Jindal Saw

Jindal Saw reported a strong sequential recovery in Q3 FY26, with consolidated total income increasing by 16.4% QoQ to INR 4,963 crores. Consolidated EBITDA saw a significant jump of 31.1% QoQ to INR 632 crores, and PAT surged by 78.4% QoQ to INR 248 crores. Despite this sequential improvement, the company's performance lagged behind the comparable quarter of the previous year, with consolidated total income down 6.2% YoY and EBITDA down 34.2% YoY, reflecting a challenging market environment.

The company's pipes business reported a rise in its total order book volume, reaching 19.64 lakh metric tons in December 2025, up from 19.25 lakh metric tons in September 2025. The consolidated order backlog, including the UAE subsidiary, stands at approximately $1.7 billion. Management expressed a positive outlook, anticipating 15-20% volume growth for the next year, driven by a strong sales funnel and increasing inquiries from both domestic and international markets, particularly for seamless pipes.

The DI pipe business continues to face significant challenges due to protracted payment timelines in the Indian water sector, particularly from EPC customers working under the Jal Jeevan Mission (JJM), with approximately INR 350 crores in overdue receivables. This has led to a market shift where supply now exceeds demand, resulting in margin compression in the DI sector. The company is strategically increasing its focus on DI pipe exports, which were previously minimal (less than 5%), to derisk dependence on the domestic market.

Jindal Saw is actively expanding its Middle East footprint with new projects. A new seamless pipe plant in Abu Dhabi (KEZAD Zone) is under development with a $20 million equity infusion, expected to be commissioned by February 2028. Additionally, joint ventures for a saw pipe manufacturing facility and a ductile iron pipe facility in Saudi Arabia (both 51% ownership) are underway, also targeting commissioning by February 2028. The new seamless plant piercing mill in India is stabilizing production, enabling a capacity increase of approximately 4 lakh tons per annum.

The company demonstrated improved financial health with consolidated net debt reducing to INR 3,346 crores as of December 31, 2025, from INR 3,856 crores on September 30, 2025. Long-term debt on a consolidated basis stands at INR 690 crores, with INR 500 crores attributable to an LIC-backed entity having a well-staggered redemption schedule between 2028 and 2030. Management highlighted the sustainability of its long-term debt structure and its focus on optimizing cash flow and reducing debt costs, supported by ample working capital lines.

The company is closely monitoring developments related to the Jal Jeevan Mission, acknowledging that the scheme's execution has been impacted by state-level issues, including corruption and CBI matters, and delays in fund releases. Management is hopeful for positive news from the upcoming Union Budget on February 1, 2026, which could normalize the situation and restart the supply chain for water infrastructure projects, potentially adding to business opportunities not backed by central government funds.

In response to domestic market challenges^🌐, particularly in the DI pipe segment, Jindal Saw is intensifying its export efforts. The company aims to increase its export share in the DI sector, which was previously minimal (less than 5%), and is exploring new export opportunities for seamless pipes, especially in the MENA region. This strategy leverages its existing and upcoming facilities in Abu Dhabi and Saudi Arabia to build foundational demand and strengthen business resilience against domestic market volatility^🌐.