Corporate Development     

Published: September 30, 2026
Updated: September 30, 2026

Electrosteel Castings

Pole Indian player in ductile iron pipes

Kolkata-based Electrosteel Castings (ECL), led by Umang Kejriwal, Managing Director, has made an investment of OMR 21,000 (Rs 52 lakh) for acquiring 14,000 equity shares of Arabian Water Tech LLC (AWT), representing 70% of this Oman-based company. AWT, now a subsidiary of ECL, primarily functions as a localised sales and distribution arm for imported ductile iron (DI) pipes, fittings and associated water infrastructure components.

Prior to the acquisition, ECL was already a primary supplier to AWL. Hence, the acquisition is targeted to create a low-cost forward integration move to secure its Middle East export pipeline. In the Middle East, public water infrastructure bidding requires robust bank guarantees. Because AWT faced credit challenges in establishing Letters of Credit (LCs), ECL’s financial and structural backing will transform AWT into a fully solvent bidder and could more uninterruptedly focus on project execution and other administrative operations effectively. Oman and the broader GCC area represent vital growth markets for DI pipes. Hence, AWT’s acquisition has expanded and strengthened the company’s business prospects and afforded it a tighter grip on the regional supply chain.

ITALY PURCHASE

Last year, the company acquired a 100% stake in Italy-based value manufacturing company TIS Services SpA for a total consideration of 11.50 million euros (Rs 150 crore). The Italian company is engaged in manufacturing and selling water valves for large water systems, including valves for sewage and hydro power, desalination plants and mining. The management aims to double valves revenue in the next four years with production in India as well. The acquisition will facilitate ECL’s expansion in Europe and bring increased strategic and operational efficiency in its DI pipes and fittings business.

With five technologically advanced integrated manufacturing units in India, ECL is one of the leading manufacturers of ductile iron pipes, fitting & valves, cast iron pipes, metallurgical coke, sponge iron, cement ferro silicon, pig iron and power. The company exports to 130+ countries across 5 continents. It has a presence in Europe, the UK, the US, the Middle East, Asia and Africa.

On a consolidated basis, during Q1FY27, the company achieved total income of Rs 1,465 crore, EBITDA of Rs 139 crore and PAT of Rs 48 crore, vis-à-vis Rs 1,586 crore, Rs 198 crore and Rs 89 crore respectively in the corresponding period of the previous year. The EBITDA margin also witnessed a fall from 12.5% to 9.5%, NPM fell from 5.6% to 3.3%, and EPS also got reduced from Rs 1.4 to Rs 0.80 during the same period. Though income fell by 7.6%, EBITDA and PAT have disproportionately declined by 29.8% and 45.7% respectively.

POOR F.Y.26

Even during FY26, for the full financial year, the company reported Rs 6,133 crore in total income against Rs 7,443 crore in FY 25 (down 17.6%), an EBITDA fall by 50.5% from Rs 1,159 crore to Rs 574 crore, and a PAT fall of 77.2% from Rs 710 crore to Rs 161 crore. Long-term and short-term borrowings were at Rs 254 crore and Rs 1,259 crore, with capital work-in-progress of Rs 1,186 crore at year-end.

Despite its mediocre performance in FY26 and Q1 of the current fiscal, the management is positive on the remaining period of FY27. It expects demand to restore by Q2, mainly on back of the Jal Jeevan Mission 2.0 approved by the government in March this year with an enhanced budget outlay of approximately Rs 8.69 lakh crore extended up to December 2028, wherein the Central government has also increased its contribution from Rs 2.08 lakh crore to Rs 3.59 lakh crore. An allocation of Rs 67,670 crore has also been made for financial year 2027-28.

These approvals, supported by continued investment in urban infrastructure, sewerage networks, irrigation systems and river-linking projects, will create substantial medium-to-long-term demand opportunities for the ductile iron pipe industry. As a leading manufacturer, the company would be benefited.

FOOTPRINT HOPES

Importantly, the company is also gearing to expand its value business which could strengthen its footprint across the full water infrastructure value chain in offering complete pipeline solutions. Moreover, its recently acquired Oman-based Arabian Water Tech LLC will also start contributing incrementally to the export business.

Currently, Electro Steel Casting’s stock is quoted at Rs 72.50 (face value Re 1) with a yearly high-low of Rs 99-Rs 60, book value of Rs 95.80 and market capitalisation of Rs 4,485 crore. The promoter group holds 50.13%, foreign investors 12.80%, DIIs hold a negligible 0.36%, and the balance 36.71% is with the public. The equity capital is Rs 61.82 crore.

STOCK OUTLOOK

Undoubtedly, ECL’s business prospects are bright as it is a leading and established player. However, improvement in overall profitability on a sustainable basis is desirable as it could trigger support for the stock by attracting institutional investors for a longer duration.