Jindal Saw — Q1 FY27 earnings call

Call held 15 Jul 2026

Management summary

Jindal Saw reported a mixed Q1 FY27 with consolidated revenue growing 9% YoY to INR 4,476 crores, but profitability significantly impacted by a 39% YoY decline in EBITDA to INR 421 crores and a 78% YoY drop in PAT to INR 91 crores. The company faced headwinds from geopolitical issues in the MENA region, delays in domestic water infrastructure projects, and a temporary suspension of its API license for seamless pipes. Despite these challenges, debt reduced, and the API license reinstatement offers hope for improved performance in H2 FY27, alongside ongoing MENA expansion projects.

Highlights

  • Consolidated Total Income increased by approximately 9% YoY to INR 4,476 crores in Q1 FY27.

  • Standalone Total Income increased by approximately 13% YoY to INR 3,756 crores in Q1 FY27.

  • Standalone net debt narrowed to INR 2,345 crores as of June 30, 2026, from INR 2,453 crores as of March 31, 2026.

  • Consolidated net institutional debt reduced to INR 2,472 crores from INR 2,528 crores as of March 31, 2026.

  • CARE Ratings reaffirmed A1+ for short-term and AA Outlook Stable for long-term facilities.

  • API license for seamless pipe business reinstated in mid-June 2026, allowing resumption of API-certified supplies.

Concerns

  • Consolidated EBITDA declined by approximately 39% YoY to INR 421 crores in Q1 FY27.

  • Consolidated PAT declined by approximately 78% YoY to INR 91 crores in Q1 FY27.

  • Standalone EBITDA declined by approximately 40% YoY to INR 341 crores in Q1 FY27.

  • Standalone PAT declined by approximately 70% YoY to INR 110 crores in Q1 FY27.

  • Jindal Hunting JV reported a loss of INR 5.3 crores in Q1 FY27, its first-ever loss.

  • Geopolitical situation in MENA region (Strait of Hormuz blockage) suspended outward shipments from March 2026, impacting exports.

Key financials

  1. Standalone Total Income ₹3,756 Cr +13%YoY
  2. Standalone EBITDA ₹341 Cr -40%YoY
  3. Standalone PAT ₹110 Cr -70%YoY
  4. Consolidated Total Income ₹4,476 Cr +9%YoY
  5. Consolidated EBITDA ₹421 Cr -39%YoY
  6. Consolidated PAT ₹91 Cr -78%YoY

What they filed

Q1 FY27: revenue up 9.0%, net profit down 78.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue5,572 5,271 5,047 4,085 4,234 −24%4,943 −6%4,633 −8%4,452 +9%
EBITDA914 939 736 670 451 −51%613 −35%478 −35%391 −42%
Net profit475 479 87 415 139 −71%248 −48%124 +43%91 −78%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Jindal Hunting (JV)
    ₹5 Cr Revenue₹5.3 Cr Loss

Order book

high confidence

Total value

$188 Mn

as of 2026-06-30 quantified

Execution

operational visibility for next three to four quarters

Composition

Mix 2 geographies
  • Middle East Exports 60%
  • Non-Middle East Exports 40%

Share of order book by geography

Cancellations & deferrals

  • suspended: Outward shipments to MENA region suspended since March 2026 due to geopolitical situation.
  • deferred: Some shipments to non-MENA regions deferred to Q2 FY27 due to heavy traffic at Indian ports.
  • on hold: Sizable order book for Middle East from India is on hold.
Order book is quite consistent, with a slight dip in volumes, and the company expects to execute these orders in the current year, maintaining FY26 volume levels.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Seamless pipe manufacturing facility in Abu Dhabi $300 Mn
    • Advanced LSAW and HSAW pipe mills in Saudi Arabia (JV)
    As you know, we had announced seamless project in Abu Dhabi and SAW pipe project in Saudi Arabia. So first, let's talk about seamless pipe plant in Abu Dhabi. As we updated on various occasions, the company had initiated the process to set up a state-of-the-art 3 lakh ton seamless pipe manufacturing facility in Abu Dhabi with an estimated project cost of approximately USD300 million.
  • Debt Net ₹2,345 Cr
    Now in terms of our indebtedness, as of 30th June 2026, the standalone net debt narrowed to INR2,345 crores as that -- and -- versus INR2,453 crores as of 31st March 2026. This includes INR526 crores of long-term debt. This is primarily INR500 crores out of this is from LIC, NCD which is repayable in 3 equal installments in FY28, '29 and '30.
  • M&A SAW pipe plant in Saudi Arabia Joint venture · Signed

    Dedicated to establishing advanced LSAW and HSAW pipe mills to serve regional water infrastructure and energy demand.

    Some brief about our SAW pipe plant in Saudi Arabia. We updated in the past that we have established a strategic joint venture in Saudi Arabia, holding a 51% equity stake alongside Buhur of KSA -- Saudi, which will hold 49%.

Guidance & targets

Volume

  • FY27 Overall Volume Volume · FY27 · Medium confidence Same level as FY26
    So this is our estimate that if the situation remains same, volume-wise we are likely to achieve the same level what we did in FY26.

    — Rajeev Goyal

Capacity Utilization

  • Seamless Nashik Plant Quarterly Utilization Capacity Utilization · Quarterly from October onwards · Medium confidence 70,000-80,000 tons
    So it will be somewhere in 70,000 to 80,000 tons, yes, definitely, quarterly.

    — Rajeev Goyal

  • MENA Projects First Year Utilization Capacity Utilization · First year of operation · Medium confidence 50-60%
    And again, when we are commissioning the project, we believe that we can do 50% to 60% in the first year.

    — Vinay Kumar Gupta

  • MENA Projects Peak Utilization Capacity Utilization · Within 2-3 years from '28, '29 onwards · Medium confidence Peak capacity utilization
    Yes. So, Shweta, you're right, within 2 to 3 years' time, we are expecting the peak capacity utilization in all the plants. ... Yes. From '28, '29 onwards. Yes.

    — Rajeev Goyal

Project Commissioning

  • MENA Projects (Seamless & SAW) Commercial Operation Project Commissioning · FY29 · High confidence FY29
    The project remains firmly on track, which is likely to commence the commercial operation in FY29.

    — Vinay Kumar Gupta

Profitability

  • H2 FY27 Performance Profitability · H2 FY27 · Medium confidence Improvements over H1
    But in general, we expect that, what we have done in the first quarter, maybe second quarter may also be similar or whatever, but we are hopeful that if everything works well, the H2 would start showing the improvements over the H1.

    — Vinay Kumar Gupta

Debt

  • Term Debt Post-Projects Debt · After projects are over · Medium confidence INR 3,500 crores approximately

    Previously INR 500 crores → INR 3,500 crores approximately

    After the projects are over, we are estimating that term debt should remain in the range of INR3,500 crores approximately.

    — Rajeev Goyal

What to watch in Q2 FY27

Seamless Nashik Plant Utilization

From October onwards
Current Impacted by API license suspension (Jan-mid June 2026)
Target 70,000-80,000 tons quarterly

Why it matters

Improved utilization of the Nashik plant is crucial for the recovery of the seamless pipe business and overall profitability post API license reinstatement.

So it will be somewhere in 70,000 to 80,000 tons, yes, definitely, quarterly.

Risks & concerns

  • Geopolitical situation in MENA region

    high

    US-Iran tensions and Strait of Hormuz blockage led to suspension of outward shipments from March 2026, bringing MENA trade to a standstill.

    Management acknowledged

  • API license suspension for seamless pipe business

    high

    API license was suspended from January 2026 until mid-June 2026, limiting participation in certified oil and gas orders and impacting Jindal Hunting JV performance.

    Management acknowledged

  • Muted performance and margin pressure

    high

    Q1 FY27 performance remained muted, similar to Q4 FY26, with EBITDA and PAT significantly declining due to external and internal factors, impacting utilization and fixed overhead absorption.

    Management acknowledged

  • Domestic water infrastructure demand weakness

    medium

    Jal Jeevan Mission-linked project execution affected by delayed central funds, title scrutiny, pending dues, and slowed project timelines in multiple states.

    Management acknowledged

  • Heavy traffic at Indian ports

    low

    Caused deferral of some non-MENA export shipments to Q2 FY27.

    Management acknowledged

Q&A highlights

7 direct
Future volume visibility and execution given market challenges Direct
Given the current scenario, domestic as well as overseas, order book is quite consistent. There is a little bit of dip in terms of volumes, but we are in the current situation also we are likely to execute these orders in the current year, and the volumes are likely to remain at the same level as it were in FY26.

Analyst sought clarity on volume outlook amidst geopolitical and domestic project delays, and management provided a flat volume guidance for FY27.

Asked by Deepak Poddar

Impact of Middle East conflict on order execution and alternative strategies Direct
So, we have a sizable order book for Middle East from India. As of now, that order book is on hold, but we are now working out on various other options...

Analyst questioned how the company plans to execute its Middle East order book given the ongoing conflict, revealing that a significant portion is on hold and alternative execution strategies are being explored.

Asked by Deepak Poddar

Timelines and utilization for new MENA projects (Abu Dhabi seamless, Saudi SAW) Direct
Overall, production in all facilities will start in '28, '29. Number two, theoretically, we are considering roughly 50% approximately production in all the facilities. ... within 2 to 3 years' time, we are expecting the peak capacity utilization in all the plants. From '28, '29 onwards.

Analyst sought specific timelines and capacity utilization targets for the major overseas expansion projects, providing investors with a roadmap for future growth.

Asked by Shweta Dikshit

Seamless Nashik plant utilization post API license reinstatement Direct
So, since January to June, we were not eligible to participate in any of the API-related supply tenders. So, this activity has started now. ... October onwards, we can expect the better utilization in seamless. ... somewhere in 70,000 to 80,000 tons, yes, definitely, quarterly.

Analyst inquired about the ramp-up of the domestic seamless business after a critical license reinstatement, giving a clear timeline for improved utilization.

Asked by Shweta Dikshit

Margin outlook for Q2 and H2 FY27 Direct
But in general, we expect that, what we have done in the first quarter, maybe second quarter may also be similar or whatever, but we are hopeful that if everything works well, the H2 would start showing the improvements over the H1.

Analyst probed on the sustainability of margin pressure, and management indicated that H1 would be softer but H2 is expected to show improvements.

Asked by Shweta Dikshit

Geographic de-risking strategy for order book beyond MENA Direct
To mitigate the domestic risk, we have already started exploring the overseas market, primarily the Europe, which is having a peak demand, and we are also getting good inquiries from this market, and we are likely to increase our export order book in the coming quarters.

Analyst questioned the company's strategy to diversify its order book geographically, revealing new market focus areas like Europe for ductile iron pipes.

Asked by Sailesh Raja

Opportunity for hydrogen transport pipes Partial
So we are qualified for that, and we have got some certifications that our pipes are qualified for transportation of hydrogen gas. In that scenario, we are also exploring the possibilities and exploring the market. ... But still, the ground-level demand is yet to come.

Analyst asked about a niche but potentially high-growth area, and management confirmed qualification but noted nascent market demand.

Asked by Sailesh Raja

Peak debt level after completion of MENA projects Direct
After the projects are over, we are estimating that term debt should remain in the range of INR3,500 crores approximately.

Analyst inquired about the long-term debt trajectory, providing a clear estimate of the peak debt post-project completion, which is a significant increase from current levels.

Asked by Vipulkumar Shah

3 min read 6 chapters

Detailed narrative

Q1 FY27 Financial Performance Overview

Jindal Saw reported a challenging Q1 FY27 with consolidated total income increasing by 9% YoY to INR 4,476 crores, and standalone total income up 13% YoY to INR 3,756 crores. However, profitability saw significant declines, with consolidated EBITDA falling 39% YoY to INR 421 crores and PAT dropping 78% YoY to INR 91 crores. Standalone figures mirrored this trend, with EBITDA down 40% to INR 341 crores and PAT down 70% to INR 110 crores. The company attributed this muted performance to a combination of external geopolitical factors and internal operational constraints.

Impact of Geopolitical and Domestic Market Challenges

The company's operations were significantly affected by geopolitical tensions in the MENA region, leading to the suspension of outward shipments since March 2026 and a standstill in trade through the Strait of Hormuz. Domestically, the water segment remained weak due to delays in the Jal Jeevan Mission, including delayed central funds and title scrutiny issues. Additionally, the seamless pipe business faced constraints due to the suspension of its API license from January to mid-June 2026, which limited its ability to participate in certified oil and gas orders.

Strategic Expansion in MENA Region

Jindal Saw is actively pursuing growth opportunities in the MENA region, driven by a shift towards more secure overland energy infrastructure. Key projects include a 3 lakh ton seamless pipe manufacturing facility in Abu Dhabi with an estimated project cost of USD 300 million, expected to commence commercial operations in FY29. The company has also established a 51% owned joint venture in Saudi Arabia for advanced LSAW and HSAW pipe mills, each with 300,000 metric tons per annum capacity. Both projects are progressing with land secured and equipment procurement underway, with financial closures anticipated in the coming months.

Order Book and Export Diversification

The Abu Dhabi subsidiary holds a robust order book of USD 188 million (1,77,000 tons) as of June 30, 2026, providing 3-4 quarters of operational visibility. While a sizable order book for the Middle East from India is currently on hold due to regional conflicts, the company is exploring alternative execution options. To mitigate domestic market risks, Jindal Saw is actively exploring overseas markets like Europe for ductile iron pipes, aiming to increase its export order book in the coming quarters and de-risk its concentration on the domestic market.

Debt Profile and Future Capital Allocation

Jindal Saw successfully reduced its standalone net debt to INR 2,345 crores and consolidated net institutional debt to INR 2,472 crores as of June 30, 2026. The company's long-term debt includes INR 500 crores from LIC NCDs, repayable in FY28-FY30. Looking ahead, management estimates that term debt will gradually increase to approximately INR 3,500 crores after the completion of the ongoing MENA expansion projects. The company's current capacity utilization for FY26 was around 60-65%, with similar levels in Q1 FY27, and no domestic capacity additions are planned.

Outlook and Recovery Expectations

Management anticipates that Q1 and potentially Q2 FY27 will remain soft due to persistent geopolitical issues and lower utilization. However, with the reinstatement of the API license for seamless pipes in mid-June 2026, the company expects better utilization at its Nashik plant, targeting 70,000-80,000 tons quarterly from October onwards. Overall, the company is hopeful for improvements in H2 FY27, driven by the resolution of internal constraints and strategic market diversification efforts.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls