Hariom Pipe — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Hariom Pipe Industries reported a strong H1 FY26 with 21% YoY growth in both sales volume and revenue, reaching 1.38 lakh metric tonne and INR797 crore respectively. Despite temporary Q2 softness from planned maintenance and monsoons, the company maintained a healthy 12.6% EBITDA margin and strong financial metrics. A significant strategic MOU was signed for a 1.5 MTPA integrated steel plant in Maharashtra, alongside ongoing development of a solar power project, positioning the company for long-term growth.

Highlights

  • H1 FY26 sales volume grew 21% YoY to 1.38 lakh metric tonne, indicating strong underlying demand.

  • H1 FY26 revenue from operations increased 21% YoY to INR797 crore, reflecting robust market traction.

  • EBITDA margin remained strong at 12.6% for H1 FY26, showcasing the resilience of the integrated business model.

  • The company signed an MOU for a 1.5 million ton per annum integrated steel plant in Maharashtra, a significant strategic milestone.

  • Financial health is strong with a debt-to-equity ratio of 0.65x, ROCE of 21%, ROE of 11%, and operating cash flow of INR40 crore.

Concerns

  • Q2 FY26 performance showed temporary softness due to a planned maintenance shutdown at the ISP plant and extended heavy monsoons, impacting dispatches.

  • There may be a marginal deviation from the originally envisioned volume path due to the pace of ramp-ups, though the company remains optimistic.

  • Q2 FY26 blended EBITDA per ton decreased to INR7,103 from INR7,564 in Q2 FY25, primarily due to fixed costs during the plant shutdown.

Key financials

2 periods

Q2 FY26

  • Blended EBITDA/ton
    ₹7,103/ton
    YoY -6.1%

H1

  • FY26 Sales Volume
    1,38,000 metric tonne
    YoY +21%
  • FY26 Revenue
    ₹797 Cr
    YoY +21%
  • FY26 EBITDA
    ₹100 Cr
    YoY 0%
  • FY26 PAT
    ₹34 Cr
    YoY 0%
  • FY26 EBITDA Margin
    12.6%

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.

Order book

medium confidence
Management indicated a strong underlying demand pipeline and order flow from core user industries, infrastructure, fabrication, and construction, with all units now running on demand momentum.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed Maharashtra steel plant: phased development, initial stages funded by internal accruals and revenue generation from early phases, with subsidies. Solar project: capital subsidy from central government.
    • Integrated steel plant at Gadchiroli, Maharashtra (1.5 MTPA capacity) ₹3,135 Cr
    • Solar power plant (60 MWh) across 13 locations under PM Kusum scheme ₹200 Cr
    • Regular maintenance CapEx (10-15% of gross block)
    Now on the strategic front, this quarter marks an important milestone for Hariom. We have signed the MOU with Government of Maharashtra to set up a 1.5 million ton per annum integrated steel plant at Gadchiroli under the state's mega project policy. The project comes with substantial fiscal incentives such as GST reimbursements and power tariff support, which will significantly reduce the overall project cost. At this stage, our focus for the next 18 months is not on starting major CapEx. Our first priority is to fully set out our existing assets and in parallel finalize the land and complete all land-related documents and clearances for the new project. The plant will be developed in a phased manner, which allows us to plan carefully and execute without putting pressure on our current operations. We also do not expect any major equity dilution or large increase in debt at this stage as the project will benefit meaningfully from the incentives offered under the mega project policy. This approach keeps the project financially safe and well aligned with our long-term strategy. (Page 4) ... which is of INR3,135 crores, which has been already signed. (Page 20) ... overall project cost will be coming near to about 200 to 220 after completion of this project. And then we get the reimbursement of the subsidy during the construction period only. (Page 17) ... getting capital subsidy from the central government directly. (Page 19) ... There will be no major CapEx but as an integrated steel plant we always have some sudden maintenance CapEx. How much approximately? It is 10% to 15% generally. 10% to 15% of? The gross block. (Page 11)
  • Debt Debt disclosed
    • Rate reset Interest cost increased by INR1 crore due to EIR concept related to Ultra Pipes acquisition and IndAS accounting norms. ₹1 Cr
    On the balance sheet front, Hariom continues to remain financially strong with a debt-to-equity ratio of 0.65x, ROCE of 21% and ROE of 11%. Our operating cash flow of 40 crore, reflecting healthy EBITDA to cash conversion, demonstrates our disciplined approach to working capital and liquidity management. (Page 4)
  • Liquidity Liquidity disclosed Operating cash flow of INR40 crore demonstrates disciplined approach to working capital and liquidity management.
    Our operating cash flow of 40 crore, reflecting healthy EBITDA to cash conversion, demonstrates our disciplined approach to working capital and liquidity management. (Page 4)

Guidance & targets

Volume

  • Full Year Volume Growth Volume · FY26 · High confidence 30%
    Yes, 100% because in the coming time, the demands that we are seeing, and the policies of the government that are coming in place and the way we are expanding into OEMs, dealer networking establishing of more dealers, establishing their own set of things, branding, the hard work that we are doing from behind, we are very positive achievements, see on number side, yes, but on the profitability side, on the EBITDA side, on the marginal growth of that particular thing, we are very positive on the growth trajectory. (Page 9)

    — Rupesh Kumar Gupta

  • Q3 & Q4 Volume Growth Volume · Q3 & Q4 FY26 · Medium confidence 38% to 40%
    So now to achieve that we will require minimum 38% to 40% growth across quarter 3 and quarter 4. So, as things stand, where we are looking at the same? (Page 7)

    — Smith Gala (analyst, referencing prior guidance)

  • Volume Growth CAGR Volume · next 2-3 years · Medium confidence 30%
    30% we are talking about CAGR I think that will be continued. (Page 18)

    — Rupesh Kumar Gupta

Profitability

  • EBITDA and PAT Margins Profitability · future · Medium confidence increase
    so we think our EBITDA margins will be better and the PAT margins will also increase. (Page 18)

    — Rupesh Kumar Gupta

Capacity Utilization

  • Existing Capacity Utilization Capacity Utilization · next year · Medium confidence optimum level
    And we will be reaching see INR2,500 crores I accept in this platform that was very early stage where we are fixing our target in terms of value instead of in terms of volume, because at that time the steel realization price was very high. And we thought it will be continuing in the coming 4 to 5 years. But the thing is automatically it was changed and you are the better witness So basically, we are not fixed on the top line in terms of value. Yes, in terms of volume it will be concluded by next year. (Page 19)

    — Amitabha Bhattacharya

Project Timeline

  • Maharashtra Steel Plant Completion Project Timeline · 8 years · Medium confidence 8 years
    This way we will complete the project in 8 years. (Page 21)

    — Rupesh Kumar Gupta

  • Solar Power Plant Revenue Generation Start Project Timeline · September 2028 onwards · High confidence September 2028
    supply power supply 60 MWh of solar power to MSEDCL, starting from September 2028 onwards. That is as per the contract. (Page 19)

    — Amitabha Bhattacharya

What to watch in Q3 FY26

Achievement of 30% FY26 Volume Growth

FY26
Current H1 FY26 volume growth at 21% YoY, Q2 FY26 volume growth at 7% YoY
Target 30% volume growth for FY26 (requiring 38-40% growth in Q3 & Q4)

Why it matters

This is a key guidance for the full year, and Q2 softness puts pressure on H2 performance to meet it.

Our sales volume for the half year stood at 1.38 lakh metric tonne, marking a 21% year-on-year growth... We expect a meaningful pickup in volumes. Our trajectory continues to remain broadly aligned with our medium-term growth aspirations. (Page 3) ... So now to achieve that we will require minimum 38% to 40% growth across quarter 3 and quarter 4. (Page 7)

Risks & concerns

  • Temporary softness in Q2 due to planned maintenance and extended monsoons

    medium

    Q2 performance was impacted by a planned maintenance shutdown at the ISP plant and lower dispatches during heavy monsoons, which were extended.

    Management acknowledged

  • Marginal deviation from originally envisioned volume path

    low

    The pace of ramp-ups suggests there may be a marginal deviation from the original volume path, though management remains optimistic for H2.

    Management acknowledged

  • Competition in niche markets

    low

    The company aims to move away from niche markets with high competition by focusing on quality products and OEM supplies.

    Management acknowledged

Q&A highlights

6 direct
HRC vs Patra pricing and competition strategy Direct
So basically, both the products are totally different. There is no combination of the two anywhere. The value-added products we make are made from HRC fully. And the backward integration is from patra. So we have a combination of basket for HR also as well as Patra which you are saying, which is known as scalp [ph]. So this scalp and Patra is again a different quantum, which is very lower in product and all. So scalp and HRC, the quantity of HRC will increase. In the same way, the infrastructure of India is also parallelly growing. So we don't see our EBITDA margins decreasing anywhere.

Clarifies the company's product differentiation and integrated model's role in maintaining margins despite raw material price dynamics.

Asked by Yatharth Saxena

Impact of Q2 maintenance and monsoon on full-year volume growth target Direct
So, on the growth side trajectory, what we have planned, we are on track basically. As extended monsoon has affected a lot throughout India, and moving ahead, the demands that are being raised, plus we will get the benefit of Safeguard Duty. Looking at all these things, we feel that we will be able to fulfil it in the next 2 quarters. So, I don't think Smith, there will be any gap. We are very much positive and 100% we feel that it will happen.

Addresses concerns about achieving the 30% FY26 volume growth target despite Q2 softness, with management expressing high confidence.

Asked by Smith Gala

Increase in depreciation and interest expenses Direct
There were two factors that were supposed to work in that. One, when the acquisition of Ultra Pipes happened, we had only 1 month in the last quarter. In this quarter it was of 3 months. If you look at the depreciation of most of the assets almost all of our CWIP has been completed and capitalized. So, the full term depreciation is coming. That is already aligned with our estimation. And the interest part is also aligned. In the recent past, approximately INR1 crore roughly you can take, in the EIR concept, on the 26 of September the entire takeover of Canada Bank was done by SBI. So as per the EIR concept, as per IndAS, the term loan and repayment interest of Canada Bank, we had to add it back in P&L As per the IndAS accounting norms. So it has increased a little.

Explains the reasons behind the sequential increase in these expenses, attributing it to Ultra Pipes acquisition and accounting adjustments, clarifying it's largely aligned with estimates.

Asked by Smith Gala

Rationale for increasing MS tubes capacity and FY26/FY27 CapEx Direct
Yes. Actually, the thing is if you talk about MS tubes the installed capacity, you can utilize the maximum optimum level of capacity you can utilize up to 70% because of the various size and thickness and multiple times we have to change the rolls. So basically, the question you are asking that you have enhanced the capacity of MS tubes, those MS tubes, actually we have taken the ROU assets of Ultra Pipes on a long-term lease. So that was our plan before IPO. So that was our sister concern, which we have taken the long-term assets on long term lease, which is adjacent to Hariom Pipe.

Clarifies that the 'increase' in MS tubes capacity is due to leasing ROU assets from Ultra Pipes, not new CapEx, and reiterates that major CapEx is not planned for FY26/FY27 beyond regular maintenance.

Asked by Sagar Shah

Reasons for y-o-y EBITDA decrease and 4x jump in purchasing stock Direct
So basically, the EBITDA per ton, if you see, not because you had INR7,564 blended EBITDA in Q2 FY25. In Q2 FY26 it was INR7,103, okay there is not much more difference. The difference is of INR400. That is not because of softness of demand or anything. It was due to that plant shutdown. So, after the plant shutdown your minimum maintenance cost and the fixed cost, like empty charges of electricity and other parameters, other salaries and other maintenance charges that is always incurred fixed rate So this is impacted around INR300 to INR400 per ton EBITDA That is the one major reason. ... Purchase in stock in trade means certain items, actually we have purchased and sell. For an example like in solar when solar panel is used for panel mounting, Hariom makes a pipe and gives it to EPC contractors. Along with that many supporting structures are needed, which are not made by Hariom. Those are accessories. So that item you can see purchase stock in trade, which is our new segment which we told in last concall we have started new segment on solar. And in recent past we have also sold HRC, etc., HRC coil, etc., which we took as it is and made HRPO coil and sold. So, we treated that in stock in trade.

Provides specific operational reasons for the EBITDA per ton decline (plant shutdown fixed costs) and explains the increase in stock in trade as related to new solar segment accessories and trading activities.

Asked by Ishan Modi

Details and funding of the Maharashtra steel plant MOU Direct
So, Ishan in this, the MOU which has been signed has already been done, CM sir, he is a guardian to Gadchiroli district. And in that only we are planning to place this unit which is of INR3,135 crores, which has been already signed. There is no payment and this plan is basically we will do it for 1 or 2 years with our existing setup. Then what next? What we need to do after 2 years. Today it will take 1.5 to 2 years to complete paperwork and establishment. Our target is after 2028 our flow will start in this particular unit. Till then there will be paperwork pollution clearances will come, acquisitions of land. There are many things to be done which is not easy. Today to do acquisition of land and build a new setup on it is lot of work. Plus, the subsidies we will get from there that is a major thing which we are planning to have as Maharashtra is a rich state which is giving the subsidies also, and owned by the guardian of CM, as a guardian of that particular district it will never fall down. And third important thing that is on the raw material side coal and iron ore is also available. This project will not be done in one go. Initially we will go to the finish stage. Then we will go backwards, then it will be integrated. Our interest is from the day we start the plan, say for example if we start with INR300 crores, INR400 crores. And from that INR300 crores, INR400 crores our revenue should start. Then we will need CapEx further to that. We will get that revenue, then more CapEx, then we will get revenue. This way we will complete the project in 8 years. It is not one stage that I have a market cap of INR2,000 crores and I will invest INR3,000 crores there. This is not practical as a businessman no one can do this. He doesn't have money. We have planned this in a very fantastic and leveraged way in which we have all the merits of how we will do it.

Provides extensive detail on the phased development, funding strategy (subsidies, internal accruals from early stages), and long-term timeline for the significant Maharashtra steel plant project, emphasizing a prudent approach to CapEx.

Asked by Ishan Modi

3 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Performance Overview

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.

Strategic Focus on Value-Added Products and Market Position

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.

Financial Strength and Balance Sheet Management

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.

Maharashtra Integrated Steel Plant MOU

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.

Solar Power Project Development

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.

Volume Growth Outlook and Demand Drivers

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.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls