Synopsis: A pipe manufacturer’s stock has surged sharply this quarter even as its latest earnings disappointed, with domestic institutional buying and a growing Middle East hydrogen pipeline narrative pulling investor attention away from near-term numbers.
Weak quarterly numbers don’t always dent investor enthusiasm, especially when the story is about what’s coming next. This is exactly what’s playing out for a leading Indian pipe manufacturer, where a sharp rally in the stock price has coincided with rising domestic institutional buying, even as the company’s June quarter results showed a steep profit decline.
Shares of Jindal Saw Limited, with a market capitalization of Rs.16,652 Crore, closed at Rs.260.4 i.e. around 1.79% below its previous closing price of Rs.265.15. It trades at a P/E ratio of 28.4.The stock has climbed from around ₹185 to nearly ₹265 between the start of the quarter and June end, a rise of roughly 45%.
Weak Q1 Numbers, But the Order Book Tells a Different Story
Jindal Saw Limited is one of India’s leading manufacturers of iron and steel pipes, producing a diversified range including ductile iron, seamless, LSAW, and HSAW pipes. The company serves the oil and gas, water infrastructure, and industrial sectors, with a growing presence across the Middle East, Europe, and other export markets, alongside its domestic manufacturing base.
Jindal Saw’s Q1 FY27 results were far from encouraging on the surface. On a consolidated basis, total income rose 9% year-on-year to ₹4,476 crore, but EBITDA fell 39% to ₹421 crore, while PAT dropped 78% to ₹91 crore.
Management attributed the pressure to a mix of factors: a disrupted seamless pipe business after its API license was suspended between January and mid-June 2026, a prolonged slowdown in the Jal Jeevan Mission-linked water pipe segment due to delayed government fund releases, and a near-total halt in Middle East exports after the Strait of Hormuz blockage brought MENA trade to a standstill this quarter.
Despite this, the company’s order book remains sizeable at 1.78 million tonnes, including a large 6 lakh metric tonne order from Saudi Arabia that is currently on hold due to the shipping disruption. Management said it is now exploring alternate routes and solutions with buyers to execute at least part of this order, given that Saudi Arabia has access to both sides of the sea.
Rising DII Holding and the Hydrogen Pipe Opportunity
What seems to be driving investor interest despite the soft quarter is a combination of improving domestic institutional confidence and a longer-term growth story tied to new geographies and new-age applications. Domestic institutional investors have significantly raised their stake from 5.79% in March 2026 to 8.36% in June 2026, a shift that stands out given the otherwise disappointing earnings print.
The bigger draw for many investors, though, appears to be the company’s expanding footprint in hydrogen transportation pipes. During the earnings call, management confirmed that its pipes have qualified under API 5L standards with a minimum yield strength of 70,000 psi at its Italy facility, specifically for transporting pure hydrogen and hydrogen-natural gas blends.
The company has already supplied 180 miles of 18-inch pipe for a related project. Management was candid that ground-level demand for hydrogen pipes hasn’t scaled up meaningfully yet, but said the facilities and certifications are ready to capture demand as and when it materializes.
Alongside this, the company is building out a Middle East manufacturing corridor, with a seamless pipe plant coming up in Abu Dhabi and a joint venture SAW pipe facility in Saudi Arabia, both expected to start commercial production around FY29.
Management guided that these plants could see peak capacity utilization within two to three years of commissioning, positioning the company to benefit from a broader regional shift toward overland pipeline infrastructure that avoids vulnerable maritime routes like the Strait of Hormuz.
Management also indicated that the first half of FY27 is likely to remain soft, with a meaningful recovery expected only from the second half, once API-certified seamless pipe supplies resume at scale and the Middle East shipping situation eases. Interest costs, which spiked in the March quarter due to rupee depreciation, have also stabilised this quarter, offering some relief on the financial front.
The Bottom Line
The stock’s sharp rally sits somewhat at odds with a quarter marked by falling profits and multiple operational headwinds. Yet the market appears to be looking past the near-term weakness, pricing in the company’s expanding hydrogen pipe capabilities, its Middle East manufacturing push, and a possible recovery once API certifications and shipping routes normalise. Whether this optimism holds will likely depend on how quickly the second-half recovery management has guided for actually plays out on the ground.
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