This article first appeared on GuruFocus .
Release Date: August 06, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue from operations for Q1 FY27 grew 31.6% year-on-year to Rs 294.5 crore, driven by strong execution in the piping segment.
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Operating EBITDA margin improved to 16.9% in Q1 FY27 from 16% in Q1 FY26, supported by better capacity utilization and operating leverage.
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Received a significant domestic purchase order of Rs 386.82 crore from Bharat Petroleum Corporation Limited, one of the largest single orders in recent history.
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The Thailand facility is practically 100% booked for the next three years, with a target to increase revenue to Rs 170-200 crore.
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The Rs 300 crore preferential issue was allotted, with proceeds used to repay debt, expected to reduce net debt to Rs 400-425 crore by FY27 end and improve return ratios.
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The newly commissioned biomass pellet plant is expected to contribute to revenue, with a target of Rs 80 crore from the non-core segment in FY27.
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Management remains confident in achieving FY27 revenue guidance of Rs 1,500 crore plus and an EBITDA margin of over 19%.
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Strong order book of Rs 2,408 crore as of June 30, 2026, providing good revenue visibility.
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Siemens has signed a memorandum of understanding to provide continuous GT piping business starting next year, with 10 units in the first year.
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The seamless pipe plant is expected to contribute to margin improvement as utilization ramps up, with a target of 50% captive consumption and 50% outside sales.
Negative Points
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Around Rs 25 crore of dispatches scheduled for Q1 were pushed to Q2 due to deferrals by export customers in the Middle East.
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The HRSG order from GE is delayed, although an agreement for 15-16 units exists, which may impact future order inflows.
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The EBIT of the power plant division turned negative again in Q1 FY27, partly due to the focus on ramping up the new pellet plant.
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Gross margins are expected to be lower due to a higher proportion of material-intensive power sector jobs, though EBITDA margins are guided to remain above 19%.
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Working capital cycle remains elevated at 263 days, with debtor days increasing to 123, though management is working to reduce this.
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The pace of order inflows from BHEL for domestic power projects has been slower than expected, though other customers are filling the gap.
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The company has not yet received any direct inquiries from the Gulf region for reconstruction work, with potential orders expected only through OEMs.
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The Anjar facility is currently operating at only around 50% capacity utilization, with a target to reach 100% only by FY28-29.
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The tax rate is expected to fluctuate between 20-21% on a consolidated basis, which may create variability in quarterly net profit.
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The company missed a fertilizer-related opportunity as a foreign customer awarded the work to a local player in their country.
Q & A Highlights
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Q: Can you provide an update on the progress with GE regarding HRSG orders and the discussions with Siemens? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: We are on track with GE for GT orders, but the HRSG order is delayed. However, this will not affect our top-line this year as we are getting more traction from other customers like Nooter Eriksen, which has awarded us fresh orders. Our Thailand facility is now practically 100% booked for the coming three years. Regarding Siemens, we have signed a memorandum of understanding to receive continuous business for GT piping starting next year, with 10 units in the first year, 15 in the second, and 25-30 in the third. A Siemens team is visiting our Anjar facility in August to clear the plant for more business.
Q: Is the INR 2,000 crore order inflow guidance still applicable given the delays, and why did the EBIT of the PPA division turn negative again? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: Yes, we are likely to get more than INR 2,000 crores of order inflow this year. Regarding the PPA division's EBIT, we commissioned the pellet plant earlier, so we focused on running the pellet plant instead of the power plant to establish the business. From October onwards, we will receive new fuel, allowing us to run both the power plant and pellet plant fully, which will change the scenario.
Q: What is the revenue split and margin guidance for FY27? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: We are planning to achieve INR 1,150 to 1,250 crores from our piping segment, with the rest coming from other subsidiaries, including Thailand. We remain fully committed to our top-line guidance of INR 1,500 crores plus and an EBITDA margin of more than 19%.
Q: Can you provide a breakdown of the order inflow outlook for the remainder of the year by sector? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: The pipeline is healthy and equally distributed among oil and gas and power sector jobs. We are also targeting data center jobs. We have already received around INR 700 crores of orders this year, and we expect a minimum of INR 1,300 crores more, which could extend to INR 1,800 crores for the remainder of the year.
Q: What is your view on the thermal power opportunity, given some states have cancelled orders due to renewables? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: We are not shifting our entire focus to fossil fuel boilers. Our focus is equally large on oil and gas and power, and we are eyeing new sectors like data centers and nuclear. Even if PSUs are not putting up plants, private players like JSW and Vedanta are setting up their own power plants. We have no concern about booking orders in this sector until 2030.
Q: How should we think about the working capital cycle and debt levels going forward? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: The working capital cycle has improved, with inventory days down from 243 to 174 and creditor days down from 66 to 34. We are intentionally keeping creditor days low to get better purchase prices. Net debt as of Q1 FY27 was around INR 718 crores, and with the preferential issue proceeds, we expect net debt to be no more than INR 400-425 crores by the close of FY27. There is no plan for new debt this year.
Q: What is the peak revenue potential for the Anjar facility and by which year can we achieve it? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: Our plan is to achieve around INR 1,500 crores from the Anjar facility alone, and we should be able to do this by FY28-29.
Q: Can you explain the in-house manufacturing of P91 and P92 pipes and the savings involved? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: The pipes we manufacture in-house are primarily for coal-fired boilers of 660 MW and above, as they require high wall thickness and P92. This is not used much in HRSG business. We expect to earn at least around 20% EBITDA on this seamless pipe manufacturing, which will help our bottom line. Our plan is to have a 50-50 split between captive consumption and outside sales.
Q: What is the current asset turnover and utilization of the Anjar facility? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: We are currently using the Anjar facility at around 50% capacity. Next year, we expect to touch almost 70-75% or higher. On a consolidated basis, asset turnover is 1.39, up from 1.33 in Q4.
Q: Why have gross margins been depressed, and will they revert to normalized levels? A: Krishan Lalit Bansal, Promoter Chairman and Managing Director: Gross margins are lower this year because material costs are higher due to power sector jobs. However, conversion costs are lower, so our projected EBITDA margin of above 19% remains on track. The fluctuation is also due to the changing mix of job work versus with-material orders. The Malwa power issue has some impact, but the major impact is from the piping segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
