Hi-Tech Pipes

Hi-Tech Pipes reported a revenue from operations of INR791 crores in Q1 FY26, a decline from INR866 crores in the prior year quarter, primarily due to steel price volatility. Despite this, sales volume increased by 1.64% to 1.24 lakh tons. The company achieved its highest-ever quarterly PAT of INR21 crores and an EBITDA of INR41.03 crores. EBITDA per ton saw a 10% quarter-on-quarter improvement, reaching INR3,308, driven by a better product mix and improved realizations.

The company's greenfield plant at Sikandrabad and brownfield expansion at Sanand Unit-II, Phase 2, are in the final stages of commissioning and are expected to begin commercial production in Q2 FY26. These projects will add approximately 250,000 tons to the annual capacity, pushing the total installed capacity beyond 1 million tons. The new facilities are strategically focused on manufacturing specialized ERW pipes for high-growth sectors like infrastructure, defense, and renewable energy, aiming to strengthen the company's presence in North India.

Hi-Tech Pipes is actively enhancing its product portfolio by adding new SKUs and focusing on value-added products. Management aims to increase the share of value-added products from the current 37-38% to upwards of 45% with the expanded capacity. This shift, coupled with market stabilization, is expected to drive significant EBITDA margin growth, with a target of INR4,500 to INR5,000 EBITDA per ton considered achievable once steel price volatility subsides, and upwards of INR4,000 being a 'not big deal' target.

For FY26, the company targets a total volume of 5.5 lakh to 6 lakh tons, leveraging the new capacities. The new facilities are expected to achieve 50% utilization in their first year of operation. Specifically, management is confident that the new plants will contribute approximately 30,000 tons on a quarterly basis, starting from Q3 FY26, with a ramp-up expected quarter-on-quarter thereafter, indicating a healthy outlook for volume growth.

The company noted that steel prices remain volatile globally, impacting revenue and EBITDA per ton. However, management believes current prices are near the bottom range and expects no further deterioration. The imposition of a uniform 50% US tariff on steel for all nations, including India, creates a level playing field and presents a potential opportunity for Hi-Tech Pipes to export to the US market once the tariff environment stabilizes. The company also continues its targeted door-to-door campaigns to strengthen market presence in South and North India.