Jindal SAW’s total income (standalone) for financial year 2024 (FY’24) stood at INR 182,330 million, higher by 16.1% y-o-y compared to INR 157,044 million in FY’23, the company reported in its investors’ call held on 8 May, 2024.
EBITDA (standalone) stood at INR 32,261 million in FY’24, up by 76.6% y-o-y from INR 18,269 million in FY’23.
Profit after tax (PAT) rose by 126% y-o-y to INR 16,141 million in FY’24 against INR 7,148 million in the previous financial year.
The company’s successful execution has led to a significant increase in sales volume, resulting in higher turnover and improved profit margins. This improvement was further fueled by an increase in exports and stable raw material prices.
The company’s diverse product mix of iron and steel pipes and pellets serves as a natural hedge against the unpredictable fluctuations in commodity markets.
Highlights:
1. Order book position: The company’s current orderbook stands at around $1.59 billion out of which iron and steel pipes orders are around $1,509 million and $16 million are pellet orders.
The company’s order book includes nearly 30% of orders from global markets, which presents a significant opportunity for exports. These orders are scheduled to be completed in the next 9-12 months.
As a result of the high demand in the water sector in the southern region, the company has successfully sold approximately 187,000 metric tonnes (MT) of pipes from its southern division during the fiscal year 2024. Additionally, the order book for the southern division currently stands at around 173,000 MT for the water sector.
2. UAE operations: Jindal Saw Gulf LLC (UAE subsidiary) in Abu Dhabi (UAE) has witnessed an improvement in execution of orders resulting in higher sales of DI Pipes at nearly 191,000 MT in FY’24 from approximately 151,000 MT in FY’23.
Adding to its existing orders, Jindal Saw Gulf LLC (UAE Subsidiary) boasts an impressive order book of approximately $205 million.
JSAW has a significant presence in the overseas market, with the majority of exports occurring in Latin American countries and the MENA region.
3. Sathavahana Ispat Limited (SIL): After acquiring Sathavahana Ispat in April 2023, the company has implemented operational improvements that have boosted their facilities to running at nearly 90% capacity. This, along with their strategic location in South India, strengthens their position in the region and above order book includes orders for these facilities as well.
4. Update on Jindal ITF Ltd v/s NTPC case: Jindal ITF (Jindal SAW subsidiary) won an arbitration against NTPC in 2019 for claims exceeding Rs. 1,891 crore. Both parties appealed to the Delhi High Court and the next hearing is scheduled on 21-22 May, 2024.
5. Joint venture with Hunting Energy Pte Ltd: Jindal SAW and Hunting Energy Services have formed a joint venture to build India’s first premium Oil Country Tubular Goods (OCTG) threading facility. The state-of-the-art facility is located in Nashik, Maharashtra and boasts cutting-edge machinery, automation and testing capabilities to meet the stringent standards of the oil and gas industry. The facility has a threading capacity of 70,000+ joints of casings, tubings, accessories & weld-on- connectors covering a range from 2-7/8 inches to 36 inches.
The JV company is in the process of seeking necessary approvals including API etc., following which commercial operations will commence.
Outlook:
The company’s revenue, EBITDA, and profit after tax all grew significantly in FY’24 compared to the previous year indicating strong execution and improved profit margins.
JSAW has a healthy order book with a significant portion coming from exports. This ensures consistent revenue generation in the coming months. Furthermore, the acquisition of Sathavahana Ispat has boosted capacity utilisation and further strengthened their presence in Southern India.
Overall, Jindal SAW seems well-positioned for continued growth with a strong order book, focus on export markets, and strategic acquisitions.