Ladies and gentlemen, good day and welcome to Venus Pipes and Tubes Limited Q2 and H1 FY 2026 earnings conference call hosted by DAM Capital Advisors 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 do not guarantee the future performance of the company and may 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aasim Bharde from DAM Capital Advisors.
Thank you and over to you, sir.
Thank you, Ikra. Good afternoon, everyone. On behalf of DAM Capital, I welcome you all to the Q2 and H1 FY 2026 earnings call of Venus Pipes and Tubes Limited. We are pleased to have with us the management team represented by Mr. Arun Kothari, Managing Director, Mr. Dhruv Patel, Whole Time Director and Mr. Kunal Bubna, CFO. We will have the opening remarks from the team, followed by a Q&A session. Thank you and over to you, Mr. Kothari.
Good afternoon and warm welcome to everyone on the Q2 and H1 FY 2026 earnings call for Venus Pipes and Tubes Limited. I will be joined by Mr. Kunal Bubna, our CFO, and SGA, our Investor Relation Advisors. We have uploaded our Q2 FY 2026 investor presentation on stock exchanges and company website, and I hope you had an opportunity to go through the same. India CapEx cycle continues to remain on an upward trajectory supported by strong policy push and sustained investment momentum. The build-out of critical infrastructure is now being driven by the few high growth sectors such as power, railway, engineering and industrial machinery, semiconductors and defense. These sectors are witnessing declared project execution and multi-year investment visibility, indicating that the CapEx cycle is not only robust today, but positioned for structural and long-term expansion.
A key commonality across these sectors and a major opportunity for us is the extensive and increasing use of stainless steel pipes and tubes. Whether it's the nuclear power generation, modernized railway trains, precision equipment manufacturing, advanced semiconductor fabrication, or mission-critical defense components. The demand for reliable, corrosion-resistant and high-performance stainless steel pipes is rapidly rising. Two key drivers are shaping this demand growth. First, there is a clear shift towards stainless steel from other steel categories, particularly in critical and high-performance applications where reliability and corrosion resistance are non-negotiable. Second, many of our end-user industry are currently in an upcycle with sustained CapEx across such as energy, railways, engineering. However, while demand is expanding, it's important to recognize the current market structure. A significant portion of demand is still catered to by the unorganized sector and imports.
This landscape is now changing with rising regulatory oversight and customers increasingly prioritize quality and long-term reliability. We are seeing a gradual but clear shift away from unorganized players. On the import front, anti-dumping duties and quality-linked norms are also encouraging domestic high-quality production. While many may want to participate, surviving this market is challenging. There are high entry barriers. Customer approval in critical industry can take years. Quality control systems, testing infrastructure and certification require sustained investment and technical discipline. This is precisely where Venus has a distinct and proven advantage. For years, we have invested ahead of curve in expanding our product basket, adding a stringent quality system and advanced lab infrastructure for testing, ensuring that every product leaving our facility meets the highest global standard.
This is why we are trusted and approved by leading companies across the world, including several from the Fortune 500. Having built this platform, our strategic focus is now on value-added and critical application products, segments that demand deeper technical capability, longer approval cycles, and that deliver superior margins. These are not categories where many new entrants can simply walk in. They require experience, credibility and trust earned over time. This puts Venus in a different league. We are not just participating in industry growth, we are shaping it. The strength of our narrative is backed by numbers. This quarter, we achieved our highest revenue ever underpinned by a healthy order book and solid growth in our export markets. We will dive deep in the numbers as we go ahead. Our ambition is to most trusted and preferred supplier to customers who value quality, reliability, and performance.
Coming to the Q2 FY 2026 performance of the company. We delivered a strong performance this quarter, achieving our all-time high revenue of INR 291.5 crores, representing a 27% year-over-year growth for the quarter ended September 2025. This performance reflects both healthy underlying demand across our key customer segments and the effectiveness of our execution strategy. Growth was driven by the combination of higher volume and continued expansion in exports. Market where we have been strengthening our presence over the past few years. Let me now share a few key updates from our operations during the quarter. Export continues to be a significant growth engine for us, reaching an all-time high of INR 115.6 crores, marking a 53% year-over-year increase. This performance is particularly noteworthy given the ongoing geopolitical uncertainties. It showcases the acceptance and trust in the quality of our products in global markets.
Export contributed a strong 40% of total revenue, showing strengthening of our international footprint. On the domestic front, we recorded 15% growth, supported by continued penetration across key end-user industries such as power, engineering, and railways. As mentioned earlier, the shift from the unorganized to the organized sector, coupled with the CapEx cycle across several industry segments, is driving our structural demand. We continue to view the domestic stainless steel pipes and tubes markets with a positive and multi-year growth outlook. Our order book remains healthy at INR 490 crores, providing strong visibility for the coming quarter. On the capacity expansion front, in November, we successfully commissioned 18,000 metric ton of stainless steel seamless pipes and tubes, taking our total seamless capacity of 216,200 metric tons per annum. We expect a steady ramp-up in utilization levels in the coming months.
Addition of new capacity for coating and seamless pipes and tubes remain on track and expected to come on stream in the second half of this fiscal, further strengthening our ability to serve high-value and critical application segments. In closing, we will continue to focus on delivering high quality products and creating long-term value for all our stakeholders. We are confident of a strong performance in the second half of the year. The best is still ahead of us. Together, we will continue to set higher standards in our industry. With this, I hand over to Mr. Kunal Bubna, our CFO.
Good afternoon, everyone. We are pleased to share that our company has delivered a resilient performance in the second quarter and half year ended September 2025. On the revenue front, revenue from operation for Q2 FY 2026 stood at INR 291.5 crores as compared to INR 228.9 crores during Q2 FY 2025, achieving a growth of 27.3% on year-on-year basis. Revenue for H1 FY 2026 stood at INR 568 crores, witnessing a strong growth of 21.1%. Revenue by segmentation for the quarter was 38.9% from welded pipes, 56.3% from seamless, and 4.8 from others. Growth in seamless segment was 25% on year-on-year basis, and welded segment registered a strong growth of 48% on Q2 FY 2026 on year-on-year basis in terms of revenue. Our export sales stood over INR 115.6 crores for the quarter compared to INR.
INR 75.6 crores during the same period last year, a growth of 53% year-on-year basis. On the EBITDA front, our EBITDA for the quarter stood at INR 47.4 crores as compared to INR 40.9 crores in Q2 FY 2025, a growth of 16%. EBITDA margin for the quarter stood at 16.3%. On H1 FY 2026 basis, EBITDA show a growth of 2% standing at INR 92.3 crores with margin at 16.3%. PAT for Q2 FY 2026 is INR 26.1 crores compared to INR 23.7 crores in Q2 FY 2025, a growth of 10% on a year-on-year basis. Net margin stood at 8.9% for the quarter. In closing, we remain confident about the road ahead. With focused investment, strong execution, and a clear growth strategy, we are committed to strengthening the Venus brand and setting new benchmarks in the stainless steel pipes and tube industry.
With this, I would like to open the floor for questions.
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. The first question is from the line of Parth Bhavsar from Investec. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. I had two questions. One is that we had won this order in April
Of February, right? INR 190 crores. Are there any updates? What sort of execution has happened of that project? Also wanted to understand if you maintain your guidance for FY 2026.
Yeah. Out of the bigger order of the power sector, what we won, we have executed around more than 15% of the same, and the balance is under process of execution. Internally, the target is to finish it before June 2026. We maintain our guidance for the year. Yeah. We'll see.
15% executed till now?
Yeah. Sort of. Near to that.
Okay. The guidance for 25% revenue growth is maintained?
Yes, maintained.
Thank you so much. Those are the questions.
Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead.
Thank you for the opportunity, [Arun Ji], [Kunal Ji]. My first question is on the margins. With all the capacities and value addition that's coming through over the next six months, how should we look at the margins in FY 2027? If you could provide any number, that would be great.
See, currently it is around 16.3 for this quarter. As you rightly said, generally the value-added welding, seamless and fittings, the plant will be started by end of this financial year. Next year the entire operation will be there, along with value-added products. We believe it will be higher than what we are currently around, and it should be in the range of between 16%-18% on a full blended basis.
Sir, you mentioned 16%-18%. Should we not see a higher jump in the sense that because of the fittings and value addition, should it not start to look like 18 next year onwards?
No. See, fitting would be a new business for us from the perspective of workflow and all. Those things need to be considered also. Those factors will also play, and many other things. Keeping that, we believe that is the number currently what we are calculating for.
Sure. Sir, my second question is on exports. While we've seen very good exports this quarter, for the second half of the year, how will that mix change? Will it be more domestic or exports will continue at the current run rate? The reason why I'm asking this question is I'm guessing there would be some bit of soil testing on the U.S. exports that would have happened because of tariffs in this quarter.
Yeah. Right. It should not be at least 40%, we believe it should be more than 25%, 30% sort of number for export going forward also.
Okay. The rest of the growth will largely be driven by the domestic market.
Correct.
Sir, on your adding order book, sorry, I missed that number. If you just repeat that, sir, please.
INR 490 crores.
490. Sir, if you could just give the split of volume growth and value growth for this quarter.
Volume-wise, see, we are not giving out those numbers. Again, for the year-on-year quarter, the volume growth is also on a blended basis, more than 20% at least.
Okay, great. Thank you so much, and all the best.
Thank you. The next question is from the line of Sneha Talreja from Nuvama. Please go ahead.
Again, congratulations on numbers. Just a couple of questions from my end. Just wanted to get a feedback from the exports market. Which are the geographies where you're seeing strong demand? How is the U.S. demand shaping up with not having so much of clarity on the tariffs? How is that?
The orders are there from a good number of orders are coming from Europe currently. You are right, on the side of U.S., there's a lot of uncertainty, so that is slightly deflating on our side. Middle East and that part is going as per the same run rate what it used to be in the last quarter.
Understood. Secondly, you have also said that expansions are likely in H2 FY 2026, both fittings as well as on the seamless part. What can we expect this particular year in terms of contribution from fittings, H2 as in that will be this will be Q3, Q4, and what sort of revenue contribution can we look at, especially from the fitting side of the business?
For FY 2026, not much because it would be started probably in the last quarter of FY 2026. Not much amount of revenue will come from fittings from the new plant.
Given that you said that you won't be mentioning much on the volume side of the growth, but given you said it is more than 20% and we have seen around 27% odd sort of revenue growth, is it fair to assume that realizations are on a dropping trend? In that case, how should we look at the annualized revenue run rate? Will it be closer to 25% sort of a number that you have guided on the bottom front?
Sort of that, we believe.
Understood. Thanks. I'll get back in the queue.
Thank you. The next question is from the line of Mythili Balakrishnan from Alchemy. Please go ahead.
Hi. I hope I'm audible.
Yeah, you are.
Sir, a couple of questions. I just wanted to get a sense from you of, on the welded side, we have seen growth, which has reemerged. Is there any particular project or anything particular which is happening on that segment? Because it had been soft so far. Just wanted to get a sense of, is that a new product? Is there any new customer, et cetera, which has got added on the welded side of things?
Yes. I'll see to new European middle east also. Again, in India also, few new customer has been added. Again, primarily on the bigger side, welded pipe, it has started and deploying.
Got it. Also wanted to get a sense from you that if the steel prices sort of stay on an upward trajectory, which is sort of expected, what has happened to margins for us while we are short cycle in general? Just wanted to get a sense of how to think about margins in that scenario.
Primarily, as a company, we generally try to hedge it, while taking the order to a substantial portion of it. On the margin front, we are not much affected with the changes in prices.
Got it. Whatever margins we are having right now, it should be at least sustainable given the mix improvement and all that, and not much impact from raw material prices changes.
Yes.
Got it. That's all from my side. Thank you.
Thank you.
Thank you. The next question is from the line of Pallav Agarwal from Antique Stock Broking. Please go ahead.
Yeah, good afternoon, sir. The first question was on this anti-dumping duties. When are we expected to expire on stainless steel pipes?
It has come in December 2022, on stainless steel seamless pipe. It is there for five years. Primarily, it should be ended by December 2027.
Okay. We have almost two more years. Okay. The other thing was on the cost part. We've seen other expenses go up and, on a YOY basis, employee costs have also gone up. Will this trend continue or once all the new capacities come in place, this should stabilize?
Absolutely, see, again, each quarter there is a new expansion coming in, a new plant being constructed, that's why those costs are increasing. I think both this year, they should stabilize. It should increase in the few quarters to come, not very significantly. In the coming year, I think it should be stabilized to a good extent.
Sure, sir. Also borrowing. Borrowings have gone up. I think that's reflecting in the finance costs also. Are we close to the peak net debt or is there some more major CapEx left that can push this up?
It will push up because there are CapExes left. Because of that, there will be few loans will be coming in the books. It will slightly push up from here also.
Maybe FY 2027, maybe it should probably peak out because then.
Absolutely.
EBITDA should start coming in from the new projects.
Absolutely.
Sir, lastly, just on, I mean, broadly the understanding is that seamless tubes have a better margin because of being backward integrated than welded. On the export orders, et cetera, are we seeing that? Because, for couple of quarters now, our EBITDA margin has been pretty stagnant at 16 or 16.5%. You guided for 16%-18%. When can we see this bump up happening?
See, the bump up will be more apparent in the coming year, when generally all the capacity will start operating at a optimum level. Again, see, seamless pipe, the margins have been constant. See, here also the volume and value is also increasing. They are subdued in the overall in the margin in two places. Everything has to be taken into care. Definitely, yes, with the start of all this capacity, I think the margin should pick up in the coming years to come.
Okay, sir. Sure, sir. Thank you so much.
Thank you. The next question is from the line of [Bhargav] from Ambit Asset Management. Please go ahead.
Yeah, good afternoon, team, and thank you for the opportunity. Sir, my first question is that on this BHEL, obviously there will be more orders which they would be tendering accounts. We believe that it could be in the range of INR 3,000 crore-INR 4,000 crore in the next two to two and a half years. Just wanted to know your thoughts on this number, sir.
You're right. It will be significantly high. Very true, because there are a lot of CapEx on the part of the thermal side with Asian and other players are doing. What we see giving a specific number is slightly tough because this all depend on how the tenders are being floated. To say it is significantly very high.
Sir, is it fair to expect that one more tender will be opened in the second half of this year or very early to say that?
Bhargav, number of tenders we had already participated number of tenders. We are anticipating not almost which to exact this number, but almost we can say 80% of the last tender will be open in the coming next three, four months. Is it not open in some of the quantity definitely will open in this H2. If not open early April, definitely it will be open.
In terms of U.S. share of exports, is it fair to say that it is very minimal, maybe less than 10% of our exports?
Of the?
Of the total exports.
No.
U.S. would be less than 10% or.
For the last quarter, primarily Q2, it was around 20%.
It was at 20%?
Of the total export.
Here, are we bearing How is the billing happening? Is it CIF or what, sir?
It's, again, all the contracts are case by case. It depends on customer to customer.
Meaning, I was just trying to understand what could be the tariff. Is it passed on?
No, see, currently, the order what we are now taking, its tariff would be passed on because the understanding is that the rates are as per the current tariff. If it gets changes, it has to be borne by the end customer.
We are neutral as far as tariff is concerned.
Currently, yes.
Okay. I got it. Sir, the last question is in terms of fitting revenues, assuming full utilization, what can be the maximum revenue that we can generate from the fitting plant?
It's more than 3x of the investment what we put on. That we see when the entire fitting come into operation.
The total CapEx is about INR 170 odd crores?
Fitting would be around INR 60 odd crores.
Okay. INR 180 crores-INR 200 crores can be the peak revenue from fitting.
Sort of that, yes.
The promoter warrant money has been come into the basket, right?
Yes, the entire warrant has been subscribed.
In promoter and non-promoter world.
Okay, great. Thank you so much and all the best.
Thank you.
Thank you. The next question is from the line of Richa Chowdhary from Electrum PMS. Please go ahead.
Yeah. Good afternoon, sir. Thank you for the opportunity. I just wanted to understand how is the business doing. How does the pipeline look apart from this power and the thermal sector, how is the other industries doing? Also, if you could just give a breakup of the order book right now, how much is exports and domestic?
The breakup is around more than 30% is export, 30%-35%, and balance is domestic. Sector, primarily see chemical, power, engineering, a bit from oil and gas. These are the mix sector within we are getting orders.
How does the pipeline look for all of these sectors?
Seems good. Mostly it is not very, too much robust also, but seems good. We have been receiving order from both domestic and export market. Definitely the, in case of U.S.A., it is definitely there. Other than that, it is going good.
Okay. Thank you.
Thank you. The next question is from the line of Shivk umar Prajapati from Ambit Investment Advisors. Please go ahead.
Hi, sir. Thanks for the opportunity, and congratulations on a great set of numbers. My first question will be, post the duty imposition on Chinese players by the Saudi Arabia, will you see any positive development or any inflow of orders from that geography?
Yes, we have supplied in that geography post that, and we are still working on that, and we hope we should further get more orders from that geographies.
Understood, sir. Sir, my next question, continuing on the previous two participants maybe. Basically, the orders which we expect from the power sector, like a TAM of around INR 3,400 crores. How many players would be there competing for these kind of orders, and where do we stand in this competition? If you can highlight some key two drivers in this.
See, there are many products what need to be supplied, and each have their own set of buyers. But you can say it's more than, I believe, more than five, seven numbers of buyers are there who bid in this type of contracts. Again, on the basis of prices and many other factors come into play. From that basis, the final participant is being chosen.
Understood, sir. Thank you so much, and best of luck.
Thank you. The next question is from the line of Ritesh Shah from Investec. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. A couple of questions. Sir, first is, would you like highlight any specific approvals for that we are working on as work in progress for us and we could see results over the next 6- 12 months?
See, we are working in Middle East, Southeast Asia. These are the few geographies we are working with. Many of the approvals which are underway, we hope it should be coming in coming quarters to come.
Sir, would you like to place in context how critical or important these approvals are versus what we already have with us?
Definitely, these all approvals are important as a company, and when you get these approvals, other approvals also sometimes in tandem comes with that. See, as we said, there can be geographies being affected, there can be subdued in few of the sectors. Each approval, when you receive, you add those, fit in your bouquet, and again, it becomes more flexibility for the company to choose few of them and not to choose few of them. That's why these all are important, and we keep working on that.
Sir, how should we read into this approval? Are we already there in Middle East and we are chasing larger companies with tougher approvals, both Middle East as well as Southeast Asia, if we get it, our TAM actually increases?
Ritesh, like that we are already approving some of the oil and gas companies in Middle East. Further, we are pursuing for some more oil and gas companies in Middle East as well as in the, we can say in USA also, in Europe also, in Brazil also. We are in pursuit of the getting of the approvals because these approvals are not product-based or on the past track records. In our industry, the approval process is always ongoing. Sometimes we get some product approval, we further go for the addition in the product. Once we go in the fitting, again, we go for the approval process. It's ongoing process. We are on the basis of PTR and others. We are very confident that most of the approval is already in place.
Further we are pursuing for more approval to have the better market visibility.
Sure. Sir, just to understand, are these plant specific approvals or line specific approvals? How should we understand that? Usually, what is the approval timeline like? Does it need to be renewed every three years, five years?
Normally this approval, all the approval is given. It's for the supply of the material or it's a specific plant-based approval or particularly in some cases, the product-based approval also. It's for the open approval. In very limited company, it's a time-based approval. We can say 5%-10% companies give the time-based approval, but they do renew on time to time basis.
Sure. Sir, this is useful. Sir, my second question is, you indicated in the remarks that Europe was actually doing fine. Just wanted to understand what is the effective tariff that we have against Europe and U.S. right now? That's one. The related question is, we will have CBAM which will kick in in Europe starting from January. How does it change our outlook when we cater to the region?
In case of Europe, generally on India, there is no such specific tariff currently. On China, the tariff is substantially, there is additional tariff there on China. As India, we are not as such affected currently in case of Europe. In case of USA, again, the tariff is a Section 232 is 50%. Again, anti-dumping duties are there on China, which is substantially high. It make Indian a bit cheaper as compared to when you compare it with China and other part of the world. On the front of CBAM, for ours, it's primarily stainless pipe which is predominantly imported by us to Europe. Currently they have not come up with the standard value. They are evaluating many of the working and I think sooner or later they will come with it.
One of the understanding what we are currently having, we are near to the standard. We should be there on the basis of some discussion what we had with few of the constituents of those countries.
Sure. Sir, any thoughts of putting on a captive furnace, given we can probably get scrap easily given where our plants are located. Doing that, our carbon intensity could actually reduce. Any thoughts on capital allocation with a three-year view wherein we look for further backward integration?
To be frank, not currently much on the side of backward integration of whole around our company. Again, if something comes up, we'll definitely let you know.
Sure. Sir, just last question. You did indicate about the approvals. Can you highlight specific grades or alloys that we currently are and where we aspire to be? Basically, if one looks at right side of the complexity curve, you have duplex, super duplex. Are we already there? Or what are our thoughts to actually move the value curve in that direction?
Ritesh, this is slightly confidential, sir, due to competitor. We'll explain you anytime in the personal call to you.
Sure.
When we have the one-to-one call. Okay?
Sure.
This is a confidential, please.
Sure, sir. Sure, sir. Okay. Thank you. Thank you for the answers. Thank you so much. Thank you.
Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. The next question is from the line of Dhananjai Bagrodia from Alchemy. Please go ahead.
Hi, sir. Hi, Kunal. Can you hear me?
Hi. Hi. Yes.
Most of my questions are answered. Just wanted to understand for the new facilities which are coming in, what would the ramp-up be like? Do we have any orders in hand or have you got anything on those? Just any clarity on those.
Not as such order in hand, definitely, we are looking for the new facility for the orders, for the client approvals and what best we can do. Many of the things happens when the projects start, the COD. In case of stainless steel, they are already in the market and substantial portion of the capacity is utilized currently also, we believe on the side of stainless steel, we'll be able to ramp it up on a very faster basis. We have already started in the first quarter and we have started working for that few approvals have also been received and going forward also, the team is also to get more approval. Fitting would be definitely a new business for us, it will take a bit time to ramp it up.
We'll do a portion of fitting also on the side of fitting to just to know how the market play on that front.
Even something like fittings, is that something we see, do we see a good ramp-up because that will be sold in conjunction to our current products, right?
Absolutely, it will have to be, right? The person who are currently the customer of Venus procuring pipes, they would be the same customer who would be procuring fittings. It would become more sensible for them to procure one stock from Venus rather than going to numbers of other vendors. We believe definitely it will be an impact in export and other market also, the distributor or traders to whom we sell, they also in turn sell fitting to their end customer. I think that geography will also be open to us.
Okay. Would there be a change in working capital cycle in these new two segments, or would it be similar to what it is currently?
It will be similar to what we are currently operating.
Okay. Sir, very best of luck. We've done all the hard work. Hopefully now we'll see it ahead. Best of luck.
Sure. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Thank you all of us for joining us today. I hope we have addressed all of your questions. We remain committed to keeping the investment community informed with regular updates on any developments in the company. For any further information or queries, please feel free to reach out to our SGA, our Investor Relation Advisor. Thanks all of you.
Thank you very much, sir. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.