🟢 Caplin Point Laboratories plans to enter Canada, Australia, MENA, Russia/CIS, Mexico and Brazil in the near to medium term. These additions extend Caplin’s addressable regulated-market geography well beyond its current US-Latin America base.

🟢 Zydus Lifesciences acquires Nasdaq-listed Assertio Holdings at $23.50 per share in an all-cash deal valued at $166 million (~₹1,570 Cr). The headline asset is Rolvedon, an FDA-approved oncology biologic that reduces infection risk in chemotherapy patients and competes in a high-margin segment well above traditional generics.

🟢 Crompton Greaves targets a ₹2,000 Cr solar business within 3-4 years through national rollout of the Crompton Armor wires brand. India’s PM Surya Ghar programme targets 10 million rooftop solar homes, creating large addressable demand for branded wiring and balance-of-system products from established consumer electrical names.

🟢 Siemens AG reports India revenue grew 21% in Q2 FY2026, far above Street estimates of 6-7%, reflecting robust domestic capex across industry, infra and electrification. India was the fastest-growing geography within Siemens’ Asia Pacific region, which grew 8% overall.

🟢 Kalpataru Projects reports new order wins of ₹1,833 Cr YTD FY27, with L1 status on an additional ₹3,200 Cr of projects. The combined confirmed-plus-pipeline position of ~₹5,000 Cr at the very start of FY27 is consistent with the ₹26,000 Cr-plus annual inflow pace achieved in FY26.

🟢 MTAR Technologies secures international blanket purchase orders worth ₹2,279 Cr from an undisclosed existing customer, with execution timelines to be finalized later. This single order is nearly equivalent to MTAR’s entire FY26 closing order book of ₹2,581 Cr.

🟢 L&T, as prime contractor, will offer the Unmanned MCM Suite to all Indian Navy shipyards bidding for the 12 Mine Counter Measure Vessels programme, with France-based Exail as technology partner.

🔴 Higher platinum import duty, doubled from 6.4% to 15.4%, is set to raise vehicle costs by ₹2,500-4,000 for entry-level cars, ₹8,000-12,000 for mid-size diesel SUVs and ₹12,000-18,000 for strong hybrid models. The duty change accelerates OEM incentive to reduce platinum-group metal loading in catalysts or pivot to BEVs where catalytic converters are absent entirely.

🔴 Ministry of Railways plans to dilute 5-10% stakes in six listed railway PSUs and 2-3% in CONCOR via OFS in FY27 to meet ₹2.62 trillion in NMP 2.0 monetization targets. A 5% stake sale across the six PSUs alone could raise ₹15,000-20,000 Cr for the government while all entities retain above-51% government ownership.

🔴 India’s April WPI rose to 8.30% YoY from 3.88% in March, a 42-month high, with fuel and power prices surging 24.71% and crude petroleum inflation hitting 88% YoY. The print significantly overshot consensus estimates.

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.

🔴 Cipla’s Q4 FY26 US sales came at $155M versus $167M in Q3 FY26, with EBITDA margin at 21% versus the company’s earlier guidance of 24%. The shortfall reflects near-zero gRevlimid contribution after patent expiry.

🟢 Tata Power confirms FY26 capex targets were met and flags a continued strong investment pipeline. The company targets 15 GW of renewable capacity by 2030, implying a ₹1.2 lakh Cr investment program spanning solar, wind, and storage.

🟢 Lloyds Engineering Works receives CCI approval for the proposed merger of Lloyds Infrastructure & Construction, Metalfab Hightech, and Techno Industries into the company. The merged entity will carry a combined order book of over ₹6,150 Cr, transforming LEWL into a vertically integrated design-to-execution solutions provider.

🟢 VA Tech Wabag and PEAK announce India’s first Bio-CNG project in Ghaziabad. Bio-CNG can substitute CNG at the pump and represents an emerging energy security play as natural gas prices spike.

🟢 Dixon Technologies says Vivo-Dixon JV news will be coming soon. A formal JV would give Dixon a manufacturing anchor in premium smartphones, adding to existing partnerships with Samsung, Motorola, and Xiaomi.

🟢 Bajel Projects bags a major EPC order for a 765kV AIS substation package with contract value estimated between ₹200 Cr and ₹300 Cr. Bajel has secured multiple ultra-high-voltage orders across FY26, building a differentiated position in a technically complex segment.

🟢 PNC Infratech wins an order worth ₹572 Cr. PNC’s order book stands above ₹17,000 Cr, with 85% of flows from National Highway projects directly backed by the Budget’s ₹2.78 lakh crore highway capex allocation.

🟢 India raises total import duty on gold and silver to 15% from 6%, combining a 10% basic customs duty and 5% AIDC, effective May 13. The hike follows PM Modi’s public appeal to avoid gold purchases for a year, aimed at protecting forex reserves under geopolitical pressure. Gold and silver ETFs extend gains.

🔴 Kerala becomes the first Indian state to cap bulk petrol and diesel purchases, limiting per-transaction volumes. The move mirrors rationing steps adopted globally.

🟢 PM Modi cuts the official convoy size by 50% and asks ministries to adopt fuel-saving and cost-cutting measures.

🔴 Electric bike companies including Bajaj Auto, Hero MotoCorp, Ather Energy, and Revolt Motors face potential price hikes as lithium-ion cell, rare earth magnet, and chip costs rise. Rare earth shortages already disrupted Indian e-2W production in 2025, with Ather having raised prices by ₹3,000 in January 2026 on input cost pressure.

🟢 Govt approves the ₹20,667 Cr Ahmedabad-Dholera semi high-speed double-line railway project, India’s first using indigenous rail technology. The 134-km corridor will connect Ahmedabad with the Dholera SIR and the upcoming Dholera Airport, targeting completion by 2030-31.

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.

🟢 Indian Hotels MD cited strong demand conditions, with the PM’s domestic tourism push and busy wedding season lifting hospitality activity. IHCL operates 320+ hotels and the demand upcycle directly supports room rate and occupancy expansion across its portfolio.

🟢 One MobiKwik invested ₹54.7 Cr to build a merchant payments vertical, targeting 10x growth by FY28. It enters a segment dominated by Razorpay and Pine Labs, betting on its existing merchant base rather than a costly greenfield build.

🟢 Dr Reddy’s Labs plans to imminently launch generic semaglutide injection in Canada, where it holds first-mover approval from Health Canada, and generic oral semaglutide tablets in India. Canada is the world’s second-largest semaglutide market, making DRL’s first-mover position a meaningful near-term revenue opportunity.

🟢 SBI approved long-term fundraising of up to $2 Bln for FY2026-27. Offshore debt at this scale supports loan book growth without drawing on domestic deposits, maintaining the bank’s funding mix discipline.

🔴 ABB India flagged that Q4 was impacted by the West Asia conflict, with raw material costs remaining a key concern. The company’s automation and power equipment segments carry above-average input cost sensitivity, making cost pass-through ability the critical variable to watch.

🟢 RVNL emerged as L1 bidder for South East Central Railway’s ₹221.33 Cr electronic interlocking and auto-signalling project in Bilaspur Division, to be executed in 730 days. The win continues RVNL’s run of S&T wins across railway zones, adding depth to an already large order book.

🟢 NSE is targeting a DRHP filing by early June, ahead of market expectations. NSE’s implied unlisted market valuation of approximately ₹6 lakh crore would make this India’s largest-ever IPO.

🔴 India’s affordable smartphone segment fell roughly 46% in Q1 2026 as DRAM and NAND price hikes made budget devices unaffordable. CMR forecasts a 10 to 12% full-year market decline, with recovery dependent on memory price normalisation in H2.

🔴 India’s oil minister disclosed OMCs are losing roughly ₹1,000 Cr daily and over ₹1 lakh Cr this quarter, with no fuel price hike planned and last fiscal’s refiner profits at risk of being entirely wiped out.

🔴 Factory workers are leaving urban manufacturing hubs including Noida for villages as LPG, rent, and transport costs make city life unaffordable. The resulting labour squeeze adds production risk to industrial clusters already under demand pressure.

🟢 India’s April CPI came in at 3.48%, above March’s 3.40% but well below the 3.80% consensus estimate, a positive macro surprise. Inflation holding below the RBI’s 4% target for multiple consecutive months strengthens the case for further rate cuts in the current easing cycle.

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.

🟢 Waaree Energies plans to expand US solar module capacity from 1.6 GW to 4.5 GW within the next six months and is evaluating domestic solar cell manufacturing in the US.

🟢 Kalyan Jewellers plans 150 new showrooms in FY27 across Kalyan, Candere, and new regional brands. The expansion targets India’s underpenetrated Tier 2 and Tier 3 jewellery markets, where organised retail share remains below 15%.

🟢 Ather Energy’s Rizta electric scooter crossed the 3 lakh unit sales milestone, driving accelerated growth for the company. Rizta’s mass-market positioning broadens Ather’s addressable segment beyond premium buyers and puts it in direct competition with Ola Electric S1 X and TVS iQube.

🟢 Swiggy’s quick commerce segment targets ₹1 trillion GOV in 3.5 to 5 years, implying 35-50% CAGR. At ₹1 trillion GOV, Swiggy Instamart would match the current scale of Zomato Blinkit. Quick commerce is structurally a winner-takes-all market.

🟢 Cyient Semiconductors launched India’s first GaN Power IC family leveraging Navitas Technology. GaN power ICs deliver up to 40% higher efficiency than silicon alternatives and are seeing surging global demand in EV charging and data centre power conversion.

🟢 Shyam Metalics approved ₹2,700 Cr capex for a speciality wire and bar mill at Kharagpur and stainless steel downstream expansion at Sambalpur, fully funded through internal accruals with commissioning targeted by March 2029.

🟢 Afcons Infrastructure has been selected as the most suitable bidder for the Dugo Selo-Novska railway project in Croatia, valued at €677.07 mn (~₹7,544 Cr), marking its largest-ever international order. This 83 km project, co-financed by EU funds, is the largest railway contract in Croatia’s history and carries a 72-month execution timeline.

🟢 HFCL bagged export orders worth $19.32 mn (~₹184 Cr) for optical fiber cables from international customers. India’s OFC export base is expanding rapidly as global broadband rollout drives annual fiber demand well beyond 700 mn fiber-km across Southeast Asia and Africa.

🟢 Bharat Forge secured a long-term contract from Embraer for the supply of aerospace forged components. Embraer’s 1,000-plus unit commercial aircraft backlog provides Bharat Forge with multi-year revenue visibility in a high-margin aerospace segment.

🟢 CMS Info Systems won a 5-year integrated ATM managed services mandate from HDFC Bank worth ₹400 Cr across 6,000 ATMs. The fixed-pay contract deploys CMS’s HAWKAI AI platform and is designed to lift the company’s private bank revenue contribution to 30% of total revenues by FY27.

🟢 India eased norms to allow large institutional funds to bid directly for highway BOT projects, targeting a BOT share of 25% in total road awards from below 5% currently. The shift reduces the government’s annuity financing burden and is structurally positive for listed highway operators and infrastructure-focused AIFs.

🟢 The government extended subsidy support for companies operating Indian-flagged merchant ships until FY31. The extension improves vessel economics for GE Shipping, SCI, and Essar Shipping relative to foreign-flagged competition.

🔴 PM Modi urged Indians to avoid buying gold for at least one year to conserve foreign exchange reserves, sending jewellery stocks lower on opening. India imports approximately $45 bn of gold annually and even a moderate demand response would materially ease current account pressure during the ongoing energy import shock.

🟢 Commerce Minister Piyush Goyal says India secured greater EU seafood market access through trade negotiations, benefiting Avanti Feeds, Apex Frozen, and Kings Infra Ventures. The EU’s tariff on Indian seafood is significantly lower than the US’s 50% levy, making European rerouting a meaningful revenue substitution for exporters.

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.

🟢 Tata Consumer Products board approved ₹160 Cr to set up a 2,000 MT instant tea manufacturing facility in India. India’s instant tea market is growing at ~8% annually, driven by export demand and domestic premiumization.

🟢 Dabur revised India business revenue guidance upward to low double-digit growth for FY27, from its earlier single-digit target. Rural India, where Dabur derives ~45% of domestic revenues, is the primary driver behind this guidance upgrade.

🟢 Gravita India plans to expand lead recycling capacity at Jaipur by 42,000 MTPA with a ₹30 Cr investment, targeting completion by June 2026. India’s rising EV battery demand is accelerating secondary lead recycling.

🟢 JSW Infrastructure received permission to operate Berth No. 7 at Netaji Subhash Dock in Kolkata and targets cargo capacity of 400 MTPA by FY2030 from 183 MTPA currently, backed by ₹39,000 Cr combined capex across ports and logistics.

🟢 Royal Enfield (Eicher Motors) will invest ₹2,200 Cr in an Andhra Pradesh plant. This is Royal Enfield’s first dedicated manufacturing facility in South India, reducing production concentration away from the Chennai base.

🟢 Vijaya Diagnostic outlined a ₹140-150 Cr FY27 capex plan focused on a fully automated lab in Hyderabad. Diagnostic automation typically reduces cost per test by 20-30%, directly supporting EBITDA margin expansion in high-throughput lab operations.

🟢 Paytm (One 97 Communications) expects FY27 revenue growth acceleration and targets 15-20% EBITDA margins via payments, financial services, and marketing services recovery. Achieving this margin range would mark Paytm’s first meaningful EBITDA profitability milestone.

🟢 L&T won a significant contract valued between ₹1,000 Cr and ₹2,500 Cr. L&T’s order book now exceeds ₹5 lakh Cr, with infrastructure and clean energy verticals accounting for the majority of recent inflows.

🟢 Bondada Engineering won an ₹816 Cr EPC order from NTPC Green Energy for a 600 MW solar project at Fatehgarh, Rajasthan. This second NTPC mandate carries a 16-month execution window and directly supports the company’s guided FY27 revenue growth of 60-70%.

🟢 Tata Group and JSW Group are separately investing nearly $1 billion in EV and battery R&D to reduce reliance on Chinese technology. India’s EV sales surged ~70% in early 2026, underscoring the urgency for domestic battery IP and reduced import dependence.

🔴 Dixon Technologies is under ED investigation over its proposed Vivo-Dixon JV, according to media reports. A regulatory block on the JV would affect Dixon’s smartphone manufacturing scale-up plans tied to India’s PLI scheme.

🔴 An Expert panel linked Paraquat Dichloride to lung damage, kidney disease, and Parkinson’s risk, recommending a ban that would directly impact Dhanuka Agritech and Dharmaj Crop Guard. The chemical is already banned in 78 countries including the EU, and India remains one of the last major agricultural markets still permitting its use.

🟢 DFS Secretary indicated top 3 airlines may receive up to ₹1,500 Cr each in government support, a direct positive for IndiGo. Government intervention signals sector stress from elevated fuel costs driven by the ongoing West Asia conflict.

🔴 Bajaj Auto warns motorcycle industry growth could slow to 7-9% in FY27 due to rising fuel prices and metal inflation. The sector grew ~12% in FY26 and a deceleration to 7-9% would mark the sharpest single-year growth slowdown since FY22.

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.

In this Article…

1. What FII Flow Data Actually Tells You

2. The Fortnight at a Glance

3. Theme 1: The India Energy Infrastructure Bet

4. Theme 2: The Commodity Play

5. Theme 3: The Systematic Unwind of IT, Healthcare, and Consumer Services

6. Theme 4: Financial Services Is Being Reduced, Not Exited

7. Theme 5: Oil and Gas Exit

8. What This Means in Aggregate

Before we begin the analysis, let me just brief you on what the FII flow data actually is.

What FII Flow Data Actually Tells You

Foreign Institutional Investors (FII) are the largest category of external participants in Indian equity markets. They include global pension funds, sovereign wealth funds, hedge funds, and large asset management firms operating out of the US, Europe, and Asia.

Their buying and selling moves prices, shifts sector valuations, and often precedes broader market trends by several weeks.

Look at the chart below. The green box marks a period of sustained FII buying from early 2023, and the black line shows total FII investment value climbing steadily through that phase. The two red boxes mark the major selling episodes in late 2024 and early 2026, with the black line dropping sharply each time. The correlation is direct. When FIIs buy consistently, markets rise. When they sell in streaks, markets fall.

Heavy Selling in the last 2 Months

FIIs have sold approximately ₹1,70,000+ crore of Indian equities in the last 2 months alone.

That number gets most of the attention. But the sectoral breakdown tells a different story.

Within the selling, there is a rotation happening. Certain sectors are being bought across every fortnight even as everything else is sold.

Understanding that rotation is more actionable.

The Recent Fortnight at a Glance

This article covers the data till the latest fortnight of April 16-30, 2026.

Total inflows this fortnight (Apr 16-30) were ₹15,592 crore. Total outflows were ₹28,301 crore. Net selling was ₹12,709 crore.

That ₹12,709 crore figure matters for context. The prior fortnight saw net selling of ₹48,141 crore. This is the smallest net outflow in six fortnights. Selling pressure is not gone, but the peak appears to have passed.

On the inflow side:

• Power received ₹4,956 crore and Capital Goods received ₹4,667 crore. These were the only two sectors with significant net buying.

• Metals and Mining added ₹2,416 crore and Construction added ₹2,199 crore.

• Everything else on the inflow side was marginal.

On the outflow side:

• Financial Services led all selling at ₹11,704 crore.

• Oil, Gas and Consumable Fuels lost ₹3,351 crore.

• IT lost ₹2,887 crore, Healthcare lost ₹2,445 crore, Consumer Services lost ₹2,434 crore, and Telecom lost ₹1,908 crore.

Five clear themes emerge when we connect the latest fortnight data with the previous fortnights.

Theme 1: The India Energy Infrastructure Bet

• FIIs are placing a concentrated, consistent bet on India’s physical energy buildout.

• Power at +₹4,956 crore and Capital Goods at +₹4,667 crore are the two largest inflows this fortnight by a wide margin. Construction at +₹2,199 crore adds a third leg to the same thesis. Together, these three sectors absorbed ₹11,822 crore in net buying even as everything else was being sold.

• India’s installed non-fossil fuel capacity has tripled to over 250 GW since 2014. India has committed to 500 GW of renewable capacity by 2030.

• Achieving that target requires an estimated ₹25-26 lakh crore in sectoral investment through FY2030. It is a contracted pipeline that underpins cash flows for Power sector companies.

• Capital Goods companies making turbines, transformers, switchgear, and transmission equipment are the direct supplier chain to power companies.

• FII buying in Capital Goods is not a separate bet. It is buying the enabler of Power’s growth. The two sectors move together because they are structurally linked.

• The Union Budget 2026-27 raised public capex to ₹12.2 lakh crore. Rail, roads, and urban infrastructure all create new demand centers that require uninterrupted power supply. This extends the Power sector opportunity beyond renewable generation alone.

• AI data centers are becoming a meaningful driver within this theme. Data centers in India require 24x7 reliable baseload power. Their expansion is creating a structural demand floor that makes Power sector cash flows increasingly predictable for foreign investors with long holding horizons.

• FIIs have been accumulating in Power and Capital Goods across multiple fortnights even as they sold out of almost everything else.

• The weight of Capital Goods in FPI holdings has risen 0.29% in FY27 to date. Power has risen 0.12%. Both are rising despite aggregate outflows.

Theme 2: The Commodity Play

• Metals and Mining at +₹2,416 crore in the latest fortnight flipped from -₹1,198 crore in the prior fortnight.

• The immediate trigger was the US-China tariff escalation in early 2026. Chinese steel, aluminum, and base metal exports are being redirected away from the US market. This has created a global commodity repricing event. That is, in some markets, it created price pressure from oversupply. In others, it created supply tightness.

• India’s domestic steel companies benefit from this position. They have large captive ore bases and are selling into a domestic consumption story.

• The tariff disruption makes them relatively more attractive compared to producers exposed to the US-China trade corridor.

• Construction’s return to buying reinforces the commodity thesis. Infrastructure activity consumes steel, cement, and aggregates domestically.

• FII buying in both Metals and Construction at the same time is not a coincidence. It signals conviction on India’s internal demand for commodities, driven by the same capex cycle that is supporting Power and Capital Goods.

Theme 3: The Systematic Unwind of IT, Healthcare, and Consumer Services

• IT at -₹2,887 crore, Healthcare at -₹2,445 crore, and Consumer Services at -₹2,434 crore collectively account for ₹7,766 crore in outflows this fortnight.

• All three were FIIs’ primary overweight positions through FY2024. All three have been sold in nearly every fortnight since.

• The IT sell-off has two distinct layers.

  • The cyclical layer is US macro. Rising inflation expectations compress US growth forecasts, which reduce IT order books for Indian vendors. Deal ramp-up timelines are lengthening. Discretionary spending on legacy modernization is being deferred in favor of internal AI buildouts at large US enterprises.

  • The structural layer is more permanent. AI is fundamentally rethinking what software development costs. Agentic coding tools are compressing the number of engineers required to deliver the same output. Indian IT’s core value proposition was labor arbitrage at scale. That moat is being eroded from both ends. Clients are doing more with fewer seats, and the margin on each seat is under pressure.

• Large US enterprises that anchor the revenue of TCS, Infosys, Wipro, and HCL are actively renegotiating contracts. The conversation has shifted from “how many Engineers do we need” to “how much of this can AI handle.” FIIs see this structural shift clearly, and they are pricing it into their holdings.

• Telecom at -₹1,908 crore is being sold for a related reason. Telecom was the infrastructure play for India’s digital economy. If the software layer of the digital economy is being compressed by AI, the downstream demand assumptions for bandwidth, enterprise connectivity, and managed services weaken in parallel. The Telecom outflow is a downstream consequence of the IT thesis.

• Consumer Services has now seen 11 consecutive fortnights of net outflows. That is one of the longest single-sector selling streaks. Consumer Services includes hospitality, airlines, and discretionary experience spending. This sector’s sell-off is driven by war and global risk-off sentiment. High-PE consumption-driven sectors with limited margin buffer lose allocation first when global risk appetite contracts.

Theme 4: Financial Services Is Being Reduced, Not Exited

• Financial Services saw -₹11,704 crore this fortnight. That is the largest single-sector outflow.

• FIIs are reducing their Financial Services exposure, not exiting. The distinction matters. Reducing means they still hold a large position and are trimming. Exiting would mean a fundamental reassessment of the sector’s prospects.

• The evidence supports the reducing interpretation. Despite persistent net selling, the sector’s weight in FPI holdings has actually risen 0.57% in FY27 to date. The reason is price appreciation. Nifty Bank and Nifty Financial Services have both risen, so even as FIIs sell units, the rupee value of their remaining position has gone up.

• The selling in Financial Services is not a bear call on Indian banks or NBFCs. It is an emerging market risk-off response driven by two macro factors.

  • US 10-year yields remain elevated, making dollar assets more attractive relative to EM assets on a risk-adjusted basis.

  • The Iran conflict has added a geopolitical risk premium that reduces appetite for high-beta EM exposure.

• When either of those conditions reverses, Financial Services is likely to be the first sector where FII net buying returns. Historically, every major FII buying wave in India has started with Financial Services.

• If the April 30 fortnight is indeed a turning point in the aggregate selling cycle, watch Financial Services flows in the next two fortnights as the early indicator.

  ---

Theme 5: Oil and Gas Exit

• Oil, Gas and Consumable Fuels has been consistently among the top three sectors for outflows across the last 12 months. This fortnight’s -₹3,351 crore continues that trend.

• The weight of Oil, Gas and Consumable Fuels in FPI holdings has declined 0.57% in FY27 to date. That is the single largest weight reduction of any sector. FIIs are reducing exposure in absolute rupee terms, not just as a percentage of a rising portfolio.

• Two dynamics explain the selling.

  • First, the macro headwind. Higher crude prices from West Asia tensions raise India’s import bill, worsen the current account deficit, and reduce the appeal of rupee-denominated assets. Global FPI debt flows out of India were negative at USD 1.9 billion in April 2026. Part of that is oil-linked.

  • Second, and more structurally, the energy transition is a real capital allocation decision. Money coming out of oil refiners and gas distributors is moving into power generators and capital goods manufacturers. It is a rotation from the old energy economy to the new one.

  ---

What All This Means in Aggregate

When we connect the data from the previous fortnight, they tell a coherent story.

Exit the old economy: oil and gas, legacy IT labor arbitrage, rate-sensitive high-PE consumption plays.

Enter the new economy: India’s physical energy infrastructure, the capital goods supply chain, and domestic commodity demand.

Financial Services sits in the middle. It is being reduced due to macro conditions that have nothing to do with India’s banking fundamentals. It will likely be restored when those macro conditions improve.

What is already confirmed is the sectoral direction. FIIs have voted consistently with their money across multiple fortnights.

Power, Capital Goods, and domestic infrastructure are where global conviction sits right now. Everything else is either being trimmed or actively exited.

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.

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 Swaraj Engines Ltd (SWARAJENG).

Performance Chart

Quality Chart

Their Road to Consistency

1. Overview and Business Model

• Founded in 1985 as a joint venture between Punjab Tractors and Kirloskar Oil Engines, the company has supplied over 1.76 million engines since inception.

• The company manufactures diesel engines ranging from 22 HP to 65-plus HP for agricultural use. Engine sales contribute 96% of total annual revenue.

• Approximately 90% of all engines go to the Swaraj Division of Mahindra and Mahindra. One customer defines the business. That concentration is both the strength and the risk.

• In FY26, total engine sales volume crossed 2,00,000 units for the first time, reaching 2,02,771 units.

• The company also makes cylinder blocks, cylinder heads, and other components for Swaraj Mazda commercial vehicles. Spare parts add a recurring, low-volatility income stream.

• Mahindra and Mahindra holds a 52.13% controlling stake since September 2022.

• The Mohali plant in Phase IX of the Industrial Focal Point is physically adjacent to Mahindra’s Swaraj tractor assembly line.

• Q4 FY26 delivered the highest-ever quarterly engine volume of 55,004 units and PAT of ₹54.56 crore. The 16th consecutive quarter of year-on-year profit growth.

2. Mahindra’s Captive Engine

• Before September 2022, Mahindra held only a minority stake. Swaraj Engines was classified as an associate company. After the ₹296 crore acquisition, the relationship became structural.

• Mahindra paid a premium to secure its engine supply chain. This signals how strategically critical the Mohali plant is to the Swaraj tractor brand.

• Being the in-house engine supplier eliminates competition for orders.

• The Swaraj tractor brand recently crossed the 25 lakh cumulative production milestone. Every new Swaraj tractor requires a Swaraj Engine.

• Co-developed engineering roadmaps mean Swaraj Engines knows exactly what specifications the next generation of tractors will need. Capital planning becomes much more precise.

• Mahindra’s R&D centers support Swaraj Engines in meeting TREM IV and TREM V standards. R&D costs are shared across a ₹1.3 lakh crore group.

• Raw material procurement benefits from Mahindra Group’s bulk purchasing power, especially for steel and iron castings. Lower input costs follow from group scale.

3. Growing Before Demand

• Annual capacity expanded from 1,50,000 to 1,95,000 units in FY25. The company immediately utilized it, selling 1,68,820 units in FY25 and 2,02,771 units in FY26.

• FY26 volume of 2,02,771 units already exceeded the 1,95,000 unit capacity ceiling.

• The board approved ₹220 crore for the next phase, targeting 2,40,000 units per year by 2027. Not a single rupee will be borrowed for this. Internal cash will fund it fully.

• Capital work in progress jumped from ₹4.77 crore in FY25 to ₹54.81 crore in FY26.

• Total capex on fixed assets in FY26 reached ₹69.79 crore, nearly three times the FY25 spend of ₹24.46 crore. The investment pace is accelerating.

• New plant upgrades include vertical storage and automated assembly tools. These reduce cycle times.

• By FY27, the 2,40,000 unit capacity will represent 60% growth over the 1,50,000 units in FY22. The factory is scaling in step with Mahindra’s rural market ambitions.

4. More With Less

• The company had 289 full-time employees in FY25, down from 351 in FY21. Revenue per employee works out to approximately ₹6.94 crore per year.

• Employee costs at 3.4% of net revenue stand far below the 8 to 15% norm for Indian auto-ancillary companies.

• Finance costs in FY26 were just ₹39 lakh for the full year. This covers lease liabilities only. There is no interest burden eroding the PBT line.

• Operating profit margins held near 13.5% even through the steel and iron price volatility of 2022 and 2023.

• Operating profit before working capital changes was ₹269.17 crore in FY26. PBT was ₹266.98 crore. That is 100% cash conversion.

• Revenue grew 19.3% in FY26. Absolute employee costs grew only modestly.

• The company runs a single reportable segment: diesel engines and components. No unrelated diversification, no cross-subsidies, no management distraction.

5. Rural India Mechanizes

• The Indian tractor market reached nearly 9.4 lakh units in FY25, up 7.3% from the prior year. The total market value crossed ₹75,000 crore. This is a large and consistently growing pool.

• Agricultural labor scarcity is structural, not cyclical. Fewer young people want to do manual farm work. Tractors fill the gap. This creates a demand floor that holds even in softer years.

• The Minimum Support Price for wheat and paddy rises almost annually. Higher crop income gives farmers both the surplus and the confidence to buy new tractors.

• The 41 to 50 HP segment accounts for roughly 50% of all tractor sales in India. Swaraj Engines dominates this exact range with engines for the Swaraj 744 FE and similar models.

• Agricultural credit disbursal from nationalized banks and NBFCs has improved. Tractor loans are now accessible to a broader set of farmers. Affordability expansion drives incremental volume.

• Horticulture and orchard farming are growing in Punjab, Rajasthan, and Maharashtra. Compact tractors for sub-30 HP applications are gaining share. Swaraj has product offerings in this segment too.

• The trend toward higher horsepower is also a revenue lever. A 50 HP engine earns more per unit than a 35 HP unit. As farmers upgrade their equipment, average selling price per engine rises.

• Reservoir levels, groundwater data, and state-level rainfall figures are monitored monthly by management. These are genuine leading indicators for the quarterly order book.

6. Regulatory Barriers

• TREM V norms will require sharply lower soot and nitrogen oxide emissions from tractor engines. Only manufacturers with advanced fuel injection capability and precision casting processes can comply.

• For tractors above 50 HP, Swaraj Engines has already completed the transition to TREM IV norms. TREM V is the natural next step.

• The 25 to 75 HP segment, which covers the highest-volume tractor category, has until 2032 to adopt TREM V. This runway allows disciplined, planned investment.

• The upcoming TREM V transition is expected to raise tractor prices by 15 to 20% in high-volume segments. Pre-norm buying spikes boost near-term volumes. Swaraj Engines benefits on both ends.

• The ₹220 crore factory expansion includes specific technology upgrades for TREM V readiness. Compliance investment and capacity investment are combined into one project.

• Mahindra Group R&D centers share the cost of developing clean-air engines. This advantage is not available to standalone engine makers.

• Swaraj Engines is also evaluating CNG as an alternative agricultural fuel for the future. This forward-looking exploration ensures the company does not become irrelevant in a post-diesel transition.

7. Built in Punjab

• The Mohali plant sits inside Phase IX of the Industrial Focal Point, physically adjacent to the Swaraj tractor assembly lines. Moving engines a short distance cuts logistics cost and delivery time.

• Punjab was the epicenter of India’s Green Revolution. The regional workforce carries decades of mechanical and agricultural engineering experience.

• The local vendor ecosystem supplies specialized bolts, valves, gaskets, and precision castings. These relationships have deepened over 40 years. Replicating this network elsewhere takes decades.

• Industrial investment in Punjab is expected to reach ₹1.50 lakh crore by 2025. Improved roads, power supply, and logistics infrastructure benefit the Mohali plant.

• The CSR initiative Project Pani focuses on water conservation in Punjab and Rajasthan. This maintains goodwill with the farming communities who are the end-users of the engines.

• The company has operated without any major labor strikes or production disruptions since 1985. Four decades of stable industrial relations in one location is an undervalued competitive advantage.

• Hiring preferences favor candidates from farming families. Workers who grew up on farms understand how engines perform under real field conditions.

• The third expansion of the Mohali plant, targeting 2,40,000 units, deepens the commitment to this exact location.

8. Risks & Red Flags

• Nearly 90% of revenue comes from one entity: the Swaraj Division of Mahindra and Mahindra. If Mahindra ever decides to build engines in-house or shifts strategy, the impact would be catastrophic. This is the single biggest risk.

• The tractor market is deeply monsoon-dependent. FY24 saw volumes decline 7% due to erratic rainfall. Two consecutive bad monsoon years would materially compress Swaraj Engines’ volumes, revenue, and margins simultaneously.

• All production sits in a single Mohali facility. Any natural disaster, extended power outage, or labor stoppage would shut down 100% of capacity. Geographic concentration amplifies operational risk significantly.

• Trade receivables rose from ₹177.22 crore in FY25 to ₹206.18 crore in FY26. Revenue grew 19.3% but receivables grew at a similar pace.

• TREM V compliance requires continued capital investment beyond the ₹220 crore project. If implementation timelines shift or cost estimates run over, the cash position that makes this business look bulletproof could come under pressure.

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.

🟢 Adani Ports plans to invest up to ₹13,000 Cr for fleet scale-up, expanding marine fleet from 136 to around 200 vessels by 2031. Marine services grew 134% YOY in FY26 to ₹2,681 Cr, already commanding 70% of India’s domestic marine services market.

🟢 Apollo Pipes plans brownfield expansion at Dadri to cater to strong North India demand, targeting total company capacity of approximately 286,000 tonnes over the next two years. Management also targets 25%+ revenue CAGR over three years. The Mirzapur greenfield plant commenced operations in April 2026, adding 30,000 tonnes. North India contributes 60-65% of Apollo Pipes revenue, making this expansion the company’s highest-priority capacity move.

🟢 United Breweries launched Amstel Grande packaged drinking water in 200ml and 500ml formats. India’s branded packaged water market is estimated at approximately ₹25,000 Cr, growing at 12-15% annually, signalling UB’s intent to diversify beyond alcoholic beverages.

🔴 United Breweries management anticipates a cost impact of ₹400-500 Cr over the next 2-3 quarters from energy, fuel, packaging, FX, and aluminium pressures. Against FY25 EBITDA of approximately ₹1,100 Cr, this implies a 36-45% near-term earnings drag if volume growth fails to absorb it.

🔴 Blue Star flagged extremely poor margin visibility due to volatile commodity prices, exchange rates, and potential electronics shortages linked to helium constraints. Current 8-8.5% EBITDA margins are not expected to sustain through 2030 as competition and capacity additions intensify. On a positive note buildings, data centre, and factory enquiries grew 35% in Q4FY26, providing volume support.

🔴 MRF said the Middle East conflict has caused an uncontrolled increase in raw material costs and supply chain disruptions that are expected to continue. MRF spends over ₹10,000 Cr annually on raw materials, primarily natural rubber and crude-linked synthetics.

🟢 Cochin Shipyard subsidiary UCSL received a new order from Ocean Sparkle (Adani Group) for ASD tugs valued between ₹100 Cr and ₹250 Cr. UCSL has now delivered multiple Ocean Sparkle vessels ahead of contractual deadlines, cementing its position as the preferred repeat-order shipbuilder for Indian-flag harbour tugs.

🟢 Arisinfra Solutions secured an 8-month Developer-as-a-Service contract with Wadhwa Group targeting ₹650 Cr of inventory monetisation at Wadhwa Wise City in Panvel. Panvel is adjacent to the upcoming Navi Mumbai International Airport, making it one of the fastest-appreciating residential market in Mumbai.

🟢 CleanMax revised its Apple India renewable energy deal, with Apple India acquiring approximately 49% in Taurus Platform while CleanMax retains 51%. The ₹100 Cr initial investment targets 150+ MW of new renewable capacity, supporting Apple’s carbon-neutral-by-2030 supply chain mandate across India.

🔴 Cocoa futures jumped as much as 7.7% in New York. Sustained spikes are directly negative for Indian chocolate and confectionery companies, with Nestle India and Mondelez India being the most exposed listed entities.

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.

🟢 Hero MotoCorp plans a ₹1,500 Cr investment to double capacity for scooters and EVs. India’s scooter penetration in the two-wheeler market remains below 40% and Hero targets 10-plus EV models across price segments by FY27.

🔴 UBL reports West Asia war impact on the beer industry with cost pressures of ₹400-500 Cr expected this quarter. Barley, glass, and aluminum input costs are rising from shipping disruptions as Middle East freight routes remain constrained.

🟢 Coforge management expects FY27 to be an exceptional year with consolidated EBITDA margins projected at 20.5-21%. Mid-tier IT firms are gaining wallet share as enterprises shift spending toward agile niche partners from large incumbent vendors.

🟢 NMDC raises iron ore prices from May 6: Baila Lump at ₹5,500/tonne and Baila Fines at ₹4,700/tonne, up ~3.8% vs April prices. The hike raises input costs for non-captive steelmakers dependent on market-linked ore procurement.

🟢 L&T wins ₹10,000-15,000 Cr from JSW Steel for engineering, procurement, and installation of blast furnaces and steel melt shops at Ballari and Paradip, its largest-ever domestic metals sector order. JSW Steel is scaling crude steel capacity from 35 MTPA to over 50 MTPA by 2031, requiring a 15 MTPA addition.

🟢 SPML Infra wins a ₹1,128 Cr BESS contract from NTPC for a 1 GWh battery energy storage system at Barauni Thermal Power Station, Bihar, against a market cap of ~₹1,900 Cr. India’s BESS market is projected to reach $19 billion by 2035 at a 24% CAGR.

🟢 GK Energy gets empanelment from MSEDCL for 15,000 off-grid solar pump systems worth ₹353.89 Cr under the Magel Tyala Saur Krushi Pump Yojana. Maharashtra targets solarization of 44 lakh agricultural pump connections under this flagship state scheme.

🟢 BEL wins ₹1,476 Cr from the Defence Ministry for five Ground-Based Mobile Electronic Systems to enhance the Indian Army’s radar detection and electronic warfare capability. GBMES is developed by DLRL Hyderabad and carries 72% indigenous content under the IDDM procurement category.

🟢 Cabinet approves ₹5,659 Cr for the Mission for Cotton Productivity (FY27 to FY31) to address yield gaps and quality concerns in India’s cotton sector. India’s cotton yield of 755 kg/hectare trails the global average of ~833 kg/hectare and the mission targets production of 49.8 million bales by FY31.

🔴 NSE’s derivatives ADT fell ~26% in April after the STT hike on F&O while BSE’s F&O ADT jumped ~20% MoM to ₹269 lakh Cr. This marks a structural market share reversal as BSE’s F&O segment was near-negligible just two years ago.

🟢 India’s April Services PMI came in at 58.8 vs 57.5 in March while the composite PMI rose to 58.2 vs 57.0. India’s composite PMI of 58.2 is among the highest globally and has stayed above 50 for nearly five consecutive years.

🟢 Truck and tractor retail sales surged in April with CVs up 15% YoY and tractors up 23% YoY per FADA, both hitting record April highs. The simultaneous surge signals concurrent recovery across urban commercial logistics and rural agricultural demand.

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.

🟢 KEI Industries guided volume growth of 17-18% for FY27 led by the Sanand plant, with overall revenue growth guidance well above 20%. The Sanand facility targets the fast-growing data centre and renewables cable segment, which is scaling at 25%+ annually.

🟢 APL Apollo Tubes management reaffirmed FY26 guidance of 15 to 20% volume growth, 20 to 25% EBITDA growth, and 25 to 30% PAT growth; CapEx of ₹1,400-1,500 Cr for 1 million tonnes from internal accruals over the next 2.5 years. Steel tube demand from affordable housing and urban infrastructure is growing at 12-14% CAGR, providing multi-year PAT compounding visibility.

🟢 Coal India commissioned a 100 MW solar power plant in Gujarat. This is Coal India’s first major renewable commissioning toward its 3,000 MW solar target.

🟢 AGI Greenpac announced a ₹1,000 Cr aluminium-can manufacturing plant in Hathras, UP, with 1.6 billion cans per year capacity, scheduled for H1 2027 commissioning. India’s aluminium can market is growing at over 15% annually as FMCG companies accelerate the shift from glass and PET.

🔴 Force Motors April total sales fell to 3,113 units from 3,255 units YoY, a 4.4% decline. Softness in defence and institutional segments, which account for over 60% of Force Motors volumes, is the primary drag.

🟢 BEL bagged a ₹1,251 Cr order for supply of Ground Based Mobile ELINT Systems (GBMES) to the Indian Army.

🟢 L&T won a large order (₹2,500–5,000 Cr range) from BCGCL, a CIL-BHEL JV, for a coal-to-ammonium nitrate plant in Odisha with 2,000 TPD capacity under Aatmanirbhar Bharat. India targets 100 million tonnes of coal gasification capacity by 2030, creating a long-term EPC pipeline.

🟢 Tata Power JV signed a $515 M financing pact with the World Bank for the 1,125 MW Dorjilung Hydropower Project in Bhutan, with 80% of annual output to be supplied to India under a PPP model. Total project cost is $1.7 B, with the World Bank financing expected to catalyse $900 M in additional private capital.

🟡 TCL Corporation is in early talks to sell a 51% stake in its India plant for up to $800 M; potential buyers include Dixon Technologies, Epack Durable, Syrma SGS Technology, Amber Enterprises, and Uno Minda. A transaction of this scale would be India’s largest consumer electronics M&A and immediately double the acquirer’s manufacturing revenue run rate.

🟢 India’s coffee exports jumped 27% in January-April 2026 on strong Robusta and instant coffee demand, directly benefiting CCL Products and Vintage Coffee. India is now the world’s 6th largest coffee exporter, and Robusta premiums over Vietnam are at a 5-year high.

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.

🟢 Maruti Suzuki starts FY27 with a market share of 42%, up from 39% in FY26, led by passenger cars and SUVs. Record April domestic sales of 1,91,122 units were powered by a 141% YOY surge in SUV volumes, with the segment nearing category leadership.

🟢 Bajaj Auto reports April total sales of 5,13,792 units vs 3,65,810 units YOY, beating the estimate of 4,80,080 units. Exports surged 83% YOY to 2,65,582 units, making international markets the primary FY27 growth driver.

🔴 Ashok Leyland reports April total sales of 14,646 units vs 13,421 units YOY, slightly below the estimate of 15,800 units. LCV domestic volumes rose 23% YOY and M&HCV trucks grew 15%, but export headwinds and bus segment softness capped the overall result.

🟢 Ather Energy delivers highest-ever quarterly volumes of 83,418 units, up 76% YOY, with adjusted gross margin jumping 116% YOY to ₹925 Cr in FY26. Q4 net loss narrowed 57% YOY to ₹100.2 Cr, signalling improving unit economics. It also announces 10 lakh units of total manufacturing capacity, with Phase-I of 5 lakh units commencing from Q3 FY27. The Aurangabad facility at approximately 42,000 units per month anchors Phase-I, targeting the ₹1 lakh to ₹1.3 lakh EV price segment.

🟢 Netweb Technologies guides for 30-35% revenue growth in FY27. AI segment contribution has risen sharply to 43% from 15% previously, driven by deepening hyperscaler and enterprise AI infrastructure deployments across India.

🟢 Adani Ports handles 43.1 MMT of cargo in April 2026, up 15% YOY, led by containers and dry cargo both rising 17% YOY. Logistics rail volume fell 16% YOY to 48,490 TEUs, a divergence that could weigh on higher-margin integrated logistics revenue.

🟢 Lloyds Metals commissions its second 4 MTPA pellet plant at Konsari, taking total pellet capacity to 8 MTPA and ranking among India’s largest merchant pellet players.

🟢 BSE has overtaken NSE in the F&O segment with 55.4% market share in April while NSE dropped to 44.6%.

🟢 EMS Limited receives a ₹143.80 Cr letter of award for sewer network and house connection work in Varanasi from UP Jal Nigam.

🟢 Knowledge Marine and Engineering Works acquires approximately 15 acres of waterfront land in Saphale, Palghar for shipyard expansion near Vadhvan Port. Vadhvan Port’s 298 MTPA capacity ambition creates long-term anchor demand for proximate shipbuilding and repair infrastructure.

🟢 Tata Chemicals’ board approves ₹100 Cr investment to debottleneck salt capacity at Mithapur, targeting 82,500 TPA additional output. Mithapur is India’s largest integrated salt complex and this low-capital investment delivers roughly 12% incremental capacity.

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.

🟢 NCC Limited secured 4 new orders worth ₹1,703.27 Cr in April 2026. The intake spans road, building, and water verticals, supporting NCC’s total order book above ₹55,000 Cr.

🟢 Welspun Enterprises secured the ₹7,300 Cr Pune-Shirur highway project, lifting its order book to ₹18,755 Cr. The 53.4 km six-lane NH-753F corridor runs on a 29-year DBFOT toll concession, providing long-term annuity-like cash flows.

🟢 Shakti Pumps won an order worth ₹155 Cr, adding roughly 25% to its quarterly revenue run rate.

🟢 Texmaco Rail received ₹187.28 Cr from Southern Railway to install interlocking systems at 183 level crossing gates. Indian Railways targets elimination of all unmanned level crossings by 2027, creating a sustained order pipeline for this segment.

🟢 Sona BLW Precision added ₹580 Cr to its order book via 4 major EV and hybrid programs from global and domestic OEMs.

🟢 Bharat Forge will acquire a 30% stake in Fortuna Engineering for ₹129.60 Cr with an option to take majority control. Fortuna is a Nashik-based maker of connecting rods and camshafts reporting ₹322.5 Cr in FY25 sales to leading automotive OEMs.

🟢 Firstsource Solutions partnered with Typeface to launch an Agentic Marketing Service using Typeface’s generative AI platform. Enterprise agentic AI in marketing is a rapidly growing segment with a global addressable market projected above $50B by 2028.

🟢 Hindustan Unilever guided that FY27 will be better than FY26 with margins above guidance levels. HUL delivered 6% volume growth in Q4FY26, its best quarterly print in recent years, signalling a broad-based consumption recovery.

🟢 Tata Power Renewable Energy board approved a ₹6,500 Cr investment in a 10 GW solar ingot and wafer facility across two 5 GW phases. India imports over 90% of its wafer requirements from China, making this a critical backward integration move for domestic solar supply chains.

🟢 Adani Power will evaluate international projects in thermal and hydro sectors beyond Indian geographies. International expansion signals Adani’s confidence in balance sheet strength.

🟢 Smartworks Coworking Spaces enters FY27 with over ₹5,200 Cr in multi-year contracted rental revenue visibility. Flex office demand in India is growing at over 30% annually as enterprises shift to managed workspace models for cost efficiency.

🟢 IRDAI is set to introduce a strong code of conduct for hospital insurance claims, a positive for hospital stocks. Standardised claims protocols would reduce billing disputes and improve working capital cycles for listed hospital chains including Apollo, Fortis, and Aster.

🟢 TRAI released a consultation paper on the regulatory framework for Vehicle-to-Everything communication, benefiting KPIT and Tata Elxsi. V2X is a mandatory infrastructure layer for autonomous and connected vehicles, a global market projected above $20B by 2030.

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.

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 Shivalik Bimetal Controls Ltd (SBCL).

Performance Chart

Quality Chart

Their Road to Consistency

1. Overview and Business Model

• Imagine your circuit breaker at home. When electricity overloads, a tiny metal strip bends from heat and cuts the power before a fire starts. Shivalik makes that metal strip. They also make the tiny sensors inside EV batteries that prevent them from exploding, and inside smart electricity meters that measure your bill.

• SBCL operates 3 manufacturing campuses in Solan, Himachal Pradesh. It partners with 300+ OEM and Tier-1 customers across 38 countries.

• Three product segments drive revenue.

  

  • Thermostatic bimetals contribute 44.21% (₹224.84 crore),

  • shunt resistors 41.76% (₹212.37 crore), and

  • electrical contacts 14.03% (₹71.33 crore).

• Exports account for 56.22% of FY25 revenue.

2. Bimetal Monopoly

• Shivalik controls roughly 90% of India’s thermostatic bimetal market. Almost every switchgear manufacturer here depends on them.

• The company offers 77 proprietary bimetal grades. The global median for competitors is around 10 grades.

• Diffusion bonding fuses metals at the atomic level under high heat and pressure. Each grade gets a unique metal recipe involving nickel, copper, and manganese.

• The global bimetal market is projected to grow from ₹1,600 crore to ₹2,800 crore by FY30. Shivalik holds 16% today and is targeting 22%. Growing in an expanding market is relatively easier.

• In the switchgear application, bimetals are the heat-sensing element that trips circuit breakers. Switchgear accounts for roughly 80% of bimetal supplies, per the Q3 FY26 earnings call.

• Household appliances contribute 15-20% of bimetal segment revenue. Irons, geysers, and coffee makers generate repeat orders that are demand-inelastic.

• In 9M FY26, bimetal Europe revenue grew 47.95% year-on-year to ₹36.81 crore. This happened when European industrial demand was broadly weak.

• Bimetal capacity utilisation is only 38-39% currently. The company can more than double output without new factory construction.

3. Electron Beam Welding Edge

• Electron beam welding fires electrons at high velocity in a vacuum to fuse dissimilar metals. The joint is exceptionally clean and does not disturb electrical conductivity. Precision here is non-negotiable for battery sensing.

• Shivalik is India’s only EBW shunt resistor manufacturer. Every domestic competitor must import these parts.

• Globally, the primary competitor is Isabellenhütte of Germany. Being the only credible alternative to a German leader gives global OEMs a politically important second source. The China-plus-one and Germany-plus-one logic both benefit Shivalik.

• Shivalik commands 12-13% of the global shunt market and is targeting 18%. The segment grew at a 5-year CAGR of 20.48% through FY25. This is the fastest-growing segment in the portfolio.

• The shunt manufacturing process involves 14-15 sequential in-house steps after the initial weld. Each step adds to the defensibility. Replicating this entire chain takes years and substantial capital.

• By 9M FY26, shunt revenue reached ₹171.45 crore, up 9.28% year-on-year. India shunts grew 21.18% in the same period. The domestic smart meter rollout and recovering exports are driving this acceleration together.

• In EV Battery Management Systems, shunts measure cell-level current in real time. Incorrect measurement means battery fire risk or premature degradation. Tier-1 automotive qualifications for these parts take 1-2 years to obtain.

• About 60% of shunt revenue goes to automotive and 35% to energy meters, per the Q3 FY26 call. This split means Shivalik benefits whether you buy a new car or a smarter electricity meter. Two independent demand drivers.

• Shivalik operates Asia’s largest EBW strip facility. Scale enables large supply agreements with global giants.

4. In-House Machine Advantage

• Building an EBW (Electronic Beam Welding) machine in-house costs Shivalik approximately 50% less than buying from a global supplier.

• A machine ready in six months versus two years. It lets management respond to demand signals immediately. In a market growing at 20%, six months of lost capacity is meaningful lost revenue.

• Shivalik operates 8-9 specialized EBW machines, each a custom build. Every new machine is better than the last.

• No external technician accesses the core welding machinery. Intellectual property stays entirely within the factory walls.

• In-house machine building directly supports the EBITDA margin profile. Royalties and service fees to external vendors are eliminated.

• FY25 capex was ₹29 crore while operating cash flow was ₹92 crore. This is one of the cleanest capital efficiency ratios in Indian small-cap manufacturing.

• The new Pune bus bar facility, approved in Q3 FY26, required only ₹20 crore capex. The expensive EBW equipment already exists in Solan. Pune is incremental assembly infrastructure riding existing technology.

• MD Kabir Ghumman said it directly: “Our dual-process fortress of EBW and diffusion bonding is unique globally. Competitors face euro-denominated inflation and 24-month lead times.”

5. Smart Meter Tailwind

• The Indian government sanctioned 250 million smart meters under the RDSS programme, targeting completion by 2025-27. This is one of the world’s largest electrical infrastructure rollouts. Shivalik is directly embedded in the supply chain.

• A smart meter’s shunt resistor converts electricity flow into a measurable signal for billing. Without it, the meter cannot work. Shivalik components represent about 70% of relay bill-of-materials.

• The global smart meter market is projected to grow from $250.7 million in 2023 to $763.2 million by 2031 at roughly 15% CAGR.

• In 9M FY26, India shunt revenue grew 21.18% year-on-year to ₹62.37 crore. This is the strongest geographic growth for the shunt segment.

• HPL Electric, one of India’s largest meter manufacturers with a 20% domestic market share, uses Shivalik components.

• The RDSS programme includes localisation clauses, giving Indian component makers a structural edge. Foreign suppliers face additional compliance cost.

• Shivalik has applied under the ECMS scheme, the successor to PLI, per the Q3 FY26 call. Approval is pending. Qualifying would provide direct financial incentives linked to revenue growth.

• Smart meter latching relays also use Shivalik’s electrical contacts. The same government rollout that drives shunt demand simultaneously drives contacts segment demand. Two product lines benefit from one policy.

• Smart meter shunts barely existed as a revenue line in FY22. They now contribute roughly 35% of total shunt revenue. A market created almost from scratch within 5 years.

6. EV Electrification Bet

• An EV battery pack needs a shunt at every cell group to monitor current in real time. This is a safety and performance requirement. The shunt content value per EV is 3x higher than per petrol car.

• Shivalik supplies Tier-1 names like Bosch, Continental, and Denso. These companies build systems that go into vehicles from Tesla, BMW, and Ford.

• Vishay, which buys approximately 40% of Shivalik’s shunts, has developed components for the top two global EV manufacturers. Per the Q3 FY26 call, this business is already in regular supply.

• The global EV shunt market stood at $2.98 billion in 2024 and is projected to reach $4.09 billion by 2029. Shivalik is targeting 17-18% of this market. Current global share is 12-13%.

• The board in Q3 FY26 approved a new Pune facility for automotive bus bars, EBW-welded connectors, and assemblies. Revenue guidance for the forward integration initiative: ₹70-75 crore in FY27, ₹150-200 crore in FY28, ₹250-300 crore by FY29.

• Bus bar assemblies for two-wheelers carry a value of ₹2,000-3,000 per vehicle. Shivalik previously supplied components worth ₹100-400 per vehicle.

• The two EV two-wheeler development partners are India’s number-one and number-two two-wheeler manufacturers overall, per Q3 FY26 call. Their scale means small adoption percentages translate into large order volumes.

• Hybrid cars also use Shivalik shunts, just like pure EVs. Even if full EV adoption takes longer, the hybrid transition alone provides demand growth.

• The EV shunt market is projected to grow at a 32.5% CAGR through 2030 globally. Shivalik entered the shunt business in 2015. Ten years of accumulated knowhow in the fastest-growing segment of precision electronics. Well-timed entry.

7. Global Export Strength

• Export share grew from 52% in FY18 to 56.22% in FY25.

• Sales offices operate in Brazil, the USA, Italy/EU, Russia, Japan, Taiwan, South Korea, and China. These offices track OEM needs before they become competitive tenders.

• Shivalik Bimetals Europe SRL was established in Italy during FY25 as a wholly owned subsidiary. Local presence reduces response time and trade friction for EU customers.

• In Q3 FY26, shunt revenue from Europe surged 98.64% year-on-year. Bimetal Europe grew 42.04%. Two product segments are gaining EU market share simultaneously.

• The US Americas market, hit by tariff uncertainty, is recovering.

• Management confirmed on the Q3 FY26 call that Vishay’s US-facing business is in regular supply and expected to return to peak levels in FY27.

• Western OEMs are diversifying supply chains away from China under dual-source policies. Shivalik, as India’s only EBW shunt house, is the natural beneficiary.

• Export revenue also naturally hedges input costs. Nickel, copper, and manganese are imported and priced in dollars. Dollar export earnings offset this input cost exposure.

• Asia (others) shunt revenue in 9M FY26 grew 36.65% year-on-year to ₹45.96 crore. New industrial projects in Vietnam, Thailand, and South Korea are driving this.

8. Swiss Alliance Play

• Metalor Technologies is a global leader in precious metal refining and processing. Being part of the Tanaka Group, it sits at the top of the global materials science hierarchy.

• Electrical contacts are silver-alloy tips inside switches and relays that enable and interrupt current flow. Shivalik manufactures them via brazing, welding, and cladding.

• The contacts segment delivered ₹71.33 crore in FY25 at a 5-year CAGR of 16.26%. It is growing, but the Swiss partnership is designed to accelerate it into a genuinely large segment over the next few years.

• Shivalik already acquired full ownership of Checon Corporation (USA) in FY23. Checon was a previous JV partner in contacts technology.

• Plant 3 in Solan is dedicated to electrical contacts and carries a stated revenue capacity of ₹300 crore. Current contacts revenue is ₹71 crore.

• The PCBA pilot line was initiated in FY25. Per Q3 FY26, PCB assembly development is ongoing alongside the bus bar initiative. Together, these represent Shivalik’s ascent from component maker to sub-assembly provider.

9. Risks and Red Flags

• Raw material prices for nickel, copper, and manganese fluctuate with global commodity cycles. Shivalik has pass-through contract clauses, but with a quarterly lag.

• Vishay accounts for approximately 40% of shunt resistor revenue. Any slowdown in Vishay’s programmes directly hits Shivalik’s top line. FY25 and 9M FY26 demonstrated this vulnerability when US tariff disruptions cut Vishay’s order volumes.

• All three manufacturing plants are located in Solan, Himachal Pradesh. One major landslide, prolonged strike, or power disruption could halt all production simultaneously. No backup facility exists in another Indian geography. A single-site concentration risk.

• Thermostatic bimetal technology faces long-term displacement risk from digital temperature sensors and solid-state switches. As digital alternatives become cheaper and more precise, mechanical bimetal switches may gradually lose volume in newer device designs.

• The German competitor Isabellenhütte is substantially larger and better-resourced. Shivalik must innovate continuously to maintain its position as the primary global alternative.

• Working capital days rose to 265 in 9M FY26 versus 247 in 9M FY25. Receivable days increased by approximately 12 days. If this trend continues, it will compress free cash flow even as profits grow.

• The busbar assembly business carries EBITDA margins 8-10 percentage points below core products. At ₹250-300 crore scale, this could dilute consolidated margins unless core product margins simultaneously expand. Investors should track this mix shift quarterly.

• US tariff policy remains unpredictable. Americas revenue declined in both bimetals and shunts in Q3 FY26. Any re-escalation of tariffs post the current 90-day pause would stall the US recovery that management is counting on for FY27 growth.

• India’s domestic bimetal switchgear revenue declined 6.67% in 9M FY26 and 11.66% in Q3 FY26. The domestic switchgear market has been broadly flat for multiple years.

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.

🟢 Indian Hume Pipe (IHP) receives ₹458.69 Cr work order from Telangana’s Public Health and Municipal Engineering Department for a water supply improvement scheme in Greater Warangal Municipal Corporation, 24-month execution. The contract is UIDF-funded and adds to multiple ₹400+ Cr government water wins IHP has secured in FY26.

🟢 Bajel Projects wins two ultra-mega EPC orders cumulatively valued above ₹400 Cr from a MENA client for 500 kV overhead transmission lines (Lot 1 and Lot 5), with an 11-month completion timeline. This follows Bajel’s February 2026 JV with Saudi Arabia’s Al Sharif Group.

🟢 Tanfac Industries signs a long-term domestic supply agreement with Blue Star for fluorinated products at ₹61 Cr annually, strengthening specialty chemicals revenue visibility. Blue Star ranks among India’s top four room AC brands by volume, making this a recurring, high-renewal offtake anchor for TANFAC.

🟢 E2E Networks secures a USD 7.7 million (₹73 Cr) six-month agreement with a US-based AI service provider specialising in large-scale model training for GPU cloud computing services. This is among E2E’s largest single international contracts, validating its GPU infrastructure against AI workload demand.

🟢 Magellanic Cloud announces a $11 million UAV JV with Rayonix Tech and Israel’s Xtend to establish manufacturing, testing, and distribution capabilities for drone systems in India. Xtend’s XOS-powered platforms including SCORPIO and WOLVERINE are already combat-deployed in active global operations.

🟢 Ideaforge Technology enters a non-binding MOU with Japan’s Digital Media Professionals (DMP) to co-develop Di1 edge AI-powered VTOL drones for the Japanese market. Japan’s defence drone market is projected to reach $5.1 billion by 2034 from $2 billion in 2025, a 10.6% CAGR.

🟢 Navin Fluorine maintains a strong FY27 outlook with ₹236.5 Cr capex for up to 15,000 MTPA R32-equivalent HFC capacity at its Surat unit on track for Q3FY27 commissioning. At full utilisation, this single expansion targets ₹600 to 825 Cr in incremental annual revenue.

🟢 Netweb Technologies launches Tyrone ParallelStor Velox, a unified AI and HPC data platform integrating flash, disk, tape, and cloud in a single global namespace to eliminate data bottlenecks. Built for India’s sovereign AI infrastructure push, it targets government, BFSI, and research sectors where data locality is a hard requirement.

🟢 Shyam Metalics has deployed ₹8,700 Cr and proposes ₹2,700 Cr in additional capex within its ₹16,060 Cr pipeline, executing the balance over the next three to four years. The fresh capital targets SBQ and stainless steel, shifting product mix toward higher-margin, import-substituting segments.

🟢 Urban Company plans to launch an AC-purifier combo under its Native brand ahead of Diwali 2026. AC servicing is Urban Company’s highest-volume category in India, giving the Native brand a structural service distribution edge over conventional OEMs.

🔴 Delhi HC warns Dr. Reddy’s Laboratories over Olymviq trademark compliance, asking it to file a fresh undertaking on its status since the 30 March order directing discontinuation of the Olymviq name and transition to Olymra. The dispute, filed by Novo Nordisk, centers on phonetic similarity between Olymviq and Ozempic for Dr. Reddy’s semaglutide drug.

🔴 FSSAI proposes a mandatory shift to paper, cellulose, or naturally derived packaging for pan masala, gutka, and tobacco, banning all plastic and metallised laminates under a draft amendment to the Food Safety and Standards (Packaging) Regulations, 2018. The draft is open for 30-day stakeholder consultation and directly targets India’s multi-billion-rupee flexible plastic laminate packaging segment.

🔴 Global Jewellery demand fell 23% year-on-year to 300 tonnes in Q1 2026 as gold averaged a record $4,873 per ounce. China fell 32%, India fell 19%, and the Middle East fell 23%.

🟢 India seeks access to Anthropic’s Mythos AI model for domestic companies, with talks ongoing with the US administration and Anthropic officials. Mythos reportedly identifies tens of thousands of zero-day software vulnerabilities at scale, far exceeding the roughly 500 flagged by Anthropic’s prior Opus model.

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.

🟢 BHEL entered a LAToT (Licensing Agreement for Transfer of Technology) with NSTL-DRDO covering fabrication, installation, and commissioning of the LM2500 GT-IRSS for naval vessels. The LM2500 engine propels multiple Indian Navy destroyers and frigates.

🟢 PC Jeweller’s Chad-based step-down subsidiary PCJ Mining SARL was incorporated for precious metal ore extraction. Chad remains one of Africa’s least-explored mineral jurisdictions, giving early entrants a structural advantage in securing resource blocks at minimal acquisition cost.

🟢 ITC plans to double manufacturing capacity of luxury chocolate brand Fabelle over the next 15-18 months and expand its retail footprint. India’s premium chocolate segment, estimated at ₹1,000-1,200 crore, is growing at nearly double the pace of the overall ₹22,000 crore chocolate market.

🟢 Maruti Suzuki’s chairman guided capex of approximately ₹10,000 crore in FY27, directed at new manufacturing plants at Kharkhoda and Gujarat. Maruti Suzuki’s chairman said new production lines at Kharkhoda and Gujarat will together add 500,000 units of capacity by end of FY27, driven by the small car demand revival post GST cuts. Maruti ended FY26 with approximately 1.3 lakh pending small car orders, validating the urgency behind the capacity push.

🟢 Eternal (Zomato) targets $1 billion of adjusted EBITDA by FY29, is more confident than ever about achieving 5-6% margin guidance, and ended Q4FY26 with a cash balance of ₹17,972 crore. Eternal says no meaningful profitability impact is expected in Q1FY27 from the recent LPG shortage, though some restaurants in affected pockets saw temporary disruption. Demand has redistributed within the Zomato platform rather than disappearing, as wide restaurant selection across cuisines and price points absorbs localised supply shocks.

🟢 Hindustan Zinc CEO plans to add 3 new rare earth metals to its portfolio over the next 5 years, tapping a pipeline of 10 mineral blocks under exploration. India imports nearly 9,700 tonnes of rare earth elements annually, overwhelmingly from China, making this strategically critical.

🔴 FIA, representing Air India, IndiGo and SpiceJet, warned the government that Indian aviation is on the verge of stopping operations, with a ₹73/litre ATF jump for international routes making global networks unviable.

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.

🟢 Transformers and Rectifiers (India) Ltd secured an export order worth USD 16.26 million (approx. ₹150 Cr) from PDC AK LPIV, LLC for supply of 5 transformers, with delivery scheduled by mid-2027. TRIL’s order book stands at ~₹5,000 Cr.

🟢 Sigma Advanced Systems secured a £300 million (₹3,800 Cr) seven-year agreement with Rolls-Royce to manufacture and supply high-precision aerospace components through its India-UK manufacturing network. The seven-year term provides Sigma steady revenue visibility through FY33 and cements its position as a program-level OEM partner.

🟢 Sterling Tools entered into a technical collaboration and supply agreement with Nanjing Haohang Technology Ltd, China, to localise engineering, manufacturing, and sales of advanced rider assistance systems (ARAS) for India’s two-wheeler market. India’s 18 crore-plus two-wheeler fleet is one of the world’s largest ARAS addressable markets and currently sits at near-zero penetration.

🟢 Indian Oil Corp, as part of an Indian consortium also including Oil India Ltd, announced a fresh oil and gas discovery from the sixth exploratory well in Block Area 95/96, Libya’s Ghadames Basin. IOCL holds a 25% participating interest. The 6,600 sq km block has already yielded multiple prior discoveries. Libya holds Africa’s largest proven oil reserves of approximately 48 billion barrels.

🟢 UltraTech Cement will commence its wires and cables business from Q3 FY27, with a ₹1,800 Cr greenfield plant near Bharuch, Gujarat. UltraTech’s entry directly threatens incumbents Polycab and KEI Industries, both of which saw 10% stock declines when the foray was first announced in February 2025.

🔴 UltraTech quantified West Asia crisis cost headwinds in its Q4 FY26 concall at ₹120/ton combined impact. Every $10/ton rise in petcoke hurts EBITDA by ₹70/ton and 10% higher diesel adds ₹30/ton. Despite these pressures, UltraTech reported a record Q4 FY26 PAT of ₹3,000 Cr.

🟢 Premier Energies unveiled India’s first all-black G12R DCR solar module (NeoBlack Series, 600 to 630 Wp, TOPCon technology) at RenewX Chennai. DCR compliance positions NeoBlack to qualify for PM Surya Ghar rooftop subsidies, a scheme targeting installations across 1 crore Indian homes.

🟢 India’s electric passenger vehicle market grew 87.4% YoY in FY26 to 2.33 lakh units, led primarily by the mid-price ₹20 to 30 lakh SUV segment whose share nearly doubled to 35.7% of total EV sales. Entry-level EVs below ₹10 lakh shrank to just 6% of total sales, confirming that India’s EV transition remains skewed toward higher-income buyers 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.

🟢 Supreme Power Equipment secured four domestic orders aggregating ₹128 Cr from Hyderabad-based companies, strengthening its consolidated order book to ₹577.72 Cr.

🟢 HCC secured a ₹2,917.6 Cr water infrastructure contract from CIDCO through the LCESPL-HCC JV, covering a 22.21 km TBM-bored raw water tunnel from Kondhane Dam in Karjat to a 250 MLD water treatment plant at Mohope in Panvel, Raigad; HCC’s share is approximately ₹1,100 Cr.

🟢 Krystal Integrated Services’ associate Advait Krystal Solar Energy SPV (49% stake) received a ₹138 Cr contract from DMER Maharashtra to design, install, and operate rooftop solar PV systems across government hospitals and medical colleges under a 25-year BOOT model.

🟢 Atul Auto entered an MOU with Exponent Energy to manufacture and supply 15,000 electric three-wheelers integrated with Exponent’s 15-minute rapid-charging battery system and powertrain over 3 years, with a total value of ₹490.50 Cr. Exponent’s OTO platform enables a 0 to 100% charge in 15 minutes with a 3,000-cycle warranty, meaningfully reducing downtime for commercial operators versus conventional EV three-wheelers.

🟢 Pine Labs acquired 100% stake in Shopflo Technologies for up to ₹88 Cr in an all-cash deal, its first acquisition post-IPO, adding D2C checkout optimisation to its payments stack. Shopflo’s platform has helped merchants improve checkout conversion rates by 15 to 20%, directly plugging a product gap between Pine Labs’ offline POS and online payments verticals.

🔴 RBI cancelled the banking licence of Paytm Payments Bank Limited effective April 24, 2026, under Section 22(4) of the Banking Regulation Act 1949, citing affairs being conducted detrimental to depositors and non-compliance with Payments Bank licence conditions. Over ₹800 Cr in customer deposits remain stuck in Paytm Payments Bank nearly two years after operations were halted, with roughly ₹400 Cr in frozen accounts and ₹400 Cr unclaimed. One 97 Communications has zero business exposure to PPBL and all Paytm services remain fully operational and unaffected.

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.

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.