Hariom Pipe — Q3 FY26 earnings call

Call held 9 Feb 2026

Management summary

Hariom Pipe reported a strong Q3 and 9M FY26, with revenue and sales volume growing 21% year-on-year, maintaining consistent EBITDA margins. The company is progressing with its 60 MW solar project, with 35 MW expected to be operational by April 2026. A new trading subsidiary, Metal Mart Private Limited, was incorporated to diversify products and explore new markets, although it may initially impact consolidated margins. Management remains confident in achieving annual volume guidance and expects stable profitability.

Highlights

  • 9M FY26 sales volume grew 21% YoY to approximately 2.07 lakh tons.

  • 9M FY26 revenue from operations increased 21% YoY to INR 1,159.7 crores.

  • 9M FY26 EBITDA stood at INR 145.5 crores with a healthy margin of 12.55%.

  • Q3 FY26 revenue from operations increased 21% YoY to INR 362.9 crores.

  • Integrated steel plant in Telangana has reached near-optimal utilization.

  • 35 MW of the 60 MW solar project is expected to commence operations by April 2026.

Concerns

  • Analyst noted PAT growth of only 5-6% in Q3 despite higher revenue/EBITDA growth.

  • Analyst questioned potential oversupply in ERW/black pipes due to rapid capacity expansion in the industry.

  • Analyst raised concern about the new trading subsidiary potentially diluting consolidated margins due to lower trading margins.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹362.9 Cr
    YoY +21%
  • EBITDA
    ₹45.2 Cr
  • EBITDA Margin
    12.5%
  • EBITDA per ton
    ₹6,613
  • PAT
    ₹11.6 Cr

9M

  • FY26 Sales Volume
    2,07,000 tons
    YoY +21%
  • FY26 Revenue
    ₹1,159.7 Cr
    YoY +21%
  • FY26 EBITDA
    ₹145.5 Cr
  • FY26 EBITDA Margin
    12.6%
  • FY26 EBITDA per ton
    ₹7,039
  • FY26 PAT
    ₹45.6 Cr

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

low confidence
Demand visibility remains healthy and our focus on value-added products, disciplined execution and operational stability continues to support overall performance.

Source: Inferred

Capital allocation

high confidence
  • Debt Debt disclosed Cost 7.9%
    our average finance cost is almost approximately 7.79% to the extent of working capital. The rate of interest is around 7.9% which is pretty good in the present financial market.
  • M&A Metal Mart Private Limited Acquisition · Announced

    To sell products Hariom does not currently manufacture, supply to OEMs, test market potential in Western and Northern India, and provide transparency for trading sales.

    Trading margin is very less, and margin will be dilutive at the consolidated level initially.

    you formed a subsidiary in this quarter, Metal Mart Private Limited. So its incorporation and you said that you want to do trading in it. Basically, and Hariom Pipes will hold around 70% of the company.

Guidance & targets

Profitability

  • EBITDA per ton Profitability · Steady state · High confidence INR 7,000-8,000
    But we think that the guidelines that we have from before, we are going with those guidelines that our EBITDA will remain between INR7,000 to INR8,000. Okay.

    — Rupesh Kumar Gupta

  • PAT Rate Profitability · Next 2 years · High confidence around 5%

    From 4.69% to 5% last year today

    So for the next 2 years, it will be around 5%. After that, there will be a substantial growth.

    — Amitabha Bhattacharya

Pricing

  • Average Pricing Pricing · Q4 FY26 · High confidence INR 54,500-55,000
    So quarter 4 will always be a beneficial one and the average pricing which should minimum move around 55,000, what is our expectation between 54,500 to 55,000, which is our expectation and we feel that the demand in the prices is already being accepted by the market and the markets are increasing in the market. So, we expect a good hike in the price also.

    — Rupesh Kumar Gupta

Volume

  • Q4 Sales Volume Volume · Q4 FY26 · High confidence 90,000-95,000 tons
    Yeah, 90,000 plus we are -- it's something we can easily build on or as you know this 21% is already being touched upon and moving ahead it will automatically grow on. So I think 95,000 easily we will be able to do it, 90,000 to 95,000.

    — Rupesh Kumar Gupta

  • Volume Growth Volume · Next year (FY27) · Medium confidence around 30%
    So for next year, we can say that we will return to around 30% growth parameters.

    — Rupesh Kumar Gupta

Capacity

  • Solar Project Commissioning Capacity · April 2026 · High confidence 35 MW
    We expect 35 megawatt capacity to commence operations by April '26 and balance capacity by end of August '26.

    — Rupesh Kumar Gupta

  • Solar Project Commissioning Capacity · End of August 2026 · High confidence Balance capacity (25 MW)

    — Rupesh Kumar Gupta

Operational

  • Trading Subsidiary Operationalization Operational · March end or April first week 2026 · High confidence Operational
    I think we will start it in March end or April first week only.

    — Rupesh Kumar Gupta

What to watch in Q4 FY26

Solar Project Commissioning - Phase 1

April 2026
Current Under development
Target 35 MW operational

Why it matters

Key step in renewable energy diversification and cost optimization, impacting future operational costs.

We expect 35 megawatt capacity to commence operations by April '26 and balance capacity by end of August '26.

Risks & concerns

  • Raw material price volatility and dynamic market environment

    medium

    Company operates in a dynamic market with steel price fluctuations, but maintains consistent margins through focus on value-added products and operational consistency.

    Management acknowledged

  • Potential oversupply in ERW/black pipes market

    low

    Analyst raised concern about rapid capacity expansion by industry players, but management asserts strong demand, especially in Southern India, and their well-placed market position.

    Analyst downplayed

  • Dilution of consolidated margins from new trading subsidiary

    low

    Management confirms trading margins are lower than manufacturing, which could initially dilute consolidated margins, but emphasizes strategic benefits of market testing and transparency.

    Analyst acknowledged

Q&A highlights

7 direct
Drop in EBITDA per ton and impact of anti-dumping duty Direct
So, Aryan, the EBITDA per ton that you are seeing, that is recently now which is being calculated, you rightly said that there is so much fluctuation in the market related to your raw material pricing, including coal, iron ore and all, everything is stable. But there is a slight difference in finished prices due to raw material prices, which is not a major one. But we think that the guidelines that we have from before, we are going with those guidelines that our EBITDA will remain between INR7,000 to INR8,000. Okay.

Clarifies the company's expected stable EBITDA per ton range despite market fluctuations and confirms the beneficial impact of anti-dumping duty.

Asked by Aryan Bhatiya

Outlook for Gadchiroli steel plant Partial
So the MOU was signed by Maharashtra government for Gadchiroli project, which is under process. So the documentation part is going on. We are not aggressively having anything in hand now. Government has to allot us land, which is built by MSDCL. And after that only, we will be getting some clarity after land allocation. So we are waiting for things to happen. We think by the end of this year, we will be getting the land in hand and moving ahead. I think one and a half year, two years, there won't be any movement there. We have to get that EC and other processes will be there. After that only, things will be moving ahead.

Provides a realistic timeline for the Gadchiroli project, indicating significant delays before any physical movement.

Asked by Aryan Bhatiya

30% volume growth guidance and expansion plans Direct
Yeah. So this quarter, we have been at 21% of our plans. And as this fourth quarter will always be a beneficial one. And moving ahead, we are expecting new growth in our value-added chain also. And some similar guidelines, we are working. And I think we will be very near to the guidelines.

Reaffirms confidence in achieving annual volume growth targets, with specific Q4 expectations, and hints at new growth in value-added chains.

Asked by Aryan Bhatiya

Potential oversupply in ERW/black pipes market Direct
So we don't feel that there is a lack of growth, planning or demand. It is all about between, in some months when monsoon comes or if something else comes, then things shift forwards or backwards. Otherwise, demand-wise, we are excellently good. Well-placed in the market.

Management dismisses concerns about oversupply, citing strong demand, especially in Southern India, and their market position.

Asked by Aryan Bhatiya

PAT growth lagging revenue/EBITDA growth Direct
Sir, basically there are two parameters to look at. One parameter is that your EBITDA is consistently above 12.5. After EBITDA, you are getting depreciation and finance cost. So in today's date, our average finance cost is almost approximately 7.79% to the extent of working capital. The rate of interest is around 7.9% which is pretty good in the present financial market. There are some term loans whose rate is a little high. And moreover, in Q3 2026, if my total finance cost is 13.52, then, approximately 13% pertains to the EIR adjustment on lease liabilities, according to IndAS, roughly which is not the actual cash outflow. So if you look at it from that angle, the target of 30% plus, 30% volume growth. So roughly our old PAT rate was around 4.69% to 5% last year. So for the next 2 years, it will be around 5%. After that, there will be a substantial growth.

Explains the reasons for lower PAT growth (depreciation, finance costs, lease liabilities) and provides a forward-looking PAT rate target for the next two years.

Asked by Kashish Gandotra

Profitability of renewable energy plant in initial quarters Direct
It will be near breakeven. Because in the first 2-3 quarters, there will be a depreciation impact. But there won't be any cash outflow. According to the books, it will look like this. So it will be breakeven. Because depreciation cost is nothing but internal cash accrual. So looking at it from that angle, it will be breakeven.

Clarifies that the solar project is expected to be near breakeven initially due to non-cash depreciation, allaying concerns about immediate losses.

Asked by Kashish Gandotra

Rationale for Metal Mart Private Limited (trading subsidiary) and its impact on consolidated margins Direct
There are two reasons for this, sir. One is that Metal Mart Private Limited will sell the same product which Hariom does not make at present, and to supply OEMs etc. ... So that is why we are creating a platform where the trading margin is very less. ... Secondly, looking at the new demand of customer demand and product, it will help Hariom in the future expansion for Hariom to do in which line of activity and in which direction. ... And with this, you will get a transparent account where you can understand how much is Hariom earning as a manufacturer, how much is it earning as a trader, what is the demand in that, and what is the future growth of Hariom.

Provides a comprehensive strategic rationale for the new subsidiary, emphasizing market testing, product diversification, and transparency, while acknowledging lower trading margins.

Asked by Sagar Shah

GP (Galvanized Pipes) utilization and contribution to future growth Direct
See, in galvanized in 9 months, we have made a total contribution of 77,230 metric tons, plus 51,000. That means you have 1,22,046 metric tons in 9 months. ... Yes, around 50%. ... Yes, definitely. Definitely, your realization is more. In terms of margin, it is a little less because we purchase HR coils and not make them ourselves. ... Absolutely, sir. Correct.

Details current galvanized product utilization (around 50% for 9M FY26) and confirms its expected higher contribution to future volume growth and realization, despite slightly lower margins due to HR coil purchases.

Asked by Sagar Shah

3 min read 7 chapters

Detailed narrative

Q3 & 9M FY26 Financial Performance

Hariom Pipe Industries Limited reported robust financial performance for Q3 and 9M FY26. For the nine months ended December 31, 2025, sales volume reached approximately 2.07 lakh tons, marking a 21% year-on-year growth. Revenue from operations also grew 21% YoY to INR 1,159.7 crores, with EBITDA at INR 145.5 crores and an EBITDA margin of 12.55%. For Q3 FY26, revenue stood at INR 362.9 crores, a 21% increase from INR 299.9 crores in Q3 last year, with EBITDA at INR 45.2 crores and a margin of 12.47%. Profit after tax for Q3 was INR 11.6 crores.

Operational Consistency and Product Mix

The company demonstrated steady execution and operational consistency despite market fluctuations. A continued focus on value-added products, disciplined working capital management, and stable plant operations contributed to consistent margins and profitability. Value-added products continue to be a significant contributor, accounting for 96% to 97% of total revenue. The integrated steel plant in Telangana has achieved near-optimal utilization, and overall plant performance across units remains stable and efficient.

Renewable Energy Project Update

Hariom Power and Energy, the company's renewable energy subsidiary, is making smooth progress on its 60 megawatt solar project. Land development work is on schedule, and a significant portion of the required land has been secured, including government land, which helps optimize project costs. The company expects 35 megawatt capacity to commence operations by April 2026, with the balance capacity becoming operational by the end of August 2026.

Strategic Expansion through Metal Mart Private Limited

Hariom Pipe incorporated a new subsidiary, Metal Mart Private Limited, in which it holds 70%. This subsidiary is intended for trading metal and steel-allied products that Hariom does not currently manufacture, and to supply OEMs. The strategic rationale includes testing new markets, particularly in Western and Northern India where Hariom's presence is negligible, and gaining insights for future expansion. While trading margins are lower and may initially dilute consolidated margins, the subsidiary aims to provide transparency and market intelligence.

Volume Growth and Market Outlook

Management expressed confidence in achieving its volume growth targets, expecting to be 'very near' the 30% guidance for the current fiscal year. Q4 FY26 sales volume is projected to be between 90,000 to 95,000 tons. For the next fiscal year (FY27), the company anticipates returning to around 30% growth parameters. Demand visibility remains healthy, particularly in Southern India (Karnataka, Kerala, Andhra Pradesh), and the company is well-placed in the market, dismissing concerns about oversupply in the pipe segment.

Profitability and Cost Management

EBITDA per ton remained healthy at INR 6,613 in Q3 and INR 7,039 for 9M FY26, with management guiding for a steady-state range of INR 7,000-8,000. While PAT growth lagged revenue/EBITDA growth in Q3, primarily due to depreciation and finance costs (including EIR adjustment on lease liabilities), the company expects its PAT rate to stabilize around 5% for the next two years, followed by substantial growth. The average finance cost for working capital is approximately 7.9%.

Future Expansion and Integration Plans

The planned steel plant in Gadchiroli, Maharashtra, is progressing slowly, with land allocation from the government still pending. Management expects to secure the land by the end of FY26, but significant movement on the project, including environmental clearances, is anticipated to take 1.5 to 2 years thereafter. The company continues to focus on maximizing production at its existing integrated steel plant and exploring opportunities for value-added products and further acquisitions.

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