Jindal Saw reported a 78% decline in its consolidated net profit to ₹91 crore for the quarter ended June 30, 2026, down from ₹415 crore in the same quarter of the previous year. The sharp drop in profitability was driven by a significant contraction in EBITDA margins to 9.4% from 16.8% year-on-year, as the company faced severe logistical constraints and supply chain disruptions due to the ongoing Middle East conflict. Revenue from operations rose to ₹4,476 crore compared to ₹4,103 crore in the corresponding quarter of the prior year. Management has indicated that Q2 FY27 margins are likely to remain similar to Q1 levels, though better results are expected in H2 FY27 compared to H1, given the persistence of geopolitical and domestic water industry challenges.

Q1 Financial Performance at a Glance

The company's consolidated EBITDA declined to ₹421 crore from ₹688 crore in the year-ago period. The margin compression reflects the impact of geopolitical instability on export operations, which constitute approximately 30% of the order book, with a majority destined for the MENA region. The unaudited financial results were reviewed by Price Waterhouse Chartered Accountants LLP, Statutory Auditors.

The following table summarises the key financial metrics for Q1 on a consolidated basis:

Operational Highlights and Order Book

Jindal Saw's standalone order book stands at approximately $1,171 million, comprising $1,164 million for Iron & Steel Pipes and $7 million for Pellets. The Abu Dhabi operations, a key subsidiary, delivered approximately 34,000 MT of pipes in Q1 FY27 compared to 48,000 MT in the previous quarter, with its independent order book at $188 million. The company has invoked Force Majeure clauses due to the conflict.

Production volumes for Iron & Steel Pipes stood at 3,71,000 MT, while sales reached 3,62,000 MT. Pellets production was 2,90,000 MT with sales of 2,82,000 MT. The company noted that the water pipe business in India continued to face challenges despite a backlog of orders.

Seamless Pipe Business and API License Impact

The seamless pipe business faced significant setbacks following the suspension of the American Petroleum Institute (API) license from January 2026 to mid-June 2026. This suspension affected the company's ability to compete for certified oil and gas orders during the period and had a notable impact on Jindal Hunting's results. The API license was reinstated in June 2026, which is expected to normalize operations at the Nashik facility going forward.

Strategic and Corporate Updates

The company is advancing its expansion projects in UAE and KSA, including a seamless pipe facility in Abu Dhabi and HSAW/LSAW pipe facilities in Saudi Arabia, both scheduled for commercial production in FY 2028-29. CARE Ratings reaffirmed "CARE A1+" for short-term debt and "CARE AA" with a stable outlook for long-term debt facilities in June 2026.

Jindal Saw has outlined plans to establish manufacturing facilities in Abu Dhabi and Saudi Arabia, with operations expected to commence by FY28-29. The company is targeting an initial production utilisation rate of 50% to 60% in the first year of operations, with full capacity anticipated to be achieved within 2 to 3 years of commencement.

Middle East Expansion: Key Operational Parameters

The planned manufacturing footprint in the Middle East represents a significant geographic diversification for Jindal Saw. The following table summarises the key parameters of the expansion:

Volume and Financial Outlook

On the domestic volume front, Jindal Saw expects FY27 volumes to remain at the same level as FY26, indicating a period of consolidation ahead of the Middle East capacity additions. The Abu Dhabi plant is estimated to generate monthly volumes in the range of 10,000 to 12,000 tonnes once operational.

Regarding financial costs, the company anticipates interest costs to remain steady, contingent on the rupee maintaining its current stability. This outlook underscores the sensitivity of the company's cost structure to currency movements.

Summary

Jindal Saw's planned entry into Abu Dhabi and Saudi Arabia by FY28-29 marks a strategic step toward expanding its manufacturing presence in the Middle East. With a phased ramp-up targeting 50% to 60% utilisation in year one and full capacity within 2 to 3 years, the Abu Dhabi facility alone is projected to contribute 10,000 to 12,000 tonnes per month. Domestically, volumes are expected to hold steady in FY27 relative to FY26, while interest costs are projected to remain stable if rupee conditions persist.