Thank you, [Helna?] .

Good afternoon, everyone. A warm welcome on the Jindal SAW Q2 FY27 conference call.

On behalf of ICICI Securities, I would like to thank management for giving us the opportunity. From the management side, we have with us Mr.

Narendra Mantri, Chief Operating and Financial Officer; Mr. Vinay Kumar Gupta, President and Head Treasury; and Mr.

Rajeev Goyal, Senior Vice President Corporate Finance. Without taking any minutes, I'll hand over the call to the management for their opening remarks.

Over to you, sir.

Good afternoon, everyone. I am Vinay Gupta representing Jindal SAW Limited on behalf of our management team, including Mr.

Narendra Mantri, Mr. Rajeev Goyal.

I'm delighted to welcome you to all to our Q2 2027 earnings conference call. Our sincere thanks go to the team of ICICI Direct for facilitating this call also.

Now let me now take you through the operational and financial performance of Jindal SAW and its key major subsidiaries for the second quarter of FY27 with a focus on the key developments that are shaping our business performance and future growth prospects. In today's presentation, we will cover three key areas: first, the financial performance which board has approved on last Friday.

This is for Q2 for FY27 and H1 of FY27; second, the business scenario and outlook; and the third, update on the new projects in MENA region. Through this discussion, we aim to provide you with a clear perspective on our performance, business priorities, and growth opportunities going forward.

Now let us first let me first present the high-level summary for the Q2 FY27 comparing it with Q1 FY27 and the corresponding quarter in the previous year. During Q2 FY27, the company delivered improved top line with gross marked revenue hitting ₹3,870 crore, which is up by 3% on quarter-to-quarter basis and 14% year-on-year basis.

However, operational has been compressed the EBITDA to ₹250 ₹254 crore down from ₹341 crore in Q1 of FY27 and ₹334 crore which was in Q2 of FY 2026. Below the operating line, finance expenses rose to ₹92 crore, which includes ₹15 crore negative forex impact.

Normalized finance cost to that modest of ₹77 crore. Finally, the profit after tax, PAT came in at ₹63 crore compared to ₹110 crore in Q1 of FY27 and ₹80 crore in Q2 of FY26.

This is net of a ₹30 crore tax credit received in the quarter. Financial performance on a standalone basis for H1 '27 and H1 of FY26: The complete company delivered improved top-line momentum in the first half of HO FY27, with gross revenues rising 13% year-on-year to ₹7,627 crore, up from ₹6,736 crore in H1 of the previous year, which is FY26.

However, operating profitability faced pressure, as EBITDA contracted to ₹595 crore from ₹894 crore in the similar period last year. On a positive note, finance costs fell to ₹163 crore from ₹239 crore in H1 of FY26, showcasing efficient capital management despite INR depreciation against the USD.

Ultimately, higher tax expense and lower operating margins impacted the bottom-line performance of the company. PBT finished at ₹178 crore, down from ₹412 crore, while the PAT landed at ₹172 crore compared to ₹443 crore in H1 '26.

A reflection of ₹6 crore tax expenses this half versus ₹31 crore tax credit last year. Overall, H1 '27 has delivered a increase in the revenue and lower finance cost, although profitability remained under pressure due to lower operating earnings and couple of other things.

On consolidated basis, this is we will now discuss Q2 versus Q1 of FY27 with Q2 FY26. On a consolidated basis, gross income increased by by FI by Just a minute.

On consolidated basis, our top line expanded by 8 0.8% sequentially to ₹4,518 12 crore from ₹4,476 crore in Q1 FY27 and rose 5.8% year-on-year basis from ₹4,264 crore in Q2 FY26. The EBITDA slipped to ₹312 crore from ₹420 crore in H1 in H Q1 of FY27 and ₹482 crore previous in FY26.

Finance expenses rose 15.7% sequentially of ₹17 crore to ₹125 crore from ₹108 crore in Q1 FY27, although remaining lower than although remained lower than ₹153 crore, which were logged in Q2 of FY26. PBT dropped to ₹14 crore after the adjustments of the joint ventures and compared to ₹15 43 crore in the previous quarter and ₹183 crore year-on-year.

Profit after tax is reported at ₹35 crore from ₹91 crore in Q1 FY27 and ₹139 crore in Q2 FY26. Notably, ₹24 crore tax credit caused that to sweat PBT by that amount.

On consolidation basis, our top line continued its our top line continued on a higher side, with gross income expanding by 7.4% to ₹8,988 crore. However, severe operating margin pressures impacted overall profitability.

EBITDA declined by 38.3%, leading to a 5.9 percentage point contraction in EBITDA margin to 8%. While a 27.8% reduction in finance costs down to ₹234 crore offered some relief, pre-tax savings, PBT after JV share fell 73.8% to ₹146 crore.

Finally, the operational slowdown, combined with higher tax provision, resulted in a 7. 78.7% EBITDA in profit after tax.

Now, in terms of our loan profile, indebtedness, as of 30th September '26, the company's standalone net debt narrowed to ₹2,245 crore versus ₹2,346 crore on 30th June '26. This includes long-term debt of ₹522 crore, which is NCD subscribed by LIC, and it is repayable in year '28, '29, and '30.

The net institutional debt on consol basis has reduced to ₹2,174 crore as compared to ₹2,473 crore as at 30th June 2026. The long-term, as at 30th June '26, the long-term debt was ₹532 crore only, including Abu Dhabi, US, and all.

Further, in June '26, CARE Ratings has affirmed CARE A1+ for short-term debt facilities, including commercial paper, and CARE AA with outlook stable for long-term debt facilities. Now, what is the analysis for these results?

Overall, while our revenue increased, profitability got impacted. The major reasons for this weaker performance are as under: Ongoing geopolitical tensions in West Asia have worsened due to recent escalations in Saudi Arabia, a region where we hold significant export order exposure.

The main challenge is not other order cancellation, but rather delay in shipping and revenue recognition. If these project delays persist, dedicated production facilities will remain underutilized and continue to drive up fixed and operational costs.

Then second, the ongoing global conflicts have driven up international and domestic logistics costs. This directly impact our operations, particularly because most of the sales contracts are structured on a delivered basis historically.

Surging raw material costs, particularly for coking coal, have squeezed margins in the DI pipe business. This pressure was further compounded by lower capacity utilization due to lower execution in water pipe business as softness in domestic water business continues.

This resulted in the impact on the profitability. The Abu Dhabi DI plant is facing a combination of cost overruns, underutilization, and delivery constraints, including difficulties serving customers who cannot be reached through truck-based transportation.

This resulted in lower production, sales, and impact on profitability. In the seamless business, while the API license reinstated in June '26 are for our eligibility for the key orders, though immediate financial impact remained limited in Q2.

The seamless pipe business is currently bidding on new orders to rebuild its order book and is witnessing the improvement in the backlog. Now to summarize the performance for Q2, the weaker performance appears to be the result of combination of geopolitical disruptions, continued weaker demand {oblique} offtake in domestic infra water infra segment, increased raw material prices, increased logistics costs, and other cost inflationary factors, and also supply chain constraints rather than a single adverse factor.

The impact is particularly visible in the ductile pipes in ductile pipes and seamless pipes businesses, where increased cost and suboptimal capacity utilization have impacted the profitability. Now, to mitigate or minimize the impact of the above risks to the businesses, company is positioning ourselves, and we are taking couple of we are now highlighting couple of pointers that how we should be positioning ourselves for the Q3 or H2.

The company has order book of confirmed order book of USD 1.135 billion, which approximately ₹10,700 crore. It further received letter of intent for approximately USD 575 million, which is mix of export and domestic business.

This these LOIs for USD 7 575 million, these orders are not from MENA region. The export out of 575 million constitutes $425 million approximately.

This is oil and gas sector. With this and on receipt of the order, our order book will be at approximately ₹16,200 crore.

The the the LOIs might get converted in next couple of weeks. The execution of these orders is likely to be from the month of February {oblique} March because we would be receiving steel accordingly.

Now another good thing is that post the board meeting on Friday, we have received another LOI for approximately USD 50 million. This is for exports to Southeast Asia.

If we add this 50 million further, this will be our total order book would be in the vicinity of ₹17,000 crore roughly. Now the existing job work order of approximately 6 lakh metric tons to Saudi has been delayed significantly, primarily because of the war in Middle Middle East.

While it has not blocked our working capital because it's a job work order, but it impacted the capacity utilization and revenue recognition. Now parties, including the buyer, are engaged to work out an out-of-the-box solution for transportation or logistics services.

If a solution works out, then you may see the positive impact on the capacity utilization, revenue recognition in next few months' time. Now on the seamless, while the API license is reinstated in June 2026, the company is bidding for new API orders very aggressively.

API business fetches better margin. We expect the impact of the same in next quarters.

The tie business may take some more time due to the micro and macroeconomic issues. However, we expect some export orders in DI business, where we could be able to reduce concentration of business in the domestic market.

Pellet business and profitability has been impacted and may remain impacted to some extent due to increase in the diesel prices, low Fe content in the iron ore, coupled with higher stripping ratio. We have seen reduction of current assets in Q2, and we expect further reduction in the inventory and receivables amounts.

This helps us to improve our liquidity liquidity position and thereby reduce bank borrowings. We are focusing on improved capacity utilization in all facilities, overheads absorption, cost control, and deliveries.

We are also keeping our eyes open on the capital allocation for capex, not only in India, but also in the MENA region. All these measures should start showing better results or demonstrate better volumes and thereby better margins.

We expect, as we had said last time also, we expect H2 to be better than H1. Now let us discuss about the MENA region.

The company initiated these projects when the region when the MENA region was stable. Our pipe manufacturing investments in UAE, Saudi Arabia were designed from day one to serve as permanent foundation for the region's essential energy and water ecosystem.

The economic fundamentals underpinning these projects remain entirely unchanged. Today, the project implementation is progressing well.

By manufacturing locally, we are mitigating international logistic risks, improving local content integration, which is ICV in UAE and IKTVA IVA in Saudi, and ensuring that critical utility infrastructure continued to build without disruption. Now let's talk a bit about our progress on of our seamless pipe plant in Abu Dhabi.

Jindal SAW proposed seamless pipe manufacturing project in KEZAD industrial area Abu Dhabi UAE is progressing through the initial development pre-construction phase. The project with a proposed capacity of 300,000 tons per annum and an estimated investment of approximately USD 330 million is intended to strengthen the company's presence in Middle East Middle East oil and gas market.

By securing a developed leasehold land with existing civil infrastructure, we have accelerated our construction timeline. Procurement of critical long-lead equipments is underway, supported by active LC's letter of credit and initial cash advances.

With financial closure projected in coming months, the project remains firmly on track to commence commercial operations in FY 2028-29. Jindal SAW's Abu Dhabi strategy reflects a deliberate move to establish a strong regional manufacturing hub by combining seamless steel pipes for the oil and gas sector and ductile iron pipe for water sector infrastructure.

This dual platform approach is strategically aimed at capitalizing on the Middle East long-term investment in energy security, hydrocarbon development, and water infrastructure, while strengthening customer proximity, enhancing regional market access, and creating a diversified platform for sustainable growth across the energy and water sectors. Regarding our pipe SAWP pipe plant in Saudi Arabia, we communicated earlier also that we have established a strategic joint venture in Saudi Arabia where Jindal SAW will hold 51% equity stake and Buhur of Kingdom of Saudi Arabia will hold 49%.

The joint venture envisages setting up two advanced pipe manufacturing facility, helical pipe and longitudinal pipe, with a capacity of 300,000 metric tons each, catering to the region's growing water infrastructure and energy requirement. The project is progressing well.

Land has been secured. LCs for long lead items have been established.

We remain focused on accelerating project execution, with interim financial closure expected on over the next few months. We recognize that prevailing geopolitical environment and heightened regional security concerns may create some near-term uncertainties around project execution, logistics, and investment timing.

Nevertheless, our approach remains guided by the long-term fundamentals of Saudi Arabia's energy and water infrastructure requirements. Beyond serving domestic demand, the facilities are strategically positioned to capitalize on emerging regional opportunities, including the potential for alternative energy transportation and export routes that reduce dependence on the Strait of Hormuz.

We remain committed to a disciplined approach to project implementation, while closely monitoring the evolving situation in MENA region. The Jindal SAW Middle East strategy leverages a dual platform approach to target critical investment in energy security, hydrocarbon development, and water infrastructure.

The company's Abu Dhabi hub serve as a controlled, high-end base for seamless pipe and ductile iron pipes, optimizing customer access, meanwhile, its Saudi Arabia joint venture focuses on localized longitudinal and helical pipes, creating a balanced, diversified corridor positioned for the sustainable regional growth. Now let's talk very quickly about our ductile iron pipe operations in Abu Dhabi.

Like regional conflicts in MENA has has disrupted operations at our Abu Dhabi facility. The facility remains highly impacted due to the war.

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 plant are restricted to customers in the countries which are working which are within the trucking range.

In this backdrop, Q2 of FY27 for Abu Dhabi they we delivered 29,000 metric ton pipes as compared to 34,000 metric ton pipes in Q1 of FY27 for the DI pipes. As of September '26, the subsidiary holds order book valued approximately USD 195 million for corresponding to 177,000 ton pipes, ensuring operational visibility for next 9 to 12 months.

This backlog is independent of Jindal SAW India's standalone order book of close to 17,000, including orders plus LOIs. Now about Jindal Hunting, a joint venture with Hunting Energy Services Private Limited Singapore in which Jindal SAW holds controlling interest of 51%, it generated revenue of ₹9.70 crore and a loss of ₹1.5 crore in Q2 of FY27.

This dismal performance is a result of suspension of API license, which is likely to improve in coming quarters with API license as sorry as the API license has been reinstated. Now the last about the litigation in Jindal ITF versus NTPC: This a legal conflict In this legal conflict, a division bench of Delhi High Court delivered a split con verdict.

Consequently, Chief Justice has referred the matter to a third judge, who has now been appointed. The next hearing is scheduled for January 2027.

This is from the presentation for today. We now leave the floor open for to take certain questions.

Mr. Narendra Mantri and Mr.

Rajeev Goyal are with me to address any of the questions. Thank you very much, and let's start the question-and-answer session.

Thank you for taking my question. The first question that I have is regarding the new LOIs, right?

Just wanted to know how firm are these LOIs and when an approximate date as to when are they expected to translate into some dispatches. The other thing is that can these orders kind of to an extent replace the affected MENA volumes at a comparable margins?

Can you come for the second question, then we'll provide let's say respond to your first after. Can you repeat the second question?

The second part of the question is that the LOIs that you've received already, the $575 million of LOIs, and majority of them being outside of UAE region, just wanted to know whether these will kind of replace the affected MENA volumes or the delayed MENA volumes at comparable margins?

We'll not talk about the margin at this point of time. Let me discuss two things which you rightly pointed out.

One is that first of all, we have now, after let's say receiving the additional LOI of $50 million, the total LOIs other than the confirmed orders are $625 million, that's one. Out of this, $430 million plus $50 million, let's say $480 million is export.

The $430 million is in CIS countries, and this $50 million is from Southeast Asia. Second point is that how confirmed we are for the sale order.

Eventually this is a process. Every buyer has their own systems and all.

When we receive the LOI, then from there only two-three things remains pending. One is, let's say, conversion of this LOI into a firm sale order, which is a legal thing so that you negotiate the legal thing and do start doing the things.

There is the possibilities of, let's say, not getting the order remain very, very low. Eventually we have already started booking steel for these orders also.

In terms of the production and dispatches, these production would start sometime in February-March, and because the LOI once you get the confirmed order in next couple of days or week, after that, the raw material which already been blocked, we expect to receive the raw material from January or February. Effectively these new orders, production will start against these new orders sometime towards the end of the year.

Having said about the MENA region orders, it's one of the largest order what we received in terms of volume, 6 lakh ton. Incidentally that the buyer is our JV partner in Saudi project also.

We are not replacing the capacity. For some time, the capacity might not be fully utilized.

What we are trying to do, we are trying to find, along with the buyer, alternative routes for transportation. If that works out or if the scenario in general improves, then our facilities would get booked very quickly.

Understood. Thank you for your response.

The other thing I wanted to ask is that there is also some imposition of anti-dumping duty on DI pipe imports into Saudi Arabia, just wanted to know your exposure to Saudi region, specifically for DI pipes, and can you explain the specific rates, if possible, as in the anti-dumping rate that would be applicable, if possible, on DI pipes exports to Saudi?

Basically, you are right that anti-dumping duty has been imposed by Saudi Arabia government on the Indian exporters. Good thing is that since we did not export pipes from India to Saudi, we are not into that anti-dumping duty imposition.

We are doing sale to Saudi Arabia through our Abu Dhabi subsidiary. This is not impacting us.

However, the other manufacturers in India, the duty is being imposed on them in the range of 16 to 25 to 30%, based on their export to this region and their pricing. That is something which is positive for us that we are not included in the anti-dumping duty liability.

To add one line here is that it's good for our Abu Dhabi facility, since because of the anti-dumping duty, the Indian producers the cost of the pipe, the profitability will reduce, thereby we can sell more pipes in Saudi Arab market from Abu Dhabi facility.

Understood. Okay.

Lastly, one thing I wanted to know is that we had mentioned that we have got some initial order placements from our upcoming SAW pipe facility at Saudi. I don't know if you've already mentioned it, but if you could just assign some approximate number as to how much order filling has happened for this plant?

You're talking about Saudi facility?

Correct. No,

no. It's a long process.

As we had mentioned previous call also, we have acquired land and the land development work is going on. The plant once it gets implemented, then it will go for inspection.

After that, once the approval is received, then only we can participate in the orders. Maybe '28-'29 is the time when we are targeting the commercial operation.

Prior to that, we won't get orders for this facility. Even though what can happen that our JV partner, he can maybe the moment we start the operations, because they are one of the largest EPC contractor in Saudi, maybe they can take the order and they can download the order on the Saudi facility.

At this point of time, there is nothing we have not secured any order. We don't have manufacturing facility operational there.

Okay. Just one last question, if I could push in.

There was something mentioned about a hold-up in terms of our Saudi DI pipe project in the presentation, just any guestimate as to when this is expected to kind of move forward? It will still be within the timelines, right, or will there be certain delays in terms of commissioning?

See, that facility in any case initially that facility was not a let's say complete back-to-back or integrated facility. It was kind of taking the semi-finished pipe from UAE and finishing it and doing couple of other processes in Saudi.

Right now, considering the Saudi scenario, we have put on hold that venture. In any case, it was a very small.

Till that time we finalize let's say our thought again, we would be serving that market from the Abu Dhabi only. That will otherwise also that was not adding to the top line or productivity.

These were the semi-finished pipe getting finished in Saudi and being sold in the Saudi market, which we will continue to do from our Abu Dhabi facility.

Sir. Understood.

These are the questions from my end. Thank you for answering.

Yeah.

Thank you.

Thanks for the opportunity, sir. Sir, our gross profit per kg, it has declined over the past few quarters from ₹51 to ₹41 per kg in this current quarter, reportedly due to an unfavorable product segment mix you were referring.

Given the current order backlog of 2.5 million tons that includes including as this LOI I am talking, 0.5 million ton, with approximately 55% is exports and Abu Dhabi operations, how should we assess the quality and profitability of the order book? Over the next 12 months, what trajectory that do you expect for gross profit to improve, and what could it return to, when it will return to that the ₹51 spread which was reported in last year?

Sailesh, you are right. Because of geopolitical situation and other domestic market situations, profit margins per kg has reduced drastically, which is reflected in the numbers also.

What we see that the new order booking other than the MENA region and the execution possibilities are much stronger than what we are experiencing right now in the MENA region, we are looking for better margins and our target is to again reach to that level what we were in '25. This is the endeavor of the company management, and we are seeing that from Q3 onwards, we may see some upward trend in terms of margins also because this new orders will change the product mix in the time to come.

Because majority of the orders are coming from the oil and gas sector and exports, again export which is executable. It will improve the product mix, which will lead definitely to the better margins.

We can expect Q3, Q4 onwards that margins will be moved towards double digit and we expect that very soon this situation will be same what we were doing few quarters back.

Okay. Great, sir.

Sir, our effective utilization is around 67%. Our effective capacity, I am taking 2.3 million tons.

By when do you expect the utilization will reach 80%, sir? Either in third quarter or fourth quarter?

No, 80% utilization and all, all depends on the execution of multiple orders. In the best case scenario also, our execution level was somewhere 75%, not crossing that.

We achieved the highest volume somewhere in '24-'25, when we achieved 1.8 million tons. What we feel that reaching to that level of execution will take time.

However, improvement in the execution, we are expecting Q4 onwards definitely.

Sir. Sir.

Sir, one question that the LOI we have received ₹6,000 crores from non-MENA market, is this fully FOB order or?

No, generally the trend in the export market is not FOB. It is generally a CIF where the freight is also included.

Since current situation is more volatile, we have taken a sufficient cushion about the pricing of all elements which is on our part. We have taken care in our pricing, and it is very well taken care of.

Okay. Sir, in the same region, do we expect in next two-three quarters more sizable orders in the same region?

How strong is the current pipeline?

Current inquiry levels are quite high and we are participating in all large inquiries and we are hoping might be things may crystallize. As of now, inquiry levels are high everywhere, oil and gas and water sector, especially in the export market.

Okay. Sir, one last question.

Sir, can you provide update on performance of key subsidiaries, particularly that US and Abu Dhabi? Could you please talk about how it has performed in terms of operating profit level?

In Abu Dhabi, as Vinay ji mentioned in his initial remarks that because of MENA region situation, the Abu Dhabi facility is operating at around 50% utilization level. We achieved 34,000 ton in a quarter, and against I think 43,000 ton.

In that scenario, because the situation is again worsen in this region, we are able to maintain that run rate. We are hoping because of this anti-dumping duty on Indian exporters in Saudi, we may get the benefit of it and we may increase our supplies to Saudi, which will definitely improve the execution in Abu Dhabi facilities in the coming quarters.

Abu Dhabi facility is contributing at EBITDA level positively, though the EBITDA margins have reduced because of the underutilization of capacity. The US facilities, which are under Jindal SAW fold, they are performing well.

They are contributing positive. They are largely in job work areas where double jointing, coating, and some helical and other activities we are doing in various entities in South US.

These entities are contributing positive.

Okay. Compared to last year, is there any improvement that you see, sir?

Their performance is quite consistent. US entities performance is quite consistent.

However, there is a decline as compared to last year in Abu Dhabi facility because of Middle East situation.

Yeah. Okay.

Thank you, sir. Thanks.

Yeah.

Hi. In your presentation, you have mentioned that export volume is 41% of your total order, but value wise, it is 28%.

Are we getting substantially reduced realization per ton in export market or is my understanding wrong?

No. Volumes are including the job work order of roughly 6 lakh ton, where the volumes are high.

However, this order is job work order where only the job work value is included. That's why the value in terms of value, it is 28.

However, in terms of quantities or volume, it is high.

Will it not be better if you put this separate slides to the presentation so that this confusion does not. Overall for manufacturing, export and domestic margins are almost same or is there any difference between the two?

In general, export orders are more profitable than the domestic margin in terms of water. Oil and gas, they are pretty similar.

This 6 lakh tons which you are referring to is pure job work order, that's why its margin is low?

It's a water pipe order. Job work is generally, basically, the raw material cost is not included.

That's why the value is lower.

Okay.

The raw material is being supplied by the buyer free of cost to us, and we are doing the value addition, making the pipe and selling them. It is only the conversion and the margins which are included in the order.

That's why the value in terms of value, it is low.

I would request if competitive pressures do not forbid you, then you make some separate disclosures like these orders in the presentation.

Noted.

Thank you, sir.

Namaskar, sir. Thank you for the opportunity.

Hope I am audible.

You are audible Saket.

Yes. Yes.

Thank you, sir. Sir, firstly, in terms of the tonnages part, how are we seeing our tonnage schedule for H2?

What kind of volume growth are we expecting comparison to what we did for FY26 in terms of the only pipe segment?

In terms of pipe segment, we are expecting some betterment in terms of volume in pipe segment specifically because till H1, volumes are higher than the previous H1 figures. We expect that the same momentum should continue in H2.

Overall volumes in FY27 should be higher than FY26 volumes.

Yes. Sir, when we look at our realizations also, since the volume was up, but the realization was not commensurate to that and hence the margins are also lower, taking into account the existing order book, excluding the LOI one and the recently added orders, are we expecting the margin profile for the pending order book or which is to be executed for H2 also remaining in the same vicinity as was for the quarter two?

In H2, we are expecting little bit change in terms of sales mix because this quarter sales mix was all together towards water sector, which is in general a lower margin and specifically in domestic market where now oversupply situation is there, due to which margin pressures we are experiencing. However, in the coming quarters, Q3 and Q4, we are expecting some improved volumes in oil and gas sector, which will definitely lead some better margin or margin improvement as compared to H1.

Okay. This EBITDA margin should have bottomed out in this 6.8 percentage level?

Last last year also when we had the December quarter, we had double digit margin, and margins were always closer to 10%. Can Q3 Q3 itself see the reversal in and improvement in the margin or how should we pencil in the EBITDA margin profile for H2 taking into account what H1 were?

Right now, we can comment on H2 blended because things are so volatile. We are working out certain modalities to export even the job work order also.

We cannot comment on exact numbers as of now, but H2 should be better than H1. That is something which we are sensing right now.

Right, sir. For the pellet segment, sir was commenting about some factors that have led to the decrease in the margin.

Can you elaborate what exactly are the troubles in the pellet segment, and I think so some EC clearance was also pending for enhancement of the capacity? Where are we in terms of pellet performance going ahead?

In pellet, as Vinay ji mentioned in his initial remarks, that

Saket, in pellet, the kind of mines which we have, we have high stripping ratio and low grade of iron ore. Because of that, our margins are under pressure now.

The depth of the mine has gone up, and we are working how to enhance or maintain the margins there. As far as EC is concerned, the application has already been made, and we are discussing with the MOEF for getting their final approvals on whatever application which we have made.

The EC enhancement technically, it is not there because the ROM will remain this at the same level because of high stripping ratio, our total overall mining quantities has increase including the OB. Otherwise, ROM or the iron ore quantum will remain same whatever we were doing in last year.

Ma'am, I will only conclude to what Vinay sir was this question, if you may allow. Sir, if I may conclude?

Please continue. Please.

Yeah.

Yes, sir. Sir, in terms of the pellet volumes, that are on the higher side, and what we understood that pellet being a commodity, the prices have also trended up.

The contribution margins have also been lower for the first half or what is the color on that on the same, sir?

Okay. As far as the selling price is concerned, it is linked to the market conditions and other things.

When I say that the there is a higher stripping ratio or low grade ROM, that means the yield from the iron ore is lower, so that result into the higher operating cost. That is why there is a low margins.

By making the other sources of our acquisition of similar kind of material, we are trying to reach to the level of pellet generation whatever we did in the last year.

Hello. Hi, sir.

Yes. I had a couple of questions on demand.

One is you highlighted in the export market you are looking at good demand undercurrents. Wanted to know which are these countries where ex of MENA where you are getting a good response?

We have already highlighted the LOIs which we have received from CIS countries and South Asian country. Please allow us to give some space till the time we receive the confirmed PO.

This is a bit sensitive. These are the LOIs not from MENA region.

CIS and Southeast Asia, right? Okay.

Yeah, $430 million CIS, Southeast Asia is $50 million.

Got it. Perfect.

Sir, just on the domestic front, we've been hearing that there are fund releases in JJM, right, Jal Jeevan Mission, where ₹7,000 crores has been released. What is happening on the ground?

Are you hearing about these releases or are there any new orders that are being placed? Okay.

Funds release is happening in gradual manner, and that is why in our presentation, we have said release or reduction in the levels of receivables and as well as inventory. We have seen funds getting released.

Yes, albeit it's slower. It's not like clearing of the existing payable by the government, that's one.

Second thing is that for some time, the orders would not be issued under Jal Jeevan Mission scheme, it would be from the state government side. State will raise the funds, they are issuing the orders, they will issue the orders.

Orders are coming, but, yes, it is through the state.

Okay. Got it.

How positive are you on these orders? Do you think this can, maybe a good chunk of your order book over the next maybe six to one year or two year period?

See execution is the key at this point of time. For example, we would still have all our ductile facilities fully booked for almost one year.

The challenge is not the order, the challenge is that the execution of the project on ground. Because we supply majority of our pipes to EPC contractors.

EPC contractors would be doing work across the country. Maybe they are receiving money in one or two states, they are getting the money getting delayed in few states.

EPC at this point of time the business is not being fully implemented. That is where some leg impact has come, and the value chain has let's say got impacted.

It's likely to be reversed, likely to get improved gradually. It will not happen overnight.

Orders are there. We are fully booked for all facilities.

Got it. That was very helpful, sir.

Thank you so much.

Thank you.

Thank you very much for all the participants. Hope that we could clarify, provide our perspective on the business and the scenario in India, overseas.

We will be happy to take the questions. Our team is there.

Mr. Rajeev Goyal is there.

You can approach to them one-to-one. Thank you very much once again for joining this call.