Scoda Tubes to Triple Finished Goods Capacity with Major Expansion by FY27

Scoda Tubes Limited (NSE: SCODATUBES), a prominent player in the stainless steel tubes and pipes sector, has outlined a significant capacity expansion strategy, as detailed in its Q4 FY25 earnings call transcript released on June 28, 2025. The company plans to nearly double its seamless production capacity and achieve a substantial increase in its welded production, aiming to triple its overall finished goods capacity.

According to the transcript, Scoda Tubes intends to boost its seamless production capacity from the current 10,068 MTPA to 20,068 MTPA. Concurrently, its welded production capacity is projected to surge from 1,020 MTPA to 13,150 MTPA. This combined expansion will elevate the company’s total finished goods capacity from 11,088 MTPA to 33,128 MTPA. The company’s existing mother hollow capacity of 20,000 MTPA, established in 2022, will continue to support captive consumption and backward integration.

The expansion project is estimated to cost INR 100 crores in capital expenditure, with INR 55 crores allocated for seamless capacity and INR 45 crores for welded capacity. These investments are primarily funded through the proceeds from the company’s pre-IPO and IPO, which earmarked INR 105 crores for capacity expansion.

Commissioning and Strategic Focus:

The new seamless pipes and tubes capacity is anticipated to become operational in the second half of FY26, with the company targeting a start-up possibly by August or September 2025. The new welded pipes capacity is expected to be commissioned by Q1 FY27. Management indicated that the new welded capacity would focus on ‘welded pipes’ for broader commercial demand, distinguishing it from their existing ‘welded tubes’ which cater to niche applications and have seen declining demand.

Scoda Tubes aims to achieve an optimum utilization level of 80-85% across its blended seamless and welded capacities by FY28-FY29. The company projects its volume growth to be 2.5 to 3 times the underlying industry growth, which is estimated at 6-8% for stainless steel pipes and tubes by FY29. The strategic focus includes expanding its international customer base, diversifying its clientele, and launching new products in the welded segment. Key target sectors for growth include green energy, power, marine (shipbuilding), and defense.

For FY25, Scoda Tubes reported a 21% year-on-year growth in revenue from operations to INR 484.9 crores, with EBITDA growing by 33% to INR 78.1 crores and PAT by 73% to INR 31.7 crores. The company expects blended margins of 15-16% to be achievable, with seamless products typically yielding 16-18% and welded products 12-13%.

The announcement was made outside market hours. At the time of the announcement, Scoda Tubes Limited’s shares were trading at INR 197.15, reflecting a 1.3% decline.

source: Corporate Announcement

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