Hi-Tech Pipes Navigates Market Headwinds with Robust Q2 & H1 FY26 Performance and Strategic Expansion

Hi-Tech Pipes Limited, a prominent player in India's steel pipes sector, has reported a resilient performance for the second quarter and first half of the financial year 2026, demonstrating strong operational capabilities amidst a challenging external environment. The company's strategic focus on capacity expansion, value-added products, and national infrastructure projects has underpinned its growth trajectory, positioning it for sustained success.

For Q2 FY26, Hi-Tech Pipes recorded a significant 21.66% year-on-year increase in revenue from operations, reaching INR 858.77 crores. This growth was primarily driven by an improved product mix, better realizations, and a higher contribution from value-added products. The company's EBITDA stood at INR 44.33 crores, up 5.08% YoY, with EBITDA per ton improving by 3.24% to INR 3,540, reflecting efficiency gains and cost optimization measures. Profit After Tax (PAT) also saw a healthy rise of 11.86% to INR 20.26 crores. The half-year performance for H1 FY26 mirrored this positive trend, with revenue growing by 4.91% to INR 1,650.13 crores and PAT increasing by 13.87% to INR 41.18 crores. Sales volumes also saw modest growth, with Q2 FY26 volumes up 1.78% to 1.25 lakh tons and H1 FY26 volumes up 1.66% to 2.49 lakh tons.

Financial Highlights (Consolidated - INR Crores)

Strategic Growth and Operational Excellence

The company's performance is a testament to its strategic clarity and disciplined execution, particularly in navigating a challenging external environment marked by extended monsoon and declining steel prices. Management highlighted that the new facilities coming on stream are primarily focused on value-added products like galvanized and special SKUs, which are expected to significantly improve the blended EBITDA per ton. This strategic shift is crucial for maintaining margin stability and enhancing profitability.

Hi-Tech Pipes is aggressively pursuing capacity expansion, aiming to reach 2 million tonnes of installed capacity by FY29. A new greenfield facility in Sikandrabad, Uttar Pradesh, is in its final commissioning stages and is slated to begin commercial production in Q3 FY26. This facility will specialize in ERW steel pipes for high-growth sectors such as infrastructure, defense, and renewable energy, strategically enhancing market penetration in North India. Concurrently, the brownfield expansion of Sanand Unit-2 (Phase II) in Gujarat is expected to commence commercial operations in Q2 FY26, focusing on renewable energy and infrastructure solutions. These expansions are entirely funded through internal accruals, underscoring the company's strong cash generation and prudent financial management.

In line with its value-added strategy, Hi-Tech Pipes has launched several new products, including fire-fighting system pipes, CRFH pipes for furniture and high-end segments, and galvanized section pipes. A notable innovation is the 'ZAM' pipe with self-healing technology for fire-fighting applications, which offers superior corrosion protection. The company's value-added product share is targeted to reach 41-42% by the end of FY26 and 45-47% by FY27. Furthermore, Hi-Tech Pipes is actively contributing to national infrastructure initiatives, supplying high-quality ERW steel pipes for projects like the Indian Railways' Kavach Anti-Collision System and the BSF's Modular Multi-Layered High-Strength Border Fencing, reinforcing its role as a trusted partner in national development.

Financial Discipline and Future Outlook

While the company's debt-to-equity ratio saw a slight increase from 0.15x in H1 FY25 to 0.21x in H1 FY26, and the current ratio decreased from 2.38x to 2.09x, management emphasized that the balance sheet remains healthy, demonstrating sound liquidity. The Return on Capital Employed (ROCE) declined from 14.35% to 11.44% in H1 FY26, and Net Working Capital Days increased from 52 to 56 days. However, the management is confident that with new capacities coming online and a sustained focus on high-margin products, these metrics will improve.

Management guidance indicates overall volumes for FY26 are expected to be between 5.5 lakh to 6 lakh tons. Capex for FY26 is projected at approximately INR 200 crores, with FY27 capex estimated at INR 120-130 crores. The company anticipates a significant improvement in EBITDA per ton in H2 FY26 due to stabilized steel prices and a higher contribution from value-added products. The strategic foray into API-grade pipe manufacturing is also expected to enhance margins and diversify the end-user base. Hi-Tech Pipes remains committed to responsible growth through energy-efficient operations, process digitization, and a sustainability-oriented approach, aiming to create long-term stakeholder value.

Hi-Tech Pipes Limited's Q2 and H1 FY26 performance, coupled with its robust strategic initiatives, underscores its resilience and forward-looking vision. The company is not just navigating the present challenges but actively shaping its future through calculated expansions and product innovations, reinforcing its position as a key contributor to India's growing infrastructure needs.