Electrosteel Castings Limited announced its Q3FY26 quarterly results for the quarter ended December 31, 2025, under Regulation 33 of SEBI Listing Regulations. The company's Board of Directors meeting held on February 06, 2026, approved the unaudited consolidated and standalone financial results along with several key corporate decisions. Following the results announcement, the company conducted a detailed conference call on February 06, 2026, where management provided comprehensive insights into the challenging market conditions and future outlook.

Q3FY26 Financial Performance

The company reported challenging financial results for the third quarter. Consolidated revenue from operations declined to ₹147,180.60 lakhs compared to ₹177,957.77 lakhs in the corresponding quarter of the previous year. The company recorded a consolidated net loss of ₹2,187.92 lakhs for Q3FY26, contrasting with a profit of ₹16,016.58 lakhs in Q3FY25.

Management Commentary on Market Challenges

During the conference call, CEO Sunil Katial explained that the domestic water infrastructure sector has faced significant challenges due to temporary delays in Government spending under Jal Jeevan Mission (JJM) at both central and state levels. The slowdown in JJM funding, which constitutes approximately 50% of the company's domestic market, created substantial demand-supply mismatches across the industry.

Sales volume of ductile iron, cast iron, and fittings declined by 31% year-on-year to 1.34 lakh tonnes in Q3FY26. However, export volumes grew by 11% quarter-on-quarter, with approximately 40% of exports directed to Middle East markets where Electrosteel maintains its position as the largest exporter.

JJM Fund Release and Recovery Outlook

Management provided detailed insights into the JJM situation during the conference call. The Government of India has revised the Jal Jeevan Mission budget outlay to approximately ₹17,000 crores for the current financial year, pending cabinet approval. For the next financial year, ₹67,600 crores has been allocated in the budget presented on February 1, 2026.

Whole-time Director Madhav Kejriwal expressed confidence that Quarter 4 FY26 would represent the lowest point for operations, with recovery expected from April 2026 onwards. The management anticipates gradual improvement in demand conditions with stronger rebound expected in Quarter 2 of the next financial year.

Key Board Decisions and Strategic Initiatives

The Board approved the reappointment of Mr. Sunil Katial as Whole-time Director and Chief Executive Officer for a term of 5 consecutive years with effect from April 01, 2026. His remuneration has been approved for 3 consecutive years, subject to shareholder approval.

The Board also accorded consent for the company to enter into a Power Purchase Agreement for green power requirements at Srikalahasthi Works, with an investment of approximately ₹7.00 crores for 26% equity stake in a Special Purpose Vehicle.

Valve Business Integration Progress

Management provided updates on the integration of T.I.S. Services S.P.A., acquired as a wholly owned subsidiary for EURO 11,500,000. The Italian valve manufacturer reported turnover of approximately EUR 37.8 million (around ₹400 crores) for the calendar year with EBITDA margins of approximately 12-13%. The company expects 15-18% year-on-year growth for the valve business over the next three to four years.

Financial Position and Debt Management

On standalone basis, gross debt stood at ₹1,436 crores, decreasing by ₹455 crores from the previous quarter due to lower working capital requirements. Long-term debt stood at ₹406 crores while short-term debt was ₹1,030 crores. The company received an arbitration award of ₹370 crores during the quarter on account of wagon scheme with South Eastern Railway.

The company recognized exceptional items of ₹3,838.26 lakhs in Q3FY26 due to notification of Labour Codes by the Government of India, representing potential impact on employee benefits as evaluated by an independent actuary.

Electrosteel Castings Limited has announced challenging Q3FY26 financial results, showing significant declines across key performance metrics. The company reported consolidated total income of ₹1,526 crores for Q3FY26, representing a 16.1% year-on-year decline from ₹1,819 crores in Q3FY25. The company recorded a profit after tax loss of ₹22 crores compared to a profit of ₹160 crores in the corresponding quarter of the previous year, primarily attributed to lower government spending on water infrastructure projects over recent quarters.

Q3FY26 Consolidated Financial Performance

The latest quarterly results reveal substantial operational challenges across all major financial indicators. EBITDA declined significantly to ₹88 crores from ₹294 crores in Q3FY25, representing a 70.1% year-on-year drop. The EBITDA margin compressed to 5.8% from 16.2% in the same quarter last year, indicating pressure on operational efficiency and profitability.

Nine Months FY26 Performance Overview

The nine-month performance for FY26 also reflects the challenging operating environment. Consolidated total income for 9MFY26 stood at ₹4,602 crores, down 19.3% from ₹5,704 crores in 9MFY25. Despite the revenue decline, the company maintained profitability with PAT of ₹145 crores for the nine-month period, though significantly lower than ₹541 crores achieved in 9MFY25.

Standalone Financial Results

The standalone financial performance mirrors the consolidated trends with total income of ₹1,290 crores in Q3FY26, declining 23.0% year-on-year from ₹1,675 crores in Q3FY25. Standalone PAT recorded a loss of ₹20 crores compared to a profit of ₹157 crores in the previous year's corresponding quarter. The company sold 1.34 lakh tons of DI Pipes, Fittings and CI Pipes in Q3FY26 compared to 1.39 lakh tons in Q2FY26.

Exceptional Items and Regulatory Compliance

The financial results include an exceptional item of ₹38 crores during the quarter, representing a provision made in compliance with the new labour code. The results were considered and approved during the board meeting held on February 6, 2026, with proper regulatory notifications sent to BSE Limited and National Stock Exchange of India Limited under SEBI regulations.

Future Outlook and Government Initiatives

Despite current challenges, the company remains optimistic about future prospects. The Government of India has allocated ₹67,600 crores for Jal Jeevan Mission in the budget for the next financial year, with a revised outlay of approximately ₹17,000 crores for the current financial year. The company expects execution recovery to gain traction with normalization of government funding and continued policy focus on rural water supply and sustainability initiatives.