Motilal Oswal Financial Services

4QFY25 | India Inc on Call

Voices | 4QFY25

Voices

BSE Sensex: 82,189

S&P CNX: 25,003

Commentary remains cautious; revisions in forward earnings

continue to be weak

In this report, we present the detailed takeaways from our 4QFY25 conference calls with

various company managements as we refine the essence of India Inc.’s ‘VOICES’.



Corporate earnings

–

a broad-based beat:

The

4QFY25 corporate earnings

concluded on a strong note, showcasing widespread outperformance across

aggregates (13 sectors exceeded our expectations). Metals, OMCs, PSU Banks,

Automobiles, Healthcare, Technology, and Capital Goods fueled this healthy

performance. Conversely, Oil & Gas (ex-OMCs) and Private Banks dragged down

overall profitability. However, forward earnings revisions continued to be weak,

with downgrades surpassing upgrades. The Nifty-50 delivered a 3% YoY PAT

growth (vs. our est. of +2%). Nifty reported single-digit profit growth for the fourth

successive quarter since the pandemic (Jun’20).

Management teams for most

Banks

remained cautious in FY25 owing to slow

growth as well as mounting stress in the unsecured segments; however, 4QFY25

was a relatively stable quarter. In 4QFY25, large private banks saw NIM

improvement while PSBs faced a moderate decline. CASA rose for big banks but

dipped slightly for smaller ones.

Within

NBFC/HFC,

various management teams highlighted the following: 1) the

demand outlook remained subdued in the CV segment due to weak government

spending and capex, while demand in PVs and tractors improved; 2) asset

quality deteriorated across most product segments barring power financiers and

select HFCs because of customer overleveraging, sluggishness in consumption,

and a weak macroeconomic environment; 3) NBFC-MFIs exhibited an

improvement in PAR levels across most states during the quarter, except for

Karnataka. Collection efficiency in Karnataka is expected to normalize by the end

of 1QFY26; and 4) gold loan demand remained strong due to rising gold prices,

high tonnage growth, and unavailability of unsecured loans.

Management teams of

IT Services

companies remain cautiously optimistic,

though they acknowledge persistent macroeconomic challenges weighing on

overall demand. Discretionary spending, which showed signs of recovery earlier

in FY25, now appears to be stalling as clients adopt a wait-and-watch stance due

to trade tensions and uncertainty around the Fed’s rate trajectory.

Healthcare,

companies indicated prolonged weakness in acute therapies

within the domestic formulation segment. This is largely driven by unfavorable

seasonality and improved hygienic conditions. This is impacting the overall

industry growth as well because of the dominant share of acute therapies

(almost 65% of IPM). Companies were bullish on the growth prospects of

chronic therapies. Specifically, companies are gearing up for the launch of

products in diabetes/obesity.

Automobiles

earnings calls, management widely suggested a moderation in

domestic demand for most segments, except tractors. For both PV and CVs,

management expects growth for FY26 to be under 5%. The 2W OEMs were a bit

more positive and pegged growth expectations at 6-7%. Tractor OEMs hope to see

high single-digit growth for FY26E given positive rural sentiments. Further, the

export outlook continues to be uncertain given the ongoing tariff-led headwinds.

Ancillary players with global exposure are seeing an uncertain demand

June 2025

Voices | 4QFY25

environment given the global headwinds in key markets. Management also

cautioned about a gradual rise in input costs from 1Q onwards.

Capital Goods

companies maintained a positive outlook across key sectors,

including power T&D, renewable energy, data centers, cement, steel,

construction, oil & gas, and defense. Public capex is starting to pick up, while

private sector inquiries are expected to materialize in the coming quarters.

For

Consumer,

most of the companies witnessed limited volume growth,

typically in the low to mid-single digits. While urban demand remained subdued,

rural consumption continued to recover gradually. Management expects a

gradual uptick in demand in FY26, driven by reasons such as income tax breaks,

interest rate reductions, easing inflation, and expectation of better monsoons.



Autos



In the 4QFY25 earnings calls, management widely suggested a moderation in

domestic demand for most segments, except tractors. For both PV and CVs,

management expects growth for FY26 to be under 5%. 2W OEMs were a bit more

positive and pegged growth expectations at 6-7%. Tractor OEMs hope to see high

single-digit growth for FY26E given positive rural sentiments. Further, the export

outlook continues to be uncertain given the ongoing tariff-led headwinds.

Ancillary players with global exposure are seeing an uncertain demand

environment given the global headwinds in key markets. Management also

cautioned about a gradual rise in input costs from 1Q onwards.

Capital Goods



Management maintains a positive outlook across key sectors, including power

T&D, renewable energy, data centers, cement, steel, construction, oil & gas, and

defense. Public capital expenditure is starting to pick up, while private sector

inquiries are expected to materialize in coming quarters. In the defense sector,

management commentary remains highly optimistic, forecasting a ramp-up in

order inflows in the near term on account of emergency procurement, as well as

for the medium-to-long term led by both base and large ordering. In the

powergen industry, various management teams are of the view that genset

volume declines are now bottoming out and prices are firming up across

product nodes. Management commentary on the railways sector remained

mixed, with some anticipating a pickup in ordering activity over the coming

quarters, while others expect the current slowdown to persist in the near term.

Cement



Cement companies indicated that demand did improve in 4QFY25, driven by

higher government spending, strong housing demand, and favorable rural as

well as urban trends. The all-India average cement price rose ~2% QoQ, led by a

Dec’24 hike. The South saw a sharp ~10% price rise QTD, while

prices of other

regions were flat to slightly up (1–2%). Companies are balancing volume growth

and profitability amid high competition, with the top three players expected to

add ~50mtpa capacity organically in FY26, sustaining supply pressure.

Chemicals



Management teams remain cautiously optimistic and expect volume-driven

growth to persist, supported by resilient domestic demand, softening raw

material prices, and ongoing capacity additions. Challenges such as global

oversupply, dumping (particularly from China and Korea), and geopolitical

uncertainties may continue to exert pressure on margins. Improving utilization

June 2025

Voices | 4QFY25

rates and a strong capex pipeline are likely to support a gradual recovery in

sector profitability.

Consumer



Most of the companies witnessed limited volume growth, typically in the low to

mid-single digits. While urban demand remained subdued, rural consumption

continued to recover gradually. Management expects a gradual uptick in

demand in FY26, driven by reasons such as income tax breaks, interest rate

reductions, easing inflation, and the expectation of better monsoons. Rising

commodity costs, particularly in the agri basket, combined with price hikes

taken at a lag, led to gross margin pressure across most categories and

companies in 4Q. However, companies have mainly completed taking price

hikes, and RM inflation is beginning to cool off. Hence, the full benefits are likely

to materialize in the coming quarters. The companies remain optimistic that

price modifications, combined with a likely rise in volumes, will drive revenue

growth going forward.

Consumer Durables



As anticipated by durable companies, the cable and wire (C&W) segment saw

strong growth, led by a pick-up in government capex, consistent strong demand

in the power sector (including renewable energy), real estate, and higher export

demand. Demand growth in the C&W segment is expected to continue, backed

by the power segment, development of electric vehicle (EV) infrastructure,

other infrastructure projects such as railways, metros, and highways, and

industrial demand. Meanwhile, a delayed summer and early rains in the south

and west regions led to subdued demand for cooling products in the secondary

market.

EMS



Most management teams have guided strong FY26 revenue growth, driven by

robust demand, project ramp-ups, and scale benefits from new capacities.

Strategic global tie-ups, acquisitions, and product diversification across sectors

like aerospace, defense, medtech, and electronics are expected to boost

momentum. Continued capex, R&D, and backward integration efforts should

support margin expansion and strengthen long-term positioning.

Financials

Banks



Management teams for most banks remain cautious in FY25 owing to slow

growth as well as stress piling up in the unsecured segments; however, 4QFY25

witnessed relatively a stable quarter. In 4QFY25, large private banks saw NIM

improvement while PSBs faced a moderate decline. CASA rose for big banks but

dipped slightly for smaller ones. Operating costs were mostly stable except for

some PSBs with one-off expenses. Other income improved on fees and treasury

gains. Credit growth slowed due to a high CD ratio, with weak corporate and

unsecured lending amid stress in MFI and personal loans. NII growth and

margins are expected to stay moderate in FY26, with pressure in 1H easing in 2H

due to rate cuts. Banks with higher exposure to unsecured loans saw

deteriorating asset quality as well as higher credit costs.

NBFC



Within NBFC/HFC, various management teams highlighted the following: 1) the

demand outlook remained subdued in the CV segment due to weak government

spending and capex, while demand in PVs and tractors improved; 2) asset

June 2025

Voices | 4QFY25

quality deteriorated across most product segments barring power financiers and

select HFCs because of customer overleveraging, sluggishness in consumption,

and a weak macroeconomic environment; 3) NBFC-MFIs exhibited an

improvement in PAR levels across most states during the quarter, except for

Karnataka. Collection efficiency in Karnataka is expected to normalize by the end

of 1QFY26; and 4) gold loan demand remained strong due to rising gold prices,

high tonnage growth, and unavailability of unsecured loans.

Capital Markets



The capital market ecosystem witnessed a mixed performance in FY25, marked

by strong growth in 1HFY25, but due to a slowdown in 2HFY25 due to regulatory

impact, weak market sentiments, and uncertain macroeconomic conditions. The

sustained volume revival seen in Mar’25 will support a stable growth trajectory

for brokers and exchanges as participation gradually rises. Mutual fund activity

is anticipated to remain stable, backed by industry efforts to spread awareness,

enhance financial literacy, and promote a long-term investment perspective—

factors that are likely to maintain stable performance for AMCs and

intermediaries like CAMS. Wealth managers are expected to witness strong

inflows and positive MTM impact going forward.

Insurance



The general insurance industry continues to experience a low growth trajectory

due to 1) weak infrastructure investments, 2) slow credit growth, 3) weak trends

in motor sales growth, and 4) 1/n regulation. ICICIGI has successfully gained

market share by focusing on profitable businesses and easing competitive

intensity. Profitability has remained strong due to conservative reserving in the

past. STARHEAL’s recent pricing actions may provide some relief from rising

medical inflation and hospitalization trends, potentially bringing the claims ratio

down gradually over the next few quarters. For life insurers, while a slowdown

in ULIP momentum hurt growth, VNB margin witnessed an expansion across the

industry, led by 1) increased sales of ULIP products featuring higher sum assured

and rider attachments and 2) growth recovery of non-linked products. Life

insurance companies should see an improvement in VNB margins as the product

mix shifts toward retail protection and annuities. Recovery in auto sales and

capex are the key monitorables for growth prospects among general insurance

players.

Healthcare



Companies indicated prolonged weakness in the acute therapies within the

domestic formulation segment. This is largely driven by unfavorable seasonality

and improved hygienic conditions. This is impacting the overall industry growth

as well because of the dominant share of acute therapies (almost 65% of IPM).

Companies were bullish on the growth prospects of chronic therapies.

Specifically, companies are gearing up for the launch of products in

diabetes/obesity. They have tied up with manufacturers and are focusing on

marketing activities. On the CDMO front, while companies witnessed a higher

number of inquiries from innovator pharma companies, they are yet to see any

conversion to business. On the US generics side, companies indicated

competition in certain high-value products over the near to medium term, and

this would keep the growth under check. Companies highlighted building

product pipelines to offset this impact. For the regulated market business,

companies are also enhancing their product pipeline in the biologics space. In

June 2025

Voices | 4QFY25

the rest of the world market, companies faced currency headwinds which

impacted 4QFY25 growth to some extent. Companies with surplus cash on the

balance sheet are looking forward to inorganic growth opportunities as well.

Companies await clarity on the policy front for the US market. While there could

be moderation in earnings in the near term because of the competition,

management teams were very positive about the overall prospects in the

Pharma space in the next 3-5 years.



Hospital companies showed consistent improvement in occupancy with a

moderate increase in realization per patient. In addition to better efficiencies at

existing sites, companies indicated their focus on adding beds through

Greenfield as well as the brownfield approach.

Logistics



In the logistics sector, demand remained depressed in 4QFY25, owing to a

slowdown in spending, high inflation impacting MSME clients, and lower e-

commerce volumes. E-commerce and express logistics companies reported poor

development throughout the quarter, owing to low volumes and fierce

competition. However, multimodal logistics firms outpaced pure-play freight

operators and express logistics providers. Management anticipates operational

performance to improve in FY26, with decreased fuel costs and stable operating

expenses. Over time, enterprises remain hopeful about sector growth, fueled by

e-way bills, GST implementation, the construction of Dedicated Freight Corridor

(DFC) routes, and increased access to key ports, all of which are expected to

promote a shift towards the organized sector.

Metals



In the Ferrous Metals space, management teams across companies pointed to 1) a

strong of NSR improvement with a steady decline in coking coal costs and 2) the

development of captive raw material mines. Although a better performance from

Indian operations was backed by better volumes and muted costs in 4Q, offsetting

the weak NSR impact. Management believes that global uncertainties might pose

challenges to international steel, base metal, and raw material prices in the short

term. In the non-ferrous space, management guided the CoP to increase, led by

rising scrap prices, rising domestic auction coal, and trade tensions, which may be

offset by favorable pricing conditions leading to sustained margin in the coming

quarters.

Oil & Gas



OMCs:

While various management teams expect marketing segment

performance to remain strong, steady 4Q refining performance might continue

as spreads improve in 1QFY26. In 1Q, various management teams expect a QoQ

reduction in LPG under-recovery as propane prices soften. CGD management

teams remain optimistic about robust CNG & D-PNG volume growth and steady

EBITDA/scm margin amid lowering raw material costs. However, GUJGA expects

1Q Morbi volumes to remain weak. GAIL: While the management remains

optimistic about robust long-term transmission volume growth, current volumes

remain soft as power-led demand remains subdued. ONGC and OINL also

forecast strong production growth due to KG-98 and NRL, respectively.

June 2025

Voices | 4QFY25

Real Estate



The real estate companies witnessed a shortfall in launches in FY25, mainly due

to approval delays, which is expected to spill over into FY26, indicating the

potential for strong sales in the current financial year. Real estate developers

remain optimistic about sustained demand in the coming years. Average growth

in price realization was 15% in FY25, with a similar increase going forward.

Approval processes are gradually improving, paving the way for a healthier

launch pipeline in FY26. Companies are also actively focusing on land acquisition

to strengthen their future project pipeline.

Retail



Retail:

Demand for apparel and footwear companies remained modest in the

4QFY25 due to continued economic headwinds, with regional slowness in South

India, particularly AP and Telangana, pulling down overall performance.

However, 2HFY25 showed some sequential improvement due to a normalized

holiday calendar, a positive wedding season, and softening base effects.

Retailers such as Vedant Fashions, SHOP, and Metro Brands are hesitant about

store expansions due to rising rents; however, ABLBL has forecast strong retail

expansion in FY26.



Jewelry:

The jewelry companies continued to deliver robust sales growth as the

demand environment was stable during the quarter, despite macro

uncertainties and higher gold prices. Moreover, the Akshaya Tritiya festival

showed strong demand trends, with customer sentiments remaining largely

upbeat. The solitaires segment witnessed a healthy recovery, supported by

increased traction in lower carat weights. Jewelry companies saw high volatility

in GML rates in 4Q due to the US tariff volatility; however, the companies have

begun to stabilize now.



QSR:

Consumption trends remain soft due to macro inflation and an urban

slowdown, although the companies expect a gradual recovery in dining-out

frequency. Eating-out frequency largely remained unchanged in 4QFY25. With a

favorable base, same-store sales growth (SSSG) showed an uptick (ex-KFC). The

revenue gap between dine-in and delivery has narrowed, driven by increased

dine-in footfall traffic. However, weak underlying growth continued to impact

operating margins, exerting pressure on restaurant and EBITDA margins for

most brands. Enhancements in value-focused menu offerings and promotional

activities have increased footfalls. While delivery channels remain strong, dine-

in is showing a gradual improvement. Store additions continued at a healthy

pace during the quarter, and companies have maintained their store expansion

guidance for FY26.

Technology



The management teams of IT services companies remain cautiously optimistic,

though they acknowledge persistent macroeconomic challenges weighing on

overall demand. Discretionary spending, which showed signs of recovery earlier

in FY25, now appears to be stalling as clients adopt a wait-and-watch stance due

to trade tensions and uncertainty around the Fed’s rate trajectory. BFSI remains

relatively resilient, providing a buffer amid weaknesses in Manufacturing, Retail,

and Healthcare verticals, which are facing headwinds from policy shifts and a

weaker macro backdrop. With continued focus on cost optimization, stable deal

inflows, and early signs of demand stabilization in select verticals, management

teams are hopeful of a better growth trajectory as FY26 progresses.

June 2025

Voices | 4QFY25

Telecom



Residual benefits of the tariff hikes were offset by two fewer days QoQ in 4Q.

With a higher share of subscribers on longer-duration plans, RJio expects some

more benefits from tariff hikes to flow through over the next two quarters.

Bharti and Vi both continue to advocate for a change in pricing construct from

high daily data allowances to usage-based plans, wherein higher data-

consuming users should be charged more. On the fixed broadband, both Bharti

and RJio have highlighted high potential and have accelerated FWA rollouts.

Utilities



Various management teams highlighted a moderation in FY25 power demand

growth to ~4%, due to a high base and favorable monsoon. However, peak

demand is projected to surge to 278GW from 250GW last May, with long-term

peak demand reaching 458GW by 2032. On the thermal front, the government

aims for nearly 80GW of thermal capacity by 2032, including 29GW under

construction (11GW due soon), 19GW awarded, and another 36GW in the

planning stage. For BESS, viability gap funding will support 9 GW by 2027, scaling

to 47 GW by FY32. Management teams expect the wind sector to add 6GW/7–

8GW in FY26/FY27 and 9GW annually thereafter, with the repowering of old

sites gaining momentum post-FY26. The draft RLMM policy is expected to boost

the domestic wind supply chain. On the transmission front, the National

Electricity Plan projects over INR9t in transmission projects by FY32, with INR3t

already allocated and the rest to be bid out by FY29, implying increased bidding

over the next four years. For power exchanges, amendments to Late Payment

Surcharge (LPSC) rules now require state government generating stations to

offer un-requisitioned surplus (URS) power on exchanges, and the management

teams expect liquidity to improve once similar mandates are extended to

private generators.

June 2025

AUTOMOBILE | Voices

Key takeaways from management commentary

AUTOMOBILES



In the 4QFY25 earnings calls, management widely suggested a moderation in domestic demand for most

segments, except tractors. For both PV and CVs, management expects growth for FY26 to be under 5%. 2W

OEMs were a bit more positive and pegged growth expectations at 6-7%. Tractor OEMs hope to see high single-

digit growth for FY26E given positive rural sentiments. Further, the export outlook continues to be uncertain

given the ongoing tariff-led headwinds. Ancillary players with global exposure are seeing an uncertain demand

environment given the global headwinds in key markets. Management also cautioned about a gradual rise in

input costs from 1Q onwards.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Demand outlook

Other key takeaways from the call



FY26 outlook:

Management expects each of the CV



Management has indicated that it expects steel

segments to post growth in FY26, led by favorable

prices to inch up from 1Q onward (by INR3-5

indicators. Among segments, management expects

per kg) and further in 2Q due to the safeguard

Ashok

bus, tractor, trailer, and tipper to drive industry growth

duty imposed on steel. Further, truck prices are

Leyland

in FY26.

likely to increase by ~0.5-2% due to the AC



Management indicated that it reduced dependence on

cabin norms to be implemented from Jun’25

MHCVs over the last few years. The non-MHCV

onward.

business now contributes to about 50% of AL’s



Management maintains its medium-term

revenues with much better profitability; hence,

targets, which include achieving a 35% market

cyclicality in business revenue and profitability reduced

share in MHCVs and mid-teens margins among

over the years.

others.



Management expects the 2W industry to post 5-6%



Management expects input costs to rise 1%

YoY growth in FY26, largely driven by the 125cc+

QoQ in 1Q. It has passed on about 30-50% of

segment. On the back of its new launches, BJAUT

this increase to consumers. Further, the

Bajaj Auto

would look to recover its lost market share in the

currency is now a headwind for BJAUT as INR is

125cc+ segment and would target to get closer to the

now appreciating relative to USD.

market leader in this segment by the end of FY26.



While BJAUT has done well in 2W EVs and now



Management expects exports to grow at 15-20% YoY

is a market leader with a 25% share, supply

even in FY26, led by strong growth in Latin America

curbs from China on rare earth metals remain a

and the Middle East and an expected revival in exports

lingering concern going ahead.

to KTM in 2HFY26.



RE expects volume growth to continue in FY26 as well.



RE continues to focus on absolute growth in

While rural areas continue to see positive sentiments,

profitability. For the same reason, their focus

they are now seeing initial signs of recovery in urban

has been to provide value-added features to

Eicher

regions, which would bode well for players like RE.

customers at affordable price points.

Motors



In exports, RE remains among the top 4 brands in



Margin improvement at VECV has been a result

many countries globally in the middle-weight

of multiple factors, such as better price

motorcycle segment. For instance, it is No. 1 in the UK,

management, operating leverage benefits, and

No. 2 in Argentina, and No. 3 in Brazil in this segment.

reduced discounts.



Outlook:

Management expects the 2W industry to



HMCL has lined up two new affordable EVs,

post 6-7% YoY growth in FY26, largely similar to FY25.

both of which are likely to be launched in

Management also expects to outperform industry

Jul’25, to fill up the product gaps. These new

Hero

growth in FY26, backed by its upcoming new launches.

products will help to accelerate EV growth in

MotoCorp



In FY25, HMCL exports grew 43% YoY over a low base,

the coming quarters. HMCL believes at a 25-

2x of industry growth. The company remains

30k monthly sales run rate, they can achieve

aggressive on export growth and is confident of

break-even in the EV business. It is, however,

outperforming industry growth going forward.

likely to be a couple of years away, as per the

management.



HMI targets to launch 26 products (a combination of



Management expects to post 7-8% YoY growth

new and refreshes) by FY30, of which 20 would be ICE

in exports in FY26E.

and six would be EVs.



HMI plans to launch new eco-friendly

Hyundai



The product launches are expected to commence once

powertrains like hybrids in the coming years.

HMI starts production at its new Pune facility, which is

June 2025

AUTOMOBILE | Voices

expected by 3QFY26. It targets to launch almost eight

models during FY26-27E.



M&M



Maruti



Tata Motors



TVS Motor

Co.



BIL



BHFC

Auto: Management remains optimistic about



sustaining outperformance to the UV industry in FY26.

Incremental growth is expected to be driven by the

full-year benefit of launches, including the Thar Roxx

and XUV 3XO, along with contributions from recently

launched EVs.

Tractors: Management has guided for high single-digit

growth in the tractor industry for FY26. It also expects

to outperform the industry, supported by a favorable

market mix (with good demand seen in its strong

markets of South and West).

Demand outlook:

The industry is likely to grow at a



modest 1-2% for FY26E, and MSIL expects to

outperform the same, aided by its new launches. MSIL

has lined up two new launches: the recently unveiled



e-Vitara and one more SUV.

Exports:

MSIL expects to post at least 20% YoY export

growth for FY26. The company targets to sell 70k units

of e-Vitara in FY26E, the bulk of them in exports.

India CV: Given favorable demand indicators,



management expects the CV industry to post single-

digit growth in FY26. Within this, management expects

MHCV and bus segments to do better than ILCVs and

SCVs.

Indian PV: Industry demand for FY26 is likely to remain

moderate, as in FY25. TTMT would target to

outperform the industry on the back of its new

launches, which include: 1) a mid-cycle upgrade of

Altroz to be launched this month and the recently

launched upgrade of Tiago; 2) a full-year ramp-up of

Curvv and Nexon CNG; 3) Safari and Harrier with multi-

powertrain options, including gasoline; 4) Sierra ICE

launch; and 5) Harrier + Sierra EV launch.

Domestic:

Management expects the 2W industry’s



growth rate to remain moderate in Q1, given the high

base of last year. However, with overall demand

drivers remaining positive, management expects 2W

growth in FY26 to be similar to that of FY25.

International: Management expects 2W exports to

post healthy growth in FY26, led by strong demand

from Latin America and a recovery in demand from Sri

Lanka and Africa.

Management earmarked an ambitious five-year



roadmap to scale up revenue by 2.2x to INR230b by

2030. This would be driven by 1) continued

outperformance in its core OHT segment (70%

contribution estimate by 2030), where it targets to



move to an 8% share by 2030 from 6% currently; 2)

10% contribution from sales of carbon black to a third

party and 3) a foray into TBR and premium PCR

segments, which is expected to contribute to 20% of



revenue by 2030.

Management has refrained from providing any growth



guidance for its export business (30% of consolidated

revenue) given the volatility and lack of visibility

caused by the global tariff situation.

Following recent launches, MM has outlined a

product roadmap to launch seven ICE SUVs

(two mid-cycle enhancements), five BEVs, and

five LCVs (two of which will be EVs) by 2030.

For CY26, it targets to launch three ICE SUVs

(two mid-cycle enhancements), two BEVs, and

two LCVs (one of which will be EV in the <3.5T

segment). Management has confirmed that the

new SUV expected in CY26 will not be a five-

seater.

Overall, next year's growth is likely to be driven

by exports, SUVs, and a further increase in CNG

penetration.

While demand growth drivers are in place, one

needs to be cognizant of rising cost pressures,

such as an increase in steel costs that is

anticipated in the coming quarters.

JLR: It is currently facing significant uncertainty

due to the tariffs levied by the US globally on

automobiles. While the US-UK FTA has been a

welcome agreement and helps to lower tariffs,

the tariff on JLR-made vehicles exported to the

US is expected to still rise to 10% from the

current 2.5%. Further, in the absence of any

trade deal between Europe and the US, JLR

cars produced in Slovakia (Defender and

Discovery) could face a 27.5% duty when

exported to the US. Given the multiple

headwinds, management has refrained from

giving any guidance for JLR for FY26 and

beyond.

Capex: For FY25, capex stood at INR18b, while

investments in subsidiaries amounted to

around INR21b. For FY26, investments in

subsidiaries are likely to remain at similar

levels, primarily directed toward TVS Credit,

Norton, and the e-bike subsidiary.

For this ambitious growth, BIL has earmarked

INR35b capex over the next three years, in

addition to the INR5-7b capex that would be

invested in the core segment.

Management refrained from giving any growth

guidance for its core global OHT segment given

the adverse macro environment globally in its

key regions.

Management provided margin guidance at 25%

for its core OHT segment.

In this situation, management has indicated that

they would focus on improving its consolidated

profitability by: 1) evaluating options for the

steel forging business in Europe, 2) improving

June 2025

AUTOMOBILE | Voices



In the domestic market, BHFC is likely to grow largely

in line with the industry in both PVs and CVs. In

domestic non-auto, the scale-up of the defense

business and opportunities for component supply to

small nuclear reactors would be key growth drivers.

Management has guided for 15-20% YoY growth in

defense business in FY26.

operational performance in Al business leading

to meaningful reduction in losses, 3) leveraging

their manufacturing footprint in North America

to garner new business, and 4) reducing losses in

e-mobility vertical. Further, the integration of

AAM India is expected to be completed in FY26

after which they will target to leverage that

platform to grow their product portfolio.

Amara Raja Energy

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Click below for

Detailed Concall Transcript &

Results Update

Result highlights



Consolidated revenue grew 5% YoY to INR30.6b, of which 95% still comes from

LAB.



LAB business grew 4% YoY to INR29b in 4Q.



All major segments, except telecom and exports, saw good growth.



In the domestic 4W segment, OEM aftermarket grew 9% and OEM grew 15%.

However, exports declined 10% YoY due to weak demand in the APAC region.



2W volumes rose 13% YoY, led by similar growth in both OEM and aftermarket

segments.



Home invertor segment also posted healthy growth of 17% YoY.



Lube business clocked revenue of INR400m in 4Q. Lithium-ion packs that it

supplies to the telecom segment now account for about INR1b in revenue.



Within industrials, the UPS segment saw healthy growth in 4Q.



However, telecom segment saw 15% YoY decline due to a shift in preference

toward lithium ion.



New energy business also saw good growth in 4Q due to increased demand

from ESS for the telecom segment.



Revenue from chargers and battery packs to EV and ESS saw 35% YoY growth in

4Q. However, demand for 3W battery was muted in 4Q due to weak demand

from OEMs.



4Q margins were impacted by: 1) an increase in prices of non-lead alloys like

antimony; and 2) challenge in power costs. ARENM faced another headwind

from a delay in the settlement of power generated from own solar plants.



Apart from these factors, trading revenue was high in 4Q, as it stocked up to

have enough supply for the upcoming summer season.



Beyond these, ARENM has increased its provisions on some employee-related

expenses and warranty in 4Q.



For FY25, revenue grew 10% YoY, with LAB seeing double-digit growth. Exports

grew more than 12% for the year.



However, the new energy business posted flat sales growth in FY25 as some

OEMs that it supplies to saw weaker demand and it also exited from certain low-

margin segments. Supplies to ESS division picked up from 2H and management

expects this momentum to sustain in FY26 as well.

Auto demand outlook



ARENM’s market share in 4W OEMs stands at 35%.



Based on its discussions with OEMs, ARENM expects flat demand for 4W OEMs

at the moment with an expectation of a pickup in 2Q.

June 2025

AUTOMOBILE | Voices

Even in 2W segment, volumes were actually down so far in 1Q, which ARENM

hopes to pick up in 2Q.

Outlook on margins



Management has indicated that the issue of higher power costs and higher non-

lead alloy costs is likely to persist at least for the next couple of quarters.



ARENM would look to offset this impact partially once its tubular battery plant

ramps up (which would help reduce the trading mix) and its batter recycling

plant ramps up. However, the battery breaking operating is expected to

commence only from 2Q-3QFY26. It has commenced the battery refining

operation at this stage. This lead recycling plant has an initial capacity to recycle

up to 50k MT of lead annually, which would be ramped up to 100k MT in the

coming years.



It has also embarked on few digitization initiatives, which helped increase its

throughput and increase battery capacity by 6m units pa without any capacity

addition.



To offset the cost increase, it has taken a 2% price hike in Apr’25 across

segments.

Update on New Energy business



New Energy business posted flat revenue growth in FY25 as its current OEMs

have lost market share and ARENM has exited some of its loss-making

businesses.



ARENM currently has two battery-pack assembly facilities with a combined

capacity of 7GWh. It is currently supplying battery packs to telecom, UPS and

LCV applications.



Beyond this, ARENM intends to start supplying to energy storage players, like

data centers and high-voltage packs for PVs and buses.



Its customer qualification plant is set to SOP in 2Q-3QFY26. It expects its first

gigawatt factory to come on-stream in 1HFY27. This will be the first phase of the

4GWh battery plant, which would eventually reach 16GWh by 2030, based on

current plans.



Among the current challenges, Chinese competition is extremely aggressive and

the current pricing offered by some of the China suppliers is extremely

competitive. For instance, LFP cells are being offered at USD50 per kw hr (even

at 45 in a select few instances). NMC cells are being offered at USD60/kw hr.



This sharp downward trend in pricing would be one of the critical determinants

of future investment decision in this business



ARENM has so far invested INR8.5b in this project, of which INR3.5b was

invested in FY25. ARENM targets to invest about INR10b in FY26 in this business.



Management continued to refrain from giving any break-even guidance on this

project and indicated that to achieve break-even in this business, it would need

to scale up to at least 8-10GW hr capacity in this business to get some scale

advantage.



The focus area is to get long-term suppliers in place for this business.



Capex guidance



ARENM has invested about INR12b in capex at a consolidated level in FY25.

However, about INR8b of this investment has gone to LAB for the tubular

June 2025

AUTOMOBILE | Voices

battery plant and the lead recycling plant. The balance INR4b has been invested

in the New Energy division.

Management said that in FY26, it plans to invest almost the same amount as in

FY25 (about INR12b). However, the bulk of this investment would go to the new

energy business for the customer qualification plant, the first phase of the giga

factory and R&D facility in Hyderabad.



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Results Update

Standalone update



4Q volume growth was flat YoY. While replacement segment posted single-digit

growth, OEM and exports declined YoY.



While overall truck segment volumes remained flat, replacement segment

posted 9% growth, which was offset by a decline in OEM revenue.



Similarly, PCR replacement growth stood at mid-single digits, while OEM

revenue declined in double digits.



Management admitted that their performance has been below par compared to

peers and also been weaker than their own expectations. They are in the midst

of taking corrective measures to address this and expect to resolve this

underperformance from 1QFY26 onward.



Management has also clarified that their underperformance has been in OEM

and exports, while they continue to do well in replacement segment, both TBR

and PCR.



One of the factors that led to this underperformance was that they had

purposely exited a few SKUs for strategic reasons within OEM segment. For

instance, demand in tractor trailer market is strong but APTY has chosen to exit

this segment due to low-quality products. They now have the right SKUs to

address this demand.



Given their underperformance recently, management expects to have lost some

share in the OEM segment, both PCR and TBR.



They have also underperformed in exports and are taking corrective actions to

recover lost ground here.



Other expenses have been higher in the recent past partly due to a few one-offs

and they are likely to normalize in the coming quarters.

Outlook

–

Standalone business



Management expects its issues related to underperformance to get resolved

from 1Q onward. They hope to revive lost ground relative to peers in the coming

quarters.



On input costs, while they are expected to decline in the coming quarters,

management expects the raw material basket to remain stable QoQ in 1QFY26.

From 2Q onward, benefits of a reduction in crude-led derivatives are likely to

reflect in financials. However, management believes that prices of natural

rubber may not come down soon as we will shortly enter the lean period for

rubber (rainy season).



On the tax rate, APTY still has some MAT credit to be availed and hence the shift

to the new tax regime is likely to be a couple of years away.



Management has clarified that its exposure to the US market is currently around

USD100m worth of revenues and hence, to that extent, it would see a limited

June 2025

AUTOMOBILE | Voices

impact of changes in tariff regulations in the region. The US remains a major

importer of tyres (2/3rd requirement). The competitive landscape in the

industry is likely to change depending upon which region is expected to strike a

deal with the US on favorable terms. APTY continues to await clarity on this

matter.

Europe business update



Even in Europe, APTY has underperformed peers over the last couple of

quarters.



It has posted a mid-single-digit decline in volumes in 4Q.



APTY was constrained by capacity in Europe as demand outstripped its

expectations. Given that UHP/UUHP demand remained strong, it sacrificed non-

UHP demand for summer tyres due to capacity constraints.



Capacity expansion is underway in Hungary (4k tpd for PCR) and is likely to be

commissioned by FY26 end.

Outlook - Europe



Management expects demand to pick up in the coming quarters in Europe.



It has recently announced its intention to shut production at its Netherlands

plant by 2026. This plant had a capacity of 0.5m PCR tyres out of the 6mn tyres

produced in Europe.



It has started the regulatory procedure around this and is likely to proceed with

the plan once all approvals are in place, which is likely to take a few quarters.



APTY does not expect any material revenue loss due to this closure as it expects

the deficit in supply to be filled up from the upcoming capacities in both

Hungary and India.



Further, given that conversion costs in Hungary are almost 1/3rd of costs in the

Netherlands, APTY expects its operational performance to structurally improve

in the coming years in Europe.

Other highlights



APTY has reduced its capex guidance for FY26 to INR15b from the earlier

INR20b. It intends to increase the AP plant PCR capacity by 4k tpd and set up a

brownfield plant in Hungary for 4k tpd.



TBR utilization stands at 82%. Given this and the relatively muted demand

macro, management does not expect the need for further capacity expansion

for three years in India TBR.

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Detailed Concall Transcript &

Results Update

Outlook



Management expects each of the CV segments to post growth in FY26, aided by

favorable indicators, including stable freight rates, fleet operator profitability,

and aging of the fleet.



However, management expects growth to pick up from 2Q over a low base as

last year 1Q was a high base.



Management expects the bus segment to continue to do better than other

segments. Within trucks, tractor-trailers are expected to outperform other

segments. Also, tipper segment, which has not done well in FY25, is likely to

surprise positively this year given that mining and construction activity is back

on track.

June 2025

AUTOMOBILE | Voices

Management has indicated that it has reduced dependence on MHCVs over the

last few years. The non-MHCV

business now contributes to about 50% of AL’s

revenue with much better profitability; hence, the cyclicality in business

revenues. As a result, profitability has reduced over the years. Contribution for

non-MHCV business is high and can take care of most of the fixed cost of the

company; hence, AL can now break-even despite low MHCV volumes, unlike in

the past. This is also illustrated by the fact that while MHCV sales remain static

at 114-116k units p.a. over last three years, their margins have improved from

8% to 12.7% in FY25

–

aided by higher growth in non-MHCV business and

supportive input costs.



While AL expects spare-parts business to continue to post healthy growth, it

expects defense revenue (currently at around INR10b) to double over the next

2-3 years, based on the healthy order backlog.



Management has indicated that it expects steel prices to inch up from 1Q

onward (by INR3-5 per kg) and further in 2Q due to the safeguard duty imposed

on steel. Management expects the steel cost pressure to be elevated for 1H and

this is likely to normalize from 2H onward. Further, truck prices are likely to

increase by about 0.5-2% due to the AC cabin norms to be implemented from

Jun’25 onward. AL would take a measured approach to pass on the impact

rising costs based on a competitive environment.



Management indicated that it is in a substantially strong position from a balance

sheet perspective relative to past CV cycles today. It now has a net cash of

INR9.5b vs. net debt of INR2b in FY24. Hence, its ability to invest in growth

opportunities is much higher.



FY25 capex stood at INR9.54b and it invested INR2b in subsidiaries in the year.

AL targets to invest around INR10b in capex for FY6. It would look to invest

about INR1-2b in Switch India, INR3-4b in Ohm Mobility, and it may need to

invest a bit in HLFL as well.



Management continues to maintain its medium-term targets, which include

achieving a 35% market share in MHCVs and mid-teens margins, among others.

Update on exports



Exports grew 29% in FY25 with improving margins.



AL would look to set up an assembly line in each of its key target markets.



It wants to set up an assembly line in Africa.



AL is also scouting for dealer partners in Indonesia and Thailand to ramp up

export base.

Update on Clean fuel trucks



The penetration in EV trucks is under 1% currently. However, within this, AL has

the highest volume of EV trucks running in India today.



It also has the widest range in EV trucks after the launch of Boss truck (14-19 T

GVW) last year and 55T tractor trailer recently.



LCV EV adoption is also expected to pick up rapidly to reach 20% by FY30-32. AL

has already launched its e-LCV from Switch India. However, the market has not

picked up on expected lines as the Govt withdrew the PM e-drive incentives on

LCVs.



AL continues to work on Hydrogen ICE technology and is also expected to launch

LNG products soon.



June 2025

AUTOMOBILE | Voices

Update on Switch



In 4Q, Switch India sold 287 buses and 200 e-LCVs with 12% EBITDA margin. For

FY25, this entity achieved 6% EBITDA margin.



Switch India currently has an order backlog of 1,800 buses.



The next target for Switch India is to be PAT positive in the coming years; hence,

it moves to become self-sufficient from the funding perspective.



It is currently looking to restructure Switch UK by shifting manufacturing

operations elsewhere. This will help to reduce Switch UK losses of GBP2-3m on a

monthly basis.

Update on Ohm Mobility



It has about 650 buses in operation with 98% uptime.



It is expected to add about 1,700 buses in operation in FY26, partly from the

order backlog in Switch India and the rest from new orders.



Ohm continues to operate at healthy double-digit IRR, as per management.

Update on Hinduja Leyland Finance



AUM has increased 25% YoY to INR 617b. While the standalone AUM has grown

by 24% YoY to INR480b, the same for Hinduja Housing Finance has grown 31%

YoY to INR140b.



Revenue has grown 35% YoY to INR62.8b and PAT has grown 21% YoY.



Asset quality is good with GNPA at 3.5% and NNPA at 2.1%, improved YoY.



HLFL listing has got delayed as it awaits a few critical regulatory approvals.

Other highlights



AL has added 108 MHCV touchpoints and 106 in LCVs, taking the total to 1,889

as of FY25 end. Most of these have been added in North and East markets to

gain share.



AL ranks No 1 in dealer satisfaction survey in domestic MHCVs and No 2 in

customer and sales satisfaction index.



AL has seen a sharp reduction in working capital, led by: 1) reduction in finished

goods inventory to around 7k units from an avg of around 9k units in prior years,

2) started moving to cash-and-carry model by reducing credit available to

dealers. It is now shifting to a pull-based inventory replenishment model, which

is expected to further help reduce working capital needs going forward.



With a net cash position and reduced debt, both interest and other income are

expected to move favorably in the coming years.

Bajaj Auto

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Results Update

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Result highlights



Export revenue stood at USD470m and spare parts revenue was INR15.7b in 4Q.



Management has indicated that the financial performance of Chetak has

substantially improved in the last 12-15 months and the 2W EV segment is now

near EBITDA break-even, post PLI accruals. Overall, EV revenue stood at INR55b

in FY25. Its EV pool is now marginal profitable vs. INR1b in losses last year. This

was driven by lower losses in Chetak and the ramp-up of 3W EVs.



BJAUT delivered FCF of INR65b after investing INR7b in capex for FY25. It has

also invested INR22b in BACL in FY25.



It has a healthy cash and cash equivalent balance of INR170b.

Domestic motorcycles update

June 2025

AUTOMOBILE | Voices

Key issues BJAUT has seen in ramping up Freedom sales are: 1) anxiety of

customers of not having enough CNG pumps in the vicinity, 2) pumps often do

not have right pressure to fully fill up the tank, thereby hurting optimum range

of the bike. Management has indicated that this bike continues to see strong

demand in regions with good CNG density like Delhi and Kerala, where its

penetration is almost 10-11%. Now it has a fair understanding of which regions

to focus on to ramp up the acceptance of this bike going forward.



Management expects the industry to post 5-6% YoY growth in FY26, largely

driven by 125cc+ segment.



BJAUT has seen market share decline in 125cc+ segment in FY25 to 24% from

26% in FY24.



Management has indicated that it has a strategy in place to get its market share

back on track in this segment. It has already launched six new Pulsar variants in

4Q within 150-200cc segments with improved features. It also expects to

resume a focused push for Freedom motorcycle in regions with good CNG

network for long distance riders. Further, it plans to launch an entry-level 125cc

motorcycle later in the year. It has also recalibrated prices of some products

based on competition benchmarking post OBD2. BJAUT intends to put in place

marketing campaigns on both these initiatives in coming quarters. On the back

of these initiatives, it would look to recover lost market share in the 125cc+

segment and would target to get closer to the market leader in this segment by

the end of FY26.

2W exports



Exports grew 20% YoY in FY25.



The top 30 overseas regions for BJAUT, which contribute to 70% of emerging

markets, grew at a healthy pace of 26% YoY in FY25. In these regions, BJAUT

outperformed and posted 31% YoY growth in FY25.



In Latin America, which has emerged as the largest emerging market, BJAUT

posted 18% growth with a rich mix: 65% volumes coming from Pulsar and

Dominar segments.



Even in Brazil, BJAUT sold 7k units in 4Q, better than FY24. It commenced

production of CNKD plant in Brazil with a capacity of 20k units p.a. in Jul’24.

BJAUT now targets to ramp up to 40k units by Dec’25.

2W EVs



Market share of Chetak increased to 25% in 4QFY25 from 13% in 4QFY25,

making BJAUT the market leader in 2W EVs. This is driven by the strong

acceptance of its 35 series models.



The launch of the 3502 series has helped improve margins. It expects to further

consolidate its position in this segment with the launch of the 3503 series in

May’25.



BJAUT now sells Chetak in 310 exclusive experience centers and over 3k touch-

points across India.



Demand for Chetak is on an uptrend, though there are supply chain issues

caused by China’s curbs on the export of rare earth materials globally. While

China notified this rule in Apr’25, BJAUT has a process in place to get the

requisite certifications to confirm that the end use of these materials will not be

for military applications. The government has so far cleared around 30

certificates, which have been sent to China to see if these are appropriate. The



June 2025

AUTOMOBILE | Voices

industry will get a sense of the exact approval time it would take to get these

certifications in place, once these are cleared by China.



Given that China controls almost 90% of the rare earth metal supply chain,

scouting for alternate sources is being ruled out at this stage.



Management indicated that it has requisite supply of these materials until June

end and any further delay in clearing these certificates may lead to disruption

for EV production in the near term.

Update on domestic 3Ws



Management remains positive about the long-term outlook for this business

given the enormous need for last-mile mobility in the country.



BJAUT has a dominant 75% market share in the ICE 3W segment.



In e-autos as well, BJAUT saw 60% YoY growth in FY25 and doubled its market

share to 33% in FY25. It has now become the market leader in this segment,

driven by the good acceptance of its Go-Go brand in e-autos.



It targets to launch e-rik

by Jul’25 to tap the 40k

per month e-rik industry.



BJAUT also targets to launch a lithium-ion based vehicle, which is just 10% of the

market today. However, it would target to expand this penetration by launching

much better and reliable options for the consumer.

Outlook on input costs and currency trends



In 4Q, noble metal prices surged, though they were offset by softness in steel

and aluminum prices. Similarly, nickel and lead prices saw some inflation, while

rubber and ABS prices were soft. Overall, input costs remained stable QoQ in

4Q.



However, management expects input costs to rise in 1Q due to a rise in

aluminum prices. Further, it has passed on the OBD2 costs to customers.

Overall, it expects input costs to rise 1% QoQ in 1QFY26.



It has so far taken pricing action, which covers up to 30-50% of the cost increase.



Further, currency is now a headwind for BJAUT as INR is now appreciating

against USD.

Update on KTM



In order to address acute liquidity challenges in KTM business and enable a

structured revival of the brand, BJAUT has outlined a set of strategic

interventions, which include: 1) the proposed equity acquisition by BJAUT of a

controlling stake in PBAG (for around EUR80m) and therefore, in PMAG/KTM

(upon receipt of regulatory approvals); 2) debt package totaling EUR800m to

address liquidity needs to meet creditor obligations pursuant to the approved

restructuring plan and fund the restart of operations. Of this, it has already

infused EUR200m in cash as shareholder debt to maintain continuity and revive

operations.



A fresh debt of EUR600m would

be provided to fund the payment of creditors’

quota and associated costs.



Following the receipt of requisite approvals, BJAUT will be committed to turning

around KTM operations.



Once these approvals are in, BJAUT will look to leverage some of the synergies

between the two companies, which include: 1) joint sourcing for key raw

materials, 2) a joint development program, and 3) extension of the current

agreement to include joint production of up to 900cc products.

June 2025

AUTOMOBILE | Voices

Other highlights



BJAUT Credit posted PAT of INR650m in FY25. AUM stood at INR95b. BJAUT has

so far invested INR24b (INR21b in FY25) in its financing arm.



Penetration of BACL is 40% in motorcycles and 50% in 3Ws.

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Results Update

BIL earmarks ambitious long-term growth target



Management earmarked an ambitious five-year roadmap to scale up revenue by

2.2x to INR230b by 2030. This would be driven by:

Existing OHT business

–

70% contribution



The company is currently setting up a 35K MT pa plant for the mining segment.

They are the only Indian player to have all steel radial technology up to 57

inches. This along with debottlenecking is expected to take their total capacity

to 425k MT pa (from the current achievable capacity of ~360k MT pa)



Apart from this, it is expanding a dedicated facility for rubber tracks, which is

likely to be operational by 2HFY26. They had already started a pilot project on

this and after getting a good response, they have decided to set up a dedicated

facility for the same. The company will look to ramp up its presence in the

rubber tracks market across agri, construction equipment, and Industrial

segments and also both in domestic and export markets.



These will help them reach about 8% market share in the global OHT segment,

from the current 6% or to INR161b by 2030 (at 9% CAGR)



This is despite the ongoing geopolitical challenges. In case the global macro

environment improves in the coming years, the company would be well placed

to ramp up to its earlier target of achieving a 10% market share of the global

OHT segment by 2030.

Continue to scale up the Carbon Black plant



BIL has approved the capacity expansion of its Carbon Black plant to 360k MT pa

from the current 200k MT pa. They would also look to increase power

generation capacity by 24 MW taking the total power generation capacity from

the Carbon Black plant to 64MW.



This expansion is likely to be complete by early 2026 and would help secure

access to high-quality Carbon grade for its internal use and also help boost up

internal power generation.



Its advanced Carbon Black plant is undergoing trial runs and is expected to

generate revenues from FY26 onwards.



After this, the improvement in Carbon Black sales to third parties is expected to

scale up to 10% of its five-year target or at INR23b.

Expansion into new segments of TBR and PCR in India



Surprisingly, BIL announced its venture into TBR and premium PCR segments in

India.



The company’s initial focus would be on the replacement segment.



It intends to start a pilot TBR launch in 4QFY26 from its radial mining plant. Their

experience in all steel radial technology in the OHT segment is complimentary

for the TBR business entry, as per management. BIL believes that it can create a

differentiation in the market and is fairly confident about its scale-up in this

business going forward.



The pilot for PCR tyres is expected to commence from Q3FY27



They target a revenue contribution of about 20% of their target by 2030 or

INR46b from this venture. By then, they would have around 5% market share

(based on current level of demand)

June 2025

AUTOMOBILE | Voices

Mr. Satish Sharma, who joined the company recently as Senior President for

Strategy and Business Development is likely to drive this foray. Mr. Satish has

over three decades of experience in the tyre industry and was previously with

Apollo Tyres



Further, it is already present in the 2W segment, albeit in a small way. The

company expects to ramp up its presence in two-wheelers as well going forward



Revenue from these new businesses is likely to ramp up towards the back-end

of the five-year guidance as it would focus on getting the building blocks (like

setting distribution network, testing products in the market, etc.) in place in the

initial years

Profitability guidance



Given its backward integration capability, and focus on niche PCR and TBR

segments, the company does not expect a material dilution to its margins going

forward.



Once all three businesses scale up, the company expects margins to be in the

range of 23-25% by 2030, while focusing on strong growth in absolute EBITDA.

This is as: 1) the new business will be a small proportion of overall revenues; 2)

it has a cost advantage relative to competition with backward integration; and

3) it would focus on niche premium segments in PCR and TBR.



Overall, BIL also does not expect a material dilution in returns in the long run.

Capex required



For these new projects, the company has announced a total investment of

INR35b over the next three years, which is likely to be front-ended



This would be apart from the INR5-7b regular capex on the existing core

business p.a.



The bulk of its capex needs is likely to be funded by internal accruals.

Demand outlook

–

core business



Management refrained from giving any growth guidance for its global OHT

segment given the adverse macro environment globally in its key regions.



Inventory continues to be at normal levels, as per the management.

Margin guidance



Rubber prices appear to have peaked out now in 4Q. They expect input cost to

be lower by about 1% QoQ in Q1FY26.



Freight rates are also stable currently.



Management has given margin guidance for its core OHT segment at 25%.

Impact of US tariffs



The tariff imposed on tyre imports into the US was an additional 10%, over and

above the existing 2.5-3.0%



The increase in tariff has been partially absorbed by OEMs and BIL without any

increase in costs to the end consumer.



Bharat Forge

Current Price INR 1,270



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Results Update



CV exports declined 12% YoY to INR 4.6b, largely due to weakness in NA Class8

market even as CV exports to Europe saw some revival after the lows seen in

3Q.

While PV exports were down 1.5% YoY, they have picked up well QoQ as

demand conditions in Europe improved slightly and some pockets of strength

emerged in Latin America.

Non-auto exports grew 13% YoY, led by contributions from HHP Engines and

Aerospace.

The aerospace sector’s contribution to industrial exports stands at

24% in 4Q and 14% in FY25.

June 2025

AUTOMOBILE | Voices

Domestic revenues declined 14% YoY, largely due to a 30% YoY decline in non-

auto segment. This was driven largely by the conclusion of some export orders

at KSSL.



The overseas subsidiaries posted improved performance in 4Q. The key highlight

was that the US subsidiary posted positive EBITDA margin (1.3%) for the first

time in many quarters.



BHFC has incurred a capex of about INR7.5b in FY25. Capex guidance for FY26

stands at INR5b, with very minimal capex required in the overseas subsidiaries.



For FY25, the standalone business posted 1% YoY decline in revenues to

INR88.4b. While domestic revenues grew 2% YoY, exports declined 4% YoY. The

key growth driver in FY25 was non-auto, wherein segments like defense,

aerospace and oil and gas posted healthy growth.

Outlook



With the potential deferment of emission norm changes in North America and

continued weakness in EU, BHFC expects the CV business to witness a decline in

FY26.



In FY25, PV export business consolidated its gains after a stupendous

performance in FY24. However, an unpredictable policy environment in the near

future can lead to lower discretionary spends impacting overall volumes in

North America.



The non-auto segment has seen 3% YoY growth in FY25, largely driven by

recovery in oil and gas segment and strong momentum in aerospace. BHFC

expects the momentum in Aerospace to continue over the next 2-3 years as its

new ring mill and machining facilities for Aerospace comes online in 2027.



However, management has refrained from giving any growth guidance for its

export business (30% of consolidated revenues) given the volatility and lack of

visibility caused by the tariff situation globally



In the domestic market, BHFC is likely to grow largely in line with the industry in

both PVs and CVs.



In domestic non-auto, the scale-up of the defense business and opportunities

for component supply to small nuclear reactors would be key growth drivers.

Management has guided for 15-20% YoY growth in defense business in FY26.



In this situation, management has indicated that they would focus on improving

the consolidated profitability by: 1) evaluating options for steel forging business

in Europe, 2) improving operational performance in Al business leading to

meaningful reduction in losses, 3) leveraging their manufacturing footprint in

North America to garner new business, and 4) reducing losses in e-mobility

vertical. Further, the integration of AAM India is expected to be completed in

FY26 after which they will target to leverage that platform to growth their

product portfolio.



BOSCH

Current Price INR 31,455



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Results Update



In 4QFY25, 2Ws and tractors continued to see good demand led by new product

launches and healthy rural demand. PV growth inched up a bit largely led by

SUV pick-up.

On the outlook, tractors are expected to post healthy growth in FY26E, led by

positive rural sentiments. Even the 2W industry is likely to post steady growth,

June 2025

AUTOMOBILE | Voices

fueled by positive rural sentiments and higher income in the hands of the

consumer. While CVs are expected to post gradual growth (the bus segment is

likely to continue to outperform), the low-tonnage segment is likely to continue

to see competition from 3W EVs. Further, PVs are anticipated to post modest

growth in FY26, led largely by SUVs.

The strong 16% YoY growth in revenue for 4Q was primarily driven by the

mobility business, which grew 14.9% YoY. Growth was also driven by the closure

of one large application service project in 4Q

Within mobility, the power solutions business grew 16.9% YoY, after-market

grew 7.9% YoY and the 2W segment grew 21.4% YoY.

Power solutions business growth was led by increased demand for diesel

components especially from the off-highway segment, and a rise in demand in

ECUs and VCUs.

The after-market demand was driven by increased demand for diesel systems

from OEMs and also from filters and spark plugs.

The 2W growth was led by exhaust gas sensors required for OBD2 norm

implementation.

BOS would continue to aim to grow ahead of industry growth aided by

premiumization trends in the industry wherein they would continue to look at

participating in opportunities in advanced technology products going forward.

The NOx sensor line at Bidadi is likely to scale up to 2.1m sensors by 2027. BOS

has indicated that this production line is made in India for global requirements

as well. However, BOS has not applied for a PLI incentive for this product.

Exports remain a high-priority business for BOS in India. It continues to export

spark plugs and injectors. With the new NOx line ramping up, the company

would start exporting these sensors in due course. While there are multiple

global headwinds currently, management expects exports to grow in FY26.

BOS has not bagged any new orders from 2W/3W EV OEMs. Within EVs, the e-

axles will be done within the listed entity. While it is in negotiations with many

OEMs for the same, the company has not won any new orders yet.

It has two major sister companies in India. The company buys Electronics parts

from one of these companies and supply to the market. This arrangement will

continue in EVs as well. The other company does chassis systems (brakes as

well) and it supplies the market directly.

On the Trem5 implementation deadline, management is yet to receive any clear

indication from the Government. However, based on its understanding, BOS

expects this implementation to be delayed.

The company continues to work with multiple OEMs on the Hydrogen engine

application in India and also in developing the ecosystem for the same.



CEAT

Current Price INR 3,708

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Results Update

Result highlights



Overall, volume growth in 4QFY25 stood at 11% YoY and 3.5% QoQ.



For 4Q, OEM grew in strong double digits (mid 20%) and replacement grew in

the high single digits on a YoY basis. However, exports have marginally declined

YoY due to the adverse macro environment.



On a YoY basis, within the replacement segment, TBR grew in double digits, 2W

in high single digits, and PV in mid-single digits.

June 2025

AUTOMOBILE | Voices

On a QoQ basis, the OEM segment has grown in the mid-teens, and replacement

and exports were flat.



For FY25, volume growth stood at 7%. While the replacement segment grew in

the high single digits, both OE and exports grew in the mid-single digits.



In 4QFY25, CEAT saw an ASP growth of 2% QoQ

–

led by a price hike and

improved mix. Management expects ASP to improve further in 1QFY26.



Gross margin improved 60bp QoQ due to marginally lower input costs and price

hikes taken in the 2W and PV segments.



Employee costs increased INR100m QoQ partly due to the ramp-up of the

Chennai TBR facility and also due to improved demand.



While CEAT has showcased good cost control in other expenses, one has to

remember that the same would see a spike in Q1 due to IPL expenses.

Growth outlook



Post a weak demand in FY25, management expects the CV OEM segment to

post mid-single-digit growth in FY26E.



PV OEM is likely to post low single-digit growth



The OHT segment has also been facing headwinds over the last 2 years now



Further, the rural outlook is better than the urban outlook. Hence, given its

distribution reach, the company expects to grow well in the 2W and farm

segments.

Operational highlights



In the long run, management expects the domestic tyre industry to record a 6-

7% CAGR and exports to register a 10-11% CAGR



Given its capacity ramp-up, the company is witnessing healthy gains in the TBR

segment. It has a single-digit market share in TBR replacement, but the share is

growing. CEAT’s market share has improved to double digits in the TBR OEM

segment.



CEAT continues to be the market leader in the 2W segment and has a good

share of business in the OE segment as well



Their PV market share has been stable in FY25.



In the PV segment, they have recently got new model approvals for higher rim

sizes on > 14-inch tyres.



To cater to the premiumization trends, CEAT has introduced high-end tyres

which include Z-rated 12-inch radial tyre (for 300kmph speed), Calm technology

(low noise for EVs), and run-flat (tyres that can run 80km on flat tyre before

being impacted).

Update on input costs and pricing action



After being stable in the range of USD1900-2k per MT for Q4, international

rubber prices have reduced by USD 200 per MT over the last three weeks and

are now at a discount to domestic prices by about INR7-8 per kg.



Further, crude has now corrected to USD 65 per barrel from USD 75-80 levels in

Q4. Management expects crude prices to remain in the USD65-70 range in the

near term. Thus, prices for crude-based derivatives are expected to decline,

especially from Q2FY25 onwards.



Even USD-INR is now back to INR85.



Hence, if all else remains stable, management expects a minor decline in input

costs in 1Q and a further decline in 2Q.



June 2025

AUTOMOBILE | Voices

With reducing input costs, management expects that the industry would be able

to hold on to its pricing and hence expects gross margins to improve if the trend

continues.

Update on Camso and international businesses



CEAT will start consolidating Camso from Q2 onwards, once all approvals are in



The integration process has started and the focus would be initially to ensure

business continuity. Hence, this business is expected to take a few quarters to

stabilize operations. Over the medium to long term, management is confident

that this would be a margin-accretive business.



Post-Camso integration, international business would increase to 25% of CEAT

revenues

–

that too at just 50% utilization at Camso. This will further ramp up

once the company ramps up Camso to its full potential in the coming years

Tariff impact on Camso and international businesses



As per the management, CEAT’s exposure to the US (ex of Camso) is in the low

single digits. However, North America would remain one of the key opportunity

markets for CEAT in the long run and hence they would continue to invest in the

same going forward



Almost 90% of Camso’s business comes from North America and Europe



For Camso, about 30% of its business exports to the US from Sri Lanka. Of this,

15% comes from tracks and 15% from tyres.



Sri Lanka has imposed a 44% reciprocal tariff on tyre imports to the US. The

reciprocal tariff has now been postponed by 90 days given the ongoing trade

dialogues with trading partners. Given the ongoing dialogues with trading

partners and global OEMs, management is confident that they would hear some

positive solutions on this front for the industry



However, track imports to US attract about 4% duty only. Tracks are about 50%

of Camso's revenue.

International business outlook



The company continues to see stable demand from key markets like Europe,

Southeast Asia, and the Middle East.



CEAT is seeing headwinds in exports in markets like Latin America where

currency has depreciated.



Even demand from the US is weak given the uncertainty on tariffs



Given that OE demand continues to be subdued in some of these markets, they

need to rely on replacement demand in the near term

Update on capex and debt



They have invested INR9.5b in capex in FY25 and expect to invest INR9-10b for

FY26 as well.



Gross debt for FY25 stands at INR19.3b with D/EBITDA at 1.3x and D / E at 0.44x



The debt level is likely to rise further as they would pay for the Camso

acquisition in the coming quarters. Of the USD 225mn acquisition, about 20% of

the amount can be paid after 3-3.5 years and there is some consideration for

finished goods inventory once they take stock of the same.



They may have to add some key upstream equipment in Camso. Including this

and regular maintenance, they may need to invest INR1.0-1.25b in the first two

years in Camso.



June 2025

AUTOMOBILE | Voices

Other highlights



CEAT has announced VRS at one of its old plants wherein about 100 employees

have accepted the same. The VRS cost of INR370m has been accounted as

exceptional in 4Q.



CEAT has announced an annual dividend of INR30 per share (flat YoY)



In terms of segmental margins, international and replacement margins are good

and at similar levels relative to OEM margins. Further, 2W margins are better

than PVs.

CIE Automation

Current Price INR 450

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Results Update

India performance update



India revenue growth was largely in line with the weighted average growth in its

key segments.



The reason for the lack of outperformance vs. end-markets was that some of its

new orders have not ramped up due to end-market conditions. The company

expects some of these orders to gradually ramp up in the coming quarters.



Management has indicated that the order conversion of anchor customers is

significantly higher, and hence it intends to focus on winning new orders from

anchor customers.



The company has now appointed a business development head, who will focus

on new order generation from anchor customers and work on synergy wins

within different segments in the company.



Management has indicated that India business margins are still below their

European benchmark standards. The company would continue to look at

opportunities to improve India margins to its global benchmark.



Outlook: Tractor industry continues to see healthy growth and is likely to

continue to post 4-5% growth in FY26. Two wheelers are also seeing steady

growth. However, PV demand has come off in the recent months. Overall, India

auto market is likely to post about 5% growth in FY26.

Europe performance update



The current revenue run rate for Metalcastello is EUR50m, down from an

average of EUR75m in normal times.



Management is working on reducing its operational costs to the new utilization

levels and maintaining its margins at the current levels.



Europe margins were impacted due to costs that they have incurred for

restructuring their operations.



Management has indicated that Europe demand continues to be weak and the

pain in Europe is likely to continue at least for a couple more quarters, and it

expects the European PV segment to decline 5-7% in CY25. The ongoing tariff

war has only added to the current uncertainty in Europe market. This is likely to

further hurt demand in Europe in the coming quarters.

US tariff impact



The impact of US tariffs on India business is negligible as only 3% of its business

from India goes to the US

–

about INR100m in 1Q.



From the Europe business, Metalcastello has about 40% exposure to the US.

Similarly, about 40% of Bill Forge Mexico sales go to the US. Also, these sales are

to US OEMs, which are assembling vehicles in the US.

June 2025

AUTOMOBILE | Voices



Hence, the company does not expect any material direct impact of US tariffs on

its operations.

The indirect impact of this tariff war is a potential slowdown/uncertainty

created by supply chain disruption, which is likely to hurt global auto demand in

the near term.

Management has indicated that some of its US customers are considering

moving their production from China to either Korea or India. They are exploring

such opportunities for growth.

However, until the tariff arrangements are finalized across nations, there is

unlikely to be any clear decision by global OEMs.

Craftsman Automation

Current Price INR 5,508

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Detailed Concall Transcript &

Results Update

Overall guidance



Management has maintained its guidance given in Q3: Rev of INR70b for FY26E,

EBITDA at INR11b, and EBIT at INR6.5-7b



The company expects the Gurgaon land sale to be concluded by Q4FY26, for

around INR3b



Capex guidance for FY26 stands at INR7.5-8b of which about INR5.5b would be

invested in the standalone business



Management does not expect the ongoing tariff wars to have any major impact

on any of its key segments. They expect to pass on the incremental tariff

pressure as the bulk of their contracts are either FoB or CIF basis

Update on Powertrain business

Traditional powertrain



The utilization of powertrain business is about 70%, with the peak of about 80-

85%



The traditional powertrain business is likely to post double-digit growth in FY26



This business has seen improvement in margin in 4Q due to a pickup in the CV

business and a revival in tractors. Management is now confident that the worst

in the Powertrain business is now behind and expects margins to be better than

even Q4 levels for FY26E

Update on New Powertrain Segment



The new Kothavadi plant has commenced operations from Q1. However, given

the long gestation period of these projects, management expects this business

to start ramping up from FY27 onwards



They are confident of achieving INR8b in revenues from this business by FY29-30



Margins in this business are likely to be at par with the traditional powertrain

business

Update on the Aluminum business

Update on Sunbeam



For 4Q, Sunbeam posted revenue of INR3b with EBITDA at INR230m

–

lower due

to some one-off costs related to restructuring.



Management expects Sunbeam to clock INR12b revenues in FY26E. It is

important to understand that Sunbeam is currently in a stabilization phase

under the new owners. Given that it was in insolvency, there were no new

projects / new orders from OEMs. Hence, they will continue with the existing

June 2025

AUTOMOBILE | Voices

business for a while, and new customer orders are likely to flow in once the

business stabilizes operations post-restructuring



As part of its restructuring, the Gurgaon plant of Sunbeam is now being shifted

to Craftsman’s Bhiwadi plant.



Sunbeam is likely to remain tax-exempt for a few years.

Standalone and DRA



Standalone Al business is likely to grow at a 20% revenue CAGR. This is likely to

be driven by the ramp-up of two new plants: Bhiwadi is expected to generate

INR3b in revenue in FY26, while Hosur is likely to deliver INR1.5b in revenue in

FY26



In the new alloy wheel plant, they have reached EBITDA break-even in 4Q with

INR400m revenue.



The utilization of the standalone Al business stands at 70-75%. Given the

execution of its new orders, this is expected to ramp up to 80-85% by Q2 itself.

Thus, they would need to expand capacity from 3Q onwards.



Management has indicated that DRA can post double-digit growth going

forward, viz., 8-10% for FY26 and higher in FY27

Update on Storage business



The storage segment has also seen a pickup in 4Q.



The company has made enough inroads in the automated storage solutions

business. Further, it has got its pricing right and rationalized product costing.



Management expects this business to see improved performance even from Q4

levels in FY26E.



Management expects this business to grow in the high-teens going forward.

Eicher Motors

Current Price INR 5,307

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Results Update

Royal Enfield update



As indicated in the prior quarters, management continues to focus on absolute

growth in profitability. For the same, their focus has been to provide value-

added features to customers at affordable price points. They have recently

launched new variants of Classic and Battalion Black with a lot of feature

additions. While the increase in cost has been passed on, they have not passed

on the margins on these products. The same is the case with the launch of the

new Hunter, which has seen many feature additions, including assistive clutch,

enhanced ride comfort, LED, a better ground clearance, USB charger, etc.



They have seamlessly transitioned to OBD2 norms and have taken a price hike of

1.15% effective Apr’25 for the same. However, one has to remember that RE

has not taken any price hike in FY25.



RE expects volume growth to continue in FY26 as well. While rural areas

continue to see positive sentiments, they are now seeing initial signs of recovery

in urban regions, which would bode well for players like RE



The average age of RE customers in FY19 was around 38-40 years. However,

post COVID and post the launch of the Hunter, this has been on a downtrend as

Hunter attracts a lot of young customers (avg age for Hunter consumers stands

at 24-26 years). Overall, for RE, 30% of its consumers are below 25 years now

and about 60-65% of customers are below 35 years age.

June 2025

AUTOMOBILE | Voices

Even the first-time buyer ratio for RE has increased to 19%



Finance penetration for RE has gradually inched up to 61%



The top 20 cities contribute to about 18-22% of RE volumes



Capex plans for FY26 stand at INR12-13b and would be invested in EV

manufacturing facility, new product development, etc.



In exports, RE remains amongst the top 4 brands in many countries globally in

the middle-weight motorcycle segment. For instance, it is No 1 in the UK, No 2

in Argentina, and No 3 in Brazil in this segment.



The launch of the Himalayan in Brazil has received very strong customer

reception in the region.



Given the ongoing uncertainty in global markets, management remains

cautiously optimistic on the export outlook.

VECV update



VECV continued to outperform industry growth, having grown 5% in FY25 Vs flat

industry growth. VECV was able to outperform industry growth due to the

continuous expansion of its network pan-India.



Given the favorable demand indicators, management expects the CV industry to

grow in FY26 as well.



VECV is now the market leader in the LMD truck segment with a 36.1% market

share. Even in HD trucks, they have achieved the highest ever share at 9.1%.

Similarly, their LMD truck market share stands at 37.1%.



Its margin improvement has been a result of multiple factors like better price

management, operating leverage benefits, and reduced discounts.



Endurance Technologies

Current Price INR 2,537

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Results Update

Update on new order wins (excl. BJAUT orders)



In FY25, ENDU won orders worth INR11.99b, of which INR10.82b were new

orders and the balance were replacement orders.



About 34% of these orders (INR4.11b) came from 4W OEMs.



Further, about 37% of these orders (INR4.4b) were for EVs. EV order wins since

FY22 stand at INR8.35b. Including EV orders won from BJAUT, the EV order book

crosses INR10b.



Of the cumulative INR46.9b worth of order wins over the last three years,

INR37.3b were new orders. Of this, ENDU has started SOP for INR14b of orders

in FY25 and expects to commence production for another INR10b in FY26.

Update on Suspension

4W suspension



ENDU has entered into a technical tie-up with a Korean player for 4W

suspensions. This Korean player is among the global leaders in suspension

systems.



With this tie-up, many domestic OEMs are showing interest in evaluating their

products and hence plant audits are happening currently.



Currently, ENDU has about three programs in serious discussions, where OEMs

are asking them to accelerate development timelines.



The timeline for the greenfield for this project would be decided in 12 months.

June 2025

AUTOMOBILE | Voices

In its bid to achieve diversification away from 2Ws, ENDU is also working on

solar dampers. It has entered into supplying components for racking system in

solar panels.



It has got an initial order from a Spanish company, which is the third largest

supplier of solar panels globally. SOP for this project is 3QFY26.



While the potential is huge, ENDU expects to ramp up gradually. It would start

with revenue of around INR250-50m in FY26 and then expects to scale up to

INR5-10b in the next 2-3 years.

2W suspension



ENDU won new orders worth INR2.35b in suspension business in FY25.



In the Narsapura plant, ENDU aims to grow sales by 80% YoY in FY26, led by new

business from HMSI, TVSL, Ather and Ampere. The SOP for inverted front fork

order of HMCL for HD will be in 3QFY26 and the same for inverted front fork

order for TVS has commenced in Apr’25.

Update on Al casting



ENDU won new orders worth INR6.1b in FY25 in this segment in both ICE and

EVs:



These orders include orders for its new location AURIC worth INR2.75b, with a

peak likely to be reached in FY27. These orders are from Valeo (EV component

supplier to MM) and two global OEMs (US and Europe-based) for premium

parts.

Update on AL forging business



ENDU has added another forging press, taking the total presses at AL forgings to

four.



It received new orders for Al forgings from RE and HMCL, apart from the JLR

order.



This is beyond the backward integration project that is ongoing on these

presses.

Update on Alloy wheels



The new alloy wheel capacity of 3.6m units p.a. at Bidkin will commence from

2QFY26.



ENDU continues to see strong demand from OEMs to ramp up its capacity for

alloy wheels.

Update on brakes business



In brakes, ENDU has been so far supplying brakes for 100cc-800cc motorcycles.

It has now started development of brakes for 900cc bikes for a key OEM.



The dual channel ABS SOP trial runs have begun and SOP is expected in 2QFY26.

It has now started in-house assembly of ECU and intends to assemble PCBs in-

house going forward.



ENDU is also in discussions to supply brakes to a leading 4W OEM and hopes to

conclude it soon.

Update on transmission business



ENDU has received orders for clutches from HMCL and RE.



SOP for these orders is expected from May and Jul’25 and is likely to reach a

peak in 4QFY26.



In drive shafts, ENDU has won business from three 3W OEMs and one order

from a 4W OEM. It targets to invest in capacity expansion for this segment to

service new orders.



June 2025

AUTOMOBILE | Voices

New initiative: Manufacturing of lithium-ion battery packs



Management had recently announced that ENDU would establish a new facility

to manufacture and design lithium-ion battery packs with an initial outlay of

INR473m.



The new greenfield project will be located near Pune, Maharashtra. The facility

will produce various configurations of lithium-Ion battery packs designed for

mobility applications and battery energy storage systems.



This initiative is a forward integration for Maxwell and it sees a huge

opportunity for growth in this business going forward.



ENDU intends to design and develop battery packs in-house.



Some of the USPs of their battery packs are: 1) temperature monitoring system,

2) wire free battery packs.



Management claims that ENDU’s battery packs would be capable of working for

more than 10 years without the need for any major maintenance.



For cell procurement, ENDU is in talks with players from China, South Korea,

Japan and even India.



ENDU is working to provide a big cost advantage to OEMs.

Update on Maxwell



The company has recently increased its stake in Maxwell to 61.5%. Further, it

has entered into an agreement with a minority shareholder to buyout the

remaining stake in the company by May’25.



At Maxwell, its order backlog stands at INR2.5b after removing orders from

OEMs, which are no longer in operation.



ENDU has recently redesigned BMS for HMCL, which has helped to offer

significant cost advantage to the OEM.



The company has recently booked orders for the supply of MCU and IoT, which

are likely to commence in 2H.

Update on Europe



ENDU booked new business worth EUR40.2m in FY25.



Orders include a large machining order worth EUR5.2m from BMW at Stoferle

and other orders from VW, Rolls Royce and JLR.



While the macro environment remains challenging, management continues to

be positive about the outlook for Europe given its healthy order backlog.



VW has been the fastest-growing OEM for ENDU in FY25 (+60%) on the back of

strong order wins in FY22.



The company’s

exposure to the US is limited to revenue of about EUR25m.

Hence, the impact of US tariffs is limited for ENDU.



Management has completed the acquisition of Stoferle and would consolidate

its financials from 1QFY26.

Other highlights



ENDU has invested INR6.1b in capex in FY25. It plans to invest a similar amount

in FY26 as well, primarily in the Auric plant and battery pack assembly line.



The company booked INR380m worth of state incentives in 4Q. ENDU has

received its eligibility certificate for the next five years from Maharashtra Govt

and the total incentive eligibility is INR6.1b (up from INR4.5b in the prior five-

year plan). It expects INR650-750m to be booked in FY26. The payout happens

June 2025

AUTOMOBILE | Voices

based on the GST the company pays and it is likely to be booked within the first

three quarters of the fiscal.

KTM has now started giving ENDU schedules and expects to commence supplies

from Jun’25 onward.



Escorts Kubota

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Domestic tractor business outlook



Management has indicated that the tractor growth outlook remains positive,

with the industry expected to post mid-to-high single-digit growth in FY26 and

likely to cross 1m units for the first time.



On a regional basis, Southern markets are likely to continue to outperform, even

in FY26. On the other hand, North and Central markets, which grew 2.5-3% in

FY25, are expected to grow at a similar pace in FY26.



This regional skew remains unfavorable for ESCORTS, given its traditionally

weaker presence in the South. The company is expected to focus on

strengthening its position in the West and East markets, aiming to grow in line

with the industry in these markets going forward.



While the regional mix remains unfavorable, ESCORTS targets to outperform the

industry by addressing product gaps across segments. The company has recently

launched the Promax series of tractors to target its presence in the 31-50HP

segment, with additional launches under this series expected later in the year.

This will help address product gaps in Farmtrac. In the Powertrac brand, the

company intends to introduce a tractor specifically designed for paddy

applications in the Southern market by Q3FY26. Additionally, a product

developed with Kubota is scheduled for launch in Q2. Margin pressures are

expected in the near term as the company launches new products with

attractive pricing.



Management expects to sustain margins at FY25 levels in FY26. It does not see

any signs of input cost inflation at the moment.



The acquisition of the new greenfield land in UP is likely to be completed by Q2-

Q3FY27, pending a few formalities. Once the land is secured, the project is likely

to take around three years for SOP. Localization efforts with Kubota will

accelerate post this greenfield.



Until then, margins are likely to remain at current levels of 11.5-13%.



Dealer inventory remains comfortable at around 4-5 weeks.



The current deadline for implementing the Trem 5 emission norms is Apr’26.

However, management does not anticipate the norms to be enforced by this

date.

Update on Exports



ESCORTS is now seeing a healthy pickup in exports, having grown 36% YoY on a

low base. Almost 70% of its exports are to the Kubota network.



While end-market demand in exports continues to be challenging, ESCORTS

expects to sustain its momentum going forward.



The company has recently entered Mexico and sees good demand in markets

like South Africa, Tanzania, Kenya, Myanmar, Cambodia, etc.



Management has provided a growth guidance of 20-25% in exports for FY26.

June 2025

AUTOMOBILE | Voices



In the long run, exports are likely to be a significant growth opportunity. Kubota

has already highlighted its intent of making India its production hub for global

needs.

Kubota also plans to increase component exports from India. However, it is

struggling to finalize high-quality vendors that meet its stringent quality

requirements.

Update on the captive financing arm



The company recently launched its captive financing arm about five months ago,

initially testing its systems in select markets of UP, MP, and Bihar.



The company has invested INR600m so far, with approval to invest INR2b in the

first phase, which will increase to INR7b in due course.



It expects this entity to reach 30-35% finance penetration over the next 3-4

years, after which it expects to see positive spillover effects on ESCORTS’ market

share.



It expects its book size to increase to INR1b by FY26 end.

Update on the Construction Industry



The industry has recently implemented new emission regulations.



Products that transitioned to Trem 5 from Trem 3 have seen a 10% price

increase, while those that have transitioned from Trem 4 to Trem 5 have seen a

7% price increase.



Given the sharp price increase, demand for the industry is likely to remain

muted for FY26.



Management expects demand to revive from H2FY26 onwards, once the new

price hikes are absorbed in the market.



Management expects margins to sustain at current levels.

Other highlights



Capex guidance for FY26 stands at INR3.5-4b. Including the expected new

greenfield, the same is likely to be around INR8-9b.



Cash on books currently stands at INR65b. Following the payout from Sona

Comstar for the Railways division, the company estimates to end FY26 with

around INR75-80b of cash on the balance sheet.

Happy Forgings

Current Price INR 956

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Results Update

CV business update



HFL’s CV revenue declined 6% YoY in FY25. While domestic CV truck production

was down 4% YoY, BOM sourcing of the industry was actually down 15% YoY in

FY25. In Europe, players like Volvo, Daimler, and Iveco have seen 18-20% decline

in volumes. HFL supplies to these players through large global vendors like Dana

and Meritor.



Thus, the decline in HFL’s CV revenue was a function of a steep industry decline,

while HFL continued to outperform industry volumes.



The domestic MHCV industry is expected to post growth in FY26 on the back of

favorable macro indicators. Management has indicated that global CV sales are

likely to decline in high single digits in CY25, given weakness in US Class8

segment. Even the Europe HDV market is likely to recover only gradually from

current levels.

June 2025

AUTOMOBILE | Voices

HFL is likely to continue to outperform industry growth on the back of its new

order wins from large domestic CV players.

Tractors business update



HFL saw 4% YoY growth in revenues in FY25. However, like in CVs, tractor

demand is seeing a severe slowdown in both Europe and North America, with

industry majors like John Deere seeing 35-40% YoY decline in volumes.



HFL has outperformed the tractor industry in FY25 as well.



The domestic tractor industry is expected to post high-single-digit growth in

volumes in FY26E.



However, the global tractor market continues to see a similar decline QoQ even

in 1QCY25, a fifth consecutive quarter of volume decline. Overall, the European

tractor industry is likely to post 5-10% decline, while the North America market

is likely to decline in double digits. Overall, HFL expects tractor exports to start

recovering in 3QFY26. Stock liquidation has already happened from dealers and

hence, management expects a recovery by 2HCY25.

OHV business update



HFL’s

OHV revenues remained flat YoY in FY25, and its revenue contribution has

marginally declined to 12% from 13% YoY.



Here again, while the domestic construction equipment industry saw 4%

growth, exports saw double-digit decline. Demand in key Europe markets like

Germany and France declined sharply given the challenges from high finance

costs and uncertainty around potential tariff measures.

PV business update



PV contribution has increased to 4% of revenues in FY25 from 1% in FY24 and is

well on track to reach 8-10% in the next couple of years.



HFL’s strategy of providing dedicated production lines to large OEMs is helping it

outperform its peers in this segment.



HFL expects to accelerate PV contribution going forward.



Exports are expected to contribute meaningfully to PVs from FY26.

Industrials business update



The segment’s contribution has increased to 14% in FY25 from 12% YoY.



While wind energy contributes to 50% of this mix, the balance is split between

oil and gas and industrial gensets.



Order wins between PV and Industrial stand at INR16b to be executed over the

next 5-8 years, with annual peak revenue of INR2.5b. The PV + industrial

contribution will then rise to 25% of total revenue.



HFL’s capex of INR6.5b for the large press remains on track to be executed over

2-3 years and will be partly funded through debt. SOP for this press is planned

for FY27. These will have applications for large crankshafts, axles, gears, oil and

gas valves, power generation, marine, mining, wind energy and defense.



After the ramp-up at this press, avg ASP at HFL is likely to inch up to INR275-280

per kg from the current levels of INR248 per kg, assuming stable input prices.

This business is likely to have much better margins than the current levels.

Impact of US tariffs



US exposure for HFL is about 5% of revenue and is on CIF basis. Hence, HFL does

not see any material impact on the existing business due to the US tariffs

provided that the proposed tariff on exports into US is up to 8-10% of imported

value.



June 2025

AUTOMOBILE | Voices

The current order wins for HFL for exports are unlikely to be impacted as its

products have been tested from its plants and the US does not have such

production capacity available.

Update on Capex



The 6300 T line has already been added in FY25 to cater to new PV order.



HFL is currently adding a new 4k T press line for the new PV order.



Another line, including the ring rolling mill, is expected to be operational for

industrial end-use in North America with SOP for 3Q or 4QFY26.



HFL has so far invested about INR5m in the proposed Jammu plant for

machining. However, HFL has put this project on hold due to some issues about

the terms of policies and the geopolitical uncertainty in the region.



HFL plans to invest INR4b in FY26 as well, with solar capex at INR1b. This

includes INR800m capex for PVs in FY25.



For INR6.5b of capex to be operational by 3QFY27, 50% of revenue is likely to

come from data-center requirements, mining, and marine applications, while

the balance would come from oil and gas, defense and aerospace.



The asset turn for this new capex would depend on the machining mix

–

for raw

forgings, asset turn is likely to be at 1.2-1.3x and for machining, it stands at 1x.

ASP from this large press is likely to rise to INR600 per kg. Thus, margins are

likely to be much higher than the current levels for this press.



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Domestic 2W industry update



Management expects the 2W industry to post 6-7% YoY growth in FY26, largely

similar to FY25.



Management also expects to outperform industry growth in FY26, backed by its

upcoming new launches.



They had taken a planned shutdown in four plants (Daruhera, Neemrana,

Gurgaon and Haridwar) in Apr’25 for around five days to resolve supply-chain

issues, which they timed with maintenance activity. However, the shutdown did

not impact retails as HMCL clocked 500k units of retails in Apr’25. This did not

also hurt channel inventory, which is now at 4-5 weeks and is likely to remain

here going forward. This issue has now been resolved and production is back to

normal from May’25 onward.



HMCL has seen replacement demand bounce back to 11% from 6% QoQ in 4Q.

This used to be around 18-20% before Covid.



The company’s spare parts and accessories business has been

gradually scaling

up on the back of improving penetration and expanding portfolio to products

like Tyres and batteries. HMCL aims to grow this business profitably. Its second

global spare-parts centre is expected to come up in its Tirupati plant in the near

future.

Update on EVs



HMCL has now started to see a pick-up in traction for Vida products from 4Q,

and the company ended the quarter with a 7% market share. In fact, HMCL has

close to 20% market share in almost 60 towns now.



It will continue to focus on improving market share in this segment.

June 2025

AUTOMOBILE | Voices

HMCL has lined up two new affordable EVs, both of which are likely to be

launched in Jul’25 to fill up the product gaps. These new products will help to

accelerate EV growth in the coming quarters.



Management believes, at 25-30k monthly sales run rate, it can achieve break-

even in EVs. This is, however, likely to take a couple of years, as per

management.



HMCL expects PLI approval for Vida Pro by Jul’25. It will soon file application for

PLI approval for other models as well.

Update on Exports



In FY25, exports grew 43% YoY over a low base, 2x of industry growth. Markets

like Bangladesh, Columbia, Nepal and Mexico are driving strong growth for

HMCL.



Almost 40% of its exported models belong to the premium segment.



HMCL continues to be aggressive on export growth and remains confident of

outperforming industry growth going forward.



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Outlook



Domestic PV demand remains challenging. Management is hopeful of a pickup

in demand given the recent rate cut by the RBI and the tax incentives provided

in the budget. However, SIAM has forecast 2% growth for PVs in FY26E and HMI

aims to grow in line with the industry.



Management has indicated that given the weak demand in the market,

discounts continue to be high. Their strategy would be to launch new variants

with better features and try to create excitement in the market while protecting

its profitability.



HMI targets to launch 26 products (combination of new and refreshes) by FY30,

of which 20 would be ICE and six would be EVs.



The product launches are expected to commence once HMI starts production at

its new Pune facility, which is expected by 3QFY26. HMI targets to launch almost

eight models during FY26-27E.



The company plans to launch new eco-friendly powertrains like hybrids in the

coming years.



HMI has provided capex guidance of INR70b for FY26. About 40% of capex

would be invested in the Pune plant and around 25% in new product

development.

Exports outlook



Management expects to post 7-8% YoY growth in exports in FY26.



HMI is emerging as an export hub for Hyundai Motor Co. (HMC) for emerging

markets like the Middle East, Africa, South Asia and Latin America. HMI aims to

become HMC’s largest production hub outside of South Korea.



HMI has recently introduced Venue in markets like Indonesia, Yemen, Bhutan,

etc. Similarly, the company launched Creta EV in Nepal. It has also launched the

new Alcazar in the Middle East and Africa. After the EV launches, HMI may get

opportunities to export them to emerging markets.



The company is also exploring advanced regions like Australia.

June 2025

AUTOMOBILE | Voices

In the long run, HMI intends to increase its export mix to 30% by 2030 from the

current 21% levels.

Other highlights



The revenue beat was a key factor driving its outperformance in 4Q. Revenue

growth was driven by: 1) a 4% QoQ increase in ASP, led by an improved mix in

both domestic and exports, a price hike, and reduced discounts; 2) higher govt

incentives in 4Q. HMI increased prices by 0.6% in 4Q. Discounts were down

60bp QoQ at 2% of revenue. Further, the additional TN incentive in 4Q QoQ

stood at INR1b.



SUVs now contribute to 69% of HMI’s domestic volumes. On

the other hand, the

contribution of hatchbacks and sedans has fallen to 20% and 12% in FY25,

respectively.



Management does not expect the demand for hatchbacks and sedans to bounce

back given: 1) rising aspiration of customers for SUVs, 2) micro SUVs eating into

demand for hatchbacks and sedans.



HMI continues to drive the premiumization trend in India. It now has a total of

675k connected vehicles plying on Indian roads, with ADAS penetration of 14%

and sunroof penetration of 53%.



The adoption of dual-cylinder technology has helped HMI increase CNG

penetration to 13.2% in FY25 from 11.5% in FY24.



EV contribution for HMI stands at 1% after the launch of Creta EV, which has

received a strong response.



Its upcoming Pune plant would be capable of producing both ICE and EVs,

depending on market demand. However, its near-term performance after the

plant commercialization is likely to be impacted by start-up costs.



HMI’s localization has now improved to 82% in FY25 from 78% in FY24. So far it

has done localization for over 1,200 components over the last five years. For

EVs, it intends to begin with the localization of battery pack assembly. Later,

HMI may tie up with lithium-ion cell suppliers in India. With improving

localization, HMI could qualify for PLI incentives in the coming years.



Management has indicated that Creta EV is margin positive currently. Given that

the EV penetration is currently low, it is unlikely to impact margins.



Government incentives that HMI receives include: 1) tax incentives, 2) clean

energy incentive of INR250m that come in 4Q each year, 3) capital subsidy

started in FY25 once HMI achieved MOU conditions on investment and

manpower obligations

–

this was INR750m in FY25. While the tax incentive is

valid till FY32, the other two subsidies are valid for 20 years after the

commencement date, subject to fulfilment of certain conditions as per the

MOU.



The board has declared a dividend of INR21 per share, which translates into a

payout ratio of 30%. HMI intends to come out with a dividend payout policy

soon.



June 2025

AUTOMOBILE | Voices

Mahindra & Mahindra

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Auto update



In the <3.5T segment, MM’s market share improved 290bp YoY to 51.9% in

FY25.



The Auto segment delivered ROCE of 45.2% in FY25.



MM targets to launch a new platform on 15th Aug (capacity creation of 120k

units in Chakan), details of which will be shared then.



LMM posted revenue of close to INR30b for FY25 and is profitable.



Management remains optimistic about the continued outperformance to the

UVs industry, even in FY26. It expects incremental growth to be driven by full-

year launch benefit for Thar Roxx and XUV 3XO, along with contribution from

the recently launched EVs.



Following recent launches, MM has outlined a product roadmap to launch seven

ICE SUVs (two mid-cycle enhancements), five BEVs, and five LCVs (two of which

will be EVs) by 2030. Of this, in CY26, it targets to launch three ICE SUVs (two

mid-cycle enhancements), two BEVs, and two LCVs (one of which will be EVs in

the <3.5T segment). Management has confirmed that the new SUV expected to

be launched in CY26 will not be a five-seater.



MM’s exit capacity for UVs in FY25 stands at 61.5k units, with plans to increase

it to 6+9k units in FY26 and 85k units in FY27. Further, the company is planning a

greenfield project to meet future requirements beyond FY28.

EV update



In terms of revenue market share, MM has already secured the No. 1 position in

both e-SUVs (37.2%) and e-PVs (33.1%) in Q4FY25.



Of the current order backlog, almost 75% of the orders are for the top variants

of the two models (Pack 3). However, management acknowledged that to scale

up EV volumes, it will need to introduce Pack 1 and 2 variants in the coming

months. However, the mix is unlikely to change for Q1FY26.



The mix between the two vehicles is split as 60:40 in favor of XE 9E.



Management indicated that it is not seeing any major cannibalization in EVs. It is

attracting a considerable number of new customers who would not have

considered purchasing an MM vehicle otherwise.



One of the reasons for the initial tech glitches during the launch was MM’s

decision to upgrade its software for safety concerns, based on feedback

received during test rides. This upgrade took longer than initially anticipated,

which also contributed to the missed customer delivery deadlines.



Currently, MM is quoting a waiting period of approximately four months but is

not committing to specific delivery timelines, as it is in the final stages of

implementing its software upgrades.



Based on its launch experience, the company has deliberately slowed down

vehicle deliveries. Apart from the software upgrade issue, vehicle delivery is

currently taking at least two hours at dealerships, and there is insufficient

trained manpower to handle the volume. Hence, the company has slowed down

its deliveries to ensure a smooth customer experience.



The cells used in both models are fungible, allowing MM to scale up any of the

models depending on demand conditions.

June 2025

AUTOMOBILE | Voices



Currently, MM is producing EVs for MEAL based on contract manufacturing. The

fixed cost sitting in MEAL is limited to the marketing team at this stage.

Depreciation for both models is now fully captured starting from Q4.

MM has already applied for PLI certification and is confident of securing it by

Q2FY26. It has not accrued any PLI benefits so far.

In order to comply with CAFÉ norms based on the available data, MM will need

to achieve 25% EV mix by the deadline.

FES segment update



MM’s tractor market share improved 180bp YoY to 41.2% in Q4 and 170bp to

reach a record high of 43.3% in FY25.



Management has guided for a high single-digit growth for the tractor industry in

FY26. It also expects to outperform the industry, driven by its favorable market

mix (good demand seen in its strong markets of South and West).



The Farm machinery segment posted 18% YoY growth to INR10b in FY25,

becoming the second-largest player in this segment. Adjusted for farm

machinery, the core tractor segment’s margins expanded 300bp YoY to 19.7%

for FY25.



Tractor margins have expanded 220bp YoY to 18.4%, led by: 1) operating

leverage benefit and 2) a favorable model mix, as the Southern States

performed well.



The tractor segment delivered RoCE of 53.7% in FY25.

Update on global farm subsidiaries



Of its global farm subsidiaries, the ones in Turkey, Brazil, and Magna continue to

make steady progress. However, macro-headwinds in each of its markets

resulted in an aggregate loss of INR1b in FY25. These are expected to bounce

back when the market revives.



However, two other subs—MAM, Japan and Sampo—are seeing severe

headwinds. As such, MM has taken a write-off of INR6.5b (INR2.9b in MAM and

INR3.7b in Sampo), which is reflected in standalone financials.

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Key reasons for margin disappointment in 4Q



MSIL’s 4Q margins have been hit by multiple factors which include: 1) start-up

costs related to new plant SOP (30bp), 2) increase in input costs (20bp), 3)

adverse mix towards higher car sales, lower CNG sales and lower exports (40bp),

and 4) higher promotional spending towards Auto Expo and IPL (30bp).



Further, a few other expenses were lumpy in nature in 4Q (90bp) and included

higher CSR, repairs & maintenance, and higher digitization spending incurred

during the quarter.



The impact of higher costs was partially offset by lower discounts QoQ (40bp)

and operating leverage benefits (40bp). The estimated discount per vehicle

stands reduced to INR24.4k Vs INR30.9k QoQ.

Why should one consider these one-offs?



We note that most of the increase in costs for Q4 are operational expenses.

However, given the lumpy nature of these expenses, these should be considered

one-off for 4QFY25 (on a quarterly run-rate basis).

June 2025

AUTOMOBILE | Voices

For instance, as highlighted above, other expenses rose 90bp in 4Q due to the

lumpy nature of a few costs items which include: 1) CSR spending: CSR

provisioning was sharply higher in 4Q relative to quarterly run-rate and will

normalize from Q1 onwards, 2) digitization spending and R&D: higher

digitization spending was incurred in 4QFY25, which will not recur in 1QFY26,

and 3) repairs & maintenance

–

most of these expenses usually are incurred in

3Q but got spilled over to 4Q this time, adding to the already elevated costs.



Further, higher promotional spending towards Auto Expo will not recur in 1Q.



We estimate the impact of such lumpy costs at 90bp for Q4.

Factors that one should be wary of from here on



One has to note that the start-up-related costs of the new plant are likely to

continue at least for one more quarter and then normalize as volumes ramp up



Further, given the safeguard duty imposed on steel imports, steel players have

started taking price hikes now. Hence, steel costs are likely to rise in coming

quarters, unless the safeguard duty on steel imports is revoked. However, these

would be partially offset by the reduction in other commodity costs, including

Copper, and price hikes taken by OEMs.

Key growth drivers from here



Demand continues to remain weak in the PV industry. The industry is expected

to grow at a modest 1-2% for FY26e and MSIL expects to outperform the same

on the back of its new launches.



MSIL has lined up two new launches: the recently unveiled e-Vitara and one

more SUV



For MSIL, strong export growth has helped cushion the weakness in domestic

demand. In FY25, MSIL posted an overall 4.9% YoY volume growth largely led by

exports which grew 17.5% YoY.



As per management, this export momentum would be sustained even in the

coming years. MSIL expects to post at least 20% YoY export growth for FY26e.



One of the key growth drivers for exports for FY26E is expected to be the launch

of e-Vitara

in Suzuki and Toyota’s key markets. The company aims to sell 70k

units of e-Vitara in FY26E, and the bulk of them through exports.



However, one has to note that the demand momentum for key export models

like Jimny and Fronx is also likely to be strong in the current fiscal.



Overall, next year's growth is likely to be driven by exports, SUVs, and a further

increase in CNG penetration and hence these would help cushion margin

headwinds for FY26E.

Incremental details on operational performance



Mix was adverse for MSIL for 4Q as SUV contribution for them reduced to 36.8%

from 39.7% QoQ, CNG sales contribution came down to 33.7% from 36.1% QoQ.

On the other hand, hatchback sales contribution increased to 42.7% from 39%

and mini sales mix increased to 7% from 6%



Management has indicated that the company is fairly localized in terms of steel

procurement and it sources ~85-90% of its requirement from domestic markets.



Forex was also favorable in 4Q and led to a 20bp benefit. However, MSIL has

taken this gain in other income given these are hedging gains.

Other concall highlights



The PV industry has seen a moderation in growth in FY25 to 2.5% YoY from 8.4%

in FY24, reaching annual sales of 4.3mn units. The slowdown has been due to a

high base, and affordability issues, especially in the small car segment.



June 2025

AUTOMOBILE | Voices



Management has indicated that almost 88% of the country is not participating in

the car growth story which is the reason entry-level cars are not growing.

SUV preference in India has increased to 55% with another 10% mix coming

from MPVs. On the other hand, hatchback contribution has come down to

23.5% in FY25 from 46% in FY19.

In terms of powertrain mix for the industry, CNG contributed 18%, diesel 19%,

hybrid 2.4%, and EV 2.7%.

MSIL dispatched 24.3% of its domestic sales by rail in FY25, up from 21.5% YoY.

In India, 7 of the top 10 models sold in FY25 were from MSIL.

In 4Q, MSIL posted 3.5% YoY growth in total sales largely driven by exports

(domestic +2.8%, exports +8.1%).

MSIL has a 48.4% market share in exports for 4Q. Export revenue for 4Q for

MSIL stood at INR55b.

Royalty stood at 3.5% of revenue.

The company’s subsidiary,

SMG, posted INR1.5b PAT in FY25.

Discussions around CAFÉ norms are in the final stages and management expects

the policy to be rolled out within the next couple of months.

MSIL continues to have a multi-fuel strategy to achieve emission regulations.

Management has indicated that the cost of decarbonization is expected to be

the lowest for MSIL relative to peers.

Motherson Wiring

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

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Results Update



MSUMI is progressing through various stages of completion for three new

greenfields: 1) Pune plant

–

SOP for EV + ICE plant commenced in Q2FY25, while

the EV-only plant began operations in 4QFY25; 2) Navagam (Gujarat) plant

–

SOP for the EV-only plant is expected by 1QFY26, followed by the EV + ICE plant

by Q2FY26; 3) SOP for the Karkhoda plant is scheduled for Q2FY26.

These are sizeable plants with a peak combined revenue potential of INR21b,

i.e. 25% of MSUMI’s FY24 revenues. The company has secured business from

large Indian OEMs, including MSIL, M&M, and TTMT, for its upcoming new

model launches in the coming years. Management has also indicated that

MSUMI remains the preferred supplier for new-age vehicles by MSIL, MM, and

TTMT.

The EV mix of total revenues stood at 4% for Q4FY25.

Capex guidance for FY26 stands at INR2b. The company has invested about

INR400-600m in each plant, excluding the cost of land and buildings that are

leased from SAMIL.

MSUMI is a supplier for nine out of the top 10 selling PV models in FY25.

Samvardhana Motherson

Current Price INR 156

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

Management has indicated its next five-year growth aspiration

–

to achieve

USD108b in revenue (from current USD25.7b).

SAMIL has outpaced industry growth by 15% in FY25, driven by content growth

and M&A. In FY25, revenue from assets acquired post FY24 stood at INR85.7b. It

delivered 8% organic growth in FY25.

June 2025

AUTOMOBILE | Voices

Click below for

Results Update



Revenue from aerospace division surged 5x in FY25 to INR17.5b and is poised

for stronger growth going ahead as it is now a Tier 1 supplier for AirBus. Its

booked business in this segment stands at USD1.3b.

In the Consumer Electronics division, of the capex committed of INR26b, it has

invested INR10b in FY25 and expects to invest bulk of the balance in FY26. Its

first pilot plant has become operational in Nov’24 in record time and has been

well received by customers. The second plant is expected to be operational in a

couple of months. The large mother plant will be operational from mid-FY27,

when a sizeable ramp-up of this business is expected.

The Vision systems vertic al has made critical inroads in the supply camera

monitoring system in CVs.

At Yachio, the company has started supplying to customers apart from Honda. It

would not look to supply to German and North American OEMs in the coming

years. Even the fuel tank business of Yachio is seeing a resurgence in demand

given a sharp demand uptick globally for hybrids.

14 greenfields are in various stages of development, of which nine are expected

to come on stream in FY26.

Management has earmarked a capex guidance of INR60b for FY26, of which 50%

would be for organic growth and balance for maintenance. Almost 70% of the

organic growth capex would be invested in non-auto business.

Working capital increased in 4Q due to higher inventory and receivables led by

pre-buying and build-up of safety stock in anticipation of evolving trade

dynamics.

Net Debt to EBITDA stands at 0.9x. Effective net debt reduced to INR97.9b, with

Net Debt / Equity at 0.9x.

Management has indicated that majority of its components are USMCA

compliant and hence it does not see any material financial impact due to the

ongoing tariff headwinds. Also, given that most of its facilities are close to

customers, it does not have material direct impact from the same.

SAMIL is investing in setting up printed board assembly (PCBA) lines for

automotive application in India, as means for backward integration. It has

indicated that it already have 15 lines operational globally and has expertise of

the same. It would also look to explore such opportunities in the non-auto space

going forward.

In response to the increasing complexity in the global automotive supply chain,

regulatory shifts, and broader market volatility, SAMIL has announced a

strategic cost optimization initiative aimed at enhancing operational efficiency

across its European operations. These measures aim to reduce a cost block of

EUR50m per annum once fully implemented over the next three years.

It has taken an enabling resolution to raise debt of up to INR85b.

SONA BLW Precision

Current Price INR 528



Neutral



Revenues are down YoY due to the model change-over at one of its largest

customers. However, the new model has been launched in March and it is

expected to ramp up to normalcy in the coming months.

Dependence on ICE products has reduced to 9% in FY25.

June 2025

AUTOMOBILE | Voices

Click below for

Detailed Concall Transcript &

Results Update

Integration of the Escorts Railway division is expected in Jun’25. After factoring

in the Escorts Railways division integration, the proforma regional revenue mix

would stand at: India: 43%, North America: 33%, and Europe: 19%. On a

segmental basis, Autos would contribute to 70%, non-autos to 30%



They have won new orders worth INR47b in FY25 and the net order win stands

at INR242b (6.8x FY25 revenue). EV mix in this order book stood at 77%.



New order wins in Q4 include: 1) a large order from a new-age North American

EV OEM (existing customer) for rotor embedded differential sub-assembly and

epicyclic geartrain worth INR15.2b with SOP for 4QFY26, and 2) a steering bevel

box for CVs from an existing global OEM worth INR1.1b with SOP for 3QFY26.



They are also planning to look at opportunities in new areas like humanoid

robots. As per expert estimates, the humanoids market is likely to surge to 10m

units by 2035. In this, Sona is looking at working on components that would

contribute to about 50-60% of its BOM cost worth USD35-50k which includes

components like reducers and Gears, sensors, motors, controllers, embedded

hardware, software, etc.



Given that battery charging speed and battery cell prices are both falling

materially, management expects BEVs to achieve price parity with ICE in major

regions by 2030. Hence, a rising transition to EVs appears inevitable, according

to the management.



Traction motors and differential assemblies for EVs remain its fastest-growing

products at present.



The company is going ahead with its first phase of investment (under USD10m)

in Mexico (a Mexico-based company) despite the tariff-related uncertainties.

The end product of the customer is not on the list of products that attract tariffs

currently.



Given the uncertainty of the EV transition, management has started receiving

new RFQs for ICE components. In 4Q, the company won a couple of large starter

motor orders for ICE vehicles.



SONACOMS started supplies of the suspension motor in 4QFY25 to Neo and the

response has been very good. The company continues to receive a lot of

inquiries from other OEMs for the same.

The US tariff impact



SONACOMS generates ~40% of its revenue from North America.



It has identified about 3% of its revenue contribution from products that may

see some risk due to the US tariff impact. Most other products have low to

negligible risk currently.



Further, management reiterated that it is not easy to change supply chains

overnight and that it’s a multi-year

process.



The indirect impact from the US is likely to result in a slowdown in end markets

and disrupt the global supply chain in the short term.



Additionally, the restriction on the supply of rare earth metals from China is

expected to cause further disruptions in the EV supply chain in the near future.

While the company sees no immediate impact given it has adequate stock, it

would need to address this situation soon.



However, the positive impact is possibly the fact that this will also drive a lot of

consolidation in the market and this would lead to strong players emerging as

winners in the long run.



June 2025

AUTOMOBILE | Voices

Tata Motors

Current Price INR 710

Click below for

Detailed Concall Transcript &

Results Update

Neutral

Tata CV business



In domestic CVs, TTMT has lost 210bp market share to 37.1%, as per Vahan

retail data. However, one has to note that this entire loss has been on account

of its market share loss in the SCV segment, where it has lost 380bp share to

30.5%. On the other hand, while its share in MCV and HCV has remained stable,

it has gained share in the bus segment by 110bp to 37.6%.



In 4Q, CV segment margins remained stable YoY at 12.2% but were below our

estimate of 12.8%. CV margins remained stable QoQ despite the 10% volume

growth. Margins were impacted by higher employee costs and higher product

development expenses.



For FY25, CV segment margins improved 100bp to 11.8%. Margin improvement

was driven by pricing discipline and 20bp benefit received from PLI incentives.

Outlook

–

CV business



Most of the key demand indicators for the industry remain positive, which

include: 1) average utilization increased by 2-5% QoQ in 4Q; 2) freight rates

improved by 1-2% QoQ in 4Q; and 3) tipper sentiment index improved

marginally, while the same for HCV trucks, ILCVs and SCVs remained stable. On

the back of these factors, management expects CV industry to post single-digit

growth in FY26. Within this, management expects MHCV and bus segments to

do better than ILCVs and SCVs.



The implementation of DFC along the Western corridor is likely to shift

container cargo in the region to Railways. Hence, demand for tractor trailers in

this region is likely to decline. However, CVs would be needed for last-mile

connectivity in the hub and spoke model, and hence overall, there is unlikely to

be a major impact on CV demand due to DFC, as per management.



Input costs are likely to rise marginally in coming quarters given increase in

safeguard duty on steel as also rise in Cu prices.



As per regulation, new trucks would be mandated with AC cabins wef 8th

Jun’25. Implementation of this is likely to drive price hikes to the tune of 0.5-

0.6% for HCVs and slightly higher at 1.2% for ILCVs. This is also likely to reduce

fuel efficiency of vehicles. However, TTMT would aim to provide upgraded

products with enhanced features, driving up the value proposition for

customers.



TTMT management remains focused on recovering lost market share in SCV

segment. They would soon be launching Ace Pro in 2QFY26 to gain share.

Tata Motors PV business:



TTMT PV segment has seen 50bp YoY decline in market share to 13.2% in FY25.

Bulk of this decline is due to the decline of its share in the hatchback segment,

where its models like Tiago and Altroz are now over five years old.



While the CNG industry has posted 30% YoY growth, TTMT has outperformed

the same and grown 60% YoY in CNG. As a result, CNG contribution in its PV mix

has increased to 25% in FY25 from 16% in FY24.



TTMT’s PV segment margins remained stable QoQ at 7.9%, in line with our

estimate.



For FY25, PV segment margins improved 40bp YoY to 6.9%. Full-year margins

were boosted (+70bp) by INR2.5b worth of PLI incentives.



For FY25, PV ICE segment margins declined 70bp YoY to 8.1%, while EV margins

improved to 1.2% (from -7.1%) YoY.

Outlook - PV business



Industry demand for FY26 is likely to remain moderate, as in FY25.

June 2025

AUTOMOBILE | Voices

TTMT would target to outperform industry with its new launches, which include:

1) mid-cycle upgrade of Altroz to be launched this month and the recently

launched upgrade of Tiago; 2) full-year ramp-up of Curvv and Nexon CNG; 3)

Safari and Harrier with multi-powertrain options including gasoline; 4) Sierra ICE

launch; and 5) Harrier + Sierra EV launch.



While competition is likely to rise in EVs, TTMT would target to maintain its

market share above 50% levels.



In the entry segment (<INR 12L segment) in EVs, TTMT enjoys a dominant 75%

share with its Tiago and Punch models. However, the INR12-20L segment is the

one which is seeing the most disruption from competition and it is this segment

where TTMT’s share has reduced to 33%. One other

emerging segment is the

>INR20L segment, which is likely to see steady rise in contribution in the coming

years. The 4th segment is the fleet segment where they need to introduce EV

products, which can compete effectively with CNG and have an adequate range.



For TTMT to be CAFÉ-compliant based on current understanding, they would

need to have 10% EV penetration. For TTMT, EV penetration already stands at

11% and hence they are well placed to meet upcoming CAFÉ norms.

Other highlights



Overall, the standalone business delivered FCF of INR69b after incurring a capex

of INR84b in FY25.



The consolidated entity now has a net cash balance of INR10b from net debt of

INR160b in FY24.



Consolidated capex for FY26 is likely to be in line with the same done in FY25:

JLR at around GBP3.8b and standalone at INR84b. Like in FY25, management

expects this capex to be funded by internal accruals.



The board has recommended a final dividend of INR6 per share, flat YoY.



TTMT has got NCLT and shareholder approval for its demerger process. The

appointed date for the same is in Jul’25 and the effective date is in Oct’25.



Tata Finance merger with Tata Capital has concluded as planned.

Result Highlights

–

JLR



JLR 4Q operational performance was largely in line with our estimates, with

EBITDA margin coming in at 15.3% vs. our estimate of 15%. In fact, EBITDA was

5% below our estimates due to a miss on revenues.



Revenue was 7% lower than our estimate at GBP7.7b due to lower ASP, which

was impacted by adverse mix. The contribution of top 3 models (RR, RR Sport

and Defender) fell to 66% in 4Q from 70% QoQ.



One of the key factors that led to sustained margin pressure in 4Q was a sharp

rise in VME to 5% for 4Q from 2.6% YoY.



For FY25, JLR margins declined 160bp YoY to 14.3%. Margins were down YoY

despite a strong product mix due to higher VME and higher warranty costs.



JLR delivered FCF of GBP1.3b for 4Q and of GBP1.5b for FY25 (post capex of

GBP3.8b).



Overall, RoCE for FY25 reduced 190bp YoY to 19.4%.



JLR now has net cash of GBP278m as of FY25 vs. net debt of GBP1.1b in Q3FY25.

Outlook

–

JLR



JLR is currently facing significant uncertainty due to the tariffs levied by the US

globally on automobiles.



While the US-UK FTA has been a welcome agreement and helps to lower tariff

from the earlier proposed levels, the tariff on JLR-made vehicles exported to the

US is expected to still rise to 10% from the current level of 2.5%.



June 2025

AUTOMOBILE | Voices



Further, in the absence of any trade deal between Europe and the US, JLR cars

produced in Slovakia (Defender and Discovery) are likely to face 27.5% duty

when exported to the US.

It is important to remember that North America has been the fastest growing

market for JLR in FY25 (up 22%), at a time when other markets were seeing

weak demand. As a result, contribution of North America to JLR sales for FY25

increased to 32% from 26% YoY. With this sharp increase in tariffs, we expect

demand for JLR vehicles in the US to taper down, at least in the near term.

We also note that JLR (like other OEMs) had pushed vehicles to the US in 4Q in

order to get dealer stocks in place ahead of the tariff implementation. This

would mean that 1Q wholesales are likely to be weak.

Further, China demand continues to be under pressure.

Tube Investments

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Results Update

Engineering division



TII has improved its market share in this division in FY25.



Margins have been under pressure due to startup costs of the new Nashik

facility. Given the safeguard duty imposed on steel, demand for CRSS is likely to

rise; hence, TII expects this facility to fully ramp up by 3Q/4QFY27.



This facility has a capacity of 4k tons per day. TII would look for further

expansion, if needed, at a later stage.



After the ramp-up of this plant, TII expects margins to improve from 2HFY26

onward.



TII maintains its guidance of double-digit growth in this business going forward.



Capacity utilization, excl. the two new plants coming in Nashik and Phaltan,

stands at 80%



Given the new capex, TII does not foresee the need for additional capex for next

1-2 years.

Metal formed division



Margins have remained weak in this division due to a weak ramp-up in Railways.



However, this division has won a large railway order worth INR10b to be

executed over seven years, and it will commence in 4QFY26.



This new order will help TII get back business momentum and revive margins for

the business, as per management.



Utilization in this business stands at 85%. TII is investing in capacity ramp-up at

the Phaltan plant, which will be enough for its requirements for the next two

years.

TI Clean Mobility



Adjusted for one-off from fair valuation of CCPS, PBIT loss for this division stood

at INR1.1b in 4Q and INR4.1b in FY25.



TII is currently working toward being EBITDA positive for at least two of the EV

segments (viz. truck and 3W) in FY26 on the back of a pickup in volumes.



This business currently has cash of INR9.4b; hence, TII would not need any

fundraising for the next 1.5-2 years.



TII targets for each of its business segments include: 1) to reach USD1b in

revenue over next 3-4 years; 2) EBITDA break-even, 3) to be among top 2-3

players in each segment.

3W EV



One of the USPs for TI 3W PVs is that TII continues to offer the highest range in

the category.

June 2025

AUTOMOBILE | Voices

When TII launched its products, it came up with features unique to the market.

These features have over time been copied by competition. TII now expects to

launch variants of its existing products with first-in-class consumer-centric

features.



TII has had among the highest battery capacity in the segment at 10.2 kwh, and

hence, its products have been expensive relative to competition. It targets to

come up with lower battery capacity and launch products in line with

competition.



TII is also looking to indigenize micro controllers in-house, and the company

would be among the select few in the industry with such capability.



Its premium positioning in the market remains unchanged and customers are

willing to pay a premium for its products, as per management.



TII sold 1,662 units of 3W EVs in 4Q, up from 1,800 units in 3Q. In FY25, TII sold

7,334 units, up 116% YoY, relative to industry growth of 91% YoY in L5 segment.

Hence, it has continued to outperform the market.



TII currently has 85 dealers and plans to take this number to 120+ by FY26 end.

E-SCV segment



Currently, two dealers are operational and TII targets to increase this count to

25 dealers across India by FY26 end.



The company sold 14 units in 4QFY25.

E-tractors



Currently, four dealers are operational, which TII plans to increase to 25 dealers

across India by FY26 end.



TII sold 17 units in 4QFY25.

IPTL

–

e-trucks



This division saw its best-ever quarter with sales of 65 trucks.



As of FY25, 205 EV trucks have been deployed in the market, of which 172 are

from IPTL.



TII continues to adopt a direct selling model in this business.



One of the key learnings in this business is that the lead time for sales is very

high in trucks business given that multiple stakeholders are involved, including

customers, financiers, charging infra, etc.



Medical devices



This division reported a loss in 4Q as the export ramp-up did not happen on

expected lines.



TII has applied for CE certification in Europe, which is taking longer than

expected. It expects to receive this certification within a couple of quarters,

after which TII expects exports to ramp up as planned. After this, the division

can be back in profitability.



TII continues to explore inorganic growth opportunities in this space.

Other highlights



Capex guidance for FY26 stands at INR3b for the core business. Beyond this, TII

would look to invest in growth opportunities in TI Medical, CDMO and others.



For any new business, TII targets RoCE of 25% on stable operations.



Mobility division: This division is already in black and TII expects to focus on

exports for this business for sustainable growth.



CDMO: Construction for the new plant has started and is expected to be

operational from 3Q or 4QFY26. Management expects this business to

materially ramp-up from FY27.



Write-offs taken in 4Q: TII has taken a write-off toward investment of INR157m

in Moshine Electronics. It has done this as the margin expectations from this

business have not been met. TII has also taken a write-off in Aerostrolvilos



June 2025

AUTOMOBILE | Voices

Energy Pvt Ltd of INR35m. This was an investment in a start-up, which is not

ramping up on expected lines.

TVS Motors

Current Price INR 2,717

Click below for

Detailed Concall Transcript &

Results Update

Neutral

Update on PLI



In Q4, TVSL realized PLI benefits for the entire year. Adjusted for the PLI benefit,

revenue stood at INR93.4b and its margin was in-line with our estimate of 12%.

Including the PLI benefit for Q4, the margin would stand at 12.5%.



TVSL has also applied for PLI benefits for its 3W EV segment and expects

approval shortly.

FY26 outlook



According to management, the rural market, which posted healthy growth in Q2

and Q3, witnessed some slowdown in Q4FY25. Even in April, urban growth

outpaced rural growth.



The 2W industry is witnessing flat sales on a YoY basis in April.



However, with the upcoming marriage season in May-June and favorable

sowing patterns across India, management expects rural demand to revive over

the coming months.



Management expects 2W

industry’s growth rate to remain moderate in Q1,

given the high base of last year. For FY26, it expects 2W growth to be similar to

FY25 levels.

Update on the exports momentum



The company is seeing strong demand from Latin American market, and the Sri

Lankan market is also beginning to open up.



However, growth challenges persist in the Middle East.



Management believes that while the African market remains weak, it likely

bottomed out in FY25 and is expected to pick up in FY26.



As a result, management expects 2W exports to post healthy growth in FY26.

Update on TVS Credit



The book size of TVS Credit improved to INR26.5b. For FY25, TVS Credit posted a

strong 35% YoY growth in PBT to INR10.3b.



GNPAs for FY25 were under control at 2.9%.



Management acknowledged that financing has become somewhat tighter in

2Ws. However, it continues to focus on driving quality growth.

Capex and investment guidance



For FY25, capex stood at INR18b, primarily allocated toward new product

development (ICE + EVs and 2Ws + 3Ws), tech-related investments, and some

capacity addition, primarily for Jupiter 110, given the strong market response to

the new model.



Investments in subsidiaries for FY25 stood at around INR21b. For FY26,

investments in subsidiaries are likely to be at similar levels, with a focus on TVS

Credit, Norton, and the e-bike subsidiary.



Norton is likely to launch new products by the end of FY26.



According to management, these are long-term investments that are expected

to yield strong results, and there is currently no need to provide for any write-

offs in any of these investments.

Other highlights



For FY25, TVSL continued to outperform, posting a 9% YoY growth in the 2W ICE

segment, compared to the industry growth of 7%.



In exports, TVSL grew 23%, ahead of the industry growth of 21%.



The recently upgraded Jupiter 110cc has been well-accepted in the market, and

management is exploring ways to fully leverage its potential going forward.

June 2025

AUTOMOBILE | Voices



TVS I Qube is now available at 950 dealers across India.

TVSL’s 3W EVs have been well-accepted

in the market, according to

management. However, the product has been launched only in select markets in

the North and East so far. The L5 3W EV market is growing rapidly and has

already reached 28% penetration. As with 2Ws, TVSL aims to remain a

prominent player in 3W EVs.

Spare parts revenue for Q4 stood at INR9.1b. Exports revenue for Q4 stood at

INR23.9b.

EV revenue for FY25 stood at INR33.64b, and the same for Q4 stood at INR8.9b.

June 2025

CAPITAL GOODS | Voices

CAPITAL GOODS



| Voices

Management maintains a positive outlook across key sectors, including power T&D, renewable energy, data

centers, cement, steel, construction, oil & gas, and defense. Public capital expenditure is starting to pick up,

while private sector inquiries are expected to materialize in coming quarters. In the defense sector,

management commentary remains highly optimistic, forecasting a ramp-up in order inflows in the near term

on account of emergency procurement, as well as for the medium-to-long term led by both base and large

ordering. In the powergen industry, various management teams are of the view that genset volume declines

are now bottoming out and prices are firming up across product nodes. Management commentary on the

railways sector remained mixed, with some anticipating a pickup in ordering activity over the coming quarters,

while others expect the current slowdown to persist in the near term.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Outlook

Cummins



KOEL



L&T



Thermax



HAL



Bharat Elec.



Triveni Turbine



Hitachi Energy



Kalpataru

Projects



Domestic Capex Cycle



Robust demand from data centers, quick commerce,

real estate, etc.

Double-digit revenue growth guidance for FY26.



Industrial demand is robust led by construction and

railway sectors.



Strong demand from the construction and defense

sector in industrial business, and on the genset side,

To be USD2t by FY30.

the demand seems to be stabilizing with increased

focus on HHP sales.



The company is positive that the Indian economy is

FY26 Order inflow +10% YoY with prospect

expected to remain resilient supported by robust

pipeline of INR19t (+57% YoY), revenue growth of

consumption from households alongside the

15% YoY, and margin guidance of 8.5%.

government's continued focus on capex.

Overall margin expected to reach double-digit, led



Significant improvement is expected in order inflows

by an expected high teen margin in chemicals,

by opportunities in steel, power, waste-to-energy,

strong backlog in Industrial products, increasing

refining, petrochemical, and cement sectors - with

share of profitable orders in Industrial Infra, and a

the latter two expected in 2HFY26.

sharp reduction in losses in green solutions.



Key opportunities include follow-on orders for 97 LCA

Mk1A, 143 ALHs, and upgrades for 40 Dornier aircraft.

The company has a strong future order pipeline of

In addition, the INR600b Sukhoi-30 avionics upgrade

INR1t expected to materialize over the next 1-2

and Tejas Mk2 production program (set to start

years and 8-10% revenue growth was guided.

around FY31) represent significant long-term revenue

streams.



Rightly positioned to benefit from the expected

BEL expects an order inflow of INR270b and

upcoming emergency procurement list and also well

revenue growth of 15% with an EBITDA margin

positioned to cater to wider defense electronics

of 27% for FY26. It is also targeting export

components across the Army, Navy, and Air Force

revenue of USD120m.

spread over the next few years.

Domestic order inflows to improve on the back of



Management is optimistic about the domestic order

improving inquiries.

inflow pipeline coming from process cogeneration

Earmarked INR1.65b for capex in FY26

(doubling YoY), steel, cement, oil & gas, recycling, and

food processing.

(including INR440m carry forward form FY25).



Robust traction in power T&D and renewables.

Margins to be in double digits.

Seasonal decline witnessed in data centers and

industrials.



Robust growth is expected for T&D in domestic and

FY26 to see 20% revenue growth, PBT margin at

international markets.

5.25-5.50%, NWC below 100 days and order inflow



Healthy prospects for design-build contracts,

guidance of ~INR260-280b

residential and airport infra.

FY26 revenue guided at INR250b (+15% YoY), with

an EBITDA margin of 8-8.5%.

Order inflow target of INR300b with 70% coming

from T&D.



KEC Intl



The tendering pipeline in both India and

internationally is very strong at ~INR1.8t.

June 2025

CAPITAL GOODS | Voices



Zen Tech.



Revenue guidance of INR13.5b/20b/30b over

FY26/27/28.

EBITDA/PAT margins of 35%/25% reaffirmed for

the coming years



Management expects INR8b in orders in 1HFY26,

with INR1.5b already received.



ABB India

Current Price INR 6,032



Buy

Click below for

Results Update



Order book and inflows:

During 1QCY25, the company witnessed a healthy 4%

YoY growth in overall orders, with base orders rising 10% and export orders

expanding significantly by 40%. A notable large order of INR2b in the railways

contributed to the order inflow

growth. The total order backlog as of Mar’25

stood at INR100b, up 11% YoY. This robust backlog provides strong visibility for

revenue realization in the coming quarters, with management expecting two-

thirds of the order book to be executed in CY25 and the remainder extending

into CY26. However, the process automation segment (10-15%

of ABB’s

business) faced sluggish order inflows due to macro uncertainties and

customers delaying large project decisions.

Diversifying business in high/moderate/low-growth segments:

ABB continues

to diversify across three distinct market segments: high-growth, moderate-

growth, and low-growth areas. High-growth sectors include data centers,

electronics, smart buildings, traction/railways, and green cement, all benefiting

from technological advancements and rapid execution cycles. Moderate-growth

segments include core infrastructure and industrial markets with steady 8-12%

growth. Low-growth but high-volume segments still contribute about 45% of

ABB’s portfolio. These segments

are seen as future opportunities as capex cycles

revive. The company maintains an active presence across all segments to

balance cyclical risks and capture opportunities when sectors rebound.

Margins driven by macro factors:

ABB maintained strong margins in 1QCY25,

with operational EBITDA at 16.4%, consistent with previous quarters. Margins

were supported by favorable foreign exchange (INR200m positive swing YoY),

operational efficiencies, supply chain management, and localized production

benefits. Segmental profitability remained strong, with electrification margins at

24.7% and motion at 22%. Management expects to maintain PAT margins in the

12-15% range going forward, even amid macro uncertainty, driven by stable

price realization and operating leverage.

Expanding capacities:

Management stressed that ABB is actively expanding

capacities across process automation, electrification, and motion segments to

meet growing demand and support localization efforts. The expansion focus is

on businesses where volumes have increased significantly and product

portfolios have expanded to include localized offerings. Capacity addition is

carefully calibrated and demand-driven, ensuring optimal utilization without

overbuilding. Management confirmed that formal announcements of new

capacity expansions will be made as projects reach execution readiness.

Capex Plans:

Management mentioned that the company will be looking for

both, organic as well as inorganic expansion opportunities. Current organic

capex of ABB is focused on expanding capacity in business units where volumes

and product demand justify it. Simultaneously, the company is evaluating

several M&A opportunities but is taking a measured, value-driven approach. No

acquisitions have been finalized yet. ABB has also increased dividends to reward

shareholders, demonstrating balanced capital deployment.

June 2025

CAPITAL GOODS | Voices



Factors to watch out for in CY25:

Management stated that in CY25, ABB will be

closely monitoring both domestic and global developments. Domestically, key

factors include trends in consumption, private and government investments,

premiumization, and strain in some parts of the economy. Globally, trade

uncertainties such as, geopolitical tensions, and general macro volatility could

influence customer decision-making. Despite these challenges, management

mentioned that the company’s strategy focuses on bottom-up

opportunity

capture - seeking growth in resilient sectors rather than being overly reactive to

macro headlines.

Details on ‘Others’ segment (sharp growth):

The “Others” category, which has

shown the fastest revenue growth over the past two years (from INR14b to

INR24.b) is powered by multiple product expansions. These include energy

management solutions for buildings and industries, the LIORA modular switch

range for commercial/residential buildings, expanded high-efficiency motors

(IE3/IE4), drive products, and traction components for electric buses and

locomotives. The segment’s growth is largely driven by strong localization

efforts and increased penetration into Tier 2, Tier 3, and Tier 4 cities across

India.

Foreign exchange utilization:

Management stated that ABB’s foreign exchange

usage for imports stood at around INR60b, or about 50% of total sales. Robotics

& discrete automation has the highest import intensity due to the lack of a

domestic ecosystem for many robotics components. Motion, particularly drive

products and system drives, has moderate-to-high import reliance.

Electrification also has a moderate import requirement for electronics and

specialized products. Process automation, being more project-oriented, has the

lowest direct import share but sources products from other divisions where

needed.

Cummins India

Current Price INR 3,349



Buy

Click below for

Detailed Concall Transcript &

Results Update



Domestic powergen:

Domestic powergen revenue declined 7% YoY in 4QFY25,

largely due to a high base effect from CPCB-II pre-buying in 4QFY24. However,

management confirmed that demand remains robust across segments like

residential, commercial, infrastructure, and emerging verticals such as quick-

commerce warehouses and data centers.

CPCB 4+ products:

Pricing for CPCB IV+ products has largely held steady, and

competitive intensity has now stabilized. Management emphasized that pricing

is still settling and is expected to stabilize fully in the next couple of quarters. It

anticipates CPCB IV+ volumes to return to or surpass CPCB-II levels over the next

one to two quarters, with current volumes tracking at 80-85% of prior norms.

No incremental price hikes have been taken since CPCB IV+ implementation,

and the company continues to focus on providing segment-specific solutions to

defend pricing and value proposition.

Industrial segment:

The industrial segment clocked 29% YoY growth in FY25,

with strong contributions from the construction and rail segments. Construction

demand remained stable, while rail orders (especially in power cars and diesel

electric tower cars) showed sustained momentum. However, in mining,

expectations of a pickup did not materialize as Coal India tenders were deferred.

Compressor segment, while currently stable, is anticipated to enter a cyclical

downturn. FY25 breakup

–

Construction: INR6.2b, Rail: INR4.7b, Mining:

INR1.3b, Compressors: INR2.0b, and Others INR2.4b. 4QFY25 breakup

–

June 2025

CAPITAL GOODS | Voices

Construction: INR1,680m, Rail: INR1,140m, Mining: INR140m, Compressors:

INR500m, and Others INR330m.

Distribution segment:

Though quarterly growth was modest at 5%,

management attributed this to order timing and project execution schedules

rather than demand weakness. Key drivers included extended warranties,

rebuild engine orders (especially in industrials), and retrofit solutions like dual-

fuel kits. New service offerings under the “Ashwasan” product suite are also

gaining traction. The company remains confident about future growth in this

segment, supported by higher penetration and value-added offerings.

Exports:

Exports grew 6% in FY25, with strong 39% YoY growth in 4QFY25. Latin

America and Europe were the strongest performing regions. Cummins continues

to focus on tailored go-to-market strategies for each region, including market-

specific positioning, pricing, and product offerings. While momentum is visible,

the global outlook remains uncertain due to ongoing geopolitical issues and

evolving trade and tariff policies, particularly involving the US. FY25 breakup

–

HHP: INR8.2b (+12% YoY), LHP: INR7.8b. 4QFY25 breakup

–

HHP: INR2.2b (+27%

YoY/+8% QoQ), LHP: INR2.2b (+51% YoY/flat QoQ).

4QFY25 revenue breakup: Industrial

–

INR3.8b (+9% YoY), Powergen

–

INR8.7b

(-7% YoY), Distribution

–

INR6.3b (+5% YoY), HHP exports

–

INR2.2b (+27% YoY),

and LHP exports

–

INR2.2b (+51% YoY).

Guidance:

KKC has guided for double-digit revenue growth in FY26. The growth

is expected to be driven largely by domestic demand across the powergen,

industrial, and distribution segments. Continued cost optimization and product

value enhancements remain vital for sustaining margins.



Kalpataru Projects

Current Price INR 1,150



Buy

Click below for

Detailed Concall Transcript &

Results Update



T&D segment

–

KPIL’s T&D segment delivered a strong performance in FY25,

with revenue crossing INR100b, reflecting a 28% YoY growth. The company

secured INR145b worth of new orders, split almost equally between domestic

(INR73b) and international markets (INR72b). Key wins in the HVDC domain

have significantly enhanced KPIL’s market position and order book visibility.

International subsidiaries, particularly LMG Sweden, also contributed with

record revenues and order book levels. Management remains optimistic about

the T&D segment’s growth, citing strong momentum from energy transition,

grid strengthening initiatives, and rising power demand. In FY26, management

anticipates continued robust growth in both domestic and international

markets, with an expectation of surpassing FY25 order inflows. Labor availability

is seen as a potential constraint, but the overall outlook remains bullish.

Non-T&D

–

The B&F business grew by 22% with an order inflow of INR82.3b and

a closing order book exceeding INR140b. Orders were primarily in residential

and airport infrastructure, with healthy prospects for design-build contracts and

further growth in FY26. The O&G segment registered more than 100% growth in

FY25, reaching INR17.6b in revenue, mainly driven by the ongoing Aramco

project. Although the company did not pursue new orders in O&G during FY25,

it is optimistic about strong growth and new order inflows in FY26, particularly

from the Middle East markets. The Railways segment, on the other hand,

remained subdued with revenue at INR10.2b. KPIL continues to be selective in

this space due to intense competition and does not anticipate meaningful order

June 2025

CAPITAL GOODS | Voices

inflow in FY26 unless supported by international contracts. Overall, KPIL expects

continued growth in B&F and O&G, while railways and water will remain under

watch.

Water

–

The Water business underperformed in FY25, largely due to delayed

payments and deferment of fund allocations, which hindered project execution

and revenue growth. However, KPIL received significant collections towards the

end of the year (approximately INR5.7b in 4QFY25), marking an improvement in

cash flows. Receivables stood at around INR15b as of Mar’25, with around 60%-

70% expected to be recoverable by 2QFY26. While management remains

cautious on domestic bidding due to ongoing receivables challenges, it

continues to explore international opportunities in the water segment. For FY26,

KPIL has factored in a modest 10% revenue growth in this business but may

raise its guidance depending on the pace of collections and new wins in the

coming quarters.

Non-core assets

–

Management continues to take strategic steps toward exiting

or minimizing exposure to its non-core assets, including road SPVs and real

estate. During FY25, daily revenue from toll road SPVs increased to INR7.8m

from INR6.03m YoY. The company infused INR750m into the road segment,

largely toward debt repayment. The VEPL transaction is expected to conclude in

FY26, while WPL remains under discussion with NHAI. In the real estate

business, the company has nearly exited its Indore project, having sold 98% of

the units, with INR1.3b expected to be collected within next 60-90 days. KPIL

projects further loss funding of INR600-700m in FY26, mainly for debt

repayment. With the winding down of Saicharan (Indore), potential

monetization of VEPL, and improved cash flows from the road and logistics

business, the company expects reduced drag from non-core assets going

forward.

International subsidiaries

–

LMG Sweden delivered its best-ever results with

revenue of over INR18b (+79% YoY). In Brazil, Fasttel improved significantly,

growing revenue to INR9.39b (+35% YoY) and halving losses from INR700m to

350m. With a planned capital infusion, management targets to achieve the

breakeven in the next two years for Fasttel. The Saudi operations (IBN Omera)

closed out its projects and reported losses, but management expects a

turnaround in FY26.

Guidance

–

Management expects revenue growth of over 20% in FY26, driven

by a strong order book and improving execution. PBT margins are guided at

5.25%-5.5% for standalone operations and 4.5%-4.75% on a consolidated basis,

implying an improvement of 35bp-100bp YoY. With the tax rate projected to

remain in the 28-29% range, PAT is expected to improve in line with better

margins and higher execution. Order inflows are projected in the range of

INR260b-280b, slightly above INR254.8b in FY25, with a continued focus on

better-margin projects. NWC is targeted to be below 100 days. Except for

Railways, all other segments are expected to grow 10-22% YoY in FY26.



June 2025

CAPITAL GOODS | Voices

Kirloskar Oil

Current Price INR 875



Buy

Click below for

Detailed Concall Transcript &

Results Update



Powergen Segment:

Management reported that demand in the Powergen

segment is stabilizing after the CPCB IV+ emission norm transition, with volumes

returning to expected levels and pricing firming up across product nodes. A

major highlight was that KOEL surpassed the INR1b mark in HHP genset sales for

the first time, clocking a 20% YoY growth. The company launched several new

products, including the Sentinel, featuring the world’s smallest 1000 kVA genset,

and the Optiprime series with better fuel efficiency (10-15%) and lower

ownership costs (20-25% savings on maintenance). Looking forward, the

Powergen growth strategy is centered on tapping into the infrastructure and

data center segments, while continuing to build share in the HHP market.

Industrial Segment:

In the industrial segment, KOEL registered a 12% YoY

growth in FY25 despite the transition to BS V emission norms in Jan’25.

Management stated that this shift involved significant collaboration with OEMs

and customers, enabling KOEL to maintain or increase its share of wallet across

most accounts. A 20% average price increase was implemented in this segment

with minimal resistance. Additionally, KOEL is now manufacturing a 6MW

marine engine for the Indian Navy, where it will design, develop, and assemble

entirely in India. Management also noted that some unprofitable customer

relationships were strategically exited. Going forward, the company is optimistic

about continued growth from key accounts in construction, defense, and

railways, backed by a strengthened engine portfolio and deeper account

engagement.

Distribution Segment:

The distribution and aftermarket businesses grew 12%

YoY in 4QFY25, driven by a deliberate restructuring of KOEL’s service and sales

channel network. Management explained that the shift to electronic engines

due to emission norms required significant capability upgrades across the

network. Investments were made in training, tools, and dealership consolidation

to ensure partners had sufficient scale and profitability. These changes enabled

KOEL to better support its expanding HHP and technologically advanced product

portfolio. Despite the complexity, KOEL confirmed that the restructuring has

been effective, resulting in improved partner performance and sustained

growth.

Export Business:

Management acknowledged that while the export business has

nearly doubled over the past three years, it fell short of the originally envisioned

target of comprising 30% of total revenue. They attributed this to the time

required to build sustainable operations in regions

where KOEL’s brand is not

yet well established. Focus regions include the Middle East, Africa, and the

United States. In the Middle East, KOEL transitioned to a genset OEM model to

better manage local channel dynamics, while in the US, investments are ongoing

to certify and introduce KOEL products state-by-state. Management emphasized

that exports remain a strategic priority and require continued patience and

investment to build lasting global partnerships.

B2C Segment:

This segment showed a robust recovery, posting a 25% QoQ/10%

YoY growth in 4QFY25. The management highlighted that this performance was

possible due to the successful consolidation of five smaller plants into one mega

June 2025

CAPITAL GOODS | Voices

facility at Sanand, which led to improved product availability and manufacturing

efficiency. The management emphasized that this stabilization in operations has

begun translating into stronger financial performance, including a 269% QoQ

jump in profitability. Looking ahead, the management expressed confidence in

sustaining double-digit revenue and EBITDA growth in the B2C segment,

supported by ongoing efforts in cost optimization, both fixed and variable.

Capex Strategy

–

Past Investments and Future Growth Initiatives: Management

detailed KOEL's capex plans, highlighting significant past investments and

outlining a roadmap for future capacity and capability enhancement. In FY25,

KOEL invested approximately INR5.2b, of which INR3.8b was allocated to core

KOEL operations and INR1.4b to the B2C business for consolidating five plants

into one mega manufacturing facility at Sanand. Within KOEL's spend, INR900m

went into new product development, another INR900m went into capacity

expansion and sustenance, and INR200m into digitization and IT upgrades.

Looking ahead, KOEL has committed to investing an additional INR10b over the

next couple of years. This includes INR7b earmarked for enhancing engine

manufacturing capacity at the Kagal facility, INR800-900m for the Indian Navy

project, and another INR2b reserved for potential strategic acquisitions aligned

with its technology roadmap and USD2b growth ambition. Management

emphasized that these investments are critical to supporting KOEL's expanding

product portfolio, meeting future demand, and advancing its vision of becoming

a global leader in diversified power solutions.



KEC International

Current Price INR 872



Neutral

Click below for

Detailed Concall Transcript &

Results Update



TAM

–

KEC is targeting an INR1.8t opportunity pipeline, with T&D accounting for

half. Key growth geographies include Saudi Arabia, the UAE, and Oman, along

with strong demand in India. Civil prospects are strong in defense and

semiconductors, while renewables are driven by hybrid-storage projects. Cables

are expanding into international markets, particularly in North America.

Emerging high-tech opportunities like HVDC and Statcom are also being

pursued, aligning with KEC’s selective, margin-oriented

order strategy.

T&D

–

Revenue touched INR128b (+23%), with INR180b in new orders. Strong

traction is being seen in India and GCC. The capabilities of the segment have

been expanded into HVDC and digital substations. The segment is set to outpace

overall growth with 10%+ margins and strong visibility.

Civil segment

–

Civil generated INR44.8b in revenue in FY25, which was hit by

water project delays. Key Metro handovers were completed. The company

targets 25%+ growth in FY26 with an INR100b pipeline. The focus of the

company is on fast-moving, margin-rich projects and tech-led execution.

Railways segment

–

Rail revenue stabilized at INR21b in FY25. Legacy projects

are winding down and new orders will be focused on less risky segments like

ventilation and metros. 30–40% of staff in the division have been redeployed.

With cautious global expansion underway, the segment is expected to turn

profitable by FY27.

Cables business

–

Seeing strong momentum with revenue reaching high levels

crossing INR18b in FY25. FY25 also saw the commissioning of an aluminum

conductor plant and the launch of UL-certified cable exports to the US, signaling

June 2025

CAPITAL GOODS | Voices

entry into a large, high-value market. The company expects revenue to reach

INR35b by FY27 and EBITDA margins to improve from 5.7% in FY25 to 8%.

Capacity expansion

–

The aluminum conductor facility in Vadodara was

commissioned in 4QFY25, and investments are ongoing for E-beam and

elastomeric cable lines to support INR10b in incremental revenue. KEC has

successfully debottlenecked the Dubai, Jaipur, and Jabalpur facilities for tower

manufacturing increasing capacity from 422k MTPA to 468k MTPA of towers.

O&G

–

The oil and gas segment reported a revenue of INR3.6b, with growth

remaining muted due to a slowdown in domestic tendering activity. However,

the business achieved strategic progress by securing its first composite design-

supply-build order and advancing execution on its maiden international project

in Africa. The company is now focusing on expanding its footprint through

selective participation in global opportunities.

Guidance

–

FY26 revenue is guided at INR250b (+15% YoY), with an EBITDA

margin of 8-8.5%. Legacy drag is easing, and T&D will drive margin gains.

Management remains confident of 9%+ in FY27. The order inflow target is

INR300b with ~70% coming from T&D. The company has also targeted a capex

of INR4b for FY26.



Larsen & Toubro

Current Price INR 3,642



Buy

Click below for

Results Update



Order book up 22% YoY:

As of FY25 end, the order book stood at INR5.79t,

reflecting a strong 22% YoY growth. Order inflows during the year reached

INR3.57t, up 18% YoY. The order book is now more evenly split between

domestic (54%) and international (46%) operations. The domestic order book

consists of orders from PSUs (38%), state governments (26%), the central

government (15%), and the private sector (21%). Furthermore, about 14% of the

total order book is supported by funding from bilateral and multilateral

agencies.

Strong ordering prospects for FY26

–

INR19t (+57% YoY):

Management

indicated that the company has a robust order prospect pipeline of INR19t for

FY26, which is a substantial 57% increase compared to the INR12.1t pipeline at

the beginning of FY25. Infrastructure contributes INR9.64t to the pipeline in

FY26 vs. INR7.25t in FY25, aided by segments such as heavy civil infrastructure

(26%), transportation (17%), renewables (15%), power transmission and

distribution (14%), buildings and factories (11%), water (10%), and minerals and

metals (7%). The energy segment's pipeline has grown significantly to INR9.07t,

driven by hydrocarbon (INR7.47t), carbon-light solutions (INR0.9t), and green

and clean energy (INR0.7t). The hi-tech manufacturing segment has a pipeline of

INR0.29t, slightly lower than the INR0.34t in the previous year.

Defense ordering to pick up:

Management talked about LT’s increased

opportunities in the defense manufacturing space, particularly as the Indian

government pushes for higher indigenous content in its capital outlay. The

company is active in both land-based and sea-based systems and is well-

positioned to benefit from the ‘Make in India’ initiative. Although defense still

constitutes a small portion of the company’s overall portfolio, management

believes that the order inflow in this segment will grow at a faster pace going

June 2025

CAPITAL GOODS | Voices

forward. They added that while defense may not significantly move the needle

at the consolidated level in the near term, it remains a strategic growth area.

Working capital efficiency drives RoE:

Management emphasized that the

company has continued to strengthen its balance sheet, with net working

capital improving to 11% of sales from 12% in FY24. This improvement has

contributed to an increase in RoE to 16.3% in FY25 from 14.9% in FY24 (+140bp).

The company achieved 18% YoY growth in collections to INR2.35t and generated

a robust FCF of INR174b for the year.

GCC capex broadening:

Management said that GCC capex continues to be a

major driver of international order inflows for LT, with the region accounting for

a dominant 81% of the company's international order book. They emphasized

that GCC spending has become far more broad-based than in the past,

extending beyond oil to sectors like power transmission, renewables, green

infrastructure, and industrialization. Countries like Saudi Arabia, Qatar, the UAE,

and Kuwait are maintaining their large capex programs despite global volatility,

with significant investments underway in hydrocarbons, gas-to-power, and

energy transition initiatives. Management confirmed that these markets remain

familiar and well-established operating territories for LT, where execution

challenges are minimal due to longstanding client relationships and deep local

presence. Although localization mandates, such as requiring 30% of the

workforce to be hired locally, are raising labor costs, the company believes this

is being offset by faster project execution cycles and higher client trust, which

continue to drive healthy return ratios.

Hyderabad metro performance:

On Hyderabad Metro, management said that

average daily ridership increased to 470,000 pax/day in FY25 from 441,000 in

FY24. However, this is still below its potential due to external factors such as

free public bus travel schemes. The company continues to focus on operational

improvements and monetization of transit-oriented development assets, which

yielded a gain of INR1.87b in FY25.

Thermal power opportunities:

Management mentioned that during FY25, the

company’s power business

- now renamed as part of the "Carbon Light

Solutions" portfolio - secured significant orders, including two boiler and turbine

generator contracts from NTPC. These wins made FY25 the segment’s best year

ever for order inflows. Regarding thermal power, management reiterated that it

will avoid participating in ultra-mega power projects

(UMPPs),

particularly those

dominated by public sector undertakings, due to unfavorable terms of trade for

EPC players. While coal will remain a part of the energy mix in the medium term,

the company plans to shift its focus toward oil, gas, and green energy segments

to align with future trends and policy direction.

FY26 guidance:

For FY26, management provided guidance of 10% growth in

order inflows, factoring in a conservative outlook due to global uncertainties

and potential softness in domestic activity in the first half. Revenue growth is

expected to be 15% YoY, while the core E&C margin is targeted to be at 8.5%,

slightly up from the previous year’s guidance of 8.25%. The company expects to

maintain a net working capital-to-revenue ratio of 12%, and anticipates stronger

execution momentum in the second half of the year.



June 2025

CAPITAL GOODS | Voices

Thermax

Current Price INR 3,531



Sell

Click below for

Results Update



Order Pipeline

–

Thermax’s order pipeline for FY26 is broad-based

and

promising, despite a miss in 4QFY25 due to a large project loss and some

deferments. Management expects significant improvement in order inflows

driven by opportunities in steel, power, waste-to-energy, refining,

petrochemical, and cement sectors - with the latter two expected mainly in

2HFY26. The company is also eyeing international projects in the Middle East

and Southeast Asia.

Industrial Products

–

It delivered an excellent FY25 with strong profitability and

robust growth, backed by a ~20% higher order backlog YoY. The division’s

fastest-growing segments are water solutions and air pollution control, while

heating solutions remain the most profitable. Cooling products, boosted by

innovations such as heat pumps and advanced cooling towers, are poised to

become the fastest-growing. The international share of this business is also

rising, aided by capabilities in water and air products as well as subsidiaries like

Danstoker and PTTI. Product innovation remains a core focus, with cutting-edge

offerings in zero liquid discharge, ultra-pure water, biomass boilers, and electric

heating systems strengthening the portfolio.

Industrial Infra

–

The segment is poised for a stronger FY26 after several

cautious quarters. While legacy projects in FGD and Bio-CNG impacted margins

in FY25, most FGD projects are expected to be completed within FY26, with

minor spillover into FY27. New project orders are being selectively pursued

focused on profitability and execution capability. Management anticipates a

pick-up in order inflows from sectors like steel, power, waste-to-energy, and

large refinery and petrochemical projects. There is cautious optimism about

potential private sector thermal power projects as well. Internationally, key

opportunities are expected from the Middle East and Southeast Asia.

Bio-CNG Projects

–

Thermax faced significant challenges in its Bio-CNG projects,

particularly in the first set of projects with its JV partner EverEnviro. Despite

implementing numerous technology interventions that brought stability, the

projects failed to meet original yield guarantees. After extensive discussions,

both parties have realigned expectations, agreeing to recalibrate guarantees

based on achievable lower production levels. The company will add a digester to

improve output, with all costs, including new digesters and auxiliary equipment,

accounted for. In 4QFY25, Thermax absorbed over INR850m in Bio-CNG-related

hits, including technology provisions, project delays, and O&M costs, effectively

closing out the legacy risks. Execution of the necessary upgrades will continue

over the next seven months. Having paused new orders for a year to stabilize

the offering, the company now plans to selectively re-enter the Bio-CNG market.

After a year-long pause in new orders, the company expects to book two Bio-

CNG orders in 1QFY26 under more prudent terms. While still a nascent industry

with tight economics and a need for policy support, the management believes

TMX is well-positioned at the technological forefront to selectively grow in this

space going forward.

Green Solutions

–

The segment faced significant losses in FY25, particularly in

FEPN, but management expects a sharp reduction in losses in FY26. Steady

June 2025

CAPITAL GOODS | Voices

progress is being made in TOESL and other sub-segments. Thermax continues to

invest in emerging clean technologies, including hydrogen, carbon capture, and

sustainable .aviation fuels (SAF). A dedicated team is actively developing

solutions in these areas to build a future growth engine, even though near-term

profitability remains secondary to capability building in this vertical.

Chemicals

–

The division had a steady FY25, with EBITDA margins around 16%

—

slightly lower than historical highs due to product mix shifts, investments in new

business lines (construction chemicals, flooring, and Biltech), and costs related

to recent partnerships (WebPro JV, OCQ). A new plant commissioned in March

will add to capacity but also increase depreciation costs. Management expects

both revenue and profitability to improve in FY26, with margins targeted in the

high-teens range. Specialty chemicals, which faced cyclical headwinds in FY25,

are likely to recover in FY26, further supporting revenue and margin expansion.

Subsidiaries

–

Thermax’s international subsidiaries, notably Danstoker and PTTI,

which are part of the Industrial Products segment, are showing growing stability

and an increasing contribution to both domestic and export revenues. The

subsidiaries are expanding their capabilities, especially in water, air, and small

boiler solutions, helping to strengthen the company’s position in international

markets such as Southeast Asia, the Middle East, and Africa. Management

emphasized that subsidiary growth is an integral part of

the company’s

international strategy and expects their contribution to continue rising in the

coming years.



June 2025

CEMENT | Voices

CEMENT



Cement companies indicated that demand did improve in 4QFY25, driven by higher government spending,

strong housing demand, and favorable rural as well as urban trends. The all-India average cement price rose

~2% QoQ, led by a Dec’24 hike. The South saw a sharp ~10% price rise QTD, while prices of other

regions were

flat to slightly up (1–2%). Companies are balancing volume growth and profitability amid high competition,

with the top three players expected to add ~50mtpa capacity organically in FY26, sustaining supply pressure.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Insights and future outlook



Capex plans



UltraTech

Cement



Ambuja

Cements



Industry volumes grew ~4% YoY in 4Q. UTCEM’s

volume growth on a like-to-like basis was ~6% YoY.

Volume growth in FY26 should be in double digits on

a like-to-like basis. UTCEM will keep on looking for

growth and good inorganic opportunities.

Management highlighted that there was some

demand weakness at the beginning of FY26 due to

heatwaves; however, demand is likely to improve

going forward. Sustainable volume growth for the

industry should be 7-8%,

and UTCEM’s FY26 volume

growth on a like-to-like basis should be in double

digits. It has achieved cost savings of INR86/t in FY25,

and it aims to achieve further cost savings of

~INR214/t by FY27.

Cement demand is estimated to grow 6.5–7.0% in

4QFY25 (~4–5% YoY in FY25) and ~8% YoY in FY26,

supported by increased government spending. While

industry supply is expected to grow at 6% CAGR,

demand should grow at 7–7.5%, driving better

capacity utilization. Industry capacity is projected to

reach 950mtpa by 2030.

The company has achieved INR150–170/t of cost

savings so far, targeting INR500/t by FY28. Further

savings will come from: 1) increasing green power

share to 60% by FY28 (from 21% in FY25); 2) a 10-year

fly ash supply deal with Adani Power at a negative cost

of INR400/t; and 3) logistics efficiencies via sea

transport (target 10% share) and reducing the lead

distance by ~100km.



Capex in FY26 should be between INR90-100b including

capex announced for the cable & wire segment. This

includes INR70b for ongoing organic capacity expansions

of 27.1mtpa. Capex in FY27 should be lower, though

guidance will be given later.

The cement putty manufacturing plant (Wonder

WallCare) has been acquired and the acquisition should

be completed in the next few days. Turnover of this plant

was INR786m in FY24 and the acquisition has been done

at an EV of INR2.35b.



Shree Cement



Demand recovered strongly in 4Q, driven by

infrastructure, residential, and commercial

construction, aided by higher government capex and

a good monsoon. Cement demand is expected to

grow ~6.5–7.5% in FY26, with volumes estimated at

39mt (~10% YoY growth).

It prioritizes profitability over aggressive volume

growth, aiming to balance price and volume in an

oversupplied market. Better realizations were driven

by premium product focus, strong brand positioning,

and a favorable geo-mix.



The total installed grinding capacity has reached 100mtpa

with the acquisition of Orient Cement, Farakka GU

commissioning, and debottlenecking efforts. With Sankrail

and Sindri GUs to be commissioned in 1QFY26, capacity

will rise to 118mtpa, on track for 140mtpa by FY28—

largely through organic expansion, though inorganic

options remain open.

A 4mtpa clinker unit at Bhatapara (Chhattisgarh) and GUs

at Sankrail (WB) and Sindri (Jharkhand) will be operational

by 1QFY26, with Salai Banwa (UP) GU by 2QFY26. Another

4mtpa clinker unit at Maratha (MH) and GU at

Warisaliganj (Bihar) are due by FY26-end. These will

include 42MW WHRS and 30% AFR provision.

Kalamboli (MH) GU expansion is slated for 3QFY26.

Brownfield expansions at Bhatinda, Marwar, and Dahej,

along with a 3mtpa IU at Jodhpur (from Penna), will also

be commissioned by 3QFY26. Nine additional GU projects

are in the pipeline to support FY28 targets. Growth capex

is pegged at INR60b, with another INR25–30b for

efficiency upgrades.

In Apr’25, the company commissioned two grinding units

(GU) - 1) 3mtpa in Etah, Uttar Pradesh; and 2) 3.4mtpa at

Baroda Bazar, Chhattisgarh. With the Etah grinding unit,

the company would try to cater to central and eastern UP

markets.

SRCM plans to commission 3.0mtpa (each) at Jaitaran,

Rajasthan, and Kodla, Karnataka in 1QFY26 and 2QFY26,

respectively. However, the company has decided to defer

one GU at Jaitaran. Its cement capacity is expected to rise

to 68.8mtpa in FY26. Its clinker capacity is expected to

increase to 44mtpa in FY26 from 36.7mtpa currently.

Capex was pegged at INR30.0b in FY26.

Jaisalmer limestone was awarded in 2008, but after

various legal appeals, the final order granting permission

was received recently. Expansion at Jaisalmer and Gujarat

is part of its long-term expansion strategy.

June 2025

CEMENT | Voices



Dalmia Bharat



In 4QFY25, economic activity recovered after a slow

1HFY25. Cement demand is expected to grow ~3–

3.5% in FY25 and accelerate to ~7–8% in FY26, aided

by government spending and pent-up demand.

Pricing improved modestly in the east but declined in

the south, where Andhra Pradesh and Telangana

remain oversupplied, unlike more consolidated Tamil

Nadu and Kerala. Despite material price hikes in

Apr’25, management is cautiously optimistic about

their sustainability. Blended price increases were

INR10–15/bag.



J K Cement



Volume growth is strong in Central India, with North

and South regions tracking market growth. March

demand was driven by housing and infrastructure,

with 65% of grey cement volume from North and

South, and 35% from Central/East.

Grey cement sales are guided at 20mtpa in FY26

(~12% YoY growth), mainly from the Central plant

ramp-up and 0.5mt from expansions. Prices rose 1%

in North and Central, and 5–7% in South, while

Maharashtra saw smaller increases.



Birla Corp



JK Lakshmi

Cement



BCORP saw strong demand improvement in 4QFY25,

driven by a gradual recovery in the North and East

regions, boosting volumes and realizations. Near-

term visibility is stable, with volume growth of ~6–8%

expected in FY26.

North and East led realization gains, supported by

price improvements and demand; East had higher

price gains despite limited exposure, while North

rebounded from a weak 3QFY25 base.

Central India continued to face headwinds along with

muted demand. Pricing in this region remained

largely flat, impacting realizations.

The Mukutban plant, despite pricing pressures in

Maharashtra, has emerged as a volume growth

engine and is operating at high utilization levels of

~80% in FY25, expected to reach ~85% in FY26.

There was improved demand in 4QFY25 across

geographies. After the elections, the infrastructure

push by the govt has led to improved traction in both

rural and urban housing and in the industrial and

commercial segments, which aided volume recovery.

The cement industry is likely to grow at ~6.5-7.0% in

FY26 (earlier estimate of 7.5-8.0%). JKLC aims to

outpace the industry with ~10% volume growth

target.

Prices have remained flat across key geographies

(North, Gujarat, Chhattisgarh, and Odisha) in 1QFY26

so far, and management does not expect a significant

uptrend until after the monsoons when demand

improves.



In Q4FY25, Dalmia commissioned a 2.4mt GU in Assam

and a 0.5mt GU in Bihar, completing Phase 1 of its

expansion. A clinker unit at Umrangso (Northeast) is

expected in 2QFY26. Total grinding capacity reached

49.5mtpa by FY25-end.

Dalmia incurred INR27b capex in FY25, including INR980m

in group captive RE SPVs. For FY26, INR35b is allocated for

expansions at Belgaum and Pune, Umrangshu clinker line

completion, and land/maintenance. Its next expansion

roadmap, targeting 75mtpa by FY28, will be unveiled in

1QFY26 with capex and funding details.

In FY25, ~52mtpa of capacity changed hands, reflecting

ongoing sector consolidation.

FY25 capex was INR17.2b, mainly for Panna expansion

(INR12.2b). The 3.3mtpa clinker unit at Panna and 1mtpa

grinding units at Panna, Hamirpur, and Prayagraj are on

track for

Dec’25 commissioning. A 3mtpa Bihar grinding

unit (INR1.6b capex) is also expected by Dec’25.

FY26 capex is estimated at ~INR18b, mostly for Panna

expansion (~INR14b), with INR3b for maintenance. JKCE is

seeking Jaisalmer plant approvals, expected by 2QFY26.

Target installed capacity is 50mtpa by FY30, with potential

expansions in Jaisalmer, Karnataka, Odisha, and Panna.

Limestone mining approval in Odisha is pending, with

updates expected in 3-4 months.

A Capex of INR4.4b was incurred in FY25, and the

company has guided for a capex of INR11b in FY26.

The company announced capacity expansion to 27.6mtpa

by FY28-29 from 20.0mtpa currently. Key projects include

1) 3.7mtpa brownfield clinker capacity at Maihar, Madhya

Pradesh (to be commissioned by 3QFY28) and three

greenfield grinding units with a combined capacity of

6.2mtpa in central India (3.4mtpa) and Bihar (2.8mtpa) to

become operational by FY28-29. The total estimated

capex is INR43.4b. A 1.4mtpa grinding unit at Kundanganj

will be commissioned in 2QFY26, while 1.4mtpa units at

Prayagraj and Gaya Phase-1

are expected by Dec’27,

raising grinding capacity to 25mtpa by FY28.



Surat GU Phase-I, adding 1.35mtpa capacity, will be

commissioned in two phases—half

by Jun’25 and the rest

by Dec’25—strengthening the company’s presence in

western India.

Public hearings for the Durg project and related mines are

complete, with environmental clearance pending. The

equipment scope is finalized and tenders floated, though

orders have not been placed yet. Commissioning is

expected by 3QFY27.

JKLC is setting up Greenfield grinding units in Prayagraj

and Madhubani, with land acquired and approvals in

progress. These units may be commissioned before the

Durg clinker plant, initially using excess clinker capacity.

Northeast expansion via Agrani Cement is delayed 7-8

months due to local issues. JKLC has paid INR1.3b of the

INR3.25b acquisition, with the remaining payments tied to

milestones. The 1mtpa clinker and 1.5mtpa grinding capex

plan remains unchanged and the company is committed.

FY26 capex is guided at INR13b (INR11b for JKLC projects

including Durg, INR1.5b for northeast, rest for Udaipur).

FY27 capex is expected at INR18b (INR10b JKLC, INR8b

northeast). Conveyor belt and railway siding projects will

be completed

by Mar’26 with INR700-800m

capex

included.

June 2025

CEMENT | Voices

Ambuja Cements

Current Price INR 550

Buy

Click below for

Detailed Concall Transcript &

Results Update

Demand and pricing



Cement demand is estimated to grow between 6.5% and 7.0% in 4QFY25 (~4-5%

YoY in FY25) and should improve ~8% YoY in FY26. Demand growth will also be

supported by higher government spending. Industry supply should be at 6%

CAGR; whereas; demand should increase at 7-7.5% CAGR and hence, there should

be an improvement in capacity utilization. The industry should reach 950mtpa

capacity by 2030.



Cement prices improved between INR7-10/bag in 4Q. The current price increase

on average is better than in 4Q.

Acquired assets of Penna Cement and Sanghi Industries



Penna Cement is operating at 75-80% clinker capacity utilization; though; grinding

utilization is lower (60-75%).

Sanghi Industries’ acquired assets have not yet

achieved the desired profitability, but it will be a clinker hub for the group with

one of the best cost structures and clinker production costs.



The combined volume from both these acquired assets was at 1.6mt in 4QFY25.

Exit-capacity utilization for Sanghi Industries was ~40-45%.

Operational highlights



Sales of premium products increased to 29.1% of total trade volumes; up by 5.3pp

YoY. It is investing in branding activities and targeting consistent supply quality to

increase the share of premium products and targets to reach 35% by FY26.

Premium products’ realization is higher by INR200-300/t

higher than normal grey

cement.



Green power contributed to 26.1% of total power requirements vs. 15.6% in

4QFY24. 99MW wind power capacity at Khavda has been commissioned taking

the total capacity to 300MW. It will reach to 1,000MW capacity by Jun’26.



Long-term arrangements for fly ash will fulfill ~40% of requirements and the

target is to increase it to 50%+ by FY28. Power cost/unit reduced by INR0.20-

0.25/unit compared to 3QFY25. The target is to maximize the usage of domestic

coal (~40% in kilns).



The target remains to achieve opex/t of INR3,650 by FY28 vs. INR4,016 (for

standalone ACEM) in 4QFY25

Cost-saving initiatives



It has achieved INR150-170/t of cost savings till now. Further cost saving (out of

total targeted cost reduction of INR500/t by FY28) will be achieved from 1) higher

RE investments- green power share to be increased to 60% by FY28 vs. 21% in

FY25; 2) better cost fly ash procurement (10 years’ agreement with Adani power

to procure 5b tons at a negative cost of INR400/t); 3) cost savings through

logistics-sea transportation (target to reach 10% by FY28) as well as lead distance

reduction. The target is to reduce the primary lead distance by ~100km.



Kiln fuel cost was reduced by 14% to INR1.58/kcal vs. 1.84/kcal. Logistics cost

declined 2% on account of footprint optimization and closer-to-market strategy.

Primary lead distance has been reduced by 15kms to 265kms and secondary lead

reduced by 2kms to 46kms. Direct dispatch to customers increased by 6pp YoY to

58%.

June 2025

CEMENT | Voices

Capacity expansion and capex plan



Total installed grinding capacity has increased to 100mtpa with the acquisition of

Orient Cement, commissioning of the Farakka grinding unit, and debottlenecking

of capacity at various plants. GUs at Sankrail and Sindri will be commissioned in

1QFY26 and the total capacity will reach 118mtpa by FY26 and it remains on

course to achieve 140mtpa capacity by FY28. This expansion will largely be driven

through organic plans; though the company is not averse to inorganic

opportunities.



The clinker unit of 4mtpa at Bhatapara in Chhattisgarh and the associated grinding

units in Sankrail (West Bengal) and Sindri (Jharkhand) will be commissioned by

1QFY26. GU at Salai Banwa (Uttar Pradesh) is expected to be commissioned by

2QFY26. Another clinker unit of 4mtpa at Maratha (Maharashtra) and GU in

Warisaliganj (Bihar) are expected to be commissioned by FY26-end. These new

clinker units will have 42MW of WHRS and provision for utilizing 30% AFR

(alternate fuels) in kilns.



Kalamboli (Maharashtra) grinding unit expansion is likely to be commissioned in

3QFY26. The brownfield expansions of Bhatinda (Punjab), Marwar (Rajasthan),

and Dahej (Gujarat) along with an integrated unit (3mtpa clinker capacity) at

Jodhpur (Rajasthan)

–

which was under construction at the time of Penna

acquisition

–

will be commissioned by 3QFY26.



It has also identified nine additional grinding unit projects for which land

acquisitions and statutory approvals are under process and would help to achieve

targeted capacity by FY28.



Growth capex should be at INR60b and further, INR25-30b will be spent on

efficiency improvements.

Other highlights



Limestone reserves:

367mt of new limestone (2 in Madhya Pradesh and 1 in

Assam) reserves were secured in 4QFY25 and the group has now 9b+ tons of

limestone reserves. The company will evaluate its strategy for entering into the

North East region in due course.



Commentary on ACC:

Investment in land is in the Western part of the country

where the plan is to set up a grinding unit as well as to acquire coal blocks and

limestone units. This land is near Chanda. There have been investments of

~INR7.5b for GCFC wagons; ~INR5b for grinding units apart from WHRS units at

Chanda and Wadi-2 line. Operations at a few old clinker units (Bargarh, Chaibasa,

and Wadi-1) are unfeasible, and hence; impairment has been provided and these

units are not being used for clinker production. Clinker capacity is at 1mtpa each

at Wadi-1 and Bargarh and 0.6mpta at Chaibasa. The Bargarh unit is now being

used for grinding. It is in the process of dismantling the Wadi-1 clinker unit. These

assets can still be operated based on the coal pricing scenario.



Liquid cash stood at INR101b vs. INR160b in Mar’24. The cash outflow for Orient

Cement’s acquisition will be INR56b.

June 2025

CEMENT | Voices

Birla Corp

Current Price INR 1,367

Buy

Click below for

Detailed Concall Transcript &

Results Update

Demand and pricing



BCORP remains optimistic on demand trends, having witnessed a notable

improvement in 4QFY25. The company indicated a gradual recovery in the North

and East regions, which drove growth in both volumes and realizations. While

near-term visibility remains stable, full momentum restoration is expected to

continue into FY26, with the volume expected to grow between ~6%-8%.



North and East regions contributed the most to realization gains, supported by

sequential price improvement and better demand traction. East saw relatively

higher price gains, though the company has limited exposure there. The North

recovered from a depressed base in 3QFY25 and contributed significantly in 4Q.



Central India continued to face headwinds along with muted demand. Pricing in

this region remained largely flat, impacting realizations.



The Mukutban plant, despite pricing pressures in Maharashtra, has emerged as a

volume growth engine and is operating at high utilization levels ~80% in FY25,

expected to reach ~85% in FY26.

Operational performance



The company’s capacity utilization stood at ~105% in 4QFY25 vs. ~97%/92% in

4QFY24/3QFY25. Blended cement sales stood at 82% in 4QFY25 vs. ~84%/79% of

total volumes in 4QFY24/3QFY25. Trade share stood at ~73% of total volumes in

4QFY25 vs. ~71%/68% each in 4QFY24/3QFY25. Premium products contributed

~59% of trade volumes in 4QFY25 vs. ~55%/59% in 4QFY24/3QFY25.



The share of renewable power stood at ~25% in 4QFY25 vs. ~24%/26% in

4QFY24/3QFY25 The company continues to work on optimizing its energy mix,

power sourced from green energy (solar hybrid and Waste Heat Recovery

Systems), and plans this to increase this to ~36–37% going forward.



Fuel consumption costs stood at INR1.39/Kcal vs. INR1.50/Kcal in 3QFY25, with

the overall power and fuel costs showing a downward trend, aided by a higher

green power share.



Additionally, the Bikram coal mine is set for commissioning by 3QFY26, with

meaningful production ramp-up expected in FY27. While another coal mine,

Brahampuris, is scheduled to start production in FY28. The lead distance was

~350km, while for the Mukutban plant, it was ~450km.



Accrued incentives stood at INR410m for Q4FY25 and INR1.03b in FY25.

Capacity expansion and net debt



Capex of INR4.4b was incurred in FY25, and the company has guided for a capex

of INR11b in FY26.



The company announced capacity expansion to 27.6mtpa by FY28-29 from

20.0mtpa currently. Key projects include 1) 3.7mtpa brownfield clinker capacity at

Maihar, Madhya Pradesh (to be commissioned by 3QFY28) and three greenfield

grinding units with a combined capacity of 6.2mtpa in central India (3.4mtpa) and

Bihar (2.8mtpa) to become operational by FY28-29. Total estimated capex is

INR43.4b. Ongoing expansion of 1.4mtpa GU at Kundanganj, Uttar Pradesh to be

commissioned in 2QFY26. The Prayagraj, Uttar Pradesh (1.4mtpa) and Gaya

Phase-1 (1.4mtpa), part of the recent capacity announcements, are expected to

be commissioned by Dec’27, taking total grinding capacity to 25MTPA by FY28.

June 2025

CEMENT | Voices



Expansions are expected to be funded through a mix of internal accruals and debt.

Net debt is expected to rise to around INR30b in FY26; however, the company

aims to maintain its net debt-to-EBITDA ratio below 2.0x, comfortably within its

long-term policy cap of 3.0x.

Net debt stood at INR22.4b as of Mar’25 vs. INR30.0b as of Mar’24.

Dalmia Bharat

Current Price INR 2,090

Buy

Click below for

Detailed Concall Transcript &

Results Update

Demand and pricing outlook



During 4QFY25, economic activity showed a noticeable recovery after a muted

1HFY25. Cement demand is expected to remain largely unaffected by global

disruptions, with any short-term impact considered immaterial. Strong job

creation and rising consumption are key factors to support growth. Cement

demand is estimated to grow by 3.0-3.5% in FY25 and should accelerate to ~7-8%

in FY26, driven by government spending and pent-up demand.



While pricing improved modestly in the east region in 4QFY25, prices in the south

region declined. Andhra Pradesh and Telangana markets remain highly

competitive and oversupplied, whereas Tamil Nadu and Kerala are more

consolidated. The south region saw material

price hikes in Apr’25; however,

management is cautiously optimistic about the sustainability of the price hikes.

The blended price increase in its markets is INR10-15/bag.

Operational highlights and cost insights



RM cost/t decreased primarily due to a decline in fly ash and limestone

procurement rates. However, a new tax imposed by the Tamil Nadu government

on mineral extraction is expected to add INR160/t to limestone costs, translating

into an annual impact of ~INR1.3b, which may weigh on future RM cost trends.



Power and fuel costs declined, driven by a drop in international fuel prices to

USD95 from USD114 in 4QFY24 and an increase in the share of renewable energy

(RE) to 39% from 34% in 4QFY24.



The blended fuel consumption cost stood at INR1.30/kcal vs. INR1.31/Kcal in

3QFY25. During 4Q, the company commissioned a 2.2MW captive solar plant in

Assam and 13MW under a group captive model, taking its total operational RE

capacity to 267MW. The company is targeting 595MW of RE capacity by FY26.

Lead distance was 277km vs. 289km YoY/269km QoQ.



Blended cement sales stood at ~84% vs. ~85% QoQ. C:C ratio improved to 1.69x

from 1.67x in 4QFY24. The trade share stood at ~67% vs. 65% YoY. The premium

cement sales share stood at ~24% vs. 21% in 4QFY24. Logistics costs were reduced

through increased direct dispatches to 61% vs. 56% in 4QFY24, though these gains

were partially offset by higher clinker movement in the Northeast due to an

unplanned shutdown.



Depreciation expenses declined following the full amortization of goodwill, with

FY26 depreciation expected to be around INR13.0b.



Incentives accrued during 4QFY25 stood at INR990m, while collections totaled

INR1.1b. Incentives receivable stood at INR7.4b as on Mar’25. Management

expects accruals to be around INR3b in FY26, with normalized incentives likely to

continue in the range of INR90–100/ton.



The company’s incentives will continue to accrue from Bihar (new expansion),

Jharkhand, Murli plant, and Northeast region.

June 2025

CEMENT | Voices

Strategically, the company remains committed to cost optimization. There is a

strong focus on balancing volume growth with profitability, supported by

disciplined capacity planning and geographic diversification. The company is also

moving toward 100% blended cement production; however, it will take more time

than expected. The company targets cost savings of INR150-200/t in the next two

years from 1QFY25 as a base period. Cost savings would be through logistics

optimization, RE initiatives, and C:C ratio improvement.



The company has ample limestone reserves to support long-term operations. In

Odisha, it is acquiring additional limestone-bearing land in Rajgangpur, with the

process expected to conclude within the year. Meanwhile, the Northeast region is

expected to remain on a growth trajectory, supported by ongoing infrastructure

development and a consolidated supply environment.

Expansion plans and capex



During Q4FY25, a 2.4mt grinding unit in Assam and a 0.5mt unit in Bihar were

commissioned by Dalmia, marking the completion of its Phase 1 expansion. A

clinker unit in Umrangso (Northeast) is expected to be commissioned in 2QFY26.

With these additions, the total grinding capacity was taken to 49.5mtpa by the

end of FY25.



For FY25, a total capex of INR27b was incurred, including an INR980m equity

investment in SPVs for group captive RE. Capex of INR35b has been allocated for

FY26, primarily to fund expansions at Belgaum and Pune, the completion of the

Umrangshu clinker line, and land acquisition and maintenance needs. The next

phase of the company’s expansion roadmap is planned to be unveiled in 1QFY26,

detailing capacity addition toward the FY28 target of 75mtpa, along with related

capex and funding plans.



In FY25, the industry witnessed ~52mtpa of capacity changing hands, highlighting

continued sector consolidation. Larger players have been scaling up capacity more

aggressively than smaller counterparts. Efforts are also underway to strengthen

the dealer network, introduce new cement packaging, and incentivize channel

partners to enhance the market reach.



The company is also actively pursuing leadership development, succession

planning, and organizational agility by reducing layers and strengthening decision-

making processes. The company reiterated its long-term view of maintaining a

prudent, balanced approach to expansion, profitability, and market

competitiveness.

Debt position and other key highlights



Gross debt stood at INR52.8b as of Mar’25 vs. INR54.6b as of Dec’24. Net debt

(considering the IEX investment part of cash and cash equivalents) stood at

INR7.16b vs. INR12.4b as of Dec’24. Ex-MTM

value of IEX investments, net

debt/EBITDA stood at 1.27x in

Mar’25.



Its net debt to EBITDA stood at 0.3x vs. 0.55x as of Dec’24. The company

reiterated its commitment to keeping net debt/EBITDA below 2.0x, unless a large

inorganic or strategic opportunity emerges.



June 2025

CEMENT | Voices

Grasim Industries

Current Price INR 2,554

Buy

Click below for

Detailed Concall Transcript &

Results Update

Paints segment



Within just six months of its pan-India launch, Birla Opus (combined with Birla

White Putty) has crossed a ~10% revenue market share as per internal estimates,

positioning itself as India’s third-largest

decorative paints brand.



Five out of six plants have been commercialized in FY25, taking installed capacity

to 1,096mlpa (~21% of the industry’s organized capacity). With the Kharagpur

plant set to go live in H1FY26, the total capacity will reach 1,332mlpa (~24%

market share). The plants are fully backward integrated, including in-house resin

and emulsion polymer production, ensuring cost and quality control. It reiterated

the ability to add 400–500mlpa additional capacity at a minimal incremental cost.



Tinting machine penetration is high at ~80%, aiding product availability and dealer

economics. It is redefining the retail experience via exclusive Birla Opus Paint

Studios and mid-sized Paint Galleries across 300+ towns. The brand has also seen

success with its marketing campaigns and 360° brand salience strategy. The

product is already available in over 6,600 towns.



Birla Opus offers a full portfolio across six decorative paint categories, covering all

price points—economy, premium, and luxury. About 65% of its revenue comes

from premium and luxury segments, driven by brands like Calista and Style. The

company's innovation in polymer synthesis has enabled it to deliver industry-

leading performance metrics—stain resistance, whiteness, durability, etc.—which

are resonating strongly with retail and institutional customers alike.



175+ products with over 1,250+ SKUs are placed in the distribution channel, and

137 depots are operational across India. The company achieved its target of

50,000 dealers on board by the end of FY25. The total capex in the Paints business

stood at INR93.5b as of Mar’25, ~94% of the total project cost.



Management is confident in scaling to INR100b in revenue within three years,

with EBITDA breakeven targeted around that mark. Market conditions remain

subdued, but management believes the focus on premiumization and value-based

differentiation will sustain growth momentum.

VSF segment



The VSF segment’s margin was impacted due to higher raw material (pulp) costs

and moderation in global VSF prices.



VSF reported its highest-ever annual revenue, driven by ~4% volume growth.

However, profitability remained under pressure, due to higher key raw material

prices hitting the lowest level in 7–8 quarters.



The 55K TPA Lyocell project has been approved and construction is underway in

Harihar, Karnataka. Additionally, minor debottlenecking is planned across Harihar,

Vilayat, and Nagda. These efforts will incrementally enhance capacity and

efficiency through FY26.



China’s operating rates were at 87% in Q3FY25 vs.

~85%/89% in Q4FY24/Q3FY25.

However, the average inventory holding decreased to 11 days in FY25 compared

to an average of 13 days in FY24. The demand scenario in China has led to a

decline in CSF prices to USD1.60/kg in Q4FY25 compared to USD1.65/kg in

Q3FY25.

June 2025

CEMENT | Voices

Chemical business



Caustic soda’s international average spot prices (CFR-SEA)

for Q4FY25 were higher

by 16% YoY at USD525/ton. Realizations were adversely affected by oversupply

and weak chlorine pricing, with negative chlorine realizations at INR6,000–9,000/t

during FY25. However, improved internal consumption and increased chlorine

integration are targeted to rise to ~70% post-commissioning of CPVC and ECH

plants, which are expected to cushion volatility.



Caustic soda witnessed a lower sales volume ~3% YoY due to temporary

shutdowns at Karwar and BBP, though full capacity will be available in FY26.

B2B e-commerce



The company stated it sees the B2B building materials market as a massive

opportunity. With an annualized revenue run-rate of INR50b achieved within two

years of launch, the company remains focused on expanding its digital footprint,

customer base, and private-label offerings in a largely underpenetrated and

digitally underserved ecosystem.

JK Cement

Current Price INR 5,716

Click below for

Detailed Concall Transcript &

Results Update

Buy

Demand, pricing, and operational highlights



Volume ramp-up is progressing well in Central India. In the North and South

regions, the company is performing in line with the market growth. Demand in

March was strong, driven by housing and infrastructure. The focus remains on

increasing trade channel sales. During FY25, 65% of its grey cement volume came

from the North and South regions, while the remaining 35% came from the

Central region (including East markets).



It has guided for grey cement sales volume of 20mtpa in FY26, indicating a growth

of ~12% YoY. Most of the volume growth will come from ramp-up of the Central

plant, while the ongoing expansions should contribute ~0.5mt in FY26.



Current cement prices in the North and Central regions are up by 1% compared to

the 4Q average, while the South region has seen a 5-7% increase. The price

increase in Maharashtra markets is lower than that in the South region.



The company had identified a cost-reduction potential of INR150-200/t. In FY25,

JKCE achieved average cost reduction of INR40/t. However, 4QFY25-exit cost

savings stood at ~INR75/t, which included INR35-40/t savings from logistics costs

and the rest from green energy and other cost savings. The entire benefit of

INR75/t will be reflected in FY26, while there will be further cost savings of INR25-

30/t during the year.



Fuel consumption cost/kcal was INR1.41 vs. INR1.80/INR1.50 in 4QFY24/3QFY25.

The fuel mix comprised 70% petcoke, with the balance made up of domestic and

imported coal.



Green energy contributed 51% of energy requirements in FY25 vs. 51% in FY24.

Green energy share is expected to improve to 60% in FY26, which JKCE targets to

increase to 75% by FY30. The thermal substitution rate was 11.3% in FY25 vs.

16.3% in FY24 and JKCE aims to increase it to 35% by FY30.



Cement/clinker capacity utilization was at 90%/94%. Blended cement sales were

at 68% vs. 67% in 3QFY25. Trade sales were at 71% vs. 66% in 3QFY25. Premium

product sales were at 16% of trade volume (flat QoQ). During FY25, premium

product share was at 13%, which will be increased to 15-16% in FY26.

June 2025

CEMENT | Voices

Road mix was 88%, while 12% of volumes were transported through railways. The

lead distance was at 434km vs. 419km/422km in 4QFY24/3QFY25.



Incentives are booked on an accrual basis, and the quarterly run rate is INR750-

800m. An additional incentive of INR120m was received for the Prayagraj unit in

4Q.

Capacity expansion and capex update



Capex in FY25 was INR17.2b largely toward Panna expansion (INR12.2b). Its

expansion plans of 3.3mtpa clinker unit at Panna and grinding units of 1mtpa each

at Panna, Hamirpur, and Prayagraj are progressing as per schedule and are

expected to be commissioned by Dec’25. Bihar grinding unit (capex incurred:

INR1.6b in FY25) of 3mtpa is also on track and is expected to be completed by

Dec’25.



Capex in FY26 is estimated to be ~INR18b, which will be spent on Panna

expansion (~INR14b). Maintenance capex will be INR3b in FY26. JKCE is also trying

to get approvals for the Jaisalmer plant and will have better clarity by 2QFY26.



JKCE is targeting an installed capacity of 50 MTPA by FY30 and is currently

evaluating options for further expansion. Potential sites include Jaisalmer,

Karnataka, Odisha, and an additional line in Panna. The next phase of expansion

will be discussed closer to the completion of the current projects, with the initial

focus on the North region.



Approvals have not yet been received for limestone mining in Odisha and the

company is still pursuing the matter with the government. There should be some

update on its status in the next 3-4 months.

Other highlights



The UAE plant has seen a turnaround and is now showing improved profitability.

UAE operations are expected to generate EBITDA of INR150-200m on a quarterly

basis. Toshali plant reported a loss of INR80-90m in 4QFY25.



Revenue of the paint segment in FY25 stood at INR2.73b vs. INR1.53b in FY24.

Operating loss stood at INR450m in FY25 vs. INR200m in FY24. The company

expects revenue of INR4-4.5b from paints in FY26. Modifications have been made

at the plant level. The discount structure for paints remains higher than peers and

efforts are underway to rationalize it. The paint business is expected to break-

even at the operational level in FY27.



Standalone gross debt was at INR51b vs. INR45.9b in FY24 and the cash balance

was at INR25.4b vs. INR20.1b in FY24. Net debt stood at INR25.7b vs. INR25.9b in

FY25 and net debt/EBITDA was at 1.3x vs. 1.29x in FY24.



JK Lakshmi Cement

Current Price INR 805

Buy

Demand and pricing



There was improved demand in 4QFY25 across geographies. After elections, the

infrastructure push by the govt has resulted in improved traction in both rural and

urban housing and in the industrial and commercial segments, which supported

volume recovery.



The cement industry is expected to grow at ~6.5%-7.0% in FY26 (earlier estimate

of 7.5-8.0%). JKLC aims to outpace the industry with ~10% volume growth target.

June 2025

CEMENT | Voices

Click below for

Detailed Concall Transcript &

Results Update

Prices have remained flat across key geographies (North, Gujarat, Chhattisgarh

and Odisha) in 1QFY26 so far, and management does not expect a significant

uptrend until after the monsoons, when demand improves.

Operational efficiency



TSR stood at ~11% vs. 13% in 3QFY25, and JKLC has given a guidance of ~12% in

FY26 at the company level. Further, lead distance increased to 393km from 383km

in 3QFY25. Blended cement share was ~65% and its C:C ratio stood at 1.44x.



Premium product share was at ~25% of trade volume vs. 19% in 3QFY25.



Non-cement revenue stood at INR1.5b, including RMC revenue of INR750m.

Margin improved to ~3%.



Average fuel cost stood at INR1.53/kcal vs. INR1.57/Kcal in 2QFY25 and is

expected to remain stable in 1QFY26.



JKLC is targeting overall cost reduction of INR100-120/ton over 12-18 months

through a combination of higher green energy usage, improved TSR, brand

premiumization and logistics optimization.



Green power contribution currently stood at ~50% of total power mix and targets

to increase it to ~52-53% by FY26 end.

Capacity expansion and capex



Surat GU Phase-I with a total capacity addition of 1.35mtpa is being commissioned

in two phases—half

of the capacity is expected to be commissioned by Jun’25 and

the balance

by Dec’25. This project will help to strengthen the company’s position

in western India.



Public hearings for the Durg project and associated mines have already been

completed, and environmental clearance is currently awaited. The company has

finalized the scope of equipment and floated tenders, although formal orders

have not yet been placed. Management expects to commission the facility by

3QFY27.



In the eastern region, JKLC is setting up greenfield grinding units in Prayagraj

(Uttar Pradesh) and Madhubani (Bihar). Land has been acquired for both sites,

and regulatory processes and public hearings are underway. The company

indicated that these grinding units could be commissioned even before the Durg

clinker plant. Also, it has some excess clinker capacity to serve these GUs initially.



JKLC is also preparing for long-term expansions beyond the ongoing projects. The

company holds limestone reserves in Kutch (Gujarat) and Nagaur (Rajasthan),

where land acquisition processes are underway. These will support new

greenfield plant development in the latter half of the decade. The management

reiterated its aim to reach 30mt capacity by FY30, either organically or through

strategic acquisitions, even if the northeast project faces further delays.



It guided for a capex of INR13b in FY26, which includes INR11b for JK Lakshmi’s

projects (including Durg), INR1.5b for the northeast project, and the remaining for

the Udaipur project. In FY27, capex is expected to be at INR18.0b—split as INR10b

for JKLC and INR8b for the northeast project. Additionally, the conveyor belt and

railway siding projects are expected to be completed by Mar’26, with an

incremental capex of INR700-800m, included in the above guidance.



June 2025

CEMENT | Voices

Shree Cement

Current Price INR 29,526

Click below for

Results Update

Neutral

Cement demand and pricing



Demand witnessed a healthy recovery in 4Q, led by a rebound in infrastructure,

residential, and commercial construction activity. This revival was supported by

favorable macroeconomic factors such as increased government capex and a

good monsoon season, which boosted rural construction and overall cement

consumption. It expects cement demand to grow ~~6.5% to ~7.5% in FY26. It is

estimated to reach 39.0mt volume in FY26, which implies ~10% YoY growth.



Clinker capacity utilization stood at 70%/68% in 4QFY25/FY25. The overall

grinding capacity utilization was ~72% in 4QFY25, with ~74% in the North, ~79% in

the East, and ~51% in the South.



The company sold ~55% of its total volumes in the North, followed by ~33% in the

East, ~11% in the South, and the rest in the West and central regions.



Cement realization grew ~3% YoY in the North and ~1% YoY in the East, while this

was down ~5-6% YoY in the South. On a sequential basis, realization was up ~4%

in the North, ~8% in the East, and ~2% in the South.

Operational highlights



SRCM remains focused on profitability over aggressive volume growth. In an

overcapacity market, it is believed that balancing price and volume is key to

maximizing profitability and cash flows. The company’s focus on premium product

sales, improved brand positioning, and favorable geo-mix led to a realization

improvement.



SRCM has intensified its focus on enhancing brand equity and expanding its

portfolio of premium products. The share of premium cement in overall sales

increased meaningfully to 15.6% in Q4FY25 from 11.9% in Q4FY24. The company

recently launched a new premium offering—Bangur Marble Cement—in Bihar,

West Bengal, and Jharkhand. This eco-friendly product incorporates steel by-

product GGBS and offers enhanced performance and sustainability attributes.



It highlighted that brand equity and premiumization are a journey. Though there

may be different brands/products launched at different markets; however, the

approach for building brand equity remains the same at pan-India.



Avg. fuel cost declined to INR1.48/Kcal vs. INR1.82/INR1.55 in 4QFY24/ 3QFY25.

Green power share stood at 60.2%, which is one of the highest in the industry.



Lead distance was at 446 Km vs. 435 Km in 4QFY24. Trade sales mix stood at 73%

and non-trade share remained at 27%, remaining flat YoY/QoQ. Its blended

cement share was ~59%. The rail mix was ~11%, and the share of petcoke was

~95%.



The railway siding projects continue. This has been commissioned at Purulia and

Patas plants and is fully operational. The remaining sites are targeted for

completion by 2HFY28.

Capacity expansion and capex plans



In Apr’25, the company commissioned two grinding units (GU)

- 1) 3mtpa in Etah,

Uttar Pradesh; and 2) 3.4mtpa at Baroda Bazar, Chhattisgarh. With the Etah

grinding unit, the company would try to cater central and eastern UP markets.



SRCM plans to commission 3.0mtpa (each) at Jaitaran, Rajasthan, and Kodla,

Karnataka in 1QFY26 and 2QFY26, respectively. However, the company has

decided to defer one GU at Jaitaran. Its cement capacity is expected to rise to

June 2025

CEMENT | Voices

68.8mtpa in FY26. Its clinker capacity is expected to increase to 44mtpa in FY26

from 36.7mtpa currently. Capex was pegged at INR30.0b in FY26.

Jaisalmer limestone was awarded in 2008, but after various legal appeals, the final

order of granting permission was received recently. Expansion at Jaisalmer and

Gujarat is part of its long-term expansion strategy.



The Ramco Cement

Current Price INR 1,006

Neutral

Click below for

Results Update

Capex and project update



The company is set to reach a cement production capacity of 30mtpa by Mar’26

through the commissioning of line II at Kolimigundla. This target will be further

supported by de-bottlenecking and expanding grinding capacities at existing

facilities with minimal capital investment.



The company has monetized INR4.6b out of its targeted INR10b from non-core

assets and remains on track to achieve its stated goal. The remaining balance is

expected to be monetized by 1QFY26, in line with the earlier commitment.



An additional 10MW WHRS at R Nagar is planned for commissioning by 1QFY26.

An additional 15 MW of WHRS at Kolimigundla, AP is expected to be

commissioned in tandem with Kiln line II.



At Kolimigundla, AP, construction of the railway siding has been completed, and

commissioning is currently underway. It is expected to be operational by 1QFY26.



The commissioning of the Construction chemicals capacity expansion in Odisha,

initially planned for 4QFY25, has been deferred and is now expected to be

completed by 1QFY26. The company has acquired ~54% of the mining land and

~13% of factory land for a Greenfield project in Karnataka.



The total capex incurred was INR2.24b in 4QFY25 and INR10.24b in FY25.

Capacity utilization and volume



Cement capacity utilization stood at ~85% vs. ~96%/~75% in 4QFY24/3QFY25.

Cement volume declined ~4% YoY to 5.3mt in 4QFY25 and increased marginally

~1% to 18.5mt in FY25.



Volume share from South/East was ~75%/~25% in 4QFY25 vs. ~76%/~24% in

4QFY24.

Operational highlights



The share of premium products was ~27% in 4QFY25 vs. ~29% in 4QFY24 in the

South region. In the East region, the share of premium products was ~23% in

4QFY25 vs. ~20% in 4QFY24. The OPC share was ~32% of total volumes in 4QFY25

vs. 32%/30% in 4QFY24/3QFY25. OPC share in FY25 stood at ~31% vs 32% in FY24



Blended coal consumption cost was USD121/t (INR1.50/kcal) vs. USD141/ USD122

(INR1.65/INR1.45 per kcal) in 4QFY24/3QFY25.



TRCL used 66% petcoke vs. 51%/69% in 4QFY24/3QFY25. It used ~63% petcoke in

FY25 vs ~52% in FY24.



Green energy contributed 31% of power requirements vs. ~36%/39% in

4QFY24/3QFY25. Green energy contributed ~36% in FY25 vs ~34% in FY24.



Avg. lead distance was 278kms in 4QFY25 vs 294kms in 4QFY24 and 259kms in

3QFY25. Avg. lead distance was 260kms in FY25 vs 280kms in FY24.

Debt and other highlights



Net debt (including working capital borrowings) stood at INR44.8b vs. INR48.2b/

INR46.2b as of Mar’24/Dec’24.

June 2025

CEMENT | Voices



The cost of debt for 4QFY25 is 7.84% as against 7.76% in 4QFY24.

Ultratech Cement

Current Price INR 11,159

Click below for

Detailed Concall Transcript &

Results Update

Buy

Demand and pricing



Industry volumes grew ~4% YoY in 4Q. UTCEM’s volume growth on a like-to-like

basis was ~6% YoY. Volume growth in FY26 should be in double digits on a like-to-

like basis. UTCEM will keep on looking for growth and good inorganic

opportunities.



Near-term volumes have been impacted due to rising heatwaves. Andhra Pradesh

and Bihar are witnessing a renewed focus on infrastructure spending and road

network. Infrastructure demand should support volume growth going forward.

Urban real estate too has seen some slowdown, but it should start improving.



There has been an improvement in cement prices recently, though the

sustainability of the same would depend on the demand-supply dynamics.

Profitability in the North region was better than South and East regions in 4Q.

UTCEM’s grey cement realization growth on a like-to-like

basis was 1.6% QoQ in

4QFY25.

Guidance on operations of Kesoram and ICEM



Kesoram’s operations:

Sales volume was at 1.53mt in 4QFY25 and 6.87mt in

FY25. UTCEM took control of the operations from 1st Mar’25 and profitability in

4Q was INR399/t (~INR112/t in FY25). It will commission 24.3MW WHRS capacity

which will lead to an increase in renewable energy (RE) capacity to 80MW for

Kesoram. The target is to achieve EBITDA/t of INR1,000+ by 4QFY26.



India Cements’ operations:

Sales volume was at 2.64mt and it achieved 1mt+ in

Mar’25. After achieving operating profit in 4QFY25; the target is to achieve

EBITDA/t of INR500/INR700/INR1,000+ by FY26/FY27/FY28E. Improvement in

capacity utilization, logistics cost, overhead optimization, and cement prices

would lead to profitability improvement for the company. Capex planned for

ICEM is INR15b, out of which INR10b will be for WHRS (21.8MW) and efficiency

improvement in FY26E/27E. The payback period for this capex will be three years

and benefits would start accruing from 4QFY27. Brownfield opportunities for

expansion have been identified for ICEM and the timing would be decided based

on demand opportunities in the market. UTCEM will enter into tolling

arrangements with the company first and then, would rebrand its products to

UltraTech by FY27-end.

UTCEM’s holding in the company needs to be brought

down to 75% to meet the regulatory requirements.

Operational highlights



In FY25, cost savings of INR86/t have been achieved led by higher usage of green

power & WHRS (INR31/t), reduction in lead distance (INR44/t), and higher clinker

conversion/usage of alternate fuel (INR13/t).



The target is to reduce lead distance to 343km (vs. 384km in 4QFY25) by FY27,

increase clinker conversion to 1.54x (vs. 1.47x in 4QFY25) by FY27, increase AFR to

15% (vs. 7% in 4QFY25) by FY27 and achieve green energy share of 85% (vs. 35.7%

in 4QFY25) by FY30. The target remains to achieve cost savings of INR300/t by

FY27 (including INR86/t achieved in FY25).

June 2025

CEMENT | Voices

Fuel costs remain under control; though; there has been some uptick in the last

two months. Ocean freight has increased and can increase further. However,

crude production in the US is going up and should lead to higher pet coke

production. Freight cost/t for pet coke is US$37-40.



Capacity utilization was between ~85% and 97% for UTCEM in different regions in

4Q. Average capacity utilization was at 90%.



Installed capacities of the industry increased to 655mtpa vs. 625mtpa in FY25.

UTCEM accounted for ~55% of the industry’s capacity addition of 30mtpa.

UTCEM’s installed domestic capacity increased to 183.4mtpa vs. 140.8mtpa in

FY24 led by organic expansion and acquisition of 26.3mtpa capacities. Industry

capacity addition in FY26 should be between 40-50mtpa.

Capex and net debt



Capex in FY26 should be between INR90-100b including capex announced for the

cable & wire segment. This includes INR70b for ongoing organic capacity

expansions of 27.1mtpa. Capex in FY27 should be lower, though guidance will be

given later.



The cement putty manufacturing plant (Wonder WallCare) has been capacity

acquired and the acquisition should be completed in the next few days. Turnover

of this plant was INR786m in FY24 and the acquisition has been done at an EV of

INR2.35b.



Consolidated net debt stands at INR176.7b vs. INR27.8b in Mar’24, while

standalone net debt is at INR150b vs.

INR5.7b in Mar’24. Net debt/EBITDA stands

at 1.16x and debt should start reducing rapidly. Comfortable net debt/EBITDA is

0.5x.

Other highlights



Revenue of the buildings product segment should increase to INR30b by FY27 vs.

INR9.2b in FY25. RoCE for this segment is between ~35%-40%.



Update on allotment of limestone mines in Tamil Nadu: The Timeline for technical

bid submission for limestone mines in Tamil Nadu is 4th May ’25. There is no

extension announced for this timeline as of now.



In the North East, single window approval has been taken for the subsidiary. It is

not an easy terrain to operate into and it would want to enter into this region

when good mines are available with access to rail logistics as well as better road

connectivity.



June 2025

CHEMICALS | Voices

CHEMICALS



Management teams remain cautiously optimistic and expect volume-driven growth to persist, supported by

resilient domestic demand, softening raw material prices, and ongoing capacity additions. Challenges such as

global oversupply, dumping (particularly from China and Korea), and geopolitical uncertainties may continue

to exert pressure on margins. Improving utilization rates and a strong capex pipeline are likely to support a

gradual recovery in sector profitability.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Outlook for FY26

Quarterly snapshot



Capex projects at Dahej are progressing on schedule,



Alkyl Amines Chemicals (AACL)’s 4QFY25 revenue increased

8% YoY

with mechanical completion expected by Dec’25/

to INR3.9b. The growth was mainly volume-driven, though the

Jan’26.

An INR1b investment is underway, with more

company continues to face pricing pressure. Gross margin declined

products in the pipeline. FY26 capex is guided at

330bp YoY to 45.9%, while EBITDAM stood at 17.6%. PAT came in

INR1.5b.

at INR460m vs. our estimate of INR522m. Exports contributed 25%



The company expects a double-digit volume growth in

of the total revenue in FY25.

FY26, though pricing pressure is likely to persist.



Alkyl

Amines

Clean

Science



Deepak

Nitrite



FY26 capex is guided at INR3b, with Performance

Chemicals 1 & 2 to commercialize by Aug’25 and

Feb’26, expanding TAM by USD1.5b.

HALS sales grew to INR800m on 1,900 MTPA volumes

(vs. INR250m/600 MTPA in FY24), targeting 4,500

MTPA and INR2.1b in FY26 amid rising market share

and international traction. BHT sales began in the US;

Barbituric Acid production starts Aug’25; DHDT faced

commercialization delays.

Key projects (CNA, WNA, Hydrogenation, Nitration) are

set for 2QFY26 commissioning, with MIBK/MIBC in 3Q,

while renewable energy adoption aims to meet 60% of

power needs and reduce CO₂ emissions by FY27.

The company is investing INR85b in Phenol, Acetone,

IPA, and BPA projects to support polycarbonate resin

production. Government incentives of INR600–700m

annually are expected from the DPL project, and while

no quarterly guidance is issued, management remains

cautiously optimistic for FY26.

Despite inflationary pressures, the company

successfully passed on much of the fatty alcohol cost

increase with a lag and remains focused on long-term

goals. FY26 guidance includes volume growth of 6–8%

and EBITDA/kg (including other income) in the

INR20.5–21.5 range. Minimal exposure to the India-

Turkey corridor poses no risk to operations.

CDMO secured orders from EU and US clients,

targeting USD100m revenue. ATRs were healthy (Spec

Chem: 1.3–1.5x; CDMO: ~2x), US tariffs had limited

impact, input cost softening improved margin

outlook, and FY26 EBITDAM is guided at 23–26%.

Latex showed strong YoY performance, and product

utilization is mixed—optimal in some areas, over 60%

in others. The company, with a larger presence in

Asia, is executing an INR2.5b capex in Dahej to

produce TDQ antioxidants via a greener process,

driven by healthy demand visibility.



Clean Science (CLEAN)’s reported EBITDA in

4QFY25 was in line

with our estimate at INR1b (+11% YoY), with a gross margin of

63.7% (vs. 65.7% in 4QFY24). EBITDAM contracted to 39.7% from

41.5% in 4QFY24. Revenue of Performance Chemicals and Pharma

& Agro Intermediates increased 13% and 32% YoY respectively in

4QFY25, while it declined by 5% YoY for FMCG Chemicals. PAT

increased 5% YoY to INR741m during the quarter



DN reported a disappointing quarter (ex-government incentive

income) in 4QFY25. EBITDA came in 68% above our estimate and

stood at INR3.2b (+5% YoY) while EBITDA adjusted for government

incentive income was INR1.6b (18% below our estimate). EBITDAM

was at 14.5% (+40bp YoY) while PAT was INR2b (estimate of

INR1.1b, -20% YoY). EBIT margin contracted 13.1pp YoY for the AI

segment, while the same expanded 160bp YoY for DPL.

The commissioning of the Acetophenone asset will aid internal

consumption and improve efficiency. Debottlenecking and new

SKUs added in FY25 will continue into FY26.

Galaxy Surfactants (GALSURF) reported EBITDA/kg of INR20.4 (est.

INR11.5), up 22% YoY. Total volume inched up ~2% YoY to 62.2tmt

(our est. 59.9tmt), with strong YoY performance in the RoW region.

Subsequently, EBITDA stood at INR1.3b (up 25% YoY), while PAT

came in at INR759m (down 2% YoY, our est. INR352m).



Galaxy Surf



Navin

Fluorine

Internatio

nal



NOCIL



PI Inds

PI Industries aims for single-digit revenue growth in

FY26 with stable 25% EBITDA margins, despite near-

term headwinds in exports and generic pricing

pressure.



NFIL’s EBITDA/ PAT in 4QFY25 came in line with our estimates with

strong YoY performance in the CDMO segment. Gross margin

stood at 54.2%, while EBITDA margin expanded 720bp YoY to

25.5%. Earnings expanded 35% YoY to INR950m in 4QFY25. There

was sustained momentum in all business segments as multiple

strategic levers drove 4Q performance.

NOCIL's EBITDA/kg missed our estimate and stood at INR25.1 in

4QFY25, down 19% YoY. Sales volume declined 4% YoY to 13.4tmt.

The realization was flat YoY at INR254.2/kg (INR255.1/kg in

4QFY24) with sustained pricing pressure from Chinese, Korean, and

EU players. Hence, EBITDA was INR335m (-23% YoY), while PAT

stood at INR204m (-50% YoY). There were certain challenges with

respect to the product mix in the quarter with the specialty

portfolio contributing 15% to the overall revenue.

PI Industries (PI) reported muted revenue growth in 4QFY25 (up

3% YoY), due to a decline in CSM (down 2%; mix 76%), while the

domestic agrochem business witnessed strong traction (up 25%

YoY; 19% mix). Pharma revenue was up 19% YoY (Mix 5%) while

June 2025

CHEMICALS | Voices



SRF



Tata

Chemicals



Domestic agri brands will drive growth through new

product launches and a crop solution approach, with

stronger momentum expected in 2HFY26, supported

by stable commodity prices and a favorable monsoon.

The FY26 tax rate is guided at 22–23%, and the

working capital cycle is expected to remain between

65–70 days, slightly improved from FY25.

SRF targets 20%+ revenue growth and 25–26% EBIT

margin in FY26, driven by volume gains from new and

legacy products, strong refrigerant demand, and

improved HFC utilization (80–85%). Growth will be

supported by INR11b capex and stabilized raw

materials, with exports contributing over 70% to

specialty chemicals.

SRF plans capacity expansion in packaging films,

including a new BOPP PE line and 50–55 KTPA

addition, with a continued focus on value-added

products.

Capex is guided at INR 5.5–6b (including INR600m for

Kenya), with no major expansions beyond silica and

approved African capacity (50K MT). The US domestic

business remains strong, but exports face margin

pressure.

The UK operations are expected to stabilize from

2QFY26, shifting to value-added products. The lost UK

soda ash capacity will be offset through Indian and

Kenyan ramp-ups by the end of FY26.

reported EBITDA loss of ~INR1.8-1.9b. Consol. EBITDA margin

remained stable, led by a favorable product mix and tight

overhead management.



SRF posted a strong overall performance in 4QFY25,

with its EBIT rising 53% YoY, led by a 3.2x/50% YoY

surge in packaging film/chemical businesses.

Despite macroeconomic headwinds due to rising

geopolitical tensions, SRF remained resilient and

improved its performance in 2HFY25, with revenue/

EBITDA/Adj. PAT surging 20%/41%/30% YoY in 4Q.



TTCH’s 4QFY25 consolidated EBITDA declined 26% YoY/25%

QoQ due to lower realizations and unfavorable operating

leverage across geographies.

Revenue remained flat YoY due to flattish volume (higher

volumes in India and Kenya offset by lower volumes in the US

and UK)

Alkyl Amines

Current Price INR 1,950



Neutral

Click below for

Detailed Concall Transcript &

Results Update



Modest growth in top line in FY25, but significant growth in volume; pricing

pressure has negated the volume growth.

Volume growth was 4-5% QoQ while YoY growth at 15% in 4QFY25; Vols. growth

of 13% for FY25.

Prices have dropped YoY, but QoQ product prices were stable in 4QFY25.

Ethylamines and Methylamines prices are under pressure because of the

demand-supply situation.

Pharma demand remains stable while volatility in the demand from the Agro

chemical industry.

Had expanded capacity last year, with competitors also having capacity- have an

oversupply situation currently.

ACN prices were under pressure because of Chinese dumping; prices for AACL at

INR140-150/kg.

Prices of the RMs have also been going down impact of which was seen on the

EBITDAM.

All the capex projects at the Dahej side are moving as planned; mechanical

completion expected in Dec’25/ Jan’26.

The project announced last year with INR1b capex in Dahej is progressing well

Some other products are already in the pipeline for which FIDs have not been

completed.

ADD on ACN: DGTR has announced it, final approval would come from the

Ministry of Finance within 90-100 days.

GLP drug demand is rising, but it is still a very nascent stage for the segment;

management will assess as and when inquiries come.

Average utilization at 65-70%.

June 2025

CHEMICALS | Voices



Capex guidance of INR1.5b in FY26.

Exports contributed 25% of total revenue in FY25.

Amines contributed 50%, derivatives contributed 30%, and Specialty

contributed 20%.

Double-digit volume growth guidance for FY26, while pricing pressure is

expected to persist.

Clean Science & Technology

Current Price INR 1,538



Neutral

Click below for

Detailed Concall Transcript &

Results Update



Volume-

newly launched products improves while EBITDAM remains strong.

Performance and Pharma segments led to revenue growth in FY25.

25% volume growth and 8% realization decline were recorded in FY25.

The company’s TAM is expected to increase by USD1.5b in FY26, driven by the

ongoing commercialization of its new products.

The company incurred a total capex of ~INR2.3b in FY25, primarily toward

investment in Clean Fino Chem Ltd. (CFCL), its wholly-owned subsidiary.

Capex remains on track for Performance Chemical 1 (to be launched by 3QFY26;

Aug’25) and Performance Chemical 2 (by 4QFY26; Feb’26).

These will be developed entirely in-house

through the company’s R&D.

FY25 saw the highest-ever number of products developed in a single year.

Chemistries developed by the company in FY25 include condensation reaction,

chlorination, hydrogenation, and polymerization.

HALS sales value in 4QFY25 was in line with 3Q, recording a blended realization

sales volume of 1,900mtpa (mostly domestic sales

–

currently holding a 50%

market share with a target to reach 65%) in FY25 (600mtpa in FY24) and sales

value of INR800m in FY25 (INR250m in FY24), with a target to reach 4,500mtpa

in FY26 (sales value of INR2.1b).

Successful validations in SE Europe and the Middle East indicate strong potential

for accelerated sales momentum going forward.

Some distributors were established earlier in certain geographies, but they were

not as effective as the company expected.

The company is now exploring new distributors in those geographies.

Products in the parent company are growing at a rate of 4-5%, while newer

products will see a significant improvement in sales value, enabling the

company to absorb fixed costs.

There is currently no revenue contribution from the DHDT product due to

teething issues arising from differences between the lab output and

commercialized plant performance.

Barbituric Acid will start production in Aug’25 within the parent company.

BHT has sold some quantities in the US, with volumes expected to gradually

increase over the next few quarters.

Capex guidance for FY26 is INR3b; capex for subsequent products will be

announced later at an opportune time.

The average gestation period from product announcement to commercialization

is five months.



June 2025

CHEMICALS | Voices

Deepak Nitrite

Current Price INR 1,982



Sell

Click below for

Results Update



The global slowdown in demand and macro uncertainties put pressure on

intermediate prices

Intense price competition from Chinese players puts pressure on margins

Domestic demand served as a vital cushion and showed early signs of demand

revival

Expanded product portfolio and signed new contracts in FY25

Several projects commissioning on the horizon in FY26

CNA, WNA, Hydrogenation, Nitration in 2Q

MIBK/MIBC in 3Q

Have started gaining benefits via renewable energy which would serve 60% of

total power consum ption by end-FY27

This would also help in a 60% reduction in CO₂ emissions

Revenue growth was mainly led by volume, which offset subdued realization in

FY25

Government incentive income is the normal course of business for the DPL

project set up in Dahej

Guidance of ~INR600-700m every year on an average for 10 years

The normalized level of profitability to be expected in FY26

Advanced Intermediates (AI)

Strong performance across product segments led to sequential growth in the

segment

Demand from dyes and pigments has improved from 3Q end but pricing

pressure persists

Agrochem demand remains subdued- trend to persist for the next couple of

quarters

DNL has debottlenecked its OBA capacity and has added new SKUs in FY25;

looks to further debottleneck capacity in FY26

DPL

Increased volume due to capacity augmentation during the year



The temporary rise in imports led to subdued prices that started in 3QFY25



Commissioning of Acetophenone asset to support captive consumption

Future outlook



Major upcoming capacity additions in Phenol, Acetone, and IPA to support

Polycarbonate Resin (capex of INR85b) production



Technology tie-ups have been done w.r.t. new Phenol plants and also for the

Bisphenol-A (BPA) project



Supportive policy environment, shift from high-cost regions, and growing

domestic demand to drive long-term growth



Management for the first time won’t give guidance for the ensuing quarter but

is cautiously optimistic for FY26.



June 2025

CHEMICALS | Voices

Galaxy Surfactants

Current Price INR 2,387



Buy

Click below for

Detailed Concall Transcript &

Results Update

The business environment has been dynamic and complex.



The supply-side validity has been a persistent theme, but has some stability in

FY25.



Fatty Alcohol prices remain elevated because of shutdowns in Southeast Asia;

to remain so for another quarter.



International freight costs have eased.



The geopolitical environment is still uncertain, and the company has to

navigate with caution.



Demand remains mixed



India has seen flat performance in FY25- lingering effect of slowdown due to

rising fatty alcohol prices.



Remain optimistic about the domestic demand picking up in coming quarters



Volumes declined by 1% in 4QFY25



AMET- flat performance in this region as well but easing of supply chain is being

seen



Proactive measures to enhance market share being taken



RoW

–

double digit growth in FY25



This is a testament to expand global footprint



Favorable market conditions with expanding product portfolio to help RoW

growth remaining robust



Volume growth of 9% in 4QFY25



Remain resilient and focused on the long term goals of the company



Broader concern lies in navigating the inflationary issues



Good portion of the rise in Fatty Alcohol prices have already been passed on;

price pass on is with a lag



Volume guidance to be in the lower range of 6-8% in FY26; long term guidance

of volume growth to be in the higher range of 6-8% intact



EBITDA/kg (incl. other income) guidance remains intact in the range of

INR20.5-21.5 for FY26



The India-Turkey business is not significant; therefore, no issues on that front.

Navin Fluorine Intl

Current Price INR 4,478



Neutral

Click below for

Detailed Concall Transcript &

Results Update

Multiple strategic levers resulted in a robust performance in 4QFY25

Stable momentum in all segments in 4QFY25

Maintained D:E ratio of 0.37x with OCF of INR5.7b in FY25

New agreement updates



Strategic agreement with Chemours in HPP segment



Technological tie-up with Buss ChemTech AG for production of Solar &

Electronic Grade HF for NFIL (in HPP segment)

Project updates



Successfully commercialized additional R32 in Mar’25-

R32 plant running at

optimum utilization



AHF capex for INR4.5b is expected to be commissioned by 2QFY26



2 new molecules planned in Spec Chem, supplies to begin in 1QFY26



Capability capex of INR300m at Surat-

Dispatches commenced in Feb’25



cGMP4 capex for INR2.9b– Phase 1 capex of INR1.6b on track to commission

by end of 3QFY26

HPP



Revenue boosted by higher volumes and improved realization



June 2025

CHEMICALS | Voices

Chemours agreement o This is only the initial capacity for the adoption of

their proprietary product into the market



Buss ChemTech AG technology tie-up o N5 grade of solar applications-

higher electronic grade- distillation to high-purity product



No capex announced as of now but could culminate into one- first priority

was to get the right partner for the product



This is not similar to the Chemours agreement and branding would be of

NFIL on the product

Spec Chemical



Optimum capacity utilization at both Dahej and Surat- strong order visibility

for FY26



2 new fluoro intermediates being introduced for a customer who has

validated agrochem intermediate products



ATR ~1.3-1.5x of segment



Fluorospecialty plant utilization expected to be ~50-55% in FY26



Pricing pressure is going to remain even as there would be volume-led

growth

CDMO



European CDMO MSA



Orders in hand for CY25



New molecule orders received for deliveries in FY26



EU major customer: Order received for supply in FY26



US major customer: Commercial order expected for delivery in FY26 ( Scale-

up order delivered)



Strategy is to balance late-stage and commercialized-stage molecules



Guidance intact on the aspirational target of ~USD100m revenue- 1/3 from

any new MSA, 1/3rd from the Fermion contract and 1/3rd from the base

business



ATR ~2x of segment

Impact of US reciprocal tariffs



Right now negligible impact; but initially too, impact was neutral to positive



Customers have not changed their strategic decisions as such w.r.t. FY26

order book



However, the company would always be watchful of the headwinds due to

the tariffs

Inventory days have come down and are sustainable- continuously monitoring

the levels of inventory and aligning it w.r.t. the order book

Gross margin outlook looks pretty decent as Sulphur prices and some other RM

prices are softening, so GM could expand

EBITDAM guidance of 23-26% for FY26.





NOCIL

Current Price INR 195



Neutral

Management is cautious amid the current geopolitical uncertainty.

Pricing pressure being faced because of dumping from China, Korea and EU.

Indian tyre industry outlook remains healthy with a 4-6% CAGR.

Replacement demand supported by increased government spending and other

favorable policies.

Favorable monsoon forecast will support demand in the near term in the

domestic market.

No capacity constraints currently in any of the products.

Domestic volumes were flat in FY25, which management sees as a transitionary

effect rather than NOCIL losing market share.

June 2025

CHEMICALS | Voices

Click below for

Results Update



Management believes there would be robust demand in domestic market going

forward, but pricing pressure would persist.

Domestic volumes expected to grow at domestic market growth rate; export

volume growth to be stronger.

Management is making conscious effort to improve per kg parameters by

bringing in operational efficiencies.

There were some challenges w.r.t. the product mix in 4QFY25.

Latex has done well in FY25 compared to FY24; will not go back to Covid levels

but would continue to grow.

NOCIL has a larger presence in Asia compared to the EU/ US.

For specific products, utilization is at optimum levels; for some other products, it

is at 60%+.

Capex of INR2.5b on track: would be manufacturing TDQ in its Antioxidants’

product portfolio in Dahej through a more advanced and greener process

Demand for this product is there; therefore, management took decision to

expand capacity.

Antioxidants imports into India in 4QFY25 are stable.

P I Industries

Current Price INR 3,905

Buy

Click below for

Detailed Concall Transcript &

Results Update

Operating performance



PI commercialized 6 new products in Exports and 7 in Domestic Agri Brands



Domestic branded witnessed robust volume growth OF ~24% in 4QFY25, led by

a strong Rabi season, marked by increased acreage in wheat, rice, and pulses,

offsetting the modest export growth



However, the delayed and erratic rainfall during the Kharif season, along with

pricing pressures from generics, moderated the overall growth of domestic

brands in FY25



PI reported a revenue growth of 4% YoY in FY25, driven by 31% YoY growth in

new products and 5% YoY growth in agchem exports over a high base



Gross margin remained strong, supported by robust growth in the domestic

business and a favorable product mix

Outlook and guidance



Domestic Agri Brands to continue growth momentum through launching new

products and focusing on the Crop Solution approach



PI targets a single-digit revenue growth in FY26 with sustained margins, while

navigating the transitory headwinds with focused growth plays



The long-term growth outlook remains solid with double-digit growth and a

major pickup from 2HFY26



Stable commodity prices, coupled with a favorable monsoon forecast to drive

the Agri-sector



Overall price pressure is expected to persist in the generics space



PIOXANILIPROLE is currently undergoing regulatory development, with

commercialization anticipated in the first country within the next couple of

years.



Tax rate going ahead is expected to be in the range of 22-23%



Stronger growth is anticipated in the domestic business, given the prevailing

headwinds in the export segment.



The EBITDA margin guidance for FY26 is set at 25%



A slight reduction in the working capital cycle was observed in FY25, with FY26

expected to range between 65 and 70 days.

Pharma business



PI targets pharma CRDMO revenue to be 3x over the next 3-4 years

June 2025

CHEMICALS | Voices

Revenue decline in FY25 was mainly on account of inventory pile-up and

deferred off-take of key products



The company is witnessing good traction of new CRDMO enquiries



The commissioning of Kilo facilities in Lodi, Italy, in 1QFY26, improved order

book/business visibility over the next 1-2 years.



The company plans on expanding and enhancing the GMP site in Lodi, Italy



PI is aiming to capitalize on growth opportunities in the CDMO segment while

strategically expanding market presence across the CRDMO value chain



The CRDMO order book continues to grow, supported by a robust pipeline. The

company has onboarded two new pharmaceutical customers to secure

additional partnerships with major pharma companies.



The Pharma segment reported an EBITDA loss of INR1.8b-INR1.90b in FY25



The pharmaceutical business is expected to take several years to achieve EBITDA

profitability. As the company scales operations, associated costs will increase.

Biological Business



Biologicals' product revenue was up 10% YoY in 4QFY25, largely driven by the

launch of new products and increased adoption of sustainable crop solutions at

the farmer level.



Management expects the global biologicals revenue to surge 5x over five years.



Going ahead, PI plans to introduce products through new technology platforms

and leverage its India Distribution, while acquiring complementary technologies

and expanding its portfolio.



The new launches, along with a focus on biologicals, will drive the next leg of

growth

CSM



Aggressive commercialization of new products in FY26, with 8-10 new products

expected to be launched in FY26



Continued momentum in new enquiries and conversions was witnessed in CSM



The company remains cautiously optimistic despite destocking of inventory and

the uncertain US tariff regime

Capex



PI incurred a total capex of INR9.2b in FY25 compared to INR5.8b in FY24



CAPEX in FY26 is expected to remain in line with FY25 levels, in the range of

INR8b-9b



CAPEX is determined by product requirements and customer needs, reflecting a

diverse allocation. The company is strategically directing investments towards

new product development.

Others



The increase in overheads was due to promotional expenses for the launch of

the new products, and adding resources to build the Pharma 2 business and PHC

integration



It is the first Indian company to receive approval from the International

Organization for Standardization (ISO) for a ground-breaking insecticide named

"PIOXANILIPROLE”



Maintains a pipeline of approximately 20 products in the domestic branded

segment



Aiming to establish a global presence in biologicals and position itself as a

differentiated player in the CRDMO segment



A similar momentum is anticipated in the development of new molecules going

forward to expand the overall product portfolio.



The company is making significant global investments to expand its footprint in

the pharmaceutical and biologicals segments.



June 2025

CHEMICALS | Voices

SRF

Current Price INR 3,104

Buy

Click below for

Detailed Concall Transcript &

Results Update

Chemicals business: Specialty chemicals



The specialty chemicals segment delivered strong revenue and margin growth

YoY mainly led by the strong traction in the recently launched products and the

recovery in off-take of certain key agrochemical intermediates



SRF continues its focus on strengthening the product pipeline and ramping up

newly commissioned plants



Successfully launched five new agro products and three new pharma products in

FY25



SRF undertook debottlenecking of capacity across several products and multiple

campaigns in MPPs with an investment of INR7b, enhancing future capabilities,

leading to a 30% increase in overall capacity



The pricing pressure from Chinese competitors continued, leading to price

adjustments for multiple products



Raw materials have started showing signs of stabilization



Management is targeting 20%+ revenue growth in FY26 and building strong

momentum in the years ahead, with an aim of INR110b+ revenue in the next

three years



2HFY26 is expected to surpass 1HFY26, led by some factor of seasonality in this

estimate



Volumes are expected to be better for both the businesses in 1HFY26, along

with better volumes for legacy products with incremental volumes from new

products



The overall chemical business EBIT margins are expected to be in the range of

~25-26% (+/- 2%) going ahead, led by healthy volumes and better product mix



The pharma segment contributed to ~6-7% revenue share in FY25



Export currently stands for ~70-71% in the specialty chemicals business

Chemicals: Fluorochemicals



Fluorochemicals business reported strong performance in 4QFY25, driven by the

higher volumes and realizations of HFCs across domestic and export markets,

along with record domestic sales of ref gases, driven by the highest-ever R32

production and offtake.



Demand for Dymel continued to see strong traction.



With the rising demand for refrigerants due to increased AC and automobile

production in India, SRF maintains its dominant share in the domestic Room Air

Conditioners (RAC) and Mobile Air Conditioners (MAC) markets.



Mandate for in-cabin AC for Commercial vehicles is expected to further drive ref

gas consumption, with India and the Middle East expected to drive future

growth for Ref gas



Reduced Chinese HFC supplies resulting in increased global prices



Increased competition and the oversupply situation in the domestic

chloromethane market are adversely impacting margins



Inventory levels in the US have decreased



PTFE is showing early signs of improvement, with the ramp-up fully expected in

FY26



The ongoing capex of INR11b will be completed within 30 months from the date

of approval.



No major impact was witnessed, neither negative nor positive from the India-UK

FTA.



The pricing trends for FY26 are as follows: R32 pricing is still expected to

fluctuate, R134A is anticipated to remain flat with a slight positive trend, R125 is

expected to stay flat, and R22 pricing is experiencing an increase.

June 2025

CHEMICALS | Voices

Capacity utilization for HFC is expected to increase significantly in FY26, rising to

80-85% from 70% in FY25.

Packaging film business



Performance Films & Foil Business witnessed healthy revenue growth, driven by

higher volume and realizations for both BOPP and BOPET, and margin expansion

led by continued focus on ramping up value-added products.



Demand-supply balance for BOPP stands better than BOPET, and the capacity

utilization in India has improved for both BOPP and BOPET.



SRF launched 12 new products in FY25: 5 in BOPET and 7 in BOP



Performance of Aluminum foil witnessed a positive change over 3Q, led by

higher export volume, while the domestic demand for aluminium foil remained

subdued



The board has approved the establishment of a new capacity of BOPP PE film

line in Indore during the year, with an investment of INR4.45b and is expected

to commence in ~ 25 months from the date of approval



An additional 50-55 KPTA of new capacity is expected to be introduced in this

segment.



The subsidiaries, primarily involved in the packaging film business in Hungary

and aluminum foil business, are currently facing a PAT loss in Hungary but

expect a positive PAT in FY26, with both subsidiaries being profitable at the

EBITDA level.



Going ahead, the company will continue its focus on increasing the sales of the

high-impact VAP

Technical textiles business:



Technical textiles business declined by 2% YoY in 4QFY25 due to Weak demand

and increased competition from low-cost Chinese imports in Belting Fabrics,

while the margins were impacted by the lower margins in Nylon Tyre Cord

Fabrics



Achieved the highest-ever production and sales in FY25 of Tyre Cord Fabrics,

Polyester Industrial Yarn, and belting fabrics



Maintained dominant position in the domestic Belting Fabrics market with

sequential growth in exports



The management expects the belting fabrics' performance to improve with

increased government spending, revival of tier II markets, and higher exports,

along with a rebound in cement, steel, and coal production and round

construction in FY26



FY26 is expected to deliver performance similar to that of FY25.

Others



Chances of seeing global growth slowing down with the company continuing to

navigate through uncertain times



The prices for each gas are expected to fluctuate differently.



SRF plans to incur capex in the range of INR22b to INR23b for the FY26, with the

possibility of an increase during the year.



SRF expects the benefit of reduced borrowing costs in FY26 due to global

interest rates trending downward.



The company plans to optimize raw material sourcing as part of its cost-saving

initiatives in the future.



The management believes it will be able to maintain or increase its market share

in the chemicals business, regardless of the situation in China.



Strong demand is anticipated for both coated and laminated fabrics going

forward.



June 2025

CHEMICALS | Voices

Tata Chemicals

Current Price INR 930

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Demand-supply scenario



Global demand witnessed moderate growth, led by China (+18%) and India

(+4%), while other regions declined by ~3%.



In China, demand was primarily driven by strong uptake in solar and lithium

battery sectors; however, similar momentum is not expected this year, and

growth is likely to remain stable.



India continues to show healthy traction across traditional and new-age end-

user industries, with a 5-6% demand growth expected in the coming year.



Global supply increased by 8.9% YoY, led by China; Inner Mongolia capacities are

now operating at optimum utilization, contributing to incremental volumes.



Supply additions have exerted pricing pressure, with the market remaining well-

supplied in the near term.



Western Europe is currently running at elevated and unsustainable capacity

levels, which may require rationalization going forward.



Exports from China have moderated, supported by strong domestic demand

growth of +8.3% that absorbed most of the internal production.



Export volumes from the US and Turkey have risen sharply, with part of the

incremental supply being diverted to China.



Demand-supply dynamics are expected to remain range-bound in the short

term.



Medium- to long-term outlook remains constructive, underpinned by

sustainability-led growth beyond China, the US, and Europe, where soda ash is a

critical enabler.

Guidance and Outlook



India, Kenya, and the UK are expected to move in a positive direction in FY26.

UK operations will show improvement from 2QFY26 as it stabilizes. The US

domestic business will continue to improve, but US exports will remain a

challenge.



Capex in FY25 was INR20.05b, which will reduce to INR5.5-6b in FY26, including

Kenya capex of INR600m. Beyond that, there are no major capacity expansions

planned except for Silica capacity, estimated at INR180m.



The additional soda ash and bicarb capacity at Mithapur will achieve full

utilization in FY26. The depreciation run rate in 4QFY25 will be sustainable for

FY26.

India



Higher volumes of soda ash and bicarbonate helped offset lower realizations

during the period.



Volume growth was achieved despite the reduction in Minimum Import Price

(MIP), indicating that MIP had a limited impact on domestic performance.



Anti-dumping duty (ADD) investigation is currently underway, which could

influence future import dynamics and pricing structure.



The India-UK Free Trade Agreement (FTA) presents a strong opportunity to

manufacture pharma-grade salt domestically and export it to the UK, where it is

currently produced locally.

North America



The domestic business (contributing ~40% of US revenue) continues to perform

well in terms of both revenue and margins.



Exports (60% of US revenue) are facing margin compression, driven by lower

realizations in certain geographies and adverse operating leverage.



South East Asia remains a key monitorable, with soda ash prices around USD

200/MT.

June 2025

CHEMICALS | Voices

US volume for the quarter was lower due to port congestion caused by weather-

related disruptions; volumes are expected to normalize in 1QFY26.



The company is operating gas at fully hedged rates, mitigating cost volatility.



A quarterly volume run-rate of 600 KMT is achievable going forward; warehouse

capacity is being added to support this ramp-up.



Freight cost has increased YoY due to slightly higher volumes and change in the

export model post exit from AMSEC

–

Tata Chemicals now bears the freight cost

directly, impacting reported expenses but also increasing revenue recognition.

Europe



Lower volumes were reported due to the decommissioning of the soda ash

capacity.



An exceptional cost of INR550m was booked for the shutdown of the Lostock

plant.



The UK operations are shifting towards a value-added business model, with

growth expected in pharma-grade salt.



1QFY26 will be impacted by transition-related issues, though partially offset by

pharma volumes and from 2QFY26 onwards, the UK unit is expected to stabilize

and turn profitable.



British Salt performance has improved steadily over the past few years,

supporting the UK turnaround.



A key concern remains the debt on the UK balance sheet, which needs to be

serviced in the coming years.

Africa



Margin improvement was driven by a focused shift toward the domestic African

market.



The current volume run rate is sustainable, with further upside potential in

volumes going forward.



The company has received government approval to expand capacity by 50k MT

(Pure Ash product), expected to be commissioned by the end of FY26.



The associated capex for this expansion is estimated at ~INR600m.

Other



Rallis continues to experience weakness in the export market.



The company will calibrate its capex in sync with prevailing market conditions.



The increase in debt was primarily to fund working capital needs, which are

expected to decrease moving forward.



June 2025

CONSUMER | Voices

CONSUMER



Most of the companies witnessed limited volume growth, typically in the low to mid-single digits. While urban

demand remained subdued, rural consumption continued to recover gradually. Management expects a

gradual uptick in demand in FY26, driven by reasons such as income tax breaks, interest rate reductions,

easing inflation, and the expectation of better monsoons. Rising commodity costs, particularly in the agri

basket, combined with price hikes taken at a lag, led to gross margin pressure across most categories and

companies in 4Q. However, companies have mainly completed taking price hikes, and RM inflation is

beginning to cool off. Hence, the full benefits are likely to materialize in the coming quarters. The companies

remain optimistic that price modifications, combined with a likely rise in volumes, will drive revenue growth

going forward.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Takeaways from 4QFY25 performance

Outlook for FY26



APNT posted a weak 4QFY25, with



Management expects a gradual demand recovery

consolidated/standalone revenue declining 4%/5% YoY. ahead.



Domestic volume grew modestly by 1.8% YoY. Muted



APNT is targeting to achieve a single-digit revenue

Asian Paints

demand conditions coupled with downtrading and

growth in FY26.

increased competitive intensity have been adversely



The company maintains an EBITDA margin

impacting revenue performance.

guidance of 18-20%.



The value-volume gap should not be more than 6%, as



APNT will focus on providing value to customers

per the management; however, it exceeded that range and strengthening the brand saliency rather than

in 4Q (~7%). APNT expects the gap to narrow down to just discounting or entering a pricing war.

their guided levels.

Moreover, strengthening backward integration

and sourcing efficiencies will aid APNT in investing

further in its brands.



BRIT posted consolidated total revenue growth of



Management highlighted that EBITDA margin will

9% YoY in 4QFY25 and volume growth of ~3%

be maintained at 17-18%.

Britannia



Consolidated gross margin contracted by 480bp YoY



New launches are being more focused on the

to 40.1% (in-line) due to a rise in commodity prices. premium side. The overall premium portfolio



Steep RM inflation was seen in 4QFY25 as Flour was continues to do well for BRIT.

up 12% YoY, Palm oil was up 54% YoY, Cocoa rose



Macro trends improving indicating gradual

83% YoY and milk was up 21% YoY. BRIT took price consumption recovery in FY26.

hikes to mitigate the same.



Direct reach has expanded to 2.87 million outlets,

with rural distribution now covering 31,000

distributors.



Dabur’s consolidated sales grew by 1% YoY.

The



Dabur expects consumer demand in India to

India revenue declined 5.2%, with a volume decline recover progressively in the coming quarters, both

of 5%.

in urban and rural markets.

Dabur



FMCG demand trends remained subdued amid high



For FY26, Dabur aspires to post high-single-digit

food inflation and a surge in the cost of living, which value growth and increase its operating margin.

limited urban spending during 4QFY25.



Dabur took a 3.5% price hike to offset inflation, but

it was neutralized by trade schemes and

promotions.



The India revenue grew 7% YoY, with 4% volume



GCPL believes that the macro outlook is set to

growth.

improve in the near to medium term, aided by a



The India business’s gross margin contracted 590bp

healthy monsoon outlook, easing food inflation,

YoY to 51.9%. GP was down 4%. EBITDA margin

and potential tax reliefs—supporting both rural

Godrej Cons.

contracted 400bp YoY to 22.6%.

and urban consumption.



GCPL stated that demand conditions in India have



For FY26, the company has guided for mid- to

continued to be impacted by headwinds in urban

high-single-digit volume growth, high-single-digit

consumption. A surge in palm oil prices by more

revenue growth, and double-digit EBITDA

than 50% is adversely impacting its EBITDA margin.

growth.



GCPL reported consol. net sales growth of 6.3% YoY



In FY26, the ETR will reduce to 26% from ~30% in

while consol. organic volumes for 4QFY25 grew 6%

FY25.

YoY. Gross margin contracted 360bp YoY to 52.5%,



GCPL expects its India business to see mid-to-

while EBITDA margin contracted 140bp YoY to

high single-digit volume growth. This growth will

June 2025

CONSUMER | Voices

21.1%.

be backed by ~2% volume growth in soaps, ~7%

volume growth in HI, and ~15% volume growth

in the rest of its domestic portfolio. GCPL does

not expect any price cut in the near term.

The macro environment is expected to improve in

the near to medium term, supported by both

external and internal factors. Externally, favorable

agricultural output (strong Kharif and Rabi

seasons), declining food inflation, and potential tax

reliefs are likely to drive better rural and urban

consumption.

HUVR has implemented price hikes to mitigate the

impact of raw material price inflation. The

company will take a low-single-digit price hike if

commodity prices remain at the current level.

Growth is expected to gain momentum through

FY26, supported by a combination of improving

macro tailwinds and portfolio enhancement

initiatives, with 1HFY26 growth likely to outpace

2HFY25.

Management revised its EBITDA margin guidance

to 22-23% for the next 2-3 quarters, compared to

the earlier guidance of the lower end of 23-24%,

reflecting increased investments in portfolio

transformation and market development.

The company expects margin pressure to sustain

over the next 1-2 quarters, driven by elevated

copra prices. It expects easing inflationary trends

toward the end of 1QFY26.

The company expects double-digit revenue

growth (unlike other FMCG peers) in the

medium term, and expects to deliver double-

digit operating profit growth.



Hindustan

Unilever



HUVR 4QFY25 consolidated revenue was up 3% at

INR154.5b, with 2% underlying volume growth.

Rural demand continues to show gradual

improvement, while urban demand remains

subdued.

Home Care delivered mid-single-digit volume

growth, with revenue up 2%. The company passed

on commodity deflation benefits to consumers

through calibrated price reductions.

Beauty & Wellbeing segment witnessed low single-

digit volume growth and 6% revenue growth,

impacted by the mass skin portfolio. The Hair Care

portfolio reported double-digit growth, fueled by

volume and the company has done several new

launches ahead of the summer season.

Food & Refreshment (F&R) revenue declined 1%,

with volumes declining in mid-single digits. Tea

witnessed low single-digit growth, led by pricing.

Coffee reported double-digit growth.



Marico



PIDI



UNSP



Domestic revenue growth was 23% YoY with 7%



volume growth. International growth was 11% YoY

(16% cc growth).

Consumer sentiment remained stable during 4Q,

supported by improving rural demand and mixed



trends across the mass and premium urban

segments.

It recently implemented an additional 8-10% price

hike, bringing the total hike to ~30% due to rising

copra costs. It has not yet seen a significant volume

impact from the recent price hikes.

UVG was 10% in 4QFY25. Consumer business



witnessed value and volume growth of 9% and 8%

YoY. B2B business reported 14% and 16% value and



volume growth.

The impact of price cuts has been minimal, and the

value-volume gap has now neutralized. Management

aims to drive revenue growth primarily through



volume expansion going forward.

Urban demand improved in 4Q; however, rural

demand growth continued to outpace urban demand

growth.

GM expanded 160bp YoY to an 18-quarter high of

55%, driven by benign raw material prices. VAM

dipped to ~USD880/t in 4QFY25 from USD925/t in

4QFY24. PIDI remains focused on reinvesting in

branding and customer acquisition.

UNSP reported revenue growth of 11% YoY in 4QFY25,



with total volume growth of 7%, supported by re-entry

in AP (since Sep’24). The Prestige & Above (P&A)

segment clocked volume and value growth of 9% and

13%. The Popular segment posted a 2% volume

decline with marginally 1% revenue growth.

EBITDA margin expansion led by gross profit growth

and cost control efficiencies.

Management has maintained its guidance of

double-digit UVG for FY26.

PIDI aims to achieve growth of 1-2x of GDP in its

core category and 2-4x in its growth category.

However, growth is likely to be at the lower end of

this range given the current demand environment.

With the implementation of the UK-FTA, the

accessibility of Scotch whisky in India is set to

improve, paving the way for new premium

offerings for Indian consumers. The reduction in

import duties—from 150% to 75%—is expected to

translate into high single-digit reductions in

consumer prices and drive additional volumes in

the high single-digit range.

June 2025

CONSUMER | Voices

Asian Paints

Current Price INR 2,243

Click below for

Detailed Concall Transcript &

Results Update

Neutral

India Business



Paint market size would be INR800b with organized players having ~80% value

market share.



4QFY25 was a tough quarter for APNT as muted demand conditions and

consumer sentiment, coupled with downtrading, and increased competitive

intensity impacted revenue.



Value volume gap should not be more than 6% as per APNT, however, it

exceeded that range in 4Q (~7%). They expect the gap to narrow down to their

guided levels.



APNT has seen some postponement of repainting, given the inflationary

pressure on summers, few are downtrading as well.



T3/4 markets are doing better than T1 and metros.



The management stated that the decorative business is far more impacted than

the industrial business.



The Industrial Business recorded ~6% growth, driven by strong performance in

the General Industrial and Automotive segments.



Distribution expansion continued with 1.69 lac touch points.



On competition: APNT will focus on providing value to customers and

strengthening the brand saliency rather than just discounting or entering a

pricing war. Moreover, strengthening backward integration and sourcing

efficiencies will aid APNT to invest further in its brands.



New Launches: APNT has focused on revamping the packaging with a premium

look across the luxury, premium, and economy range of products. A lot of

premium products launch, Apex Ultima Protek with 12 12-year warranty. Future

of waterproofing

– ‘Smartcare Infinia’ with 25 years of waterproofing warranty

for terraces. There is also a range of regional packs (Gujarat, Tamil Nadu,

Karnataka, UP, and Uttarakhand) under Smartcare Damp proof. Also launched a

new campaign for Ace Exterior Emulsion to target the bottom of the pyramid,

value customers.



New products contributed to ~14% of overall revenues in Q4FY25. The

management indicated ~60% of NPDs to be in the premium and luxury product

range.



Mid to luxury homes demand is picking up, which will aid demand for APNT

premium products as well.



Beautiful Homes Painting Services & Trusted Contractor Services continues to

grow strongly.



Home Décor (~ 4.5% of decorative revenue) saw muted performance as

discretionary spending under pressure. White Teak sales are impacted by BIS

challenges as it is mainly imported from China.



Beautiful Homes Signature Store launched in Mumbai - Borivali, spread across

14k sqft. and Bandra, spread across 15k sqft. Similarly, it launched in Surat with

13k sqft.



Projects/Institutional Business is witnessing a healthy demand driven by the

Factories & Builders’ segment. Moreover, traction is sustained in the

government segment since 3QFY25.

June 2025

CONSUMER | Voices

International Business



Q4 international business revenue dipped 1.5% in INR terms, growing 6% in

constant currency terms. FY25 revenues remained flat YoY in INR terms.



Africa's performance was impacted by currency devaluation, high inflation in

Egypt & Ethiopia.



The Middle East saw strong double-digit growth, especially in the UAE, which is

a key growth market for APNT.



Asia: Single-digit revenue growth; Continued recovery seen in Sri Lanka & Nepal;

Macroeconomic conditions a concern in Bangladesh.



In 4QFY25, the profitability was impacted due to higher costs on currency

devaluation in key markets.

Near-term outlook



APNT expects demand recovery to take time and will be gradual. They expect

T3/4 towns to continue doing better in the near term, as normal monsoon

forecast coupled with continued support from Government spending should

support rural demand trends further.



They expect competitive intensity to remain elevated.



The geopolitical situation remains uncertain across many geographies. Flux in

world trade order with the tariff war expected to persist.



While the company expects some softening in raw material prices, they are

keeping an eye on INR recovery.



APNT expects to deliver single-digit value growth in FY26.



The company maintains 18-20% EBITDA margin guidance for the medium term.

Capex



Backward integration projects (VAM-VAE & White Cement) remain on track. The

white cement plant will be operational by June 2025, which would further

improve cost efficiency as well as enhance capability to bring out differentiated

products with unique specs, venturing into cements. The VAM project is set to

be fully operational by March 2027.



Capex to be INR7-8b for FY27 and FY28 each.

Britannia Inds

Current Price INR 5,601

Click below for

Detailed Concall Transcript

& Results Update

Neutral

Business environment and performance



Macro trends are improving, indicating a gradual consumption recovery in FY26.



In 4QFY25, delta is 5.5% between volume and revenue. With moderation in RM

prices, BRIT does not expect any more price hikes.



BRIT has expanded its direct reach from 2.79m outlets to 2.87m outlets and has

strengthened its rural distribution to 31,000 distributors from 30,000 in FY24.



BRIT’s market share has largely remained stable QoQ.



Competition from D2C players is not a matter of concern for BRIT. However,

with MT and QC growing, BRIT will remain watchful of any developments in D2C

space.



BRIT has continued to leverage E-com channel. In FY25, E-com revenue grew

7.4x compared to other channels. BRIT also launched E-com only products. E-

com and QC account for ~4% of total sales, and they are growing fast, though

the overall salience is relatively low.

In QC, packaged foods’ salience is lower

compared to groceries and personal care categories.

June 2025

CONSUMER | Voices

On campaigns, BRIT launched special edition packs in partnership with Avani

Lekhara

– India’s first woman to win two Gold Medals at the Paralympics. Also,

strengthening

the ‘Chai’ association for Good Day in partnership with Chai Point

at the Maha Kumbh.



On NPDs, launched Grow

–

developed with 16 essential nutrients for kids; New

Britannia Cheese

–

with superior taste, creamier texture; relaunched Cake with

a softer, tastier and fruitier proposition and initial traction for new cakes has

been encouraging.



New launches are being more focused on premium side. The overall premium

portfolio continues to do well for BRIT.



BRIT’s media investments focus on innovations

and adjacencies.



Price increases actioned during the quarter to counter inflation and sustain

margins coupled with stepping up of cost saving initiatives.



Remain vigilant of the competitive pricing actions at both regional and national

levels.



BRIT stated that focus will remain on sustaining margins while remaining

competitive.



In FY26, BRIT expects both volume- and value-led revenue growth. However,

given the price hikes, it expects a delta between volume and value growth.



Succession planning is in play, and CEO will be announced in the next 3-4

months, till then Mr. Varun Berry will be acting as interim CEO.



The RTM 2.0 strategy aims to expand distribution, enhance sales capabilities,

upgrade technology, and improve street-level engagement, which will help BRIT

to increase its depth and width in rural markets.



Its current direct reach is 2.9m and total reach is 6.5m in the 9m outlets FMCG

category.



BRIT remains open to inorganic growth opportunities.

Adjacent categories



Croissant and Wafers grew ~3x of Biscuits in FY25, led by improving channel mix.



The cakes portfolio was relaunched with the recipe and product enhancement

and exciting packaging, which led to healthy traction.



Rusk

–

High single-digit value growth backed by healthy volumes driven by

revamped packaging rolled out in Apr’25. Overall competitive intensity in the

category remains high as there are ~2,500 players (mostly regional) as per BRIT.



Drinks

–

Healthy Double-digit growth across channels.



Cheese

–

The newly developed product, leveraging French expertise, exhibiting

positive early market traction. Few players offer heavy discounts in alternate

channels as they do not have distribution system, which impacts BRIT. Now the

company has launched same pricing across channels, which is resulting in 40%+

growth in its traditional channel.



Cake, rusk, dairy and bread are ~INR8b each, while newer categories launched

in the last 4-5 years such as croissants, milkshakes and wafters are in the range

of INR1-2.5b. ~75:25 is the split between old and new categories.

Cost and margins



Steep RM inflation seen in 4QFY25 as Flour was up 12% YoY, Palm oil up 54%

YoY, Cocoa up 83% YoY and milk up 21% YoY. BRIT took price hikes to mitigate

the same.



BRIT does not expect any deflation in wheat prices in the coming quarters.



Management highlighted that EBITDA margin will be maintained at 17-18%.



June 2025

CONSUMER | Voices



Wheat and oil are ~30% each and sugar is ~20% of total RM basket for FY25.

Other income for FY26 should stabilize at the current range. Tt is mainly the

government incentives for the plants set up by BRIT.

FY25 saw 9x higher cost savings than FY14. Almost 2.5% savings by cost

efficiencies. For FY26, BRIT expects more than 2.5% of saving.

79% of packaging plastic recyclable, improvement of 17% YoY. 75% of laminate

waste recycled, improvement of 23% YoY.

Dabur

Current Price INR 488

Buy

Click below for

Detailed Concall Transcript

& Results Update

Operating business and environment



FMCG demand trends remained subdued with high food inflation and a surge in

cost of living, which limited urban spending during 4QFY25.



4QFY25 primary channel inventory filling was lower, though secondary offtakes

remained healthy.



Emerging channels, comprising Modern Trade, E-Commerce, and Quick

Commerce, grew in double digits, although general trade in urban markets

remained under pressure.



Dabur drove consumer engagement and brand superiority across product

categories, leading to market share gains across 90% of the portfolio.



Dabur expects consumer demand in India to recover progressively in the coming

quarters, both in urban and rural markets.

Cost and Margins



The management alluded that for FY25, ~80% of the inflation impact was

reflected in 4QFY25, which led to India GM contracting by ~250bp.



Most of the price increases by Dabur were largely negated by certain trade

promotions; hence, gross margin was impacted. Inflation was ~5%, while price

hike was ~3.5% by Dabur in 4Q. This price hike will flow into 1QFY26 as well.



For FY26, Dabur aspires to post high-single-digit value growth and increase its

operating margin.

Segmental performance

HPC



The HPC segment recorded a 3% YoY sales decline during the quarter.



Oral Care declined by 5% YoY, impacted by a higher base effect (22% growth in

4QFY24). Meswak and Dabur Herbal portfolio performed well.



In oral care, the herbal category now accounts for ~31% of the total toothpaste

market, which was ~30% last year and is growing at 2x of non-herbal category

growth.



Hair Care declined ~5% YoY. However, Shampoo grew in mid-single digits, while

Hair oils grew ahead of the category. Coconut hair oil portfolio recorded a

strong growth of 11% YoY.



Home care was up 1% YoY, with Odonil growing in mid-single digits and Aerosol

and Gel pockets reporting strong double-digit growth. Odomos reported muted

performance on account of a high base effect.



Skin care grew 8% YoY driven by double-digit growth in Gulabari franchise.

Healthcare



The Healthcare portfolio declined by ~5% YoY during the quarter.



Health Supplements saw a ~4% YoY decline as delayed and contracted winters

impacted Chyawanprash and Honey. Glucose registered 10% growth.

June 2025

CONSUMER | Voices

The OTC & Ethicals segment declined 8% YoY as winter-centric products such as

Lal tail and Honitus reported muted performance. Health juices maintained

growth momentum with 25%+ growth YoY.



Digestives declined 2% YoY. However, Hajmola saw low-single digit growth YoY

and Hajmola candies recorded strong double-digit growth. Extensions and

variants now contribute to more than 50% of Hajmola franchise.



The focus on advocacy vertical to promote Ayurveda to the modern doctors will

continue and the turnover will be taken from current INR1b to INR2b.

Food & beverages



The Foods segment maintained its strong growth momentum, reporting ~14%

YoY growth, driven by strong performance across Hommade coconut milk,

Lemoneez, etc.



Badshah delivered 6% growth YoY with volume growth of 11% YoY. Entered new

markets of Rajasthan and Madhya Pradesh. Dabur product portfolio expansion

plan is based on regional tastes & preferences.



Institutional sales of Badshah this quarter were impacted by a cut down in

budgetary spends by CSD.



The Beverages segment declined by 9% YoY, impacted by high competitive

intensity and a slowdown in urban consumption, as 70% of the portfolio is in

urban India. While the overall portfolio declined, premium segment did well,

with Real Activ and Coconut water recording robust growth of 11%.



For its out-of-home drinks portfolio, Dabur has increased its channel margins

slightly to compete with the ongoing Campa and cola pricing war. Apart from

this, Dabur’s channel

margins remained unchanged for the rest of the beverages

portfolio.



For beverages, Dabur expects low-mid single digit growth in FY26. It is launching

INR10/20 bottles in rural and semi-urban markets with gradual scaling up of

distribution.



The cold pressed juices and ghee and fats and oil are growing ~30% YoY.



Emami

Current Price INR 580

Buy

Click below for

Detailed Concall Transcript

& Results Update

Performance and outlook



Demand trends continued to mirror 3Q in 4QFY25. While rural markets

continued to perform well, mass urban demand remained subdued. Emami

expects a gradual pick-up in consumption, supported by easing inflation, recent

income tax benefits, higher government capex, and a more accommodative

monetary policy, including potential rate cuts.



For 1QFY26, summer has been slightly impacted by the sudden rainfalls; the

southern and eastern regions are more impacted for Emami. Particularly, the

talc powder offtake was

hit in Apr’25.



Organized trade channels comprising Modern Trade, e-Commerce, and

Institutional sales contributed 27.6% of domestic revenues in FY25, expanding

by 140bp YoY. Growth in these channels at 13% YoY outpaced overall domestic

growth.



The International business posted a 6% growth YoY in 4QFY25, demonstrating

resilience despite geopolitical volatility across Bangladesh, the Middle East, and

June 2025

CONSUMER | Voices

parts of Africa. Strong momentum was witnessed across SAARC, SEA, CIS, and

African markets.



For strategic subsidiaries, Emami is scaling its marketplace and quick commerce

presence, while driving cost efficiencies as well as launching new products in the

next 3-6

months to tap into evolving consumer trends. The Man Company’s

sales stood at INR1,500m, while Brillare’s

sales came in at INR500m in FY25.

Management expects strong double-digit sales growth from these businesses in

FY26. Recently, Emami has appointed Mr. Zairus Master as the COO of The Man

Company.



NPDs contributed ~3-4% to sales in the last 2-3 years, and Emami expects it to

be in the similar range going forward.



Their digital-first portfolio on Zandu Care continues to scale rapidly, growing

over 50% YoY and now contributing over 80% of Zanducare sales. Products

launched in the last two years now contribute ~50% to total Zandu Care sales.

Cost and margins



In 4QFY25, input costs broadly remain under control and are expected to remain

stable in the near future.



Management expects 2-3% price hikes in FY26.

New product launches



The company rebranded its flagship product Fair and Handsome, to Smart and

Handsome in Jan’25, reflecting a strategic shift toward a more inclusive and

contemporary positioning in the male grooming category.



It forayed into the (INR40b) brightening cream category with the launch of

‘Emami Pure Glow’. The brand has been rolled out across select markets in

South, West, and North India, with a national launch planned in the near future.



Launched Zandu Hair Growth Mask, Zandu Plant-Based Biotin Plus, and Lemon

and Zandu Honey Green Tea on Zanducare.



Emami launched 25+ new products in Domestic Business, including 11 new

launches on Zanducare in FY25.

Segmental information



The healthcare portfolio Strong double-digit growth in Immunity Range, Zandu

Honey, Zandu Health Juices, and Zanducare digital first portfolio



In the BoroPlus range, growth was led by the core BoroPlus Antiseptic Cream

and lotions, benefiting from extended winters.



4QFY25 is a seasonally strong quarter for Boroplus. That said, Boroplus is doing

well in April and May, given a muted summer.



Kesh King’s Sachet Hanger Drive was taken across leading markets to enhance

Shampoo Sachet availability & visibility. Moreover, Kesh King's grammage was

increased from 5.5ml to 6ml, to be at par with the competition.



Strategic Subsidiaries

saw revenue declining by 5% in FY25. The Man Company’s

business was hurt by a management transition and leadership change. Emami is

driving cost optimization measures to improve gross margins and focuses on a

secondary approach in B2B businesses.

June 2025

CONSUMER | Voices

Godrej Consumer

Current Price INR 1,215

Click below for

Results Update



Buy



Demand conditions in India have continued to be impacted by headwinds in

urban consumption. However, GCPL believes that the macro outlook is set to

improve in the near to medium term, aided by a healthy monsoon outlook,

easing food inflation, and potential tax reliefs—supporting both rural and urban

consumption.

Goodknight Agarbatti has emerged as the leading incense stick brand in the

market, generating a cumulative revenue of INR1b within 15 months of launch

and capturing an 8% market share. For FY26, GCPL expects the business to

record ~INR1-1.1b revenue.

The new RNF molecule is performing well for GCPL and will be a key growth

driver for the company’s household insecticides portfolio.

The Godrej Fab liquid detergent portfolio has achieved an annualized revenue

run rate of INR2.5b, with a two-year category CAGR of ~30-35%. GCPL expects

this business to double every year for the next few years.

The body wash category is growing at a 30-35% two-year CAGR, while the soaps

category is growing at 5%. GCPL is witnessing strong traction for its Cinthol

Foam Body Wash in quick commerce.

For FY26, the company has guided for mid- to high-single-digit volume growth,

high single-digit revenue growth, and double-digit EBITDA growth.

In FY26, the ETR will reduce to 26% from ~30% in FY25.

GCPL expects its India business to see mid-to-high single digit volume growth.

This growth will be backed by ~2% volume growth in soaps, ~7% volume growth

in HI, and ~15% volume growth in the rest of its domestic portfolio. GCPL does

not expect any price cut in the near term.

For the India

business, GCPL’s medium-term

aspiration includes achieving

volume growth in high single digits and EBITDA margin in mid-to-high 20s range.

For Indonesia, its medium-term target is to achieve volume growth in high single

digits, with an EBITDA margin in mid-20s. For ROW, management aims to

achieve mid-single-digit volume growth with >15% EBITDA margin over the next

two years.

GCPL plans to invest INR7b in strengthening its organic manufacturing capacities

over the next 18-24 months.

Hindustan Unilever

Current Price INR 2,377

Click below for

Detailed Concall Transcript &

Results Update

Buy

Operational environment



FMCG rural demand witnessed a gradual improvement during the year, while

urban consumption remained relatively moderate.



The macro environment is expected to improve in the near to medium term,

supported by both external and internal factors. Externally, favorable

agricultural output (strong Kharif and Rabi seasons), declining food inflation, and

potential tax reliefs are likely to drive better rural and urban consumption.

Internally, HUL’s portfolio transformation strategy is gaining traction. Key

initiatives include the relaunch of core brands like Lifebuoy and Glow & Lovely,

along with accelerated innovation in the Future Core and Market Maker

portfolio.

June 2025

CONSUMER | Voices



Growth is expected to gain momentum through FY26, supported by a

combination of improving macro tailwinds and portfolio enhancement

initiatives, with 1HFY26 growth likely to outpace 2HFY25.

HUVR has implemented price hikes to mitigate the impact of raw material price

inflation. The company will continue to take a price hike in the low single-digit if

commodity prices remain at the current level.

The company remains focused on driving volume-led, competitive growth in the

near term, prioritizing top-line momentum over margin expansion.

For FY25, both Underlying Volume Growth (UVG) and Underlying Sales Growth

(USG) stood at 2%, with flat pricing growth as cost efficiencies and deflation in

select raw materials offset inflationary pressures.

While absolute volume tonnage grew in mid-single digit in FY25, it was partially

offset by an adverse product mix.

Both small and large pack sizes delivered healthy growth during the quarter,

with an improved mix versus the previous quarter.

The company has implemented calibrated price increases in Skin Cleansing and

Foods, which were offset by the deflation in the Home Care portfolio.

Over 80% of turnover now exhibits superior performance on the Unmissable

Brand Superiority (UBS) metric relative to competition.

A 200bp portfolio shift from Core to Future Core and Market Maker segments

has occurred, aligned with the company’s strategic intent.

The company has repositioned Lifebuoy and Glow & Lovely to strengthen its

Core portfolio.

In the Future Core and Market Maker segments, Pond’s delivered double-digit

USG in FY25, reflecting strong consumer traction. Moreover, it delivered

revenue of INR15b.

HUVR’s Liquids portfolio in the Home Care category delivered revenue of

INR35b and continued to scale rapidly with robust double-digit growth. The

company is focusing on enhancing formulations, democratizing usage, tapping

into new demand spaces, and premiumizing the category. Liquid product

penetration increased 200bp YoY, supported by over 3x the media spend

compared to the rest of Home Care.

The acquisition of Minimalist has been completed, with FY25 turnover

exceeding INR5b.

The Market Maker portfolio in e-commerce recorded c.45% YoY growth in GSV.

With a portfolio size of INR70b, there is significant headroom for growth in the

category.

The company’s Shikhar app gained over 400bp share in traditional trade, driven

by an improvement in the direct value-weighted distribution.

HUL is leading category growth in Modern Trade, strategically expanding its

assortment (~2x) in Quick Commerce, and implementing platform-specific

innovations in e-commerce.

E-commerce contributed 7-8% of total sales in FY25, with Quick Commerce

accounting for ~2%. Organized trade remained margin accretive due to a higher

mix of the Future Core and Market Maker portfolio.

The Effective Tax Rate (ETR) for 4QFY25 stood at 25.7%, adjusted for capital

gains on the Pureit divestment and prior period tax adjustments.

June 2025

CONSUMER | Voices

Costs and margins



Gross margin performance during the quarter was impacted by raw material

cost fluctuations and continued volatility in commodity markets. While input

costs for crude oil and soda ash declined, prices for palm oil, coffee, and tea

trended upward. Additional trade investments—such as a 400bp increase in

Weighted Value Distribution (WVD) within traditional trade—also contributed to



margin moderation, as these strategic distribution enhancements come with

associated cost implications.



Gross margins are expected to remain under pressure in the near term as the

company continues to prioritize delivering the right price-value equation to

consumers.



Management has revised its EBITDA margin guidance to 22-23% for the next 2-3

quarters, compared to the earlier guidance of the lower end of 23-24%,

reflecting increased investments in portfolio transformation and market

development.



Despite short-term pressures, the long-term margin outlook remains intact, with

a gradual improvement in margins expected over time.



The near-term margin contraction is a deliberate strategic choice to capitalize

on improving macroeconomic conditions and drive volume-led growth through

intensified brand investments and channel activation. The EBITDA margin

dilution is being reinvested across key expense lines of P&L, including trade

investments, A&P, and product development.



The margin softness is broad-based across categories but more pronounced in

the Beauty & Wellbeing segment, where innovation and digital-first investments

are being scaled to capture future growth.

Segmental highlights

Home Care



The Home Care segment posted 2% USG, supported by mid-single-digit volume

growth. Price growth was negative, reflecting the company's move to pass on

commodity cost savings to consumers through pricing actions.



Fabric Wash delivered mid-single digit volume growth, primarily driven by

premium formats and fabric conditioners, while Household Care achieved high-

single digit volume growth, reflecting strong underlying demand.



The Liquids portfolio across Fabric Wash and Household Care continued to

deliver robust double-digit growth, underpinned by sustained market

development efforts and expansion into new formats and consumption

occasions.



The relaunch of Surf Excel Smart Shots with enhanced formulation further

strengthened the premium proposition in Fabric Wash.



In the Fabric Care segment, the company operates across Bars, Powders, and

Liquids, each serving a distinct consumer need. Bars remain highly price-

sensitive, and HUL focuses on delivering the best value proposition through

competitive pricing and quality. The powder detergent segment continues to be

a key profit driver, offering products across a wide price spectrum and

maintaining a strong competitive edge in the category. The Liquids portfolio,

now valued at over INR35b, continues to deliver strong double-digit growth, led

by market development and premiumization. Key brands such as Surf Excel, Rin,

and Sunlight are performing well across their respective segments, reinforcing

the company’s

leadership position in fabric care.

June 2025

CONSUMER | Voices

Beauty & Wellbeing



The Beauty & Wellbeing segment delivered 6% revenue growth, with low-single

digit underlying volume growth.



Hair Care reported strong double-digit growth, led by volumes and supported by

broad-based performance across core, emerging, and future-forward segments.



Skin Care and Colour Cosmetics witnessed marginal declines, largely due to

continued softness in the mass skin care category.



The company achieved robust double-digit growth in digital-first and modern

trade channels, underlining the effectiveness of its omnichannel strategy.



Several new products were introduced, including Liquid IV in the hydration

space and summer-focused innovations under Lakme and Vaseline. Glow &

Lovely underwent a complete 6P relaunch with an upgraded brand proposition,

supported by strong digital media investment to build relevance and visibility.



In the sunscreen category, where current penetration remains low, the

company sees significant white space. Given that UV exposure contributes to

both skin aging and damage, the company is focused on category development

by educating consumers, ensuring product claims are met, and reinforcing its

premium, online-focused offerings. Sunscreen is a high-margin, high-growth

opportunity, and HUL is prioritizing innovation and brand building to grow the

category meaningfully over time.

Personal care



Personal care posted 3% revenue growth, with a marginal decline in volumes.



The skin cleansing portfolio registered low-single digit growth, supported by

calibrated pricing actions to offset inflationary pressures. The non-hygiene

segment within skin cleansing delivered strong high-single digit growth,

indicating healthy consumer demand and premiumization.



Bodywash continued to strengthen its market leadership, delivering double-digit

growth, driven by increased penetration and superior product offerings. Oral

Care grew in low-single digits, led by Closeup, which expanded its presence in

the premium segment with the launch of the White Now toothpaste range.



Lifebuoy was relaunched at the Maha Kumbh, featuring an upgraded

formulation and a sharper focus on the brand's skin protection proposition,

reinforcing its role in the core hygiene portfolio.

Food & Refreshment (F&R)



The Foods business reported a marginal 1% revenue decline, as low-single-digit

price growth was offset by volume softness, particularly in the Nutrition Drinks

category.



Tea continued to maintain value and volume leadership, delivering low-single

digit growth, primarily driven by pricing actions.



Coffee sustained its strong growth trajectory, with revenue rising in double

digits, supported by premium positioning and increasing consumer adoption.



Nutrition Drinks remained under pressure due to structural category headwinds

and the transition in pack-price architecture.



The company is proactively driving premiumization and consumption

enhancement in Nutrition Drinks through a three-pronged strategy: a)

Modernizing the core with improved products and propositions, b) Enhancing

specialist nutrition through stronger claims and superior formulations, and c)

Expanding Boost into high-growth demand spaces and new regional markets.

June 2025

CONSUMER | Voices



Packaged Foods delivered mid-single digit growth, led by strong demand in

Ketchup, Mayonnaise, and International Cuisines. Ice Creams posted double-

digit volume growth, supported by successful innovation and portfolio

expansion, including launches like Magnum Pistachio, Kwality Walls Twister, and

ready-to-drink coffee formats under Bru.

Indigo Paints

Current Price INR 1,076

Buy

Click below for

Detailed Concall Transcript &

Results Update

Performance and outlook



The paint industry, along with the broader consumer sector in India, witnessed

persistent sluggishness in FY25.



Emulsion value growth stood at 1%, while volume declined by 2.5%, indicating a

shift toward premium products and an improved product mix.



Kerala continued to pose challenges as most consumer companies with high

exposure to the region saw a deceleration in growth. However, Indigo managed

to maintain a relatively stable performance, with sales fluctuating in a narrow

range of +1% to -1%.



The company’s strategic focus remains on the premium and emulsion segments,

with a deliberate shift away from the economy segment.



The weak demand environment triggered an increase in trade schemes and

dealer discounts to push volumes, resulting in a slight YoY rise in discounts and a

corresponding impact on gross margins.



As of Mar’25, finished goods inventory days reduced to 56-57

(from 60 days in

FY24), while raw material inventory days declined to 29 (from 36 days in FY24).



Payables days also dropped from 60 to 55, mainly due to government directives

mandating payments to MSME suppliers within 45 days.



The company has consciously chosen not to enter the low-margin general

industrial segment, despite competitors pursuing it to boost top-line growth, as

it affects margins and profitability.



Promotional efforts have been reoriented from traditional schemes to direct

engagements with painters and contractors to drive secondary sales.



As demand conditions improve, the company has started to moderate its trade

discounts and expects peers to follow suit.



A gradual recovery in demand was visible in 4QFY25, with further improvement

expected in 1QFY26; the company expects demand to normalize and return to

historical growth rates by 2QFY26.

Costs and margins



Continued softening in raw material prices, along with growing contributions

from premium emulsions and waterproofing products, is expected to support

margin expansion.



A&P spending as a percentage of revenue is expected to decline slightly in FY26,

despite increased investments in digital marketing.



EBITDA margins are expected to improve in FY26, driven by recovering demand,

lower input costs, and a more favorable product mix.



Margins at Apple Chemie were previously impacted by an unfavorable product

mix; however, 4QFY25 saw marked improvement. The company is undertaking

various strategic initiatives aimed at further enhancing margins in FY26.

June 2025

100

CONSUMER | Voices

Distribution network



Indigo added 228 tinting machines in 4QFY25, bringing the total count to

11,000.



As of Mar’24, the number of active dealers stood at 18,391,

reflecting a QoQ

decline of 227.



The number of active dealers declined in the last two quarters due to subdued

demand; however, a rebound in active dealer count is expected in 1QFY26.



The pace of tinting machine installations is set to accelerate in FY26.

Others



In Jodhpur, a water-based plant with a capacity of 90,000 KLPA is expected to be

commissioned by 3QFY26, while a solvent-based plant with a capacity of 12,000

KLPA is targeted for commissioning by 1QFY26 or 2QFY26.



The company also plans to complete the brownfield expansion of its Putty plant

by 1QFY26 or 2QFY26.

Jyothy Labs

Current Price INR 342

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Performance and outlook



While rural demand showed relative improvement in 4Q, it was not sufficient to

offset the continued weakness in urban consumption. Higher spends on

healthcare, rents, etc. are impacting urban wallet share. Urban demand is

expected to stay subdued in 1HFY26 due to macroeconomic pressures.



Consumers are opting for smaller packs, holding back on bulk purchases and

displaying heightened price sensitivity.



Fiscal measures like income tax relief announced in the budget should support

consumption, though with a delayed impact.



The difference in value and volume growth is attributed to higher grammage

and trade promotions offered by the company on select SKUs.



JYL expects 2HFY26 to be better than 1H as demand improves.



The company expects volume growth in 1HFY26 to be mid-single digits, while it

is expected to be in double digits in 2HFY26.



Competitive intensity is expected to remain high in the near term.



The salience of LUPs is increasing for JYL as consumers prefer smaller packs. In

certain categories like dishwash, liquid detergents, etc., LUPs’ contribution is

higher.



The gap between volume and value growth is expected to remain in 2-3% range

in FY26.



Expects some price hikes in soaps category in the coming quarters.



JYL to focus on cost efficiency and selective pricing actions to safeguard margins.



The company has strong NPD pipeline for FY26.



Washing powder and liquid detergent have a cumulative market size of

INR350b, growing at 6-7% YoY. Liquid Detergent is expected to be an INR30b

market, growing at 20-25% YoY as per JYL.



Overall fabric care EBIT margin compressed in 4QFY25 due to the product mix.

Fabric care margins are expected to sustain at ~23-24% over the medium term.

Currently Liquid Detergents is margin-dilutive for JYL.

June 2025

101

CONSUMER | Voices

The company continues to strengthen its distribution network: direct reach

increased by 100,000 outlets to 1.3m and indirect reach increased by 800,000

outlets to 3.6m outlets across India.

Costs and margins



Key RM prices remain elevated for JYL, which is exerting pressure on margins.

JYL is taking calibrated price hikes mainly in soaps and HI (coils) categories.



In the near term, A&P spending is expected to remain in the 8-9% range as % of

sales.



The company maintained its EBITDA margin guidance at 16-17% for FY26.

1HFY26 to have slightly higher margin pressure, situation to improve 2HFY26

onward.



ETR to remain at 23-24% for FY26.



LT Foods

Current Price INR 456

Buy

Click below for

Detailed Concall Transcript &

Results Update

Outlook and guidance



For FY26, the company has guided for consolidated revenue of INR100b and

~7% volume growth. Organically revenue is expected to remain flat, as 9-10%

volume growth will be offset by pricing decline. The company is targeting an

EBITDA margin of ~13% for the year.



The company expects to achieve ~20% ROE in FY26, supported by post-

acquisition synergies.



India and the US operations are projected to be net-debt free in FY26, with India

operations turning net cash positive starting Jul’25. Net debt will be limited

the European entity.



Over the next five years, India business is expected to clock a 10-15% CAGR.



Capex for FY26 is guided at INR3.4b (excluding acquisitions), primarily allocated

toward warehousing and the RTH facility in the US.



Additionally, Saudi Arabia is anticipated to contribute 25% of total revenue once

the company reaches the INR100b revenue milestone.

Freight, advertisement and admin costs



In FY25, margins were impacted by higher freight and advertising costs, with

freight expenses denting margins by 1.7% and ad spends by 0.4%.

Administrative costs also rose due to the capitalization of the UK facility.



Freight costs stood at 6.5% of sales for FY25 but improved to 5.8% in 4QFY25.

The company expects logistics costs to normalize to the historical range of 3.8-

4.8%, with a ~1% reduction anticipated in FY26.



Advertising expenditure is expected to increase in FY26, driven by a shift toward

consumer-facing investments to strengthen brand visibility and market

penetration.



In 1QFY26, though logistics costs are expected to normalize, the benefit will be

partially offset by higher ad spends. Despite this, the company anticipates a

slight improvement in EBITDA margins in FY26.

India business



Standalone performance in 4QFY25 was flat, primarily due to pricing pressure,

despite strong volume traction. The quarter saw QoQ decline owing to seasonal

trends, with 3Q typically being the peak period.

June 2025

102

CONSUMER | Voices

India basmati rice business reported a robust performance in FY25, with volume

growth of 12% and value growth of 13.5%. In 4QFY25 alone, volumes grew 15%

YoY, while value growth was 7%, impacted by a 6.5% decline in realizations.



Over the last five years, the basmati rice business has doubled in size, with

market share expanding significantly from 21% to 27%, underscoring the

company’s strong execution and brand strength in the domestic market.

International business



In the US, there has been no impact from recessionary trends; in April demand

was strong. Recession typically shifts consumption to in-home dining, which

benefits the business. There is no adverse duty impact, as it is offset by lower

raw material costs.



The Royal brand, commanding a premium and sold at the price point of ~USD20,

maintains a dominant >55% market share across both mainstream and ethnic

channels. Golden Star has seen its customers absorb a ~10% duty impact

without affecting demand.



In 4QFY25, Europe contributed 5.3% of total revenue. Growth appeared muted

due to the separate reporting of Europe and UK operations, which were

previously consolidated. The company is also planning to set up a rice factory in

Eastern Europe to strengthen its regional presence.



The India-UK FTA has no impact as the RTH business is focused on India and the

US, with no presence in the UK. Earlier, 4-5% of the UK business was sourced

from Pakistan, but in FY25, sourcing shifted entirely to India. The UK treaty and

Indus Water Treaty also have no effect, as brown rice continues to attract 0%

duty.



LTFOODS previously sourced 4-5% from Pakistan through its UK subsidiary, not

India, but had no Pakistan sourcing in FY25 and has no plans to resume. The

Indus Water Treaty impact is unlikely, as India exports 6m MT compared to

Pakistan’s ~700k MT, and Pakistan is not a significant player in key markets like

the Middle East.

Acquisition



LT Foods BV (Europe) has announced the 100% stake acquisition of Global

Greens Group (GG INV, GG EUROPE, and GG UK) entities engaged in the canned

food business, including products like corn, gherkins, onions, and cherries. The

acquisition involves cash consideration of EUR6m at the closing date and

EUR1.8m through an earn-out mechanism.



The acquired business operates two manufacturing sites with a combined

annual capacity of 117m jars and employs over 170 people. It generated

~EUR40m in revenue in CY24, with a pre-synergy margin profile of 6-7%. The

transaction is expected to be completed by 2QFY26.

Other



Other income includes exchange gains and service revenue from charges to

Golden Star.



Inventory increased 25% in value due to attractive prices, optimism about future

demand, and higher-than-usual paddy procurement (compared to rice), which

improves conversion margins.



June 2025

103

CONSUMER | Voices



Unlike the usual mix of in-season and off-season purchases, FY25 procurement

was mostly in-season, resulting in higher working capital days, driven by this

strategic paddy buying.

The company had significantly done product expansion with RTH and RTC

offerings.

Revenue loss from price reductions in India was compensated by volume

growth.

Golden Star enjoys a loyal US customer base for its Jasmine rice.

Marico

Current Price INR 703

Buy

Click below for

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Results Update

Business environment and outlook



Consumer sentiment remained stable during Q4, supported by improving rural

demand and mixed trends across the mass and premium urban segments.



Approximately 95% of the portfolio gained or maintained market share and

around 80% sustained or improved penetration on a MAT basis.



Indian business revenues grew 23% YoY, led by price hikes in core categories to

offset elevated input costs.



Alternate channels, such as modern trade and e-commerce, continued to gain

share over General Trade.



Management expects growth in core categories to improve, supported by easing

retail and food inflation as well as the prospect of a healthy monsoon.



Despite near-term input cost headwinds, the company aims to sustain double-

digit revenue growth and deliver double-digit operating profit growth in FY26.



The double-digit growth will be led by: 1) improving volume trajectory in the

core business, 2) continued price-led growth in 1HFY26, 3) sustained 25%+

growth in Foods, and 4) ongoing momentum in Digital-first brands.



Inorganic growth opportunities are being actively explored to strengthen the

company’s competitive position, expand the addressable market, and enter

strategic new geographies for long-term value creation.



High input inflation and copra procurement challenges have hurt regional

players, improving MRCO’s competitive positioning due to its scale and sourcing

advantage. Organized players tend to gain share during inflationary periods.



Project SETU was expanded to 11 states in FY25, with the goal of reaching 1.5m

direct outlets and a total footprint of 6m outlets by FY27.

Material costs, margin, and guidance



Copra prices increased 14% sequentially and ~48% YoY in FY25, surpassing the

company’s internal forecasts. Vegetable oil prices remained firm, rising ~25%

YoY in FY25. Crude oil derivatives remained stable during the period.



The company anticipates margin pressure over the next 1-2 quarters due to high

copra costs, which follow an 18-24 month cycle. It expects easing inflationary

trends toward the end of 1QFY26.



The company recently implemented an additional 8-10% price hike, bringing the

total hike to ~30% due to rising copra costs. It has not yet seen a significant

volume impact from the recent price hikes.



With the portfolio diversification, the company is reducing its dependence on

copra prices.



A&P expenditure was elevated in 4Q, reflecting ongoing investments in brand-

building in both domestic and international markets. Full-year A&P spending

grew 18% YoY.

June 2025

104

CONSUMER | Voices

Segmental performance

Parachute coconut oil



Parachute Rigids reported a 1% volume decline in 4Q, impacted by steep

consumer price hikes and ml-age reduction in select SKUs.



The brand delivered 22% revenue growth in 4Q, supported by pricing actions

implemented during the year.



Adjusted for ml-age reduction, the brand recorded low single-digit volume

growth.



Parachute Rigids gained ~70bp market share on a MAT basis.



Copra prices remain at historically high levels, though moderation is expected in

the coming months.



For FY25, the brand posted 2% volume growth and 13% revenue growth.



Management expects volume growth to pick up in FY26 as consumer pricing

normalizes.



Local players are experiencing supply chain disruptions and implementing sharp

price hikes in response to increasing RM prices.

Saffola oil



Saffola Edible Oils posted a 26% value growth in 4Q, despite a low single-digit

volume decline, driven by elevated pricing in response to high vegetable oil

prices.



The brand reported low single-digit volume growth and 13% revenue growth for

FY25.

VAHO



VAHO grew 1% in value terms in 4Q, marking a gradual sequential recovery,

driven by steady performance in the mid and premium segments.



The portfolio gained ~120bp in value market share on a MAT basis.



Management expects the positive growth trajectory to continue in FY26,

supported by sustained ATL investments and focused brand-building initiatives.

Foods and Premium Personal Care



Foods posted strong 44% YoY value growth in 4Q and over 30% growth in FY25,

crossing INR9b in annual revenues, 5x of FY20.



Saffola Oats delivered double-digit growth in FY25 and gained market share on a

MAT basis.



Saffola Cuppa Oats was launched during the quarter to expand the oats

portfolio.



True Elements and the plant-based nutrition brand Plix continued to see strong

growth momentum.



Premium Personal Care sustained robust momentum in 4Q, led by the Digital-

first portfolio comprising Beardo, Just Herbs, and Plix Personal Care.



The Digital-first portfolio exited FY25 with INR7.5b ARR, scaling ahead of

expectations.



Foods and Premium Personal Care together accounted for ~22% of the Indian

business revenue in FY25.



The gross margin of Foods and Premium Personal Care was ~300bp higher than

the core portfolio.



Management aims to grow the Foods business at 25%+ CAGR, reaching ~8x of

FY20 revenues (2x of FY24) by FY27.



The Digital-first portfolio is expected to scale to ~2.5x of FY24 ARR by FY27, with

its revenue share in the Indian business expected to rise to ~25% by FY27.



The Foods segment grew over 25% in FY25 and is expected to maintain a similar

growth rate of over 25% in FY26. A key driver of this growth will be expanding

distribution in underpenetrated categories like oats and masala oats. Typically,

2Q and 3Q see stronger growth due to the festive season, while 4Q tends to be

June 2025

105

CONSUMER | Voices

seasonally weaker. As a result, the food business exited FY25 with revenues of

INR9b, slightly below the earlier target of INR10b.

International business



The International business delivered 16% growth in CC terms in 4Q.



Bangladesh posted 11% CCG, reflecting business resilience despite a challenging

macro environment.



Vietnam reported a flattish quarter but is expected to see a gradual recovery in

upcoming quarters.



MENA sustained strong momentum with 47% CCG, driven by robust growth in

both the Gulf region and Egypt.



South Africa posted 13% CCG, led primarily by the Hair Care segment.



NCD and Exports delivered 16% growth during the quarter.



The company has made notable progress in premiumizing its portfolio across

markets by driving innovation and expanding into Premium Personal Care

categories such as shampoos, skincare, hair styling and care (excluding hair oils),

and baby care.



These Premium Personal Care categories delivered a strong 24% CAGR over

FY21-25, reflecting successful execution and consumer traction.



Looking ahead, the company aims to sustain this growth momentum, targeting

over 25% CAGR in these categories over the medium term.



Management remains confident of sustaining double-digit CC growth in the

International business over the medium term.

Page Inds

Current Price INR 45,816

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Results Update

Buy

Performance and outlook



Consumer demand growth remained muted through most parts of FY25, but

encouraging signs of recovery emerged in the second half. Growth was more

pronounced in Tier 2 and Tier 3 cities, outperforming metro and Tier 1 markets

by ~4%.



Government initiatives toward direct tax rationalization, decelerating retail

inflation (six-year low), and the forecast of a normal monsoon should boost

consumer purchasing power in the coming months.



Secondary sales were slightly higher than primary sales during the quarter.



No price hikes were taken by PAGE in 4Q. Management does not expect any

price hikes in the coming quarters.



Realization increased 2% YoY in 4Q, backed by premiumization and an increasing

share of e-commerce.



Growth was broad-based, with innerwear products slightly outperforming

outerwear products For Athleisure, PAGE has reduced its inventory days by 7

days and expects to reduce them by another 7-8 days. Management indicated

that inventory days still continue to stay higher than the pre-Covid levels.



Women’s

innerwear segment is seeing robust growth, while the outerwear

segment saw subdued growth as PAGE had higher inventory levels.



Kids category growth is gradually improving.



The channel inventory is declining QoQ after the implementation of ARS.



Product innovation: Six new styles were launched in the quarter across Juniors,

Women’s Innerwear, and the Jockey Life collection.



The digital transformation of the distributor management system is in its final

phase and is expected to be completed by the end of 1QFY26.



Speedo recorded encouraging growth in the quarter, supported by increased

footfall with the onset of summer and rising swimwear demand.



FY26 capex is expected at INR1.88b, which will mainly be used for the extension

of its two plants and purchase one more land parcel in Odisha.

June 2025

106

CONSUMER | Voices

The Odisha plant is set to be operational by Jun’25 and will be fully operational

in 6-7 months after beginning its operations.



The company will benefit from Odisha state subsidies, including wage subsidies,

though at an overall company level, it is not significant.

Costs and margins



Gross margin expanded YoY, driven by lower raw material costs and improved

productivity.



EBITDA margin expansion was supported by stable input costs and enhanced

operational efficiencies.



Ad spends are expected to be 4-5% in FY26 while IT spends are expected to be

1.25-1.5%.



FY26 EBITDA margin guidance remains broadly unchanged at 19-21%.

Distribution channels



PAGE has a distribution network comprising 110,826 MBOs, 1,453 EBOs, and

1,216 LFS as of Mar’25.



Speedo brand is available in 1,096 stores and 36 EBOs spread across 150+ cities.



General trade benefited from healthy inventory levels due to the ARS

implementation and growing demand in Tier 2 and 3 markets, delivering modest

overall growth. Market share in existing stores remained intact, often

outperforming competitors.



Modern retail (including Exclusive Branded Stores and e-commerce), supported

by the rise of quick commerce, showed healthy SSSG, expansion, improved

operational efficiencies, and better consumer experiences.



E-commerce growth continued to be ahead of the rest of the channels growth.



Large Format Stores faced challenges due to muted footfalls. The company is

focusing on consolidation in this format to ensure premium brand

representation and long-term sustainability.



The Jockey mobile app was launched with interactive features and has seen

strong consumer engagement.



The company is now focusing on its distribution network, with an emphasis on

metros and tier 2 and 3 cities.



PAGE has not lost any shelf share in the GT market, indicating no major

competitive pressure from industry peers.



Pidilite Industries

Current Price INR 3,051

Click below for

Detailed Concall Transcript &

Results Update

Neutral

Demand environment and outlook



PIDI remains cautiously optimistic about improved demand from a good

monsoon, increase in government spends and increased construction.



Urban demand witnessed a notable improvement in 4QFY25 compared to

previous quarters; however, rural demand growth continued to outpace urban

demand growth.



PIDI aspires to deliver double-digit UVG in FY26, although it remains cautious

given the prevailing geopolitical uncertainties.



The company is actively exploring growth opportunities in emerging sectors

such as electronics, EVs, and semiconductors, including potential partnerships

and investments in adhesives and specialty chemicals tailored for these

segments.



Its lending business is building a financing ecosystem to support its contractors

and dealers. This is not a traditional lending business but a strategic enabler

within the Pidilite network.

June 2025

107

CONSUMER | Voices

Haisha Paint is making steady progress in the paints segment and is currently

present in five southern states—Telangana, Andhra Pradesh, Odisha, Karnataka,

and Tamil Nadu.



During the quarter, value and volume growth were closely aligned, indicating

minimal price-led growth.



In its core categories, the company targets growth of 1-2x GDP growth, and in

growth categories, 2-4x GDP growth. However, growth is likely to be at the

lower end of this range given the current demand environment.



Subsidiary performance was impacted in Mar’25 due to an extended holiday

period around the Eid festival.



The company typically maintains 60-75 days of raw material inventory, with

total days increasing modestly when including finished goods.



Rural retail expansion continues, with an additional focus on improving

throughput per store to drive efficiency.



‘Pidilite Ki Duniya’—the company’s rural outreach initiative—expanded

its reach

to approximately 16,500 villages in FY25, strengthening brand connect and

category awareness in underserved markets.



The company is focusing on driving revenue growth through volume-led growth

rather than price hikes.



PIDI will continue to invest in brand building, upgrading and expanding

manufacturing facilities, and strengthening the distribution network.

Cost and margin



Consumption costs of VAM stood at USD880/ton in 4QFY25 vs. USD925/ton in

4QFY24 and USD884/ton in 3QFY25.



PIDI has increased A&SP spends to expand the categories and branding

(4QFY25: 5.4% of net sales; 4QFY24: 4.7%; 3QFY25: 3.9%)



Employee expenses in 4QFY25 were high due to a one-time year-end

adjustment of INR170m, comprising actuarial valuations, retirement benefits,

and ESOP-related provisions.



Tata Consumer Products

Current Price INR 1,111

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Results Update

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India packaged beverages business



India packaged beverages business reported revenue growth of 9% YoY, led by

2% growth in volumes.



FY25 revenue grew 4% YoY with muted volume growth of 1%



The company implemented further price hikes across the tea portfolio.



Tea volumes grew 2% YoY, led

by the company’s focus on long-term

competitiveness while calibrating price increases across the portfolio, which

partially offset the significant increase in tea costs.



The company has implemented decent hikes in tea and expects margin pressure

to ease going forward. The price hike has compensated for 40% of the cost

increase in 4Q and 30% in FY25.



Going forward, the company will continue to focus on gaining market share

through volume growth.



Coffee continued its strong trajectory, growing 44% in 4QFY25, leading to 33%

growth in FY25.



TATACONS remains a leader in the e-commerce channel with a 42% value

market share.

June 2025

108

CONSUMER | Voices

India foods business



The business registered 27% YoY revenue growth in 4QFY25, with LFL revenue

(excluding Capital Foods) growing 17% YoY. The segment recorded volume

growth (excluding Capital Foods) of 6% YoY during the quarter.



Salt revenue grew 13% YoY, driven by pricing and mid-single digit volume

growth during 4QFY25. FY25 salt revenue grew 8% YoY, with volume growth of

4%.



In line with the company’s premiumization agenda, value-added

salt products

maintained their strong momentum, up 31% YoY in 4QFY25 and FY25.



Tata Salt iron health was relaunched at an accessible price point to tackle

widespread iron deficiency in India.



Tata Sampann finished the year strong, posting 30% YoY growth in 4QFY25, with

a full-year revenue growth of 29% YoY.



Tata Soulful grew 32% YoY in FY25.

Ready-to-drink (RTD)



Revenue for the RTD segment was up 10% YoY in 4QFY25 compared to a 2%

decline in 3QFY25, driven by volume growth of 17% YoY in 4QFY25.



During the year, the RTD business recorded a volume growth of 13%, with

revenue standing at INR8.35b (up 2% YoY), primarily impacted by trade price

actions.



The premium business grew 29%/19% in 4QFY25/FY25.



Tata Copper+ recorded 23% revenue growth in 4QFY25, bringing FY25 growth to

18% YoY.

Capital Foods and Organic India



Capital Foods/Organic India revenue stood at ~INR2.1b/INR1b in 4QFY25.



Capital Foods and Organic India grew 19% in FY25 on a combined basis

(including international operations on a like-for-like basis including pre-

acquisition revenue).



Combined revenue for FY25 stood at INR11.73b, while the combined gross

margin stood at 50%/49% for 4QFY25/FY25.



New channels of Food Services and Pharma continue to be rolled out and

deliver in line with expectations.



Innovation momentum for Capital Foods continued, with the launch of Ching’s

Secret Momo Chutney and instant noodles at the price point of INR10.



Organic India’s innovation pipeline was kicked off with the launch of two new

products, Desi Khandsari Sugar and Gokshura.

Tata Starbucks



FY25 revenue grew 5% YoY, with 7% growth in 2HFY25 compared to 3% in

1HFY25.



The company added 6/58 new stores (net) in 4QFY25/FY25, bringing the total

store count to 479 as of Mar’25 in 80 cities.



Celebrated key milestones with 100 stores in Mumbai and 50 stores in

Bengaluru.

Non-branded business



Non-branded business revenue in constant currency (including Vietnam) grew

23% YoY in 4QFY25, led by strong realizations in both the plantation business

and the soluble business.

June 2025

109

CONSUMER | Voices

The soluble business witnessed ~12% YoY revenue growth in 4QFY25, as the

multi-decadal high coffee prices continued to impact demand globally.



Plantations delivered a robust 60% YoY growth in 4QFY25.



FY25 has been a record year for the non-branded business, with revenue

growing 20% YoY and operating profit growing 63% YoY, in constant currency

(including Vietnam).



Coffee prices remain near all-time highs; a key monitorable going into FY26.

International operations



Revenue for international operations grew 2% (constant currency) in 4QFY25.



For FY25, revenue was up 5% (CC), with growth across all geographies. South

Africa and the Middle East delivered exceptional performances, both up over

20% YoY.



EBIT grew 21% in FY25 with margin expanding 190bp YoY, primarily driven by a

350bp expansion in the UK’s operating margin.



US business: The US coffee continued to witness accelerated growth, up 3%. Tea

business saw a strong revenue growth of 14% YoY in 4QFY25 (constant

currency).



UK business: 4Q revenue declined 7% YoY, while FY25 business grew by 3%. In

FY25 EBIT grew 31%, resulting in 350bp operating margin expansion. Teapigs

and Good Earth continued to deliver stable growth as extended distribution

resulted in strong sales growth.

NourishCo



NourishCo’s geography mix is 30-35%

from Andhra Pradesh, 25-30% from

Jharkhand, Bihar and West Bengal, and the balance from the rest of the world.



No more additional capex is required for NourishCo as there is already a lot of

headroom for NourishCo to grow in existing geographies. Around 40 plants for

NourishCo are in all the important geographies. No expansion plans as of now

unless there is exceptionally strong traction.

Other highlights



FY26 capex should be in a similar proportion of sales as seen in FY25. Vietnam

capex was spent half in FY25 and the rest half will be spent in FY26.



Assuming a 10% rate of US tariff: Since coffee is not produced in the US and is

not a discretionary item, India is expected to be in an advantageous position. No

major impact is therefore seen. As far as the competitive scenario is concerned,

the impact of tariffs is yet to materialize.



Volume growth seen in the mid-single digit range for FY26.



Recessionary risk is in the US and not in the UK. The company is ranked No. 2 in

the UK; brand building for Tetley has started in the UK. There might be some

impact in the US, though not expected to be material due to the products being

consumption goods in nature.



Crops in South India already look better compared to last year. In north India,

some months were down, but on an overall basis the crops look good compared

to last year.



NWC cycle has come down to 1 day for Indian business, with improvement led

by significant investments in infra, tech and talent, raw materials, finished

goods, tight working cap control, etc. This is sustainable in the future.



Capital and organic business margins are doing well; the synergies are coming

through nicely. The company remains confident about maintaining 30% growth



June 2025

110

CONSUMER | Voices

in revenue. Management took some time to learn this business and now is

focusing on portfolio expansion and marketing strategies.

Tata copper has had a stellar run. The bigger pressure was on Tata Gluco+ as the

company has re-indexed its retail margins after the entry of Campa Cola, which

led to the rebuilding of distribution. The company is back to expanding its

portfolio in this segment. Mar’25 was good and grew 30% compared

to overall

growth of 17% in 4Q. It is improving month on month, and the company can

sustain these margins despite re-indexing

retailers’ margins.

There was a one-off item in employee costs due to synergy benefits. Going

ahead, it will be in line with inflationary growth. Employee cost is expected to

decrease as a % of sales going forward due to increasing operating leverage.

If tea prices ease off, margins may stabilize. If there is a normal crop plantation

this year, we can expect the same. As far as coffee is concerned, Arabica (Brazil)

and Robusta (Vietnam) have seen a low yield in crops this year, which may

impact coffee prices.



United Breweries

Current Price INR 2,027

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Demand environment and outlook



UBBL reported 5% YoY volume growth in 4QFY25, despite facing regulatory

disruptions in key states like Telangana and Karnataka during Jan’25 and

seasonal headwinds impacting consumption.



The company witnessed a strong recovery after regulatory setbacks in Karnataka

and Telangana, with volumes rebounding quickly as the operating environment

normalized in subsequent months.



UBBL’s premium portfolio grew 24% YoY in FY24 and 32% in FY25, reflecting

strong consumer up trading trends and the company’s focused efforts on

premiumization.



Management is targeting 35-40% annual growth in the premium portfolio over

the coming years, underscoring premiumization as a key structural lever for

sustainable growth.



Strong inventory planning and pre-summer season stocking were effectively

executed, ensuring availability across markets during peak demand periods and

mitigating supply-side disruptions.



Growth in the premium portfolio was led by Kingfisher Ultra, Kingfisher Ultra

Max, and Heineken Silver, with new product introductions and SKU localization

aiding momentum.



Premium brands and SKUs are increasingly being tailored to regional

preferences, which enhanced consumer acceptance and accelerated growth in

newer geographies.



New premium SKUs launched during the year further supported mix

improvement, allowing the company to capitalize on shifting consumer

preferences toward premium offerings.



A dual glass bottle strategy is in place—new bottles are allocated for premium

products, while recycled bottles continue to be used in the mass segment to

ensure cost efficiency.

June 2025

111

CONSUMER | Voices

The company is actively addressing SKU-specific bottle availability issues,

especially for premium SKUs, as part of its ongoing focus on strengthening the

supply chain.



Management remains confident of sustaining 6-7% annual volume growth in the

medium term, supported by premiumization, innovation, and go-to-market

initiatives.



Key growth drivers going forward include deeper distribution expansion,

targeted portfolio premiumization, and proactive state-level regulatory

engagement.



The company is actively engaging with regulators, distributors, and ecosystem

partners, aiming to build a resilient business that can lead category expansion

across states.



In a significant capacity expansion initiative, UBBL has committed INR7500m for

a greenfield brewery in Uttar Pradesh, marking its first new brewery investment

in over 12 years. The UP facility will cater to both mainstream and premium

products, including Heineken, and will have canning and bottling capabilities to

serve growing demand across product formats. The planned UP brewery is



expected to add 1.0-2.0 million hectoliters of capacity, with the commissioning

targeted by 4QFY27, in line with anticipated demand growth.



The company has already initiated capex in UP, having received final land

approvals, and is currently finalizing design elements to align the facility with

long-term sustainability goals.



This brewery will strengthen UBBL’s footprint in North India, enhance

serviceability in nearby high-growth states, and reduce logistics costs over the

long term.



Alongside new capacity, UBBL is also investing in automation and operational

efficiency initiatives, particularly in its larger existing breweries, to drive margin

improvement.



Under its ‘Design to Win’ transformation program, the company is upgrading its

go-to-market and analytics capabilities, focusing on demand forecasting, route-

to-market efficiency, and market execution.



UBBL is emphasizing a balanced route-to-market model that combines

traditional and modern trade, along with digital ordering platforms, to maximize

reach and responsiveness.



Management is also exploring opportunities to introduce more global brands

from Heineken’s international portfolio, to further strengthen the premium

mix

in India.

Geography & regulations



In Telangana, the company undertook a 15% price hike, which has been

absorbed well by the market; however, no further price increases are expected

in the near term as the state government is currently reviewing excise policies.



The company is actively engaging with the Telangana government to ensure

timely realization of trade receivables, particularly important during the peak

summer season to maintain liquidity and channel throughput.



In Karnataka, the company is treading cautiously, as the market has witnessed

category-wide volume declines following recent increases in excise duties,

impacting affordability and off-take.



June 2025

112

CONSUMER | Voices

States like Uttar Pradesh and Maharashtra continue to exhibit progressive excise

regimes, fostering a more predictable operating environment and supporting

steady category growth.



To strengthen execution and market presence, the company has launched a

company-wide

transformation program titled “Design to Win”, which focuses

optimizing distribution architecture, improving outlet reach, and enhancing

service quality.



As part of this initiative, the company has redesigned its distribution model in

Maharashtra, with a sharper focus on expanding retailer coverage, improving

assortment availability, and driving better throughput across existing outlets.



This strategic reconfiguration of the go-to-market model is expected to improve

retail penetration and market execution, enabling the company to drive

volumes and premium mix in key urban and semi-urban clusters.

Costs and margins



GM expanded YoY, primarily driven by a favorable product mix, increased usage

of recycled glass bottles, and continued focus on cost efficiency initiatives.



The company continues to face challenges in glass bottle supply, arising from

the onboarding of new suppliers and evolving procurement dynamics, which

have led to some inconsistencies in bottle availability, especially for SKU-specific

needs.



Management is keeping a close watch on input cost trends, with a particular

emphasis on glass and packaging costs, which remain volatile due to supply-side

constraints and changing global commodity dynamics.



While the company remains cautious about future cost inflation, it has

reiterated its commitment to sustaining a balance between margins and

continued investment in brand building and premiumization.



United Spirits

Current Price INR 1,610

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Operational environment and outlook



Net revenue grew 8% in FY25. Excluding Andhra Pradesh, net sales growth stood

at 5.1%. The impact of slab rationalization in Karnataka was minimal due to the

company’s relatively lower exposure in that state.



With the implementation of the UK-FTA, the accessibility of Scotch whisky in

India is set to improve, paving the way for new premium offerings for Indian

consumers. The reduction in import duties—from 150% to 75%—is expected to

translate into high single-digit reductions in consumer prices and drive

additional volumes in the high single-digit range.



The UK FTA is expected to benefit both the BII and Bottled in Origin (BIO)

segments. BII pricing benefits are expected in the range of 4-5%, while BIO

benefits are expected to be in high single digits.



In FY25, several state-level policy reforms supported industry growth. These

include the reopening of private liquor vendors in Andhra Pradesh, increased

access points in Uttar Pradesh, and excise slab rationalization in Karnataka and

Madhya Pradesh, which led to price reductions (MRP) for premium spirits.



McDowell’s remains a strong whisky brand, with sales of 13m cases in FY25.



Innovation and premiumization remain key focus areas. The company launched

McDowell’s Pocket Pack and McDowell’s Double

Oak Barrel in 4QFY25.

June 2025

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CONSUMER | Voices

Innovation currently contributes a high single-digit to low double-digit share of

the business. The company aims to double the contribution from innovative

products over the next 3-5 years.



The Supply Agility Program is progressing well and has resulted in a 63% cost

optimization.



The lower prestige segment grew 33% in FY25, largely driven by Andhra

Pradesh, which is a key market for the segment.



Uttar Pradesh remains a highly competitive market. Over the past few years, the

company has faced challenges in increasing its market share in the region, but it

continues to work on improving its position.

Costs and margins



The company plans to maintain A&P spends at 9-10% of sales.



Going into FY26, commodity costs are largely stable. The next inflection point is

expected in September, when the government announces its ethanol policy.



The company focuses on sustaining double-digit growth in the P&A segment

while maintaining EBITDA margins in high teens.



Other income increased due to the sale of a non-core

asset in Jan’25, amounting

to INR900-1,000m from the sale of a bungalow in South Africa.

Brands/new launches/re-launches



The company continues to strengthen its leadership in the luxury and premium

segments, with a focus on enhancing the brand equity of Johnnie Walker.



In the malts category, both global (Singleton) and Indian (Godawan) malt brands

are performing well. The company also launched Godawan in the UK through a

strategic partnership with Taj.



Strong performance in the Bottled in India (BII) segment was driven by brands

like Black & White and Black Dog.



The company is nurturing its iconic global trademarks to expand categories such

as Tequila and Gin, primarily through Don Julio and Tanqueray.



In the upper prestige segment, Signature and Antiquity are performing well.

Antiquity’s

packaging and design were recently renovated, helping the brand

build equity in the Canteen Stores Department (CSD) channel.



Varun Beverages

Current Price INR 468

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Click below for

Detailed Concall Transcript &

Results Update

Operational highlights



Gross margins declined due to the relatively lower margin profile of the owned

brands in South Africa and the higher mix of CSD in India.



Aligned with the company’s long-term

goals, low-sugar/no-sugar products now

contribute to ~59% of its consolidated sales volume.



While EBITDA margins improved in India on account of operational efficiencies

from the robust volume growth, consolidated EBITDA margins declined due to

lower profitability in the South African market.



Depreciation increased by ~45 % on account of the commissioning of new plants

last year (Supa, Gorakhpur and Khordha), which were not present in the base

quarter and consolidation of SA & DRC in the current quarter.



Margins in India continued to do well as VBL put more operationally efficient

plants.

June 2025

114

CONSUMER | Voices

Guidance



The company maintains its guidance of double-digit growth, led by industry

tailwinds.



VBL expects to maintain these current margins of ~21% in the soft drink

industry, with a potential of margin expansion driven by the backward

integration in the new plants.

Expansion plans



The implementation of other two greenfield production facilities scheduled for

CY25 season in Bihar and Meghalaya is on track.



Further, VBL has set up backward integration facilities at the Prayagraj plant in

to increase efficiency.



The company is increasing its go-to-market strategy every year via the addition

of visi-coolers in new markets.

Market scenario



The entry of new competitors has had a positive impact on overall growth of

India market, which continues to grow at a faster rate than previously seen.



The Indian market remains underpenetrated despite growth in competition,

with total retail outlets of ~12m; VBL has only reached ~4m outlets. This

indicates the huge growth potential in this market.



There is a clear shift of consumer preference toward healthier products like

hydration, with nimbooz recording ~100% YoY growth.



The energy drink segment continues to be the fastest-growing segment, while

VBL continues to enjoy its market leadership position.



Mid/low calories drinks like Sting have a huge market in India, whereas no-sugar

products have a smaller market in India.

International business



The integration of the South Africa territory has progressed well, with focused

efforts on strengthening on-ground infrastructure, streamlining operations, and

enhancing execution across the market.



VBL has initiated the distribution

and sales of PepsiCo’s snack products in

Zimbabwe and Zambia.



Historically, net realizations in South Africa are lower due to a higher mix of own

brands; however, the company is actively working to scale up PepsiCo’s

portfolio, which is expected to support improvements in realizations and

margins going forward.



While margins in South Africa can come close to India business margins, it may

take time.



Sales in Morocco were impacted by the early ramzan this year, while the sugar

tax continued to have a marginal impact on volumes and margin in Zimbabwe.



The paper work of Tanzania and Ghana could not be done in time, so the deal is

on hold.



VBL has expanded margins in South Africa business to ~14% from ~10% before

the business was acquired.



Sales of Pepsi brands in South Africa rose to 20% from 15% last year, with good

traction seen in both owned and PepsiCo products, with PepsiCo products

growing at a faster rate.



Going ahead, VBL will cut down on non-profitable products in South Africa and

maintain its growth trajectory via additions of visi-coolers.

June 2025

115

CONSUMER | Voices

VBL had already launched Sting in Africa, which is witnessing strong traction in

some countries and flat demand in others due to local competition and price

points.

Other



VBL recently commenced operations at the new greenfield production facilities

in Kangra (Himachal Pradesh) and Prayagraj (Uttar Pradesh), significantly

enhancing capacity concurrently with the peak summer season.



The new launches of Sting gold and Gatorade have witnessed strong traction.



Water costs have been shifted to direct costs, leading to an impact on the gross

margins, along with the higher mix of CSD.



VBL is spending roughly the same amount of money on ads as it used to earlier.

Going forward, as volumes increase, the company will increase its spending on

ads. New companies entering the market tend to spend more on ads.



VBL is not expecting the prices of key raw materials to increase. The marginal

increase in sugar prices was offset by the decrease in packaging prices.



June 2025

116

CONSUMER DURABLES | Voices

CONSUMER DURABLES



As anticipated by durable companies, the cable and wire (C&W) segment saw strong growth, led by a pick-up

in government capex, consistent strong demand in the power sector (including renewable energy), real estate,

and higher export demand. Demand growth in the C&W segment is expected to continue, backed by the

power segment, development of electric vehicle (EV) infrastructure, other infrastructure projects such as

railways, metros, and highways, and industrial demand. Meanwhile, a delayed summer and early rains in the

south and west regions led to subdued demand for cooling products in the secondary market.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Insights and future outlook



Capex plans



Havells



Polycab



KEI Inds



RR Kabel



Secondary sales for RAC and fans were affected by a

delayed summer, with demand at the start of 1Q also

subdued, though trade channels show no panic.

Compressor availability is no longer an issue due to

lower recent demand.

Fan demand was weak due to the delayed summer.

Budget measures and RBI actions support

consumption recovery, but real estate demand

remains uncertain amid rising inflation.

The contribution margin declined due to copper price

volatility and a product mix shift from new capacity in

the south. Entry of new players in C&W is expected to

increase organized competition, possibly leading to

further consolidation among branded players.

C&W demand remains strong, driven by real estate,

corporate investments, and government capex.

Domestic business grew 27% YoY, with cable growth

outpacing wire. West led regional growth, followed by

South, North, and East. International business was hit

by order rollover but has a strong order book.

Entry of new players should not affect growth

momentum, as the industry growth rate remains

much higher. Organized players are gaining market

share continuously, and with the offering of quality

products, the market share gain should continue.

There should not be any negative impact of US tariffs

and the company can pass on the entire tariff increase

to consumers.

It estimates ~17-18% growth in FY26, and after the

commissioning of its Sanand plant, the growth rate

should be ~20% from FY27 onward. The company

focuses on achieving its growth guidance, aided by

sales through dealers/distributors or institutional or

exports. It intends to utilize the capacity at most and

drive growth.

It expects EBITDA margin to remain in the range of

10.5-11.0%. After the ramp-up of its Sanand plant and

improvement in the economy of scale, the margin will

improve by 50bp in FY27-28.

Indian C&W industry is currently valued at INR900b

and is estimated to grow at a CAGR of 15%, reaching

INR2.0t by FY31. The company is well positioned to

benefit from this growth, supported by its strategic

initiatives such as capacity expansion, market

diversification, new product launches, and improved

cost structures.

The industry’s revenue mix of cable and wire is 65:35

while the company’s mix is 70% wires and 30% cables.

This gives the company an opportunity to grow at a

much higher pace in the cable segment, aided by

capacity expansion. Hence, it is confident of achieving

a growth of ~18% YoY in the C&W segment.



New investment (Goldi Solar): HAVL built a strong

business of INR4.0-4.5b in inverters, modules, solar

cables, and DC switchgear. Renewables is an emerging

sector and there is scope for growth. It believes that

growth would have suffered in case there had been no

investment in this sector.

Total capex planned of INR20b spread in the next two

years including new R&D center.



Capex in 4Q/FY25 was INR1.3b/INR9.6b. Cumulative

capex over the next five years will be INR60-80b.



In FY25, capex was INR6.2b, including INR3.8b for

Sanand, INR680m for Chinchpada, INR320m for Bhiwadi,

INR580m for Pathredi, and INR230m for land. FY26 capex

is INR13.0b for Sanand completion plus INR1.0b for

maintenance and new production. Brownfield expansions

at Chinchpada and Pathredi added C&W capacity.

Utilization in FY25 was 85% for cables, 71% for wires, 89%

for SSW, and 38% for communication cables.

The Sanand project’s first phase of expansion is expected

to be commissioned by 1QFY26 and the entire project

will be completed by FY26-end.

Under Project RRISE, the company announced INR12.0b

capex to expand C&W capacity 1.7x, mainly in cables,

supporting 18–20% growth and margin gains. Waghodia

plant capacity

will rise by 36k MT (~54%) by Mar’28 at

INR10.5b capex. At Silvassa, a 12k MT expansion will be

operational by Mar’26, with another 6k MT (~50%)

addition by Dec’26.

June 2025

117

CONSUMER DURABLES| Voices



Voltas



Historically 1Q is relatively a soft quarter and is likely

to remain that this time. However, there is nothing

abnormal/reduction in growth.

The company launched Project R RISE, a three-year

plan to transform revenue and profitability, targeting

1.6x growth in domestic C&W business driven by real

estate, renewables, industrials, and data centers.

In FMEG, it aims for ~25% revenue CAGR over three

years, focusing on reducing losses, improving

efficiency, and achieving break-even by FY26

The company recorded its highest-ever air cooler sales,

with volumes rising 70%+ YoY to over 0.5m units in

FY25, capturing an 8.5% market share. Unseasonal

rains hit early summer sales, but an expected

extended summer may help recover the lost volume.

RAC category competition has intensified with ~60-65

players, leading to a decline in market share from

earlier levels (23-24%), though a large gap remains

between the top two players.

Voltas Beko sold over 1m refrigerators and washing

machines, emerging as the fastest-growing home

appliances brand with 57%+ YoY volume growth,

outperforming

the industry’s modest growth.



The ramp-up of the Chennai plant is on track and as per

the company’s plans. This factory has helped to cater to

the increased demand and balance the supply chain,

particularly in the South and West markets. It is further

planning to scale up its capacity, mainly at this plant,

which is fully backward integrated.

Havells India

Current Price INR 1,488



Neutral

Click below for

Detailed Concall Transcript &

Results Update



Key highlights:

Large appliances and cables led to revenue growth in 4Q.

Secondary sales for RAC and fans have been impacted due to delayed summer

and demand at the beginning of 1Q also remains impacted; though; there

doesn’t seem to be any panic in the trade channels. The

company is investing in

R&D and trying for premiumization which should lead to market share

improvement in the future. The refrigerator business has a lower contribution

margin due to outsourcing as of now; however; in the medium-term, there

should be an improvement led by own manufacturing. The endeavor would be

to reach a normalized margin of 13.5-14.0% (ex-Lloyd) as the benefits of

operating leverage kick in.

Lloyd:

Delayed summer in both the South and North regions have impacted

secondary sales; though; there has been some pick up in heat waves recently in

the North region. The base of Lloyd was not strong and positive surprises in

demand last year led to inventory building. So far there is no panic in the trade

channel and need to see how the rest of the season pans out. There is no more

challenge of compressor availability this year also due to delayed summer and

lower demand in the last one month.

The company always maintains a balance between revenue growth and margin

improvement. It reiterated that Lloyd is a long-term journey and management

will continue to invest in the growth as it has a large opportunity. Lloyd remains

a key growth engine for HAVL. Currently, the higher contributing business (RAC)

has more or less stabilized, though it targets a market share in low-to-mid teen

digits.

The company is investing in R&D and trying for premiumization which should

lead to market share improvement in the future. Further, it endeavors to

increase other businesses in this segment. Investments in product

enhancement, brand building, distribution network, etc. will continue till it

June 2025

118

CONSUMER DURABLES| Voices

reaches a certain scale. The refrigerator business has a lower contribution

margin due to outsourcing as of now; however; in the medium-term, there

should be an improvement led by own manufacturing.

It has seen movement from traditional channels to modern channels (initially in

the South which is catching up in the North too) and now 50% of sales are done

from modern channels. No material capex is planned in Lloyd, except the

planned capex for refrigerators’ new capacity.

Cables and Wires

–

The contribution margin dipped due to volatility in copper

prices and product mix change due to the commissioning of new capacity in the

south region. It believes the entry of new players in C&W will drive more

organized competition and the industry can go through further consolidation

between branded players.

In 4Q;

half of the revenue growth was contributed through volumes; while the

rest was related to price hikes led by higher RM costs. It witnessed more value

growth in wires whereas; volume growth was higher in underground cables.

Cable demand continues to remain strong; though; volatility in RM prices is

impacting margins in the last 3-4

months. The company’s mix remains 65% wire

and 35% cable.

It will continue to invest in brand building, scaling, and technology

advancement. Increasing exports of C&W is part of its strategic initiative for

international markets.

ECD segment, small appliances, and lighting: Because of delayed summer; fan

demand was not as robust. Measures taken in the Union Budget as well as by

RBI augurs well for pick up for consumption. However, it would remain watchful

for the real estate demand to pick up as inflationary pressures have increased.

Volume growth in the lighting segment was in the high-single-digit in 4QFY25.

Switches & Switchgear segment

–

The market share of the company is small in

industrial switchgear and there has been pressure on demand in this segment in

FY25. The focus was more on the residential and consumer side historically;

however; in the last few years there has been a focus on increasing its product

portfolio and now its product range is at par with any other player. A

contribution margin of 38-40% is sustainable in this segment.

New investment (Goldi Solar):

HAVL built a strong business of INR4.0-4.5b in

inverters, modules, solar cables, and DC switchgear. Renewables is an emerging

sector and there is scope for growth. It believes that growth would have

suffered in case there had been no investment in this sector. Further, there is a

lot of focus by the government on own manufacturing. Its focus would be to

increase the business from a consumer perspective and more on residential

sectors. It is a strategic investment, though the margin is low and the main focus

is to increase business scale at a much faster pace.

Total capex planned of INR20b spread in the next two years including new

R&D center.



June 2025

119