JTL Industries Limited — Q1 FY26 earnings call

Call held 17 Jul 2025

Management summary

JTL Industries reported a total income of INR 549.6 crores and a sales volume of 1,08,406 metric tons in Q1 FY26. Despite strategic initiatives like new ASTM/API-grade pipe commissioning and entry into ultra-thin brass foil production, profitability was impacted, with EBITDA margin at 4.3% and PAT margin at 3%. The company faced challenges including inventory losses due to HR coil price volatility and initial pricing pressure for new DFT products to gain market traction, resulting in an EBITDA per ton of approximately INR 2,149.3 against a full-year guidance of INR 4,000.

Highlights

  • Total income reached INR 549.6 crores in Q1 FY26.

  • Sales volume achieved 1,08,406 metric tons for the quarter.

  • Value-added products accounted for 20% of the sales mix, aligning with focus on higher-margin offerings.

  • Initiated plans for commissioning a new ASTM/API-grade pipe market, positioning JTL as one of the few manufacturers with capability for larger diameter, higher thickness API-grade ERW pipes.

  • Commissioned production of ultra-thin 0.04 mm brass foil through a strategic job-work arrangement, entering a higher-value niche segment.

Concerns

  • EBITDA margin at 4.3% and PAT margin at 3% are lower than expected, with EBITDA per ton at approximately INR 2,149.3, significantly below the INR 4,000 guidance.

  • Experienced inventory losses of approximately INR 1,000 per ton due to correction in HR coil prices in June 2025.

  • DFT product sales required pricing dips and special discounts in Q1 FY26 to gain market acceptance, impacting initial margins.

  • Trump tariffs are currently hindering entry into US and Canadian markets for DFT products, impacting export potential.

Key financials

  1. Total Income ₹549.6 Cr
  2. EBITDA ₹23.3 Cr
  3. EBITDA Margin 4.3%
  4. PAT ₹16.55 Cr
  5. PAT Margin 3%
  6. Sales Volume 1,08,406 metric tons
  7. Value-added products share 20%
  8. Export Volume 6,404 metric tons
  9. EBITDA per ton ₹2,149.3/ton

What they filed

Q1 FY27: revenue up 6.3%, net profit up 81.3% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue480 452 466 504 371 −23%423 −6%500 +7%536 +6%
EBITDA30 35 17 21 29 −3%35 +0%39 +129%43 +105%
Net profit26 25 17 16 20 −23%26 +4%26 +53%29 +81%
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.

Capital allocation

high confidence
  • Capex ₹50 Cr this quarter · ₹240 Cr (FY26) planned
    • New DFT capacity
    • New GI coil line and 30 kilo ton per annum API-grade ERW plant
    And in first quarter, we did a capex of close to INR50 crores and we'll be having the same run rate of INR50 crores per quarter or somewhat a little more in the last quarter for this financial year.
  • Debt Debt disclosed
    There is increase in interest cost, I think if you look correctly. And the major increase in interest cost has come from subsidiary of clubbing of a subsidiary, which is JTL Engineering... Okay. But sir, is it fair to assume that the run rate of INR2.7 crores, INR2.8 crores of finance cost to continue ahead on a quarterly basis? Not In case if rates change

Guidance & targets

Profitability

  • EBITDA per ton Profitability · FY26 · High confidence INR 4,000 per ton
    So you are holding INR4,000 per ton EBITDA guidance for '26.

    — Aditya Welekar

  • EBITDA per ton Profitability · FY28 · High confidence INR 5,000 plus
    Our target eventually is to reach EBITDA per ton of -- in FY '28 of INR5,000 plus. That is something safe we can be we will be assured of.

    — Pranav Singla

Sales Volume

  • Total Sales Volume Sales Volume · FY26 · High confidence 5 lakh tons
    Yes. We are very confident to achieve that. We should be in a range bound of, say, 5 lakh tons, given plus-minus of a nominal margin thereof. We should be achieving that.

    — Dhruv Singla

  • Total Sales Volume Growth Sales Volume · FY27 · High confidence 30%
    And the guidance for the next year, we'll do 30% growth over 5 lakh tons sales volume this year.

    — Pranav Singla

  • DFT Sales Growth Sales Volume · next 2 quarters · Medium confidence 50% to 60%
    Ma'am, in the next 2 quarters, we are seeing at least a 50% to 60% growth in DFT sales.

    — Dhruv Singla

  • DFT Sales Volume Sales Volume · next quarter (Q2 FY26) · Medium confidence Double Q1 sales
    Our target in the next quarter is to double this capacity sales.

    — Dhruv Singla

  • Q2 FY26 Sales Volume Sales Volume · Q2 FY26 · High confidence 1,20,000 tons
    1,20,000 tons is a safe target for the volume that we have for this quarter.

    — Pranav Singla

Product Mix

  • VAP Share Product Mix · FY26 · High confidence 40%
    And then our full-year VAP share guidance is 40%.

    — Aditya Welekar

Exports

  • Export Share Exports · FY26 · High confidence 10%
    So, we have a target of 10% exports for FY '26.

    — Dhruv Singla

Capex

  • FY26 Capex Capex · FY26 · High confidence INR 240-250 crores
    And our full-year capex guidance, I think I missed on that. So it's near about INR240 crores, INR250 crores for '26, right?

    — Aditya Welekar

What to watch in Q2 FY26

EBITDA per ton

Next quarter (Q2 FY26)
Current ~INR 2,149.3 per ton
Target Improvement towards INR 4,000 per ton guidance

Why it matters

Key profitability metric, significant underperformance this quarter, management expects improvement as DFT scales and pricing stabilizes.

But this is not a continuous factor. We have seen a good demand going forward in DFT sales for value-added higher thickness as well since now we have the certifications required for the same. So yes, going forward in the next quarters, we'll see a better realization in those terms as well.

Risks & concerns

  • Raw material price volatility (HR coil prices)

    high

    Sharp increase in HR coil prices in April/May, followed by correction in June, leading to inventory losses of ~INR 1,000 per ton, and inability to hedge these commodities.

    Management acknowledged

  • Initial margin pressure for new DFT products

    medium

    Strategic pricing dips and special discounts were necessary in Q1 FY26 to gain market acceptance and distribution for new DFT products, impacting initial margins.

    Management acknowledged

  • Trump tariffs impacting export markets (US, Canada)

    medium

    Existing Trump tariffs are preventing entry into US and Canadian markets for DFT products, hindering export potential despite new CE certification for European markets.

    Management acknowledged

  • Inability to track distributor's ground inventory

    medium

    Management cannot track how much of its product remains unsold with distributors due to common product nature, potentially hindering accurate demand assessment.

    Analyst deflected

  • Monsoon season impacting demand

    low

    Q1 and Q2 are typically slower quarters for the industry due to monsoons, leading to demand fluctuations.

    Management acknowledged

Q&A highlights

7 direct, 1 evasive
Underperformance of EBITDA per ton despite volume and VAP share growth Direct
Firstly, we are all aware that the duty was implemented in April '21 and on April 21, 2025, after which there was a considerable jump in HR coil prices for the month of April and May, which then again corrected in the month of June... In the first quarter, we had pushed our product across segments of dealer network, OEMs to the tune of sending material to across borders to Gujarat, North, Middle, South. So to get our products out and about for DFT, so we had to take certain pricing dips in that segment and take a hit so that our product is known in the market due to that.

Explains the primary reasons for margin compression (raw material volatility and strategic pricing for new product adoption) despite positive volume trends.

Asked by Aditya Welekar

Impact of inventory loss on EBITDA per ton and hedging strategy Direct
Yes. As I mentioned with the question of Mr. Aditya Welekar, the first two months after implementation of the duty, we saw a sharp increase in prices of HR coils. In the third month of June, we saw a correction in prices. So in the third month, there was inventory losses related to the decline in prices after the sharp increase... The black coils or HR coils or iron is not a commodity that we can hedge, first of all. It is not a non-ferrous product.

Clarifies the direct financial impact of raw material price fluctuations and the company's limited ability to hedge these commodities.

Asked by Amar Maurya

Fall in revenue per ton despite higher volumes Direct
Yes. Sir, firstly, our revenue per ton is on a blended basis. If you see as compared to the last quarter, our black sales have improved and we have made more sales in black quantity. So this INR56,000 to INR54,000 is a blended number of the galvanized and the black pipe together. So when we see our increase in quantity in black pipes, this number would fall.

Explains that the decline in revenue per ton is due to a shift in product mix towards lower-priced black pipes, not necessarily a price drop across all products.

Asked by Vishal Dudhwala

Blended realization and EBITDA fall explanation Direct
So basically, in this quarter the first 2 months, the HRC prices were on a rising trend... but by the end of the quarter or by -- it's safe to say in the third month of the quarter, the prices were taking hit... Eventually, further hit came to us as well, on the same ratio. So because of those situations, whatever gains were realized in the first 2 months of this quarter, those were offset in this quarter itself and eventually turned out to be losses.

Provides a detailed breakdown of how HRC price movements led to inventory losses and offset earlier gains, impacting overall profitability.

Asked by Jyoti Singh

DFT volume ramp-up and realization Direct
Ma'am, DFT is see the DFT is this is not, say, a basic structure of DFT realization that we should think and take into note. It's a completely new product for JTL... In the next 2 months, our target is to get to those markets wherein there are higher realizations, which include penetrating into EPC contractors for various bigger projects with higher thicknesses.

Outlines the strategy for improving DFT product realization by targeting higher-margin segments like EPC contractors and clarifies that initial discounts were for market penetration.

Asked by Jyoti Singh

Rationale for expanding in ERW pipes given market capacity Direct
We are not exactly expanding in the same capacity that we already have... When we are expanding in when we expanded in DFT, it was the structural steel segment, which is replacing the angle, channels, guarders. Now the second set of expansion that we recently announced is the API-grade, which goes into oil and gas segment, water transportation segment, larger die pipes... Second part of our expansion is the sheeting or the pre-galvanized CR coils, pre-coated coils, this segment, so which is not exactly related to the ERW segment...

Clarifies that expansion is into specialized, higher-value ERW segments (structural steel, API-grade, pre-galvanized coils) rather than generic ERW, addressing concerns about overcapacity.

Asked by Ajit Sethi

Tracking ground inventory for distributors Evasive
No, no. Nobody has that mechanism in the market, I believe. We don't have that mechanism to know how much of our product is unsold on his because the products are common. If you do not see the stamping on the product, we don't we can't get to know if it's APL Apollo's or JTL's. So that is not visible from the naked eye.

Reveals a potential blind spot in demand forecasting or inventory management, as the company cannot track its products once sold to distributors, which could impact future sales and production planning.

Asked by Ajay Kale

Interest cost doubling and run rate Direct
There is increase in interest cost, I think if you look correctly. And the major increase in interest cost has come from subsidiary of clubbing of a subsidiary, which is JTL Engineering. And in first quarter, we did a capex of close to INR50 crores...

Highlights a significant increase in finance costs, attributed to a subsidiary's consolidation, which will be a recurring expense impacting profitability.

Asked by Lokesh Kashikar

2 min read 6 chapters

Detailed narrative

Q1 FY26 Performance Overview

JTL Industries reported a total income of INR 549.6 crores and a sales volume of 1,08,406 metric tons for Q1 FY26. The company's EBITDA stood at INR 23.3 crores, translating to an EBITDA margin of 4.3%, while profit after tax was INR 16.55 crores with a PAT margin of 3%. Value-added products contributed 20% to the sales mix, and exports accounted for 6% of total sales at 6,404 metric tons.

Profitability Challenges and Raw Material Volatility

The company's EBITDA per ton for Q1 FY26 was approximately INR 2,149.3, significantly below the full-year guidance of INR 4,000. This underperformance was primarily attributed to a sharp increase in HR coil prices in April and May, followed by a correction in June, leading to inventory losses of about INR 1,000 per ton. Management noted that HR coils are not a commodity that can be hedged, making the company susceptible to price fluctuations.

Strategic Product Diversification and Initial Headwinds

JTL initiated plans for commissioning a new ASTM/API-grade pipe market, aiming for EBITDA margins of INR 7,000-8,000 per metric ton in these segments. Additionally, the company commissioned production of ultra-thin 0.04 mm brass foil, entering a higher-value niche. However, initial sales of DFT products required strategic pricing dips and discounts to gain market acceptance and distribution across India, impacting Q1 margins.

Capacity Expansion and Future Outlook

The company is undergoing a heavy capex cycle, with INR 50 crores spent in Q1 FY26, and a full-year FY26 capex guidance of INR 240-250 crores. This investment is directed towards new DFT capacity, GI coil lines, and API-grade ERW plants, which are expected to drive higher margins in the future. Management expressed confidence in achieving the FY26 sales volume target of 5 lakh tons and a 30% growth in FY27.

Export Market and Tariff Impact

JTL received CE certification for its DFT products, enabling entry into the European market. However, Trump tariffs are currently preventing entry into the US and Canadian markets, posing a challenge to the FY26 export target of 10%. Management expects more clarity on these markets within the next 6 months and is actively working on expanding into European, African, and Australian segments.

Increased Finance Costs

The company reported a doubling of interest costs on a quarter-on-quarter basis, with a run rate of INR 2.7-2.8 crores per quarter. This increase was primarily attributed to the clubbing of a subsidiary, JTL Engineering, and will continue to impact profitability going forward, unless interest rates change.

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