Electrosteel Castings Limited (NSE: ELECTCAST) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Sunil Katial — Chief Executive Officer and Whole-time Director
Ashutosh Agarwal — Whole-time Director and Chief Financial Officer
Madhav Kejriwal — Whole-Time Director
Analysts:
Unidentified Participant
Vikash Verma — Analyst
Vikash Singh — Analyst
Aashav Patel — Analyst
Muskan Rastogi — Analyst
Deepesh Sancheti — Analyst
Rajat Setiya — Analyst
Deepesh Agarwal — Analyst
Rajesh Aggarwal — Analyst
Saket Kapoor — Analyst
Rajesh Bhandari — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Electro Steel Castings Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star pen zero on your touchtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Vikash Verma from EY LLP. Thank you. And over to you Mr. Verma.
Vikash Verma — Analyst
Thank you, Michelle. Good evening everyone. On behalf of Electroserial Castings Ltd. I welcome you all to the company’s quarter one FY26 earnings call to discuss the performance of the company. We have with us from the management team Mr. Madhav Kejriwal, whole time director. Mr. Sunil Katyal, whole time Director and Chief executive officer. And Mr. Gaurav Somani, general manager finance. Please note our CFO Mr. Ashutosh Agarwal is not available on this earnings call as he is unwell. Before we proceed with this call I would like to draw your attention to the fact that today’s discussion may contain forward looking statements that are subject to various risks, uncertainties and other factors which will be beyond management control.
We kindly request that you bear in mind there may be uncertainties when interpreting such statements. We will now start the session with the opening remarks from the management team. Afterwards we will open the floor for interactive Q and A session. I will now hand over the conference over to Mr. Madhav Kejriwal for his opening remarks. Thank you. And over to you Mr. Madhav.
Madhav Kejriwal — Whole-Time Director
Thank you. A very good afternoon to everyone and thank you all for attending our earnings call. As anticipated, the quarter gone by was a challenging one. The slowdown continued that began in the second half of the last financial year. During this quarter we’ve sold 1.63 lakh metric tonnes of pipes and fittings compared to 1.89 lakh metric tonnes in Q4 of FY25 and 2 lakh metric tons of Q1 FY25 exports contributed to approximately 20% of our total pipe volumes. The decline in government spending on water infra related infrastructure in particular contributed to this subdued demand. Additionally, we undertook our annual maintenance shutdown of nine days at the West Bengal unit which marginally impacted our production.
Under jjn, the rural households have reported to have tap connect water connections at the beginning of the mission of 3.23 crores which has grown to 15.67 crores as of July 2025. Although new scrutiny has shown that the functioning household tap connections is at approximately 50% of the target which is 19 crore households. There are headwinds at the moment, but we are optimistic about the future. The extension of the Jaljeevan mission as announced during the finance budget and the budgetary allocation of 67,000 crores for FY 2526 are positive indicators. We expect that the demand will start improving from the second half of this financial year.
Additionally, the government is also prioritizing on river interlinking projects through the Interlinking River Program which is aimed at redistributing water from surplus to deficit regions across India. This signifies huge long term potential for our pipes in the coming years. India remains one of the fastest growing global economies with an ever increasing need for robust water infrastructure in both rural and urban areas. This will continue to drive the demand for pipes and fittings. In the meantime, we are using this period to optimize resources across all levels to minimize costs, to enhance operational efficiency and for implementing IT solutions.
We believe these challenges are temporary and do not alter the long term growth prospects of the industry. We have proactively enhanced the capacities and are well positioned to capitalize on the demand resurgence as it materializes. Coming to the performance of the first quarter of FY 2526, the company’s consolidated total income stood at INR 1586 crores reflecting slowdown in the JJM and maintenance shutdown undertaken at our West Bengal unit. I would also like to take the opportunity to mention that we are reorganizing our CAPEX plans in light of the current demand scenario and certain other new acquisitions.
I would like to share some updates on the coal mine compensation matter as well as for the coal mine compensation. I’m pleased to inform that the Office of the Nominated Authority from the Ministry of Coalition Government of India has issued Provisional compensation order dated 15.05.2025 in respect of compensation for cost of geological reports, cost of consent, land and inclined and shaft infrastructure payable to prior lotties at Parvatpur Central Coal Mine in terms of Coal Mine Special Provisions Act 2015. As for the aforementioned Provisional Compensation order, the Ministry of Coal has estimated an amount of of 500crores approximate as compensation to the Company coming to the recent acquisition.
I’m very pleased to inform you of the acquisition of EIS Services SpA, an Italian valve manufacturing company. It is a prominent international designer and manufacturer of valves and equipment used in water mains, sewage treatment plants and hydroelectrical power stations. Its comprehensive product portfolio includes butterfly valves, gate valves, air release valves, hydropower valves, hydraulic control valves and turbine as well. TIS operations are strategically located across Europe and are engaged in production and commercial operations as well as R and D activities. Its major markets are Europe, Middle east, the US and Africa. This acquisition marks a significant strategic move by ECL which it has long aimed to enter into which is the valve business to bolster its footprint in the water infrastructure sector.
Given that DACAR end pipes and valves are typically installed together in pipelines, the acquisition enables ECR to offer integrated solutions and a more comprehensive product package to its customers. The turnover of tis is around 40 million euros and its EBITDA margin is of. We look forward to ramping up the business and aim for revenue growth of at least 15% CAGR over the next three years and significantly improve in EBITDA. Improve the EBITDA margins the global valve market is expected to grow at a CAGR of 4.6% and will go from 17.6 billion in 2023 to 26.4 billion in 2032.
I would now like to hand over the floor to Mr. Sunil Katyal, full time Director and CEO for taking you through the financial highlights.
Sunil Katial — Chief Executive Officer and Whole-time Director
Thank you Madhavji Good afternoon to all the investors present in electrosteel casting Q1 financial year 26 earning con call. I would like to brief you about the consolidated results in Q1 FY26 total income stood at INR 1586 crores that has been mainly impacted due to decline in government spending on water related infrastructure and planned maintenance shutdown at Khada. As already explained the EBITDA reported at INR 198 crores EBITDA margin stood at 12.5% PAT stood at INR 89 crores with the PAD margin being at 5.6% and moving to standalone results for Q1 total income stood at 1426 crores INR EBITDA stood at INR 186 crores, EBITDA at 13.1% PAT at INR 86 crores PAT margin at 6%.
Net debt has further reduced and now stands at INR 1400 crores including term debt of INR 346 crore only. Net debt equity ratio has improved to 0.24 to 1.
Now I open the floor for question answer sessions. Thank you very much.
Questions and Answers:
operator
Thank you very much sir. We will now begin with a question and answer session. Anyone who wishes to ask questions may please press Star and one on their Touchstone phone. If you Wish to withdraw yourself from the question queue. You may press star and two participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Vikash Singh from ICICI Securities. Please go ahead.
Vikash Singh
Good afternoon sir. Thank you for the opportunity. So my first question pertains to the government orders or the slowdown which we most of the companies are talking about despite the allocation in the budget. What was the problem? That the spending is not as of now. So if you could throw some light on the JJM and related issues.
Madhav Kejriwal
Sir, there is a approval mechanism that the government has put in place for allocation of funds. And since the budget is still pending to be decided, the extended outlay in total up to 2028 is still not completely finalized. Thus the allocation of funds is at the moment moving very slowly. The states have started spending money but the center is holding on. I think in the coming one month or so all these formalities will be completed and then we will see fund flow even from the central level for JJN.
Vikash Singh
Another one or two months. And you think that this issue would get resolved?
Madhav Kejriwal
Absolutely.
Vikash Singh
Concurrently there was a big story which was going up on the interconnection of Riverside. Any task anything has moved or this is still more on the paper.
Madhav Kejriwal
There’s a lot moving especially between the UPNP Ken Betwa linkage. There is also one in Rajasthan which is seeing some good activity levels. So I’m very optimistic on the fact that these two will definitely see the light of day. The other projects are all in planning stage. But I think this is a long run process. It’s an 8 to 10 year I would say activity. Since you are talking about moving huge quantities of water across a very large landscape of geography. So the other projects will take another year or two to start showing up.
Vikash Singh
The second question pertains to our new acquisition tis we have gone overseas for the wall. So usually the experience have not been better for many of the steel companies who have tried to fetch some assets in the overseas. So just wanted to understand that thought process and would be because the facilities manufacturing facilities is also abroad. Wouldn’t it have been more better that if we would have done this in India because our cost of production would have been much lower in India.
Madhav Kejriwal
So sir, what is important to understand is that the type of valve that is being produced in tis, what it specializes in is a valve that is not made by anybody in India. In fact TIS and the other big manufacturers of the Water valve industry are exporting from Europe into India. So this is not a product that is being made at all within the country, nor is it being made successfully by any manufacturer in the country who is from the country at the moment. When you talk about the cost of production, the cost of production for that company today, even after that they are looking at a ebitda level of 13%.
And that is in a very specialized area in terms of geography, even when you talk about Europe, they are present strongly in specific markets of Europe, but not all of Europe. We on the other hand have a very strong presence all across Europe. And this is a very complementary product to our existing product basket. You can say this acquisition has done more to gain the knowledge. While I say that it is also important to mention that definitely for the higher value products and even the lower value products that are being manufactured there, we are looking at starting localized production.
We are looking at setting up an R and D facility here in India as well which should not take more than a couple a year and a half to two years.
Vikash Singh
Noted sir. So just one thing in conjunction to this, you said 13% EBITDA margin and at the same time you are talking about some of the specialized products shouldn’t be. The margin should be on a higher side because if you’re making something which is unique, you should command a better margin. Right. So anything to do with the what’s the basically division here because we’ve seen with some other company the margins for a specialized product is always higher.
Madhav Kejriwal
Well, if you look at the industry as a whole, you will see that they are actually hitting 2, 3% higher margins than the other manufacturers within Europe itself. Once we start, once we utilize the know how and spread this across Middle east and India as well in terms of manufacturing and sales even stronger than what it is already, you will find that this margin is going to move up significantly. So this is a margin despite high costs and despite being in Europe. So once this comes to India, you will find the value unlock happen and you will find much higher ebitda levels of 18, 20%.
Vikash Singh
So just a clarification, that 15% revenue CAGR is basically we are targeting India for that kind of growth, right?
Madhav Kejriwal
So we are targeting India, we are targeting the Middle Eastern markets where we are stronger than tis’s presence and also the European markets where we are strongly, more strongly present than tis.
Vikash Singh
Okay, so what is the current capacity utilization for tis?
Madhav Kejriwal
Well, for one plant it would be a hundred percent. For the other plant it would be around 45%.
Vikash Singh
Okay, so significant legroom is there?
Madhav Kejriwal
Absolutely. And we will also create capacity here in India.
Vikash Singh
Notice us. Lastly, if I can squeeze in one more portion. This 500 crore compensation which they have basically rewarded has had. We received the money. And what’s the timeline if we haven’t received the money?
Madhav Kejriwal
So we haven’t received the money yet. It will be a little difficult to comment on the timeline. Exactly. But we are hopeful that it will take probably six months to eight months. Maybe. Maybe a year.
Vikash Singh
Okay, sir, that’s all from my side. And all the best for future.
Madhav Kejriwal
Thank you.
operator
Thank you. We’ll take the next question from the line of Asha Patel from Molecule Ventures, pms. Please go ahead.
Aashav Patel
Thank you for the opportunity. So my first question is after consistently after many quarters of volume growth this quarter we have seen volume growth. As you rightly mentioned, it is linked to the slowdown in jjm. So can you please be more specific and give us more insights on. With regards to the slowdown whether the new project tendering has been slowing down or the fund release has been slowing down. And when can we expect a quarter of volume improvement?
Madhav Kejriwal
Again, sir, both parts have slowed down. The payment to the contractors have slowed down which in turn has reduced the the order booking from their end. And also the tendering process has been put on hold because of new tendering. Processes have been put on hold because new fund allocation is yet to happen. So that is the current scenario. I am very much, very sure about the fact that come quarter three we will start seeing an increase in volume again. Quarter two will also be a slow one as quarter one has been.
Aashav Patel
And AMRUT 2 is also facing similar challenges.
Madhav Kejriwal
Not really, sir. But AMRUT 2 is a relatively new initiative as compared to Jaljee 1. So a lot of the work is still in its design phase. And it’s not yet picked up full pace. Although there is still business coming from there. But it’s not full pace.
Aashav Patel
Got it, sir. And sir, my second question would be the 500 crore. The provisional compensation which we have. Which the government has allotted to us. So we were expecting a number closer to 1200 crore. Is that right?
Madhav Kejriwal
Sir, this 500 crore does not include all aspects of the mine infrastructure. This is only taking into consideration land and one particular mine infrastructure. Which is the biggest mine infrastructure. That is the incline and shaft. There are other aspects to the infrastructure for which the valuation is in progress. Thus this is a. This is a provisional order.
Aashav Patel
So we are still hopeful of receiving the entire investment. Around 1200 crores, right?
Madhav Kejriwal
It’d be difficult to say Whether we will get the entire investment. But yes, we are hopeful to get close.
Aashav Patel
Significantly higher.
Madhav Kejriwal
Higher. I would say higher.
Aashav Patel
Got it. And the last question from my side. Many of our peers like Rashmi Metallics, Wellspun, Jai Balaji. Everyone has started venturing into this new segment called OPVC pipes. So why are we falling behind and we don’t have any such plans to add OPVC lines.
Madhav Kejriwal
I wouldn’t exactly call it falling behind. OPVC pias is something that is an opportunity that is definitely something they’re looking at. But there is nothing concrete. And you know, we are keeping our ears close to the ground about the opportunity present. Although we are not very hopeful that it will become a huge market as it’s expected to become. Because we find that in the western markets which usually are a precursor to what happened here in India, OPVC hasn’t picked up much and it’s been there for many years. Europe, it’s practically not present. The only market where it’s been successful is the US.
Aashav Patel
Okay, got it sir. That’s all from my side. All the very best.
Madhav Kejriwal
Thank you.
operator
Thank you. A reminder to all the participants that you may please press star and one to ask questions. The next question is from the line of Muskaan from BNK securities. Please go ahead.
Muskan Rastogi
Hi sir. Thank you for the opportunity. Sir. In the past we have mentioned that we will balance domestic and export exports based on the demand. When there is weak demand in domestic, knowing that there is near term challenges, can we increase our focus to exports as margins will be better and how is the exports business opportunity and is it easy to scale business in exports market in the last three quarters since you know the demand in domestic is peak. Why are we not able to scale it up in the terms of sales?
Madhav Kejriwal
There’s a bit of a delay between preparation and execution. When it comes to being able to start increasing your exports to that level where there’s been a slowdown, it’s always easy to manipulate it by 5, 7%. But when we’re talking about wanting to move the needle by a double digit percentage number, it requires some time saying that we have increased our focus towards volume markets now like Africa. And we are starting to explore the South American region as well. But it takes a little time. And also these this business is such where you’re working with slower moving projects.
You know, especially in countries in Africa, it takes some time. This quarter you will find that we have increased our export though as compared to quarter one. Hopefully.
Muskan Rastogi
Exports percentage has gone up because of domestic mix has come down Right, sir?
Madhav Kejriwal
Yes, please.
Muskan Rastogi
Okay. Okay. And sir, you spoke that about these stretches anything of Capex in your opening remarks. Does this mean we are putting the Odisha Capex on hold and you’re changing the product plan in Orissa?
Madhav Kejriwal
You can say that due to the acquisition of TIS and as I was mentioning earlier on the call we want to localize so that what is being imported today into India can be manufactured and sold within India. There will be some restructuring and also there are some delays on the land acquisition for the project. So things are moving quite slow on that front. Saying that we are going to be seeing how we can optimize on our capital allocation and move forward accordingly.
Muskan Rastogi
Sir, if the coal block compensation is 500 crores how much more are you expecting? And when are you expecting to receive these funds?
Madhav Kejriwal
Ma’, Am, when is a question which is difficult to answer. We are expecting it between eight months to a year. How much it will increase Again that is something that we are constantly working on. We’ve only managed to get the valuation for the land, the geological report and one big mine infrastructure. So it’s difficult to give a number on that. Exactly. But definitely it will be a bigger number than this.
Muskan Rastogi
Okay, one last question. The margins in DI has come down sharply because of a lot of capacity addition by the players. So with this all this capacity addition can we still do 15 per kg in the coming years?
Madhav Kejriwal
Again ma’, am, rupees basis with dikna is not the right way. I always encourage looking at it from a percentage basis basis. I’ve said that a 15 to 18% mark ETA range is what we will be hitting. And I am still certain that if you look at it from a midterm perspective of a year for the entire financial year we will still hit that range.
Muskan Rastogi
Okay. All right. Thank you so much and all the best.
Madhav Kejriwal
Thank you.
operator
Thank you. The next question is from the line of duty from Manya Finance. Please go ahead.
Deepesh Sancheti
Hi, am I audible?
operator
Yes, sir. Please proceed.
Deepesh Sancheti
Okay. What is the effect of the US tariff on the company? How much is the procedure of sales to the US? You said that 20% is exports.
Madhav Kejriwal
Sir, of the total sale a US sales is approximately 1%. So there will be negligible to no impact on our overall performance based on US tariffs.
Deepesh Sancheti
And regarding the compensation which from jsw, the temporary order which has been which we have received compensation order. Has JSW filed anything against it or what has been the response from jsw?
Madhav Kejriwal
They have seek some clarifications which we are in the process of giving. So there’s no. As so far there is no issue.
Deepesh Sancheti
You mentioned that you expect next to 12 months for the money for the 500 crores to be received. When do you expect that the Entire amount of 1200 crore plus would be received?
Madhav Kejriwal
That is a difficult one, sir. It’d be difficult for me to give you an answer on that.
Deepesh Sancheti
Okay, fine. That is all. If there’s any other question, I’ll come back. Thank you.
Madhav Kejriwal
Thank you.
operator
Thank you. We’ll take the next question from the line of Nikunj Bhanushadi from Kosh Wealth. Please go ahead. Nikunj, I have unmuted your line. Please proceed with your questions. Right now we are unable to hear you as the current participant is not answering. We will move on to the next question which is from the line of Ankit Puri, an individual investor. Please go ahead.
Unidentified Participant
Hi. Good evening, Mr. Bhagavan. The first question is with regards to the acquisition. What are the prospects of the cross selling and when do we start to see the results of the same on the balance sheet going forward? This year, Next year?
Madhav Kejriwal
I think within this year itself you will start seeing some impact. Substantial impact. Because of our overall size and the size of the acquisition. Probably sometime mid next year to to the end of next financial year you’ll start seeing a major impact of the acquisition on our books.
Unidentified Participant
All right. And what about the prospects of the cross selling? Do we hope to increase our sales with regards to BI types as well with their clients?
Madhav Kejriwal
Yes, please. Absolutely. This will encourage sales in the markets where TIS is strong for our existing product line of both pipes and fittings.
Unidentified Participant
Okay. Excellent. Secondly, what is the current inventory level in number of days in consolidated and standalone basis as of today? If you talk about quarter one at the end.
Madhav Kejriwal
Yes. So in terms of quarter one the inventory days is around 110 days and it has gone up compared to Q4.
Unidentified Participant
Okay. So 110 vis a vis what
Madhav Kejriwal
it was around 97, 98 days.
Unidentified Participant
All right. Thanks for the information. Lastly, will you be still sticking with Your overall guidance of 8, 8 and a half lakh tons for this fi year? And with you mentioned with things expected to pick up in H2.
Madhav Kejriwal
Due to the slowdown in the first two quarters, reaching that target will be difficult. We are looking at a flattish growth with regard to last year. So you can say seven, seven and a half lakh tonnes.
Unidentified Participant
But will the additional in terms of the fitting acquisition as well as the TIS acquisition, will they play a role in at least giving us better numbers compared to the last financial Year.
Madhav Kejriwal
I would say that we will have similar numbers as the last financial year because the entirety of the last finance we saw a slight slowdown in the last quarter. Whereas in this quarter this year the first two quarters will be exceptionally slow. So things will pick up in the second half but it will not be so much so that we will surpass last year’s performance.
Unidentified Participant
Comments. So we’re looking at a flattish basically this si.
Madhav Kejriwal
Yes please.
Unidentified Participant
That’ll be all for my. Sir, thank you so much.
Madhav Kejriwal
Thank you.
operator
Thank you. Participants, you may please press star and one to ask questions at this time. The next question is from the line of Rajat Ctr from I thought bms. Please go ahead.
Rajat Setiya
Hi, thanks for the opportunity. My first question is about the. What would be the industry level utilization in Di5 at the moment?
Madhav Kejriwal
Around 60, 65% please.
Rajat Setiya
Okay.
Madhav Kejriwal
Sorry. I’m so sorry. This is just for quarter one and quarter two, Right.
Rajat Setiya
And where do you see this moving? Let’s say once ordering begins in decrease 5, 6/4.
Madhav Kejriwal
Once the tax for the funds have opened up, sir, we’ll again be in a situation where the demand will be outweighing the supply. We still haven’t reached that stage where enough capacity has been added. So I think probably 90, 95% which is the norm for capacity utilization of every plant industrial.
Rajat Setiya
I see this happening in next year. Sometime in next year, right,
Madhav Kejriwal
starting H2. Sir, maybe starting H2 or a couple of months into H2.
Rajat Setiya
That soon?
Madhav Kejriwal
Yes, absolutely. It’s just a very temporary slowdown because of a lot of, I would say hierarchical approvals that are required at the government level to allow for funds to be. To be allocated. There is nothing else that is holding this back. So once that starts, we’ll see a good growth potential over here.
Rajat Setiya
In terms of opvc, how much of DI volumes would have been taken up by OPVC already? Any estimate that you would add, I.
Madhav Kejriwal
Think at the worst case scenario it will be 2 to 3%, if at all. Yeah, yeah.
Rajat Setiya
In terms of volumes, I think smaller sizes would not be big as it presented for the overall DI size.
Madhav Kejriwal
No, such smaller sizes contribute to around 40% of the DI demand. But again, OPVC as HDPE had when it had come in, it will not be an. It cannot be a replacement for di. It has its own set of applications and the overlap is very minor.
Rajat Setiya
If you can elaborate a bit on the last where you say overlap is.
Madhav Kejriwal
I mean the use case for a plastic pipe and a metal pipe is very different, sir. It depends a lot on things beyond just Transporting the water, it goes into pressure overload from the soil, soil condition, water condition, etc. Etc. So there are multiple aspects that determine whether plastic pipe goes into the ground or a metal pipe goes into ground. And considering India’s weather and other soil conditions, it’s a very small, I would say very, very small use case where you can use either a DF or a OPVC or hdp. In most cases it will be a clear cut answer that for this application we have to use DI and for this application we can use an HDP or an OPVC fee.
Rajat Setiya
And so one final question about the acquisition. What is the valuation that you are.
Madhav Kejriwal
Around 7 to 8 times of a beta EV. EV by beta please.
Rajat Setiya
So you said margins are 13%, maybe 5 million is the margin. We are paying almost 35, 40 million.
Madhav Kejriwal
Yeah, yeah, 35.5 to be exact actually.
Rajat Setiya
And how much debt in the books of the supply entity?
Madhav Kejriwal
Around 19 million people.
Rajat Setiya
Okay, thank you so much. Thank you.
Madhav Kejriwal
Thank you.
operator
Thank you. The next question, before we take the next question, a reminder to all the participants that you may please press star and one to ask questions. The next question is from the line of Dipesh Agarwal from ICICI Prudential amc. Please go ahead.
Deepesh Agarwal
Hi sir. Good evening. So a couple questions firstly around how was the demand scenario in terms of pipe dedication and dam improvement projects this quarter? And how are you expecting it to be in the coming year as well.
Madhav Kejriwal
Sir, the dam improvement projects and irrigation sector are slightly intertwined as well because a lot of the development that takes place there will help to expand the irrigatable land available. So I would say that in terms of irrigation today, whatever sales that are happening are largely because of hype, irrigation demand and Ambu demand. When we talk about dam improvement, I think the impact on the ground will take another six to eight months to take place, sir.
Deepesh Agarwal
All right. How is our current cash position looking like and how are we planning to fund our future project? Like will it be debt heavy or will it be internal? So we have net debt of around 1400 crores and we are sitting on cash of say around 250 crores. We have healthy cash generation out of the business operations and our term debt has come down to 345 crores. So our repayments for term debts is not very huge. We will have substantial amount of cash coming in from our operations to, you know, meet our CAPEX requirements.
So can you expect most of the capex will be cash funded, internal, cash funded only?
Madhav Kejriwal
Absolutely majority of the CAPEX will be Cash funded. And we don’t see any, any plans for or any requirements for taking on substantial debt for any of the future expansion plans.
Deepesh Agarwal
All right. My last question was around the development of the new products. I think in the last call we had mentioned, we are looking to foray into gaskets as well and other new products to create a whole ecosystem of water intra. So how is that development going on right now?
Madhav Kejriwal
Sir, this valve is a huge step in that direction. I think I’ve been mentioning that this is a product that can be a good addition. So this is a big step. And gaskets. We have already started our manufacturing for gaskets in the south. The plant is commissioned. We are also looking, in fact we are looking at a minor increase, a minor expansion in that as well. So we are slowly moving towards that. It will of course these things take some time and very soon, I think in the next year, year and a half or so you will start seeing the impact of the diversified product portfolio on the books.
Deepesh Agarwal
All right sir. That’s all I had. Thank you.
Madhav Kejriwal
Thank you.
operator
Thank you. The next question is from the line of Rajeshkarwal from Manior. Please go ahead.
Rajesh Aggarwal
My question is, does we require DI pipeline hydroelectricity projects?
Madhav Kejriwal
So you don’t require DI pipes? You can require DI pipes in hydroelectric projects. But because the size is very big and it’s beyond what the scope of DI pipes usually is, we don’t end up making our way into that market per se, but for fittings and for valves, definitely that’s a big market. It’s a very niche market in fact.
Rajesh Aggarwal
Okay. And so second question, the provisional figure of final curve. Have we received or we have not received that money?
Madhav Kejriwal
No sir, we’ve not received it yet. Since it’s a provisional order.
Rajesh Aggarwal
Okay.
Madhav Kejriwal
There are clarifications required from our side also and from JSW side. So we are in the process of getting that completed.
Rajesh Aggarwal
And so do we have a scope to export DI pipes to Middle east countries? Because there are a lot of requirements there today in the concord of digital saw, they said they’ve in fact backed a new DI pipe order of 2 like 75,000 tons also.
Madhav Kejriwal
So that is not from. That is not from Middle east per se. Okay. Also approximately 45% of our exports of DI pipes goes to the Middle East. So we are already very strongly present there.
Rajesh Aggarwal
So we have applying through the contact us.
Madhav Kejriwal
Yes, we are the largest exporters of pipe into the Middle East. General has a plant inside Middle east already.
Rajesh Aggarwal
So the orders are that that order is a local order or it’s a Middle East.
Madhav Kejriwal
Any idea from what I gather, it’s a local order. Please.
Rajesh Aggarwal
So that order traction has happened. I understand the money, money is tight because the contractors are not getting paid in time. Once they chart, the orders will pick up. But it is order, sorry, tender and all that that has started.
Madhav Kejriwal
Sir, tendering has obvious is an active process. It’s ongoing. But participation from the contractors are low because of their own limitations.
Rajesh Aggarwal
So once that is sorted out, once they start money receiving, they can bid for new orders. Then the cycle may start.
Madhav Kejriwal
Yes, please. Yes.
Rajesh Aggarwal
Thank you sir. And so second of the coke and all prices there, that is stable.
Madhav Kejriwal
Yeah, Coke prices are stable.
Rajesh Aggarwal
Okay. Okay, thank you sir. Thank you.
Madhav Kejriwal
Thank you. Thank you.
operator
Thank you. The next question is from the line of Meenad Sabnis from Sabnis Financials. Please go ahead.
Unidentified Participant
Yeah, hi. Thank all the opportunity. I have a small question to start off with. Is there any update as to have we started receiving orders on the river and Tim linking project?
Madhav Kejriwal
No, sir, we have not received any orders yet. Because the final detailed project reports have just been finalized for the NPUP River Link project which is the Ken Bethel project. It will be another few months before we see the orders come into our books.
Unidentified Participant
Okay, just looking at the big picture here because this presents a lucrative opportunity. What could be the volume? Can you quantify the opportunity? And what could be the ramp up next year? Well.
Madhav Kejriwal
I can have somebody type up work out the exact potential for all the projects together. But I would say that it will contribute to around 20% of the total demand over the next seven to eight years.
Unidentified Participant
Okay, great. That kind of gives a spiral of ballpark.
Madhav Kejriwal
Yes, please.
operator
Thank you. The next question is from the line of Saket Kapoor from Kapoor company. Please go ahead.
Saket Kapoor
Yeah, Namaskar, sir. And thank you for the opportunity. Firstly on the TIS acquisition, sir, we mentioned sales of 40 million euro and a debt of 19 million euro on the book.
Madhav Kejriwal
Yes please.
Saket Kapoor
Okay, so these are very significant debt debt numbers. What was the purpose of these closing debt? Have they done any capacity expansion or what is the nature of the debt?
Madhav Kejriwal
Sir, a big part of the debt is working capital. In fact, I would say around 80, 85% of the debt is working capital and the rest of the 15% debt is for the capital expense expansion that they had done in their plant in Turkey which is underutilized at the moment. That’s where we saw the opportunity for this project. And also the reason for the increased debt level is because one of it is the nature of the business itself requires you to carry some spares because A valve is like a car, wherein you have to keep some spare parts, not like a pipe that it has only one component.
So you have to get into a bit of operation and maintenance along with its sale. So you have to keep a stock of some spare parts. The other part, another reason is that they have, they had built up stock in expectation of certain orders and also due to the increased supply chain from China and India.
Saket Kapoor
And they have their plants, two plants. One is located in Turkey and the other one is in Italy. And their capacity is equally divided or which plant is. Is it larger in capacity?
Madhav Kejriwal
It’s equally divided. Please.
Saket Kapoor
The second question is on the blast furnace field at the. At our southern unit, sir. At the age have now improved for our Sri Kala unit. And what is the update for the unit? When will it start being operational? And the yield improvement?
Madhav Kejriwal
No, in fact because of the ongoing low demand scenario, the blast furnace is being operated with a lower yield for now. But as such the problem which it had has been rectified and it is now capable. In fact, a couple of months back it was producing full volume.
Saket Kapoor
This is for the southern unit, sir.
Madhav Kejriwal
Yeah.
Saket Kapoor
Okay. And what is the update on the Kada unit?
Madhav Kejriwal
So Qatar unit, the blast furnace is working normal here also again presently we, we have lowered the production because of this demand issue which is ongoing. But the nine day shutdown was just an annual shutdown, sir. This is not a normal course maintenance shutdown.
Saket Kapoor
Okay. And that is.
Madhav Kejriwal
Yeah, yeah, yeah, yeah. It’s coming. Nine day shutdown, sir. It was not a major overhaul of any sorts. We do this every year. Every year we have an annual shutdown for maintenance work.
Saket Kapoor
Yes sir. On the tonnage part you mentioned that on a total basis we would be flat on the five sales, closer to 7 lakh. So for this quarter our total number was 1.60. That is the pipe and I think the fittings and cp everything. So what was the pipe tonnage and what should we expect in terms of the tennis for Q2.
Madhav Kejriwal
Sir? Q2. I don’t say 150,000. It will be close to 150,000. A slight dip there. And, and we are expecting that possibly by next month the funds from JGM will start flowing in. So it will recover after that.
Saket Kapoor
So 1.6 will go down to 1.5 for next quarter.
Madhav Kejriwal
Yeah, 1 point. Yeah. 1.5. 1.55, something like that.
Saket Kapoor
Okay, sir. Fine. Sir. We hope for things to change. Yeah. Look better.
Madhav Kejriwal
Thank you. Very certain of it, sir. Don’t worry.
Saket Kapoor
We by nature are optimist. But let’s see how things we don’t know. But we have been contemplating this for nine months now. And things have just deteriorated over every quarter.
Madhav Kejriwal
I understand your apprehension sir. But it’s just the time of bureaucracy that’s about it. Principally everything is in the right direction.
Saket Kapoor
Right on the Orissa part of the story sir, where we were acquired some land and some green field that is on hold now. Or what is the update?
Madhav Kejriwal
We had not acquired land. We had identified the land and we were in the process of acquiring. Since that has been delayed, does the entire project at the moment is running delayed. And because of the acquisition of. Because of the opportunity of this valve company we have decided to reorganize our capital expenditure a little bit. So once there is some opportunity, once there’s some progress on the land then we will take up to see what kind of capex we want to do and what size we want want to operate.
Saket Kapoor
Right. Thank you sir.
Madhav Kejriwal
Thank you.
Saket Kapoor
Bye.
operator
Participants please just star and want to ask questions. The next question is from the line of Muskan from BNK securities. Please go ahead.
Muskan Rastogi
Hi sir. Thank you for the opportunity. So how much order book did we have in first quarter versus last quarter in terms of metric done and also how much ti volumes you have done in first quarter order out of 1.6 lakh metric ton.
Madhav Kejriwal
So out of the 1.60 lakh metric ton I would say around 1.55 lakh metric ton is DI pipes.
Muskan Rastogi
Okay. And how much affordable do we have in this quarter versus last quarter in terms of metric ton?
Vikash Verma
We have order book of around 4.7 lakh tons this quarter end. And if you compare it with previous quarter end it was slightly higher. It was around 6.7 lakh tons.
Muskan Rastogi
Okay. So I’m like. Since we have received like my earlier question that we have received 5 minutes crores compensation we already have like 1200 crores in working progress. So my question was would you be accepting this or would you be renegotiating it? Because if they accepted we would have to write off the balance, right?
Madhav Kejriwal
Well ma’, am, as explained earlier, this was. This was not a compensation for the entire mine. This is compensation for a particular asset within the mine. In fact the valuation given is the exact valuation that is on our books of accounts for this particular asset. So in that case we are running in line saying that of course there will be a. There will be some sort of negotiation and there will be some haircut of sorts you can say. But it will not be this substantial.
Muskan Rastogi
Okay. Okay. So My last question, like you mentioned that we’ll be doing similar numbers as of FY25. And this quarter we have done like almost 9010 of EBITDA margin. Which means we have to do 15 the next three quarters in order to match the last year numbers. And. And you mentioned that next quarter would also be little subdued. So then how are we planning to achieve the levels as of last year?
Madhav Kejriwal
Ma’? Am? I’m hoping we are hopeful of the quarter of the second half giving us better returns than that.
Muskan Rastogi
Okay. Okay. Thanks again.
operator
Thank you. The next question is from the line of Rajesh Pandari from Nakota Engineers. Please go ahead.
Rajesh Bhandari
Good afternoon, Sir.
Madhav Kejriwal
Very good.
Rajesh Bhandari
4.7 lakh. This is for how many months? And FY26 second after that it will be better expected.
Madhav Kejriwal
I’ll start by answering in sequence. In regards to the demand scenario for the next three financial years. I’m very certain that it’s going to remain very robust because there’s still a lot of work left to do. Functioning demand generator. I am very certain. Demand scenario European Union projects or global warming. Depreciation of water availability in certain pockets. So there is a lot of work that is happening in Europe at the moment for that.
Rajesh Bhandari
Partly compensation. 550. 600. 650 700. Approximately. Approximately.
Madhav Kejriwal
The Kariba Chesser exact number Batana per.
Rajesh Bhandari
I know, I know sir. I know, I know. Europe expect Karna for next three years or gasket turnover.
Madhav Kejriwal
Factory operational revenue generation substantial. In fact even in other aspects. Thus we are looking at other products that we can make with the same machinery.
Rajesh Bhandari
Okay.
Madhav Kejriwal
So we are on the drawing board sir to see how to maximize this in terms of valves as I mentioned already in car turnover here or growth expect current year on year. But their supplies from Italy. So as I mentioned this is a product which is not. Not manufactured in India at all. A lot of what they manufacture so of it is a lot of what they manufacture and specialize in, it’s not made in India. So our whole idea behind this acquisition is to gain the know how and the production strength from them and then replicate that at a cost effective level at India.
And not only manufacture in India for India, but also export from here.
Rajesh Bhandari
Export from India. Yeah, yeah, of course that will be a big danger.
Madhav Kejriwal
Absolutely. We have retained the entire team and the gentleman who was the promoter of tis, he has come on board to head the entire WILD unit for us. So it’s going to be a. It’s going to be a. It’s going to be a very interesting exercise and a very promising one.
Rajesh Bhandari
G. Right, sir. Thank you, sir. Thank you very much.
Madhav Kejriwal
Thank you.
operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Madhav Kejriwal
Thank you all for dedicating your valuable time and engaging with us during the con call. I want to reaffirm that the company is not only expanding, but also preserving the robustness of its balance sheet. Moreover, it is strategically poised to capitalize on the increased domestic and global investments in water infrastructure. Should you have any questions, please reach out to eny, our investor relations consultants. Thank you.
operator
Thank you, members of the management. Ladies and gentlemen, on behalf of Electrosteel Castings Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.