India: Jindal SAW's order book for pipes and pellets at $1.316 billion in Q3FY'23

Jindal SAW's (JSAW) order book for pipes and pellets stood at $1.316 billion as on 31 December, 2022. The order books include approximately 35% of total orders for exports, SteelMint learnt from company sources. The stability in raw material prices helped to maintain the order book position. The company has posted healthy growth in performance during the quarter.

JSAW reported higher turnover of INR 4,641 crore in Q3FY23 against INR 2,851 crore in the preceding quarter.

The focus would be more on the domestic market in the upcoming quarters due to strong support from the government's Atmanirbhar Bharat Abhiyan and Jal Jeevan Mission. Also, this would help to counter the global recession. Furthermore, the company sees pent up demand coming from numerous projects in the oil and gas sector from abroad.

On the value-addition front, the company shall begin production of higher-grade pellets and bring improvement in coatings of large diameter pipes.

Other highlights

UAE operations: Sales from the UAE operations were at 37,362 metric tonnes during the quarter and 110,376 metric tonnes during 9MFY23.

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 November 2022 have been deferred by the court. The hearings will now take place in the first week of March.

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. The company has received Letter of Intent from Resolution Professional (RP) in October as the highest bidder. The RP has recommended the matter to the National Company Law Tribunal (NCLT) for final approval.

SIL has DI pipe capacity of 200,000 t/year, which is strategically located to cater to the south Indian market. In the event of a takeover, JSAW's DI pipe capacity will expand and the company will be able to significantly improve its market dominance. The entire process may take a few months to resolve.

Joint venture with Hunting Energy Pte Ltd: JSAW has entered into joint venture agreement with Hunting Energy Services Pte. Ltd, Singapore, a leading technology company globally in the oil country tubular goods (OCTG) premium segment. A joint venture company was formed, with JSAW holding 51% and Hunting the remaining 49%. Both the shareholders have contributed equity totalling INR 30 crore in proportion to their respective shares. The project is at an advanced stage of implementation.

Outlook
The company will focus on value-added and premium products and expects the large diameter pipes segment to drive business in the coming quarters.