Jindal Saw

Jindal Saw reported a challenging Q4 FY26, with consolidated total income declining 6.16% QoQ to ₹4,657 crores and consolidated EBITDA falling 20.25% QoQ to ₹504 crores. Consolidated PAT saw a significant 50% QoQ drop to ₹124 crores. For the full year FY26, consolidated total income was ₹17,987 crores (down 14.13% YoY), EBITDA was ₹2,306 crores (down 35.01% YoY), and PAT was ₹925 crores (down 36.55% YoY), indicating a difficult year compared to FY25.

Geopolitical conflict in the MENA region severely impacted Q4 performance, leading to the suspension of all export shipments from India and Abu Dhabi since March 2026. This region accounts for approximately 29-30% of the company's order book. Management stated that 30,000 to 40,000 tons of material ready for shipment were deferred, resulting in lower Q4 profitability and deferring revenue recognition to FY27. The Abu Dhabi plant's sales were also restricted to customers within trucking range due to safety concerns.

The carbon seamless pipe segment faced a temporary setback^📎 due to API audit non-conformances, leading to the suspension of the API monogram use. While all non-conformances have been addressed, a revisit by API authorities is scheduled for May 2026 for verification. This regulatory delay is expected to temporarily impact sales in this segment, although the company is leveraging flexible manufacturing capabilities to mitigate the loss by shifting production to alternative seamless pipe products.

Despite the challenging environment, Jindal Saw is pursuing strategic expansions. In Abu Dhabi, a carbon seamless pipe plant is being set up, with land secured, equipment ordered, and LCs opened. In Saudi Arabia, a joint venture (51% Jindal Saw, 49% Buhur Group) is establishing LSAW and HSAW facilities, with land secured and LCs for some equipment. These projects are being fast-tracked, and lenders have shown good appetite for funding, leveraging the company's robust debt profile.

The domestic water pipe business, particularly under the Jal Jeevan Mission, experienced sluggish project execution in FY26. While the macro demand for water infrastructure remains, state governments' funding arrangements and order placements have been slow. Management noted that Q4 sales for the water business were better than Q3, and recent government orders to fast-track pipe gas rollout and ONGC's $20 billion deepwater exploration projects present future opportunities, though initial hiccups are expected for Jal Jeevan Mission 2.0.

Jindal Saw maintained a robust debt profile, with consolidated net debt reducing to ₹2,528 crores as of March 31, 2026, from ₹3,346 crores on December 31, 2025. Consolidated long-term debt stood at ₹692 crores. The company emphasized its high liquidity, deleveraged balance sheet, and strong working capital lines, which provide a critical buffer to fund future growth and manage business volatility. Management projected a net debt to EBITDA ratio of 2-2.5 in two years, assuming EBITDA returns to FY24/25 levels.

Management acknowledged overcapacity in the ductile iron pipe segment, which may lead to lower utilization until Jal Jeevan Mission gains momentum. However, other segments like longitudinal, helical, and seamless pipes are well-placed with sufficient capacity. The stainless steel business is expected to face margin challenges, but the company aims to capture the upper-end segment. Margin improvement is envisaged for the seamless segment due to robust demand, and margin expansion for stainless steel is anticipated from H2 FY27.