Jindal Saw Limited Q3 FY26 Earnings Call Summary

Summary

Jindal Saw Limited - Q3 FY 2026 Earnings Call Summary Monday, January 19, 2026 17:00 Hrs (IST)

Event Participants

Executives 3 Narendra Mantri (Chief Operating & Financial Officer), Rajeev Goyal (Senior Vice President, Corporate Finance), Vinay Kumar (President and Head Treasury)

Analysts 5 Abhishek Maheshwari (SkyRidge Funds Manager LLP), Darshan Gangar (First Water Capital), Deepak Poddar (Sapphire Capital), Rajesh Agarwal (Moneyore), Sailesh Raja (B&K Securities)

Financials & KPIs

Geographic & Segment Commentary

• MENA Region: Maintained steady operations via Abu Dhabi plant delivering 52,000 MT of DI pipes. Holds an independent order book of $235 million (215k tons), providing 9-12 months visibility. Strategic expansion underway with new seamless and HSAW/DI plants in UAE and Saudi Arabia to capture “local manufacturing” incentives.
• India Water Sector (DI Pipes): Faced significant challenges due to protracted payment timelines in the Jal Jeevan Mission (JJM). Management is rebalancing the mix toward exports ($45M current order book) and state-funded projects to reduce dependence on central JJM disbursements. Overdue receivables from JJM EPC customers are localized at ~₹350 crores.
• Oil & Gas (Seamless/HSAW): Demand remains robust despite short-term oil price volatility. Secured a 6,22,000 MT export contract for Saudi Arabia with production starting in Q3. Seamless exports to the US and Canada continue despite tariffs, proving Indian cost-competitiveness.

Company-Specific & Strategic Commentary

• Capacity Expansion: Commissioned a new piercing mill for the seamless plant, increasing capacity to 4 lakh TPA and enabling production of a full range of product sizes.
• MENA Footprint: Establishing a wholly owned seamless plant in Abu Dhabi (KEZAD) and 51% JVs in Saudi Arabia for HSAW and DI pipes. All projects are expected to be commissioned by February 2028, impacting financials from FY29.
• Productivity Optimization: Targeting peak achievable volumes of 2.2 million tons across Indian operations without major greenfield expansion through debottlenecking and modernization.
• Litigation Update: Initial arguments for the Jindal ITF vs. NTPC case began in January 2026; the next hearing is scheduled for February 2, 2026.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Jal Jeevan Mission (JJM) & Receivables

• Question: What is the status of JJM payments and expectations from the upcoming Union Budget? (Shweta Dikshit)
• Answer: Funding has slowed but not stopped; ₹17,000 crores of a ₹67,000 crore allocation may be disbursed soon. Management expects the Feb 1st budget to clarify the scheme’s extension and allocation. (Vinay Kumar)

Seamless Pipe Strategy

• Question: How will the new piercing line change the product mix and can you ramp up to 90k tons/quarter? (Sailesh Raja)
• Answer: The mill improves productivity in larger sizes and allows a full range of products. While current domestic order books are lower, new tenders are expected soon to utilize the 4 lakh TPA capacity. (Vinay Kumar)

Margins and Operating Leverage

• Question: When will EBITDA margins return to the 15-17% range? (Deepak Poddar)
• Answer: Q2 FY26 was the cycle bottom (~10%); Q3 saw a 300 bps uptick. Reaching 15%+ depends on the resumption of the water business and utilizing the 2.2 million ton capacity to gain operating leverage. (Vinay Kumar)

Export Focus

• Question: Are you increasing DI pipe exports to mitigate domestic issues? (Rajesh Agarwal)
• Answer: Yes, the strategy is to increase the DI export portfolio from <5% to a larger share. This includes leveraging the Abu Dhabi facility and starting DI exports from Indian plants. (Narendra Mantri)

Key Takeaway

Jindal Saw Limited reported a sequential recovery in Q3 FY26, with consolidated income rising 16.4% QoQ to ₹4,963 crores, signaling that Q2 marked the bottom of the current cycle. While the company faces margin compression in the DI pipe segment due to funding delays in the Jal Jeevan Mission, it has successfully pivoted toward large-scale export orders, including a significant 6.22 lakh MT HSAW contract for Saudi Arabia. Strategically, the company is expanding its Middle East footprint with new facilities in Abu Dhabi and Saudi Arabia, targeting commissioning by 2028. Management remains optimistic about a volume ramp-up to 2.2 million tons and improved profitability as domestic water sector funding normalizes post-budget. The company maintains a lean long-term debt profile of ₹690 crores, providing a stable foundation to navigate transient domestic macro headwinds.