Review 2QFY26
India Strategy | Review 2QFY26
India Strategy
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Earnings review 2QFY26: Midcaps standout in a flattish quarter;
Nifty EPS sees modest upgrade
Global Cyclicals outperform
Corporate earnings – a third consecutive quarter of double-digit earnings
growth:
The 2QFY26 corporate earnings concluded on a healthy note, with overall
earnings growth driven by OMCs, Telecom, Metals, Technology, NBFCs – Lending,
Cement, and Capital Goods. Conversely, Oil & Gas (ex-OMCs), Automobiles (led by
Tata Motors), and Banks (Private and PSU) dragged overall profitability.
Metals and OMCs propel earnings growth:
The aggregate earnings of the MOFSL
Universe companies grew 12% YoY (vs. our est. of 9% YoY) in 2QFY26. Excluding
financials, the earnings jump 18% YoY (vs. our est. of 16% YoY), whereas, excluding
global commodities (i.e., Metals and O&G), the MOFSL Universe grew 6% YoY (vs.
our est. of 6% YoY). The earnings growth was powered by O&G (OMC’s profit up
8.9x YoY), which grew 38% YoY, Telecom (loss-to-profit), Metals (profit surged
25% YoY), Technology (8% YoY), and NBFC - Lending (13% YoY). These five
sectors contributed 90% of the incremental YoY accretion in earnings in 2QFY26.
A sixth successive quarter of single-digit PAT growth for the Nifty-50:
The Nifty
delivered a 2% YoY PAT growth (vs. our est. of +5%).
Nifty reported a single-digit
earnings growth for the sixth consecutive quarter since the pandemic (Jun’20).
Five Nifty companies – Bharti Airtel, Tata Steel, HDFC Bank, Reliance Industries,
and TCS – contributed 300% of the incremental YoY accretion in earnings.
Conversely, Tata Motors, ONGC, Coal India, Axis Bank, SBI, Interglobe Aviation,
Adani Ent., Power Grid, Sun Pharma, Eternal, HUL, Kotak Mahindra Bank, and Tech
Mahindra contributed adversely to the earnings.
Large-caps deliver in-line performance, while mid-caps outperform; small-caps
report a miss:
Within our MOFSL coverage universe,
large-caps
(88 companies)
posted an earnings growth of 10% YoY – similar to the overall universe.
Mid-caps
(97 companies) have extended their streak of the past three quarters and yet
again delivered a strong earnings growth of 34% YoY (vs. our est. of 23%). Multiple
mid-cap sectors clocked impressive growth; 16 of 22 sectors under coverage
delivered a double-digit PAT growth. Oil & Gas, Metals, NBFC – Lending, PSU
Banks, and Real Estate were the major growth drivers, which contributed 70% of
the incremental YoY accretion to earnings. In contrast,
small-caps
(142 companies)
continued to experience weakness and a broad-based miss, with Private Banks,
NBFCs (lending and non-lending), Insurance, Oil & Gas, and Retail posting a YoY
earnings dip. The small-cap earnings dipped 5% YoY (our est. of 3% growth), with
40% of the coverage universe missing our estimates. Conversely, within the large-
cap/mid-cap universes, 19%/22% of the companies missed our estimates.
The beat-miss dynamics:
The beat-miss ratio for the MOFSL Universe was
favorable, with 36% of the companies exceeding our estimates, while 29%
reported a miss at the PAT level. For the MOFSL Universe, the earnings upgrade-
to-downgrade ratio has been largely balanced at 0.9x in 2QFY26 (for FY26E), with
the earnings of 84 companies having been upgraded by >3%, while the earnings of
98 companies have been downgraded by >3%.
Refer to our Sep’25
quarter preview
Expectations vs. delivery: 2QFY26
% of companies that have declared results
Above Expectations
In-line
Below Expectations
MOFSL
36
35
29
PAT
Nifty
24
50
26
Research Analyst: Gautam Duggad
(Gautam.Duggad@MotilalOswal.com) |
Abhishek Saraf
(Abhishek.Saraf@MotilalOswal.com)
Research Analyst: Deven Mistry
(Deven@MotilalOswal.com) |
Aanshul Agarawal
(Aanshul.Agarawal@Motilaloswal.com)
Investors
November 2025
are advised to refer through important disclosures made at the last page of the Research Report.
1
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
MOFSL Large-cap Universe – PAT
growth YoY (%)
Large Cap
51
30
32
23
12
4
7
3
5
0
10
10
10
MOFSL Mid-cap Universe – PAT
growth YoY (%)
Mid Cap
185
76
15
23
31
6 3
-1
13
25
34
5
-27
MOFSL Small-cap Universe – PAT
growth YoY (%)
Small Cap
76
34 31
8 6
16
4 5
-3
-23
-6 -7
-5
A story of two halves – 1HFY26 and 2HFY26E:
The MOFSL/Nifty Universes
delivered +11%/+5% YoY earnings growth in 1HFY26. Excluding Metals and
O&G, MOFSL/Nifty reported 7%/5% YoY earnings growth. For 2HFY26, we
expect MOFSL/Nifty earnings to report a growth of 15%/11% YoY. Excluding
Metals and O&G, MOFSL/Nifty is expected to report a growth of 16%/11% YoY.
FY26E earnings highlights:
The MOFSL Universe is likely to deliver sales/EBITDA/
PAT growth of 6%/12%/15% YoY in FY26. The Financials, Oil & Gas, and Metals
sectors are projected to be the key growth engines, with 10%, 24%, and 9% YoY
earnings growth, respectively. These three sectors are likely to contribute 58% of
the incremental YoY accretion in earnings. Further,
we categorized the coverage
stocks, based on market capitalization, into large-cap, mid-cap, and small-cap
segments.
Notably, our large-cap universe is anticipated to deliver a 12% YoY
earnings growth in FY26E, while mid-cap is estimated to deliver 29% YoY
growth, and small-cap is estimated to deliver a 25% YoY growth in FY26E.
MOFSL Universe estimated PAT experiences an upgrade of 2.3%/0.9% for
FY26E/FY27…:
The MOFSL Universe witnessed a rise of 2.3% for FY26, led by Oil
& Gas, PSU Banks, Telecom, Insurance, and Metals. The MOFSL Large-cap
Universe experienced an upgrade of 2.5% for FY26, while the MOFSL Mid-cap
Universe stood out with a 3.4% earnings upgrade for FY26. In contrast, the
small-cap universes experienced earnings cuts of 3.9% for FY26.
…and Nifty EPS witnesses an upgrade of 1.2%/0.5% for FY26E/FY27E:
The Nifty
EPS estimate for FY26 was raised by 1.2% to INR1,109, largely owing to SBI, HDFC
Bank, ONGC, Bharti Airtel, and Hindalco. FY27E EPS was also raised by 0.5% to
INR1,280 (from INR1,274) due to upgrades in SBI, Tata Steel, Bharti Airtel, HDFC
Bank, and ICICI Bank.
The top earnings upgrades in FY26E:
SBI (9.3%), ONGC (7.6%), Hindalco (7.2%),
Bharti Airtel(7.1%), and Tata Steel (5.8%).
The top earnings downgrades in FY26E:
Eternal (-37.9%), Interglobe Aviation (-
23.2%), NTPC (-9.2%), Coal India (-6.3%), Power Grid Corp. (-6.1%).
Key sectoral highlights
–
1)
Banks:
The banking sector posted a steady quarter,
supported by better NIM performance and a healthy pickup in credit growth.
Margins were ahead of expectations for most banks, aided by a faster decline in
the cost of funds. Several banks have guided for further NIM improvement in
2HFY26, driven by the benefits of the CRR cut, continued deposit re-pricing, and
increased loan growth. 2)
NBFC-Lending:
NBFCs reported a mixed performance
in 2QFY26 in terms of loan growth and asset quality, with early signs of demand
revival visible across the vehicle (PV, Tractors, and 2W) and consumer durables
(electronics) segments, while seasonal asset quality pressures persisted, which
were more product-specific in nature. 3)
Consumer:
Staple companies
witnessed stable demand trends; however, the GST transition and an extended
monsoon adversely affected the overall performance during the quarter. The
GST impact was more pronounced in personal care categories compared to
packaged foods. 4)
Oil & Gas:
Revenue came in line with our estimates. EBITDA
was 8% above estimates (up 33% YoY). Excluding OMCs, EBITDA remained in line
(up 8% YoY). Adj. PAT was 11% above estimates (up 38% YoY), primarily as
OMCs reported strong profitability. Excluding OMCs, APAT was 6% below
estimates (-4% YoY). 5)
Technology:
IT companies (within the MOFSL Universe)
offered some respite on the already beaten-down expectations in 2QFY26, with
median revenue growing 1.5% QoQ CC (-1.1%/-0.6%/+1.7%/+1.6% in
1QFY26/4Q/3Q/2QFY25). 2QFY26 earnings offered some respite, as expectations
2
November 2025
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Sector Review Compendium
Highlights / Surprise /
Guidance… (Page 22 onwards)
Automobiles
Capital Goods
Cement
Chemicals
Consumer – FMCG | QSR
Consumer Durables
EMS
Financials – Banks
Financials – NBFC: Lending
Financials – NBFC: Non Lending
Healthcare
Infrastructure
Logistics
Metals
Oil & Gas
Pipes
Real Estate
Retail
Technology
Telecom
Utilities
were already beaten down and the quarter was seasonally strong. 6)
Metals:
Overall earnings remained decent during 2Q. Ferrous companies' revenue rose
12% YoY despite softer realizations (better-than-expected NSR led the earnings
beat), while EBITDA jumped 41% YoY on healthy volume and lower costs. This led
to a 2.2x YoY surge in APAT in 2Q for ferrous companies. Non-ferrous companies
posted earnings growth led by favorable metal prices and steady volumes.
Our view:
The 2QFY26 earnings have generally been in line with our expectations,
with the intensity of earnings cuts moderating. Although Indian equities have
registered a lackluster performance over the past one year, we continue to
emphasize that the Indian markets now appear healthier compared to last year.
The earnings cycle is bottoming out, with growth expected to accelerate into
double digits. Valuations remain reasonable, with the Nifty trading at 21.2x, near
its LPA of 20.8x. Any signs of accelerating earnings growth should support valuation
expansion. We believe that the cavalry of measures by the government will help
reset the trajectory of corporate earnings, as domestic reforms are expected to
continue. Additionally, any resolution of the tariff stalemate will be a key external
catalyst, in our opinion. Our
model portfolio
is more aligned towards domestic
names, driven by expectations of a domestic economic rebound. While SMID
stocks trade at expensive valuations, we continue to focus on this segment,
selectively picking high-conviction SMID names in our portfolio.
Exhibit 1: Our preferred ideas
Company
EPS
EPS (INR)
PE (x)
PB (x)
ROE (%)
Map CMP
CAGR (%)
(USDb)
(INR) FY26E FY27E FY28E FY25-27 FY26E FY27E FY28E FY26E FY27E FY28E FY26E FY27E FY28E
5.7
2.2
1.2
3.9
4.3
3.8
14.0
8.1
6.6
1.6
7.5
4.2
6.4
5.9
13.0
12.0
5.2
2.3
6.4
18.6
9.9
5.9
3.0
4.8
5.8
24.5
16.7
16.9
17.2
21.5
11.0
37.7
24.2
53.0
12.3
31.7
19.2
16.0
15.4
26.4
16.5
15.5
18.1
21.8
13.0
34.7
23.0
46.9
16.4
31.0
24.1
17.9
16.0
27.9
16.5
15.4
19.0
21.2
14.3
32.4
21.6
36.0
15.8
30.5
25.8
16.0
15.3
13.6
32.8
25.3
15.5
23.5
42.7
19.9
20.0
5.9
21.7
21.6
Preferred large-cap stocks
Bharti Airtel
144.0 2,099 52.4 67.1 87.4
48.8
40.1 31.3 24.0 8.7
6.7
ICICI Bank
110.5 1,372 72.8 82.7 95.7
11.3
18.8 16.6 14.3 2.9
2.5
State Bank
100.6 967 95.5 103.8 120.4
9.3
10.1 9.3
8.0
1.6
1.4
Larsen & Toubro
61.9 3,995 130.2 154.9 184.9
20.4
30.7 25.8 21.6 5.0
4.4
Mahindra & Mahindra
51.8 3,694 120.5 144.7 167.6
21.1
30.6 25.5 22.0 6.1
5.1
Ultratech Cement
39.4 11,864 272.7 350.5 423.9
29.9
43.5 33.8 28.0 4.6
4.2
Titan Company
38.4 3,824 56.8 67.2 79.5
26.1
67.3 56.9 48.1 22.4 17.6
Bharat Electronics
35.2
427
8.3
9.9 11.5
16.8
51.3 43.3 37.2 12.4 9.9
Interglobe Aviation
25.7 5,907 170.6 242.8 274.7
13.6
34.6 24.3 21.5 14.6 9.3
Tata Steel
24.5
174
9.4 14.2 15.7
105.3
18.5 12.3 11.1 2.2
1.9
TVS Motor
18.1 3,386 76.2 96.4 121.9
30.0
44.4 35.1 27.8 12.5 9.7
Tech Mahindra
15.9 1,438 60.1 78.0 86.3
27.6
23.9 18.4 16.7 4.5
4.4
Max Healthcare
12.0 1,101 18.7 24.3 25.6
26.8
58.9 45.3 43.0 8.8
7.5
Indian Hotels
11.6
720 13.0 15.7 17.4
16.8
55.4 45.8 41.3 7.9
6.8
Preferred midcap/smallcap stocks
Swiggy
11.0
393
-17.2 -8.7
3.8
Loss
-22.8 -44.9 103.4 12.7 15.3
Dixon Tech.
10.5 15,419 174.9 276.9 363.8
53.7
88.2 55.7 42.4 23.2 16.5
Suzlon Energy
8.9
58
1.4
2.2
2.5
41.7
42.0 26.6 23.3 9.1
6.8
Jindal Stainless
6.8
738 38.1 44.5 50.3
20.8
19.4 16.6 14.7 3.1
2.7
Coforge
6.8 1,800 44.7 58.7 74.3
52.7
40.3 30.6 24.2 8.4
7.4
Page Industries
5.0 39,743 715.4 803.0 911.2
10.9
55.6 49.5 43.6 26.2 22.0
Radico Khaitan
4.9 3,260 41.9 53.3 65.5
43.8
77.8 61.1 49.8 13.9 11.8
Kaynes Tech
4.8 6,335 83.3 131.9 194.9
73.5
76.0 48.0 32.5 8.5
7.2
Delhivery
3.7
437
3.4
6.3
8.3
67.0
127.6 69.7 52.8 3.4
3.2
V-Mart Retail
0.7
834 15.1 23.9 34.3
203.3
55.3 34.9 24.3 7.1
5.9
VIP Inds.
0.6
398
2.4
9.3 13.4
LP
166.7 42.9 29.6 8.7
7.2
Note: LP = Loss to profit; Large-cap, Mid-cap, and Small-cap stocks listed above are as per the SEBI categorization
-45.5 -30.9
30.0 34.7
25.3 29.1
16.1 16.0
17.4 20.7
47.1 44.4
17.9 19.2
14.2 16.2
2.7
4.7
13.8 18.5
5.4 18.3
November 2025
3
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Aggregate performance in line, anchored by global commodities
The MOFSL Universe’s sales/EBITDA/PBT/PAT grew 8%/10%/13%/12% YoY (vs.
our est. of +6%/+8%/+9%/+9%). Excluding Metals and O&G, the MOFSL Universe
companies recorded sales/EBITDA/PBT/PAT growth of 9%/5%/7%/6% YoY (vs.
est. of +9%/5%/6%/6%) in 2QFY26.
The earnings growth was powered by O&G (OMC’s profit up 8.9x YoY), which grew
38% YoY, Telecom (loss-to-profit), Metals (profit surged 25% YoY), Technology (8%
YoY), and NBFC - Lending (13% YoY). These five sectors contributed 90% of the
incremental YoY accretion in earnings in 2QFY26.
The EBITDA margin of the MOFSL Universe (ex-Financials) expanded 100bp YoY to
17.4%, primarily aided by the Oil & Gas, Cement, Telecom, Metals, and Consumer
Durables sectors but hurt by the Automobiles, Real Estate, Media, and Capital
Goods sectors.
Exhibit 2: Sector-wise 2Q performance of the MOFSL Universe companies (INRb)
Sector
(no of companies)
Sales
Chg.%
Sep-25
QoQ YoY
-0.2
12.1
-6.1
0.6
-3.7
-7.3
5.1
7.5
0.4
2.7
14.6
3.8
8.3
4.7
-21.0
4.3
9.0
2.5
-2.6
3.6
6.8
5.5
5.2
4.5
4.1
-6.0
14.4
1.8
0.8
3.7
3.5
3.0
2.5
4.7
13.6
20.4
1.2
4.2
10.4
27.2
6.9
3.1
1.8
8.8
16.2
12.5
11.0
-2.6
17.7
9.7
9.7
4.5
7.1
12.3
18.4
8.6
6.5
18.2
3.8
25.7
8.0
8.2
9.3
9.0
8.3
8.1
Var.
over Sep-25
Exp. %
-0.1 320
-1.9 138
4.7
93
-3.5
32
-1.4 214
0.7
19
1.8
11
1.3 1,864
2.4
703
4.4
624
-0.7
65
1.4
429
3.3
44
1.6
223
-7.0
11
2.5
74
3.5
12
5.2
566
4.0 1,037
3.2
717
-7.8
40
3.5
73
-0.3
3
0.5
484
1.6
412
-10.9 258
9.0
91
1.9 5,976
2.0 4,111
0.4 4,373
1.4 5,656
1.4 3,609
1.0 2,924
EBITDA
Chg.%
QoQ
-15.2
16.6
-21.0
-1.0
-3.6
-0.5
2.8
-4.8
-14.6
-5.7
55.7
9.1
10.7
-1.2
-11.7
3.1
28.0
-3.6
3.5
2.1
11.7
-3.3
7.9
8.0
5.4
-3.3
-26.9
-2.2
-1.0
-3.3
-2.7
-5.6
-4.5
YoY
-18.1
10.5
65.0
4.3
3.1
31.3
33.6
2.4
2.0
-5.7
8.8
15.9
8.2
5.9
7.5
22.6
16.0
19.0
32.9
7.7
7.7
15.8
8.1
8.0
23.7
4.5
2.1
10.2
14.2
5.0
6.6
5.8
6.9
Var.
over Sep-25
Exp. %
-14.6 245
-0.5 140
9.7
58
0.8
25
1.3
200
2.7
18
1.7
12
3.6 1,610
4.1
545
3.8
552
10.3 133
1.3
335
4.4
46
-2.3 182
0.2
5
4.4
55
15.0
8
7.6
373
8.3
733
-1.4 496
-24.1 49
-0.1
38
-6.1
2
2.3
448
2.9
101
-11.0 141
-12.7 18
1.8 4,461
1.0 2,851
-0.3 3,355
0.3 4,224
-1.6 2,728
-1.2 2,215
PBT
Chg.%
QoQ
-19.7
17.6
-20.8
0.5
-4.8
-3.0
66.1
0.7
0.6
1.5
-13.1
6.3
-2.2
-1.4
-24.3
12.8
-9.6
-7.7
8.6
7.4
21.3
-9.4
3.1
3.9
42.6
0.2
-66.7
-0.1
-0.5
-0.9
-0.7
-1.2
-0.3
YoY
-21.3
16.1
100.2
3.5
3.3
25.1
60.5
4.7
-3.3
2.3
24.1
18.7
-0.6
5.3
-21.0
34.3
-4.9
22.2
40.3
0.7
60.2
16.8
13.0
6.5
223.1
5.7
2.1
12.6
17.6
7.0
7.4
5.4
7.2
Var.
over Sep-25
Exp. %
-20.6 194
3.8
97
20.3
39
2.2
19
0.3
149
2.4
13
57.9
5
5.2 1,212
2.3
413
12.0 385
2.8
121
1.0
257
0.8
36
-3.4 133
2.1
3
8.8
44
-18.0
6
13.3 254
11.1 521
-4.2 342
-2.1
43
-5.4
28
-19.6
2
1.5
335
27.7
35
0.5
101
-53.2
7
3.6 3,240
2.7 2,028
1.1 2,465
1.4 3,061
-0.5 1,896
0.3 1,541
PAT
Chg.%
QoQ
-15.6
18.4
-22.5
-1.9
-4.8
-2.4
-2.7
-0.3
-4.1
3.5
-9.6
5.6
-0.3
-5.3
-35.1
1.9
-12.3
-10.3
9.4
8.8
26.8
-9.9
-9.9
4.5
120.0
-2.2
-84.8
-1.2
-1.6
-2.1
-1.8
-5.6
-3.9
YoY
-12.4
16.8
91.1
3.1
3.2
27.4
23.8
2.2
-4.7
-2.0
24.0
13.1
3.4
3.1
-17.6
30.3
-9.5
24.5
38.4
-4.0
24.7
12.0
4.3
8.4
LP
1.0
-27.1
11.6
18.1
6.1
6.2
1.9
5.0
Var.
over
Exp. %
-16.5
3.4
11.0
2.1
0.0
2.8
-8.7
4.4
2.8
5.5
17.2
0.3
3.5
-5.8
-10.5
3.5
-23.6
13.0
10.8
-5.8
-2.2
-7.8
-24.7
2.5
53.0
-3.3
-73.2
2.7
1.8
0.3
0.5
-3.0
-2.4
Automobiles (26)
3,187
Capital Goods (14)
1,112
Cement (12)
635
Chemicals (13)
171
Consumer (21)
939
Consumer Durables (5)
185
EMS (7)
196
Financials (65)
4,476
Banks-Private (12)
938
Banks-PSU (6)
899
Insurance (8)
2,034
NBFC - Lending (24)
522
NBFC - Non Lend.(15)
84
Healthcare (27)
974
Infrastructure (3)
35
Logistics (9)
209
Media (3)
50
Metals (11)
3,085
Oil & Gas (14)
7,374
Ex OMCs (11)
3,529
Real Estate (14)
159
Retail (24)
708
Staffing (4)
114
Technology (16)
2,143
Telecom (5)
799
Utilities (8)
755
Others (26)
866
MOFSL Universe (327)
28,171
Ex Financials (262)
23,695
Ex Metals & Oil (302)
17,712
Ex OMCs (324)
24,326
Nifty (50)
14,464
Sensex (30)
10,922
LP: Loss to profit; PL: Profit to loss
November 2025
4
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Large-caps deliver in-line earnings growth with the overall universe
Within our MOFSL coverage universe, large-caps (88 companies) posted an
earnings growth of 10% YoY – similar to the overall universe. Large-caps (88
companies) have extended their winning streak with 21 consecutive quarters of
earnings growth.
Multiple large-cap sectors clocked impressive growth; 15 of 19 sectors under
coverage delivered a PAT growth. Oil & Gas, Telecom, Metals, Insurance, and
Technology were the key drivers of performance, which contributed 98% to the
incremental YoY accretion in earnings. In contrast, Automobiles, PSU Banks, and
Utilities contributed adversely to the earnings.
PBT
Chg. % Var. over
Sep-25
YoY
Exp. %
-31.8
11.5
54.3
4.2
14.1
5.2
3.1
-0.1
26.5
12.4
12.4
47.3
15.0
38.1
2.2
55.7
12.8
6.0
52.1
1.8
PL
10.2
13.3
4.8
5.3
-28.1
2.2
15.2
0.9
2.1
5.4
4.6
13.2
-0.4
-3.0
3.7
15.3
9.6
11.5
-4.0
9.1
-0.7
1.7
9.4
0.0
PL
3.4
2.2
1.0
1.0
131
78
29
127
3
990
393
307
110
179
107
34
208
443
302
20
23
307
85
86
-18
2,652
1,661
2,001
2,511
PAT
Chg. % Var. over
YoY
Exp. %
-19.7
11.8
41.2
4.3
18.9
3.2
1.3
-5.7
28.1
12.3
11.7
38.7
16.2
35.9
-3.2
9.4
12.1
8.0
67.7
-2.5
Loss
9.5
13.7
4.5
4.3
-22.1
1.4
7.5
0.6
5.2
4.7
5.0
4.8
20.7
-3.6
3.1
8.1
8.2
10.5
-6.5
12.6
-1.1
3.0
3.7
-6.3
PL
2.5
1.2
0.3
0.0
Exhibit 3: Sector-wise 2Q performance of the MOFSL Large-cap Universe companies (INR b)
Sector
(no of companies)
Automobiles (8)
Capital Goods (5)
Cement (4)
Consumer (10)
Consumer Durables (1)
Financials (17)
Banks-Private (4)
Banks-PSU (4)
Insurance (3)
NBFC - Lending (6)
Healthcare (10)
Logistics (1)
Metals (7)
Oil & Gas (5)
Ex OMCs (3)
Real Estate (2)
Retail (3)
Technology (6)
Telecom (2)
Utilities (3)
Others (4)
MOFSL Large-cap Univ. (88)
Ex-Financials (71)
Ex-Metals & Oil (76)
Ex-OMC (86)
Sales
EBITDA
Chg. % Var. over
Chg. % Var. over
Sep-25
Sep-25
Sep-25
YoY
Exp. %
YoY
Exp. %
2,454
889
427
751
48
3,511
741
742
1,708
319
626
92
2,602
6,065
3,227
54
401
1,893
603
647
349
21,411
17,900
12,745
18,573
3.1
11.8
21.9
2.7
5.3
7.1
4.9
1.9
8.7
17.6
13.5
29.7
8.6
5.5
8.2
18.3
21.5
5.7
23.3
-2.4
44.0
7.5
7.6
8.3
8.3
0.0
-3.1
4.7
-1.9
0.3
1.0
2.3
4.9
-0.8
-0.3
3.0
5.9
4.7
3.1
3.5
-4.6
6.1
0.5
1.9
-13.0
19.7
1.6
1.7
0.3
1.4
215
112
61
182
4
1,438
609
489
58
281
163
56
487
911
668
14
39
439
341
213
20
4,696
3,258
3,297
4,452
-27.5
6.7
55.6
3.6
16.9
2.4
6.4
-8.9
9.6
16.5
13.1
27.0
15.7
30.7
9.4
15.4
19.7
7.4
27.8
-4.0
-41.8
9.0
12.2
3.4
5.5
-20.6
-2.0
6.6
1.9
-3.4
2.8
4.3
2.9
9.3
-1.6
5.1
6.3
5.1
7.9
-0.9
-16.3
2.5
2.7
3.4
-14.0
-47.5
1.3
0.6
-1.0
-0.3
160
115
42
171
4
1,319
520
448
118
232
141
43
312
632
445
18
30
410
148
121
-16
3,650
2,331
2,706
3,463
Exhibit 4: Top-10 performers in Large-caps for 2QFY26
INR M
Company
IOC
Tata Steel
Shree Cement
BPCL
Lupin
United Spirits
Adani Ports
Divis Labs
Apollo Hospitals
Britannia
Sales
Chg. % Var. over
Sep-25
YoY
Exp. %
17,88,797 2.9
-2.7
5,86,893
8.9
3.3
43,032
15.5
1.5
10,49,125 2.1
13.3
70,475
27.1
9.3
31,700
11.5
4.3
91,675
29.7
5.9
27,150
16.1
4.1
63,035
12.8
2.7
47,522
4.1
-3.6
EBITDA
Chg. % Var. over
Sep-25
YoY
Exp. %
1,45,832 247.8
50.8
88,965
61.1
4.3
8,751
47.7
-9.3
97,772
116.7
31.5
21,376
72.8
30.0
6,720
32.5
19.5
55,503
27.0
6.3
8,880
24.0
9.8
9,411
15.4
5.8
9,545
21.8
9.2
PBT
Chg. % Var. over
Sep-25
YoY
Exp. %
1,00,656
LP
143.0
45,921
195.8
3.7
4,265
852.8
47.4
85,955
169.1
39.4
17,846
91.0
40.6
6,620
48.1
30.4
42,855
47.3
15.3
8,490
22.3
10.2
6,684
21.2
9.7
8,869
23.4
8.1
Sep-25
76,105
32,699
2,935
64,425
13,272
4,945
34,170
6,414
4,772
6,551
PAT
Chg. % Var. over
YoY
Exp. %
LP
145.5
625.0
17.9
215.1
36.2
168.7
39.7
72.8
28.3
47.6
30.2
38.7
8.1
30.8
9.6
26.0
9.1
23.2
7.3
November 2025
5
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Mid-caps continue to outperform and deliver strong earnings growth
Mid-caps (97 companies) have extended their streak of the past three quarters
and yet again delivered a strong earnings growth of 34% YoY (vs. our est. of 23%).
Multiple mid-cap sectors clocked impressive growth; 16 of 22 sectors under
coverage delivered a double-digit PAT growth. Oil & Gas, Metals, NBFC – Lending,
PSU Banks, and Real Estate were the major growth drivers, which contributed 70%
of the incremental YoY accretion to earnings.
Exhibit 5: Sector-wise 2Q performance of the MOFSL Mid-cap Universe companies (INR b)
Sector
(no of companies)
Automobiles (10)
Capital Goods (4)
Cement (3)
Chemicals (2)
Consumer (7)
Consumer Durables (3)
EMS (2)
Financials (19)
Banks-Private (4)
Banks-PSU (2)
Insurance (3)
NBFC - Lending (5)
NBFC - Non Lending (5)
Healthcare (9)
Logistics (2)
Metals (4)
Oil & Gas (4)
Ex OMCs (3)
Real Estate (4)
Retail (4)
Technology (7)
Telecom (3)
Utilities (2)
Others (8)
MOFSL Mid-cap Univ. (97)
Ex Financials (78)
Ex Metals & Oil (89)
Ex OMCs (96)
Sep-25
482
86
123
55
142
116
158
735
142
157
270
127
39
266
36
483
1,210
202
61
132
204
196
90
402
4,978
4,242
3,285
3,970
Sales
EBITDA
PBT
PAT
Chg. % Var. over
Chg. % Var. over
Chg. % Var. over
Chg. % Var. over
Sep-25
Sep-25
Sep-25
YoY
Exp. %
YoY
Exp. %
YoY
Exp. %
YoY
Exp. %
8.1
-1.4
71
8.3
-2.0
63
8.8
-3.6
47
5.9
-3.9
19.7
0.7
14
39.9
8.7
17
50.7
16.7
12
50.3
17.5
19.6
4.1
20
71.0
13.5
11
150.5
20.2
7
120.9
4.1
-2.4
-2.6
13
13.2
6.9
11
10.6
8.1
8
13.1
9.7
9.7
-0.1
25
0.5
-2.7
24
-0.2
-3.9
18
-0.1
-3.7
11.1
0.4
13
30.3
3.5
13
21.2
0.9
9
23.2
0.1
30.2
2.6
7
39.5
4.5
11
75.7
95.5
4
34.4
-0.2
7.8
2.0
336
7.7
7.1
237
6.3
5.3
181
7.0
3.9
-2.2
3.1
68
-17.9
4.7
19
-55.6
-30.5
14
-54.7
-28.3
1.2
2.5
134
8.4
7.2
103
14.4
7.2
78
15.9
8.4
8.9
-0.5
11
12.3
15.7
14
18.2
52.7
11
3.7
-2.6
23.5
5.5
98
27.7
8.5
74
31.6
11.5
56
31.8
11.1
26.6
3.3
25
30.6
4.6
27
19.2
2.3
21
26.8
5.9
6.5
-1.3
44
-13.2
-21.4
31
-18
-25.6
20
-26.0
-32.7
10.1
2.0
12
7.6
6.0
10
5.2
6.1
7
12.6
5.3
15.7
8.3
78
45.2
25.8
61
79.0
37.1
46
84.4
41.0
-1.0
9.0
110
65.4
13.7
84
79.2
11.2
65
79.0
14.5
-9.3
-1.3
34
-12.5
-10.1
33
-14.6
-8.7
27
-11.3
-1.9
7.6
-5.7
21
4.5
-15.6
27
73.0
12.0
19
42.3
1.3
25.0
1.8
14
22.3
0.3
7
32.6
-0.8
5
33.3
-0.8
15.9
0.1
38
19.7
0.6
32
16.5
-0.8
23
15.2
-1.3
5.0
0.8
71
7.2
0.3
-47
Loss
Loss
-49
Loss
Loss
69.4
6.7
37
87.8
7.7
15
26.5
1.3
13
20.1
22.2
19.3
4.7
56
39.2
12.6
23
291.5
12.7
17
391.0
28.7
9.4
3.6
980
19.2
5.2
629
32.4
8.3
453
33.5
8.2
9.6
3.9
644
26.2
4.3
392
55.6
10.3
272
59.8
11.2
12.8
1.2
791
12.8
2.5
483
22.8
5.1
342
23.0
3.9
11.7
1.8
904
13.8
3.6
578
23.8
6.8
414
24.5
6.6
Exhibit 6: Top-10 performers in Mid-caps for 2QFY26
INR M
Company
Laurus Labs
HPCL
APL Apollo Tubes
Hitachi Energy
Dalmia Bharat
Suzlon Energy
Biocon
Kaynes Tech
Muthoot Finance
Bharat Dynamics
Sales
Chg. % Var. over
Sep-25
Sep-25
YoY
Exp. %
16,535
35.1
5.8
4,033
10,07,811
0.9
11.4
76,167
52,063
9.1
-7.9
4,470
18,326
17.9
-12.4
2,990
34,170
10.7
-1.5
6,960
38,708
84.0
39.0
7,208
42,960
19.7
3.7
8,350
9,062
58.4
-4.0
1,480
39,917
58.5
15.9
32,655
11,470
110.6
61.7
1,875
EBITDA
Chg. % Var. over
Sep-25
YoY
Exp. %
126.1
17.9
2,697
175.1
29.0
51,188
223.8
8.4
3,864
172.5
19.0
3,529
60.4
3.9
3,180
145.0
70.6
5,625
21.6
-0.2
1,710
80.2
-4.1
1,517
70.5
21.9
31,514
89.7
32.1
2,876
PBT
Chg. % Var. over
Sep-25
YoY
Exp. %
1082.5
40.3
1,940
512.7
29.4
38,304
455.2
8.4
3,015
399.8
37.5
2,644
335.6
9.3
2,360
179.0
110.3
5,613
72.0
-19.9
910
78.6
3.7
1,214
84.5
22.2
23,452
72.8
30.0
2,159
PAT
Chg. % Var. over
YoY
Exp. %
877.9
37.8
506.9
29.4
460.4
13.1
405.6
42.5
329.1
11.1
179.0
181.6
149.2
30.0
101.7
6.4
87.4
22.9
76.2
31.9
November 2025
6
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Small-caps report a miss and continue to suffer
In contrast, small-caps (142 companies) continued to experience weakness and
a broad-based miss, with Private Banks, NBFCs (lending and non-lending),
Insurance, Oil & Gas, and Retail posting a YoY earnings dip.
The small-cap earnings dipped 5% YoY (our est. of 3% growth), with 40% of the
coverage universe missing our estimates. Conversely, within the large-cap/mid-
cap universes, 19%/22% of the companies missed our estimates.
Exhibit 7: Sector-wise 2Q performance of the MOFSL Small-cap Universe companies (INR b)
Sector
(no of companies)
Sales
Chg. %
Sep-25
QoQ YoY
15
22.9
14
3.0
14
19.5
16
1.7
-6
11.9
1
2.6
8
-2.6
10
9.7
14
12.1
8
8.6
2
53.8
5
9.7
11.0
9.5
Var.
Var.
over Sep-25
over Sep-25
QoQ YoY
QoQ YoY
Exp. %
Exp. %
2.0
35 14.1 18
6.8
21 20.0 18
4.9
12 15.6 21.9
3.2
9
16.2 31.7
5.6
12 -14.5 117 20.5
4 -32.8 LP
-3.9
19
-2.1 -1.2
-3.1
14
0.9 -1.2
3.5
7
0.7
-1
2.6
5
-7.1 -9
2.7
2
23.7 104.9 13.6
2
29.9 158.1
-1.6
3
-19.9 23
-3.6
2 -43.1 3
2.1
90
0.1 -13.1 3.4
54 14.3 -12.0
2.0
26 -14.3 -23
-0.2
7
-4.7 -63
1.5
-4
Loss Loss
9.7
0 -83.7 -73.8
1.8
49
9.3
-4
5.5
29 47.5 49
3.3
19 14.5 -12.0 4.2
18
0.0 -20.3
0.7
16
1.1
2
-5.7
9
2.2
3
-7.0
11 -11.7 7.5
0.2
5 -24.3 -21.0
-0.8
6
-0.4 17
-11.9
2 -27.9 -7
3.5
12 28.0 16.0 15.0
8
-9.6 -4.9
2.4
16 -13.1 -5
-3.0
18
7.2
-4
-14.1
6
5.4 2.6 -52.9
5
12.1 20.7
-0.9
20
-4.4
5
-4.9
0 -85.0 118
-0.3
3
7.9 8.1
-6.1
2
3.1 13.0
-0.1
7
4.0
-9
-9.1
7
-3.2 -2
-4.8
8
0.6 47.9
1.2
5
0.7 89.0
-3.2
16
-4.8
2
-9.8
11 -14.6 -1
0.3
300 0.4 2.7
-1.0
183 1.4 3.7
0.0
209 0.5 11.5 -2.8
128 -3.2 12.2
0.1
284 1.2 3.2
-0.9
165 0.9 4.6
EBITDA
Chg. %
PBT
Chg. %
Var.
Var.
over Sep-25
over
QoQ YoY
Exp. %
Exp. %
7.7
16 19.4 16
5.0
3.8
6
16.3 31.8
4.3
112.9
3 -28.1 LP
95.6
-1.9
10 -3.8 -3.8
-3.3
-0.8
4
-5.8 -12
-0.6
18.8
1
29.5 134.7 20.5
-29.6
1 -41.3 -1
-28.0
-0.8
41 13.4 -28.2 -1.5
-25.8
5
-1.5 -62 -25.4
-65.7
0 -88.5 -84.2 -78.8
11.2
21 41.3 -14
9.0
-1.3
15
1.2 -18.6 0.2
-8.5
6
-7.6 0
-20.4
2.1
3 -35.1 -17.6 -10.5
-41.9
2 -31.9 -9
-41.6
-18.0
6 -12.3 -9.5 -23.6
-2.2
14 13.6 -6
3.2
-54.4
5
10.0 36.8 -42.8
-82.4
0
PL
PL -119.4
-19.6
2
-9.9 4.3 -24.7
-3.7
5
-3.3 -1
-3.9
11.2
3 -11.3 51.3
1.2
-16.7
8 -21.0 -7
-22.5
-5.9
135 -0.6 -5.4
-8.0
-8.0
94 -5.6 9.7 -10.6
-6.3
122 -1.9 -5.3
-9.1
PAT
Chg. %
Automobiles (8)
251 5.6
Capital Goods (5)
137 14.6
Cement (5)
85 -3.6
Chemicals (11)
116 2.8
Consumer (4)
46
4.2
Consumer Durables (1)
22
5.1
EMS (5)
38 -25.5
Financials (29)
230 4.1
Banks-Private (4)
55 -1.7
Insurance (2)
55
6.7
NBFC - Lending (13)
75
4.8
NBFC - Non Lending (10) 45
7.7
Healthcare (8)
83
2.8
Infrastructure (3)
35 -21.0
Logistics (6)
81
7.6
Media (3)
50
9.0
Oil & Gas (5)
100 5.3
Real Estate (8)
43
9.9
Retail (17)
175 4.7
Staffing (4)
114 5.2
Technology (3)
45
4.3
Utilities (3)
17 17.7
Others (14)
115 1.4
MOFSL Small-cap (142)
1,783 3.5
Ex Financials (113)
1,552 3.5
Ex Metals & Oil (137)
1,683 3.4
LP: Loss to profit; PL: Profit to loss
Exhibit 8: Top-10 performers in Small-caps for 2QFY26
INR M
Company
IIFL Finance
Birla Corporation
ACME Solar
Dr Agarwals Health.
Syrma SGS Tech.
Safari Inds.
CEAT
P N Gadgil Jewellers
Avalon Tech
Sunteck Realty
Sep-25
14,390
22,065
4,677
4,987
11,459
5,336
37,727
21,776
3,825
2,524
Sales
Chg. % Var. over
Sep-25
YoY
Exp. (%)
7.4
0.5
10,570
13.0
3.3
3,049
80.2
2.6
4,002
19.7
0.6
1,361
37.6
7.5
1,152
16.5
3.1
740
14.2
3.8
5,034
8.8
1.4
1,071
39.1
15.9
386
49.3
13.1
778
EBITDA
Chg. % Var. over
Sep-25
YoY
Exp. (%)
23.9
14.9
5,567
72.1
30.9
1,310
81.3
-0.1
1,519
27.3
4.8
537
62.4
25.1
895
54.6
7.6
601
38.9
17.4
2,464
48.6
-13.7
1,092
28.1
5.3
336
108.2
132.0
646
PBT
Chg. % Var. over
Sep-25
YoY
Exp. (%)
24.6
27.0
3,763
LP
159.5
905
737.2
16.3
1,108
61.3
4.2
297
76.6
8.5
641
58.9
6.7
469
52.0
25.8
1,857
71.0
8.5
793
43.3
7.8
250
75.3
96.4
490
PAT
Chg. % Var. over
YoY
Exp. (%)
LP
27.1
LP
139.0
624.4
13.1
79.5
11.0
76.8
12.5
58.0
11.4
52.3
31.2
49.9
5.2
42.9
7.6
41.4
79.7
November 2025
7
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 9: PAT increased 12% YoY for
the MOFSL Universe
MOFSL Universe
Exhibit 10: PAT was up 18% YoY for the
MOFSL Universe, excluding Financials
MOFSL Ex Financials
49 49
32
12 14
18
Exhibit 11: PAT rose 6% YoY for the
MOFSL Universe, sans Metals & O&G
MOFSL Ex Metals & Oil
59
33 32
37
23 24
18 15
57
36
29
21
2
6
6
11
3 0
6 10 11
12
-10
-20
6
-4 -8
3
11 10 9 9
6
Exhibit 12: PAT growth for the Nifty
Universe stood at 2% YoY
Nifty Universe
25 25
20
Exhibit 13: PAT for the Nifty Universe,
sans Financials, was up 3% YoY
Nifty Ex Financials
23
22
12
Exhibit 14: PAT inched up 1% YoY for
the Nifty Universe, sans Metals & O&G
Nifty Ex Metals & Oil
58
36 34 34
16
12
13
14
8
7
4
6
9
7
10
6
3
1
8 7
26
19 17
12 10
6 7 9
2
1 2
3
1
Earnings upgrade-to-downgrade ratio balanced
For the MOFSL Universe, the earnings upgrade-to-downgrade ratio has been
largely balanced at 0.9x in 2QFY26 (for FY26E), with the earnings of 84 companies
having been upgraded by >3%, while the earnings of 98 companies have been
downgraded by >3%.
The beat-miss ratio for the MOFSL Universe was favorable, with 36% of the
companies exceeding our estimates, while 29% reported a miss at the PAT level.
Of the 25 sectors under our coverage, 6/11/8 sectors reported profits above/in
line/below our estimates.
Exhibit 15: The upgrade-to-downgrade ratio trend for the MOFSL Universe – the intensity of earnings cuts moderating
2.7
1.7
1.0
0.7
Earnings upgrade/downgrade ratio
0.6
0.7
0.8
0.6
0.8
0.9
0.9
0.9
1.0
0.6
0.9
0.4
0.4
0.6
0.3
0.9
0.6
November 2025
8
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 16: Surprise/miss ratio for the MOFSL Universe at
1.2x in 2QFY26
MOFSL Universe PAT (Surprise / Miss ratio)
3.4
2.3
1.21.1
1.5
1.0
Exhibit 17: Sectoral surprise/miss ratio at 0.8x in 2QFY26 for
the MOFSL Universe
MOFSL Sector PAT (Surprise / Miss ratio)
5.0
4.3
1.8
1.5
1.1
1.3
0.9
1.4
1.0
0.9
1.2
0.7
1.4
0.9
0.6
1.0
1.2
2.3
1.2
2.8
1.7
2.0
1.3
0.5 0.5
0.9
1.2
0.9
1.2
0.4 0.3
0.8
Exhibit 18: Two- and three-year profit CAGR for the MOFSL Universe
Sector
Automobiles
Capital Goods
Cement
Chemicals
Consumer
Cons. Durables
EMS
Financials
Banks-Private
Banks-PSU
Insurance
NBFC - Lending
NBFC - Non Lend
Healthcare
Infrastructure
Logistics
Media
Metals
Oil & Gas
Real Estate
Retail
Staffing
Technology
Telecom
Utilities
Others
MOFSL Universe
EBITDA (INR b)
CAGR (%)
PBT (INR b)
CAGR (%)
PAT (INR b)
CAGR (%)
2QFY23 2QFY24 2QFY26 2-year 3-year 2QFY23 2QFY24 2QFY26 2-year 3-year 2QFY23 2QFY24 2QFY26 2-year 3-year
228
399
320
-10
12
127
302
245
-10
25
97
221
194
-6
26
93
108
138
13
14
82
102
140
17
20
54
72
97
16
21
47
78
93
9
25
27
58
58
0
29
20
42
39
-3
25
35
31
32
2
-2
29
24
25
2
-5
24
19
19
0
-8
180
205
214
2
6
168
195
200
1
6
128
145
149
2
5
10
14
19
19
23
8
13
18
18
29
7
9
13
20
24
4
4
11
56
44
2
3
12
107
77
2
2
5
49
43
1,307 1,521 1,864
11
13
1,152 1,339 1,610
10
12
874
1,031 1,212
8
12
493
604
703
8
13
402
527
545
2
11
301
409
413
0
11
498
528
624
9
8
305
411
552
16
22
226
294
385
14
19
54
50
65
14
7
223
102
133
14
-16
178
98
121
11
-12
241
314
429
17
21
197
270
335
11
19
150
207
257
11
20
21
25
44
33
28
25
28
46
27
23
19
22
36
28
24
154
179
223
12
13
127
143
182
13
13
98
110
133
10
11
11
12
11
-2
0
6
6
5
-8
-5
4
3
3
-3
-6
44
53
74
18
18
29
34
55
27
25
24
29
44
22
22
9
15
12
-10
12
7
12
8
-20
3
5
8
6
-18
6
374
437
566
14
15
225
264
373
19
18
143
198
254
13
21
631
1,128 1,037
-4
18
404
846
733
-7
22
294
614
521
-8
21
21
30
40
17
24
14
24
49
44
53
15
19
43
50
41
47
60
73
11
16
30
33
38
7
9
22
25
28
6
8
3
4
3
-8
2
2
2
2
0
10
2
2
2
-4
3
390
415
484
8
7
358
381
448
9
8
267
282
335
9
8
263
291
412
19
16
-14
-1
101
LP
LP
-41
-40
35
LP
LP
211
245
258
3
7
88
119
141
9
17
83
84
101
10
7
63
86
91
3
13
20
33
18
-27
-4
10
25
7
-49
-13
4,126 5,313 5,976
6
13
2,890 3,933 4,461
7
16
2,128 2,900 3,240
6
15
November 2025
9
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 19: Sales for the MOFSL Universe up 8% YoY (est. 6%)
48
41
29 27
18
3
-3
25
28
17
12
Exhibit 20: EBITDA for the MOFSL Univ. up 10% YoY (est. 8%)
50
40
29 29
23
21
12 11
7
8
2
11
15
12
5 4 7 8 8 5 6 6 6
8
15
4
2
9 9 11
10
Exhibit 21: PAT for the MOFSL Universe up 12% YoY (est.
9%)
126
96
57
36
23 18
14
21
2 6
29
11
10 11
12
3 0 6
Exhibit 22: EBITDA margin, excluding Financials, expanded
100bp YoY to 17.4%
36
20
47
.
.
Exhibit 23: MOFSL Universe (ex-Nifty) posted a profit growth of 27% YoY
141
80
39
148
126
57
13
9
-12
-3
30
58
49
5
8
-4
-9
16
14
27
-21
Exhibit 24: Sales growth for the MOFSL Universe, barring
Nifty companies, stood at 7% YoY
51
29 27 27
19
4
-1
47
30
17
10
2
0
6 8 7 6 4 5 5
Exhibit 25: EBITDA was up 17% YoY for the MOFSL Universe,
excluding Nifty companies
65
54
31
39
19
11
56
47
25
4 6
0
-12-10
11
10 10 12
17
7
-2 -5
November 2025
10
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Margin for the heavyweight sectors contract
Sales for the MOFSL Universe companies grew 8% YoY (in line). Excluding Metals
and O&G, sales growth was in line at 9% YoY (in line).
Sectoral sales growth: EMS (27%), Cement (20%), Retail (18%), Telecom (18%),
and NBFC – Non-Lending (16%).
The EBITDA margin of the MOFSL Universe (ex-Financials) expanded by 100bp YoY
to 17.4%.
Gross margins for the heavyweight sectors contracted during the quarter. In
2QFY26, 9 of the 15 major sectors under MOFSL Coverage posted a contraction
in gross margin YoY.
Exhibit 26: Gross margin contracted for 60% of the sectors
2QFY24
3QFY24
4QFY24
1QFY25
2QFY25
3QFY25
4QFY25
1QFY26
2QFY26
45.8
27.4
50.3
50.6
42.6
34.0
51.0
39.4
67.6
41.0
52.3
28.6
57.1
13.9
26.4
Change in
GM bps YoY
362
167
165
137
59
30
-15
-51
-52
-73
-80
-97
-663
-831
-859
Infrastructure
40.2
51.7
33.0
39.5
42.2
42.0
43.0
39.0
Consumer Durables
27.2
26.6
25.3
25.1
25.8
26.6
25.6
26.3
Real Estate
51.5
53.3
48.8
51.6
48.7
50.4
50.1
45.9
Logistics
48.6
48.9
49.2
48.6
49.3
49.2
50.4
50.6
Utilities
38.0
39.3
39.9
38.6
42.0
40.8
42.0
42.5
Technology
33.8
34.3
34.2
35.0
33.7
34.0
33.8
33.7
Consumer
52.1
52.4
53.1
52.2
51.2
51.0
51.3
49.4
Metals
49.0
54.6
52.9
40.7
39.9
42.4
41.9
40.2
Healthcare
65.6
66.0
67.2
68.1
68.2
67.6
68.2
69.0
Others
42.2
43.3
43.0
45.5
41.7
46.8
45.9
46.4
Chemicals
53.1
53.9
54.1
52.6
53.1
54.0
52.0
53.2
Retail
29.9
30.6
28.5
31.2
29.6
29.2
29.9
29.8
Cement
57.4
60.4
57.7
58.2
63.7
56.7
57.8
58.8
Oil & Gas
26.3
22.6
23.0
21.5
22.2
23.6
24.3
24.9
Automobiles
34.0
35.2
35.9
36.2
35.0
35.6
35.3
34.4
Source: 240 companies that form part of the MOFSL Universe, excluding Financials, Telecom, Media, and Staffing
Exhibit 27: Few sectors recovered YoY in terms of operating margins
Sep-24
Jun-25
Sep-25
November 2025
11
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Contributions of Oil & Gas in the profit pool at an eight-quarter high
The Oil & Gas contribution to the profit pool saw an improvement for five
consecutive quarters to 16.1% in 2QFY26 – this was at an eight-quarter high.
The BFSI contribution to the overall MOFSL profit pool has been stable over the
last three quarters at 37.4%; it still accounts for more than one-third of the
profits.
The Consumer sector's contribution to the profit pool moderated to 4.6% in
2QFY26 after it climbed to 4.8% in 1QFY26.
Metal’s contribution to the profit pool continues to slip to a four-quarter low of
7.8% in 2QFY26.
Exhibit 29: The IT sector’s contribution to the overall profit
pool climbed for the second successive quarter
Technology
Contribution to MOFSL universe profits (%)
10.7
10.3
10.2
10.0
9.4
9.1
PAT (INR b)
Exhibit 28: Financials’ contribution stable at 37.4% - accounts
for more than one-third of the profits
Financials
Contribution to MOFSL universe profits (%)
40.8
38.4
35.5
36.4
38.8
38.1
37.1
37.1
PAT (INR b)
10.3
9.8
37.4
9.7
Exhibit 30: O&G’s PAT contribution to the overall profit pool
at an eight-quarter high
Oil & Gas
Contribution to MOFSL universe profits (%)
21.2
15.9 15.2
12.5
13.0
13.4
13.5
14.5
16.1
PAT (INR b)
Exhibit 31: Metals’ PAT contribution to the MOFSL Universe
continued to moderate
Metals
Contribution to MOFSL universe profits (%)
9.2
8.4
6.8
6.8
7.0
8.1
8.9
PAT (INR b)
8.6
7.8
Exhibit 32: Auto sector’s contribution to the overall profit
pool slips to 12 quarter low of 6%
Automobiles
Contribution to MOFSL universe profits (%)
8.2
PAT (INR b)
Exhibit 33: Consumer sector’s contribution moderated in
2QFY26
Consumer
Contribution to MOFSL universe profits (%)
5.0
5.1
4.5
5.2
5.0
4.6
PAT (INR b)
7.6
8.2
8.0
7.6
7.6
8.1
7.0
6.0
4.8
4.1
4.6
November 2025
12
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
A story of two halves: 1HFY26 and 2HFY26E
The MOFSL Universe delivered an 11% YoY earnings growth in 1HFY26.
Excluding Metals and O&G, it reported 7% YoY earnings growth.
During 1HFY26, out of 25 sectors under our coverage, 21 sectors saw a YoY
growth in PAT, while four saw a decline. Telecom (loss-to-profit), Cement
(+69%), EMS (+39%), Oil & Gas (+34%), Logistics (+28%), Real Estate (+20%),
Retail (+20%), and Capital Goods (+17%) were top gainers. Conversely,
Automobiles (-8%), Private Banks (-2%), Infrastructure (-2%), and Others (-1%)
were the only laggards.
For 2HFY26, we expect MOFSL earnings to report a growth of 15% YoY (16% for
MOFSL Ex Metals & O&G). This will be contributed by Metals, NBFC - Lending,
Banks-Private, Telecom, and Technology.
Exhibit 34: Sector wise 1HFY26 performance (%) – led by O&G and Telecom
LP
69
39
34
28
20
1HFY26 PAT growth YoY (%)
20
17
15
14
13
13
13
11
10
9
7
7
5
3
2
1
-1
-2
-2
-8
Exhibit 35: Sector wise 2HFY26E performance (%) – Telecom and Cement will continue to be the leaders
908
55
53
43
42
39
2HFY26E PAT growth YoY (%)
33
31
29
28
28
24
21
17
17
15
14
14
13
13
9
9
5
4
4
2
Exhibit 36: Sector-wise contribution to 2HFY26E earnings growth (%)
14
13
11
9
6
5
5
5
4
2HFY26E contribution to PAT growth (%)
4
4
3
3
2
2
2
2
2
1
1
1
1
0
0
0
November 2025
13
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Performance highlights of the Nifty constituents in 2QFY26
The top 5 stocks account for ~300% of the incremental profit YoY
Sales/EBITDA/PBT/PAT growth for Nifty constituents was in line at +8%/+6%/
+5%/+2% YoY in 2QFY26. Excluding Metals & O&G, profits for Nifty constituents
were up 1% YoY (vs. our est. of +3% YoY).
Among Nifty constituents, 24% exceeded our PAT estimates, while 26% missed
our estimates.
Tata Steel, HDFC Bank, TCS, Adani Ports, M&M, Hindalco, Shriram Finance,
Bharat Electronics, Dr Reddy’s Labs, Asian Paints, Apollo Hospitals, and Tata
Consumer delivered higher-than-estimated earnings.
In contrast, Reliance Industries, Tata Motors, Eicher Motors, HDFC Life
Insurance, SBI Life Insurance, Tech Mahindra, Eternal, Sun Pharma, Power Grid,
Interglobe Aviation, Axis Bank, and Coal India missed our profit estimates.
Twelve Nifty companies witnessed earnings upgrades of over 3% in their FY26
EPS estimates, while 10 companies witnessed downgrades of over 3%.
Exhibit 38: Nifty EBITDA up 6% YoY (est. 8%)
45
Exhibit 37: Nifty sales up 8% YoY (in line) in 2QFY26
46
37
28 27
17
2
23
28
18
25
14
7 7 8 8 8 5 7 7 6
23
18 16
20
11
14 12 16
8
5
19
13
10
13
9
8 9 9 11
6
-4
Exhibit 39: Nifty PAT up 2% YoY (est. 5%)
122
Exhibit 40: Nifty EBITDA margin (ex-Financials) was down
30bp YoY to 20%
75
40
11 17
28
24
35
12
13
16
25 25 20
14
8 7 4 6 9
2
November 2025
14
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 41: BFSI, Telecom, Metals, O&G, and Technology to drive FY26E earnings for the Nifty
Sector
Automobiles
BFSI
Capital Goods
Cement
Consumer
Healthcare
Logistics
Metals
Oil & Gas
Retail
Technology
Telecom
Utilities
Others
Nifty
FY24
580
2,467
170
134
416
217
89
595
1,261
45
1,009
113
341
120
7,559
Review 2QFY26 PAT (INR b)
FY25
FY26E
FY27E
620
563
710
2,804
3,078
3,536
200
240
285
110
136
173
390
413
465
249
262
286
108
135
158
600
706
875
1,081
1,172
1,227
53
69
81
1,101
1,166
1,246
176
304
409
357
382
446
118
113
159
7,965
8,738
10,055
FY28E
832
4,175
338
209
506
320
178
962
1,319
95
1,309
533
487
197
11,459
FY24
125
26
27
16
14
24
16
10
18
24
3
Loss
6
749
24
Growth YoY (%)
FY25
FY26E
FY27E
7
-9
26
14
10
15
17
20
19
-18
24
27
-6
6
13
15
5
9
22
25
17
1
18
24
-14
8
5
17
31
17
9
6
7
LP
73
35
4
7
17
-2
-4
40
5
10
15
FY28E
17
18
19
21
9
12
12
10
7
17
5
30
9
24
14
Exhibit 42: Sectoral upgrades/downgrades for the MOFSL Universe
PAT (INR b) - preview
Sector
FY26E FY27E FY28E
Automobiles
987
1,198
1,421
Capital Goods
457
537
646
Cement
234
303
366
Chemicals
82
105
119
Consumer
632
721
796
Consumer Durables
62
75
90
EMS
27
42
58
Financials
5,273
6,213
7,351
Banks-Private
1,853
2,223
2,664
Banks-PSU
1,608
1,866
2,192
Insurance
609
677
747
NBFC - Lending
1,057
1,274
1,546
NBFC - Non Lending
146
173
203
Healthcare
580
665
761
Infrastructure
23
30
39
Logistics
180
214
248
Media
27
29
32
Metals
1,214
1,491
1,644
Oil & Gas
1,866
1,872
1,973
Excl. OMCs
1,405
1,519
1,615
Real Estate
194
231
289
Retail
139
174
212
Staffing
10
11
13
Technology
1,335
1,448
1,546
Telecom
118
261
442
Utilities
514
597
675
Others
242
368
487
MOFSL Universe
14,197 16,586 19,208
Note: PL: Profit to loss; LP: Loss to profit
PAT (INR b) - review
FY26E FY27E FY28E
957
1,188
1,393
457
534
641
241
304
366
81
100
116
631
721
798
61
75
90
26
42
58
5,428
6,308
7,403
1,854
2,223
2,675
1,712
1,910
2,201
651
726
798
1,060
1,267
1,516
151
181
213
567
655
752
22
30
39
179
214
248
24
27
30
1,234
1,503
1,659
2,044
1,981
1,961
1,410
1,484
1,582
193
229
288
139
173
211
9
11
12
1,338
1,447
1,542
144
265
455
479
580
659
265
344
458
14,522 16,731 19,180
Upgrade/downgrade (%)
FY26E
FY27E
FY28E
-3.1
-0.8
-1.9
0.1
-0.5
-0.8
3.0
0.3
0.0
-2.0
-4.9
-2.4
-0.1
0.0
0.2
-1.5
-1.2
-0.7
-3.0
-0.1
-1.0
2.9
1.5
0.7
0.0
0.0
0.4
6.5
2.4
0.4
6.8
7.2
6.9
0.4
-0.5
-1.9
3.4
5.0
5.3
-2.3
-1.5
-1.2
-4.0
-2.5
-0.1
-0.8
0.0
0.1
-9.0
-4.9
-4.4
1.6
0.8
0.9
9.5
5.8
-0.6
0.3
-2.3
-2.1
-0.5
-0.6
-0.3
-0.1
-0.6
-0.2
-3.9
-2.2
-3.3
0.2
-0.1
-0.3
22.3
1.4
2.9
-6.6
-2.8
-2.4
9.5
-6.3
-6.0
2.3
0.9
-0.1
Growth YoY (%)
FY26E FY27E FY28E
-2.0
24.2
17.2
20.3
16.7
20.1
42.2
26.0
20.4
20.7
24.1
16.0
8.5
14.2
10.7
14.9
21.5
20.2
49.3
59.4
36.4
9.8
16.2
17.4
4.4
19.9
20.3
7.2
11.6
15.2
13.6
11.5
10.0
21.7
19.5
19.7
18.6
20.4
17.6
8.1
15.6
14.7
24.3
33.3
30.3
22.2
19.7
15.7
2.9
12.8
11.9
18.8
21.8
10.4
24.1
-3.1
-1.0
5.5
5.2
6.6
37.2
18.7
25.7
28.1
24.1
22.2
19.9
19.1
12.2
7.2
8.2
6.5
LP
83.3
72.0
8.8
21.0
13.6
57.5
29.8
32.9
14.6
15.2
14.6
November 2025
15
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 43: Nifty delivered an 2% YoY profit growth in 2QFY26
Company
Sep
2025
Sales
Chg. Var.
YoY (%) (%)
EBITDA
Sep
Chg. Var.
2025 YoY (%) (%)
PBT
Sep
Chg. Var.
2025 YoY (%) (%)
46
24
17
123
43
7
16
66
15
17
61
14
63
5
67
20
102
33
31
172
244
291
63
68
43
6
11
164
5
19
5
68
43
8
57
43
37
34
17
10
5
265
43
125
69
59
1
44
-37
-25
2,728
1,760
2,114
196
104
89
83
47
21
32
22
23
20
23
22
14
13
9
2
11
13
13
7
11
16
4
14
-17
4
3
6
23
4
6
0
0
1
0
-3
8
-5
-3
0
-6
7
-3
-17
-19
-26
-46
83
PL
Loss
5
5
5
4
12
0
9
15
10
-4
0
-2
16
8
14
2
0
32
10
2
3
7
2
10
-4
6
1
-2
1
6
3
4
8
0
-4
3
NA
-2
PAT
Sep
Chg. Var.
2025 YoY (%) (%)
33
16
12
68
34
5
14
49
11
13
45
10
39
4
49
15
74
25
23
133
186
182
45
22
33
5
8
124
4
14
4
51
32
7
42
625
152
75
74
39
26
24
23
20
18
18
17
16
15
14
14
13
12
11
11
11
10
8
8
7
6
6
5
5
4
3
1
1
1
0
-3
-4
-4
-4
-5
-7
-8
-11
-18
-26
-31
-63
-73
PL
Loss
2
3
1
18
5
-4
5
8
9
-5
1
-3
15
5
12
1
-2
34
15
3
3
5
6
11
-10
4
-21
0
4
4
4
8
3
-6
-4
3
NA
-3
0
-8
-2
-9
2
-9
0
-16
-2
-8
-30
-78
NA
PL
Loss
-3
-6
-2
EBITDA Margin
Sep 2025
Chg.
(%)
YoY bp
15.2
15.8
15.8
56.7
60.5
14.9
24.5
82.3
10.0
29.4
14.5
17.6
10.0
26.7
13.6
24.1
23.9
20.5
73.7
27.3
88.5
18.0
25.6
29.8
10.5
17.2
3.8
80.3
13.5
25.0
5.2
34.3
20.0
225.7
20.9
72.1
27.9
23.0
15.5
22.2
6.6
63.5
80.1
53.6
75.8
19.4
1.8
15.6
1.2
4.7
25.0
20.0
27.8
4.9
2.1
3.3
4.0
-1.3
0.3
-1.0
-0.4
-0.5
-0.9
0.2
2.2
-0.3
0.0
0.0
-3.3
-0.1
0.2
0.8
1.2
6.5
1.2
1.6
1.4
-1.3
1.3
-0.5
-3.1
-1.3
-1.8
-0.3
1.7
0.0
-43.3
-1.2
-0.6
-0.6
-0.8
2.3
-1.1
-0.5
-6.8
-5.5
-0.2
-3.7
-4.0
-3.0
-1.1
-10.4
-9.4
-0.6
-0.4
-1.3
High PAT growth
Tata Steel
587
9
3
89
61
4
JSW Steel
452
14
5
71
31
11
Ultratech Cement
196
20
6
31
53
1
Bharti Airtel
521
26
2
296
35
3
Adani Ports
92
30
6
56
27
6
Apollo Hospitals
63
13
3
9
15
6
Eicher Motors
62
45
2
15
39
-3
Bajaj Finance
108
22
0
89
21
0
Titan Company
187
29
14
19
23
2
Bharat Electronics
58
26
10
17
22
18
Mahindra & Mahindra
334
21
2
49
23
5
Asian Paints
85
6
5
15
21
11
Larsen & Toubro
680
10
-5
68
7
-3
Max Healthcare
26
21
-1
7
21
4
Medium/Low PAT growth
Hindalco
661
13
4
90
14
20
Dr Reddy’ s Labs
88
10
3
21
-4
5
Infosys
445
9
0
107
8
0
Bajaj Auto
149
14
2
31
15
4
Shriram Finance
60
10
0
44
11
1
TCS
658
2
1
180
7
4
HDFC Bank
316
5
2
279
13
10
Reliance Inds.
2,546
10
3
459
17
0
NTPC
392
-3
-14
100
4
-15
Bajaj Finserv
305
10
-8
91
16
-4
Maruti Suzuki
421
13
5
44
0
13
Trent
47
17
-1
8
27
6
Grasim Industries
96
26
4
4
13
14
ICICI Bank
215
7
2
173
3
0
Tata Consumer
50
18
4
7
7
6
Cipla
76
8
4
19
0
4
HDFC Life Insur.
193
14
1
10
8
-1
ITC
195
-6
-10
67
-1
-3
Wipro
227
2
-1
45
2
1
Jio Financial
3
25
NA
6
5
NA
HCL Technologies
319
11
1
67
5
3
PAT Decline
Kotak Mahindra Bank
73
4
0
53
3
-1
Sun Pharma
144
9
3
40
6
1
Hind. Unilever
163
2
0
37
-1
3
Tech Mahindra
140
5
1
22
24
4
Nestle
56
11
5
13
5
5
SBI Life Insurance
251
23
7
17
14
5
State Bank
430
3
6
273
-7
1
Power Grid Corp.
100
-3
-6
80
-9
-13
ONGC
330
-3
2
177
-3
-4
Axis Bank
137
2
4
104
-3
1
Coal India
302
-2
1
58
-18
-31
Eternal
136
183
69
2
6
-24
Adani Enterprises
212
-6
NA
33
-12
NA
Tata Motors*
892
-12
-4
10
-91
-87
Interglobe Aviation
186
9
1
9
-64
-67
Nifty Universe
14,464
8
1
3,609
6
-2
Nifty Ex Financials
12,373
8
1
2,471
6
-3
Nifty Ex Metals & Oil
9,587
8
0
2,665
3
-2
Note: PL: Profit to loss; LP: Loss to profit. *Tata Motors include PV & CV
0
33
-7
28
-1
25
-6
12
3
7
-8
5
18
168
-4
31
-6
98
-7
51
-28
44
-66
1
NA
5
PL
-19
Loss -24
-1 1,896
-5 1,224
0
1,475
November 2025
16
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
MOFSL coverage revisions from our preview stance
Small-caps experience severe cuts
MOFSL Universe estimated PAT experienced an upgrade of 2.3%/0.9% for
FY26E/FY27:
MOFSL Universe witnessed a rise of 2.3% for FY26, led by Oil & Gas,
PSU Banks, Telecom, Insurance, and Metals. The MOFSL Large-cap Universe
experienced an upgrade of 2.5% for FY26, while the MOFSL Mid-cap Universe
stood out with a 3.4% earnings upgrade for FY26.
In contrast, the small-cap universes experienced earnings cuts of 3.9% for FY26.
Exhibit 44: Earnings revisions of MOFSL Universe from our preview stance (2QFY26)
Sector
Automobiles
Banks-Private
Banks-PSU
Insurance
NBFC - Lending
NBFC - Non Lending
Capital Goods
Cement
Chemicals
Consumer
Consumer Durables
EMS
Healthcare
Infrastructure
Logistics
Media
Metals
Oil & Gas
Real Estate
Retail
Staffing
Technology
Telecom
Utilities
Others
MOFSL Universe
Large Cap
Mid Cap
Small Cap
PAT (INR b) @ Preview
FY26E
FY27E
FY28E
987
1,198
1,421
1,853
2,223
2,664
1,608
1,866
2,192
609
677
747
1,057
1,274
1,546
146
173
203
457
537
646
234
303
366
82
105
119
632
721
796
62
75
90
27
42
58
580
665
761
23
30
39
180
214
248
27
29
32
1,214
1,491
1,644
1,866
1,872
1,973
194
231
289
139
174
212
10
11
13
1,335
1,448
1,546
118
261
442
514
597
675
242
368
487
14,197
16,586
19,208
11,638
13,338
15,265
1,867
2,317
2,790
693
932
1,153
PAT (INR b) @ Review
FY26E
FY27E
FY28E
957
1,188
1,393
1,854
2,223
2,675
1,712
1,910
2,201
651
726
798
1,060
1,267
1,516
151
181
213
457
534
641
241
304
366
81
100
116
631
721
798
61
75
90
26
42
58
567
655
752
22
30
39
179
214
248
24
27
30
1,234
1,503
1,659
2,044
1,981
1,961
193
229
288
139
173
211
9
11
12
1,338
1,447
1,542
144
265
455
479
580
659
265
344
458
14,522
16,731
19,180
11,926
13,470
15,212
1,930
2,351
2,826
666
910
1,141
FY26E
-3.1
0.0
6.5
6.8
0.4
3.4
0.1
3.0
-2.0
-0.1
-1.5
-3.0
-2.3
-4.0
-0.8
-9.0
1.6
9.5
-0.5
-0.1
-3.9
0.2
22.3
-6.6
9.5
2.3
2.5
3.4
-3.9
% Revision
FY27E
-0.8
0.0
2.4
7.2
-0.5
5.0
-0.5
0.3
-4.9
0.0
-1.2
-0.1
-1.5
-2.5
0.0
-4.9
0.8
5.8
-0.6
-0.6
-2.2
-0.1
1.4
-2.8
-6.3
0.9
1.0
1.5
-2.3
FY28E
-1.9
0.4
0.4
6.9
-1.9
5.3
-0.8
0.0
-2.4
0.2
-0.7
-1.0
-1.2
-0.1
0.1
-4.4
0.9
-0.6
-0.3
-0.2
-3.3
-0.3
2.9
-2.4
-6.0
-0.1
-0.3
1.3
-1.1
November 2025
17
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Nifty EPS witnesses an increase of 1.2%/0.5% for FY26E/FY27E
The Nifty EPS estimate for FY26 was raised by 1.2% to INR1,109, largely owing to
SBI, HDFC Bank, ONGC, Bharti Airtel, and Hindalco. FY27E EPS was also raised by
0.5% to INR1,280 (from INR1,274) due to upgrades in SBI, Tata Steel, Bharti
Airtel, HDFC Bank, and ICICI Bank.
EPS Upgrade / Downgrade (%)
FY26E
FY27E
FY28E
9.3
2.7
0.6
7.6
-0.7
-2.1
7.2
1.2
-1.4
7.1
2.8
1.5
5.8
9.1
6.0
5.8
4.3
6.2
5.3
1.9
4.0
4.5
3.2
2.1
4.2
0.7
2.8
3.2
-1.0
-0.9
3.0
2.4
2.8
3.0
2.7
2.3
2.9
0.1
0.1
2.7
2.2
2.3
1.5
1.4
1.3
1.3
0.5
-2.1
0.6
-0.1
-0.1
0.5
1.3
1.6
0.1
-2.0
-5.1
0.1
0.0
0.0
0.1
1.1
1.3
0.0
-0.5
-0.2
0.0
0.3
0.4
-0.1
0.7
2.8
-0.2
0.2
-0.4
-0.2
-0.1
-0.1
-0.4
0.7
-0.4
-0.4
2.3
2.7
-0.6
-5.9
-5.9
-0.6
-0.4
-0.4
-0.7
-2.8
-2.4
-0.8
0.0
0.0
-0.8
-0.1
-0.3
-1.1
-1.1
-0.8
-1.1
-0.5
-2.0
-1.1
0.7
-0.6
-1.2
1.5
0.8
-3.0
-3.5
-3.7
-3.5
-3.1
-2.9
-3.7
-3.3
-2.2
-6.1
-3.9
-4.0
-6.3
-3.7
-2.0
-9.2
-1.7
-1.5
-10.7
-5.1
-4.9
-21.6
-10.1
-18.3
-23.2
-1.5
-0.6
-37.9
-39.5
-44.2
1.2
0.5
0.0
EPS Growth (%)
FY27E
8.7
-4.8
1.1
28.1
50.8
15.7
12.4
19.7
11.5
28.5
9.4
18.4
-8.4
19.6
18.8
18.6
4.7
11.7
1.2
30.0
11.6
5.5
17.0
20.1
19.6
19.0
13.6
19.6
0.9
13.8
26.6
63.7
24.9
9.6
26.4
29.8
27.3
6.7
10.1
16.8
8.3
12.4
23.0
18.9
49.2
42.4
246.9
15.5
Exhibit 45: FY26E EPS revisions – Twelve Nifty constituents saw upgrades of over 3%, while 10 witnessed downgrades of over 3%
Company
State Bank
ONGC
Hindalco
Bharti Airtel
Tata Steel
Asian Paints
Trent
Shriram Finance
HDFC Bank
Ultratech Cement
Bajaj Auto
Titan Company
Dr Reddy’ s Labs
Apollo Hospitals
Tata Consumer
Bharat Electronics
Infosys
Eicher Motors
Wipro
Max Healthcare
HCL Technologies
TCS
Adani Ports
Mahindra & Mahindra
Kotak Mahindra Bank
Larsen & Toubro
ICICI Bank
Nestle
Cipla
Hind. Unilever
Bajaj Finance
JSW Steel
Grasim Industries
ITC
Axis Bank
Tech Mahindra
Maruti Suzuki
SBI Life Insurance
Reliance Inds.
Sun Pharma
Power Grid Corp.
Coal India
NTPC
HDFC Life Insur.
Tata Motors
Interglobe Aviation
Eternal
Nifty (50)
Current EPS (INR)
FY26E
FY27E
FY28E
95.5
103.8
120.4
33.3
31.7
31.9
74.1
75.0
79.1
52.4
67.1
87.4
9.4
14.2
15.7
46.8
54.1
61.9
52.4
58.9
67.2
51.7
61.8
72.9
49.1
54.7
64.7
272.7
350.5
423.9
338.9
370.8
407.5
56.8
67.2
79.5
68.9
63.1
68.5
130.1
155.6
193.1
17.0
20.1
22.1
8.3
9.9
11.5
69.1
72.4
76.7
193.1
215.7
245.0
12.5
12.6
13.1
18.7
24.3
25.6
65.9
73.6
77.0
141.8
149.5
156.1
62.6
73.3
82.3
120.5
144.7
167.6
105.3
126.0
152.4
130.2
154.9
184.9
72.8
82.7
95.7
16.9
20.1
22.5
61.3
61.8
68.7
45.8
52.1
56.4
32.7
41.4
52.5
44.2
72.4
89.9
84.4
105.4
127.0
16.8
18.5
19.8
78.3
99.0
119.6
60.1
78.0
86.3
484.4
616.5
720.0
24.1
25.7
28.0
55.6
61.2
67.8
49.2
57.5
64.7
17.6
19.0
19.9
51.3
57.7
60.3
22.5
27.7
31.1
8.4
10.0
11.5
32.9
49.0
61.1
170.6
242.8
274.7
0.8
2.7
5.6
1,109
1,280
1,472
FY26E
9.9
9.1
-0.9
72.8
179.4
10.1
21.3
17.4
11.5
31.4
13.2
34.3
2.4
29.4
21.1
15.0
8.4
11.8
-0.2
23.7
3.2
5.6
24.9
22.1
-5.4
21.9
9.0
5.4
-2.3
3.3
21.0
184.0
13.9
5.4
-8.2
25.3
9.1
-0.3
8.0
4.4
5.3
-10.6
8.4
0.2
-48.0
-9.3
32.2
9.4
FY28E
16.0
0.5
5.5
30.3
10.5
14.5
14.1
17.8
18.3
20.9
9.9
18.2
8.6
24.1
9.5
16.2
5.9
13.6
3.6
5.5
4.6
4.4
12.3
15.8
21.0
19.4
15.8
11.8
11.1
8.2
27.0
24.2
20.5
7.4
20.8
10.7
16.8
9.0
10.8
12.6
4.7
4.6
12.3
14.7
24.5
13.1
107.7
14.9
November 2025
18
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 46: We estimate a 12% CAGR for the Nifty free-float PAT over FY25–27
Company
High PAT Growth (20%+)
JSW Steel
Eternal
Tata Steel
Bharti Airtel
Bajaj Finserv
Ultratech Cement
Tech Mahindra
Max Healthcare
Titan Company
Apollo Hospitals
Bajaj Finance
Mahindra & Mahindra
Adani Ports
Larsen & Toubro
Tata Consumer
Medium PAT Growth (0-20%)
Grasim Industries
Shriram Finance
Maruti Suzuki
Bharat Electronics
Trent
NTPC
Interglobe Aviation
Asian Paints
Nestle
Eicher Motors
ICICI Bank
Bajaj Auto
HDFC Bank
State Bank
Sun Pharma
HDFC Life Insur.
Reliance Inds.
Hind. Unilever
Axis Bank
ITC
HCL Technologies
Power Grid Corp.
Infosys
Kotak Mahindra Bank
TCS
SBI Life Insurance
ONGC
Wipro
Coal India
Hindalco
Jio Financial
Adani Enterprises
PAT de-growth (<0%)
Cipla
Dr Reddy’ s Labs
Tata Motors
Nifty (PAT free float)
Sales
CAGR %
25-27
18
12
142
8
17
32
13
6
21
20
14
23
18
16
15
10
5
18
17
15
17
17
8
12
8
11
16
13
12
10
10
11
16
5
8
10
8
8
6
7
11
4
16
-9
4
5
6
0
0
6
6
8
6
8
EBITDA Margin (%)
FY26E
25
18
2
15
57
68
19
15
26
11
15
82
14
60
10
14
29
4
74
11
29
18
30
24
18
23
25
83
20
92
68
28
79
18
23
79
33
21
85
24
75
27
7
18
20
31
13
189
15
10
24
24
8
26
FY27E
25
20
2
17
57
64
21
18
27
11
15
81
15
61
11
15
30
6
75
12
29
18
32
28
19
24
25
84
20
85
67
29
80
19
24
79
34
21
84
24
75
27
7
19
20
33
13
189
15
11
23
23
10
27
FY28E
25
21
3
18
58
61
21
18
27
11
15
81
15
61
11
15
31
7
75
12
28
18
33
29
19
25
25
84
20
86
67
30
80
21
24
81
34
21
83
24
76
27
7
19
20
34
13
189
15
12
23
23
10
28
EBITDA
CAGR %
25-27
23
35
108
29
21
23
27
23
22
23
18
22
18
16
17
14
10
50
17
16
17
23
12
15
12
12
14
13
12
13
10
14
16
11
8
11
7
7
5
7
4
6
13
2
3
6
3
0
0
-5
0
-1
-7
12
PAT (INR b)
FY26E
1,567
108
7
117
304
131
80
53
18
51
19
203
145
135
179
17
6,944
56
97
152
61
19
218
66
45
32
53
518
92
751
867
118
18
752
108
243
211
179
163
287
209
515
24
419
131
316
165
16
40
228
49
57
121
5,046
FY27E
2,045
177
24
177
409
158
103
69
24
60
22
257
174
158
213
20
7,727
69
116
194
72
21
269
94
52
39
59
589
102
837
958
138
21
828
123
307
231
200
177
301
250
544
26
399
133
355
166
16
40
283
50
53
180
5,827
FY28E
2,490
219
50
196
533
186
125
77
25
71
28
326
201
178
254
22
8,631
84
137
226
84
24
302
106
59
43
67
682
113
991
1,111
155
25
917
133
371
248
209
185
318
303
567
28
401
137
372
176
16
40
337
55
57
225
6,698
PAT
CAGR %
25-27
38
116
114
105
53
34
30
28
27
26
24
24
21
21
20
20
9
19
19
18
17
17
15
14
13
12
12
12
12
11
11
10
9
9
8
8
8
7
7
7
6
6
3
2
1
0
0
0
0
-9
-1
-3
-12
12
Contbn to
Delta %
46
7
1
6
11
3
2
1
0
1
0
4
3
2
3
0
56
1
2
3
1
0
3
1
1
0
1
6
1
8
9
1
0
6
1
2
2
1
1
2
1
3
0
1
0
0
0
0
0
-3
0
0
-2
100
November 2025
19
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
PAT growth YoY in FY26E (%)
FY26E PAT growth YoY (%)
29.1
24.7
FY26E earnings highlights: Global commodities, NBFC-Lending,
Telecom, and PSU Banks to drive the incremental earnings
14.6
12.1
MOFSL
Univ.
Large Mid Cap Small
Cap
Cap
The MOFSL Universe is likely to deliver sales/EBITDA/ PAT growth of 6%/12%/15%
YoY in FY26. The Financials, Oil & Gas, and Metals sectors are projected to be the
key growth engines, with 10%, 24%, and 9% YoY earnings growth, respectively.
These three sectors are likely to contribute 58% of the incremental YoY accretion in
earnings.
Further, we categorized the coverage stocks, based on market capitalization, into
large-cap, mid-cap, and small-cap segments.
Notably, our large-cap universe is anticipated to deliver a 12% YoY earnings growth
in FY26E, while mid-cap is estimated to deliver 29% YoY growth, and small-cap is
estimated to deliver a 25% YoY growth in FY26E.
79
78
77
72
52
50
42 39
24
Exhibit 47: Oil & Gas, Metals, NBFCs, Telecom, and PSU Banks to lead the incremental profits for FY26E (PAT, INR b)
397 195 189 173 115 97
90
32 31
14
9
8
4
2
1
-19
Exhibit 48: Delta contribution to FY26E profit for the MOFSL Universe (%)
21
11
10
9
6
Delta Contribution (%)
5
5
4
4
4
4
3
3
2
2
2
2
1
1
0
0
0
0
0
-1
Exhibit 49: Sector-wise FY26E performance (%) – Telecom, EMS, and Cement the leaders
LP
FY26E PAT growth YoY (%)
58
49 42
37
28 24 24 22 22
21 20 20 19 19 15
15
14
9
9
8
7
7
4
3
-2
November 2025
20
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
MOFSL Universe sees 10% earnings downgrade for FY26E on a
TTM basis
Telecom experiences an upgrade
Over the last one year, earnings revisions for the MOFSL Universe saw a cut of
10%.
Telecom, Insurance, Real Estate, and NBFC – Non-Lending sectors witness
upgrades. However, 20 sectors saw downgrade in earnings for FY26.
Exhibit 50: Telecom, Insurance, and Real Estate witnessed upgrades over the last one year
13
10
10
6
-2
% revision in PAT
-5
-6
-6
-7
-10
-10
-11
-11 -12 -12 -12 -15 -16
-16
-19
-20 -21
-22
-26 -35
Note: Comparable MOFSL Universe of 276 companies
Exhibit 51: Annual Sales/EBITDA/PAT estimates for the MOFSL Universe
Sector
Automobiles
Capital Goods
Cement
Chemicals
Consumer
Consumer Durables
EMS
Financials
Banks-Private
Banks-PSU
Insurance
NBFC - Lending
NBFC - Non Lending
Healthcare
Infrastructure
Logistics
Media
Metals
Oil & Gas
Excl. OMCs
Real Estate
Retail
Staffing
Technology
Telecom
Utilities
Others
MOFSL Universe
Sales (INRb)
Growth YoY (%) EBITDA (INRb) Growth YoY (%)
PAT (INRb)
Growth YoY (%)
FY26E
FY27E
FY26E FY27E FY26E FY27E FY26E FY27E FY26E FY27E FY26E FY27E
13,871
15,553
9
12
1,616
1,962
-4
21
957
1,188
-2
24
4,942
5,646
18
14
665
773
19
16
457
534
20
17
2,764
3,084
15
12
455
554
36
22
241
304
42
26
713
802
7
12
139
168
15
21
81
100
21
24
3,903
4,292
9
10
893
1,008
7
13
631
721
9
14
847
977
10
15
89
109
16
22
61
75
15
22
815
1,160
39
42
49
74
39
51
26
42
49
59
18,516
21,041
8
14
8,420
9,677
10
15
5,428
6,308
10
16
3,863
4,524
6
17
3,021
3,446
9
14
1,854
2,223
4
20
3,673
4,212
4
15
2,642
2,954
5
12
1,712
1,910
7
12
8,505
9,370
9
10
850
993
14
17
651
726
14
11
2,130
2,531
16
19
1,720
2,058
15
20
1,060
1,267
22
19
346
403
17
17
187
225
20
21
151
181
19
20
3,886
4,330
10
11
920
1,047
9
14
567
655
8
16
185
229
7
24
56
71
13
28
22
30
24
33
847
975
15
15
296
345
19
17
179
214
22
20
192
204
7
7
40
43
10
7
24
27
3
13
12,798
13,971
8
9
2,499
2,894
15
16
1,234
1,503
19
22
33,768
33,448
-4
-1
4,460
4,512
18
1
2,044
1,981
24
-3
18,474
18,873
-2
2
3,260
3,471
8
6
1,410
1,484
6
5
771
924
28
20
235
281
41
20
193
229
37
19
2,981
3,477
19
17
331
391
20
18
139
173
28
24
466
528
11
13
14
16
15
19
9
11
20
19
8,615
9,171
7
6
1,927
2,090
7
8
1,338
1,447
7
8
3,211
3,571
15
11
1,664
1,852
18
11
144
265
LP
83
3,733
4,189
14
12
1,326
1,526
13
15
479
580
9
21
3,665
4,761
26
30
570
747
16
31
265
344
58
30
1,21,488 1,32,331
6
9
26,662 30,140
12
13
14,522 16,731
15
15
Source: MOFSL
November 2025
21
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
SECTOR-WISE:
Highlights/Surprise/Guidance
AUTOS: Outlook improves materially across segments after GST rate cuts
Demand recovers in 2Ws and tractors in 2Q:
The auto segment (excluding tractors) saw a pickup in demand in
anticipation of a good festive season and the GST rate cuts toward the end of 2Q. Aggregate auto OEM sector
volumes grew 13.6% YoY in 2Q (exc. JLR), led by the tractor segment (+31%), 2Ws (+7%), and CVs (+8%). Tractor
segment saw robust growth on the back of strong rural sentiments, further boosted by GST rate cut benefits.
Within 2Ws, scooters were the key growth drivers with 12% YoY growth in 2Q. On the other hand, motorcycle
volumes were up 5%, whereas mopeds declined 4%. Within CVs, LCVs grew 10% and MHCVs rose 6%. PVs saw a
1.5% YoY decline in volumes in 2Q. Car volumes were flat, while UVs saw a 2% decline in 2Q.
Operational performance for our coverage universe largely in line:
Aggregate revenue for auto OEMs rose 3.5%
YoY; excluding TTMT, revenue saw healthy 15.6% YoY growth. Growth was led by the 2W segment (+22%),
followed by PVs (+13%). Revenue growth for all OEMs was in line with our estimates. On the operational front,
both MM and MSIL posted better-than-expected margins. MSIL was able to maintain margins QoQ despite the
sharp rise in discounts QoQ. Even MM margins were ahead of estimates as farm segment margins remained
strong in a seasonally weak quarter. For most of the other OEMs, operational performance was in line with our
estimates. Aggregate earnings growth for our OEM coverage universe (excl. TTMT) was up 15% YoY and was in
line with our estimates. The highlight of the quarter was the record-low performance of newly listed TTMT PV,
largely due to macro headwinds at JLR. Further, this quarter saw many OEMs post MTM losses due to hardening
of yields, which in turn limited the earnings upside. Quite a few auto ancillaries in 2Q posted beat to our
estimates. Among auto ancillaries APTY, CEAT, BHFC, CIE, Craftsman, HAPPY, SAMIL, SONA and TI all posted
better than expected margins. BIL and Exide disappointed on margins.
Auto growth expectations revive after GST rate cuts:
Auto demand was muted in the early part of the fiscal
until Aug’25, with most segments expected to lag their previous growth forecasts. However, after the GST rate
cuts, we see a healthy demand recovery, especially in PVs and 2Ws. Tractor momentum has further picked up,
led by the dual benefits of GST rate cuts. We also expect CV demand to revive with a lag as consumption picks
up. Further, commentary from most OEMs seems to suggest that input costs are likely to remain stable in the
coming quarters. Further, on the back of a pickup in demand, we expect discounts to gradually decline in the
coming quarters. This is likely to drive a healthy earnings growth for auto OEMs within our coverage universe
(excl. TTMT). For TTMT PV, the outlook remains weak given the muted demand outlook in its key regions.
Further, export-focused auto ancillary companies are now facing an uncertain demand environment given the
tariff-led uncertainty in key regions.
Slight moderation in earnings:
After 2Q earnings, there have been no material changes in earnings estimates for
our coverage universe, except for TTMT PV, which saw a sharp earnings downgrade due to the macro headwinds
that JLR continues to face. In fact, none of the other OEMs within our coverage universe has seen any major
earnings change after 2Q. Auto ancillary companies that witnessed an earnings cut for FY26 include Amara (6%),
BIL (7%), ENDURANCE (6%) and MRF (7%). On the other hand, auto ancillary that saw earnings upgrades include
BHFC (7%) and SAMIL (+9%).
Valuation and view:
As highlighted above, the earnings outlook for the sector has now materially improved,
especially after the GST rate cuts. As highlighted, demand has picked up in most segments after GST cuts and
continues to be healthy even beyond the festive season. Steady input costs would mean margins can continue to
improve on the back of operating leverage benefits.
MSIL and MM are our top OEM picks in 4Ws. We also like
TVS in the 2W space. Among ancillaries, we prefer ENDU, MOTHERSO and HAPPY.
Surprises:
MSIL, MM, APTY, BHFC, CEAT, CIE, CRAFTSMA, HAPPY, SAMIL, SONACOMS, TI
Misses:
BIL, TTMT PV, Exide
November 2025
22
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Guidance highlights:
MSIL:
Buoyed by GST rate cuts, MSIL’s retail sales during the festive period were strong, recording 400k units (up
from 211k units YoY), with small cars making up 250k units (up 100% YoY). Bookings were strong in this period as
well, with total bookings of 500k units compared to 350k YoY. With expectations of exceeding their export
guidance of 400k annual units this fiscal and eight new SUV launches in the pipeline by 2031, management has
reiterated that reaching a 50% market share in PVs remains MSIL’s long-term goal.
MM:
Auto –2Q
volumes were partly hit by the GST transition and complex logistic issues; however, strong
booking growth and retail volumes during the festive season helped to offset losses. Growth guidance of mid- to
high-teens for SUVs is maintained, with LCV demand revival to continue in 2H. Exports have been strong and the
momentum is expected to sustain in 2H.
Tractors –
MM’s tractor market share improved 80bp YoY to 44% in 1H,
with management increasing volume growth expectations on account of favorable rainfall, GST cuts, export
growth and improved terms of trade. Farm revenue and margins posted healthy growth this quarter.
Hyundai (HMI):
HMI posted weak domestic sales in 2Q; however, management expects to grow in line with the
industry in 2H, aided by the launch of new Venue. HMI has 8 products slated to release during FY26-27 and a
total of 26 in the pipeline till FY30. Exports are likely to exceed guidance of 8% growth. Profitability will take a hit
in the short term due to rising costs from the Pune plant, which commenced operations in Oct’25.
TTMT PV:
JLR -
Given a significantly weak 2Q and a continued impact expected in 3Q at JLR, management has
sharply lowered its FY26 EBIT margin guidance to 0-2% and FCF outflow guidance to GBP2.2-2.5b. A greater
concern is the persistently weak demand in key regions, including China, the US, and Europe, which may keep
VME elevated, at least in the near term. While management refrained from providing FY27 guidance, it signaled
that US tariff increases and China’s luxury tax are likely to have a structural impact on medium-term profitability.
BJAUT:
Domestic 2W -
Management sees potential for 6-8% industry growth in 2H after the GST rate cuts;
however, margin pressures may persist due to potential commodity inflation. BJAUT was able to complete re-
homologation of its entire EV range using alternate LRE-based magnets to deal with a 50% shortfall, led by rare
earth supply issues.
Exports 2W -
Having grown 24% YoY in 2Q, management targets to sustain 15-20% growth
in the coming quarters, backed by strong demand from LatAM, Asia and stabilization in Africa.
HMCL:
Management expects to outperform the 6-7% industry growth in FY26, driven by multiple launches,
including two 125cc bikes, Xoom 160, Xtreme 125R refresh, and new Harley models. It targets 40% export
growth with 10% medium-term revenue share and has secured rare earth supplies for 2Q.
TVSL:
Domestic retails outperformed the industry with 32% YoY growth, led by festive demand in rural (+24%)
and urban markets (+26%). Export growth was also ahead of industry due to successful sales in Africa and
LATAM. Market share in 3Ws has nearly doubled to 11%. Norton is set to unveil its first bike at the EICMA in
Milan, Italy, with the launch scheduled for Apr’26. Revenue and margins continued to grow YoY.
EIM:
Royal Enfield saw strong 2Q traction with 49% export growth and solid festive-led domestic demand,
supported by refreshed models that drove 24-70% YoY growth across key nameplates, while margins held firm
and capacity rose to 1.35m units. VECV’s EBITDA margin improved 70bp YoY to 8% as it reinforced its 34.8% LMD
leadership, expanded its CNG/EV portfolio, and committed INR5.4b toward localizing Volvo’s 12-speed AMT.
SAMIL:
SAMIL ramped up two greenfield plants in 2Q and has 10 projects progressing toward SOPs through
FY26-28. Net debt rose modestly to INR116b, and capex guidance stays at INR60b. Segmental performance was
mixed—wiring harness and emerging businesses saw margin pressure from US softness and start-up costs, while
integrated assemblies and modules & polymers delivered steady growth. The order book stands strong at
USD87.2b, while tariff and chip-supply impacts remain limited.
BIL:
US exports remain halted due to high tariffs, with distributors running down inventory, but a favorable tariff
outcome could trigger a restocking cycle. Europe stays weak, though early stabilization is visible, with a gradual
recovery expected in 2H. EUDR-related impact began in 2Q and will peak in 3Q but should be offset by softer
commodities. Capex was INR16.7b in 1HFY26 for TBR/PCR and carbon black expansion, with FY26 outlay guided
at INR20-22b and net debt at INR4.5b.
November 2025
23
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 52: Key operating indicators OEMs
Volumes ('000 units)
2Q
2Q
YoY
1Q
FY26 FY25
(%)
FY26
1,294 1,222
6
1,111
1,691 1,520
11
1,367
1,507 1,228
23
1,277
551
542
2
528
191
192
-1
180
350
301
16
361
49
46
8
44
326
228
43
266
22
21
5
22
34
26
30
31
5,487 5405
1.5 5,578
QoQ
(%)
16
24
18
4
6
-3
11
23
1
11
-1.6
2Q
FY26
20.5
15.0
12.7
10.5
13.9
14.5
12.1
24.9
7.8
13.1
11.7
EBITDA Margins (%)
2Q
YoY
1Q
FY25 (bp) FY26
20.2
20
19.7
14.5
50
14.4
11.7
100
12.5
11.9 -130 10.4
12.8
110
13.3
14.3
20
14.3
11.6
50
11.1
26.3 -140 25.1
7.1
70
9.0
10.3
280
13.1
14.4 -260 12.8
Adj PAT (INR M)
QoQ
2Q
2Q
YoY
1Q
QoQ
(bp) FY26
FY25
(%)
FY26
(%)
70 24,797 22,160 12 20,960 18
60 13,928 12,035 16 11,257 24
10
9,061 6,626
37
7,786
16
10 32,931 30,692
7
37,117 -11
60 15,723 13,755 14 13,692 15
20 45,205 38,409 18 34,498 31
100 8,009 6,933
16
5,937
35
-20 12,080 10,099 20 13,065 -8
-120 2,490 2,090
19
2,890 -14
0
3,212 3,027
6
3,726 -14
-100 186,697 188,703 -1.1 235,050 -20.6
** Excluding TTMT; Source: MOFSL, Company
Bajaj Auto
Hero MotoCorp
TVS Motor
Maruti Suzuki
Hyundai
M&M
Ashok Leyland
Eicher – VECV
Eicher - RE
Escorts
Aggregate **
Exhibit 53: Key operating indicators Ancs
2QFY26
28.3
30.7
13.3
16.8
15.0
25.3
12.6
12.0
14.9
13.1
21.5
15.0
12.9
8.7
10.1
13.1
13
EBITDA Margins (%)
Adj PAT (INR M)
2QFY25 YoY (bp) 1QFY26 QoQ (bp) 2QFY26
1QFY25 YoY (%) 4QFY25 QoQ (%)
27.8
50
27.2
110.0
3,156
3,510
-10.1
3,385
-6.8
29.2
150
28.6
210.0
734
666
10.2
657
11.8
13.1
20
13.4
-10.0
2,273
2,030
12.0
2,264
0.4
14.6
220
17.0
-20.0
472
286
65.0
397
18.8
15.5
-50
14.2
80.0
2,132
1,947
9.5
2,030
5.0
27.6
-230
23.8
150.0
1,717
1,519
13.0
1,285
33.7
11.3
120
11.6
100.0
2,221
2,978
-25.4
3,229
-31.2
14.1
-210
11.5
40.0
2,116
2,407
-12.1
1,940
9.1
13.6
130
13.2
170.0
3,886
3,012
29.0
2,812
38.2
11.0
210
13.3
-20.0
1,726
1,219
41.6
1,857
-7.1
25.1
-360
22.5
-100.0
2,652
3,496
-24.1
5,256
-49.5
14.4
60
13.7
140.0
5,116
4,554
12.3
4,842
5.7
12.8
10
13.4
-50.0
5,542
5,002
10.8
6,705
-17.3
8.8
-10
8.1
50.0
8,559
7,470
14.6
6,210
37.8
10.7
-60
9.8
30.0
1,653
1,521
8.7
1,431
15.5
11.9
110
12.3
70.0
1,868
1,678
11.3
1,681
11.1
13
0
12
50
45,823
43295
6
45,981
0
** PBT instead of PAT; JLR in GBP m; Source: MOFSL, Company
Bharat Forge (S/A)
Happy Forgings
Endurance Tech (Consol)
Craftsman Auto (Consol)
Mahindra CIE (Consol)
Sona Comstar
Exide Industries
Amara Raja
Apollo(Cons)
CEAT (Consol)
Balkrishna Industries
MRF
BOSCH
Motherson Sumi (Consol)
Motherson Wiring
Tube Investments (S/A)
Aggregate
Exhibit 54: Aggregate EBITDA margin for OEM (ex TTMT) is
flat
YoY due to higher costs and weak demand
EBITDA Margin(%)
Exhibit 55: Aggregate EBITDA margin for Ancillaries is flat
YoY
EBITDA Margin (%)
CAPITAL GOODS AND DEFENSE: Results in line with our estimates
Ordering to further improve in 2H:
Order inflow growth for the capital goods sector was healthier than
expected. It was particularly buoyed by the continued momentum in power T&D, renewables and defense.
Overall, EPC companies’ inflows increased 45% YoY, with LT and KEC witnessing strong double-digit YoY growth
24
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
on the back of domestic and global wins. KPIL witnessed single-digit YoY growth, mainly due to timing-related
delays in tender awards. For product companies such as TMX and TRIV, geopolitical headwinds tempered
international order activity, though overall ordering is expected to improve in 2H. Private capex-driven ordering
is yet to pick up for most names, though few large-sized order wins were seen during the quarter. Powergen
demand remained strong and broad-based for both KKC and KOEL, with KKC volumes returning to pre-CPCB IV+
levels on the back of a boost from data center projects, while KOEL saw good momentum across its core
powergen portfolio. The Indian defense pipeline remains strong in the near term on account of emergency
procurement, and for the medium-to-long term, it is led by both base and large orders. Overall, the pipeline
from cement, steel, petrochemicals, waste-to-energy, and sugar is yet to fructify into firm orders, while select
sectors such as power T&D, renewable energy, data centers, real estate, and defense continue to witness
healthy traction.
Execution growth in line with our estimates:
Overall execution of our coverage universe was broadly in line with
our estimates, increasing 14% YoY (vs. our estimate of 16%), aided by healthy opening order books, with EPC
companies posting 12% growth and product companies (ex-Siemens Energy) recording 17% YoY growth. Within
product companies, defense companies’ revenue increased 20% YoY (vs. our estimate of 13%), led by strong
growth seen across defense PSUs, while powergen companies’ execution growth was broad-based but largely
volume-driven, with prices now stabilized. ZEN reported a decline in revenue, TMX and TRIV were muted, and all
other companies in our coverage universe reported healthy double-digit growth.
Margin broadly flat YoY on benign commodity prices:
Overall margins were broadly in line with our estimates at
12.4% (vs. our estimate of 12.2%). A change in the revenue mix led to a small contraction in margins for EPC
names (9.7% in 2QFY26 vs. 9.9% in 2QFY25) and product companies (ex-Siemens Energy) (19.2% in 2QFY26 vs.
20.1% in 2QFY25). Within product companies, the defense names’ margins contracted YoY mainly due to the
inherently lumpy execution cycle; however, we expect full-year margins to improve YoY as delivery schedules
normalize and companies’ indigenization efforts begin to reflect. Notable examples include POWERIND, KKC,
KOEL (adj. margins) and KECI, which reported healthy margin expansion in 2QFY26, while LT, SIEM, KPIL, TRIV
and ZEN saw broadly flat margins, and HAL, BHE, BDL, ABB and TMX reported YoY contraction in margins.
Exports continue to improve:
LT reported a good uptick in international ordering, while KOEL and KKC continued
to witness improvement in export revenue. Export order inflows, however, declined for TRIV mainly due to
deferred project finalizations and tariff-related uncertainties in the US. Given the global uncertainty around
tariffs, macroeconomic conditions, and geopolitical factors, the export trajectory needs to be monitored closely.
Top picks:
With the recent correction in stock prices, we remain positive on LT, BHE, and KKC.
Upgrades/Downgrades:
Upgraded KEC from Neutral to BUY
Surprises:
BHE, KKC, POWERIND, BDL, KOEL, TRIV and ZEN
Misses:
SIEM, TMX and KEC
Guidance highlights:
Most of the management teams were confident about a strong prospect pipeline on expected recovery of
government and private capex across sectors.
LT:
FY26 order inflow growth guidance of more than 10% YoY, with prospect pipeline of INR10t for the remaining
six months (+29% YoY), revenue growth of 15% YoY, core E&C margin guidance of 8.5% and NWC-to-revenue
ratio of 12%.
BHE:
FY26 revenue growth of 15%, margin guidance of 27%, and order inflow guidance of INR270b, excluding
QRSAM (INR570b).
BDL:
Order inflows worth INR200b over the next 2-3 years and annual revenue to reach INR100b by FY30-31.
KKC:
Management maintained double-digit revenue growth guidance for FY26.
KOEL:
Maintained its aim of “2B2B” – to achieve USD2b size by FY30; margins to improve.
KECI:
FY26 order inflow of INR300b, revenue of INR250b (+15% YoY), EBITDA margin of ~8.0%, net debt to
reduce to INR50b.
November 2025
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 Motilal Oswal Financial Services
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KPIL:
FY26 order inflow of more than INR250b, revenue growth of more than 25%, PBT to improve by at least
50bp, and NWC to be below 100 days for standalone and below 90 days for consolidated.
TMX:
FY26 order inflow to grow over 20% YoY; revenue and PAT to grow YoY despite the one-off impact in 2Q.
TRIV:
In FY26, revenue growth to be back-ended, with 3Q and 4Q expected to show higher revenue growth.
Zen Tech:
Medium-term revenue CAGR guidance of 50%, achieving cumulative revenue of INR60b over FY26-28.
Exhibit 56: Aggregate order book (ex-Siemens) experiencing a steady build-up (INR b)
Order book (INR b)
Source: Company, MOFSL
Exhibit 57: Aggregate revenue growth (%)
Capital Goods Revenue growth (%)
Exhibit 58: Aggregate EBITDA growth (%)
Capital goods EBITDA growth (%)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 59: Aggregate EBITDA margin (%)
Capital goods EBITDA margin (%)
Exhibit 60: Aggregate PAT growth (%)
Capital goods PAT growth (%)
Source: Company, MOFSL
Source: Company, MOFSL
Note: The above charts are excluding data of SIEM and Siemens Energy India
CEMENT: Volume ~4% above estimate; ~5% beat in EBITDA/t
Sales volume rises ~13% YoY and blended realizations surge ~6% YoY (down 1% QoQ):
Industry demand in 2Q
was moderate and grew ~4% YoY. Aggregate volume for our cement coverage universe grew ~13% YoY (+4% vs.
our estimate), aided by inorganic growth. Blended realization increased ~6% YoY (dipped ~1% QoQ) to
INR5,474/t, which was ~1% above our estimate. ACC and ACEM reported the highest volume growth of 19-20%
26
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
YoY (aided by inorganic growth), followed by JKCE/JKLC/JSWC/UTCEM of 14-15%. Volume growth for DALBHARA
/BCROP/ICEM/SRCM was in the range of ~3-7% and TRCL was at ~1% YoY. Aggregate revenue (ex-GRASIM) grew
~19% YoY to INR539.0b. GRASIM’s standalone revenue rose ~26% YoY to INR96.1b, supported by steady revenue
gains in its new growth businesses (Birla Opus and Birla Pivot combined revenue stood at INR26.5b, up 8% QoQ).
GRASIM’s chemical/VSF segment revenue increased ~17%/1% YoY.
Average gross margin for our cement coverage improved 2.3pp YoY (dipped 1.2pp QoQ) to 58.4%,
driven by
improvement in realizations, while variable cost/t remained flat YoY (in line with our estimate). Opex/t declined
~1% YoY (up ~2% QoQ) to INR4,549 (~1% below our estimate).
Aggregate EBITDA for our coverage companies
increased ~65% YoY (including GRASIM, which posted EBITDA growth of ~13% YoY), and OPM surged 4.0pp
YoY (down 2.8pp QoQ) to ~15% (+1pp vs. our estimate).
EBITDA surged by ~133% YoY for JKLC, followed by
~91%/81% for ACC/ACEM and ~72% for BCORP. EBITDA of DALBHARA/JKCE/UTCEM increased in the range of
~53-60% YoY and SRCM/TRCL by ~48%/24%. ICEM reported EBITDA of INR814m vs. an operating loss of INR1.6b
in 2QFY25.
Average EBITDA/t increased 46% YoY to INR941 (down ~15% QoQ; +5% vs. our estimate).
Aggregate PAT increases 91% YoY (ex-Grasim, PAT up ~141%):
Aggregate interest/depreciation expenses for
our coverage universe grew 3%/15% YoY, while other income declined ~7% YoY.
Aggregate profit increased
~91% YoY to INR39.3b for our coverage universe (profit up ~141% YoY to INR31.3b, excluding GRASIM).
PAT
surged 4.5x/4.3x YoY for JKCE/DALBHARA, followed by 3.2x/2.9x for SRCM/TRCL. PAT grew ~75%/37%/14% for
UTCEM/ACC/ACEM. BCROP/ICEM/JKLC/JSWC reported profit during the quarter vs. losses in 2QFY25.
Aggregate earnings stable, with a few upgrades and downgrades:
We maintained our aggregate EBITDA/PAT
estimates for our coverage universe for FY26/FY27/FY28. For ACC/ACEM, we raised our FY26 EBITDA estimates
by ~8%/10% while broadly maintaining FY27/FY28 EBITDA estimates. We cut our EBITDA estimates by ~5%-7%
for SRCM. We maintained our EBITDA estimates for rest of the coverage companies.
Top picks:
UTCEM remained our preferred pick in the large-cap space, and JKCE in the mid-cap space.
Surprises:
ACC, ACEM, BCORP, ICEM, TRCL, JSWC, and GRASIM
Misses:
SRCM
Guidance highlights:
Most of the management teams guided for demand growth of 7-8% YoY in FY26, supported by government-led infra
projects (roads, highways, ports, metro, PMAY), good monsoon-led rural demand boost, and continued strong real
estate demand. Industry players have passed on the entire benefit of GST cuts. Cement prices were soft in Oct’25
due to weak demand amid festive season and labor shortage. Though trade prices remained resilient, non-trade
prices contracted sharply in Oct’25. Fuel prices showed mixed trends as imported coal prices fell, while imported
petcoke prices rose sequentially. We expect margin pressure to persist in the near term due to weak demand and
pricing. Further, the two large players have raised their capacity targets for FY28, which would keep pricing in check.
UTCEM:
Management reiterated double-digit volume growth in FY26. It highlighted that the brand transition is
progressing well, with India Cements at ~31% and Kesoram at ~55%, and full conversion is expected by Jun’26. It
has announced Phase-IV expansion with 22.8mtpa capacity in northern and western regions. Upon completion
of these expansions, its domestic grey clinker/cement capacity will reach ~148mtpa/235mtpa by FY28-end.
ACEM:
It indicated that ongoing efficiency measures and group synergies have helped it to lower total opex/t. It
targets to bring costs down from INR4,200/t currently to INR3,650/t by FY28 through optimized fuel mix, higher
green power use, and logistics improvements. Further, it announced debottlenecking initiatives across plants
with grinding capacity addition of 15mtpa at a capex of USD48/t. It raised its capacity target to 155mtpa by FY28
(vs. 140mtpa earlier).
SRCM:
It indicated that despite heavy rains and a sharp decline in QoQ volume, realizations remained firm in 2Q.
The company saw a sharp increase in the premium products share (as a % of trade sales), reaching ~21% vs.
~15% in 2QFY25, which is likely to remain at similar levels in the coming quarters. Capacity is expected to reach
~67mtpa by FY26-end, rising to ~72-75mtpa by end-FY27E and ~80mtpa by FY28-29E.
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
DALBHARA:
Management expects demand to recover in 2H, led by IHB, pent-up demand, consecutive good
monsoon, and improving sentiment. On the cost front, the recent rise in petcoke prices and INR depreciation are
likely to exert some cost pressure. However, the company remains focused on reducing variable costs. Capacity
expansions at Belgaum and Kadapa are progressing as planned, supporting future growth.
JKCE:
It highlighted that volume growth in 2Q was led by the central and south regions, while the north
remained flat. Cement prices remained under pressure in the current month; however, this is likely to ease going
forward. It is targeting cost savings of INR150-200/t, with INR75-90/t expected in FY26/FY27 (each). The 6mtpa
capacity expansion is at an advanced stage and is expected to be commissioned in the coming months.
JKLC:
Management indicated that demand in Oct’25 was muted due to unseasonal rains and the festival effect;
however, demand is likely to recover from mid-Nov’25. JKLC outperformed industry growth in 1HFY26, and it will
sustain above-industry growth in 2H as well. It has placed main plant and machinery orders for Durg expansion,
and expects the commissioning of clinker capacity by Mar’27 and grinding capacities during FY27-28 in a phased
manner.
BCORP:
Management highlighted that 2Q profitability was hit by the overhang of the shutdown of the Maihar
plant in 1QFY26, leading to continued clinker purchase. Heavy rain disrupted operations at the Mukutban plant,
leading to lower volume. The GST rate change in Sep’25 led to sharp price corrections in the nontrade segment.
It remains cautious for 3Q due to subdued realization, and it expects realization to improve in 4QFY26.
GRASIM:
Management highlighted that Birla Opus continues to grow its market share. Birla Opus hit its highest-
ever monthly sales in Sep’25, and the brand saw an equally strong Oct’25. It expects sequential growth in paint
business to be in double digits in 3QFY26 and significantly higher on a YoY basis. GRASIM maintained its revenue
guidance of INR100b and EBITDA break-even by FY28.
Exhibit 62: Blended realization increased 4% YoY in 1QFY26
Realization (INR/t)
Exhibit 61: Our coverage sales volume was up ~13% YoY
Aggregate Vol (mt)
16
8
2
14
9
16
13
YoY change (%)
13
9
10
13
7
6
10 11 9
5
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 63: Aggregate EBITDA and growth
Aggregate EBITDA (INR b)
67
3
-19 -20 -21
-51
-9 -3
14
92
64
33
-6
10
YoY Change (%)
42
68
Exhibit 64: Average EBITDA/t was up 46% YoY in 2QFY26
Average EBITDA (INR/t)
-29
-30
Source: Company, MOFSL; Note: *EBITDA excluding Grasim and JSW Cement
November 2025
28
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
CHEMICALS: Broadly in-line quarter with stable margins
Overall performance:
Revenue
came in line with our estimate, while GALSURF and PI beat our estimates.
EBITDA was also broadly in line (FINEORG, DN, and VO beat our estimates, while in contrast, AACL, ATPL, CLEAN,
GALSUF, NOCIL, and TTCH fell short). Adj. PAT was in line (ELLEN, NFIL, and PI beat our estimates, while AACL,
CLEAN, GALSUF, NOCIL, and TTCH were below our estimates; conversely, ATPL, DN, FINE, SRF, and VO were in
line). Aggregate revenue grew 1% YoY to INR171.2b, EBITDA rose 4% YoY to INR32.4b, and adj. PAT grew 3% YoY
to INR18.6b.
Aggregate gross margin for our coverage universe contracted 80bp YoY in 2QFY26, led by 850bp/640bp gross
margin contraction in GALSUF/ATPL, while VO and PI’s gross margins expanded 1,000bp and 550bp, respectively.
Aggregate EBITDA margin expanded 60bp YoY, led by margin expansion in NFIL, SRF, and VO.
Ratings and earnings revisions:
There have been no changes in ratings across our coverage universe following
the 1QFY25 earnings season. We have revised down our FY26 and FY27 estimates for CLEAN, GALSURF, NOCIL,
PI, TTCH, and ELLEN. We upgraded our earnings estimates for NFIL while maintaining our estimates for the
remaining companies.
Top picks:
SRF:
We expect the chemicals business (fluorochemicals and specialty chemicals) to witness higher growth
momentum in 2HFY26 (vs. 1HFY26), fueled by 1) the ramp-up of recently commissioned plants, 2) the launch of
new products, 3) a strong R&D and innovation pipeline, 4) stable demand for refrigerant gases, and 5) a
diversified portfolio. The packaging business is also likely to report better margins driven by higher realizations of
BOPP, a strong portfolio of high-impact, value-added products, and the anti-dumping duty on Chinese aluminum
foil imports to India.
We value the stock on an SoTP basis to arrive at our TP of INR3,650.
VO:
VOPL has commissioned a plant for MEHQ and Guaiacol, along with other products (Anisole, 4-MAP, Iso
Amylene, etc.), to be commercialized in FY26. We expect them to be the key growth drivers for VO going
forward. VO continues to be one of the largest producers of AOs in India. While Chinese competitors continue to
pose a threat to the supply, the long-term outlook for the segment remains positive on the back of a novel AO
for lubricant additives and further strengthening of the portfolio. We expect growth to be driven by capacity
expansion of ATBS by 10,000mtpa, enabling VO to cater to growing global demand and reduce order backlogs.
We value the stock at 35x FY27E EPS to arrive at a TP of INR2,100.
Reiterate BUY.
AACL:
Volume growth in 1H was slightly higher compared to last year; however, management does not expect
to meet its volume growth target of 7-10% for FY26. The anti-dumping duties on acetonitrile are expected to
benefit the company from 4Q onward.
ATLP:
The company is undertaking various projects and initiatives aimed at improving plant efficiencies,
expanding its capacities for key products, debottlenecking its existing capacities, capturing a higher market
share, and expanding its international presence.
CLEAN:
The broader operating backdrop remains challenging, shaped by uncertain demand in end-markets,
aggressive pricing behavior from Chinese suppliers, evolving tariff structures, and global supply chain
adjustments.
DN:
The global environment remains difficult due to rising geopolitical tensions and trade barriers. While near-
term conditions are challenging, the company expects 2H performance to be better, led by the new capacities
ramping up and new products being launched. Key projects are progressing well, with the Nitric Acid unit and
Methyl isobutyl ketone (MIBK) and Methyl Isobutyl Carbino (MIBC) units likely to be operational by 4QFY26.
ELLEN:
The company is on track for its pan-India expansion, with the Uluberia-2 bulk plant scheduled to open by
3QFY26 and the East India on-site plant by 4QFY26. The North India project has faced a slight commissioning
delay due to execution-related issues. Although this may cause a modest short-term impact, it does not alter the
company’s strong long-term growth outlook or its commitment to expanding national coverage.
Guidance highlights:
November 2025
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
GALSURF:
The company expects 3QFY25 performance to remain similar to 2QFY25 and maintains its confidence
in medium-term consumption growth driven by GST reforms despite temporary softness from inventory
adjustments and reformulations.
NFIL:
Management remains optimistic about 2HFY26 and beyond, supported by a strong order book, deep
customer relationships, and continued focus on R&D. Reflecting this confidence, the company has raised its
EBITDA margin guidance to 28-30% (from 25% earlier) for FY26.
NOCIL:
The company is introducing various cost savings and efficiency improvement initiatives to reduce
conversion costs from 4QFY26 onwards and focusing on geographies other than the US.
PI:
Macro headwinds are expected to persist, underpinned by climatic volatility, evolving structural shifts among
global innovators, and ongoing geopolitical supply-chain disruptions. Management reiterated its EBITDA margin
guidance of 26-27%. PI commercialized eight new molecules in 1HFY26 (five in agchem and three in the
domestic segment).
TTCH:
Soda ash remains very well supplied across the world, with inventories high in certain regions. Soda ash
prices remain weak and, in certain instances, are nearing record low levels. Global demand is estimated to be
flat in the near term. The medium-to-long-term trend is positive, driven by sustainability applications (solar PV +
EV growth), even with short-term margin challenges.
SRF:
Management guided over 20% revenue growth for the chemicals business in FY26, driven by a strong 1H.
This is despite some order deferment (for older products) from large global agro players to the later part of
2HFY26. The company plans to incur a capex of around INR22b-INR23b (including the Odisha land parcel
~INR2.82b) in FY26.
VO:
The company reported a strong operating performance in 2QFY26, as EBITDA surged 33% YoY to INR1.8b.
For FY26, revenue growth across ATBS, Butyl Phenols (BP), and Anti-Oxidants (AO) segments is expected,
supported by favorable demand trends and capacity additions. VO has completed the phase 1 expansion of its
Acrylamide Tertiary-Butyl Sulfonic Acid (ATBS) production capacity by 10,000mtpa to cater to the growing global
demand and reduce order backlogs.
Exhibit 65: Revenue for our Coverage Universe
Aggregate Revenue (INR b)
170.0 172.8
153.1
122.6
130.4
140.4
163.6 168.2
158.2 155.4
174.1 170.1 171.2
164.5 169.1 159.8
156.7
150.0
Exhibit 66: Gross margin for our Coverage Universe
Aggregate Gross margin (%)
November 2025
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 67: EBITDAM for our Coverage Universe
Aggregate EBITDAM (%)
Exhibit 68: EBIT margin for our Coverage Universe
Aggregate EBIT margin (%)
Exhibit 69: PAT margin for our Coverage Universe
Aggregate adj. PAT margin (%)
CONSUMER – GST transition underway in FMCG; recovery signs in paint
Staples: GST-led transitory disruption –
Staple companies witnessed stable demand trends; however, the GST
transition and an extended monsoon weighed on the overall performance during the quarter. The GST impact
was more pronounced in personal care categories compared to packaged foods. All such transition changes will
be interim and stability is expected from Nov’25 onward. About 2-3% of revenue of most companies was
affected by the GST-led transition. Many companies have reduced prices and started increasing grammage in
low-unit packs (LUPs) to pass on the GST benefits to consumers. Companies have also pre-loaded their winter
portfolios into the market, anticipating a strong season and a robust offtake. Key raw material prices remain
firm, thereby gross margin pressure persisted for most consumer companies. Copra price correction can boost
the margin for Marico in the coming quarters. EBITDA margins for most companies were under pressure in 2Q.
We downgraded Dabur to Neutral given persistent execution challenges, and upgraded Britannia to BUY owing
to improving demand trends, benefits of grammage play and possible share gain from local and regional firms.
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 Motilal Oswal Financial Services
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Paint: Recovery momentum strengthens; festive demand aids growth –
Paint companies reported clear signs of
a demand revival in Sep-Oct’25, supported by festive demand and improving trade sentiments. The industry
expects this uptrend to accelerate further in 2HFY26. Asian Paints delivered 6% revenue growth, driven by 11%
domestic volume growth, while Indigo Paints posted 4% YoY growth. Margins improved meaningfully across the
sector, aided by benign RM prices, a favorable product mix, and efficiency measures.
Liquor: Healthy P&A growth; beer soft on weather impact –
In the alcobev sector, spirits outperformed, while
beer remained weak. UNSP reported 8% P&A volume growth, led by strength in Andhra Pradesh and a favorable
base, though partially offset by the Maharashtra duty hike. Radico delivered an impressive 22% P&A volume
growth, supported by premiumization and strong consumer uptake. Margins expanded across the spirits
category, led by stable ENA/glass costs and operating leverage. UBBL volumes declined 3% due to an unusually
weak summer and extended monsoon, and margins contracted due to negative operating leverage.
Innerwear: Muted performance –
Page Industries saw muted demand impacted by weak trends in Jul-Aug,
though a gradual recovery was visible from mid-Sep, aided by an early festive season. Despite better gross
margins from sourcing efficiencies, high marketing spends dented EBITDA. With increased efforts in product
innovation, digital-first marketing, and channel expansion, we expect the company to benefit from improving
consumer sentiment and witness a steady demand recovery.
Outperformers:
APNT, BRIT, NEST and RDCK
Underperformers:
CLGT, Dabur, Page and UBBL
Near-term outlook:
With trade stabilizing after the GST reduction, staples are expected to see a gradual pickup,
supported by a steady rural recovery and improving urban sentiment. A favorable winter should further drive
offtake in health supplements, winter personal care, beverages, and packaged foods. Government measures to
boost rural incomes are likely to strengthen consumption from 3QFY26. Paints are already witnessing better
traction, driven by festive demand and stronger construction activity. In liquor, premiumization continues to
support healthy double-digit growth in spirits. The innerwear segment is seeing a slow but steady recovery as
channel inventory normalizes, with the winter season expected to boost thermal and winterwear demand.
Our
top picks are HUVR, BRIT and MRCO.
Guidance highlights
APNT:
For FY26, the company expects mid-single-digit value growth and high-single-digit volume growth, with
the 4-5% gap between value and volume likely to persist. In 2HFY26, the company anticipates high-single-digit
value growth, supported by festive demand and improving macro conditions.
BRIT:
The company expects transitionary impact to normalize progressively in 3QFY26. By Oct end, BRIT revised
~65% of its SKUs and by mid-Nov, and all its SKUs will have updated grammages and prices. Annual A&P spends
as a percentage of sales for FY26 are expected to be at historical levels.
DABUR:
Management guided for mid-to-high single-digit revenue growth and mid-single-digit volume growth
for 2HFY26. The company expects rural demand momentum to remain intact and urban consumption to recover
in 2H as trade stabilizes.
HMN:
The company expects high single-digit growth in 3QFY26, with the potential to deliver double-digit growth
if the winter season continues to perform well.
HUVR:
It has loaded its winter portfolio into trade ahead of the season and expects a good winter to drive strong
offtake. Near-term EBITDA margin guidance remains in the 22-23% range, with 50-60bp improvement expected
after the demerger, as the low-margin ice cream business is excluded.
GCPL:
Management expects the Indian standalone business to achieve high single-digit underlying volume
growth in FY26, alongside consolidated high single-digit revenue growth, with 2HFY26 anticipated to outperform
1HFY26. India standalone and GAUM businesses are expected to deliver double-digit EBITDA growth in FY26.
Consolidated EBITDA growth may be marginally lower than the earlier guidance due to softness in Indonesia and
LATAM, but management expects a sequential improvement.
November 2025
32
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
PAGE -
PAGE expects double-digit sales growth in a normalized business environment. The festive season (Oct-
Dec) is expected to help sustain healthy category growth and drive premiumization. The festive season has been
better than the first half of 2QFY26. PAGE expects 2HFY26 to be better than 1HFY26.
PIDI:
Management expects double-digit volume growth momentum to continue in 2HFY26. The company has
not taken any pricing actions. With no significant commodity inflation currently seen, the company does not
plan any major price hikes. PIDI expects gross margins to remain in the 54-55% range through FY26. It maintains
its EBITDA margin guidance of 20-24% for FY26.
RDKH –
For FY26, Radico’s overall volume growth would be in the 20%+ range, with P&A continuing to grow
20%+ in 2HFY26. The company has maintained its margin expansion guidance of 125-150bp annually for the next
three years, aiming to reach high-teen margins. It is on track to be debt free by FY27.
UNSP –
UNSP expects that 2HFY26 is expected to be more challenging than 1HFY26. The company continues to
target double-digit growth; however, it remains cautious given the high base in AP and ongoing challenges in
Maharashtra. The festive season (Oct-Dec) is expected to help sustain healthy category growth and drive
premiumization.
TATACONSUMER -
Management expects to return to ~15% EBITDA margins by 4Q. Tea gross margins are
expected to operate within the 34-36% range; going beyond this, it risks losing market share due to the
competitive environment. The growth portfolio (~30% of the total portfolio) is expanding at a 30% rate, driven
by low penetration, strong category tailwinds, and expanding distribution. It is expected to maintain the same
growth rate in the near foreseeable future.
1QFY24
10.0
0.0
3.0
3.0
3.0
10.0
3.0
8.0
9.0
3.0
5.4
-11.5
-12.4
5.8
10.3
7.9
27.1
2QFY24
6.0
0.0
-1.0
3.0
2.0
4.0
2.0
5.0
9.0
3.0
5.4
-8.8
7.0
1.0
3.8
-3.1
21.9
3QFY24
12.0
5.5
-1.0
4.0
-1.0
5.0
2.0
-2.0
11.0
2.0
4.0
4.6
8.0
-1.8
4.6
3.6
20.1
4QFY24
10.0
6.0
1.0
3.0
6.4
9.0
2.0
2.0
10.0
3.0
4.0
6.1
10.9
3.7
3.7
-1.0
14.5
1QFY25
7.0
8.0
7.0
5.2
8.7
8.0
4.0
3.0
10.8
4.0
2.0
2.6
5.0
3.5
5.1
-4.1
14.2
2QFY25
-0.5
8.0
8.0
-7.0
1.7
7.0
3.0
3.5
3.0
5.0
-1.5
6.7
5.0
-4.4
-3.7
-2.4
12.7
3QFY25
1.6
6.0
4.0
1.2
4.0
0.0
0.0
6.0
8.0
6.0
2.5
4.7
8.0
10.2
11.2
15.5
18.0
4QFY25
1QFY26
2QFY26
1.8
3.9
10.9
3.0
2.0
-3.0
0.0
-3.0
-5.0
-5.0
-1.0
2.0
5.0
-3.0
-16.0
4.0
5.0
3.0
2.0
4.0
0.0
5.0
6.0
6.0
5.0
3.6
2.8
7.0
9.0
7.0
2.0
2.0
7.0
8.5
1.9
2.5
5.0
11.0
-3.0
6.9
9.4
7.7
9.2
9.0
8.0
27.5
37.5
37.7
16.4
40.7
21.6
Source: Company, MOFSL
Exhibit 70: Quarterly volume growth
Volume growth (%)
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
HUL
ITC
Jyothy labs
Marico
Nestle
Page Industries
UBBL
United spirits
-P&A
Radico Khaitan
Radico Khaitan (P&A)
November 2025
33
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 71: Revenue/EBITDA/PAT growth for 2QFY26
Company Name
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
HUL
Indigo Paints
ITC
Jyothy
LT Foods
Marico
Nestle
P&G Hygiene
Page Industries
Pidilite
Tata consumer
United Breweries
United Spirits
Radico Khaitan
Varun Beverages
Revenue
85,313
48,406
15,195
31,913
7,985
38,251
1,62,520
3,121
1,95,016
7,361
27,657
34,820
56,436
11,502
12,909
35,544
49,659
20,511
31,700
14,939
48,967
2QFY26
YoY %
6.3
3.7
-6.2
5.4
-10.3
4.3
2.0
4.2
-6.0
0.3
31.2
30.7
10.6
1.3
3.7
9.9
17.8
-3.0
11.5
33.8
1.9
EBITDA
15,034
9,545
4,654
5,881
1,785
7,333
37,400
465
66,947
1,183
3,094
5,600
12,539
2,848
2,795
8,507
6,718
1,301
6,720
2,376
11,474
2QFY26
YoY %
21.3
21.8
-6.4
6.4
-28.7
-3.7
-1.4
12.1
-1.0
-14.6
35.0
7.3
5.2
-2.0
-0.4
10.7
7.3
-42.6
32.5
45.6
-0.3
2QFY26
YoY %
10,182
16.5
6,551
23.2
3,275
-7.9
4,608
6.4
1,711
-26.7
4,811
-2.9
24,986
-4.0
251
10.9
50,609
1.3
878
-16.4
1,639
10.4
4,200
7.3
7,432
-4.6
2,099
-1.0
1,948
0.2
5,799
8.5
4,045
5.1
469
-64.5
4,945
47.6
1,390
69.1
7,412
19.6
Source: Company, MOFSL
PAT
Exhibit 72: Gross and EBITDA margin expansion in 2QFY26
Companies
Staples
Britannia
Colgate
Dabur
Emami
Godrej Consumer
HUL
ITC
Jyothy
LT Foods
Marico
Nestle
P&G Hygiene
Tata consumer
Varun Beverages
Paints & Adhesives
Asian Paints
Indigo Paints
Pidilite
Liquor
United Breweries
United Spirits
Radico Khaitan
Innerwear
Page Industries
Gross Margin
41.7%
69.5%
49.4%
71.0%
52.1%
51.4%
58.3%
48.1%
34.0%
42.6%
54.3%
61.3%
42.1%
56.7%
43.2%
44.8%
55.0%
42.8%
47.1%
43.6%
59.9%
YoY (bp)
16
91
10
33
-348
-16
235
-214
77
-814
-230
-160
-152
119
242
107
69
-104
190
1
348
QoQ (bp)
138
53
241
160
21
134
585
3
35
-427
-83
-230
198
220
51
-112
91
27
312
64
81
EBITDA Margin
19.7%
30.6%
18.4%
22.4%
19.2%
23.0%
34.3%
16.1%
11.2%
16.1%
22.2%
24.8%
13.5%
23.4%
17.6%
14.9%
23.9%
6.3%
21.2%
15.9%
21.7%
YoY (bp)
293
-9
18
-577
-160
-80
172
-280
31
-351
-113
-83
-133
-53
218
106
17
-438
337
129
QoQ (bp)
334
-93
-119
-134
20
50
262
-46
42
-402
27
-365
83
-505
-56
57
-114
-450
492
49
-87
-73
Source: Company, MOFSL
CONSUMER: QSR – Recovery delayed; margins under pressure
Demand remains challenging:
The operating environment remained challenging through Aug and Sep, as out-of-
home consumption was impacted by both Shraavana and Navaratri falling in the same quarter, as well as
unseasonal rains. Oct saw improvement backed by a change in the festive season. QSR companies expect eating-
November 2025
34
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
out frequency to gradually pick up in 2HFY26. The sector benefited indirectly from GST-related advantages
through lower raw material costs, particularly in cheese and sauces, which contributed ~50bp to margins. The
benefit was passed on to consumers through price reductions in certain SKUs. However, weak underlying growth
continued to impact operating margins, exerting pressure on restaurant and EBITDA margins for most brands.
QSR companies continued to focus on value-focused menu offerings. While delivery channels remain strong,
dine-in is showing a gradual improvement. Our coverage universe posted revenue growth of 10% YoY in 2QFY26
vs. 11% in 1QFY26 and 5% in 2QFY25. JUBI delivered robust LFL growth of 9% and RBA recorded SSSG of 3%,
while Westlife/Devyani KFC/Devyani PH/Sapphire KFC/Sapphire PH/UFBL registered same-store sales decline of
3%/4%/4%/3%/8%/2% YoY.
We continue to prefer RBA in QSR given its outperformance in India and re-rating
scope.
Pressure on profitability:
With no material uptick in underlying growth, QSR companies continued to face an
adverse impact on their unit economics. Both restaurant margin and EBITDA margin (pre-Ind AS) continued to
contract YoY and QoQ in 2QFY26. EBITDA margin (pre-Ind AS) expanded YoY for JUBI and RBA.
Outperformers:
Jubilant
Underperformers:
Westlife, Devyani
Guidance highlights:
JUBI:
For FY26, JUBI expects India Domino’s to grow by ~15% YoY, with 5-7% growth from LFL (1-2% price mix
and 3-4% volume) and 7-10% from store additions. Management has reiterated its guidance of 200bp EBITDA
margin expansion over the next three years.
Devyani:
The company is on track to open ~100-110 new stores of KFC in FY26. New store additions will
continue to be muted for PH. Sky Gate would achieve brand contribution breakeven by FY26 end.
Westlife:
It has maintained EBITDA margin guidance of 18-20% by FY27 and is on track to achieve the target of
580-630 restaurants by 2027.
Sapphire:
The company aims to maintain its KFC expansion rate of 60-80 stores annually while adopting a
cautious approach for PH, focusing on smaller-format stores of 1,000 and 1,200 sq. ft.
RBA:
BK plans to open 60-80 new restaurants each year and targets 800 restaurants by FY29 from the current
533 restaurants (20 stores opened in 1HFY26). RBA plans to open 580 stores by FY26 end. It aspires to achieve
70% gross margin by FY29; current GM stands at 68.3%.
UFBL:
The company opened 6 new restaurants during 2Q and remains well-placed to add 9-12 outlets per
quarter, targeting 300+ stores by FY27. In FY26, the company plans capex of INR1,250m, which includes new
restaurant additions (35 stores) along with maintenance and corporate capex.
Exhibit 73: Quarterly trends
Particulars
Revenue Growth (%)
United Foodbrands
Devyani (Consol)
-KFC
-Pizza Hut
Jubilant (Standalone)
Sapphire
-KFC
-Pizza Hut
Restaurant Brands (Consol)
Restaurant Brands (Standalone)
Westlife
Total
SSSG
United Foodbrands
Devyani - KFC
Devyani - PH
2QFY24
-3%
10%
15%
2%
5%
14%
19%
-6%
19%
23%
7%
9%
-11%
-4%
-10%
3QFY24
1%
7%
14%
-2%
3%
12%
16%
-4%
15%
20%
-2%
6%
-5%
-5%
-13%
4QFY24
6%
39%
11%
-4%
15%
13%
16%
-3%
16%
20%
1%
9%
1%
-7%
-14%
1QFY25
-6%
44%
7%
-1%
10%
10%
11%
3%
6%
16%
0%
5%
-7%
-7%
-9%
2QFY25
1%
49%
7%
0%
9%
8%
9%
3%
1%
9%
1%
5%
-3%
-7%
-6%
3QFY25
-1%
54%
9%
6%
19%
14%
12%
10%
6%
11%
9%
20%
-2%
-4%
-1%
4QFY25
-2%
16%
3%
8%
10%
13%
12%
5%
6%
12%
7%
8%
-2%
-6%
1%
1QFY26
-3%
11%
10%
3%
18%
8%
11%
-6%
8%
13%
7%
11%
-3%
-1%
-4%
2QFY26
0%
13%
5%
1%
16%
7%
7%
-6%
11%
16%
4%
10%
-2%
-4%
-4%
November 2025
35
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Particulars
Jubilant (LFL)
Sapphire - KFC
Sapphire - PH
Restaurant Brands
Westlife
Gross profit margin (%)
United Foodbrands
Devyani (Consol)
-KFC
-Pizza Hut
Jubilant (Standalone)
Sapphire
-KFC
-Pizza Hut
Restaurant Brands (Consol)
Restaurant Brands (Standalone)
Westlife
RoM % (pre-Ind AS)
United Foodbrands
Devyani (Consol)
-KFC
-Pizza Hut
Jubilant (Standalone)
Sapphire
-KFC
-Pizza Hut
Restaurant Brands (Consol)
Restaurant Brands (Standalone)
Westlife
EBITDA Pre-Ind AS margins (%)
Barbeque Nation
Devyani (Consol)
Jubilant
Sapphire
Restaurant Brands (Consol)
Restaurant Brands (India)
Westlife
ADS ('000')
United Foodbrands
Devyani
-KFC
-Pizza Hut
Jubilant (Standalone)
Sapphire
-KFC
-Pizza Hut
Restaurant Brands (India)
Westlife
Store (India)
United Foodbrands
Devyani India
-KFC
-Pizza Hut
Jubilant
Sapphire
-KFC
-Pizza Hut
Restaurant Brands
Westlife
PBT (INR M)
2QFY24
-1%
0%
-20%
4%
1%
65.9%
70.8%
69.0%
75.7%
76.4%
68.7%
67.9%
76.1%
64.2%
66.8%
70.1%
3QFY24
-3%
-2%
-19%
3%
-9%
67.9%
70.6%
69.4%
75.8%
76.7%
68.9%
68.4%
75.7%
64.4%
67.1%
70.3%
4QFY24
0%
-3%
-15%
2%
-5%
68.9%
69.2%
69.9%
77.3%
76.6%
68.9%
68.3%
75.5%
64.2%
67.7%
70.2%
1QFY25
3%
-6%
-7%
3%
-7%
68.1%
69.2%
69.5%
76.8%
76.1%
68.6%
68.2%
76.1%
64.5%
67.6%
70.6%
2QFY25
3%
-8%
-3%
-3%
-7%
68.1%
69.3%
69.0%
76.7%
76.1%
68.8%
68.3%
76.5%
64.9%
67.5%
69.7%
3QFY25
13%
-3%
5%
-1%
3%
68.2%
68.7%
68.6%
76.2%
75.1%
68.6%
68.2%
75.6%
65.6%
67.8%
70.1%
4QFY25
12%
-1%
1%
5%
1%
68.5%
68.5%
68.3%
75.6%
74.5%
68.2%
68.0%
74.8%
65.3%
67.8%
70.0%
1QFY26
12%
0%
-8%
3%
1%
67.7%
68.2%
67.1%
74.7%
74.1%
67.4%
67.1%
74.6%
65.4%
67.7%
71.6%
2QFY26
9%
-3%
-8%
3%
-3%
66.2%
67.8%
68.1%
74.7%
74.4%
67.8%
67.2%
74.4%
66.1%
68.3%
72.4%
15.4%
19.4%
7.7%
16.1%
19.2%
7.6%
7.5%
10.7%
15.4%
19.0%
6.1%
16.0%
20.1%
4.6%
9.3%
12.2%
13.6%
19.0%
4.4%
13.8%
18.7%
-2.7%
6.0%
7.8%
15.3%
19.5%
4.9%
15.2%
18.8%
4.6%
7.1%
8.9%
13.6%
16.6%
3.1%
13.8%
16.5%
4.1%
7.2%
10.6%
14.3%
17.2%
2.1%
15.5%
18.2%
4.7%
8.2%
12.0%
13.8%
16.2%
0.7%
12.0%
15.7%
-4.6%
7.7%
10.5%
13.1%
15.5%
-1.1%
12.1%
15.7%
-2.5%
7.7%
9.7%
11.7%
14.1%
-0.2%
11.3%
13.8%
-1.8%
7.5%
10.4%
4.5%
11.5%
13.3%
10.6%
1.5%
5.4%
11.9%
158
109
39
78
125
48
126
185
212
1,298
540
535
1,949
692
381
311
404
370
11.0%
9.3%
12.9%
10.8%
2.8%
6.8%
11.4%
175
104
37
78
125
45
119
176
210
1,387
590
565
2,007
725
406
319
441
380
6.4%
9.2%
10.9%
8.6%
-0.5%
2.4%
8.7%
153
93
32
75
114
41
105
157
217
1,429
596
567
2,096
748
429
319
455
397
6.9%
11.6%
11.6%
9.8%
1.3%
3.6%
8.1%
155
104
36
79
122
48
119
170
219
1,473
617
570
2,148
762
442
320
456
403
5.4%
9.4%
11.7%
8.5%
0.6%
5.0%
7.7%
153
96
35
78
111
47
118
168
222
1,557
645
593
2,199
784
461
323
464
408
10.3%
10.1%
12.4%
10.7%
2.1%
6.2%
9.1%
162
96
35
84
115
48
114
173
226
1,658
689
644
2,266
835
496
339
510
421
6.5%
8.9%
11.8%
7.1%
2.3%
5.4%
7.6%
141
83
31
82
108
42
108
153
230
1,664
696
630
2,304
836
502
334
513
438
4.6%
8.1%
12.0%
7.1%
1.7%
4.1%
7.7%
140
98
33
85
116
44
120
165
236
1,767
704
618
2,362
846
510
336
519
444
1.1%
6.8%
12.1%
7.4%
1.6%
5.0%
6.2%
141
89
33
81
103
42
119
158
241
1,802
734
621
2,450
867
529
338
533
450
November 2025
36
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Particulars
United Foodbrands
Devyani (Consol)
Jubilant (Standalone)
Sapphire
Restaurant Brands (Consol)
Restaurant Brands (Standalone)
Westlife
PBT Margins
United Foodbrands
Devyani (Consol)
Jubilant (Standalone)
Sapphire
Restaurant Brands (Consol)
Restaurant Brands (Standalone)
Westlife
2QFY24
(151)
330
963
214
(457)
(93)
302
-5.0%
4.0%
7.2%
3.3%
-7.3%
-2.1%
4.9%
3QFY24
75
97
819
140
(376)
(64)
231
2.3%
1.1%
6.0%
2.1%
-6.2%
-1.4%
3.9%
4QFY24
(9)
44
508
8
(742)
(310)
20
-0.3%
0.4%
3.8%
0.1%
-12.4%
-7.1%
0.4%
1QFY25
(55)
381
683
118
(488)
(269)
45
-1.8%
3.1%
4.7%
1.6%
-7.5%
-5.5%
0.7%
2QFY25
(100)
(9)
698
53
(655)
(166)
7
-3.3%
-0.1%
4.8%
0.8%
-10.3%
-3.4%
0.1%
3QFY25
47
56
788
168
(547)
(186)
65
1.4%
0.4%
4.9%
2.2%
-8.6%
-3.8%
1.0%
4QFY25
(165)
(208)
677
45
(604)
(254)
13
-5.6%
-1.7%
4.3%
0.6%
-9.6%
-5.2%
0.2%
1QFY26
(170)
19
883
(18)
(454)
(116)
16
-5.7%
0.1%
5.2%
-0.2%
-6.5%
-2.1%
0.2%
2QFY26
(232)
(297)
856
(166)
(633)
(202)
(88)
-7.6%
-2.2%
5.0%
-2.2%
-9.0%
-3.6%
-1.4%
CONSUMER DURABLES: Robust C&W momentum; sluggish RAC performance
Aggregate revenue in line:
Revenue for our consumer durables coverage universe increased ~8% YoY to INR246.7b
in 2QFY26 (in line with our estimates). The cable and wire (C&W) segment revenue grew ~19% YoY to INR123.2b
(in line with our estimates). Meanwhile, the UCP segment revenue declined ~8% YoY to INR56.5b (in line with our
estimates) due to the extended monsoon and GST rate cut announcement, which delayed purchases. Revenue
growth stood at ~20%/19%/18% YoY for RRKABEL/KEII/PLOYCAB, followed by ~5%/1% for HAVL/LGEIL in 2QFY26.
VOLT reported a revenue decline of ~10% YoY in 2QFY26. C&W continues to deliver strong growth, led by robust
domestic demand and supportive commodity prices. On the other side, the UCP segment witnessed an
exceptional quarter, with muted retail offtake during the lean season and delayed consumer purchases due to
the GST rate cut announcement, which also led to higher inventory. Companies remained confident of a demand
recovery in 2H in the UCP and home appliances segments, led by the festive season, the GST rate cut, and the
upcoming BEE transition, which are likely to unlock pent-up demand opportunities and, in turn, ease inventory
levels over time.
C&W margin higher YoY/QoQ, while UCP margin was under pressure:
Average EBIT margin in the C&W segment
surged 2.8pp YoY to 13.0% (+1.0pp vs. our estimates). However, EBIT margin in the UCP segment contracted
6.3pp YoY to 3.0% due to the under absorption of fixed expenses. Aggregate EBITDA for our coverage universe
grew ~11% YoY to INR24.9b. EBITDA margin contracted 30bp YoY to 10.1%. RRKABEL EBITDA increased ~105%
YoY to INR1.8b in 2QFY26, albeit on a low base. POLYCAB/KEII/HAVL’s EBITDA surged ~56%/20%/17% YoY in
2QFY26, while VOLT/LGEIL EBITDA declined ~57%/28% YoY in 2QFY26.
Our earnings revisions:
We cut our EPS estimates for VOLT (~19%/3-5% for FY26/FY27-28) and LGEIL (~13%/6-7%
for FY26/FY27-28). We have raised our EPS estimates for RRKABEL (~6-8% for FY26-FY27) while maintaining
estimates for KEII/POLYCAB/HAVL.
Top picks:
We maintain our positive view on POLYCAB and LGEIL.
Surprises:
POLYCAB and RRKABEL
Misses:
VOLT and LGEIL
Guidance highlights:
POLYCAB:
Management indicated that the C&W demand outlook remains strong in 2HFY26. It maintains a long-
term margin guidance of ~11-13%, though the near-term margin could be higher. The expansion of the EHV
plant is continuing as planned and will be commissioned by 4QCY26-end. Commercial production is expected
from early 2027. In FMEG, the fans category witnessed marginal growth, while demand for lighting, switches,
switchgears, and conduit solutions remained healthy. Solar products continued their strong momentum, driven
by central and state incentive schemes.
November 2025
37
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
LGEIL:
Management highlighted that 1HFY26 was impacted by cool summer, early monsoons, currency volatility,
US tariffs, and the GST rate cut, which temporarily delayed purchases. However, sales recovered quickly once
the GST changes took effect, supported by the festive and wedding season demand. Looking ahead, the
company expects growth to be driven by premiumization, deeper penetration through the newly launched LG
Essential series, expansion of premium appliances and TVs, and a stronger push in B2B segments, such as HVAC,
and in information displays.
HAVL:
Management indicated a weak performance in RAC, Fans, and Cooler due to a short summer season and
higher channel inventory. It is collaborating with channel partners to boost consumer offtake and anticipates
channel inventory to normalize by the end of 3QFY26. It expects a recovery in the ECD and RAC segments in 2H,
led by positive consumer sentiments. The Cable segment continued to witness steady growth. The cable
expansion plan is on track, and the company has acquired a land parcel of 39 acres adjacent to the existing
manufacturing facility.
VOLT:
Management indicated that the UCP segment had an unusual quarter, with muted retail offtake during
the lean season and delayed consumer purchases due to the GST-rate cut announcement. This led to higher
inventory (currently at around two months). Despite this, it maintained its market leadership in the RAC
segment and gained market share sequentially (at 18.5% vs. 17.8% in 1Q). It is optimistic for a recovery in the
UCP segment in 2HFY26 and expects the channel to start stocking up for the upcoming season. It is also fully
ready with new products for the upcoming transition to new energy labeling effective Jan’26.
KEII:
Management indicated that Phase-I of the Sanand project (accounting for +50% of total capacity) was
delayed by four months due to extended rains and labor shortages. However, it expects this to be commissioned
in Nov’25 and start contributing to revenue from 4QFY26. Further, phase-II (mainly consisting of EHV and MV
cables) has been delayed by nine months due to certain complexities faced in construction. KEII, however, does
not expect any further delays and anticipates the commissioning by 4QFY27. It maintains growth guidance of
~18% in FY26 and 20%+ over FY27-28 and expects margins to remain at current levels.
RRKABEL:
Management highlighted that the underlying demand environment continues to be favorable, led by
infrastructure investments, formalization of the electrical sector, and rising consumer preference for branded
and energy-efficient products. Margin expansion during the quarter was driven by positive operating leverage,
better cost absorption, and sustained efficiency initiatives across the procurement and production chains. In
C&W, the company targets ~18% volume CAGR, 10.5-11% EBIT margin (through better capacity utilization and
product mix), and over 20% ROE over the next 2-3 years.
Exhibit 75: Aggregate* UCP EBIT and margin
8.8
6.2
30 31
3
50
24
19 18
16
17
8 17
30
28 18 24
41
17
0.6
-28 -22
-0.1
-8.9
3.8
UCP EBIT (INR b)
6.1
3.4
-0.5
1.6
5.5
3.8
1.1
UCP EBIT Margin (%)
8.6
7.1 6.8
2.7
4.2
2.7
2.0
Exhibit 74: Aggregate* UCP revenue and growth
UCP revenue (INR b)
123
YoY Growth (%)
15 13 16 28 32 15 18 33 38 17 21 43 57 22 25 53
Source: Company, MOFSL; Note: *In UCP revenue and EBIT, we have considered VOLT and HAVL; LGEIL not included due to
base effect
November 2025
38
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 76: Aggregate* C&W revenue and growth
Cables and wires Revenue (INR b)
32
26
22
14
17
11
102
90
103
22
14
YoY Growth (%)
28
19
12
Exhibit 77: Aggregate* C&W EBIT and margin
Cables and Wires EBIT (INR b)
EBIT Margin (%)
13
13
12
11
10
12
13
12
11
81
85
88
100
129
115
123
10
11
10
13
10
11
11
17
14
16
Source: Company, MOFSL; Note: *In Cables and Wires, for revenue and EBIT, we have considered Polycab, KEII, HAVL, and RRKABEL
EMS: Robust order book and a shift to high-margin segments bolster operating performance
Continued strong revenue growth across EMS players:
The EMS sector continued its strong growth trajectory, with
aggregate revenue surging 27% YoY to INR196b. This exceptional growth was driven by the execution of a strong
order book. DATAPATT led the pack with revenue jumping 3.4x YoY, led by the execution of a large strategic order
(INR1.8b, 59% of total revenue), followed by KAYNES (up 58%), Avalon (39%), Syrma (38%), and Dixon (29%). Cyient
DLM witnessed a revenue decline of 20% YoY due to the high base of BEL order execution, while Amber’s revenue
declined marginally by 2% due to weak demand. Looking ahead, we expect strong revenue momentum in 2H, led by
healthy demand traction and the execution of large orders in hand (~INR187.3b as of Sep’25; excluding Dixon and
Amber, i.e., ~1.7x the TTM revenue of these companies). For our coverage universe, we expect an aggregate revenue
growth of ~39% in FY26 (implying 35% YoY growth in 2HFY26) and a CAGR of 36% over FY25-FY28.
Order book (ex-Dixon, Amber) continues to remain healthy, led by client additions and increasing wallet share
with existing clients:
The sector continued to witness healthy order inflows (~INR41.4b) in 2QFY26. Most companies
are experiencing healthy and expanding order books, providing them with clear revenue visibility for the short to
medium term. Among our coverage universe, KAYNES witnessed the highest order book growth of ~49% YoY,
followed by Avalon/Syrma/CyientDL at ~25%/21%/16% YoY. DATAPATT continues to see a declining order book
trend (down 31% YoY). From the order book in hand, a clear strategic shift is underway from low-margin
consumer segments toward high-margin verticals such as defense, aerospace, automotive, telecom, power
electronics, and clean energy.
Margins inch up for the universe, largely due to a steep contraction in DATAPATT’s margin:
EBITDA margin for our
coverage universe (ex Amber and Dixon) expanded 160bp YoY, led by an expansion across Kaynes/Syrma/CyientDL
except DATAPATT/Avalon (EBITDA margin contracted 15.4pp/90bp). While overall coverage margins (including
Amber and Dixon) marginally improved YoY (30bp), Amber’s EBITDA margin contracted ~120bp YoY while Dixon’s
improved marginally by 10bp YoY. Kaynes witnessed the highest EBITDA margin expansion of ~200bp YoY, followed
by CYIENTDL/SYRMA (up 190bp/150bp), benefitting from a favorable business mix and operating leverage during
the quarter. Favorable operating leverage and a change in product mix played a role in margin expansion for these
companies.
Going forward, we expect margins for our coverage universe to gradually expand, led by the
execution of high-margin orders and operating leverage.
The quarter experienced no earnings upgrades but two downgrades:
We downgraded our FY26/F27/FY28 earnings
estimates for Amber by 22%/13%/14%, and for CYIENTDL by 20%/12%/12%. Conversely, we raised SYRMA’s
earnings estimate by 6% for FY27 only. For the rest of the coverage universe, we broadly retained our estimates.
Surprises:
AVALON, SYRMA, and DATAPATT
Miss:
AMBER
Guidance highlights:
Kaynes
maintains its full-year revenue guidance of INR45b, indicating an implied growth of ~64% YoY in 2HFY26.
KAYNES also reiterated its EBITDA margin guidance of over 16% for FY26. However, working capital was elevated
November 2025
39
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
in 1HFY26, led by higher inventory levels toward the end of the quarter and a rise in trade receivables, reflecting
strong growth and back-ended billing. The company is exploring multiple options, such as discounting and
vendor inventory management, to reduce working capital.
Avalon
is witnessing growth across all business segments, with the order book growing ~25.5% YoY (INR18.6b).
Supported by a robust order book visibility and strong performance in 1HFY26, management has further
increased its FY26 guidance for revenue growth to 28-30% (vs. 23-25% earlier), with a sequential improvement
in EBITDA margin. This marks the second consecutive quarter in which management has raised guidance.
Syrma SGS
has maintained revenue guidance of ~30- 35% for FY26, with an intact ~8.5-9% EBITDA guidance
(expecting to surpass the guidance level). It anticipates the US to serve as a key market in the future. The
company entered into multiple deals during the quarter across various sectors (defense, solar, auto, railways,
and medical) as well as manufacturing capabilities (PCB and design-led manufacturing).
Cyient DLM:
The current book-to-bill ratio is ~1.6x, and the company aims to maintain it around ~1.4-1.5x by the
end of FY26. Further, it expects growth in 4QFY26, largely led by growth in the industrial segment (as 3QFY25
had large order execution of BEL). The company is actively looking for inorganic acquisition targets in NAM and
EMEA to drive growth in the medical and industrial segments and new industries like EV. Considering this, the
company has guided for a revenue CAGR of ~30% over the next five years.
Data Patterns:
The company’s order book stands at INR6.7b, with over INR3.5b in new orders received since the
start of the financial year, including significant wins from ECIL and the Brahmos. Management is targeting over
INR10b in additional orders over the coming quarters. The company has retained its FY26 revenue
growth/EBITDA margin guidance of ~20-25%/35-40%
Amber:
Revenue growth of 13-15% YoY is expected in consumer durables, and revenue of over INR32b in
electronics for FY26, with PCBA contributing over INR24b. Electronics margins are expected to reach 8-9% by
FY26-end and cross double digits in FY27. The railways and defense segment is expected to double its revenue
within two years. The company aims for its electronics division to achieve USD1b in revenue in the next three
years, while consumer durables should grow in line with the expanding RAC market, expected to double by FY30.
Dixon Technologies
expects mobile phone volume of 40m-42m units in FY26 and 55-60m in FY27 through JVs
and backward integration. In IT hardware, the management is expecting revenues of around INR12-13b for FY26
and INR40-50b over the next two years, with margin benefits from backward integration and PLI incentives.
Exhibit 78: Key operating indicators
2Q
FY26
9,062
3,825
3,106
11,459
3,075
1,48,550
16,470
1,95,547
30,527
Revenue (INR m)
2Q
YoY
1Q
FY25
(%) FY26
5,721
58 6,735
2,750
39 3,233
3,895
-20 2,784
8,327
38 9,440
910
238
993
1,15,341 29 1,28,357
16,847
-2 34,491
1,53,791 27 1,86,033
21,603
41 23,185
QoQ
(%)
35
18
12
21
210
16
-52
5
32
2Q
FY26
16.3
10.1
10.0
10.1
22.3
3.8
5.5
5.4
13.2
EBITDA margins (%)
Adj PAT (INR m)
2Q
YoY
1Q QoQ 2Q
2Q
YoY
1Q QoQ
FY25 (%) FY25 (%) FY26 FY25 (%) FY25 (%)
14.4 200 16.8 -50 1,214 602
102
746
63
11.0 -90
9.2
90
250
175
43
142
76
8.1
190
9.0
100 126
155
-19
75
68
8.5
150
9.2
90
641
362
77
497
29
37.7 -1540 32.3 -1000 492
303
62
255
93
3.7
10
3.8
0
6,700 3,899 72 2,250 198
6.8 -120 7.4 -190 -69
192
NA
-69
0
5.1
30
5.5
-10 9,353 5,688 64 3,896 140
11.5 160 12.4
80 2,722 1,597 70 1,715 59
Source: MOFSL, Company
Kaynes
Avalon
Cyient DLM
Syrma SGS
Data Patterns
Dixon
Amber
Agg.
Agg. (ex. Dixon, Amber)
Exhibit 79:
Our revised EPS estimates (INR)
FY26
175
90
83
15
10
15
46
Rev
FY27
277
158
132
25
17
24
64
FY28
364
225
195
34
24
31
83
FY26
174
116
82
16
12
15
48
Old
FY27
275
181
133
25
19
22
63
FY28
362
263
196
34
27
31
81
FY26
1
-22
1
-2
-20
-4
-4
Change %
FY27
1
-13
-1
2
-12
6
2
FY28
1
-14
-1
1
-12
1
2
Dixon
Amber
Kaynes
Avalon
Cyient DLM
Syrma SGS
Data Patterns
November 2025
40
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
FINANCIALS – BANKS: Healthy NII aids earnings; healthy pickup in credit growth; NIMs surprise positively
for most banks with further improvement expected in 2HFY26
The banking sector posted a steady quarter, supported by better NIM performance and a healthy pickup in
credit growth. Margins were ahead of expectations for most banks, aided by a faster decline in the cost of funds.
Several banks have guided for further NIM improvement in 2HFY26, driven by benefits of CRR cut, continued
deposit re-pricing and pickup in loan growth. Business growth showed signs of recovery, with large private banks
posting robust loan growth, while deposit growth remained broadly in line, resulting in a higher CD ratio for
most of them. Asset quality also improved, with private banks witnessing easing stress in the unsecured
segment, though a few remain cautious on retail CV lending. Lenders expect growth in unsecured loans to revive
as stress moderates and macro conditions strengthen. Most banks anticipate stronger earnings in 2H, supported
by lower credit costs and better NIMs. We remain positive on banks’ recovery prospects in 2H, though we are
watchful of repo rate movements, as further rate cuts could weigh on the NII trajectory. Pickup in consumption
activity, led by GST rate cuts and income tax relief, alongside lower borrowing costs, will drive a gradual recovery
in loan demand in 2HFY26. We project sector credit growth to remain at 12% YoY for FY26.
NII for our coverage universe grew 2.4% YoY, with private banks recording 3.1% growth and PSBs posting 1.8%
growth. Within our coverage, all private banks reported growth in NII, barring Bandhan, IIB, RBK and Equitas.
Adjusted NIM for ICICIBC improved 3bp QoQ, whereas Federal Bank saw a 12bp QoQ expansion, led by a decline
in CoF and improved CASA mix. SBIN/AUBANK/DCBB reported margin expansion against our expectation of a
decline. We expect NIM improvement in 2H to be aided by CRR cuts and better business growth, though we
remain watchful of further cuts in repo rates. Earnings growth is projected to gradually recover in 2H, with a
more meaningful rebound in FY27E as easing stress translates into lower credit costs and margin recovery takes
hold. For FY26, we forecast earnings growth of 5% YoY for our coverage universe before accelerating to 15-17%
in FY27E/28E.
Asset quality for all banks continued to strengthen in 2QFY26, with most private banks witnessing easing stress
in unsecured portfolios, even as some remain cautious on retail CV and MSME lending. Fresh slippages improved
for most banks but remained elevated for some mid-size banks due to residual stress in unsecured personal and
business loans, coupled with emerging pressure in vehicle finance. Our latest interactions indicate that stress
levels are easing in retail and secured segments with stable collections, though mid-ticket MSME unsecured
business loans are still showing rising stress through higher bounce rates and selective restructurings. Credit
costs, though still elevated for certain mid-tier private banks, are expected to moderate gradually as macro
conditions strengthen and recoveries improve. The new MFIN guardrails introduced in FY26 should support
more disciplined growth and aid a steady decline in delinquencies through 2HFY26. Provision coverage ratios
remain healthy across banks, and the restructured book continued its steady decline.
Private Banks – Business momentum recovering; margin surprises positively:
Advances growth was healthy at
4% QoQ for our banking universe coverage. HDFCB/ICICIBC reported 4%/3% QoQ growth, while AXSB/KMB
posted steady growth of 5%/4% QoQ. IDFCB reported 6% QoQ growth. However, only IndusInd reported a third
consecutive quarter of a decline in advances. Deposit growth was in line with our expectations and grew 2%
QoQ. As a result, CD ratio for our private banking coverage universe increased further. NIMs for most banks
surprised positively due to better management of funding costs, with ICICIBC/FB/RBK/AUBANK/DCBB reporting
margin expansion, whereas Bandhan and Equitas witnessing the steepest NIM contractions due to a sharp
reduction in MCLR rates and repricing of repo-linked loans.
Public Sector Banks – Healthy pickup in credit growth; asset quality steady:
NII for PSBs grew 2.7% QoQ, as
NIMs saw expansion for banks like SBI, whereas others saw modest contraction. SBI, BOB and Indian Bank
reported 3-5% QoQ growth in NII, while Union Bank posted a decline. Slippages remained well-contained for
most PSBs, supported by minimal exposure to unsecured lending. The GNPA ratio improved across the board,
with healthy PCR levels at ~75-90%. SMA pools also stayed under control, with no significant concerns, while
restructured books continued to decline in 2Q.
November 2025
41
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Small Finance Banks – Asset quality broadly stable; NIMs to improve in 2H:
AUBANK posted strong advances
growth of 22% YoY/5.3% QoQ, driven by retail secured assets and commercial banking, while the unsecured
portfolios declined sharply in 2Q. Deposit growth was healthy at 20.8% YoY/3.8% QoQ. Slippages moderated
during the quarter, leading to GNPA/NNPA down 6bp/flat QoQ at 2.41%/0.88%, while PCR slipped to 64.2%.
NIMs expanded 5bp QoQ, led by low CoF and surplus liquidity utilization. Multiple levers are aligning for
AUBANK—margin expansion from lower CoF, credit cost normalization, and renewed traction in the unsecured
segment. Supported by consistent balance sheet growth, we expect a robust FY25-28E PAT CAGR of ~30%.
EQUITASB reported 4.6% QoQ growth in advances. MFI portfolio declined 4% QoQ to 8.7% of the portfolio.
Meanwhile, deposits grew 11% YoY (flat QoQ). CASA ratio improved to 30.9%. MFI DPD improved significantly
QoQ on account of increased collection efficiency. The bank expects advances growth of 15% YoY for FY26.
Our view:
In 1QFY26, earnings estimates saw consensus cuts due to slower growth and rising stress in the
unsecured segment. In 2QFY26, buoyed by resilient margin and robust asset quality performance, we have
raised our aggregate banks earnings estimates by ~3%/1% for FY26/FY27, mainly led by PSU banks. NIMs for the
sector showed significant resilience as most banks reported a lower decline vs. our/Street estimates, while some
banks reported sequential NIM expansion. Slippages remained under control as most banks witnessed easing
stress in unsecured portfolios. However, banks remain cautious about stress in retail CV and MSME lending now.
We factor in calibrated expansion in margins over the coming quarters as we remain watchful of further cuts in
repo rates. Credit costs are expected to ease in 2H, led by new MFIN guardrails, steady portfolio diversification
and early signs of stabilization. Steady traction across RAM segments has helped PSBs sustain healthy credit
momentum, while asset quality ratios continue to strengthen. With lower credit costs and stable-to-improving
NIMs, the earnings outlook for 2H remains robust. We project private banks to deliver an aggregate earnings
CAGR of 20% over FY26-28 and PSBs to clock a 12% CAGR. For our overall coverage universe, we estimate a 16%
earnings CAGR.
Our preferred picks
are ICICIBC, HDFCB, FB and SBIN.
Surprises: AUBANK, FB and SBIN
Misses: Bandhan, Axis and Equitas
Guidance highlights
HDFCB
expects faster loan growth than system in FY27, with a medium-term target of achieving a CD ratio of less
than 90%. The bank has been growing its gold loan book in a steady manner and will continue this cautiously.
The bank is focusing on deepening liability relationships and expanding its branch network to grow its customer
base, thereby driving both deposit and liability growth.
ICICIBC’s
NIMs are expected to be range-bound and the bank does not expect much movement in the coming
quarters. LDR has expanded by over 400bp in the past two quarters and could rise further with the release of
liquidity from the CRR cut. Retail asset quality remains stable, with secured retail steady and early signs of
growth recovery in PL and cards following portfolio actions.
KMB
expects NIMs to expand over the next two quarters, with a higher 4Q exit rate depending on macro trends;
credit costs are easing in cards, MFI, and PL. However, the retail CV segment continues to face stress, with
elevated credit costs likely in the near term.
AXSB's
higher provisions were driven by erosion in security value for 1-2 accounts, aging-related provisions, and
higher standard provisions per RBI guidance. The RBI also directed a static INR12.31b provision on declassified
farmer loan products, which should reverse by Mar’28; the bank offset this via PSLC purchases. With
strengthening retail growth and an improving risk profile, the bank expects lower risk weights and continued
retail expansion and aims to maintain its CD ratio around 92% (±2%).
SBIN
reiterated its domestic NIM guidance of over 3% and guided for 12-14% loan growth across segments. The
bank has extraordinary gains of INR45b (gross)/INR33.86b (net) from the Yes Bank stake sale.
BOB’s
margins improved and should stay stable or rise slightly, with FY26 guidance at 2.85-3% (incl. IT refund).
ECL and risk-weight changes may impact CRAR by ~75bp over five years, with a 20-25bp rise in credit costs. The
bank guided for a slippage ratio of 1-1.15% and credit cost of 0.75%, both likely to come in lower than guidance.
42
November 2025
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 80: PAT for banking coverage universe grew 0.7% YoY/3.7% QoQ
Rating
NII (INR m)
Sep’25 YoY (%) QoQ (%)
8.6
1.9
-12.2
17.1
-3.6
5.4
4.8
7.4
6.8
-17.5
4.1
-4.0
3.1
2.9
-1.9
5.8
-0.5
3.3
-2.6
1.8
2.4
15.2
24.2
4.9
1.4
-6.1
2.7
-1.5
6.8
0.4
-0.5
3.6
-5.0
0.7
4.7
0.4
4.5
1.5
3.0
-1.0
4.7
-3.3
2.7
1.5
2.9
7.5
Operating profit (INR m)
Sep’25
YoY (%)
QoQ (%)
12,097
1,04,125
13,104
3,039
2,406
16,442
2,79,236
1,72,980
18,801
20,473
52,683
7,284
7,02,669
75,760
85,881
48,365
72,271
2,73,109
68,140
6,23,525
13,26,194
18,925
1,770
6.9
-2.8
-29.4
19.1
-31.2
5.0
13.0
3.4
-4.2
-43.1
3.3
-19.9
2.0
-20.1
12.2
2.3
5.5
-6.8
-16.0
-5.7
-1.8
7.7
NA
-7.8
-9.6
-21.5
-7.0
-23.6
5.6
-21.9
-7.7
-16.0
-20.3
-5.3
3.6
-14.6
-8.0
0.4
1.4
2.1
-10.6
-1.4
-5.7
-10.6
-9.9
73.9
Net profit (INR m)
Sep’25
YoY (%)
QoQ (%)
5,609
50,896
1,119
1,839
241
9,553
1,86,413
1,23,589
3,523
-4,369
32,533
1,785
4,12,731
48,094
47,740
30,182
49,037
1,67,737
42,491
3,85,281
7,98,011
4,448
210
-1.8
-26.4
-88.1
18.3
87.4
-9.6
10.8
5.2
75.5
-132.8
-2.7
-19.8
-4.7
-8.2
18.9
11.5
13.9
-8.5
-10.0
-2.0
-3.4
10.0
NA
-3.4
-12.3
-69.9
16.9
NA
10.9
2.7
-3.2
-23.8
-172.3
-0.9
-10.9
-4.1
5.9
0.5
1.5
192.8
-12.5
3.2
3.5
-0.6
-20.0
-82.9
Source: MOFSL,
Financials
AU Small Finance
Buy
21,444
Axis Bank
Neutral
1,37,446
Bandhan Bank
Neutral
25,886
DCB Bank
Buy
5,962
Equitas Small Finance
Buy
7,737
Federal Bank
Buy
24,952
HDFC Bank
Buy
3,15,515
ICICI Bank
Buy
2,15,295
IDFC First Bank
Neutral
51,126
IndusInd Bank
Neutral
44,094
Kotak Mahindra Bank
Buy
73,107
RBL Bank
Buy
15,507
Banks – Private
9,38,069
Bank of Baroda
Neutral
1,19,536
Canara Bank
Buy
91,412
Indian Bank
Buy
65,510
Punjab National Bank
Buy
1,04,688
State Bank of India
Buy
4,29,841
Union Bank
Neutral
88,124
Banks – PSU
8,99,110
Total Banks
18,37,179
SBI Cards
Neutral
17,298
PAYTM
Neutral
20,620
SBI 2QFY26 PAT excludes exceptional item*
Company
Exhibit 81: Margin trend across key banks under our coverage
NIM (%)
1Q25
2Q25
3Q25
4Q25
AXSB
4.05
3.99
3.93
3.97
HDFCB
3.47
3.46
3.43
3.54
ICICIBC*
4.36
4.27
4.25
4.41
IDFCFB
6.22
6.18
6.04
5.95
IIB
4.25
4.08
3.93
2.25
KMB
5.02
4.91
4.93
4.97
FB
3.16
3.12
3.11
3.12
BoB**
3.18
3.10
2.94
2.98
CBK
2.90
2.86
2.71
2.73
PNB
3.07
2.92
2.93
2.81
SBIN
3.22
3.14
3.01
3.00
UNBK
3.05
2.90
2.91
2.87
INBK
3.53
3.49
3.57
3.48
AUBANK
6.00
6.05
5.90
5.80
RBK
5.67
5.04
4.90
4.89
BANDHAN
7.60
7.40
6.90
6.70
DCBB
3.39
3.27
3.30
3.29
EQUITAS
7.97
7.69
7.39
7.13
* 1QFY26 NIM adjusted for IT refund **NIM expanded due to Interest on IT refund
1Q26
3.80
3.35
4.27
5.71
3.46
4.65
2.94
2.91
2.55
2.70
2.90
2.76
3.35
5.40
4.50
6.40
3.20
6.55
2Q26
3.73
3.27
4.30
5.59
3.32
4.54
3.06
2.96
2.50
2.60
2.97
2.67
3.34
5.50
4.51
5.80
3.23
6.29
YoY (bp) QoQ (bp)
-26
-7
-19
-8
3
3
-59
-12
-76
-14
-37
-11
-6
12
-14
5
-36
-5
-32
-10
-17
7
-23
-9
-15
-1
-55
10
-53
1
-160
-60
-4
3
-140
-26
Source: MOFSL, Company
November 2025
43
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 82: Overall business momentum started to recover, with CASA ratio improving for some banks
INR b
AUBANK
AXSB
BANDHAN
BoB
CBK
DCBB
FB
HDFCB
ICICIBC
IDFCFB
IIB
INBK
KMB
PNB
RBK
SBIN
UNBK
2QFY26
1,157
11,167
1,346
12,583
11,301
530
2,447
27,464
14,085
2,571
3,259
6,052
4,627
11,338
1,005
43,617
9,483
Loans
YoY (%)
22.0
11.7
6.8
12.2
14.8
19.1
6.2
10.1
10.3
19.5
(8.8)
13.6
15.8
11.2
14.4
13.1
5.7
QoQ (%)
5.3
5.4
4.7
6.0
5.3
3.4
1.4
4.5
3.2
5.5
(2.3)
3.6
4.0
3.8
6.5
3.9
0.2
2QFY26
1,325
12,035
1,581
15,000
15,279
648
2,889
28,018
16,128
2,768
3,896
7,769
5,288
16,171
1,167
55,917
12,346
Deposits
YoY (%)
20.8
10.7
10.9
9.3
13.4
18.8
7.4
12.1
7.7
23.8
(5.5)
12.1
14.6
10.9
8.1
9.3
1.9
QoQ (%)
3.8
3.6
2.2
4.5
4.1
4.4
0.5
1.4
0.3
4.5
(1.9)
4.4
3.1
1.7
3.5
2.2
(0.4)
CASA ratio (%)
2QFY26
YoY (%)
QoQ (%)
29.4
(260)
20
40.0
(100)
-
28.0
(521)
90
38.4
(142)
(91)
30.7
(58)
113
23.5
(209)
20
31.0
94
66
33.9
(143)
(2)
40.9
21
(35)
50.1
120
210
30.7
(513)
(73)
37.2
(168)
(6)
42.3
(130)
140
37.3
(202)
30
31.9
(169)
(62)
39.6
(40)
27
32.6
(16)
4
Source: MOFSL, Company
Exhibit 83: Asset quality ratios improved overall for banks, barring Bandhan Bank
Asset quality
(%)
AUBANK
AXSB
BANDHAN
BoB
CBK
DCBB
FB
HDFCB
ICICIBC
IDFCFB
IIB
INBK
KMB
PNB
RBK
SBIN
UNBK
GNPA
2.47
1.57
4.96
2.28
2.69
2.98
1.91
1.40
1.67
1.97
3.64
3.01
1.48
3.78
2.78
1.83
3.52
1QFY26 (%)
NNPA
0.88
0.45
1.36
0.60
0.63
1.22
0.48
0.47
0.41
0.55
1.12
0.18
0.34
0.38
0.45
0.47
0.62
PCR
64.7
71.5
73.7
74.0
77.1
59.7
75.2
66.9
75.9
72.3
70.2
94.3
76.9
90.3
84.0
74.5
82.9
GNPA
2.41
1.46
5.02
2.16
2.35
2.91
1.83
1.24
1.58
1.86
3.60
2.60
1.39
3.45
2.32
1.73
3.29
2QFY26 (%)
NNPA
0.88
0.44
1.37
0.57
0.54
1.21
0.48
0.42
0.39
0.52
1.04
0.16
0.32
0.36
0.57
0.42
0.55
PCR
64.2
70.5
73.7
74.1
77.4
59.2
74.3
66.6
75.6
72.2
71.8
93.9
77.0
90.0
75.9
75.8
83.8
QoQ change (bp)
GNPA
NNPA
(6)
-
(11)
(1)
6
1
(12)
(3)
(34)
(9)
(7)
(1)
(8)
-
(16)
(5)
(9)
(2)
(11)
(3)
(4)
(8)
(41)
(2)
(9)
(2)
(33)
(2)
(46)
12
(10)
(5)
(23)
(7)
PCR
(52)
(103)
6
9
31
(60)
(92)
(24)
(29)
(14)
163
(36)
5
(30)
(811)
130
88
Exhibit 84: Snapshot of the restructured books across banks (%)
INR b
AXSB
DCBB
ICICIBC
IIB
KMB
FB
RBK
AUBANK
SBIN
INBK
UNBK
Absolute
10.7
7.4
16.2
2.6
NA
12.1
NA
2.3
NA
43.5
80.5
Sep’23 Dec’23 Mar’24
0.20
0.18
0.16
3.40
3.00
2.62
0.32
0.29
0.26
0.54
0.48
0.40
0.15
0.13
0.10
1.30
1.10
0.97
0.89
0.63
0.51
0.80
0.70
0.60
0.62
0.54
0.47
2.12
1.93
1.67
1.71
1.57
1.48
Restructured book
Jun’24 Sep’24 Dec’24 Mar’25 Jun’25
0.14
0.13
0.12
0.12
0.11
2.34
2.07
1.81
1.60
1.51
0.22
0.20
0.16
0.15
0.13
0.34
0.29
0.18
0.12
0.10
0.08
0.06
0.05
0.05
NA
0.83
0.71
0.68
0.61
0.55
0.44
0.38
0.32
0.29
0.29
0.40
0.40
0.30
0.30
0.30
0.38
0.38
0.34
0.31
0.31
1.51
1.34
1.23
0.85
0.85
1.30
1.21
1.08
0.91
0.91
Sep’25
0.10
1.39
0.12
0.08
NA
0.49
NA
0.20
NA
0.72
0.83
November 2025
44
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 85: We raise our earnings estimates for the sector, mainly PSU banks, led by better NIMs and healthy credit growth
PAT (INR b)
Private Banks
AXSB
BANDHAN
DCBB
HDFCB
ICICIBC
IDFCFB
IIB
KMB
FB
RBK
AUBANK
EQUITASB
Total Private Banks
YoY growth (%)
PSU Banks
BOB
CBK
INBK
PNB
SBIN
UNBK
Total PSU Bank
YoY growth (%)
Total for Banks
YoY growth (%)
Other Financials
SBICARD
PAYTM
FY26E
245.3
24.1
7.2
720.8
520.6
22.2
28.4
141.0
38.3
10.5
26.0
0.2
1,784.7
3.8
183.4
184.8
122.7
162.2
700.0
161.6
1,514.7
-1.0
3,299.3
1.5
26.7
6.4
Old estimates
FY27E
308.4
35.3
10.1
831.3
584.8
45.5
48.5
166.9
47.8
19.0
36.4
6.3
2,140.3
19.9
212.5
201.7
128.6
211.6
802.8
178.8
1,735.9
14.6
3,876.2
17.5
37.7
12.7
FY28E
377.9
43.3
13.7
963.3
684.6
64.7
64.7
203.3
63.3
26.7
47.5
10.1
2,563.1
19.8
262.7
228.1
144.4
244.8
921.5
207.8
2,009.3
15.7
4,572.4
18.0
45.6
18.0
Revised estimates
FY26E
FY27E
FY28E
242.6
15.8
7.5
751.0
518.4
21.9
10.7
140.6
40.2
10.2
26.2
0.2
1,785.4
3.9
192.7
194.1
125.5
165.7
774.1
166.7
1,618.8
5.8
3,404.2
4.8
23.6
6.4
306.8
29.4
9.9
837.1
589.1
45.3
38.8
167.3
51.6
22.7
35.5
6.5
2,140.0
19.9
213.8
207.6
129.9
217.6
827.7
183.3
1,779.9
10.0
3,919.9
15.1
33.6
12.7
370.5
37.9
12.3
990.6
682.0
66.1
57.3
202.2
66.5
31.3
46.9
10.3
2,573.9
20.3
249.5
232.6
144.5
253.5
928.3
209.7
2,018.2
13.4
4,592.1
17.1
41.6
19.8
FY26E
-1.1
-34.5
4.4
4.2
-0.4
-1.7
-62.3
-0.2
4.8
-2.5
0.7
0.8
0.0
Change (%)
FY27E
-0.5
-16.7
-2.1
0.7
0.7
-0.3
-20.0
0.2
7.9
19.5
-2.5
2.5
0.0
FY28E
-2.0
-12.5
-10.2
2.8
-0.4
2.3
-11.5
-0.6
5.0
17.2
-1.1
2.4
0.4
5.1
5.0
2.3
2.1
10.6
3.2
6.9
3.2
0.6
2.9
1.0
2.9
3.1
2.5
2.5
1.1
-5.0
2.0
0.0
3.6
0.7
0.9
0.4
0.4
-11.8
1.0
-10.7
0.1
-8.7
10.0
FINANCIALS – NBFC: Early signs of demand revival; asset quality trends still mixed
NBFCs reported a mixed performance in 2QFY26 in terms of loan growth and asset quality, with early signs of
demand revival visible across the vehicles (PV, Tractors, and 2W) and consumer durables (electronics) segments,
while seasonal asset quality pressures persisted, which were more product-specific in nature. NBFCs (incl. HFCs)
under our coverage reported AUM growth of ~16% YoY/3% QoQ in 2QFY26. Vehicle financiers (VFs) clocked
AUM growth of 17% YoY. Large HFCs (PNBHF and LICHF) grew 11% YoY; affordable and small-ticket HFCs
reported ~13% YoY growth; NBFC-MFIs’ AUM declined ~22% YoY (down 4% QoQ), and gold loan NBFCs’ AUM
rose ~42% YoY (driven by strong growth in both MUTH and MGFL). For our coverage NBFCs, NII/PPoP/PAT grew
16%/16%/19% YoY.
For HFCs (including affordable HFCs), NIM showed divergent trends during the quarter, with large HFCs (except
BHFL) exhibiting margin contraction, while affordable HFCs reported NIM expansion. LIC reported a decline of
~5bp QoQ, while PNBHF reported a ~7bp decline, primarily due to PLR cuts taken by these companies and lower
yields on new business as a result of heightened competition in a declining interest rate environment. In
contrast, affordable HFCs reported margin expansion, supported by a decline in borrowing costs and no changes
in PLR. HomeFirst reported NIM expansion of ~5bp QoQ, while Aavas and Repco also recorded a sequential
expansion in NIM. Most of the NBFCs reported a decline in their cost of funds, supported by the repricing of
EBLR-linked borrowings. However, the benefit of MCLR-linked borrowings (which has so far been limited) is
expected to further benefit the CoB in 2HFY26, when banks pass it on through MCLR reduction.
For vehicle financiers (VF), except for SHFL, the asset quality deteriorated, driven by seasonality and lower
vehicle utilization caused by early and prolonged monsoons, along with excessive rainfall in certain regions.
Some VFs also highlighted continued stress in the CV segment. However, 2H is expected to be much better as
November 2025
45
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
favorable monsoons would support stronger rural cash flows. VFs also noted that broader macro softness, partly
due to muted government capex, has necessitated elevated collection efforts during the quarter.
Affordable HFCs (except Aavas) exhibited a sequential deterioration in asset quality, driven by US tariff-related
problems in specific regions (like Surat, Tiruppur, Chennai), monsoon-related disruptions, and potentially some
spillover of stress from the micro-LAP (and MFI) segment into the affordable housing segment.
NBFC-MFIs continued to exhibit an improvement (or stability) in PAR levels across geographies. Although some
geography-specific issues emerged due to excess rainfall, they remained well-contained and manageable.
Sequentially, lower credit costs were supported by sustained collection efforts and a decline in PAR accretion.
MFI lenders also reported better overall collection efficiency and stability in forward-flow rates, with
expectations of a further improvement in the coming quarters. MFIs expect a significant recovery from 2HFY26,
with growth gaining momentum alongside further improvement in asset quality and normalization in credit
costs.
HFCs/AHFCs – Heightened competition resulting in higher BT-out; NIM contraction for large HFCs; Asset quality
weakens for affordable HFCs:
Demand trends during the quarter remained subdued, primarily due to heightened
competitive intensity from banks and a moderation in real estate activity in recent quarters. In the prime
housing segment, HFCs faced aggressive pricing competition from banks, leading to higher portfolio attrition
through BT-Outs. Asset quality remained broadly stable with a slight improvement seen for large HFCs, while
affordable HFCs (excluding Aavas) exhibited some weakness, likely driven by seasonal factors such as excessive
rainfall and the impact of US tariffs in certain geographies. Margins contracted for large HFCs, while affordable
players witnessed some expansion, supported by a decline in the cost of funds. Large HFCs such as LICHF,
PNBHF, and Bajaj Housing reduced their PLR, as a reflection of the heightened competitive landscape and the
pass-through of lower borrowing costs. In contrast, small-ticket HFCs have kept their PLR unchanged, though
portfolio yields moderated slightly as they focused on onboarding better-quality customers and lower new
business yields.
Vehicle financiers – Demand revival visible in PV/2W/Tractors from GST cuts; Weakness persists in CV; Expect
asset quality to improve in 2H:
Demand showed early signs of revival in the last week of Sep’25 and continued
to sustain in Oct’25, following the GST cut. Most NBFCs highlighted that this demand momentum is expected to
continue in Nov and Dec’25 as well. Growth was strong across PVs (particularly entry-level cars), tractors, and
2Ws. However, demand in the CV segment continues to remain subdued as lower OEM discounts limited the
overall price benefit for customers. Vehicle financiers reported elevated credit costs (except SHFL), as the early
and prolonged monsoons led to lower vehicle utilization and temporary disruption in certain geographies,
leading to weakness in borrower cash flows. Several NBFCs highlighted that stress in the new CV segment
persisted in 2Q as well. Disbursements (impacted by deferred sales due to GST cut) grew 5% YoY for the three
VFs in our coverage universe. While SHFL and CIFC have a diversified AUM mix, we have classified them under
VFs for this exercise. All three vehicle financiers reported sequential margin expansion, driven by a decline in the
cost of funds. For SHFL, the reduction in surplus liquidity also aided in NIM expansion, which is likely to continue
in 2H as well, as banks further transmit MCLR reductions.
Diversified financiers – Pickup in personal loans; Stress in unsecured MSME persists; micro-LAP <INR500K
ticket size also exhibited heightened stress:
Diversified lenders reported stable credit costs sequentially, despite
lingering stress in select segments such as unsecured business loans and micro-LAP. While industry-wide growth
in the LAP segment remains robust, lenders expressed greater confidence in expanding their unsecured retail
and consumer durable portfolios. Moreover, diversified lenders are now showing increased conviction in scaling
up their personal loan business, with a clear shift toward prime and near-prime customers, higher ticket sizes,
and borrowers with strong CIBIL scores, reflecting a more risk-calibrated approach to growth. There has been a
significant pickup in consumer durable loans since the GST rate cuts in the last week of Sep’25, which was
further supported by festive-season demand. Lenders expect this momentum to sustain through 2HFY26.
Gold financiers – Turbo-charged gold loan growth driven by higher gold prices and credit rationing in
unsecured segments:
Demand for gold loans was strong during the quarter. This was primarily driven by lower
46
November 2025
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
availability of MFI/Unsecured and MSME loans and a steady rise in gold prices over the past year. MUTH/MGFL
reported ~45%/29% YoY growth in gold loans in 2QFY26. Gold loan NBFCs indicated that although competition
has intensified, the sector still offers ample growth opportunities. For Asirvad, while losses have reduced
sequentially due to moderation in credit costs, MFI AUM continued to witness a significant rundown. IIFL
Finance recorded an improvement in gold loan yields, while MGFL reported a decline as part of its strategy to
align pricing with other gold loan NBFC peers. MUTH, on the other hand, reported an NIM expansion, driven by
higher recoveries from older NPA accounts and a higher share of higher-yield products disbursed over the past
two quarters.
Microfinance (MFIs) – Loan book continues to run down; sequential decline in credit costs driven by an
improvement in PAR rates:
NBFC-MFIs reported further improvement in PAR levels and overall asset quality
during the quarter. While the pace of improvement was slower-than-expected due to geography-specific issues
arising from excess rainfall, these challenges remained well-contained and manageable, and we now expect a
more meaningful recovery in 2H. NBFC-MFIs are focusing more on portfolio diversification, aided by the recent
regulatory change of lowering the qualifying asset requirement to ~60%, which provides a supportive
framework. AUM was sequentially flat for CREDAG, but Fusion and Spandana continued to report YoY/QoQ
declines due to disbursements lagging the rundowns, alongside elevated technical write-offs. Disbursements
improved sequentially, but a more meaningful recovery in disbursement momentum is expected in 2HFY26,
when AUM growth is also likely to resume. NIM also expanded for MFIs due to a reduction in interest income
reversals, driving improvement in overall yields.
Power financiers – Muted loan growth; NIM contracts QoQ; Asset quality stable:
PFC and REC posted a muted
performance in the quarter, with loan growth remaining subdued due to elevated repayments. Loan growth
came in at ~14% YoY for PFC and about ~7% YoY for REC. NIMs contracted by ~5bp for PFC and ~10bp for REC,
while asset quality remained stable. There were no resolutions of any stressed assets during the quarter.
Our view:
Relative to expectations, NBFCs delivered a slightly better quarter, with early signs of demand revival
becoming visible across most product segments. Lenders also shared their higher confidence in scaling their
unsecured portfolios, supported by improving borrower profiles and a more risk-calibrated approach. Asset
quality trends were mixed, with certain segments such as CV, unsecured MSME, and micro-LAP continuing to
exhibit stress, while others, including NBFC-MFIs and personal loans, showed relatively stable trends. However,
most lenders expect a stronger recovery in asset quality in 2HFY26, driven by stronger rural cash flows post-
monsoon, improving macros, and better collection efficiency. With MFIs now exhibiting early recovery, we
expect even micro-LAP lenders to exhibit recovery within the next six months. Any interest rate cut in
Dec’24/Mar’25 MPC meeting will be positive for fixed-lenders and only marginally negative for large HFCs.
Our
preferred ideas are SHFL, LTFH, Piramal Finance, and AB Capital.
Positive Surprises:
Muthoot, CANF, and SHFL
Misses:
PFC
Rating Change:
Piramal Finance (Upgrade to BUY)
Guidance highlights
a) CIFC reiterated that the 20%+ AUM growth target remains intact, and it does not appear to be at risk; b) MUTH
has revised its gold loan growth guidance to 30-35% (from the earlier 15%), and it expects NIM to sustain at current
levels; c) BAF revised its FY26 AUM growth guidance to 22-23% (from 24 25%) to reflect the growth moderation in
the MSME segment and a lower growth guidance in the mortgage (BHFL) portfolio. BAF also guided for credit costs
to remain at the upper end of the guided range (~1.85-1.95%); d) PNBHF guided for retail recoveries to continue in
FY26 and targets retail loan growth of ~17-18%; and e) NBFC-MFIs witnessed improvements in collection efficiencies
and guided for moderation in credit costs and a resumption of sequential AUM growth in 2HFY26.
November 2025
47
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 86: PBT grew 18% YoY and 4% QoQ for our NBFC coverage universe*
PBT - YoY growth (%)
63
39
22
13
13
10
13
18
6
-1
Q1 2024
Q2 2024
Q3 2024
Q4 2024
Q1 2025
Q2 2025
Q3 2025
Q4 2025
Q1 2026
Q2 2026
Source: MOFSL, Company, *MOFSL universe excl. Indostar
Exhibit 87: LICHF loan growth has lagged the industry, while
PNBHF retail loan growth has been gaining momentum
1HFY25
9MFY25
FY25
Q1 2026
15
16
Q2 2026
16
Exhibit 88: Loan growth was broadly stable across all
affordable HFCs during the quarter
1HFY25
20 20
9MFY25
FY25
Q1 2026
Q2 2026
14
15
18
16 16
10 9
9
9
8
8
8
6
6
7
7
6
7
7
7
LICHF
PNBHF
Source: MOFSL, Company;
Note: YoY AUM growth for large HFCs
AAVAS
CANF
Repco
Source: MOFSL, Company;
Note: YoY AUM growth for affordable housing financiers
Exhibit 89: AUM growth for VFs moderated slightly due to
seasonality; however, early signs of demand revival visible
1HFY25
9MFY25
FY25
Q1 2026
33
30
Q2 2026
Exhibit 90: Gold loan growth remained strong, aided by
higher gold prices and lower availability of unsecured loans
1HFY25
9MFY25
FY25
Q1 2026
Q2 2026
43 42 44
27
20 19
17
17
16
37
24
21
20
19
31
17 18 19
22
29
17
15 13
SHFL
MMFS
CIFC
MUTH
MGFL
Source: MOFSL, Company
Note: YoY AUM growth for gold financiers
Source: MOFSL, Company
Note: YoY AUM growth for vehicle financiers
November 2025
48
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 91: PAT grew 19% YoY for our NBFC coverage universe*
NII
2QFY26 YoY (%) QoQ (%)
AAVAS
2,881
19
4
ABCAP (NBFC)
19,942
17
7
ABCAP (HFC)
4,200
54
11
BAF
1,07,847
22
5
Bajaj Housing Finance
9,565
34
8
CANF
4,046
19
12
CIFC
33,787
25
6
Fivestar
5,931
15
3
HomeFirst
2,065
32
6
HDB Financial
21,925
20
5
IIFL Finance
14,390
7
11
LTHF
27,015
6
3
LICHF
20,385
3
-1
MMFSL
21,116
17
5
MASFIN
1,645
24
1
MGFL
13,756
-16
-0
Muthoot
39,917
59
15
PIEL
10,183
31
13
PNBHF
7,505
13
1
PFL
7,644
37
20
REPCO
2,013
7
2
SHFL
60,258
10
4
CREDAG
9,346
0
3
FUSION
2,465
-38
-10
SPANDANA
1,048
-70
-19
PFC
52,893
20
-3
REC
54,455
10
-2
Total
5,58,222
16
4
INR m
PPOP
2QFY26 YoY (%) QoQ (%)
2,192
12.5
15.1
13,352
13.1
0.8
2,220
91.7
21.3
88,736
21.4
4.6
8,823
23.8
10.6
3,346
16.3
10.1
24,578
27.9
1.9
4,330
13.9
7.5
1,885
49.5
12.1
15,305
24.4
9.1
10,570
23.9
21.7
16,335
2.7
3.7
18,729
7.5
-1.0
14,989
25.3
10.8
1,574
22.6
1.6
6,712
-35.0
1.6
32,655
70.5
17.1
4,326
36.6
11.7
6,465
15.6
2.3
3,866
36.1
19.1
1,410
3.1
-1.9
44,415
11.5
5.9
6,948
3.4
6.4
890
-68.6
2.8
-690
-130.3
17.5
57,819
8.5
19.7
56,875
16.2
13.1
4,48,654 16.2
9
PAT
NIM
2QFY26 YoY (%) QoQ (%) 2QFY26 YoY (bp) QoQ (bp)
1,639
10.8
17.7
7.0
37
16
7,140
13.5
3.6
5.9
-28
12
1,940
86.9
26.0
4.0
-20
-14
49,478
23.3
3.8
9.5
-16
1
6,430
17.8
10.2
4.0
-10
-
2,514
18.9
12.3
4.1
36
36
11,553
20.0
1.7
6.9
13
15
2,861
6.8
7.4
18.8
-66
-23
1,318
43.0
10.9
6.0
20
4
5,814
-1.6
2.4
7.9
40
21
3,763
-338.7
61.3
3.1
-77
13
7,349
5.5
4.9
10.3
-87
-17
13,539
1.9
-0.4
2.6
-8
-5
5,693
54.1
7.5
6.8
16
12
897
17.1
6.9
7.7
59
2
2,173
-62.0
64.1
12.4
-238
-48
23,452
87.4
14.6
13.2
134
55
3,270
100.7
18.3
7.1
50
-
5,816
23.8
9.0
3.7
-1
-7
742
-
18.5
7.7
-28
-4
1,069
-5.0
-0.9
5.5
40
10
23,053
11.4
6.9
8.7
-47
8
1,258
-32.4
109.0
13.3
-20
50
-221
-92.7
-76.0
10.9
-65
55
-2,492
15.2
-30.8
10.8
-317
30
44,619
2.1
-0.9
3.7
17
-19
44,259
10.5
-0.6
3.7
2
-15
2,68,928
19
6
Source: MOFSL, Company, *MOFSL universe excl. Indostar
Advances/AUM
YoY (%)
16.1
21.7
64.7
23.6
23.6
8.4
21.0
17.6
26.3
13.0
34.6
15.1
5.8
13.2
18.0
0.4
46.7
22.4
14.8
68.0
7.7
15.7
3.1
-39.2
-61.2
13.8
6.6
15.8
Exhibit 92: Advances/AUM growth
INR b
AAVAS
ABCAP (NBFC)
ABCAP (HFC)
BAF
Bajaj housing finance
CANF
CIFC
Fivestar
HomeFirst
HDB Financial
IIFL Finance
LTHF
LICHF
MMFSL
MASFIN
MGFL
Muthoot
PIEL
PNBHF
PFL
REPCO
SHFL
CREDAG
FUSION
SPANDANA
PFC
REC
Total
2QFY26
214
1,396
383
4,623
1,267
397
1,992
128
142
1,114
901
1,071
3,118
1,272
130
459
1,323
914
798
477
150
2,813
259
70
41
5,612
5,822
36,886
QoQ (%)
3.0
6.4
10.6
4.7
5.3
2.3
3.6
3.1
5.2
1.9
7.4
4.7
0.7
4.3
4.0
3.6
10.2
6.6
2.6
15.6
2.3
3.3
-0.6
-8.5
-17.5
2.1
-0.4
3.21
November 2025
49
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 93: Asset quality snapshot
Asset quality
(%)
AAVAS
ABCAP (NBFC)
ABCAP (HFC)
BAF
Bajaj Housing
CANF
CIFC
HomeFirst
HDB Financial
IIFL Finance
LTFH
LICHF
MMFSL
MASFIN
MGFL
Muthoot
PIEL
PNBHF
PFL
REPCO
SFL
CREDAG
FUSION
SPANDANA
PFC
REC
As on 1QFY26 (%)
GNPA
NNPA
1.2
0.8
2.2
1.2
0.6
NA
1.03
0.5
0.30
0.1
1.0
0.5
3.2
1.8
1.8
1.4
2.6
1.1
2.3
1.1
3.3
1.0
2.6
1.3
3.9
1.9
2.5
1.6
3.0
2.6
2.6
NA
2.6
1.9
1.1
0.7
1.8
0.9
3.3
1.2
4.5
2.6
4.7
1.8
5.4
0.2
5.5
1.3
1.9
0.4
1.1
0.2
PCR
31.6
45.1
NA
51.9
56.2
45.0
43.7
22.0
56.7
52.3
70.8
50.8
51.4
41.2
NA
NA
29.4
35.4
53.9
64.7
44.3
63.2
96.6
78.9
80.3
77.1
As on 2QFY26 (%)
GNPA
NNPA
1.2
0.9
1.7
0.9
0.6
NA
1.24
0.6
0.26
0.1
0.9
0.5
3.4
1.9
1.9
1.5
2.8
1.3
2.1
1.0
3.3
1.0
2.5
1.2
3.9
1.9
2.5
1.7
3.0
2.6
2.3
NA
2.4
1.8
1.0
0.7
1.6
0.8
3.2
1.5
4.6
2.5
3.7
1.3
4.6
0.4
5.6
1.3
1.9
0.4
1.1
0.2
PCR
31.9
46.0
NA
51.8
55.7
48.8
43.2
21.0
54.7
52.8
70.3
53.1
53.0
41.3
NA
NA
29.4
34.2
49.7
52.5
46.7
66.3
92.1
79.3
80.2
77.1
QoQ change (bp)
GNPA
NNPA
PCR
2
1
30
-52
-30
90
-1
-
-
21
10
-14
-4
-1
-49
-4
-4
382
19
13
-48
9
9
-106
25
17
-196
-20
-11
53
-1
1
-53
-11
-11
228
9
-2
160
4
6
12
0
0
-
-33
-
-
-22
-17
8
-2
0
-118
-25
-4
-428
-14
34
-1212
4
-8
239
-105
-53
310
-82
19
-451
12
-2
38
-5
-2
-6
1
0
0
Source: MOFSL, Company
FINANCIALS – CAPITAL MARKETS AND INSURANCE: Capital market players continue to witness
sequential recovery; modest premium growth for general insurers; VNB margin expands for life insurers
Cash volumes soft; F&O and MTF support recovery:
Capital market activity was slightly impacted by a volatile
market environment, with cash volumes declining 16% MoM in Jul’25 before a slight recovery of 1%/3% MoM
growth in Aug’25/Sep’25. While notional F&O ADTO witnessed sequential growth across the quarter, option
premium ADTO declined 11% MoM in Jul’25 before witnessing a 15% MoM growth in Aug’25, and remained
flattish in Sep’25. The run rate in demat account additions improved on a sequential basis to 7.9m in 2QFY26 vs.
6.7m in 1QFY26. ANGELONE continues to witness sequential growth in revenue post the F&O regulations impact
in 4QFY25, driven by sequential growth in F&O orders (7% sequential rise in F&O orders), strong growth in
commodity activity (7% sequential growth in commodity orders), and a continued surge in MTF book.
Premium-to-notional turnover ratio improves for exchanges; commodity sees a strong surge:
Strong growth in
the premium turnover market share (24.4% in Sep’25 vs 13.3% in Sep’24)—driven by an improving premium-to-
notional turnover ratio and increased non-expiry day trading activity—significantly boosted BSE’s top line and
profitability. Star MF continued to report healthy performance, marking an 18% YoY growth in revenue.
Meanwhile, commodities markets achieved a new peak, backed by rising prices of precious metals, leading to a
surge in options volumes (87% YoY growth in total volumes) and strong revenue growth for MCX. Options ADT
surged 91% YoY in 2QFY26, largely supported by a 7x YoY growth in bullion contracts, while growth in energy
contracts remained flattish. Futures ADT rose 54% YoY, fueled by 82%/21% YoY growth in bullion/energy
contracts.
AMCs reported strong SIP inflows; other income declined sequentially:
MF industry QAAUM rose 7% QoQ to
INR77.1t at the end of Sep’25, driven by strong SIP flows, with equity QAAUM share inching up QoQ to 57.5%
(vs. 57.1% in Jun’25). SIP inflows remained robust at INR861b in 2QFY26, including a record INR294b in Sep’25,
and
AMCs
expect this momentum to sustain. Yields marginally softened across AMCs, RTAs, and distributors,
largely due to telescopic pricing. Other income declined sequentially for all players amid market volatility and
November 2025
50
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
higher bond yields, resulting in MTM losses. The recent SEBI consultation paper—potentially influencing AMC
yields and distributor commissions—remains a key monitorable.
Wealth managers
remain confident on
sustaining flow momentum, with yields expected to stay largely stable.
VNB margin expands; early signs of growth post GST exemption:
APE growth softened after mid-teen growth in
Jul’25 as buyers delayed purchases following the GST exemption announcement, resulting in ~9% YoY growth in
2QFY26. However, the sector rebounded with 19% YoY growth in Oct’25, reflecting strong momentum post GST
exemption. Higher non-par mix, increased sum assured, and rising rider attachments supported broad-based
VNB margin expansion. Management teams expect further margin gains, driven by product mix shift, GST-led
higher sum assured, stronger rider penetration, and better persistency. The GST-related loss of input tax credit
led to <1% EV impact for all players, with mitigation underway via commission renegotiation and efficiencies.
APE grew 9%/10%/16% for HDFCLIFE/SBILIFE/MAXLIFE, while LIC/IPRU saw 1%/3% YoY declines. VNB margins
declined 20bp YoY for HDFCLIFE but expanded 100bp/100bp/190bp/140bp YoY for SBILIFE/IPRU/MAXLIFE/LIC.
Industry growth soft; strong momentum in motor and health post GST changes:
Industry growth in 2QFY26
remained soft, weighed down by the 1/n regulation in health and some postponement of purchases post the
GST-exemption announcement, partly offset by a recovery in motor. ICICIGI focused on profitable growth,
gaining share in retail health and seeing improvement in other segments late in the quarter. STARHEAL
maintained its retail health share, expecting price hikes and claims controls to support loss-ratio improvement.
NIVABUPA saw flattish retail health loss ratios, while group health loss ratios rose due to 50% URR accounting.
Most insurers have passed on the GST-related loss of input tax credit to distributors; post exemption, customer
preference has been shifting toward higher coverage. NEP growth for ICICIGI/STARHEAL/NIVABUPA stood at
12%/10%/17% YoY, with slight improvement in retail health loss ratios across players.
Valuation and view:
Recovery in F&O activity was witnessed while cash activity was low due to volatile market
conditions, though
exchanges
and
brokers
are seeing a gradual recovery post the regulatory-driven dip.
Mutual
fund
flows are expected to stay healthy, supported by improving fund performance, rising retail participation, and
steady SIP momentum.
Wealth managers
should continue to benefit from strong inflows, with an increasing share
of recurring revenues.
In
life insurance,
VNB margins are likely to improve as the product mix shifts toward retail protection and annuities,
despite some drag from loss of input tax credit; overall growth should strengthen post GST exemption. For
general
insurance,
a recovery in auto sales and robust health insurance growth post GST exemption are expected to drive
premium expansion.
Top Picks:
ABSLAMC, NIPPONAMC, NUVAMA, MAXLIFE, CAMS
Surprises:
MAXF, LIC, BSE, Nuvama, CDSL, HDFCAMC, ICICIGI
Misses:
NIVABUPA, UTI AMC
Guidance highlights
NUVAMA:
In asset services, ~50% of the lost volume was regained, with full recovery expected by mid-4QFY26;
yields should stay in the 2.6–3.3bp range. The capital markets segment is expected to strengthen with strong IPO
momentum in 2H. The proposed SEBI brokerage changes may impact IE revenue by INR 200–250m, However,
this could be offset if brokerage stabilizes at 5–6bp rather than the proposed 2bp, mitigating potential
downside. The company has applied for an AMC license to tap the SIF opportunity by Apr’26.
ANGELONE:
Operating margin guidance remains at 40–45% for 4QFY26, supported by cost efficiencies and tech
initiatives like the AI chatbot (long-term OPM is expected to reach 45–50%). Revenue growth is expected from
sustained order run rates, MTF book expansion, steady client addition, and distribution traction. Broking is
projected to grow ~25% CAGR, with newer businesses—wealth, AMC, distribution, and insurance—contributing
double-digit revenue, aiding diversification. Price revisions in broking could add INR 500–600m annually. Wealth
segment may break even in ~3 years, while AMC segment in 7–8 years.
November 2025
51
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
CAMS:
EBITDA margins for the non-MF business are currently 10–13%, with management targeting 25–30% over
the next few years. Cost growth guidance remains 10–11% YoY. The impact of price renegotiations with a large
client has largely been absorbed (~90%), with only a minor residual effect expected. Yield compression of 3.5–
4% p.a. remains on track, with limited impact from client renewals over the next 18 months. On the SIF front,
CAMS launched its first scheme in Oct’25, with more expected soon; six AMCs have been onboarded in the past
nine months, and three more are set to go live.
BSE:
The exchange will continue to contribute 5% of transaction revenue monthly to the core SGF until the
corpus reaches 150% of the required level, smoothing earnings and mitigating sudden SGF spikes. All existing
racks are fully allocated, with 70–90 additional racks planned by FY26, taking the total capacity to ~500 (6KVA
and 15KVA). In derivatives, the focus remains on boosting institutional participation, longer-dated contracts, and
strengthening data centre infrastructure.
NIPPON AMC:
The company guides for a 1–2bp annual yield decline from telescopic pricing, with revised
commissions now covering four schemes (~60% of equity AUM). It has an SIF team in place and fund launches
underway, supported by strong HNI demand. Offshore AUM softened on geopolitical and MTM impacts but is
expected to recover. Retail distribution improved to 54% and is expected to remain stable. ESOP costs are
guided at INR420–430m for FY26 and ~INR260m for FY27. A robust pipeline across AIF, offshore, and GIFT City
products is underway.
ABSLAMC:
Equity yields saw a minor dip from telescopic pricing during the quarter but are expected to hold
steady at 64–65bp. Other expenses should remain at the current run rate, while employee costs are projected to
rise ~12% YoY for the full year. The company has secured SEBI approval for its SIF product and will first launch an
Arbitrage scheme, with the Long-Short scheme to follow once the team onboarding is completed.
ICICIGI:
The company achieved strong motor profitability despite pricing pressure, aided by disciplined
underwriting. Post-GST rate cuts, momentum has improved sharply, with Sep’25 showing a strong pickup after
muted 1H growth; management expects this to continue into 2HFY26, driven by volume recovery and
profitability gains. GST exemption on health insurance should boost affordability and coverage, with the
company passing the full benefit to customers, while retail health loss ratios are expected to remain in the 65–
70% range.
NIVABUPA:
Management reaffirmed its mid-to-high teens RoE outlook and sees no near-term price revisions.
Claims remained stable and within guidance. The EoM ratio improved to 35.5% in 1HFY26, aided by lower
commissions and scale benefits, with confidence in meeting the FY26 regulatory threshold. GST exemption has
sharply boosted demand, with retail health up 50% YoY in Oct’25 and strong digital traction. It has passed the
loss of input tax credit to distributors, who have responded positively, given the higher volume and ticket-size
potential.
HDFCLIFE:
It has passed the full GST exemption benefit to customers, improving affordability and driving
stronger demand. The loss of input tax credit will pressure margins—reducing VNB by 0.5% in 2QFY26 and ~3%
for FY26—but management expects to offset this within 2–3 quarters through cost actions and
distributor/vendor negotiations. Solvency declined due to dividend payout, debt repayment, GST impact, and
new business strain, but the planned INR7.5b debt raise in 2HFY26 should add ~7% to solvency, supporting the
180–185% target. Tier-2/3 cities remain a key growth driver, contributing ~70% of new business, and are
expected to sustain.
MAXLIFE:
The company has passed the full GST benefit to customers, boosting demand—especially in protection
products. The loss of input tax credit impacted VNB margins by 60bp in 1HFY26 and will create a 300–350bp
drag on a run-rate basis. However, the company plans to offset this through cost actions, distributor
renegotiations, and product mix improvements, maintaining its 24–25% VNB margin guidance. RoEV guidance of
18–19% remains unchanged. Credit life recovered in 2Q and should sustain, supported by a shift toward higher-
margin protection and non-par savings. The company continues to hold a 65–66% Axis Bank counter share in the
individual business and ~60% in credit life, which is expected to rise to 65-70%. IRDAI SEZ and provisional IFSC
approvals will enable deeper NRI servicing and expand the company’s international reach.
52
November 2025
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
INR m
AMCs
HDFC
ABSL
NAM
UTI
Broking/Exchanges
ANGELONE
BSE
MCX
Wealth Management
360 ONE WAM
Nuvama
Anand Rathi
Prudent Corporate
Intermediaries
CAMS
KFIN Technologies
CDSL
NSDL
General Insurance
STARHEAL
NIVA BUPA
ICICIGI
Life Insurance
HDFCLIFE
IPRU
SBILIFE
MAXFIN
LIC
Revenue
YoY (%)
16
9
15
5
-15
44
31
30
4
23
12
EBITDA
YoY (%)
14
13
15
-19
-49
78
36
25
-4
32
5
PAT
YoY (%)
25
-0
-4
-50
-50
61
29
28
-1
31
4
-6
4
-14
15
PAT
YoY (%)
-51
NA
18
PAT
YoY (%)
3
19
-7
-96
32
2QFY26
10,274
4,613
6,581
3,900
8,353
10,684
3,742
7,628
7,718
2,974
3,198
3,767
3,092
3,189
4,000
2QFY26
44,238
18,431
70,589
2QFY26
41,880
24,220
59,500
25,070
1,63,820
QoQ (%)
6
3
8
3
5
12
0
15
0
9
9
2QFY26
8,008
2,826
4,295
1,487
2,939
6,909
2,436
3,627
3,346
1,375
722
QoQ (%)
4
6
11
-14
79
10
1
17
-4
8
7
2QFY26
7,184
2,413
3,443
1,322
2,117
5,570
1,975
3,156
2,540
999
535
1,139
933
1,400
1,104
2QFY26
549
-353
8,195
2QFY26
4,472
2,993
4,946
60
1,00,534
QoQ (%)
-4
-13
-13
-48
85
4
-3
10
-4
6
3
5
21
37
23
QoQ (%)
-79
NA
10
QoQ (%)
-18
-1
-17
-93
-8
3
6
10
13
-1
23
12
28
Gross Premium
YoY (%)
QoQ (%)
1
23
4
13
2
-12
APE
YoY (%)
QoQ (%)
9
30
-3
30
10
50
16
50
-1
29
1,676
-2
9
1,357
7
19
1,776
-11
36
1,279
13
34
Underwriting Profit/(Loss)
2QFY26
YoY (%)
QoQ (%)
-2,041
NA
NA
-1,780
NA
NA
-1,784
NA
NA
VNB
2QFY26
YoY (%)
QoQ (%)
10,110
8
25
5,920
1
30
16,600
14
52
6,390
25
91
31,670
8
63
Healthcare: EBITDA growth modest in the past eight quarters; Hospitals: High base affects YoY growth
In the pharma coverage universe, 2QFY26 operational performance was in line with estimates. However, earnings
were below estimates (6% miss). Excluding GNP (as it had a certain one-off related to the domestic formulation
business), our pharma coverage universe’s revenue/EBITDA/PAT was in line with our estimates. Additionally, the
healthcare services coverage universe also delivered in-line sales/EBITDA/PAT for the quarter.
Pharma companies, on an aggregate basis, have recorded YoY revenue growth for eight consecutive quarters, with
growth of 10.2% in 2QFY26. EBITDA/PAT growth has been moderating for three quarters, as competition in certain
niche products, like g-Revlimid, has dragged overall performance. Interestingly, several companies (DRRD, Cipla,
ARBP, SUNP) benefited from this opportunity due to settlement agreements with the innovator. However, the
quantum of this benefit has been reducing with the rise in competitive intensity. Additionally, the GST transition
had a temporary impact on the companies’ sales, with a strong focus on the domestic formulations segment.
Unfavorable seasonality in 2QFY26, along with higher infection levels in 2QFY25, further affected YoY growth on an
aggregate basis.
EBITDA YoY growth of 5% in 2QFY26 would be the lowest in the past 12 quarters. PAT YoY growth has also
decelerated to 12% on a YoY basis for 2QFY26.
The stability in raw material prices provided some support to profitability in 2QFY26. EBITDA margin (ex-GNP)
contracted 100bp YoY in 2QFY26 on an aggregate basis to 22.3%.
Out of 27 companies under our coverage, 10 delivered higher-than-estimated performance for the quarter. About
four companies delivered lower-than-estimated earnings, while the remaining 13 companies delivered
performance that was largely in line with expectations. Specifically, LPC/LAURUS/IPCA/RUBICON were strong
outperformers for the quarter, whereas PIRPHARM/LAXMIDEN were underperformers. BIOS delivered a surprise
outperformance at the PAT level, driven by lower-than-expected minority interest.
November 2025
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Super-specialty hospitals
(Aphs/Maxh/Medanta), on an aggregate basis, delivered 11.6% YoY revenue growth to
INR60b, the lowest in the past eight quarters. Likewise, EBITDA recorded a 12.6% YoY growth to INR17.2b, the
lowest in the past eight quarters. The high base of the past year, driven by increased infection cases in 2QFY25,
impacted revenue/EBITDA YoY growth for 2QFY26.
US sales
grew for 11 quarters straight till FY25. YoY growth dipped in 1QFY26. Subsequently, in 2QFY26, US sales
grew modestly at 1.6% YoY (cc terms) to USD2.4b. Incremental revenue from specific launches drove YoY
growth. Accordingly, broad-based, diversified portfolio-level growth in US generics has yet to materialize on an
aggregate basis.
Among our coverage universe, US sales of DRRD/SUN/CIPLA/ARBP declined 18%/4.1%/1.7%/1%. Lower G-
Revlimid contribution and increased competition during the quarter have dented the trajectory of
ARBP/DRRD/CIPLA. Notably, LPC/ALKEM/TRP/ALPM showed healthy YoY revenue growth. LPC grew 41.3% YoY,
supported by 180 days of FTF exclusivity for Tolvaptan. Incremental revenue from g-Entresto drove 26.3%/14.2%
YoY growth for ALKEM/ALPM. Rubicon delivered 33% YoY growth to USD47 in 2QFY26, driven by a steady ramp-
up in existing products, and partly by new launches.
GNP’s DF revenue dipped 87.1% YoY and 86.7% QoQ to INR1.6b in 2QFY26 (vs INR12.8b/INR12.4b in
2QFY25/1QFY26), mainly due to one-time distributor inventory reductions, order postponements, and higher
freight and reverse-logistics costs. Ex-GNP, the
DF business
grew 9.3% YoY, driven largely by chronic therapies,
with some support from acute. Additionally, IPM growth in Sep’25 was 7.2%.
Among therapies, Cardiac, Respiratory, Neuro, Antineoplast, and Urology delivered
12.5%/12.2%/10.2%/13.3%/10.2% YoY growth, outperforming IPM (8.6% YoY growth). However, Anti-infectives,
Derma, Gynaec, and Gastro underperformed IPM by 280bp/260bp/ 340bp/170bp. Among our coverage
companies, DRRD/ALKEM/AJP delivered 12.9%/12.4%/11.9% YoY growth. MANKIND grew 6.7% on an organic
basis, and the consolidation of the BSV portfolio led to higher YoY growth on a reported basis.
DRRD’s growth was supported by the launch of 11 new brands during the quarter and strong outperformance vs
IPM in Respiratory (1.5x) and Pain (1.4x). ALKEM delivered broad-based strength, with strong traction across key
therapies—gastrointestinal/derma (3.1x IPM), VMN (2.5x), Pain (2.3x), Respiratory (1.5x), and AI (1.2x). AJP’s
performance was driven by double-digit growth in core therapies, including derma and ophthalmic.
Among our coverage companies that have reported earnings so far, four recorded earnings upgrades, while five
registered earnings downgrades. Upgrades in FY26/FY27/FY28 earnings were observed for LUPIN (14%/4%/2%),
LAURUS (11%/10%/6%), AGARWALE (6%/2%/0%), and ZYDUSLIF (-1%/6%/3%). Meanwhile, PIRPHARM (down
131%/42%/32%), LAXMIDEN (down 6%/9%/11%), and ERIS (down 5%/7%/2%) witnessed the maximum
downgrades.
Top picks:
BIOS, MAXH, LAURUS, RUBICON
Surprises:
LPC, LAURUS, IPCA
Misses:
PIRPHARM, LAXMIDEN
Guidance highlights
AJP
plans to file 10-12 ANDAs in FY26 and deliver low-teen growth in Asia-branded generics, with a sustained
momentum in US generics (high-teen growth in FY27). The company guides for a 78% (±1%) gross margin and
27% (±1%) EBITDA margin for FY26.
ALPM
is targeting an 18-20% EBITDA margin over the next two years. It expects 15-20% YoY growth in the non-
US segment and ~10% YoY growth in APIs in FY26. The DF business saw a GST-related disruption, but this is
expected to recover partially in the coming quarter.
ALKEM
aims to consistently outperform the DF market by 100-150bp, anticipating low double-digit to high-teen
YoY growth in the US and non-US segments in FY26. Moreover, it has raised its EBITDA margin guidance to 19.5-
20% for FY26.
APHS
saw muted IP/OP growth due to a strong seasonal base and weaker Bangladesh inflows. However, a 14%
YoY growth in CONGO specialties helped offset this. Healthco cash break-even (ex-ESOP) was delayed by a
54
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 Motilal Oswal Financial Services
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quarter, and new hospitals in Delhi and Pune began commissioning with additional units in Bengaluru (4QFY26)
and Hyderabad/Gurugram (1QFY27), carrying an annualized opex of INR1.5b.
ARBP
guided for a 20-21% EBITDA margin in FY26. The company reported QoQ growth of 7% in sales, 10% in
gross profit, and 14% in EBITDA (ex-g-Revlimid) in 2QFY26. The USFDA has accepted the company’s request for a
re-inspection of the Eugia III plant, which is expected within eight months.
BIOS
expects generics profitability to improve with upcoming launches, including Liraglutide in the EU and g-
Entresto, Micafungin, and Everolimus in the US, while awaiting US approval for Liraglutide and preparing for the
US launch of Insulin Aspart.
CIPLA
has trimmed its EBITDA margin guidance to 22.75–24.0% (from 23.5–24.5%) due to higher R&D spend,
with g-Revlimid sales softening QoQ and expected to decline further. Following its Terzepatide partnership with
Eli Lilly, the company will assess the Semaglutide opportunity once Indian regulatory approvals are in place.
DIVI
has inaugurated its Peptide Center of Excellence and is working with several large pharma clients across
clinical stages while continuing to invest in peptide labs and manufacturing. Capex stood at INR15.5b in 1HFY26,
with over INR20b planned for FY26.
DAHL
maintains its FY26 capex at INR3b (+INR700m for the flagship) and plans to open ~30 new centers in 2H,
mainly in Tier 2-3 markets. Management expects a stronger 2H, supported by seasonality and sustained growth
momentum.
DRRD
expects feedback on its Semaglutide filing from Canadian regulators within weeks and sees competition
tied to approval timelines. It remains confident of selling 12m pens globally (Canada, Brazil, India, and other
EMs). Moreover, it expects overall opex at 28-30% of sales through FY27 and guides EBITDA margin to ease from
26.7% to ~25% over the next two years as Revlimid normalizes and efficiencies improve.
ERIS
has shifted the start-up of cartridge production from 4QFY26 to 1QFY27 and moved its debt reduction
target to INR18b from 4QFY26 to 3QFY27. The company also highlighted three growth drivers over the next 3-4
quarters: its diabetes franchise, biotech manufacturing integration, and international business ramp-up.
GLAND
expects mid-teen (±2%) revenue growth in FY26 (vs. 6.6% YoY in 1H), with 2H driven by key launches,
stronger volumes, and improved Cenexi performance. Capex is pegged at INR2.5b/INR3b for FY26/FY27, and
despite Cenexi’s lower 67% GM, the company remains confident of achieving a 74-75% GM in FY26.
GLXO
expects operations to normalize from 2HFY26 after full remediation of the fire incident, with margins
recovering from monsoon-driven product-mix pressure and sustaining through the full year. It plans to
accelerate India launches in line with global timelines, with several new oncology and specialty assets expected
in FY27.
MEDANTA
launched its Noida hospital in Sep’25 and has onboarded 150+ doctors, with 2QFY26 revenue/opex of
INR39m/INR197m and insurance empanelment nearing completion. In Mumbai, additional FSI approval has
expanded the planned capacity from 500 to 750 beds, with the project cost revised to INR15.3b.
GRAN
is building its CDMO platform by integrating Senn Chemicals’ peptide R&D with scalable manufacturing in
India. It expects the peptide business to turn profitable from 4QFY26. Consultancy costs of USD4m in 1HFY26
should decline sharply in 2H and become minimal by FY27.
IPCA
expects FY26 revenue growth of 10–11% in DF, 14–15% in APIs, and 9–10% in branded exports, with 8–9%
YoY growth guided for generics export formulations in 2H. It is progressing well on the Unichem integration,
including shifting outsourced APIs to IPCA sites (12–15 months for full regulatory transition) and filing 12
Unichem products through the IPCA channel, which should see commercial traction in 1–1.5 years.
LAXMIDEN
guides for 22–25% revenue growth and 13–15% PAT margin in FY26, with Kidz-e-Dental seeing a
steady QoQ pickup and CE approval expected in 4QFY26.
LAURUS
guided ARV revenue of INR25b (±INR2b) for FY26, with 23% of the INR36b FY22–26 capex allocated to
API/CDMO projects and the balance to drug-product capacity. Multiple validation-phase projects in animal
health are scaling gradually in FY26 ahead of a stronger FY27 ramp-up.
LPC
has raised its FY26 EBITDA margin guidance to 25-26% (from 24-25%), though 2H margins are expected to
reduce due to higher R&D spend and reduced PLI income. It anticipates a USD1b US sales run rate in FY27, with
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 Motilal Oswal Financial Services
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EBITDA sustaining at 24-25%, and expects R&D spend of 7.5–8.5% of sales, ~70% of which is focused on complex
products.
MANKIND
expects a 2HFY26 recovery in Rx and OTC segments and guides for the lower end of the 25–26%
EBITDA margin, while maintaining 18–20% YoY growth guidance for BSV sales in FY26.
PIRPHARM
expects flat YoY revenue in FY26, with EBITDA margin moderating to low teens (including other
income) vs prior mid-teen guidance, while 2H is expected to outperform 1H. Its FY30 targets of USD2b revenue
and 25% EBITDA margin remain intact.
SUNP
plans to launch Unloxcyt and file Illumya for psoriatic arthritis in 2HFY26, while g-Revlimid sales were
lower YoY and stable QoQ with potential further declines. R&D spend is expected at the lower end of the 6–8%
guidance for FY26.
TRP
reported a 13% YoY growth in the chronic segment vs 11% for the industry, led by strong performance in
cardiac and gastro therapies. Its DF segment saw minimal GST-related impact, and the company has filed
Semaglutide in Brazil, where regulatory prioritization could support a timely approval.
ZYDUSLIF
maintains its FY26 EBITDA margin guidance of 26% and plans for 25+ product launches in the US,
including Beizray, to strengthen its 505(b)(2) portfolio. The injectables business is expected to scale over the
next two years, with facility challenges anticipated to be resolved. Additionally, G-Copaxone will be launched
soon.
RUBICON
plans annual R&D spend of 10–11% of sales over the next 4–5 years and expects EBITDA margin to
remain steady, factoring in additional opex from the Alkem plant, with the Pithampur facility operational from
mid-CY26.
Exhibit 95: DF sales up 4.1% YoY
Agg DF sales (INRb)
12.6
11.2
DF sales growth YoY (%)
16.1
11.6 10.4
4.1
Exhibit 94: US sales grew 1.6% YoY (CC terms)
Agg US sales (USDb)
13.2
14.1
10.5
11.1
YoY growth (%)
10.1
2.7
6.0
-1.9
1.6
2.4
10.3
9.0
9.4
2.2
2.3
2.3
2.5
2.4
2.3
2.4
2.4
216
203
197
225
240
236
220
249
250
Ex-APHS/MAXHEALT/MEDANTA
Source: MOFSL, Company
Ex-APHS/MAXHEALT/MEDANTA
Source: MOFSL, Company
Exhibit 96: 36 Final ANDAs approved on an aggregate basis for our coverage universe in 2Q
Final Approval
7
5
4
3
2
1
2
1
0
1
1
0
0
3
3
2
1
Source: MOFSL, Company
November 2025
56
 Motilal Oswal Financial Services
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Exhibit 97: Aggregate EBITDA up 20.2% YoY to INR186b for the pharma universe
Aggregate EBITDA (INRb)
31.3
250
200
Aggregate EBITDA Growth (%)
26.9
12.3
35.0
22.7
150
4.4
136
7.9
11.3
15.9
17.0
20.2
30.0
17.2
8.0
5.0
25.0
20.0
15.0
10.0
100
5.0
-
50
(5 .0)
138
129
149
157
155
164
183
184
186
193
198
193
(1 0.0)
0
(1 5.0)
Note: Ex-APHS/MAXHEALT/MEDANTA/DAHL/MANKIND/LAXMIDEN; Source: MOFSL, Company
Exhibit 98: Aggregate PAT up 3.3% YoY for pharma companies under coverage
Aggregate PAT (INRb)
140
Aggregate PAT Growth (%)
43.1
50.0
120
24.9
14.7
(9.2)
86
(0.9)
81
(0.1)
73
87
99
94
105
16.0
28.5
14.0
40.0
23.5
100
18.8
30.0
80
12.2
3.3
20.0
60
10.0
40
-
20
112
113
116
124
126
117
(1 0.0)
0
(2 0.0)
Note: Ex-APHS/MAXHEALT/MEDANTA/DAHL/MANKIND/LAXMIDEN; Source: MOFSL, Company
Exhibit 99: USFDA inspection history of our coverage companies for the quarter
Company
Aurobindo Pharma
Biocon
Dr Reddy's Lab
Granules
Lupin
Zydus
Inspection Date
Aug-25
Aug-25
Sep-25
Aug-25
Jul-25
Jul-25
Sep-25
Sep-25
Inspection Facility
Bachupally, Telangana
Bengaluru
Bachupally, Hyderabad
Hyderabad
Pithampur Unit -3
Pithampur Unit -2
Biotech facility, Pune
Jarod, Gujarat
Outcome
Form 483
Form 483
Form 483
Form 483
Form 483
Form 483
Form 483
Form 483
Observations
8
5
5
1
5
4
4
4
Source: MOFSL, Company
November 2025
57
 Motilal Oswal Financial Services
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Exhibit 100: Performance of top therapies in Sep’25 - (INR b)
MAT Market
YoY growth (%) in the last eight quarters
Growth
Therapy
Sep’25 share
(%)
(INR b)
(%)
Dec'23 Mar'24 Jun'24 Sep'24 Dec'24 Mar'25 Jun'25 Sep'25
IPM
2,428 100.0
7.8
8.1
5.7
9.0
8.3
7.7
7.5
8.8
7.2
Cardiac
319
13.1
11.7
8.2
10.8
12.5
12.2
12.3
11.5
12.6
11.5
Anti-Infectives
260
10.7
4.3
7.8
-3.2
5.9
8.2
2.5
6.3
6.6
4.4
Gastro Intestinal
256
10.6
6.3
9.3
5.4
11.2
9.7
7.6
8.9
6.9
1.7
Anti Diabetic
216
8.9
8.5
5.7
7.2
7.6
9.1
9.0
8.4
8.6
9.3
Respiratory
195
8.0
8.2
5.5
-2.8
1.7
2.8
4.5
6.4
12.3
14.0
Pain / Analgesics
191
7.9
6.6
8.4
6.0
8.4
7.7
7.8
9.3
7.0
5.0
Vitamins/Minerals/Nutrients
190
7.8
7.4
9.0
6.7
9.1
8.2
8.0
9.7
8.0
6.2
Derma
167
6.9
6.7
3.8
8.3
9.9
9.8
11.2
11.4
6.0
2.6
Neuro / CNS
147
6.1
8.6
8.8
7.9
8.5
9.4
8.1
8.7
10.2
7.2
Gynaec.
117
4.8
4.7
6.5
5.5
6.9
3.1
3.6
4.2
5.6
5.8
Antineoplast/Immunomodulator 68
2.8
15.5
24.4
21.7
21.3
12.2
12.5
11.4
14.0
23.7
Ophthal / Otologicals
47
1.9
8.1
0.9
3.5
5.5
-4.0
10.5
11.5
8.6
5.5
Urology
55
2.3
11.8
12.4
14.0
13.7
13.2
14.3
13.9
10.7
9.1
Hormones
37
1.5
7.4
6.0
2.9
7.2
5.2
4.7
6.0
9.1
9.8
One
month
Sep'25
6.1
10.6
3.1
0.3
8.8
15.0
2.9
4.6
0.4
6.0
4.5
24.6
2.9
6.3
8.0
Source: IQVIA, MOFSL
Infrastructure: NHAI awarding remains muted in FY26YTD; a delay in appointed dates and heavy
monsoons hurt execution
Execution weak due to sluggish awarding:
The pace of project awarding by NHAI has remained muted in the
initial months of FY26, with only ~504km awarded from Apr’25 to date against the annual target of 6,376km.
The subdued awarding, coupled with delays in appointed dates and heavy monsoons, weighed on execution for
road EPC players. Companies within our coverage universe (ex-IRB) reported a 13% YoY revenue dip in 2QFY26,
with KNR falling 42% YoY and GRIL rising 9% YoY (on a low base). With awarding momentum yet to pick up, both
KNR and GRIL are actively pursuing diversification into non-road infrastructure segments such as power
transmission, water projects, and solar EPC to broaden their order books. IRB’s revenue grew by 10% YoY.
Margins under pressure; a strong tender pipeline offers recovery potential:
Coverage universe companies (ex-
IRB) experienced a 240bp YoY contraction in gross margin and a 280bp YoY dip in EBITDA margin for 2QFY26,
due to elevated costs. Despite the weak awarding pace so far, the tender pipeline remains robust, with
substantial inflows expected in the coming quarters. Execution momentum is projected to improve from
2HFY26, aided by the resumption of projects post-monsoons. GRIL has set an FY26 order inflow target of
INR200-250b, while KNR is aiming for INR80-100b.
Elevated input costs keep margins under check:
Coverage universe companies witnessed a YoY decline in gross
and EBITDA margins during the quarter, reflecting elevated raw material costs and muted revenues. Though
commodity prices have eased from their peaks, cement prices remain ~8% higher than Oct’23 levels, and other
construction inputs continue to trade above pre-COVID averages.
Focus on asset monetization:
For FY26, NHAI has set an asset monetization target of INR300b (vs INR287b
achieved in FY25). The monetization drive will be executed through the Toll-Operate-Transfer (ToT) model and
Infrastructure Investment Trusts (InvITs). A pool of 24 assets covering 1,472km has been earmarked for
monetization, with proceeds to be deployed for highway development, debt repayment, and generating returns
for investors. FASTag toll collections rose ~12% YoY in volume and ~18% YoY in value during Jul’25–Oct’25,
reinforcing monetization prospects.
Our view:
Awarding activities by NHAI and execution have been muted and are expected to improve only in
2HFY26. Companies with decent order backlogs, a solid financial position, and involvement in multiple segments
are well positioned to benefit in the near to medium term.
November 2025
58
 Motilal Oswal Financial Services
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Exhibit 101: Revenue dipped ~13% YoY for our coverage
universe
Infra aggregate sales (INR b)
33.3
25.2
27.1
27.2
19.8
22.1
27.9
23.1
17.3
27.6
26.3
25.9
26.2
Exhibit 102: Gross margin contracted on a YoY basis
Infra aggregate gross margin (%)
28.0
26.5
26.6
25.6
24.7
Exhibit 103: EBITDA margin dipped on a YoY basis
Infra aggregate EBITDA margin (%)
14.3
15.1
13.8
14.1
12.9
14.0
15.0
12.7
Exhibit 104: APAT margin contracted on a YoY basis
Infra aggregate APAT margin (%)
13.3
11.7
10.7 10.4
10.1
8.9
12.9
11.2
9.2
8.7
Note: Data in charts above is for our coverage universe excluding IRB
Logistics: Steady revenue growth in 2QFY26; volume growth supported by a strong festive season while
private port operators maintain their outperformance
Logistics sector posts steady growth; volume growth aided by a strong festive season:
Logistics companies
(excl. APSEZ and JSWINFRA) posted ~8% YoY revenue growth in 2Q FY26, reflecting steady improvement in
demand over last year, supported by a strong festive season. Revenue growth was driven by strong volumes and
selective yield improvements. The volume growth could have been better, but it was hit in Sep’25 due to the
GST rate cut announcement, which delayed purchases. APSEZ and JSWINFRA reported 12% and 3% YoY growth
in cargo volumes, respectively, with a slowdown seen in coal and iron ore handling volume in a few terminals,
affecting volume growth. In 2QFY26, APSEZ managed ~29% of the country’s total cargo and ~46% of container
cargo. With volume ramp-up at recently acquired ports/terminals, volumes are expected to be strong ahead for
APSEZ and JSWINFRA.
EBITDA margin flat YoY, but it expanded 50bp QoQ:
Gross margin for our coverage universe, barring APSEZ and
JSWINFRA, stood at 30.4% in 2QFY26 (up 140bp YoY and 90bp QoQ). EBITDA margin was flat YoY but expanded
50bp QoQ, driven by improved volume growth and higher gross margins, supported by better pricing discipline,
targeted cost-control measures, and operational efficiencies in organized networks. APSEZ’s margins stood at
60.5% (down 130bp YoY and up 30bp QoQ), and JSWINFRA’s margins were 48.2% (down 380bp YoY/70bp QoQ).
Organized players with a pan-India network and technological advantage to gain higher market share:
The
introduction of GST 2.0, e-way bills, and reduced e-invoicing turnover limits have driven businesses to partner
with organized logistics providers. Express companies are expanding their infrastructure and digitalizing
operations. This positions them to capture higher volumes. The government's port privatization efforts offer
opportunities, with APSEZ and JSWINFRA well-placed to benefit due to their strong balance sheets.
Top picks:
Delhivery and JSWINFRA are our preferred picks in this space.
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Guidance
APSEZ:
In FY26, APSEZ expects cargo volumes of 505-515mmt, revenue of INR360-380b, EBITDA of INR210-220b,
and a net debt-to-EBITDA ratio not exceeding 2.5x. It plans a capex of INR120b, primarily for ports (INR60b),
logistics, and renewables.
JSWINFRA:
Management is aiming to achieve ~8-10% volume growth for FY26, expecting a stronger second half
despite a slower 1HFY26. In FY26, the logistics business is expected to contribute INR7–8b in revenue and
~INR1b in EBITDA. JSWINFRA plans to invest INR55b in capex (vs. INR24.4b in FY25), including INR40b for ports
and INR15b for logistics.
Delhivery:
The company’s
revenue growth will be led by Express Parcel and PTL, with SCS and new services
contributing in later quarters. The Ecom Express integration cost stood at INR900m this quarter and is expected
to be ~INR3b on an overall basis. Peak period profitability is anticipated in 3Q and 4QFY26.
VRLL:
It expects a volume recovery led by higher tonnage and new client additions, with ~4% QoQ growth in
3QFY26 aided by festive spillover and GST cuts. Revenue is guided to grow ~4–5% in FY26. EBITDA margin is
expected to normalize to ~19% despite higher admin and salary costs, supported by steady tonnage growth.
TRPC:
TRPC reiterated its FY26 revenue and profit growth guidance of 10–12%. Management expects the post-
GST consumption uplift to partly extend into 2HFY26, with some moderation in Nov–Dec. The company invested
INR 1.7b in H1FY26, majorly through internal accruals, and maintained its FY26 capex guidance at INR 4.5b, with
execution expected to accelerate in the second half.
BDE:
Management did not specify a growth target but expects to gain share, led by e-commerce and SME-driven
B2C. Margin expansion is expected through better yields, cost controls, product mix, and network efficiencies.
B2C ground express may see demand-linked volatility with road infrastructure supporting stronger pricing.
Growth will be driven by the ground express (B2C) segment.
CCRI:
For FY26, CCRI maintained its guidance of 13% growth in total volume, with 10%/20% growth in
EXIM/domestic volumes. The commissioning of the Western DFC to JNPT by Mar’26 is expected to boost rail
volumes by shifting light cargo from road. Four terminals are expected for commissioning in FY26.
MLL:
The company plans to enhance profitability by tightening costs, exiting loss-making contracts, and reducing
warehousing white space by 95% by Sep’26. It has not specified a timeline to achieve EBITDA. Its focus remains
on long-term value creation through cost optimization and improved segment-level performance.
TCIE:
Management guided tonnage growth at ~8% for FY26, with revenue expected to rise ~10% on the back of
price hikes, network expansion, and higher multimodal contribution (expected to reach ~20-22% over 2-3 years).
EBITDA margin is expected to improve through cost optimization, with a near-term target of 12%+. Total capex
planned for FY23–27 stands at INR 5b, of which INR 2.3b has been incurred.
Exhibit 106: Margin improved on a YoY basis
MOSL universe Logistics Gross margin (%)
30.4
7.9
6.4
4.5
6.4
8.1
29.5
29.1
29.0
28.5
29.0
28.6
29.6
29.5
Exhibit 105: Sales rose ~8% YoY for our Coverage Universe
Logistics aggregate YoY sales growth (%)
9.4
9.5
9.5
9.4
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Exhibit 107: EBITDA margin has been stable on a YoY basis
MOSL universe Logistics EBITDA margin (%)
11.3
10.7
10.6
10.2
11.4
11.0
11.1
10.9
11.4
Note: Data in charts above is for our coverage universe excluding APSEZ & JSWINFRA
Source: Company, MOFSL
METALS: Decent volume growth with muted NSR for ferrous; high LME prices propel non-ferrous
earnings
Overall metal earnings remained decent during 2Q. Ferrous companies' revenue rose 12% YoY despite softer realizations
(better-than-expected NSR led the earnings beat), while EBITDA jumped 41% YoY on healthy volume and lower costs. This led
to a 2.2x YoY surge in APAT in 2Q for ferrous companies. Non-ferrous companies posted earnings growth led by favorable
metal prices and steady volumes. Revenue and EBITDA rose 10% and 14% YoY, respectively, with major beats from NACL and
VEDL. APAT grew 16% YoY due to strong operating performance. Mining companies experienced a muted sequential
performance due to heavy monsoons. NMDC’s reported in-line earnings were supported by healthy NSR, while COAL
reported weak volumes and realizations, leading to a significant miss on EBITDA and PAT.
Ferrous companies: Strong volumes as anticipated; earnings beat driven by better-than-anticipated NSR
Aggregate revenue for ferrous companies under coverage increased by 11% YoY and 6% QoQ (+5% above our
est.) in 2Q, aided by healthy volume growth of 12% YoY and 9% QoQ in 2QFY26. Average realization for ferrous
companies fell by 1% YoY and 3% QoQ (~4% above our estimate). The volume growth was driven by the demand
recovery with receding monsoon and capacity ramp-up post maintenance shutdowns in 1Q, whereas the
average steel prices saw ~8% QoQ correction (HRC -4% and Rebar -13%) during 2QFY26. JSTL/SAIL volume grew
by 20% YoY (~8-10% QoQ), while JINDALST volume grew merely 1% YoY with a 2% QoQ decline during 2Q.
Aggregate EBITDA for our coverage companies increased 41% YoY and was flat QoQ (+13% above our estimate,
driven by better-than-expected NSR and volumes). Strong EBITDA/t beat was reported by JINDALST/SAIL, which
came in at INR11,129/5,149 per ton. EBITDA/t for TATA/JSTL stood at INR11,247/9,693 per ton, which came
slightly better than our estimate. TATA’s consolidated margin was supported by strong domestic earnings and
the EU being profitable. EU reported a USD8m profit for 2QFY26, which was flat QoQ.
Aggregate APAT for ferrous companies increased by 2.2x YoY and was flat YoY (+27% above our est.) in 2QFY26,
led by strong operating performance supported by better volume.
Non-ferrous companies: Favorable prices with a decent volume-led earnings growth
Aggregate revenue for non-ferrous companies was up by 10% YoY and 5% QoQ (+6% above our estimate),
supported primarily by favorable metal prices and decent volume growth. A big revenue surprise was reported
by NACL/VEDL, which came 10/16% above our estimate, while others (HZ/HNDL) stood broadly in line.
HNDL’s domestic aluminum volume grew by 4% YoY and 5% QoQ, while copper volume growth remained muted
at 3% YoY and 9% QoQ. Novelis (HNDL’s subsidiary) reported flat volumes due to subdued global demand, trade
tensions, and a fire incident at Oswego (NY) capacity. HNDL consolidated revenue came in line and was up 13%
YoY and 3% QoQ, while EBITDA grew by +14% YoY and +13% QoQ (+20% above our estimate).
EBITDA for non-ferrous companies rose 14% YoY and 15% QoQ, driven by healthy NSR with decent revenues and
muted costs. A surprise was observed in NACL/VEDL, where EBITDA jumped 24%/16% YoY (29%/15% QoQ) and
came 20%/67% above our estimate.
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Non-ferrous companies’ aggregate APAT increased by 16% YoY and 17% QoQ (+36% above our estimate), driven
by healthy operating performance in 2Q.
Mining Companies: Weak mining activity leads to muted earnings QoQ
NMDC’s earnings were broadly in line, where revenue grew 30% YoY, led by healthy NSR (+20% YoY) and volume
growth (+10% YoY). On a QoQ basis, revenue declined 13%, and EBITDA dipped 20%.
COAL reported weak earnings in 2Q, while revenue came in line. However, its EBITDA/PAT missed estimates by
30% each. Sales (dispatches) declined 1% YoY and 13% QoQ to 191mt. Revenue declined 2% YoY and 16% QoQ
in 2Q. EBITDA/PAT dipped 18%/31% YoY and 48%/50% QoQ in 2Q.
Top picks:
TATA and JDSL
Surprises:
NACL, VEDL, and COAL
Guidance highlights:
TATA:
For 3QFY26, TATA guided the India business NSR to decline by INR1,500/t QoQ, while NSR is expected to
decline by EUR30/t for the Netherlands in 3Q and expects a stronger recovery from 4QFY26 onwards with the
effect of recent protectionist measures. Consumption costs for coking coal are expected to increase USD6/t QoQ
in 3Q due to a rise in coking coal prices, while in the Netherlands, it could fall by EUR5-10/t in 3QFY26 owing to a
lower-cost inventory.
JSTL:
The company expects EBITDA/t to improve in 2HFY26, supported by better NSR and subdued input costs.
Management foresees a rise in coking cost by USD3-5/t in 3QFY26. Domestic steel prices currently trade at a
discount to import parity, but normalization is expected as demand strengthens and imports moderate. JSTL has
limited exposure to Europe (<3% of volumes); hence, the implementation of CBAM will have a limited impact.
JINDALST:
The company expects a significant ramp-up in production volumes in 2HFY26 and reiterated its FY26
crude steel production guidance of 9-10mt. Management expects a price recovery post the festive season,
driven by improving construction and infrastructure demand. Coking coal costs are expected to increase by
USD3-5/t in 3QFY26. Iron ore prices from NMDC have seen cuts recently, but OMC auction prices remain
elevated. Management reiterates its capex guidance of INR75-100b for FY26.
JDSL:
The company guided a volume growth of 9-10% YoY for FY26 and expects short-term export volumes to
remain subdued until uncertainties surrounding CBAM are resolved. In the long term, management indicated
that the company is largely compliant with CBAM requirements (rising RE share), which should facilitate easier
access to EU markets once the regime stabilizes. JDSL increased its RE share to 42% in 2QFY26 from 26% in
2QFY25 and targets to increase it further with the commissioning of a green hydrogen plant at its Jajpur facility
by mid-CY26.
HNDL:
The production cost in 3QFY26 is expected to remain broadly flat, with easing coal prices offset by a slight
rise in CPC and coke costs. At Novelis, the company expects an FCF impact of USD550-650m in FY26 (majorly in
3Q) due to the fire incident at Oswego (NY), including an adj. EBITDA loss of USD100-150m. To support Novelis’
equity requirements, HNDL will infuse USD750m as equity, funded through debt raised at AV Minerals, taking
advantage of its stronger borrowing capacity.
VEDL/HZ:
The company has maintained its full-year capex guidance at USD1.7-1.9b for FY26. The commissioning
of Lanjigarh Train-2 (1.5mtpa) has started and is likely to get fully ramped up soon. Alumina cost is expected to
decline USD50/t for the next two quarters, aided by lower third-party purchases and higher captive share via
Lanjigarh. The company revised the refined metal guidance to 1,075–1,000ktpa and silver output to 680t (±10t)
for FY26, adjusting for plant availability and input performance in 1HFY26.
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Exhibit 109: Coking coal (USD/t) prices moderated
significantly from their peak and are now range-bound near
USD200/t
800
760
600
Exhibit 108: Domestic spot steel spreads (USD/t) moved
below their LTA
Domestic HRC -RM Spreads (USD/t)
560
360
160
400
200
0
Source: MOFSL, BigMint
Exhibit 110: HRC (INR/t) prices softened to INR48,500/t
amid import pressure
89,000
73,000
57,000
41,000
25,000
Exhibit 111: Rebar (INR/t) prices corrected to 47,000/t due
to the monsoon-led muted construction activity
80,000
65,000
50,000
35,000
20,000
Source: MOFSL, BigMint
Source: MOFSL, BigMint
Exhibit 112: Aluminum prices remained at ~USD2,800/t
4,200
3,400
2,600
1,800
1,000
Exhibit 113: Zinc prices rebound to ~USD3,000/t
5,000
4,000
3,000
2,000
1,000
Source: MOFSL, Bloomberg
Source: MOFSL, Bloomberg
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Exhibit 114: Copper prices steady at USD10,800/t levels
12,500
2,700
10,500
8,500
6,500
4,500
2,400
2,100
1,800
1,500
Exhibit 115: Lead prices hover below USD2,000/t
Source: MOFSL, Bloomberg
Source: MOFSL, Bloomberg
Exhibit 116: EBITDA/t for steel companies under our coverage (consolidated)
EBITDA/t
JSW Steel
Tata Steel
SAIL
JSPL
JDSL
3QFY24
11,967
8,760
5,638
15,705
24,339
4QFY24
9,100
8,271
3,879
12,162
18,161
1QFY25
9,003
9,059
5,536
13,585
20,964
2QFY25
8,869
7,343
3,111
11,893
21,000
3QFY25
8,314
9,268
4,582
11,494
20,536
4QFY25
8,515
7,874
6,536
11,651
16,499
1QFY26
2QFY26
11,324
9,693
10,432
11,247
5,704
5,149
15,819
11,129
20,915
21,416
Source: MOFSL, Company
OIL & GAS: Robust performance by OMCs; soft quarter for CGDs
Overall performance:
Revenue came in line with our estimates. However, excluding OMCs, revenue was 3.2%
above our estimates. EBITDA was 8% above estimates (up 33% YoY). Excluding OMCs, EBITDA remained in line
(up 8% YoY). Adjusted PAT was 11% above estimates (up 38% YoY), primarily as OMCs reported strong
profitability. Excluding OMCs, adjusted PAT was 6% below estimates (-4% YoY).
RIL:
RIL's
2QFY26 consolidated EBITDA increased 5% QoQ (+17% YoY) to INR459b. O2C EBITDA grew 17% YoY to
INR98.6b, reflecting a sharp rebound in transportation fuel cracks (up 22-37%) and improved polymer margins.
The E&P segment’s revenue dipped 2.6% YoY, mainly due to the natural decline in production from the KGD6
block (-8.4% YoY). Additionally, lower realizations for CBM gas and condensate further weighed on revenues.
Upstream:
ONGC’s
2QFY26 revenue came in line with our est. at INR330b. Crude oil/gas sales were in line with
our est. at 4.8mmt/3.9bcm. VAP sales stood at 592tmt (est. 681.5tmt). Reported oil realization was USD67.3/bbl,
at USD3.2/bbl discount to Brent in 2Q. EBITDAX/PAT also stood in line with our est. at INR177b/INR98.5b.
OINL’s
2Q oil/gas sales at 0.83mmt/0.66bcm stood in line with estimates. Oil/gas production remained flat YoY at
848mmt/804bcm. Oil realization stood at USD68.2/bbl (in-line). However, EBITDA was 39% below our estimate
at INR13.3b, down 39% YoY, primarily due to higher-than-expected opex.
OMCs:
HPCL/BPCL/IOCL
reported EBITDA 29%/32%/51% above our estimates, while their reported PAT came in
29%/40%/146% ahead of expectations. OMCs reported a strong beat on refining and marketing margin
estimates. The MoP&NG has approved compensation of INR145b/76b/79b for IOCL/BPCL/HPCL toward LPG
under-recoveries. The amount will be released in 12 equal monthly instalments, with accruals recognized on a
monthly basis starting Nov’25.
CGDs:
MAHGL’s/IGL’s
EBITDA came in 4%/13% below our estimates, while
GUJGA’s
EBITDA came in line with
our estimates. Total volumes for MAHGL were 5% above our estimates at 4.6mmscmd; GUJGA’s volumes were
broadly in line with our estimates at 8.7mmscmd, whereas IGL’s volumes were 4% below our estimates at
9.3mmscmd.
Gas utilities:
GAIL’s
2QFY26 EBITDA came in 5% above our estimates at INR31.9b. EBIT for gas transmission
missed our estimates by 6%, while the marketing segment posted a strong performance. Volumes for natural gas
transmission came in line with our estimate at ~123.6mmscmd.
GUJS’s
EBITDA was 13% below our estimates,
driven by transmission volumes of 28.5mmscmd, which was 8% lower than expected, and higher-than-estimated
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opex. The implied tariff stood in line at INR839/mmscm. Volumes continue to remain soft amid weak demand
from the refining/petchem and power sectors.
PLNG’s
EBITDA was 4% below our estimate. PAT came in line with
our estimate, supported by higher-than-expected other income. Total volumes came in line with our estimate at
228tbtu. No spot volumes were recorded during the quarter.
Others:
CSTRL’s
EBITDA margin expanded 150bp YoY/35bp QoQ. Its 3Q volumes stood in line with our estimates
at 59m liters (up 7% YoY).
Aegislog’s
EBITDA came in 13% above our estimates. Normalized EBITDA of the gas
division came in 68% above our estimate, while that of the liquid division stood 15% below our estimates.
Ratings and earnings revisions:
There have been no changes in ratings across our coverage universe following the
2QFY26 earnings season. We have revised up our FY26/FY27 estimates for OMCs as we factor in monthly LPG under-
recovery compensation over Nov’25-Oct’26 under revenue. Additionally, we raise our MS/HSD marketing margin
assumptions for 2HFY26-FY28 slightly to INR3.5/lit (from INR3.3/lit earlier).
Top picks:
HPCL:
We continue to prefer HPCL among OMCs due to the following factors: 1) HPCL’s higher
leverage toward the marketing segment, 2) higher dividend yield as HPCL’s capex cycle is tapering off, and 3)
start-up of HPCL’s multiple mega-projects in the next 12 months, providing a push to earnings.
MAHGL
remains
our preferred pick among CGDs, given the robust 11% CAGR volume growth over FY25-28, a stable EBITDA/scm
margin outlook (~INR9/scm), and cheap valuations.
Surprise:
HPCL, BPCL, IOCL, Aegislog
Misses:
IGL, GSPL
Guidance highlights
Upstream:
ONGC:
Management has lowered its FY26 SA production guidance marginally to 19.8mmt/20bcm for
oil/gas. For FY27, guidance is maintained at 21mmt/21.5bcm of oil/gas. KG-98/2 gas productions are expected to
reach 10mmscmd by Jul’26. FY26 capex guidance is maintained at INR300-350b. NW gas is expected to ramp up
to 30-35% of total gas in the next three years.
OMCs:
HPCL:
HRRL’s refinery section is expected to be capable of running at 100% within three months. The full
impact of the Residue Upgradation Facility (RUF) in Visakhapatnam shall be visible from Feb’26.
IOCL’s
Panipat,
Gujarat, and Barauni refinery expansions are scheduled for commissioning by Jun’26, Jun’26, and Aug’26,
respectively, while the PX-PTA plant (INR140b) will be commissioned by 3QFY27. The poly-butadiene rubber
plant (INR30b) is expected to be commissioned by Jun’26.
CGDs:
MAHGL’s
management expects EBITDA margin to be around INR8-9/scm. For FY26, the company targets
adding 80 new CNG stations. ~INR350m of tax benefit should accrue in two years due to the amalgamation of
UEPL.
GUJGA:
FY26 capex is expected to be INR8b, while that of FY27 is expected to be INR8-10b. Margin
guidance is maintained at INR4.5-5.5/scm.
IGL’s
management maintained its EBITDA margin guidance of INR7-8
per scm in the long term. Management expects an exit rate of 10mmscmd in FY26 and maintains its long-term
volume growth target of 10% YoY, driven by strong CNG PV sales.
Others:
GAIL:
The final tariff order is expected by end-Nov’25.The heating system at the Dabhol terminal is likely
to be commissioned by FY27. Management has lowered its transmission guidance to 123-124mmscmd/132-
133mmscmd for FY26/27.
PLNG:
Dahej terminal’s 5mmtpa capacity shall be operational by end-Mar’26. Kochi
terminal - KMBPL is likely to be connected to NGG by the end of FY26. The FY26 capex guidance is maintained at
INR50b.
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Exhibit 117: Implied gross marketing margin (INR/lit)
Implied marketing margin (INR/lit)
IOCL
HPCL
BPCL
Exhibit 118: Reported refining margin (USD/bbl)
IOCL
36.0
27.0
18.0
9.0
USD/bbl
21.2
8.2
4.0
9.5
5.5
HPCL
BPCL
SG GRM
3.8
6.0
8.0
7.1
6.2
7.3
3.5
3.6
5.0
3.2
5.6
4.1
-
Exhibit 119: Sales volume of CGDs (mmscmd)
Volumes mmscmd
11.4 12.1
11.4
11.4
10.0
9.8
GUJGA
9.9
9.8
7.6
6.3
2.8
6.8
5.3
2.9
2.4
7.2
3.1
7.7
3.3
7.7
3.2
7.9
3.4
8.1
3.5
7.3
8.1
3.4
8.3
3.4
8.2
3.4
8.3
3.6
8.5
3.7
8.7
3.8
8.6
3.9
8.9
IGL
9.2
MAHGL
9.3
9.2
9.7
11.0
8.8 9.5
9.0
4.0
9.1
4.1
9.3
9.2
4.2
8.9
9.1
8.7
9.3
4.6
5.5
2.1
4.5
Exhibit 120: EBITDA/scm trend for CGDs (INR)
EBITDA/scm
13.9
10.5
8.0
7.6
6.7 7.2
3.4
7.8
4.0
2.3
9.1
8.6
6.8
7.9
7.1
9.2
8.2
5.7
8.6
8.7
6.2
7.0 4.6
5.8 4.8
6.7 5.4
6.4
4.4
GUJGA
IGL
16.8
MAHGL
14.6
8.6
11.6
12.4 12.1
8.0
8.1
8.7
5.8
12.8
13.3
7.2
11.5 11.9 11.1
6.6
7.4
8.3
6.5
4.3
12.4
10.0
6.0
5.4
6.2
6.4
8.0
5.2
5.6
8.0 7.9
7.9
5.1
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Plastic Pipes: Healthy recovery in operating performance with a robust 2H outlook
Steady revenue growth across industry:
The plastic pipes sector reported a steady quarter amid volatile PVC prices
and a weak demand scenario. Aggregate revenue (coverage companies) grew 7% YoY to INR45.7b. This growth was
due to improved pipe volumes across players (up 14% YoY), while blended realization is still lower by 4% YoY
(improved QoQ by 11%). ASTRA delivered the highest pipe volume growth of 21% YoY to 61K tonnes, followed by SI
(up 17%), while PRINCPIP’s volume declined marginally YoY (-1%). In terms of overall revenue, ASTRA delivers healthy
growth of 15% YoY, followed by SI (up 5%), while PRINCPIP dipped 4% YoY. For our coverage universe, we expect an
aggregate revenue growth of ~14% in FY26 (implying 17% YoY growth in 2HFY26) and a CAGR of 14% over FY25-FY28.
Mixed bag margin performance across companies:
The sector witnessed an expansion in EBITDA margins by 200bp
YoY/210bp QoQ, with aggregate EBITDA growing 25% YoY to INR7.6b. While for coverage companies, margins were
muted (down 10bp), with EBITDA growth of ~6% YoY. FNXP reported the highest margin expansion (13.8pp YoY) and
EBITDA growth (11.8x), primarily due to a lower base and improved operational performance. From our coverage,
PRINCPIP reported the highest margin expansion and EBITDA growth of 190bp/21% YoY, followed by ASTRA with
100bp/22% YoY, while SI reported a contraction/decline in margins by 160bp/7% YoY. Improvements in operational
performance in ASTRA/PRINCPIP were due to a better product mix (higher CPVC growth). Blended EBIT/kg of the
pipes segment declined 11% YoY to INR13.7. The sharpest decline was seen in SI, which dropped 28% YoY to
INR10.6, followed by ASTRA, which dipped 2% to INR25.7, while PRINCPIP saw growth of 26% YoY to INR5.3. As
highlighted earlier by the companies, 2Q marked some stabilization in operating performance and PVC prices and
has indicated a higher growth in 2HFY26.
Outlook remains positive with an improving demand scenario and stabilizing PVC prices:
A common indication
from all the companies is the expectation of a gradual demand revival, supported by renewed government thrust on
infrastructure spending and improving residential real estate activity. While 1HFY26 was challenging due to
macroeconomic headwinds, subdued demand, and raw material price volatility, a pickup is expected from 2HFY26.
PVC resin prices have stabilized and are at the bottom, which should improve channel sentiment and reduce
inventory losses, paving the way for better margins. Most companies reported healthy volumes in 1HFY26 with
further growth in 2HFY26. Hence, all our coverage companies have retained their FY26 guidance despite a steady
performance in 1HFY26.
The quarter experienced no downgrades/upgrades:
We have retained our estimates for FY27/FY28 for all our
coverage companies. We have only raised our FY26 earnings estimate for ASTRA by 6% while maintaining our
estimates for SI/PRINCPIP.
Surprises:
Astral and PRINCPIP
Miss:
SI
Guidance highlights:
ASTRA:
Management commentary remained positive for 2H, led by an improving demand outlook for pipes
(gaining market share), recovery in performance of the UK adhesive business, steady growth in the India
Adhesive business, and a healthy outlook for the Paints business. The company is witnessing a good 3QFY26 to
date for its piping and adhesives business (including paints) and remains confident of maintaining its earlier
guidance of double-digit revenue growth in FY26. ASTRA maintained double-digit growth guidance for the next
five years. Margins are expected to stay at 15-16% and may improve with new plant utilization and CPVC
integration by Sep’26.
SI:
Management has also maintained its overall volume growth for FY26 at 12-14% YoY, driven by a positive
demand outlook from the housing/plumbing and agriculture segments, expected stabilization of prices (with the
implementation of ADD), and the addition of Wavin capacity (~71,000MTPA). The company guided INR110-115b
revenue with an EBITDA margin of ~14.5-15% for FY26.
PRINCPIP:
Management anticipates a healthy recovery in demand in 2HFY26, driving high single-digit volume
growth for FY26 (Oct’25 was subdued due to festivals and ADD-related uncertainties, while Nov’25 is seeing a
healthy pickup). Consequently, margins are expected to recover sequentially to low double digits by 4QFY26
November 2025
67
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
(normalized levels), fueled by operating leverage and an improved product mix. The implementation of ADD by
mid-Nov’25 is expected to be a key trigger for the PVC industry and for PRINCPIP.
Exhibit 121: Key operating indicators
2Q
FY26
15,774
23,939
5,946
8,587
2,357
45,658
Revenue (INR m)
2Q
YoY
1Q
QoQ
FY25
(%)
FY25
(%)
13,704 15 13,612 16
22,730
5
26,092 -8
6,221
-4
5,804
2
8,280
4
10,432 -18
2,504
-6
2,750 -14
42,654
7
45,508
0
6
58,690
-4
2Q
FY26
25.7
10.6
5.3
10.3
0.6
13.7
12.1
EBIT/kg (INR)
2Q
YoY
1Q
FY25
(%)
FY25
26.1
-2
17.6
14.7
-28
10.6
4.2
26
2.0
-5.6 -285
7.3
4.4
-87
3.4
15.3
-11
10.7
9.5
27
9.3
QoQ
(%)
45
0
162
41
-83
28
30
2Q
FY26
1,348
1,647
146
1,236
16
3,142
4,394
Adj PAT (INR m)
2Q
YoY
1Q
FY25
(%)
FY25
1,100
23
811
2,066
-20
2,023
147
0
48
407
204
982
42
-61
81
3,313
-5
2,882
3,762
17
3,945
QoQ
(%)
66
-19
204
26
-80
9
11
ASTRA
SI
PRINCPIP
FNXP
APOLP
Aggregate
Aggregate (inc
Finolex and Apollo)
56,603 53,439
Source: MOFSL, Company
Exhibit 122:
Our revised EPS estimates (INR)
Rev
79
22
8
FY26E
Old
82
21
8
Chg (%)
-4
6
4
Rev
108
29
14
FY27E
Old
110
29
14
Chg (%)
-2
1
3
Rev
130
36
20
FY28E
Old
132
34
20
Chg (%)
-2
4
2
SI
ASTRA
PRINCPIP
Exhibit 1: Agg. volume trend (coverage companies)
Volume ('000 MT)
31%
24%
12%
18%
0%
1%
1%
4%
14%
Growth YoY (%)
Exhibit 2: Agg. EBIT/KG trend (INR/KG)
EBIT/KG
337%
Growth YoY (%)
6%
-36%
0%
-27% -36% -23% -37% -11%
197
217
277
238
196
221
280
249
224
21
18
21
17
15
12
16
11
14
Source: Company, MOFSL
Source: Company, MOFSL
REAL ESTATE: 2QFY26 presales up 42% YoY, driven by healthy launches and premium-luxury demand
Presales rise 42% YoY:
In 2QFY26, our coverage universe reported bookings of INR331b, up 42% YoY, aided by
strong launches even in a seasonally weak quarter, while the presales were 30% above our estimates. In 1HFY26,
presales stood at INR774b, up 41% YoY. In 2QFY26, the sector witnessed exceptional performance by most of
our coverage companies – LODHA, DLF, GPL, LOTUS, PEPL, SOBHA, MLDL, and SRIN – even when sales from
other listed players were considerably lower. These key players contributed ~82% of total reported bookings of
our coverage universe, while DLF, GPL, LODHA, and PEPL jointly contributed to ~71%, mainly driven by big
launches like Prestige Indirapuram phase 2, DLF Mumbai/Dahlias, etc., a good number of launches from Godrej
and Brigade, and sustained sales. The total booking area of listed players within our coverage universe was also
up by ~30% YoY at 23.7msf. In 1HFY26, the booking area was at 54msf, up 15% YoY. Overall demand for
premium and luxury remained strong, and sales were higher in the premium and luxury segments with higher
ticket sizes during the quarter.
In 2QFY26, DLF and LOTUS were the best performers in terms of YoY growth in presales, posting 526% and
126%, respectively. LOTUS also posted 321% QoQ growth. GPL performed the best in terms of value, i.e.,
INR85.1b out of total reported bookings of INR331b from our coverage universe.
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 Motilal Oswal Financial Services
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Realization also improved 10% YoY due to higher sales from the luxury and premium segments. In 1HFY26,
realization improved 13% YoY.
Double-digit growth aspiration intact for FY26:
Our coverage universe posted a 40% CAGR in cumulative
bookings over FY21-25, and the companies aspire for a 20-30% growth in FY26 as the delay/absence of key
launches in FY25 has spilled over into FY26. In 1HFY26, of the presales growth aspired to, over 50% was already
achieved. In 1HFY26, business development remained strong, led by LODHA, GPL, and PEPL, which added new
projects worth GDV of INR250b, INR163b, and INR331b, respectively. Consequently, companies have a
significant launch pipeline for 2HFY26, which can support their future growth aspirations.
Launches dominated by a few players:
Launches in 1HFY26 grew 34% YoY, mainly led by large launches by PEPL,
GPL, DLF, and LODHA. Overall, launches grew by 97%/123%/87%/39%/48% YoY for DLFU/LODHA/PEPL/BRGD/
MLDL in 1HFY26, while other listed players in our coverage universe reported a declining trend. SOBHA saw a
55% decline in launches. KPDL and Sunteck did not see any launches in 1H. However, the missed launches are
expected to be planned for 2HFY26.
Collections:
Total collections for 2QFY26 increased 18% YoY to INR225b, while there was a reduction in
collection efficiency (collections-to-sales) to 68% from 82% in 2QFY25. In 1HFY26, collections stood at INR435b,
up 17% YoY, with collection efficiency of 56% vs 68% YoY.
P&L performance – a mixed bag:
Aggregate revenue for our coverage universe grew 12% YoY to INR159b (8%
below our estimate). The individual performance was a mixed bag, as nearly 50% of our coverage stocks –
LODHA/LOTUS/OBER/BRGD/SOBHA/MLDL/SRIN – reported healthy revenue growth, while other coverage
companies were affected by lower project deliveries. In 1HFY26, revenue stood at INR307b, up 15% YoY.
Cumulative EBITDA stood at INR40b, up 8% YoY, with an EBITDA margin of 25% (2% below 4QFY24). In 1HFY26,
EBITDA stood at INR76b, up 5% YoY, with margin levels at 25% (2% below 1HFY25).
Our view:
The operational performance of our coverage universe exceeded our expectations due to impressive
launches and good contribution of presales coming from ongoing projects in a seasonally weak quarter. We
retain our FY26 pre-sales estimates (except for the downward revision of KPDL) for all the companies. However,
we will critically monitor launches and deliveries, as many companies have expressed concerns regarding
approval delays. We prefer PEPL and LODHA as our top picks.
Surprises:
GPL, PEPL, and LODHA
Miss:
KPDL
Management commentaries
LODHA:
It reported strong housing demand driven by preference for premium homes and expects weekly sales
to rise to INR4b by FY26-end. In 1HFY26, it launched projects worth INR133b (7.8msf) across MMR, Pune, and
Bangalore, with 3QFY26 presales guided at INR60b and overall FY26 sales from new launches seen at 30–35%.
Average quarterly presales are expected to reach INR50b with 5–6% annual price growth and embedded
margins of 32%. Bangalore is a key growth focus, with sales share targeted to rise to 15% over the next decade,
while Delhi NCR is set to begin pilot operations in FY27. Township projects like Palava and the annuity business
are expected to drive long-term value, with rentals targeted at INR15b by FY31 to support a debt-free balance
sheet.
OBER:
It had no new launches in 2QFY26, with only Elysian Tower D at Goregaon launched in 1HFY26. For FY26,
it plans launches in Borivali, Forestville (Thane), Peddar Road, and Gurugram, with potential additions from
Adarsh Nagar, Worli, and Tardeo, while further towers in Goregaon and Alibaug are set for FY27. Commerz I and
II are fully leased, and both Commerz III (87% occupied) and Sky City Mall (53% occupied) are expected to
stabilize at 80–90% occupancy by FY26-end. The Gurugram project is on track for launch this year, while
construction of the Ritz-Carlton Mumbai is 70–80% complete and set for FY26 launch. In Thane, steady demand
is expected to drive ~INR10b in annual sales with potential price gains as the project nears completion.
November 2025
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DLF:
The company reported steady housing demand in Gurgaon, driven by strong sales from its Mumbai and
Dahlias projects, with ASPs of INR125,000–150,000psf. Collections are expected to rebound in 2HFY26, with
FY27 guidance at INR130–140b. Key launches in FY26 include Goa, Arbour 2, and Panchkula, while Phase 2 of
Mumbai, Dahlias’ next phase, and DLF City are slated for FY27; presales guidance of INR200–220b is already 72%
achieved. The commercial segment remains resilient with low vacancies, and major assets such as Downtown
Gurugram, Chennai, and Atrium Place are set to commence rentals in FY26, alongside retail additions including
Highstreet Plaza, DLF 5 Mall, and Promenade Goa.
GPL:
It aims to strengthen leadership across key markets, supported by rising incomes, job stability, and housing
demand, favoring branded developers. In 2QFY26, it launched projects worth INR101b GDV, with ~65% of sales
from new launches, maintaining FY26 guidance of INR400b in launches and INR325b in presales. The
restructured Worli JV project will launch in 2H with ASPs of INR90,000–150,000psf, while multiple launches are
planned across NCR, Mumbai, Pune, Bengaluru, and emerging cities. Nine new projects with a GDV of INR163b
were added in 1HFY26, and revenue is expected to ramp up in 4QFY26 as key completions come through.
PEPL:
The company launched ~18.8msf of projects worth INR176b GDV in 1HFY26 across NCR, Bengaluru, and
Chennai, including key developments like Prestige Mulberry, Oakwood, and Pallavaram Gardens. Stock in hand
stood at 14.09msf valued at INR199b across major cities. The company achieved 67% of its FY26 presales
guidance of INR270b, with a remaining GDV pipeline of INR272b (26.7msf) for the year and INR500b under
planning. In 1HFY26, it added 12 new projects totaling 266 acres and INR331b GDV through a mix of owned and
JDA developments, while Hyderabad launches include Rock Cliff in FY26 and Imperial Park in FY27.
BRGD:
It reported strong demand and aims to sell 50% of new inventory soon after launch. It launched 4.37msf
in 1HFY26, with 40% of sales from new projects, and has an 11msf residential pipeline across Bengaluru,
Chennai, Hyderabad, and Mysuru, including key 2HFY26 launches worth INR80–83b GDV. In 1HFY26, it added
INR140b GDV (13msf) in new projects, while the commercial portfolio maintained 92% occupancy with INR16.9b
capex planned. The hospitality arm, Brigade Hotel Ventures, posted 20% YoY revenue growth and has nine
upcoming hotels totaling 1,700 keys.
MLIFE:
The company launched four projects in 1HFY26, achieving strong sales across Bengaluru, Pune, MMR,
and Chennai, with major upcoming launches in Hopefarm, Mahalaxmi, Citadel Phase 3, and Bhandup. It added
six new projects with a total GDV of INR95b, taking its overall development pipeline to INR463b, led by large
projects in Bhandup, Thane, and redevelopment assets. The company remains net cash positive, with healthy
cash flows and a strong balance sheet, positioning it to achieve its long-term presales target of INR95b over the
next five years.
SOBHA:
It launched three projects in 1HFY26 with a total TDA of 1.65msf, including its first in Greater Noida
(SOBHA Aurum), Marina One in Kochi, and the Lifestyle Boutique extension in North Bengaluru. It plans a 30%
growth in presales for FY26, supported by major upcoming launches across Bengaluru, NCR, and MMR, with
Hoskhote (5msf) slated for 1QFY27. With a strong 17msf launch pipeline, INR6.3b land spending in 1HFY26, and
targeted EBITDA margins of 33%, SOBHA expects robust growth driven by higher completions, new launches,
and steady cash flow expansion.
SIGNATUR:
The company achieved presales of INR47b in 1HFY26, selling 3msf at an average realization of
INR15,700/sqft, and remains confident of achieving INR125b in FY26. Focus continues on mid-income and
premium housing, with upcoming 2HFY26 launches of ~7.5msf (GDV INR130–140b) across Sectors 37D and 71 in
Gurugram. With 41.5msf of projects in the pipeline, INR4b operating surplus in 1HFY26, and INR8.75b raised via
NCDs, the company maintains a strong balance sheet and steady momentum in launches, collections, and
deliveries.
KPDL:
Weak 1H. Launches are slated to accelerate in 2HFY26, with ~6–7msf (GDV INR50–52b) planned across
Pune and Mumbai, including the Laxmi Ratan–Versova project and NIBM/Wadgaon phases. Unsold inventory
stands at 2.9msf (LR forming 1.6msf), and total GDV potential across markets is INR294b. Blackstone
management has been appointed to the company’s Board and senior management, strengthening governance
and strategic direction.
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 Motilal Oswal Financial Services
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SRIN:
Collections are expected to strengthen in the coming quarters of FY26 as key projects, including Sunteck
City – 4th Avenue, move into the revenue recognition phase post-OC. SRIN plans launches worth INR110b in 3Q–
4QFY26, covering major projects across ODC Goregaon, Vasai, Mira Road, Bandra, Naigaon, Andheri
redevelopment, and Nepean Sea Road. The marquee Burj Khalifa Community in Dubai (1msf, GDV INR90b) is
planned for launch in 4QFY26 or early FY27, with targeted sales over 3–4 years. Construction of 5th Avenue will
commence shortly, while demolition and approvals for Nepean Sea Road Phase 1 are nearing completion.
PHNX:
Its 1
st
tranche payment of INR12.6b to acquire the remaining 49% stake in ISMDPL is scheduled in Nov’25.
Expansion at PMC Bengaluru includes Phase 2 (0.57msf retail/office + 400-key Grand Hyatt by 2027) and Phase 3
(1.8msf retail/office + 300-key hotel). Core portfolio revenue rose 22% YoY to INR11.1b, with 14% consumption
growth led by electronics and fashion. Multiple malls across Thane, Coimbatore, Chandigarh, Surat, and Grand
Victoria remain on schedule, supported by steady annual capex of INR12–13b and ongoing revamps to lift
mature mall performance.
ARCP:
The company is in advanced stages of launching The Estate One (1.09msf) on Golf Course Extension Road,
Gurugram, while Phase IV of Anant Raj Estate (0.5msf) has commenced, and Project Navya Phase 2 deliveries are
scheduled from Dec’25. Work has also begun on Ashok Towers and Bella Monde—its first Delhi project
comprising commercial, hotel, and service apartment components—with a new luxury group housing project
planned for FY27. A QIP of INR11b strengthened the balance sheet, keeping the company net cash positive. In its
data center business, Panchkula (7MW) and Manesar (21MW) facilities are operational, with full 28MW
potential expected by 4QFY26 and expansion underway at Rai (Sonipat) to achieve 117MW capacity by FY28.
The segment continues to deliver robust 75% EBITDA margins, supported by a 75:25 capex allocation between
colocation and cloud.
LOTUS:
Luxury housing demand in MMR remains robust, with strong traction across Bandra, Versova, Juhu,
Andheri, and Prabhadevi, and projects are consistently delivered 12–18 months ahead of RERA timelines. The
company is net debt-free with INR8.5b in net cash and operates 17 of 18 projects under an asset-light
redevelopment model. It launched The Arcadian (Juhu) and Amalfi (Versova) in 2QFY26 (GDV INR10b) and plans
four more launches in 2HFY26 (GDV ~INR35–37b), with presales guidance of INR11–13b for FY26 and
expectations of a 3–5x growth in sales and revenue over the next three years.
Exhibit 123: Presales for our coverage universe rose 42%
YoY…
Pre-sales (INR b)
Growth YoY %
Exhibit 124: …while volumes increased 30% YoY
Sales volumes (msf)
Growth YoY %
November 2025
71
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 125: Collections improved 18% YoY
Collections (INRb)
Growth YoY %
31%
Exhibit 126: Bookings grew 19% YoY
Bookings (INRb)
FY24
31%
22%
-1%
20%
FY25
44%
54%
-19%
42%
32%
-6%
Exhibit 5: Summary of our revised estimates for our coverage universe
INR b
DLF
Godrej Properties
Lodha
Lotus
Oberoi Realty
Prestige Estates
Brigade
Sobha
Mahindra Lifespaces
Sunteck
Phoenix Mills
Anant Raj
Kolte Patil
Signature Global
FY26E
102
54
181
11
64
114
49
50
5
11
47
22
29
44
Old
FY27E
104
58
189
16
89
141
61
58
8
15
52
27
26
74
Revenue
New
FY27E
104
58
189
16
89
141
61
58
8
15
50
27
34
74
EBITDA
New
FY27E
31
9
54
8
50
34
23
8
0
2
30
9
7
18
Change (%)
FY27E
0
0
0
0
0
0
0
0
0
0
-4
0
29
0
FY28E
110
66
193
22
91
153
86
72
11
20
64
51
50
105
FY26E
102
54
181
11
64
114
49
50
5
11
47
22
17
44
FY28E
110
66
193
22
91
153
86
72
11
20
62
51
48
105
FY26E
0
0
0
0
0
0
0
0
0
0
1
0
-41
0
FY28E
0
0
0
0
0
0
0
0
0
0
-2
0
-2
0
INR b
DLF
Godrej Properties
Lodha
Lotus
Oberoi Realty
Prestige Estates
Brigade
Sobha
Mahindra Lifespaces
Sunteck
Phoenix Mills
Anant Raj
Kolte Patil
Signature Global
FY26E
31
7
52
4
41
31
18
6
-1
2
29
8
6
8
Old
FY27E
31
9
54
8
50
34
23
8
0
2
35
9
5
18
FY28E
32
10
55
10
54
36
30
11
0
3
44
21
11
26
FY26E
31
7
52
4
41
31
18
6
-1
2
27
8
3
8
FY28E
32
10
55
10
54
36
30
11
0
3
38
21
11
26
FY26E
0
0
0
0
0
0
0
0
0
0
-6
0
-48
0
Change (%)
FY27E
0
0
0
0
0
0
0
0
0
0
-14
0
36
0
FY28E
0
0
0
0
0
0
0
0
0
0
-13
0
-3
0
November 2025
72
 Motilal Oswal Financial Services
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PAT
New
FY27E
43
24
40
3
36
13
13
5
3
1
18
4
5
18
Presales
New
FY27E
253
341
253
35
102
316
115
123
35
39
48
178
Collections
New
FY27E
198
284
172
17
85
214
94
113
34
31
39
103
INR b
DLF
Godrej Properties
Lodha
Lotus
Oberoi Realty
Prestige Estates
Brigade
Sobha
Mahindra Lifespaces
Sunteck
Phoenix Mills
Anant Raj
Kolte Patil
Signature Global
FY26E
41
25
36
2
29
11
9
4
1
1
18
5
4
8
Old
FY27E
43
24
39
3
36
13
13
5
3
1
22
4
3
18
FY28E
45
38
39
6
40
14
19
8
3
2
30
11
7
26
FY26E
43
25
37
2
29
11
9
4
1
1
16
5
2
8
FY28E
45
38
43
6
40
14
19
8
3
2
25
11
7
26
FY26E
4
0
1
0
0
0
0
0
0
0
-7
-2
-48
0
Change (%)
FY27E
0
0
4
0
0
0
0
0
0
0
-19
-3
35
0
FY28E
0
0
11
0
0
0
0
0
0
0
-17
-2
-3
0
INR b
DLF
Godrej Properties
Lodha
Lotus
Oberoi Realty
Prestige Estates
Brigade
Sobha
Mahindra Lifespaces
Sunteck
Kolte Patil
Signature Global
FY26E
233
321
213
11
83
264
105
101
34
30
41
123
Old
FY27E
253
341
253
35
102
316
115
123
35
39
48
178
Old
FY27E
198
284
172
17
85
214
94
113
34
31
41
103
FY28E
161
339
317
59
101
463
133
104
34
45
38
232
FY26E
233
321
213
11
83
264
105
101
34
30
32
123
FY28E
161
339
317
59
101
463
133
104
34
45
43
232
FY26E
0
0
0
0
0
0
0
0
0
0
-23
0
Change (%)
FY27E
0
0
0
0
0
0
0
0
0
0
0
0
Change (%)
FY27E
0
0
0
0
0
0
0
0
0
0
-7
0
FY28E
0
0
0
0
0
0
0
0
0
0
12
0
INR b
DLF
Godrej Properties
Lodha
Lotus
Oberoi Realty
Prestige Estates
Brigade
Sobha
Mahindra Lifespaces
Sunteck
Kolte Patil
Signature Global
FY26E
170
263
144
11
65
151
78
67
29
23
33
63
FY28E
217
276
214
40
87
364
123
119
40
41
43
151
FY26E
170
263
144
11
65
151
78
67
29
23
29
63
FY28E
217
276
214
40
87
364
123
119
40
41
43
151
FY26E
0
0
0
0
0
0
0
0
0
0
-10
0
FY28E
0
0
0
0
0
0
0
0
0
0
-1
0
Retail: Jewelry – Stable strong revenue growth trajectory with healthy margins
Jewelry companies continued to deliver robust sales growth despite facing challenges such as the Shraddh
period, heavy rainfall and a significant rise in gold price, up ~45% YoY and ~8% QoQ, crossing the INR100k mark
(per 10gm) in the retail market. Consumer demand remained strong, fueled by the early festive season. Titan
(Jewelry standalone, ex-bullion), Kalyan, P N Gadgil (retail), and Senco delivered revenue growth of 19%, 31%,
29%, and 2% in 2Q. SSSG of Titan/Kalyan stood at 14%/16%, while Senco reported a same-store sales decline of
4% in 2Q. The studded mix improved for most jewelry companies.
Our top picks are Titan and PN Gadgil.
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Outperformers (2Q):
Titan, P N Gadgil
Underperformer (2Q):
Senco
Guidance highlights:
TTAN:
For Tanishq in FY26, TTAN expects to open 35-40 stores and renovate ~70 stores. Standalone EBIT margin
(ex-bullion) guidance remains at 11-11.5%, with a stronger focus on absolute growth.
Kalyan Jewellers:
In FY26, the company plans to launch 170 showrooms across the Kalyan and Candere formats -
90 Kalyan showrooms and 80 Candere showrooms in India.
Senco:
For FY26, the company maintains its revenue growth guidance of 18-20%. Additionally, it expects to
record an EBITDA margin of 7.2-7.4%. The company plans to open 8-10 franchise outlets in 2HFY26.
P N Gadgil:
It plans to open 13-15 additional stores in 2HFY26, comprising 7-8 PNG stores and 7-8 Lifestyle
stores, evenly split between COCO and FOCO formats, taking the total store count to 78-80 by the end of FY26.
RETAIL: Muted trends persist in 2QFY26; optimism all around of a demand recovery from 3Q
Apparel and grocery retail: Demand remains patchy, as the early festive season boost was offset by weather
disruptions and the GST transition
Demand environment remained soft in 2QFY26 as prolonged monsoons and the GST transition offset the boost from
the early festive season. Footfalls improved during the festive season, but they fell short of managements’
expectations. Several retailers indicated early signs of recovery and expect demand to rebound in 2HFY26,
supported by recent policy measures.
The aggregate revenue for nine apparel stocks under our coverage grew
14% YoY
to
INR160b
(vs. 15% YoY in 1Q, in
line). However, the growth was more broad-based, with value retailers Vishal Mega Mart (VMM) and V-Mart
delivering ~22% YoY growth on the back of double-digit SSSG, while growth decelerated further for Trent to 17% YoY
(from 20% YoY in 1Q). Including D-Mart, aggregate revenue rose
15% YoY
(similar to 1Q). Retail LTL rebounded for
retailers such as ABFRL, ABLBL, and Shoppers Stop, driven by early festive momentum and store rationalizations.
Profitability trends were mixed, with aggregate gross profit (ex-D-Mart) rising 13% YoY to INR71b (vs. 15% YoY in
1Q), as
gross margin contracted ~35bp YoY
(90bp miss). Vedant (-380bp), Raymond (-115bp), and Trent (-90bp)
were the key drags on aggregate gross margin, while ABFRL (~400bp), ABLBL (+130bp) witnessed margin expansion
driven by lower discounting and optimization of channel mix.
Aggregate reported EBITDA
(excl. D-Mart) grew 18% YoY (vs. 23% YoY in 1Q) to INR22b as margins expanded
~50bp YoY (vs. 95bp YoY in 1Q and ~50bp beat), led by improved profitability for V-Mart (+300bp), Trent (+135bp,
though pre-INDAS EBITDA margin declined ~10bp YoY), ABLBL (+125bp), and VMM (+80bp).
Aggregate PAT
stood at INR4.5b, up 24% YoY (17% below our estimates) due to weaker profitability for ABFRL and
ABLBL. Excluding them, PAT grew 25% YoY to INR7.2b (in line), driven by robust profitability improvement for VMM
(+46% YoY), Raymond (78% YoY, on a low base), and V-Mart (reduced losses), though offset by weaker profitability
for Trent (+6% YoY).
D-Mart delivered 15% YoY revenue growth (vs. 16% YoY in 1Q). After three successive quarters of compression,
pressure eased on gross margin (up ~5bp YoY to 14.2%, a 20bp beat). However, the elevated cost of retailing
compressed EBITDA margin, resulting in an 11% YoY EBITDA growth and a modest 5% YoY PAT growth.
Footwear: Tepid performance continues; Metro and Campus fare relatively better due to premiumization
Aggregate revenue for the footwear stocks under our coverage grew ~1% YoY (vs. ~2% YoY decline in 1Q, but weaker
than our estimate of 5% YoY growth) to ~INR25b, due to subdued demand in the mass footwear market and the
transient impact of GST 2.0. Bata and Relaxo (7-8% miss on revenue) posted 4-8% YoY revenue decline. We note that
Relaxo’s revenue has now declined by 5%+ YoY for the past five quarters. Metro and Campus fared better with double-
digit growth, driven by premiumization. Aggregate gross profit was flat YoY (~5% miss, -2% YoY in 1Q), as gross margin
contracted ~55bp YoY (~55bp miss). Campus was the outlier with +100bp gross margin expansion, while BATA reported
155bp margin compression. Aggregate EBITDA declined ~2% YoY (vs. +5% YoY in 1Q, 15% miss) as EBITDA margin dipped
~60bp YoY to 18.1% (245bp miss), due to higher A&P spends (Metro and Campus) and operating deleverage (Bata and
Relaxo). Aggregate PAT declined 15% YoY (vs. -8%/-5% YoY in 1QFY26/4QFY25) to INR1.5b (~30% miss).
November 2025
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Store additions accelerate, driven by a positive outlook on consumer sentiments
In 2QFY26, aggregate revenue for the 14 retail stocks under coverage
grew 14% YoY (in line)
to INR347b (similar
growth trends have been sustained since 4QFY25), driven by a combination of improved store additions, SSSG
recovery led by early festive momentum, and rising e-commerce salience for a few retailers. Excluding RRVL, net
store additions improved to 212 stores (vs. 58 QoQ in 1Q, led by Trent (58), Metro (38), VMM (25), and V-Mart (23)),
taking the total footprint to 14,430 stores (+5% YoY). Driven by a positive outlook on consumer sentiments, a few
retailers such as Metro, V-Mart, and VMM are accelerating store expansions, while Go Colors, Vedant, and Raymond
have turned cautious and trimmed their rollout plans. Similar to 1QFY26,
aggregate gross profit grew
~12% YoY as
gross margin contracted ~50bp YoY.
Aggregate EBITDA grew ~13% YoY
(vs. ~15% YoY in 1Q), with margins largely
stable YoY at 11.3%, driven by robust cost controls.
Aggregate PAT
rose by a modest 8% YoY (vs. 13% YoY in 1Q),
dragged by higher losses for ABFRL, muted profitability growth for heavyweights such as Trent (6% YoY) and D-mart
(5% YoY), and a decline for footwear retailers, offsetting the strong growth posted by VMM (up 45% YoY).
Earnings downgrades restricted to select laggards; broad-based earnings cut likely behind:
Amid an improving
demand outlook, our aggregate FY26-27 EBITDA estimate increased by ~1% since 1QFY26 results (vs. 3% cuts over
4QFY25-1QFY26), as higher reported EBITDA for Trent and V-Mart were continued cuts for Go Fashions and Vedant. Our
aggregate FY26-27E PAT was cut by ~1-2%, since 1QFY26 results (vs. 4-5% cuts over 4QFY25-1QFY26). The earnings cut
was skewed by a few laggards such as Bata, Raymond, and Vedant. In contrast, V-Mart witnessed significant earnings
upgrades for the second consecutive quarter (albeit on a low base).
Top picks:
V-Mart, VMM, and Metro
Surprises:
VMM and V-Mart
Misses:
Relaxo, Bata, ABFRL, and Vedant Fashions
Guidance highlights:
VMM:
Management remains optimistic about an improvement in consumer demand, led by higher disposable
income after GST rationalization, income tax rate cuts, and healthy monsoons. Accelerated store expansion
remains a key priority, with encouraging traction in its forays in Kerala and Gujarat. Further, the endeavor is to
keep gross margin broadly stable, while operating margins are expected to expand through operating leverage.
V-MART:
Consumer sentiment improved in 2Q on policy support, lower inflation, and early festive momentum.
GST aided overall sentiment, and winter-driven pickup supports management’s outlook for mid- to high-single-
digit SSSG. Management has raised its guidance of store additions to 75 (from 65 earlier).
Metro Brands:
Management reiterated its long-term guidance of 15-18% CAGR, driven by mid-to-high single-
digit SSSG, new store openings, and rising contribution from new banners. Further, driven by its robust cost
controls and superior store economics, it aims to deliver a 30%+ EBITDA margin and a mid-teen profit margin.
Shoppers Stop:
It saw a sharp demand rebound, with 9.4% LFL (multi-year high). Momentum improved through
the quarter and moved to double-digit LFL in the ongoing festive season. Management expects mid-to-high
single-digit full-year margins, aided by 3Q strength.
Campus Activewear:
Management sees strong underlying demand momentum, supported by festive recovery,
premium category growth, and expanding distribution reach. It expects sustained double-digit growth in 2HFY26
as premium and D2C channels scale further, with margins expanding to 17-18%.
BATA:
Demand improved during the festive season, with a rebound post-GST 2.0. Recovery should strengthen
from 3Q as cleaner inventory and faster turns aid productivity, while the value segment stabilizes with GST pass-
through and price re-indexing boosting volumes.
Vedant Fashion:
Management expects consumer sentiment to improve, while AP and Telangana have already
rebounded strongly with 20%+ growth in 1HFY26. However, net store additions are likely to be muted in FY26.
Raymond Lifestyle:
Management sees strong festive and wedding-led demand sustaining into 2HFY26,
supported by tax cuts and GST rationalization. Margins in branded apparel could remain subdued in the near
term due to higher A&P and weaker-than-anticipated performances of new stores.
Relaxo:
The company is witnessing a gradual improvement in demand following the rollout of GST 2.0.
Management expects 3Q to be muted, with revenue expected to decline by 3-4% or slightly better. Growth is
expected to return in 4Q, with FY27 anticipated to be better than FY26.
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ABLBL:
Demand benefited from early festive and small-town strength, but overall consumption stayed muted.
Diwali was modest, and near-term trends depend on demand recovery in the ongoing wedding season. Store
consolidation is largely done, and expansion is expected to accelerate from 2HFY26.
ABFRL:
The early onset of the Pujo boosted footfalls and conversions, leading to healthy LFL growth across
segments. However, heavy monsoons in the East dampened festive momentum. ABFRL plans to open 15 new
Pantaloons stores in a revamped format annually (8 closures, 6 openings in 1HFY26) and renovate 8-15 stores
annually. It aims to improve gross margins to over 50% (vs. ~50% currently), raise private label share to 70-75%
(from the mid-60s), and achieve 25% store-level profitability (15-17% segment level).
Go Fashion:
Demand is recovering, led by strong festive sales in markets such as Tamil Nadu and Maharashtra,
though post-Diwali softness persists. West and North are improving, while South is still lagging. FY26 store
guidance is trimmed to 80-90 net store additions (vs. 120 gross) to safeguard margins during weak SSSG.
Exhibit 128: Value retail led with 20%+ growth, while
selective pockets saw an uptick owing to the early festive
season
22% 22%
13%
15%
10%
4%
-4%
-7% -2%
17%
11%
7%
7%
16%
Exhibit 127: Aggregate revenue for retailers under our
coverage grew 14% YoY (similar to 4QFY25 and 1QFY26)
Aggregate revenue (INR b)
YoY growth (%)
18.5
15.7
16.8
16.2
14.3
15.0
13.4
13.9
13.5
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 129: Similar to 1QFY26, aggregate gross profit grew
12% YoY with ~50bp margin contraction in 2QFY26
Aggregate Gross Profit (INR b)
33.0
31.5
32.1
32.2
31.6
32.3
31.3
GM (%)
Exhibit 130: Gross margin contraction driven by weaker GM
for Trent, Manyavar, Bata, and Raymond
394
130
31.7
6 -63 -88 -46 3
7
31.0
-154
22 98 -1
-115
-377
Source: Company, MOFSL
Source: Company, MOFSL
November 2025
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Exhibit 131: Value retailers continue to post strong SSSG, while Shoppers Stop witnessed a
marked improvement in 2QFY26
4QFY25
1QFY26
2QFY26
11.0 10.0
1.0
-2.0-3.6
12.8
13.7
11.4
11.0
1.0
-2.0
17.6
8.1 7.1
9.4
6.8
3.0
5.0
2.0
7.0
-4.5
Source: Company, MOFSL
Exhibit 132: Aggregate EBITDA grew ~13% YoY (vs. 15% YoY
in 1Q); margin remained broadly stable YoY
Aggregate EBITDA (INR b)
13.7
11.5 11.9 11.3
EBITDAM (%)
Exhibit 133: Margin expanded for V-Mart, Trent, VMM, and
Campus, offset by contraction in Manyavar, BATA, and ABFRL
302
145
-23
-276
1
-343
-24
13.4
11.4
11.4
12.0
11.3
124
-109
-28 21
134
-71
82
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 134: Aggregate PAT rose ~8% YoY (vs. ~13% YoY in 1QFY26) due to muted
profitability growth for heavyweights such as Trent and D-Mart
Aggregate PAT (INR b)
25.1
7.0
10.1
6.9
% YoY
17.2
15.2
12.6
8.3
-23.0
10.7
18.1
11.2
13.9
12.5
21.2
12.8
15.7
13.5
Source: Company, MOFSL
November 2025
77
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 135: Store consolidation largely done with, companies are now setting up for expansions ahead
Total Stores
2QFY24 3QFY24
ABFRL + ABLBL
4,056
4,753
Bata
1,781
1,835
Raymond
1,453
1,512
TRENT
661
715
Metro
817
840
Go Fashion
678
704
VMM
576
589
Vedant Fashion
669
673
VMART
437
454
DMART
336
341
Relaxo
394
399
SHOP
281
290
Campus
240
250
Total (Ex-RRVL)
12,379
13,355
Note: Excluding Reliance Retail stores
4QFY24
4,664
1,862
1,518
811
839
714
611
676
444
365
405
306
268
13,483
1QFY25
4,607
1,916
1,539
823
854
734
626
662
448
371
399
320
275
13,574
2QFY25
4,538
1,955
1,592
831
873
755
645
650
467
377
403
341
288
13,715
3QFY25
4,492
1,953
1,653
907
895
775
668
666
488
387
410
345
290
13,929
4QFY25
4,420
1,962
1,688
1,043
908
776
696
678
497
415
418
363
296
14,160
1QFY26
4,398
1,978
1,675
1,043
928
803
717
684
510
424
406
362
290
14,218
2QFY26 YoY (%) QoQ (%)
4,446
-2
1
1,995
2
1
1,663
4
-1
1,101
32
6
966
11
4
812
8
1
742
15
3
671
3
-2
533
14
5
432
15
2
414
3
2
365
7
1
290
1
0
14,430
5
1
Source: Company, MOFSL
Exhibit 136: Summary of the retail performance in the last two years
% YoY Growth
Revenue (YoY Change)
D-Mart
Footwear
Apparel retail
% Gross Margin
D-Mart
Footwear
Apparel retail
Gross Margin (Change in bps)
D-Mart
Footwear
Apparel retail
EBITDA (YoY Change)
D-Mart
Footwear
Apparel retail
% EBITDA Margin
D-Mart
Footwear
Apparel retail
EBITDA Margin (Change in bps)
D-Mart
Footwear
Apparel retail
PAT (YoY Change)
D-Mart
Footwear
Apparel retail
2QFY24
15.7
18.5
1.7
16.1
31.5
14.0
57.3
47.1
248
-52
462
686
8.2
11.9
10.2
-2.2
11.4
8.1
19.3
13.7
-124
-48
149
-256
-23.0
-9.8
3.9
-68.2
3QFY24
16.8
17.2
3.0
19.9
33.0
14.2
56.4
45.7
306
-9
212
449
15.7
15.0
-8.8
49.8
13.7
8.5
19.3
17.3
13
-16
-248
41
7.0
14.9
-19.8
60.0
4QFY24
18.5
19.9
2.3
21.3
32.1
13.7
57.8
45.1
362
29
293
601
20.0
20.2
5.0
48.4
11.5
7.6
21.1
13.5
20
2
54
30
25.1
19.6
10.8
915.0
1QFY25
16.2
18.4
-1.0
18.8
32.2
14.9
57.7
44.7
-41
34
142
-375
10.9
17.8
-14.0
46.6
11.9
8.9
19.8
13.4
-37
-4
-300
-4
10.1
16.8
-14.3
129.1
2QFY25
14.3
14.2
3.7
17.9
31.6
14.2
57.0
44.5
8
21
-30
-265
12.1
10.3
0.5
39.6
11.3
7.9
18.7
13.4
-16
-27
-60
-28
6.9
7.9
-0.7
53.4
3QFY25
15.0
17.5
2.9
15.0
32.3
14.1
56.0
45.2
-68
-14
-33
-43
12.7
10.2
12.4
13.8
13.4
7.9
21.0
17.2
-28
-53
178
-18
17.2
6.5
21.0
25.5
4QFY25
1QFY26
2QFY26
13.4
13.9
13.5
16.7
16.2
15.4
1.6
-1.5
1.3
12.4
14.5
13.6
31.3
31.7
31.0
13.5
14.6
14.2
56.3
57.2
56.5
45.1
45.0
44.1
-82
-47
-51
-24
-27
6
-154
-47
-53
-2
28
-33
12.4
14.8
13.3
4.4
7.6
11.3
6.4
4.9
-1.8
18.6
22.5
18.1
11.4
12.0
11.3
6.8
8.2
7.6
22.1
21.1
18.1
14.2
14.4
13.9
-10
10
-2
-80
-66
-28
99
130
-59
75
95
53
15.2
12.6
8.3
2.6
2.1
5.1
-5.1
-8.2
-15.4
62.4
53.2
25.7
Source: Company, MOFSL
TECHNOLOGY: Holding ground; awaiting revival
Aggregate performance:
IT companies (within the MOFSL Universe) offered some respite on the already beaten-
down expectations in 2QFY26, with median revenue growing 1.5% QoQ CC (-1.1%/-0.6%/+1.7%/+1.6% in
1QFY26/4Q/3Q/2QFY25). 2QFY26 earnings offered some respite, as expectations were already beaten down and
the quarter was seasonally strong. Largely all large-cap companies managed to beat/meet revenue estimates,
helped by steady deal ramp-ups. However, management commentary indicated that demand remains subdued,
with no clear signs of a new spending cycle emerging. Among Tier-1 firms, HCLTech stood out, raising its services
revenue guidance on the back of strong deal wins, positioning it as the fastest-growing among the top four.
November 2025
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India Strategy | Review 2QFY26
LTIMindtree delivered a strong beat on both revenue and margins, prompting a 4-5% upgrade in our FY26/FY27
estimates. On the other hand, Infosys maintained the top end of its full-year guidance, indicating that growth
recovery will be gradual, while TCS’s commentary suggests a measured demand environment into 2H. Midcaps
continue to do well. Persistent posted 4.4% QoQ CC growth in 2Q (above consensus). Coforge continued to
outperform (~6% QoQ CC), and we expect it to remain the growth leader within our coverage. In terms of
margins, they broadly met or beat expectations this quarter, largely aided by favorable currency movement,
pyramid rationalization, SG&A efficiencies, and utilization gains. Of the 16 companies under our coverage, 10
reported a QoQ improvement in EBIT margin —Tier-1 players saw a median EBIT margin uptick of ~60bp QoQ,
while Tier-2 increased ~90bp. Valuations are not the problem anymore, but questions are being asked of the
structural demand outlook. We believe sustained rerating will likely require evidence of GenAI-led spending
translating into meaningful revenue momentum, which, as of now, remains some distance away. We continue to
prioritize a bottom-up play in IT: HCLT and TechM in large-cap and Coforge in mid-tier categories.
Tier-2 pack outpaces tier-1:
Tier-1 players posted an average revenue growth of 1.6% QoQ CC, while tier-2
companies recorded a growth of 2.3% QoQ CC. COFORGE (6.0% CC QoQ growth), Persistent (4.4% QoQ CC),
LTIM/HCLT (2.4% QoQ CC), and HEXT (3.4% QoQ CC) reported robust performance this quarter. TCS (0.8% QoQ
CC), MPHL (1.2% QoQ CC), KPIT (0.3% QoQ CC), and WPRO (0.3% QoQ CC) reported weak growth. On the margin
front, tier-1 companies reported a margin improvement of ~30bp YoY, while tier-2 companies largely maintained
their margin YoY. Margins broadly met or beat expectations this quarter, largely aided by favorable currency
movement, pyramid rationalization, SG&A efficiencies, and utilization gains. INR depreciation against the USD
provided a sharp translation benefit across the board. That said, we expect margins to remain largely flat over
the next 18–24 months across the industry.
Steady TCV performance:
A majority of tier-1 companies reported steady TCV performance, except for
HCLT/LTIM (up 41.8% QoQ). Tier-2 companies also reported robust growth in TCV, with MPHL’s TCV rising 155%
YoY to USD528m. PSYS’s TCV was USD609m, up 17% QoQ/15% YoY. COFORGE recorded an order intake of
USD514m in 2Q, including five large deals. The 12-month executable order book rose 26.7% YoY to USD1.6b. The
1Q book-to-bill was decent at ~1.2x for tier-1 firms and ~1.0x for tier-2 players.
Headcount movement:
Hiring activity was muted in 2Q, with net headcount additions of ~1k in tier-1 firms,
while tier-2 companies saw only ~2.6k additions. Attrition rates and utilization remained stable in 2Q. For
PSYS/MPHL, utilization stood at 89%/86%, and we believe this margin lever is now maxed out.
Top picks:
We prefer TECHM and HCLT among large caps and COFORGE in the mid-cap space. Our positive
outlook on TECHM is driven by early signs of transformation under new leadership and improved execution in
BFSI. Margin expectations are now more reasonable, and niche offerings are resonating well. We believe
TECHM’s transformation remains relatively decoupled from discretionary spending. We continue to favor HCLT
for its all-weather portfolio. Often perceived as defensive, its strengths in data, product engineering, and
modernization should enable it to benefit from a recovering demand environment. We believe COFORGE’s
strong executable order book and a rebound in BFS client spending bode well for its organic business. Cigniti
could prove to be an effective long-term asset.
Significant beats:
HCLT (revenue growth and margin), TECHM (margin), LTIM (revenue growth and margin), and
Persistent (revenue growth).
Significant misses:
Infosys (revenue growth and margin), TTL/TELX (margin), and KPIT (margin).
Significant surprises:
HCLT (IT services’ guidance upgraded to 4-5% YoY cc vs. 3-5% earlier, Advanced AI revenue
called out; now comprises 3% of HCLT's total revenue), TCS (plans to invest USD5-7b over the next 5-7 years to
develop up to 1GW DC capacity), LTIM (Deal TCV at USD1.59b was up 22% YoY)
Major EPS upgrades/downgrades:
KPIT’s FY26E/FY27E EPS estimates were lowered by -4.6%/-2.0% following
higher depreciation linked to the CareSoft acquisition. TELX saw cuts of 5.4%/2.4%, while HEXT estimates were
reduced by 2.7%/3.0% for FY26/FY27. In contrast, LTIM’s EPS estimates for FY26/FY27 were raised by 5%/4%.
November 2025
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India Strategy | Review 2QFY26
Guidance highlights
TCS:
Demand trends remain broadly stable, with clients maintaining tight control over discretionary spending
and focusing on vendor consolidation. Growth is expected to be led by international markets, which should
outpace domestic performance, supported by continued traction in core transformation and cloud programs.
TCS’s planned 1GW AI data-center buildout over the next 5–7 years underscores rising demand for AI workloads
and positions the company well for medium-term opportunities. However, near-term profitability will be
weighed down by redundancy-related costs and wage hikes in 3Q, which will impact two months of the quarter.
Continued investments may also pose temporary margin headwinds, though management remains committed
to inching closer to its 26% margin aspiration as operating leverage improves.
INFO:
Demand trends remain steady, with enterprise clients accelerating AI-led modernization in partnership
with specialist Enterprise AI companies, an area where INFO is leveraging its deep understanding of complex IT
estates. Growth, however, remains volume-challenged, with most traction coming from improved pricing driven
by value-based engagements under Project Maximus and additional working days. The company continues to
invest in its sales engine, technology capabilities, and workforce, which may create near-term margin pressure,
though long-term levers remain intact. INFO raised its FY26 CC revenue growth guidance to 2–3%, from 1-3%
earlier. BFSI sees continued momentum by improving activity in mortgages, capital markets, and wealth
management. Furlough patterns are expected to remain similar to last year.
WPRO:
The midpoint of WPRO’s revised guidance (-0.5% to 1.5%) is positive for the first time in several quarters,
signaling a gradual improvement in underlying momentum. Management expects several large deals signed in
1H to begin ramping up through 2H, aided by strong activity in vendor consolidation, AI-led transformation, and
consulting-driven programs. Operating margins are expected to remain within the narrow 17.0–17.5% band,
though 3Q will be seasonally weak due to furloughs, fewer working days, and ongoing large-deal transition costs.
BFSI growth in 2Q was led by Europe and APMEA, with the Americas likely to improve as deal ramps gather pace.
Hiring will remain closely aligned to execution needs, and with over 80% of the US workforce localized, no
supply-side constraints are anticipated.
HCLT:
The demand environment remains largely unchanged, with BFSI and Technology continuing to show
healthy momentum, while the auto segment remains soft. Several pockets of discretionary spending have
effectively turned into mandatory initiatives, driven by client M&A activity and carve-outs linked to broader
transformation programs. The company has raised its full-year IT Services growth guidance to 4–5% (from 3–
5%), supported by sustained traction across key accounts. Overall revenue growth guidance is maintained at 3–
5%, reflecting muted performance in 3Q in the Products business. Pricing frameworks are steadily evolving from
traditional licensing-based models for proprietary IP toward outcome- and value-sharing structures, particularly
for productivity-led engagements such as SDLC efficiency programs. Advanced AI revenue has now crossed
USD100m and contributes ~3% of total revenue, with a balanced mix across services and software. The company
aims to lift its quarterly TCV run rate from USD2b to USD2.5b, backed by a strong pipeline, robust qualification
activity, and steady win ratios.
TECHM:
The company remains satisfied with the progress achieved in 1HFY26, which was largely focused on
strengthening its execution foundation. The company expects 2HFY26 to reflect a shift toward decisive delivery
supported by strategic actions, seasonality, and an improving demand environment. As discretionary spending
stabilizes, revenue conversion from recent deal wins is set to accelerate. Management expects TCV to rise
further if the environment remains steady, while an improvement in macro conditions would sustain the current
run rate. Margin expansion in the quarter was aided by fixed-cost project optimization, SG&A rationalization,
and a 40bp currency benefit. With 55–60% of the portfolio comprising fixed-price projects, additional GM levers
remain intact. Communication and Media saw strong performance in APAC and the US, while temporary
softness in Europe is expected to recover in 2H. Comviva continues to deliver robust growth, and vendor
consolidation discussions in Europe are progressing, with positive outcomes anticipated in the coming quarters.
LTIM:
The company remains confident of sustaining growth momentum through 2H, supported by a strong
large-deal pipeline and continued traction in transformation programs. Management noted a client's interests in
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legacy modernization as client priorities shift toward modernizing data, technology, and infrastructure through
vendor-consolidation-led large deals. Revenue growth is expected to accelerate over the coming quarters, with
the company targeting high single-digit to low double-digit USD growth by FY26-end. LTIM also secured a major
government engagement with the Department of Direct Taxes to modernize the ‘PAN 2.0’ platform, which has
begun ramping and will scale meaningfully in 3QFY26. Wage hikes are being staggered across January and April
2026, reflecting a broader focus on cross-skilling and continuous upskilling. Most new deals continue to arise
from consolidation opportunities, though net-new demand remains healthy.
Exhibit 137: Tier 1 companies grew 0.8% YoY
Tier I Revenue Growth (USD, YoY %)
4.4%
2.5%
0.8%
0.4%
4.3%
3.3%
1.9%
1.6% 1.7%
0.8%
8.5% 7.4%
6.6%
17.8% 16.7%
12.3% 13.3% 11.9% 13.5%
Exhibit 138: Tier-2 companies continued to grow
Tier II Revenue Growth (USD, YoY %)
8.1%
Exhibit 139: A favorable currency aided margin expansion across our Coverage Universe in 2Q
20.1
15.5
20.1
15.4
Tier I EBIT Margin (%)
20.1
19.9
Tier II EBIT Margin (%)
20.4
20.0
19.9
19.8
20.4
14.9
14.8
14.5
14.6
14.6
13.6
14.5
Source: Company, MOFSL
Exhibit 140: Median utilization (%) improved 50bp QoQ
IT Sector - Median Utilization (incl. trainees %)
84.3%
83.4%
84.6% 84.3%
84.8%
Exhibit 141: Median attrition remained stable in 2Q
IT Sector - Mediam Attrition (%)
14.6%
13.1%
13.0% 13.3%
12.6% 12.5% 12.7%
13.9% 14.0%
83.9%
81.9% 81.6%
82.4%
Figures excl. LTTS. from 2QFY24; MPHL (Offshore); Source:
Company, MOFSL
Figures exclude KPIT & MPHL; Source: Company, MOFSL
TELECOM: Steady revenue growth with better-than-expected margin expansion
2QFY26 was a steady quarter for telcos, with the benefits of the Jul’24 tariff hike reflected in the base. The combined
wireless revenue for the three private telcos grew 2.2% QoQ to INR671b (+10% YoY), largely on expected lines. The
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growth was primarily attributed to a 1.5% QoQ growth (~9% YoY) in blended wireless ARPU to INR215, supported by
one extra day QoQ and improvements in the subscriber mix. Subscriber net adds across telcos were impacted by
pronounced seasonality, with combined wireless net adds for the three private telcos moderating to 6m (vs. ~8m in
1Q). The key surprise for the quarter came on the margin front, with combined wireless EBITDA for the three private
telcos rising 3.6% QoQ (+15% YoY), driven by better-than-expected incremental margins. Among these telcos, Bharti
remained the biggest gainer in 2QFY26, posting a 17bp QoQ increase (+127bp YoY) in Revenue Market Share (RMS).
However, it witnessed a 7bp QoQ decline (though still gained ~44bp YoY) in Subscriber Market Share (SMS). RJio’s
RMS remained broadly stable in 2QFY26 with a 3bp QoQ increase (though still 10bp lower YoY), while it emerged as
the biggest gainer in SMS with a 27bp QoQ rise (and 81bp YoY). Vi continued to lose market share, with RMS
declining ~20bp QoQ (-117bp YoY) and SMS declining ~20bp QoQ (-124bp YoY). Home broadband (HBB) continued
its strong momentum, with both RJio (~2.8m) and Bharti (~950k) reporting record quarterly net home connections.
Going forward, the focus will be on the next tariff hike, valuations for the impending JPL IPO (vs. our EV of USD150),
and potential relief of AGR dues. We continue to bake in a 15% (or INR50/month) tariff hike on smartphone plans
from Dec’25, which should further support ARPU growth.
One extra day and subscriber mix improvement drive ARPU growth; Bharti remains the biggest gainer in 2QFY26
Benefiting from one extra day QoQ and a continued rise in the proportion of data subscribers, blended ARPU for the
private telcos grew 1.5% QoQ and ~8.7% YoY. Bharti remained the biggest beneficiary of subscriber-mix
premiumization, delivering ~2% QoQ growth in wireless ARPU (vs. ~1.2-1.3% QoQ for peers).
Overall, wireless net adds (6m vs. ~8m QoQ) were adversely impacted by the pronounced seasonality and
heightened competitive intensity. RJio maintained its lead with 5.6m net adds in 2QFY26, while Bharti’s subscriber
net adds remained muted for the second successive quarter (+1.4m). However, Bharti continues to benefit from the
shift of customers from prepaid to postpaid and from non-data to data plans. Vi’s subscriber losses were contained
at ~1m in 2Q, though moderating capex could weigh on its subscriber trajectory over the medium term. With steady
improvement in ARPU, combined wireless revenue for the private telcos rose ~2.2% QoQ to INR671b (+10% YoY).
Bharti was once again the biggest gainer in 2QFY26, delivering ~2.6% QoQ growth (+13.2% YoY), followed by RJio
with ~2.3% QoQ wireless revenue growth (+9.5% YoY). In contrast, Vi’s wireless revenue growth remained modest at
0.8% QoQ (+1.7% YoY), as higher ARPU (+7.1% YoY) was offset by continued net subscriber losses (-8m or ~-4% YoY).
Robust incremental margin drives ~4% sequential growth in combined EBITDA for the three private telcos
Combined EBITDA for the three private telcos grew ~3.6% QoQ (+15.3% YoY, vs. our est. of ~2% QoQ), supported by
improved incremental margins across all three telcos. Bharti led with 4.2% QoQ EBITDA growth, delivering ~94%
incremental margins. RJio reported ~3.5% QoQ growth, driven by a modest ~20bp margin expansion, while Vi’s
reported EBITDA rose modestly by ~1.6% QoQ. Vi’s pre-INDAS 116 EBITDA grew ~3% QoQ to INR22.5b in 2QFY26.
Bharti’s consolidated EBITDA grew 6% YoY, driven by robust performance in Airtel Africa (+16% QoQ, Nigeria tariff
hike flow-through and favorable FX movements) and Homes (+9% QoQ, ramp-up in net additions).
Capex normalizes for Bharti; Vi’s capex plans moderate
Following lower capex in 1Q, Bharti’s consolidated capex accelerated, growing 37% QoQ to INR114b (+26% YoY).
India capex excluding Indus Towers (Indus), rose ~33% QoQ (+16% YoY) to INR71b.
Bharti’s consolidated FCF remained robust at INR146b (vs. ~INR143b in 1Q), despite a moderation in FCF
generation from Indus in 2Q, reflecting the diversified and profitable nature of Bharti’s portfolio.
Bharti’s net debt (excluding leases) inched up INR12b QoQ to INR1.267t. India net debt-to-EBITDAaL dipped to
1.19x (vs. 1.26x QoQ).
RJio’s 1HFY26 cash capex (including payments to creditors for capex and the principal component of spectrum
repayments) was broadly stable YoY at INR224b, while gross block additions (a proxy for committed capex)
inched up to INR251b in 1HFY26 (vs. ~INR204b YoY).
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RJio’s 1HFY26 FCF (post interest, leases, and spectrum repayments) improved to INR63b (vs. IN6b/INR39b in
1HFY25/FY25), driven by a 17% YoY increase in EBITDA. Effective net debt (including spectrum debt and
creditors for capex) declined INR78b in 1HFY26 to INR1.79t.
Similar to Bharti, BHL’s capex also surged in 2QFY26, which led to a moderation in FCF generation to INR4.4b (vs.
INR8.9b QoQ). Net debt (excluding leases) was broadly stable QoQ at INR28b (with leverage at modest 0.64x).
Vi’s capex moderated further to INR17.5b (vs ~INR42b in 1H), with management expecting INR75-80b for FY26,
based on its internal accruals. We believe that, without an expedited debt raise, Vi’s INR500-550b capex plan
over the next three years remains in jeopardy, which could also weigh on the company’s ability to retain its
subscriber base.
Vi’s net debt (excluding leases) increased ~INR56b QoQ to ~INR2t, primarily consisting of deferred spectrum
liabilities and AGR dues to the GoI.
Elevated capex weighed on FCF generation for Indus amid stable operating performance
Indus’ 2Q recurring results were broadly in line with estimates, with recurring EBITDA (excluding provision reversals)
rising 3% QoQ to INR43.8b. Reported EBITDA at INR45.7b benefited from reversals of prior-period bad debt
provisions. Operationally, tower additions picked up QoQ after a subdued 1Q, driven by share gains from Bharti’s
new builds and relocations from other towercos. However, tenancy additions moderated, reflecting a slowdown in
Vi’s rollouts during 2Q. Management indicated that the order book for both tower and tenancy additions remains
robust in the near term. With a pickup in tower additions, capex surged 31% QoQ to INR25.6b. Maintenance capex
also remained elevated, as the company continues to invest in energy-efficiency initiatives, such as solarization and
battery replacement. Elevated capex and an increase in receivables (up INR5b QoQ) led to a decline in FCF to INR3b
(vs. INR15.7b QoQ). Indus’ recent announcement of its foray into Africa appears to be at a preliminary stage, with
further clarity on investments and potential return ratios expected over the next 3-6 months.
TCOM’s steady performance with expansion in data EBITDA margin
TCOM delivered a stable quarter, with data revenue growing modestly 1% QoQ (+7% YoY) and consolidated EBITDA
margin expanding ~15bp. Consolidated reported revenue grew ~2.3% QoQ (+8.1% YoY). However, adjusted for FX
benefits, the growth was modest at ~0.4% QoQ. The expansion in data EBITDA margin (up 145bp QoQ), driven by
lower losses in the digital portfolio, was offset by weaker margins in voice and other subsidiaries (especially TCR).
Top picks:
BHARTI, RIL
Positive surprises:
Bharti Airtel, Airtel Africa
Guidance highlights:
RJio:
The 5G user base rose to 234m in 1QFY26 (vs. 213m QoQ), with 5G now accounting for ~50% of RJio’s
overall wireless data traffic. HBB net adds accelerated to ~1m per month, and management indicated there is
potential to further increase the pace of monthly additions from the current ~1m connections.
Bharti:
The capex required to transition from NSA to SA 5G is not material, and the acceleration in HBB capex is
already built into management’s FY26 India (excluding Indus) capex guidance, which is expected to be lower
than FY25 levels (~INR300b). The company plans to increase investments in data centers (both through Nxtra
and via a recent tie-up with Google for an AI data center). Bharti welcomed the SC’s recent stance on AGR dues
and aims to push for inclusion in broader sector-wide relief with the GoI. The company has passed an enabling
resolution to raise its stake in Indus by 5% in one or more tranches (vs. 51% currently). Management indicated
that it views Indus as a vital asset for Bharti’s network, one which is comparatively undervalued (vs. global
towercos). However, management reiterated that there are no plans to fold the Nxtra datacenter into Indus,
citing limited synergies between the two businesses.
BHL:
BHL experienced pronounced seasonality during the quarter, largely due to migration patterns and heavy
monsoons across Rajasthan, resulting in a marginal decline in its customer base in 2Q. Management highlighted
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that the seasonality impact was a one-off event, and 3Q has started on a strong note, with customer additions
normalizing. Quarterly capex trends were influenced by seasonality and prioritization, but overall, capex is
expected to trend downwards in FY26.
Vi:
Management expects INR75-80b capex for FY26 (vs. INR42b in 1H) from Vi’s internal cash flows, with a focus
on enhancing coverage as well as capacity. A pick-up in capex beyond INR80b is contingent on the completion of
an external fund raise. Management remains engaged with banks and NBFCs for long-pending debt raise and
believes GoI’s support to Vi’s LT survival would support the company’s funding plans.
TCOM:
Management expects strategic bets (Voice AI, AI Cloud, digital fabric tool) to contribute at least 10% to
incremental digital revenue in FY26, which will scale up to INR100b by FY30. On the order book and funnel,
management noted that 1HFY25 benefited from several large deal wins, while the 1HFY26 order book was
better than 2HFY25, which faced macro headwinds. Cloud and international order books grew in healthy mid-
teen/double digits in 2Q. The funnel remains robust, with digital portfolio accounting for ~60%.
Indus:
Management indicated that the order book is expected to remain strong, at least in the near term, for
both tenancy and tower additions. Indus’ foray into Africa is at a nascent stage, and management expects to
provide further clarity on the quantum of investments, return metrics, and other details over the next 3-6
months.
Exhibit 143: Bharti continued to lead peers on ARPU
Bharti (India)
Vi
RJio
Exhibit 142: Subscriber trends for the industry in 2Q
Bharti (India)
Vi
RJio
FY24
FY25
FY26
FY24
FY25
FY26
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Exhibit 144: Wireless KPI comparison
FY24
1Q
EOP SUBS (m)
Bharti (India)
Idea (incl. M2M)
RJio (incl. FTTH)
Avg. Wireless Subs (m)
Bharti (India)
Idea (incl. M2M)
RJio (incl. FTTH)
ARPU (INR/month)
Bharti (India)
Idea (incl. M2M)
RJio (incl. FTTH)
MOU/Sub (min)
Bharti (India)
Idea
RJio
Voice traffic (B min)
Bharti (India)
Idea
RJio (incl. FTTH)
Data usage/Sub (Gb)
Bharti (India)
Idea
RJio (incl. FTTH)
Data traffic (B Gb)
Bharti (India)
Idea
RJio (incl. FTTH)
339
221
449
337
224
444
200
139
181
1,138
626
1002
1,149
420
1335
21.1
14.4
24.9
15.3
6.0
33.2
2Q
342
220
460
340
221
454
203
142
182
1,123
613
979
1,148
406
1334
21.7
14.6
26.6
16.1
6.1
36.3
3Q
346
215
471
344
218
465
208
145
182
1,127
615
981
1,161
401
1370
22.0
14.2
27.3
16.8
6.0
38.1
4Q
352
213
482
349
214
476
209
146
182
1,158
626
1008
1,210
402
1440
22.6
14.3
28.6
17.8
6.0
40.9
1Q
355
210
490
353
211
486
211
146
182
1,128
607
974
1,195
385
1420
23.7
14.5
30.3
19.2
6.1
44.1
2Q
352
205
479
353
208
484
233
156
195
1,135
586
977
1,200
365
1420
23.9
14.4
31.0
19.8
6.0
45.0
FY25
3Q
357
200
482
354
202
480
245
163
203
1,160
593
1013
1,233
360
1460
24.5
14.2
32.3
20.7
5.9
46.5
4Q
362
198
488
359
199
485
245
164
206
1,163
598
1024
1,254
357
1490
25.1
15.0
33.6
21.6
6.2
48.9
1Q
363
198
498
362
198
493
250
165
209
1,143
589
1007
1,242
350
1490
26.9
16.3
37.0
23.4
6.7
54.7
FY26
2Q
364
197
506
363
197
502
256
167
211
1,145
585
996
1,249
346
1500
28.3
17.6
38.8
25.0
7.3
58.4
YoY
(%)
3.6
-4.0
5.8
3.0
-5.0
3.7
9.8
7.1
8.4
0.9
-0.2
1.8
4.1
-5.2
5.6
18.6
22.4
25.1
26.6
21.4
29.8
QoQ
(%)
0.4
-0.5
1.7
0.4
-0.4
1.8
2.2
1.2
1.3
0.2
-0.8
-1.2
0.6
-1.1
0.7
5.3
7.6
4.8
7.0
7.8
6.8
Source: MOFSL, Company
Exhibit 145: Key financial metrics for the private telcos
FY24
1Q
Revenue (INR b)
Bharti (India wireless)
Bharti (consolidated)
Idea
RJio (incl. FTTH)
EBITDA (INR b)
Bharti (India wireless)
Bharti (consolidated)
Idea
RJio (incl. FTTH)
EBITDA Margin (%)
Bharti (India wireless)
Bharti (consolidated)
Idea
RJio (incl. FTTH)
Reported PAT (INR b)
Bharti (consolidated)
Idea
RJio (incl. FTTH)
EPS (INR)
Bharti
Idea
204
374
107
240
112
196
42
126
54.8
52.3
39.0
52.3
16.1
(78.4)
48.6
2.8
(1.6)
2Q
210
370
107
248
115
195
43
130
54.9
52.7
40.0
52.3
13.4
(87.4)
50.6
2.4
(1.8)
3Q
216
379
107
254
119
198
44
133
55.1
52.3
40.8
52.3
24.4
(77.4)
52.1
4.3
(1.4)
4Q
221
376
106
260
122
194
43
136
55.1
51.5
40.9
52.4
20.7
(76.7)
53.4
3.6
(1.6)
1Q
225
385
105
265
125
197
42
139
55.6
51.2
40.0
52.6
41.6
(64.3)
54.5
7.2
(1.0)
2Q
248
415
109
283
142
218
45
150
57.1
52.7
41.6
53.1
35.9
(71.8)
62.3
6.2
(1.0)
FY25
3Q
263
451
111
293
155
246
47
155
58.8
54.5
42.4
52.8
147.8
(66.1)
64.8
25.5
(1.0)
4Q
266
479
110
300
158
270
47
159
59.2
56.4
42.3
52.8
110.2
(71.7)
66.4
19.0
(1.0)
1Q
274
495
110
309
163
278
46
167
59.4
56.3
41.8
54.0
59.5
(66.1)
67.1
10.3
(0.6)
FY26
2Q
281
521
112
319
170
296
47
173
60.3
56.7
41.9
54.2
67.9
(55.6)
69.7
11.7
(0.5)
YoY
(%)
13.2
25.7
2.4
12.4
19.6
35.3
3.0
14.9
323bp
402bp
23bp
117bp
89.0
22.5
11.9
88.7
50.5
QoQ
(%)
2.6
5.4
1.6
3.2
4.2
6.2
1.6
3.5
89bp
41bp
1bp
18bp
14.2
15.8
3.9
14.2
19.0
Source: MOFSL, Company
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UTILITIES: Overall soft quarter as demand remains weak
Overall performance:
For our coverage universe, revenue/EBITDA came in 11% below our estimates (+4%/+5%
YoY), largely due to weaker-than-expected results from NTPC, PWGR, and TPWR. Adjusted PAT came in 3%
below our expectations (flat YoY), with JSWE/TPWR/PWGR underperforming by 16%/13%/16% and
ACME/Suzlon exceeding our estimates by 13%/182%.
Mixed performance in 2Q – SUEL and ACME deliver a strong beat; NTPC, PWGR and TPWR report a miss:
IEX’s
standalone revenue and EBITDA were in line with our estimate, while PAT was 5% above our estimate, primarily
due to higher-than-expected other income. IEX’s electricity volumes rose 16% YoY, while REC volumes dipped
30% YoY.
JSWE’s
consolidated revenue missed our est. by 9% but EBITDA was in line, supported by a higher
EBITDA margin of 58% vs. our est. of 53%. Adj. PAT was 16% below our estimate primarily due to lower-than-
estimated other income and higher interest/depreciation expenses, arising from additional capitalization of new
assets during the quarter. The impact was partially offset by a lower effective tax rate of 13.8%. Installed
capacity stood at 13.2GW as of 2Q end, up 71% YoY, while net generation increased 52% YoY to 14.9BUs.
NTPC’s
adjusted PAT was 4% above our estimate, mainly supported by higher-than-estimated other income. EBITDA
missed our estimate as weak power demand led to soft generation. Gross power generation declined 6% YoY to
83BUs. Coal PLF fell 627bp YoY to 66.01%, primarily due to grid restrictions impacting generation. Hydro PLF
stood at 104.6% and gas PLF remained flat at 6.8%. Total consolidated installed capacity stood at 83.9GW as of
2Q end.
TPWR
missed our revenue/EBITDA/APAT estimates by 15.3%/11.6%/12.6%, largely attributable to the
Mundra plant shutdown in 2Q, which offset the stronger performance at Odisha distribution and the solid ramp-
up at TP Solar on a YoY basis.
PWGR
reported standalone revenue, EBITDA, and adjusted PAT below our
estimates amid weaker-than-expected capitalization trends due to persistent RoW issues. EBITDA was hit by a
55% YoY spike in other expenses.
ACME Solar
reported an in-line EBITDA and a 13% beat on APAT, driven by
higher-than-expected other income. Revenue came in 3% above our estimate on account of an improved CUF of
24.1%.
IWL’s
deliveries were in line with our estimate, whereas revenue came in below our estimate by 8%.
EBITDA beat our estimate by 4% on account of higher EBITDA margin of 20% (our est. 18%).
SUEL
earnings beat
our expectations, with revenue exceeding our estimates by 39% on account of higher-than-expected deliveries
of 565MW (~55% higher than our estimates). EBITDA also beat our estimates by 71% due to a strong margin of
19%. The company reported PAT of INR12.7b, which included a deferred tax asset of INR7b.
Ratings and earnings revisions:
PWGR –
We have downgraded PWGR to Neutral and cut our FY26E/FY27E APAT
by 6%/4% due to the slower-than-expected pace of capitalization, with PWGR capitalizing INR45b in 1HFY26 vs.
FY26 guidance of INR220b.
SUEL –
We have raised our FY26E APAT by 8% due to a lower tax rate in 1HFY26.
However, TP was cut by 7% on account of a lower PE multiple of 30x (35x earlier).
NTPC –
We have cut FY26E
APAT by 9%, mainly due to a cut in EBITDA margin.
JSWE–
We have cut FY26E APAT by 14% to build in the
increased depreciation and finance costs arising from recent acquisitions to align with the current run rate.
Top picks:
ACME Solar, TPWR and JSWE.
Surprises:
SUEL and ACME Solar
Misses:
NTPC, PWGR, TPWR and JSWE
Guidance highlights:
PWGR:
Management reiterated its capex guidance of INR280b/INR350b/INR450b for FY26/FY27/FY28, with the
FY26 capex having a potential to rise to INR280-300b. Capitalization targets for FY27/28 are INR250b/INR280b.
However, the capitalization target for FY26 might be reduced to INR200b (from INR220b earlier) due to
persistent right-of-way (RoW) issues. The company participated in several BESS tenders but was not awarded
any contracts, though it remains committed to actively participating in upcoming tenders. The Ministry of Power
has announced a project in the Brahmaputra basin with a total investment opportunity of INR6.4t. The plan
involves 42GW of HVDC corridors with PSP integration of total ~11.1GW. This project is currently in the study
stage and is likely to follow the TBCB route. The Leh-Ladakh HVDC project had received a single bid, which was
86
November 2025
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
not found acceptable and the Government of India is evaluating the possibility of replacing the HVDC system
with an AC transmission alternative, estimated to cost ~300b. The project timeline should remain unchanged,
with commissioning targeted by 2029 under the proposed AC configuration.
JSWE:
Management has maintained its growth strategy of achieving 30GW of generation capacity and 40GWh of
energy storage by 2030. 12.5GW of the capacity under construction is tied to long-term PPAs and on completion
of these projects, JSWE’s capacity will nearly double to 26GW. The locked-in capacity for BESS stands at
29.4GWh. The battery assembly plant of 5GWh in Pune is expected to come online by 3QFY26. It has signed a
definitive agreement to acquire Tidong (150 MW hydro), which is expected to be commissioned in Oct’26. Of
150MW, 75MW is under PPA with UPPCL, and the rest is for the merchant market. The commissioning of the WB
Salboni plant is expected by 2030.
TPWR:
Capacity addition of ~700MW is targeted in 3Q and ~600MW in 4Q, predominantly from solar projects.
RE capacity is expected to surpass 7GW by FY26-end, with 2-2.5GW to be added annually thereafter. The
company plans a 10GW ingot-wafer facility for backward integration to serve both internal and third-party
requirements. Construction commenced on the 600MW Kholongchhu Hydro Power Project in Bhutan, in which
the company’s equity contribution is estimated at INR8.5b. The company also plans to invest in the upcoming
1,125MW Dorjilung Hydro Project, with a total project cost of INR130b and Tata Power’s equity contribution at
INR15.7b, for which the financial closure is expected by mid-FY27. The company’s discussions with the Gujarat
government to reach a long-term resolution for the Mundra SPPA are at advanced stages and expected to close
within a month. Management remains optimistic about the upcoming UP DISCOM privatization; awaiting bid
announcement.
IEX:
The company has filed an appeal against the market coupling order in the Appellate Tribunal for Electricity;
next hearing is scheduled for 28th Nov’25. After coupling, IEX would remain responsible for the settlement of all
volumes cleared on its platform. Management expects volume growth of 15-20% for the remainder of FY26 and
remains optimistic about sustaining historical growth trends. Guidelines for carbon credit certificate trading are
expected soon, with compliance targets already notified for major industrial entities. IEX holds a 47.5% equity
stake in IGX, which, as per PNGRB regulations, must be reduced to 25% by Dec’25, and the company has sought
a 1.5-year extension, citing slower growth and prevailing market challenges in the gas exchange segment.
PNGRB is expected to support the request.
ACME Solar:
ACME remains on track to meet its full-year target of INR120b of capex, subject to a delay of a
maximum of one quarter due to contingent transmission issues. 1GWh of BESS (merchant capacity) from
4QFY26 onward is expected to generate an annual EBITDA of INR1.7b, assuming an INR5/unit difference
between merchant power sale during peak hours and the cost of generation of the same. The 300MW ACME
Sikar project will operate under long-term open access after Dec’25 (it is currently operating under short-term
open access because of early commissioning by one quarter). Credit rating upgrades are likely to bring down
rates from 8.4% to about 8% for AA-rated assets under bank financing. Management does not foresee any risk of
project cancellation where PPAs are pending.
SUEL:
Management highlighted that the reduction of GST on wind turbines from 12% to 5% is expected to
significantly reduce capital costs and the levelized cost of energy, improving project viability. Carry-forward
losses, as per FY25 AR, were ~INR140b. DTAs have been recognized only for ~INR60b so far, with a further
potential for recognition of up to ~INR80b as profit certainty rises. Management reaffirmed its FY26 guidance of
60% YoY growth across revenue and EBITDA. Total order book of 6GW (as of 2Q end) is expected to be executed
in 18-24 months. SUEL is focusing on increasing the share of EPC business, with the mix targeted to reach 50:50
by FY28. SUEL is focusing on export potential, with the first export order expected early next year.
NTPC:
For the remainder of FY26, NTPC has guided for an addition of 800MW of thermal capacity, 4GW of
renewable capacity and two PSP units. Management highlighted its vision to take group capacity to 244GW by
2037. Medium-term capacity addition targets are guided at 9.8/9.6/10.5GW in FY26/27/28. For FY26, NTPC
Green’s total capex is expected to reach ~INR300b in FY26 and increase further to INR450-460b in FY27. NTPC’s
long-term estimates indicate a total capex requirement of INR7t by 2032 to meet their revised capacity addition
87
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 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
targets of 149GW by 2032 and 244GW by 2037. The planned additions during FY32-37 include 13GW of thermal,
0.3GW of hydro, 55-60GW of renewable energy, and 2.1GW of nuclear capacity. NTPC is developing 1,990MWh
of BESS capacity through the TBCB route, 1,520 MWh at colocated solar sites, and another 5,000 MWh at
existing thermal project locations, eligible for VGF of INR1.8m/MWh.
IWL:
Management remains confident of delivering the 1,200 MW execution target for FY26. IWL is in advanced
discussions with multiple customers, including the group IPP, to finalize framework agreements that would
secure 1GW+ of annual recurring orders (comprising 500-700MW from the group IPP and the balance from third
parties). The company is expanding its manufacturing footprint in South India by setting up a new blade and
tower manufacturing unit to be built on 70 acres of land allotted by the Karnataka Industrial Areas Development
Board. It involves investments of ~INR4b and is expected to become operational in 2026. The new nacelle & hub
manufacturing plant at Kalyangarh, Ahmedabad, is ramping up its operations. IGL’s O&M portfolio has scaled to
12.5GW (10GW wind; 2.5GW solar), including the recently acquired 6.5GW of operational wind O&M assets.
After statutory approvals, these acquisitions will be consolidated into IGL’s financials in FY27. Capex for FY26 is
guided at ~INR2b.
Exhibit 146: Key Snapshot
Particulars
Total generation growth (%)
Conv. Generation growth (%)
RE generation growth (%)
*1QFY26 compared with 1QFY25
2QFY26 compared with 2QFY25
All India Peak Demand (GW)
Capacity addition (GW)
Thermal
Nuclear
Hydro
Solar
Wind
Other RE
Total capacity addition
Total capacity (GW)
FY18
5.4
4.1
24.9
FY19
5.2
3.6
24.4
FY20
0.7
0.0
7.8
FY21
-0.6
-1.6
7.7
FY22
8.1
7.1
16.2
FY23
9.0
7.7
19.1
FY24
7.2
6.7
10.9
FY25 1QFY26* 2QFY26*
5.0
-1.7
2.6
4.0
-5.8
1.8
11.7
24.8
7.1
161
FY18
5.4
0.0
0.8
9.4
1.8
0.6
18.0
344.0
176
FY19
3.4
0.0
0.1
6.5
1.6
0.5
12.1
356.1
183
FY20
4.3
0.0
0.3
6.4
2.1
0.9
14.0
370.1
189
FY21
4.1
0.0
0.5
5.5
1.6
0.4
12.0
382.2
201
FY22
1.4
0.0
0.5
13.9
1.1
0.4
17.3
399.5
212
240
FY23
1.2
0.0
0.1
12.8
2.3
0.2
16.6
416.1
250
FY24
5.9
1.4
0.1
15.0
3.3
0.2
25.9
442.0
242
230
FY25
1HFY26
3.7
-2.2
0.0
0.6
0.8
2.4
23.8
21.7
4.2
3.1
0.7
0.1
33.3
25.7
475.2
500.9
Source: NPP, CEA, MOFSL
Exhibit 147: India’s power generation
India's Power generation (BU)
Addition in Power generation (BU)
18.6
-5.7
5.4
-2.8 1.6 0.6
-5.1 -5.6
-10.4
-1.2
-19.6
3.9
11.1
-7.1
12.5
5.6
12.5
1.3
-5.1 -2.6 -5.8 -4.2
-19.3
9.1 6.6
Source: NPP, CEA, MOFSL
November 2025
88
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Exhibit 148: Domestic power generation capacity (GW)
India's Power generation capacity (GW)
Source: NPP, MOFSL
Exhibit 149: India’s peak demand
Peak Demand (GW)
Source: CEA, MOFSL
Exhibit 150:
Domestic power supply (BUs)
Power supplied (BU)
Source: CEA, MOFSL
Exhibit 151: Domestic power generation growth
Total Generation including RE (BU)
9%
5%
4% 5%
9%
6%
6%
5% 5%
1%
-1%
% growth
8% 9%
Exhibit 152: Peak demand growth
Peak Demand (GW)
8%
7%
5%
Source: NPP, CEA, MOFSL
Source: CEA, MOFSL
November 2025
89
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
ANNEXURE:
MOFSL UNIVERSE (ACTUAL V/S EXPECTATIONS)
Sales (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ Exp. (%)
3,187.0 4.7 -0.2
-0.1
33.9
8.0
1.1
1.0
68.3
6.1
4.1
-2.4
95.9
9.3
9.9
-1.4
149.2 13.7 18.6
1.7
23.2
-5.8 -15.9
-9.1
19.5 -13.3 -7.5
-7.1
47.9
9.1
0.1
-1.7
37.7
14.2 6.9
3.8
23.7
11.1 0.1
2.1
20.0
64.9 12.2
9.3
35.8
23.0 8.0
3.2
61.7
44.8 22.4
1.5
27.8
22.6 11.8
0.7
41.8
-2.1 -7.4
-5.9
3.8
4.5
6.7
-0.5
121.3 15.9 26.6
2.1
174.6
1.2
6.4
0.5
334.2 21.3 -1.9
1.5
421.0 13.2 9.6
5.0
301.7
8.5 -0.1
1.1
27.6
18.8 10.7
6.0
72.5
7.2 -4.1
-4.3
11.4
23.6 34.4
28.7
892.1 -12.1 -13.7
-3.6
21.2
2.6
5.6
-0.7
119.1 29.0 18.1
0.1
1,112.3 13.6 12.1
-1.9
33.1
13.7 4.3
-0.9
11.5 110.6 362.6
61.7
57.6
25.8 30.5
9.6
31.7
27.2 9.1
10.2
66.3
10.9 37.6
-1.8
18.3
17.9 23.9
-12.4
60.9
19.1 21.3
4.0
54.2
31.0 7.5
4.8
16.0
34.3 11.1
11.5
679.8 10.4 6.8
-5.0
51.7
16.0 19.0
7.8
24.7
-5.3 15.1
-14.3
5.1
1.0 36.3
1.8
1.2
-48.4 12.2
-9.6
635.1 20.4 -6.1
4.7
58.5
26.4 -3.5
8.5
91.7
24.3 -10.8
3.5
22.1
13.0 -10.1
3.3
34.2
10.7 -6.0
-1.5
96.1
26.1 4.2
4.2
11.2
9.9
9.0
4.7
30.2
17.9 -9.9
2.7
15.3
24.1 -12.0
9.0
14.4
17.4 -7.9
6.8
22.3
9.6
8.0
5.5
43.0
15.5 -13.0
1.5
196.1 20.3 -7.8
6.1
EBITDA (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ Exp. (%)
319.8 -18.1 -15.2
-14.6
4.1
-7.9
5.0
0.8
10.2
16.3 17.6
6.5
11.6
14.2 19.9
1.3
30.5
15.1 23.0
4.0
5.0
-19.2 -23.8
-19.7
5.5
-11.9 -3.6
5.2
6.2
10.1 -3.5
-4.2
5.0
38.9 29.8
17.4
3.6
7.6
5.6
8.5
3.0
56.6 14.0
9.1
4.8
24.8 7.4
2.5
15.1
39.0 25.7
-2.7
3.6
56.0 11.8
-3.2
4.0
-18.1 -27.8
-26.9
1.2
9.9 14.5
6.0
18.2
20.3 32.0
1.1
24.3
10.1 11.2
3.9
48.6
23.1 -0.5
5.3
44.3
0.4 11.0
13.0
26.1
6.6
6.2
11.5
2.8
12.1 14.5
3.3
10.9
11.9 5.4
1.4
2.9
13.4 42.7
31.7
10.5 -91.1 -89.2
-86.5
2.8
12.4 11.8
6.3
15.1
39.7 19.4
-2.4
137.8 10.5 16.6
-0.5
5.0
-7.4 20.8
4.7
1.9
89.7
LP
32.1
17.0
22.1 36.7
17.7
6.9
44.4 11.4
20.7
15.6
-5.0 21.5
-16.1
3.0
172.5 93.0
19.0
4.3
34.4 22.9
0.7
4.5
28.3 4.4
0.5
2.1
30.0 12.7
14.6
68.1
7.0
7.7
-2.5
6.2
13.2 18.4
-3.8
1.7
-38.1 -23.6
-37.7
1.1
2.9 55.7
12.4
0.4
-47.4 9.9
-13.4
93.1
65.0 -21.0
9.7
8.2
90.9 6.0
36.8
17.6
80.9 -10.2
28.4
3.0
72.1 -12.1
30.9
7.0
60.4 -21.2
3.9
3.7
12.6 -4.8
14.5
0.8
LP
-1
24.4
4.5
57.3 -35.1
-2.8
2.1
133.3 -33.1
3.8
2.7
65.2 -17.1
39.8
3.9
24.0 -2.7
11.7
8.8
47.7 -28.8
-9.3
30.9
52.6 -29.8
1.0
PAT (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ
Exp. (%)
194.3 -12.4 -15.6
-16.5
2.1
-12.1
9.1
2.5
3.9
29.0 38.2
4.7
8.0
15.5 34.9
7.8
24.8
11.9 18.3
2.7
2.7
-24.1 -7.6
-27.8
3.2
-10.1 -6.8
3.8
5.5
10.8 -17.3
-1.5
1.9
52.3 61.7
31.2
2.1
9.5
5.0
8.6
0.9
47.9 20.5
5.7
2.3
12.0
0.4
-7.6
13.7
24.5 13.6
-5.0
3.2
6.1
1.9
-13.3
2.2
-25.4 -30.7
-32.0
0.7
10.2 11.8
2.2
13.9
15.7 23.7
-3.5
15.7
14.3 14.8
5.9
45.2
17.7 31.0
5.3
32.9
7.3
-11.3
-0.5
8.6
14.6 37.8
35.0
1.7
8.7
15.5
1.6
5.1
12.3
5.7
2.0
1.7
11.1 31.2
25.5
-18.6
PL
PL
PL
1.9
11.3 11.1
4.6
9.1
36.7 16.4
-8.0
96.5
16.8 18.4
3.4
4.1
-7.2
16.1
3.5
2.2
76.2 1076.5
31.9
12.9
17.9 32.7
15.1
6.4
41.5 14.8
21.2
16.7
10.9 20.6
-4.9
2.6
405.6 100.9
42.5
1.6
88.2 29.0
-5.8
2.0
51.1
-0.4
1.3
1.4
26.8 14.7
17.4
39.3
15.6
8.5
1.1
4.9
-7.1
14.6
-6.3
1.2
-39.7 -21.2
-32.9
0.9
0.4
41.9
7.7
0.5
-29.2 24.4
15.9
39.3
91.1 -22.5
11.0
3.2
37.3 -16.5
2.9
5.6
13.6 -28.5
35.0
0.9
LP
-24.3
139.0
2.4
329.1 -36.7
11.1
8.0
6.2
LP
3.5
-0.1
Loss
Loss
Loss
1.6
346.8 -50.5
-2.5
0.8
LP
-46.1
22.4
0.9
LP
-21.6
115.2
0.7
190.5 -13.6
55.2
2.9
215.1 -52.6
36.2
12.3
75.2 -45.4
-3.9
Company
Automobiles
Amara Raja Energy
Apollo Tyres
Ashok Leyland
Bajaj Auto
Balkrishna Inds
Bharat Forge
Bosch
CEAT
CIE Automotive
Craftsman Auto
Endurance Tech.
Eicher Motors
Escorts Kubota
Exide Inds.
Happy Forgings
Hero Motocorp
Hyundai Motor
Mahindra & Mahindra
Maruti Suzuki
Samvardhana Motherson
Motherson Wiring
MRF
Sona BLW Precis.
Tata Motors
Tube Investments
TVS Motor
Capital Goods
ABB India
Bharat Dynamics
Bharat Electronics
Cummins India
Hind.Aeronautics
Hitachi Energy
KEC International
Kalpataru Proj.
Kirloskar Oil
Larsen & Toubro
Siemens
Thermax
Triveni Turbine
Zen Technologies
Cement
ACC
Ambuja Cements
Birla Corporation
Dalmia Bharat
Grasim Industries
India Cements
J K Cements
JK Lakshmi Cem.
JSW Cement
Ramco Cements
Shree Cement
Ultratech Cement
November 2025
90
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Sales (INR b)
EBITDA (INR b)
PAT (INR b)
Gr (%)
Var. over
Gr (%)
Var. over
Gr (%)
Var. over
Sep-25 YoY QoQ Exp. (%) Sep-25 YoY QoQ Exp. (%) Sep-25 YoY QoQ
Exp. (%)
171.2
1.2
0.6
-3.5
32.4
4.3 -1.0
0.8
18.6
3.1
-1.9
2.1
3.9
-6.1 -4.0
-8.0
0.7
-4.5 -8.3
-9.6
0.4
-9.5 -13.1
-14.9
15.5
11.4 5.0
-1.7
2.7
10.2 13.6
-7.4
1.8
30.7 37.8
1.9
2.4
2.7
0.7
-6.1
0.9
-2.9 -12.8
-10.9
0.6
-5.6 -20.9
-17.0
19.0
-6.4
0.6
-1.1
2.0
-31.3 7.8
5.8
1.2
-38.9
5.8
3.1
0.9
-5.8
6.6
-4.1
0.3
-7.6
9.1
-4.7
0.4
23.8 96.2
44.7
6.0
0.2
1.5
-4.5
1.4
-10.3 9.4
5.9
1.1
-7.6
-3.1
4.2
13.3
24.8 3.8
6.1
1.1
-13.4 -10.8
-16.6
0.7
-21.5 -16.4
-19.3
7.6
46.3 4.6
0.9
2.5
129.3 19.0
42.2
1.5
152.2 26.6
66.3
3.2
-11.6 -4.7
-7.0
0.2
-43.6 -29.3
-32.6
0.2
-58.4
4.1
-11.6
18.7 -15.7 -1.5
5.4
5.4
-13.8 4.3
24.5
4.1
-19.5
2.3
25.4
36.4
6.3 -4.7
-6.3
8.0
43.5 -2.0
-2.4
4.2
87.0
-1.1
-2.3
38.8
-3.1
4.2
-7.6
5.4
-13.1 -17.3
-14.1
1.3
-35.2 -50.1
-40.0
5.5
-1.3
0.7
-13.4
1.8
33.3 7.7
5.1
1.3
21.6 14.4
3.2
938.8
4.2 -3.7
-1.4
214.2
3.1 -3.6
1.3
149.2
3.2
-4.8
0.0
85.3
6.3 -4.6
5.2
15.0
21.3 -7.5
11.3
10.2
16.5
-8.8
12.2
47.5
4.1
4.8
-3.6
9.5
21.8 26.1
9.2
6.6
23.2 25.9
7.3
15.2
-6.2
6.0
-0.4
4.7
-6.4
2.8
2.4
3.3
-7.9
2.1
1.9
31.9
5.4 -6.3
-0.5
5.9
6.4 -11.9
0.2
4.6
6.4
-11.8
0.8
8.0
-10.3 -11.7
-0.4
1.8
-28.7 -16.7
3.9
1.7
-26.7 -7.2
7.4
38.3
4.3
4.5
-2.7
7.3
-3.7
5.6
1.4
4.8
-2.9
3.1
-3.8
162.5
2.0 -1.6
-0.1
37.4
-1.4
0.6
2.5
25.0
-4.0
-1.1
-2.2
3.1
4.2
1.0
3.1
0.5
12.1 5.0
8.3
0.3
10.9
-3.1
4.8
195.0 -6.0 -9.3
-10.1
66.9
-1.0 -1.8
-3.0
50.6
1.3
-3.5
-4.0
7.4
0.3 -2.0
-2.7
1.2
-14.6 -4.7
-12.5
0.9
-16.4 -9.3
-13.0
27.7
31.2 12.2
6.5
3.1
35.0 16.6
8.1
1.6
10.4
-2.8
-1.5
34.8
30.7 6.8
1.9
5.6
7.3 -14.5
0.7
4.2
7.3
-16.7
-0.4
56.4
10.6 10.7
5.0
12.5
5.2 12.1
4.9
7.4
-4.6
14.9
1.7
11.5
1.3 22.7
-0.7
2.8
-2.0
7.0
-3.6
2.1
-1.0
9.3
-4.3
12.9
3.7 -2.0
-1.8
2.8
-0.4 -5.1
-6.3
1.9
0.2
-3.0
-5.1
35.5
9.9 -5.3
1.0
8.5
10.7 -9.6
-0.3
5.8
8.5
-13.8
-4.6
14.9
33.8 -0.8
7.2
2.4
45.6 2.4
11.8
1.4
69.1
-1.0
13.4
49.7
17.8 3.9
3.7
6.7
7.3 10.7
6.0
4.0
5.1
21.0
8.3
20.5
-3.0 -28.3
-5.8
1.3
-42.6 -58.1
-39.0
0.5
-64.5 -74.4
-60.9
31.7
11.5 24.4
4.3
6.7
32.5 61.9
19.5
4.9
47.6 66.9
30.2
49.0
1.9 -30.2
-0.6
11.5
-0.3 -42.6
-0.1
7.4
19.6 -43.7
10.9
184.9 10.4 -7.3
0.7
19.4
31.3 -0.5
2.7
13.3
27.4
-2.4
2.8
47.8
5.3 -12.4
0.3
4.4
16.9 -15.0
-3.4
3.2
18.9
-8.4
5.2
27.3
19.4 5.3
-0.5
2.7
19.8 4.4
-5.0
2.0
31.5
4.0
-3.1
64.8
17.8 9.7
-0.5
9.9
56.4 15.2
10.6
6.6
50.1 11.5
10.1
21.6
19.5 5.1
2.7
1.8
104.9 23.7
13.6
1.2
134.7 29.5
20.5
23.5 -10.4 -40.4
4.4
0.7
-56.6 -60.6
-33.1
0.3
-74.4 -75.6
-60.8
195.5 27.2 5.1
1.8
10.5
33.6 2.8
1.7
4.9
23.8
-2.7
-8.7
16.5
-2.2 -52.2
-18.1
0.9
-19.7 -64.4
-36.7
-0.3
PL
PL
PL
3.8
39.1 18.3
15.9
0.4
28.1 29.2
5.3
0.2
42.9 75.7
7.6
3.1
-20.2 11.6
-0.3
0.3
-1.4 24.5
3.0
0.1
-18.7 68.4
9.1
3.1
237.8 209.5
125.2
0.7
99.7 113.5
25.8
0.5
62.5 92.9
7.9
148.6 28.8 15.7
3.1
5.6
31.7 16.4
7.1
2.5
15.5 10.0
-3.1
9.1
58.4 34.6
-4.0
1.5
80.2 30.9
-4.1
1.2
101.7 62.7
6.4
11.5
37.6 21.4
7.5
1.2
62.4 33.0
25.1
0.6
76.8 28.8
12.5
4,476.5 6.9
7.5
1.3
1,864.1 2.4 -4.8
3.6
1,211.8 2.2
-0.3
4.4
938.1
3.1
0.4
2.4
702.7
2.0 -14.6
4.1
412.7 -4.7
-4.1
2.8
21.4
8.6
4.9
6.0
12.1
6.9 -7.8
7.6
5.6
-1.8
-3.4
13.4
137.4
1.9
1.4
4.4
104.1 -2.8 -9.6
0.6
50.9
-26.4 -12.3
-8.0
25.9 -12.2 -6.1
0.8
13.1 -29.4 -21.5
-7.4
1.1
-88.1 -69.9
-63.5
6.0
17.1 2.7
5.4
3.0
19.1 -7.0
13.7
1.8
18.3 17.0
29.6
7.7
-3.6 -1.5
3.7
2.4
-31.2 -23.6
10.5
0.2
87.4
LP
-21.9
25.0
5.4
6.8
7.9
16.4
5.0
5.6
10.5
9.6
-9.6
10.9
13.2
Company
Chemicals-Specialty
Alkyl Amines
Atul
Clean Science
Deepak Nitrite
Ellenbarrie Industrial
Fine Organic
Galaxy Surfactants
Navin Fluorine
NOCIL
P I Industries
SRF
Tata Chemicals
Vinati Organics
Consumer
Asian Paints
Britannia
Colgate
Dabur
Emami
Godrej Consumer
Hind. Unilever
Indigo Paints
ITC
Jyothy Labs
L T Foods
Marico
Nestle
P&G Hygiene
Page Industries
Pidilite Inds.
Radico Khaitan
Tata Consumer
United Breweries
United Spirits
Varun Beverages
Consumer Durables
Havells India
KEI Industries
Polycab India
R R Kabel
Voltas
EMS
Amber Enterp.
Avalon Tech
Cyient DLM
Data Pattern
Dixon Tech.
Kaynes Tech
Syrma SGS Tech.
Financials
Banks-Private
AU Small Finance
Axis Bank
Bandhan Bank
DCB Bank
Equitas Small Fin.
Federal Bank
November 2025
91
 Motilal Oswal Financial Services
India Strategy | Review 2QFY26
Sales (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ Exp. (%)
315.5
4.8
0.4
2.4
215.3
7.4 -0.5
1.8
51.1
6.8
3.6
2.1
44.1 -17.5 -5.0
0.3
73.1
4.1
0.7
-0.1
15.5
-4.0
4.7
2.1
899.1
1.8
2.7
4.4
119.5
2.9
4.5
8.8
91.4
-1.9
1.5
1.9
65.5
5.8
3.0
3.5
104.7 -0.5 -1.0
-0.7
88.1
-2.6 -3.3
1.6
429.8
3.3
4.7
5.9
2,033.9 8.8 14.6
-0.7
192.9 13.9 29.7
0.7
56.5
12.5 10.0
15.7
123.0
1.8 37.3
-7.7
1,264.8 5.5
6.1
-2.4
90.9
17.5 42.1
1.4
14.2
17.2 16.6
-1.1
250.8 22.9 40.8
6.7
40.8
10.2 3.6
2.5
521.6 16.2 3.8
1.4
2.9
19.2 3.8
1.7
107.8 22.0 5.5
0.3
9.6
34.1 7.9
2.1
4.0
19.1 11.5
7.6
33.8
24.5 6.1
1.4
9.3
0.2
3.2
0.9
5.9
14.9 2.7
-1.7
2.5
-38.2 -9.7
-7.5
21.9
19.6 4.8
1.8
2.1
31.8 6.4
-1.5
14.4
7.4 11.1
0.5
24.0
10.3 5.5
1.4
20.4
3.3 -1.3
2.3
21.1
16.6 4.9
0.0
13.8 -15.9 -0.3
2.2
2.5
29.0 4.0
0.9
39.9
58.5 14.9
15.9
52.9
20.0 -3.3
1.3
7.5
13.4 0.6
-0.7
7.6
36.7 19.6
12.6
54.5
9.6 -2.2
-4.2
1.9
14.2 4.1
2.6
60.3
10.3 4.4
-0.4
1.0
-70.0 -19.4
-1.7
83.7
12.5 8.3
3.3
7.6
29.6 15.2
4.1
4.6
8.7
3.1
0.3
3.0
22.7 8.5
2.3
8.4
-14.5 5.0
0.1
10.7
44.2 11.5
5.3
3.8
3.2
6.4
2.3
3.2
-1.0 23.2
6.9
10.3
15.8 6.1
1.6
3.1
10.3 12.8
1.7
3.7
31.0 0.3
-0.5
EBITDA (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ Exp. (%)
279.2 13.0 -21.9
10.0
173.0
3.4 -7.7
-0.2
18.8
-4.2 -16.0
-2.6
20.5 -43.1 -20.3
5.7
52.7
3.3 -5.3
-1.1
7.3
-19.9 3.6
5.9
623.5 -5.7 -5.7
3.8
75.8 -20.1 -8.0
6.0
85.9
12.2 0.4
10.9
48.4
2.3
1.4
1.3
72.3
5.5
2.1
3.9
68.1 -16.0 -1.4
5.1
273.1 -6.8 -10.6
1.4
65.1
8.8 55.7
10.3
10.1
7.8 25.0
-1.3
-1.8
Loss Loss
Loss
5.9
1.0 29.5
2.7
31.7
7.7 62.9
15.7
6.4
24.8 90.7
7.2
-1.8
Loss Loss
Loss
16.6
14.5 52.3
5.1
-2.0
Loss
PL
Loss
428.8 15.9 9.1
1.3
2.2
12.5 15.1
7.0
88.7
21.4 4.6
0.2
8.8
23.8 10.6
4.2
3.3
16.3 10.1
5.2
24.6
27.9 1.9
0.5
6.9
3.4
6.4
3.5
4.3
13.9 7.5
0.7
0.9
-68.6 2.8
-11.2
15.3
24.4 9.1
5.2
1.9
49.5 12.1
4.9
10.6
23.9 21.7
14.9
16.3
2.7
3.7
-2.3
18.7
7.5 -1.0
4.7
15.0
25.3 10.8
3.8
6.7
-35.0 1.6
4.2
1.6
22.6 1.6
-0.8
32.7
70.5 17.1
21.9
57.8
8.5 19.7
-8.6
6.5
15.6 2.3
0.2
3.9
36.1 19.1
17.8
56.9
16.2 13.1
-0.3
1.4
3.1 -1.9
-4.1
44.4
11.5 5.9
0.7
-0.7
PL
Loss
Loss
44.1
8.2 10.7
4.4
3.6
25.4 16.7
7.2
2.8
12.8 6.2
2.9
1.4
32.1 7.6
0.3
2.9
-48.6 78.7
6.0
6.9
77.9 10.5
9.7
1.7
-1.5
8.6
1.3
1.8
-11.1 36.2
13.9
8.0
13.8 3.6
0.1
1.4
7.2 19.2
4.7
2.4
35.8 0.8
2.2
PAT (INR b)
Gr (%)
Var. over
Sep-25 YoY QoQ
Exp. (%)
186.4 10.8
2.7
11.4
123.6
5.2
-3.2
3.5
3.5
75.5 -23.8
2.4
-4.4
PL
PL
PL
32.5
-2.7
-0.9
-0.5
1.8
-19.8 -10.9
-5.1
385.3 -2.0
3.5
5.5
48.1
-8.2
5.9
12.0
47.7
18.9
0.5
12.2
30.2
11.5
1.5
2.8
49.0
13.9 192.8
2.5
42.5
-10.0
3.2
20.4
167.7
-8.5 -12.5
0.3
121.4 24.0
-9.6
17.2
4.5
3.3
-18.2
-5.9
8.2
18.1
9.7
16.9
3.0
18.9
-0.9
-0.2
100.5 31.9
-8.5
24.3
0.1
-95.7 -93.0
-96.1
-0.4
PL
Loss
PL
4.9
-6.6 -16.8
-9.1
0.5
-50.7
-79
0.4
256.6 13.1
5.6
0.3
1.6
10.8 17.7
7.6
49.5
23.3
3.8
1.2
6.4
17.8 10.2
3.6
2.5
18.9 12.3
5.4
11.6
20.0
1.7
2.0
1.3
-32.4 109.0
37.9
2.9
6.8
7.4
0.9
-0.2
Loss
Loss
PL
5.8
-1.6
2.4
2.5
1.3
43.0 10.9
2.2
3.8
LP
61.3
27.1
7.3
5.5
4.9
1.4
13.5
1.9
-0.4
2.4
5.7
54.1
7.5
13.3
2.2
-62.0 64.1
12.0
0.9
17.1
6.9
4.0
23.5
87.4 14.6
22.9
44.6
2.1
-0.9
-16.6
5.8
-70.3
9.0
7.0
0.7
LP
18.5
-0.2
44.3
10.5
-0.6
0.0
1.1
-5.0
-0.9
-1.8
23.1
11.4
6.9
5.3
-2.5
Loss
Loss
Loss
35.8
3.4
-0.3
3.5
3.2
27.7
9.9
4.1
2.4
-0.4 -12.9
-3.3
1.0
31.0
6.4
-1.0
2.1
-50.0 84.9
3.2
5.6
61.5
5.3
9.6
1.1
-5.7
5.5
-2.6
1.4
-13.6 36.6
17.9
7.2
24.6
-3.9
8.9
0.9
4.5
20.8
2.5
2.0
28.5
-2.8
0.6
Company
HDFC Bank
ICICI Bank
IDFC First Bank
IndusInd Bank
Kotak Mahindra Bank
RBL Bank
Banks-PSU
Bank of Baroda
Canara Bank
Indian Bank
Punjab National Bank
Union Bank
State Bank
Insurance
HDFC Life Insur.
ICICI Lombard
ICICI Pru Life
Life Insurance Corp.
Max Financial
Niva Bupa Health
SBI Life Insurance
Star Health
NBFC - Lending
AAVAS Financiers
Bajaj Finance
Bajaj Housing
Can Fin Homes
Chola. Inv & Fin.
CreditAccess
Five-Star Business
Fusion Finance
HDB Financial
Home First Fin.
IIFL Finance
L&T Finance
LIC Housing Fin
M & M Financial
Manappuram Finance
MAS Financial
Muthoot Finance
PFC
PNB Housing
Poonawalla Fincorp
REC
Repco Home Fin
Shriram Finance
Spandana Sphoorty
NBFC - Non Lending
360 ONE WAM
Aditya Birla AMC
Anand Rathi Wealth
Angel One
BSE
Cams Services
CDSL
HDFC AMC
KFin Technologies
MCX
November 2025
92