jtl industries ltd share price Management discussions


Global Economy

2021-22 began on an ambiguous note, wherein countries began to reimpose mobility restrictions following the rise in COVID-19 strains and Omicron spreads. However, accelerated mass vaccination drives and ease of lockdowns aided in bringing economic recovery. Furthermore, governments and central banks of several nations continued to provide policy support in order to stabilise the economy and promote private investment and consumption. Rising energy prices and supply interruptions, on the other hand, resulted in higher and more widespread inflation than expected, particularly in the United States and many emerging market and developing nations. Global growth is expected to fall from 6.1% in 2021 to 3.6% in 2022, a 0.8% lower than predicted in World Economic Outlook (WEO) of January 2022. This negative change was mainly owing to anticipated revisions of growth projection in the United States and China. In the United States, a revised assumption of removing the Build Back Better fiscal policy package from the baseline, faster withdrawal of monetary assistance, and ongoing supply constraints led to a 1.2% drop in the prognosis. In China, disturbances caused by the zero-tolerance of COVID-19 policy and prolonged financial stress among property developers resulted in 0.8% downfall in growth projections. Thus, global growth is expected to slow down to 3.6% in 2023.

Indian Economy

Against the backdrop of the COVID-19 pandemic and induced challenges, the Indian Government implemented policies to cushion impact on the domestic economy, including specific vulnerable sections of society and the business sector. The Government monetary support significantly bolstered medium-term demand, comprising aggressive adoption of supply-side measures to position the economy for long-term growth. With the vaccination programmes having reached the majority of the population, the economy regained speed, and supply-side reforms are likely to reap long-term advantages, going ahead. In 2021-22, Gross domestic product (GDP) rose by 8.7%, making India the fastest-growing major economy in the world. (Source: Economic Times).

The impact of the pandemic?s (ongoing) third wave is expected to be limited compared to previous waves, according to the Reserve Bank of India?s (RBI) sixth bimonthly monetary policy for 2021-22. The outlook for contact-based services and urban demand is expected to improve thereon. According to the RBI, the Union Budget 2022-23 declarations on enhancing public infrastructure through higher capital expenditure are expected to boost growth, increasing private investments through significant multiplier effects. Taking all of these factors into account, the RBI forecasts 7.8% real GDP growth for 2022-23. (Source – Care Edge Research Report)


India?s Iron & Steel Pipe and Tube industry, estimated at almost Rs. 60,000 Cr., represents around 8% of the worldwide Steel Pipe market. The rough steel creation is supposed to be imperceptibly higher than 2018-19, when India delivered almost 111 Million tons. Moving forward, steel request will be upheld by financial recuperation, Government spending and upgraded liquidity. The Union Budget 2022-23, has an increment of 36% Y-o-Y in the portion of capex at Rs. 7.5 lacs Cr. The spending plans act as a push towards seven motors, comprising streets, railroads, air terminals, ports, mass vehicle, streams, and calculated infra. The designation for different plans like Pradhan Mantri Awas Yojana (PMAY) plot, Jal Jeevan Mission will prompt positive effect on long-steel players.

(Source – India – steel update – January 2022)

In response to rising demand and capital investment for modernisation and capacity creation in End-user industries, Indian pipe and tube producers have evolved during the previous decade. Steel pipe and tube producers have successfully scaled their operations to match the global economic magnitude as a result. Despite a contraction in 2019-20, due to reduced metal prices and volume losses following the pandemic, domestic players? overall revenues nearly doubled in the recent decade.

As a result of reasonable pricing, good quality, and location benefits, India?s manufactured pipes have high demand in Europe, Thailand, Malaysia, the Middle East, and Indonesia. However, as domestic consumption continues to grow rapidly, export volumes decreased, and the difference between exports and imports reduced over time. Furthermore, the Indian sector has limited capacity for high-temperature-resistant pipes, needed in drilling and oil exploration and often, are imported by India?s oil refineries.

Pipe imports increased in 2020-21 and 2021-22 owing to increased refining capacity and a renewed focus on oil exploration by the Government to lower the country?s crude oil import bill.

Steel prices and demand are likely to continue to rise in 2021-22 backed by several Governments? stimulus packages. One of the primary causes keeping steel prices high, is China?s absence from the global export market and increased imports of steel from China. China?s expected consumption, and the country?s aim to lower output levels in order to reduce CO2 emissions, are among the key concerns to be kept track of.

Source – Metal pipes industry shows its mettle in pandemic - Demand pipeline strong (careratings.com)


Emphasis on the development of warehouses, e-commerce, higher-quality residential construction, and housing, due to population boom, are potential growth drivers of the industry.

New opportunities to revolutionise Construction industry:

Warehousing JLL (a global real estate services firm) projects that there will be 344 Million sq. ft. of warehousing space in India by 2022
• Logistics, engineering, auto and ancillaries, e-commerce, FMCG, retail and telecom, and white goods have remained the biggest demand drivers
Infrastructure Government plans to start 100 additional airports by 2024
• Over next three years, Rs. 19,000 Cr.is to be invested in upgrading airport infrastructure in the country, especially in smaller cities
Real Estate • India?s vertical growth pushed high-rises buildings with G+20 floors or more
• Government Panel formed to look into the upward revision of FSI norms in all major cities
Water Sanitisation • Jal Jeevan Mission (JJM) is to provide tap water, to 180 Million rural household by 2024
• JJM is one of the India?s biggest infrastructure outlay with

USD 50 Billion spending

• Huge demand for pipes in water systems and sanitisation
Affordable Housing • Trends for affordable housing with low cost & faster completion is picking up pace in India
• Modular building is expected to be the future construction methodology Modular steel structures are constructed in-house with final on-site, where the steel modules are stacked and connected together


A. Hot-Dipped Galvanised Steel Tubes and Pipes

The Company has a large-scale operation, which producesandsellsgalvanisedsteeltubes/pipes,welded black pipes/tubes, and electro galvanised steel tubes/ pipes. JTL Infra also manufactures mild steel tubes for structural, mechanical, and general engineering applications, along with ERW pipes for water, gas, and sewerage, steel tubes for belt conveyor idlers, water wells, and lancing pipes for various automotive and industrial uses. These pipes are mostly utilised in the gas, oil and petroleum, and hydro industries, to name a few.

Galvanised steel pipes are carbon steel pipes that have been zinc-coated for protection. These are crafted from high-quality steel with a galvanised finish. Pipes that have been hot-dipped galvanised, are chosen over others because they are more corrosion resistant. In addition, hot-dipped galvanised pipes are easy to weld and are suitable for high-temperature applications.

B. ERW Black & Hollow Steel Tubes and Pipes

India is the world?s largest ERW production centre, with an annual domestic market of 8-10 Million tonnes. The

ERW Pipe market has risen by 4% to 5% over the last five years, and it is predicted to increase by 8% to 10% over the next few years. The expected rise in ERW Pipe market will make it the fastest-growing segment in the steel pipe business. Irrigation and agricultural, construction & building materials, energy & engineering, core infrastructure, and heavy vehicles are all applications for ERW steel pipes. By 2024, the global market for Electric

Resistance Welded (ERW) Pipes is expected to reach

95.4 Million tonnes, due to an increase in infrastructure projects, including water & sewage systems, and oil & gas pipeline networks. The Company manufactures and exports hollow sections, structural hollow sections, hollow steel sections, square/rectangular hollow sections, round hollow sections, mild steel black ERW square tubes, rectangular tubes, round hollow section tubes, and hot rolled steel sections. To ensure safe delivery to end-users, these pieces are offered with an anti-rust oil coating on both, the interior and outside. In ERW water, gas, and sewage pipes, steel tubes for belt conveyor idlers, water wells, and lancing pipes for a range of automotive and industrial applications, these pipes find their final casing usage.

C. Solar Module Mounting Structures/Panels

Indian Solar Power industry has seen considerable growth in recent years. Solar power systems are used to cut electricity costs in industries such as Textiles, Cement, Paper, Steel, Chemical, Dairy, and Ceramics. Solar mounting structures, also known as racking, are the cornerstone of every solar system. The appropriate sort of racking can make or break an installation, as it impacts the whole system?s stability. Because space is often not an issue, rooftop solar installations in industries are a realistic solution for heavy electric load requirements. In line with the same, JTL Infra is expanding its solar module structure business, by offering high-quality products in local and international locations. The Company is attempting to improve the use of solar panels mounted on rooftops, buildings, and facades.

FINANCIAL PERFORMANCE Revenue from Operations (Rs. in Cr.)

2019-20 2020-21 2021-22
229.9 435.8 975.4
EBITDA (Rs. in Cr.)
2019-20 2020-21 2021-22
16.4 32.8 72.5
EBITDA Margin (%)
2019-20 2020-21 2021-22
7.1 7.5 7.4
PAT (Rs. in Cr.)
2019-20 2020-21 2021-22
10.1 20.1 50.0
PAT Margin (%)
2019-20 2020-21 2021-22
4.4 4.6 5.1
Earnings Per Share ()
2019-20 2020-21 2021-22
1.9 3.8 8.4*

* The face value of the shares of the Company was subdivided from Rs. 10 per share to Rs. 2 per share and EPS of 2021-22 is adjusted accordingly.


Ratios 2021-22 2020-21
Debtors Turnover (Days) 36 61
Inventory Turnover (days) 27 40
Interest Coverage (%) 11.5 4.1
Working Capital (days) 53 82
Net Debt (Rs. in Cr.) 80 59
Current Ratio (%) 2.0 1.8
Debt-to-Equity Ratio (%) 0.52 0.65
EBITA Margin (%) 7.4 7.5
Net Profit Margin (%) 5.10 4.60
ROA (%) 18.09 9.58
ROCE (Avg) 32.67 22.36
Debt-to-EBDITA Ratio (%) 1.12 1.92
EPS (in ) 8.4 3.8
ROE (%) 31.76 20.70


The Company closely monitors the impact of various factors on its business and the efficiency of its

All risks are reviewed on a regular basis, and a focused mitigation approach is taken to limit their impact on the Company?s operations. Risk management is a critical component of the Company?s operations, wherein, the Risk Management Policy facilitates the identification and analysis of various internal and external risks.

The key risks and recommended mitigating actions followed by the Company

Risk Impact Mitigation
Slow Economic Growth Risk: The economic downturn harmed all steel end-user categories, including oil & gas, construction, capital goods, consumer durables, autos, and so on. Unfavourable circumstances, such as rising inflation or a macroeconomic recession, could have an effect on the Companys revenue stream. The Company?s diverse product range, several end-user sectors, and significant presence in international markets,Enables it to generate revenue from multiple sources Besides, due to effective Government stimulus, India is well-positioned for rapid growth in the coming years.
Competitor?s Risk: As obstacles to enter into the Steel industry have been reduced, following the liberalisation of steel trade, the Company may face intense competition from its peers. The Company is still examining product demand and developing solutions to help forge higher product quality, which shields it from worldwide competition hazards.
Currency Risk: The Company is subject to currency risks due to its wide clientele across the world. This could have a positive or negative impact on the Company. The Company has a well-defined Foreign Exchange (FX) risk management strategy in place that allows it to reduce risk by implementing various hedging strategies.
The Company uses derivative financial instruments such as futures contracts to hedge its foreign currency exposures.


JTL Infra is committed to meeting its ESG goals in order to deliver long-term benefits to its stakeholders. The

Company aspires to make a demonstrable contribution to the development of a society. This would serve the needs of all people in a socially, morally, and environmentally responsible manner.

Environmental Initiative

JTL Infra believes that the most essential aspect, impacting human life is the environment. Therefore, the Company is working towards making the environment cleaner, greener, and healthier as part of its commitment to contributing in fostering environmental conservation. Furthermore, JTL advocates renewable energy and recognises rooftop solar panel installation as a viable option. In addition, the Company plans to construct a rainwater harvesting plant that will recycle water for human consumption.

Social Initiative

The Company is dedicated in aiding the local community by facilitating skill development and recruiting rural youth for local sales operations. JTL made sure of improving workplace environment by establishing industrial hygiene systems.


The Company avails the services of M/s. Suresh K Aggarwal & Co. for statutory audits, M/s. Arvind Singla & Associates for internal audits, and M/s. S. V. Associates, Company Secretaries for secretarial audits to ensure objectivity and transparency. Besides, the Company?s three independent board members oversee the day-to-day operations of the business.


The Company has put in place a robust internal control system to maximise the effectiveness and efficiency of business activities. JTL Infra follows proper hierarchy for reporting of routine activities and direct access to the Senior Management is available in extreme cases, as well. Besides, the Company has framed a whistle-blower policy to report concerned areas to the Management. The Management is responsible for establishing and maintaining internal financial controls in the business. Furthermore, in order to protect all assets from unauthorised use or disposition, with reference to financial statements, the Company ensures adequacy and relevance of its internal control system at all times.


The Company has always prioritised individual and team development. The system follows transparency and is directed at attaining the needed results. JTL Infra strives to retain, develop, and provide a better working environment for its workers by creating an atmosphere of trust, competition, and challenge. With regards to human resources, the business? key focus is on creating ambitious prospects for personal and professional progress through training and ample career advancement assignments. Human resources are the Company?s most valuable asset.

This field,like any other capital, requires considerable investments that will bear fruit in the future. The Company invests in its employees through education and training programmes, with an emphasis on improving production quality and level. JTL Infra demonstrated a true dedication to employees, investors, contractors, consultants, and other linked persons by providing safe working conditions, and other protection-driven welfare initiatives. The Company currently employs around 600 people.


Statements in this Report on Management Discussion and Analysis relating to the Company?s objectives, projections, estimates, expectations, or predictions may be forward-looking statements within the meaning of applicable security laws or regulations. These statements are based upon certain assumptions and expectations of future events. Actual results could, however, differ materially from those expressed or implied. Important factors that could make a difference to the Company?s operations include global and domestic demand supply conditions, selling prices, raw material costs and availability, changes in government regulations and tax structure, general economic developments in India and abroad, factors such as litigation, industrial relations and other unforeseen events. The Company assumes no responsibility in respect of forward looking statements made herein which may undergo changes in future on the basis of subsequent developments, information or events.