Anand Seamless FY26: Volume-led growth meets better returns

Anand Seamless Limited closed FY26 with a sharp jump in scale and a clear improvement in profitability. Revenue from operations rose to ₹5,600.4 lakhs, up 66.9 percent year on year, as sales volumes increased and the company expanded its share in higher-value industrial applications. EBITDA grew to ₹1,022.0 lakhs, up 73.3 percent, with EBITDA margin improving to 18.2 percent from 17.6 percent in FY25. The step-up was even more visible at the bottom line. Profit after tax doubled to ₹547.8 lakhs, up 106.7 percent, lifting PAT margin to 9.8 percent from 7.9 percent.

Behind the headline numbers sits a business that has spent years building capability in precision cold-drawn seamless tubes and value-added finned tubes. The company has operated for more than 17 years and serves domestic and export customers across industries that demand strict quality and approvals, including oil and gas, power generation, boilers, heat exchangers, petrochemicals, and automotive. Management describes the model as anchored in two segments. Seamless pipes and tubes remain the larger contributor, while finned tubes provide an important value-added leg. The year also included a structural move in operations. Anand Seamless vacated Unit 2 and relocated machinery to Unit 1 by end of July 2026, and the company listed on the BSE SME platform on September 29, 2026.

FY26 performance: higher throughput, stronger profitability

FY26 growth was supported by both scale and operating leverage. Sales of finished goods rose to 2,658.4 tonnes in FY26 from 2,148.7 tonnes in FY25, a 23.7 percent increase. Over FY24 to FY26, sales volumes compounded at 20.1 percent, indicating steady market traction even as product mix evolved.

Capacity utilisation also moved up, particularly in the core seamless segment. Seamless tubes and pipes utilisation increased to 75 percent in FY26 from 59 percent in FY25 and 43 percent in FY24. The finned tubes segment improved to 40 percent in FY26 from 30 percent in FY25, though still below seamless on utilisation. This difference matters because it hints at remaining headroom in the value-added finned portfolio if demand continues to broaden.

The profitability profile improved despite a drop in gross margin. Gross profit margin fell to 43.5 percent in FY26 from 55.2 percent in FY25. Yet EBITDA margin expanded to 18.2 percent and PAT margin rose to 9.8 percent. The income statement shows that other expenses increased 21.9 percent to ₹801.4 lakhs and employee costs were flat at ₹610.7 lakhs. Depreciation remained modest at ₹53.0 lakhs. Finance costs rose to ₹242.0 lakhs, reflecting higher borrowings and working capital intensity.

Return ratios strengthened alongside earnings. Return on equity rose to 28.1 percent in FY26 from 18.9 percent in FY25. Return on capital employed improved to 20.7 percent from 15.6 percent. Capital employed increased to ₹4,773.3 lakhs in FY26 from ₹3,526.6 lakhs in FY25. Net worth also increased to ₹1,952.5 lakhs.

Segment engine: seamless scale and finned value-add

Anand Seamless earns most of its revenue from seamless pipes and tubes, and that segment continued to anchor FY26. Seamless pipes and tubes contributed 67 percent of FY26 revenue, while finned tubes contributed 31 percent. The balance came from other operating revenue. This mix is important because each segment has a different role in the portfolio.

Seamless pipes and tubes are produced without welded joints, which helps in applications that demand uniform strength and reliability. The company uses the drawn-on-mandrel cold drawn process to achieve dimensional accuracy and surface finish. Products cater to high pressure and high temperature conditions and are used across refineries, power plants, boilers and pressure vessels, and the automobile industry. This segment also appears to be where scale gains translate quickly into capacity utilisation, as seen in the utilisation trend rising to 75 percent.

Finned tubes are the second pillar and a clear attempt to move up the value curve. The company highlights finned tubes as heat-transfer products that increase surface area and efficiency in thermal systems. These products are used in heat exchangers, condensers, boilers, air coolers, and refinery heaters. Anand Seamless manufactures multiple fin tube types, including extruded, embedded, low fin, L type, welded, crimped, and studded fin tubes. The business requires specialized manufacturing capabilities and stringent quality standards, which the company positions as a higher entry barrier compared to conventional tubes.

A practical reading of FY26 utilisation suggests that finned tubes still have runway. At 40 percent utilisation, incremental demand can lift output without large new fixed costs. But it also implies the segment needs more consistent order inflow to reach the same operating rhythm as seamless.

Approvals, quality systems, and why they matter

In precision tubing, approvals often matter as much as price. Anand Seamless has built a long list of certifications and customer-facing approvals that widen its addressable market. The company holds ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018 certifications for Unit 1. It is also approved under Indian Boiler Regulations for pipes and tubes, and in 2026 received IBR approval for finned tubes. The company is empanelled with Engineers India Limited and has PED and ADNOC approvals.

These approvals are not just compliance badges. They shape who the company can sell to and what kinds of projects it can participate in. Large refinery, boiler, and power projects typically require strict documentation, traceability, and testing. Anand Seamless states that it supplies mill test certificates compliant with EN 10204 3.1 and 3.2 and undergoes inspection by third-party agencies such as TÜV, DNV, and BVIS. This aligns with its positioning that its tubes are engineered to customer specifications rather than supplied as standard catalogue products.

Operationally, the manufacturing process described in the presentation is designed around repeatable quality. For seamless tubes and pipes, steps include raw material inspection, coating processes such as pickling and phosphating, cold drawing with die and mandrel, heat treatment to restore ductility, straightening, cutting, hydrostatic testing, and final dimensional inspection. For finned tubes, the process includes material selection, receipt tests, tube surface preparation, specialized finning processes, quality control, final testing, rust preventive coating, and packaging.

The company’s competitive moats are framed around this integrated capability. It highlights cold drawn seamless manufacturing, in-house fin tube capability, and advanced fin tube methods such as laser welded, extruded, embedded, L fin, crimped, and studded. For investors, the key link is that such capabilities support participation in regulated industrial projects, where customer switching costs are higher and quality incidents can be expensive.

Growth plan and the financial trade-offs to watch

The strategic plan focuses on four themes: deepening presence in high-value industrial segments, improving operational efficiency through an integrated facility, expanding value-added products, and widening domestic and international reach. The plan explicitly points to developing an integrated facility on owned adjoining vacant land, aimed at improving capacity and coordination across processes.

FY26 financials show the business scaling, but also underline typical trade-offs in a working-capital heavy manufacturing model. Inventories rose to ₹4,459.1 lakhs in FY26 from ₹3,119.3 lakhs in FY25. Trade receivables increased to ₹1,365.2 lakhs from ₹1,032.3 lakhs. Cash and cash equivalents fell to ₹46.5 lakhs from ₹156.9 lakhs. Operating cash flow was negative at ₹557.1 lakhs, compared with negative ₹331.0 lakhs in FY25.

Borrowings also increased. Long-term borrowings rose to ₹1,119.7 lakhs in FY26 from ₹903.7 lakhs in FY25. Short-term borrowings increased to ₹1,682.8 lakhs from ₹1,209.6 lakhs. Debt to equity stayed at 1.4 times, slightly better than 1.5 times in FY25, but still meaningful. The company’s current ratio improved to 1.7 times, suggesting liquidity remains managed, yet the cash flow profile indicates that growth is absorbing capital.

Geographically, domestic revenue remains the main driver. Domestic revenue in FY26 was ₹5,311.9 lakhs, up from ₹3,117.4 lakhs in FY25. Gujarat was the largest state in FY26 at ₹3,051.7 lakhs, followed by Maharashtra at ₹993.6 lakhs. Export revenue in FY26 was ₹288.5 lakhs, higher than FY25 at ₹237.2 lakhs, but far lower than FY24 at ₹1,299.8 lakhs. Within FY26 exports, the main markets were the United Arab Emirates, Sultanate of Oman, Germany, the United States of America, and Saudi Arabia.

This export pattern suggests volatility rather than a straight-line trend. Management highlights exports across the Middle East, Europe, Asia, and the United States and notes recognition as a One Star Export House in 2025. For investors, the key question is whether the export book stabilizes as approvals and relationships mature, or whether domestic projects remain the dominant growth lever.

The global market context in the presentation is supportive. It cites growth drivers in energy infrastructure, power, process industries, and heat exchangers, and points to market growth projections for seamless tubes and heat exchangers. The company also highlights country-wise growth rates for seamless tubes over 2025 to 2035, with India shown among the faster-growing markets. These trends are directionally positive, but execution will depend on the company’s ability to convert approvals and capacity into steady order flow while controlling working capital.

What FY26 says about execution

Management’s commentary frames the company as a manufacturer and exporter with integrated processes and a focus on quality and delivery. FY26 numbers support a view of improving execution. Revenue growth outpaced volume growth, margins improved at the EBITDA and PAT level, and return ratios recovered after a softer FY25. Capacity utilisation in seamless rose steadily across three years, and finned utilisation improved as well.

At the same time, the balance sheet shows the cost of scale. Higher inventories and receivables, combined with higher borrowings and finance costs, led to negative operating cash flow. This is not unusual for a growing industrial manufacturer, but it is a key variable that will shape the quality of earnings in the years ahead.

The FY26 theme can be described as disciplined scale-up. The company expanded throughput, improved profitability, and strengthened returns, while positioning itself around approvals-driven, customer-specific products. The next phase, as outlined in the growth plan, will test whether Anand Seamless can lift utilisation further in finned tubes, broaden its reach in regulated industrial projects, and translate growth into steadier cash generation. If that happens, the improved return profile in FY26 could become more durable.