India: Jindal SAW posts healthy growth in orders in Q1FY'23 on rising demand for pipes

Jindal SAW (JSAW) recorded a higher order book of $733 million in Q1FY'23 against $654 million in the last quarter, SteelMint learnt from company sources. The increase in orders was majorly due to rise in demand for SAW and DI pipes.

The company updated that some tenders are in the pipeline from ONGC. JSAW has signed an exclusive agreement of technology transfer with a specialised oil and gas company, OSI (USA).

The company sees great opportunity in the seamless pipe segment amid the gap created by the Russia-Ukraine conflict. Notably, Ukraine was the largest supplier of seamless pipes before Russia's invasion of that country.

Considering the robust growth in demand and the correction in commodity prices, the company expects that the upcoming quarter will see a residual impact of the volatility in raw material prices seen in Q1.

Other highlights

• UAE operations: In Abu Dhabi, the company sold 300,000 t of DI pipes in Q1 compared with 500,000 t in Q1FY'22 owing to scheduled maintenance and other seasonal factors. Moreover, the profitability was also impacted by soaring raw material prices. The current book order stands at 71,000 t.
  
  
• Update on Jindal ITF Ltd. v/s NTPC case: Case proceedings are being heard by the Delhi High Court. The hearings which were scheduled in early August have been deferred by the court at the request of the Solicitor General. The hearings will now take place in early September.
  
  
• Update on Sathavahana Ispat: JSAW is one of the Resolution Applicants for Sathavahana Ispat Ltd (SIL) which is going through a Corporate Insolvency Resolution Process (CIRP) under IBC. SIL has a DI pipe capacity of 200,000 t/year, which is strategically located to cater to the south Indian market. If successful, this will add to JSAW's DI pipe capacity and significantly improve its market dominance. The entire process may take a few months to resolve.
  
  
• Joint venture with Hunting Energy Pte Ltd: The company has entered into collaboration with Hunting Energy Services Pte. Ltd, Singapore, a leading technology company globally in the oil country tubular goods (OCTG) premium segment. The proposed 130,000 square feet manufacturing complex at Nashik is expected to be operational this fiscal.
  
  

Outlook: The company expects healthy growth in demand for DI pipes in H2FY'23.