Hariom Pipe — Q1 FY26 earnings call

Call held 11 Aug 2025

Management summary

Hariom Pipe Industries delivered a strong Q1 FY26, exceeding volume growth targets with a 35% year-on-year increase in sales volumes to 78,221 metric tons. Revenue from operations grew 34% to INR460.96 crores, driven by a strategic focus on value-added products which now constitute 98% of revenues. Profitability also saw robust growth, with EBITDA increasing 29% to INR57.58 crores and PAT up 35% to INR23.61 crores, supported by improved operational efficiency and working capital management.

Highlights

  • Sales volumes increased 35% YoY to 78,221 metric tons, surpassing the 30% growth target.

  • Revenue from operations grew 34% YoY to INR460.96 crores and 15% QoQ.

  • EBITDA (excluding other income) rose 29% YoY and 18% QoQ to INR57.58 crores, with margins maintained at a healthy 12.49%.

  • PAT increased 35% YoY and 37% QoQ to INR23.61 crores, with PAT margins improving to 5.11%.

  • Working capital days (inventory holding days) significantly improved from 128 days to 89 days.

  • Value-added products contributed 98% of revenues, reflecting a strong product mix.

Key financials

  1. Sales Volumes 78,221 metric tons +35%YoY
  2. Revenue from Operations ₹460.96 Cr +34%YoY
  3. EBITDA (excl. other income) ₹57.58 Cr +29%YoY
  4. EBITDA Margin 12.5%
  5. PAT ₹23.61 Cr +35%YoY
  6. EPS ₹7.63
  7. Blended EBITDA per Metric Ton ₹7,362
  8. Working Capital Days 89 days

What they filed

Q1 FY27: revenue down 6.9%, net profit down 29.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue314 300 400 461 336 +7%363 +21%507 +27%429 −7%
EBITDA42 40 49 58 43 +2%45 +13%64 +31%50 −14%
Net profit16 11 17 24 10 −37%12 +9%30 +76%17 −29%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Turnover
₹459.62 Cr Total
  • Galvanized Product & Other Steel Products ₹333.11 Cr 72.5%
  • MS Tubes and Scaffolding ₹126.51 Cr 27.5%

Order book

medium confidence

Composition

  • Solar Structures (Trial Orders) (product) 600 metric tons

Pipeline

deal pipeline tcv

New OEM contracts are under process and being added monthly.

The company is continuously adding new OEM clients and has received initial trial orders for solar structures, indicating a growing pipeline of business, though no consolidated order book value was provided.

Source: Q&A

Capital allocation

high confidence
  • Capex ₹240 Cr Certain debt and capital subsidy under PM Kusum scheme
    • 60 MW Solar Power Project ₹240 Cr
    Harsh Rao: Okay. And sir, in solar, just one last question. Sir, in solar, in the last call, you had mentioned that the CapEx would be somewhere between INR180 crores to INR240 crores. Now, since you are finalizing on the land acquisition, have you freezed on an amount, that how much can the final CapEx be for us? Amitabha Bhattacharya: Sir, actually, the TEV report is under process. And you can say, whatever we have given, the lower side will be happening. Higher side, you are telling that INR240 crores. It is within the below of INR240 crores. Sandesh Kumar: With respect to the solar order, for 1 MW we may require around INR3 crore, so around INR180 crore required. So any fundraising on card? Amitabha Bhattacharya: No, we are not doing any fundraising so far for that. Sandesh Kumar: So how we are managing this for doing this 60 MW without any fundraising, because we may require...? Amitabha Bhattacharya: We have to take a certain debt on that, and simultaneously on last Board meeting, the Committee approved, where we are given, you can say a mix of capital subsidy under the PM Kusum scheme also.
  • Debt Net ₹363.7 Cr
    • Repayment Long-term debt expected to become negligible in the next 2 years.
    Amitabha Bhattacharya: Just a minute sir. I'll give you. Total borrowing is INR363.70 crores as of 30 June.
  • M&A Hariom Power Energy Private Limited Joint venture · Announced

    To execute a 60 MW solar power project, providing long-term fixed revenue and driving incremental volumes of high-margin solar steel structures for Hariom Pipe.

    Expected EBITDA level near 75% for the solar project, offering predictable 25-year revenue stream and twin benefits for Hariom Pipe.

    Yashovardhan: Okay, okay. And secondly, sir, the newly incorporated Hariom Power Energy Private Limited, if you can just touch upon that and how will it impact our profitability and our risk moving on? Amitabha Bhattacharya: See, Hariom Power Energy Private Limited that is, we are, presently, it's the only subsidiary company of Hariom. The thing is, the long-term revenue are fixed. We have already signed the PPA with NCDCL for 25 years supply of 60 megawatts solar power at a price of INR2.96 per unit. Apart from that, the company will get additional INR0.25 per unit as an incentive for next 3 years if the project will be completed on or before 2nd September of 2026. Additionally, to that, it is covered under PM Kusum scheme component C where we are getting the equity subsidy during the construction period. Soumen Bose: And if I may add, Amitabha, basically for the shareholders of Hariom Pipe, the benefit is two-fold in this new project. The companies will retain the economic interest in the project predictable 25-year-old revenue stream, point number one. Point number two, this project will also drive incremental volumes of high-margin solar steel structures from our existing facilities which are billed to Hariom Pipe directly.

Guidance & targets

Volume

  • Year-on-year Volume Expansion Volume · FY26 · High confidence 30%
    At the start of FY26, we had set a clear growth outlook aiming for around 30% year-on-year volume expansion and I am happy to share that we have met and even exceeded that target in Q1.

    — Rupesh Kumar Gupta

Profitability

  • Blended EBITDA per Metric Ton Profitability · FY26 · High confidence INR7,362
    Amitabha Bhattacharya: So, volume growth already we have given said year-on-year 30% volume growth in our last quarter in Q4. And the EBITDA per metric ton blended EBITDA per metric ton as of first quarter 2026, INR7,362. Ajit Sethi: Okay. Sir, as in Q1, we have done EBITDA per ton of around INR7,300. So, going forward, this EBITDA per ton is sustainable? Amitabha Bhattacharya: Yes, yes. 100%. 100%.

    — Amitabha Bhattacharya

  • Solar Project EBITDA Level Profitability · Operational · High confidence 75%
    And the EBITDA percentage is coming near to 75% as per the financials.

    — Amitabha Bhattacharya

Debt

  • Long-Term Debt Debt · Next 2 years · Medium confidence Negligible
    So typically, the long-term debt, we are having already the repayment schedule. So next coming 2 years, the long-term debt will become negligible.

    — Amitabha Bhattacharya

Project Completion

  • 60 MW Solar Project Completion Project Completion · September 2, 2026 · High confidence Completed
    The deadline of the completion of the project will be 2 September, 2026.

    — Amitabha Bhattacharya

Capacity

  • Capacity Utilization Rate Capacity · Ongoing · Medium confidence 70-80% maximum
    We are presently utilizing around 60%. It will be going up to 70% to 80% maximum.

    — Amitabha Bhattacharya

Working Capital

  • Inventory Holding Days Working Capital · Future · High confidence Around 89 days or lower

    From 128 days today

    Overall inventory holding days is 89 days as of June 2025. I am very much pretty sure that it will be round around within the limit in the coming future also.

    — Amitabha Bhattacharya

What to watch in Q2 FY26

Solar Project Completion Progress

Next quarter and subsequent quarters until Sep 2026.
Current Land finalized for 32 MW, 8 out of 13 locations finalized.
Target Continued progress towards Sep 2, 2026 deadline.

Why it matters

Timely completion is crucial for realizing the fixed long-term revenue and incentives from the 60 MW solar project.

The deadline of the completion of the project will be 2 September, 2026.

Risks & concerns

  • Execution risk for solar project

    medium

    Large-scale solar project has a specific completion deadline (Sep 2, 2026) and involves land acquisition and regulatory processes.

    Acknowledged

  • Raw material price volatility

    low

    Analyst noted slight fluctuation in raw material prices, but management stated prices are stabilizing and company's product mix and efficiency cushion impact.

    Analyst acknowledged

Q&A highlights

8 direct
Customer/Dealer Inventory Levels Direct
No, generally, what happens is, whenever there is a demand and supply parameter, then the amount of stock that has to be maintained, it is consistently maintained. So, there, if the dealer has less stock, then he also has a customer loss, so he will also continue to maintain it.

Addresses concerns about channel stuffing or unsustainable demand, indicating stable inventory practices among dealers despite volume growth.

Asked by Agastya Dave

Gross Margin and EBITDA per Ton Sustainability Direct
There is no scope for a reversal in this because, as you said, there is stability in raw material pricing and the company is now increasing its footprint in OEMs, in engineering products. So there the company's performance and profitability is expected to increase.

Clarifies management's view on margin sustainability, attributing it to product mix, operational efficiency, and stable raw material prices, rather than temporary factors.

Asked by Agastya Dave

Solar Plant Project Details (Timeline, Tariff, CapEx) Direct
We have closed it at 2.96. Our PPA is assigned, it is INR2.96. And within the time, it will be completed. ... The deadline of the completion of the project will be 2 September, 2026. And after completion, first three years, we are getting additional INR0.25 as an incentive per unit.

Provides concrete details on the new solar power project, including tariff, completion timeline, and incentives, which will contribute to long-term revenue and profitability.

Asked by Agastya Dave

Contribution and Growth of Solar Structures Direct
Now, what is there in this, basically, we have taken out a trial production and have made its products ready according to the complete engineering function and module. And we have started supplying one or two companies in this quarter. ... trial orders are already received by 200 tons approximately per month.

Indicates the nascent but growing potential of a new value-added product segment, with initial orders and plans for gradual expansion.

Asked by Agastya Dave

Net Debt Level and Repayment Plans Direct
Total borrowing is INR363.70 crores as of 30 June. ... So next coming 2 years, the long-term debt will become negligible.

Provides clarity on the company's debt position and a positive outlook on debt reduction, indicating financial health and prudent capital management.

Asked by Ajit Sethi

End-User Industries Driving Volume Growth Direct
Now, Hariom has so many multiple products. And to fulfil that basket, we need a lot of hard work. And our customers are very satisfied because they are getting one-shop-stop. Today, the benefit of one-shop-stop is that logistics is saved. Terms are very good. Financial support is available. So with all these things, we are increasing the customer footprint.

Explains the diversified nature of demand and the company's strategy of offering a comprehensive solution, reducing dependence on any single sector and driving broad-based growth.

Asked by Harsh Rao

Total Capacity and Utilization, including Ultra Pipes Direct
No, it is not including the Ultra Pipes. ... So, 84,000 you can take up to 70% or 75% of the Ultra Pipes maximum. ... We are presently utilizing around 60%. It will be going up to 70% to 80% maximum.

Clarifies the company's current and potential capacity, including the recently leased Ultra Pipes, indicating headroom for future volume growth without immediate major CapEx.

Asked by Smith Gala

Impact of OEM Sales on Distributor Supply Chain Direct
No, no, it's a separate product. ... We have added in that particular line. So, we don't think there would be any problem with that particular...

Addresses a potential concern about channel conflict, with management clarifying that OEM sales are for separate products or channels, thus not disrupting existing distributor relationships.

Asked by Vedant Sarda

2 min read 7 chapters

Detailed narrative

Q1 FY26 Performance Overview

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.

Strategic Focus on Value-Added Products

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 Power Energy and Solar Project

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%.

Operational Efficiency and Working Capital Management

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.

New Product Development and Market Expansion

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.

Capacity and Future Growth Outlook

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.

Green Steel Initiative

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.

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