This article first appeared on GuruFocus.
Release Date: August 20, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Strong order book across all product segments, with pipe orders in Maharashtra at 5,500 tonnes and Jharsuguda at 1,800 tonnes, indicating robust demand.
Revenue growth of 20% in Q1 FY27, driven by the Jharsuguda plant, with expectations of further growth from new product lines.
Successful ramp-up of new products like octagonal poles and high mast poles, with orders already at 75-80% of installed capacity.
Healthy order pipeline for transmission line towers (around 2,000 tonnes) from state electricity boards, with potential for more after Power Grid approval.
Plans for a new plant in North India to capitalize on high demand, with land purchase in talks, indicating expansion and growth potential.
Negative Points
High dependency on Jindal Steel for 80-82% of revenue, though the company aims to reduce this to 70%.
Capacity utilization at the Sundargarh plant is low at 18%, with pipe production at only 12%, indicating underutilization.
Delays in setting up a second galvanizing tank, which is crucial for increasing production and fulfilling orders, now expected by September 1.
Monopole product launch is pending certifications, which could take until Q3, delaying potential high-margin revenue.
The company is rejecting orders due to capacity constraints, including export and hollow section orders, potentially missing out on additional revenue.
Q & A Highlights
Q: What is the current order book visibility for towers and poles, and what utilization levels do you expect for Unit 3 by the end of FY ’27? A: Vibhor Kaushik, Managing Director, stated that the order book for transmission line towers is healthy, touching approximately 2,000 tonnes, with orders from MP, Chhattisgarh, Maharashtra, Sikkim, and Chennai. He noted that the second galvanizing tank, delayed by monsoon, is expected to be operational by September 1st, which will boost Q2 and Q3 dispatches. For poles, sales are expected to ramp up gradually from 100 tonnes this month to a target of 300 tonnes by October. He emphasized that while it’s difficult to give a specific number, the contribution from these new products will be significant, potentially adding INR 100-150 crores in revenue once the new galvanizing capacity is online.
Q: What is the current capacity utilization at the Sundargarh (Jharsuguda) plant, and what is the timeline for full utilization? A: Vibhor Kaushik clarified that the Sundargarh plant has a total capacity of 156,000 tonnes, and Q1 utilization was around 18%. However, he explained that capacity utilization is product-wise, not general. For instance, the crash barrier line is maxed out, which is why they are installing a new line. The galvanizing tank is also overbooked, leading to the installation of a second one. For pipes specifically, utilization is at 12%, but with the new galvanizing tank, order booking could easily push this to 24-30% by October. The focus is on keeping the galvanizing tanks full, as that is where the margins are.
Q: What is the current order book size across all segments? A: The Managing Director provided a detailed breakdown of current order bookings: Mumbai has 6,500 tonnes of ERW pipe orders (with 1,000 tonnes on hold), Hyderabad has 2,000 tonnes of pipe and 850 tonnes of crash barrier orders, and Jharsuguda has 1,800 tonnes of pipe and 600 tonnes of crash barrier orders. Additionally, transmission line tower orders are close to 2,000 tonnes, and pole orders are around 250 tonnes. He highlighted that these order levels are significantly higher than historical averages, indicating a very strong market.
Q: What is the revenue bifurcation by product, and how is the dependency on Jindal Steel being managed? A: Vibhor Kaushik stated that current revenue is 83% from pipes, 12% from crash barriers, and 5% from other products. Regarding Jindal Steel, he acknowledged that they account for roughly 80-82% of revenue, with a target to reduce this to 70%. However, he framed the relationship as a win-win, noting that Jindal provides a premium brand and reduces marketing efforts, while Vibhor provides manufacturing capacity. He emphasized that while they are pushing other products, they will not shy away from organic growth in the pipe segment.
Q: What are the margin profiles for the newer, higher-value products? A: The Managing Director ranked the products by margin potential: monopole (highest, pending certifications), followed by transmission line towers, poles, crash barriers, and then pipes. He noted that some transmission line tower orders have yielded margins as high as 10%, compared to the company’s overall margin of around 2%. He expects these higher margins to persist for at least 2-3 years due to the engineering-intensive nature of these products and the current demand-supply gap.
Q: Are there any plans to expand into new regions, particularly the North? A: Yes, Vibhor Kaushik confirmed that due to high demand and inquiries from the North, the company is planning to set up a new plant there. The land purchase is in talks and should be finalized soon. The first phase of this expansion will focus on crash barriers, the company’s most established product, with plans to add poles and transmission line towers later. This expansion will be done through a subsidiary to provide clear visibility on the new plant’s performance.
Q: What are the expectations for Q2 FY ’27 revenue growth? A: The Managing Director stated that Q1 saw a 20% increase in turnover, and Q2 is expected to see a similar 20-25% increase. This growth will be driven not only by the established pipe business but also by the ramp-up in transmission line towers and crash barriers. He mentioned an expectation to increase sales by around 1,000 tonnes monthly, translating to roughly INR 10 crores in additional monthly revenue.
Q: Are there any new products in the pipeline beyond the current portfolio? A: Vibhor Kaushik revealed that the company is working on RSJ poles, a product for power distribution lines. They have already taken a 500-tonne order as job work to test the waters, and they expect this to become a formal product category by Q3 or Q4. Other products like solar structures and railway bridges are in the research stage. He emphasized that the company is strategically positioning itself to benefit from India’s infrastructure and power sector growth.
Q: What is the company’s CapEx plan for FY ’27? A: The Managing Director explained that CapEx is driven by demand and capacity utilization. Since demand has exceeded expectations, they are currently installing new galvanizing tanks and a crash barrier line. He stated that further expansions, such as additional galvanizing tanks in Jharsuguda, will be considered as order flow dictates. The company’s philosophy is to invest in capacity only when current utilization is maxed out, ensuring efficient capital deployment.
Q: What is the rationale behind the recently incorporated subsidiary? A: Vibhor Kaushik clarified that the subsidiary was created specifically for the planned plant in the North. The purpose is to provide clear financial visibility (turnover, depreciation, etc.) for the new plant’s performance, which will be beneficial for investors. The subsidiary will initially focus on crash barrier production, leveraging the company’s existing expertise, before expanding into other products.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.