Every week I analyze a company's fundamentals as part of my research work. My goal is to understand what drives their consistent performance. This is an educational post to understand the business and not a recommendation to buy the stock.

This week, Let’s explore the business & fundamentals of NESCO Ltd.

NSE:NESCO

Performance Chart

Quality Chart

Peer Group

Their Road to Consistency

1. Overview and Business Model

• Nesco was founded in 1939 as an engineering firm. It entered realty in 1986, launched the Bombay Exhibition Centre in 1992, and rebranded to Nesco Limited in 2001.

• Their IT Park licenses office space to global MNCs. Combined chargeable area is 16.55 lakh sq ft. Revenue in FY25 was ₹366 crore, up 15% YOY. The backbone of the business.

• The Bombay Exhibition Centre is India’s largest private-sector exhibition venue. It hosted 100+ exhibitions in FY24-25 and earned ₹174 crore in FY25.

• Nesco Foods serves 25,000+ campus employees and millions of exhibition visitors daily. Revenue grew to ₹115 crore in FY25 and accelerated 136% YoY in H1 FY26.

• Indabrator, the engineering arm, manufactures shot-blasting and surface preparation equipment across two Gujarat plants. Revenue in FY24-25 was ₹50 crore. Government clients include Railways and Defence.

• Nesco Events generated ₹26 crore in FY25, up 55.7% YOY. It hosted 41 events, including Bryan Adams, SunBurn Arena, and South Side Story. A fast-growing experiential vertical.

• Total Revenue grew from ₹382 crore in FY22 to ₹845 crore in FY25. That is a 3-year CAGR of 30.3%.

2. Land Moat

• The campus sits directly on the Western Express Highway. Mumbai Metro Line 7 station is steps from the gate. Goregaon railway station is under 2 km away. Ram Mandir station is under 1 km.

• Despite operating two large office towers and six exhibition halls, only 14% of the available Floor Space Index has been consumed. 86% of the land’s full development potential is still untouched.

• The proposed Tower 2 will use 28% of the total FSI. After Tower 2 is complete, 58% of FSI still remains available for future development.

• Tower 2 alone is projected to span approximately 5.01 million sq ft of total constructed area. The IT Park post-Tower 2 will offer around 2.25 million sq ft of chargeable office space.

• By owning the land outright, Nesco captures 100% of the development margin that would otherwise go to external builders.

• Two East-West corridors, the completed Jogeshwari-Vikhroli Link Road and the proposed Goregaon-Mulund Link Road, both lie within 1 km of the campus. Proximity to airports is an added benefit.

• The campus generates 2 million+ footfall annually from office workers and exhibition visitors combined. Traffic density of this scale in commercial Mumbai is rare.

3. Premium Realty Engine

• Tower 3 hosts 13 clients, including MSCI, HSBC, PwC, Ericsson, and LucasFilms. All 44 leasable units are fully contracted at ₹179 per sq ft per month.

• Tower 4 hosts 12 clients, including KPMG, BlackRock, ISS Governance, and Apollo Financials. All 39 leasable units across 103,380 sq mtrs are contracted at ₹173 psf/pm.

• Both towers maintained 100% occupancy throughout FY25 and into FY26. The tenant Net Promoter Score exceeds 80%.

• IT Park income from operations in FY25 was ₹366 crore, growing 15% YOY. In H1 FY26, it reached ₹198 crore, up 11.5% over the prior-year period.

• The campus transitioned to 100% renewable energy for IT Park operations in FY24-25. From April 2025, green power extends to exhibitions, kitchens, events, and the head office. This directly supports tenants’ Scope 3 emissions reporting.

• Each tower offers amenities like gymnasium, futsal courts, coffee shops, salons, and conference rooms. For employers attracting talent, campus quality affects retention. Nesco’s campus keeps 25,000+ employees engaged and productive every day.

• The IT Park holds ISO 45001:2018 certification for occupational health and safety and FSSAI recognition as an Eat Right Campus. Large global tenants run their own vendor audits. Certified campuses pass faster and remain on the preferred supplier list.

4. Exhibition Market Dominance

• BEC earned ₹174 crore in FY25. In H1 FY26, it generated ₹101 crore, up 25% over the corresponding H1 of FY24-25. Revenue momentum is building.

• The venue has six halls ranging from 4,664 to 19,143 sq mtrs. The newly commissioned Hall 6 at 15,443 sq mtrs is pillar-free. Hall 4 is also pillar-free. Pillar-free design is critical for large machinery and automotive exhibitions.

• Hall 6 was commissioned in FY24-25, meaningfully expanding total indoor capacity. New exhibition space in Mumbai typically gets absorbed within two to three event cycles given current demand.

• Utilization stands at 44% of days and 33% of sq mtrs. Significant headroom remains without any new construction. Rate optimization and denser calendar scheduling are the next growth levers.

• Average realization is ₹244 per sq mtr per day. As BEC’s reputation among international organizers grows, pricing power increases. BEC is shifting from price-taker to price-setter in the Indian private exhibition market.

  

• The campus generates 2 million+ footfall annually. Every visitor is a potential revenue event across Nesco Foods, Nesco Events, and retail outlets.

• The BEC hosts high-profile government-organized national events attended by senior dignitaries. This level of prestige attracts marquee international organizers who want visibility alongside government-backed platforms.

• The venue operates 24x7 with a dedicated task force and backup power infrastructure. 1,000+ vehicle parking capacity is available on campus.

5. Hospitality Segment Growth

• The central kitchen is a 24,000+ sq ft facility with complete veg and non-veg segregation. It can produce 80,000 meals per day.

• Nesco Foods operates 9 restaurants with 3 more upcoming. It manages 8 owned brands and 50+ partnered brands. The Grande, a 20,000 sq ft banquet facility, can host 3 events simultaneously adjacent to Hall 2.

• The Tower 4 food court hosts brands including Social, Smoke House Deli, Bayroute, Hitchki, and Santé. Upcoming additions include Punjab Grill and Jamie Oliver Kitchen.

• In FY24-25, Nesco Foods hosted 150+ weddings and 193 corporate clients. It managed 55+ events across 14+ cities and 9 states.

• Nesco Events hosted 41 events in FY25, generating ₹26 crore, up 55.7% YOY. In H1 FY26 it generated ₹14 crore. Acts included Bryan Adams, SunBurn Arena, ArtBat, and KrishnaDas. Serious names.

• Restaurant and outlet revenue was ₹42 crore for full-year FY24-25 but ₹59 crore in H1 FY26 alone.

• The captive audience is a structural advantage no standalone hospitality company can manufacture. 25,000+ campus employees arrive daily. Millions of exhibition visitors come annually. Customer acquisition cost for Nesco Foods is effectively zero. Dream scenario for any marketer.

• The flywheel is self-reinforcing. Exhibitions require catering. Catering quality drives BEC repeat bookings. Food court footfall builds restaurant brands. Each vertical amplifies the others. This kind of integrated monetization is a moat that cannot be replicated easily.

6. Industrial Engineering Legacy

• Indabrator operates 1.4 lakh sq ft of manufacturing space across two Gujarat plants. Plant 1 in Karamsad handles foundry operations and abrasives. Plant 2 in Vishnoli manufactures equipment. Sales hubs operate from Mumbai, Delhi, Kolkata, and Chennai.

• Revenue in FY24-25 was ₹50 crore. Equipment contributed ₹28 crore, spares ₹12 crore, and abrasives ₹10 crore. In H1 FY26, it generated ₹18 crore. The spares and abrasives base provides recurring revenue even when new equipment orders soften.

• The division has completed 15,000+ customized installations across India. Annual Maintenance Contracts cover both Indabrator machines and third-party equipment.

• Government clients include Railways, Defence, and Space Research institutions. These clients have long procurement cycles but reliable payment records.

• Indabrator holds ISO 9001:2015 for quality, ISO 14001:2015 for environmental management, and ISO 45001:2018 for occupational health and safety.

• The Karamsad foundry operates its own chemical and physical testing laboratories for wear-resistant castings. In-house quality control reduces rejection rates and deepens client relationships.

• Air pollution control systems are a growing Indabrator offering, helping industrial clients comply with mandatory environmental norms.

7. Sustainability Moat

• The entire IT Park operated on 100% renewable energy in FY24-25. From April 2025, Nesco is extending green power to exhibitions, events, kitchens, and the head office. The entire 65-acre campus is transitioning to clean energy systematically.

• Tower 3 and Tower 4 hold LEED Platinum certification for both Core and Shell & Operations and Maintenance.

• The campus runs 4 Sewage Treatment Plants. Waste composting capacity is 240 kg per day. Water tap aerators deliver 70% water savings.

• Smart infrastructure includes IoT lighting, energy-efficient HVAC, solar systems, and motion-sensor lighting across the campus. These technologies reduce operating costs for both the company and its tenants.

• ESG risks are formally overseen by a Board-level Risk Committee. ESG is integrated into the company’s risk management framework.

• Indabrator holds ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. The IT Park separately holds ISO 45001:2018 for occupational health and safety. Zero fatalities and LTIFR of 0 are recorded across the campus. Safety at scale, across all verticals.

• Nesco was certified Great Place to Work from December 2024 to December 2025. This attracts better talent for facility management and hospitality. Talent quality directly affects tenant satisfaction. An NPS above 80% among institutional MNC tenants is great.

• An ESG Roadmap 2030 is in progress, focused on sustainability, inclusivity, and transparency.

8. Massive Expansion Pipeline

• The IOD for Tower 2 has been received from BMC. Tower 2 will span approximately 5.01 million sq ft of total constructed area. Post-Tower 2, the IT Park will offer around 2.25 million sq ft of total chargeable premium office space.

• After Tower 2 is built, 58% of total available FSI will still remain untouched. The company has runway for at least two more major development cycles on the same land parcel. Each cycle requires zero land cost.

• A premium hotel is planned within the campus. It will have 732 premium rooms and suites. Additionally, 172 serviced apartments will be included. Exhibition visitors currently scatter to nearby hotels. That revenue will soon remain on campus.

• The proposed hotel will offer state-of-the-art conference and banquet facilities, wellness amenities, world-class dining, and premium short and medium-stay accommodation. Everything an MNC executive or international organizer would want.

• Nesco was awarded 3 tenders comprising 11 Wayside Amenity sites across express highways by National Highways Logistics Management Limited. Estimated total capex is approximately ₹400 crore. An entirely new income stream, and first-mover advantage in a fast-growing segment.

• The three corridors are: Hyderabad-Visakhapatnam Expressway with 4 sites where possession has been taken, Bengaluru-Chennai Expressway with 1 site proceeding after feasibility review, and Raipur-Visakhapatnam Expressway with 4 sites where possession has been taken. 8 sites already in hand.

• Wayside Amenities will include fuel stations, food courts, quick-service restaurants, convenience retail, parking bays, and vehicle repair services. This applies Nesco’s existing food and hospitality expertise directly to India’s booming expressway network.

• Nesco Retail Private Limited, a wholly owned subsidiary, was incorporated in February 2025 to manage highway retail projects.

• The hotel, Tower 2, and Wayside Amenities together could materially transform Nesco’s revenue profile by FY30. Each is funded from internal cash. No equity dilution, no debt.

9. Risks and Red Flags

• Almost all core revenue originates from one 65-acre campus in Goregaon. Any major disruption, whether from a natural disaster, infrastructure change, or regulatory action in that locality, could interrupt the majority of revenue at once. Single-location concentration is the primary structural risk.

• In Q3 FY26, operating margin fell to approximately 50.82%, down from above 60% in prior periods. Total expenses surged 48.29% YOY. Employee costs jumped 46% and finance costs rose 249% despite zero-debt status. Margin compression over multiple quarters would be a serious warning sign.

• The Jio World Convention Centre in BKC is a well-funded new entrant in Mumbai’s premium exhibition market. It could attract international organizers seeking a BKC address or newer infrastructure. Direct competition for marquee trade shows.

• The realty segment is exposed to the hybrid work model. If global MNCs reduce physical footprints materially, demand for Grade-A office space could soften at lease renewal time. Current 100% occupancy looks comfortable. The next renewal cycle is the real stress test.

• The Wayside Amenities project involves execution in geographic locations and operational models that are entirely new to Nesco. Highway retail depends on traffic volumes, local regulatory approvals, and consumer patterns that differ from a managed urban campus.

• A 2016 land dispute with the Slum Rehabilitation Authority and the Municipal Corporation of Greater Mumbai involved a 1,512 sq mtr parcel. The Bombay High Court ruled in Nesco’s favour in October 2025. But land-related regulatory risk in Mumbai is a constant.

• Multiple senior managerial personnel resigned in early 2025. Management continuity during an aggressive expansion phase is operationally critical.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 J Kumar Infra wins orders worth ~₹2,480 Cr from Mumbai Metro Rail Corporation and MCGM across metro and civic infrastructure verticals. This adds to an order book of ~₹19,200 Cr as of Q3FY26.

🟢 Patel Engineering declared L1 for the Lower Arun Hydro-Electric Project (669 MW, Package 2) in Nepal, valued at ₹1,593 Cr.

🟢 Coforge completed the $2.35B acquisition of Encora, funded via a $550M three-year loan at 4.6% fixed, creating a combined entity targeting a ~$2.5B annual run rate. FY27 will capture 11 months of Encora Revenue.

🟢 Unimech Aerospace signed definitive agreements to acquire Hobel Bellows for up to ₹450 Cr, expanding from precision machined components into metallic bellows and engineered assemblies. Hobel reported ~₹124 Cr revenue in FY26 with 90% export orientation across the UK, US, Singapore and China.

🟢 Dynamatic Technologies’ Dynauton Systems division signed an MOU with Germany’s Aerodata AG to co-develop unmanned ISR solutions using the AeroForce X MALE UAS with up to 40 hours endurance. The ITAR-free platform design enables exports without US regulatory constraints, a significant edge in the global defence market.

🔴 Infosys issued FY27 guidance of 1.5%-3.5% constant currency revenue growth and 20%-22% operating margins. Q4 FY26 large deal TCV stood at $3.2B. The conservative guidance reflects tariff-driven uncertainty in US enterprise spending and a Daimler ramp-down headwind. Infosys management noted the European auto sector is under pressure, with sequential deal wins lower due to a $1B+ base deal from the prior quarter that elevated the comparison. German auto clients face dual headwinds from US tariffs and EV transition costs, making near-term deal recovery uncertain.

🔴 JLR is recalling 170,169 vehicles in the US due to DC-DC converter failure that can cause complete loss of drive power across Range Rover, Discovery, Range Rover Sport, and Defender models. No remedy has been developed yet.

🟢 Cipla received USFDA final approval for the first AB-rated generic of Ventolin HFA, targeting the ~$1.5B US albuterol market. AB-rated status enables direct pharmacist substitution for the brand, giving Cipla a first-mover edge over Teva and Lupin, which have non-AB-rated versions on shelf.

🟢 AC sales over the past two weeks rose 20-25% YOY, benefiting Voltas and Blue Star. Voltas targets 25% volume growth this season. Blue Star guides 15% for FY27.

🟢 India is weighing a stricter AI governance framework with the six-member TPEC constituted on April 13. The committee chaired by MeitY Secretary S. Krishnan includes IIT Madras, IIT Gandhinagar, Nasscom, DSCI and MAIT, signalling a broad regulatory mandate.

🟢 India’s Finance Ministry called an urgent meeting with bank CEOs over AI-driven cyber risk concerns from Anthropic’s Claude Mythos Preview. The model demonstrated ability to identify zero-day vulnerabilities, including a 27-year-old OpenBSD exploit. Raises systemic concerns for financial infrastructure.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Bharat Electronics received orders worth ₹569 Cr covering avionics, EW systems, high energy laser, communication equipment, and tank subsystems. BEL closed FY26 with a total order inflow of ₹30,000 Cr.

🟢 L&T’s subsidiary L&T Energy GreenTech signed a long-term take-or-pay supply agreement with Japan’s ITOCHU for 300,000 tonnes of green ammonia annually from its upcoming Kandla, Gujarat facility.

🟢 Eveready commissioned India's only operating alkaline battery facility in Jammu with a ₹180 Cr investment (not ₹200 Cr), adding 360 million units of annual production capacity (not 456 million). The alkaline battery market in India is growing at 25% annually, and this plant eliminates Eveready's dependence on imports, potentially improving EBITDA margins by 8 to 10%.

🟢 Stovekraft is entering its next growth phase driven by electric cooking appliances, reporting a 4x surge in average weekly induction cooktop sales on e-commerce platforms. India’s induction cooktop market is projected to grow at a 9% CAGR through 2030, with e-commerce now accounting for over 35% of small appliance sales.

🟢 Transport Minister Gadkari pitched for flex fuel vehicles capable of running up to E100 to curb oil imports, benefiting Balrampur Chini, Triveni Engineering, and Dalmia Bharat Sugar. India's ethanol blending with petrol has already reached 19 to 20%, saving an estimated ₹1 lakh Cr in annual foreign exchange outgo.

🟢 Mines department targets 39% revenue growth in FY27 with a ₹14,000 Cr revenue target, benefiting NMDC, Coal India, and Vedanta. India’s mining sector contributed roughly ₹10,070 Cr in royalties and levies in FY26. Accelerated auction timelines for mineral blocks are the primary lever driving the FY27 target.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 BEML secured a ₹590 Cr order from the Ministry of Defence for supply of trawl assemblies for T-72 and T-90 tanks. The DRDO-developed trawl system clears anti-tank mines with proximity magnetic fuses, a critical gap in armoured corps mobility.

🟢 RailTel Corporation of India secured an order worth ₹86.36 Cr from Municipal Corporation of Greater Mumbai for cloud services, with execution to be completed by June 5, 2029.

🟢 Reliance Industries and Essar are among the top bidders for 16 coalbed methane (CBM) blocks. India’s CBM reserves are estimated at over 2.6 trillion cubic metres, currently almost entirely undeveloped relative to shale gas leaders.

🔴 HCLTech CEO said performance came below expectations due to lower discretionary spend and delayed decision-making by clients, with reduction in discretionary spending seen particularly in telecom. Telecom vertical headwinds are sector-wide, with peers TCS and Infosys also flagging similar client caution on discretionary budgets.

🟢 HCLTech annualized advanced AI revenues crossed $620M in Q4FY26, with AI now integral to nearly all deals. Advanced AI revenue has scaled from over $100M quarterly in Q2FY26 to an annualized $620M run-rate.

🟢 Transformers and Rectifiers Ltd (TARIL) Chairman announced a new capex infusion of ₹600 Cr over the next 15 months. Phase 1 of the journey towards $1B revenue in 3 financial years has started.

🟢 Smartworks Coworking became India’s first listed flex space provider to cross 10 million sq. ft. of operational portfolio. India’s flex office stock stands at around 80 million sq. ft., with Smartworks now crossing the 10 million mark and consolidating among the top 3 operators.

🟢 Biocon received Health Canada approval for biosimilars Bosaya and Vevzuo (Denosumab), benefiting more than 2 million adults with osteoporosis and bone metastasis. Canada’s biosimilars market is growing at double digits annually.

🟢 Thangamayil Jewellery reported Akshaya Tritiya sales revenue of ₹279.27 Cr, up 75.87% YOY, with volume sales up 15.14% to 183.20 KG and non-gold revenue rising 61% to ₹17.99 Cr. Volume growth of 15% against value growth of 76% confirms that gold price inflation is driving a large share of the revenue surge.

🟢 The government is readying India Semiconductor Mission 2.0 by May with a proposed outlay of up to ₹1.2 lakh crore, with Finance Ministry approval expected soon. Inter-ministerial consultations are underway. ISM 1.0 attracted ₹1.6 lakh crore in investment commitments from 10 projects across 6 states, validating demand for the larger Phase 2 push.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Sterling and Wilson Renewable Energy (SWREL) wins new domestic orders worth ₹3,550 Cr anchored by Coal India’s 875 MW solar project in Bikaner as L1 bidder. FY26 total EPC order inflows of SWREL crossed ₹10,062 Cr beating the initial ₹10,000 Cr annual target. This is also SWREL's first order from Coal India marking entry into the PSU mining-to-renewables pivot segment.

🟢 TVS Motor signs a Memorandum of Understanding with Hyundai Motor Company to develop and locally manufacture electric 3-wheelers for India’s last-mile mobility market. Hyundai leads engineering and design while TVS handles production and sales. Mahindra Last Mile Mobility commands over 40% share in India’s electric 3-wheeler segment.

🔴 Tata Starbucks has hiked prices by 5-10% across its menu in response to rising coffee bean, milk, rental, and staff costs.

🔴 Mastek reduces EBITDA margin guidance from 17% to 16.5% due to increased competition. The company’s actual FY26 operating EBITDA came in at 15.8% for the full year.

🟢 Carysil targets quartz kitchen sink capacity of 1.25 million units per annum with a proposed ₹50 Cr investment to serve major US retail chains. Carysil is Asia’s only manufacturer using proprietary German Schock technology holding IKEA’s exclusive non-US quartz supply contract.

🔴 IRDAI is preparing draft regulations on insurance commissions. DFS Secretary M. Nagaraju has stated that higher insurance commissions are a concern for the government. IRDAI recently sought granular channel-wise and product-level commission data from all insurers signaling an imminent regulatory overhaul of distribution economics.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 NBCC (India) Limited emerges as highest bidder in e-auction for a commercial tower at Bharat Business Park, Sarojini Nagar, New Delhi, with total estimated investment of ₹1,374.45 Cr.

🟢 Mazagon Dock is finalizing contract negotiations with Thyssenkrupp Marine Systems for a 6 submarine project under Project 75(I). Defence Minister Rajnath Singh departs for Germany from April 21 on a 3-day visit. Deal size is approximately ₹70,000 to 75,000 Cr.

🟢 Zaggle Prepaid Ocean Services enters into a 3-year agreement with Federal Bank to provide employee expense management services. Zaggle now serves over 3,700 corporate clients and 3.7 million users, with a 48% revenue growth print in Q3 FY26.

🟢 Paytm converts ₹197 Cr outstanding debt in First Games Technology into equity, raising its stake from 55% to 82.6%. First Games had discontinued real money gaming operations. The equity conversion has no P&L impact as the investment was already fully impaired.

🟢 UltraTech Cement’s India capacity surpasses 200 MTPA with 3 new units commissioned across UP, Jharkhand, and AP; eyes 240 MTPA target. UltraTech crossed 200 MTPA a full year ahead of its original FY27 deadline, ranking it among the top 3 cement producers globally outside China.

🟢 Apollo Micro Systems is granted a lifetime arms manufacture licence by the Government of India, authorising manufacture of missiles, ATGMs, torpedoes, aerial bombs, and loitering munitions at its Hyderabad facilities. The licence allows production of up to 1,000 units per category annually, a first for a listed private-sector defence OEM in this weapon class.

🟢 Zen Technologies receives arms manufacturing licence from the Government of India for 12.7mm, 23mm, 30mm, and 40mm cannons, enhancing air defence and counter-drone capabilities. Zen already supplies hardkill counter-drone systems to the Army Air Defence College and holds a ₹120 Cr combat training node contract.

🟢 Max Healthcare plans to add 1,200 beds in FY27, expanding overall capacity to around 6,500 beds by end of FY27. A broader ₹5,000 Cr plan targets over 10,000 beds across India within 2 to 4 years, funded entirely through internal accruals.

🟢 Bajaj Consumer portfolio now contributes annual sales of ₹225 Cr and aspires to grow to ₹500 Cr over the next 3 years. The company’s Almond Drops commands an estimated 65% share in the light hair oil segment against Marico and Dabur.

🔴 India smartphone shipments fell 3% YoY in Q1 2026, marking the weakest quarter in six years, as memory cost inflation and weak entry-level demand weighed on volumes.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

Most retail traders are playing some of these games without ever asking one basic question: Is this a game I can actually win?

This article answers that. I will run each game through a two-filter test, show you which 4 games pass, and explain exactly why the rest are structured against you.

If you prefer watching this as a video, please find the link below. Otherwise, proceed to read this article.

The 20 Games You Can Play

Most Retail participants are playing one of these 20 games.

Some of these games have existed for decades. Some are made possible only by modern technology. But not all 20 are equal.

To identify which games you should actually play, you need a filter. Not gut feel. Not what your friend recommends. A proper filter with two hard conditions.

The Two-Filter Test

Every game you consider playing must pass the following two filters.

Filter 1 is positive expectancy over the long run. Over a large sample of trades, after accounting for all costs including bid-ask spread, slippage, brokerage, and transaction charges, your strategy must be profitable.

Filter 2 is no forced entry or forced exit. You must be able to exit on your own terms. Not because a clock ran out, not because a broker auto-squared your position at 3:20 PM, not because a margin call wiped you out before your thesis could play out.

Both filters must pass. Miss even one and the game is not for you.

Why Intraday Trading and Scalping Are Weak Hands

Let us start with the most popular game that retail traders play: intraday equity trading.

Both filters fail here.

On Filter 1, SEBI data for FY24 shows 71.5% of intraday equity traders lost money. Among traders who consistently do intraday trading for 500 days or more, 97% are net losers. The positive expectancy simply does not exist after costs.

The structural reason for this is important to understand. A significant amount of intraday volume on Indian exchanges is executed by algorithms. HFT firms and market makers have sub-millisecond execution and co-location advantages inside the exchange itself. They are physically closer to the matching engine than any retail trader can ever be.

On Filter 2, intraday trading fails completely. Your broker will auto-square off positions between 3:20 and 3:25 PM regardless of whether your trade is in profit or loss. If you are trading futures intraday, a margin call can force you out mid-trade. You have no control over your exit.

You might have a green day occasionally. Over a long run, the expectancy does not hold up and the forced exits make it worse.

Strong Hand #1: Investing

Now for the games you should actually play.

Investing passes both filters cleanly.

On Filter 1, the Nifty 50 TRI has delivered a 13.5% CAGR over 25 years. This is before stock selection, before any active strategy. Just being in the market has positive expectancy. Add a disciplined stock selection framework and that expectancy improves further.

On Filter 2, no one can force you out of a position. Once you hold a stock, it is legally yours. No expiry, no margin call, no auto-squareoff. You exit only when you choose to.

The edge in this game is time in the market and compounding. The dominant players are FIIs, DIIs, mutual funds, and long-term retail investors. Retail can replicate the one thing that creates an edge here: patience.

Strong Hand #2: Positional Trading

Positional trading is buying a stock and holding it for a few weeks to a few months.

On Filter 1, this game has positive expectancy. The momentum factor is well-documented across decades of market research. Multiple multi-factor models have also proven to perform well over longer time horizons.

On Filter 2, there are no forced exits as long as you are trading unleveraged. You own the stock outright. No expiry date, no margin call. Your system triggers the exit, not your broker.

The edge here is trend identification and thesis discipline. Execution matters less than strategy. The dominant players are systematic funds and disciplined, experienced retail traders. That last category is one you can belong to.

Strong Hand #3: Hedged Options Selling

One of the popular ways of hedged option selling is executing a spread. For example, selling a put option while simultaneously buying a put option at a lower strike as a hedge. The loss is defined upfront. There is no unlimited downside like naked options selling.

The primary purpose here is to capture theta decay. The position earns money as time passes, assuming the market does not move aggressively against you.

On Filter 1, this strategy has positive expectancy when executed systematically. The theta you collect must exceed the net cost of the spread over time. When structured properly, it does.

On Filter 2, there are no forced exits. Because the loss is already capped by the hedge, there are no margin call risks. You can hold the position till expiry without any forced intervention.

One important condition: this game should be played by pledging your long-term investments, not by putting fresh cash at risk. At least 70% of your portfolio should be in long-term holdings first. Then you pledge those holdings and deploy hedged options selling on the margin.

Strong Hand #4: Portfolio Hedging

Portfolio hedging applies to retail investors who have built a portfolio of at least 15 to 20 lakhs.

By putting systematic hedges in place, you can protect your portfolio from large drawdowns during crashes.

Good hedges limit drawdowns to manageable levels during 30 to 40% market crashes. Some hedging structures are what I call zero-loss strategies, where the cost of the hedge is recovered regardless of market direction. More advanced setups can be structured so both the portfolio and the hedge are profitable over time.

The Scorecard

The table below summarizes all games. 4 games are strong hands that you should be playing. 3 are marginal. 13 are weak hands that you should avoid as Retail.

A few notes on the marginal zone.

Swing trading, which is holding for a few days, has some edge on paper. But in practice, if you execute 300 to 400 trades a year as swing traders typically do, transaction costs consume a large portion of the theoretical edge. Investing and positional trading achieve better outcomes with far fewer trades.

Positional options buying can work in a discretionary manner, specifically when you identify that a particular trend is strong enough to justify the options premium cost. Doing it systematically, week after week, does not hold up. The expectancy drops when done frequently.

IPO investing has some edge during certain market cycles but the dominant players are institutions and HNIs who get preferential allocations. Retail gets the scraps.

What You Should Play

Four games. That is it.

1. Invest in quality businesses and hold for the long term. Index Investing with proper Asset Allocation should do.

2. Add positional trading once you have a systematic approach to trend identification.

3. Layer in hedged options selling by pledging your investments once your portfolio is meaningful.

4. Add portfolio hedging once you cross 15 to 20 lakhs.

Everything else, intraday trading, BTST, scalping, margin trading, futures, weekly options buying, naked options selling, is either structurally stacked against you or dominated by players you cannot compete with.

The broker is the guaranteed winner in the weak hand games. They charge interest on leveraged positions, collect brokerage on every trade, and are probably making market and extracting value from the other side of your trades.

Stick to the 4 strong hands. That is enough to do very well over time.

I give you a Flexi-Wealth System and In-Depth Research to build a Life-Long Portfolio that works across market cycles.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.

Every week I analyze a company's fundamentals as part of my research work. My goal is to understand what drives their consistent performance. This is an educational post to understand the business and not a recommendation to buy the stock.

This week, Let’s explore the business & fundamentals of Lumax Auto Technologies Ltd. NSE: LUMAXTECH

Performance Chart

Quality Chart

Their Road to Consistency

1. Overview and Business Model

• Lumax was founded in 1981. From a single lighting plant in 2005, it now operates 30 facilities across India. It is part of the Lumax group which has a 8-decade legacy.

• Their Products span advanced plastics, lighting, transmission mechanisms, electronics, and alternate fuel systems. The business model is built on supplying complex systems, not standalone parts. Complexity commands better margins.

  

• Passenger vehicles contribute 53% of 9M FY26 revenue. Two-wheelers add 24% and aftermarket 10%. Commercial vehicles contribute 9%. This spread insulates the company from category-specific slowdowns. Balance is built into the structure.

• Content per vehicle for passenger cars has grown 5X in the last five years to ₹75,000 per vehicle. Two-wheelers now see ₹22,000 to ₹25,000 per vehicle, also up 5X. Premiumization is happening.

• The company operates 30 plants across seven states with proximity to OEM clusters.

• Operating margins expanded from 7% in FY21 to 9.5% in FY25. Scaling and margin expansion happening together. That combination is worth noting.

2. Acquisitions Fueling Expansion

• Lumax acquired a 75% stake in IAC International Automotive India in March 2023 for an enterprise value of ₹587 crore. The phased entry enabled controlled integration.

• IAC India manufactures integrated cockpits and door panels for modern SUVs. These products raised Lumax’s content value per vehicle significantly.

• The IAC deal made Lumax the exclusive interior supplier for Mahindra’s BE6 and XEV 9e electric vehicles launched in late 2024.

• Lumax completed the 100% buyout of IAC India in May 2025 for ₹221 crore. Full ownership consolidates control in the interior systems segment.

• IAC India generated revenue of ₹1,123 crore in 9M FY26 with EBITDA of ₹202 crore and PAT of ₹92 crore. Its order book stands at ₹500 crore.

• In September 2024, Lumax acquired a 60% stake in Greenfuel Energy Solutions for ₹153 crore. Greenfuel supplies high-pressure systems for CNG and hydrogen vehicles. Entry into clean mobility.

• Greenfuel generated revenue of ₹270 crore in 9M FY26 with EBITDA of ₹51 crore and PAT of ₹35 crore. The order book stands at ₹180 crore.

• Greenfuel already supplied Maruti Suzuki and Tata Motors for their CNG models before the deal. Existing OEM relationships meant immediate revenue credibility.

• Management filters acquisition targets for profitability and low leverage. This discipline has kept the balance sheet from stretching despite three major deals.

• Lumax is pursuing a full merger of IAC India into the parent entity. The first motion is complete and the NCLT order is awaited.

3. Gear Shifter Market Control

• Lumax Mannoh Allied Technologies holds an 80% market share in passenger vehicle gear shifters in India. They supply almost every major Indian car brand.

• The product range covers manual, automatic, AMT, and CVT shifters with full local design and testing capabilities.

• In September 2023, Lumax launched a shift-by-wire gear shifter that replaces mechanical cables with electronic actuators. Interior layouts simplify and EV compatibility improves.

• The shift-by-wire system is designed specifically for electric and hybrid platforms. This keeps the shifter business relevant even as combustion engines shrink.

• A joint venture with Germany’s Jopp extends shifter expertise to commercial vehicles and off-highway machinery. Heavy-duty segments need entirely different engineering.

• Monostable e-shifters with haptic feedback are now the focus. These carry higher prices and attract premium car buyers.

• Mannoh’s current order book stands at ₹95 crore with customers including Maruti, Mahindra, Toyota, Tata, Honda, and Daimler. A blue-chip client list.

• The shifter division is a mature, profitable entity generating stable cash flows. This allows the group to fund newer bets in hydrogen storage and telematics.

4. Wide Client Base

• Mahindra accounts for 27% of 9M FY26 revenue, deepened through wins in interiors and lighting. IAC India was named Business Partner of the Year at M&M Vendor Conference in February 2025.

• Bajaj Auto contributes 13% of 9M FY26 consolidated revenue. Lumax is a single-source supplier for several of Bajaj’s motorcycle models. Single-source status means switching is operationally painful.

• Maruti Suzuki accounts for 9% of 9M FY26 revenue. Revenue is also spread across Tata, Honda, and Hyundai.

• The IAC acquisition introduced Volkswagen and Volvo Eicher into the Lumax client network. Premium and commercial vehicle relationships were previously absent from the group. Acquisition opened doors the sales team could not.

• TVS Motor Company and HMSI receive critical lighting and chassis components for high-volume commuter bikes.

• Management is actively diversifying IAC India’s revenue beyond Mahindra and Maruti. Discussions with other OEMs for integrated cabin solutions are underway.

• Lumax supplies four-wheel gear shift assemblies to Toyota and Renault-Nissan globally. Meeting Toyota’s quality standards is an excellent credential.

• Their ₹1,450 crore order book is 40% linked to future and clean mobility products. Revenue growth is coming from new contracts, not renewals. That signals genuine commercial momentum.

• The order book unwinds in stages: ₹472 crore in FY27, ₹643 crore in FY28, ₹335 crore in FY29. Four-year visibility is a strong signal for auto components business.

5. Electronics and Software Push

• SHIFT stands for Smart Hub for Innovation and Future Trends. The Bengaluru center was inaugurated in October 2025 as the group’s electronics research nucleus.

• The hub develops Advanced Driver Assistance Systems, which are becoming essential as safety regulations tighten in India. Regulatory-driven demand is more predictable now.

• The company now has over 500 engineers focused on innovation and IPR. Satellite offices in Japan and a representative office in China extend the research reach globally.

• The center is building over-the-air update architectures that allow car features to be modified post-purchase. This is the smartphone model applied to cars.

• Body Control Modules managing power windows, central locking, and other electronic functions are a dedicated strategic goal for the FY26-31 BRIDGE plan. Each addition raises unit complexity and price. Margin expansion through electronics content.

• Vehicle-to-vehicle and vehicle-to-infrastructure communication is another research pillar for the SHIFT team. Connected cars are still in early innings in India.

• Ambient lighting and smart digital display systems for premium cabins are also in development. SUV makers are actively seeking these differentiators. Aesthetic electronics carry strong pricing power.

• Lumax is targeting a Tier-0.5 supplier role by combining hardware supply with software integration. The BRIDGE plan names this as the defining goal for the decade.

6. Aftermarket Network Strength

• The aftermarket segment posted 16% YoY revenue growth in Q3 FY26 and 15% for 9M FY26.

• Over 575 channel partners operate across India, keeping Lumax products available in most automotive markets. Small-town mechanics can source Lumax parts.

• A field force of over 200 people supports 40,000 retailers and 30,000 mechanics directly.

• The product range is expanding from lighting into mechatronics, sensors, lubricants, and coolants. More categories per mechanic visit increases wallet capture.

• Eight decades of brand trust allow Lumax to charge a premium over generic unorganized competitors.

• Aftermarket margins are structurally higher than OEM margins because car companies do not control aftermarket pricing. This extra margin improves total group profitability.

7. Clean and Alternate Fuels

• Greenfuel makes high-pressure fuel delivery and storage systems for CNG vehicles. India’s CNG market is expanding as consumers seek cheaper alternatives to petrol and diesel.

• Greenfuel was already supplying Maruti Suzuki and Tata Motors for their CNG models before the acquisition.

• In 9M FY26, Greenfuel delivered ₹270 crore revenue, ₹51 crore EBITDA, and ₹35 crore PAT. The business is profitable and scaling faster than expected.

• The Greenfuel order book stands at ₹180 crore. Content value per CNG vehicle is ₹7,000 to ₹10,000 per unit.

• Greenfuel’s high-pressure storage technology applies to hydrogen platforms for trucks and buses. The company is already exploring this adjacency.

• The alternate fuels business model is asset-light, requiring limited capital to scale.

• Greenfuel’s fire and smoke suppression systems for public transport buses add a safety product category. Fleet operators face growing regulatory requirements.

• Combining Greenfuel’s technology with Lumax’s 27,500-point aftermarket network creates a potential category-leader in organized CNG conversion.

8. TPM and Robotic Manufacturing

• Lumax holds 14 JIPM Awards across its plants. In March 2025, the Bengaluru plant won the JIPM TPM Award specifically for Consistent Commitment.

• LCAT won the Gold award at the 50th International Convention on Quality Control Circles in Taiwan in 2025.

• Kuruli alone operates 62 robots for welding and surface treatment tasks. Robotic automation ensures the dimensional consistency that global OEMs demand.

• Ultrasonic welding and automatic bead laying are used for plastic module assembly. These ensure precise fitting and component longevity across vehicle lifespans.

• A 100% Poka Yoke system ensures no defective part leaves any factory floor. These mistake-proofing methods eliminate human error from critical production steps.

• SAP software has been deployed across all IAC India locations post-acquisition. Real-time production and inventory tracking across states is now operational.

• Plants are concentrated near Pune, Manesar, and Bangalore with 10 of 30 plants in Haryana alone. Just-in-time delivery is structurally enabled by geography.

9. Global JV Alliances

• Joint ventures split technology development risk between Lumax and global partners. Lumax gets the technology. Partners get the Indian market. A win-win.

• The technology agreement with Stanley of Japan has anchored the lighting business for decades. This relationship delivers the latest LED automotive lighting technologies to Indian platforms.

• Lumax Alps Alpine India is a 50% JV with a Japanese electronics company. It generated ₹89 crore revenue and ₹13 crore EBITDA in 9M FY26.

  

• Lumax Ituran is a 50% JV with Israel’s Ituran for telematics and connected vehicle services. It generated ₹26 crore revenue in 9M FY26 and validated tracking devices with Daimler India for over 15,000 commercial vehicles in 2024.

• Cornaglia from Italy is a 50% JV for air intake and emission control systems. It generated ₹129 crore revenue and ₹30 crore EBITDA in 9M FY26.

• FAE of Spain is an 84% owned subsidiary manufacturing oxygen sensors for two-wheeler fuel injection systems. Revenue was ₹54 crore in 9M FY26 with ₹5 crore EBITDA.

• Lumax Yokowo develops on-board antennas and vehicle communication products.

• The JV with Germany’s Jopp covers gear shift towers and sensors for commercial vehicles. It is in an investment phase with negative margins currently.

10. Risks and Red Flags

• Over 50% of revenue is linked to advanced plastics, making polymer prices a direct margin lever. Crude oil spikes compress margins because OEM cost pass-through is not immediate.

• Mahindra and Bajaj Auto together account for approximately 40% of consolidated 9M FY26 revenue. A major recall or sustained demand slump at either OEM delivers a measurable earnings impact.

• IAC India still depends heavily on Mahindra and Maruti for interior segment revenue. The parent has a diversified base, but the subsidiary does not yet.

• Total gross borrowings stand at approximately ₹961 crore as of September 2025. Net debt is only ₹153 crore after accounting for cash and liquid investments. Gross leverage is real. Net leverage is manageable.

• The 50% JV with Israel’s Ituran creates geopolitical exposure. Ongoing tensions in the region could delay technology transfers or product launches.

• Two early-stage JVs, Yokowo and Jopp, are currently loss-making with PAT of -₹2 crore each in 9M FY26. These are investments in future growth, but they dilute near-term profitability.

• The IAC India merger with LATL is in progress with the first motion complete and order awaited. The LAL merger second motion order is also awaited. Multiple simultaneous mergers add integration overhead and management bandwidth strain.

• Red Sea shipping disruptions have periodically raised logistics costs for imported electronic components. Global supply chain risks can compress margins in ways management cannot control.

• The clean and future mobility target of 20% revenue by FY31 is ambitious. It requires execution across Greenfuel, ADAS, and SDV verticals simultaneously.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 RVNL emerged as L1 bidder for an East Coast Railway project worth ₹967.93 Cr for construction of major bridges with open web steel girders on EPC mode. RVNL’s current order book exceeds ₹1 lakh crore.

🟢 VA Tech Wabag’s JV with Kuwait’s HEISCO submitted the lowest bid of ~$374 million (KWD 114 million) for the Doha SWRO Desalination Plant with 8-year O&M services, awaiting LOA. With multiple Gulf LOAs and L1 bids secured in FY26, Wabag’s total Middle East order pipeline now exceeds ₹6,000 crore.

🟢 Aditya Infotech signed an MoU for a proposed 50:50 manufacturing JV with Orient Cables (India) focused on CCTV, LAN, and electric cable production, targeting backward integration for its CP Plus product range.

🟢 Hindustan Copper’s team is set to visit Chile on April 18-19 to evaluate a proposed JV stake in 4 Codelco copper blocks alongside Coal India and NTPC Mining. Mines Secretary confirmed JV talks are already in final stages.

🟢 Wipro announced a ₹15,000 crore buyback of up to 60 crore shares at a confirmed price of ₹250 per share via the tender offer route, representing a ~19% premium. This is Wipro’s first buyback since April 2023 and its largest ever.

🟢 DRDO is advancing the Development cum Production Partner (DCPP) model under its DRDO 2.0 strategy, progressively handing over development and production of conventional missile and weapon systems to Indian private companies from 2025. Adani Defence (RudraM-II missile) and Reliance Infrastructure (155mm artillery ammunition) are among the first confirmed private sector DCPP beneficiaries.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 John Cockerill India bagged a ₹300 Cr order from JSW Steel Coated Products for a Continuous Galvanizing Line (CGL#3) at the Khopoli Plant. JCIL has now executed CGL lines for AMNS Hazira and Tata Steel Kalinganagar; JSW Khopoli expands its dominance across India’s full coated-steel value chain.

🟢 Container Corporation of India bagged a turnkey order for 09 BLSS (Spine Car) rakes worth ₹175 Cr.

🟢 Paras Defence and Space Technologies signed a 10-year agreement with Bandak Aviation (DBA Northstar), USA for supplying air-to-air refueling systems to Indian Armed Forces. India currently operates only six aging IL-78MKI tankers; this deal addresses a critical force-multiplier gap for the IAF’s deep-strike mission capability.

🟢 Hitachi Energy and Adani Energy Solutions successfully commissioned a major HVDC City Center Infeed in Mumbai, enabling up to 1,000 MW power injection and increasing electricity supply by 50%, supporting over 20 million residents. The link uses the world’s first compact HVDC substation and freed 2 sq km of urban land. It was conceived directly in response to Mumbai’s October 2020 blackout.

🟢 Aurobindo Pharma’s subsidiary TheraNym Biologics signed an additional product schedule with Merck Sharp & Dohme, expanding its CMO relationship and will build a 60 KL mammalian drug substance manufacturing facility at an investment of $150-175 million. India currently has near-zero commercial-scale biologics CDMO capacity.

🟢 Time Technoplast signed an MOU to acquire a 76% stake in Systoverse to strengthen its HDPE Pipe business. India’s HDPE pipe market is growing at ~12% CAGR, driven by Jal Jeevan Mission and infrastructure spending.

🟢 Tata Group Chairman N. Chandrasekaran said the group expects to roll out 20 lakh vehicles in the next 5 years and will also manufacture hydrogen buses from the Lucknow factory. At 4 lakh units per year, this would represent over 30% growth from Tata Motors’ current commercial and passenger vehicle combined volumes. Hydrogen bus production signals early-mover positioning in zero-emission transport.

🟢 Prestige Estates delivered highest-ever annual sales of ₹30,024 Cr vs ₹27,000 Cr guidance for FY26. The 76% YoY surge marks the first time Prestige has crossed the ₹30,000 Cr threshold, with NCR alone contributing 33% of FY26 volumes.

🟢 Nuvoco Vistas approved establishing a bulk cement terminal at Viramgam, Gujarat with ~1.5 MMTPA capacity and dedicated railway siding, expected to be commissioned by FY 2027-28. Gujarat’s cement consumption is growing on the back of GIFT City, port-led infrastructure, and PM Gati Shakti projects.

🔴 Vedanta’s 600 MW coal plant in Chhattisgarh was shut after a boiler explosion. The blast at the Athena Power Plant in Singhitarai, Sakti district on April 14 killed at least 16 workers. The unit had been commissioned only in August 2025, less than 9 months ago.

🔴 Active investor base declined for the first time in 3 years per NSE data, with active investors declining by ~35 lakh. Angel One saw a decline in retail trading. NSE active accounts fell from 4.92 Cr to 4.57 Cr in FY26. Zerodha’s active share slipped to 15.08% and Angel One’s to 14.79%.

🔴 India’s March WPI inflation rose to 3.88% YoY vs 2.13% previous. The 175 bps MoM spike was primarily driven by crude petroleum.

🟢 IRDAI is asking all insurance companies to share detailed data on commissions paid, hinting at a major overhaul of insurance commission structures. Insurers have proposed a mutual-fund-style TER cap on commissions. PB Fintech carries asymmetric downside risk if variable commission structures are curtailed.

🟢 Govt notified pricing norms for low-grade iron ore (haematite, BHQ, BHJ) to boost production. ASP for 35-45% Fe grade is set at 75% of the higher-grade benchmark, making beneficiation economically viable for the first time and unlocking vast sub-45% Fe reserves in Odisha and Jharkhand. Benefits NMDC.

🔴 CCI found 28 companies violated anti-trust rules between 2015 and 2023. WhatsApp groups including “Friends of Steel” and “TMT TYCOONS” were used to coordinate steel price fixing. Probe includes Tata Steel, JSW Steel, SAIL, and RINL, with 56 senior executives held personally liable. Under Section 3 of the Competition Act, CCI can impose fines of up to 10% of annual turnover per year of wrongdoing. JSW and SAIL have denied the allegations.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Hindustan Zinc declared successful bidder for the Jhandawali-Satipura potash and halite block in Rajasthan covering 1,841 hectares at G3 exploration level. India currently imports 100% of its potash requirement; this is India’s first-ever potash block auction.

🟢 GHV Infra Projects secured an EPC contract worth ₹1,250 Cr from APCO Infratech for expressway connectors between Jalna and Nanded in Maharashtra, with a 30-month execution timeline. The contract equals ~55% of GHV Infra’s current market cap of ~₹2,250 Cr.

🟢 ArisInfra Solutions signs MoU with Capacit’e Infraprojects for material procurement worth a minimum of ₹800 Cr. The agreement is structured over five years.

🟢 MVK Agro Food receives Maharashtra government approval granting “Mega Project” status for its ₹275 Cr expansion in Nanded focused on sugar, ethanol, and allied products. Mega Project status qualifies the company for incentives under Maharashtra’s Package Scheme of Incentives (PSI) 2019.

🟢 Godawari Power & Ispat subsidiary GNEPL signs a 5-year supply agreement with China’s EVE Power for LFP cells.EVE Power is among the world’s top LFP cell manufacturers; LFP is the global standard chemistry for utility-scale BESS applications.

🟢 Puravankara plans to launch 30 projects over the next 24 months with a GDV over ₹55,000 Cr. The pipeline spans 51.14 million sq. ft., primarily across South India and Mumbai, with most projects already at the approvals stage.

🟢 RR Kabel expands its FMEG portfolio with new kitchen appliances and an enhanced air cooler range to drive deeper market penetration. FMEG now represents a growing revenue diversification lever as RR Kabel reduces reliance on its core cables and wires business.

🟢 Ather Energy is looking to reduce aluminium usage in its scooters to cut costs and improve margins. Domestic aluminium prices have risen approximately 14% YoY to ~₹358/kg, and Ather is targeting a 10–20% cost reduction through material substitution.

🔴 Vedanta Power Plant in Chhattisgarh’s Sakti district suffered a boiler tube rupture killing at least 9 and injuring 40 workers; rescue operations are still ongoing and the toll may rise.

🟢 India's March 2-wheeler sales rose 19.3% year-on-year to 19,76,128 units per SIAM data. FY26 cumulative 2W sales crossed 21.4 million units, surpassing India’s pre-COVID FY2019 peak of 21.17 million for the first time.

🟢 India's March 3-wheeler sales climbed 21.4% year-on-year to 76,273 units per SIAM data. Bajaj Auto commands ~62% segment share.

🟢 India's March domestic Passenger Vehicle sales grew 16% year-on-year to 4,42,460 units per SIAM data; figures exclude BMW, Mercedes-Benz, JLR, and Volvo. FY26 full-year PV sales hit a record 47 lakh units, the highest in India's automotive history.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Power Mech Projects secures ₹296.44 Cr order from Maha Mumbai Metro Operation Corporation for operations and maintenance of Mumbai Monorail for a duration of 5 years.

🟢 Enviro Infra Engineers received Letters of Empanelment for 2 projects in Maharashtra worth ₹972.19 Cr with 24-month execution under Swachh Bharat Mission. Projects cover Pune and Nashik ULBs, adding 241.60 MLD of total STP capacity across 306 urban local bodies.

🟢 Zaggle Prepaid Ocean Services entered a 2-year agreement with Generali Central Insurance Company for the Zaggle Zoyer Platform. Zoyer is Zaggle's B2B spend management platform; insurance sector adoption signals widening enterprise client verticals beyond BFSI.

🟢 AstraZeneca Pharma bags CDSCO nod for Calquence (Acalabrutinib) additional indication covering treatment of previously untreated CLL/SLL in India. India's oncology market is projected to expand by $2.35 billion between 2025 and 2030, growing at a 20% CAGR.

🟢 Anand Rathi Wealth crosses ₹1 lakh Cr in AUM. The milestone was reached on April 10, aided by post-March equity market recovery; FY26 closing AUM stood at ₹93,037 Cr.

🟢 Godrej Properties added ₹42,100 Cr of future sales potential through FY2026 portfolio additions, achieving over 200% of guidance and 59% YoY growth. The company added 18 new projects totalling ~33.32 million sq. ft., more than double its initial ₹20,000 Cr guidance for the year.

🔴 TCS reported its first-ever full-year YoY decline in dollar revenue since its 2004 listing. FY26 dollar revenue stood at $30,017 million, a 0.5% YoY decline and 2.4% decline in constant currency terms.

🔴 TCS reacted to the Nashik sexual harassment probe confirming employees are being investigated and suspended, with 6 employees and 1 HR official arrested and ~9 FIRs filed.

🔴 Cigarette sales fell 3-5% in March and continued to fall further in April, with the steepest decline in East India (ITC, Godfrey Phillips). The decline follows the February GST hike from 28% to 40% and an additional excise duty effective February 1.

🟢 RBI proposes asset size of ₹1 lakh Cr for NBFCs to be classified as Upper Layer.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

This article is about that gap. It has a name. It has a mechanism. Let us explore.

The Problem That Hides in Plain Sight

Start with a simple trade. You plan to buy an stock/option at ₹100. Your target is ₹105. Your stop loss is ₹98. On paper, this trade gives you a planned profit of +5 on a win and a planned loss of -2 on a stop out.

The math works. The strategy has positive expectancy. Run it long enough and you should come out ahead. At 50% win rate, every two trades nets you ₹3 on average.

That is the plan. Here is what actually happens.

Why Good Strategies Bleed

You try to buy at ₹100. Your order gets filled/executed at ₹101. That is ₹1 slippage on entry. The trade goes your way. You try to sell at ₹105. You get ₹104 instead. Another ₹1 slippage on exit. Your planned ₹5 profit becomes ₹3.

Now take the losing trade. You bought at ₹101 due to entry slippage. Your stop was at ₹98. It triggers. You get ₹97 instead of ₹98. Exit slippage of ₹1. Your planned -₹2 loss becomes -₹4.

Look at one win and one loss together.

On paper: +5 and -2 = net +3.

In reality: +3 and -4 = net -1.

A strategy that looked profitable on paper delivered a net loss in practice. Nothing changed about the setup. Only the execution costs came into play.

This is the P&L gap. And it grows with every trade you take.

What Is Slippage?

Slippage is the difference between the price you expected and the price you actually got.

You open your trading terminal. You see the option trading at ₹136.05. You place a buy order. By the time the order reaches the exchange and gets matched, the price is ₹138. You are already ₹2 behind before the trade has even had a chance to work in your favour.

The prices on your screen are already delayed. They are not real-time. The exchange sends data to your broker. The broker displays it on their platform. It travels through your internet connection. By the time you see ₹136.05, that number is already stale.

Why Slippage Happens: The 10 Layers

Your order does not go directly from your finger to the exchange. It passes through at least ten distinct layers before it gets filled. Each layer adds delay. Each delay creates a window for the price to move before your order gets executed.

The table below breaks this down layer by layer, including who it affects and how much delay each one introduces.

Let me explain these.

• Screen data delay. The prices on your screen are already 50 to 500 milliseconds old. The exchange sends data to your broker, the broker displays it, and it travels through your internet connection. By the time you see a price, it is stale.

• Human reaction time. If you are placing orders manually, the time between seeing a price and clicking buy can add another 200 to 500 milliseconds. Algo traders skip this layer entirely.

• Broker platform and risk check. Before your order moves anywhere, your broker runs margin checks and pre-trade risk filters. This adds another 200 to 250 milliseconds to every single order.

• Algo platform relay. If you use an algo platform, the signal has to travel from the platform to the broker’s API before the order is even placed. The algo platform relay is the one most algo traders underestimate. Depending on the platform and its server load, this layer alone can introduce anywhere from 1,000 to 15,000 milliseconds of delay. That is one full second to fifteen seconds. In a fast-moving market, that is a big delay.

• Broker-to-NSE leased line. Once your broker sends the order to the exchange, it travels over a physical leased line. That network transit adds another 5 to 30 milliseconds.

• NSE order validation. The exchange runs its own checks on your order before allowing it into the queue. Another 1 to 5 milliseconds gone.

• Exchange queue and price-time priority. Your order enters a queue. NSE gives priority first to the best price, then to orders that arrived earliest at that price. Where your order lands in that queue is completely random from your perspective. This is why slippage cannot be predicted in advance.

• HFT co-location repricing. High frequency trading firms are located inside the exchange. They can see buying aggression in the order flow and raise their offer prices before your order is matched. By the time your order fills, the price has already moved against you. This one is structural and unavoidable for retail traders.

• Order book walking. If you want to buy 1,000 Quantity but only 520 are available at the best price, you get those 520 at one price and the rest at the next level. The larger your order, the worse this gets.

• Post-fill confirmation delay. After your order executes, the exchange sends confirmation back to your broker, and your broker sends it back to you. If your strategy places a second order only after the first one confirms, this 100 to 300 millisecond delay directly affects the execution of the next leg.

The Numbers That Should Make You Stop

We have a cost simulator on our website. These are numbers from a real example. I will take you through it. You can access it here.

Inputs on the left hand side:

• ₹5 lakh capital,

• 20 trades per day,

• 100% profitable days,

• 1:1 risk-to-reward,

• ₹100 average premium,

• 200 quantity,

• bid-ask spread of 0.25%,

• slippage of 0.5%.

Result on the right hand side of the pic above:

• Gross profit for the year: ₹12,50,000. This is the profit before any costs.

• The strategy wins on all 250 trading days.

• Total costs = ₹19,23,087.

• brokerage and other statutory charges ₹4,23,087,

• bid-ask spread cost ₹5,00,000,

• slippage cost ₹10,00,000.

• Net Profit = a loss of ₹6,73,087. On a capital of ₹5 lakh. That is capital wiped out.

A strategy with 100% profitable days, no losing trades at all, still ends the year deep in the red. The only reason is execution costs. This is what active intraday trading with high trade frequency looks like when you account for the real cost structure.

How to Reduce Slippage

Here is what you can actually control.

Cap intraday trades at 6 per day (12 main orders). Every trade is two orders: one to enter, one to exit. 12 orders per day is the ceiling. Beyond that, the cumulative slippage on all those fills starts to overwhelm whatever edge the strategy has. In practice, most strategies that take more than 12 orders per day end up net negative after accounting for execution costs.

Completely avoid scalping and high frequency trading. At very short timeframes, the slippage and bid-ask spread as a percentage of the trade's potential profit are simply too high. A strategy might look profitable at the gross level, meaning before costs. But once you apply realistic bid-ask spread percentages and slippage, the net result is a loss. This is not a recoverable situation by tweaking the entry or exit. The entire approach needs to change.

Avoid low premium options. Low-premium options have a wide spread relative to their price. On a ₹20 option, a ₹0.50 bid-ask spread is already 2.5% of the premium. Add slippage on top and the cost of entering and exiting can easily reach 4 to 5% per round trip. The probability of a trade being profitable has to overcome that cost hurdle before any profit starts.

Track every fill. Expected price versus actual price. This is the discipline most traders skip. If you do not track your fill quality, you have no idea where your money is going. Tracking this data shows you whether your execution is getting better or worse, whether a particular algo platform is adding unnecessary delay, and whether certain times of day produce worse fills. It is the only way to understand and improve your actual execution quality over time.

Don’t Donate Money

If you have low capital, say ₹1 to 2 lakhs, and you are trying to scalp or take 40 to 50 trades a day, that combination is particularly dangerous. The math does not work even with a good strategy. The execution costs will consistently outpace any edge the strategy carries.

The market has sophisticated participants on the other side. HFTs sitting inside the exchange. Market makers who earn the spread every time.

If you trade excessively with low capital, you are basically donating money to brokers, exchange HFTs, market makers, and other stakeholders.

The only sustainable path for a retail trader is fewer, better trades, with larger premiums, and a clear understanding of what execution actually costs.

Understanding slippage is crucial. It is the difference between a strategy that survives and one that quietly bleeds your account.

That’s it for today.

I have covered the topic in more detail in the video below. If you prefer watching, do check it out.

We give you a Flexi-Wealth System and In-Depth Research to build a Life-Long Portfolio that works across market cycles.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.

This week, Let’s explore the business & fundamentals of Safari Industries.

In the last 5 years:

• Revenue grew nearly 6x in five years, from ₹339 Cr to ₹1,995 Cr

• Operating profit turned around from a ₹28 Cr loss to ₹199 Cr

• Net profit recovered from ₹22 Cr loss to ₹168 Cr

Performance Chart

Quality Chart

Their Road to Consistency

1. Overview & Business Model

Safari Industries began in 1974 as a small player in Indian luggage. The real story started in 2011, when Sudhir Jatia took control and rebuilt the company from near-scratch. Today, Safari holds 31% of the organized luggage market, has grown revenue 24x in 14 years, and sits at a market cap of ~₹10,000 crore.

• Revenue grew from ₹70 crore in 2011 to over ₹1,800 crore in FY25. That is a 24x expansion in 15 Years under a single leadership team.

• Safari offers branded, quality luggage priced just above unorganized alternatives.

• Hard luggage contributes 75% of revenue. Soft luggage makes up the remaining 25%.

• Hard luggage is manufactured in-house at Halol, Gujarat and the new Jaipur plant, Rajasthan. Soft luggage is sourced via imports, keeping fixed costs lean.

• The portfolio spans Safari, Genie, Urban Jungle, Safari Select, and Magnum. Each sub-brand targets a specific customer segment and price point.

• E-commerce contributes approximately 50% of revenue. Over 160 exclusive brand outlets, modern trade hypermarkets, and CSD channels cover the rest.

2. Premiumization

Safari launched Safari Select in 2024 and Urban Jungle as premium sub-brands targeting elite travelers and Gen-Z consumers. The premium segment’s revenue contribution doubled from 3% in FY25 to 6% by Q3 FY26.

• Safari launched ‘Safari Select’ in 2024 targeting elite business travelers with dual-wheel systems and TSA-approved locks. This directly targets price points previously dominated by international brands.

• ‘Urban Jungle’ was introduced as a casual premium brand for younger consumers. Urban Jungle introduced distinctive designs, the “Taxi” hard luggage and the “Intern” backpack. Safari operates D2C website urbanjungle.shop to sell premium lines directly to consumers.

• Premium segment contribution doubled from 3% in FY25 to 6% by Q3 FY26 through targeted digital marketing. The speed of adoption signals the brand is slowly shedding its budget-only image. Management targets 10% of revenue from premium by FY27.

• Advertising and promotion expenses reached 8.5% of revenue in Q3 FY26 to build equity for Safari Select and Urban Jungle. Heavy spend today, but brand equity compounds over time.

• Realization per unit is expected to improve as premium brands scale to 10% of revenue by FY27.

• New premium EBOs were launched at major airports in Mumbai and Jaipur. These high-footfall transit locations expose the brand to aspirational travelers.

3. Jaipur Doubles Hard Luggage Capacity

The greenfield Jaipur plant, commissioned in December 2024, doubled Safari’s hard luggage capacity from 6.5 lakh to 13 lakh pieces annually. Beyond production numbers, it is a strategic foothold in North India, a region the company could not efficiently serve from its Halol facility alone.

• Safari invested ₹215 crore in 2024 to build the Jaipur facility in Rajasthan. One of the company’s largest capital bets.

• Commercial production began in December 2024, right before the high-demand 2025 summer travel season.

• Capacity utilization at Jaipur rose from 30% in March 2025 to approximately 75% by Q2 FY26.

• At full capacity, the Jaipur plant alone can generate approximately ₹1,000 crore in annual revenue.

• Proximity to Delhi, Punjab, and Uttar Pradesh reduces logistics costs for shipping bulky suitcases northward.

• The company plans to add 3 to 4 more machines at Jaipur by late 2025. Each addition provides 1 to 1.5 lakh extra pieces per month. Incremental capacity at a running plant is highly capital-efficient.

• The Jaipur plant enabled Safari to service institutional orders worth 7% of FY25 sales, up from 3% the prior year. Halol had to decline these large orders before.

• The plant is highly automated to ensure consistent quality across thousands of pieces. This automation is a key driver for reducing defect rates in the value-for-money segment.

• An ancillary capex of ₹25 Cr was announced to manufacture trolleys and wheels at Jaipur.

4. Omnichannel Reach

Safari does not rely on any single sales channel. It sells through e-commerce platforms, exclusive brand outlets (EBO), modern trade hypermarkets, armed forces canteens, and airport stores.

• Safari’s retail footprint crossed 8,800 touchpoints across India by end of 2024. This includes wholesale distributors and retail outlets of all sizes. The brand now reaches consumers even in Tier-3 and Tier-4 cities.

• Over 160 EBOs operate as of early 2026. Management consistently adds 3 to 4 new stores every month. Disciplined monthly rollout compounds into meaningful national presence over a multi-year horizon.

• CSD (Canteen Stores Department) provides steady, bulk volume from armed forces personnel. Stable, loyal, recurring demand.

• Modern trade contributed 15% of total revenue in FY25. Large-format stores display colorful hard luggage collections effectively. Visual merchandising in hypermarkets converts browsers/window shoppers into buyers.

• New EBOs were launched at airports in Mumbai, Patna, and Guwahati in late 2025.

• The offline channel grew 22% in Q3 FY26, helping offset a temporary e-commerce slowdown in the same period.

• Over 100 company-owned, company-operated stores give Safari full control over brand experience and pricing. They also function as product testing labs before nationwide rollout in wholesale.

• The extensive offline network supports a comprehensive after-sales and warranty service system.

• Safari is scaling three D2C websites: safaribags.com, genietravel.com, and urbanjungle.shop. Each site collects first-party customer data that feeds product development and targeted marketing. The digital channel is used to generate insights, not just transactions.

5. Lean Inventory

Safari’s most underappreciated competitive edge is inventory velocity. A 109-day inventory cycle versus competitor’s 228 days means less capital tied in warehouses, faster product refreshes, and near-zero debt.

• Safari’s cash conversion cycle was just 95 days in FY25 compared to 183 days of VIP. This efficiency lets Safari self-fund expansion from its own operating cash flows.

• A near-zero debt position in FY25 is a direct outcome of the lean inventory model. Capital is not sitting idle in unsold stock. This keeps the balance sheet clean.

• The shift to 75% hard luggage simplifies supply chain management. Plastic-molded shells are faster to produce than complex fabric bags. Shorter lead times also help match demand changes within weeks.

• Real-time sales data from e-commerce partners flows back to Halol and Jaipur for production scheduling. This digital feedback loop prevents slow-moving items from accumulating in regional warehouses.

• Concentrating 92% of sales under one brand means fewer unique SKUs and simpler component management. Fewer variants reduce supply chain complexity significantly. Simplicity is an operational advantage.

• Faster inventory turns allow Safari to refresh its product lineup more often than competitors. Fashion-conscious travelers want new colors and styles. Competitors sitting on old stock lose.

• Even during Q4 FY25’s price war, faster inventory turnover helped maintain a healthy return on capital employed. Operational discipline protects profitability when the market turns competitive.

6. Winning Market Share

Safari climbed from 15% market share in 2018 to 31% of the organized luggage market by early 2025. These gains are not just from industry growth. They are coming directly from the market leader. VIP Industries’ share fell from 47% to 38% as Safari rose in the same period.

• Volume growth of 22% in Q4 FY25 significantly exceeded the industry average for the same period. Even during a price war, consumers chose Safari over alternatives.

• By focusing on value pricing, Safari avoided direct competition with international premium brands like Samsonite. It attacked the unorganized market from below instead.

• Safari successfully repositioned itself as a modern brand compared to legacy competitors carrying old inventory. This perception shift is critical for winning millions of first-time luggage buyers.

• Management expects organized sector penetration to rise to 60% by 2027. Safari is positioned as the primary destination for new first-time branded buyers.

7. Online Dominance

Safari built its national scale on the back of e-commerce faster than any traditional Indian luggage brand. Amazon and Flipkart now contribute roughly 50% of total revenue. This digital-first approach reaches customers in geographies where building physical stores is not economically viable.

• E-commerce contributes approximately 50% of Safari’s total revenue as of late 2025. This national scale was achieved without the overhead of building physical stores everywhere.

• Safari and Urban Jungle are consistent top performers during Big Billion Days and Amazon’s Great Indian Festival. High-volume online events generate bulk revenue in short time windows.

• The ‘Magnum’ brand was launched as a Flipkart-exclusive partnership in October 2020 for value-seeking consumers. This gave Safari instant access to thousands of pin codes across India.

• Online sales grew approximately 40% year-on-year in recent periods. This pace outpaces physical retail growth by a wide margin.

• Digital marketing for Urban Jungle focused on influencer partnerships and social media ads in 2025. This keeps the brand visible to Gen-Z consumers who shop primarily on smartphones.

• E-commerce was used to rapidly clear Safari Select premium inventory in Q1 FY26. This reduced inventory days quickly without relying on physical markdown events.

• In Q3 FY26, e-commerce grew 12% to 15% even in a difficult macro environment.

• High ratings and review volumes on Amazon and Flipkart function as a digital moat for Safari. New entrants cannot replicate years of accumulated social proof quickly.

8. Design-Led Demand Creation

Safari has stopped making plain black suitcases. Vibrant colors, distinctive constructions, and functional features like anti-theft zippers and TSA-approved locks now define the lineup.

• Safari launched hard luggage in new colors like Pearl Blue and Olive in 2024 and 2025. These designs specifically appeal to consumers upgrading from plain unbranded alternatives.

• A new General Manager for Design and Development was appointed in February 2025 to lead the innovation pipeline.

• Urban Jungle introduced the “Intern” backpack with dedicated laptop compartments and ergonomic padding. These features are designed for young professionals and students carrying electronics daily.

• Safari shifted hard luggage shells to 100% Polypropylene and Polycarbonate materials. These allow intricate 3D surface textures that are lighter and more scratch-resistant.

• The ‘Genie’ brand focuses on versatile “on-the-go” lifestyle bags that double as school and travel bags. High utility makes it a practical default for parents shopping for children.

• Safari Select uses premium finishes and high-quality hardware to target the professional business travel segment. Aesthetics become the dominant purchase driver when a buyer’s professional image is at stake.

• Anti-theft zippers and TSA-approved locks are standard features across core models. These functional details create a security assurance that unorganized competitors simply cannot match at scale.

• The “Taxi” hard luggage under Urban Jungle uses bold, unconventional surface patterns. In a category where most suitcases look identical, stand-out design drives impulse purchases at retail.

• “Business Ready” backpacks with organized interiors were designed to capture the work-from-anywhere trend.

• New Product Developments (NPDs) continuously refresh the catalog. This freshness is credited as a primary driver of 20% volume growth in Q3 FY26.

9. Integration Boosts Margins

Safari is quietly building a multi-year margin engine by manufacturing its own wheels and trolleys instead of outsourcing them. Simultaneously, institutional sales through the CSD channel recovered sharply after the Jaipur plant unlocked previously unserviceable large-volume orders. Both trends are improving profitability without requiring new revenue streams.

• Safari announced a ₹25 Cr ancillary capex in 2025 to manufacture trolleys and wheels at the Jaipur plant. These were previously outsourced, adding to production costs. Bringing them in-house is a direct, measurable margin gain.

• In-house component manufacturing contributed to a 150 basis point year-on-year improvement in gross margins by Q2 FY26. 150 basis points on a ₹1,800 crore revenue base is impactful.

• Making its own wheels ensures dual-wheel durability even in value-segment products. This narrows the feature gap with more expensive brands.

• In-house component manufacturing reduces new product launch lead times by several weeks. In a fast-fashion luggage market, weeks of speed advantage translate directly to revenue.

• Safari plans to progressively integrate zippers and handles at Jaipur after trolleys and wheels. Each successive integration strips out another external supplier’s margin from the cost of goods sold.

• Manufacturing trials for premium luggage components are also ongoing at the Halol plant.

• The company is exploring corporate institutional orders beyond military canteens, including bulk gifting and employee reward programs for large Indian corporations. This diversifies the institutional channel beyond a single government buyer.

• Institutional demand for hard luggage is particularly strong because these buyers prioritize durability and long-term value. Safari’s shift to 75% hard luggage aligns precisely with what institutional buyers require.

10. Risks and Red Flags

• The luggage market has become a pricing battlefield. D2C brands like Mokobara and Nasher Miles are spending venture capital money on discounts. Safari’s realization per unit fell approximately 7% in Q4 FY25 as it matched competitor prices.

• EBITDA margins contracted from 17.9% in FY24 to 12.7% in FY25. That is a significant compression in a single year. Price wars in action.

• Promoter group entities and key managerial personnel made significant share sales between late 2025 and early 2026. The timing, just before a period of margin compression, is worth noting carefully.

• Approximately 50% of revenue flows from Amazon and Flipkart. If either platform changes its algorithm or raises commission rates, profitability could be hit overnight.

• Manufacturing is largely concentrated in Gujarat and Rajasthan. A regional labor disruption, regulatory change, or natural event could halt most production simultaneously.

• Polypropylene and Polycarbonate are the core raw materials, both petroleum-derived. A spike in global oil prices would sharply increase input costs.

• New Labor Codes implemented in late 2025 have already increased employee cost obligations. Regulatory changes in labor law quietly erode margins over time without appearing as a single large event. The company acknowledged this in Q3 FY26 disclosures.

• Ongoing Carlton trademark litigation in the luggage industry creates consumer brand confusion. Safari holds a license, but confusion around brand identity can weaken purchase confidence.

• About 92% of revenue comes from the Safari brand with no secondary brand of meaningful scale. If Safari’s relevance weakens with the next generation of travelers, the portfolio provides very limited protection.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 HBL Engineering secures ₹83.81 Cr Kavach order from Patiala Loco Works. Order covers Kavach Version 4.0 supply, testing, and commissioning. HBL’s cumulative Kavach order book now exceeds ₹3,860 Cr.

🟢 BEML Limited signs MOU with Delhi Metro Rail Corporation for strategic partnership to jointly bid for metro rail projects in India and abroad.

🟢 Ashiana Housing acquires 28.55 acres of land in Pune for a senior living project with saleable area of 20 lakh sq ft and potential sales value of ₹1,800 Cr. The company’s largest-ever land acquisition.

🟢 Eicher Motors launches Flying Flea C6 electric motorcycle priced at ₹2.79 lakh (ex-showroom), with test rides from April 10 and deliveries starting end of May 2026. Royal Enfield’s first EV in its 125-year history.

🟢 Glenmark Pharma receives US FDA approval for Progesterone Vaginal Inserts 100 mg, a generic for Endometrin with annual US sales of approximately $59.2M. The drug is primarily used in IVF and fertility treatments, a US market growing at over 5% annually.

🟢 Castrol India launches full synthetic engine oils for two- and four-wheelers including Castrol Activ 10W-30, 5W-30 and GTX 5W-30, 0W-20. The transition brings full synthetic technology to mass-market segments for the first time.

🟢 Apollo Micro Systems completes successful blast trials for limpet mines, becoming the only Indian company to develop this product for the Indian Navy. The milestone makes AMS the sole provider of India’s full underwater mine spectrum, shallow to deep water to limpet.

🔴 HDFC Bank has large defaulter dues of ₹54,315 Cr with 4,914 recovery cases pending as per CIBIL TransUnion data up to February 2026.

🟢 Centre to provide up to 200 metric tonnes/day LPG (sector-wide cap) to ceramics, pharma and specialised industries at 70% of pre-March 2026 consumption levels.

🔴 Steel companies raise HR coil prices by ₹3,500/tonne to approximately ₹64,500/tonne this month; cold-rolled coil prices to also rise ₹3,000 to ₹68,000/tonne.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 KEC International bags mega orders worth ₹2,518 Cr including its largest-ever commercial real estate order in the civil segment. KEC’s FY26 order intake has crossed ₹22,800 Cr, a 35% YoY growth, with the civil segment now a strategic revenue pillar.

🟢 HFCL subsidiary HTL Limited secures orders worth ₹1,366 Cr for supply of optical fiber cables from a Tier-1 domestic customer; execution scheduled by December 2026.

🟢 NPST wins AI-powered merchant underwriting and risk management order from a public sector bank.

🟢 Larsen & Toubro emerges as lowest bidder for a package valued at ₹22,500 Cr for NTPC Lara and DVC-CIL projects. If converted, this would rank among L&T’s largest single thermal EPC wins in a decade.

🟢 NTPC signs non-binding MoU with EDF for cooperation in nuclear power projects in India. EDF operates 56 reactors supplying ~70% of France’s electricity. Collaboration aligns with India’s 100 GW nuclear target by 2047 under the 2025 nuclear energy policy.

🟢 RedTape acquires international sports brand Sprandi, securing rights for India, Nepal, Bhutan, and Sri Lanka markets with plans for a large-volume launch across online and retail channels. Sprandi is a Polish mass-market sportswear brand.

🟢 GOCL Corp’s new EMS facility becomes fully operational at its Hyderabad-based Gummadidala unit after receiving factory license. GOCL is one of only three private-sector licensed EMS manufacturers in India.

🟢 Hyundai Motor India announces up to 1% price increase across its car portfolio effective May 2026, citing input cost escalation. Hyundai's last price revision was January 2026. Cumulative steel and aluminium cost inflation since then has exceeded 8%.

🟢 RBI maintains repo rate unchanged at 5.25%; marginal standing facility rate and bank rate stand at 5.50%.

🟢 RBI Governor announces new framework for NBFC categorisation is coming soon. The revised framework is expected to formalise upper and middle layer classifications, tightening capital norms for the top NBFCs.

🟢 SEBI extends IPO approval validity to September 30, giving one-time relief to IPO-ready firms. Approximately 40 issuers with ₹43,500 Cr in planned fundraising benefits. A cluster of IPOs is expected in August-September 2026 once geopolitical uncertainty clears.

🟢 Cabinet approves ₹41534 Cr nutrient-based subsidy for summer season crops. This is the third consecutive year of above-₹40000Cr NBS allocation. Fertiliser companies with NBS-linked product exposure such as Chambal and GNFC gain.

🔴 Aluminium shortage set to hit EV two-wheeler margins. Aluminium prices rose ₹35–45/kg since end-Feb to ~₹358.7/kg. This significantly raises input cost for Ola Electric, Bajaj Auto, and TVS Motor. Two-wheeler frames use 8 to 12 kg of aluminium. A ₹40/kg spike adds ₹320 to ₹480 per vehicle in direct material cost, compressing margins by 50 to 100 bps at the operating level.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Swan Defence and Heavy Industries bagged a landmark order from Energy ONE Ltd for 4 x 92,500 DWT dual-fuel ammonia bulk carriers worth between ₹1,501 Cr and ₹3,000 Cr. These are India's first ammonia dual-fuel ships. First delivery is due October 2029, with subsequent deliveries at four-month intervals.

🟢 Infosys signed a strategic collaboration with Harness to accelerate AI-led software delivery for global enterprises combining Infosys Topaz, Cobalt and Harness AI. Harness clients have reported release acceleration of up to 75% and cloud cost reductions of up to 60% using the platform.

🟢 Biocon announced the US commercial launch of Bosaya and Aukelso, its denosumab biosimilars. The combined US denosumab market is approximately $7 billion.

🟢 Tata Steel’s Q4 FY26 crude steel production stood at 6.25 million tonnes, up 15% year-on-year, beating guidance. Full-year India output hit a record 23.48 million tonnes in FY26, up 8% YoY, driven by Kalinganagar ramp-up.

🟢 Alembic Pharmaceuticals received USFDA final approval for Dapagliflozin tablets 5 mg and 10 mg, the generic of AstraZeneca’s Farxiga. The addressable US market is approximately $10.5 billion.

🔴 Tata Motors March UK Land Rover total sales declined to 13,753 units versus 14,178 units year-on-year. JLR's UK full-year retail volumes fell 17.8% to 352,300 units in FY26.

🔴 SBI was reportedly most impacted by the RBI directive, reportedly holding short rupee positions of around $5 billion. SBI's $5 billion represents roughly 20% of the total $25-30 billion industry-wide short rupee exposure being forcibly unwound by the April 10 deadline.

🔴 Smartphone companies raised prices by up to 25-30% in select segments, driven by AI-led memory chip shortages and a weak rupee, which could lead to an estimated 10% annual drop in smartphone sales. Dixon Tech could be impacted. India’s smartphone market recorded a 9% year-on-year volume decline in the first nine weeks of 2026.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 Wipro secured an 8-year strategic transformation deal with Olam Group valued at over $1B (committed $800M), acquiring Olam's IT arm Mindsprint.

🟢 Brigade Hotel Ventures and Hyatt announced plans for Grand Hyatt Chennai ECR and Hyatt House Bengaluru Devanahalli. Both locations target premium leisure and airport-proximity demand segments

🟢 Titagarh Rail Systems' unit received in-principle approval from the Directorate General of Shipping for a brownfield capacity expansion at Falta under the Shipbuilding Development Scheme, with a total project cost of about ₹610 Cr.

🔴 Domestic pharma firms including Dr. Reddy’s, Sun Pharma, and Aurobindo Pharma urged NPPA to increase the maximum selling price of cancer medicines by 50% due to a platinum price surge. Platinum prices nearly doubled in six months to ~₹8,000/gram by February 2026.

🟢 Govt will clear ₹17,500 Cr dues to Oil Marketing Companies (OMCs) in FY27. Pending dues reimbursement will directly ease working capital pressure on HPCL, BPCL, and IOC, which absorbed LPG price subsidies below market cost.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

🟢 J Kumar Infraprojects received a Letter of Acceptance for construction of an International Exhibition-cum-Convention Centre in Lucknow worth ₹1,184 Cr, to be completed in 24 months from the Public Works Department, Lucknow.

🟢 Vikran Engineering received ₹530.80 Cr orders from MSEDCL for an ADB-funded Power Distribution Enhancement Program covering Nashik (₹235.63 Cr) and Kolhapur (₹295.17 Cr) zones, to be completed in 21 months.

🟢 Jash Engineering's UK subsidiary Waterfront Fluid Controls Limited acquired 100% stake in Penstocks (UK) Limited for £5,50,000, with completion expected by June 30, 2026, to establish pan-UK presence and support clients in water utilities. Penstocks (UK) brings 40+ years of proprietary penstock design experience and an existing framework agreement with a UK water utility.

🟢 Hindustan Copper reported FY2025-26 MIC production up 9% to 27,421 tonnes, the highest in the last seven years, ore production up 6% to 3.67 million tonnes, with copper MIC sales of 27,367 tonnes the highest in the last 5 years.

🟢 Bajaj Auto reported March 2026 total sales of 4,45,377 units. Domestic 2-wheeler sales up 20% YoY and exports up 21% YoY. FY26 full year sales crossed 51.17 lakh units, making it a record year for the company across both segments.

🟢 NOCIL started trial batches for capacity enhancement in rubber chemicals at Dahej with capital expenditure not exceeding ₹250 Cr, with samples to be sent to customers for approval. The Dahej TDQ antioxidant expansion adds approximately 20% to NOCIL's existing 115,000 MTA capacity, with commercialisation targeted in H1 CY2026.

🟢 Prestige Estates Projects launched Prestige Golden Grove, a 5,120-unit mega township in Hyderabad with a GDV of ₹9,500 Cr spread across 28.6 acres with total saleable area of ~10.36 million sq ft.

🔴 Escorts Kubota announced a tractor price increase (excluding Kubota brand) effective April 15, 2026, with variation by model and geography.

🔴 Tata Steel received a demand notice of ₹1,755.10 Cr from the District Mining Office, Ramgarh, Jharkhand, for alleged excess extraction of 1.62 crore MT of coal at its West Bokaro Colliery for the period FY2000-01 to FY2006-07, with the company planning to pursue legal remedies.

🔴 Trump threatened Iran with further attacks on power plants and bridges unless the Hormuz Strait is reopened, warning of severe consequences.

🔴 Indian pharma sector faces a US 100% tariff on patented drug imports unless manufacturers sign a pricing deal or relocate production to the US, with large pharma companies given 120 days and smaller ones 180 days to comply. India's direct exposure is limited. ~90% of its $9.7 Bn in US pharma exports in FY25 were generics, which remain exempt for now.

That’s it for today.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. We do not recommend buying or selling stocks mentioned in this newsletter. Securities market investments carry market risks. Kindly review all related documents before investing.

Or why trading more to recover losses only makes things worse?

Or how Props and FIIs make a profit to the tune of ₹60,000 crore in the same market that you are trading while your account keeps losing?

These are not random outcomes. There is one concept that connects all the 3 questions above.

Once you understand it, you will never look at your trades, your backtest, or your capital the same way again.

If you prefer watching over reading, I have covered this article in much more detail in the video below. Else, keep reading.

Let us look at some data before getting into the concept.

Who Is Actually Making Money in F&O Trading?

SEBI released the following data in 2025.

Proprietary traders earned ₹33,037 crore gross in FY24. FPIs earned ₹27,965 crore. Individuals and others collectively lost ₹61,212 crore in the same year.

This is not one bad year for retail traders. It has happened every time in the past, and it will happen every time in the future also. This is the structural reality of the market.

The natural question is: What exactly are props and FPIs doing that retail traders are not?

Almost All of It Comes from Algos

96% of proprietary trader profits in FY24 came from algo trading. For FPIs, that number was 97%. Non-algo profits were marginal for both categories.

This tells you something important. The edge these institutions hold is not gut feel or discretionary trading. It is systematic, algorithmic execution at a very large scale.

The next logical question is: What are these algos actually doing?

Are these Algos Directional or Non-Directional?

There are ~1,000 prop and FII entities in total. On the other side, there are crores of retail traders.

Each retail trader averages ₹11,824 per transaction and makes roughly 875 transactions per year (Source: NSE & SEBI)

Think about what this means structurally.

Retail traders collectively generate few crores of transactions every single day. Props and FPIs are mostly the counterparty to these crores of transactions. That is, they are on the opposite side.

Effectively, Props are making small profits per trade across crores of trades. This business model is only possible with a non-directional strategy.

A directional strategy, on the other hand, works by taking fewer, larger bets. You hold them long enough for the thesis to play out. Profit per trade is high. Trade count is low. So, Props are not doing this.

The Prop model is the exact opposite. High trade count. Very small profit per trade.

That structure can only mean one thing. That is Market Making.

What are Market Making Algos

Market makers do not predict where the market is going. They are not long or short based on a view.

They sit on both sides of the order book continuously. They place limit orders to buy and sell simultaneously.

Look at the market depth of the Nifty options below. All these orders that you see are limit orders and are mostly placed by the market makers (Props).

Every time a retail traders sends a market order, a market maker’s (PROP) limit order is on the other side of that transaction.

They enable your transaction. In return, they collect a small fee on every single trade.

To understand this better, you need to know the concept of bid ask spread.

What Is Bid-Ask Spread?

Open any options contract. I have loaded the NIFTY 23,300 call option below. You will see two prices in the market depth. Bid and Offer.

The bid is the highest price a buyer is willing to pay.

The ask (or offer) is the lowest price a seller is willing to accept.

The bid is ₹239.2 and the ask is ₹239.7 as in the above pic.

If you buy at market price, you pay ₹239.7. If you immediately sell at market price, you receive ₹239.2. That gap of ₹0.50 is the fee you paid to the market maker. That is, you paid it to the PROP Traders.

That spread as a percentage is almost 0.21% of the Premium. That is a hidden cost that you dont see.

It does not sound like much. But every single trade you take, on both the buy and the sell, carries this cost. It adds up fast. I will show you a detailed calculation later in the article.

This is one of the reasons why Props are making thousands of crores every year. Almost guaranteed.

Here is a simple way to understand this.

Have you gone to Airport Money Exchange Counter?

USD/INR trades around ₹93.9 in the open market. Walk up to an airport forex counter and ask to buy $1. You will pay around ₹95. Come back from your trip and try to sell that dollar back. You will get only ₹89.

You buy above the market rate. You sell below the market rate. The ₹6 difference is pocketed by the exchange counter. That is their bid-ask spread.

Now ask yourself: would you go to that counter 10 times in a day to transact dollars?

Of course not. One transaction costs you ₹6. Ten transactions cost you ₹60.

You would go once when you need dollars and once when you return. That is it.

But in the markets, most traders do exactly this. They believe more trades means more opportunity. It does not.

More trades means more spread paid to market makers, more brokerage paid to brokers, and more taxes paid to the government.

Market Making Is Everywhere

Market making is not unique to Indian options. It happens across every asset class and every market in the world. Equities, bonds, currencies, commodities.

Wherever there is a buyer and a seller, there is almost always a market maker sitting in between, collecting the spread on every transaction.

It is also one of the most consistently profitable trading activities in the world. Not because market makers are smarter. But because the structure of the market guarantees them a fee on every single trade, regardless of direction.

This is what you need to understand before you trade any instrument. Is market making prevalent in this instrument? If the answer is yes, then making consistent intraday profits becomes extremely difficult.

You are essentially fighting an entity that gets paid whether the market goes up or down, and gets paid every single time you transact. Props are doing exactly this.

In liquid options like Nifty and BankNifty, market making activity is very high. The market maker’s edge compounds across millions of trades every day.

This is also the reason why scalping, intraday options buying and overtrading in Nifty and BankNifty are almost always losing strategies for retail traders.

Every time you enter and exit quickly, you are paying the spread twice. Once on the entry and once on the exit. Do this ten times a day and the spread alone will erase whatever small profit your strategy was trying to capture.

Why Your Profitable Strategy still loses

Whenever I backtest or forward test a strategy, I simulate the total market cost of the strategy using the calculator below. You can access the calculator here.

On the left-hand side of the calculator, the inputs, and on the right-hand side, you will see the output. You can enter the details of your strategy on the left-hand side to get an estimate of the total market cost.

Assume you have ₹2 lakh capital.

You risk 1% per day, which is ₹2,000. Your risk-reward is 2:1, so you target ₹4,000 on winning days. You win 60% of the days. Your strategy deploys 10 trades per day.

I have entered the details above in the calculator, and I got the total market costs on the right hand side.

On paper, the gross profit of this strategy is ₹4 lakh per year. The strategy looks excellent before the costs.

Let us now deduct the costs. Here is the actual cost structure of this strategy:

• Regulatory costs (brokerage, STT, transaction charges, GST, stamp duty) come to approximately ₹1,59,000 per year. Most traders know this and account for it in their brokerage calculator.

• Bid-ask spread at 0.21% per trade comes to approximately ₹75,000 per year. Most traders never account for this.

• Slippage at 0.5% per trade comes to approximately ₹1,87,000 per year. This is the difference between the price you expect and the price you actually get. We will cover slippage in detail separately in another article. For now, just understand that there will always be slippage.

Total market cost is ₹4,21,000.

Your gross profit was ₹4,00,000. Your total costs are ₹4,21,000. The strategy is now a loss-making one.

An extraordinary strategy on paper becomes a loss-making strategy in practice. The reason is not bad entries or bad exits. The reason is bid-ask spread, slippage, and cost.

Why ₹1-2 Lakh Capital Is Not Enough for Trading

With ₹1-2 lakh trading capital, the math simply does not work.

The fixed costs alone are significant relative to the capital base. Regulatory costs, bid-ask spread, and slippage eat into a disproportionately large portion of your profits.

If you trade with ₹1-2 lakh in F&O, you will not be profitable even if your strategy is genuinely good. The market structure does not allow it.

Action Points for you

You should implement these things immediately.

1. Every backtest you do hides bid-ask spread, slippage, and regulatory costs. Always add these three before concluding that a strategy is profitable. After accounting for all three, very few strategies retain a genuine edge.

2. ₹1-2 lakh capital for F&O trading is not enough. Some good strategies start returning real profits only above ₹5 Lakh. That too, you should first invest for the long term and then pledge those holdings and only trade in F&O.

3. More trades is not more opportunity. Every additional trade is a donation to market makers, to brokers, and to the government. Traders who survive long enough take fewer trades. Aim for a maximum of one to two adjustments per day. If your strategy is still in a loss after two adjustments, close the trade for the day. Avoid scalping, intraday options buying, and over-trading.

4. Avoid F&O trading till you build at least 15 lakhs in capital. Once you build a capital of 15 lakhs, you can use F&O for hedging and income generation. You can do both Hedging and Income Generation by pledging your investments. Do not trade in F&O for speculation. The only people who win are the Brokers, Props, Exchange, SEBI and the Government.

A Mental Model for Survival

Most traders spend their time changing their rules. A new indicator. A new entry signal. A new stop loss level.

The ones who survive understand something deeper. There is a structure to markets that cannot be changed. And there are principles that must never be broken.

Think of it in 3 layers.

1. Structure includes bid-ask spread, taxes, and slippage. These costs exist. They will always exist. In trading, you should always know who is on the other side. Understanding structure tells you the minimum edge your strategy needs to have before it can be profitable.

2. Principles include risk management and position sizing. These must not be broken. Never ever.

3. Rules include your charts, your indicators, your specific entry and exit criteria. These can be different for different people. And they keep changing.

The ones who survive understand the structure and never break the principles.

The Devil is in the Details

The bid-ask spread is not a small detail. It is the mechanism through which bulk of the ₹61,000 crore flows from retail traders to market makers (Props) every single year.

Understanding it does not mean you should stop trading. It means you should trade less, trade smart, and always know the true cost of every transaction before you enter a position.

In the upcoming weeks, I will be covering more topics around market structure and other key areas.

Disclaimer: Anand Ganapathy K is a SEBI-registered Research Analyst with SEBI registration number INH000016630. This post is purely for learning purposes. I do not recommend buying or selling stocks mentioned in this newsletter. I do not hold any positions in the stock discussed. Securities market investments carry market risks. Kindly review all related documents before investing.