Core Business EBITDA (including Other Income): ₹210.5 Cr, up 64.2% YoY
Operational and Strategic Updates
Core Business Performance:
The company completed a significant part of its growth CAPEX cycle with full operationalization of the Anjar pipe fabrication facility and commissioning of the seamless pipe plant.
Core business (piping, heavy fabrication) showed strong performance, generating the most value and margin.
The business was separated into core and non-core segments, with results reflecting in operating performance.
Non-Core Power Segment:
Malwa Power tariff revised to ₹5.22/KwH from ₹3.5/KwH, with retrospective recovery of approximately ₹5.52 Cr.
Commissioned biomass pallet facility to offset cash burn and stabilize segment profitability.
Combined revenue from power and biomass pallet expected to be ₹47.71 Cr in FY27.
Pursuing Appellate appeal for further tariff optimization along with restructuring initiatives.
Order Book and Visibility:
Order book stands at ₹2,040 Cr (later corrected to ₹1,940 Cr during Q&A), providing strong multi-year revenue visibility.
Execution weighted towards piping and fitting and heavy fabrication segments.
Demand visibility across core end markets (power, oil & gas, process industries) remains healthy in India and overseas.
Capacity Utilization and CAPEX:
Expect optimal utilization of Anjar fabrication facility in FY27.
Seamless plant expected to ramp up to 60-70% utilization in FY27.
Major CAPEX cycle complete; expect better asset turns, stronger cash generation, and improved return ratios.
FY27 CAPEX guidance: ₹20-30 Cr for balance previous year commitments, with potential additional CAPEX for nuclear sector opportunities under consideration.
Management Guidance and Outlook
FY27 Expectations:
Revenue: Conservative target of ₹1,500 Cr (management indicated potential to exceed this)
Consolidated EBITDA Margin: Above 19%
Order Inflows: Expected to exceed ₹2,000 Cr
Segment Mix: 65-70% revenue from power sector; 60% domestic, 40% export orders
Working Capital:
Targeting reduction in inventory days by 15-20 days in FY27
Debtor days expected to remain at 95-100 days
Payable days target: 70-75 days (from current 42 days)
Total working capital cycle target: 200 days in FY27 (later clarified as 180 days target)
Segment-wise Details
Power Sector:
Expected to contribute 65-70% of FY27 revenue
Current power sector order book: Over ₹1,000 Cr (approximately ₹1,200 Cr)
Domestic thermal power piping erection expected to peak in FY27-28
HRSG orders from overseas customers showing strong traction
Thailand Operations:
Secured multi-year capacity reservation agreement with Nooter Eriksen for 60% of Thailand facility capacity (14,500 tons annually)
Expected revenue: ₹150 Cr annually from this agreement
Primarily job work basis with high EBITDA margins (above 20%)
No significant CAPEX required for execution
Seamless Pipe Plant:
Backward integration strengthens capabilities in high-spec applications
Improves supply security, supports margins, and reduces lead times
Margin expectation: ~20% when selling independently
Preference for in-house consumption to capture purchase margin
Raw Material Availability
Established supply chain for alloy steels (P-91, P-92) primarily from India through seamless plant
Reduced dependence on imports from China or Europe
Several approvals received and more expected shortly for power sector jobs
Future Opportunities
Nuclear sector: Considering capacity expansion to capture emerging opportunities
Middle East reconstruction: Potential opportunity post-conflict assessment, may involve CAPEX
Fertilizer sector: Active discussions with export customers for fertilizer units
Data center piping: Active inquiries for metallic piping in data center applications
Debt and Capital Structure
Improving cash flows and operating performance expected to support gradual debt reduction
Equity raise consideration: On drawing board for strategy decision, nothing immediately decided
Auditor Qualification
Expect clean audit opinion by Q3 FY27 for Malwa Power impairment issue
No financial contingency planned as revised tariffs expected to make plants slightly positive
