Jindal SAW Ltd

NSE:JINDALSAW

Earnings Call Transcript 2024-Q4

[Operator]

Ladies and gentlemen, good day, and welcome to Jindal Saw Limited Q4 FY '24 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 India Private Limited. Thank you, and over to you, sir.

[Vikash Singh, analyst]

Good afternoon, everyone. Welcome to Jindal Saw con call. Today, from the management side, we have with us Mr. Neeraj Kumar, Group CEO and Whole Time Director; Mr. Vinay Gupta, President and Head Treasury; and Mr. Narendra Mantri, President, Head Commercial and CFO. Without taking any more time, I'll hand over the dais to Mr. Neeraj Kumar for his opening remarks. Over to you, sir.

[Neeraj Kumar, executive]

Good afternoon, friends. Mr. Rajeev Goyal, who is the Assistant Treasurer in Vinay's team, he is also joining us and assisting us over the call. Welcome, friends, to our annual investor call. This year is 1 more time our best result over the last year's which was then the best-ever result. So we have now done twice in a row, the best ever last year to top it up or best ever this year. And on a few parameters, this year, the result has been significant.

Let me just take you through the highlights of some of the numbers. I'll very quickly run through the numbers but I'm sure all of you would have seen the detailed note which has been circulated by all. So to start with standalone first, top line INR 18,233 crores, EBITDA INR 3,226 crores, PBT INR 2,188 crores and PAT INR 1,614 crores. Compared to last year, top line INR 15,704 crores, EBITDA INR 1,630 crores, PBT INR 938 crores, PAT INR 750 crores. Everything here, if you see, it's a breakaway. It's a significant improvement.

Likewise if you look at the consol: Top line, INR 21,126 crores this year as compared to last year INR 18,061 crores. EBITDA INR 3,489 crores as compared to INR 1,857 crores last year. PBT INR 2,216 crores this year as compared to INR 745 crores last year. PAT INR 1,593 crores this year as compared to INR 452 crores last year. Similar significant trend. One thing important to point out, Jindal Saw contributes around 85% of revenue in the consol, 7% EBITDA. 7% EBITDA by subsidiaries, so 92%, 32.5% EBITDA. And subsidiaries contribute 1.26% of profit. So pretty much 98.75% consolidated profit comes actually from Jindal. So this gives us 2 clear indications. A, the subsidiaries are all now positively contributing, but in comparison to Jindal Saw, they are still a relatively smaller player. Also, you would have seen after the merger and the restructuring of the organization that we have done.

We have pretty much left with our 3 major subsidiaries, 1 JITF, which is for the NTPC region. Otherwise, there are hardly any operations there, but we are just keeping the barges alive running at breakeven. We have an Abu Dhabi, which is 100% now as allowed by the UAE government and we have U.S., which is also 100%. So U.S., Abu Dhabi, JITF for legal reasons, these 2 being part of our core business. All non-core businesses are out. Also if you look at the subsidiaries' contribution, 15% on top line, 11.5% of EBITDA and 1.25% of the profit indicates that the subsidiaries' profitability is still lagging behind what we have in Jindal Saw.

Jindal Saw, actually, if you look at the EBITDA margin, if you look at the PBT to sales, they all are now a break away. It is a breakaway from the trend. That typically Jindal Saw was in a band. So you can say now it is a reset Jindal Saw, where we expect the EBITDA to be. Earlier, we were expecting it in the range of 15. Now we expect it will be in the range of 16, 17 because there are a lot of initiatives that is being taken from cost control, on cost reduction, on innovation, on improvement, productivity, there all now beginning to their results.

For example, now we have improved coke oven, we have improved our PCI, which is a performance improvement in the blast furnace. And all these tit-bits are adding to the improvement in EBITDA. Stainless steel is slowly moving towards more value add. So that it helps improve again the margin. So the margin -- Jindal Saw now it looks like, has moved away from its original brand of '14/'15 into '16/'17. There was a significant development that has happened and it has happened in spite of NTPC still to reach institutions. The ROCE has improved. The ROCE is now in the range of 20%. That is primarily because there has been a lot of management attention on managing the capital structure, the balance sheet items, the investments and all of those.

Now if we look at the scenario where NTPC goes the way we are thinking it should go. Once shot comes, there is again a very large chunk of investment from the balance sheet of Jindal Saw will go out, plus Jindal Saw will have a lot of cash. So that would further improve the profitability, the quality and the health of Jindal Saw balance sheet. So all in all, it looks like we have entered a sweet spot, which should continue for some time.

Now turning my attention to a few other things. The order book is a robust $1.5 billion, out of which export is 30%, domestic 70%. Industry distribution, if you look at oil and gas, roughly 30% and water sector 64%, 65%, industrial 4%. We expect the industrial sector to catch up and grow further and our stainless business grows. I'm very happy to let you know that in our stainless, we have now successfully, stood at 13 Chrome [indiscernible] which are very graphic and we would be the only one in the country who will be able to do that.

So order book very healthy. We have a clear visibility of first order book execution capability, higher capacity utilization, improving on our yield and productivity. Plus, we have a very healthy sales funnel. We do see a lot of opportunities coming in because we also are a firm believer that the government is going to continue. So there would be a continuity of number and we expect that the momentum of infra development, where water sector is one of the key areas where the government is focusing that focus will continue.

So next, now 3 to 5 years, we do have certain confidence. We have certain visibility of good performance moving forward. The other area where a lot of attention has been given and I have been talking about it quarter-on-quarter is our debt. If you see the debt seems to go down. March '24, we closed the total debt, means working capital plus term loan, INR 4,688 crores which included INR 1,000 crores that we have taken for the acquisition of Sathavahana. And I'm very happy to announce that this year, we are prepaying the entire loan of INR 1,000 crores, even though it was like initial funding long term. But now we have a strategy in place where we want to prepay -- already the prepayment has started April onwards. And during this calendar year, we would prepay the entire INR 1,000 crores. So this [ INR 4,600 ] crore would come down to INR 5,600 crores out of which the working capital would be close to INR 2,000 crores.

So debt is one thing that we are -- and that is why if you see yesterday when we declared our dividend, proportionately, yes, there was an increase in dividend 200%. But if you look at in terms of the proportion to profit, it was not there, primarily because as a company, we believe that now is the time to conserve some cash, bring our debt down, bring down our interest costs and improve the image and the credibility with the bank so that the organization is absolutely in good shape, good form, fantastic relationship with all our banks, financial institutions and cost competitive as I said, improved ROCE, improved EBITDA margin.

So basically, now we are readying the company for the next big leap in terms of market capture, in terms of growth and in terms of strategy. One thing that I must point out is that and we have briefly touched about from the subsidiaries, even though now they have turned profitable, there is some catch-up that they still have to do. And also, there have been some extraneous factors. For example, if you look at the Abu Dhabi or for that matter U.S. The Q4 performance versus Q3 performance, there is a dip. The primary reason being if you see the Israel area has become a hotspot which is kind of impacting Saudi, Iraq and others. So the sentiment in that area, plus this time, Ramzan was in the month of March, plus a few of our major projects in some of the countries, they had a delayed start.

In U.S., A similar situation Q4 results being less than Q3. But these are all temporary trends. We are seeing a rule -- a trend reversal in Abu Dhabi and USA. So now we are confident this year with subsidiaries even though they would continue to remain small in terms of the percentages but would begin to contribute more.

The raw material prices, if you see, we expect them to move in a current trend. I don't know between 100 to 120, but we don't import any. Domestically, we are able to source iron ore at $80, 5,000 to 6,000, which is a good thing for us, and we expect we'll continue to do that. Coal will remain around 250. And that should continue at least for the next 6 to 8 months is what our understanding. One thing that I wish to clear now to all my investors, if you see, we had taken an enabling provision of a QIP of INR 1,000 crores. And I had even said then that all our investors who take keen interest in Jindal Saw. Please look at our management style in multiple layers. Getting an enabling resolution is only preparing for different scenarios. That doesn't necessarily mean that we have a transaction on the cards. So I had also said then it is only enabling. Now we have surplus cash. We are preparing even the debt of State Bank of India, INR 1,000 crores. And I can let you know that now it looks like the QIP may not happen.

On the contrary, yesterday, we have taken again an enabling resolution from the board, and we are going to take it to the shareholders INR 1,000 crores of our debt instrument. Now again, please read it as the management thinking ahead, thinking in multiple directions, multiple dimensions to orient itself, adjust itself, have an elbow room to move into different directions very quickly because in a developing market where now India is asserting itself to become a manufacturing hub. We have to be agile. We have to be ready for plan A and plan B, plan C. So again, I'm letting you know we have taken board approval. But again, please don't jump to the conclusion that we are going to raise that money. It is an enabling resolution that we have kept.

We are looking at how things are shaping up. We have been active in M&A. We have been active in capacity expansion, new markets, new products. So we continue to remain focused, remain very vigilant and remain committed to doing good business, improving the fundamental health of the company all the time.

Moving forward, if you look at the industry outlook, I have already said, we only expect the Israel conflict should not spill over and should not disrupt the Middle East, it should not disrupt the Red Sea because that would impact our shipping to that part of the world. But for that, at least India, we see very healthy development in industrial, in water, as well as in oil and gas. All 3 are doing very well. In Industrial, we are making a lot of effort to enter the areas like space to our stainless and chrome; oil and gas through our premium connections of the JV -- JHESL JV is performing well. It's almost having its plate full, full capacity utilization.

Water, as I have already said, it is on top of the agenda as far as the Government of India is concerned, which is likely to continue. We do see that now the new government where there should be continuity, we do expect a lot more alignment of thoughts, faster economic growth, a consistent economic growth and an all-round economic growth because the way the governments are coming out with the policy, the way they have set the target for 2047, even short-term targets, it looks like that government is going to be a bit more serious and come up with the economic policies, which are much more aligned to growth. And that's all good news for us because we are at the core of infrastructure as well and we will continue to be there.

I think I have covered most of the high-level things that I needed to. Before I take questions, I would request some of the analysts, participants. If you have a very granular nitty-gritty question, Mr. Rajeev Goyal is here, he's taking notes, just identify yourself and he would send you a mail because I may not have all the nitty-gritty questions readily available, and we would rather like to answer you in full than to rely on [indiscernible].

With that, let me thank you all once again. Thank you for being with us. Thank you for being patient. And I hope that now the capital market should be more aligned to the growth in our fundamental strength. We still believe that there is a lot of headroom because if you look at any of the other parameters, which drives the market, there is a lot of upside still available. That is what we believe. Even when we look at our peers, we do feel that fundamentally, we are much stronger and the market has yet to give us the full, you can say, reward for what we have achieved over the last few years.

With that, let me stop. Thank you all very much. I will be happy to take a few questions.

[Operator]

[Operator Instructions] We have our first question from the line of Riya from Aequitas.

[Riya Mehta, analyst]

Congratulations on a good set of numbers. My first question is pertaining to the Abu Dhabi facility. So we are seeing [indiscernible]

[Neeraj Kumar, executive]

Hold. Would you please come closer, speak a little slower in terms of your speed and louder so that I can be clear about it.

[Riya Mehta, analyst]

Sure. Congratulations on good set of numbers. So I was asking in terms of our UAE -- hello?

[Neeraj Kumar, executive]

You are asking in terms of?

[Riya Mehta, analyst]

Hello. Am I audible?

[Neeraj Kumar, executive]

Yes, madam. I didn't complete your sentence. You are asking in terms of?

[Riya Mehta, analyst]

UAE volumes, sales volumes for the quarter. So we are seeing a little decline and as per your opening...

[Neeraj Kumar, executive]

I have already explained, yes. The last quarter, the sales volume declined.

[Riya Mehta, analyst]

However, in terms of order booking, we are seeing some good growth there. So where is the demand coming in from there? And when do we see the situation getting better?

[Neeraj Kumar, executive]

Madam, I have already covered all 3 questions in my opening remarks, but still, okay, let me repeat it again. Fourth quarter in UAE was lower than third quarter. The reason being is Israel, Ramadan, some projects getting delayed. I've already said Q1, there is a trend reversal, and it should go back to where it belongs. This year, again, we do see that the overall volume should be higher than what we have achieved last year.

[Riya Mehta, analyst]

Got it. And in terms of other civil companies, they are saying that in terms of water projects, basically for DI, they're seeing decline in the projects. So are you seeing any such decline in the ordering activity in India specifically?

[Neeraj Kumar, executive]

Okay. I don't know which companies you are talking about, but anyway, that's not important. On DI, now we have [indiscernible] we have Haresamudram. We are running full capacity boats. We are optimizing our capacity by adding the balancing equipment, where the capacity will be enhanced by about 10% or so. And we have our hands full. We are booked for most of the year.

[Riya Mehta, analyst]

Got it. And in terms of expansion, in terms of peers, we are seeing a lot of expansion plans announced by the company I mean FY '25 and or the start of FY '26, new capacities are coming on stream. So what do you think that would be a situation of overcapacity?

[Neeraj Kumar, executive]

No, the way which we see it is, they are all good news. The more the merrier because in the oligopoly where if there are only a few players, sometimes the market can get skewed. So if you have more people coming into the market, it is always good news because anybody who makes an investment makes a very genuine assessment of the demand and that reconfirms our faith in our assessment of the future and the demand.

Second, a late comer always has a huge disadvantage in terms of entry barriers. This is not an easy market. So entry barriers, cost is advantage, already they have to deal with a build relationship that we have. So we welcome competition, but we are confident of ourselves, and we don't see that as a threat anymore. I told you, we are carrying out a lot of initiatives where we are optimizing our cost of production, which is already low, even further.

[Riya Mehta, analyst]

In terms of cost, coking coal prices have gone down significantly. So are we going to pass on the decreased raw material prices?

[Neeraj Kumar, executive]

See, coking coal in our case will go down further because we are starting a new battery. If you have been following us last 2 years we have been working on getting absolutely brand-new coke oven batteries. It is getting tested. It will get operational this year, that will have a further impact on the improvement of the power that we generate, which will have a cost saving because we don't sell power, but it does impact on the cost side. The cost of production will definitely go down. So it is going to have a positive impact. Now how much to pass on to the market is a market strategy, what is the price that is available in the market. But we definitely are making much more capable. We are making ourselves much more capable to deal with any new capacities coming in, in terms of our cost structure. Otherwise, as you have already seen, our EBITDA margin has moved into a higher band and shall remain there.

[Operator]

We have our next question from the line of Shweta Dikshit from Systematix Group.

[Shweta Dikshit, analyst]

Congratulations on a good set of numbers. My first question is, could you provide any details of contribution from the Hunting JV since it began commercial production last quarter? So any -- could you provide any number and outlook from the Hunting JV?

[Neeraj Kumar, executive]

No, Hunting JV, it's a separate entity when it -- the results get published consolidated, you can get to see that. Now as far as we are concerned, as far as Jindal Saw is concerned, we have to have an arm's-length transaction. So the price at which we sell our price to the market would be the same price at which we will have to give the pipes to the JV. The only benefit that we would have it will be a large order, it will be an order of next door, and it will be an order where we will have consistency. So we will have a portion of Jindal Saw lasting capacity on a very [indiscernible] started and putting because of the JV. So we have an advantage in terms of [indiscernible], quantity, blockage. And in terms of price, it will have to be the same price. It will have to be a [indiscernible] price only.

[Shweta Dikshit, analyst]

You had previously mentioned that because this is a complete import substitution product, and that would benefit you in terms of increase in seamless pipe volumes as well since that will be like everything under one roof kind of benefit. So are we seeing that happening? And how has -- could you throw some light how the seamless pipe sales have moved?

[Neeraj Kumar, executive]

If you compare the previous year and the last year. Last year, there was a marginal dip. But again, this year, we hope that it is going to pick up. But again, it will stabilize at a higher platform. See, what we are seeing is Jindal Saw 3 years back and Jindal Saw today, everything has moved to a higher platform where it looks like this is going to be the new real for Jindal Saw.

[Shweta Dikshit, analyst]

Okay. Sir, my next question is, if we compare Y-o-Y basis, we've seen a significant jump in volumes of around 34% this year. But going forward, on the basis of better capacity utilization, what kind of volume growth are we expecting next year?

[Neeraj Kumar, executive]

34% is primarily one of the reasons has been addition of Haresamudram that is M&A. So you don't expect 34% year-on-year every year. It would be more modest. It will be more in the range of 10% to 15%.

[Shweta Dikshit, analyst]

Okay. And my next question is on the debt side, as you said that compared to peers, when we look at Jindal Saw, there is a lot of headroom for growth in terms of shareholder returns, et cetera. But what would be your take on the short-term debt composition because if we look at the overall debt -- is our working capital requirement relatively higher than our peers? And what could be the reasons behind that?

[Neeraj Kumar, executive]

Okay. If you really look at a like-to-like comparison, which we do on a very granular basis, while working capital cycle is the best in the industry. So when you say a like-to-like comparison, I don't know how you are able to do a like-to-like comparison because who is my peer, with whom you are comparing my working capital. When I do my individual working capital cycle segment-wise, which we do it for our internal benchmarking, we find it to be among the best. But I have repeated many times, I've explained many times, working capital, the way our industry is structured. Trade finance runs parallel to our operations and would be a function of our turnover. So we have little control over how much of working capital that we need, except for managing the efficiency of the working capital, managing the working capital cycle because the more the turnover, the more the export, the more raw material I have to block, the more [indiscernible] open, the more working capital I will use. So that's a pretty much given.

Term loan, we are going to bring it down. Already, if you see my term loan today is less than INR 2,000 crores. My EBITDA for the year is INR 3,200 crore. So again, tested, not just on aggregate amounts, tested on some of the performance parameters and then you would see that we are very, very well within any kind of norm. We will pass any test on our debt control. You take either any ratio, take moving average, take debt coverage, we choose a parameter, national, international, whatever. And on debt side, we will cross all benchmarks.

[Operator]

We have our next question from the line of Darshil Jhaveri from Crown Capital.

[Darshil Jhaveri, analyst]

Firstly, heartiest congratulations on another record setting year. Hope I'm audible?

[Neeraj Kumar, executive]

Yes.

[Darshil Jhaveri, analyst]

Yes, so, just wanted to first -- my first question is, sir, any other new M&A activity that's on our outlook currently that we are looking at? That was my first question. And sir, with terms of your guiding maybe a volume growth of 10% to 15%. So any revenue guidance for maybe FY '25 that you would like to give, sir?

[Neeraj Kumar, executive]

Okay. First, M&A, nothing in the near future. Volume growth, I have told you. Price is purely market-driven. I have already given you an indication that we expect the raw material prices to move in a band. That being the case, the top line also should move in a band subject to demand supply and opportunity. Beyond that, it cannot be possible for me to give you any guidance on the revenue side.

[Darshil Jhaveri, analyst]

Okay. Okay. Fair enough, sir. And sir, I just wanted to maybe ask a bit more regarding like our domestic, we are seeing a lot of growth happening. And exports also sir, do we see the escalating or maybe U.S. also has elections or something that side, we think internationally, we might have more pressure from the western part? Or any color on that, that would be great, sir.

[Neeraj Kumar, executive]

U.S. election has zero impact on Jindal Saw India. It may impact Jindal Saw U.S. subsidiary, but that is so small in nature. That overall, the impact would be marginal. [indiscernible] escalating very difficult for me to take a second guess looks like Israel and Iran, good sense have prevailed, but when it goes out of control, probably your guess would be better than mine.

[Operator]

We have our next question from the line of Pradeep Rawat from [indiscernible] Capital.

[Unknown Analyst]

So my question is regarding Seamless Pipe division. Do we see any significant demand ramp-up from the OCTG customers? And what would be our outlook for the segment in the Seamless division, particularly with respect to capacity addition from the competitors?

[Neeraj Kumar, executive]

Okay. Let me explain. You have asked a lot of questions but that looks like it's muddled. Let's start first with OCTG. Yes, there is a lot of demand. India, the emphasis on domestic oil production, it looks like has gone up significantly. So India is getting deeper into the wells that they have and exploring a lot more. All this gives rise to OCTG demand. We are seeing a lot of demand increase even in the premium segment. So OCTG premium segment is going to lead the demand for pipes. There, because of the Hunting JV, we are the only one in this format in India.

Some of the peers are trying to catch up by coming up with some structured solution, but they still are far away from where we have arrived where the JV is fully operational. It is next door and is supplying now premium connection OCTG, pipes, tubes, casings. Very soon, we will also start producing connectors. Connectors essentially are what coupling does to a lower diameter, connector does to a higher diameter. So the kind of product range that we will now this JV would be capable of doing, we stand a very, very good opportunity in the market.

[Unknown Analyst]

Okay. So my next question is, what is our seamless tube production capacity and by which method do we produce it by extrusion or piercing?

[Neeraj Kumar, executive]

We have both. Nagothane is extrusion, but that is largely used for stainless steel and for the 13 Chrome and all CRA grades. For mild steel in Nashik, we do penetration. So it is the piercing route that we follow. And then we also have, in Nashik, a piercing cum expansion group, which takes it to a diameter of up to 16 inches.

[Unknown Analyst]

Okay. And what is the production capacity of our Seamless division?

[Neeraj Kumar, executive]

In Nashik, we have approximately 2.5 to 3, which we are optimizing and taking it up to 4. Nagothane is about 1.

[Operator]

We have our next question from the line of Radha from B&K Securities.

[Radha Agarwalla, analyst]

Congratulations on good performance. Sir, my first query was you mentioned regarding the Abu Dhabi volumes being impacted this quarter for the reasons that you have mentioned. So how much sales would [indiscernible].

[Neeraj Kumar, executive]

Again, please come closer to the mic, speak slowly because your voice is getting blurred.

[Radha Agarwalla, analyst]

Okay. Is it better now?

[Neeraj Kumar, executive]

Yes.

[Radha Agarwalla, analyst]

Sir, my question was regarding the Abu Dhabi execution. So this quarter, our execution has been lower because of the reasons that you have mentioned. So how much finished goods inventory we have in Abu Dhabi? And because of the -- what is the left out orders in tonnage terms, do you expect it to happen in 1Q. And do you expect that the current quarter execution would be higher than 3Q FY '24?

[Neeraj Kumar, executive]

Okay. Q1 this year would definitely be significantly better than the Q4 last year. The last year, our total dispatch was approximately 2 lakh tons. This year, we hope to beat that, we hope it will exceed. We have a full order book. We are fully booked for this year as far as our DI facilities is concerned in Abu Dhabi. Same is the case in India. In fact, in India and Abu Dhabi put together, we have roughly 1 million ton of capacity and an order book where we are booked for 12 months.

[Radha Agarwalla, analyst]

All right. Sir, secondly, we are seeing a lot of demand traction in the helical saw pipes in the overseas market, particularly for the water segment. So can you please talk about the total opportunity size in the gulf and EMEA region with respect to these extra pipes. And what is the total supply in the -- in that market? And how much is imported in those regions. Out of that, what is the opportunity size available for Jindal Saw.

[Neeraj Kumar, executive]

A lot of questions you have packed in one. Let me try and simplify it for you. When you LSAW helical pipes, you need to correct that, LSAW is longitudinal submerged arc welded pipes. Helical is submerged arc welded pipes is called HSAW if you use that acronym or it is called spiral pipes. Now spiral pipes are essentially large diameter pipes, which are -- as the name suggests, helically first form and then welded along the [indiscernible] that pipe is called SSAW.

Being large diameter, it is transported to -- and it is largely used for motor sector. In some cases, it can also be used for oil and gas sector because now we also have the API-grade helical pipes, that is possible. But you are right, largely it is used for the motorcycle. Countries like Saudi, countries like Iraq, Jordan, they are a huge market for these helical pipes. Helical pipe has an inherent disadvantage that it cannot be transported over a very long distance because of the weight to volume ratio. And therefore, for us, the export market on which we focus our spiral pipes are Middle East and we go up to Spain, et cetera, but not beyond that.

Whereas our DI pipe to Abu Dhabi can go or goes up to Finland, up to Australia, up to Brazil or at the same time. So this market is doing very well. Saudi, as you all know, is developing very fast, and it is not just developing. Saudi is going through a transformation. A new capital city is being built. Infrastructure is being built, the country is opening up. So those are all good news because then they want -- bottom line they want desalination plant. So essentially, in these areas, the spiral pipe demand is good. Only point of concern is Middle East conflict if it gets blown into a full-fledged war, then there could be disruptions in the area.

[Radha Agarwalla, analyst]

Sir, what is the demand and supply in the Gulf and MENA region for this extra pipe in terms of metric ton...

[Neeraj Kumar, executive]

Spiral capacity in the region is hardly there. We and some of our Indian friends are the major suppliers of spiral pipes in the region.

[Radha Agarwalla, analyst]

Any Chinese supply in that region, sir?

[Neeraj Kumar, executive]

China slowly but surely, it is getting isolated. The Europeans have started blocking their market to them. So far, we have not seen it happen in a very lower fashion. But slowly, we are seeing that Chinese goods are not liked by most of the big clients. And I must tell you that the Chinese pipes, there's a lot to be desired on the quality. And you -- our pipelines are -- they have a life of 30, 40, 50 years. So the moment you create even an iota of doubt on quality then just being the cheapest is not the best -- is not -- doesn't necessarily make you the supplier of choice. We are beginning to see that happening in the market.

[Radha Agarwalla, analyst]

So in terms of competition...

[Operator]

Sorry to interrupt ma'am. May we request you to rejoin the queue as there are several participants waiting for their turn. We have our next question from the line of Gokul Maheshwari from Awriga Capital Advisors.

[Gokul Maheshwari, analyst]

And congratulations on very good set of numbers. I have a couple of questions. So you mentioned very strong demand outlook in India as well as in the Middle East region. Can you comment on the U.S. and the European regions demand conditions and whether we are in a position to address that market?

[Neeraj Kumar, executive]

Okay. U.S. is a very limited market for us. We don't sell any large diameter pipes. We don't sell any DI. We do sell some stainless, and we do sell some seamless but that too -- it's a good export market to have. But overall, in percentage terms, it is small. Europe, because of its sluggish growth, can be -- Europe can be a very good market for seamless, again, and DI. But because of the sluggish growth in the European economy, at this point of time is not booming or a growing market or a market with a lot of demand. So our focus is primarily on India and in export market, Middle East.

[Gokul Maheshwari, analyst]

Okay. What would be the expected CapEx budget for FY '25?

[Neeraj Kumar, executive]

No, we don't have -- we have not announced any major projects as yet. So it will be normal CapEx. In fact, both of our major projects that we had announced, like the coke oven battery and all that is nearing completion. So we expect the CapEx spend to be a modest INR 500 crores, INR 600 crores this year.

[Gokul Maheshwari, analyst]

Okay. Great. And lastly, just on the case against the NTPC, while I understand the matter is sub-judice. But is there -- I mean, is it just that it just keeps getting delayed. Is there a resolution which is expected in the near term? If you could just give us a qualitative comment on when do you expect this to get resolved?

[Neeraj Kumar, executive]

There is some development and some insight that I can share with all of you. Now the matter is partly heard, means the arguments have started. The opposite side has more or less completed all his arguments, and the matter is partly heard with the judge. So now we can expect it to finish in the near future because once the matter is partly heard, then you cannot change the judge, you cannot change the roster. And then there is a pressure that it must finish in a little time. So this is a development that gives us some hope that during this calendar year, we do -- we should see some movement.

[Operator]

We have our next question from the line of [indiscernible] from Sanmati PMS.

[Unknown Analyst]

Am I audible, sir?

[Neeraj Kumar, executive]

Yes.

[Unknown Analyst]

Congratulations, sir, on a good set of numbers. And my first question is regarding the numbers only. Usually in the March, if I look at this quarter -- December to March...

[Neeraj Kumar, executive]

Please hold. I am not able to hear you clearly. You will have to maybe speak a little slowly.

[Unknown Analyst]

Am I audible sir now?

[Neeraj Kumar, executive]

Yes.

[Unknown Analyst]

Sir, I'm talking about operating profit. In the month of December, it was INR 988 crores. And in the month of March, it is INR 920 crores only. Whereas in March...

[Operator]

We have the line for the participant disconnected. Due to time constraints, this was the last question for today. And I now hand the conference over to Mr. Vikash Singh for closing comments.

[Vikash Singh, analyst]

On behalf of PhillipCapital, I would like to thank Jindal Saw management for giving us the opportunity to host the con call for you. I will hand it over to Mr. Neeraj Kumar for any closing remarks. Over to you, sir.

[Neeraj Kumar, executive]

I wish to thank all our investors for taking keen interest. Please continue to remain connected. If you have any other questions, send it on a mail to Rajeev Goyal, we'll be happy to respond. And we do assure you that we'll continue our good effort to create value for all our shareholders, stakeholders. Thank you. Thank you very much.

[Operator]

Thank you. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.