📦 1. At a Glance
Hariom Pipe clocked 35% YoY volume growth in Q1FY26, with 96% of sales coming from high-margin value-added products like MS tubes, scaffolding, and GP pipes. A vertically integrated play in the steel space, it has built a moat from sponge iron to final product. And it’s showing in numbers, even if the stock is still recovering from a 20% fall.
🎬 2. Hook: From Sponge Iron to FII Magnet?
Imagine a small-cap steel player that:
- Has 800+ SKUs (no, not school uniforms, actual products)
- Makes its own raw material (billets, sponge iron) and sells finished pipes
- And quietly grew FIIs from 2% to 9.5% in one year 💸
While APL Apollo hogs headlines, Hariom Pipe just grinds. Q1FY26 was one of those “don’t ignore me” quarters. Let’s get our hands dirty.
🏭 3. WTF Do They Even Do?
Hariom Pipe is a vertically integrated steel processor, meaning:
- Raw material: Sponge iron + billets (self-produced)
- Midstream: HR coils, CR coils
- Finished goods: MS pipes, GP pipes, scaffolding
It operates across:
- Telangana, Andhra Pradesh, Tamil Nadu
- Total capacity: ~7 lakh MTPA
- 800+ SKUs, dominant in South & West India
Basically, they make all the metal stuff your under-construction neighbor is hammering at 6 AM.
📊 4. Financials – Profit, Margins, ROE, Growth
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹644 Cr | ₹1,153 Cr | ₹1,357 Cr |
| Net Profit | ₹46 Cr | ₹57 Cr | ₹62 Cr |
| OPM | 13% | 12% | 13% |
| ROE | 16.7% | 19.6% | 19.9% |
| 5Y Sales CAGR | — | — | 53% |
| 5Y Profit CAGR | — | — | 51% |
Q1FY26 Update:
- Value-Added Product Volume = 75,362 MT (↑36% YoY)
- Total Volume = 78,221 MT (↑35% YoY)
- QoQ growth = 5%
That’s not just steel ka kaam — that’s a manufacturing growth machine.
💸 5. Valuation – Cheap, Meh, or Crack?
- CMP: ₹457
- Market Cap: ₹1,413 Cr
- TTM EPS: ₹19.93
- PE (TTM): ~23x
- Book Value: ₹185 → P/BV ~2.46x
Fair Value Range (Edu-estimated):
🔎 ₹460 – ₹550
- Based on 20–24x FY25 EPS and a 14–15% ROCE ceiling
- APL Apollo trades at 63x PE, Ratnamani at 38x, while Hariom is still in the underdog zone
Verdict? Not “cheap-cheap”, but reasonably priced with upside kicker if volume-led margin growth continues.
🍿 6. What’s Cooking – Triggers & Tantrums
- Q1FY26 beat driven by strong VAP volumes
- Expansion into new geographies beyond South & West
- Rising infra demand (Bharatmala, Jal Jeevan, Railways = pipes galore)
- Product mix tilting toward premium GP/CR/MS tubes
- Recent FII ramp-up hints at under-the-radar institutional confidence
No major tantrums yet. Just low drama, steady grind.
🧾 7. Balance Sheet – How Much Debt, How Many Dreams?
| Year | Total Debt (₹ Cr) | Reserves (₹ Cr) | D/E Ratio |
|---|---|---|---|
| FY22 | ₹87 | ₹84 | 1.0x |
| FY23 | ₹297 | ₹348 | 0.85x |
| FY24 | ₹372 | ₹435 | 0.85x |
| FY25 | ₹401 | ₹542 | 0.74x ✅ |
Debt’s high-ish but stable. No panic signals.
They’ve spent big on CWIP and capex, but balance sheet doesn’t look strained.
💵 8. Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | FCF | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|---|
| FY23 | -₹101 | Negative | -₹222 | ₹426 | +₹104 |
| FY24 | ₹5 | Slightly Positive | -₹182 | ₹74 | -₹102 |
| FY25 | ₹79 | Positive 🎯 | -₹86 | ₹31 | ₹24 |
After two years of capex bleeding, FY25 is where green shoots of free cash flow emerge.
📐 9. Ratios – Sexy or Stressy?
- ROCE: 14.1%
- ROE: 11.9%
- OPM: 13% (steady)
- Debtor Days: 54 (stretching a bit)
- Inventory Days: 149 (high, but steel biz standard)
- CCC: 138 Days → needs optimization
- Dividend Yield: 0.13% → 👶 baby yield
Nothing wild. Solid B+ student vibes.
💰 10. P&L Breakdown – Show Me the Money
FY25 Snapshot:
- Revenue: ₹1,357 Cr (↑18%)
- EBITDA: ₹175 Cr
- PAT: ₹62 Cr
- EPS: ₹19.9
- Operating Leverage kicking in: Fixed costs steady, volumes up
- Contribution margin higher in scaffolding, GP pipe segment
Margins holding even as topline scales = underrated sign of maturity.
🧩 11. Peer Comparison – Who Else is in the Game?
| Company | PE | ROCE | OPM | Mcap (Cr) |
|---|---|---|---|---|
| APL Apollo | 63.8x | 22.8% | 5.8% | ₹48,288 |
| Ratnamani | 38.0x | 21.6% | 15.9% | ₹20,597 |
| Shyam Metalics | 26.7x | 12% | 12.3% | ₹24,245 |
| Hariom Pipe | 22.9x | 14.1% | 12.9% | ₹1,413 |
Hariom sits at the bottom of the PE heap, but has similar or better OPM than the “big bois.”
🧾 12. Misc – Shareholding, Promoters, FYI
- Promoter Holding: Down from 66% → 57.27%
- FII Holding: 🚀 from 2.5% → 9.49% in 5 quarters
- Public Holding: Steady ~33%
- No. of shareholders: 54,056 and growing
Clearly, smart money is sniffing value.
⚖️ 13. EduInvesting Verdict™
Hariom Pipe is not just another pipe stock. It’s a rare vertically integrated small-cap that:
- Makes its own raw material ✅
- Controls its product mix ✅
- Just delivered 35%+ YoY growth ✅
- Trades at a fair valuation ✅
- And is finally spitting cash ✅
It’s not flashy. It’s not frothy.
But it is fundamentally ferocious — and FII-verified.
🧮 Fair Value Range: ₹460 – ₹550
(Based on 20–24x FY25 EPS of ₹19.93 with optionality for margin expansion + cash flow ramp-up)
✍️ Written by Prashant | 📅 July 8, 2025
Tags: Hariom, Q1FY26 Results, Steel Stocks, Smallcap Manufacturing, Scaffolding, CR Pipes, APL Apollo Peers, Value-Added Products, South India Steel, EduInvesting Q1 Wrap
