Concall Highlights:
This year is likely to be better then last year, last year was best.
Subsidiaries around the world start contributing and it likely to continue.
It is not flash in the pan quarter, trend should be similar for 24 months. Enough demand and factors to suggest company arrived at different level of fundamental strength.
Debt reduction is not flash pan, Debt is keep in check. Rating is AA, stable. Among the best rated in peers.
Most diversified portfolio in world, for pipes and tubes segment.
Have some value added products.
Single SAP platform across the world.
Demand:
Oil and gas, jal jivan plan, defense, nuclear, power, sugar etc. supply to all industries.
3rd and 4th quarters have more revenue. Exports will remain between 30 to 40% of order book.
EBIDTA increased from 11 to 16% from last year.
Pipe demands to grow at 10% to 15%. There is space for new players.
Order book:
1.4 billion $ and keep at this level, it is sweet spot for company. Do not do trading. With sales funnel, growth will be achieved by replenishing orders quickly. Moving to value added products due to less competition, vendor qualification is hard for quality.
Capacity:
Pipes 2.5 million Tons in domestic, Pellets 1.7 million Tons, Abdu Dhabi 300K Tons.
Hunter JV: Waiting for API license, expected by Dec 2023. the JV will be break even.
started trails. Not in production. Very High margin and premium products. Satwana running at 60 to 70%, it will be increase by 20 to 25% by adding balancing. Next year it will be at 80%.
Cash:
Not looking for major capex, M&A. Cash generated will be conserved, shared with share holder, to reduce debt. Will use in working capital so debt will reduce.
War:
Abu Dhabi facility do not see any slowdown, exports 33 countries in MENA region. War do not have any impact as of now, if it get contained.
Due to Ukraine-Russia war, Europe looks at India for pipe supply. As Ukraine can not supply.
Coking Coal:
Price increased from 230$ to 340$ in last two months.
Mitigation: Movement of price is not sharp, not likely to be volatile. Learning from past experience, try to hedge and add price variation clause with governments. Lot of contracts succeeded. Technology modification, adding PCI will reduce cost.
https://www.jindalsaw.com/audio/MFG0220231027149594.mp3
Disclosure: Invested
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