India: Jindal SAW’s turnover edges higher by 26% to INR 112,434 million in FY’22

Jindal SAW’s (JSAW) order book has consistently been at lower ranges around $600-700 million during the last few quarters, SteelMint learnt from company sources. However, due to the increase in operational efficiency, JSAW reported an increase in its income to INR 112,434 million in FY’22 against INR 89,110 million in FY’21.

The company is working with the government to include PVC (price variation clause) in their contract either through EPC model or Direct price model. It is an essential clause for the supply of pipes, where the government buys pipes directly from JSAW. Making the PVC included in the tender document was successful in many states.

“The raw material movement had a compensatory effect on pellets. With the new export policy and softening iron ore, coal prices, it is expected that there will be some easing on Net Sales Realisation (NSR) on pellets and simuntaneously can have a compensatory effect on other products like large diameter Saw pipes (L Saw and S Saw) and Ductile Iron (DI) pipes.”, said Mr. Neeraj Kumar in a statement during the company’s investors call held today.

The company’s inventory levels have gone up due to increased commodity prices and rupee depreciation.

In addition, the three companies namely Jindal Quality Tubular (stainless business), Jindal Fittings and Indore plant (Jindal Tubular) are getting merged with Jindal SAW. This will give a significant advantage to JSAW in terms of product range.

Other highlights

• UAE operations: In Abu Dhabi, the company sold 220,000 t of DI pipes in FY’22, against 204,000 t in FY’21. The current book order stands at 79,000 t. Also, the company updated that Abu Dhabi (UAE) has recently allowed 100% foreign ownership, and the company is among the largest establishments to get 100% foreign ownership. It is expected that Abu Dhabi will become 100% consolidated subsidiary of JSAW this year.
• Update on Jindal ITF Ltd. v/s NTPC case: Case proceedings are being heard by Delhi High Court, the hearings have now been scheduled in July 2022, post court vacations.
• 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 South Indian water pipe requirements. 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.
• Joint venture with Hunting Energy Pte Ltd: The company has entered into collaboration with Hunting Energy Services Pte. Ltd, Singapore, a leading technology company globally in the oil country tubular goods (OCTG) premium segment. The JV will become the ‘Center of Excellence’ with a global strategy and vision. The manufacturing complex at Nashik with a proposed 130,000 square feet is expected to be operational during FY’23.
• DI Outlook: Projects like Jal Jeevan Mission, top line initiatives by the Government of India, and schemes followed by states are supporting a healthy tender flow for the DI business.