Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Electrosteel Castings Limited (NSE: ELECTCAST) Q4 2026 Earnings Call dated May. 18, 2026
Corporate Participants:
Madhav Kejriwal — Whole Time Director
Ashutosh Agarwal — Whole Time Director and Chief Financial Officer
Sunil Katial — Chief Executive Officer
Analysts:
Hiral Keniya — Analyst
Unidentified Participant
Pujan Shah — Analyst
Rajesh Agarwal — Analyst
Rajesh Bhandari — Analyst
Saket Kapoor — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 earnings conference call of Electro Steel Castings Ltd. As a reminder, all participant lines will remain 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 the operator by pressing Star then zero on your touchtone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr.
Hillel Kenya from EY LLP for opening remarks. Thank you. And over to you.
Hiral Keniya — Analyst
Thank you, Ryan. Good evening everyone. On behalf of Electro Steel Castings Ltd. I welcome you all to the company’s Q4NFY 26 Earnings Concord 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 CEO Mr. Ashutosh Agarwal, whole time director and CFO and Mr. Gaurav Samani, general Manager, Finance. Before we proceed with this call, I would like to draw your attention to the fact that today’s discussion may contain some forward looking statements that are subject to various risk uncertainties and other factors which would be beyond management’s control.
We kindly request to bear in mind that there might be uncertainties while interpreting such statements. We would now start the session with opening remarks from the management team. Afterwards we will open the floor for an interactive Q and A session. I will now hand over the conference call to Mr. Madhav Kjriwal for his opening remarks. Thank you. And over to you sir.
Madhav Kejriwal — Whole Time Director
A very good afternoon everyone and thank you all for joining us today. I would like to thank all our shareholders, customers, customers, lenders, employees and business partners for their continued trust and support throughout the year. FY2526 has been a challenging year for the water infrastructure sector. The domestic ductile and pipe industry operated in a relatively subdued environment. This is mainly on account of slower execution of water infrastructure projects by the States due to the delay in funds disbursement under the key government programs, mainly the Jaljeevan mission.
Our exports business performed well during this year helping us diversify our revenue mix and partially offsetting the softness in the domestic market. We continue to deepen our presence in international markets and remain optimistic about future export opportunities. Our sales volumes towards exports during FY25 26 has increased by 7% which was largely contributed by the Middle East. We were able to do good business in Q4. However, there will be an impact on the Sales to the Middle east starting from March 26 onwards due to the U S Iran conflict.
I would also like to take this opportunity to touch on our acquisition of TIS Italy which is our manufacturing wing. As per our expectations, the company has performed well with some challenges towards the end of the year. Revenue grew by 15% in the calendar year 25 to Euro 41 million versus 2024 and EBITDA margins also improved. Our vision is to double the revenue in the next four years. We have already started the development work for wirecastings in India and look forward to production soon. Despite all the challenges, we continue to manage our operations with discipline, maintaining positive cash flows and building a strong balance sheet with nominal long term debt.
The approval of the Jaljeevan Mission 2 marks a significant and long term positive development for the Indian water infrastructure sector. Budget Budget outlay has been extended to 8.69 lakh crores up to December 2028. The Central Government has enhanced its contribution to 3.59 lakh crores from 2.08 lakh crores. With this enhanced outlay extending up to December 2028 and increased budgetary commitment from the central government, the program reaffirms the government’s continued focus on providing safe drinking water connectivity across the country and strengthening water transmission and distribution infrastructure.
With this positive development, we are hopeful and expect some demand to restore by early second quarter of this financial year. We believe that JJM2, along with continued investments in urban infrastructure, sewage networks, irrigation and the much looked forward to river linking project will create substantial medium to long term demand opportunities for the ductile ion pipe industry. I would like to reinstate and reaffirm that our integrated manufacturing operations and strong distribution network continue to provide us with strategic advantages in serving both domestic and overseas markets.
As we move into the new financial year. We remain cautiously optimistic and while some near term challenges may continue in certain regions due to the project execution timelines, overall industry visibility, global geopolitical stresses, we feel the overall industry visibility has improved meaningfully compared to earlier quarters. We expect demand momentum to strengthen gradually and as execution under JGM2 accelerates and government spending gains pace. With this, I would like to now request Mr.
Ashutosh Aggarwal, our whole time director and CFO to take you through the operational and financial performance for the year in greater detail. Thank you once again.
Ashutosh Agarwal — Whole Time Director and Chief Financial Officer
Thank you. Madhee. Good afternoon everybody. I will take you through some financial details of the company for the fourth quarter as well as for the full financial year. Sales volume of DI Pipe Fittings and CI Pipe during the fourth quarter stood to rupees to 1.48 lakh tonnes down by 21% year on year basis. In 202526 full year the sales volume was 5.84 lakh tonnes 25% decline from the previous year which thus impacted the overall financial performance of the company. The decline in the volume was primarily due to slowdown in the domestic market.
However export price volume grew by 7% in 20242526 partially offsetting the weakness in domestic market and providing support to overall business performance at a stand on basis. Gross date as on 31st March 2026 to 1202 crores which decreased by 598 crores from the previous year. The long term debt stood to 352 crores and short term debt stood to 464 crores. I will now take you to the consolidated result of 2526 and full year 2526. Total income stood to rupees 1530 crores in the fourth quarter and 6133 crores for the full year.
Sales were lower year on year primary due to reduced sales volume in domestic market. EBITDA including other income for the fourth quarter stood to rupees 99.3 crores with the EBITDA margin of 6.5%. For the full year EBITDA stood to rupees 573.6 crore with an EBITDA margin of 9.4%. Fat for the fourth quarter stood to 16 crores and for the full year it is 151.5 crore. Now I’m moving to stand on results for the fourth quarter as well as for the full year. Total income for the fourth quarter stood to rupees 1228 crores lower year on year basis 523.3% for the full year stood to rupees 5228 crores due to lower sales volume.
EBITDA including other income for the fourth quarter stood to Rupees 57 crores with a EBITDA margin of 4.7% and for the full year approximately 900 crores with EBITDA margin of 9.6 crore percent. Pad for the quarter was a loss of 10.7 crores while the full year restored to Rupees 1031.3 crores. In this position Board has decided to reduce the dividend from 140% to 90% subject to shareholders approval. While 202526 remain challenging due to softer domestic demand. We believe that long term outlook for the water infrastructure sector continues to remain strong.
With this now I am the floor for the question answer session. Thank you.
Questions and Answers:
Operator
Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue you may Press Star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Ritesh Ram Gandhi from Discover Capital. Please go ahead.
Unidentified Participant
Hi sir, just wanted to understand, you know when, you know a few years ago we read a number of reports about how the you know opportunity in Dacta land pipe for many many years is going to be extremely small, was going to be extremely strong and the opportunity is extremely high. And obviously over the last year or so we’ve seen that the demand fall off quite materially and apply also increase materially. So is this new and normal? I just want to understand what has changed in this.
Madhav Kejriwal
So the reports of certain issues around the way Jaljeevan mission has been implemented so far and owing to that the scrutiny and the complete blocking off of central funds over the last one one and a half years is the main cause for the sudden drop in the demand. JGM constituted 50 to 60% of the industries total demand. And we never expected that due to some irregularities we will be in a position where there will be such a strong and such a sudden, you know, handbrake from the spending on that front.
So this is the major reason in my opinion most definitely this is not the new normal. This is the rock bottom. Of course as at the time of the last to last year and the year before that we were quite certain that that is also not a normal, that is the upper end. Here we are at the lower end. So I am fairly certain that we will go back to our older days of earning a 15, 16% EBITDA level and maybe the volume growth will be a little more, I would say less jumped and more slow. But definitely we are not at all thinking that the industry running at 50% capacity is the new normal.
Operator
Does that answer your questions?
Unidentified Participant
Yeah.
Operator
Thank you. We take the next question from the line of Veenaki Banerjee from AUM Capital Private Limited. Please go ahead.
Unidentified Participant
Good afternoon sir. Thanks for the opportunity. Sir, you have mentioned that Mission two where you are expecting a sizable chunk of business but actually you have also mentioned that this just even mission one actually where the government. There was a slowdown in government regarding the projects and blocking of funds. So how optimistic are you in this segment? First
Madhav Kejriwal
Sir, all the scrutiny that had to be done has done and you know, after that revitalized Jalgivan under the name of Judge Even two has been taken out by the government. The cabinet has approved it. States are now being allocated funds. There is a very strict prerequisite, regular TADI prerequisite that is needed from the states for the disbursement of the funds to take place. So there is a very. It’s. It’s moving towards a. It being a more foolproof funding mechanism. So the fact that the government is.
The central government is spending so much time and effort towards this exercise, it’s a clear indicator that it is still a part of the priority else they would have dropped it by now. And I’m very certain that being the pet project of honorable pm this is going to be something that he’s going to see to the very end.
Unidentified Participant
Okay. Okay sir, my next question is like in this year actually though actually the exports were a cushion to you to report a steady number. But now due to this Middle east crisis, how are you coping up or what will be your strategy going forward?
Madhav Kejriwal
Sir, the Middle east impact is definitely going to have somewhat downward pressure. Middle east contributed to approximately 50% of our exports. Saying that I think with the improvement in the domestic market starting quarter two, quarter end, say mid quarter two, there will be some improvement from that aspect. And for the remainder of it, I think a little bit of product diversification that we have done with valves will help us create some cushioning.
Unidentified Participant
Okay. And this one last question I will just present. So in the balance sheet you are showing us investments 531crores. The current investments in what type or are they liquid in nature?
Ashutosh Agarwal
Almost liquid in nature.
Unidentified Participant
Okay. So the. Considering that cash and bank balance and this investments add up to around 800 crores. So how do you plan to deploy these funds?
Ashutosh Agarwal
As we have declared that we are also setting up a plastic. Yes. Or it is a print plant,
Unidentified Participant
Some money will
Ashutosh Agarwal
Be invested there.
Unidentified Participant
Okay. Okay. Balance.
Ashutosh Agarwal
We are earning interest from that. Okay. Set up a wall plant in India.
Unidentified Participant
Okay. Okay. And that’s all for my end. And thank you and all the best for the future.
Ashutosh Agarwal
Thank you.
Operator
Thank you. Participants. A reminder, if you wish to ask a question, please press star and 1. We take the next question from the line of Poojan Shah from Molecule Ventures. Please go ahead.
Pujan Shah
Hi sir. Thanks for the Opportunity. Am I audible?
Unidentified Participant
Yes.
Pujan Shah
Yes. Okay, perfect. My first question would be. So just want to understand in RPP we have mentioned that there is a fund release from government end of 15,060 crore. So I just want to understand if you can spell out how much money is still pending from government and to be released or need to be released and how this situation will pan out. Like in Q2 what I’ve been seeing is the release of funds gradually or we have been seeing a new tender is being opening up which will create a new opportunity for the company as well as the industry.
Madhav Kejriwal
So sir, the government budget for this particular financial year under JJM is 67,670 crores. Just a correction sir. The disbursement that was done last year was not 15,000 crores, it was 1500 crores because the cabinet approval came at the very end of the financial year. But nevertheless this is a fund that has been released after many many months. So it was a few drops of water on a very dry soil saying that I think the government of West Bengal post the election announced some 2700 crores and as such there has been MOUs being signed with various states for disbursement of money.
So I think quarter two onwards as I said the jumps will not be very sudden but it will be a steady increment of demand increasing over three to six months and that will help us position ourselves back to strength. I am fairly certain that quarter three, quarter four of this financial year you will see us slowly getting back into the saddle.
Pujan Shah
So just want to continue with the same question. So obviously I understand the situation as the fund flow has not been released so there might not be. The new activities might not be happening up. But just want to understand can we see the new tenders being flowing around right now or it is very early to. Due to all the situation crisis has already halted all the operations which etc need to make.
Madhav Kejriwal
No sir, inquiries from customers are started coming in now
Pujan Shah
But it is on a meaningful way or it is just a beginning of. It’s a very nascent state.
Madhav Kejriwal
It’s somewhere in the middle of both sir, it’s not nascent for sure. There is serious interest from our customers for supplies even within this quarter. So it is not that it is nascent but at the same time it is not close to its fullest potential. So it’s somewhere in the middle of the two.
Pujan Shah
Got it sir. And sir we as a jalg mission is we might end in December 28th. So I understand that there might be delay in terms of execution. But if just want to understand on a broader aspects then what are the demand drivers will be there forward 2028 that will ensure our growth and grow trajectory towards what we in a sustainable manner.
Madhav Kejriwal
Sir, post 2028 the two largest drivers for demand for us will be irrigation. And something linked to it which in my opinion will give us a good impetus is the River Linking project. Along with that demand from the urban sectors and the rising pressure for increasing infrastructure in tier 2 tier 3 cities is also seeming to contribute overall. Although it is not something as big as a Jaljeevan mission but it definitely has its own contribution. These are going to be the main drivers for DI pipes and for us at Electro Steel.
Sir, our recent diversification into valves which is a water specific product but it is not specific to ductile iron as a. As a material it is used regardless of what pipe material is being utilized. And our other investment diversifications that we are looking at such as paints is going to help us cushion ourselves against any undulations as we have faced over the last one one and a half years.
Pujan Shah
And sir, can you just give us a brief idea on how much money receivables it has been stuck in front floor from JJ and how much it has been released till date.
Unidentified Participant
There’s no significant funds stuck for us because we are supplying to APC players. So our collections are mostly on time. Our debtors, what you see are, you know, regular debtors. So it’s not, you know, any significant overdue one.
Pujan Shah
Got it, Got it. And my last question would be on the coal block. So just want to give get an update on the coal block amount. Can you just give a specification of what is happening?
Madhav Kejriwal
So soft cost for the one particular asset which is a shaft and inclines is yet to be announced and by the ministry hard costs have been announced and they are roughly similar to what our estimates were. So it’s a long drawn process, sir, it will take time. But I’m also again certain that our numbers are strong. So these things take time but they happen eventually.
Pujan Shah
Thank you so much sir. And all the best.
Madhav Kejriwal
Thank you.
Operator
Thank you. We take the next question from the line of Rajesh Agarwal from Manor. Please go ahead.
Rajesh Agarwal
Hello. So what is our current order book? Whether it is 5 months, 6 months, 9 months. First question. And second sir, what is the difference between the Jalgiva 1 and 2? What difference it makes makes to us. And the third question is the amounts of money which is getting released now. Are they resulting in inquiring or new fresh orders because the pending order itself is huge. These are the three questions.
Madhav Kejriwal
So our order book at the moment is between four to five months.
Rajesh Agarwal
Okay,
Madhav Kejriwal
Our. When you say new orders, all the tenders that were to be released under Jaljeevan mission have already been released. Of course there are always some adjustments to those tenders, but those tenders are yet to be allocated to. A lot of those tenders are yet to be allocated to EPC contractors and then in turn coming to us. While that is the case, there is also as I, as we have 4, 5 months of order book or other manufacturers are 4, 5 months of order book. On top of that contractors have tenders which they have won for which they have not yet placed the order.
Rajesh Agarwal
Okay,
Madhav Kejriwal
So these three are major drivers. I mean if you let us let put aside the orders that we have already booked,
Rajesh Agarwal
Orders
Madhav Kejriwal
With contractors that are yet to be booked and tenders for which contractors are yet to be allocated. These two are the main driving forces under jj.
Rajesh Agarwal
Any rough idea what is the quantum, sir? Quantum of orders in terms of volumes, metric tons, the tender, the old one, everything.
Madhav Kejriwal
It’s I would say around 3, 3.5 million tons.
Rajesh Agarwal
Okay, so the chances of us backing, what is the, our cycle of backing the orders?
Madhav Kejriwal
We have around 20 to 25% of the domestic market.
Rajesh Agarwal
Okay. And so whenever the order comes and the plant runs in capacity, the EBITDA margins will come back immediately. 15, 16 EBITDA margins,
Madhav Kejriwal
Sir, immediately. As I said, if he over it will be a little bit, it will be a steady growth rate. But I’m fairly certain that we will get to a 15% EBITDA margin.
Rajesh Agarwal
Is there any pressure from the cost side?
Madhav Kejriwal
We are facing some increments going to the war. I’ll allow Mr. Katyal to give a more elaborate answer on this, please. Cost pressure due to war
Sunil Katial
On the cost front, principally the freight has gone up. That is one major component. And we have major input in the form of coking coal which comes from overseas. So that is one area where the cost is getting, I mean substantially impacted. And now gradually, I mean the energy cost in India also has already gone up by almost 70, 80%. Added to that now as a third phase now the government is also raising for general transport. Also the diesel and petrol prices are going up.
Rajesh Bhandari
So that
Sunil Katial
Also will impact. Now these three factors, I mean, I mean are actually causing a bit of a dislocation of the whole thing. Second is that, see the movement of ships are also getting delayed which is also creating a type of a problem. Because the whole cycle of movements is disturbed. So these are all having a adverse impact on the cost.
Rajesh Agarwal
So going forward will be able to pass on the cost disruption is a different thing that is due to the war. The cost can be passed on. No,
Madhav Kejriwal
It has it a slightly delayed onset in the sense that the cost goes up today because we will have existing order book for the increased sales price to reflect in our performance. It takes around a quarter post that you will see that there is changes in the or there is a input of the cost into the selling price.
Rajesh Agarwal
So the last question. What was the component of exports in this quarter current ending quarter
Unidentified Participant
Component in the sense sir,
Rajesh Agarwal
The total, total total exporter. The. On the volumes, what was the exporter in terms of value? Suppose we did 1500 crore turnover there at this time, what was the export orders?
Unidentified Participant
So exports contributed for this quarter around 23%
Madhav Kejriwal
Of our
Unidentified Participant
Revenue.
Rajesh Agarwal
Okay. So going forward it can be the same for exports.
Madhav Kejriwal
With the expectation of the Indian market picking up and with Middle East, Middle east being a little muted, we are, we are seeing that this will come down to probably 17 18%.
Rajesh Agarwal
Okay, thank you sir. Thank you.
Madhav Kejriwal
Thank you.
Operator
Thank you. Participants who wish to ask for questions please press star and 1. We take the next question from the line of Saket Kapoor from Kapoor and company. Please go ahead.
Saket Kapoor
Yeah, Namaskar sir. Hope I’m audible sir. Yeah. Taking into account our deliverables for the current financial year, what is the likelihood for us for this current year? Not factoring in what Madhavji was mentioning in terms of Q3 and Q4 in normal course of business with the type of sentiment that currently is what. What should be the deliverables for the years and what should be our EBITDA margin trajectory.
Madhav Kejriwal
So can you be, can you elaborate a little bit on what you mean by deliverables
Saket Kapoor
Delivery? We said scheduled pipe delivery care is for this financial year,
Madhav Kejriwal
Sir. We are expecting that we will have a Dispatch of around 6. Around 7 lakh tonnes approximately this financial year. This is including our export numbers. And in terms of our EBITDA margins, I think considering a slower Q1, Q2 and a slightly better Q3 Q4 approximately 13 14% percent is achievable
Saket Kapoor
On a. On a consolidated basis for the year.
Madhav Kejriwal
Yes please.
Saket Kapoor
Okay sir, when we mentioned 7 lakh it is only about the pipe or pipe fittings and everything all together.
Madhav Kejriwal
Oh, this is just a pipes please.
Saket Kapoor
Okay, so Our number was 5-84,000 for pipe spittings. So if you could give the pipe
Madhav Kejriwal
It will be around 7.4 please.
Saket Kapoor
Including or everything will be 7.4.
Madhav Kejriwal
Yes. Okay
Saket Kapoor
Sir then about the the Italy acquisition. What is the current order book and what steps are we taking exactly? Sir, what kind of revenue profile will open up in times to come? I think so. With product development what are we eyeing to achieve from this investment?
Madhav Kejriwal
So sir, this financial year will be a bit more stable than a growth based trajectory. Because of the issues around the supply chain Valves is also a business which has a lot of components coming in from many different parts of the world. So this pressure on freight cost is going to have a bit of impact on our overall business. But our projections is that we will double up our revenue in the next four years. That is approximately a 20% growth rate. That’s what we are eyeing. This will be contributed through India, the Middle east and Europe.
Saket Kapoor
Sir, on the just two small points on the revenue profile, how should TI work? The current money should be at an optimum level. If you could just give on in rupee terms how should this entity perform?
Madhav Kejriwal
So last year they had a revenue. If you consider the calendar year was approximately 400 crores. We are seeing that this financial year instead of a 20% growth rate we should probably hit a 14 15% growth rate. So I think around 450 crores
Pujan Shah
The entire years.
Madhav Kejriwal
Last entire year’s revenue is not reflected in our books because the company was acquired in August. So what you see in the books of accounts is a. Is a half year situation and they are currently they were running on a calendar year basis. So if you consider this calendar year I think they should be at around 440. 450 crores
Saket Kapoor
And margin profile
Madhav Kejriwal
14 to 15%.
Saket Kapoor
Just to end the discussion here sir, when you mentioned 7 lakh pipes you are factoring it that the JALG one and the ALL scheme will be gaining traction from Q3 onward. That is what the hypothesis is Currently steady
Madhav Kejriwal
Traction sir. Not. Not pedal to the middle traction. There is a good. We are considering. As we said we have been cautiously optimistic. Not overtly optimistic.
Saket Kapoor
Right sir. And sir, on the last part is on the promoters buying Sir, I think so. The promoters have endorsed their faith by upping the stake from the open market acquisition. So for your minority shoulders, what should they anticipate? Are we done with our exercise or we can look forward for the activity or you find still find value to invest more.
Madhav Kejriwal
Sir, at this moment we invested what we were capable of investing from the promoter side of course we also have to look at our personal financial capabilities more than more. Than just the confidence of the company. I think going forward definitely if we could we would invest further.
Saket Kapoor
Okay. And it was. It was the lower challenges only that led to the standalone losses for this quarter. Or the lesser absorption of fixed cost. Or what could be the main reason for us posting not being able to cover our finance cost and other aspects. And reporting losses for of 7 crore on a PBT level.
Madhav Kejriwal
Sir, loss of tonnage, there is an exceptional cost of around 38, 40 crores. On account of the new labor rules. That and definitely the margins being squeezed due to a dearth of demand. These are the three major factors due to which we booked a loss.
Saket Kapoor
Then the realizations for pipes are also down, sir. ABHI Jamari paid order booking. Therein are the pipes realization also lower because of over capacity in the system and lesser demand from the amount of pickup of stock from the EPC players.
Madhav Kejriwal
Yes, sir. I think as similar to what is reflected by a lower EBITDA margin our cost to realization Delta has reduced. That has also caused a downward pressure on the profitability.
Saket Kapoor
So one one should consider conclude that even for Q1, sir, this is the trend because that. That the things have not changed. As of now. We are already half of what 45 days into the quarter. So there are no further any change in the profile for the company’s operation, operating and financial performance?
Madhav Kejriwal
Nothing substantial, sir.
Saket Kapoor
Thank you.
Operator
Thank you. Ladies and gentlemen. If you wish to ask a question, please press star and 1. We take the next question from the line of Rajesh Bhandari from Nakoda Engineers. Please go ahead.
Rajesh Bhandari
Good afternoon, sir.
Madhav Kejriwal
Good afternoon. Hello.
Rajesh Bhandari
Yeah. Can you hear me? Sir?
Madhav Kejriwal
Very well, sir.
Rajesh Bhandari
Yeah. Yeah. Sir, We expect orders from the contractor. Do contractors have the orders?
Madhav Kejriwal
Yes, sir. Contractors have substantial orders. Plus there are tenders for which the contractors have not yet been selected.
Rajesh Bhandari
So
Madhav Kejriwal
Both of these factors are there? No. No, sir. I am optimistic. Things will get better, not worse.
Rajesh Bhandari
Okay. 8.69 total budget 3.59 center. There are 5.1.
Madhav Kejriwal
Right, sir.
Rajesh Bhandari
Irrigation system, river linking, urban infra, sewage systems have been included there.
Madhav Kejriwal
This is just.
Rajesh Bhandari
A mission. December 28th. Then we are dependent only on these river linking, irrigation system and all that.
Madhav Kejriwal
Sir, it’s not that it will go away. Today rural demand which is under Jarjeevan is giving us 50 to 60% of the total demand.
Rajesh Bhandari
I.
Madhav Kejriwal
I am fairly certain that even at. Even after these investments
Rajesh Bhandari
It
Madhav Kejriwal
Will go down to probably half of what it is today. Today. So it will still contribute to 25% of the demand. It cannot be that it would completely go away because even when we started
Rajesh Bhandari
There
Madhav Kejriwal
Were X number of households which were having water. But those pipelines are old, they need replacement.
Rajesh Bhandari
There’s
Madhav Kejriwal
Always some repair work going on. The 19 crore number that was there was basis and earlier population consensus. I’m sure they will find that they will need to keep investing
Rajesh Bhandari
Albeit
Madhav Kejriwal
In a smaller scale and more state level than central.
Rajesh Bhandari
But some investments
Madhav Kejriwal
Will keep coming up. Haryana Dec 28
Rajesh Bhandari
Also we will have Delgio and Mason to some extent
Madhav Kejriwal
Sir. I’ll give you an example. Haryana as a state has achieved 100% top connection connectivity. But they still have tenders coming up in rural.
Rajesh Bhandari
So it’s
Madhav Kejriwal
Not that it will go away. It might not be called judgment mission but rural India’s demand for pipes will continue.
Rajesh Bhandari
What we can expect 26, 27 manufacturing we can expect
Madhav Kejriwal
Approximately 7, sir.
Rajesh Bhandari
7 but up in total capacity to 9 lakh.
Madhav Kejriwal
Between 8 and a half to 9. Right?
Rajesh Bhandari
Between 8 and a half to 9.
Madhav Kejriwal
Optimistic situation here similarly pessimistic situation. Percent
Pujan Shah
This level
Madhav Kejriwal
Pay stabilize next year next financial year onwards. But I think 14 to 16% bandwidth as opposed to 17 18% that we were hitting at the optimistic level is doable sir. Because even before JJM and PRE covered
Pujan Shah
The domestic
Madhav Kejriwal
The Indian ductile and pipe industry had a average ebitda level of 15%. So that is pretty much doable.
Rajesh Bhandari
I. I remember sir. AP.
Madhav Kejriwal
Opportunity optimism is difficult to predict. I can give more of a stable size at where we can go. I was quite sure that that is a glorious situation.
Rajesh Bhandari
It’s not that
Madhav Kejriwal
It will not return but I can’t. It’s difficult to pinpoint.
Rajesh Bhandari
Pass.
Madhav Kejriwal
Stable profits operations next financial year expect
Rajesh Bhandari
We can expect from that time
Madhav Kejriwal
Of course European countries this is all geopolitical situation. Close to our numbers slightly lesser marginally. Disbursement versus and it will take time sir. This is a long run process.
Rajesh Bhandari
There is
Madhav Kejriwal
A hard cost soft cost element to all the assets that are there.
Pujan Shah
They
Madhav Kejriwal
Will go through that process to unsteady Is also facing some delays in there.
Rajesh Bhandari
Yeah yeah yeah. Approvals
Madhav Kejriwal
For the mining. So they are also. You know. You know how things move sir in this regard.
Rajesh Bhandari
In second half of 26:27 and further we can expect that same electro steel casting as in the past.
Madhav Kejriwal
I’m very hopeful sir. You’re also investing and diversifying in different products. So that should help give us some
Rajesh Bhandari
Different product like. Okay.
Madhav Kejriwal
Definitely sir.
Rajesh Bhandari
They are also into the same kind of vaults.
Madhav Kejriwal
Not. Not entirely. S.
Rajesh Bhandari
Do we have kind of a monopoly?
Madhav Kejriwal
No, I wouldn’t say we have a monopoly. There are other companies also international companies that are there in India but of course they don’t have the team strength and the reach
Rajesh Bhandari
Depth
Madhav Kejriwal
That we do with our customer base.
Rajesh Bhandari
So that will help us in getting our turnover also because Wal will have a much better profitability margins. All the best. All the best to you sir. Thank you.
Operator
Thank you. Participants who wish to ask a question, please press star and one we take the next question from the line of Ankit Puri, an individual investor. Please go ahead.
Unidentified Participant
Hi, good evening Madhav Ji.
Madhav Kejriwal
I’ve got
Unidentified Participant
Two questions. One is given the significant exposure to government link infrastructure and water projects, does the recent change in state governments have any bearing on the project execution order inflows, payment cycles, approvals or policy continuity? Have you observed any slowdown or reprioritization in decision making at the state level?
Madhav Kejriwal
Well, two major states where there has been a. I would say three states in terms of their contribution to our business. Kerala, Tamil Nadu and Bengal. These states, I of course there is a small slowdown during the election period and due to the change there will be maybe a month or so of slowdown. But at the policy level I don’t see the new governments not wanting to pay attention to jjm. Bengal was very quick to announce disbursement. In fact from the center they were dispersed money or allocated money rather.
Sorry, my apologies. Allocated money, not dispersed. So I. I find that whatever slowdown is there is only administrative in nature, not policy or mindset in nature.
Unidentified Participant
All right, the second question I’d like to request your views on. We are expecting a severe drought conditions this year as per predicted by many, including imd. Do you foresee any reallocation of state or central government spending away from existing infrastructure programs towards emergency relief measures? Or could that affect project execution timelines or order inflows as well?
Madhav Kejriwal
So the bigger threat at the moment is the energy security of the nation. Drought of course has a major impact as well considering that India is still very largely dependent on its agriculture industry. But it seems the top of the town is the energy sector and there is less being thought of in regard to the super El Nino effect that we are expecting. Saying that at one end it might cause certain delays, although very temporary in nature, maybe a quarter or two. But it will also give us impetus to get the government to focus on understanding that the time of the old ways of irrigation are over and more and more, more infrastructure towards pipe irrigation needs to be put in place.
Pipe irrigation is to a very large extent armored against these major issues. Of climate uncertainty.
Unidentified Participant
All right. And if the Iran conflict escalates into a prolonged energy disruption due, expect the impact to be primarily on the input cost, supply chain, continuity, exports or demand destruction as well.
Madhav Kejriwal
In my opinion, there will be an impact on both demand and on supply chain and input. But the contribution of the disruption from demand side will be lesser. There will be a higher impact of cost and supply chain. But definitely all three will be impacted. There’s no doubt about that.
Unidentified Participant
All right. And lastly, you earlier indicated plans to expand into industrial paints and productive coatings. Could you elaborate on the business roadmap here including
Madhav Kejriwal
To elaborate for you on that front please.
Sunil Katial
On the paint front, in fact we are getting into industrial paint segment. And the plan is that we have principally driven a five year roadmap by which we will go to a business revenue top line of around 600 crore by that time.
Unidentified Participant
All right, sir. And any. I mean initial what is the outlayed 8 to 100 crore is spent towards Expected to be spent over how much period?
Sunil Katial
This is expected to be spent over a span of within two years. Maybe one and a half year of.
Unidentified Participant
And when do we see the positive effects being reflected in the bottom line?
Sunil Katial
Bottom line from financial year 2829 we will see a positive impact of that.
Unidentified Participant
All right, sir. That will be all from my side. Thank you very much. All the best to you all.
Sunil Katial
Welcome.
Operator
Thank you. Participants who wish to ask a question, please press star and 1. We take the next question from the line of Hari Kumar, an individual investor. Please go ahead.
Unidentified Participant
Very good evening sir. Am I audible?
Madhav Kejriwal
Yes, please. Good evening.
Unidentified Participant
Yeah. Regarding this project, sir. How much share like would be the pipeline work of the 40,000 crores?
Madhav Kejriwal
So could you repeat that
Unidentified Participant
Project out of this 40,000 crores, how much that share could be pipeline work, sir.
Madhav Kejriwal
Around 10 to 15%. Please.
Unidentified Participant
Okay. Okay. And this. Feasibility reports like DPR have been completed for river projects like when, when, when can you expect them to be executable? Stage, sir.
Madhav Kejriwal
So sir, every project is in a different stage as you mentioned Ken betwise in the furthermost advanced stage. Then there is the river link between Rajasthan and mp. And there are some works going on within Tamil Nadu and. And within Maharashtra as well. So each project will have its own timelines. It’s difficult to say that as it. It’s not one project really. It’s all under the garb of Riverlink. But there are many multiple. And each project very mega sized being executed at different timelines.
So I feel that Riverlink as a. As a overall subject will Take our country around probably five to seven years to execute.
Unidentified Participant
They would be through pipes and not open can also.
Madhav Kejriwal
So up to a certain mass it has to be done through open canals because you cannot use pipes to move that level of water. It’s the, the main vein that will be used to connect the rivers has to be open canal. But all the subsidiary pipelines that will come out, all the routes that will come out from that main drain, those will all be in pipes and they will contribute to irrigation, to rural water supply and in some cases even urban water supply.
Unidentified Participant
Okay, that’s all from us. We thank you very much.
Madhav Kejriwal
Thank you very much.
Operator
Thank you. We take the next question from the line of Rajesh Agarwal for Manior. Please go ahead.
Rajesh Agarwal
So my question is on the Jalga Mission 2 which has been here, there has been a condition key. The last mile water connectivity has to come on the tap. Only then the payments will release. So then the EPC contractors will get less cycle of money and that in turn will result in our payment also delay getting delayed.
Madhav Kejriwal
I wouldn’t say that will result in the payment getting delayed. But as I mentioned the growth for demand which was more like a floodgate release during the previous years
Unidentified Participant
That will
Madhav Kejriwal
Become a bit more steady. So there will be stability in the demand which has a positive aspect to it also where there is no ups and downs. It’s not that there will be a major delay on the payment because even the EPC contractors through the last few years of experience of a massive upswing and a massive downswing
Rajesh Agarwal
Have
Madhav Kejriwal
Started operating in a more stable way rather than being extremely opportunistic.
Rajesh Agarwal
So working Apple cycle may get. No, you feel.
Madhav Kejriwal
I don’t, I don’t foresee that happening sir. Because
Rajesh Agarwal
You
Madhav Kejriwal
Know we are, we are hedged across multiple states and it’s not just Jaljeevan mission. So even with Jaljeevan mission it is still 35 to 40% or even lesser in fact around. Yeah, no, actually 35 to 40% of our contribution to demand today for electricity specific basically. So within that even if it goes up by 10%, it’s not so much of a difference really.
Rajesh Agarwal
So and last question, what will be the capex and maintenance capex in 2627 capex and maintenance
Madhav Kejriwal
Around 25 to 30 crores.
Rajesh Agarwal
That will be maintenance capex only. Okay. No, no further. No, no new capex.
Madhav Kejriwal
Well so for the paint plant and for our valve plant in India which are both in, in design and development stage,
Rajesh Agarwal
These
Madhav Kejriwal
Two will have a capex. But of course it’s. We have not determined exactly how much will be required this financial year, how much will flow into the next financial year because
Rajesh Agarwal
The
Madhav Kejriwal
Plants are still in design stage. So this will take. It will take some time.
Rajesh Agarwal
So in two years it can be. How much? You can. If you can quantify that 200 of.
Madhav Kejriwal
Between 200 to 250 crores.
Rajesh Agarwal
Thank you. Thank you sir.
Operator
Thank you.
Madhav Kejriwal
Thank you very much.
Operator
Ladies and gentlemen. Due to time constraints, we take that as a last question and we conclude the question and answer session. I now have the conference over to the management from Electro Steel Castings Ltd. For closing comments.
Madhav Kejriwal
Thank you everyone for joining us today and thank you for your continued trust in our company. We remain committed to driving sustainable growth, strengthening our balance sheet and creating long term value add for all our shareholders. We appreciate your support and we look forward to updating you on our progress in the coming quarters.
Operator
Thank you on behalf of Electro Steel Castings limited. That concludes this conference call. Thank you for joining us. And you may now disconnect your lines.