Hariom Pipe Industries has witnessed strong revenue growth (47.7% CAGR) from FY19-FY22, strategically located plants with integration, competitive pricing of the products, cost effectiveness, expanding network, experienced management and capacity expansion would drive the growth going forward, highlighted brokerage Arihant Capital in a note.
The brokerage house has a Buy rating on Hariom Pipe Industries shares with a target price of ₹403 per share, implying a potential upside of over 115% from the current stock level. The newly listed stock, that made its market debut last month, is trading below its IPO issue price of ₹153.
Hariom Pipe Industries Ltd reported strong numbers, Q4FY22 revenue grew by 32% year-on-year (YoY) to ₹124 crore, due to higher volumes with better realization per tonne. Profit after tax (PAT) stood at ₹10 crore, which was up over 44% from the same quarter last year.
The employee cost and power & fuel cost increased in terms of sales. The Employee cost in terms of sales stood at 5% vs 3.5% vs Q4FY21. The power and fuel cost in terms of sales stood at 12.2% vs 10.4% in Q4FY21. The power and fuel cost rose across the industry due to unavailability of coals & fuels and supply chain disruptions in international markets, the note stated.
“The backward integration between Unit I and Unit II plants leads to cost effectiveness. The cost effectiveness is yielding better returns compared to other players,” Arihant Capital added.
Headquartered in Hyderabad and incorporated in 2007, the company has a diverse product portfolio consisting of Mild Steel (MS) billets, Pipes and tubes, Hot Rolled (HR) voils and scaffolding systems and caters to diverse end-use industries such as housing, infrastructure, agriculture, automotive, solar, fabrication and engineering.
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