Buy Hariom Pipe Industries; target of Rs 403: Arihant Capital

Arihant Capital's research report on Hariom Pipe Industries

Hariom Pipe Industries Ltd (HPIL) reported strong numbers, FY22 revenue stood at INR 431cr (+69% YoY); beats our estimates of INR 410cr. EBITDA stood at INR 56cr (+19% YoY), in line with our estimates of INR 55cr. EBITDA Margin contracted by 46 bps to 13% vs 13.5% in FY21. The slight reduction in EBITDA Margin mainly due to increase in employee cost in terms of sales. In FY22, employee cost in terms of sales stood at 5% vs 3.7% in FY21. PAT stood at INR 32cr (111% YoY) vs our estimates of INR 27cr, PAT Margin expanded by 147bps to 7.4% vs 6% in FY21.

Outlook

We have a BUY rating at a TP of INR 403 per share; valued at EV/EBITDA multiple 4.2x and its FY24E EBITDA of INR 186cr; an upside of 102.6%.

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