Jindal Saw Limited (NSE: JINDALSAW) Q4 2026 Earnings Call dated Apr. 28, 2026
Corporate Participants:
Vinay Kumar Gupta — President and Head, Treasury
Rajeev Goyal — Senior Vice President, Corporate Finance
Analysts:
Vikash Singh — Analyst
Dhananjai Bagrodia — Analyst
Digant Haria — Analyst
Gaurav Nigam — Analyst
Vanshika Jain — Analyst
Sailesh Raja — Analyst
Falguni Dutta — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to The Jindal saw Limited Q4FY26 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be 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 operator by pressing star then zero on your touch tone phone. Please note that this conference has been recorded.
I now hand the conference over to Mr. Vikash Singh from ICICI Securities Ltd. Thank you. And over to you.
Vikash Singh — Analyst
Good afternoon everyone. A Warm welcome to Q4FY26 Ginger Shock Conference Call. From the management side we have with us Mr. Narendramansi Chief Operating and Financial Officer. Mr. Vinay Kumar, President and Head Treasury. And Mr. Rajiv Goya, Senior Vice President, Corporate Finance.
Without taking any much time, I’ll hand it over to Mr. Mantri for his opinion and remark. Over to you sir.
Vinay Kumar Gupta — President and Head, Treasury
Yeah. Hi, this is Mr. Mantri. Would take up the question. So I’m Vinay Gupta. So let me give the preface. And Rajiv, Mr. Mansimi all sitting together. We would be addressing the questions of the participants. So if it is okay, can I start?
Vikash Singh — Analyst
Yes sir.
Vinay Kumar Gupta — President and Head, Treasury
Okay, fine. So good afternoon everyone and welcome to The Jindal saw’s FY26 unions call. I’m Vinay Gupta from Jindal Saw. We’d like to extend our thanks to the ICICI direct team for organizing the session and facilitating the discussions. The board of directors approved the audited financial results for 2026 on April 27, 2026 which has since been filed with debtor exchanges. We trust you have reviewed these documents. Now let me present the highlights and of the financials and some brief about that.
So first of all, performance in Q3 improved relative to the immediate previous quarter of FY26. 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 FY26 dropped across is compared with the the previous quarter which is Q3. Performance of FDI 26 also dropped as compared to FY25. Now 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.
So for the financial year on a standalone basis the company registered a total income of 3,852 crores representing a decline over Q3FY26 by approximately 7%. EBITDA for Q4FY26 to get rupees 413 crore showcasing a decline over Q3FY26 which was 527 crore rupees representing a decline of 22 crores. Cash for Q4 is reported at rupees 114 crore showing a decline over Q3 FY26 which was 227 which represents a decline of 50%. On consolidated basis. For the quarter four the total income stood at 4,657 crore as compared to rupees 4,963 crores.
In Q4FY26 representing a decline of 6%. EBITDA issued at 504 crore showcasing it declined over Q3 which was 632 crore. It was a decline of 20%. Cash for Q4FY26 is reported 124 crore showing a decline of decline over Q3.26 which are 248 crore representing decline of 50%. Now let’s talk about the full year FY26 and FY25. On a standalone basis the company registered total income of approximately rupees fourteen thousand seven hundred forty five crore representing a decline of approximately 19% as compared to FY25 where the total income was eighteen thousand one hundred seventy eight crore.
EBITDA for FY26 is rupees eighteen thirty five crore rupees as compared to three thousand four hundred and fifty six crore rupees for the previous year representing a decline of 47%. Cash for FY26 is reported at rupees seven hundred eighty four crore against eighteen seventy four crore decline representing decline of fifty eight percent. On consolidated basis, the total company registered a total income of approximately 17,987 crore as compared to 20,948 crore rupees representing approximately 14% decline.
EBITDA for 26 is 2,306 crore as compared to 3,548 crore of the previous year showing a decline of 35%. Cash for FY26 is 48,925 crore against 1458 crore rupees representing a decline of 37%. In terms of our indebtedness as on 31st March 2026 complete standalone net debt reduced to Rs. 2005, 453 crore as compared to rupees 3154 crore on the previous year and this includes long term debt of 529 crore only. Next institutional debt on console basis has reduced to Rupees25.28 crore as compared to Rupees 3,346 crore which was on 31st December 25th.
Long term debt on 31st March was Rupees 692 crore only. So debt profile of the company remains robust despite the business volatility. Now the prognosis for the Results are number one, Q4 and FY26 saw a decline in overall sale primarily driven by weakness in the ductile iron pipe segment amid ongoing water infrastructure sector challenges. Despite positive policy announcements under the Jaljan mission project execution on ground remains sluggish impacting our total water pipe business during FY26.
Despite a robust export of the book including 6 lakh metric ton of Joburg contract from Saudi Arabia, all export shipments have been suspended since March 26. This is due to the activation of the port’s major project following the outbreak of the military conflict in the MENA region, so 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 types in March 26 resulted in lower Q4 profitability as compared to Q3, missing our original expectations.
This will get reflected in 2627 once the shipment fee starts. So this is basically a deferment or postponement on the timescale. Company also reported a 48 crore rupees foreign exchange cost during this quarter following the revaluation of US dollar denominated exposures. This was driven by the rupees sharp decline over the quarter. It fell from 88.88 per dollar to 94.84 rupees per dollar. So this is perhaps one of the quarters in the last so many years reflecting a depreciation of more than Rs.5 rupees.
Now some update on our Carbon seamless pipe segment. On February 26th 15th February 26th we reported to Mr. Shingis about developments in our carbon seamless product. It was reported following an API audit. Non conformance 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 time frame. All MCs have been formally addressed and closed as per the requirements of API authorities.
Auditors appointed by API authorities are scheduled to revisit rfacti Nasic in May 2026 for verification. Following this, the final approval to use the API monogram on Seamless site is expected in due course. Given this, providing a specific timeline for approval at this stage would be very speculative and due to this regulatory timeline we anticipate a temporary impact on our sale of API Seamless pipes. But to mitigate the impact, the company is leveraging flexible manufacturing capability, flexible manufacturing capabilities to relocate production towards alternative seamless pipe products to minimize the loss on account of the overall volumes and the business profitability in API business typically is completely better than the non EPI business.
Now the MENA region has impacted all the businesses who are capping to MENA region for any insurer outflow to that region and we would like to address that point also. Now we know like following the collision of conflict in the MENA region starting 28th February 2026 we are experiencing severe logistic disruption 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. So we are continuing the business but wherever the trucks can go, but where the ships have to go, their business is temporarily suspended. This has impacted Q4 and FY25 26 sales and profitability at standalone and console level and where the revenue recognition is deferred to 2627. Now this ongoing crisis in MENA region has necessitated a strategic shift towards securing energy infrastructure, generating new opportunities for pipeline extension, 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 MINIZ 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 26 the government has issued a landmark order to fast track pipes gas rollout across the country.
Bureaucratic delays, excessive charges and local bottlenecks that once showed or project are now being swept aside and time bound approvals and decisions. Apart from this, ONGC has also announced in March 26th deep water exploration projects of approximately $20 billion. Now what is there for us in all of this? While conflict in MENA region presents significant challenges, the resulting shifts are creating new avenues for growth. Zindasa 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 plan to set up a carbon stainless pipe plant in Abu Dhabi. Through our subsidiary there are good developments in the project. A developed piece of land with some 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 established a janitor company with its investments of 15% and balance 49% is buying Bhur Group in KSA with JV will set up a ELSO and NAFSE 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 Dhabin KFE on fast track basis. Now let us discuss couple of other matters including subsidies and joint ventures in uae. The regional conflicts in MENA regions 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 sales from Abu Dhabi plant are restricted to customers which could be served from the truck. In this backdrop in Q4 of FY26, Abu Dhabi Company delivered approximately 48,000 ton pipes as compared to 52,000 ton in Q3. And as of 3-31-2026, the subsidy holds the order book of approximately $180 million which is close to 171,000 metric ton giving a visibility of approximately 9 months of operations. And this is independent of the order book of Jindal Saw limited In Jindal Hunting joint venture. There is joint venture where Jindal has 51.1percent and hunting at 49%.
We generated a revenue of approximately 149 crore with 43.2 crore of a PAT. This is bit lower as compared to previous year where the top line was 177 crore and 51.5 crore was the pet in FY25. In case of our ongoing litigation with NTPC, the matter is moving metal moving with the NTPC in Delhi High Court at double bench majority, the argument by both the parties are completed. There may be one or two more dates before the court reserves its order. So now with this backdrop, before I conclude this presentation, let me summarize that Q4FY26 performance did not meet our expectation of exceeding Q3 primarily due to reasons we mentioned above.
Factors contributing to Q4 muted performance persist and 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. But as of now, as we speak this quarter at least few more weeks or a few couple of sometime looks to be getting impacted. Improved conditions in Mena region will enable the company to rapidly accelerate export shipments. Because our order book comprised of roughly 29 to 30% export to Mena region lot of shipments are on hold, we would try to push as much as possible immediately the shipments will come.
There is an announcement by the government relating to Jaljeevan 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 the tile pipe business would take the lead. And this will be helpful for the operations for the company and the industry as a whole. Complete new initiatives in Abu Dhabi for seamless project and in Saudi for shopite 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 deliberate balance sheet and strong working capital lines available in 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 focuses on de bottlenecking, enhancing operation efficiency 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 we are 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 that export market opens up. With this note let me request if there is a question we open the floor for the question and answers.
Vikash Singh — Analyst
Operator, please start the Q&A.
Questions and Answers:
Operator
Thank you sir. Thank you. We will now begin the question and answer session. [Operator Instructions] The first question is from the line of Dhananjay Bhagratiya from Alchemy. Please go ahead.
Dhananjai Bagrodia
Hello. So firstly congratulations on a good set of numbers and tough environment. I just wanted to ask you how are we Getting feelers from these other regions or demand are we seeing much more volume uptake let’s say in FY27? Any numbers we can think of?
Vinay Kumar Gupta
Yeah. Hi Dhananjit, this is Dina Gupta. So Dhananjit, at this point of time the interaction with if you’re talking about the export business, if you’re talking about the MENA region, the interaction with the 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 platforms And Big media. We of course we now have presence in Saudi Abu Dhabi. We are people are trying to get some sense from various stakeholders including the oil and gas companies there that how they are proceeding, how they want to go forward.
But having said all this there are, if you’re tracking, there are lot of media news where the project which were in the cold storage is. The projects which were stuck for whatever reason there is an urgency to push those projects. So I’m not saying they will come overnight but they would cut short the timelines and there will be urgency in doing this so that like if this stalemate converts into the stalemate of Ukraine, Russia then what is going to happen? So eventually there would be some urgency now in the region and that would be helpful and that could be beneficial for the industry as such.
Dhananjai Bagrodia
And what about India? How is the India demand how we see that come along?
Vinay Kumar Gupta
So India water demand remains, the only thing was the water. So Jaljeevan 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. So this is independent of Delhi 1. So whatever business has happened in the sense of fund release from the Gen Z1 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. So everybody has the capacity, everybody has order book, we are gearing up. We in fact our fourth quarter sale is completely better than the Q3 sale for water business.
Dhananjai Bagrodia
Sure. And so with steel prices going up as they are, do we think we’ll have a hit by inflation or will we pass it on on margins?
Vinay Kumar Gupta
See we don’t accumulate a whole steel in anticipation of getting the order. So it is basically like it’s a very narrow within a very narrow timeline. We book the steel the moment we get the order for the pipe. So eventually the volatility in the raw material prices is to the account of the manufacturer. So for us, let’s say in this case. So 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, metrology the new order will have. And that is where the order is placed only once we receive the firm order for steel pipes. So this situation normally does not arise that the steel pipe going up and down is impacting the pipe layer very significantly.
Dhananjai Bagrodia
Okay. And so margins henceforth we bottomed out in 26 and margin should now just be onwards and upwards.
Vinay Kumar Gupta
But can you repeat your question? Sorry.
Dhananjai Bagrodia
I’m saying margins. Would you. Would it be fair to say margins are bottomed out and now margins would just be higher from here going ahead
Vinay Kumar Gupta
So that’s what we thought for at the call of QP we said that perhaps we have, it has bottomed out. Okay. And it’s a function of all the things margins is not a function of only like raw material sale price. Because if I’m. If my capacity is under the door start hitting you now lot of contracts but industry is today serving. They are delivered products. They are in case of international, they are duty dealer products. Now nobody knows like how after the, after 5th of May what the crude prices will be in India also.
Right. So you people are English. So you would know like whether the crude price goes up or the price goes up. So the freight cost will go up. So there are few things which are beyond the control. The assumptions for the profitability normally are made in the, let’s say a stable condition. So as we mentioned in the very last line in the presentation that these are the unpredictable, unprecedented times everything is looking anyway. So if you say that this is bottomed out, maybe may not be.
Dhananjai Bagrodia
And so any other risks we can think of in terms of obviously one micro risk. Any other risk we are seeing at the moment because you should understand this from the business risk perspective.
Vinay Kumar Gupta
This commentary actually is full of risk. What we said we have not given you high expectation except that like we are doing, we are projecting, we are doing setting up the projects in. But our perspective was to highlight to the stakeholders, to all of you like we are living into the risky environment. We highlighted each and every risk. We highlighted Jillian Mission, we highlighted the international shipping issue. We highlighted our API business issue in carbon steel. We highlighted the water business in Jel Jivan.
So I mean there could be still issues which are very difficult to present at this point of time. As I mentioned like if the, if there is a spike in the diesel prices all costs will become inflationary so there are certain measures which the management can take in terms of let’s say controlling those risks there still would be few risk which we may not be able to control but given the good liquidity, good let’s say position of the company and the balance sheet some of the risk we can still handle.
Dhananjai Bagrodia
Okay, last question for me so what capex number are we expecting for the next couple of years?
Vinay Kumar Gupta
The CapEx.
Dhananjai Bagrodia
For the next couple of years how much…
Vinay Kumar Gupta
Yeah okay so — Okay so few of the capex is 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 maybe let’s say five to seven hundred crore rupees all across India in this year and 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 site project we are 100% so we are still trying to work out like what would be the debt equity, what is going to be the device project cost 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 then we are not expecting, we are not putting very significant let’s say brown field or greenfield projects in India so we are trying to work with the available capacity within India but trying to see how best we can de risk our business model for example if ductile pipes had taken a backseat we are working out the facility should not stop unless try to work out different options for that also the different IDs, export, domestic shift and all those things.
Dhananjai Bagrodia
Sure sir. So any number we have only five to 600 is that or will be more than that…
Vinay Kumar Gupta
The capex number?
Dhananjai Bagrodia
Yeah, total.
Vinay Kumar Gupta
Yeah. For this year. For this year we expect five to six hundred rupees
Dhananjai Bagrodia
And for next year and we try to get a broad based 27, 28 so 500 for 27. Okay,
Vinay Kumar Gupta
Let’s put it this way we have roughly 10 locations in the country. Right. Earlier somehow we used to set 250, 300 but every time it works out to not less than 400, 500 and sometime when one or two more schemes are going on some replacement all these things so maybe like this year we have done 7 to 800 next so 24, 25, 26 we did both 800 maybe you can, you can consider 500 to 600 this year, 405 next year, something like this.
Dhananjai Bagrodia
Thank you sir. Thank you so much.
Vinay Kumar Gupta
Thank you.
Operator
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 2 question to 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 Diganharya from Green Edge Wealth. Please go. Thank
Digant Haria
You. Thank you for giving me the chance. I had one question. See the macros are very uncertain and we may not want to guide. That’s perfectly fine. But just wanted to know that in all the products that we have, you know, basically saw pipes, seamless pipes, ductile iron, stainless steel and hpd, do you see any over capacity in the system? Like you know, if the demand bounces back, say water in the next 12 months, then 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? If you can just, you know, segment wise explain how do you see the over capacity or in each of these segments where we operate?
Vinay Kumar Gupta
Yeah, Rajiv, would you explain this?
Rajeev Goyal
So as you mentioned that over capacity position, if there is a demand which is coming back, so what we feel that in dusty 11 pipes there may be some over supply in terms of capacities. But apart from this, other segments are well placed like longitudinal, helical as well as seamless. So if in future demand is there, the capacities are available to cater the demand, there will not be any over capacity. But the ductile RN pipe is something which we feel that over capacity position is there.
Digant Haria
Okay, okay. And 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.
Rajeev Goyal
So 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 in anticipation of demand from Jeven mission and multiple projects at state levels. But as of now, because gel Jeven mission scheme is not kicking off very well. So this position seems to be remaining as it is for quite some time.
Digant Haria
Got it. One data point is how much sales did we lose because of the Middle east war? You know, like not getting chips, not delivering products. How much would we did? Like 13.76 lakh, you know, 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 crores of rupees? Like what would be the revenue loss?
Vinay Kumar Gupta
Basically there is. There is no loss per se. It is a deferment because shipments are going to go once the situation is improving this region. So approximately 30 to 40 material was ready for shipment which was deferred. So apart from this, there is no loss as such.
Digant Haria
So this deferment would be worth 30 to 40 crore rupees. Right.
Vinay Kumar Gupta
So in terms of value it would be more than that. But as of now we have the quantities available which got deferred.
Digant Haria
Okay. Okay. Okay, fine. Thank you so much. I’ll come back.
Operator
Thank you. The next question is from the line of God of Ningam from Tunga Investment. Please go ahead.
Gaurav Nigam
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, we are hearing a lot of piercing pairs adding capacity and we are receiving approval in the critical piping segment as well. So wanted to get a sense from you on 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 on seamless seamlessly pipes.
And second one is on the welded stainless steel pipes. And I wanted to get a sense from you because I think there has been some decline in the overall margins in this business. So how are the things shaping up and how do you think about that business going forward?
Vinay Kumar Gupta
Okay. In Canada 15 pipe business we are trying to capture the upper and or upper end segment or the customer who requires more stringent quality. So impact of that will come I think in this year, the second half. So. But otherwise, otherwise I must say that of this semic will face the margin challenge.
Gaurav Nigam
Okay. Sorry sir. Are you talking about the seamless business or welded or both?
Vinay Kumar Gupta
Both. I’m talking both. So we have to capture the value added product. And for that as you mentioned that we are trying to get the approval from the customer end for our facility and for our product.
Gaurav Nigam
On the bended Side, is there upper segment as well? I thought that that would be true for the CVS business. Is there upper segment within the bended as well?
Vinay Kumar Gupta
Blended also.
Gaurav Nigam
Okay. Okay. We are trying to move up the ladder in terms of quality.
Vinay Kumar Gupta
Yeah. That is the only way or only way to capture the high end or high margin business.
Gaurav Nigam
And that that margin expansion will happen from the second half of FY20. Is that the expectation?
Vinay Kumar Gupta
Yeah. Actually as already mentioned by Mr. Viny Gupta, but at this point of time everybody is little slow in investments and slow in giving the order.
Gaurav Nigam
Okay, got it. Got it, sir. Thank you.
Operator
Thank you. The next question is from the line of Vanshika Jain from Acquaintance Investment. Please go ahead.
Vanshika Jain
Hi.
Vinay Kumar Gupta
Hello. We lost you.
Operator
So the line drop. The next question is from the line of Felice Raja from BK Security. Please go ahead.
Sailesh Raja
Congrats sir for reporting Strong past you CFO of 18 macros even in this challenging times. So given the lower order intake expected from the Middle east due to ongoing challenges and talking about the new order intake. So how are you approaching our selection in the near term? Is this specific to our helical capacity? Do we wait for recovery in MENA region to secure high margin orders? Are we open taking up the lower margin orders in the domestic helical SaaS segment to support utilization level? So what is our near term strategy?
Vinay Kumar Gupta
So Shelley should presume this situation would start working out once the region is fully operational. As of now, the couple of reasons are there where people are flying for the 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. So 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 year two, year three or whatever. Coming to your second question that I’m. Let’s assume that there is a normalcy 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. Then of course we would like to let you like to have the order book which should give a reasonable amount of visibility in terms of time and high utilization.
We are still booked, our facilities are still booked provided that we are allowed to produce and sell. So it’s not that we don’t we have a slot available to take the order for immediate next two months, three months. We actually are fully booked for a couple of quarters. So if we have to given the option to take order, we might not be able to take order for next two or three or four quarters time. So 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.
Sailesh Raja
Okay, okay.
Vinay Kumar Gupta
Just to give an example for the for the job work order, what we Have? Yes, it’s a 6 lakh ton order and we are sitting 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 pipes will be larger problem than store industry.
Sailesh Raja
Okay, okay, okay sir. You know both Indian and local players including ourselves are adding capacities. So do you believe that there is a sufficient demand to support attractive returns like 3, 4 years payback on these investment. And also could you please talk about you know the opportunities in the GCC region for elites Elsa and Di Pipe.
Vinay Kumar Gupta
So okay, let’s talk about the simplest ductile. We are not adding additional capacity in ductile. It is basically like we are trying to. 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 the setup is complimentary facility for that. It’s not a full fledged plant of starting from the from blast furnace going up to the finishing and everything.
But in case of seamless and saw pipes they are greenfield projects completely integrated with coating, all kind of coating and everything. And in terms of let’s say that demand we are. 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 on that plain pizza. So I mean we won’t like to discuss too much on the call but we understand that there is enough on the plate.
Sailesh Raja
Okay, so one last question. As we plan to undertake significant capex over the next 2, 3 years with current net debt at 3400 crores, what do you expect that peak debt level during this capex phase? And additionally what is the peak net debt to EBITDA that we are comfortable operating at?
Vinay Kumar Gupta
See we try to communicate to everyone that let’s differentiate between the working capital debt and the long term debt. So out of the current debt standalone 2500 console, 3200 whatever the long term debt is hardly at stunned is 1025 crore. At console it is 650 crore. So there is a good amount of appetite of the lenders to lend the long term debt to the company for setting up the Projects and we have demonstrated in the UAE in last couple of years. So there is a good amount of traction among the lender they want to lend to us now as you know like because Indian lenders are also geared up through the gift city or direct residents into the MENA region.
They are equally interested to lend this. So 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 we are not, it’s not a hundred percent subsidiary, we would be 51. So a proportionate at the best, a proportionate let’s say impact would come in terms of debt to ebitda. Again if you have to increase, 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.
It depends like what we are talking, when we are talking because in 2425 we had the bit of 3500 crore rupees and then we thought that in two years time we would have significantly higher EBITDA. So if we go back to that similar level in some time then we would still be in the range of let’s say two, two and half of that to be said all includes, including working capital, everything.
Sailesh Raja
Yeah. Okay. Okay sir. Thank you sir, all the best.
Operator
Thank you. The next question is from the line of Vanshika Jain from acquaintance. Please go ahead.
Vanshika Jain
Hello. Thank you for giving me the opportunity. So my first question is in terms of we have started our business in Saudi and you and you mentioned in your opening remarks about how things are not moving there, considering things is normal in war 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 where sort of Saudi. So how do you see the competitive intensity there?
Vinay Kumar Gupta
So Vaishikha. So first of all like once that normalcy is there in the system, our domestic facility in India that will be fully functional and will start executing the export order, we have pipes in store and we would 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 demand in Saudi or neighboring countries would be taken care of. So in my view in next one year the majority of the requirement would still be serviced from the imports in Saudi because like the whatever lectures that people are doing, they will still take some time to set up, take approvals and then meet the criteria and do it.
So till that time if a major requirement comes that hopefully that will be service out of India. And in next two years time I think we would also be operational or else we also operational then it would be like how much demand is coming and how this is being serviced from the. Let’s say the local units in the MENA region. And it is not only Saudi we are trying to, let’s say gauge the sense there is likely demand from neighboring countries of Saudi also which would be serviced from Saudi and then by India.
Vanshika Jain
Okay. My second question is in terms of coal cost increase which we are seeing, I think the coal cost has increased almost 10 to 15. So how is this, how is the cost escalation being impacted? How much is the spot then how is it in an order booking?
Vinay Kumar Gupta
Can you come back which cost recently?
Vanshika Jain
Coal.
Vinay Kumar Gupta
No. So we never mentioned the code. We said we give an example is that how the inflation, inflationary trends can impact the profitability. And then I give 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 overall impact on the profitability. Because in case of sale, majority of the sale happens on dilute basis. So 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 a level that to pass on some of the cost. But there is no guarantee that this cost would eventually be passed on to the buyer.
Vanshika Jain
So earlier I remember we used to say that on variable contracts where the total pass on was around 30 to 35% has this percentage increased for us in terms of variable contract?
Vinay Kumar Gupta
No. So when we, when we say like there’s a mechanism that. That mechanism is restricted to let’s say ductile projects. And that was based on the, I think prices indexation. So it is not for each and every component of the product. It is the pigarn based prices. So that because pigarn has its index of figure, pricing is fairly, let’s say transparent. So that was where a lot of volatility was there in the iron ore and coal prices. And then some of the contexts had this Escalation Clause, as you mentioned, that 30, 33% or the strategy was like that in ductiler and size to pass on the cost or to protect the company in from the volatility in raw metal prices.
Especially for the time it was like that. We do have stocks with us also coal stocks. We are getting the coal ships every quarter. So that is something which is already inbuilt in the pricing mechanism. Apart from this, 13 states came out with the escalation clause as Vinay mentioned through which if the prices are moving beyond certain limits then escalation metrics were there and we could pass on certain escalated costs. So that is a strategy which we are already following but that is predominantly for the local market.
Vanshika Jain
Got it, Got it. And in terms of DI pipeline, you mentioned in your investor report that you have a one year order. However we are seeing that some state finances, we’re not getting the amount, etc. So how is the execution phase right now? And what do you think of newer avenues like JLT1, Mission 2 and PNG? Incremental adoption of PNG. How will this help?
Vinay Kumar Gupta
PNG? So we are mixing PNG with ductile.
Vanshika Jain
No, no. First question is for ductile. Let me just break. My question is for. Okay,
Vinay Kumar Gupta
Okay. So let’s first discuss a detail. So on let’s say very high level the tile, it’s six to nine months ago, people were focusing the Jaljuan mission primarily and then there were some setbacks on liquidity issues in the Delhi 1 mission. Then the states also moved to issue the orders based on their arrangement of financing. And that where the new contracts which were coming, they were coming back by the state funding. So state was arranging the funds to the multilateral agencies, domestic, international, whatever.
So they were not depending on the emission funding, whatever it is. And those orders executions had also started Ambit. The pricing and profitability on those orders are different as compared to the pricing of the old order. Now we understand that the Jalgivan mission like there is some momentum in that and this is paper news also like in the open public platform that center has released funds to some of the states which have gone to the state government. State has to, let’s say induct their own funds, whatever percentage it is and then they will start moving the funds to the APC and all.
So that system is still getting formalized. We understand that there’ll be new mechanism monitoring system. Now the motto of the Jaljian mission is also shifting from putting infrastructure to ensuring the service at the end level. So there might be some initial hiccups in terms of fresh implementation. But once it is set up then there will be like it will be business as usual. There will be more monitoring from the center also but it will be business as usual pending that the execution has a higher mix of state funds than by state funding.
And those executions are happening currently. That is also Reflected out of our fourth quarter sale where majority the sale is for the state bank funding. Of course we are supplying to EPC. And then second question is the Eng.
Vanshika Jain
Second question is for the judge even to the second 2.0 which has come. So when is the execution going to start? Because if the current execution has not been completed and the money has not been received. So how. How do we see the 2.2?
Vinay Kumar Gupta
Because system collapse, system rebuild time. So 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. We are that interfaces by the apc. 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 sized funds would be released to them. They would settle their initial issues and 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 way.
Vanshika Jain
Okay, so maybe four small stones, right?
Vinay Kumar Gupta
Yes, you’re right. Could be. But it does not mean that we are not producing. We are. We have a mix of business or orders state backed as well as Jeevan.
Vanshika Jain
Okay. The state back is happening. Jersey one is not happening. Right.
Vinay Kumar Gupta
Is not happening in the full stop. And if this, this Mena region lockdown is cleared we have export consignment which are on hold. Even those will go.
Vanshika Jain
Okay. Okay. And for distribution I was talking about…
Operator
Mr. Vanshika Jain. Please rejoin the question queue for more question.
Vanshika Jain
Thank you. This is the other side. Thank you.
Operator
Thank you. The next question is from the line of Sunil Kotari from Unique pms. Please go ahead.
Vinay Kumar Gupta
Think he’s not connected.
Operator
The next question is from the line of Palgoni Dutta from Mansour Finance. Please go ahead.
Falguni Dutta
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.
Vinay Kumar Gupta
So demand in seamless segment. Domestically it is more or less 1.5 million approximately. And there are multiple players. So as a government or the PSUs have announced certain projects in deep water exploration. We can see some opportunities, big opportunities to come when these projects are executed. So announcement is there intent, is there, Government is focusing on it. So there will be a demand and there will be a missing capacity to cater this demand.
Falguni Dutta
Okay. You said it’s 1.5 million ton, am I right? The demand.
Vinay Kumar Gupta
Yeah, yeah. In domestic.
Falguni Dutta
Okay. And then how are the margins there as of now? I mean, compare it to last year.
Vinay Kumar Gupta
So margin, product-wise, we are not discussing because we have multiple products. So you can get some sense from this…
Falguni Dutta
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 Burton.
Vinay Kumar Gupta
So, yeah, there will be improvement in margins in seamless segments because we envisage that demand should remain robust and that will actually result into the little bit better margin.
Falguni Dutta
Okay. And sir, broadly, if somebody were to be buying steel from outside and making steel pipes and in the rising steel price scenario, should they be in a better off situation or it’s not like that.
Vinay Kumar Gupta
No, it’s not like that.
Falguni Dutta
Okay. Okay. That’s all from my side. Thank you, sir.
Operator
Thank you. We take this as a last question. I now hand the conference over to the management for closing comments.
Vinay Kumar Gupta
We thank you very much to all the participants on this call as well as to ICS Direct for hosting this call. And we hope that the issues what we discuss gets overcome ASAP so that we have a good call next time. Thank you very much
Operator
On behalf of ICICI Security and Jinwalso. That concludes this conference. Thank you for joining us. You may now disconnect your lines.