Here’s what you’d be missing. Every day I send the Corporate Intelligence Brief, a short take on what’s actually moving in Indian markets: a big order win, a result worth reading past the headline, a capex plan that signals where a company is going. I stick to what I know, pharma, power, industrials, and specialty chemicals, and I keep the language plain so it’s easy to follow.

The point isn’t only to tell you what happened. It’s also to help you understand why it matters and what to watch next, so you sharpen your own thinking over time.

So go rescue me from spam. :-)

Ratnamani Metals & Tubes (it makes stainless & carbon steel pipes & tubes for oil & gas, power & chemical plants) said its subsidiary Ratnamani Finow Spooling Solutions won export orders for spools & hangers worth $286 million, about Rs 2,700 crore, to be executed over 2-3 years.

Now, how big is that against the size of the company?

Well, against FY26 consolidated revenue of about Rs 4,500 cr, this announcement is roughly 60% of a full year’s sales. For the subsidiary it is bigger still: RFSS did Rs 390 cr of revenue in FY26, its first full year, so this is close to 7x its own annual sales.

So is the group suddenly flush with visible work? Well, remember what an order book is: It is work that is contracted but not yet executed. The group’s order book was about Rs 2,200 cr on 1 May 2026, so this one order is larger than the entire book.

That said, remember a key nuance. Part of the work will be sub-contracted & sold on a mercantile trade basis, meaning bought & resold rather than made in-house, & traded goods carry thinner margins than manufacturing. RFSS ran at roughly 30% EBITDA margin in FY26 on spools it made itself. So the revenue impact will be bigger than the profit impact. The base business is soft too: Q1 FY27 consolidated revenue fell 15.6% YoY to about Rs 970 cr.

What’s worth watching from here: the split between manufactured & traded value in this order, & whether the spooling margin stays near that 30% through execution.

Educational analysis, not investment advice.

Welspun Corp (or Welcorp, one of India’s largest makers of large-diameter steel pipes, the kind that carry oil, gas & water over long distances) won its largest-ever single order yesterday: about $1.8 bn, roughly Rs 17,200 cr, for pipes from its US facility in Arkansas. So the question is - how big is one order that beats a full year of sales?

Well, note that the company's FY26 revenue was Rs 16,770 cr, so this single order is about 103% of a full year’s sales, it is bigger than everything the company sold last year. It also takes the global order book to a record $4.4 bn, roughly Rs 42,100 cr.

Now, an astute investor would wonder: when does the money actually arrive? The fact is, execution of this order is in FY28-FY29. So this is not FY27 revenue. Spread over those two years it’s roughly Rs 8,600 cr a year, about 43% of the Rs 20,000 cr revenue the company has guided for FY27, layered on top for the two years after that.

So is the order book itself meaningful? Well, remember what an order book is: work contracted but not yet executed. At about Rs 42,100 cr, it now covers roughly 2.5 years of FY26-level revenue. And remember why filling a specific plant matters: it lifts utilisation of the US facility, which spreads fixed costs over more volume. That’s operating leverage, & it’s the mechanism by which more sales can turn into proportionally more profit.

That said, remember an order book is a promise, not profit. A few things could weaken the case. The margin on this order isn’t disclosed, so we don’t know how profitable it is. US line-pipe demand is cyclical, it rises & falls with energy capex. & the revenue is years out, from FY28, even as the re-rating is happening today.

One more number to keep honest. Q1 FY27 PAT was Rs 1,047.9 cr, but that included a one-time Rs 547.9 cr gain from selling the Saudi EPIC stake. Remember to strip one-offs before you judge the run-rate: clean FY26 PAT was Rs 1,613 cr. Trailing profit here flatters the real earning power.

What’s worth watching from here: which customer & what pipe grade. A named LNG or hydrogen transmission client would say a lot about how durable US demand really is. The next disclosure or the Q2 call should resolve it.

Educational analysis, not investment advice.

For those who don't know, KPIL or Kalpataru Projects is one of India’s larger EPC contractors, meaning it builds infrastructure like power transmission lines, roads & industrial plants on contract.

Last week it won Rs 3,500 crore of new domestic orders, across 3 segments: an industrial plant, power transmission & distribution, & residential buildings.

Now, how big is this order compared to the size of the company?

Well, against FY26 consolidated revenue of about Rs 27,100 cr, this is roughly 13% of a full year’s sales. It also takes FY27 order intake so far past Rs 11,000 cr, against management’s guidance of Rs 30,000 cr-plus for the year.

So is the order book itself meaningful? Well, remember what an order book is: work contracted but not yet executed. KPIL closed this quarter with a record Rs 66,600 cr, about 2.4x annual revenue, so roughly 2.5 years of visible work at the current run-rate.

That said, remember that an order book is a promise, not profit. Contracts convert to revenue over 2-3 years, & execution plus working capital decide whether the numbers show up. Q1 FY27 result helps the case: PAT of about Rs 300 cr, up 45% YoY consolidated. Revenue grew only 3.8% YoY though, so margins did the work, not volume.

What’s worth watching from here: whether Q2 revenue growth accelerates from that 3.8% toward the guided 15%.

Educational analysis, not investment advice.

This week I have been tracking gold lenders, specifically in the NBFC space. As many of you know, NBFCs are non-banking financial companies: financial firms that borrow funds from banks or through bonds & then lend those funds forward to borrowers. In most cases they are not allowed to take deposits.

I have been tracking gold lenders in particular because of 2 major policy moves.

1. The RBI changed the loan-to-value ratio, effective 1 April 2026. What is the loan-to-value ratio? It is the loan amount disbursed divided by the value of the collateral. In a gold loan, that means the loan given against the total value of the gold pledged. Earlier, under the RBI rules, this ratio for gold loans below Rs. 2.5 lakh was capped at 75%. From 1 April 2026, it was raised to 85%. So for every Rs. 1 lakh worth of gold a borrower pledges with the NBFC, they can now borrow up to Rs. 85,000. That is what the loan-to-value ratio means in practice. By lifting it, the RBI has let NBFCs disburse a higher loan amount per Rs. 1 of gold, which is a clearly profitable proposition for these lenders: they can now lend more, & so earn interest on a larger loan than they could before.

2. The government raised the import duty on gold from 6% to 15% in May. A higher import duty feeds into a higher price of gold, & that in turn helps gold lenders, because the value of the gold sitting as collateral with them goes up.

These two policy moves seem to have worked in the gold lenders’ favour. In this post I want to discuss one specific gold lender, one that reported a 102% jump in consolidated profit after tax, its highest ever quarterly profit. Its net interest income, which is simply interest earned on loans minus interest paid on borrowings, was up almost 80% year on year.

So which company am I talking about? It is . . .

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Central banks have a habit of ruining things for everyone else. In the June 2026 quarter they bought a record 289 tonnes of gold, up 74% YoY, the heaviest sovereign buying since 1967, & gold pushed past $4,400 an ounce.

And what did India, the world’s 2nd-largest gold consumer, do about it? Something strange. Families bought 6% fewer grams YoY but spent 50% more rupees YoY on them, a record Rs 1.98 lakh crore in 3 months. Jewellery demand by volume fell 15% YoY. The Indian wedding budget, it turns out, is set in rupees, not in grams.

Hold that against the Q1FY27 results of a gold retailer I’ve been studying of late. Its same-store sales in this quarter grew a staggering 46% YoY. Not new stores; the same counters that were open a year ago sold 46% more by value while the industry around them sold 15% less metal. Is that brilliance? Well, more likely it is about who was already standing in the right place when a market splits into organized & unorganized, & this retailer has been standing in the same place for a very long time.

The company I’m referring to is . . .

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Why this concerns India isn’t obvious until we realize that we supply close to 90% of the generic prescriptions the US imports, and generics (the off-patent, low-cost copies that quietly do most of the everyday work in American pharmacies) are about 1/3rd of Indian pharma’s export earnings. So a tariff aimed at generics is, more or less, a tariff aimed at us.

The real question is whether the threat is as serious as it first looks, and I think the answer is more interesting than it appears at first instance.

First, this is a proposal, not a rule. The details aren’t out yet, and generics are currently exempt from the Section 232 pharma tariffs already in play.

Second, that two-year runway means there’s no earnings hit at all until August 2028, so nothing moves in the numbers for a good while.

Third, and this is most important to remember: Standing up a cost-competitive generics manufacturing base in the US inside 2 years is genuinely hard. US labour and compliance costs run at several times India’s, and generics live on razor-thin margins that simply can’t absorb a US cost structure.

If the tariffs do bite in 2028-29, the likeliest result is higher drug prices for Americans, which is a strange thing to campaign for. So, the hit to Indian generics is likely to be minimal in my view.

That said, this is still a stated intent, and Trump administration has followed through on tariff threats before, so “minimal” is my base case, not a promise.

When a company grows its profit by more than 60% in a single quarter, the obvious question is: is this real & built to last, or is it a one-off?

I spent a day going through one such result, a record quarter from a name most of us may be familiar with, and the answer turned out to be more interesting than I had expected.

The company I am referring to is . . .

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This results season, a particular lender has caught my attention. Why? Because of where it comes from (in the past two years, it took some harsh business decisions, which finally seem to be paying off, as evident in its Q1FY27 results). You see, two years ago this lender walked away from its unsecured loan book on purpose, took the profit hit, & rebuilt itself around loans backed by hard collateral. The profit dip for this business decision showed up in FY25. But the payoff is showing up now: in the June 2026 quarter its net profit grew 52.5% year on year, its loan book grew 34.7% against its own guidance of 20 to 22%, & 98.9% of everything it lends is now secured. It also has a large bank as its parent & majority owner.

The timing has helped. On April 1, 2026, the Reserve Bank of India’s new gold-lending rulebook came into force, & its headline change lifts the loan-to-value cap on small gold loans from 75% to 85%: a borrower pledging the same gold can now legally be lent more against it. For loans under Rs 2.5 lakh the paperwork got lighter too. Gold itself is up roughly 20% in a year. The June 2026 quarter is the first full quarter under those rules, & this company’s gold-loan book grew 76.7% year on year in it.

The company I’m referring to is . . .

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Been tracking Himadri Speciality Chemical this week. Up until now, the company made chemicals that fed into tyres, paints, plastics, defence, construction, and more. Which specific chemicals, you may ask? Well, for the purpose of this rather brief note, you don’t really need to know, because my point is something else (but let me quickly mention it in case you want to dig further: it makes coal tar pitch and its derivatives, which includes speciality carbon black, refined naphthalene, SNF, speciality oils, and more).

Now, onto my main point. What caught my eye this week is that . . .

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Drive past any high-voltage power line in India & look at the steel lattice holding the wires up. There's a good chance one company made it & almost nobody thinks about it. This company is one of the larger makers of them in the world, & it ships these towers to more than 60 countries. FY26 was its best year yet, revenue up 20%, profit up 42%, & an order book of Rs 8,500 crores, the biggest it has ever carried, which works out to about 18 months of sales already won.

Here’s why that matters now. Everyone’s trying to electrify at once, & to plug in a wall of new renewable power, & you can’t do either without the grid, the web of transmission lines that moves electricity from where it’s made to where it’s used. India alone is lining up enormous sums for new transmission over the rest of the decade. Someone has to bend the steel that actually holds those lines up. It’s heavy, thankless work the headlines mostly skip, & this is one of the handful of firms doing it at scale.

The company I am referring to is . . .

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This past week, I’ve been tracking a broking company, which is really a diversified financial services company that offers a wide range of services incl. distribution of mutual funds and lending as a NBFC. Here is the odd thing: in the year just ended its profit actually fell, down 22%, & yet I think it is more interesting now than when it was growing. The reason is what happened inside the year. Profit bottomed in the first quarter & then climbed every quarter after, nearly trebling by the fourth, with margins back to a two-year high.

Here is the backdrop that explains both the fall & the recovery. A little over a year ago, India’s market regulator tightened the rules on derivatives trading (futures & options, the riskier, faster-turnover end of the market that brokers earn a lot from), to protect small investors who were losing money. That cut trading volumes across the whole broking industry, & this company, like its peers, took the hit. But the regulation was a one-time reset, not a death sentence, & as volumes have normalised the earnings have come roaring back.

The company I am referring to is . . .

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There is a company I have been looking at that owns almost nothing you can touch. No factories, no machines, no inventory, no debt. What it owns is a vault of intellectual property it has built up over nearly thirty years, rights that sit quietly on its books & earn money while it sleeps. Last year that vault turned about Rs 375 crore of revenue into Rs 217 crore of net profit (the cash left after every cost & tax), a net margin near 58%, & the company handed most of that profit straight back to shareholders as dividends.

It collects its money in the most passive way I can think of. Every time a piece of its catalogue gets played on a phone app, or used in the background of a clip someone posts, it earns a small fee, & it does this millions of times a day on rights it paid for just once. Here is the shift that makes it interesting now: over the past few years the way Indians consume entertainment has moved onto subscription apps, & those apps have begun raising prices & bundling themselves into mobile plans. The number of people paying, rather than sitting through ads, has climbed into the tens of millions out of a base in the hundreds of millions. Every new paying user widens the pool this company draws from, without it having to create anything new.

The company I am referring to is . . .

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GNG Electronics has a simple business that I keep coming back to. It buys used laptops, desktops & similar computing devices, refurbishes them so they work like new, & resells them under the Electronics Bazaar brand. Boring on paper. The reason I’m writing this note is that a freakish supply shock in the new-laptop market has made this boring business suddenly very valuable.

The shock starts with AI. The biggest cloud companies in the world (Microsoft, Google, Meta, Amazon) are spending hundreds of billions of dollars on data centres for AI workloads. Those data centres run on a premium memory chip called HBM, short for high-bandwidth memory, which goes inside the AI accelerator cards Nvidia sells. One HBM module sells for $60 to $100. The ordinary memory chip in your laptop, called DDR5, sells for $5 to $10 for the same quantity of silicon.

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The three companies that make memory (Samsung, SK Hynix, Micron) have only so much factory capacity, so they are doing the obvious thing: shifting capacity to the premium product. Every wafer they give to HBM is a wafer they can’t give to laptop memory.

Price effects have been violent. Server-grade DDR5 contract prices jumped 57% in the first three months of 2026 alone & another 49% in the next three months. The premium storage drives inside laptops (SSDs, solid-state drives) tell the same story: a 1 terabyte SSD went from $70 to about $249 over six months.

A typical high-end laptop processor went $165 → $240. All of that has flowed into shop-shelf prices. An entry-level Indian laptop (8GB memory, 512GB storage) cost Rs 25,500 in December 2025. Today it costs around Rs 40,000. A 57% jump in six months. International prices on the comparable laptop are up 40%. & IDC (the main data house for the PC market) has cut its 2026 global PC shipment forecast to a fall of 11%, versus growth of 10% expected just six months ago. That swing is 55-60 million laptops the world wants but won’t be able to buy this year.

On top of that, Microsoft stopped supporting Windows 10 in October 2025. Every corporate IT team that hadn’t refreshed its laptop fleet now has to, right when prices are at the highest point in PC history. Demand for some kind of working laptop is going up while new-laptop supply is going down. The arrow points one direction.

Layer the policy on. India’s E-Waste Management Rules 2022 require companies that sell electronics (Dell, HP, Lenovo, Samsung & the like) to fund the recycling of those products. The required recycling share steps from 60% today to 80% by FY28. The rules also let refurbishers earn a ‘refurbishing certificate’ by extending a device’s life, which the brand can buy to defer its own recycling obligation.

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So GNG gets paid twice: once for the refurbished laptop, once for the certificate it sells back to a brand. The European Union has a similar rule (the Right to Repair Directive, 2024) pushing refurbished into government procurement. The United States is layering fresh tariffs on Chinese-made electronics. The major markets all lean the same way. Unusually one-sided macro picture.

The punchline back to GNG: when a brand-new entry-level Indian laptop costs Rs 40,000, a high-end refurbished business laptop with a three-year warranty at GNG’s average price of Rs 27,000 stops being the cheap option. It becomes the better-value option. Procurement managers at large companies, once they qualify a vendor, don’t dequalify easily. So it’s a one-way valve, & GNG is sitting in the middle of it.

gng’s business in plain language

GNG is India’s largest refurbisher of laptops & related ICT devices (ICT means information & communication technology: laptops, desktops, tablets, servers, premium smartphones). Started in 2006 in Mumbai by the Khandelwal family, listed in July 2025 with a Rs 460 Cr IPO. The founder family still holds 78.7% of the shares: strong skin in the game, but also a thin ‘free float’ (the share count actually trading in the market), so the stock can move sharply in both directions.

Eleven factories, of which 8 are in Sharjah (UAE), 2 in Mumbai, 1 in the US. 4,895 customer points of sale across 46 countries. Headcount 2,148. Product split: 81% laptops, 19% other ICT. Sales by geography for FY26: India 33% (up sharply from ~25% the year before), US 21%, Europe 20%, UAE 12%, rest 14%. The factories can produce 150,000 units a month combined. FY26 actual production: 727,000 units. So the factories ran at ~40% of capacity. The polite way of saying that: GNG can grow another 60% from here without building a single new factory.

gng’s q4 results, & what’s underneath

The January-March 2026 results landed on 5th May. Revenue Rs 651.7 Cr, which is 43% above the same quarter a year ago (year-on-year, often shortened to YoY) & 34% above the immediately preceding October-December quarter (quarter-on-quarter, or QoQ).

Gross margin (revenue minus the direct cost of refurbishing, as a percentage of revenue) was 19.2% versus 15.1% a year ago, an improvement of 414 basis points. A basis point is one-hundredth of one percent, so 414 bps is the same as 4.14 percentage points.

Better buying, sharper inventory positioning & higher selling prices each contributed. EBITDA (earnings before interest, tax, depreciation & amortisation: a way of looking at operating profit before financing & accounting decisions) was Rs 64 Cr at a 9.8% margin. That’s 307 bps better than a year ago, but 120 bps lower than the previous quarter. Profit after tax was Rs 42.1 Cr, almost three times the Rs 14.7 Cr the company earned in the same quarter a year ago.

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The dip in EBITDA margin compared to the previous quarter is worth explaining because headline-readers will worry about it. Q4 is the heavy volume-push quarter in this industry (year-end purchases, distributor stocking, bigger bulk orders), all of which trade margin for sales.

On top of that, GNG added roughly 950 employees through FY26, opened 5 new factories in the UAE & a second in Mumbai. Those costs hit the profit line immediately. The productivity gains from the new hiring & capacity show up in the coming quarters. The CFO put it plainly on the call: ‘Q4 margin to be a bit subdued because it runs on the back of substantial volume growth.’ If Q4 margin had held at 11% even after all that ramp-up, I’d be more nervous, not less.

Sit the four quarters of FY26 next to each other. Revenue went Rs 312 Cr → 440 → 487 → 652. EBITDA margin 11.1% → 10.7% → 11.0% → 9.8%. Profit margin 6.1% → 7.5% → 8.0% → 6.5%. The first three quarters tell you what the economics look like outside of volume-push mode: roughly 11% EBITDA margin, 7.5-8% profit margin, revenue compounding 25-30% from one quarter to the next. Q4 is the outlier on margin, not the new normal.

For the year as a whole, revenue Rs 1,891 Cr (+34%), EBITDA Rs 200.5 Cr at 10.6%, profit after tax Rs 132 Cr (+91%). Volume sold +23%, average selling price +9%. India revenue +80% to Rs 622 Cr. & the Ingram Micro India & Supertron distribution tie-up (these are India’s two largest national IT distributors, the companies that ship Dell, HP & Lenovo to the dealer network) was signed only in February 2026. So just 6 weeks of FY26 reflects that channel. The runway in India looks long.

What the trend tells me. Sales growth is going faster, not slower: YoY rate moved 22% → 25% → 40% → 43% across the four quarters. Operating margin is going up, & most of the gain will probably stick. Some of it is cyclical, because GNG bought a lot of old laptops before component prices spiked, so it’s selling at higher prices while its input cost is anchored to pre-spike levels. That’s worth maybe 80-120 bps of the FY26 margin & slowly unwinds over the next 12-18 months.

The rest of the margin expansion (better product mix, better channel pricing, scale of the new factories) is harder to undo. Profit growth running 2.7 times revenue growth is what you want to see when operating leverage works as advertised.

gng’s 3-year picture, which is the real argument

Capital spending is the easy part to underwrite. GNG doubled monthly capacity to 150,000 units in FY26 & has said no new factories are planned in the near term. So FY27 capital spending is mostly tooling & people, not buildings. Net debt (total borrowings minus cash) sits at Rs 300 Cr at end-March 2026, down from Rs 466 Cr at end-December. That should be roughly where it stays.

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The watch-point is working capital: cash tied up in inventory & receivables from customers. Inventory at Rs 743 Cr is about 144 days of revenue. Customer credit days went from 17 to about 40, because the new distribution partners (Ingram, Supertron) operate on the same 30-45 day credit terms that laptop brands offer their dealers. Bank credit lines were expanded materially between Feb & March 2026 (ICICI Rs 72 Cr, Axis Rs 65 Cr, DBS Rs 80 Cr, Kotak Rs 75 Cr). The CFO has said no fresh equity raise is needed before FY29.

On the memory crisis itself, the technology analysts I read mostly converge on the same view: the shortage doesn’t fix itself before late 2027 & probably runs into 2028. Samsung & SK Hynix raised HBM contract prices 20% for 2026, & SK Hynix has begun mass-producing the next-generation HBM (HBM4), which needs even more silicon area per bit, eating further into the capacity available for ordinary laptop memory. The Windows 10 refresh wave runs through corporate IT budgets into FY28.

India’s e-waste recycling target ratchets to 80% by FY28. India’s PLI scheme (Production Linked Incentive: a government subsidy for making electronics in India, Rs 17,000 Cr of public money behind it, 27 firms approved including Dell, HP, Foxconn, Flextronics) will bring more domestic new-laptop supply over 3-5 years, but every PLI-made laptop still uses the same memory & storage chips the rest of the world is fighting over. PLI doesn’t solve the near-term shortage. Refurbished retains its slot.

Stack the policy levers together & they all push refurbished forward. Management has guided FY27 to 25% revenue growth & a profit margin 0.5 percentage points better (EBITDA margin from 10.6% to ~11.5%). They called this conservative on the Q4 call.

Worth knowing: at the start of FY26 they guided 25% too & ended up delivering 34%. They beat the original guide & beat a revised mid-year guide. So when this management team says 25% & calls it conservative, my prior is to add 5-7 percentage points. They’ve also said European & American distribution partnerships are ‘in advanced stages.’ If even one lands in FY27, the guide gets cleared by a wider margin.

cash flow quality, & whether to worry

Before the 3-year section, a separate look at cash flow. The headline profit number hides something a non-specialist reader will miss. Profit after tax is accounting income. Operating cash flow (the cash a business actually generates from running its operations, before paying for new factories or financing) is what the bank statement shows. They don’t always match.

In FY26 GNG’s profit was Rs 132 Cr, but operating cash flow was almost certainly deeply negative once you net out the cash tied up in inventory & customer receivables (money customers owe but have not yet paid).

Two big absorptions ate the cash. Inventory built from Rs 490 Cr to Rs 743 Cr, absorbing about Rs 250 Cr. Customer receivables built from roughly Rs 66 Cr a year ago (17 days of revenue) to about Rs 406 Cr at end-March 2026, absorbing another ~Rs 340 Cr. Together, roughly Rs 590 Cr of profit that the P&L generated on paper but the bank statement did not see.

Two external sources funded the gap. Net IPO proceeds of roughly Rs 380 Cr (the fresh-issue portion of the July 2025 listing, after expenses) covered most of it. Bank credit lines were expanded by ~Rs 130 Cr across ICICI, Axis, DBS & Kotak between Feb & March 2026. Net debt actually fell from Rs 383 Cr to Rs 300 Cr partly because a Rs 60 Cr loan from the promoter family was paid off.

How worried should I be? It cuts two ways. The benign reading is that both absorptions look strategic. The inventory was bought before memory prices ran up, so input cost is locked at low levels while output prices have re-rated. The receivables grew because GNG joined Ingram & Supertron’s distribution networks, where 30-45 day credit is the same terms laptop brands give their own dealers. The CFO has said no fresh equity raise is needed before FY29. The less-benign reading is that GNG has been cash-flow-light for years. Going back to FY20, operating cash flow was negative or near-zero in most years before FY24.

Cash conversion (operating cash flow as a percentage of reported profit) was just 36% in FY25 & 3% in FY23. Refurbishing is inherently a working-capital-heavy business: you have to buy used devices, hold them, refurbish them, then extend credit to push them through distribution. So even after the current memory cycle normalises, cash conversion will probably stay weak. & if memory prices reverse hard, the inventory build that helps margins on the way up becomes a write-down risk on the way down.

One related red-ish flag worth naming alongside the cash flow conversation: GNG’s effective tax rate at ~12% in FY26 is on the low side. Screener.in flagged this as a watch-point too. I’d model 14-15% effective tax for FY27 rather than rely on the FY26 rate sustaining.

My read: yellow flag, not red. The reasons behind poor cash conversion are mostly rational (strategic inventory positioning, channel-mix shift) & the funding is in place. Nothing in the balance sheet says distress. But the company is borrowing its growth, not self-funding it. If you look only at +91% profit growth & ignore the cash conversion, you’ll miss something. Watch inventory days & debtor days every quarter, & track operating cash flow once GNG’s FY26 annual report is filed (typically July-August).

valuation, multiples & eps, no point estimates

A quick gloss before the numbers. EPS is earnings per share: company profit divided by shares outstanding. PE is the share price divided by EPS, a way of saying how much you’re paying for each rupee of profit. PEG is the PE ratio divided by the expected annual earnings-growth rate, a short-cut for asking whether the growth justifies the price.

FY26 profit was Rs 132 Cr, & GNG has roughly 11.5 Cr shares outstanding post-IPO. So FY26 EPS works out to about Rs 11.5. To project FY27 in the base case I apply management’s 25% revenue growth, push EBITDA margin from 10.6% to 11.5% (their guide), add Rs 14 Cr of depreciation for the new factories, Rs 56 Cr of interest cost (consistent with current debt & working capital), Rs 5 Cr of other income, & a 14% tax rate.

That gets me FY27 profit of about Rs 178 Cr & a base-case FY27 EPS of around Rs 15.5. The bull case (33% revenue growth, 12% EBITDA margin) produces FY27 EPS of about Rs 17.8. The bear case (18% revenue growth, 10.4% margin) gives Rs 11.6, basically flat to FY26.

Extending the base case three years out (revenue compounds 25%, then 22%, then 20%, profit margin walks to 8.5%) gets me to FY29 EPS of about Rs 25.5. That works out to a 3-year compounded annual earnings-growth rate of around 30%.

At where the share price currently trades, the one-year forward PE sits in the high 20s. The base-case PEG is about 0.95, just under 1, the line at which growth-investing folks tend to perk up. Bull-case PEG of 0.80 leaves room to re-rate higher if execution beats. Bear-case PEG north of 1.3 says there’s thin margin of safety if the memory cycle reverses faster than I expect.

No listed Indian peer does exactly what GNG does. So I built the comparison around the nearest economic look-alikes. IT distributors (Redington at about 9 times trailing earnings, Rashi Peripherals at 14 times) ship branded laptops to dealers. TVS Electronics (25 times) sits in IT peripherals.

The premium EMS names build electronics on contract for other brands (Dixon Technologies at 85 times, Kaynes at 120 times; EMS stands for Electronic Manufacturing Services). GNG trades at about 39 times trailing earnings, in the middle. The argument for being closer to EMS is concrete: GNG’s return on equity (annual profit divided by shareholder capital) is 35% against distribution returns of 14-16%.

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Operating margin is 10% against distribution margins of 2-3%. Profit growth is running 30%+. The argument against going all the way to EMS multiples: GNG’s growth is cyclically amplified by the memory shortage, & EMS players have a longer track record of margin stability through full cycles. My fair-PE band, framed as ranges: base case 28-33x next year’s EPS, bull 33-38x, bear 20-25x. Implied value moves roughly in proportion to the band, so being wrong by 5x shifts implied value by about 15-17%.

what i’m watching

A few things to track each month. The price of DDR5 memory & NAND flash storage on DRAMeXchange (NAND is the kind of memory used in storage drives), because that determines the size of the refurbished price discount. India’s share of GNG revenue in the Q1FY27 (April-June 2026) print, because that tells us how fast Ingram & Supertron are converting into sales.

Inventory days & the working-capital cycle, because any cash strain shows up there first. AI capital-spending commentary from Microsoft, Alphabet (Google’s parent) & Meta on their quarterly calls, because that tells us how hard the memory shortage keeps biting. UAE shipment continuity, given 8 of 11 factories sit there. Net debt against the Rs 450 Cr line the CFO has flagged as the comfortable ceiling. & any signal that the founder family is planning a partial share sale (called an Offer For Sale or OFS), because it would loosen the tight free float in both directions.

bottom line

Right business, right time, with management probably setting a low bar for itself. The memory shortage, the Windows 10 refresh, the recycling rules in India & Europe, the Indian distribution tie-ups all push the same direction at the same time. That kind of alignment is rare. PEG around 1 on a 30%+ annual earnings-growth path, with 60% of factory capacity still idle, is the kind of setup I keep coming back to.

The risks aren’t trivial, of course. 8 of 11 factories in Sharjah is a real concentration risk. The big inventory build helps margins in the up-cycle but would hurt if memory prices snap back hard. Promoter holding of 78.7% means free float is thin & the stock can whipsaw both ways.

The trailing PE of 39x looks high if you stop at the headline. The forward multiple looks reasonable. The PEG looks attractive. I think this is a name to size into rather than chase. The next two quarterly results (Q1FY27 in early August, Q2FY27 in early November) will tell us whether Indian distribution is converting at the pace I’m modelling, & whether EBITDA margin holds at 11%+ without the Q4 volume-push compression.

Those two data points really do de-risk the rest of the story.

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disclaimer

I am not a SEBI registered investment advisor. This note is based on public filings, the Q4FY26 earnings call transcript, screener.in data, BSE & PIB disclosures, & industry data from IDC & memory-industry trade press. Not a recommendation to buy, sell or hold. Do your own work & consult a SEBI-registered RIA.

Been tracking the results season this week, and one company that has caught my attention is Atlanta Electricals, which makes power transformers i.e. the metal boxes that step electricity voltage up & down as power moves, for instance, from a solar plant in Rajasthan to a house in Mumbai. The company has been around since 1980s & has supplied roughly 4,700 transformers to 19 states.

Two things matter about its business. First, the product mix has been climbing the voltage ladder. Lower voltage transformers (33 kV, 66 kV) sit in a crowded, low margin market. Higher voltage (220 kV, 400 kV, 765 kV) has fewer qualified players, slower customer approvals & much better margins. Atlanta has spent two years pushing its mix up that ladder. Second, capacity went from about 16,020 MVA in March 2023 to about 63,060 MVA by December 2025 per their concall, almost 4 times bigger in 2.5 years.

The industry it sits in is in a sweet spot. India needs to absorb 500 GW of non-fossil power by 2030, but the grid is the bottleneck. To take one data point per concall, solar curtailment hit 12% in October 2025 (panels producing electricity the grid couldn’t take) & 40 GW of signed renewable power purchase agreements have been delayed because the lines aren’t ready. The government’s response is Rs 9.15 lakh crore of transmission capex through 2032, about 8 times the entire current annual revenue of all listed transformer makers combined. Add 13.56 GW of expected data centre demand by FY32, plus Adani’s Rs 9 trillion AdaniConnex hyperscale build, & the demand wave runs well into the next decade.

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Onto the Q4FY26 numbers:

The headline YoY jump matters less to me than the within-year cadence:

That’s accelerating revenue with simultaneous margin expansion, which is the textbook signature of recently expanded capacity hitting utilisation. The 20% OPM is also unusually high for the sector. The median for India’s listed electrical equipment companies is around 14%, so Atlanta is operating well above industry.

Order book ended at Rs 2,493 Cr, against Rs 411 Cr in June 2024.

That gives a little over 3 quarters of revenue visibility, & the mix is skewed towards higher voltage where margins are better. Net debt fell from Rs 146 Cr to Rs 51 Cr over FY26, & management has called out FY26 as the year they became essentially debt free. ROCE is 45%, ROE 32%, both unusually clean for a capital equipment maker in heavy capex mode.

For the next 3 years, the catalysts I care about: the Vadod facility got PGCIL approval for 400 kV in April 2026 (PGCIL is Power Grid Corporation of India, the gatekeeper for the biggest tenders, so this opens up higher value addressable market). Atlanta Trafo (Unit 5) is 765 kV capable & can expand 3x. The first 400 kV prototype is under build per concall & once that proves out, management has said the order intake floodgates for higher KV open. A backward integration project for in house tanks & radiators starts Q1FY27, which should add 100 to 200 bps to margin once ramped. Management has historically guided 40% revenue growth & beat that in FY26 (delivered 49%).

My FY27 estimate ranges look like this:

47 times next year’s EPS for a business growing earnings somewhere around 40% a year. Not cheap. Not crazy either.

A quick note on where the Rs 37 base case EPS comes from. FY26 EPS was Rs 26.24 (PAT Rs 202 Cr divided by 7.69 Cr shares). For FY27 I assume revenue growth of 42% (a touch above management’s historical 40% guidance & well below the 49% they actually delivered in FY26), OPM holding at 20% (the Q4FY26 exit run-rate), Rs 35 to 40 Cr of depreciation as the new facilities run for a full year, & a 25% tax rate. So PAT comes to around Rs 282 Cr, which divided by shares outstanding is Rs 37. Bull case Rs 42 assumes revenue +50% & OPM creeping to 21%. Bear case Rs 31 assumes revenue +35% & OPM compressing to 18% on Chinese pricing pressure.

If I had to put a fair multiple on this kind of business, I’d argue 45 to 50 times is defensible given the ROCE of 45%, the debt free balance sheet & the order book visibility. Comparable Indian capital goods peers actually trade much higher: Hitachi Energy at ~167x, GE Vernova T&D at ~103x, CG Power at ~111x, ABB at ~89x, Siemens at ~79x. Atlanta deserves a discount to those MNC names on scale & brand, but a premium to the 42-company industry median of ~38x given its 45% ROCE (vs ~21% median) & 20% OPM (vs ~14% median). The 45 to 50x range splits the difference.

Now, for the bull case to play out, the company needs margins to keep grinding higher from a 20% base. I think it’s possible. I’m just not confident enough to underwrite it. And bear case would play out mostly if growth slows on the back of either Chinese pricing pressure or competitor capacity catching up.

So at current multiples, this isn’t really a “buy aggressively” setup for me. It’s a “watchlist & wait” setup. I’d want either a 10% pullback or a Q1FY27 print that beats my base case before getting more interested.

47 times next year’s EPS for a business growing earnings somewhere around 40% a year. Not cheap. Not crazy either. If I had to put a fair multiple on this kind of business, I’d argue 45 to 50 times is defensible given the ROCE & the order book visibility. So the stock is essentially priced right where the math says it should be.

The bull case needs operating margins to keep grinding higher from a 20% base. I think it’s possible. I’m just not confident enough to underwrite it yet. Bear case happens mostly if growth slows on the back of either Chinese pricing pressure or competitor capacity catching up.

So at current multiple, this isn’t really a “buy aggressively” setup for me. It’s a “watchlist & wait” setup. I’d want either a 10% pullback or a Q1FY27 print that beats my base case before getting more interested.

That said, two specific things keep nagging at me on the downside. The first is the Chinese situation. The Indian government has been hinting at easing the rules around Chinese bidders in transmission tenders, & Atlanta management was at pains on the Q3 concall to say only one Chinese plant operates in India, that plant is booked 18 to 20 months out, & local content rules will keep newcomers out. That’s the right answer to give on a concall. I’m not sure I fully buy that the gap takes three to four years to close. If even one Chinese player decides to put down a fresh plant in 2026, the entire order book quality conversation changes, & price discipline in tenders starts to wobble.

The second is the supply side at home. Hitachi, GE Vernova T&D, CG Power & Siemens have all flagged expansions. Management’s view is that the Rs 9.15 lakh crore transmission plan absorbs everyone for the next three to four years, & on the maths I broadly agree. But India’s track record on infrastructure execution isn’t exactly spotless. If the plan slips by even 12 to 18 months (which would not be unusual), the supply side starts to look fuller than the demand side, & margins get squeezed.

Disclaimer: Please note that I am not a SEBI (Securities and Exchange Board of India) registered advisor. The content provided in my posts is for informational purposes only and should not be interpreted as stock recommendations or financial advice. It’s important for readers to conduct their own research and consult with a qualified financial advisor before making any investment decisions. The information shared in my posts is based on my personal views and analysis and should not be taken as a directive for investment. My posts are not intended to replace professional financial consultation or advice.

Been tracking an auto manufacturer (called OEM or original equipment manufacturer in fancy industry jargon) this week. It closed the best year in its history: 35% PAT growth, 20.1% return on equity, & a dividend hike of 30%. It carries the #1 market position in 3 completely different products simultaneously (SUVs at 25.3% revenue share, light commercial vehicles under 3.5 tonnes at 52.3%, & tractors at 43.6%); meaning each of its rivals fights it on a different front. Its electric vehicle subsidiary, written off by the market for 2 years as a “margin-destroying experiment,” just turned PBIT-positive in Q4. The standalone balance sheet is essentially debt-free, & consolidated operating cash flow nearly quadrupled during the year.

What’s interesting is it is also reporting these results into the worst macro setup Indian auto has seen since the pandemic. As you may be aware, the current war between the US & Iran has disrupted roughly 20% of global oil supply, sent Brent crude up 51% in a single month (March 2026, one of the largest monthly oil price jumps on record), & frayed an 8 April ceasefire that came under fresh strain again on 4 May, when Brent surged ~6% to settle above $114 a barrel. Steel, aluminium, copper, paint, synthetic rubber, freight; every input that goes into a vehicle is now rising. Every Indian OEM is staring at 100-150 bps of margin compression in FY27. The question is whether this company’s mix is defensive enough to hold the line.

The company I’m referring to is . . .

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Every day, I am researching fresh companies that happen to catch my attention - either because they reported good quarterly results, or witnessed positive news triggers or demonstrated a strong technical setup. In my radar today is an engineering company that has spent 6 long decades doing one thing: building the industrial compressors that pressurise natural gas at every CNG fuel pump, every refrigeration plant, & every oil & gas processing unit it supplies into. Note that it carries zero debt, sits on roughly Rs. 460 crore of net cash, & holds 60%+ market share in CNG compression in India, plus 70% in industrial ammonia refrigeration.

In FY26, it booked the highest-ever order inflow in its history at over Rs. 2,000 crore. Operating margins have expanded from 14% to 21.7% over five years, revenue has compounded at ~17%, & profits at ~32%. The company’s MD has formally guided “20%+ on top line & bottom line” on the Q4 FY26 concall.

It also sits at the centre of the most significant policy push India has made for piped gas infrastructure in years, the same push that has been reinforced by an unprecedented supply shock in March 2026, when missile strikes on Qatar’s Ras Laffan facility destroyed 17% of Qatar’s LNG export capacity, with repairs expected to take 3-5 years. Every CNG fuel pump being built in the next decade, every refinery expansion, & every upstream gas well ONGC plans to drill needs the equipment this company makes.

The company I’m referring to is . . .

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I’ve recently been tracking a 100-year-old company that does only 1 thing: design, build, & operate water treatment plants. It has executed 6,500+ projects across 25+ countries, has been net-cash positive for 12 consecutive quarters, & just got upgraded to AA- by India Ratings.

It is also sitting at the centre of the biggest water capex cycle the world has seen in decades. Saudi Arabia is spending tens of billions of dollars on desalination under Vision 2030. India has extended its Jal Jeevan Mission to 2028 with a Rs. 67,000 crore allocation, launched a Rs. 1 lakh crore Urban Challenge Fund explicitly targeting water & sanitation, & is rolling out AMRUT 2.0 with a Rs. 2,99,000 crore total outlay. Every one of these creates demand for what this company builds.

In Q3 FY26 (December 2025 quarter), the company posted its highest quarterly revenue ever, profit grew 30.6% year-on-year, & order book climbed to Rs. 16,342 crore (~3x trailing revenue visibility). And yet, the stock is down ~24% in calendar 2025.

The company I’m referring to is . . .

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There is an Indian FMCG company that, after 7 quarters of single-digit topline growth, just put up a 23% revenue quarter.

It did this while simultaneously lifting its advertising and promotion spend by more than 50% year over year, a combination that normally compresses margins. Instead, its EBITDA margin held at 26.3% and Q4 net profit rose 27% YoY to Rs 1,111 crore.

The company I’m referring to is . . .

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