Venus Pipes targets Rs 70 crore H2 data-centre spooling

Venus Pipes and Tubes Limited targets approximately Rs 70 crore of data-centre pipe-spooling revenue in the second half of FY27 after receiving a firm order of approximately Rs 29 crore from a Rs 185 crore letter of intent, with management expecting earnings before interest, tax, depreciation and amortisation (EBITDA) margin above 30% on data-centre work.

How much data-centre spooling revenue is Venus Pipes targeting in H2FY27?

Venus Pipes is targeting approximately Rs 70 crore of data-centre pipe-spooling revenue in H2FY27, compared with zero such revenue in H1FY27. Chief Financial Officer Kunal Bubna said the company had begun executing the first order and expected the business to contribute in a meaningful quantum during the second half.

The target follows receipt of an approximately Rs 29 crore firm order from a data-centre customer. The order is part of a Rs 185 crore letter of intent (LOI), while management said the balance would be released as the customer finalises designs. Venus Pipes started spooling operations ahead of its original timeline to prepare for conversion of the LOI into firm orders.

Management included approximately Rs 30 crore of data-centre orders in its more-than-Rs 670 crore order book at the end of Q2FY27. It excluded the remaining LOI value from that order book, distinguishing firm orders from the unconverted opportunity.

When could the Rs 185 crore LOI convert into orders?

Venus Pipes expects the Rs 185 crore LOI to be completed over the next 12 months, with Managing Director Arun Kothari indicating completion by Q2FY28. Management also said further releases could arrive in Q4FY27 and that orders would mostly be divided across four quarters.

The conversion schedule depends on design finalisation by the customer. Mr. Kothari said orders would be issued as designs are finalised, rather than through one release, leaving the timing of the unconverted balance subject to the customer’s project process. Management described that remaining value as approximately Rs 156 crore in one response and approximately Rs 155 crore in another.

In a separate answer, Venus Pipes said it was targeting execution of the entire data-centre business before December 2027. The Q2FY28 and December 2027 comments both point to phased delivery, but the transcript does not establish a fixed quarterly value for future order releases.

The spooling ramp would be incremental to a business that reported Rs 681.6 crore in revenue from operations in H1FY27, up 20% from Rs 568 crore in H1FY26. Q2FY27 revenue reached Rs 361.1 crore, up 23.9% year on year from Rs 291.5 crore, before a material contribution from the new spooling operation.

What margins does Venus Pipes expect from spooling?

Venus Pipes expects EBITDA margin above 30% on data-centre spooling, according to management. That is a forward-looking expectation for the data-centre activity, rather than a reported segment result, and compares with the company’s overall Q2FY27 EBITDA margin of 14.3%.

Management said expected spooling margins would vary by end market. It expects EBITDA margin of about 30% in power, 20% to 25% in oil and gas, and more than 35% to 40% in nuclear applications. Venus Pipes said it would address power in the second phase, followed by oil and gas and then nuclear.

The company reported Q2FY27 EBITDA of Rs 51.7 crore, up 9.1% from Rs 47.4 crore in Q2FY26, while EBITDA margin declined to 14.3% from 16.3%. Management attributed the lower percentage margin partly to selling prices rising more than 10% year on year and more than 5% sequentially, as well as higher export freight and fuel costs.

On a per-kilogram basis, management said pipe EBITDA excluding fittings was approximately Rs 62 per kilogram in Q2FY27, compared with approximately Rs 64 per kilogram in the prior-year quarter. It attributed the Rs 2 per kilogram reduction mainly to freight, while saying that lower freight rates and a larger share of value-added products could lift profitability.

How does spooling fit into Venus Pipes’ H2FY27 plan?

Venus Pipes expects spooling and fittings to add value-added revenue in H2FY27 while targeting approximately 15% full-year pipe volume growth. The company reported about 8% year-on-year pipe volume growth in H1FY27 and said welded and seamless pipes, supported by capacity additions, should drive the increase.

Fittings are the other disclosed H2FY27 growth lever. Management expects approximately Rs 40 crore to Rs 50 crore of fittings revenue in H2FY27, versus about Rs 9 crore in H1FY27, and expects EBITDA margin above 17% to 18% in that business. Fittings represented 2.5% of Q2FY27 revenue, while other products represented 5.2%.

Venus Pipes completed capacity expansion for fittings and stainless-steel products in May 2026, and management said its second seamless-pipe facility began operating around that month. Spooling capacity will come online in phases, according to management, rather than being fully operational at once.

Venus Pipes’ order book comprised approximately Rs 640 crore of pipe orders and approximately Rs 30 crore of data-centre orders, taking the total above Rs 670 crore. Management estimated the firm order book could be executed in four to five months, separate from the phased conversion and delivery schedule for the data-centre LOI.

Exports reached Rs 147.2 crore in Q2FY27, or 41% of revenue, compared with Rs 115.6 crore in Q2FY26. Venus Pipes said exports increased more than 50% sequentially, while higher freight costs affected margins. The company also raised Rs 372 crore through a preferential allotment primarily for debt repayment and estimated H2FY27 interest savings of approximately Rs 12 crore to Rs 13 crore.

Conclusion

Venus Pipes has turned part of its Rs 185 crore data-centre LOI into an approximately Rs 29 crore firm order and is targeting approximately Rs 70 crore of H2FY27 spooling revenue. Alongside the planned Rs 40 crore to Rs 50 crore H2FY27 fittings contribution, management expects value-added products to become a larger part of second-half revenue and profitability.

The next indicators are additional LOI releases as customer designs are finalised, the phased start-up of spooling capacity and execution toward management’s Q2FY28 completion indication. Freight-cost movement, delivery of the more-than-Rs 670 crore firm order book and the expected Rs 12 crore to Rs 13 crore H2FY27 interest saving after debt repayment will also affect the second-half outcome.