Metrics raised 1
- Saudi LSAW/HSAW plant construction timeline accelerated to ~1.5 years (from 18-24 months)
Metrics cut 1
- Nashik seamless quarterly run-rate cut to 70,000-80,000 tons from Q3 FY27 (from earlier-guided 80,000-90,000 tons)
Event Participants
Executives
3 Narendra Mantri, Rajeev Goyal, Vinay Kumar Gupta
Analysts
6 Deepak Poddar, Disha Chamria, Sailesh Raja, Shaurya Shah, Shweta Dikshit, Vipulkumar Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Income (Consolidated) | ₹4,476 crores | +9% YoY vs ₹4,103 crores in Q1 FY26; growth despite MENA export suspension since March 2026 |
| Total Income (Standalone) | ₹3,756 crores | +13% YoY vs ₹3,327 crores in Q1 FY26 |
| EBITDA (Consolidated) | ₹421 crores | -39% YoY vs ₹688 crores; margins compressed by ~60-65% utilization and weak water/MENA demand |
| EBITDA (Standalone) | ₹341 crores | -40% YoY vs ₹560 crores; impaired fixed-overhead absorption across multiple facilities |
| PAT (Consolidated) | ₹91 crores | -78% YoY vs ₹415 crores; subsidiary drag from Jindal Hunting loss (₹5.3 crores) and Abu Dhabi disruption |
| PAT (Standalone) | ₹110 crores | -70% YoY vs ₹364 crores |
| Net Institutional Debt (Consolidated) | ₹2,472 crores | Down from ₹2,528 crores as of Mar 31, 2026; long-term debt ₹536 crores |
| Net Debt (Standalone) | ₹2,345 crores | Down from ₹2,453 crores as of Mar 31, 2026; includes ₹526 crores long-term debt (₹500 crores LIC NCD, repayable in equal installments FY28-FY30) |
| Total Order Book | 1.78 million tons | Includes 0.75 million tons export orders; 60% Middle East / 40% non-Middle East |
| Abu Dhabi DI Production | 34,000 tons | Down from 48,000 tons in Q4 FY26; subsidiary order book of USD188 million (1,77,000 tons) gives 3-4 quarters visibility |
| Capacity Utilization | ~60-65% | FY26 actual; current run-rate similar; constrains fixed-cost absorption |
| Quarterly Interest Cost | ₹70-75 crores | Normalized run-rate; Q4 FY26 was inflated by sharp rupee depreciation, Q1 FY27 rupee stable |
Geographic & Segment Commentary
India - Water Infrastructure & Domestic Pipes: Jal Jeevan Mission-linked project execution remained weak, with delayed central fund releases and title scrutiny of state projects; multiple states reported pending dues, reinforcing a demand slowdown. Q1 saw partial recovery driven by higher ductile iron pipe sales volumes. No domestic capacity additions are planned; new pipeline tenders are expected in coming quarters following the March 2026 government mandate to fast-track nationwide piped gas rollout through time-bound central approvals.
Middle East / MENA: The Strait of Hormuz blockade brought MENA trade to a standstill; all outward shipments have been suspended since March 2026, and a short-lived mid-June diplomatic breakthrough was followed by a collapse of peace talks, limiting short-term visibility. Abu Dhabi DI operations were reduced to essential, trucking-range-only customer demand for employee safety, while the 600,000-ton Saudi order remains on hold with alternate route solutions being explored with buyers despite higher cost/time.
Seamless Pipes (India): The API license suspension (January to mid-June 2026) limited participation in certified oil & gas tenders for a full quarter; reinstatement enables resumption of API-certified supplies and new tender participation. Nashik utilization is expected to reach 70,000-80,000 tons per quarter from Q3 FY27 (October onwards).
Jindal Hunting JV (51% JV with Hunting Energy Services, Singapore): Revenue of ₹5 crores and a first-time loss of ₹5.3 crores in Q1 FY27, directly attributed to the Jindal Saw API license suspension; management expects gradual improvement post-reinstatement.
Court Case - Jindal ITF vs NTPC: Arguments closed at the Delhi High Court double bench; order reserved and expected within a maximum of two months (post court vacation).
Company-Specific & Strategic Commentary
Middle East Production Corridor: Two greenfield projects anchor the strategy — a 300,000-ton seamless pipe plant in Abu Dhabi (USD300 million project cost; commercial operations in FY29) and a 51:49 JV with Buhur (KSA) for LSAW and HSAW mills of 300,000 metric tons per annum each in Saudi Arabia. Land is secured (Abu Dhabi site has existing civil infrastructure), long-lead equipment procurement is underway with LCs opened, and financial closure is expected within the next few months.
Export De-risking: With MENA exports stalled, management is actively pursuing Europe (peak ductile demand, good inquiries), Latin America, Southeast Asia and CIS markets. Some Indian DI facilities will be dedicated to export markets to reduce domestic concentration risk, and Italy will serve as a hub to expand presence across Europe.
Hydrogen-Ready Pipes: Qualified API 5L (minimum yield strength 70,000 psi) from the Italy lab for LSAW pipes transporting pure hydrogen and hydrogen-natural blends; 180 miles of 18-inch pipe supplied. Facilities and certifications are ready, but ground-level demand has not yet materialized significantly.
India Energy Security: A landmark March 2026 government mandate designed to fast-track nationwide piped gas rollout — eliminating bureaucratic delays, excessive fees and local bottlenecks through time-bound central approvals — is expected to generate new pipeline tenders in coming quarters.
Stainless Steel Coil Tubing: First-in-India manufacturing capability developed for a specific customer; details withheld under customer nondisclosure obligations.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Volumes | Flattish vs FY26 | Order book is consistent; existing orders likely to execute within the year if the current geopolitical and domestic water scenarios persist |
| Seamless Nashik Ramp-up | 70,000-80,000 tons per quarter from Q3 FY27 | API license reinstated mid-June 2026; tender participation resumed; utilization improving from September/October onwards |
| H2 FY27 Margins | Improvement over H1 | H1 softness was previously guided; recovery assumes MENA stalemate resolution and domestic demand pickup |
| Middle East Monthly Dispatches | 10,000-12,000 tons per month | Road-only supply from Abu Dhabi plant until sea routes reopen |
| Abu Dhabi Seamless Plant | Commercial operations FY29; 50-60% utilization in Year 1 | Construction 18-20 months; developed land shortens timeline; majority long-lead equipment ordered |
| Saudi LSAW/HSAW Plants | Production from FY28-29; ~50% initial utilization (150,000 tons each) | Construction 18-24 months (being crashed to ~1.5 years); interim financial closure expected in next few months |
| Peak Term Debt | ~₹3,500 crores | Expected once Middle East projects are implemented; current term debt ~₹500+ crores; working capital will be additional |
Risks & Constraints
| Risk | Context |
|---|---|
| MENA Geopolitical Risk / Strait of Hormuz Blockade | Exports to MENA suspended since March 2026; peace talks collapsed after a mid-June breakthrough, limiting short-term visibility. The 600,000-ton Saudi job-work order remains on hold; alternate overland routes involve higher costs and longer timelines. |
| Domestic Water Segment Slowdown | Delayed central fund releases and title scrutiny of state projects have slowed Jal Jeevan Mission execution; multiple states report pending dues. DI demand recovery depends on resumption of government funding flows. |
| Capacity Utilization & Fixed-Cost Absorption | Utilization at ~60-65% compresses margins through unabsorbed fixed overheads; pressure expected to persist through Q2 FY27 with improvement only from H2. |
| API License Suspension (Resolved) | The January-mid-June 2026 suspension cost a full quarter of certified oil & gas seamless orders and pushed Jindal Hunting into its first-ever loss (₹5.3 crores). License reinstated, but tender wins and production ramp-up take time. |
| Project Execution / Peak Debt | Term debt expected to rise from ~₹500 crores to ~₹3,500 crores as Abu Dhabi and Saudi projects progress; geopolitical instability could delay construction, equipment delivery, or financial closure. |
Q&A Highlights
FY27 Volume Visibility & Saudi Order Execution
- Question: With JJM delays, Middle East disruption and collapsed peace talks, how should one look at execution this year and when will volumes recover? (Deepak Poddar - Sapphire Capital)
- Answer: Order book is consistent; volumes are likely to remain at FY26 levels this year, with domestic water sector uptake improving. Middle East monthly dispatches should remain at 10,000-12,000 tons through road-only supply from Abu Dhabi. For the 600,000-ton Saudi order, management is engaged with buyers on alternate route solutions (job-work basis) despite higher cost and longer timelines; if workable, it would cover a large portion of the order book. (Rajeev Goyal, Vinay Kumar Gupta)
Interest Cost Run-rate
- Question: What led to the sharp reduction in interest cost and what is the forward outlook? (Deepak Poddar - Sapphire Capital)
- Answer: Quarterly interest is roughly ₹70-75 crores on working capital and term loans; Q4 FY26 was significantly impacted by sharp rupee depreciation, while Q1 FY27 saw a stable rupee. The current run-rate is a fair assumption going forward. (Vinay Kumar Gupta)
MENA Projects - Timelines and Utilization
- Question: What utilization levels and commissioning timelines for the Abu Dhabi seamless plant, DI commissioning, and Saudi SAW plants? (Shweta Dikshit - Systematix)
- Answer: Seamless Abu Dhabi can be completed in 18-20 months with 50-60% first-year utilization (some months for API approvals); Saudi LSAW/HSAW plants in 18-24 months, being crashed to ~1.5 years, assuming ~50% initial utilization (150,000 tons each); the Saudi market can absorb the entire DI output. Peak utilization expected within 2-3 years from FY28-29 onwards. (Vinay Kumar Gupta, Rajeev Goyal)
Seamless Nashik Ramp-up
- Question: When will Nashik hit the earlier-guided 80,000-90,000 tons quarterly run-rate? (Shweta Dikshit - Systematix)
- Answer: API licenses were reinstated very recently; a gap of at least one quarter is expected. Utilization should start improving September/October onwards as API-related sales enter production; expect 70,000-80,000 tons quarterly from Q3 FY27. (Rajeev Goyal)
Export Order Book Composition & De-risking
- Question: What is the composition of the remaining 1.42 lakh tons of export orders, and how is the company de-risking geographically? (Sailesh Raja - 360 ONE Capital Market)
- Answer: Export order book is 60% Middle East / 40% non-Middle East; non-job-work exports comprise roughly USD70 million LSAW, USD30 million seamless and USD40 million ductile. For DI, Europe has peak demand with good inquiries; some Indian facilities will be dedicated to export markets. Management is actively pursuing Latin America, Southeast Asia and CIS for line pipes; US/China/Canada are not economical for longitudinal/helical products. (Rajeev Goyal, Vinay Kumar Gupta)
Hydrogen Transportation Pipes
- Question: How big is the hydrogen pipe opportunity and what is the competitive win rate versus global players? (Sailesh Raja - 360 ONE Capital Market)
- Answer: The company is qualified and certified for hydrogen transportation pipes (API 5L, 70,000 psi yield strength from Italy lab); facilities are ready. However, ground-level demand has not yet materialized significantly — discussions are ongoing but no meaningful demand seen in this specific area. (Rajeev Goyal)
Margin Trajectory
- Question: The last call guided that margins have bottomed out — will Q1 be the trough or will pressure continue into Q2? (Disha Chamria - Trinetra Asset Managers)
- Answer: Margins were impacted by West Asia issues, Jal Jeevan Mission slowdown and API suspension, hurting utilization and fixed-overhead absorption. Q2 may be similar to Q1, but H2 is expected to show improvement over H1 if domestic and Middle East demand solutions materialize. H1 softness was already guided in the previous call. (Vinay Kumar Gupta, Rajeev Goyal)
Capacity Utilization & Peak Debt
- Question: What is current capacity utilization, can product-wise sales be broken down, and what will peak debt be? (Vipulkumar Shah - Sumangal Investments)
- Answer: Utilization was ~60-65% in FY26 and is currently similar; product-wise sales are not disclosed as the pipe portfolio is reported as a single segment. No domestic capacity additions are planned; term debt is expected to reach ~₹3,500 crores once Middle East projects complete, with working capital additional. (Rajeev Goyal)
Key Takeaway
Jindal Saw's Q1 FY27 was hit by concurrent constraints: the Strait of Hormuz blockade suspended MENA exports since March 2026, Jal Jeevan Mission-linked water demand stayed weak, and the seamless pipe API license suspension (January-mid-June 2026) blocked certified oil & gas orders. Consolidated income rose 9% YoY to ₹4,476 crores, but EBITDA fell 39% to ₹421 crores and PAT dropped 78% to ₹91 crores, with utilization at 60-65% impairing fixed-cost absorption. Management expects FY27 volumes broadly flat versus FY26, Q2 similar to Q1, and H2 improvement as seamless ramps to 70,000-80,000 tons quarterly from October 2026. Strategically, the company is building a Middle East production corridor — a USD300 million Abu Dhabi seamless plant and a 51% Saudi JV with LSAW/HSAW mills of 300,000 tons each — targeting FY28-29 commissioning, while diversifying exports toward Europe, Southeast Asia and CIS. Key watch items: MENA conflict resolution, execution of the 600,000-ton Saudi order, and term debt rising toward ₹3,500 crores as capex peaks.