Welcome to the 11th 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 20 companies across 11 industries :
Software Services / IT
- Tata Consultancy Services (TCS)
- Wipro
- Infosys
- HCL Technologies
Auto & Auto Ancillary
- Tata Motors
- Maruti Suzuki
Financial Services
- State Bank of India (SBI)
- ICICI Bank
- HDFC Bank
- Axis Bank
- Bajaj Finserv
- Nuvama Wealth
Metals
- JSW Steel
FMCG
- Hindustan Unilever (HUL)
Energy
- Power Grid Corporation
Telecom
- Bharti Airtel
Healthcare
- Divi’s Laboratories
Engineering & Capital Goods
- Ion Exchange
Building Materials
- Akzo Nobel India
Tourism & Hospitality
- Yatra Online
Software Services / IT
Tata Consultancy Services Limited | Large Cap | Software Services
Tata Consultancy Services Limited is India’s largest IT services company and a leading global technology consulting and digital solutions provider. TCS serves clients across industries including BFSI, retail, manufacturing, and telecom.
$30 billion revenue milestone achieved while maintaining industry-leading 24.3% operating margins and 19% net margins, demonstrating TCS’s ability to scale profitably with exceptional return ratios and strong balance sheet.
“I’m pleased to announce that we are concluding FY '25 by surpassing the $30 billion revenue milestone. We have achieved this while maintaining industry-leading margins, exceptional return ratios and a strong balance sheet. Our financial year 2025 revenue grew by 4.2% in constant currency. Our operating margin for the year came in at 24.3%. Our net margin was at 19%.”
– K Krithivasan, CEO
Record Q4 Total Contract Value (TCV) of $12.2 billion with North America hitting all-time high of $6.8 billion and BFSI contributing $4 billion, demonstrating market share gains despite macro headwinds and notably achieved without mega deals.
“Our record Q4 TCV of $12.2 billion demonstrates our ability to gain market share. North America TCV reached an all-time high of $6.8 billion. BFSI TCV was $4 billion, and Consumer Business Group contributed $1.7 billion. This impressive performance stands out in the absence of mega deals.”
– K Krithivasan, CEO
Economic uncertainty escalated dramatically since January with management highlighting unprecedented shift in global economic and geopolitical landscape, causing delays in client decision-making and heightened scrutiny of discretionary spending.
“We have all been witnessing an increased level of uncertainty in the global economic and geopolitical landscape in the last few weeks, making a shift from our commentary in January… We have seen instances of delays in decision-making and discretionary spending has come under heightened scrutiny and pressure recently.”
– K Krithivasan, CEO
AI integration becomes standard client expectation across all new programs, fundamentally shifting from experimental to embedded service delivery with productivity gains now expected rather than optional add-ons.
“See what’s happening is, any program that we sign today, there is a request and expectation from the customer that there would be a leverage of AI. It need not necessarily mean that the whole program will be done in AI. There’ll be an expectation that for some aspects of Software Engineering, we’ll leverage AI, and through AI, it will be expected to deliver a certain amount of productivity.”
– K Krithivasan, CEO
Pipeline strength remains robust despite delays providing confidence for strong win rates and TCV performance once macroeconomic decision-making normalizes, suggesting underlying demand integrity intact.
“So, what we can talk about is our pipeline. Our pipeline continues to be strong at a very high level and so it gives us the confidence. As decisions are being made, we will have a strong win rate, and we’ll be able to report a good TCV.”
– K Krithivasan, CEO
Wipro Limited | Large Cap | Software Services
Wipro Limited is engaged in IT services, consulting and business process services. It also has a significant presence in the consumer care and lighting business through its subsidiary operations.
IT Services business requires strategic repositioning with focused market approach as client discretionary spending collapses due to geopolitical uncertainty and tariff concerns:
“One example, I can tell you is we were doing a large SAP program, which was very critical for the client, and this was in the consumer sector. And when the client heard about the tariff situation, they were bang in the middle of that, and they put the whole program on pause, not because they don’t want to do the program, but they wanted to understand, get the certainties of the tariff situation. This has definitely impacted our revenue growth momentum across sectors and markets.”
– Srinivas Pallia, CEO
Regional performance reveals underlying market dynamics with Europe showing consistent decline while Americas demonstrates resilience:
“Well, Europe, I called out, has been a challenge for us. It has de-grown 7% year-on-year and 2.5% sequentially in quarter four. Our focus has been to stabilize and bring this region back to growth trajectory. Americas, which contributes close to 63% of our revenue, that piece of business has grown 1.2% in FY25.”
– Srinivas Pallia, CEO
Competitive landscape positioning shows increasing pressure as deal pipeline shifts toward cost takeout and vendor consolidation opportunities with inherent pricing challenges:
“The reality is there will be pressure on margins as we start to Q1, there are two headwinds. One, of course of a weak revenue environment. Two, that of a lot of deals that we’ve spoken about which are a part of our pipeline are actually cost takeout and vendor consolidation deals which inherently come with pricing pressure and therefore are also very competitively fought. So, we will prioritize growth, we will prioritize the fact that we would like to invest in our clients.”
– Aparna Iyer, CFO
Technology transformation approach demonstrates balanced strategy as AI productivity gains are reinvested into expanded client scope rather than flowing through as margin improvements:
“I am not seeing any significant impact either on revenues or margins. What we are doing is whatever benefits of GenAI that are applicable to our customers, in many of the cases, some of the times, the customers budgets are getting freed up. So we are actually using GenAI and also getting some incremental work done for the same customer.”
– Srinivas Pallia, CEO
Infosys Limited | Large Cap | Software Services
Infosys Limited is India’s second-largest IT services company, providing software development, maintenance, and consulting services to global enterprises. The company offers digital transformation, AI, cloud, and automation solutions across multiple industry verticals.
Exceptional operational discipline delivered 50 basis points margin expansion despite salary increases, higher variable pay, large deal ramp-ups and acquisition costs - all through Project Maximus initiatives.
“The increase in margins by 50 basis points over FY’24 was achieved, despite multiple headwinds from salary increases, higher variable pay, impact from large deal ramp-ups and acquisition-related amortization. These headwinds were more than offset through combined benefits from various tracks under Project Maximus, especially value-based selling, lean and automation, improvement in critical portfolio, improvement in utilization.”
– Jayesh Sanghrajka, CFO
Strategic geographic diversification paying dividends with Europe growing 15% (3x company average) to reach 30% of revenues, reducing US market dependence and creating growth alternatives.
“Europe grew 3x of the company rate at 15% in constant currency terms driven by our focused approach of client mining, ramp-up of large deals and acquisitions. Europe now accounts for 30% of our revenues. We have made several investments and scaled up in different geographies in Europe.”
– Jayesh Sanghrajka, CFO
Sophisticated scenario planning behind 0-3% FY26 guidance reveals management’s deep analysis of macro risks, with bottom end assuming significant deterioration and top end assuming stability.
“We run multiple models which run up to the guidance at various ends of the guidance, bottom end, middle end or the top end. The fact that we gave a 3-point guidance reflects there is uncertainty in the environment. At the bottom end of the guidance, we have baked in some deterioration in the environment, some heightened uncertainty. At the top end of the guidance, we have assumed steady to marginally improving environment.”
– Jayesh Sanghrajka, CFO
Proactive strategic repositioning for economic uncertainty, pivoting sales focus toward cost takeout and consolidation while maintaining growth capabilities across AI, cloud, and digital services.
“Learning from the past, we typically see that this sort of an environment will provide more cost takeout opportunities, consolidation, automation, lean. We have also pivoted our sales activities into focusing and building more proactive pitches to clients on that area… our portfolio has got that ability, which is also on AI, cloud and also on cost takeout. So now we are emphasizing much more on the cost takeout.”
– Salil Parekh, CEO and MD
Strong deal momentum with $11.6bn large deals featuring 56% net new wins - one of highest levels in several years - providing revenue visibility despite macro headwinds.
“We had $11.6 bn in large deals with 56% of net new wins. Now, what that translates to, as Jayesh was sharing in another point, one of the highest we have seen in several years and higher than the previous year. We have a pipeline of mega deals today.”
– Salil Parekh, CEO and MD
HCL Technologies Ltd | Large Cap | Software Services
HCL Technologies Limited is a leading global technology company that helps enterprises reimagine their businesses for the digital age. The company operates across three business units: IT and Business Services (ITBS), Engineering and R&D Services (ERS), and HCL Software.
AI-driven efficiency paradox creates competitive moat as HCLTech wins higher wallet share while baking in productivity gains, defying industry pricing pressures.
“A very important feature of our wins is that we have now had several instances where we’re winning higher wallet share with existing customers, even as we bake in Generative AI-induced productivity gains in our bids… The wallet share gained, in fact, most of the renewals that we have done. This quarter was also a very strong renewal quarter. There was incremental business from almost all the renewals that we signed. It was more than the deflationary impact.”
– C. Vijayakumar, CEO & Managing Director
Geopolitical uncertainty accelerates deal-making instead of delaying it, with 50% of record $3B Q4 bookings happening in March alone.
“It may be contrary to what everybody expects. 50% of our $3 billion booking happened in March. So, we did see a very good closure. There is a sense of urgency. As I said, one of the comments, is quite possible this environment might make people make decisions faster, especially on efficiency-led, AI-led and AI and efficiency-led opportunities.”
– C. Vijayakumar, CEO & Managing Director
Engineering Services transformation delivers 75% booking growth, signaling strategic portfolio shift toward higher-value semiconductor and AI-enabled hardware services.
“Our Engineering and R&D Services business had a record high booking, which is a 75% growth in FY25. This demonstrates the great execution of our integrated GTM organization… we are very happy to report that our year-on-year booking in ER&D has grown 75%.”
– C. Vijayakumar, CEO & Managing Director
Sophisticated scenario planning reveals confidence beneath conservative guidance, with even “deterioration” scenarios assuming growth and strong pipeline conversion expectations.
“And our guidance, the lower end, we believe the environment will deteriorate from where we are. And that’s what the 2% represents… the midpoint also we assume that the environment will deteriorate, but it assumes that a couple of large deals, which were in the pipeline, we are likely to close in Q1… And at the higher end, we believe the environment could remain the same and we will do well in Q1 based on the pipeline and the deals which are expected to be closed.”
– C. Vijayakumar, CEO & Managing Director
AI Force platform achieves 57 deployments across 22 clients with quantified productivity gains of 20-25% in software development and up to 50% in digital process operations.
“AI Force has gained significant traction with 57 deployments among 22 clients in this financial year. These service transformations have created a significant business impact for our clients, such as a billion-dollar impact for a large insurance company by accelerating their policy modernization using GenAI… in software development, we are looking like 20% to 25% when we are able to implement and the maturity picks up… In digital process operations, agentic solutions are very real. We believe there can be a significant reduction… There it can be anywhere between 20% to even 50%.”
– C. Vijayakumar, CEO & Managing Director
Revenue productivity transformation demonstrates AI execution model evolution, with FY25 delivering 4.8% revenue growth alongside 2% headcount reduction.
“I think if you see this year FY’25, revenue grew in Services 4.8% and headcount declined roughly 2%. So that’s the nonlinearity that we want to build on an ongoing basis. And we envisage this execution model to be less location agnostic as we kind of get to a mix of 50% people and 50% agentic resolutions.”
– C. Vijayakumar, CEO & Managing Directo
Auto & Auto Ancillary
Tata Motors Limited | Large Cap | Auto Ancillary
Tata Motors Limited is India’s largest automobile company and a leading global manufacturer of commercial vehicles, passenger cars, and electric vehicles. The company operates through multiple subsidiaries including Jaguar Land Rover (JLR).
Complete debt-to-cash transformation achieved with net cash position of ₹1,000 crores despite ₹9,000 crores in financial leases, down from peak debt of ₹60,000 crores, fundamentally enhancing business resilience.
“While we ended FY23 at Rs. 43,000 crores, the peak debt this business had was almost Rs. 60,000 crores. That’s now down to minus Rs. 1,000 crores i.e. a net cash of Rs. 1,000 crores despite financial leases of Rs. 9,000 crores. So this is a very strong performance. And this is translating into reduction in net finance costs. And why I’m harping on that point is that intrinsically, this business is becoming far more resilient as it takes away debt, and it is able to now have more leeway to take on the headwinds that come our way.”
– PB Balaji, Group CFO
EV business achieves profitability milestone despite heavy market expansion investments and customer price benefits, with both EBITDA and PBT positive – a rare achievement in the global EV landscape.
“A key call-out for our EV business, despite the significant investments we continue to make in market expansion and our product investments and the price benefits that we have passed on to the customers for lower battery cost for the year, the business ended with both EBITDA and PBT positive.”
– Dhiman Gupta, VP Finance, TMPVL and TPEML
Digital transformation at scale in commercial vehicles with Fleet Edge serving 800,000 active vehicles and delivering quantifiable 5.5-6.3% fuel efficiency improvements through AI-powered Mileage Saarathi solution across 11,000+ vehicles.
“In our digital business, Fleet Edge now has almost 800,000 active vehicles with monthly active usage of 81% and weekly active usage of around 59%. I think apart from delivering uptime related services, we are also delivering the machine learning based insights to improve fuel efficiency in real life. The Solution is named as Mileage Saarathi and we are able to deliver around 5.5% to 6.3% real life fuel efficiency improvement on more than 11,000 vehicles.”
– Girish Wagh, Executive Director
JLR faces dramatic tariff headwinds with US automotive tariffs jumping from 2.5% to 25% (1000% increase) overnight, then reduced to 10% under UK-US trade deal - still representing a 300% increase from original levels.
“And remember what happened on April 3 is suddenly we got a 1000% increase overnight in our tariff bill for selling cars in the US. That’s a significant amount. The deal that’s being done now between the UK and the US., should bring that down. However, it will still be a 300% price increase or increasing cost of tariffs versus where we were in March. So it’s gone from 2.5% to 10%.”
– Richard Molyneux, CFO, JLR
JLR maintains GBP18 billion investment commitment over five years despite external uncertainties, demonstrating long-term confidence in technology leadership and business fundamentals.
“But what I will say now, however, is that our GBP18 billion investment programme over five years remains in place. It has to, to drive our business forward and that we’ll commit to funding that GBP18 billion with operating cash flows in a five-year period.”
– Richard Molyneux, CFO, JLR
Maruti Suzuki India Limited | Large Cap | Auto Ancillary
Maruti Suzuki India Limited is India’s largest passenger vehicle manufacturer with a dominant market share. The company manufactures and distributes passenger cars and light commercial vehicles through its extensive dealer network across India.
Management reveals a fundamental structural issue that most investors likely overlook - the addressable market is actually shrinking at the entry level. This suggests a permanent shift in market dynamics that could limit industry growth rates and force a strategic pivot toward premium segments or export markets.
“88% of the country is not participating in the car growth story that’s because entry level cars are just not growing, so, we have to be conscious of that fact and sometime India will have to take a call on how to address this if manufacturing has to grow, and auto is a large part of manufacturing sector.”
– Rahul Bharti, CIRO
Management explicitly positions exports not as opportunistic growth but as a defensive necessity against domestic market stagnation. The aggressive 20% export growth target for FY26 suggests domestic challenges are more severe than commonly understood. This strategic shift toward export dependency could change the company’s risk profile, exposing it more to global trade dynamics and currency fluctuations.
“One qualifier I would like to put, one of the levers that I talked about, was exports… Fortunately, when domestic growth is in very low levels, exports have cushioned the decline and we hope to grow exports in a healthy manner in the future and also in the medium term.”
– Rahul Bharti, CIRO
Unusually candid admission about EV economics that contradicts the bullish EV narrative, preparing investors for structurally lower margins. EV transition will be margin-dilutive for the foreseeable future, potentially requiring significant scale to achieve acceptable returns.
“See we have to be conscious that by design EVs will have a much lower profitability and that’s true for the entire industry. We can’t expect EVs to have the same level of profitability as IC engines. And if they were, then the government probably doesn’t need to have a 5% GST or so many schemes or so many support policies on that.”
– Rahul Bharti, CIRO
Management reveals sophisticated government relations capabilities and direct communication channels on policy matters. This relationship could provide early warning on policy changes and potentially influence outcomes favorable to the auto industry.
“See safeguard duty on steel, we are extremely thankful to the government. They have found a way of minimum import price… We just hope that the steel industry doesn’t use it to raise commodity prices in the market and we will be monitoring the situation and reporting to the government if necessary.”
– Rahul Bharti, CIRO
They signal a fundamental change in how the industry wants to measure performance, moving away from wholesale numbers that can be manipulated. This shift could reveal true demand patterns and potentially expose companies that have been using wholesale numbers to smooth earnings.
“We could grow our retail market share marginally and we would also like to share that very soon both as industry and as Maruti, we would prefer to shift to retail reporting because that’s a true barometer of consumer activity.”
– Rahul Bharti, CIRO
Financial Services
State Bank of India | Large Cap | Financial Services
State Bank of India (SBI) is India’s largest public sector bank. It provides a wide range of banking and financial services including corporate banking, retail banking, treasury operations, and international banking across 14 countries.
Corporate lending growth disappointed at 12% versus 14-16% guidance due to unexpected PSU deleveraging using equity funding rather than debt, though massive pipeline remains intact.
“We have had an unusual prepayment in that segment. Many of the large central PSUs have utilized their equity funding to deleverage, and that we could not cover in the short tenure of one quarter. Even now, we have around ₹3.4 lakh crore pipeline in the corporate side.”
– C S Setty, Chairman
Treasury positioned as strategic profit center for rate cutting cycle, with potential for significant mark-to-market (MTM) gains from bond price appreciation across largest government securities portfolio.
“Moderation in treasury yields definitely would help the markets to perform better and I think our treasury will do… We believe that with the rate cut cycle kicking in, the yields will definitely moderate, providing an opportunity for us both on the MTM side as well as on the trading profit.”
– C S Setty, Chairman
Digital banking transformation achieving massive scale with 8.77 crore YONO users and 98% transactions through digital channels, driving fundamental cost structure improvements.
“More than 8.77 crore customers have been registered on YONO with 64% of regular savings bank accounts opened through YONO in FY25… 98% of the transactions are conducted through the alternate channels.”
– C S Setty, Chairman
Management transparently acknowledges Net Interest Margins (NIM) pressure from rate cuts but emphasizes defensive loan mix with only 29% repo-linked exposure versus predominantly Marginal Cost of Funds-Based Lending Rate (MCLR) and fixed-rate loans.
“There definitely will be pressure on the NIM. There is no denial of the fact. The pressure will be relatively less on us because our repo linked loans are only 29%. Our book is either predominantly MCLR linked or fixed rate loans, almost 50%… but the fact that the NIM will be under pressure is something which we recognize.”
– C S Setty, Chairman
Recovery infrastructure rebuilt with regional stressed assets management offices targeting ₹8,000 crore annual recovery from written-off accounts, demonstrating systematic approach to granular recoveries.
“We brought back our stressed assets management regional offices. We used to have them to monitor the low value recoveries and when the large-scale NPAs had to be resolved we slightly reduced the focus on the regional offices… In the last few years, we brought back the regional offices.”
– C S Setty, Chairman
ICICI Bank Limited | Large Cap | Financial Services
ICICI Bank Limited is India’s second-largest private sector bank, offering comprehensive banking products and financial services to corporate and retail customers through a variety of delivery channels and specialized subsidiaries.
Strategic inflection point as bank prioritizes profitability over growth with “risk-adjusted Pre-Provision Operating Profit (PPOP)” focus, signaling mature approach but potentially slower expansion.
“So we are really focused on the risk adjusted PPOP and of course I think as we focus on that, if we want to make tactical calls on pricing etc. in a particular customer or segment or product for a particular period of time, I think our funding franchise gives us the flexibility to do that. But overall, we are quite focused on the overall PPOP.”
– Anindya Banerjee, Group CFO
Management acknowledges pricing disadvantage against large competitors, particularly in retail lending.
“But certainly there are very large, capable competitors who are also priced meaningfully below us. It does create some challenges in terms of growth, but I guess that’s part of life. So, we will have to keep dealing with it as we go along and look at how we can drive other levers to continue to maintain profitable growth.”
– Anindya Banerjee, Group CFO
Despite industry optimism, management explicitly acknowledges inevitable margin pressure from rate cuts due to asset-liability repricing mismatch.
“At the same time, as we spoke earlier, the deposit rates have also started falling. So, we will have to see as we go along how we manage through this. But there would be an impact on margins definitely.”
– Anindya Banerjee, Group CFO
Credit tightening measures implemented 18 months ago showing positive results, with management expecting gradual recovery in unsecured lending growth.
“On the unsecured side, probably the growth has bottomed-out. And we may see some improved growth from here is what we feel.”
– Anindya Banerjee, Group CFO
Management de-emphasizes traditional Current Account Savings Account (CASA) ratio focus, prioritizing overall funding cost and stability over volatile deposit mix metrics.
“We have to really look at what is the total quantum of funding and the cost of that funding and its deployability because very volatile CASA may not help also and its deployability and really look at it from that perspective, which is what we do.”
– Anindya Banerjee, Group CFO
HDFC Bank Limited | Large Cap | Financial Services
HDFC Bank Limited is India’s largest private sector bank by assets and market capitalization. It provides banking and financial services including retail banking, wholesale banking, treasury operations, and fee-based services through its network of branches and digital platforms.
Strategic inflection point as HDFC transitions from post-merger balance sheet normalization to growth acceleration mode, with Credit-to-Deposit (CD) ratio adjustment becoming less steep in FY26.
“Coming to the bank. As you recall, we spelled it out in Q4 of last year and to be more precise, I think, somewhere around February. We continue to be on the journey that we spelled out. Our credit deposit ratio has been brought down from the highs at the time of merger, which was at about 110% to around 96% as of March 2025. Next year, in line with what we had committed, the adjustment in CD ratio will not be so steep, supporting the loan growth for the bank, but it will be on a downward path.”
– Sashidhar Jagdishan, CEO & MD
Hidden technology catalyst ready for deployment after years of development, potentially creating significant competitive advantages.
“As liquidity and growth improve, we are well placed to grow in both assets and deposits. We have been doing a lot of work on technology over the last few years and we should start reaping the benefits of the same gradually during the course of the year. This is a space to watch out for, and we shall unveil at the appropriate time.”
– Sashidhar Jagdishan, CEO & MD
Massive organizational restructuring targeting rural market synergies, leveraging 225,000 village presence for integrated product delivery to farming families.
“One is, simple thing, if you take about agriculture, that’s now part of the retail management team who handled the two-wheeler and auto business and so on, that’s the same kind of a leadership that handles agriculture. So right now, we envisage not to just do an agriculture loan because that particular town, that farmer, that family and the neighbors do need a 2-wheeler, do need a car, auto loan and so on and so forth. So under the same team that we are trying to get these kind of multiple products made available to them.”
– Srinivasan Vaidyanathan, CFO
Disciplined deposit strategy reveals sophisticated understanding of deposit economics, avoiding volume chase at expense of profitability while maintaining key lending relationships.
“So the nonretail we’ve been circumspect, even I think it’s going back to almost December '23, that time period itself, we saw that the pricing on the nonretail deposit was unacceptably high and competitive without consideration for the liquidity lendable value of those deposits. So thereby only for large relationships, and where we could get certain other product mix aligned well, we patronize and participate. We are the largest working capital bank in the country, so we want to keep that wallet share growing in a reasonable manner.”
– Srinivasan Vaidyanathan, CFO
Credit cycle assessment suggests industry bottom reached 3-4 quarters ago, positioning HDFC for loan growth acceleration as conditions improve.
“If you listen to our Chief Credit Officer, he has done various analysis to say that the credit cycle bottomed out maybe even three quarters ago, four quarters ago and which you have seen at the industry level, the nonperforming loans going up and the credit cost beginning to go up. So whether the credit NPAs and credit costs will normalize over the next 1 year, 3 years, it should, but that should be at a lower level than what historically we have seen is the assessment of our credit officers.”
– Srinivasan Vaidyanathan, CFO
Pricing discipline in corporate lending reveals market distortions, with HDFC sacrificing near-term market share for long-term profitability as public sector banks prioritize growth over returns.
“And again selection, we have seen over the last 12 months, 18 months, the corporate loans of the larger ticket corporate loans and the larger ticket SME loans, have been very competitive, particularly coming from certain public sector institutions where the growth is an objective and not necessarily margin or returns. I mean the loan spreads have been very low compared to the bond spreads. That means when the bond spreads moves up or down, the loan spreads is not moving, it’s actually coming down, which is what we are seeing.”
– Srinivasan Vaidyanathan, CFO
Bajaj Finserv Limited | Large Cap | Financial Services
Bajaj Finserv Limited is a diversified financial services holding company with interests in life insurance, general insurance, consumer finance, and emerging financial services. It holds controlling stakes in Bajaj Allianz Life Insurance, Bajaj Allianz General Insurance, Bajaj Finance, and Bajaj Housing Finance.
BALIC’s strategic transformation could establish it as a premium player with sustainable competitive advantages, potentially leading to significant re-rating once growth resumes.
“During the second half of the year, BALIC launched ‘BALIC 2.0’ with a focus on sustainable and profitable growth while restructuring products to comply with revised product regulations. Simultaneously, it restructured most of the other products as well, focused on balanced product mix and focus on cost for operating leverage.”
– Tarun Chugh, MD & CEO, BALIC
The strategic shift involved changing 100% of their products (vs. industry’s 50%), deliberately taking a growth pause during regulatory transitions to emerge stronger with superior margins.
“We’ve been saying this as a guidance in our last two calls that we will be making a significant strategic shift, which we did make and we have ensured that our VNB margin is now moving up in the direction… While 50% of the products changed in the market, we changed 100% of our products. This was to result and I think it was a call which on hindsight has gone correct.”
– Tarun Chugh, MD & CEO, BALIC
Market appears to be misreading BAGIC’s true performance due to accounting changes - underlying growth is actually 8% vs. reported -13% decline.
“If we exclude the impact of volatility in the tender-driven crop and government health business and the impact of ‘1/n’ regulations, the growth for BAGIC is about 8% for the quarter as compared to the reported degrowth of 13%. Similarly on a full year basis, the growth excluding crop and government health and the impact of ‘1/n’ regulation for BAGIC is 12%, which is about 3% higher than the industry growth of 9%.”
– Ramandeep Singh Sahni, CFO
The Allianz buyout removes JV restrictions, enabling new business lines (pension, international, GIFT City operations) and strategic flexibility previously unavailable.
“We now have 100%, a lot more leeway to look at strategic opportunities which may involve dilution, maybe we can look at other business initiatives including for example in the GIFT City, we can look at the pension business, potentially, we can look at international foray as well because this is a sign of a very large amount being put up as domestic capital.”
– S. Sreenivasan, President
Early success in converting domestic healthcare processing scale (2.8 million claims processed) into international capabilities with “significantly higher” profitability margins than domestic business.
“While India is 16% of global population, India is less than 1% of healthcare spend of the world… we are very optimistic given that we process a lot of volumes in India, our competency set in technology in AI would create a proposition for international market… international is significantly higher [on profitability], but the market size there is tremendous.”
– Devang Mody, MD & CEO, Bajaj Finserv Health
Strong balance sheet (BAGIC: 325% solvency, BALIC: 359% solvency) combined with patient capital approach creates unique competitive positioning.
“We are not short-term players, and we are a more than 100-year-old group and therefore we have the patience and resilience to be able to play it with the aid of the surplus capital and the power of the brand that we have.”
– S. Sreenivasan, President
Axis Bank Limited | Large Cap | Financial Services
Axis Bank Limited is India’s third-largest private sector bank, offering comprehensive banking and financial services including retail banking, corporate banking, treasury operations, and subsidiary businesses across cards, mutual funds, and securities.
Proactive asset quality tightening during industry stress cycle demonstrates management’s commitment to long-term competitive positioning over short-term earnings.
“The Bank has reviewed and made more stringent its classification and upgrade criteria for certain types loans. This at the margin may negatively impact credit costs, upgrades and recoveries in FY 26 when compared to FY25.”
“We have said that our provisioning policies remain the tightest in the industry. We’ve tweaked how we classify assets at the margin, and that tweak is incremental, and this relates to some very specific asset outcomes like one-time settlements, et cetera.”
– Puneet Sharma, CFO
Conditional growth optimism tied explicitly to liquidity conditions suggests current quarter viewed as potential inflection point rather than temporary improvement.
“But we do believe that now both growth and profitability should start moving in the right direction, subject to this increased liquidity and continuous increased liquidity playing through for this particular financial year. So assuming liquidity remains, flows into the deposit side, we do believe that the platform is there for both growth and profitability.”
– Amitabh Chaudhry, MD & CEO
Reversal of traditional asset quality cycles with credit cards stabilizing earlier than personal loans, indicating sophisticated portfolio management and different underlying stress patterns.
“Overall, we see stabilisation in our card’s portfolio. Personal loans may take a few more quarters to show improvement.”
“I think we need to give you full color. The reason we make that comment is we took underwriting actions on the portfolio. The early reads on those underwriting actions are positive, but the vintages have not matured enough for us to provide a constructive or concrete outlook on the personal loan portfolio.”
– Puneet Sharma, CFO
First-mover advantage in aircraft financing demonstrates capabilities beyond traditional banking, with pioneering ₹34 aircraft deal structured end-to-end by GIFT City team.
“An example of this was during the quarter Axis Bank became the first Indian Bank to execute an Aircraft Financing deal. It involved a long-term US Dollar Loan for the purchase of 34 training aircrafts. This pioneering aircraft financing deal, structured end-to-end by our GIFT City Team, is a strategic step towards creating a robust aviation finance ecosystem within India.”
– Amitabh Chaudhry, MD & CEO
Strong margin sustainability confidence with 18 bps cushion above through-cycle guidance, supported by sophisticated duration matching between assets and liabilities.
“I think we are roughly about 18 basis points above our through-cycle margin on a full-year basis, 17 basis points for the last quarter. I think we will try and retain as much of the cushion as we can.”
“While assets will reprice faster than liabilities, if you take the duration view of the balance sheet, we have a very tight duration between assets and liabilities.”
– Puneet Sharma, CFO
Nuvama Wealth | Small Cap | Financial Services
Nuvama Wealth is engaged in broking and trading of equity securities, derivatives, and currencies on Indian stock exchanges, catering to institutional and non-institutional clients, including retail customers. The company’s Institutional Equities segment offers equity sales, research, and trading services to institutional clients, covering both securities and futures contracts.
A strong, candid statement about the competitive environment for talent in the wealth management industry. It suggests that some competitors might be engaging in unsustainable hiring practices. Nuvama positions itself as focusing on attracting RMs who value platform and long-term book building over immediate high compensation, potentially leading to more stable and sustainable growth.
“Capacity, we’ve been able to add about 10% this year. And here, I would like to comment. I mean, I think in a sense, there’s some sort of madness happening in the market right now, the way people are building out teams and the way compensation has been dealt, I don’t know, it looks like a race to death.
I think at a time when cycle goes bad, I maintain that many of these will get decimated. I think some sense should prevail over a period of time. We’ve been able to build, I think, like-minded people have joined who appreciate platform, who appreciate building a book and not look at immediate short-term gratification but how a platform can help them build a sustainable practice and deliver value to the clients and therefore, create long-term value for them."
– Ashish Kehair, MD & CEO
Management indicates that the regulatory uncertainty surrounding F&O trading, which was a concern, has largely dissipated. The proposed new rules are seen positively, and client interest is returning strongly.
“Two things, we have seen. After the implementation of whatever the regulators have put out, we have seen the full quarter 4 play out, and we have not seen a dent in revenue because again, people operate with a peak margin which is intraday and that doesn’t fluctuate that much. That keeps going up given the deployment opportunity they have. Now with the new rules which is now as a discussion paper and maybe will get finalized where the limits have been increased to INR 1,500-10,000 crores, and limit will be monitored on a delta-adjusted open interest basis, there are flexible rules on index futures and market-wide, open position will also be linked to cash volume.
So, this has removed a lot of uncertainty because the regulators also took feedback from most of these international clients who operate in this market. And more importantly, the intraday peak has been removed from being a limit than to monitoring, which is there in most of the developed markets in the world. So subsequent to this change, the amount of interest that has started to come back again, most of the people who were sitting on the fence are coming back. So, I think we should see a good year once again. Again, I’m repeating it will not be a similar increase like we saw last year, but it will be a decent jump even on this elevated base.”
– Ashish Kehair, MD & CEO
Metals
JSW Steel Limited | Large Cap | Metals
JSW Steel Limited is engaged in steel production. It has a significant presence in integrated steel manufacturing with operations across India and international markets through subsidiaries and joint ventures.
Market dynamics reveal underlying trade flow optimization as domestic production capabilities align with national steel demand requirements.
“The additional point which you’ll have to see that imports also, we do expect to moderate in this financial year. We have gradually reduced our export percentage of our overall sales. You now see that at about 8%. And therefore, our dependence on the international market is lesser. Imports will also go down. So therefore, to the extent of the net imports, which you see today, that gap will probably be far lower.”
– Jayant Acharya, CEO
Supply chain integration demonstrates comprehensive backward integration strategy as captive sourcing capabilities reduce market dependency and cost volatility.
“Enhancing our raw material security has been a major pillar of our corporate strategy. Our overall expectation for this current year, FY26, is 40% from captive sources of iron ore and balance would be from different market sources. We continue to increase our sourcing from the captive sources and that effort and strategy will continue to be in place.”
– Jayant Acharya, CEO
Market intelligence positioning shows sustained growth trajectory as infrastructure development and industrial expansion drive consistent steel consumption patterns.
“The domestic market, as we see today, remains strong. We will see incrementally probably 13 to 14 million tonnes or a little more of incremental demand this year. As a matter of fact, if you look at a 2-year or a 3-year scenario, then you will see that we need to build capacities faster to be able to meet the demand. Incrementally, you will continue to see a demand of about 15 million tonnes every year.”
– Jayant Acharya, CEO
Energy transformation approach demonstrates sustainable cost optimization as renewable capacity deployment reduces operational expenses and carbon footprint.
“Our focus on renewable energy has started paying us dividend. We would be seeing the completion of our 1,000-megawatt renewable energy during this quarter, and that would be more cost effective in terms of our overall power cost. Third lever is your renewable energy, which is getting into operation, and that would be again positive for our power cost.”
– Jayant Acharya, CEO
FMCG
Hindustan Unilever Limited | Large Cap | FMCG
Hindustan Unilever Limited (HUL) is India’s largest FMCG company, manufacturing and marketing home care, personal care, beauty & wellbeing, foods & refreshment products. It owns iconic brands like Surf Excel, Lifebuoy, Dove, Lux, and Brooke Bond across 4 integrated business units.
Management deliberately compresses EBITDA margins by 100 bps (from 23-24% to 22-23%) to fuel aggressive growth investments, marking a fundamental shift from defensive to offensive strategy.
“The entire EBITDA change that we intend to do, which is basically moving from the lower end of the 23% - 24% range… to 22% - 23%, is essentially not price versus cost adjustment. The intention behind this change is to dial up investments across all the lines of the P&L… there are two things which are happening. A. there are improving macroeconomic conditions, which will augur well for demand conditions. And B. the amount of portfolio transformation that we are ready with, to put investments behind, both put together, in our view, now is the right time to dial-up investments.”
– Ritesh Tiwari, CFO
Conservative approach of never pricing to commodity peaks creates margin recovery potential as pricing catches up to sustained inflation.
“Whenever the prices go up of commodity, we don’t price to the peak of inflation. We always take in small hike the price increases… for example, to make it real, Palm oil went to as high as $1,150. We never priced to $1,150. So now today, when we sit at $980 or $950, there’s no need for us to adjust for that $200 because we started with $750 up and we start moving up.”
– Ritesh Tiwari, CFO
Rs. 7,000 crores Market Makers portfolio across all segments already delivering strong double-digit growth, indicating serious commitment to new category creation.
“Today, we have a Rs. 7,000 crores portfolio which sits in Market Maker across all the four segments that we have. This part of the business, which is Market Maker, is already growing in good, strong double digits. So, idea would be to invest behind Market Makers and continue to grow that business.”
– Ritesh Tiwari, CFO
Brand superiority moats strengthen competitive positioning. 80% of business now superior to eyeball competition on unmissable brand superiority scores, providing pricing power and defensive market positioning.
“We have continued to invest in the drivers of preference, taking our brands from strength to strength. This is reflected in our unmissable brand superiority scores or UBS, with more than 80% of our business being superior to eyeball competition.”
– Rohit Jawa, CEO
Energy
Power Grid Corporation of India Limited | Large Cap | Energy
Power Grid Corporation of India Limited (POWERGRID) is India’s largest electric power transmission utility, responsible for operating the national power grid and facilitating electricity transmission across states.
Revolutionary project execution through remote monitoring sets new world record with 9-month 765kV substation commissioning, demonstrating breakthrough efficiency that could be a sustainable competitive advantage.
“We are monitoring all the stations from remote control center in Gurgaon headquarter, which all stations are fitted with cameras, and we are monitoring, including CMD POWERGRID and Director (Projects). We are monitoring each and every site sitting from our office… I’m happy to announce that in financial year 2024-25, we have commissioned Sikar 765 kV substation in about 9 to 10 months from date of acquisition of land, which may be world record.”
– R.K. Tyagi, Chairman
Policy changes around land compensation, though seemingly adding to project costs, are subtly reinforcing POWERGRID’s long-term competitive advantage. POWERGRID indicates that any cost differential will be recovered under the “change in law” clause, meaning the additional expenditure will be reimbursed through higher transmission tariffs approved by the regulator. More importantly, these higher upfront costs create a barrier to entry for newer or smaller players.
“In June 2024, there was a Right of Way (ROW) guideline issued by Government of India… from 15% ROW land compensation, it was increased to 30%. And on tower base, it was increased from 85% to 200%… So whatever differential amount will be there, will be claiming under change of law. So, we are not expecting impact of any delay or our expenditure incurred on these schemes.”
– R.K. Tyagi, Chairman
Conservative capex guidance masks upside potential - management sandbagging by 7-10% suggests strong pipeline visibility and confidence in exceeding targets.
“Capex outlook, we are targeting INR 28,000 crores in FY26… As far as INR 28,000 crores, it is as of now, whatever visibility we are seeing as of now, but it is likely to increase to more than INR 30,000 crores. So that exact figure we can tell after 3 months once we see the progress and other projects, which we are likely to win.”
– R.K. Tyagi, Chairman
Telecom
Bharti Airtel Limited | Large Cap | Telecom
Bharti Airtel Limited is India’s leading telecommunications company, providing mobile, broadband, and digital services across India and Africa. With over 500 million customers globally, Airtel operates across mobile services, enterprise solutions, digital TV, payments, and data centers.
Tariff architecture overhaul signals sophisticated pricing strategy beyond simple hikes, targeting 2-5x ARPU expansion in premium segments.
“Restructuring the tariff architecture is essential to improve financial health of the industry and sustain future investments. This could simply mean reducing data allowances on some of the packs and charging more for those who can afford to pay. The entry level pricing on the plans should potentially not go up… but the next level pricing where there is oodles of data allowance that is put in there, that data allowance should dramatically reduce and then there should be a reason for people to upgrade to higher plan. So, from small, medium, large and extra large is the way that the architecture should be. To give you an example, if you look at the India price architecture and index entry price at 100 and index the highest price, then the 100 gets to maybe 250… but if you compare that with a market like Indonesia… then that goes from 100 to 500.”
– Gopal Vittal, Vice Chairman & Managing Director
Management admits dissatisfaction with 12% data center market share, signals aggressive expansion with “substantial capacity” coming online in next 18 months.
“I think you are right that we have been kind of, I would say, modest in terms of our data center aspirations. The fact is that in a market that is growing quite rapidly and a market that is very fragmented, we are a player with potentially less than 12% market share. We are not pleased with that. There are several, several data centers that are currently in the stage of build. We are going to have a substantial amount of capacity that will be created in the next 18 months, which is all in the stage of build. We are also looking at a certain other avenues and you will hear more about this in the coming months, but we believe that aspirations on data centers need to be stepped up.”
– Gopal Vittal, Vice Chairman & Managing Director
Africa positioned as superior growth engine with 2x India’s growth rate, clear intention to increase stake significantly despite past forced sell-downs.
“On Africa, I want to give you a little bit of a background. If you recall, we were forced to sell down in the past due to cash flow issues and the fact is Africa is growing solidly and even more than India, it is almost a 2x in terms of growth and you will appreciate that all companies need growth and here we have got one nicely set up in a large set of 14 countries. This is a big, big advantage. So we will take more and back it if we believe in it. All our buying has been at good value, our last block was at about 132 pence and now, it is at 170 odd pence… we will look at opportunities to buy more.”
– Gopal Vittal, Vice Chairman & Managing Director
B2B strategy reveals active portfolio pruning - shedding commoditized revenue while building 35% connectivity market share and targeting digital acceleration.
“As mentioned in the last call, the sequential decline is on account of our strategy to move away from commoditized low margin businesses. There is a wholesale part which is largely to do with messaging and incoming voice. This part is broadly declining because of the pressure on price as well as the shift away from SMS to in-app notifications. The core connectivity business, where we have a lion share. We have got a 35% share that has really grown. It has almost added six to seven share points over the last few years. And finally, there is a digital business which today is growing at about 25-30%. I am not happy with that growth. My own view is that that growth must be substantially stepped up and this is why we are putting in the investments required on things like Cloud.”
– Gopal Vittal, Vice Chairman & Managing Director
5G networks revealed as “pretty empty” with significant traffic growth potential before SA deployment needed, FWA prioritized for standalone architecture.
“On 5G SA, at the right point in time, we will go for it. As I have mentioned to you before, on the mobile side, it is very important that we offload the 4G traffic to 5G networks before we are in a position to refarm the spectrum and move to SA. I think experience matters more to us than technology for the sake of technology. We are going to be prudent about where we actually deploy SA based on when we can offload the traffic. You must know that at this point, our networks on 5G are pretty empty and so we have a lot of headroom for uplink, but at some point in time, probably the first port of call will be to move SA on fixed wireless access and then finally to get it to mobile.”
– Gopal Vittal, Vice Chairman & Managing Director
Management demands “complete flexibility” on cash deployment, rejecting rigid capital allocation frameworks while emphasizing opportunistic investment approach.
“So the reason I am giving you a slightly longer answer is we want complete flexibility on the use of cash. It will always be in the best interest of the company and as you know, both the promoter group and the management has shown solid leadership in managing difficult years of financial situation where many competitors struggle. So, you will have to leave this to our judgement to use the way cash is deployed in the right way. We will manage this through balancing debt, dividends, buybacks, and some investments wherever needed.”
– Gopal Vittal, Vice Chairman & Managing Director
Healthcare
Divi’s Laboratories Limited | Large Cap | Healthcare
Divi’s Laboratories Limited is a key player in the pharmaceutical industry, specializing in the production of Active Pharmaceutical Ingredients (APIs), Intermediates, and Nutraceutical ingredients.
Management made it clear that their new Kakinada facility isn’t just about squeezing out a few extra basis points on margins. The real strategic play here is securing a continuous, controlled supply of critical starting materials.
“But Kakinada more than creating space or controlling our price, the main reason of having Kakinada is for having continuous supply of our own raw materials and our critical starting materials. So, to avoid any disruption in supply for us, to have continuous supply for our customers, is why Kakinada also started, apart from pricing and controlling our impurity profiles and several other factors.”
— Dr. Kiran S. Divi
With all the talk about “China Plus One” and the Biosecure Act, Divi’s reminded analysts that their custom synthesis (CS) business is no flash in the pan. They’ve been at it since day one, long before these geopolitical shifts became investor buzzwords.
“Firstly, we have always been in the CS business, custom synthesis business right from the inception. It’s not something that we started after China Plus One or the Biosecure Act has started, our business was there… With the Biosecure Act or China Plus One, we are seeing a little more than what we have seen before.”
— Dr. Kiran S. Divi
Don’t expect Divi’s to build out the remaining 300 acres at Kakinada just for the sake of it. The expansion playbook is clear: they’ll invest and build based on concrete market demand and specific custom synthesis opportunities that require immediate capacity.
“We still have 300 acres. Based on the requirement in the market and opportunities we see, we will expand… Everything is based on the opportunities we have and when for example in a CS (Custom Synthesis) molecule will come to life and we need space immediately, of course we have to invest and move forward.”
— Dr. Kiran S. Divi
Engineering & Capital Goods
Ion Exchange | Small Cap | Engineering & Capital Goods
Ion Exchange (India) Limited is now an Indian company offering water cycle solutions including pre-treatment, process water treatment, waste water treatment, sewage treatment, and more. They also manufacture resins and specialty chemicals for water treatment in various sectors including industrial, residential, commercial, and defense establishments.
Management clarified the reason behind muted order inflows, noting aggressive market pricing and selective bidding practices
“We have been a bit slow on the order intake for the last quarter of the last financial year, a couple of factors. One is, some of the jobs that we had bid, a couple of large orders we could not win. There was a lot more aggressive pricing in the market. And then a few other key jobs that we have been pursuing have spilled over to the next financial year. So those jobs are still very much alive, and we are in the fray it is just a timing issue for us, and we continue to be selective on engineering projects to be able to pick up jobs that we feel are attractive to our overall engineering business margin . So, we will continue to pick up jobs in a very selective fashion.”
Management discussed the dramatic reduction in project order book due to reassessment
“As we mentioned earlier in the call the UP Jal Nigam project has been moving slow. There has been a challenge on the allocation of funds, which is getting worked through, and hopefully we will see some improvement in the future, but the project progress has been slow, which has been reflected in our engineering business performance in the last preceding quarter. As we also mentioned in the call, looking at the progress of the project we have taken a conservative view of the balance order backlog, and as we have also said that we expect the balance of this project to continue throughout this financial year, and we should be able to hopefully wrap it up early in the next financial year.
And you had asked about the receivables on the UP project. As mentioned earlier, there have been some funding issues on this contract. So the collections against the receivables have been slow in the current year. So that is one of the reasons why our overall debtors days have also gone up”
Building Materials
Akzo Nobel India Limited | Mid Cap | Building Materials
Akzo Nobel India Limited is a leading paint and coatings company in India, manufacturing decorative paints, performance coatings, and specialty chemicals. The company operates under the Dulux brand for decorative paints and serves both consumer and industrial segments.
Strategic discipline over market share gains as management deliberately exits destructive pricing battles in mass segments, prioritizing sustainable profitability despite short-term volume losses.
“Our challenge was really in the mass economy putty categories where really we saw a huge amount of price erosion, discounting and we chose that we will not actively play in the last quarter. We’ve just decided to be sensible and we’ve seen that some of the volumes that we lost in March came back in April and at a YTD level back in these categories.”
– Rajiv Rajgopal, Chairman and Managing Director
Major strategic shift from expansion-focused to productivity-focused distribution as competitive intensity forces protection of existing relationships over aggressive network growth.
“Earlier, if you take a 5-year average, if we were growing at 6%, yes, only 1/10 came from existing stores and about 5% came from new stores or newer outlets. What we are trying to do is trying to reshape it… Because in the intensified competition, it’s very important that your own stores, you first protect before you start now investing in the new store.”
– Rajiv Rajgopal, Chairman and Managing Director
Management teases “massive announcement” within a month that will “change the way the paint market operates,” suggesting potential game-changing innovation or strategic response to competitive pressure.
“So we will, in a couple of weeks or a month, in a month, make a massive announcement. We are going to change the way we – the paint market operates. I’m not in a position to share that today, but you will hear an announcement come in the next month or so, which the team will make in terms of why we genuinely think we are now the unique and one of the best-in-class paints in the industry.”
– Rajiv Rajgopal, Chairman and Managing Director
Ambitious target to become number 3 player in decorative paints despite acknowledging it’s a “bleeding statement” given market fragmentation, backed by strong execution track record.
“For me, very clearly, the ambition is to become the number 3 player in the decorative. It’s a bleeding statement at this point of time with so many new players coming in. But at the end of the day, I think if you look at the last 3 years, our records hopefully tell a story because I always believe that numbers tell a story.”
– Rajiv Rajgopal, Chairman and Managing Director
Disciplined approach to construction chemicals entry with “ready to launch” status but waiting for margin-accretive positioning rather than speed to market.
“Even today, our numbers are without construction chemicals. We’ve not yet started our construction. We are ready to launch, but we’ve not entered it… I want to make sure that in the products we play, we are significantly superior to our competitors and not just iffy… we also want to make sure it’s margin accretive, not dilutive as we move forward.”
– Rajiv Rajgopal, Chairman and Managing Director
Exceptional profitability leadership with 13.6% EBIT margin despite 7-8% market share, quantifying superior business model execution and providing financial flexibility for strategic investments.
“I think for a number 2 player with 13.6% EBIT margin, in the year with a 7%, 8% market share, I think, is quite unheard of. I don’t think you hear too many number 4 players in any industry, first making the sort of profits that we do, having the sort of cash flows we have.”
– Rajiv Rajgopal, Chairman and Managing Director
Tourism & Hospitality
Yatra Online | Small Cap | Tourism & Hospitality
Yatra Online Pvt. Ltd., an online travel company, provides information, pricing, availability, and booking facility services for air travel, hotels, buses, and car rentals for large cities and small rural areas in India and internationally. It offers information on flights, trains, and hotels. The company’s customer service center also enables business and leisure travelers to book through its online, call center, and mobile support.
Management explains how booking volumes are down for the year, but segment revenue is up
“So, what we’ve been focused on moving more and more towards our corporate business, right? So, what we’ve done is replace effectively lower volume B2C bookings with high-value corporate bookings. The margins and the absolute realization on corporate travel are significantly higher than on B2C part of it.
And because of that, you see while volumes have dropped the gross bookings have improved and the earnings have improved much more meaningfully.
So, it’s an attempt on our part to rebalance our business more towards corporate, which has been in line with our strategic initiatives, right, and our strategic approach that we’ve adopted for the last 2 years. So, this is a continuation of that same trend only. As I mentioned in my opening remarks as well, we are now at a stage where about 65% of our gross bookings are coming from our corporate and B2B part of our business. And we expect in the current year as well, this will continue to move more and more towards the corporate sector.”
– Dhruv Shringi, CEO
Management explains how will it manage working capital, since working capital days on B2B side of business is relatively higher
“So on the working capital side, we continue to work not just with banks on factoring services, which are available to us, but also work closely with our corporate customers to migrate some of these corporate bookings from credit on to a credit card platform. This is a journey that we’ve undertaken a few years ago, and now we are at a stage where almost 30-plus percent of our bookings are on credit card, corporate credit card platforms. So that will continue to happen and that will help reduce the working capital needs of the business.
Having said that, today, from a business point of view, we have almost INR160-odd crores of unutilized banking facility is also available with us. And we have enough and more capital available, which will allow us to at least double our corporate business, if not take it 2.5x from where it is right now.”
– Dhruv Shringi, CEO
Management prioritizes aggressive growth and market share in the corporate segment in the short-to-medium term, even if it means deploying working capital.
“So I do believe it’s important for us to continue to grow faster in the short- to medium-term as opposed to worrying more about the cash flow from operations. I would focus, and I would request you also to focus on the profitability at the moment, right, and how we are driving profitable growth. Once we’re able to build a large defensive business, right, which is what we are trying to do, then automatically, then the fallout from an operating leverage point of view into free cash flow will be extremely high.
So I want to first build out a larger base and then use that larger base from a farming point of view to cross-sell more products and services. And after that, get to the stage from a cash flow point of view. That is like the 2- to 3-year journey that I’m mapping out in my mind. So for me, the next 2, 3 years are more about continuing to drive scale and growing at upwards of 25% and maybe even closer to 30% on the corporate side”
– Dhruv Shringi, CEO
Lower customer acquisition cost is the new normal for them as it falls from almost about 4.7% in FY '24 to essentially as low as 2.8% in Q4 '25
“So in terms of looking at customer acquisition costs, I think we should start looking at the current run rate to be the new normal. We should be trending at these levels with some variation on account of seasonality or some variation in terms of competitive pressures at times. But it will broadly trend around this number of 2.8%.
So if I was to model it, right, we are modeling it between 2.6% and 3%. That’s why we would look at this going forward. And this is happening on account of optimization work that we’ve been doing and being able to drive cross-sell of personal travel from our corporate customers.”
– Dhruv Shringi, CEO
Management explains it’s venture into SaaS and fintech
“So on the SaaS side, the SaaS obviously is our corporate travel platform that we have, this is a platform that we provide to all our business travel customers. More than 70% of our transactions are done by the customers using this platform. This platform then deeply integrates into the ERP systems, into the HRMS systems of the organizations, the company’s approval process mechanism and purchasing flow for travel sits on our platform. And from there, then it will go seamlessly integrate into an expense management solution as well for people to claim their expenses on trip. So that’s the solution that we are offering.
On the fintech side, while today, it’s still relatively early days for the expense management , I think expense management combined with credit cards and credit cloud-led payment solutions are increasingly growing opportunity in the Indian corporate landscape. More and more companies want to move away from handing out imprest and cash and automate all of that, using prepaid card instruments or prepaid wallets or credit card and credit card-led wallets. So that’s what we are working on at this point of time. And this will be the next stage, which will be there at some point in the second half of the current fiscal year.”
“So, on the expense management and card solutions, I’m a lot more bullish on that, right? I do see that as a very healthy opportunity. And if I look at this 3 to 5 years down the road, I do think that from an income point of view, one third of our income could potentially come from these, and the expense management solution could be not just an India-focused solution but will be a combination of India plus international markets.”
– Dhruv Shringi, CEO
Management explains why B2B price realizations are 50% higher then B2C when it comes to air tickets and hotel bookings
“That is right because corporate travelers will typically book at the last minute and the book much more bundled fares, which will include seat, meal bags included in that, there is a much higher mix of business and first-class in corporate versus consumer. So, the average realization on corporate for an air ticket and the same would hold true for hotels is about 1.5x to B2C realization.
So, on the corporate side as well for hotels , the same actually holds true because of a timing difference. See, while retail will typically book 15, 30 days in advance, corporate bookings are typically happening on a D minus three. So, the average realization is still higher on the corporate side. Now there will be some corporates, right, who will have specially negotiated rates. But what we’ve seen over the course of the last 2 years as demand has really surged in the Indian hotel industry that number of times and the corporate rates are actually those deep discounted rates that corporate had are actually available is shrinking quite significantly. So more and more corporate business is moving to bar rates, and bar, as you would know, closer to check-in is meaningfully higher than 15, 30 days out. What you’re saying was absolutely correct in the pre-COVID era, but given the surge in demand that we’ve seen post-COVID and the scarcity of supply in the Indian hotel market, that dynamic is no longer true.”
– Dhruv Shringi, CEO
That’s it for now! Your feedback will really help shape how The Chatter evolves. Drop it down in the comments below!
Quotes in this newsletter were curated by Kashish, Apurva & Prerana.
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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