Summary
Hi-Tech Pipes Limited - Q3 FY26 Earnings Call Summary Saturday, February 07, 2026 04:00 P.M.
Event Participants
Executives 3 Anish Bansal (Whole Time Director), Arvind Bansal (Executive Director & Group CFO), Arun Sharma (Company Secretary & Compliance Officer)
Analysts 6 Akshay Shetty (Mirae Asset), Aniket Madhwani (Steptrade Capital), Dhruvesh Kanakia (Antique Stock Broking), Karan (Asit C Mehta), Kunal Shah (Individual Investor), Mayank Kumar (Individual Investor), Meenakshi Bhutani (Individual Investor), Sucrit D. Patil (Eyesight Fintrade)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Sales Volume | 1,36,000 tons | +10% YoY; Highest ever quarterly volume driven by infra projects and market penetration. |
| Revenue from Operations | ₹1,070 crores | +40% YoY; Significant growth supported by higher volumes and an improved product mix. |
| EBITDA | ₹42 crores | +4% YoY; Impacted by a ₹2,500/ton decline in steel prices and narrow spreads. |
| Profit After Tax (PAT) | ₹17 crores | -9% YoY; Decline attributed to sharp HRC price correction and cheaper imports before safeguard duties. |
| EBITDA per Ton | ~₹3,100 | Management noted current range of ₹3,400-₹3,500/ton with a target of ₹4,000+ in Q4. |
| Value-Added Mix | 37% | Contribution from high-margin products; targeted to reach 42-43% by year-end. |
| Total Capacity | 1.0 million tons | Reached milestone following Sanand and Jammu commissioning; heading toward 2.0 million tons. |
Geographic & Segment Commentary
- Northern Region (Jammu): Commercial production commenced at the 80,000-ton greenfield Jammu facility. This unit focuses on value-added, higher-margin products (like color-coated pipes) while reducing logistics costs and shortening delivery timelines to northern consumption centers.
- Western Region (Sanand, Gujarat): Sanand Unit II Phase 2 (1 lakh tons) is operational, enhancing export capabilities and solar sector supplies. The company is actively supplying large-scale solar parks in Khavda (Gujarat) and Bikaner (Rajasthan).
- Exports: Contributed 6,000-7,000 tons in Q3; the company has expanded its footprint to 28 countries. Management aims to scale export volume to 10% of total sales, leveraging the new U.S.-India and EU-India trade developments.
Company-Specific & Strategic Commentary
- Raw Material Security: Executed long-term MOUs with SAIL, ArcelorMittal, Tata, and NMDC to ensure supply consistency. These contracts were signed in Q3 to secure material for upcoming capacity ramps, despite causing a temporary spike in “stock in trade.”
- Capacity Expansion Phase II: Gearing up to reach 2 million tons by FY28-FY29. This includes a 2.5 lakh ton capacity expansion at Hindupur (Telangana) expected by end of FY27 and imminent operations at the Sikandrabad (UP) facility.
- Product Innovation: Increasing focus on “Solar Top” tubes and specialized galvanized products. Management targets a 50% value-added mix by the end of FY27 to protect margins from commodity price volatility.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Volume Growth | 25% YoY growth | Sustained target for the next 6-7 years driven by infra and renewable demand. |
| FY26 Sales Volume | 5.5 lakh tons | Management expects to be within +/- 5-10% of this range. |
| FY27 Sales Volume | 6.5 lakh tons | Based on a conservative 65% utilization of the 1.05 million ton capacity. |
| Capex | ₹500 - ₹600 crores | Budget for the next 1 million ton increment; land is already secured. |
| EBITDA Margin | ₹4,000 - ₹4,500/ton | Medium-term target as product mix shifts toward value-added segments. |
Risks & Constraints
| Risk | Context |
|---|---|
| Steel Price Volatility | Q3 saw a decline of ₹2,500 per ton in HRC prices, which directly compressed margins and PAT. While safeguard duties have stabilized prices, global fluctuations remain a core risk. |
| Dumping / Imports | Profitability was pressured by an influx of cheap imports during the quarter. Management relies on the 12% safeguard duty (effective Dec 30, 2025) to maintain domestic pricing discipline. |
| Project Delays | Significant growth depends on government infrastructure spending (Jal Jeevan Mission, Airports). Any budgetary reallocations or execution slowdowns could impact the current order book of ₹200-₹250 crores. |
Q&A Highlights
Steel Price Recovery
- Question: What is the outlook for steel prices after the Q3 decline? (Kunal Shah)
- Answer: Prices declined ₹2,500/ton in Q3 but bounced back following the 12% safeguard duty on Dec 30. Management expects this reversal to improve Q4 spreads (Anish Bansal).
Capacity & Capex
- Question: What is the timeline and funding for the move to 2 million tons? (Lokesh Kashikar)
- Answer: Reach 2M tons by FY28-FY29 with ₹500-600 crores capex. Land bank is already in place; Hindupur (2.5 lakh tons) to be ready by FY27 (Anish Bansal).
Export Strategy & CBAM
- Question: How will the export volume and margins evolve? (Aniket Madhwani)
- Answer: Q3 exports were ~6,000-7,000 tons. Clarity on EU’s CBAM (Carbon Border Adjustment Mechanism) has led to renewed activity from European buyers; target is 10% volume share (Anish Bansal).
Raw Material MOUs
- Question: Why did “stock in trade” rise significantly this quarter? (Dhruvesh Kanakia)
- Answer: It resulted from entering long-term supply contracts in Q3 before new production lines fully ramped up. This was a strategic move to secure raw materials from major mills (Anish Bansal).
Key Takeaway
Hi-Tech Pipes delivered record quarterly revenue of ₹1,070 crores (+40% YoY) and volumes of 1.36 lakh tons, though PAT fell 9% due to sharp HRC price corrections and import dumping. The company reached a critical 1.0 million ton capacity milestone with the commissioning of Sanand and Jammu units, shifting its focus toward a 50% value-added product mix by FY27. Strategic long-term raw material MOUs with majors like SAIL and Tata Steel have been secured to de-risk the supply chain for its next expansion phase to 2.0 million tons. With the 12% safeguard duty providing a price floor and strong demand from the solar and airport infrastructure sectors, management expects a significant margin recovery to ₹4,000/ton EBITDA levels starting Q4 FY26. The company remains positioned to capitalize on a 25% annual volume growth trajectory through FY29.
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