This capital goods company delivered over 170% returns in a year; do you hold it?

An investment of Rs 1 lakh in the shares of this company 1 year ago would have turned to Rs 2.7 lakh today. 

Hariom Pipe Industries Ltd, an S&P BSE SmallCap company, has delivered multibagger returns to its shareholders in the last one year. During this period, the company’s share price jumped from Rs 214.70 on 23 May 2022 to Rs 583.75 on 22 May 2023, an increase of 171.89% in the one-year holding period. 

Recent performance highlights 

In the recent quarter Q3FY23, the company’s net profit increased by 8.91% YoY to Rs 10.15 crore. The company’s net sales increased by 16.42% YoY to Rs 122.85 crore from Rs 105.52 crore. PBIDT excluding other income rises by 37.99% to Rs 18.47 crore from Rs 13.39 crore in the same quarter last year. 

The company is currently trading at a PE of 38.3X against the industry PE of 17X. In FY23, the company delivered an ROE and ROCE of 34.9% and 28.5%, respectively. The company is a constituent of Group B stocks and commands a market capitalization of Rs 1,487.17 crore. 

Company Profile

Hariom Pipe Industries Ltd is an integrated manufacturer of Mild Steel (MS) Pipes, Scaffolding, HR Strips, MS Billets, and Sponge Iron. It uses iron ore to produce Sponge Iron which is then processed across various stages to manufacture its final products viz. MS Pipes and Scaffolding making its manufacturing process cost-effective.’ The company caters to the southern and western Indian markets for its products.  

Growth Drivers  

The company is a premium manufacturer of iron and steel products. The company has gone from strength to strength, evolving into an integrated steel manufacturer with a stronghold in the South Indian market. With a diverse product portfolio consisting of Mild Steel (MS) Billets, Pipes and Tubes, Hot Rolled (HR) Coils, and Scaffolding Systems, its top-quality products cater to a variety of industrial applications across multiple sectors.  

Share price movements    

Today, the share of Hariom Pipe Industries Ltd opened at Rs 580 and has touched a high and low of Rs 584 and Rs 577.20, respectively. So far 381 shares have been traded on the bourses. 

At the time of writing, the shares of Hariom Pipe Industries Ltd were trading at Rs 577.80, a decrease of 1.02% from the previous day’s closing price of Rs 583.75 on BSE. The stock has a 52-week high and low of Rs 603.45 and Rs 180.05 respectively on BSE.