Jindal SAW Q3 turnover rises 28% to INR 2,851 cr

Jindal SAW's Q3FY'22 turnover rose 28% y-o-y to INR 2,851 crore compared to INR 2,225 crore in the same quarter of the previous fiscal.

JSAW has formalised a 51:49 JV with Hunting plc, Singapore, a leading technology company globally in the oil country tubular goods (OCTG) premium segment. The JV will have access to Hunting's patented IP which is backed by a robust R&D establishment, and is expected to become operational in CY'22. The collaboration/joint venture of two leading players will put the seamless market on a different pedestal.

The company is confident Q4 will be better than Q3 in anticipation of demand picking up from the government's infrastructure spends. JSAW is tracking additional opportunities in domestic and overseas markets and expects new orders in the next few months, SteelMint learnt from the earnings call today.

JSAW has received orders worth INR 2,200 crore primarily from the water and industrial sector and continues to have cautious approach in order bookings keeping in view the volatility in raw material prices and its impact on profitability. The current order book for pipes is approximately $600 million.

Other highlights

• Raw material prices continue to be volatile: The input costs continue to be erratic owing to the unprecedented volatility in prices of HRCs, coal and iron ore. Therefore, the company continues to stay cautious in booking new orders.
  
  
• Debts mount: As of 31 Dec'21, net institutional debt of the company (at standalone level) was INR 4,191 crore (INR 3,244 crore as of 30 Sept'21) including long term loans and fund-based working capital. This includes net working capital borrowings (short term) of INR 2,718 crore (INR 1,722 crore as of 30 Sept'21).
  
  
• Update on Jindal ITF Ltd v/s NTPC case: Case proceedings are being heard by the Delhi High Court. Due to third wave of Covid-19 and virtual court hearings, the regular hearing of the matter has yet not started. The high court is likely to hear the matter in Mar'22.
  
  
• 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 pipes capacity of 200,000 mtpa, which is strategically located to cater to the water pipes requirements of southern India. 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 for closure.
  
  
• UAE operations: In Abu Dhabi, the company sold 1,57,000 t of DI pipes in 9MFY'22 against 1,38,000 t in 9MFY'21. The current order book stands at 63,000 t. High volatility in pig iron prices is likely to impact the operations and profitability in the short term. However, JSAW is working on various options to protect and improve the margins.