• Margin compression drivers: Margins were impacted by the transition from expired mobile PLI 1.2 to PLI 2.2, higher polymer costs in appliances, and elevated memory prices that optically reduce percentage margins through pass-through conversion pricing.
• Backward integration targets: Display capacity is scheduled to be operational by Q4, with display and camera manufacturing capex expected to expand mobile margins by 40–50% of the target in FY28 and over 100 basis points by FY29.
• Vivo revenue contribution: The Vivo business is expected to reflect in financials starting in Q3/H2, potentially adding ₹35,000–40,000 crore in annual revenue next fiscal year and targeting 20 million-plus units by FY28.
• Memory price pressures: Driven by AI demand, memory costs remain elevated and are fully passed through to customers, contributing to an average 35–40% increase in mobile retail prices and an expected 10–15% contraction in the overall smartphone market.