Ladies and gentlemen, good day and welcome to the Jindal Saw Q1 FY 2027 earnings conference call hosted by ICICI Securities Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Singh. Thank you. Over to you, sir.
Thank you, Anushka. Good evening, everyone. Welcome to Jindal Saw Q1 FY 2027 results conference call. I would like to thank the management to give us the opportunity to host them. From the management side, we have with us Mr. Narendra Mantri, Chief Operating and Financial Officer, Mr. Vinay Gupta, President and Head of Treasury, and Mr. Rajeev Goyal, Senior Vice President Corporate Finance. Without taking any more time, I will hand over to the management for their opening remark. Over to you, sir.
Thanks, Vikash. Good afternoon, ladies and gentlemen. I am Vinay Gupta, representing Jindal Saw. On behalf of the management team, including Mr. Narendra Mantri and Mr. Rajeev Goyal, it is my pleasure to welcome you to our conference call for the first quarter of financial year 2027, ending June 30, 2026. We also appreciate the ICICI direct team for hosting this session and coordinating the discussion. The board approved financial results for quarter one of financial year 2027 on July 14th, 2026. These were filed with the stock exchanges, and we assume you have reviewed them. Let us now present the operational and financial performance of the company and its subsidiaries. In this presentation, we will also cover the financial performance for quarter one, business scenario, and updates on the projects in UAE and Saudi, and few other things.
In terms of our financial performance on a standalone basis, the company registered a total income of INR 3,756 crore in quarter one of financial year 2027, against INR 3,327 crore in Q1 of FY 2026, representing an increase of approximately 13%. EBITDA for quarter one of FY 2027 stood at INR 341 crore against INR 560 crore in quarter one of FY 2026, representing a decline of approximately 40%. PBT for Q1 of FY 2027 is reported at INR 145 crore against INR 307 crore in quarter one of FY 2026, representing a decline of approximately 53%. PAT for Q1 of FY 2027 is reported at INR 110 crore against INR 364 crore in quarter one of FY 2026, representing a decline of approximately 70%.
On a standalone basis, total income stood at INR 4,476 crore for the quarter one on consolidated as compared to INR 4,103 crore in quarter one of FY 2026, representing an increase of approximately 9%. EBITDA for quarter one of FY 2027 stood at INR 421 crore against INR 688 crore for quarter one in FY 2026, representing a decline of approximately 39%.
PBT for quarter one in FY 2027 is reported at INR 128 crore as against INR 364 crore for quarter one of FY 2026, representing a decline of approximately 60%. PAT for quarter one of FY 2027 is reported at INR 91 crore against INR 415 crore in quarter one of FY 2026, representing a decline of approximately 78%. Now, in terms of our indebtedness, as on 30th June 2026, the standalone net debt narrowed to INR 2,345 crore versus INR 2,453 crore as at 31st March 2026.
This includes INR 526 crore of long-term debt. This is primarily INR 500 crore out of this is from LIC and CD, which is repayable in three equal installments in FY 2028, FY 2029 and FY 2030. The net institution debt at consolidated basis has reduced to INR 2,472 crore as compared to INR 2,528 crore as at 31st March 2026. The long-term debt out of this was INR 536 crore. In June 2026, CARE Ratings has affirmed CARE A1+ rating for short-term debt facilities, including commercial paper and CARE AA, outlook stable for long-term facilities. They are basically reaffirmed, so there is no change in the rating. Now let us discuss the progress of our business.
In terms of operations, for the first quarter ending 30th June 2026, performance remained muted, broadly similar to the weak trend seen in quarter four of the previous year, with exports, water infrastructure demand, and seamless pipe certifications all acting as constraints on our business. While we hold a strong order book, including a six-lakh metric ton work order from Saudi Arabia, all outward shipments have been suspended since March 2026. Geopolitical situation between U.S. and Iran brought MENA region trade to a standstill this quarter by blocking the Strait of Hormuz. A short-lived diplomatic breakthrough in mid-June offered some hope for recovery. However, the subsequent collapse of these peace talks has limited our short-term visibility. Company had started executing few orders on export side to non-MENA region. Due to heavy traffic at Indian port, few of the shipments have been deferred to Q2 of financial year 2027.
In the domestic market, the water segment remained weak as Jal Jeevan Mission linked project execution continued to be affected by delayed release of central funds and title scrutiny of the state projects. Multiple states reported pending dues and slowed project timelines, reinforcing a demand slowdown for pipe supply tied to government rural water schemes. However, the company saw a recovery in Q1 of this year driven by higher Ductile Iron Pipe sales volume for executing various pipe project orders with us. Now, in terms of company related matters which had affected the business specifically in Q1, you know the company's seamless pipe business was additionally affected because of its API license remain suspended from January 2026 until mid-June 2026. This limited our ability to participate in certified oil and gas orders during the quarter.
API reinstatement enables the company to resume API certified seamless pipe supplies and participate in tender that require the API Monogram. In terms of couple of new opportunities, as was pointed out in the previous call, heightened geopolitical risk across the MENA region is driving a decisive shift towards more secure overland energy infrastructure, creating a strong pipeline of opportunities in expansion, rehabilitation, and replacement projects, especially those aimed at avoiding vulnerable maritime choke points. This shift speeds up investments in routes that bypass high-risk areas, creating major opportunities for pipe manufacturers and builders in oil, gas, and water infrastructure. Currently, India is also prioritizing energy security, with new pipeline tenders expected in coming quarters. That follows a landmark March 26 government mandate designed to fast-track nationwide pipe gas rollout by eliminating bureaucratic delays, access fees, and local bottlenecks through time-bound central approvals.
We would now like to update you about the company's ventures in MENA region. As you know, in the geopolitical hurdles which exist in MENA region, the shift dynamics bring new chances for companies like us, and that is why we are actively pursuing these opportunities by expanding and manufacturing locally. As you know, we had announced seamless project in Abu Dhabi and Saw Pipe project in Saudi Arabia. First, let's talk about seamless pipe plant in Abu Dhabi. As we updated on various occasions, the company had initiated the process to set up a state-of-the-art three lakh ton seamless pipe manufacturing facility in Abu Dhabi with an estimated project cost of approximately $300 million. The plant will primarily cater to the oil and gas sector in MENA region and more specifically in UAE.
This is aligned with the company's strategy to strengthen its supply base closer to the key global energy markets, including UAE. The project execution has commenced by securing a developed leasehold land with existing civil infrastructure. We have effectively shortened our construction timeline. Procurement for critical long lead equipment is already underway, whereby we have started opening LCs and placed cash advances. With financial closure expected in next few months, the project remains firmly on track, which is likely to commence the commercial operation in financial year 2029. Jindal Saw Abu Dhabi strategy now rests on a dual pipe platform, seamless pipes plus a ductile iron pipe facility, both aimed at anchoring a full-fledged regional hub for energy and water infrastructure. Some brief about our Saw Pipe plants in Saudi Arabia.
We updated in the past that we have established a strategic joint venture in Saudi Arabia, holding a 51% equity stake alongside Buhur for Investment Company, which will hold 49%. The JV is dedicated to establishing Advanced LSAW and HSAW pipe mills of 300,000 metric ton per annum each to serve regional water infrastructure and energy demands. Having already secured the project land and established LC for selective equipment, we are fully committed to fast-tracking for construction of these manufacturing facilities. Furthermore, we expect to finalize interim financial closure within next few months. Beyond meeting Saudi's domestic demand, these facilities are strategically positioned to capture lucrative post-war commercial opportunities in the region, aligning with the broader MENA shift towards alternative energy supply routes that circumvent the Strait of Hormuz. Overall, Jindal Saw is creating a Middle East production corridor.
Abu Dhabi as a controlled high-end seamless hub and Saudi as a JV-driven local content-rich capacity in LSAW, HSAW and also Ductile Iron to lock in infrastructure demand. Now let us look at our subsidiary in UAE and other parts. In UAE, because of the regional conflicts in MENA region, the operations remain disrupted at the Ductile Iron Pipe facility in Abu Dhabi. The UAE remains a highly impacted area within the region. Due to these circumstances, and with employee safety as our top priority, operations have been reduced to meet essential demand. The sales from Abu Dhabi plants are restricted to customers in the country which are within the trucking range only. In this backdrop, in Q1 of FY 2027, Abu Dhabi company delivered approximately 34,000 metric tons of Ductile Pipe as compared to 48,000 in the previous quarter, which is quarter four of last year.
As of June 30, 2026, the subsidiary hold an order book of approximately $188 million. In terms of volume, it is 137,000 tons, which ensures operational visibility for next three to four quarters. This backlog is independent of the order book of Jindal SAW Limited. Jindal Hunting, which is a joint venture between Hunting Energy Services Pte. Ltd. and Jindal SAW. Jindal SAW holds 51% in this company. It generated a revenue of INR 5 crore, and it is first time it incurred a loss of INR 5.3 crore in the Q1. This poor performance is a result of the suspension of the API license of Jindal SAW Limited. Since the EGA license has been reinstated, we expected the performance to improve gradually in coming quarters. Last, about the court case of Jindal ITF Limited versus NTPC.
With respect to this conflict, the arguments from both sides are closed at the double bench of Delhi High Court, and the order has been reserved. We expect the order to be announced in maximum two months time. The courts are on vacation, which are likely to be over in some time, and after that, the order can be announced. We thought, let me give you a brief summary this time and let's have more interaction. Now I leave the floor open for interactive discussion. My colleagues, Mr. Narendra Mantri and Mr. Rajeev Goyal are with me to address any of the questions from the meeting. Thank you very much.
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question 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. We take the first question from the line of Deepak Poddar from Sapphire Capital. Please proceed.
Am I audible, sir?
You're audible.
Thank you very much, sir, for this opportunity. Sir, just wanted to understand now on the visibility going forward. You mentioned that in India, the JJM continues to delay. The DI pipe offtake is also on the lower side in the Middle East because of the current situation. Even the peace talk failing has provided you limited visibility. Just wanted to dwell more. How should one look at the execution this year? Or by when we expect some kind of traction in your volumes. Something on those lines, your comments will be very helpful, sir.
Rajeev is taking the question. Rajeev, can you please help?
Yeah. As Vinay mentioned in his opening remarks that performance will be first quarter Q because of multiple reasons and geopolitical issues, which is likely to continue in the coming quarters also.
Your voice cracked. Can you just repeat this last line? Your voice was not very clear. Yeah.
We mentioned that.
There's an echo also, I think, on the call. Is there echo also on your side?
No, I don't think so there's any echo I'm hearing. Yeah.
Okay. Go ahead.
Given the current scenario, domestic as well as overseas order book, which is quite consistent. There is a little bit of dip in terms of volume, but we are in a position, we are likely to execute these orders in the current year, and the volumes are likely to remain at the same level as it was in FY 2026. That is our prediction, given the current scenario is still going on, but we are working on multiple strategies beyond the MENA region. On the domestic front also, some strength in water sector from state drinking projects, where we are seeing some uptake improvement in first quarter, and this is likely to continue. This is our estimate that if the situation remains same, while we are likely to achieve the same level what we did in FY 2026.
Okay. Just to summarize, you mentioned the volume in FY 2027 overall is likely to be flattish given the current scenario, and you have seen some improvement in Middle East, and you expect that to continue.
In the Middle East, the situation is a little bit different. In domestic front, we have seen some improvement. In the Middle East, the monthly dispatches should remain in the same range, like 10,000 to 12,000 ton per month. That is something where we can supply the material through the road only. Till the time rail is continuing and sea route is not open, this level of operations we are likely to continue.
Okay. Let me second what Rajeev said. First, Rajeev mentioned what we are doing from Abu Dhabi plant to cater to the Middle East market. Okay. Secondly, if you're asking about how we are catering to Middle East, because the Middle East remains practically blocked for countries like India from March. We have sizable order book for Middle East from India. As of now, that order book is on hold, but we are now working out on various other options, specifically in terms of, let's say, if it is to cater to Saudi, because that's where we hold an order of 600,000 ton, even if it is on the job work basis.
Saudi has the alternative route also, which can take much longer in terms of time, it has a cost issue also, but we are now engaged with the buyer to find a solution which is kind of possible for both sides. Even if this stalemate continues, we are trying to find a solution that we execute at least that order because Saudi has both sides of the sea. Working on that solution might take some time, but we hope to find a solution for that. If that is workable, that takes care of a larger order book.
Okay. I got it. Understood. Just one last thing on the interest cost. There was a sharp reduction in your interest cost. What led to that, and how should one look at your interest cost going forward?
See, this is the interest primarily on our working capital and term loan, which is a hard cost, let's say roughly INR 20 crore-INR 25 crore. One of the larger compositions in the previous quarter, specifically quarter four of 2026, got significantly impacted because of sharp depreciation of rupee in that particular quarter. Fortunately, in this quarter, the rupee depreciation came in. Hello?
Yes. I'm there, sir. Yeah.
Okay. I thought that needs some description. In this quarter, since the dollar-rupee was really stable, there was not much of the impact which will debit it to this account. This INR 70 crore-INR 25 crore is the part which is being paid in the loan.
We expect this kind of run rate going forward as well, assuming the rupee volatility is not there?
Fine. Yes, that's a fair assumption.
Okay. Got it. That would be it from my side. Wish you all the best. Thank you so much.
Thank you. We take the next question from the line of Shweta Dikshit from Systematix. Please proceed.
Hi, good afternoon, sir. Good afternoon, everyone. Thank you for the opportunity. My questions are around the MENA projects that are ongoing. Firstly, on the seamless pipe plant that is expected to commission in FY 2029, any idea or any sense on utilization levels or volumes that could be achieved in FY 2029? As well as any sense on what happens on the DI pipe commissioning capacity of 100,000 tons. How is that likely to contribute to our financials in the next two years? And similarly, on the saw pipes plants which are coming up in Saudi, what is the commissioning timeline, if I missed it earlier?
Shweta. To describe your question, you are trying to understand when these projects are going to be implemented, whether it is seamless project or also LSAW and DI plant in Saudi and Abu Dhabi. Theoretically, the longitudinal and helical pipe plants can be done in 18-24 months' time. We are trying to crash some of the activities, presumably are considering, maybe assume that the stalemate in MENA region is likely to be over in next two months, maybe three months, six months, whatever. This is the time when we don't need equipment to land at their location. This is the time we will use to develop the site, specifically the Saudi, because they are the new sites.
If everything works well, we can complete the execution in next one and a half years' time, the production, let's say the testing and everything will start. Theoretically, we expect when we consider, let's say, utilization of approximately 50% of the capacity. This is theoretical, because everything will depend on if the project. These are like simple technology projects, unlike ductile or other things. There, we should get the orders, depending on the, let's say, shifts we are using, the capacity can be rendered. Theoretically, we have also assumed that we would produce and sell roughly 50% of the capacity, which is, let's say, 150,000 tons each in both the projects. Ductile, 100,000 tons, again, we can consider 50%-60% of the capacity, the Saudi market can take the entire production also. That's not a big issue.
It will be continuous plant on the top of this. In terms of seamless, we again believe that we can complete this project now from today in next 18-20 months' time, because a lot of time has been saved by us by taking a plot of land which is already developed. There was already a factory, we need not to fill the site, we need not to do piling and anything else. Equipment, majority of the long delivery items have already been ordered, maybe in next 9-12 months' time, the equipment delivery will start. Again, when we are commissioning the project, we believe that we can do 50%-60% in the first year. Seamless would require approvals also.
In the first year, two initial months will go for, including in the longitudinal API grade, two months goes for taking the approval. Pending that, we can do non-API production also. To answer your question, theoretically, we presume that production in all facilities will start in 2028-2029. Number one. Number two, theoretically, we are considering roughly 50% approximately production in all the facilities.
Hello, Shweta ma'am.
Yeah.
Okay.
I was saying, in that case, I think FY 2030 or FY 2031 could be the peak utilization of all the capacities together, if I'm not wrong.
FY? Yeah. Shweta, you are right. Within two to three years' time, we are expecting the peak capacity utilization in all the plants.
Two to three years from now, right?
Yeah. From 2028, 2029 onward. Yes.
Okay. Lastly, any guidance that you could provide for the seamless pipe facility in India at the Nashik plant since now the API license is reinstated. Last year, before the commissioning of the piercing mill, management was guiding to hit a run rate of around 80,000, 90,000 tons every quarter. When do we expect to hit this run rate? If it is still going to take time, or what would be the possibilities there?
Shweta, utilization in seamless facilities in Nashik is going to ramp up because.
Ladies and gentlemen, the line for the management has been disconnected. Please stay connected till I rejoin the management. Thank you. Ladies and gentlemen, thank you for waiting patiently. The management's line has been connected. Sir, you may proceed.
Shweta, your question was relating to the capacity utilization improvement in seamless Nashik unit. Where we actually, API licenses have been reinstated very recently. Since January to June, we were not eligible to participate in any of the API related supplies tenders. This activity has started now. We have started in participating the business, what we expect that at least a quarter or so, there will be some gap in terms of the utilization levels. We are expecting that September or October onward, the facilities should start improving the utilization level
Because API related sales, we are expecting to come into the production. October onward, we can expect the better utilization in seamless.
Roughly, what utilization levels are? I mean, are we looking at 80,000, 90,000 tons quarterly volumes starting 3Q?
It will be somewhere in 70,000 to 80,000. Yes, definitely. Quarterly.
Okay, sir. Thank you so much. I'll come back in the queue.
Thank you. Before we proceed with the next question, a reminder to the participants, in order to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Sailesh Raja from 360 ONE Capital Market. Please proceed.
Yeah, thanks for the opportunity, sir. Sir, our order book stands at 1.78 million tons. Of which, 0.75 million metric ton is exports order. Within exports, around 6.08 lakh pertains to helical or job work orders. Could you help us understand the composition of the remaining 1.42 lakh tons? Specifically, how much relates to LSAW pipe and DI pipe? Additionally, could you provide the breakup of the export's orders between Middle East and non-Middle East, sir?
Sailesh, Middle East or non-Middle East combined order book is roughly 60% export order book is from Middle East, and the rest of the 40% is from the non-Middle East market. That is on an overall basis. Yes.
Okay. Sir, can you give the breakup of this 1.72? Other than job work order, the balance quantity is 1.42 lakh tons. How much is LSAW and DI?
In terms of value, if you talk about roughly $70 million is from longitudinal. $30 million order book is from seamless, and ductile is from roughly $440 million, is the order book.
Okay. This is overall you are talking, sir? In exports?
Yes. Overall. Yes. I am talking about exports only.
Yes, sir. Also, in the near term, as you said, the outlook remains uncertain given the geopolitical situation and the slow recovery in domestic water infra spending. How is the company thinking about de-risking in order book geographically? Are you aggressively pursuing opportunities in the market like U.S., Canada, Southeast, and other region? Or is the strategy to maintain focus on existing market to preserve the market share and execution capabilities until the Middle East and domestic demand normalizes? What is our strategy?
In terms of Ductile Iron Pipe or water sector, primarily led by DI, as you mentioned, yes, domestic front, again, JJM is not coming up very prominently. Domestic front, to mitigate the domestic risk, we have already started exploring the overseas market, primarily the Europe, which is having a peak demand. We are also getting good inquiries from this market, and we are likely to increase our export order book in the coming quarters. Some of the facilities will be dedicated for export market in ductile, so that we can actually decentralize or de-risk the concentration risk on the domestic market. That is the strategy we are following.
Sir, how about the other segments, sir? Seamless and helical.
Okay, Sailesh. This is Vinay Gupta. Sailesh, in terms of our strategy, overall strategy, if you see in the last two years or couple of that year, or for that matter, we used to have 30% of export, 70% are domestic, maybe 5% plus, minus. Now, the serious problem is on account of the MENA region. Any sensible organization would start looking beyond your stronghold. We are at all possible territories and the regions where we can approach conveniently and economically. For example, for the longitudinal and helical pipe, it doesn't make any sense to look at U.S. or China or Canada. We have served to Latin America. We are looking at Southeast Asia, where China is not allowed, kind of. We are looking at CIS. We are looking all possible options wherever the demands are coming or can come.
That till the time the issue of MENA region gets sorted. Hello?
Ladies and gentlemen, it seems like the line for the management has got disconnected. Please wait till I rejoin the management. Ladies and gentlemen, thank you for waiting patiently. The management's line has been connected. Sir, you may proceed.
Yeah, okay. Sorry, Sailesh's line again had got disconnected. I was just talking about looking at various possibilities globally, wherever it is possible, and hopefully we should make announcement in some time to come. These are the regions which earlier we were not focusing very specifically, which we are focusing now. As Rajeev said, for ductile, of course, we have a presence in Middle East, which is catering to Middle East, but now we are looking from Indian facility. We are looking all over area. We already have a presence in Italy, and we are very closely at it to increase the presence in entire Europe from there.
Yeah. Sir, since you took the name Italy, in our latest company's LinkedIn post, it is mentioned that successfully qualified API 5L with minimum yield strength of 70,000 PSI from the Italy lab for the H2 pipe for transporting pure hydrogen-natural gas blends. Also, we supplied, I think, 180 miles of 18-inch pipe for your products. How big is this opportunity for the next two, three years? How large the size of the demand globally, and also what is our right to win over global peers in this hydrogen transporting pipes?
Sailesh, yes, there are much talked about business opportunities related to the hydrogen transportation media as a pipe. We are qualified for that, and we have got some certifications that our pipes are qualified for transportation of hydrogen gas. In that scenario, we are also exploring the possibilities and exploring the market. Wherever we get the opportunity, we can tap it. We are ready. Our facilities are ready. Still, the ground level demand is yet to come. We have not seen demand in a big way. There are discussions going on, still, at ground level, we have not seen a significant demand in this specific area.
Sir, one last thing. Also in our annual report, it is mentioned that first time company in India, we have started manufacturing stainless steel coil tubing. Could you elaborate on addressable market, end application use, and also the growth potential in both domestic and exports market?
In our annual report, we have mentioned about this. This is a specific requirement of one of our customer.
Okay.
It only shows our capability of dealing with the new requirements of the customer. As far as the demand and the name of the customer and the industry where it is required, because it is customer specific and we are bound to non-disclosure policy of the customer, we are not sharing that kind of information in this.
Okay, sir. Yeah. Thank you, sir. All the best.
Thank you.
Thank you. We take the next question from the line of Disha Chamria from Trinetra Asset Managers. Please proceed.
Hello, am I audible?
Can you speak little bit louder?
Yes, sir. Sure. Am I audible now?
Yeah.
Hello? Yeah. Last call you said that the margins have bottomed now, and given that the Q1 numbers are yet not positive, do you think the margins will improve from this quarter, or the pressure will continue to quarter two?
Sir, related to the margins bottom number from the country.
Hi. If I understand the question, the question related to the current margins and how the margins look like. Correct?
Yes, sir.
Okay.
Yes, sir. Correct.
Okay. Margins of course, have come down because of the whole model has got disturbed a bit because of external factors, because of internal factors like whether we call it the West Asia issue, we call it Jal Jeevan Mission, and also because of, let's say, the suspension of our API license for seamless pipe, which has been reinstated. All sort of issues had impacted the margin, and this has also impacted our overall utilization of facilities, thereby the absorption of the fixed overhead. Moving forward in next couple of months, at least till the time we are able to utilize our facility to an optimal level, again, the problem might continue because at the end of the day, one is basically the margins on the production. Second is utilization of the facility.
We expect, specifically in the LSAW, HSAW facilities, because of the lower utilization of those facilities, and secondly, we have multiple facilities across the country, there would be some pressure on those products, primarily because of lower capacity utilization. We expect that this may get arrested maybe in couple of months when we find, let's say, options and solutions to cater to the domestic demand as well as the Middle East demand. Even if we are not able to, let's say, normally we don't give the forward-looking numbers. In general, we expect that what we have done in the first quarter, maybe second quarter may also be similar, but we are hopeful that if everything works well, the H2 would start showing the improvements over the H1.
Got it.
Just to add on, as we mentioned that in the last, it was mentioned that H1 will be softer given the geopolitical situation and domestic water industry situation. It was already guided that H1 should be softer, based on that, results are also indicating the same.
Got it. There was an impact on the H2 seeing a recovery will be intact, correct?
Yes. That is our expectation.
Okay. Yes. On the working capital side, does this working capital thing should be normalized at this point, or will it see an increase after the operations get started and the utilizations improve?
The working capital is definitely directly related to the operations because now operations are on a lower side, that's why the working capital is on a lower side. Once the operations started improving, we may see increase in the working capital deployment. It's a direct correlation. Working capital is a part and parcel of the business, because it is a largely project-driven company.
You got it. This is due to the current utilization level that it has been looking at the lower level, correct?
Yes. Correct.
Okay. That's it, sir. Thank you so much.
Thank you. We take the next question from the line of Vipul Kumar Anupchand Shah from Sumangal Investments. Please proceed.
Yeah, thanks for the opportunity. What is our current capacity utilization? Can you break the domestic sales between the ductile pipes, seamless pipe, and saw pipes, HSAW and LSAW?
Generally, we don't share the product-wise sales because we are maintaining the combined pipe portfolio as a single segment. That's why we are showing the pipe volumes and pellet volumes. That is something which we are following as a policy of the company.
What was our capacity utilization in last quarter? What was the capacity utilization last year for full 2025-2026?
Capacity utilization was approximately 60%-65% overall capacity utilization we did in FY 2026. Current quarter utilizations are also on the same line.
It will not be possible to break sales volume-wise in different type of pipes like Ductiles and this LSAW, Edso.
It is a policy of the company since we are following a pipe segment as a single segment. That's why we don't disclose all these numbers product-wise. You can consider overall, because this is a kind of a strength of the company, that we are a total pipe solution provider. That's why all the pipe products are under the same roof. You please consider as a total pipe volume.
Okay. Thank you. Apart from these two Middle East projects, which are likely in 2028/2029, we are not having any capacity addition in between as far as domestic capacity is concerned, right?
Yes.
No capacity addition domestically.
No domestic capacity additions we are looking for. The capacity expansion projects are in the Middle East, like Abu Dhabi and Saudi Arabia.
Yeah, in India there will be no capacity addition, right, sir?
No capacity addition in India we have planned.
Lastly, when these projects are towards the end of their implementation cycle, what will be the peak debt of the company?
That term debt as of now, as we mentioned in the initial remark, it is in the range of INR 500 crore, 500 plus. It's a long-term debt, almost zero debt. That will be increased gradually once the projects are over. We are estimating the term debt should remain in the range of INR 3,500 crore approximately.
From 500 to 3,500 it will jump.
Yeah.
Term debt. Working capital is additional, right?
Yeah, additional, definitely.
Okay, sir. Thank you very much and all the best.
Thank you.
Thank you. We take the next question from the line of Shaurya Shah from Equirus Securities Private Limited. Please proceed.
Thanks for taking up my question. Of course the line pipes business has seen some challenges in the India region. In terms of bidding, are we seeing any pickup in bidding of any large upcoming orders in the India line pipes business? Basically, can you provide us with the amount involved in the bidding pipeline for the company?
That is something which is market related information or marketing strategy. That is something which definitely as a process we are tapping all the available opportunities. Sharing any specific opportunity would not be appropriate because it is a public platform and as a company policy, we are not sharing the marketing strategy and marketing policy on a public platform.
Okay. For any kind of forward integration like expanding more into pipes cooling business or any such plans? Maybe not in the near term, but let's say over the next two years.
No.
Sorry. When we are saying the cooling pipe business and all, this is the application of the pipe. For example, our Ductile Iron Pipes can be used for cooling as well as for hot application in the different terrain. We basically produce pipe as per the specification.
It seems like the line for the management has been disconnected. Please wait till I rejoin the management. Ladies and gentlemen, thank you for waiting patiently. The management's line has been reconnected. Please proceed, sir.
Hi, sorry for the again the lines are getting disconnected again. What I was trying to explain is that we produce as per the specification and the requirement, and it is up to the customer or the buyer to put it to the use. I was explaining we have seen application of our Ductile pipes in Middle East, which is being used into various kind of application. Let's say it is also being used for cooling chambers or cooling applications, also for the hot applications because that's the properties of the pipe. We don't put to the application on our own.
Okay, understood. That's it from my side. Thanks.
Thank you.
Thank you. Ladies and gentlemen, we take that as the last question, and would now like to hand the conference over to the management for closing comments. Over to you, sir.
We appreciate all of the participants who attended this call. Thank you very much for that, and look forward to have interaction once again next time. Thank you very much.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.