Q1FY19 Result: Hi Tech Pipes revenue grew by 59.3 per cent YoY

Hi Tech Pipes (HTP), earlier known as Ram Lal Harbans Lal Limited, is engaged in the production and supply of steel pipes has announced first quarter numbers for FY19. Revenues of the company increased by 59.3 per cent on yearly basis and around 14 per cent sequentially to Rs. 321.5 crore. The revenue growth was driven by higher volumes that grew by 23.5 per cent on annual basis and 9.1 per cent on QoQ basis. Gross margin of the company has seen a marginal decline due to rising steel prices, which is used by the company as raw material.

Nevertheless, on an absolute basis, the gross profit per ton has increased by Rs. 239 per ton on yearly basis. In terms of EBITDA, it grew by 31.6 per cent YoY and 16.5 per cent QoQ to Rs. 17.4 crore. EBITDA per ton improved 6.6 per cent YoY and 6.8 per cent QoQ to Rs. 2,906 per ton due to operational efficiency and increased contribution from the more profitable Western and Southern regions. Adjusted profit of the company stood at Rs. 6.5 crore against Rs. 4.3 crore in the same quarter last year. The additional capacity of 60,000 MTPS at Sanand, Gujarat was commissioned in July and trial productions have started. This year the company is expected to reach 50 per cent capacity utilization. Capacity expansion of Cold rolling of 65,000 MTPA at Sikandrabad for the automobile sector is on stream and is expected to be commissioned in the last quarter of current fiscal. Post expansion, the total capacity of the company will rise to 4,80,000 MTPA.

The company’s future growth is expected to come from increased government spends on drinking water for all schemes, infrastructure, telecom, affordable housing and solar energy. Also, implementation of GST has resulted in a demand shift from the unorganized sector to the organized sector.

The share price of the company is currently trading at Rs 280.2 up by 2.06% from the previous close.