💰 Financial Performance

Revenue Growth by Segment

Standalone revenue for Q2 FY26 was INR 3,409.1 Cr, representing a 28.8% YoY decline from INR 4,790.2 Cr. Abu Dhabi operations (JSGL) grew 15.6% QoQ to INR 607 Cr in Q2 FY26 from INR 525 Cr in Q1 FY26. USA operations revenue was INR 173 Cr in Q2 FY26, down 8% from INR 188 Cr in Q1 FY26.

Geographic Revenue Split

Domestic and export markets are well-balanced. USA operations contributed approximately 4% of consolidated revenue (INR 173 Cr out of INR 4,264 Cr). Abu Dhabi operations contributed approximately 14.2% of consolidated revenue (INR 607 Cr).

Profitability Margins

Standalone PAT for Q2 FY26 was INR 79.3 Cr, an 83.4% YoY decrease from INR 477.0 Cr. Standalone PAT margin fell to 2.3% from 10.0% YoY. Consolidated PAT for Q2 FY26 was INR 138.6 Cr, a 70.8% YoY decrease from INR 475.3 Cr.

EBITDA Margin

Standalone EBITDA margin for Q2 FY26 was 9.8%, down from 18.3% YoY, primarily due to lower production volumes (3 lakh tons vs 4 lakh tons) and poor overhead absorption. Consolidated EBITDA margin was 11.3% in Q2 FY26 vs 16.9% in Q2 FY25.

Capital Expenditure

Standalone maintenance and debottlenecking capex is planned at INR 600-700 Cr for FY26. MENA region expansion (Abu Dhabi and KSA) is expected to require $20-30 million (INR 165-250 Cr) in the current year, with higher spending over the next two years.

Credit Rating & Borrowing

CARE reaffirmed 'CARE AA; Stable' for long-term bank facilities and 'CARE A1+' for short-term facilities. Brickwork reaffirmed 'BWR AA (Stable)' for NCDs. Standalone finance costs were INR 108.4 Cr in Q2 FY26, a 17.1% YoY reduction from INR 130.8 Cr.

⚙️ Operational Drivers

Raw Materials

Steel coils, iron ore, and scrap are the primary raw materials for SAW, DI, and seamless pipes. Specific percentage of total cost for each is not disclosed.

Import Sources

Not specifically disclosed in available documents, though the company operates in India, USA, and the MENA region.

Key Suppliers

Not specifically disclosed in available documents.

Capacity Expansion

Current standalone production volume was 3 lakh tons in Q2 FY26, down from 4 lakh tons in the previous year. Planned expansion includes debottlenecking 12 facilities in India and MENA region capex for capacity improvement.

Raw Material Costs

Raw material price declines in 9MFY25 previously supported margins, but current Q2 FY26 performance was impacted by lower volume absorption rather than raw material spikes. Procurement strategies include natural hedging for forex exposure.

Manufacturing Efficiency

Gross profit to EBITDA conversion stood at 24% in Q2 FY26 on a standalone basis, significantly lower than the 40% achieved in the previous year due to low utilization (3 lakh tons).

Logistics & Distribution

Not specifically disclosed in available documents.

📈 Strategic Growth

Expected Growth Rate

10%

Growth Strategy

Growth is driven by a robust order book of 19 lakh tons (USD 1.45 billion standalone) and USD 240 million in Abu Dhabi. Strategy focuses on the water infrastructure sector, MENA region expansion (Abu Dhabi and KSA), and specialized offerings like rust-free pipes.

Products & Services

Longitudinal and helical SAW steel pipes, ductile iron (DI) pipes, seamless pipes, anti-corrosion coated pipes, hot-pulled induction bends, and stainless steel pipes.

Brand Portfolio

Jindal SAW, Jindal Hunting (JV).

New Products/Services

Rust-free pipes manufactured in Abu Dhabi; specialized oil country tubular goods (OCTG) through the Jindal Hunting JV.

Market Expansion

Expansion in the MENA region (Abu Dhabi and KSA) with modular capex and a focus on the domestic water infrastructure sector.

Market Share & Ranking

Dominant market position in domestic steel pipe manufacturing with over 40 years of track record.

Strategic Alliances

Joint venture with Hunting Energy Services (Jindal Hunting) which contributed INR 9.4 Cr in Q2 FY26.

🌍 External Factors

Industry Trends

The water infrastructure sector is seeing robust demand, leading to the company's highest-ever order book in this segment. The industry is evolving toward specialized, corrosion-resistant products.

Competitive Landscape

Competitors are reporting higher gross profit to EBITDA conversion rates of 45-48% compared to JSAW's current 24% during low utilization periods.

Competitive Moat

Moat is sustained by a 40-year track record, dominant domestic market share, and a diversified multi-product business model that hedges against segment-specific downturns.

Macro Economic Sensitivity

Highly sensitive to government spending on water infrastructure and global oil and gas demand for pipe products.

Consumer Behavior

Shift in demand toward large-scale government-funded water infrastructure projects.

Geopolitical Risks

Expansion in the MENA region (Abu Dhabi and KSA) exposes the company to regional geopolitical stability and trade trends.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to environmental norms and manufacturing standards for steel and ductile iron pipes. Compliance is managed through modular maintenance capex.

Environmental Compliance

Not specifically disclosed in INR values.

Taxation Policy Impact

Standalone tax rate for Q2 FY26 was approximately 24.3%. H1 FY26 results included a tax refund of INR 133.5 Cr (INR 1,335 million) adjudicated by the Appellate Authority for earlier years.

Legal Contingencies

Pending legal suit: Jindal ITF Ltd (51% subsidiary) vs NTPC. The company has a significant investment of INR 1,598 Cr in Jindal ITF. A hearing was scheduled for October 27, 2025, at the Delhi High Court.

⚠️ Risk Analysis

Key Uncertainties

High exposure to subsidiaries and JVs (INR 2,090 Cr investment) and corporate guarantees (INR 608.34 Cr for JSGL) could adversely impact the financial risk profile if these entities require further cash support.

Geographic Concentration Risk

Significant reliance on the Indian domestic market and the MENA region for growth.

Third Party Dependencies

Dependency on government-linked projects in the water sector for the current order book execution.

Technology Obsolescence Risk

Mitigated by INR 600-700 Cr annual capex for facility upgradation, modernization, and debottlenecking.

Credit & Counterparty Risk

Liquidity is marked as 'Adequate' with cash and equivalents of INR 514 Cr as of March 31, 2025, against scheduled debt repayments of INR 323 Cr for FY26.