Venus Pipes exports reach Rs 147.2 crore despite freight hit

Venus Pipes and Tubes Limited recorded Q2 FY27 export sales of Rs 147.2 crore, or 41% of Rs 361.1 crore revenue, while accepting higher freight costs to fulfil overseas commitments. The U.S. predominantly drove export growth, but reported EBITDA margin declined to 14.3% from 16.3% in Q2 FY26.

Why did Venus Pipes accept lower margins on export shipments?

Venus Pipes accepted the freight-related margin effect in Q2 FY27 because management chose to fulfil export orders rather than delay deliveries or shift sales to domestic customers. Management said orders executed in the quarter had largely been received in early Q1, before freight costs increased substantially, and the company prioritised continuity with long-standing overseas clients.

The effect was visible in pipe profitability. EBITDA, or earnings before interest, tax, depreciation and amortisation, excluding fittings was about Rs 62 per kg in Q2 FY27, compared with about Rs 64 per kg in the comparable prior-year quarter. Management identified freight as the main reason for the Rs 2 per kg reduction and also cited higher fuel costs.

Venus Pipes said freight had shown a downward trend in the two days before the November 5, 2026 call, but management did not give a forecast for the rate. It said new export orders generally include the higher freight cost in bids, while only some existing export contracts have provisions to share costs above specified freight thresholds. Other orders are supplied on an ex-works basis.

How much did exports contribute to Venus Pipes' record quarter?

Exports contributed Rs 147.2 crore, or 41%, of Venus Pipes' Q2 FY27 revenue of Rs 361.1 crore, the company’s highest quarterly export sales. Export sales increased from Rs 115.6 crore in Q2 FY26, while total revenue increased 23.9% from Rs 291.5 crore.

Management said exports grew by more than 50% sequentially and that the U.S. predominantly drove the increase. More than 50% of the Rs 640 crore pipe order book was from the U.S., around 40% was from Europe and the remainder was from markets including the Middle East. That order-book geography is distinct from Q2 FY27 exports, which were 41% of revenue.

Europe remained a material export market despite lower quotas. Management said European quotas had declined by around 15% to 20% year on year, but Venus Pipes’ export level in Europe was broadly similar to earlier levels. It said it manages geographic risk by moving sales between the U.S., Europe, the Middle East and other markets.

How did prices, freight and mix affect Venus Pipes' Q2 margin?

Higher selling prices lifted Q2 FY27 revenue but reduced the reported EBITDA margin percentage, while freight and fuel created an additional cost effect. Management said selling prices rose by more than 10% year on year and more than 5% sequentially. It estimated that around 12% of quarterly revenue growth came from prices, around 8% from volume and the balance from fittings.

On management’s illustration, excluding the price effect, Q2 FY27 EBITDA margin would have been about 15.5%; excluding both the price effect and higher export freight and fuel costs, it would have exceeded 16%. These are management calculations rather than reported measures. Reported EBITDA rose 9.1% to Rs 51.7 crore, while the reported margin fell 2 percentage points to 14.3%.

Seamless pipes generated 54.7% of Q2 FY27 revenue, welded pipes accounted for 37.6%, fittings 2.5% and other products 5.2%. Management said both seamless and welded pipe businesses grew by around 20%. It also said higher seamless volumes affected the cost mix because seamless production has comparatively lower raw-material consumption but higher indirect costs.

Profit after tax was Rs 26 crore in Q2 FY27, marginally below Rs 26.1 crore in Q2 FY26, despite the Rs 69.6 crore increase in revenue. Venus Pipes raised Rs 372 crore through a preferential allotment and said about Rs 344 crore would be used to retire borrowings. Management expects the resulting reduction in finance costs to begin reflecting in H2 FY27.

What could spooling and fittings add in H2 FY27?

Venus Pipes is targeting around Rs 70 crore of data-centre spooling revenue in H2 FY27, compared with no spooling revenue in H1 FY27, according to management. It expects EBITDA margin above 30% for the data-centre work. This is a management target and not a reported result.

The company has received a firm data-centre spooling order of about Rs 29 crore. Management said a further letter of intent of around Rs 156 crore is excluded from its order book and should convert in phases as the customer finalises designs. It expects the letter of intent to be completed by Q2 FY28, while the total order book exceeded Rs 670 crore, including the data-centre order.

Fittings are the other planned H2 FY27 contributor. Management is targeting Rs 40 crore to Rs 50 crore of fitting revenue in H2 FY27, compared with around Rs 9 crore in H1 FY27, and indicated EBITDA margin of 18% to 20%. It said supplies depend on customer-specific approvals, which remain part of the ramp-up process.

Venus Pipes reported about 8% volume growth in H1 FY27 and is targeting around 15% for the full year. Q2 utilisation was above 60% for welded capacity and above 80% for seamless capacity. Management expects welded utilisation to move towards 60% to 70% and seamless utilisation to exceed 90% in H2 FY27, with volume growth coming from both product categories.

Conclusion

Venus Pipes’ Rs 147.2 crore export quarter indicates that U.S.-led overseas demand contributed materially to Q2 FY27 revenue growth, even as the company chose to absorb elevated freight costs on earlier export commitments. Revenue rose 23.9% to Rs 361.1 crore, but EBITDA increased 9.1% and profit after tax remained near Rs 26 crore as freight and fuel costs affected profitability.

The next disclosed markers are whether freight continues below Q2 FY27 levels, whether higher freight is passed through in new bids and whether the balance of the Rs 156 crore data-centre letter of intent converts by Q2 FY28. Management also targets around Rs 70 crore of H2 FY27 spooling revenue, Rs 40 crore to Rs 50 crore of fittings revenue and finance-cost savings following repayment of around Rs 344 crore of borrowings.