Hi-Tech Pipes Limited — Credit Ratings, 16-12-2024: Credit Rating

Hi-Tech Pipes Limited's credit rating has been upgraded to IND A+/Stable for its fund-based working capital limit of ₹120 crore and to IND A1+ for its non-fund-based working capital limit of ₹5 crore by India Ratings & Research. This upgrade reflects the company's robust revenue and volume growth, improved EBITDA per tonne, diversified product portfolio, and strong operational efficiency, supported by strategic growth initiatives in the steel pipe industry.

In the first half of FY25, Hi-Tech recorded a notable sales volume growth of 33% year-on-year, reaching 2,45,182 MT, driven by the ramp-up of operations at its new Sanand capacity and an increased focus on higher-margin, value-added products. The consolidated revenue for this period stands at ₹1,572.9 crore, compared to ₹2,699.3 crore in FY24 and ₹2,385.8 crore in FY23.

The company’s EBITDA per tonne improved to ₹3,462, with an overall EBITDA of ₹84.9 crore for the half-year, indicating a stable EBITDA margin of 5.4%. Efforts in operational efficiency, alongside cost management measures such as increased use of fixed-priced orders and enhancements in solar power capacity, are expected to positively influence profitability moving forward.

With a diversified product portfolio and a strong geographic presence across India, the company is well-positioned for continued growth. The recent credit rating upgrade suggests enhanced investor confidence. Given these factors, investors may consider buying, as Hi-Tech is poised to capitalize on growing demand within the sector amid ongoing expansion efforts.