Hi-Tech Pipes Share Price Surges On Announcing Credit Rating Upgrade By India Ratings and Research

Hi-Tech Pipes' stock rose to an intraday high of Rs 171.70 on Monday after opening higher on the NSE at Rs 165 per share. With a market value of Rs 3.42KCr, the stock was up 2.60% at Rs 168.49 as of 10:38 a.m. IST. Following the announcement by Hi-Tech Pipes Ltd. that India Ratings and Research Limited has upgraded its credit rating for Fund Based and Non-fund-based working capital limits, the stock price surged. This rating improvement highlights Hi-Tech Pipes' robust revenue and volume growth, enhanced EBITDA per tonne, low concentration risk, diversified product portfolio, operational effectiveness, and strategic growth initiatives that propel the company forward in the ever-changing steel pipe sector.

Mr. Ajay Kumar Bansal, Chairman, Hi-Tech Pipes Ltd, said "I am pleased to announce that India Ratings & Research has upgraded our credit rating for bank facilities. This development underscores our robust financial management, consistent operational excellence, and the trust the financial community places in our company. We take immense pride in our continued progress, solidifying our leadership position in the steel tubes and pipes sector. This recognition further inspires us to accelerate growth, create greater value for all our stakeholders, and remain at the forefront of industry advancements".

In 1HFY25, the company's sales volume increased by a robust 33% year over year to 2,45,182 MT, up from 1,84,814 MT in 1HFY24. During 1HFY25, the company's total revenue was Rs 15,729 million. In Sanand-II, the company's installed capacity is 1,75,000 tonnes per annum (TPA). An additional 1,10,000TPA of pipes and tubes are anticipated to be added during the second phase, which is currently being developed. The factory would increase the company's value-added product offering by producing pipes with a higher diameter. The company is also planning a greenfield development at its Sikandrabad plant (unit-II) to produce steel tubes and pipes. This extension is expected to start operations by the end of FY25 and has a planned capacity of 1,50,000TPA.

Ind-Ra said in a report that it expects Hi-Tech Pipes to achieve robust growth in its revenue and sales volume over the medium term, driven by the continued ramp-up of its operations at the newly-added capacities along with the volume addition from the proposed capacities.

In 1HFY25, HTPL's EBITDA per tonne improved to Rs 3,462, mostly due to a higher volume of value-added products and enhanced operating efficiency. With a consolidated EBITDA of Rs 849 million in 1HFY25, the company's EBITDA margin remained steady at 5.4%. Due to the growing share of value-added products like color-coated sheets, large diameter ERW pipes, galvanised coils, and pipes with better realisations, the company has been able to boost its profitability this year despite lower steel prices. Ind-Ra anticipates that HTPL's profitability will continue to improve over the medium term.

With a network of more than 500 dealers and distributors throughout India, Hi-Tech Pipes is geographically diverse with the company's top 10 customers accounting for around 24% of its consolidated sales in FY24. With an established reputation in steel pipes, hollow sections, tubes, cold rolled coils & strips, road crash barriers, solar mounting structures, GP/GC Sheets, Colour Coated Coils, and a variety of other galvanised products, Hi-Tech Pipes in India has been producing innovative, high-quality products for almost 40 years.