In This Article:
Release Date: February 12, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Hi-Tech Pipes Ltd (NSE:HITECH) reported a 21% increase in revenue, reaching 761 crores compared to the previous year.
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Profit before tax grew by 35%, indicating strong financial performance.
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The company is expanding its distribution network, expecting a 10% increase in distributors and dealers by the end of the financial year.
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Significant investments in branding and marketing, including the onboarding of a brand ambassador, to enhance market visibility.
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Credit rating upgraded to A plus for long-term exposure, reflecting strong financial health.
Negative Points
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The company's EBITDA per ton decreased compared to the previous quarter.
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There is uncertainty regarding the impact of new tariffs and safeguard duties on steel prices, which could affect market stability.
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Government capital expenditure has been slow, impacting demand in the current year.
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The company is operating at peak utilization capacity, which may limit immediate growth potential.
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The renewable energy mix is currently at 25-27%, with a target to be net carbon-free by 2030, indicating a long-term transition.
Q & A Highlights
Q: Can you provide a broad view of your regional sales mix across India and highlight areas for potential growth? A: Currently, our manufacturing facilities are in North, West, and South India. North and West each hold a 40% share, while the South accounts for 20%. Moving forward, we aim for a more balanced distribution with 35% each in North and West, and 30% in the South. (Respondent: Executive Director and Group CFO)
Q: What are your plans for improving yields, particularly regarding cold roll and galvanizing lines? A: We currently have three galvanizing lines, with a fourth on the way. This will increase our value-added product share. Additionally, a new DFT line in Gujarat is expected to be operational by the end of FY26 or Q1 FY27. (Respondent: Executive Director and Group CFO)
Q: What percentage of renewable energy is used in your power costs, and what are your future targets? A: Currently, 25-27% of our energy comes from renewable sources. We aim to be net carbon-free by 2030, transitioning entirely to renewable energy within the next 5-6 years. (Respondent: Executive Director and Group CFO)
Q: With the upcoming capacity expansion, what is your product mix strategy for the next phase? A: Post-expansion, we will focus on large hollow sections and solar stock tubes, which are growing segments in India. Our strategy is to shift towards higher value-added products. (Respondent: Executive Director and Group CFO)