Scoda Tubes Limited (SCODATUBES) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Scoracubes Ltd. Q4-FI26 Warnings Conference Call. This conference call may contain four looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, All participant lines will be in the lesson only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Samar Patel, Chairman and Executive Director, Kora Dives Limited. Thank you, and over to Mr. Patel.

Thank you. Good morning, everyone, and thank you for joining us for the F526 earnings call of Soda News Limited. I hope all of you have had a chance to go through our financial results and investor presentation, which are available on our website in the stock exchanges. Joining me today on this call are Mr. Ravi Patel, CFO, Mr. Raj Shah, and Mr. Rishit Javadi from Capital Bridge Advisors, our investor relations consultant. Let me begin with a brief overview of how the business has progressed during F526. F526 has been a year of transition and investment for SCODA teams. While we have continued to deliver stable operating performance, a significant part of our focus during the year has been on executing a large-scale expansion across both seamless and welded product segments. As you are aware, we have been building capabilities to transition from a single segment stainless focus player to a more diversified stainless steel cubes company with a presence across both seamless and welded categories. Let me now walk you through the key highlights of Fi26. Fi26 was the year we prioritized operational efficiency. We have reported revenue growth of 7% for Fi26, reaching Rs.518 cross. The moderation in growth was primarily attributable to the shutdown of the piercing plant, impacted by gas shortages arising from the global geopolitics disruptions. Starting in April, the plant has resumed operations. However, gas prices continue to remain elevated. More importantly, our ability to significantly expand our gross margins this year provides a strong foundation as we look to scale our new capacity. Coming to FI27, we are expecting a 25% revenue growth with 14% to 15% EBITDA margins. Coming on to operational highlights, our seamless capacity has increased to 20,000 metric ton per annum, supported by additional lines and equipment, bringing our total production capacity to 21,000 metric ton per annum in FI27. The new welded facility will be operational by edge to FI27. Equipment delivery is expected by July-August, and trial runs are targeted to begin by the end of Q2-FI27. The welded capacity expansion adds 8,000 metric tons per annum of our new capacity at an investment of approximately 40 crore rupees. The total welded capacity post-expansion will be 21,150 metric tons per annum by the H1 F528 and expecting optimal contribution by F529. The welded segment opens new end-use sectors for us, that is, data centers, water treatment, construction, and HVAC, which primarily used welded products. Our mother hollow mill continues to support backward integration. We have moved to 100% captive consumption, intending to be fully

captive by FY28. Coming to solar power project, we are installing a total of

8.79 megawatt DC of solar capacity, 4.99 megawatt for the seamless facility, and 3.8 megawatt for the upcoming welded plant. This will primarily offset the high electricity consumption in the hot piercing process and finishing line. The process is, the project is expected to generate 137 lek. KWH annually, resulting in estimated electricity cost saving of 8.63 crore rupees per year, while also improving EBITDA margins by reducing our dependence on grid power and buffering utility price optimization. As we move on to the next phase, we are gradually shifting focus from capacity creation to improving utilization level and driving operating efficiency. Moving on to IPO process utilization. As you are aware, we successfully completed our IPO during the year, raising 220 crore rupees and getting listed on the NSE MBA. As communicated earlier, the proceeds were allocated towards capacity expansion, working capital requirements, and general corporate contributions. As of H2FY26, we deployed approximately Rs. 27 crore towards CAPEX and Rs. 50 crore towards working capital, with around Rs. 74.2 crore remained in our bank balance. We continue to utilize these funds in a disciplined manner aligned with our growth plan while maintaining a strong focus on capital efficiency and belushi strength. I will now hand over the call to Mr. Ravi Patel to walk you through the financial matrix. Thank you.

So, coming to financial metrics, revenue from operations grew by 7% year-on-year to Rs. 518.7 crores in FY26. In Q4 FY26, the revenue was broadly flat at Rs. 123.6 crores. Export revenue of total revenue stood at 34.6% and 44.8% in FY26 and Q4 FY26 respectively. Revenue breakup across geographies for FY26 is as follows. India, 339 crores, Europe, 137.8 crores, Americas, 30.7 crores, and 8.9 crores in others. EBITDA in FY26 stood at Rs.76.2 crores. EBITDA margin stood at 14.7% vs. 16.1% in FY25. In Q4 FY26, EBITDA stood at Rs. 16.7 crores. EBITDA margin stood at 13.5% vs. 14.1% in Q4 FY25. S grew by 22% year-on-year to Rs.38.8 in FY26. Pat's margins stood at 7.5% versus 6.5% last year, up by 100 basis points on a year-on-year basis. In Q4 FY26, Pat decreased by 7% year-on-year to Rs. 6.3 crores. Pat's margins stood at 5.1% versus 5.5% last year, down 40 basis points on a year-on-year basis. In FY26, the company incurred Rs. 110 crores in capex, net block of fixed assets as on March 31st, March stood at Rs. 194.4 crores and capital working progress as on March 31st stood at 8.8 crores. As we conclude, we remain optimistic about the road ahead. Product use moves into the next phase of growth. Our investment in capacity, the new-wilded facility, and our solar energy initiative give us confidence in delivering consistent and profitable growth in the years ahead.

We would now like, just to correct my previous statement regarding capacity expansion, our Madhavalo mail continues to support backward integration. We have moved to 70% captive consumption, not 100%, and intending to

be fully captive, that is 100%, by F528. Thank you. With that, we would now like to open the sessions for questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask the question may press star and 1 on their task on telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, We will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask the question. The first question is from the line of Sukrit Patel from EyeSight FinTrade. Please go ahead.

I have two questions. The first question to Mr. Samar Patel is a forward-looking question. What type of strategic levers are you prioritizing in FY26-27 to expand CODA's stainless steel and alloy tube portfolio while managing raw material price volatility and positioning the company for export-led growth? That's my first question. I'll ask my second question after this. Thank you.

Thank you for the question, sir. First of all, we are only into stainless steel. We are not into alloy pipes and tubes. And regarding the growth for the future, for the new capacities which we have installed, I think the prices are a bit volatile right now. Yes, you are very much correct because of the geopolitical situation, because our raw material is basically the stainless steel round bar, which is manufactured by melting of the scrap. And most of the scrap in India comes through the import. And currently, because of the geopolitical situation, the war, the prices for imports of the scrap has been raised. Currently, the prices for base material in stainless steel has increased by 25 to 30 percent. But as we mentioned that these prices will be carried forward to the customer in the, what we say that when we dispatch the orders or when we book the orders, we usually take the current prices of the raw material. That is, if the price is increased by 25 to 30%, it is passed on to the customer.

Thank you. My second question to Mr. Ravi is, what type of capital allocation and risk management framework are being applied in FY26-23 to balance working capital requirements, hedge against scale price and forex volatility, and sustain liquidity buffers for large-scale contract and capacity expansion? Thank you.

So, thank you for the question.

Now, I would like to first say about the inventory days which has to turn up. Due to the gas issue, we had to shut down the plant operations, which had led to higher inventory days. But eventually for going ahead in F527, we will manage this inventory days, which will go down to 160 days, which is currently 217 days. So that will help us for our revenue growth

using our financial operations. Thank you, and best wishes.

Thank you. Next question is from the line of Adeshwar Gulchha from Smarsh Capital. Please go ahead.

Hi, sir. Am I audible? Yes, sir. Great. So, if I'm getting it right, current SS capacity is around 20,000, and welded is around 1,000, and by effort 27 end, the building capacity is going to increase by around 13,000, right? Yes, true. Right, great. So, and since I've mentioned, I think I've been following you guys. So, this will be used to use our mother hollow capacity of 2000 MT per year, right?

Sir, can you be a little bit more clear because your voice is cracking?

Okay. Am I audible now? Great. So, after Fi27 to increase the capacity, what are we going to do?

Hello. Can you please repeat a question?

Yeah, I'm asking, since 13,000 welding will be done by HAPA 27, post HAPA 27, what are the expansion plans we're going to have in terms of capacity and CAPEX?

So, yeah. As we mentioned in the script, that we are also adding new welded capacity of 8,000 tons, which will be additional. And the investment is around 40 crore rupees, which is funded through internal accruals and terminals. So that capacity will be operational in Q1 F528 and will be full-fledged. I mean at the optimum level by the end of F529. So, in total, the added capacity would be 20,000 tons of seamless and another 21,000 tons of welded.

Got it. And sir, for 13,000, you should have planned to have a transition. JPEX has already been done or it's still pending?

It's still underway, sir. It's still under process. The CAPEX is still going on. So, we are expecting the welded plant will be operational in Q2, this financial year.

Okay. And the CAPEX for 13,000, so I've got 27,000. What's the amount for that?

25,000, 25,000, sir.

Okay, got it. And to increase the capacity to a total of 20,000 per well-dead, how much more PIPX is required?

Another 40 crores.

Another 40 crores. Great. And so, I'm assuming this will be done next financial year, right, for 20,000? Yes, yes, true. Got it. And so, is there any equity dilution happening or you will be still focusing on reducing debt and so, you know, will you be raising more funds to meet this demand or how is it?

For now, we don't have any plan for diluting any more equity. The additional capacity, as I mentioned earlier, which we are doing is from internal accruals and term loss. Yeah. So, there will be any more dilution, yes.

Got it. Does it hamper our plan to reduce the debt in coming here or still intact?

So, the debt will somehow increase because we are adding the capacities for welded also, as well as for solar projects, so approximately 50 crores debt will increase, but going forward after once the capacity is fully utilized, it will go on reducing the debt.

Got it. And sir, so we are going to increase by 20,000. I'm also going to increase the access capacity from 20,000.

No, no. For the seamless, we are not increasing any capacity. It's only for windows.

Okay, but going forward by FI29, FI30, are you planning any expansion?

So, we haven't planned for any new capex right now, but yes, there are a lot of chances that we do, and also there are chances that we add new products. But it all depends on the market availability at that moment, maybe in FY29 or FY30. So, how is the market and what products are in demand and what are the prices and the margins at that time. So, for now, we do not have any plans for UKPES. If we do, we will let you know in the future.

Thank you. So, I will request you to come back for a follow-up question. Next question is from Duhan of Sahil Sangwe, from Monarch Network Capital. Please, go ahead.

Yeah, I said good morning, and congratulations for a resilient set of numbers in difficult times. My first question is, for the CAPEX that we have planned this year, how much is already spent? What are we expected to spend this year? So, how much is the CAPEX outflow expected in FY27?

For FY26, as I told, 110 crores was incurred. For FY27, 41 crores are given for the advances and 8 crores is in working capital. So, adding all the solar expansion as well as the new building facility, total of almost 100 CR addition would be there for the current current CR.

Okay, okay, understood. Second, if you can help us explain the reasons for the delay in the higher diameter welded pipe capabilities, what we had initially planned was Q3FI27, so if you can help us with the reasons for the delay.

Yes. So, five, the reasons for the delay is, again, the same, the geopolitical situation. Basically, all of these machines are made out of raw steel, right? So, again, the same thing that I mentioned earlier, that there is a lot of shortage and the logistic costs have risen up, even the energy cost worldwide is growing. And that is the main reason. We placed these orders in according to our prior timeline, and all of the machines are supposed to come from China, right? So when we placed these orders earlier, almost it's been, I think it's been. More than six, five months, five to six months. But again, after the war situation in April, we got to know that it is going to be delayed and we will start receiving the machineries in maybe July or August. Even the suppliers are not very much sure. Because these containers, again, we have a logistic challenge. They come from China. So shipping costs and availability of the containers is the most major part. Because right now, because of the fuel surcharge and limitations of the fuel, the transportation is also at halt. So, this, all of this, because of all of these reasons, the CAPEX is slightly delayed. I mean, the project is slightly delayed.

Got it, got it. Lastly, if you can help us understand if there are some new approvals that we've received, any of the new end-user industries we will be entering or any of the new geographies, anything we expect in the next six months or anything that we've already received, this will help us understand on how we can achieve the volume growth that you've guided and the revenue growth for next year.

Yes. So, regarding the approvals, yet we haven't received any new approvals. As you already know that we were in process for some of the approvals. But let me tell you that for RINA marine approvals, which is basically for the marine sector in Italian market, we are in the final stage of approval. So, I think probably within three to four weeks, we'll be receiving the final approval from ZINA.

Okay. Okay. Sure. This is helpful. Thank you so much and all the best.

Thank you. Thank you. Next question is from the line of Viraj Parikh. From Carnival In Asset Management, please go ahead.

Thank you so much for the opportunity. Am I audible?

Yes, Viraj.

Yeah, sir, you earlier guided the revenue growth for 25% for FF27. Is it possible for you to elaborate a bit, you know, on terms of the geography, domestic export, if you can take it up and, you know, explain how are we looking at the market, where are we seeing more traction, and, you know, what's more promising, and is there any optionality for further growth given the current situation? Given the current situation, are you giving a conservative growth number or is there an optionality for a higher growth if the situation improves?

Thank you for your question, Virat. So, yes, basically, we are on the conservative side regarding the revenue growth. Obviously, we are all working very hard that we do above that we perform better than what we are giving you as a guideline. For the future revenue, which is targeted at a balance of 40% export and 60% domestic mix with continued focus on international expansion. So, as you already saw that there was strong Q4 F526 export growth, which overcame global grid disruptions driven by an expanding customer base and international demand. Resilient export performance was fueled by strong order execution, deeper overseas penetration, and global product acceptance. So, as we move forward regarding the 25% of the growth in the revenues, We are targeting around 40% of export and 60% of domestic mix, which includes both seamless as well as yield. Also, as I mentioned that we are on the conservative side, but we would like to revisit our growth outlook in HYFY27 because current times it's very

much difficult because of the geopolitical situation.

So, sir, I think we have, you know, approximately done 344 crore in domestic and 174 crore in export this year. Am I right? Yes, that's true. Yeah, so basically, if we maintain the 25% growth of 650 crore top line in FF27, we see this 340 going to approximately 390, 400. In the domestic side. So that's approximately, you know, 20% growth. And I'm just looking at the domestic numbers, you know, it's not, it's like the last eight quarters, it's not been like, it's been a little bit lumpier. Now the export has, you know, grown better for us. So, a bit more on the strategy side of the domestic side of how are we looking at the order book, the clients, the leads, if that can help us, you know, form our understanding of the 2020 growth, we're looking at the domestic side. Because I think export is outperforming your overall growth. So, it's a domestic, which is, I think, which will grow less than 25 next year.

So, the numbers which Kamath told, they are basically on a conservative side. As for, as we talk about the domestic demand, yes, there is potential demand from the power sector, which is going to may be conducted by GHDL on August. Thank you very much. Of course, if we get the tender, if we participate and get the tender, that will be a very good amount of order in hand. So, of course, the growth will be more than 20 percent what we are expecting. Also, there is a potential expansion in data center, which is driven by capex from the government itself, as well as the major players like Adani and Reliance. So the welded portion, which will be added, that is mostly used in the data center, welded pipes. So that demand is also going to be fulfilled by us. So, uh, maybe we, we may be expecting more than 25% growth in domestic, but on a conservative side, it's, uh, or as some of it, I told 20% for domestic and 25% for exposure.

The last question, get back in queue.

Uh, I think earlier participants highlighted a little bit on your inventory days. Uh, you know, uh, and you're saying that on a steady sale basis, they'll be around 160 odd days. So, uh, as you know, this, your goals, do you think that that month of series will be maintained or you will be maintaining a little bit of a higher inventory given the current situation? So maybe we should look at a stretch inventory this year and maybe a normalized inventory in FY28.

So, as I told earlier, the inventory days will be reduced in

FY27 from the previous FY26 because there was some gas issues and the plant operations was shut down nearly almost in March. So, the inventory days will go down in FY27 and it will remain in the range of 160-170 days for the future years.

And sir, what would be your peak debt next year, given our T-fix and moving capital requirements?

Next year it it will increase by 50 CR. So, assuming 250, 250 crores.

250 crores peak debt, right.

Sorry, sir, I did not get it. $250,000 is peak debt, right?

Yes, yes, yeah, right.

Yeah, perfect. Thanks a lot. All the best. I'll get back in queue.

Thank you. Next question is from the line of Parekshit, from Nimesha Investment Advisory.

Please go ahead.

Yeah, thank you for this opportunity, sir. First question I would like to ask is, why are we doing additional cap tax and well-dead files?

So, the answer to that is, sir. Initially, we did the CAPEX for the size range of up to 8 inches in welded pipes. But when we started to explore the market, and as Ravi Bhai mentioned, the new demands are coming up for data centers, HVAC systems, cooling systems, and water treatment plants, the usual size range which is expected to deliver in a package is up to 16 inches. So, the challenge which we probably were going to face earlier was that we were only able to supply up to 8 inches, and the customer would usually prefer a supplier who is able to supply the whole size range that is up to 16 inches. And that is the reason that after the IPO process, we decided to go up to 16 inches and add the additional capacity of 8,000 metric tons per wheel defiles. Above 16 inches, there is a new different technology which is called A358 pipes, which is used, but for welded pipes up to 16 inches is the required size range by each and every project and customer and even end users.

Okay, got it. And so, second question which I wanted to ask was, so what situation are you expecting on seamless and ready for FY27 and FY28?

So, basically, for the welded, the optimum utilization will be done in F529, which will be for the 13,000 metric tons, which we are doing from IPO process, as well as the additional 8,000 metric tons, which is we are doing from internal network. So, the optimum utilization for welded, we will reach in F529, and for seamless, we will reach at optimum in F528. For FY27, for seamless, we will be doing almost up to 70% of the utilization. And for welded, we will be doing, I think, this year will be around 25% out of the initial capacity.

25%, okay, okay. Sir, so in a real cause, you guided that? You are seeing demand from the power sector as well. So, have we received any orders from Bale recently and on the Bale side, I wanted to ask that. So, in the next five years, we are reading that government is targeting 50 gigawatt of thermal capacity addition. So, what is the demand of 5 cent tubes for 1 gigawatt of TFX? Thank you.

So, we don't have a proper idea that for one gigawatt, what kind of pipes and tubes or how much quantum is needed. But regarding your question, we are already approved with BHEL, as we mentioned earlier, even for NTPC as well. So, what we are awaiting is for the new tender to come in, which was previously planned to come in November or December, then it got shifted to come in March or April, and now it has shifted to come in basically June or July. So, the tender is being postponed by VATL itself. Maybe because of the workload or the previous order, which are not being executed in time, they are not willing to buy or prepare for the new orders. So now what we are expecting in maybe July or August, we will be participating in the next coming BHGN orders. As we mentioned earlier, we are also working closely with BARC and we are having a lot of good projects in our end in our order book for BARC as well.

Thank you, sir. Yeah, yeah, yeah, yeah, I'm sorry. No, sir, tell me.

Yeah, so, so I was asking that in the power sector, what do we mainly supply? Do we supply SS pipes or SS tubes in that seamless or welded?

Seamless SS pipes as well as tubes to the fabricators who produce heat exchangers from it.

So, boiler. So, the welded does not go in power sector.

Welded, currently we are still into the progress for the KPEX. Once we start home welded division, yes, we will be able to do welded. But currently, the major demand is for seamless parts.

Got it, got it. And so, last question, what is our current order book?

It's around 175 cross.

Oh, got it. Thank you so much.

Thank you. Next question is from Lano Sachin. From TradeQuest, please go ahead.

Hi, thanks for the opportunity. Am I audible?

Yes, sir.

Yeah, so my question is on the data center opportunity, right? So in the FI26, we did about 520 crore revenue. So how much of the data center revenue is present in the FI26? And in FI27, how do you see this increase, the data center revenue flow from the fielded supplies?

So, for the data center opportunity, vended pipes are utilized more. So, talking about FY26, we are not into F-Vended. It was total revenue from, generated from seamless only.

Okay.

For 27 years, we are targeting orders from data center, the data clients, so. As Samadbhai told, around 20-25% growth, which we are expecting, data center will be added on

the built-in ice. Also, the new CAPEX, which we are doing from internal accruals, we are bringing in specialized mails, which can produce the dimensions, which can be used specifically for the cooling system, condensing system, and HVAC systems for the data centers. So, that will also be very much beneficial in regards of the product line and the technical process.

Okay, can we assume that we already have an order book for data center, which you want to execute in 27?

So currently, we don't have any order book for data centers because we are yet waiting for the for the welded project to be started. But yes, we already have inquiries on hand. We have customers in talk. We are already in touch with them who are waiting for a welded meal to start.

Okay, and on the export, right, I see the export is going quite well. So, do you have any single sector from the export opportunity that is bearing to this growth? Any particular, like, ONG? Yeah, go ahead.

No, it's not a specific sector. We are doing good in all of the sectors, basically, in exports. Major of the products comes from oil and gas sector. That demand is around almost 50% of our supplies from oil and gas sector. Best 50% includes engineering industries, automotive sectors, you know, power projects and even the schooling industries and those kind of industries.

Just one request to the management, right? So if you can conduct quarterly calls and also if you can disclose as and when you get new orders to the exchange, that will be beneficial because the con calls happen once in six months and it's kind of difficult to know where the company is standing in this dynamic world. So request quarterly call and if you get orders, right, please inform the exchanges so that we also get to know what's happening.

Okay, sir. We'll sure discuss this internally and we'll look forward to it. Thank you.

Thank you. Next question is from the line of Jugal Parekh, individual investor. Please go ahead.

Am I audible?

Yes, sir. Hello, am I audible, sir?

Yes, sir. You're audible.

Sir, finally. Can you explain a bit more what went wrong in the last quarter so that we could not meet our guidance? Sorry sir, can you repeat? My question is regarding the disruptions that happened in the last quarter. Could you explain it a little bit more whether it was one time? Will it impress us more?

Yes, sir. So basically, in the month of March, we saw the gas disruption. The plant was completely on the shutdown, I mean, because of the gas for almost 15 to 17 days. I think starting from 7th or 8th of March up to, I think, 21st or 22nd. So the disruption was basically all because of the war situation. So we use here PNG gas, okay, and PNG gas usually comes from Qatar for India. And because of that, there was a major blowback to the company. So in the absence of gas supply disruption, revenue could have been approximately 140 crore for the quarter, you know, but the gas cut in late March was the single largest revenue had been curtailing production at a critical period. So, war-related raw material inflation added cost pressure, but the primary top-line impact was from gas availability.

Okay, okay. So, how do you see the situation now? Is it normalized? Will you have some impact in the quarter-run as well?

Availability of the gas is normalized, but the LPG, the prices are still increasing. So, rising LPG prices have increased production costs and impacted operating efficiency as well. Due to lack of availability in the month of March, it impacted the production volumes by 40%. Although the availability has normalized the LPG prices remain elevated, but the impact, it is a pass-through at a customer level is a lack.

Okay, so now you see the situation is run over structural. Your demand of the products that we make is impacted or not?

Do you see the demand? Only the pricing has been impacted, but now it is being passed on to the customers as well. Okay.

Secondly, why do we have to cancel the acquisition that we planned?

So, investment was withdrawn primarily due to operational and cross-border remittance challenges from India. Hurdles include concerns related to regulatory compliance, banking, forex, and execution facilities. And there's also one more reason. Yes, import quota is expected from 1st of July in Europe. The benefit of setting up a company there was diminished because of the quota, which is being reduced by 50% in Europe, and the safeguard duties increased from 25% to 50%. So, it doesn't make any sense that we would get any benefit because of that.

Okay, sir.

That's understandable. Now, two small requests. One is kindly post a press note when the results are surprising because had the call been conducted yesterday, it would have been easier for investors to tackle. But first, the results came at the last moment. After like two days are remaining in this month and then the window will be closed. So, we published the results late, that is okay, but there should have been a call right after that. So, there is a surprise element, negative surprise could have been reduced. Sure, it is requested that the call may be held just after the results or a press release explaining the results of surprises could be made.

Okay, sir. We'll consider it and we'll look into it. Thank you for your attention, sir.

Thank you very much. Jigal, we'll request you to come back for a follow-up. Next question is from Naimus Lok from Xylem PMS. Please go ahead.

Yes. So just wanted to understand one thing, like when I fall let's share peers is able to get

better margins about 100 to 200 basis points. Like what are the structural measures that we are taking to bridge this performance gap?

So, in F526, EBITDA declined due to under-absorbed fixed cost from lower utilization of new capacity. So, operating profitability dipped as expanded capacities were feeling the commissioning on and stabilization phase.

So, of course, the lower Q4, F526. Margin were declined. Also, we would refrain from commenting on the competition on their margins. Sure, sir.

And, sir, like, we have started a new capital solar project. How much will this help in reducing the cost and improving our margin? So, what's the operating leverage to be expected in this project?

So, as I told earlier, we will get a certificate. The annual savings will be around 4.9 crores for the seamless plant, as well as 3.8 crores for the welded plant. So, the total annual savings will be of 8 crores.

Sure, sir. And sir, you also mentioned about the data center led orders.

So, how will this flow through our welded capacity once it flies? So, what's the timeline we can expect for this order? So, as we mentioned, we already have the inquiries on hand, we are in touch with the customers as well as end users, and welded project is expected to, we are expecting the production to start for the welded project in S2 this financial year. So, probably in the last quarter of this financial year, we can expect an order booked from data Thank you.

Slokal request to come back for a follow-up. Next question is from Lionel Shubham from Chhatteshgarh Investments. Please, go ahead.

Yeah, hi, I'm Audible.

Yes, sir.

Sir, what was our power cost for this quarter and for FI26?

So, basically, power and fuel cost is around the...

Sir, sorry to interrupt you. Shubham, can you please mute your line from your side? Thank you. Sir, please go ahead.

So, the total power and fuel cost is approximately 17 to 18 percent of the total expenses. Of the total expenses, 17% is the cost for power and fuel.

Okay, and what was the increase for us for current water in terms of power cost?

So, the gas prices are increased by around 25%, but that would be eventually passed on to the customers.

Thank you. Shivam, I'll request you to come back for a follow-up. Next question is from Nainof Kappal from Arth Road Fund. Please go ahead.

Hello, I'm Audible.

Yes, sir. Good morning, sir. And my first question is on the production and sales volume. Can you please shade the sales and production volume across Seamless, Welded and Mother Hollow in FI26?

Sir, due to competitive reason, we do not share the volumes of any products. Sorry, sir.

Okay. Can you please share the utilization across the segments, if possible?

No, sir, we can't say that, because if you do that, it's very easy to calculate the volumes, you know.

No worries, sir. Sir, my next question is on the plant shutdown that you mentioned. For how much time the plant was not operational?

For almost two weeks, sir.

Two weeks.

So, the finishing lines and the coal productions were there, but because of the gas availability and the disruption, the plant was on the halt, because each and every process needs annuling process, which includes the furnaces, which again needs the gas to them. Got it. There was no activity.

Got it. This was for mother follow, right?

For each and every product, because even for the seamless pipes, which is finished goods, we need to do the solution handling process, which includes gas.

Got it. Inside the order book you have mentioned of 175 CR, what is the exhibition timeline for this, and what is the files of the order that we are expecting from Bale?

So, current order book that is 175 crores is for 3 to 4 months from now, and For DHCL, I think we don't expect anything because yet the tender is not out. Once the tender details are out, what kind of volumes they are purchasing, maybe we can have a better idea. Because there are chances to give you the tender will be amended because BHCL is already in too much of work pressure and a lot of backlog there is also.

Understood, sir. Understood.

And then my last question is on the finance cost. Even our borrowings has been decreased this year. What was the reason that led to increase in the finance cost? So, FY26 finance cost increased primarily due to borrowings from ongoing capex and investment, solar project funding, and higher working capital utilization further drove up these expenses, and also the interest on delayed income tax payments also contributed to the overall finance expense.

Thank you. Kappal, I will request to come back. Next question is from line of Aryan Bhatia from Invade Research. Please, go ahead.

Hi, thanks for the opportunity. My question is on the capacity utilization is recorded by 2017. So, just wanted to confirm the numbers. So, 70% utilization will be on the 20,000 capacity and 25% utilization on the value that we are expecting is on the 13,000 capacity. Am I right?

Yes, absolutely. And second question is on the technology.

So I was reading, one of the leaders was saying like that in future, for seamless pipes, in the upcoming future, major of the end-user will be preferring excluded technology as compared to the piercing. So if you can help us understand like what is the difference between the seamless pipes made from the excluded one and from the piercing one.

Yes. So, basically, I think you have... You don't have the correct information because currently the market trend is even the end users who used to buy only hot extruded pipes have opened their procurement for hot pierce pipes as well because first of all, hot extruded pipes are too expensive for the market. Second, we don't have that much kind of capacity within India, which can satisfy the demand of the domestic market. Third is even the hot extruded manufacturer has to compete with a company with a hot piercing mill, where the price difference is usually very extensive. And that is the reason even the end users are now buying hot CS5. For example, even BHEL used to buy only hot extruded pipes earlier. But now, they are open for hot-piercing pipes as well. Even BARC Baba Atomic Research Center used to buy only hot-excluded pipes just two or three years ago. And now, even they have changed their procurement policy, and now they are even inviting hot-pierced mails or those companies with hot-piercing mails to participate in their tenders or RFPs. So, I think for the future... Even more companies will allow or change their procurement policies from hot exuded pipes to hot fitness pipes. So, yeah, the future is okay and stable for the mills having hot players.

And, sir, last question is, if you can't hold the bit of a button in welded and seamless, like, what is the bit of a button we are currently getting?

No, sir, sorry, we are bound not to share that information. Because of competitiveness.

Okay. Yes. Okay. Thank you. Thank you, sir.

Thank you. Next follow-up question is from the line of Adeshwar from Smash Capital. Please go ahead.

The questions are answered, so no further questions. Thank you.

Thank you. So, yes, questions are answered. We'll move on to the next. Next question is from land of Akshay Darji, from SelfShine Industries. Please go ahead.

Thank you for the opportunity. My first question is, what is the average realization per ton for seamless pipe?

Sir, we are not sharing the information due to competitive reasons.

Okay, and my second question is, could you share the order book quantity-wise breakup between thin ice and welded pipe?

Sorry, order book.

Order book quantity wise, break up between seamless pipe and welded pipe?

No, sir, even that we cannot share because of competitiveness.

Okay, that's all from my side. Thank you.

Thank you. Next question is from the line of Sachin from TradeQuest. Please go ahead.

Hi, thanks. Thanks again for the opportunity. So, just want to clarify some clarification. So, we had a few days lost because of certain disruptions in Q4. Qualitatively, I want to know in Q1, can we consider that it will be an organized quarter with all the operational, especially on the oil and gas issues solved, with all the three months available for revenue generation?

Yes, sir. Everything is smooth now. Everything is normalized, just a little bit higher cost. But yeah. Okay. Yes.

Okay. And a quick question again on the seamless capacity that came online a few months back. So are we seeing any operational issues or technical issues there or is it like, you know, completely integrated and ready to go for production revenue?

We are still completely integrated. We are not facing any kind of technical challenges right now. And yes, we are all ready to go and we are in fact already, as we talk now, we are already running at our, you know, full capacity for this quarter.

Okay, so the order book that you mentioned, right, 175 crore for three to four months. Do you not have any long dated order, say, which have a quarterly supply with visibility of multiple quarters, because three to four months, 175 crore seems like a very short time and with no visibility for, say, the next few quarters. So I just wanted to understand how does the company work on the order book side?

Thank you. As we mentioned that for the next upcoming BHEL tender, we'll be participating. So, such kind of tenders with higher volumes are usually tend for a very long period of quarters. But currently, as we mentioned that we are working, you know, with multiple customers, stockholders, export customers, fabricators, and even with domestic stockholders, the order book is usually for three to four months. But, once we participate in the DHCL tender, and once we have some good quantities from them, then yes, we will be able to do for a long-term order.

Okay, last question is, once a certificate is a confirmed order book, have you submitted any tenders or bids for those tenders, and they are in various stages of evaluation at the customer site?

Not right now, we are still waiting for the new tenders to come in, especially from BHEL and BARC.

BARC, okay, thank you.

But this kind of order book and this run rate on an average will be continued.

You mean to say like you keep on getting small orders, is it? That's what you're saying?

It's not usually small orders. There are also big orders out of 175 rows, but yes, these orders, we receive them continuously every two months or every one month.

Okay, so you're confident of this run rate or whatever you're showing right now?

Yes.

Okay. Okay, thanks. Thanks for answering all the questions. Thanks. Thank you.

Next question is from Lion of Shubham, from Chhattas Kadha Investments. Please, go ahead.

Sir, our debtor is, sorry, our distributors increased by 36%, whereas our revenues were only 7% up. So what was the reason?

So, for debtors days, there have been major supply chain disruption, which resulted in longer payment cycles across the industry, and overall logistic issues led to higher debtors days.

So, supply chain issues, how could that lead to elongated debtors days? Your payment should be done regardless of supply chain, right?

No, but we are working for the project orders, like if any fabricator is working for orders of exports, the equipment is shipped, it has to be shipped to the Middle East or Europe. So, that's the supply chain.

In fact, payment cycle across the industry was this one.

And do we have milestone-based payment system for our project-based orders, or how does it work?

Sorry, milestone-based? No, there's nothing like milestone-based. Usually, agreed comes between a supplier and a manufacturer. I mean, a fabricator and a manufacturer. This is usually, it depends on mutual understanding of how the situation is.

Got it.

And one last question on industry as a whole. So, you said we had a plant shut down. So, was it an industry-wide situation that happened or was it just to our geographical area?

It was industry-wide, but it is also very much important to understand that it was also geography-wise. So, there were both factors working.

Okay. Thank you. Thank you. Ladies and gentlemen, we will take that as a last question. Now, on the conference, over to Mr. Samad Patil for closing comments.

Thank you, everyone, for joining today's call. Please feel free to reach out to Capital Bridge Advisors in case of any queries. Have a good day.

Thank you very much. On behalf of CoreRTU's Permitted, that concludes this conference. Thank you for joining us and you may now disconnect, friends. Thank you.