India: Jindal SAW posts robust performance in Q1FY'25, order book remains strong

Jindal SAW's total income (standalone) for first quarter of financial year 2025 (Q1FY'25) stood at INR 44,171 million, higher by 15% y-o-y compared to INR 38,308 million in Q1FY'24, the company reported in its investors' call held on 30 July, 2024.

EBITDA (standalone) stood at 8,422 million in Q1FY'25, up by 37% y-o-y from INR 6,136 million in Q1FY'24.

Profit after tax (PAT) rose by 60% y-o-y to INR 4,462 million in Q1FY'25 against INR 2,791 million in the same quarter of the previous financial year.

The company's successful execution has led to a significant increase in sales volume, resulting in higher turnover and improved profit margins. This improvement was further fuelled by an increase in exports and stable raw material prices.

The company's diverse product mix of iron and steel pipes and pellets serves as a natural hedge against the unpredictable fluctuations in commodity markets.

Highlights:

1. Order book position: The company's current orderbook stands at around $1.647 million out of which iron and steel pipes orders are around $1,632 million and $15 million are pellet orders.

The company's order book includes nearly 32% of orders from global markets, which presents a significant opportunity for exports. These orders are scheduled to be completed in the next 9-12 months.

As a result of the high demand in the water sector in the southern region, the company has successfully sold approximately 55,000 tonnes (t) of pipes from its southern division during the fiscal year 2024.

Additionally, the order book for the southern division currently stands at around 245,000 t for the water sector, which is included in the above order book.

2. UAE operations: Jindal SAW Gulf LLC (UAE subsidiary) in Abu Dhabi has witnessed an improvement in execution of orders resulting in higher sales of DI pipes at nearly 36,800 t in Q1FY'25 from approximately 26,200 t in Q4FY'24.

Adding to its existing orders, Jindal SAW Gulf LLC boasts an impressive order book of approximately $251 million.

JSAW has a significant presence in the overseas market, with the majority of exports occurring in Latin American countries and the MENA region.

3. Update on Jindal ITF Ltd v/s NTPC case: Jindal ITF (Jindal SAW subsidiary) won an arbitration against NTPC in 2019 for claims exceeding INR 1,891 crore. Both parties appealed to the Delhi High Court and the next hearing is scheduled on 18 September, 2024.

4. Joint venture with Hunting Energy Pte Ltd: Jindal SAW and Hunting Energy Services have formed a joint venture to build India's first premium Oil Country Tubular Goods (OCTG) threading facility.

Jindal Hunting Energy Services Limited commenced commercial operations in FY2024. Following the acquisition of an API license in May 2024, the company escalated production in the first quarter of FY 2025. Its current order book comprises primarily job work, valued at approximately INR 125 crore, in addition to a $1.647 million order book.

The facility has a threading capacity of 70,000+ joints of casings, tubings, accessories and weld-on- connectors.

Outlook:

Jindal SAW delivered strong Q1FY'25 results, with significant growth in revenue, EBITDA, and profit. A robust order book, including substantial exports, ensures continued revenue generation. The acquisition of Sathavahana Ispat has enhanced capacity utilisation and expanded market reach. These factors position Jindal SAW for sustained growth in the coming quarters.