Hariom Pipe

Hariom Pipe reported a sales volume of 1.38 lakh metric tonne for H1 FY26, marking a 21% year-on-year growth. Revenue from operations also increased by 21% YoY to INR797 crore. The company achieved an EBITDA of INR100 crores and PAT of INR34 crore for the half year, with a stable EBITDA margin of 12.6%. Q2 FY26 experienced temporary softness with 7% growth in volumes and value compared to Q2 FY25, primarily due to a planned maintenance shutdown and extended monsoons.

The company's strategic emphasis on engineering grade pipes, CR, GP, coils, and scaffolding has led to value-added products accounting for nearly 97% of total sales. This focus has helped sustain a 12.6% EBITDA margin even in a softer pricing environment. Hariom Pipe aims to differentiate itself through customer satisfaction, quality, and service, catering to OEMs like Kirby, Pannar, and Midhani, which require stringent quality checks and long-term relationships. The blended EBITDA per ton for Q2 FY26 was INR7,103, with MS steel at INR8,200/ton, GP510 coil at INR7,000/ton, and scaffolding at INR11,000/ton.

Hariom Pipe maintains a strong financial position with a debt-to-equity ratio of 0.65x, ROCE of 21%, and ROE of 11%. The operating cash flow for H1 FY26 stood at INR40 crore, reflecting healthy EBITDA to cash conversion. The company emphasizes disciplined working capital and liquidity management. An increase of approximately INR1 crore in interest expenses was noted due to the EIR concept related to the Ultra Pipes acquisition and IndAS accounting norms, which is considered a one-time^📎 impact.

A significant strategic milestone was achieved with the signing of an MOU with the Government of Maharashtra to establish a 1.5 million ton per annum integrated steel plant at Gadchiroli. This INR3,135 crore project will be developed in a phased manner over 8 years, with initial paperwork and establishment taking 1.5 to 2 years. The project benefits from substantial fiscal incentives, including GST reimbursements and power tariff support, which will significantly reduce overall project cost and is planned to be funded without major equity dilution or large debt increases, leveraging subsidies and revenue from early stages.

Hariom Pipe is developing a solar renewable power plant across 13 locations under the PM Kusum Subsidy scheme, aiming to supply 60 MWh of solar power to MSEDCL starting September 2028. The overall project cost is estimated at INR200-220 crore, with capital subsidy from the central government. Out of 210 acres of land required, 56 acres have been acquired, and the remaining land acquisition is expected to be completed by January or February.

Despite the Q2 softness, management is optimistic about stronger volume growth in H2 FY26, driven by robust demand from infrastructure projects, railways, and metros. The company expects to achieve its 30% volume growth target for FY26, requiring 38-40% growth in Q3 and Q4. The extended monsoon season is anticipated to lead to increased demand for pipe structures for repair and replacement. The company also expects to benefit from Safeguard Duty.