Electrosteel Castings Ltd

Financial Performance

• Consolidated total income Rs. 1,465 crore; EBITDA Rs. 139 crore; EBITDA margin 9.5%; PAT Rs. 48.4 crore.
• Standalone total income Rs. 1,119 crore; EBITDA Rs. 70.6 crore; EBITDA margin 6.3%; PAT Rs. 5.9 crore.
• DI pipes and fittings volumes 1.20 lakh tonnes in Q1 FY27; down 27% YoY.
• Q1 volumes declined due to weak domestic demand; exports also affected by Middle East tensions.
• Gross debt Rs. 1,658 crore; net debt Rs. 876 crore as on 30 June 2026.
• Net debt reduced by nearly Rs. 1,100 crore in the last financial year.

Volume and Demand

• DI pipe volume guidance for FY27 is ~5.75 lakh tonnes (DIP+CI).
• FY26 export volume about 21,000 tonnes; FY27 export share expected 22–25% of total.
• Exports focused on Europe/UK 60–70%; remaining to Middle East, Africa; SE Asia expanding.
• Jal Jeevan Mission 2.0 outlay around Rs 10,000 crore; Rs 6,000 crore released so far.
• Rest Rs 4,000 crore expected to be released soon; order-book visibility improving.
• Pig iron volumes in Q1 FY27 were ~45,000 tonnes.

Diversification & New Ventures

• Valve plant in India to commence by year-end; double valve revenue in four years.
• Industrial paints expansion: initial capex about Rs 100 crore for 17,000 kiloliters; long-term revenue Rs 800–1,000 crore.
• T.I.S. Services (Italy) revenue ~EUR 10 million; EBITDA ~13%; PAT ~EUR 7 million.
• Planned brownfield expansion in West Bengal for paints; ferro-alloy expansion adjacent to existing plant.
• DI share to fall from 85% to about 55% in 4–5 years.

Projects & Capex

• Paints capex schedule: 250–300 crores in first two years; total capex around 300 crores.
• Commercial production from paints capacity expected post-Q1 FY28; early books impact modest.
• Valve and paints diversification; Asia subcontinent 40–45% and Western markets 55–60% over 3–4 years.
• TIS debt to reduce from Rs 340 crore to about Rs 230 crore through repayments.

Balance Sheet & Liquidity

• Consolidated gross debt Rs 1,658 crore; net debt Rs 876 crore as of 30 June 2026.
• FY26 net debt reduced by ~Rs 1,100 crore; ongoing optimization of funds.
• Term debt for TIS ~Rs 340 crore; expected to fall to ~Rs 230 crore after repayments.

Q&A Highlights & Outlook

• Saudi sales about 2–3% of total; potential 1–1.5% impact after diversion.
• Expect H2 FY27 demand revival as fund releases accelerate.
• FY27 JJM outlay Rs 67,670 crore; Rs 10,344 crore sanctioned to states this year.
• Valve and paints expansion on track; commercial paints production starts post-Q1 FY28.
• Nuclear power valve approvals not yet; hydro-power valve development underway.
• FY30–FY31 revenue target Rs 7,000–8,000 crore; EBITDA 13–13.5%.

Meeting Details

• Date and time: 07 August 2026 at 4:00 pm IST.
• Type/mode: Group conference call conducted virtually.
• Event/organiser: Q1 FY27 Earnings Conference Call hosted by Electrosteel Castings Limited.
• Recording: Audio recording available (link not provided).

Participants

• No specific management participants named.

Purpose

• Discuss Q1 FY27 earnings with investors.

Additional Notes

• Audio recording available; no transcript or presentation details disclosed.

Business Overview

• Global integrated ductile iron manufacturer diversifying into valves and industrial paints.
• DI pipes, fittings, CI pipes produced across 7 manufacturing units with backward integration.
• Promoter stake rose to 50.14% in Q4 FY26.
• Largest exporter of DI pipes and fittings; serves 130+ countries; exports 22-25% of revenue.
• Valves acquired via TIS S.p.A in July 2025.
• Dividend policy consistent: 90-140% of face value since FY21-22.

Key Operational Highlights

• Q1FY27 consolidated revenue ₹1,426 Cr; EBITDA ₹139 Cr; EBITDA margin 9.5%.
• PAT ₹48 Cr; PAT margin 3.3%.
• Standalone Q1FY27 revenue ₹1,091 Cr; EBITDA ₹71 Cr; margin 6.3%.
• Net debt-to-equity 0.11x; credit rating AA / A1+.
• Exports contribute ~22% of revenue; serves 130+ countries.
• Valves expansion via TIS S.p.A; revenue target ₹800 Cr in 4 years.
• Industrial paints capacity expansion to 17,000 KL; capex ₹250-300 Cr.
• Road ahead: FR line product; double revenue in 4 years; India manufacturing planned.
• Africa and SE Asia to deepen exports; 130+ country footprint.
• DI pipe capacity 900,000 MT; DI fittings 21,000 MT; CI pipes 90,000 MT.

Financial Performance

• FY26 consolidated revenue ₹5,918 Cr; EBITDA ₹574 Cr; margin 9.4%.
• FY26 PAT ₹161 Cr; PAT margin 2.6%.
• Q1FY27 consolidated revenue ₹1,426 Cr; QoQ -4.5%; YoY -8.5%.
• Q1FY27 EBITDA ₹139 Cr; EBITDA margin 9.5%.
• Q1FY27 PAT ₹48 Cr; PAT margin 3.3%.
• Balance sheet: Total equity ₹5,924 Cr; total assets ₹9,461 Cr.
• Cash ₹333 Cr; investments ₹531 Cr; total liquid assets ₹864 Cr.
• Standalone Q1FY27 EBITDA ₹71 Cr; margin 6.3%.

Capital Structure & Liquidity

• Promoter stake 50.14% as of Q4FY26.
• Credit rating AA / A1+.
• Dividend payout policy: 90-140% of face value since FY21-22.
• Net debt reduced ₹1,109 Cr in FY26.
• Borrowings: current ₹1,259 Cr; non-current ₹254 Cr; total ₹1,513 Cr.
• Liquidity: cash ₹333 Cr; investments ₹531 Cr; total liquid assets ₹864 Cr.

Strategic Priorities & Outlook

• Valves: TIS S.p.A acquisition; target ₹800 Cr revenue in 4 years; India manufacturing planned; 16% margin.
• Industrial paints: capex ₹250-300 Cr; target ₹800-1000 Cr revenue in 5 years.
• Geographic expansion: Africa and SE Asia; 130+ country footprint; exports growth.
• Industry tailwinds: JJM 2.0 and AMRUT 2.0 outlays drive water infra demand.
• Recovery trajectory: JJM funds flow expected to pick up H2 FY27.

Risks & Mitigation

• Domestic DI pipe demand subdued due to delayed JJM funds; recovery anticipated with JJM 2.0.
• Diversification into valves and paints mitigates cyclicality and expands geographic footprint.
• Exports resilience reduces domestic exposure; 130+ country network.

Governance & Leadership

• Promoter stake increased to 50.14% in Q4FY26.
• IR advisory by Ernst & Young; no major governance changes disclosed.

Consolidated highlights

• Total income for Q1FY27: ₹1,465 crore.
• EBITDA: ₹139 crore; margin 9.5%.
• Profit after tax: ₹48 crore; PAT margin 3.3%.
• Diluted EPS: ₹0.8.

Standalone highlights

• Total income: ₹1,119 crore.
• EBITDA: ₹71 crore; margin 6.3%.
• Profit after tax: ₹6 crore.
• DI pipes and fittings sold: 1.20 lakh tonnes.

Outlook and strategic developments

• JJM 2.0 approved; budget outlay up to ₹8.69 lakh crore through Dec 2028.
• Central government contribution raised to ₹3.59 lakh crore.
• Demand expected to recover by end of current quarter FY27.
• Expanding valve business and entering Industrial Paints & Protective Coatings.

Financial results approved

• Unaudited consolidated and standalone results for quarter ended 30 June 2026 approved; Limited Review Reports attached.

Key leadership changes

• Ashutosh Agarwal resigns as Whole-Time Director and CFO, effective 10 August 2026.
• Rajesh Daga appointed CFO, effective 11 August 2026.

Operational approvals

• Approved manufacture of rubber products for Indian Railways; applying for vendor registration.

Regulatory and audit disclosures

• Independent Auditors' review notes a qualified conclusion due to coal block and ESL matters.
• WB incentive revocation act noted; Rs 4680.58 lakhs outstanding; claims under adjudication.

Material legal and financial matters

• Exceptional item for FY2026 related to past service costs Rs 3838.26 lakhs.
• Supreme Court (January 2026) affirms ESL is not guarantor; review contemplated.

Meeting Details

• Date: 7 August 2026; time and location not disclosed.

Key Agenda Items

• Consider and approve unaudited consolidated and standalone financial results for quarter ended 30 June 2026.

Other Notes

• Trading window closed for designated persons and their immediate relatives from 1 July 2026; opens 48 hours after results submission to stock exchanges.

Senior management retirements

• R.M. Gupta, SVP - DIW, retires; ceases as Senior Management Personnel; effective 31 July 2026; (Reason: Retirement).
• Rashmi Ranjan Das, SVP - LMW, retires; ceases as Senior Management Personnel; effective 31 July 2026; (Reason: Retirement).