JSJindal Saw500378Earnings call transcript

Q2 FY27 call: revenue rises but profit falls on shipping delays, coal and logistics costs

Transcript of the Q2 FY27 investor call (held October 19) is out.

By ScoutQuest · Thu 22 Oct 2026, 6:17 PM IST · 3 min read

Standalone gross revenue

INR 3,881 crores

EBITDA

INR 265 crores

PAT

INR 71 crores

What the transcript covers

This is the record of the earnings call ICICI Securities hosted on October 19, 2026, after the board approved the unaudited standalone and consolidated results for the quarter ended September 30, 2026. Management walked through the numbers, the reasons behind them, and how it is positioning the business for the second half.

Q2 FY27, standalone

• Gross revenue was INR 3,881 crores, higher both sequentially and year-on-year.
• EBITDA was INR 265 crores, lower than both the preceding quarter and the same quarter last year, as operating costs rose.
• Finance expenses included a negative forex impact; the normalised finance cost was lower than the reported figure.
• Profit after tax was INR 71 crores, and this is after a INR 27 crores tax credit received during the quarter.

First half, standalone

• Gross revenue was INR 7,637 crores, higher than the same period last year.
• Operating profit and profit after tax were both lower, with higher tax expense adding to the pressure from weaker operating margins.
• Finance costs for the half were lower than a year earlier, helped by efficient capital management.

Consolidated business

• Gross revenue for the quarter was INR 4,523 crores, higher than both the preceding quarter and the year-ago quarter.
• Profit after tax was INR 35 crores, a sharp fall from the preceding quarter and from a year earlier. The INR 27 crores tax credit meant reported PAT came in above profit before tax.

Why profit fell, in management's words

• Escalation in West Asia, particularly Saudi Arabia, where the company has significant export order exposure. Management said the issue is delay in shipping and revenue recognition, not order cancellations. If the delays persist, dedicated production facilities stay underutilised and fixed and operating costs keep rising.
• Higher international and domestic logistics costs, which matter because most sales contracts have historically been structured on a delivered basis.
• Costlier coking coal squeezing margins in the ductile iron pipe business, made worse by lower capacity utilisation as demand in the domestic water segment stays soft.
• The Abu Dhabi DI plant is dealing with a combination of cost overrun, underutilisation and delivery constraints, including customers who cannot be reached by truck-based transport, which pulled down production and sales.
• In seamless pipes, the API licence was reinstated in June 2026, restoring eligibility for key orders, though the immediate financial impact in Q2 was limited. The business is bidding for new orders and the backlog is improving.

Management summed this up as a combination of factors rather than a single adverse event, with the impact most visible in the ductile iron and seamless pipe businesses.

Balance sheet and ratings

• Standalone net debt was INR 2,245 crores as at September 30, 2026, lower than at June 30, 2026. This includes long-term debt in the form of non-convertible debentures subscribed by LIC, repayable across 2028, 2029 and 2030.
• On a consolidated basis, net institutional debt also came down from the June quarter level.
• CARE affirmed CARE A1+ for short-term debt facilities including commercial paper, and CARE AA with a stable outlook for long-term facilities.

What management flagged for the second half

• The company says it is positioning itself to limit the impact of these risks in Q3 and H2, and points to a confirmed order book as the base for the coming quarters.
• The pace at which shipping and revenue recognition normalise in West Asia, and the cost of freight and coking coal, are the swing factors for margins.
• Utilisation at the Abu Dhabi plant and demand from the domestic water infrastructure segment.
• Order intake in seamless pipes now that the API licence is back.

How a retail reader might read it

Sales are still growing and debt has come down, but the money retained per rupee of sales has fallen, and a part of the reported profit came from a tax credit rather than operations. The transcript frames most of the pressure as external and temporary, and the company has said it is working on mitigation; the next few quarters will show whether shipping delays and input costs ease.

Nothing here is a view, opinion or recommendation of ScoutQuest, its parent, directors or employees. ScoutQuest is a technology company: this page was assembled automatically from public sources using artificial intelligence, and may contain errors or omissions. Confirm everything against the original source before you act on it. Any use of this page is at your own risk, and neither ScoutQuest nor its parent, directors or employees accepts liability for it.

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