Hariom Pipe

Hariom Pipe Industries delivered a strong Q1 FY26, with sales volumes growing 35% year-on-year to 78,221 metric tons, surpassing the 30% growth target. Revenue from operations increased 34% YoY to INR460.96 crores, while EBITDA (excluding other income) rose 29% to INR57.58 crores, maintaining a healthy margin of 12.49%. Net profit for the quarter was INR23.61 crores, up 35% YoY, resulting in an EPS of INR7.63.

The company's strategy to focus on value-added products continued to yield results, with these products contributing 98% of total revenues. The average selling price improved 9% sequentially to INR58,931 per metric ton, helping cushion input cost fluctuations. This product mix, coupled with operational efficiency and backward integration, supported the blended EBITDA per metric ton of INR7,362, with integrated MS tubes achieving INR8,200+ and galvanized products INR7,200+.

Hariom Pipe incorporated Hariom Power Energy Private Limited, a subsidiary, to execute a 60 MW solar power project. A Power Purchase Agreement (PPA) has been signed with MSEDCL for 25 years at INR2.96 per unit, with an additional INR0.25/unit incentive for the first three years if completed by September 2, 2026. The project, with an estimated CapEx below INR240 crores, will be funded through debt and PM Kusum scheme equity subsidy, and is expected to generate an EBITDA level of approximately 75%.

The company demonstrated improved operational efficiency, reflected in a significant reduction in inventory holding days from 128 days to 89 days as of June 30, 2025. This improvement is attributed to better procurement planning, faster raw material conversion, and improved sales productivity. Management aims to maintain or further reduce these working capital days, indicating a focus on cash flow and efficient operations.

Hariom Pipe is making strategic progress in innovation and market development, particularly in the fast-growing renewable energy sector. They have transitioned to high-strength pre-galvanized tubular sections for solar structures, with initial trial orders of approximately 200 tons per month already received. The company is also expanding its customer footprint by offering a 'one-stop-shop' solution, enhancing customer engagement, and adding new OEM clients monthly.

The company's total MS tubes nameplate capacity, including the recently leased Ultra Pipes (84,000 tons), is approximately 210,000 tons. Current capacity utilization is around 60%, with a target to increase it to 70-80% maximum. Management is confident in achieving its 30% year-on-year volume growth target for FY26, supported by diversified demand across multiple sectors and integrated manufacturing units.

Hariom Pipe has formed an internal committee for 'green steel' to align with the Indian government's push for sustainability. This initiative aims to explore newer technologies and scout for reliable partners to significantly increase the company's green steel footprint. Management expects a large portion of future production to come from this green steel initiative, leveraging past fund-raising operations to support this strategic shift.