Ladies and gentlemen, good day and welcome to the Jindal Saw Limited Q4 FY 2026 Earnings Conference Call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch- tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Singh from ICICI Securities Limited. Thank you and over to you. Good afternoon, everyone. A warm welcome to Q4 FY 2026 Jindal Saw conference call. From the management side, we have with us Mr. Narendra Mantri, Chief Operating and Financial Officer, Mr. Vinay Kumar, President and Head Treasury, and Mr. Rajeev Goyal, Senior Vice President Corporate Finance. Without taking any more time, I'll hand it over to Mr. Mantri for his opening remark. Over to you, sir. Hi. This is, Mr. Mantri would take up the questions. I'm Vinay Gupta. Let me give the preface and Rajeev, Mr. Mantri, me all sitting together, we would be addressing the questions of the participants. If it is okay, can I start? Yes, sir. Okay, fine. Good afternoon, everyone, and welcome to the Jindal Saw's FY 2026 earnings call. I'm Vinay Gupta from Jindal Saw. We'd like to extend our thanks to the ICICI Direct team for organizing this session and facilitating the discussions. The Board of Directors approved the audited financial results for 2026 on April 27th, 2026, which has since been filed with the stock exchanges. We trust you have reviewed these documents. Now let me present the highlights and of the financials and some brief about that. First of all, performance in Q3 improved relative to the immediate previous quarter of FY 2026, and we expected, and we mentioned in last call that Q4 is expected to be better than Q3. This is what we mentioned on the call for Q3. On the contrary, the performance of Q4 of FY 2026 dropped across if compared with the previous quarter, which is Q3. Performance of FY 2026 also dropped as compared to FY 2025. Before we go to prognosis and what is happening, let me very quickly cover the numbers, the highlight numbers of standalone consolidated quarter and full year. For the financial year, on a standalone basis, the company registered a total income of INR 3,852 crore, representing a decline over Q3 FY 2026 by approximately 7%. EBITDA for Q4 FY 2026 stood at INR 413 crore, showcasing a decline over Q3 FY 2026, which was INR 527 crore, representing a decline of INR 22 crore. Cash for Q4 is reported at INR 114 crore, showing a decline over Q3 FY 2026, which was INR 227 crore. It represents a decline of 50%. On consolidated basis, for Q4 the total income stood at INR 4,657 crore as compared to INR 4,963 crore in Q4 FY 2026, representing a decline of 6%. EBITDA for stood at INR 504 crore, showcasing a decline over Q3, which was INR 632 crore, was a decline of 20%. Cash for Q4 FY 2026 is reported INR 124 crore, showing a decline of decline over Q3 2026, which was INR 248 crore, representing a decline of 50%. Now let's talk about the full year, FY 2026 and FY 2025. On a standalone basis, the company registered total income of approximately INR 14,745 crore, representing a decline of approximately 19% as compared to FY 2025, where the total income was INR 18,178 crore. EBITDA for FY 2026 is INR 1,835 crore as compared to INR 3,456 crore for the previous year, representing a decline of 47%. Cash for FY 2026 is reported at INR 784 crore against INR 1,874 crore, representing a decline of 58%. On consolidated basis, the company registered a total income of approximately INR 17,987 crore as compared to INR 20,948 crore, representing approximately 14% decline. EBITDA for 2026 is INR 2,306 crore as compared to INR 3,548 crore of the previous year, showing a decline of 35%. Cash for FY 2026 is reported at INR 925 crore against INR 1,458 crore, representing a decline of 37%. In terms of our indebtedness, as on 31st March 2026, company's standalone net debt reduced to INR 2,453 crore as compared to INR 3,154 crore on the previous year, and this includes long-term debt of INR 529 crore only. Net institutional debt on consolidated basis has reduced to INR 2,528 crore as compared to INR 3,346 crore, which was on 31st December 2025. Long-term debt on 31st March was INR 692 crore only. Debt profile of the company remains robust despite the business volatility. The prognosis for the results are, number one, Q4 and FY 2026 saw a decline in overall sales, primarily driven by weakness in the Ductile Iron Pipe segment amid ongoing water infrastructure sector challenges. Despite positive policy announcements under the Jal Jeevan Mission, project execution on ground remains sluggish, impacting our total water pipe business during FY 2026. Despite a robust export order book, including 6 lakh metric ton of [JAWAQ] contract from Saudi Arabia, all export shipments have been suspended since March 2026. This is due to the activation of the force majeure clauses following the outbreak of the military conflict in the MENA region. No shipment has gone from 1st of March 2026. Export business typically yields higher margin as compared to domestic. The deferment of all the planned export shipments to MENA region of all kinds of pipes in March 26 resulted in lower Q4 profitability as compared to Q3, missing our original expectations. This will get reflected in 2026-2027 once the shipments will start. This is basically a deferment or postponement on the timescale. Company also reported an INR 48 crore foreign exchange cost during this quarter following the revaluation of U.S. dollar-denominated exposures. This was driven by the rupee's sharp decline over the quarter. It fell from INR 88.88 per dollar to INR 94.84 per dollar. This is perhaps one of the quarters in the last so many years, reflecting a depreciation of more than INR 5. Some update on our Carbon Seamless Pipe segment. On February 15th 2026, we reported to stock exchanges about developments in our Carbon Seamless product. It was reported following an API audit, non-conformances were identified. A suspension letter was issued prohibiting the use of the API monogram on our Seamless Pipes. All requested data has since been presented to API authorities within the specified timeframe. All NCRs have been formally addressed and closed as per the requirements of API authorities. Auditors appointed by API authorities are scheduled to revisit our factory in Nashik in May 2026 for verification. Following this, the final approval to use the API monogram on a seamless pipe is expected in due course. Given this, providing a specific timeline for approval at this stage would be very speculative. Due to this regulatory timeline, we anticipate a temporary impact on our sale of API seamless pipes. To mitigate the impact, the company is leveraging flexible manufacturing capabilities to relocate production towards alternative Seamless Pipes products to minimize the loss on account of the overall volumes and the business. Profitability in API business typically is comparatively better than the non-API business. The MENA region has impacted all the businesses who are catering to MENA region or any inflow or outflow to that region, and we would like to address that point also. You know like following the escalation of conflict in the MENA region starting 28th February 2026, we are experiencing severe logistic disruptions, including non-availability of vessels. Consequently, all shipments from India and Abu Dhabi facilities in Middle East are suspended until further notice and further until safety conditions allow for safe passage. Abu Dhabi plant sales are restricted to customers in the countries which are within the trucking range. We are continuing the business, but wherever the trucks can go. Where the ships have to go, that business is temporarily suspended. This has impacted Q4 and FY 2025-2026 sale and profitability at standalone and console level, and where the revenue recognition is deferred to 2026-2027. This ongoing crisis in MENA region has necessitated a strategic shift towards securing energy infrastructure, generating new opportunities for pipeline expansion, repair and replacement, particularly for projects designed to bypass volatile maritime choke points. This transition is accelerating investments in infrastructure that bypasses high-risk areas, offering substantial opportunities for pipe manufacturing and EPC providers. We expect the countries in MENA region to invest significantly in the replacement and new pipeline infrastructure for oil, gas and water. Similarly, India will also need to invest significantly to work on energy security. We may expect new pipelines requirements in the next couple of months. In March 2026, the government has issued a landmark order to fast-track piped gas rollout across the country. Bureaucratic delays, excessive charges, and local bottlenecks that once showed up projects are now being swept aside, and time-bound approvals and decisive central backing. Apart from this, ONGC has also announced in March 2026, deepwater exploration projects of approximately $20 billion. What is there for us in all of this? While conflict in MENA region present significant challenges, the resulting shifts are creating new avenues for growth. Jindal Saw is actively capitalizing on these emerging opportunities through strategic expansions and local manufacturing in the region itself. As you know, company has already announced its investment plans to set up a Carbon Seamless Pipes plant in Abu Dhabi through our subsidiary. There are good developments in the project. A developed piece of land with civil infrastructure has already been secured. Ordering for equipment with advanced payments and opening of LCs has started. Project company has signed long-term lease agreement with AD Port for land parcel. In Saudi Arabia, company has established a joint venture company with its investments of 51% and balance 49% is by Buhur for Investment Company in KSA. This JV will set up a LSAW and HSAW facility. Land for one of the project has already been secured. LC has been established for few of the equipment. Our endeavor will now be to set up all these plants in Abu Dhabi and KSA on fast-track basis. Now let us discuss couple of other matters, including subsidies and joint ventures. In UAE, the recent conflicts in MENA region have disrupted the operations of the Abu Dhabi facilities also. The facility remains in a highly impacted area in this region. Due to these circumstances and with employee safety as our top priority, operations have been reduced to meet essential demand. The sale from Abu Dhabi plant are restricted to customers which could be served from the truck. In this backdrop, in Q4 of FY 2026, Abu Dhabi company delivered approximately 48,000 ton pipes as compared to 52,000 ton in Q3. As of March 31st, 2026, the subsidy holds the order book of approximately $180 million, which is close to 170,000-171,000 metric ton, giving a visibility of approximately 9 months of operation. This is independent of the order book of Jindal Saw Limited. In Jindal Hunting joint venture, this joint venture where Jindal has 51% and Hunting has 49%, we generated a revenue of approximately INR 149 crore with INR 43.2 crore of PAT. This is bit lower as compared to previous year, where the top line was INR 177 crore and INR 51.5 crore was the PAT in FY 2025. In case of our ongoing litigation with NTPC, the matter is moving. Matter is moving with the NTPC in Delhi High Court at double bench. Majority of the argument by both the parties are completed. There may be one or two more dates before the court reserves its order. Now with this backdrop, before I conclude this presentation, let me summarize. The Q4 FY 2026 performance did not meet our expectation of exceeding Q3 results, primarily due to the reasons we mentioned above. Factors contributing to Q4 muted performance persist, we expect its impact on Q1 results of the current year also. If situation improve, we have capability to ramp up the business very quickly. As of now, as we speak, this quarter, at least a few more weeks or a few couple of some time looks to be getting impacted. Improved conditions in MENA region will enable the company to rapidly accelerate export shipments because our order book comprise of roughly 29%-30% export to MENA region. Lot of shipments are on hold. We would try to push as much as possible immediately the shipments open. There is an announcement by the government relating to Jal Jeevan Mission, with allocation, cabinet approval, and funds getting released by the center to state gradually. This will revive the part of water pipe business, where Ductile pipe business would take the lead, and this will be helpful for the operations of the company and the industry as a whole. Company's new initiatives in Abu Dhabi for seamless project and in Saudi for saw pipe projects are expected to yield good results once these plants are set up and become operational. In today's volatile time, our high liquidity provides a critical buffer. With a deleveraged balance sheet and strong working capital lines available with the banking system, we are well positioned to fund future growth. We have made capital expenditures across our Indian facilities to drive growth. These expenditures focus on debottlenecking, enhancing operational efficiencies, and providing infrastructure to our staff at the plant. Now, to end this presentation, we would still like to add one more line that we are witnessing unprecedented times, where projecting the business for future is very unpredictable. The management is taking all possible steps to safeguard its interest and see how best we can ramp up the operations and business in domestic market, pending the export markets open up. With this note, let me request if there is a question, we open the floor for the question and answers. Operator, please start the Q&A. Thank you. Yep. Thank you, sir. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a headset when asking a question. Ladies and gentlemen we will wait for a moment while the question queue is assembled.The first question is from the line of Dhananjai Bagrodia from Alchemy. Please go ahead. Hello. Firstly, congratulations on good set of numbers in a tough environment. Just wanted to ask you, how are we getting feelers from these other regions? Or demand. Are we seeing much more volume uptick, let's say, in FY 2027? Any, like, numbers we can think of? Yeah. Hi, Dhananjai. This is Vinay Gupta. Dhananjai, at this point of time, if you're talking about the export business, like if you're talking about the MENA region. Yeah. The interaction with lot of customers is not happening on face-to-face basis. What we are trying to accumulate the information and intelligence is from the public, let's say, public base, public platforms and public media. We of course, since we now have presence in Saudi and Abu Dhabi, we are. Our people are trying to get some sense from various stakeholders, including the oil and gas companies there. That is how they are perceiving, how they want to go forward. Having said all this, if you, if you're tracking, there are lot of media news where the projects which were in the cold storages, the projects which were stuck for whatever reasons, there is the urgency to push those projects. I'm not saying they will come overnight, but they would cut short the timelines, and there will be urgency in doing this. that if this stalemate converts into the stalemate of Ukraine-Russia, then what is going to happen? Eventually there would be some urgency now in the region, and that could be helpful and that could be beneficial for the industry as such. What about India? How is the India demand? How are we seeing that coming on? India water demand remains. The only thing was the water business. Jal Jeevan. Jal Jeevan Mission. Jal Jeevan Mission gave rise to another kind of, let's say, business opportunity, where the state governments are arranging the funds and state governments are giving the orders. Mm-hmm. This is independent of Jal Jeevan. The whatever business has happened in the sense of fund release from the Jal Jeevan was on account of state. That is bit competitive, but we expect that the macro level demand has not died down. Macro level demand remains the same. It is only deferment. Hopefully this year the business should pick up and the industry should respond very quickly. Everybody has the capacity, everybody has order book. We are gearing up. We in fact, our fourth quarter sale is comparatively better than the Q3 sale for water business. Sure. Sir, with steel prices going up as they are, do we think we'll have a hit via inflation or will you be able to pass it on on margin? See, we don't accumulate or hold steel in anticipation of getting the order. Okay. it is basically like it's a very narrow within a very narrow timeline. Mm-hmm. We book the steel the moment we get the order for the pipe. Eventually, the volatility in the raw material prices is to the account of the manufacturer, so for us, let's say in this case. That is why number one, like for example, if these are the steel pipes, then we don't know like what kind of, let's say diameter, thickness, metallurgy the new order will have. That is where the order is placed only once we receive the firm order for steel pipes. This situation normally does not arise that the steel pipe going up and down is impacting the pipe layer very significantly. Okay. Margins henceforth, we have bottomed out in 2026 and margins should now just be onwards and upwards? Can you repeat your question? Sorry. I'm saying sir margins, would you be fair to say margins have bottomed out and now margins would just be higher from here going ahead? That's what we thought, for, at the call of Q3 we said that perhaps it has bottomed out. Okay. It's a function of all the things. Margins is not a function of only like raw material and steel price. If my capacity is underutilized, the fixed overheads start hitting you. Now, lot of contracts what industry is today, serving. They are delivered product. They are, in case of international, they are duty deliver product. Now nobody knows like how the after the 5th of May, what the crude prices will be in India also. Right? You people are analysts, so you would know like whether the crude price goes up or the diesel price goes up, right? The freight cost will go up. There are a few things which are beyond the control. The assumptions for the profitability normally are made in the, let's say, a stable condition. As we mentioned in the very last line in the presentation, that it's. These are very unpredictable, unprecedented times. Everything is looking haywire. If you say that this is bottomed out, maybe, may not be. Okay. Got you. Any other risk we can think of in terms of obviously one macro risk, any other risk we are seeing at the moment, because just trying to understand just from the business risk perspective. See, we, our this commentary actually is full of risk, what we said. Yes. We have not given you high expectation except that like, we are setting up the projects in the MENA region. Our perspective was to highlight to the stakeholder, to all of you like we are living into the risky environment. We highlighted each and every risk. We highlight Jal Jeevan Mission, we highlight the international shipping issue, we highlighted our API business issue in carbon and steel. We highlighted the water business in Jal Jeevan. I mean, there could be still issues which are very difficult to project this point of time. As I mentioned, like if there is a spike in the diesel prices, all costs will become inflationary. There are certain measures which the management can take in terms of, let's say, controlling those risks. There still would be few risks which we may not be able to control, but given the like, good liquidity, good, let's say position of the company and the balance sheet, some of the risk we can still handle. Okay, sure. Last question for me. What CapEx number are we expecting for the next couple of years? The CapEx? For the next couple of years, how much more CapEx we will do? Yeah. Okay. Few of the CapExes what we are doing, what we have done in last one or two, three years time, maybe we are at the last portion of those schemes. Mm-hmm. Maybe let's say INR 500 crore-INR 700 crore all across India in this year. Mm-hmm. Three project, what we have announced in Saudi and Middle East, they are of course, sorry, Abu Dhabi. Abu Dhabi at this point of time, like, for a Seamless Pipe project, we are 100%. We are still trying to work out like what would be the debt equity, what is going to be the revised project cost. Right. We are trying to bring some more efficiency in that project in terms of cost. In Saudi it is a joint venture where we are 51%, so our cost, net impact of the cost on our balance sheet will be lower. Otherwise, we are not expecting, we are not putting very significant, let's say brownfield or greenfield projects in India. We are trying to, let's say we try to work with the available capacity within India, but just trying to see like how best we can de-risk our business model. For example, if Ductile pipes had taken a back seat, we are working out like the facility should not stop and let's try to work out different options for that also. The different sizes, export, domestic shift and all those things. Okay. Sure, sir. Any number we have? Only INR 5 00 crore-INR 600 crore. Is that or it'll be more than that? The CapEx number? Yeah. Total. Yeah, for this year we expect INR 500 crore- INR 600 crore. For next year? I'm just trying to get a broad base. 2027, 2028. INR 500 for 2027 and for 2028. Okay. Let's put it this way. We have roughly 10 locations in the country. Right? Earlier somehow we used to say INR 250-INR 300, but every time it works out to not less than INR 400-INR 500. Sometime when one or two more schemes are going on, some replacement, all these things. Maybe like this year we have done INR 700-INR 800. Next, 2024, 2025, 2026 we did what? INR 700- INR 800. INR 800. Maybe you can consider INR 500-INR 600 this year, INR 400-INR 500 next year. Something like this. Sure. Thank you, sir. Thank you so much. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address question from all the participants in the conference, please limit your two question, two per participants. Should you have a follow-up question, we would request you to rejoin the queue. Thank you. The next question is from the line of Digant Haria from GreenEdge Wealth. Please go ahead. Yeah. Thank you. Thank you for giving me the chance. Sir, I had one question. See, the macros are very uncertain, and we may not want to guide, that's perfectly fine. Just wanted to know that in all the products that we have, you know, basically saw pipes, seamless pipes, ductile iron, stainless steel and HDPE, do you see any overcapacity in the system? Like, you know, if the demand bounces back, say water in the next 12 months and, you know, oil and gas after, say, you know, another six, nine months. You know, will we again go back to the old levels of profitability or is the capacity in the system high that we may need a higher level of demand to go there? If you can just, you know, segment-wise explain how do you see the overcapacity or, you know, in each of these segments where we operate? Yeah. Rajeev, would you explain this? As you mentioned that, overcapacity position, if there is a demand which is coming back. What we feel that in Ductile Iron Pipes, there may be some over supply in terms of capacities. Apart from this, other segments are well placed, like Longitudinal, Helical, as well as Seamless. If in future demand is there, the capacities are available to cater the demand. There will not be any overcapacity, but the Ductile Iron Pipe is something which we feel that overcapacity position is there. Okay, okay. You know, in these Ductile Iron Pipes, can we do something else in those lines or no, we'll have to live with the lower utilization for some time? Honestly speaking, yes, there will be, we have to live with this condition because major capacity extensions in DI pipe was in the estimation or anticipation of demand from Jal Jeevan Mission and multiple projects at the state levels. As of now, because Jal Jeevan Mission scheme is not kicking off very well. This position seems to be remaining as it is for quite some time. Got it. Got it. Sir, one data point is how much sales did we lose in, you know, because of the Middle East war, you know, like not getting ships, not delivering products. We did like 13.76 lakh, you know, say tons of volume this year. Like how much would we have lost? Just in this quarter, how much would you have lost in terms of INR crore? Like what would be the revenue loss? Basically, there is no loss per se. It is a deferment because shipments are going to go once the situation is improved in this region. Approximately 30,000-40,000 material was ready for shipment, which got deferred. Apart from this, there is no loss as such. This is the deferment would be worth say INR 30-INR 40 crore, right? In terms of value, it would be more than that. As of now, we have the quantities available which got deferred. Okay. Okay. Okay. Okay, fine, sir. Fine, sir. Thank you so much. I'll come back with you. Thank you. The next question is from the line of Gaurav Nigam from Tunga Investments. Please go ahead. Yes, sir. Thank you for taking my question. Sir, I have two questions on the Stainless Steel Pipes business. The first one is on the Stainless Steel Seamless Pipes business, sir. I mean, we are hearing a lot of peers adding capacity, they are receiving approval in the critical piping segment as well. Wanted to get a sense from you on the, its impact on our overall business, both in terms of capacity, overall industry capacity, and on the margins in this business. That question number one Stainless Steel Seamless Pipes. second one is on the Welded Stainless Steel Pipes. I wanted to get a sense from you because I think there has been some decline in the overall margins in this business. How are the things shaping up and how do you think about that business going forward? Okay. In Stainless Steel Pipes business, we are trying to capture the, you know, the upper end segment or the customer who requires more stringent quality. Impact of that will come, I think, in this year, in second half. Otherwise, I must say that complete business of the Stainless Steel will face the, you know, margin challenge. Okay. Sorry, sir, are you talking about the Seamless business or Welded or both? Both. I am talking both. We have to capture the value-added product. For that, as you mentioned that, we are trying to get the approval from the customer end for our facility and for our products. Fine. sir on the Welded side, is there upper segment as well? I thought that that would be true for the Seamless business. Is there upper segment within the Welded as well? Welded also. Okay. Okay. We are trying to move up the ladder in terms of quality. Yeah, yeah. That is the only way to, you know, capture the high end or high margin business. That margin expansion will happen from the second half of FY 2027. Is that the expectation, sir? Yeah. Yeah. Actually, say, as already mentioned by Mr. Vinay Gupta, that at this point of time everybody is, you know, little slow in investments and slow in giving the orders. Okay. Okay. Got it, sir. Got it, sir. Thank you. Thank you. The next question is from the line of Vanshika Jain from Aequitas Investments. Please go ahead. Hi. We lost you. Sir, the line dropped. The next question is from the line of Sailesh Raja from B&K Securities. Please go ahead. Yeah. Congrats, sir, for reporting strong past year CFO of INR 1,800 crore, even in these challenging times. Given the lower order intake expected from the Middle East due to ongoing challenges, and talking about the new order intake, how are you approaching our selection in the near term? Is it specific to our Helical Saw capacity? Do we wait for a recovery in MENA region to, you know, secure high margin orders? Are we open taking up, you know, the lower margin orders in the domestic Helical Saw segment to support utilization level? What is our near-term strategy? Sailesh should presume this situation would start working out once the region is fully operational. To the edge of knowledge, a couple of regions are there where people are flying for their safety. For example, UAE, right. The life is still not back to track. Saudi is still working, operational, but I mean, the business has taken a bit backseat for everybody. Our stronghold in MENA region are like Saudi, of course, Qatar, Oman, Iraq. Iraq is equally disturbed at this point of time. People are not thinking of giving the order immediately. The discussions which perhaps are happening that how they have to create the energy security mechanism in near term. It might take a year, two year, three year, whatever. Mm-hmm. Coming to your second question. Let's presume that there's a normality in the region. Everything has been sorted out. Shipment is not an issue. Ships are available, insurance premiums have come down, insurance available, and all those things are there. Of course, we would like to, let's say, and we would like to have the order book, which should give a reasonable amount of visibility in terms of timing and high utilization. We are still booked. Our facilities are still booked, provided that we are allowed to produce and sell. It's not that we don't have a slot available to take the order for immediate next 2 months, 3 months. We actually we are fully booked for 2 quarters. If we have to given the option to take order, we might not be able to take order for next 2 or 3 or 4 quarters time. To my understanding, the industry is reasonably booked for export as well as domestic. The only thing is, the challenge is that you don't have means to transport and dispatch. Mm-hmm. Mm-hmm. Okay. Okay, sir. Just to give an example, for the job work order what we have, It's a 6 lakh ton order, and we are setting off roughly 2 lakh ton of steel, which is supplied by the buyer. We are holding on the steel, and you can't supply the pipes. We are not making the pipes. I mean, storing the pipe will be a larger problem than storing the steel. Okay. Sir, you know that both Indian and local players, including ourselves, are adding capacities. Do you believe that there is a sufficient demand to support attractive returns like 3, 4 years payback on this investment? Also, could you please talk about, you know, the opportunities in the GCC region for HSAW, LSAW and DI Pipe? Okay. Let's talk about the seamless and which is ductile. We are not adding additional capacity in Ductile. Okay. It is basically like we are trying to set up a complementary facility of our Abu Dhabi plant. What we are trying to do for our Abu Dhabi plant, that we should be able to have the access to the entire MENA region. Wherever there is some bottleneck, we are trying to, let's say, set up a complementary facility for that. It's not a full-fledged plant of, let's say, starting from the from blast furnace going up to the finishing and everything. In case of seamless and saw pipes, they are greenfield projects completely integrated with coating, all kind of coating and everything. In terms of, let's say the demand, we are fully conscious that there are the competition is already there. They have acquired or they are setting up, and we are considering, yes, the competition is always good for a healthy market, but we believe that there is enough demand and the demand has, demand is likely to increase exponentially because of this new crisis which has emerged in the MENA region. This is giving additional, this is top up on that, plain pizza. Right. I mean, we won't like to discuss too much on the call, but we understand that there's enough on the plate. Okay. Okay. One last question. As we plan to undertake significant CapEx over the next two, three years, with current net debt at, you know, INR 3,400 crore, what do you expect that peak debt level during this CapEx phase? Additionally, what is the peak net debt to EBITDA that we are comfortable operating at? See, we try to communicate to everyone that, let's differentiate between the working capital debt and the long-term debt. Out of the current debt, the stand-alone INR 2,500, console INR 3,200. The long-term debt is hardly at stand-alone INR 525 crore. At console it is INR 650 crore. There's a good amount of appetite of the lenders to lend the long-term debt to the company for setting up the projects. Mm-hmm. The since the it says we have demonstrated in the UAE in last couple of years, there's a good amount of traction amongst the lender. They want to lend to us. As you know, like, because Indian lenders are also geared up through the Gift City or direct presence into the MENA region, they are equally interested to lend this. Appetite-wise or can the balance sheet handle increase in the debt? Yes, balance sheet can handle increase in the debt. Secondly, as you mentioned that in Saudi it's not a 100% subsidy. We would be 51. A proportionate, at the best a proportionate, let's say, impact would come. In terms of debt to EBITDA, again, if you have to include the working capital debt into the overall indebtedness and then to test it, this of course will be on a bit elevated level. Okay. It depends like what we are talking, when we are talking, because in 2024- 2025, we had EBITDA of INR 3,500 crore, and then we thought that in two years' time we would have significantly higher EBITDA. Mm-hmm. If we go back to that similar levels in some time, we would still be in the range of, let's say 2.5 of debt to EBITDA, all including working capital, everything. Yeah, yeah. Okay, okay. Okay, sir. Thank you, sir. All the best. Thank you. The next question is from the line of Vanshika Jain from Aequitas. Please go ahead. Hello. Thank you for giving me the opportunity. My first question is in terms of, we have started our business in Saudi and you had, you mentioned in your opening remarks about how things are not moving there. Considering things is normal evolved as to be a better state, how do you think the demand panning out over there? Also, a lot of our competitors also have their factories based out of Saudi. How do you see the competitive intensity there? Okay, Vanshika. First of all, like once that normalcy is there in the system, our domestic facility in India, that will be fully functional and we'll start executing the export order. We have pipes in store, we'll start producing the pipe out of the steel given free of cost by the buyer to us. That's one. Secondly, perhaps you want to mention like how the domestic, how the demand in Saudi or neighboring countries would be taken care of. I, in my view, in next one year, the majority of the requirement would still be serviced from the import in Saudi. Because like the, whatever let's say the people are doing, they will still take some time to set up, take approvals and then meet the criteria and do it. Till that time, if a major requirement comes that hopefully that would be serviced out of India and in next 2 years' time, we would also be operational, others will also be operational. It would be like how much demand is coming and how this is being serviced from the local units in the MENA region. It is not only Saudi. We are trying to gauge the sense. There is likely demand from neighboring countries of Saudi also, which would be serviced from Saudi and then by India. Okay. My second question is in terms of coal cost increase, which we are seeing. I think the coal cost has increased almost 10%-15%. How is this, how has the cost escalation being impacted? How much is the spot and, like how is it in an order booking? No. Can you come back? Which cost you said will increase? Coal. No. We never mentioned the coal. We said, we gave an example is that how the inflationary trends can impact the profitability. I gave the example that if, let's say, the fuel cost increase or diesel cost increase or anything which is pushing the shipments increase, it has a overall impact on the profitability because in case of sale, majority of the sale happens on delivered basis. Whatever orders are sitting in the order book for last couple of months or every year, then some cost, there will be some impact on the profitability on account of the increased cost. Of course, we would try our level best to pass on some of the cost, but there's no guarantee that this cost would eventually be passed on to the buyer. Earlier I remember, we used to say that the variable contracts where the total pass on was around 30%-35%. Has this percentage increased for us in terms of variable contracts? No. When we say like there's a mechanism, that mechanism is restricted to, let's say, the type projects. That was based on the, I think [Figaran] prices indexation. It is not for each and every component of the product. It is the [Figaran] based prices. That because [Figaran] has its index, [Figaran] pricing is fairly, let's say, transparent. That was where, let's say, lot of volatility was there in the iron ore and coal prices and then some of the contracts had the this. Escalation. Escalation clause. Right. Vanshika, as you mentioned that, 30-33% or the strategy was like that in ductile and pipe, to pass on the cost or to protect the company in from the volatility in raw metal prices, especially for ductile. It was like that we do have the stocks with us also, coal stocks. We are getting the coal ships every quarter. That is something which is already inbuilt in the pricing mechanism. Apart from this, certain states came out with the escalation clause at as Vinay mentioned, through which that if the prices are moving beyond certain limits, then escalation metrics were there, and we could pass on certain escalated costs. That is a strategy which we are already following. But that is predominantly for the local market. Ductile. Yeah. Yeah, domestic. Local market. Domestic market. Got it. Got it. And in terms of DI pipes, I think you mentioned in your investor report that you have a 1 year's order. However, we are seeing that some state finances were not getting the amount, et cetera. How is the execution pace right now, and what do you think of newer avenues like Jal Jeevan Mission 2.0 and PNG, incremental adoption of PNG, how will this help? PNG? Yeah. Vanshika, PNG, we are mixing PNG with Ductile. No, no. Yeah, okay. The first question is for Ductile. Let me just break my question. Okay. First question is for Ductile. Okay. Yeah. Okay. Ductile. Ductile for the scenarios, right? Okay. Let's, let's first discuss about ductile. On, let's say very high level, ductile, if 6-9 months ago, people were focused into Jal Jeevan Mission primarily, and then there were some setbacks on liquidity issues in the Jal Jeevan Mission. The states also moved to issue the orders based on their arrangement of financing. That's where the new contracts which were coming, they were coming backed by the state funding. State was arranging the funds through the multilateral agencies, domestic, international, whatever. There the they were not depending on the Jal Jeevan Mission funding, whatever it is. Mm-hmm. Those orders executions had also started, and with the pricing, and profitability on those orders are different as compared to the pricing of the old orders. We understand that the Jal Jeevan Mission, like there's some momentum in that. There's a, there's a paper news also like, in the, in the open public platform that center has released funds to some of the states which has gone to the state government. State has to in, let's say induct their own funds, whatever percentage it is, and then they will start moving the funds to the EPC and all. That system is still getting formalized. We understand that there'll be new mechanism, monitoring system. The, the motto of the Jal Jeevan Mission is also shifting from putting infrastructure to ensuring the service at the, end level. There might be some initial hiccups in terms of fresh implementation. Once it is set up, then there'll be like, it will business as usual. There'll be more monitoring from the center also, it will be business as usual. Pending that, the execution has a higher mix of state-backed funds backed by state funding, those executions are happening currently. That is also reflected out of our fourth quarter sale, where majority of the sale is for the state-backed funding. Of course, we are supplying to EPC. Then second question is the PNG. No, the second question is for the Jal Jeevan 2, the second 2.0 which has come. When is the execution going to start? If the current execution has not been completed and the money has not been received, how do you see the Jal Jeevan Mission 2.0? As of now the system, the whole system, because people like us or any pipe producer is in the value chain. We are in the supply chain only. We don't interface directly with the state or the center. That interface is by the EPC. We supply pipe to almost every EPC who is buying pipe from anybody and everybody. The challenges with the EPC for the liquidity, you would be keeping, you would be talking to those also. There is issues with the EPC. They are small, large, medium size. Funds would be released to them. They would settle their initial issues, then they will start buying it. We still feel that it might still take a month or two before the execution starts in a reasonable pace. Okay. You think. Maybe post monsoon then. Yes, you're right. Could be. It does not mean that we are not producing. We have a mix of business or orders, state-backed as well as Jal Jeevan. Okay. state-backed is happening, Jal Jeevan is not happening, right? Jal Jeevan is not happening in the full thrust. Right. If this MENA region logjam is cleared, we have export consignment which are on hold, even those will go. Okay. Okay. For City Gas Distribution. Sorry to interrupt, Mr. Vanshika Jain. Please rejoin the question queue for more questions. Sure. Thank you. [This is Riya this side]. Thank you. Yeah. Thank you. The next question is from the line of Sunil Kothari from Unique PMS. Please go ahead. Mr. Sunil? I think he's not connected. Yeah. The next question is from the line of Falguni Dutta from Mansarovar Financials. Hello. Please go ahead. Yes. I just have one question. Can you just give us a idea about the current demand for the Seamless pipe industry, I mean, industry as a whole, also the margins there? Demand in Seamless segment, domestically it is more or less 1.5 million approximately, and there are multiple players. As a government or the PSUs have announced certain projects in deepwater exploration, we can see some opportunities, big opportunities to come when these projects are executed. Announcement is there, intent is there, government is focusing on it, so there will be a demand, and there will be a matching capacities to cater this demand. Okay. You said it's 1.5 million ton. Am I right, the demand? Yeah, yeah. In domestic. Okay. Sir, how are the margins there as of now? I mean, if you were to compare it to last year. Margin product wise we are not discussing because we have multiple products. You can get some sense. No, this is, I'm asking you directionally that how would be the margins in that segment as of now versus last year directionally, not in terms of absolute per ton. Directionally there will be improvement. Being better, flat, lower. There will be improvement in margins in Seamless segment because we envision that demand should remain robust and that will actually result into the little bit better margins. Okay. Sir, broadly, if somebody were to be buying steel from outside and making steel pipes, then in a rising steel price scenario, should they be in a better off situation or it's not like that? No, it's not like that. Okay. Okay, that's all from my side. Thank you, sir. Thank you. We take this as a last question. I now hand the conference over to the management for closing comments. We thank you very much to all the participants on this call as well as to ICICI Direct for hosting this call. We hope that the issues, what we discussed, gets overcome ASAP so that we have a good call next time. Thank you very much. On behalf of ICICI Securities Limited. This call is being recorded. Genworth, that concludes this conference. Thank you for joining us. You may now disconnect your lines.