Arihant Capital management meet: (was in Sep-oct I guess)
-Tubes & Pipes have various uses… it has never ending usage, it is from frem to automobile to gas to water everywhere
-Using advanced technologies to save cost & lower wastage & power
-No Capex is required till FY26
-Capacity utilization is below 50% in FY23 & with growing sales & volume… utilization can improve & operating Lvg will take into play
-Only in Value added category, No commodity products & not any intention to enter the commodity market (Targeting Value & Low competition area)
-Pipe has higher margins than Coil
-CFO: Had done Greenfield Capex… it requires time to stabilize & in next 6-8 months it will normalise (Warrant money will be credited in next 12-18 month… take care of cash need)
-Targeting 75%+ growth in FY24 & 50% for FY25 & FY26
-USP is 1.5 & below thickness products (Coil is difficult to get)
-FY24 target is around 1200 Cr Revenue & around 12-13% EBITDA Margin
-Targeting 2500 Cr revenue & Avg. Realisation of Rs. 9500 approx (from now Rs. 7500), Targeting Gujarat & Rajasthan market
-Perundurai plant will target the south market: Kerala, Tamil Nadu & part of Karnataka
-Hyderabad plant will cater to the Gujarat & Orissa side (West & East side)
-Due to forward & backward integration can manufacture products at lowest cost & at fast pace compared to peers
-Perundurai plant will stabilise in H2FY24 and will target further VAP market to expand margin
No Recommendation
Invested & Bias
Hariom Pipe Industries Ltd & Arihant Capital MarketsLtd | Bharat Star Rising Summit 2023
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