1QFY26 | August 2025

VOICES

VOICES

India Inc on Call

VOICES, a quarterly product from Motilal Oswal Research, provides a ready reference for all the post results earnings calls attended by

our research analysts during the quarter. Besides making available to readers our key takeaways from these interactions, it also

provides links to relevant research updates, and transcripts links of the respective conference calls.

This quarterly report contains



Key takeaways from the post results management commentary for 275 companies, with links to the full earnings call

transcripts



Links to our Results Updates on each of the companies included

Research & Quant Team: Gautam Duggad

(Gautam.Duggad@motilaloswal.com) |

Deven Mistry

(Deven@motilaloswal.com)

Investors are advised to refer through important disclosures made at the last page of the Research Report.

24 November 2015

1

Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

VOICES - INDIA INC ON CALL

Summary

Page #3

Sectors & Companies

Page #10

AUTOMOBILES –

Pg10

CAPITAL GOODS –

Pg42

CEMENT – Pg50

CHEMICALS – Pg64

CONSUMER –

Pg75

CONSUMER

DURABLES – Pg107

EMS – Pg117

FINANCIALS:

BANKS – Pg126

FINANCIALS: NBFCs –

FINANCIALS:

pg164

INSURANCE – pg227

HEALTHCARE –

Pg239

LOGISTICS – Pg257

METALS – Pg272

OIL & GAS – Pg284

REAL ESTATE –

Pg297

RETAIL – Pg310

TECHNOLOGY –

Pg338

TELECOM – Pg355

UTILITIES – Pg359

OTHERS – Pg370

Note:

All stock prices are as on 20

th

August 2025, unless otherwise stated.

1QFY26 | India Inc on Call

Voices | 1QFY26

Voices

BSE Sensex: 81,307

S&P CNX: 24,870

FY26 commentary begins on a cautious but optimistic note; 1QFY26

earnings

–

modest yet resilient!

In this report, we present the detailed takeaways from our 1QFY26 conference calls with

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



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



Corporate earnings

–

sectoral breadth promising:

Corporate earnings for 1QFY26,

perceived as the “Crossover quarter,” marked a transition from the subdued low-

single-digit earnings growth of FY25 to a sustainable double-digit growth

trajectory. A key highlight of the quarter was better sectoral breadth of earnings

growth. Of the 25 sectors under our coverage, 16 delivered double-digit growth,

eight reported single-digit growth, and only one sector experienced a decline in

PAT. The aggregate earnings of the MOFSL Universe companies grew 11% YoY (vs.

our est. of 9% YoY) in 1QFY26. Excluding Financials, earnings for the MOFSL

Universe grew 13% YoY (est. +14% YoY.

Banks

have entered FY26 on a cautious but optimistic note, anticipating asset-

quality easing from 2H as collections normalize. The first quarter, however,

proved transitional—core margins compressed as loans repriced faster than

deposits. While banks expect NIMs to bottom out in the near term, recovery

into 2H hinges on CRR relief and deposit re-pricing, with the pace and quantum

of improvement varying across lenders.

Several management teams at

NBFC/HFC

underlined the following: 1) the market

prognosis for the CV category remained subdued due to weak government

investment and capex, while demand for tractors improved; 2) asset quality

deteriorated across most product segments, except power financiers and select

HFCs, due to customer overleveraging, slow consumption, and a weak

macroeconomic environment; and 3) NBFC-MFIs improved PAR levels in most states

during 1QFY26, barring Karnataka.

Management teams of

IT services

companies maintain a cautiously optimistic

outlook while recognizing that ongoing macroeconomic headwinds continue to

pressure overall demand. Infosys maintained a cautiously optimistic stance

(upgrading the lower end of guidance), with the upper end of its 3% YoY organic

CC guidance hinging on a gradually improving environment, while HCLT remained

the most constructive, guiding for 3–5% YoY CC growth (also, upgrading the lower

end of guidance).

In

Automobiles,

management expressed optimism about a revival in domestic

demand for the majority of segments during the 1QFY26 earnings calls. The

growth of the 2W market is expected to be between 5% and 7% over the next few

quarters, and management at PV and CV OEMs is anticipating that demand will

pick up during the holiday season.

For

Consumer,

demand remained steady, indicating a slow sequential

improvement supported by positive macros, according to the management of

FMCG companies. The demand in cities is increasing, and the rural markets are

still doing well. Nielsen's data likewise shows this pattern, with rural growth at

8.4% compared to urban growth at 4.3%. Early monsoons had an impact on paint

industries, but there are indications that things are starting to improve.

The domestic formulation-focused companies in

Healthcare

highlighted that they

are gearing up for obesity/diabetes drugs from the peptide family. Companies

indicated that they would be focusing on the marketing part of the value chain for

August 2025

3

Voices | 1QFY26

India/EM markets. They indicated that the manufacturing aspects can be

outsourced and the medicine can be made available at the time of market

formation.

For

Metals,

in the Ferrous space, management across companies indicated 1) a

softer NSR in 2Q, which is likely to rebound post-monsoon with a steady cost

structure, and 2) incremental volumes from new capacities with a rising share of

captive raw material mines to support margins. In the non-ferrous space,

management guided the CoP to increase, led by rising scrap prices, rising domestic

e-auction coal, and trade tensions, which may be offset by favorable pricing

conditions leading to sustained margins in the coming quarters.

Management

in the Capital Goods

sector holds an optimistic view across

important sectors, such as power T&D, renewable energy, data centers, cement,

steel, construction, oil & gas, and defense. Public capital spending is beginning to

increase, while private sector interest is anticipated to emerge in the upcoming

quarters. The fulfillment of export orders has increased throughout the quarter,

and the outlook remains promising. In the defense industry, management

discussions continue to be very positive, predicting a surge in order inflows soon

due to emergency procurement, as well as for the medium-to-long-term, driven

by both base and large orders.





Autos



Management expressed optimism about a revival in domestic demand for the

majority of segments during the 1QFY26 earnings calls. The growth of the 2W

market is expected to be between 5% and 7% over the next few quarters, and

management at PV and CV OEMs is anticipating that demand will pick up during

the holiday season. The majority of OEMs have handled the chip scarcity problem

with little apparent disruption. Short-term disruptions to exports could result from

the uncertainty around tariffs and the protectionist position adopted by several

governments. The outlook for auto auxiliary companies exposed to material

exports is still bleak. Next quarter, input prices are anticipated to be unchanged,

which will have little effect on margins.

Capital Goods



Management holds an optimistic view across important sectors, such as power

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

defense. Public capital spending is beginning to increase, while private sector

interest is anticipated to emerge in the upcoming quarters. The fulfillment of

export orders has increased throughout the quarter, and the outlook remains

promising. In the defense industry, management discussions continue to be very

positive, predicting a surge in order inflows soon due to emergency

procurement, as well as for the medium-to-long term, driven by both base and

large orders. In the power generation sector, management believes that prices

have largely settled and volumes have returned to levels seen before the

transition. The railway sector has reached its lowest point, and order

placements have risen in the first quarter, with management remarks suggesting

a better outlook for the pipeline in this industry.

Cement



Management teams predict a ~6-7% YoY improvement in demand in FY26, aided

by government infrastructure projects (roads, highways, ports, metro, PMAY),

improved rural markets, and stable urban housing demand. Despite seasonal

weakening, cement prices have remained stable, and enterprises continue to

August 2025

4

Voices | 1QFY26

strike a balance between volume expansion and profitability. Fuel prices have

been range-bound in recent months and are projected to remain stable,

providing further support for margins.

Chemicals



The management remains cautiously optimistic on the near-term outlook, with

growth expected to be driven by volumes, supported by resilient domestic

demand, moderating raw material prices, and ongoing capacity expansions.

However, headwinds such as global oversupply, competitive pressures from

Chinese dumping, and heightened 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.

Consumer



Demand remained steady, indicating a slow sequential improvement supported

by positive macros, according to the management of FMCG companies. The

demand in cities is increasing, and the rural markets are still doing well.

Nielsen's data likewise shows this pattern, with rural growth at 8.4% compared

to urban growth at 4.3%. Early monsoons had an impact on paint industries, but

there are indications that things are starting to improve. Favorable state excise

laws in important markets like Andhra Pradesh and Uttar Pradesh, as well as a

solid presence across price points, supported the liquor industry's ongoing

development pace. For consumer businesses, emerging channels kept boosting

growth and will continue enhancing the sales mix.

Consumer Durables



Management highlighted that 1QFY26 was a challenging period, as growth

momentum weakened sharply from May’25. An unusually mild summer led to a

steep drop in peak-season demand for ACs and other cooling products, further

weighed down by last year’s high base. However,

the C&W segment continued

to perform well, supported by strong infrastructure and industrial demand. The

company views the dip in performance as temporary and remains confident of a

recovery in revenue growth and margin expansion in the coming quarters.

EMS



Most management have retained their revenue growth guidance, with Avalon

increasing its revenue guidance, fueled by robust demand, project ramp-ups,

scale benefits from new capacities, and strong order book visibility in 2HFY26.

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

are expected to continue the growth momentum. Continued capex, R&D, and

backward integration efforts should support margin expansion and strengthen

long-term positioning.

Financials

Banks



Banks have entered FY26 on a cautious but optimistic note, anticipating asset-

quality easing from 2H as collections normalize. The first quarter, however,

proved transitional—core margins compressed as loans repriced faster than

deposits. While banks expect NIMs to bottom out in the near term, recovery

August 2025

5

Voices | 1QFY26

into 2H hinges on CRR relief and deposit re-pricing, with the pace and quantum

of improvement varying across lenders. Headline profitability was often

supported by treasury gains and one-offs, masking softer NII and subdued loan

demand. Differentiation through FY26 will be shaped by: 1) liability strength

–

CASA mix and granularity of deposits, 2) credit exposure

–

share of

unsecured/MFI lending, and 3) treasury buffers

–

ability to absorb MTM swings.

Banks with strong, low-cost liability franchises and limited unsecured books are

best placed to outperform, while peers with weaker deposit franchises may see

prolonged margin pressure and elevated credit costs. Key monitorables remain:

1) 90+ dpd (delinquency) trends and 2) the speed of deposit re-pricing and

treasury mark-to-market volatility. Muted credit growth underscores the need

for selective underwriting, though robust capital buffers will provide adequate

shock absorption.

NBFC



Several management teams at NBFC/HFC underlined the following: 1) The

market prognosis for the CV category remained subdued due to weak

government investment and capex, while demand for tractors improved; 2)

Asset quality deteriorated across most product segments, except power

financiers and select HFCs, due to customer overleveraging, slow consumption,

and a weak macroeconomic environment; 3) NBFC-MFIs improved PAR levels in

most states during the quarter, barring Karnataka. Collection efficiency in

Karnataka is likely to stabilize by the end of 1HFY26; and 4) gold loan demand

remained robust due to rising gold prices, rapid tonnage growth, and the lack of

unsecured loans.



Management at NBFC has stated that certain areas, including CV, unsecured

MSME, and micro-LAP, are experiencing difficulties. This is likely to improve

during 2HFY26. The recent decision on rationalizing GST rate cuts could benefit

NBFCs by boosting economic activity, increasing spending, and improving

individual savings. Lower spending or stronger savings can boost demand for

fresh loans (for productive uses) or increase a borrower's ability to repay.

Capital Markets



The capital market ecosystem witnessed a healthy recovery, but exchanges and

brokers could see weakness in the near term, led by a weak volume trajectory in

July. Given the efforts to diversify the revenue, the impact can be cushioned.

Mutual fund activity is anticipated to remain healthy, driven by improving fund

performance across key large players and the emergence of a strong online

acceptance of online distributors as a channel. Wealth managers are expected

to witness strong inflows going forward, with a portion of the recurring segment

increasing in the overall mix.

Insurance



The life insurance players reported a slowdown in premium growth, affected by

a slowdown in the ULIP momentum and a high base. During 1QFY26, the life

insurance industry witnessed APE growth of ~7% YoY, driven by ~10% YoY

growth reported by private life insurers, while LIC grew ~2% YoY. The shift in

product mix towards traditional products from ULIPs led to a strong expansion

in the VNB margin across the industry. Management teams across players guide

a further expansion of margins led by 1) an increased shift in product mix

towards par and non-par products, 2) a higher contribution from high-ticket-size

products, 3) a higher sum assured and better rider attachment rates, and 4) an

August 2025

6

Voices | 1QFY26

improvement in persistency. The general insurance industry’s growth remained

subdued, with partial recovery in the motor segment offset by the impact of 1/n

regulation on the health segment. Recovery in auto sales and capex are key

monitorables for growth prospects among general insurance players.

Healthcare



The domestic formulation-focused companies highlighted that they are gearing

up for obesity/ diabetes drugs from the peptide family. Companies indicated

that they would be focusing on the marketing part of the value chain for

India/EM markets. They indicated that the manufacturing aspects can be

outsourced and the medicine can be made available at the time of market

formation. Having said this, the acute therapies continued to show some

weakness due to adverse seasonality, according to the management teams.



In the CDMO segment, while management continues to witness increased

inquiries, the conversion to commercial benefit may take time due to volatility

in the funding for small innovator companies and low clarity on the tariff aspects

from the US. Management teams have been upgrading their technology

platforms to expand the coverage service for innovator pharma companies.



In the US generics, management indicated an increased recalibration of R&D

towards a complex product pipeline in the areas of injectables, respiratory,

nasal sprays, and peptides. The pace of filings is reducing gradually to focus on

select products.



Despite geopolitical volatility on the policy front, companies continue to invest

in R&D as well as manufacturing capacities/capabilities to benefit from the

industry tailwinds.



On the hospital side, companies indicated their strong focus on adding beds

either at existing sites or entering newer, economically viable locations.

Management teams indicated that the companies are implementing efforts to

revive international patient flow from countries without any political unrest.

They also reported increasing operational efficiency by optimizing case mix,

payor mix, and average length of stay (ALOS). Overall, companies have been

selectively positive and executing strategies based on their strong skill sets to

benefit in the pharma as well as the hospital domains.

Logistics



The logistics sector witnessed a subdued performance in 1QFY26, as demand

was weighed down by muted spending, inflationary pressures on MSMEs, and

lower e-commerce activity, which particularly affected express logistics players.

While pure-play freight and parcel operators struggled with weak volumes and

margin pressures, multimodal logistics companies performed relatively better,

benefiting from diversified operations and port-linked growth. Supply chain-

driven businesses showed resilience, though challenges persisted in freight and

SME-dependent segments. Looking ahead, the companies are expecting to

gradually recover in 2HFY26, aided by stable operating expenses and a seasonal

demand uptick.

August 2025

7

Voices | 1QFY26

Metals



In the Ferrous space, management across companies indicated 1) a softer NSR in

2Q, which is likely to rebound post-monsoon with a steady cost structure, and 2)

incremental volumes from new capacities with a rising share of captive raw

material mines to support margins. In the non-ferrous space, management guided

the CoP to increase, led by rising scrap prices, rising domestic e-auction coal, and

trade tensions, which may be offset by favorable pricing conditions leading to

sustained margin in the coming quarters. Overall, the 1Q Indian operations

performance was backed by better NSR and muted costs, offsetting the muted

volume impact. Management believes that global uncertainties might pose

challenges to international steel and input prices, but with the safeguard duty, the

domestic businesses are cushioned from downward risks.

Oil & Gas



OMCs: Management commentary suggests that marketing segment

performance is likely to remain resilient, as lower MS/HSD margins are expected

to be offset by easing LPG under-recoveries. However, refining performance is

expected to stay soft in 2Q. CGD: Companies remain positive on sustained

growth in CNG and D-PNG volumes, supported by steady EBITDA/scm margins

amid declining raw material costs. That said, GUJGA anticipates continued

weakness in Morbi volumes in 2Q. GAIL: The company has revised down its

transmission guidance, reflecting weaker gas transmission volumes over the

past two quarters. ONGC & OINL: Both companies continue to project strong

production growth from KG-98 and NRL, though at levels lower than earlier

guidance.

Real Estate



Real estate companies reported a 59% YoY surge in launches during 1QFY26,

driven largely by major projects from PEPL that had been deferred from FY25

due to approval delays. Developers remain optimistic about sustained demand

in the coming years. Average price realizations grew 16% in 1QFY26, with a

similar trajectory expected ahead. With approval processes gradually improving,

the launch pipeline for FY26 looks stronger, while companies are also actively

pursuing land acquisitions to bolster their future development portfolio.

Retail



Retail:

The demand environment remained subdued in 1QFY26, led by weak

consumer sentiment, early monsoons, and a shift in the festive calendar, though

improvement in wedding-related footfalls provided some cushion. Retailers

focused more on operational efficiency, tighter cost control, and improving

store productivity rather than aggressive expansion. Overall, the sector

participants remain cautiously optimistic, with hopes pinned on the demand

recovery during the upcoming festive season.



Jewelry:

Jewelry companies sustained strong sales growth despite geopolitical

headwinds, tariff pressures, and a sharp rise in gold prices (+32% YoY, +5%

QoQ). Consumer demand remained resilient, supported by a favorable festive

and wedding season. Management highlighted that the 2Q base is elevated due

to last year’s customs duty reduction, which could weigh on reported growth.

However, demand momentum in July has been encouraging, aided by relative

stability in gold prices over the past three months.



QSR:

Demand trends for QSR players remained weak in 1QFY26. Management

expects demand to improve, supported by a good monsoon, easing inflation,

August 2025

8

Voices | 1QFY26

and government measures such as income-tax cuts and GST rationalization,

along with company-specific initiatives. However, muted underlying growth

continued to weigh on operating performance, keeping pressure on restaurant-

level and EBITDA margins across most brands. While value-focused menu

extensions and dine-in-led promotions have helped drive footfalls, a sustained

recovery in ADS and SSSG remains critical to restoring unit-level profitability.

Technology



IT services companies maintain a cautiously optimistic outlook while recognizing

that ongoing macroeconomic headwinds continue to pressure overall demand.

Infosys maintained a cautiously optimistic stance (upgrading the lower end of

guidance), with the upper end of its 3% YoY organic CC guidance hinging on a

gradually improving environment, while HCLT remained the most constructive,

guiding for 3–5% YoY CC growth (also, upgrading the lower end of guidance).



Management commentary in BFSI remained relatively steady, with verticals

such as Manufacturing, Retail, and Healthcare seeing pressure from

macro/trade headwinds. GenAI is beginning to disrupt pricing conversations and

revenue realization across Tier-1s, with Infosys, Wipro, LTIM, and HCLT all

acknowledging the commercial implications of rising productivity. A few

companies noted deal deferrals in 1Q, which are expected to close in 2QFY26.

Telecom



One extra day QoQ, constant subscriber net additions, increased data

consumption, and the flow-through of recent tariff hikes all contributed to the

telecom sector's stable performance throughout the quarter mentioned by the

telecom operators. With the help of a stronger customer mix and rising

broadband usage, ARPU continued to improve. Rollouts of home broadband

accelerated and significantly boosted growth. The timing and magnitude of the

upcoming tariff increase, which continues to be the primary driver of additional

financial performance improvement, will now determine the sector's outlook.

Utilities



Several companies acknowledged that power demand dipped 1.5% YoY in the

quarter due to a high base and the onset of early monsoon, though

management expects normalization and remains constructive on medium-term

growth. India has already met its Paris NDC target of 50% clean energy capacity

(243GW non-fossil). Meanwhile, several state discoms are increasingly opting

for competitive bidding for thermal procurement to secure firm power

alongside renewables. The ALMM (Wind) policy is seen as a game-changer,

ensuring domestic sourcing and strengthening supply chain resilience.

Management expects wind additions of 6GW/7–7.5GW/8–9GW over FY26–FY28

and does not see supply chain concerns, as domestic manufacturing capacity for

key components such as gearboxes and generators is sufficient. On the

transmission front, as per the NEP, INR9t of transmission projects are to be

completed by FY32, with all awards to be finalized by FY30, and only INR3t has

been awarded so far, implying INR6t must be bid over the next five years,

averaging ~INR1t annually. On the storage front, the second tranche of the

INR54b VGF scheme will support 30GWh BESS capacity, complemented by

extended ISTS waivers for co-located BESS and pumped hydro projects until

Jun’28, enhancing

the viability of RE + storage solutions. CERC has directed

market coupling in the DAM by Feb’26, shifting price discovery to a centralized

mechanism.

August 2025

9

AUTOMOBILE | Voices

Key takeaways from management commentary

AUTOMOBILES



Management expressed optimism about a revival in domestic demand for the majority of segments during the

1QFY26 earnings calls. The growth of the 2W market is expected to be between 5% and 7% over the next few

quarters, and management at PV and CV OEMs is anticipating that demand will pick up during the holiday

season. The majority of OEMs have handled the chip scarcity problem with little apparent disruption. Short-

term disruptions to exports could result from the uncertainty around tariffs and the protectionist position

adopted by several governments. The outlook for auto auxiliary companies exposed to material exports is still

bleak. Next quarter, input prices are anticipated to be unchanged, which will have little effect on margins.

KEY HIGHLIGHTS FROM CONFERENCE CALL

Demand outlook

Other key takeaways from the call



Outlook:

Management expects the MHCV industry



Switch India reported a positive PBT in 1QFY26

Ashok

to post mid-single-digit growth in FY26, while the

and is targeting PAT breakeven in FY26E. As of the

Leyland

LCV segment is expected to grow at a slightly

end of 1Q, it had an order backlog of 1,500 buses.

higher rate. Exports witnessed growth in 1Q, and



Hinduja Leyland Finance Ltd. (HLFL) has received

this momentum is expected to continue.

RBI approval for its merger with NxT Digital, with



Backed by a healthy order backlog, management

remaining statutory and regulatory approvals still

remains confident of achieving double-digit

in process. According to management, the HLFL

growth in the defense segment in FY26 and

listing is likely to take at least 3-4 quarters.

sustaining the momentum into FY27.



Outlook:

Given the positive on-ground



Management expects the impact of net material

fundamentals, management anticipates 5-6%

costs (cost less price hike) to largely remain flat

Bajaj Auto

growth in the 2W industry in the coming months.

QoQ in 2Q.



With the impact of rare earth metal shortages,



Further, with the INR depreciating against the USD

BJAUT is expected to operate at 50- 60% of its

again, management expects some currency

planned capacity for 2W EVs and 75% for 3W EVs

benefits in 2Q. However, BJAUT plans to leverage

in Aug’25,

reflecting a similar shortage

these benefits to regain and expand its market

experienced

in Jul’25.

share in the domestic market.



RE expects volume growth to continue in FY26,



Despite cost inflation, RE has implemented limited

driven by increasing appeal among Gen Z and first-

price hikes (only a modest ~1.15% increase in

time buyers. Additionally, increased demand from

Apr’25),

choosing to absorb the margin impact to

Eicher

the rural segment has contributed to improved

support volume growth.

Motors

market penetration.



The shortage of rare earth materials has impacted



In exports, RE continues to strengthen its position

the production of models like Scram and

in the mid-size segment. Following rapid volume

Himalayan 450. Alternative sourcing strategies

traction in Brazil and Argentina due to CKD

have normalized supply, ensuring stable

localization and channel ramp-up, RE is now

production going forward.

among the top three players in key Latin American

markets.



Outlook:

Management maintains its 6-7% volume



New launches for HMCL include two 125cc

growth guidance for the industry and expects to

motorcycles planned for 2Q, Xoom 160, cosmetic

Hero

outperform industry growth, aided by its new

refreshes in Xtreme 125R to reignite interest, and

MotoCorp

launch pipeline. Long-term margin guidance

new launches from the Harley partnership.

remains at 14-16%, though near-term margins are



Despite industry-wide concerns over rare earth

expected to be at the lower end of this range.

supply, management has confirmed that it has



HMCL aims to grow exports by 40% in FY26,

secured the necessary materials for 2Q production

targeting 10% of total revenues and volumes from

for both ICE and EV models, while actively

its global business in the medium term.

pursuing long-term alternatives.

August 2025

10

AUTOMOBILE | Voices



Hyundai



M&M





Maruti





Tata Motors





TVS Motor

Co.





BIL



Domestic PV demand remains challenging, with

June marking the lowest TIV in the past 30 months

(excluding December). However, management is

hopeful of a pickup in demand due to the 100bp

interest rate cut, the upcoming festive season, and

healthy monsoons.

Auto: Management continues to maintain its

growth guidance of mid-to-high teens for UVs in

FY26E, aided by healthy traction for most of its

models.

Tractors: An expert panel has been established for

TremV and has recommended a phased

implementation based on segments. However,

management awaits clarity on the timeline of the

implementation.

Demand outlook:

Management is hopeful of a

demand revival in PVs in 2Q-3Q, led by the festive

season and positive rural sentiment. Management

expects to outperform industry growth, supported

by two upcoming SUV launches in 2Q.

Exports:

Management expects its export

momentum to improve further with the launch of

e-Vitara, which is planned for rollout across

approximately 100 regions globally. Export revenue

stood at INR65b in 1Q.

India CV: Management expects the CV industry to

post single-digit volume growth in 2Q over a low

base. Further, with a normal monsoon and festive

season build-up, TTMT expects CV demand to pick

up in 2H.

Indian PV: In the Indian market, TTMT continues to

expect low single-digit growth in PVs for FY26.

While ICE margin is likely to remain under pressure

in the near term, management anticipates a

recovery in the medium term with improving

demand. TTMT remains committed to achieving

double-digit EBITDA margin in the PV business over

the long term.

Domestic: Management remains optimistic about

the continued growth momentum in the domestic

market in FY26. It has also reiterated that the

company holds sufficient stock of rare earth

magnets to meet short-term demand.

International: Management expects 2W exports to

post healthy growth in FY26, led by strong demand

from Latin America and a recovery in Sri Lanka and

Africa.

Given the uncertain tariff environment, the overall

industry experienced a volatile ordering cycle in

April. Management expects the ordering cycle to

normalize once the complete tariff structure across

all regions is finalized.

BIL’s exports to the US are

currently subject to a

10% tariff. Approximately 60% of this cost is

absorbed by end customers, with the company

absorbing the remainder. Management clarified

that its competitive positioning remains unchanged

despite the US tariff levies.





The increase of CNG and EVs in the product mix

has helped the company achieve CAFÉ norms.

SUVs continued to gain traction, with

increasing penetration even in rural areas.



MM will continue to invest in brand, channel,

and market creation across key export markets.

The launch of the XUV 3XO in South Africa has

received a favorable response, and the model

has recently been introduced in Australia as

well. In South Africa, MM is already among the

top 10 OEMs and is one of the fastest-growing

players in the region.

The company has two launches lined up for FY26

in the SUV segment, one being the e-Vitara and

the other an ICE model

The company has two launches lined up for FY26

in the SUV segment, of which one is the e-Vitara

and the other in the ICE segment. Availability of

rare earth magnets remains a challenge for

MSIL; however, the company has been able to

manage its supply requirements so far.

JLR: Global luxury demand has been weak due to

tariff-led uncertainties in key regions. However,

management believes that once tariffs are

finalized, the uncertainty will subside, allowing

demand to stabilize at a new normal.

Management has maintained its FY26 EBIT

margin guidance at 5-7% with near nil FCF.









Capex: Capex is expected to remain in the range

of INR1.6b-1.7b, with investments in new

products. TVS will continue to invest about

INR20b in subsidiaries and associates.





As part of its diversification into the PCR/TBR

segments, the company plans to focus on niche

premium segments, including radial. It aims to

commence SOP for this project by Jun’26

Despite the benefit of currency depreciation,

management has maintained its margin

guidance at 24-25% for FY26, citing an uncertain

demand environment. Accordingly,

management has refrained from providing any

volume growth guidance for FY26E.

August 2025

11

AUTOMOBILE | Voices



BHFC



Management targets to accelerate growth in high-

return Indian verticals

–

defense, aerospace,

advanced castings, and a growing electronics

cluster

–

while concluding the review of its

European steel forging assets.

Utility vehicles now account for almost two-thirds

of total market sales. Management expects this

trend to generate opportunities in the medium

term. However, it has also noted that recent US

trade tariffs and the protectionist stance adopted

by various nations will cause disruptions, leading to

short-term pressure on BHFC’s revenue and

profitability in FY26.





Going forward, BHFC plans to expand its global

footprint with greater caution. India will become

the center of gravity, with capital, engineering,

and leadership focus aligned to areas where

demand visibility, policy support, and supply-

chain strength converge.

Over the past 3-4 years, BHFC has invested

significant capital to strengthen its overseas

aluminum operations, scale up its Indian

subsidiaries, and expand capacity in the

domestic forging business. Majority of these

investments are now complete, with FY26 capex

focused solely on India.

Apollo Tyres

Current Price INR 467

Buy

Click below for

Results Update

Standalone update



Demand outlook: India business grew in line with the industry, with OE business

growing at low single digits and the replacement segment growing at mid-single

digit levels. Also, while overall volume growth was flat YoY, it was up 4% QoQ.



The CV OE growth was driven by increased pre-buying of trucks due to the

mandate of AC cabins. Additionally, in PVs, they have secured an order to supply

their premium Aspire 5 tyres to an auto manufacturer based out of Germany.

Management is hopeful of demand revival in the festive season. Revenue

growth guidance remains at high single digits for FY26E.



Revenue Mix: Standalone revenue mix by product

–

TBR at 54%, PCR at 21%,

farm specialty tyres at 7%, LCV at 8% and other specialty products at 9%.

Replacement segment is still a major contributor, making up ~65% of revenue,

followed by OEMs at 24% and export at 11%. India remains the primary focus,

contributing 66% of consolidated revenue, Europe follows at 27%, and other

geographies make up 7%.



Segmental trends and Market share: In PV OEM, APTY lost market share due to

certain key OEM accounts that they have walked away from in this quarter.

They have performed broadly in line with the market in the replacement

segment. In TBR replacement, the company has grown at mid-single digits, while

in PCR replacement, APTY has grown slightly below the market at low single

digits. The estimated market share in PCR stands at 20% and TBR replacement at

30%.



Exports from India declined this quarter, primarily due to market conditions in

Europe and the US.

Europe business update



Demand: Europe witnessed a seasonal decline in revenue. Despite weak

sentiments, APTY’s PCLT segment outperformed the market. Management

expects a pick-up in demand momentum in the coming quarters.



The UHP mix for APTY has now increased to 48% for the quarter, reflecting

continued premiumization.



The key reason for margin contraction in Europe was inflationary pressure in a

market where demand was challenging.



Netherland plant to cease operations by summer 2026. One-time extraordinary

restructuring cost was incurred this quarter (payout to employees working in

that plant).

August 2025

12

AUTOMOBILE | Voices

While Hungary's average tax rate stands at 9%, the same in the Netherlands is

about 20%. However, despite shifting operations from the Netherlands to

Hungary, the average tax rate is unlikely to materially change, as they are

headquartered in Hungary and they procure from the Netherlands and supply to

different locations globally from Hungary.



Reifencom booked Euro 53m in revenues, which was 5% up YoY, and an EBITDA

margin of 4%.

Guidance:



APTY refrained from providing margin guidance due to volatility in

macroeconomic conditions. There is no change from the previous capex

guidance of INR15b, which includes INR7b for maintenance and INR8b for

expansion.



Gross margin may improve in future quarters on account of reduced RM costs;

however, exchange rate uncertainty remains a major factor to look out for.



RoCE target remains at 15%. European operations pulled down the company’s

returns, but management is hopeful about recovery in the coming quarters.



Ashok Leyland

Current Price INR 133

Buy

Click below for

Detailed Concall Transcript &

Results Update

Outlook



Management expects the domestic MHCV truck market to grow in 2Q, albeit

over a low base of FY26. Further, given positive lead indicators (healthy fleet

utilization levels, rising freight rates, reduction in interest rates and an ever

ageing fleet), management is hopeful of a pick-up in demand during the festive

season.



Management expects the MHCV industry to post mid-single-digit growth for

FY26, and LCVs a bit higher than that.

1Q key highlights



AL’s market share in MHCV goods has improved 130bp YoY to 31.3% in 1Q.

Moreover, its share in the up to 7.5T LCV segment rose 120bp YoY to 12.9%,

according to Vahan.



In 1Q, the company added 23 MHCV dealers and 13 LCV dealers, largely in North

and Central regions where it intends to ramp up its presence. With this, the total

dealer count for MHCV stands at 1,073, and the same for LCVs stands at 851. AL

targets to cross 2k total touchpoints by FY26-end.



In servicing, AL is now ranked No. 1, and holds No. 2 position in customer and

sales satisfaction survey.

Update on new launches



Management indicated that it is preparing to launch a slew of new products in

both MHCVs and LCVs. It is looking to launch 280, 320, and 360 HP variants in

tippers, tractor trailers, and MAVs. Management expects to launch higher HP

trucks that will feature the highest power and highest torque in the category. It

will target to launch the same at a premium price position.



It is also planning to launch its first LNG based CV soon.



It will also launch 13.5mtr and 15mtr buses with a unique value proposition in

the coming quarters.



It will also unveil its first bio fuel product in the LCV range.

August 2025

13

AUTOMOBILE | Voices

Update on defense



1QFY26 was an aberration due to the very high base of last year, with defense

revenue at INR1.2b vs INR4b YoY.



It already has orders worth INR10b and has won tenders worth INR20b.



Hence, management remains confident that despite the decline in 1Q, the

defense segment is expected to post double-digit growth in FY26 and sustain its

momentum in FY27.

Capacity and utilization levels



Capacity utilization stands at 75% for AL.



Its bus body building capacity now stands at 950 units per month, which will

increase to 1,650 units per month. They are seeing a higher demand for fully

built vehicles now



Its new plant in AP was inaugurated in 4QFY25 and has an initial capacity of 200

units per month.



Further, its upcoming and most modern plant in Lucknow is expected to SOP in

3QFY26.



It is also looking to enhance its bus capacity at the Trichy and Alwar plants.

Update on exports



Export volumes in 1QFY26 grew 29% YoY to 3,011 units, marking one of the

strongest quarterly performances in recent years.



The GCC region posted a strong 60% YoY growth in 1Q.



However, demand from Bangladesh, SAARC, and Africa was below expectations

in 1Q due to adverse macro factors.



Management highlighted ongoing efforts to diversify the export base by

entering newer geographies and strengthening dealer networks in under-

penetrated regions.



Management expects its exports momentum to continue in the coming

quarters.

Update on Switch



Switch India reported positive PBT in 1QFY26, marking a key milestone in its

path toward sustainable profitability. It targets to achieve PAT breakeven in

FY26.



Switch India had an order backlog of 1,500+ buses as of 1Q-end



The shutdown of Switch UK operations at its Sherburn facility will be completed

by early Q3FY26. Production will be shifted to other global facilities.

Update on OHM Mobility



OHM Mobility is currently operating more than 850 buses at 98% utilization

levels. It has further added 200 buses in 1Q, and is on track to achieve its target

of 2,500 buses by FY26E.



Most of its projects are at healthy double-digit IRR.



Al has invested INR3b in this subsidiary in 1Q. It had invested INR3b in FY25.

These investments are sufficient to take care of OHM’s requirements for FY26E.



Post this, the company may consider alternate funding options for OHM,

including unlocking value.

Update on Hinduja Leyland Finance



HLFL reported an AUM of INR504b as of 1QFY26.



Total Income in 1Q stood at INR18.6b and PAT stood at INR1.6b for 1Q.



Its NNPA stands at 1.63%, and capital adequacy is at 18.2%



HLFL has received an RBI approval for its merger with NxT Digital, with the

remaining statutory and regulatory approvals already in process. According to

management, HLFL listing is likely to take at least 3-4 quarters.

August 2025

14

AUTOMOBILE | Voices

Bajaj Auto

Current Price INR 8,826

Click below for

Detailed Concall Transcript &

Results Update

Neutral

Result highlights



While export revenue stood at ~USD500m in 1Q, spares parts revenue grew 19%

YoY to INR16b.



Input cost pressure was up 80bp QoQ (vs. earlier guidance of 100bp) due to a

rise in Al and steel and OBD2 norms.



Margins were impacted by weak domestic demand, unfavorable currency

(INR/USD at 85.6 vs. 86.5 QoQ) and supply chain constraints on rare earth

materials.



BJAUT generated FCF of INR12b in 1Q and its surplus cash stood at INR170b.



It has invested INR1b in 1Q and expects to invest INR6-7b in FY26.



Cons. PAT rose 14% YoY (10% revenue growth) to INR22b and was largely driven

by strong performance at BACL, which saw its PAT double YoY.

Outlook



Given the positive on-ground fundamentals, management believes that 5-6%

growth in the 2W industry is possible in the coming months.



Management expects the impact of net material costs (cost less price hike) to

largely be flat QoQ.



Further, given that INR is again depreciating vs. USD, management expects some

currency benefits in 2Q. However, BJAUT intends to use these benefits to target

and recover some market share in the domestic market.



Given the impact of rare earth metal shortage, BJAUT is likely to produce 50-

60% of planned capacity for 2W EVs and 75% of planned capacity for 3W EVs in

Aug’25, with a similar shortage seen in Jul’25 as well.

Domestic motorcycles update



While the exact period of a demand slowdown in 2Ws remains unclear,

management attributes the same to: 1) the advancement of the monsoon in

many parts of the country, and 2) larger urban markets seeing greater

slowdown than others due to rising inflation (especially around rentals). As a

result, customers seem to be postponing their purchase decisions, which is

more prevalent at a time when the festive season in around the corner.



Management also indicated that the 100cc segment is facing challenges likely

due to muted wage hikes, inflationary pressure and limited availability of

financing.



Given weak demand, most OEMs have launched tactical measures to gain share,

especially in the 100cc market. BJAUT has refrained from doing the same, which

has led to its market share loss in the segment.



BJAUT has always been of the view that rather than competing in the 100cc

segment, it would be worthwhile to upgrade entry-level customers to 125cc by

launching affordable products in the segment. It is already working on an entry-

level 125cc product (unlikely to be branded as Pulsar), which is likely to be

launched soon and would help the company recover some of the lost market

share in domestic motorcycles.



Triumph is now present in 80 cities with 130 dealerships. recently launched a TV

commercial around the Pulsar family.

Update on new ABS norms mandate



Management has indicated that BJAUT would need about 12-14 months to get

the supply chain aligned if ABS were to be made mandatory on all two wheelers.

15

August 2025

AUTOMOBILE | Voices

Also, cost implications due to the same are also likely to be high and would likely

have a dampening impact on demand.



The government is currently in discussion with industry stakeholders and they

hope to come up with a positive resolution on this soon.

Update on exports



Of the top 30 markets that contribute to 70% of emerging market demand,

demand in 25 markets grew 17% YoY in 1Q. BJAUT outpaced these markets with

27% YoY growth.



Latin America continues to be one of the key growth drivers for BJAUT. While

Africa has now recovered from the bottom, macro uncertainties prevail, making

it difficult to gauge demand sustainability here.



In Brazil, the company has sold 7k units per month and would look to have a

capacity of 50k units p.a. by FY26 end. Dominar and Triumph are doing well in

this market. BJAUT has introduced Pulsar 150 for the delivery segment. It

expects to ramp up presence in this market gradually in the coming years.



Exports to the US are only from KTM and Triumph and these contribute to less

than 1% of total revenue.



3W exports have picked up over the last few months, led by strong demand

across all its key regions. BJAUT has introduced 3Ws in 23 different countries,

which had never seen a 3W before.

Update on EVs



Management indicated that EV adoption is following “scooterisation” trends in

the sense that EV penetration has picked up in regions where scooter

penetration is high and vice-versa for obvious reasons.



Industry split for models priced >INR100k:<INR100k is 40:60, while the same for

BJAUT is 85:15.



In fact, BJAUT’s market share in the models priced >INR100k is 31% and it is a

leader in this segment.



Its market share in 2W EVs has improved to 21% from 12% a few quarters ago.



BJAUT has now expanded the Chetak 35 series with a higher range, fast charging

and higher boot space.



In 3W EVs, BJAUT has a 35% market share and has reached a leadership

position.



BJAUT is looking to launch a product in the e-rik market as well, which is a 40k-

unit per month industry. It will launch a lithium-ion based product with

premium pricing relative to unorganized players.

Update on KTM



The restructuring process is underway.



BJAUT is in the process of seeking few regulatory approvals for completing the

KTM acquisition. Once they are in place, the company would move to a

controlling position and target to turn around the company.

Update on BACL



BACL delivered over 2x growth in PAT to INR1.1b in 1Q.



AUM increased to INR120b and it expects to end FY26 with AUM of INR190b.



BACL’s penetration now stands at 40%.



BJAUT has infused INR3b in BACL in 1Q.



August 2025

16

AUTOMOBILE | Voices

Balkrishna Inds

Current Price INR 2,421



Neutral

Click below for

Detailed Concall Transcript &

Results Update



























Given the uncertain tariff environment, the overall industry experienced a

volatile ordering cycle in April. Management expects the ordering cycle to

normalize once the complete tariff structure between all regions is in place.

Europe volumes declined 20% YoY as the farm sentiment in Europe currently

remains weak.

Despite the adverse macro environment, BIL posted only a 3% YoY volume

decline, which highlights the resilience of its business model, according to

management. The company has outperformed its end market and is likely to

continue its outperformance in the coming quarters as well.

BIL’s exports to the US are currently subject to a 10% tariff. Its end customer is

absorbing about 60% of this impact, while the company is absorbing the

balance. Management clarified that its competitive positioning remains

unchanged even after the tariff levies by the US.

Dealer inventory remains stable between 2 and 3 months.

Carbon Black sales to third parties contribute 9% to overall revenues.

Input costs are likely to remain stable QoQ in Q2.

The Euro-INR rate for 1Q stands at INR93.6, while for the balance period, the

hedge rate is closer to the ongoing spot rate.

Despite the benefit of currency depreciation, management has maintained its

margin guidance at 24-25% for FY26, citing an uncertain demand environment.

Accordingly, management has refrained from providing any volume growth

guidance for FY26E.

Management has indicated that its export margins are about 50-100bp higher

than those of the Indian business.

Its rubber track expansion is set to commence SOP by H2FY26.

As part of its diversification into the PCR/TBR segments, it plans to focus on

niche premium segments, including radial. It aims to commence SOP for this

project by Jun’26. The company is confident that it will outperform market

expectations in this venture, citing a potential operational advantage over its

peers.

The advanced Carbon Black capacity is still in the trial phase and is expected to

ramp up from Q4CY25 onwards.

BIL currently has around 76 distributors for the core business. While there could

be some overlap, it aims to set up a new distribution network for the PCR and

TBR segments.

Bharat Forge

Current Price INR 1,159



Neutral

Click below for

Results Update



CV exports declined 15% YoY to INR4.5b largely due to disruptions in North

America caused by a pause in emission norm changes and the ongoing tariff

uncertainties. Europe exports saw some revival after the lows seen last year.

PV exports were up marginally by 5% YoY, driven by diversification efforts

beyond North America. Non-auto exports declined 7% YoY due to slower growth

in HHP engines, construction and mining, and seasonality impact in the

aerospace business.

August 2025

17

AUTOMOBILE | Voices

Domestic revenue declined 9.7% YoY. CV business revenue fell marginally by

~2% YoY, largely attributed to market softness and seasonality in the beginning

of FY26. PVs saw robust performance, growing 19% YoY, aided by new business

wins and higher volumes at some of their key OEM customers. While non-auto

was down 21% YoY due to high base of defense execution, it posted 28% QoQ

growth, driven by better execution in defense and small one-time orders for

machine tools.



EU aluminum operations remained stable with fair utilization of 70%, delivering

EBITDA of INR330m (margin at 3.1%, down 40bp YoY). US aluminum business

saw a second consecutive quarter of positive EBITDA margins, at 6.1%, driven by

operational efficiencies and better utilization of capacity to 70% of phase 1. The

restructuring of European steel business is under consideration and a final

decision is likely by FY26 end.



The acquisition of American Axles is seen as another step in value addition for

its product lineup as BHFC would get access to know-how on design and

manufacturing of axles. With this acquisition, it gets access to supply

components to LCV/SUV segments with a good RFQ pipeline. This acquisition

should add INR10b to revenue. American Axles will produce products for

highway and off-highway sectors.



New business worth ~INR 9bn was secured in 1Q, which included INR4.29b from

India business, INR2.69b from defense, and INR1.49b from JSA.



Defense business has signed MOU with French company Turgis Gaillard to offer

MALE unmanned aerial vehicles (AAROK) to the Indian defense ministry. The

order pipeline consists of unmanned aerial, land and water drones, artillery

systems, naval guns and carbines.

Outlook



2Q outlook remains cautious as the impact of the new revised US tariffs on

Indian exports would be reflected in 2Q. BHFC expects demand to revive in 2H,

based on customer feedback. Over the medium to long term, management

stated that the primary focus will shift back to India operations from overseas,

as India manufacturing will become more lucrative, driven by opportunities

from machine tools and emerging sectors in the domestic market.



US accounted for one-third of exports from Indian manufacturing in 1Q.



BHFC does not plan to set up a manufacturing facility anywhere outside India in

the near term. Competitive landscape remains stable since, among major

competitors in BHFC’s crankshaft business, India faces the lowest tariff rates

from the US.



Management expects strong growth of over 20% for the aerospace business in

FY26, based on the order backlog.



Defense business has an order backlog of ~INR95b in orders. BHFC has emerged

as L1 for another tender to supply carbines with an order size of INR14b.



Management aims to get into the server manufacturing business; however, this

is still in the early stages and the primary focus would be on serving a niche

customer base before scaling up capabilities and addressing the mass market.



August 2025

18

AUTOMOBILE | Voices

BOSCH

Current Price INR 39,929



Neutral

Click below for

Detailed Concall Transcript &

Results Update















In 1Q, demand was healthy in tractors and 3Ws. They saw subdued demand in

PVs, 2Ws, and CVs.

The NOx sensor required for the OBD2 application has been localized and is

produced from its Bidadi facility. They would also use this line for exports. As

per their strategy, Bosch Ltd would first focus on the Indian demand, and if

there is spare capacity, they would look to export it to regions based on

requirements. Continuously increasing its exports is one of its stated targets.

Apart from Nox sensors, they also export products like spark plugs, a few

injectors to OEMs in Europe.

Bosch Automotive Electronics, its sister company, serves as a contract

manufacturer for VCUs and electric coolant pumps for EVs. The sale of these

products happens through the listed entity.

For the EV business, Bosch is in discussion with many OEMs for various

solutions, and the company hopes to see some order wins soon.

Many developed regions continue to see a weak demand outlook for autos

currently, given the uncertainty led by tariffs and an overall slowdown in their

respective economies.

The deadline for TREM V emission norms for tractors are currently on hold

Its parent company in Germany has entered into an MoU with Tata Electronics

to look at potential co-operation in products like semiconductors and OSAT. This

MoU is for one year. Once there is some progress and if there are localization

opportunities in the future, the listed entity may look to play a part in the same

at a later stage.

The company is in the early stages of development of hydrogen-based ICE

systems. It is currently working with various OEMs towards technology maturity

in the same field. However, requisite infrastructure needs to be developed in

terms of the generation of hydrogen, storage, distribution, pumping, etc., for

this technology to be commercially viable in the future.

CEAT

Current Price INR 3,195

Buy

Click below for

Detailed Concall Transcript &

Results Update

Result highlights



Overall volume growth for Q1 stood at 9% YoY, led by healthy growth in OEM,

steady growth in replacement, and flat exports.



The replacement segment recorded high single-digit growth, led by strong

demand in the TBR segment, particularly from the mining and construction

segments. CEAT also saw double-digit growth in 2W replacement demand

(higher in scooters than bikes). However, PV replacement demand was muted,

declining to low single digits



The OEM segment grew in the early 20s, driven by strong new order wins. The

farm tyre OEM segment grew in mid-single digits.



In exports, demand was weak in Europe across both the PCR and TBR segments

due to geopolitical headwinds.



ASP declined QoQ due to an adverse mix in exports, led by: 1) weak demand in

Europe (higher ASP/margin region), and 2) a one-time large private-label order

with lower ASP.

August 2025

19

AUTOMOBILE | Voices

EBITDA margin declined 60bp QoQ due to: 1) flat input costs QoQ; 2) weaker

mix within exports; 3) partial absorption of tariffs in the US; 4) higher marketing

spends due to IPL; and 5) weaker exports and replacement mix.



Interest burden was high as average debt in Q1 was higher, with an average

interest cost of 8%. Additionally, interest paid on security deposits accounted

for 25% of the total interest burden.



Share of profit from associates and JVs turned negative as the SL JV paid a

dividend to the parent slightly exceeding the annual PAT, triggering withholding

tax, which was adjusted in consolidated numbers.

Demand outlook - Domestic



Management expects long-term demand for the domestic tyre industry to grow

at a high single digit till FY31.



For FY26, management expects to deliver double-digit revenue growth. It also

expects continued strong growth in the replacement segment for 2Ws and CVs

through the year. However, PV replacement is likely to remain muted. Overall, it

expects to post high single-digit volume growth in 2Ws, mid single-digit growth

in CVs, and low single-digit growth in PVs.



OEM demand may taper off compared to Q1 levels. However, given the new

wins and ramp-up in higher sizes, CEAT should outperform the industry. It

expects to grow in high single digits in both PCR and TBR in OEMs.

Demand outlook - Exports



Channel destocking has paused, likely leading to positive demand sentiment for

the coming quarters.



Management expects a gradual pick-up in agri and radial OEM demand in

Europe over the coming quarters. It also expects the PCR segment demand to

stabilize.



In the non-specialty business, Africa witnessed demand growth, while

challenges still persist in Latin America (currency depreciation) and the Middle

East (key market for CEAT).

Market positioning



In the two-wheeler segment, CEAT has established a strong position in the

domestic market and continued to gain share in Q1. Given this, management

does not expect quantum improvement in share from here. It continues to hold

a strong share in the 2W commute segment. It is now focusing on the fast-

growing higher cc segment (radial tyres), which currently accounts for 5% of the

industry.



In the PV replacement tyre segment, which is highly competitive, CEAT is

nearing its all-time high market share. It has gained shares in both the

replacement and OE categories in the PV segment in Q1. It is focusing on the

premium segment, given its robust growth. This market currently accounts for

10-11% of the industry but is expected to improve to 25-30% in the next 3-5

years. Additionally, CEAT is likely to continue to witness strong single-digit

growth in PVs going forward, according to management, based on its new order

wins.



It continues to hold a dominant share in PV EVs at 32%. It also has a strong

presence in 2W EVs. Its share has declined to 12% but is expected to revive in

the coming quarters.



August 2025

20

AUTOMOBILE | Voices

Update on input costs



International natural rubber prices have corrected by USD 200 to USD 1700 per

MT. Given 60% of total rubber procurement for CEAT is from exports, it stands

to benefit from this. However, the benefit is likely to be partially offset by rising

rubber prices in India (to INR 200 per kg from INR 180 per kg) due to the

demand-supply gap.



However, even crude prices are lower at USD 69 per barrel. On the other hand,

INR has appreciated vs USD by about 1%.



Overall, management expects the raw material basket to reduce by 1-2% QoQ in

Q2.



With improving demand macro, the export mix is likely to improve in the coming

quarters.

Update on Camso



Management expects to close the Camso acquisition in Q2.



Sri Lanka currently faces a 30% reciprocal tariff (this includes both tyres and

tracks) on exports to the US, effective from 1st August, declining from the

earlier 44%. With ongoing negotiations between the two nations, further

reductions are expected.



If tariffs remain unchanged, CEAT is planning to shift part of the tyre production

to India to leverage any relative advantage for exports to the US. However, the

track production will continue to be based in Sri Lanka.



According to management, Camso holds no disadvantage compared to

competition from China/Canada/Vietnam/India. However, the sharp tariff

increase is likely to lead to demand weakness in the US.

Update on capex and debt



Capacity utilization at CEAT currently stands at 80%+.



The company has already invested INR2.3b in capex in Q1, which is in line with

its annual capex guidance for FY26 of about INR9.5-10b (including

maintenance). This includes the new capex approved by the Board worth

INR4.5b for the PCR capacity in Chennai. However, capex outflow for this project

is unlikely to be material in FY26E.



Maintenance capex for CEAT stands at INR2-2.5b pa.



Maintenance capex for Camso (including SL JV) is likely to be under INR1b for

FY26.



However, it intends to set up an upstream capex (INR1.5-2b, spread over two

years) in Sri Lanka for Camso, enabling independent manufacturing of all tyre

and track sizes.



Consolidated debt currently stands at INR18.1b. Management expects this to

inch up to INR35-36b by FY26-end. This will be driven by: 1) outflows related to

Camso; 2) partial funding of capex; and 3) dividend payouts.

August 2025

21

AUTOMOBILE | Voices

CIE Automation

Current Price INR 403

Buy

Click below for

Detailed Concall Transcript &

Results Update

India performance update



Q2 revenue growth was 6% YoY, ahead of the ~5% blended average growth rate

for the industry. While the 2Ws and 4Ws segments have posted 3-5% growth,

the tractor segment continues to post higher growth. The reason for its

outperformance relative to industry growth has been the execution of its order

book, especially at CIE Hosur, which is now seeing a gradual ramp-up.



Capacity utilization in the India business stands at an average of 75-80%



They have recently hired new personnel for new business development, and the

management is satisfied with the progress of the same. The order book at the

end of H1 stands at INR6b (was INR3.5b at the end of Q1). They usually get

around INR10b worth of orders every year.



Exports stand at 12-13% of the India revenue. It has recently started exporting

castings to US customers, and the company expects a healthy ramp-up from this

segment from Q1CY26 onwards. Globally, CIE follows a local-to-local policy, and

hence, exports are not one of their core growth drivers. It exports such products

where it does not have much capacity elsewhere globally. Nevertheless, the

export outlook remains uncertain given the ongoing tariff-led uncertainty in key

markets.



Management expects a steady improvement in the India business in the coming

quarters on the back of the company’s healthy order backlog and stable

domestic growth in core segments.



The margin impact on a QoQ basis is more of a mix impact (higher sales of

stampings). There have been no one-offs in the India business. Management

expects the India business to see margin improvement in the coming quarters

on the back of normalization of mix and a pick-up in revenue. Management has

guided for 17.5-18% margin range for the India business.



They have no exposure to rare earth magnets. However, for their magnets

business, they are seeing a marked increase in competition from China.

Europe performance update



The PV and CV markets in Europe are weak and are likely to remain so in the

near term. Demand is likely to continue to remain at current levels for at least

the next couple of quarters.



However, management has indicated that the sharp double-digit decline in

Europe is now behind, and it does not expect revenue to go down further from

current levels.



OEMs are now indicating that they expect the market to recover by Jan’26.

However, management is not as optimistic on the same as the outlook

continues to be highly uncertain.



Current capacity utilization in Europe stands at around 40-50%



Given the weak demand in Europe, supply is much higher than demand, and a

lot of companies are undergoing financial stress, as per management. This is

likely to drive industry consolidation, and CIEINDIA is likely to emerge as a key

beneficiary of the same



The end markets for Metalcastello, viz off-highway and CVs, continue to see

very low demand levels. Further, they had invested in a big ramp-up in several

EV programs. However, given the ongoing slowdown, these plans have been

August 2025

22

AUTOMOBILE | Voices

postponed at least for 2-3 years if not more. This is the reason they are

undergoing restructuring in this business. They have so far given VRS to 30 of

the total 200 employees in the company. On the back of these restructuring

initiatives, they hope to recover margins in this business.



Management has provided a recurring margin guidance of about 14-15% for

Europe in the long run.

Other highlights



They continue to be prudent on capex spends given the weak demand.

However, they would need to invest in the new order wins in the India business.

Hence, capex is likely to be close to 5% of revenues for CY25 as well.

Craftsman Automation

Current Price INR 6,886

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Overall guidance



Management has reiterated its earlier guidance for FY26

—

revenue target of

INR70b, EBITDA of INR11b, and EBIT of INR6.5-7b

—

despite industry headwinds

and geopolitical uncertainties.



Capex guidance for FY26 stands at INR8b, in line with the growth trajectory

across segments. No incremental major capex is planned unless visibility

improves; potential deferment if land sale is delayed or customer orders do not

materialize.



Consolidated net debt stood at INR24b, with net debt/EBITDA at 2.27x. This is

expected to improve after the Gurgaon land sale, potentially valued at INR3.5b.

Standalone net debt to EBITDA is higher at 2.87x due to borrowings for

acquisitions and capex.



Management expects India to become a central manufacturing hub for CV

powertrains and stationary engines in the near future.

Update on powertrain business



Margin reached 15.2%, driven by cost optimization and stable production post-

maintenance investments.



High single-digit growth expected in FY26; 4Q may see double-digit growth.



India continues to emerge as a global powertrain hub.



Within powertrain, utilization for CV business was at ~50-60% and farm and SUV

at ~70-80%, while construction equipment capacity utilization was weak due to

pressure from emission norms.

Update on aluminum business



1Q revenue mix for Craftsman/DR-Axion/Sunbeam stood at 35%/38%/27%, with

4W aluminum solutions accounting for 59% of revenue, 2Ws 35% and other

vehicles 5%.



Standalone aluminum revenue grew 56% YoY. Even after adjusting for alloy

wheel contribution, core business grew 34% YoY.



Margins improved due to operating leverage and optimization at Coimbatore

and Bangalore plants.



Capacity utilization was at ~75% and is expected to touch 80% during the festive

season.



The company continues to expect 20-25% CAGR over the next 3-4 years, with

increased global customer engagement.

August 2025

23

AUTOMOBILE | Voices

Update on Sunbeam



Sunbeam reported revenue of INR2.91b in 1QFY26. About 50% of manpower

cost has already been reduced, with future cost optimization expected through

automation and layout improvements.



Operations at the Gurgaon plant were ceased in May’25, and machinery has

been relocated. The relocation cost was INR82m. Gurugram land sale is targeted

for FY26, pending completion of formalities and value maximization efforts.



No major incremental capex is planned; focus is on improving productivity and

margins.

Updates on alloy wheel business



Bhiwadi plant reported INR500m in revenue in 1QFY26, up 20% QoQ. It is now

EBITDA-positive but yet to turn EBIT-positive. The plant is expected to achieve

the full ramp-up in 3-4 quarters, with improving margins and overheads shared

with Sunbeam.



Greenfield project at Hosur is targeted to be operational by 3QFY26, with

smoother commissioning expected in comparison to Bhiwadi.



Combined revenue potential of INR8b p.a. from both alloy wheel plants

expected by FY27.

Update on storage business



Storage automation expected to grow 15% YoY, albeit at modest ~4% EBITDA

margins.



It remains a capital-light, scalable business, with potential margin upside in the

medium term.

Eicher Motors

Current Price INR 5,940

Sell

Click below for

Detailed Concall Transcript &

Results Update

Royal Enfield update



Royal Enfield reported a strong 14.7% YoY growth in volumes, supported by a

41% surge in exports. Domestic sales rose 11.8%, led by a broader portfolio

appeal and distribution push into non-urban

geographies. Rural sales’

contribution has increased to 50% from 32% over last few years, underlining the

success of deeper market penetration and tailored financing.



Younger buyers continue to fuel RE’s growth story. With the Hunter 350 driving

appeal among Gen Z and first-time

buyers, the brand’s average buyer age has

dropped significantly, and now nearly two-thirds

of RE’s customer base is under

35 years. This demographic shift is supported by targeted community events like

Hunterhood and a product design philosophy aligned with urban mobility and

lifestyle preferences.



Shortage of rare earth materials have impacted production of models like Scram

and Himalayan 450. Alternative sourcing strategies have normalized supply,

ensuring stable production going forward.



Despite cost inflation, RE has limited price hikes (only a modest ~1.15% increase

in Apr’25), preferring to absorb margin impact in favor of scale-driven

growth.



In exports, RE continues to entrench itself in the mid-size segment. With Brazil

and Argentina seeing rapid volume traction post CKD localization and channel

ramp-up, RE is now among the top three players in key Latin American markets.

The Himalayan 450 launch in Brazil has received overwhelming response,

supporting brand momentum overseas.

August 2025

24

AUTOMOBILE | Voices

Credit penetration stands at 61%, and RE’s internal financing platform is now

active in over 575 dealerships. This has significantly improved dealer throughput

and rural conversions.



RE is also preparing for the EV transition. Its first electric motorcycle is

production-ready

VECV update



VECV maintained its industry-beating growth trajectory in Q1FY26, with volumes

up 9.7% YoY and revenue growth of 11.8%, outperforming broader CV sector

trends. Gains were led by strong execution in the bus segment (up 15% YoY),

revival in institutional demand, and continued gains in the LMD category.



The company now commands over 36% share in the LMD truck segment, a

category where it has established dominance through robust after-sales

support, modular platforms, and rural-focused product lines. In HD trucks too,

VECV clocked its highest-ever market share at 9.1%, underscoring product

competitiveness.



EBITDA margin expanded to 9%, marking a 140bp YoY increase on the back of a

better product mix, lower discounts, and improving operating leverage.



However, PAT declined 10% YoY to INR2.9b.



VECV export volumes grew 20% YoY, and the company is scaling presence in

African, ASEAN, and Middle East markets.



Network expansion continues to be a structural driver for VECV’s

outperformance, with over 100 new service points added across Tier 2/3 cities

over the past 18 months. This has led to greater reach and higher customer

retention rates.



Endurance Technologies

Current Price INR 2,860

Buy

Click below for

Detailed Concall Transcript &

Results Update

Update on ABS and braking systems opportunity



ENDU’s current ABS capacity stands at 640k units p.a., of which it is utilizing

400k units p.a. for single-channel ABS being supplied to BAL and RE. Thus, it has

about 13% share in the current ~3m industry.



Its dual-channel ABS final testing is ongoing and the expected SOP of the same is

2QFY26. This will enable ENDU to ramp up the balance 240k-unit capacity for

dual-channel ABS.



Once ENDU receives the approval for dual channel from its core customers, it

targets to increase the capacity by another 2.4m

units p.a. by Mar’26.



MORTH has proposed a new safety requirement for 100% use of ABS on all 2Ws

above 4kw motor power w.e.f Jan’26. When this regulation is finalized and

notified, management foresees a huge opportunity for ENDU in the braking

systems business.



This would open up a market of almost 22m units of domestic 2Ws (almost 10x

growth from current levels). At this higher volume, ENDU now targets 25%

market share in ABS initially.



Further, higher ABS usage would also mean a higher requirement of disc brakes.

Given that ENDU is a market leader in 2W disc brakes (43% share in disc brake

systems and 60% share in brake discs), it is likely to emerge as a major

beneficiary.

August 2025

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AUTOMOBILE | Voices

Management is confident that this regulation will come, even if it is with a lag.

Hence, it has already started investing in capacity additions to take the benefit

of this opportunity.



As a result, ENDU is planning to increase its disc brake capacity at Waluj and

increase its capacity in the Chennai plant (for disc brake assembly) to cater to

South-based customers like TVS, RE and Yamaha. These new capacities are likely

to come on stream by Mar’26.

Snapshot of order wins in 1QFY26

–

excl. BAL



ENDU won orders worth INR2.5b in 1Q, of which INR2.47b were new orders

(excluding the INR3b p.a. battery pack order). It has received these orders from

OEMs like RE, TVS and MM.



Cumulative EV orders so far stand at INR8.6b; including BAL, they stands at

INR10.2b.



Overall, total order wins since 2021 stand at INR49.5b, of which new business

accounts for INR39.8b. Of these orders, INR14b worth of orders have seen SOP

in FY25, another INR11.5b will see SOP in FY26 and the balance would

commence in FY27-FY28.



For EVs, ENDU received an INR3b order for 4W EVs from four renowned

international customers, including Valeo and Yazaki.

Update on suspensions



ENDU remains the market leader in 2W/3W suspensions in India.



In 2W inverted front forks, ENDU is by far the market leader. It is already a big

supplier to BAL and KTM and has received orders from TVS and HMCL. Recently,

it has also won a new order from a leading Chinese 2W OEM for inverted front

forks and rear mono shocks. SOP for this order is likely to start in 3Q-4QFY26

and is likely to peak in FY27.



Further, supplies for KTM had sharply reduced in the recent past. With BAL

taking over KTM, supplies are expected to normalize in the coming quarters.



It has now tied up with a Korean entity for the entry into 4W suspensions in

India and is actively pursuing new business with multiple OEMs.

Update on Al forgings opportunity



ENDU had started this product as a backward integration option for inverted

front forks. This is now evolving as a good business opportunity in different

segments.



The JLR order is expected to commence in Jan’26.



ENDU has also recently received an order from RE and HMCL for the supply of Al

forgings.



It now sees this as a key area for future growth.



ENDU is setting up a new plant for this business and expects to relocate the

current setup in the new plant.

Update on Transmissions business



ENDU has received an order from HMCL to supply 100k units of clutches per

month, for which SOP will begin in 4QFY26.



Similarly, it has received an order for the first slip assistance clutch (in

partnership with Adler) from RE, which will start from Sep’25.



ENDU has also received its first order for 4W drive shafts, for which testing has

already begun.



August 2025

26

AUTOMOBILE | Voices

Update on first order in 4W brakes



ENDU has won its first order for 4W drum brakes from TTMT, for which SOP will

start in 4QFY26.



Although it is a small order worth INR250m pa, it is critical as it marks ENDU’s

entry into this segment with a huge opportunity for growth in the long run.



It aims to get into advanced braking systems like ESP in collaboration with BWI.

However, ENDU is cognizant of the fact that the lead time is high in such safety-

critical products for 4Ws.

Update on Maxwell



In 1QFY26, ENDU purchased the remaining 38.5% stake in Maxwell and now

owns 100% of the company.



At Maxwell, ENDU is getting BMS orders for motorcycles, 3Ws, tractors and EVs

used in airports for cargo handling.



ENDU is working on orders worth INR1.56b at Maxwell, which are expected to

reach a peak by 1QFY27. It is also working on further leads worth INR1.5b.



For the same, ENDU is setting up two high-speed surface-mounted lines.

Update in Maharashtra Incentive



The company has received an eligibility certificate to apply for Maharashtra

government incentives worth INR6.06b for capex incurred as of FY25. As a

result, ENDU has booked an incentive of INR329.1m in 1Q.



ENDU would look to apply for the eligibility certificate to receive incentives for

capex incurred in FY26 soon.

Update on Europe



ENDU has

consolidated Stoferle in Apr’25. Stoferle revenue stood at EUR22.9m

in 1Q and EBITDA at EUR4.5m, translating into EBITDA margin of 19.6%.



The market outlook for Europe continues to be challenging.



Further, most regions are awaiting the government’s stance

on EVs, which is

also leading to a postponement in purchases by customers. Spain is the only

market that is growing in double digits as its government has introduced

incentives for EVs.



In Europe, ENDU has won a new order worth EUR2m for a specialty plastics unit

in EVs.



The total cumulative order book stands at EUR231m, with EUR196m of new

orders. Of these orders, SOP for orders of EUR65m started in FY25 and SOP for

EUR35m will begin in FY26. SOP for the bulk of the remaining orders is expected

in the next two years.

Update on new capacity addition and capex guidance



ENDU has so far incurred a capex of INR2.86b in 1Q.



It intends to invest INR8b in the standalone entity in FY26 and the capex is

unlikely to reduce even in FY27 given that ENDU foresees significant growth

opportunities in different segments.



From the Auric Shendra plant, ENDU has already received orders from Valeo to

supply motor housings, which would eventually be used in M&M EVs. In this die

casting facility, ENDU targets to have capacity from 1,100t-2,500t of castings.

SOP for the same is expected in 4QFY26.



Investments in the 2W alloy wheel facility at Auric (Bidkin) is also on track with a

planned capacity to produce 3.6m units p.a., which is almost fully booked. SOP

for this is expected

in Aug’25.

August 2025

27

AUTOMOBILE | Voices

Escorts Kubota

Current Price INR 3,624



Neutral

Click below for

Detailed Concall Transcript &

Results Update



















Domestic tractor industry

volumes grew 9% YoY to 286k units in 1Q, with North

and Central regions slightly up 0.5% and the rest of India substantially up by

19.3%. However, domestic volumes fell 2% YoY to 28,848 units with a market

share of 10.5%. Dealer inventory currently stands at ~five weeks.

Export grew strongly by 80% YoY to 1.7k units on a low base. Exports make up

~6% of ESCORTS’ total volumes. Tractor export growth guidance stands at 25-

30% in FY26, led by new product launches and Kubota network access. Exports

through Kubota’s

global network formed 52% of total export volumes.

Domestic tractor outlook:

2HFY25 saw 15% YoY growth in tractors. Given this

high base, management expects the industry to remain flat or post marginal

growth in 2HFY26. Hence, management expects the tractor industry to post 4-

5% YoY growth in FY26. Also, the outperformance of ESCORTS weak markets,

South and West, is likely to cease in 2H as it will be in the base. Hence, ESCORTS

expects to marginally outperform the industry or grow in line in 2H. Overall,

ESCORTS expects to post some growth in tractor volumes for FY26.

ESCORTS launched the PROMAXX series under the Farmtrac brand (30-50 HP) to

strengthen its presence in Gujarat, Maharashtra, Chhattisgarh, Odisha, and MP.

It has recently launched the Kubota MU series in the 41-50HP category, and its

effect will be seen from 2Q. The Wetland series will be launched in the coming

quarters under the Powertrac brand.

Kubota currently operates predominantly in the South region, whereas Farmtrac

operates in the North region. Current focus is to strengthen weaker markets for

each of the brands to grow the overall brand of ESCORTS.

Non-tractor revenue (spares, engines, implements) contributed ~21% of agri

machinery revenue. Farm implement revenue stood at ~INR6b in FY25, with

expectations to grow further this fiscal. Harvester sales grew >30% YoY;

however, as these are currently imported, margins remain under pressure.

Localization efforts are underway and expected to support margin improvement

in the medium term.

Construction Equipment:

CE revenue declined 21% YoY to INR30.1b. Volume

declined 24% YoY, which led to margin pressure. EBIT margin fell to ~5.8% (from

~10% YoY). Three new product launches are planned to revive growth in

2HFY26. Crane segment outperformed the industry, resulting in market share

gain of 150bp to 41%, and mini excavators gained strong traction of 600+bp YoY,

reaching ~19% market share.

Railway Equipment

(discontinued operations): ESCORTS completed the sale of

its Railway Equipment division to Sona Comstar for INR16b, resulting in a one-

time post-tax gain of INR10b.

The company also sold ~33,000 sq. yards of land for INR1.1b to Sona Comstar,

where its spare parts operations were housed (now being relocated), and

received an exceptional gain of ~INR759m.

Greenfield plant:

ESCORTS is pursuing a greenfield expansion plan and is

evaluating land acquisition in Uttar Pradesh, following the cancellation of its

Rajasthan facility plans. There have been delays in acquiring the land from the

farmers by the UP government; however, this should be resolved in the next

month or so. Management expects to close out the acquisition by FY26 end

after conducting the required due diligence on the land.

August 2025

28

AUTOMOBILE | Voices

Happy Forgings

Current Price INR 949

Buy

Click below for

Detailed Concall Transcript &

Results Update

CV business update



CV revenue now accounts for 39% of HFL’s total revenue vs. 42% earlier. CV

revenue declined in mid-single digits YoY in 1QFY26, impacted by demand

weakness in Europe. CV OEMs in Europe reported ~8-10% YoY volume drop this

quarter, falling for eight consecutive quarters. Further, India MHCV segment

production was flat, while sales declined by 4% YoY in 1Q.



Despite new order wins, HFL was able to only marginally outperform CV industry

growth in 1Q due to the loss of market share for one of its key OEMs in the

segment.



It has a healthy pipeline of orders for future quarters, which includes one large

order for CV crankshafts. Additionally, HFL has negotiated a deal with a CV client

who is setting up a complete transmission plant in India. This deal is expected to

boost volumes in the future.



Management expects to outperform the domestic CV industry in 2H on the back

of its new order wins. Revenue growth guidance for domestic CVs stands at high

single digits.



CV exports currently make up close to 50% of HFL’s total exports (~9-10%

of

total revenue). CV outlook in Europe remains weak, with expectation of 10%

decline in CV production in CY25.

Tractor business update



Farm equipment accounted for ~32% of total 1Q revenue (flat YoY). Domestic

tractor sales grew 9% YoY (production up 13%), supported by a good monsoon

outlook and improving rural sentiment. However, HFL has slightly

underperformed the industry growth in 1Q. Management indicated that it is

likely to be due to OEM-specific issues.



Considering positive rural sentiment, HFL expects the momentum in the

domestic tractor industry to sustain at least till Diwali. Overall, it expects the

industry to post 4-7% growth in FY26.



However, the US and Europe markets declined in high single digits. Large OEMs

expect a 5-15% volume drop in CY25.



The direct export segment makes up only 1% of total revenue. However, total

tractor exports (indirect/deemed) contributed to close to 10% of revenue.

Despite the decline in end markets, HFL’ CV export revenue remained flat YoY.



In 1Q, HFL won new orders from two large European OEMs, including an order

worth INR2.5b (INR500-600m p.a.) from the largest tractor OEM in Europe. HFL

is in an advanced stage of getting another order from another large European

OEM. Given the ongoing tariff issues, these are expected to be direct export

orders for HFL.

OHV business update



OHV contributed ~10% of total 1Q revenues. This segment saw mid-single-digit

YoY decline due to soft demand in India and globally. Domestic construction

equipment industry fell in mid-single digits on delays in road, mining, and

infrastructure projects; Europe/US markets dropped 10-12%.

PVs business update



PV contribution rose to 6% of total 1Q revenue (vs. 3% in 1QFY25), driven by the

ramp-up of dedicated lines for key SUV platforms. This remains its key growth

29

August 2025

AUTOMOBILE | Voices

driver and is on track to reach 8-10% of revenue in two years, with a planned

scale-up and capacity expansion (INR800m planned in FY26).



Direct exports to the US contribute to about 3-4% of revenue. However, current

orders are such that the tariff impact will be borne by OEMs, as per

management. Thus, while HFL does not see any tariff-related impact on PV

segment, the resultant slowdown due to this measure is a real risk that needs to

be monitored going forward.



HFL is also working on a few new products for its North American customers on

the suspensions side.

Industrial business update



The Industrial segment’s contribution

stood at 13% of total 1Q revenue, with

strong growth led by domestic demand in wind energy, power generation and

oil and gas sectors.



Industrial exports contributed to about 5-6% of revenue.



Growth is expected to accelerate after the commissioning of the INR6.5b heavy-

press capacity in FY27, which will cater to high-value, large-sized components

for oil & gas, defense, marine, mining, wind, and power generation, with ASPs

expected to rise and margins above current levels. While HFL is getting a lot of

enquiries, global OEMs are waiting for this plant to be commissioned before

awarding HFL new orders.



A key order win was an INR6b deal for wind energy installation. The SOP for this

would be Jan’26. The wind shafts used for this order range around

150-300kg.

Another large order of INR1.8b for fully machined products for data centers is in

the pipeline as well, for which capex is ongoing. In defense, HFL has started

participating in tenders and quoted for certain projects.

Update on capex



A 6,300-ton press commissioned in FY25; a 4,000-ton press under installation for

PV orders. Another 10k-ton press would be installed in FY26. After this, capacity

would increase to ~150k MT p.a.



Forgings utilization stands at 59% in tonnage terms and it has another 18-20%

capacity available for growth. The utilization of the 14k T press stands at 46-

48%.



The planned capex for FY26 stands at INR3b, excluding the solar plant

investment (INR600-700m for solar CPP with four acres of land already bought).

INR1.2b has already been invested in capex in 1Q.

Hero MotoCorp

Current Price INR 5,136

Buy

Click below for

Detailed Concall Transcript &

Results Update

Domestic 2Ws

–

industry update



The company had taken a planned shutdown in four plants (Daruhera,

Neemrana, Gurgaon, and Haridwar) in April for around five days to resolve

supply chain issues. HMCL also timed this with the maintenance activity. The

impact of this shutdown was felt this quarter with lower volumes reported

(down 11% YoY); however, the numbers have since normalized.



The domestic 2W industry saw a mixed performance in the first four months of

FY26. April and May saw strong growth driven by the marriage season and

improved rural demand outpacing urban. However, momentum slowed in the

months of June and July, primarily due to the early onset of the monsoon.

August 2025

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AUTOMOBILE | Voices

HMCL’s retail 2W market share in 1Q improved 100bp QoQ to 30.9%, driven by

strong performance in entry and 125cc segments.



Despite the recent slowdown, HMCL expects a rebound in demand during the

upcoming festive season, supported by positive macro conditions such as lower

inflation, the RBI rate cuts, and a favorable monsoon. Management maintains its

6-7% volume growth guidance for the industry and expects to outperform

industry growth on the back of its new launch pipeline.



Management has indicated that there should not be any material net cost

increase QoQ in 2Q as the slight increase seen in input costs is likely to be offset

by price hikes and cost savings. Margin guidance maintained at 14-16% over the

long term, however, the same is likely to be at the lower end of the band in the

near term.



New launches for HMCL include two 125cc motorcycles planned for 2Q, Xoom

160, cosmetic refreshes in Xtreme 125R to reignite interest, and one new

launche from the Harley partnership.



In the 100cc segment, they launched an upgraded HF Deluxe Pro, which has led

to an 800bp improvement in market share in the entry-level segment. With

multiple segment-first features, HMCL plans to blend affordability and

aspiration in the entry segment with the launch of this model.



While the sporty 125cc segment faced headwinds at an industry level, Xtreme

125 continues to gain share in this segment.



ICE scooter market share improved sequentially to 6%, led by the successful

launches of Destini 125 and Xoom 125. It hopes to further improve the share

with the upcoming launch of the Xoom 160.



HMCL is scaling up its Premia channel, which currently stands at ~125 stores

covering 45% of its premium industry footprint.

Update on EVs



EV business witnessed a robust scale-up, achieving its highest ever EV market

share of 7% (doubling YoY). It has further improved to ~10% in July, led by

strong customer traction for the VIDA product range.



The launch of VIDA VX2 in July marked a move towards the Battery as a Service

(Baas) model, which is an industry first. This is expected to reduce the upfront

TCO for EVs with customers paying a fixed per-kilometer rate for batteries, and

thereby attracting new customers and driving EV adoption. Their subscription

plans would be based on customer usage patterns. The Vida VX2 Go is planned

to launch with a 2/3 year battery subscription plan, while the VX2 Plus will

incorporate a 2/3/5 year subscription plan.



HMCL’s EVs are now available in 600+ touchpoints across 400+ cities.



The company received PLI certification for the VIDA V2 Pro in July and is working

to secure the same for other models.



Despite industry-wide concerns for rare earth supply, management has stated

that it has secured supply requirements for 2Q for both ICE and EV models, and

is continuing to work on long-term alternatives.

Update on Exports



Global business continued its robust performance with a 27% increase in YoY

dispatch in Q1, with an even stronger retail growth. Currently, it is focused on

10-12 key global markets with tailored products aligned to the specific needs

and preferences of the customers.



August 2025

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AUTOMOBILE | Voices

They plan to grow exports by 40% in FY26, with a target of 10% of total

revenues and volumes from their global business in the medium term.

Other Highlights



HeroFincorp's financing penetration had dipped in 1Q primarily due to

seasonality, as 1Q demand is largely driven by the marriage season with cash

purchases. However, its finance penetration has normalized back to ~65% in

July. However, elevated NPAs and rising credit costs have led to a loss at HFCL in

1Q. However, this is likely to reverse with the reduction in interest rates, as per

management. HeroFincorp loan book currently sits at INR54.73b.



Inventory is currently sitting at ~7 weeks and is expected to build further ahead

of the festive season.



First-time buyer share increased to ~74% in 1Q, from 71% earlier.



The Government has floated a draft proposal making ABS mandatory for all

scooters above 50cc, EVs above 4kWh, and motorcycles above 100cc from June

2026. This is likely to dampen demand given the likely cost increase. However,

OEMs are working with regulators to propose alternative safety solutions with

realistic implementation timelines.



Hyundai Motor

Current Price INR 2,485



Buy

Click below for

Detailed Concall Transcript &

Results Update





















Revenue: Sales have declined 6.1% YoY, but exports have shown a growth of

13% YoY, contributing to 27% of the mix.

Exports to Africa grew 28% YoY, and exports to Mexico rose 14% YoY.

Management has indicated that HMI’s exports in 1H are better than in 2H.

Exports growth guidance has been maintained at 6-7% for FY26E.

Exports ASP is down QoQ as the company received a few fleet orders for

Aura/Verna, for which HMI had to offer some discounts

Demand: Domestic PV demand remains challenging. June has been the lowest

TIV month for the last 30 months (excluding December). Management is hopeful

of a pickup in demand due to the 100bp interest rate cut, the upcoming festive

season, and healthy monsoons.

Average discounts in 1Q stood at 3.4% of ASP, up from 2% in 4Q

Volume mix: SUVs have continued to gain traction and stood at 69% of total

sales.

Fuel mix: Highest ever CNG mix at 16% (from 11.4% earlier), driven by dual

cylinder technology and other product interventions on CNG. EV contribution

stood at 1.4% in 1Q. Model-wise CNG mix: Aura: 89%, Exter: 30%, Nios: 18%.

Increase of CNG and EVs in the product mix has helped the company achieve

CAFÉ norms. HMI’s CAFÉ target for 1Q was 117.286, and the company managed

to achieve 112.856.

Rural contribution for HMI stands at 22.6% compared to 19.9% in 1QFY25 and

20.9% for FY25 as a whole. SUV penetration, even in rural regions, stood at

68.8% for HMI.

First-time buyer mix for HMI has gone from 32% in 2022 to 40% in 2025. For

Creta, the same stands at 32% and for Venue at 45%

Customer Base: 44% of HMI customers are salaried employees, and 16% of

them are Government employees. Thus, HMI expects to be among the major

beneficiaries of the upcoming pay commission payouts.

August 2025

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AUTOMOBILE | Voices







About 47% of HMI’s network is in rural regions. In order to increase its rural

penetration, every 7 in 10 new outlets are being opened in rural regions by HMI.

HMI is now present in 75% of the districts in India

Localization: The localization levels have reached 82% currently (localized

sunroof last year) from 78% in 2024. Management will continue to work on

many localization opportunities, especially in EVs

Pune plant (Talegaon): Engine production has started in mid-June this quarter.

The car assembly capacity setup for production of ICE and EVs is expected to

commence in 3Q.

Mahindra & Mahindra

Current Price INR 3,394

Buy

Click below for

Detailed Concall Transcript &

Results Update

Auto update



In SUVs, MM posted a robust 22% YoY growth to 152k units despite a weak

demand environment.



In the auto segment, its revenue market share improved 570bp to 27.3% in 1Q.

Also, their LCV share (<3.5T segment) has improved by 340bp YoY to 54.2%



E-SUV

penetration for MM stood at 7.8% vs. 5.6% for the industry. MM’s E SUV

market share improved to 31.8% after the launch of its new BEVs.



MM continues to maintain its leadership in 3W EVs with a 38.7% share



A new multi-energy platform that will support petrol, diesel, hybrid, and EV

variants will be unveiled on August 15, 2025. It is currently scouting for a

location to set up a greenfield for the same.



ICE SUV capacity stood at 55k units, and the utilization was around 80%. EV sales

are expected to ramp up to 5-6k units by the festive season. It expects these to

ramp up further after the new launches scheduled for Jan’26. MM plans to

launch seven BEVs by 2030, with two slated for debut in 2026.



MM continues to maintain its growth guidance of mid-to-high teens for UVs in

FY26E on the back of healthy traction seen for most of its models.



It expects rising steel prices to drive cost inflation in the coming quarters.



MM has not accrued PLI benefit in 1Q and expects to receive its final PLI

certification for the XE 9E by 2Q-3QFY26. It hopes to apply for the same for BE

6E in 4QFY26.



MM has an adequate rare earth inventory, at least for the next two quarters,

and hence it does not expect any production disruption. It has explored

substitutes such as light earths and ferrites as alternates for rare earth

materials.



MM would continue to invest in brand, channel, and market creation in key

export markets. The launch of XUV 3XO in South Africa has received a very good

response. They have also recently launched the same model in Australia. In

South Africa, they are already amongst the top 10 OEMs and amongst the

fastest growing in the region.

FES segment update



MM’s 1Q volume grew 10% YoY to 133k

units.



Tractor share also improved 50bp to 45.2%.



The farm machinery business has delivered 17% YoY growth to INR3.1b in

revenues. It has now changed its strategy in this business to reasonable growth

August 2025

33

AUTOMOBILE | Voices

without diluting margins. In the rotavator segment, its market share now stands

at 25%. Further, it has now reached a 5-6% share in the harvester business. The

company is now happy with the current run-rate in this business.

The consolidated farm segment has posted just 6% EBIT growth due to the

impairment taken on its subsidiary Sampo (Finland). Management has taken

impairments in this entity in 4Q as well, but it doesn’t expect the same to

continue going forward. Ex-impairments, Farm EBIT growth (consol) would have

been 18%

On TremV, an expert panel has been in place, and they have recommended

implementing the same based on segments. However, management awaits

clarity on the timeline of implementation.





Maruti Suzuki

Current Price INR 14,212



Buy

Click below for

Detailed Concall Transcript &

Results Update



















Industry outlook:

Domestic PVs saw weak demand in 1Q (down 1.4% YoY), as

the participation of first-time buyers has declined mainly due to affordability

issues, especially in the entry-level cars. However, management is hopeful of a

demand revival in PVs in 2Q-3Q, led by the festive season and positive rural

sentiment. Management expects to outperform industry growth on the back of

two SUV launches coming up in 2Q.

The company has two launches lined up for FY26 in the SUV segment, of which

one will in the EV segment and the other in the non-EV segment.

Consumer preference continues to shift toward SUVs and MPVs, which led to an

increase in the SUV mix to 55% and MPVs to 11% of total sales in the industry.

Retail sales stood at 380k units and were down 3.7% YoY, lower than

wholesales.

Inventory and discounts:

Dealer inventory by 1Q end for MSIL was normal at 33

days. Discounts remained flat on a per-vehicle basis QoQ, whereas peers saw a

rise in discounting QoQ.

Rural-urban mix:

Rural markets continue to perform better than urban markets

due to the early onset of monsoons.

For MSIL, CNG mix stands at around one-third.

Exports:

MSIL posted strong 37% YoY growth in exports in 1Q, while the industry

(excl. MSIL) saw a 2% decline. Export mix improved to 18% for MSIL. Japan

becomes MSIL’s second-largest

export market, with models like Fronx and Jimny

seeing strong demand. Management expects its export momentum to improve

further with the launch of e-Vitara, which is slated to be launched in around 100

regions globally. Export revenue stood at INR65b in 1Q.

While Grand Vitara volumes have declined in the recent past, MSIL is optimistic

about its volume pick-up with the launch of the CNG upgrade.

Business performance:

Positive factors contributing to the margins were

favorable mix (30bp) and lower advertisement cost (60bp). On the other hand,

negative factors that led to margin pressure were: Impact of Kharkhoda

greenfield plant (30bp), adverse commodity prices - Steel (40bp), unfavorable

operating leverage (60bp), forex (40bp) and higher employee expenses (50bp)

on account of seasonality. Further, lumpy costs in 4Q (90bp) were reversed in

1Q, on expected lines.

August 2025

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AUTOMOBILE | Voices











Higher non-operating income:

Other income significantly increased due to

MTM gain on forex and commodity hedges and prudent treasury management.

SMG has accrued interest income of INR400m from its investments.

FY26 capex guidance is unchanged at INR100b.

MSIL expects CAFÉ norms to be finalized in the next couple of months so that

OEMs can prepare for them, which will be implemented in Apr’27. Given the

multiple supply chain/infrastructure challenges in EV transition, a multi-fuel

approach to meet CAFÉ norms is likely to be the best way forward, as per

management.

Availability of rare earth magnets remains a challenge for the industry,

including MSIL, and the company is managing its supplies so far.

Motherson Wiring

Current Price INR 43



Buy

Click below for

Results Update











Revenue grew 14% YoY to INR24.9b on the back of the commencement of two

new greenfields. Excl. these greenfields, revenue was up 7% YoY, ahead of PV

industry growth of 3% YoY, reflecting strong content growth and presence in

new model launches. Both PV and 2W segments saw weak demand in 1Q.

However, management indicated that MUSMI has presence in several new

upcoming launches even in the 2W and PV segments.

Revenue contribution from greenfields stood at INR1.56b in 1Q. Of the three

greenfields, the Maharashtra and Gujarat plants have commenced operations,

while Haryana is expected to commence from 2Q onwards. The ramp-up of both

Gujarat and Maharashtra greenfields has been delayed due to delays at

customer end amid the shortage of supplies of rare earth magnets due to a

delay in approvals from China.

All three plants together are likely to have employee strength of ~7k at peak

production.

The jump in staff costs in 1Q was due to the addition of employees at these

greenfields.

The share of EVs in revenue increased to 5.4% in 1QFY26. In PVs, content

increase in EVs is 1.5-1.7x higher than in ICE, as per management.

Capex guidance for FY26 stands at INR2b.

Samvardhana Motherson

Current Price INR 98



Buy

Click below for

Results Update





EBITDA margin stood at 8.1% (vs. 9.6% YoY), reflecting structural challenges in

Western/Central Europe, FX volatility, geopolitical tensions and greenfield start-

up costs. Management believes that this impact is transient in nature and

expects a much better performance in 2H and FY27 once the impact of its cost-

cutting measures (mainly in modules and polymers business) is visible and the

greenfields ramp up (Consumer Electronics).

Emerging business margins declined 380b YoY to 8.4% due to: 1) start-up costs

of greenfields at Consumer Electronics division; 2) seasonally weak quarter for

aerospace division, CVs and metals; 3) integration of Atsumitec, which is margin-

dilutive, but the performance would start improving as integration benefits kick-

in in the coming quarters

Three greenfield plants were operationalized in 1QFY26 (two automotive, one

non-automotive); 11 more are under various stages of completion. Consumer

Electronics greenfield (phase 1) received customer approval in 2QFY26, with

production schedules awaited. Other SOPs include Wiring Harness (2QFY26),

35

August 2025

AUTOMOBILE | Voices

Technology & Industrial Solutions (4QFY26), Aerospace (two plants in 4QFY26),

and multiple Modules/Elastomer facilities in FY27.

The second facility in the Consumer Electronics division is expected to

commence production in a couple of weeks. These two facilities together would

ramp up to 16-17mn units p.a. by FY26 end. This will position the segment as a

key growth driver in the company’s non-automotive

portfolio. SAMIL has not

seen any reduction in orders from OEMs in this business despite the uncertainty

around US tariffs.

Capex guidance is maintained at INR60b for FY26 aimed at capacity addition and

backward integration, which should aid margins in the future. Additionally,

SAMIL is undertaking certain business transformative measures in Europe to

realign operations to the challenging macro, which should drive cost savings

worth EUR50m p.a. once fully completed over the next three years.

The direct impact of US tariffs on SAMIL is minimal as most of its products

supplied to USA are USMCA-compliant and for the non-USMCA compliant parts,

discussions with OEMs are ongoing for the pass-through of these costs.







SONA BLW Precision

Current Price INR 450

Neutral

Click below for

Detailed Concall Transcript &

Results Update

Update on new order wins



Sona has added a single largest order worth INR15.5b in last 2.5 years from a

legacy North American OEM of EV PVs for its upcoming EV platform, which is

likely to commence in 3QFY28. The order is for the supplies of differential

assemblies with final drive gear.



It has also won a large order worth INR2.6b from Indian OEM of 2W and 3Ws for

the supply of traction motors, and production is expected to commence in

4QFY26.



The net order book now stands at INR262b, of which 75% is EV mix.



Production from Novelic is expected to start from FY27 onward for an EV

customer in cabin sensing. This product is powertrain-agnostic.

Update on China JV



Sona has recently signed a term sheet to form a JV with JNT to enter the China

market. While Sona will take a majority 60% stake in the USD20m JV, JNT will

take over operational responsibilities. Combining the strength of both partners

and confirmed orders from OEMs, Sona aims to be one of the key suppliers of

driveline systems in China. This JV is set to commence operations from 2HFY26

and would supply to both EV and non EV customers.



Sona does not intend to manufacture differential gears in China. It will make

them in India and assemble them in China.

Update on Railways division



The company has consolidated this business for about three weeks in 1Q.



It is a market leader in brake system in Indian Railways. Sona has identified

opportunities to add new segments and hence would focus on strong growth

over the next 4-5 years.

Update on supply constraints due to rare earth magnets



Traction motors business saw some impact due to the shortage of rare earth

magnets.



It has not identified light earth substitutes for these heavy earth magnets, which

can be used for motors up to 15 kw.



For larger motors, Sona would still be dependent on heavy earth material. Also,

one has to note that while Sona has been able to find alternatives in light earth

materials, supply of such material is also controlled by China.

36

August 2025

AUTOMOBILE | Voices

Sona is now back to normal production levels in July with alternate supply

arrangements. In traction motors, most of its business comes from 2Ws, which

have up to 2kw motor.

Other highlights



Sona’s plans to ramp-up

production in Mexico remain on track despite the tariff-

led uncertainty as these were for specific parts as required by OEM.



Its earlier margin guidance stood at 25-27%. With the merger of the Railway

business, which is estimated to

have 18% margin, Sona’s margins are likely to

fall to the 23-25% range.



Its key growth driver in China has been suspension motor supplies to Neo, for

which production commenced in Mar’25.



Tata Motors

Current Price INR 690

Click below for

Detailed Concall Transcript &

Results Update

Neutral

Tata CV business



Overall domestic CV retail market share improved 50bp QoQ to 36.1% in 1Q.



Margins remained strong at 12.2% (flat QoQ and +60bp YoY), led by better ASP,

higher exports and higher share of non CV sales.



PLI accrual stood at INR250m in 1Q.



In terms of lead indicators, utilization of fleet has remained healthy. However,

utilization has seen a dip in each segment in recent months due to the early

onset of monsoon. As a result, the sentiment index in MCVs, tippers and SCV

dropped, while ILCVs held up well. However, fleet operator profitability for long-

haul freight remains healthy as freight rates have inched up in the recent past.



TTMT has transitioned to AC driver cabins for the entire mix and complemented

its trucks with a higher power-to-weight ratio for improved value to customers.

Management indicated that TTMT has not seen any pick up in volumes due to

pre-buying in 1Q.



Management expects CV industry to post single-digit volume growth in 2Q over

a low base. Further, with normal monsoon and festive season build-up, TTMT

expects CV demand to pick up in 2H. Hence, TTMT maintains its 5% volume

growth guidance for the industry for FY26. Within segments, TTMT expects

HCVs to post 3-5% growth, ILCVs a bit lower, and SCVs to remain flat.



TTMT has recently launched Ace Pro EV in 10 cities, which has been well

accepted. It is the most affordable SCV truck having better TCO than even 3W

EVs with EMI equal to 3W EVs. TTMT’s ACE Pro has qualified for PLI.

Tata Motors PV business:



Industry demand has remained weak in 1Q. TTMT has lost 50bp market share in

retail PVs in 1Q.



In terms of segmental demand trends, the <INR1m models are seeing about

15% YoY decline in volumes and this is where discounts continue to be elevated.

TTMT has recently started seeing flat trends in SUVs. CNG segment continues to

do well with 20% growth in 1Q.



Given a

healthy mix of EVs and CNG in its portfolio, TTMT’s emissions are well

below the mandated CAFÉ norms currently for the current fiscal.



PV EBITDA margins were down 180bp YoY at 4% due to weak demand, higher

input costs, higher promotional spends (IPL) and higher discounting pressure.

There have been periods where inventory was higher than normal levels due to

lower than expected demand, which in turn led to higher discounts.



EV business has delivered positive EBITDA margin with PLI accruals. With

improving mix in the coming quarters led by new launches, this is likely to

further inch up in coming quarters.

August 2025

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On rare-earth magnet supplies, management has indicated that TTMT is well

covered for the next 2-3 months of requirements.



For CAFÉ 3 guidelines, while the government is in discussions with the industry

for the extent of stringency, the timeline for the same is unlikely to change.



PLI accrual for 1Q has been INR870m and TTMT is on track to accrue INR7b

worth of PLI for FY26.



Some of the product actions TTMT has taken to overcome weak demand

conditions include: 1) product interventions in Harrier and Safari at competitive

price points 2) strong marketing campaigns, and 3) introduction of life-time

warranty in EV products like Nexon and Currv. This has helped to drive a 55%

rise in bookings for these 2 models in July over 1Q and a 40% jump in July retails

over 1Q. This has also helped to improve its Vahan market share in EVs to 40%

for July and the same is set to improve to 50% levels in coming quarters on the

back of upcoming new launches.



Harrier EV has seen a blockbuster launch with as high as 10k bookings on Day 1

of its launch. The model boasts of rich features, which include Dolby experience,

540-degree view, auto parking, all-wheel drive, 500km real range, etc. These

features come at an extremely competitive price point with the EV positioned at

similar price point to its ICE variant. With the launch of the Harrier EV, TTMT

expects its EV mix to increase to 17% in 2Q.



Sierra EV is also on track for launch in 2H.



TTMT continues to expect low single-digit growth in PVs in FY26. Even to

achieve this, demand will need to pick up in the festive season and 2H, given

that the first four months have seen flat retail demand with a 3% fall in last two

months.



ICE margin is likely to remain under pressure in the near term. However, with

pickup in demand, management expects ICE margins to revive in the medium

term. TTMT remains committed to achieving double-digit EBITDA margin in the

long run in PV segment.

Other highlights



The overall India business (PV + CV) recorded free cash outflow of INR38b in 1Q

post capex of INR22b.



At a consolidated level, the net automotive debt has increased to INR135b from

a net cash position of INR10b QoQ. Bulk of this net debt has increased at JLR and

stands at INR106b.



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.



JLR: Key takeaways from the management commentary

Result Highlights

–

JLR



Overall, 77% of JLR’s mix comprised RR, RRS and Defender



As a result, ASP per unit improved to all-time high of ~GBP76k, up 1.7% YoY. 1Q

wholesale volumes declined 10% YoY to 87k units following a temporary pause

in shipments to the US in April and planned wind-down of legacy Jaguar models.



Retails declined 15% YoY to 94k units.



Overall revenue declined 9% YoY to GBP6.6b.



EBIT margin declined 490bp YoY to a multi-quarter low of 4%. The sharp margin

impact was a function of: 1) weak volumes, partially offset by an improved mix

(impact of GBP82m), US tariff impact for two months (GBP254m), higher VME

spends (up 90bp YoY to 4.1%, impact GBP38m), higher warranty (up GBP144m)

and adverse currency movement (GBP205m).

August 2025

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JLR has invested GBP864m in capex in 1Q. Due to weak margins and adverse

working capital (impact GBP616m), free cash outflow was GBP758m in 1Q.



JLR has paid a dividend of GBP448m to TTMT in May’25.

JLR update



Luxury demand globally has been weak given the tariff led uncertainty in key

regions. However, once the tariffs are set, management expects the uncertainty

to go away, and hence, demand would reset to the new normal. In terms of

region-wise demand, US demand continues to be strong and UK is stable.

However, Europe remains uncertain and China has been weak due to the

additional tax on luxury vehicles. BEV demand is not rising outside China.

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Management has maintained JLR’s FY26 EBIT margin guidance at 5-7%

with near

nil FCF

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JLR has segregated MENA as a separate region as TTMT is now seeing a strong

demand pull for RR, Defender, etc. However, demand in 1Q was muted due to

the ongoing conflict in the region.

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CAFÉ penalties were reduced to nil in the US (benefit of GBP76m), which also

helped to release balance sheet reserves (GBP120m).

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For 1Q, JLR assumed tariffs at 27.5% (2.5% + 25%) for exports to the US from the

UK and Europe. Tariffs are paid with a month of lag, and hence TTMT has paid

tariffs for two months in 1Q. The tariff impact is reflected in cost of sales.



After the recent trade deals, US tariffs for UK exports are expected to reduce to

10% and the same for Europe to 15%. However, TTMT is yet to receive the

official confirmation.



Assuming the tariff stands at 10-15% for the UK and Europe as per the trade

deals, management expects the tariff impact of GBP300-400m in FY26.

However, this would also depend on how market reacts to such tariff impact in

terms of both pricing and demand.

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The UK will be able to export 100k units p.a. to the US. However, since the US-

UK trade deal is effective

from May’25, the quota for 2025 for UK exports to the

US stands at 65,200 vehicles. Vehicle sales beyond this number would attract

25% tariff. Management has indicated that this quota is enough to cover its

expected vehicle sales to the US for 2025.

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China has raised tax rates for luxury vehicles, which has increased the tax

incidence on RR models by 10%. Given the weak demand macro in China and an

even weaker dealer profitability, JLR has decided to absorb bulk of the impact of

the same in the near term.

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Capitalization ratio now stands at a peak of 70%.

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Tube Investments

Current Price INR 3,181



Buy

Click below for

Detailed Concall Transcript &

Results Update





Engineering:

The engineering segment margins declined 60bp YoY due to cost

pass-through, which comes with a lag of 1-2 quarters. The new CRSS plant has

commenced operations in 1Q and is expected to ramp up to full capacity in a

year.

Metal Formed:

TIINDIA remains optimistic about demand pick-up in this

segment as it is a supplier to Hyundai from its upcoming new Pune plant, which

will commence operations from Oct’25. Further, in 4Q, it won a new Railways

order worth INR10b spread over seven years, which is expected to commence

from 4QFY26.

Mobility:

1Q volumes were strong due to seasonal cyclicality (school and office

resumes). Mobility margins improved sharply YoY due to good pick-up in

demand.

39

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EV segment:

As of 1QFY26, EV volumes stood at 45 units for big trucks (vs. 65 in

4Q), 1668 units for 3W (vs. 1,662 in 4Q), 44 units for SCV (vs. 4 in 4Q) and 34

units for tractors (vs. 2 units last quarter). TII focuses on cost reduction,

localization and economies of scale to improve gross margins. It expects cost

reduction through in-house battery pack assembly. Currently, the EV business is

operating at low gross margins, with the operational breakeven unlikely in FY26

(as guided earlier) due to slower-than-expected scale-up so far.

Update on e-3Ws:

To tackle increasing competition, TII plans to introduce a

model refresh in 2QFY26, enter new battery sub-segments apart from the

10kWh segment it already operates in, and launch new variants in the cargo

(L5N) and e-rickshaw (L3) segments. The government is likely to implement

stringent safety regulations in the e-rik segment, which is likely to drive industry

consolidation, and TII hopes to emerge as a beneficiary of this trend. Further, it

would look to maintain its premium positioning even in the e-rik segment. Entry

into multiple 3W segments would also help to improve dealer viability. Further,

TII targets to expand from 95 currently to 125 dealerships in FY26, with

partnerships with local financiers to help with credit availability, which will help

boost volumes.

Update on e-truck segment:

TII has so far launched a 6x4 55-ton heavy-duty

truck with a 4x2 variant in the works. It expects to launch a truck in the tipper

segment. With this, TII would have a presence in the three large markets in the

truck segment. It expects to have battery swapping technology available for this

business, which is likely to help scale up this business. TII plans to apply for PLI

incentive for its e-trucks in 2Q and is confident that its products will meet the

eligibility norms.

Update on e-SCVs:

TII sold 44 electric SCVs in 1Q. It has received a very

encouraging response for e-SCVs and expects to ramp up distribution network in

the coming quarters for the same. Positioning to remain premium to drive

performance differentiation.

Capex guidance

for the standalone business for FY26 stands at INR3.5b, which

will be focused on the engineering and metal formed products segments.

Exports: Export contribution currently stands at 15% of revenues. While 2Q

orders are still on track, future visibility remains subdued given the uncertainty

around US tariffs.

Future capital allocation:

Management has indicated that TII would continue to

focus on ramping up its presence in these three key segments: TICMPL, TI and

CDMO. For any other future growth avenues, TII would look to enter through

partnerships.

TI Medical:

The company has got CE certification for most countries, while a few

are pending. It is now fully booked for 2Q export orders. However, TII is yet to

finalize a greenfield facility for the same.

CDMO business

has received environment clearance for a commercial facility.

For the semi-commercial facility, it is conducting validation batches for the first

DMF

—

likely to come out within next two quarters.

TVS Motors

Current Price INR 3,231



Neutral

Click below for

Detailed Concall Transcript &

Results Update

Domestic:

Management remains optimistic that domestic market growth

momentum will continue in FY26. 1QFY26 saw retail growth of ~9% YoY, with

rural markets slightly outperforming at ~10% YoY, supported by healthy

reservoir levels, improving agricultural outlook, and continued infrastructure

investments. The 2W domestic ICE segment grew ~8% YoY.

August 2025

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International:

2W exports grew 40% YoY against an industry growth of 23%.

Africa remains a key focus, particularly with the successful launch of the HLX 125

Five Gear variant, which has received an excellent response across the East and

West African markets. Entry into Morocco is expected to further strengthen the

brand in North Africa.

LATAM continues to perform well, with consistent MoM improvement.

Sri Lanka’s reopening and Nepal’s stability are aiding performance in Asia.

Bangladesh continues to face macroeconomic challenges, though a gradual

recovery is anticipated.

The Middle East also continues to remain resilient and consistent overall.

The company reported the highest-ever quarterly export volumes of 352k units

despite global headwinds.

Exports revenue for Q1 stood at INR24.9b.

EV:

TVS reported EV revenue of INR10b in 1QFY26. EV 2W sales grew 35% to 70k

units in 1QFY26.

2Ws:

TVS is seeing robust momentum in EVs, led by iQube, which is now

available in over 900 dealerships, with plans to scale up to 1,400. EV penetration

in the 2W industry stands at ~6.3%, and TVS is targeting structured expansion in

key markets. New variants of iQube have been launched recently, bringing the

total to six, making it one of the widest and most competitive portfolios in this

sector.

A new family scooter and other ICE & EV variants are under development for

launch later in the year.

3W:

TVS recently launched King EV Max, offering a 179 km range, quick 2-hour

15-minute charging, and advanced features for better ROI and earning potential.

The 3W category is growing faster, with penetration at 26% last quarter,

expected to rise further.

Both 2W and 3W EVs are gross margin positive.

Management has iterated that it has sufficient stock of rare earth magnets to

meet short-term demand. It is currently exploring alternatives in the short term,

apart from the resizing of larger- magnets that it is already pursuing. Over the

long term, it is looking to target HRE free ferrite-based, magnet free motors as

well as import from other countries, if possible.

Battery localization and vertical integration are being pursued to improve the

cost structure and supply chain resilience. TVS is investing in charging

infrastructure, financing, and digital retail to support EV adoption. The company

is actively working on swappable battery tech and improved connected features

for future EV launches.

TVS Credit:

The company reported a book size of INR269b, with PBT growth of

30% YoY at INR2.43b. It is working to build a diversified book, expanding product

offerings and distribution, enhancing customer experience, and improving

operational efficiency. TVS Credit disbursed loans of over 1.6m new customers,

bringing the total customer base to 20m. It will continue to focus on steady

growth by increasing market share and expanding the book size.

Capex:

Capex is expected to be in the range of INR1.6b-1.7b, with investments

in new products.

TVS will continue to invest about INR20b in subsidiaries and associates.

Norton’s product development is on track, with initial release of three products;

over a period of time, it will look to expand the range further. The products will

be launched in Q4FY26E in the Indian and European markets.

August 2025

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CAPITAL GOODS | Voices

CAPITAL GOODS

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| Voices

Management holds an optimistic view across important sectors, such as power T&D, renewable energy, data

centers, cement, steel, construction, oil & gas, and defense. Public capital spending is beginning to increase,

while private sector interest is anticipated to emerge in the upcoming quarters. The fulfillment of export orders

has increased throughout the quarter, and the outlook remains promising. In the defense industry,

management discussions continue to be very positive, predicting a surge in order inflows soon due to

emergency procurement, as well as for the medium-to-long term, driven by both base and large orders. In the

power generation sector, management believes that prices have largely settled and volumes have returned to

levels seen before the transition. The railway sector has reached its lowest point, and order placements have

risen in the first quarter, with management remarks suggesting a better outlook for the pipeline in this

industry.

KEY HIGHLIGHTS FROM CONFERENCE CALL



Cummins



Outlook

The company has guided for double-digit revenue

growth for FY26.

Margins are expected to remain steady.

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The company expects to reach USD2b by FY30

(2B2B strategy).

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KOEL





Larsen and

Toubro

The company expects FY26 order inflows to rise

10% YoY, revenue to grow 15% YoY, margin

guidance of 8.3-8.5%, and NWC-to-sales ratio of

12%.

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Thermax

Overall margin is expected to reach double digits in

FY26.

The company has guided for 2Q margin of 12-13%

for the chemicals segment, with a medium-term

target of 16-17%.

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Bharat

Electronics

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Triveni Turbine

The company has guided for FY26 order inflow of



INR270b (excluding QRSAM), with exports of

+USD120m.

It aims for revenue growth of 15% and an

EBITDA margin of >27% for FY26. Export revenue

is expected to be +10% of total revenue over the

next five years.

R&D investment will stand at >INR16b.

Revenue and order books are expected to grow in



Domestic inquiry pipeline increased ~130% YoY,

driven

FY26, with growth likely to be back-ended

and

by strong traction across key sectors, including steel,

concentrated in 2H, especially in 4Q.

cement, sugar, waste-to-energy, and process

cogeneration industries.



Export traction declined in Europe, Southeast Asia,

and SAARC, while the US (+175% YoY), Central Asia,

and Africa remained active.

Domestic capex cycle

The company expects robust demand from quick

commerce, mission-critical segments, manufacturing

segments, pharma, etc.

It anticipates strong industrial demand, led by

construction and railways (

diesel electric tower car

and power cars).

It expects broad-based powergen demand recovery,

with HHP witnessing high traction.

Strong traction is expected from construction, mining,

railways, defense, marine, and nuclear in the industrial

segment.

Prospect pipeline will grow 65% YoY to INR15t for the

next nine months of FY26.

Of this, infra will account for INR7.97t (+32% YoY),

hydrocarbon INR5.8t (more than 100% YoY growth,

carbon-lite solutions INR0.6t (+22% YoY), green and

clean energy INR0.2t, and heavy engineering INR0.3t.

Industrial Product: Strong demand in Water and Enviro;

cooling segment prospect pipeline of INR1b; Heating

and ethanol market expected to revive due to

increased inquiries.

Industrial Infra: Eyeing opportunities from IPP projects,

waste-to-energy, and advanced biofuels.

Green Solutions: Expected to exceed 300 MW capacity

by FY26, with an additional 300-400 MW under

construction in FEPL.

Management expects capex to remain over INR10b for

FY26, driven by large expansions and capital items

required for its new-generation test instruments,

among other factors.

August 2025

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CAPITAL GOODS | Voices

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Margins are expected to be in double digits.

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Hitachi Energy



Kalpataru

Projects

FY26 is expected to witness 20-25% revenue

growth, PBT margin of 5.0-5.5%, NWC below 100

days, and order inflow guidance of ~INR260-280b.

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KEC

International

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Zen

Technologies

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The company has guided for FY26 revenue growth

of +15% YoY, with an EBITDA margin of 8-8.5%,

along with a 50-100bp improvement in FY27.

Interest cost is expected to stand at 2.5%, with the

debt level reducing to INR45b, despite a 15% YoY

growth.

The company has an order inflow target of

INR300b.

The company aims for 50% revenue CAGR,

achieving cumulative revenue of INR60b.

EBITDA/PAT margin is expected to stand at

35%/25% over the next three years.

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The company has committed to a sizable INR20b

capex program over the next few years, spanning

key business areas such as transformers, high

voltage equipment, grid automation, and HVDC

systems.

The company has a T&D tender pipeline of INR1.2t for

the next 12-18 months and aims to expand into data

centers in the B&F segment. Collections are improving

in water segments, supported by a growing pipeline in

metro systems, elevated corridors, and tunneling

infrastructure.

The company has a tendering pipeline of INR1.8t,

particularly from the T&D and civil segments.

It anticipates upcoming T&D tenders worth INR900b

over the next 1-2 months, with INR300b in India and

INR600b in international markets.

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Management expects INR6.5b in orders in 2QFY26,

with execution planned for the latter half of FY26

and some spillover into 1QFY27.

Capex guidance for FY26 is INR400m-500m.

ABB India

Current Price INR 5,123



Buy

Click below for

Results Update





Execution in 2Q:

Despite operational headwinds such as QCO-related

disruptions and forex volatility, ABB ensured continuity in customer

commitments by leveraging its strong backlog and diversified segment

exposure. Management emphasized that execution strength was particularly

visible in segments like process automation, where high service content and

project closures supported profitability. While electrification and motion

segments faced some delays and cost pressures due to imported content, ABB’s

overall execution momentum remained intact, supported by disciplined order

conversion.

Order inflows and order book:

Base orders grew 5% YoY, led by traction in Tier

2 and Tier 3 markets, though large orders remained absent this quarter. The

total order backlog stood at INR100.6b, with a healthy mix of large and product

orders spread over an 18-24-month execution cycle. While base orders in

motion and electrification remained resilient, process automation saw order

delays, and robotics had a high prior base from a large electronics order.

2H order inflow expectations:

Management expects 2HCY25 to see a gradual

pickup in order inflows, though at a more normalized pace compared to the

post-Covid surge seen over the last few years. While the large order pipeline is

not as robust as seen in earlier periods, the company is hopeful of converting a

few mid- to large-sized opportunities in segments such as railways, metros, and

data centers. Private sector capex decisions remain cautious due to global

uncertainties and delayed clarity on domestic consumption trends, but public

capex, particularly in infra, is expected to gather pace in 2H. ABB also expects

continued order inflow from emerging trends such as energy transition, grid

strengthening, and digital infrastructure, including localized data centers and

cloud computing ecosystems.

August 2025

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CAPITAL GOODS | Voices

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Prospect pipeline delayed, not decreased:

Management clarified that the

overall project pipeline has not reduced meaningfully but is facing delays in

decision-making across segments. In process automation and motion, prospects

remain healthy, with delays attributed to timing rather than demand decline.

Electrification continues to see strong base enquiries, though large project

decisions, particularly in oil & gas and heavy industries like cement and steel,

are taking longer. In robotics, interest levels are high with a short-term gap,

which is expected to normalize. Overall, management views the situation as

temporary, with recovery likely once customer confidence improves.

Nature of hit on electrification segment:

The electrification business faced a

one-time impact of INR395m due to engineering corrections in an ongoing

project. Additionally, this segment was disproportionately impacted by the QCO

compliance requirements, which forced ABB to import critical components at

elevated costs to meet delivery deadlines. These factors, along with an

unfavorable revenue mix tilted toward trading activity, have impacted

segmental profitability. This QCO requirement is expected to last for a few more

quarters.

Impact of US tariffs:

Management claimed that the impact of recently

announced US tariffs would be negligible for ABB India. Over 90% of its revenue

is derived from the domestic market, and its global ‘local-for-local’ sourcing

model has further helped the company during trade disruptions. Only a small

portion of exports go to the US, and any cost impact on these limited volumes is

not material to the overall business. After Covid, ABB has deepened its domestic

supply chain integration, aligning its sourcing and manufacturing footprint more

closely with local demand, which will help ABB mitigate the impact of

geopolitical or tariff-related risks.

Pricing impact:

The company faced headwinds on price realization, particularly

in motors, due to heightened competition and weaker demand in some

segments. While ABB remains focused on offering technologically superior

products, pricing volatility in short-cycle product orders is harder to pass

through. Long-cycle orders are somewhat shielded through index-based

adjustments. Inflationary costs are partly being passed on, but the volatility in

input prices, particularly for imports, has led to margin compression.

Forex losses:

Forex volatility had a material impact (~INR565m), particularly

from EUR and CHF appreciation during the quarter, which affected hedged

imports. ABB uses fair value hedging, and currency movements directly

impacted the P&L. Some of this impact was mitigated through service revenue

and favorable project mix in process automation.

Competition from Chinese players:

Management acknowledged increased

Chinese competition, particularly in process automation and heavy industries,

with aggressive pricing. However, the company has chosen not to match

irrational prices and focuses on value-added offerings. No significant Chinese

presence was seen yet in electrification or motion segments.

Cummins India

Current Price INR 3,819



Buy

Click below for

Detailed Concall Transcript &

Results Update

Domestic Powergen:

Domestic Powergen revenue increased 31% YoY/21% QoQ

to INR10.6b in 1QFY26. Demand was broad-based based but key segments

where the segment saw demand from the manufacturing sector, pharma, quick

commerce, and mission-critical operations. Data centers contributed steadily,

accounting for 15-20% of overall powergen sales, while project business formed

a steady double-digit share without any one-off boosts.

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CPCB IV+ Products:

The CPCB IV+ transition is now fully stabilized, with market

pricing holding steady for two consecutive quarters despite continued

competition. Volumes are back to pre-transition levels, and the technologically

advanced nature of CPCB IV+ engines is creating higher aftermarket

opportunities, given the greater need for technical support versus CPCB II

products. In 1QFY25, CPCB IV+ contributed roughly 60% of domestic powergen

revenues. Management is focused on maintaining pricing discipline while

catering to customer-specific requirements.

Industrial Segment:

Industrial revenues reached INR4.2b (+12% YoY/+10%

QoQ), led by strong performance in railways (INR1.5b) from diesel-electric

tower cars and power cars, and steady growth in construction (INR1.5b), which

saw some project delays due to early monsoons. Compressor sales were stable

at INR560m,

matching last quarter’s demand. Marine continues to grow

steadily, driven by defense vessel orders, though timelines depend on

government tenders. Management expects steady order flow in railways and

consistent activity across industrial sub-segments.

Distribution Segment:

The distribution business grew 19% YoY, supported by

deeper penetration in traditional powergen and railways, alongside improved

aftermarket solutions. While new products—such as DEF, hydraulic filters, and

railway equipment like hotel load converters—are starting to contribute, growth

remains largely driven by core segments. CPCB IV+ adoption is expected to

further boost aftermarket demand due to higher electronic content, but

industrial aftermarket opportunities (railways, mining, marine) will also support

balanced growth across segments.

Exports:

Export revenue stood at INR5.2b in 1QFY26. The segment saw broad-

based growth across geographies and horsepower categories, with Latin

America and Europe outperforming versus last year. Most export volumes still

cater to lower-emission-norm markets, though CPCB IV+ products are supplied

to compliant geographies. The company is exploring increased traction in the UK

following trade developments, and sees potential for US growth in specific high-

HP engine platforms, though tariff impacts are being evaluated.

1QFY25 revenue breakup:

Within domestic powergen (INR10.6b), LHP

contributed INR840m, medium INR2.3b, heavy duty INR1.2b, and HPP INR6.3b.

Industrial segment revenues stood at INR4.2b, while distribution delivered

strong double-digit growth to INR7.8b, aided by both powergen and industrial

aftermarket sales. Export revenues stood at INR5.2b for the quarter.

Guidance:

Management maintained its double-digit revenue growth outlook for

FY26, driven by strong domestic demand in Powergen, industrial, and

distribution segments. Exports will be pursued cautiously amid geopolitical and

trade uncertainties, while margins are expected to hold steady on sustained

volumes, a favorable mix, and cost efficiencies.

Kirloskar Oil

Current Price INR 962



Buy

Click below for

Detailed Concall Transcript &

Results Update

Powergen Segment:

Management highlighted strong momentum in the

segment despite 1QFY25 witnessing pre-buying on emission norm change. This

was driven by a broad-based demand recovery, especially from infrastructure,

real estate, and commercial sectors. KOEL emphasized sustained domestic

demand across segments such as data centers, hospitality, QSRs, and retail, with

no visible signs of cyclicality. The recently launched Sentinel and Optiprime

ranges have gained good traction, supported by high customer acceptance. The

company is also actively tracking market share node-by-node in the high

45

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CAPITAL GOODS | Voices

horsepower category, where service quality is increasingly critical. Management

expressed confidence in the company’s extensive product portfolio and strong

service network as key differentiators.

Industrial Segment:

Management acknowledged a YoY decline in industrial

revenue, attributing it to a high base from railway pre-buying last year.

However, KOEL remains optimistic about the segment's long-term prospects,

citing progress in strategic defense and nuclear projects, including those for

NPCIL and the Indian Navy. These are milestone-based development orders, and

a successful execution is expected to open up larger opportunities. Additionally,

KOEL is expanding its focus in mining and construction equipment, aiming to

leverage these verticals for future growth.

Distribution Segment:

Management noted that the transition to CPCB IV+

norms has catalyzed consolidation in the distribution and aftermarket space.

With all engines up to 800kW now being electronically controlled, servicing has

become more proprietary, effectively reducing competition from unorganized

players. KOEL has completed a channel restructuring initiative to enhance

service capabilities and coverage. The service model now includes both in-house

engineers and trained personnel through certified service partners, offering

flexibility based on operational needs.

Export segment:

Management shared that international business performance

remained robust, with particular strength in the MENA region. The appointment

of MYSPAN as a regional OEM partner has now stabilized, enabling stronger

market traction. KOEL sees this model as scalable and expects continued

momentum in the coming quarters. Export growth was also aided by better

alignment among distributors and improved product availability across nodes.

B2C Segment:

Within the B2C space, management indicated that its water

management solutions business had a stable quarter and is now delivering

consistent performance, marked by low double-digit EBITDA margins and

positive cash flows. After plant consolidation, operational efficiency

improvements have begun to reflect in the results. KOEL has divested its

Optiqua (cables and pipes) business as part of its core-focus strategy and will

continue expanding the B2C product portfolio in alignment with its roadmap.

Arka Fincap:

On Arka, management reiterated the long-term strategic intent to

build a strong, granular retail book while complementing the existing wholesale

portfolio. They highlighted progress in infrastructure and talent build-out, with

32 branches already operational. Although near-term returns remain subdued,

management views this as a transitional phase. Management remains confident

in the new leadership’s ability to deliver

returns in line with the core business

over the medium term.

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KEC International

Current Price INR 822



Neutral

Click below for

Detailed Concall Transcript &

Results Update



TAM:

KEC sees a strong pipeline of ~INR1.8t, with INR900b in T&D and over

INR500b in civil. Domestic demand is being driven by grid upgrades and REZ

transmission, while international markets like Saudi Arabia, the UAE, and the

Americas continue to offer steady opportunities. Though 1Q saw slower tender

activity in India, management expects improved order finalizations in the

coming quarters.

Order inflows:

Order inflows for 1Q stood at over INR55b, led by T&D and civil

segments. The company holds an L1 position of INR60b, largely in T&D. While

August 2025

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CAPITAL GOODS | Voices

some awards from private developers are delayed, conversions are expected

soon. The order book remains diversified and strong at INR344b.

T&D segment:

Revenue touched INR31.6b (+26% YoY), with new orders of

INR32b during the quarter. Strategic progress was made in HVDC, with more

bids underway. Hardware and tower exports picked up, particularly in Brazil and

Mexico. Capacity expansion at Nagpur and other plants supports growing global

demand. STATCOM and grid tech are emerging areas of focus.

Cables:

1QFY26 revenue rose 5% YoY to INR3.8b. Margins were impacted due to

approval delays and inventory build-up, but normalization is underway. Capacity

doubling at Vadodara and E-beam cable investments remained on track, with

commercial launch expected by year-end.

Civil business:

The civil business revenue was INR9.4b, which was hit by labor

and cash flow issues. However, the segment secured large orders, including in

high-rise and semiconductor EPC. Execution is expected to pick up from 2QFY26,

aided by improved labor availability and a strong INR100b order book.

Railways segment:

The railways business posted INR4.7b in revenue, with

notable deliveries for Vande Bharat and the Chenab Bridge. Execution of 500 km

of KAVACH is ongoing, though supply chain issues have slowed the pace. New

orders are expected, including from the Middle East.

Water:

Collections improved to INR2.6b in 1Q, with additional inflows in July,

but total receivables remain high at ~INR8b. Execution remains cautious and

selective. Improvement is gradual, and the segment continues to drag on

working capital.

Update on capacity expansions:

Expansions have been completed at Dubai,

Jaipur, and Jabalpur, and is now ongoing at the Nagpur plant. In the cables

business, post commissioning of the aluminum conductor line in Vadodara, the

company has already initiated its doubling. Capex for E-beam and elastomeric

cables is underway, with commercial launch expected by the end of FY26.

O&G:

The business remained relatively subdued, with no significant revenue

contribution during the quarter. However, the company secured its second

international order for terminal station works in Africa, where it is already

executing a pipeline project. Given the limited tender pipeline and high

competition in the Indian market, KEC is focusing its O&G strategy on select

overseas opportunities, especially in Africa.

Guidance maintained:

Revenue growth guidance of ~15% for FY26 is intact, with

EBITDA margin guidance of 8-8.5% and targeted 50-100bp improvement in

FY27. Working capital and debt metrics are also expected to improve

sequentially.

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Larsen & Toubro

Current Price INR 3,589

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Buy

Click below for

Detailed Concall Transcript &

Results Update

Order book up 25% YoY:

The order book at the end of 1QFY26 stood at INR6.1t,

reflecting a strong 25% YoY growth. Order inflows during the quarter reached

INR945b, up 33% YoY. The order book is evenly split between domestic (54%)

and international (46%) operations. The domestic order book consists of orders

from PSUs (34%), state governments (25%), the central government (14%), and

the private sector (27%).

August 2025

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CAPITAL GOODS | Voices

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Strong ordering prospects for remaining 9MFY26

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INR 15t (+63% YoY):

Management indicated that the company has a robust order prospect pipeline

of INR15t for the remaining 9MFY26, which is a substantial 63% increase YoY.

Infrastructure contributes INR8t to the pipeline, with segments such as heavy

civil infrastructure (17%), transportation (19%), renewables (14%), power

transmission and distribution (14%), buildings and factories (11%), water (17%),

and minerals and metals (8%). The total prospect pipeline is INR6.54t, with

INR5.78t from hydrocarbon, INR0.55t from carbon-lite, and INR0.21t from green

energy - majority from international markets.

Working capital remains comfortable:

Management emphasized that the

company has continued to strengthen its balance sheet, with net working

capital improving to 10.1% of sales, down from 13.9% in 1QFY25. This

improvement has contributed to an increase in RoE to 17% in 1QFY26 from

14.7% in 1QFY25 (+380bp). Working capital remains at comfortable levels,

supported by improved collections of INR603b in 1QFY26, +31% YoY. NWC for

the projects and manufacturing (P&M) segment is steady at 8.5%. Excluding the

water segment, NWC has improved by another 75bp.

GCC ordering:

The Middle East continues to be a major growth driver for LT,

contributing around 82% of the international order inflow pipeline. Within the

GCC region, robust activity is being seen across infrastructure, oil & gas, and

energy transition segments. Hydrocarbon prospects worth INR5.78t are largely

international, with INR5.51t concentrated in the Middle East, spanning both

onshore and offshore projects, including INR1.31t in offshore wind.

Hyderabad metro performance:

On Hyderabad Metro, management said that

average daily ridership decreased to 417,000 pax/day in 1QFY26 from 432,000

in 1QFY25. However, fare revisions helped to boost revenues to INR1.6b in

1QFY26, up from INR1.01b last year.

FY26 guidance:

For FY26, management has maintained its previous guidance of

10% growth in order inflows and revenue growth of 15% YoY, while the core

E&C margin is targeted to be at 8.3%-8.5%. Hydrocarbon margins are likely to

remain subdued in 1H due to competitive bid orders and peak execution of

older projects. However, the company is confident that this has been factored

into the margin guidance. The company expects to maintain net working capital-

to-revenue ratio of 12%, and anticipates stronger execution momentum in the

second half of the year.

Zen Technologies

Current Price INR 1,420

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Neutral

Click below for

Detailed Concall Transcript &

Results Update

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Revenue disappointment in 1QFY26:

Revenues dropped significantly due to

design modifications in a major equipment order by end-user. A deferred

revenue of ~INR500m-700m is expected to be recognized in 2QFY26.

Order book split:

The standalone order book stood at INR6.05b, while

subsidiaries contributed INR1.48b to the consolidated order book. Within the

standalone segment, INR2.6b was attributed to AMC, and the remaining

INR3.5b represented equipment orders, which included both simulators and

anti-drone systems. Specifically, simulator orders were valued at ~INR2.8b, and

anti-drone systems at ~INR640m. Management also highlighted an imminent

simulator order worth INR6.5b, expected in 2QFY26, which would significantly

August 2025

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