Maharashtra Seamless Limited (BOM:500265)
India flag India · Delayed Price · Currency is INR
641.30
-6.35 (-0.98%)
At close: May 12, 2026
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Q2 25/26

Nov 5, 2025

Operator

Ladies and gentlemen, good day and welcome to the Maharashtra Seamless Q2 FY 2026 earnings conference call hosted by ICICI Securities. As a reminder, all participant lines will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need any assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that the conference is being recorded. I now hand the conference over to Mr. Vikas Singh. Thank you. And over to you, sir.

Moderator

Thank you, operator. Good afternoon everyone. On behalf of ICICI Securities, I welcome you all on Q2 FY 2026 Maharashtra Seamless results con call. From the management side, we have with us Mr. Kaushal Bengani, Head of Investor Relations and Senior General Manager. Without taking any much time, I'll hand it over to Kaushal for his opening remarks. Over to you.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Thank you, Vikash. Good afternoon shareholders and thank you for joining our earnings call. During Q2 FY 2026 we have been able to dispatch 13,000 tonnes of seamless pipe which is in line with the quantity dispatched in the previous quarter. However, margins were impacted due to three key reasons. The first is the slowdown of expenditure in oil and gas sector which we pointed out earlier as well. The second is continuous Chinese dumping which has not abated. Thirdly, there was a notional markdown of inventory to comply with IND AS requirements. The encouraging sign in current pipes environment is that our order book has been replenished on a quarterly basis. However, significant margin revival appears difficult as of now. On the treasury front, there is a decline in other income on a quarterly basis. On a half yearly basis it has shot up to INR 235 crore.

235 crores in H1 FY 2026 vis a vis INR 155 crores in H1 FY 2025. I will briefly summarize key financial points on reviewing our Q2 FY 2026 performance versus Q1 FY26. Revenue declined by 5% to INR 1,234 crores. EBITDA declined by 27% to INR 123 crores. PAT declined by 44%, INR 230 crores, and EPS was at 10 rupees per share whilst EBITDA declined by 27%. The decline in PAT was higher in Q2 FY 2026 because of a sharp increase in other income in the previous quarter, Q1 FY 2026. Apart from financials, there are four key points which I would like to draw attention to. The first is the credit rating which remains at AA and it is the highest credit rating which the company has received in the past 11-12 years. The second point is the treasury which is at INR 3,115 crores as on 30th September. It is being judiciously managed with engagement and inputs at highest levels.

The third point is with reference to our order book which has improved by 20% from previous quarter and is now at INR 1,378 crore. On the CapEx front at Telangana, work is continuing. We have issued purchase orders of crores till now and payments of INR 52 crore have been made. We expect the line to commence by the end of this financial year. That is the entire brief. I would now request Vikas to kindly open for questions.

Operator

Vikas, please go ahead. Your line is unmuted. Please go ahead.

Moderator

Yeah. Can we start the Q& A session now?

Operator

Yes, sir, surely. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone phone. If you wish to remove yourself from the queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mohammad Farooq Umar from Pearl Capital. Please go ahead.

Mohammad Farooq Umar
Acting Director of Properties and Facilities Management, Pearl Capital

Good afternoon, sir, and thank you for the opportunity. Could you provide insight into the current challenges affecting the company's order book? Especially in light of Saini's seamless piping course. We would also appreciate details on Chinese current production capacity and domestic demand for seamless pipes. The main reason behind the dumping in Indian market and what kind of government support the company is receiving to mitigate these effects. Additionally, do you foresee any shift in demand that might improve the order situation? Thank you.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

I refer to the comments I made in the opening statement that there is a slowdown of expenditure in the oil and gas sector. That slowdown started a few quarters ago and is continuing. We do not see any indicators to conclusively say that the slowdown is well p ast us.

The good part that is being reflected from the communication that we put out is that we have been able to replenish the order book. However, margins are expected to stay muted on the Chinese dumping front. There is overcapacity in China and products are being dumped into India. We have started working on the enhancement of anti-dumping duty. The present anti-dumping duty is not so effective right now. That has also been communicated earlier and it is in place till October 2026. Any enhancement or continuity of anti-dumping duty will only be known after October 2026. However, the continuous Chinese dumping has affected margins of the entire domestic industry.

Mohammad Farooq Umar
Acting Director of Properties and Facilities Management, Pearl Capital

Okay. The company's current holds a significant cash reserve of INR 3,000 crore. Including investments. Approximately this is around INR 200- INR 250 per share. And has a relative modest capital expenditure plan of around INR 850 crore in the coming years. Could you share management's perspective on the rationale behind maintaining such a large cash balance and whether there are any plans to return capital to shareholders through dividends or buybacks?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

In the past few years we've quadrupled the dividend which we would pay out earlier. I think the level of dividend which we've given out in the past we will maintain. We've done that in financial year 2025 as well. The rationale for conserving cash has been explained many times on earlier conference calls. I would urge you to kindly refer to transcripts of those calls. Nothing has changed since then and we continue to retain cash.

Mohammad Farooq Umar
Acting Director of Properties and Facilities Management, Pearl Capital

Okay, sir. The last one, given Maharashtra pursuing a strong market leadership in seamless pipe, its substantial cash reserve, very low P/E ratio in the market around 9. It is interesting that the market still seems to lack confidence in the management. Could you please elaborate on the key reason behind this market skepticism and what steps management plans to take to enhance the investor confidence?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We are market leaders as you rightly pointed out. However, the entire industry is facing the effects of the slowdown of capital expenditure in the oil and gas sector and the continuous Chinese competition. Members of our peer group have also seen a decline in company valuations. It is not something which is exclusive to our organization. The headwinds are not exclusively being faced by Maharashtra Seamless but by the industry as a whole.

Mohammad Farooq Umar
Acting Director of Properties and Facilities Management, Pearl Capital

Thank you, sir. Thank you. All the rest.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Thank you.

Operator

Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Hi sir. Thank you for the opportunity. Sir, continuing with the previous participant's question, how much capacity is there in China and how much overcapacity is there currently?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

I am surprised that this question is being asked by you to me when you are an industry analyst. I will urge you to refer to the data sources that you have because you have access to a larger database than I do.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Actually what I wanted to understand is from the overcapacity how much imports are happening in India currently from China?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

That is a different question. Imports are as high as 20%-25% of the total domestic industry size, which is impacting the margins of the entire industry.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Okay. Thank you. Secondly, according to the Seamless Tubes Manufacturers Association of India the seamless capacity in India is currently 1.9 million ton. Whereas the demand is 1.3 million tonnes. So if we say 20%-25% of the industry size. So is it the right number if we take 20-25% of the 1.3 million ton demand that they have stated recently?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Those numbers are not correct because they refer to nameplate capacity, which is different from actual capacity. Actual production of seamless pipes in India is around 900,000 tons. So the 20%-25% is linked to the actual production of 900,000 tons annually.

Radha Agarwalla
Equity Research Analyst, B&K Securities

With regards to that, now with China dumping, has there been, what is the current market share of Maharashtra Seamless, and has there been any deterioration compared to the last three years?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There has been no deterioration compared to the last three years. Because we are still on track to manufacture 400,000 tonnes of seamless pipes in this financial year. We have done around 26,000 tonnes in the first two quarters. We will maintain that ton rate.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Sir. In two years back also it was 400,000.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

I'm sorry.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Two years back also we were doing 400,000.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Yes. There has been no decline.

Radha Agarwalla
Equity Research Analyst, B&K Securities

The market for new players has come, and the market is also increasing every year.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Market is not growing so much. Market grows at around 2%-3% annually. Not more than that. Because the customers to whom we sell are oil and gas players. If oil and gas exploration is not increasing in India then the market cannot grow.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Okay, sir. Exports used to be one of exports primarily to us. Used to be one of the key markets. From now with the change in Paris, how do you see the supply chains change and where do you see the settlement down in the next six months?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Exports have not been very good. They had started to revive towards the end of calendar year 2024. However, due to the anticipation of the tariff tantrum and the actual tariff tantrum, export order has not conclusively improved. That is the position as of now.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Sir, in your PPT it mentions that previously we used. We used to give that out of t he total order book. We have certain number of orders from drill sites. This time that is not mentioned. It also mentioned that.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

I would urge you to please read what is mentioned in the ppt. It is mentioned that orders for drill pipes are awaited. If there are no orders, then how do I write that there are no orders?

Radha Agarwalla
Equity Research Analyst, B&K Securities

Yes, sir. So how much orders are you expecting?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We are waiting. We do not have any visibility right now.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Is there any update on disposition of? General Explorer rig from the books?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There is no update on the proposal that you mentioned. The rig is in the final stage of refurbishment and will be deployed in about 10 days' time on its new ONGC contract.

Radha Agarwalla
Equity Research Analyst, B&K Securities

The last question is with this commissioning of this new line in Telangana and considering the product mix that we have in seamless side, is there a headroom to go up the value chain within the seamless segment and are we planning for any such thing in this Telangana line or in future?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We've gone up the value chain already. The only reason why we are doing this in Telangana is to ensure that the existing capacity is fully utilized. The line that we are putting up in Telangana is a finishing line. We already have manufacturing capacities of 200,000 tons in Telangana.

Radha Agarwalla
Equity Research Analyst, B&K Securities

Okay, thank you.

Operator

Thank you. The next question is from the line of Vinay Nadkarni from Hathaway Investments. Please go ahead.

Vinay Nadkarni
Managing Director, Hathway Investments

Yeah, thank you. So there's two questions. One is the revenue from operations basically has dropped to INR 1,158 million from INR 1,259 million y ear- on- year you basically pass on the cost of raw materials to the customer side. So the decrease in raw materials would have been passed on. What explains this? There is no much change in your employee cost or even other expenses have been curtailed. What explains this drop in EBITDA to such a level of 27% year on, I mean 46% year- on year.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There was a notional markdown of inventory because the raw material prices have fallen. When these orders are dispatched, effect of notional markdown will be reflected in actual profit. There is no cash loss. It is only an accounting investment.

Vinay Nadkarni
Managing Director, Hathway Investments

Is there any quantification of this notional loss of markdowns?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Our realizations are not declined. The product which has been dispatched, the quantity, that has also not declined. I think if you add cost of materials consumed with change of inventory of the previous quarter and of the current quarter, then the difference between these two figures would be largely attributed to the notional markdown.

Vinay Nadkarni
Managing Director, Hathway Investments

Okay, fine. That's one. Secondly, what is the reason why there is so much of variance in EBITDA pattern in ERW between quarter to quarter? It just keeps changing. Is there any particular reason?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Yes. The ERW segment is actually a composition of two sub segments. The oil sector ERW pipe and the water sector ERW pipe. What had happened was that the oil sector ERW pipes orders, which are API certified pipes, those orders were dispatched in one quarter instead of the gradual dispatches that we usually experience. Therefore, the ERW margin in the first quarter was significantly higher than what it was in the second quarter. In addition to the difference in product mix in both quarters, there was also the effect of the notional markdown of inventory.

Vinay Nadkarni
Managing Director, Hathway Investments

Okay, so oil ERW pipes have a higher EBITDA.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Yes, they are API certified pipes. We manufacture both types of pipes for the oil sector and for the water sector. Margins in the water sector are lower, much lower than the margins in the oil sector.

Vinay Nadkarni
Managing Director, Hathway Investments

Just one last question. When I look at your CapEx allocation, that statement remains the same for quarters to come. Is there any—see, in your commentary you give me the breakup of how much has actually been utilized. Is it possible for you to mention that in the presentation itself or is it not?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We can do that, but there is no problem on that point. The issue is that the market has changed since the time we put out the capital expenditure plan. We are looking at a situation where margins may decline by a few hundred rupees from now. We will have to do a reassessment. Therefore we do not put it out.

Vinay Nadkarni
Managing Director, Hathway Investments

This capital allocation might change going forward in the coming quarters. Some of them might be delayed or something.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

It has already been delayed. There may be other delay on other items of capital expenditure depending on the market conditions. Because the effect of Chinese dumping on the entire industry is apparent across financials of all peers.

Vinay Nadkarni
Managing Director, Hathway Investments

Yeah, I have seen that. Lastly, on this cold drawn pipes, which last quarter I think you had mentioned that it will commence production in this quarter. Any update on that?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There were two draw benches which we had put out. One of them has commenced production. The other one will commence production in about a week from now with very low tonnage. It will support us in an environment of declining margins.

Vinay Nadkarni
Managing Director, Hathway Investments

Thank you very much. Thanks a lot. All the best.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Thank you.

Operator

Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Sir, can you just come again for the last point? The earlier participant was mentioning about the cold drawn. I am unable to understand. Can you please repeat it once more?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There were two draw benches which we were planning to put. One has already started operation. The other one will start operation in about a week.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Okay. And these are with respect to the Nagothane facilities.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Maharashtra facility. There's a different manufacturing facility in Nagothane where we are doing this.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Okay. Sir, when you have mentioned earlier also the adverse impact of the Chinese dumping, you were explaining, you have explained to us that it is particularly to certain specific products since the anti-dumping is there, but some products were left at that time or they were not in the basket. How much do those products actually take the bite that are impacting? What are those specific products and specifications that have now been targeted especially by the Chinese? Is that product only the one that is in significant demand or is this anti-dumping duty? That was my question.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

The value addition products that we have developed after 2016, they are not covered by the original anti-dumping duty. Those products are namely cylinder pipes, sour service subsea seamless pipes, and drill pipes. These products were not manufactured in India in 2016 when the original anti-dumping duty was implemented. That effect is there on the entire industry. In addition to that, the product on which anti-dumping duty was implemented, the prohibitive effect of the anti-dumping duty is no longer there. Therefore, the entire market is now open for Chinese dumping. That is why we are seeing a decline in margin. Mainly.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

You mentioned about the formula to create to figure out what was the notional loss. Have you had the numbers handy with you? Just to get that understanding that we have, we were looking at EBITDA per ton in the vicinity of 12,000 to 15,000 if I'm not wrong. Does that hold good for the latter half of this financial year, even after eliminating the impact of the inventory l osses?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

For the second quarter? If there were no inventory losses, which are entirely notional, I would reiterate, then we would have made margins like we did in the first quarter of this financial year, or maybe slightly higher than that because our realization has not declined and the tonnage that we've dispatched, that has also not declined. Even other expenses have been curtailed. Definitely we would have done margins in the range of what was done in the first quarter of this financial year. The effect of this notional markdown will reverse when these products are dispatched in the next quarter. There is a possibility that in the third quarter margins will not decline so much if realizations hold.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

For the second half, since we have an order book which we will be executing over a period of four months from now, that will cover quarter, I think entire quarter three and some portion of, I think, quarter four also. You can give us some understanding that if this margin holds, this would be a bit, at least for what we have done for first quarter, that that is a reasonable achievement.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Oh, I cannot confirm. You want a confirmation? I cannot give you that confirmation, no. I will tell you why I cannot give you that information because the notional effect of inventory markdown or inventory valuation increase, that I cannot figure out right now what the prices will be on the 31st of December. That accounting effect has to be considered, otherwise I can tell you that margins on an absolute basis have not worsened as much as is being reflected in the results. Having said that, there is also the effect of slowdown of capital expenditure in oil and gas sector and Chinese companies.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Right? Right sir, on the premium trading business, although some work has been underway for developing and I think some families with the Japanese players, where are we sir in terms of we concluding that part and then introducing the product?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

They have issued a license certificate to our fully owned subsidiary General Premium Connections Private Limited, so work is on track.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

What portion of the target market will we be able to access once all the formalities are done with?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We are working on this right now and I don't want to disclose because this is also available to our competitors.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Not an issue sir. Lastly sir, on the tonnage part as you mentioned that our tonnage has remained in this. I'm talking only for the Finland just to be in particular that it was 103 for both the quarter and last year we had sales of 442,000. So taking into account the current order booking and also you have some color on the big pipeline also are we in a position to be closer to the 442 number for the year as a whole in terms of dispatches I.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Think you should take the run rate that we've done in the first two quarters because it becomes increasingly difficult to sell products in an environment where the customer is not required to buy as much pipes as we want to sell because of a slowdown of expenditure in the oil and gas sector.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Lastly, sir, on this CCI part of the story, although all the updates have been, whatever necessary updates were provided to the stock exchanges about CCI looking for some information for previous financial year, any update on the same and for which financial year exactly the inquiry has been initiated?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

There is no update in the sense that they came to our offices and they collected whatever data they wanted and they have asked us for more data which we have provided to them. That is all that I can tell you right now, but there is no effect of that on our regular business operations.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

My last point would be on the other income component part. As per the accounting standard part, we need to keep the entire treasury book mark to market.

S s ince your presentation is very elaborate, if we could also provide us with how much actual profit has been booked and how much is the notional part, where should investors get that number? Secondly, sir, we have also seen in some of the corporates whether the accounting standard permits that the line item is routed through the other comprehensive income also. If that could be defect from the audit part, then this number affecting the profitability to a greater extent would be eliminated. That was my understanding and suggestion.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

On the OCI part. We have checked with our auditors who have taken a view that if the instruments in which you have invested are not on a long-term basis, then you cannot classify it t hrough OCI.

You will have to route it through other income. Because a significant portion of the treasury is linked to the equity market, then we have decided not to do that. Because we may or may not want to capitalize on market fluctuation. Regarding the point that you made in relation to realized profit and unrealized profit, that is not required to be disclosed. However, if you still want it, then it will not be appropriate to provide you only the realized and unrealized profit on the treasury part. Because there are also other components like rent and interest and provisions which are written back and other receipts. Unless I give you all of that, you will not be able to make a thorough assessment.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Okay. Right. That's all for my side, sir. I will join the queue if I have any problem. Thank you once again.

Operator

Thank you. The next question is from the line of [Manavu Mehta from Bridhaan]. Please go ahead.

Hi sir. Good evening. With regards to cash with the company, I understand company has been holding a significant amount of cash, around INR 3,000 crore. And earlier as well you explained you plan to hold the cash for some acquisitions. I just want to understand the perspective of the management, where we have been holding cash for a while now for some future acquisition which might play out or which may not. Instead of that, why is the company not investing in some renewable projects? Whereas it can generate some recurring revenues in solar or wind, where we already have a vertical, a small vertical. Why don't we invest some good chunk of amount in that vertical?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

We already have 59.5 MW of renewable energy capacity. Out of which one wind and two solar plants are in Maharashtra. Two solar plants are in Rajasthan.

Yes, I do understand. We can scale it up as well, right? Where we can generate recurring revenues. I mean, we are earning a good chunk of profits from that as well, around INR 20-INR 27 crore for the year.

We earn EBITDA of approximately INR 60 crore from that every year.

My question was why is the management not focusing over there?

We looked at the economics and unless there is some form of incentive available at the time of putting the project, it is not giving us meaningful returns. To that effect, we've petitioned the government in Telangana that we want to scale up our operations in Telangana and therefore we are desirous of putting a solar power plant, but open access permission has not yet been granted over there. That is the only renewable energy project which we are looking at right now.

Okay. Y eah. On the CapEx, and I'm assuming since you mentioned we are facing some headwinds from Chinese dumping, are we going to reduce it going ahead?

Let us finish what we've started, let that project end, and then we'll update you.

Okay. All right.

Operator

Thank you. Next question is from the line of [Vanena Kearney] from Hathaway Investments. Please go ahead.

Yeah. Thank you. Just to follow up on the inventory notional markdown, you have been on record saying that for every order that you get you do a back to back arrangement for the raw material. So it gets blocked and should not therefore, what was it? What was the need for this notional markdown? Any. And is this a one off thing or is it audit requirement or was it an old.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

It is an accounting requirement. I'll tell you what I mean. Suppose I sell pipes for INR 500 and when I get an order for INR 500 I will buy raw material and I have bought the raw material for INR 300 at that point in time then the order remains unexecuted because I still have some time for delivery of that order. In the interim period if there is a quarterly closure and the price of raw material has fallen from INR 300- INR 250, then the inventory that I hold for which I have paid INR 300 I will have to mark it down to INR 250. Therefore the notional loss of INR 50 will be booked on the quarter end in the next quarter.

When the order of INR 500 which I have taken for which inventory has been purchased at INR 300 and was subsequently marked down to INR 250, that order is dispatched, then the profit I will earn on that order assuming no conversion cost would be INR 250. So a loss of INR 50 in the first quarter which is entirely notional and a profit of INR 250 in the next quarter.

The INR 50 profit in the next quarter is also notional. It is actually INR 200 net net. Yeah, correct.

On a per order basis I have not lost any money. Due to the accounting adjustment, the effect is reflected in the financial.

It says t hat at the end of any reporting period you have to value stock. Stock is valued at lower of cost or net realizable value at the end of the quarter. With the example that I've just taken, the net realizable value of the stock of INR 300 was INR 250. Hence the markdown.

Yeah. This will happen the reverse way and the raw material prices start going up. Yeah, I understand that. Okay. Just one more broader question. As I can see, I mean, the company is honestly very well managed. Therefore, it is heartening to see all the parameters checked out. Since you are overdependent on two major customers, which is oil and gas, and those two, ONGC and Oil India, and one single product, which is seamless pipes, you get, you know, Roger, because of the momentum. Is there any plan to address this issue? Maybe diversify, maybe do something? Is there any thought process on that? Do not take me wrong, you may know it is your call, ultimately.

Sir, we do not want to diversify. We have been market leaders for the past 35 years. We want to retain that position. If you look at the history of the seamless pipe industry in India, all of our peers, without exception, have either been bankrupted or they have approached bankruptcy courts. We are the only company which has not done any of this and we have been cash rich at all times. It is not something which has happened through luck or sheer coincidence but due to certain principles of management which are followed, which we want to stick to. Now, these principles of management may not align with the interest of the equity shareholder on a short-term basis, but in the longer term the benefits are available for everyone.

Absolutely, I take that point. I think this was also discussed last time and you had mentioned the same thing. The only threat from Chinese is something. I do not know how long it will last, but it does drain out your, all the efforts that you are making in running this more, you know, so well. That is all from me. Thank you very much.

Thank you, sir.

Operator

Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Krishna Kumar from Retail Investor. Please go ahead.

Good evening, sir. My question is related to the margins and what would be the sustainable margin? I presume that since you have taken losses that should be coming back in the coming quarters. What should be the sustainable margin? We should be looking at this. Kind of depressed scenarios?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

In the past we used to make margins of INR 7,000-INR 8,000 per ton. Then margin shot up to INR 30,000 per ton. I think, sir, the larger band is between INR 7,000-INR 30,000 and a more reasonable band is INR 8,000-INR 15,000. I do not believe on a medium term basis margins can be sustained at elevated levels because something or the other happens in the crude oil industry which affects the margins of all players.

Okay, so what will be the percentage? Same EBITDA margin would be like 15% or something.

It cannot be measured. I would urge you to go through the transcripts of the earlier calls. It is very difficult to forecast margins because we sit on an order book of three to three and a half months. Therefore for me to forecast margins for the quarter after the three-month quarter is not possible. Other five companies which you may encounter have order books of 7, 8, 9 months or of a longer duration and therefore it is easier for them to forecast. For us that is not the case.

Okay, thank you. Thank you.

Operator

Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Yeah, yeah, thank you. Once again when we, as you mentioned about the dumping from the Chinese counterparts. Specifically, if you look at oil exploration in the country, they are mainly carried out, a major part is from ONGC and Oil India only.

So w ith respect to these specific products, they are then ONGC and Oil India are buying from these Chinese players itself with reference to the product of subsea pipes and the drill pipes, or there is no demand, that is money. How is that math working? I think some embargo is there for them only to purchase from the Indian players only.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

This happens through the dealer route. So Chinese manufacturer sell to a dealer. The dealer then participates in the tender, sells to the eventual customer.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Okay. Okay. Then they are able to bifurcate that part of the story also? I think some INR 250 crore something worth of order need to be only routed through the Indian pair, so that goes with the dealer part. Okay.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

On the project award I put out a new point on Slide 17 of the presentation. It says that project awards have declined 27% year- on- year and 13% in quarter two FY 2026. It further says that although tender announcements have reached record highs, actual awarding remains delayed. We are also facing that situation. Our peer group is also facing that situation.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

I was coming to this point only, third. How should we look at the bid pipeline? The time it is taking to mature and the orders being finally AOP being hand over is getting elongated. Do we rely on the bid pipeline in terms of making the assessment of how the order tension will be going since it's now become an elongated process?

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

In order to run a mill, if direct tenders are not being received, then we have to sell more to the dealer segment where margins are lower because the furnace in which billets are heated, that furnace is operating at all times. We have to ensure that the mill keeps running.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Okay, so we are w e are running at optimum level. Yes sir.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

The dispatches have not fallen. However, margins have been impacted.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Correct.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

In a situation where order book visibility is reduced, we are unable to bid aggressively because we have the constraint to operate our mill, and hence we want to capture whatever order is available.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

Correct? Okay, sir, t hat answers the part of the demand issue. We have to see how the second half plays out. The budgeting aspect for the state PSU in terms of the final tendering sources will only give us an understanding how o ur order book shapes are going ahead. Correct.

Thank you for all the replies and for the in the presentation. Sir, when you mentioned about the liquid investment part. If we could also quantify to us since in the annual report we have seen that a large portion of it is in the liquid fund itself. If we can give the breakup of mutual fund or give a note on pertaining to what is subject to the market wagering means the stock price is moving up and down. And how much is pertaining towards the liquid funds, where there is negligible chances of any downward mark to market. That would suffice a lot. I think 2,584 is what the number is for the mutual fund. For the granular details in terms of liquid funds and the fund exposed to equity link that would be very.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Okay.

Saket Kapoor
Equity Research Analyst, Kapoor & Co

That's the only suggestion, sir. All the best to the team, sir. We hope that we hear much more on the capital allocation policy. The part that these are.

Operator

Thank you. The next question is from the line of Vikas Singh from ICICI Securities. Please go ahead.

Moderator

Hi sir, just a little bit clarification. When you said that your project had already been delayed, does it also account the new 100 KT facility because of want of order book? Secondly, usually number onwards is the time when ONGC and other oil and gas company starts, you know, giving us the tenders for bidding. These two things, if you could clarify, it would be helpful.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

On the Telangana project, the reason why I said that it was delayed was because it was supposed to be concluded by December 2025. However, in the previous call or the call before that I had guided that it would be concluded by March 2026. That is why I said that it has been delayed, not because of want of orders but because of some additional time taken by one of our vendors in delivering essential machinery. On the other point which was ordering by PSUs, we are hopeful that ordering inflow will happen in the second quarter. Till that happens we do not want to give a guidance that it will happen. Generally, in the past we have seen that in any financial year the second half of the financial year is better than the first half of that financial year irrespective of the market condition.

Moderator

Noted. That's all for myself.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I now would like to hand over the conference to Mr. Vikash Singh. Thank you.

Moderator

On behalf of. Yeah. Thank you, operator. On behalf of ICICI Securities, I would like to thank the management for giving us the opportunity to host them. Now I hand it over to Kaushal f or his closing remark. Over to you, sir.

Kaushal Bengani
Head of Investor Relations and and Senior General Manager, Maharashtra Seamless

Thank you shareholders for participating on a holiday. Thank you to Vikash and Madam Moderator for working on a holiday. Thank you

Operator

Thank you on behalf of Maharashtra Seamless and ICICI Securities Limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.

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