The financial of the company for the quarter and six months ended September 2011 do not include the financial of Investment Undertaking on account of its demerger from company w.e.f 1^st Jan 2011 and thus are not comparable with those of the previous period.

• The current order book is app 665 million, the break up is as under:

0. o Large Diameter Pipes – US$ 453 million
1. o Ductile Iron Pipes – US$ 149 million
2. o Seamless Pipes – US$ 63 million

The above orders are slated to be executed by end of March 2012. The company has participated in various bids and likely to get orders in phases. The current order book includes export orders of app. 67%. The major exports orders are from Middle East, Gulf region and South East Asia, China and Far East.

Operational and financial highlights

For the 2nd quarter ended Sep 2011, the sales break up was as under

1. - Sale in India - 49%
2. - Sale outside India - 51%

Quarter Performance

The operating income grew by impressive 81% to Rs 1449.96 crore in Sep 2011 quarter primarily on account of higher sales volume due to dispatches from closing inventory of finished goods at end of June 2011 quarter. The total sales volume grew by 78% to 240545 MT. Segmentwise, the sales of large diameter pipes which consist of both L and H saw pipes grew by whopping 178% to Rs 824.8 crore primarily on significant growth in volumes, due to large domestic order, though constrained by lower realizations. On the other hand, ductile iron pipes sales fell by 19% to Rs 244.8 crore on 9% fall in sales volume and lower realizations. Only the seamless tube sales grew by impressive 65% to Rs 332.6 crore on 31% growth in sales volume and improvement in realizations.

Pressure on high coking coal and inconsistent availability of iron ore in ductile iron business and execution of large low margin domestic order led to whopping 1110 bps crash in OPM to 12.1%. Thus the operating profit fell by 5% to Rs 175.90 crore. Raw material costs, as % to sales net stock adjusted, grew by 510 bps to 70%. Also the other expenditure grew by 90 bps to 13.6%. Only the traded goods cost and staff cost fell by 20 bps to less than 1% and 40 bps to 4% respectively.

The PBT before EO fell by 8% to Rs 123.19 crore on fall in other income and increased depreciation costs though moderated to some extent by fall in interest cost. The depreciation costs grew by 4% to Rs 35.32 crore while the other income crashed by whopping 84% to Rs 1.45 crore. The interest cost fell by 31% to Rs 18.84 crore. However on incurring EO expenses of Rs 48.29 crore (against none in Sep 2010 quarter) representing forex loss on sharp rupee depreciation against USD, the PBT after EO crashed by notable 44% to Rs 74.90 crore. Further 450 bps increase in effective tax rate pulled down the net profit by notable 46% to Rs 53.73 crore.

Half Year Performance

In half year ended Sep 2011, the topline grew by healthy 33% to Rs 2585.60 crore. Spike in raw material costs led to 910 bps fall in OPM to 13.7%. Thus the operating profit fell by 20% Rs 354.06 crore. Further the PBT after EO crashed by 42% to Rs 193.44 crore primarily on account of incurring forex loss of Rs 48.29 crore on sharp rupee depreciation against USD. Further spike in effective tax rate by 520 bps led to 45% fall in net profit to Rs 136.53 crore.

• As at Sep 30, 2011, net debt in the Company (standalone) was app. Rs 2550 crore (app. USD 520 million) including ECB/ long term loans and fund based working capital and other unsecured loans. The loan includes approximately Rs 1860 crore (approximately USD 380 million) on account of shot term working capital requirements which shall reduce gradually with sales and collections.
• To meet the long term funds requirements for capital expenditures etc, company may raise long term funds.

Status of Demerger of the Investment Undertaking of the Company

Consequent upon the approval of Scheme of Arrangement and Demerger (Scheme) under sections 391-394 of the Companies Act, 1956 between the Company and Hexa Tradex Ltd. (HTL) by Hon'ble High Court of Allahabad which has become effective from 5th November, 2011, the Investment Undertaking of the Company stood transferred and vested in HTL with effect from the appointed date 1st January, 2011. The Board of Directors has fixed 23rd November, 2011 as Record Date for ascertaining the shareholders of the Company to whom equity shares will be allotted by HTL in consideration of transfer of Investment Undertaking of the Company to HTL. HTL shall allot 1 (one) equity share of Rs. 2/- for every 5 (five) equity shares of Rs. 2/- each held by the shareholders as on the Record Date.

STATUS OF NEW PROJECTS/ CAPITAL EXPENDITURES

Following major initiatives are under implementation:

• a) Ductile Iron Plant with additional waste heat recovery based power project and coke oven plant. This expansion will provide additional 200,000 MTPA ductile pipe with wider range of sizes etc. The project, with a capital outlay of app. Rs 4000 million, is expected to commence operations in accounting year by March 12

• b) Greenfield Ductile Iron pipe facility in United Arab Emirates through a joint venture company with majority stake with Jindal Saw Limited. The plant shall have a capacity of 300,000 MTPA and the operations will commence in two phases. First phase is expected to commence operations by March 12.

• c) Iron Ore Mines: Pursuant to the allocation of Iron ore mines in the State of Rajasthan, the company has already initiated requisite steps to roll out the project implementation including civil work, finalization of engineering details and installation of the plant and machinery. There are delays and certain administrative approvals including setting up of power substation etc The company expects a marginal delay in trials which are expected by March 2012.

• d) Drill pipe at USA: The plant has already commenced trial runs and the necessary approvals are received. The company has initiated marketing to secure orders.

Through its wholly owned subsidiary, Jindal ITF, the company has ventured into businesses like water and waste water management, urban waste management, coastal and inland water transport and rail wagon manufacturing. Jindal ITF is the driving impetus behind development of sustainable infrastructure that matches global standards. Considering the extent of urbanization and expected growth in Indian economy, the management is focusing on urban utility services. Therefore to meet the targets Jindal ITF is working towards strengthening the team for market segments and territories. Jindal ITF bagged three major municipal solid waste processing projects in Punjab and has invested in largest waste to energy facility in India at Okhla, New Delhi which is expected to commission in November 2011. Jindal ITF received Frost and Sullivan award for "Waste to energy Deal of the Year" for Year 2010 in Municipal Waste to Energy Segment in lieu of this project. Jindal ITF is eyeing similar opportunities in other parts of the country as well. The revenues have started flowing for Jindal ITF businesses and it is poised for exponential growth. The JITF waterways business and NTPC have entered into a strategic agreement for creating and operating the infrastructure for transportation of Coal through inland waterways, required for NTPC's power plant located at Farakka, West Bengal. This is first of its kind marquee project in India. The water infra business has bagged two new projects.

Management Outlook

The company's product portfolio includes LSAW and HSAW pipes, hot milled and cold milled carbon steel, alloy steel and stainless tubes and pipes and DI pipes of various grades and dimensions. Even though the demand for these products is expected to improve gradually but currently we are witnessing a weaker trend due. Due to mismatch in demand and supply there are pressure on realizations and profitability.

The price volatility and availability of raw materials, higher petroleum prices, sharp fluctuations of currencies and especially significant weakness in Indian Rupee against USD, increasing financing costs etc are likely to remain major issues in short to medium term. In additional to this, the global economic turmoil is likely to affect the sector and thus we anticipate that this trend of weakness may continue for some more time.

The company expects that increased coking coal prices will specifically affect the profitability of Ductile Iron pipe segment in the short term and perhaps till end of FY 2012. To counter the impact of these issues, the company is working hard towards cost control, improvement in operational efficiency, effective utilization of the resources and on the top of that giving high priority to the implementation of the iron ore segment.

Promoters Holding

The promoters holding and promoter group shareholding stands unchanged at 46% in the quarter ended Sep 2011. The promoters have pledged 0.03% of total shares of the company.

The scrip closed at Rs 143.35 per equity share on BSE, down by 2.88% on 12^th Nov 2011