Jindal Saw — Q4 FY26 earnings call

Call held 28 Apr 2026

Management summary

Jindal Saw reported a challenging Q4 FY26 with significant QoQ declines in consolidated revenue, EBITDA, and PAT, primarily due to suspended export shipments to the MENA region and API audit issues impacting seamless pipe sales. Despite these headwinds, the company demonstrated strong debt reduction and is progressing with strategic investments in Abu Dhabi and Saudi Arabia. Management acknowledged the unpredictable environment but expressed confidence in long-term demand and the ability to ramp up operations once conditions improve.

Highlights

  • Consolidated net debt reduced to ₹2,528 crores as of March 31, 2026, from ₹3,346 crores on December 31, 2025, indicating robust debt management.

  • Abu Dhabi subsidiary holds a strong order book of approximately $180 million (171,000 metric tons), providing 9 months of revenue visibility.

  • New investments in Abu Dhabi (carbon seamless pipe plant) and Saudi Arabia (LSAW/HSAW JV) are progressing, with land secured and equipment LCs opened.

  • Management expects margin improvement in the seamless segment due to robust demand and anticipates margin expansion in the stainless steel business from H2 FY27.

  • The company maintains high liquidity and a deleveraged balance sheet, positioning it well to fund future growth despite current challenges.

Concerns

  • Consolidated PAT for Q4 FY26 declined 50% QoQ to ₹124 crores, missing original expectations.

  • Export shipments to the MENA region, comprising 29-30% of the order book, have been suspended since March 2026 due to military conflict, impacting Q4 profitability and deferring revenue recognition to FY27.

  • The carbon seamless pipe segment faces temporary sales impact due to API audit non-conformances, with verification scheduled for May 2026.

  • The ductile iron pipe segment is experiencing oversupply and sluggish project execution under the Jal Jeevan Mission, leading to lower utilization.

  • The company incurred a ₹48 crores foreign exchange cost in Q4 due to the rupee's sharp depreciation from ₹88.88 to ₹94.84 per dollar.

Key financials

  1. Consolidated Total Income ₹4,657 Cr -6.2%QoQ
  2. Consolidated EBITDA ₹504 Cr -20.3%QoQ
  3. Consolidated PAT ₹124 Cr -50%QoQ
  4. Consolidated Total Income FY26 ₹17,987 Cr -14.1%YoY
  5. Consolidated EBITDA FY26 ₹2,306 Cr -35%YoY
  6. Consolidated PAT FY26 ₹925 Cr -36.5%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.

Order book

medium confidence

Execution

fully booked for a couple of quarters, with some orders potentially extending 2-4 quarters out

Composition

  • Export to MENA region (geography) 29.5%

Cancellations & deferrals

  • deferred: All export shipments to MENA region suspended since March '26 due to military conflict, resulting in deferment of 30,000 to 40,000 tons of material ready for shipment.
  • deferred: A 6 lakh tons job-work order has 2 lakh tons of buyer-supplied steel sitting, unable to be processed into pipes due to transport/dispatch issues.
The company's order book is fully booked for a couple of quarters, with significant export exposure to the MENA region currently on hold due to geopolitical conflicts, leading to deferrals rather than cancellations.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹500 Cr Lenders have good appetite for long-term debt for projects
    • Debottlenecking, enhancing operational efficiencies, and providing infrastructure to Indian facilities
    • Setting up a carbon seamless pipe plant in Abu Dhabi
    • Setting up LSAW and HSAW facility in Saudi Arabia (JV)
    Our endeavor will now be to set up all these plants in Abu Dhabi and KSA on fast-track basis... So, there is a good amount of appetite of the lenders to lend the long-term debt to the company for setting up the projects.
  • Debt Net ₹2,528 Cr · 2.5× EBITDA
    On consolidated basis, for the quarter 4, the total income... Net institutional debt on a consol basis has reduced to INR2,528 crores as compared to INR3,346 crores, which was on 31st December '25. Long-term debt on 31st March was INR692 crores only... if similar levels [FY24/25 EBITDA INR 3,500 crores] return in 2 years, debt to EBITDA would be 2-2.5 (including working capital).
  • M&A LSAW and HSAW facility in Saudi Arabia Joint venture · Announced

    Strategic expansion in MENA region

    Jindal Saw has 51% investment, Buhur Group 49%. Cost impact on balance sheet will be lower due to JV structure.

    In Saudi Arabia, company established a joint venture company with its investments of 51% and balance 49% is by Buhur Group in KSA. This JV will set up a LSAW and HSAW facility.
  • Liquidity Liquidity disclosed High liquidity provides a critical buffer, with a deleveraged balance sheet and strong working capital lines available with the banking system.
    In today's volatile time, our high liquidity provides a critical buffer. With a deleveraged balance sheet and a strong working capital lines available with the banking system, we are well positioned to fund future growth.

Guidance & targets

Capex

  • FY26 Capex Capex · FY26 · High confidence ₹500-600 crores
    Yes. For this year, we expect INR500 crores to INR600 crores.

    — Vinay Kumar Gupta

  • FY27 Capex Capex · FY27 · Medium confidence ₹400-500 crores
    Maybe you can consider INR500 crores to INR600 crores this year, INR400 crores, INR500 crores next year, something like this.

    — Vinay Kumar Gupta

Margin

  • Seamless Segment Margins Margin · Ongoing · Medium confidence Improvement
    So, there will be improvement -- yes, there will be improvement in margins in seamless segment because we envisage that demand should remain robust and that will actually result into the little bit better margins.

    — Rajeev Goyal

  • Stainless Steel Business Margins Margin · H2 FY27 · Medium confidence Expansion
    And that margin expansion will happen from the second half of FY '27. Is that the expectation, sir? Yes. Yes.

    — Rajeev Goyal

What to watch in Q1 FY27

Resolution of API audit for carbon seamless pipes

next quarter
Current Verification scheduled for May 2026
Target API monogram use reinstated, sales normalized

Why it matters

Resolution is key to restoring sales and profitability in the carbon seamless pipe segment.

Auditors appointed by API authorities are scheduled to revisit our factory in Nashik in May 2026 for verification.

Risks & concerns

  • Geopolitical conflict in MENA region leading to suspension of export shipments

    high

    All export shipments to MENA, comprising 29-30% of order book, suspended since March '26, deferring revenue recognition and impacting Q4 profitability.

    Management acknowledged

  • API audit non-conformances impacting carbon seamless pipe sales

    medium

    Suspension of API monogram use due to non-conformances, with verification scheduled for May 2026, causing temporary sales impact.

    Management acknowledged

  • Sluggish execution of Jal Jeevan Mission and overcapacity in ductile iron pipes

    medium

    Project execution remains sluggish, impacting water pipe business, and there is an oversupply of capacity in the ductile iron segment.

    Management acknowledged

  • Raw material price volatility and inflationary pressures

    medium

    Volatility in steel, crude, and diesel prices can impact profitability, with no guarantee of passing on costs to buyers, especially for delivered products.

    Management acknowledged

  • Foreign exchange loss due to Rupee depreciation

    low

    Incurred ₹48 crores foreign exchange cost in Q4 FY26 due to Rupee depreciating from ₹88.88 to ₹94.84 per dollar.

    Management acknowledged

Q&A highlights

3 direct
Outlook on margins, specifically if they have bottomed out and will improve going forward. Partial
So that's what we thought for -- at the call of Q3, we said that perhaps we have -- it has bottomed out, okay? And it's a function of all the things. Margins is not a function of only like raw material and steel price because if my capacity is underutilized, the fixed overheads start hitting you.

Analyst sought clarity on margin trajectory, but management indicated it depends on multiple factors beyond raw material costs, including utilization and external volatilities, suggesting uncertainty.

Asked by Dhananjai Bagrodia

Quantification of sales lost due to Middle East war and suspended shipments. Partial
Basically, there is no loss per se, it is a deferment because shipments are going to go once the situation is improved in this region. So approximately 30,000 to 40,000 material was ready for shipment, which was deferred. So apart from this, there is no loss as such... in terms of value, it would be more than that [INR 30-40 crores].

Analyst tried to quantify the revenue impact of export deferrals, but management only provided a volume range and qualitative 'more than that' for value, indicating significant but unquantified short-term revenue impact.

Asked by Digant Haria

Presence of overcapacity in various pipe segments, particularly ductile iron pipes. Direct
So, as you mentioned that overcapacity position, if there is a demand which is coming back. So, what we feel that in ductile iron pipes, there may be some oversupply in terms of capacities. But apart from this, other segments are well placed like longitudinal, helical as well as seamless.

Management confirmed overcapacity in the ductile iron pipe segment, which could pressure utilization and margins, while other segments are better positioned.

Asked by Digant Haria

Near-term strategy for helical saw capacity given Middle East challenges: prioritize high-margin export orders or lower-margin domestic orders for utilization. Direct
We actually we are fully booked for a couple of quarters. So if we have to given the option to take order, we might not be able to take order for next 2 or 3 or 4 quarters time. So to my understanding, the industry is reasonably booked for export as well as domestic.

Management clarified that the company is already fully booked for several quarters, implying that the decision between high-margin exports and domestic utilization is less pressing due to existing order visibility.

Asked by Sailesh Raja

Peak debt levels and net debt to EBITDA ratio given planned capex over the next 2-3 years. Partial
if you have to include the working capital debt into the overall indebtedness and then to test it, this, of course, will be on a bit elevated level. It depends like what we are talking when we are talking because in '24, '25, we had EBITDA of INR3,500 crores. And then we thought that in 2 years' time, we would have significantly higher EBITDA. So, if we go back to that, similar levels in some time, then we would still be in the range of, let's say, 2, 2.5 debt to EBITDA, all including working capital, everything.

Management provided a conditional outlook on Net Debt to EBITDA, linking it to future EBITDA recovery and the inclusion of working capital debt, indicating potential for the ratio to rise before stabilizing.

Asked by Sailesh Raja

Outlook on demand and competitive intensity in Saudi Arabia, given new capacity and existing players. Direct
So in my view, in next 1 year, the majority of the requirement would still be serviced from the imports in Saudi because like the -- whatever let's say other people are doing, they will still take some time to set up, take approvals and then meet the criteria and do it. So till that time, if a major requirement comes, that hopefully, that could be serviced out of India. And in next 2 years' time, I think we would also be operational, others will also be operational.

Management outlined a phased market entry strategy for Saudi, suggesting initial reliance on imports and a 2-year timeline for new local capacities to become fully operational, providing a competitive buffer.

Asked by Vanshika Jain

Execution status of Jal Jeevan Mission 2.0 and its impact on the water pipe business. Partial
Now the motto of the Jal Jeevan Mission is also shifting from putting infrastructure to ensuring the service at the end level. So there might be some initial hiccups in terms of fresh implementation. But once it is set up, then there will be -- like it will be business as usual. There will be more monitoring from the center also, but it will be business as usual.

Management acknowledged initial hiccups and a shift in focus for Jal Jeevan Mission, implying a slower-than-expected rollout and potential delays in demand materializing for water pipes.

Asked by Vanshika Jain

3 min read 7 chapters

Detailed narrative

Q4 FY26 Performance Overview and Full Year Trends

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.

Impact of MENA Conflict and Export Deferrals

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.

API Audit and Carbon Seamless Pipe Segment Challenges

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.

Strategic Capital Allocation and Expansion Plans

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.

Domestic Market Dynamics and Jal Jeevan Mission

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.

Debt Profile and Liquidity Management

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.

Segmental Outlook and Margin Expectations

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.

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

More Capital Goods earnings calls