Thank you, sir. Good evening, everyone.

On behalf of ICICI Securities, I welcome you all. I would like to thank the Jindal Saw management for giving us the opportunity to host their call.

From the management side, we have with us Mr. Narendra Mantri, Chief Operating and Financial Officer, Mr.

Vinay Kumar, President and Head Treasury, and Mr. Rajeev Goyal, Senior Vice President and Corporate Finance.

Without taking much time, I'll hand it over to Vinay sir for his opening remarks. Over to you, sir.

Thank you, Vikas. Let me start the call.

Good afternoon, everyone, and welcome to Jindal Saw Q3 FY26 earnings call. We wish everyone a very happy and prosperous New Year.

I, on behalf of Jindal Saw management, would like to extend our sincere appreciation to ICICI Direct for their support in coordinating today's call. The unaudited financial results for quarter 3 of fiscal year 26 were approved by the board of directors at its meeting on January 16, 2026, and in compliance with regulatory requirements, these results have been released to the stock exchanges.

With that, you have had an opportunity to review the results. We now provide an update on the operations of the company, the subsidiaries and joint ventures.

As you can see, the performance in quarter 3 improved relative to the previous quarter of the current year, but still lags behind the comparable quarter of the previous year. The improvement is primarily on account of higher volumes and improved productivity.

The pipe sector continued to see strong demand signals across both domestic and international markets. The company sustained a healthy order backlog, including significant projects for the water sector, which provides strong visibility for growth potential.

The pipe business reported a rise in its total order book volume, reaching 19.64 lakh metric tons in December 25, as compared to 19.25 lakh metric tons in September 25. In Q2, we announced securing an export contract to provide approximately 6.22 lakh metric tons of SAW pipes for a job order arrangement for Saudi Arabia.

Production of this contract commenced in quarter 3. Q3 of FY26 saw the start of production for our new seamless plant piercing mill.

We are now stabilizing the production on this line. This enables the capacity increase to approximately 4 lakh tons per annum, strengthening our ability to provide fast, reliable services and for most of the product sizes.

The water pipe business, primarily ductile, continued to face challenges in Q3, despite a strong order backlog of over a year. Out of the total order backlog, total order book of pipes aggregating to approximately 19.64 lakh metric tons, DI pipe order book is approximately 40%, which includes exports and supplies under Jal Jeevan Mission as well.

Importantly, our overdue receivables from EPC customers working under Jal Jeevan Mission are approximately 350 crore only, and majority of these are backed by adequate security. While market demand remains strong, business related to water pipes has been impacted significantly by protracted payment timelines in the Indian water sector.

The lengthy receivables days associated with public infrastructure projects continue to pose a major challenge for supply chain stability. The company is navigating complex, volatile geopolitical economic conditions, including unanticipated tariffs and challenging water sector project implementations primarily in India.

By way of proactively strengthening our business resilience, we are taking decisive strategic action, such as optimizing our Indian product portfolio, rebalancing our sales mix to optimize export and domestic opportunities. Q3 demonstrated an improvement over Q2 of FY26, with green shoots emerging in both domestic and export markets.

It appears Q2 marked the bottom of the cycle. We maintain a positive outlook on government initiatives, particularly the upcoming Union Budget, where we anticipate continued support for the Jal Jeevan Mission, laying a strong foundation for future business growth.

We view current market conditions as transient, supported by our robust order book backlog, strong liquidity position and effective debt management. The company's ample working capital lines from banking system further ensures we can meet all operational requirements efficiently.

Now let me address the financial highlights of Q3 and for nine months period of FY26. On a standalone basis, the company registered total income of rupees 4,157 crore, representing a sequential increase over Q2 of FY26, which was 3,409 crore, but a decline against Q2 of Q3 of FY26, which was 4,553 crore.

EBITDA for Q3 FY26 stood at rupees 527 crore, showcasing a significant recovery from Q2 of FY26, which was rupees 335 crore, though remaining lower than Q2 of FY25, which was 882 crore. PAT for Q3 for this year was reported at rupees 227 crore, significantly higher than Q2 of this year, which was 79 crore, but is still lower than the Q3 of FY25, which was 477 crore.

On consolidated basis, total income stood at rupees 4,960 crore for the quarter, which is for the current Q3, up from rupees 4,264 crore sequentially, which is quarter to quarter, but is still down from rupees 5,293 crore year-on-year basis. EBITDA improved sequentially to rupees 632 crore in Q3 FY26 from rupees 482 crore in Q2 FY26, though it remained below rupees 961 crore reported in Q3 of FY25.

Q3 FY26 PAT was rupees 248 crore, up from rupees 139 crore in Q2 FY26, but still down from rupees 479 crore in Q3 of FY25. On debt side, as on 31st December 2025, the standalone net debt narrowed to rupees 3,154 crore versus rupees 3,310 crore as on 30th September 2025, which includes the long-term debt of rupees 534 crore only.

The balance is working capital debt. On the consolidation side, the net external debt has reduced to rupees 3,346 crore as compared to rupees 3,856 crore as on 30th September 2025.

The long-term institutional debt is only rupees 690 crore. After having discussed the financials and the prognosis for quarter 3, let's also talk about the operations of our subsidiaries and joint ventures.

In UAE, the entity, which is Abu Dhabi Ductile Pipe Production Plant, the entity maintained steady operations in Q3 of FY26, delivering approximately 52,000 metric tons of corrosion resistant ductile iron pipes compared to 58,000 metric tons in the previous quarter. As of 31st December 25, the subsidiary holds a robust order book valued at approximately 235 million dollars, which is for 215,000 tons.

This ensures operational stability for next 9 to 12 months' time. The backlog is independent of the parent company standalone order book, which stands at approximately USD 1.48 billion dollars.

If we add, it would be somewhere around 1.7 billion dollars. Now you would note that Abu Dhabi entity is a premium supplier of ductile iron pipe to almost all the countries in MENA region.

This is the only entity which produces the largest size pipes, going up to 2.2 meters, which no other entity in MENA region, even India, produces. Now coming to Jindal Hunting, it's a joint venture with Hunting Energy Services Private Limited, Singapore, in which Jindal holds controlling interest of 51 percent.

This entity generated rupees 137.9 crore revenue and rupees 44 crore profit in nine months period ended FY25, which is an increase from rupees 130.7 crore of revenue and rupees 38 crore profit in the previous year. Now a snapshot about the Jindal ITF versus NPPC case.

The initial arguments by Jindal ITF took place in January 26 in front of the double bench of Delhi High Court. The hearing has now been fixed for 2nd February, where NPPC will make the arguments.

Now the updates on our new project in GCC region. As you know that Jindal maintains a dominant position as a leading supplier of pipes to MENA region, with the majority of our export volumes dedicated to this market.

To ensure timely delivery and superior quality, we established the first ductile iron pipe facility in Abu Dhabi, UAE, which is now in operations for over a decade. In response to MENA region countries incentivizing local manufacturing as part of their respective investment statement, the board of the company in prior meetings approved strategic investments to safeguard the market share.

Key initiatives include establishing a wholly-owned seamless pipe plant in Abu Dhabi alongside an onset of joint ventures for a SAW pipe unit and a ductile iron pipe facility in the Kingdom of Saudi Arabia, with 51 percent ownership in both the projects. All these projects are expected to be commissioned in next 24 months approximately, that is by February 28, and we can expect the impact on the financials from FY29.

Now let us appraise you about the developments in these entities. With respect to seamless pipe plant in Abu Dhabi, the company Jindal is expanding its Middle East footprint with a new seamless facility in Abu Dhabi, KIZAD zone, establishing through its step-down subsidiary named Jindal Seamless Pipe Manufacturing LLC, with initial USD 20 million equity infusion.

The land has been secured near the existing ductile iron pipe plant, and the long lead equipments are being identified, order placement has been initiated, and the lease deed has been signed and executed for the leased land. Discussions are going on with banks for financial closure to serve the region's requirements.

It may be noted just leased land is a developed land. There was already an existing unit, we might save some time in terms of implementation of the seamless pipe project.

Now for SAW pipe plant in Saudi, Jindal Saw Limited has established a joint venture with Buhur in the Kingdom of Saudi Arabia to develop a state-of-the-art SAW pipe manufacturing facility. It is 51 percent step-down subsidiary, and this entity makes a key strategic expansion.

Development is underway with lease agreements for the site being identified and finalized. JV partners have infused initial equity.

For the ductile pipe facility case, JV agreement has been signed by the partners. Other corporate actions are in process.

Now before concluding the presentation, let me summarize. Having experienced a dip in the first two quarters, the business has gained momentum in quarter three and is poised for continued growth.

To drive global market penetration, the company is intensifying export efforts, building foundational demand for its upcoming expansion into the MENA region. Our sales funnel is expanding, resulting in a strong and growing order book, with significant interest from global and local markets.

Our long-term debt structure remains highly sustainable, featuring a standalone exposure of approximately 536 crore. Notably, 500 crore is attributable to the LIT-backed entity, with a well-staggered redemption schedule between 2028 and 2030.

Trade finance and working capital are crucial for our day-to-day operations, driven by production levels and market conditions. We are dedicated to reducing debt cost and optimizing cash flow, thus committing capital expenditures across the majority of our Indian operations.

This strategic spending is designed to enhance operational efficiencies, modernize assets, reinforce regulatory compliances, and ensure our readiness for dynamic market conditions. Now before I conclude, I would say our efforts are focused on ensuring long-term viability and transforming our structure to withstand challenges.

Thank you very much. I now 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. Thank you very much.

Thank you. Congrats for the good set of numbers.

Sir, in the last earnings call you indicated that seamless pipe production will ramp up to 90,000 tons per quarter in 4Q from current run rate of 50,000 tons, given by the new piercing line. Given that macro condition in seamless pipe, that is very weak, could you explain the demand visibility and the order book that is giving you confidence in ramping up the capacity, and how the second piercing line changes your ability to simultaneously cater both lower and higher dia segments?

How the product mix will change? Also can you please talk about the export opportunity share in the seamless, which will be helping increasing the utilization levels?

Let me address the question in such a fashion so that it becomes sequential. First let's talk about the commissioning of the piercing line.

The piercing line offers, let's say, it improves the production capacity in the larger sizes. Now we are capable to produce almost all the sizes, which improves our productivity as well as capability to deliver the product in time.

Now in terms of, let's say, the order visibility and all those things, this is specifically for India. It depends, how much tender the ONGC and other people are floating.

As of now we have visibility, but we have visibility. There are a few tenders which are likely to come, but the current order book is comparatively lower than the previous order book, previous quarter's order book.

We are expecting few tenders to come, which will help us to increase our production and sales of seamless pipe in, let's say, next year. Now, as I mentioned, that we have improved our capability for providing the production time, full range of product.

This would help us in terms of increasing our market share as well as the overall productivity. What kind of growth that you expect in FY27?

What kind of growth? Growth.

Growth, okay, I would say this is subject to the business coming in the market. We believe even if the business is improvement, but somehow previously we were restrained for participating in the business where we had capability restriction in terms of the sizes.

To that extent the growth will surely come. how much growth will really depend on the orders to win, but surely now we have capability to, let's say, service the market with full production range.

Sir. Also can you provide the volume breakup we reported in 3Q?

We have reported around 3.7 lakh tons. Can you give the breakup in ferrous DIA seamless?

Also, given that DA demand remains challenging, as you highlighted in the opening remarks, could you share the current, I missed it, could you please share the current DA order backlog, both domestic and exports mix, and also all the steps that we are taking to de-risk dependence on domestic demand and through exports or any other opportunities there to improve the DA pipes volumes?

As we mentioned that we have a total order book in the pipe, we have a total order book of 19.64 lakh tons. This is the total order book.

In this total order book we also mentioned that the ductile comprises roughly 40%, which works out to roughly 7 to 7.5 lakh tons. In this, the total, I would just, because ductile remains important for all, the total order book in terms of value for ductile is around 560-570 million dollars, in which roughly 45 million dollars is export.

Okay. Eventually, if I say, let's say a year ago, we were not focusing so much on the export market for ductile from India.

Primarily, we used to service it only from Abu Dhabi. Now we have started looking any export potential, which we were earlier ignoring because the domestic market was very much.

Okay. That's why we tried to cover in our phase that we want to now, let's say, strategically we want to see that if the domestic market continues or struggles, we should have export potential in the ductile over and above the Abu Dhabi facility also.

This gives you some indication that today we have roughly 45 million dollars export order. We are creating capacity because in ductile for export you need to, let's say, do extra effort in terms of creating your production line and also for, let's say, the logistics.

All those things are being done, and hopefully maybe in next one to two quarters' time we would increase our export share from India irrespective of the domestic market.

Okay. That is great, sir.

Sir, one last question. In the standalone, last year we reported around 17 lakhs.

With the seamless capacity addition, what could be our peak achievable volume number in pipes, only in India I'm asking? Also, our gross profit to EBITDA conversion last quarter it was 25%.

You said there will be improvement. It has increased to 30% in 3Q, as you guided.

Our peak conversion rate gross profit to EBITDA was around 40% we reported in FY25. How do you see the trend in the coming quarters?

Because whatever the efforts that we have taken in DA COCO facility to reduce the conversion cost, that is not fully reflecting because of lower scale in DA. Is there any other— so now we are saying volume will improve in DA.

Is there any other measures that we are taking to reduce the conversion cost and fixed cost to improve our EBITDA margin? By when do you see our EBITDA margin crossing 15% plus without other income I'm asking?

Last quarter it was 14.4%.

I appreciate your question. See, this is the period when the things got distorted.

We were doing very well, if I can see, our EBITDA was in the vicinity of 19 to 20% in December 2024, which came down to 12.7% in December 2025. Now there are a lot of factors which had actually contributed to this negative growth negative number by almost 6 to 7%.

The correction is done, and let me give you high-level pointers instead of going into, let's say, which process will contribute more or what cost cutting can happen. Number one, that the company has, as if you are tracking the company, company has the capability to produce at various locations.

We have done, I think, 1.7-1.8 million tons in previous year. We can, without increasing additional capacity, I'm not saying we were shrinking, you know.

Let's say if I'm not putting any new plant of any of the product, we can easily go to, let's say, 2.2 million tons.

Okay.

Now this 2.2 million tons— Including

seamless capacity?

We are talking about now, well by sitting in January, we are including everything. What I'm saying is that it might not happen next year, because the situation, which...

Yeah. Okay.

In terms of, let's say, can we produce, can we demonstrate that we can go up to whatever we can go? We believe that we can go to 2.2 million tons without adding any additional production line or whatever.

If you are producing at that level, the productivity improves, the cost already comes down, and whatever measures we have taken in last so many time and we are doing in terms of debottlenecking, cost cutting, efficiency improvement, modernization, all that contributes. Whole problem comes when you are not using your facility in an optimum way for whatever reason.

In summarized form, we dropped from 19.5% to let's say 10% in September 25, and there is an uptick of almost 300 basis points in the current quarter. This will be a slow journey because we are in a business where we are, even though we are not supplying directly to the government, but we are in the business of supplying essentially to government through the EPC now.

It will be a transient period, but we are hopeful and let's wait for 1st of February. If everything goes well, the situation will start improving for us, and then we can also tell you, how much improvement has come on account of production, productivity, cost improvement, all those things.

Sir. Thank you, sir, and I wish you all the best.

Thank you.

Hi, good evening, sir. Am I audible?

Yeah.

Hi. First question, just to get your qualitative view on what's happening in the Jal Jeevan Mission, what are the expectations here on?

Because recent news indicates that there had been some monitoring of on-ground developments that have been there to basically understand where the gaps have been. From here, what's your view on revival of the government spend for the projects, and what are the expectations from the budget as well?

Are we likely to see a sharp decline in budget allocation for the scheme? Secondly, what is the run rate that we are targeting from the seamless pipe unit on a quarterly basis from Q1 onwards?

To answer the first question, Shweta, I think whatever you are reading, we are also reading the same. The same newspaper we read, what you read.

That's number one. Number two, I think let's not hazard and guessing what the government is likely to announce in the budget.

It's now another 10 days' time or 12 days' time, whatever, till 1st February. Let's wait for that, because once the budget announcement is done, because the industry or the chamber, they represent to the government, they make their noises and all.

It's very difficult to, let's say, project what they are thinking, what they want to do. At least the good thing is that they have started buzzing.

Even though they have cut down the 67,000 crore to 17,000 crore, but at least 17,000 crore is likely to be disbursed in some time, a couple of months. It is important to see what they want to...

what they would announce on 1st of February in terms of whether the scheme period is getting extended, what is the amount. I would say, let's say I'm speculating, out of 67,000 crore, 17,000 crore they have now said, they will disburse.

Even if they would confirm 50,000 crore allocation for the next year, that's a very welcoming statement, means now even if it's a lot of monitoring and control and all those things, they would, but still they would release the money, and the circulation, the whole supply chain, which has virtually stopped for the Jal Jeevan Mission will start. That is my response to the question number one.

In terms of seamless, basically we are not creator of demand. We respond to demand.

We always try to see what are the business potential in domestic market and export market as far as seamless is concerned, since we are talking seamless. One of the market for Indian seamless producers, export market for Indian seamless producers is U.S., along with that is Canada.

We don't service the Middle East from here, from India, and we are still supplying to the U.S. despite the tariffs, means that India is competitive and we are still exporting to U.S.

Now it has to be seen that how much U.S. will budge, and our people are now trying to, let's say, explore other export markets as well.

Because we are setting up the seamless pipe mill in MENA region, we are trying to, let's say, explore opportunities for supplying there also, so that by the time we are in production, we are already present there. Because so far the market was good in India and U.S., we were focusing on that.

The only thing what I can say, I don't know how much we'll produce, because it will be, as I said, that we respond to demand instead of creating demand. We are capable to produce.

We are capable to supply. Putting a number to this is a guess.

Understood, sir. Thank you.

Next question from my side would be, you mentioned something in your opening remarks that the implementation of seamless pipe unit in Abu Dhabi could take a longer than expected time. I missed your full remark on that.

Could you just explain that a little more?

Basically, as in any part of the world, if you are setting up a greenfield project, the first important thing is, let's say, land. In a lot of places the lands are not developed, and it takes considerable amount of time and cost to develop that land.

For example, there are, let's say, you have to fill the land or whatever you have to do. Eventually, fortunately, the leasehold land what we have signed with KEZAD, which is a local authority, land authority and all, on this plot of land there was already a manufacturing facility, which manufacturing facility further moved out.

They perhaps went into bankruptcy, whatever, and there are some sort of structure is also built in, and we could get this land through auction, and along with the structure, this saves some time. We need not do the development on this land in terms of filling the land or doing whatever.

There is a boundary already available. Some, not 100% sheds is available, but even a good amount quantity of sheds is available.

This will reduce some of the implementation time. Because we are already a seamless pipe producer, we know what equipment will have to go, who will supply and all.

Our teams are already in constant discussion and negotiations for those. We have inducted 20 million dollar equity in the company for payment of the land and also for making some advance payment to the equipment.

We believe that we are in advanced phase of initiation of the project, which gives us confidence that we can complete this project, let's say, within two years' time.

Understood, sir. My last question, of the 378,000 tons that we have done in India this quarter, what would be the proportion of DI pipes?

I am just trying to understand when you say that the order backlog is more than one year, what could be the oldest order that has been lying in the order book but still not meeting execution?

Because we don't give the product-wise, let's say, the pipe-wise breakup, but I would say that the ductile sale in this quarter is comparatively higher than the Q2. That's one.

Secondly, in terms of the backlog, we have already sounded that we have backlog of almost one year, which is 40% of the total order book, and you can calculate it, roughly 750,000 ton of order we still have, which has roughly 45 million dollars of order from the export side. This has a reasonable amount of the orders from the EPC contractors, which are backed by JJM.

Now the good... if you are tracking the sector, there are state governments, which are...

the center has asked states to start working, initiating their own fund for investment and start giving the orders. Now a couple of business opportunities are coming, a couple of businesses are coming, which are not backed by JJM, where the funding is being organized by state and will be given by them without going to the central government.

All those things are coming, and we expect to get our proportionate share from the new business opportunities, which are not backed by JJM, and on the top of that, if the JJM issues got sorted out, this order book execution will be much faster.

That's it. Thank you so much for your time and good luck.

Thank you.

Hi. Thank you for taking my question and many congratulations for good numbers.

Sir, I was pleased to see that the debtor turnover has improved this quarter compared to the previous quarter. Are we starting to see the receivable days come down again?

Was this primarily due to soft pipes and the job work orders, or are we seeing improvement in DI pipes also? I'll get to my second question after your first answer.

Okay. Abhishek, thanks for the question.

Eventually, this is a routine thing. Eventually, see, we do export, we do import.

Our exports are 30%. Sometimes the retention monies and some money gets stuck because of retention or contractual advance, and that's where it get reflected in receivables.

We have received the retention monies or money which was stuck as a user's process. That is, and if you remember, if you see that we have said in our preface that trade finance is an integral part of the pipe business.

The only thing what we can do is optimize, improve the system, reduce the cost. It can—I don't think this can come down to almost zero unless we are doing the business only against advances.

It's a process. We constantly keep doing efforts in terms of collections, in terms of securitization and all those things.

Yes, there is improvement, and unfortunately the ductile business is not being done in the way it should have been done. We have capability, capacity.

If we are selling lesser pipe, the utilization is coming, and the new utilization we are trying to secure so that it is not going into the overdue bucket. That's what it is.

Thank you for that. Second question is regarding the follow-up of first funding.

You have a very healthy DI order book backlog, and now we are dependent on the EPC players to kind of do the call for the pipes, and then the EPC is dependent on government to release payments. Is it that your machine in DI is now stuck because of your order backlog, or can you take new export orders or new— because just wanted to understand if you'll be able to take new orders and execute them, or you are stuck with these backlogs.

Let's put it this way. This is how the business is done globally.

The ductile business globally is done through EPC contractors. If I am exporting, I am also exporting only to the EPC contractors.

This is how. It's not unique to India; it's a global business.

That's one. Now, India was doing very well for last 15-20 years in terms of the, let's say, the water business, whether this administration or even the previous administration, the focus on the urbanization and the water was very prominent.

It somehow, it got jammed because of X, Y, Z reason, which is known to everyone. That's getting delayed.

If you ask with this perspective, we don't think that it's a dead end. We think it was a pause, and it may be good for our future, it may be good for our governance and everything.

Once it is reset, the things might be done in a much faster way. Now coming to your second question that primarily you are saying do we have alternate markets in terms of whether we can do more domestic, more exports, which export market, and all.

Now we are the only supplier as of now from India who has manufacturing facility in India and Middle East. Of course now our group company is also going global.

They are setting up the plant in KSA. Effectively the whole process we mentioned also, that whole process of setting up a ductile iron pipe plant in Abu Dhabi way back in 2012, 13, 14 is catered to the MENA region growing market from the backyard of MENA region, which is, supply anywhere in the MENA region from UAE or Abu Dhabi.

Now having said that, Indian market was growing very rapidly, and the testimony to that is that India, which had only two or three producers of ductile pipe, now they have more than half a dozen ductile players. The capacity is more than 4 million tons, with used to be million tons.

The capacity, so much of capacity will come when there is demand. It's a recession.

The things will correct. We have to give some time, and hopefully every player will do better.

Till that time, you have to be adaptable to the changes and make the change in strategy. The change in strategy is while we were not looking at the export market aggressively because the domestic market, we were not able to service domestic market efficiently because of the high demand.

Now we are looking to the export also. We don't want this to be a permanent issue.

For that, we have suffered for some time. For example, if we have capacity of, let's say, close to 7 lakh tons, we can do, let's say, close to 160, 170, 180,000 tons per quarter.

We are reduced to roughly, let's say, 100,000-125,000 tons per quarter. Do we want to stay here?

No. We have three plants, we are working overtime.

We are adapting to the changes, we are working on the strategy that how to take it forward from here, how to run all the machines, how to increase the production and productivity.

Okay. Thank you so much for that, sir.

Thank you.

Am I audible, sir?

You are audible. Thank you very much.

Yep. Thank you very much, sir, for this opportunity and many congratulations for good set of numbers.

Sir, just wanted to understand first upon the interest cost. We have been seeing a decline in our interest cost since last two quarters.

How should one look at going forward and what was the reason of the decline?

Basically the hybrid interest cost, the absolute amount has increased primarily because of— Can you hear me? I think there is some disturbance.

No, I can hear you, sir.

Okay. The utilization has come down.

Overall business, as compared to last year, is a bit low. It's echo of my own voice.

If you can hear me, sir, let me continue. I can hear echo of my voice.

It is the interest cost, for the rate of interest, hybrid interest, rate remained the same, but the absolute number has come down for two reasons. Number one, lesser utilization, and number two is some negotiation of the cost on account of, let's say, the instrument, which is letter of credit, bank guarantee and all.

Otherwise, broadly the interest rate absolute—the average percentage of my interest cost is broadly the same. Long-term debt has come down.

It is now in the vicinity of only...

Okay. How should one see it going forward?

I think if the volume increases, let's put it this way. As I said that it is a working, it is a trade finance dependent business.

If the volume increases, and hopefully volume should increase. Let's say if we go from here to 2.2 million tons in next two years' time, the working capital intensity would increase a bit.

The cost would also increase. This has to be seen in relation to the top line as well.

Okay. Ideally, when your top line increases, your interest cost will also kind of see a jump.

At the same will come down. Percentage-wise interest cost to top line will come down.

Understood, fair enough. My second question is on your...

in the previous call as well, I think you did mention that third quarter you expect to be better than second quarter, and by fourth quarter you expect things to normalize. Now we have seen the improvement in third quarter.

Normalization in fourth quarter is what we are looking at?

No, normalization doesn't mean that it is in the last year, which is 2024-25, because normalization means the situation will start improving. We don't see and we don't expect that we will reach to 20% in next quarter.

What we expect, fourth quarter, in any case is always better than the third quarter, but fourth quarter is likely to be comparatively better than the third quarter.

Okay. Fourth quarter we expect to be better than the third quarter, right?

Correct.

Okay. In terms of margins also, you did mention, I think one of the participants did ask about whether we can have a 15% EBITDA margin.

Is there any timeline, when we can come back to our previous, high margins in terms of 15 to 17%? How should one look at that going forward?

We would love to do 25% margin. I'm saying 15 to 17%, yeah.

I said we would love to do 25% margin. The only challenge is because, as we said, that we don't create demand, we respond to demand.

We respond to the situation. For example, and you would see this across the industries and across the players in the pipe sector also, we are one of those players who have multiple product, multiple location, multiple markets.

We are still surviving. We are doing better than a couple of others.

Yes, effort always remains to do better than the previous. These kind of scenarios, which you also know, the global geopolitical issues and the domestic issues, specifically related to Jal Jeevan Mission, this derails the whole thing.

If this would not have happened, presume that the water business continued as it was doing, perhaps we would not have gone down to this level. We would be continuing from what we were doing last year.

Eventually, the cycle has somehow, it has taken a pause. From here to take the momentum, it will take some time.

As the previous question was there, that we have to see that how the government responds, how the government opens up, what they say in the budget. If they don't address this issue, we have a challenge.

We have to then look for other options. Fair enough.

We are basically talking optimistically that everything will work well, the government will also do positive, that they will start sending the checks to the EPC contractors and all. I think second February will be very important for all of us, especially the pipe sector companies doing the tie-pipe.

What is our export revenue share? In totality, it is 30%.

30%.

Okay. I think that would be it from my side.

Wish you all the very best. Thank you.

Thank you.

Hello. Sir, my question is on volume growth.

Suppose last quarter whatever order we had, we had the same order and we have executed around 5,000 crore. This means this quarter we got an order for 5,000 crore?

Yeah. This time also if you see the order book is a little bit on the upside basis, we had 1.45, now this is 1.48 billion dollars.

In terms of higher side, and also the execution is on the higher side. If you combine both the numbers, the orders are much higher than the previous quarter.

Okay. This momentum will be maintained?

Your outlook on that?

We expect that because the sales funnel is strong. There is a large inquiry from overseas as well as domestic.

This momentum seems to be continuing.

Next year we can expect a volume growth, 15-20% volume growth?

We can't comment on the percentage, but yes, definitely the volume growth we are expecting, continuing given the circumstances, conditions are improving.

Okay. Then there is a scope of operating leverage margin improvement can also happen next year?

That should be again our expectation that should happen.

Okay. Sir, the job order is at good margin?

No.

Job work order is, as we earlier mentioned, that we always protect our margins based on the production. That is a variable line of that.

Okay. Sir, any feedback from government about the Jal Jeevan Mission money which has got struck?

That is something which we earlier mentioned in the call that whatever there in the news about the JJM and Jal Jeevan Mission scheme, we are hearing the same. We expect that there will be some positive news in the upcoming budget and this will be normalized in the coming year.

Budget is not an issue. See, government provided last year and there are an increase, but there is some corruption, CBI, they went to the PMO.

Not update on that, because it is not because of the budget, it is because of the corruption at the state level. I think I read an article that the matter is pending at the PMO.

The PMO has to take a decision on releasing money or whatever.

You are right. There was certain news about this leakages and all.

What we are suggesting is that the budget allocation is the same, the budget allocation at the same level what they did in the last year. It is positive about JJM scheme per se, and there is no negativity government after all the issues and all the news coming in the public domain.

Okay. The ground report is what?

Is there still a requirement, or 70-80% work is done? The requirement is there still for the D-I-pipes.

You can actually very well expect that our order book remains same. There is no cancellation orders in the Jal Jeevan Mission scheme back orders.

That will continue. There is no cancellation per se.

Apart from this, the new demand which Mr. had mentioned, that is coming from the state government side.

They are not keep on the central government ed under this scheme. There are multiple schemes which are opening up, and if the things are going well with Jal Jeevan scheme, it will be an add-on business as far as industry is concerned.

Going forward, what will be our export component then? Export component, we are focusing more on export now because of the local issue.

Export component will also increase?

That is our strategy, that we should increase the export component in DI sector. Earlier it was minimal, less than 5%.

Now it is increasing, and our focus would be to maintain that export portfolio a little bit large, so that we are not dependent on domestic market.

All DI pipes or export orders are from Middle East?

Yes, largely.

Largely, okay. These are my questions.

Good evening, sir. Thank you for the opportunity.

With respect to the DI segment, just wanted some sense on the EBITDA per ton. The broad understanding was that they have corrected from a high of 18 to 20,000 per ton to 8 to 10,000 in Q2.

What would be the range for third quarter or the current situation?

Darshan, generally we don't discuss product-wise margins in our call, because that is the policy company is adopting. You are right, there is a compression on the margins, because now the market is different.

Earlier it was a supplier market where the supplies were short and demand was high. Now because of the stoppage in the JJM scheme fund release, situation is reverse.

Now the supplies are higher and demand is low. There is a compression on the margin in DI sector, but product-wise margins we are not discussing.

Okay. My second question is, given the moderation in crude price and the benign outlook on crude going forward, is there any impact on visibility of the oil and gas capex happening in the West region, which might impact our future capex?

In oil and gas sector, generally what we are seeing is the volatility in the oil prices on a short-term basis. It is not affecting the demand where the projects are based on the multiple-year projection.

Generally the demand is—and again the oil and gas sector is for transportation more. Until and unless there is a reduction in the consumption of oil and gas, we don't foresee any issue in terms of consistent demand in this sector, worldwide.

Short-term price volatility in the oil sector generally it is not hampering the demand.

Thank you very much, and on behalf of my colleagues and the management of Jindal Saw Limited, we place our appreciation to ICICI Direct and all the participants of this call, and we hope that things will look better. We hope the budget would be positive, and we would have lesser questions on ductile iron pipe next time.

Look forward to meet you again in the next call. Thank you very much.