Q1 2027 Maharashtra Seamless Ltd Earnings Call

August 8, 2026

Speaker #1: Good evening, ladies and gentlemen. You have been connected for Maharashtra Seamless Limited's conference call. Please stay connected; the call will begin shortly. Ladies and gentlemen, you have been connected for the Maharashtra Seamless Limited conference call.

Operator 2: Ladies and gentlemen, you have been connected for Maharashtra Seamless Limited conference call. Please stay connected. The call will begin shortly. Ladies and gentlemen, you have been connected for Maharashtra Seamless Limited conference call. Please stay connected. The call will begin shortly. Ladies and gentlemen, good day and welcome to the Maharashtra Seamless Limited Q1 FY27 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Vikas Singh from ICICI Securities Limited. Thank you and over to you, sir.

Speaker #1: Please stay connected; the call will begin shortly. Ladies and gentlemen, good day and welcome to the Maharashtra Seamless Limited Q1 FY27 earnings conference call.

Operator: Ladies and gentlemen, good day and welcome to the Maharashtra Seamless Limited Q1 FY27 earnings conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions at the end of today's presentation. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Vikas Singh from ICICI Securities Limited. Thank you and over to you, sir.

Speaker #1: Hosted by ICICI Securities Limited. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions at the end of today's presentation.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchscreen phone. Please note that this conference is being recorded.

Speaker #1: I would now like to hand the conference over to Mr. Vikas Singh from ICICI Securities Limited. Thank you, and over to you, sir.

Speaker #2: Good morning, everyone. Welcome to the Maharashtra Seamless Ltd. Q1 FY27 conference call.

Vikas Singh: Good morning, everyone. Welcome to Maharashtra Seamless Q1 FY27 conference call. A very warm welcome to all and.

Speaker #3: As you all, welcome to our...

Speaker #1: Oh, sorry to interrupt you, Vikas; your voice is peaking.

Operator 2: Sorry to interrupt you, Vikas. Your voice is breaking.

Operator: Sorry to interrupt you, Vikas. Your voice is breaking.

Speaker #2: Is it better?

Vikas Singh: Is it better?

Speaker #1: Yes, this is quite better.

Operator 2: Yes, this is quite better.

Operator: Yes, this is quite better.

Speaker #2: Yeah, so from the management, we have with us Mr. Kaushal Bengani, Deputy General Manager, Investor Relations and Finance. Without taking much more time, I'll hand it over to Kaushal for his opening remarks.

Vikas Singh: From the management, we have with us Mr. Kaushal Bengani, Deputy General Manager, Investor Relations and Finance. Without taking any much time, I will hand it over to Kaushal for his opening remarks.

Speaker #3: Thank you, Vikas. Good morning, shareholders, and thank you for joining our earnings call. At the outset, I would like to inform you that one of our independent directors unfortunately passed away a few days ago.

Kaushal Bengani: Thank you, Vikas. Good morning, shareholders, and thank you for joining our earnings call. At the outset, I would like to inform that one of our independent directors unfortunately passed away a few days ago. Mr. Ashok Bhandari was a man with a stellar reputation, and his contributions are immensely appreciated by the company. The company believes that he would have contributed much more, but due to the sudden and sad demise, we are no longer able to benefit from his knowledge and experience. Just wanted to place that on record before commencing this call. The results for Q1 FY27 have been good, and in this quarter we have dispatched 96,000 tons of seamless pipes. Dispatches in this quarter were impacted by disruption in gas supply in April. Otherwise, we would have been able to dispatch around 105,000 or 110,000, which is the usual run rate.

Speaker #3: Mr. Ashok Bhandari was a man with a stellar reputation, and his contributions are immensely appreciated by the company. The company believes that he would have contributed much more, but due to his sudden and sad demise, we are no longer able to benefit from his knowledge and experience.

Speaker #3: Just wanted to place that on record before commencing this call. The results for the first quarter of FY27 have been good, and in this quarter we have dispatched 96,000 tons of seamless pipes. Dispatches in this quarter were impacted by disruption in gas supply in April; otherwise, we would have been able to dispatch around 1,05,000 or 1,10,000, which is the usual run rate.

Speaker #3: However, despite lower production, margins were not impacted. The encouraging sign in the current environment is that our order book has improved materially from when it was last reported. The order book currently is at ₹1,709 crore, which is an improvement of 31% from when it was last reported.

Kaushal Bengani: However, despite lower production, margins were not impacted. The encouraging sign in the current environment is that our order book has improved materially from when it was last reported. The order book currently is at INR 1,709 crore, which is an improvement by 31% from when it was last reported. After many quarters, I am pleased to inform that 42% of the total order book are orders from the oil sector, and 20% of the total order book are export orders, primarily to the US and Canada. These two segments specifically are higher margin segments, and we should see the benefits of this order book in the coming quarter. On the treasury front, there is an improvement in other income on a quarterly basis with an amount of INR 175 crore. The previous year average per quarter was around INR 97 crore per quarter.

Speaker #3: After many quarters, I am pleased to inform you that 42% of the total order book consists of orders from the oil sector, and 20% of the total order book are export orders, primarily to the US and Canada.

Speaker #3: These two segments, specifically, are higher-margin segments, and we should see the benefits of this order book in the coming quarter. On the treasury front, there is an improvement in other income on a quarterly basis.

Speaker #3: With an amount of ₹175 crores, the previous year average per quarter was around ₹97 crores per quarter, and this improvement in other income is primarily driven by the improvement in the equity markets, which has been recently seen.

Kaushal Bengani: This improvement in other income is primarily driven by the improvement in the equity markets, which has been recently seen. On reviewing our Q1 FY27 performance versus Q4 FY26, revenue improved by 3% to INR 1,266 crore. EBITDA declined by 23% to INR 184 crore on account of lower production. However, PAT improved by 150% to INR 271 crore on account of better other income. EPS in this quarter was INR 20 per share. A point to note here would be that the immediate performance in the first quarter is not so reflective of the way we perform in the next quarter or the quarter after that, because the revival in the order book and the kind of orders that we have been able to accumulate in the past few months has pleasantly surprised us.

Speaker #3: On reviewing our Q1 FY27 performance versus Q4 FY26, revenue improved by 3% to ₹1,266 crore, while EBITDA declined by 23% to ₹184 crore on account of lower production.

Speaker #3: However, FAT improved by 150% to ₹271 crores on account of better other income. EPS in this quarter was ₹20 per share. A point to note here would be that the immediate performance in the first quarter is not so reflective of the way we'll perform in the next quarter or the quarter after that, because the revival in the order book and the kind of orders we've been able to accumulate in the past few months has pleasantly surprised us. Due to the lower expenditure in the oil and gas sector in the previous few years, we were waiting for a revival, and we believe that the revival is just around the corner, as is indicated by the data which is coming in.

Kaushal Bengani: Due to the lower expenditure in the oil and gas sector in the previous few years, we were waiting for a revival, and we believe that the revival is just around the corner, as is indicated by the data which is coming in. I would now request Vikas to kindly open for questions.

Speaker #3: I would now request Vikas to kindly open the floor for questions.

Speaker #1: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator 2: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Saket Kapoor from Praful Global. Please go ahead.

Operator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself, you may press star 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have our first question from the line of Saket Kapoor from Praful Global. Please go ahead.

Speaker #1: If you wish to remove yourself, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles.

Speaker #1: We have our first question from the line of Sakib Kapoor from Kapoor Co. Please go ahead.

Speaker #2: Yeah. Namaskar, Kaushal bhai. I hope I'm audible.

Saket Kapoor: Yeah. Namaskar Kaushal. I hope I'm audible.

Speaker #3: Yes, I can hear you.

Kaushal Bengani: Yes.

Speaker #2: Yeah, yeah. Thank you, first of all, for the opportunity, and thank you for hosting, because you are hosting the call today also, and thanks to the management.

Saket Kapoor: Yeah. Thank you, first of all, for the opportunity, and thank you, Vikas, for hosting the call today also, and thanks to the management. It is after a gap, we hope for the continuity of call, and I hope all good at your end also. Firstly, Kaushal, if you could just dwell further on the optimism on your opening remarks. How is likelihood the EBITDA margin trajectory or the EBITDA pattern going to shape up on the basis of the closing order book? Also, since you have articulated that mix is also skewed better, if you could just give us some more color, sir, that would suffice.

Speaker #2: It is after a gap, and we hope for the continuity of the call, and I hope all is good at your end also. Firstly, Kaushal ji, if you could just dwell further on the optimism in your opening remarks in terms of how the EBITDA margin trajectory or the EBITDA per ton is going to shape up on the basis of the closing order book, and also, since you have, as a mix, BIB – you articulated care that the mix is also skewed better – so if you could just give us some more color, that would suffice.

Speaker #3: On slide 15, the order book is detailed. In that slide, I've mentioned that ₹714 crores worth of orders are from ONGC and Oil India, which is the oil sector—generally a higher margin segment.

Kaushal Bengani: On slide 15, the order book is detailed. In that slide, I've mentioned that INR 714 crores worth of orders are from ONGC and Oil India, which is the oil sector, which is generally a higher margin segment. In addition to that, 20% of the total order book is from the export segment, which is again, a higher margin segment. Further, these special orders of INR 100 crores of cylinder pipes, which has also been mentioned, is also there. All of these dispatches are likely to take place in Q2 with a little amount being spilled over onto Q3. The point which I was making was that almost 63%, 64% of the total order book comprises higher margin orders, which is a pleasant surprise for everyone because this has not been the case in the past few years.

Speaker #3: In addition to that, 20% of the total order book is from the export segment, which is again a higher margin segment. Further, these special orders of ₹100 crore of cylinder pipes, which have also been mentioned, are there. All of these dispatches are likely to take place in the second quarter, with a small amount being spilled over into the third quarter.

Speaker #3: So, the point which I was making was that almost 63–64% of the total order book comprises higher-margin orders, which is a pleasant surprise for everyone, because this has not been the case in the past few years.

Speaker #2: Sir, just to get some bit on the color on the number part, when we look at our Q1 number with the type of outages because of the gas issues and I think to labor was also a factor, we did an EBITDA per turn of in our guided range of 15,600.

Saket Kapoor: Sir, just to get some bit on the color on the number part. When we look at our Q1 number with the type of outages because of the gas issues, I think the labor was also a factor. We did an EBITDA pattern in our guided range of INR 15,600. Now, taking into account the mix, the export, the high-value added segment, what should be the likelihood of the EBITDA pattern for the coming quarter with the confirmed order book in execution now? If you could just give us some more color. How is volume likely to shape up for the year or for the ensuing two, three quarters, if you could give us some more color, sir.

Speaker #2: And now, taking into account the mix, the exports, and the high value-added segment, what should be the likelihood of the EBITDA per ton for the coming quarter, with the confirmed order book in execution now?

Speaker #2: If you could just give us some more color on how volume is likely to shape up for the year, or for the coming two to three quarters, if you could give us some more color on that as well.

Speaker #3: Specifically on the number, I would not like to comment because it varies depending on the kind of product that we dispatch in a particular quarter.

Kaushal Bengani: Specifically on the number, I would not like to comment because it varies on the kind of products that we dispatch in a particular quarter. What I can say with reasonable confidence is that margin should be maintained, if not improved, in the coming quarters. On the dispatch front, dispatches in Q1 were impacted due to disruption in gas supplies in our Telangana plant in the month of April. That has been resolved, and we should see dispatches in current quarter of around 105,000, 110,000, which would mean that a yearly average of around 410,000 to 430,000 would be reasonably possible.

Speaker #3: But what I can say with reasonable confidence is that margin should be maintained, if not improved, in the coming quarters. On the dispatch front, dispatches in the first quarter were impacted due to disruption in gas supplies at our Telangana plant in the month of April.

Speaker #3: That has been resolved and we should see dispatches in current quarter of around 1 lakh 5,000, 1 lakh 10,000 which would mean that an yearly average of around 4 lakh 10,000 to 4 lakh 30,000 would be reasonably possible.

Speaker #3: 4,10,000 tons to 4,30,000 tons would be reasonably possible.

Saket Kapoor: Okay.

Kaushal Bengani: 410,000 tons to 430,000 tons would be reasonably possible.

Speaker #2: Okay, sir. Sir, we did 420, or 419 rather, for FY26. So that number may inch up to the 430 bracket.

Saket Kapoor: Okay, sir. We did 420 or 419 rather for FY23, so that number may inch up to the 430 bracket.

Speaker #3: Yes.

Kaushal Bengani: Yes.

Saket Kapoor: Just in continuation to that, what is the update on the finishing line for the southern unit? Whether we will garner any benefit of the same for the current year?

Speaker #2: Sir, just in continuation to that, what is the update on the finishing line for the southern unit, and will we garner any benefit from the same for the current year?

Speaker #3: On the finishing line, we have placed orders of ₹107 crore and made payments of ₹89 crore. We are still waiting for the finishing line to be completed.

Kaushal Bengani: On the finishing line, we have placed orders of INR 107 crores and made payments of INR 89 crores. We are still waiting for the finishing line to be completed, maybe next quarter I'll be in a better position to give you a specific update.

Speaker #3: But maybe next quarter I'll be in a better position to give you a specific update.

Speaker #2: Okay. Sir, can you explain to us—is it the geopolitical setup or the long-time delivery of machineries that are related? Because these are inordinate delays in our chemistries of finishing line, and I stand corrected if I may have—so if you could just explain to us.

Saket Kapoor: Okay. Can you explain to us, sir, is it this geopolitical setup or the long-time delivery of machinery that are related? Because these are inordinate delays in our commissioning of finishing line. I stand corrected if I may have. If you could just explain to us.

Speaker #3: In the past year and a half, we were not pushing this aggressively because the market was not so buoyant. But the revival in the order book in the current situation will push the company to complete the finishing line sooner rather than later.

Kaushal Bengani: In the past year and a half, we were not pushing this aggressively because the market was not so buoyant. The revival in the order book in the current situation will push the company to complete the finishing line sooner rather than later.

Speaker #2: Okay, sir. And sir, in continuation to the same, can you give some more color on the big pipeline now and also how is the tendering process currently looking both from the state or I mean our oil PSUs and also from the export market which you have which you have just mentioned that have revived and the contribution would be higher I think so for the entering year and then some more points.

Saket Kapoor: Okay. Sir, in continuation to the same, can you give some more color on the bid pipeline now? Also how is the tendering process currently looking, both from our oil PSUs and also from the export market, which you have just mentioned that have revived, the contribution would be higher, I think, so for the ensuing year. Then some more points.

Speaker #3: I would refrain from commenting on the big pipeline, but I will give you some data points which will probably give you a better sense.

Kaushal Bengani: I would refrain from commenting on the bid pipeline, but I will give you some data points which will probably give you a better sense. In FY23, exports were 25% of total dispatches. In FY24, exports were less than 5% of total dispatches. In FY25, exports were again less than 5% of total dispatches. In FY26, exports were less than 10% of total dispatches. In Q1 FY27, exports were around 22% of total dispatches. I think you should be able to make a reasonable assessment on how things are positioned for the future.

Speaker #3: In financial year 2023, exports were 25% of total dispatches. In financial year 2024, exports were less than 5% of total dispatches. In financial year 2025, exports were again less than 5% of total dispatches.

Speaker #3: In financial year '26, exports were less than 10% of total dispatches. And in the first quarter of FY '27, exports were around 22% of total dispatches.

Speaker #3: I think you should be able to make a reasonable assessment on how things are positioned for the future.

Speaker #2: Okay, sir. And sir, since we do not have the closing order book for the March 26 closing order book, can you give some color or the exact number of what the order book was in the month of May or March?

Saket Kapoor: Okay, sir. Sir, since we do not have the closing order book for the March 2026 closing order book, can you give some color or the exact number of what the order book was in the month of May or March? Any number which you have, which is comparable to this INR 1,700 crore number?

Speaker #2: Any number that you have which is comparable to this 1,700-crore number?

Speaker #3: The number which I was referring to earlier was ₹1,303 crore, which was the number that was reported in the call for Q3. The number for Q4 would be around ₹1,300 crore only.

Kaushal Bengani: The number which I was referring to earlier was INR 1,303 crore, which was the number which was reported in the call for Q3. The number for Q4 would be around INR 1,300 crore only. Not much change.

Speaker #3: So not much change.

Speaker #2: Okay, sir. That is a very significant aspect on a quarterly basis, which you have just explained to us as well. Sir, I would also like to have a word on the update on the scheme.

Saket Kapoor: Okay. That is a very significant aspect on our quarterly basis, which you have just explained to us also. Sir, I would also like to have a word on the update on the scheme. If you could just like to mention about what are we exactly planning to do. I think some revision is also there, which was expected to be submitted. I am referring to the three companies or the three portfolios for Maharashtra Steelmaking. If you could just explain to the shareholders what exactly it is, what are the rationale and the thought process behind it.

Speaker #2: I think so some if you could just like to mention about what are we exactly trying are planning to do. I think so some revision is also there which was expected to be submitted and I'm referring to the three companies or the three portfolios for for Maharashtra Seamless.

Speaker #2: If if you could just explain to your to the shareholders what exactly it is, what are the rationale and your and the thought process behind it.

Speaker #3: There is no update. The scheme has been withdrawn.

Kaushal Bengani: There is no update. The scheme has been withdrawn.

Speaker #2: Okay. Okay. Okay, sir. Sir, lastly, on the change in inventory, that is also attributed to the lower dispatches only, and that will get corrected in the ensuing quarter.

Saket Kapoor: Okay. Sir, lastly, on the change in inventory. That is also attributed to the lower dispatches only, and that will get corrected in the ensuing quarter. There's nothing more to read into it.

Speaker #2: There's nothing more to read into it.

Speaker #3: Correct.

Kaushal Bengani: Correct.

Speaker #2: Okay. And last point on the premium connection, sir, when we look at your presentation slides—give me a second, sir—slide number 10, we have seen that for the June quarter, under the Jindal premium connection, the ITD value has moved up from the closing balance of ₹10 crore to ₹14 crore.

Saket Kapoor: Okay. Last point on the premium connection, sir. When we look at your presentation slides, give me a second, sir, slide number ten. We have seen that for the Q2, under the Jindal Premium Connection, the ICD value has moved up from the closing balance of INR 10 crore to INR 14 crore. Firstly, with respect to the premium connection part, where are we in terms of on the JV, which we've expected on some collaboration, and what does this minor increment in the ICD signify?

Speaker #2: So firstly, with respect to the premium connection part, where are we in terms of the JV which we were expecting, or some collaboration? And what does this minor increment in the ITD signify?

Kaushal Bengani: The joint venture agreement with JFE was done through our wholly owned subsidiary, Jindal Premium Connections Private Limited. We have commenced operations on manufacturing of premium connections, and we have successfully dispatched few orders. The increase in ICD exposure to our wholly owned subsidiary is because the wholly owned subsidiary has started manufacturing, and it requires few equipments and initial funds to start and improve production levels. The capacity of this plant is around 8,000 to 10,000 tons per year. It is a value addition product. We have mentioned in our earlier calls that the company is focusing on developing and improving its basket of value addition products, and premium connections is one of those products which we wanted to develop, and we have successfully done that. We also have orders of premium connections, and the mill for premium connections is booked till April of next year.

Speaker #3: The joint venture agreement with JFE was done through our wholly owned subsidiary, Jindal Premium Connections Private Limited, and we have commenced operations on manufacturing of premium connections. We have successfully dispatched a few orders.

Speaker #3: The increase in ICD exposure to our wholly owned subsidiary is because the wholly owned subsidiary has started manufacturing, and it requires a few pieces of equipment and initial funds to start and improve production levels.

Speaker #3: The capacity of this plant is around 8,000 to 10,000 tons per year. It is a value-added product, and we have mentioned in our earlier calls that the company is focusing on developing and improving its basket of value-added products, and premium connections is one of those products which we wanted to develop, and we have successfully done that.

Speaker #3: We also have orders for premium connections, and the mill for premium connections is booked till April of next year.

Speaker #2: Okay, sir, can you give some more color on what would be its contribution? I think it is being clubbed under 'share of profit in associate and joint venture.'

Saket Kapoor: Okay. Sir, can you give some more color on what will be its contribution? I think so it is being clubbed under share of profit in association joint ventures. That is where its profitability would appear when we will execute the order.

Speaker #2: That is where its profitability would appear when we execute the order.

Speaker #3: No, it is a wholly owned subsidiary, so there would be a line-wise consolidation.

Kaushal Bengani: No, it is a wholly owned subsidiary, so there would be a line-wise consolidation.

Speaker #2: Okay, sir. So for this first quarter, there is no contribution as of now for the top line.

Saket Kapoor: Okay, sir. For this Q1, there is no contribution as of now for that.

Kaushal Bengani: There is contribution of Jindal Premium Connections.

Speaker #3: There is contribution from Jindal premium connections.

Speaker #2: Sir, can you share?

Saket Kapoor: Okay. Can you share?

Speaker #3: It is a wholly owned subsidiary, so the financial performance of the wholly owned subsidiary will be consolidated with that of the standalone entity.

Kaushal Bengani: It is a wholly owned subsidiary, so the financial performance of the wholly owned subsidiary will be consolidated with that of the standalone entity.

Speaker #2: Yes, sir. Sir, when I look at the standalone number, it is ₹1,091 crore sales from operations, and consolidated also is the same number. So where would we find this number, sir?

Saket Kapoor: Sir, when I look at the standalone number, it is INR 1,091 crore sales from operation, and consolidated also is the same number. Where we will find this number, sir?

Speaker #3: You will not find it separately. It is consolidated.

Kaushal Bengani: You will not find it separately. It is consolidated.

Speaker #2: In the standalone only, can you quantify for us?

Saket Kapoor: In the standalone only. Can you quantify for us?

Speaker #3: In the consolidated financials, the subsidiary is consolidated with the standalone financials. The financials of the subsidiary are consolidated with the standalone financials.

Kaushal Bengani: The consolidated financials, the subsidiary is consolidated with the standalone financials. The financials of the subsidiary is consolidated with the standalone financials.

Speaker #2: Yes, sir. So that will not appear in the revenue; it will not flow through the P&L in the revenue and then the PBT. I just wanted to understand.

Saket Kapoor: Yes, sir. It will not appear in the revenue. It will not flow through the P&L in the revenue and then the PBT. I just wanted to understand.

Speaker #3: It will. It will. For subsidiaries, line-wise consolidation is undertaken. So, sales of the standalone entity will see an addition of the sales of the subsidiary as well.

Kaushal Bengani: It will. For subsidiaries, line-wise consolidation is undertaken. Sales of standalone will see an addition of the sales of the subsidiary as well.

Speaker #3: And so on for every line item, for this is applicable to all subsidiaries.

Kaushal Bengani: So on for every line item. This is applicable on all subsidiaries.

Speaker #2: Correct. Correct. So, this 1,091 is having the Jindal premium connection embedded in it.

Saket Kapoor: Correct. This 1,091 is having the Jindal Premium Connection embedded in it?

Speaker #3: Yes.

Kaushal Bengani: Yes.

Speaker #2: Okay. Can you quantify, sir, what have been the contributions in the value-added aspect? If some more color could be given, and what should be the annual contribution then?

Saket Kapoor: Okay. Can you quantify, sir, what has been the contribution to the value-added aspect? If some more color would have been given, and what should be the annual contribution then?

Speaker #3: I have already spoken enough about it. As I said, it is a market of 8,000 to 10,000 tons. So, overall, it will not make a material difference.

Kaushal Bengani: I have already spoken enough about it. As I said, it is a market of 8 to 10 thousand tons. Overall, it will not make a material difference, but it will lead to a situation where decline in profitability is limited on account of value addition products. That's why all companies want to develop value addition products because they are small in the capacity and high in profitability.

Speaker #3: But it will lead to a situation where decline in profitability is limited on account of value-added products. That's why all companies want to develop value-added products, because they are small in capacity and high in profitability.

Speaker #2: Correct, sir. And lastly, sir, as investors have been requesting for the cash utilization—so, since the scheme has been withdrawn, I think now the press thought process would be laid into that.

Saket Kapoor: Correct, sir. Lastly, sir, as investors have been requesting for the cash utilization. Since the scheme has been withdrawn and now cash, I think the cash thought process would be laid into that. What should investors be looking now for the cash utilization and any more color or what should be the near-term timeline that we should be waiting to hear from the promoters and the board on the utilization and the new effective scheme, if any? Any thought process you would like to share now?

Speaker #2: So, what should investors be looking for now regarding cash utilization? And could you provide any more color on when or what should be the near-term timeline that we should be waiting to hear from the promoters and the board on the utilization and any new effective scheme, if any?

Speaker #2: Any thought process you would like to share now?

Speaker #3: There is no update; whatever I said earlier remains as of now.

Kaushal Bengani: There is no update. Whatever I said earlier remains as of now.

Speaker #2: Thank you, sir. I'll join the queue, and my best wishes to the entire team. My condolences on the demise of Bhandari G, sir.

Saket Kapoor: Okay, Kaushalji. I will join the queue and my best wishes to the entire team and my condolence on the demise of Bhandariji, sir. A real gem from Kolkata. Thank you.

Speaker #2: A real gem from Kolkata. Thank you.

Speaker #3: Thank you, sir.

Kaushal Bengani: Thank you, sir.

Speaker #1: Thank you, Saki. A reminder to all participants: if you wish to ask any questions, you may press star and one on your touchtone telephone.

Operator 2: Thank you, Saket. A reminder to all participants, if you wish to ask any questions, you may press star and one on your touch-tone telephone. We have our next question from the line of Ankur Savaria, an individual investor. Please go ahead.

Operator: Thank you, Saket. A reminder to all participants, if you wish to ask any questions, you may press star and one on your touch-tone telephone. We have our next question from the line of Ankur Savaria, an individual investor. Please go ahead.

Speaker #1: We have our next question from the lineup. Anku Savariah, an individual investor. Please go ahead.

Speaker #4: Good morning, everyone. My first question is, why did we not have a concall last quarter, sir? Any particular reason?

Ankur Savaria: Good morning, everyone. My first question is, any clarity on sir why did not we have a ConCall last quarter, sir? Any particular reason?

Speaker #2: I'm not sure how that is relevant to the financial performance or the growth prospects of the company. It was not done. It was not done.

Kaushal Bengani: I'm not sure how that is relevant to the financial performance or the growth prospect of the company. It was not done.

Speaker #4: Okay, sir. And after long.

Ankur Savaria: Okay, sir.

Kaushal Bengani: It's like me asking why have you not participated in all of our earlier calls.

Speaker #2: Can I ask why you have not participated in all of our earlier calls?

Speaker #4: Fine taken, sir. Not an issue. It is good that now the commentary from the management, after a long time, is very positive on the order book.

Ankur Savaria: Fine, taken sir. Not an issue. It is good that now the commentary from the management after a long time is very positive on the order book. My question is, after this Samudra Manthan Yojana by the government, do you think that will also contribute in our order book in near future?

Speaker #4: My question is: after this Samudra Manthan Yojana by the government, do you think that will also contribute to our order book in the near future?

Speaker #3: I was not able to hear you very well. Can you please repeat?

Kaushal Bengani: I was not able to hear you very well. Can you please repeat?

Speaker #4: Sure. So, the government has announced the Samudra Manthan Yojana, under which they want to explore oil in the deep sea. So, will this also positively affect our company?

Ankur Savaria: Sure. The government has announced the Samudra Manthan Yojana, under which they want to explore oil in deep sea. Will this also positively affect our company? Will we be a part of it?

Speaker #4: Are we—will we be a part of it?

Speaker #3: On the face of the announcement, it should positively impact the company because we are an oil and gas sector supplier. Any development in the oil and gas sector's prospects will benefit all oil and gas sector participants.

Kaushal Bengani: On the face of the announcement, it should positively impact the company because we are an oil and gas sector supplier. Any development in the oil and gas sector prospects will benefit all oil and gas sector participants. The advantage that we have in particular is that we have the maximum size range, the maximum basket of value-added products, and the maximum capacity to supply to the oil and gas sector in India. As and when there is an improvement in expenditure, we will see a direct benefit to Maharashtra Seamless.

Speaker #3: The advantage that we have, in particular, is that we have the maximum size range, the maximum basket of value-added products, and the maximum capacity.

Speaker #3: To supply to the oil and gas sector in India. As and when there is an improvement in expenditure, we will see a direct benefit to Maharashtra Seamless.

Speaker #4: Okay. What is our capacity utilization as of now, sir? Any idea? Any color on that?

Ankur Savaria: Okay. What is our capacity utilization as of now, sir? Any color on that?

Speaker #3: Capacity utilization is around 70–75 percent. We have an active capacity of 550,000 tons, and we manufacture and dispatch anywhere between 410,000 to 430,000 tons per year.

Kaushal Bengani: Capacity utilization is around 70% to 75%. We have an active capacity of 550,000 tons, and we manufacture and dispatch anywhere between 410,000 to 430,000 tons per year for the seamless team.

Speaker #3: For the seamless.

Speaker #4: Right, sir. And now, we have seen that you have given a capital allocation, and it is approximately the same for the last three to four years. Now, since you are saying that you are going to go ahead with the capital allocation from now on, do you foresee a good demand coming in the sector after a long time, sir?

Ankur Savaria: Right, sir. Now we have seen that you have given a capital allocation, I mean, the profit seem to be same for last three, four years. Now, once you're saying that you are going to go ahead with the capital allocation from now on. Do you foresee a good demand coming in the sector after a long time, sir?

Speaker #3: We expect a revival in demand. We have also started capital expenditure a couple of years ago. It is not that we have not done anything for the past two years.

Kaushal Bengani: We expect revival in demand. We also have started the capital expenditure a couple of years ago. It is not that we have not done anything for the past two years. We have put in a cold drawn line at our facility in Mangaon. The capital expenditure work for the finishing line at Telangana was also started in 2024, we were not pursuing it aggressively because the market was not supporting us. Now that we have seen a revival in demand, and hopefully this should continue for the coming quarters, we also want to complete the capital expenditure work as early as we can.

Speaker #3: We have put in a cold drawn line at our facility in Mangaon. The capital expenditure work for the finishing line at Telangana was also started in 2024.

Speaker #3: But we were not pursuing it aggressively because the market was not supporting us. But now that we have seen a revival in demand, and hopefully this should continue for the coming quarters, we also want to complete the capital expenditure work as early as we can.

Speaker #4: That's good.

Ankur Savaria: That's great.

Speaker #3: The project on which we are focusing right now is the finishing line at Telangana, for which we have placed orders of ₹107 crores and made payments of ₹89 crores.

Kaushal Bengani: The project on which we are focusing right now is the finishing line at Telangana, for which we have placed orders of INR 107 crores and made payments of INR 89 crores.

Speaker #4: So, my last question is regarding the EBITDA per turn for the ERW, and it has come down by a large margin. Is there any particular reason for that, sir?

Ankur Savaria: My last question is regarding the EBITDA per ton for the ERW, it has come down by a long margin. Any particular reason regarding that, sir?

Speaker #3: The ERW segment generally is a very small segment of the entire company. It accounts for less than 7% of total EBITDA. Secondly, the ERW segment comprises two sub-segments.

Kaushal Bengani: The ERW segment generally is a very small segment of the entire company. It accounts for less than 7% of total EBITDA. Secondly, the ERW segment comprises of two sub-segments. First, the ERW pipes, which are used in the oil sector, which are API certified, and secondly, the ERW pipes which are used in the water sector, which are IS certified. The margins in the API certified ERW pipes, which are used in the oil sector, are much higher than the margins which are there in the IS certified ERW pipes, which are used in the water sector. The variation in margin on a quarterly basis in the ERW segment as a whole is reflective of the kind of products that we dispatch in that particular quarter.

Speaker #3: First, the ERW pipes which are used in the oil sector, which are API certified. And secondly, the ERW pipes which are used in the water sector, which are IS certified.

Speaker #3: The margins in the API certified ERW pipes which are used in the oil sector are much higher than the margins which are there in the IS certified ERW pipes which are used in the water sector.

Speaker #3: The variation in margin on a quarterly basis in the ERW segment as a whole is reflective of the kind of products that we dispatch in that particular quarter.

Speaker #4: Got it, sir. It will be effective. And at one point of time, our EBITDA per tonne for the seamless pipe had reached somewhere around ₹21,000 to ₹22,000.

Ankur Savaria: Got it, sir. If you take that, I may ask, sir, at one point of time, our EBITDA per ton for the seamless pipe had reached somewhere about INR 21,000 to 22,000. You said that it was just because there was the change in the rate of inventory that had increased our EBITDA per ton, and then it came down to somewhere about INR 10,000 to 11,000. Slowly it is again increasing to INR 15,000 to 16,000 per ton. Is it again the reverse effect of the raw material, or are we able to increase our EBITDA per ton due to our order book?

Speaker #4: And you said that it was just because there was the change in the rate of inventory that had increased our EBITDA per turn. And then it came down to somewhere about 12,000, 11,000.

Speaker #4: But slowly it is again increasing to 15,000, 16,000 per ton. So is it again the reverse effect of the raw material, or are we able to increase our EBITDA per ton due to our order book?

Kaushal Bengani: In Q1 FY27, the improvement in margins was on account of the product mix, that improvement is likely to continue because of the order book regarding which I had spoken at length a little while ago. The change in inventory which you are talking about, which happens on account of mark-to-market of the inventory that we are carrying with the current price, that adjustment was not so much of a factor in the Q1. It was more applicable in the Q4 FY26 and is usually seen in an environment where prices rise rapidly or prices fall rapidly. By prices, I mean prices of raw material, which is steel billets for us in the seamless segment.

Speaker #3: In quarter one, FY27, the improvement in margins was on account of the product mix. That improvement is likely to continue because of the order book, regarding which I had spoken at length a little while ago.

Speaker #3: The change in inventory which you are talking about, which happens on account of mark-to-market of the inventory that we are carrying with the current price—that adjustment was not so much of a factor in the first quarter.

Speaker #3: It was more applicable in the fourth quarter of FY26, and is usually seen in an environment where prices rise rapidly or fall rapidly.

Speaker #3: By prices, I mean prices of raw material, which is steel billets for us, in the seamless segment.

Ankur Savaria: That's great to hear, sir. All the best from my side, thanks for answering my questions, sir.

Speaker #4: That's great to hear, sir. All the best from my side, and thanks for answering my question, sir.

Speaker #3: Thank you.

Kaushal Bengani: Thank you.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star and one. We have our next question from the line of Gaurav Khanna from CAPGROW Capital.

Operator 2: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Gaurav Khanna from Khat Guru Capital. Please go ahead.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Gaurav Khanna from Khat Guru Capital. Please go ahead.

Speaker #2: Please go ahead.

Gaurav Khanna: Am I audible, sir? Good morning.

Speaker #4: I'm audible here. Good morning.

Speaker #3: Good morning, Gaurav.

Kaushal Bengani: Good morning, Gaurav.

Speaker #4: Yes. So my question is, where do we stand on the demurrage right now?

Gaurav Khanna: Yeah. My question is, where do we stand on the demerger right now?

Speaker #3: That scheme has been withdrawn. We had already intimated the exchanges.

Gaurav Khanna: That scheme has been withdrawn. We have already intimated the exchanges.

Speaker #4: Oh, okay, sir.

Gaurav Khanna: Oh, okay, sir.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star, then one. The next question is from the line of Jyoti Singh from ICICI Securities.

Operator 2: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Jyoti Singh from ICICI Securities. Please go ahead.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. Next question is from the line of Jyoti Singh from ICICI Securities. Please go ahead.

Speaker #2: Please go ahead.

Speaker #5: Hello. Hello. Hello. Yeah. Good morning, sir. Thank you for the opportunity.

Jyoti Singh: Hello?

Kaushal Bengani: Hello. Yes.

Jyoti Singh: Hello. Yeah, good morning, sir. Thank you for your patience.

Speaker #3: Good morning.

Kaushal Bengani: Good morning.

Speaker #5: So, my first question is regarding the order book. With ONGC stepping up its drilling program, including a significant number of new development wells, how are you seeing this translate into the incremental demand for seamless pipes?

Jyoti Singh: My first question is regarding the order book. With ONGC stepping up its drilling programs, including a significant number of new development wells, how are you seeing this translate into the incremental demand for seamless pipes? Have you seen any meaningful improvement in the inquiry levels yet or order inflows in terms of visibility?

Speaker #5: Have you seen any meaningful improvement in inquiry levels yet, or order inflows, in terms of visibility?

Speaker #3: Yes.

Kaushal Bengani: Yes

Speaker #5: Is it possible to quantify that?

Jyoti Singh: Is it possible to quantify that?

Speaker #3: I would not want to comment on the upcoming orders. But if you look at our order book composition, which has been very transparently displayed and is available in the public domain, you will be able to make an assessment as to why the order book, which was reported yesterday to shareholders, is different from what it was in the past couple of years.

Kaushal Bengani: I would not want to comment on the upcoming orders. If you look at our order book composition, which has been very transparently displayed and is available in public domain, you will be able to make an assessment as to why the order book, which has been reported yesterday to shareholders, is different from what it was in the past couple of years.

Speaker #5: Okay. Besides, there are several reports regarding the increased exploitation and drilling activity across the Indian eastern basins and offshore regions. So, how meaningful is this opportunity for Maharashtra Seamless?

Jyoti Singh: Okay. Besides, there are several reports around the increased exploration and drilling activity across the Indian eastern basins and offshore regions. How meaningful is this opportunity for Maharashtra Seamless? Are we seeing any customer inquiries or any orders linked to this project?

Speaker #5: Are we seeing any customer inquiries for any orders linked to this project?

Speaker #3: The reports that you are talking about, these reports were in circulation for the past few years. But nothing was happening on the ground at a level commensurate with the reports that were being circulated.

Kaushal Bengani: The reports that you're talking about, these reports were in circulation for the past few years, but nothing was happening on the ground in a commensurate level with the reports that were being circulated. However, in the past few months, we have seen an improvement in our order book, which again has been very transparently displayed in the presentation, and I have also spoken about it towards the start of the call. Around 64%-65% of the entire order book comprises high margin orders.

Speaker #3: However, in the past few months, we have seen an improvement in our order book, which again has been very transparently displayed in the presentation.

Speaker #3: And I have also spoken about it towards the start of the call. Around 64 to 65 percent of the entire order book comprises high margin orders.

Speaker #5: Okay, so my third question is in regards to the US import duties. For California steel imports, are we still cost competitive enough to win and execute orders in the US market, basically, given the current US regime?

Jyoti Singh: Okay. My third question is with regards to the US imposing duties, the tariff on steel imports. Are we still cost competitive enough to win and execute orders in the US market, basically given the current US regime?

Kaushal Bengani: Just one second, madam. 20% of the entire order book, that is approximately INR 340 crores worth of orders are to North America, which comprises US and Canada. Despite the disruption in the Middle East, we have been able to obtain orders and dispatch to the export market.

Speaker #3: Just one second, madam. Twenty percent of the entire order book—that is, approximately ₹340 crore worth of orders—are to North America, which comprises the US and Canada.

Speaker #3: And despite the disruption in the Middle East, we have been able to obtain orders and dispatch to the export market.

Speaker #5: So, from this order book, how much of the tariff burden is being absorbed by the customer versus Maharashtra Seamless?

Jyoti Singh: From this order book, how much of the tariff burden is being absorbed by the customer versus the Maharashtra Seamless?

Speaker #3: Entirely. We will not absorb any cost incidence.

Kaushal Bengani: Entirely. We will not absorb any cost incidence.

Speaker #5: Okay, that's all from my side. Thank you, sir.

Jyoti Singh: Okay. That's it from my side. Thank you, sir.

Speaker #3: Thank you.

Kaushal Bengani: Thank you.

Speaker #2: Thank you. We have our next question from the line of Sriram, an individual investor. Please go ahead.

Operator 2: Thank you. We have our next question from the line of Shriram, an individual investor. Please go ahead.

Operator: Thank you. We have our next question from the line of Shriram, an individual investor. Please go ahead.

Speaker #4: Yeah, thank you for the opportunity, sir. I just have one question. Are we seeing any benefits from the anti-dumping duty? And given that the existing duty will expire next year in January, do we expect the duty to be continued beyond that?

[Company Representative]: Yeah. Thank you for the opportunity, sir. I just have one question. Are we seeing any benefits of the anti-dumping duty? Given that the existing duty will expire next year in Jan, do we expect the duty to be continued beyond that? What is the company's action plan to ensure its continuation?

Speaker #4: And what is the company's action plan to ensure its continuation?

Speaker #3: I am not in a position to give you the kind of answer that you want from me because implementing or renewing a duty—on which product and at what level—is not within my control or the company's control.

Kaushal Bengani: I am not in a position to give you the kind of answer that you want from me, because implementing or renewing a duty on which product and at what level is not within my control or the company's control. We can only petition the government individually as a company or together as an industry to make necessary adjustments to the duty levels. An encouraging sign is that the duty has been extended on an interim basis from October to January, which means that they are looking into the data, and they found reasonable cause to make an extension. I will not be able to give you a specific response or a definitive response that duty will be renewed or at what level. Since we are continuing our CapEx, we are positive on the prospects of the industry and the future of the company.

Speaker #3: We can only petition the government individually as a company or together as an industry to make necessary adjustments to the duty levels. An encouraging sign is that the duty has been extended on an interim basis from October to January, which means that they are looking into the data, and they found reasonable cause to make an extension.

Speaker #3: I will not be able to give you a specific response or a definitive response that duty will be renewed, or at what level. But since we are continuing our capital expenditure, we are positive on the prospects of the industry and the future of the company.

Speaker #4: But sir, is it benefiting us now? I mean, what is your sense now? Because—

[Company Representative]: Sir, is it benefiting us now? I mean, what is your sense now?

Speaker #3: Yes, it is. It is benefiting us. It has become less prohibitive than it was before, but it is still better than no duty.

Kaushal Bengani: It is benefiting us. It has become less prohibitive than it was before, but it is still better than no duty.

Speaker #4: Okay, thank you. Thank you. Got it.

[Company Representative]: Okay. Fine, sir. Thank you. Got it.

Speaker #3: Thank you.

Kaushal Bengani: Thank you.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star, then one. We have our next question from the line of...

Operator 2: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Saket Kapoor from Kapoor Co. Please go ahead.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Saket Kapoor from Kapoor Co. Please go ahead.

Speaker #2: Saqeeb Kapoor from Kapoor & Co. Please go ahead.

Speaker #6: Yes. Yes, sir. Just in continuation to what the earlier speaker mentioned, and your reply about the extension of the anti-dumping duty timeline, sir. So that was till 2027, and then now for four months to 2028.

Saket Kapoor: Yes, sir. Just in continuation to what the earlier speaker and you replied about the extension of the anti-dumping duty timeline, sir. That was 2027, then now for four months to 2028. If you could just give the timeline year-wise also till what is the duty-

Speaker #6: And if you could just give the timeline year-wise also. What is the limiting factor?

Speaker #3: The duty was from 2016 to 2021, then from 2021 to October 2026. Last month, it was temporarily extended from October 2026 to January 2027, pending completion of the review for the extension of the tenure of the duty.

Kaushal Bengani: The duty was from 2016 to 2021, then from 2021 to October 2026. Last month, it was temporarily extended from October 2026 to January 2027, pending completion of review of the extension of the tenure of the duty.

Speaker #6: Okay. And, sir, correct me if I am wrong here. Earlier, we also introduced some new products, which were not covered under the anti-dumping regime at that time because they were not produced in the country.

Saket Kapoor: Okay. Sir, correct me here. Earlier, we have also introduced some new products which were not covered under the anti-dumping regime at that time because they were not produced in the country, and MSL was, I think, what we're doing there.

Speaker #6: And MSL was, I think so, were doing that. So usko bhi, sir, hum coverage mein daal ke ab ki baar humne apna prastav rakha hai.

Speaker #3: Humne petition mein to yehi dala hai ki jo bhi products hain, woh saare cover ho. Ab sarkar kya decide karti hai, dekhiye.

Kaushal Bengani: We have put in the petition that all the products should be covered. Let's see what the government decides.

Speaker #6: Yes, because you have earlier explained that China was importing products which were not covered in the anti-dumping. Hence, they were benefiting from the same.

Saket Kapoor: You have earlier explained that China was, there were import from products which were not covered in the anti-dumping, hence they were benefiting from the same.

Speaker #6: So now, if there will be an overall review of the entirety, I mean in entirety, then this product will also be included.

Kaushal Bengani: Correct.

Saket Kapoor: There will be an overall review of the entirety, things in entirety, this product will also be included.

Speaker #3: Correct.

Kaushal Bengani: Correct.

Speaker #6: May be included. Yes. Okay. Okay. Right, sir. Sir, if we take now the optimistic scenario because of the closing order book and your commentary, then what should now be the new timeline for execution of the capex in terms of the Nagothane part of the story, which is a large capex for the Otmil upgrade?

Saket Kapoor: May be included. Yes. Okay. Right, sir. Sir, if we take now the optimistic scenario because of the closing order book and your commentary, then what should now be the new timeline of execution of the CapEx in terms of the Nagothane part of the story, which is a large CapEx of hot mill upgrade. Mister, I would like to understand the sequence now. For Nakrekal, you have clarified that we are now pushing forward for the completion so that we can participate in the improved order execution. When will the bigger CapEx of the hot mill upgrade at Nagothane will follow suit, sir?

Speaker #6: I would like—we would like to understand the sequence now for Narpreet Palli. You have clarified that we are now pushing forward for the completion, so that we can participate in the improved order execution.

Speaker #6: So, when will the bigger capex for the Otmil upgrade at Nagothane follow suit, sir?

Speaker #3: We have not started that project at all. We are focusing on completing the Telangana project first, and then we will get back to you.

Kaushal Bengani: We have not started that project at all. We are focusing on completing the Telangana project first, and then we will get back to you.

Speaker #6: Okay. So, to put it simply, the factors that will lead to upgrading and all are not still in place. So, we will first capitalize on the market.

Saket Kapoor: Okay. The factors that will need for upgrading and all are not still in place.

Kaushal Bengani: Why you keep repeating the same thing? I have already clarified that we have not started that project, and we are focusing on the Telangana project. Specifically on the Telangana project, I also informed you that I will give you a definitive update in the next call. What more do you want from me?

Speaker #3: I don't know why you keep repeating the same thing. I have already clarified that we have not started that project, and we are focusing on the Telangana project.

Speaker #3: Specifically on the Telangana project, I also informed you that I will give you a definitive update in the next call. What more do you want from me?

Speaker #6: No, sir. I was only trying to make myself understand. You are absolutely correct in your outcome and your thought process, sir. And the last point is only, sir, regarding the wage revision part from the employee aspect.

Saket Kapoor: No, sir. I was only trying to make myself understand. You are absolutely correct on your thoughts also, sir. Last point is only, sir, wage revision part on the employee aspect and the availability of labor. If you could just give us some color, how is our mills and our work being insulated, or how is the employee availability and the cost inflation in terms of the employee expenses likely to be, or what have been factored with the new code and all? If you could just give your thoughts on that.

Speaker #6: And the availability of labor. So if you could just give us some color, how are our mills and our work being insulated? Or how is the employee availability, and the cost inflation in terms of employee expenses, likely to be? Or what has been factored with the new code and all?

Speaker #6: If you could just give your thoughts on it.

Kaushal Bengani: There was an incidence of INR 3 crore, which was captured in Q4 of the previous financial year. Apart from that, the regular increments of employees have already been undertaken. There is nothing else to add on this point.

Speaker #3: There was an incidence of ₹3 crore, which was captured in the fourth quarter of the previous financial year. Apart from that, the regular increments of employees have already been undertaken.

Speaker #3: There is nothing else to add on this point.

Speaker #6: And availability of labor is also not an issue for consent for our mills, our employees.

Saket Kapoor: Availability of labor is also not an issue for concern for our mills?

Speaker #3: Correct. Correct.

Kaushal Bengani: Correct.

Speaker #6: Okay, right, sir. Thank you once again, Kaushal ji, Vikas ji, for the call and for giving all the elaborate and pointed answers. My best wishes to the team.

Saket Kapoor: Right, sir. Thank you once again, Kaushalji, Vikasji for the call and for giving all the elaborated and pointed answers. My best wishes to the team.

Kaushal Bengani: Thank you, sir.

Speaker #6: Thank you.

Saket Kapoor: Thank you.

Speaker #2: Thank you. A reminder to all participants: if you wish to ask any questions, you may press star and one on your touchtone telephone. The next question is from the line of Amit from Determined Investments.

Operator 2: Thank you. A reminder to all participants, if you wish to ask any questions you may press star and one on your touchtone keypad. Next question is from the line of Amit from Determined Investments. Please go ahead.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions you may press star and one on your touchtone keypad. Next question is from the line of Amit from Determined Investments. Please go ahead.

Speaker #2: Please go ahead.

Speaker #4: Yeah, thank you so much for the opportunity. Can you hear me?

[Analyst] (Determined Investments): Yeah, thank you so much for the opportunity. Can you hear me?

Speaker #2: Yes, Amit.

Operator 2: Yes, Amit.

Operator: Yes, Amit.

Speaker #3: We can hear you.

Kaushal Bengani: We can hear you.

Speaker #4: Okay, thank you. Sir, just one question on the export business. Thanks for the detailed explanation regarding the past 10 to 15 years—around 20%—and then down to 5%, and about 10%, or whatever, 5 to 10% last year, and now things are picking up this year.

[Analyst] (Determined Investments): Okay. Thank you. I think just one question on the exports business. Thanks for the detailed explanation of the past trend. Fiscal 2023, about 20% and then down to 5%, then about 10%, whatever, 5% to 10% last year. Things are picking up this year. I just wanted to, two points. I mean, one is that, fiscal 2027, given your order book and what you have already executed in Q1, the trend sort of seem to be very clear. It's going to be between 15% and 20% of your sales for this year seemingly. I mean, how should we look at this going forward which is basically beyond fiscal 2027 going into fiscal 2028, 2029? How do you sort of see the export market in general and with respect to specifically your own exports?

Speaker #4: So I just wanted to make two points. One is that for fiscal '27, given your order book and what you have already executed in Q1, the trends seem very clear—it's going to be between 15% and 20% of your sales for this year, seemingly.

Speaker #4: But I mean, how should we look at this going forward, which is basically beyond fiscal '27, going into fiscal '28, '29? How do you sort of see the export market?

Speaker #4: I mean, in general and with respect to specifically your own exports, because in the past you as a sort of recall, you have sort of given a commentary that the focus of the company will continue to be primarily the domestic market.

[Analyst] (Determined Investments): In the past, as I sort of recall, you have sort of given a commentary that the focus of the company will continue to be primarily the domestic market. The second point was on the margin side also, I was a little bit surprised because based on my understanding, as far as the US market is concerned the duties on steel products sort of still continues to be very high because we are not part of that changes in US import duties which have sort of happened this year, the Supreme Court judgment. To the best of my understanding, steel products duties in the US are under a separate section which remain unchanged from last year.

Speaker #4: And the second point was on the margin side also. I was a little bit surprised because, to the best of my understanding, as far as the US market is concerned, the duties on steel products still continue to be very high.

Speaker #4: Because we are not part of those changes in US import duties which have sort of happened this year—the Supreme Court judgment. So, to the best of my understanding, steel product duties in the US are under a separate section.

Speaker #4: Which remain unchanged from last year. So, what is sort of driving this kind of traction in US exports, given the high level of duties, and especially the point about margins? Because you seem to indicate that the margins will be higher on these products, given the high level of duties—which I presume these products would be under.

[Analyst] (Determined Investments): What is sort of driving this kind of traction in US exports given the high level of duties and especially the point on margins because you sort of seem to indicate that the margins will be higher on these products given the high level of duties which I presume that these products would be under. If you can just sort of provide some clarification on this point.

Speaker #4: So, if you could just provide some clarification on this point.

Speaker #3: Regarding forecasts—let's say six months, one year, or two years into the future—it is not something that we can provide, because unlike other companies, we operate on a short-cycle order book.

Kaushal Bengani: Regarding forecasts, let's say six months, one year, two years into the future, it is not something that we can provide because unlike other companies, we operate on a short cycle order book. That is not something which is a norm in the industry, but it is something which we actively practice, because we want to maintain a 3 to 4-month order book at all times, not more than that, not less than that. The reason why that is the case is because the duration of the order book should match with the holding period of inventory. Every time we receive an order, we immediately book raw materials against the said order so that we are not impacted by fluctuating steel prices, and profitability per order is maintained at all times. That is a golden principle for our company, and we have diligently followed that for the past 35 years.

Speaker #3: That is not something which is a norm in the industry, but it is something which we actively practice. Because we want to maintain a three- to four-month order book at all times.

Speaker #3: Not more than that, not less than that. The reason why that is the case is because the duration of the order book should match with the holding period of inventory.

Speaker #3: Every time we receive an order, we immediately book raw material against the said order so that we are not impacted by fluctuating steel prices and profitability per order.

Speaker #3: Is maintained at all times. That is a golden principle for our company, and we have diligently followed that for the past 35 years. Therefore, for us to give a guidance six months from now or one year from now would be something which is not data driven.

Kaushal Bengani: Therefore, for us to give a guidance six months from now or one year from now would be something which is not data-driven. If it is not data-driven, it is not something which I would want to comment, because it is not a philosophy of the company to overcommit and underdeliver. We have always been very conservative in whatever we communicate to the general public. Regarding exports to the US, it is on account of improvement in drilling activities in that location. We have always exported to US and Canada. It is not something which is new. It was impacted due to the tariff tantrum, and before that, due to a slowdown in oil and gas expenditure immediately after the boom in oil and gas expenditure caused by the Russia-Ukraine war.

Speaker #3: And if it is not data-driven, it is not something I would want to comment on, because it is not the philosophy of the company to overcommit and underdeliver.

Speaker #3: We have always been very conservative in whatever we communicate to the general public. Regarding exports to the US, it is on account of improvement in drilling activities in that location.

Speaker #3: We have always exported to the US and Canada. It is not something that is new. It was impacted due to the tariff tantrum, and before that, due to a slowdown in oil and gas expenditure immediately after the boom in oil and gas expenditure caused by the Russia-Ukraine war.

Speaker #3: We have seen a revival, and we are able to dispatch to that geography despite the war going on in the Middle East.

Kaushal Bengani: We have seen a revival, and we are able to dispatch to that geography despite the war going on in the Middle East.

Speaker #4: Okay. So just a clarification. How are you sort of able to generate given the fact that US tariff specifically on steel products and the pipes are principally that still sort of continue to remain high.

[Analyst] (Determined Investments): Okay. Just a clarification, how are you sort of able to generate, given the fact that US tariffs, specifically on steel products, and the pipes are principally that, they're still sort of continuing to remain high. How do you sort of explain a very high level of margins from these orders, basically, and definitely higher than the company average, basically? Given high duties also high margins also doesn't sort of seem to gel together.

Speaker #4: So how do you sort of explain a very high level of margins from these orders, basically? And definitely higher than the company average, basically. Given such high duties, also high margins also doesn’t sort of seem to gel together.

Speaker #4: That's why I'm just.

Speaker #3: The only logical explanation would be that the selling price is even higher.

Kaushal Bengani: The only logical explanation would be that the selling price is even higher.

Speaker #4: Okay. Okay. Okay. Things seem to be quite buoyant in that respect. All right, understood. That's it from my end. Thank you.

[Analyst] (Determined Investments): Okay. Things sort of seem to be quite buoyant on that respect. All right. Understood. That's it from my end. Thank you.

Speaker #3: Thank you.

Kaushal Bengani: Thank you.

Speaker #2: Thank you. I remind all participants, if you wish to ask any questions, you may press star one. We have our next question from the lineup.

Operator 2: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Vikas Singh from ICICI Securities. Please go ahead.

Operator: Thank you. A reminder to all participants, if you wish to ask any questions, you may press star and one. We have our next question from the line of Vikas Singh from ICICI Securities. Please go ahead.

Speaker #2: Vikas Singh from ICICI Securities, please go ahead.

Speaker #5: Thank you. Kaushal, just one question. Regarding the current competitive intensity, I believe that last quarter one of your larger competitors was not in the race for the orders because of the up.

Vikas Singh: Thank you. Kaushal, just one question regarding currently the competitive intensity. I believe that last quarter, one of your larger competitor was not in the race for the orders because of the API certification cancellation. Going forward, what's your view in terms of competitive intensity, and including the imported part of it? Does the INR depreciation have made you guys a little more competitive at this point of time? Your views on these things.

Speaker #5: API certification cancellation. So, going forward, what's your view in terms of competitive intensity, including the imported part of it? Has the INR depreciation made you guys a little more competitive at this point of time?

Speaker #5: So, your views on these things.

Speaker #3: You are absolutely right. The INR depreciation has made us more competitive. Further, we've also benefited from the disruption in the API license of our competitor.

Kaushal Bengani: You're absolutely right. The INR depreciation has made us more competitive. Further, we've also benefited from the disruption in the API license of our competitor, and we've been able to capture orders. Therefore, we believe that we are in a better position right now, and we'll be able to maintain that going forward. Based on the feedback that I've received from the sales and marketing team, I think we'll be able to maintain a good order book immediately going forward.

Speaker #3: And we've been able to capture orders; therefore, we believe that we are in a better position right now, and we'll be able to maintain that going forward.

Speaker #3: Based on the feedback that I've received from the sales and marketing team, I think we'll be able to maintain a good order book immediately, going forward.

Speaker #5: Noted. That's all from my side.

Vikas Singh: No doubt. That's all from my side.

Speaker #2: Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Operator 2: Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Operator: Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments.

Speaker #3: Thank you, shareholders, for participating in the call on a Saturday. We appreciate your input and guidance, and we'll ensure that all necessary updates regarding the company are made available to you.

Kaushal Bengani: Thank you, shareholders, for participating in the call on a Saturday. We appreciate your inputs and guidance, we'll ensure that all necessary updates regarding the company are made available to you. Thank you.

Speaker #3: Thank you.

Operator 2: Thank you. On behalf of ICICI Securities Limited, that concludes the conference. Thank you for joining us, you may now disconnect your line.

Operator: Thank you. On behalf of ICICI Securities Limited, that concludes the conference. Thank you for joining us, you may now disconnect your line.

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Q1 2027 Maharashtra Seamless Ltd Earnings Call

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