OMKARA CAPITAL - DAILY NEWSLETTER 5th August 2026

India Credit Policy Day Today

GLOBAL MARKETS

Oil prices tumbled after US Treasury Secretary Bessent said a Strait of Hormuz deal may come this week. The Dow Jones rallied 1.7%, while the Nasdaq gained 2.6%. The S&P 500 surged above 7,700 for the first time in history.

BUSY DAY TODAY

Shilpa Medicare, Pearl Global, FDC and Ion Exchange report earnings today.

LIC OFS: AN IMPORTANT MILESTONE FOR INDIAN MARKETS

Indian markets absorbed nearly Rs 40,000 crore of supply yesterday, including the LIC OFS, two to three block deals and a QIP. The LIC OFS was important not only because of its size - comparable with the potential scale of the NSE or Jio IPO - but also because it indicated renewed government intent on disinvestment.

We regularly debate FII flows and market liquidity, but the absorption of such large supply in a single session demonstrates the depth of the Indian market. In our view, this is a significant development that deserves greater attention.

EARNINGS SNAPSHOT

Happy Forgings was the standout result, combining organic growth with the strongest margin performance among auto-ancillary companies so far. Sundram Fasteners delivered a clean, operations-led quarter as exports accelerated, while Nykaa achieved record profitability and Fashion reached breakeven. Marico reported strong volume growth with margin expansion; Deepak Nitrite benefited from Phenolics-led gains; and Avalon Technologies delivered robust earnings growth with a healthy order book. Shriram Pistons' Antolin-led growth came with margin dilution and muted PAT growth, while Kalyan Jewellers missed margin expectations due to pressure in its India business.

🟢 GREEN | STRONG EARNINGS

1. HAPPY FORGINGS: Best auto-ancillary result so far; organic growth and margin expansion drive a strong beat

Happy Forgings was the only auto-ancillary company so far to deliver both revenue growth and margin expansion, with EBITDA margin rising 275 bps to a sector-high 31.3%; EBITDA and PAT grew around 39% each. Management expects volumes to strengthen through FY27, while incremental business offers visibility on Rs 950 crore of annual revenue over the next two to three years, up from Rs 800 crore earlier. Heavy-forging capacity should be installed by FY27-end, with revenue and captive-solar benefits starting in FY28. The concall is scheduled for 10 a.m. today.

1. SUNDRAM FASTENERS: Export recovery accelerates; profit growth turns operations-led

Sundram Fasteners delivered its best quarter in the cycle, with record revenue of Rs 1,846 crore, up 20% YoY and 9% QoQ. Standalone exports grew 23% YoY to Rs 466 crore, supported by Class-8 and OEM normalisation and a weaker rupee, while domestic sales rose 16%. Despite other income falling to Rs 9 crore from Rs 20 crore, PBT grew 12% as operating EBIT rose 19%. Raw-material inflation compressed gross margin by around 130 bps, but operating leverage supported EBITDA margin at 15.5%, up 38 bps QoQ. Q1 growth is running ahead of the earlier FY27 guidance.

1. NYKAA: Strong growth continues; EBITDA margin reaches an all-time high

Nykaa reported revenue, EBITDA and PAT growth of 29%, 68% and 226% YoY, respectively. BPC NSV grew 29%, while Fashion delivered a strong quarter with 53% growth and reached breakeven on healthy customer additions. EBITDA margin expanded 196 bps to a record 8.6%, supported by BPC margin expansion, positive Fashion EBITDA and improving eB2B economics. Gross margin rose 123 bps to 45.9%, aided by a higher contribution from House of Nykaa brands and improved marketing and service income.

1. MARICO: Domestic volumes reach a 20-quarter high; margins expand despite input-cost pressure

Marico delivered a strong quarter, with revenue growing 22.9% YoY to Rs 3,957 crore, EBITDA rising 25% to Rs 819 crore and adjusted PAT increasing 25% to Rs 630 crore. Domestic volume growth reached a 20-quarter high of 11%, while international constant-currency growth was 15%. Parachute volumes grew 10%, VAHO sales rose 22% and Foods grew 43%; Saffola edible-oil volumes declined in high single digits, though value grew 7%. EBITDA margin expanded 36 bps YoY to 20.7%, while gross margin improved 34 bps to 46.6%.

1. DEEPAK NITRITE: Phenolics-led windfall gains drive sharp earnings and margin expansion

Deepak Nitrite's consolidated revenue increased 36% YoY and 22% QoQ, while EBITDA and net income rose 185% and 208% YoY, respectively. Gross margin expanded 883 bps YoY and 190 bps QoQ, while EBITDA margin improved 1,093 bps YoY and 322 bps QoQ. Phenolics contributed 86% of company EBIT, with segment EBIT margin rising 349 bps QoQ to 23.5%. Advanced Intermediates margin improved 359 bps QoQ but remained weak at 8.3%.

1. AVALON TECHNOLOGIES: Strong earnings growth and margin expansion; order book rises 23% YoY

Avalon Technologies reported revenue of Rs 484 crore, up 49.8% YoY and 0.9% QoQ, while EBITDA rose 93.9% YoY to Rs 58 crore. EBITDA margin expanded 272 bps YoY to 12%, although gross margin declined 85 bps to 34.7%. PAT increased 145.3% YoY to Rs 35 crore but declined 15.3% QoQ, with PAT margin at 7.2%. The order book stood at Rs 2,208 crore as of 30 June 2026, up 23.4% YoY from Rs 1,790 crore.

🟡 AMBER | IN-LINE EARNINGS

1. SHRIRAM PISTONS: Antolin powers revenue growth but dilutes margins and restricts PAT growth

Shriram Pistons' revenue rose 53.1% YoY to Rs 1,474.4 crore, largely reflecting the first full-quarter consolidation of Grupo Antolin rather than acceleration in the standalone business. EBITDA grew 32.2% to Rs 258 crore, but margin contracted 275 bps to 17.5% due to Antolin's lower-margin profile. PAT increased only 8% to Rs 144.4 crore as finance costs surged 280% and depreciation rose 70%. Key monitorables are a recovery in standalone margins and Antolin's gradual margin improvement from around 10% towards 20%.

🔴 RED | WEAK EARNINGS

1. KALYAN JEWELLERS: India gross margin contracts sharply; EBITDA margin misses estimates

Kalyan Jewellers' India gross margin declined 280 bps YoY to 10.8%, affected by a higher share of exchanged gold, promotional offers under the exchange campaign and a one-off gain in platinum and silver sales in the Q1FY26 base. The studded share moderated to 28% from 30% YoY, while EBITDA margin contracted 280 bps to 5.1%, below the estimate of 6.7%.

Warm regards,
Omkara Capital Private Limited
www.omkaracapital.in

Disclaimer: This newsletter is for informational purposes only and should not be construed as investment advice. Please consult your financial advisor before making any investment decisions.