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Check Before You Invest : Hi-Tech Pipes Ltd

BSE: 543411 NSE: HITECH ISIN: INE106T01025
  |   Sector:  Metals & Mining   |   Industry:  Steel & Iron Products

Snapshot

Q.1 Which industry/sub-sector does Hi-Tech Pipes Ltd belong to?
Hi-Tech Pipes Ltd belongs to the Metals & Mining sector, operating specifically within the Steel & Iron Products segment.
Q.2 Is Hi-Tech Pipes Ltd a good quality company?
Hi-Tech Pipes Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Hi-Tech Pipes Ltd undervalued or overvalued?
Hi-Tech Pipes Ltd appears Undervalued, as its key valuation ratios are lower than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 22.81 28.73
Price to Book 1.32 2.38
Price to Sales 0.5 0.59
EV to EBITDA 11.26 13.42
Q.4 Is Hi-Tech Pipes Ltd a good buy now?
Hi-Tech Pipes Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd revenue growth is 13.7% for FY-2025, which is below its 5-year CAGR of 20.46%, indicating slower growth.

Q.2 Gross Profit margin of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Gross profit margin which is the profit after deduction of direct costs, is 3.9% for FY-2025, which is above its 5-year median of 2.9%, indicating increasing margins.

Q.3 Operating Profit Margin of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 5.22% for FY-2025, which is in line with its 5-year median of 5.22% indicating stable margins.

Q.4 Net Profit Margin of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Net Profit Margin is 2.38% for FY-2025, is above its 5-year median of 1.7%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 3.9 2.9
Operating Profit Margin (%) 5.22 5.22
Net Profit Margin (%) 2.38 1.7

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Return on Asset is 4.94%, which is above its 5-year historical median of 4.45%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Return on capital employed is 11.62% for FY-2025, which is below its 5-year historical median of 12.56%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Return on equity is 8.17% for FY-2025, which is below its 5-year historical median of 12.18%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Cash conversion cycle is 53 days, in line with its 5-year historical median of 53 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.08 2.56
ROE (%) 8.17 12.18
ROCE (%) 11.62 12.56
Cash Conversion Cycle 53 days 53 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Debt-to-Equity ratio is 0.15, which is lower the industry average of 0.31, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Hi-Tech Pipes Ltd?
Hi-Tech Pipes Ltd Debt to cash flow from operations is 2.74, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of Hi-Tech Pipes Ltd?

Q.1 Promoter shareholding and pledge status of Hi-Tech Pipes Ltd?
Promoters hold 43.76% of the Hi-Tech Pipes Ltd, with 13.56% of their stake pledged, indicating high pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Hi-Tech Pipes Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Hi-Tech Pipes Ltd vs industry peers?
Hi-Tech Pipes Ltd revenue CAGR is 20.46%, compared to the industry median CAGR of 7.56%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 13.7 7.6
Gross Profit Growth (%) 60.8 19.3
Operating Profit Growth (%) 39.1 13.8
Net Profit Growth (%) 65.9 24.6
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.08 1.27
ROE (%) 8.17 8.04
ROCE (%) 11.62 11.28
Cash Conversion Cycle (days) 53.15 72

Valuation & price assessment

Q.1 Stock return of Hi-Tech Pipes Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of -26.32% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- -26.3% 5.3% -10.4%
Q.2 Valuation ratios of Hi-Tech Pipes Ltd vs historical?
The current P/E ratio of 22.81 is lower than its historical median of 28.73, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 22.81 28.73 17.36
Price to Book 1.32 2.38 1.63
Price to Sales 0.5 0.59 0.74
EV to EBITDA 11.26 13.42 10.05

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