Shares of welded steel pipe maker Hi-Tech Pipes declined sharply on Wednesday, after reporting a marginal drop in quarterly net profit amid rising revenues and an expansion in sales volumes, highlighting the pressure on profit margins despite strong demand from infrastructure and construction sectors.
Hi-Tech Pipes shares fell as much as 8% on Wednesday after the welded steel pipe maker reported a decline in June quarter net profit, even as revenue surged on stronger volumes and broader demand from infrastructure, construction and engineering work. The stock dropped to an intraday low of ₹77.58 before trading at ₹77.81 at 14:58, leaving it well below its 52-week high of ₹127.50, though still above the March low of ₹70.14.
The company said net profit for the quarter ended June was ₹20.04 crore, down from ₹20.92 crore a year earlier. Revenue climbed to ₹1,412.8 crore from ₹791.4 crore, while EBITDA rose 20.3% to ₹49.38 crore. But the operating margin narrowed to 3.5% from 5.2% because expenses increased faster than sales, with total costs rising 81.5% and finance costs nearly doubling to ₹15.67 crore. The jump in raw material and stock-in-trade purchases was a major drag on profitability.
The softer quarterly profit followed a separate update from the company showing that sales volumes rose 26% year on year to 1,56,136 tonnes in the June quarter, supported by a wider product mix, added capacity and steady demand. Business Standard had earlier reported that Hi-Tech Pipes also posted strong volume growth in the March quarter and ended the last fiscal year with revenue of ₹4,200.07 crore and net profit of ₹76.16 crore, underlining the scale of its growth even as margins remain under pressure.
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