Hi-Tech Pipes

Hi-Tech Pipes delivered a strong Q2 FY26, with sales volume growing 1.78% year-on-year to 1.25 lakh tons. Revenue from operations surged by 21.66% to INR858.77 crores, driven by an improved product mix and better realizations. EBITDA for the quarter stood at INR44.33 crores, a 5% YoY increase, with EBITDA per ton improving 3.24% to INR3,540. Net profit (PAT) also saw an 11.86% rise to INR20.26 crores. For the first half of FY26, sales volume reached 2.5 lakh tons (up 1.66%), and revenue from operations grew 4.91% to INR1,650 crores, with PAT at INR41.17 crores, up from INR36.16 crores in H1 FY25.

The company is aggressively pursuing capacity expansion, with a 3 lakh ton addition at existing facilities nearing commercial production in Q3 FY26, following commenced trial runs. A significant greenfield manufacturing project at Hindupur, Andhra Pradesh, with a planned 1.5 lakh ton capacity, has seen its foundation stone laid and is targeted for completion by Q1 FY28. This expansion focuses on value-added coated products and is a key step towards achieving a long-term goal of 2 million tons total capacity by FY28 and mid-FY29.

Hi-Tech Pipes is strategically enhancing its product mix, with the value-added product (VAP) share at 37% last quarter, projected to reach 41-42% by FY26 end and 45-47% by FY27. This shift, along with the introduction of new SKUs like jumbo steel sections and a growing export vertical (currently 6,000-7,000 tons per quarter), is contributing to higher realizations and improved EBITDA per ton. The new Hindupur facility will specifically produce high-value coated steel tubes targeting international markets, products not yet manufactured in India.

The company maintains financial prudence, with all ongoing and upcoming projects, including the Hindupur greenfield, being funded entirely through internal accruals. The debt-to-equity ratio, while increasing slightly to 0.21 from 0.15 last year due to new plants coming online, remains healthy, supported by a current ratio of 2.09x. Capex guidance for FY26 is INR200 crores, and for FY27, it is projected at INR120-130 crores, consistent with previous years' investments.

Despite a challenging external environment marked by extended monsoon and declining steel prices, the company demonstrated resilience. Management noted that steel prices have stabilized, and the 12% safeguard duty on imports has positively impacted the industry by curbing cheap imports. They anticipate further positive developments from potential increases in safeguard duties. The outlook remains positive, with expectations of improved operating leverage, enhanced margins, and stronger return ratios, driven by new capacities, brand momentum, and strong underlying demand from infrastructure, construction, and renewable energy sectors.