Summary
Hariom Pipe Industries Limited - Q3 FY26 Earnings Call Summary Monday, February 09, 2026 14:00 PM IST
Event Participants
Executives 4 Amitabha Bhattacharya (CFO), Ansh Golas (Whole-time Director), Rekha Singh (Company Secretary), Rupesh Kumar Gupta (Managing Director)
Analysts 5 Aryan Bhatiya, Kashish Gandotra, Praneeth Reddy, Sagar Shah, Smith Gala
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume (9M FY26) | 2.07 lakh tons | +21% YoY; growth driven by steady execution and operational consistency. |
| Revenue (9M FY26) | ₹1,159.7 crores | +21% YoY; supported by strong value-added product mix contribution of 96-97%. |
| Revenue (Q3 FY26) | ₹362.9 crores | +21% YoY from ₹299.9 crores in Q3 FY25. |
| EBITDA (9M FY26) | ₹145.5 crores | 12.55% margin; performance maintained despite steel price fluctuations. |
| EBITDA (Q3 FY26) | ₹45.2 crores | 12.47% margin; EBITDA per ton stood at ₹6,613 for the quarter. |
| EBITDA per ton (9M) | ₹7,039 per ton | Maintained healthy levels; management targets a steady state of ₹7,000-₹8,000. |
| PAT (9M FY26) | ₹45.6 crores | Stable earnings compared to previous periods; margin impacted by finance costs and depreciation. |
| PAT (Q3 FY26) | ₹11.6 crores | Reflects stable profitability amid volatile raw material pricing. |
| Value-Added Mix | 96% - 97% | Consistent focus on GI pipes, GP pipes, and coils to protect margins. |
Geographic & Segment Commentary
- South India: Primary revenue driver with major contributions from Karnataka (1st), Kerala (2nd), and Andhra Pradesh (3rd). The company notes exceptionally strong demand and growth visibility in Hyderabad, Telangana, and Karnataka.
- Galvanized Pipes & Coils: This segment remains the primary contributor to the top line; the Telangana integrated steel plant (ISP) has reached near-optimal utilization.
- B2B & OEM: B2B sales increased from 15% to 21% of total sales over the 9-month period, reflecting a strategic shift toward corporate clients and OEM manufacturers.
Company-Specific & Strategic Commentary
- Renewable Energy Transition: Progressing with a 60 MW solar project under Hariom Power and Energy; 35 MW is expected to commence by April 2026, with the remainder by August 2026.
- New Subsidiary (Metal Mart Pvt Ltd): Established a 70% owned subsidiary for trading metal products not manufactured by Hariom to serve OEMs and test markets in Western and Northern India without diluting manufacturing margins.
- Forward Integration & Expansion: Planning a new steel plant in Gadchiroli, Maharashtra (MOU signed); land allocation is expected by the end of FY26 with a 1.5 to 2-year timeline for environmental clearances.
- Market Diversification: Increasing focus on government tenders and the dealer network to expand market size beyond the core Southern stronghold.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Volume Growth | ~30% for FY26 | Currently at 21% for 9M; management expects Q4 to bridge the gap as it is seasonally the strongest quarter. |
| Q4 Sales Volume | 90,000 - 95,000 tons | Target based on current demand visibility and increased dealer network. |
| EBITDA per ton | ₹7,000 - ₹8,000 | Long-term steady-state target supported by value-added product mix. |
| Average Realization | ₹54,500 - ₹55,000 | Expected realization for Q4 FY26 as market accepts price hikes. |
| PAT Margin | ~5% | Expected to remain steady for 2 years before substantial growth as debt reduces and assets mature. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Fluctuations in iron ore, coal, and HR coil prices impact short-term realizations and per-ton EBITDA. |
| Anti-Dumping Duty | While generally beneficial, any changes in government policy regarding HR coil imports could affect the cost structure for non-integrated units. |
| Execution Delay | The Gadchiroli project is dependent on government land allocation and EC approvals, which may delay long-term capacity expansion. |
| Trading Margin Dilution | The new trading subsidiary will operate on lower margins than the manufacturing business, potentially impacting consolidated percentage margins. |
Q&A Highlights
EBITDA per Ton and Margins
- Question: What caused the drop in EBITDA per ton and what is the steady-state expectation? (Aryan Bhatiya)
- Answer: Fluctuations in raw material and finished goods prices caused slight pressure; however, the company maintains its guidance of ₹7,000-₹8,000 per ton. (Rupesh Kumar Gupta)
Metal Mart Subsidiary Rationale
- Question: Why form a 70% subsidiary for trading instead of doing it within the main company? (Sagar Shah)
- Answer: This ensures transparency and prevents the dilution of manufacturing EBITDA margins (12.5%+) in the standalone books; it also acts as a “test and trial” for new products and geographies in the North and West before committing CapEx. (Amitabha Bhattacharya)
Volume and Growth Visibility
- Question: How will the company achieve 30% growth next year if dealer growth is stagnant? (Smith Gala)
- Answer: Growth will come from increased B2B/OEM penetration (currently 21% of sales), government tenders, and new product developments like GI and GP pipelines. (Rupesh Kumar Gupta & Amitabha Bhattacharya)
Capital Expenditure & Projects
- Question: What is the status of the Gadchiroli project? (Aryan Bhatiya)
- Answer: Documentation is ongoing; waiting for land allocation from the Maharashtra government, which is expected by year-end; actual movement is 1.5 to 2 years away due to EC processes. (Rupesh Kumar Gupta)
Key Takeaway
Hariom Pipe Industries delivered a steady Q3 FY26 with revenue growth of 21% YoY, reaching ₹362.9 crores, and maintained healthy EBITDA margins of 12.47%. The 9-month performance was characterized by 21% volume growth (2.07 lakh tons) and a high value-added product mix of 96-97%. Strategically, the company is pivoting toward higher B2B and OEM sales (now 21% of mix) and is diversifying geographically via a new trading subsidiary, Metal Mart, targeting the Northern and Western markets. Management remains optimistic about achieving nearly 30% volume growth for the full year, banking on a seasonally strong Q4 with volumes targeted at 90,000+ tons. While PAT growth has lagged revenue due to higher finance and depreciation costs from recent acquisitions, the upcoming 60 MW solar project (starting April 2026) and debt reduction are expected to improve long-term profitability. Looking ahead, the company is focused on operationalizing renewable energy and securing land for its next leg of expansion in Maharashtra.
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