Arihant Capital has given Buy recommendation for Hariom Pipe Industries with a target price of Rs. 403 in its research report issued on May 11, 2022

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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