• In March 2011 quarter, Jindal Saw, part of the Jindal Group and manufacturer of pipes, reported 55% crash in net profit to Rs 80.19 crore due to lower volumes, weak operating performance and increase in non operating expenses. The Blended EBIDTA margin fell by 37% to Rs 8212 per Metric Tonne.

The topline grew by marginal 7% to Rs 1163.09 crore on 8% fall in volumes. The operating profit margin (OPM) crashed by 1140 bps pulling down operating profit by 39% to Rs 175.67 crore due to execution of low margin orders including H Saw orders of GAIL, higher freight cost on few export consignments, higher input and other costs for all the segments.

• Jindal ITF reported topline of Rs 250 crore with positive EBIDTA in FY11

• Forecasts topline of Rs 6500 crore with EBIDTA margin of 17-18% in FY 12. Targets sales volume of around 1.1 million tonnes in FY 12.
• The EBIDTA is expected to be higher in Q4 FY 12 due to contribution from iron ore mine. The iron ore mine allocated in Rajasthan would commence operations by Sep 2011 and contribute to the margins in March 2012 quarter. It targets iron ore volume of 8 lakh tonnes. The implementation of iron ore mine would enable cost saving of Rs 300 crore on EBIDTA on conservative basis as per the company. On a per tonne basis, the cost saving would be Rs 3500.
• Holds order book of over USD 1 billion as on April 2011. It includes export order of around 55% of total.
• The international prices are 40% higher than the domestic prices.
• Targets topline of Rs 1000 – 1100 crore in FY 12 for Jindal ITF.
• The EBIDTA margins would be low in Q1 & Q2 FY 12 as the company has balance 70,000 H saw low margin orders of GAIL which would be executed in Q1 & Q2 of FY 12.
• The Abu Dhabi plant would commence operations in December 2011.
• The Phase II of pellet plant expansion would commence operations in 2013-14.
• Has limited control over pricing due to increased competition in India.
• Realizations break up in March 2011 quarter is: L Saw pipes Rs 67000, H Saw pipes Rs 42000, Ductile Iron pipes Rs 45000 and Seamless Tubes Rs 73000.
• Wages increased by 11 – 12% on annual increment in March 2011 quarter.
• Sales of L& H saw pipes are on contract basis
• Ductile pipes sales are not carried out on contract basis. Thus are more affected by the spot iron ore and coal prices.