Hi-tech Pipes Ltd

Ladies and gentlemen, good day and welcome to the Q4 FY"25 Eamnings Conference Call hosted by Hi-Tech Pipes Limited.

I now hand the conference over to Mr. Anish Bansal - Whole-Time Dircctor of Hi-Tech Pipes Limited. Thank you and over to you, sir.

Good afternoon, ladies and gentlemen. It is a pleasure to welcome you to the Q4 and full-year FY’25 Earnings Call of Hi-Tech Pipes Limited. I am joined today by Mr. Arvind Bansal — Executive Dircctor & Group CFO, and Mr. Arun Sharma — Company Secretary and Compliance Officer.

We arc honored to conneet with our esteemed Envestors, Analysts, and Partners. Let us dive straight into what has been an exciting and milestone-filled year for Hi-Tech Pipes.

Annualized, this fiscal year was truly transformational. Revenue jumped 14% Y-O-Y to Rs. 3,068 crores, our highest ever supported by record sales volume. Sales volume soared 24%, reaching 4,85.447 tons, a new benchmark for the company. Profitability improved significantly, with PAT rising 66% Y-O-Y to Rs.72.95 crores, driven by operational excellence and improved ‘margins.

Now coming to the financial health. Net working capital days shrunk down to 52 days from 63 days, enhancing liquidity and reflecting better operation control. Return on capital employed has improved to 14.34% from Rs. 13.7%. Debt-to-equity ratio has reduced to 0.15. And importantly, credit rating upgraded fo A+, a strong vote of confidence in our governance and financial discipline.

Let me now take you through some of the key operational achievements of the company this year. Hi-Tech Pipes is proud to support two of the nation’s most critical infrastructure initiatives, the first being the Indian Railway’s Kavach anti-collision system, where the company is Page 2 of 11

providing high-quality steel pipes for ts safety. Recently, the company has procured orders from Border Security Force modular multi-layered high-strength border fencing.

The growth from Sanand Unit-2 is now a global supply hub for solar top tubes, vital for solar cnargy infrastructure, serving markets across North America, Europe and the Middle East, delivering high production efficiency, scalc and exports, a new symbol of our make-in-India, export-to-world strategy. Additionally, we have successfiily commissioned a new hot-dip galvanizing facility at our Hindupur plant in Andhra Pradesh, cnabling us to meet growing demands for corrosion-resistant stecl pipes. In the last year, we have launched several new SKUS, notably the higher, the large diameter hollow sections such as 250x250 and 300x200.

Now, coming to the project implementation progress:

The Greenficld plant at Secunderabad is under advanced stage of commissioning. The unit is a pivotal part of our roadmap to achicve 1 million tons of production capacity by FY"26. The facility will produce specialized ERW steel pipes cataring to infiastructure, defense and rencwable scctors. Sccondly, the Brownficld expansion at Sanand Unit-2. Our Sanand Unit-2 expansion aimed at serving infrastructure and energy sectors. This is in line with our strategy to cnhance value-added products offering while optimizing the existing plant ccosystem. Now, coming to the branding:

The company has amplificd its brand awareness through various projects. For example, Maha Kumbh in Prayagraj and the enhanced visibility at all the Gujarat and UP airports. Additionally, robust grassroots campaigns through dealer signages, wall paintings and local activations.

Now, we may open the floor for questions.

Thank you, sir. We will now begin with the question-and-answer session. The first question comes from the line of Vikas Singh from PhillipCapital. Please go ahead.

The first question is regarding FY"26 volume and EBITDA per tum guidance as well as the value-added mix which we are targeting.

For this year, we have done 4,85,000 tons net sales volume and FY26, we are targeting upwards of 600,000 tons. And the EBITDA should range from Rs. 3,500 to Rs. 4,000 per ton for the full year. And the value-added share right now, we have closed this year at 38% And with the new Page 3 of 11

facilities and the recently installed galvanizing facility in Hindupur, we should be around 42% - 43% by end of FY"26.

Given your guidance shall we assume that the 1-million-ton capacity expansion is coming in the first half itself otherwise, that 600,000 tons of volume would be difficult?

Yes, sir. So itis on track. We are in a very-very advanced stage of commissioning and the trial productions will be starting from the upcoming quarter.

My sceond question is regarding the networking capital days. It basically came down to almost 49 in FY23. Since then, it's increasing. Given we ate going to push more volume, how should welook at this networking capital days? It would be flattish or you expect it to come down? And by how much, if you could give us some idea regarding that?

This year, we have come down from 63 days to 52 days. So, you know, there is already an improvement of 11 days. And going forward also, I think there should be further improvement in the net working capital days.

Lastly, on the competitive intensity, almost everybody is putting identical products. And we have seen that a couple of large players have seen some margin push or competition in the common segment. So how is our thought process regarding that? And because we arc also talking about EBITDA per turn improvement, can I ask what is the EBITDA per turn in April or May, on a monthly basis as well? ‘This is an ongoing quarter, and we are in the middle of this quarter. But it is decent right now and we will have to sce the next month or month-and-a-half looks like. Coming back to the comptition, we are confident of adding 25% sales volume every year. So that s our main target.

And in the last many years we have focused there, and we have been able to achicve that.

Because of new products, geographical cxpansion, product expansion, and through matketing strategics, the company is alrcady doing well in exports also. So, combined, the market is there for us and it is more about execution.

One last question. Gensol was one of our customers. So, do we have a major exposure to that or is some minor one and we should not be worried about any bad debts?

One of their subsidics was our customer for the solar segment. And I guess in that volume there was an impact, but it is not significant in the overall scheme of things. And within solar also, it was less than 10% in our solar customer profile. So, it is not a big impact.

The next question comes from the line of Krish, an individual investor. Please go ahead. Page 4 of 11

I just have two questions. So, the first one is, if I look at the stedl tariffs, similar tariffs, were imposed by US back in 2018 and there we saw steel prices crashing after that, like there was a spike and then they dropped down significantly and all the steel players were affected really badly, especially with China dumping them in the global market. So, given the similar scenario now, are we optimistic about the quarters that are coming forth or do you sce something similar playing out?

You are absolutely right. You know, they were because of the stecl tariffs imposed by US for worldwide steel mills. This is definitcly a concern. But the Indian government proactively, have introduced a safeguard duty of 12% on imported stecl. So, there is an insulation from these global shocks. And what import was coming like 1- 1.5 years ago it has come down quite drastically in last 6-8 months. And this duty is for 200 days and if the findings are there, then this will be extended to 3 years. So, we have this insulation of external price shocks.

But largely this 12% duty, is this considered to be sufficient by the market? And was a similar thing not there in place back in 20187 No, that time it was not there and this 12% is on top of the custom duty, which is 7.5%. Then there is a cess also, So, all in all, it becomes 21%-22% blended, which is a significant deterrent.

And these things were not existing back in 20182 No, not at that time. ‘The last question is, we had projected for a volume of 500,000 tons for FY"25. And judging by the first three quarters, it was going quite well. Why was there sort of a slack in Q4 in terms of volume?

As Vikas ji had mentioned there were orders from this company, which was a subsidiary of Gensol, where we had these orders in hand, but then we had planned for these order exceutions, butit did not happen in this quarter. So, there was a small deviation there. Overall, if you sce out of 500,000 tons, so we have done 4,85,000 tons. We are very near and because of this issue, there was a loss of lttle quantity. Otherwise, we arc on track.

So just to confirm, due o these tariffs, we are not looking at reducing the margin guidance in any way? No, not at all.

The next question comes from the line of Sagar Shah from Spark Capital Private Wealth Management. Please go ahead. Page 5 of 11

Regarding the CAPEX plans- we have the ongoing CAPEX going on at Secunderabad, which T mentioned in my specch, and the Sanand Unit-2 phase 2. So, these are under advanced stages of commissioning and very soon we will be announcing the trial production at both the facilitics.

Along with that, new facilities at Sri City in Chennai that is already on the ground development wotk has started there. The Sanand Phase-3 of Unit-2, that is also under start. So, by end of this financial year, we will be at a 1 million ton capacity. And we will be on another 25%-30% capacity increase in FY"27.

Basically 1 million tons that is including the Sanand Phase-3 and the Sri City expansion or without that? No, without that.

So, we will equate to around 1 million tons to be preciscly along with all the entire capacity that you are talking of, including the Sccunderabad, Sanand, Hindupur and Khopoli, right? Yes.

My sccond question is related to your guidance that you have just given of supassing 6 lakh tons of capacity. So, what are the drivers for that? Are you expecting some more client addition into your bookease, such as more solar power companies or maybe some more real estate developments? What exactly are the drivers for increase in the volumes actually for FY*26?

Sagar ji, there will be an improvement in the sales. This is not the capacity actually these arc the net sales volume, 6 lakh tons. So, 1 lakh ton additional sales. We will be sclling this through our existing distribution channels. There is sufficient demand for our products. Rightly as you mentioned solar being one of the major one where the growth is coming from and we have a very strong focus on this segment. Also because of the geographical reach, we have been able to penctrate this market in a very proactive manner. And apart from this, I mentioned a lot of new requirement and demand is coming from the railways also. So, this also helping the company in higher volumes.

And my last question is related to our OPEX actually for this quarter. Under other expenses, it came by almost half actually in this quarter at 14 crores compared to 28 crores last quarter. Page 6 of 11

Where was the divergence so much actually in just a matter of 3 months, can you explain the difference?

Actually, in the other cxpenses, in Quarter 1, 2, and 3 are the limited revenues and this quarter, this is the final audited number. So, you know, in the year-end, some adjustments are always there on a full year basis. One reason is this and sccond is, as we are expanding our capacitics, some capitalization of expenses is also there, which has been accounted for.

Capitalization led to reduction in expenses.

Actually, in carlier quarters, it is only a limited review. Year-end adjustment is always there, which is being reflected in Q4 and being the balancing figure of the year-end. But if you see on a year-on-year basis other expenses mumbers are at par.

No, no. Last year also, other expenses was at 28 crores.

Tam talking about full year numbers. On a full year basis, last year was Rs. 90.50 crores and this year it s Rs. 90.70 crores. Yes, that s the same. Okay, thank you.

The next question comes from the line of Radha from B&K Scauritics. Please go ahead. Year-on-year our volumes have grown by 24% on a full year basis. I am assuming similarly our raw material procurement would have gone up in the same range. With this kind of growth, what is the incremental discount per ton that the company is getting in terms of raw material procurement in FY’25 when we compare it with FY’24? ‘This bracket where we are operating right now, it is more or less the same. But after this, after the company becomes like a 7-8 lakh ton player, then there will be a significant difference in the costing per ton. Right now, we are in the bracket where the slabs arc the same. But as we move upwards of 6.5-7 lakh tons, then there is an additional change there.

Any numbers that you can give on a per ton basis? What would be the estimated discount post we reach that level? ‘That depends on several factors, the market conditions and everything. So, that will happen when it happens. I think FY"27 is the right period and now it is almost a year and a half away, so we are focusing on the current financial year. But of course, the higher volumes is part of our costing strategy also. Page 7 of 11

If we talk on the basis of index numbers, suppose now we are doing 4.8 lakh tons of volumes and it should get X percentage of discount. So, when we cross that 7-8 lakh metric ton of volumes can you give some kind of indication what would this X become at those levels?

Radha, you can take a range of Rs. 200 - Rs. 400 per ton. How it will play out that will depend on the market conditions also.

Rs. 200 —Rs. 400 at what level of volumes, sir? 0On 7 lakh tons.

And post that when we cross 1 million ton? In the same percentage proportionately. That was helpful. Secondly, I wanted to understand if the competitor’s procurement is 6x-7x of Hi-Tech, then how will this discount work? Wil it be solely based on volumes or will it be similar to the largest player or will it remain the same for all?

There are freight factors also, the landed price also. And the mills, there is one slab that is the highest slab it works out. There is one after a certain threshold where the discounts are maximized. At a million-ton level all the players are more or less in a very similar range of costing.

So, what Tunderstood is at 1-million-ton production, the raw material discount would be similar for all the players. And there is a certain threshold post which the procurement or discount would increase for those players.

Yes. So, discounting becomes very, very similar at that level.

Sorry, sit. Just a confiision. At 1 million tons, it is similar for all players. And what is the threshold post which it would be higher for higher volumes? ‘What T have told you s at 1-million-ton level the pricing structure, the costing structure and the discount structure is very very similar for all the players. Okay, understood.

The next question comes from the line of Pallav Agarwal from Antique Stock Broking. Please g0 ahead. Page 8 of 11

First question is on this purchase of stock in trade. This quarter also, it has been pretty high at 75 crores. So, what exactly is this? Is this more of a trading business or what s the natwe of this? ‘This is not trading. Basically, some inventory that is stuck with the company, some odd sizes, some odd widths are there, some material defects are there. So, this is the sale of those items. In the overall scheme of things, it is just 5% - 5%% percent. It is not a significant number.

Will this sustain every quarter, or this is more of a onc-off? ‘This is ongoing, and this has been ongoing for several years and it is across the industry. So, there are a lot of stuck material which need to be liquidated on time.

So, this is something that we produce or s it something that we have purchased and we have got stuck with it? Both.

The other thing s on the broad market trends. Now, post safeguard duty HRC has again gone up. Is there more competition from Petra pipes now, given that the premium has gone up again?

Actually, there is lot of market distinction that has taken place. So, Petra players have formed their own market and the branded players, and the organized players have their own market. It is not a big impact. As you have seen we have done higher sales of 24% volume wise. For us, we are finding our new markets and new products and cutting-edge products. So, that is not a big issue right now.

Also, if you could just tell us what are the warrants outstanding and how nmuch of money can probably come in, whether it will come in FY’26 or FY"27?

No, there is nothing pending for conversion.

Okay, everything is converted. So, there will be no more dilution then going ahead. Yes.

Just lastly, this year because of the QIP we would have ended with a net cash position right now, tight? T do not think we would be having any debt on our books, including working capital.

Basically, long-term capital has been gone, but with the new increased volumes, some working capital will be there.

But that will not be very material. It will be in relation with our volumes. Page 9 of 11

Yes, absolutely.

And with working capital days coming down that also should help reduce the working capital debt? Yes, sir.

Lastly, on the CAPEX absolute, any guidance for FY26-27, what type of CAPEX outlay we are looking at? Approximately 200 crores. Each year, sir, or across both years? For this year, FY’26.

And then the incremental 1 million ton, that would entail a separate CAPEX? Yes, sir.

The next question comes from the line of Mayank from Arabian Machinery & Heavy Equipment Company. Please go ahead.

My first question is on the tariff thing. Just want to understand what kind of tariff differential we have with respect to China, if we export from India to US, is there any number we have?

Mayank ji, as we all know this is a contimously evolving situation, every day every week these tariffs which US is imposing, they arc changing, and they are being deferred, or they are being reimplemented. So, it is quite a volatile situation right now and simultancously you are already aware that the Indian government is pursuing the bi-lateral rade agreement with US and China is also trying for some trade deal, but it has not yet been done, as of now. It is quite a volatile situation we are watching. Right now, India definitely has an upper hand when it comes to exporting to the US matket. India would be perhaps in the lowest band right now for the tariffs because they have imposed for Canada, Mexico, Korea and other countrics also. 1 am just trying to understand the export opportunity which many players in this segment is trying to get hold of. What do you think in the next 2-3 years if this situation prevails or tariff uncertainty remains?

Export definitely is a very big opportunity provided all the trade deals and agreements arc in place. India should be a net exporter of steel products in FY*26. The market is big specially the American market. We are keepinga close watch on this and hopefully the numbers should speak for itsclf. Page 10 of 11

My next question is on product-wise. If you could give a breakdown of your product by the thickness of the pipe, your market share number would be helpful in terms of the thickness of the pipe that you scll.

Itis a wide mnge of thickness we are operating in starting from 1mm and going up to 12mm.

There is a matket for every thickness depending on the size.

We are leaders in what kind of thickness because in one of the concall you mentioned that difference between the Patras price and the HRC price also depends on thickness what we arc producing. Therefore, I am just trying to understand the price gap with respect to your product.

As Imentioned calier, our market is quite different where the approvals are required, the pipe has to be PIS, it has to be widely available and all the 1500-1600 SKUS should be there but to give you the answer. You know our main range is between 3 mm to 10 mm.

And what would be your market shar in this range, any number?

Our market share, in this will be approximately our total matket share which is about 8% to 9%.

And lastly, in terms of interest expense, next year what kind of interest expense we should expect if you could give any mumber for FY26.

Ithink largely it should be in the same range. Rs. 44 crores to Rs. 45 cr Yes. Okay sir. Thank you. That is it from me.

Thank you. Ladics and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Anish Bansal for his closing remarks.

Thank you all for your active participation today. FY"25 was a landmark year for Hi-Tech defined by record-breaking revenues, exceptional profitability and strategic milestoncs. Bolstered by strong momentum, infrastructure, defense and energy, we are advancing decisively towards our 2 million capacity vision by FY"29. Your trust and partnership remain pivotal in our progress, and we are committed to driving sustained value creation through innovation and disciplined execution. We appreciate your continued confidence and look forward to sharing our next phase of growth. Stay well. Thank you.

Thank you, Sir. Ladics and gentlemen, on behalf of Hi-Tech Pipes Limited, that concludes this conference, Thank you for joining us and you may now disconnect your lines. Page 11 of 11