JINDALSAW Q2 FY27 Earnings Call: Order Book Potential Hits Rs. 17,000 Cr, H2 Recovery Eyed Amid Margin Squeeze

JINDALSAW held its Q2 FY27 earnings call on October 16, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Revenue Growth Masks a Sharp Profitability Squeeze

• Rs.3,870 Cr standalone gross revenue in Q2 FY 2026-2027 — up 3% QoQ and 14% YoY, but EBITDA contracted to Rs.254 Cr (from Rs.341 Cr in Q1 FY27) and PAT fell to Rs.63 Cr, net of a Rs.30 Cr tax credit.
• H1 FY 2026-2027 standalone revenue rose 13% YoY to Rs.7,627 Cr — yet EBITDA fell to Rs.595 Cr (from Rs.894 Cr in H1 FY26) and PAT dropped to Rs.172 Cr (from Rs.443 Cr in H1 FY26).
• Consolidated Q2 FY27 gross income of Rs.4,518 Cr (+5.8% YoY) — with consolidated PAT at Rs.35 Cr; H1 FY27 consolidated EBITDA margin contracted 5.9 ppt to 8%.
• Net debt narrowed — standalone to Rs.2,245 Cr (Sept 2026) from Rs.2,346 Cr (June 2026); consolidated to Rs.2,174 Cr from Rs.2,473 Cr. Ratings affirmed at CARE A1+ (short term) and CARE AA (long term).
• Management attributed the squeeze to five factors — geopolitical disruption in West Asia (Saudi escalation), delayed shipping/revenue recognition on MENA orders, surging coking coal costs, lower domestic water pipe demand, and cost overruns at the Abu Dhabi DI plant.
• Gross profit per kg fell to Rs.41 in Q2 FY 2026-2027 — from Rs.51 in FY 2025-2026, attributed to unfavorable product mix and the geopolitical situation; management targets a return to previous levels.

Confirmed Backlog Plus $625 Mn LOIs Point to a Stronger H2

• Confirmed order book of USD 1.135 billion (~Rs.10,700 Cr) — with LOIs of USD 575 million (mostly oil & gas exports) plus a further USD 50 million LOI for Southeast Asia, taking the potential total order book to ~Rs.17,000 Cr.
• Total LOIs stood at $625 million as of Q2 FY 2026-2027 — $480 million in exports (CIS: $430 million; SE Asia: $50 million); management expects conversion to firm orders with low risk, with production starting in Q4 FY 2026-2027.
• Execution on new LOIs expected from Feb/March 2027 — supporting management's guidance that H2 FY 2026-2027 will be better than H1, aided by the API license reinstatement (June 2026).
• Order backlog of 2.5 million tons — including 0.5 million ton LOA, with 55% comprising exports and Abu Dhabi operations.
• Export volumes are 41% of the order book but only 28% in value terms — analyst Vipul Kumar Anupchand Shah flagged the gap; COFO Narendra Mantri attributed it to a ~6 lakh ton job work order (water pipes) in the FY 2026-2027 order book where only conversion value is booked, excluding buyer-supplied raw material.
• Job work disclosure requested — Vipul Kumar Anupchand Shah asked management to separately disclose job work orders in future presentations to avoid confusion.
• Rs.6,000 Cr LOI received from a non-linear market on a CIF basis — with inquiry levels in export markets (oil & gas, water sector) described as high.

MENA Delays Weigh on Q2; Anti-Dumping Duty a Relative Positive

• 6 lakh ton MENA order delayed due to transportation issues — management is exploring alternative routes and is not replacing the capacity fully.
• Saudi Arabia government imposed an anti-dumping duty of 16% to 25-30% on DI pipe imports from India — Jindal Saw is not impacted as its Saudi exports come from the Abu Dhabi subsidiary, which management said benefits the Abu Dhabi facility.
• Abu Dhabi DI plant sales fell to 29,000 MT in Q2 FY27 — from 34,000 MT in Q1 FY27, due to the regional conflict; the facility operated at 50% utilization (achieved 34,000 tons vs 43,000 tons).
• Saudi JV (51% stake) for two pipe plants progressing — financial closure expected in coming months; commercial operations targeted for FY 2028-2029, though no orders secured yet. The Saudi DIY project is on hold; the Saudi market will be served from Abu Dhabi.
• Jindal Hunting (51% JV) reported Q2 FY27 revenue of Rs.9.70 Cr — with a loss of Rs.1.5 Cr.
• NTPC litigation split verdict — the Jindal IT IKF vs NTPC matter saw a split verdict in the Delhi High Court and has been referred to a third judge, with the next hearing in January 2027.

Jal Jivan Mission Fund Flow Slows Execution; Capacity Underused

• Jal Jivan Mission fund releases are gradual — leading to slower reduction in receivables and inventory; orders are now being issued by state governments rather than under the central scheme (Q2 FY 2026-2027).
• All ductile pipe facilities fully booked for ~1 year (through FY 2027-2028) — but execution is challenged by delayed project implementation by EPC contractors due to slow fund collection from states.
• Effective utilization at 67% on 2.3 million tons capacity — management guided that improvement in execution is expected from Q4 FY 2026-2027; the historic peak was 1.8 million tons (~75%) in FY 2024-2025.
• Domestic water sector oversupply hit H1 FY27 margins (~6.8% EBITDA) — management expects demand to improve gradually, with the lag impact in the value chain likely to reverse over time (period unspecified).
• US entities (JindalSAW hold) performing well — contributing positively with consistent performance.

Pellet Margins Under Cost Pressure; Abu Dhabi Capex on Track

• FY27 pellet margins under pressure — from captive mines' high stripping ratio and low-grade iron ore (mine depth increased), raising operating costs.
• EC enhancement under discussion with MOEF — management clarified that ROM quantum remains unchanged while total mining volume (including overburden) increases.
• Management aims to reach FY26 pellet generation levels via alternative material sourcing — noting pellet prices are linked to volatile market conditions.
• Abu Dhabi seamless pipe plant (300,000 tons, ~USD 330 million) on track — for commercial operations in FY 2028-2029.

H2 FY27 Recovery Expected, But Guidance Kept Deliberately Vague

• Management expects an upward trend in margins from Q3 FY 2026-2027 — driven by a shift in product mix towards oil & gas and executable export orders.
• H2 FY 2026-2027 expected to be better than H1 — per management, driven by the API license reinstatement (June 2026) and new order execution.
• FY27 pipe volumes expected to exceed FY26 levels — supported by H1 growth.
• Management declined to provide specific H2 FY27 guidance — citing market volatility, leaving the margin recovery path qualitative rather than quantified.