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Jindal SAW Ltd
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Ladies and gentlemen, good day, and welcome to Jindal Saw Limited Q2 FY '23 Earnings Conference Call hosted by PhillipCapital India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Singh from PhillipCapital. Thank you, and over to you, Mr. Singh.
Good evening, everyone. I welcome you on behalf of PhillipCapital and Jindal Saw for Jindal Saw's Q2 FY '23 Conference Call. From management side today, we have with us Mr. Neeraj Kumar, Group CEO and Whole Time Director; Mr. Vinay Gupta, Global Head-Treasury; and Mr. Narendra Mantri, President Head Commercial and CFO. Without taking any more time, I would hand over the call to Mr. Neeraj Kumar for opening remarks. Over to you, sir.
Good afternoon, friends. On Friday, we have finished our Board meeting for the half-yearly results. As all of you would have seen on the numbers, just to reiterate some of the high-level numbers, top line for the quarter, INR 3,367 crores as compared to INR 3,019 in the Q1 and INR 2,571 in the Q2 last year, which is essentially a 12% growth on trailing and 31% growth on year-to-year. EBITDA, INR 301 as opposed to INR 255 for Q1 and INR 380 for Q2 last year. Going down, PBT 81 as opposed to 37, which was INR 196 Q2 last year.
Let me just also give you some highlights of the consolidated numbers. Q2 consolidated numbers, 4,067 as compared to INR 3,510 Q1, INR 3,005 last year Q2. EBITDA, INR 355 million as compared to INR 271 million as compared INR 410 Q2 last year. PBT 89% as compared to 1% for Q1 and 179 for Q2. Now if you just look at these numbers, I'll just hold on there. And if you look at just these numbers, what does this indicate? A top line has begun to grow and it looks like we are entering a phase of very good business, which gets collaborated by the order book, which is at an all-time high of $1.3 billion.
So the business is now growing. If you now analyze the way the EBITDA is -- raw material consumption is then -- the high cost inventory that we had on our books has more or less finished. So now we have the benefit of a good business and my inventory would be more moderately priced. And therefore, we are entering a phase where my H2 should be better than H1. And based on the visibility that we have on our order book, the geopolitics, the demand-supply, probably the next 12 to 18 months should be very, very good for us. Looking at one or 2 other numbers enhanced cost, 126 as opposed to 131 Q1 and 89% last year Q2.
Out of this 126 million, the contribution of the foreign exchange fluctuation as you know, of late, the Rupee has become very volatile and at one point of time, it even touched 83 to a Dollar. The impact is almost INR 25 crores, INR 26 crores out of this INR 126 million is only on account of foreign exchange fluctuation. Part of it is crystallized. And the part of it, I would say, is more of a mark-to-market. And therefore, as now Rupee is recovering, -- we may have an opportunity to recoup some of these losses that we have presented in this 126.
The second important thing that I would like you to look at is my consolidated numbers, as we have been saying that the company is very focused. The group is focused on our realignment, restructuring plan, where now it is Jindal Saw Limited. At present, we have one subsidiary, JITF, which we want to see how we can take that forward. And then we have the stream of Abu Dhabi plus a [ stream ] for U.S. But those 2 also have started contributing positively. Primarily, I would request your attention on the Abu Dhabi facility, which has started contributing to a positive EBITDA. You all know now it is a 100% subsidiary and therefore is fully consolidated. And the contribution is good. The outlook is encouraging. So this year result, we are hopeful in terms of tonnage would be better than last year. Maybe on the EBITDA, there would be a slight here and there because of the raw material price fluctuation. But otherwise, going forward, we have a very healthy order book. And therefore, the consolidated results as well gives a very good trend and a good trajectory looking forward 18 to 24 months.
Let's now look at the other important factor, which has been a concern for many years, our debt position. On a turnover, a profit of all that we have indicated, our long-term debt today stands at a little less or around INR 1,200 crores, working capital, INR 3,000 crores. So the total debt on the books of Jindal Saw is INR 4,100. Looking at consolidated debt, it comes to about INR 5,500. Now if you look at all performance parameters and look at these debt numbers, it would very clearly tell you how well the treasury is managing our debt position. And let me reiterate, working capital or trade finance is very much ingrained in my business cycle. And therefore, sometimes, the working capital seems a little high, but it just tracks business you will see always my working capital, good track the top line. It would also track if there is a fluctuation in the raw material prices. So we would see the working capital as a percentage or as a parameter towards the end of the year should be far superior to what it was at the beginning of the year and what it is indicated even during -- because during this result of half year H1.
Because going forward, we expect the raw material prices to be stable and therefore, the usage of raw material to get my top line would -- should improve. So that's about the debt position. An important indication on my order book, $1.3 billion. As we have always been saying, we have deliberately kept it down in a very volatile raw material price market. Now it has almost doubled.
Another important aspect, almost 40% of my order book today is exports, which is a good news from an overall demand-supply perspective in a scenario where Rupee is continuously weakening, there is, again, something that we can expect in terms of getting some more for every Dollar that we earn into our top line. The treasury is active. It is looking at all of these very carefully, and they are evolving a hedging mechanism so that with the fluctuation in Rupee-Dollar, wherever we can gain something, we will. Let me reiterate, as a policy, we do not take speculated position. But wherever there is an underlying trade, then the treasury does look at foreign exchange, does look at how it's behaving, and then uses simple statements, simple instruments to try and gain something wherever we can.
So the numbers are very healthy. The pipeline, she is very healthy. And the group company is -- all over the place, if you see, it looks like after a gap of maybe 2 to 2.5 years where we have managed to keep our head low and survive without any major disruption without any major issues, now it appears we have a good times ahead in terms of the next 18 to 24 months.
Now let me turn my attention on a few other important aspects. Let's look at the outlook. The oil and gas, even though there seems to be some uncertainty on account of the geopolitics, on account of the looming recession. But still, our assessment is that international oil prices would stay at least at a level that it would justify investments in pipelines. In Europe, even if there is a recession, we believe there is likely to be investment because now Europe is firmly moving in the direction of becoming self-reliant, or becoming reliant on sources of energy other than Russia. And therefore, it is necessary that they would need pipelines because so far, they were so heavily reliant on the Russian gas through Russian pipelines, that even for the alternate sources, whether it is for oil or for gas, or for LNG terminals, they will have to do some pipeline. And therefore, we are very bullish that Europe, doing investment in pipelines would increase even if there is a recessionary situation because it appears that Europe would follow the policy of not now falling back on Russia on any gas or any oil even if things improve.
The other business, which is showing a lot of traction is a seamless and stainless business, primarily because both Russia and Ukraine, where suppliers to a very large extent on these 2 pipes and tubes. Now with the war, the entire Ukraine supply chain has been disrupted. And going forward, the way Russia has isolated itself, even if the war were to end, unlikely that any of those markets would ever go to Russia anytime soon. And therefore, what we are seeing in our stainless and seamless business that the demand is becoming very healthy.
On the supply side or on the internal side, we have moved now the standard business into a very stable environment, and we are entering into value-added segments like we are beginning to manufacture now higher grades of steel -- steel. We are beginning to manufacture the instrumentation tubes, which are very high value. Obviously, in terms of tonnage, in terms of volume, they are low, but they would give this business a very strong [indiscernible]. So the seamless stainless business because of Russia, Ukraine, overall demand is likely to give a very good [indiscernible]. The topping on the ice for this is the JV. We are now coming very close to the [ dock ] launch of the General Hunting joint venture is likely to happen definitely in the second half. If everything goes well, maybe by December, January, the [ dock ] launch would happen. And we would be servicing the market with premium brands. As already indicated, we have also been able to rope OSI and other U.S. major who have agreed to transfer the technology for [ connectors ].
So that, again, is going to make this joint venture, a center of excellence only of its kind in this part of the world with a size range starting from [ 278 ] inches going right up to 36. This would be the only facility of this nature and this kind in this part of the world. So by and large this would give the stainless and seamless business, a good outlook in the near term.
Jal Jeevan mission is now in its very mature state. Elections -- general elections are around the corner. So the next 18 to 24 months, we believe would see a lot of emphasis on Jal Jeevan mission on the water grid, and that's good news for [ DI ] business. So most of the business segments that we are looking at is showing us a very healthy demand, and we are very ready. We are absolutely ready to take benefit out of that. On [ pellets ], definitely, we are showing that as raw material prices stabilize, the margins, the top line, everything from last year from the [ pellet ] business has moderated a little bit, but that's absolutely fine by us because that has been more than compensated by the improvement in the pipe business, which is a larger pie for us in the whole scenario.
Turning our attention, all of you would have seen. It has also been reported in the newspaper. We are the highest bidder for [ Sathavahana ]. We have been talking about this that we are likely contenders. We are very serious players. We are now awaiting the final nod from NCLT, which we hope is a few weeks away, and then Sathavahana would become a part of Jindal Saw. Once that happens, the South India business of DI market, the Jal Jeevan would give us a very, very strong positioning and a good pricing to add that. We definitely expect that in the second half before the year-end, there should be a contribution that the Sathavahana business should make to Jindal Saw in the second half. That is what our expectations are.
With all of these happening, we expect that the margins that we had pre-COVID and pre -- this economic turmoil and all of those, I think we should be returning to that by last quarter this year or definitely first quarter next year, the margins should go back to those old days prior to all of these and maybe even higher because now we would be entering a lot more value-added segments. If you would have seen our consolidated results, you would have seen an exceptional item of INR 25 crores as an expense. Now that is the last shift that we had, which was the transloader use for this. We sold that the moment we got an opportunity because now the NTPC contract period is over.
So even though we are under litigation, as you all know, in the high court for the arbitration award. But since the contract period is over, we are under no obligation to maintain those assets. And therefore, we have sold that asset where we had to book a loss of [ 25% ] because that was the difference between the WDV and what we received. But it definitely added to the liquidity of the company. And therefore, it was -- the company thought or we thought it was a sensible thing to do rather than spending money maintaining on it. And again, we are very clear that going forward, this is not what our business model would include. And therefore, we have sold it and we have booked a loss which is a onetime loss, INR 25 crores is showing on that account.
It appears that I have covered all. I must make mention that in Saudi Arabia, we have a very significant win. We have got a water project contract for the new city that the Prince of Saudi Arabia is building. We would be the supplier of the entire water pipeline. It's a very large project, which will be more than $300 million. We would be supplying the pipes over the next 18 to 24 months. So it's a very short contract, high-value contract and is going to help our large diameter pipe business in a major way because it would give us a continuous campaign, and we are building a very robust supply chain, raw material purchase. So that should be one good news, which is going to stabilize our large diameter market as well. So with these, let me stop here and take some questions.
[Operator Instructions] The first question is from the line of Pratiksha Daftari from Aequitas Investment.
My first question is regarding order book. If you could give us the visibility in terms of execution period for each of the segments?
Okay, $1.3 billion of order book. Large -- as I told you, is largely because of the Saudi Arabia project. We would execute it over the next 18 to 24 months. Seamless pipes typically 12 weeks to 16 weeks, [indiscernible] pipes typically 9 months to 12 months.
Okay. And how did you see the profit...
Pellets is always -- pellets is always on a cash basis, means hardly 15 days.
Okay. Okay. How do we see the profitability going ahead in the DI segment considering that we have new supply incremental supply coming in both West and East region. How do we expect the margins going ahead and also volume growth?
No, you have to -- please ask [Technical Difficulty] DI margin should improve because the raw material prices are becoming very stable in terms of coal, in terms of iron ore. So the margin should definitely improve. But I missed out, you put a caveat in the -- in your question about DI. Would you please repeat your question?
No, no, I just wanted to understand that since we have incremental supply in the industry because new capacity has come in for both West and the Eastern region. So how would that impact us?
No, the demand completely outweighs the incremental supply. And therefore, the prices would remain largely stable. In fact, we expect the prices to, in fact, go up a little bit.
Okay. And how much of our current order book would have price escalation clauses?
Most of the orders now coming out of the major states have a price variation clause. So still -- we have some way to go. But now as a matter of policy, with private sector, all the EPCs, we signed contract with PVC, which is the price variation clause. And most of the major states have also accepted now PVC as a norm because we wanted to make sure that going forward, we don't get into a situation that we were a few years back.
Okay. And [indiscernible], you mentioned something in the press release about import duty in Saudi Arabia from goods from U.E.A. So if you could elaborate on that?
So basically, the business got impacted in Saudi...
Okay. That was -- they have come up with law -- [indiscernible] law. If you do not appoint a certain number of [indiscernible] -- then the levy tax in Saudi Arabia for one form or the other, that we have taken care of. Now we have created a manpower supply company, where most of the manpower would be stationed and there, we would be employing that minimum number of [indiscernible] people of the relevant categories so that they become useful to us, and we would have that sorted out. So that issue, which we told you last time about our Abu Dhabi business, that would get sorted out.
And when do we -- so on demand front in U.A.E. and Abu Dhabi, do we expect to come back to the 60 tons -- of 60,000 tonnes kind of volume trajectory sometime soon?
No, when you say quarterly -- you said [indiscernible] quarterly [indiscernible].
Yes.
[Foreign Language]
Okay. Okay.
[Foreign Language] under any circumstances, [Foreign Language] but we are adding some new capacity, some large dia pipes are beginning. So we would be in that vicinity only.
[Operator Instructions] The next question is from the line of [ Saket Kapoor from Kapoor And Company ].
Congratulations on the intake of the big orders in the GCC region of $335 million. So what is the tonnage corresponding to this order of $335 million.
[Foreign Language]
The big order which we have got and this will be shifted entirely from the Saudi Arabia [indiscernible].
Just one second, I'll try and get you the tonnage. But what is -- is it Saudi what?
[Foreign Language]
[Foreign Language] It is over 2 lakh tonnes.
Okay, over 2 lakh tonnes. Sir, we have also seen that there is a significant fall in the ocean freight prices. So how is that going to impact it? So earlier, that had a negative impact. So the margins will be boosted because of this? How is that going to shape up?
The Ocean freight has fallen, but again, it is likely to stabilize.
But there was some...
[Foreign Language] Americans are now making a distinction, that you can import Russian oil, but don't use western services. Means don't use Western Maritime, don't use western insurance. [Foreign Language] as a huge benefit for a company like Jindal Saw. We definitely are in a stable position where whatever our order book is on export front, we would not have a negative impact because of the sea freight. But will it give us a major Philip, maybe a few basis points or 0.5%, not beyond that at an EBITDA level.
Yes. So when you were mentioning that our H2 would be better than H1 in terms of the PBT number and also the EBITDA. So last year, I think so post the second year impact, our H2 EBITDA numbers were in the vicinity of INR 690 crores to INR 700 crores. So taking into account the deliverables, which we are planning to ship for H2, what should be the likely trajectory of the EBITDA for H2?
No, I am prevented from giving you a number of guidelines for future.
Okay... [Foreign Language]
But it would definitely be better -- and [Foreign Language] and I have a very healthy order book. Beyond that, these guys will say, I can't give you any more number guidelines.
Correct, sir. Sir, coming to this [ consolidation ] part, then it is truly commendable that earlier [Foreign Language] consolidated we used to build and now it has started reporting positively. But if you could share the mix of the consolidated revenues of this INR 727 crores, what is the [Foreign Language] mix between U.S.A. and the other parts out of this INR 700 crores increase in revenue when we look from stand-alone to consolidated?
See, major contributor is the Gulf now -- so all the incremental number on EBITDA is coming from... [Foreign Language]
[Foreign Language]
[Foreign Language] major components, again, Gulf. More than 50% or 60% comes from Gulf. The balance gets distributed to U.S.A. and IOP and all that. So major component is Gulf. Even in the EBITDA, more than 50% of the incremental EBITDA comes from Abu Dhabi and which is likely to stay and which may improve. We have taken some additional land also in our Abu Dhabi facility. So there is scope that we may expand [Foreign Language], the geopolitical situation is like we seem to be stable now suddenly, it appears to be unstable. Otherwise, Iraq, we were having some very good business. Abu Dhabi now with the [indiscernible] problem solved, looks like a good business. Europe, again, we are beginning to see some traction. So for us, [Foreign Language] we have taken some additional land, and we are very bullish on our now Abu Dhabi facility.
But when we look at going to the bottom line, the margins just -- squeeze 1% margin is there when you look at percentage. So where is the cost structure problem that even on posting revenues of INR 700 crores, the bottom line impact at PBT is only to the tune of INR 8 crores to INR 9 crores? What steps are taken to correct this all...
[Foreign Language] first half because of the raw material prices and again, the foreign exchange fluctuation, interest cost is at whatever is giving you a very skewed figure. And that's why when you reach to the PBT level, it doesn't really give you a very stable picture or it doesn't give you a very representative figures because it is when you are coming out of a valley. So second half -- [Foreign Language] results [Foreign Language] made right at the bottom level [Foreign Language] stable [Foreign Language].
Last 2 points [Foreign Language] what is the gross amount we are looking at wherein we have booked loss of this INR 25 crores?
We have received more than INR 75 crores.
INR 75 crores. And lastly, sir, then did we receive this order of [ 335 million ]. After the board meeting date or when have, we received it?
No, no, very recently. Last one week, everything has been finalized. We have received the signed contract in the last one week.
Because mainly customers, what we find that companies receiving using orders, whether it is in the LODR norms or not, I'm not completely privy to it...
Yes, it is not in the norm, and we do not have this policy of selective announcing, because some companies, they announced the wins, but they never announced the losses. So we don't have this selective reporting, which we believe is, in a way, doesn't give the holistic picture. And therefore, we do it on a quarter-to-quarter basis. So that's a part of our business, getting a big order, or losing a big order, both of them are a part of our normal business. So we don't do that. And therefore, you would not see such announcements from the PR General Group in the stock exchange as a general practice. So unless there is significant or extraordinary information that we must share with our stakeholders, something which is routine, something which is a part of my everyday business, we do not do it as a matter of practice.
[Operator Instructions] Next question is from the line of [ Anand ] from PhillipCapital.
One is on set of numbers. Just one question...
You are sounding just too distant may I request you to speak through the handset?
Yes. Can you hear me now?
Yes.
In the second half, how much -- or what is the sense you're getting from the Indian government's point of view, given that our product portfolio caters to the pipes which are very much focused towards Nal se Jal, the mission, the pet project of the government. So any color on that front? What is the -- is there any traction you're seeing?
See, the Jal Jeevan mission is now running for this term of the government. In the last 2 years, there is a major emphasis. So on the demand side, we are very bullish. With hopefully Sathavahana now, we are just one step away coming into our fold. We would enhance our supply side both in terms of capacity. It will significantly go up and our reach because now we would have a very strong foothold in South India where there is very little competition, and there is very large demand. So DI business, in fact, in the next 6 to 24 months should be a major contributor to us in terms of top-line profitability everything. So DI business is actually a significant business for us now. With now this acquisition coming our way where I just said, we are one step away, NCLT has to give its final nod.
And any time line that you are expecting in the next coming quarter itself...
I can't second guess the court process, but what we are confident that once it is with us, all preparatory work has been done. We should be in the market once we have the NCLT order in our favor, we should be in the market in the next maximum 30 to 45 days.
The next question is from the line of Neha Jain from Brickwork Ratings.
Sir, I would like to know that you said your [ inventory ] costs would be coming down. Now as on 30th September 2020, we still have inventory holding of INR 3,759-odd crores. So how much of this would be in the raw material costs and other things? If you think there's a breakup for that?
I would not have the exact break up in front of me, but even if the raw materials are there, the high-cost raw material, which we had purchased during those very volatile coke and iron ore prices, they have mostly been consumed. So we would have raw materials, but they would be moderately valued and therefore, going forward, my EBITDA margin would get restored.
Can you -- if you can please quantify in terms of price movements for coke and ore...
I don't have. See, Rajiv is here. Since I don't have the exact number in front of me, I would not like to second-guess, Rajiv will, he is taking notes. So Neha from Brickworks, right? He will reach out to you and we'll give you a complete breakup of the inventory.
Not an issue, sir. My third question would be with respect to the Sathavahana project, congratulations for being the highest bidder. So far as for my knowledge on the public domain, we have bidded for [ INR 513 crores], right, sir?
Let the entire order come again, let's not start talk numbers because since it is in NCLT and NCLT has asked a few questions about government deals, is that whatever -- the final number may change a little bit. But whatever has been reported in the Economic Times is as a ballpark figure, I think you should be taking it for the purpose of investment, et cetera.
Right. And what would be the sources of finance? Just then -- I mean I understand there is no concrete figure with us as of now...
The source of finance would be -- we have enough lines. Today, you see the long-term debt on balance sheet of Jindal Saw is INR 1,200 crores. On a net worth of over INR 6,000 crores and on a top line of INR 3,000 crores in one quarter. So the borrowing capacity of Jindal Saw balance sheet is huge. The internal accruals is huge. So to fund our acquisition like this is not very difficult, just we are on [indiscernible] Jindal Saw balance sheet.
Right. That will be all from my end.
The next question is from the line of Nikhil Chandak from JM Financial.
My question was actually on debt profile of the company while you say the long-term debt is -- so whatever I see the long-term debt is roughly INR 1,600 crores as on September 30th, the total consolidated debt related to the scale of the operations, how do you and management intend to bring this down, so this number is now close to -- [ INR 4,836 crores ], is there any reasonable scope to bring the consolidated debt number of the company down? That is the first question. Second is, how much portion of this is foreign currency debt? Because as long as you have foreign currency debt, these quarterly fluctuations on gain or loss on foreign currency loan will keep continuing. Someday, you may have a loss sometime you may have again that's fair. But this is a recurring trouble point, so to say, for the company, which will keep continuing as long as there is a large amount of foreign currency debt on the books. So how do you see these 2 points playing out on the debt side?
Okay. Let's look at now the total debt that you talked about 1,639, out of which INR 1,195 million is the net debt on [ JSR ] balance sheet. This has got 0 foreign currency debt. The balance, INR 445 crores, again, if you go to the respective countries and currencies, then all of them are domestic. But in terms of -- if you look at 1,639 and look at how much is Indian rupee denominated and foreign currency denominated, then 445 would be the foreign currency-denominated debt. But -- please note in their respective countries like U.S. or U.A.E., they are all domestic currency debt. So in a manner of speaking -- practical speaking, there is 0 foreign currency debt in 1,639.
Now let's turn our attention to 3,197, which is the working capital debt. 2,911 is the domestic debt that has a component of packing credit, foreign currency credit, some LC and some money to finance the foreign currency receivables. The exact break up -- again, it's a dynamic situation. To the extent that you have our domestic versus export business, this would fluctuate. And it's a very, very dynamic situation. Now to answer your overall question that do we have any plans to bring this down? Please appreciate, as I have been reiterating, out of which 3,197 is actually a -- which is a working capital debt is actually an indicator of my business activity. So if I have -- if I try to bring down this 3,197 it will be contra or it will be opposite to my trade finance support to my business. And therefore, that's unlikely.
Second, the 1,639, in our opinion, is already a very reasonable level of debt, looking at my other business parameters. But they would get repaid as and when they are due. Because if you recall, there was a lot of effort from the treasury team to correct the maturity profile of my long-term debt to conserve cash, and we continued to follow that policy. We do not want to accelerate these debt payments because we believe conserving cash also is an important aspect of business. So debt profile, do we want to accelerate any repayments? The answer is no. We believe it's well managed, it's reasonable, and it should stay that way.
But treasury also works [ very minute ] to manage our working capital cost. And that's why this mix of foreign currency versus domestic working capital loan, use of LC, et cetera, comes into play because we always like to keep the weighted average cost of capital as low as possible so that even on this kind of a utilization, you can see if you remove the foreign currency fluctuation of INR 26 crores, the financial expenses for the company would be in the vicinity of INR 100 crores on a stand-alone basis.
Understood. So there won't be any scope even on the working capital debt to reduce this number of broadly INR 3,200 crores on a consolidated level. In fact, as the speed of operations of the company go up as you're saying in the next whatever couple of years, this number should only increase then, the working capital debt. Is that right?
No. Are you talking about the aggregate? Are you talking about as a percentage?
No, as an aggregate -- so as an aggregate or the INR 3,200 crores...
As an aggregate, I don't understand as an aggregate, if I'm telling you that my business is going to grow. Then as an aggregate, there could be minor correction because now I would be paying a little less for every ton of raw material. But -- so but that's a percentage improvement. But if you are looking at -- is my raw material consumption going to go up, the answer is yes. Because it's completely linked. So therefore, as a percentage, to my top line as a percentage to weightage, there would definitely be improvement as there is an improvement in the raw material prices. But if you are asking me that my turnover will touch INR 15,000 crores -- but would my aggregate debt come below INR 4,100 crores or INR 4,400 or whatever that it is, the answer is unlikely because then it becomes counterproductive to use a trade finance to support my business.
Sure. So maybe I need to compare this number with your peers, how efficient or inefficient is this number. So maybe I need to do that, actually. If you compare it with your peers on the scale of operations, how much of that is getting funded through...
[indiscernible] and I would encourage you to share the numbers because if there is any learning for us, we would definitely take it. So Rajiv here would be very happy to engage with you on this.
Ladies and gentlemen, due to time constraint, we will take the last question from the line of [indiscernible].
Sir, since we are a pipe maker and the whole world is going towards green energy that especially the hydrogen energy. Is there any scope for us to come up with some value-added products, which would both benefit us as a product maker and also would be -- where we'll be participating in this green revolution -- green energy revolution?
Okay, 2 things. Value-added products, as I told you, that is our constant endeavor. In every business segment, we want to. To answer your specific question, Hydrogen, we are working on making sure that our seamless pipes or stainless pipes are capable of transporting hydrogen. So that in the short term, it can be used on those hydrogen containers for the ships and long-term, it can actually be used for transportation of hydrogen. So hydrogen is one, transportation is one thing that is very much on our radar, and we are working to develop that product in our portfolio, ASAP.
So I mean, can we have an -- I mean sorry, I am not done yet, given that there are a lot many players in this [ Sunrise Industry ] so by when can we see any such products launched from our side?
Very hard to put a number because we yet do not have even a good handle on when actually the hydrogen transportation would become a need on a commercial basis. Because at this point of time, hydrogen being used only in cars, et cetera, are more like experimental and yet. So hydrogen and especially green and gray hydrogen to become absolutely commercial commodity. We still are a little further away, but we are developing those products very difficult to put give you a precise quarter or a month on it, but it should happen soon.
I now hand the conference over to Mr. Vikash Singh for closing comments.
Everyone. On behalf of PhillipCapital, I would like to thank Jindal Saw management for giving us the opportunity to host them [indiscernible]. Over to you, sir, for any closing comment.
I need to thank, everybody. Thank my investors -- as we have been saying on the last few quarterly calls, that please be patient, our time is likely to come. It looks like now we are on the cusp. And from here on, we have a visibility where the next 18, 24 months for us should be good, and it should put us into a different pedestal because by then, there are other activities which are taking place in terms of corporate reorganization, M&A activity, capacity expansion, product development, value addition. So now for the next 18 months to 24 months, we will get the traction of a good market -- and we believe that we would transition into a different era for Jindal Saw in terms of all of those or a combined positive impact of all the other activities that we have just listed.
So I need to thank my investors, I really appreciate they have been patient. The market cap is not reflecting our fundamentals, but we also have a firm belief that it may take some time, but now market should start looking at us in a different manner. Hopefully, we should get this NTPC out of our way soon because we also understand that, that is putting a lot of weight on our market cap and hopefully, we should get that soon -- get out of our way soon. And then I'm sure there would be a lot to cheer about we as a company, investors and all stakeholders around. So with that, I hope, thank you very much, and see you next quarter. Bye.
Thank you very much. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your ends.