Daily Brief India: Asian Paints, KEC International, Vedanta Resources, Canara Bank, JSW Cement Limited, Ethos , Aarti Pharmalabs and more

• Asian Paints achieved a 7-quarter high in Q2FY26 with 10.9% domestic volume growth, driven by easing raw material costs and strategic integration, leading to a 2% margin expansion.
• Despite heavy monsoons, strong execution drove a double-digit volume rebound, signaling stabilized consumer demand. This coupled with a key competitor’s executive loss, validates the firm’s defensive market position.
• Asian Paints’ strong performance deserves a premium valuation but justifying it hinges on the perfect execution of its backward integration project and defending its competitive position.

• Power Grid Corporation of India (PGCIL) has barred KEC from new tenders for nine months starting November 18, 2025, though ongoing Rs.39,000 crore plus projects is unaffected.
• KEC’s diverse orders limit PGCIL’s impact, PGCIL’s share in new orders is only 4% YTD, much lower than last year.
• KEC’s Q2 success counters the PGCIL ban. With strong Q2 results and 8% FY26 margin guidance, the focus is now on execution and cash flow from its global pipeline.

• Vedanta Resources is a globally diversified natural resources company with a strong foothold in India, focused on zinc, aluminium, oil and gas, and other base metals. The company is currently undergoing a significant strategic transformation, including a planned demerger of its primary businesses into separate listed entities to unlock value and attract investment.
• The company has been aggressively deleveraging its balance sheet, having reduced debt at the parent level significantly over the past few years. Recent credit rating upgrades from agencies like S&P Global reflect improved financial flexibility and easing refinancing risks, supported by strong operational cash flows and successful bond issuances.
• Future growth is centered on a $20 billion, four-year investment plan focused on India, targeting expansion in technology, electronics, and semiconductors, alongside its core commodities. This ambitious plan aims to capitalize on India’s economic growth but faces execution risks and is dependent on volatile commodity markets.

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• Canara Bank reported a robust Q2 FY26, defying sector-wide headwinds. The headline surprise was the sharp asset quality improvement, with GNPA collapsing to 2.35% and NNPA at a pristine 0.54%.
• The bank has successfully pivoted from “balance sheet repair” to “sustainable compounder.” While NII is flat, the bank is offsetting this with volume growth and 42% jump in non-interest income.
• With the “bad bank” legacy officially buried(PCR >93%), the narrative now shifts to value unlocking. The listing of subsidiaries and the decline in credit costs makes the current valuation attractive.

• The company is executing an ambitious capital expenditure plan focused on integrating raw material sources and nearly doubling grinding capacity to 41.85 MTPA by CY28.
• JSW Cement reported robust Q2 FY26 results, delivering a 64.2% YoY surge in operating EBITDA to INR267.5 crore, underpinned by 14.9% volume growth, cost control, achieving an EBITDA/tonne of INR860.
• JSW Cement’s ‘green premium’ strategy and structural cost advantage position it for a potential re-rating.

• Ethos is India’s largest retailer of luxury and premium watches, commanding a significant market share of 13% in the combined premium/luxury segment and 20% in the exclusive luxury segment.
• The company is strategically positioned to capitalize on the rapidly growing Indian luxury market, which is forecast to grow at a CAGR of 11-12% annually, driven by rising affluence, increasing brand awareness, and a trend towards premiumization.
• Strong revenue and profit growth underscore the company’s successful expansion and operational execution, though the premium valuation and negative operating cash flow warrant careful monitoring.

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• Aarti Pharmalabs is a significant player in the global pharmaceutical industry, specializing in Active Pharmaceutical Ingredients (APIs), Xanthine derivatives, and offering Contract Development and Manufacturing Organization (CDMO) services. The company was demerged from Aarti Industries in 2022 to create a focused pharmaceutical entity.
• The company holds a dominant position in the Xanthine derivatives market, being the largest Indian manufacturer and commanding a 15-20% global market share. This segment benefits from its use in beverages, nutraceuticals, and pharmaceuticals.
• Strategically, Aarti Pharmalabs is focused on expanding its capacities, particularly in the Xanthine and API segments, and increasing its presence in regulated markets. A major greenfield project at Atali, Gujarat, is expected to be a key growth driver upon its commissioning.

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