Q1 2027 Electrosteel Castings Ltd Earnings Call

August 7, 2026

Operator 2: Ladies and gentlemen, you have been connected to the Electrosteel Castings Limited conference call. Please stay connected. The call will begin shortly. Participants, you have been connected to the Electrosteel Castings Limited conference call. Please stay connected. The call will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q1 FY2027 earnings conference call of Electrosteel Castings Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Hiral Keniya from EY LLP. Thank you, and over to you, sir.

Operator: Ladies and gentlemen, you have been connected to the Electrosteel Castings Limited conference call. Please stay connected. The call will begin shortly. Participants, you have been connected to the Electrosteel Castings Limited conference call. Please stay connected. The call will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q1 FY2027 earnings conference call of Electrosteel Castings Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. If you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Hiral Keniya from EY LLP. Thank you, and over to you, sir.

Speaker #1: There is a reminder: you have been connected to the Electrosteel Castings Limited conference call. Please stay connected, the call will begin shortly. Participants, you have been connected to the Electrosteel Castings Limited conference call.

Speaker #1: Please stay connected. The call will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Q1 FY27 earnings conference call of Electrosteel Castings Limited.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: If you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. I now hand the conference over to Mr. Hill Kenya from EY LLP.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Oh, thank you, Steve. Good afternoon, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's Q1 FY27 earnings conference call.

Moderator: Thank you, Steve. Good afternoon, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's Q1 FY2027 earnings conference call. To discuss the performance of the company, we have with us from the management team, Mr. Madhav Kejriwal, Whole-Time Director, Mr. Sunil Katial, Whole-time Director and CEO, Mr. Rajesh Daga, CFO, and Mr. Gaurav Somani, General Manager-Finance. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain some forward-looking statements that are subject to various risks, uncertainties, and other factors which would be beyond management's control. We kindly request to bear in mind that there might be some uncertainties while interpreting such statements. We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session.

[Company Representative] (Electrosteel Castings): Thank you, Steve. Good afternoon, everyone. On behalf of Electrosteel Castings Limited, I welcome you all to the company's Q1 FY2027 earnings conference call. To discuss the performance of the company, we have with us from the management team, Mr. Madhav Kejriwal, Whole-Time Director, Mr. Sunil Katial, Whole-time Director and CEO, Mr. Rajesh Daga, CFO, and Mr. Gaurav Somani, General Manager-Finance. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain some forward-looking statements that are subject to various risks, uncertainties, and other factors which would be beyond management's control. We kindly request to bear in mind that there might be some uncertainties while interpreting such statements. We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session.

Speaker #2: To discuss the performance of the company, we have with us from the management team Mr. Madhav Kejriwal, Whole-time Director; Mr. Sunil Katial, Whole-time Director and CEO; Mr. Rajesh Daga, CFO; and the finance team.

Speaker #2: Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain some forward-looking statements that are subject to various risks.

Speaker #2: Uncertainties and other factors may be beyond management's control. We kindly request that you bear in mind there might be some uncertainties while interpreting such statements.

Speaker #2: We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I will now hand over the conference call to Madhav Sir for his opening remarks.

Moderator: I will now hand over the conference call to Madhav, sir, for his opening remarks. Thank you, and over to you, sir.

[Company Representative] (Electrosteel Castings): I will now hand over the conference call to Madhav, sir, for his opening remarks. Thank you, and over to you, sir.

Speaker #2: Thank you, and over to you, sir.

Speaker #3: Thank you, Hero. A very good evening, everyone, and thank you for joining us for the Electrosteel Castings Q1 FY27 earnings conference call. I would like to thank all the stakeholders for their continued trust and support in us.

Madhav Kejriwal: Thank you, Herul. Very good evening, everyone, and thank you for joining us for Electrosteel Castings Q1 FY27 earnings conference call. I would like to thank all the stakeholders for their continued trust and support in us. Over the past few quarters, the Ductile Iron pipe industry has operated in a challenging environment due to slower project execution, delayed fund disbursements, and liquidity constraints at the state and municipal levels. While the external demand environment remained challenging, we stayed focused on what was within our control. During this year, we implemented a broad-based structural cost optimization program across our operations, strengthening operating efficiencies and creating a more competitive cost base that will support profitability and operating leverage as volumes recover.

Speaker #3: Over the past few quarters, the ductile iron pipe industry has operated in a challenging environment due to slower project execution, delayed fund disbursements, and liquidity constraints at the state and municipal levels.

Speaker #3: While the external demand environment remained challenging, we stayed focused on what was within our control. During the year, we implemented a broad-based structural cost optimization program across our operations, strengthening operating efficiencies and creating a more competitive cost base that will support profitability and operating leverage as volumes recover.

Speaker #3: We are encouraged by the approval of Jal Jeevan Mission 2, with the enhanced outlay of ₹8.69 lakh crores, including the central government's support of ₹3.59 lakh crores, an increase from the year 2012's ₹2.08 lakh crores.

Madhav Kejriwal: We are encouraged by the approval of Jal Jeevan Mission 2.0 with the enhanced outlay of INR 8.69 lakh crore, including the central government's support of INR 3.59 lakh crore increased from the erstwhile INR 2.08 lakh crore. Alongside the continued focus on AMRUT 2.0, irrigation and the river linking projects, this provides a strong long-term visibility for the water infrastructure investment. The irrigation sector continues to present significant opportunities, with several states increasingly adopting piped irrigation systems to improve water efficiency and reduce transmission losses. In case of river linking projects, we are hopeful to see demand coming in from the Ken-Betwa project involving a total project cost of INR 44,000 crore and the Parbati-Kalisindh-Chambal link project between Madhya Pradesh and Rajasthan, which is also expected to commence shortly with project value being around INR 90,000 crore.

Speaker #3: Alongside the continued focus on AMRUT 2, irrigation, and the river-linking projects, this provides strong long-term visibility for water infrastructure investment. The irrigation sector continues to present significant opportunities, with several states increasingly adopting piped irrigation systems to improve water efficiency and reduce transmission losses.

Speaker #3: In case of river-linking projects, we are hopeful to see demand coming in from the Ken-Betwa project, involving a total project cost of ₹44,000 crores, and the Parbati-Kalisindh-Chambal link project between Madhya Pradesh and Rajasthan, which is also expected to commence shortly, with the project value being around ₹90,000 crores.

Speaker #3: There are many other such schemes upcoming, which are expected to benefit the ductile iron pipe industry in the long term. One such is the Urban Challenge Fund, with a total investment of ₹4 lakh crore to address the rapid urbanization of our country.

Madhav Kejriwal: There are many other such schemes upcoming which are expected to benefit the Ductile Iron pipe industry in the long term. One such is the Urban Infrastructure Development Fund with a total investment of INR 4 lakh crore to address the rapid urbanization of our country. Further momentum is expected from the recently approved Modernisation of Command Area Development and Water Management, or in short MCAD scheme, with an initial outlay of INR 1,300 crore for the modernization of irrigation water distribution systems through underground pressurized pipeline networks. Higher budgetary allocations and faster fund releases are expected to improve execution momentum, particularly in the second half of FY27. Our subsidiaries in the overseas markets such as UK, Europe, and the US have also been doing much better than our expectations, which is evident from our consolidated performance.

Speaker #3: Further momentum is expected from the recently approved Modernization of Command Area and Development and Water Management, or in short, MCAD scheme, with an initial outlay of ₹1,300 crores for the modernization of irrigation water distribution systems through underground pressurized pipeline networks.

Speaker #3: Higher budgetary allocations and faster fund releases are expected to improve execution momentum, particularly in the second half of FY27. Our subsidiaries and the overseas markets such as the UK, Europe, and the USA have also been doing much better than our expectations, which is evident from our consolidated performance.

Speaker #3: We continue to deepen our presence in these countries, alongside increasing our market in Africa and Southeast Asia. We are also strengthening our position across the water infrastructure value chain through the acquisition of TIS Services S.p.A., Italy. This has expanded our product portfolio and enabled us to offer integrated water transmission solutions, and also helps us further strengthen our global presence.

Madhav Kejriwal: We continue to deepen our presence in these countries alongside increasing the market in Africa and Southeast Asia. We are also strengthening our position across the water infrastructure value chain through the acquisition of T.I.S. Service S.P.A., Italy. This has expanded our product portfolio and enabled us to offer integrated water transmission solutions and also helps us further strengthen our global presence. During the quarter, TIS delivered EUR 10 million in revenue, representing a sequential growth of 18.4% over the previous quarter, with the EBITDA margins improving to the mid-teens. The business continues to perform in line with our expectations. We also expect our valve manufacturing facility in India to commence operations by the end of this financial year, supporting future growth and improving profitability.

Speaker #3: During the quarter, TIS delivered €10 million in revenue, representing a sequential growth of 18.4% over the previous quarter, with the EBITDA margins improving to the mid-teens. The business continues to perform in line with our expectations. We also expect our Wail manufacturing facility in India to commence operations by the end of this financial year, supporting future growth and improving profitability.

Speaker #3: As we mentioned in the last call, our target is to double revenue from the wild segment in the next four years, and we are on track to achieve the same.

Madhav Kejriwal: As we mentioned in the last call, our target is to double revenue from valve segment in the next four years, and we are on track to achieve the same. Taking a cue off the water infra space, as a part of our diversification strategy, we are entering the industrial paints and protective coatings business, leveraging our existing expertise in the paint manufacturing used on our pipes. We will initially focus on high-value industrial and protective coatings and scale this business through phased investments. We aim to establish a meaningful presence in this segment and target annual revenues of around INR 800 to 1,000 crore in the next five years. To support this growth, we plan to incur CapEx in a phased manner of around INR 250 to 300 crore.

Speaker #3: Taking a cue from the water interest space, as part of our diversification strategy, we are entering the industrial paints and protective coatings business. Leveraging our existing expertise in the paint manufacturing used on our pipes, we will initially focus on high-value industrial and protective coatings, and scale this business through phased investments.

Speaker #3: We aim to establish a meaningful presence in this segment and target annual revenues of around ₹800 to ₹1,000 crore in the next five years.

Speaker #3: To support this growth, we plan to incur Capex in a phased manner of around ₹250 to ₹300 crore. Despite the challenging operating environment, our balance sheet remains strong, providing the financial flexibility to pursue growth opportunities while also maintaining a prudent capital structure.

Madhav Kejriwal: Despite the challenging operating environment, our balance sheet remains strong, providing the financial flexibility to pursue growth opportunities while also maintaining a prudent capital structure. With that, I would like to now hand over the call to Mr. Rajesh Daga, CFO, who has recently taken over from Mr. Ashutosh Agarwal. Mr. Daga has been with us at Electrosteel since 1989. Throughout his tenure, he has held key positions across diverse functions, including finance, accounts, purchase, and sales. He will take you through the operational and financial performance of the quarter in greater detail. Thank you.

Speaker #3: With that, I would now like to hand over the call to Mr. Rajesh Daga, CFO, who has recently taken over from Mr. Ashutosh Agarwal.

Speaker #3: Mr. Daga has been with us at Electrosteel since 1989. Throughout his tenure, he has held positions across diverse functions, including finance, accounts, purchase, and sales.

Speaker #3: He will take you through the operational and financial performance of the quarter in greater detail. Thank you.

Speaker #2: Thank you, Madhavji. Good afternoon, everyone, and thank you for joining us. It is a privilege to address you for the first time as the CFO of the company.

Rajesh Daga: Thank you, Madhavji. Good afternoon, everyone, and thank you for joining us. It is a privilege to address you for the first time as the CFO of the company. Let me begin by introducing myself. I am Rajesh Daga, a qualified chartered accountant. I joined Electrosteel Castings in 1989, immediately after qualifying as a CA, and it has been my privilege to be associated with the company over three decades. Over the years, I have had the opportunity to serve the organization in a variety of roles across different functions, making this a truly enriching and rewarding journey. Before taking over as a CFO, I headed the company's domestic marketing function for the past 25 years, which gave me a valuable insight into our business, customer, and industry.

Speaker #2: Let me begin by introducing myself. I am Rajesh Daga, a qualified Chartered Accountant. I joined Electrosteel Castings in 1989, immediately after qualifying as a CA.

Speaker #2: It has been my privilege to be associated with the company for over three decades. Over the years, I have had the opportunity to serve the organization in a variety of roles across different functions, making this a truly enriching and rewarding journey.

Speaker #2: Before taking over as CFO, I handled the company's domestic marketing function for the past 25 years, which gave me valuable insight into our business, customers, and industry.

Speaker #2: Before I proceed further, I would like to acknowledge the outstanding contribution of my predecessor, Mr. Ashutosh Agarwal, whose financial leadership, discipline, and strategic guidance have played a significant role in strengthening the company's financial position and governance standards.

Rajesh Daga: Before I proceed further, I would like to acknowledge the outstanding contribution of my predecessor, Mr. Ashutosh Agarwal, whose financial leadership, discipline, and strategic guidance have played a significant role in strengthening the company's financial position and governance standard. With this, I would now like you to take you all through the performance of Q1 of FY2026-2027. Sales volume of DI pipes and fittings and CI pipes during Q1 stood at 1.20 lakh tons, down by 27% year-over-year. The decline in volumes is going to slow down primarily in the domestic market. This quarter, volumes in export market too was impacted due to Middle East tensions. At consolidated level, gross debt and net debt as on 30 June 2026 stood at INR 165.8 crore and INR 876 crore respectively.

Speaker #2: With this, I would now like you to take you all the through the performance of Q1 of 20 of FY26-27. Period's volume of DI pipes and printings and CI pipes during the first quarter is stood at 1.20 lakh ton, down by 27% year to year, the decline in volumes is going to slow down primarily in the domestic market.

Speaker #2: This quarter, volumes in the export market too were impacted due to Middle East tensions. At the consolidated level, gross debt and net debt as on 30th June 2026 stood at ₹1,658 crore.

Speaker #2: And Rs. 876 crore, respectively. During the last financial year, the net debt had reduced by nearly Rs. 1,100 crore, and we are focusing on optimizing utilization of the funds.

Rajesh Daga: During the last financial year, the net debt had reduced by nearly INR 1,100 crore, and we are focusing on optimal utilization of the funds. I will now take you through the consolidated results of Q1 FY2026/2027. Total income stood at INR 1,465 crore. Sales volume was lower year-on-year, primarily due to reduced sales volumes. EBITDA stood at INR 139 crore with an EBITDA margin of 9.5%. PAT stood at INR 48.4 crore. Moving to the standalone results for Q1 FY2026/2027, total income stood at INR 1,119 crore, lower on year by 21%, mainly due to lower sales volumes. EBITDA, including other income, stood at INR 70.60 crore with EBITDA margin of 6.3%. PAT stood at INR 5.9 crore.

Speaker #2: I will now take you to the through the consolidated results of Q1 of FY26-27. Total income is stood at rupees 1465 crore. Sales volume was lower on year on year primarily due to reduced sales volumes.

Speaker #2: EBITDA stood at ₹139 crore, with an EBITDA margin of 9.5%. PAT stood at ₹48.4 crore. Moving to the standalone results for Q1 FY26-27, total income stood at ₹1,119 crore.

Speaker #2: Lower on year-on-year by 21%, mainly due to lower sales volumes. EBITDA, including other income, stood at ₹70.60 crore, with an EBITDA margin of 6.3%.

Speaker #2: PET stood at ₹5.9 crore. While the past few quarters remained challenging due to softer domestic demand, we believe that with the government's positive steps towards the water infrastructure space, the long-term outlook for the DI pipe sector continues to remain strong.

Rajesh Daga: While past few quarters remain challenging due to softer domestic demand, we believe with the government positive steps towards the water infrastructure space, the long-term outlook for DI pipe sector continues to remain strong. Central government has allocated INR 67,670 crore towards JJM in the Union budget for FY2027. Out of this, approximately INR 10,344 crore has already been sanctioned to various states during the current financial year till date, compared to a meager INR 1,560 crore released under JJM in previous financial year. Going forward, we remain focused on operational efficiency, strengthening the balance sheet, maintaining financial discipline, and remaining well-positioned to benefit from a recovery in the domestic market. With this, I would now like to open the floor for the question and answer session. Thank you.

Speaker #2: The Central Government has allocated ₹67,670 crore towards JDM in the Union Budget for FY27. Out of this, approximately ₹10,344 crore has already been sanctioned to various states during the current financial year till date.

Speaker #2: Compared to a meager ₹1.56 crore released under JDM in the previous financial year. Going forward, we remain focused on operational efficiency, strengthening the balance sheet, maintaining financial discipline, and remaining well positioned to benefit from a recovery in the domestic market.

Speaker #2: With this, I would now like to open the floor for the question and answer session. Thank you.

Speaker #1: Thank you, 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, 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. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Prajesh Shirunkar with ICICI Securities. Please go ahead.

Operator: Thank you, 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. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Prajesh Shirunkar with ICICI Securities. Please go ahead.

Speaker #1: If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use a handset while asking the question.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Swatesh Varumkar with ICAC Securities.

Speaker #1: Please go ahead.

Prajesh Shirunkar: Hello. Am I audible?

Speaker #2: Hello.

Speaker #1: Yes, sir.

Operator 2: Yes, sir.

Operator: Yes, sir.

Speaker #2: Yes, thank you for the opportunity. Sir, my first question is regarding the JDM Mission 2.0. Recently, around ₹6,000 crore have been sanctioned.

Prajesh Shirunkar: Yes. Thank you for the opportunity. Sir, my first question is regarding the Jal Jeevan Mission 2.0. Recently, around INR 6,000 crore have been sanctioned. How much of it is translating into orders for us?

Speaker #2: So, how much of it is translating into orders for us?

Speaker #3: So sir, the sanctioned amount is around ₹10,000 crore, ₹6,000 crore is what has been released. So the rest of the ₹4,000 crore will also be released soon enough. We are seeing an increase in sentiment in the markets, with customers approaching for order booking more and more.

Rajesh Daga: Since sanctioned amount is around INR 10,000 crore, INR 6,000 is what is released, the rest of the INR 4,000 is also released soon enough. We are seeing an increase in the sentiment in the market with customers approaching for order booking more and more. These are going largely till now towards money spent by states already to the customers. It's difficult to establish exactly what quantity has gone into order book directly to us. In the next month or two, we are finding that speed of order booking is going to pick up substantially.

Speaker #3: These are going largely, till now, towards money spent by states already, to the customers. So it's difficult to establish exactly what quantity has gone into the order book directly to us.

Speaker #3: But in the next month or two, we will find—or we are finding—that the speed of order booking is going to pick up substantially.

Speaker #2: Okay, thank you, sir. Our second question is about the imports. Sorry, the Saudi government has put duties on DI pipe imports. So, is there any impact on us?

Prajesh Shirunkar: Okay. Thank you, sir. Our second question is about the imports. The Saudi government has put duties on DI pipe imports, is there any impact on us?

Speaker #3: Sir, the total sales of electrostale to Saudi Arabia was to a total of it's about 2 to 3% of our sales. So that is a quantity that can be diverted to other markets.

Rajesh Daga: Sir, the total sales of Electrosteel to Saudi Arabia was to a total of, it's about 2% to 3% of our sales. That is a quantity that can be diverted to other markets pretty easily. It's not going to be such a problem, if you see the details, Electrosteel has had an anti-dumping of 17%, and other manufacturers from India have had a dumping of 30%. In fact, we don't see that a major chunk of our export to Saudi will go down because of this, and the small quantity that will also be very easily diverted to other GCC countries and Africa.

Speaker #3: Pretty easily. It's not—it's not going to be such a problem. And if you see the details, Electrosteel has had an anti-dumping of 17%, and other manufacturers from India have had a dumping of 30%.

Speaker #3: So, in fact, you know, we don't see that a major chunk of our exports to Saudi will go down because of this. And the small quantity that will, also, will be very easily diverted to other GCC countries and Africa.

Prajesh Shirunkar: Can you put it into figures, like how much you would be impacted?

Speaker #2: Can you put it into figures, like how much you would be impacted?

Speaker #3: Sir, there is no fixed figure for sales year-on-year to Saudi Arabia. As I mentioned, it was approximately 2% to 3% of our total sales.

Rajesh Daga: Sir, there is no fixed figure of sale year on year to Saudi Arabia. As I mentioned, it was approximately 2% to 3% of our total sales. This quantity, I'm assuming, will be down to 1.5%. The 1% to 1.5% that we will lose out, that we can very easily divert to other markets.

Speaker #3: This quantity I'm assuming will be down to one and a half percent. So the one to one and a half percent that we will lose out, that we can very easily divert to other markets.

Speaker #2: Okay. Okay. Thank you, sir.

Prajesh Shirunkar: Okay. Thank you, sir.

Speaker #3: Thank you.

Rajesh Daga: Thank you.

Speaker #1: The next question comes from the line of Anand Darshan with 361 Capital Market. Please go ahead.

Operator 2: The next question comes from the line of Anand Darshan with 361 Capital Market. Please go ahead.

Operator: The next question comes from the line of Anand Darshan with 361 Capital Market. Please go ahead.

Anand Darshan: Good evening, sir, and thanks for the opportunity. Sir, I just want to know what is our estimated DIP volumes for this year?

Speaker #4: Good evening, sir. Thank you for the opportunity. Sir, I just want to know, what is your estimated DI pipes volume for this year?

Speaker #3: So, sir, we had asked while indicating the volume of, I think, 650,000 to 700,000 tons. But due to the slower initial release of JGM, we are expecting to reach a quantity of around 675,000 to—sorry—575,000 tons.

Madhav Kejriwal: Sir, we had erstwhile indicated the volume of, I think, 650,000 to 700,000 tons. Due to the slower initial release of JJM, we are expecting to reach a quantity of around 575,000 tons.

Anand Darshan: 575,000 tons for the year.

Madhav Kejriwal: Yeah. Yes, please.

Speaker #3: Yes, please.

Speaker #4: Right. Sir, what were the export volumes we had in FY26, and what are we expecting in FY27, sir? And which region are we focusing on there?

Anand Darshan: Right. Sir, what is the export volumes we had in FY2026, and what are we expecting in 2027, sir? Which region are we focusing on there?

Speaker #3: So far, we've done around 21,000 tons of export. We are hoping that for the current quarter, yes, and we are expecting that at the end of the year, we will be exporting around 22 to 25 percent of our total volumes.

Madhav Kejriwal: So far, we've done around 21,000 tons export. We are hoping that.

Anand Darshan: For the current quarter?

Madhav Kejriwal: For the current quarter, yes. We are expecting that at the end of the year, we will be exporting around between 22% to 25% of our total volumes.

Speaker #4: Sure. Okay, sir. And which region are we focusing on there?

Anand Darshan: Sure. Okay, sir. Which region are we focusing there?

Speaker #3: So, Europe and the UK have been our strong markets ever since we started exporting. Around 60% to 70% of our exports are focused on the Western markets.

Madhav Kejriwal: Europe, the UK have been our strong markets ever since we started exporting. Around 60% to 70% of our exports are focused on the Western markets. The remaining 40% is to the Middle East, Africa, and we have recently also started expanding into the Southeast Asian markets.

Speaker #3: The remaining 40% is to the Middle East, Africa, and we've recently also started expanding into the Southeast Asian markets.

Speaker #4: Sure. Right. Sir, can you give me the breakup of bigger involvement for the quarter, sir? We are only operating at 50% replacement, estimated.

Anand Darshan: Sure. Right. Sir, can you give me the break up of pig iron volumes for the quarter, sir? We are only operating at 50% utilization estimated, still we report an 8 KG per EBITDA. What led to this improvement, sir?

Speaker #4: So still, we report an 8 kg per addendum. So, what led to this improvement, sir?

Speaker #3: Sir, as I mentioned in the opening speech, owing to the situation of demand, you know, there's a famous saying: 'When the going gets tough, the tough get going.'

Madhav Kejriwal: Sir, I have mentioned in the opening speech, owing to the situation of demand, there is a famous saying, when the going gets hard, the hard get going. We decided that we need to roll up our sleeves and figure out how to make ends meet. The team has taken up great initiatives to cut costs, to moderate inventory. This is a cumulative effort of the entire Electrosteel team to keep the head above the water. How I see this helping us in the future is that we are going to come out of this situation even stronger to maximize on the opportunity ahead of us for the next two to three years.

Speaker #3: We decided that we need to roll up our sleeves and figure out how to make ends meet. The team has taken up great initiatives to cut costs and to moderate inventory.

Speaker #3: So this is the cumulative effort of the entire Electrosteel team to, you know, keep their head above water. And how I see this helping us in the future is that we are going to come out of this situation even stronger.

Speaker #3: To maximize on the opportunity ahead of us for the next two to three years.

Speaker #4: Right. Right. Sir, and can you give me the breakup of bigger involvements for the quarter, sir?

Anand Darshan: Right. Thanks. Sir, can you give me the break up of pig iron volumes for the quarter, sir?

Speaker #3: If I'm not mistaken, sir, Pegaion was approximately 45,000 tons.

Madhav Kejriwal: If I am not mistaken, sir, pig iron was approximately 45,000 tons.

Speaker #4: 45,000 tons. Okay, sir. Sir, and my last question regarding that wall business. So we are planning to shift that production to India. So, with lean manufacturing cost systems in India, what growth are we expecting from FY28, sir?

Anand Darshan: 45,000 tons. Okay, sir. My last question regarding that valve business. We are planning to shift that production to India, so it lean manufacturing cost system in India. What growth are we expecting from FY28, sir?

Speaker #3: Sir, I wouldn't call it 'shifting of manufacturing to India.' There are certain high-value products that are being made in Italy as of today, which will continue to be made there.

Madhav Kejriwal: Sir, I wouldn't call it shifting of manufacturing to India. There are certain high-value products that are being made in Italy as on date, which will continue to be made there. We will shift a certain percentage and then double down on the total production volumes. I would say going forward, we are looking at the Asian subcontinent to contribute to around 40% and 45% of the total business. The Western countries will still contribute to 55% maybe even 60%. This is the outlook that we have over the next three to four years, please.

Speaker #3: We will shift a certain percentage and then double down on the total production volumes. So, I would say going forward, we are looking at the Asian subcontinent to contribute to around 40–45% of the total business.

Speaker #3: And the Western countries will still contribute 50, 55, 55 to maybe even 60 percent. This is the outlook that we have over the next three to four years, please.

Anand Darshan: Done, sir. Thanks for the clarification. Yeah.

Speaker #4: That's done, sir. Thank you, sir. Next question, please. Yeah.

Anand Darshan: Done, sir. Thanks for the clarification. Yeah.

Speaker #3: Thank you.

Madhav Kejriwal: Thank you.

Speaker #1: Thank you. The next question comes from the line of Nashiket Kale. Please go ahead. Nashiket, your line has been unmuted. Please go ahead with your question.

Operator 2: Thank you. The next question comes from the line of Nachiket Kalene. Please go ahead. Namaste, Nachiket. Your line has been unmuted. Please go ahead with your question.

Operator: Thank you. The next question comes from the line of Nachiket Kalene. Please go ahead. Namaste, Nachiket. Your line has been unmuted. Please go ahead with your question.

Speaker #5: Yes. Hi, good afternoon, sir. The new presentation is very impactful, right? For the operator presentation. My question is on the Band Industrial Paint expansion.

Nachiket Kalene: Yes. Hi, good afternoon, sir. Your new presentation is very impactful. Thanks for the updated presentation. My question is on the planned industrial paints expansion. We are almost increasing our capacity 4x. What is the status, and could you tell some timeline on it?

[Analyst]: Yes. Hi, good afternoon, sir. Your new presentation is very impactful. Thanks for the updated presentation. My question is on the planned industrial paints expansion. We are almost increasing our capacity 4x. What is the status, and could you tell some timeline on it?

Speaker #5: We are almost increasing our capacity for exports. So, what is the status, and could you tell us the timeline on it?

Speaker #3: So, sir, the initial investment will be to the tune of ₹100 crores, wherein we will add capacity by 17,000 kiloliters. We already have a small facility on which we will have to do a brownfield expansion.

Madhav Kejriwal: Sir, initial investment will be to the tune of INR 100 crores, wherein we will add capacity by 17,000 kiloliters. We already have a small facility on which we will have to do a brownfield expansion in investment gold. That allows us a quicker return on investment, and it will also allow us to better learn the nitty-gritties of the business. We are very certain about the demand of the products that we are tackling. We are looking at getting into, as mentioned, largely protective coatings for industrial purposes and also structural railways, et cetera.

Speaker #3: In investing all, that allows us a quicker return on investment, and it will also allow us to better learn the nitty-gritty of the business.

Speaker #3: We are very certain about the demand for the products that we are tackling. We are looking at getting into, as mentioned, largely protective coatings for industrial purposes, as well as structural railways, etc.

Speaker #3: So that's the current plan. The long-term vision is to take it up to around ₹1,000 crore in revenue, with an outlay of close to ₹300 crore.

Nachiket Kalene: Right.

[Analyst]: Right.

Madhav Kejriwal: That's the current plan. The long-term vision is to take it up to around INR 1,000 crores in revenue with an outlay of close to INR 300 crores.

Speaker #3: Capital outlay of 300.

Nachiket Kalene: Capital outlay. Yeah, got it. Could you tell some timeline on it as to how many years that would take?

[Analyst]: Capital outlay. Yeah, got it. Could you tell some timeline on it as to how many years that would take?

Speaker #5: Yeah, got it. Could you tell me some timeline on it, like how many years that could take?

Madhav Kejriwal: Between four to five years, please.

Speaker #3: Between four to five years, please.

Speaker #5: Okay.

Nachiket Kalene: Okay. Phase-wise, say first two, three years, what could be the first tranche which comes online?

[Analyst]: Okay. Phase-wise, say first two, three years, what could be the first tranche which comes online?

Speaker #3: And like, phase-wise, let's say the first two or three years, what could be the first tranche which comes online? So, sir, you can say that the first two years will be a little slower.

Madhav Kejriwal: sir, you can say that the first two years will be a little slower. Maybe we go up to around INR 250 to 300 crores in the first two years. Post which we will see this number practically doubling every year. It will go from INR 300 to between 500 to 600 crores, INR 600 to between 800 and 1,000 crores.

Speaker #3: So, maybe we go up to around ₹250 to ₹300 crore in the first two years, post which we will see this number practically doubling every year.

Speaker #3: So, it will go from 300 to between 500 and 600, and then from 600 to between 800 and 1,000.

Speaker #5: Okay.

Nachiket Kalene: Okay, cool.

[Analyst]: Okay, cool.

Speaker #3: So that's where the four-to-five-year timeline comes in. The first couple of years will be a little slow, sir. You know, you order the equipment, it comes, and you start moving.

Madhav Kejriwal: That's why the 4 to 5 year timeline. The first couple of years will be a little slower.

Nachiket Kalene: Yeah.

[Analyst]: Yeah.

Madhav Kejriwal: You order the equipment, it comes, you start moving.

Speaker #3: All these things, leaving period, basically.

Nachiket Kalene: Correct.

[Analyst]: Correct.

Madhav Kejriwal: All these things take a leading period, basically.

Speaker #5: Yeah, I'm just trying to understand—when would be the first capacity expansion, sorry, I mean the first commercial production from the capacity expansion?

Nachiket Kalene: Yeah. I'm just trying to understand, when would be the first commercial production from the capacity expansion?

[Analyst]: Yeah. I'm just trying to understand, when would be the first commercial production from the capacity expansion?

Speaker #3: So commercial production post, I think quarter one next S5, we can you start seeing the impact of the of the diversification in the books.

Madhav Kejriwal: Commercial production post, I think Q1 next FY, you start seeing the impact of the diversification in the books, albeit small, but you'll start seeing that.

Speaker #3: Albeit small, you start seeing it.

Speaker #5: Oh, so as soon as next Q.

Nachiket Kalene: Okay.

[Analyst]: Okay.

Madhav Kejriwal: As soon as next Q.

Speaker #3: Q1 next year. Yes, please.

Nachiket Kalene: Q1 next year. Yes, please.

[Analyst]: Q1 next year. Yes, please.

Speaker #5: Okay, got it. Thank you, sir. I'll get back.

Madhav Kejriwal: Okay. Got it.

Nachiket Kalene: Thank you, sir. I'll get back.

[Analyst]: Thank you, sir. I'll get back.

Speaker #3: Thank you.

Madhav Kejriwal: Thank you.

Speaker #1: Thank you. The next question comes from the line of Sajan V. with Green Portfolio. Please go ahead.

Nachiket Kalene: Thank you.

[Analyst]: Thank you.

Operator 2: The next question comes from the line of Sajjan V. with Green Portfolio, please go ahead.

Operator: The next question comes from the line of Sajjan Vats. with Green Portfolio, please go ahead.

Speaker #5: Yeah, hi. Am I audible?

Sajjan Vats: Yeah. Hi, am I audible?

Speaker #3: Yes, please.

Madhav Kejriwal: Yes, please.

Speaker #5: Yeah, it's Sajan Vats, by the way. My first question is regarding the DI-type pluralization. So, sir, what was the pertinent realization in Q1 FY27, and if you can tell me about the QOQ and YoY trends also?

Sajjan Vats: Yeah. It's Sajjan Vats, by the way. Yeah, my first question is regarding the DI pipe realization. What was the current realization in Q1 FY2027, and if you can tell me about the QOQ and YOY trends also.

Speaker #3: So, for Q4, these are net realizations of around 50,500 for Q4. And in Q1, this is around 55,000, please. On revenue, this will be around—you can say—around 62,000 per tonne.

Madhav Kejriwal: FY Q4, these are net realizations of around INR 50,500 for Q4. In Q1 it is around INR 55,000, please. On revenue, this would be around, you can say around INR 62,000 per ton.

Speaker #5: So, the patterns regarding the DI-type realizations are firming. They are bottoming—can we say they are bottoming?

Sajjan Vats: The patterns regarding the DI pipes realizations are firming. Can we say they are bottoming?

Speaker #3: I'm sorry, I couldn't hear you very clearly. The pattern?

Madhav Kejriwal: I'm sorry, I couldn't hear you very clearly. The pattern?

Speaker #5: The trend—what do you anticipate regarding the DI types' prices?

Sajjan Vats: The trend. What you anticipate regarding the DI pipes prices.

Speaker #3: Sir, of course. As you might have seen, the last one to one and a half years has been extremely muted, especially the last particular financial year, which was probably rock bottom for the industry.

Madhav Kejriwal: Sir, of course, as you might have seen the last one and a half years has been extremely muted, especially the last particular financial year was probably rock bottom for the industry.

Speaker #3: Since it's been there, since '94, I think—at least from my understanding—it is the worst year for ductile iron I've seen in India.

Madhav Kejriwal: Since it has been there since 1994, I think at least from my understanding, is the worst year Ductile Iron has seen in India. Most definitely this is rock bottom.

Speaker #3: So, most definitely, this is rock bottom.

Speaker #5: Yeah, okay. Understood, sir. The second question is regarding the order book. So basically, I just want to know, what is the current executable order book we have?

Sajjan Vats: Yeah. Okay. Understood, sir. The second question is regarding the order book. Basically I just want to know, what is the current executable order book we have, and which states are the most active in tendering under JJM 2.0?

Speaker #5: And which states are the most active in tendering under JJM 2.0?

Speaker #3: So, we have a total order book of around 3 lakh tons, which works out to around five months. And, yeah, so JJM—this order book—JJM would be around close to 3%.

Madhav Kejriwal: We have a total order book of around 3 lakh tons, which works out to around 5 months.

Sajjan Vats: Okay.

Madhav Kejriwal: Yeah. This order book, JJM would be around close to 3%.

Sajjan Vats: Which states are the most active? Which states are showing attraction?

Speaker #5: And which states are the most active? And which states are showing a good reaction?

Sajjan Vats: Which states are the most active? Which states are showing attraction?

Speaker #3: Sir, state-wise, Orissa and Andhra Pradesh are the ones which are doing well. Kerala and Tamil Nadu are also there. UP and Rajasthan now, with the JJM, will also pick up reasonably well.

Madhav Kejriwal: Sir, state-wise, Odisha, Andhra Pradesh are the ones which are doing well. Kerala and Tamil Nadu are also there. UP and Rajasthan now with the JJM 2 will also pick up reasonably well.

Speaker #5: Okay. And, sir, we expect that H2FI to the fund release would be much better. So, what gives the—

Sajjan Vats: Okay. Sir, we expect that H2 FY2027, the fund release will be much better.

Speaker #3: I'm sorry? Hello?

Madhav Kejriwal: I'm sorry? Hello?

Speaker #1: Yes, sir. The current participant has disconnected. We'll move on to the next question. It's from the line of Dhruv Jolekar with MNCL. Please go ahead.

Operator 2: Yes, sir. The current participant has disconnected. We'll move on to the next question. It's from the line of Dhruv Jolakar with MNCL. Please go ahead.

Operator: Yes, sir. The current participant has disconnected. We'll move on to the next question. It's from the line of Dhruv Joglekar with MNCL. Please go ahead.

Speaker #5: Hi. Thanks for the question. Am I audible?

Dhruv Jolakar: Hi, thanks. I have a question. Am I audible?

Dhruv Joglekar: Hi, thanks. I have a question. Am I audible?

Speaker #3: Yes, please. Yeah.

Madhav Kejriwal: Yes, please.

Dhruv Jolakar: Hello? Yeah. A couple of clarifications actually on the volume side. This financial year in FY2026, we had a volume of roughly 5.5 million tons. We are expecting the next year also to be in similar lines. Earlier the guidance was about 7. I think in the initial comments we mentioned 5.5. In spite of the fact that the JJM spend is going up from INR 1,500 crore to almost INR 70,000 crore. Let's assume 50% of it is actually consumed out of the INR 70,000 crore. Even then it is a significant rise. I'm seeing something on this, just wanted to understand that.

Dhruv Joglekar: Hello? Yeah. A couple of clarifications actually on the volume side. This financial year in FY2026, we had a volume of roughly 5.5 million tons. We are expecting the next year also to be in similar lines. Earlier the guidance was about 7. I think in the initial comments we mentioned 5.5. In spite of the fact that the JJM spend is going up from INR 1,500 crore to almost INR 70,000 crore. Let's assume 50% of it is actually consumed out of the INR 70,000 crore. Even then it is a significant rise. I'm seeing something on this, just wanted to understand that.

Speaker #5: So a couple of clarifications, actually, on the volume side. So, this year—I mean, this financial year, in FY26—we had a volume of roughly 5.5 billion tonnes.

Speaker #5: And we are expecting next year also to be on similar lines. Earlier, we mentioned about 7; now, I think in the initial comments we meant 5.5.

Speaker #5: In spite of the fact that the JJM spend is going up from ₹1,500 crore to almost ₹70,000 crore. So let's assume 50% of it is actually consumed out of the ₹70,000 crore.

Speaker #5: Even then, it is a significant rise. So, what is it actually? Am I missing something on this initial understanding?

Speaker #3: So, sir, the reason for the slightly muted numbers is because the first half is going substantially slower; the growth will really come in in H2.

Madhav Kejriwal: Sir, the reason for the slightly muted numbers is because the H1 is substantially slower. The growth will really come in in H2. Last year it was kind of the reverse where H1 still had some leftover demand from JJM, which the states were mostly carrying. Closer to the beginning of H2, they also ran out of steam. That is one of the reasons. I think going forward, we are expecting that it takes a little time to restart and get back onto the production levels at peak. It takes around a month or two for that to happen as well. That will give us a bit of a delay. Just to give you reference, in Q1 last financial year, we made around 1.8 lakh tons, against which this year we've got to around 110,000 tons. This is causing a bit of delay.

Speaker #3: Last year, it was kind of the reverse, where H1 still had some leftover demand from JJM, which the states were mostly carrying. Then, closer to the beginning of H2, they also ran out of steam.

Speaker #3: That is one of the reasons. And I think, going forward, we are expecting that it takes a little time to restart and get back up to the production levels. At peak, it takes around a month or two for that to happen as well.

Speaker #3: So that will give us a bit of a delay. Just to give you a reference, in Q1 last financial year, we made around 1.8 lakh tonnes.

Speaker #3: Against which, this year, we've got to around 1 lakh to 1 lakh 10 thousand tons, so this is causing a bit of a delay.

Speaker #1: Okay. So is it fair

Dhruv Jolakar: Okay. Is it fair to say that if the INR 70,000 crore gets consumed in this year, the coming Q4 and the coming Q1 will be significantly boosted?

Dhruv Joglekar: Okay. Is it fair to say that if the INR 70,000 crore gets consumed in this year, the coming Q4 and the coming Q1 will be significantly boosted?

Speaker #5: to say that if the 70,000 gets consumed in this year, then Q4 and Q1 of coming the coming Q4 and the coming Q1, will be significant a boost?

Speaker #3: Absolutely.

Madhav Kejriwal: Absolutely.

Speaker #5: Okay.

Dhruv Jolakar: Okay.

Dhruv Joglekar: Okay.

Speaker #1: Yes, Dhruv. Does that answer your question?

Operator 2: Yes, Dhruv, does that answer your question?

Operator: Yes, Dhruv, does that answer your question?

Speaker #5: Yeah. Yeah. Thanks.

Dhruv Jolakar: Yeah. Thanks.

Dhruv Joglekar: Yeah. Thanks.

Speaker #1: Thank you. The next question comes from the line of Charachit Malu with Genuity Capital. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Charuchit Maloo with J&T Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Charuchit Maloo with J&T Capital. Please go ahead.

Speaker #5: Hi. Thanks a lot for the opportunity. So, just a few quick questions. So, what kind of revenue, then, was there in Q1 FY27?

Charuchit Maloo: Hi. Thanks a lot for the opportunity. Just a few quick questions. Firstly, on the TIS Services, what kind of revenue and PAT was there in Q1 FY2027?

Speaker #3: Sorry. What kind of revenue?

Madhav Kejriwal: Sorry, what kind of revenue?

Speaker #5: A bidder and tag were there from the asking facility that you acquired?

Charuchit Maloo: EBITDA and PAT was there from the upstream facility earlier acquired.

Speaker #3: So, the revenue from TIS was close to €10 million.

Madhav Kejriwal: The revenue from TIS was close to EUR 10 million.

Speaker #5: Okay.

Charuchit Maloo: Okay.

Speaker #3: And the bidder margin was around 13%.

Madhav Kejriwal: The EBITDA margin was around 13%.

Speaker #5: Uh-huh.

Speaker #3: For the first quarter.

Madhav Kejriwal: For Q1.

Speaker #5: And the tag level, sir?

Charuchit Maloo: The PAT level was?

Madhav Kejriwal: PAT was around 7%.

Speaker #3: That was around around 7%.

Speaker #5: Sorry?

Charuchit Maloo: Sorry?

Speaker #3: Just give us a quick second. That would be close to around 7%. Yeah.

Madhav Kejriwal: Just give us a quick second.

Gaurav Somani: PAT would be close to around 7%. Yeah.

Speaker #5: 7%. And going forward in FY27 and FY28, how much are we expecting?

Charuchit Maloo: 7%. Going forward in FY28 and FY29, how much are we expecting?

Speaker #3: So, by the end of this financial year, we are expecting, as mentioned, it was going to be 20% above last year's average of around 38 million.

Madhav Kejriwal: By the end of this financial year, we are expecting, as mentioned, it was going to be 20% above last year average of around INR 38 million.

Charuchit Maloo: Okay.

Madhav Kejriwal: We hopefully will reach a number of INR 42 to 45 million in revenue with a EBITDA margin of similarly the 14% to 15% level with a PAT of 8% or so.

Speaker #3: So, we should hopefully reach a number of 42 to 45 million in revenue, with a bidder margin of, similarly, the 14–15% level, with the PAT at 8% or so.

Madhav Kejriwal: We hopefully will reach a number of INR 42 to 45 million in revenue with a EBITDA margin of similarly the 14% to 15% level with a PAT of 8% or so.

Speaker #5: Okay. And also, on the bid, you mentioned any plans for the regional going forward?

Charuchit Maloo: Got you. Also on the debt repayment, any plans for the debt repayment going forward?

Speaker #3: Any plans for?

Madhav Kejriwal: Any plans for?

Speaker #5: Bid repayment going forward in FY27?

Charuchit Maloo: Debt repayment going forward in FY27.

Speaker #3: Thank you. So, we have our term debt right now standing at around ₹340 crores, which will eventually go down to around ₹230 crores with the half.

Gaurav Somani: We have our term debt right now stands at around INR 340 crore, which will eventually go down to around INR 230 crore with the scheduled repayments that we have. As we mentioned initially in the call, last year we had seen substantial debt reduction of around INR 1,100 crore. The debt reduction is a continuous process, which is happening. Working capital debt will depend a lot on the working capital movements.

Speaker #3: And as we mentioned initially in the call, last year we had seen substantial debt reduction of around ₹1,100 crores. So, the debt reduction is a continuous process which is happening.

Speaker #3: Working capital debt will, you know, depend a lot on the working capital movements—the business volume. On the business volume, right.

Madhav Kejriwal: The business volume.

Gaurav Somani: On the business volume, right.

Speaker #5: Got it, sir. Okay, that's it from my side. Thanks a lot.

Charuchit Maloo: Got it, sir. Okay. That's it from my side, sir. Thank you very much.

Speaker #1: Thank you. The next question comes from the line of Arun Chulani with First Water Capital. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Arun Chulani with FirstWater Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Arun Chulani with FirstWater Capital. Please go ahead.

Arun Chulani: Thank you for the opportunity. Listening to the other DI players, they were not that excited even going forward. They said they're either pausing or they're looking to export. They weren't very gung-ho with the actual states or the government actually tossing play, given the situation on, let's say, energy inflation and having to counter that. What are your thoughts there? Is it just finally a wait and see, or are you actually seeing on the ground traction by states or the government?

Speaker #5: Thank you for the opportunity. So, looking at the other DI players, they were not that excited, even going forward. They said they are either pausing or they're looking to export.

Speaker #5: So they weren't very gung-ho with the actual state or the government actually pressing play, given the situation on, let's say, energy inflation and having to counter that.

Speaker #5: What are your thoughts there? Is it just binary—a wait and see—or are you actually seeing on-the-ground traction by states or the government?

Madhav Kejriwal: I'll give you two reasons that back up the thoughts that we have. First and foremost, within Q1 itself, we've seen 5X the capital outlay from the center as opposed to what was there in, say, the last 10 days of the previous entire financial year. Being very frank, the election of 2029 is going to be very critical for the center, and they will have to finish this before that. I'm fairly certain that the targets that they have to complete this project, I think end FY28, they will put all efforts to make it happen, and this should be a priority exercise for them.

Speaker #3: I'll give you two reasons that back up the thoughts that we have. First and foremost, within the first quarter itself, we've seen 5x the capital outlay from the Center.

Speaker #3: As opposed to what was there in, say, the last ten days of the previous entire financial year. Being very frank, the election for the center.

Speaker #3: And they will have to finish this before that. So I'm fairly certain that the targets that they have to complete this project, I think, end FY28. They will put all efforts to make it happen.

Speaker #3: And this should be a priority exercise for them.

Speaker #5: Got it. Thank you. But nothing as yet. I mean, you said in the last 10 days there is 5x the capital, but what do you mean by that?

Arun Chulani: Got it. Thank you. Nothing as yet. You said the last 10 days there was 5X the capital, but what do you mean by that? You mean 5X the orders or 5X the payments? Part of the issue was they weren't paying, but are you seeing that they're paying now?

Speaker #5: You mean 5x the orders or 5x the payments? Because part of the issue was they weren't paying, but are you seeing that they're paying now?

Madhav Kejriwal: I'll clarify what I meant. What I meant was the amount of money they have spent in the entirety of last year, and that too, they spent that only in the last 10 days of the last year. They have already spent 5 or 6X of it this financial year. We are just in the third, fourth month.

Speaker #3: I'll just clarify what I meant. What I meant was the amount of money they spent in the entirety of last year, and that too, they spent that only in the last 10 days of the year.

Speaker #3: They have already spent 5 or 6 times that amount this financial year, and we are just in the third or fourth month. So, I can see the wheels churning faster and faster.

Arun Chulani: Got it.

Madhav Kejriwal: I can see the wheels churning faster and faster and faster.

Speaker #5: Got it. Okay. Thank you.

Arun Chulani: Got it. Okay. Thank you.

Speaker #3: Thank you.

Operator 2: Thank you. Thank you. The next question comes from the line of Kunal Gandhi with Yashwi Securities. Please go ahead. Kunal Gandhi.

Operator: Thank you. Thank you. The next question comes from the line of Kunal Gandhi with Yashwi Securities. Please go ahead. Kunal Gandhi.

Speaker #1: Thank you. The next question comes from the line of Kunal Gandhi with Ashvi Securities. Please go ahead, Kunal.

Kunal Gandhi: Yeah. I would like to ask. Yeah, hello.

Speaker #5: Yeah, so I would like to ask—hello? Yeah. So my question is: regarding the ₹14,000 crore orders already sanctioned by the government.

Madhav Kejriwal: Yeah.

Kunal Gandhi: My question would pertain to the INR 10,000 crore orders already sanctioned by the government. Out of that, which would be our participatory states and what would be our chunk of the pie? For the remaining INR 50,000, INR 55,000 odd crore, what is the revenue visibility that we see for us in FY27 to close on an annual run rate?

Madhav Kejriwal: Yeah.

Speaker #5: Out of that, which would be our participatory states, and what would be our chunk of the pie? And for the remaining ₹50,000 to ₹55,000 crore, what is the revenue visibility that we see for ourselves in FY27 to close on an annual run rate?

Speaker #3: So, we can say that approximately, from Jal Jeevan, we will be getting close to probably 12 to 13 percent of this outlay.

Madhav Kejriwal: We can say that approximately from Jal Jeevan, we will be getting close to probably 12%, 13% of this outlay.

Speaker #5: Okay. And this is for the existing orders?

Kunal Gandhi: Okay. This is for the existing order?

Speaker #3: For the Jaljeevan Mission, when you say 'existing order,' can you elaborate a little on that, please?

Madhav Kejriwal: For Jal Jeevan Mission, when you say existing order, can you elaborate a little on that, please?

Speaker #5: On the ₹10,000 crore already sanctioned, we would be having a 12 to 13 percent market share there. And on the incremental orders that are yet to be sanctioned, we can also see a similar rate, right?

Kunal Gandhi: On the INR 10,000 crore already sanctioned, we would be having a 12% to 13% market share there. On the incremental orders that are yet to be sanctioned, there also we can see a similar rate, right?

Speaker #3: Yes, this is for the Dhaka line industry as a whole, please.

Madhav Kejriwal: Yes. This is for the ductile iron industry as a whole, please.

Speaker #5: Okay. Okay.

Kunal Gandhi: Okay. Thank you.

Speaker #3: Yes. Thank you.

Madhav Kejriwal: Thank you.

Speaker #1: The next question comes from the line of Rajesh Bhandari with Dakota Engineers. Please go ahead.

Operator 2: The next question comes from the line of Rajesh Bhandari with Dakota Engineering. Please go ahead.

Operator: The next question comes from the line of Rajesh Bhandari with Dakota Engineering. Please go ahead.

Speaker #5: Good afternoon, sir.

Rajesh Bhandari: Good afternoon, sir. We were talking about the industrial paint unit that we are putting up. Are we having any collaboration or it is in-house R&D?

Speaker #3: Good afternoon.

Speaker #5: We were talking about the industrial paint unit that we are putting up. Are we having any collaboration, or is it in-house R&D?

Speaker #3: So sir, we already had a team working on making paints that are used for our pipes, especially those linings and coatings that we were using for our export division. And, you know, we do a little bit of R&D ourselves so that we can stay a little ahead of the market.

Madhav Kejriwal: Sir, we already had a team working on making paints that are used for our pipes, especially those lining and coatings that we were using for our export division. We do a little bit of R&D ourselves so that we can stay a little ahead of the market. That team for the first phase of investment that we are doing, the markets that we want to enter, that team has the capability for it already. In fact, we've already made some headwinds in that front. For the first phase, we are looking at going independently, and so far I'm quite optimistic because we are seeing good results.

Speaker #3: That team for the first phase of investment that we are doing, the markets that we want to enter, that team has the capability for it already.

Speaker #3: In fact, we've already made some headway on that front. So, for the first phase, we are looking at going independently.

Speaker #3: And so far, I'm quite optimistic because we are seeing good results.

Speaker #5: Sir, इसमें अपना कोई anti-rust paint भी have we included for industrial application?

Rajesh Bhandari: Sir, in this anti-rust paint will have been included for industrial application?

Speaker #3: Yes, please.

Madhav Kejriwal: Yes, please.

Speaker #5: No, anti-rust—what I am exactly trying to say is, near the seashore वगैरह, जैसे टाटा केमिकल्स हुआ, sir. It is very close to the sea.

Rajesh Bhandari: No anti-rust. What I am exactly trying to say is, near seashore, just like Tata Chemical Chavara, it is very close to the sea.

Madhav Kejriwal: Right.

Speaker #5: तो वहां पर जो रस्टिंग होती है, every six months to one year, they have to get the paint changed. And it's a specialized paint.

Rajesh Bhandari: The rusting that happens there, every 6 months to 1 year, they have to get the paint changed, and it's a specialized paint. Are you planning for any anti-rust special paint also?

Speaker #5: Are we planning for any anti-rust special paint as well?

Speaker #3: So sir, there are some specific protective coating and primer layers that are used for angles, channels, and other such structurals, which is a target market for us.

Madhav Kejriwal: Sir, there are some protective coating and primer layers that are used for angles, channels, and other such structurals. This is a target market for us. Marine also, we are subsequently planning.

Speaker #5: Marine also, we are subsequently planning. Yeah, exactly. What I meant was marine application.

Rajesh Bhandari: Yeah, exactly. What I meant was marine application.

Speaker #3: Yeah, I've understood. That is also there in the plan.

Madhav Kejriwal: Yeah, I have understood. That also is there in the plan.

Speaker #5: Oh, and do we have a specialization in this, or do we intend to have any collaboration?

Rajesh Bhandari: We have a specialization on this, or we intend to have any collaboration?

Speaker #3: Sir, the marine aspect will be taken up in phase two. We plan to start R&D for that in the next financial year. So, at that time, we'll review our options and take a call.

Madhav Kejriwal: Sir, the marine aspect will be taken up in phase II.

Rajesh Bhandari: Okay

Madhav Kejriwal: targeting for that in the next financial year. At that time we'll weigh our options and take a call.

Speaker #5: Sir, after you pumps का जो था, sir, big pumps, उसके लिए have we have we secured any orders in India?

Rajesh Bhandari: Sir, your pumps, big pumps.

Madhav Kejriwal: Valves.

Rajesh Bhandari: For that, have you secured any orders in India?

Speaker #3: Sir, valves. Not pumps.

Madhav Kejriwal: Sir, valves, not pumps.

Speaker #5: Not much? Are we approved for nuclear power application?

Rajesh Bhandari: Not much. Are we approved for nuclear power application?

Speaker #3: Sir, I—I meant we are doing valves, not pumps, please.

Madhav Kejriwal: Sir, I meant we are doing valves, not pumps, please.

Speaker #5: No, sir. अपना बाहर का जो बड़े pumps का जो था न, sir, अपना.

Rajesh Bhandari: No, sir. Your big pumps outside, sir.

Speaker #3: No, no. Valves tha, sir. Not pumps.

Madhav Kejriwal: Sir, valves, sir, not pumps.

Speaker #5: Oh, not pumps. Okay, I'm sorry, I'm sorry. It is for valves. So, are we approved for nuclear power applications also?

Rajesh Bhandari: Oh, not pumps. Okay. I'm sorry. It is for valves. Are we approved for nuclear power application also?

Madhav Kejriwal: We are not approved for nuclear power plants as yet. We have approval for small scale hydropower plants.

Speaker #3: So we are not approved for nuclear power plants as yet. We have approval for small scale hydropower plants. We are in the process of developing the specific kind of valve required to cater to both large scale hydropower plants and also nuclear power plants.

Madhav Kejriwal: We are in the process of developing the specific kind of valve required to cater to both large scale hydropower plants and also nuclear power plants.

Speaker #5: Yeah, because nuclear, yeah. Nuclear power plant, till to '47, it's going to be about 1,000 gigawatts, sir. 100 gigawatts—I'm sorry. So the scope will be huge.

Rajesh Bhandari: Yeah. Nuclear power plant till 2047, it's going to be about 1,000 gigawatts, sir. 100 gigawatt, I'm sorry.

Madhav Kejriwal: Right.

Rajesh Bhandari: The scope will be huge.

Madhav Kejriwal: Yes, sir.

Speaker #5: Sir, अपना अगला two to three years, what are the prospects, sir?

Rajesh Bhandari: Sir, your next two to three years, what are the prospects, sir?

Speaker #3: For?

Madhav Kejriwal: For?

Speaker #5: For the company, over the next two to three years.

Rajesh Bhandari: For the company. Next two to three years.

Speaker #3: Sir, at the moment, in the next two to three years, we will be able to write the quartiles of the expenditures on Jal Jeevan Mission, along with the increased expenditures towards irrigation, because we are slowly realizing that this way of canal irrigation that we've been following in the country is not sustainable.

Madhav Kejriwal: Sir, at the moment, the next two to three years, we will be able to ride the coattails of the expenditures on Jal Jeevan Mission, along with the increased expenditures towards irrigation, because we are slowly realizing that this way of canal irrigation that we’ve been following in the country is not sustainable.

Speaker #3: And parallel to that, increase in expansion to in the valve business and also paints. This will give us a good diversification and bring down our dependence on Dhaka Line pipes from today.

Madhav Kejriwal: Parallel to that, increase in expansion in the valve business and also paints. This will give us a good diversification and bring down our dependence on Ductile Iron Pipes. From today, it is around 85%.

Speaker #3: It's around 85 percent, and in the next four to five years, we will go to around 55 percent or so. We are also looking at expanding our secondary product line, sir.

Madhav Kejriwal: In the next four to five years, we will go to around 55% or so. We are also looking at expanding our secondary product lines. Sir, we are a small sized player in the ferroalloy business.

Speaker #3: We are a small-size player in the ferroalloy business, and we are seeing that there is scope to increase capacities there as well.

Rajesh Bhandari: Yeah.

Madhav Kejriwal: We are seeing that there is scope to increase capacities there as well.

Speaker #5: So, past glory कब तक आ जाएगी, Sir? When can we—when can we reach our past glory?

Rajesh Bhandari: Past glory sir, when can we reach our past glory?

Speaker #3: It's true, sir. You will start seeing improvement in the financials quite a bit.

Madhav Kejriwal: H2 sir, you will start seeing improvement in the financials quite a bit.

Speaker #5: Okay. And since then, the balance of the ₹1,200 crores—have we received it?

Rajesh Bhandari: Okay. Sir, the balance of the INR 1,200 crores, have we received?

Speaker #3: For coal mine.

Madhav Kejriwal: Of? Coal mines.

Speaker #5: वो आप अपना जो coal mines वगैरह का था ना, Sir?

Rajesh Bhandari: Sir, coal mines etcetera sir.

Speaker #3: Sir, जैसा discussion अभी तक हुआ है, जो भी numbers ministry से approve हुए हैं, वो सब close to in line हैं—maybe 5–10 percent different from what we have assumed.

Madhav Kejriwal: Sir, as we discussed, all the numbers that have been approved by the ministry so far are close to in line, maybe 5% to 10% different from what we have assumed. As we evaluate each asset, it is increasing, so it will take time.

Speaker #3: But जैसे हर asset का valuation कर-कर के ये बढ़ रहे हैं आगे, तो समय लगेगा इसमें.

Speaker #5: And we have not received any money.

Rajesh Bhandari: We have not received any money?

Speaker #3: We've received around ₹98 crore so far, sir.

Madhav Kejriwal: We've received around INR 98 crore so far, sir.

Speaker #5: Oh. Oh. Oh. My God. अच्छा. अच्छा. Okay. ठीक है. ठीक है, sir. Okay. Fine. Thank you, sir. Thank you.

Rajesh Bhandari: Oh, my God. Okay, sir. Okay, fine. Thank you, sir.

Operator 2: The next question comes from the line of Kaushik with Vermillion Asset Management. Please go ahead.

Operator: The next question comes from the line of Kaushik with Vermillion Asset Management. Please go ahead.

Speaker #3: Thank you.

Speaker #1: The next question comes from the line of Kaushik with Vermilion Value Management. Please go ahead.

Speaker #5: Yeah, good afternoon. I have been a shareholder of ElectroSteel for the last maybe 10, 12 years, so my questions are more on the long term—what you are thinking.

[Analyst] (Vermillion Value Management): Good afternoon. I have been a shareholder of Electrosteel for the last maybe 10, 12 years. My questions are more on long-term, what you are thinking. My question is that, in your slide you have one slide on the irrigation projects. These projects are very large. What kind of sales do you expect to get from this in terms of how these translate into orders for us?

Speaker #5: My question is that, you know, in your slide you have one slide on the irrigation projects. So, these projects are very large. So, what kind of sales do you expect to get from them, just in terms of how this translates into orders for us?

Speaker #3: Sir, I would say that around 5% to 7% of these project volumes are going to tantamount into Dhaka Line pipes. You are absolutely correct.

Madhav Kejriwal: I would say that around 5% to 7% of these project volumes are going to tantamount into Ductile Iron pipes. You are absolutely correct. Well, the government has around 30 DPRs prepared for river linking.

Speaker #3: Well, the government has around 30 DPRs prepared for river linking.

Speaker #5: Right.

[Analyst] (Vermillion Value Management): Right.

Speaker #3: And of which, three of them are particularly moving forward at a good pace. In fact, Ken-Bethwa may come be start हो गया है. So that is going to materialize.

Madhav Kejriwal: Of which three of them are particularly moving forward at good pace. In fact, Ken-Betwa work has also started.

Madhav Kejriwal: This chart is going to materialize, I'm very certain. There's another one between Madhya Pradesh and Rajasthan, Parbati-Kalisindh-Chambal.

Speaker #3: I'm very certain. There's another one between Madhya Pradesh and Rajasthan, PKC. That is also moving forward. That's a big project of ₹90,000 crores. So these are going to slowly take over the reduction in demand that will happen from more and more JJM work being executed.

[Analyst] (Vermillion Value Management): Yes.

Madhav Kejriwal: That is also moving forward. That's a big project of INR 90,000 crore. These are going to slowly take over the reduction of demand that will happen from more and more JJM work being executed. We are very hopeful, although it will not make up entirely for the JJM demand.

Speaker #3: So, we are very hopeful. Although it will not make up entirely for the JJM demand, towards irrigation it will definitely overlap a bit with the JJM demand, which will reduce with time over the next two to two and a half years.

Madhav Kejriwal: Towards irrigation will definitely overlap a bit of the JJM demand that will reduce with time over the next two and a half years.

Speaker #5: Right. In a in a earlier calls, once you had I mean, one of our colleagues had mentioned that even in the areas where already pipes are there, now there we are suddenly increasing the FSI from two to five, ten, et cetera, based on transit oriented demand.

[Analyst] (Vermillion Value Management): Right. In earlier calls, one of your colleagues had mentioned that even in the areas where already pipes are there, now we are suddenly increasing the FSI from two to five, 10, et cetera, based on transit-oriented demand. Do you see demands coming from already areas which are there? I mean, the urban areas are being rethought and completely replanned. Do you see people will rip out what is there and reboot, because now the demand may be 4x, 5x.

Speaker #5: So do you see demand coming from already existing areas which are there? I mean, where the urban areas are being rethought and completely re-planned?

Speaker #5: So do you see, I mean, people will rip out what is there and reinstall because now the demand may be 4x, 5x?

Speaker #3: That is definitely happening, sir. That's why this Urban Challenge Fund that has come up is a four lakh crore fund. That is not only pertaining to water.

Madhav Kejriwal: That is definitely happening, sir. That's why this Urban Challenge fund that has come up, it's an INR 4 lakh crore fund. That is not only pertaining to water, that is an overall improvement in urbanization of tier 2, tier 3 cities. It's somewhat like an AMRUT 3, you can say. A part of that will, of course, go into improvement of water infrastructure, recycling of water, and a circular economy for water.

Speaker #3: That is an overall improvement in urbanization of tier two, tier three cities. It's somewhat—it's somewhat like an AMRUT 3, you can say. So a part of that will, of course, go into improvement of water infrastructure, you know, recycling of water, and a circular economy for water.

Speaker #5: Right.

[Analyst] (Vermillion Value Management): Right.

Speaker #3: Definitely, we will see a pickup in demand from that as well.

Madhav Kejriwal: Definitely, we will see pickup of demand from that as well.

Speaker #5: In terms of your debt position, I mean, it's quite comfortable now. And, you know, due to this last FY26, the government scaling back, you know, the valuations have come down, et cetera.

[Analyst] (Vermillion Value Management): In terms of your debt position, I mean, it's quite comfortable now, and due to this last FY2026, the government scaling back, the valuations have come down, et cetera. Do you see an opportunity to do a tactical buyback? Now the buyback, the taxation also has kind of changed. Do you see this as an opportunity or a window for doing a buyback?

Speaker #5: Do you see an opportunity to do a tactical buyback? And now, with the buyback, the taxation also has kind of changed. Do you see this as an opportunity or a window for, you know, doing a buyback?

Speaker #3: Sir, I—I don't think this is the right place to comment on this. I would like to go through the correct channels of communication if something like this is finalized.

Madhav Kejriwal: Sir, I don't think it's the right place to comment on this. I would like to go through the correct channels of communication if something like this is finalized at any point.

Speaker #3: At any point.

Speaker #5: Okay. From my point of view, I mean, I have been in the market for 30 years. So I think you should consider this. It's an opportunity.

[Analyst] (Vermillion Value Management): Okay. From my point, I mean, I've been in the market for 30 years, I think that you should consider this. It's an opportunity. I've been an investor also for almost a decade. I think given the vast distance the company has covered, and it's come to a very solid base. I don't think the market is giving you the kind of valuation that you should get. I would request you to look at this in a very thorough manner.

Speaker #5: I have been an investor also for almost a decade. So I think even for, you know, the vast distance the company has covered and, you know, the the you come to a very solid base.

Speaker #5: I don't think the market is giving you the kind of valuation that you should get. So, I would request you to look at this in a very thorough manner.

Madhav Kejriwal: It's been something on our minds, we are definitely going to further look into it. Thank you very much for your suggestions. We will definitely take it up with the larger management team of Electrosteel.

Speaker #3: It’s been something on our minds, and we are definitely going to look into it further. Thank you very much for your suggestions. We will definitely take it up with the larger management team of Electrosteel.

Speaker #5: One other question I had is: Amrut 2.0—does the wastewater recycling and desalination, all the projects, come under this? Or does this only cover a portion of the projects?

[Analyst] (Vermillion Value Management): One other question I had is that AMRUT 2.0, does the wastewater recycling and desalination, all the projects come under this, or this only covers a portion of the projects?

Speaker #3: It's a part of it. There are some independent exercises being taken up as well for, yes, the same exercise. Certain cities require more. Delhi is doing a lot, independent of AMRUT, for independent STPs, etc.

Madhav Kejriwal: It's a part of it. There are some independent exercises being taken up as well for, yes, the same exercise. Certain cities required more. Delhi is doing a lot independent of AMRUT. For independent STPs, et cetera. There are overlaps in the projects coming under AMRUT and other urbanization efforts. Again, some of those overlaps are falling under the UCF as well.

Speaker #3: So there are overlaps in the projects coming under AMRUT and other urbanization efforts. But again, some of those overlaps are falling under the UCF as well.

Speaker #5: Okay. Can you also just throw some light on what your thought processes are and how the company will look in 2030? Because now, after you have started with diversification and your initiatives, I would like to understand your vision.

[Analyst] (Vermillion Value Management): Okay. Can you also just throw some light on what are your thought processes on how the company will look in 2030? You have now started some diversification, et cetera, and new initiatives. What is the thought process and how do you visualize the company after five, six years?

Speaker #5: So what is the thought process, and how do you visualize the company after five or six years?

Speaker #3: So, sir, if you look at a moderation—I'm saying not extremes, not extremities, but a moderation—in the DI pipe industry back to its older days.

Madhav Kejriwal: Sir, if you look at the moderation, I'm saying not extremities, but a moderation in the DI pipe industry back to its older days. Let's get rid of the two, three years post-COVID where we had an extremely good run.

Speaker #3: Let's get rid of the two or three years post-COVID, where we had an extremely good run.

Speaker #5: Yes.

Speaker #3: So, without that in the picture, I am very certain that we can look at a growth of revenue to around 7,000 to 8,000 crores.

[Analyst] (Vermillion Value Management): Yes.

Madhav Kejriwal: Without that in the picture, I am very certain that we can look at a growth of revenue to around seven to 8,000 crores with an EBITDA level of 13% to 13.5%.

Speaker #3: With EBITDA level of 13, 13 and a half percent by.

Speaker #5: Right.

[Analyst] (Vermillion Value Management): Right

Speaker #3: FY20 30 FY20 31.

Madhav Kejriwal: FY 2030, FY 2031.

Speaker #5: Okay. And these businesses that you are looking at, your valves, the paints, et cetera, how what kind of what kind of ideally, what type of growth you would or markets I'm not talking about turnover.

[Analyst] (Vermillion Value Management): Okay. These businesses that you are looking at, the valves, the paints, et cetera, ideally what type of growth or markets? I am not talking about turnover. What type of activities you have planned out in this period?

Speaker #5: What type of activities you would like to you have planned out for this in this in this period?

Speaker #3: So, sir, the industrial and protective coating market is set to grow at a rate of 10 percent annually, year on year.

Madhav Kejriwal: Sir, the industrial and protective coatings market is set to grow at a rate of 10% annually year-on-year in India. We are hoping that we will be able to do a little better than the markets. For valves, we were expecting a 20% plus growth rate year-on-year owing to the availability of the entire Electrosteel ecosystem now available to sell the valves.

Speaker #5: Okay.

Speaker #3: In India, we are hoping that we will be able to do a little better than the markets. For valves, we were expecting a 20% plus growth rate year on year, owing to the availability of the entire Electrosteel ecosystem now available to sell the valves.

Speaker #5: Right.

Speaker #3: And for quarter one so far, we are seeing that growth happen. We are seeing an 18% growth on top of last year's Q1 growth rate.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: Q1 so far we are seeing that growth happen. We are seeing an 18% growth on top of last year's Q1 growth rate.

[Analyst] (Vermillion Value Management): Right.

Speaker #3: So, we are fairly certain that we’ll be able to maintain this target. For valves, from an area of close to ₹400 crore of revenue, in the next four years, we are expecting to double this.

Madhav Kejriwal: We are fairly certain that we'll be able to maintain this target and for valves from area of close to INR 400 crore of revenue, in the next four years we are expecting to double this.

Speaker #3: And hence, we are even more aggressive. So far, we've only been manufacturing for internal consumption, but we expect to go out into the market and get around ₹800 to ₹1,000 crore of revenue.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: Paints we are even more aggressive where so far we've only been manufacturing for internal consumption, but we expect to go out into the market and get around INR 800 to 1,000 crore of revenue. This would include hopefully some inorganic growth also.

Speaker #3: This would include, hopefully, some inorganic growth also.

Speaker #5: Right, right. And what is the— I mean, in this right to win or, you know, what is, in your assessment, what gives you this opportunity?

[Analyst] (Vermillion Value Management): Right. What is the right to win or in your assessment what gives you this opportunity? Going outside is a new business.

Speaker #5: Because it's a new—it's a kind of going outside, it's a new business.

Speaker #3: So, for valves, I wouldn't say it's a new business at all, sir. This is the same market.

Madhav Kejriwal: For valves I wouldn't say it's a new business at all, sir. This is a mature market.

[Analyst] (Vermillion Value Management): No, I meant for the paints. For the paints.

Speaker #5: Paints for the paints. What put the seed in our mind is that we already had a team which is doing R&D.

Madhav Kejriwal: What put the seed in our mind is that we already had a team which is doing R&D. They have been able to achieve quite a few things in terms of import substitution for linings and coatings on our pipes.

Speaker #5: They have been able to achieve quite a few things in terms of import substitution for linings and coatings on our pipes. And beyond that, what happened is that we appointed a consultant.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: Beyond that, what happened is that we appointed consultants. We had Alvarez & Marsal consult us on how we can utilize our existing infrastructure.

Speaker #5: We had Alvarez & Marshall consult us on how we can utilize our existing infrastructure. Right.

[Analyst] (Vermillion Value Management): Right.

Speaker #3: Our assets, both in terms of human capital and also in terms of plant and machinery, allow us to diversify and grow. So you know, that gave us the idea that industrial paints is the way to go.

Madhav Kejriwal: Our assets, both in terms of human capital and also in terms of plant and machinery to diversify and grow. That gave us the idea that industrial paints is the way to go. We have engaged with experts in the field to identify the right products to enter the market with, and then what should be the next step and the step after that. We are going through this with a great deal of pre-exercise with experts and consultants. We are fairly sure that we will be able to achieve these numbers.

Speaker #3: We have engaged with experts in the field to identify the right products to enter the market with. And then, what should be the next step and the step after that?

Speaker #3: So, we are going through this with a great deal of pre-exercise with experts and consultants. So, we are fairly sure that we'll be able to achieve these numbers.

Speaker #5: Are you—was the West Bengal change in the general scenario of the LA—are you looking at investing in West Bengal now?

[Analyst] (Vermillion Value Management): Post the West Bengal change in the general scenario there, are you looking at investing in West Bengal now?

Speaker #3: So, sir, the first phase of investment that we are going to be doing in our paints is going to be in West Bengal, albeit small.

Madhav Kejriwal: Sir, the first phase of investment that we are going to be doing in our paints is going to be in West Bengal. Albeit small, it is a start. The valve business also, the valve plant in India, the first phase also we are looking at investing in Bengal itself.

Speaker #3: It's a start. Regarding the valve business, also, we are—the valve plant in India—the first phase also—we are looking at investing in Bengal itself.

[Analyst] (Vermillion Value Management): Right.

Speaker #3: So, you know, that is also because we have fixed assets here. So the capital outlay will be lesser, as opposed to if we were doing a pure greenfield.

Madhav Kejriwal: That is also because we have fixed assets here, the capital outlay will be lesser as opposed to if we were doing a pure greenfield.

Speaker #3: So, those assets are there. I would say, all in all, we are looking at spending close to ₹200 crore in West Bengal in the next year or so.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: Those are it. I would say all in all, we are looking at spending close to INR 200 crores in West Bengal.

[Analyst] (Vermillion Value Management): Right

Madhav Kejriwal: in the next year or so.

Speaker #5: So, this Ferro Alloy also, are you looking at West Bengal? Because one of the things we heard from the analysts is that the entry barrier in the Ferro Alloy business was doing business in West Bengal, not really the technology or anything.

[Analyst] (Vermillion Value Management): This ferroalloy also, are you looking at West Bengal? Because one of the things we heard as analysts is that the entry barrier in the ferroalloy business was doing business in West Bengal, not really the technology or anything. That gave a lot of returns to the existing players and there was a little feeling like there's space for more players.

Speaker #5: And, you know, so that's what gave a lot of returns to the existing players. And there was always a feeling that there is space for more players.

Speaker #5: So.

Madhav Kejriwal: You are very right, sir. Our expansion in ferroalloy is also going to be in our existing unit. We already have one ferroalloy plant, and we have found that with certain investments we can utilize additional energy, et cetera, to put up another plant right next to it. That's what we're doing.

Speaker #3: So, we... you are very right, sir. Our expansion in ferroalloy is also going to be in our existing unit. We already have one ferroalloy plant.

Speaker #3: And we have found that, with certain investments, we can utilize additional energy, et cetera, to put up another plant right next to it. So that's what we are doing.

Speaker #5: Right, right. So it's going to be like a brownfield.

[Analyst] (Vermillion Value Management): Right. It's going to be like a brownfield?

Speaker #3: Yes, please. The expansions that we have planned from a capital utilization perspective are all brownfield, and they are mostly to diversify our portfolio from ductile iron pipes to other products.

Madhav Kejriwal: Yes, it is. For the next two years, all the expansions that we have planned from a capital utilization perspective are all brownfield and they are mostly to diversify our portfolio from Ductile Iron Pipes to other products. You will see, alongside that we are making investments towards improving our cost efficiency, our inventory management, and towards digitalization and automation within the Ductile Iron Pipe part to make us more competitive and prepare us for the future where we know that probably the demand-supply scenario will become a little more strained again.

Speaker #3: And you will see that, alongside that, we are making investments towards improving our cost efficiency, our inventory management, and towards digitalization and automation within the ductile iron pipe part, to make us more competitive and prepare us for the future, where we know that probably the demand-supply scenario will become a little more strained again.

Speaker #5: Right, right. You had looked at Orissa for a greenfield site. Any update on that?

[Analyst] (Vermillion Value Management): Right. You had looked at Odisha for a greenfield site. Any update on that?

Speaker #3: Sir, because of the downturn in the market, we realized that it's better to hold back and utilize this capital for these more efficient brownfield expansions.

Madhav Kejriwal: Sir, because of the downfall in the market, we realized that it's better to hold back and utilize this capital for these more efficient brownfield expansions and to work on efficiency rather than just expansion and capacity.

Speaker #3: And to work on efficiency rather than just expansion in capacity.

Sunil Katial: Do you have good opportunities for bolt-on acquisition? You have done a valve company, you have done a services company in Singapore. Do you see opportunity to do things allied around your adjacencies, which are very low risk but very value accretive?

[Analyst] (Vermillion Value Management): Do you have good opportunities for bolt-on acquisition? You have done a valve company, you have done a services company in Singapore. Do you see opportunity to do things allied around your adjacencies, which are very low risk but very value accretive?

Speaker #5: Do you have any good opportunities for bolt-on acquisitions? You have done a valve company, you have done a services company in Singapore. Do you see opportunities to do things allied around your adjacencies, which are very low-risk but very value-accretive?

Speaker #5: More of them.

Speaker #3: Sir, we have around ₹700 crores of capital on our books, which we are ready to invest. So if some opportunity comes, we'll be more than happy to look at it.

Madhav Kejriwal: Sir, we have around INR 700 crore of capital, sir, on our books.

Sunil Katial: Right.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: Which we are ready to invest. If some opportunity comes, we'll be more than happy to look at it. Of course, it's always best to expand within your adjacency.

Speaker #3: Of course, it's always best to expand with within your adjacency. So that is our first priority. And beyond that, whatever as and when we are coming across some opportunities, we will study and see how to utilize our capital to maximize returns for the company and our shareholders.

Sunil Katial: Right.

[Analyst] (Vermillion Value Management): Right.

Madhav Kejriwal: That is our first priority. Beyond that, as and when we are coming across some opportunities, we will study and see how to utilize our capital to maximize returns for the company and our shareholders.

Speaker #5: Right. My last question: you had mentioned now that there are three irrigation projects.

Sunil Katial: Thank you. My last question, you had mentioned now that three mitigation projects.

[Analyst] (Vermillion Value Management): Thank you. My last question, you had mentioned now that three mitigation projects.

Operator 2: Sorry to interrupt, Mr. Kaushik. I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Jojo Saju with Tirtha Capital. Please go ahead.

Operator: Sorry to interrupt, Mr. Kaushik. I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Jojo Saju with Tirtha Capital. Please go ahead.

Speaker #2: Sorry to interrupt, Mr. Kaushik. I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Jojo Shah Ju, who is with Kirtan Capital.

Speaker #2: Please go ahead.

Speaker #5: Hello. I'm Arjun.

Jojo Saju: Hello. Am I audible?

Speaker #3: Yes, please. Yes, sir.

Madhav Kejriwal: Yes, sir.

Speaker #5: Yeah, most of my questions have already been answered. But, still on the paint and coating business—in the Q4 call, you guided for a ₹600 crore top-line target in five years.

Jojo Saju: Yeah. Most of my questions already got answered, but still on the paint and coating business, in Q4 call, you have guided for INR 600 crore top line target in five years, and in the Q1 presentation now that target has raised to INR 800 to 1,000 crore for the same period. I just want to understand what led to this growth in this guidance. Has company already secured any external customers in this division?

Speaker #5: And in the Q1 presentation now, that target has been raised to ₹800 to ₹1,000 crore for the same period. So I just want to understand what led to this growth in this guidance.

Speaker #5: Has the company already secured any external customers in this division?

Speaker #3: Sir, it's it's I would say as I was mentioning we have engaged we were engaging with consultants and experts at that point also. And we you can say we started doing dipstick tests into the market.

Madhav Kejriwal: Sir, I would say, as I was mentioning, we were engaging with consultants and experts at that point also. You can say we've started doing dipstick tests into the market. We have found that there is scope for even more than what we had projected. Our appetite for diversification has increased, so our capital outlay has gone from INR 100 crore to INR 250 to 300 crore, which allows us for growing faster. We are also looking at inorganic opportunities, so we are in the market to see if there are some possibilities for technology tie-ups or acquisitions in this particular field. We are engaging with certain consultants and experts for that as well. Hopefully, we will find something in the next few years which will help us grow from the INR 600 crore target to the now INR 800 to 1,000 crore level.

Speaker #3: And we have found that there is scope for even more than what we had projected. Plus, our appetite for diversification has increased. So, our capital outlay has gone from ₹100 crore to ₹250–300 crore.

Speaker #3: Which allows us to grow faster. We are also looking at inorganic opportunities, so we are in the market to see if there are some possibilities for technology tie-ups or acquisitions in this particular field.

Speaker #3: We are engaging with certain consultants and experts for that as well, and hopefully we will find something in the next few years which will help us grow from the ₹600 crore target to the now ₹800 to ₹1,000 crore level.

Speaker #5: Okay, got it. And also, for the newly approved railway rubber components, do we need to get approval from government authorities to sell this product?

Jojo Saju: Okay, got it. Also, on the newly approved railway rubber components, do we need to get approved by the government authorities to sell these products? Do we already have such approvals in this space?

Speaker #5: And do we already have such approvals in this place?

Speaker #3: No, in fact, for this, today in the board meeting, we have taken approvals. Railways wanted those board approvals for that. So possibly, it will take four to six months' time for us to get it registered.

Sunil Katial: No, in fact, for this today in the board meeting, we have taken approvals, because Railways wanted those board approvals for that. Possibly it will take 4 to 6 months for us to get it registered.

Speaker #5: Okay. And do we need CAPEX in this specific segment, or are we using the same capacity for selling these products? Any update?

Jojo Saju: Okay. Do we need CapEx in this specific segment, or are we using the same capacity for selling these products?

Speaker #3: The bulk of the equipment is the same. Some additional equipment is required, for which we have already taken procurement steps. They are under installation now.

Sunil Katial: Bulk of the equipment is the same. Some additional equipments are required for which we've already taken procurement steps. They are under installation now. In the next three months, we are expecting those to be installed.

Speaker #3: In the next three months, we are expecting those to be installed.

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

Jojo Saju: Okay. Okay, sir. Thank you. That's all my side.

Speaker #3: Thank you.

Sunil Katial: Thank you.

Speaker #2: Thank you. The next question comes from the line of Saqib Kapoor with Kapoor & Co. Please go ahead.

Operator 2: Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Operator: Thank you. The next question comes from the line of Saket Kapoor with Kapoor & Co. Please go ahead.

Speaker #5: Yeah. Namaskar, Madhavjeet. Hope my voice is audible.

Saket Kapoor: Yeah. Namaskar, Madhav ji. Hope my voice is audible.

Speaker #3: Namaskar, sir.

Madhav Kejriwal: Namaskar, sir.

Saket Kapoor: Sir, first of all, thank you for a very good interactive session. Before starting to comment anything, first point which would like to reiterate is the investor presentation that has been revamped, and a lot of effort has gone into it. Kudos to the team, and we hope we maintain the same. Sir, I have a small suggestion pertaining to the TIS part. If we can also provide some financial and operational input for the TIS also in the presentation itself, the questions could be answered there itself. That is the first understanding. Sir, secondly, I think, sir, you mentioned about DIP volume of 5.75 for this year, or it is DIP plus the fittings number?

Speaker #5: Sir, first of all, thank you for a very, very good interactive session. Before starting to comment on anything, the first point which I would like to reiterate is the investor presentation that has been revamped, and a lot of effort has gone into it.

Speaker #5: So, kudos to the team and we hope we maintain the same. I have a small suggestion pertaining to the TIS part. If we can also provide some financial and operational input for the TIS in the presentation itself, that would be helpful.

Speaker #5: The questions would suffice and could be answered there itself—that is the first understanding. Secondly, I think you mentioned about DI pipe.

Speaker #5: Volume of 5.75 for this year, or is it DIP plus the fitting number?

Speaker #3: No, sir. This is DIP plus CIP—so we will get to this number approximately.

Madhav Kejriwal: No, sir. This is DIP plus CIP that we will get to this number approximately.

Saket Kapoor: Okay. The comparable number last-

Speaker #5: last number. Yeah, please bonus.

Madhav Kejriwal: You can see-

Saket Kapoor: Yeah, please.

Speaker #3: The comparable number last year was close to the same, sir. So I would say, in terms of volumes, we will be close to the same numbers.

Madhav Kejriwal: Comparable number last year was close to the same, sir. I would say in terms of volumes, we will be close to the same numbers. We expect better revenue and better margins per ton due to the efforts that the entire team has made over the last six, eight months to reduce costs, to improve efficiencies, and really good job on the inventory management part.

Speaker #3: But we expect better revenue and better margins per ton, due to the efforts that the entire team has made over the last six to eight months to reduce costs, improve efficiencies, and do a really good job on the inventory management part.

Speaker #5: Okay. So, sir, can you just shed some more light on how the EBITDA margin trajectory would be shaping up from the current 9.5% number onward?

Saket Kapoor: Okay. Sir, can you just give us some more light on how the EBITDA margin trajectory would be shaping up from the current 9.5 number to, we will exit the year at 12%, 13%? A fair understanding.

Speaker #5: We will exit the year at 12, 13 percent—is that a fair understanding?

Speaker #3: So, sir, if you see the EBITDA margin this year, this quarter it was around 9.8%. And for the previous quarter,

Madhav Kejriwal: If you see the EBITDA margin this year, this quarter, it was around 9.8%. For the previous quarter

Speaker #5: Console me 9.5 percent. 9.5. Okay, 9.5 is done.

Saket Kapoor: Consolidate 9.5. Okay. 9.5 is done.

Speaker #3: 9.5 now.

Ashutosh Agarwal: Five now.

Speaker #5: sir.

Speaker #3: So the EBITDA margin is around 9.5% for this quarter, and for the previous quarter it was around 6.5%. So there is an improvement in that itself.

Madhav Kejriwal: The EBITDA margin is around 9.5% for this quarter, and for the previous quarter, it was around 6.5%. There is an improvement in that itself, although the revenues are somewhat the same. Going forward, I think Q3, Q4, we should be hitting our EBITDA number of 12% to 13%.

Speaker #3: Although the revenues are somewhat the same, going forward, I think in Q3 and Q4 we should be hitting an EBITDA number of 12 to 13 percent.

Speaker #5: Okay. Also, will quarter two be similar in terms of deliverables and margin to what we have exited in Q1?

Saket Kapoor: Okay. Also, Q2 will be similar in terms of deliverables and margin than what we have exited Q1?

Speaker #3: Approximately, sir. I I am I am hoping we can do better. But conservatively speaking, I I we won't do worse than where we are today.

Madhav Kejriwal: Approximately, sir. I am hoping we can do better, but conservatively speaking, we won't do worse than where we are today.

Speaker #5: Okay. Sir, point number four आपके outcome of meeting में था, उसमें आपने mention किया कि we have approved the manufacture of various rubber products for Indian Railways.

Saket Kapoor: Okay. Sir, point number 4, outcome of meeting, you mentioned that we have approved the manufacture of various rubber products for Indian Railways. Sir, can you provide more information on this topic. What exactly are we trying? You have also mentioned about our gasket plant, I think, in Andhra Pradesh. How are we interconnecting these two assets, and what is the revenue potential? What are you trying to convey to us?

Speaker #5: So, sir, इस विषय में थोड़ी जानकारी और दीजिए. What exactly are we trying, and you have also mentioned about our gasket plant? I think so, जो आंध्र प्रदेश में है.

Speaker #5: So, how are we interconnecting these two aspects? And what is the revenue potential? What—what are you trying to convey to us?

Speaker #3: No, इसमें ऐसा है जी कि gasket का जो plant लगाया है na, उसमें there is a possibility of doing some additional production, but with some added machines.

Ashutosh Agarwal: In this, the gasket plant that has been set up, there is a possibility of doing some additional production, with some added machines. What is happening is that this plant primarily was set up for meeting our captive requirement of gaskets. Because of this dip in the DI pipe market, though temporary, we saw it as an opportunity that we can add to the portfolio. We are in the process of procurement of the additional few equipment which are required so that we can also start supplying to the railways. Today, we have taken the approval of the board of directors for adding this new product category into our portfolio, and with that, we will go ahead with the registration, et cetera, with the railways, which may take around four to six months' time. That is how we are planning to go ahead.

Speaker #3: So what's happening is that this plant primarily was set up for meeting our captive requirement of gaskets. But then, because of this dip in the DI pipe market—though temporary—we saw it as an opportunity to add to the portfolio.

Speaker #3: So, we are in the process of procuring the additional few equipment which are required, so that we can also start supplying to the railways.

Speaker #3: In the meeting today, we have taken the approval of the Board of Directors for adding this new product category into our portfolio. With that, we will go ahead with the registration, etc., with the railways.

Speaker #3: Which may take around four to six months' time. So, that's how we are planning to go ahead.

Speaker #2: Thank you, sir. Ladies and gentlemen, that was the last question for today. I will now hand the conference over to the management for closing comments.

Operator 2: Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Operator: Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Speaker #3: Thank you for joining us today, everybody, and for your continued interest in our company. We would like to reassure you that we remain focused on improving our operational performance and strengthening our financial position, while creating long-term value for all our stakeholders.

Madhav Kejriwal: Thank you for joining us today, everybody, and for your continued interest in our company. We would like to reassure you that we remain focused on improving our operational performance and strengthening our financial position while creating long-term value for all our stakeholders. We appreciate your continued confidence in our management and look forward to interacting with you again after next quarter's results. Thank you, and have a good weekend.

Speaker #3: We appreciate your continued confidence in our management and look forward to interacting with you again after our next quarter's results. Thank you, and have a good weekend.

Speaker #2: Thank you. On behalf of Electrosteel Casting Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.

Operator 2: Thank you. On behalf of Electrosteel Castings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

Operator: Thank you. On behalf of Electrosteel Castings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

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Q1 2027 Electrosteel Castings Ltd Earnings Call

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