Hi-Tech Pipes

Hi-Tech Pipes delivered its highest ever quarterly performance in Q3 FY26. Revenue from operations grew robustly by 40% year-on-year to INR1,070 crores, up from INR761 crores in Q3 FY25. This growth was supported by a record sales volume of 1,36,000 tons, a 10% increase over the previous year. EBITDA for the quarter stood at INR42 crores, marking a 4% year-on-year increase. However, profit after tax declined by 9% year-on-year to INR17 crores, primarily due to a sharp correction in hot-rolled coil prices.

The company has significantly expanded its manufacturing capabilities, reaching 1 million tons of installed capacity. Commercial production commenced at Sanand Unit II Phase 2, adding 1 lakh tons of annual capacity, and at the greenfield Jammu facility, which adds 80,000 tons, focusing on value-added products. The Greenfield facility at Sikandrabad, UP, is also expected to commence operations soon. These expansions are part of a long-term roadmap to achieve 2 million tons installed capacity, with 0.5 million tons targeted for commissioning by FY27-FY28.

Q3 profitability was impacted by a sharp correction in hot-rolled coil prices and an influx of cheaper imports. To counter this, the company entered into long-term raw material supply MOUs with major suppliers like Steel Authority of India Limited, ArcelorMittal, Tata, and NMDC. This strategy ensures raw material availability, supports higher capacity utilization, and is expected to help restore pricing discipline and improve margins, with a target EBITDA per ton of INR4,000 from Q4 onwards.

The demand outlook for steel pipes and tubes remains strong, driven by government-led infrastructure spending, increased private sector investments, rapid urbanization, and renewable energy focus. Recent developments in global trade, including the U.S.-India and EU-India trade deals, are expected to open new opportunities, enhance market access, and improve export competitiveness for Indian manufacturers, particularly in value-added segments.

Hi-Tech Pipes is strategically focusing on increasing its value-added product contribution, currently at 37%, with a target to reach 42-43% by the end of FY26 and 50% in coming years. The company has successfully initiated exports to almost 28 countries in the last year, leveraging new certifications and improved logistics. The ultimate goal is to achieve 10% of total volume from exports, with significant growth expected in Q4 FY26 due to increased clarity on the Carbon Border Adjustment Mechanism (CBAM).

While the Jal Jeevan Mission's order flow was subdued in the current year, management anticipates a strong order pipeline in FY27, especially for the ERW tube segment for galvanized products, given the consistent budget allocation. The company's current aggregate order book stands between INR200 crores to INR250 crores, comprising large EPC, solar, export, and institutional orders, with INR20 crores specifically from exports.