Hariom Pipe Industries: Navigating Q2 Softness Towards a Robust Future

Hariom Pipe Industries Limited, a prominent player in India's steel sector, recently unveiled its financial and operational performance for the second quarter and first half of the fiscal year 2026 (Q2 & H1 FY26). While the second quarter experienced a slight dip due to planned maintenance and extended monsoons, the company demonstrated underlying resilience and a clear strategic roadmap for future growth, particularly in the burgeoning renewable energy sector.

For the first half of FY26, Hariom Pipe reported a commendable 21% year-on-year growth in both sales volume and revenue, reaching 1.38 lakh metric tonnes and INR 797 crore, respectively. EBITDA also saw a healthy 15% rise, touching INR 100.31 crore. However, Q2 FY26 saw a marginal slowdown, with revenue at INR 335.9 crore (up 7% YoY) and EBITDA at INR 42.7 crore (up 1% YoY). Management attributed this softer Q2 performance to a planned maintenance shutdown at its ISP plant and reduced dispatches during the heavy monsoon season. Despite these temporary headwinds, the company's focus on value-added products and operational efficiency helped maintain strong margins.

Financial Highlights: A Snapshot

(All figures presented are on a standalone basis)

Strategic Thrust: Renewable Energy and Infrastructure

Hariom Pipe Industries is not merely reacting to market conditions but proactively shaping its future through strategic investments and product diversification. A significant highlight is the company's foray into the renewable energy sector. It has successfully developed innovative, high-strength, pre-galvanized tubular sections for solar structures, replacing traditional HR steel channels. These products offer enhanced efficiency, superior durability, and innovative design, positioning Hariom Pipe to capitalize on the booming solar infrastructure market in India and globally.

Further solidifying its commitment to green energy, Hariom Power and Energy Pvt. Ltd., a wholly-owned subsidiary, has received a Letter of Award for a 60 MW AC (72 MW DC) solar power plant with the Maharashtra State Electricity Board. This 18-month project, backed by a 25-year Power Purchase Agreement, is expected to generate approximately 11.52 Million kWh annually, significantly contributing to the company's ESG profile and opening new revenue streams from the sale of solar steel structures.

In a monumental move, Hariom Pipe has also signed a Memorandum of Understanding (MOU) with the Government of Maharashtra to establish a 1.5 million ton per annum (MTPA) integrated steel plant at Gadchiroli. This mega project, with an estimated cost of INR 3,135 crore, will be developed in a phased manner over eight years. It is designed to benefit from substantial fiscal incentives, including GST reimbursements and power tariff support, ensuring financial viability without significant equity dilution or increased debt in the initial stages. This strategic backward integration will enhance manufacturing capabilities, achieve cost efficiencies, and secure raw material supply, reinforcing the company's long-term growth trajectory.

Operational Excellence and Market Leadership

Hariom Pipe's operational strategy is built on a vertically integrated model, which is a key differentiator. Being one of the few players with end-to-end backward integration for hot charging, the company can generate superior margins and save costs related to logistics, electricity, burning loss, and coal consumption. This integrated approach, from sponge iron to finished pipes, provides natural hedging, operational flexibility, and cost efficiency across the value chain.

The company holds a commanding 13% market share in the specialized 0.3-2.5 mm thin steel segment (FY25), which accounts for approximately 15% of India's total steel consumption. This leadership position is bolstered by continuous technology and process innovation, including the capability to produce joint-free pipes, ultra-thin pipes (down to 0.4mm), and a comprehensive product range of over 800 SKUs. Hariom Pipe's extensive dealer and B2B network, comprising over 900 dealers and clients across Southern and Western India, ensures deep market penetration and diversified revenue streams.

Outlook and Management Confidence

Despite the Q2 softness, management expressed strong confidence in achieving its full-year volume growth target of 30%, driven by robust demand from infrastructure projects, government policies, and expansion into OEM and B2B segments. The company aims for a 30-35% volume CAGR over the next two years, expecting existing capacity to be fully utilized by next year. EBITDA and PAT margins are also projected to improve, fueled by growth in the B2B and OEM sectors.

Hariom Pipe's strategic emphasis on the thin steel segment, integrated operations, and expanding distribution network positions it for accelerated expansion. The company's disciplined approach to capital allocation, strong balance sheet, and proactive engagement in the renewable energy sector underscore its commitment to sustainable, profitable growth and consistent value creation for all stakeholders. The management's transparent communication regarding Q2 challenges and clear articulation of future plans instill confidence in its ability to navigate market dynamics and capitalize on emerging opportunities.