Thank you. Good afternoon, everyone.

I warmly welcome all of you on Q3 FY26 conference call for Maharashtra Seamless. From the management side, today we have with us Mr.

Kaushal Bengani, Deputy General Manager Investor Relations and Finance. Without taking any more time, I'll hand it over to Kaushal for his opening remarks.

Over to you, Kaushal.

Thank you, Vikash. Good afternoon, shareholders, and thank you for participating in our earnings call.

This was a fairly regular quarter with a slight increase in margin on the seamless pipes front, which was expected because we had communicated the same in the previous quarter. On the ERW front also, margins improved because of improvement in product mix.

On overall level, our total EBITDA was also higher. The highlight for this quarter was the other income, which was boosted by improvement in market sentiment and in gold and silver sectors.

I would request Vikash to please open for questions so that we can go slide by slide as per the questions received.

Noted. Operator, please open for Q&A.

Hello, sir. Thank you for the opportunity.

Sir, wanted to understand what is the current product mix between the standard and value-added products for us, and how is the margin difference between these two?

We've already informed in earlier calls that we'll not discuss product-wise margin. The current product mix between oil sector and other sectors is already detailed in the order book, which is mentioned on slide 15 of the presentation.

The current order book is at 1,302 crores, of which 33% comprises ONGC and Oil India orders. This order book is broadly similar to the order book which was present in the previous quarter.

The only difference between these two order books is that the proportion of oil sector orders have increased in the most recent order book.

Sir. Sir, actually some of the peers are doing similar EBITDA per kg that we have reported with half of our volumes.

That is why this question, whether in our numbers currently is the standard product mix higher than the value-added?

Which peer are you referring to? Because as per my understanding, there is no comparable company which is only focused on seamless pipes.

That is correct, sir. I am only comparing with their carbon steel business.

They don't report product-wise or division-wise margins, I don't think it will be possible to do a comparison. Unless you have internal data of the company, then it's a different story.

Sir, ISMT is actually reporting.

Then they have different types of products. The seamless pipe product mix that we have is not the same that is undertaken by Kirloskar Ferrous.

How is it different, sir?

They are more focused in the smaller size segment.

Sir, previously when we had a conversation, you said that in terms of diameter of pipes, we have the entire range that is required by the market.

We have the entire range. Their proportion of smaller sizes is higher compared to our proportion of smaller sizes, because we have a larger capacity and a larger size range.

What percentage of smaller pipe sizes do we have as a percentage?

We are not giving that out. I mentioned at the starting of the response that we will not give you product-wise, segment-wise bifurcation.

Every call, I believe, this question is asked of me by you, and every time my response is the same, that we will not give you that bifurcation.

Sir. Sir, in value-added products like casing pipes, tubing pipes, etc., can you help us understand the current market dynamics in terms of demand and supply including the imports?

Casing pipes and tubing pipes are regular seamless pipes. We don't consider them value-added products.

Value-added products are cold-drawn pipes, cylinder pipes, drill pipes, sour service subsea seamless pipes, and premium connections. I think these are the five key categories of value-added products, out of which we manufacture four of these.

In the previous quarter, there were no orders for drill pipes. Even now, we don't have orders for drill pipes.

Cylinder pipes, we had a good order book in the previous quarter, and even now also we have a good order book for cylinder pipes. The same goes for sour service subsea seamless pipes and cold-drawn pipes.

We do not manufacture premium connections right now. We have signed a royalty agreement with a foreign partner, and that work is under process.

I think in about 6 months' time, we should be able to start production of premium connections.

Sir, any color on the capacity that you're planning to set up in this?

The capacity expansion plan that we have detailed in one of the slides in the presentation, out of that, we had started two projects. The cold-drawn pipes project, which has been completed, and the other one is the finishing line at Telangana, in which we have issued purchase orders of 90 crores, and we'll be able to start some portion of it in the current quarter.

Sir, I was asking about premium connections.

I've already told you about premium connections, that we should be able to start in about 6 months' time.

Yes, sir, capacity for premium connections?

We will get back to you.

Sir. Sir, any color on the current bid pipeline or any new tenders that we are expecting in the near term?

We don't disclose that.

Sir. The last question

in the last quarter Just 1 second. We've disclosed the order book.

If you have been tracking the company for some time, then you should be aware that the order book that we have is always for a period of 3 to 4 months. The current order book is dated 20th January.

For the current quarter, we have disclosed our order book segment-wise.

Sir. Sir, in the last quarter, you had mentioned that imports is around 20 to 25% of the domestic industry size of 9

lakh

tonne. Has that reduced in this quarter?

No, and it has not reduced. Despite the unabated dumping from China, we have managed to maintain and improve upon our margins, and the tonnage that we have dispatched has not declined despite the challenging economic environment.

Primarily driven by product mix?

Product mix is not relevant for total dispatches.

Sir, you said margin has improved despite the continued dumping.

I've said this again at the start of the call that the increase in margins was on account of reversal of the inventory markdown which was done in the earlier quarter. That also I had pointed out in the previous quarter's call, that there will be a improvement in margins in the subsequent quarter.

Sir. Thank you, and all the best.

Thank you.

Yeah. Thanks a lot for opportunity.

Sir, just wanted to know about your 852 crore capital expenditure. By when you plan to spend this amount?

We've started two projects. Once the Telangana finishing line project is completed, then we'll take up other items mentioned over there.

Okay. Telangana finishing line, that will increase the capacity by 1 lakh tonne, right?

Yes.

Okay.

I'll just clarify, it will not increase the production capacity, it will increase the finishing capacity. We already have production capacity which is of 2 lakh tonnes, which is currently unutilized because commensurate finishing facility is not in place.

That bottleneck is being resolved by the finishing line which is currently being implemented.

Sure, sir. Even though if I take FY25 numbers, your production was 440,000 tonnes and capacity 6 lakh.

Now from that 5 lakh, the entire 6 lakh can be utilized. Is that understanding right?

Against 441,000 tonnes for FY25, capacity is 550,000 tonnes, which is active and utilizable. The additional 100,000 tonnes is not active and not utilizable because the commensurate finishing facility for that 1 lakh tonnes is not in place right now.

This issue is being addressed by putting in a finishing line at Telangana.

Okay. That clarifies a lot.

Also if you can give an outlook on how are the ONGC and Oil tendering happening. Like you have mentioned that drill pipe order is awaited.

What will be the order size of that?

Very small, because drill pipe annual market is around 8 to 9,000 tonnes for the entire country. These are high-margin orders.

That is why they are specifically pointed out in our order book.

Sir, in recent IIP numbers, the base metal sector has seen a good growth. In the press release also written that steel tubes market growth has been encouraging.

What are your comments on that and how that impacts to our company?

Who has given this view? I couldn't understand.

In yesterday IIP numbers base metal has grown by some 10%, and in the commentary it's said that within base metal that metal tube industry has done well. Is our company considered in the metal tubes company?

We are part of the metal tube association, but our market is a niche market because our products are used for a specific purpose, and it is dependent on government expenditure in the oil and gas sector rather than for general consumption.

Sure, sir. Thanks.

That will be from my side.

Hi. Thanks for the opportunity to ask the question.

Is my voice audible?

Yes.

My question is, you have about 3,500 crore of liquid investment. Out of that, close to 2,957 is into the mutual funds.

Can you give the bifurcation, how much is your portfolio in the equity mutual fund, how much is into the gold, and how much of this liquid scheme?

We are not giving that bifurcation out, and it is not required.

Okay. You don't want to disclose this information.

The reason for this is I just wanted to know what kind of a risk capital the company is carrying in their treasury operation with regards to investment into the equities market. Or how much is the proportion or even a quantitative number with regards to how much of the money of this has been invested into the liquid scheme might be helpful.

The total portfolio return for the 9 months ending December 2025 is in excess of 24%.

Okay. Thank you.

No issues.

Good evening, sir. My question is regarding, sir, as of what we understand is that the demand of seamless pipes is something that you cannot create.

You are dependent on the requirement of the government agency. As I understand, the export sector is not viable as of now as far as the seamless pipe is concerned.

Am I correct?

Carry on so that I can answer in one go.

Yeah. Sure.

Hello?

Yes. Yes, sir.

Yeah. My question is, sir, we are sitting on a lot of cash.

Company has already decided that we will not diversify in other segment. What do you see our future growth prospects in next 2 to 3 years?

What is the management deciding about future course of action, sir?

We are conserving cash as of now, and we are on the lookout for any inorganic opportunity that may arise. That inorganic opportunity should be at a cost level at which we are comfortable.

We will not buy assets at full value. We will buy only distressed assets because that makes the most sense for us in our industry, which is cyclical.

In addition to that, we are focusing on treasury management and on improving our operations internally. Right now, that is the position that we can communicate.

All that we can do now is hope for the demand to somehow increase, and then only our revenue can increase. Is that correct, sir?

Yes.

Okay. Still the management is of the view that you do not want to increase the dividend or somehow distribute the cash to the shareholders?

We have quadrupled the dividend which is being paid out to the shareholders in the period from FY22 to FY24. In FY25, even with a lower profit, we maintained the quadrupled level of dividend which was paid out.

Sir, that is absolutely correct, but the only issue that I have is that since approximately 50% of our market cap is in cash or cash equivalent with the company, now I'm I am also of the opinion that since you cannot increase the demand of the seamless pipes, to increase the value of the company, I think you only have two or three options with you, sir. If in case you are not able to increase the demand, you have ample cash, you can also increase the dividend in the proportion of the cash that you are reserving with the company.

We are not saying that you are not taking right decisions or something is in your hand and you're not doing that, but either if in case you have amp- amp- ample cash, you can distribute to the share- shareholders, at least as a shareholder we should also enjoy the efforts that you're putting in the company and manage so much cash in such a right way, sir.

Okay.

Am I making sense, sir?

The interest of the equity shareholder does not necessarily have to align with the interest of the management in running an organization. We focus on long-term value creation, and when you do make the point that 50% of our market cap is backed by cash on the books, you should also bear in mind that in this seamless pipe industry, every one of our peers, without exception, have either been bankrupted or gone to bankruptcy courts.

We are the only player in this industry who has consistently remained a market leader for the past 35 years. Our thought process would be different from that of our peers, and it has benefited us, which is why we remain aligned to the thought process which has benefited us.

Sir, you are absolutely correct, sir, and kudos to the management that have accumulated so much cash, and you have also dealt it in the right way. There has to be a cap on the amount of money that you think you need to reserve, because you're saying that each

There is no legal requirement that there has to be a cap. There is no cap, and we want to follow those business principles which have ensured survival and prosperity of our organization, rather than those business principles which appear good maybe in the shorter or medium term, but which may not be so applicable in the longer term.

We are the oldest player in the industry, and we have remained a market leader. You may not like what I am saying, but the points which I am making are clear facts which are easily verifiable.

Sir, I myself have been a shareholder in the company for last 4 to 5 years, and I have followed the company, joined each and every call. It is not that you are misguiding us or what you're saying doesn't make sense to us.

We are also one of the shareholders who are happy to see the growth, if not in terms of revenue, but the value of the company. I'm sure you will understand as a shareholder, we also look forward to

Sure. Thank you for the answering my question, sir.

Thank you.

Am I audible?

Yes.

Yeah. Right now what I could see that our current capacity is not fully utilized, as and then the demand is also not that high.

Even if the Telangana plant comes into effect, if the demand stays the same, is it fair to assume that it's going to impact our profitability in coming quarters?

Since the Union Budget is only a few days away, Okay. maybe I'll be able to address your query better after the budget, because we are dependent on government expenditure for

Oil and gas.

government expenditure for expansion and growth. If government expenditure does not improve, then the market will not grow, which will directly impact us.

Let us see what the budget puts out, and accordingly you can decide.

Government expenditure can improve in other sectors, may not be necessarily for oil and gas. Even if that stays the same, that goes up, then it will be same, right?

Because sustainable level of expenditure in oil and gas sector is there, but your question is in terms of growth, for growth we will require more expenditure in oil and gas sector.

Okay. Fine.

The next one is, given that we have now that FTA in place with the Europe and all, which might get activated in next year '27, will that anyway affect or help our business to grow in European countries?

We are still reviewing that. Exports have seen some improvement in the previous quarter.

Maybe in the next quarter's call, we'll be able to update you better on this FTA point.

Okay. Any guidance in terms of EBITDA per tonne for next quarter or something for next year?

We do not give out guidance specifically, but the only thing that I can tell you from some experience is that we don't see margins to decline materially from here. I think it will remain in the range of 10 to ₹15,000 per tonne.

Okay. After the anti-dumping duty which has been put some days back, then we could see that HRC price were going up.

No anti-dumping duty has been put.

It was an extension.

Sorry?

That extension which they have considered,

12% is

12%, 12. 12 or 12.5%, something like that.

That is a safeguard duty on steel.

Correct. Correct.

Correct. That is not applicable on our industry.

No, that's what I'm saying. If after that HRC price started going up, will it affect anything onto our inventory so that the price can go up?

Okay.

Our order book is supported by back-to-back booking of raw material. If raw material prices will increase, then the same will be passed on to the customer.

For orders which were in place prior to the implementation of safeguard duty, we had already covered those orders with raw material.

Okay. Right now, our oil and gas order book is around 400 crores, right, which generally gives high EBITDA per tonne?

Yes, 33%. So, 33% of 1,302 crores is around 400 crores.

Right.

That exclude the anticipated drill pipe order. Correct?

Yes.

Okay. Thank you so much, and maybe next quarter I'll ask for that after the budget.

Thank you.

Thank you.

Hello?

Sir, thanks for giving me the opportunity. I have a question regarding as we are hearing and seeing the reports like the shale gas and the oil and the peak oil output has just passed and now more drilling is required to get the same amount of oil and gas.

Sir, can you please throw some light on your acquisition about the United Seamless Tubular that was done some time back, and how are you getting the feelers in the market or do you see that capex is coming by large global conglomerates in this space? Thank you.

Regarding United Seamless Tubular, what is it that you would like to know?

Sir, I would like to understand we acquired it on some basis, is the thesis playing out? Are we getting some traction in North American or the European market where we wanted to compete with the other large players?

I am confused. We never said that we want to compete in European and North American market from our mill in United Seamless Tubular.

That mill is working very well. We acquired it for 477 crores, and we invested an additional 73 crores to reactivate the mill.

Against a total capital expenditure of 550 crores, that mill generates between 100 to 200 crores of EBITDA every year, depending on the margin profile. In addition to that, there were accumulated losses and unabsorbed depreciation in excess of 1,500 crores in United Seamless Tubular Private Limited.

Subsequent to merger of that company with Maharashtra Seamless, we were able to set off the profits of Maharashtra Seamless with the unabsorbed depreciation and accumulated losses of United Seamless Tubular, thereby Yes, sir. saving tax of around 375 crores.

Yes, sir.

Understood. The entire project was paid back in maybe 2 years.

Yes, the thesis did play out, and that is the position today.

Sure, sir. Sir, thanks for the elaborate answer.

Sir, regarding the investment by large companies and who are the users for our pipes, though we are mainly focused with ONGC and some other players, are we getting some traction with other large consumers in terms of the seamless pipe for new drillings in oil and gas space?

We have been able to replenish our order book without compromising on the tonnage that we have dispatched. In the second quarter, we dispatched 103,000 tonnes of pipes.

In the third quarter, we dispatched 101,000 tonnes of pipes. In spite of a challenging economic environment in which government expenditure was also muted, we have managed to replenish the order book.

Yes, sir. Sir, if I can ask something more.

Sir, in last four four years, we have seen there have been frequent changes for the CFO, Chief Financial Officer, in the company. Is company taking some steps that there will be more consistency going forward?

The changes in the CFO was on account of various factors which were unique to each CFO. Right now, Mr.

Arup Mandal is the CFO, and he's been with us for about a year and a half.

Yes, sir.

In addition to the CFO point, I would also like to mention that I've been with the organization for 14 years. I think that should give you some comfort.

Yes, sir.

Hi, Kaushal. Just one question on our premium connection side.

Can you just tell me what is the current market size for that premium connection in India, and what kind of market share we are looking to acquire on that segment?

Premium connections would be between 50,000 to 1 lakh tonnes per annum, depending on the amount of capital expenditure that takes place. Right now, this product is being supplied by Jindal SAW and through imports.

We will have to take some of their shares in order to compete in this environment.

Noted. My second question pertains to in 6 months back, we heard a lot of news about ONGC needs to drill almost 500 wells, and accumulated demand expansion for these wells could be 100 kt in tonnage terms.

Just wanted to understand is there any progress on those stated 500 wells at all, or if you have any idea that what's happening there, it would be really helpful.

There is regular requirement of seamless pipes. However, we would have preferred if there was maybe a 5 or 10% increase, because then it gives us more assurance on pricing and on replenishment.

Despite a challenging economic environment in which government expenditure was low, we have managed to replenish our order book without compromising on the tonnage that we have dispatched on quarter-on-quarter basis. I think in the budget, we should expect some improvement in government expenditure, and then that will have a multiplier effect on the rest of the economy.

Noted. That's all from my side.

Thank you.

Thank you, shareholders, for participating, and thank you, Vikash, for organizing the call.

Thank you.