dr. Bir Kapoor, Deputy Managing Director & CEO
Working capital build-up based on "long-term projected demands" rather than firm purchase orders reveals confidence-versus-contracts gap in EV business strategy.
"In case of Fluoropolymers, we, of course, have our order book, and that's the reason we have increased our supplies and trying to fill up the pipelines. Similarly, in EV battery material as well, we have long-term projected demands given to us by our customers. And in that anticipation, we are building up our pipeline."
– Dr. Bir Kapoor, Deputy Managing Director & CEO
PI Industries Limited | Large Cap | Chemicals
PI Industries Limited is a leading agricultural sciences company specializing in custom synthesis and manufacturing (CSM) of agrochemicals, domestic branded formulations, and biologicals. The company is transforming into a diversified life sciences platform with expansion into pharmaceuticals, electronic chemicals, and proprietary R&D.
Strategic transformation explicitly confirmed with 50% of new enquiries now coming from non-agricultural molecules, signaling successful diversification beyond traditional agchem CSM roots.
"We are targeting growth opportunity in agrochemical CSM, with an expanded addressable market size of $15 billion to $20 billion in innovative products. In parallel, we are actively positioning ourselves to capture value across the multi-billion-dollar markets of pharmaceuticals, CRDMO, electronic chemicals and biologicals. This is well in line with our transformation from an agricultural sciences company to a life sciences company."
– Mayank Singhal, Executive Vice Chairman and Managing Director
"Over the past 3 years alone we have commercialised over 15 molecules. Our pipeline remains robust, with approximately 50% of new enquiries being non-agricultural chemical molecules."
– Mayank Singhal, Executive Vice Chairman and Managing Director
Management transparently acknowledges pricing pressure in mature CSM products due to pass-through business model, explaining why new product development is critical for sustained growth.
"Yes, there is obviously some price softening and that is on the basis of input cost softening. So over last 1 to 1.5 year, post COVID, input prices have come down and given our business model of CSM Exports, where these input cost improvements are also passed through and therefore the pricing of some of these existing products have also come down."
– Rajnish Sarna, Joint Managing Director
Conservative mid-single digit growth guidance despite 31% growth in new products suggests either significant base business headwinds or management setting low expectations for potential positive surprises.
"We are looking for mid single digit level growth this year given the industry headwinds and the uncertainties of the climatic situation. As we said, we would definitely see some positive trends coming in H2, but that's where we stand for now."
– Mayank Singhal, Executive Vice Chairman and Managing Director
Energy & Utilities
NTPC Limited | Large Cap | Power Generation
NTPC Limited is India's largest thermal power generation company and a major player in renewable energy. It operates coal-fired power plants, renewable energy projects, and is expanding into nuclear power, pumped storage, and green hydrogen initiatives.
Nuclear power emerges as major strategic pivot with 30 GW target, representing fundamental transformation from coal-focused utility to diversified clean energy giant.
"In alignment with India's net-zero commitment by 2070 and the national target of 100 GW nuclear capacity by 2047, NTPC has set an ambitious goal to develop 30 GW of nuclear power. We have incorporated NTPC Parmanu Urja Nigam Limited in January 2025 as our wholly owned subsidiary to explore advanced nuclear technologies, including Pressurised Water Reactors, Small Modular Reactors and Fast Breeder Reactors."
– Jaikumar Srinivasan, Director (Finance)
Captive coal production acceleration with 29% growth to 45.82 MMT provides fuel security hedge and margin expansion opportunity through backward integration.
"I am further pleased to inform that our achievement in captive coal production has been steep with a 29% year on year growth from 35.64 MMT in FY24 to 45.82 MMT in FY25. We have invested ₹12,380 crore in developing our coal mines on standalone basis, contributing to Regulated Equity growth and resulting in additional revenue stream."
– Jaikumar Srinivasan, Director (Finance)
Pumped storage pipeline of 20 GW with 40+ year asset life positions NTPC as critical infrastructure for India's renewable integration and grid stability.
"NTPC Group is working on pipeline of pumped storage projects to the tune of 20 GW in NTPC and its hydro subsidiaries. PSP assets offer over 40 years of operational life and attractive regulated returns. As critical infrastructure for India's renewable transition, they add long-term stability to our energy portfolio."
– Jaikumar Srinivasan, Director (Finance)
Massive CAPEX surge from ₹44,636 crore to projected ₹265,455 crore over 3 years demonstrates unprecedented capital deployment scale across multiple energy verticals.
"On a stand-alone basis, we expect a capital expenditure of ₹26,000 crore in the current year. ₹29,209 crore during the next year and ₹32,452 crore in the year next. And if you look at the group capex, this current year, it would be ₹55,920 crore. Next year, it would be ₹97,363 crore. And the year next, it will further rise to ₹112,172 crore."
– Management
Indraprastha Gas Limited | Small Cap | Gas Distribution
Indraprastha Gas Limited (IGL) is India's largest city gas distribution company, primarily serving Delhi and NCR. The company distributes natural gas to automotive (CNG), domestic (PNG), and industrial customers through an extensive pipeline network and CNG stations.
Strategic gas sourcing transformation achieves optimal 50-50 split between government-controlled and market-linked pricing, with 65% of RLNG being Henry Hub linked for lower volatility.
"3.51 is APM allocation as of now and 1.38 is new well gas so total you can say that 58% or so in the CNG and transport and domestic segment is through this segment and 42% is through RLNG. And if you look at the overall company-wise, you can say that around 50-50 is there. 51 is through APM, new well gas, and 49 is through other sources."
– K.K. Chatiwal, Managing Director
Geographic diversification accelerating with newer areas growing at 32% while maintaining 5% growth in mature Delhi market, reshaping IGL's growth profile.
"Delhi GA after excluding DTC has grown by 5%. NCR comprising of Gautam Budh Nagar, Gurugram GA has shown a 13% and other GAs have grown by 32%. We are quite hopeful that with the gas sourcing arrangement in place and the volume growth seen in new GAs, we can plan to achieve sales volume increase of 10% in the year 2025-'26."
– K.K. Chatiwal, Managing Director
Proactive regulatory positioning frames CNG as "bridge fuel" aligned with EVs rather than competing fossil fuel, leveraging Supreme Court mandate for potential policy protection.
"So we have given our submission to the Delhi government that gas was brought in Delhi on the directions of Honorable Supreme Court and the Centre was asked that CNG to replace the polluting fuels. So this is an entirely different category and it should be categorized as a bridge fuel, a transition fuel and either it should be clubbed with EV or it should be a separate segment and not to be clubbed with the other petrol and diesel fuels."
– K.K. Chatiwal, Managing Director
Communication strategy vulnerability acknowledged by management following pointed investor critique about chronic silence during negative market cycles.
"Periodically, we have seen that IGL has been affected by a negative perception that arises in the minds of some people in the investment community... In each case, sir, the response of IGL has been one of silence. I think, it is the duty of the company's management to set the record straight when such misperceptions are doing the rounds."
– EA Sundaram, Long-term Investor
"Yes, we have noted that is a very good suggestion and we will try to address that by putting out more information on our website... but our focus has been on mitigating the issues because many a times it is the government that we are dealing with. So we do not want to spell out something in the public domain."
– K.K. Chatiwal, Managing Director
Industrials & Infrastructure
Adani Ports and Special Economic Zone Limited | Large Cap | Ports & Logistics
Adani Ports and Special Economic Zone Ltd (APSEZ) is India's largest commercial ports operator with a market share of 27% in cargo handling. The company operates a network of 15 ports and terminals along India's coastline and has expanded internationally with operations in Australia, Sri Lanka, Tanzania and Israel.
Management is fundamentally repositioning APSEZ from a ports operator to an "integrated transport utility company" with multiple revenue streams including logistics, marine services, and international operations.
"We are transforming our company into a integrated transport utility company, and we are centering up the pillars which are in the whole ecosystem. Logistics, we have rail, we have terminals, we have ICDs, we have warehouses, We have agri-logistics, and now, you know, we started the trucking. The reason we wanted to start the trucking is any container which comes to ICD is delivered to the customer without our connect. And the trucking is something which is connecting ICD with the customer, and the same truck can bring back many other things from the same customer to our own ICD."
– Ashwani Gupta, CEO
Management has downgraded cargo volume from a lead indicator to a footnote, signaling confidence in generating revenue and EBITDA growth that outpaces volume growth through integrated services.
"And in the guidance, we have actually, if you can notice, taken down the volume as a footnote. Earlier, it used to be a lead indicator. For us, right now, we are actually treating this as an important component. Obviously, volume is going to be the driver of our growth, but not the sole driver of the growth. That is a central message that we want to give."
– D. Muthukumaran, CFO
The company is moving from passive cargo custody to active cargo control through integrated logistics services, enabling cross-selling and reducing customer switching costs.
"You're seeing us move from custodians to exhibiting control over cargo. At some level, the tech is also starting to kick in... And then, you know, what we would like to also underline is the fact that the phrase that the bridge used about, I would like to repeat for impact, you know, control over cargo than actually sort of custody over the cargo."
– Divij Taneja, CEO Adani Logistics
Management outlined four specific requirements for international acquisitions: geographic corridor focus (Southeast Asia to Africa), ecosystem approach, majority control, and current profitability with growth potential.
"The condition is, number one, it should be in line with our business strategy, which is from Southeast Asia to India to Middle East to Africa. Number two, it should be ecosystem and not only something which is only a cost center. Number three, we are given the authority to operate it, which means we must be majority. Number four, at the end, it should have the today's business, which is profitable and has a potential to grow in the future."
– Ashwani Gupta, CEO
Company targeting leverage between 2-2.5x while funding growth, with visibility on major debt repayment in FY28 that could unlock higher shareholder returns.
"We think we'll be somewhere between two and two point five with this... far down the line, three years down the line, FY28, July'27, we have the first big chunk and the only big chunk of debt repayment coming."
– D. Muthukumaran, CFO
Hindustan Aeronautics Limited | Large Cap | Defense & Aerospace
Hindustan Aeronautics Limited (HAL) is India's leading aerospace and defense company, manufacturing aircraft, helicopters, and aero-engines. Recently granted Maharatna status, HAL is the backbone of India's defense manufacturing with a diversified portfolio spanning fighters, trainers, helicopters, and engines.
LCA Mark 1A engine supply bottleneck definitively resolved after years of delays, with GE delivering first engine in April and committing to 12 engines by December 2025.
"GE has assured us that they will be delivering 12 engines in this calendar year. So, with this, I feel the flow will continue at roughly maybe 2 engines per month. That's what we expect. Though the firm commitment is 12 engines this year, I hope that with the supply chain issues behind us, the subsequent deliveries will continue. So, we will be able to catch up and ensure that the deliveries to the Indian Air Force will happen as per schedule."
– D.K. Sunil, Chairman and Managing Director
Strategic shift to private sector partnership model could scale LCA production to 30 aircraft annually, fundamentally changing HAL's manufacturing approach.
"Additionally, we also have built a model of getting the fuselage components from private sector partners. So, for example, the wings will come from L&T, the center fuselage will come from VEM, the rear fuselage will come from Alpha Tocol, the vertical fin and air intake, and the rudder will come from Tata TASL. So, the expectation is that if we add about six from the private sector, we will have a capacity of almost 30 aircraft per annum."
– D.K. Sunil, Chairman and Managing Director
Massive order book of ₹1,89,300 crores provides 6+ years revenue visibility, with additional ₹1 lakh crore pipeline expected within 1-2 years.
"The order book of the company improved to ₹1,89,300 crores against the previous year order book position of ₹94,127 crores... Further, the order pipeline looks even more promising with the anticipated contract of 97 LCA Mark 1A, 143 ALH for IAF, Army and 10 numbers of DO-228, Dornier for the Indian Navy and Coast Guard... The aggregate value of the order pipeline is estimated at around ₹1 lakh crores and are expected to materialize within the next one to two years."
– D.K. Sunil, Chairman and Managing Director
Unprecedented ₹15,000 crore capex plan over 5 years targets next-generation platforms including LCA Mark-2, GE-414 engines, and IMRH development.
"In line with our strategic goals, we have formulated a comprehensive CAPEX plan for the next five years, with an estimated outlay of ₹14,000 to ₹15,000 crore. This investment will focus on expanding manufacturing capabilities and setting up ROH facilities for various platforms. Additionally, we plan to develop manufacturing infrastructure for LCA Mark-2, GE-414 engines and IMRH engines along with facilities to support design and development activities for the IMRH, AMCA and other related projects."
– D.K. Sunil, Chairman and Managing Director
Bharat Electronics Limited | Large Cap | Defense Electronics
Bharat Electronics Limited (BEL) is India's premier defense electronics company, manufacturing advanced electronic systems for defense applications including radars, electronic warfare systems, communication equipment, and missile systems for the Indian Armed Forces.
Combat validation creates strategic inflection point as real battlefield performance drives export momentum beyond current $120M target, with management expecting 20%+ growth after lead conversion cycles.
"A lot more leads are now fructifying or may fructify, based on the last geopolitical situation, where our equipment solutions performed exceedingly well. But that takes its own time. That takes minimum, I can say, one year for us to convert those leads or those advantageous things to orders... maybe after 1 or 2 years, based on the – what sort of progress we may get on these new leads, we may expect more than 20% growth."
– Manoj Jain, Chairman and Managing Director
INR30,000 crore QRSAM order timeline accelerated with dedicated team formed, potentially arriving Q4 FY26 instead of previous guidance, representing BEL's largest single order ever.
"QRSAM order related, all the paper activities and other things are going on very, very fast. We have also made one team dedicated for only finalizing this contract with the user. We are hoping it may come by last quarter of this year itself... roughly around INR30,000 crores, we are expecting."
– Manoj Jain, Chairman and Managing Director
Structural margin expansion beyond 27% guidance driven by indigenization achieving 90% value addition in Gen3 platforms like Akashteer, with management expressing high confidence in further improvement.
"These margins are going to increase further, I can assure you, because we are doing real rigorous indigenization of the various system, subsystem and even at component level... like you have seen latest Akashteer program. More than 90% indigenous content was there. And most of the subsystems of this were made in-house. So this in-house development meeting the exact requirement and indigenization drive, these two will definitely take margins higher and higher."
– Manoj Jain, Chairman and Managing Director
Project Kusha positioning as Development cum Production Partner provides competitive moats for potential INR20,000-40,000 crore indigenous S-400 program, with management confident of system integrator selection.
"BEL is a development partner for them. The DcPP, we call it. So we are the development partner with DRDO... We are hopeful that we will be system integrator also. So, in case we are system integrator, then as you have indicated, around INR40,000 crores order will come to BEL... if they decide to have two system integrators, then also definitely then, 100%, we will be one of them. We are confident of that."
– Manoj Jain, Chairman and Managing Director
Conglomerate
Reliance Industries Limited | Large Cap | Conglomerate
Reliance Industries Limited is an Indian multinational conglomerate company headquartered in Mumbai. Its businesses include energy, petrochemicals, natural gas, retail, telecommunications, mass media, and textiles.
Jio has successfully transitioned a significant portion of its user base to 5G, with 45% of its total wireless traffic now on the new network. The company has observed that 5G users consume significantly more data, indicating a "sticky" usage pattern. However, this increased consumption is currently being offered for free.
"We have really not started monetizing 5G. So effectively, 45% of data that people today are consuming is being offered to them free of cost...they are getting into the habit of consuming content, consuming data, consuming 5G services, and we believe that is a very big opportunity for us in the same way that LTE was a big opportunity for us in 2016."
— Anshuman Thakur, Jio Platforms Segment
Reliance's Oil-to-Chemicals (O2C) and energy segments have demonstrated robust performance, largely driven by strong domestic demand for gas, oil, gasoline, ATF, polymers, and polyester. Management highlights this domestic focus as a key advantage, especially when global markets are experiencing margin pressures.
"I think the other point I would definitely flag is when you look at the O2C or energy performance in the context of how other global refineries have performed or standalone petrochemical manufacturers or even actually integrated players. If you see the numbers, it is absolutely standout in terms of our performance." — V. Srikanth, CFO
Reliance's new energy division is making significant strides, having commissioned its first gigawatt-scale solar module manufacturing facility. The company is focusing on end-to-end integration, from polysilicon to solar panels, and has already developed one of the largest panels available at 720 watt-peak.
"...we have commissioned the first gigawatt scale solar module started. So we started, it is BIS certified already and I would say, the largest from a size point of view at 720 watt peak. It is possibly the largest panel that we have."
— V. Srikanth, New Energy Segment
After a period of significant streamlining and rationalization, Reliance Retail is showing signs of a strong comeback. The company has indicated that the restructuring phase is largely complete, with a net addition of 500 stores and double-digit growth in key operating metrics like transactions and registered customers.
"We are also pretty much done with the streamlining that we had started during the year. So our net addition is about 500 stores and we are pretty much more or less done with the streamlining now."
— Dinesh Taluja, Reliance Retail
Consumer
Avanti Feeds | Small Cap | FMCG
Avanti Feeds is a prominent manufacturer of prawn and fish feeds as well as a shrimp processor and exporter based in India.
Management has proactively cut feed prices by ₹3/kg to support farmers spooked by US tariffs. This reveals a strategic choice to prioritize the long-term health of their customer base (the shrimp farmers) over short-term profit maximization.
“Immediately after the announcement of reciprocal tariff by U.S., there was a lot of concern by the farmers, the government, the state government, and all they came and we had a series of discussions with them. And to accommodate and to see that the aquaculture continues, the sustainability is maintained, we have to take a price cut by decreasing the price by 3 rupees per kg. So that will have an impact... full impact also will be there in this quarter.
And hopefully the raw material prices stabilize and they should be able to maintain same level of profitability in Q1 of FY'25-26. That should be because normally Q1 and Q2 are the good two quarters which we make.”
– C. Ramachandra Rao, Joint Managing Director
Management provides a sophisticated analysis of the relative competitive landscape after tariffs. This goes beyond a simple "tariffs are bad" narrative.
“The higher end [tariffs] is 26 percent. So, then the tariff would be as follows. Ecuador would be 10%, India would be 26%... Indonesia would be, I think, about 32% or 35 something, and Vietnam would be over 40%. So, I think, generally, we'll be number two. We will lose competitiveness over Ecuador, but we'll gain competitiveness against shrimp farming countries in Asia. So, I think overall, it'd be, like, average, not too bad, not too good.
That being said, our competitive advantage against Ecuador will be reduced. But however, the only silver line is that Ecuador doesn't produce a lot of the products that we do. We do a lot of value addition, not high value, but like medium value products like a cooked or a raw or a shrimp ring, tail-on and tail off products, pin-deveined. So, these things that Ecuador can't do as much as us because just because of the population that we have in the country and the way that our companies are structured, etc. So that way, you know, I would say on a whole tariff bucket where Ecuador has an advantage, but we all have our own niches in the game."
– Alluri Nikhilesh, Executive Director
Management directly confronts the criticism of its large cash pile (over ₹1,900 crores in cash & investments noted by the analyst). Instead of viewing it as idle, they frame it as a crucial strategic asset for working capital management.
“I mean, I would like to look at this differently, if you see the balance sheet, we don't have any borrowings. Totally no borrowings, zero borrowings... particularly in the seasonal industry, we need money when the season starts. For example, in soybean meal, the season starts in October. So, we buy soybean meal in large quantities and keep it to maintain the price...
See earlier, we were thinking that this surplus should be used only for capital but what we see practically is that when we use it for working capital, we are able to make about 15% percent to 20% saving on the interest alone i.e., financial cost. You don't see it in our payroll (P&L) account... We always believe that, the management of the cash that we have should be safe and it should be giving good value to the investors. If we put some industry, okay, we have money, we start some industry and if we don't get returns on that, what will happen?"
– C. Ramachandra Rao, Joint Managing Director
De-risking from US Market is not just talk, it's quantifiable
"Yeah, I can say that, yes, the U.S. market particularly has been extremely volatile over the last one year. We've had different types of duties, a completely new duty, like CVD (Countervailing Duty) came in, and then we have reciprocal tariff, which was 26% and changed to 10, and we still have no clarity... So, it has been volatile, so we are actively looking at other markets.
Definitely, if you look at our share, like PPT (PowerPoint presentation) sent by you for the financial year FY'25, the US market share has come down to about 70% from 83% the year before. And the last were also so if you see that PPT, it says about seventy percent, but that also includes Canada. But our US Market share has come down to the lowest that we've had at least in the last four quarters, if I'm not wrong. So, we are actively looking into other markets."
– Alluri Nikhilesh, Executive Director
While the company's initial pet care launch was in cat food, management makes it clear that the most significant move is the upcoming launch of dog food in August 2025.
"The company is also planning to launch a dog food product in August 2025. It is pertinent to mention that dog food constitutes a major portion of pet food sales, which is about 80% and cat food is 20%. "
– C. Ramachandra Rao, Joint Managing Director
"So, it would take some time for the market to catch up to the brand, but this year we're expecting INR 10 crores revenue. That's what our target is. "
– A. Venkata Sanjeev, Executive Director
IFB Industries | Small Cap | Consumer Durables
The company specializes in manufacturing a wide range of parts and accessories for motor vehicles, home appliances, and engineering components, including fine blanked components, tools, machine tools, and motors for white goods and automotive applications.
Chairman reiterates the target of double-digit EBITA margin, outlining a significant cost-saving potential exceeding Rs.350 crore across material, fixed, and logistics, alongside pricing discipline.
The engagement with Alvarez & Marsal for material cost reduction targets at least Rs.200 crore, with Rs.80 crore expected to reflect in P&L; by FY26, potentially exceeding this target.
“As I had said, as I had said quite some time back and it's, and we are not at all happy that we are not able to achieve the double-digit margin as yet. But if you, but the cost reduction programs we've taken across various heads, dealing with material cost, fixed cost, logistics and warehouse, and other costs, [our total saving from all of these should exceed, our belief is Rs. 350 crore. now, significant portion, a lot of it should come in this year. but a lot of it will also come in in the first six months of next year.] All of this will help us to move towards double digit, which includes fixing pricing in the market, which means reducing discounting and getting better outcome of our schemes.
This Rs. 200 crore actually should come from COGS or material cost. This is being worked on with Alvarez & Marsal. One of the shareholders, one of the investors itself has told us why aren't you giving it to an outsider, why try and do it internally. The internal project took… we have, we have actually wasted time by not going to an outsider faster. Now that we've gone to Alvarez & Marsal, the things are being clearly laid out by them and our team which is working as a joint team. [minimum Rs. 200 crores we expect to get. I think we'll get much, much more. out of the Rs. 200 crores, around Rs. 80 crores should come in by 31st of March [FY26]. this is on material cost.]”
– Bikram Nag, Chairman
Capex outlined: Rs.100-130cr for appliances (washers). Engineering division capex increasing due to localization of chain manufacturing (Rs.40-50cr, China+1 move) and a new electronics JV with Titan.
“Yes, but the main capex will be on areas such as washing machines for 12 and 13 kilo washers. Maybe we go for 14 kilo also — we are not sure as yet. But in the appliance division, capex is between Rs. 100 to Rs. 130 crores to be spread out. And in the engineering division, capex is also quite high. Normal capex would be around Rs. 45 crore.
And then for new projects, for example, chain. Chain as a project for motorcycles, which we used to import from China. Now with these China BIS issues, etc., chain as a project will need to be brought into India. (...) That will entail about Rs. 40 crore, Rs. 40 to Rs. 50 crore at the most. And then we have the electronics manufacturing, which is with Titan. We will do some things with Titan. (...) That will entail some capex. So overall capex for engineering as a result of this chain, etc., has also gone up.”
– Bikram Nag, Chairman
Management highlighted surprisingly strong demand for refrigerators, expecting sales to stabilize at 55,000-60,000 units per month shortly, indicating a significant ramp-up.
“If you see from the volume perspective, what has surprised us is the traction we are getting now in refrigerators, which is more than AC in some ways. We expect very, very shortly for refrigerators to stabilize at 55,000–60,000 units a month. So, in refrigerators, we really see very good potential. [...] We are now only playing up to 285 liters, and soon we'll launch the 326-liter or something. So at the higher end, we are still not there.”
– Bikram Nag, Chairman
Beyond the A&M; project for material cost, IFB is focusing on increasing sales volumes, raising Market Operating Price (MOP), and reducing scheme payouts to improve gross margins.
“His question is: what are you doing to increase GP? To increase gross margin, we are working on three fronts.
One is sales volume increase, which is already being driven by our sales team. Second, we are trying to increase the MOP in the market. There are areas where there is an opportunity to increase the market price — that is, the selling price. We are also working on reducing scheme payout. And third, we are working towards reducing bill of material cost.”
– Kartik Muchandani, Head of Finance -Home Appliance
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Quotes in this newsletter were curated by Apoorv & Kashish.
Disclaimer: We’ve used AI tools in filtering and cleaning up these quotes so there maybe some mistakes. Now, if you are thinking why we are using AI, please remember that we are just a small team of 5 people running everything you see on Zerodha Markets 😬 So, all the good stuff is human and mistakes are AI.
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