Jindal Saw Limited (NSE: JINDALSAW) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Vinay Gupta — President and Head Treasury
Narendra Mantri — President Commercial and Chief Financial Officer
Analysts:
Unidentified Participant
Vikash Singh — Analyst
Sailesh Raja — Analyst
Darshil Jhaveri — Analyst
Gaurav Shah — Analyst
Deepak Lalwani — Analyst
Gargi Singh — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call of Jindal Saw hosted by ICICI Securities Ltd. 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 then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Singh from ICICI Securities Ltd. Thank you. And over to you sir.
Vikash Singh — Analyst
Good afternoon everyone. Welcome to Fusion 26 annual conference call of Zindal sir, from the management side we have with us Mr. Vinay Kumar President Head and Treasury Mr. Narendra Mansari. Basically he is the Chief Operating and financial officer and Mr. Rajiv senior vice President Head Corporate Finance. Without taking anyone’s time, I’ll give the it to Mr. Vinay Kumar for his opening remark. Over to you sir.
Vinay Gupta — President and Head Treasury
Thank you very much Vikas and good afternoon friends. I welcome all of you to the investors call of Jindalso Limited for Q1 of FY26. We also place and record our appreciation to IT securities for hosting this call and providing this platform. As you know like in the board meeting held on the 5th of August which was yesterday, the board reviewed, discussed and approved the unaudited results of the company and the same was also communicated to the stock exchanges and to. Thus I presume that the results would have been received and reviewed by all of you so that we can have a meaningful interaction.
Now to provide a broad overview on various aspects about the operations of the company subsidiaries and other updates. First about the results Q1 of this quarter. The Q1 for FY26 by far we have demonstrated softer results as compared to previous year and couple of previous quarters. Despite the demand of almost all the products remains robust which is reflected from our order book also. But due to various regions the production, sale and profitability in Q1 remained bit softer. Couple of reasons includes like and you would have seen it in our peer group companies also there remains cash flow issue with the customers primarily with the EPC contractors who are normally funded by the multi data agencies or the authorities of all and this impacted the offtake and the sales specifically in the water sector and you know like 60% of the business of the company is on the water sector.
So this sector is significantly dependent on the funding and support from the various authorities. So there remains a gap in the requirement funds and disbursements which has impacted the entire value and supply chain especially for the water sector which include ductile and helical pipes. Secondly, in last several months we witnessed military conflicts and other geopolitical issues in MENA regions, Red Sea, Persian Gulf and other nearby area. And India also saw limited military conflicts with its neighbor. These further aggravated the matter where some of the export shipment was forced to differ to Q2 from Q1. So we were basically about to ship some material for export but it had to be deferred.
And good to know like this has already been shipped in July and so it is deferment of the sale from Q1 to Q2 practically. Thirdly, the company took scheduled maintenance in one of the two blast furnaces in Bundra. So you know, like we have got two blast furnaces or ductile iron pipes in Mundra, Gujarat and one blast furnace is in South India which was the Prana Astroid. So one of the blast furnaces, these are regular events and the maintenance. So one of the blast furnace was under the scheduled maintenance. So it remained there for two months in Q1.
It still continues till now. We expect that it can be put to operation in August if not beyond that. And of course to that extent some of the production loss has happened which is a normal feature. It’s not like it is first time. It’s a normal feature. Every year one of the blast pundits takes some scheduled maintenance and broadly anything around 40 to 50,000 ton of production got impacted for that. For the ductile pipe and Pigall. Similarly, our talent plant which is in Dhilwara, Rajasthan, which has a capacity of close to 1.65 million tonnes. So this plant was also under scheduled maintenance for more than a month, let’s say a month in Q1.
Broadly you can say, let’s say we would have lost close to 120 to 130,000 ton of pallet for that. But these are the scheduled things of course and this happens every year, maybe once in two years. These are the major factors which resulted in comparatively lower production and to some extent lower sale. Also due to all these reasons, our working capital borrowings have also eased up in this quarter. If you compare with the previous quarter, the working capital borrowing have gone up whereas the term loans have gone down. We have prepaid the term loan which we took for acquisition of Sapana facilities.
So in the first quarter the entire term loan has been prepaid. Now we are carrying a long term debt of less than 600 crore in our books which include 500 crore rupees of The LIC bonds which are feeble in 20, 28, 29 and 30 so broadly other than that there is hardly any long term debt and we place on record our sincere appreciation to our banks to reinforce their faith in the company and business model. We have sufficient working capital lines to manage our operations efficiently and even we can get it to a higher turnover with the existing working capital facilities.
However, you may notice that we despite a lower profitability, we have still recorded ebitda of approximately 16% plus which is still better than what we were reporting two or three years ago. Eventually we were used to being the bracket of 12, 13%. Of course last two years were very good, but we are still. It’s not like despite all these things and despite lower raw material, lower realization, we still reported 16% plus EBITDA. So the geopolitical situation and the release of funds by authorities still remain challenging. We expect the situation to improve the interactions that are happening by the industry with the authorities.
If the situation can improve, we expect that it should improve and that’s it. But yes, pending that it is difficult to predict and provide a very clear outlook that what is likely to happen in the short to medium to long term time. But we believe that we have robust order book. We had one of the best order books in last couple of quarters. We are geared up after this the blast furnace would become operational. We believe we can ramp up very quickly but yet it will depend on how the funding support is provided. But the outlook.
We believe that the outlook maybe in very very short term could continue what it was in Q1. But beyond that the outlook looks much better considering that government can come and start disposing the funds. We have provided details of our order book in our notes and we have orders in hand plus the Lois what we have received we have order book of approximately $1.5 billion and above. And in terms of tonnage we have 16 lakh ton of confirmed order and close to 2.65,000 metric ton of the LOIs which are for ductile domestic market. In case of ductile we normally don’t export from India.
We primarily do export from. We primarily sell in the international market to our Abu Dhabi facility. The overall long term debt position as we mentioned remain very comfortable as we have prepared. The long term debt and the only debt remain in the book is of primary remains with the LIC bonds. Working capital utilization is subject to working capital cycle business environment. We hope to see improvement there as well. We believe that once the inventories are getting out of the books, there will be Collections and there will be there are receivers which are yet to be collected.
We believe that in a couple of months the working capital utilization level will come to more acceptable level and it would overall debt will come down. We also consider that these events as exceptions and thus they are being dealt exceptionally without impacting the relationship at any level with the customers, with the authorities, with the inventors and all. Further now let’s move to UAE operations where we have ductile iron pipe operations. We have done well in UAE as compared to previous periods. We have recorded sale of approximately $60 million with comparatively better profitability. Now since the corporate taxes have been implemented and dedicated to uae, these operations and consolidated results reflect the same as that.
You would have seen that the impact of the taxation in UAE. In UAE we have order book of close to $270 million which is also higher as compared to the previous couple of quarters. So we are practically booked for next one year in UAE and we still are receiving more orders in that market. Company has also. Company also has marginal operations in us. It’s not a big facility. They are doing coating, double jointing and few job work. But the Q1 for us was also completely better than compared to previous years. It reported better profitability as well.
Now moving to Jindal ITF the legal conflict what we have in ntpc there is nothing much to report as compared to what we reported earlier. The matter come to the double bench in Delhi High court twice. But the court has deferred the same to another date which is now scheduled on 25th of September. We will see like we want that the argument should start at least. And once the argument starts, it should not take much time because the matter has already been heard by the single bench code. But we are waiting for the arguments to come in.
In June 2025, the board approved three new projects in GCC and Mena region. You are aware that majority of India pipes are exported to GCC MENA region in partial Gulf region including uae, Saudi, Iraq and other countries. These nations are now looking for economic diversification to reduce their dependence on oil on the long term basis. Thus, in long term they want to see the manufacturing sector growing locally and to remain competitive. We present on these markets one has to work proactively and align as per their vision statement. Vision statements of these countries. As Jindal Squad is already a meaningful supplier to these regions and also local BI pipe manufacturer in Dabu Dhabi, we thought it fit to expand our operations in these horizons suitably.
Hence the announcement to set up a seamless pipe manufacturing plant in Abu Dhabi, a helical pipe plant and a Di5 facility in Saudi was made and we also had a follow up conference call to provide overview of these facilities. We mentioned that these projects would take two to three years time. Seeing that might take three years time, helical might take two years time ductile maybe take another one and one half year time. So this will take gradually these will come in operations and as and when these will come in operation they will get consolidated and the financials would get reflected and we would as and when there is any meaningful progress we’ll keep updating to the investors on subsequent conference calls.
But as of now we are in the process of doing the basic work groundwork incorporating the company. So nothing much concrete has been done. But we are in the process of setting up the company, we are in the process of let’s say doing the basic corporate processes. So we provided brief about this project in the last call and we’ll be happy to let the answer of these things now I’m not discussing the results very specifically because we communicated we want that to let them make it more interactive to attend more of questions. So I leave the floor open for the questions and ANSWERS.
My colleague Mr. Narendra Manpri and Rajiv Goel are also here happy to address any of the question for all. Thank you very much.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use 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 Shailesh Raja from BNK Securities. Please proceed.
Sailesh Raja
Despite the product mix geography, exposure and recent plant shutdowns, we have managed to deliver stronger EBITDA pattern in the pipe division during first quarter. So operationally it is commendable. Congratulations to the team. So I have two key questions to ask. First question, over the past two years we have achieved over 1.8 million tonnes in pipe volumes which helped us realize significant scale benefits and also the favorable product mix, especially driven by the saw pipe export and strong BAE market, also contributed meaningfully to our improved profitability and return ratios. So given the near term challenges such as this, lower government spends and weakness in the overseas market.
So how do we see volume growth in the current year? What kind of growth that you see in the current year? If there is a growth, what are the levers that will drive the growth within the pipe segment.
Vinay Gupta
Okay, so thanks Anish for asking this question. I think this question will set the. Tone for the rest of the next 45, 50 minutes. So eventually you have already answered half of the question for me. So we don’t see if you have seen the order book of the company. And as we mentioned we have very robust order book at this point of time which reflects like the scenario remains supportive that what we can do so effectively. We have close to, let’s say June 25, we have announced 1560,000 ton of orders which includes a order, a single order, this is from Mena region for job work that is close to 4 lakh ton.
I don’t know if it’s good or bad but the revenue would be limited to the extent of the job work. But the percentage profit will be higher because we don’t have the raw material to our account. So I don’t think that we have. And on the top of that we have two 65,000 ton of LOI for the tile. Now why we don’t include this into the regular order book? It’s a process of the company. It’s not like we don’t have the order. It’s basically this was received at the fag end and as per the now the systems of the company, unless these orders are let’s say converted into sale order and enter into seg, we don’t consider the sale order.
But if you include this two 65,000 ton, we have order book in excess of 18 lakh ton or maybe close to let’s say 19 lakh tonight including job work and all put together. Okay now so one part of your question is that what is the visibility in terms of volume? The visibility is very strong in terms of volume we have, I mean 1/4 has become history. We have nine months or let’s say 3/4 to perform. So in the normal environment we should perform better than what we have done in the last quarters. Right? There are two things.
The performance of the company is benchmarked with the number. Number start from the turnover. The turnover is a function of the volume, volume and the value. Now volume we are, we don’t have any issue in terms of the value. You would have seen the moderation in the raw material prices in last I think three to four quarters. The prices of the coal, the prices of the steel, the prices of iron ore, all raw material prices have moderated to a reasonable level, which is a good sign. But eventually that leads to lower in time to come that will lead to the lower top line also.
So if we consider whether the company can perform and deliver better than what we have done in the first quarter or maybe in the last quarter, I think yes, in the ninth quarter, in the nine months or three quarters, proportionality value is likely to be lower backed by the lower realization profitability.
Sailesh Raja
Looking for volume growth.
Vinay Gupta
Yeah, volume growth is there. But the caveat is as you started your question, the caveat is because we don’t want to sell if you don’t collect. So right now, if let’s say the situation of the cash flow starts, it becomes smooth, we have some inventory, we have the production capability, we can roll out very fast. And in fact EPC contractors are also holding back. The rollout across the country can happen very fast. Having said that, it is purely the water sector which is getting impacted because of this. But if you talk about exports, if you talk about let’s say to some extent the seamless, that doesn’t get impacted because of the, let’s say the funding by the multilateral or the government agency that remained broadly on course and we believe that we can do better than what we had done earlier in those segments.
Sailesh Raja
Okay. Okay, great. Sir, my second question. If you see standalone Pinwas and Di Pipe Company we have reported some new performance in MQ yet we have posted 10B EBITDA of 671 crores despite a 2 months of shutdown in BI plant and 1 month shutdown at the pellet facility. So what were the key drivers of this robust performance? Was it largely led by power segment? And also I wanted to know, last year we reported crap and export incentive value of around 700 crores. So how much we have reported in 1Q.
Vinay Gupta
No, I have not understood your question properly. Can you please repeat the question?
Sailesh Raja
Standalone companies. Yeah. So standalone teamwork and DI type companies they have reported weak set of numbers. In one June we have posted.
Vinay Gupta
Yeah.Okay. [indiscernible] of the company?
Sailesh Raja
Yeah, yeah, yeah. So we have posted 671 crores including two months of shutdown in BA and one month of shutdown in SA. So what was driving this 671 crores of EBITDA? Was it largely led by SAW segment.
Vinay Gupta
Okay, so okay eventually yes. So this would be in our case it is a combination of all the products. It is very difficult to say like whether it is because of saw or it is because of one or other. Of course the tiles as you we have given the information. The tide we did in the first quarter, we did close to 133,000 tonight and seamless we have done close to 55,000 tonnes. But overall the tonnage is lower so 8 seconds. So overall the pennies is lower but as compared to the Q1 of last year or we say Q4 in the last year the tennis in all the segments are lower except that the seamless is let’s say as against 60 we are 65 which is broadly.
Okay.
Sailesh Raja
My question is how what Was driving the 671 growth of EBITDA? I see it being same whatever the industry reported EBITDA in CS and BI5.
Vinay Gupta
So the EBITDA for standalone is 560. Okay. And EBITDA for console is 688. So 671. That’s why I was getting this confused. So we don’t have much of other income which is included in this but in the standalone for 30 June 25th of a big time 560 crore. Okay sir, but console we have 688.
Sailesh Raja
Yeah, yeah. If I do that calculation it is coming and getting very high. Do you think it will be sustainable?
Vinay Gupta
No, we don’t calculate that way. Okay, I appreciate what you’re asking. See internally we know but we don’t calculate for the others for that way that what is the EBITDA percent for each of the individual products. So we consider pipe as a pipe all put together of course I appreciate what you’re saying. You’re trying to benchmark my seamless with Mahara finesse, my ductile with electroseed ductile with let’s say Mann or Wellspun. So somehow this is a practice of the company which we adopted for accounts and for let’s say for everybody that we do not distinguish between the product and we can consider pipe as a pipe. So you have to do that by dispatching separately on memorandum basis
Sailesh Raja
What was the scrap export incentive value for this quarter.
Vinay Gupta
I don’t have this number right now but I don’t think that we have anything any major amount in this.
Sailesh Raja
Okay. Okay. Last year it was 100 crores. Yeah. So there is no doubt our valuation remains highly attractive. However major overseas project, it is expected to contribute immediately only after 23 years. What are the internal drivers that will support EBITDA growth in the intermediate period?
Vinay Gupta
Okay, so basically you’re asking what is on the outlook of let’s the profitability and the performance of the company. Okay, this is a question. So number one like we can, we can give a very helicopter level kind of outlook because we normally don’t give the guidance that what we follow very Consistently and. But in terms of outlook, our outlook, whether it is us or any of the pipe company, the outlook of any pipe company is judged from the order book. That’s number one. Number two, we mentioned in our note that we are consistently doing efforts in terms of valuation.
In terms of cost optimization, we have taken initiatives in the past one or two years time and we are doing additional initiatives which is a continuous process which is likely to reduce the cost and reduction in the cost will where the profitability will. For example, we have implemented and we have replaced one of our Coke Owen battery in Mundra where we are installing the wasted waste power plant. Now that would contribute to let’s say the lower cost of the Coke and lower power cost. So these are the initiatives which will help in terms of improvement in the profitability.
Right now we are not working on changing or increasing the capacity by organic or inorganic. Whatever inorganic we had to do, we have done by way of acquisition. We are not in the process as of now for any additional capacity, specifically in the pipes in India, of course, offshore we have already made formal announcements. So if the environment reports remain supportive, you will see growth.
Sailesh Raja
Okay, sir. Thank you sir. All the best.
Vinay Gupta
Thank you very much.
operator
Thank you. The next question is from the line of Darshul Saveri from Crown Capital. Please proceed.
Darshil Jhaveri
Hello sir. Good evening. Thank you so much for taking my question. Firstly, congratulations on delivering a good set of profitability, sir. So just wanted to ask about the shutdown, sir. So I think when we mentioned that a blast furnace is in a shutdown for the last for two months and I think even two months in Q2 was it similarly shut down in FY25? So.
Vinay Gupta
FY sorry.
Darshil Jhaveri
Last year was it shut down?
Vinay Gupta
Okay. Okay. So I tried to cover that portion in my prepaid. See we have got three blast furnace across countries in India. Two blast furnace in Gujarat, one blast furnace in Andhra. So it’s a regular process this time. The normal maintenance and normal shutdowns always remain on rotation basis in one or other in other large partners. But there are major shutdowns because you have to do complete overhauling. So this time it is a bit longer which took two months in the Q1 and it is continuing in Q2 also and which might at any point of time they can start firing, they can test that it works.
But to answer your question, some of the blast furnace would have remained under shutdown in last year also may not be for three or three and a half months. But these are normal things in these kind of businesses.
Darshil Jhaveri
Yeah, so I was Coming to that point only like if it’s normal. So the production volume would have impacted last year also. So in the current year, like when we say we’ve lost around 40k ton of production and we might lose a similar amount in this quarter. So is how much of that would be incremental as compared to previous years? And could you quantify in terms of, you know, rupee value, how much loss would that be, sir?
Vinay Gupta
Okay, so there is a loss number one, it’s a loss opportunity. Yeah, correct. So one, that it is, it is. And when you make the plan, you count those things because they are not suddenly, doesn’t happen suddenly. So eventually, last year we sold close to six 80,000 ton of ductile pipe. Okay. When we talk about our capacities, theoretically we have capacity of close to seven to seven and half lakh ton in India. But it doesn’t mean that by doing fine tuning, by doing improvements, you cannot produce more. That is number one, number two, we sold six 80,000 ton of the tile pile last year.
But on the top of that we sold pig iron of close to 22,000 tonnes. So from that perspective you can see that we actually sold hot metal of more than 7 lakh ton last year, which is theoretically it is more than 100%. So effectually, if we are not able to produce 40,000 tonnes in Q1 or we are not producing 20, 25,000 in Q2, these the overall, let’s say projected numbers for the year, normally consider all those things. And secondly, you always have 13 quantities in your inventory. So can we to answer, I can answer your question in a different way.
If the environment remains supportive in all respects, can we match or improvise our performance of the tile pipe as we did last year? I think yes. So last year we sold 680. Despite that we have done only 1 lakh 33 thousand ton in Q1. We can still reach to that level. We remain optimistic for that. For that we need to be supportive by the environment.
Darshil Jhaveri
Okay, okay, fair, fair enough. That helps me a lot, sir. And so when you were saying that, you know, some because of the, you know, prices in iron and IR realizations have, you know, come, come down a bit. So any kind of color, like how do you see that going forward in the year? Do we think it will remain stable or you know, how do we see that portion happening, sir?
Vinay Gupta
Difficult to predict because the way the global markets are reacting, I mean even the raw material suppliers are unable to predict those scenarios. The best case scenario could be, let’s presume what is happening remains agitive. So instead of let’s say taking a call that it will go down, it will go up, we can presume that if what happens if the raw material price remains where it is today? See we are not very big buyer for any of these commodities. I mean in totality we don’t sell more than 2 million tonnes and which includes iron ore, coal, esteem and everything which includes import, which includes domestic also.
But as you know your day would have been started every day that what Trump has said yesterday. Okay so the best case base case scenario is presume that what is the price today remains as it is and how to let them make your strategy around that and you have to counter what you have to make strategy with the changing environment.
Darshil Jhaveri
Correct? Correct. Correct. Fair enough sir. And so just wanted to know like in terms of our new capex that we’ve announced we were I think going to budget our payback period and a peak revenue. So any kind of comment on that sir? What could we expect from those three new capacities?
Vinay Gupta
Sir, the new rational why we are setting up the new capacities in foreign soil at the foreign soil as I mentioned in my preface that it is important to diversify your geographical profile and what India is doing India first. What America is doing America first. So eventually all these oil producing countries are also trying to reduce their dependence on the oil in the long term. Now whether you have those markets or you want to lose those markets we are the first in country, among the first if I’m not the first who are already presenting Middle east the MENA region Bygoka manufacturing facility as well as doing majority of our export from India to the Middle East MENA region and Pershingal.
Now while it’s a very important thing that whenever you are projecting any new capital expenditure or capacity or any business that you consider like what is the payback, what is the IRR and all the profitability on current basis are likely to be better than the profitability what we are having in India. So they would be very, very. If everything remains supportive they are likely to be very. They are likely to be much better as we have in India in all the three products.
Darshil Jhaveri
Okay, okay. But any kind of like peak revenue or payback could be, you know just.
Vinay Gupta
I know we have just not broken the ground. We don’t, we have, we have just started working. It’s too early to say because to project that what the revenue would be clear down the line. We don’t know what the raw material price and other things will be there in that point of Time, it’s too early. We are, we are difficult to predict what going to the raw material price are going to happen next year in India.
Darshil Jhaveri
Okay, fair enough, sir. And just if I can this last question for my answer. So like what I get source is that Indian? Because of the segment, it is a bit slowing right now. So our, you know, current units can maybe export more. But once our, you know, export oriented like our units in the new geography start come up, what is the thing that we are thinking of? Cannibalization or how do we see that process? Because if our current facilities have enough capacity, even though we are getting up with new major capacities. So do we see that? You know, we might be in a situation where we have a lot of supply in hand, but the demand constraints can come up in the market.
How do we look at that? Hello? Hello.
operator
Ladies and gentlemen, seems that the management line has been disconnected. Please wait to finally reconnect them. Ladies and gentlemen, we have the management on the line connected. Yes, sir, you can proceed.
Darshil Jhaveri
Hello? Hello? Hopefully I’m audible, sir. Hello? Hello? Hello, operator? Ma’, am, is the management on the line? I can’t.
operator
Yes, hello. So can you hear that?
Darshil Jhaveri
Yeah, I can hear you. Okay, okay, okay, okay. Yeah, thank you. Thank you so much, sir. Yeah, yeah, yeah, yeah, yeah. So just wanted to ask like because of so much capacities that we are, you know, getting, setting up in the UAE and Saudi Arabia and our existing domestic, you know, we also export to those countries. So what do you feel about cannibalization? I just am concerned we should not be in a situation where there is oversupply available to us and there is demand constraints. So what would you like to.
Vinay Gupta
It’s a valid question. So eventually from India we are supplying primarily to, let’s say Middle east and Persian Gulf. In the Persian Gulf we are supplying to Iraq and we are not setting any capacity in Iraq at this point of time. And we have no intention to do something in Iraq at this point of time. So as you know, like as we explained, we are setting up seamless pipe plant in UAE Abu Dhabi. Majority of that capacity when it will come into production will be for the UAE and nearby markets. As of now, there is no seamless pipe production with takes place in uae.
At best there is this one plant in Saudi, but it scatters to primary. Saudi and Saudi can absorb more, otherwise they are import. So they are fully import substitution. Secondly, from India we do not export meaningfully. We don’t export seamless pipe meaningfully to Middle East. Right. So we don’t See, we don’t foresee a glut in the domestic, in the UAE market or nearby markets because of seamless. That’s one number two about the. Let’s say helical pipe plant. Helical pipe plant would be able to cater to the oil, gas and water sector in Saudi primarily to start with.
Good thing is that we are, our local joint venture partner is a significant EPC contractor and there is a huge amount of demand in and around Saudi. Eventually as of now Saudi is producing locally and importing. Saudi’s government is focused that import should be allowed only when domestic capacities are fully utilized. So it is important that if somebody wants to have a leg in Saudi, he should be present in Saudi. And the Saudi investment is not a very significant, not a very big investment. By having this facility in Saudi which could be set up in less than 1.5 to 2 years time broadly one can catch up the growing Saudi economy very efficiently.
So we don’t think that this will impact our Indian operations. We believe that this diversification will help us in terms of improving our consolidated financials in a meaningful way.
Darshil Jhaveri
Okay. Okay. Fair enough sir. All the rest of that’s it for my. Thank you so much.
Vinay Gupta
Thank you.
operator
Thank you. The next question is from the line of Gaurav Shah from Harshad Gandhi Securities. Please proceed.
Gaurav Shah
Yeah, thanks for helping me sir. So I have a couple of question. Firstly on the business outlook. Sir, can you just provide some more color on the general Jiva mission? Currently.
Vinay Gupta
First question is that mission has. Yeah. Okay. So as you know Zandivan mission has already been extended by the government to 2028 in this phase. I believe that they would keep extending it beyond that as well because the. The targets have yet not been met so. And secondly because of constructions happening, colonization happening, this will happen. And this is only gel given mission which is Nalse Jal There could be second phase which is let’s say connecting the industrial water or river water and all. So leaving aside that number two the allocation on account of Janjivan mission which is already there AMroute2 scheme is also there.
So there is enough as far as the water sector in India is concerned. These are the issues what we are discussing what we have discussed today or what you would have heard from the other calls of the pipe company in India. I believe that they are short term issues. They would be taken care of in some time.
Gaurav Shah
Okay, so do you expect this quarter also there should be slowdown in the order and from next quarter onwards we should see some.
Vinay Gupta
Okay orders is not to see that we have huge amount of order book which is huge means like it is a order book which is better than the last 2, 3/4. So order book is not an issue. There are plenty of order which are there which somebody wants they can take. The third important thing is as I mentioned that the execution on the ground has slowed down because we are not EPC contractors. We supply to epc, we don’t supply directly to the government. That’s a model globally. So EPC contractors, when their payments have been slowed down they are not doing full job on the ground.
So presume that the cash flow becomes normal. You see significant uptick on the physical activity on ground and similarly the value the supply chain, let’s say the pipe supplier, they would start supplying the pipes to them. So today we do not want to expose ourselves to the open credit and that is where the situation is. But we understand that the chambers and the industry is meeting and representing to the government for doing the needful.
Gaurav Shah
Okay, okay, thanks. My second question is on the debt management. It seems that in this particular quarter we have reduced the long term debt and increase the working capital loan. So how much interest saving is expected from this particular exercise?
Vinay Gupta
Saving means?
Gaurav Shah
saving on interest because we’ve reduced the long term debt and increase the working capital.
Vinay Gupta
There are two different long term debt reduction is like we had the cash and we want to prepay the cash so that the long term debt we have the space for the further in the long term debt. So we now have accepted small, less than 100 crore rupees of small, small long term debt where the cost will be higher for prepayment we only have a NCD of 500 crore rupees from the LIC which is repeatable in 2829 and 2829 30. Now in the working capital the working capital intensity has gone up a bit primarily on account of slow collection, slow realization and we expect the situation to improve.
But on the top of that the interest, our weighted average interest cost has gone down. My weighted average interest cost has gone down by almost 50 basis point in this quarter. So and despite that even if let’s say there is no cut by rbi we expect the interest cost to remain in the in a normal average control level. This quarter my finance cost is in the vicinity of 80 crore plus minus. We expect that it will be. It will be same or we can improvise it further.
Gaurav Shah
Okay, and so my last question is on oil India sector. So do we by any chance do we supply to ONDC in oil India, are we active in the oil sector?
Vinay Gupta
So they are. They are our customers.
Gaurav Shah
Okay. So do you see any increase allocation to oil and gas sector from the government? Because we are from other players, we are seeing this. There are lots of demand from the. Oil and gas sector right now.
Vinay Gupta
We are not the largest in seamless, but we are a meaningful player. And the demand, whatever the orders come, they get allocated almost to everybody. So we would get our pro at a share. We already have all these people in our order book.
Gaurav Shah
Okay. Thanks a lot, sir. And all the best.
Vinay Gupta
Okay, thank you.
operator
Thank you. The last question, the next question is from the line of Deepak Lalwani from Unifi Capital. Please proceed.
Deepak Lalwani
Hello sir. Thank you for the opportunity. So first question. How much is the impact. How much is the impact of the export order in this quarter? How much was export in terms of volumes?
Vinay Gupta
You’re asking what is the volume for exporting this quarter?
Deepak Lalwani
Yeah, the volume that got deferred you mentioned about.
Vinay Gupta
So it is. It is approximately 20,000 ton. One. One shipment.
Deepak Lalwani
Understood, sir. Second question is on the environment in general. You mentioned that you know, the funding issue still continues but you expect it to get better. So any. Any color on that as to what gives you the confidence that it is going to get better and by when. But if it not. If it doesn’t get better. Yeah.
Vinay Gupta
Basically. Okay, to answer this question then we can take another question. Sorry to interrupt you. So basically, you know like this issue for cash support on that allocation is going on for last three to four quarters. Initially it was the general elections which is Achar Sahita continued by the elections in the states. Then after that, I mean we also read the Google the audits and all those things. But there is a huge backlog and the industry is not talking to the respective governments and government representatives about the implementation of these projects where government has a specific focus.
So we understand that there are discussions at the. Within the government circle at serious level. How much it will mature, nobody knows. But there is a. There is a government understand that a lot of support is required at this point of time.
Deepak Lalwani
Okay, understood, Understood. But sir, if the situation still. My second question was the situation stays in the same same run rate. Then what this quarterly volumes of 3.3.4 lakh tons. I mean I’m including the export order which got deferred. So the quarterly run rate of 3.4, should it. Should it be maintained or is there any risk on this execution as well?
Vinay Gupta
Okay. So Deepak. Deepak. Correct. Okay.
Deepak Lalwani
Yes.
Vinay Gupta
So Deepak, if you see the quarter 4, 20, 25. Like last year before, the problem was still there with this 4 lakh 35 thousand ton in pipes and 4 lakhs on the pellet. So this year, this quarter, this quarter we can attribute let’s say 60,000 ton on account of deferment of one shipment of export and two months of ductile operations. So that is 60,000 tons. So if I add 60,000 ton to three, 25,000 ton and some of the. We expect that some of my sales should improve. In case of El Saw Esso and seamless, I think we can go back to easily to the Q4 which is 4 35,000 ton.
So that would be a normal, let’s say quarter. Despite the teething issues, what the water sector is facing today.
Deepak Lalwani
Okay, perfect. Understood sir. Second, the next question is that in the following raw material scenario, coking coal and iron prices, do we expect to pass on this benefit because the environment is on the lower side today? Do we expect to pass on this benefit in terms of lower pricing orders for the new orders in the ductile iron side segment?
Vinay Gupta
Okay, so typically how the business is done that whatever new bidding will be done that will be based on the current raw metal prices and it’s a competitive market, there are half a dozen DI producers. Okay, so if you can, if I can, let’s say if I believe that I will consider $250 of cooking coal, I will be outbid. But what happens that we have orders in our order book which are, which was perhaps bid when the prices were higher. So this is, this becomes a average pricing scenario, average profitability scenario on a year basis.
And this happens every year. It is difficult to say that the raw material prices will remain the same for 12 months. We have seen volatility in 2020-23 when the coking coal was $500, iron ore was $250. All these things we have seen and despite that the prices were going up and down. So new orders will be based on current raw metal prices. But similarly in case of Helicolor, let’s say teal bite. In case of steel pipe, on the existing order there will be no change in pipe price. There will be no change in the steel price.
So the existing order books will not get impacted because of the raw material prices whether the raw material prices go up or go down. But in case of new orders it will be based on the current prices.
Deepak Lalwani
What I meant to ask was that are we discounting more than required to get new orders because we are having. A raw Material
Vinay Gupta
Because we are good for. Not necessarily. If you seek my. If you see my order book, we are practically booked for next three quarters. And in case of ductile now we are booked for almost one year. So I would rather do. I would. I mean eventually nobody wants to lose order. We have to see that we should have the production capability also in the. At the time when the customer need. But typically we would like to pick and choose. Hello.
operator
Thank you. Yes, sir.
Vinay Gupta
Deepak.
operator
Yes, I get it. Okay, thank you. The next question is from the line of Gargi Singh from Value Invest. Please proceed.
Gargi Singh
Hello sir. Am I audible?
Vinay Gupta
Yeah, yeah. Great. Please go. Dari.
Gargi Singh
Yes, sir. Thank you for the opportunity. So my first question is that we understand that most of our orders are backed by letter of projects and bank guarantees. So despite this delay in payment releases seems to be impacting our execution timeline. So for secured orders, how exactly does the delay in payment translate into lower execution levels?
Vinay Gupta
So Gargi, it doesn’t happen that you get the NC or bank guarantee for the entire value of the order at the time of signing the order. So what happens for example, if you have received a order hypothetically as an example, let’s say 100 crore. Okay. So there will be schedule of delivery and schedule of dispatches. So. So there would be a gradual cover of LC or bank guarantee which will be given by the customer. And accordingly we plan the production accordingly with sell. So at the time of dispatch we should have the credit instrument. And based on the track record of the customer and our relationship in the last 10, 15 years, whatever.
Sometime we go beyond that also. But not like we learned keep doing everything. So to answer your question precisely if we have order book of let’s say 16 lectern or 18 lectern or $1.5 billion. We don’t have LC Bank NT for $1.5 billion. We might have even for export we would have coverage by way of the lc. For domestic market we would have coverage by way of LC of bank guarantee. But for the near time production. So as and when LC and bank guarantee come, we include that portion into the production planning. And this is how it is done.
So if we. Let’s say tomorrow, if the customer is out of LC bankrupty lines, especially for the water sector. And that’s where the production we will reduce the production. And we would only produce for those who are providing us LC bank guarantee or the advanced cash.
Gargi Singh
Okay, so currently on the. On the basis of current order book, is it fair to assume that you have LCBG for three months of at least for the next one quarter.
Vinay Gupta
No, this is a See the business is done on the going concern basis. It’s not. It may or may not be possible that I would have the LC bank guarantee for the next three months also. So that is the role of the. That is the role of the business development and the marketing department to let it arrange the LC bank guarantees and then we produce we or let the company make the production plan based on the feedback of the of the marketing that this much of dispatch will happen and they will bring the NCO bank guarantee before the dispatch.
So this is an ongoing process. This is despite in this scenario testing scenario we still keep getting the LC bank guarantees all the different kind of comforts. So we are whenever replying to Deepak that we can come back to the normal normalized quarter of let’s say 4 lakh plus ton what we did. Q4 we know that this much of rotation of the LC bank guarantees remain in the system and we should be able to do that.
operator
Thank you. Due to time constraints. That was the last question. I now hand the conference over to the management for the closing comments. Over to you sir.
Vinay Gupta
Yes. I place on record our appreciation to all the participants to the call ICIC securities and Korus and hope to see you in the next conference call. Thank you very much. From me my colleague Mr. Narendra Manti and Rajiv Goel. Thank you very much.
Narendra Mantri
Thank you.
operator
Thank you. On behalf of ICICI securities limited that concludes this conference. Thank you for joining us and you may not disconnect your lines.