Scoda Tubes Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Scoda Tubes Limited reported a steady Q2 FY26 with consolidated revenue growing 4% and net earnings up 34% YoY, driven by operational efficiency and optimal utilization. The company is actively expanding its seamless capacity to 20,000 MTPA by December 2025 and targeting commercial production for welded tubes in Q1 FY27. A strategic acquisition in Poland aims to strengthen its international footprint, while domestic demand remains robust despite some slowdown in oil & gas capex.

Highlights

  • Consolidated revenue grew 5% year-on-year to INR242.7 crores in H1 FY26 and 4% in Q2 FY26.

  • Net earnings grew 49% in H1 FY26 and 34% in Q2 FY26, reaching INR21.1 crores and INR14 crores respectively.

  • Seamless capacity expanded from 10,000 MTPA to 17,000 MTPA, with a target of 20,000 MTPA by December 2025.

  • Secured $1 million in new orders from a US client, reaffirming strong export presence.

  • Acquisition of Arvind sp. zo.o. in Poland strategically expands international footprint in Eastern Europe.

Concerns

  • EBITDA margins slightly declined year-on-year in H1 FY26 (15.1% vs 16.2%) and Q2 FY26 (15.4% vs 16.4%).

  • Global capex scenario for oil and gas is noted as 'a little bit slow'.

  • BHEL and NTPC tenders are experiencing delays of two to three months.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹145.3 Cr
    YoY +4%
  • EBITDA
    ₹22.3 Cr
  • EBITDA Margin
    15.4%
  • PAT
    ₹14 Cr
    YoY +34%
  • PAT Margin
    9.6%

H1 FY26

  • Revenue
    ₹242.7 Cr
    YoY +5%
  • EBITDA
    ₹36.5 Cr
  • EBITDA Margin
    15.1%
  • PAT
    ₹21.1 Cr
    YoY +39%
  • PAT Margin
    8.7%

What they filed

Q1 FY27: revenue up 27.6%, net profit down 25.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue139 130 124 97 145 +4%152 +17%124 −0%124 +28%
EBITDA23 23 17 14 22 −2%23 −1%17 −4%16 +13%
Net profit10 10 7 7 14 +34%11 +18%6 −7%5 −26%
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

  • Export Revenue Share
    29% H1 FY2627% Q2 FY26
  • Revenue by Geography (H1 FY26)
    71% India24% Europe5% America

Order book

high confidence

Total value

₹194 Cr

as of 2025-09-30 quantified

Composition

Mix 2 geographies
  • Domestic 46.4%
  • Exports 53.6%

Share of order book by geography

Management highlighted a strong current order book with a significant portion from exports, indicating sustained demand.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹100 Cr
    • Seamless capacity expansion
    • Welded capacity expansion
    In H1 FY '26, the company had incurred INR45.9 crores in capex. ... I believe we had estimated at INR100 crores of capex to be incurred for these expansions. Are we seeing any increase or decrease or any changes in this amount? No, I don't think we are seeing any changes. ... It would largely remain what we have mentioned.
  • M&A Arvind sp. zo.o. Acquisition · Closed

    Expand international footprint, strengthen presence in Europe, open opportunities in high growth sectors (oil & gas, wheat exchanges, refineries) in Eastern European market.

    Enables access to new customer segments and leverages Arvind's distribution network and local expertise.

    I would like to begin by sharing the rationale behind the acquisition of Arvind sp. zo.o., a trading firm based out of Poland, Eastern Europe, into dealing of coated and uncoated tubes, pipes, casings, hollows and related products. This marks a strategic step in expanding Scoda Tubes Limited international footprint, strengthening our presence in Europe and opening opportunities in high growth sectors such as oil and gas, wheat exchanges and refineries, especially for the Eastern European market.
  • Liquidity Cash ₹110 Cr INR110 crores from IPO proceeds remain in bank balances, with INR50 crores utilized for working capital.
    out of the IPO proceeds, INR27 crores has been deployed towards capex, INR110 crores remains in bank balances and INR50 crores has been utilized for working capital.

Guidance & targets

Capacity

  • Seamless Tubes Capacity Capacity · by end of December · High confidence 20,000 MTPA

    From 17,000 MTPA today

    So, currently, our installed capacity for seamless is 17,000. We are still waiting for two more cold pilger mills. I think it should be delivered in December as per the current schedule. So, after installation of those two machines, we will have the installed capacity of 20,000 metric tons per annum by the end of December.

    — Samarth Patel

  • Welded Tubes and Pipes Capacity Capacity · Q1 FY27 · High confidence 33,128 MTPA

    From 11,088 MTPA today

    our finished goods capacity is set to increase from 11,088 metric tons per annum to 33,128 metric tons per annum, representing a major scale-up in production capabilities. ... commercial production targeted for Q1 FY '27.

    — Samarth Patel

Utilization

  • Blended Utilization Utilization · FY26 · High confidence 60-65%
    We aim to achieve blended utilization 60% to 65% by FY '26

    — Samarth Patel

  • Blended Utilization Utilization · FY27 · High confidence 80%
    and increase it to around 80% by FY '27.

    — Samarth Patel

  • Welded Capacity Utilization Utilization · FY27 · High confidence 30%
    In FY '27, we are seeing around 30% of the utilization out of our total welded installed capacity.

    — Samarth Patel

  • Full Utilization (Welded & Seamless) Utilization · FY28 · High confidence Full utilization
    Yes. By FY '28, we are expecting full utilization of both welded as well as seamless products.

    — Samarth Patel

Export Revenue

  • Share of Total Revenue from Exports Export Revenue · FY28 · High confidence 40-45%
    that I think we would be largely at 40%, between 40 to 45% of the, I mean, for exports of the total revenue, then we will reach at the optimum utilization level of both welded and seamless. So, largely, we will have in FY 2028.

    — Samarth Patel

Revenue

  • Revenue Growth Revenue · FY26 (due to new capacity) · High confidence 20%
    So basically on the revenue outlook, we target to grow by 20% in terms of revenues as the new capacity has come on stream effective November 2025?

    — Samarth Patel

Margin

  • Blended Margin Margin · Ongoing · High confidence 15-16%
    So margins are expected to remain in the 15% to 16% range, driven by higher contribution from welded products and new product launches in this segment.

    — Ravi Patel

Raw Material

  • Raw Material Price Stability Raw Material · next 12 months · High confidence Stable
    So for the next 12 months, we do not significant fluctuations and expect that the raw material prices remain stable at the current levels.

    — Ravi Patel

Approvals

  • Marine Export Approval Approvals · in two more quarters · Medium confidence Approval
    So, probably, I think, for the marine approval, we are still expecting two more quarters to finish up the process and get approved.

    — Samarth Patel

What to watch in Q3 FY26

Seamless capacity expansion completion

by end of December 2025
Current 17,000 MTPA
Target 20,000 MTPA

Why it matters

Completion of seamless capacity expansion is crucial for revenue growth and achieving utilization targets.

So, currently, our installed capacity for seamless is 17,000. We are still waiting for two more cold pilger mills. I think it should be delivered in December as per the current schedule. So, after installation of those two machines, we will have the installed capacity of 20,000 metric tons per annum by the end of December.

Risks & concerns

  • Global capex slowdown in oil and gas sector

    medium

    Management noted that the capex for oil and gas is 'a little bit slow', though compensated by growth in power and renewable sectors.

    Management acknowledged

  • Delays in BHEL and NTPC tenders

    medium

    BHEL and NTPC tenders are delayed by 2-3 months, impacting the timing of potential order inflows from these PSU clients.

    Management acknowledged

  • EBITDA margin compression

    low

    EBITDA margins saw a slight year-on-year decline in both H1 FY26 (15.1% vs 16.2%) and Q2 FY26 (15.4% vs 16.4%).

    Management acknowledged

Q&A highlights

8 direct
Seamless capacity ramp-up and utilization Direct
So, currently, our installed capacity for seamless is 17,000. We are still waiting for two more cold pilger mills. I think it should be delivered in December as per the current schedule. So, after installation of those two machines, we will have the installed capacity of 20,000 metric tons per annum by the end of December.

Clarifies the current and near-term seamless capacity and the timeline for reaching the full 20,000 MTPA.

Asked by Nayan Bhodia

Domestic market scenario and Chinese dumping Direct
So, basically, there is an anti-dumping duty on Chinese goods. So, I think in India, there is very less import happening. If it is happening, it's not from China, it's from some other country.

Addresses concerns about Chinese competition and confirms anti-dumping measures are effective in India.

Asked by Nayan Bhodia

End sectors driving SS pipe demand and industry growth Direct
what we are seeing is, I think, 7% to 8% industry growth every year, I think, for stainless steel pipes and tubes, which includes obviously both seamless as well as welded. So, that is the amount of growth that we are seeing within India as well as on the global basis we are seeing around 3% to 4% of industry growth in terms of demand for stainless steel pipes and tubes.

Provides specific industry growth rates for stainless steel pipes and tubes, differentiating between India and global markets.

Asked by Lakshminarayanan

Capacity exceeding demand in India Direct
I think there is no such situation where we can say that the in-scale capacity in India is more than the demand. I think there is still a shortfall where we feel. ... I am talking only about the Indian market. Where I don't see that, including all of the small scattered players and the big players, we were able to fulfill the 3,80,000 metric tons of demand. We are still seeing, I think, around 20,000 to 25,000 metric tons of production shortage in terms of demand.

Reassures that Indian market demand for SS pipes and tubes still outstrips supply, indicating room for growth.

Asked by Lakshminarayanan

BHEL and NTPC tender delays Direct
Yes, but they are delaying it by, I think, two to three months. Recently, we got an update from BHEL regarding this. I think it was last week that they are delaying the procurement process.

Confirms delays in significant government tenders, which could impact future order inflows from these clients.

Asked by Nayan Bhodia

Margin sustainability and product mix Direct
So margins are expected to remain in the 15% to 16% range, driven by higher contribution from welded products and new product launches in this segment. So typically, seamless has a margin between 16% to 18%, whereas welded has between 12% to 13%. So we expect the blended will remain 15% to 16%.

Provides clarity on margin expectations and the contribution of different product segments to the blended margin.

Asked by Sahil Sanghvi

Working capital and inventory buildup Direct
So the inventory has seen a sharp rise in H1 FY '26 as we have stocked up seeing the demand in H2 FY '26, so we expect the inventory levels to go down from Q3 FY '26.

Explains the reason for increased inventory and provides a timeline for its reduction, addressing working capital concerns.

Asked by Sahil Sanghvi

Arvind sp.z o.o. acquisition rationale and benefits Direct
So the acquisition of Arvind sp.z o.o. is a strategic move to strengthen our international footprint through a foreign holding structure, especially for the Eastern European market. ... This acquisition will enable Scoda Tubes to access new customer segments in fast-growing sectors such as oil and gas, heat exchangers, refineries, while leveraging Arvind's distribution network and local expertise for more than 20 years being in Poland.

Details the strategic benefits of the acquisition, including market access, new customer segments, and leveraging local expertise.

Asked by Ranjit Kapoor

3 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Scoda Tubes Limited reported a steady performance in Q2 FY26, with consolidated revenue broadly flat at INR145.3 crores, contributing to a 5% YoY growth in H1 FY26 to INR242.7 crores. Net earnings saw significant growth, increasing by 34% YoY to INR14 crores in Q2 FY26 and 49% YoY to INR21.1 crores in H1 FY26. PAT margins improved by 212 basis points to 9.6% in Q2 FY26 and 211 basis points to 8.7% in H1 FY26, despite a slight decline in EBITDA margins to 15.4% in Q2 FY26 and 15.1% in H1 FY26.

Capacity Expansion and Utilization Targets

The company is aggressively expanding its manufacturing capabilities. Seamless capacity has already increased from 10,000 MTPA to 17,000 MTPA, with a further target of 20,000 MTPA by December 2025 following the delivery of two more pilger machines. For welded tubes and pipes, commercial production is targeted for Q1 FY27, aiming to increase capacity from 11,088 MTPA to 33,128 MTPA. Management expects blended utilization to reach 60-65% by FY26 and 80% by FY27, with full utilization for both segments by FY28.

Strategic International Expansion via Acquisition

Scoda Tubes has made a strategic move to expand its international footprint through the acquisition of Arvind sp. zo.o., a trading firm based in Poland. This acquisition is aimed at strengthening the company's presence in Europe and opening opportunities in high-growth sectors such as oil and gas, wheat exchanges, and refineries in the Eastern European market. The company believes this will unlock significant long-term value by integrating its manufacturing strength with Arvind's established distribution network and local expertise.

Order Book and Market Demand

The current order book stands at INR194 crores, with a healthy split of INR90 crores from domestic orders and INR104 crores from exports. Management noted that the Indian market for stainless steel pipes and tubes is experiencing 7-8% annual growth, with a demand of approximately 3,80,000 metric tons and a current production shortfall of 20,000-25,000 metric tons. This indicates robust underlying demand, despite a slight slowdown in global oil and gas capex, which is offset by strong opportunities in the power and renewable sectors.

Capital Allocation and Working Capital Management

In H1 FY26, the company incurred INR45.9 crores in capex, with INR27 crores from IPO proceeds deployed towards capacity expansion. The total estimated capex for FY26 remains at INR100 crores. From IPO proceeds, INR110 crores remain in bank balances, and INR50 crores have been utilized for working capital. Management addressed the sharp rise in inventory in H1 FY26, stating it was due to stocking up for anticipated H2 FY26 demand, and expects inventory levels to normalize from Q3 FY26.

Margin Outlook and Raw Material Stability

The company expects blended margins to remain in the 15-16% range, driven by a higher contribution from welded products and new product launches. Seamless products typically yield 16-18% margins, while welded products contribute 12-13%. Raw material prices, which declined by 5-10% over the past 24 months, are expected to remain stable at current levels for the next 12 months, with no significant fluctuations anticipated.

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