Jindal Saw (NSE:JINDALSAW) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Jindal Saw Q1 FY 'twenty seven Earnings Conference Call hosted by ICICI Securities Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded.

0:48 I now hand the conference over to Mr. Vikash Singh. Thank you, and over to you, sir. Thank you, Anushka. Good evening, everyone. Welcome to Jindal Saw Q1 FY 'twenty seven results conference call. I would like to thank the management to give us the opportunity to host them. From the management side, we have with us mister, chief operating and financial officer mister, president and head treasury and mister, senior vice president corporate finance. Without taking any much time, I'll hand over to the management for their opening remarks. Over to you, sir. Thanks, Vikash. Good afternoon, ladies and gentlemen. I'm Vinay Gupta representing Jindal Saw.

1:33 On behalf of the management team, including Mr. Narendra Mantri and Mr. Rajiv Goel, it is my pleasure to welcome you to our conference call for the first quarter of financial year twenty twenty seven ending 06/30/2026. We also appreciate the ITC direct team for hosting this session and coordinating the discussion. The Board approved financial results for quarter one of financial year twenty twenty seven on 07/14/2026. These are filed with the cost changes, and we assume you have reviewed them. Now let us now present the operational and financial performance of the company and its subsidiaries.

2:20 In this presentation, we will also cover the financial performance for quarter one business scenario and update on the projects in UAE and Saudi and few other things. In terms of our financial performance on a stand alone basis, the company registered a total income of INR 3,756 crore in quarter one of financial year 'twenty seven against INR 3,327 crore in Q1 of FY 'twenty six, representing an increase of approximately 13%. EBITDA for quarter one of 'twenty seven stood at INR $3.41 crore against INR $5.60 crore in quarter one of 'twenty six, representing a decline of approximately 40%.

3:10 PBT for Q1 of 'twenty seven is reported at INR 145 crore against INR $30.07 crore in quarter one of FY 'twenty six, representing a decline of approximately 53%. Pair for Q1 of 'twenty seven is reported at INR 110 crore against INR364 crore in quarter one of FY 'twenty six, representing a decline of approximately 70%. On a stand alone basis, total income stood at INR4476 crore for the quarter one on console as compared to INR 4,103 crore in quarter one of FY 'twenty six, representing an increase of approximately 9%. EBITDA for quarter one of 'twenty seven stood at INR $4.21 crore, up against INR $6.88 crore for quarter one in FY 'twenty six, representing a decline of approximately 39%.

4:09 PBT for quarter one in FY 'twenty seven is reported at INR 148 crore as against INR $3.64 crore for quarter one of FY 'twenty six, representing a decline of approximately 60%. Cash for quarter one of FY 'twenty seven is reported at INR 91 crore against INR $4.15 crore in quarter one of FY 'twenty six, representing a decline of approximately 78%. Now in terms of our indebtedness, as of 06/30/2026, the stand alone net debt narrowed to INR 2,345 crore and that and versus INR 2,453 crore as of March 3126.

5:01 This includes INR $5.26 crore of long term debt. This is finally INR 500 crore out of this is from LIC and CD, which is reasonable in three equal installments in FY '28, 2019 and 'thirty. The net distribution debt at consolidated basis has reduced to INR2472 crore as compared to INR 2,528 crore as of 03/31/2026, and the long term debt out of this was in INR $5.36 crore. In June 2026, KN ratings has affirmed KN A1 plus rating for short term debt facilities, including commercial paper and KN AA outlook is stable for long term facilities. They are basically reaffirmed, so there is no change in the rating.

5:57 Now let us discuss the progressives of our business. In terms of operations, for the first quarter ending 06/30/2026, performance remained muted, broadly similar to the weak trend seen in quarter four of the previous year, with exports, water infrastructure demand and seamless pipe certifications all acting as constraints on our business. While we hold a strong order book, including a six metric ton work order from Saudi Arabia. All outward shipments have been suspended since March 2026. Geopolitical situation between U. S. And Iran brought MENA region trade to a standstill this quarter by blocking the state of Hormuz.

6:52 A short lived diplomatic breakthrough in mid June offered some hope for recovery. However, the subsequent collapse of these peace talks has limited our short term visibility. Company had started executing pre orders on export side to non MENA region. Due to heavy traffic at Indian port, few of the shipments have been deferred to Q2 of financial year twenty seven. In the domestic market, the water segment remained weak as well beyond mission linked project execution continued to be affected by delayed release of central funds and tighter scrutiny of the state projects. Multiple states reported pending dues and slowed project time lines, reinforcing a demand slowdown for price supply tied to government rural water schemes. However, the company saw a recovery in Q1 of this year, driven by higher ductile iron pipe volume sales volume for executing various pipe project orders with us.

7:59 Now in terms of company related matters, which had affected the business, specifically in Q1, As you know, the company's seamless pipe business was additionally impacted because of its e pay license remains suspended from January 2026 until mid June twenty six. This limited our ability to participate in certified oil and gas orders during the quarter. API reinstatement enables the company to resume API certified seamless pipe supplies and participate in tender that requires API monogram. In terms of a couple of new opportunities, as was pointed out in the previous call, heightened geopolitical risk across the MENA region is driving a decisive shift towards more secure overland energy infrastructure, creating a strong pipeline of opportunities in expansion, rehabilitation and replacement projects, especially those aimed at avoiding vulnerable maritime choke points.

9:13 This shifts its speed up investments in routes that bypass high risk areas, creating major port cities for pipe manufacturers and vendors in oil, gas and water infrastructure. Currently, India is also prioritizing energy security with new pipeline tenders expected in coming quarter that follows the landmark March 26 government mandate designed to fast track nationwide five gas rollout by eliminating bureaucratic delays, activities and local bottlenecks through time bound central approvals. We would now like to update you about the company's ventures in MENA region. So as you know, like in the geopolitical hurdles, which exist in MENA region, the shift dynamics bring new chances for companies like us, and that is why we are actively pursuing these opportunities by expanding and manufacturing locally.

10:12 As you know, like we had announced projects a seamless project in Abu Dhabi and top line project in Saudi Arabia. So first, let's talk about seamless pipe plant in Abu Dhabi. As we have stated on various occasions, the company has initiated the process to set up a state of the art three lakh tonne seamless pipe injection facility in Abu Dhabi with an estimated project cost of approximately $300,000,000 The plant will primarily cater to the oil and gas sector in MENA region and more specifically in UAE. This is aligned with the company's strategy to strengthen its supply base closer to the key global energy markets, including UAE. The project execution has commenced by securing and developed leasehold lines with existing civil infrastructure.

11:03 We have effectively shortened our construction time line. Procurement for critical long lead equipment is already underway, whereby we have started opening and placed cash advances. With financial closure expected in next few months, the project remains firmly on track, which is likely to commence the commercial operation in financial year 2029. Jindal Saw's Abu Dhabi strategy now rest on a dual pipe platform, seamless pipes plus a rectile iron pipe facility, both aimed at entering a full fledged regional hub for energy and water infrastructure. Some brief about our sawpipe plants in Saudi Arabia.

11:50 We have created in the past that we have established a strategic joint venture in Saudi Arabia, holding a 51% equity stake alongside Gurul of KS Saudi, which will hold 49%. The JV is dedicated to establishing advanced ELSO and ELSO pipe mills of 300,000 metric tonnes per annum each to serve reasonable water infrastructure and energy demand. Having already secured the project plan and established LC4 selected equipment, we are fully committed to fast tracking for construction of these manufacturing facilities. Furthermore, we expect to finalize internal financial closure within the next few months. Beyond meeting Saudi's domestic demand, these facilities are strategy positioned to capture lucrative post to our commercial opportunity in the region, aligning with the broader MENA shift towards alternative energy supply route that circumvent the state of.

12:54 Oraj Jindal Saw is creating a Middle East production corridor. Abu Dhabi as a controlled high end senior hub and Saudi as a JV driven local content rich capacity in ENSO and Alto Daccarat and to lock in infrastructure demand. Now let us look at our subsidiary in UAE and other parts. In UAE, because of the regional conflict in MENA region, the operations remain disrupted at Ductile Iron Fife facility in Abu Dhabi. The UAE remains a highly impacted area within the region due to these circumstances and with employee safety as our top priority, operations have been reduced to meet essential demand.

13:47 The sales from our Agudai plants are restricted to customers in the country, which are within their trucking range only. In this backdrop, in Q1 of FY twenty twenty seven, Abu Dhabi Company delivered approximately 34,000 metric ton of Ductile Pipe as compared to 48,000 in the previous quarter of which is quarter four of last year. The Tectile Pipes. As of 06/30/2026, the SMCP hold an order book of approximately USD 188,000,000. In terms of volume, it is 177,000 tonnes, which ensures operational visibility for net three to four quarters. This backlog is independent of the order book of Jindal Saw Limited. Jindal Hunting, which is a joint venture between Hunting Energy Services Singapore and Jindal Saw.

14:39 Jindal Saw is 51% in this company. It generated a revenue of INR 5 crore and a loss it is first time we incurred a loss of INR 5.3 crore in the Q1. And this poor performance is a result of the suspension of the EK license of Jindal Saw Limited. And since the EK license has been restated, we expected the performance to improve gradually in coming quarters. Last, about the court case of Jindal IT versus NTPC. The conflict is in with respect to this conflict, the arguments from both sides are closed at the double bench of Delhi High Court and the order has been reserved.

15:29 We expect the order to be announced in next maximum two months' time. The courts are on location, which are likely to be over in some time. And after that, the order can be announced. So we thought, let me give you a brief summary this time and let's have more interaction. So I I leave the floor open for interactive discussion. My colleagues, mister Nandamanti and mister Rajiv Goel, are with me to address any of the questions on the meeting. Thank you very much. Thank you very much. We will now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and two.

16:18 Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Deepak Pothar from Saphyr Capital. Proceed. I'm audible, sir. Yeah. You are audible. Thank you very much, sir, for this opportunity. Sir, I just wanted to understand now on the visibility going forward. I mean, you mentioned that in India, the JJM continues to delay. So the DI pipe offtake is also on the lower side in The Middle East because of the current situation. Even the P stock failing has provided you limited visibility.

17:06 So just wanted to dwell more. So how should one look at the execution this year? I mean or by when we expect some kind of traction in your volume? Something on those lines, your comments will be very helpful, sir. Yes. So Rajiv is asking the question. So Rajiv, can you please help? Yes. So as Vinay Shiv mentioned in his remarks that performance in the first quarter due because of multiple reasons and geopolitical issues, which is likely to continue in the coming quarters also. This was also... Your voice cracked. Can you just repeat this last line? I mean your voice was not very clear yet.

17:56 So we mentioned that --. Is the echo also on your side? No. I I don't think so. There's any echo I'm hearing. Yeah. Okay. Okay. Go ahead. So given the current scenario, domestic order book is quite persistent. That is a little bit in terms of volume, but we are we are likely to execute these orders in the current year, and the volumes So that is our prediction, even the current scenario, the state is going on. But we are working on multiple strategies beyond the MENA region. On the domestic front also, some in water sector from the state drilling projects, where we are seeing some uptake improvement in first quarter, and this is likely to continue.

19:06 So this is our estimate that if the situation remains same, so why we are likely to achieve the same level, what we did in 2026? Okay. Just to summarize, I mean, you mentioned the volume in FY 'twenty seven overall is likely to be flattish given the current scenario? And offtake, you have seen some improvement in Middle East and you expect that to continue? In The Middle East, we a little bit different. In domestic front, we have seen the increase. But in The Middle East, monthly schedule should remain in the same range, like 10,000 to 12,000 tonnes per month. So that is something which is where we can supply the material through the road only.

20:00 So till the time, material is continuing and C route is not open, this level of operations we are likely to continue. So let me repeat Rajiv said. Rajiv mentioned like what we are doing from Abu Dhabi plant to cater to the Middle East market. Okay. Secondly, if you're asking about like how we are catering to Middle East because the Middle East remains practically blocked from for us for countries like India from March. So we have sizable order book for Middle East from India. As of now, that order book is on hold, but we are now working out some various other options specifically in terms of, let's say, if it is to cater to Saudi because they are... That's where we hold the order of 600,000 ton even if it is on the job of basis.

20:57 So we are... Because Saudi has the alternative route also, which can take... In terms of time, it can take much longer. It has a cost issue also, but we are now engaged with the buyer to find a solution, which is a kind of, let's say, possible for both sides so that we can even if this stalemate continues, so we are trying to find a solution that we execute at least that order because Saudi has both side of the sea. So on that solution, it might take some time, but we hope to find a solution for that. If that is workable, that takes care of a larger order book. Okay. Okay. I got it. Understood. And just one last thing on the interest cost. So there was a sharp reduction in your interest cost.

21:49 So what led to that? And how should one look at your interest cost going forward? See, this is the interest primarily on our working capital and term loan, which is the hard cost, let's say, what you are INR 70 crores, 75 crores, one of the larger composition in the previous last previous quarter, specific quarter four of twenty twenty six, got significantly impacted because of sharp depreciation of rupee in that particular quarter. Unfortunately, in this quarter, the people are patient. Hello? Yes, yes, yes. I'm there, sir. Yes. Okay. So I think like I thought that it's a disruption. So in this quarter, since the also looking at trading team, was not much of the impact which is debited to this account. So this 70 crores, INR 75 crores in the court, which is being paid in the loan.

22:40 So we expect that these kind of run rate going forward as well, assuming the rupee volatility is not there? Fine. Yes, that's a fair assumption. Okay. Okay. Okay. Got it. That would be it from my side. Wish you all the best. Thank you so much. Thank you. We take the next question from the line of from Systematics. Please proceed. Hi. Good afternoon, sir. Good afternoon, everyone. Thank you for the opportunity. So my questions are around the MENA projects that are ongoing. Firstly, on the seamless pipe plant that is expected to commission in FY 'twenty nine. Any idea or any sense on utilization levels of volumes that could be achieved in FY '29 as well as what any sense on what happens on the DI type finishing capacity of one lakh tonnes? How is that likely to contribute to our financials in the next two years?

23:45 And similarly, the saw pipe plants that are coming up in Saudi, what is the commissioning time line if I missed it earlier? Okay. So, Shweta? Sure. Okay. So let's say to describe your question, you are trying to understand when these projects are going to be implemented, whether it is similar project or DI plant in Saudi and Abu Dhabi, okay. So theoretically, the longitudinal and helical pipelines should be done can be done in eighteen to twenty twenty four month time. We are trying to crash some of the activities and we and presumably are considering maybe assume that the stage rate in MENA region is likely to be over in next couple of months, maybe three months, six months, whatever.

24:42 And this is the time when we don't need equipments to land at the location. So this is the time we will use to develop the site, specifically the Saudi because they are the new sites. So if everything works well, we can complete the execution in next one point five years' time and then the production, let's say, testing and everything will start. Theoretically, we expect when we consider, let's say, utilization of approximately 50% of the capacity. This is theoretical because everything will depend on if the project because these are like simple technology projects unlike the tile or other things. There we should get the orders and depending on the, let's say, ships we are using, the capacity can be ramped up. So in terms and theoretically, we have also assumed that we would produce and sell roughly 50% of the capacity, which is, let's say, 150,000 tonne each in both the projects.

25:47 The ties 100,000 tonnes again we can generate the 50% to 60% of the capacity, but the Saudi market can take the entire production also. That's not a big issue. It will be a continuous plant on the top of this. In terms of seamless, seamless we again believe that we can complete this project now from today in next eighteen to twenty months' time because a lot of time has been saved by us by taking a land, which is a lot of land, which is already developed. There was already a factory, so we need not to fill the site. We need not to do piling and anything else. Equipment majority of the long delivery items have already been ordered.

26:35 And maybe in next nine to twelve months time, the equipment delivery will start. And again, when we are commissioning the project, we believe that we can do 50% to 60% in the first year. Seamless would require approvals also. So in the first year, couple of initial months will go for and including in the longitudinal API grade, couple of months goes for taking the approval. And pending that, we can do no API production also. So to answer your question, we... Theoretically, we presume that production in all facilities will start in 2028, '29, number one. Number two, theoretically we are considering roughly 50% to 6050% approximately production in all the facilities.

27:28 Hello, Shweta. I was saying in that case, I think FY 'thirty or f five thirty one could be the peak utilization of all the capacities together, if I'm not wrong. F five? Yeah. So,, you're right. Within two to three years' time, we are expecting the peak capacity utilization in all the plants. Two to three years from now. Right? Yeah. From 2829 onwards. Yes. Okay. And lastly, any guidance that you could provide for the seamless pipe facility in India, the NASIG plant since now the API license is reinstated.

28:14 So last year before the commissioning of the piercing mill, management was deciding to hit a run rate of around 80,000, 90,000 tonnes every quarter. When you... Do we expect to hit this run rate? Or if it is still going to take time or the what would be the possibility there? Shri, the utilization in senior facilities are not fixed. It's going to ramp up because Ladies and gentlemen, the line for the management has been disconnected. Please stay connected till I rejoin the management. Thank you. Ladies and gentlemen, thank you for waiting patiently.

28:59 The management's line has been connected. Sir, you may proceed. Yeah. So,, your question was relating to the capacity utilization improvement in seamless music unit, where we actually... The API licenses have been reinstated very recently. So in... Since January to June, we were not eligible to participate in any of the API related supply tenders. So this activity has started now. We have started in participating in the business. But what we expect that at least a quarter or so, there will be some gap in terms of the utilization levels. But we are expecting that September or October onwards, the facilities should start improving the utilization level because API related sales we are expecting to come into the production.

29:58 So October onward, we can expect the better utilization in Cintas. Roughly, what utilization level, sir? I mean, are we looking at 80,000, 90,000 tonnes quarterly volume since starting 3Q? So it will be somewhere in 70,000 to 80,000, yes, definitely, quarterly. Okay, sir. Thank you so much. I'll come back in the queue. Thank you. Before we proceed with the next question, a reminder to the participants, We take the next question from the line of Sailesh Raja from three sixty one Capital Market. Please proceed.

30:48 Yeah. Thanks for the opportunity, sir. Sir, our order book stands at 1,780,000 tonnes. So of which 750,000 is ex... Exports order. So within exports, around 6.08 lakh pertains to helical job work orders. So could you help us understand the composition of the remaining 1.42 lakh tonnes? Specifically, how much relates to ELSSA pipe and DI pipe? Additionally, could you provide the breakup of the exports order between Middle East and non Middle East? So, Silesh, Middle East or non Middle East combined order book is roughly 60% export order book is from Middle East and the rest of the 40% is from the non Middle East market.

31:39 So that is on an overall basis, yes. Okay. Sir, can you give the breakup of this 1.72, sir, other than non job work order? The balance quantity is 1.42 lakh tonnes. So how much is the LSA and BA? So in terms of value, if you talk about roughly 70,000,000 tonnes is from longitude, 30,000,000 order book is from seamless and ductile is from roughly $40,000,000 is the order book. Okay. Okay. This is overall you are talking, sir, exports. Yes. I'm talking about exports.

32:28 Yes. Yes. Yes. Yes. Also in the near term, as you said, the outlook remains uncertain given the geopolitical situation and the slow recovery in domestic water interest spending. So how is the company thinking about derisking in order book geographically? Are you aggressively pursuing opportunities in the market like U. S, Canada, Southeast and other region? Or is the strategy to maintain focus on existing market to preserve the market share and execution capability ramping The Middle East and domestic demand normally? So what is our strategy? So in terms of the water sector, primarily led by DI, as you mentioned, yes, domestic front, there is a again, JJM is not coming up very prominently.

33:24 So domestic front, to mitigate the domestic risk, we have already started storing the overseas market, primarily the Europe, which is having a peak demand. And we are also getting good inquiry from this market, and we are likely to increase our export order book in the coming quarters. So some of the facilities will be dedicated for export market in the time so that we can actually decentralize or direct the concentration risk on the domestic market. That is the strategy we are following. But how about the other segments, seamless and anything for...

34:12 So okay, is Jindal Gupta. So Salish, in terms of our strategy, overall strategy, if you see in the last two years or a couple of that year or for that matter, we used to have 30% of export, 70% of domestic, maybe 5% plus minus. Now the serious problem is the counter the MENA region. So as the... I mean, any sensible organization would start looking beyond the... Your stronghold. So we are at all possible territories in the regions where we can approach conveniently and economically. For example, for the longitudinal helical pipe, it doesn't make any sense to look at U. S. Or China or Canada.

35:05 We have served to Latin America. We are looking at Southeast Asia where China is not allowed kind of. We are looking at CIS, looking all possible options wherever are coming or can come. So that till that time the issue of MENA regions get sorted, Hello? Ladies and gentlemen, it seems like the line for the management has got disconnected. Please wait till I rejoin the management. Ladies and gentlemen, thank you for waiting patiently. The management's line has been connected. Sir, you may proceed. Yeah. Okay. So sorry. Line again had got disconnected. So I was just talking about, like, looking at very, wherever it is possible, and, hopefully, we should make announcements in some time to come. So... But these are like these are the reasons which earlier we were not focusing very, very specifically, which we are focusing now. And as Rajiv said, for the time being, of course, we have a presence in Middle East, which is getting to Middle East, but now we are looking from Indian facility.

36:20 We are looking all over area. And we have we already have a presence in Italy, and we are likely to we are very looking at it to increase the presence in entire Europe from there. So since you took the name ATE, so in our latest that company's LinkedIn post, it is mentioned that successfully qualified the API five year with minimum lead strength of 70,000 PSA from the for the for transporting pure hydrogen hydrogen. Also, we've applied, I think, one eighteen miles of 18 inch pipe for your products. So so how big is this opportunity for the next two, three years? Or how large, you know, that the size of the demand globally? And also, what is our right to win over global peers in this hydrogen transporting price?

37:24 So, Silesh, yes, there are much talked about business opportunities related to the hydrogen transportation media as a pipe. So we are qualified for that, and we have got some certifications that our pipes are qualified for transportation of hydrogen gas. In that scenario, we are also exploring the possibilities and exploring the market wherever we get the opportunity, we can tap it. We are ready. Our facilities are ready. But still, the ground level demand is yet to come. We have not seen demand in a big way. There are discussions going on, but still at ground level, we have not seen a significant demand in this specific area.

38:18 Okay. Sir, one last thing. Also in our annual report, it is mentioned that first time company in India, we have started manufacturing stainless steel coil tubing. So could you elaborate on addressable market in replication use and also the growth potential in both domestic and export market? Okay. These kinds of oil. In our annual report, we have mentioned about this. This is a specific requirement of one of our customer. So this only shows our capability of dealing with the new requirements of the customer.

39:07 As far as the demand customer and the industry where it is required because of it is customer specific and we are bound to nondisclosure policy of the customer, we are not sharing that kind of involvement in this call. Yeah. Yeah. Yeah. Okay, sir. Yeah. Thank you, sir. All the best. Thank you. Thank you. We take the next question from the line of from Asset Managers. Please proceed. Hello. Am I audible?

39:56 Can you speak a little bit louder? Yes, sir. Sure. Am I audible now? Yeah. Yeah. Yeah. So last call, you gave the... Like, you said that the margins have gotten out. And given that the number are yet not positive, do you think the margins will improve from this quarter or the pressure will continue to quarter two? Yes. Of course, so let me if I understand the question, the question related to the current margins and how the margins looks like, correct? Yes, sir.

40:50 Okay. Yes, sir. Correct. Okay. So margins, of course, have come down because of the whole model has got disturbed a bit because of external factors, because of internal factors like whether we call it the West Asia issue, we call it just given mission and also because of, let's say, the suspension of our API license for seamless pipe, which had been restated. So all sort of issues had impacted the margin, and this has also impacted our overall utilization of facilities, thereby, the absorption of the feed overhead. Moving forward in next couple of months, at least, till the time we are able to utilize our facility to an optimal level, again, the problem might continue because at the end of the day, one is basically like the margins on the production. Second is utilization of the facility.

41:56 We expect because of specifically in the ELSO, ELSO facilities, because of the lower utilization of those facilities. And secondly, we have multiple facilities across the country. There would be some pressure on those products, primarily because of lower capacity utilization. But we expect that this may get arrested maybe in couple of months when we find, let's say, options and solutions to cater to the domestic demand as well as the Middle East demand. So our even if we are not able to, let's say, we don't normally, we don't give the forward looking numbers.

42:44 But in general, we expect that what we have done in the first quarter, maybe second quarter may also be similar or whatever. But we are hopeful that the if everything works well, the H2 would start showing the improvements over the H1. Got it. Just So we to add on, as we mentioned that in the last it was mentioned that H1 will be softer given the geopolitical situation and domestic water industry situation. It was already guided that H1 would should be softer.

43:30 And based on that, results are also indicating the same. Got it. So the intent on the h two being seen a recovery will be intact. Correct? Yes. That is our expectation. Okay. Yes. Okay. And on the working capital side, does this working capital seems to be like normalized at this point? Or will it see an increase after the operations get started and the utilizations improve? So working capital is definitely directly related to the operations because now operations are on a lower side. That's why the working capital is on a lower side. Once the operations started improving, we may see increase in the working capital deployment, and it's a direct correlation and working capital is a part and parcel of the business because it is a largely project driven company.

44:43 You got it. So this is due to the current utilization level that it has been looking at the lower level, Right? Yes. Yes. Correct. Okay. That's it, sir. Thank you so much. Thank you. We take the next question from the line of. From Sumangal Investments. Please proceed. Yeah. Thanks for the opportunity. So what is our current capacity utilization? And can you break the domestic sales between the ductile ductile pipes, seamless pipe, and saw pipes? That's why I know also.

45:31 So, generally, we don't share the product wise sales because we are maintaining the combined pipe portfolio as a secret segment. That's why we are showing the volumes pipe volumes and pilot volumes. So that is something which we are following as a policy of the company. Okay. But what is our total what was our capacity utilization in last quarter? And what was the capacity utilization for last year for 2025, 'twenty six? So capacity utilization was approximately 60%, 65% overall capacity utilization we did in FY 'twenty six.

46:21 And current quarter utilizations are also on the same line. Okay. Okay. But it will not be possible to break sales volume wise in different type of pipes like ductiles and this L SO, H SO? So it is a policy of the company since we are following up segment or five segment as a single segment. So that's why we don't disclose all these numbers product wise. So you can consider overall because this is the kind of a strength of the company that we are total pipe solution provider. That's why all the pipe products are under the same roof. So you please consider as a total pipe volume.

47:18 Okay. Okay. Thank you. So apart from these two Middle East projects, which are likely in 'twenty eight, 'twenty nine, we are not having any capacity addition in between as far as domestic capacity is concerned, right? Yes. No capacity addition domestically? Domestic capacity additions we are looking for. The capacity expansion projects are in The Middle East, like Abu Dhabi and Saudi Arabia. Yes. But in India, there will be no capacity or addition, right, sir? No. No capacity addition in India, we have planned. And lastly, when these projects are towards the end of their implementation cycle, what will be the peak date of the company?

48:20 So that term debt as of now, as we mentioned in the initial remark, it is in the range of INR 500 crore, INR 500 plus. And it's long term debt, almost zero debt. And that will be increased gradually. Once the projects are over, we are estimating the term debt should remain in the range of 3,500 crore approximately. So from INR 500 to INR 3,500, it will jump? Yes. Term debt, working capital is at additional, right? Yes, additional, definitely. Okay, sir. Thank you very much, and all the best.

49:06 Thank you. Thank you. We take the next question from the line of Shaurya Shah from Equity Securities Private Limited. Please proceed. Yeah. Thanks for taking my question. So, of course, the line price business has seen some challenges in the India region. So... But in terms of bidding, right, are we seeing any pickup in bidding of any large upcoming orders in the India line price business? So basically, can you provide us with the amount involved in the bidding pipeline for the company? So that is something which is a market related information or marketing strategy. So that is something which definitely as a process we are adding all the available opportunities, but sharing any specific opportunity would not be appropriate because it is a public platform. And as a company policy, we are not sharing the marketing strategy and marketing policy on a public platform.

50:16 Okay. And for any kind of forward integration, like expanding more into pipe schooling business or any such plans? Maybe not in the near term, but let's say, over the next over the next two years? No. No specific. Sorry. See, the when we are saying the cooling pipe business and all, this is the applications of pipe. For example, our pipes... Our ductile and pipes can be used for cooling as well as for hot application in the different terrain. So we basically produce pipe as per the specification. It it seems like the line for the management has been disconnected.

51:02 Please wait till I rejoin the management. Ladies and gentlemen, thank you for waiting patiently. The management's line has been has been reconnected. Please proceed, sir. Yeah. Hi. We're sorry for the... Again, the lines are getting disconnected again. But what I was trying to explain is that the... We we produce as per the specification and the requirement, and it is up to the customer or the buyer to put it to the use. And I was explaining like we have seen application of our ductile pipes in Middle East, which is being used into various kind of application, let's say, it is also being used for cooling chambers or cooling application, also for the hot applications because that's the properties of the pipe. But we don't put to the application on our own.

52:00 Okay. Understood. Understood. Yeah. So that's it from my side. Thanks. Thank you. Thank you. Ladies and gentlemen, we take that as the last question. And would now like to hand the conference over to the management for closing comments. Over to you, sir. Yes. So we appreciate all of the participant who attended this call, and thank you very much for that, and look forward to have an interaction once again next time. Thank you very much. Thank you. On behalf of ICICI Securities Limited, that concludes this conference.

52:45 Thank you for joining us, and you may now disconnect your lines.